Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 30, 2023 shares | |
Document And Entity Information [Abstract] | |
Entity Registrant Name | MINISTRY PARTNERS INVESTMENT COMPANY, LLC |
Entity Central Index Key | 0000944130 |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Transition Report | false |
Entity File Number | 333-4028-LA |
Document Period End Date | Jun. 30, 2023 |
Document Fiscal Year Focus | 2023 |
Document Fiscal Period Focus | Q2 |
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 Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 146,522 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Assets: | ||
Cash and cash equivalents | $ 13,271 | $ 9,504 |
Restricted cash | 1,758 | 60 |
Certificates of deposit | 1,250 | 1,250 |
Loans receivable, net of allowance for loan losses of $1,512 and $1,551 as of June 30, 2023 and December 31, 2022, respectively | 90,467 | 85,076 |
Accrued interest receivable | 406 | 477 |
Investment in joint venture | 883 | 870 |
Other investments | 1,049 | 1,018 |
Property and equipment, net | 119 | 140 |
Foreclosed assets, net | 301 | 301 |
Servicing assets | 121 | 123 |
Other assets | 570 | 544 |
Total assets | 110,195 | 99,363 |
Liabilities: | ||
Lines of credit | 3,000 | |
Other secured borrowings | 7 | 7 |
Debt securities payable, net of debt issuance costs of $47 and $58 as of June 30, 2023 and December 31, 2022, respectively | 93,033 | 79,100 |
Accrued interest payable | 362 | 281 |
Other liabilities | 1,797 | 2,349 |
Total liabilities | 95,199 | 84,737 |
Members' Equity: | ||
Series A preferred units, 1,000,000 units authorized, 117,100 units issued and outstanding at June 30, 2023 and December 31, 2022 (liquidation preference of $100 per unit); See Note 13 | 11,715 | 11,715 |
Class A common units, 1,000,000 units authorized, 146,522 units issued and outstanding at June 30, 2023 and December 31, 2022; See Note 13 | 1,509 | 1,509 |
Net assets of Ministry Partners for Christ, with donor restrictions | 1,700 | |
Accumulated earnings | 72 | 1,402 |
Total members' equity | 14,996 | 14,626 |
Total liabilities and members' equity | $ 110,195 | $ 99,363 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Consolidated Balance Sheets | ||
Allowance for loan losses | $ 1,512 | $ 1,551 |
Notes payable, debt issuance costs | $ 47 | $ 58 |
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 | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Interest income: | ||||
Interest on loans | $ 1,373 | $ 1,394 | $ 2,670 | $ 2,915 |
Interest on interest-bearing accounts | 173 | 11 | 261 | 15 |
Total interest income | 1,546 | 1,405 | 2,931 | 2,930 |
Interest expense: | ||||
Debt securities payable | 1,080 | 699 | 1,940 | 1,421 |
Other debt | 1 | 112 | 59 | 251 |
Total interest expense | 1,081 | 811 | 1,999 | 1,672 |
Net interest income | 465 | 594 | 932 | 1,258 |
Provision (credit) for loan losses | 11 | 24 | (151) | (63) |
Net interest income after provision (credit) for loan losses | 454 | 570 | 1,083 | 1,321 |
Non-interest income: | ||||
Broker-dealer commissions and fees | 138 | 217 | 353 | 516 |
Other income | 86 | 59 | 149 | 94 |
Gain on debt extinguishment | 300 | 1,800 | ||
Charitable contributions, with donor restrictions | 1,300 | 1,700 | ||
Total non-interest income | 1,524 | 576 | 2,202 | 2,410 |
Non-interest expenses: | ||||
Salaries and benefits | 567 | 678 | 1,329 | 2,180 |
Marketing and promotion | 19 | 21 | 46 | 114 |
Office occupancy | 47 | 45 | 94 | 88 |
Office operations and other expenses | 370 | 299 | 782 | 746 |
Foreclosed assets, net | 5 | 4 | 9 | 9 |
Legal and accounting | 70 | 65 | 188 | 199 |
Total non-interest expenses | 1,078 | 1,112 | 2,448 | 3,336 |
Income before provision for income taxes | 900 | 34 | 837 | 395 |
Provision for income taxes and state LLC fees | 5 | 5 | 10 | 10 |
Net income | $ 895 | $ 29 | $ 827 | $ 385 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 827 | $ 385 |
Adjustments to reconcile net income to net cash provided (used) by operating activities: | ||
Depreciation | 21 | 22 |
Amortization of deferred loan fees | (27) | (75) |
Amortization of debt issuance costs | 75 | 54 |
Credit for loan losses | (151) | (63) |
Accretion of loan discount | (7) | (12) |
Gain on sale of loans | (14) | (3) |
Gain on extinguishment of debt | (1,800) | |
Gain on other investments | (31) | (15) |
Adoption of new accounting standard | (112) | |
Changes in: | ||
Accrued interest receivable | 71 | 23 |
Other assets | (20) | (163) |
Accrued interest payable | 82 | (25) |
Other liabilities | (555) | 375 |
Net cash provided (used) by operating activities | 159 | (1,297) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Loan purchases | (6,031) | (405) |
Loan originations | (2,691) | (2,448) |
Loan sales | 502 | 1,216 |
Loan principal collections | 3,010 | 10,869 |
Purchase of other investments | (1,000) | |
Purchase of property and equipment | (2) | |
Net cash provided (used) by investing activities | (5,210) | 8,230 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Principal payments on term debt | (20,490) | |
Repayments on lines of credit | (3,000) | |
Net change in secured borrowings | (2) | |
Net change in investor notes payable | 13,922 | (2,730) |
Debt issuance costs | (64) | (38) |
Dividends paid on preferred units | (342) | (271) |
Net cash provided (used) by financing activities | 10,516 | (23,531) |
Net increase (decrease) in cash and restricted cash | 5,465 | (16,598) |
Cash, cash equivalents, and restricted cash at beginning of period | 9,564 | 28,149 |
Cash, cash equivalents, and restricted cash at end of period | 15,029 | 11,551 |
Supplemental disclosures of cash flow information | ||
Interest paid | 1,918 | 1,697 |
Income taxes paid | 8 | 20 |
Supplemental disclosures of non-cash transactions | ||
Servicing assets recorded | 18 | 3 |
Leased assets obtained in exchange of new operating lease liabilities | 106 | |
Lease liabilities recorded | 101 | |
Dividends declared to preferred unit holders | $ 184 | $ 113 |
Nature of Business and Summary
Nature of Business and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
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 The accounting and financial reporting policies of MINISTRY PARTNERS INVESTMENT COMPANY, LLC (the “ Company Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The results of operations for the periods ended June 30, 2023, and 2022 are not necessarily indicative of the results for the full year. 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 Christian 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 ”). MPC is a not-for-profit corporation formed and organized under Delaware law. MPC makes charitable grants to Christian educational organizations, and provides accounting, consulting, and financial expertise to aid 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. While the pandemic has ended, we cannot know at this time if there will be any negative long-term effects to in-person attendance and giving trends at faith-based organizations and churches. Negative attendance and giving trends impacting the organizations that the Company serves could have a material financial impact on the Company. In addition, Russia’s invasion of Ukraine, increasing inflation, the disruption of global supply chains, rising interest rates, and recent bank failures 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 these 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 June 30, 2023 and December 31, 2022. 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 of greater than three months as of June 30, 2023 and December 31, 2022. Use of Estimates The Company’s creation of consolidated financial statements that conform to United States Generally Accepted Accounting Principles (" GAAP ") requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates govern areas such as the allowance for credit losses and the fair value of financial instruments and foreclosed assets. Actual results could differ from these estimates. Investments in Joint Venture 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. Management determined that investment in the joint venture was not impaired as of June 30, 2023. 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 as of June 30, 2023 and 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 modifies 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 modified 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 adopted FASB Accounting Standards Update (ASU) No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments CECL In addition to implementing CECL, the Company has also continued to purchase for-profit commercial loans that possess different risk profiles and require different methods of analysis and underwriting than non-profit church and ministry commercial real estate loans. Therefore, as of January 1, 2023, the Company’s loan portfolio comprises two segments: ministry-related non-profit loans and commercial loans. The risk characteristics of the Company’s portfolio segments are as follows: Non-profit Commercial Loans For-profit Commercial Loans The Company has also altered the way it segregates its segments into classes to more accurately apply the quantitative assumptions and qualitative risk factors necessary to properly calculate the allowance under the expected credit loss methodology required by CECL. As of January 1, 2023, the Company has segregated its portfolio into the following classes: Management has segregated the loan portfolio into the following portfolio classes: Loan Class Class Description Wholly Owned First Collateral Position, Amortizing 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. This class contains only those loans that amortize based on an agreed upon contractual principal and interest payments. Wholly Owned Other Collateral Position, Amortizing 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 or that is secured by collateral other than real property. This class contains only those loans that amortize based on an agreed upon contractual principal and interest payments. 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. Wholly Owned Unsecured, Amortizing Wholly owned loans and the retained portion of loans originated by the Company and sold for which the Company does not possess an interest in collateral securing the loan. This class contains only those loans that amortize based on an agreed upon contractual principal and interest payments. These loans present higher credit risk than loans for which the Company possesses a lien due to the increased risk of loss should the loan default. Wholly Owned Other Collateral Position, Lines of Credit 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 or that is secured by collateral other than real property. This class contains only line of credit agreements. Wholly Owned Unsecured, Lines of Credit Wholly owned loans and the retained portion of loans originated by the Company and sold for which the Company does not possess an interest in collateral securing the loan. This class contains only line of credit agreements. Wholly Owned, Construction Wholly owned loans and the retained portion of loans originated by the Company and sold which have been made for the purpose of constructing real property to be used for the borrower’s ministry. These loans present different risks due to the nature of construction projects and the underlying collateral. 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 Construction Loan participations purchased in loans made for the purpose of constructing commercial real property and where the collateral securing the property comprises the construction project. These loans present different risks due to the nature of construction projects and the underlying collateral. Finally, the company segregates each class by risk rating, as loans determined to have lower credit quality present different and greater risk than those of higher credit quality. The Company’s credit quality grading system is described in detail below in the section titled “ Credit Quality Indicators Allowance for Loan Loss Evaluation The Company adopted CECL on January 1, 2023. CECL replaces the previous methodology for measuring credit losses, which involved estimated allowances for current known and inherent losses within the portfolio. The CECL methodology requires the Company to implement an expected loss model for measuring credit losses, which encompasses allowances for losses expected to be incurred over the life of the borrowings in its portfolio. The allowance for loan loss model used under CECL requires the measurement of all expected credit losses for financial assets at amortized cost, as well as certain off-balance sheet credit exposures based on historical experiences, current conditions, and reasonable and supportable forecasts. Upon the adoption of the CECL model on January 1, 2023, the Company recorded a one-time cumulative-effect adjustment to retained earnings on its consolidated balance sheet of $113 thousand. This includes a reduction in retained earnings of $112 thousand to increase the allowance for loan losses based on the additional expected credit losses in the Company’s portfolio on day one of its implementation of the standards as required by ASU 2016-13. It also includes a reduction in retained earnings of $1 thousand to establish an allowance for expected losses on unfunded commitments, which is recorded on the balance sheet in other liabilities. In accordance with FASB Accounting Standards Update (ASU) No. 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments CECL Model The CECL methodology does not prescribe any specific model for determining expected losses. Management has determined that, due to the nature of the borrowings in its portfolio and the nature of the collateral securing a significant portion of its borrowings, it would use a “probability of default” calculation as the basis for estimating expected losses. This methodology uses information about the borrower, the loan, and the collateral securing the loan to determine a borrower’s ability to meet the contractual requirements of the loan agreement. It then applies a calculated probability that the borrower will default to the estimated amount of loss the Company would incur in a default scenario. To perform this calculation, the methodology requires management to collect and analyze certain data for the loans in its portfolio including: ● the value of collateral securing the loan, as supported by third-party appraisals or other valuations; ● adjustments to the collateral value related to geographical and economic trends, and estimated costs to sell; and ● the borrower’s ability to meet its contractual obligations as determined by financial information collected regularly from borrowers. As under the previous methodology, the allowance consists of collectively reviewed and specifically reviewed components. The collectively reviewed component covers non-classified loans. All loans included in the collectively reviewed pool are subject to the probability of default calculation described above. In addition, management has determined that there are qualitative factors affecting expected credit losses for which the probability of default model cannot account. These qualitative factors represent significant issues that management considers likely to cause estimated credit losses associated with the Company’s existing portfolio to differ from the probability of default calculation. These factors are applied in varying degrees depending on a loan’s segment, class, and credit quality. Management adjusts these factors on an on-going basis, some of which include: ● changes in national, regional, and local economic and industry conditions that affect the collectability of the portfolio; ● 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 collateral, including the limitations of using commercial price indices to adjust collateral value; ● the inherent risk in borrowings with high loan-to-value figures; and ● broad trends in the Christian church industry in which the Company primarily lends. Loans that management has classified as non-performing and 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. Specifically Reviewed The Company reviews its loan portfolio monthly by examining several data points. This process includes reviewing delinquency reports, any new information related to the financial condition of its borrowers, and any new appraisal or other collateral valuation. Throughout 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. All loans in the loan portfolio are subject to impairment analysis. The Company monitors impaired loans on an ongoing basis as part of management’s loan review and work out process. Any loans that management has determined are non-performing and impaired are individually analyzed for potential losses. These loans include non-accrual loans, loans 90 days or more past due and still accruing, non-performing modified loans, and loans where the borrowers have defaulted on contractual terms of their loan agreement. ● Non-accrual loans are loans on which management has discontinued interest accruals. ● Modified 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. ● Loans that have defaulted on other contractual terms could include loans where the borrower has failed to provide required financial information, has violated a covenant, or has otherwise failed to comply with the terms of the loan agreement. 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 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. A loan modification 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 modification of a loan usually involves an interest rate reduction, 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 loan modifications if the below-market terms represent a concession due to the borrower’s troubled financial condition. The Company classifies loan modifications as impaired loans. For the loans that are not considered to be collateral-dependent, management measures loan modifications at the present value of estimated future cash flows using the loan’s effective rate prior to the loan’s initial modification. The Company reports the change in the present value of cash flows related to the passage of time as interest income. If management considers the loan 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 loan modification. However, loan modifications, 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 classified as impaired loans but not necessarily as non-accrual or collateral-dependent loans. Modified loans can be included in the collectively reviewed pool of loans if they return to performing status. 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. Management must report loans graded Watch to executive management and the Board of Managers. The 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: Management considers loans and other credit extensions bearing this grade to be inadequately protected by the current net 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 a 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"). Refer to the discussion in “Loans Receivable” above to understand the Company’s recognition of 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 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 maturi |
Pledged Cash and Restricted Cas
Pledged Cash and Restricted Cash | 6 Months Ended |
Jun. 30, 2023 | |
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 can pledge cash as collateral for its borrowings. On June 30, 2023 and December 31, 2022, the Company had cash of $7 thousand pledged as collateral for its secured borrowings. See “Note 3: Related Party Transactions” 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): June 30, December 31, 2023 2022 2022 Cash and cash equivalents $ 13,271 $ 11,485 $ 9,504 Restricted cash 1,758 66 60 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 15,029 $ 11,551 $ 9,564 Restricted cash includes $1.7 million donated to MPC as permanently restricted funds under a designated fund agreement. The agreement allows for limited annual distributions of the funds. Other amounts included in restricted cash represent those required to be set aside in the CRD account with Financial Industry Regulation Authority (“ FINRA |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 3: Related Party Transactions Transactions with Equity Owners Transactions with AdelFi Credit Union, a California state chartered 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): June 30, December 31, 2023 2022 Total funds held on deposit at AdelFi $ 3,396 $ 443 Loan participations purchased from and serviced by AdelFi 67 68 Related party transactions of the Company (dollars in thousands): Three months ended Six months ended June 30, June 30, 2023 2022 2023 2022 Number of loans purchased from AdelFi 1 — 1 — Amount of loans purchased from AdelFi $ 1,264 $ — $ 1,264 $ — Interest earned on funds held with AdelFi* 25 — 26 — Interest income earned on loans purchased from AdelFi 10 1 11 3 Fees paid to AdelFi from MP Securities Networking Agreement 2 2 4 4 Rent expense on lease agreement with AdelFi 36 36 73 73 *Note: Interest income earned in 2022 on loans purchased from AdelFi arose from loans purchased in years prior to 2022. Loan participation interests purchased: The tables above show the number of loans purchased from Adelfi and the balance of loans serviced by Adelfi. For these loans management negotiated the pass-through interest rates on a loan-by-loan basis and believes these negotiated terms were equivalent to those that would prevail in an arm’s length transaction. Lease and Services Agreement: The Company entered into an agreement to lease its corporate offices and obtain other facility-related services from AdelFi. Management believes the terms of the agreement are equivalent to those that prevail in arm’s length transactions. In 2023, AdelFi sold its interest in the offices to a third party, who assumed the obligations of the lease agreement. MP Securities Networking Agreement with AdelFi: MP Securities 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 FINRA. The agreement provides that MP Securities will 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. Transactions with America’s Christian Credit Union, a California state chartered 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): June 30, December 31, 2023 2022 Total funds held on deposit at ACCU $ 172 $ 246 Dollar amount of outstanding loan participations sold to ACCU and serviced by the Company 952 964 Amount owed on ACCU secured borrowings 7 7 Amount owed on ACCU line of credit — 3,000 Loans pledged on ACCU line of credit 6,720 6,823 Related party transactions of the Company (dollars in thousands): Three months ended Six months ended June 30, June 30, 2023 2022 2023 2022 Interest earned on funds held with ACCU $ — $ 3 $ 1 $ 7 Dollar amount of secured borrowings made from ACCU 1 — — 7 Interest expense on ACCU borrowings 1 20 59 40 Income from broker services provided to ACCU by MPS 7 10 14 23 Fees paid based on MP Securities Networking Agreement with ACCU 10 12 46 52 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 deposited 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 June 30, 2023 and December 31, 2022 $7 thousand in participation interests had been sold and were outstanding under this agreement. These have been classified as secured borrowings on our balance sheet. 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 provides that MP Securities will 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 “Note 10: Credit Facilities and Other Debt” Transactions with Kane County Teachers Credit Union (“KCT”) Our Board Chairperson, R. Michael Lee, serves as the Chief Executive Officer and President of KCT, an Illinois state chartered financial institution. Related party balances pertaining to the assets of the Company (dollars in thousands): June 30, December 31, 2023 2022 Total funds held on deposit at KCT $ 1,281 $ 1,261 Loans pledged on KCT lines of credit 10,771 10,962 Certificates of deposit pledged on KCT Warehouse LOC 1,250 1,250 Outstanding loan participations sold to KCT and serviced by the Company 3,425 3,455 Related party transactions of the Company (dollars in thousands): Three months ended Six months ended June 30, June 30, 2023 2022 2023 2022 Interest earned on funds held with KCT $ 10 $ — $ 20 $ — Loans sold to KCT — 56 7 56 Dollar amount of draws on KCT line of credit — — — 2,000 Interest expense on KCT line of credit — — — 15 Fees paid based on MP Securities Networking Agreement with KCT 11 3 20 44 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, 2024, and carries an interest rate of 2.85%. This certificate is pledged as a compensating balance deposit on one of the lines of credit the Company holds with KCT. Lines of credit: On June 6, 2022, the Company terminated the existing $7.0 million Loan and Security Agreement with KCT. 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”). “Note 10: Credit Facilities and Other Debt” 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 NCUA rules and regulations; and (4) comply with its membership agreement with FINRA. The agreement provides that MP Securities 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 charges KCT a customary fee for servicing the loan. As of June 30, 2023 and December 31, 2022, respectively, the Company serviced $3.4 million and $3.5 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 (dollars in thousands): June 30, December 31, 2023 2022 Outstanding loan participations sold to NFCU and serviced by the Company $ 4,809 $ 4,872 Outstanding notes payable to officers and managers 2,628 2,266 Loan Participation Interests 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 to those that prevail in arm’s length transactions for similar agreements entered into by other credit unions. 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. Debt securities Sold From time to time, the Company’s Board and members of its executive management team have purchased debt securities from the Company or have purchased investment products through MP Securities. Debt securities payable owned by related parties totaled $2.6 million and $2.3 million as of June 30, 2023 and December 31, 2022, respectively. 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 has also 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 debt securities 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 | 6 Months Ended |
Jun. 30, 2023 | |
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 comprises two segments, Non-profit commercial loans to Christian churches and ministries, and for-profit commercial loans. See “Note 1 – Loan Portfolio Segments and Classes” to Part I “Financial Information” ● wholly owned amortizing loans for which the Company possesses the first collateral position; ● wholly owned amortizing loans for which the Company possesses security other than a first collateral position on real property; ● wholly owned amortizing loans that are unsecured; ● wholly owned lines of credit for which the Company possesses security other than a first collateral position on real property; ● wholly owned lines of credit that are unsecured; ● wholly owned construction loans ● participated amortizing loans purchased for which the Company possesses the first collateral position; and ● participated construction loans purchased. Prior to January 1, 2023, the Company’s loan portfolio comprised one segment – commercial loans – and four classes. Prior period data has been reclassified in the following tables to conform to current period presentation. The Company primarily originates or purchases participations in loans that are made to Christian non-profit organizations and churches. The purpose of these loans is to purchase, construct, or improve facilities. Occasionally the company purchases for-profit commercial loans to meet the Company’s revenue and yield goals, as well as to diversify the Company’s loan portfolio. Maturities on the loan portfolio extend through 2038. The loan portfolio had weighted average interest rate of 6.38% and 6.46% as of June 30, 2023 and December 31, 2022, respectively. The table below is a summary of the Company’s mortgage loans owned (dollars in thousands): June 30, December 31, 2023 2022 Non-profit commercial loans: Real estate secured $ 88,155 $ 84,878 Other secured — 225 Unsecured 87 99 Total non-profit commercial loans: 88,242 85,202 For-profit commercial loans: Real estate secured 4,138 1,840 Total loans 92,380 87,042 Deferred loan fees, net (198) (208) Loan discount (203) (207) Allowance for loan losses (1,512) (1,551) Loans, net $ 90,467 $ 85,076 Allowance for Loan Losses Management believes it has properly calculated the allowance for loan losses using CECL methodology as of June 30, 2023. Management also believes that the allowance for loan losses was properly calculated as of December 31, 2022, using previously accepted methodology. Upon the adoption of the CECL model on January 1, 2023, the Company recorded a one-time cumulative-effect adjustment to retained earnings on its consolidated balance sheet of $113 thousand. This includes a reduction in retained earnings of $112 thousand to increase the allowance for loan losses based on the additional expected credit losses in the Company’s portfolio on day one of its implementation of the expected loss methodology required by ASU 2016-13. The following table shows the changes in the allowance for loan losses for the six months ended June 30, 2023 and the year ended December 31, 2022 (dollars in thousands): Six months ended June 30, 2023 Segment: Non-profit Commercial For-profit Commercial Total Balance, beginning of period $ 1,530 $ 21 $ 1,551 Adjustment related to implementation of CECL model 128 (16) 112 Provision (credit) for loan loss (159) 8 (151) Charge-offs — — — Recoveries — — — Balance, end of period $ 1,499 $ 13 $ 1,512 Year ended December 31, 2022 Segment: Commercial loans Balance, beginning of period $ 1,638 for loan loss (296) Charge-offs — Recoveries 209 Balance, end of period $ 1,551 In the course of its lending operations, the Company has made loans that include commitments to fund additional amounts over the remaining term of the loan. These include construction loans and lines of credit, both revolving and non-revolving. The Company has established an allowance for losses on these unfunded commitments. See "Note 12: Commitments and Contingencies" The table below presents loans by portfolio segment 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 June 30, 2023 December 31, 2022 Non-profit Commercial Loans: Individually evaluated for impairment $ 11,648 $ 5,933 Collectively evaluated for impairment 76,594 79,269 Total Non-profit Commercial Loans 88,242 85,202 For-profit Commercial Loans: Individually evaluated for impairment — — Collectively evaluated for impairment 4,138 1,840 Total For-profit Commercial Loans 4,138 1,840 Balance $ 92,380 $ 87,042 Allowance for loan losses: Non-profit Commercial Loans: Individually evaluated for impairment $ 616 $ 597 Collectively evaluated for impairment 883 933 Total Non-profit Commercial Loan Allowance 1,499 1,530 For-profit Commercial Loans: Individually evaluated for impairment — — Collectively evaluated for impairment 13 21 Total For-profit Commercial Loan Allowance 13 21 Balance $ 1,512 $ 1,551 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 June 30, 2023 Pass Watch Special Mention Substandard Doubtful Loss Total Non-profit Commercial Loans Wholly Owned First Amortizing $ 45,715 $ 28,012 $ — $ 9,889 $ 213 $ — $ 83,829 Wholly Owned Other Amortizing 1,425 — — 1,546 — — 2,971 Wholly Owned Unsecured Amortizing 28 29 — — — — 57 Wholly Owned Unsecured LOC 58 — — — — — 58 Participation First 1,327 — — — — — 1,327 Total Non-profit Commercial Loans 48,553 28,041 — 11,435 213 — 88,242 For-profit Commercial Loans — Participation First 1,785 — — — — — 1,785 Participation Construction 2,353 — — — — — 2,353 Total For-profit Commercial Loans 4,138 — — — — — 4,138 Total Loans $ 52,691 $ 28,041 $ — $ 11,435 $ 213 $ — $ 92,380 Credit Quality Indicators (by class) As of December 31, 2022 Pass Watch Special Mention Substandard Doubtful Loss Total Non-profit Commercial Loans Wholly Owned First Amortizing $ 45,189 $ 32,080 $ — $ 5,430 $ 503 $ — $ 83,202 Wholly Owned Other Amortizing 1,448 — — — — — 1,448 Wholly Owned Unsecured Amortizing — 29 — — — — 29 Wholly Owned Unsecured LOC 295 — — — — — 295 Wholly Owned Construction 160 — — — — — 160 Participation First — 68 — — — — 68 Total Non-profit Commercial Loans 47,092 32,177 — 5,430 503 — 85,202 For-profit Commercial Loans — Participation First 1,035 — — — — — 1,035 Participation Construction 805 — — — — — 805 Total For-profit Commercial Loans 1,840 — — — — — 1,840 Total Loans $ 48,932 $ 32,177 $ — $ 5,430 $ 503 $ — $ 87,042 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 June 30, 2023 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 Still Accruing Non-profit Commercial Loans Wholly Owned First Amortizing $ 5,334 $ 6,063 $ 1,088 $ 12,485 $ 71,344 $ 83,829 $ — Wholly Owned Other Amortizing — — — — 2,971 2,971 — Wholly Owned Unsecured Amortizing — — — — 57 57 — Wholly Owned Unsecured LOC — — — — 58 58 — Participation First 67 — — 67 1,260 1,327 — Total Non-profit Commercial Loans 5,401 6,063 1,088 12,552 75,690 88,242 — For-profit Commercial Loans Participation First — — — — 1,785 1,785 — Participation Construction — — — — 2,353 2,353 — Total For-profit Commercial Loans — — — — 4,138 4,138 — Total Loans $ 5,401 $ 6,063 $ 1,088 $ 12,552 $ 79,828 $ 92,380 $ — 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 Still Accruing Non-profit Commercial Loans Wholly Owned First Amortizing $ 6,068 $ — $ 1,378 $ 7,446 $ 75,756 $ 83,202 $ — Wholly Owned Other Amortizing — — — — 1,448 1,448 — Wholly Owned Unsecured Amortizing — — — — 29 29 — Wholly Owned Unsecured LOC — — — — 295 295 — Wholly Owned Construction — — — — 160 160 — Participation First — — — — 68 68 — Total Non-profit Commercial Loans 6,068 — 1,378 7,446 77,756 85,202 — For-profit Commercial Loans Participation First — — — — 1,035 1,035 — Participation Construction — — — — 805 805 — Total For-profit Commercial Loans — — — — 1,840 1,840 — Total Loans $ 6,068 $ — $ 1,378 $ 7,446 $ 79,596 $ 87,042 $ — Impaired Loans The following tables are summaries of impaired loans by loan class. The unpaid principal balance reflects the contractual principal outstanding on the loan. Included in the balance of impaired loans are loan modifications that performed according to contractual terms and that the Company has upgraded to pass or watch since the date of the modification. The recorded investment reflects the unpaid principal balance less any interest payments that management has recorded against principal and less discounts taken. No loans in the Company’s commercial loan segment were classified as impaired, non-accrual, or loan modifications as of June 30, 2023. The tables below represent the breakdown by class of the non-profit loan portfolio segment only (dollars in thousands): As of As of June 30, December 31, Impaired Non-profit commercial Loans (by class) 2023 2022 Wholly Owned First Amortizing Recorded investment with specific allowance $ 3,080 $ 15,569 Recorded with no specific allowance 20,808 4,598 Total recorded investment $ 23,888 $ 20,167 Unpaid principal balance $ 24,253 $ 20,419 Wholly Owned Other Amortizing Recorded investment with specific allowance $ 1,546 $ — Recorded with no specific allowance — — Total recorded investment $ 1,546 $ — Unpaid principal balance $ 1,685 $ — Total Impaired Loans Recorded investment with specific allowance $ 4,626 $ 15,569 Recorded with no specific allowance 20,808 4,598 Total recorded investment $ 25,434 $ 20,167 Unpaid principal balance $ 25,938 $ 20,419 For the three months ended For the six months ended June 30, June 30, June 30, June 30, Impaired Non-profit Commercial Loans (by class) 2023 2022 2023 2022 Wholly Owned First Amortizing Average recorded investment $ 24,793 $ 13,173 $ 22,028 $ 11,540 Interest income recognized 439 161 737 331 Wholly Owned Other Amortizing Average recorded investment 1,568 1,635 773 1,635 Interest income recognized — — — — Total Impaired Loans Average recorded investment $ 26,361 $ 14,808 $ 22,801 $ 13,175 Interest income recognized 439 161 737 331 A summary of nonaccrual loans by loan class is as follows (dollars in thousands): Loans on Nonaccrual Status (by class) as of June 30, 2023 December 31, 2022 Non-profit Commercial Loans: Wholly Owned First Amortizing $ 10,102 $ 5,933 Wholly Owned Other Amortizing 1,546 — Total $ 11,648 $ 5,933 The Company modified two loans during the three-month period ended June 30, 2023. A summary of loans the Company modified during the three- and six-month periods ended June 30, 2023 and 2022 is as follows (dollars in thousands): Loan modifications (by class) For the three months ended For the six months ended June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Non-profit Commercial Loans: Wholly Owned First Amortizing Number of Loans 2 1 2 2 Pre-Modification Outstanding Recorded Investment $ 6,253 $ 1,196 $ 6,253 $ 2,192 Post-Modification Outstanding Recorded Investment 6,253 1,196 6,253 2,192 Recorded Investment At Period End 6,247 1,196 6,247 2,192 Total Number of Loans 2 1 2 2 Pre-Modification Outstanding Recorded Investment $ 6,253 $ 1,196 $ 6,253 $ 2,192 Post-Modification Outstanding Recorded Investment 6,253 1,196 6,253 2,192 Recorded Investment At Period End 6,247 1,196 6,247 2,192 One of the non-profit commercial loans the Company modified during the three months ended June 30, 2023 subsequently defaulted during the period. The recorded investment in this loan was million as of June 30, 2023. The Company has one modified loan that is past maturity as of June 30, 2023. This loan has been completely written off as of June 30, 2023. When loans are modified, the Company monitors borrower performance according to the terms of the modifications to determine whether there are any early indicators for future default. Management regularly evaluates loan modifications for potential further impairment and will adjust the risk ratings and specific reserves associated with loan modifications as deemed necessary. As of June 30, 2023, the Company has made no commitments to advance additional funds in connection with loan modifications. |
Investments in Joint Venture
Investments in Joint Venture | 6 Months Ended |
Jun. 30, 2023 | |
Investments in Joint Venture [Abstract] | |
Investments in Joint Venture | Note 5: Investments in 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 Valencia Hills Project is a joint venture that will develop, and market property formerly classified by the Company as a foreclosed asset. In January 2016, the Company transferred ownership in the foreclosed asset to the Valencia Hills Project. In addition, the Company reclassified the carrying value of the property from foreclosed assets to an investment in a joint venture. The Company’s initial investment in the joint venture was $900 thousand and represented 100% of the ownership of the joint venture. Under the terms of the operating agreement, the members of the joint venture are entitled to receive their respective capital contributions until the balance is reduced to zero. After these payments are made, the Company is entitled to receive 30% of the profits generated by the operation of the joint venture or disposition of the property. The Company’s ownership percentage in the joint venture was 74% as of June 30, 2023 and December 31, 2022. As of June 30, 2023 and December 31, 2022, the value of the Company’s investment in the joint venture was $883 thousand. Management’s impairment analysis of the investment as of June 30, 2023, has determined that the investment is not impaired. Certificates of Deposit The Company held an investment in certificates of deposit with an original maturity greater than three months on June 30, 2023 and December 31, 2022. Details of certificates with original maturities of greater than three months owned by the Company as of June 30, 2023 and December 31, 2022, are as follows (dollars in thousands): As of June 30, 2023 Certificate Open Date Certificate Amount Interest Rate Maturity Date CD 1 9/29/2022 $ 1,250 2.85% 6/6/2024 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” 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 $31 thousand in income on these investments during the six months ended June 30, 2023. Additional information related to these investments is as follows (dollars in thousands): Income for the three months ended Income for the six months ended Investment Type Maturity Date Original Cost Net Carrying Amount June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Fixed annuity June 2032 $ 1,000 $ 1,049 $ 30 $ 15 $ 31 $ 15 |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2023 | |
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 the scope of ASC 606 are noted as such (dollars in thousands): Three months ended Six months ended June 30, June 30, 2023 2022 2023 2022 Non-interest income, in scope of ASC 606 Broker-dealer fees and commissions $ 138 $ 217 $ 353 $ 516 Gains on loan sales 7 — 14 3 Other investment income 30 15 31 15 Other non-interest income 4 — 9 — Non-interest income, out of scope, ASC 606 Lending fees 45 44 95 76 Gain on debt extinguishment — 300 — 1,800 Charitable contributions, with donor restrictions 1,300 — 1,700 — Total non-interest income $ 1,524 $ 576 $ 2,202 $ 2,410 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 securities commissions, sale of investment company shares, insurance product revenue, and advisory fee income. Securities 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 three months ended For the six months ended (dollars in thousands) June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Broker-dealer revenue Securities commissions Transactional $ 2 $ 13 $ 16 $ 102 AUM 13 12 26 23 15 25 42 125 Sale of investment company products Transactional 5 1 8 16 AUM 18 20 35 45 23 21 43 61 Other insurance product revenue Transactional 9 71 87 127 AUM 12 10 24 20 21 81 111 147 Advisory fee income Transactional — — — 3 AUM 79 90 157 180 79 90 157 183 Total broker-dealer revenue Transactional 16 85 111 248 AUM 122 132 242 268 $ 138 $ 217 $ 353 $ 516 |
Loan Sales
Loan Sales | 6 Months Ended |
Jun. 30, 2023 | |
Loan Sales [Abstract] | |
Loan Sales | Note 7: Loan Sales A summary of loan participation sales and servicing assets are as follows (dollars in thousands): As of and for the Six months ended Year ended June 30, December 31, 2023 2022 2022 Loan participation interests sold by the Company $ 502 $ 1,216 $ 3,716 Total participation interests sold and serviced by the Company 32,248 39,671 34,946 Servicing income 71 69 153 Servicing Assets Balance, beginning of period $ 123 $ 170 $ 170 Additions: Servicing obligations from sale of loan participations 18 3 19 Subtractions: Amortization (20) (45) (66) Balance, end of period $ 121 $ 128 $ 123 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 are done on a recourse basis, requiring the Company to repurchase the participation interest in the event of default by the borrower. During the six months ended June 30, 2022, the Company sold two loan participations for $7 thousand to ACCU under the provisions of the Master LP Agreement. Due to the recourse provisions of the agreement, the participation sales are classified as secured borrowings and are presented as part of other secured borrowings on the Company’s balance sheet. The Company did not sell any loan participations to ACCU under the provisions of the Master LP Agreement during the three and six months ended June 30, 2023. |
Foreclosed Assets
Foreclosed Assets | 6 Months Ended |
Jun. 30, 2023 | |
Foreclosed Assets [Abstract] | |
Foreclosed Assets | Note 8: Foreclosed Assets The Company’s investment in foreclosed assets consisted of one property that management valued at $301 thousand at June 30, 2023 and December 31, 2022. There was no allowance for losses on foreclosed assets at June 30, 2023 and December 31, 2022. The Company did not record any provision for losses on foreclosed assets during the three and six months ended June 30, 2023 and 2022. Expenses applicable to foreclosed assets include the following (dollars in thousands): For the three months ended June 30, For the six months ended June 30, Foreclosed Asset Expenses 2023 2022 2023 2022 Provision for losses $ — $ — $ — $ — Operating expenses 5 4 9 9 Total foreclosed asset expenses $ 5 $ 4 $ 9 $ 9 |
Premises and Equipment
Premises and Equipment | 6 Months Ended |
Jun. 30, 2023 | |
Premises and Equipment [Abstract] | |
Premises and Equipment | Note 9: Premises and Equipment The table below summarizes our premises and equipment (dollars in thousands): As of June 30, December 31, 2023 2022 Furniture and office equipment $ 528 $ 528 Computer system 220 220 Leasehold improvements 43 43 Total premises and equipment 791 791 Less accumulated depreciation and amortization (672) (651) Premises and equipment, net $ 119 $ 140 For the three months ended For the six months ended June 30, June 30, June 30, June 30, 2023 2022 2023 2022 Depreciation and amortization expense $ 11 $ 11 $ 21 $ 22 |
Credit Facilities and Other Deb
Credit Facilities and Other Debt | 6 Months Ended |
Jun. 30, 2023 | |
Credit Facilities and Other Debt [Abstract] | |
Credit Facilities and Other Debt | Note 10: Credit Facilities and Other Debt Details of the Company’s debt facilities as of June 30, 2023, are as follows (dollars in thousands): Nature of Borrowing Interest Rate Interest Rate Type Amount Outstanding Monthly Payment Maturity Date Amount of Loan Collateral Pledged Other Assets Pledged* KCT Warehouse LOC 8.500% Variable $ — $ — 6/6/2024 $ 5,975 $ 1,250 KCT Operating LOC 8.500% Variable — — 6/6/2024 4,797 — ACCU LOC 8.250% Variable — — 9/23/2024 6,720 — ACCU Secured Various Fixed 7 — Various — 7 *Represents cash or certificates of deposit 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, 2024. 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 June 30, 2023, the interest rate on the KCT Warehouse LOC was 8.50%. 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 $6.0 million in loans were pledged on this facility as of June 30, 2023. At June 30, 2023, 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 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 June 30, 2023, the interest rate on the KCT Warehouse LOC was 8.50%. 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 June 30, 2023. At June 30, 2023, 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. The ACCU LOC is a revolving $5.0 million short-term demand credit facility with an initial one-year maturity date of September 23, 2022. The facility was automatically renewed for an additional one-year term that matures on September 23, 2023. The ACCU LOC will automatically renew for one million at December 31, 2022. There was outstanding balance on the facility as of June 30, 2023. The interest rate on the facility is equal to the prime rate as published in the Wall Street Journal plus 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 always equals or exceeds $10.0 million 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 June 30, 2023. A total of $6.7 million in loans were pledged on this facility as of June 30, 2023 and December 31, 2022. 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 in secured borrowings were outstanding under the Master LP Agreement as of June 30, 2023 and December 31, 2022. These borrowings have various contractual maturities ranging from 2028 to 2032. |
Debt Securities Payable
Debt Securities Payable | 6 Months Ended |
Jun. 30, 2023 | |
Credit Facilities and Other Debt [Abstract] | |
Debt Securities Payable | Note 11: Debt Securities Payable The table below provides information on the Company’s debt securities payable (dollars in thousands): As of As of June 30, 2023 December 31, 2022 SEC Registered Public Offerings Offering Type Amount Weighted Average Interest Rate Amount Weighted Average Interest Rate Class 1A Offering Unsecured $ 17,867 4.26 % $ 20,698 4.27 % 2021 Class A Offering Unsecured 61,553 4.60 % 45,935 4.04 % Public Offering Total $ 79,420 4.52 % $ 66,633 4.11 % Private Offerings Offering Type Subordinated Notes Unsecured $ 13,660 4.66 % $ 12,525 4.56 % Private Offering Total $ 13,660 4.66 % $ 12,525 4.56 % Total Debt Securities Payable $ 93,080 4.54 % $ 79,158 4.19 % Future maturities for the Company’s debt securities during the twelve-month periods ending June 30, are as follows (dollars in thousands): 2024 $ 43,711 2025 14,120 2026 17,678 2027 14,168 2028 3,403 Total $ 93,080 Debt issuance costs 47 Debt securities payable, net of debt issuance costs $ 93,033 Debt issuance costs related to the Company’s debt securities payable, net of amortization, were $47 thousand and $58 thousand at June 30, 2023 and December 31, 2022, respectively. The notes are payable to investors who have purchased the securities. Notes pay interest at stated spreads over an index rate. At their option, the investor may reinvest the interest or have the interest paid to them. The Company may repurchase all or a portion of an outstanding note at any time at its sole discretion. In addition, the Company may permit an investor to redeem all or a portion of a note prior to maturity at its sole discretion. SEC Registered Public Offerings 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 but will be replaced by the Secured Overnight Financing Rate (“ SOFR Private Offerings Series 1 Subordinated Capital Notes (“Subordinated Notes”). In July 2022, the Company renewed the offer and sale of its Subordinated Notes initially launched in February 2013. The Company offers the notes pursuant to a limited private offering to qualified investors that meet the requirements of Rule 506 of Regulation D. The Company offers the Subordinated Notes with maturity terms from 12 to 60 months at an interest rate fixed on the date of issuance, as determined by the then current seven-day Under the Subordinated Notes offering, the Company is subject to certain covenants, including limitations on restricted payments, limitations on the dollar 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 as of June 30, 2023 and December 31, 2022. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2023 | |
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 un-advanced lines of credit and standby letters of credit. Such commitments involve elements of credit and interest rate risk that is greater than the amount stated on 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: June 30, 2023 December 31, 2022 Undisbursed loans $ 301 $ 355 Undisbursed loans are commitments for potential 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. Upon the adoption of CECL on January 1, 2023, the Company made an adjustment to retained earnings of $1 thousand based on its calculation of the estimated losses in its undisbursed loan commitments. This calculation includes an analysis of the risk presented by the loans on which there exist unfunded commitments as well as the probability that those funds will be disbursed. This estimate is subject to change as the commitments mature or are drawn upon. The balance of the allowance for credit losses on off-balance sheet commitments is recorded in other liabilities on the Company’s consolidated balance sheet. The following table details activity in the allowance for credit losses on off-balance sheet commitments (dollars in thousands): Six months ended Year ended June 30, 2023 December 31, 2022 Balance, beginning of period $ — $ — Adjustment related to implementation of CECL model 1 — Provision for losses on unfunded commitments — — Balance, end of period $ 1 $ — Operating Leases The Company has a lease agreement for its offices in Brea, California and a vehicle used by executive management. The Company renewed its Brea office lease in January 2019 for an additional five-year term. The lease does not contain any additional options to renew. The Company has determined that both leases are operating leases. The Company used its incremental borrowing rates to determine the discount rates used in the asset calculations. The Company’s lease agreement for its Fresno office expired in March 2022. In April 2022, the Company signed a three-year lease renewal agreement beginning May 1, 2022, and terminating April 30, 2025. The agreement does not contain any options to renew. The lease payments associated with the renewal have been included in the future minimum lease payments table below. The table below presents information regarding our existing operating leases (dollars in thousands): For the Three months ended Six months ended Year ended June 30, June 30, December 31, 2023 2022 2023 2022 2022 Lease cost Operating lease cost $ 44 $ 42 $ 88 $ 87 $ 175 Other information Cash paid for operating leases 44 46 95 96 185 Right-of-use assets obtained in exchange for operating lease liabilities — 84 — 106 106 Lease liabilities recorded — 84 — 101 101 Weighted average remaining lease term (in years) 1.02 1.91 1.02 1.91 1.46 Weighted-average discount rate 4.28 % 4.38 % 4.28 % 4.38 % 4.33 % Future minimum lease payments and lease costs for the twelve months ending June 30, are as follows (dollars in thousands): Lease Payments Lease Costs 2024 $ 113 $ 110 2025 28 28 Total $ 141 $ 138 |
Preferred and Common Units Unde
Preferred and Common Units Under LLC Structure | 6 Months Ended |
Jun. 30, 2023 | |
Preferred and Common Units Under LLC Structure [Abstract] | |
Preferred And Common Units Under LLC Structure | Note 13: Preferred and Common Units under LLC Structure Holders of the Series A Preferred Units are entitled to receive a quarterly cash 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 the Company’s 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 | 6 Months Ended |
Jun. 30, 2023 | |
Retirement Plans [Abstract] | |
Retirement Plans | Note 14: Retirement Plans 401(k) All the Company’s employees are eligible to participate in the Automated Data Processing, Inc. (“ ADP 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 August 2024, at which point the benefit will be fully vested. As of August 2022, Mr. Turner’s benefit was 70% vested and increases by 15% each August until it is fully vested. The Company’s management has determined that such a separation is unlikely to occur prior to the vesting date and had accrued the entire benefit as of June 30, 2023. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | Note 15: 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 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 of an asset or liability may fall into multiple levels of the fair value hierarchy. However, in these cases, the asset or liability is classified to only one level of the hierarchy. To determine which level of the hierarchy the asset or liability is classified as a whole, the Company uses 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 June 30, 2023 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 $ 15,029 $ 15,029 $ — $ — $ 15,029 Certificates of deposit 1,250 — 1,248 — 1,248 Loans, net 90,467 — — 87,890 87,890 Investment in joint venture 883 — — 883 883 Other investments 1,049 — — 1,049 1,049 Accrued interest receivable 406 — — 406 406 Servicing assets 121 — — 121 121 FINANCIAL LIABILITIES: Other secured borrowings 7 — — 7 7 Debt securities payable 93,033 — — 92,932 92,932 Other financial liabilities 546 — — 546 546 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 Servicing assets 123 123 123 FINANCIAL LIABILITIES: Lines of credit $ 3,000 $ — $ — $ 3,026 $ 3,026 Other secured borrowings 7 — — 7 7 Debt securities payable 79,100 — — 78,330 78,330 Other financial liabilities 462 — — 462 462 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 June 30, 2023 and December 31, 2022. The Company used the following methods and assumptions to estimate the fair value of financial instruments: Cash and restricted 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. 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 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. Accrued interest receivable - The carrying amounts reported in the balance sheets approximate fair value for accrued interest receivable. The Company has made the accounting policy election not to measure an allowance for credit losses on accrued interest receivable amounts as the Company writes off accrued interest receivable when a loan is 90 days past due or interest is otherwise considered uncollectible. Servicing assets – Servicing assets are included in other assets on the balance sheets. The carrying amounts reported in the balance sheets approximate fair value for servicing assets. Debt securities 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 rates currently offered for debt securities 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 June 30, 2023 and December 31, 2022. 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 June 30, 2023: Collateral-dependent impaired loans (net of allowance and discount) $ — $ — $ 5,495 $ 5,495 Investment in joint venture — — 883 883 Other investments — — 1,049 1,049 Foreclosed assets (net of allowance) — — 301 301 Total $ — $ — $ 7,728 $ 7,728 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 Impaired Loans The Company measures impaired loans at fair value on a nonrecurring basis. Once a loan is considered impaired, the fair value is measured using one of several methods, including collateral liquidation value, the market value of similar debt, or discounted cash flows. Most often management uses the fair value of the underlying real estate collateral to value impaired loans. Such fair values are obtained using independent appraisals, which the Company considers to be Level 3 inputs. The range of these discounts is shown in the table below. Foreclosed Assets The Company initially records real estate acquired through foreclosure or other proceedings (foreclosed assets) at fair value at the date of foreclosure 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. Management may adjust the appraised values for a range of 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 June 30, 2023 and December 31, 2022. As such, the Company has determined that the carrying value of its other investments equals its fair value at June 30, 2023 and 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): June 30, 2023 Assets Fair Value (in thousands) Valuation Techniques Unobservable Input Range (Weighted Average) Impaired Loans $ 5,495 Discounted appraised value Selling cost / Estimated market decrease 10% - 81% (18%) Investment in joint venture 883 Internal evaluations Estimated future market value 0% (0%) Other investments 1,049 Internal evaluations Indications of non-performance by insurance companies 0% (0%) Foreclosed Assets 301 Internal evaluations Selling cost 6% (6%) 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%) |
Income Taxes and State LLC Fees
Income Taxes and State LLC Fees | 6 Months Ended |
Jun. 30, 2023 | |
Income Taxes and State LLC Fees [Abstract] | |
Income Taxes and State LLC Fees | Note 16: 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 had federal and state net operating loss carryforwards of approximately $432 thousand and $422 thousand, respectively, which begin to expire in the year 2032. Management assessed the realizability of the deferred tax asset and determined that a 100% valuation against the deferred tax asset was appropriate as of June 30, 2023 and December 31, 2022. MPC is a private foundation that is subject to a federal excise tax on net investment income. It may reduce its federal excise tax rate from 2% to 1% by exceeding a certain payout target for the year. MPC’s provision for current federal excise tax is based on a 1% rate on net investment income. Each year the current federal excise tax is levied on interest and dividend income and net realized gains (if any). In addition, MPC may become subject to current federal and state unrelated business income (“ UBI 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 and various other state jurisdictions. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2023 | |
Segment Information [Abstract] | |
Segment Information | Note 17: Segment Information The Company’s reportable segments are strategic business units that each offer a unique set of products and services that differ from each other. The Company manages the segments separately because each business requires different management, personnel skills, and marketing strategies. The Company has three reportable segments that represent the primary businesses reported in the consolidated financial statements: the finance company (the parent company), the broker-dealer (MP Securities), and the charitable organization (Ministry Partners for Christ). 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 charitable organization, MPC, accepts contributions and makes charitable grants to Christian educational organizations. 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 is as follows (dollars in thousands): Three months ended Six months ended June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Revenue from external sources Finance Company* $ 1,546 $ 1,748 $ 2,962 $ 4,808 Broker-Dealer 218 233 465 532 Charitable Organization 1,306 — 1,706 — Adjustments / Eliminations — — — — Total $ 3,070 $ 1,981 $ 5,133 $ 5,340 Revenue from internal sources Finance Company $ — $ — $ — $ — Broker-Dealer 329 209 790 494 Charitable Organization — — — — Adjustments / Eliminations (329) (209) (790) (494) Total $ — $ — $ — $ — Interest expense Finance Company $ 1,467 $ 1,089 $ 2,719 $ 2,240 Broker-Dealer — — — — Charitable Organization — — — — Adjustments / Eliminations (386) (278) (720) (568) Total $ 1,081 $ 811 $ 1,999 $ 1,672 Total non-interest expense and provision for tax Finance Company $ 745 $ 801 $ 1,706 $ 2,448 Broker-Dealer 333 325 747 897 Charitable Organization 5 41 5 51 Adjustments / Eliminations — (50) — (50) Total $ 1,083 $ 1,117 $ 2,458 $ 3,346 Net profit (loss) Finance Company $ (676) $ (166) $ (1,312) $ 184 Broker-Dealer 214 118 509 130 Charitable Organization 1,301 (41) 1,701 (52) Adjustments / Eliminations 56 118 (71) 123 Total $ 895 $ 29 $ 827 $ 385 *Note: Finance Company revenue includes gains on debt extinguishment of $300 thousand for the quarter ended June 30, 2022 and $1.8 million for the six months ended June 30, 2022. June 30, December 31, 2023 2022 (Unaudited) (Audited) Total assets Finance Company $ 103,182 $ 94,523 Broker-Dealer 5,002 4,553 Charitable Organization 2,069 368 Other Segments 56 55 Adjustments / Eliminations (114) (136) Total $ 110,195 $ 99,363 |
Not-for-profit Disclosures
Not-for-profit Disclosures | 6 Months Ended |
Jun. 30, 2023 | |
Not-for-profit Disclosures | |
Not-for-profit Disclosures | Note 18: Not-for-profit Disclosures The following represent required disclosures of MPC, the Company’s wholly owned, not-for-profit organization. At June 30, 2023, and December 31, 2022, the Company had $303 thousand in cash held in a checking account available to meet general expenditure needs for the next twelve months. This does not include $1.7 million in cash that carries permanent donor restrictions. There were no board designated reserve requirements as of June 30, 2023, and December 31, 2022. Management believes the cash available for use by MPC is sufficient to cover its expenses. At June 30, 2023, MPC had $2.1 million in net assets, $1.7 million of which is permanently restricted by donors. At December 31, 2022, MPC had $368 thousand in net assets, none of which was permanently restricted by donors. A breakdown of expenses for MPC for the three- and six-month periods ended June 30, 2023 and 2022, is as follows: Three months ended Six months ended June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Expenses Charitable grants $ — $ 40 $ — $ 50 General and administrative expenses 5 1 5 1 Total $ 5 $ 41 $ 5 $ 51 The change in net assets for MPC for the three- and six-month periods ended June 30, 2023 and 2022 is as follows: Three months ended Six months ended June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Change in net assets 1,301 (41) 1,701 (52) |
Nature of Business and Summar_2
Nature of Business and Summary of Significant Accounting Policies (Policy) | 6 Months Ended |
Jun. 30, 2023 | |
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 Christian 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 ”). MPC is a not-for-profit corporation formed and organized under Delaware law. MPC makes charitable grants to Christian educational organizations, and provides accounting, consulting, and financial expertise to aid 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. While the pandemic has ended, we cannot know at this time if there will be any negative long-term effects to in-person attendance and giving trends at faith-based organizations and churches. Negative attendance and giving trends impacting the organizations that the Company serves could have a material financial impact on the Company. In addition, Russia’s invasion of Ukraine, increasing inflation, the disruption of global supply chains, rising interest rates, and recent bank failures 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 these 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 June 30, 2023 and December 31, 2022. 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 of greater than three months as of June 30, 2023 and December 31, 2022. |
Use of Estimates | Use of Estimates The Company’s creation of consolidated financial statements that conform to United States Generally Accepted Accounting Principles (" GAAP ") requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates govern areas such as the allowance for credit losses and the fair value of financial instruments and foreclosed assets. Actual results could differ from these estimates. |
Investments in Joint Venture | Investments in Joint 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. Management determined that investment in the joint venture was not impaired as of June 30, 2023. |
Other investments | 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 as of June 30, 2023 and December 31, 2022, and does not anticipate losses. |
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 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 modifies 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 modified 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 adopted FASB Accounting Standards Update (ASU) No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments CECL In addition to implementing CECL, the Company has also continued to purchase for-profit commercial loans that possess different risk profiles and require different methods of analysis and underwriting than non-profit church and ministry commercial real estate loans. Therefore, as of January 1, 2023, the Company’s loan portfolio comprises two segments: ministry-related non-profit loans and commercial loans. The risk characteristics of the Company’s portfolio segments are as follows: Non-profit Commercial Loans For-profit Commercial Loans The Company has also altered the way it segregates its segments into classes to more accurately apply the quantitative assumptions and qualitative risk factors necessary to properly calculate the allowance under the expected credit loss methodology required by CECL. As of January 1, 2023, the Company has segregated its portfolio into the following classes: Management has segregated the loan portfolio into the following portfolio classes: Loan Class Class Description Wholly Owned First Collateral Position, Amortizing 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. This class contains only those loans that amortize based on an agreed upon contractual principal and interest payments. Wholly Owned Other Collateral Position, Amortizing 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 or that is secured by collateral other than real property. This class contains only those loans that amortize based on an agreed upon contractual principal and interest payments. 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. Wholly Owned Unsecured, Amortizing Wholly owned loans and the retained portion of loans originated by the Company and sold for which the Company does not possess an interest in collateral securing the loan. This class contains only those loans that amortize based on an agreed upon contractual principal and interest payments. These loans present higher credit risk than loans for which the Company possesses a lien due to the increased risk of loss should the loan default. Wholly Owned Other Collateral Position, Lines of Credit 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 or that is secured by collateral other than real property. This class contains only line of credit agreements. Wholly Owned Unsecured, Lines of Credit Wholly owned loans and the retained portion of loans originated by the Company and sold for which the Company does not possess an interest in collateral securing the loan. This class contains only line of credit agreements. Wholly Owned, Construction Wholly owned loans and the retained portion of loans originated by the Company and sold which have been made for the purpose of constructing real property to be used for the borrower’s ministry. These loans present different risks due to the nature of construction projects and the underlying collateral. 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 Construction Loan participations purchased in loans made for the purpose of constructing commercial real property and where the collateral securing the property comprises the construction project. These loans present different risks due to the nature of construction projects and the underlying collateral. Finally, the company segregates each class by risk rating, as loans determined to have lower credit quality present different and greater risk than those of higher credit quality. The Company’s credit quality grading system is described in detail below in the section titled “ Credit Quality Indicators Allowance for Loan Loss Evaluation The Company adopted CECL on January 1, 2023. CECL replaces the previous methodology for measuring credit losses, which involved estimated allowances for current known and inherent losses within the portfolio. The CECL methodology requires the Company to implement an expected loss model for measuring credit losses, which encompasses allowances for losses expected to be incurred over the life of the borrowings in its portfolio. The allowance for loan loss model used under CECL requires the measurement of all expected credit losses for financial assets at amortized cost, as well as certain off-balance sheet credit exposures based on historical experiences, current conditions, and reasonable and supportable forecasts. Upon the adoption of the CECL model on January 1, 2023, the Company recorded a one-time cumulative-effect adjustment to retained earnings on its consolidated balance sheet of $113 thousand. This includes a reduction in retained earnings of $112 thousand to increase the allowance for loan losses based on the additional expected credit losses in the Company’s portfolio on day one of its implementation of the standards as required by ASU 2016-13. It also includes a reduction in retained earnings of $1 thousand to establish an allowance for expected losses on unfunded commitments, which is recorded on the balance sheet in other liabilities. In accordance with FASB Accounting Standards Update (ASU) No. 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments CECL Model The CECL methodology does not prescribe any specific model for determining expected losses. Management has determined that, due to the nature of the borrowings in its portfolio and the nature of the collateral securing a significant portion of its borrowings, it would use a “probability of default” calculation as the basis for estimating expected losses. This methodology uses information about the borrower, the loan, and the collateral securing the loan to determine a borrower’s ability to meet the contractual requirements of the loan agreement. It then applies a calculated probability that the borrower will default to the estimated amount of loss the Company would incur in a default scenario. To perform this calculation, the methodology requires management to collect and analyze certain data for the loans in its portfolio including: ● the value of collateral securing the loan, as supported by third-party appraisals or other valuations; ● adjustments to the collateral value related to geographical and economic trends, and estimated costs to sell; and ● the borrower’s ability to meet its contractual obligations as determined by financial information collected regularly from borrowers. As under the previous methodology, the allowance consists of collectively reviewed and specifically reviewed components. The collectively reviewed component covers non-classified loans. All loans included in the collectively reviewed pool are subject to the probability of default calculation described above. In addition, management has determined that there are qualitative factors affecting expected credit losses for which the probability of default model cannot account. These qualitative factors represent significant issues that management considers likely to cause estimated credit losses associated with the Company’s existing portfolio to differ from the probability of default calculation. These factors are applied in varying degrees depending on a loan’s segment, class, and credit quality. Management adjusts these factors on an on-going basis, some of which include: ● changes in national, regional, and local economic and industry conditions that affect the collectability of the portfolio; ● 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 collateral, including the limitations of using commercial price indices to adjust collateral value; ● the inherent risk in borrowings with high loan-to-value figures; and ● broad trends in the Christian church industry in which the Company primarily lends. Loans that management has classified as non-performing and 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. Specifically Reviewed The Company reviews its loan portfolio monthly by examining several data points. This process includes reviewing delinquency reports, any new information related to the financial condition of its borrowers, and any new appraisal or other collateral valuation. Throughout 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. All loans in the loan portfolio are subject to impairment analysis. The Company monitors impaired loans on an ongoing basis as part of management’s loan review and work out process. Any loans that management has determined are non-performing and impaired are individually analyzed for potential losses. These loans include non-accrual loans, loans 90 days or more past due and still accruing, non-performing modified loans, and loans where the borrowers have defaulted on contractual terms of their loan agreement. ● Non-accrual loans are loans on which management has discontinued interest accruals. ● Modified 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. ● Loans that have defaulted on other contractual terms could include loans where the borrower has failed to provide required financial information, has violated a covenant, or has otherwise failed to comply with the terms of the loan agreement. 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 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. A loan modification 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 modification of a loan usually involves an interest rate reduction, 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 loan modifications if the below-market terms represent a concession due to the borrower’s troubled financial condition. The Company classifies loan modifications as impaired loans. For the loans that are not considered to be collateral-dependent, management measures loan modifications at the present value of estimated future cash flows using the loan’s effective rate prior to the loan’s initial modification. The Company reports the change in the present value of cash flows related to the passage of time as interest income. If management considers the loan 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 loan modification. However, loan modifications, 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 classified as impaired loans but not necessarily as non-accrual or collateral-dependent loans. Modified loans can be included in the collectively reviewed pool of loans if they return to performing status. 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. Management must report loans graded Watch to executive management and the Board of Managers. The 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: Management considers loans and other credit extensions bearing this grade to be inadequately protected by the current net 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 a 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"). Refer to the discussion in “Loans Receivable” above to understand the Company’s recognition of interest income. |
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 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. Charitable contributions Charitable contributions include amounts that were donated by a third party to the Company’s not-for-profit subsidiary, MPC. This revenue comprises donations analyzed by management and determined to be unconditional, non-exchange transactions. Contributions are measured at their fair value at the date of contribution. All contributions are considered to be available for unrestricted use unless specifically restricted by the donor. Amounts received that are designated for future periods or restricted by the donor for specific purposes are reported as carrying donor restrictions. The $1.7 million in charitable contributions recognized during the six months ended June 30, 2023, were permanently restricted by the donor as part of a designated fund agreement that allows for limited annual distributions. These funds are included in the restricted net assets of MPC and are presented on the balance sheet as part of retained earnings. 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 asset’s fair value supports the recorded amount. If necessary, management also ensures 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. To recognize the transfer of a portion of a financial asset as a sale, the transferred portion, and any portion that the transferor continues to hold must represent a participating interest. In addition, 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 debt securities. 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 |
Leases | Leases We recognize right-of-use (“ROU”) assets and lease liabilities on the balance sheet for leases with lease terms longer than 12 months. The recognition, measurement and presentation of lease expenses and cash flows depend on the lease classification as a finance or operating lease. The Company has operating leases for real estate and a vehicle. Its leases have remaining lease terms of one on our consideration of certain economic, strategic, and other factors that we evaluate at lease commencement date and reevaluate throughout the lease term. Some leases also include options to terminate the leases and we only include those periods beyond the termination date if we are reasonably certain not to exercise the termination option. Some leasing arrangements require variable payments that are dependent on usage or may vary for other reasons, such as payments for insurance and tax payments. The variable part of lease payments is not included in our ROU assets or lease liabilities. Rather, variable payments, other than those dependent upon an index or rate, are expensed when the obligation for those payments is incurred and are included in lease expenses recorded in selling and administrative expenses on the Consolidated Statements of Operations. If any of the lease agreements have both lease and non-lease components, we treat those as a single lease component for all underlying asset classes. Accordingly, all expenses associated with a lease contract are accounted for as lease expenses. 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 Recently Adopted Accounting Standards 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 was eligible for delayed implementation of the standard. Management has gathered all necessary data and reviewed potential methods to calculate the expected credit losses. The Company uses 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 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. Under the modified-retrospective method of adoption, on January 1, 2023 the Company recorded a one-time cumulative effect adjustment to the allowance for credit losses that reduced retained earnings on the consolidated balance sheet by $113 thousand, as is required in the guidance. This included a $1 thousand adjustment related to the allowance for credit losses on unfunded commitments. The qualitative impact of the new accounting standard is 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. The Company uses reasonable and supportable forecasts. 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, ASU 2022-02 requires disclosure of current period gross write-offs by year of origination for financing receivables. This ASU was effective for the Company for fiscal years beginning after December 15, 2022. The Company adopted this guidance on January 1, 2023. The implementation of this guidance did not have a material impact on the consolidated financial statements. |
Related Party Transaction Policy | 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. |
Pledged Cash and Restricted C_2
Pledged Cash and Restricted Cash (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Pledged Cash and Restricted Cash [Abstract] | |
Schedule of 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): June 30, December 31, 2023 2022 2022 Cash and cash equivalents $ 13,271 $ 11,485 $ 9,504 Restricted cash 1,758 66 60 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 15,029 $ 11,551 $ 9,564 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
AdelFi | |
Related Party Transaction [Line Items] | |
Summary of Related Party Balances | Related party balances pertaining to the assets of the Company (dollars in thousands): June 30, December 31, 2023 2022 Total funds held on deposit at AdelFi $ 3,396 $ 443 Loan participations purchased from and serviced by AdelFi 67 68 |
Schedule of Related Party Transactions | Related party transactions of the Company (dollars in thousands): Three months ended Six months ended June 30, June 30, 2023 2022 2023 2022 Number of loans purchased from AdelFi 1 — 1 — Amount of loans purchased from AdelFi $ 1,264 $ — $ 1,264 $ — Interest earned on funds held with AdelFi* 25 — 26 — Interest income earned on loans purchased from AdelFi 10 1 11 3 Fees paid to AdelFi from MP Securities Networking Agreement 2 2 4 4 Rent expense on lease agreement with AdelFi 36 36 73 73 *Note: Interest income earned in 2022 on loans purchased from AdelFi arose from loans purchased in years prior to 2022. |
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): June 30, December 31, 2023 2022 Total funds held on deposit at ACCU $ 172 $ 246 Dollar amount of outstanding loan participations sold to ACCU and serviced by the Company 952 964 Amount owed on ACCU secured borrowings 7 7 Amount owed on ACCU line of credit — 3,000 Loans pledged on ACCU line of credit 6,720 6,823 |
Schedule of Related Party Transactions | Related party transactions of the Company (dollars in thousands): Three months ended Six months ended June 30, June 30, 2023 2022 2023 2022 Interest earned on funds held with ACCU $ — $ 3 $ 1 $ 7 Dollar amount of secured borrowings made from ACCU 1 — — 7 Interest expense on ACCU borrowings 1 20 59 40 Income from broker services provided to ACCU by MPS 7 10 14 23 Fees paid based on MP Securities Networking Agreement with ACCU 10 12 46 52 |
KCT Credit Union [Member] | |
Related Party Transaction [Line Items] | |
Summary of Related Party Balances | Related party balances pertaining to the assets of the Company (dollars in thousands): June 30, December 31, 2023 2022 Total funds held on deposit at KCT $ 1,281 $ 1,261 Loans pledged on KCT lines of credit 10,771 10,962 Certificates of deposit pledged on KCT Warehouse LOC 1,250 1,250 Outstanding loan participations sold to KCT and serviced by the Company 3,425 3,455 |
Schedule of Related Party Transactions | Related party transactions of the Company (dollars in thousands): Three months ended Six months ended June 30, June 30, 2023 2022 2023 2022 Interest earned on funds held with KCT $ 10 $ — $ 20 $ — Loans sold to KCT — 56 7 56 Dollar amount of draws on KCT line of credit — — — 2,000 Interest expense on KCT line of credit — — — 15 Fees paid based on MP Securities Networking Agreement with KCT 11 3 20 44 |
Other Related Parties [Member] | |
Related Party Transaction [Line Items] | |
Summary of Related Party Balances | Related party balances pertaining to the assets of the Company (dollars in thousands): June 30, December 31, 2023 2022 Outstanding loan participations sold to NFCU and serviced by the Company $ 4,809 $ 4,872 Outstanding notes payable to officers and managers 2,628 2,266 |
Loans Receivable and Allowanc_2
Loans Receivable and Allowance for Loan Losses (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Loans Receivable and Allowance for Loan Losses [Abstract] | |
Summary of Loans | June 30, December 31, 2023 2022 Non-profit commercial loans: Real estate secured $ 88,155 $ 84,878 Other secured — 225 Unsecured 87 99 Total non-profit commercial loans: 88,242 85,202 For-profit commercial loans: Real estate secured 4,138 1,840 Total loans 92,380 87,042 Deferred loan fees, net (198) (208) Loan discount (203) (207) Allowance for loan losses (1,512) (1,551) Loans, net $ 90,467 $ 85,076 |
Schedule of Changes in Allowance for Loan Losses | Six months ended June 30, 2023 Segment: Non-profit Commercial For-profit Commercial Total Balance, beginning of period $ 1,530 $ 21 $ 1,551 Adjustment related to implementation of CECL model 128 (16) 112 Provision (credit) for loan loss (159) 8 (151) Charge-offs — — — Recoveries — — — Balance, end of period $ 1,499 $ 13 $ 1,512 Year ended December 31, 2022 Segment: Commercial loans Balance, beginning of period $ 1,638 for loan loss (296) Charge-offs — Recoveries 209 Balance, end of period $ 1,551 |
Schedule of Loans and Allowance for Loan Losses by Impairment Methodology | Loans and Allowance for Loan Losses (by segment) As of June 30, 2023 December 31, 2022 Non-profit Commercial Loans: Individually evaluated for impairment $ 11,648 $ 5,933 Collectively evaluated for impairment 76,594 79,269 Total Non-profit Commercial Loans 88,242 85,202 For-profit Commercial Loans: Individually evaluated for impairment — — Collectively evaluated for impairment 4,138 1,840 Total For-profit Commercial Loans 4,138 1,840 Balance $ 92,380 $ 87,042 Allowance for loan losses: Non-profit Commercial Loans: Individually evaluated for impairment $ 616 $ 597 Collectively evaluated for impairment 883 933 Total Non-profit Commercial Loan Allowance 1,499 1,530 For-profit Commercial Loans: Individually evaluated for impairment — — Collectively evaluated for impairment 13 21 Total For-profit Commercial Loan Allowance 13 21 Balance $ 1,512 $ 1,551 |
Schedule of Loan Portfolio Credit Quality Indicators by Class | Credit Quality Indicators (by class) As of June 30, 2023 Pass Watch Special Mention Substandard Doubtful Loss Total Non-profit Commercial Loans Wholly Owned First Amortizing $ 45,715 $ 28,012 $ — $ 9,889 $ 213 $ — $ 83,829 Wholly Owned Other Amortizing 1,425 — — 1,546 — — 2,971 Wholly Owned Unsecured Amortizing 28 29 — — — — 57 Wholly Owned Unsecured LOC 58 — — — — — 58 Participation First 1,327 — — — — — 1,327 Total Non-profit Commercial Loans 48,553 28,041 — 11,435 213 — 88,242 For-profit Commercial Loans — Participation First 1,785 — — — — — 1,785 Participation Construction 2,353 — — — — — 2,353 Total For-profit Commercial Loans 4,138 — — — — — 4,138 Total Loans $ 52,691 $ 28,041 $ — $ 11,435 $ 213 $ — $ 92,380 Credit Quality Indicators (by class) As of December 31, 2022 Pass Watch Special Mention Substandard Doubtful Loss Total Non-profit Commercial Loans Wholly Owned First Amortizing $ 45,189 $ 32,080 $ — $ 5,430 $ 503 $ — $ 83,202 Wholly Owned Other Amortizing 1,448 — — — — — 1,448 Wholly Owned Unsecured Amortizing — 29 — — — — 29 Wholly Owned Unsecured LOC 295 — — — — — 295 Wholly Owned Construction 160 — — — — — 160 Participation First — 68 — — — — 68 Total Non-profit Commercial Loans 47,092 32,177 — 5,430 503 — 85,202 For-profit Commercial Loans — Participation First 1,035 — — — — — 1,035 Participation Construction 805 — — — — — 805 Total For-profit Commercial Loans 1,840 — — — — — 1,840 Total Loans $ 48,932 $ 32,177 $ — $ 5,430 $ 503 $ — $ 87,042 |
Schedule of Age Analysis of Past Due Loans by Class | Age Analysis of Past Due Loans (by class) As of June 30, 2023 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 Still Accruing Non-profit Commercial Loans Wholly Owned First Amortizing $ 5,334 $ 6,063 $ 1,088 $ 12,485 $ 71,344 $ 83,829 $ — Wholly Owned Other Amortizing — — — — 2,971 2,971 — Wholly Owned Unsecured Amortizing — — — — 57 57 — Wholly Owned Unsecured LOC — — — — 58 58 — Participation First 67 — — 67 1,260 1,327 — Total Non-profit Commercial Loans 5,401 6,063 1,088 12,552 75,690 88,242 — For-profit Commercial Loans Participation First — — — — 1,785 1,785 — Participation Construction — — — — 2,353 2,353 — Total For-profit Commercial Loans — — — — 4,138 4,138 — Total Loans $ 5,401 $ 6,063 $ 1,088 $ 12,552 $ 79,828 $ 92,380 $ — 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 Still Accruing Non-profit Commercial Loans Wholly Owned First Amortizing $ 6,068 $ — $ 1,378 $ 7,446 $ 75,756 $ 83,202 $ — Wholly Owned Other Amortizing — — — — 1,448 1,448 — Wholly Owned Unsecured Amortizing — — — — 29 29 — Wholly Owned Unsecured LOC — — — — 295 295 — Wholly Owned Construction — — — — 160 160 — Participation First — — — — 68 68 — Total Non-profit Commercial Loans 6,068 — 1,378 7,446 77,756 85,202 — For-profit Commercial Loans Participation First — — — — 1,035 1,035 — Participation Construction — — — — 805 805 — Total For-profit Commercial Loans — — — — 1,840 1,840 — Total Loans $ 6,068 $ — $ 1,378 $ 7,446 $ 79,596 $ 87,042 $ — |
Schedule of Impaired Loans by Class | As of As of June 30, December 31, Impaired Non-profit commercial Loans (by class) 2023 2022 Wholly Owned First Amortizing Recorded investment with specific allowance $ 3,080 $ 15,569 Recorded with no specific allowance 20,808 4,598 Total recorded investment $ 23,888 $ 20,167 Unpaid principal balance $ 24,253 $ 20,419 Wholly Owned Other Amortizing Recorded investment with specific allowance $ 1,546 $ — Recorded with no specific allowance — — Total recorded investment $ 1,546 $ — Unpaid principal balance $ 1,685 $ — Total Impaired Loans Recorded investment with specific allowance $ 4,626 $ 15,569 Recorded with no specific allowance 20,808 4,598 Total recorded investment $ 25,434 $ 20,167 Unpaid principal balance $ 25,938 $ 20,419 For the three months ended For the six months ended June 30, June 30, June 30, June 30, Impaired Non-profit Commercial Loans (by class) 2023 2022 2023 2022 Wholly Owned First Amortizing Average recorded investment $ 24,793 $ 13,173 $ 22,028 $ 11,540 Interest income recognized 439 161 737 331 Wholly Owned Other Amortizing Average recorded investment 1,568 1,635 773 1,635 Interest income recognized — — — — Total Impaired Loans Average recorded investment $ 26,361 $ 14,808 $ 22,801 $ 13,175 Interest income recognized 439 161 737 331 |
Schedule of Loans on Non-accrual Status by Class | Loans on Nonaccrual Status (by class) as of June 30, 2023 December 31, 2022 Non-profit Commercial Loans: Wholly Owned First Amortizing $ 10,102 $ 5,933 Wholly Owned Other Amortizing 1,546 — Total $ 11,648 $ 5,933 |
Schedule of Troubled Debt Restructurings by Class | Loan modifications (by class) For the three months ended For the six months ended June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Non-profit Commercial Loans: Wholly Owned First Amortizing Number of Loans 2 1 2 2 Pre-Modification Outstanding Recorded Investment $ 6,253 $ 1,196 $ 6,253 $ 2,192 Post-Modification Outstanding Recorded Investment 6,253 1,196 6,253 2,192 Recorded Investment At Period End 6,247 1,196 6,247 2,192 Total Number of Loans 2 1 2 2 Pre-Modification Outstanding Recorded Investment $ 6,253 $ 1,196 $ 6,253 $ 2,192 Post-Modification Outstanding Recorded Investment 6,253 1,196 6,253 2,192 Recorded Investment At Period End 6,247 1,196 6,247 2,192 |
Investments in Joint Venture (T
Investments in Joint Venture (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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 June 30, 2023 and December 31, 2022, are as follows (dollars in thousands): As of June 30, 2023 Certificate Open Date Certificate Amount Interest Rate Maturity Date CD 1 9/29/2022 $ 1,250 2.85% 6/6/2024 |
Indexed annuity insurance contracts | Additional information related to these investments is as follows (dollars in thousands): Income for the three months ended Income for the six months ended Investment Type Maturity Date Original Cost Net Carrying Amount June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Fixed annuity June 2032 $ 1,000 $ 1,049 $ 30 $ 15 $ 31 $ 15 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Revenue Recognition [Abstract] | |
Schedule of Disaggregated Revenue | Three months ended Six months ended June 30, June 30, 2023 2022 2023 2022 Non-interest income, in scope of ASC 606 Broker-dealer fees and commissions $ 138 $ 217 $ 353 $ 516 Gains on loan sales 7 — 14 3 Other investment income 30 15 31 15 Other non-interest income 4 — 9 — Non-interest income, out of scope, ASC 606 Lending fees 45 44 95 76 Gain on debt extinguishment — 300 — 1,800 Charitable contributions, with donor restrictions 1,300 — 1,700 — Total non-interest income $ 1,524 $ 576 $ 2,202 $ 2,410 |
Schedule of Revenue by Transaction and Assets Under Management | For the three months ended For the six months ended (dollars in thousands) June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Broker-dealer revenue Securities commissions Transactional $ 2 $ 13 $ 16 $ 102 AUM 13 12 26 23 15 25 42 125 Sale of investment company products Transactional 5 1 8 16 AUM 18 20 35 45 23 21 43 61 Other insurance product revenue Transactional 9 71 87 127 AUM 12 10 24 20 21 81 111 147 Advisory fee income Transactional — — — 3 AUM 79 90 157 180 79 90 157 183 Total broker-dealer revenue Transactional 16 85 111 248 AUM 122 132 242 268 $ 138 $ 217 $ 353 $ 516 |
Loan Sales (Tables)
Loan Sales (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Loan Sales [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 Six months ended Year ended June 30, December 31, 2023 2022 2022 Loan participation interests sold by the Company $ 502 $ 1,216 $ 3,716 Total participation interests sold and serviced by the Company 32,248 39,671 34,946 Servicing income 71 69 153 Servicing Assets Balance, beginning of period $ 123 $ 170 $ 170 Additions: Servicing obligations from sale of loan participations 18 3 19 Subtractions: Amortization (20) (45) (66) Balance, end of period $ 121 $ 128 $ 123 |
Foreclosed Assets (Tables)
Foreclosed Assets (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Foreclosed Assets [Abstract] | |
Foreclosed Asset Expenses | Expenses applicable to foreclosed assets include the following (dollars in thousands): For the three months ended June 30, For the six months ended June 30, Foreclosed Asset Expenses 2023 2022 2023 2022 Provision for losses $ — $ — $ — $ — Operating expenses 5 4 9 9 Total foreclosed asset expenses $ 5 $ 4 $ 9 $ 9 |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Premises and Equipment [Abstract] | |
Summary of Premises and Equipment | The table below summarizes our premises and equipment (dollars in thousands): As of June 30, December 31, 2023 2022 Furniture and office equipment $ 528 $ 528 Computer system 220 220 Leasehold improvements 43 43 Total premises and equipment 791 791 Less accumulated depreciation and amortization (672) (651) Premises and equipment, net $ 119 $ 140 For the three months ended For the six months ended June 30, June 30, June 30, June 30, 2023 2022 2023 2022 Depreciation and amortization expense $ 11 $ 11 $ 21 $ 22 |
Credit Facilities and Other D_2
Credit Facilities and Other Debt (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Credit Facilities and Other Debt [Abstract] | |
Summary of Principal Terms of Term Debt | Nature of Borrowing Interest Rate Interest Rate Type Amount Outstanding Monthly Payment Maturity Date Amount of Loan Collateral Pledged Other Assets Pledged* KCT Warehouse LOC 8.500% Variable $ — $ — 6/6/2024 $ 5,975 $ 1,250 KCT Operating LOC 8.500% Variable — — 6/6/2024 4,797 — ACCU LOC 8.250% Variable — — 9/23/2024 6,720 — ACCU Secured Various Fixed 7 — Various — 7 *Represents cash or certificates of deposit |
Debt Securities Payable (Tables
Debt Securities Payable (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Debt Instrument [Line Items] | |
Schedule of Investor debt securities Payable | As of As of June 30, 2023 December 31, 2022 SEC Registered Public Offerings Offering Type Amount Weighted Average Interest Rate Amount Weighted Average Interest Rate Class 1A Offering Unsecured $ 17,867 4.26 % $ 20,698 4.27 % 2021 Class A Offering Unsecured 61,553 4.60 % 45,935 4.04 % Public Offering Total $ 79,420 4.52 % $ 66,633 4.11 % Private Offerings Offering Type Subordinated Notes Unsecured $ 13,660 4.66 % $ 12,525 4.56 % Private Offering Total $ 13,660 4.66 % $ 12,525 4.56 % Total Debt Securities Payable $ 93,080 4.54 % $ 79,158 4.19 % |
Notes Payable [Member] | |
Debt Instrument [Line Items] | |
Schedule of Maturities of debt securities | 2024 $ 43,711 2025 14,120 2026 17,678 2027 14,168 2028 3,403 Total $ 93,080 Debt issuance costs 47 Debt securities payable, net of debt issuance costs $ 93,033 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies [Abstract] | |
Unfunded Commitments | Contract Amount at: June 30, 2023 December 31, 2022 Undisbursed loans $ 301 $ 355 |
Credit losses on off-balance sheet | The following table details activity in the allowance for credit losses on off-balance sheet commitments (dollars in thousands): Six months ended Year ended June 30, 2023 December 31, 2022 Balance, beginning of period $ — $ — Adjustment related to implementation of CECL model 1 — Provision for losses on unfunded commitments — — Balance, end of period $ 1 $ — |
Information About Existing Operating Leases | For the Three months ended Six months ended Year ended June 30, June 30, December 31, 2023 2022 2023 2022 2022 Lease cost Operating lease cost $ 44 $ 42 $ 88 $ 87 $ 175 Other information Cash paid for operating leases 44 46 95 96 185 Right-of-use assets obtained in exchange for operating lease liabilities — 84 — 106 106 Lease liabilities recorded — 84 — 101 101 Weighted average remaining lease term (in years) 1.02 1.91 1.02 1.91 1.46 Weighted-average discount rate 4.28 % 4.38 % 4.28 % 4.38 % 4.33 % |
Future Minimum Lease Payments and Lease Costs | Lease Payments Lease Costs 2024 $ 113 $ 110 2025 28 28 Total $ 141 $ 138 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Measurements [Abstract] | |
Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments | Fair Value Measurements at June 30, 2023 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 $ 15,029 $ 15,029 $ — $ — $ 15,029 Certificates of deposit 1,250 — 1,248 — 1,248 Loans, net 90,467 — — 87,890 87,890 Investment in joint venture 883 — — 883 883 Other investments 1,049 — — 1,049 1,049 Accrued interest receivable 406 — — 406 406 Servicing assets 121 — — 121 121 FINANCIAL LIABILITIES: Other secured borrowings 7 — — 7 7 Debt securities payable 93,033 — — 92,932 92,932 Other financial liabilities 546 — — 546 546 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 Servicing assets 123 123 123 FINANCIAL LIABILITIES: Lines of credit $ 3,000 $ — $ — $ 3,026 $ 3,026 Other secured borrowings 7 — — 7 7 Debt securities payable 79,100 — — 78,330 78,330 Other financial liabilities 462 — — 462 462 |
Schedule of Fair Value Measured on a Nonrecurring Basis | 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 June 30, 2023: Collateral-dependent impaired loans (net of allowance and discount) $ — $ — $ 5,495 $ 5,495 Investment in joint venture — — 883 883 Other investments — — 1,049 1,049 Foreclosed assets (net of allowance) — — 301 301 Total $ — $ — $ 7,728 $ 7,728 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 |
Schedule of Valuation Methodologies Used to Measure the Fair Value Adjustments for Level 3 Assets Recorded at Fair Value on a Nonrecurring Basis | June 30, 2023 Assets Fair Value (in thousands) Valuation Techniques Unobservable Input Range (Weighted Average) Impaired Loans $ 5,495 Discounted appraised value Selling cost / Estimated market decrease 10% - 81% (18%) Investment in joint venture 883 Internal evaluations Estimated future market value 0% (0%) Other investments 1,049 Internal evaluations Indications of non-performance by insurance companies 0% (0%) Foreclosed Assets 301 Internal evaluations Selling cost 6% (6%) 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%) |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Segment Information [Abstract] | |
Schedule of Financial Information by Reportable Segments | Financial information with respect to the reportable segments is as follows (dollars in thousands): Three months ended Six months ended June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Revenue from external sources Finance Company* $ 1,546 $ 1,748 $ 2,962 $ 4,808 Broker-Dealer 218 233 465 532 Charitable Organization 1,306 — 1,706 — Adjustments / Eliminations — — — — Total $ 3,070 $ 1,981 $ 5,133 $ 5,340 Revenue from internal sources Finance Company $ — $ — $ — $ — Broker-Dealer 329 209 790 494 Charitable Organization — — — — Adjustments / Eliminations (329) (209) (790) (494) Total $ — $ — $ — $ — Interest expense Finance Company $ 1,467 $ 1,089 $ 2,719 $ 2,240 Broker-Dealer — — — — Charitable Organization — — — — Adjustments / Eliminations (386) (278) (720) (568) Total $ 1,081 $ 811 $ 1,999 $ 1,672 Total non-interest expense and provision for tax Finance Company $ 745 $ 801 $ 1,706 $ 2,448 Broker-Dealer 333 325 747 897 Charitable Organization 5 41 5 51 Adjustments / Eliminations — (50) — (50) Total $ 1,083 $ 1,117 $ 2,458 $ 3,346 Net profit (loss) Finance Company $ (676) $ (166) $ (1,312) $ 184 Broker-Dealer 214 118 509 130 Charitable Organization 1,301 (41) 1,701 (52) Adjustments / Eliminations 56 118 (71) 123 Total $ 895 $ 29 $ 827 $ 385 *Note: Finance Company revenue includes gains on debt extinguishment of $300 thousand for the quarter ended June 30, 2022 and $1.8 million for the six months ended June 30, 2022. June 30, December 31, 2023 2022 (Unaudited) (Audited) Total assets Finance Company $ 103,182 $ 94,523 Broker-Dealer 5,002 4,553 Charitable Organization 2,069 368 Other Segments 56 55 Adjustments / Eliminations (114) (136) Total $ 110,195 $ 99,363 |
Not-for-profit Disclosures (Tab
Not-for-profit Disclosures (Tables) - MPC | 6 Months Ended |
Jun. 30, 2023 | |
Not-for-profit Disclosures | |
Schedule of breakdown of expenses | Three months ended Six months ended June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Expenses Charitable grants $ — $ 40 $ — $ 50 General and administrative expenses 5 1 5 1 Total $ 5 $ 41 $ 5 $ 51 |
Schedule of change in net assets | Three months ended Six months ended June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Change in net assets 1,301 (41) 1,701 (52) |
Nature of Business and Summar_3
Nature of Business and Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 USD ($) segment | Jun. 30, 2022 item | Jun. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) item segment | Jan. 01, 2023 USD ($) | |
Significant Accounting Policies [Line Items] | |||||
Number of loan portfolio segments | segment | 1 | 2 | |||
Accumulated earnings | $ 1,402 | $ 72 | $ 72 | ||
Allowance for loan losses | 1,551 | 1,512 | 1,512 | ||
Unfunded commitments | 1 | 1 | |||
Charitable contributions, with donor restrictions | 1,300 | $ 1,700 | |||
Number of fixed annuities purchased | item | 2 | ||||
Term of fixed annuities insurance | 10 years | ||||
Types of revenue, number | item | 2 | ||||
Accounting Standards Update 2016-13 [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Accumulated earnings | $ 113 | ||||
Allowance for loan losses | 112 | $ 112 | 112 | ||
Unfunded commitments | $ 1 | $ 1 | $ 1 | ||
Minimum [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Estimated useful lives of property and equipment | 3 years | ||||
Operating lease, remaining lease term | 1 year | 1 year | |||
Maximum [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Estimated useful lives of property and equipment | 7 years | ||||
Operating lease, remaining lease term | 3 years | 3 years | |||
Maximum [Member] | Certificates of Deposit | |||||
Significant Accounting Policies [Line Items] | |||||
Investments in certificates of deposit | $ 1,300 | $ 1,300 | $ 1,300 |
Pledged Cash and Restricted C_3
Pledged Cash and Restricted Cash - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 |
Restricted Cash and Cash Equivalents Items [Line Items] | |||
Pledged cash | $ 7 | $ 7 | |
Restricted cash | 1,758 | $ 60 | $ 66 |
Ministry Partners for Christ, Inc [Member] | |||
Restricted Cash and Cash Equivalents Items [Line Items] | |||
Restricted cash | $ 1,700 | ||
Restricted Cash, Statement of Financial Position [Extensible Enumeration] | Restricted cash |
Pledged Cash and Restricted C_4
Pledged Cash and Restricted Cash - Reconciliation of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Cash and cash equivalents | $ 13,271 | $ 9,504 | $ 11,485 | |
Restricted cash | 1,758 | 60 | 66 | |
Total cash, cash equivalents, and restricted cash shown in the statements of cash flows | 15,029 | $ 9,564 | $ 11,551 | $ 28,149 |
Ministry Partners for Christ, Inc [Member] | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted cash | $ 1,700 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||
Jun. 06, 2022 USD ($) | Sep. 23, 2021 USD ($) | Aug. 09, 2021 | Mar. 20, 2020 USD ($) loan | Aug. 14, 2013 USD ($) loan | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Sep. 29, 2022 USD ($) | Jan. 13, 2020 USD ($) | |
Related Party Transaction [Line Items] | ||||||||||||
Debt facilities | $ 93,080,000 | $ 93,080,000 | $ 79,158,000 | |||||||||
Amount outstanding, Line of credit | 3,000,000 | |||||||||||
Successor Servicing Agreement [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Collateralization ratio | 1 | |||||||||||
AdelFi | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Number of Loans purchased from related party | 1,000 | 1,000,000 | ||||||||||
ACCU [Member] | Master LP Agreement [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Loans sold to related party | $ 7,000 | $ 7,000 | 7,000 | |||||||||
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 | $ 7,000 | $ 56,000 | |||||||||
Interest rate | 2.85% | |||||||||||
Maturity Date | Jun. 06, 2024 | |||||||||||
Loan and Security Agreement terminated | $ 7,000,000 | |||||||||||
Serviced loan participations sold | $ 3,400,000 | 3,400,000 | 3,500,000 | |||||||||
Board and Executive Management [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Notes held by related parties | $ 2,600,000 | $ 2,600,000 | 2,300,000 | |||||||||
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] | ||||||||||||
Interest rate | 2.85% | 2.85% | ||||||||||
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 | $ 1,300,000 | 1,300,000 | |||||||||
ACCU Line of Credit. 8.250% maturing September 23, 2023 | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Debt facilities | $ 0 | $ 0 | ||||||||||
Maximum borrowing capacity | $ 5,000,000 | |||||||||||
Facility maturity date | Sep. 23, 2022 | |||||||||||
Facility renewal period | 1 year | |||||||||||
Minimum cancellation notice | 90 days | |||||||||||
Minimum collateralization ratio | 120% | 120% | ||||||||||
Maturity period | 1 year | |||||||||||
Spread over prime rate | 0.75% | |||||||||||
Interest rate | 8.25% | 8.25% | ||||||||||
ACCU Line of Credit. 8.250% maturing September 23, 2023 | Minimum [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Interest rate | 4% | |||||||||||
KCT Line of Credit [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Short-term Line of Credit | $ 0 | $ 0 | 0 | |||||||||
KCT Line of Credit [Member] | KCT Credit Union [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Maturity Date | Oct. 13, 2021 | Oct. 13, 2021 | ||||||||||
KCT Warehouse LOC [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Maximum borrowing capacity | 5,000,000 | |||||||||||
KCT Warehouse LOC [Member] | KCT Credit Union [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Debt facilities | $ 0 | $ 0 | ||||||||||
Maximum borrowing capacity | $ 5,000,000 | |||||||||||
Maturity period | 1 year | |||||||||||
Delinquency period | 60 days | |||||||||||
Spread over prime rate | 0.50% | |||||||||||
Interest rate | 8.50% | 8.50% | ||||||||||
KCT Warehouse LOC [Member] | Minimum [Member] | KCT Credit Union [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Minimum collateralization ratio | 120% | 120% | ||||||||||
KCT Operating LOC [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Maximum borrowing capacity | $ 5,000,000 | |||||||||||
KCT Operating LOC [Member] | KCT Credit Union [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Debt facilities | $ 0 | $ 0 | ||||||||||
Maximum borrowing capacity | $ 5,000,000 | |||||||||||
Maturity period | 1 year | |||||||||||
Delinquency period | 60 days | |||||||||||
Spread over prime rate | 0.50% | |||||||||||
Interest rate | 8.50% | 8.50% | ||||||||||
KCT Operating LOC [Member] | Minimum [Member] | KCT Credit Union [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Minimum collateralization ratio | 120% | 120% | ||||||||||
ACCU Line of Credit. 8.250% maturing September 23, 2023 | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Debt facilities | $ 3,000,000 | |||||||||||
ACCU Line of Credit. 8.250% maturing September 23, 2023 | ACCU [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Maximum borrowing capacity | $ 5,000,000 | |||||||||||
Maturity Date | Sep. 23, 2023 | Sep. 23, 2023 |
Related Party Transactions - Su
Related Party Transactions - Summary of Related Party Balances (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
AdelFi | ||
Related Party Transaction [Line Items] | ||
Total funds held on deposit | $ 3,396 | $ 443 |
Loan participations purchased from and serviced by related party | 67 | 68 |
ACCU [Member] | ||
Related Party Transaction [Line Items] | ||
Total funds held on deposit | 172 | 246 |
Outstanding loan participations sold to related party and serviced by the Company | 952 | 964 |
ACCU [Member] | Line Of Credit [Member] | ||
Related Party Transaction [Line Items] | ||
Amount owed to related party | 3,000 | |
Loans pledged on line of credit | $ 6,720 | $ 6,823 |
Financial Instrument, Owned, Pledging Purpose [Extensible Enumeration] | Lines of credit | Lines of credit |
ACCU [Member] | Secured Borrowings [Member] | ||
Related Party Transaction [Line Items] | ||
Amount owed to related party | $ 7 | $ 7 |
KCT Credit Union [Member] | ||
Related Party Transaction [Line Items] | ||
Total funds held on deposit | 1,281 | 1,261 |
Loans pledged on line of credit | $ 10,771 | $ 10,962 |
Financial Instrument, Owned, Pledging Purpose [Extensible Enumeration] | Lines of credit | Lines of credit |
Certificates of deposit pledged on KCT Warehouse LOC | $ 1,250 | $ 1,250 |
Outstanding loan participations sold to related party and serviced by the Company | 3,425 | 3,455 |
NFCU [Member] | ||
Related Party Transaction [Line Items] | ||
Outstanding loan participations sold to related party and serviced by the Company | 4,809 | 4,872 |
Officers And Managers [Member] | ||
Related Party Transaction [Line Items] | ||
Outstanding notes payable to officers and managers | $ 2,628 | $ 2,266 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Related Party Transactions (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | |
AdelFi Credit Union [Member] | ||||
Related Party Transaction [Line Items] | ||||
Interest earned on funds held with related party | $ 25 | $ 26,000 | ||
Interest income earned on loans purchased from related party | $ 10 | $ 1 | $ 11,000 | $ 3,000 |
Number Of Loans Purchased From Related Party | 1 | 1,000 | ||
Amount of loans purchased | $ 1,264 | $ 1,264,000 | ||
AdelFi Credit Union [Member] | Networking Agreement [Member] | ||||
Related Party Transaction [Line Items] | ||||
Fees paid to and expenses with related party | 2 | 2 | 4,000 | 4,000 |
AdelFi Credit Union [Member] | Lease Agreement [Member] | ||||
Related Party Transaction [Line Items] | ||||
Fees paid to and expenses with related party | 36 | 36 | 73,000 | 73,000 |
ACCU [Member] | ||||
Related Party Transaction [Line Items] | ||||
Interest earned on funds held with related party | 3 | 1 | 7 | |
Dollar amount of secured borrowings | 1 | 7 | ||
Interest expensed on line of credit | 1 | 20 | 59 | 40 |
ACCU [Member] | MP Securities [Member] | ||||
Related Party Transaction [Line Items] | ||||
Income from related parties | 7 | 10 | 14 | 23 |
ACCU [Member] | Networking Agreement [Member] | MP Securities [Member] | ||||
Related Party Transaction [Line Items] | ||||
Fees paid to and expenses with related party | 10 | 12 | 46 | 52 |
KCT Credit Union [Member] | ||||
Related Party Transaction [Line Items] | ||||
Interest earned on funds held with related party | 10 | 20 | ||
Loans sold to related party | 56 | 7 | 56 | |
Dollar amount of net draws on line of credit | 2,000 | |||
Interest expensed on line of credit | 15 | |||
KCT Credit Union [Member] | MP Securities [Member] | ||||
Related Party Transaction [Line Items] | ||||
Fees paid to and expenses with related party | $ 11 | $ 3 | $ 20 | $ 44 |
Loans Receivable and Allowanc_3
Loans Receivable and Allowance for Loan Losses - Narrative (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2022 USD ($) segment | Jun. 30, 2023 USD ($) loan item | Jun. 30, 2022 loan | Jun. 30, 2023 USD ($) loan segment item | Jun. 30, 2022 loan | Dec. 31, 2022 USD ($) | Jan. 01, 2023 USD ($) | |
Loans and Leases Receivable Disclosure [Line Items] | |||||||
Number of loan categories | item | 8 | 8 | |||||
Accumulated earnings | $ 1,402,000 | $ 72,000 | $ 72,000 | $ 1,402,000 | |||
Allowance for loan losses | $ 1,551,000 | $ 1,512,000 | $ 1,512,000 | $ 1,551,000 | |||
Loan interest rate | 6.38% | 6.46% | |||||
Number of loan portfolio segments | segment | 1 | 2 | |||||
Number of modified loans | loan | 2 | ||||||
Loans modified that are past maturity, write off | loan | 1 | 1 | |||||
Funds committed to be advanced in connection with impaired loans | $ 0 | $ 0 | |||||
Non-profit Commercial Loans | |||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||
Allowance for loan losses | $ 1,530,000 | $ 1,499,000 | $ 1,499,000 | $ 1,530,000 | |||
Number of modified loans | loan | 2 | 1 | 2 | 2 | |||
Recorded investment | $ 6,100,000 | $ 6,100,000 | |||||
Loan restructured subsequently defaulted | loan | 1 | 0 | 0 | ||||
profit Commercial Loans | |||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||
Allowance for loan losses | $ 21,000 | $ 13,000 | $ 13,000 | $ 21,000 | |||
Number of modified loans | loan | 0 | ||||||
Cumulative Effect, Period of Adoption, Adjustment [Member] | Accounting Standards Update 2016-13 [Member] | |||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||
Accumulated earnings | $ 113,000 | ||||||
Allowance for loan losses | 112,000 | $ 112,000 | $ 112,000 | ||||
Cumulative Effect, Period of Adoption, Adjustment [Member] | Accounting Standards Update 2016-13 [Member] | Non-profit Commercial Loans | |||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||
Allowance for loan losses | 128,000 | 128,000 | |||||
Cumulative Effect, Period of Adoption, Adjustment [Member] | Accounting Standards Update 2016-13 [Member] | profit Commercial Loans | |||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||
Allowance for loan losses | $ (16,000) | $ (16,000) |
Loans Receivable and Allowanc_4
Loans Receivable and Allowance for Loan Losses - Summary of Mortgage Loans (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Total loans | $ 92,380 | $ 87,042 | |
Deferred loan fees, net | (198) | (208) | |
Loan discount | (203) | (207) | |
Allowance for loan losses | (1,512) | (1,551) | |
Loans, net | 90,467 | 85,076 | |
Non-profit Commercial Loans | |||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Total loans | 88,242 | 85,202 | |
Allowance for loan losses | (1,499) | (1,530) | |
Non-profit Commercial Loans | Real Estate Secured [Member] | |||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Total loans | 88,155 | 84,878 | |
Non-profit Commercial Loans | Other Secured [Member] | |||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Total loans | 225 | ||
Non-profit Commercial Loans | Unsecured [Member] | |||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Total loans | 87 | 99 | |
profit commercial loans | |||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Total loans | 4,138 | 1,840 | |
Allowance for loan losses | (13) | (21) | |
profit commercial loans | Real Estate Secured [Member] | |||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Total loans | $ 4,138 | 1,840 | |
Commercial loans (previous year) | |||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Allowance for loan losses | $ (1,551) | $ (1,638) |
Loans Receivable and Allowanc_5
Loans Receivable and Allowance for Loan Losses - Schedule of Changes in Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||
Balance, beginning of period | $ 1,551 | ||||
Credit for loan losses | $ 11 | $ 24 | (151) | $ (63) | |
Balance, end of period | 1,512 | 1,512 | $ 1,551 | ||
Non-profit Commercial Loans | |||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||
Balance, beginning of period | 1,530 | ||||
Credit for loan losses | (159) | ||||
Balance, end of period | 1,499 | 1,499 | 1,530 | ||
profit Commercial Loans | |||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||
Balance, beginning of period | 21 | ||||
Credit for loan losses | 8 | ||||
Balance, end of period | 13 | 13 | 21 | ||
Commercial loans (previous year) | |||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||
Balance, beginning of period | 1,551 | $ 1,638 | 1,638 | ||
Credit for loan losses | (296) | ||||
Recoveries | 209 | ||||
Balance, end of period | $ 1,551 | ||||
Cumulative Effect, Period of Adoption, Adjustment [Member] | Accounting Standards Update 2016-13 [Member] | |||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||
Balance, end of period | 112 | 112 | |||
Cumulative Effect, Period of Adoption, Adjustment [Member] | Accounting Standards Update 2016-13 [Member] | Non-profit Commercial Loans | |||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||
Balance, end of period | 128 | 128 | |||
Cumulative Effect, Period of Adoption, Adjustment [Member] | Accounting Standards Update 2016-13 [Member] | profit Commercial Loans | |||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||
Balance, end of period | $ (16) | $ (16) |
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 | Jun. 30, 2023 | Dec. 31, 2022 |
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Loans: Balance | $ 92,380 | $ 87,042 |
Allowance for loan losses: Balance | 1,512 | 1,551 |
Non-profit Commercial Loans | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Loans: Individually evaluated for impairment | 11,648 | 5,933 |
Loans: Collectively evaluated for impairment | 76,594 | 79,269 |
Loans: Balance | 88,242 | 85,202 |
Allowance for loan losses: Individually evaluated for impairment | 616 | 597 |
Allowance for loan losses: Collectively evaluated for impairment | 883 | 933 |
Allowance for loan losses: Balance | 1,499 | 1,530 |
profit Commercial Loans | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Loans: Collectively evaluated for impairment | 4,138 | 1,840 |
Loans: Balance | 4,138 | 1,840 |
Allowance for loan losses: Collectively evaluated for impairment | 13 | 21 |
Allowance for loan losses: Balance | $ 13 | $ 21 |
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 | Jun. 30, 2023 | Dec. 31, 2022 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | $ 92,380 | $ 87,042 |
Non-profit Commercial Loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 88,242 | 85,202 |
Non-profit Commercial Loans | Wholly-Owned First Amortizing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 83,829 | 83,202 |
Non-profit Commercial Loans | Wholly Owned Other Amortizing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 2,971 | 1,448 |
Non-profit Commercial Loans | Wholly Owned Unsecured Amortizing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 57 | 29 |
Non-profit Commercial Loans | Wholly Owned Unsecured LOC | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 58 | 295 |
Non-profit Commercial Loans | Participation First [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 1,327 | 68 |
Non-profit Commercial Loans | Participation Construction | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 160 | |
profit Commercial Loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 4,138 | 1,840 |
profit Commercial Loans | Participation First [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 1,785 | 1,035 |
profit Commercial Loans | Participation Construction | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 2,353 | 805 |
Pass [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 52,691 | 48,932 |
Pass [Member] | Non-profit Commercial Loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 48,553 | 47,092 |
Pass [Member] | Non-profit Commercial Loans | Wholly-Owned First Amortizing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 45,715 | 45,189 |
Pass [Member] | Non-profit Commercial Loans | Wholly Owned Other Amortizing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 1,425 | 1,448 |
Pass [Member] | Non-profit Commercial Loans | Wholly Owned Unsecured Amortizing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 28 | |
Pass [Member] | Non-profit Commercial Loans | Wholly Owned Unsecured LOC | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 58 | 295 |
Pass [Member] | Non-profit Commercial Loans | Participation First [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 1,327 | |
Pass [Member] | Non-profit Commercial Loans | Participation Construction | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 160 | |
Pass [Member] | profit Commercial Loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 4,138 | 1,840 |
Pass [Member] | profit Commercial Loans | Participation First [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 1,785 | 1,035 |
Pass [Member] | profit Commercial Loans | Participation Construction | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 2,353 | 805 |
Watch [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 28,041 | 32,177 |
Watch [Member] | Non-profit Commercial Loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 28,041 | 32,177 |
Watch [Member] | Non-profit Commercial Loans | Wholly-Owned First Amortizing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 28,012 | 32,080 |
Watch [Member] | Non-profit Commercial Loans | Wholly Owned Unsecured Amortizing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 29 | 29 |
Watch [Member] | Non-profit Commercial Loans | Participation First [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 68 | |
Substandard [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 11,435 | 5,430 |
Substandard [Member] | Non-profit Commercial Loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 11,435 | 5,430 |
Substandard [Member] | Non-profit Commercial Loans | Wholly-Owned First Amortizing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 9,889 | 5,430 |
Substandard [Member] | Non-profit Commercial Loans | Wholly Owned Other Amortizing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 1,546 | |
Doubtful [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 213 | 503 |
Doubtful [Member] | Non-profit Commercial Loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 213 | 503 |
Doubtful [Member] | Non-profit Commercial Loans | Wholly-Owned First Amortizing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | $ 213 | $ 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 | Jun. 30, 2023 | Dec. 31, 2022 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | $ 92,380 | $ 87,042 |
30-59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 5,401 | 6,068 |
60-89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 6,063 | |
Greater Than 90 Days [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 1,088 | 1,378 |
Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 12,552 | 7,446 |
Current [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 79,828 | 79,596 |
Non-profit Commercial Loans | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 88,242 | 85,202 |
Non-profit Commercial Loans | 30-59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 5,401 | 6,068 |
Non-profit Commercial Loans | 60-89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 6,063 | |
Non-profit Commercial Loans | Greater Than 90 Days [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 1,088 | 1,378 |
Non-profit Commercial Loans | Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 12,552 | 7,446 |
Non-profit Commercial Loans | Current [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 75,690 | 77,756 |
Non-profit Commercial Loans | Wholly-Owned First Amortizing | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 83,829 | 83,202 |
Non-profit Commercial Loans | Wholly-Owned First Amortizing | 30-59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 5,334 | 6,068 |
Non-profit Commercial Loans | Wholly-Owned First Amortizing | 60-89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 6,063 | |
Non-profit Commercial Loans | Wholly-Owned First Amortizing | Greater Than 90 Days [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 1,088 | 1,378 |
Non-profit Commercial Loans | Wholly-Owned First Amortizing | Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 12,485 | 7,446 |
Non-profit Commercial Loans | Wholly-Owned First Amortizing | Current [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 71,344 | 75,756 |
Non-profit Commercial Loans | Wholly Owned Other Amortizing | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 2,971 | 1,448 |
Non-profit Commercial Loans | Wholly Owned Other Amortizing | Current [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 2,971 | 1,448 |
Non-profit Commercial Loans | Wholly Owned Unsecured Amortizing | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 57 | 29 |
Non-profit Commercial Loans | Wholly Owned Unsecured Amortizing | Current [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 57 | 29 |
Non-profit Commercial Loans | Wholly Owned Unsecured LOC | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 58 | 295 |
Non-profit Commercial Loans | Wholly Owned Unsecured LOC | Current [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 58 | 295 |
Non-profit Commercial Loans | Participation First [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 1,327 | 68 |
Non-profit Commercial Loans | Participation First [Member] | 30-59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 67 | |
Non-profit Commercial Loans | Participation First [Member] | Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 67 | |
Non-profit Commercial Loans | Participation First [Member] | Current [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 1,260 | 68 |
Non-profit Commercial Loans | Participation Construction | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 160 | |
Non-profit Commercial Loans | Participation Construction | Current [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 160 | |
profit Commercial Loans | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 4,138 | 1,840 |
profit Commercial Loans | Current [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 4,138 | 1,840 |
profit Commercial Loans | Participation First [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 1,785 | 1,035 |
profit Commercial Loans | Participation First [Member] | Current [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 1,785 | 1,035 |
profit Commercial Loans | Participation Construction | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 2,353 | 805 |
profit Commercial Loans | Participation Construction | Current [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | $ 2,353 | $ 805 |
Loans Receivable and Allowanc_9
Loans Receivable and Allowance for Loan Losses - Impaired Loans by Class (Details) - Non-profit Commercial Loans - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Impaired Financing Receivable, Average Recorded Investment [Abstract] | |||||
Average Recorded Investment | $ 26,361 | $ 14,808 | $ 22,801 | $ 13,175 | |
Impaired Financing Receivable, Interest Income, Cash Basis Method [Abstract] | |||||
Interest Income Recognized | 439 | 161 | 737 | 331 | |
Impaired Financing Receivable, Recorded Investment [Abstract] | |||||
Recorded Investment with allowance | 4,626 | 4,626 | $ 15,569 | ||
Recorded Investment with no Allowance | 20,808 | 20,808 | 4,598 | ||
Total Recorded Investment | 25,434 | 25,434 | 20,167 | ||
Unpaid Principal Balance | 25,938 | 25,938 | 20,419 | ||
Wholly-Owned First Amortizing | |||||
Impaired Financing Receivable, Average Recorded Investment [Abstract] | |||||
Average Recorded Investment | 24,793 | 13,173 | 22,028 | 11,540 | |
Impaired Financing Receivable, Interest Income, Cash Basis Method [Abstract] | |||||
Interest Income Recognized | 439 | 161 | 737 | 331 | |
Impaired Financing Receivable, Recorded Investment [Abstract] | |||||
Recorded Investment with allowance | 3,080 | 3,080 | 15,569 | ||
Recorded Investment with no Allowance | 20,808 | 20,808 | 4,598 | ||
Total Recorded Investment | 23,888 | 23,888 | 20,167 | ||
Unpaid Principal Balance | 24,253 | 24,253 | $ 20,419 | ||
Wholly-Owned Junior [Member] | |||||
Impaired Financing Receivable, Average Recorded Investment [Abstract] | |||||
Average Recorded Investment | 1,568 | $ 1,635 | 773 | $ 1,635 | |
Impaired Financing Receivable, Recorded Investment [Abstract] | |||||
Recorded Investment with allowance | 1,546 | 1,546 | |||
Total Recorded Investment | 1,546 | 1,546 | |||
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) - Non-profit Commercial Loans - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Nonaccrual loans | $ 11,648 | $ 5,933 |
Wholly-Owned First Amortizing | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Nonaccrual loans | 10,102 | $ 5,933 |
Wholly-Owned Junior [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Nonaccrual loans | $ 1,546 |
Loans Receivable and Allowan_11
Loans Receivable and Allowance for Loan Losses - Schedule of Loan Modifications (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 USD ($) loan | Jun. 30, 2022 USD ($) loan | Jun. 30, 2023 USD ($) loan | Jun. 30, 2022 USD ($) loan | |
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Number of Loans | loan | 2 | |||
Non-profit Commercial Loans | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Number of Loans | loan | 2 | 1 | 2 | 2 |
Pre-Modification Outstanding Recorded Investment | $ 6,253 | $ 1,196 | $ 6,253 | $ 2,192 |
Post-Modification Outstanding Recorded Investment | 6,253 | 1,196 | 6,253 | 2,192 |
Recorded Investment At Period End | 6,247 | $ 1,196 | 6,247 | $ 2,192 |
Amount of loan outstanding at time of modification | $ 6,100 | $ 6,100 | ||
Non-profit Commercial Loans | Wholly-Owned First Amortizing | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Number of Loans | loan | 2 | 1 | 2 | 2 |
Pre-Modification Outstanding Recorded Investment | $ 6,253 | $ 1,196 | $ 6,253 | $ 2,192 |
Post-Modification Outstanding Recorded Investment | 6,253 | 1,196 | 6,253 | 2,192 |
Recorded Investment At Period End | $ 6,247 | $ 1,196 | $ 6,247 | $ 2,192 |
Investments in Joint Venture -
Investments in Joint Venture - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2015 | |
Schedule of Equity Method Investments [Line Items] | ||||||
Investment in joint venture | $ 883 | $ 883 | $ 870 | $ 900 | ||
Investment income recognized | $ 31 | $ 15 | ||||
Respective contributions balance reduced to zero | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Percentage of profit entitled | 30% | |||||
Indexed annuity insurance contracts | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Investment income recognized | $ 30 | $ 15 | $ 31 | $ 15 | ||
Tesoro Hills [Member] | Ministry Partners Investment Company [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage held | 74% | 74% | 74% | 100% |
Investments in Joint Venture _2
Investments in Joint Venture - Certificates of Deposit (Details) - Certificates of Deposit $ in Thousands | Jun. 30, 2023 USD ($) |
Investment Holdings [Line Items] | |
Interest-Bearing Domestic Deposit, Certificates of Deposits | $ 1,250 |
Interest rate | 2.85% |
Investments in Joint Venture _3
Investments in Joint Venture - Other Investments (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 USD ($) contract | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | |
Investment Holdings [Line Items] | |||||
Investment income recognized | $ 31 | $ 15 | |||
Indexed annuity insurance contracts | |||||
Investment Holdings [Line Items] | |||||
Number of contracts | contract | 2 | ||||
Contracted Period | 10 years | ||||
Original Cost | $ 1,000 | $ 1,000 | 1,000 | ||
Net Carrying Amount | $ 1,049 | 1,049 | |||
Investment income recognized | $ 30 | $ 15 | $ 31 | $ 15 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Disaggregated Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total income | $ 1,524 | $ 576 | $ 2,202 | $ 2,410 |
Broker-Dealer Fees and Commissions | ||||
Disaggregation of Revenue [Line Items] | ||||
Non-interest income, in scope of ASC 606 | 138 | 217 | 353 | 516 |
Gain on Loan Sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Non-interest income, in scope of ASC 606 | 7 | 14 | 3 | |
Other investment income | ||||
Disaggregation of Revenue [Line Items] | ||||
Non-interest income, in scope of ASC 606 | 30 | 15 | 31 | 15 |
Other Non-Interest Income | ||||
Disaggregation of Revenue [Line Items] | ||||
Non-interest income, in scope of ASC 606 | 4 | 9 | ||
Lending Fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Non-interest income, out of scope, ASC 606 | 45 | 44 | 95 | 76 |
Gain on debt extinguishment | ||||
Disaggregation of Revenue [Line Items] | ||||
Non-interest income, out of scope, ASC 606 | $ 300 | $ 1,800 | ||
Charitable contributions, with donor restrictions | ||||
Disaggregation of Revenue [Line Items] | ||||
Non-interest income, out of scope, ASC 606 | $ 1,300 | $ 1,700 |
Revenue Recognition - Revenue f
Revenue Recognition - Revenue from Management Of Invested Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Broker-Dealer Revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customer | $ 138 | $ 217 | $ 353 | $ 516 |
Broker-Dealer Revenue, Transactional | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customer | 16 | 85 | 111 | 248 |
Broker-Dealer Revenue, AUM | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customer | 122 | 132 | 242 | 268 |
Securities Commissions Revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customer | 15 | 25 | 42 | 125 |
Securities Commissions Revenue, Transactional | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customer | 2 | 13 | 16 | 102 |
Securities Commissions Revenue, AUM | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customer | 13 | 12 | 26 | 23 |
Sale Of Investment Company Shares Revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customer | 23 | 21 | 43 | 61 |
Sale Of Investment Company Shares Revenue, Transactional | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customer | 5 | 1 | 8 | 16 |
Sale Of Investment Company Shares Revenue, AUM | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customer | 18 | 20 | 35 | 45 |
Other Insurance Product Revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customer | 21 | 81 | 111 | 147 |
Other Insurance Product Revenue, Transactional | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customer | 9 | 71 | 87 | 127 |
Other Insurance Product Revenue, AUM | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customer | 12 | 10 | 24 | 20 |
Advisory Fee Income | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customer | 79 | 90 | 157 | 183 |
Advisory Fee Income, Transactional | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customer | 3 | |||
Advisory Fee Income, AUM | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customer | $ 79 | $ 90 | $ 157 | $ 180 |
Loan Sales - Narrative (Details
Loan Sales - Narrative (Details) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) loan | Dec. 31, 2022 USD ($) | |
Loan participations sold | $ 502,000 | $ 1,216,000 | $ 3,716,000 |
ACCU [Member] | |||
Number of loans sold | loan | 2 | ||
ACCU [Member] | Master LP Agreement [Member] | |||
Loans sold to related party | 7,000 | $ 7,000 | $ 7,000 |
Loan participations sold | $ 0 |
Loan Sales - Schedule of Servic
Loan Sales - Schedule of Servicing Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Loan participation interests sold by the Company | $ 502 | $ 1,216 | $ 3,716 |
Total participation interests sold and serviced by the Company | 32,248 | 39,671 | 34,946 |
Balance, beginning of period | 123 | 170 | 170 |
Additions: Servicing obligations from sale of loan participations | 18 | 3 | 19 |
Subtractions: Amortization | (20) | (45) | (66) |
Balance, end of period | 121 | 128 | 123 |
Servicing Assets [Member] | |||
Income from related party | $ 71 | $ 69 | $ 153 |
Foreclosed Assets - Narrative (
Foreclosed Assets - Narrative (Details) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2023 USD ($) property | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) property | |
Foreclosed Assets [Abstract] | |||
Number of foreclosed assets | property | 1 | 1 | |
Foreclosed assets, net | $ 301,000 | $ 301,000 | |
Allowance for losses on foreclosed assets | 0 | $ 0 | |
Provision for losses on foreclosed assets | $ 0 | $ 0 |
Foreclosed Assets - Foreclosed
Foreclosed Assets - Foreclosed Asset Expenses (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Foreclosed Assets [Abstract] | ||||
Provision for losses | $ 0 | $ 0 | ||
Operating expenses | $ 5,000 | $ 4,000 | 9,000 | 9,000 |
Total foreclosed asset expenses | $ 5,000 | $ 4,000 | $ 9,000 | $ 9,000 |
Premises and Equipment - Summar
Premises and Equipment - Summary of Premises and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | |||||
Total premises and equipment | $ 791 | $ 791 | $ 791 | ||
Less accumulated depreciation and amortization | (672) | (672) | (651) | ||
Premises and equipment, net | 119 | 119 | 140 | ||
Depreciation and amortization expense | 11 | $ 11 | 21 | $ 22 | |
Furniture And Office Equipment [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Total premises and equipment | 528 | 528 | 528 | ||
Computer System [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Total premises and equipment | 220 | 220 | 220 | ||
Leasehold Improvements [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Total premises and equipment | $ 43 | $ 43 | $ 43 |
Credit Facilities and Other D_3
Credit Facilities and Other Debt - Summary of Principal Terms of Term Debt (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Line of Credit Facility [Line Items] | ||
Debt facilities | $ 93,080,000 | $ 79,158,000 |
Amount outstanding, Line of credit | 3,000,000 | |
ACCU Line of Credit. 8.250% maturing September 23, 2023 | ||
Line of Credit Facility [Line Items] | ||
Interest Rate, Line of Credit | 8.25% | |
Debt facilities | $ 0 | |
ACCU Line of Credit. 8.250% maturing September 23, 2023 | ||
Line of Credit Facility [Line Items] | ||
Debt facilities | 3,000,000 | |
ACCU line of credit | KCT Warehouse LOC, 8.500% maturing on June 6, 2023 | ||
Line of Credit Facility [Line Items] | ||
Interest Rate, Line of Credit | 8.50% | |
ACCU line of credit | KCT Operating LOC, 8.500% maturing on June 6, 2023 | ||
Line of Credit Facility [Line Items] | ||
Interest Rate, Line of Credit | 8.50% | |
ACCU line of credit | ACCU Line of Credit. 8.250% maturing September 23, 2023 | ||
Line of Credit Facility [Line Items] | ||
Interest Rate, Line of Credit | 8.25% | |
Secured term-debt | ACCU Secured, Various Interest Rate, Maturing on various dates | ||
Line of Credit Facility [Line Items] | ||
Debt facilities | $ 7,000 | |
Loans Receivable [Member] | ACCU Line of Credit. 8.250% maturing September 23, 2023 | ||
Line of Credit Facility [Line Items] | ||
Amount of Collateral Pledged | 6,700,000 | $ 6,700,000 |
Loans Receivable [Member] | ACCU line of credit | KCT Warehouse LOC, 8.500% maturing on June 6, 2023 | ||
Line of Credit Facility [Line Items] | ||
Amount of Collateral Pledged | 5,975,000 | |
Loans Receivable [Member] | ACCU line of credit | KCT Operating LOC, 8.500% maturing on June 6, 2023 | ||
Line of Credit Facility [Line Items] | ||
Amount of Collateral Pledged | 4,797,000 | |
Loans Receivable [Member] | ACCU line of credit | ACCU Line of Credit. 8.250% maturing September 23, 2023 | ||
Line of Credit Facility [Line Items] | ||
Amount of Collateral Pledged | 6,720,000 | |
Cash [Member] | ACCU line of credit | KCT Warehouse LOC, 8.500% maturing on June 6, 2023 | ||
Line of Credit Facility [Line Items] | ||
Amount of Collateral Pledged | 1,250,000 | |
Cash [Member] | Secured term-debt | ACCU Secured, Various Interest Rate, Maturing on various dates | ||
Line of Credit Facility [Line Items] | ||
Amount of Collateral Pledged | $ 7,000 |
Credit Facilities and Other D_4
Credit Facilities and Other Debt - Narrative (Details) | 3 Months Ended | 6 Months Ended | |||||
Jun. 06, 2022 USD ($) item | Sep. 23, 2021 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Sep. 29, 2022 | |
Line of Credit Facility [Line Items] | |||||||
Debt facilities | $ 93,080,000 | $ 79,158,000 | |||||
Lines of credit | 3,000,000 | ||||||
Principal prepayment | 3,000,000 | ||||||
Gain on debt extinguishment | $ 300,000 | $ 1,800,000 | |||||
Amount outstanding, Line of credit | 3,000,000 | ||||||
Other secured borrowings | 7,000 | 7,000 | |||||
ACCU Secured, Various Interest Rate, Maturing on various dates | |||||||
Line of Credit Facility [Line Items] | |||||||
Other secured borrowings | 7,000 | 7,000 | |||||
ACCU Line of Credit. 8.250% maturing September 23, 2023 | |||||||
Line of Credit Facility [Line Items] | |||||||
Debt facilities | $ 0 | ||||||
Minimum collateralization ratio | 120% | ||||||
Interest rate | 8.25% | ||||||
Minimum Liquidity | $ 10,000,000 | ||||||
Maximum borrowing capacity | $ 5,000,000 | ||||||
Facility maturity date | Sep. 23, 2022 | ||||||
Spread over prime rate | 0.75% | ||||||
Facility renewal period | 1 year | ||||||
Minimum cancellation notice | 90 days | ||||||
Maturity period | 1 year | ||||||
ACCU Line of Credit. 8.250% maturing September 23, 2023 | Minimum [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Interest rate | 4% | ||||||
ACCU Line of Credit. 8.250% maturing September 23, 2023 | Loans Receivable [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Collateral pledged | $ 6,700,000 | 6,700,000 | |||||
Kct Warehousing And Operating Line Of Credit [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Minimum Net Worth to be maintained | $ 5,000,000 | ||||||
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% | ||||||
KCT Warehouse LOC, 8.500% maturing on June 6, 2023 | |||||||
Line of Credit Facility [Line Items] | |||||||
Maximum borrowing capacity | $ 5,000,000 | ||||||
KCT Operating LOC, 8.500% maturing on June 6, 2023 | |||||||
Line of Credit Facility [Line Items] | |||||||
Maximum borrowing capacity | $ 5,000,000 | ||||||
ACCU Line of Credit. 8.250% maturing September 23, 2023 | |||||||
Line of Credit Facility [Line Items] | |||||||
Debt facilities | $ 3,000,000 | ||||||
KCT Credit Union [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Interest rate | 2.85% | ||||||
Number of short-term demand credit facilities | item | 2 | ||||||
Debt repaid | $ 7,000,000 | ||||||
KCT Credit Union [Member] | KCT Warehouse LOC, 8.500% maturing on June 6, 2023 | |||||||
Line of Credit Facility [Line Items] | |||||||
Debt facilities | $ 0 | ||||||
Interest rate | 8.50% | ||||||
Maximum borrowing capacity | $ 5,000,000 | ||||||
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 | $ 6,000,000 | ||||||
Certificate of Deposit Acquired | $ 1,250,000 | ||||||
KCT Credit Union [Member] | KCT Warehouse LOC, 8.500% maturing on June 6, 2023 | 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, 8.500% maturing on June 6, 2023 | Minimum [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Minimum collateralization ratio | 120% | ||||||
KCT Credit Union [Member] | KCT Operating LOC, 8.500% maturing on June 6, 2023 | |||||||
Line of Credit Facility [Line Items] | |||||||
Debt facilities | $ 0 | ||||||
Interest rate | 8.50% | ||||||
Secured by cash | 25% | ||||||
Maximum borrowing capacity | $ 5,000,000 | ||||||
Spread over prime rate | 0.50% | ||||||
Maturity period | 1 year | ||||||
Delinquency period | 60 days | ||||||
Collateral pledged | $ 4,800,000 | ||||||
KCT Credit Union [Member] | KCT Operating LOC, 8.500% maturing on June 6, 2023 | 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, 8.500% maturing on June 6, 2023 | Minimum [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Minimum collateralization ratio | 120% | ||||||
ACCU [Member] | ACCU Line of Credit. 8.250% maturing September 23, 2023 | |||||||
Line of Credit Facility [Line Items] | |||||||
Maximum borrowing capacity | $ 5,000,000 |
Debt Securities Payable - Narra
Debt Securities Payable - Narrative (Details) $ in Thousands | 6 Months Ended | |||
Jun. 30, 2023 USD ($) item | Dec. 31, 2022 USD ($) | Jan. 08, 2021 USD ($) | Feb. 27, 2018 USD ($) | |
Debt Instrument [Line Items] | ||||
Debt issuance costs | $ 47 | $ 58 | ||
Class 1A [Member] | ||||
Debt Instrument [Line Items] | ||||
Number of series in class of notes | item | 2 | |||
Notes authorized, maximum | $ 90,000 | |||
2021 Class A Offering [Member] | ||||
Debt Instrument [Line Items] | ||||
Number of series in class of notes | item | 2 | |||
Notes authorized, maximum | $ 125,000 | |||
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 |
Debt Securities Payable - Sched
Debt Securities Payable - Schedule of Debt Securities Payable (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Total Debt Securities Payable | $ 93,080 | $ 79,158 |
Weighted Average Interest Rate | 4.54% | 4.19% |
Public Offerings [Member] | ||
Debt Instrument [Line Items] | ||
Total Debt Securities Payable | $ 79,420 | $ 66,633 |
Weighted Average Interest Rate | 4.52% | 4.11% |
Public Offerings [Member] | 2021 Class A Offering [Member] | ||
Debt Instrument [Line Items] | ||
Total Debt Securities Payable | $ 61,553 | $ 45,935 |
Weighted Average Interest Rate | 4.60% | 4.04% |
Public Offerings [Member] | Class 1A [Member] | ||
Debt Instrument [Line Items] | ||
Total Debt Securities Payable | $ 17,867 | $ 20,698 |
Weighted Average Interest Rate | 4.26% | 4.27% |
Private Offerings [Member] | ||
Debt Instrument [Line Items] | ||
Total Debt Securities Payable | $ 13,660 | $ 12,525 |
Weighted Average Interest Rate | 4.66% | 4.56% |
Private Offerings [Member] | Subordinated Notes [Member] | ||
Debt Instrument [Line Items] | ||
Total Debt Securities Payable | $ 13,660 | $ 12,525 |
Weighted Average Interest Rate | 4.66% | 4.56% |
Debt Securities Payable - Sch_2
Debt Securities Payable - Schedule of Maturities of Debt Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Total | $ 93,080 | $ 79,158 |
Deferred Finance Costs, Net | 47 | 58 |
Debt securities payable, net of debt issuance costs | 93,033 | $ 79,100 |
Notes Payable [Member] | ||
Debt Instrument [Line Items] | ||
2024 | 43,711 | |
2025 | 14,120 | |
2026 | 17,678 | |
2027 | 14,168 | |
2028 | 3,403 | |
Total | 93,080 | |
Deferred Finance Costs, Net | 47 | |
Debt securities payable, net of debt issuance costs | $ 93,033 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - item | Jun. 30, 2023 | Apr. 30, 2022 | Jan. 31, 2019 |
Brea [Member] | |||
Commitments And Contingencies [Line Items] | |||
Lease renewal | 5 years | ||
Number of lease extension options remaining | 0 | ||
Fresno [Member] | |||
Commitments And Contingencies [Line Items] | |||
Lease renewal | 3 years |
Commitments and Contingencies_2
Commitments and Contingencies - Unfunded Commitments (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Commitments and Contingencies [Abstract] | ||
Undisbursed loans | $ 301 | $ 355 |
Commitments and Contingencies_3
Commitments and Contingencies - Allowance for credit losses on off-balance sheet commitments (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Off-Balance-Sheet, Credit Loss, Liability [Roll Forward] | |
Balance, end of period | $ 1 |
Cumulative Effect, Period of Adoption, Adjustment [Member] | Accounting Standards Update 2016-13 [Member] | |
Off-Balance-Sheet, Credit Loss, Liability [Roll Forward] | |
Provision for losses on unfunded commitments | 1 |
Balance, end of period | $ 1 |
Commitments and Contingencies_4
Commitments and Contingencies - Information About Existing Operating Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Commitments and Contingencies [Abstract] | |||||
Operating lease cost | $ 44 | $ 42 | $ 88 | $ 87 | $ 175 |
Cash paid for operating leases | $ 44 | 46 | $ 95 | 96 | 185 |
Right-of-use assets obtained in exchange for operating lease liabilities | 84 | 106 | 106 | ||
Lease liabilities recorded | $ 84 | $ 101 | $ 101 | ||
Weighted average remaining lease term (in years) | 1 year 7 days | 1 year 10 months 28 days | 1 year 7 days | 1 year 10 months 28 days | 1 year 5 months 15 days |
Weighted-average discount rate | 4.28% | 4.38% | 4.28% | 4.38% | 4.33% |
Commitments and Contingencies_5
Commitments and Contingencies - Future Minimum Lease Payments and Lease Costs (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
Commitments and Contingencies [Abstract] | |
Lease Payments, 2024 | $ 113 |
Lease Payments, 2025 | 28 |
Lease Payments, Total | 141 |
Lease Costs, 2024 | 110 |
Lease Costs, 2025 | 28 |
Lease Costs, Total | $ 138 |
Preferred and Common Units Un_2
Preferred and Common Units Under LLC Structure - Narrative (Details) | 6 Months Ended | |
Jun. 30, 2023 item / shares item $ / shares | Dec. 31, 2022 $ / shares | |
Class of Stock [Line Items] | ||
Liquidation preference, per share | $ / shares | $ 100 | $ 100 |
Preferred Stock [Member] | ||
Class of Stock [Line Items] | ||
Spread over LIBOR | 0.25% | |
Interest rate measurement period | 1 year | |
Preferred stock, dividend payment rate | 10% | |
Liquidation preference, per share | $ / shares | $ 100 | |
Number of voting rights | item / shares | 0 | |
Threshold of number of consecutive quarters without paid preferred return for appointment of managers | item | 4 | |
Number of managers that can be appointed after threshold for period of unpaid preferred returns reached | item | 2 |
Retirement Plans - Narrative (D
Retirement Plans - Narrative (Details) - USD ($) | 6 Months Ended | |||
Mar. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Aug. 31, 2022 | |
401(k) plan [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
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 | $ 50,000 | $ 51,000 | ||
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 | |||
Percentage vested | 70% | |||
Percentage increase each August until fully vested | 15% |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 USD ($) contract | Dec. 31, 2022 USD ($) | |
Fair Value Measurements [Abstract] | ||
Number of indexed annuity insurance contracts | contract | 2 | |
Impairment of the annuity investments | $ | $ 0 | $ 0 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Carrying Value | ||
FINANCIAL ASSETS: | ||
Fair Value, Cash and restricted cash | $ 15,029 | $ 9,564 |
Certificates of deposit | 1,250 | 1,250 |
Loans, net | 90,467 | 85,076 |
Investments in joint venture | 883 | 870 |
Other investments | 1,049 | 1,018 |
Accrued interest receivable | 406 | 477 |
Servicing Asset at Fair Value, Amount | 121 | 123 |
FINANCIAL LIABILITIES: | ||
Lines of Credit, Fair Value Disclosure | 3,000 | |
Fair Value, Other secured borrowings | 7 | 7 |
Fair Value, Debt securities payable | 93,033 | 79,100 |
Fair Value, Other financial liabilities | 546 | 462 |
Fair Value [Member] | ||
FINANCIAL ASSETS: | ||
Fair Value, Cash and restricted cash | 15,029 | 9,564 |
Certificates of deposit | 1,248 | 1,243 |
Loans, net | 87,890 | 83,525 |
Investments in joint venture | 883 | 870 |
Other investments | 1,049 | 1,018 |
Accrued interest receivable | 406 | 477 |
Servicing Asset at Fair Value, Amount | 121 | 123 |
FINANCIAL LIABILITIES: | ||
Lines of Credit, Fair Value Disclosure | 3,026 | |
Fair Value, Other secured borrowings | 7 | 7 |
Fair Value, Debt securities payable | 92,932 | 78,330 |
Fair Value, Other financial liabilities | 546 | 462 |
Quoted Prices In Active Markets For Identical Assets Level 1 [Member] | ||
FINANCIAL ASSETS: | ||
Fair Value, Cash and restricted cash | 15,029 | 9,564 |
Significant Other Observable Inputs Level 2 [Member] | ||
FINANCIAL ASSETS: | ||
Certificates of deposit | 1,248 | 1,243 |
Significant Unobservable Inputs Level 3 [Member] | ||
FINANCIAL ASSETS: | ||
Carrying Value, Other investments | 1,049 | 1,018 |
Loans, net | 87,890 | 83,525 |
Investments in joint venture | 883 | 870 |
Other investments | 1,049 | 1,018 |
Accrued interest receivable | 406 | 477 |
Servicing Asset at Fair Value, Amount | 121 | 123 |
FINANCIAL LIABILITIES: | ||
Lines of Credit, Fair Value Disclosure | 3,026 | |
Fair Value, Other secured borrowings | 7 | 7 |
Fair Value, Debt securities payable | 92,932 | 78,330 |
Fair Value, Other financial liabilities | $ 546 | $ 462 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Fair Value Measured on a Nonrecurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Foreclosed assets (net of allowance) | $ 301 | $ 301 |
Significant Unobservable Inputs Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Loans, net | 87,890 | 83,525 |
Investment in joint venture | 883 | 870 |
Other investments | 1,049 | 1,018 |
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] | ||
Loans, net | 5,495 | 5,259 |
Investment in joint venture | 883 | 870 |
Other investments | 1,049 | 1,018 |
Foreclosed assets (net of allowance) | 301 | 301 |
Total | 7,728 | 7,448 |
Fair Value Measured On A Nonrecurring Basis [Member] | Significant Unobservable Inputs Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Loans, net | 5,495 | 5,259 |
Investment in joint venture | 883 | 870 |
Other investments | 1,049 | 1,018 |
Foreclosed assets (net of allowance) | 301 | 301 |
Total | $ 7,728 | $ 7,448 |
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 | Jun. 30, 2023 USD ($) item | Dec. 31, 2022 USD ($) item | Dec. 31, 2015 USD ($) |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Investment in joint venture | $ | $ 883 | $ 870 | $ 900 |
Foreclosed assets | $ | 301 | 301 | |
Significant Unobservable Inputs Level 3 [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Impaired Loans | $ | 5,495 | 5,259 | |
Investment in joint venture | $ | 883 | 870 | |
Other investments | $ | 1,049 | 1,018 | |
Foreclosed assets | $ | $ 301 | $ 301 | |
Significant Unobservable Inputs Level 3 [Member] | Joint Venture [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Investment in joint venture, measurement input | 0 | 0 | |
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 | 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. measurement input | 0.06 | 0.06 | |
Minimum [Member] | Significant Unobservable Inputs Level 3 [Member] | Impaired Loans [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Impaired loans, measurement input | 0.10 | 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 | 0.18 | 0.28 | |
Weighted Average [Member] | Significant Unobservable Inputs Level 3 [Member] | Joint Venture [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Investment in joint venture, measurement input | 0 | 0 | |
Weighted Average [Member] | Significant Unobservable Inputs Level 3 [Member] | Other Investments [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Other investments, measurement input | 0 | 0 | |
Weighted Average [Member] | Significant Unobservable Inputs Level 3 [Member] | Foreclosed Assets [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Foreclosed assets. measurement input | 0.06 | 0.06 |
Income Taxes and State LLC Fe_2
Income Taxes and State LLC Fees - Narrative (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Line Items] | |||
Percentage of net investment income to calculate provision for federal excise tax | 1% | ||
Maximum [Member] | |||
Income Tax Disclosure [Line Items] | |||
Federal excise tax rate | 2% | ||
Minimum [Member] | |||
Income Tax Disclosure [Line Items] | |||
Federal excise tax rate | 1% | ||
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] | |||
Recorded provision | $ 800 | $ 800 | |
Operating loss carryforwards | $ 432,000 | $ 422,000 | |
Valuation allowance, percentage | 100% | 100% |
Segment Information - Narrative
Segment Information - Narrative (Details) | 6 Months Ended |
Jun. 30, 2023 segment | |
Segment Information [Abstract] | |
Number of segments | 3 |
Segment Information - Schedule
Segment Information - Schedule of Financial Information by Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Segment Reporting Information [Line Items] | |||||
Revenue | $ 1,524 | $ 576 | $ 2,202 | $ 2,410 | |
Net profit (loss) | 895 | 29 | 827 | 385 | |
Total assets | 110,195 | 110,195 | $ 99,363 | ||
Gain on debt extinguishment | 300 | 1,800 | |||
External Sources [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 3,070 | 1,981 | 5,133 | 5,340 | |
Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Interest expense | 1,081 | 811 | 1,999 | 1,672 | |
Total non-interest expense and provision for tax | 1,083 | 1,117 | 2,458 | 3,346 | |
Net profit (loss) | 895 | 29 | 827 | 385 | |
Adjustments/Eliminations [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Interest expense | (386) | (278) | (720) | (568) | |
Total non-interest expense and provision for tax | (50) | (50) | |||
Net profit (loss) | 56 | 118 | (71) | 123 | |
Total assets | (114) | (114) | (136) | ||
Adjustments/Eliminations [Member] | Internal Sources [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | (329) | (209) | (790) | (494) | |
Finance Company [Member] | External Sources [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Gain on debt extinguishment | 300 | 1,800 | |||
Finance Company [Member] | Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Interest expense | 1,467 | 1,089 | 2,719 | 2,240 | |
Total non-interest expense and provision for tax | 745 | 801 | 1,706 | 2,448 | |
Net profit (loss) | (676) | (166) | (1,312) | 184 | |
Total assets | 103,182 | 103,182 | 94,523 | ||
Finance Company [Member] | Operating Segments [Member] | External Sources [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 1,546 | 1,748 | 2,962 | 4,808 | |
Broker Dealer [Member] | Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total non-interest expense and provision for tax | 333 | 325 | 747 | 897 | |
Net profit (loss) | 214 | 118 | 509 | 130 | |
Total assets | 5,002 | 5,002 | 4,553 | ||
Broker Dealer [Member] | Operating Segments [Member] | External Sources [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 218 | 233 | 465 | 532 | |
Broker Dealer [Member] | Operating Segments [Member] | Internal Sources [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 329 | 209 | 790 | 494 | |
Other Segments [Member] | Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total assets | 56 | 56 | 55 | ||
Charitable Organization [Member] | Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total non-interest expense and provision for tax | 5 | 41 | 5 | 51 | |
Net profit (loss) | 1,301 | $ (41) | 1,701 | $ (52) | |
Total assets | 2,069 | 2,069 | $ 368 | ||
Charitable Organization [Member] | Operating Segments [Member] | External Sources [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | $ 1,306 | $ 1,706 |
Not-for-profit Disclosures (Det
Not-for-profit Disclosures (Details) - MPC - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Not-for-profit Disclosures | ||
Cash held in checking account | $ 303 | $ 303 |
Cash that carries permanent donor restrictions | 1,700 | 1,700 |
Net assets | 2,100 | 368 |
Net assets permanently restricted by donors | $ 1,700 | $ 0 |
Not-for-profit Disclosures - Br
Not-for-profit Disclosures - Breakdown of expenses (Details) - MPC - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Not-for-profit Disclosures | ||||
Charitable grants | $ 40 | $ 50 | ||
General and administrative expenses | $ 5 | 1 | $ 5 | 1 |
Total | $ 5 | $ 41 | $ 5 | $ 51 |
Not-for-profit Disclosures - Ch
Not-for-profit Disclosures - Change in net assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
MPC | ||||
Not-for-profit Disclosures | ||||
Change in net assets | $ 1,301 | $ (41) | $ 1,701 | $ (52) |