Note 5 - Premises and Equipment

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

Note 5 – Premises and Equipment

Premises and equipment are summarized as follows December 31, 2022 and 2021 :

	Estimated
	Useful Life
	(Years)		2022		2021
	(dollars in thousands)
Land		-	$	6,732	$	7,232
Buildings		10-25		9,797		10,509
Furniture, fixtures and equipment		3-7		24,830		24,137
Leasehold improvements		10-20		25,164		27,343
Subtotal				66,523		69,221
Less: accumulated depreciation, amortization and fair value adjustments				38,723		40,189
Total premises and equipment, net			$	27,800	$	29,032

Depreciation and amortization expense of premises and equipment was $3.9 million, $3.8 million and $4.2 million for 2022, 2021 and 2020, respectively.

Finance Leases: The Company has a lease agreement for a building accounted for as a finance lease. The lease arrangement requires monthly payments through 2028. As of December 31, 2022, the weighted average remaining term for the finance lease was 5.9 years and the weighted average discount rate used in the measurement of finance lease liabilities was 6.0%. Total finance lease costs for the year ended December 31, 2022, was $280 thousand.

The Company has included this lease in premises and equipment as follows December 31, 2022 and 2021 :

	2022		2021
	(dollars in thousands)
Finance lease	$	3,423	$	3,423
Less: accumulated amortization		2,395		2,224
	$	1,028	$	1,199

The following is a schedule by year of future minimum lease payments under the finance lease, together with the present value of net minimum lease payments as of December 31, 2022 (dollars in thousands):

2023	$	323
2024		353
2025		353
2026		353
2027		353
Thereafter		323
Total minimum lease payments		2,058
Less amount representing interest		325
Present value of net minimum lease payments	$	1,733

The Company leases certain premises and equipment under operating leases. As of December 31, 2022, the Company had lease liabilities totaling $11.4 million and right-of-use assets totaling $10.2 million. As of December 31, 2022, the weighted average remaining lease term for operating leases was 5 years and the weighted average discount rate used in the measurement of operating lease liabilities was 2.8%. Total lease costs for the year ended December 31, 2022 was $3.2 million.

A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total operating lease liability is as follows:

	December 31,
	2022
	(dollars in thousands)
Lease payments due:
Less than 1 year	$	2,958
1 year through less than 2 years		2,422
2 years through less than 3 years		2,139
3 years through less than 4 years		2,043
4 years through 5 years		1,391
After 5 years		1,360
Total undiscounted cash flows		12,313
Impact of discounting		(916	)
Total lease liability	$	11,397