Leases
The Company has entered into operating leases for office space in North Carolina, Virginia, Arizona, and Georgia. The present value of future lease payments for the Company’s leases with terms greater than 12 months are included on the consolidated balance sheets as lease liabilities and right-of-use lease assets. For leases with terms of 12 months or less, lease payments are recognized in other operating expenses on a straight-line basis over the lease term.
Total expected lease payments are based on the lease payments specified in the contract and the stated term, including any options to extend or terminate that the Company is reasonably certain to exercise. The Company elected the practical expedient to account for lease components and any associated non-lease components as a single lease component, and therefore allocates all of the expected lease payments to the lease component.
The lease liability, which represents the Company’s obligation to make lease payments arising from the lease, is calculated based on the present value of expected lease payments over the remaining lease term, discounted using the Company’s collateralized incremental borrowing rate at the commencement date. The lease liability is then adjusted for any prepaid rent, lease incentives received or capitalized initial direct costs to determine the lease asset, which represents the Company's right to use the underlying asset for the lease term. Lease liabilities and right-of-use assets are included in other liabilities and other assets, respectively, on the Company's consolidated balance sheets.
At December 31, 2024, lease liabilities and right-of-use assets associated with the Company's operating leases were $5.6 million and $5.3 million, respectively ($8.0 million and $7.8 million at December 31, 2023, respectively). The weighted-average discount rate and weighted average remaining lease term for operating leases was 4.8% and 2.6 years, respectively, as of December 31, 2024.
The table below summarizes maturities of the Company’s operating lease liabilities as of December 31, 2024, which reconciles to total lease liabilities included in other liabilities on the Company’s consolidated balance sheets:
| | | | | |
| Years ending December 31, | (in thousands) |
| 2025 | $ | 3,150 | |
| 2026 | 1,196 | |
| 2027 | 914 | |
| 2028 | 538 | |
| 2029 | 158 | |
| Thereafter | — | |
| Total lease payments | 5,956 | |
| Less imputed interest | (357) | |
| Total operating lease liabilities | $ | 5,599 | |
Operating lease liabilities include $2.3 million associated with office space in a building that is owned by a partnership in which the Company has a minority interest.
Operating lease costs were $4.1 million, $4.6 million, and $4.6 million for the years ended December 31, 2024, 2023, and 2022, respectively. Operating lease costs are primarily comprised of rental expense for operating leases. Rental expense is recognized on a straight line basis over the lease term and includes amortization of the right-of-use lease asset and imputed interest on the lease liability. Operating lease costs are included in other operating expenses in the Company's consolidated statements of (loss) income and comprehensive loss.