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Note 7 - Premises, Equipment, and Leases

12 Months Ended

Dec. 31, 2024

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,*
		*2024*				*2023*
(Amounts in thousands)
Land		$	19,309			$	19,497
Buildings and leasehold improvements			50,903				51,557
Equipment			43,889				42,810
Total premises and equipment			114,101				113,864
Accumulated depreciation and amortization			(65,366	)			(63,184	)
Total premises and equipment, net		$	48,735			$	50,680

There were no impairment charges related to certain long-term investments in land and buildings in 2024, in 2023, or in 2022. Depreciation and amortization expense for premises and equipment was $4.35 million in 2024, $3.95 million in 2023, and $4.15 million in 2022.

Leases

Operating leases are recorded as a right of use (“ROU”) asset and operating lease liability. The ROU asset is recorded in other assets, while the lease liability is recorded in other liabilities on the condensed balance sheet beginning January 1, 2019, when the Company adopted ASU 2016-02, on a prospective basis. 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 ROU asset and lease liability have been recognized based on the present value of the lease payments using a discount rate that represented our incremental borrowing rate at the lease commencement date or the date of adoption of ASU 2016-02. 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 condensed statements of income.

The Company’s current operating leases relate to two existing bank branches 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 $489 thousand as of December 31, 2024, compared to $594 thousand as of December 31, 2023. The operating lease liability as of December 31, 2024, was $515 thousand compared to $620 thousand as of December 31, 2023. The Company’s total operating leases have remaining terms of 3 months to 4.5 years compared with 1 years to 5.5 years as of December 31, 2023. The December 31, 2024, weighted average discount was 3.39%, compared to 3.24% from December 31, 2023.

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

Year		*Amount*
(Amounts in thousands)
2025		$	130
2026			110
2027			101
2028			101
2029 and thereafter			59
Total lease payments			501
Less: Interest			(14	)
Present value of lease liabilities		$	515

Lease expense which is included in occupancy expense on the Consolidated Statement of Income was $178 thousand in 2024, $171 thousand in 2023, and $175 thousand in 2022. The Company maintained no subleases as of December 31, 2024.