11.

Leases

Substantially all of the leases in which the Company is the lessee are office space leases with various terms with the maximum duration through

2025.

All of our leases are classified as operating leases, and therefore, were previously

not

recognized on the Company’s Consolidated Statements of Financial Condition. With the adoption of ASU

2016

02,

Leases (Topic

842

)

, operating lease agreements are required to be recognized on the Consolidated Statements of Financial Condition as a "right-of-use" (“ROU”) asset and a corresponding lease liability.

The calculated amount of the ROU asset and lease liability are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments. Regarding the discount rate, Topic

842

requires the use of the rate implicit in the lease whenever this rate is readily determinable. As this rate is rarely determinable, the Company utilizes its incremental borrowing rate at lease inception, on a collateralized basis, over a similar term. The incremental borrowing rate used to calculate the lease liability was determined based on the Company’s outstanding debt and consideration of other factors including credit standing and term of debt as of the effective date of ASC

842.

Additionally, the lease term and lease payments were also considered in determining the rate. Based on these considerations, the Company determined a collateralized borrowing rate that could be matched to total lease terms and total lease payments in ultimately calculating the implied borrowing rate in each lease contract.

For operating leases existing prior to

January 1, 2019,

the rate for the remaining lease term as of

January 1, 2019

was used. As of

December 31, 2019,

the weighted-average remaining lease term and discount rate for the Company's operating leases were as follows:

	Year Ended December 31, 2019
Weighted-average remaining lease term
Operating leases		5.34
Weighted-average discount rate
Operating leases		6.13	%

The Company leases office space in California, I

llinois, Georgia (through

March 19, 2019),

Massachusetts, Minnesota, Florida, and New York under various operating leases.

Occupancy expense was

$5.2

million and

$4.8

million f

or the year ended

December 31, 2019

and

2018

, respectively.

The California, Illinois, Minnesota and New York leases included a period of free rent at the start of the lease. Rent expense is recognized over the entire lease period. The aggregate minimum future lease payments of these leases are:

(In thousands)	Minimum Future Lease Commitments
Year Ending December 31,
2020	$	5,656
2021		5,758
2022		5,714
2023		5,709
2024		4,225
Thereafter		2,459
Total minimum future lease payments		29,521
Amounts representing interest		(4,127	)
Present value of net future minimum lease payments	$	25,394

	December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities
Cash used in operating activities	$	5,729
Operating leases	$	5,729