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)	2020		2019
Land	$	5,290	$	5,269
Buildings and improvements		15,228		15,127
Leasehold improvements		1,541		1,522
Furniture, fixtures and equipment		10,749		10,539
Software		3,440		3,397
Construction in progress		2		321
Total		36,250		36,175
Less: accumulated depreciation and amortization		18,048		17,134
Net premises and equipment	$	18,202	$	19,041

Depreciation and amortization expense for the years ended

December

31,

2020

and

2019

were

$1.4

million and

$1.4

million, respectively.

Leases

As of

December 31, 2020,

the Corporation leases real estate for

five

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

August 2025

December 2056,

including all extension periods. There are currently

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

12.45

years as of

December 31, 2020

compared to

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 was

3.51%

as of

December 31, 2020

compared to

3.49%

as of

December 31, 2019.

The total operating lease costs were

$192,000

and

$194,000,

respectively, for the years ended

December 31, 2020

and

2019.

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

$1.4

million and

$1.6

million, respectively, as of

December 31, 2020,

and

$1.5

million and

$1.7

million, respectively, as of

December 31, 2019.

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

December 31, 2020:

(Dollar amounts in thousands)
Year ending December 31:
2021	$	217
2022		222
2023		222
2024		227
2025		212
Thereafter		851
Total minimum lease payments		1,951
Discount effect of cash flows		(400	)
Present value of lease liabilities	$	1,551