LeasesThe Company and its subsidiaries have a right to use two distinct office spaces in New York and Chicago under separate lease agreements. On December 1, 2024, the company exercised its option to extend the Chicago lease, which will expire on August 31, 2028, with a renewal option to extend. The leases are classified as operating leases. The Company was not party to any finance lease arrangements as of and during the years ended December 31, 2025 and 2024. The ROU asset and lease liability balances as of December 31, 2025 were $2.8 million and $3.0 million, respectively, and the ROU asset and lease liability balances as of December 31, 2024 were $4.0 million and $4.3 million, respectively.
The terms of the operating leases range from three to four years, from the dates the Company gained access to the spaces, through to the stated termination dates, which expire in December 2027 and August 2028, respectively. Although each operating lease agreement contains an option to extend the length of the respective lease term, the Company is not reasonably certain it will exercise these options. Due to this uncertainty, in the measurement of the lease liability, the Company has excluded the periods covered by each renewal option from the lease terms.
The Chicago operating lease agreement contains rent escalation features that are reflected in the Company’s lease liability balances. Since the discount rates implicit in the leases are not readily available, the Company used an incremental borrowing rate to discount the remaining lease payments in measuring our lease liability. The Company also did not incur any initial direct costs or make prepayments in connection with these lease arrangements; as such, these amounts are not reflected in the ROU asset.
Lease expense for the years ended December 31, 2025, 2024 and 2023 was $1.4 million, $1.2 million and $0.6 million, respectively. Lease expense is recognized on a straight-line basis over the lease term in operating expenses within the Consolidated Statements of Income and Comprehensive Income. The Company has immaterial variable lease costs and no short-term leases for the year ended December 31, 2025. The following table summarizes the Company’s future minimum lease payment obligations under non-cancelable operating leases as of December 31, 2025:
| | | | | | | | |
| As of December 31, | | 2025 |
| | ($ in thousands) |
| Contractual maturities: | | |
| 2026 | | $ | 1,415 | |
| 2027 | | 1,568 | |
| 2028 | | 162 | |
| | |
| Later years | | — | |
Total undiscounted future minimum lease payments | | 3,145 | |
| Less: Discount impact | | (161) | |
Total discounted operating lease liability | | $ | 2,984 | |
The weighted average remaining lease term and weighted average discount rate for the Company’s operating leases as of December 31, 2025 were 2.1 years and 5.0%, respectively.
Cash paid for operating leases for the years ended December 31, 2025, 2024 and 2023 was $1.6 million, $1.3 million and $0.6 million, respectively. There were no non-cash additions from new and remeasured leases that resulted in an increase to the ROU asset and lease liability.