Note 7 - Premises, Equipment, and Leases

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

Note 7. Premises, Equipment, and Leases

Premises and Equipment

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

	December 31,
	2022			2021
(Amounts in thousands)
Land	$	19,460		$	20,402
Buildings and leasehold improvements		47,009			48,118
Equipment		40,552			40,501
Total premises and equipment		107,021			109,021
Accumulated depreciation and amortization		(59,681	)		(56,737	)
Total premises and equipment, net	$	47,340		$	52,284

There were no impairment charges related to certain long-term investments in land and buildings in 2022. Impairment charges of $781 thousand were recognized in 2021, and $812 thousand in 2020. Depreciation and amortization expense for premises and equipment was $4.15 million  in 2022, $4.47 million  in 2021, and $4.46 million  in 2020.

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 to one existing bank branch and one operating lease acquired in a prior bank acquisition. The acquired operating lease was for vacant land and will terminate in July of 2029.   The Company's ROU asset was $648 thousand as of   December 31, 2022 compared to $741 thousand as of December 31, 2021.  The operating lease liability as of  December 31, 2022  was $670 thousand compared to $770 thousand as of December 31, 2021.  The Company’s total operating leases have remaining terms of 2 years to 6.5 years compared with 4 months to 7.5 years as of December 31, 2021. The  December 31, 2022  weighted average discount was  3.28%, compared to 3.22% from December 31, 2021.

Future minimum lease payments as of the dates indicated are as follows:

Year	Amount
(Amounts in thousands)
2023	$	119
2024		117
2025		101
2026		101
2027 and thereafter		261
Total lease payments		699
Less: Interest		(29	)
Present value of lease liabilities	$	670

Lease expense which is included in occupancy expense on the Consolidated Statement of Income was $175 thousand  in 2022, $182 thousand in 2021, and $180 thousand  in 2020. The Company maintained no subleases as of December 31, 2022.