Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Jul. 23, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | Shepherd's Finance, LLC | |
Entity Central Index Key | 1,544,190 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 0 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,018 |
Interim Condensed Consolidated
Interim Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Assets | ||
Cash and cash equivalents | $ 247 | $ 3,478 |
Accrued interest receivable | 653 | 720 |
Loans receivable, net | 41,819 | 30,043 |
Foreclosed assets | 5,636 | 1,036 |
Property, plant and equipment, net | 1,045 | 1,020 |
Other assets | 176 | 58 |
Total assets | 49,576 | 36,355 |
Liabilities | ||
Customer interest escrow | 544 | 935 |
Accounts payable and accrued expenses | 482 | 705 |
Accrued interest payable | 1,654 | 1,353 |
Notes payable secured, net of deferred financing costs | 21,058 | 11,644 |
Notes payable unsecured, net of deferred financing costs | 20,769 | 16,904 |
Due to preferred equity member | 31 | 31 |
Total liabilities | 44,538 | 31,572 |
Commitments and Contingencies (Notes 3 and 9) | ||
Series C preferred equity | 1,165 | 1,097 |
Members' Capital | ||
Series B preferred equity | 1,280 | 1,240 |
Class A common equity | 2,593 | 2,446 |
Members' capital | 3,873 | 3,686 |
Total liabilities, redeemable preferred equity and members' capital | $ 49,576 | $ 36,355 |
Interim Condensed Consolidated3
Interim Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Interest Income | ||||
Interest and fee income on loans | $ 2,045,000 | $ 1,356,000 | $ 3,872,000 | $ 2,530,000 |
Interest expense: | ||||
Interest related to secured borrowings | 517,000 | 215,000 | 928,000 | 394,000 |
Interest related to unsecured borrowings | 513,000 | 401,000 | 963,000 | 768,000 |
Interest expense | 1,030,000 | 616,000 | 1,891,000 | 1,162,000 |
Net interest income | 1,015,000 | 740,000 | 1,981,000 | 1,368,000 |
Less: Loan loss provision | 19,000 | 15,000 | 59,000 | 26,000 |
Net interest income after loan loss provision | 996,000 | 725,000 | 1,922,000 | 1,342,000 |
Non-Interest Income | ||||
Gain from sale of foreclosed assets | 77,000 | |||
Total non-interest income | 77,000 | |||
Income | 996,000 | 725,000 | 1,922,000 | 1,419,000 |
Non-Interest Expense | ||||
Selling, general and administrative | 691 | 450 | 1,308,000 | 898,000 |
Depreciation and amortization | 21 | 6 | 38,000 | 12,000 |
Impairment loss on foreclosed assets | 80 | 106 | 85,000 | 155,000 |
Total non-interest expense | 792,000 | 562,000 | 1,431,000 | 1,065,000 |
Net Income | 204 | 163 | 491,000 | 354,000 |
Earned distribution to preferred equity holders | 67,000 | 57,000 | 130,000 | 88,000 |
Net income attributable to common equity holders | $ 137,000 | $ 106,000 | $ 361,000 | $ 266,000 |
Interim Condensed Consolidated4
Interim Condensed Consolidated Statements of Changes in Members' Capital (Unaudited) | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Member's capital, beginning balance | $ 3,686,000 |
Net income | 491,000 |
Contributions from members (preferred) | 40,000 |
Earned distributions to preferred equity holders | (130,000) |
Distributions to common equity holders | (214,000) |
Members' capital, ending balance | $ 3,873,000 |
Interim Condensed Consolidated5
Interim Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash flows from operations | ||
Net income | $ 491,000 | $ 354,000 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities | ||
Amortization of deferred financing costs | 95,000 | 121,000 |
Provision for loan losses | 59,000 | 26,000 |
Net loan origination fees deferred (earned) | 351,000 | 254,000 |
Change in deferred origination expense | (87,000) | (71,000) |
Impairment of foreclosed assets | 85,000 | 155,000 |
Depreciation and amortization | 38,000 | 12,000 |
Gain from sale of foreclosed assets | (77,000) | |
Net change in operating assets and liabilities | ||
Other assets | (118,000) | 10,000 |
Accrued interest receivable | (176,000) | (74,000) |
Customer interest escrow | (391,000) | 17,000 |
Accounts payable and accrued expenses | 78,000 | 39,000 |
Net cash provided by (used in) operating activities | 425,000 | 742,000 |
Cash flows from investing activities | ||
Loan originations and principal collections, net | (15,996,000) | (9,090,000) |
Investment in foreclosed assets | (545,000) | (265,000) |
Proceeds from sale of foreclosed assets | 1,890,000 | |
Property plant and equipment additions | (63,000) | (583,000) |
Net cash provided by (used in) investing activities | (16,564,000) | (8,048,000) |
Cash flows from financing activities | ||
Contributions from redeemable preferred equity | 1,004,000 | |
Contributions from members (preferred) | 40,000 | 10,000 |
Distributions to preferred equity holders | (62,000) | (58,000) |
Distributions to common equity holders | (214,000) | (117,000) |
Proceeds from secured note payable | 13,538,000 | 5,775,000 |
Repayments of secured note payable | (4,118,000) | (4,277,000) |
Proceeds from unsecured notes payable | 8,784,000 | 9,218,000 |
Redemptions/repayments of unsecured notes payable | (4,953,000) | (5,687,000) |
Deferred financing costs paid | (67,000) | (40,000) |
Net cash provided by (used in) financing activities | 12,948,000 | 5,828,000 |
Net increase (decrease) in cash and cash equivalents | (3,231,000) | (1,478,000) |
Cash and cash equivalents | ||
Beginning of period | 3,478,000 | 1,566,000 |
End of period | 247,000 | 88,000 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 1,533,000 | 1,062,000 |
Non-cash investing and financing activities | ||
Earned but not paid distribution of preferred equity holders | 68,000 | 29,000 |
Foreclosure of assets | 3,897,000 | |
Accrued interest reduction due to foreclosure | $ 243,000 |
Description of Business and Bas
Description of Business and Basis of Presentation | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Basis of Presentation | 1. Description of Business and Basis of Presentation Description of Business Shepherd’s Finance, LLC and subsidiary (the “Company”) was originally formed as a Pennsylvania limited liability company on May 10, 2007. The Company is a sole member of a consolidating subsidiary, 84 REPA, LLC. The Company operates pursuant to its Second Amended and Restated Operating Agreement by and among Daniel M. Wallach and the other members of the Company effective as of March 16, 2017. As of June 30, 2018, the Company extends commercial loans to residential homebuilders (in 17 states) to: ● construct single family homes, ● develop undeveloped land into residential building lots, and ● purchase and improve for sale older homes. Basis of Presentation The accompanying (a) interim condensed consolidated balance sheet as of December 31, 2017, which has been derived from audited consolidated financial statements, and (b) unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. While certain information and disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), management believes that the disclosures herein are adequate to make the unaudited interim condensed consolidated information presented not misleading. In the opinion of management, the unaudited interim condensed consolidated financial statements reflect all adjustments necessary for a fair presentation of the consolidated financial position, results of operations, and cash flows for the periods presented. Such adjustments are of a normal, recurring nature. The consolidated results of operations for any interim period are not necessarily indicative of results expected for the fiscal year ending December 31, 2018. These unaudited interim condensed consolidated financial statements should be read in conjunction with the 2017 consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2017 (the “2017 Statements”). The accounting policies followed by the Company are set forth in Note 2 – Summary of Significant Accounting Policies Accounting Standards Adopted in the Period Accounting Standards Update (“ASU”) 2016-01, “ Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (An Amendment of FASB ASC 825). ASU 2016-01 became effective for the Company on January 1, 2018. The adoption of ASU 2016-01 did not have a material impact on the Company’s consolidated financial statements. ASU 2014-09, “ Revenue from Contracts with Customers (Topic 606). Revenue from Contracts with Customers, Revenue Recognition Revenue Recognition – Construction-Type and Production-Type Contracts. Revenue On January 1, 2018, the Company implemented ASU 2014-09, codified at ASC Topic 606. The Company adopted ASC Topic 606 using the modified retrospective transition method. As of December 31, 2017, the Company had no uncompleted customer contracts and, as a result, no cumulative transition adjustment was made during the first quarter of 2018. Results for reporting periods beginning January 1, 2018 are presented under ASC Topic 606, while prior period amounts continue to be reported under legacy U.S. GAAP. The majority of the Company’s revenue is generated through interest earned on financial instruments, including loans, which falls outside the scope of ASC Topic 606. All of the Company’s revenue that is subject to ASC Topic 606 would be included in non-interest income; however, not all non-interest income is subject to ASC Topic 606. The Company had no contract liabilities or unsatisfied performance obligations with customers as of June 30, 2018. Reclassifications Certain prior year amounts have been reclassified for consistency with current period presentation. |
Fair Value
Fair Value | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value | 2. Fair Value The Company had no financial instruments measured at fair value on a recurring basis as of June 30, 2018 and December 31, 2017. The following tables present the balances of non-financial instruments measured at fair value on a non-recurring basis as of June 30, 2018 and December 31, 2017. June 30, 2018 Carrying Estimated Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Amount Fair Value Level 1 Level 2 Level 3 Foreclosed assets $ 5,636 $ 5,636 $ – $ – $ 5,636 December 31, 2017 Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Carrying Estimated Assets Inputs Inputs Amount Fair Value Level 1 Level 2 Level 3 Foreclosed assets $ 1,036 $ 1,036 $ – $ – $ 1,036 The Company had no impaired loans as of June 30, 2018 and December 31, 2017. The table below is a summary of fair value estimates for financial instruments and the level of the fair value hierarchy within which the fair value measurements are categorized at the periods indicated: June 30, 2018 Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Carrying Estimated Assets Inputs Inputs Amount Fair Value Level 1 Level 2 Level 3 Financial Assets: Cash and cash equivalents $ 247 $ 247 $ 247 $ – $ – Loans receivable, net 41,819 41,819 – – 41,819 Accrued interest receivable 653 653 – – 653 Financial Liabilities: Customer interest escrow 544 544 – – 544 Notes payable secured 21,058 21,058 – – 21,058 Notes payable unsecured, net 20,769 20,769 – – 20,769 Accrued interest payable 1,654 1,654 – – 1,654 December 31, 2017 Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Carrying Estimated Assets Inputs Inputs Amount Fair Value Level 1 Level 2 Level 3 Financial Assets: Cash and cash equivalents $ 3,478 $ 3,478 $ 3,478 $ – $ – Loans receivable, net 30,043 30,043 – – 30,043 Accrued interest receivable 720 720 – – 720 Financial Liabilities: Customer interest escrow 935 935 – – 935 Notes payable secured 11,644 11,644 – – 11,644 Notes payable unsecured, net 16,904 16,904 – – 16,904 Accrued interest payable 1,353 1,353 – – 1,353 |
Financing Receivables
Financing Receivables | 6 Months Ended |
Jun. 30, 2018 | |
Receivables [Abstract] | |
Financing Receivables | 3. Financing Receivables Financing receivables are comprised of the following as of June 30, 2018 and December 31, 2017: June 30, 2018 December 31, 2017 Loans receivable, gross $ 44,803 $ 32,375 Less: Deferred loan fees (1,197 ) (847 ) Less: Deposits (1,827 ) (1,497 ) Plus: Deferred origination expense 196 109 Less: Allowance for loan losses (156 ) (97 ) Loans receivable, net $ 41,819 $ 30,043 Commercial Construction and Development Loans Commercial Loans – Construction Loan Portfolio Summary As of June 30, 2018, the Company has 68 borrowers, all of whom, including four development loan customers (the “Hoskins Group,” consisting of Benjamin Marcus Homes, LLC, Investor’s Mark Acquisitions, LLC, and Mark Hoskins, being the largest of the four), borrow money for the purpose of building new homes. The following is a summary of the loan portfolio to builders for home construction loans as of June 30, 2018 and December 31, 2017: Year Number of States Number of Borrowers Number of Loans Value of Collateral (1) Commitment Amount Gross Amount Outstanding Loan to Value Ratio (2) Loan Fee 2018 17 68 245 $ 93,976 $ 60,551 $ 38,888 64 % (3) 5 % 2017 16 52 168 75,931 47,087 29,564 62 % (3) 5 % (1) The value is determined by the appraised value. (2) The loan to value ratio is calculated by taking the commitment amount and dividing by the appraised value. (3) Represents the weighted average loan to value ratio of the loans. Commercial Loans – Real Estate Development Loan Portfolio Summary The following is a summary of our loan portfolio to builders for land development as of June 30, 2018 and December 31, 2017: Year Number of States Number of Borrowers Number of Loans (4) Gross Value of Collateral (1) Commitment Amount (3) Gross Amount Outstanding Loan to Value Ratio (2) Loan Fee 2018 3 4 7 $ 8,249 $ 6,367 $ 5,915 72 % $ 1,000 2017 1 1 3 4,997 4,600 2,811 56 % 1,000 (1) The value is determined by the appraised value adjusted for remaining costs to be paid. A portion of this collateral is $1,280 and $1,240 as of June 30, 2018 and December 31, 2017, respectively of preferred equity in our Company. In the event of a foreclosure on the property securing these loans, the portion of our collateral that is preferred equity might be difficult to sell, which may impact our ability to recover the loan balance. In addition, a portion of the collateral value is estimated based on the selling prices anticipated for the homes. (2) The loan to value ratio is calculated by taking the outstanding amount and dividing by the appraised value calculated as described above. (3) The commitment amount does not include letters of credit and cash bonds. (4) As of December 31, 2017, our development loans consisted of borrowings which originated in December 2011 and to which we refer throughout this report as the “Pennsylvania Loans”. During the first six months of 2018, the Company originated one additional development loan to the Pennsylvania Loans. Credit Quality Information The following tables present credit-related information at the “class” level in accordance with FASB ASC 310-10-50, “ Disclosures about the Credit Quality of Finance Receivables and the Allowance for Credit Losses Gross finance receivables – By risk rating: June 30, 2018 December 31, 2017 Pass $ 39,327 $ 25,656 Special mention 5,476 6,719 Total $ 44,803 $ 32,375 Gross finance receivables – Method of impairment calculation: June 30, 2018 December 31, 2017 Performing loans evaluated individually $ 18,409 $ 14,992 Performing loans evaluated collectively 26,394 17,383 Total $ 44,803 $ 32,375 As of June 30, 2018 and December 31, 2017, there were no loans acquired with deteriorated credit quality. Concentrations Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of loans receivable. Our concentration risks for individual borrowers are summarized in the table below: June 30, 2018 December 31, 2017 Percent of Percent of Borrower Loan Borrower Loan City Commitments City Commitments Highest concentration risk Pittsburgh, PA 23 % Pittsburgh, PA 22 % Second highest concentration risk Cape Coral, FL 4 % Sarasota, FL 7 % Third highest concentration risk Orlando, FL 4 % Savannah, GA 5 % |
Foreclosed Assets
Foreclosed Assets | 6 Months Ended |
Jun. 30, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Foreclosed Assets | 4. Foreclosed Assets The following table is a roll forward of foreclosed assets: Six Months Ended Year Ended Six Months Ended Beginning balance $ 1,036 $ 2,798 $ 2,798 Additions from loans 4,140 - - Additions for construction/development 545 317 265 Sale proceeds - (1,890 ) (1,890 ) Gain on sale - 77 77 Impairment loss on foreclosed assets (85 ) (266 ) (155 ) Ending balance $ 5,636 $ 1,036 $ 1,095 During April 2018, we entered into a Deed in Lieu of Foreclosure Agreement with a certain borrower who defaulted on a loan by failing to make an interest payment that was due. The Company reclassified $4,140, consisting of $3,897 of principal from Loan receivable, net and $243 of interest from Accrued interest receivable, to Foreclosed assets on the balance sheet as of June 30, 2018. |
Borrowings
Borrowings | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Borrowings | 5. Borrowings The following table displays our borrowings and a ranking of priority: Priority Rank June 30, 2018 December 31, 2017 Borrowing Source Purchase and sale agreements 1 $ 19,186 $ 11,644 Secured line of credit from affiliates 2 1,877 - Unsecured line of credit (senior) 3 500 - Other unsecured borrowings (senior subordinated) 4 1,008 279 Unsecured Notes through our public offering, gross 5 15,274 14,121 Other unsecured borrowings (subordinated) 5 3,649 2,617 Other unsecured borrowings (junior subordinated) 6 590 173 Total $ 42,084 $ 28,834 The following table shows the maturity of outstanding borrowings as of June 30, 2018: Year Maturing Total Amount Maturing Public Offering Other Unsecured Purchase and Sale Agreements and Other Secured Borrowings 2018 $ 25,728 $ 2,306 $ 3,007 $ 20,415 2019 7,556 6,499 1,043 14 2020 2,270 2,155 100 15 2021 3,788 3,773 - 15 2022 and thereafter 2,742 541 1,597 604 Total $ 42,084 $ 15,274 $ 5,747 $ 21,063 Secured Borrowings Purchase and Sale Agreements In March 2018, we entered into the Seventh Amendment (the “Seventh Amendment”) to our Loan Purchase and Sale Agreement (the “S.K. Funding LPSA”) with S.K. Funding, LLC (“S.K. Funding”). The purpose of the Seventh Amendment was to allow S.K. Funding to purchase a portion of the Pennsylvania Loans for a purchase price of $649. The timing of the Company’s principal and interest payments to S.K. Funding under the Seventh Amendment, and S.K. Funding’s obligation to fund the Pennsylvania Loans, vary depending on the total principal amount of the Pennsylvania Loans outstanding at any time, as follows: ● If the total principal amount exceeds $1,000, S.K. Funding must fund the amount between $1,000 and less than or equal to $3,500. ● If the total principal amount is less than $4,500 then the Company will also repay S.K. Funding’s principal as principal payments are received on the Pennsylvania Loans from the underlying borrowers in the amount by which the total principal amount is less than $4,500 until S.K. Funding’s principal has been repaid in full. ● The interest rate accruing to S.K. Funding under the Seventh Amendment is 10.5% calculated on a 365/366-day basis. The Seventh Amendment has a term of 24 months and will automatically renew for an additional six-month term unless either party gives written notice of its intent not to renew at least six months prior to the end of a term. S.K. Funding will have a priority position as compared to the Company in the case of a default by any of the borrowers. Lines of Credit Amendments to the Lines of Credit with Mr. Wallach and His Affiliates During June 2018, we entered into a First Amendment to the line of credit with our Chief Executive Officer and his wife (the “Wallach LOC”) which modified the interest rate to generally equal the prime rate plus 3%. The interest rate for the Wallach LOC was 6.8% and 4.4% as of June 30, 2018 and 2017, respectively. We borrowed $877 and $0 against the Wallach LOC as of June 30, 2018 and 2017, respectively. Interest was $6 and $10 for the quarter and six months ended June 30, 2018, respectively. As of June 30, 2018, there was $373 remaining availability on the Wallach LOC. During June 2018, we entered into a First Amendment to the line of credit with the 2007 Daniel M. Wallach Legacy Trust, which our Chief Executive Officer’s trust (the “Wallach Trust LOC”) which modified the interest rate to generally equal the prime rate plus 3%. The interest rate for this borrowing was 6.8% and 4.4% as of June 30, 2018 and 2017, respectively. As of June 30, 2018, we borrowed $0 against the Wallach Trust LOC. As of June 30, 2018, there the was $250 remaining availability on the Wallach Trust LOC. Line of Credit (Shuman) During July 2017, we entered into a line of credit agreement (the “Shuman LOC Agreement”) with a group of lenders (collectively, “Shuman”). Pursuant to the Shuman LOC Agreement, Shuman provides us with a revolving line of credit (the “Shuman LOC”) with the following terms: ● Principal not to exceed $1,325; ● Secured with assignments of certain notes and mortgages; ● Cost of funds to us of 10%; and ● Due in July 2019 unless extended by Shuman for one or more additional 12-month periods. The Shuman LOC was fully borrowed as of June 30, 2018. Interest expense was $33 and $67 for the quarter and six months ended June 30, 2018, respectively. Modification to the Line of Credit with Paul Swanson During April 2018, we entered into a Master Loan Modification Agreement (the “Swanson Modification Agreement”) with Paul Swanson which modified the Line of Credit Agreement between us and Mr. Swanson dated October 23, 2017. Pursuant to the Swanson Modification Agreement, Mr. Swanson provides us with a revolving line of credit (the “Swanson LOC”) with the following terms: ● Principal not to exceed $7,000; ● Secured with assignments of certain notes and mortgages; ● Cost of funds to us of 10%; and ● Due in January 2019 unless extended by Mr. Swanson for one or more additional 15-month periods. The Swanson LOC was fully borrowed as of June 30, 2018. Interest expense was $165 and $265 for the quarter and six months ended June 30, 2018, respectively. New Line of Credit with William Myrick During June 2018, we entered into a line of credit agreement (the “Myrick LOC Agreement”) with our Executive Vice President of Sales, William Myrick. Pursuant to the Myrick LOC Agreement, Mr. Myrick provides us with a line of credit (the “Myrick LOC”) with the following terms: ● Principal not to exceed $1,000; ● Secured by a lien against all of our assets; ● Cost of funds to us generally equal to the prime rate plus 3%; and ● Due upon demand. The Myrick LOC was fully borrowed as of June 30, 2018. Interest expense was $3 for both the quarter and six months ended June 30, 2018. Mortgage Payable During the first six months of 2018, we entered into a commercial mortgage on our office building with the following terms: ● Principal not to exceed $660; ● Interest rate at 5.07% per annum based on a year of 360 days; and ● Due in January 2033. The principal amount of the Company’s commercial mortgage was $654 as of June 30, 2018. Interest expense was $7 and $18 for the quarter and six months ended June 30, 2018. Summary The purchase and sale agreements and lines of credit are summarized below: June 30, 2018 December 31, 2017 Due From Due From Book Value of Shepherd’s Book Value of Shepherd’s Loans which Finance to Loan Loans which Finance to Loan Served as Collateral Purchaser or Lender Served as Collateral Purchaser or Lender Loan Purchaser Builder Finance, Inc. $ 8,538 $ 4,843 $ 7,483 $ 4,089 S.K. Funding 10,108 6,625 9,128 4,134 Lender Shuman 2,160 1,325 1,747 1,325 Paul Swanson 8,214 5,738 2,518 2,096 Total $ 29,020 $ 18,531 $ 20,876 $ 11,644 Unsecured Borrowings Other Unsecured Debts Our other unsecured debts are detailed below: Maturity Interest Principal Amount Outstanding as of Loan Date Rate (1) June 30, 2018 December 31, 2017 Unsecured Note with Seven Kings Holdings, Inc. August 2018 7.5 % 500 500 Unsecured Line of Credit from Builder Finance, Inc. January 2019 10.0 % 500 - Unsecured Line of Credit from Paul Swanson December 2018 (2) 10.0 % 1,262 1,904 Subordinated Promissory Note Demand (3) 7.5 % 1,125 - Subordinated Promissory Note December 2019 10.5 % 263 113 Subordinated Promissory Note April 2020 10.0 % 100 100 Senior Subordinated Promissory Note March 2022 (4) 10.0 % 400 - Senior Subordinated Promissory Note March 2022 (5) 1.0 % 728 - Junior Subordinated Promissory Note March 2022 (5) 22.5 % 417 - Senior Subordinated Promissory Note October 2022 (6) 1.0 % 279 279 Junior Subordinated Promissory Note October 2022 (6) 20.0 % 173 173 $ 5,747 $ 3,069 (1) (2) (3) (4) (5) (6) Unsecured Notes through the Public Offering (“Notes Program”) The effective interest rate on the Notes (“Notes”) offered pursuant to the Notes Program at June 30, 2018 and December 31, 2017 was 9.39% and 9.21%, respectively, not including the amortization of deferred financing costs. There are limited rights of early redemption. The following table shows the roll forward of the Notes Program: Six Months Ended June 30, 2018 Year Ended December 31, 2017 Six Months Ended June 30, 2017 Gross Notes outstanding, beginning of period $ 14,121 $ 11,221 $ 11,221 Notes issued 3,350 8,375 8,105 Note repayments / redemptions (2,197 ) (5,475 ) (5,087 ) Gross Notes outstanding, end of period $ 15,274 $ 14,121 $ 14,239 Less deferred financing costs, net 252 286 330 Notes outstanding, net $ 15,022 $ 13,835 $ 13,909 The following is a roll forward of deferred financing costs: Six Months Year Six Months Ended Ended Ended June 30, 2018 December 31, 2017 June 30, 2017 Deferred financing costs, beginning balance $ 1,102 $ 1,014 $ 1,014 Additions 61 88 40 Deferred financing costs, ending balance $ 1,163 $ 1,102 $ 1,054 Less accumulated amortization (911 ) (816 ) (724 ) Deferred financing costs, net $ 252 $ 286 $ 330 The following is a roll forward of the accumulated amortization of deferred financing costs: Six Months Year Six Months Ended Ended Ended June 30, 2018 December 31, 2017 June 30, 2017 Accumulated amortization, beginning balance $ 816 $ 603 $ 603 Additions 95 213 121 Accumulated amortization, ending balance $ 911 $ 816 $ 724 |
Redeemable Preferred Equity
Redeemable Preferred Equity | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Redeemable Preferred Equity | 6. Redeemable Preferred Equity The following is a roll forward of Series C cumulative preferred equity (“Series C Preferred Units”): Six Months Ended June 30, 2018 Year Ended December 31, 2017 Six Months Ended June 30, 2017 Beginning balance $ 1,097 $ – $ – Additions from new investment – 1,004 1,004 Additions from reinvestment 68 93 29 Ending balance $ 1,165 $ 1,097 $ 1,033 The following table shows the earliest redemption options for investors in our Series C Preferred Units as of June 30, 2018: Year of Available Redemption Total Amount Redeemable 2023 $ 1,165 Total $ 1,165 |
Members' Capital
Members' Capital | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Members' Capital | 7. Members’ Capital There are currently two classes of equity units outstanding that the Company classifies as Members’ Capital: Class A common units (“Class A Common Units”) and Series B cumulative preferred units (“Series B Preferred Units”). As of June 30, 2018, the Class A Common Units are held by nine members, all of whom have no personal liability. All Class A common members have voting rights in proportion to their capital account. There were 2,629 Class A Common Units outstanding at both June 30, 2018 and December 31, 2017. In January 2018, our Chief Financial Officer and Executive Vice President of Operations purchased 2% and 1% of our outstanding Class A Common Units, respectively, from our CEO. In March 2018, our Executive Vice President of Sales purchased 14.3% of our outstanding Class A Common Units from our CEO. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 8. Related Party Transactions As of June 30, 2018, each of the Company’s two independent managers own 1% of our Class A Common Units. As of June 30, 2018, our CFO, Executive Vice President of Operations, and Executive Vice President of Sales each own 2%, 2%, and 15.3% of our Class A Common Units, respectively. As of June 30, 2018, the Company borrowed $877 against the Wallach LOC, which is a line of credit with our CEO and his wife. A more detailed description is included in Note 5 above. This borrowing is included in notes payable secured, net of deferred financing costs on the interim condensed consolidated balance sheet. As of June 30, 2018, the Company borrowed $1,000 against the Myrick LOC, which is a line of credit with our Executive Vice President of Sales. A more detailed description is included in Note 5 above. This borrowing is included in notes payable secured, net of deferred financing costs on the interim condensed consolidated balance sheet. In February 2018, the Company issued a Subordinated Promissory Note in the principal amount of $1,125 to a trust affiliated with Seven Kings Holdings, Inc. One of our independent managers, Kenneth R. Summers, is the trustee of that trust. This borrowing is included in notes payable unsecured, net of deferred financing costs on the interim condensed consolidated balance sheet. In March 2018, the Company issued a Senior Subordinated Promissory Note in the principal amount of $400 to family members of our CEO. This borrowing is included in the notes payable unsecured, net of deferred financing costs on the interim condensed consolidated balance sheet. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. Commitments and Contingencies Unfunded commitments to extend credit, which have similar collateral, credit risk, and market risk to our outstanding loans, were $21,676 and $19,312 at June 30, 2018 and December 31, 2017, respectively. |
Selected Quarterly Condensed Co
Selected Quarterly Condensed Consolidated Financial Data (Unaudited) | 6 Months Ended |
Jun. 30, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Condensed Consolidated Financial Data (Unaudited) | 10. Selected Quarterly Condensed Consolidated Financial Data (Unaudited) Summarized unaudited quarterly condensed consolidated financial data for the two quarters of 2018 and four quarters of 2017 are as follows: Quarter 2 Quarter 1 Quarter 4 Quarter 3 Quarter 2 Quarter 1 2018 2018 2017 2017 2017 2017 Net Interest Income after Loan Loss Provision $ 996 $ 926 $ 802 $ 917 $ 725 $ 617 Non-Interest Income – – – – – 77 SG&A expense 691 617 643 537 456 454 Depreciation and Amortization 21 17 – – – 6 Impairment loss on foreclosed assets 80 5 64 47 106 49 Net Income $ 204 $ 287 $ 95 $ 333 $ 163 $ 191 |
Non-Interest Expense Detail
Non-Interest Expense Detail | 6 Months Ended |
Jun. 30, 2018 | |
Non-interest Expense Detail | |
Non-Interest Expense Detail | 11. Non-Interest expense detail The following table displays our selling, general and administrative (“SG&A”) expenses: For the Six Months Ended June 30, 2018 2017 Selling, general and administrative expenses Legal and accounting $ 223 $ 125 Salaries and related expenses 833 583 Board related expenses 37 55 Advertising 35 25 Rent and utilities 20 14 Loan and foreclosed asset expenses 38 26 Travel 51 32 Other 71 38 Total SG&A $ 1,308 $ 898 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 12. Subsequent Events Management of the Company has evaluated subsequent events through August 8, 2018, the date these consolidated financial statements were issued. On July 31, 2018, we redeemed all of our outstanding Series C Cumulative Preferred Units (the “Preferred Units”), which were held by two investors. On August 1, 2018, we sold 12 of our Preferred Units to Daniel M. Wallach, our Chief Executive Officer and Chairman of our board of managers, and his wife, Joyce S. Wallach, for the total price of $1,200. |
Fair Value (Tables)
Fair Value (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Non-financial Instruments Measured at Fair Value On Non-recurring Basis | The following tables present the balances of non-financial instruments measured at fair value on a non-recurring basis as of June 30, 2018 and December 31, 2017. June 30, 2018 Carrying Estimated Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Amount Fair Value Level 1 Level 2 Level 3 Foreclosed assets $ 5,636 $ 5,636 $ – $ – $ 5,636 December 31, 2017 Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Carrying Estimated Assets Inputs Inputs Amount Fair Value Level 1 Level 2 Level 3 Foreclosed assets $ 1,036 $ 1,036 $ – $ – $ 1,036 |
Schedule of Fair Value Measurements, Recurring and Nonrecurring | The table below is a summary of fair value estimates for financial instruments and the level of the fair value hierarchy within which the fair value measurements are categorized at the periods indicated: June 30, 2018 Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Carrying Estimated Assets Inputs Inputs Amount Fair Value Level 1 Level 2 Level 3 Financial Assets: Cash and cash equivalents $ 247 $ 247 $ 247 $ – $ – Loans receivable, net 41,819 41,819 – – 41,819 Accrued interest receivable 653 653 – – 653 Financial Liabilities: Customer interest escrow 544 544 – – 544 Notes payable secured 21,058 21,058 – – 21,058 Notes payable unsecured, net 20,769 20,769 – – 20,769 Accrued interest payable 1,654 1,654 – – 1,654 December 31, 2017 Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Carrying Estimated Assets Inputs Inputs Amount Fair Value Level 1 Level 2 Level 3 Financial Assets: Cash and cash equivalents $ 3,478 $ 3,478 $ 3,478 $ – $ – Loans receivable, net 30,043 30,043 – – 30,043 Accrued interest receivable 720 720 – – 720 Financial Liabilities: Customer interest escrow 935 935 – – 935 Notes payable secured 11,644 11,644 – – 11,644 Notes payable unsecured, net 16,904 16,904 – – 16,904 Accrued interest payable 1,353 1,353 – – 1,353 |
Financing Receivables (Tables)
Financing Receivables (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Receivables [Abstract] | |
Schedule of Financing Receivables | Financing receivables are comprised of the following as of June 30, 2018 and December 31, 2017: June 30, 2018 December 31, 2017 Loans receivable, gross $ 44,803 $ 32,375 Less: Deferred loan fees (1,197 ) (847 ) Less: Deposits (1,827 ) (1,497 ) Plus: Deferred origination expense 196 109 Less: Allowance for loan losses (156 ) (97 ) Loans receivable, net $ 41,819 $ 30,043 |
Commercial Loans - Construction Loan Portfolio Summary | The following is a summary of the loan portfolio to builders for home construction loans as of June 30, 2018 and December 31, 2017: Year Number of States Number of Borrowers Number of Loans Value of Collateral (1) Commitment Amount Gross Amount Outstanding Loan to Value Ratio (2) Loan Fee 2018 17 68 245 $ 93,976 $ 60,551 $ 38,888 64 % (3) 5 % 2017 16 52 168 75,931 47,087 29,564 62 % (3) 5 % (1) The value is determined by the appraised value. (2) The loan to value ratio is calculated by taking the commitment amount and dividing by the appraised value. (3) Represents the weighted average loan to value ratio of the loans. |
Commercial Loans - Real Estate Development Loan Portfolio Summary | The following is a summary of our loan portfolio to builders for land development as of June 30, 2018 and December 31, 2017: Year Number of States Number of Borrowers Number of Loans (4) Gross Value of Collateral (1) Commitment Amount (3) Gross Amount Outstanding Loan to Value Ratio (2) Loan Fee 2018 3 4 7 $ 8,249 $ 6,367 $ 5,915 72 % $ 1,000 2017 1 1 3 4,997 4,600 2,811 56 % 1,000 (1) The value is determined by the appraised value adjusted for remaining costs to be paid. A portion of this collateral is $1,280 and $1,240 as of June 30, 2018 and December 31, 2017, respectively of preferred equity in our Company. In the event of a foreclosure on the property securing these loans, the portion of our collateral that is preferred equity might be difficult to sell, which may impact our ability to recover the loan balance. In addition, a portion of the collateral value is estimated based on the selling prices anticipated for the homes. (2) The loan to value ratio is calculated by taking the outstanding amount and dividing by the appraised value calculated as described above. (3) The commitment amount does not include letters of credit and cash bonds. (4) As of December 31, 2017, our development loans consisted of borrowings which originated in December 2011 and to which we refer throughout this report as the “Pennsylvania Loans”. During the first six months of 2018, the Company originated one additional development loan to the Pennsylvania Loans. |
Summary of Finance Receivables by Classification | Gross finance receivables – By risk rating: June 30, 2018 December 31, 2017 Pass $ 39,327 $ 25,656 Special mention 5,476 6,719 Total $ 44,803 $ 32,375 |
Schedule of Impairment Calculation Method | Gross finance receivables – Method of impairment calculation: June 30, 2018 December 31, 2017 Performing loans evaluated individually $ 18,409 $ 14,992 Performing loans evaluated collectively 26,394 17,383 Total $ 44,803 $ 32,375 |
Schedule of Concentration Risk for Individual Borrowers | Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of loans receivable. Our concentration risks for individual borrowers are summarized in the table below: June 30, 2018 December 31, 2017 Percent of Percent of Borrower Loan Borrower Loan City Commitments City Commitments Highest concentration risk Pittsburgh, PA 23 % Pittsburgh, PA 22 % Second highest concentration risk Cape Coral, FL 4 % Sarasota, FL 7 % Third highest concentration risk Orlando, FL 4 % Savannah, GA 5 % |
Foreclosed Assets (Tables)
Foreclosed Assets (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Roll Forward of Foreclosed Assets | The following table is a roll forward of foreclosed assets: Six Months Ended Year Ended Six Months Ended Beginning balance $ 1,036 $ 2,798 $ 2,798 Additions from loans 4,140 - - Additions for construction/development 545 317 265 Sale proceeds - (1,890 ) (1,890 ) Gain on sale - 77 77 Impairment loss on foreclosed assets (85 ) (266 ) (155 ) Ending balance $ 5,636 $ 1,036 $ 1,095 |
Borrowings (Tables)
Borrowings (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Borrowings | The following table displays our borrowings and a ranking of priority: Priority Rank June 30, 2018 December 31, 2017 Borrowing Source Purchase and sale agreements 1 $ 19,186 $ 11,644 Secured line of credit from affiliates 2 1,877 - Unsecured line of credit (senior) 3 500 - Other unsecured borrowings (senior subordinated) 4 1,008 279 Unsecured Notes through our public offering, gross 5 15,274 14,121 Other unsecured borrowings (subordinated) 5 3,649 2,617 Other unsecured borrowings (junior subordinated) 6 590 173 Total $ 42,084 $ 28,834 |
Schedule of Maturities of Long-term Debt | The following table shows the maturity of outstanding borrowings as of June 30, 2018: Year Maturing Total Amount Maturing Public Offering Other Unsecured Purchase and Sale Agreements and Other Secured Borrowings 2018 $ 25,728 $ 2,306 $ 3,007 $ 20,415 2019 7,556 6,499 1,043 14 2020 2,270 2,155 100 15 2021 3,788 3,773 - 15 2022 and thereafter 2,742 541 1,597 604 Total $ 42,084 $ 15,274 $ 5,747 $ 21,063 |
Schedule of Secured Borrowings | The purchase and sale agreements and lines of credit are summarized below: June 30, 2018 December 31, 2017 Due From Due From Book Value of Shepherd’s Book Value of Shepherd’s Loans which Finance to Loan Loans which Finance to Loan Served as Collateral Purchaser or Lender Served as Collateral Purchaser or Lender Loan Purchaser Builder Finance, Inc. $ 8,538 $ 4,843 $ 7,483 $ 4,089 S.K. Funding 10,108 6,625 9,128 4,134 Lender Shuman 2,160 1,325 1,747 1,325 Paul Swanson 8,214 5,738 2,518 2,096 Total $ 29,020 $ 18,531 $ 20,876 $ 11,644 |
Schedule of Other Unsecured Loans | Our other unsecured debts are detailed below: Maturity Interest Principal Amount Outstanding as of Loan Date Rate (1) June 30, 2018 December 31, 2017 Unsecured Note with Seven Kings Holdings, Inc. August 2018 7.5 % 500 500 Unsecured Line of Credit from Builder Finance, Inc. January 2019 10.0 % 500 - Unsecured Line of Credit from Paul Swanson December 2018 (2) 10.0 % 1,262 1,904 Subordinated Promissory Note Demand (3) 7.5 % 1,125 - Subordinated Promissory Note December 2019 10.5 % 263 113 Subordinated Promissory Note April 2020 10.0 % 100 100 Senior Subordinated Promissory Note March 2022 (4) 10.0 % 400 - Senior Subordinated Promissory Note March 2022 (5) 1.0 % 728 - Junior Subordinated Promissory Note March 2022 (5) 22.5 % 417 - Senior Subordinated Promissory Note October 2022 (6) 1.0 % 279 279 Junior Subordinated Promissory Note October 2022 (6) 20.0 % 173 173 $ 5,747 $ 3,069 (1) (2) (3) (4) (5) (6) |
Schedule of Roll Forward of Notes Outstanding | The following table shows the roll forward of the Notes Program: Six Months Ended June 30, 2018 Year Ended December 31, 2017 Six Months Ended June 30, 2017 Gross Notes outstanding, beginning of period $ 14,121 $ 11,221 $ 11,221 Notes issued 3,350 8,375 8,105 Note repayments / redemptions (2,197 ) (5,475 ) (5,087 ) Gross Notes outstanding, end of period $ 15,274 $ 14,121 $ 14,239 Less deferred financing costs, net 252 286 330 Notes outstanding, net $ 15,022 $ 13,835 $ 13,909 |
Schedule of Roll Forward of Deferred Financing Costs | The following is a roll forward of deferred financing costs: Six Months Year Six Months Ended Ended Ended June 30, 2018 December 31, 2017 June 30, 2017 Deferred financing costs, beginning balance $ 1,102 $ 1,014 $ 1,014 Additions 61 88 40 Deferred financing costs, ending balance $ 1,163 $ 1,102 $ 1,054 Less accumulated amortization (911 ) (816 ) (724 ) Deferred financing costs, net $ 252 $ 286 $ 330 |
Schedule of Roll Forward of Accumulated Amortization of Deferred Financing Costs | The following is a roll forward of the accumulated amortization of deferred financing costs: Six Months Year Six Months Ended Ended Ended June 30, 2018 December 31, 2017 June 30, 2017 Accumulated amortization, beginning balance $ 816 $ 603 $ 603 Additions 95 213 121 Accumulated amortization, ending balance $ 911 $ 816 $ 724 |
Redeemable Preferred Equity (Ta
Redeemable Preferred Equity (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Schedule of Roll Forward of Series C Cumulative Preferred Units | The following is a roll forward of Series C cumulative preferred equity (“Series C Preferred Units”): Six Months Ended June 30, 2018 Year Ended December 31, 2017 Six Months Ended June 30, 2017 Beginning balance $ 1,097 $ – $ – Additions from new investment – 1,004 1,004 Additions from reinvestment 68 93 29 Ending balance $ 1,165 $ 1,097 $ 1,033 |
Schedule of Redemption Option for Investors | The following table shows the earliest redemption options for investors in our Series C Preferred Units as of June 30, 2018: Year of Available Redemption Total Amount Redeemable 2023 $ 1,165 Total $ 1,165 |
Selected Quarterly Condensed 23
Selected Quarterly Condensed Consolidated Financial Data (Unaudited) (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summarized Unaudited Quarterly Condensed Consolidated Financial Data | Summarized unaudited quarterly condensed consolidated financial data for the two quarters of 2018 and four quarters of 2017 are as follows: Quarter 2 Quarter 1 Quarter 4 Quarter 3 Quarter 2 Quarter 1 2018 2018 2017 2017 2017 2017 Net Interest Income after Loan Loss Provision $ 996 $ 926 $ 802 $ 917 $ 725 $ 617 Non-Interest Income – – – – – 77 SG&A expense 691 617 643 537 456 454 Depreciation and Amortization 21 17 – – – 6 Impairment loss on foreclosed assets 80 5 64 47 106 49 Net Income $ 204 $ 287 $ 95 $ 333 $ 163 $ 191 |
Non-Interest Expense Detail (Ta
Non-Interest Expense Detail (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Non-interest Expense Detail | |
Schedule of Selling General and Administrative Expenses | The following table displays our selling, general and administrative (“SG&A”) expenses: For the Six Months Ended June 30, 2018 2017 Selling, general and administrative expenses Legal and accounting $ 223 $ 125 Salaries and related expenses 833 583 Board related expenses 37 55 Advertising 35 25 Rent and utilities 20 14 Loan and foreclosed asset expenses 38 26 Travel 51 32 Other 71 38 Total SG&A $ 1,308 $ 898 |
Fair Value - Schedule of Non-fi
Fair Value - Schedule of Non-financial Instruments Measured at Fair Value on Non-recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Foreclosed assets | $ 5,636 | $ 1,036 | $ 1,095 | $ 2,798 |
Estimate Fair Value [Member] | ||||
Foreclosed assets | 5,636 | 1,036 | ||
Fair Value, Inputs, Level 1 [Member] | ||||
Foreclosed assets | ||||
Fair Value, Inputs, Level 2 [Member] | ||||
Foreclosed assets | ||||
Fair Value, Inputs, Level 3 [Member] | ||||
Foreclosed assets | 5,636 | 1,036 | ||
Carrying Amount [Member] | ||||
Foreclosed assets | $ 5,636 | $ 1,036 |
Fair Value - Schedule of Fair V
Fair Value - Schedule of Fair Value Measurements, Recurring and Nonrecurring (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Financial Assets, Cash and cash equivalents | $ 247 | $ 3,478 | $ 88 | $ 1,566 |
Financial Assets, Loans receivable, net | 41,819 | 30,043 | ||
Financial Assets, Accrued interest receivable | 653 | 720 | ||
Financial Liabilities, Customer interest escrow | 544 | 935 | ||
Financial Liabilities, Notes payable secured | 18,531 | 11,644 | ||
Financial Liabilities, Notes payable unsecured, net | 20,769 | 16,904 | ||
Estimate Fair Value [Member] | ||||
Financial Assets, Cash and cash equivalents | 247 | 3,478 | ||
Financial Assets, Loans receivable, net | 41,819 | 30,043 | ||
Financial Assets, Accrued interest receivable | 653 | 720 | ||
Financial Liabilities, Customer interest escrow | 544 | 935 | ||
Financial Liabilities, Notes payable secured | 21,058 | 11,644 | ||
Financial Liabilities, Notes payable unsecured, net | 20,769 | 16,904 | ||
Financial Liabilities, Accrued interest payable | 1,654 | 1,353 | ||
Fair Value, Inputs, Level 1 [Member] | ||||
Financial Assets, Cash and cash equivalents | 247 | 3,478 | ||
Financial Assets, Loans receivable, net | ||||
Financial Assets, Accrued interest receivable | ||||
Financial Liabilities, Customer interest escrow | ||||
Financial Liabilities, Notes payable secured | ||||
Financial Liabilities, Notes payable unsecured, net | ||||
Financial Liabilities, Accrued interest payable | ||||
Fair Value, Inputs, Level 2 [Member] | ||||
Financial Assets, Cash and cash equivalents | ||||
Financial Assets, Loans receivable, net | ||||
Financial Assets, Accrued interest receivable | ||||
Financial Liabilities, Customer interest escrow | ||||
Financial Liabilities, Notes payable secured | ||||
Financial Liabilities, Notes payable unsecured, net | ||||
Financial Liabilities, Accrued interest payable | ||||
Fair Value, Inputs, Level 3 [Member] | ||||
Financial Assets, Cash and cash equivalents | ||||
Financial Assets, Loans receivable, net | 41,819 | 30,043 | ||
Financial Assets, Accrued interest receivable | 653 | 720 | ||
Financial Liabilities, Customer interest escrow | 544 | 935 | ||
Financial Liabilities, Notes payable secured | 21,058 | 11,644 | ||
Financial Liabilities, Notes payable unsecured, net | 20,769 | 16,904 | ||
Financial Liabilities, Accrued interest payable | 1,654 | 1,353 | ||
Carrying Amount [Member] | ||||
Financial Assets, Cash and cash equivalents | 247 | 3,478 | ||
Financial Assets, Loans receivable, net | 41,819 | 30,043 | ||
Financial Assets, Accrued interest receivable | 653 | 720 | ||
Financial Liabilities, Customer interest escrow | 544 | 935 | ||
Financial Liabilities, Notes payable secured | 21,058 | 11,644 | ||
Financial Liabilities, Notes payable unsecured, net | 20,769 | 16,904 | ||
Financial Liabilities, Accrued interest payable | $ 1,654 | $ 1,353 |
Financing Receivables - Schedul
Financing Receivables - Schedule of Financing Receivables (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Receivables [Abstract] | ||
Loans receivable, gross | $ 44,803 | $ 32,375 |
Less: Deferred loan fees | (1,197) | (847) |
Less: Deposits | (1,827) | (1,497) |
Plus: Deferred origination expense | 196 | 109 |
Less: Allowance for loan losses | (156) | (97) |
Loans receivable, net | $ 41,819 | $ 30,043 |
Financing Receivables - Commerc
Financing Receivables - Commercial Loans - Construction Loan Portfolio Summary (Details) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018USD ($)LoanInteger | Dec. 31, 2017USD ($)LoanInteger | ||
Summary Of Loan Portfolio To Builders For Home Construction [Line Items] | |||
Gross Amount Outstanding | $ 44,803 | $ 32,375 | |
Home Construction Loans [Member] | |||
Summary Of Loan Portfolio To Builders For Home Construction [Line Items] | |||
Number of States | Integer | 17 | 16 | |
Number of Borrowers | Integer | 68 | 52 | |
Number of Loans | Loan | 245 | 168 | |
Value of Collateral | [1] | $ 93,976 | $ 75,931 |
Commitment Amount | 60,551 | 47,087 | |
Gross Amount Outstanding | $ 38,888 | $ 29,564 | |
Loan to Value Ratio | [2],[3] | 64.00% | 62.00% |
Loan Fee | 5.00% | 5.00% | |
[1] | The value is determined by the appraised value. | ||
[2] | Represents the weighted average loan to value ratio of the loans. | ||
[3] | The loan to value ratio is calculated by taking the commitment amount and dividing by the appraised value. |
Financing Receivables - Comme29
Financing Receivables - Commercial Loans - Real Estate Development Loan Portfolio Summary (Details) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018USD ($)LoanInteger | Dec. 31, 2017USD ($)LoanInteger | ||
Real Estate Development Loan Portfolio [Line Items] | |||
Gross Amount Outstanding | $ 44,803 | $ 32,375 | |
Real Estate Development [Member] | |||
Real Estate Development Loan Portfolio [Line Items] | |||
Number of States | Integer | 3 | 1 | |
Number of Borrowers | Integer | 4 | 1 | |
Number of Loans | Loan | [1] | 7 | 3 |
Gross Value of Collateral | [2] | $ 8,249 | $ 4,997 |
Commitment Amount | [3] | 6,367 | 4,600 |
Gross Amount Outstanding | $ 5,915 | $ 2,811 | |
Loan to Value Ratio | [4] | 72.00% | 56.00% |
Loan Fee | $ 1,000 | $ 1,000 | |
[1] | As of December 31, 2017, our development loans consisted of borrowings which originated in December 2011 and to which we refer throughout this report as the "Pennsylvania Loans". During the first six months of 2018, the Company originated one additional development loan to the Pennsylvania Loans. | ||
[2] | The value is determined by the appraised value adjusted for remaining costs to be paid. A portion of this collateral is $1,280 and $1,240 as of June 30, 2018 and December 31, 2017, respectively of preferred equity in our Company. In the event of a foreclosure on the property securing these loans, the portion of our collateral that is preferred equity might be difficult to sell, which may impact our ability to recover the loan balance. In addition, a portion of the collateral value is estimated based on the selling prices anticipated for the homes. | ||
[3] | The commitment amount does not include letters of credit and cash bonds. | ||
[4] | The loan to value ratio is calculated by taking the outstanding amount and dividing by the appraised value calculated as described above. |
Financing Receivables - Comme30
Financing Receivables - Commercial Loans - Real Estate Development Loan Portfolio Summary (Details) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Receivables [Abstract] | ||
Collateral of preferred equity | $ 1,280 | $ 1,240 |
Financing Receivables - Summary
Financing Receivables - Summary of Finance Receivables by Classification (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Loans receivable, gross | $ 44,803 | $ 32,375 |
Financing Receivable [Member] | ||
Loans receivable, gross | 44,803 | 32,375 |
Pass [Member] | Financing Receivable [Member] | ||
Loans receivable, gross | 39,327 | 25,656 |
Special Mention [Member] | Financing Receivable [Member] | ||
Loans receivable, gross | $ 5,476 | $ 6,719 |
Financing Receivables - Sched32
Financing Receivables - Schedule of Impairment Calculation Method (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans receivable, gross | $ 44,803 | $ 32,375 |
Financing Receivable [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans receivable, gross | 44,803 | 32,375 |
Performing Loans Evaluated Individually [Member] | Financing Receivable [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans receivable, gross | 18,409 | 14,992 |
Performing Loans Evaluated Collectively [Member] | Financing Receivable [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans receivable, gross | $ 26,394 | $ 17,383 |
Financing Receivables - Sched33
Financing Receivables - Schedule of Concentration Risk for Individual Borrowers (Details) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Highest Concentration Risk [Member] | ||
Borrower City | Pittsburgh, PA | Pittsburgh, PA |
Percent of Loan Commitments | 23.00% | 22.00% |
Second Highest Concentration Risk [Member] | ||
Borrower City | Cape Coral, FL | Sarasota, FL |
Percent of Loan Commitments | 4.00% | 7.00% |
Third Highest Concentration Risk [Member] | ||
Borrower City | Orlando, FL | Savannah, GA |
Percent of Loan Commitments | 4.00% | 5.00% |
Foreclosed Assets (Details Narr
Foreclosed Assets (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | 12 Months Ended | |
Apr. 30, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Proceeds from loan | $ 4,140 | |||
Foreclosure of assets | 3,897 | |||
Accrued interest reduction due to foreclosure | $ 243 | |||
Foreclosure Agreement [Member] | ||||
Proceeds from loan | $ 4,140 | |||
Foreclosure of assets | 3,897 | |||
Accrued interest reduction due to foreclosure | $ 243 |
Foreclosed Assets - Schedule of
Foreclosed Assets - Schedule of Roll Forward of Foreclosed Assets (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||
Beginning balance | $ 1,036,000 | $ 1,095,000 | $ 2,798,000 | $ 1,036,000 | $ 2,798,000 | $ 2,798,000 | |||
Additions from loans | 4,140,000 | ||||||||
Additions for construction/development | 545,000 | 265,000 | 317,000 | ||||||
Sale proceeds | (1,890,000) | (1,890,000) | |||||||
Gain on sale | 77,000 | 77,000 | |||||||
Impairment loss on foreclosed assets | (80) | $ (5) | $ (64) | $ (47) | (106) | $ (49) | (85,000) | (155,000) | (266,000) |
Ending balance | $ 5,636,000 | $ 1,036,000 | $ 1,095,000 | $ 5,636,000 | $ 1,095,000 | $ 1,036,000 |
Borrowings (Details Narrative)
Borrowings (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||
Mar. 31, 2018 | Jul. 31, 2017 | Apr. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Apr. 30, 2018 | Dec. 31, 2017 | |
Debt instrument interest rate stated percentage | 3.00% | 3.00% | |||||||
Debt description | The interest rate for this borrowing was 6.8% and 4.4% as of June 30, 2018 and 2017. | ||||||||
Interest | $ 6 | $ 10 | |||||||
Principal amount of mortgage | 18,531 | 18,531 | $ 11,644 | ||||||
Interest expense | $ 1,030 | $ 616 | $ 1,891 | $ 1,162 | |||||
Public Offering [Member] | |||||||||
Debt instrument interest rate stated percentage | 9.39% | 9.39% | |||||||
Notes Program [Member] | |||||||||
Debt instrument interest rate stated percentage | 9.21% | ||||||||
Shuman LOC [Member] | |||||||||
Interest | $ 33 | $ 67 | |||||||
Chief Executive Officer [Member] | |||||||||
Debt description | During June 2018, we entered into a First Amendment to the line of credit with our Chief Executive Officer and his wife (the "Wallach LOC") which modified the interest rate to generally equal the prime rate plus 3%. The interest rate for the Wallach LOC was 6.8% and 4.4% as of June 30, 2018 and 2017. | ||||||||
Chief Executive Officer [Member] | Prime Rate [Member] | |||||||||
Debt instrument interest rate stated percentage | 3.00% | 3.00% | |||||||
Wallach LOC [Member] | |||||||||
Borrowings under line of credit | $ 877 | $ 0 | $ 877 | $ 0 | |||||
Remaining line of credit | 373 | 373 | |||||||
Wallach Trust LOC [Member] | |||||||||
Borrowings under line of credit | 0 | 0 | |||||||
Remaining line of credit | 250 | 250 | |||||||
Shuman [Member] | |||||||||
Principal amount of mortgage | 1,325 | 1,325 | $ 1,325 | ||||||
Paul Swanson [Member] | |||||||||
Principal amount of mortgage | 5,738 | 5,738 | $ 2,096 | ||||||
Loan Purchase and Sale Agreement [Member] | Seventh Amendment [Member] | S.K. Funding, LLC [Member] | |||||||||
Purchase price of loan | $ 649 | ||||||||
Description of loan funding obligation | The timing of the Company's principal and interest payments to S.K. Funding under the Seventh Amendment, and S.K. Funding's obligation to fund the Pennsylvania Loans, vary depending on the total principal amount of the Pennsylvania Loans outstanding at any time, as follows: If the total principal amount exceeds $1,000, S.K. Funding must fund the amount between $1,000 and less than or equal to $3,500. If the total principal amount is less than $4,500 then the Company will also repay S.K. Funding's principal as principal payments are received on the Pennsylvania Loans from the underlying borrowers in the amount by which the total principal amount is less than $4,500 until S.K. Funding's principal has been repaid in full. The interest rate accruing to S.K. Funding under the Seventh Amendment is 10.5% calculated on a 365/366-day basis. | ||||||||
Debt term | 24 months | ||||||||
Shuman Line of Credit Agreement [Member] | Shuman [Member] | |||||||||
Line of credit maximum borrowing capacity | $ 1,325 | ||||||||
Cost of funds percentage | 10.00% | ||||||||
Line of credit maturity date | Jul. 31, 2019 | ||||||||
Line of credit termination description | Due in July 2019 unless extended by Shuman for one or more additional 12-month periods. | ||||||||
Swanson Modification Agreement [Member] | Paul Swanson [Member] | |||||||||
Line of credit maximum borrowing capacity | $ 7,000 | ||||||||
Cost of funds percentage | 10.00% | ||||||||
Line of credit maturity date | Jan. 31, 2019 | ||||||||
Line of credit termination description | Due in January 2019 unless extended by Mr. Swanson for one or more additional 15-month periods. | ||||||||
Swanson Line of Credit Agreement [Member] | |||||||||
Interest | 165 | 265 | |||||||
Swanson Line of Credit Agreement [Member] | Paul Swanson [Member] | |||||||||
Line of credit maximum borrowing capacity | 660 | $ 660 | |||||||
Cost of funds percentage | 5.07% | ||||||||
Line of credit termination description | Due in January 2033 | ||||||||
Principal amount of mortgage | 654 | $ 654 | |||||||
Interest expense | 7 | 18 | |||||||
Myrick LOC Agreement [Member] | |||||||||
Interest | 3 | 3 | |||||||
Line of credit maximum borrowing capacity | $ 1,000 | $ 1,000 | |||||||
Cost of funds percentage | 3.00% |
Borrowings - Schedule of Borrow
Borrowings - Schedule of Borrowings (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||
Purchase and sale agreements | $ 19,186 | $ 11,644 |
Secured line of credit from affiliates | 1,877 | |
Unsecured line of credit (senior) | 500 | |
Other unsecured borrowings (senior subordinated) | 1,008 | 279 |
Unsecured Notes through our public offering, gross | 15,274 | 14,121 |
Other unsecured borrowings (subordinated) | 3,649 | 2,617 |
Other unsecured borrowings (junior subordinated) | 590 | 173 |
Total | $ 42,084 | $ 28,834 |
Borrowings - Schedule of Maturi
Borrowings - Schedule of Maturities of Long-term Debt (Details) $ in Thousands | Jun. 30, 2018USD ($) |
Total Amount Maturing [Member] | |
2,018 | $ 25,728 |
2,019 | 7,556 |
2,020 | 2,270 |
2,021 | 3,788 |
2022 and thereafter | 2,742 |
Total | 42,084 |
Public Offering [Member] | |
2,018 | 2,306 |
2,019 | 6,499 |
2,020 | 2,155 |
2,021 | 3,773 |
2022 and thereafter | 541 |
Total | 15,274 |
Other Unsecured [Member] | |
2,018 | 3,007 |
2,019 | 1,043 |
2,020 | 100 |
2,021 | |
2022 and thereafter | 1,597 |
Total | 5,747 |
Purchase and Sale Agreements and Other Secured Borrowings [Member] | |
2,018 | 20,415 |
2,019 | 14 |
2,020 | 15 |
2,021 | 15 |
2022 and thereafter | 604 |
Total | $ 21,063 |
Borrowings - Schedule of Secure
Borrowings - Schedule of Secured Borrowings (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Book Value of Loans which Served as Collateral | $ 29,020 | $ 20,876 |
Due From Shepherd's Finance to Loan Purchaser or Lender | 18,531 | 11,644 |
Builder Finance, Inc. [Member] | ||
Book Value of Loans which Served as Collateral | 8,538 | 7,483 |
Due From Shepherd's Finance to Loan Purchaser or Lender | 4,843 | 4,089 |
S.K. Funding [Member] | ||
Book Value of Loans which Served as Collateral | 10,108 | 9,128 |
Due From Shepherd's Finance to Loan Purchaser or Lender | 6,625 | 4,134 |
Shuman [Member] | ||
Book Value of Loans which Served as Collateral | 2,160 | 1,747 |
Due From Shepherd's Finance to Loan Purchaser or Lender | 1,325 | 1,325 |
Paul Swanson [Member] | ||
Book Value of Loans which Served as Collateral | 8,214 | 2,518 |
Due From Shepherd's Finance to Loan Purchaser or Lender | $ 5,738 | $ 2,096 |
Borrowings - Schedule of Other
Borrowings - Schedule of Other Unsecured Loans (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2018 | Dec. 31, 2017 | ||
Unsecured Note with Seven Kings Holdings, Inc. [Member] | |||
Maturity Date | August 2,018 | ||
Interest Rate | [1] | 7.50% | |
Other Unsecured Loans | $ 500 | $ 500 | |
Unsecured Line of Credit from Builder Finance, Inc. [Member] | |||
Maturity Date | January 2,019 | ||
Interest Rate | [1] | 10.00% | |
Other Unsecured Loans | $ 500 | ||
Unsecured Line of Credit from Paul Swanson [Member] | |||
Maturity Date | [2] | December 2,018 | |
Interest Rate | [1] | 10.00% | |
Other Unsecured Loans | $ 1,262 | 1,904 | |
Subordinated Promissory Note [Member] | |||
Maturity Date | [3] | Demand | |
Interest Rate | [1] | 7.50% | |
Other Unsecured Loans | $ 1,125 | ||
Subordinated Promissory Note One [Member] | |||
Maturity Date | December 2,019 | ||
Interest Rate | [1] | 10.50% | |
Other Unsecured Loans | $ 263 | 113 | |
Subordinated Promissory Note Two [Member] | |||
Maturity Date | April 2,020 | ||
Interest Rate | [1] | 10.00% | |
Other Unsecured Loans | $ 100 | 100 | |
Senior Subordinated Promissory Note [Member] | |||
Maturity Date | [4] | March 2,022 | |
Interest Rate | [1] | 10.00% | |
Other Unsecured Loans | $ 400 | ||
Senior Subordinated Promissory Note One [Member] | |||
Maturity Date | [5] | March 2,022 | |
Interest Rate | [1] | 1.00% | |
Other Unsecured Loans | $ 728 | ||
Junior Subordinated Promissory Note [Member] | |||
Maturity Date | [5] | March 2,022 | |
Interest Rate | [1] | 22.50% | |
Other Unsecured Loans | $ 417 | ||
Senior Subordinated Promissory Note Two [Member] | |||
Maturity Date | [6] | October 2,022 | |
Interest Rate | [1] | 1.00% | |
Other Unsecured Loans | $ 279 | 279 | |
Junior Subordinated Promissory Note One [Member] | |||
Maturity Date | [6] | October 2,022 | |
Interest Rate | [1] | 20.00% | |
Other Unsecured Loans | $ 173 | 173 | |
Other Unsecured Debt [Member] | |||
Other Unsecured Loans | $ 5,747 | $ 3,069 | |
[1] | Interest rate per annum, based upon actual days outstanding and a 365/366 day year. | ||
[2] | Due in December 2018 unless extended by Mr. Swanson for one or more additional 15-month periods. | ||
[3] | Principal due six months after lender gives notice. This note may be prepaid without fee, premium, or penalty. | ||
[4] | This note may be prepaid upon lender's request at least 10 days prior to an interest payment and up to $20 of principal. | ||
[5] | These notes were issued to the same holder and, when calculated together, yield a blended return of 11% per annum. | ||
[6] | These notes were issued to the same holder and, when calculated together, yield a blended return of 10% per annum. |
Borrowings - Schedule of Othe41
Borrowings - Schedule of Other Unsecured Loans (Details) (Parenthetical) $ in Thousands | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Note 1 [Member] | |
Debt yield return percentage | 11.00% |
Note 2 [Member] | |
Debt yield return percentage | 10.00% |
Senior Subordinated Promissory Note [Member] | Maximum [Member] | |
Debt, principal amount | $ 20 |
Borrowings - Schedule of Roll F
Borrowings - Schedule of Roll Forward of Notes Outstanding (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |||
Gross Notes outstanding, beginning of period | $ 14,121 | $ 11,221 | $ 11,221 |
Notes issued | 3,350 | 8,105 | 8,375 |
Note repayments / redemptions | (2,197) | (5,087) | (5,475) |
Gross Notes outstanding, end of period | 15,274 | 14,239 | 14,121 |
Less deferred financing costs, net | 252 | 330 | 286 |
Notes outstanding, net | $ 15,022 | $ 13,909 | $ 13,835 |
Borrowings - Schedule of Roll43
Borrowings - Schedule of Roll Forward of Deferred Financing Costs (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Debt Disclosure [Abstract] | ||||
Deferred financing costs, beginning balance | $ 1,102 | $ 1,014 | $ 1,014 | |
Additions | 61 | 40 | 88 | |
Deferred financing costs, ending balance | 1,163 | 1,054 | 1,102 | |
Less accumulated amortization | (911) | (724) | (816) | $ (603) |
Deferred financing costs, net | $ 252 | $ 330 | $ 286 |
Borrowings - Schedule of Roll44
Borrowings - Schedule of Roll Forward of Accumulated Amortization of Deferred Financing Costs (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |||
Accumulated amortization, beginning balance | $ 816 | $ 603 | $ 603 |
Additions | 95 | 121 | 213 |
Accumulated amortization, ending balance | $ 911 | $ 724 | $ 816 |
Redeemable Preferred Equity - S
Redeemable Preferred Equity - Schedule of Roll Forward of Redeemable Preferred Equity (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Equity [Abstract] | |||
Series C Cumulative Preferred Equity, beginning balance | $ 1,097 | ||
Additions from new investment | 1,004 | 1,004 | |
Additions from reinvestment | 68 | 29 | 93 |
Series C Cumulative Preferred Equity, ending balance | $ 1,165 | $ 1,033 | $ 1,097 |
Redeemable Preferred Equity -46
Redeemable Preferred Equity - Schedule of Redemption Option for Investors (Details) - USD ($) $ in Thousands | 6 Months Ended | |||
Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | |
Equity [Abstract] | ||||
Year of Available Redemption | 2,023 | |||
Total Amount Redeemable | $ 1,165 | $ 1,097 | $ 1,033 |
Members' Capital (Details Narra
Members' Capital (Details Narrative) - shares | Jun. 30, 2018 | Mar. 31, 2018 | Jan. 31, 2018 | Dec. 31, 2017 |
Chief Financial Officer [Member] | ||||
Equity ownership, percentage | 2.00% | |||
Executive Vice President of Operations [Member] | ||||
Equity ownership, percentage | 1.00% | |||
Executive Vice President of Sales [Member] | ||||
Equity ownership, percentage | 14.30% | |||
Class A Common Units [Member] | ||||
Common stock, units outstanding | 2,629 | 2,629 | ||
Class A Common Units [Member] | Chief Financial Officer [Member] | ||||
Equity ownership, percentage | 2.00% | |||
Class A Common Units [Member] | Executive Vice President of Operations [Member] | ||||
Equity ownership, percentage | 2.00% | |||
Class A Common Units [Member] | Executive Vice President of Sales [Member] | ||||
Equity ownership, percentage | 15.30% |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) $ in Thousands | Jun. 30, 2018 | Mar. 31, 2018 | Feb. 28, 2018 | Jan. 31, 2018 |
Chief Executive Officer and Wife [Member] | ||||
Line of credit | $ 877 | |||
Executive Vice President of Sales [Member] | ||||
Line of credit | $ 1,000 | |||
Trust Affiliated with Seven Kings Holdings, Inc [Member] | Subordinated Promissory Note [Member] | ||||
Debt instrument, face amount | $ 1,125 | |||
Chief Executive Officer [Member] | Senior Subordinated Promissory Note [Member] | ||||
Debt instrument, face amount | $ 400 | |||
Chief Financial Officer [Member] | ||||
Percentage of ownership interest | 2.00% | |||
Executive Vice President of Operations [Member] | ||||
Percentage of ownership interest | 1.00% | |||
Executive Vice President of Sales [Member] | ||||
Percentage of ownership interest | 14.30% | |||
Class A Common Units [Member] | Independent Manager 1 [Member] | ||||
Percentage of ownership interest | 1.00% | |||
Class A Common Units [Member] | Independent Manager 2 [Member] | ||||
Percentage of ownership interest | 1.00% | |||
Class A Common Units [Member] | Chief Financial Officer [Member] | ||||
Percentage of ownership interest | 2.00% | |||
Class A Common Units [Member] | Executive Vice President of Operations [Member] | ||||
Percentage of ownership interest | 2.00% | |||
Class A Common Units [Member] | Executive Vice President of Sales [Member] | ||||
Percentage of ownership interest | 15.30% |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Commitments and Contingencies Disclosure [Abstract] | ||
Letter of credit, amount outstanding | $ 21,676 | $ 19,312 |
Selected Quarterly Condensed 50
Selected Quarterly Condensed Consolidated Financial Data (Unaudited) - Summarized Unaudited Quarterly Condensed Consolidated Financial Data (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||
Net Interest Income after Loan Loss Provision | $ 996 | $ 926 | $ 802 | $ 917 | $ 725 | $ 617 | |||
Non-Interest Income | 77 | $ 77,000 | |||||||
SG&A expense | 691 | 617 | 643 | 537 | 450 | 454 | 1,308,000 | 898,000 | |
Depreciation and Amortization | 21 | 17 | 6 | 6 | 38,000 | 12,000 | |||
Impairment loss on foreclosed assets | 80 | 5 | 64 | 47 | 106 | 49 | 85,000 | 155,000 | $ 266,000 |
Net Income | $ 204 | $ 287 | $ 95 | $ 333 | $ 163 | $ 191 | $ 491,000 | $ 354,000 |
Non-Interest Expense Detail - S
Non-Interest Expense Detail - Schedule of Selling General and Administrative Expenses (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Non-interest Expense Detail | ||||||||
Legal and accounting | $ 223,000 | $ 125,000 | ||||||
Salaries and related expenses | 833,000 | 583,000 | ||||||
Board related expenses | 37,000 | 55,000 | ||||||
Advertising | 35,000 | 25,000 | ||||||
Rent and utilities | 20,000 | 14,000 | ||||||
Loan and foreclosed asset expenses | 38,000 | 26,000 | ||||||
Travel | 51,000 | 32,000 | ||||||
Other | 71,000 | 38,000 | ||||||
Total SG&A | $ 691 | $ 617 | $ 643 | $ 537 | $ 450 | $ 454 | $ 1,308,000 | $ 898,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - Daniel M Wallach [Member] | Aug. 01, 2018USD ($) |
Sale of stock, description | we sold 12 of our Preferred Units to Daniel M. Wallach |
Sale of transaction, amount | $ 1,200 |