Premises and Equipment

12 Months Ended

Dec. 31, 2023

Property, Plant and Equipment [Abstract]

Note 4 – Premises and Equipment

The following table presents the components of premises and equipment at December 31,:


(Dollars in thousands)	2023		2022
Land	$	3,465	$	3,465
Buildings and improvements	13,393		13,393
Furniture, fixtures and equipment	18,300		17,549
Software	7,140		6,019
Construction in progress	45		508
Leasehold improvements	2,836		2,836
	45,179		43,770
Accumulated depreciation	(24,251)		(20,140)
Premises and equipment, net	$	20,928	$	23,630

Depreciation expense totaled $4.6 million, $4.4 million and $3.3 million for 2023, 2022 and 2021, respectively.

We lease certain premises and equipment under operating and finance leases. At December 31, 2023, we had lease liabilities totaling $14.0 million and right-of-use assets totaling $12.9 million, substantially all of which was related to operating leases. At December 31, 2023, the weighted-average remaining lease term for operating leases was 10.5 years and the weighted-average discount rate used in the measurement of operating lease liabilities was 3.1%.

At December 31, 2022, we had lease liabilities totaling $15.0 million and right-of-use assets totaling $13.9 million, substantially all of which was related to operating leases. At December 31, 2022, the weighted-average remaining lease term for operating leases was 11.6 years, and the weighted-average discount rate used in the measurement of operating lease liabilities was 3.0%.

Lease liabilities and right-of-use assets are reflected in accrued interest payable and other liabilities and accrued interest receivable and other assets, respectively.

The following shows lease costs for the years ended:


(Dollars in thousands)	December 31, 2023		December 31, 2022
Amortization of right-of-use assets, finance leases	$	10	$	57

Operating lease cost	1,795		1,781
Short-term lease cost	8		32
Variable lease cost	38		38
Total lease cost	$	1,851	$	1,908

There were no sale and leaseback transactions, leveraged leases or lease transactions with related parties during the year ended December 31, 2023.

For operating leases with initial or remaining terms of one year or more as of December 31, 2023, the following table presents future minimum payments for the twelve month periods ended December 31:



(Dollars in thousands)	Operating Leases
2024	$	1,793
2025	1,738
2026	1,611
2027	1,641
2028	1,629
2029 and thereafter	8,320
Total future minimum lease payments	$	16,732
Less: Amounts representing interest	(2,698)
Present value of net future minimum lease payments	$	14,034

There are no material future minimum payments on finance leases as of December 31, 2023.