Premises and Equipment, Net and Leases

Premises and equipment, net, are summarized as follows:



	December 31,
	2019			2018
Land	$	7,708,424		$	6,693,927
Buildings and Improvements	25,336,734			23,319,946
Furniture and Equipment	12,748,562			11,878,563
Construction in Progress	1,751,176			1,391,986
Total Premises and Equipment	47,544,896			43,284,422
Less: Accumulated Depreciation	(20,325,013		)	(19,109,715		)
Total Premises and Equipment, Net	$	27,219,883		$	24,174,707

Construction in progress of $1.8 million at December 31, 2019 primarily included building and construction costs associated with our newest branch in Augusta, Georgia, scheduled for opening in 2021. At December 31, 2019 the estimated additional costs to complete and equip the branch were approximately $2.0 million. Depreciation expense on premises and equipment was $1.6 million, $1.5 million and $1.5 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Effective January 1, 2019 the Company adopted ASC 842 “Leases.” Currently, the Company has operating leases on six of its branches that are accounted for under this standard. As a result of this standard, the Company recognized both a right-of-use (ROU) asset and lease liability of $3.1 million effective January 1, 2019. During the year ended December 31, 2019, the Company made cash payments in the amount of $444,000 for operating leases. The lease expense recognized during this period amounted to $458,000 and the lease liability was reduced by $358,000. At December 31, 2019, the Company had ROU assets of $2.7 million and a lease liability of $2.7 million recorded on its consolidated balance sheet. The remaining weighted average lease term is seven years and the weighted average discount rate used is 3.2%.

At December 31, 2019, future undiscounted lease payments for operating leases with initial terms of one year or more were as follows:



Year ended December 31,
2020	435,553
2021	426,040
2022	437,463
2023	449,271
2024	450,657
Thereafter	869,050
Total undiscounted lease payments	3,068,034
Less: effect of discounting	334,503
Present value of estimated lease payments (lease liability)	$	2,733,531

Total rental expense was $460,000, $454,000, and $409,000 for the years ended December 31, 2019, 2018 and 2017, respectively. Five lease agreements with monthly expenses of $7,350, $900, $7,900, $9,950, and $10,600 have multiple renewal options totaling 30, 10, 15, 45, and 20 years, respectively.