PREMISES AND EQUIPMENT

12 Months Ended

Dec. 31, 2014

4.	*PREMISES AND EQUIPMENT*

The following table presents premises and equipment as of December 31,

(In thousands)	2014		2013
Land and land improvements	$	4,932	$	4,933
Buildings		11,984		11,931
Furniture and equipment		16,621		15,375
Leasehold improvements		10,017		7,891
Projects in progress		1,405		1,703
Capital lease asset		11,237		8,911
		56,196		50,744
Less: accumulated depreciation		23,938		21,754
Total	$	32,258	$	28,990

The Company has included leases in premises and equipment as follows:

(In thousands)	2014		2013
Land and buildings	$	11,237	$	8,911
Less: accumulated depreciation		2,420		1,747
Total	$	8,817	$	7,164

Projects in progress represents costs associated with renovations to the Company's headquarters in addition to smaller renovation or equipment installation projects at other locations..

The Company recorded depreciation expense of $3.0 million, $3.5 million and $2.9 million for the years ended December 31, 2014, 2013 and 2012, respectively.

The Company leases its corporate headquarters building under a capital lease and in 2014, leased additional space it the building. The lease arrangement requires monthly payments through 2025. Related depreciation expense and accumulated depreciation of $531 thousand, $400 thousand and $400 thousand is included in the results of 2014, 2013 and 2012, respectively.

The Company also leases its Gladstone branch after completing a sale-leaseback transaction involving the property in 2011. The lease arrangement requires monthly payments through 2031. The gain on the sale of $764 thousand was deferred and will be accreted to income over the life of the lease. Related depreciation expense and accumulated depreciation of $141 thousand is included in each of the 2014, 2013 and 2012 results.

The following is a schedule by year of future minimum lease payments under capitalized leases, together with the present value of net minimum lease payments as of December 31, 2014:

(In thousands)
2015	$	993
2016		1,007
2017		1,081
2018		1,127
2019		1,146
Thereafter		9,648
Total minimum lease payments		15,002
Less: amount representing interest		3,846
Present value of net minimum lease payments	$	11,156

- 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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