Premises and Equipment

12 Months Ended

Dec. 31, 2012

Note 15—Premises and Equipment

Premises and equipment are described as follows:


	Estimated Useful Life	2012		2011
	(dollars in thousands)
Land	Indefinite	$	12,503	$	12,513
Buildings and improvements	10-50 years		81,328		81,072
Leasehold improvements	5-40 years		14,617		14,536
Furniture and equipment	3-10 years		79,181		79,722
Software	3-10 years		40,199		33,479

Subtotal			227,828		221,322
Less accumulated depreciation and amortization			158,858		154,567

Total premises and equipment		$	68,970	$	66,755

Depreciation related to premises and equipment included in noninterest expense for the years ended December 31, 2012, 2011 and 2010 amounted to $7.9 million, $8.3 million and $8.6 million, respectively.

First Commonwealth leases various premises and assorted equipment under non-cancelable agreements. Total future minimal rental commitments at December 31, 2012, were as follows:


	Premises		Equipment
	(dollars in thousands)
2013	$	3,341	$	207
2014		3,166		18
2015		2,979		0
2016		2,795		0
2017		2,544		0
Therafter		17,070		0

Total	$	31,895	$	225

Included in the lease commitments above is $431 thousand in lease payments to be paid under a sale-leaseback arrangement. The sale-leaseback transaction occurred in 2005 and resulted in a gain of $297 thousand on the sale of a branch that is being recognized over the 15 year lease term through 2020.

Increases in utilities and taxes that may be passed on to the lessee under the terms of various lease agreements are not reflected in the above table. However, certain lease agreements provide for increases in rental payments based upon historical increases in the consumer price index or the lessor’s cost of operating the facility, and are included in the minimum lease commitments. Additionally, the table above includes rent expense that is recognized for rent holidays and during construction periods. Total lease expense amounted to $4.3 million in 2012, and $4.4 million in both 2011 and 2010.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

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