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Leases | 12 Months Ended
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Dec. 31, 2019
Leases [Abstract] |
Leases | 8. Leases A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. On January 1, 2019, the Company adopted ASU 2016-02, Leases (ASC 842) and all subsequent ASUs that modified ASC 842. For the Company, ASC 842 affected the accounting treatment for operating lease agreements in which the Company is the lessee. As of December 31, 2019, the Company rents office space under operating leases expiring in 2020 through 2024, 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 statement of financial condition. The Company elected not to include short-term leases (i.e., leases with initial terms of twelve months or less), or equipment leases (deemed immaterial) on the statement of financial condition. As of December 31, 2019, 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.
|  | As of December 31, 2019 |
Assets |  |  |
Lease right-of-use assets |  | $ | 2,810,000 |
Liabilities |  |  |  |
Lease liabilities |  | $ | 3,114,000 |
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 statement of income 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 |
Weighted average remaining lease term – operating leases (in years) | 3.0
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 determined by the leased square footage in proportion to the overall office building.
|  | Year Ended December 31, 2019 |
Operating lease cost |  | $ | 905,000 |
Short-term lease cost |  |  | 446,000 |
Variable lease cost |  |  | 50,000 |
Sublease income |  |  | — |
Total Rent and occupancy |  | $ | 1,401,000 |
Cash paid for amounts included in the measurement of lease liabilities |  |  |  |
Operating cash flows from operating leases |  | $ | 928,000 |
Lease right-of-use assets obtained in exchange for new lease liabilities |  |  |  |
Operating leases |  | $ | 3,817,000 |
Lease Commitments Future annual minimum payments for operating leases with initial terms of greater than one year as of December 31, 2019 were as follows:
Year |  | Amount |
2020 |  | $ | 1,410,000 |
2021 |  |  | 878,000 |
2022 |  |  | 513,000 |
2023 |  |  | 493,000 |
2024 |  |  | 56,000 |
Thereafter |  |  | — |
Remaining balance of lease payments |  |  | 3,350,000 |
Difference between undiscounted cash flows and discounted cash flows |  |  | 236,000 |
Lease liabilities |  | $ | 3,114,000 |
Rent and occupancy expenses were $1,401,000 and $988,000 for the years ended December 31, 2019 and 2018, respectively.

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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