PREMISES AND EQUIPMENT

12 Months Ended

Dec. 31, 2021

Property, Plant and Equipment [Abstract]

PREMISES AND EQUIPMENT

Note 4 – Premises and Equipment

The following table presents the components of premises and equipment at December 31,:

(Dollars in thousands)	2021		2020
Land	$	3,465	$	3,936
Buildings and improvements	13,393		14,350
Furniture, fixtures and equipment	16,841		17,451
Software	4,176		1,527
Construction in progress	531		49
Leasehold improvements	2,895		3,079
	41,301		40,392
Accumulated depreciation	(16,249)		(14,189)
Premises and equipment, net	$	25,052	$	26,203

Depreciation expense totaled $3.3 million, $3.0 million and $3.0 million for 2021, 2020 and 2019, respectively.

We lease certain premises, for the operation of banking offices and certain equipment under operating and finance leases. At December 31, 2021, we had lease liabilities totaling $18.6 million, of which $18.5 million was related to operating leases and $0.1 million was related to finance leases, and right-of-use assets totaling $17.5 million, all of which was related to operating leases. At December 31, 2020, we had lease liabilities totaling $18.4 million, of which $18.3 million was related to operating leases and $0.2 million was related to finance leases, and right-of-use assets totaling $17.7 million, of which $17.5 million was related to operating leases and $0.2 million was related to finance leases. Lease liabilities and right-of-use assets are reflected in other liabilities and other assets, respectively.

For the years ended December 31, 2021 and December 31, 2020, the weighted-average remaining lease term for finance leases was 1.8 years and 2.3 years, respectively, and the weighted-average discount rates used in the measurement of finance lease liabilities was 2.0% and 2.4%, respectively. At December 31, 2021 and December 31, 2020, the weighted-average remaining lease term for operating leases was 12.0 years and 12.9 years, respectively, and the weighted-average discount rate used in the measurement of operating lease liabilities was 2.8% and 2.9%, respectively.

Lease costs were as follows:

(Dollars in thousands)	December 31, 2021		December 31, 2020
Amortization of right-of-use assets, finance leases	$	59	$	65
Interest on lease liabilities, finance leases	2		4
Operating lease cost	1,966		2,072
Short-term lease cost	5		27
Variable lease cost	38		38
Total lease cost	$	2,070	$	2,206

There were no sale and leaseback transactions, leveraged leases or lease transactions with related parties during the year ended December 31, 2021.

Future minimum payments for finance leases and operating leases with initial or remaining terms of one year or more are as follows:

	December 31, 2021
(Dollars in thousands)	Finance Leases		Operating Leases
2022	$	42	$	1,946
2023	5		1,897
2024	5		1,827
2025	4		1,826
2026	—		1,840
2027 and thereafter	—		12,961
Total future minimum lease payments	$	57	$	22,296
Less: Amounts representing interest	(1)		(3,752)
Present value of net future minimum lease payments	$	56	$	18,544