LEASE COMMITMENTS

12 Months Ended

Dec. 31, 2019

The Company determines if a contract contains a lease at inception of the contract by reviewing the facts and circumstances of the contract to determine if a lease is present. The Company has operating leases relating to office space, vehicles, computer equipment, and office equipment, which are recorded as a lease obligation liability disclosed in the "Accrued expenses and other liabilities" line on the Consolidated Balance Sheets and as a lease right-of-use asset disclosed in the "Other assets" line on the Consolidated Balance Sheets. The lease right-of-use asset represents the Company's right to use each underlying asset for the lease term and the lease obligation liability represents the Company's obligation over the lease term. As an accounting policy election, we have elected the practical expedient on not separating lease components from non-lease components to each major asset class.

The Company's lease obligation is recorded at the present value of the lease payments based on the term of the applied lease. The Company has elected to categorize its leases into four categories based on length of lease terms and applies an incremental borrowing rate of interest as of the effective date of adoption or the lease effective date equivalent to a collateralized rate with similar terms. The four categories are as follows: less than three years, three to five years, five to ten years and greater than ten years. The collateralized discount rate used to calculate the present value of future minimum lease payments is based, where appropriate, on the Company's incremental borrowing rate of its credit facility, described in Note 9 "Credit Facility". For leases that existed prior to the adoption of the new accounting guidance on January 1, 2019 or those with terms not similar to the credit facility, the Company has elected to use the remaining lease term based on the four categories noted above as of the date of initial application to measure its incremental borrowing rate. In this case, the incremental borrowing rate is a collateralized rate based on current industry borrowing rates for similar companies with similar ratings.

Lease terms and options vary in the Company's operating leases dependent upon the underlying leased asset. We exclude options to extend or terminate a lease from our recognition as part of our right-of-use assets and lease liabilities until those options are known and/or executed, as we typically do not exercise options to purchase the underlying leased asset. As of December 31, 2019, we have leases with remaining terms of 1 year to 6 years, some

of which may include no options for renewal and others with options to extend the lease terms from 6 months to 5 years.

The Company has also entered into a contract to lease office space for our East Coast Branch which will commence in the first half of 2020 after the lessor has substantially completed leasehold improvements. This lease has not been included in lease obligation liability or right-of-use assets as of December 31, 2019.

The components of our operating leases were as follows:



	As of December 31, 2019

Components of lease expense:
Operating lease expense	$	7,655
Less sublease income	493
Net lease expense	7,162
Cash flows information related to leases:
Operating cash outflow from operating leases	7,249



Balance sheet information for operating leases:	As of December 31, 2019

Operating lease right-of-use assets (Other assets on Consolidated Balance Sheets)	$	15,410
Operating lease liabilities (Accrued expenses and other liabilities on Consolidated Balance Sheets)	15,851
Right-of-use assets obtained in exchange for new operating lease liabilities	651
Weighted average remaining lease term	2.75 years
Weighted average discount rate	4.74		%



Maturities of lease liabilities:	As of December 31, 2019
2020	$	7,517
2021	5,311
2022	2,417
2023	1,318
2024	259
Thereafter	39
Total lease payments	16,861
Less imputed interest	(1,010		)
Lease liability	$	15,851