NOTE

21.

LEASES

The Company's lease agreements primarily cover office space in various states expiring at various dates. The Company's leases are predominantly operating leases, which are included in right-of-use assets and operating lease liabilities on the Company's consolidated statements of financial condition. The Company's current lease arrangements expire from

2020

through

2032,

some of which include options to extend or terminate the lease. However, the Company in general is

not

reasonably certain to exercise options to renew or terminate, and therefore renewal and termination options are

not

considered in the lease term or the right-of-use asset and lease liability balances.

The Company's lease population does

not

include any residual value guarantees, and therefore

none

were considered in the calculation of the lease balances. The Company has leases with variable payments, most commonly in the form of common area maintenance charges which are based on actual costs incurred. These variable payments were excluded from the right-of-use asset and lease liability balances since they are

not

fixed or in-substance fixed payments. The Company has lease agreements with lease and non-lease components. The Company has elected the practical expedient to account for lease and non-lease components as a single lease component.

For leases with terms greater than

months, right-of-use assets and lease liabilities are recognized at the implementation date of Topic

842

or lease commencement date based on the present value of the future lease payments over the lease term. The discount rate used to determine the commencement date present value of lease payments is the interest rate implicit in the lease, or when that is

not

readily determinable, the Company utilizes its incremental borrowing rate. The Company's lease agreements generally do

not

provide a readily determinable implicit rate nor is it available to the Company from its lessors. Instead, the Company estimates the Company's incremental borrowing rate based on information available at either the implementation date of Topic

842

or at lease commencement for leases entered into thereafter in determining the present value of future payments. Lease expense for net present value of payments is recognized on a straight-line basis over the lease term. Leases with an initial term of

months or less with purchase options or extension options that are

not

reasonably certain to be exercised are

not

recorded on the consolidated statements of financial condition. The Company recognizes lease expense for these leases on a straight-line basis over the term of the lease.

October 2018,

the Company entered into an agreement to lease equipment under a finance lease for

months. The equipment under the lease is collateral for the lease obligation and is included within fixed assets in the consolidated statements of financial condition. The leased equipment is amortized on a straight line basis over

years. The interest rate related to the lease obligation is

5.6

percent and the maturity date is

October

2020.

The finance lease obligation is included within other liabilities in the consolidated statements of financial condition.

The components of lease expense were as follows:

	Year Ended September 30, 2020
Operating lease cost:	$	5,258,000

Finance lease cost:
Amortization of finance lease assets	$	77,000
Interest on finance lease liabilities		10,000
Total finance lease cost	$	87,000

Sublease income:	$	345,000

The table below summarizes the Company's scheduled future minimum lease payments under operating and finance leases, recorded on the consolidated statements of financial condition as of

September 30, 2020

Fiscal Year Ending September 30,	Operating Leases		Finance Lease
2021	$	4,385,000	$	51,000
2022		2,746,000		—
2023		2,588,000		—
2024		2,400,000		—
2025		2,258,000		—
Thereafter		6,071,000		—
Total minimum lease payments		20,448,000	$	51,000
Less: Amounts representing interest not yet incurred		3,729,000		—
Present value of lease obligations	$	16,719,000	$	51,000

The following table presents the balances for operating and finance right-of-use assets and lease liabilities:

Leases	Classification	September 30, 2020

Assets
Operating lease assets	Right-of-use assets	$	14,721,000
Finance lease assets	Fixed assets		336,000
Total lease assets		$	15,057,000

Liabilities
Operating lease liabilities	Operating lease liabilities	$	16,719,000
Finance lease liabilities	Other liabilities		51,000
Total lease liabilities		$	16,770,000

The table below presents additional information related to the Company's leases as of

September 30, 2020

	For the Year Ended September 30, 2020
Supplemental cash flow information and non-cash activity:
Cash paid for amounts related to lease liabilities
Operating cash flows from finance leases (interest)	$	10,000
Operating cash flows from operating leases (lease payments reflected in the change in accounts payable, accrued expenses and other liabilities in the statement of cash flows)	$	4,006,000
Financing cash flows from finance leases (principal payments)	$	236,000
Operating lease assets obtained in exchange for lease liabilities	$	1,574,000

Weighted Average Remaining Lease Term:
Operating Leases (in years)		7.28

Weighted Average Discount Rate:
Operating Leases		5.5	%