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DERIVATIVE INSTRUMENTS
 12 Months Ended
Dec. 31, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE INSTRUMENTS
7. DERIVATIVE INSTRUMENTS
 
The Company primarily uses derivative instruments to economically manage the fair value variability of fixed rate assets caused by interest rate fluctuations and overall portfolio market risk. The following is a breakdown of the derivatives outstanding as of December 31, 2025 and December 31, 2024 ($ in thousands):
 
December 31, 2025
  Fair ValueRemaining
Maturity
(years)
Contract TypeNotionalAsset(1)Liability(1)
Caps    
1 Month Term SOFR$91,000 $1 $— 0.79
Futures   
10-year Treasury-Note Futures22,500 263 — 0.22
Total derivatives$113,500 $264 $—  
(1)Shown as derivative instruments in the accompanying consolidated balance sheet.


December 31, 2024
  Fair ValueRemaining
Maturity
(years)
Contract TypeNotionalAsset(1)Liability(1)
Caps    
1 Month Term SOFR$90,000 $432 $— 0.62
Options    
OptionsN/A(2)5 — 0.05
Total credit derivatives— 5 —  
Total derivatives$90,000 $437 $—  
(1)Shown as derivative instruments in the accompanying consolidated balance sheet.
(2)The Company held 275 options contracts as of December 31, 2024.
 
The following table summarizes the net realized gains (losses) and unrealized gains (losses) on derivatives, by primary underlying risk exposure, as included in net result from derivatives transactions in the consolidated statements of income for the years ended December 31, 2025, 2024, and 2023 ($ in thousands):

 Year Ended December 31, 2025
Contract TypeUnrealized
Gain/(Loss)		Realized
Gain/(Loss)		Net Result
from
Derivative
Transactions
Caps$(463)$504 $41 
Futures263 1,591 1,854 
Options— (60)(60)
Total$(200)$2,035 $1,835 
 
 Year Ended December 31, 2024
Contract TypeUnrealized
Gain/(Loss)		Realized
Gain/(Loss)		Net Result
from
Derivative
Transactions
Caps$(1,315)$1,562 $247 
Futures(545)5,813 5,268 
Options— (95)(95)
Total$(1,860)$7,280 $5,420 
 Year Ended December 31, 2023
Contract TypeUnrealized
Gain/(Loss)		Realized
Gain/(Loss)		Net Result
from
Derivative
Transactions
Caps$(895)$1,378 $483 
Futures423 834 1,257 
Options82 (341)(259)
Total$(390)$1,871 $1,481 
Futures

Collateral posted with the Company’s futures counterparties is segregated in the Company’s books and records. Interest rate futures are centrally cleared by the Chicago Mercantile Exchange (“CME”) through a futures commission merchant. Interest rate futures that are governed by an International Swaps and Derivatives Association (“ISDA”) agreement provide for bilateral collateral pledging based on the counterparties’ market value. The counterparties have the right to re-pledge the collateral posted but have the obligation to return the pledged collateral, or substantially the same collateral, if agreed to by us, as the market value of the interest rate futures change.

The Company is required to post initial margin and daily variation margin for its interest rate futures that are centrally cleared by CME. CME determines the fair value of the Company’s centrally cleared futures, including daily variation margin. Variation margin pledged on the Company’s centrally cleared interest rate futures is settled against the realized results of these futures.

As of December 31, 2025, 2024, and 2023, the Company's counterparties held $0.6 million, zero, and $2.8 million, respectively, of cash margin as collateral for derivatives, which is included in restricted cash in the consolidated balance sheets.