Leases

3 Months Ended

Mar. 31, 2024

Leases

The Company enters into lease agreements that are primarily for office space. These leases are accounted for as operating leases, with lease expense recognized on a straight-line basis over the term of the lease. The Company occasionally assumes equipment lease agreements through business acquisitions. These leases are accounted for as finance leases.

Included in a portion of the Company's current leases is an option to extend or cancel the lease term. The exercise of such an option is solely at the Company's discretion. The lease liability recorded in the unaudited Consolidated Balance Sheets includes lease payments related to options to extend or cancel the lease term if the Company determines at the inception date that the lease is expected to be renewed or extended. The Company, in determining the present value of lease payments, utilizes the average rate over a 10-year term based upon the Moody's seasoned Aaa corporate bond yields, as explicit rates of interest are not readily determinable in the lease contracts. The Company does not carry debt; thus no incremental borrowing rate was available to the Company.

Lease expense is included in office and technology expenses in the unaudited Consolidated Statements of Operations. Information regarding the Company’s leases follows:


	Three Months Ended March 31,
(in thousands)	2024		2023
Operating leases	$	658	$	731
Finance leases:
Amortization of lease assets	71		54
Lease expense	$	729	$	785
Sub-lease income	(52)		—
Lease cost	$	677	$	785


(b)						Leases with an initial term of twelve months or less are not recorded on the unaudited Consolidated Balance Sheets.

Components of the lease liability presented on the unaudited Consolidated Balance Sheets are as follows:


(in thousands)	As of March 31, 2024		As of December 31, 2023
Current:
Operating lease liabilities	$	1,755	$	2,201
Finance lease liabilities	177		170
Non-current:
Operating lease liabilities	4,299		3,792
Finance lease liabilities	597		286
Total lease liabilities	$	6,828	$	6,449

The future minimum lease payments for leases that have initial or remaining noncancelable lease terms in excess of one year as of March 31, 2024, are summarized as follows:


Year Ended (in thousands)	Operating Leases		Finance Leases		Total
2024	$	1,904	$	199	$	2,103
2025	2,179		241		2,420
2026	1,332		203		1,535
2027	424		136		560
2028	183		56		239
Thereafter	433		—		433
Total undiscounted payments	$	6,455	$	835	$	7,290
Less: present value adjustment	(401)		(61)		(462)
Lease liabilities	$	6,054	$	774	$	6,828

Supplemental lease information is as follows:


	As of March 31, 2024		As of December 31, 2023
Weighted average remaining lease term (years)
Operating Leases	3.34		3.07
Finance Leases	3.49		2.93
Weighted average discount rate
Operating Leases	3.9	%	3.8	%
Finance Leases	4.3	%	3.7	%

The Company does not have any material pending operating or financing lease agreements that become effective in future periods.