Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Jun. 29, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | MINISTRY PARTNERS INVESTMENT COMPANY, LLC | |
Entity Central Index Key | 0000944130 | |
Document Type | 10-K | |
Document Transition Report | false | |
Entity File Number | 333-4028-LA | |
Document Period End Date | Dec. 31, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | FY | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | CA | |
Entity Tax Identification Number | 26-3959348 | |
Entity Address, Address Line One | 915 West Imperial Highway | |
Entity Address, Address Line Two | Suite 120 | |
Entity Address, City or Town | Brea | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92821 | |
City Area Code | 714 | |
Local Phone Number | 671-5720 | |
Entity Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
ICFR Auditor Attestation Flag | false | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 146,522 | |
Entity Public Float | $ 7,904,250 | |
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE: None | |
Document Annual Report | true | |
Auditor Name | Hutchinson and Bloodgood LLP | |
Auditor Location | Glendale, California | |
Auditor Firm ID | 261 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Assets: | ||
Cash and cash equivalents | $ 28,080 | $ 21,922 |
Restricted cash | 69 | 51 |
Certificates of deposit | 1,761 | |
Loans receivable, net of allowance for loan losses of $1,638 and $1,516 as of December 31, 2021 and 2020, respectively | 97,243 | 116,121 |
Accrued interest receivable | 507 | 798 |
Investments in joint venture | 882 | 884 |
Property and equipment, net | 172 | 219 |
Foreclosed assets, net | 301 | 301 |
Servicing assets | 170 | 147 |
Other assets | 541 | 889 |
Total assets | 127,965 | 143,093 |
Liabilities: | ||
Lines of credit | 2,000 | |
Term-debt | 32,749 | 51,516 |
Other secured borrowings | 17 | |
Notes payable, net of debt issuance costs of $88 and $33 as of December 31, 2021 and 2020, respectively | 76,732 | 76,194 |
Accrued interest payable | 252 | 312 |
Other liabilities | 1,704 | 2,163 |
Total liabilities | 113,454 | 130,185 |
Members' Equity: | ||
Series A preferred units, 1,000,000 units authorized, 117,100 units issued and outstanding at December 31, 2021 and 2020 (liquidation preference of $100 per unit); See Note 14 | 11,715 | 11,715 |
Class A common units, 1,000,000 units authorized, 146,522 units issued and outstanding at December 31, 2021 and 2020; See Note 14 | 1,509 | 1,509 |
Accumulated earnings (deficit) | 1,287 | (316) |
Total members' equity | 14,511 | 12,908 |
Total liabilities and members' equity | $ 127,965 | $ 143,093 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Consolidated Balance Sheets [Abstract] | ||
Loans receivable, allowance for loan losses | $ 1,638 | $ 1,516 |
Notes payable, debt issuance costs | $ 88 | $ 33 |
Preferred units - Series A, units authorized | 1,000,000 | 1,000,000 |
Preferred units - Series A, units issued | 117,100 | 117,100 |
Preferred units - Series A, units outstanding | 117,100 | 117,100 |
Preferred units - Series A, liquidation preference per unit | $ 100 | $ 100 |
Common units - Class A, units authorized | 1,000,000 | 1,000,000 |
Common units - Class A, units issued | 146,522 | 146,522 |
Common units - Class A, units outstanding | 146,522 | 146,522 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Interest income: | ||
Interest on loans | $ 6,998 | $ 8,182 |
Interest on interest-bearing accounts | 43 | 161 |
Total interest income | 7,041 | 8,343 |
Interest expense: | ||
Other debt | 1,007 | 1,639 |
Notes payable | 2,721 | 2,816 |
Total interest expense | 3,728 | 4,455 |
Net interest income | 3,313 | 3,888 |
Provision for loan losses | 122 | 188 |
Net interest income after provision for loan losses | 3,191 | 3,700 |
Non-interest income: | ||
Broker-dealer commissions and fees | 878 | 762 |
Other income | 324 | 283 |
Gain on debt extinguishment | 2,398 | 2,400 |
Total non-interest income | 3,600 | 3,445 |
Non-interest expenses: | ||
Salaries and benefits | 2,778 | 2,868 |
Marketing and promotion | 214 | 238 |
Office occupancy | 178 | 179 |
Office operations and other expenses | 1,315 | 1,353 |
Foreclosed assets, net | 22 | 11 |
Legal and accounting | 414 | 360 |
Total non-interest expenses | 4,921 | 5,009 |
Income before provision for income taxes and state LLC fees | 1,870 | 2,136 |
Provision for income taxes and state LLC fees | 20 | 20 |
Net income | $ 1,850 | $ 2,116 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) $ in Thousands | Series A Preferred Units [Member] | Class A Common Units [Member] | Accumulated Deficit [Member] | Total |
Beginning balance at Dec. 31, 2019 | $ 11,715 | $ 1,509 | $ (2,153) | $ 9,531 |
Beginning balance, shares at Dec. 31, 2019 | 117,100 | 146,522 | ||
Net income | 2,116 | 2,116 | ||
Dividends on preferred units | (279) | (279) | ||
Ending balance at Dec. 31, 2020 | $ 11,715 | $ 1,509 | (316) | 12,908 |
Ending balance, shares at Dec. 31, 2020 | 117,100 | 146,522 | ||
Net income | 1,850 | 1,850 | ||
Dividends on preferred units | (247) | (247) | ||
Ending balance at Dec. 31, 2021 | $ 11,715 | $ 1,509 | $ 1,287 | $ 14,511 |
Ending balance, shares at Dec. 31, 2021 | 117,100 | 146,522 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 1,850 | $ 2,116 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 48 | 52 |
Amortization of deferred loan fees, net | (231) | (257) |
Amortization of debt issuance costs | 64 | 97 |
Provision for loan losses | 122 | 188 |
Accretion of loan discount | (26) | (31) |
Gain on sale of loans | (64) | (69) |
Loss on sale of fixed assets | 8 | |
Gain on sale of foreclosed assets | (44) | |
Gain on debt extinguishment | (2,398) | (2,400) |
Changes in: | ||
Accrued interest receivable | 292 | (163) |
Other assets | 407 | 161 |
Accrued interest payable | (60) | 46 |
Other liabilities | (461) | (12) |
Net cash used by operating activities | (501) | (264) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Loan purchases | (842) | |
Loan originations | (14,319) | (19,449) |
Loan sales | 14,053 | 19,827 |
Loan principal collections | 20,104 | 12,413 |
Redemption (purchase) of certificates of deposit | 1,761 | (1,761) |
Sale of foreclosed assets | 44 | |
Purchase of property and equipment | (1) | (87) |
Sale of property and equipment | 24 | |
Net cash provided by investing activities | 20,800 | 10,967 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repayment of term debt | (16,369) | (17,622) |
Borrowings from financial institutions | 111 | |
Borrowings, net of repayments on lines of credit | 2,000 | |
Borrowings, net of repayments on secured borrowings | 17 | |
Net change in notes payable | 593 | 3,126 |
Debt issuance costs | (119) | (75) |
Dividends paid on preferred units | (245) | (315) |
Net cash used by financing activities | (14,123) | (14,775) |
Net increase (decrease) in cash and restricted cash | 6,176 | (4,072) |
Cash, cash equivalents, and restricted cash at beginning of period | 21,973 | 26,045 |
Cash, cash equivalents, and restricted cash at end of period | 28,149 | 21,973 |
Supplemental disclosures of cash flow information | ||
Interest paid | 3,788 | 4,409 |
Income taxes paid | 20 | 15 |
Leased assets obtained in exchange of new operating lease liabilities | 53 | |
Lease liabilities recorded | 53 | |
Dividends declared to preferred unit holders | $ 203 | $ 201 |
Nature of Business and Summary
Nature of Business and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Nature of Business and Summary of Significant Accounting Policies [Abstract] | |
Nature of Business and Summary of Significant Accounting Policies | MINISTRY PARTNERS INVESTMENT COMPANY, LLCNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNote 1. Nature of Business and Summary of Significant Accounting PoliciesNature of BusinessThroughout these notes to consolidated financial statements, we refer to Ministry Partners Investment Company, LLC and its subsidiaries as “the Company.” The Company was formed in California in 1991. The Company’s primary operations are financing commercial real property secured loans and providing investment services for the benefit of evangelical churches, ministries, and individuals. The Company funds its operations primarily through the sale of debt securities. The Company’s wholly-owned subsidiaries are: Ministry Partners Funding, LLC, a Delaware limited liability company (“MPF”); MP Realty Services, Inc., a California corporation (“MP Realty”); Ministry Partners Securities, LLC, a Delaware limited liability company (“MP Securities”); andMinistry Partners for Christ, Inc., a not-for-profit Delaware corporation (“MPC”). The Company formed MPF in 2007 and then deactivated the subsidiary on November 30, 2009. In December 2014, the Company reactivated MPF to enable it to serve as collateral agent for loans held as collateral for its Secured Investment Certificates. The Company formed MP Realty in November 2009, and obtained a license to operate as a corporate real estate broker through the California Department of Real Estate on February 23, 2010. MP Realty has conducted limited operations to date. The Company formed MP Securities on April 26, 2010 to provide investment and financial planning solutions for individuals, churches, charitable institutions, and faith-based organizations. MP Securities acts as the selling agent for the Company’s public and private placement notes. The Company formed MPC on December 28, 2018 to be used exclusively for religious and charitable purposes within the meaning of Section 501(c)(3) of the U.S. Internal Revenue Code of 1986 (“IRC”). MPC is a not-for-profit corporation formed and organized under Delaware law. MPC makes charitable grants to Christian educational organizations, and provides accounting, consulting, and financial expertise to aid evangelical Christian ministries. On August 23, 2019, the Internal Revenue Service granted MPC tax-exempt status as a private foundation under Section 501(c)(3) of the IRC. The MPC Board of Directors approved its first charitable grants during the year ended December 31, 2020.Principles of ConsolidationThe consolidated financial statements include the accounts of Ministry Partners Investment Company, LLC and its wholly-owned subsidiaries. Management eliminates all significant inter-company balances and transactions in consolidation.Conversion to LLCEffective December 31, 2008, the Company converted from a corporation organized under California law to a California limited liability company. After this conversation, the separate existence of Ministry Partners Investment Corporation ceased and the entity continued by operation of law under the name Ministry Partners Investment Company, LLC. As an LLC, a group of managers provides oversight of the Company’s affairs. The managers have full, exclusive, and complete discretion, power, and authority to oversee the management of Company affairs. An Operating Agreement governs the Company’s management structure and governance procedures.Risks and UncertaintiesCOVID-19, a global pandemic, has hurt the broad economy, affecting most industries, including businesses, churches, schools, hospitality- and travel-based employers, and has disrupted the supply and distribution networks that deliver products to the consuming public. The shutdown orders that began in March 2020 have been lifted and many churches are holding worship services in their facilities. However, an outbreak of a COVID-19 variant may trigger governmental authorities to reinstate restrictions on church meetings and cause more economic disruption. It cannot be determined at this time what impact that would have on the Company’s financial position. Furthermore, while there has been no material impact to the Company’s employees to date, COVID-19 could potentially create business continuity issues for the Company. While it is not possible to know the full extent of the impact of COVID-19, resulting measures to curtail its spread and recovery of the economy as the U.S. reopens and prepares for the variant strains of the pandemic, the Company is disclosing potentially material factors that could impact our business of which it is aware.Following Financial Accounting Standards Board (“FASB”) and interagency regulatory guidance issued in March 2020, loans that were modified under the terms of our COVID-19 Deferral Assistance Program were not considered troubled debt restructurings to the extent that they met the terms of such guidance under Section 4013 of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The CARES Act guidance applies to modifications made between March 1, 2020 and the earlier of January 2, 2022 or sixty (60) days after the end of the COVID-19 national emergency, as stipulated by the Consolidated Appropriations Act signed into law on December 31, 2020. The Company has relied upon and applied this guidance to modifications it granted since the first quarter of 2020.Cash and Cash EquivalentsCash equivalents include time deposits and all highly liquid debt instruments with original maturities of three months or less. The Company had demand deposits and money market deposit accounts as of December 31, 2021 and December 31, 2020. The National Credit Union Insurance Fund insures a portion of the Company’s cash held at credit unions and the Federal Deposit Insurance Corporation insures a portion of cash held by the Company at other financial institutions. The Company holds cash deposits that may exceed insured limits. Management does not expect to incur losses in these cash accounts.The Company maintains cash accounts with Royal Bank of Canada Dain Rauscher (“RBC Dain”) as part of its clearing agreement for its securities-related activities, and with the Central Registration Depository (“CRD”) for regulatory purposes in connections with its investment advisory and securities-related business. The Company also maintains cash in an account with America’s Christian Credit Union (“ACCU”) as collateral for its secured borrowings. The Company classifies these accounts as restricted cash on its balance sheet.Certificates of DepositCertificates of deposit include investments in certificates of deposit held at financial institutions that carry original maturities of greater than three months. The Company had $1,757 thousand in certificates of various terms greater than three months as of December 31, 2020. The Company had no certificates of deposit with original maturities of greater than three months at December 31, 2021.Use of EstimatesThe Company’s creation of consolidated financial statements that conform to United States Generally Accepted Accounting Principles ("GAAP") requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates govern areas such as the allowance for credit losses and the fair value of financial instruments and foreclosed assets. Actual results could differ from these estimates.Investments in Joint VentureIn 2016, the Company entered into a joint venture agreement to develop and sell property we acquired as part of a Deed in Lieu of Foreclosure agreement reached with one of our borrowers. The joint venture owns a property located in Santa Clarita, California.The Company accounts for its investment in the joint venture using the equity method of accounting. Under this method, the Company records its proportionate share of the joint venture’s net income or loss in the statement of operations. On a periodic basis, or whenever events or circumstances arise that would necessitate analysis, management analyzes the Company’s investment in the joint venture for impairment. In this analysis, management compares the carrying value of the investment to the estimated value of the underlying real property. The Company records any impairment charges as a valuation allowance against the value of the asset. Management records these valuation changes as realized gains or losses on investment on the Company’s consolidated statements of operations. The Company determined that the investment in the joint venture was not impaired as of December 31, 2021.Loans ReceivableThe Company reports loans that management has the intent and ability to hold for the foreseeable future at their outstanding unpaid principal balance adjusted for an allowance for loan losses, deferred loan fees and costs, and loan discounts. Interest Accrual on Loans ReceivableThe Company accrues loan interest income daily. Management defers loan origination fees and costs generated in making a loan. The Company amortizes these fees and costs as an adjustment to the related loan yield using the interest method. Loan discounts are interest accrued and unpaid which the Company added to loan principal balances when it restructured the loan. The Company does not accrete discounts to income on impaired loans. However, when management determines that a previously impaired loan is no longer impaired, the Company begins accreting loan discounts to interest income over the term of the restructured loan. For loans purchased from third parties, loan discounts also are the differences between the purchase price and the recorded principal balance of the loan. The Company accretes these discounts to interest income over the term of the loan using the interest method.Management considers a loan impaired if it concludes that the collection of principal or interest according to the terms of the loan agreement is doubtful. The Company stops the accrual of interest when management determines the loan is impaired. For loans that the Company places on non-accrual status, management reverses all uncollected accrued interest against interest income. Management accounts for the interest on these loans on the cash basis or cost-recovery method until the loan qualifies for return to accrual status. It is not until all the principal and interest amounts contractually due are brought current and future payments are reasonably assured that the Company returns a loan to accrual status.Allowance for Loan LossesThe Company sets aside an allowance for loan losses by charging the provision for loan losses account on the Company’s consolidated statements of income. This charge decreases the Company’s earnings. Management charges off the part of loan balances it believes it will not collect against the allowance. The Company credits subsequent recoveries, if any, to the allowance.Loan Portfolio Segments and Classes Management separates the loan portfolio into portfolio segments for purposes of evaluating the allowance for loan losses. A portfolio segment is defined as the level at which the Company develops and documents a systematic method for determining its allowance for loan losses. The Company segments the loan portfolio based on loan types and the underlying risk factors present in each loan type. Management periodically reviews and revises such risk factors, as it considers appropriate. The Company’s loan portfolio consists of one segment – church loans. Management has segregated the loan portfolio into the following portfolio classes: Loan ClassClass DescriptionWholly-Owned First Collateral PositionWholly-owned loans and the retained portion of loans originated by the Company and sold for which the Company possesses a senior lien on the collateral underlying the loan.Wholly-Owned Junior Collateral PositionWholly-owned loans and the retained portion of loans originated by the Company and sold for which the Company possesses a lien on the underlying collateral that is superseded by another lien on the same collateral. This class also contains any loans that are not secured. These loans present higher credit risk than loans for which the Company possesses a senior lien due to the increased risk of loss should the loan default.Participations First Collateral PositionParticipated loans purchased from another financial entity for which the Company possesses a senior lien on the collateral underlying the loan. Loan participations purchased may present higher credit risk than wholly owned loans because disposition and direction of actions regarding the management and collection of the loans must be coordinated and negotiated with the other participants, whose best interests regarding the loan may not align with those of the Company.Participations Junior Collateral PositionParticipated loans purchased from another financial entity for which the Company possesses a lien on the underlying collateral that is superseded by another lien on the same collateral. Loan participations in the junior collateral position loans have higher credit risk than wholly owned loans and participated loans purchased where the Company possesses a senior lien on the collateral. The increased risk is the result of the factors presented above relating to both junior lien positions and participations.Allowance for Loan Loss EvaluationManagement evaluates the allowance for loan losses on a regular basis. The Company establishes the allowance for loan losses based upon its periodic review of several factors management believes influences the collectability of the loans, including: the Company’s loss history; the characteristics and volume of the loan portfolio; adverse conditions that may affect the borrower’s ability to repay;the estimated value of any secured collateral; and the current economic conditions. This evaluation is subjective, as it requires estimates that are subject to significant revision as more information becomes available.The allowance consists of general and specific components. The general component covers non-classified loans. Management bases the general reserve on the Company’s loss history adjusted for qualitative factors. These qualitative factors are significant factors management considers likely to cause estimated credit losses associated with the Company’s existing portfolio to differ from its historical loss experience. Management adjusts these factors on an on-going basis, some of which include:changes in lending policies and procedures, including changes in underwriting standards and collection;changes in national, regional, and local economic and industry conditions that affect the collectability of the portfolio, including the effects of the pandemic;changes in the volume and severity of past due loans, the volume of non-accrual loans, and the volume and severity of adversely classified loans;changes in the value of the collateral for collateral-dependent loans; andthe effect of credit concentrations.Loans that management has classified as impaired receive a specific reserve. For such loans, an allowance is established when the carrying value of that loan is higher than the amount management expects to collect. Management uses multiple approaches to determine the amount the Company expects to collect. These include the discounted cash flow method, using the loan’s underlying collateral value reduced by expected selling costs, or using the observable market price of the impaired loan.Impairment AnalysisImpaired loans include non-accrual loans, loans 90 days or more past due and still accruing, and restructured loans. Non-accrual loans are loans on which management has discontinued interest accruals. Restructured loans are loans in which the Company has granted the borrower a concession due to financial distress. Concessions are usually a reduction of the interest rate or a change in the original repayment terms. The Company monitors impaired loans on an ongoing basis as part of management’s loan review and work out process. All loans in the loan portfolio are subject to impairment analysis. The Company reviews its loan portfolio monthly by examining several data points. These include reviewing delinquency reports, any new information related to the financial condition of its borrowers, and any new appraisal or other collateral valuation. Through this process, the Company identifies potential impaired loans. Management generally deems a loan is impaired when current facts and circumstances indicate that it is probable a borrower will be unable to make payments according to the loan agreement. If management has not already deemed a loan impaired, it will classify the loan as non-accrual when it becomes 90 days or more past due.Management considers several factors when determining impairment status. These factors include the loan’s payment status, the value of any secured collateral, and the probability of collecting scheduled payments when due. Management generally does not classify loans that experience minor payment delays or shortfalls as impaired. Management determines the significance of payment delays or shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower. These circumstances include the length and reasons for the delay, the borrower's payment history, and the amount of the shortfall in relation to the principal and interest owed. Management measures impairment on a loan-by-loan basis using one of three methods:the present value of expected future cash flows discounted at the loan's effective interest rate; the obtainable market price; or the fair value of the collateral if the loan is collateral-dependent. Troubled Debt RestructuringsA troubled debt restructuring is a loan for which the Company, for reasons related to a borrower’s financial difficulties, grants a concession to a borrower that the Company would not otherwise consider. A restructuring of a loan usually involves an interest rate modification, extension of the maturity date, payment reduction, or reduction of accrued interest owed on the loan on a contingent or absolute basis.Management considers loans that it renews at below-market terms to be troubled debt restructurings if the below-market terms represent a concession due to the borrower’s troubled financial condition. The Company classifies troubled debt restructurings as impaired loans. For the loans that are not considered to be collateral-dependent, management measures troubled debt restructurings at the present value of estimated future cash flows using the loan's effective rate at start of the loan. The Company reports the change in the present value of cash flows related to the passage of time as interest income. If the loan is considered to be collateral-dependent, impairment is measured based on the fair value of the collateral.In accordance with industry standards, the Company classifies a loan as impaired if management has modified it as part of a troubled debt restructuring. However, troubled debt restructures, upon meeting certain performance conditions, are eligible to receive non-classified loan ratings (pass or watch) and to be moved out of non-accrual status. These loans continue to be included in total impaired loans but not necessarily in non-accrual or collateral-dependent loans.Section 403 of the CARES Act provides that a qualifying loan modification or extension is exempt by law from classification as a troubled debt restructuring pursuant to FASB ASC 340-10. On April 7, 2020, the Office of the Comptroller of the Currency and related financial agencies issued OCC Bulletin 2020-35, which provides further guidance regarding when a loan modification or extension is not subject to classification as a troubled debt restructuring pursuant to FASB ASC 340-10. Under section 4013 of the CARES Act, financial institutions may elect not to categorize a loan modification as a troubled debt restructuring if it is: (1)related to COVID-19; (2)executed on a loan that was not more than thirty (30) days past due as of December 31, 2019; and(3)executed between March 31, 2020, and the earlier of (A) sixty (60) days after the termination of the National Emergency or (B) December 31, 2020.* * Congress has extended the period to include the earlier of January 2, 2022 or sixty (60) days after the end of the COVID-19 national emergency pursuant to the Consolidated Appropriations Act signed on December 31, 2020. For all other loan modifications, federal agencies that regulate financial institutions have confirmed with FASB that short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to relief being extended, would not be classified as a troubled debt restructuring. This treatment includes short-term modifications including payment deferrals, fee waivers, and extension of repayment terms. The Company has relied upon the CARES Act and guidance from banking regulators related to modifications granted since the first quarter of 2020.Loan Charge-offsManagement charges off loans or portions thereof when it determines the loans or portions of the loans are uncollectible. The Company evaluates collectability periodically on all loans classified as “Loans of Lesser Quality.” Key factors management uses in assessing a loan’s collectability are the financial condition of the borrower, the value of any secured collateral, and the terms of any workout agreement between the Company and the borrower. In workout situations, the Company charges off the amount deemed uncollectible due to the terms of the workout, the inability of the borrower to make agreed upon payments, and the value of the collateral securing the loan.Credit Quality IndicatorsThe Company has established a loan grading system to assist its management in analyzing and monitoring the loan portfolio. The Company classifies loans it considers lesser quality (“classified loans”) as watch, special mention, substandard, doubtful, or loss assets. The loan grading system is as follows:Pass: The borrower has sufficient cash to fund debt services. The borrower may be able to obtain similar financing from other lenders with comparable terms. The risk of default is considered low. Watch: These loans exhibit potential or developing weaknesses that deserve extra attention from credit management personnel. If the developing weakness is not corrected or mitigated, there may be deterioration in the ability of the borrower to repay the debt in the future. Loans graded Watch must be reported to executive management and the Board of Managers. Potential for loss under adverse circumstances is elevated, but not foreseeable. Watch loans are considered pass loans.Special mention:These credit facilities exhibit potential or actual weaknesses that present a higher potential for loss under adverse circumstances, and deserve management’s close attention. If uncorrected, these weaknesses may result in deterioration of the repayment prospects for the loan at some future date.Substandard: Loans and other credit extensions bearing this grade are considered to be inadequately protected by the current sound worth and debt service capacity of the borrower or of any pledged collateral. These obligations, even if apparently protected by collateral value, have well-defined weaknesses related to adverse financial, managerial, economic, ministry, or environmental conditions which have clearly jeopardized repayment of principal and interest as originally intended. Furthermore, there is the possibility that some future loss will be sustained if such weaknesses are not corrected.Doubtful:This classification consists of loans that display the properties of substandard loans with the added characteristic that the severity of the weaknesses makes collection or liquidation in full highly questionable or improbable based upon currently existing facts, conditions, and values. The probability of some loss is very high, but because of certain important and reasonably specific factors, the amount of loss cannot be exactly determined. Such pending factors could include merger or liquidation, additional capital injection, refinancing plans, or perfection of liens on additional collateral.Loss:Loans in this classification are considered uncollectible and cannot be justified as a viable asset. This classification does not mean the loan has absolutely no recovery value, but that it is neither practical nor desirable to defer writing off this loan even though partial recovery may be obtained in the future.Revenue RecognitionThe Company recognizes two primary types of revenue: interest income and non-interest income.Interest IncomeThe Company’s principal source of revenue is interest income from loans, which is not within the scope of ASU 2014-09, Revenue from Contracts with Customers and all subsequent amendments to the ASU (collectively, "ASC 606"). Refer to the discussion in “Loans Receivable” above to understand the Company’s recognition of interest income.Non-interest IncomeNon-interest income includes revenue from various types of transactions and services provided to customers. Contracts with customers can include multiple services, which are accounted for as separate “performance obligations” if they are determined to be distinct. Our performance obligations to our customers are generally satisfied when we transfer the promised good or service to our customer, either at a point in time or over time. Revenue from a performance obligation transferred at a point in time is recognized at the time that the customer obtains control over the promised good or service. Revenue from our performance obligations satisfied over time are recognized in a manner that depicts our performance in transferring control of the good or service, which is generally measured based on time elapsed, as our customers simultaneously receive and consume the benefit of our services as they are provided.Payment for the majority of our services is considered to be variable consideration, as the amount of revenues we expect to receive is subject to factors outside of our control, including market conditions. Variable consideration is only included in revenue when amounts are not subject to significant reversal, which is generally when uncertainty around the amount of revenue to be received is resolved.Wealth advisory feesGenerally, management recognizes wealth advisory fees over time as the Company renders services to its clients. The Company receives these fees either based on a percentage of the market value of the assets under management, or as a fixed fee based on the services the Company provides to the client. The Company’s delivery of these services represents its related performance obligations. The Company typically collects the wealth advisory fees at the beginning of each quarter from the client’s account. Management recognizes these fees ratably over the related billing period as the Company fulfills its performance obligation. In addition, management recognizes any commissions or referral fees paid related to this revenue ratably over the related billing period as the Company fulfills its performance obligation.Investment brokerage feesInvestment brokerage fees arise from the selling, distribution, and trade execution services. The Company’s execution of these services fulfills its related performance obligations. The Company also offers sales and distribution services, and earns commissions through the sale of annuity and mutual fund products. The Company acts as an agent in these transactions and recognizes revenue at a point in time when the customer executes a contract with a product carrier. The Company may also receive trailing commissions and 12b-1 fees related to mutual fund and annuity products. Management recognizes this revenue in the period when it is earned, estimating the revenue if necessary based on the balance of the investment and the commission rate on the product.The Company earns and recognizes trade execution commissions on the trade date, which is when the Company fulfills its performance obligation. Payment for the trade execution is due on the settlement date.Lending FeesLending fees represent charges earned for services we provide as part of the lending process, such as late charges, servicing fees, and documentation fees. The Company recognizes late charges as earned when they are paid. The Company recognizes revenue on other lending fees in the period in which the Company has performed the service.Gains on sales of loans receivableFrom time to time, the Company sells participation interests in loans receivable that it services. Upon completion of the loan sale, the Company recognizes a gain based on certain factors including the maturity date of the loan, the percentage of the loan sold and retained, and the servicing rate charged to the participant on the sold portion.Gains on debt extinguishmentGains on debt extinguishment arise from agreements reached with the Company’s lenders to reduce the principal amount on outstanding debt. The amount of the gain is determined by the difference between the cash paid and the amount of principal and interest that is relieved as stipulated by the agreement. Gains/losses on sales of foreclosed assetsThe Company records a gain or loss from the sale of foreclosed assets 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 a foreclosed asset to the buyer, the Company assesses whether the buyer is committed to perform their obligation under the contract and whether collectability of the transaction price is probable, among other factors. Once these criteria are met, the foreclosed asset 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 price and related gain (loss) on sale if a significant financing component is present. Other non-interest incomeOther non-interest income includes fees earned based on service contracts the Company has entered into with credit unions. The Company recognizes the revenue monthly based on the terms of the contracts, which require monthly payments for services the Company performs.Foreclosed AssetsManagement records assets acquired through foreclosure or other proceedings at fair market value less estimated costs of disposal. Management determines the fair value at the date of foreclosure, which establishes a new cost for the asset. After foreclosure, the Company carries the asset at the lower of cost or fair value, less estimated costs of disposal. Management evaluates these real estate assets regularly to ensure that the recorded amount is supported by the current fair value and, if necessary, ensuring that valuation allowances reduce the carrying amount to fair value less estimated costs of disposal. Revenue and expense from the operation of the Company’s foreclosed assets and changes in the valuation allowance are included in net expenses from foreclosed assets. When the Company sells the foreclosed property, it recognizes a gain or loss on the sale equal to the difference between the net sales proceeds received and the carrying amount of the property.Transfers of Financial AssetsManagement accounts for transfers of financial assets as sales when the Company has surrendered control over the asset. Management deems the Company has surrendered control over transferred assets when:the assets have been isolated from the Company;the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred asset; and the Company does not maintain effective control over the transferred asset through an agreement to repurchase it before its maturity.The Company, from time to time, sells participation interests in mortgage loans it has originated or acquired. In order to recognize the transfer of a portion of a financial asset as a sale, the transferred portion, and any portion that continues to be held by the transferor must represent a participating interest, and the transfer of the participating interest must meet the conditions for surrender of control. To qualify as a participating interest:each portion of a financial asset must represent a proportionate ownership interest in an entire financial asset; from the date of transfer, all cash flows received from the entire financial |
Pledged Cash and Restricted Cas
Pledged Cash and Restricted Cash | 12 Months Ended |
Dec. 31, 2021 | |
Pledged Cash and Restricted Cash [Abstract] | |
Pledged Cash and Restricted Cash | Note 2. Pledged Cash and Restricted CashUnder the terms of its debt agreements, the Company has the ability to pledge cash as collateral for its borrowings. At December 31, 2021 and December 31, 2020, the Company did not pledge cash for its term-debt or lines of credit. At December 31, 2021, the Company had $17 thousand in cash pledged as collateral for its secured borrowings. See Note 3: Related Party Transactions for additional details. This amount is included in restricted cash in the table below.The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the statement of financial position to the amounts reported in the statements of cash flows (dollars in thousands): December 31, 2021 2020Cash and cash equivalents $ 28,080 $ 21,922Restricted cash 69 51Total cash, cash equivalents, and restricted cash shown in the statements of cash flows $ 28,149 $ 21,973Other amounts included in restricted cash represent those required to be set aside with the Central Registration Depository ("CRD") account with FINRA, as well as funds the Company has deposited with RBC Dain as clearing deposits. The Company may only use the CRD funds for certain fees charged by FINRA. These fees are paid to maintain the membership status of the Company or are related to the licensing of registered and associated persons of the Company. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 3. Related Party TransactionsTransactions with Equity OwnersTransactions with Evangelical Christian Credit Union (“ECCU”)The tables below summarize transactions the Company conducts with ECCU, the Company’s largest equity owner.Related party balances pertaining to the assets of the Company (dollars in thousands): December 31, December 31, 2021 2020Total funds held on deposit at ECCU $ 3,797 $ 7,414Loan participations purchased from and serviced by ECCU 242 256 Related party transactions of the Company (dollars in thousands): Years ended December 31, 2021 2020Interest earned on funds held with ECCU $ 2 $ 18Interest income earned on loans purchased from ECCU 15 15Loans sold to ECCU — 1,164Fees paid to ECCU from MP Securities Networking Agreement 8 7Income from Successor Servicing Agreement with ECCU 9 9Rent expense on lease agreement with ECCU 146 146Loan participation interests purchased:In the past, the Company purchased loan participation interests from ECCU. Management negotiated the pass-through interest rates on these loans on a loan-by-loan basis. Management believes these negotiated terms were equivalent to those that would prevail in an arm's length transaction. The Company did not purchase any loans from ECCU during the years ended December 31, 2021 and 2020.Loans sold:From time to time, the Company may sell loans to ECCU. On January 23, 2020, the Company sold an impaired loan to ECCU in order to recoup its recorded investment in the loan. The Company sold no loans to ECCU during the year ended December 31, 2021.Lease and Services Agreement:The Company leases its corporate offices and purchases other facility-related services from ECCU pursuant to a written lease and services agreement. Management believes these terms are equivalent to those that prevail in arm's length transactions.MP Securities Networking Agreement with ECCU:MP Securities, the Company’s wholly-owned subsidiary, has entered into a Networking Agreement with ECCU pursuant to which MP Securities agreed to offer investment and insurance products and services to ECCU’s members that:(1) ECCU or its Board of Directors has approved; (2) comply with applicable investor suitability standards required by federal and state securities laws and regulations; (3) are offered in accordance with National Credit Union Administration (“NCUA”) rules and regulations; and (4) comply with its membership agreement with Financial Industry Regulation Authority (“FINRA”). The agreement entitles MP Securities to pay ECCU a percentage of total revenue received by MP Securities from transactions conducted for or on behalf of ECCU members. Either ECCU or MP Securities may terminate the Networking Agreement without cause upon thirty days prior written notice.Successor Servicing Agreement with ECCU:On October 5, 2016, the Company entered into a Successor Servicing Agreement with ECCU. This agreement obligates the Company to serve as the successor loan servicing agent for certain mortgage loans designated by ECCU. The Company will service these loans in the event ECCU requests that the Company assume its obligation to act as the servicing agent for those loans. The original Agreement terminated in October 2019 and has converted to a month-to-month agreement. The agreement was terminated at the request of ECCU in January 2022.Transactions with America’s Christian Credit Union (“ACCU”)The Company has several related party agreements with ACCU, one of the Company’s equity owners. The following describes the nature and dollar amounts of the material related party transactions with ACCU.Related party balances pertaining to the assets of the Company (dollars in thousands): December 31, December 31, 2021 2020Total funds held on deposit at ACCU $ 4,083 $ 7,846Dollar amount of outstanding loan participations sold to ACCU and serviced by the Company 1,830 —Amount owed on ACCU secured borrowings 17 —Amount owed on ACCU line of credit 2,000 —Loans pledged on ACCU line of credit 6,768 — Related party transactions of the Company (dollars in thousands): Years ended December 31, 2021 2020Interest earned on funds held with ACCU $ 21 $ 76Loans sold to ACCU 1,000 1,307Dollar amount of secured borrowings made from ACCU 17 —Dollar amount of draws on ACCU line of credit 2,000 —Interest expense on ACCU borrowings 22 —Interest income earned on loans purchased from ACCU — 61Income from broker services provided to ACCU by MPS 46 36Fees paid based on MP Securities Networking Agreement with ACCU 84 101Loan participation interests purchased:The Company negotiates pass-through interest rates on loan participation interests purchased from ACCU on a loan-by-loan basis. Management believes these terms are equivalent to those that prevail in arm's length transactions. The Company did not purchase any loans from ACCU during the years ended December 31, 2021 and 2020.Loan participation interests sold:From time to time, the Company sells loan participation interests in loans it originates and services to ACCU. The Company negotiates pass-through interest rates on loan participation interests sold to ACCU on a loan-by-loan basis. Management believes these terms are equivalent to those that prevail in arm's length transactions.Effective August 9, 2021, the Company entered into a Master Loan Participation Purchase and Sale Agreement (“the Master LP Agreement”) with ACCU. The Master LP Agreement is intended to facilitate the sale to ACCU of small participation interests in the Company’s originated loans. As a part of any transaction conducted under the Master LP Agreement, the borrower of the loan being sold would become a member of ACCU, thereby meeting the requirements of NCUA regulations that govern loan participation purchases by credit unions. This allows the Company to sell additional participations in the loan to other credit unions. Sales made under the Master LP Agreement are done on a recourse basis, requiring the Company to repurchase the participation interest in the event of default by the borrower. Under a separate Deposit Control Agreement reached in conjunction with the Master LP Agreement, the Company deposits cash on a one-to-one basis as collateral to secure the participation interest sold to ACCU. This cash is considered restricted cash. The Company retains the ability to sell loan participation interests to ACCU outside of the Master LP Agreement.As of December 31, 2021, $17.0 thousand had been sold and was outstanding under this agreement. This has been classified on the balance sheet as secured borrowings. The Company has deposited $17.0 thousand in an account at ACCU as collateral for these borrowings. MP Securities networking agreement with ACCU:MP Securities has entered into a Networking Agreement with ACCU pursuant to which MP Securities has agreed to offer investment and insurance products and services to ACCU’s members that:(1) ACCU or its Board of Directors has approved; (2) comply with applicable investor suitability standards required by federal and state securities laws and regulations; (3) are offered in accordance with NCUA rules and regulations; and (4) comply with its membership agreement with FINRA. The agreement entitles MP Securities to pay ACCU a percentage of total revenue received by MP Securities from transactions conducted for or on behalf of ACCU members. Either ACCU or MP Securities may terminate the Networking Agreement without cause upon thirty days prior written notice.Line of Credit:On September 23, 2021, the Company entered into a Loan and Security Agreement with ACCU. The ACCU line of credit (“ACCU LOC”) is a $5.0 million short-term demand facility with a maturity date of September 23, 2022. See Note 10: Credit Facilities and Other Debt for additional terms and conditions. Management believes these terms are equivalent to those that prevail in arm's length transactions. As of December 31, 2021, there were $2.0 million in borrowings outstanding on the ACCU line of credit. Transactions with Kane County Teachers Credit Union (“KCT”)Our Board Chairperson, R. Michael Lee, serves as the Chief Executive Officer and President of KCT. The following describes the nature and dollar amounts of the material related party transactions with KCTCU (dollars in thousands). December 31, December 31, 2021 2020Total funds held on deposit at KCT$ 1,018 $ 1,019Loans pledged on KCT line of credit 8,492 —Outstanding loan participations sold to KCT and serviced by the Company 4,598 1,844 Years ended December 31, 2021 2020Interest earned on funds held with KCT $ 18 $ 22Loans sold to KCT 2,847 —Dollar amount of draws on KCT line of credit 3,825 —Interest expense on KCT line of credit 40 —Fees paid based on MP Securities Networking Agreement with KCT 35 12 Funds on deposit with KCTOn January 13, 2020, the Company purchased $1.0 million of certificates of deposit from KCT. The certificates matured on October 13, 2021 and were not renewed. Line of Credit:On September 30, 2020, the Company entered into a Loan and Security Agreement with KCT. The KCT line of credit (“KCT LOC”) is a $7.0 million short-term demand facility with a maturity date ending September 30, 2022. See Note 10: Credit Facilities and Other Debt for additional terms and conditions. As of December 31, 2020 and December 31, 2021, the Company did not have an outstanding balance on the line. MP Securities Networking Agreement:MP Securities, the Company’s wholly-owned subsidiary, has entered into a Networking Agreement with KCT pursuant to which MP Securities agreed to offer investment and insurance products and services to KCT’s members that:(1)KCT or its Board of Directors has approved; (2)comply with applicable investor suitability standards required by federal and state securities laws and regulations; (3)are offered in accordance with National Credit Union Administration (“NCUA”) rules and regulations; and (4)comply with its membership agreement with FINRA.The agreement entitles MP Securities to pay KCT a percentage of total revenue received by MP Securities from transactions conducted for or on behalf of KCT members. Either KCT or MP Securities may terminate the Networking Agreement without cause upon thirty days prior written notice. Loan Participation Interests Sold:Occasionally the Company sells loan participation interests to KCT in the normal course of business. The Company retains the right to service these participation loans sold to KCT, and it charges KCT a customary fee for servicing the loan.Transactions with Other Equity OwnersFrom time to time the Company will engage in transactions with other owners or related parties. Related party balances pertaining to the assets of the Company are as follows (dollars in thousands): December 31, December 31, 2021 2020Outstanding loan participations sold to UFCU and serviced by the Company$ 4,275 $ 4,323Outstanding loan participations sold to NFCU and serviced by the Company 4,991 1,863Outstanding notes payable to officers and managers 261 316Loan Participations Sold:The Company has a Loan Participation Agreement with UNIFY Financial Credit Union (“UFCU”), an owner of both the Company’s Class A Common Units and Series A Preferred Units. Under this agreement, the Company sold UFCU a $5.0 million loan participation interest in one of its mortgage loan interests on August 14, 2013. As part of this agreement, the Company retained the right to service the loan, and it charges UFCU a fee for servicing the loan. Management believes the terms of the agreement are equivalent to those that prevail in arm's length transactions.The Company has also entered into a Loan Participation Agreement with Navy Federal Credit Union (“NFCU”), an owner of both the Company’s Class A Common Units and Series A Preferred Units. Under this agreement, the Company sold NFCU a $5.0 million loan participation interest in one of its construction loans on March 20, 2020. As part of this agreement, the Company retained the right to service the loan, and it charges NFCU a fee for servicing the loan. Management believes the terms of the agreement are equivalent to those that prevail in arm's length transactions.Investor Notes Sold:From time to time, the Company’s Board and members of its executive management team have purchased investor notes from the Company or have purchased investment products through MP Securities. Investor notes payable owned by related parties totaled $261 thousand and $480 thousand at December 31, 2021 and December 31, 2020. Transactions with SubsidiariesThe Company has entered into several agreements with its subsidiary, MP Securities. The Company eliminates the income and expense related to these agreements in the consolidated financial statements. MP Securities serves as the managing broker for the Company’s public and private placement note offerings. MP Securities receives compensation related to these broker-dealer services ranging from 0.25% to 5.50% over the life of a note. The amount of the compensation depends on the length of the note and the terms of the offering under which MP Securities sold the note.The Company also has entered into an Administrative Services Agreement with MP Securities. The Administrative Services Agreement provides services such as the use of office space, use of equipment, including computers and phones, and payroll and personnel services. The agreement stipulates that MP Securities will provide ministerial, compliance, marketing, operational, and investor relations-related services in relation to the Company’s investor note program. As stated above, the Company eliminates all intercompany transactions related to this agreement in its consolidated financial statements. The Company’s subsidiary, MPF, serves as the collateral agent for the Company’s Secured Notes. The Company’s Prospectus for its Class 1A Notes and the private placement memorandum for the Company’s Secured Notes Offering describe the terms of these agreements.Related Party Transaction PolicyThe Board has adopted a Related Party Transaction Policy to assist in evaluating transactions the Company may enter into with a related party. Under this policy, a majority of the members of the Company’s Board and majority of its independent Board members must approve a material transaction that it enters into with a related party. As a result, all transactions that the Company undertakes with an affiliate or a related party are entered into on terms believed by management to be no less favorable than are available from unaffiliated third parties. In addition, a majority of the Company’s independent Board members must approve these transactions. |
Loans Receivable and Allowance
Loans Receivable and Allowance for Loan Losses | 12 Months Ended |
Dec. 31, 2021 | |
Loans Receivable and Allowance for Loan Losses [Abstract] | |
Loans Receivable and Allowance for Loan Losses | Note 4. Loans Receivable and Allowance for Loan LossesThe Company’s loan portfolio is comprised of one segment – church loans. See “Note 1 – Loan Portfolio Segments and Classes” to the Financial Statements. The loans fall into four classes:wholly-owned loans for which the Company possesses the first collateral position;wholly-owned loans that are either unsecured or for which the Company possesses a junior collateral position; participated loans purchased for which the Company possesses the first collateral position; and participated loans purchased for which the Company possesses a junior collateral position.The Company makes all of its loans to various evangelical churches and related organizations, primarily to purchase, construct, or improve facilities. Loan maturities extend through 2036. The loan portfolio had a weighted average rate of 6.21% and 6.55% as of December 31, 2021 and December 31, 2020, respectively. Loans receivable include $17.0 thousand in loan participations transferred under a recourse agreement.The table below is a summary of the Company’s mortgage loans owned (dollars in thousands): December 31, December 31, 2021 2020Loans to evangelical churches and related organizations: Real estate secured $ 98,858 $ 118,203Other secured 425 —Unsecured 122 144Total loans 99,405 118,347Deferred loan fees, net (304) (481)Loan discount (220) (229)Allowance for loan losses (1,638) (1,516)Loans, net $ 97,243 $ 116,121Allowance for Loan LossesManagement believes it has properly calculated the allowance for loan losses as of December 31, 2021 and December 31, 2020. The following table shows the changes in the allowance for loan losses for the years ended December 31, 2021 and 2020 (dollars in thousands): December 31, December 31, 2021 2020Balance, beginning of period $ 1,516 $ 1,393Provision (credit) for loan loss 122 188Chargeoffs — (65)Recoveries — —Balance, end of period $ 1,638 $ 1,516 The table below presents loans by portfolio segment (church loans) and the related allowance for loan losses. In addition, the table segregates loans and the allowance for loan losses by impairment methodology (dollars in thousands): Loans and Allowancefor Loan Losses (by segment) As of December 31, December 31, 2021 2020Loans: Individually evaluated for impairment $ 9,688 $ 6,181Collectively evaluated for impairment 89,717 112,166Balance $ 99,405 $ 118,347 Allowance for loan losses: Individually evaluated for impairment $ 631 $ 290Collectively evaluated for impairment 1,007 1,226Balance $ 1,638 $ 1,516The Company has established a loan grading system to assist management in their analysis and supervision of the loan portfolio. The following tables summarize the credit quality indicators by loan class (dollars in thousands): Credit Quality Indicators (by class)As of December 31, 2021 Wholly-Owned First Wholly-Owned Junior Participation First Participation Junior TotalGrade: Pass $ 67,580 $ 2,007 $ 172 $ — $ 69,759Watch 19,858 30 70 — 19,958Special mention — — — — —Substandard 7,535 1,650 — — 9,185Doubtful 503 — — — 503Loss — — — — —Total $ 95,476 $ 3,687 $ 242 $ — $ 99,405 Credit Quality Indicators (by class)As of December 31, 2020 Wholly-Owned First Wholly-Owned Junior Participation First Participation Junior TotalGrade: Pass $ 83,494 $ 1,789 $ 201 $ — $ 85,484Watch 24,710 1,716 256 — 26,682Special mention — — — — —Substandard 5,677 — — — 5,677Doubtful 504 — — — 504Loss — — — — —Total $ 114,385 $ 3,505 $ 457 $ — $ 118,347 The following table sets forth certain information with respect to the Company’s loan portfolio delinquencies by loan class and amount (dollars in thousands): Age Analysis of Past Due Loans (by class)As of December 31, 2021 30-59 Days Past Due 60-89 Days Past Due Greater Than 90 Days Total Past Due Current Total Loans Recorded Investment 90 Days or more and Accruing Church loans: Wholly-Owned First $ — $ — $ 503 $ 503 $ 94,973 $ 95,476 $ —Wholly-Owned Junior — — — — 3,687 3,687 —Participation First — — — — 242 242 —Participation Junior — — — — — — —Total $ — $ — $ 503 $ 503 $ 98,902 $ 99,405 $ — Age Analysis of Past Due Loans (by class)As of December 31, 2020 30-59 Days Past Due 60-89 Days Past Due Greater Than 90 Days Total Past Due Current Total Loans Recorded Investment 90 Days or more and Accruing Church loans: Wholly-Owned First $ 2,704 $ — $ 4,185 $ 6,889 $ 107,496 $ 114,385 $ —Wholly-Owned Junior — — — — 3,505 3,505 —Participation First — — — — 457 457 —Participation Junior — — — — — — —Total $ 2,704 $ — $ 4,185 $ 6,889 $ 111,458 $ 118,347 $ —Impaired LoansThe following tables are summaries of impaired loans by loan class as of and for the years ended December 31, 2021 and 2020, respectively. The unpaid principal balance reflects the contractual principal outstanding on the loan. Included in the balance of impaired loans are troubled debt restructurings that have been performing and have been upgraded to pass or watch since the modification date. The recorded balance reflects the unpaid principal balance less any interest payments that have been recorded against principal. The recorded investment reflects the recorded balance, plus accrued interest, less discounts taken. The related allowance reflects specific reserves taken on the impaired loans (dollars in thousands): Impaired Loans (by class) As of December 31, 2021 For the year endedDecember 31, 2021 Unpaid Principal Balance Recorded Balance Recorded Investment Related Allowance Average Recorded Investment Interest Income RecognizedWith no allowance recorded: Church loans: Wholly-Owned First $ 9,468 $ 9,468 $ 9,339 $ — $ 9,390 $ 524Wholly-Owned Junior 1,685 1,650 1,650 — 1,668 —Participation First — — — — — —Participation Junior — — — — — —With an allowance recorded: Church loans: Wholly-Owned First 1,437 1,393 1,371 631 1,382 58Wholly-Owned Junior — — — — — —Participation First — — — — — —Participation Junior — — — — — —Total: Church loans $ 12,590 $ 12,511 $ 12,360 $ 631 $ 12,440 $ 582 Impaired Loans (by class) As of December 31, 2020 For the year endedDecember 31, 2020 Unpaid Principal Balance Recorded Balance Recorded Investment Related Allowance Average Recorded Investment Interest Income RecognizedWith no allowance recorded: Church loans: Wholly-Owned First $ 9,856 $ 9,791 $ 9,632 $ — $ 9,674 $ 357Wholly-Owned Junior — — — — — —Participation First — — — — — —Participation Junior — — — — — —With an allowance recorded: Church loans: Wholly-Owned First 290 290 290 290 290 —Wholly-Owned Junior — — — — — —Participation First — — — — 296 11Participation Junior — — — — — —Total: Church loans $ 10,146 $ 10,081 $ 9,922 $ 290 $ 10,260 $ 368 A summary of non-accrual loans by loan class is as follows (dollars in thousands): Loans on Non-accrual Status (by class) December 31, 2021 December 31, 2020Church loans: Wholly-Owned First $ 6,162 $ 6,405Wholly-Owned Junior 1,650 —Participation First — 1,230Participation Junior — —Total 7,812 $ 7,635 Beginning in April, 2020, the Company has taken measures to assist borrowers adversely affected by COVID-19 by deferring principal and/or interest payments. The concessions granted meet the qualifications under Section 4013 of the CARES Act, and, as a result, the Company has elected not to account for these modifications as troubled debt restructurings. The Company granted these concessions to 35 borrowers during the year ended December 31, 2020, representing an outstanding loan principal balance of $47.8 million. As of December 31, 2020, three loans with a total outstanding principal balance of $13.2 million were still in the deferral period. One of these loans was further restructured during the year ended December 31, 2021 as a troubled debt restructuring that did not qualify as a CARES Act deferral. The Company restructured one loan during the year ended December 31, 2021 that qualified as a CARES Act modification and was not accounted for as a troubled debt restructuring. This loan had an outstanding balance of $1.3 million at the time of the modification. The borrower resumed making contractual payment prior to December 31, 2021. As of December 31, 2021, no loans were under CARES Act deferrals.In addition, the Company restructured one loan during the year ended December 31, 2020 that did not qualify for COVID-19 accounting treatment. The Company restructured two loans during the year ended December 31, 2021. A summary of troubled debt restructures by loan class during the years ended December 31, 2021 and 2020 is as follows (dollars in thousands): Troubled Debt Restructurings (by class)For the year ended December 31, 2021 Number of Loans Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Recorded Investment At Period EndChurch loans: Wholly-Owned First 2 $ 5,387 $ 5,387 $ 5,313Wholly-Owned Junior — — — —Participation First — — — —Participation Junior — — — —Total 2 $ 5,387 $ 5,387 $ 5,313 Troubled Debt Restructurings (by class)For the year ended December 31, 2020 Number of Loans Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Recorded Investment At Period EndChurch loans: Wholly-Owned First 1 $ 1,936 $ 1,955 $ 1,947Wholly-Owned Junior — — — —Participation First — — — —Participation Junior — — — —Total 1 $ 1,936 $ 1,955 $ 1,947The Company had two previously restructured loans that were past maturity as of December 31, 2021. The Company has entered into forbearance agreements with the borrowers and is evaluating what actions it should undertake to protect its investment on these loans. These forbearance agreements include reduced monthly payment amounts and additional reporting requirements. One of the loans restructured during the year ended December 31, 2021 subsequently defaulted. For loans modified in a troubled debt restructuring, the Company monitors borrower performance according to the terms of the restructure to determine whether there are any early indicators for future default. Management regularly evaluates loans modified in a troubled debt restructuring for potential further impairment and will make adjustments to the risk ratings and specific reserves associated with troubled debt restructurings as deemed necessary.As of December 31, 2021, no additional funds were committed to be advanced in connection with loans modified as troubled debt restructurings. |
Investments in Joint Venture
Investments in Joint Venture | 12 Months Ended |
Dec. 31, 2021 | |
Investments in Joint Venture [Abstract] | |
Investments in Joint Venture | Note 5. Investments in Joint VentureIn December 2015, the Company finalized an agreement with Intertex Property Management, Inc., a California corporation, to enter into a joint venture to form Tesoro Hills, LLC (the “Valencia Hills Project”). Intertex is a managing member of the LLC, with authority to direct operations. The Company is a non-managing member with no authority beyond limited rights granted to the Company by the operating agreement. The Valencia Hills Project is a joint venture that will develop and market property formerly classified by the Company as a foreclosed asset. In January 2016, the Company transferred ownership in the foreclosed asset to the Valencia Hills Project. In addition, the Company reclassified the carrying value of the property from foreclosed assets to an investment in a joint venture. The Company’s initial investment in the joint venture was $900 thousand and represented 100% of the ownership of the joint venture. The Company's ownership percentage in the joint venture was 74% as of December 31, 2021 and 2020. The value of the Company’s investment in the joint venture was $882 thousand and $884 thousand, as of December 31, 2021 and 2020 respectively. Management’s impairment analysis of the investment as of December 31, 2021 has determined that the investment is not impaired. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2021 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | Note 6. Revenue RecognitionThe Company recognizes two primary types of revenue: interest income and non-interest income. The following tables reflect the Company’s non-interest income disaggregated by financial statement line item. Items outside of scope of ASC 606 are noted as such (dollars in thousands): December 31, 2021 2020Non-interest income, in scope of ASC 606 Broker-dealer fees and commissions $ 878 $ 762Gains on loan sales 64 69Gain on sale of foreclosed assets 44 —Lease income — 51Other non-interest income 9 9Non-interest income, out of scope, ASC 606 Lending fees 207 154Gain on debt extinguishment 2,398 2,400Total non-interest income $ 3,600 $ 3,445 In accordance with our accounting policies as governed by ASC 606, Revenue from Contracts with Customers, the following table separates revenue from contracts with customers into categories that are based on the nature, amount, timing, and uncertainty of revenue and cash flows associated with each product and distribution channel. Non-interest revenue earned by the Company’s broker-dealer subsidiary, MP Securities, comprises security commissions, sale of investment company shares, insurance product revenue, and advisory fee income. Security commission revenue represents the sale of over-the-counter stock, unit investment trusts, and variable annuities. The revenue earned from the sale of these products is recognized upon satisfaction of performance obligations, which occurs on the trade date and is considered transactional revenue. The Company also earns revenue from the management of invested assets, which is recognized monthly, as earned, based on the average asset value, and is referred to as Assets Under Management revenue (“AUM”). (dollars in thousands) For the twelve months ended December 31, 2021 December 31, 2020Broker-dealer revenue Securities commissions Transactional $ 131 $ 188AUM 40 33 171 221Sale of investment company shares Transactional 34 57AUM 98 73 132 130Other insurance product revenue Transactional 187 49AUM 48 48 235 97Advisory fee income Transactional — 4AUM 340 310 340 314Total broker-dealer revenue Transactional 352 298AUM 526 464 $ 878 $ 762 |
Loan Transfers and Servicing
Loan Transfers and Servicing | 12 Months Ended |
Dec. 31, 2021 | |
Loan Transfers and Servicing [Abstract] | |
Loan Transfers and Servicing | Note 7. Loan Transfers and ServicingA summary of loan participation sales and servicing assets are as follows (dollars in thousands): As of and for the years ended December 31, December 31, 2021 2020Participation loans interests sold by the Company during the year $ 14,053 $ 17,106Total participation interests sold and serviced by the Company 46,056 37,962Servicing income 189 143 Servicing Assets Balance, beginning of period $ 147 $100Additions: Servicing obligations from sale of loan participations 81 99Subtractions: Amortization (58) (52)Balance, end of period $ 170 $ 147 During the year ended December 31, 2020, the Company sold to ACCU two participations in loans it had previously purchased from ACCU. These participations totaled $1.6 million. During the year ended December 31, 2020, the Company sold back to ECCU one participation in a loan it had previously purchased from ECCU. This participation totaled $1.2 million. ACCU Loan Participation AgreementAs detailed in Note 3: Related Party Transactions, effective August 9, 2021, the Company entered into a Master Loan Participation Purchase and Sale Agreement with ACCU. Sales made under the Master LP Agreement will be done on a recourse basis, requiring the Company to repurchase the participation interest in the event of default by the borrower.During the year ended December 31, 2021, the Company sold two loan participations to ACCU under the provisions of the Master LP Agreement. Due to the recourse provisions of the agreement, the $17.0 thousand in participation sales outstanding at December 31, 2021 are classified as secured borrowings and are presented separately on the Company’s balance sheet. |
Foreclosed Assets
Foreclosed Assets | 12 Months Ended |
Dec. 31, 2021 | |
Foreclosed Assets [Abstract] | |
Foreclosed Assets | Note 8: Foreclosed AssetsThe Company’s investment in foreclosed assets consisted of one property that was valued at $301 thousand at December 31, 2021 and 2020. There was no allowance for losses on foreclosed assets at December 31, 2021 and 2020. The Company did not record any loss provisions on foreclosed assets during the years ended December 31, 2021 and 2020. During the year ended December 31, 2021, the Company sold a residential property it had acquired in a foreclosure action that had previously been completely written off. The Company realized a gain of $44 thousand on this sale.Expenses and income applicable to foreclosed assets include the following (dollars in thousands): Foreclosed Asset Expensesfor the years endedDecember 31, 2021 2020Provision for losses $ — $ —Operating expenses 22 11Total expenses $ 22 $ 11 |
Premises and Equipment
Premises and Equipment | 12 Months Ended |
Dec. 31, 2021 | |
Premises and Equipment [Abstract] | |
Premises and Equipment | Note 9. Premises and EquipmentThe tables below summarize our premises and equipment (dollars in thousands): As of December 31, December 31, 2021 2020 Furniture and office equipment $ 522 $ 521Computer system 214 214Leasehold improvements 43 43Total premises and equipment 779 778Less accumulated depreciation and amortization (607) (559)Premises and equipment, net $ 172 $ 219 2021 2020 Depreciation and amortization expense for the years ended December 31, $ 48 $ 52 |
Credit Facilities and Other Deb
Credit Facilities and Other Debt | 12 Months Ended |
Dec. 31, 2021 | |
Credit Facilities, Other Debt and Investor Notes Payable [Abstract] | |
Credit Facilities and Other Debt | Note 10. Credit Facilities and Other DebtDetails of the Company’s debt facilities as of December 31, 2021 are as follows (dollars in thousands): Nature of Borrowing Interest Rate Interest Rate Type Amount Outstanding Monthly Payment Maturity Date Loan Collateral Pledged Cash PledgedTerm Loan 2.525% Fixed $ 32,749 $ 450 11/1/2026 $ 39,680 $ —KCT LOC 3.750% Variable — — 9/30/2022 8,492 —ACCU LOC 4.000% Variable 2,000 — 9/23/2022 6,768 —ACCU Secured 4.750% Fixed 17 — 7/1/2026 — 17 Term-Debt Credit FacilityThe Company has one secured term-debt credit facility. The facility is non-revolving and does not have an option to renew or extend additional credit. Additionally, the facility does not contain a prepayment penalty. Under the terms of the credit facility, the Company must maintain a minimum collateralization ratio of at least 120%. If at any time the Company fails to maintain its required minimum collateralization ratio, it will be required to deliver cash or qualifying mortgage loans in an amount sufficient to enable us to meet its obligation to maintain a minimum collateralization ratio. The collateral securing the facility at December 31, 2021 and December 31, 2020 satisfied the 120% minimum. As of December 31, 2021 and 2020, the Company has only pledged qualifying mortgage loans as collateral on the credit facility. In addition, the credit facility includes a number of borrower covenants. The Company is in compliance with these covenants as of December 31, 2021 and December 31, 2020, respectively. On March 5, 2021, the Company made a large principal payment on this facility. See Note 20. Subsequent Events for additional information concerning the transaction. Previously, the Company had an additional term-debt credit facility that carried the same terms as the facility it currently has. On September 25, 2020, the Company reached an agreement with the note holder to pay off the entire outstanding contractual principal balance of $15.0 million. The Company realized $2.4 million in gains on the extinguishment of debt because of this agreement. The Company was in compliance with its covenants and its minimum collateralization ratio on the facility at December 31, 2019 and at the time of the payoff.Future principal contractual payments of the Company’s borrowings from financial institutions during the twelve-month periods ending December 31, are as follows (dollars in thousands): 2022 $ 3,7372023 3,9782024 4,1882025 4,4172026 16,429 $ 32,749Paycheck Protection Program LoanOn April 27, 2020, MP Securities applied for and received a Paycheck Protection Program loan (“PPP Loan”) granted under the CARES Act in the amount of $111 thousand. According to the terms of the program, as administered by the Small Business Association (“SBA”), payments on the loan were deferred and deferred interest was capitalized into the principal balance of the loan. In addition, qualifying amounts of the principal balance of the loan and deferred interest were eligible to be forgiven if MP Securities retained employees and maintained salary levels for its existing employees. On March 5, 2021, the SBA forgave all principal and accrued interest due on this loan.KCT Line of CreditOn September 30, 2020, Ministry Partners Investment Company, LLC, entered into a Loan and Security Agreement with KCT Credit Union, an Illinois state-chartered financial institution. The KCT LOC is a $7.0 million short-term demand credit facility that originally had a one-year maturity date of September 30, 2021. The interest rate on the facility is equal to the United States Prime Rate plus 0.50%. The interest rate was 3.75% on December 31, 2021. The KCT LOC automatically renewed on September 30, 2021, and will automatically renew for another one-year term unless either party furnishes written notice at least thirty (30) days prior to the termination date that it does not intend to renew the agreement. The Company may draw funds on the KCT LOC at any time until the line is fully drawn. However, the KCT LOC may only be used to warehouse loans until they are sold to participants. Repayment of each advance is due one hundred and twenty (120) days after the advance is made or earlier in the event that a collateral loan becomes more than sixty (60) days delinquent and the Company fails to cure such deficiency. To secure its obligations under the KCT LOC, the Company has agreed to grant a priority first lien and security interest in certain of its mortgage loan investments and maintain a minimum collateralization ratio measured by taking outstanding balance of mortgage notes pledged under the facility as compared to the total amount of principal owed on the KCT LOC. The collateralization ratio must equal at least 120%. The KCT LOC contains typical affirmative covenants for a credit facility of this nature. The Company was in compliance with these covenants at December 31, 2021. As of December 31, 2021, the Company did not have an outstanding balance on the KCT LOC. A total of $8.5 million and $7.2 million in loans were pledged on this facility as of December 31, 2021 and 2020, respectively.ACCU Line of CreditOn September 23, 2021, Ministry Partners Investment Company, LLC, entered into a Loan and Security Agreement with ACCU (“ACCU LOC”). The ACCU LOC is a revolving $5.0 million short-term demand credit facility with a one-year maturity date of September 23, 2022. The facility carried an outstanding balance of $2.0 million at September 30, 2021. The interest rate on the facility is equal to the Prime Rate as published in the Wall Street Journal plus 0.75%. The interest rate on the ACCU LOC was 4.00% on December 31, 2021. This rate will be adjusted on January 10th each year to account for the current Prime Rate but cannot be adjusted below 4.00%. The ACCU LOC will automatically renew for one additional one-year term unless either party furnishes written notice at least thirty (30) days prior to the termination date that it does not intend to renew the agreement. The Company may draw funds on the ACCU LOC at any time until the line is fully drawn. All outstanding principal and interest amounts are due on the maturity date. To secure its obligations under the ACCU LOC, the Company has agreed to grant a priority first lien and security interest in certain of its mortgage loan investments and maintain a minimum collateralization ratio measured by taking outstanding balance of mortgage notes pledged under the facility as compared to the total amount of principal owed on the ACCU LOC. The minimum ratio must equal at least 120%. The Company must also maintain minimum liquidity that equals or exceeds $10.0 million at all times during the term of the loan. The ACCU LOC contains typical affirmative covenants for a credit facility of this nature. The Company was in compliance with these covenants at December 31, 2021. A total of $6.8 million in loans were pledged on this facility as of December 31, 2021.ACCU Secured BorrowingsAs detailed in Note 3: Related Party Transactions, on August 9, 2021, the Company entered into a Master Loan Participation Purchase and Sale Agreement with ACCU. The participations sold under the Master LP Agreement are considered secured borrowings and are presented as such on the Company’s balance sheet. $17 thousand in secured borrowings were outstanding under the Master LP Agreement as of December 31, 2021. |
Investor Notes Payable
Investor Notes Payable | 12 Months Ended |
Dec. 31, 2021 | |
Credit Facilities, Other Debt and Investor Notes Payable [Abstract] | |
Investor Notes Payable | Note 11. Investor Notes PayableThe table below provides information on the Company’s investor notes payable (dollars in thousands): As of As of December 31, 2021 December 31, 2020SEC Registered Public OfferingsOffering Type Amount WeightedAverageInterestRate Amount WeightedAverageInterestRate Class 1 OfferingUnsecured $ 3,654 4.45% $ 9,010 3.94%Class 1A OfferingUnsecured 27,116 4.11% 48,982 3.16%2021 Class A OfferingUnsecured 34,524 3.20% — —%Public Offering Total $ 65,294 3.65% $ 57,992 3.28% Private Offerings Subordinated NotesUnsecured $ 11,526 4.47% $ 11,655 4.49%Secured NotesSecured — —% 6,580 3.99%Private Offering Total $ 11,526 4.47% $ 18,235 4.31% Total Notes Payable $ 76,820 3.77% $ 76,227 3.53% Notes Payable Totals by Security Unsecured TotalUnsecured $ 76,820 3.77% $ 69,647 3.48%Secured TotalSecured $ — —% $ 6,580 3.99% Future maturities for the Company’s investor notes during the twelve-month periods ending December 31, are as follows (dollars in thousands): 2022 $ 30,4422023 10,0332024 14,2382025 12,1262026 9,981 76,820Debt Issuance Costs 88Notes payable, net of debt issuance costs $ 76,732Debt issuance costs related to the Company’s notes payable were $88 thousand and $33 thousand at December 31, 2021 and December 31, 2020, respectively.The notes are payable to investors who have purchased the securities. Notes pay interest at stated spreads over an index rate. The investor may reinvest the interest or have the interest paid to them at their option. The Company may repurchase all or a portion of notes at any time at its sole discretion. In addition, the Company may allow investors to redeem their notes prior to maturity at its sole discretion.SEC Registered Public Offerings Class 1 Offering. In January 2015, the Company registered its Class 1 Notes with the SEC. The Company discontinued the sale of its Class 1 Note Offering when it expired on December 31, 2017. The offering included two categories of notes, including a fixed interest note and a variable interest note. The Class 1 Notes contain restrictive covenants pertaining to paying dividends, making redemptions, acquiring, purchasing, or making certain payments, requiring the maintenance of minimum tangible net worth, limitations on the issuance of additional notes, and incurring of indebtedness. The Company is in compliance with these covenants as of December 31, 2021 and December 31, 2020. The Company issued The Class 1 Notes under a Trust Indenture between the Company and U.S. Bank.Class 1A Offering. In February 2018, the Company launched its Class 1A Notes Offering. Pursuant to a Registration Statement declared effective on February 27, 2018, the Company registered $90 million of its Class 1A Notes in two series – fixed and variable notes. The Class 1A Notes are unsecured. The interest rate paid on the Fixed Series Notes is determined in reference to a Constant Maturity Treasury Index published by the U.S. Department of Treasury (“CMT Index”) in effect on the date that the note is issued plus a rate spread as described in the Company’s Class 1A Prospectus. The variable index in effect on the date the interest rate is set determines the interest rate paid on a Variable Series Note. The CMT Index refers to the Constant Maturity Treasury rates published by the U.S. Department of Treasury for actively traded Treasury securities. The variable index is equal to the 3-month LIBOR rate. The Company issued the Class 1A Notes under a Trust Indenture entered into between the Company and U.S. Bank. 2021 Class A Offering. In January 2021, the Company launched its 2021 Class A Notes Offering. Pursuant to a Registration Statement declared effective on January 8, 2021, the Company registered $125 million of its 2021 Class A Notes in two series – fixed and variable notes. The 2021 Class A Notes are unsecured. Like the Class 1A Notes Offering, the interest rate paid on the Fixed Series Notes is determined in reference to a CMT Index published by the U.S. Department of Treasury in effect on the date that the note is issued plus a rate spread as described in the Company’s 2021 Class A Prospectus. The variable index in effect on the date the interest rate is set determines the interest rate paid on a Variable Series Note. The CMT Index refers to the Constant Maturity Treasury rates published by the U.S. Department of Treasury for actively traded Treasury securities. The variable index is equal to the 3-month LIBOR rate. The Company issued the 2021 Class A Notes under a Trust Indenture entered into by and between the Company and U.S. Bank.Private OfferingsSeries 1 Subordinated Capital Notes (“Subordinated Notes”). In June 2018, the Company renewed the offer and sale of its Subordinated Notes initially launched in February 2013. The Company offers the notes pursuant to a limited private offering to qualified investors that meet the requirements of Rule 506 of Regulation D. The Company offers the Subordinated Notes with maturity terms from 12 to 60 months at an interest rate fixed on the date of issuance, as determined by the then current seven-day average rate reported by the U.S. Federal Reserve Board for interest rate swaps. Under the Subordinated Notes offering, the Company is subject to certain covenants, including limitations on restricted payments, limitations on the amount of notes that it can sell, restrictions on mergers and acquisitions, and proper maintenance of books and records. The Company was in compliance with these covenants at December 31, 2021 and December 31, 2020.Secured Investment Certificates (“Secured Notes”).In January 2015, the Company began offering Secured Notes under a private placement memorandum pursuant to the requirements of Rule 506 of Regulation D. Under this offering, the Company may sell up to $80.0 million in Secured Notes to qualified investors. On December 31, 2017, the Company terminated its 2015 Secured Note offering.Effective as of April 30, 2018, the Company launched a new $80 million secured note offering. The Company issued the 2018 Secured Note offering pursuant to a Loan and Security Agreement. This agreement includes the same terms and conditions previously set forth in its 2015 Secured Note offering. The 2018 Secured Note offering terminated on April 30, 2020.The Company secures these notes by pledging either cash or loans receivable as collateral. The required collateralization ratio is 100% on the pledged cash and 105% on the pledged loans receivable. Said another way, every dollar of cash collateralizes one dollar of secured notes and every $1.05 of loans receivable collateralizes one dollar of secured notes. At December 31, 2020 the loans receivable collateral securing the Secured Notes had an outstanding balance of $10.9 million, which was sufficient to satisfy the minimum collateral requirement of the Secured Notes offering. As of December 31, 2021 and December 31, 2020, the Company did not have cash pledged for the benefit of the Secured Notes. As of December 31, 2021, there were no outstanding Secured Notes and no loans receivable pledged as collateral. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 12. Commitments and Contingencies Unfunded CommitmentsThe Company is a party to credit-related financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include undisbursed loans, un-advanced lines of credit, and standby letters of credit. Such commitments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the balance sheet.The contractual amount of these commitments represents the Company’s exposure to credit loss. The Company uses the same credit policies in making commitments as it does for on-balance-sheet instruments. The table below shows the outstanding financial instruments whose contract amounts represent credit risk (dollars in thousands): Contract Amount at: December 31, 2021 December 31, 2020Undisbursed loans $ 270 $ 2,774Undisbursed loans are commitments for possible future extensions of credit to existing customers. These loans are sometimes unsecured and the borrower may not necessarily draw upon the line the total amount of the commitment. Commitments to extend credit are generally at variable rates.Operating LeasesThe Company has lease agreements for its offices in Brea and Fresno, California. The Brea office lease expires in December 2023. The lease does not contain any additional options to renew. The Fresno office lease expires in March 2022. There are no options to renew in the lease agreement. The Company has determined that both leases are operating leases. The table below presents information regarding our existing operating leases (dollars in thousands): For the Year Ended 2021 2020 Lease cost Operating lease cost$ 174 $ 174 Other information Cash paid for operating leases 174 169 Right-of-use assets obtained in exchange for operating lease liabilities — 53 Weighted average remaining lease term (in years) 1.96 2.87 Weighted-average discount rate 4.71% 4.64% Future minimum lease payments and lease costs for the twelve months ending December 31 are as follows (dollars in thousands): Lease Payments Lease Costs2022 $ 157 $ 1532023 155 146Total $ 312 $ 299 |
Office Operations and Other Exp
Office Operations and Other Expenses | 12 Months Ended |
Dec. 31, 2021 | |
Office Operations and Other Expenses [Abstract] | |
Office Operations and Other Expenses | Note 13. Office Operations and Other ExpensesOffice operations and other expenses comprise the following (dollars in thousands): December 31, 2021 December 31, 2020Technology and communication expenses $ 357 $ 411Insurance 350 295Lease and occupancy expense 192 194Outsourced operations 131 157Staff and travel expense 71 65Loan expenses 53 87Clearing firm fees 63 60Other 98 84Total $ 1,315 $ 1,353 |
Preferred and Common Units Unde
Preferred and Common Units Under LLC Structure | 12 Months Ended |
Dec. 31, 2021 | |
Preferred and Common Units Under LLC Structure [Abstract] | |
Preferred And Common Units Under LLC Structure | Note 14. Preferred and Common Units Under LLC StructureHolders of the Series A Preferred Units are entitled to receive a quarterly cash dividend that is 25 basis points higher than the one-year LIBOR rate in effect on the last day of the calendar month for which the preferred return is approved. The Company has also agreed to set aside an annual amount equal to 10% of its net profits earned for any year, after subtracting from profits the quarterly Series A Preferred Unit dividends paid, for distribution to its Series A Preferred Unit holders. The Series A Preferred Units have a liquidation preference of $100 per unit and have no voting rights. They are also subject to redemption in whole or in part at the Company’s election on December 31 of any year for an amount equal to the liquidation preference of each unit, plus any accrued and declared but unpaid quarterly dividends and preferred distributions on such units. The Series A Preferred Units have priority as to earnings and distributions over the Common Units. The resale of the Company’s Series A Preferred Units and Common Units are subject to the Company’s first right of refusal to purchase units proposed to be transferred. Upon the Company’s failure to pay quarterly dividends for four consecutive quarters, the holders of the Series A Preferred Units have the right to appoint two managers to its Board of Managers. The Class A Common Units have voting rights, but have no liquidation preference or rights to dividends, unless declared. |
Retirement Plans
Retirement Plans | 12 Months Ended |
Dec. 31, 2021 | |
Retirement Plans [Abstract] | |
Retirement Plans | Note 15. Retirement Plans401(k)All of the Company’s employees are eligible to participate in the Automated Data Processing, Inc. (“ADP”) 401(k) plan effective as of the date their employment commences. No minimum service is required and the minimum age is 21. Each employee may elect voluntary contributions not to exceed 86% of salary, subject to certain limits based on U.S. tax law. The plan has a matching program, which qualifies as a Safe Harbor 401(k) plan. As a Safe Harbor Section 401(k) plan, the Company matches each eligible employee’s contribution, dollar for dollar, up to 3% of the employee’s compensation, and 50% of the employee’s contribution that exceeds 3% of their compensation, up to a maximum contribution of 5% of the employee’s compensation. Company matching contributions for the years ended December 31, 2021 and 2020 were $67 thousand and $86 thousand, respectively.Profit SharingThe profit sharing plan is for all employees who, at the end of the calendar year, are at least 21 years old, still employed, and have at least 900 hours of service during the plan year. The Company’s Board of Managers determines the amount annually contributed on behalf of each qualified employee. The Company determines the amount by calculating it as a percentage of the eligible employee's annual earnings. Plan forfeitures are used to reduce the Company’s annual contribution. The Company did not make or approve a profit sharing contribution to the plan during the years ended December 31, 2021 and 2020 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | Note 16. Fair Value MeasurementsFair Value Measurements Using Fair Value HierarchyThe Company classifies measurements of fair value within a hierarchy based upon inputs that give the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The Company did not change its methodology in measuring fair value during the year ended December 31, 2021. The fair value hierarchy is as follows:Level 1 inputs are quoted prices (unadjusted) for identical assets or liabilities in active markets.Level 2 inputs include:o quoted prices for similar assets and liabilities in active markets, oquoted prices for identical assets and liabilities in inactive markets, oinputs that are observable for the asset or liability (such as interest rates, prepayment speeds, credit risks, etc.); oroinputs that are derived principally from or corroborated by observable market data by correlation or by other means.Level 3 inputs are unobservable and reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.Fair Value of Financial InstrumentsThe following tables show the carrying amounts and estimated fair values of the Company’s financial instruments (dollars in thousands): Fair Value Measurements at December 31, 2021 using CarryingValue Quoted Pricesin ActiveMarkets forIdentical Assets (Level 1) SignificantOtherObservableInputs(Level 2) SignificantUnobservableInputs(Level 3) Fair ValueFINANCIAL ASSETS: Cash $ 28,080 $ 28,080 $ — $ — $ 28,080Loans, net 97,243 — — 97,913 97,913Investments in joint venture 882 — — 882 882Accrued interest receivable 507 — — 507 507FINANCIAL LIABILITIES: Lines of credit $ 2,000 $ — $ — $ 2,000 $ 2,000Term-debt 32,749 — — 31,489 31,489Other secured borrowings 17 — — 18 18Notes payable 76,732 — — 76,871 76,871Other financial liabilities 455 — — 455 455 Fair Value Measurements at December 31, 2020 using CarryingValue Quoted Pricesin ActiveMarkets forIdentical Assets (Level 1) SignificantOtherObservableInputs(Level 2) SignificantUnobservableInputs(Level 3) Fair ValueFINANCIAL ASSETS: Cash $ 21,922 $ 21,922 $ — $ — $ 21,922Certificates of deposit 1,761 — 1,779 — 1,779Loans, net 116,121 — — 115,477 115,477Investments in joint venture 884 — — 884 884Accrued interest receivable 798 — — 798 798FINANCIAL LIABILITIES: Term-debt $ 51,516 $ — $ — $ 43,832 $ 43,832Notes payable 76,194 — — 78,262 78,262Other financial liabilities 513 — — 513 513Management uses judgment in estimating the fair value of the Company’s financial instruments; however, there are inherent weaknesses in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented herein are not necessarily indicative of the amounts the Company could have realized in a sales transaction at December 31, 2021 and December 31, 2020. The Company used the following methods and assumptions to estimate the fair value of financial instruments:Cash – The carrying amounts reported in the balance sheets approximate fair value for cash. Certificates of deposit – Management estimates fair value by using a present value discounted cash flow with a discount rate approximating the current market rate for similar assets. Management classifies certificates of deposits as Level 2 of the fair value hierarchy.Loans (other than collateral-dependent impaired loans) – Management estimates fair value by discounting the future cash flows of the loans. The discount rate the Company uses is the current average rates at which it would make loans to borrowers with similar credit ratings and for the same remaining maturities. Also included is $17 thousand of loans participations transferred under a recourse agreement. Investments – Management estimates fair value by analyzing the operations and marketability of the underlying investment to determine if the investment is other-than-temporarily impaired.Investor Notes Payable – Management estimates the fair value of fixed maturity notes by discounting the future cash flows of the notes. The discount rate the Company uses is the rate currently offered for investor notes payable of similar remaining maturities. Company management estimates the discount rate by using market rates that reflect the interest rate risk inherent in the notes. Lines of Credit, Term-debt, Other Secured Borrowings – Management estimates the fair value of borrowings from financial institutions discounting the future cash flows of the borrowings. The discount rate the Company uses is the current incremental borrowing rate for similar types of borrowing arrangements. Off-Balance Sheet Instruments – Management determines the fair value of loan commitments on fees currently charged to enter into similar agreements, taking into account the remaining term of the agreements and the counterparties' credit standing. The fair value of loan commitments is insignificant at December 31, 2021 and December 31, 2020.Fair Value Measured on a Nonrecurring BasisThe Company measures certain assets at fair value on a nonrecurring basis. On these assets, the Company only makes fair value adjustments in certain circumstances (for example, when there is evidence of impairment). The following table presents the fair value of assets measured on a nonrecurring basis (dollars in thousands): Fair Value Measurements Using: Quoted Pricesin ActiveMarkets forIdentical Assets (Level 1) SignificantOtherObservableInputs(Level 2) SignificantUnobservableInputs(Level 3) TotalAssets at December 31, 2021: Collateral-dependent loans (net of allowance and discount) $ — $ — $ 8,981 $ 8,981Investments in joint venture — — 882 882Foreclosed assets (net of allowance) — — 301 301Total $ — $ — $ 10,164 $ 10,164 Assets at December 31, 2020: Collateral-dependent loans (net of allowance and discount) $ — $ — $ 5,815 $ 5,815Investments in joint venture — — 884 884Foreclosed assets (net of allowance) — — 301 301Total $ — $ — $ 7,000 $ 7,000Impaired LoansThe fair value of collateral-dependent impaired loans with specific allocations of the allowance for loan losses is generally based on recent real estate appraisals. For these collateral-dependent loans, the Company records fair value on a nonrecurring basis. Such fair values are obtained using independent appraisals, which the Company may discount due to age or other factors, which the Company considers to be Level 3 inputs. The range of these discounts is shown in the table below. Foreclosed AssetsAt the date of foreclosure, the Company initially records real estate acquired through foreclosure or other proceedings (foreclosed assets) at fair value less estimated costs of disposal, which establishes a new cost. After foreclosure, management periodically performs valuations on foreclosed assets. The company carries foreclosed assets held for sale at the lower of cost or fair value, less estimated costs of disposal. The fair values of real properties initially are determined based on appraisals. In some cases, management adjusts the appraised values for various factors including age of the appraisal, age of comparable properties included in the appraisal, and known changes in the market or in the collateral. The Company makes subsequent valuations of the real properties based either on management estimates or on updated appraisals. If management makes significant adjustments to appraised values based on unobservable inputs, the Company categorizes foreclosed assets under Level 3. Otherwise, if management bases the foreclosed assets’ value on recent appraisals and the only adjustments made are for known contractual selling costs, the Company will categorize the foreclosed assets under Level 2.The table below summarizes the valuation methodologies used to measure the fair value adjustments for Level 3 assets recorded at fair value on a nonrecurring basis (dollars in thousands): December 31, 2021Assets Fair Value(in thousands) ValuationTechniques UnobservableInput Range(Weighted Average)Impaired loans $ 8,981 Discounted appraised value Selling cost / Estimated market decrease 11% - 81% (21%)Investments in joint venture $ 882 Internal evaluations Estimated future market value 0% (0%)Foreclosed assets $ 301 Internal evaluations Selling cost 6% (6%) December 31, 2020Assets Fair Value(in thousands) ValuationTechniques UnobservableInput Range(Weighted Average)Impaired loans $ 5,815 Discounted appraised value Selling cost / Estimated market decrease 21% - 81% (23%)Investments in joint venture $ 884 Internal evaluations Estimated future market value 0% (0%)Foreclosed assets $ 301 Internal evaluations Selling cost 6% (6%) |
Income Taxes and State LLC Fees
Income Taxes and State LLC Fees | 12 Months Ended |
Dec. 31, 2021 | |
Income Taxes and State LLC Fees [Abstract] | |
Income Taxes and State LLC Fees | Note 17. Income Taxes and State LLC FeesMPIC is subject to a California gross receipts LLC fee of approximately $12,000 per year, and the state minimum franchise tax of $800 per year. MP Securities is subject to a California gross receipts LLC fee of approximately $6,000 and the state minimum franchise tax of $800 per year. MP Realty incurred a tax loss for the years ended December 31, 2021 and 2020, and recorded a provision of $800 per year for the state minimum franchise tax. For the years ended December 31, 2021 and 2020, MP Realty has federal and state net operating loss carryforwards of approximately $431 thousand and $430 thousand, respectively, which begin to expire in the year 2031. Management assessed the realizability of the deferred tax asset and determined that a 100% valuation against the deferred tax asset was appropriate at years ended December 31, 2021 and 2020.Tax years ended December 31, 2018 through December 31, 2021 remain subject to examination by the Internal Revenue Service and the tax years ended December 31, 2017 through December 31, 2021 remain subject to examination by the California Franchise Tax Board. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2021 | |
Segment Information [Abstract] | |
Segment Information | Note 18. Segment InformationThe Company's reportable segments are strategic business units that offer different products and services. The Company manages the segments separately because each business requires different management, personnel proficiencies, and marketing strategies.The Company has two reportable segments that represent the primary businesses reported in the consolidated financial statements: the finance company (the parent company), and the investment advisor and insurance firm (MP Securities). The finance company segment uses funds from the sale of debt securities, income from operations, and the sale of loan participations to originate or purchase mortgage loans. The finance company also services loans. MP Securities generates fee income by selling debt securities and other investment and insurance products, as well as providing investment advisory and financial planning services.The accounting policies applied to determine the segment information are the same as those described in the summary of significant accounting policies. Management accounts for intersegment revenues and expenses at amounts that assume the Company entered into the transaction with unrelated third parties at the current market prices at the time of the transaction. Management evaluates the performance of each segment based on net income or loss before provision for income taxes and LLC fees. Financial information with respect to the reportable segments for the years ended December 31, 2021 and 2020 is as follows (dollars in thousands): Twelve months ended December 31, 2021 December 31, 2020 Revenue from external sources FinanceCompany $ 9,651 $ 11,019 Broker Dealer 990 769 Adjustments / Eliminations — — Total $ 10,641 $ 11,788 Revenue from internal sources Finance Company $ — $ — Broker Dealer 1,244 1,000 Other Segments 193 216 Adjustments / Eliminations (1,437) (1,216) Total $ — $ — Total non-interest expense and provision for tax Finance Company $ 3,605 $ 3,789 Broker Dealer 1,334 1,238 Other Segments 219 152 Adjustments / Eliminations (217) (150) Total $ 4,941 $ 5,029 Net profit (loss) Finance Company $ 1,108 $ 1,477 Broker Dealer 900 530 Other Segments (25) 64 Adjustments / Eliminations (133) 45 Total $ 1,850 $ 2,116 December 31, December 31, 2021 2020 (Unaudited) (Audited) Total assets Finance Company $ 123,753 $ 139,410 Broker Dealer 3,946 3,187 Other Segments 559 576 Adjustments / Eliminations (293) (80) Total $ 127,965 $ 143,093 |
Condensed Financial Statements
Condensed Financial Statements of Parent Company | 12 Months Ended |
Dec. 31, 2021 | |
Condensed Financial Statements of Parent Company [Abstract] | |
Condensed Financial Statements of Parent Company | Note 19. Condensed Financial Statements of Parent CompanyFinancial information pertaining only to the parent company, Ministry Partners Investment Company, LLC, is as follows (dollars in thousands):Ministry Partners Investment Company, LLC Balance Sheet As of December 31, 2021 2020Assets: Cash $ 24,030 $ 18,408Certificates of deposit — 1,761Loans receivable, net of allowance for loan losses 97,243 116,121Investment in subsidiaries 2,645 1,903Other assets 3,045 3,699Total assets $ 126,963 $ 141,892Liabilities and members’ equity Liabilities: Other borrowings $ 34,766 $ 51,405Notes payable, net of debt issuance costs 76,025 75,644Other liabilities 1,661 1,935Total liabilities 112,452 128,984Equity 14,511 12,908Total liabilities and members' equity $ 126,963 $ 141,892 Ministry Partners Investment Company, LLC Statement of Income For the years ended December 31, 2021 2020Income: Interest Income $ 7,040 $ 8,335Other income 2,566 2,683Total income 9,606 11,018Interest expense: Term-debt 1,007 1,638Notes payable 3,808 3,926Total interest expense 4,815 5,564Provision for loan losses 122 188Other operating expenses 3,548 3,776Income before provision for income taxes 1,121 1,490Provision for income taxes and state LLC fees 13 13Income before equity in undistributed net income of subsidiaries 1,108 1,477Equity in undistributed net income of subsidiaries 742 639Net income $ 1,850 $ 2,116 Ministry Partners Investment Company, LLC Statement of Cash Flows For the years ended December 31, 2021 2020CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 1,850 $ 2,116Adjustments to reconcile net income to net cash used by operating activities: Equity in undistributed net income of subsidiaries (742) (639)Depreciation 47 50Amortization of deferred loan fees (231) (257)Amortization of debt issuance costs 616 97Provision for loan losses 122 188Accretion of loan discount (27) (31)Gain on sale of loans (64) (69)Gain on sale of foreclosed assets (44) —Loss on sale of fixed assets — 8Gain on debt extinguishment (2,287) (2,400)Changes in: Other assets 689 190Other liabilities (275) (223)Net cash (used) by operating activities (346) (970)CASH FLOWS FROM INVESTING ACTIVITIES: Loan purchases (842) —Loan originations (14,319) (19,449)Loan sales 14,053 19,827Loan principal collections 20,105 12,413Redemption (purchase) of certificates of deposit 1,761 (1,761)Foreclosed property sales 44 —Sale of property and equipment — 24Purchase of property and equipment (1) (88)Net cash provided by investing activities 20,801 10,966CASH FLOWS FROM FINANCING ACTIVITIES: Net change in term-debt (16,353) (17,621)Borrowings, net of repayments on lines of credit 2,000 —Net change in notes payable 593 3,126Debt issuance costs (828) (75)Dividends paid on preferred units (245) (315)Net cash (used) by financing activities (14,833) (14,885)Net increase (decrease) in cash and restricted cash 5,622 (4,889)Cash, cash equivalents, and restricted cash at beginning of period 18,408 23,297Cash, cash equivalents, and restricted cash at end of period $ 24,030 $ 18,408Supplemental disclosures of cash flow information Interest paid $ 3,788 $ 4,409Income taxes paid 20 15Transfer of loans to foreclosed assets — —Dividends declared to preferred unit holders 203 201 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 20. Subsequent EventsOn January 6, 2022, the Company entered into a credit facility refinancing transaction with its lender. The agreement permitted the Company to make a cash prepayment on or before January 7, 2022, in exchange for a reduction in the outstanding principal balance of the Credit Facility of $16.5 million. The Company made this payment on January 6, 2022 and recognized a gain on debt extinguishment of $1.5 million on the transaction. The agreement also permits the Company to make quarterly cash prepayments beginning on July 1, 2022 for a reduction in principal of $3.3 million. These prepayments can continue until the principal balance has been paid in full. |
Nature of Business and Summar_2
Nature of Business and Summary of Significant Accounting Policies (Policy) | 12 Months Ended |
Dec. 31, 2021 | |
Nature of Business and Summary of Significant Accounting Policies [Abstract] | |
Nature of Business | Nature of BusinessThroughout these notes to consolidated financial statements, we refer to Ministry Partners Investment Company, LLC and its subsidiaries as “the Company.” The Company was formed in California in 1991. The Company’s primary operations are financing commercial real property secured loans and providing investment services for the benefit of evangelical churches, ministries, and individuals. The Company funds its operations primarily through the sale of debt securities. The Company’s wholly-owned subsidiaries are: Ministry Partners Funding, LLC, a Delaware limited liability company (“MPF”); MP Realty Services, Inc., a California corporation (“MP Realty”); Ministry Partners Securities, LLC, a Delaware limited liability company (“MP Securities”); andMinistry Partners for Christ, Inc., a not-for-profit Delaware corporation (“MPC”). The Company formed MPF in 2007 and then deactivated the subsidiary on November 30, 2009. In December 2014, the Company reactivated MPF to enable it to serve as collateral agent for loans held as collateral for its Secured Investment Certificates. The Company formed MP Realty in November 2009, and obtained a license to operate as a corporate real estate broker through the California Department of Real Estate on February 23, 2010. MP Realty has conducted limited operations to date. The Company formed MP Securities on April 26, 2010 to provide investment and financial planning solutions for individuals, churches, charitable institutions, and faith-based organizations. MP Securities acts as the selling agent for the Company’s public and private placement notes. The Company formed MPC on December 28, 2018 to be used exclusively for religious and charitable purposes within the meaning of Section 501(c)(3) of the U.S. Internal Revenue Code of 1986 (“IRC”). MPC is a not-for-profit corporation formed and organized under Delaware law. MPC makes charitable grants to Christian educational organizations, and provides accounting, consulting, and financial expertise to aid evangelical Christian ministries. On August 23, 2019, the Internal Revenue Service granted MPC tax-exempt status as a private foundation under Section 501(c)(3) of the IRC. The MPC Board of Directors approved its first charitable grants during the year ended December 31, 2020. |
Principles of Consolidation | Principles of ConsolidationThe consolidated financial statements include the accounts of Ministry Partners Investment Company, LLC and its wholly-owned subsidiaries. Management eliminates all significant inter-company balances and transactions in consolidation. |
Conversion to LLC | Conversion to LLCEffective December 31, 2008, the Company converted from a corporation organized under California law to a California limited liability company. After this conversation, the separate existence of Ministry Partners Investment Corporation ceased and the entity continued by operation of law under the name Ministry Partners Investment Company, LLC. As an LLC, a group of managers provides oversight of the Company’s affairs. The managers have full, exclusive, and complete discretion, power, and authority to oversee the management of Company affairs. An Operating Agreement governs the Company’s management structure and governance procedures. |
Risks and Uncertainties | Risks and UncertaintiesCOVID-19, a global pandemic, has hurt the broad economy, affecting most industries, including businesses, churches, schools, hospitality- and travel-based employers, and has disrupted the supply and distribution networks that deliver products to the consuming public. The shutdown orders that began in March 2020 have been lifted and many churches are holding worship services in their facilities. However, an outbreak of a COVID-19 variant may trigger governmental authorities to reinstate restrictions on church meetings and cause more economic disruption. It cannot be determined at this time what impact that would have on the Company’s financial position. Furthermore, while there has been no material impact to the Company’s employees to date, COVID-19 could potentially create business continuity issues for the Company. While it is not possible to know the full extent of the impact of COVID-19, resulting measures to curtail its spread and recovery of the economy as the U.S. reopens and prepares for the variant strains of the pandemic, the Company is disclosing potentially material factors that could impact our business of which it is aware.Following Financial Accounting Standards Board (“FASB”) and interagency regulatory guidance issued in March 2020, loans that were modified under the terms of our COVID-19 Deferral Assistance Program were not considered troubled debt restructurings to the extent that they met the terms of such guidance under Section 4013 of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The CARES Act guidance applies to modifications made between March 1, 2020 and the earlier of January 2, 2022 or sixty (60) days after the end of the COVID-19 national emergency, as stipulated by the Consolidated Appropriations Act signed into law on December 31, 2020. The Company has relied upon and applied this guidance to modifications it granted since the first quarter of 2020. |
Cash and Cash Equivalents | Cash and Cash EquivalentsCash equivalents include time deposits and all highly liquid debt instruments with original maturities of three months or less. The Company had demand deposits and money market deposit accounts as of December 31, 2021 and December 31, 2020. The National Credit Union Insurance Fund insures a portion of the Company’s cash held at credit unions and the Federal Deposit Insurance Corporation insures a portion of cash held by the Company at other financial institutions. The Company holds cash deposits that may exceed insured limits. Management does not expect to incur losses in these cash accounts. |
Certificates of Deposit | Certificates of DepositCertificates of deposit include investments in certificates of deposit held at financial institutions that carry original maturities of greater than three months. The Company had $1,757 thousand in certificates of various terms greater than three months as of December 31, 2020. The Company had no certificates of deposit with original maturities of greater than three months at December 31, 2021. |
Use of Estimates | Use of EstimatesThe Company’s creation of consolidated financial statements that conform to United States Generally Accepted Accounting Principles ("GAAP") requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates govern areas such as the allowance for credit losses and the fair value of financial instruments and foreclosed assets. Actual results could differ from these estimates. |
Investments in Joint Venture | Investments in Joint VentureIn 2016, the Company entered into a joint venture agreement to develop and sell property we acquired as part of a Deed in Lieu of Foreclosure agreement reached with one of our borrowers. The joint venture owns a property located in Santa Clarita, California.The Company accounts for its investment in the joint venture using the equity method of accounting. Under this method, the Company records its proportionate share of the joint venture’s net income or loss in the statement of operations. On a periodic basis, or whenever events or circumstances arise that would necessitate analysis, management analyzes the Company’s investment in the joint venture for impairment. In this analysis, management compares the carrying value of the investment to the estimated value of the underlying real property. The Company records any impairment charges as a valuation allowance against the value of the asset. Management records these valuation changes as realized gains or losses on investment on the Company’s consolidated statements of operations. The Company determined that the investment in the joint venture was not impaired as of December 31, 2021. |
Loans Receivable | Loans ReceivableThe Company reports loans that management has the intent and ability to hold for the foreseeable future at their outstanding unpaid principal balance adjusted for an allowance for loan losses, deferred loan fees and costs, and loan discounts. |
Interest Accrual on Loans Receivable | Interest Accrual on Loans ReceivableThe Company accrues loan interest income daily. Management defers loan origination fees and costs generated in making a loan. The Company amortizes these fees and costs as an adjustment to the related loan yield using the interest method. Loan discounts are interest accrued and unpaid which the Company added to loan principal balances when it restructured the loan. The Company does not accrete discounts to income on impaired loans. However, when management determines that a previously impaired loan is no longer impaired, the Company begins accreting loan discounts to interest income over the term of the restructured loan. For loans purchased from third parties, loan discounts also are the differences between the purchase price and the recorded principal balance of the loan. The Company accretes these discounts to interest income over the term of the loan using the interest method.Management considers a loan impaired if it concludes that the collection of principal or interest according to the terms of the loan agreement is doubtful. The Company stops the accrual of interest when management determines the loan is impaired. For loans that the Company places on non-accrual status, management reverses all uncollected accrued interest against interest income. Management accounts for the interest on these loans on the cash basis or cost-recovery method until the loan qualifies for return to accrual status. It is not until all the principal and interest amounts contractually due are brought current and future payments are reasonably assured that the Company returns a loan to accrual status. |
Allowance for Loan Losses | Allowance for Loan LossesThe Company sets aside an allowance for loan losses by charging the provision for loan losses account on the Company’s consolidated statements of income. This charge decreases the Company’s earnings. Management charges off the part of loan balances it believes it will not collect against the allowance. The Company credits subsequent recoveries, if any, to the allowance.Loan Portfolio Segments and Classes Management separates the loan portfolio into portfolio segments for purposes of evaluating the allowance for loan losses. A portfolio segment is defined as the level at which the Company develops and documents a systematic method for determining its allowance for loan losses. The Company segments the loan portfolio based on loan types and the underlying risk factors present in each loan type. Management periodically reviews and revises such risk factors, as it considers appropriate. The Company’s loan portfolio consists of one segment – church loans. Management has segregated the loan portfolio into the following portfolio classes: Loan ClassClass DescriptionWholly-Owned First Collateral PositionWholly-owned loans and the retained portion of loans originated by the Company and sold for which the Company possesses a senior lien on the collateral underlying the loan.Wholly-Owned Junior Collateral PositionWholly-owned loans and the retained portion of loans originated by the Company and sold for which the Company possesses a lien on the underlying collateral that is superseded by another lien on the same collateral. This class also contains any loans that are not secured. These loans present higher credit risk than loans for which the Company possesses a senior lien due to the increased risk of loss should the loan default.Participations First Collateral PositionParticipated loans purchased from another financial entity for which the Company possesses a senior lien on the collateral underlying the loan. Loan participations purchased may present higher credit risk than wholly owned loans because disposition and direction of actions regarding the management and collection of the loans must be coordinated and negotiated with the other participants, whose best interests regarding the loan may not align with those of the Company.Participations Junior Collateral PositionParticipated loans purchased from another financial entity for which the Company possesses a lien on the underlying collateral that is superseded by another lien on the same collateral. Loan participations in the junior collateral position loans have higher credit risk than wholly owned loans and participated loans purchased where the Company possesses a senior lien on the collateral. The increased risk is the result of the factors presented above relating to both junior lien positions and participations.Allowance for Loan Loss EvaluationManagement evaluates the allowance for loan losses on a regular basis. The Company establishes the allowance for loan losses based upon its periodic review of several factors management believes influences the collectability of the loans, including: the Company’s loss history; the characteristics and volume of the loan portfolio; adverse conditions that may affect the borrower’s ability to repay;the estimated value of any secured collateral; and the current economic conditions. This evaluation is subjective, as it requires estimates that are subject to significant revision as more information becomes available.The allowance consists of general and specific components. The general component covers non-classified loans. Management bases the general reserve on the Company’s loss history adjusted for qualitative factors. These qualitative factors are significant factors management considers likely to cause estimated credit losses associated with the Company’s existing portfolio to differ from its historical loss experience. Management adjusts these factors on an on-going basis, some of which include:changes in lending policies and procedures, including changes in underwriting standards and collection;changes in national, regional, and local economic and industry conditions that affect the collectability of the portfolio, including the effects of the pandemic;changes in the volume and severity of past due loans, the volume of non-accrual loans, and the volume and severity of adversely classified loans;changes in the value of the collateral for collateral-dependent loans; andthe effect of credit concentrations.Loans that management has classified as impaired receive a specific reserve. For such loans, an allowance is established when the carrying value of that loan is higher than the amount management expects to collect. Management uses multiple approaches to determine the amount the Company expects to collect. These include the discounted cash flow method, using the loan’s underlying collateral value reduced by expected selling costs, or using the observable market price of the impaired loan. |
Impairment Analysis | Impairment AnalysisImpaired loans include non-accrual loans, loans 90 days or more past due and still accruing, and restructured loans. Non-accrual loans are loans on which management has discontinued interest accruals. Restructured loans are loans in which the Company has granted the borrower a concession due to financial distress. Concessions are usually a reduction of the interest rate or a change in the original repayment terms. The Company monitors impaired loans on an ongoing basis as part of management’s loan review and work out process. All loans in the loan portfolio are subject to impairment analysis. The Company reviews its loan portfolio monthly by examining several data points. These include reviewing delinquency reports, any new information related to the financial condition of its borrowers, and any new appraisal or other collateral valuation. Through this process, the Company identifies potential impaired loans. Management generally deems a loan is impaired when current facts and circumstances indicate that it is probable a borrower will be unable to make payments according to the loan agreement. If management has not already deemed a loan impaired, it will classify the loan as non-accrual when it becomes 90 days or more past due.Management considers several factors when determining impairment status. These factors include the loan’s payment status, the value of any secured collateral, and the probability of collecting scheduled payments when due. Management generally does not classify loans that experience minor payment delays or shortfalls as impaired. Management determines the significance of payment delays or shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower. These circumstances include the length and reasons for the delay, the borrower's payment history, and the amount of the shortfall in relation to the principal and interest owed. Management measures impairment on a loan-by-loan basis using one of three methods:the present value of expected future cash flows discounted at the loan's effective interest rate; the obtainable market price; or the fair value of the collateral if the loan is collateral-dependent. Troubled Debt RestructuringsA troubled debt restructuring is a loan for which the Company, for reasons related to a borrower’s financial difficulties, grants a concession to a borrower that the Company would not otherwise consider. A restructuring of a loan usually involves an interest rate modification, extension of the maturity date, payment reduction, or reduction of accrued interest owed on the loan on a contingent or absolute basis.Management considers loans that it renews at below-market terms to be troubled debt restructurings if the below-market terms represent a concession due to the borrower’s troubled financial condition. The Company classifies troubled debt restructurings as impaired loans. For the loans that are not considered to be collateral-dependent, management measures troubled debt restructurings at the present value of estimated future cash flows using the loan's effective rate at start of the loan. The Company reports the change in the present value of cash flows related to the passage of time as interest income. If the loan is considered to be collateral-dependent, impairment is measured based on the fair value of the collateral.In accordance with industry standards, the Company classifies a loan as impaired if management has modified it as part of a troubled debt restructuring. However, troubled debt restructures, upon meeting certain performance conditions, are eligible to receive non-classified loan ratings (pass or watch) and to be moved out of non-accrual status. These loans continue to be included in total impaired loans but not necessarily in non-accrual or collateral-dependent loans.Section 403 of the CARES Act provides that a qualifying loan modification or extension is exempt by law from classification as a troubled debt restructuring pursuant to FASB ASC 340-10. On April 7, 2020, the Office of the Comptroller of the Currency and related financial agencies issued OCC Bulletin 2020-35, which provides further guidance regarding when a loan modification or extension is not subject to classification as a troubled debt restructuring pursuant to FASB ASC 340-10. Under section 4013 of the CARES Act, financial institutions may elect not to categorize a loan modification as a troubled debt restructuring if it is: (1)related to COVID-19; (2)executed on a loan that was not more than thirty (30) days past due as of December 31, 2019; and(3)executed between March 31, 2020, and the earlier of (A) sixty (60) days after the termination of the National Emergency or (B) December 31, 2020.* * Congress has extended the period to include the earlier of January 2, 2022 or sixty (60) days after the end of the COVID-19 national emergency pursuant to the Consolidated Appropriations Act signed on December 31, 2020. For all other loan modifications, federal agencies that regulate financial institutions have confirmed with FASB that short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to relief being extended, would not be classified as a troubled debt restructuring. This treatment includes short-term modifications including payment deferrals, fee waivers, and extension of repayment terms. The Company has relied upon the CARES Act and guidance from banking regulators related to modifications granted since the first quarter of 2020. |
Loan Charge-offs | Loan Charge-offsManagement charges off loans or portions thereof when it determines the loans or portions of the loans are uncollectible. The Company evaluates collectability periodically on all loans classified as “Loans of Lesser Quality.” Key factors management uses in assessing a loan’s collectability are the financial condition of the borrower, the value of any secured collateral, and the terms of any workout agreement between the Company and the borrower. In workout situations, the Company charges off the amount deemed uncollectible due to the terms of the workout, the inability of the borrower to make agreed upon payments, and the value of the collateral securing the loan. |
Credit Quality Indicators | Credit Quality IndicatorsThe Company has established a loan grading system to assist its management in analyzing and monitoring the loan portfolio. The Company classifies loans it considers lesser quality (“classified loans”) as watch, special mention, substandard, doubtful, or loss assets. The loan grading system is as follows:Pass: The borrower has sufficient cash to fund debt services. The borrower may be able to obtain similar financing from other lenders with comparable terms. The risk of default is considered low. Watch: These loans exhibit potential or developing weaknesses that deserve extra attention from credit management personnel. If the developing weakness is not corrected or mitigated, there may be deterioration in the ability of the borrower to repay the debt in the future. Loans graded Watch must be reported to executive management and the Board of Managers. Potential for loss under adverse circumstances is elevated, but not foreseeable. Watch loans are considered pass loans.Special mention:These credit facilities exhibit potential or actual weaknesses that present a higher potential for loss under adverse circumstances, and deserve management’s close attention. If uncorrected, these weaknesses may result in deterioration of the repayment prospects for the loan at some future date.Substandard: Loans and other credit extensions bearing this grade are considered to be inadequately protected by the current sound worth and debt service capacity of the borrower or of any pledged collateral. These obligations, even if apparently protected by collateral value, have well-defined weaknesses related to adverse financial, managerial, economic, ministry, or environmental conditions which have clearly jeopardized repayment of principal and interest as originally intended. Furthermore, there is the possibility that some future loss will be sustained if such weaknesses are not corrected.Doubtful:This classification consists of loans that display the properties of substandard loans with the added characteristic that the severity of the weaknesses makes collection or liquidation in full highly questionable or improbable based upon currently existing facts, conditions, and values. The probability of some loss is very high, but because of certain important and reasonably specific factors, the amount of loss cannot be exactly determined. Such pending factors could include merger or liquidation, additional capital injection, refinancing plans, or perfection of liens on additional collateral.Loss:Loans in this classification are considered uncollectible and cannot be justified as a viable asset. This classification does not mean the loan has absolutely no recovery value, but that it is neither practical nor desirable to defer writing off this loan even though partial recovery may be obtained in the future. |
Revenue Recognition | Revenue RecognitionThe Company recognizes two primary types of revenue: interest income and non-interest income. |
Interest Income | Interest IncomeThe Company’s principal source of revenue is interest income from loans, which is not within the scope of ASU 2014-09, Revenue from Contracts with Customers and all subsequent amendments to the ASU (collectively, "ASC 606"). Refer to the discussion in “Loans Receivable” above to understand the Company’s recognition of interest income. |
Non-interest Income | Non-interest IncomeNon-interest income includes revenue from various types of transactions and services provided to customers. Contracts with customers can include multiple services, which are accounted for as separate “performance obligations” if they are determined to be distinct. Our performance obligations to our customers are generally satisfied when we transfer the promised good or service to our customer, either at a point in time or over time. Revenue from a performance obligation transferred at a point in time is recognized at the time that the customer obtains control over the promised good or service. Revenue from our performance obligations satisfied over time are recognized in a manner that depicts our performance in transferring control of the good or service, which is generally measured based on time elapsed, as our customers simultaneously receive and consume the benefit of our services as they are provided.Payment for the majority of our services is considered to be variable consideration, as the amount of revenues we expect to receive is subject to factors outside of our control, including market conditions. Variable consideration is only included in revenue when amounts are not subject to significant reversal, which is generally when uncertainty around the amount of revenue to be received is resolved.Wealth advisory feesGenerally, management recognizes wealth advisory fees over time as the Company renders services to its clients. The Company receives these fees either based on a percentage of the market value of the assets under management, or as a fixed fee based on the services the Company provides to the client. The Company’s delivery of these services represents its related performance obligations. The Company typically collects the wealth advisory fees at the beginning of each quarter from the client’s account. Management recognizes these fees ratably over the related billing period as the Company fulfills its performance obligation. In addition, management recognizes any commissions or referral fees paid related to this revenue ratably over the related billing period as the Company fulfills its performance obligation.Investment brokerage feesInvestment brokerage fees arise from the selling, distribution, and trade execution services. The Company’s execution of these services fulfills its related performance obligations. The Company also offers sales and distribution services, and earns commissions through the sale of annuity and mutual fund products. The Company acts as an agent in these transactions and recognizes revenue at a point in time when the customer executes a contract with a product carrier. The Company may also receive trailing commissions and 12b-1 fees related to mutual fund and annuity products. Management recognizes this revenue in the period when it is earned, estimating the revenue if necessary based on the balance of the investment and the commission rate on the product.The Company earns and recognizes trade execution commissions on the trade date, which is when the Company fulfills its performance obligation. Payment for the trade execution is due on the settlement date.Lending FeesLending fees represent charges earned for services we provide as part of the lending process, such as late charges, servicing fees, and documentation fees. The Company recognizes late charges as earned when they are paid. The Company recognizes revenue on other lending fees in the period in which the Company has performed the service.Gains on sales of loans receivableFrom time to time, the Company sells participation interests in loans receivable that it services. Upon completion of the loan sale, the Company recognizes a gain based on certain factors including the maturity date of the loan, the percentage of the loan sold and retained, and the servicing rate charged to the participant on the sold portion.Gains on debt extinguishmentGains on debt extinguishment arise from agreements reached with the Company’s lenders to reduce the principal amount on outstanding debt. The amount of the gain is determined by the difference between the cash paid and the amount of principal and interest that is relieved as stipulated by the agreement. Gains/losses on sales of foreclosed assetsThe Company records a gain or loss from the sale of foreclosed assets 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 a foreclosed asset to the buyer, the Company assesses whether the buyer is committed to perform their obligation under the contract and whether collectability of the transaction price is probable, among other factors. Once these criteria are met, the foreclosed asset 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 price and related gain (loss) on sale if a significant financing component is present. Other non-interest incomeOther non-interest income includes fees earned based on service contracts the Company has entered into with credit unions. The Company recognizes the revenue monthly based on the terms of the contracts, which require monthly payments for services the Company performs. |
Foreclosed Assets | Foreclosed AssetsManagement records assets acquired through foreclosure or other proceedings at fair market value less estimated costs of disposal. Management determines the fair value at the date of foreclosure, which establishes a new cost for the asset. After foreclosure, the Company carries the asset at the lower of cost or fair value, less estimated costs of disposal. Management evaluates these real estate assets regularly to ensure that the recorded amount is supported by the current fair value and, if necessary, ensuring that valuation allowances reduce the carrying amount to fair value less estimated costs of disposal. Revenue and expense from the operation of the Company’s foreclosed assets and changes in the valuation allowance are included in net expenses from foreclosed assets. When the Company sells the foreclosed property, it recognizes a gain or loss on the sale equal to the difference between the net sales proceeds received and the carrying amount of the property. |
Transfers of Financial Assets | Transfers of Financial AssetsManagement accounts for transfers of financial assets as sales when the Company has surrendered control over the asset. Management deems the Company has surrendered control over transferred assets when:the assets have been isolated from the Company;the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred asset; and the Company does not maintain effective control over the transferred asset through an agreement to repurchase it before its maturity.The Company, from time to time, sells participation interests in mortgage loans it has originated or acquired. In order to recognize the transfer of a portion of a financial asset as a sale, the transferred portion, and any portion that continues to be held by the transferor must represent a participating interest, and the transfer of the participating interest must meet the conditions for surrender of control. To qualify as a participating interest:each portion of a financial asset must represent a proportionate ownership interest in an entire financial asset; from the date of transfer, all cash flows received from the entire financial asset must be divided proportionately among the participating interest holders in an amount equal to their respective share of ownership; the transfer must be made on a non-recourse basis (other than standard representations and warranties made under the loan participation sale agreement); the transfer may not be subordinate to any other participating interest holder; and no party has the right to pledge or exchange the entire financial asset. If the transaction does not meet either the participating interest or surrender of control criteria, management accounts for it as a secured borrowing arrangement.Under some circumstances, when the Company sells a participation in a wholly-owned loan receivable that it services, it retains loan-servicing rights, and records a servicing asset that is initially measured at fair value. As quoted market prices are generally not available for these assets, the Company estimates fair value based on the present value of future expected cash flows associated with the loan receivable. The Company amortizes servicing assets over the life of the associated receivable using the interest method. Any gain or loss recognized on the sale of a loan receivable depends in part on both the previous carrying amount of the financial asset involved in the sale, allocated between the asset sold and the interest that continues to be held by the Company based on its relative fair value at the date of transfer, and the proceeds received. |
Property and Equipment | Property and EquipmentThe Company states its furniture, fixtures, equipment, and leasehold improvements at cost, less accumulated depreciation and amortization. Management computes depreciation on a straight-line basis over the estimated useful lives of the assets. The useful lives of the Company’s assets range from three to seven years. |
Debt Issuance Costs | Debt Issuance CostsThe Company’s debt consists of borrowings from financial institutions and obligations to investors incurred through the sale of investor notes. Management presents debt net of debt issuance costs, and amortizes debt issuance costs into interest expense over the contractual terms of the debt using the straight-line method. |
Employee Benefit Plan | Employee Benefit PlanThe Company records contributions to the qualified employee retirement plan as compensation cost in the period incurred. |
Leases | LeasesAs of January 1, 2019, we adopted the accounting guidance on leases, which requires a lessee to recognize right-of-use (“ROU”) assets and lease liabilities of the balance sheet for leases with lease terms longer than 12 months. The recognition, measurement and presentation of lease expenses and cash flows depend on the classification by the lessee as a finance or operating lease.We have operating leases for real estate. Our leases have remaining lease terms of 3 months to 2 years. Our lease agreements may include renewal or termination options for varying periods that are generally at our discretion. In our lease term, we only include those periods related to renewal options we are reasonably certain to exercise. However, we generally do not include these renewal options as we are not reasonably certain to renew at the lease commencement date. This determination is based on our consideration of certain economic, strategic, and other factors that we evaluate at lease commencement date and reevaluate throughout the lease term. Some leases also include options to terminate the leases and we only include those periods beyond the termination date if we are reasonably certain not to exercise the termination option.Some leasing arrangements require variable payments that are dependent on usage or may vary for other reasons, such as payments for insurance and tax payments. The variable part of lease payments is not included in our ROU assets or lease liabilities. Rather, variable payments, other than those dependent upon an index or rate, are expensed when the obligation for those payments is incurred and are included in lease expenses recorded in selling and administrative expenses on the Consolidated Statements of Operations.If any of our lease agreements have both lease and non-lease components we treat those as a single lease component for all underlying asset classes. Accordingly, all expenses associated with a lease contract are accounted for as lease expenses. |
Income Taxes | Income TaxesThe Company has elected to be treated as a partnership for income tax purposes. Therefore, the Company passes through its income and expenses to its members for tax reporting purposes. Tesoro Hills, LLC, is a joint venture in which the Company has an investment. Tesoro Hills, according to its operating agreement, has elected to be treated as a partnership for income tax purposes. The Company and MP Securities are subject to a California LLC fee. The Company uses a recognition threshold and a measurement attribute for the consolidated financial statement recognition and measurement of a tax position taken in a tax return. The Company recognizes benefits from tax positions in the consolidated financial statements only when it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority that would have full knowledge of all relevant information. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold are recognized in the first subsequent financial reporting period in which that threshold is met. Management derecognizes previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold in the first subsequent financial reporting period in which that threshold is no longer met. |
New Accounting Guidance | New accounting guidanceAccounting Standards Pending AdoptionIn June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. ASU 2016-13 also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. The guidance requires companies to apply the requirements in the year of adoption through cumulative adjustment with some aspects of the update requiring a prospective transition approach. In October 2019, the FASB adopted a two-bucket approach to stagger the effective date for the credit losses standard for the fiscal years beginning after December 31, 2022 for certain entities, including certain Securities and Exchange Commission filers, public business entities, and private companies. As a smaller reporting company, the Company is eligible for delayed implementation of the standard. |
Pledged of Cash and Restricted
Pledged of Cash and Restricted Cash (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Pledged Cash and Restricted Cash [Abstract] | |
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | December 31, 2021 2020Cash and cash equivalents $ 28,080 $ 21,922Restricted cash 69 51Total cash, cash equivalents, and restricted cash shown in the statements of cash flows $ 28,149 $ 21,973 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
ECCU [Member] | |
Related Party Transaction [Line Items] | |
Summary of Related Party Balances | December 31, December 31, 2021 2020Total funds held on deposit at ECCU $ 3,797 $ 7,414Loan participations purchased from and serviced by ECCU 242 256 |
Schedule of Related Party Transactions | Years ended December 31, 2021 2020Interest earned on funds held with ECCU $ 2 $ 18Interest income earned on loans purchased from ECCU 15 15Loans sold to ECCU — 1,164Fees paid to ECCU from MP Securities Networking Agreement 8 7Income from Successor Servicing Agreement with ECCU 9 9Rent expense on lease agreement with ECCU 146 146 |
ACCU [Member] | |
Related Party Transaction [Line Items] | |
Summary of Related Party Balances | December 31, December 31, 2021 2020Total funds held on deposit at ACCU $ 4,083 $ 7,846Dollar amount of outstanding loan participations sold to ACCU and serviced by the Company 1,830 —Amount owed on ACCU secured borrowings 17 —Amount owed on ACCU line of credit 2,000 —Loans pledged on ACCU line of credit 6,768 — |
Schedule of Related Party Transactions | Years ended December 31, 2021 2020Interest earned on funds held with ACCU $ 21 $ 76Loans sold to ACCU 1,000 1,307Dollar amount of secured borrowings made from ACCU 17 —Dollar amount of draws on ACCU line of credit 2,000 —Interest expense on ACCU borrowings 22 —Interest income earned on loans purchased from ACCU — 61Income from broker services provided to ACCU by MPS 46 36Fees paid based on MP Securities Networking Agreement with ACCU 84 101 |
KCT Credit Union [Member] | |
Related Party Transaction [Line Items] | |
Summary of Related Party Balances | December 31, December 31, 2021 2020Total funds held on deposit at KCT$ 1,018 $ 1,019Loans pledged on KCT line of credit 8,492 —Outstanding loan participations sold to KCT and serviced by the Company 4,598 1,844 |
Schedule of Related Party Transactions | Years ended December 31, 2021 2020Interest earned on funds held with KCT $ 18 $ 22Loans sold to KCT 2,847 —Dollar amount of draws on KCT line of credit 3,825 —Interest expense on KCT line of credit 40 —Fees paid based on MP Securities Networking Agreement with KCT 35 12 |
Other Related Parties [Member] | |
Related Party Transaction [Line Items] | |
Summary of Related Party Balances | December 31, December 31, 2021 2020Outstanding loan participations sold to UFCU and serviced by the Company$ 4,275 $ 4,323Outstanding loan participations sold to NFCU and serviced by the Company 4,991 1,863Outstanding notes payable to officers and managers 261 316 |
Loans Receivable and Allowanc_2
Loans Receivable and Allowance for Loan Losses (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Loans Receivable and Allowance for Loan Losses [Abstract] | |
Summary of Loans | December 31, December 31, 2021 2020Loans to evangelical churches and related organizations: Real estate secured $ 98,858 $ 118,203Other secured 425 —Unsecured 122 144Total loans 99,405 118,347Deferred loan fees, net (304) (481)Loan discount (220) (229)Allowance for loan losses (1,638) (1,516)Loans, net $ 97,243 $ 116,121 |
Schedule of Changes in Allowance for Loan Losses | December 31, December 31, 2021 2020Balance, beginning of period $ 1,516 $ 1,393Provision (credit) for loan loss 122 188Chargeoffs — (65)Recoveries — —Balance, end of period $ 1,638 $ 1,516 |
Schedule of Loans and Allowance for Loan Losses by Impairment Methodology | Loans and Allowancefor Loan Losses (by segment) As of December 31, December 31, 2021 2020Loans: Individually evaluated for impairment $ 9,688 $ 6,181Collectively evaluated for impairment 89,717 112,166Balance $ 99,405 $ 118,347 Allowance for loan losses: Individually evaluated for impairment $ 631 $ 290Collectively evaluated for impairment 1,007 1,226Balance $ 1,638 $ 1,516 |
Schedule of Loan Portfolio Credit Quality Indicators by Class | Credit Quality Indicators (by class)As of December 31, 2021 Wholly-Owned First Wholly-Owned Junior Participation First Participation Junior TotalGrade: Pass $ 67,580 $ 2,007 $ 172 $ — $ 69,759Watch 19,858 30 70 — 19,958Special mention — — — — —Substandard 7,535 1,650 — — 9,185Doubtful 503 — — — 503Loss — — — — —Total $ 95,476 $ 3,687 $ 242 $ — $ 99,405 Credit Quality Indicators (by class)As of December 31, 2020 Wholly-Owned First Wholly-Owned Junior Participation First Participation Junior TotalGrade: Pass $ 83,494 $ 1,789 $ 201 $ — $ 85,484Watch 24,710 1,716 256 — 26,682Special mention — — — — —Substandard 5,677 — — — 5,677Doubtful 504 — — — 504Loss — — — — —Total $ 114,385 $ 3,505 $ 457 $ — $ 118,347 |
Schedule of Age Analysis of Past Due Loans by Class | Age Analysis of Past Due Loans (by class)As of December 31, 2021 30-59 Days Past Due 60-89 Days Past Due Greater Than 90 Days Total Past Due Current Total Loans Recorded Investment 90 Days or more and Accruing Church loans: Wholly-Owned First $ — $ — $ 503 $ 503 $ 94,973 $ 95,476 $ —Wholly-Owned Junior — — — — 3,687 3,687 —Participation First — — — — 242 242 —Participation Junior — — — — — — —Total $ — $ — $ 503 $ 503 $ 98,902 $ 99,405 $ — Age Analysis of Past Due Loans (by class)As of December 31, 2020 30-59 Days Past Due 60-89 Days Past Due Greater Than 90 Days Total Past Due Current Total Loans Recorded Investment 90 Days or more and Accruing Church loans: Wholly-Owned First $ 2,704 $ — $ 4,185 $ 6,889 $ 107,496 $ 114,385 $ —Wholly-Owned Junior — — — — 3,505 3,505 —Participation First — — — — 457 457 —Participation Junior — — — — — — —Total $ 2,704 $ — $ 4,185 $ 6,889 $ 111,458 $ 118,347 $ — |
Schedule of Impaired Loans by Class | Impaired Loans (by class) As of December 31, 2021 For the year endedDecember 31, 2021 Unpaid Principal Balance Recorded Balance Recorded Investment Related Allowance Average Recorded Investment Interest Income RecognizedWith no allowance recorded: Church loans: Wholly-Owned First $ 9,468 $ 9,468 $ 9,339 $ — $ 9,390 $ 524Wholly-Owned Junior 1,685 1,650 1,650 — 1,668 —Participation First — — — — — —Participation Junior — — — — — —With an allowance recorded: Church loans: Wholly-Owned First 1,437 1,393 1,371 631 1,382 58Wholly-Owned Junior — — — — — —Participation First — — — — — —Participation Junior — — — — — —Total: Church loans $ 12,590 $ 12,511 $ 12,360 $ 631 $ 12,440 $ 582 Impaired Loans (by class) As of December 31, 2020 For the year endedDecember 31, 2020 Unpaid Principal Balance Recorded Balance Recorded Investment Related Allowance Average Recorded Investment Interest Income RecognizedWith no allowance recorded: Church loans: Wholly-Owned First $ 9,856 $ 9,791 $ 9,632 $ — $ 9,674 $ 357Wholly-Owned Junior — — — — — —Participation First — — — — — —Participation Junior — — — — — —With an allowance recorded: Church loans: Wholly-Owned First 290 290 290 290 290 —Wholly-Owned Junior — — — — — —Participation First — — — — 296 11Participation Junior — — — — — —Total: Church loans $ 10,146 $ 10,081 $ 9,922 $ 290 $ 10,260 $ 368 |
Schedule of Loans on Non-accrual Status by Class | Loans on Non-accrual Status (by class) December 31, 2021 December 31, 2020Church loans: Wholly-Owned First $ 6,162 $ 6,405Wholly-Owned Junior 1,650 —Participation First — 1,230Participation Junior — —Total 7,812 $ 7,635 |
Schedule of Troubled Debt Restructurings by Class | Troubled Debt Restructurings (by class)For the year ended December 31, 2021 Number of Loans Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Recorded Investment At Period EndChurch loans: Wholly-Owned First 2 $ 5,387 $ 5,387 $ 5,313Wholly-Owned Junior — — — —Participation First — — — —Participation Junior — — — —Total 2 $ 5,387 $ 5,387 $ 5,313 Troubled Debt Restructurings (by class)For the year ended December 31, 2020 Number of Loans Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Recorded Investment At Period EndChurch loans: Wholly-Owned First 1 $ 1,936 $ 1,955 $ 1,947Wholly-Owned Junior — — — —Participation First — — — —Participation Junior — — — —Total 1 $ 1,936 $ 1,955 $ 1,947 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Revenue Recognition [Abstract] | |
Schedule of Disaggregated Revenue | December 31, 2021 2020Non-interest income, in scope of ASC 606 Broker-dealer fees and commissions $ 878 $ 762Gains on loan sales 64 69Gain on sale of foreclosed assets 44 —Lease income — 51Other non-interest income 9 9Non-interest income, out of scope, ASC 606 Lending fees 207 154Gain on debt extinguishment 2,398 2,400Total non-interest income $ 3,600 $ 3,445 |
Schedule of Revenue by Transaction and Assets Under Management | (dollars in thousands) For the twelve months ended December 31, 2021 December 31, 2020Broker-dealer revenue Securities commissions Transactional $ 131 $ 188AUM 40 33 171 221Sale of investment company shares Transactional 34 57AUM 98 73 132 130Other insurance product revenue Transactional 187 49AUM 48 48 235 97Advisory fee income Transactional — 4AUM 340 310 340 314Total broker-dealer revenue Transactional 352 298AUM 526 464 $ 878 $ 762 |
Loan Transfers and Servicing (T
Loan Transfers and Servicing (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Loan Transfers and Servicing [Abstract] | |
Schedule of Servicing Assets | As of and for the years ended December 31, December 31, 2021 2020Participation loans interests sold by the Company during the year $ 14,053 $ 17,106Total participation interests sold and serviced by the Company 46,056 37,962Servicing income 189 143 Servicing Assets Balance, beginning of period $ 147 $100Additions: Servicing obligations from sale of loan participations 81 99Subtractions: Amortization (58) (52)Balance, end of period $ 170 $ 147 |
Foreclosed Assets (Tables)
Foreclosed Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Foreclosed Assets [Abstract] | |
Foreclosed Asset Expenses | Foreclosed Asset Expensesfor the years endedDecember 31, 2021 2020Provision for losses $ — $ —Operating expenses 22 11Total expenses $ 22 $ 11 |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Premises and Equipment [Abstract] | |
Summary of Premises and Equipment | As of December 31, December 31, 2021 2020 Furniture and office equipment $ 522 $ 521Computer system 214 214Leasehold improvements 43 43Total premises and equipment 779 778Less accumulated depreciation and amortization (607) (559)Premises and equipment, net $ 172 $ 219 2021 2020 Depreciation and amortization expense for the years ended December 31, $ 48 $ 52 |
Credit Facilities and Other D_2
Credit Facilities and Other Debt (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Line of Credit Facility [Line Items] | |
Summary of Principal Terms of Term Debt | Nature of Borrowing Interest Rate Interest Rate Type Amount Outstanding Monthly Payment Maturity Date Loan Collateral Pledged Cash PledgedTerm Loan 2.525% Fixed $ 32,749 $ 450 11/1/2026 $ 39,680 $ —KCT LOC 3.750% Variable — — 9/30/2022 8,492 —ACCU LOC 4.000% Variable 2,000 — 9/23/2022 6,768 —ACCU Secured 4.750% Fixed 17 — 7/1/2026 — 17 |
Credit Facilities [Member] | |
Line of Credit Facility [Line Items] | |
Future Principal Contractual Payments of Term Debt | 2022 $ 3,7372023 3,9782024 4,1882025 4,4172026 16,429 $ 32,749 |
Investor Notes Payable (Tables)
Investor Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Instrument [Line Items] | |
Schedule of Investor Notes Payable | As of As of December 31, 2021 December 31, 2020SEC Registered Public OfferingsOffering Type Amount WeightedAverageInterestRate Amount WeightedAverageInterestRate Class 1 OfferingUnsecured $ 3,654 4.45% $ 9,010 3.94%Class 1A OfferingUnsecured 27,116 4.11% 48,982 3.16%2021 Class A OfferingUnsecured 34,524 3.20% — —%Public Offering Total $ 65,294 3.65% $ 57,992 3.28% Private Offerings Subordinated NotesUnsecured $ 11,526 4.47% $ 11,655 4.49%Secured NotesSecured — —% 6,580 3.99%Private Offering Total $ 11,526 4.47% $ 18,235 4.31% Total Notes Payable $ 76,820 3.77% $ 76,227 3.53% Notes Payable Totals by Security Unsecured TotalUnsecured $ 76,820 3.77% $ 69,647 3.48%Secured TotalSecured $ — —% $ 6,580 3.99% |
Notes Payable [Member] | |
Debt Instrument [Line Items] | |
Schedule of Maturities of Notes Payable | 2022 $ 30,4422023 10,0332024 14,2382025 12,1262026 9,981 76,820Debt Issuance Costs 88Notes payable, net of debt issuance costs $ 76,732 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies [Abstract] | |
Unfunded Commitments | Contract Amount at: December 31, 2021 December 31, 2020Undisbursed loans $ 270 $ 2,774 |
Information About Existing Operating Leases | For the Year Ended 2021 2020 Lease cost Operating lease cost$ 174 $ 174 Other information Cash paid for operating leases 174 169 Right-of-use assets obtained in exchange for operating lease liabilities — 53 Weighted average remaining lease term (in years) 1.96 2.87 Weighted-average discount rate 4.71% 4.64% |
Future Minimum Lease Payments and Lease Costs | Lease Payments Lease Costs2022 $ 157 $ 1532023 155 146Total $ 312 $ 299 |
Office Operations and Other E_2
Office Operations and Other Expenses (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Office Operations and Other Expenses [Abstract] | |
Schedule of Office Operations and Other Expenses | December 31, 2021 December 31, 2020Technology and communication expenses $ 357 $ 411Insurance 350 295Lease and occupancy expense 192 194Outsourced operations 131 157Staff and travel expense 71 65Loan expenses 53 87Clearing firm fees 63 60Other 98 84Total $ 1,315 $ 1,353 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Measurements [Abstract] | |
Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments | Fair Value Measurements at December 31, 2021 using CarryingValue Quoted Pricesin ActiveMarkets forIdentical Assets (Level 1) SignificantOtherObservableInputs(Level 2) SignificantUnobservableInputs(Level 3) Fair ValueFINANCIAL ASSETS: Cash $ 28,080 $ 28,080 $ — $ — $ 28,080Loans, net 97,243 — — 97,913 97,913Investments in joint venture 882 — — 882 882Accrued interest receivable 507 — — 507 507FINANCIAL LIABILITIES: Lines of credit $ 2,000 $ — $ — $ 2,000 $ 2,000Term-debt 32,749 — — 31,489 31,489Other secured borrowings 17 — — 18 18Notes payable 76,732 — — 76,871 76,871Other financial liabilities 455 — — 455 455 Fair Value Measurements at December 31, 2020 using CarryingValue Quoted Pricesin ActiveMarkets forIdentical Assets (Level 1) SignificantOtherObservableInputs(Level 2) SignificantUnobservableInputs(Level 3) Fair ValueFINANCIAL ASSETS: Cash $ 21,922 $ 21,922 $ — $ — $ 21,922Certificates of deposit 1,761 — 1,779 — 1,779Loans, net 116,121 — — 115,477 115,477Investments in joint venture 884 — — 884 884Accrued interest receivable 798 — — 798 798FINANCIAL LIABILITIES: Term-debt $ 51,516 $ — $ — $ 43,832 $ 43,832Notes payable 76,194 — — 78,262 78,262Other financial liabilities 513 — — 513 513 |
Schedule of Fair Value Measured on a Nonrecurring Basis | Fair Value Measurements Using: Quoted Pricesin ActiveMarkets forIdentical Assets (Level 1) SignificantOtherObservableInputs(Level 2) SignificantUnobservableInputs(Level 3) TotalAssets at December 31, 2021: Collateral-dependent loans (net of allowance and discount) $ — $ — $ 8,981 $ 8,981Investments in joint venture — — 882 882Foreclosed assets (net of allowance) — — 301 301Total $ — $ — $ 10,164 $ 10,164 Assets at December 31, 2020: Collateral-dependent loans (net of allowance and discount) $ — $ — $ 5,815 $ 5,815Investments in joint venture — — 884 884Foreclosed assets (net of allowance) — — 301 301Total $ — $ — $ 7,000 $ 7,000 |
Schedule of Valuation Methodologies Used to Measure the Fair Value Adjustments for Level 3 Assets Recorded at Fair Value on a Nonrecurring Basis | December 31, 2021Assets Fair Value(in thousands) ValuationTechniques UnobservableInput Range(Weighted Average)Impaired loans $ 8,981 Discounted appraised value Selling cost / Estimated market decrease 11% - 81% (21%)Investments in joint venture $ 882 Internal evaluations Estimated future market value 0% (0%)Foreclosed assets $ 301 Internal evaluations Selling cost 6% (6%) December 31, 2020Assets Fair Value(in thousands) ValuationTechniques UnobservableInput Range(Weighted Average)Impaired loans $ 5,815 Discounted appraised value Selling cost / Estimated market decrease 21% - 81% (23%)Investments in joint venture $ 884 Internal evaluations Estimated future market value 0% (0%)Foreclosed assets $ 301 Internal evaluations Selling cost 6% (6%) |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Information [Abstract] | |
Schedule of Financial Information by Reportable Segments | Twelve months ended December 31, 2021 December 31, 2020 Revenue from external sources FinanceCompany $ 9,651 $ 11,019 Broker Dealer 990 769 Adjustments / Eliminations — — Total $ 10,641 $ 11,788 Revenue from internal sources Finance Company $ — $ — Broker Dealer 1,244 1,000 Other Segments 193 216 Adjustments / Eliminations (1,437) (1,216) Total $ — $ — Total non-interest expense and provision for tax Finance Company $ 3,605 $ 3,789 Broker Dealer 1,334 1,238 Other Segments 219 152 Adjustments / Eliminations (217) (150) Total $ 4,941 $ 5,029 Net profit (loss) Finance Company $ 1,108 $ 1,477 Broker Dealer 900 530 Other Segments (25) 64 Adjustments / Eliminations (133) 45 Total $ 1,850 $ 2,116 December 31, December 31, 2021 2020 (Unaudited) (Audited) Total assets Finance Company $ 123,753 $ 139,410 Broker Dealer 3,946 3,187 Other Segments 559 576 Adjustments / Eliminations (293) (80) Total $ 127,965 $ 143,093 |
Condensed Financial Statement_2
Condensed Financial Statements of Parent Company (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Condensed Financial Statements of Parent Company [Abstract] | |
Schedule of Parent Company Balance Sheets | As of December 31, 2021 2020Assets: Cash $ 24,030 $ 18,408Certificates of deposit — 1,761Loans receivable, net of allowance for loan losses 97,243 116,121Investment in subsidiaries 2,645 1,903Other assets 3,045 3,699Total assets $ 126,963 $ 141,892Liabilities and members’ equity Liabilities: Other borrowings $ 34,766 $ 51,405Notes payable, net of debt issuance costs 76,025 75,644Other liabilities 1,661 1,935Total liabilities 112,452 128,984Equity 14,511 12,908Total liabilities and members' equity $ 126,963 $ 141,892 |
Schedule of Parent Company Statements of Income | For the years ended December 31, 2021 2020Income: Interest Income $ 7,040 $ 8,335Other income 2,566 2,683Total income 9,606 11,018Interest expense: Term-debt 1,007 1,638Notes payable 3,808 3,926Total interest expense 4,815 5,564Provision for loan losses 122 188Other operating expenses 3,548 3,776Income before provision for income taxes 1,121 1,490Provision for income taxes and state LLC fees 13 13Income before equity in undistributed net income of subsidiaries 1,108 1,477Equity in undistributed net income of subsidiaries 742 639Net income $ 1,850 $ 2,116 |
Schedule of Parent Company Statements of Cash Flows | For the years ended December 31, 2021 2020CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 1,850 $ 2,116Adjustments to reconcile net income to net cash used by operating activities: Equity in undistributed net income of subsidiaries (742) (639)Depreciation 47 50Amortization of deferred loan fees (231) (257)Amortization of debt issuance costs 616 97Provision for loan losses 122 188Accretion of loan discount (27) (31)Gain on sale of loans (64) (69)Gain on sale of foreclosed assets (44) —Loss on sale of fixed assets — 8Gain on debt extinguishment (2,287) (2,400)Changes in: Other assets 689 190Other liabilities (275) (223)Net cash (used) by operating activities (346) (970)CASH FLOWS FROM INVESTING ACTIVITIES: Loan purchases (842) —Loan originations (14,319) (19,449)Loan sales 14,053 19,827Loan principal collections 20,105 12,413Redemption (purchase) of certificates of deposit 1,761 (1,761)Foreclosed property sales 44 —Sale of property and equipment — 24Purchase of property and equipment (1) (88)Net cash provided by investing activities 20,801 10,966CASH FLOWS FROM FINANCING ACTIVITIES: Net change in term-debt (16,353) (17,621)Borrowings, net of repayments on lines of credit 2,000 —Net change in notes payable 593 3,126Debt issuance costs (828) (75)Dividends paid on preferred units (245) (315)Net cash (used) by financing activities (14,833) (14,885)Net increase (decrease) in cash and restricted cash 5,622 (4,889)Cash, cash equivalents, and restricted cash at beginning of period 18,408 23,297Cash, cash equivalents, and restricted cash at end of period $ 24,030 $ 18,408Supplemental disclosures of cash flow information Interest paid $ 3,788 $ 4,409Income taxes paid 20 15Transfer of loans to foreclosed assets — —Dividends declared to preferred unit holders 203 201 |
Nature of Business and Summar_3
Nature of Business and Summary of Significant Accounting Policies (Narrative) (Details) | 12 Months Ended | |
Dec. 31, 2021USD ($)segment | Dec. 31, 2020USD ($) | |
Significant Accounting Policies [Line Items] | ||
Certificates of deposit | $ 1,761,000 | |
Number of loan portfolio segments | segment | 1 | |
Minimum [Member] | ||
Significant Accounting Policies [Line Items] | ||
Estimated useful lives of property and equipment | 3 years | |
Operating lease, remaining lease term | 3 months | |
Maximum [Member] | ||
Significant Accounting Policies [Line Items] | ||
Certificates of deposit | $ 0 | $ 1,757,000 |
Estimated useful lives of property and equipment | 7 years | |
Operating lease, remaining lease term | 2 years |
Pledged Cash and Restricted C_2
Pledged Cash and Restricted Cash (Narrative) (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Pledged Cash and Restricted Cash [Abstract] | |
Pledged cash | $ 17,000 |
Pledged Cash and Restricted C_3
Pledged Cash and Restricted Cash (Reconciliation of Cash, Cash Equivalents, and Restricted Cash) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Pledged Cash and Restricted Cash [Abstract] | |||
Cash and cash equivalents | $ 28,080 | $ 21,922 | |
Restricted cash | 69 | 51 | |
Total cash, cash equivalents, and restricted cash shown in the statements of cash flows | $ 28,149 | $ 21,973 | $ 26,045 |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Details) | Mar. 20, 2020USD ($)loan | Aug. 14, 2013USD ($)loan | Sep. 30, 2020USD ($) | Dec. 31, 2021USD ($)loan | Dec. 31, 2020USD ($)loan | Jan. 13, 2020USD ($) |
Related Party Transaction [Line Items] | ||||||
Pledged cash | $ 17,000,000 | |||||
Lines of credit | 2,000,000 | |||||
Certificates of deposit | $ 1,761,000 | |||||
Master LP Agreement [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Loans sold to related party | $ 17,000 | |||||
ECCU [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Number of Loans purchased from related party | loan | 0 | 0 | ||||
Loans sold to related party | $ 0 | $ 1,164,000 | ||||
ACCU [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Number of Loans purchased from related party | loan | 0 | 0 | ||||
Loans sold to related party | $ 1,000,000 | $ 1,307,000 | ||||
Pledged cash | 17,000 | |||||
ACCU [Member] | Master LP Agreement [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Loans sold to related party | 17,000 | |||||
UFCU [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Number of loans sold to related party | loan | 1 | |||||
Loans sold to related party | $ 5,000,000 | |||||
NFCU [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Number of loans sold to related party | loan | 1 | |||||
Loans sold to related party | $ 5,000,000 | |||||
KCT Credit Union [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Loans sold to related party | 2,847,000 | |||||
Board and Executive Management [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Notes held by related parties | $ 261,000,000 | 480,000,000 | ||||
Minimum [Member] | MP Securities [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Related party servicing fee | 0.25% | |||||
Maximum [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Certificates of deposit | $ 0 | 1,757,000 | ||||
Maximum [Member] | MP Securities [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Related party servicing fee | 5.50% | |||||
MP Securities [Member] | ACCU [Member] | Networking Agreement [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Notice period for termination of agreement | 30 days | |||||
KCT Line of Credit [Member] | KCT Credit Union [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Maximum borrowing capacity | $ 7,000,000 | |||||
Facility maturity date | Sep. 30, 2022 | |||||
Lines of credit | $ 0 | $ 0 | ||||
Certificates of deposit | $ 1,000,000 | |||||
Maturity Date | Oct. 13, 2021 | |||||
ACCU Line of Credit [Member] | ACCU [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Maximum borrowing capacity | 5,000,000 | |||||
Lines of credit | $ 2,000,000 | |||||
Maturity Date | Sep. 23, 2022 |
Related Party Transactions (Sum
Related Party Transactions (Summary of Related Party Balances) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
ECCU [Member] | ||
Related Party Transaction [Line Items] | ||
Total funds held on deposit | $ 3,797 | $ 7,414 |
Loan participations purchased from and serviced by related party | 242 | 256 |
ACCU [Member] | ||
Related Party Transaction [Line Items] | ||
Total funds held on deposit | 4,083 | 7,846 |
Outstanding loan participations sold to related party and serviced by the Company | 1,830 | |
ACCU [Member] | Line Of Credit [Member] | ||
Related Party Transaction [Line Items] | ||
Amount owed to related party | 2,000 | |
Loans pledged on line of credit | 6,768 | |
ACCU [Member] | Secured Borrowings [Member] | ||
Related Party Transaction [Line Items] | ||
Amount owed to related party | 17 | |
KCT Credit Union [Member] | ||
Related Party Transaction [Line Items] | ||
Total funds held on deposit | 1,018 | 1,019 |
Loans pledged on line of credit | 8,492 | |
Outstanding loan participations sold to related party and serviced by the Company | 4,598 | 1,844 |
UFCU [Member] | ||
Related Party Transaction [Line Items] | ||
Outstanding loan participations sold to related party and serviced by the Company | 4,275 | 4,323 |
NFCU [Member] | ||
Related Party Transaction [Line Items] | ||
Outstanding loan participations sold to related party and serviced by the Company | 4,991 | 1,863 |
Officers And Managers [Member] | ||
Related Party Transaction [Line Items] | ||
Outstanding notes payable to officers and managers | $ 261 | $ 316 |
Related Party Transactions (Sch
Related Party Transactions (Schedule of Related Party Transactions) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | ||
Income from related party | $ 3,600,000 | $ 3,445,000 |
ECCU [Member] | ||
Related Party Transaction [Line Items] | ||
Interest earned on funds held with related party | 2,000 | 18,000 |
Loans sold to related party | 0 | 1,164,000 |
Interest income earned on loans purchased from related party | 15,000 | 15,000 |
ECCU [Member] | Networking Agreement [Member] | ||
Related Party Transaction [Line Items] | ||
Fees paid to and expenses with related party | 8,000 | 7,000 |
ECCU [Member] | Successor Servicing Agreement [Member] | ||
Related Party Transaction [Line Items] | ||
Income from related party | 9,000 | 9,000 |
ECCU [Member] | Lease Agreement [Member] | ||
Related Party Transaction [Line Items] | ||
Fees paid to and expenses with related party | 146,000 | 146,000 |
ACCU [Member] | ||
Related Party Transaction [Line Items] | ||
Interest earned on funds held with related party | 21,000 | 76,000 |
Loans sold to related party | 1,000,000 | 1,307,000 |
Dollar amount of secured borrowings | 17,000 | |
Dollar amount of draws on line of credit | 2,000,000 | |
Interest expensed on line of credit | 22,000 | |
ACCU [Member] | MP Securities [Member] | ||
Related Party Transaction [Line Items] | ||
Income from related parties | 46,000 | 36,000 |
ACCU [Member] | Loans Purchased [Member] | ||
Related Party Transaction [Line Items] | ||
Interest income earned on loans purchased from related party | 61,000 | |
ACCU [Member] | Networking Agreement [Member] | MP Securities [Member] | ||
Related Party Transaction [Line Items] | ||
Fees paid to and expenses with related party | 84,000 | 101,000 |
KCT Credit Union [Member] | ||
Related Party Transaction [Line Items] | ||
Interest earned on funds held with related party | 18,000 | 22,000 |
Loans sold to related party | 2,847,000 | |
Dollar amount of draws on line of credit | 3,825,000 | |
Interest expensed on line of credit | 40,000 | |
KCT Credit Union [Member] | MP Securities [Member] | ||
Related Party Transaction [Line Items] | ||
Fees paid to and expenses with related party | $ 35,000 | $ 12,000 |
Loans Receivable and Allowanc_3
Loans Receivable and Allowance for Loan Losses (Narrative) (Details) | 12 Months Ended | |
Dec. 31, 2021USD ($)loansegmentitem | Dec. 31, 2020USD ($)loan | |
Loans Receivable and Allowance for Loan Losses [Abstract] | ||
Loan participations transferred under recourse agreement | $ | $ 17,000 | |
Number of loan categories | item | 4 | |
Loan interest rate | 6.21% | 6.55% |
Number of loan portfolio segments | segment | 1 | |
Number of restructured loans | 2 | 1 |
Number of defaulted restructured loans being considered for forbearance | 2 | |
Funds committed to be advanced in connection with impaired loans | $ | $ 0 | |
Number of deferred loans for which repayment has not resumed, CARES Act | 3 | |
Principal balance of loans modified, CARES Act | $ | $ 13,200,000 | |
Number of loans restructured as troubled debt | 1 | |
Number of loans restructured qualified under CARES Act modification | 1 | |
Amount of loan outstanding at time of modification | $ | $ 1,300,000 | |
Number of borrowers granted deferral principal and/or interest payments | 35 | |
Outstanding principal balance | $ | $ 47,800,000 | |
Maturity year | 2036 | |
Number of loans restructred defaulted | 1 |
Loans Receivable and Allowanc_4
Loans Receivable and Allowance for Loan Losses (Summary of Loans) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total loans | $ 99,405 | $ 118,347 | |
Deferred loan fees, net | (304) | (481) | |
Loan discount | (220) | (229) | |
Allowance for loan losses | (1,638) | (1,516) | $ (1,393) |
Loans, net | 97,243 | 116,121 | |
Real Estate Secured [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total loans | 98,858 | 118,203 | |
Other Secured [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total loans | 425 | ||
Unsecured [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total loans | $ 122 | $ 144 |
Loans Receivable and Allowanc_5
Loans Receivable and Allowance for Loan Losses (Schedule of Changes in Allowance for Loan Losses) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Loans Receivable and Allowance for Loan Losses [Abstract] | ||
Balance, beginning of period | $ 1,516 | $ 1,393 |
Provision (credit) for loan loss | 122 | 188 |
Charge-offs | (65) | |
Balance, end of period | $ 1,638 | $ 1,516 |
Loans Receivable and Allowanc_6
Loans Receivable and Allowance for Loan Losses (Schedule of Loans and Allowance for Loan Losses by Impairment Methodology) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Loans Receivable and Allowance for Loan Losses [Abstract] | |||
Loans: Individually evaluated for impairment | $ 9,688 | $ 6,181 | |
Loans: Collectively evaluated for impairment | 89,717 | 112,166 | |
Loans: Balance | 99,405 | 118,347 | |
Allowance for loan losses: Individually evaluated for impairment | 631 | 290 | |
Allowance for loan losses: Collectively evaluated for impairment | 1,007 | 1,226 | |
Allowance for loan losses: Balance | $ 1,638 | $ 1,516 | $ 1,393 |
Loans Receivable and Allowanc_7
Loans Receivable and Allowance for Loan Losses (Schedule of Loan Portfolio Credit Quality Indicators by Class) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | $ 99,405 | $ 118,347 |
Wholly-Owned First [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 95,476 | 114,385 |
Wholly-Owned Junior [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 3,687 | 3,505 |
Participation First [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 242 | 457 |
Pass [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 69,759 | 85,484 |
Pass [Member] | Wholly-Owned First [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 67,580 | 83,494 |
Pass [Member] | Wholly-Owned Junior [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 2,007 | 1,789 |
Pass [Member] | Participation First [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 172 | 201 |
Watch [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 19,958 | 26,682 |
Watch [Member] | Wholly-Owned First [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 19,858 | 24,710 |
Watch [Member] | Wholly-Owned Junior [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 30 | 1,716 |
Watch [Member] | Participation First [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 70 | 256 |
Substandard [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 9,185 | 5,677 |
Substandard [Member] | Wholly-Owned First [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 7,535 | 5,677 |
Substandard [Member] | Wholly-Owned Junior [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 1,650 | |
Doubtful [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 503 | 504 |
Doubtful [Member] | Wholly-Owned First [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | $ 503 | $ 504 |
Loans Receivable and Allowanc_8
Loans Receivable and Allowance for Loan Losses (Schedule of Age Analysis of Past Due Loans by Class) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | $ 99,405 | $ 118,347 |
30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 2,704 | |
Greater Than 90 Days [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 503 | 4,185 |
Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 503 | 6,889 |
Current [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 98,902 | 111,458 |
Wholly-Owned First [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 95,476 | 114,385 |
Wholly-Owned First [Member] | 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 2,704 | |
Wholly-Owned First [Member] | Greater Than 90 Days [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 503 | 4,185 |
Wholly-Owned First [Member] | Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 503 | 6,889 |
Wholly-Owned First [Member] | Current [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 94,973 | 107,496 |
Wholly-Owned Junior [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 3,687 | 3,505 |
Wholly-Owned Junior [Member] | Current [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 3,687 | 3,505 |
Participation First [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 242 | 457 |
Participation First [Member] | Current [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | $ 242 | $ 457 |
Loans Receivable and Allowanc_9
Loans Receivable and Allowance for Loan Losses (Schedule of Impaired Loans by Class) (Details) - Church Loans [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Unpaid Principal Balance, Total | $ 12,590 | $ 10,146 |
Recorded Balance, Total | 12,511 | 10,081 |
Recorded Investment, Total | 12,360 | 9,922 |
Related Allowance | 631 | 290 |
Average Recorded Investment, Total | 12,440 | 10,260 |
Interest Income Recognized, Total | 582 | 368 |
Wholly-Owned First [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Unpaid Principal Balance, With no allowance recorded | 9,468 | 9,856 |
Unpaid Principal Balance, With an allowance recorded | 1,437 | 290 |
Recorded Balance, With no allowance recorded | 9,468 | 9,791 |
Recorded Balance, With an allowance recorded | 1,393 | 290 |
Recorded Investment, With no allowance recorded | 9,339 | 9,632 |
Recorded investment, With an allowance recorded | 1,371 | 290 |
Related Allowance | 631 | 290 |
Average Recorded Investment, With no allowance recorded | 9,390 | 9,674 |
Average Recorded Investment, With an allowance recorded | 1,382 | 290 |
Interest Income Recognized, With no allowance recorded | 524 | 357 |
Interest Income Recognized, With an allowance recorded | 58 | |
Wholly-Owned Junior [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Unpaid Principal Balance, With no allowance recorded | 1,685 | |
Recorded Balance, With no allowance recorded | 1,650 | |
Recorded Investment, With no allowance recorded | 1,650 | |
Average Recorded Investment, With no allowance recorded | $ 1,668 | |
Participation First [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Average Recorded Investment, With an allowance recorded | 296 | |
Interest Income Recognized, With an allowance recorded | $ 11 |
Loans Receivable and Allowan_10
Loans Receivable and Allowance for Loan Losses (Schedule of Loans on Non-accrual Status by Class) (Details) - Church Loans [Member] - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Nonaccrual loans | $ 7,812 | $ 7,635 |
Wholly-Owned First [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Nonaccrual loans | 6,162 | 6,405 |
Wholly-Owned Junior [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Nonaccrual loans | $ 1,650 | |
Participation First [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Nonaccrual loans | $ 1,230 |
Loans Receivable and Allowan_11
Loans Receivable and Allowance for Loan Losses (Schedule of Troubled Debt Restructurings by Class) (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($)loan | Dec. 31, 2020USD ($)itemloan | |
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Number of Loans | loan | 2 | 1 |
Amount of loan outstanding at time of modification | $ 1,300 | |
Church Loans [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Number of Loans | 2 | 1 |
Pre-Modification Outstanding Recorded Investment | $ 5,387 | $ 1,936 |
Post-Modification Outstanding Recorded Investment | 5,387 | 1,955 |
Amount of loan outstanding at time of modification | $ 5,313 | $ 1,947 |
Church Loans [Member] | Wholly-Owned First [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Number of Loans | 2 | 1 |
Pre-Modification Outstanding Recorded Investment | $ 5,387 | $ 1,936 |
Post-Modification Outstanding Recorded Investment | 5,387 | 1,955 |
Amount of loan outstanding at time of modification | $ 5,313 | $ 1,947 |
Investments in Joint Venture (N
Investments in Joint Venture (Narrative) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2015 |
Schedule of Equity Method Investments [Line Items] | |||
Investments in joint venture | $ 882 | $ 884 | $ 900 |
Tesoro Hills [Member] | Ministry Partners Investment Company [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership percentage held | 74.00% | 74.00% | 100.00% |
Revenue Recognition (Schedule o
Revenue Recognition (Schedule of Disaggregated Revenue) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Total non-interest income | $ 3,600 | $ 3,445 |
Broker-Dealer Fees and Commissions [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total non-interest income | 878 | 762 |
Gain on Loan Sales [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total non-interest income | 64 | 69 |
Gain in Sale of Foreclosed Assets [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total non-interest income | 44 | |
Lease Income [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total non-interest income | 51 | |
Gain on Debt Extinguishment [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total non-interest income | 2,398 | 2,400 |
Other Non-Interest Income [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total non-interest income | 9 | 9 |
Lending Fees [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total non-interest income | $ 207 | $ 154 |
Revenue Recognition (Revenue fr
Revenue Recognition (Revenue from Management Of Invested Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customer | $ 3,600 | $ 3,445 |
Broker-Dealer Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customer | 878 | 762 |
Broker-Dealer Revenue, Transactional [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customer | 352 | 298 |
Broker-Dealer Revenue, AUM [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customer | 526 | 464 |
Securities Commissions Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customer | 171 | 221 |
Securities Commissions Revenue, Transactional [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customer | 131 | 188 |
Securities Commissions Revenue, AUM [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customer | 40 | 33 |
Sale Of Investment Company Shares Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customer | 132 | 130 |
Sale Of Investment Company Shares Revenue, Transactional [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customer | 34 | 57 |
Sale Of Investment Company Shares Revenue, AUM [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customer | 98 | 73 |
Other Insurance Product Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customer | 235 | 97 |
Other Insurance Product Revenue, Transactional [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customer | 187 | 49 |
Other Insurance Product Revenue, AUM [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customer | 48 | 48 |
Advisory Fee Income [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customer | 340 | 314 |
Advisory Fee Income, Transactional [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customer | 4 | |
Advisory Fee Income, AUM [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customer | $ 340 | $ 310 |
Loan Transfers and Servicing (N
Loan Transfers and Servicing (Narrative) (Details) | 12 Months Ended | |
Dec. 31, 2021USD ($)loan | Dec. 31, 2020USD ($) | |
Master LP Agreement [Member] | ||
Loans sold to related party | $ 17,000 | |
ACCU [Member] | ||
Number of loans sold | loan | 2 | |
Proceeds from loans | $ 1,600,000 | |
Loans sold to related party | $ 1,000,000 | 1,307,000 |
ACCU [Member] | Master LP Agreement [Member] | ||
Loans sold to related party | $ 17,000 | |
ECCU [Member] | ||
Number of loans sold | loan | 1 | |
Proceeds from loans | 1,200,000 | |
Loans sold to related party | $ 0 | $ 1,164,000 |
Loan Transfers and Servicing (S
Loan Transfers and Servicing (Schedule of Servicing Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Loan participation interests sold by the Company | $ 14,053 | $ 17,106 |
Total participation interests sold and serviced by the Company | 46,056 | 37,962 |
Total non-interest income | 3,600 | 3,445 |
Balance, beginning of period | 147 | 100 |
Additions: Servicing obligations from sale of loan participations | 81 | 99 |
Subtractions: Amortization | (58) | (52) |
Balance, end of period | 170 | 147 |
Servicing Assets [Member] | ||
Total non-interest income | $ 189 | $ 143 |
Foreclosed Assets (Narrative) (
Foreclosed Assets (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Foreclosed Assets [Abstract] | ||
Foreclosed assets | $ 301,000 | $ 301,000 |
Allowance for losses on foreclosed assets | 0 | 0 |
Provision for losses on foreclosed assets | 0 | $ 0 |
Gain on sale of real estate | $ 44,000 |
Foreclosed Assets (Foreclosed A
Foreclosed Assets (Foreclosed Asset Expenses) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Foreclosed Assets [Abstract] | ||
Provision for losses | $ 0 | $ 0 |
Operating expenses | 22,000 | 11,000 |
Total expenses | $ 22,000 | $ 11,000 |
Premises and Equipment (Summary
Premises and Equipment (Summary of Premises and Equipment) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | ||
Total premises and equipment | $ 779 | $ 778 |
Less accumulated depreciation and amortization | (607) | (559) |
Premises and equipment, net | 172 | 219 |
Depreciation and amortization expense | 48 | 52 |
Furniture And Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total premises and equipment | 522 | 521 |
Computer System [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total premises and equipment | 214 | 214 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total premises and equipment | $ 43 | $ 43 |
Credit Facilities and Other D_3
Credit Facilities and Other Debt (Narrative) (Details) $ in Thousands | Mar. 05, 2021USD ($) | Sep. 25, 2020USD ($) | Dec. 31, 2021USD ($)item | Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($) |
Line of Credit Facility [Line Items] | |||||
Gain on debt extinguishment | $ 2,398 | $ 2,400 | |||
Lines of credit | 2,000 | ||||
Other secured borrowings | 17 | ||||
Paycheck Protection Program Loans [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Income recognized from loans forgiven | $ 111 | ||||
ACCU Secured [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Lines of credit | $ 17 | ||||
Interest rate | 4.75% | ||||
Other secured borrowings | $ 17 | ||||
Term Loan [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Number of credit facilities | item | 1 | ||||
Minimum collateralization ratio | 120.00% | 120.00% | |||
Term Loan [Member] | Loans Receivable [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Collateral pledged | $ 39,680 | ||||
KCT Line of Credit [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Minimum collateralization ratio | 120.00% | ||||
Maximum borrowing capacity | $ 7,000 | ||||
Spread over prime rate | 0.50% | ||||
Interest rate | 3.75% | ||||
Facility renewal period | 1 year | ||||
Minimum cancellation notice | 30 days | ||||
Maturity period | 120 days | ||||
Delinquency period | 60 days | ||||
KCT Line of Credit [Member] | Loans Receivable [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Collateral pledged | $ 8,492 | $ 7,200 | |||
ACCU Line of Credit [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Minimum collateralization ratio | 120.00% | ||||
Minimum Liquidity | $ 10,000 | ||||
Maximum borrowing capacity | $ 5,000 | ||||
Facility maturity date | Sep. 23, 2022 | ||||
Lines of credit | $ 2,000 | ||||
Spread over prime rate | 0.75% | ||||
Interest rate | 4.00% | ||||
Minimum cancellation notice | 30 days | ||||
Maturity period | 1 year | ||||
ACCU Line of Credit [Member] | Loans Receivable [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Collateral pledged | $ 6,768 | ||||
Previous Credit Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Debt repaid | $ 15,000 | ||||
Gain on debt extinguishment | $ 2,400 |
Credit Facilities and Other D_4
Credit Facilities and Other Debt (Summary of Principal Terms of Term Debt) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Line of Credit Facility [Line Items] | ||
Amount Outstanding, Term loan | $ 32,749 | $ 51,516 |
Amount outstanding, Line of credit | $ 2,000 | |
Term Loan [Member] | ||
Line of Credit Facility [Line Items] | ||
Interest Rate, Term Loan | 2.525% | |
Amount Outstanding, Term loan | $ 32,749 | |
Monthly Payment | $ 450 | |
Maturity Date | Nov. 1, 2026 | |
KCT Line of Credit [Member] | ||
Line of Credit Facility [Line Items] | ||
Interest Rate, Line of Credit | 3.75% | |
Maturity Date | Sep. 30, 2022 | |
ACCU Line of Credit [Member] | ||
Line of Credit Facility [Line Items] | ||
Interest Rate, Line of Credit | 4.00% | |
Amount outstanding, Line of credit | $ 2,000 | |
Maturity Date | Sep. 23, 2022 | |
ACCU Secured [Member] | ||
Line of Credit Facility [Line Items] | ||
Interest Rate, Line of Credit | 4.75% | |
Amount outstanding, Line of credit | $ 17 | |
Maturity Date | Jul. 1, 2026 | |
Loans Receivable [Member] | Term Loan [Member] | ||
Line of Credit Facility [Line Items] | ||
Amount of Collateral Pledged | $ 39,680 | |
Loans Receivable [Member] | KCT Line of Credit [Member] | ||
Line of Credit Facility [Line Items] | ||
Amount of Collateral Pledged | 8,492 | $ 7,200 |
Loans Receivable [Member] | ACCU Line of Credit [Member] | ||
Line of Credit Facility [Line Items] | ||
Amount of Collateral Pledged | 6,768 | |
Cash [Member] | ACCU Secured [Member] | ||
Line of Credit Facility [Line Items] | ||
Amount of Collateral Pledged | $ 17 |
Credit Facilities and Other D_5
Credit Facilities and Other Debt (Future Principal Contractual Payments of Term Debt) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Line of Credit Facility [Line Items] | ||
Total | $ 76,820 | $ 76,227 |
Term Loan [Member] | ||
Line of Credit Facility [Line Items] | ||
2022 | 3,737 | |
2023 | 3,978 | |
2024 | 4,188 | |
2025 | 4,417 | |
2026 | 16,429 | |
Total | $ 32,749 |
Investor Notes Payable (Narrati
Investor Notes Payable (Narrative) (Details) | Apr. 30, 2018USD ($) | Dec. 31, 2021USD ($)item | Jan. 08, 2021USD ($) | Dec. 31, 2020USD ($) | Feb. 27, 2018USD ($) | Jan. 31, 2015USD ($) |
Debt Instrument [Line Items] | ||||||
Debt issuance costs | $ 88,000 | $ 33,000 | ||||
Class 1 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Number of series in class of notes | item | 2 | |||||
Class 1A [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Number of series in class of notes | item | 2 | |||||
Notes authorized, maximum | $ 90,000,000 | |||||
2021 Class A Offering [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Number of series in class of notes | item | 2 | |||||
Notes authorized, maximum | $ 125,000,000 | |||||
Secured Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Notes authorized, maximum | $ 80,000,000 | |||||
Notes Issued | $ 80,000,000 | |||||
Secured Notes [Member] | Cash [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Minimum collateralization ratio | 100.00% | |||||
Collateral pledged | $ 0 | 0 | ||||
Secured Notes [Member] | Loans Receivable [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Minimum collateralization ratio | 105.00% | |||||
Collateral pledged | $ 10,900,000 | |||||
Subordinated Notes [Member] | Minimum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Maturity period | 12 months | |||||
Subordinated Notes [Member] | Maximum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Maturity period | 60 months | |||||
Subordinated Notes [Member] | Swap Index Rate [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate measurement period | 7 days |
Investor Notes Payable (Schedul
Investor Notes Payable (Schedule of Investor Notes Payable) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Amount | $ 76,820 | $ 76,227 |
Weighted Average Interest Rate | 3.77% | 3.53% |
Public Offerings [Member] | ||
Debt Instrument [Line Items] | ||
Amount | $ 65,294 | $ 57,992 |
Weighted Average Interest Rate | 3.65% | 3.28% |
Public Offerings [Member] | Class A [Member] | ||
Debt Instrument [Line Items] | ||
Amount | $ 3,654 | $ 9,010 |
Weighted Average Interest Rate | 4.45% | 3.94% |
Public Offerings [Member] | Class 1 [Member] | ||
Debt Instrument [Line Items] | ||
Amount | $ 27,116 | $ 48,982 |
Weighted Average Interest Rate | 4.11% | 3.16% |
Public Offerings [Member] | Class 1A [Member] | ||
Debt Instrument [Line Items] | ||
Amount | $ 34,524 | |
Weighted Average Interest Rate | 3.20% | |
Private Offerings [Member] | ||
Debt Instrument [Line Items] | ||
Amount | $ 11,526 | $ 18,235 |
Weighted Average Interest Rate | 4.47% | 4.31% |
Private Offerings [Member] | Subordinated Notes [Member] | ||
Debt Instrument [Line Items] | ||
Amount | $ 11,526 | $ 11,655 |
Weighted Average Interest Rate | 4.47% | 4.49% |
Private Offerings [Member] | Secured Notes [Member] | ||
Debt Instrument [Line Items] | ||
Amount | $ 6,580 | |
Weighted Average Interest Rate | 3.99% | |
Unsecured [Member] | ||
Debt Instrument [Line Items] | ||
Amount | $ 76,820 | $ 69,647 |
Weighted Average Interest Rate | 3.77% | 3.48% |
Secured [Member] | ||
Debt Instrument [Line Items] | ||
Amount | $ 6,580 | |
Weighted Average Interest Rate | 3.99% |
Investor Notes Payable (Sched_2
Investor Notes Payable (Schedule of Maturities of Notes Payable) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Total | $ 76,820 | $ 76,227 |
Deferred Finance Costs, Net | 88 | $ 33 |
Notes Payable [Member] | ||
Debt Instrument [Line Items] | ||
2022 | 30,442 | |
2023 | 10,033 | |
2024 | 14,238 | |
2025 | 12,126 | |
2026 | 9,981 | |
Total | 76,820 | |
Deferred Finance Costs, Net | 88 | |
Notes payable, net of debt issuance costs | $ 76,732 |
Commitments and Contingencies_2
Commitments and Contingencies (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2021item | |
Brea [Member] | |
Commitments And Contingencies [Line Items] | |
Lease expiration year | 2023 |
Number of lease extension options remaining | 0 |
Fresno [Member] | |
Commitments And Contingencies [Line Items] | |
Lease expiration year | 2022 |
Number of lease extension options remaining | 0 |
Commitments and Contingencies_3
Commitments and Contingencies (Unfunded Commitments) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Undisbursed Loans [Member] | ||
Commitments And Contingencies [Line Items] | ||
Unfunded Commitments | $ 270 | $ 2,774 |
Commitments and Contingencies_4
Commitments and Contingencies (Information About Existing Operating Leases) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies [Abstract] | ||
Operating lease cost | $ 174 | $ 174 |
Cash paid for operating leases | $ 174 | 169 |
Right-of-use assets obtained in exchange for operating lease liabilities | $ 53 | |
Weighted average remaining lease term (in years) | 1 year 11 months 15 days | 2 years 10 months 13 days |
Weighted-average discount rate | 4.71% | 4.64% |
Commitments and Contingencies_5
Commitments and Contingencies (Future Minimum Lease Payments and Lease Costs) (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Commitments and Contingencies [Abstract] | |
Lease Payments, 2022 | $ 157 |
Lease Payments, 2023 | 155 |
Lease Payments, Total | 312 |
Lease Costs, 2022 | 153 |
Lease Costs, 2023 | 146 |
Lease Costs, Total | $ 299 |
Office Operations and Other E_3
Office Operations and Other Expenses (Schedule of Office Operations and Other Expenses) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Office Operations and Other Expenses [Abstract] | ||
Technology and communication expenses | $ 357 | $ 411 |
Insurance | 350 | 295 |
Lease and occupancy expense | 192 | 194 |
Outsourced operations | 131 | 157 |
Staff and travel expense | 71 | 65 |
Loan expenses | 53 | 87 |
Clearing firm fees | 63 | 60 |
Other | 98 | 84 |
Total | $ 1,315 | $ 1,353 |
Preferred and Common Units Un_2
Preferred and Common Units Under LLC Structure (Narrative) (Details) | 12 Months Ended | |
Dec. 31, 2021item / sharesitem$ / shares | Dec. 31, 2020$ / shares | |
Class of Stock [Line Items] | ||
Liquidation preference, per share | $ / shares | $ 100 | $ 100 |
Series A Preferred Units [Member] | ||
Class of Stock [Line Items] | ||
Spread over LIBOR | 0.25% | |
Interest rate measurement period | 1 year | |
Preferred stock, dividend payment rate | 10% | |
Liquidation preference, per share | $ / shares | $ 100 | |
Number of voting rights | item / shares | 0 | |
Threshold of number of consecutive quarters without paid preferred return for appointment of managers | item | 4 | |
Number of managers that can be appointed after threshold for period of unpaid preferred returns reached | item | 2 |
Retirement Plans (Narrative) (D
Retirement Plans (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
401(k) plan [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Minimum service period | 0 years | |
Minimum age restriction for participation | 21 years | |
Maximum voluntary percentage contributions of salary (as a percent) | 86.00% | |
Contribution percentage, company match as percent of employee contribution | 3.00% | |
Contribution percentage, percent of company match after initial threshold | 50.00% | |
Contribution percentage, initial threshold for change in company matching contribution | 3.00% | |
Matching contributions by employer | $ 67,000 | $ 86,000 |
401(k) plan [Member] | Maximum [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Contribution percentage, company match as percent of employee contribution | 5.00% | |
Profit Sharing [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Minimum age restriction for participation | 21 years | |
Matching contributions by employer | $ 0 | $ 0 |
Minimum number of service hours required in plan year to be eligible under plan | 900 hours |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Fair Value Measurements [Abstract] | |
Loan participations transferred under recourse agreement | $ 17 |
Fair Value Measurements (Schedu
Fair Value Measurements (Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2015 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Carrying Value, Cash and restricted cash | $ 28,149 | $ 21,973 | $ 26,045 | |
Carrying Value, Certificates of deposit | 1,761 | |||
Carrying Value, Loans, net | 97,243 | 116,121 | ||
Carrying Value, Investment in joint venture | 882 | 884 | $ 900 | |
Carrying Value, Term-debt | 32,749 | 51,516 | ||
Carrying Value, Line of Credit | 2,000 | |||
Carrying Value, Other Secured Borrowings | 17 | |||
Carrying Value, Investor notes payable | 76,732 | 76,194 | ||
Term Loan [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Carrying Value, Term-debt | 32,749 | |||
Carrying Value [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Carrying Value, Cash and restricted cash | 28,080 | 21,922 | ||
Carrying Value, Certificates of deposit | 1,761 | |||
Carrying Value, Loans, net | 97,243 | 116,121 | ||
Carrying Value, Investment in joint venture | 882 | 884 | ||
Carrying Value, Accrued interest receivable | 507 | 798 | ||
Carrying Value, Term-debt | 32,749 | 51,516 | ||
Carrying Value, Line of Credit | 2,000 | |||
Carrying Value, Other Secured Borrowings | 17 | |||
Carrying Value, Investor notes payable | 76,732 | 76,194 | ||
Carrying Value, Other financial liabilities | 455 | 513 | ||
Fair Value [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Fair Value, Cash and restricted cash | 28,080 | 21,922 | ||
Fair Value, Certificates of deposit | 1,779 | |||
Fair Value, Loans, net | 97,913 | 115,477 | ||
Fair Value, Investment in joint venture | 882 | 884 | ||
Fair Value, Accrued interest receivable | 507 | 798 | ||
Fair Value, Term-debt | 31,489 | 43,832 | ||
Fair Value, Line of credit | 2,000 | |||
Fair Value, Other Secured borrowings | 18 | |||
Fair Value, Investor notes payable | 76,871 | 78,262 | ||
Fair Value, Other financial liabilities | 455 | 513 | ||
Quoted Prices In Active Markets For Identical Assets Level 1 [Member] | Fair Value [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Fair Value, Cash and restricted cash | 28,080 | 21,922 | ||
Significant Other Observable Inputs Level 2 [Member] | Fair Value [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Fair Value, Investment in joint venture | 1,779 | |||
Significant Unobservable Inputs Level 3 [Member] | Fair Value [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Fair Value, Loans, net | 97,913 | 115,477 | ||
Fair Value, Investment in joint venture | 882 | 884 | ||
Fair Value, Accrued interest receivable | 507 | 798 | ||
Fair Value, Term-debt | 31,489 | 43,832 | ||
Fair Value, Line of credit | 2,000 | |||
Fair Value, Other Secured borrowings | 18 | |||
Fair Value, Investor notes payable | 76,871 | 78,262 | ||
Fair Value, Other financial liabilities | $ 455 | $ 513 |
Fair Value Measurements (Sche_2
Fair Value Measurements (Schedule of Fair Value Measured on a Nonrecurring Basis) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Foreclosed assets (net of allowance) | $ 301 | $ 301 |
Fair Value Measured On A Nonrecurring Basis [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Collateral-dependent loans (net of allowance and discount) | 8,981 | 5,815 |
Investment in joint venture | 882 | 884 |
Foreclosed assets (net of allowance) | 301 | 301 |
Total | 10,164 | 7,000 |
Fair Value Measured On A Nonrecurring Basis [Member] | Significant Unobservable Inputs Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Collateral-dependent loans (net of allowance and discount) | 8,981 | 5,815 |
Investment in joint venture | 882 | 884 |
Foreclosed assets (net of allowance) | 301 | 301 |
Total | $ 10,164 | $ 7,000 |
Fair Value Measurements (Sche_3
Fair Value Measurements (Schedule of Valuation Methodologies Used to Measure the Fair Value Adjustments for Level 3 Assets Recorded at Fair Value on a Nonrecurring Basis) (Details) $ in Thousands | Dec. 31, 2021USD ($)item | Dec. 31, 2020USD ($)item | Dec. 31, 2015USD ($) |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Investments in joint venture | $ | $ 882 | $ 884 | $ 900 |
Foreclosed assets | $ | 301 | 301 | |
Significant Unobservable Inputs Level 3 [Member] | Impaired Loans [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Impaired Loans | $ | 8,981 | 5,815 | |
Significant Unobservable Inputs Level 3 [Member] | Joint Venture [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Investments in joint venture | $ | $ 882 | $ 884 | |
Investment in joint venture, measurement input | 0 | 0 | |
Significant Unobservable Inputs Level 3 [Member] | Foreclosed Assets [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Foreclosed assets | $ | $ 301 | $ 301 | |
Foreclosed assets. measurement input | 0.06 | 0.06 | |
Minimum [Member] | Significant Unobservable Inputs Level 3 [Member] | Impaired Loans [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Impaired Loans Unobservable Input | 0.11 | 0.21 | |
Maximum [Member] | Significant Unobservable Inputs Level 3 [Member] | Impaired Loans [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Impaired Loans Unobservable Input | 0.81 | 0.81 | |
Weighted Average [Member] | Significant Unobservable Inputs Level 3 [Member] | Impaired Loans [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Impaired Loans Unobservable Input | 0.21 | 0.23 | |
Weighted Average [Member] | Significant Unobservable Inputs Level 3 [Member] | Joint Venture [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Investment in joint venture, measurement input | 0 | 0 | |
Weighted Average [Member] | Significant Unobservable Inputs Level 3 [Member] | Foreclosed Assets [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Foreclosed assets. measurement input | 0.06 | 0.06 |
Income Taxes and State LLC Fe_2
Income Taxes and State LLC Fees (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Line Items] | ||
Operating loss carryforward expiration | Dec. 31, 2031 | |
California Franchise Tax Board [Member] | ||
Income Tax Disclosure [Line Items] | ||
Gross receipt fee based on turnover | $ 12,000 | |
California Franchise Tax Board [Member] | Minimum [Member] | ||
Income Tax Disclosure [Line Items] | ||
State minimum franchise tax | 800 | |
MP Securities [Member] | California Franchise Tax Board [Member] | ||
Income Tax Disclosure [Line Items] | ||
Gross receipt fee based on turnover | 6,000 | |
MP Securities [Member] | California Franchise Tax Board [Member] | Minimum [Member] | ||
Income Tax Disclosure [Line Items] | ||
State minimum franchise tax | 800 | |
MP Realty [Member] | ||
Income Tax Disclosure [Line Items] | ||
Operating loss carryforwards | $ 431,000 | $ 430,000 |
Valuation allowance, percentage | 100.00% | 100.00% |
MP Realty [Member] | California Franchise Tax Board [Member] | ||
Income Tax Disclosure [Line Items] | ||
Gross receipt fee based on turnover | $ 800 | $ 800 |
Segment Information (Narrative)
Segment Information (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2021segment | |
Segment Information [Abstract] | |
Number of segments | 2 |
Segment Information (Schedule o
Segment Information (Schedule of Financial Information by Reportable Segments) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Total non-interest expense and provision for tax | $ 4,941 | $ 5,029 |
Net profit | 1,850 | 2,116 |
Total assets | 127,965 | 143,093 |
External Sources [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 10,641 | 11,788 |
Adjustments/Eliminations [Member] | ||
Segment Reporting Information [Line Items] | ||
Total non-interest expense and provision for tax | (217) | (150) |
Net profit | (133) | 45 |
Total assets | (293) | (80) |
Adjustments/Eliminations [Member] | Internal Sources [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | (1,437) | (1,216) |
Finance Company [Member] | Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Total non-interest expense and provision for tax | 3,605 | 3,789 |
Net profit | 1,108 | 1,477 |
Total assets | 123,753 | 139,410 |
Finance Company [Member] | Operating Segments [Member] | External Sources [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 9,651 | 11,019 |
Broker Dealer [Member] | Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Total non-interest expense and provision for tax | 1,334 | 1,238 |
Net profit | 900 | 530 |
Total assets | 3,946 | 3,187 |
Broker Dealer [Member] | Operating Segments [Member] | External Sources [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 990 | 769 |
Broker Dealer [Member] | Operating Segments [Member] | Internal Sources [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 1,244 | 1,000 |
Other Segments [Member] | Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Total non-interest expense and provision for tax | 219 | 152 |
Net profit | (25) | 64 |
Total assets | 559 | 576 |
Other Segments [Member] | Operating Segments [Member] | Internal Sources [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | $ 193 | $ 216 |
Condensed Financial Statement_3
Condensed Financial Statements of Parent Company (Schedule of Parent Company Balance Sheets) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Assets: | |||
Cash and cash equivalents | $ 28,080 | $ 21,922 | |
Certificates of deposit | 1,761 | ||
Loans receivable, net of allowance for loan losses | 97,243 | 116,121 | |
Other assets | 541 | 889 | |
Total assets | 127,965 | 143,093 | |
Liabilities: | |||
Notes payable, net of debt issuance costs | 76,732 | 76,194 | |
Other liabilities | 1,704 | 2,163 | |
Total liabilities | 113,454 | 130,185 | |
Equity | 14,511 | 12,908 | $ 9,531 |
Total liabilities and members' equity | 127,965 | 143,093 | |
Ministry [Member] | |||
Assets: | |||
Cash and cash equivalents | 24,030 | 18,408 | |
Certificates of deposit | 1,761 | ||
Loans receivable, net of allowance for loan losses | 97,243 | 116,121 | |
Investments in subsidiaries | 2,645 | 1,903 | |
Other assets | 3,045 | 3,699 | |
Total assets | 126,963 | 141,892 | |
Liabilities: | |||
Other borrowings | 34,766 | 51,405 | |
Notes payable, net of debt issuance costs | 76,025 | 75,644 | |
Other liabilities | 1,661 | 1,935 | |
Total liabilities | 112,452 | 128,984 | |
Equity | 14,511 | 12,908 | |
Total liabilities and members' equity | $ 126,963 | $ 141,892 |
Condensed Financial Statement_4
Condensed Financial Statements of Parent Company (Schedule of Parent Company Statements of Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income: | ||
Interest Income | $ 7,041 | $ 8,343 |
Other income | 3,600 | 3,445 |
Interest expense: | ||
Term debt | 1,007 | 1,639 |
Notes payable | 2,721 | 2,816 |
Total interest expense | 3,728 | 4,455 |
Provision for loan losses | 122 | 188 |
Other operating expenses | 98 | 84 |
Income before provision for income taxes and state LLC fees | 1,870 | 2,136 |
Provision for income taxes and state LLC fees | 20 | 20 |
Net income | 1,850 | 2,116 |
Ministry [Member] | ||
Income: | ||
Interest Income | 7,040 | 8,335 |
Other income | 2,566 | 2,683 |
Total income | 9,606 | 11,018 |
Interest expense: | ||
Term debt | 1,007 | 1,638 |
Notes payable | 3,808 | 3,926 |
Total interest expense | 4,815 | 5,564 |
Provision for loan losses | 122 | 188 |
Other operating expenses | 3,548 | 3,776 |
Income before provision for income taxes and state LLC fees | 1,121 | 1,490 |
Provision for income taxes and state LLC fees | 13 | 13 |
Income before equity in undistributed net income of subsidiaries | 1,108 | 1,477 |
Equity in undistributed net income of subsidiaries | 742 | 639 |
Net income | $ 1,850 | $ 2,116 |
Condensed Financial Statement_5
Condensed Financial Statements of Parent Company (Schedule of Parent Company Statements of Cash Flows) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 1,850 | $ 2,116 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 48 | 52 |
Amortization of deferred loan fees | (231) | (257) |
Amortization of debt issuance costs | 64 | 97 |
Provision for loan losses | 122 | 188 |
Accretion of loan discount | (26) | (31) |
Gain on sale of loans | (64) | (69) |
Gain on sale of foreclosed assets | (44) | |
Loss on sale of fixed assets | 8 | |
Gain on debt extinguishment | (2,398) | (2,400) |
Changes in: | ||
Other assets | 407 | 161 |
Other liabilities | (461) | (12) |
Net cash used by operating activities | (501) | (264) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Loan purchases | (842) | |
Loan originations | (14,319) | (19,449) |
Loan sales | 14,053 | 19,827 |
Loan principal collections | 20,104 | 12,413 |
Redemption (purchase) of certificates of deposit | 1,761 | (1,761) |
Sale of foreclosed assets | 44 | |
Sale of property and equipment | 24 | |
Purchase of property and equipment | (1) | (87) |
Net cash provided by investing activities | 20,800 | 10,967 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Change in term-debt | (16,369) | (17,622) |
Borrowings, net of repayments on lines of credit | 2,000 | |
Net change in notes payable | 593 | 3,126 |
Debt issuance costs | (119) | (75) |
Dividends paid on preferred units | (245) | (315) |
Net cash used by financing activities | (14,123) | (14,775) |
Net increase (decrease) in cash and restricted cash | 6,176 | (4,072) |
Cash, cash equivalents, and restricted cash at beginning of period | 21,973 | 26,045 |
Cash, cash equivalents, and restricted cash at end of period | 28,149 | 21,973 |
Supplemental disclosures of cash flow information | ||
Interest paid | 3,788 | 4,409 |
Income taxes paid | 20 | 15 |
Dividends declared to preferred unit holders | 203 | 201 |
Ministry [Member] | ||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | 1,850 | 2,116 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Equity in undistributed net income of subsidiaries | (742) | (639) |
Depreciation | 47 | 50 |
Amortization of deferred loan fees | (231) | (257) |
Amortization of debt issuance costs | 616 | 97 |
Provision for loan losses | 122 | 188 |
Accretion of loan discount | (27) | (31) |
Gain on sale of loans | (64) | (69) |
Gain on sale of foreclosed assets | (44) | |
Loss on sale of fixed assets | 8 | |
Gain on debt extinguishment | (2,287) | (2,400) |
Changes in: | ||
Other assets | 689 | 190 |
Other liabilities | (275) | (223) |
Net cash used by operating activities | (346) | (970) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Loan purchases | (842) | |
Loan originations | (14,319) | (19,449) |
Loan sales | 14,053 | 19,827 |
Loan principal collections | 20,105 | 12,413 |
Redemption (purchase) of certificates of deposit | 1,761 | (1,761) |
Foreclosed property sales | 44 | |
Sale of property and equipment | 24 | |
Purchase of property and equipment | (1) | (88) |
Net cash provided by investing activities | 20,801 | 10,966 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Change in term-debt | (16,353) | (17,621) |
Borrowings, net of repayments on lines of credit | 2,000 | |
Net change in notes payable | 593 | 3,126 |
Debt issuance costs | (828) | (75) |
Dividends paid on preferred units | (245) | (315) |
Net cash used by financing activities | (14,833) | (14,885) |
Net increase (decrease) in cash and restricted cash | 5,622 | (4,889) |
Cash, cash equivalents, and restricted cash at beginning of period | 18,408 | 23,297 |
Cash, cash equivalents, and restricted cash at end of period | 24,030 | 18,408 |
Supplemental disclosures of cash flow information | ||
Interest paid | 3,788 | 4,409 |
Income taxes paid | 20 | 15 |
Dividends declared to preferred unit holders | $ 203 | $ 201 |
Subsequent Events (Narrative) (
Subsequent Events (Narrative) (Details) - USD ($) $ in Thousands | Jan. 06, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Subsequent Event [Line Items] | |||
Gain on debt extinguishment | $ 2,398 | $ 2,400 | |
Prepayment of long-term debt | $ 16,369 | $ 17,622 | |
Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Gain on debt extinguishment | $ 1,500 | ||
Prepayment of long-term debt | 16,500 | ||
Quartely cash prepayments for reduction of principal amount | $ 3,300 |