(4) Loans

The Company elected to exclude accrued interest receivable from the amortized cost basis of loans disclosed in this Note 4 and in Note 5 (Allowance for Credit Losses). As of March 31, 2026 and December 31, 2025, accrued interest receivable on loans totaled $10,682 and $10,031, respectively, and is included in the Accrued interest receivable line item on the Company's Consolidated Balance Sheet.

Lease financing receivables consist of sales-type and direct financing leases for equipment, with terms typically ranging from two to six years. On direct financing leases, the Company obtains third-party residual value guarantees to reduce its residual asset risk. The net investment in direct financing and sales-type leases was comprised of the following as of March 31, 2026 and December 31, 2025:

The Company earns revenue on direct financing and sales-type leases, as well as operating leases disclosed in Note 17. The components of total lease income were as follows for the three months ended March 31, 2026 and 2025.