Premises and Equipment

12 Months Ended

Dec. 31, 2014

Property, Plant and Equipment [Abstract]

Details of premises and equipment, at cost, at December 31, were as follows:



	2014			2013
Land and land improvements	$	3,046		$	3,019
Buildings and leasehold improvements	29,984			29,772
Furniture, fixtures and equipment	19,950			19,792
Total cost	52,980			52,583
Accumulated depreciation and amortization	(29,094		)	(26,856		)
Net premises and equipment	$	23,886		$	25,727

Depreciation and amortization expense on premises and equipment for the years ended December 31, 2014, 2013 and 2012 was $2.7 million, $2.7 million and $2.2 million, respectively. At December 31, 2014 and 2013, the Company has capitalized software costs of $3.6 million and $3.2 million, respectively, and related accumulated depreciation expense of $3.0 million and $2.7 million, respectively. Capitalized software costs are presented within other assets on the consolidated statement of condition. Depreciation and amortization expense on capitalized software costs for the years ended December 31, 2014, 2013, and 2012 were $335,000, $296,000, and $301,000, respectively.

Lease expense, primarily associated with the lease of the Company's office buildings and branch facilities, for the years ended December 31, 2014, 2013 and 2012 was $1.2 million, $1.3 million and $997,000, respectively. The Company has one capital lease for a branch facility with payments that extend until 2026 at an interest rate of 9.75% per year. The capital lease, recorded in premises and equipment, has a cost basis of $855,000 at December 31, 2014 and 2013 and accumulated depreciation of $373,000 and $331,000 at December 31, 2014 and 2013, respectively.

At December 31, 2014, under current operating and capital lease contracts, the Company had the following schedule of future minimum lease payments:



	Operating		Capital
2015	$	1,274	$	129
2016	1,198		127
2017	956		126
2018	714		126
2019	632		126
Thereafter	1,824		812
Total minimum lease payments	$	6,598	$	1,446
Less: amount representing interest⁽¹⁾			462
Present value of net minimum lease payments⁽²⁾			$	984

(1) Amount necessary to reduce net minimum lease payments to present value calculated at the Company's incremental borrowing rate at lease inception.

(2) Reflects the liability reported within other borrowed funds on the consolidated statements of condition. At December 31, 2014 and 2013, the capital lease liability was $984,000 and $1.0 million, respectively.

During 2012, the Company recorded a gain of $479,000 on the sale of a branch facility and is presented within non-interest income on the consolidated statements of income. There were no recorded gains or losses from the sale of premises or equipment for the years ended December 31, 2014 and 2013.

- Definition

The entire disclosure for long-lived, physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, accounting policies and methodology, roll forwards, depreciation, depletion and amortization expense, including composite depreciation, accumulated depreciation, depletion and amortization expense, useful lives and method used, income statement disclosures, assets held for sale and public utility disclosures.

+ References+ Details