Company: CMCT
Filing Date: 2025-05-09
Form Type: 10-Q
Source: 0000908311-25-000038
Chunk: 52

Company: Creative Media & Community Trust Corp
Filing Date: 2025-05-09
Form: 10-Q
Item: Item 1
Chunk 52
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 Held for Sale— Represents the government guaranteed portion of loans held for sale at the end of the period or that had been sold but in respect of which proceeds had not been received as of the end of the period. 

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Table of ContentsCREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSMarch 31, 2025 (Unaudited) – (Continued)

Current Expected Credit Losses CECL reflects the Company’s current estimate of potential credit losses related to loans receivable included in the Company’s consolidated balance sheets as of March 31, 2025 pursuant to ASU 2016-13 as implemented effective January 1, 2023. Refer to Note 2 for further discussion of CECL.The following table presents the activity in the Company’s CECL for the three months ended March 31, 2025 and March 31, 2024 (dollar amounts in thousands):Loans ReceivableCurrent expected credit losses as of December 31, 2024$2,032 Net adjustment to reserve for expected credit losses39 Current expected credit losses as of March 31, 2025$2,071 Current expected credit losses as of December 31, 2023$1,680 Net adjustment to reserve for expected credit losses(36)Current expected credit losses as of March 31, 2024$1,644 The net adjustments to the reserve for expected credit losses are recognized through net income on the Company’s consolidated statements of operations. During the three months ended March 31, 2025, the Company recorded an increase of $39,000 in its CECL related to its loans receivable, which was recorded in general and administrative expenses in the consolidated statement of operations. During the three months ended March 31, 2024, the Company recorded a decrease of $36,000 in its CECL related to its loan receivable, which is recorded in general and administrative expenses in the consolidated statement of operations. Risk RatingsAs further described in Note 2 - Basis of Presentation and Summary of Significant Accounting Policies, the Company  evaluates its loans receivable portfolio on a quarterly basis. Each quarter, the Company assesses the risk factors of each loan and assigns a risk rating based on several factors. Factors considered in the assessment include, but are not limited to, loan and credit structure, current LTV ratio, debt yield, collateral performance and the quality and condition of