14. LEASES

The Company maintains certain property and equipment under direct financing and operating leases. As of March 31, 2025, the Company's operating lease ROU asset and operating lease liability totaled $39.5 million and $42.9 million, respectively. As of December 31, 2024, the Company's operating lease ROU asset and operating lease liability totaled $40.3 million and $43.6 million, respectively. A weighted average discount rate of 4.40 percent was used in the measurement of the ROU asset and lease liability at both March 31, 2025 and December 31, 2024.

The Company's leases have remaining lease terms between one month to 12 years, with a weighted average lease term of 9.03 years at March 31, 2025. The Company's leases had remaining lease terms between four months to 12 years, with a weighted average lease term of 9.28 years at December 31, 2024. The Company’s lease agreements may include options to extend or terminate the lease. The Company’s decision to exercise renewal options is based on an assessment of its current business needs and market factors at the time of the renewal.

Total operating lease costs were $1.7 million and $929,000 for the three months ended March 31, 2025 and 2024, respectively. The variable lease costs were $119,000 and $66,000 for the three months ended March 31, 2025 and 2024, respectively.