Premises and Equipment

12 Months Ended

Dec. 31, 2014

Property, Plant and Equipment [Abstract]

7. Premises and Equipment

The following summarizes premises and equipment at December 31, 2014 and 2013:


	2014		2013
Land	$	4,726	$	4,412
Premises and leasehold improvements		35,839		28,764
Furniture and equipment		24,137		20,248
Construction in process		3,506		3,924

		68,208		57,348
Less: accumulated depreciation		32,830		25,759

Premises and equipment, net	$	35,378	$	31,589

Depreciation on premises and equipment amounted to $2,659 in 2014, $2,147 in 2013, and $1,948 in 2012.

In 2014, the Corporation entered into a contractual commitment to remodel its main office facility in Clearfield, Pennsylvania at a cost of $2,734. Construction has commenced with $1,740 in construction-related expenditures incurred as of December 31, 2014. The project is expected to be completed by the end of the fourth quarter of 2015.

In 2014, the Corporation entered into a contractual commitment to construct a branch facility in Erie, Pennsylvania at a cost of $1,445. Construction has commenced with $1,360 in construction-related expenditures incurred as of December 31, 2014. The project is expected to be completed by the end of the first quarter of 2015.

The Corporation is committed under twenty-three noncancelable operating leases for facilities and nine noncancelable operating leases for vehicles with initial or remaining terms in excess of one year. The minimum annual rental commitments under these leases at December 31, 2014 are as follows:


2015	$	841
2016		793
2017		603
2018		349
2019		290
Thereafter		1,114

	$	3,990

Rental expense, net of rental income, charged to occupancy expense for 2014, 2013, and 2012 was $736, $490, and $351, respectively.

In December 2009, the Corporation entered into a sale-leaseback transaction for real estate used in the operations of one of its branch office locations. The lease term is seventeen years, with two automatic renewal terms of five years each. The Corporation sold the property for $1,200 but financed the entire sales amount. Because the buyer/lessor did not make an initial investment on the purchase of the real estate that is adequate to transfer the risks and rewards of ownership, the Corporation deferred the entire gain of $489 associated with this transaction, which is included in accrued interest payable and other liabilities in the accompanying consolidated balance sheet. The gain is being recognized over the term of the loan under the installment method, and the gain recognized was included in other income in the accompanying consolidated statements of income and comprehensive income and totaled $19, $17, and $19 in 2014, 2013, and 2012, respectively.

The minimum annual rental commitments under this sale-leaseback transaction at December 31, 2014 are as follows:


2014	$	112
2015		112
2016		112
2017		112
2018		112
Thereafter		781

	$	1,341

- 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.

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