Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | 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, 2022 | |
Document Fiscal Year Focus | 2022 | |
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, 2022 | Dec. 31, 2021 |
Assets: | ||
Cash and cash equivalents | $ 9,504 | $ 28,080 |
Restricted cash | 60 | 69 |
Certificates of deposit | 1,250 | |
Loans receivable, net of allowance for loan losses of $1,551 and $1,638 as of December 31, 2022 and 2021, respectively | 85,076 | 97,243 |
Accrued interest receivable | 477 | 507 |
Investments in joint venture | 870 | 882 |
Other investments | 1,018 | |
Property and equipment, net | 140 | 172 |
Foreclosed assets, net | 301 | 301 |
Servicing assets | 123 | 170 |
Other assets | 544 | 541 |
Total assets | 99,363 | 127,965 |
Liabilities: | ||
Lines of credit | 3,000 | 2,000 |
Term-debt | 32,749 | |
Other secured borrowings | 7 | 17 |
Notes payable, net of debt issuance costs of $58 and $88 as of December 31, 2022 and 2021, respectively | 79,100 | 76,732 |
Accrued interest payable | 281 | 252 |
Other liabilities | 2,349 | 1,704 |
Total liabilities | 84,737 | 113,454 |
Members' Equity: | ||
Series A preferred units, 1,000,000 units authorized, 117,100 units issued and outstanding at December 31, 2022 and 2021 (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, 2022 and 2021; See Note 14 | 1,509 | 1,509 |
Accumulated earnings | 1,402 | 1,287 |
Total members' equity | 14,626 | 14,511 |
Total liabilities and members' equity | $ 99,363 | $ 127,965 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Consolidated Balance Sheets [Abstract] | ||
Loans receivable, allowance for loan losses | $ 1,551 | $ 1,638 |
Notes payable, debt issuance costs | $ 58 | $ 88 |
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, 2022 | Dec. 31, 2021 | |
Interest income: | ||
Interest on loans | $ 5,706 | $ 6,998 |
Interest on interest-bearing accounts | 129 | 43 |
Total interest income | 5,835 | 7,041 |
Interest expense: | ||
Other debt | 387 | 1,007 |
Notes payable | 2,982 | 2,721 |
Total interest expense | 3,369 | 3,728 |
Net interest income | 2,466 | 3,313 |
Provision (credit) for loan losses | (296) | 122 |
Net interest income after provision (credit) for loan losses | 2,762 | 3,191 |
Non-interest income: | ||
Broker-dealer commissions and fees | 838 | 878 |
Other income | 217 | 324 |
Gain on debt extinguishment | 2,537 | 2,398 |
Total non-interest income | 3,592 | 3,600 |
Non-interest expenses: | ||
Salaries and benefits | 3,504 | 2,778 |
Marketing and promotion | 174 | 214 |
Office occupancy | 178 | 178 |
Office operations and other expenses | 1,491 | 1,315 |
Foreclosed assets, net | 10 | 22 |
Legal and accounting | 350 | 414 |
Total non-interest expenses | 5,707 | 4,921 |
Income before provision for income taxes and state LLC fees | 647 | 1,870 |
Provision for income taxes and state LLC fees | 20 | 20 |
Net income | $ 627 | $ 1,850 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) $ in Thousands | Preferred Series A Units | Common Series A Units | Retained Earnings [Member] | Total |
Beginning balance at Dec. 31, 2020 | $ 11,715 | $ 1,509 | $ (316) | $ 12,908 |
Beginning 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 | ||
Net income | 627 | 627 | ||
Dividends on preferred units | (512) | (512) | ||
Ending balance at Dec. 31, 2022 | $ 11,715 | $ 1,509 | $ 1,402 | $ 14,626 |
Ending balance, shares at Dec. 31, 2022 | 117,100 | 146,522 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 627 | $ 1,850 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 44 | 48 |
Amortization of deferred loan fees, net | (127) | (231) |
Amortization of debt issuance costs | 100 | 64 |
Provision (credit) for loan losses | (296) | 122 |
Accretion of loan discount | (20) | (26) |
Gain on sale of loans | (13) | (64) |
Gain on sale of foreclosed assets | (44) | |
Gain on debt extinguishment | (2,537) | (2,398) |
Gain on other investments | (18) | |
Changes in: | ||
Accrued interest receivable | 30 | 292 |
Other assets | 75 | 407 |
Accrued interest payable | 28 | (60) |
Other liabilities | 667 | (461) |
Net cash used by operating activities | (1,440) | (501) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Loan purchases | (2,760) | (842) |
Loan originations | (4,267) | (14,319) |
Loan sales | 3,716 | 14,053 |
Loan principal collections | 15,915 | 20,104 |
Purchase of other investments | (1,000) | |
Redemption (purchase) of certificates of deposit | (1,250) | 1,761 |
Sale of foreclosed assets | 44 | |
Purchase of property and equipment | (12) | (1) |
Net cash provided by investing activities | 10,342 | 20,800 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repayment of term debt | (30,212) | (16,369) |
Borrowings, net of repayments on lines of credit | 1,000 | 2,000 |
Borrowings, net of repayments on secured borrowings | (10) | 17 |
Net change in notes payable | 2,338 | 593 |
Debt issuance costs | (70) | (119) |
Dividends paid on preferred units | (533) | (245) |
Net cash used by financing activities | (27,487) | (14,123) |
Net increase (decrease) in cash and restricted cash | (18,585) | 6,176 |
Cash, cash equivalents, and restricted cash at beginning of period | 28,149 | 21,973 |
Cash, cash equivalents, and restricted cash at end of period | 9,564 | 28,149 |
Supplemental disclosures of cash flow information | ||
Interest paid | 3,341 | 3,788 |
Income taxes paid | 20 | 20 |
Leased assets obtained in exchange of new operating lease liabilities | 106 | |
Lease liabilities recorded | 101 | |
Dividends declared to preferred unit holders | $ 182 | $ 203 |
Nature of Business and Summary
Nature of Business and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Nature of Business and Summary of Significant Accounting Policies [Abstract] | |
Nature of Business and Summary of Significant Accounting Policies | MINISTRY PARTNERS INVESTMENT COMPANY, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1. Nature of Business and Summary of Significant Accounting Policies Nature of Business Throughout 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 ”); and ● Ministry 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 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 The 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 Effective 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 COVID 19, a global pandemic, adversely impacted the broad economy, affecting most industries, including businesses, schools, hospitality-, and travel-based employers, and disrupted the supply and distribution networks that deliver products to the consuming public. The process of recovery from the pandemic by U.S. churches, ministries, and faith-based organizations that the Company serves could have a material financial impact on the Company. If declining in-person attendance at churches and faith-based organizations continues as churches and ministries adjust to the long-term effects of the pandemic, charitable gifts and contributions made to ministries and churches could be adversely affected. In accordance with 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 not restructured a loan under the COVID 19 Deferral Assistance Program since the year ended December 31, 2021 and does not expect to use the program in the future. In addition, Russia’s invasion of Ukraine, increasing inflation, and the disruption of global supply chains are putting strain on the U.S economy and the U.S. consumer. While it is not possible to know the full extent of the long-term impact of COVID 19 or these other current events, the Company is disclosing potentially material factors that could impact our business of which it is aware. Cash and Cash Equivalents Cash 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, 2022 and December 31, 2021. The National Credit Union Share 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 CRD ACCU Certificates of Deposit Certificates of deposit include investments in certificates of deposit held at financial institutions that carry original maturities of greater than three months. The Company had $1.3 million in certificates with terms greater than three months as of December 31, 2022. The Company had no certificates of deposit with original maturities of greater than three months at December 31, 2021. Use of Estimates The Company’s creation of consolidated financial statements that conform to United States Generally Accepted Accounting Principles (" GAAP Investments in Joint Venture In 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, 2022. Other Investments In June 2022, MP Securities purchased two ten-year fixed annuities from insurance companies. These annuities each carry unique features, including guaranteed fixed income components, variable income components, premium bonuses, and potential withdrawal charges. The Company carries these investments at cost and adjusts for guaranteed income when such income is realized. The principal balances of these annuities are guaranteed but are not insured; however, management determined that the annuities were not impaired at December 31, 2022 and does not anticipate losses. Loans Receivable The 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 The 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 can arise from interest accrued and unpaid which the Company adds to loan principal balances when it restructures 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 include 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 The 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 – commercial loans. Management has segregated the loan portfolio into the following portfolio classes: Loan Class Class Description Wholly-Owned First Collateral Position Wholly-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 Position Wholly-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 Position Participated 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 Position Participated 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 Evaluation Management 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; and ● the 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 Impaired 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 Restructurings A 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. The “Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus” was issued by banking regulators on March 22, 2020. This guidance encourages financial institutions to work prudently with borrowers who are or may be unable to meet their contractual payment obligations due to the effects of COVID-19. Additionally, Section 4013 of the CARES Act further provided that loans modified due to the impact of COVID-19 that would otherwise be classified as TDRs under GAAP are not required to be so classified. Modifications within the scope of this relief were in effect from the period beginning March 1, 2020 until January 1, 2022. In accordance with this guidance, we offered modifications to borrowers who were both impacted by COVID-19 and current on all principal and interest payments. As of December 31, 2022, the Company had no loans classified as non-TDR loan modifications due to COVID-19. Loan Charge-offs Management 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 The 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 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 The Company recognizes two primary types of revenue: interest income and non-interest income. Interest Income The 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 Non-interest Income Non-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 fees Generally, 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 fees Investment 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 fees Lending 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 receivable From 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 extinguishment Gains 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 assets The 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 income Other 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. Other non-interest income also includes realized income and gains on other investments. Foreclosed Assets Management 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 Management 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 |
Pledged Cash and Restricted Cas
Pledged Cash and Restricted Cash | 12 Months Ended |
Dec. 31, 2022 | |
Pledged Cash and Restricted Cash [Abstract] | |
Pledged Cash and Restricted Cash | Note 2. Pledged Cash and Restricted Cash Under the terms of its debt agreements, the Company has the ability to pledge cash as collateral for its borrowings. At December 31, 2022 and December 31, 2021, the Company did not pledge cash for its term-debt or lines of credit. At December 31, 2022 and December 31, 2021, the Company had $7 thousand and $17 thousand, respectively, 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, 2022 2021 Cash and cash equivalents $ 9,504 $ 28,080 Restricted cash 60 69 Total cash, cash equivalents, and restricted cash shown in the statements of cash flows $ 9,564 $ 28,149 Other amounts included in restricted cash represent those required to be set aside with the Central Registration Depository (“ CRD |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 3. Related Party Transactions Transactions with Equity Owners Transactions with AdelFi Credit Union (“AdelFi”) The tables below summarize transactions the Company conducts with AdelFi (formerly Evangelical Christian Credit Union), the Company’s largest equity owner. Related party balances pertaining to the assets of the Company (dollars in thousands): December 31, December 31, 2022 2021 Total funds held on deposit at AdelFi $ 443 $ 3,797 Loan participations purchased from and serviced by AdelFi 68 256 Related party transactions of the Company (dollars in thousands): Years ended December 31, 2022 2021 Interest earned on funds held with AdelFi $ 1 $ 2 Interest income earned on loans purchased from AdelFi 5 15 Fees paid to AdelFi from MP Securities Networking Agreement 9 8 Income from Successor Servicing Agreement with AdelFi — 9 Rent expense on lease agreement with AdelFi 146 146 Loan participation interests purchased: In the past, the Company purchased loan participation interests from AdelFi. 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 AdelFi during the years ended December 31, 2022 and 2021. Loans sold: From time to time, the Company may sell loans to AdelFi. The Company sold no loans to AdelFi during the years ended December 31, 2022 and 2021. Lease and Services Agreement: The Company leases its corporate offices and purchases other facility-related services from AdelFi 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 AdelFi: MP Securities, the Company’s wholly-owned subsidiary, has entered into a Networking Agreement with AdelFi pursuant to which MP Securities agreed to offer investment and insurance products and services to AdelFi’s members that: (1) AdelFi 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 AdelFi a percentage of total revenue received by MP Securities from transactions conducted for or on behalf of AdelFi members. Either AdelFi or MP Securities may terminate the Networking Agreement without cause upon thirty days prior written notice. Successor Servicing Agreement with AdelFi: On October 5, 2016, the Company entered into a Successor Servicing Agreement with AdelFi. This agreement obligates the Company to serve as the successor loan servicing agent for certain mortgage loans designated by AdelFi. The Company will service these loans in the event AdelFi 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 AdelFi 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, 2022 2021 Total funds held on deposit at ACCU $ 246 $ 4,083 Dollar amount of outstanding loan participations sold to ACCU and serviced by the Company 964 1,830 Amount owed on ACCU secured borrowings 7 17 Amount owed on ACCU line of credit 3,000 2,000 Loans pledged on ACCU line of credit 6,823 6,768 Related party transactions of the Company (dollars in thousands): Years ended December 31, 2022 2021 Interest earned on funds held with ACCU $ 8 $ 21 Loans sold to ACCU — 1,000 Dollar amount of secured borrowings made from ACCU 7 17 Dollar amount of draws on ACCU line of credit 3,000 2,000 Interest expense on ACCU borrowings 100 22 Income from broker services provided to ACCU by MPS 39 46 Fees paid based on MP Securities Networking Agreement with ACCU 94 84 Loan 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, 2022 and 2021. 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 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, 2022 and December 31, 2021, respectively, $7 thousand and $17 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 equal amounts of cash in an account at ACCU as collateral for these borrowings. These funds are considered restricted cash. 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 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. Related party balances pertaining to the assets of the Company (dollars in thousands): December 31, December 31, 2022 2021 Total funds held on deposit at KCT $ 1,261 $ 1,018 Loans pledged on KCT line of credit 10,962 8,492 Outstanding loan participations sold to KCT and serviced by the Company 3,455 4,598 Related party transactions of the Company (dollars in thousands): Years ended December 31, 2022 2021 Interest earned on funds held with KCT $ 10 $ 18 Loans sold to KCT 56 2,847 Dollar amount of draws on KCT line of credit 2,000 3,825 Interest expense on KCT line of credit 15 40 Fees paid based on MP Securities Networking Agreement with KCT 69 35 Funds on deposit with KCT: On January 13, 2020, the Company purchased $1.0 million of certificates of deposit from KCT. The certificates matured on October 13, 2021, and the funds were transferred to a savings account at KCT. On September 29, 2022, the Company purchased a $1.3 million certificate of deposit from KCT. The certificate matures on June 6, 2023 and carries an interest rate of 3.25%. This certificate is pledged as a compensating balance deposit on one of the lines of credit the Company holds with KCT. Line of Credit: On June 6, 2022, the Company terminated the existing $7.0 million Loan and Security Agreement with KCT Credit Union, an Illinois state chartered financial institution. It replaced this agreement with two short-term demand credit facilities, a $5.0 million warehouse line of credit (“ KCT Warehouse LOC”) KCT Operating LOC 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. As of December 31, 2022 and December 31, 2021, respectively, the Company serviced $3.5 million and $4.6 million in loan participations that it has sold to KCT. Transactions with Other Equity Owners From 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, 2022 2021 Outstanding loan participations sold to UFCU and serviced by the Company $ — $ 4,275 Outstanding loan participations sold to NFCU and serviced by the Company 4,872 4,991 Outstanding notes payable to officers and managers 2,266 261 Loan Participations Sold: The Company had a Loan Participation Agreement with UNIFY Financial Credit Union (“ UFCU The Company has also entered into a Loan Participation Agreement with Navy Federal Credit Union (“ NFCU From time to time, the Company may purchase a loan participation interest from a related party. The Company and its related party will negotiate in good faith the terms and conditions of such a purchase and in accordance with the Company’s related party procedures and governance practices. Each party must approve such a purchase after full disclosure of the related party transaction and must include terms and conditions that would normally be included in arm’s length transactions conducted by independent parties. 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 $2.3 million and $261 thousand at December 31, 2022 and December 31, 2021. Transactions with Subsidiaries The 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 Policy The 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, 2022 | |
Loans Receivable and Allowance for Loan Losses [Abstract] | |
Loans Receivable and Allowance for Loan Losses | Note 4. Loans Receivable and Allowance for Loan Losses The Company’s loan portfolio is comprised of one segment – commercial 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 primarily makes or purchases participations in loans that are made to evangelical churches and related organizations. The purpose of these loans is to purchase, construct, or improve facilities. Occasionally the company purchases conventional commercial loans to meet the Company’s liquidity and yield goals as well as to diversify the Company’s loan portfolio. Loan maturities extend through 2037. The loan portfolio had a weighted average rate of 6.46% and 6.21% as of December 31, 2022 and December 31, 2021, respectively. Loans receivable at December 31, 2022 and December 31, 2021, respectively include $7 thousand and $17 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, 2022 2021 Commercial loans: Real estate secured $ 86,718 $ 98,858 Other secured 225 425 Unsecured 99 122 Total loans 87,042 99,405 Deferred loan fees, net (208) (304) Loan discount (207) (220) Allowance for loan losses (1,551) (1,638) Loans, net $ 85,076 $ 97,243 Allowance for Loan Losses Management believes it has properly calculated the allowance for loan losses as of December 31, 2022 and December 31, 2021. The following table shows the changes in the allowance for loan losses for the years ended years ended December 31, 2022 and 2021 (dollars in thousands): December 31, December 31, 2022 2021 Balance, beginning of period $ 1,638 $ 1,516 Provision (credit) for loan loss (296) 122 Chargeoffs — — Recoveries 209 — Balance, end of period $ 1,551 $ 1,638 The table below presents loans by portfolio segment (commercial 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 Allowance for Loan Losses (by segment) As of December 31, December 31, 2022 2021 Loans: Individually evaluated for impairment $ 5,933 $ 9,688 Collectively evaluated for impairment 81,109 89,717 Balance $ 87,042 $ 99,405 Allowance for loan losses: Individually evaluated for impairment $ 597 $ 290 Collectively evaluated for impairment 954 1,348 Balance $ 1,551 $ 1,638 The 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, 2022 Wholly-Owned First Wholly-Owned Junior Participation First Participation Junior Total Grade: Pass $ 46,155 $ 1,742 $ 1,035 $ — $ 48,932 Watch 32,080 29 68 — 32,177 Special mention — — — — — Substandard 3,840 1,590 — — 5,430 Doubtful 503 — — — 503 Loss — — — — — Total $ 82,578 $ 3,361 $ 1,103 $ — $ 87,042 Credit Quality Indicators (by class) As of December 31, 2021 Wholly-Owned First Wholly-Owned Junior Participation First Participation Junior Total Grade: Pass $ 67,580 $ 2,007 $ 172 $ — $ 69,759 Watch 19,858 30 70 — 19,958 Special mention — — — — — Substandard 7,535 1,650 — — 9,185 Doubtful 503 — — — 503 Loss — — — — — Total $ 95,476 $ 3,687 $ 242 $ — $ 99,405 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, 2022 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 Commercial loans: Wholly-Owned First $ 6,068 $ — $ 1,378 $ 7,446 $ 75,132 $ 82,578 $ — Wholly-Owned Junior — — — — 3,361 3,361 — Participation First — — — — 1,103 1,103 — Participation Junior — — — — — — — Total $ 6,068 $ — $ 1,378 $ 7,446 $ 79,596 $ 87,042 $ — 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 Commercial 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 $ — Impaired Loans The following tables are summaries of impaired loans by loan class as of and for the years ended years ended December 31, 2022 and 2021, 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) For the years ended December 31, December 31, 2022 2021 Wholly-Owned First Average Recorded Investment $ 14,644 $ 10,772 Interest Income Recognized 1,026 582 Wholly-Owned Junior Average Recorded Investment 1,620 1,668 Interest Income Recognized — — Participation First Average Recorded Investment — — Interest Income Recognized — — Participation Junior Average Recorded Investment — — Interest Income Recognized — — Total Impaired Loans Average Recorded Investment $ 16,264 $ 11,310 Interest Income Recognized 1,026 582 Impaired Loans (by class) As of As of December 31, December 31, 2022 2021 Wholly-Owned First Recorded Investment with allowance $ 3,008 $ 1,371 Recorded Investment with no Allowance 15,569 9,339 Total Recorded Investment $ 18,577 $ 10,710 Related Allowance on Impaired Loans with Allowance 457 631 Unpaid Principal Balance $ 18,734 $ 10,905 Wholly-Owned Junior Recorded Investment with allowance $ 1,590 $ — Recorded Investment with no Allowance — 1,650 Total Recorded Investment $ 1,590 $ 1,650 Related Allowance on Impaired Loans with Allowance 139 — Unpaid Principal Balance $ 1,685 $ 1,685 Participation First Recorded Investment with allowance $ — $ — Recorded Investment with no Allowance — — Total Recorded Investment $ — $ — Related Allowance on Impaired Loans with Allowance — — Unpaid Principal Balance $ — $ — Participation Junior Recorded Investment with allowance $ — $ — Recorded Investment with no Allowance — — Total Recorded Investment $ — $ — Related Allowance on Impaired Loans with Allowance — — Unpaid Principal Balance $ — $ — Total Impaired Loans Recorded Investment with allowance $ 4,598 $ 1,371 Recorded Investment with no Allowance 15,569 10,989 Total Recorded Investment $ 20,167 $ 12,360 Related Allowance on Impaired Loans with Allowance 596 631 Unpaid Principal Balance $ 20,419 $ 12,590 A summary of non-accrual loans by loan class is as follows (dollars in thousands): Loans on Non-accrual Status (by class) December 31, 2022 December 31, 2021 Commercial loans: Wholly-Owned First $ 4,342 $ 6,162 Wholly-Owned Junior 1,590 1,650 Participation First — — Participation Junior — — Total $ 5,932 $ 7,812 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 met the qualifications under Section 4013 of the CARES Act, and, as a result, the Company elected not to account for these modifications as troubled debt restructurings. 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. The Company did not restructure any loans that qualified as CARES Act modifications during the year ended December 31, 2022. The Company restructured four loans during the year ended December 31, 2022. The Company restructured A summary of troubled debt restructures by loan class during the years ended December 31, 2022 and 2021 is as follows (dollars in thousands): Troubled Debt Restructurings (by class) For the year ended December 31, 2022 Number of Loans Pre- Modification Outstanding Recorded Investment Post- Modification Outstanding Recorded Investment Recorded Investment At Period End Commercial loans: Wholly-Owned First 4 $ 8,385 $ 8,385 $ 8,464 Wholly-Owned Junior — — — — Participation First — — — — Participation Junior — — — — Total 4 $ 8,385 $ 8,385 $ 8,464 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 End Commercial loans: Wholly-Owned First 2 $ 5,387 $ 5,387 $ 5,313 Wholly-Owned Junior — — — — Participation First — — — — Participation Junior — — — — Total 2 $ 5,387 $ 5,387 $ 5,313 Of the four loans the Company restructured in 2022, two were granted extended maturity dates when the borrower’s financial condition could not support a full renewal. of these loans was a construction loan that still had amounts remaining to be drawn. Two months after the restructure, the borrower met the appropriate conditions, and the Company funded the remainder of the approved amount of the construction draws. The Company then renewed and converted the loan to an amortizing commercial real estate loan. The Company had two previously restructured loans that were past maturity as of December 31, 2022. 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. 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, 2022, no additional funds were committed to be advanced in connection with loans modified as troubled debt restructurings. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2022 | |
Investments in Joint Venture [Abstract] | |
Investments | Note 5. Investments Joint Venture In 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 The value of the Company’s investment in the joint venture was $870 thousand and $882 thousand, as of December 31, 2022 and 2021, respectively. Management’s impairment analysis of the investment as of December 31, 2022 has determined that the investment is not impaired. Certificates of Deposit The Company held an investment in a certificate of deposit with an original maturity greater than three months at December 31, 2022. Details of certificates with original maturities of greater than three months owned by the Company as of December 31, 2022, are as follows (dollars in thousands): Certificate Open Date Certificate Amount Interest Rate Maturity Date CD 1 9/29/2022 $ 1,250 3.25% 6/6/2023 The certificate identified above was purchased from KCT and is pledged as a compensating balance under the terms of the KCT Warehouse LOC. See “Note 10: Credit Facilities and Other Debt” for additional terms and conditions of these credit facilities. The Company owned no certificates of deposit with an original maturity greater than three months at December 31, 2021. Other Investments In June 2022, the Company entered into two indexed annuity insurance contracts whereby an insurance company guarantees a fixed rate of return in exchange for holding a deposit from the Company for the contracted period of ten years. The Company recognized $18 thousand in income on these investments during the year ended December 31, 2022. Additional information related to these investments is as follows (dollars in thousands): Income for the year ended Investment Type Maturity Date Original Cost Net Carrying Amount December 31, 2022 December 31, 2021 Fixed annuity June 2032 $ 1,000 $ 1,018 $ 18 $ — |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2022 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | Note 6. Revenue Recognition The 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, 2022 2021 Non-interest income, in scope of ASC 606 Broker-dealer fees and commissions $ 838 $ 878 Gains on loan sales 13 64 Gain on sale of foreclosed assets — 44 Other investment income 18 — Other non-interest income — 9 Non-interest income, out of scope, ASC 606 Lending fees 186 207 Gain on debt extinguishment 2,537 2,398 Total non-interest income $ 3,592 $ 3,600 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 For the twelve months ended (dollars in thousands) December 31, 2022 December 31, 2021 Broker-dealer revenue Securities commissions Transactional $ 109 $ 131 AUM 61 40 Total 170 171 Sale of investment company shares Transactional 22 34 AUM 80 98 Total 102 132 Other insurance product revenue Transactional 179 187 AUM 48 48 Total 227 235 Advisory fee income Transactional 1 3 AUM 338 337 Total 339 340 Total broker-dealer revenue Transactional 311 355 AUM 527 523 Total broker-dealer revenue $ 838 $ 878 |
Loan Transfers and Servicing
Loan Transfers and Servicing | 12 Months Ended |
Dec. 31, 2022 | |
Loan Transfers and Servicing [Abstract] | |
Loan Transfers and Servicing | Note 7. Loan Transfers and Servicing A 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, 2022 2021 Participation loans interests sold by the Company during the year $ 3,716 $ 14,053 Total participation interests sold and serviced by the Company 34,946 46,056 Servicing income 153 189 Servicing Assets Balance, beginning of period $ 170 $ 147 Additions: Servicing obligations from sale of loan participations 19 81 Subtractions: Amortization (66) (58) Balance, end of period $ 123 $ 170 ACCU Loan Participation Agreement As 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 years ended December 31, 2022 and 2021, the Company sold loan participations to ACCU under the provisions of the Master LP Agreement that totaled $7 thousand and $17 thousand, respectively. Due to the recourse provisions of the agreement, the participation sales made under the agreement are classified as secured borrowings and are presented separately on the Company’s balance sheet. |
Foreclosed Assets
Foreclosed Assets | 12 Months Ended |
Dec. 31, 2022 | |
Foreclosed Assets [Abstract] | |
Foreclosed Assets | Note 8: Foreclosed Assets The Company’s investment in foreclosed assets consisted of one property that was valued at $301 thousand at December 31, 2022 and 2021. There was no allowance for losses on foreclosed assets at December 31, 2022 and 2021. The Company did not record any loss provisions on foreclosed assets during the years ended December 31, 2022 and 2021. 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 applicable to foreclosed assets include the following (dollars in thousands): Foreclosed Asset Expenses for the years ended December 31, 2022 2021 Operating expenses 10 22 Total expenses $ 10 $ 22 |
Premises and Equipment
Premises and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Premises and Equipment [Abstract] | |
Premises and Equipment | Note 9. Premises and Equipment The tables below summarize our premises and equipment (dollars in thousands): As of December 31, December 31, 2022 2021 Furniture and office equipment $ 528 $ 522 Computer system 220 214 Leasehold improvements 43 43 Total premises and equipment 791 779 Less accumulated depreciation and amortization (651) (607) Premises and equipment, net $ 140 $ 172 2022 2021 Depreciation and amortization expense for the years ended December 31, $ 44 $ 48 |
Credit Facilities and Other Deb
Credit Facilities and Other Debt | 12 Months Ended |
Dec. 31, 2022 | |
Credit Facilities, Other Debt and Investor Notes Payable [Abstract] | |
Credit Facilities and Other Debt | Note 10. Credit Facilities and Other Debt Details of the Company’s debt facilities as of December 31, 2022 are as follows (dollars in thousands): Nature of Borrowing Interest Rate Interest Rate Type Amount Outstanding Monthly Payment Maturity Date Loan Collateral Pledged Cash Pledged KCT Warehouse LOC 5.250% Variable $ — $ — 6/6/2023 $ 6,160 $ — KCT Operating LOC 5.250% Variable — — 6/6/2023 4,835 — ACCU LOC 4.000% Variable 3,000 — 9/23/2023 6,823 — ACCU Secured Various Fixed 7 — Various — 7 Term-Debt Credit Facility The Company had a secured term-debt credit facility with OSK VII, LLC, an investment fund (“ OSK would have been required to deliver cash or qualifying mortgage loans in an amount sufficient to meet its obligation to maintain a minimum collateralization ratio. The facility’s interest rate was 2.525% . The collateral securing the facility at December 31, 2021 satisfied the On November 4, 2022, the Company paid off the remaining $5.4 million in outstanding principal on the term-debt credit facility. The term-debt credit facility is now terminated and satisfied in whole. The Company negotiated to settle the remaining $5.4 million in principal outstanding at a discount resulting in a gain on debt extinguishment of $437 thousand. Paycheck Protection Program Loan On April 27, 2020, MP Securities applied for and received a Paycheck Protection Program loan (“ PPP Loan “SBA” KCT Lines of Credit On 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. On June 6, 2022, the Company and KCT mutually agreed to terminate this facility and entered into two new facilities. The first facility, the KCT Warehouse LOC, is a $5.0 million short-term demand credit facility with a one-year maturity date ending on June 6, 2023. The KCT Warehouse LOC will automatically renew for another one-year term unless either party furnishes written notice at least 30 days prior to the termination date that it does not intend to renew the agreement. The Company has secured the KCT Warehouse LOC with certain of its mortgage loan investments. The Company may draw funds on the KCT Warehouse LOC at any time until the line is fully drawn. Repayment of each advance is due 120 days after the advance is made or earlier if a collateral loan becomes more than 60 days delinquent, and the Company fails to cure such deficiency. The interest rate on the KCT Warehouse LOC is equal to the prime rate at the time of the draw plus 0.50%. At December 31, 2022, the interest rate on the KCT Warehouse LOC was 5.25%. To secure its obligations under the KCT Warehouse 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 Warehouse LOC. The minimum ratio must equal at least 120%. The KCT Warehouse LOC also requires the Company to maintain a deposit of 25% of the total line limit to borrow on the facility. In September 2022, the Company purchased a $1.25 million certificate of deposit from KCT that satisfies this requirement. A total of $6.2 million in loans were pledged on this facility as of December 31, 2022. At December 31, 2022, there were no outstanding borrowings on the KCT Warehouse LOC. In addition, on June 6, 2022, the Company entered into an Operating Line of Credit Loan and Security Agreement with the KCT, the KCT Operating LOC. The KCT Operating LOC is a $5.0 million short-term demand credit facility with a one-year maturity date ending on June 6, 2023. The KCT Operating LOC will automatically renew for another one-year term unless either party furnishes written notice at least 30 days prior to the termination date that it does not intend to renew the agreement. The Company must secure a minimum of 25% of the line with cash while the remaining portion of the KCT Operating LOC may be secured by certain of its mortgage loan investments. The Company may draw funds on the KCT Operating LOC at any time until the line is fully drawn. Repayment by the termination date or earlier if a collateral loan becomes more than 60 days delinquent, and the Company fails to cure such deficiency. The interest rate on the KCT Warehouse LOC is equal to the prime rate at the time of the draw plus 0.50%. At December 31, 2022, the interest rate on the KCT Warehouse LOC was 5.25%. To secure its obligations under the KCT Operating 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 the outstanding balance of mortgage notes pledged under the facility as compared to the total amount of principal owed less the secured cash on the KCT Operating LOC. The minimum ratio must equal at least 120%. A total of $4.8 million in loans were pledged on this facility as of December 31, 2022. At December 31, 2022, there were no outstanding borrowings on the KCT Operating LOC. The KCT Operating LOC and the KCT Warehouse LOC both contain typical affirmative covenants for a credit facility of this nature, including requiring that the Company maintain the pledged collateral free of liens and encumbrances, timely pay the amounts due under the facility and provide KCT with current financial statements and monthly reports. The Company will also be required to comply with certain financial covenants including maintaining a net worth of at least $5.0 million dollars, ensuring that its net worth is equal to at least 5% of its total liabilities and that it will maintain minimum liquidity that equals or exceeds 120% of the outstanding amount owed under the KCT Operating LOC and the KCT Warehouse LOC at the end of each calendar month. ACCU Line of Credit On September 23, 2021, Ministry Partners Investment Company, LLC, entered into a Loan and Security Agreement with ACCU (“ ACCU LOC th one 30 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 years ended December 31, 2022 and 2021. A total of $6.8 million in loans were pledged on this facility as of December 31, 2022 and December 31, 2021. ACCU Secured Borrowings As 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. $7 thousand and $17 thousand in secured borrowings were outstanding under the Master LP Agreement as of December 31, 2022 and December 31, 2021, respectively. |
Investor Notes Payable
Investor Notes Payable | 12 Months Ended |
Dec. 31, 2022 | |
Credit Facilities, Other Debt and Investor Notes Payable [Abstract] | |
Investor Notes Payable | Note 11. Investor Notes Payable The table below provides information on the Company’s investor notes payable (dollars in thousands): As of As of December 31, 2022 December 31, 2021 SEC Registered Public Offerings Offering Type Amount Weighted Average Interest Rate Amount Weighted Average Interest Rate Class 1 Offering Unsecured $ — — % $ 3,654 4.45 % Class 1A Offering Unsecured 20,698 4.27 % 27,116 4.11 % 2021 Class A Offering Unsecured 45,935 4.04 % 34,524 3.20 % Public Offering Total $ 66,633 4.11 % $ 65,294 3.65 % Private Offerings Subordinated Notes Unsecured $ 12,525 4.56 % $ 11,526 4.47 % Secured Notes Secured — — % — — % Private Offering Total $ 12,525 4.56 % $ 11,526 4.47 % Total Notes Payable $ 79,158 4.19 % $ 76,820 3.77 % Notes Payable Totals by Security Unsecured Total Unsecured $ 79,158 4.19 % $ 76,820 3.77 % Secured Total Secured $ — — % $ — — % Future maturities for the Company’s investor notes during the twelve-month periods ending December 31, are as follows (dollars in thousands): 2023 $ 23,682 2024 17,574 2025 15,211 2026 13,990 2027 8,701 79,158 Debt issuance costs 58 Notes payable, net of debt issuance costs $ 79,100 Debt issuance costs related to the Company’s notes payable were $58 thousand and $88 thousand at December 31, 2022 and December 31, 2021, 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 was in compliance with these covenants as of December 31, 2021. The Company issued the Class 1 Notes under a Trust Indenture between the Company and U.S. Bank. There were no outstanding Class 1 Notes as of December 31, 2022. 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 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 Offerings Series 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 60 seven 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, 2022 and December 31, 2021. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 12. Commitments and Contingencies Unfunded Commitments The 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, 2022 December 31, 2021 Undisbursed loans $ 355 $ 270 Undisbursed 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 Leases The 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 April 2025. There are no options to renew in the lease agreement. The Company also has a lease agreement for a vehicle used by management. The lease for the vehicle terminates in December 2024. The Company has determined that these leases are operating leases. The table below presents information regarding our existing operating leases (dollars in thousands): For the Year Ended 2022 2021 Lease cost Operating lease cost $ 175 $ 174 Other information Cash paid for operating leases $ 185 $ 174 Right-of-use assets obtained in exchange for operating lease liabilities $ 106 $ — Lease liabilities recorded $ 101 $ — Weighted average remaining lease term (in years) 1.46 1.96 Weighted-average discount rate 4.33 % 4.71 % Future minimum lease payments and lease costs for the twelve months ending December 31 are as follows (dollars in thousands): Lease Payments Lease Costs 2023 $ 191 $ 176 2024 36 29 2025 10 10 Total $ 237 $ 215 |
Office Operations and Other Exp
Office Operations and Other Expenses | 12 Months Ended |
Dec. 31, 2022 | |
Office Operations and Other Expenses [Abstract] | |
Office Operations and Other Expenses | Note 13. Office Operations and Other Expenses Office operations and other expenses comprise the following (dollars in thousands): December 31, 2022 December 31, 2021 Technology and communication expenses $ 396 $ 357 Insurance 382 350 Lease and occupancy expense 211 192 Outsourced operations 160 131 Staff and travel expense 109 71 Loan expenses 42 53 Clearing firm fees 60 63 Other 131 98 Total $ 1,491 $ 1,315 |
Preferred and Common Units Unde
Preferred and Common Units Under LLC Structure | 12 Months Ended |
Dec. 31, 2022 | |
Preferred and Common Units Under LLC Structure [Abstract] | |
Preferred And Common Units Under LLC Structure | Note 14. Preferred and Common Units Under LLC Structure Holders of the Series A Preferred Units are entitled to receive a quarterly cash dividend that is 25 one 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, 2022 | |
Retirement Plans [Abstract] | |
Retirement Plans | Note 15. Retirement Plans 401(k) All of the Company’s employees are eligible to participate in the Automated Data Processing, Inc. (“ ADP No 21 Profit Sharing The 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 Supplemental Executive Retirement Plan On March 30, 2022, the Company entered into a Supplemental Executive Retirement Plan (the “ SERP For purposes of the SERP, Mr. Turner’s accrued benefit is subject to a maximum sum of $600,000, with payments made annually in equal monthly installments over a ten-year period. The Company is liable for the entire amount of this benefit unless Mr. Turner incurs a separation of service prior to the vesting date in August 2024. The Company’s management has determined that such a separation is unlikely to occur prior to the vesting date and has accrued the entire benefit as of December 31, 2022. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | Note 16. Fair Value Measurements Fair Value Measurements Using Fair Value Hierarchy The 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, 2022. 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, o quoted prices for identical assets and liabilities in inactive markets, o inputs that are observable for the asset or liability (such as interest rates, prepayment speeds, credit risks, etc.); or o inputs 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 Instruments The 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, 2022 using Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value FINANCIAL ASSETS: Cash and restricted cash $ 9,564 $ 9,564 $ — $ — $ 9,564 Certificates of deposit 1,250 — 1,243 — 1,243 Loans, net 85,076 — — 83,525 83,525 Investments in joint venture 870 — — 870 870 Other investments 1,018 — — 1,018 1,018 Accrued interest receivable 477 — — 477 477 FINANCIAL LIABILITIES: Lines of credit $ 3,000 $ — $ — $ 3,026 $ 3,026 Other secured borrowings 7 — — 7 7 Notes payable 79,100 — — 78,330 78,330 Other financial liabilities 462 — — 462 462 Fair Value Measurements at December 31, 2021 using Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value FINANCIAL ASSETS: Cash and restricted cash $ 28,149 $ 28,149 $ — $ — $ 28,149 Loans, net 97,243 — — 97,913 97,913 Investments in joint venture 882 — — 882 882 Accrued interest receivable 507 — — 507 507 FINANCIAL LIABILITIES: Lines of credit $ 2,000 $ — $ — $ 2,000 $ 2,000 Term-debt 32,749 — — 31,489 31,489 Other secured borrowings 17 — — 18 18 Notes payable 76,732 — — 76,871 76,871 Other financial liabilities 455 — — 455 455 Management 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, 2022 and December 31, 2021. 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 $7 thousand of loan participations transferred under a recourse agreement. ● Investments in joint venture – Management estimates fair value by analyzing the operations and marketability of the underlying investment to determine if the investment is other-than-temporarily impaired. ● Other investments – Management estimates fair value by determining the whether there is an indication of potential lack of performance on the part of the insurance companies in which the investments are made, and whether those indications would impair the investments. ● 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, 2022 and December 31, 2021. Fair Value Measured on a Nonrecurring Basis The 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 Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets at December 31, 2022: Collateral-dependent loans (net of allowance and discount) $ — $ — $ 5,259 $ 5,259 Investments in joint venture — — 870 870 Other investments — — 1,018 1,018 Foreclosed assets (net of allowance) — — 301 301 Total $ — $ — $ 7,448 $ 7,448 Assets at December 31, 2021: Collateral-dependent loans (net of allowance and discount) $ — $ — $ 5,815 $ 5,815 Investments in joint venture — — 884 884 Foreclosed assets (net of allowance) — — 301 301 Total $ — $ — $ 7,000 $ 7,000 The following table presents activity in Level 3 assets for those assets in which there were purchases or sales, or in which assets were transferred between levels. The only assets to have such activity during the year ended December 31, 2022 were other investments (dollars in thousands): Other investments Balance, December 31, 2021 $ -- Purchase of other investments 1,000 Realized income on other investments 18 Balance, December 31, 2022 $ 1,018 Impaired Loans The fair value of collateral-dependent impaired loans with specific allocations of the allowance for loan losses is generally based on recent real estate appraisals. 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 Assets At 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. Other Investments Other investments comprise two indexed annuity insurance contracts. The Company measures fair value on its annuity investments on a nonrecurring basis. On these assets, the Company only makes fair value adjustments when there is evidence of impairment. As the principal amounts and recognized income on the annuities is guaranteed, only impairment of the assets would indicate a degradation in their fair value. The Company concluded that no impairment of the annuity investments existed at December 31, 2022. As such, the Company has determined that the carrying value of its other investments equals its fair value at December 31, 2022. 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, 2022 Assets Fair Value (in thousands) Valuation Techniques Unobservable Input Range (Weighted Average) Impaired loans $ 5,259 Discounted appraised value Selling cost / Estimated market decrease 21% - 81% (28%) Investments in joint venture 870 Internal evaluations Estimated future market value 0% (0%) Other investments 1,018 Internal evaluations Indications of non-performance by insurance companies 0% (0%) Foreclosed assets 301 Internal evaluations Selling cost 6% (6%) December 31, 2021 Assets Fair Value (in thousands) Valuation Techniques Unobservable Input 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, 2022 | |
Income Taxes and State LLC Fees [Abstract] | |
Income Taxes and State LLC Fees | Note 17. Income Taxes and State LLC Fees MPIC 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, 2022 and 2021, and recorded a provision of $800 per year for the state minimum franchise tax. For the years ended December 31, 2022 and 2021, MP Realty has federal and state net operating loss carryforwards of approximately $432 thousand and $422 thousand, respectively, which begin to expire in the year 2032 Tax years ended December 31, 2019 through December 31, 2022 remain subject to examination by the Internal Revenue Service and the tax years ended December 31, 2018 through December 31, 2022 remain subject to examination by the California Franchise Tax Board. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2022 | |
Segment Information [Abstract] | |
Segment Information | Note 18. Segment Information The 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, 2022 and 2021 is as follows (dollars in thousands): Twelve months ended December 31, 2022 December 31, 2021 Revenue from external sources Finance Company $ 8,562 $ 9,651 Broker Dealer 865 990 Adjustments / Eliminations — — Total $ 9,427 $ 10,641 Revenue from internal sources Finance Company $ — $ — Broker Dealer 1,128 1,244 Other Segments 65 193 Adjustments / Eliminations (1,193) (1,437) Total $ — $ — Total non-interest expense and provision for tax Finance Company $ 4,125 $ 3,605 Broker Dealer 1,598 1,334 Other Segments 4 2 Adjustments / Eliminations — — Total $ 5,727 $ 4,941 Net profit Finance Company $ 188 $ 1,108 Broker Dealer 395 900 Other Segments 61 192 Adjustments / Eliminations (17) (350) Total $ 627 $ 1,850 December 31, December 31, 2022 2021 (Unaudited) (Audited) Total assets Finance Company $ 94,523 $ 123,753 Broker Dealer 4,553 3,946 Other Segments 423 559 Adjustments / Eliminations (136) (293) Total $ 99,363 $ 127,965 |
Condensed Financial Statements
Condensed Financial Statements of Parent Company | 12 Months Ended |
Dec. 31, 2022 | |
Condensed Financial Statements of Parent Company [Abstract] | |
Condensed Financial Statements of Parent Company | Note 19. Condensed Financial Statements of Parent Company Financial 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, 2022 2021 Assets: Cash $ 5,875 $ 24,030 Certificates of deposit 1,250 — Loans receivable, net of allowance for loan losses 85,076 97,243 Investment in subsidiaries 3,084 2,645 Other assets 2,922 3,045 Total assets $ 98,207 $ 126,963 Liabilities and members’ equity Liabilities: Other borrowings $ 3,007 $ 34,766 Notes payable, net of debt issuance costs 78,441 76,025 Other liabilities 2,133 1,661 Total liabilities 83,581 112,452 Equity 14,626 14,511 Total liabilities and members' equity $ 98,207 $ 126,963 Ministry Partners Investment Company, LLC Statement of Income For the years ended December 31, 2022 2021 Income: Interest Income $ 5,825 $ 7,040 Other income 2,737 2,566 Total income 8,562 9,606 Interest expense: Other borrowings 387 1,007 Notes payable 4,158 3,808 Total interest expense 4,545 4,815 Provision (credit) for loan losses (296) 122 Other operating expenses 4,112 3,548 Income before provision for income taxes 201 1,121 Provision for income taxes and state LLC fees 13 13 Income before equity in undistributed net income of subsidiaries 188 1,108 Equity in undistributed net income of subsidiaries 439 742 Net income $ 627 $ 1,850 Ministry Partners Investment Company, LLC Statement of Cash Flows For the years ended December 31, 2022 2021 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 627 $ 1,850 Adjustments to reconcile net income to net cash used by operating activities: Equity in undistributed net income of subsidiaries (439) (742) Depreciation 43 47 Amortization of deferred loan fees (127) (231) Amortization of debt issuance costs 651 616 Provision for loan losses (296) 122 Accretion of loan discount (20) (27) Gain on sale of loans (13) (64) Gain on sale of foreclosed assets — (44) Gain on debt extinguishment (2,537) (2,287) Changes in: Other assets 110 689 Other liabilities 493 (275) Net cash (used) by operating activities (1,508) (346) CASH FLOWS FROM INVESTING ACTIVITIES: Loan purchases (2,760) (842) Loan originations (4,267) (14,319) Loan sales 3,716 14,053 Loan principal collections 15,915 20,105 Redemption (purchase) of certificates of deposit (1,250) 1,761 Foreclosed property sales — 44 Purchase of property and equipment (11) (1) Net cash provided by investing activities 11,343 20,801 CASH FLOWS FROM FINANCING ACTIVITIES: Net change in term-debt (30,212) (16,370) Borrowings, net of repayments on lines of credit 1,000 2,000 Net change in secured borrowings (10) 17 Net change in notes payable 2,338 593 Debt issuance costs (573) (828) Dividends paid on preferred units (533) (245) Net cash (used) by financing activities (27,990) (14,833) Net (decrease) increase in cash and restricted cash (18,155) 5,622 Cash, cash equivalents, and restricted cash at beginning of period 24,030 18,408 Cash, cash equivalents, and restricted cash at end of period $ 5,875 $ 24,030 Supplemental disclosures of cash flow information Interest paid $ 3,341 $ 3,788 Income taxes paid 20 20 Leased assets obtained in exchange of new operating lease liabilities 22 — Lease liabilities recorded 17 — Dividends declared to preferred unit holders 182 203 |
Nature of Business and Summar_2
Nature of Business and Summary of Significant Accounting Policies (Policy) | 12 Months Ended |
Dec. 31, 2022 | |
Nature of Business and Summary of Significant Accounting Policies [Abstract] | |
Nature of Business | Nature of Business Throughout 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 ”); and ● Ministry 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 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 Consolidation The 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 LLC Effective 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 Uncertainties COVID 19, a global pandemic, adversely impacted the broad economy, affecting most industries, including businesses, schools, hospitality-, and travel-based employers, and disrupted the supply and distribution networks that deliver products to the consuming public. The process of recovery from the pandemic by U.S. churches, ministries, and faith-based organizations that the Company serves could have a material financial impact on the Company. If declining in-person attendance at churches and faith-based organizations continues as churches and ministries adjust to the long-term effects of the pandemic, charitable gifts and contributions made to ministries and churches could be adversely affected. In accordance with 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 not restructured a loan under the COVID 19 Deferral Assistance Program since the year ended December 31, 2021 and does not expect to use the program in the future. In addition, Russia’s invasion of Ukraine, increasing inflation, and the disruption of global supply chains are putting strain on the U.S economy and the U.S. consumer. While it is not possible to know the full extent of the long-term impact of COVID 19 or these other current events, the Company is disclosing potentially material factors that could impact our business of which it is aware. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash 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, 2022 and December 31, 2021. The National Credit Union Share 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 CRD ACCU |
Certificates of Deposit | Certificates of Deposit Certificates of deposit include investments in certificates of deposit held at financial institutions that carry original maturities of greater than three months. The Company had $1.3 million in certificates with terms greater than three months as of December 31, 2022. The Company had no certificates of deposit with original maturities of greater than three months at December 31, 2021. |
Use of Estimates | Use of Estimates The Company’s creation of consolidated financial statements that conform to United States Generally Accepted Accounting Principles (" GAAP |
Investments in Joint Venture | Investments in Joint Venture In 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, 2022. |
Loans Receivable | Loans Receivable The 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 Receivable The 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 can arise from interest accrued and unpaid which the Company adds to loan principal balances when it restructures 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 include 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 Losses The 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 – commercial loans. Management has segregated the loan portfolio into the following portfolio classes: Loan Class Class Description Wholly-Owned First Collateral Position Wholly-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 Position Wholly-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 Position Participated 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 Position Participated 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 Evaluation Management 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; and ● the 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 Analysis Impaired 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 Restructurings A 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. The “Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus” was issued by banking regulators on March 22, 2020. This guidance encourages financial institutions to work prudently with borrowers who are or may be unable to meet their contractual payment obligations due to the effects of COVID-19. Additionally, Section 4013 of the CARES Act further provided that loans modified due to the impact of COVID-19 that would otherwise be classified as TDRs under GAAP are not required to be so classified. Modifications within the scope of this relief were in effect from the period beginning March 1, 2020 until January 1, 2022. In accordance with this guidance, we offered modifications to borrowers who were both impacted by COVID-19 and current on all principal and interest payments. As of December 31, 2022, the Company had no loans classified as non-TDR loan modifications due to COVID-19. |
Loan Charge-offs | Loan Charge-offs Management 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 Indicators The 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 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 Recognition The Company recognizes two primary types of revenue: interest income and non-interest income. |
Interest Income | Interest Income The 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 |
Non-interest Income | Non-interest Income Non-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 fees Generally, 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 fees Investment 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 fees Lending 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 receivable From 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 extinguishment Gains 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 assets The 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 income Other 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. Other non-interest income also includes realized income and gains on other investments. |
Foreclosed Assets | Foreclosed Assets Management 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 Assets Management 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 Equipment The 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 |
Debt Issuance Costs | Debt Issuance Costs The 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 Plans The Company records contributions to the qualified employee retirement plan as compensation cost in the period incurred. The Company has also entered into a Supplemental Executive Retirement Plan (the “ SERP ”) with its President and Chief Executive Officer, Joseph W. Turner, Jr. The Company records expenses related to the SERP based on the likelihood of the benefits vesting. |
Leases | Leases We recognize right-of-use (“ ROU The Company has operating leases for real estate. Its leases have remaining lease terms of 3 months to 2 years. Its lease agreements may include renewal or termination options for varying periods that are generally at our discretion. In lease term, the Company only includes those periods related to renewal options we are reasonably certain to exercise. However, the Company generally does not include these renewal options as it is not reasonably certain to renew at the lease commencement date. This determination is based on management’s consideration of certain economic, strategic, and other factors that are evaluated at lease commencement date and reevaluate throughout the lease term. Some leases also include options to terminate the leases and the Company only includes those periods beyond the termination date if management is 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 the lease agreements have both lease and non-lease components, the Company treats 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. Leases with a term of 12 months or less are not recognized on the balance sheet, but rather expensed on a straight-line basis over the lease term. |
Income Taxes | Income Taxes The 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 guidance Accounting Standards Pending Adoption In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 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. The Company’s preliminary evaluation indicates the provisions of ASU No. 2016-13 are expected to affect the level of the allowance for loan losses on the Company’s consolidated financial statements. Management has gathered all necessary data and reviewed potential methods to calculate the expected credit losses. The Company will use a third-party software solution to assist with the adoption of the standard. The ASU allows for several different methods of calculating the Allowance for Credit Losses (“ACL”) and based on its analysis of observable data, the Company determined the probability of default method to be the most appropriate for all its loans. The Company expects to record a one-time cumulative effect adjustment to the allowance for credit losses in retained earnings on the consolidated balance sheet as of the beginning of 2023, as is required in the guidance. The Company believes there will be an adjustment to the allowance of up to $300 thousand. In addition, the Company expects the allowance for unfunded commitments to be immaterial. The qualitative impact of the new accounting standard will still be directed by many of the same factors that impacted the previous methodology for calculating the allowance, including but not limited to, quality and experience of staff, changes in the value of collateral, concentrations of credit in loan types and changes to lending policies. In addition, the Company will also use reasonable and supportable forecasts. The actual impact from adopting this guidance may be subject to change based upon refinement and finalization of the model and associated assumptions, the implementation and testing of certain internal controls ensuring model effectiveness and management’s judgment. In March 2022, the FASB issued ASU 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. This ASU eliminates the accounting guidance for troubled debt restructurings (TDRs) by creditors in Subtopic 310-40, Receivables - Troubled Debt Restructurings by Creditors, while adding disclosures for certain loan restructurings by creditors when a borrower is experiencing financial difficulty. This guidance requires an entity to determine whether the modification results in a new loan or a continuation of an existing loan. Additionally, the ASU requires disclosure of current period gross write-offs by year of origination for financing receivables. This ASU is effective for the Company for fiscal years beginning after December 15, 2022. The Company adopted this guidance on January 1, 2023 and it did not have a material impact on the condensed consolidated financial statements. |
Pledged of Cash and Restricted
Pledged of Cash and Restricted Cash (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Pledged Cash and Restricted Cash [Abstract] | |
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | 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, 2022 2021 Cash and cash equivalents $ 9,504 $ 28,080 Restricted cash 60 69 Total cash, cash equivalents, and restricted cash shown in the statements of cash flows $ 9,564 $ 28,149 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
AdelFi | |
Related Party Transaction [Line Items] | |
Summary of Related Party Balances | Related party balances pertaining to the assets of the Company (dollars in thousands): December 31, December 31, 2022 2021 Total funds held on deposit at AdelFi $ 443 $ 3,797 Loan participations purchased from and serviced by AdelFi 68 256 |
Schedule of Related Party Transactions | Related party transactions of the Company (dollars in thousands): Years ended December 31, 2022 2021 Interest earned on funds held with AdelFi $ 1 $ 2 Interest income earned on loans purchased from AdelFi 5 15 Fees paid to AdelFi from MP Securities Networking Agreement 9 8 Income from Successor Servicing Agreement with AdelFi — 9 Rent expense on lease agreement with AdelFi 146 146 |
ACCU [Member] | |
Related Party Transaction [Line Items] | |
Summary of Related Party Balances | Related party balances pertaining to the assets of the Company (dollars in thousands): December 31, December 31, 2022 2021 Total funds held on deposit at ACCU $ 246 $ 4,083 Dollar amount of outstanding loan participations sold to ACCU and serviced by the Company 964 1,830 Amount owed on ACCU secured borrowings 7 17 Amount owed on ACCU line of credit 3,000 2,000 Loans pledged on ACCU line of credit 6,823 6,768 |
Schedule of Related Party Transactions | Related party transactions of the Company (dollars in thousands): Years ended December 31, 2022 2021 Interest earned on funds held with ACCU $ 8 $ 21 Loans sold to ACCU — 1,000 Dollar amount of secured borrowings made from ACCU 7 17 Dollar amount of draws on ACCU line of credit 3,000 2,000 Interest expense on ACCU borrowings 100 22 Income from broker services provided to ACCU by MPS 39 46 Fees paid based on MP Securities Networking Agreement with ACCU 94 84 |
KCT Credit Union [Member] | |
Related Party Transaction [Line Items] | |
Summary of Related Party Balances | 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. Related party balances pertaining to the assets of the Company (dollars in thousands): December 31, December 31, 2022 2021 Total funds held on deposit at KCT $ 1,261 $ 1,018 Loans pledged on KCT line of credit 10,962 8,492 Outstanding loan participations sold to KCT and serviced by the Company 3,455 4,598 |
Schedule of Related Party Transactions | Years ended December 31, 2022 2021 Interest earned on funds held with KCT $ 10 $ 18 Loans sold to KCT 56 2,847 Dollar amount of draws on KCT line of credit 2,000 3,825 Interest expense on KCT line of credit 15 40 Fees paid based on MP Securities Networking Agreement with KCT 69 35 |
Other Related Parties [Member] | |
Related Party Transaction [Line Items] | |
Summary of Related Party Balances | Transactions with Other Equity Owners From 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, 2022 2021 Outstanding loan participations sold to UFCU and serviced by the Company $ — $ 4,275 Outstanding loan participations sold to NFCU and serviced by the Company 4,872 4,991 Outstanding notes payable to officers and managers 2,266 261 |
Loans Receivable and Allowanc_2
Loans Receivable and Allowance for Loan Losses (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Loans Receivable and Allowance for Loan Losses [Abstract] | |
Summary of Loans | The table below is a summary of the Company’s mortgage loans owned (dollars in thousands): December 31, December 31, 2022 2021 Commercial loans: Real estate secured $ 86,718 $ 98,858 Other secured 225 425 Unsecured 99 122 Total loans 87,042 99,405 Deferred loan fees, net (208) (304) Loan discount (207) (220) Allowance for loan losses (1,551) (1,638) Loans, net $ 85,076 $ 97,243 |
Schedule of Changes in Allowance for Loan Losses | December 31, December 31, 2022 2021 Balance, beginning of period $ 1,638 $ 1,516 Provision (credit) for loan loss (296) 122 Chargeoffs — — Recoveries 209 — Balance, end of period $ 1,551 $ 1,638 |
Schedule of Loans and Allowance for Loan Losses by Impairment Methodology | Loans and Allowance for Loan Losses (by segment) As of December 31, December 31, 2022 2021 Loans: Individually evaluated for impairment $ 5,933 $ 9,688 Collectively evaluated for impairment 81,109 89,717 Balance $ 87,042 $ 99,405 Allowance for loan losses: Individually evaluated for impairment $ 597 $ 290 Collectively evaluated for impairment 954 1,348 Balance $ 1,551 $ 1,638 |
Schedule of Loan Portfolio Credit Quality Indicators by Class | Credit Quality Indicators (by class) As of December 31, 2022 Wholly-Owned First Wholly-Owned Junior Participation First Participation Junior Total Grade: Pass $ 46,155 $ 1,742 $ 1,035 $ — $ 48,932 Watch 32,080 29 68 — 32,177 Special mention — — — — — Substandard 3,840 1,590 — — 5,430 Doubtful 503 — — — 503 Loss — — — — — Total $ 82,578 $ 3,361 $ 1,103 $ — $ 87,042 Credit Quality Indicators (by class) As of December 31, 2021 Wholly-Owned First Wholly-Owned Junior Participation First Participation Junior Total Grade: Pass $ 67,580 $ 2,007 $ 172 $ — $ 69,759 Watch 19,858 30 70 — 19,958 Special mention — — — — — Substandard 7,535 1,650 — — 9,185 Doubtful 503 — — — 503 Loss — — — — — Total $ 95,476 $ 3,687 $ 242 $ — $ 99,405 |
Schedule of Age Analysis of Past Due Loans by Class | 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, 2022 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 Commercial loans: Wholly-Owned First $ 6,068 $ — $ 1,378 $ 7,446 $ 75,132 $ 82,578 $ — Wholly-Owned Junior — — — — 3,361 3,361 — Participation First — — — — 1,103 1,103 — Participation Junior — — — — — — — Total $ 6,068 $ — $ 1,378 $ 7,446 $ 79,596 $ 87,042 $ — 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 Commercial 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 $ — |
Schedule of Impaired Loans by Class | Impaired Loans (by class) For the years ended December 31, December 31, 2022 2021 Wholly-Owned First Average Recorded Investment $ 14,644 $ 10,772 Interest Income Recognized 1,026 582 Wholly-Owned Junior Average Recorded Investment 1,620 1,668 Interest Income Recognized — — Participation First Average Recorded Investment — — Interest Income Recognized — — Participation Junior Average Recorded Investment — — Interest Income Recognized — — Total Impaired Loans Average Recorded Investment $ 16,264 $ 11,310 Interest Income Recognized 1,026 582 Impaired Loans (by class) As of As of December 31, December 31, 2022 2021 Wholly-Owned First Recorded Investment with allowance $ 3,008 $ 1,371 Recorded Investment with no Allowance 15,569 9,339 Total Recorded Investment $ 18,577 $ 10,710 Related Allowance on Impaired Loans with Allowance 457 631 Unpaid Principal Balance $ 18,734 $ 10,905 Wholly-Owned Junior Recorded Investment with allowance $ 1,590 $ — Recorded Investment with no Allowance — 1,650 Total Recorded Investment $ 1,590 $ 1,650 Related Allowance on Impaired Loans with Allowance 139 — Unpaid Principal Balance $ 1,685 $ 1,685 Participation First Recorded Investment with allowance $ — $ — Recorded Investment with no Allowance — — Total Recorded Investment $ — $ — Related Allowance on Impaired Loans with Allowance — — Unpaid Principal Balance $ — $ — Participation Junior Recorded Investment with allowance $ — $ — Recorded Investment with no Allowance — — Total Recorded Investment $ — $ — Related Allowance on Impaired Loans with Allowance — — Unpaid Principal Balance $ — $ — Total Impaired Loans Recorded Investment with allowance $ 4,598 $ 1,371 Recorded Investment with no Allowance 15,569 10,989 Total Recorded Investment $ 20,167 $ 12,360 Related Allowance on Impaired Loans with Allowance 596 631 Unpaid Principal Balance $ 20,419 $ 12,590 |
Schedule of Loans on Non-accrual Status by Class | A summary of non-accrual loans by loan class is as follows (dollars in thousands): Loans on Non-accrual Status (by class) December 31, 2022 December 31, 2021 Commercial loans: Wholly-Owned First $ 4,342 $ 6,162 Wholly-Owned Junior 1,590 1,650 Participation First — — Participation Junior — — Total $ 5,932 $ 7,812 |
Schedule of Troubled Debt Restructurings by Class | Troubled Debt Restructurings (by class) For the year ended December 31, 2022 Number of Loans Pre- Modification Outstanding Recorded Investment Post- Modification Outstanding Recorded Investment Recorded Investment At Period End Commercial loans: Wholly-Owned First 4 $ 8,385 $ 8,385 $ 8,464 Wholly-Owned Junior — — — — Participation First — — — — Participation Junior — — — — Total 4 $ 8,385 $ 8,385 $ 8,464 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 End Commercial loans: Wholly-Owned First 2 $ 5,387 $ 5,387 $ 5,313 Wholly-Owned Junior — — — — Participation First — — — — Participation Junior — — — — Total 2 $ 5,387 $ 5,387 $ 5,313 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Investments in Joint Venture [Abstract] | |
Details of certificates with original maturities of greater than three months owned | Details of certificates with original maturities of greater than three months owned by the Company as of December 31, 2022, are as follows (dollars in thousands): Certificate Open Date Certificate Amount Interest Rate Maturity Date CD 1 9/29/2022 $ 1,250 3.25% 6/6/2023 |
Indexed annuity insurance contracts | Additional information related to these investments is as follows (dollars in thousands): Income for the year ended Investment Type Maturity Date Original Cost Net Carrying Amount December 31, 2022 December 31, 2021 Fixed annuity June 2032 $ 1,000 $ 1,018 $ 18 $ — |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue Recognition [Abstract] | |
Schedule of Disaggregated Revenue | December 31, 2022 2021 Non-interest income, in scope of ASC 606 Broker-dealer fees and commissions $ 838 $ 878 Gains on loan sales 13 64 Gain on sale of foreclosed assets — 44 Other investment income 18 — Other non-interest income — 9 Non-interest income, out of scope, ASC 606 Lending fees 186 207 Gain on debt extinguishment 2,537 2,398 Total non-interest income $ 3,592 $ 3,600 |
Schedule of Revenue by Transaction and Assets Under Management | For the twelve months ended (dollars in thousands) December 31, 2022 December 31, 2021 Broker-dealer revenue Securities commissions Transactional $ 109 $ 131 AUM 61 40 Total 170 171 Sale of investment company shares Transactional 22 34 AUM 80 98 Total 102 132 Other insurance product revenue Transactional 179 187 AUM 48 48 Total 227 235 Advisory fee income Transactional 1 3 AUM 338 337 Total 339 340 Total broker-dealer revenue Transactional 311 355 AUM 527 523 Total broker-dealer revenue $ 838 $ 878 |
Loan Transfers and Servicing (T
Loan Transfers and Servicing (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Loan Transfers and Servicing [Abstract] | |
Schedule of Servicing Assets | A 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, 2022 2021 Participation loans interests sold by the Company during the year $ 3,716 $ 14,053 Total participation interests sold and serviced by the Company 34,946 46,056 Servicing income 153 189 Servicing Assets Balance, beginning of period $ 170 $ 147 Additions: Servicing obligations from sale of loan participations 19 81 Subtractions: Amortization (66) (58) Balance, end of period $ 123 $ 170 |
Foreclosed Assets (Tables)
Foreclosed Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Foreclosed Assets [Abstract] | |
Foreclosed Asset Expenses | Expenses applicable to foreclosed assets include the following (dollars in thousands): Foreclosed Asset Expenses for the years ended December 31, 2022 2021 Operating expenses 10 22 Total expenses $ 10 $ 22 |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Premises and Equipment [Abstract] | |
Summary of Premises and Equipment | The tables below summarize our premises and equipment (dollars in thousands): As of December 31, December 31, 2022 2021 Furniture and office equipment $ 528 $ 522 Computer system 220 214 Leasehold improvements 43 43 Total premises and equipment 791 779 Less accumulated depreciation and amortization (651) (607) Premises and equipment, net $ 140 $ 172 2022 2021 Depreciation and amortization expense for the years ended December 31, $ 44 $ 48 |
Credit Facilities and Other D_2
Credit Facilities and Other Debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Credit Facilities, Other Debt and Investor Notes Payable [Abstract] | |
Summary of Principal Terms of Term Debt | Details of the Company’s debt facilities as of December 31, 2022 are as follows (dollars in thousands): Nature of Borrowing Interest Rate Interest Rate Type Amount Outstanding Monthly Payment Maturity Date Loan Collateral Pledged Cash Pledged KCT Warehouse LOC 5.250% Variable $ — $ — 6/6/2023 $ 6,160 $ — KCT Operating LOC 5.250% Variable — — 6/6/2023 4,835 — ACCU LOC 4.000% Variable 3,000 — 9/23/2023 6,823 — ACCU Secured Various Fixed 7 — Various — 7 |
Investor Notes Payable (Tables)
Investor Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Instrument [Line Items] | |
Schedule of Investor Notes Payable | The table below provides information on the Company’s investor notes payable (dollars in thousands): As of As of December 31, 2022 December 31, 2021 SEC Registered Public Offerings Offering Type Amount Weighted Average Interest Rate Amount Weighted Average Interest Rate Class 1 Offering Unsecured $ — — % $ 3,654 4.45 % Class 1A Offering Unsecured 20,698 4.27 % 27,116 4.11 % 2021 Class A Offering Unsecured 45,935 4.04 % 34,524 3.20 % Public Offering Total $ 66,633 4.11 % $ 65,294 3.65 % Private Offerings Subordinated Notes Unsecured $ 12,525 4.56 % $ 11,526 4.47 % Secured Notes Secured — — % — — % Private Offering Total $ 12,525 4.56 % $ 11,526 4.47 % Total Notes Payable $ 79,158 4.19 % $ 76,820 3.77 % Notes Payable Totals by Security Unsecured Total Unsecured $ 79,158 4.19 % $ 76,820 3.77 % Secured Total Secured $ — — % $ — — % |
Notes Payable [Member] | |
Debt Instrument [Line Items] | |
Schedule of Maturities of Notes Payable | 2023 $ 23,682 2024 17,574 2025 15,211 2026 13,990 2027 8,701 79,158 Debt issuance costs 58 Notes payable, net of debt issuance costs $ 79,100 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies [Abstract] | |
Unfunded Commitments | The table below shows the outstanding financial instruments whose contract amounts represent credit risk (dollars in thousands): Contract Amount at: December 31, 2022 December 31, 2021 Undisbursed loans $ 355 $ 270 |
Information About Existing Operating Leases | The table below presents information regarding our existing operating leases (dollars in thousands): For the Year Ended 2022 2021 Lease cost Operating lease cost $ 175 $ 174 Other information Cash paid for operating leases $ 185 $ 174 Right-of-use assets obtained in exchange for operating lease liabilities $ 106 $ — Lease liabilities recorded $ 101 $ — Weighted average remaining lease term (in years) 1.46 1.96 Weighted-average discount rate 4.33 % 4.71 % |
Future Minimum Lease Payments and Lease Costs | Lease Payments Lease Costs 2023 $ 191 $ 176 2024 36 29 2025 10 10 Total $ 237 $ 215 |
Office Operations and Other E_2
Office Operations and Other Expenses (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Office Operations and Other Expenses [Abstract] | |
Schedule of Office Operations and Other Expenses | Office operations and other expenses comprise the following (dollars in thousands): December 31, 2022 December 31, 2021 Technology and communication expenses $ 396 $ 357 Insurance 382 350 Lease and occupancy expense 211 192 Outsourced operations 160 131 Staff and travel expense 109 71 Loan expenses 42 53 Clearing firm fees 60 63 Other 131 98 Total $ 1,491 $ 1,315 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Measurements [Abstract] | |
Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments | The 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, 2022 using Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value FINANCIAL ASSETS: Cash and restricted cash $ 9,564 $ 9,564 $ — $ — $ 9,564 Certificates of deposit 1,250 — 1,243 — 1,243 Loans, net 85,076 — — 83,525 83,525 Investments in joint venture 870 — — 870 870 Other investments 1,018 — — 1,018 1,018 Accrued interest receivable 477 — — 477 477 FINANCIAL LIABILITIES: Lines of credit $ 3,000 $ — $ — $ 3,026 $ 3,026 Other secured borrowings 7 — — 7 7 Notes payable 79,100 — — 78,330 78,330 Other financial liabilities 462 — — 462 462 Fair Value Measurements at December 31, 2021 using Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value FINANCIAL ASSETS: Cash and restricted cash $ 28,149 $ 28,149 $ — $ — $ 28,149 Loans, net 97,243 — — 97,913 97,913 Investments in joint venture 882 — — 882 882 Accrued interest receivable 507 — — 507 507 FINANCIAL LIABILITIES: Lines of credit $ 2,000 $ — $ — $ 2,000 $ 2,000 Term-debt 32,749 — — 31,489 31,489 Other secured borrowings 17 — — 18 18 Notes payable 76,732 — — 76,871 76,871 Other financial liabilities 455 — — 455 455 |
Schedule of Fair Value Measured on a Nonrecurring Basis | The following table presents the fair value of assets measured on a nonrecurring basis (dollars in thousands): Fair Value Measurements Using: Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets at December 31, 2022: Collateral-dependent loans (net of allowance and discount) $ — $ — $ 5,259 $ 5,259 Investments in joint venture — — 870 870 Other investments — — 1,018 1,018 Foreclosed assets (net of allowance) — — 301 301 Total $ — $ — $ 7,448 $ 7,448 Assets at December 31, 2021: Collateral-dependent loans (net of allowance and discount) $ — $ — $ 5,815 $ 5,815 Investments in joint venture — — 884 884 Foreclosed assets (net of allowance) — — 301 301 Total $ — $ — $ 7,000 $ 7,000 |
Schedule of other investments | Other investments Balance, December 31, 2021 $ -- Purchase of other investments 1,000 Realized income on other investments 18 Balance, December 31, 2022 $ 1,018 |
Schedule of Valuation Methodologies Used to Measure the Fair Value Adjustments for Level 3 Assets Recorded at Fair Value on a Nonrecurring Basis | 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, 2022 Assets Fair Value (in thousands) Valuation Techniques Unobservable Input Range (Weighted Average) Impaired loans $ 5,259 Discounted appraised value Selling cost / Estimated market decrease 21% - 81% (28%) Investments in joint venture 870 Internal evaluations Estimated future market value 0% (0%) Other investments 1,018 Internal evaluations Indications of non-performance by insurance companies 0% (0%) Foreclosed assets 301 Internal evaluations Selling cost 6% (6%) December 31, 2021 Assets Fair Value (in thousands) Valuation Techniques Unobservable Input 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, 2022 | |
Segment Information [Abstract] | |
Schedule of Financial Information by Reportable Segments | Financial information with respect to the reportable segments for the years ended December 31, 2022 and 2021 is as follows (dollars in thousands): Twelve months ended December 31, 2022 December 31, 2021 Revenue from external sources Finance Company $ 8,562 $ 9,651 Broker Dealer 865 990 Adjustments / Eliminations — — Total $ 9,427 $ 10,641 Revenue from internal sources Finance Company $ — $ — Broker Dealer 1,128 1,244 Other Segments 65 193 Adjustments / Eliminations (1,193) (1,437) Total $ — $ — Total non-interest expense and provision for tax Finance Company $ 4,125 $ 3,605 Broker Dealer 1,598 1,334 Other Segments 4 2 Adjustments / Eliminations — — Total $ 5,727 $ 4,941 Net profit Finance Company $ 188 $ 1,108 Broker Dealer 395 900 Other Segments 61 192 Adjustments / Eliminations (17) (350) Total $ 627 $ 1,850 December 31, December 31, 2022 2021 (Unaudited) (Audited) Total assets Finance Company $ 94,523 $ 123,753 Broker Dealer 4,553 3,946 Other Segments 423 559 Adjustments / Eliminations (136) (293) Total $ 99,363 $ 127,965 |
Condensed Financial Statement_2
Condensed Financial Statements of Parent Company (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Condensed Financial Statements of Parent Company [Abstract] | |
Schedule of Parent Company Balance Sheets | Financial 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, 2022 2021 Assets: Cash $ 5,875 $ 24,030 Certificates of deposit 1,250 — Loans receivable, net of allowance for loan losses 85,076 97,243 Investment in subsidiaries 3,084 2,645 Other assets 2,922 3,045 Total assets $ 98,207 $ 126,963 Liabilities and members’ equity Liabilities: Other borrowings $ 3,007 $ 34,766 Notes payable, net of debt issuance costs 78,441 76,025 Other liabilities 2,133 1,661 Total liabilities 83,581 112,452 Equity 14,626 14,511 Total liabilities and members' equity $ 98,207 $ 126,963 |
Schedule of Parent Company Statements of Income | For the years ended December 31, 2022 2021 Income: Interest Income $ 5,825 $ 7,040 Other income 2,737 2,566 Total income 8,562 9,606 Interest expense: Other borrowings 387 1,007 Notes payable 4,158 3,808 Total interest expense 4,545 4,815 Provision (credit) for loan losses (296) 122 Other operating expenses 4,112 3,548 Income before provision for income taxes 201 1,121 Provision for income taxes and state LLC fees 13 13 Income before equity in undistributed net income of subsidiaries 188 1,108 Equity in undistributed net income of subsidiaries 439 742 Net income $ 627 $ 1,850 |
Schedule of Parent Company Statements of Cash Flows | For the years ended December 31, 2022 2021 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 627 $ 1,850 Adjustments to reconcile net income to net cash used by operating activities: Equity in undistributed net income of subsidiaries (439) (742) Depreciation 43 47 Amortization of deferred loan fees (127) (231) Amortization of debt issuance costs 651 616 Provision for loan losses (296) 122 Accretion of loan discount (20) (27) Gain on sale of loans (13) (64) Gain on sale of foreclosed assets — (44) Gain on debt extinguishment (2,537) (2,287) Changes in: Other assets 110 689 Other liabilities 493 (275) Net cash (used) by operating activities (1,508) (346) CASH FLOWS FROM INVESTING ACTIVITIES: Loan purchases (2,760) (842) Loan originations (4,267) (14,319) Loan sales 3,716 14,053 Loan principal collections 15,915 20,105 Redemption (purchase) of certificates of deposit (1,250) 1,761 Foreclosed property sales — 44 Purchase of property and equipment (11) (1) Net cash provided by investing activities 11,343 20,801 CASH FLOWS FROM FINANCING ACTIVITIES: Net change in term-debt (30,212) (16,370) Borrowings, net of repayments on lines of credit 1,000 2,000 Net change in secured borrowings (10) 17 Net change in notes payable 2,338 593 Debt issuance costs (573) (828) Dividends paid on preferred units (533) (245) Net cash (used) by financing activities (27,990) (14,833) Net (decrease) increase in cash and restricted cash (18,155) 5,622 Cash, cash equivalents, and restricted cash at beginning of period 24,030 18,408 Cash, cash equivalents, and restricted cash at end of period $ 5,875 $ 24,030 Supplemental disclosures of cash flow information Interest paid $ 3,341 $ 3,788 Income taxes paid 20 20 Leased assets obtained in exchange of new operating lease liabilities 22 — Lease liabilities recorded 17 — Dividends declared to preferred unit holders 182 203 |
Nature of Business and Summar_3
Nature of Business and Summary of Significant Accounting Policies - Narrative (Details) | 1 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 item | Dec. 31, 2022 USD ($) item segment loan | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Significant Accounting Policies [Line Items] | ||||
Number of loan portfolio segments | segment | 1 | |||
Number of fixed annuities purchased | item | 2 | |||
Term of fixed annuities insurance | 10 years | |||
Loans classified as non-TDR loan modifications due to COVID-19 | loan | 0 | |||
Loans receivable, allowance for loan losses | $ 1,551,000 | $ 1,638,000 | $ 1,516,000 | |
Types of revenue, number | item | 2 | |||
Certificates of Deposit | ||||
Significant Accounting Policies [Line Items] | ||||
Investments in certificates of deposit | 0 | |||
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] | ||||
Estimated useful lives of property and equipment | 7 years | |||
Operating lease, remaining lease term | 2 years | |||
Maximum [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | Scenario, Plan [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Loans receivable, allowance for loan losses | $ 300,000 | |||
Maximum [Member] | Certificates of Deposit | ||||
Significant Accounting Policies [Line Items] | ||||
Investments in certificates of deposit | $ 1,300,000 | $ 0 |
Pledged Cash and Restricted C_2
Pledged Cash and Restricted Cash - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Pledged Cash and Restricted Cash [Abstract] | ||
Pledged cash | $ 7 | $ 17 |
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, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Pledged Cash and Restricted Cash [Abstract] | |||
Cash and cash equivalents | $ 9,504 | $ 28,080 | |
Restricted cash | 60 | 69 | |
Total cash, cash equivalents, and restricted cash shown in the statements of cash flows | $ 9,564 | $ 28,149 | $ 21,973 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) | 12 Months Ended | ||||||
Jun. 06, 2022 USD ($) | Mar. 20, 2020 USD ($) loan | Aug. 14, 2013 USD ($) loan | Dec. 31, 2022 USD ($) loan | Dec. 31, 2021 USD ($) loan | Sep. 29, 2022 USD ($) | Jan. 13, 2020 USD ($) | |
Related Party Transaction [Line Items] | |||||||
Pledged cash | $ 7,000 | $ 17,000 | |||||
Lines of credit | $ 3,000,000 | $ 2,000,000 | |||||
AdelFi | |||||||
Related Party Transaction [Line Items] | |||||||
Number of Loans purchased from related party | loan | 0 | 0 | |||||
Loans sold to related party | $ 0 | $ 0 | |||||
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 | ||||||
ACCU [Member] | Master LP Agreement [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Loans sold to related party | $ 7,000 | 17,000 | |||||
UFCU [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Number of loans sold to related party | loan | 1 | ||||||
Serviced loan participations sold | $ 5,000,000 | ||||||
MP Securities [Member] | Networking Agreement [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Minimum cancellation notice | 30 days | ||||||
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 | $ 56,000 | 2,847,000 | |||||
Interest rate | 3.25% | 3.25% | |||||
Maturity Date | Jun. 06, 2023 | ||||||
Loan and Security Agreement terminated | $ 7,000,000 | ||||||
Serviced loan participations sold | 3,500,000 | 4,600,000 | |||||
Board and Executive Management [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Notes held by related parties | $ 2,300,000 | 261,000 | |||||
Minimum [Member] | MP Securities [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Related party servicing fee | 0.25% | ||||||
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 | ||||||
Certificates of Deposit | |||||||
Related Party Transaction [Line Items] | |||||||
Investments in certificates of deposit | 0 | ||||||
Certificates of Deposit | KCT Credit Union [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Investments in certificates of deposit | $ 1,300,000 | $ 1,000,000 | |||||
Certificates of Deposit | Maximum [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Investments in certificates of deposit | $ 1,300,000 | 0 | |||||
KCT Line of Credit [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Short-term Line of Credit | $ 0 | 0 | |||||
KCT Line of Credit [Member] | KCT Credit Union [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Maturity Date | Oct. 13, 2021 | ||||||
KCT Warehouse LOC [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Maximum borrowing capacity | 5,000,000 | ||||||
KCT Operating LOC [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Maximum borrowing capacity | $ 5,000,000 | ||||||
ACCU Line of Credit. 4.000% maturing September 23, 2023 | ACCU [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Maximum borrowing capacity | $ 5,000,000 | ||||||
Lines of credit | $ 3,000,000 | $ 2,000,000 | |||||
Maturity Date | Sep. 23, 2023 |
Related Party Transactions - Su
Related Party Transactions - Summary of Related Party Balances (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
AdelFi | ||
Related Party Transaction [Line Items] | ||
Total funds held on deposit | $ 443 | $ 3,797 |
Loan participations purchased from and serviced by related party | 68 | 256 |
ACCU [Member] | ||
Related Party Transaction [Line Items] | ||
Total funds held on deposit | 246 | 4,083 |
Outstanding loan participations sold to related party and serviced by the Company | 964 | 1,830 |
ACCU [Member] | Line Of Credit [Member] | ||
Related Party Transaction [Line Items] | ||
Amount owed to related party | 3,000 | 2,000 |
Loans pledged on line of credit | $ 6,823 | $ 6,768 |
Financial Instrument, Owned, Pledging Purpose [Extensible Enumeration] | Line of Credit, Current | Line of Credit, Current |
ACCU [Member] | Secured Borrowings [Member] | ||
Related Party Transaction [Line Items] | ||
Amount owed to related party | $ 7 | $ 17 |
KCT Credit Union [Member] | ||
Related Party Transaction [Line Items] | ||
Total funds held on deposit | 1,261 | 1,018 |
Loans pledged on line of credit | $ 10,962 | $ 8,492 |
Financial Instrument, Owned, Pledging Purpose [Extensible Enumeration] | Line of Credit, Current | Line of Credit, Current |
Outstanding loan participations sold to related party and serviced by the Company | $ 3,455 | $ 4,598 |
UFCU [Member] | ||
Related Party Transaction [Line Items] | ||
Outstanding loan participations sold to related party and serviced by the Company | 4,275 | |
NFCU [Member] | ||
Related Party Transaction [Line Items] | ||
Outstanding loan participations sold to related party and serviced by the Company | 4,872 | 4,991 |
Officers And Managers [Member] | ||
Related Party Transaction [Line Items] | ||
Outstanding notes payable to officers and managers | $ 2,266 | $ 261 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Related Party Transactions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | ||
Income from related party | $ 3,592,000 | $ 3,600,000 |
AdelFi Credit Union [Member] | ||
Related Party Transaction [Line Items] | ||
Interest earned on funds held with related party | 1,000 | 2,000 |
Interest income earned on loans purchased from related party | 5,000 | 15,000 |
Loans sold to related party | 0 | 0 |
AdelFi Credit Union [Member] | Networking Agreement [Member] | ||
Related Party Transaction [Line Items] | ||
Fees paid to and expenses with related party | 9,000 | 8,000 |
AdelFi Credit Union [Member] | Successor Servicing Agreement [Member] | ||
Related Party Transaction [Line Items] | ||
Income from related party | 9,000 | |
AdelFi Credit Union [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 | 8,000 | 21,000 |
Loans sold to related party | 1,000,000 | |
Dollar amount of secured borrowings | 7,000 | 17,000 |
Dollar amount of net draws on line of credit | 3,000,000 | 2,000,000 |
Interest expensed on line of credit | 100,000 | 22,000 |
ACCU [Member] | MP Securities [Member] | ||
Related Party Transaction [Line Items] | ||
Income from related parties | 39,000 | 46,000 |
ACCU [Member] | Networking Agreement [Member] | MP Securities [Member] | ||
Related Party Transaction [Line Items] | ||
Fees paid to and expenses with related party | 94,000 | 84,000 |
KCT Credit Union [Member] | ||
Related Party Transaction [Line Items] | ||
Interest earned on funds held with related party | 10,000 | 18,000 |
Loans sold to related party | 56,000 | 2,847,000 |
Dollar amount of net draws on line of credit | 2,000,000 | 3,825,000 |
Interest expensed on line of credit | 15,000 | 40,000 |
KCT Credit Union [Member] | MP Securities [Member] | ||
Related Party Transaction [Line Items] | ||
Fees paid to and expenses with related party | $ 69,000 | $ 35,000 |
Loans Receivable and Allowanc_3
Loans Receivable and Allowance for Loan Losses - Narrative (Details) | 12 Months Ended | |
Dec. 31, 2022 USD ($) loan segment item | Dec. 31, 2021 USD ($) loan | |
Loans and Leases Receivable Disclosure [Line Items] | ||
Loan participations transferred under recourse agreement | $ | $ 7,000 | $ 17,000 |
Number of loan categories | item | 4 | |
Loan interest rate | 6.46% | 6.21% |
Number of loan portfolio segments | segment | 1 | |
Number of restructured loans | 4 | 2 |
Loans restructured with extended maturity dates | 2 | |
Loans restructured with interest only payments | 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 | 0 | |
Number of loans restructured qualified under CARES Act modification | 0 | 1 |
Amount of loan outstanding at time of modification | $ | $ 1,300,000 | |
Maturity year | 2037 | |
Number of loans restructred defaulted | 0 | |
Construction loan | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Number of restructured loans | 1 |
Loans Receivable and Allowanc_4
Loans Receivable and Allowance for Loan Losses - Summary of Loans (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total loans | $ 87,042 | $ 99,405 | |
Deferred loan fees, net | (208) | (304) | |
Loan discount | (207) | (220) | |
Allowance for loan losses | (1,551) | (1,638) | $ (1,516) |
Loans, net | 85,076 | 97,243 | |
Real Estate Secured [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total loans | 86,718 | 98,858 | |
Other Secured [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total loans | 225 | 425 | |
Unsecured [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total loans | $ 99 | $ 122 |
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, 2022 | Dec. 31, 2021 | |
Loans Receivable and Allowance for Loan Losses [Abstract] | ||
Balance, beginning of period | $ 1,638 | $ 1,516 |
Provision (credit) for loan loss | (296) | 122 |
Recoveries | 209 | |
Balance, end of period | $ 1,551 | $ 1,638 |
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, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Loans Receivable and Allowance for Loan Losses [Abstract] | |||
Loans: Individually evaluated for impairment | $ 5,933 | $ 9,688 | |
Loans: Collectively evaluated for impairment | 81,109 | 89,717 | |
Loans: Balance | 87,042 | 99,405 | |
Allowance for loan losses: Individually evaluated for impairment | 597 | 290 | |
Allowance for loan losses: Collectively evaluated for impairment | 954 | 1,348 | |
Allowance for loan losses: Balance | $ 1,551 | $ 1,638 | $ 1,516 |
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, 2022 | Dec. 31, 2021 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | $ 87,042 | $ 99,405 |
Wholly-Owned First [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 82,578 | 95,476 |
Wholly-Owned Junior [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 3,361 | 3,687 |
Participation First [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 1,103 | 242 |
Pass [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 48,932 | 69,759 |
Pass [Member] | Wholly-Owned First [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 46,155 | 67,580 |
Pass [Member] | Wholly-Owned Junior [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 1,742 | 2,007 |
Pass [Member] | Participation First [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 1,035 | 172 |
Watch [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 32,177 | 19,958 |
Watch [Member] | Wholly-Owned First [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 32,080 | 19,858 |
Watch [Member] | Wholly-Owned Junior [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 29 | 30 |
Watch [Member] | Participation First [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 68 | 70 |
Substandard [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 5,430 | 9,185 |
Substandard [Member] | Wholly-Owned First [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 3,840 | 7,535 |
Substandard [Member] | Wholly-Owned Junior [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 1,590 | 1,650 |
Doubtful [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 503 | 503 |
Doubtful [Member] | Wholly-Owned First [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | $ 503 | $ 503 |
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, 2022 | Dec. 31, 2021 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | $ 87,042 | $ 99,405 |
30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 6,068 | |
Greater Than 90 Days [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 1,378 | 503 |
Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 7,446 | 503 |
Current [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 79,596 | 98,902 |
Wholly-Owned First [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 82,578 | 95,476 |
Wholly-Owned First [Member] | 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 6,068 | |
Wholly-Owned First [Member] | Greater Than 90 Days [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 1,378 | 503 |
Wholly-Owned First [Member] | Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 7,446 | 503 |
Wholly-Owned First [Member] | Current [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 75,132 | 94,973 |
Wholly-Owned Junior [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 3,361 | 3,687 |
Wholly-Owned Junior [Member] | Current [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 3,361 | 3,687 |
Participation First [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 1,103 | 242 |
Participation First [Member] | Current [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | $ 1,103 | $ 242 |
Loans Receivable and Allowanc_9
Loans Receivable and Allowance for Loan Losses - Impaired Loans by Class (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Impaired Financing Receivable, Average Recorded Investment [Abstract] | ||
Average Recorded Investment | $ 16,264 | $ 11,310 |
Impaired Financing Receivable, Interest Income, Cash Basis Method [Abstract] | ||
Interest Income Recognized | 1,026 | 582 |
Impaired Financing Receivable, Recorded Investment [Abstract] | ||
Recorded Investment with allowance | 4,598 | 1,371 |
Recorded Investment with no Allowance | 15,569 | 10,989 |
Total Recorded Investment | 20,167 | 12,360 |
Related Allowance on Impaired Loans with Allowance | 596 | 631 |
Unpaid Principal Balance | 20,419 | 12,590 |
Wholly-Owned First [Member] | ||
Impaired Financing Receivable, Average Recorded Investment [Abstract] | ||
Average Recorded Investment | 14,644 | 10,772 |
Impaired Financing Receivable, Interest Income, Cash Basis Method [Abstract] | ||
Interest Income Recognized | 1,026 | 582 |
Impaired Financing Receivable, Recorded Investment [Abstract] | ||
Recorded Investment with allowance | 3,008 | 1,371 |
Recorded Investment with no Allowance | 15,569 | 9,339 |
Total Recorded Investment | 18,577 | 10,710 |
Related Allowance on Impaired Loans with Allowance | 457 | 631 |
Unpaid Principal Balance | 18,734 | 10,905 |
Wholly-Owned Junior [Member] | ||
Impaired Financing Receivable, Average Recorded Investment [Abstract] | ||
Average Recorded Investment | 1,620 | 1,668 |
Impaired Financing Receivable, Recorded Investment [Abstract] | ||
Recorded Investment with allowance | 1,590 | |
Recorded Investment with no Allowance | 1,650 | |
Total Recorded Investment | 1,590 | 1,650 |
Related Allowance on Impaired Loans with Allowance | 139 | |
Unpaid Principal Balance | $ 1,685 | $ 1,685 |
Loans Receivable and Allowan_10
Loans Receivable and Allowance for Loan Losses - Schedule of Loans on Non-accrual Status by Class (Details) - Commercial loans: - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Nonaccrual loans | $ 5,932 | $ 7,812 |
Wholly-Owned First [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Nonaccrual loans | 4,342 | 6,162 |
Wholly-Owned Junior [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Nonaccrual loans | $ 1,590 | $ 1,650 |
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, 2022 USD ($) loan | Dec. 31, 2021 USD ($) loan | |
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Number of Loans | loan | 4 | 2 |
Amount of loan outstanding at time of modification | $ 1,300 | |
Commercial loans: | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Number of Loans | loan | 4 | 2 |
Pre-Modification Outstanding Recorded Investment | $ 8,385 | $ 5,387 |
Post-Modification Outstanding Recorded Investment | 8,385 | 5,387 |
Amount of loan outstanding at time of modification | $ 8,464 | $ 5,313 |
Commercial loans: | Wholly-Owned First [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Number of Loans | loan | 4 | |
Pre-Modification Outstanding Recorded Investment | $ 8,385 | |
Post-Modification Outstanding Recorded Investment | 8,385 | |
Amount of loan outstanding at time of modification | $ 8,464 |
Investments - Narrative (Detail
Investments - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2015 | |
Schedule of Equity Method Investments [Line Items] | |||
Investments in joint venture | $ 870 | $ 882 | $ 900 |
Investment income recognized | 18 | ||
Indexed annuity insurance contracts | |||
Schedule of Equity Method Investments [Line Items] | |||
Investment income recognized | $ 18 | ||
Tesoro Hills [Member] | Ministry Partners Investment Company [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership percentage held | 74% | 74% | 100% |
Investments - Certificates of D
Investments - Certificates of Deposit (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Investment Holdings [Line Items] | ||
Interest-Bearing Domestic Deposit, Certificates of Deposits | $ 1,250,000 | |
Certificates of Deposit | ||
Investment Holdings [Line Items] | ||
Investments in certificates of deposit | $ 0 |
Investments - Other Investments
Investments - Other Investments (Details) $ in Thousands | 1 Months Ended | 12 Months Ended |
Jun. 30, 2022 USD ($) contract | Dec. 31, 2022 USD ($) | |
Investment Holdings [Line Items] | ||
Investment income recognized | $ 18 | |
Indexed annuity insurance contracts | ||
Investment Holdings [Line Items] | ||
Number of contracts | contract | 2 | |
Contracted Period | 10 years | |
Original Cost | $ 1,000 | |
Net Carrying Amount | 1,018 | |
Investment income recognized | $ 18 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Disaggregated Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Non-interest income, in scope of ASC 606 | $ 3,592 | $ 3,600 |
Broker-Dealer Fees and Commissions [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Non-interest income, in scope of ASC 606 | 838 | 878 |
Gain on Loan Sales [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Non-interest income, in scope of ASC 606 | 13 | 64 |
Gain in Sale of Foreclosed Assets [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Non-interest income, in scope of ASC 606 | 44 | |
Other investment income | ||
Disaggregation of Revenue [Line Items] | ||
Non-interest income, in scope of ASC 606 | 18 | |
Gain on Debt Extinguishment [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Non-interest income, out of scope, ASC 606 | 2,537 | 2,398 |
Other Non-Interest Income [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Non-interest income, in scope of ASC 606 | 9 | |
Lending Fees [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Non-interest income, out of scope, ASC 606 | $ 186 | $ 207 |
Revenue Recognition - Revenue f
Revenue Recognition - Revenue from Management Of Invested Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customer | $ 3,592 | $ 3,600 |
Broker-Dealer Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customer | 838 | 878 |
Broker-Dealer Revenue, Transactional [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customer | 311 | 355 |
Broker-Dealer Revenue, AUM [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customer | 527 | 523 |
Securities Commissions Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customer | 170 | 171 |
Securities Commissions Revenue, Transactional [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customer | 109 | 131 |
Securities Commissions Revenue, AUM [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customer | 61 | 40 |
Sale Of Investment Company Shares Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customer | 102 | 132 |
Sale Of Investment Company Shares Revenue, Transactional [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customer | 22 | 34 |
Sale Of Investment Company Shares Revenue, AUM [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customer | 80 | 98 |
Other Insurance Product Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customer | 227 | 235 |
Other Insurance Product Revenue, Transactional [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customer | 179 | 187 |
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 | 339 | 340 |
Advisory Fee Income, Transactional [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customer | 1 | 3 |
Advisory Fee Income, AUM [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customer | $ 338 | $ 337 |
Loan Transfers and Servicing -
Loan Transfers and Servicing - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
ACCU [Member] | ||
Loans sold to related party | $ 1,000,000 | |
ACCU [Member] | Master LP Agreement [Member] | ||
Loans sold to related party | $ 7,000 | 17,000 |
AdelFi | ||
Loans sold to related party | $ 0 | $ 0 |
Loan Transfers and Servicing _2
Loan Transfers and Servicing - Schedule of Servicing Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Loan participation interests sold by the Company | $ 3,716 | $ 14,053 |
Total participation interests sold and serviced by the Company | 34,946 | 46,056 |
Non-interest income, in scope of ASC 606 | 3,592 | 3,600 |
Balance, beginning of period | 170 | 147 |
Additions: Servicing obligations from sale of loan participations | 19 | 81 |
Subtractions: Amortization | (66) | (58) |
Balance, end of period | 123 | 170 |
Servicing Assets [Member] | ||
Non-interest income, in scope of ASC 606 | $ 153 | $ 189 |
Foreclosed Assets - Narrative (
Foreclosed Assets - Narrative (Details) | 12 Months Ended | |
Dec. 31, 2022 USD ($) property | Dec. 31, 2021 USD ($) | |
Foreclosed Assets [Abstract] | ||
Number of foreclosed assets | property | 1 | |
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
Foreclosed Assets - Foreclosed Asset Expenses (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Foreclosed Assets [Abstract] | ||
Provision for losses | $ 0 | $ 0 |
Operating expenses | 10,000 | 22,000 |
Total expenses | $ 10,000 | $ 22,000 |
Premises and Equipment - Summar
Premises and Equipment - Summary of Premises and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Total premises and equipment | $ 791 | $ 779 |
Less accumulated depreciation and amortization | (651) | (607) |
Premises and equipment, net | 140 | 172 |
Depreciation and amortization expense | 44 | 48 |
Furniture And Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total premises and equipment | 528 | 522 |
Computer System [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total premises and equipment | 220 | 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 - Summary of Principal Terms of Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Line of Credit Facility [Line Items] | ||
Amount Outstanding, Term loan | $ 32,749 | |
Amount outstanding, Line of credit | $ 3,000 | 2,000 |
Lines of credit | Kct Operating Loc | ||
Line of Credit Facility [Line Items] | ||
Interest Rate, Line of Credit | 5.25% | |
Lines of credit | Kct Warehouse Loc | ||
Line of Credit Facility [Line Items] | ||
Interest Rate, Line of Credit | 5.25% | |
Lines of credit | ACCU Line of Credit. 4.000% maturing September 23, 2023 | ||
Line of Credit Facility [Line Items] | ||
Interest Rate, Line of Credit | 4% | |
Amount outstanding, Line of credit | $ 3,000 | |
Secured term-debt | ACCU Secured, Various Interest Rate, Maturing on various dates | ||
Line of Credit Facility [Line Items] | ||
Amount outstanding, Line of credit | 7 | |
Loans Receivable [Member] | ACCU Line of Credit. 4.000% maturing September 23, 2023 | ||
Line of Credit Facility [Line Items] | ||
Amount of Collateral Pledged | 6,800 | $ 6,800 |
Loans Receivable [Member] | Lines of credit | Kct Operating Loc | ||
Line of Credit Facility [Line Items] | ||
Amount of Collateral Pledged | 6,160 | |
Loans Receivable [Member] | Lines of credit | Kct Warehouse Loc | ||
Line of Credit Facility [Line Items] | ||
Amount of Collateral Pledged | 4,835 | |
Loans Receivable [Member] | Lines of credit | ACCU Line of Credit. 4.000% maturing September 23, 2023 | ||
Line of Credit Facility [Line Items] | ||
Amount of Collateral Pledged | 6,823 | |
Cash [Member] | Secured term-debt | ACCU Secured, Various Interest Rate, Maturing on various dates | ||
Line of Credit Facility [Line Items] | ||
Amount of Collateral Pledged | $ 7 |
Credit Facilities and Other D_4
Credit Facilities and Other Debt - Narrative (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||||||
Nov. 04, 2022 USD ($) | Sep. 29, 2022 USD ($) | Jun. 29, 2022 USD ($) | Jun. 06, 2022 USD ($) item | Jan. 06, 2022 USD ($) | Sep. 23, 2021 USD ($) | Mar. 05, 2021 USD ($) | Apr. 27, 2020 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Jan. 13, 2020 | Nov. 04, 2011 USD ($) | |
Line of Credit Facility [Line Items] | |||||||||||||
Lines of credit | $ 3,000 | $ 2,000 | |||||||||||
Gain on debt extinguishment | 2,537 | 2,398 | |||||||||||
Other secured borrowings | 7 | 17 | |||||||||||
Paycheck Protection Program Loans [Member] | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Income recognized from loans forgiven | $ 111 | ||||||||||||
ACCU Line of Credit. 4.000% maturing September 23, 2023 | Loans Receivable [Member] | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Collateral pledged | 6,800 | $ 6,800 | |||||||||||
Kct Warehousing And Operating Line Of Credit [Member] | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Minimum Net Worth to be maintained | $ 5,000 | ||||||||||||
Percentage of total liabilities equal to Net worth | 5% | ||||||||||||
Kct Warehousing And Operating Line Of Credit [Member] | Minimum [Member] | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Minimum collateralization ratio | 120% | ||||||||||||
Lines of credit | ACCU Line of Credit. 4.000% maturing September 23, 2023 | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Facility maturity date | Sep. 23, 2023 | ||||||||||||
Facility renewal period | 1 year | ||||||||||||
Minimum cancellation notice | 30 days | ||||||||||||
OSK | Secured Borrowings | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Minimum collateralization ratio | 120% | 120% | |||||||||||
Interest rate | 2.525% | ||||||||||||
Principal prepayment | $ 5,400 | $ 3,300 | $ 3,300 | $ 16,500 | $ 14,300 | ||||||||
Gain on debt extinguishment | 437 | $ 300 | $ 300 | $ 1,500 | $ 2,300 | ||||||||
Amount settled at a discount | $ 5,400 | ||||||||||||
OSK | Secured Borrowings | Term Loan [Member] | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Lines of credit | $ 87,300 | ||||||||||||
KCT Warehouse LOC [Member] | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Maximum borrowing capacity | $ 5,000 | ||||||||||||
KCT Operating LOC [Member] | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Maximum borrowing capacity | $ 5,000 | ||||||||||||
ACCU Line of Credit. 4.000% maturing September 23, 2023 | Lines of credit | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Lines of credit | $ 3,000 | $ 2,000 | |||||||||||
Interest rate | 4% | 4% | |||||||||||
Maximum borrowing capacity | $ 5,000 | ||||||||||||
Spread over prime rate | 0.75% | ||||||||||||
Maturity period | 1 year | ||||||||||||
ACCU Line of Credit. 4.000% maturing September 23, 2023 | Lines of credit | ACCU Line of Credit. 4.000% maturing September 23, 2023 | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Minimum collateralization ratio | 120% | ||||||||||||
Minimum Liquidity | $ 10,000 | ||||||||||||
KCT Credit Union [Member] | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Interest rate | 3.25% | 3.25% | |||||||||||
Number of short-term demand credit facilities | item | 2 | ||||||||||||
Debt repaid | $ 7,000 | ||||||||||||
KCT Credit Union [Member] | KCT Warehouse LOC [Member] | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Lines of credit | $ 5,000 | $ 0 | |||||||||||
Interest rate | 5.25% | ||||||||||||
Spread over prime rate | 0.50% | ||||||||||||
Percentage of deposits on borrowing limit | 25% | ||||||||||||
Due period of repayment of each advance | 120 days | ||||||||||||
Maturity period | 1 year | ||||||||||||
Delinquency period | 60 days | ||||||||||||
Collateral pledged | $ 6,200 | ||||||||||||
Certificate of Deposit Acquired | $ 1,250 | ||||||||||||
KCT Credit Union [Member] | KCT Warehouse LOC [Member] | Does Not Intend To Renew Agreement [Member] | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Facility renewal period | 1 year | ||||||||||||
Minimum cancellation notice | 30 days | ||||||||||||
KCT Credit Union [Member] | KCT Warehouse LOC [Member] | Minimum [Member] | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Minimum collateralization ratio | 120% | ||||||||||||
KCT Credit Union [Member] | KCT Operating LOC [Member] | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Lines of credit | $ 0 | ||||||||||||
Interest rate | 5.25% | ||||||||||||
Secured by cash | 25% | ||||||||||||
Maximum borrowing capacity | $ 5,000 | ||||||||||||
Spread over prime rate | 0.50% | ||||||||||||
Maturity period | 1 year | ||||||||||||
Delinquency period | 60 days | ||||||||||||
Collateral pledged | $ 4,800 | ||||||||||||
KCT Credit Union [Member] | KCT Operating LOC [Member] | Does Not Intend To Renew Agreement [Member] | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Facility renewal period | 1 year | ||||||||||||
Minimum cancellation notice | 30 days | ||||||||||||
KCT Credit Union [Member] | KCT Operating LOC [Member] | Minimum [Member] | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Minimum collateralization ratio | 120% | ||||||||||||
ACCU [Member] | Secured Borrowings | Master LP Agreement [Member] | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Other secured borrowings | $ 7 | 17 | |||||||||||
ACCU [Member] | ACCU Line of Credit. 4.000% maturing September 23, 2023 | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Lines of credit | 3,000 | $ 2,000 | |||||||||||
Maximum borrowing capacity | $ 5,000 |
Investor Notes Payable - Narrat
Investor Notes Payable - Narrative (Details) | 12 Months Ended | |||
Dec. 31, 2022 USD ($) item | Dec. 31, 2021 USD ($) | Jan. 08, 2021 USD ($) | Feb. 27, 2018 USD ($) | |
Debt Instrument [Line Items] | ||||
Debt issuance costs | $ 58,000 | $ 88,000 | ||
Class 1 [Member] | ||||
Debt Instrument [Line Items] | ||||
Outstanding amount | $ 0 | |||
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 | |||
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 - Schedu
Investor Notes Payable - Schedule of Investor Notes Payable (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Amount | $ 79,158 | $ 76,820 |
Weighted Average Interest Rate | 4.19% | 3.77% |
Public Offerings [Member] | ||
Debt Instrument [Line Items] | ||
Amount | $ 66,633 | $ 65,294 |
Weighted Average Interest Rate | 4.11% | 3.65% |
Public Offerings [Member] | Class A [Member] | ||
Debt Instrument [Line Items] | ||
Amount | $ 3,654 | |
Weighted Average Interest Rate | 4.45% | |
Public Offerings [Member] | Class 1 [Member] | ||
Debt Instrument [Line Items] | ||
Amount | $ 20,698 | $ 27,116 |
Weighted Average Interest Rate | 4.27% | 4.11% |
Public Offerings [Member] | Class 1A [Member] | ||
Debt Instrument [Line Items] | ||
Amount | $ 45,935 | $ 34,524 |
Weighted Average Interest Rate | 4.04% | 3.20% |
Private Offerings [Member] | ||
Debt Instrument [Line Items] | ||
Amount | $ 12,525 | $ 11,526 |
Weighted Average Interest Rate | 4.56% | 4.47% |
Private Offerings [Member] | Subordinated Notes [Member] | ||
Debt Instrument [Line Items] | ||
Amount | $ 12,525 | $ 11,526 |
Weighted Average Interest Rate | 4.56% | 4.47% |
Unsecured [Member] | ||
Debt Instrument [Line Items] | ||
Amount | $ 79,158 | $ 76,820 |
Weighted Average Interest Rate | 4.19% | 3.77% |
Investor Notes Payable - Sche_2
Investor Notes Payable - Schedule of Maturities of Notes Payable (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Total | $ 79,158 | $ 76,820 |
Deferred Finance Costs, Net | 58 | $ 88 |
Notes Payable [Member] | ||
Debt Instrument [Line Items] | ||
2023 | 23,682 | |
2024 | 17,574 | |
2025 | 15,211 | |
2026 | 13,990 | |
2027 | 8,701 | |
Total | 79,158 | |
Deferred Finance Costs, Net | 58 | |
Notes payable, net of debt issuance costs | $ 79,100 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) | 12 Months Ended |
Dec. 31, 2022 item | |
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] | |
Number of lease extension options remaining | 0 |
Commitments and Contingencies_2
Commitments and Contingencies - Unfunded Commitments (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Undisbursed Loans [Member] | ||
Commitments And Contingencies [Line Items] | ||
Unfunded Commitments | $ 355 | $ 270 |
Commitments and Contingencies_3
Commitments and Contingencies - Information About Existing Operating Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Commitments and Contingencies [Abstract] | ||
Operating lease cost | $ 175 | $ 174 |
Cash paid for operating leases | 185 | $ 174 |
Right-of-use assets obtained in exchange for operating lease liabilities | 106 | |
Lease liabilities recorded | $ 101 | |
Weighted average remaining lease term (in years) | 1 year 5 months 15 days | 1 year 11 months 15 days |
Weighted-average discount rate | 4.33% | 4.71% |
Commitments and Contingencies_4
Commitments and Contingencies - Future Minimum Lease Payments and Lease Costs (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Commitments and Contingencies [Abstract] | |
Lease Payments, 2023 | $ 191 |
Lease Payments, 2024 | 36 |
Lease Payments, 2025 | 10 |
Lease Payments, Total | 237 |
Lease Costs, 2023 | 176 |
Lease Costs, 2024 | 29 |
Lease Costs, 2025 | 10 |
Lease Costs, Total | $ 215 |
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, 2022 | Dec. 31, 2021 | |
Office Operations and Other Expenses [Abstract] | ||
Technology and communication expenses | $ 396 | $ 357 |
Insurance | 382 | 350 |
Lease and occupancy expense | 211 | 192 |
Outsourced operations | 160 | 131 |
Staff and travel expense | 109 | 71 |
Loan expenses | 42 | 53 |
Clearing firm fees | 60 | 63 |
Other | 131 | 98 |
Total | $ 1,491 | $ 1,315 |
Preferred and Common Units Un_2
Preferred and Common Units Under LLC Structure - Narrative (Details) | 12 Months Ended | |
Dec. 31, 2022 item / shares item $ / shares | Dec. 31, 2021 $ / shares | |
Class of Stock [Line Items] | ||
Liquidation preference, per share | $ / shares | $ 100 | $ 100 |
Series A Units | Preferred | ||
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 | ||
Mar. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
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% | ||
Contribution percentage, company match as percent of employee contribution | 3% | ||
Contribution percentage, percent of company match after initial threshold | 50% | ||
Contribution percentage, initial threshold for change in company matching contribution | 3% | ||
Matching contributions by employer | $ 80,000 | $ 67,000 | |
401(k) plan [Member] | Maximum [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Contribution percentage, company match as percent of employee contribution | 5% | ||
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 | ||
Supplemental Executive Retirement Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Retirement plan term | 10 years | ||
Retirement plan annual benefit payment | $ 60,000 | ||
Retirement plan maximum benefit payment | $ 600,000 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) | 12 Months Ended | |
Dec. 31, 2022 USD ($) contract | Dec. 31, 2021 USD ($) | |
Fair Value Measurements [Abstract] | ||
Loan participations transferred under recourse agreement | $ 7,000 | $ 17,000 |
Number of indexed annuity insurance contracts | contract | 2 | |
Impairment of the annuity investments | $ 0 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2015 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Carrying Value, Cash and restricted cash | $ 9,564,000 | $ 28,149,000 | $ 21,973,000 | |
Carrying Value, Loans, net | 85,076,000 | 97,243,000 | ||
Carrying Value, Investment in joint venture | 870,000 | 882,000 | $ 900,000 | |
Carrying Value, Term-debt | 32,749,000 | |||
Carrying Value, Line of Credit | 3,000,000 | 2,000,000 | ||
Carrying Value, Other secured borrowings | 7,000 | 17,000 | ||
Carrying Value, Notes payable | 79,100,000 | 76,732,000 | ||
Carrying Value [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Carrying Value, Cash and restricted cash | 9,564,000 | 28,149,000 | ||
Carrying Value, Certificates of deposit | 1,250,000 | |||
Carrying Value, Loans, net | 85,076,000 | 97,243,000 | ||
Carrying Value, Investment in joint venture | 870,000 | 882,000 | ||
Carrying Value, Other investments | 1,018,000 | |||
Carrying Value, Accrued interest receivable | 477,000 | 507,000 | ||
Carrying Value, Term-debt | 32,749,000 | |||
Carrying Value, Line of Credit | 3,000,000 | 2,000,000 | ||
Carrying Value, Other secured borrowings | 7,000 | |||
Carrying Value, Notes payable | 79,100,000 | 76,732,000 | ||
Carrying Value, Other financial liabilities | 462,000 | 455,000 | ||
Fair Value, Other secured borrowings | 17,000 | |||
Fair Value [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Carrying Value, Other investments | 1,018,000 | |||
Fair Value, Cash and restricted cash | 9,564,000 | 28,149,000 | ||
Fair Value, Certificates of deposit | 1,243,000 | |||
Fair Value, Loans, net | 83,525,000 | 97,913,000 | ||
Fair Value, Investment in joint venture | 870,000 | 882,000 | ||
Fair Value, Accrued interest receivable | 477,000 | 507,000 | ||
Fair Value, Term-debt | 31,489,000 | |||
Fair Value, Line of credit | 3,026,000 | 2,000,000 | ||
Fair Value, Other secured borrowings | 7,000 | 18,000 | ||
Fair Value, Notes payable | 78,330,000 | 76,871,000 | ||
Fair Value, Other financial liabilities | 462,000 | 455,000 | ||
Certificates of Deposit | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Carrying Value, Certificates of deposit | 0 | |||
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 | 9,564,000 | 28,149,000 | ||
Significant Other Observable Inputs Level 2 [Member] | Fair Value [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Fair Value, Certificates of deposit | 1,243,000 | |||
Significant Unobservable Inputs Level 3 [Member] | Fair Value [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Carrying Value, Other investments | 1,018,000 | |||
Fair Value, Loans, net | 83,525,000 | 97,913,000 | ||
Fair Value, Investment in joint venture | 870,000 | 882,000 | ||
Fair Value, Accrued interest receivable | 477,000 | 507,000 | ||
Fair Value, Term-debt | 31,489,000 | |||
Fair Value, Line of credit | 3,026,000 | 2,000,000 | ||
Fair Value, Other secured borrowings | 7,000 | 18,000 | ||
Fair Value, Notes payable | 78,330,000 | 76,871,000 | ||
Fair Value, Other financial liabilities | $ 462,000 | $ 455,000 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Fair Value Measured on a Nonrecurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
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) | 5,259 | 5,815 |
Investment in joint venture | 870 | 884 |
Other investments | 1,018 | |
Foreclosed assets (net of allowance) | 301 | 301 |
Total | 7,448 | 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) | 5,259 | 5,815 |
Investment in joint venture | 870 | 884 |
Other investments | 1,018 | |
Foreclosed assets (net of allowance) | 301 | 301 |
Total | $ 7,448 | $ 7,000 |
Fair Value Measurements - Sch_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, 2022 USD ($) item | Dec. 31, 2021 USD ($) item | Dec. 31, 2015 USD ($) |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Investments in joint venture | $ 870 | $ 882 | $ 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 | 5,259 | 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 | $ 870 | $ 884 | |
Investment in joint venture, measurement input | item | 0 | 0 | |
Significant Unobservable Inputs Level 3 [Member] | Other Investments [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Other investments | $ 1,018 | ||
Other investments, measurement input | 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 | item | 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, measurement input | item | 0.21 | 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, measurement 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, measurement input | 0.28 | 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 | item | 0 | 0 | |
Weighted Average [Member] | Significant Unobservable Inputs Level 3 [Member] | Other Investments [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Other investments, measurement input | 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 | item | 0.06 | 0.06 |
Fair Value Measurements - other
Fair Value Measurements - other investments (Details) - Other Investments [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Purchase of other investments | $ 1,000 |
Realized income on other investments | $ 18 |
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Investment Banking Revenue |
Ending Balance | $ 1,018 |
Income Taxes and State LLC Fe_2
Income Taxes and State LLC Fees - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Line Items] | ||
Operating loss carryforward expiration | Dec. 31, 2032 | |
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 | $ 432,000 | $ 422,000 |
Valuation allowance, percentage | 100% | 100% |
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, 2022 segment | |
Segment Information [Abstract] | |
Number of segments | 2 |
Segment Information - Schedule
Segment Information - Schedule of Financial Information by Reportable Segments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | ||
Total non-interest expense and provision for tax | $ 5,727 | $ 4,941 |
Net profit | 627 | 1,850 |
Total assets | 99,363 | 127,965 |
External Sources [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 9,427 | 10,641 |
Adjustments/Eliminations [Member] | ||
Segment Reporting Information [Line Items] | ||
Net profit | (17) | (350) |
Total assets | (136) | (293) |
Adjustments/Eliminations [Member] | Internal Sources [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | (1,193) | (1,437) |
Finance Company [Member] | Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Total non-interest expense and provision for tax | 4,125 | 3,605 |
Net profit | 188 | 1,108 |
Total assets | 94,523 | 123,753 |
Finance Company [Member] | Operating Segments [Member] | External Sources [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 8,562 | 9,651 |
Broker Dealer [Member] | Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Total non-interest expense and provision for tax | 1,598 | 1,334 |
Net profit | 395 | 900 |
Total assets | 4,553 | 3,946 |
Broker Dealer [Member] | Operating Segments [Member] | External Sources [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 865 | 990 |
Broker Dealer [Member] | Operating Segments [Member] | Internal Sources [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 1,128 | 1,244 |
Other Segments [Member] | Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Total non-interest expense and provision for tax | 4 | 2 |
Net profit | 61 | 192 |
Total assets | 423 | 559 |
Other Segments [Member] | Operating Segments [Member] | Internal Sources [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | $ 65 | $ 193 |
Condensed Financial Statement_3
Condensed Financial Statements of Parent Company - Schedule of Parent Company Balance Sheets (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Assets: | |||
Cash and cash equivalents | $ 9,504,000 | $ 28,080,000 | |
Certificates of deposit | 1,250,000 | ||
Loans receivable, net of allowance for loan losses of $1,551 and $1,638 as of December 31, 2022 and 2021, respectively | 85,076,000 | 97,243,000 | |
Other assets | 544,000 | 541,000 | |
Total assets | 99,363,000 | 127,965,000 | |
Liabilities: | |||
Notes payable, net of debt issuance costs of $58 and $88 as of December 31, 2022 and 2021, respectively | 79,100,000 | 76,732,000 | |
Other liabilities | 2,349,000 | 1,704,000 | |
Total liabilities | 84,737,000 | 113,454,000 | |
Equity | 14,626,000 | 14,511,000 | $ 12,908,000 |
Total liabilities and members' equity | 99,363,000 | 127,965,000 | |
Ministry [Member] | |||
Assets: | |||
Cash and cash equivalents | 5,875,000 | 24,030,000 | |
Certificates of deposit | 1,250 | ||
Loans receivable, net of allowance for loan losses of $1,551 and $1,638 as of December 31, 2022 and 2021, respectively | 85,076,000 | 97,243,000 | |
Investments in subsidiaries | 3,084,000 | 2,645,000 | |
Other assets | 2,922,000 | 3,045,000 | |
Total assets | 98,207,000 | 126,963,000 | |
Liabilities: | |||
Other borrowings | 3,007,000 | 34,766,000 | |
Notes payable, net of debt issuance costs of $58 and $88 as of December 31, 2022 and 2021, respectively | 78,441,000 | 76,025,000 | |
Other liabilities | 2,133,000 | 1,661,000 | |
Total liabilities | 83,581,000 | 112,452,000 | |
Equity | 14,626,000 | 14,511,000 | |
Total liabilities and members' equity | $ 98,207,000 | $ 126,963,000 |
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, 2022 | Dec. 31, 2021 | |
Income: | ||
Interest Income | $ 5,835 | $ 7,041 |
Other income | 3,592 | 3,600 |
Interest expense: | ||
Term debt | 387 | 1,007 |
Notes payable | 2,982 | 2,721 |
Total interest expense | 3,369 | 3,728 |
Provision for loan losses | (296) | 122 |
Other operating expenses | 131 | 98 |
Income before provision for income taxes and state LLC fees | 647 | 1,870 |
Provision for income taxes and state LLC fees | 20 | 20 |
Net income | 627 | 1,850 |
Ministry [Member] | ||
Income: | ||
Interest Income | 5,825 | 7,040 |
Other income | 2,737 | 2,566 |
Total income | 8,562 | 9,606 |
Interest expense: | ||
Term debt | 387 | 1,007 |
Notes payable | 4,158 | 3,808 |
Total interest expense | 4,545 | 4,815 |
Provision for loan losses | (296) | 122 |
Other operating expenses | 4,112 | 3,548 |
Income before provision for income taxes and state LLC fees | 201 | 1,121 |
Provision for income taxes and state LLC fees | 13 | 13 |
Income before equity in undistributed net income of subsidiaries | 188 | 1,108 |
Equity in undistributed net income of subsidiaries | 439 | 742 |
Net income | $ 627 | $ 1,850 |
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, 2022 | Dec. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 627 | $ 1,850 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 44 | 48 |
Amortization of deferred loan fees | (127) | (231) |
Amortization of debt issuance costs | 100 | 64 |
Provision (credit) for loan losses | (296) | 122 |
Accretion of loan discount | (20) | (26) |
Gain on sale of loans | (13) | (64) |
Gain on sale of foreclosed assets | (44) | |
Gain on debt extinguishment | (2,537) | (2,398) |
Changes in: | ||
Other assets | 75 | 407 |
Other liabilities | 667 | (461) |
Net cash used by operating activities | (1,440) | (501) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Loan purchases | (2,760) | (842) |
Loan originations | (4,267) | (14,319) |
Loan sales | 3,716 | 14,053 |
Loan principal collections | 15,915 | 20,104 |
Redemption (purchase) of certificates of deposit | (1,250) | 1,761 |
Sale of foreclosed assets | 44 | |
Purchase of property and equipment | (12) | (1) |
Net cash provided by investing activities | 10,342 | 20,800 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Change in term-debt | (30,212) | (16,369) |
Borrowings, net of repayments on lines of credit | 1,000 | 2,000 |
Net change in secured borrowings | (10) | 17 |
Net change in notes payable | 2,338 | 593 |
Debt issuance costs | (70) | (119) |
Dividends paid on preferred units | (533) | (245) |
Net cash used by financing activities | (27,487) | (14,123) |
Net increase (decrease) in cash and restricted cash | (18,585) | 6,176 |
Cash, cash equivalents, and restricted cash at beginning of period | 28,149 | 21,973 |
Cash, cash equivalents, and restricted cash at end of period | 9,564 | 28,149 |
Supplemental disclosures of cash flow information | ||
Interest paid | 3,341 | 3,788 |
Income taxes paid | 20 | 20 |
Dividends declared to preferred unit holders | 182 | 203 |
Lease liabilities recorded | 101 | |
Leased assets obtained in exchange of new operating lease liabilities | 106 | |
Ministry [Member] | ||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | 627 | 1,850 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Equity in undistributed net income of subsidiaries | (439) | (742) |
Depreciation | 43 | 47 |
Amortization of deferred loan fees | (127) | (231) |
Amortization of debt issuance costs | 651 | 616 |
Provision (credit) for loan losses | (296) | 122 |
Accretion of loan discount | (20) | (27) |
Gain on sale of loans | (13) | (64) |
Gain on sale of foreclosed assets | (44) | |
Gain on debt extinguishment | (2,537) | (2,287) |
Changes in: | ||
Other assets | 110 | 689 |
Other liabilities | 493 | (275) |
Net cash used by operating activities | (1,508) | (346) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Loan purchases | (2,760) | (842) |
Loan originations | (4,267) | (14,319) |
Loan sales | 3,716 | 14,053 |
Loan principal collections | 15,915 | 20,105 |
Redemption (purchase) of certificates of deposit | (1,250) | 1,761 |
Foreclosed property sales | 44 | |
Purchase of property and equipment | (11) | (1) |
Net cash provided by investing activities | 11,343 | 20,801 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Change in term-debt | (30,212) | (16,370) |
Borrowings, net of repayments on lines of credit | 1,000 | 2,000 |
Net change in secured borrowings | (10) | 17 |
Net change in notes payable | 2,338 | 593 |
Debt issuance costs | (573) | (828) |
Dividends paid on preferred units | (533) | (245) |
Net cash used by financing activities | (27,990) | (14,833) |
Net increase (decrease) in cash and restricted cash | (18,155) | 5,622 |
Cash, cash equivalents, and restricted cash at beginning of period | 24,030 | 18,408 |
Cash, cash equivalents, and restricted cash at end of period | 5,875 | 24,030 |
Supplemental disclosures of cash flow information | ||
Interest paid | 3,341 | 3,788 |
Income taxes paid | 20 | 20 |
Dividends declared to preferred unit holders | 182 | $ 203 |
Lease liabilities recorded | 17 | |
Leased assets obtained in exchange of new operating lease liabilities | $ 22 |
Subsequent Events - Narrative (
Subsequent Events - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Subsequent Events [Abstract] | ||
Gain on debt extinguishment | $ 2,537 | $ 2,398 |
Prepayment of long-term debt | $ 30,212 | $ 16,369 |