LEASES

The Bank leases premises and equipment under various operating lease agreements that provide for the payment of property taxes,

insurance and maintenance costs. Generally, operating leases provide for one or more renewal options on the same basis as current

rental terms. As of December 31, 2011 the Bank had capital leases totaling $0.3 million. As of December 31, 2010 the Bank did not have any capital leases.

The following are future minimum capital lease payments as required under the agreements:



(Dollars in thousands)	Amount
12/31/2012	$	57
12/31/2013	58
12/31/2014	59
12/31/2015	60
12/31/2016	46
	$	280

The capital lease had an interest rate of 1.60% and an expense of $1.1 thousand for the year ended December 31, 2011.

The following are future minimum operating lease payments as required under the agreements:



(Dollars in thousands)	Amount
12/31/2012	$	124
12/31/2013	91
12/31/2014	84
12/31/2015	19
12/31/2016	4
	$	322

Rent expense for all operating leases amounted to approximately $0.1 million in 2011 and 2010.

The Bank leases out office space in some of its vacant office space in its headquarters building and branches. The following are the minimum rentals to be received under the agreements:



(Dollars in thousands)	Amount
12/31/2012	$	315
12/31/2013	267
12/31/2014	93
	$	675

Rent income for December 31, 2011 and 2010 was $0.3 million.