Leases

9 Months Ended

Sep. 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 September 30,				Nine Months Ended September 30,
(in thousands)	2023		2022		2023		2022
Operating leases	$	627	$	697	$	2,020	$	1,876
Finance leases:
Amortization of lease assets	74		—		182		—
Interest on lease liabilities	5		—		18		—
Short-term leases (b)	31		64		101		177
Lease expense	$	737	$	761	$	2,321	$	2,053
Sub-lease income	—		—		—		—
Lease cost	$	737	$	761	$	2,321	$	2,053


(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 September 30, 2023		As of December 31, 2022
Current:
Operating lease liabilities	$	466	$	1,693
Finance lease liabilities	56		218
Non-current:
Operating lease liabilities	5,661		4,401
Finance lease liabilities	456		527
Total lease liabilities	$	6,639	$	6,839

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


Year Ended (in thousands)	Operating Leases		Finance Leases		Total
2023	$	523	$	60	$	583
2024	2,373		183		2,556
2025	1,829		147		1,976
2026	1,139		108		1,247
2027	364		41		405
Thereafter	286		—		286
Total undiscounted payments	$	6,514	$	539	$	7,053
Less: present value adjustment	(386)		(28)		(414)
Lease liabilities	$	6,128	$	511	$	6,639

Supplemental lease information is as follows:


	As of September 30, 2023		As of December 31, 2022
Weighted average remaining lease term (years)
Operating Leases	3.15		3.43
Finance Leases	3.07		3.80
Weighted average discount rate
Operating Leases	3.8	%	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.