Company: CMCT
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0000908311-25-000096
Chunk: 163

Company: Creative Media & Community Trust Corp
Filing Date: 2025-11-14
Form: 10-Q
Item: Item 8
Chunk 163
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 30, 2025 and December 31, 2024, respectively. A loan receivable is generally classified as non-accrual (a “Non-Accrual Loan”) if (i) it is past due as to payment of principal or interest for a period of 60 days or more, (ii) any portion of the loan is classified as doubtful or is charged-off or (iii) the repayment in full of the principal and/or interest is in doubt. Generally, loans are charged-off when management determines that the Company will be unable to collect any remaining amounts due under the loan agreement, either through liquidation of collateral or other means. Interest income, included in interest and other income, on a Non-Accrual Loan is recognized on the cost recovery basis.Current Expected Credit Losses—The current expected credit losses (“CECL”) required under Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments Credit Losses, and subsequent amendments (“ASU 2016-13”) reflects the Company’s estimate of potential credit losses related to the Company’s loans receivable included in the consolidated balance sheets. While ASU 2016-13 does not require any particular method for determining CECL, it does specify the allowance should be based on relevant information about past events, including historical loss experience, current portfolio and market conditions, and reasonable and supportable forecasts for the duration of each respective loan. In addition, other than a few narrow exceptions, ASU 2016-13 requires that all financial instruments subject to the credit loss model have some 

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Table of ContentsCREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSSeptember 30, 2025 (Unaudited) – (Continued)

amount of loss reserve to reflect the GAAP principal underlying the credit loss model that all loans, debt securities, and similar assets have some inherent risk of loss, regardless of credit quality, subordinate capital, or other mitigating factors.The Company adopted ASU 2016-13 using the modified retrospective method for all financial assets measured at amortized cost. As of September 30, 2025 and December 31, 2024, the Company had a total CECL of $2.6 million and $2.0 million, respectively.The Company estimates CECL for its loans primarily using its historical experience with loan write-offs, historical charge-offs from third-party firms