NOTE 7: PREMISES AND EQUIPMENT

Premises and equipment at December 31, 2017 and 2016, are summarized as follows:


	December 31,
(Dollars in thousands)	2017		2016
Land	$	13,466	$	14,686
Buildings and leasehold improvements		51,664		52,230
Furniture and equipment		14,887		14,814
Vehicles		202		202
Construction in progress		—		144
		80,219		82,076
Less accumulated depreciation and amortization		(26,612)		(24,562)
Premises and equipment, net	$	53,607	$	57,514

Depreciation expense was $3.4 million, $3.3 million and $3.6 million for the years ended December 31, 2017, 2016 and 2015, respectively, which is included in net occupancy expense on the Company’s consolidated statements of income. Net gains and losses on dispositions of premises and equipment of $742,000, $1.3 million and $20,000 for the years ended December 31, 2017, 2016 and 2015, respectively were recognized and are included in net gain on sale of assets in the consolidated statements of income. See Net Gains on Sales of Premises and Equipment below.

Net Gains on Sales of Premises and Equipment

In September 2017, the Bank completed the sale of its branch located in Huffman, Texas, referred to as the Huffman Branch. Pursuant to a purchase and assumption agreement, the Bank sold premises and equipment and other assets associated with the Huffman Branch valued at approximately $1.4 million and the purchaser assumed approximately $15.0 million in deposits at the Huffman Branch. We recorded a gain of $28,000 as a result of this sale, which is included in net gain on sale of assets in the consolidated statements of income.

In September 2017, we sold the real estate associated with our Deweyville, Texas branch, referred to as the Deweyville Branch. We completed the closing of the Deweyville Branch in December 2017 and the $4.7 million of deposits and $50,000 of loans at the Deweyville Branch were transferred to one of our other nearby branch locations. We recorded a gain of $97,000 as a result of this sale, which is included in net gain on sale of assets in the consolidated statements of income.

In September 2017, we recorded a gain of $554,000 due to settlement of a legal matter related to one of our branches, which is included in net gain on sale of assets in the consolidated statements of income.

During 2016, the Company sold its Washington branch land and building in Houston, Texas and leased space from the owner for the retail branch operations for a ten-year period. The Company determined it has no continuing involvement with the property other than a normal leaseback and therefore the transaction qualified as a sale. The land had a cost of $1.0 million and the building had a net book value of $963,000 at time of sale. A gain of $1.5 million was recorded on the sale and included in net gain on sale of assets on the consolidated statement of income.