Note 5 - Premises, Equipment and Leases

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Premises, Equipment and Leases [Text Block]

5. Premises, Equipment and Leases

Premises and Equipment

Premises and equipment at

December 31

are summarized by major classification as follows:

(Dollar amounts in thousands)	2019		2018
Land	$	5,269	$	5,129
Buildings and improvements		15,127		15,008
Leasehold improvements		1,522		1,519
Furniture, fixtures and equipment		10,539		9,157
Software		3,397		3,347
Construction in progress		321		576
Total		36,175		34,736
Less: accumulated depreciation and amortization		17,134		15,825
Net premises and equipment	$	19,041	$	18,911

Depreciation and amortization expense for the years ended

December 

31,

2019

 and

2018

 were

$1.4

 million and

$1.2

 million, respectively.

Leases

Effective

January 1, 2019,

the Corporation adopted ASU

2016

-

02,

Leases (Topic

842

).  As of

December 31, 2019,

the Corporation leases real estate for

five

branch offices under various operating lease agreements.  The lease agreements have maturity dates ranging from

August 2025

to

December 2056,

including all extension periods.  The Corporation has assumed that there are currently

no

circumstances in which the leases would be terminated before expiration.  The weighted average remaining life of the lease term for these leases was

12.99

years as of

December 31, 2019.

The discount rate used in determining the lease liability for each individual lease was the FHLB fixed advance rate which corresponded with the remaining lease terms as of

January 1, 2019

for leases that existed at adoption.  This methodology will be continued for the commencement of any subsequent lease agreements.  The weighted average discount rate for the leases was

3.49%

as of

December 31, 2019.

The total operating lease costs were

$194,000

for the year ended

December 31, 2019. 

The right-of-use asset, included in other assets, and lease liability, included in other liabilities, were 

$1.5

million and

$1.7

million, respectively, as of

December 31, 2019. 

Rental expense for operating leases classified under ASC

840

was

$208,000

for the year ended

December 31, 2018.

Total estimated rental commitments for the operating leases were as follows as of

December 31, 2019:

(Dollar amounts in thousands)
Year ending December 31:
2020	$	212
2021		217
2022		222
2023		222
2024		227
Thereafter		1,063
Total minimum lease payments		2,163
Discount effect of cash flows		(456	)
Present value of lease liabilities	$	1,707