COMMITMENTS AND CONTINGENT LIABILITIES

12 Months Ended

Dec. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENT LIABILITIES

NOTE 19 - COMMITMENTS AND CONTINGENT LIABILITIES

Commitments

The Bank’s agreement with the core accounting processing service provider will continue until the eighth anniversary of the commencement date, which was November 10, 2016. If the Bank cancels the agreement prior to the end of the contract term, a lump sum termination fee will have to be paid. The fee shall consist of the total amount that would have been paid or reimbursed to the service provider during the remainder of the term of the agreement.

The Bank leases facilities and equipment under operating leases that expire at various dates through 2029. The leases have varying renewal options, generally require a fixed annual rent, and provide that real estate taxes, insurance, and maintenance are to be paid by Salisbury. Rent expense totaled $396,000, $361,000 and $245,000 for 2018, 2017 and 2016, respectively.

Future minimum lease payments at December 31, 2018 are as follows:

Future minimum lease payments  (in thousands)
	2019	$	247
	2020		247
	2021		228
	2022		199
	2023		148
	Thereafter		781
		$	1,850

The leases for three Bank branches, which are accounted for as capital leases, expire in 2020, 2028 and 2029. The leases have varying renewal options, require a fixed annual rent, and provide that real estate taxes, insurance, and maintenance are to be paid by the Bank. In September 2018, Salisbury entered into a letter of intent to purchase the New Paltz, New York branch from the landlord for $1.6 million. The letter of intent will expire in the event a mutually satisfactory sales contract is not executed by March 31, 2019. Salisbury expects the sale to close upon the expiration of the lease in September 2019. The following is a schedule by years of future minimum lease payments under the capital leases with the present value of the net minimum lease payments as of December 31, 2018.

Future minimum lease payments  (in thousands)
	2019	$	342
	2020		342
	2021		342
	2022		345
	2023		347
	Thereafter		2,954
	Total minimum lease payments		4,672
	Less amount representing interest		1,591
		$	3,081

Employment and Change in Control Agreements

Salisbury has entered into severance agreements with certain senior executives, including with one (1) named executive officer, Richard J. Cantele, Jr., which provide payouts ranging from 0.5 to 2.9 times base salary and other benefits. Salisbury has also entered into several change in control agreements including with named executive officer Peter Albero, and an employment agreement with named executive officer John Davies, all of which provide a severance payment ranging from 0.5 to 2.0 times base salary and other benefits in the event employment is terminated in conjunction with a defined change in control.

Contingent Liabilities

The Bank is involved in various claims and legal proceedings, which are not material, arising in the ordinary course of business. There are no other material pending legal proceedings, other than ordinary routine litigation incidental to the registrant’s business, to which Salisbury is a party or to which any of its property is subject.