Leases

6 Months Ended

Jun. 30, 2023

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. 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 determined at the inception date 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 unaudited Consolidated Statements of Operations. Information regarding the Company’s leases follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2023		2022		2023		2022
Operating leases	$	721	$	616	$	1,393	$	1,179
Finance leases:
Amortization of lease assets	54		—		108		—
Interest on lease liabilities	6		—		13		—
Short-term leases (b)	18		46		70		113
Lease expense	$	799	$	662	$	1,584	$	1,292
Sub-lease income	—		—		—		—
Lease cost	$	799	$	662	$	1,584	$	1,292


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

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


(in thousands)	As of June 30, 2023		As of December 31, 2022
Current:
Operating lease liabilities	$	1,209	$	1,693
Finance lease liabilities	115		218
Non-current:
Operating lease liabilities	5,202		4,401
Finance lease liabilities	523		527
Total lease liabilities	$	7,049	$	6,839

The future minimum lease payments for leases that have initial or remaining noncancelable lease terms in excess of one year as of June 30, 2023, are summarized as follows:


Year Ended (in thousands)	Operating Leases		Finance Leases		Total
2023	$	1,320	$	121	$	1,441
2024	2,197		202		2,399
2025	1,684		171		1,855
2026	1,067		134		1,201
2027	337		51		388
Thereafter	214		—		214
Total undiscounted payments	$	6,819	$	679	$	7,498
Less: present value adjustment	(408)		(41)		(449)
Lease liabilities	$	6,411	$	638	$	7,049

Supplemental lease information is as follows:


	As of June 30, 2023		As of December 31, 2022
Weighted average remaining lease term (years)
Operating Leases	3.29		3.43
Finance Leases	3.39		3.80
Weighted average discount rate
Operating Leases	3.9	%	3.9	%
Finance Leases	3.7	%	3.7	%

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