Note 8 - Premises, Equipment, and Leases

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

Note

8

.

Premises

,

Equipment

, and

Leases

Premises and Equipment

The following table presents the components of premises and equipment as of the dates indicated:

	December 31,
	2019			2018
(Amounts in thousands)
Land	$	22,899		$	18,090
Buildings and leasehold improvements		52,351			45,079
Equipment		38,173			33,551
Total premises and equipment		113,423			96,720
Accumulated depreciation and amortization		(50,599	)		(50,935	)
Total premises and equipment, net	$	62,824		$	45,785

Impairment charges related to certain long-term investments in land and buildings totaled

$380

thousand in

2019,

$1.01

million in

2018,

and

$677

thousand in

2017.

Depreciation and amortization expense for premises and equipment was

$3.45

million in

2019,

$2.91

million in

2018,

and

$3.56

million in

2017.

Leases

Effective

January 1, 2019,

the Company adopted ASU

2016

-

02,

“Leases (Topic

842

)”; the standard was adopted prospectively. The Company currently has

two

operating leases that are recorded as a right of use (“ROU”) asset and operating lease liability. The right of use asset is recorded in other assets on the consolidated balance sheet, while the lease liability is recorded in other liabilities. The ROU asset represents the right to use an underlying asset during the lease term and the lease liability represents the obligation to make lease payments arising from the lease. The current ROU asset and lease liability were recognized at the adoption date of

January 1, 2019,

based on the present value of the remaining lease payments using a discount rate that represented our incremental borrowing rate at the time of adoption. The lease expense which is comprised of the amortization of the ROU asset and the implicit interest accreted on the lease liability, is recognized on a straight-line basis over the lease term, and is recorded in occupancy expense in the consolidated statements of income.

The Company’s current operating leases relate primarily to bank branches. Two operating leases were acquired in the Highlands transaction; neither of which were for bank branches. One of the leases will terminate in the

first

quarter of

2020;

while the other remaining Highlands’ lease will terminate in early

2022.

No

right ROU was recorded in the transaction due to the ROU asset related to the lease that terminates in

2022

being impaired as of the acquisition date; a lease liability was recorded for

$82

thousand. The Company’s total operating leases have remaining terms of

2

–

10

years. As of

December 31, 2019,

the Company’s ROU asset and lease liability were

$917

thousand and

$1.01

million, respectively. The weighted average discount rate was

3.22%.

Year	Amount
(Amounts in thousands)
2020	$	154
2021		154
2022		131
2023		119
2024 and thereafter		580
Total lease payments		1,138
Less: Interest		(129	)
Present value of lease liabilities	$	1,009

Lease expense was

$203

thousand in

2019,

$318

thousand in

2018,

and

$582

thousand in

2017.

The Company maintained

no

subleases as of

December 31, 2019.