Note 10 - Leases
The Company leases office space, classified as operating leases, in the normal course of business at varying lengths through 2033. Leases are negotiated with third parties and, in some instances, contain renewal, expansion and termination options. As of December 31, 2025, the Company recorded ROU assets of $8.4 million and operating lease liabilities of $10.5 million within Prepaid expenses and other assets and other liabilities, respectively, on the consolidated balance sheets. All lease commencement dates are recorded as of July 1, 2025 in conjunction with the acquisition of NewPoint.
| | | | | | | | | | | |
| Year Ended December 31, 2025 | | Year Ended December 31, 2024 |
| Lease Cost: | | | |
| Operating lease cost | $ | 1,226 | | $ | — | |
| Variable lease cost | 419 | | — | |
| Net lease cost | $ | 1,645 | | $ | — | |
| Other Information | | | |
| Operating cash outflows from operating leases | 1,382 | | — | |
| | | |
| Weighted-average remaining lease term | 5.5 | | |
| Weighted-average discount rate | 6.7 | % | | |
Operating lease cost is included in Other expenses in the consolidated statement of operations. The discount rate was determined by using the Company's incremental borrowing rate.
The following table shows future minimum payments under the Company's operating leases as of December 31, 2025 (dollars in thousands):
| | | | | | | | |
| Future Minimum Payments | | December 31, 2025 |
| 2026 | | $ | 2,666 | |
| 2027 | | 2,528 | |
| 2028 | | 2,381 | |
| 2029 | | 2,004 | |
| 2030 | | 804 | |
| 2031 and beyond | | 2,246 | |
| Total Lease Payments | | 12,629 | |
| Less: imputed interest | | (2,116) | |
| Total | | $ | 10,513 | |
Rental Income
Rental income for the years ended December 31, 2025 and 2024 totaled $29.6 million and $22.8 million, respectively. Rental income is included in Revenue from real estate owned in the consolidated statements of operations.
The following table summarizes the Company's schedule of future minimum rents on its real estate owned, held for investment properties, to be received under the leases (dollars in thousands):
| | | | | | | | |
| Future Minimum Rents | | December 31, 2025 |
| 2026 | | $ | 8,936 | |
| 2027 | | 8,710 | |
| 2028 | | 8,884 | |
| 2029 | | 9,062 | |
| 2030 | | 9,243 | |
| 2031 and beyond | | 79,083 | |
| Total future minimum rent | | $ | 123,918 | |
Amortization Expense
Intangible lease assets are amortized using the straight-line method over the remaining term of the lease. The weighted average life of the intangible assets as of December 31, 2025 is approximately 12.8 years. Amortization expense for the years ended December 31, 2025 and 2024 totaled $2.9 million and $3.0 million, respectively.
The following table summarizes the Company's expected amortization of other identified intangible assets, exclusive of intangible assets that are held for sale, assuming no further acquisitions or dispositions (dollars in thousands):
| | | | | | | | |
| Amortization Expense - Other identified intangible assets | | December 31, 2025 |
| 2026 | | $ | 2,880 | |
| 2027 | | 2,880 | |
| 2028 | | 2,880 | |
| 2029 | | 2,880 | |
| 2030 | | 2,880 | |
| 2031 and beyond | | 22,560 | |