InPoint Commercial Real Estate Income, Inc. Fair Value Disclosure
Note 12 – Fair Value of Financial Instruments
As discussed in Note 2, GAAP requires the disclosure of fair value information about financial instruments, whether or not they are recognized at fair value in the consolidated balance sheets, for which it is practicable to estimate that value. The following table details the carrying amount and estimated fair value of the Company’s financial instruments at the dates below:
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
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|
|
Carrying |
|
|
Estimated |
|
|
Carrying |
|
|
Estimated |
|
||||
Financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash, cash equivalents and restricted cash |
|
$ |
79,106 |
|
|
$ |
79,106 |
|
|
$ |
64,549 |
|
|
$ |
64,549 |
|
Commercial mortgage loans, net |
|
|
347,893 |
|
|
|
347,893 |
|
|
|
549,173 |
|
|
|
549,173 |
|
Total |
|
$ |
426,999 |
|
|
$ |
426,999 |
|
|
$ |
613,722 |
|
|
$ |
613,722 |
|
Financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Repurchase agreements — commercial mortgage loans |
|
$ |
223,397 |
|
|
$ |
223,397 |
|
|
$ |
360,677 |
|
|
$ |
360,677 |
|
Loan participations sold |
|
|
47,009 |
|
|
|
47,009 |
|
|
|
48,524 |
|
|
|
48,524 |
|
Mortgage loan payable, net |
|
|
23,891 |
|
|
|
24,454 |
|
|
|
— |
|
|
|
— |
|
Total |
|
$ |
294,297 |
|
|
$ |
294,860 |
|
|
$ |
409,201 |
|
|
$ |
409,201 |
|
The following describes the Company’s methods for estimating the fair value for financial instruments:
For the impaired loan as of December 31, 2024, the CECL reserve as of December 31, 2024 was recorded based on the expected proceeds from the loan. This loan was therefore measured at fair value on a nonrecurring basis using significant unobservable inputs and was classified as a Level 3 asset in the fair value hierarchy. As of December 31, 2024, the significant unobservable input used to estimate the fair value of this loan was the expected loss based on a possible repayment amount that the Company had negotiated with the borrower. In January 2026, the Company was informed that the sponsor is turning over the property to the senior lender. As a result, the Company wrote off the entire outstanding principal balance of the loan as of December 31, 2025.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 13, 2026 | Showing above |
| 2024 | Mar 14, 2025 | |
| 2023 | Mar 15, 2024 | |
| 2022 | Mar 30, 2023 | |
| 2021 | Mar 11, 2022 | |
| 2020 | Mar 19, 2021 | |
| 2019 | Mar 11, 2020 | |
| 2018 | Mar 12, 2019 | |
| 2017 | Mar 14, 2018 | |
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.