Note 12 – Leases

The Company enters into lease agreements that are primarily used 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.

A portion of the Company's current leases include an option to extend or cancel the lease term. The exercise of such an option is solely at the Company's discretion. The operating lease liability recorded in the Consolidated Balance Sheets includes lease payments related to options to extend or cancel the lease term if the Company determined at the date of adoption that the lease was expected to be renewed or extended. The Company, in determining the present value of lease payments, utilized the average rate over a 10-year term based upon the Moody's seasoned Aaa corporate bond yields, as explicit rates of interest were 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 Consolidated Statements of Income. Information regarding the Company’s operating leases follows:



(in thousands)	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Operating leases	$	312	$	944
Short-term leases (b)	30		103
Lease expense	$	342	$	1,047
Sub-lease income	—		—
Lease cost	$	342	$	1,047



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

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



(in thousands)	As of September 30, 2019
Current:
Operating lease liabilities	$	1,045
Non-current:
Operating lease liabilities	3,577
Total operating lease liabilities	$	4,622

The future minimum lease payments under operating leases that have initial or remaining noncancelable lease terms in excess of one year as of September 30, 2019, are summarized as follows:



Year Ended (in thousands)
2019	$	308
2020	1,208
2021	1,122
2022	893
2023	585
Thereafter	1,029
Total undiscounted payments	$	5,145
Less: present value adjustment	(523		)
Operating lease liabilities	$	4,622

Supplemental lease information is as follows:



As of September 30, 2019
Weighted average remaining lease term (years)	5.09
Weighted average discount rate	4.2	%

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