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Premises and Equipment

12 Months Ended

Dec. 31, 2019

Property, Plant and Equipment [Abstract]

Premises and Equipment

CONNECTONE BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 6 - Premises and Equipment

Premises and equipment are summarized as follows:

		Estimated Useful Life (Years)		2019				2018
		(dollars in thousands)
Land		-		$	2,403			$	2,403
Buildings		10-25			15,159				15,277
Furniture, fixtures and equipment		3-7			35,637				29,991
Leasehold improvements		10-20			16,842				14,076
Subtotal					70,041				61,747
Less: accumulated depreciation, amortization and fair value adjustments					50,805				42,685
Total premises and equipment, net				$	19,236			$	19,062

Depreciation and amortization expense of premises and equipment was $3.1 million, $3.1 million and $3.2 million for 2019, 2018 and 2017, respectively.

Finance Leases: The Company acquired a lease agreement for a building under a finance lease. The lease arrangement requires monthly payments through 2028.

The Company has included this lease in premises and equipment as follows:

		2019				2018
		(dollars in thousands)
Finance Lease		$	3,408			$	3,408
Less: accumulated amortization			1,867				1,696
		$	1,541			$	1,712

The following is a schedule by year of future minimum lease payments under the finance lease, together with the present value of net minimum lease payments at December 31, 2019 (dollars in thousands):

2020		321
2021		321
2022		321
2023		323
2024		353
Thereafter		1,381
Total minimum lease payments		3,020
Less amount representing interest		700
Present value of net minimum lease payments	$	2,320

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Table of Contents

CONNECTONE BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 6 - Premises and Equipment – (continued)

The Company leases certain premises and equipment under operating leases. At December 31, 2019, the Company had lease liabilities totaling $16.4 million and right-of-use assets totaling $15.1 million. As of December 31, 2019, the weighted average remaining lease term for operating leases was 7.2 years and the weighted average discount rate used in the measurement of operating lease liabilities was 3.0%. Total lease costs for the year ended December 31, 2019 was $3.1 million.

Rent expense for both the years ended December 31, 2018 and 2017 prior to adoption of ASU 2016-02, was $2.3 million.

A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total operating lease liability is as follows:

		December 31, 2019
		(dollars in thousands)
Lease payments due:
Less than 1 year		$	3,223
1 year through less than 2 years			2,787
2 years through less than 3 years			2,302
3 years through less than 4 years			2,080
4 years through 5 years			1,795
After 5 years			6,287
Total undiscounted cash flows			18,474
Impact of discounting			(2,025	)
Total lease liability		$	16,449

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- References

No definition available.

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- Definition

The entire disclosure for long-lived, physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, accounting policies and methodology, roll forwards, depreciation, depletion and amortization expense, including composite depreciation, accumulated depreciation, depletion and amortization expense, useful lives and method used, income statement disclosures, assets held for sale and public utility disclosures.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 360
-URI http://asc.fasb.org/topic&trid=2155823

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