The Company has a finance lease for the shell of the building constructed as the Company's operations center which expires in November 2039. The Company is also obligated under various noncancelable operating lease agreements for land, buildings and equipment that require future minimum rental payments. For operating each lease, the Company records an operating lease right-of-use asset (representing the right to use the underlying asset for the lease term) and an operating lease liability (representing the obligation to make lease payments required under the terms of the lease). Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The Company uses its estimated incremental borrowing rate – derived from information available at the lease commencement date – as the discount rate when determining the present value of lease payments. The Company does not have any operating leases with an initial term of 12 months or less. Certain operating leases contain various provisions for increases in rental rates, based either on changes in the published Consumer Price Index or a predetermined escalation schedule. Certain operating leases provide the Company with the option to extend the lease term one or more times following expiration of the initial term. Lease extensions are not reasonably certain and the Company generally does not include payments occurring during option periods in the calculation of its operating lease right-of-use assets and operating lease liabilities. In accordance with ASC 842, the Company records in the consolidated balance sheet operating lease right-of-use (“ROU”) assets and operating lease liabilities for leases with an initial term of more than 12 months.

The table below presents the ROU assets and lease liabilities recorded in the consolidated balance sheet at the dates indicated (in thousands):

The table below presents certain information related to the lease costs for operating leases, which are recorded in occupancy and depreciation in the accompanying consolidated statements of income at the dates indicated (in thousands):

(1)	Income related to sub-lease activity is not significant and not presented herein.

Supplemental cash flow information - Operating cash flows paid for operating lease amounts included in the measurement of lease liabilities was $365,000 and $393,000 for the three months ended June 30, 2021 and 2020, respectively. During the three months ended June 30, 2021, the Company did not record any operating lease ROU assets that were exchanged for operating lease liabilities. During the three months ended June 30, 2020, the Company recorded an operating lease ROU asset that was exchanged for operating lease liabilities of $785,000.

The following table reconciles the undiscounted cash flows for the periods presented related to the Company’s lease liabilities as of June 30, 2021 (in thousands):


Year Ended March 31:	Operating		Finance
	Leases		Lease
Remaining of 2022	$	1,083	$	159
2023		1,274		215
2024		1,290		219
2025		1,292		222
2026		1,040		226
Thereafter		3,527		3,174
Total minimum lease payments		9,506		4,215
Less: amount of lease payment representing interest		(636)		(1,897)
Lease liabilities	$	8,870	$	2,318

In March 2010, the Company sold two of its branch locations. The Company maintains a substantial continuing involvement in the locations through various non-cancellable operating leases that contain certain renewal options. The resulting gain on sale of $2.1 million was deferred and is being amortized over the lives of the respective leases. At June 30, 2021 and March 31, 2021, the remaining deferred gain was $337,000 and $377,000, respectively, and is included in accrued expenses and other liabilities in the accompanying consolidated balance sheet.