Community Healthcare Trust Inc Fair Value Disclosure
| December 31, 2025 | December 31, 2024 | |||||||||||||||||||
| (Dollars in thousands) | Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||||||
Notes and mortgage note receivable, level 2 (1) | $ | 3,830 | $ | 3,964 | $ | 7,180 | $ | 7,248 | ||||||||||||
Notes receivable, net of credit loss (1)(2) | $ | — | $ | — | $ | 10,547 | $ | 10,547 | ||||||||||||
| Interest rate swap asset | $ | 6,691 | $ | 6,691 | $ | 17,631 | $ | 17,631 | ||||||||||||
| _______________ | ||||||||||||||||||||
(1) During 2025 and 2024, the Company recorded $8.7 million and $11.0 million, respectively, in credit loss reserves related to the notes receivable with one borrower/tenant and in 2024 moved from measuring fair value utilizing Level 2 inputs to Level 3 inputs, based on its estimated value of the underlying collateral. The table below summaries change in Level 3 classification for the years ended December 31, 2025 and 2024. | ||||||||||||||||||||
| (2) Calculated utilizing Level 3 inputs at December 31, 2025 and 2024. See the table below for Level 3 activity for the years ended December 31, 2025 and 2024. | ||||||||||||||||||||
| Level 3 Input Activity | ||||||||||||||||||||
| For the Year Ended December 31, | ||||||||||||||||||||
| Notes Receivable: | 2025 | 2024 | ||||||||||||||||||
| Beginning fair value | $ | 10,547 | $ | — | ||||||||||||||||
| Payments | (1,875) | — | ||||||||||||||||||
| Transfers from Level 2 to Level 3 | — | 21,547 | ||||||||||||||||||
| Credit loss reserve | (8,672) | (11,000) | ||||||||||||||||||
| Ending fair value | $ | — | $ | 10,547 | ||||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 17, 2026 | Showing above |
| 2024 | Feb 18, 2025 | |
| 2023 | Feb 13, 2024 | |
| 2022 | Feb 14, 2023 | |
| 2021 | Feb 15, 2022 | |
| 2020 | Feb 16, 2021 | |
| 2019 | Feb 25, 2020 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Feb 22, 2018 | |
| 2016 | Feb 23, 2017 | |
| 2015 | Feb 26, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.