Note 5 - Premises, Equipment and Leases

12 Months Ended

Dec. 31, 2021

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)	2021		2020
Land	$	4,893	$	5,290
Buildings and improvements		14,361		15,228
Leasehold improvements		1,692		1,541
Furniture, fixtures and equipment		11,196		10,749
Software		3,474		3,440
Construction in progress		61		2
Total		35,677		36,250
Less: accumulated depreciation and amortization		19,233		18,048
Net premises and equipment	$	16,444	$	18,202

Depreciation and amortization expense for the years ended December 31, 2021 and 2020 were $1.4 million and $1.4 million, respectively.

Leases

As of December 31, 2021, the Corporation leases real estate for seven offices under various operating lease agreements.  The lease agreements have maturity dates ranging from June 2024 to December 2056, including all extension periods.  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 10.99 years as of December 31, 2021 compared to 12.45 years as of December 31, 2020.

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 3.21% as of December 31, 2021 compared to 3.51% as of December 31, 2020.

The total operating lease costs were $231,000 and $192,000, respectively, for the years ended December 31, 2021 and 2020.  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, 2021, and $1.4 million and $1.6 million, respectively, as of December 31, 2020.

Total estimated rental commitments for the operating leases were as follows as of December 31, 2021:

(Dollar amounts in thousands)
Year ending December 31:
2022	$	296
2023		296
2024		271
2025		227
2026		144
Thereafter		792
Total minimum lease payments		2,026
Discount effect of cash flows		(363	)
Present value of lease liabilities	$	1,663