Company: CMCT
Filing Date: 2025-05-09
Form Type: 10-Q
Source: 0000908311-25-000038
Chunk: 62

Company: Creative Media & Community Trust Corp
Filing Date: 2025-05-09
Form: 10-Q
Item: Item 1
Chunk 62
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Represents the junior subordinated notes and SBA 7(a) loan-backed notes. 

8. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIESIn the ordinary course of business, the Company may use certain types of derivative instruments for the purpose of managing or hedging its interest rate risk. The following table summarizes the terms of the Company’s interest rate cap agreements as of March 31, 2025 (dollar amounts in thousands):   Outstanding Notional   Fair Value of AssetsBalance SheetAmount as ofStrikeEffectiveMaturityas ofLocationMarch 31, 2025Rates (1)DatesDatesMarch 31, 2025Interest Rate CapsOther assets$175,778 4.5% to 5.75% 5/03/2023 - 12/6/20247/07/2025 - 1/1/2027$30 ____________________________________(1)The index used for the Company’s interest rate cap agreements is 1-Month Term SOFR.Additional disclosures related to the fair value of the Company’s derivative instrument is included in Note 13. The notional amount under the derivative instrument is an indication of the extent of the Company’s involvement in the instrument, but does not represent exposure to credit, interest rate or market risks.

Accounting for changes in the fair value of a derivative instrument depends on the intended use and designation of the derivative instrument. The Company has an interest rate cap that is used to manage exposure to interest rate movements but does not meet the requirements to be designated as a hedging instrument. The change in fair value of the derivative instrument that is not designated as a hedge is recorded directly to earnings as interest expense on the accompanying consolidated statements of operations. During the three months ended March 31, 2025 and 2024, the Company recorded an unrealized loss of $78,000 and gain of $55,000, respectively, which was included in interest expense on the accompanying consolidated statements of operations related to its interest rate caps. 

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

9. STOCK-BASED COMPENSATION PLANSOn April 3, 2015, the Company’s board of directors (the “Board of Directors”) unanimously approved the Company’s Equity Incentive Plan (