Bank Premises and Equipment, Net
The following table shows a summary of the cost and accumulated depreciation of premises and equipment as of the dates indicated (dollars in thousands):
| | | | | | | | | | | |
| 2025 | | 2024 |
| Land | $ | 6,370 | | | $ | 6,325 | |
| Leasehold improvements | 142 | | | 163 | |
| Buildings and building improvements | 26,157 | | | 24,673 | |
| Furniture, fixtures, and equipment | 7,197 | | | 10,414 | |
| Construction in progress | 501 | | | — | |
| Total cost | 40,367 | | | 41,575 | |
| Accumulated depreciation | (12,796) | | | (14,283) | |
| Net | $ | 27,571 | | | $ | 27,292 | |
Depreciation expense for the years ended December 31, 2025 and 2024 totaled $2.5 million and $2.8 million, respectively.
Future undiscounted lease payments for operating leases with initial terms of one year of more as of December 31, 2025 are as follows (dollars in thousands):
| | | | | |
| 2026 | $ | 1,130 | |
| 2027 | 398 | |
| 2028 | 218 | |
| 2029 | 99 | |
| 2030 | — | |
| Total undiscounted lease payments | 1,845 | |
| Less discount to net present value | (839) | |
| Total operating lease liabilities | $ | 1,006 | |
The lease liability is included in other liabilities in the Company’s Consolidated Balance Sheet.
The weighted average remaining discount rate was 3.81% and weighted average remaining life was 2.12 years at December 31, 2025.
The leases contain options to extend for periods from 1 year to 5 years. The cost of such rentals is not included above. Total rent expense for the years ended December 31, 2025 and 2024 amounted to $1.2 million and $1.7 million, respectively.
The Company also leases portions of its deposit branch and its operations center to third parties. The amounts included in occupancy and equipment expense are net of rental income of $1.4 million and $1.1 million for the years ended December 31, 2025 and 2024, respectively.
Future income from non-cancelable lease agreements in effect at December 31, 2025 is as follows (dollars in thousands):
| | | | | |
| 2026 | $ | 1,875 | |
| 2027 | 1,754 | |
| 2028 | 1,357 | |
| 2029 | 1,025 | |
| 2030 | 982 | |
| Thereafter | 983 | |
| Total | $ | 7,976 | |