Lease Commitments

12 Months Ended

Dec. 31, 2023

LEASE COMMITMENTS

The Company determines if a contract contains a lease at inception of the contract through a review by vendor management of the facts and circumstances of the contract to determine if a lease is present. A questionnaire is then forwarded to the corporate finance department to come to agreement on the determination. There are no significant assumptions made in the identification of lease components and there has been no history of contracts containing both lease and non-lease components. The Company has operating leases relating to office space, vehicles, computer equipment, and office equipment, which are recorded as a lease obligation liability disclosed in the "Accrued expenses and other liabilities" line on the Consolidated Balance Sheets and as a lease right-of-use asset disclosed in the "Other assets" line on the Consolidated Balance Sheets. The lease right-of-use asset represents the Company's right to use each underlying asset for the lease term and the lease obligation liability represents the Company's obligation over the lease term. As an accounting policy election, we have elected the practical expedient on not separating lease components from non-lease components to each major asset class.

The Company's lease obligation is recorded at the present value of the lease payments based on the term of the applied lease. The Company has elected to categorize its leases into four categories based on length of lease terms and applies an incremental borrowing rate of interest as of the effective date of adoption or the lease effective date equivalent to a collateralized rate with similar terms. The four categories are as follows: less than three years, three to five years, five to 10 years and greater than 10 years. The collateralized discount rate used to calculate the present value of future minimum lease payments is based, where appropriate, on current industry borrowing rates for financial companies with similar ratings. The Company does not have any restrictions or covenants associated with its lease arrangements.

Lease terms and options vary in the Company's operating leases dependent upon the underlying leased asset. We exclude options to extend or terminate a lease from our recognition as part of our right-of-use assets and lease liabilities until those options are known and/or executed, as we typically do not exercise options to purchase the underlying leased asset. As of December 31, 2023, we have leases with remaining terms of one year to eight years, some of which may include no options for renewal and others with options to extend the lease terms from six months to five years.

The Company has six lease agreements with the Company serving as the lessor. The properties are office spaces and parking. The terms of the leases vary depending on the property and range from two years to nine years, which may include options for renewal or to extend lease terms or no options for renewal. The Company has elected to categorize these leases into four categories based on length of lease terms and applies an incremental borrowing rate

of interest as of the effective date of adoption or the lease effective date equivalent to a collateralized rate with similar terms. The four categories are as follows: less than three years, three to five years, five to 10 years and greater than 10 years. The collateralized discount rate used to calculate the present value of future minimum lease payments is based, where appropriate, on current industry borrowing rates for similar rated financial companies.

The components of our operating leases were as follows:


	As of December 31, 2023		As of December 31, 2022

Components of lease expense:
Operating lease expense	$	9,187	8,763
Less lessor income	507		77
Less sublease income	532		250
Net lease expense	8,148		8,436
Cash flows information related to leases:
Operating cash outflow from operating leases	8,219		8,396


Balance sheet information for operating leases:	As of December 31, 2023			As of December 31, 2022

Operating lease right-of-use assets (Other assets on Consolidated Balance Sheets)	$	29,184		$	26,472
Operating lease liabilities (Accrued expenses and other liabilities on Consolidated Balance Sheets)	29,668			26,924
Right-of-use assets obtained in exchange for new operating lease liabilities	9,336			2,807

Weighted average remaining lease term	3.77 years			3.81 years
Weighted average discount rate	4.17		%	2.91		%


Maturities of lease liabilities:	As of December 31, 2023		As of December 31, 2022
2023	$	—	$	8,452
2024	9,361		7,007
2025	9,029		6,438
2026	7,748		5,141
2027	3,617		1,315
2028	1,696		—
Thereafter	811		—
Total lease payments	32,262		28,353
Less imputed interest	(2,594)		(1,429)
Lease liability	$	29,668	$	26,924


Maturities of lease receivables:	As of December 31, 2023		As of December 31, 2022
2023	$	—	$	618
2024	1,051		487
2025	1,066		498
2026	1,124		554
2027	1,092		519
2028	584		10
Thereafter	2,691		38
Total lease payments receivable	7,608		2,724