Cover
Cover | 6 Months Ended |
Jun. 30, 2019 | |
Cover [Abstract] | |
Document Type | S-11/A |
Amendment Flag | true |
Amendment Description | Post Effective Amendment #1 |
Document Period End Date | Jun. 30, 2019 |
Entity Registrant Name | AMERICAN CHURCH MORTGAGE CO |
Entity Central Index Key | 0000934543 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Balance Sheets
Balance Sheets - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | |||
Cash and cash equivalents | $ 1,141,413 | $ 2,183,441 | $ 502,490 |
Accounts receivable | 273,895 | 251,535 | 260,785 |
Interest receivable | 197,021 | 184,869 | 176,365 |
Investments | 2,410 | 2,410 | 2,410 |
Current maturities of mortgage loans receivable, net of allowance for loan losses of $78,608, 172,481 and $88,113 deferred origination fees of $60,583 ,$21,283 and $28,956 at June 30, 2019, December 31, 2018 and 2017, respectively | 987,922 | 2,241,557 | 1,373,463 |
Current maturities of bond portfolio, at fair value | 236,000 | 167,000 | 139,000 |
Prepaid expenses | 13,675 | 7,166 | 2,598 |
Total current assets | 2,852,336 | 5,037,978 | 2,457,111 |
Mortgage Loans Receivable, net of current maturities, allowance of $1,541,599, $1,499,522 and $1,340,042 deferred origination fess of $251,330, $250,630 and $256,578 at June 30, 2019, December 31, 2018 and 2017, respectively | 20,311,295 | 19,422,182 | 21,071,635 |
Bond Portfolio, at fair value, net of current maturities | 15,864,937 | 15,222,807 | 14,090,755 |
Real Estate Held for Sale | 327,925 | 340,659 | 225,872 |
Total Assets | 39,356,493 | 40,023,626 | 37,845,373 |
Current Liabilities | |||
Current maturities of secured investor certificates | 3,269,000 | 4,105,000 | 4,116,000 |
Accounts payable | 203,825 | 604,876 | 56,847 |
Line of credit | 2,000,000 | ||
Dividends payable | 100,667 | 142,613 | 117,446 |
Total current liabilities | 5,573,492 | 4,852,489 | 4,290,293 |
Secured Investor Certificates, Series B, net of current maturities | 6,649,000 | 8,880,000 | 8,825,000 |
Secured Investor Certificates, Series C, net of current maturities | 6,236,000 | 5,659,000 | 6,148,000 |
Secured Investor Certificates, Series D, net of current maturities | 7,864,000 | 7,956,000 | 8,234,000 |
Secured Investor Certificates, Series E | 3,344,000 | 2,786,000 | |
(Less) Deferred Offering Costs, net of accumulated amortization of $901,008, $1,059,702 and $1,222,243 at June 30, 2019, December 31, 2018 and 2017, respectively | 859,520 | 886,411 | 839,377 |
Total liabilities | 28,806,972 | 29,247,078 | 26,657,916 |
Stockholders' Equity | |||
Common stock, par value $.01 per share, Authorized, 30,000,000 shares, Issued and outstanding, 1,677,798 shares at March 31, 2019 and December 31, 2018, respectively | 16,778 | 16,778 | 16,778 |
Additional paid-in capital | 19,113,458 | 19,113,458 | 19,113,458 |
Accumulated deficit | (8,580,715) | (8,353,688) | (7,942,779) |
Total stockholders' equity | 10,549,521 | 10,776,548 | 11,187,457 |
Total Liabilities and Stockholders' Equity | $ 39,356,493 | $ 40,023,626 | $ 37,845,373 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Current Assets | |||
Current allowance for current maturities of mortgage loans recievable | $ (1,620,207) | $ (1,672,003) | $ (1,428,155) |
Current deferred origination fees for current mortgage loans recievable | 60,583 | 21,283 | 28,956 |
Allowance for mortgage loans recievable | 1,541,599 | 1,499,522 | 1,340,042 |
Deferred origination fees for mortgage loans recievable | 251,330 | 250,630 | 256,578 |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Accumulated amortization deferred offering costs | $ 901,808 | $ 1,059,702 | $ 1,222,243 |
Stockholders' Equity | |||
Common Stock, par value | $ 0.01 | $ 0.01 | $ 0.01 |
Common Stock, Authorized | 30,000,000 | 30,000,000 | 30,000,000 |
Common Stock, Issued | 1,677,798 | 1,677,798 | 1,677,798 |
Common Stock, Outstanding | 1,677,798 | 1,677,798 | 1,677,798 |
Statements of Operations
Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | ||||||
Interest and Other Income | $ 697,422 | $ 640,472 | $ 1,346,023 | $ 1,305,368 | $ 2,689,405 | $ 2,767,019 |
Interest Expense | 463,470 | 493,284 | 920,803 | 968,978 | 1,970,986 | 1,913,704 |
Net Interest Income | 233,952 | 147,188 | 425,220 | 336,390 | 718,419 | 853,315 |
Provision for losses on mortgage loans receivable | 30,463 | 47,500 | 48,741 | 156,734 | 254,310 | 116,172 |
Net Interest Income after Provision for Mortgage Losses | 203,489 | 99,688 | 376,479 | 179,656 | 464,109 | 737,143 |
Operating Expenses | ||||||
Other than temporary impairment on bond portfolio | 50,000 | 100,000 | ||||
Other operating expenses | 183,975 | 175,523 | 310,559 | 280,916 | 514,291 | 584,922 |
Operating Loss | 233,975 | 175,523 | 410,559 | 280,916 | 514,291 | 584,922 |
Other Income | ||||||
Net Loss Income | $ (30,486) | $ (75,835) | $ (34,080) | $ (101,260) | $ (50,182) | $ 152,221 |
Basic and Diluted (Loss) Income Per Share | $ (.02) | $ (0.05) | $ (0.02) | $ (0.06) | $ (.03) | $ .09 |
Dividends Declared Per Share | $ 0.06 | $ 0.02 | $ 0.12 | $ 0.09 | $ .22 | $ .28 |
Weighted Average Common Shares Outstanding - Basic and Diluted | 1,677,798 | 1,677,798 | 1,677,798 | 1,677,798 | 1,677,798 | 1,677,798 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash Flows from Operating Activities | ||||
Net (loss) | $ (34,080) | $ (101,260) | $ (50,182) | $ 152,221 |
Adjustments to reconcile net (loss) income to net cash from operating activites: | ||||
Net loss on sales and impairment on real estate held for sale | 12,734 | (12,734) | 66,971 | |
Provision for losses on mortgage loans receivable | 48,741 | 156,734 | 254,310 | 116,172 |
Other than temporary investements on bond portfolio | 100,000 | |||
Accounts receivable | (22,360) | 5,385 | 9,250 | (41,433) |
Interest receivable | (12,152) | (2,380) | (8,504) | (453) |
Prepaid expenses | (6,510) | (18,662) | (4,568) | (1,109) |
Accounts payable | (400,855) | 58,306 | 548,029 | 19,896 |
Net cash (used for) by provided by operating activities | (220,258) | 155,393 | 832,499 | 420,102 |
Cash Flows from Investing Activities | ||||
Investment in mortgage loans | (2,048,933) | (2,209,583) | (3,129,367) | |
Collections of mortgage loans | 2,425,251 | 1,423,390 | 2,648,201 | 3,702,860 |
Investment in bonds | (895,000) | (694,000) | (1,883,052) | (2,964,000) |
Proceeds from bonds | 83,870 | 87,000 | 723,000 | 216,861 |
Proceeds from real estate held for sale | (100,537) | 48,029 | ||
Net cash (used for) provided by investing activities | (535,349) | 816,390 | (721,434) | (2,125,617) |
Cash Flows from Financing Activities | ||||
Proceeds from the sale of secured investor certificates | 558,000 | 2,020,000 | 2,786,000 | 930,000 |
Payments on secured investor certificate maturities | (2,582,000) | (237,000) | (723,000) | (1,531,000) |
Payments for deferred costs | (27,528) | (92,697) | (157,554) | (120,984) |
Net change in short term borrowings | 2,000,000 | |||
Dividends paid | (234,893) | (234,892) | (335,560) | (453,005) |
Net cash (used for) provided by financing activities | (286,421) | 1,455,411 | 1,569,886 | (1,174,989) |
Net (Decrease) Increase in Cash and Cash Equivalents | (1,042,028) | 2,427,194 | 1,680,951 | (2,880,504) |
Cash and Cash Equivalents - Beginning Period | 2,183,441 | 502,490 | 502,490 | 3,382,994 |
Cash and Equivalents - Ending Period | $ 1,141,413 | $ 2,929,684 | $ 2,183,441 | $ 502,490 |
Statements of Cash Flows (Paren
Statements of Cash Flows (Parenthetical) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Cash Flows [Abstract] | ||||
Dividends payable | $ 100,667 | $ 33,556 | $ 142,613 | $ 117,446 |
Loan origination fees | 24,200 | 40,712 | ||
Interest paid | 920,803 | 968,978 | 1,384,399 | 1,792,902 |
Loan transferred to real estate held for sale | $ 112,515 |
Shareholders Equity
Shareholders Equity - USD ($) | Common Stock | Additional Paid-In Capital | Retained Earnings / Accumulated Deficit |
Beginning balance, shares at Dec. 31, 2016 | 1,677,798 | ||
Beginning balance, value at Dec. 31, 2016 | $ 16,778 | $ 19,113,458 | $ (7,625,217) |
Net Income | $ 152,221 | ||
Dividends declared | $ (469,783) | ||
Ending balance, shares at Dec. 31, 2017 | 1,677,798 | ||
Ending balance, value at Dec. 31, 2017 | $ 16,778 | 19,113,458 | $ (7,942,779) |
Net Income | $ (50,182) | ||
Dividends declared | $ (360,727) | ||
Ending balance, shares at Dec. 31, 2018 | 1,677,798 | ||
Ending balance, value at Dec. 31, 2018 | $ 16,778 | $ 19,113,458 | $ (8,353,688) |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2019 | |
Notes to Financial Statements | |
Basis of Presentation | 1. BASIS OF PRESENTATION The accompanying unaudited financial statements of American Church Mortgage Company, (the "Company") were prepared in accordance with instructions for Form 10-Q and Regulation S-X and do not include information or footnotes necessary for a complete presentation of financial condition, results of operations, changes in equity and cash flows in conformity with accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments necessary for a fair presentation of the financial statements have been included. The results of operations for the six month period ended June 30, 2019 are not necessarily indicative of the results which may be expected for the entire year. These statements should be read in conjunction with the Financial Statements and notes thereto for the year ended December 31, 2018 filed with the U.S. Securities and Exchange Commission ("SEC") as part of American Church Mortgage Company's Annual Report on Form 10-K for the year ended December 31, 2018. |
Summary Of Significant Accounti
Summary Of Significant Accounting Policies | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Notes to Financial Statements | ||
Summary Of Significatn Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business American Church Mortgage Company, a Minnesota corporation, was incorporated on May 27, 1994. The Company is engaged primarily in the business of making mortgage loans to churches and other nonprofit religious organizations throughout the United States, on terms established for individual organizations. Accounting Estimates Management uses estimates and assumptions in preparing these financial statements in accordance with accounting principles generally accepted in the United States of America. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates. The most sensitive estimates relate to the realizability of the mortgage loans receivable, the valuation of the bond portfolio and the valuation of real estate held for sale. It is at least reasonably possible that these estimates could change in the near term and that the effect of the change, if any, may be material to the financial statements. Concentration of Credit Risk The Company's loans have been granted to churches and other non-profit religious organizations. The ability of the Company’s debtors to honor their contracts is dependent on member contributions and the involvement in the church or organization of its senior pastor. Cash and Cash Equivalents The Company considers all highly liquid debt instruments purchased with maturities of three months or less to be cash equivalents. The Company maintains accounts primarily at two financial institutions. At times throughout the year, the Company’s cash and equivalents balances may exceed amounts insured by the Federal Deposit Insurance Corporation. Cash in money market funds is not federally insured. The Company had $15,067 and $974,346 in a money market fund account at June 30, 2019 and December 31, 2018, respectively. The Company has not experienced any losses in such accounts. Bond Portfolio The Company accounts for the bond portfolio under the Accounting Standards Codification (ASC) 320, Investments-Debt and Equity Securities. The Company classifies the bond portfolio as “available-for sale” and measures the portfolio at fair value. While the bonds are generally held until contractual maturity, the Company classifies them as available for sale as the bonds may be used to repay secured investor certificates or provide additional liquidity or working capital in the short term. The Company has classified $236,000 and $167,000 in bonds as current assets as of June 30, 2019 and December 31, 2018, respectively, based on management’s estimates for liquidity requirements and contractual maturities of certain bonds maturing in 2020 and 2019, respectively. Allowance for Loan Losses on Mortgage Loans Receivable The Company records mortgage loans receivable at estimated net realizable value, which is the unpaid principal balances of the mortgage loans receivable, less the allowance for loan losses on mortgage loans receivable and less deferred loan origination fees. The Company’s loan policy provides an allowance for estimated uncollectible loans based on an evaluation of the current status of the loan portfolio with application of reserve percentages to specific loans based on payment status. This policy reserves for principal amounts outstanding on a specific loan if cumulative interruptions occur in the normal payment schedule of the loan, therefore, the Company recognizes a provision for losses and an allowance for the outstanding principal amount of the loan in the Company’s portfolio if the amount is in doubt of collection. Additionally, no interest income is recognized on impaired loans that are declared to be in default and are in the foreclosure process. At June 30, 2019, the Company reserved $1,620,207 for sixteen mortgage loans. Ten of these loans are three or more mortgage payments in arrears of which three are declared to be in default and one is in the foreclosure process. The total principal amount of these sixteen loans totalled approximately $6,793,000 at June 30, 2019. At December 31, 2018, the Company reserved $1,672,003 for seventeen mortgage loans. Eleven of these loans are three or more mortgage payments in arrears of which three are declared to be in default and two are in the foreclosure process. The total principal amount of these seventeen loans totalled approximately $6,893 ,000 at December 31, 2018. A summary of transactions in the allowance for mortgage loans for the period ended June 30, 2019 is as follows: Balance at December 31, 2018 $ 1,672,003 Provision for additional losses 48,741 Proceeds from sale of property held for sale (100,537 ) Balance at June 30, 2019 $ 1,620,207 The total impaired loans, which are loans that are in the foreclosure process or are declared to be in default, were approximately $1,369,000 and $1,498,000 at June 30, 2019 and December 31, 2018, respectively, which the Company believes are adequately secured by the underlying collateral and the allowance for mortgage loans. Approximately $757,000 of the Company’s allowance for mortgage loans was allocated to these loans at June 30, 2019. Approximately $833,000 of the Company’s allowance for mortgage loans was allocated to impaired loans at December 31, 2018. The Company will declare a loan to be in default and will place the loan on non-accrual status when the following thresholds have been met: (i) the borrower has missed three consecutive mortgage payments; (ii) the borrower has not communicated to the Company any legitimate reason for delinquency in its payments to the Company and has not arranged for the re-continuance of payments; (iii) lines of communication to the borrower have broken down such that any reasonable prospect of rehabilitating the loan and return of regular payments is gone. The Company’s policies on payments received and interest accrued on non-accrual loans are as follows: (i) The Company will accept payments on loans that are currently on non-accrual status when a borrower has communicated to us that they intend to meet their mortgage obligations. The accrual of interest on a loan is discontinued when the loan becomes 90 days delinquent or whenever management believes the borrower will be unable to make payments as they become due. When loans are placed on nonaccrual status or charged off, all unpaid accrued interest is reversed against interest income. The interest on these loans is subsequently accounted for on the cash basis or using the cost-recovery method until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. No interest income was recognized on non-accrual loans as of June 30, 2019. When a loan is declared in default according to the Company’s policy or deemed to be doubtful of collection, the loan committee of the Advisor to the Company will direct the staff to charge-off the uncollectable receivables. Loans totaling approximately $2,891,000 and $2,853,000 exceeded 90 days past due but continued to accrue interest as of June 30, 2019 and December 31, 2018, respectively. The Company believes that continued interest accruals are appropriate because the loans are well secured, not deemed to be in technical default and the Company is actively pursuing collection of past due payments. Real Estate Held for Sale The Company records real estate held for sale at the estimated fair value, which is net of the expected expenses related to the sale of the real estate. The fair value of our real estate held for sale, which represents the carrying value, totaled $327,925 and $340,659 as of June 30, 2019 and December 31, 2018, respectively. Carrying Value of Long-Lived Assets The Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that the carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed of significantly before the end of the estimated useful life. Recoverability is assessed based on the carrying amount of the asset compared to the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is deemed not recoverable and exceeds fair value as determined through various valuation techniques including, but not limited to, discounted cash flow models, quoted market values, and third party independent appraisals. Revenue Recognition Interest income on mortgage loans receivable and the bond portfolio is recognized as earned per the terms of the specific asset. Other income included with interest represents cash received for loan origination fees, which are recognized over the life of the loan as an adjustment to the yield on the loan. As of January 1, 2018, the Company adopted ASU 2014-09 Revenue from Contracts with Customers - Topic 606 The Company generally fully satisfies its performance obligations on its contracts with customers as services are rendered and the transaction prices are typically fixed; charged either on a periodic basis or based on activity. Because performance obligations are satisfied as services are rendered and the transaction prices are fixed, there is little judgment involved in applying Topic 606 that significantly affects the determination of the amount and timing of revenue from contracts with customers. The main types of revenue contracts included in non-interest income within the consolidated statements of operations are as follows: Gain Losses on Real Estate Held For Sale The Company records a gain or loss from real estate held for sale when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. When the Company finances real estate held for sale to the buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, real estate held for sale is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. In determining the gain or loss on the sale, the Company adjusts the transaction prices and related gain (loss) on sale if a significant financing component is present. Deferred Financing Costs The Company defers the costs related to obtaining financing. These costs are amortized over the life of the financing using the straight line method, which approximates the effective interest method. Income (Loss) Per Common Share No adjustments were made to income (loss) for the purpose of calculating earnings per share, as there were no potential dilutive shares outstanding. Recent Accounting Pronouncements In 2016 the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 is intended to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit. For public entities, ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company has not yet fully evaluated the potential effects of adopting ASU 2016-13 on the Company’s results of operations, financial position or cash flows. Recent Accounting Pronouncements – Adopted In the first quarter of 2018, the Company adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). Subsequent Events The Company has evaluated events and transactions through the date the financial statements were available to be issued. No material events or transactions occurred in the time period referenced above requiring adjustment to or disclosure in the June 30, 2019 financial statements. | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business American Church Mortgage Company, a Minnesota corporation, was incorporated on May 27, 1994. The Company was organized to engage primarily in the business of making mortgage loans to churches and other nonprofit religious organizations throughout the United States, on terms established for individual organizations. Accounting Estimates Management uses estimates and assumptions in preparing these financial statements in accordance with accounting principles generally accepted in the United States of America. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates. The most sensitive estimates relate to the realizability of the mortgage loans receivable, the valuation of the bond portfolio and the valuation of real estate held for sale. It is at least reasonably possible that these estimates could change in the near term and that the effect of the change, if any, may be material to the financial statements. Concentration of Credit Risk The Company's loans have been granted to churches and other non-profit religious organizations. The ability of the Company’s debtors to honor their contracts is dependent on member contributions and the involvement in the church or organization of its senior pastor. Cash and Cash Equivalents The Company considers all highly liquid debt instruments purchased with maturities of three months or less to be cash equivalents. The Company maintains accounts primarily at two financial institutions. At times throughout the year, the Company’s cash and equivalents balances may exceed amounts insured by the Federal Deposit Insurance Corporation. Cash in money market funds is not federally insured. The Company had $974,346 and $15,428 in a money market fund account at December 31, 2018 and 2017, respectively. The Company has not experienced any losses in such accounts. Bond Portfolio The Company accounts for the bond portfolio under the Accounting Standards Codification (ASC) 320, Investments-Debt and Equity Securities. The Company classifies the bond portfolio as “available-for sale” and measures the portfolio at fair value. While the bonds are generally held until contractual maturity, the Company classifies them as available for sale as the bonds may be used to repay secured investor certificates or provide additional liquidity or working capital in the short term. The Company has classified $167,000 and $139,000 in bonds as current assets as of December 31, 2018 and 2017, respectively, based on management’s estimates for liquidity requirements and contractual maturities of certain bonds maturing in 2019 and 2018, respectively. Allowance for Loan Losses on Mortgage Loans Receivable The Company records mortgage loans receivable at estimated net realizable value, which is the unpaid principal balances of the mortgage loans receivable, less the allowance for loan losses on mortgage loans receivable and less deferred loan origination fees. The Company’s loan policy provides an allowance for estimated uncollectible loans based on an evaluation of the current status of the loan portfolio with application of reserve percentages to specific loans based on payment status. This policy reserves for principal amounts outstanding on a specific loan if cumulative interruptions occur in the normal payment schedule of the loan, therefore, the Company recognizes a provision for losses and an allowance for the outstanding principal amount of the loan in the Company’s portfolio if the amount is in doubt of collection. Additionally, no interest income is recognized on impaired loans that are declared to be in default and are in the foreclosure process. At December 31, 2018, the Company reserved $1,672,003 for seventeen mortgage loans. Eleven of these loans are three or more mortgage payments in arrears of which three are declared to be in default and two are in the foreclosure process. The total principal amount of these seventeen loans totals approximately $6,893 A summary of transactions in the allowance for mortgage loans for the years ended December 31 is as follows: 2018 2017 Balance at beginning of year $ 1,428,155 $ 1,311,983 Provision for losses on mortgage loans receivable 254,310 116,172 Reclassified to real estate held for sale (10,462 ) — Charge-offs — — Balance at end of year $ 1,672,003 $ 1,428,155 The total impaired loans, which are loans that are in the foreclosure process or are declared to be in default, were approximately $1,498,000 and $2,044,000 at December 31, 2018 and 2017, respectively, which the Company believes are adequately secured by the underlying collateral and the allowance for mortgage loans. Approximately $833,000 of the Company’s allowance for mortgage loans was allocated to these loans at December 31, 2018. Approximately $723,000 of the Company’s allowance for mortgage loans was allocated to impaired loans at December 31, 2017. The Company will declare a loan to be in default and will place the loan on non-accrual status when the following thresholds have been met: (i) the borrower has missed three consecutive mortgage payments; (ii) the borrower has not communicated to the Company any legitimate reason for delinquency in its payments to the Company and has not arranged for the re-continuance of payments; (iii) lines of communication to the borrower have broken down such that any reasonable prospect of rehabilitating the loan and return of regular payments is gone. The Company’s policies on payments received and interest accrued on non-accrual loans are as follows: (i) The Company will accept payments on loans that are currently on non-accrual status when a borrower has communicated to us that they intend to meet their mortgage obligations. A payment made on a non-accrual loan is considered a good faith deposit as to the intent to resume their mortgage payment obligation. This good faith deposit is credited back to interest first then principal as stated in the mortgage loan documentation. (ii) A letter outlining the re-payment terms or the restructure terms (if any) of the loan is provided to the borrower. This letter will be signed by the Senior Pastor and either officers or board members of the borrower. This letter resumes the obligation to make payments on non-accrual loans. (iii) The borrower must meet all its payment obligations for the next 120 days without interruption in order to be removed from non-accrual status. No interest income was recognized on non-accrual loans for the years ended December 31, 2018 and 2017. When a loan is declared in default according to the Company’s policy or deemed to be doubtful of collection, the loan committee of the Advisor to the Company will direct the staff to charge-off the uncollectable receivables. Loans totaling approximately $2,853,000 and $3,364,000 exceeded 90 days past due but continued to accrue interest as of December 31, 2018 and 2017, respectively. The Company believes that continued interest accruals are appropriate because the loans are well secured, not deemed to be in technical default and the Company is actively pursuing collection of past due payments. Real Estate Held for Sale As of December 31, 2018, the Company had acquired one property located in Bethel, Ohio through the foreclosure process with an outstanding balance of $112,515. The Company is preparing to list the property for sale through a local realtor. As of December 31, 2018, the Company has one property located in Pine Bluff, Arkansas acquired via deed in lieu of foreclosure with an outstanding balance totaling balance totaling $225,872. The Church is still occupying this property and paying rent while trying to either sell the building or obtain refinancing. The Company records real estate held for sale at the estimated fair value, which is net of the expected expenses related to the sale of the real estate. The fair value of our real estate held for sale, which represents the carrying value, is $340,659 as of December 31, 2018. The Company sold one property and disposed of a second property during the year ended December 31, 2017. The first property was sold to an unrelated third party for approximately $48,000. The second property was disposed by way of a “Quit-Claim Deed” to an unrelated third party. The disposed property had no carrying value. The Company realized an additional loss of approximately $67,000 on property that was sold as of December 31, 2017. Carrying Value of Long-Lived Assets The Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that the carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed of significantly before the end of the estimated useful life. Recoverability is assessed based on the carrying amount of the asset compared to the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is deemed not recoverable and exceeds fair value as determined through various valuation techniques including, but not limited to, discounted cash flow models, quoted market values, and third party independent appraisals. Revenue Recognition Interest income on mortgage loans receivable and the bond portfolio is recognized as earned per the terms of the specific asset. Other income included with interest represents cash received for loan origination fees, which are recognized over the life of the loan as an adjustment to the yield on the loan. As of January 1, 2018, the Company adopted ASU 2014-09 Revenue from Contracts with Customers - Topic 606 The Company generally fully satisfies its performance obligations on its contracts with customers as services are rendered and the transaction prices are typically fixed; charged either on a periodic basis or based on activity. Because performance obligations are satisfied as services are rendered and the transaction prices are fixed, there is little judgment involved in applying Topic 606 that significantly affects the determination of the amount and timing of revenue from contracts with customers. The main types of revenue contracts included in non-interest income within the consolidated statements of operations are as follows: Gain Losses on Sale of OREO The Company records a gain or loss from the sale of OREO when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. When the Company finances the sale of OREO to the buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the OREO asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. In determine the gain or loss on the sale, the Company adjusts the transaction prices and related gain (loss) on sale if a significant financing component is present. Deferred Financing Costs The Company defers the costs related to obtaining financing. These costs are amortized over the life of the financing using the straight line method, which approximates the effective interest method. Income (Loss) Per Common Share No adjustments were made to income (loss) for the purpose of calculating earnings per share, as there were no potential dilutive shares outstanding. Recent Accounting Pronouncements In June, 2016 the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 is intended to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit. For public entities, ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company has not yet fully evaluated the potential effects of adopting ASU 2016-13 on the Company’s results of operations, financial position or cash flows. Recent Accounting Pronouncements – Adopted In the first quarter of 2018, the Company adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). Income Taxes The Company elected to be taxed as a Real Estate Investment Trust (REIT). Accordingly, the Company is not subject to Federal income tax to the extent of distributions to its shareholders if the Company meets all the requirements under the REIT provisions of the Internal Revenue Code. The Company evaluated its recognition of income tax benefits using a two-step approach to recognizing and measuring tax benefits when realization of the benefits is uncertain. The first step is to determine whether the benefit meets the more-likely-than-not condition for recognition and the second step is to determine the amount to be recognized based on the cumulative probability that exceeds 50%. Primarily due to the Company’s tax status as a REIT, the Company does not have any significant tax uncertainties that would require recognition or disclosure. Subsequent Events The Company has evaluated events and transactions through the date the financial statements were available to be issued. No material events or transactions occurred in the time period referenced above requiring adjustment to or disclosure in the December 31, 2018 financial statements. |
Fair Value Measurement
Fair Value Measurement | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | ||
Fair Value Measurement | 3. FAIR VALUE MEASUREMENT The Company measures certain financial instruments at fair value in our balance sheets. The fair value of these instruments is based on valuations that include inputs that can be classified within one of the three levels of a hierarchy. Level 1 inputs include quoted market prices in an active market for identical assets or liabilities. Level 2 inputs are market data, other than Level 1, that are observable either directly or indirectly. Level 2 inputs include quoted market prices for similar assets or liabilities, quoted market prices in an inactive market, and other observable information that can be corroborated by market data. Level 3 inputs are unobservable and corroborated by little or no market data. Except for the bond portfolio, which is required by authoritative accounting guidance to be recorded at fair value in our balance sheets, the Company elected not to record any other financial assets or liabilities at fair value on a recurring basis. We recorded an aggregate other than temporary impairment for losses on our Agape bonds (Note 4), which totaled $558,000 and $458,000 for the periods ended June 30, 2019 and December 31, 2018, respectively. The following table summarizes the Company’s financial instruments that were measured at fair value on a recurring basis: Fair Value Measurement June 30, 2019 Fair Value Level 3 Bond portfolio $ 16,100,937 $ 16,100,937 Fair Value Measurement December 31, 2018 Fair Value Level 3 Bond portfolio $ 15,389,807 $ 15,389,807 We determine the fair value of the bond portfolio shown in the table above by comparing it with similar instruments in inactive markets. The analysis reflects the contractual terms of the bonds, which are callable at par by the issuer at any time, and the anticipated cash flows of the bonds and uses observable and unobservable market-based inputs. Unobservable inputs include our internal credit rating and selection of similar bonds for valuation. The change in Level 3 assets measured at fair value on a recurring basis is summarized as follows: Bond Portfolio Balance at December 31, 2018 $ 15,389,807 Additional losses on bond portfolio (100,000 ) Purchases 895,000 Proceeds (83,870 ) Balance at June 30, 2019 $ 16,100,937 Real estate held for sale and impaired loans are recorded at fair value on a nonrecurring basis. The fair value of real estate held for sale was based upon the listed sales price less expected selling costs, which is a Level 3 input. The resulting impairment charges were $0 and $114,787 for the periods ended June 30, 2019 and December 31, 2018, respectively. The following table summarizes the Company’s financial instruments that were measured at fair value on a nonrecurring basis: June 30, 2019 Level 1 Level 2 Level 3 Fair Value at June 30, Impaired Loans $ — $ — $ 611,390 $ 611,390 Real estate held for resale — — 327,925 327,925 Totals $ — $ — $ 939,315 $ 939,315 December 31, 2018 Level 1 Level 2 Level 3 Fair Value at December 31, Impaired Loans $ — $ — $ 665,267 $ 665,267 Real estate held for resale — — 340,659 340,659 Totals $ — $ — $ 1,005,926 $ 1,005,926 The change in Level 3 assets measured at fair value on a nonrecurring basis is summarized as follows: Impaired Loans Real Estate Held for Sale Balance at December 31, 2018 $ 665,267 $ 340,659 Dispositions/Proceeds (28,891 ) — Impairment (24,986 ) (12,734 ) Balance at June 30, 2019 $ 611,390 $ 327,925 The fair value of impaired loans referenced above was determined by obtaining independent third party appraisals and/or internally developed collateral valuations to support the Company’s estimates and judgments in determining the fair value of the underlying collateral supporting impaired loans. The fair value of real estate held for resale referenced above was determined by obtaining market price valuations from independent third parties wherever such quotes were available for the other collateral owned. The Company utilized independent third party appraisal to support the Company’s estimates and judgments in determining fair value for other real estate owned. | 2. FAIR VALUE MEASUREMENT The Company measures certain financial instruments at fair value in our balance sheets. The fair value of these instruments is based on valuations that include inputs that can be classified within one of the three levels of a hierarchy. Level 1 inputs include quoted market prices in an active market for identical assets or liabilities. Level 2 inputs are market data, other than Level 1, that are observable either directly or indirectly. Level 2 inputs include quoted market prices for similar assets or liabilities, quoted market prices in an inactive market, and other observable information that can be corroborated by market data. Level 3 inputs are unobservable and corroborated by little or no market data. Except for the bond portfolio, which is required by authoritative accounting guidance to be recorded at fair value in our balance sheets, the Company elected not to record any other financial assets or liabilities at fair value on a recurring basis. We recorded an aggregate other than temporary impairment for losses on our Agape bonds (Note 3), which totaled $458,000 for both the years ended December 31, 2018 and 2017. The following table summarizes the Company’s financial instruments that were measured at fair value on a recurring basis: Fair Value Measurement December 31, 2018 Fair Value Level 3 Bond portfolio $ 15,389,807 $ 15,389,807 Fair Value Measurement December 31, 2017 Fair Value Level 3 Bond portfolio $ 14,229,755 $ 14,229,755 We determine the fair value of the bond portfolio shown in the table above by comparing it with similar instruments in inactive markets. The analysis reflects the contractual terms of the bonds, which are callable at par by the issuer at any time, and the anticipated cash flows of the bonds and uses observable and unobservable market-based inputs. Unobservable inputs include our internal credit rating and selection of similar bonds for valuation. The change in Level 3 assets measured at fair value on a recurring basis is summarized as follows: 2018 2017 Balance at beginning of year $14,229,755 $11,482,616 Purchases 1,883,052 2,964,000 Proceeds (723,000 (216,861 Balance at end of year $15,389,807 $14,229,755 Real estate held for sale and impaired loans are recorded at fair value on a nonrecurring basis. The fair value of real estate held for sale was based upon the listed sales price less expected selling costs, which is a Level 3 input. The resulting impairment charges were $114,787 and $0 for the years ended December 31, 2018 and 2017, respectively. The following table summarizes the Company’s financial instruments that were measured at fair value on a nonrecurring basis: December 31, 2018 Level 1 Level 2 Level 3 Fair Value at December 31, Impaired Loans $ — $ — $ 665,267 $ 665,267 Real estate held for resale — — 340,659 340,659 $ — $ — $ 1,005,926 $ 1,005,926 December 31, 2017 Level 1 Level 2 Level 3 Fair Value at December 31, Impaired Loans $ — $ — $ 1,321,500 $ 1,321,500 Real estate held for resale — — 225,872 225,872 $ — $ — $ 1,547,372 $ 1,547,372 The change in Level 3 assets measured at fair value on a nonrecurring basis is summarized as follows: Impaired Loans Real Estate Held for Sale Balance at December 31, 2016 $1,189,873 $340,872 Additions/Acquisitions 197,034 - Dispositions/Proceeds (5,465) (115,000) Impairment ( 59,942 - Balance at December 31, 2017 $ 1,321,500 $ 225,872 Additions/Acquisitions - 125,249 Dispositions/Proceeds (546,406) - Impairment (109,827 (10,462) Balance at December 31, 2018 $ 665,267 $ 340,659 The fair value of impaired loans referenced above was determine by obtaining independent third party appraisals and/or internally developed collateral valuations to support the Company’s estimates and judgements in determining the fair value of the underlying collateral supporting impaired loans. The fair value of real estate held for resale referenced above was determined by obtaining market price valuations from independent third parties wherever such quotes were available for the other collateral owned. The company utilized independent third party appraisal to support the Company’s estimates and judgements in determining fair value for other real estate owned. |
Mortgage Loans Receivable and B
Mortgage Loans Receivable and Bond Portfolio | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Notes to Financial Statements | ||
Mortgage Loans Receivable and Bond Portfolio | 4. MORTGAGE LOANS RECEIVABLE AND BOND PORTFOLIO At June 30, 2019, the Company had first mortgage loans receivable totaling $23,231,337. The loans bear interest ranging from 0% to 10.25% with a weighted average of approximately 8.09% at June 30, 2019. At December 31, 2018, the Company had first mortgage loans receivable totaling $23,607,655. The loans bear interest ranging from 0% to 10.25% with a weighted average of approximately 8.15% at December 31, 2018. The Company has a portfolio of secured church bonds at June 30, 2019 and December 31, 2018, which are carried at fair value. The bonds pay either semi-annual or quarterly interest ranging from 3.75% to 9.75%. The aggregate par value of secured church bonds equaled approximately $16,658,937 at June 30, 2019 with a weighted average interest rate of 6.87% and approximately $15,847,807 at December 31, 2018 with a weighted average interest rate of 6.80%. These bonds are due at various maturity dates through February 2047. The Company has recorded an aggregate other than temporary impairment of $558,000 and $458,000 for June 30, 2019 and December 31, 2018, respectively for the First Mortgage Bonds issued by Agape Assembly Baptist Church. This bond series in the aggregate constitute approximately 6.84% and 6.47% of the bond portfolio at June 30, 2019 and December 31, 2018, respectively. The Company had maturities and redemptions of bonds of approximately $84,000 for the six months ended June 30, 2019 and $723,000 for the year ended December 31, 2018, respectively. The contractual maturity schedule for mortgage loans receivable and the bond portfolio as of June 30, 2019, is as follows: Mortgage Loans Bond Portfolio July 1, 2019 through June 30, 2020 $ 1,127,113 $ 236,000 July 1, 2020 through December 31, 2020 2,586,213 103,000 2021 692,348 270,000 2022 1,491,046 192,000 2023 852,674 295,000 Thereafter 16,481,943 15,562,937 23,231,337 16,658,937 Less loan loss and other than temporary impairment on bonds allowance (1,620,207) (558,000) Less deferred origination fees (311,913 ___-____ Totals $ 21,299,217 $ 16,100,937 The Company currently owns $529,000 First Mortgage Bonds and $497,000 Second Mortgage Bonds issued by Agape Assembly Baptist Church located in Orlando, Florida. The total principal amount of First Mortgage Bonds issued by Agape is $7,200,000, and the total principal amount of Second Mortgage Bonds issued is $715,000. Agape defaulted on its payment obligations to bondholders in September 2010. The church subsequently commenced a Chapter 11 bankruptcy reorganization proceeding regarding the property that secures the First Mortgage Bonds in December 2010. In October 2014, the bondholders of Agape agreed to a modification in the terms of their bonds which resulted in the temporary resumption of both principal and interest payments to both the first and second mortgage bond holders. Both the First Mortgage Bonds and Second Mortgage Bonds were modified to a fully amortized fixed rate, quarterly interest payment of 6.25% with a new maturity date of September 2037 for all the issued and outstanding bonds. The Company, along with all other bondholders, has a superior lien over all other creditors. The Church subsequently defaulted on their modification agreement in 2016 and no interest payments were made to bondholders during the period ended June 30, 2019. However, the trustee made a distribution to bondholders during 2017 of $18.75 per $1,000 bond as a repayment of principal only, effectively reducing the outstanding balance of each $1,000 bond to approximately $826. The Company has an aggregate other than temporary impairment of $558,000 and $458,000 for the First and Second Mortgage Bonds at June 30, 2019 and December 31, 2018, respectively, which effectively reduces the bonds to the fair value amount management believes will be recovered. The Company restructured two mortgage loans during the year ended December 31, 2018. The first restructured loan was a $669,544 first mortgage loan located in Indianapolis, Indiana. The Church was unable to meet its monthly debt obligations. The Company reduced the Church’s monthly mortgage obligation to interest only payments for a period of three years. After the initial three-year period, the Church will resume its regular monthly mortgage payments. The Church accepted the restructured loan terms. The modification had no effect on the Company’s financial statements. The second restructured loan was a $470,000 first mortgage loan located in Cincinnati, Ohio. The Church was unable to meet its monthly debt obligations. The Company reduced the Church’s monthly mortgage obligation to interest only for a period of three years which included a reduction in their interest rate. After the initial three-year term, the rate of interest will increase for an additional three-year period. At the end of the sixth year, the Church will resume its regular monthly mortgage payments at the original rate of interest. The Church accepted the restructured loan terms. The modification had no effect on the Company’s financial statements. The Company did not restructure any loans during the six month period ended June 30, 2019. A summary of loans re-structured or modified for the sixth month period ended June 30, 2019 and the year ended December 31, 2018 are shown below. All of the loans shown are currently performing under the terms of the modifications for their mortgage obligations. June 30, 2019 Type of Loan Number of Loans Original Principal Balance Original Average Interest Rate Unpaid Principal Balance Modified Average Interest Rate First Mortgage Loan 7 $4,415,544 8.014% $3,434,328 6.03% December 31, 2018 Type of Loan Number of Loans Original Principal Balance Original Average Interest Rate Unpaid Principal Balance Modified Average Interest Rate First Mortgage Loan 7 $4,415,544 8.014% $3,838,819 6.03% | 3. MORTGAGE LOANS RECEIVABLE AND BOND PORTFOLIO At December 31, 2018, the Company had first mortgage loans receivable totaling $23,607,655. The loans bear interest ranging from 0% to 10.25% with a weighted average of approximately 8.15% at December 31, 2018. The Company had first mortgage loans receivable totaling $24,158,787 that bore interest ranging from 0% to 10.25% with a weighted average of approximately 8.19% at December 31, 2017. The Company has a portfolio of secured church bonds at December 31, 2018 and December 31, 2017, which are carried at fair value. The bonds pay either semi-annual or quarterly interest ranging from 3.50% to 9.75%. The aggregate par value of secured church bonds equaled approximately $15,847,807 at December 31, 2018 with a weighted average interest rate of 6.80% and approximately $14,687,755 at December 31, 2017 with a weighted average interest rate of 6.82%. These bonds are due at various maturity dates through May 2046. The Company has recorded an aggregate other than temporary impairment of $458,000 for both December 31, 2018 and 2017 for the First Mortgage Bonds issued by Agape Assembly Baptist Church. This bond series in the aggregate constitute approximately 6.47% and 6.98% of the bond portfolio at December 31, 2018 and 2017, respectively. The Company had maturities and redemptions of bonds of approximately $723,000 and $217,000 in 2018 and 2017, respectively. The contractual maturity schedule for mortgage loans receivable and the bond portfolio as of December 31, 2018, is as follows: Mortgage Loans Bond Portfolio 2019 $ 2,435,321 $ 167,000 2020 963,625 240,000 2021 756,395 266,000 2022 1,554,461 188,000 2023 924,931 289,000 Thereafter 16,972,922 14,697,807 23,607,655 15,847,807 Less loan loss and other than temporary impairment on bonds allowance (1,672,003) (458,000) Less deferred origination income (271,913 ___-____ Totals $ 21,663,739 $ 15,389,807 The Company currently owns $529,000 First Mortgage Bonds and $497,000 Second Mortgage Bonds issued by Agape Assembly Baptist Church located in Orlando, Florida. The total principal amount of First Mortgage Bonds issued by Agape is $7,200,000, and the total principal amount of Second Mortgage Bonds issued is $715,000. Agape defaulted on its payment obligations to bondholders in September 2010. The church subsequently commenced a Chapter 11 bankruptcy reorganization proceeding regarding the property that secures the First Mortgage Bonds in December 2010. In October 2014, a minimum of 80% of the bondholders of Agape agreed to a modification in the terms of their bonds which resulted in the temporary resumption of both principal and interest payments to both the first and second mortgage bond holders. Both the First Mortgage Bonds and Second Mortgage Bonds were modified to a fully amortized fixed rate, quarterly interest payment of 6.25% with a new maturity date of September 2037 for all the issued and outstanding bonds. The Company, along with all other bondholders, has a superior lien over all other creditors. The Church subsequently defaulted on their modification agreement in 2016 and no interest payments were made to bondholders during the year ended December 31, 2018. However, the trustee made a distribution to bondholders during 2017 of $18.75 per $1,000 bond as a repayment of principal only, effectively reducing the outstanding balance of each $1,000 bond to approximately $826. The Company has an aggregate other than temporary impairment of $458,000 for the First and Second Mortgage Bonds at both at December 31, 2018 and 2017, which effectively reduces the bonds to the fair value amount management believes will be recovered. The Company restructured two mortgage loans during the year ended December 31, 2018. The first restructured loan was a $669,544 first mortgage loan located in Indianapolis, Indiana. The Church was unable to meet its monthly debt obligations. The Company reduced the Church’s monthly mortgage obligation to interest only payments for a period of three years. After the initial three-year period, the Church will resume its regular monthly mortgage payments. The Church accepted the restructured loan terms. The modification had no effect on the Company’s financial statements. The second restructured loan was a $470,000 first mortgage loan located in Cincinnati, Ohio. The Church was unable to meet its monthly debt obligations. The Company reduced the Church’s monthly mortgage obligation to interest only for a period of three years which included a reduction in their interest rate. After the initial three-year term, the rate of interest will increase for an additional three-year period. At the end of the sixth year, the Church will resume its regular monthly mortgage payments at the original rate of interest. The Church accepted the restructured loan terms. The modification had no effect on the Company’s financial statements. A summary of loans re-structured or modified for the years ended December 31, 2018 and 2017 are shown below. All of the loans shown are currently performing under the terms of the modifications for their mortgage obligations. December 31, 2018 Type of Loan Number of Loans Original Principal Balance Original Average Interest Rate Unpaid Principal Balance Modified Average Interest Rate First Mortgage Loan 7 $ 4,415,544 8.014 % $ 3,838,819 6.03 % December 31, 2017 Type of Loan Number of Loans Original Principal Balance Original Average Interest Rate Unpaid Principal Balance Modified Average Interest Rate First Mortgage Loan 5 $ 3,276,000 8.67 % $ 2,762,309 6.64 % |
Secured Investor Certificates
Secured Investor Certificates | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Notes to Financial Statements | ||
Secured Investor Certificates | 5. SECURED INVESTOR CERTIFICATES Secured investor certificates are collateralized by certain mortgage loans receivable or secured church bonds of approximately the same value as the certificates. The weighted average interest rate on the certificates was 6.33% and 6.35% at June 30, 2019 and December 31, 2018, respectively. Holders of the secured investor certificates may renew certificates at the current rates and terms upon maturity at the Company’s discretion. Renewals upon maturity are considered neither proceeds from nor issuance of secured investor certificates. Renewals totaled approximately $243,000 and $1,671,000 at June 30, 2019 and December 31, 2018, respectively. The secured investor certificates have certain financial and non-financial covenants identified in the respective series’ trust indentures. The estimated maturity schedule for the secured investor certificates at June 30, 2019 is as follows: July 1, 2019 through June 30, 2020 $ 3,269,000 July 1, 2020 through December 31, 2020 2,128,000 2021 2,168,000 2022 996,000 2023 3,353,000 Thereafter 15,448,000 $27,362,000 Less deferred offering costs (859,520) Totals $ 26,502,480 In September 2017, the Company filed a registration statement with the Securities and Exchange Commission to offer $10,000,000 worth of Series E secured investor certificates. The offering was declared effective by the SEC on November 6, 2017. The certificates are being offered in multiples of $1,000 with interest rates ranging from 4.00% to 6.50%, subject to changing market rates, and maturities from 5 to 15 years. The certificates are collateralized by certain mortgage loan receivables and church bonds of approximately the same value. At June 30, 2019, approximately 3,344 Series E certificates had been issued and were outstanding for $3,344,000. | 4. SECURED INVESTOR CERTIFICATES Secured investor certificates are collateralized by certain mortgage loans receivable or secured church bonds of approximately the same value as the certificates. The weighted average interest rate on the certificates was 6.35% and 6.45% at December 31, 2018 and 2017, respectively. Holders of the secured investor certificates may renew certificates at the current rates and terms upon maturity at the Company’s discretion. Renewals upon maturity are considered neither proceeds from nor issuance of secured investor certificates. Renewals totaled approximately $1,671,000 and $1,282,000 during 2018 and 2017, respectively. The secured investor certificates have certain financial and non-financial covenants identified in the respective series’ trust indentures. The estimated maturity schedule for the secured investor certificates at December 31, 2018 is as follows: 2019 $ 4,105,000 2020 4,117,000 2021 2,168,000 2022 1,316,000 2023 3,217,000 Thereafter 14,463,000 $29,386,000 Less deferred offering costs (886,411) Totals $ 28,499,589 In July 2014, the Company filed a registration statement with the Securities and Exchange Commission to offer $10,000,000 worth of Series D secured investor certificates. The offering was declared effective by the SEC on August 12, 2014. The offering was renewed with an effective date of September 23, 2016. The certificates were offered in multiples of $1,000 with interest rates ranging from 4.00% to 6.50%, subject to changing market rates, and maturities from 5 and 7 to 15 years. The certificates are collateralized by certain mortgage loans receivable and church bonds of approximately the same value. At December 31, 2018, approximately 8,234 Series D certificates had been issued and were outstanding for $8,234,000. The offering terminated in August 2017. In September 2017, the Company filed a registration statement with the Securities and Exchange Commission to offer $10,000,000 worth of Series E secured investor certificates. The offering was declared effective by the SEC on November 6, 2017. The certificates are being offered in multiples of $1,000 with interest rates ranging from 4.00% to 6.50%, subject to changing market rates, and maturities from 5 to 15 years. The certificates are collateralized by certain mortgage loan receivables and church bonds of approximately the same value. At December 31, 2018, approximately 2,786 Series E certificates had been issued and were outstanding for $2,786,000. |
Transactions With Affiliates
Transactions With Affiliates | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Notes to Financial Statements | ||
Transactions With Affiliates | 6. TRANSACTIONS WITH AFFILIATES The Company has an Advisory Agreement with Church Loan Advisors, Inc. (the “Advisor”). The Advisor is responsible for the day-to-day operations of the Company and provides office space and administrative services. The Advisor and the Company are related through common ownership and common management. For its services, the Advisor is entitled to receive a management fee equal to 1.25% annually of the Company's Average Invested Assets, plus one-half of any origination fee charged to borrowers on mortgage loans made by the Company. A majority of the independent board members approve the Advisory Agreement on an annual basis. The Company paid the Advisor management and origination fees of approximately $159,000 and $322,000 at June 30, 2019 and December 31, 2018, respectively. | 5. TRANSACTIONS WITH AFFILIATES The Company has an Advisory Agreement with Church Loan Advisors, Inc. (the “Advisor”). The Advisor is responsible for the day-to-day operations of the Company and provides office space and administrative services. The Advisor and the Company are related through common ownership and common management. For its services, the Advisor is entitled to receive a management fee equal to 1.25% annually of the Company's Average Invested Assets, plus one-half of any origination fee charged to borrowers on mortgage loans made by the Company. A majority of the independent board members approve the Advisory Agreement on an annual basis. The Company paid the Advisor management and origination fees of approximately $322,000 and $333,000 during the years ended December 31, 2018 and 2017, respectively. |
Line of Credit
Line of Credit | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Debt Disclosure [Abstract] | ||
Line of Credit | 7. LINE OF CREDIT On April 9, 2018, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with Alerus Financial, N.A., as lender (the “Lender”), and a Revolving Note (the “Note”) evidencing a $4,000,000 revolving loan (the “Revolving Loan”). The Lender agrees to make loans to the Company from time to time and after the date of the loan agreement and the Company may repay and re-borrow pursuant to the terms and conditions of the Revolving Loan as long as no borrowing causes that dollar limit to be exceeded and the Company is not otherwise in default on the Revolving Loan. The Revolving Loan is secured by a first priority security interest in substantially all of the Company’s assets other than collateral pledged to secure the Company’s secured investor certificates, both those currently issued and any potentially issued in the future. The Company borrowed against the line of credit during the six month period ended June 30, 2019 and has and outstanding balance of $2,000,000 as of June 30, 2019. The original maturity date of the Note was April 9, 2019 and the interest rate is the prevailing London Interbank Offering Rate (LIBOR) plus 2.70% adjusted monthly. On July 22, 2019 the revolving loan was extended for an additional year to July 22, 2020. | 6. LINE OF CREDIT On April 9, 2018, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with Alerus Financial, N.A., as lender (the “Lender”), and a Revolving Note (the “Note”) evidencing a $4,000,000 revolving loan (the “Revolving Loan”). The Lender agrees to make loans to the Company from time to time and after the date of the loan agreement and the Company may repay and reborrow pursuant to the terms and conditions of the Revolving Loan as long as no borrowing causes that dollar limit to be exceeded and the Company is not otherwise in default on the Revolving Loan. The Revolving Loan is secured by a first priority security interest in substantially all of the Company’s assets other than collateral pledged to secure the Company’s secured investor certificates, both those currently issued and any potentially issued in the future. The Company has not yet borrowed against the line of credit as of December 31, 2018. The maturity date of the Note is April 9, 2019 and the interest rate is the prevailing London Interbank Offering Rate (LIBOR) plus 2.70% adjusted monthly. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7. INCOME TAXES As discussed in Note 1, a REIT is subject to taxation to the extent that taxable income exceeds dividend distributions to shareholders. In order to maintain status as a REIT, the Company is required to distribute at least 90% of its taxable income. In 2018, the Company had pretax loss of $(50,182) and distributions to shareholders in the form of dividends during the tax year of $360,727. In 2017, the Company had pretax income of $152,221 and distributions to shareholders in the form of dividends during the tax year of $469,783. The Company paid out 100% of taxable income in dividends in 2018 and 2017. The Company has federal and Minnesota net operating loss carryforwards of $2,600,000. The federal losses start to expire in 2034 and the Minnesota losses start to expire in 2029. The carrying amounts of some assets differ for tax basis than book basis. At December 31, 2018 and 2017, the cumulative tax basis in the Company’s assets and liabilities exceeded book basis by $1,966,000 and $1,725,000, respectively. The Company has no deferred tax assets or liabilities on its balance sheet. The Tax Cuts and Jobs Act, signed into law on December 22, 2017, represents sweeping changes to the Internal Revenue Code, including the reduction of the corporate tax rate to a flat 21 percent. This rate was effective January 1, 2018, ASC 740-10-30-8 and requires deferred tax assets and liabilities to be measured based on the enacted rates expected to apply when the deferred tax assets or liabilities are settled. We do not have any deferred tax assets, and therefore did not incur a charge or benefit with regards to the rate change. We continue to work with our advisors to evaluate the new law and its application to ASC 740. |
Fair Value Financials Instrumen
Fair Value Financials Instruments | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Notes to Financial Statements | ||
Fair Value Financials Instruments | 8. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company is required to disclose the fair value information about financial instruments, where it is practicable to estimate that value. Because assumptions used in these valuation techniques are inherently subjective in nature, the estimated fair values cannot always be substantiated by comparison to independent market quotes and, in many cases, the estimated fair values could not necessarily be realized in an immediate sale or settlement of the instrument. The fair value estimates presented herein are based on relevant information available to management as of June 30, 2019 and December 31, 2018, respectively. Management is not aware of any factors that would significantly affect these estimated fair value amounts. As these reporting requirements exclude certain financial instruments and all non-financial instruments, the aggregate fair value amounts presented herein do not represent management’s estimate of the underlying value of the Company. The estimated fair values of the Company’s financial instruments, none of which are held for trading purposes, are as follows: June 30, 2019 December 31, 2018 Carrying Fair Carrying Fair Amount Value Amount Value Cash and equivalents $ 1,141,413 $ 1,141,413 $ 2,183,441 $ 2,183,441 Accounts receivable 273,895 273,895 251,535 251,535 Interest receivable 197,021 197,021 184,869 184,869 Mortgage loans receivable 23,231,337 25,815,605 23,607,655 23,905,564 Bond portfolio 16,658,937 16,100,937 15,847,807 15,389,807 Secured investor certificates 26,502,480 34,788,901 29,386,000 34,099,540 | 8. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company is required to disclose the fair value information about financial instruments, where it is practicable to estimate that value. Because assumptions used in these valuation techniques are inherently subjective in nature, the estimated fair values cannot always be substantiated by comparison to independent market quotes and, in many cases, the estimated fair values could not necessarily be realized in an immediate sale or settlement of the instrument. The fair value estimates presented herein are based on relevant information available to management as of December 31, 2018 and 2017, respectively. Management is not aware of any factors that would significantly affect these estimated fair value amounts. As these reporting requirements exclude certain financial instruments and all non-financial instruments, the aggregate fair value amounts presented herein do not represent management’s estimate of the underlying value of the Company. The estimated fair values of the Company’s financial instruments, none of which are held for trading purposes, are as follows: December 31, 2018 December 31, 2017 Carrying Fair Carrying Fair Amount Value Amount Value Cash and equivalents $ 2,183,441 $ 2,183,441 $ 502,490 $ 502,490 Accounts receivable 251,535 251,535 260,785 260,785 Interest receivable 184,869 184,869 176,365 176,365 Mortgage loans receivable 23,607,655 23,905,564 24,158,787 25,353,731 Bond portfolio 15,847,807 15,389,807 14,687,775 14,687,775 Secured investor certificates 29,386,000 34,099,540 27,323,000 34,811,519 The following methods and assumptions were used by the Company to estimate the fair value of each class of financial instrument for which it is practicable to estimate that value: Cash and equivalents Due to their short-term nature, the carrying amount of cash and cash equivalents approximates fair value and represents a level 1 measurement. Accounts receivable Due to the short term nature, the carrying amount of accounts receivable approximates fair value and represents a level 1 measurement. Interest receivable Due to the short term nature, the carrying amount of interest receivable approximates fair value and represents a level 1 measurement. Mortgage loans receivable The fair value of the mortgage loans receivable is currently greater than the carrying value as the portfolio is currently yielding a higher rate than similar mortgages with similar terms for borrowers with similar credit quality. The credit markets in which the Company conducts business have experienced an increase in interest rates resulting in the fair value of the mortgage loans falling during the fiscal year ended December 31, 2018. The fair value of loans is considered a level 3 measurement. Bond portfolio We determine the fair value of the bond portfolio shown in the table above by comparing with similar instruments in inactive markets. The analysis reflects the contractual terms of the bonds, which are callable at par by the issuer at any time, and the anticipated cash flows of the bonds and uses observable and unobservable market-based inputs. Unobservable inputs include our internal credit rating and selection of similar bonds for valuation. The fair value of bonds is considered a level 3 measurement. Secured investor certificates The fair value of the secured investor certificates is currently greater than the carrying value due to higher interest rates than current market rates. The fair value of secured investor certificates is considered a level 3 measurement. |
Summary Of Significant Accoun_2
Summary Of Significant Accounting Policies (Policies) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Notes to Financial Statements | ||
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business American Church Mortgage Company, a Minnesota corporation, was incorporated on May 27, 1994. The Company is engaged primarily in the business of making mortgage loans to churches and other nonprofit religious organizations throughout the United States, on terms established for individual organizations. | Accounting Estimates Management uses estimates and assumptions in preparing these financial statements in accordance with accounting principles generally accepted in the United States of America. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates. The most sensitive estimates relate to the realizability of the mortgage loans receivable, the valuation of the bond portfolio and the valuation of real estate held for sale. It is at least reasonably possible that these estimates could change in the near term and that the effect of the change, if any, may be material to the financial statements. |
Accounting Estimates | Accounting Estimates Management uses estimates and assumptions in preparing these financial statements in accordance with accounting principles generally accepted in the United States of America. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates. The most sensitive estimates relate to the realizability of the mortgage loans receivable, the valuation of the bond portfolio and the valuation of real estate held for sale. It is at least reasonably possible that these estimates could change in the near term and that the effect of the change, if any, may be material to the financial statements. | Concentration of Credit Risk The Company's loans have been granted to churches and other non-profit religious organizations. The ability of the Company’s debtors to honor their contracts is dependent on member contributions and the involvement in the church or organization of its senior pastor. |
Concentration of Credit Risk | Concentration of Credit Risk The Company's loans have been granted to churches and other non-profit religious organizations. The ability of the Company’s debtors to honor their contracts is dependent on member contributions and the involvement in the church or organization of its senior pastor. | Cash and Cash Equivalents The Company considers all highly liquid debt instruments purchased with maturities of three months or less to be cash equivalents. The Company maintains accounts primarily at two financial institutions. At times throughout the year, the Company’s cash and equivalents balances may exceed amounts insured by the Federal Deposit Insurance Corporation. Cash in money market funds is not federally insured. The Company had $974,346 and $15,428 in a money market fund account at December 31, 2018 and 2017, respectively. The Company has not experienced any losses in such accounts. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid debt instruments purchased with maturities of three months or less to be cash equivalents. The Company maintains accounts primarily at two financial institutions. At times throughout the year, the Company’s cash and equivalents balances may exceed amounts insured by the Federal Deposit Insurance Corporation. Cash in money market funds is not federally insured. The Company had $15,067 and $974,346 in a money market fund account at June 30, 2019 and December 31, 2018, respectively. The Company has not experienced any losses in such accounts. | Bond Portfolio The Company accounts for the bond portfolio under the Accounting Standards Codification (ASC) 320, Investments-Debt and Equity Securities. The Company classifies the bond portfolio as “available-for sale” and measures the portfolio at fair value. While the bonds are generally held until contractual maturity, the Company classifies them as available for sale as the bonds may be used to repay secured investor certificates or provide additional liquidity or working capital in the short term. The Company has classified $167,000 and $139,000 in bonds as current assets as of December 31, 2018 and 2017, respectively, based on management’s estimates for liquidity requirements and contractual maturities of certain bonds maturing in 2019 and 2018, respectively. |
Bond Portfolio | Bond Portfolio The Company accounts for the bond portfolio under the Accounting Standards Codification (ASC) 320, Investments-Debt and Equity Securities. The Company classifies the bond portfolio as “available-for sale” and measures the portfolio at fair value. While the bonds are generally held until contractual maturity, the Company classifies them as available for sale as the bonds may be used to repay secured investor certificates or provide additional liquidity or working capital in the short term. The Company has classified $236,000 and $167,000 in bonds as current assets as of June 30, 2019 and December 31, 2018, respectively, based on management’s estimates for liquidity requirements and contractual maturities of certain bonds maturing in 2020 and 2019, respectively. | Allowance for Loan Losses on Mortgage Loans Receivable The Company records mortgage loans receivable at estimated net realizable value, which is the unpaid principal balances of the mortgage loans receivable, less the allowance for loan losses on mortgage loans receivable and less deferred loan origination fees. The Company’s loan policy provides an allowance for estimated uncollectible loans based on an evaluation of the current status of the loan portfolio with application of reserve percentages to specific loans based on payment status. This policy reserves for principal amounts outstanding on a specific loan if cumulative interruptions occur in the normal payment schedule of the loan, therefore, the Company recognizes a provision for losses and an allowance for the outstanding principal amount of the loan in the Company’s portfolio if the amount is in doubt of collection. Additionally, no interest income is recognized on impaired loans that are declared to be in default and are in the foreclosure process. At December 31, 2018, the Company reserved $1,672,003 for seventeen mortgage loans. Eleven of these loans are three or more mortgage payments in arrears of which three are declared to be in default and two are in the foreclosure process. The total principal amount of these seventeen loans totals approximately $6,893 A summary of transactions in the allowance for mortgage loans for the years ended December 31 is as follows: 2018 2017 Balance at beginning of year $ 1,428,155 $ 1,311,983 Provision for losses on mortgage loans receivable 254,310 116,172 Reclassified to real estate held for sale (10,462 ) — Charge-offs — — Balance at end of year $ 1,672,003 $ 1,428,155 The total impaired loans, which are loans that are in the foreclosure process or are declared to be in default, were approximately $1,498,000 and $2,044,000 at December 31, 2018 and 2017, respectively, which the Company believes are adequately secured by the underlying collateral and the allowance for mortgage loans. Approximately $833,000 of the Company’s allowance for mortgage loans was allocated to these loans at December 31, 2018. Approximately $723,000 of the Company’s allowance for mortgage loans was allocated to impaired loans at December 31, 2017. The Company will declare a loan to be in default and will place the loan on non-accrual status when the following thresholds have been met: (i) the borrower has missed three consecutive mortgage payments; (ii) the borrower has not communicated to the Company any legitimate reason for delinquency in its payments to the Company and has not arranged for the re-continuance of payments; (iii) lines of communication to the borrower have broken down such that any reasonable prospect of rehabilitating the loan and return of regular payments is gone. The Company’s policies on payments received and interest accrued on non-accrual loans are as follows: (i) The Company will accept payments on loans that are currently on non-accrual status when a borrower has communicated to us that they intend to meet their mortgage obligations. A payment made on a non-accrual loan is considered a good faith deposit as to the intent to resume their mortgage payment obligation. This good faith deposit is credited back to interest first then principal as stated in the mortgage loan documentation. (ii) A letter outlining the re-payment terms or the restructure terms (if any) of the loan is provided to the borrower. This letter will be signed by the Senior Pastor and either officers or board members of the borrower. This letter resumes the obligation to make payments on non-accrual loans. (iii) The borrower must meet all its payment obligations for the next 120 days without interruption in order to be removed from non-accrual status. No interest income was recognized on non-accrual loans for the years ended December 31, 2018 and 2017. When a loan is declared in default according to the Company’s policy or deemed to be doubtful of collection, the loan committee of the Advisor to the Company will direct the staff to charge-off the uncollectable receivables. Loans totaling approximately $2,853,000 and $3,364,000 exceeded 90 days past due but continued to accrue interest as of December 31, 2018 and 2017, respectively. The Company believes that continued interest accruals are appropriate because the loans are well secured, not deemed to be in technical default and the Company is actively pursuing collection of past due payments. |
Allowance for Loan Losses on Mortgage Loans Receivable | Allowance for Loan Losses on Mortgage Loans Receivable The Company records mortgage loans receivable at estimated net realizable value, which is the unpaid principal balances of the mortgage loans receivable, less the allowance for loan losses on mortgage loans receivable and less deferred loan origination fees. The Company’s loan policy provides an allowance for estimated uncollectible loans based on an evaluation of the current status of the loan portfolio with application of reserve percentages to specific loans based on payment status. This policy reserves for principal amounts outstanding on a specific loan if cumulative interruptions occur in the normal payment schedule of the loan, therefore, the Company recognizes a provision for losses and an allowance for the outstanding principal amount of the loan in the Company’s portfolio if the amount is in doubt of collection. Additionally, no interest income is recognized on impaired loans that are declared to be in default and are in the foreclosure process. At June 30, 2019, the Company reserved $1,620,207 for sixteen mortgage loans. Ten of these loans are three or more mortgage payments in arrears of which three are declared to be in default and one is in the foreclosure process. The total principal amount of these sixteen loans totalled approximately $6,79 A summary of transactions in the allowance for mortgage loans for the period ended June 30, 2019 is as follows: Balance at December 31, 2018 $ 1,672,003 Provision for additional losses 48,741 Proceeds from sale of property held for sale (100,537) Balance at June 30, 2019 $ 1,620,207 The total impaired loans, which are loans that are in the foreclosure process or are declared to be in default, were approximately $1,369,000 and $1,498,000 at June 30, 2019 and December 31, 2018, respectively, which the Company believes are adequately secured by the underlying collateral and the allowance for mortgage loans. Approximately $757,000 of the Company’s allowance for mortgage loans was allocated to these loans at June 30, 2019. Approximately $833,000 of the Company’s allowance for mortgage loans was allocated to impaired loans at December 31, 2018. The Company will declare a loan to be in default and will place the loan on non-accrual status when the following thresholds have been met: (i) the borrower has missed three consecutive mortgage payments; (ii) the borrower has not communicated to the Company any legitimate reason for delinquency in its payments to the Company and has not arranged for the re-continuance of payments; (iii) lines of communication to the borrower have broken down such that any reasonable prospect of rehabilitating the loan and return of regular payments is gone. The Company’s policies on payments received and interest accrued on non-accrual loans are as follows: (i) The Company will accept payments on loans that are currently on non-accrual status when a borrower has communicated to us that they intend to meet their mortgage obligations. The accrual of interest on a loan is discontinued when the loan becomes 90 days delinquent or whenever management believes the borrower will be unable to make payments as they become due. When loans are placed on nonaccrual status or charged off, all unpaid accrued interest is reversed against interest income. The interest on these loans is subsequently accounted for on the cash basis or using the cost-recovery method until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. No interest income was recognized on non-accrual loans as of June 30, 2019. When a loan is declared in default according to the Company’s policy or deemed to be doubtful of collection, the loan committee of the Advisor to the Company will direct the staff to charge-off the uncollectable receivables. Loans totaling approximately $2,891,000 and $2,853,000 exceeded 90 days past due but continued to accrue interest as of June 30, 2019 and December 31, 2018, respectively. The Company believes that continued interest accruals are appropriate because the loans are well secured, not deemed to be in technical default and the Company is actively pursuing collection of past due payments. | Real Estate Held for Sale As of December 31, 2018, the Company had acquired one property located in Bethel, Ohio through the foreclosure process with an outstanding balance of $112,515. The Company is preparing to list the property for sale through a local realtor. As of December 31, 2018, the Company has one property located in Pine Bluff, Arkansas acquired via deed in lieu of foreclosure with an outstanding balance totaling balance totaling $225,872. The Church is still occupying this property and paying rent while trying to either sell the building or obtain refinancing. The Company records real estate held for sale at the estimated fair value, which is net of the expected expenses related to the sale of the real estate. The fair value of our real estate held for sale, which represents the carrying value, is $340,659 as of December 31, 2018. The Company sold one property and disposed of a second property during the year ended December 31, 2017. The first property was sold to an unrelated third party for approximately $48,000. The second property was disposed by way of a “Quit-Claim Deed” to an unrelated third party. The disposed property had no carrying value. The Company realized an additional loss of approximately $67,000 on property that was sold as of December 31, 2017. |
Carrying Value of Long-Lived Assets | Carrying Value of Long-Lived Assets The Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that the carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed of significantly before the end of the estimated useful life. Recoverability is assessed based on the carrying amount of the asset compared to the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is deemed not recoverable and exceeds fair value as determined through various valuation techniques including, but not limited to, discounted cash flow models, quoted market values, and third party independent appraisals. | Carrying Value of Long-Lived Assets The Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that the carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed of significantly before the end of the estimated useful life. Recoverability is assessed based on the carrying amount of the asset compared to the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is deemed not recoverable and exceeds fair value as determined through various valuation techniques including, but not limited to, discounted cash flow models, quoted market values, and third party independent appraisals. |
Revenue Recognition | Revenue Recognition Interest income on mortgage loans receivable and the bond portfolio is recognized as earned per the terms of the specific asset. Other income included with interest represents cash received for loan origination fees, which are recognized over the life of the loan as an adjustment to the yield on the loan. As of January 1, 2018, the Company adopted ASU 2014-09 Revenue from Contracts with Customers - Topic 606 The Company generally fully satisfies its performance obligations on its contracts with customers as services are rendered and the transaction prices are typically fixed; charged either on a periodic basis or based on activity. Because performance obligations are satisfied as services are rendered and the transaction prices are fixed, there is little judgment involved in applying Topic 606 that significantly affects the determination of the amount and timing of revenue from contracts with customers. The main types of revenue contracts included in non-interest income within the consolidated statements of operations are as follows: | Revenue Recognition Interest income on mortgage loans receivable and the bond portfolio is recognized as earned per the terms of the specific asset. Other income included with interest represents cash received for loan origination fees, which are recognized over the life of the loan as an adjustment to the yield on the loan. As of January 1, 2018, the Company adopted ASU 2014-09 Revenue from Contracts with Customers - Topic 606 The Company generally fully satisfies its performance obligations on its contracts with customers as services are rendered and the transaction prices are typically fixed; charged either on a periodic basis or based on activity. Because performance obligations are satisfied as services are rendered and the transaction prices are fixed, there is little judgment involved in applying Topic 606 that significantly affects the determination of the amount and timing of revenue from contracts with customers. The main types of revenue contracts included in non-interest income within the consolidated statements of operations are as follows: |
Gain Losses on Real Estate Held For Sale | Gain Losses on Real Estate Held For Sale The Company records a gain or loss from real estate held for sale when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. When the Company finances real estate held for sale to the buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, real estate held for sale is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. In determining the gain or loss on the sale, the Company adjusts the transaction prices and related gain (loss) on sale if a significant financing component is present. | Gain Losses on Sale of OREO The Company records a gain or loss from the sale of OREO when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. When the Company finances the sale of OREO to the buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the OREO asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. In determine the gain or loss on the sale, the Company adjusts the transaction prices and related gain (loss) on sale if a significant financing component is present. |
Deferred Financing Costs | Deferred Financing Costs The Company defers the costs related to obtaining financing. These costs are amortized over the life of the financing using the straight line method, which approximates the effective interest method. | Deferred Financing Costs The Company defers the costs related to obtaining financing. These costs are amortized over the life of the financing using the straight line method, which approximates the effective interest method. |
Income (Loss) Per Common Share | Income (Loss) Per Common Share No adjustments were made to income (loss) for the purpose of calculating earnings per share, as there were no potential dilutive shares outstanding. | Income (Loss) Per Common Share No adjustments were made to income (loss) for the purpose of calculating earnings per share, as there were no potential dilutive shares outstanding. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In 2016 the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 is intended to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit. For public entities, ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company has not yet fully evaluated the potential effects of adopting ASU 2016-13 on the Company’s results of operations, financial position or cash flows. | Recent Accounting Pronouncements In June, 2016 the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 is intended to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit. For public entities, ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company has not yet fully evaluated the potential effects of adopting ASU 2016-13 on the Company’s results of operations, financial position or cash flows. |
Recent Accounting Pronouncements Adopted | Recent Accounting Pronouncements Adopted In the first quarter of 2018, the Company adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). | Recent Accounting Pronouncements Adopted In the first quarter of 2018, the Company adopted Accounting Standards Update (ASU) 2014 09, Revenue from Contracts with Customers (Topic 606) |
Income Taxes | Income Taxes The Company elected to be taxed as a Real Estate Investment Trust (REIT). Accordingly, the Company is not subject to Federal income tax to the extent of distributions to its shareholders if the Company meets all the requirements under the REIT provisions of the Internal Revenue Code. The Company evaluated its recognition of income tax benefits using a two-step approach to recognizing and measuring tax benefits when realization of the benefits is uncertain. The first step is to determine whether the benefit meets the more-likely-than-not condition for recognition and the second step is to determine the amount to be recognized based on the cumulative probability that exceeds 50%. Primarily due to the Company’s tax status as a REIT, the Company does not have any significant tax uncertainties that would require recognition or disclosure. | |
Subsequent Events | Subsequent Events The Company has evaluated events and transactions through the date the financial statements were available to be issued. No material events or transactions occurred in the time period referenced above requiring adjustment to or disclosure in the June 30, 2019 financial statements. | Subsequent Events The Company has evaluated events and transactions through the date the financial statements were available to be issued. No material events or transactions occurred in the time period referenced above requiring adjustment to or disclosure in the December 31, 2018 financial statements. |
Summary Of Significant Accoun_3
Summary Of Significant Accounting Policies (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Notes to Financial Statements | ||
Allowance For Mortgage Loans Receivable | Balance at December 31, 2018 $ 1,672,003 Provision for additional losses 48,741 Proceeds from sale of property held for sale (100,537) Balance at June 30, 2019 $ 1,620,207 | 2018 2017 Balance at beginning of year $ 1,428,155 $ 1,311,983 Provision for losses on mortgage loans receivable 254,310 116,172 Reclassified to real estate held for sale (10,462 ) — Charge-offs — — Balance at end of year $ 1,672,003 $ 1,428,155 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | ||
Fair Value Financials Instruments Recurring Basis | Fair Value Measurement June 30, 2019 Fair Value Level 3 Bond portfolio $ 16,100,937 $ 16,100,937 Fair Value Measurement December 31, 2018 Fair Value Level 3 Bond portfolio $ 15,389,807 $ 15,389,807 | Fair Value Measurement December 31, 2018 Fair Value Level 3 Bond portfolio $ 15,389,807 $ 15,389,807 Fair Value Measurement December 31, 2017 Fair Value Level 3 Bond portfolio $ 14,229,755 $ 14,229,755 |
Fair Value Bond Portfolio | Bond Portfolio Balance at December 31, 2018 $ 15,389,807 Additional losses on bond portfolio (100,000 ) Purchases 895,000 Proceeds (83,870 ) Balance at June 30, 2019 $ 16,100,937 | 2018 2017 Balance at beginning of year $14,229,755 $11,482,616 Purchases 1,883,052 2,964,000 Proceeds (723,000 (216,861 Balance at end of year $15,389,807 $14,229,755 |
Fair Value Financials Instruments Nonrecurring Basis | June 30, 2019 Level 1 Level 2 Level 3 Fair Value at June 30, Impaired Loans $ — $ — $ 611,390 $ 611,390 Real estate held for resale — — 327,925 327,925 Totals $ — $ — $ 939,315 $ 939,315 December 31, 2018 Level 1 Level 2 Level 3 Fair Value at December 31, Impaired Loans $ — $ — $ 665,267 $ 665,267 Real estate held for resale — — 340,659 340,659 Totals $ — $ — $ 1,005,926 $ 1,005,926 | December 31, 2018 Level 1 Level 2 Level 3 Fair Value at December 31, Impaired Loans $ — $ — $ 665,267 $ 665,267 Real estate held for resale — — 340,659 340,659 $ — $ — $ 1,005,926 $ 1,005,926 December 31, 2017 Level 1 Level 2 Level 3 Fair Value at December 31, Impaired Loans $ — $ — $ 1,321,500 $ 1,321,500 Real estate held for resale — — 225,872 225,872 $ — $ — $ 1,547,372 $ 1,547,372 |
Change Fair Value Financial Instruments Nonrecurring Basis | Impaired Loans Real Estate Held for Sale Balance at December 31, 2018 $ 665,267 $ 340,659 Dispositions/Proceeds (28,891) - Impairment (24,986 (12,734) Balance at June 30, 2019 $ 611,390 $ 327,925 | Impaired Loans Real Estate Held for Sale Balance at December 31, 2016 $1,189,873 $340,872 Additions/Acquisitions 197,034 - Dispositions/Proceeds (5,465) (115,000) Impairment ( 59,942 - Balance at December 31, 2017 $ 1,321,500 $ 225,872 Additions/Acquisitions - 125,249 Dispositions/Proceeds (546,406) - Impairment (109,827 (10,462) Balance at December 31, 2018 $ 665,267 $ 340,659 |
Mortgage Loans Receivable and_2
Mortgage Loans Receivable and Bond Portfolio (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Notes to Financial Statements | ||
Mortgage Loans Receivable and Bond Portfolio | Mortgage Loans Bond Portfolio July 1, 2019 through June 30, 2020 $ 1,127,113 $ 236,000 July 1, 2020 through December 31, 2020 2,586,213 103,000 2021 692,348 270,000 2022 1,491,046 192,000 2023 852,674 295,000 Thereafter 16,481,943 15,562,937 23,231,337 16,658,937 Less loan loss and other than temporary impairment on bonds allowance (1,620,207) (558,000) Less deferred origination fees (311,913 ___-____ Totals $ 21,299,217 $ 16,100,937 | Mortgage Loans Bond Portfolio 2019 $ 2,435,321 $ 167,000 2020 963,625 240,000 2021 756,395 266,000 2022 1,554,461 188,000 2023 924,931 289,000 Thereafter 16,972,922 14,697,807 23,607,655 15,847,807 Less loan loss and other than temporary impairment on bonds allowance (1,672,003) (458,000) Less deferred origination income (271,913 ___-____ Totals $ 21,663,739 $ 15,389,807 |
Restructured or Modified Loans | June 30, 2019 Type of Loan Number of Loans Original Principal Balance Original Average Interest Rate Unpaid Principal Balance Modified Average Interest Rate First Mortgage Loan 7 $4,415,544 8.014% $3,434,328 6.03% December 31, 2018 Type of Loan Number of Loans Original Principal Balance Original Average Interest Rate Unpaid Principal Balance Modified Average Interest Rate First Mortgage Loan 7 $4,415,544 8.014% $3,838,819 6.03% | December 31, 2018 Type of Loan Number of Loans Original Principal Balance Original Average Interest Rate Unpaid Principal Balance Modified Average Interest Rate First Mortgage Loan 7 $ 4,415,544 8.014 % $ 3,838,819 6.03 % December 31, 2017 Type of Loan Number of Loans Original Principal Balance Original Average Interest Rate Unpaid Principal Balance Modified Average Interest Rate First Mortgage Loan 5 $ 3,276,000 8.67 % $ 2,762,309 6.64 % |
Secured Investor Certificates (
Secured Investor Certificates (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Notes to Financial Statements | ||
Maturity Schedule Secured Investor Certificates | July 1, 2019 through June 30, 2020 $ 3,269,000 July 1, 2020 through December 31, 2020 2,128,000 2021 2,168,000 2022 996,000 2023 3,353,000 Thereafter 15,448,000 $27,362,000 Less deferred offering costs (859,520) Totals $ 26,502,480 | 2019 $ 4,105,000 2020 4,117,000 2021 2,168,000 2022 1,316,000 2023 3,217,000 Thereafter 14,463,000 $29,386,000 Less deferred offering costs (886,411) Totals $ 28,499,589 |
Fair Value Financials Instrum_2
Fair Value Financials Instruments (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Notes to Financial Statements | ||
Carrying Amount and Fair Value Financial Instruments | June 30, 2019 December 31, 2018 Carrying Fair Carrying Fair Amount Value Amount Value Cash and equivalents $ 1,141,413 $ 1,141,413 $ 2,183,441 $ 2,183,441 Accounts receivable 273,895 273,895 251,535 251,535 Interest receivable 197,021 197,021 184,869 184,869 Mortgage loans receivable 23,231,337 25,815,605 23,607,655 23,905,564 Bond portfolio 16,658,937 16,100,937 15,847,807 15,389,807 Secured investor certificates 26,502,480 34,788,901 29,386,000 34,099,540 | December 31, 2018 December 31, 2017 Carrying Fair Carrying Fair Amount Value Amount Value Cash and equivalents $ 2,183,441 $ 2,183,441 $ 502,490 $ 502,490 Accounts receivable 251,535 251,535 260,785 260,785 Interest receivable 184,869 184,869 176,365 176,365 Mortgage loans receivable 23,607,655 23,905,564 24,158,787 25,353,731 Bond portfolio 15,847,807 15,389,807 14,687,775 14,687,775 Secured investor certificates 29,386,000 34,099,540 27,323,000 34,811,519 |
Summary Of Significatn Accounti
Summary Of Significatn Accounting Policies - Allowance For Mortgage Loans Receivable (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Notes to Financial Statements | |||
Balance at December 31, 2018 | $ 1,672,003 | $ 1,428,155 | $ 1,311,983 |
Provision for losses on mortgage loans receivable | 48,741 | 254,310 | 116,172 |
Reclassified to real estate held for sale | (100,537) | (10,462) | |
Balance at March 31, 2019 | $ 1,620,207 | $ 1,672,003 | $ 1,428,155 |
Fair Value Measurement - Fair V
Fair Value Measurement - Fair Value Financials Instruments Recurring Basis (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Gross Bond portfolio | $ 16,100,937 | $ 15,389,807 | $ 14,229,755 | $ 11,482,616 |
Impaired Loans | ||||
Gross Bond portfolio | $ 16,100,937 | $ 15,389,807 | $ 14,229,755 |
Fair Value Measurement - Fair_2
Fair Value Measurement - Fair Value Bond Portfolio (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |||
Balance at Beginning of Period | $ 15,389,807 | $ 14,229,755 | $ 11,482,616 |
Additional Losses on Bond Portfolio | (100,000) | 1,883,052 | 2,964,000 |
Purchases | 895,000 | (723,000) | (216,861) |
Proceeds | (83,870) | 15,389,807 | 14,229,755 |
Balance at End of Period | $ 16,100,937 | $ 15,389,807 | $ 14,229,755 |
Fair Value Measurement - Fair_3
Fair Value Measurement - Fair Value Financials Instruments Nonrecurring Basis (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Impaired Loans | $ 611,390 | $ 665,267 | $ 1,321,500 |
Real estate held for resale | 327,925 | 340,659 | 225,872 |
Total Fair Value Measurement | 939,315 | 1,005,926 | 1,547,372 |
Fair Value Impaired Loans amd Real Estate Held For Sale Level 1 | |||
Impaired Loans | |||
Real estate held for resale | |||
Total Fair Value Measurement | |||
Fair Value Impaired Loans & Real Estate Held for Sale Level 2 | |||
Impaired Loans | |||
Real estate held for resale | |||
Total Fair Value Measurement | |||
Impaired Loans | |||
Impaired Loans | 611,390 | 665,267 | 1,321,500 |
Real estate held for resale | 327,925 | 340,659 | 225,872 |
Total Fair Value Measurement | $ 939,315 | $ 1,005,926 | $ 1,547,372 |
Fair Value Measurement - Change
Fair Value Measurement - Change Fair Value Financial Instruments Nonrecurring Basis (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Real Estate Held For Sale | |||
Balance Beginning Period | $ 340,659 | $ 225,872 | $ 340,872 |
Additions/Acquisitions | 125,249 | ||
Dispositions/Proceeds | (115,000) | ||
Impairment | (12,734) | (10,462) | |
Balance Ending Period | 327,925 | 225,872 | 225,872 |
Impaired Loans | |||
Balance Beginning Period | 665,267 | 1,321,500 | 1,189,873 |
Additions/Acquisitions | 197,034 | ||
Dispositions/Proceeds | (28,891) | (546,406) | (5,465) |
Impairment | (24,986) | (109,827) | (59,942) |
Balance Ending Period | $ 611,390 | $ 1,321,500 | $ 1,321,500 |
Mortgage Loans Receivable and_3
Mortgage Loans Receivable and Bond Portfolio - Mortgage Loans Receivable and Bond Portfolio (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Mortgage Loans | ||
2019 | $ 1,127,113 | $ 2,435,321 |
July 1, 2019 through June 30, 2020 | 1,127,113 | 2,435,321 |
July 1, 2020 through December 31, 2020 | 2,586,213 | 963,625 |
2021 | 692,348 | 756,395 |
2022 | 1,491,046 | 1,554,461 |
2023 | 852,674 | 924,931 |
Thereafter | 16,481,943 | 16,972,922 |
Subtotal | 23,231,337 | 23,607,655 |
Less loan loss and other than temporary impairment on bonds allowance | (1,620,207) | (1,672,003) |
Less deferred origination fees | (311,913) | (271,913) |
Totals | 21,299,217 | 21,663,739 |
Bond Portfolio | ||
2019 | 236,000 | 167,000 |
July 1, 2019 through June 30, 2020 | 236,000 | 167,000 |
July 1, 2020 through December 31, 2020 | 103,000 | 240,000 |
2021 | 270,000 | 266,000 |
2022 | 192,000 | 188,000 |
2023 | 295,000 | 289,000 |
Thereafter | 15,562,937 | 14,697,807 |
Subtotal | 16,658,937 | 15,847,807 |
Less loan loss and other than temporary impairment on bonds allowance | (558,000) | (458,000) |
Less deferred origination fees | ||
Totals | $ 16,100,937 | $ 15,389,807 |
Mortgage Loans Receivable and_4
Mortgage Loans Receivable and Bond Portfolio - Restructured or Modified Loans (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Notes to Financial Statements | |||
Number of Loans | $ 7 | $ 7 | $ 5 |
Original Principal Balance | 4,415,544 | 4,415,544 | 3,276,000 |
Original Average Interest Rate | 8 | 8 | 9 |
Unpaid Principal Balance | 3,434,328 | 3,838,819 | 2,762,309 |
Modified Average Interest Rate | $ 6 | $ 6 | $ 7 |
Secured Investor Certificates -
Secured Investor Certificates - Maturity Schedule Secured Investor Certificates (Details) - USD ($) | 6 Months Ended | 12 Months Ended | 123 Months Ended | ||||
Dec. 31, 2020 | Jun. 30, 2018 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2034 | |
Secured Investor Certificate Maturity Schedule | $ 27,362,000 | ||||||
Certificates Deferred Offering Costs | (859,520) | ||||||
Secured Investor Certificates Net | $ 26,502,480 | ||||||
Secured Investor Certificates | |||||||
Secured Investor Certificate Maturity Schedule | $ 2,128,000 | $ 3,353,000 | $ 996,000 | $ 2,168,000 | $ 3,269,000 | $ 15,448,000 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments - Fair Value Financial Instruments (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Cash and equivalents | $ 1,141,413 | $ 2,183,441 | $ 2,929,684 | $ 502,490 | $ 3,382,994 |
Interest receivable | 197,021 | 184,869 | 176,365 | ||
Fair Value | |||||
Cash and equivalents | 1,141,413 | 2,183,441 | 502,490 | ||
Accounts receivable | 273,895 | 251,535 | 260,785 | ||
Interest receivable | 197,021 | 184,869 | 176,365 | ||
Mortgage loans receivable | 25,815,605 | 23,905,564 | 25,353,731 | ||
Bond portfolio | 16,100,937 | 15,389,807 | 14,687,775 | ||
Secured investor certificates | 347,878,901 | 34,099,540 | 34,811,519 | ||
Carrying Amount | |||||
Cash and equivalents | 1,141,413 | 2,183,441 | 502,490 | ||
Accounts receivable | 273,895 | 251,535 | 260,785 | ||
Interest receivable | 197,021 | 184,869 | 176,365 | ||
Mortgage loans receivable | 23,231,337 | 23,607,655 | 24,158,787 | ||
Bond portfolio | 16,658,937 | 15,847,807 | 14,687,775 | ||
Secured investor certificates | $ 26,502,480 | $ 29,386,000 | $ 27,323,000 |
Summary Of Significant Accoun_4
Summary Of Significant Accounting Policies (Details Narrative) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Notes to Financial Statements | |||
Money Market Funds | $ 15,067 | $ 974,346 | $ 15,428 |
Bond Portfolio | 236,000 | 167,000 | 139,000 |
Allowance for Mortgage Loans Receivable | 1,620,207 | 1,672,003 | 1,428,155 |
Loans Exceeding 90 Days Past Due | 6,793,000 | 6,893,000 | 5,408,000 |
Real Estate Held for Sale Carrying Value | 327,925 | 340,659 | 225,872 |
Allowance Allocated to Impaired Loans | 757,000 | 833,000 | 723,000 |
Total Loans On Nonaccrual Status | 1,369,000 | 1,498,000 | 2,044,000 |
Loans In Default | 2,891,000 | 2,853,000 | 3,364,000 |
Real Estate Sold | $ 100,537 |
Fair Value Measurement (Details
Fair Value Measurement (Details Narrative) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value Disclosures [Abstract] | |||
Loan Loss Reserve Church Bonds | $ 558,000 | $ 458,000 | $ 458,000 |
Real Estate Impairement Charge | $ 0 | $ 114,787 |
Mortgage Loans Receivable and_5
Mortgage Loans Receivable and Bond Portfolio (Details Narrative) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Notes to Financial Statements | |||
Mortgage Loans Receivable Gross | $ 23,231,337 | $ 23,607,655 | $ 24,158,787 |
Church Bonds Owned Gross | 16,658,937 | 15,847,807 | 14,687,755 |
Bond Reserve Fund | 558,000 | 458,000 | 458,000 |
Agape First Mortgage Bonds | 529,000 | 529,000 | 429,000 |
Agape Second Mortgage Bonds | 497,000 | 497,000 | 497,000 |
Agape First Mortgage Bonds Gross | 7,200,000 | 7,200,000 | 7,200,000 |
Agape Second Mortgage Bonds Gross | 715,000 | 715,000 | 715,000 |
Agape Distribution to Bondholders | 19 | 19 | 19 |
Principal Balance Agape Bonds | 826 | 826 | 826 |
Maturities and Redemption of Bonds | 84,000 | 723,000 | 217,000 |
Restructured Mortgage Loans | $ 1,139,544 | $ 1,139,544 | $ 470,000 |
Secured Investor Certificates_2
Secured Investor Certificates (Details Narrative) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Notes to Financial Statements | |||
Renewals Secured Investor Certificates | $ 243,000 | $ 1,671,000 | $ 1,282,000 |
Secured Investor Certificatee Offering | 10,000,000 | ||
Certificate Offering Minimal Investment | 1,000 | ||
Total Secured Investor Certificates Series E | 3,344 | ||
Outstanding Debt Secured Investor Certificates Issued Series E | $ 3,344,000 |
Transactions With Affiliates (D
Transactions With Affiliates (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Notes to Financial Statements | |||
Advisor Managment Fees | $ 159,000 | $ 322,000 | $ 333,000 |
Line of Credit (Details Narrati
Line of Credit (Details Narrative) | Jun. 30, 2019USD ($) |
Debt Disclosure [Abstract] | |
Line Of Credit | $ 4,000,000 |
Outstanding Line of Credit | $ 2,000,000 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Income (Loss) before Provision for Income Taxes | $ (50,182) | $ 152,221 |
Dividends Declared | 360,727 | 469,783 |
Net Operating Loss Carryforwards | 2,600,000 | |
Cumulative Tax Basis | $ 1,966,000 | $ 1,725,000 |