12. Leases
The following table presents the Company’s operating lease portfolio (dollars in thousands):
| | | | | | | | | | | |
| December 31, 2025 | | December 31, 2024 |
| ROU assets | $ | 17,566 | | $ | 20,533 |
| Lease liabilities | 25,669 | | 28,474 |
| Weighted average remaining lease term (in years) | 7.13 | | 7.91 |
| Weighted average discount rate | 6.43 | % | | 6.41 | % |
The following table presents the Company’s net operating lease cost (in thousands):
| | | | | | | | | | | |
| Year ended |
| December 31, |
| 2025 | | 2024 |
| Operating lease cost | $ | 5,338 | | | $ | 6,084 | |
| Short-term lease cost | 40 | | | 171 | |
| Total operating and short-term lease cost | 5,378 | | | 6,255 | |
| Variable lease cost | 598 | | | 649 | |
| Sublease income | (3,395) | | | (2,150) | |
| Net lease cost | $ | 2,581 | | | $ | 4,754 | |
The following table presents other information related to the Company’s operating leases (in thousands):
| | | | | | | | | | | |
| Year ended |
| December 31, |
| 2025 | | 2024 |
| Cash paid for amounts included in the measurement of lease liabilities: | | | |
| Operating cash flows from operating leases | $ | 5,409 | | | $ | 5,796 | |
| Leased assets obtained in exchange for new operating lease liabilities | 905 | | | 1,322 | |
The following table presents a maturity analysis of operating leases and a reconciliation of the undiscounted cash flows to lease liabilities as of December 31, 2025 (in thousands):
| | | | | | | | |
| Year Ending December 31, | | Amount |
| 2026 | | $ | 5,462 | |
| 2027 | | 5,094 | |
| 2028 | | 3,722 | |
| 2029 | | 3,327 | |
| 2030 | | 3,360 | |
| Thereafter | | 11,503 | |
| Total undiscounted lease payments | | 32,468 | |
| Less: Amounts representing interest | | (6,799) | |
| Total lease liabilities | | $ | 25,669 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.