NOTE 6: PREMISES AND EQUIPMENT

 

The components of premises and equipment included in the accompanying consolidated balance sheets are as follows:

 

Depreciation and amortization expense related to premises and equipment amounted to $2.18 million, $1.95 million and $1.89 million in 2013, 2012 and 2011, respectively.

 

We occupy certain banking offices under non-cancellable operating lease agreements expiring at various dates over the next 20 years. The majority of leases have multiple options with escalation clauses for increases associated with the cost of living or other variable expenses over time. Rent expense on these properties totaled $1.20 million, $1.08 million and $1.02 million for the years ended December 31, 2013, 2012 and 2011, respectively.

 

Minimum lease payments on these properties subsequent to December 31, 2013 are as follows:

 

We entered into a sale leaseback arrangement for our principal office in South Burlington, Vermont, in June 2008. The deferred gain on the sale leaseback transaction resulted in a $423 thousand offset to rent expense per year through 2017 and $212 thousand in 2018. The deferred gain included in other liabilities totaled $1,904 thousand and $2,327 thousand at December 31, 2013 and 2012, respectively.

 

We entered into a sale leaseback arrangement for one of our branch locations in Burlington, Vermont in December 2013. The deferred gain on the sale leaseback transaction will result in a $93 thousand offset to rent expense per year through 2023. The deferred gain included in other liabilities totaled $934 thousand at December 31, 2013.