Premises and Equipment

12 Months Ended

Dec. 31, 2011

Note 5. Premises and Equipment

A summary of premises and equipment is as follows:

	Useful
	lives		2011			2010			2009

Land			$	684,977		$	684,977		$	684,977
Buildings		5-50 years		5,962,830			5,937,856			5,864,145
Equipment and fixtures		5-30 years		5,182,979			5,200,693			5,093,759
Construction in progress				19,232			39,704			322
				11,850,018			11,863,230			11,643,203
Accumulated depreciation				(7,742,311	)		(7,739,614	)		(7,522,606	)

			$	4,107,707		$	4,123,616		$	4,120,597

Depreciation expense totaled $392,493, $368,248, and $334,465 for the years ended December 31, 2011, 2010, and 2009, respectively. Amortization of software and intangible assets totaled $40,154, $58,668, and $75,694 for the years ended December 31, 2011, 2010, and 2009, respectively.

The Bank leases its Severna Park and Linthicum branches. Minimum lease obligations under the Severna Park branch are $30,000 per year through September 2012 and $33,000 through September 2013. There is a one year renewal option at the same rent amount. Minimum lease obligations under the Linthicum branch are $104,335 per year through December 2014, adjusted annually on a pre-determined basis, with one ten year extension option. The Bank is also required to pay all maintenance costs under all these leasing arrangements. Rent expense totaled $137,204, $134,081, and $227,479 for the years ended December 31, 2011, 2010, and 2009, respectively.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

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