Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 11, 2020 | |
Document And Entity Information | ||
Entity Registrant Name | Shepherd's Finance, LLC | |
Entity Central Index Key | 0001544190 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 0 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 |
Interim Condensed Consolidated
Interim Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and cash equivalents | $ 3,341 | $ 1,883 |
Accrued interest receivable | 1,162 | 1,031 |
Loans receivable, net | 54,197 | 55,369 |
Foreclosed assets | 5,031 | 4,916 |
Premises and equipment | 928 | 936 |
Other assets | 210 | 202 |
Total assets | 64,869 | 64,337 |
Liabilities and Members' Capital | ||
Customer interest escrow | 681 | 643 |
Accounts payable and accrued expenses | 304 | 466 |
Accrued interest payable | 2,414 | 2,533 |
Notes payable secured, net of deferred financing costs | 26,054 | 26,991 |
Notes payable unsecured, net of deferred financing costs | 28,416 | 26,520 |
Due to preferred equity member | 37 | 37 |
Total liabilities | 57,906 | 57,190 |
Commitments and Contingencies (Note 9) | ||
Redeemable Preferred Equity | ||
Series C preferred equity | 3,036 | 2,959 |
Members' Capital | ||
Series B preferred equity | 1,470 | 1,470 |
Class A common equity | 2,457 | 2,718 |
Members' capital | 3,927 | 4,188 |
Total liabilities, redeemable preferred equity and members' capital | $ 64,869 | $ 64,337 |
Interim Condensed Consolidate_2
Interim Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Net Interest Income | ||
Interest and fee income on loans | $ 2,574 | $ 2,432 |
Interest expense: | ||
Interest related to secured borrowings | 817 | 681 |
Interest related to unsecured borrowings | 767 | 625 |
Interest expense | 1,584 | 1,306 |
Net interest income | 990 | 1,126 |
Less: Loan loss provision | 35 | 47 |
Net interest income after loan loss provision | 955 | 1,079 |
Non-Interest Income | ||
Gain on foreclosure of assets | ||
Total non-interest income | ||
Income | 955 | 1,079 |
Non-Interest Expense | ||
Selling, general and administrative | 708 | 624 |
Depreciation and amortization | 21 | 23 |
Loss on the sale of foreclosed assets | 35 | |
Impairment loss on foreclosed assets | 109 | 80 |
Total non-interest expense | 873 | 727 |
Net income | 82 | 352 |
Earned distribution to preferred equity holders | 126 | 105 |
Net income attributable to common equity holders | $ (44) | $ 247 |
Interim Condensed Consolidate_3
Interim Condensed Consolidated Statements of Changes in Members' Capital (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||
Members' capital, beginning balance | $ 4,188 | $ 3,697 |
Net income less distributions to Series C preferred equity holders of $89 and $72 | (7) | 280 |
Contributions from Series B preferred equity holders | 60 | |
Earned distributions to Series B preferred equity holders | (37) | (33) |
Distributions to common equity holders | (217) | |
Members' capital, ending balance | $ 3,927 | $ 4,004 |
Interim Condensed Consolidate_4
Interim Condensed Consolidated Statements of Changes in Members' Capital (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||
Distributions to preferred stockholders | $ 89 | $ 72 |
Interim Condensed Consolidate_5
Interim Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operations | ||
Net income | $ 82 | $ 352 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Amortization of deferred financing costs | 40 | 65 |
Provision for loan losses | 35 | 47 |
Change in loan origination fees, net | (191) | 59 |
Loss on sale of foreclosed assets | 35 | |
Impairment of foreclosed assets | 109 | 80 |
Depreciation and amortization | 21 | 20 |
Net change in operating assets and liabilities: | ||
Other assets | (21) | 58 |
Accrued interest receivable | (131) | (129) |
Customer interest escrow | 1 | 350 |
Accrued interest payable | (119) | (48) |
Accounts payable and accrued expenses | (162) | (137) |
Net cash (used in) provided by operating activities | (302) | 717 |
Cash flows from investing activities | ||
Loan additions and principal collections, net | 1,328 | (3,606) |
Investment in foreclosed assets | (444) | (176) |
Proceeds from the sale of foreclosed assets | 185 | |
Net cash provided by (used in) investing activities | 1,069 | (3,782) |
Cash flows from financing activities | ||
Contributions from preferred equity holders | 60 | |
Distributions to preferred equity holders | (12) | (32) |
Distributions to common equity holders | (217) | |
Proceeds from secured note payable | 4,084 | 5,262 |
Repayments of secured note payable | (4,390) | (2,459) |
Proceeds from unsecured notes payable | 5,261 | 3,925 |
Redemptions/repayments of unsecured notes payable | (3,959) | (3,087) |
Deferred financing costs paid | (77) | (93) |
Net cash provided by financing activities | 691 | 3,576 |
Net increase in cash and cash equivalents | 1,458 | 511 |
Cash and cash equivalents | ||
Beginning of period | 1,883 | 1,401 |
End of period | 3,341 | 1,912 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 1,703 | 1,348 |
Non-cash investing and financing activities | ||
Reinvested earnings of Series B preferred equity held in interest escrow | 37 | 34 |
Earned but not paid distributions of Series C preferred equity holders | 89 | 72 |
Secured transferred to unsecured notes payable | 631 | |
Reclassification of deferred financing costs from other assets | $ 189 |
Description of Business and Bas
Description of Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [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 the sole member of a consolidating subsidiary, 84 REPA, LLC. The Company operates pursuant to its Second Amended and Restated Operating Agreement, as amended, by and among Daniel M. Wallach and the other members of the Company effective as of March 16, 2017. As of March 31, 2020, the Company extends commercial loans to residential homebuilders (in 21 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 March 31, 2020, 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, the instructions to Form 10-Q and Article 8 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, 2020. These unaudited interim condensed consolidated financial statements should be read in conjunction with the 2019 consolidated financial statements and notes thereto (the “2019 Financial Statements”) included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Form 10-K”). The accounting policies followed by the Company are set forth in Note 2 – Summary of Significant Accounting Policies Accounting Standards to be Adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-13, “ Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments FASB ASU 2018-13, “ Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Reclassifications Certain prior year amounts have been reclassified for consistency with current period presentation. |
Fair Value
Fair Value | 3 Months Ended |
Mar. 31, 2020 | |
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 March 31, 2020 and December 31, 2019. The following tables present the balances of non-financial instruments measured at fair value on a non-recurring basis as of March 31, 2020 and December 31, 2019. Quoted Prices in Active Significant Significant March 31, 2020 Identical Observable Unobservable Carrying Estimated Assets Inputs Inputs Amount Fair Value Level 1 Level 2 Level 3 Foreclosed assets $ 5,031 $ 5,031 $ – $ – $ 5,031 Impaired loans, net 1,531 1,531 – – 1,531 Total $ 6,562 $ 6,562 $ – $ – $ 6,562 Quoted Prices in Active Significant Markets for Other Significant December 31, 2019 Identical Observable Unobservable Carrying Estimated Assets Inputs Inputs Amount Fair Value Level 1 Level 2 Level 3 Foreclosed assets $ 4,916 $ 4,916 $ – $ – $ 4,916 Impaired loans, net 1,487 1,487 – – 1,487 Total $ 6,403 $ 6,403 $ – $ – $ 6,403 The table below is a summary of fair value estimates for financial instruments: March 31, 2020 December 31, 2019 Carrying Estimated Carrying Estimated Amount Fair Value Amount Fair Value Financial Assets Cash and cash equivalents $ 3,341 $ 3,341 $ 1,883 $ 1,883 Loans receivable, net 54,197 54,197 55,369 55,369 Accrued interest on loans 1,162 1,162 1,031 1,031 Financial Liabilities Customer interest escrow 681 681 643 643 Notes payable secured, net 26,054 26,054 26,991 26,991 Notes payable unsecured, net 28,416 28,416 26,520 26,520 Accrued interest payable 2,414 2,414 2,533 2,533 |
Financing Receivables
Financing Receivables | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
Financing Receivables | 3. Financing Receivables Financing receivables are comprised of the following as of March 31, 2020 and December 31, 2019: March 31, 2020 December 31, 2019 Loans receivable, gross $ 56,077 $ 57,608 Less: Deferred loan fees (676 ) (856 ) Less: Deposits (1,149 ) (1,352 ) Plus: Deferred origination costs 215 204 Less: Allowance for loan losses (270 ) (235 ) Loans receivable, net $ 54,197 $ 55,369 The allowance for loan losses at March 31, 2020 is $270, of which $224 related to loans without specific reserves. At December 31, 2019, the allowance was $235, of which $230 related to loans without specific reserves. No charge-offs occurred during the quarter ended March 31, 2020. During the year ended December 31, 2019, we incurred $173 in direct charge-offs. Commercial Construction and Development Loans Commercial Loans – Construction Loan Portfolio Summary As of March 31, 2020, the Company’s portfolio consisted of 218 commercial construction and nine development loans with 67 borrowers in 21 states. The following is a summary of the loan portfolio to builders for home construction loans as of March 31, 2020 and December 31, 2019: Year Number of States Number Borrowers Number of Loans Value of Collateral (1) Commitment Amount Gross Amount Outstanding Loan to Value Ratio (2) Loan Fee 2020 21 67 218 $ 86,958 $ 61,420 $ 46,161 71 % (3) 5 % 2019 21 70 241 $ 93,211 $ 65,273 $ 48,611 70 % (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 March 31, 2020 and December 31, 2019: Year Number of States Number of Borrowers Number of Gross Value of Collateral (1) Commitment Amount (3) Gross Amount Outstanding Loan to Value Ratio (2) Interest Spread 2020 4 5 9 $ 12,151 $ 11,066 $ 9,916 82 % (4) 7 % 2019 4 5 9 $ 13,007 $ 9,866 $ 8,997 69 % (4) 7 % (1) The value is determined by the appraised value adjusted for remaining costs to be paid. For both March 31, 2020 and December 31, 2019, a portion of this collateral is $1,470 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) Represents the weighted average loan to value ratio of the 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: March 31, 2020 December 31, 2019 Pass $ 50,809 $ 53,542 Special mention 3,687 2,571 Classified – accruing – – Classified – nonaccrual 1,581 1,495 Total $ 56,077 $ 57,608 Finance Receivables – Method of impairment calculation: March 31, 2020 December 31, 2019 Performing loans evaluated individually $ 27,732 $ 26,233 Performing loans evaluated collectively 26,764 29,880 Non-performing loans without a specific reserve 1,063 1,467 Non-performing loans with a specific reserve 518 28 Total evaluated collectively for loan losses $ 56,077 $ 57,608 As March 31, 2020 and December 31, 2019, there were no loans acquired with deteriorated credit quality. Impaired Loans The following is a summary of our impaired nonaccrual commercial construction loans as of March 31, 2020 and December 31, 2019. March 31, 2020 December 31, 2019 Unpaid principal balance (contractual obligation from customer) $ 1,581 $ 1,495 Charge-offs and payments applied - - Gross value before related allowance 1,581 1,495 Related allowance (50 ) (8 ) Value after allowance $ 1,531 $ 1,487 Concentrations Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of loans receivable. Our concentration risks for our top three customers listed by geographic real estate market are summarized in the table below: March 31, 2020 December 31, 2019 Percent of Percent of Borrower Loan Borrower Loan City Commitments City Commitments Highest concentration risk Pittsburgh, PA 25 % Pittsburgh, PA 25 % Second highest concentration risk Orlando, FL 16 % Orlando, FL 15 % Third highest concentration risk Cape Coral, FL 4 % Cape Coral, FL 3 % |
Foreclosed Assets
Foreclosed Assets | 3 Months Ended |
Mar. 31, 2020 | |
Repossessed Assets [Abstract] | |
Foreclosed Assets | 4. Foreclosed Assets The following table is a roll forward of foreclosed assets: Three Months March 31, 2020 Year Ended December 31, 2019 Three Months March 31, 2019 Beginning balance $ 4,916 $ 5,973 $ 5,973 Additions from loans - 3,352 - Additions for construction/development 444 763 176 Sale proceeds (185 ) (4,543 ) - Loss on sale (35 ) (274 ) - Gain on foreclosure - 203 - Impairment loss on foreclosed assets (109 ) (558 ) (80 ) Ending balance $ 5,031 $ 4,916 $ 6,069 |
Borrowings
Borrowings | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Borrowings | 5. Borrowings The following table displays our borrowings and a ranking of priority: Priority Rank March 31, 2020 December 31, 2019 Borrowing Source Purchase and sale agreements and other secured borrowings 1 $ 25,445 $ 26,806 Secured line of credit from affiliates 2 614 189 Unsecured line of credit (senior) 3 500 500 Other unsecured debt (senior subordinated) 4 1,407 1,407 Unsecured Notes through our public offering, gross 5 21,070 20,308 Other unsecured debt (subordinated) 5 5,302 4,131 Other unsecured debt (junior subordinated) 6 590 590 Total $ 54,928 $ 53,931 The following table shows the maturity of outstanding debt as of March 31, 2020: Year Maturing Total Amount Public Other Secured Borrowings 2020 $ 31,813 $ 1,949 $ 4,424 $ 25,439 2021 13,006 11,570 1,420 16 2022 5,225 3,463 1,746 16 2023 1,027 821 189 17 2024 and thereafter 3,857 3,267 20 571 Total $ 54,928 $ 21,070 $ 7,799 $ 26,059 Secured Borrowings Lines of Credit As of March 31, 2020, the Company had borrowed $614 on its lines of credit from affiliates, which have a total limit of $2,500. Summary Borrowings secured by loan assets are summarized below: March 31, 2020 December 31, 2019 Book Value of Loans which Served as Collateral Due from Shepherd’s Finance to Loan Purchaser or Lender Book Value of Loans which Served as Collateral Due from Shepherd’s Finance to Loan Purchaser or Lender Loan Purchaser Builder Finance $ 12,593 $ 8,428 $ 13,711 $ 9,375 S.K. Funding 10,004 6,771 10,394 6,771 Lender Shuman 1,798 1,325 1,785 1,325 Jeff Eppinger 1,941 1,000 1,821 1,000 Hardy Enterprises, Inc. 1,852 1,000 1,684 1,000 Gary Zentner 611 250 472 250 R. Scott Summers 1,210 847 841 628 Paul Swanson 6,105 5,193 8,377 5,824 Total $ 36,114 $ 24,814 $ 39,085 $ 26,173 Unsecured Borrowings Unsecured Notes through the Public Offering (“Notes Program”) On March 22, 2019, the Company terminated its second public offering and commenced its third public offering of fixed rate subordinated notes (the “Notes”). The effective interest rate on borrowings through our Notes Program at March 31, 2020 and December 31, 2019 was 10.68% and 10.56%, respectively, not including the amortization of deferred financing costs. We generally offer four durations at any given time, ranging from 12 to 48 months from the date of issuance. There are limited rights of early redemption. Our 36-month Note has a mandatory early redemption option, subject to certain conditions. The following table shows the roll forward of our Notes Program: Three Months Year Ended Three Months Gross Notes outstanding, beginning of period $ 20,308 $ 17,348 $ 17,348 Notes issued 4,722 11,127 3,532 Note repayments / redemptions (3,960 ) (8,167 ) (2,049 ) Gross Notes outstanding, end of period $ 21,070 $ 20,308 $ 18,831 Less deferred financing costs, net 453 416 454 Notes outstanding, net $ 20,617 $ 19,892 $ 18,377 The following is a roll forward of deferred financing costs: Three Months Ended March 31, 2020 Year Ended December 31, 2019 Three Months Ended March 31, 2019 Deferred financing costs, beginning balance $ 786 $ 1,212 $ 1,212 Additions 77 365 282 Disposals - (791 ) – Deferred financing costs, ending balance 863 786 1,494 Less accumulated amortization (410 ) (370 ) (1,040 ) Deferred financing costs, net $ 453 $ 416 $ 454 The following is a roll forward of the accumulated amortization of deferred financing costs: Three Months Year Three Months Ended March 31, 2020 Ended Ended March 31, 2019 Accumulated amortization, beginning balance $ 370 $ 1,000 $ 1,000 Additions 40 161 40 Disposals - (791 ) - Accumulated amortization, ending balance $ 410 $ 370 $ 1,040 Other Unsecured Debts Our other unsecured debts are detailed below: Principal Amount Outstanding as of Loan Maturity Interest (1) March 31, December 31, 2019 Unsecured Note with Seven Kings Holdings, Inc. Demand (2) 9.5 % $ 500 $ 500 Unsecured Line of Credit from Builder Finance, Inc. March 2021 10.0 % 500 - Unsecured Line of Credit from Paul Swanson June 2020 (6) 10.0 % 1,807 1,176 Subordinated Promissory Note September 2020 9.5 % 563 563 Subordinated Promissory Note December 2021 10.5 % 146 146 Subordinated Promissory Note April 2020 10.0 % 100 100 Subordinated Promissory Note April 2021 10.0 % 174 174 Subordinated Promissory Note August 2022 11.0 % 200 200 Subordinated Promissory Note March 2023 11.0 % 169 169 Subordinated Promissory Note April 2020 6.5 % 500 500 Subordinated Promissory Note February 2021 11.0 % 600 600 Subordinated Promissory Note Demand 5.0 % 500 500 Subordinated Promissory Note Demand 5.0 % 3 3 Subordinated Promissory Note December 2023 11 % 20 - Subordinated Promissory Note February 2024 11 % 20 - Senior Subordinated Promissory Note March 2022 (3) 10.0 % 400 400 Senior Subordinated Promissory Note March 2022 (4) 1.0 % 728 728 Junior Subordinated Promissory Note March 2022 (4) 22.5 % 417 417 Senior Subordinated Promissory Note October 2020 (5) 1.0 % 279 279 Junior Subordinated Promissory Note October 2020 (5) 20.0 % 173 173 $ 7,799 $ 6,628 (1) Interest rate per annum, based upon actual days outstanding and a 365/366-day year. (2) Due six months after lender gives notice. (3) Lender may require us to repay $20 of principal and all unpaid interest with 10 days’ notice. (4) These notes were issued to the same holder and, when calculated together, yield a blended return of 11% per annum. (5) These notes were issued to the same holder and, when calculated together, yield a blended return of 10% per annum. (6) Amount due in June 2020 is $1,000 with the remainder due November 2020. |
Redeemable Preferred Equity
Redeemable Preferred Equity | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Redeemable Preferred Equity | 6. Redeemable Preferred Equity The following is a roll forward of our Series C cumulative preferred equity (“Series C Preferred Units”): Three Months Ended March 31, 2020 Year Ended December 31, 2019 Three Months Ended March 31, 2019 Beginning balance $ 2,959 $ 2,385 $ 2,385 Additions from new investment - 300 - Distributions (12 ) (42 ) Additions from reinvestment 89 316 72 Ending balance $ 3,036 $ 2,959 $ 2,457 The following table shows the earliest redemption options for investors in our Series C Preferred Units as of March 31, 2020: Year Maturing Total Amount 2024 $ 2,719 2025 317 Total $ 3,036 |
Members' Capital
Members' Capital | 3 Months Ended |
Mar. 31, 2020 | |
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 March 31, 2020, the Class A Common Units are held by eight 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 as of March 31, 2020 and December 31, 2019. The Series B Preferred Units were issued to the Hoskins Group through a reduction in a loan issued by the Hoskins Group to the Company. In December 2015, the Hoskins Group agreed to purchase 0.1 Series B Preferred Units for $10 at each closing of a lot to a third party in the Hamlets and Tuscany subdivisions. As of March 31, 2020, the Hoskins Group owned a total of 14.7 Series B Preferred Units, which were issued for a total of $1,470. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 8. Related Party Transactions As of March 31, 2020, the Company had $1,250, $250, and $386 available to borrow against the line of credit from Daniel M. Wallach (our Chief Executive Officer and chairman of the board of managers) and his wife, the line of credit from the 2007 Daniel M. Wallach Legacy Trust, and the line of credit from William Myrick (our Executive Vice President of Sales), respectively. A more detailed description is included in Note 6 of our 2019 Financial Statements. These borrowings are in notes payable secured, net of deferred financing costs on the interim condensed consolidated balance sheet. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
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 $15,259 and $16,662 at March 31, 2020 and December 31, 2019, respectively. |
Selected Quarterly Condensed Co
Selected Quarterly Condensed Consolidated Financial Data (Unaudited) | 3 Months Ended |
Mar. 31, 2020 | |
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 quarters of 2020 and 2019 are as follows: Quarter 1 Quarter 4 Quarter 3 Quarter 2 Quarter 1 2020 2019 2019 2019 2019 Net interest income after loan loss provision $ 955 $ 1,117 $ 1,115 $ 818 $ 1,079 Non-interest income - 22 86 95 - SG&A expense 708 447 703 620 624 Depreciation and amortization 21 26 21 22 23 Loss on sale of foreclosed assets 35 – 274 – – Impairment loss on foreclosed assets 109 282 – 196 80 Net income $ 82 $ 384 $ 203 $ 75 $ 352 |
Non-Interest Expense Detail
Non-Interest Expense Detail | 3 Months Ended |
Mar. 31, 2020 | |
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 Three Months Ended March 31, 2020 2019 Selling, general and administrative expenses Legal and accounting $ 139 $ 127 Salaries and related expenses 278 362 Board related expenses 25 16 Advertising 21 19 Rent and utilities 13 9 Loan and foreclosed asset expenses 135 20 Travel 59 32 Other 38 39 Total SG&A $ 708 $ 624 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 12. Subsequent Events Management of the Company has evaluated subsequent events through May 11, 2020, the date these interim condensed consolidated financial statements were issued. In March 2020, the Company told all of its borrowers that it would fund all loans where the underlying house was already under construction, and advised the customers to build as quickly as possible to bring the houses on the market as soon as possible. For loans where the borrower had not yet begun construction of the underlying house, the Company told the borrowers that it would not fund construction and that they should therefore not start construction. As described below, the Company is now beginning to fund additional loans in certain limited circumstances. The Company continues to monitor market conditions overall and in the specific markets in which it lends. Most non-bank competitors are no longer making new loans and some are not funding existing loans. Some markets have had little to no impact from a housing perspective as a result of COVID-19, while other markets have been impacted. Borrowers in Pennsylvania and Michigan have been most impacted by COVID-19 due to the government shutting down home construction completely in those states (Pennsylvania has announced reopening construction on May 1, 2020). Opportunities for home sales for our borrowers in their markets are impacted to varying degrees. The Company is now funding new loans to borrowers in stronger markets for the purpose of developing presold homes, which loans have reduced (60%) loan-to-value ratios. The Company is also considering funding spec loans in those same markets on a case-by-case basis for loans with reduced loan-to-value ratios (50-60%). Changes in home buyer FICO scores and other requirements by end user lenders is expected to impact the Company’s builders who focus on lower priced homes, and some real estate markets where the primary business is entertainment will be more impacted than most other markets. The Company has some customers in Orlando, Florida, and is working through issues with two of those customers. Some of those customers may have their credit quality downgraded in future quarters, and the Company is working to mitigate any losses it may incur as a result of the virus for those customers and others as they become known. As of April 20, 2020, the Company informed some of those builders located in stronger markets to begin construction. As a result, the committed amount on the remaining loans that the Company has not released for construction to begin was $4,200 with $3,000 unfunded. On May 7, 2020, the Company made the decision to reopen lending under normal, pre-COVID-19 terms for a limited group of certain of its customers. In addition, the decision was made to allow rehab loans to builders at terms that are less conservative than the 50% loan to value established in April 2020 but more conservative than terms prior to the arrival of COVID-19. Management is also contemplating purchasing debt from other similar lending companies at deep discounts, but does not have any serious prospects at this time. On May 5, 2020, we entered into an agreement to borrow approximately $362 pursuant to the Paycheck Protection Program (“PPP”), created under the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act. The PPP is intended to provide loans to qualified businesses to cover payroll and certain other identified costs. The loan has an interest rate of 1.0% and a term of 24 months. No payments are due for the first 6 months, although interest accrues, and monthly payments, which include interest, are due over the next 18 months to pay off the loan. Funds from the loan may only be used for certain purposes, including payroll, benefits, rent, and utilities. All or a portion of the loan may be forgivable, as provided by the terms of the PPP. The loan is evidenced by a promissory note, which contains customary events of default relating to, among other things, payment defaults and breaches of representations. We may prepay the loan at any time prior to maturity with no prepayment penalties. The Company is continuously monitoring the markets, builders, and the COVID-19 situation for the remaining loans which the Company has not yet released for construction. Management anticipates revisiting these lending parameters in May 2020 as the COVID-19 situation continues to develop. Management also notes that while demand for its lending products declined in 2019 due increases in competition, demand during the pandemic is increasing. |
Description of Business and B_2
Description of Business and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying (a) interim condensed consolidated balance sheet as of March 31, 2020, 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, the instructions to Form 10-Q and Article 8 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, 2020. These unaudited interim condensed consolidated financial statements should be read in conjunction with the 2019 consolidated financial statements and notes thereto (the “2019 Financial Statements”) included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Form 10-K”). The accounting policies followed by the Company are set forth in Note 2 – Summary of Significant Accounting Policies |
Accounting Standards to be Adopted | Accounting Standards to be Adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-13, “ Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments FASB ASU 2018-13, “ Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified for consistency with current period presentation. |
Fair Value (Tables)
Fair Value (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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 March 31, 2020 and December 31, 2019. Quoted Prices in Active Significant Significant March 31, 2020 Identical Observable Unobservable Carrying Estimated Assets Inputs Inputs Amount Fair Value Level 1 Level 2 Level 3 Foreclosed assets $ 5,031 $ 5,031 $ – $ – $ 5,031 Impaired loans, net 1,531 1,531 – – 1,531 Total $ 6,562 $ 6,562 $ – $ – $ 6,562 Quoted Prices in Active Significant Markets for Other Significant December 31, 2019 Identical Observable Unobservable Carrying Estimated Assets Inputs Inputs Amount Fair Value Level 1 Level 2 Level 3 Foreclosed assets $ 4,916 $ 4,916 $ – $ – $ 4,916 Impaired loans, net 1,487 1,487 – – 1,487 Total $ 6,403 $ 6,403 $ – $ – $ 6,403 |
Schedule of Fair Value Estimates for Financial Instruments | The table below is a summary of fair value estimates for financial instruments: March 31, 2020 December 31, 2019 Carrying Estimated Carrying Estimated Amount Fair Value Amount Fair Value Financial Assets Cash and cash equivalents $ 3,341 $ 3,341 $ 1,883 $ 1,883 Loans receivable, net 54,197 54,197 55,369 55,369 Accrued interest on loans 1,162 1,162 1,031 1,031 Financial Liabilities Customer interest escrow 681 681 643 643 Notes payable secured, net 26,054 26,054 26,991 26,991 Notes payable unsecured, net 28,416 28,416 26,520 26,520 Accrued interest payable 2,414 2,414 2,533 2,533 |
Financing Receivables (Tables)
Financing Receivables (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
Schedule of Financing Receivables | Financing receivables are comprised of the following as of March 31, 2020 and December 31, 2019: March 31, 2020 December 31, 2019 Loans receivable, gross $ 56,077 $ 57,608 Less: Deferred loan fees (676 ) (856 ) Less: Deposits (1,149 ) (1,352 ) Plus: Deferred origination costs 215 204 Less: Allowance for loan losses (270 ) (235 ) Loans receivable, net $ 54,197 $ 55,369 |
Schedule of Commercial Loans - Construction Loan Portfolio Summary | The following is a summary of the loan portfolio to builders for home construction loans as of March 31, 2020 and December 31, 2019: Year Number of States Number Borrowers Number of Loans Value of Collateral (1) Commitment Amount Gross Amount Outstanding Loan to Value Ratio (2) Loan Fee 2020 21 67 218 $ 86,958 $ 61,420 $ 46,161 71 % (3) 5 % 2019 21 70 241 $ 93,211 $ 65,273 $ 48,611 70 % (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. |
Schedule of Commercial Loans - Real Estate Development Loan Portfolio Summary | The following is a summary of our loan portfolio to builders for land development as of March 31, 2020 and December 31, 2019: Year Number of States Number of Borrowers Number of Gross Value of Collateral (1) Commitment Amount (3) Gross Amount Outstanding Loan to Value Ratio (2) Interest Spread 2020 4 5 9 $ 12,151 $ 11,066 $ 9,916 82 % (4) 7 % 2019 4 5 9 $ 13,007 $ 9,866 $ 8,997 69 % (4) 7 % (1) The value is determined by the appraised value adjusted for remaining costs to be paid. For both March 31, 2020 and December 31, 2019, a portion of this collateral is $1,470 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) Represents the weighted average loan to value ratio of the loans. |
Summary of Finance Receivables by Classification | Gross finance receivables – By risk rating: March 31, 2020 December 31, 2019 Pass $ 50,809 $ 53,542 Special mention 3,687 2,571 Classified – accruing – – Classified – nonaccrual 1,581 1,495 Total $ 56,077 $ 57,608 |
Schedule of Finance Receivables Impairment Calculation Method | Finance Receivables – Method of impairment calculation: March 31, 2020 December 31, 2019 Performing loans evaluated individually $ 27,732 $ 26,233 Performing loans evaluated collectively 26,764 29,880 Non-performing loans without a specific reserve 1,063 1,467 Non-performing loans with a specific reserve 518 28 Total evaluated collectively for loan losses $ 56,077 $ 57,608 |
Schedule of Impaired Loans | The following is a summary of our impaired nonaccrual commercial construction loans as of March 31, 2020 and December 31, 2019. March 31, 2020 December 31, 2019 Unpaid principal balance (contractual obligation from customer) $ 1,581 $ 1,495 Charge-offs and payments applied - - Gross value before related allowance 1,581 1,495 Related allowance (50 ) (8 ) Value after allowance $ 1,531 $ 1,487 |
Summary of Concentration Risks | Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of loans receivable. Our concentration risks for our top three customers listed by geographic real estate market are summarized in the table below: March 31, 2020 December 31, 2019 Percent of Percent of Borrower Loan Borrower Loan City Commitments City Commitments Highest concentration risk Pittsburgh, PA 25 % Pittsburgh, PA 25 % Second highest concentration risk Orlando, FL 16 % Orlando, FL 15 % Third highest concentration risk Cape Coral, FL 4 % Cape Coral, FL 3 % |
Foreclosed Assets (Tables)
Foreclosed Assets (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Repossessed Assets [Abstract] | |
Schedule of Roll Forward of Foreclosed Assets | The following table is a roll forward of foreclosed assets: Three Months March 31, 2020 Year Ended December 31, 2019 Three Months March 31, 2019 Beginning balance $ 4,916 $ 5,973 $ 5,973 Additions from loans - 3,352 - Additions for construction/development 444 763 176 Sale proceeds (185 ) (4,543 ) - Loss on sale (35 ) (274 ) - Gain on foreclosure - 203 - Impairment loss on foreclosed assets (109 ) (558 ) (80 ) Ending balance $ 5,031 $ 4,916 $ 6,069 |
Borrowings (Tables)
Borrowings (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Borrowings | The following table displays our borrowings and a ranking of priority: Priority Rank March 31, 2020 December 31, 2019 Borrowing Source Purchase and sale agreements and other secured borrowings 1 $ 25,445 $ 26,806 Secured line of credit from affiliates 2 614 189 Unsecured line of credit (senior) 3 500 500 Other unsecured debt (senior subordinated) 4 1,407 1,407 Unsecured Notes through our public offering, gross 5 21,070 20,308 Other unsecured debt (subordinated) 5 5,302 4,131 Other unsecured debt (junior subordinated) 6 590 590 Total $ 54,928 $ 53,931 |
Schedule of Maturities of Debt | The following table shows the maturity of outstanding debt as of March 31, 2020: Year Maturing Total Amount Public Other Secured Borrowings 2020 $ 31,813 $ 1,949 $ 4,424 $ 25,439 2021 13,006 11,570 1,420 16 2022 5,225 3,463 1,746 16 2023 1,027 821 189 17 2024 and thereafter 3,857 3,267 20 571 Total $ 54,928 $ 21,070 $ 7,799 $ 26,059 |
Schedule of Secured Borrowings | Borrowings secured by loan assets are summarized below: March 31, 2020 December 31, 2019 Book Value of Loans which Served as Collateral Due from Shepherd’s Finance to Loan Purchaser or Lender Book Value of Loans which Served as Collateral Due from Shepherd’s Finance to Loan Purchaser or Lender Loan Purchaser Builder Finance $ 12,593 $ 8,428 $ 13,711 $ 9,375 S.K. Funding 10,004 6,771 10,394 6,771 Lender Shuman 1,798 1,325 1,785 1,325 Jeff Eppinger 1,941 1,000 1,821 1,000 Hardy Enterprises, Inc. 1,852 1,000 1,684 1,000 Gary Zentner 611 250 472 250 R. Scott Summers 1,210 847 841 628 Paul Swanson 6,105 5,193 8,377 5,824 Total $ 36,114 $ 24,814 $ 39,085 $ 26,173 |
Schedule of Roll Forward of Notes Outstanding | The following table shows the roll forward of our Notes Program: Three Months Year Ended Three Months Gross Notes outstanding, beginning of period $ 20,308 $ 17,348 $ 17,348 Notes issued 4,722 11,127 3,532 Note repayments / redemptions (3,960 ) (8,167 ) (2,049 ) Gross Notes outstanding, end of period $ 21,070 $ 20,308 $ 18,831 Less deferred financing costs, net 453 416 454 Notes outstanding, net $ 20,617 $ 19,892 $ 18,377 |
Schedule of Roll Forward of Deferred Financing Costs | The following is a roll forward of deferred financing costs: Three Months Ended March 31, 2020 Year Ended December 31, 2019 Three Months Ended March 31, 2019 Deferred financing costs, beginning balance $ 786 $ 1,212 $ 1,212 Additions 77 365 282 Disposals - (791 ) – Deferred financing costs, ending balance 863 786 1,494 Less accumulated amortization (410 ) (370 ) (1,040 ) Deferred financing costs, net $ 453 $ 416 $ 454 |
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: Three Months Year Three Months Ended March 31, 2020 Ended Ended March 31, 2019 Accumulated amortization, beginning balance $ 370 $ 1,000 $ 1,000 Additions 40 161 40 Disposals - (791 ) - Accumulated amortization, ending balance $ 410 $ 370 $ 1,040 |
Schedule of Other Unsecured Loans | Our other unsecured debts are detailed below: Principal Amount Outstanding as of Loan Maturity Interest (1) March 31, December 31, 2019 Unsecured Note with Seven Kings Holdings, Inc. Demand (2) 9.5 % $ 500 $ 500 Unsecured Line of Credit from Builder Finance, Inc. March 2021 10.0 % 500 - Unsecured Line of Credit from Paul Swanson June 2020 (6) 10.0 % 1,807 1,176 Subordinated Promissory Note September 2020 9.5 % 563 563 Subordinated Promissory Note December 2021 10.5 % 146 146 Subordinated Promissory Note April 2020 10.0 % 100 100 Subordinated Promissory Note April 2021 10.0 % 174 174 Subordinated Promissory Note August 2022 11.0 % 200 200 Subordinated Promissory Note March 2023 11.0 % 169 169 Subordinated Promissory Note April 2020 6.5 % 500 500 Subordinated Promissory Note February 2021 11.0 % 600 600 Subordinated Promissory Note Demand 5.0 % 500 500 Subordinated Promissory Note Demand 5.0 % 3 3 Subordinated Promissory Note December 2023 11 % 20 - Subordinated Promissory Note February 2024 11 % 20 - Senior Subordinated Promissory Note March 2022 (3) 10.0 % 400 400 Senior Subordinated Promissory Note March 2022 (4) 1.0 % 728 728 Junior Subordinated Promissory Note March 2022 (4) 22.5 % 417 417 Senior Subordinated Promissory Note October 2020 (5) 1.0 % 279 279 Junior Subordinated Promissory Note October 2020 (5) 20.0 % 173 173 $ 7,799 $ 6,628 (1) Interest rate per annum, based upon actual days outstanding and a 365/366-day year. (2) Due six months after lender gives notice. (3) Lender may require us to repay $20 of principal and all unpaid interest with 10 days’ notice. (4) These notes were issued to the same holder and, when calculated together, yield a blended return of 11% per annum. (5) These notes were issued to the same holder and, when calculated together, yield a blended return of 10% per annum. (6) Amount due in June 2020 is $1,000 with the remainder due November 2020. |
Redeemable Preferred Equity (Ta
Redeemable Preferred Equity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Schedule of Roll Forward of Redeemable Preferred Equity | The following is a roll forward of our Series C cumulative preferred equity (“Series C Preferred Units”): Three Months Ended March 31, 2020 Year Ended December 31, 2019 Three Months Ended March 31, 2019 Beginning balance $ 2,959 $ 2,385 $ 2,385 Additions from new investment - 300 - Distributions (12 ) (42 ) Additions from reinvestment 89 316 72 Ending balance $ 3,036 $ 2,959 $ 2,457 |
Schedule of Redemption Option for Investors | The following table shows the earliest redemption options for investors in our Series C Preferred Units as of March 31, 2020: Year Maturing Total Amount 2024 $ 2,719 2025 317 Total $ 3,036 |
Selected Quarterly Condensed _2
Selected Quarterly Condensed Consolidated Financial Data (Unaudited) (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Unaudited Quarterly Condensed Consolidated Financial Data | Summarized unaudited quarterly condensed consolidated financial data for the quarters of 2020 and 2019 are as follows: Quarter 1 Quarter 4 Quarter 3 Quarter 2 Quarter 1 2020 2019 2019 2019 2019 Net interest income after loan loss provision $ 955 $ 1,117 $ 1,115 $ 818 $ 1,079 Non-interest income - 22 86 95 - SG&A expense 708 447 703 620 624 Depreciation and amortization 21 26 21 22 23 Loss on sale of foreclosed assets 35 – 274 – – Impairment loss on foreclosed assets 109 282 – 196 80 Net income $ 82 $ 384 $ 203 $ 75 $ 352 |
Non-Interest Expense Detail (Ta
Non-Interest Expense Detail (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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 Three Months Ended March 31, 2020 2019 Selling, general and administrative expenses Legal and accounting $ 139 $ 127 Salaries and related expenses 278 362 Board related expenses 25 16 Advertising 21 19 Rent and utilities 13 9 Loan and foreclosed asset expenses 135 20 Travel 59 32 Other 38 39 Total SG&A $ 708 $ 624 |
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 | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Foreclosed assets | $ 5,031 | $ 4,916 | $ 6,069 | $ 5,973 |
Estimated Fair Value [Member] | ||||
Foreclosed assets | 5,031 | 4,916 | ||
Impaired loans, net | 1,531 | 1,487 | ||
Total | 6,562 | 6,403 | ||
Quoted Prices in Active Markets for Identical Assets Level 1 [Member] | ||||
Foreclosed assets | ||||
Impaired loans, net | ||||
Total | ||||
Significant Other Observable Inputs Level 2 [Member] | ||||
Foreclosed assets | ||||
Impaired loans, net | ||||
Total | ||||
Significant Unobservable Inputs Level 3 [Member] | ||||
Foreclosed assets | 5,031 | 4,916 | ||
Impaired loans, net | 1,531 | 1,487 | ||
Total | 6,562 | 6,403 | ||
Carrying Amount [Member] | ||||
Foreclosed assets | 5,031 | 4,916 | ||
Impaired loans, net | 1,531 | 1,487 | ||
Total | $ 6,562 | $ 6,403 |
Fair Value - Schedule of Fair V
Fair Value - Schedule of Fair Value Estimates for Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Estimated Fair Value [Member] | ||
Financial Assets, Cash and cash equivalents | $ 3,341 | $ 1,883 |
Financial Assets, Loans receivable, net | 54,197 | 55,369 |
Financial Assets, Accrued interest on loans | 1,162 | 1,031 |
Financial Liabilities, Customer interest escrow | 681 | 643 |
Financial Liabilities, Notes payable secured, net | 26,054 | 26,991 |
Financial Liabilities, Notes payable unsecured, net | 28,416 | 26,520 |
Financial Liabilities, Accrued interest payable | 2,414 | 2,533 |
Carrying Amount [Member] | ||
Financial Assets, Cash and cash equivalents | 3,341 | 1,883 |
Financial Assets, Loans receivable, net | 54,197 | 55,369 |
Financial Assets, Accrued interest on loans | 1,162 | 1,031 |
Financial Liabilities, Customer interest escrow | 681 | 643 |
Financial Liabilities, Notes payable secured, net | 26,054 | 26,991 |
Financial Liabilities, Notes payable unsecured, net | 28,416 | 26,520 |
Financial Liabilities, Accrued interest payable | $ 2,414 | $ 2,533 |
Financing Receivables (Details
Financing Receivables (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Allowance for loan losses | $ 270 | $ 235 |
Related to loans without specific reserves | 224 | 230 |
Loans charge offs | 173 | |
Description on construction loan | As of March 31, 2020, the Company's portfolio consisted of 218 commercial construction and nine development loans with 67 borrowers in 21 states. | |
Loans Acquired with Deteriorated Credit Quality [Member] | ||
Finance receivable |
Financing Receivables - Schedul
Financing Receivables - Schedule of Financing Receivables (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
Loans receivable, gross | $ 56,077 | $ 57,608 |
Less: Deferred loan fees | (676) | (856) |
Less: Deposits | (1,149) | (1,352) |
Plus: Deferred origination costs | 215 | 204 |
Less: Allowance for loan losses | (270) | (235) |
Loans receivable, net | $ 54,197 | $ 55,369 |
Financing Receivables - Sched_2
Financing Receivables - Schedule of Commercial Loans - Construction Loan Portfolio Summary (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020USD ($)Integer | Dec. 31, 2019USD ($)Integer | ||
Summary Of Loan Portfolio To Builders For Home Construction [Line Items] | |||
Gross Amount Outstanding | $ 56,077 | $ 57,608 | |
Home Construction Loans [Member] | |||
Summary Of Loan Portfolio To Builders For Home Construction [Line Items] | |||
Number of States | Integer | 21 | 21 | |
Number of Borrowers | Integer | 67 | 70 | |
Number of Loans | Integer | 218 | 241 | |
Value of Collateral | [1] | $ 86,958 | $ 93,211 |
Commitment Amount | 61,420 | 65,273 | |
Gross Amount Outstanding | $ 46,161 | $ 48,611 | |
Loan to Value Ratio | [2],[3] | 71.00% | 70.00% |
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 - Sched_3
Financing Receivables - Schedule of Commercial Loans - Real Estate Development Loan Portfolio Summary (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020USD ($)Integer | Dec. 31, 2019USD ($)Integer | ||
Real Estate Development Loan Portfolio [Line Items] | |||
Gross Amount Outstanding | $ 56,077 | $ 57,608 | |
Real Estate Development [Member] | |||
Real Estate Development Loan Portfolio [Line Items] | |||
Number of States | Integer | 4 | 4 | |
Number of Borrowers | Integer | 5 | 5 | |
Number of Loans | Integer | 9 | 9 | |
Gross Value of Collateral | [1] | $ 12,151 | $ 13,007 |
Commitment Amount | [2] | 11,066 | 9,866 |
Gross Amount Outstanding | $ 9,916 | $ 8,997 | |
Loan to Value Ratio | [3],[4] | 82.00% | 69.00% |
Interest Spread | 7.00% | 7.00% | |
[1] | The value is determined by the appraised value adjusted for remaining costs to be paid. For both March 31, 2020 and December 31, 2019, a portion of this collateral is $1,470 of preferred equity in our Company. In the event of a foreclosure on the property securing these loans, the portion of our collateral that is preferred equity might be difficult to sell, which may impact our ability to recover the loan balance. In addition, a portion of the collateral value is estimated based on the selling prices anticipated for the homes. | ||
[2] | The commitment amount does not include letters of credit and cash bonds. | ||
[3] | Represents the weighted average loan to value ratio of the loans. | ||
[4] | The loan to value ratio is calculated by taking the outstanding amount and dividing by the appraised value calculated as described above. |
Financing Receivables - Sched_4
Financing Receivables - Schedule of Commercial Loans - Real Estate Development Loan Portfolio Summary (Details) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
Collateral of preferred equity | $ 1,470 | $ 1,470 |
Financing Receivables - Summary
Financing Receivables - Summary of Finance Receivables by Classification (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Loans receivable, gross | $ 56,077 | $ 57,608 |
Financing Receivable [Member] | ||
Loans receivable, gross | 56,077 | 57,608 |
Pass [Member] | Financing Receivable [Member] | ||
Loans receivable, gross | 50,809 | 53,542 |
Special Mention [Member] | Financing Receivable [Member] | ||
Loans receivable, gross | 3,687 | 2,571 |
Classified - Accruing [Member] | Financing Receivable [Member] | ||
Loans receivable, gross | ||
Classified - Nonaccrual [Member] | Financing Receivable [Member] | ||
Loans receivable, gross | $ 1,581 | $ 1,495 |
Financing Receivables - Sched_5
Financing Receivables - Schedule of Finance Receivables Impairment Calculation Method (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans receivable, gross | $ 56,077 | $ 57,608 |
Financing Receivable [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans receivable, gross | 56,077 | 57,608 |
Performing Loans Evaluated Individually [Member] | Financing Receivable [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans receivable, gross | 27,732 | 26,233 |
Performing Loans Evaluated Collectively [Member] | Financing Receivable [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans receivable, gross | 26,764 | 29,880 |
Non-Performing Loans Without a Specific Reserve [Member] | Financing Receivable [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans receivable, gross | 1,063 | 1,467 |
Non-Performing Loans With a Specific Reserve [Member] | Financing Receivable [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans receivable, gross | $ 518 | $ 28 |
Financing Receivables - Sched_6
Financing Receivables - Schedule of Impaired Loans (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
Unpaid principal balance (contractual obligation from customer) | $ 1,581 | $ 1,495 |
Charge-offs and payments applied | ||
Gross value before related allowance | 1,581 | 1,495 |
Related allowance | (50) | (8) |
Value after allowance | $ 1,531 | $ 1,487 |
Financing Receivables - Summa_2
Financing Receivables - Summary of Concentration Risks (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Highest Concentration Risk [Member] | ||
Borrower City | Pittsburgh, PA | Pittsburgh, PA |
Percent of Loan Commitments | 25.00% | 25.00% |
Second Highest Concentration Risk [Member] | ||
Borrower City | Orlando, FL | Orlando, FL |
Percent of Loan Commitments | 16.00% | 15.00% |
Third Highest Concentration Risk [Member] | ||
Borrower City | Cape Coral, FL | Cape Coral, FL |
Percent of Loan Commitments | 4.00% | 3.00% |
Foreclosed Assets - Schedule of
Foreclosed Assets - Schedule of Roll Forward of Foreclosed Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2019 | |
Repossessed Assets [Abstract] | ||||||
Beginning balance | $ 4,916 | $ 6,069 | $ 5,973 | $ 5,973 | ||
Additions from loans | 3,352 | |||||
Additions for construction/development | 444 | 176 | 763 | |||
Sale proceeds | (185) | (4,543) | ||||
Loss on sale of foreclosed assets | (35) | (274) | ||||
Gain on foreclosure | 203 | |||||
Impairment loss on foreclosed assets | (109) | $ (282) | $ (196) | (80) | (558) | |
Ending balance | $ 5,031 | $ 4,916 | $ 6,069 | $ 4,916 |
Borrowings (Details Narrative)
Borrowings (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Secured Borrowings [Member] | ||
Borrowings under line of credit | $ 614 | |
Line of credit maximum borrowing capacity | $ 2,500 | |
Notes Program [Member] | ||
Debt instrument effective interest rate | 10.68% | 10.56% |
UnSecured Borrowings [Member] | Minimum [Member] | ||
Notes offering period | 12 months | |
UnSecured Borrowings [Member] | Maximum [Member] | ||
Notes offering period | 48 months |
Borrowings - Schedule of Borrow
Borrowings - Schedule of Borrowings (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
Purchase and sale agreements and other secured borrowings | $ 25,445 | $ 26,806 |
Secured line of credit from affiliates | 614 | 189 |
Unsecured line of credit (senior) | 500 | 500 |
Other unsecured debt (senior subordinated) | 1,407 | 1,407 |
Unsecured Notes through our public offering, gross | 21,070 | 20,308 |
Other unsecured debt (subordinated) | 5,302 | 4,131 |
Other unsecured debt (junior subordinated) | 590 | 590 |
Total | $ 54,928 | $ 53,931 |
Borrowings - Schedule of Maturi
Borrowings - Schedule of Maturities of Debt (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Total Amount Maturing [Member] | |
2020 | $ 31,813 |
2021 | 13,006 |
2022 | 5,225 |
2023 | 1,027 |
2024 and thereafter | 3,857 |
Total | 54,928 |
Public Offering [Member] | |
2020 | 1,949 |
2021 | 11,570 |
2022 | 3,463 |
2023 | 821 |
2024 and thereafter | 3,267 |
Total | 21,070 |
Other Unsecured [Member] | |
2020 | 4,424 |
2021 | 1,420 |
2022 | 1,746 |
2023 | 189 |
2024 and thereafter | 20 |
Total | 7,799 |
Secured Borrowings [Member] | |
2020 | 25,439 |
2021 | 16 |
2022 | 16 |
2023 | 17 |
2024 and thereafter | 571 |
Total | $ 26,059 |
Borrowings - Schedule of Secure
Borrowings - Schedule of Secured Borrowings (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Book Value of Loans which Served as Collateral | $ 36,114 | $ 39,085 |
Due from Shepherd's Finance to Loan Purchaser or Lender | 24,814 | 26,173 |
Shuman [Member] | ||
Book Value of Loans which Served as Collateral | 1,798 | 1,785 |
Due from Shepherd's Finance to Loan Purchaser or Lender | 1,325 | 1,325 |
Jeff Eppinger [Member] | ||
Book Value of Loans which Served as Collateral | 1,941 | 1,821 |
Due from Shepherd's Finance to Loan Purchaser or Lender | 1,000 | 1,000 |
Gary Zentner [Member] | ||
Book Value of Loans which Served as Collateral | 611 | 472 |
Due from Shepherd's Finance to Loan Purchaser or Lender | 250 | 250 |
R. Scott Summers [Member] | ||
Book Value of Loans which Served as Collateral | 1,210 | 841 |
Due from Shepherd's Finance to Loan Purchaser or Lender | 847 | 628 |
Paul Swanson [Member] | ||
Book Value of Loans which Served as Collateral | 6,105 | 8,377 |
Due from Shepherd's Finance to Loan Purchaser or Lender | 5,193 | 5,824 |
Builder Finance, Inc. [Member] | ||
Book Value of Loans which Served as Collateral | 12,593 | 13,711 |
Due from Shepherd's Finance to Loan Purchaser or Lender | 8,428 | 9,375 |
S.K. Funding, LLC [Member] | ||
Book Value of Loans which Served as Collateral | 10,004 | 10,394 |
Due from Shepherd's Finance to Loan Purchaser or Lender | 6,771 | 6,771 |
Hardy Enterprises, Inc. [Member] | ||
Book Value of Loans which Served as Collateral | 1,852 | 1,684 |
Due from Shepherd's Finance to Loan Purchaser or Lender | $ 1,000 | $ 1,000 |
Borrowings - Schedule of Roll F
Borrowings - Schedule of Roll Forward of Notes Outstanding (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |||
Gross notes outstanding, beginning of period | $ 20,308 | $ 17,348 | $ 17,348 |
Notes issued | 4,722 | 3,532 | 11,127 |
Note repayments / redemptions | (3,960) | (2,049) | (8,167) |
Gross Notes outstanding, end of period | 21,070 | 18,831 | 20,308 |
Less deferred financing costs, net | 453 | 454 | 416 |
Notes outstanding, net | $ 20,617 | $ 18,377 | $ 19,892 |
Borrowings - Schedule of Roll_2
Borrowings - Schedule of Roll Forward of Deferred Financing Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Disclosure [Abstract] | ||||
Deferred financing costs, beginning balance | $ 786 | $ 1,212 | $ 1,212 | |
Additions | 77 | 282 | 365 | |
Disposals | (791) | |||
Deferred financing costs, ending balance | 863 | 1,494 | 786 | |
Less accumulated amortization | (410) | (1,040) | (370) | $ (1,000) |
Deferred financing costs, net | $ 453 | $ 454 | $ 416 |
Borrowings - Schedule of Roll_3
Borrowings - Schedule of Roll Forward of Accumulated Amortization of Deferred Financing Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |||
Accumulated amortization, beginning balance | $ 370 | $ 1,000 | $ 1,000 |
Additions | 40 | 40 | 161 |
Disposals | (791) | ||
Accumulated amortization, ending balance | $ 410 | $ 1,040 | $ 370 |
Borrowings - Schedule of Other
Borrowings - Schedule of Other Unsecured Loans (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2019 | ||
Unsecured Note with Seven Kings Holdings, Inc. [Member] | |||
Maturity Date | [1] | Demand | |
Interest Rate | [2] | 9.50% | |
Other Unsecured Loans | $ 500 | $ 500 | |
Unsecured Line of Credit from Builder Finance, Inc. [Member] | |||
Maturity Date | March 2021 | ||
Interest Rate | [3] | 10.00% | |
Other Unsecured Loans | $ 500 | ||
Unsecured Line of Credit from Paul Swanson [Member] | |||
Maturity Date | [3] | June 2020 | |
Interest Rate | [2] | 10.00% | |
Other Unsecured Loans | $ 1,807 | 1,176 | |
Subordinated Promissory Note [Member] | |||
Maturity Date | September 2020 | ||
Interest Rate | [2] | 9.50% | |
Other Unsecured Loans | $ 563 | 563 | |
Subordinated Promissory Note One [Member] | |||
Maturity Date | December 2021 | ||
Interest Rate | [2] | 10.50% | |
Other Unsecured Loans | $ 146 | 146 | |
Subordinated Promissory Note Two [Member] | |||
Maturity Date | April 2020 | ||
Interest Rate | [2] | 10.00% | |
Other Unsecured Loans | $ 100 | 100 | |
Subordinated Promissory Notes Three [Member] | |||
Maturity Date | April 2021 | ||
Interest Rate | [2] | 10.00% | |
Other Unsecured Loans | $ 174 | 174 | |
Subordinated Promissory Note Four [Member] | |||
Maturity Date | August 2022 | ||
Interest Rate | [2] | 11.00% | |
Other Unsecured Loans | $ 200 | 200 | |
Subordinated Promissory Note Five [Member] | |||
Maturity Date | March 2023 | ||
Interest Rate | [2] | 11.00% | |
Other Unsecured Loans | $ 169 | 169 | |
Subordinated Promissory Note Six [Member] | |||
Maturity Date | April 2020 | ||
Interest Rate | [2] | 6.50% | |
Other Unsecured Loans | $ 500 | 500 | |
Subordinated Promissory Note Seven [Member] | |||
Maturity Date | February 2021 | ||
Interest Rate | [2] | 11.00% | |
Other Unsecured Loans | $ 600 | 600 | |
Subordinated Promissory Note Eight [Member] | |||
Maturity Date | Demand | ||
Interest Rate | [2] | 5.00% | |
Other Unsecured Loans | $ 500 | 500 | |
Subordinated Promissory Note Nine [Member] | |||
Maturity Date | Demand | ||
Interest Rate | [2] | 5.00% | |
Other Unsecured Loans | $ 3 | 3 | |
Subordinated Promissory Note Ten [Member] | |||
Maturity Date | December 2023 | ||
Interest Rate | [2] | 11.00% | |
Other Unsecured Loans | $ 20 | ||
Subordinated Promissory Note Elevan [Member] | |||
Maturity Date | February 2024 | ||
Interest Rate | [2] | 11.00% | |
Other Unsecured Loans | $ 20 | ||
Senior Subordinated Promissory Note [Member] | |||
Maturity Date | [4] | March 2022 | |
Interest Rate | [2] | 10.00% | |
Other Unsecured Loans | $ 400 | 400 | |
Senior Subordinated Promissory Note One [Member] | |||
Maturity Date | [5] | March 2022 | |
Interest Rate | [2] | 1.00% | |
Other Unsecured Loans | $ 728 | 728 | |
Junior Subordinated Promissory Note [Member] | |||
Maturity Date | [5] | March 2022 | |
Interest Rate | [2] | 22.50% | |
Other Unsecured Loans | $ 417 | 417 | |
Senior Subordinated Promissory Note Two [Member] | |||
Maturity Date | [6] | October 2020 | |
Interest Rate | [2] | 1.00% | |
Other Unsecured Loans | $ 279 | 279 | |
Junior Subordinated Promissory Note One [Member] | |||
Maturity Date | [6] | October 2020 | |
Interest Rate | [2] | 20.00% | |
Other Unsecured Loans | $ 173 | 173 | |
Other Unsecured Debt [Member] | |||
Other Unsecured Loans | $ 7,799 | $ 6,628 | |
[1] | Due six months after lender gives notice. | ||
[2] | Interest rate per annum, based upon actual days outstanding and a 365/366-day year. | ||
[3] | Amount due in June 2020 is $1,000 with the remainder due November 2020. | ||
[4] | Lender may require us to repay $20 of principal and all unpaid interest with 10 days' notice. | ||
[5] | These notes were issued to the same holder and, when calculated together, yield a blended return of 11% per annum. | ||
[6] | These notes were issued to the same holder and, when calculated together, yield a blended return of 10% per annum. |
Borrowings - Schedule of Othe_2
Borrowings - Schedule of Other Unsecured Loans (Details) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Unsecured debt | $ 28,416 | $ 26,520 |
Senior Subordinated Promissory Note [Member] | ||
Debt, principal amount | $ 20 | |
Senior Subordinated Promissory Note One [Member] | ||
Debt yield return percentage | 11.00% | |
Senior Subordinated Promissory Note Two [Member] | ||
Debt yield return percentage | 10.00% | |
Unsecured Line of Credit from Paul Swanson [Member] | ||
Unsecured debt | $ 1,000 |
Redeemable Preferred Equity - S
Redeemable Preferred Equity - Schedule of Roll Forward of Redeemable Preferred Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Equity [Abstract] | |||
Series C Cumulative Preferred Equity, beginning balance | $ 2,959 | $ 2,385 | $ 2,385 |
Additions from new investment | 300 | ||
Distributions | (12) | (42) | |
Additions from reinvestment | 89 | 72 | 316 |
Series C Cumulative Preferred Equity, ending balance | $ 3,036 | $ 2,457 | $ 2,959 |
Redeemable Preferred Equity -_2
Redeemable Preferred Equity - Schedule of Redemption Option for Investors (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Total Amount Redeemable | $ 3,036 | $ 2,959 | $ 2,457 | $ 2,385 |
2024 [Member] | ||||
Total Amount Redeemable | 2,719 | |||
2025 [Member] | ||||
Total Amount Redeemable | $ 317 |
Members' Capital (Details Narra
Members' Capital (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | ||
Dec. 31, 2015 | Mar. 31, 2020 | Dec. 31, 2019 | |
Series B preferred equity | $ 1,470 | $ 1,470 | |
Class A Common Units [Member] | |||
Common stock, units outstanding | 2,629 | 2,629 | |
Series B Preferred Units [Member] | |||
Number of units agreed to purchase | The Series B Preferred Units were issued to the Hoskins Group through a reduction in a loan issued by the Hoskins Group to the Company. In December 2015, the Hoskins Group agreed to purchase 0.1 Series B Preferred Units for $10 at each closing of a lot to a third party in the Hamlets and Tuscany subdivisions. | ||
Number of preferred units value to purchase during the period | $ 10 | ||
Series B preferred units, shares | 14.7 | ||
Series B preferred equity | $ 1,470 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) $ in Thousands | Mar. 31, 2020USD ($) |
Daniel M. Wallach [Member] | |
Debt from related party current borrowing capacity | $ 1,250 |
Daniel M. Wallach Legacy [Member] | |
Debt from related party current borrowing capacity | 250 |
William Myrick [Member] | |
Debt from related party current borrowing capacity | $ 386 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
Letter of credit, amount outstanding | $ 15,259 | $ 16,662 |
Selected Quarterly Condensed _3
Selected Quarterly Condensed Consolidated Financial Data (Unaudited) - Schedule of Unaudited Quarterly Condensed Consolidated Financial Data (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | ||||||
Net interest income after loan loss provision | $ 955 | $ 1,117 | $ 1,115 | $ 818 | $ 1,079 | |
Non-interest income | 22 | 86 | 95 | |||
SG&A expense | 708 | 447 | 703 | 620 | 624 | |
Depreciation and amortization | 21 | 26 | 21 | 22 | 23 | |
Loss on sale of foreclosed assets | 35 | 274 | ||||
Impairment loss on foreclosed assets | 109 | 282 | 196 | 80 | $ 558 | |
Net income | $ 82 | $ 384 | $ 203 | $ 75 | $ 352 |
Non-Interest Expense Detail - S
Non-Interest Expense Detail - Schedule of Selling General and Administrative Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | |
Non-interest Expense Detail | |||||
Legal and accounting | $ 139 | $ 127 | |||
Salaries and related expenses | 278 | 362 | |||
Board related expenses | 25 | 16 | |||
Advertising | 21 | 19 | |||
Rent and utilities | 13 | 9 | |||
Loan and foreclosed asset expenses | 135 | 20 | |||
Travel | 59 | 32 | |||
Other | 38 | 39 | |||
Total SG&A | $ 708 | $ 447 | $ 703 | $ 620 | $ 624 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) $ in Thousands | May 07, 2020 | May 05, 2020 | Mar. 31, 2020 | Apr. 20, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Debt instrument, description | Opportunities for home sales for our borrowers in their markets are impacted to varying degrees. The Company is now funding new loans to borrowers in stronger markets for the purpose of developing presold homes, which loans have reduced (60%) loan-to-value ratios. The Company is also considering funding spec loans in those same markets on a case-by-case basis for loans with reduced loan-to-value ratios (50-60%). | ||||||
Notes payable | $ 21,070 | $ 20,308 | $ 18,831 | $ 17,348 | |||
Subsequent Event [Member] | |||||||
Debt instrument, description | The Company made the decision to reopen lending under normal, pre-COVID-19 terms for a limited group of certain of its customers. In addition, the decision was made to allow rehab loans to builders at terms that are less conservative than the 50% loan to value established in April 2020 but more conservative than terms prior to the arrival of COVID-19. | ||||||
Debt remaining borrowing capacity | $ 4,200 | ||||||
Subsequent Event [Member] | Paycheck Protection Program [Member] | |||||||
Debt instrument, description | No payments are due for the first 6 months, although interest accrues, and monthly payments, which include interest, are due over the next 18 months to pay off the loan. | ||||||
Notes payable | $ 362 | ||||||
Debt interest rate | 1.00% | ||||||
Debt instrument term | 24 months | ||||||
Subsequent Event [Member] | Unfunded [Member] | |||||||
Debt remaining borrowing capacity | $ 3,000 |