What changed in this filing

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Item 1. Financial Statements

2021-05-06 compared with 2020-11-05 · 157 added, 341 removed, 692 unchanged (42% of the section changed)

3 unchanged sentences

(In thousands, except share and par value data)

September 30,

Cash and cash equivalents

17 unchanged sentences

Preferred Stock, par value $ 0.01 , 10,000,000 shares authorized;

none issued and outstanding, as of September 30, 2020 and December 31, 2019

none issued and outstanding, as of March 31, 2021 and December 31, 2020

Class A common stock, par value $ 0.01 , 50,000,000 shares authorized;

9,544,607 and 9,329,879 issued and outstanding, as of September 30, 2020 and December 31, 2019, respectively

9,658,297 and 9,650,692 issued and outstanding, as of March 31, 2021 and December 31, 2020, respectively

Class B common stock, par value $ 0.01 , 25,000,000 shares authorized;

4,827,731 and 5,031,017 issued and outstanding, as of September 30, 2020 and December 31, 2019, respectively

4,769,835 and 4,721,646 issued and outstanding, as of March 31, 2021 and December 31, 2020, respectively

Additional Paid-In Capital

7 unchanged sentences

(In thousands, except share and per share data)

Three months ended September 30,

Nine months ended September 30,

Three months ended March 31,

Management and advisory fees

4 unchanged sentences

Total expenses

Income before other (expense) income, net

Other (expense) income, net

Income before other income (expense), net

Other income (expense), net

Interest income

Interest expense

Equity income from investments

Total other (expense) income, net

Total other income (expense), net

Income before provision for income taxes

12 unchanged sentences

Equity-based compensation

Issuance of Class B shares

Deferred tax, net of amounts payable under tax receivable agreement

3 unchanged sentences

March 31, 2020

Distributions to partners

Equity-based compensation

Deferred tax, net of amounts payable under tax receivable agreement

Accrued interest on notes receivable from partners

Share conversion

Dividends paid on Class A common stock - $ 0.15 per share

June 30, 2019

Distributions to partners

Equity-based compensation

Issuance of Class B shares

Deferred tax, net of amounts payable under tax receivable agreement

Accrued interest on notes receivable from partners

Share conversion

Dividends paid on Class A common stock - $ 0.15 per share

September 30, 2019

See accompanying notes to condensed consolidated financial statements.

Silvercrest Asset Management Group Inc.

Condensed Consolidated Statements of Changes in Equity

(In thousands)

January 1, 2021

Distributions to partners

Issuance of notes receivable from partners

Issuance of Class B shares

Repayment of notes receivable from partners

5 unchanged sentences

March 31, 2021

Distributions to partners

Repayment of notes receivable from partners

Equity-based compensation

Deferred tax, net of amounts payable under tax receivable agreement

Accrued interest on notes receivable from partners

Share conversion

Dividends paid on Class A common stock - $ 0.16 per share

June 30, 2020

Distributions to partners

Repayment of notes receivable from partners

Equity-based compensation

Deferred tax, net of amounts payable under tax receivable agreement

Accrued interest on notes receivable from partners

Share conversion

Dividends paid on Class A common stock - $ 0.16 per share

September 30, 2020

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

(In thousands)

Nine months ended September 30,

Three months ended March 31,

Cash Flows From Operating Activities

Adjustments to reconcile net income to net cash provided by operating activities:

Adjustments to reconcile net income to net cash used in operating activities:

Equity-based compensation

1 unchanged sentence

Deferred income taxes

Tax receivable agreement adjustment

Non-cash interest on notes receivable from partners

Interest on notes payable

Non-cash lease expense

Distributions received from investment funds

Equity income from investments

Cash flows due to changes in operating assets and liabilities:

5 unchanged sentences

Deferred and other liabilities

Net cash provided by operating activities

Net cash used in operating activities

Cash Flows From Investing Activities

Acquisition of furniture, equipment and leasehold improvements

Acquisition of Neosho Capital, LLC

Acquisition of Cortina Asset Management, LLC

Net cash used in investing activities

Cash Flows From Financing Activities

Earn-outs paid related to acquisitions completed on or after January 1, 2009

Borrowings under credit facility

Earn-outs paid related to acquisitions

Repayments of notes payable

Principal payments on financing leases

Operating lease liabilities

Distributions to partners

1 unchanged sentence

Payments from partners on notes receivable

Net cash (used in) provided by financing activities

Net cash used in financing activities

Net decrease in cash and cash equivalents

1 unchanged sentence

Cash and cash equivalents, end of period

See accompanying notes to condensed consolidated financial statements.

Nine months ended September 30,

Three months ended March 31,

Supplemental Disclosures of Cash Flow Information

2 unchanged sentences

Recognition of deferred tax assets as a result of share conversions

Earnout accrual for acquisition of Neosho Capital, LLC

Issuance of Class B shares of Silvercrest L.

in conjunction with the acquisition of Neosho

Earnout accrual for acquisition of Cortina Asset Management, LLC

Issuance of Class B shares of Silvercrest L.

in conjunction with the acquisition of Cortina

Issuance of Class B shares of Silvercrest L.

in conjunction with the acquisition of Cortina, par value $ 0.01

Notes receivable from new partners issued for capital contributions to Silvercrest L.P.

Assets acquired under finance lease

Operating lease assets (ASC 842 adoption)

Operating lease liabilities (ASC 842 adoption)

Finance lease assets (ASC 842 adoption)

Finance lease liabilities (ASC 842 adoption)

Accrued dividends

See accompanying notes to condensed consolidated financial statements.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

As of September 30, 2020 and December 31, 2019 and for the Three and Nine Months ended September 30, 2020 and 2019

As of March 31, 2021 and December 31, 2020 and for the Three Months ended March 31, 2021 and 2020

(Dollars in thousands, except per share and par value data and as otherwise indicated)

28 unchanged sentences

Tax Receivable Agreement

In connection with the Company’s initial public offering (the “IPO”) and reorganization of SLP that were completed on June 26, 2013, Silvercrest entered into a tax receivable agreement (the “TRA”) with the partners of SLP that requires it to pay them 85 % of the amount of cash savings, if any, in U.S.

federal, state and local income tax that it actually realizes (or is deemed to realize in the case of an early termination payment by it, or a change in control) as a result of the increases in tax basis and certain other tax benefits related to entering into the TRA, including tax benefits attributable to payments under the TRA or attributable to exchanges of shares of Class B common stock for shares of Class A common stock.

In connection with the Company’s initial public offering (the “IPO”) and reorganization of SLP that were completed on June 26, 2013, Silvercrest entered into a tax receivable agreement (the “TRA”) with the partners of SLP (the “SLP Partners”) that requires Silvercrest to pay the SLP Partners 85 % of the amount of cash savings, if any, in U.S.

federal, state and local income tax that Silvercrest actually realizes (or is deemed to realize in the case of an early termination payment by it, or a change in control) as a result of the increases in tax basis and certain other tax benefits related to entering into the TRA, including tax benefits attributable to payments under the TRA or attributable to exchanges of shares of Class B common stock for shares of Class A common stock.

The payments to be made pursuant to the tax receivable agreement are a liability of Silvercrest and not Silvercrest L.P.

As of September 30, 2020, this liability is estimated to be $ 10,010 and is included in deferred tax and other liabilities in the Condensed Consolidated Statements of Financial Condition.

As of March 31, 2021, this liability is estimated to be $ 9,441 and is included in deferred tax and other liabilities in the Condensed Consolidated Statements of Financial Condition.

Silvercrest expects to benefit from the remaining 15 % of cash savings realized, if any.

The TRA was effective upon the consummation of the IPO and will continue until all such tax benefits have been utilized or expired, unless Silvercrest exercises its right to terminate the TRA for an amount based on an agreed upon value of the payments remaining to be made under the agreement.

The TRA will automatically terminate with respect to Silvercrest’s obligations to a partner if a partner (i) is terminated for cause, (ii) breaches his or her non-solicitation covenants with Silvercrest or any of its subsidiaries or (iii) voluntarily resigns or retires and competes with Silvercrest or any of its subsidiaries in the 12-month period following resignation of employment or retirement, and no further payments will be made to such partner under the TRA.

The TRA will automatically terminate with respect to Silvercrest’s obligations to an SLP partner if such SLP partner (i) is terminated for cause, (ii) breaches his or her non-solicitation covenants with Silvercrest or any of its subsidiaries or (iii) voluntarily resigns or retires and competes with Silvercrest or any of its subsidiaries in the 12-month period following resignation of employment or retirement, and no further payments will be made to such partner under the TRA.

For purposes of the TRA, cash savings in income tax will be computed by comparing Silvercrest’s actual income tax liability to the amount of such taxes that it would have been required to pay had there been no increase in its share of the tax basis of the tangible and intangible assets of SLP.

7 unchanged sentences

In addition, the TRA provides that upon certain mergers, asset sales, other forms of business combinations, or other changes of control, Silvercrest’s (or its successors’) obligations with respect to exchanged or acquired Silvercrest Class B units, whether exchanged or acquired before or after such transaction, would be based on certain assumptions, including that Silvercrest would have sufficient taxable income to fully utilize the deductions arising from the increased tax deductions and tax basis and other benefits related to entering into the TRA.

Decisions made by the continuing partners of SLP in the course of running Silvercrest’s business, such as with respect to mergers, asset sales, other forms of business combinations or other changes in control, may influence the timing and amount of payments that are received by an exchanging or selling principal under the TRA.

Decisions made by the continuing SLP Partners in the course of running Silvercrest’s business, such as with respect to mergers, asset sales, other forms of business combinations or other changes in control, may influence the timing and amount of payments that are received by an exchanging or selling principal under the TRA.

For example, the earlier disposition of assets following an exchange or acquisition transaction will generally accelerate payments under the TRA and increase the present value of such payments, and the disposition of assets before an exchange or acquisition transaction will increase an existing owner’s tax liability without giving rise to any rights of a principal to receive payments under the TRA.

3 unchanged sentences

Basis of Presentation and Principles of Consolidation

The accompanying Condensed Consolidated Financial Statements include the accounts of Silvercrest and its wholly owned subsidiaries SLP, SAMG LLC, SFS, MCG, Silvercrest Investors LLC, Silvercrest Investors II LLC and Silvercrest Investors III LLC as of September 30, 2020 and December 31, 2019 and for the three and nine months ended September 30, 2020 and 2019.

The accompanying Condensed Consolidated Financial Statements include the accounts of Silvercrest and its wholly owned subsidiaries SLP, SAMG LLC, SFS, MCG, Silvercrest Investors LLC, Silvercrest Investors II LLC and Silvercrest Investors III LLC as of March 31, 2021 and December 31, 2020 and for the three months ended March 31, 2021 and 2020.

All intercompany transactions and balances have been eliminated.

The Condensed Consolidated Statement of Financial Condition at December 31, 2020 was derived from the audited Consolidated Statement of Financial Condition at that date but does not include all of the information and footnotes required by GAAP for complete financial statements.

The results of operations for the three and nine months ended September 30, 2020 and 2019 are not necessarily indicative of the operating results that may be expected for the full fiscal year ending December 31, 2020 and 2019 or any future period.

The results of operations for the three months ended March 31, 2021 and 2020 are not necessarily indicative of the operating results that may be expected for the full fiscal year ending December 31, 2021 and 2020 or any future period.

The Condensed Consolidated Financial Statements of the Company included herein are unaudited and have been prepared in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).

3 unchanged sentences

by virtue of the limited partners not being able to remove the general partner.

The initial step in the Company’s determination of whether a fund for which SLP is the general partner is required to be consolidated is assessing whether the fund is a variable interest entity or a voting interest entity.

SLP then considers whether the fund is a voting interest entity (“VoIE”) in which the unaffiliated limited partners have substantive “kick-out” rights that provide the ability to dissolve (liquidate) the limited partnership or otherwise remove the general partner without cause.

The initial step in determin ing whether a fund for which SLP is the general partner is required to be consolidated is assessing whether the fund is a variable interest entity (“VIE”) or a voting interest entity (“VoIE”) .

SLP then considers whether the fund is a VoIE in which the unaffiliated limited partners have substantive “kick-out” rights that provide the ability to dissolve (liquidate) the limited partnership or otherwise remove the general partner without cause.

SLP considers the “kick-out” rights to be substantive if the general partner for the fund can be removed by the vote of a simple majority of the unaffiliated limited partners and there are no significant barriers to the unaffiliated limited partners’ ability to exercise these rights in that among other things, (1) there are no conditions or timing limits on when the rights can be exercised, (2) there are no financial or operational barriers associated with replacing the general partner, (3) there are a number of qualified replacement investment advisors that would accept appointment at the same fee level, (4) each fund’s documents provide for the ability to call and conduct a vote, and (5) the information necessary to exercise the kick-out rights and related vote are available from the fund and its administrator.

If the fund is a variable interest entity, SLP then determines whether it has a variable interest in the fund, and if so, whether SLP is the primary beneficiary.

If the fund is a VIE, SLP then determines whether it has a variable interest in the fund, and if so, whether SLP is the primary beneficiary.

In determining whether SLP is the primary beneficiary, SLP evaluates its control rights as well as economic interests in the entity held either directly or indirectly by SLP.

3 unchanged sentences

At each reporting date, SLP assesses whether it is the primary beneficiary and will consolidate or deconsolidate accordingly.

During the three and nine months ended September 30, 2020 and 2019, each fund is deemed to be a VoIE and neither SLP nor Silvercrest consolidated any of the Silvercrest Funds.

During the three months ended March 31, 2021 and 2020, each fund is deemed to be a VoIE and neither SLP nor Silvercrest consolidated any of the Silvercrest Funds.

Non-controlling Interest

As of September 30, 2020, Silvercrest holds approximately 66.3 % of the economic interests in SLP.

As of March 31, 2021, Silvercrest holds approximately 66.9 % of the economic interests in SLP.

Silvercrest is the sole general partner of SLP and, therefore, controls the management of SLP.

3 unchanged sentences

The Company views its operations as comprising one operating segment, the investment management industry.

Each of the Company’s acquired businesses has similar economic characteristics and has been or is in the process of being fully integrated.

Each of the Company’s acquired businesses has similar economic characteristics and has been, or is in the process of becoming, fully integrated.

Furthermore, our chief operating decision maker, who is the Company’s Chief Executive Officer, monitors and reviews financial information at a consolidated level for assessing operating results and the allocation of resources.

6 unchanged sentences

Equity Method Investments

Entities and investments, the activities over which the Company exercises significant influence, but which do not meet the requirements for consolidation, are accounted for using the equity method of accounting, whereby the Company records its share of the underlying income or losses of these entities.

The Company accounts for investment activities related to entities over which the Company exercises significant influence but do not meet the requirements for consolidation, using the equity method of accounting, whereby the Company records its share of the underlying income or losses of these entities.

Intercompany profit arising from transactions with affiliates is eliminated to the extent of its beneficial interest.

2 unchanged sentences

The difference between the carrying value of the equity method investment and its estimated fair value is recognized as an impairment when the loss in value is deemed other than temporary.

The Company’s equity method investments approximate their fair value at September 30, 2020 and December 31, 2019.

The Company’s equity method investments approximate their fair value at March 31, 2021 and December 31, 2020.

The fair value of the equity method investments is estimated based on the Company’s share of the fair value of the net assets of the equity method investee.

No impairment charges related to equity method investments were recorded during the three and nine months ended September 30, 2020 or 2019.

No impairment charges related to equity method investments were recorded during the three months ended March 31, 2021 or 2020.

Receivables and Due from Silvercrest Funds

29 unchanged sentences

The Company utilized this option when performing its annual impairment assessment in 20 20 and 201 9 and concluded that its single reporting unit’s fair value was more likely than not greater than its carrying value, including goodwill.

The Company has one reporting unit at September 30, 2020 and December 31, 2019.

No goodwill impairment charges were recorded during the three and nine months ended September 30, 2020 and 2019.

The Company has one reporting unit at March 31, 2021 and December 31, 2020.

No goodwill impairment charges were recorded during the three months ended March 31, 2021 and 2020.

Intangible assets of the Company are reviewed for impairment whenever events or changes in circumstances indicate that the net carrying amount of the asset may not be recoverable.

3 unchanged sentences

Identifiable finite-lived intangible assets are amortized over their estimated useful lives ranging from 3 to 20 years .

The method of amortization is based on the pattern over which the economic benefits, generally expected undiscounted cash flows, of the intangible asset are consumed.

The method of amortization is based on the pattern over which the economic benefits and generally expected undiscounted cash flows of the intangible asset are consumed.

Intangible assets for which no pattern can be reliably determined are amortized using the straight-line method.

16 unchanged sentences

The Company’s Class A stockholders are entitled to one vote for each share held of record on all matters submitted to a vote of the Company’s stockholders.

Also, Class A stockholders are entitled to receive dividends, when and if declared by the Company’s board of directors, out of funds legally available therefor, subject to any statutory or contractual restrictions on the payment of dividends and to any restrictions on the payment of dividends imposed by the terms of any outstanding preferred stock.

Class A stockholders are also entitled to receive dividends, when and if declared by the Company’s board of directors, out of funds legally available therefor, subject to any statutory or contractual restrictions on the payment of dividends and to any restrictions on the payment of dividends imposed by the terms of any outstanding preferred stock.

Dividends consisting of shares of Class A common stock may be paid only as follows:

(i) shares of Class A common stock may be paid only to holders of shares of Class A common stock and (ii) shares will be paid proportionately with respect to each outstanding share of the Company’s Class A common stock.

(i) shares of Class A common stock may be paid only to holders of shares of Class A common stock and (ii) shares of Class A common stock will be paid proportionately with respect to each outstanding share of the Company’s Class A common stock.

Upon the Company’s liquidation, dissolution or winding-up, or the sale of all, or substantially all, of the Company’s assets, after payment in full of all amounts required to be paid to creditors and to holders of preferred stock having a liquidation preference, if any, the Class A stockholders will be entitled to share ratably in the Company’s remaining assets available for distribution to Class A stockholders.

86 unchanged sentences

The adoption of this ASU did not have a material effect on the Company’s Condensed Consolidated Financial Statements.

In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other (Topic 350):

Simplifying the Test for Goodwill Impairment”.

ASU 2017-04 simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment testing.

An entity will no longer determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination.

Instead, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value.

The loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.

An entity has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary.

ASU 2017-04 will be effective for the Company in fiscal year 2021 and interim reporting periods within that year.

Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017.

The Company elected to early adopt ASU 2017-04 relating to our impairment test performed during the year ended December 31, 2019.

The adoption of this ASU did not have a material effect on the Company’s Condensed Consolidated Financial Statements.

In August 2018, the FASB issued ASU 2018-15, “Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract.” The ASU provides guidance for entities to evaluate the accounting for fees paid by a customer in a cloud computing arrangement which includes a software license.

4 unchanged sentences

The Company expects the adoption of this guidance will not have a material effect on the Company’s Condensed Consolidated Financial Statements.

On April 12, 2019, SAMG LLC and SLP entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Cortina Asset Management, LLC, a Wisconsin limited liability company (“Cortina”), and certain interest holders of Cortina (together, the “Principals of Cortina”) to acquire, directly or through a designated affiliate, substantially all of the assets of Cortina relating to Cortina’s business of providing investment management, investment advisory, and related services (the “Cortina Acquisition”).

“Principals of Cortina ”) to acquire, directly or through a designated affiliate, substantially all of the assets of Cortina relating to Cortina’s business of providing investment management, investment advisory, and related services (the “Cortina Acquisition”) .

Subject to the terms and conditions set forth in the Purchase Agreement, SAMG LLC agreed to pay to Cortina an aggregate maximum amount of $ 44,937 , 80 % of which was agreed to be paid in cash at closing by SAMG LLC, and 20 % of which was agreed to be paid by SLP in the form of issuance and delivery to certain Principals of Cortina at closing of Class B Units in SLP, in each case subject to certain adjustments as described in the Purchase Agreement.

15 unchanged sentences

If revenue for the period is equal to 95% or less of the Acquired Revenue, there is no growth payment, and if revenue for the period is between 95% and 140%, the growth payment will be determined using linear interpolation between $ 0 and $ 17,222 .

A fair value adjustment to contingent purchase price consideration of $ 1,700 and ($ 500 ) was recorded during the three and nine months September 30, 2020, respectively, and is included in general and administrative expense in the Condensed Consolidated Statement of Operations for the quarter then ended.

SAMG LLC has a liability of $ 13,500 and $ 14,000 as of September 30 , 2020 and December 31, 2019, respectively, related to earnout payments to be made in conjunction with the Cortina Acquisition which is included in accounts payable and accrued expenses in the Condensed Consolidated Statements of Financial Condition for contingent consideration.

A fair value adjustment to contingent purchase price consideration of $ 2,300 and ($ 6,000 ) was recorded during the three months ended March 31, 2021 and 2020, respectively, and is included in general and administrative expense in the Condensed Consolidated Statement of Operations for the quarters then ended.

SAMG LLC has a liability of $ 17,400 and $ 15,100 as of March 31, 2021 and December 31, 2020, respectively, related to earnout payments to be made in conjunction with the Cortina Acquisition which is included in accounts payable and accrued expenses in the Condensed Consolidated Statements of Financial Condition for contingent consideration.

In connection with their receipt of the equity consideration, the Principals of Cortina became subject to the rights and obligations set forth in the limited partnership agreement of SLP and are entitled to distributions consistent with SLP’s distribution policy.

In addition, the Principals of Cortina became parties to the e xchange a greement between the Company and its principals , which governs the exchange of Class B Units for Class A common stock of the Company (the “Exchange Agreement”) , the r esale and r egistration r ights a greement between the Company and its principals , which provides the Principals of Cortina with liquidity with respect to shares of Class A common stock of the Company received in exchange for Class B Units (the “Resale and Registration Rights Agreement”) , and the TRA of the Company, which entitles the Principals of Cortina to share in a portion of the tax benefit received by the Company upon the exchange of Class B Units for Class A common stock of the Company.

In addition, the Principals of Cortina became parties to the exchange agreement between the Company and its principals, which governs the exchange of Class B Units for Class A common stock of the Company (the “Exchange Agreement”), the resale and registration rights agreement between the Company and its principals, which provides the Principals of Cortina with liquidity with respect to shares of Class A common stock of the Company received in exchange for Class B Units (the “Resale and Registration Rights Agreement”), and the TRA of the Company, which entitles the Principals of Cortina to share in a portion of the tax benefit received by the Company upon the exchange of Class B Units for Class A common stock of the Company.

The Purchase Agreement includes customary representations, warranties and covenants.

1 unchanged sentence

Furthermore, the Company gains investment professionals that have significant experience and knowledge of the industry and establishes a presence in the Midwest.

Cortina revenue and income before provision for income taxes for the three months ended September 30 , 2020 and 2019 that are included in the Condensed Consolidated Statement of Operations are $ 3,020 and $ 1,355 , and $ 3,182 and $ 976 , respectively.

Cortina revenue and income before provision for income taxes for the nine months ended September 30 , 2020 and 2019 that are included in the Condensed Consolidated Statement of Operations are $ 8,426 and $ 3,428 , and $ 3,182 and $ 976 , respectively.

During the three and nine months ended September 30, 2020, the Company incurred $ 5 and $ 90 , respectively, in costs related to the Cortina Acquisition, and has included these in general, administrative and other in the Condensed Consolidated Statement of Operations.

During the three and nine months ended September 30, 2019, the Company incurred $ 1,147 in costs related to the Cortina Acquisition, and has included these in general, administrative and other in the Condensed Consolidated Statement of Operations.

Cash paid on date of acquisition

Term loan with City National Bank drawdown

Contingent consideration

Total purchase consideration

The Company accounted for the acquisition under the acquisition method of accounting for business combinations.

Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their respective fair values.

The method for determining relative fair value varied depending on the type of asset or liability and involved management making significant estimates related to assumptions such as future growth rates used to produce financial projections for Cortina and the selection of unobservable inputs and other assumptions.

The inputs used in establishing the fair value are in most cases unobservable and reflect the Company's own judgments about the assumptions market participants would use in pricing the assets acquired and liabilities assumed.

The following table summarizes the amounts allocated to acquired assets and assumed liabilities.

The excess of the purchase price over the fair values of the assets acquired and liabilities assumed was allocated to goodwill and intangible assets.

Total fair value of tangible assets acquired and

liabilities assumed

Customer relationships ( 15 years)

Total purchase consideration

The purchase price allocations were finalized as of December 31, 2019.

During the three months ended March 31, 2020 , the Company incurred $ 72 in costs related to the Cortina Acquisition, and has included these in general, administrative and other in the Condensed Consolidated Statement of Operations.

The Company believes the recorded goodwill is supported by the anticipated revenues and expected synergies of integrating the operations of Cortina into the Company.

Most of the goodwill is expected to be deductible for tax purposes.

The pro forma information below represents consolidated results of operations as if the acquisition of Cortina occurred on January 1, 2019.

The pro forma information has been included for comparative purposes and is not indicative of results of operations of the Company had the acquisitions occurred as of January 1, 2019, nor is it necessarily indicative of future results.

Nine Months Ended

September 30, 2019

On December 13, 2018, the Company executed an Asset Purchase Agreement (the “Asset Purchase Agreement”) by and among the Company, SLP, SAMG LLC (the “Buyer”) and Neosho Capital LLC, a Delaware limited liability company (“Neosho” or the “Seller”), and Christopher K.

5 unchanged sentences

Pursuant to the terms of the Asset Purchase Agreement, SAMG LLC acquired substantially all of the business and assets of the Seller, a provider of investment management and advisory services, including goodwill and the benefit of the amortization of goodwill related to such assets.

In consideration of the purchased assets and goodwill, SAMG LLC paid to the Seller and the Principal an aggregate purchase price consisting of (1) a cash payment of $ 399 (net of cash acquired) and (2) Class B units of SLP issued to the Principals of Neosho with a value equal to $ 20 and an equal number of shares of Class B common stock of the Company, having voting rights but no economic interest.

In consideration of the purchased assets and goodwill, SAMG LLC paid to the Seller and the Principals of Neosho an aggregate purchase price consisting of (1) a cash payment of $ 399 (net of cash acquired) and (2) Class B units of SLP issued to the Principals of Neosho with a value equal to $ 20 and an equal number of shares of Class B common stock of the Company, having voting rights but no economic interest.

The Company determined that the acquisition-date fair value of the contingent consideration was $ 1,686 , based on the likelihood that the financial and performance targets described in the Asset Purchase Agreement will be achieved.

6 unchanged sentences

The discount rate applied to the projected revenue was determined based on the weighted average cost of capital for the Company and took into account that the overall risk associated with the payments was similar to the overall risks of the Company as there is no target, floor or cap associated the contingent payments.

The Company has a liability of $ 1,103 and $ 1,403 related to earnout payments to be made in conjunction with the Neosho Acquisition which is included in accounts payable and accrued expenses in the Condensed Consolidated Statements of Financial Condition as of September 30, 2020 and December 31, 2019, respectively, for contingent consideration.

During the nine months ended September 30 , 2020, the Company made contingent purchase price payments to Neosho of $ 300 .

On December 15, 2015, the Company executed an Asset Purchase Agreement (the “Asset Purchase Agreement”) by and among the Company, SLP, SAMG LLC (the “Buyer”) and Cappiccille & Company, LLC, a Delaware limited liability company (“Cappiccille” or the “Seller”), and Michael Cappiccille (the “Principal”), to acquire certain assets of Cappiccille.

The transaction contemplated by the Asset Purchase Agreement closed on January 11, 2016 and is referred to herein as the “Cappiccille Acquisition”.

Pursuant to the terms of the Asset Purchase Agreement, SAMG LLC acquired (i) substantially all of the business and assets of the Seller, a provider of tax services, including goodwill and the benefit of the amortization of goodwill related to such assets, and (ii) the personal goodwill of the Principal.

In consideration of the purchased assets and goodwill, SAMG LLC paid to the Seller and the Principal an aggregate purchase price consisting of a cash payment of $ 148 .

The Company determined that the acquisition-date fair value of the contingent consideration was $ 354 , based on the likelihood that the financial and performance targets described in the Asset Purchase Agreement will be achieved.

SAMG LLC will make earnout payments to the Principal as soon as practicable following December 31, 2016, 2017, 2018, 2019, and during 2020, in an amount equal to 19 % of the revenue attributable to the business and assets of Cappiccille, based on revenue gained or lost post-transaction during the twelve months ended on the applicable determination date, except that the earnout payment for 2016 shall be equal to 19% of the revenue attributable to the Cappiccille for the period between the closing date of the Cappiccille Acquisition and December 31, 2016 and the earnout payment for 2020 shall be equal to 19% of the revenue attributable to the Cappiccille Acquisition for the period between January 1, 2020 and the fifth anniversary of the closing date of the Cappiccille Acquisition.

The estimated fair value of contingent consideration is recognized at the date of acquisition, and adjusted for changes in facts and circumstances until the ultimate resolution of the contingency.

Changes in the fair value of contingent consideration are reflected as a component of general and administrative expenses in the Condensed Consolidated Statements of Operations.

The fair value of the contingent consideration was based on discounted cash flow models using projected revenue for each earnout period.

The discount rate applied to the projected revenue was determined based on the

weighted average cost of capital for the Company and took into account that the overall risk associated with the payments was similar to the overall risks of the Company as there is no target, floor or cap associated the contingent payments.

A fair value adjustment to contingent purchase price consideration of $ 0 and $ 83 was recorded during the three and nine months ended September 30, 2020, respectively, and is included in general and administrative expense in the Condensed Consolidated Statement of Operations for the quarter then ended.

The Company has a liability of $ 70 and $ 101 related to earnout payments to be made in conjunction with the Cappiccille Acquisition which is included in accounts payable and accrued expenses in the Condensed Consolidated Statements of Financial Condition as of September 30, 2020 and December 31, 2019, respectively, for contingent consideration.

During the nine months ended September 30 , 2020 and 2019, the Company made contingent purchase price payments to Cappiccille of $ 113 and $ 105 , respectively.

On March 30, 2015, the Company executed an Asset Purchase Agreement (the “Asset Purchase Agreement”) by and among the Company, SLP, SAMG LLC (the “Buyer”) and Jamison Eaton & Wood, Inc., a New Jersey corporation (“Jamison” or the “Seller”), and Keith Wood, Ernest Cruikshank, III, William F.

Gadsden and Frederick E.

Thalmann, Jr., each such individual a principal of Jamison (together, the “Principals of Jamison”), to acquire certain assets of Jamison.

The transaction contemplated by the Asset Purchase Agreement closed on June 30, 2015 and is referred to herein as the “Jamison Acquisition”.

Pursuant to the terms of the Asset Purchase Agreement, SAMG LLC acquired (i) substantially all of the business and assets of the Seller, an investment adviser, including goodwill and the benefit of the amortization of goodwill related to such assets, and (ii) the personal goodwill of the Principals of Jamison.

In consideration of the purchased assets and goodwill, SAMG LLC paid to the Seller and the Principals of Jamison an aggregate purchase price consisting of (1) cash payments in the aggregate amount of $ 3,550 (the “Closing Cash Payment”), (2) a promissory note issued to the Seller in the principal amount of $ 394 , with an interest rate of 5 % per annum (the “Seller Note”), (3) promissory notes in varying amounts issued to each of the Principals of Jamison for an aggregated total amount of $ 1,771 , each with an interest rate of 5 % per annum (together, the “Principals of Jamison Notes”) and (4) Class B units of SLP (the “Class B Units”) issued to the Principals of Jamison with a value equal to $ 3,562 and an equal number of shares of Class B common stock of the Company, having voting rights but no economic interest (together, the “Equity Consideration”).

The Company determined that the acquisition-date fair value of the contingent consideration was $ 1,429 , based on the likelihood that the financial and performance targets described in the Asset Purchase Agreement will be achieved.

SAMG LLC will make earnout payments to the Principals of Jamison as soon as practicable following December 31, 2015, 2016, 2017, 2018, 2019 and during 2020, in an amount equal to 20 % of the EBITDA attributable to the business and assets of Jamison (the “Jamison Business”), based on revenue gained or lost post-transaction during the twelve months ended on the applicable determination date, except that the earnout payment for 2015 shall be equal to 20% of the EBITDA attributable to the Jamison Business for the period between the closing date of the Jamison Acquisition and December 31, 2015 and the earnout payment for 2020 shall be equal to 20% of the EBITDA attributable to the Jamison Business for the period between January 1, 2020 and the fifth anniversary of the closing date of the Jamison Acquisition.

The estimated fair value of contingent consideration is recognized at the date of acquisition, and adjusted for changes in facts and circumstances until the ultimate resolution of the contingency.

Changes in the fair value of contingent consideration are reflected as a component of general and administrative expenses in the Condensed Consolidated Statements of Operations.

The fair value of the contingent consideration was based on discounted cash flow models using projected EBITDA for each earnout period.

The discount rate applied to the projected EBITDA was determined based on the weighted average cost of capital for the Company and took into account that the overall risk associated with the payments was similar to the overall risks of the Company as there is no target, floor or cap associated the contingent payments.

A fair value adjustment to contingent purchase price consideration of $ 0 and $ 70 was recorded during the three and nine months ended September 30, 2020, respectively, and is included in general and administrative expense in the Condensed Consolidated Statement of Operations for the quarter then ended.

The Company has a liability of $ 160 and $ 418 as of September 30, 2020 and December 31, 2019, respectively, related to earnout payments to be made in conjunction with the Jamison Acquisition which is included in accounts payable and accrued expenses in the Condensed Consolidated Statements of Financial Condition for contingent consideration.

During the nine months ended September 30, 2020 and 2019, the Company made contingent purchase price payments to Jamison of $ 328 and $ 320 , respectively.

The six months ended June 30, 2020 represents the final measurement period of the Jamison contingent purchase price consideration.

In connection with their receipt of the Equity Consideration, the Principals of Jamison became subject to the rights and obligations set forth in the limited partnership agreement of SLP and are entitled to distributions consistent with SLP’s distribution policy.

In addition, the Principals of Jamison became parties to the Exchange Agreement, which governs the exchange of Class B Units for Class A common stock of the Company, the Resale and Registration Rights Agreement, which provides the Principals of Jamison with liquidity with respect to shares of Class A common stock of the Company received in exchange for Class B Units, and the TRA of the Company, which entitles the Principals of Jamison to share in a portion of the tax benefit received by the Company upon the exchange of Class B Units for Class A common stock of the Company.

The Asset Purchase Agreement includes customary representations, warranties and covenants.

The strategic acquisition of Jamison, a long-standing and highly regarded investment boutique, strengthen ed the Company’s presence in the greater New York market and the Company gain ed investment managers that have significant experience and knowledge of the industry.

Jamison’s clients gained access to the Company’s complete investment management, wealth planning and reporting capabilities, including proprietary value equity and fixed income disciplines and alternative investment advisory services.

The Company believes the recorded goodwill is supported by the anticipated revenues and expected synergies of integrating the operations of Jamison into the Company.

The goodwill is expected to be deductible for tax purposes.

The Company has a liability of $ 1,028 related to earnout payments to be made in conjunction with the Neosho Acquisition which is included in accounts payable and accrued expenses in the Condensed Consolidated Statements of Financial Condition as of March 31, 2021 and December 31, 2020, for contingent consideration.

During the three months ended March 31, 2021 and 2020 , the Company made contingent purchase price payments to Neosho of $ 0 and $ 300 , respectively.

INVESTMENTS AND FAIR VALUE MEASUREMENTS

Investments include $ 16 and $ 1,781 as of September 30, 2020 and December 31, 2019, respectively, representing the Company’s interests in the Silvercrest Funds which have been established and managed by the Company and its affiliates.

Investments include $ 53 and $ 914 as of March 31, 2021 and December 31, 2020, respectively, representing the Company’s interests in the Silvercrest Funds which have been established and managed by the Company and its affiliates.

The Company’s financial interest in these funds can range in amounts up to 2 % of the net assets of the funds.

Despite the Company’s insignificant financial interest, the Company applies the equity method to account for its interests in affiliated investment funds because it exercises significant influence over these funds as the Company typically serves as the general partner, managing member or equivalent for these funds.

During 2007, the Silvercrest Funds granted rights to the unaffiliated investors in each respective fund to provide that a simple majority of the fund’s unaffiliated investors will have the right, without cause, to remove the general partner or equivalent of that fund or to accelerate the liquidation date of that fund in accordance with certain procedures.

At September 30, 2020 and December 31, 2019, the Company determined that none of the Silvercrest Funds were required to be consolidated.

The Company applies the equity method to account for its interests in affiliated investment funds, despite the Company’s insignificant financial interest therein, because the Company exercises significant influence over and typically serves as the general partner, managing member, or equivalent of these funds.

During 2007, the Silvercrest Funds granted the unaffiliated investors in each respective fund the right, by a simple majority of the fund’s unaffiliated investors, without cause, to remove the general partner or equivalent of that fund or to accelerate the liquidation date of that fund in accordance with certain procedures.

At March 31, 2021 and December 31, 2020, the Company determined that none of the Silvercrest Funds were required to be consolidated.

The Company’s involvement with these entities began on the dates that they were formed, which range from July 2003 to July 2014.

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The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the investment.

At September 30, 2020 and December 31, 2019, the Company did no t have any financial assets or liabilities that are recorded at fair value on a recurring basis, with the exception of the contingent consideration related to the acquisition earnouts.

At March 31, 2021 and December 31, 2020, the Company did no t have any financial assets or liabilities that are recorded at fair value on a recurring basis, with the exception of the contingent consideration related to the acquisition earnouts.

Contingent Consideration

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This fair value measurement is based on unobservable (Level 3) inputs.

The following table represents changes in the fair value of estimated contingent consideration for the year ended December 31, 2019 and the nine months ended September 30, 2020:

The following table represents changes in the fair value of estimated contingent consideration for the year ended December 31, 2020 and the three months ended March 31, 2021:

Balance at January 1, 2020

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Non-cash changes in fair value of estimated contingent consideration

Balance at September 30, 2020

Balance at March 31, 2021

Estimated contingent consideration is included in accounts payable and accrued expenses in the Condensed Consolidated Statements of Financial Condition.

Payments of contingent consideration are included in earn-outs paid related to acquisitions completed on or after January 1, 2009 in financing activities in the Condensed Consolidated Statements of Cash Flows.

Payments of contingent consideration are included in earn-outs paid related to acquisitions in financing activities in the Condensed Consolidated Statements of Cash Flows.

In determining fair value of the estimated contingent consideration, the acquired business’ future performance is estimated using financial projections for the acquired business.

These financial projections, as well as alternative scenarios of financial performance, are measured against the performance targets specified in each respective acquisition agreement.

In addition, discount rates are established based on the cost of debt and the cost of equity.

In addition, discount rates are

established based on the cost of debt and the cost of equity.

The Company uses the Monte Carlo Simulation Model to determine the fair value of the Company’s estimated contingent consideration.

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Significant increases or decreases in the Company’s forecasted growth rates over the measurement period or discount rates would result in a higher or lower fair value measurement.

Inputs used in the fair value measurement of estimated contingent consideration at September 30, 2020 and December 31, 2019 are summarized below:

Inputs used in the fair value measurement of estimated contingent consideration at March 31, 2021 and December 31, 2020 are summarized below:

Monte Carlo Simulation Model

September 30,

Forecasted growth rate

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Acquisitions for more details on contingent consideration related to acquisition earnouts.

At September 30, 2020 and December 31, 2019, financial instruments that are not held at fair value are categorized in the table below:

September 30, 2020

At March 31, 2021 and December 31, 2020, financial instruments that are not held at fair value are categorized in the table below:

March 31, 2021

December 31, 2020

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Borrowings under credit facility

Includes $ 1,397 and $ 1,392 of cash equivalents at September 30, 2020 and December 31, 2019, respectively, that fall under Level 1 in the fair value hierarchy.

Includes $ 1,880 and $ 1,398 of cash equivalents at March 31, 2021 and December 31, 2020, respectively, that fall under Level 1 in the fair value hierarchy.

Investments consist of the Company’s equity method investments in affiliated investment funds which have been established and managed by the Company and its affiliates.

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RECEIVABLES, NET

The following is a summary of receivables as of September 30, 2020 and December 31, 2019:

September 30,

The following is a summary of receivables as of March 31, 2021 and December 31, 2020:

December 31, 2020

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FURNITURE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET

The following is a summary of furniture, equipment and leasehold improvements, net as of September 30, 2020 and December 31, 2019:

September 30,

The following is a summary of furniture, equipment and leasehold improvements, net as of March 31, 2021 and December 31, 2020:

Leasehold improvements

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Furniture, equipment and leasehold improvements, net

Depreciation expense for the three months ended September 30, 2020 and 2019 was $ 279 and $ 267 , respectively.

Depreciation expense for the nine months ended September 30, 2020 and 2019 was $ 838 and $ 815 , respectively.

During the nine months ended September 30, 2020 and 2019, the Company wrote off leased assets of $ 209 and $ 310 , with accumulated depreciation of $ 180 and $ 310 , respectively.

The following is a summary of the changes to the carrying amount of goodwill for the nine months ended September 30, 2020 and the year ended December 31, 2019:

September 30,

Depreciation expense for the three months ended March 31, 2021 and 2020 was $ 281 and $ 273 , respectively.

During the three months ended March 31, 2021, the Company wrote off leased assets of $ 82 , with accumulated depreciation of $ 64 .

The following is a summary of the changes to the carrying amount of goodwill for the three months ended March 31, 2021 and the year ended December 31, 2020:

Gross balance

Accumulated impairment losses

Acquisition of Neosho

Acquisition of Cortina

Gross balance

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INTANGIBLE ASSETS, NET

The following is a summary of intangible assets as of September 30, 2020 and December 31, 2019:

The following is a summary of intangible assets as of March 31, 2021 and December 31, 2020:

Relationships

Balance, January 1, 2021

Balance, September 30, 2020

Balance, March 31, 2021

Accumulated amortization

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Amortization expense

Balance, September 30, 2020

Balance, March 31, 2021

Net book value

Balance, January 1, 2020

Acquisition of Cortina

Balance, December 31, 2020

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Net Book Value

Amortization expense related to intangible assets was $ 664 and $ 705 for the three months ended September 30, 2020 and 2019, respectively.

Amortization expense related to intangible assets was $ 2,069 and $ 1,401 for the nine months ended September 30, 2020 and 2019, respectively.

During the nine months ended September 30, 2020, the Company wrote off other intangible assets related to a non-compete agreement with one of the principals of Jamison which was no longer in effect at September 30, 2020 with a cost of $ 6 and the related accumulated amortization of $ 5 .

Amortization expense related to intangible assets was $ 657 and $ 703 for the three months ended March 31, 2021 and 2020, respectively.

During the three months ended March 31, 2020, the Company wrote off other intangible assets related to a non-compete agreement with one of the principals of Jamison which was no longer in effect at March 31, 2020 with a cost of $ 6 and the related accumulated amortization of $ 5 .

Amortization related to the Company’s finite life intangible assets is scheduled to be expensed over the next five years and thereafter as follows:

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Borrowings under the term loan on or prior to June 30, 2021 are payable in 20 equal quarterly installments.

Borrowings under the term loan after June 30, 2021 will be payable in equal quarterly installments through the maturity date.

Borrowings under the

term loan after June 30, 2021 will be payable in equal quarterly installments through the maturity date.

The credit facility contains restrictions on, among other things, (i) incurrence of additional debt, (ii) creating liens on certain assets, (iii) making certain investments, (iv) consolidating, merging or otherwise disposing of substantially all of our assets, (v) the sale of certain assets, and (vi) entering into transactions with affiliates.

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The credit facility contains customary events of default, including the occurrence of a change in control which includes a person or group of persons acting together acquiring more than 30 % of the total voting securities of Silvercrest.

The Company was in compliance with the covenants under the credit facility as of September 30, 2020.

As of September 30, 2020 and December 31, 2019, the Company did no t have any outstanding borrowings under the revolving credit facility.

As of September 30, 2020 and December 31, 2019, the Company had $ 13,500 and $ 16,200 , respectively, outstanding under the term loan.

There was no accrued but unpaid interest as of September 30, 2020 or December 31, 2019.

Interest expense, which also includes amortization of deferred financing fees, incurred on the revolving credit facility and term loan for the three months ended September 30, 2020 and 2019 was $ 117 and $ 237 , respectively.

Interest expense, which also includes amortization of deferred financing fees, incurred on the revolving credit facility and term loan for the nine months ended September 30, 2020 and 2019 was $ 437 and $ 250 , respectively.

The Company was in compliance with the covenants under the credit facility as of March 31, 2021 .

As of March 31, 2021 and December 31, 2020, the Company did no t have any outstanding borrowings under the revolving credit facility.

As of March 31, 2021 and December 31, 2020, the Company had $ 11,700 and $ 12,600 , respectively, outstanding under the term loan.

Accrued but unpaid interest was $ 32 and $ 0 as of March 31, 2021 and December 31, 2020, respectively.

Interest expense, which also includes amortization of deferred financing fees, incurred on the revolving credit facility and term loan for the three months ended March 31, 2021 and 2020 was $ 102 and $ 189 , respectively.

COMMITMENTS AND CONTINGENCIES

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The Company leases office space pursuant to operating leases that are subject to specific escalation clauses.

Rent expense charged to operations for the three months ended September 30, 2020 and 2019 amounted to $ 1,597 and $ 1,566 , respectively.

The Company received sub-lease income from sub-tenants during the three months ended September 30, 2020 and 2019 of $ 38 and $ 28 , respectively.

Therefore, for the three months ended September 30, 2020 and 2019, net rent expense amounted to $ 1,559 and $ 1,538 , respectively, and is included in general and administrative expenses in the Condensed Consolidated Statements of Operations.

The Company leases office space pursuant to operating leases that are subject to specific escalation clauses.

Rent expense charged to operations for the nine months ended September 30, 2020 and 2019 amounted to $ 4,777 and $ 4,625 , respectively.

The Company received sub-lease income from sub-tenants during the nine months ended September 30, 2020 and 2019 of $ 115 and $ 98 , respectively.

Therefore, for the nine months ended September 30, 2020 and 2019, net rent expense amounted to $ 4,662 and $ 4,527 , respectively, and is included in general and administrative expenses in the Condensed Consolidated Statements of Operations.

As security for performance under the leases, the Company is required to maintain letters of credit in favor of the landlord totaling $ 506 as of September 30, 2020 and December 31, 2019.

Rent expense charged to operations for the three months ended March 31, 2021 and 2020 amounted to $ 1,608 and $ 1,595 , respectively.

The Company received sub-lease income from sub-tenants during the three months ended March 31, 2021 and 2020 of $ 38 and $ 38 , respectively.

Therefore, for the three months ended March 31, 2021 and 2020, net rent expense amounted to $ 1,570 and $ 1,557 , respectively, and is included in general and administrative expenses in the Condensed Consolidated Statements of Operations.

As security for performance under the leases, the Company is required to maintain letters of credit in favor of the landlord totaling $ 506 as of March 31, 2021 and December 31, 2020.

Furthermore, the Company maintains an $ 80 letter of credit in favor of its Boston landlord.

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The Company paid a refundable security deposit of $ 2 .

In connection with the Jamison Acquisition, the Company assumed lease agreements for office space in Bedminster and Princeton, NJ.

In connection with the acquisition of Jamison Eaton & Wood, Inc.

(the “Jamison Acquisition”), the Company assumed lease agreements for office space in Bedminster and Princeton, NJ.

The Bedminster lease, as extended, expires on March 31, 2022 .

Monthly rent expense on this lease is $ 11 .

Monthly rent expense on the Bedminster lease is $ 11 .

The Bedminster lease is subject to escalation clauses and provides for a rent-fee period of four months .

The Princeton lease, as extended, expired on April 30, 2016 .

Monthly rent expense on this lease was $ 5 .

Both leases are subject to escalation clauses, and the Bedminster lease provided for a rent-free period of four months .

In December 2015, the Company extended its lease related to its New York City office space.

The amended lease commenced on October 1, 2017 and expires on September 30, 2028 .

The lease is subject to escalation clauses, and provided for a rent-free period of twelve months and for tenant improvements of up to $ 2,080 .

The lease is subject to escalation clauses and provides for a rent-free period of twelve months and for tenant improvements of up to $ 2,080 .

Monthly rent under this extension is $ 446 .

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The lease is subject to escalation clauses and provides for a rent-free period of five months .

With the Cappiccille Acquisition, the Company assumed a lease agreement for office space in Livingston, NJ.

The lease was month-to-month.

Monthly rent expense was $ 2 .

This lease was terminated in January 2019 .

In January 2018, the Company extended its lease related to its Boston, MA office space.

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Monthly rent expense is $ 12 .

The components of lease expense for the three and nine months ended September 30, 2020 and 2019 were as follows:

Three Months Ended

September 30,

Nine Months Ended

September 30,

The components of lease expense for the three months ended March 31, 2021 and 2020 were as follows:

Ended March 31, 2021

Ended March 31, 2020

Operating Lease Cost

Financing Lease Cost:

Finance Lease Cost:

Amortization of ROU assets

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The Company has finance leases for the following office equipment:

(i) a five-year finance lease agreement for two copiers totaling $ 152 with monthly minimum lease payments of $ 3 , which began on February 1, 2017 and continue through January 31, 2022 , (ii) a three-year lease agreement for four copiers totaling $ 72 with monthly minimum payments of $ 2 , which began on July 1, 2017 and continue through June 30, 2020 , (iii) a three-year lease agreement for one copier totaling $ 11 with monthly minimum payments of $ 0.3 , which began on March 1, 2018 and continue through February 28, 2021 , (iv) a three-year lease agreement for one copier totaling $ 13 with monthly minimum payments of $ 0.4 , which began on March 1, 2019 and continue through February 28, 2022 , (v) a 39 -month lease agreement for one copier totaling $ 12 with monthly minimum lease payments of $ 0.4 , which began on March 1, 2019 and continue through May 31, 2022 , (vi) a lease agreement for one copier that was assumed as part of the Cortina Acquisition with monthly minimum lease payments of $ 1 , which began on July 1, 2019 and continue through November 30, 2021 , (vii) a three year lease agreement for two copiers totaling $ 51 with monthly minimum lease payments of $ 1 , which began on August 1, 2019 and continue through July 31, 2022 , (viii) a five year lease agreement for a copier totaling $ 82 with monthly minimum lease payments of $ 1 , which began on May 1, 2020 and continue through April 30, 2025 , (ix) a three year lease agreement for a copier totaling $ 59 with minimum monthly lease payments of $ 2 , which began on June 1, 2020 and continue through May 31, 2023 , (x) a three year lease agreement for two copiers totaling $ 43 with minimum monthly lease payments of $ 1 , which began on August 20, 2020 and continue through August 19, 2023 and (xi) a three year lease agreement for two copiers totaling $ 39 with minimum monthly lease payments of $ 1 , which began on August 20, 2020 and continue through August 19, 2023 .

The aggregate principal balance of finance leases was $ 289 and $ 196 as of September 30, 2020 and December 31, 2019, respectively.

The assets relating to finance leases that are included in equipment as of September 30, 2020 and December 31, 2019 are as follows:

September 30,

(i) a three-year lease agreement for one copier totaling $ 11 with monthly minimum payments of $ 0.3 , which began on March 1, 2018 and continues through February 28, 2021 , (ii) a three-year lease agreement for one copier totaling $ 13 with monthly minimum payments of $ 0.4 , which began on March 1, 2019 and continue through February 28, 2022 , (iii) a 39 -month lease agreement for one copier totaling $ 12 with monthly minimum lease payments of $ 0.4 , which began on March 1, 2019 and continue through May 31, 2022 , (iv) a lease agreement for one copier that was assumed as part of the Cortina Acquisition with monthly minimum lease payments of $ 1 , which began on July 1, 2019 and continue through November 30, 2021 , (v) a three year lease agreement for two copiers totaling $ 51 with monthly minimum lease payments of $ 1 , which began on August 1, 2019 and continue through July 31, 2022 , (vi) a five year lease agreement for a copier totaling $ 82 with monthly minimum lease payments of $ 1 , which began on May 1, 2020 and continue through April 30, 2025 , (vii) a three year lease agreement for a copier totaling $ 59 with minimum monthly lease payments of $ 2 , which began on June 1, 2020 and continue through May 31, 2023 , (viii) a three year lease agreement for two copiers totaling $ 43 with minimum monthly lease payments of $ 1 , which began on August 20, 2020 and continue through August 19, 2023 , (ix) a three year lease agreement for two copiers totaling $ 39 with minimum monthly lease payments of $ 1 , which began on August 20, 2020 and continue through August 19, 2023 and (x) a five year lease agreement for four copiers totaling $ 86 with minimum monthly lease payments of $ 2 , which began on February 1, 2021 and continue through January 31, 2026 .

The aggregate principal balance of finance leases was $ 297 and $ 259 as of March 31, 2021 and December 31, 2020, respectively.

The assets relating to finance leases that are included in equipment as of March 31, 2021 and December 31, 2020 are as follows:

Finance lease assets included in furniture and equipment

Finance lease assets included in software

Accumulated depreciation and amortization

Depreciation expense relating to finance lease assets was $ 26 and $ 25 for the three months ended September 30, 2020 and 2019, respectively.

Depreciation expense relating to finance lease assets was $ 88 and $ 78 for the nine months ended September 30, 2020 and 2019, respectively.

During the three and nine months ended September 30, 2020 and 2019, the Company wrote off leased assets of $ 209 and $ 310 , with accumulated depreciation of $ 180 and $ 310 , respectively.

Depreciation expense relating to finance lease assets was $ 30 and $ 31 for the three months ended March 31, 2021 and 2020, respectively.

During the three months ended March 31, 2021, the Company wrote off leased assets of $ 82 , with accumulated depreciation of $ 64 .

Future minimum lease payments under finance leases are as follows:

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Weighted-average discount rate

SLP historically made, and will continue to make, distributions of its net income to the holders of its partnership units for income tax purposes as required under the terms of its Second Amended and Restated Limited Partnership Agreement and also made, and will continue to make, additional distributions of net income under the terms of its Second Amended and Restated Limited Partnership Agreement.

Partnership distributions totaled $ 1,497 and $ 1,626 , for the three months ended September 30, 2020 and 2019, respectively.

Partnership distributions totaled $ 6,521 and $ 7,385 , for the nine months ended September 30, 2020 and 2019, respectively.

SLP has historically made, and will continue to make, distributions of its net income to the holders of its partnership units for income tax purposes as required under the terms of its Second Amended and Restated Limited Partnership Agreement and also made, and will continue to make, additional distributions of net income under the terms of its Second Amended and Restated Limited Partnership Agreement.

Partnership distributions totaled $ 1,758 and $ 2,226 , for the three months ended March 31, 2021 and 2020, respectively.

Pursuant to SLP’s Second Amended and Restated Limited Partnership Agreement, partner incentive allocations are treated as distributions of net income.

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Net income allocation is subject to the recovery of the allocated losses of prior periods.

Distributions of partner incentive allocations of net income for the nine months ended September 30, 2020 and 2019 amounted to $ 27,236 and $ 27,199 , respectively.

The distributions are included in non-controlling interests in the Condensed Consolidated Statements of Financial Condition and Condensed Consolidated Statement of Changes in Equity for the nine months ended September 30, 2020 and 2019.

Distributions of partner incentive allocations of net income for the three months ended March 31, 2021 and 2020 amounted to $ 27,619 and $ 27,245 , respectively.

The Company treats SLP’s partner incentive allocations as compensation expense and accrues such amounts when earned.

During the three months ended September 30, 2020 and 2019, SLP accrued partner incentive allocations of $ 7,121 and $ 7,115 , respectively.

During the nine months ended September 30, 2020 and 2019, SLP accrued partner incentive allocations of $ 20,055 and $ 18,766 , respectively.

During the three months ended March 31, 2021 and 2020, SLP accrued partner incentive allocations of $ 8,004 and $ 7,377 , respectively.

Silvercrest—Equity

Silvercrest has the following authorized and outstanding equity:

Shares at September 30, 2020

Shares at March 31, 2021

Voting Rights

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Class A common stockholders have 100 % of the rights of all classes of Silvercrest’s capital stock to receive dividends.

During 2020 and 2016 Silvercrest granted 8,242 and 10,582 restricted stock units, respectively, which will vest and settle in the form of Class A shares of Silvercrest, of which 8,242 remain unvested as of September 30, 2020.

During 2021 and 2020 Silvercrest granted 0 and 8,242 restricted stock units, respectively, which will vest and settle in the form of Class A shares of Silvercrest, of which 8,242 remain unvested as of March 31, 2021.

Each share of Class B common stock is entitled to one vote per share.

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The principals collectively hold 4,769,835 Class B units, which represent the right to receive their proportionate share of the distributions made by SLP, and 74,907 restricted stock units which will vest and settle in the form of Class B units of SLP.

The 74,906 restricted stock units which have been issued to our principals entitle the holders thereof to participate in distributions from SLP as if the underlying Class B units are outstanding and thus are taken into account to determine the economic interest of each holder of units in SLP.

The 74,907 restricted stock units which have been issued to our principals entitle the holders thereof to participate

in distributions from SLP as if the underlying Class B units are outstanding and thus are taken into account to determine the economic interest of each holder of units in SLP.

However, because the Class B units underlying the restricted stock units have not been issued and are not deemed outstanding, the holders of restricted stock units have no voting rights with respect to those Class B units.

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Silvercrest will fund dividends to its stockholders from its proportionate share of those distributions after provision for its income taxes and other obligations.

During the three and nine months ended September 30, 2020, Silvercrest issued the following shares:

During the three months ended March 31, 2021, Silvercrest issued the following shares:

Class A Common Stock

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