Bogota Financial Corp. Leases Disclosure
NOTE 6 – LEASES
The Company determines if an arrangement is a lease at inception. Topic 842 requires lessees to recognize a right-of-use asset and a lease liability, measured at the present value of the future minimum lease payments, at the lease commencement date. The calculated amount of the right-of-use asset and lease liabilities are impacted by the length of the lease term and the discount rate used to calculate the present value of minimum lease payments. At December 31, 2025 and 2024, the right of use asset was $10.3 million and $10.8 million, respectively. The lease liability at December 31, 2025 and 2024, was $10.4 million and $10.8 million, respectively.
At December 31, 2025 and 2024, the weighted average remaining lease term for operating leases was 13.9 years and 14.9 years, respectively, and the weighted average discount rate used in the measurement of operating lease liabilities was 7.37% for both years.
The Company elected to account for the lease and non-lease components separately since such amounts are readily determinable under the Company's lease contracts. Operating lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are recognized as incurred. Variable lease payments include common area maintenance charges, real estate taxes, repairs and maintenance costs and utilities. Operating and variable lease expenses are recorded in occupancy expense in the Consolidated Statements of Income. During the years ended December 31, 2025 and 2024, operating and variable lease expenses totaled approximately $1.5 million for both years and $1.1 million was paid in cash for the lease payments. The new leases added in 2024, were as a result of the sale-leaseback transaction with an unrelated party that was completed in December 2024 which is discussed in Note 5.
There were no sale and leaseback transactions, leveraged leases or lease transactions with related parties during the years ended December 31, 2025. At December 31, 2025, the Company had no leases which had not yet commenced. The following table summarizes lease payment obligations for each of the next five years and thereafter as follows:
| 2026 | $ | 1,111,379 | ||
| 2027 | 1,133,798 | |||
| 2028 | 1,134,533 | |||
| 2029 | 1,119,830 | |||
| 2030 | 1,192,727 | |||
| Thereafter | 11,364,838 | |||
| $ | 17,057,105 | |||
| Impact of present discount value | (6,622,346 | ) | ||
| Present value of net future minimum lease payments | $ | 10,434,759 |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 27, 2026 | Showing above |
| 2024 | Mar 28, 2025 | |
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.