Contingent Liabilities

12 Months Ended

Dec. 31, 2016

Note 18 – Contingent liabilities

The Bank rents, under non-cancelable leases, six of its banking facilities and one commercial loan production office. The original lease for 615 Church Street expired on July 31, 2009. On August 1, 2009, the Bank elected to enter into a new 10 year lease for this property. The Bank has 2.5 years remaining on this lease.

The Bank entered into a lease agreement for 828 Main Street with Jamesview Investments, LLC, a related party which is wholly-owned by William C. Bryant III, a member of the Board of Directors of both Financial and the Bank. The initial term of the lease was 10 years with two five year renewal options for a total of 20 years. The Bank has 7.5 years remaining on this lease including option periods. The total expense to be incurred by the Bank over the remaining course of the lease, including options to extend, is estimated to be $1,755.

In December 2005, the Bank entered into a lease agreement for 4935 Boonsboro Road. The initial term of the lease was five years with two five-year renewal options for a total of 15 years. The Bank has 4 years remaining on this lease and no remaining option periods.

In September 2013, the Bank entered into a lease agreement for 1430 Rolkin Court in Charlottesville, VA. Lease payments did not begin on the property until the upfit was completed on January 1, 2014. The initial term of the lease was five years with one five-year renewal option for a total of 10 years. The Bank has 7 years remaining on this lease including the one option period.

In July 2015, the Bank entered into a lease agreement for 225 Merchant Walk Avenue, Charlottesville, VA. Lease payments did not begin on the property until the upfit was completed in November 2016. The initial term of the lease was 10 years with two five-year renewal options for a total of 20 years. The Bank has 20 years remaining on this lease including the two option periods.

In August 2016, the Bank entered into a land only lease for a temporary branch location at 180 Old Courthouse Road, Appomattox, VA. This initial term of the lease was six months. This lease expired on February 28, 2017 and the Bank is leasing the property on a month-to-month basis.

In November 2016, the Bank entered into a lease agreement for 3564 Electric Road, Roanoke, VA. Lease payments do not begin on the property until February 1, 2017. The initial term of the lease was five years with two five year renewal options for a total of 15 years. The Bank has 15 years remaining on this lease including the two option periods.

Rental expenses under operating leases were $569 and $530 for the years ended December 31, 2016 and 2015, respectively.

Note 18 – Contingent liabilities (continued)

The current minimum annual rental commitments under the non-cancelable leases in effect at December 31, 2016 are as follows:


	Year Ending	Amount
	2017	$632
	2018	643
	2019	430
	2020	173
	2021	116
	Thereafter	383

		$2,377