7. Premises and Equipment

The following summarizes premises and equipment at December 31, 2017 and 2016:


	2017		2016
Land	$	8,147	$	7,324
Premises and leasehold improvements		53,903		48,563
Furniture and equipment		31,238		30,125
Construction in process		71		4,014

		93,359		90,026
Less: accumulated depreciation		42,644		40,504

Premises and equipment, net	$	50,715	$	49,522

Depreciation on premises and equipment amounted to $3,811 in 2017, $3,215 in 2016 and $2,759 in 2015.

The Corporation is committed under nineteen non-cancelable operating leases for facilities and eleven non-cancelable operating leases for vehicles with initial or remaining terms in excess of one year. The minimum annual rental commitments under these leases at December 31, 2017 are as follows:


2018	$	1,167
2019		1,021
2020		836
2021		736
2022		578
Thereafter		3,530

	$	7,868

Rental expense, net of rental income, charged to occupancy expense for 2017, 2016, and 2015 was $870, $773 and $699, respectively.

In December 2009, the Corporation entered into a sale-leaseback transaction for real estate used in the operations of one of its branch office locations. The lease term is seventeen years, with two automatic renewal terms of five years each. The Corporation sold the property for $1,200 but financed the entire sales amount. Because the buyer/lessor did not make an initial investment on the purchase of the real estate that is adequate to transfer the risks and rewards of ownership, the Corporation deferred the entire gain of $489 associated with this transaction, which is included in accrued interest payable and other liabilities in the accompanying consolidated balance sheet. The gain is being recognized over the term of the loan under the installment method, and the gain recognized was included in other income in the accompanying consolidated statements of income and comprehensive income and totaled $25, $25 and $22 in 2017, 2016, and 2015, respectively.

The minimum annual rental commitments under this sale-leaseback transaction at December 31, 2017 are as follows:


2018	$	105
2019		105
2020		105
2021		105
2022		105
Thereafter		420

	$	945