As of March 31, 2022, the Company rents office space under operating leases expiring in 2022 through 2026, and the Company has no financing leases. The leases call for base rent plus escalations as well as other operating expenses. The following table represents the Company’s lease right-of-use assets and lease liabilities on the statements of financial condition. The Company elected not to include short-term leases (i.e., leases with initial terms of less than twelve months), or equipment leases (deemed immaterial) on the statements of financial condition.

As of March 31, 2022, the Company does not believe that any of the renewal options under the existing leases are reasonably certain to be exercised; however, the Company will continue to assess and monitor the lease renewal options on an ongoing basis.

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	As of March 31, 2022		As of December 31, 2021
Assets
Lease right-of-use assets	$	2,281,000	$	2,662,000
Liabilities
Lease liabilities	$	2,529,000	$	2,933,000

The calculated amounts of the lease right-of-use assets and lease liabilities in the table above are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments. The Company leases some miscellaneous office equipment, but they are immaterial and therefore the Company records the costs associated with this office equipment on the statements of operations rather than capitalizing them as lease right-of-use assets. The Company determined a discount rate of 5.0% would approximate the Company’s cost to obtain financing given its size, growth, and risk profile.

Lease Term and Discount Rate

As of

March 31, 2022

As of

December 31, 2021

Weighted average remaining lease term – operating leases (in years)

2.8

2.9

Weighted average discount rate – operating leases

5.0

The following table represents lease costs and other lease information. The Company has elected the practical expedient to not separate lease and non-lease components, and as such, the variable lease cost primarily represents variable payments such as common area maintenance and utilities which are usually determined by the leased square footage in proportion to the overall office building.

	Three Months Ended March 31,
	2022		2021
Operating lease cost	$	378,000	$	489,000
Short-term lease cost		25,000		21,000
Variable lease cost		70,000		60,000
Sublease income		—		—
Total Rent and occupancy	$	473,000	$	570,000

Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	400,000	$	556,000

Lease right-of-use assets obtained in exchange for new lease liabilities
Operating leases	$	—	$	1,388,000

Lease Commitments

Future annual minimum payments for operating leases with initial terms of greater than one year as of March 31, 2022 were as follows:

Year	Amount
2022	$	916,000
2023		931,000
2024		399,000
2025		325,000
2026		139,000
Remaining balance of lease payments		2,710,000
Less: difference between undiscounted cash flows and discounted cash flows		181,000
Lease liabilities	$	2,529,000