Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Mar. 28, 2014 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'AMERICAN CHURCH MORTGAGE CO | ' |
Entity Central Index Key | '0000934543 | ' |
Document Type | '10-K | ' |
Document Period End Date | 31-Dec-13 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Is Entity a Well-known Seasoned Issuer? | 'No | ' |
Is Entity a Voluntary Filer? | 'No | ' |
Is Entity's Reporting Status Current? | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Public Float | ' | $1,677,798 |
Entity Common Stock, Shares Outstanding | ' | 1,677,798 |
Document Fiscal Period Focus | 'FY | ' |
Document Fiscal Year Focus | '2013 | ' |
Balance_Sheets
Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Current Assets | ' | ' |
Cash and equivalents | $3,143,377 | $1,183,787 |
Accounts receivable | 197,687 | 139,572 |
Interest receivable | 129,972 | 134,083 |
Current maturities of mortgage loans receivable, net of allowance of $25,269 and $49.976 and deferred origination fees of $24,007 and $60,685 at December 31, 2013 and December 31, 2012, respectively | 660,490 | 1,656,692 |
Current maturities of bond portfolio, at fair value | 796,000 | 1,236,000 |
Prepaid expenses | 6,638 | 5,467 |
Total current assets | 4,934,164 | 4,355,601 |
Mortgage Loans Receivable, net of current maturities, allowance of$924,424 and $798,758 and deferred origination fess of $324,861 and $453,849 at December 31, 2013 and December 31, 2012, respectively | 24,716,310 | 27,000,439 |
Bond Portfolio, at fair value, net of current maturities | 8,283,442 | 7,143,708 |
Real Estate Held for Sale | 562,722 | 713,297 |
Deferred Offering Costs, net of accumulated amortization of $728,012 and $937,352 at December 31, 2013 and December 31, 2012, respectively | 709,919 | 817,526 |
Total Assets | 39,206,557 | 40,030,571 |
Current Liabilities | ' | ' |
Current maturities of secured investor certificates | 1,876,000 | 1,103,000 |
Accounts payable | 21,565 | 20,041 |
Dividends payable | 167,780 | 218,114 |
Total current liabilities | 2,065,345 | 1,341,155 |
Deposit on real estate held for sale | 61,600 | 61,600 |
Secured Investor Certificates, Series B, net of current maturities | 15,887,000 | 17,131,000 |
Secured Investor Certificates, Series C | 7,932,000 | 7,932,000 |
Total liabilities | 25,945,945 | 26,465,755 |
Stockholders' Equity | ' | ' |
Common stock, par value $.01 per share, Authorized, 30,000,000 shares, Issued and outstanding, 1,677,798 shares at December 31, 2013 and 2012, respectively | 16,778 | 16,778 |
Additional paid-in capital | 19,113,458 | 19,113,458 |
Accumulated deficit | -5,869,624 | -5,565,420 |
Total stockholders' equity | 13,260,612 | 13,564,816 |
Total Liabilities and Stockholders' Equity | $39,206,557 | $40,030,571 |
Balance_Sheets_Parenthetical
Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Current Assets | ' | ' |
Current allowance for current maturities of mortgage loans recievable | $25,269 | $49,976 |
Current deferred origination fees for current mortgage loans recievable | 24,007 | 60,685 |
Allowance for mortgage loans recievable | 924,424 | 798,758 |
Deferred origination fees for mortgage loans recievable | 324,861 | 453,849 |
Accumulated amortization for deferred offering costs | $728,012 | $937,352 |
Stockholders' Equity | ' | ' |
Common Stock, par value | $0.01 | $0.01 |
Common Stock, Authorized | 30,000,000 | 30,000,000 |
Common Stock, Issued | 1,677,798 | 1,677,798 |
Common Stock, Outstanding | 1,677,798 | 1,677,798 |
Statements_of_Operations
Statements of Operations (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Income Statement [Abstract] | ' | ' |
Interest and Other Income | $3,146,620 | $3,161,111 |
Interest Expense | 1,848,050 | 1,882,663 |
Net Interest Income | 1,298,570 | 1,278,448 |
Provision for losses on mortgage loans receivable | 100,959 | 174,836 |
Provision for losses on bonds | ' | 1,000,000 |
Provision for Losses on Mortgage Loans Receivable and Bonds | 100,959 | 1,174,836 |
Net Interest Income after Provision for Mortgage and Bond Losses | 1,197,611 | 103,612 |
Operating Expenses | ' | ' |
Other operating expenses | 833,490 | 703,710 |
Operating Income (Loss) | 364,121 | -600,098 |
Other Income | 2,794 | 5,104 |
Net Income (Loss) | $366,915 | ($594,994) |
Basic and Diluted Income (Loss) Per Share | $0.22 | ($0.34) |
Dividends Declared Per Share | $0.40 | $0.38 |
Weighted Average Common Shares Outstanding - Basic and Diluted | 1,677,798 | 1,745,880 |
Shareholders_Equity
Shareholders Equity (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Net Income | $366,915 | ($594,994) |
Dividends declared | -671,119 | -652,870 |
Common Stock | ' | ' |
Beginning balance, shares | 1,677,798 | 1,778,411 |
Beginning balance, value | 16,778 | 17,784 |
Repurchase of common stock, shares | ' | -100,613 |
Repurchase of common stock, value | ' | -1,006 |
Ending balance, shares | 1,677,798 | 1,677,798 |
Ending balance, value | 16,778 | 16,778 |
Additional Paid-In Capital | ' | ' |
Beginning balance, value | 19,113,458 | 19,514,904 |
Repurchase of common stock, value | ' | -401,446 |
Ending balance, value | 19,113,458 | 19,113,458 |
Retained Earnings / Accumulated Deficit | ' | ' |
Beginning balance, value | -5,565,420 | -4,317,556 |
Net Income | 366,915 | -594,994 |
Dividends declared | -671,119 | -652,870 |
Ending balance, value | ($5,869,624) | ($5,565,420) |
Statements_of_Cash_Flows
Statements of Cash Flows (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Cash Flows from Operating Activities | ' | ' |
Net income (loss) | $366,915 | ($594,994) |
Impairment on real estate held for sale | 149,775 | ' |
Provision for losses on mortgage loans receivable | 100,959 | 174,836 |
Provision for losses on bonds | ' | 1,000,000 |
Amortization of loan origination discounts | -165,666 | -75,596 |
Amortization of deferred costs | 118,297 | 114,688 |
Accounts receivable | -58,115 | -5,889 |
Interest receivable | 4,111 | 1,907 |
Prepaid expenses | -1,171 | -2,295 |
Accounts payable | 1,524 | -51,159 |
Net cash provided by operating activities | 516,629 | 561,498 |
Cash Flows from Investing Activities | ' | ' |
Investment in mortgage loans | -1,091,943 | -1,574,019 |
Collections of mortgage loans | 4,436,981 | 1,416,741 |
Investment in bonds | -1,146,840 | -40,000 |
Proceeds from bonds | 447,106 | 657,215 |
Proceeds from disipostion of real estate held for sale | 800 | 1,025 |
Net cash provided by investing activities | 2,646,104 | 460,962 |
Cash Flows from Financing Activities | ' | ' |
Proceeds from secured investor certificates | ' | 1,250,000 |
Payments on secured investor certificate maturities | -471,000 | -626,000 |
Payments for deferred costs | -10,690 | -77,399 |
Stock exchanges and redemptions | ' | -402,452 |
Dividends paid | -721,453 | -594,813 |
Net cash used for financing activities | -1,203,143 | -450,664 |
Net Increase (Decrease) in Cash and Equivalents | 1,959,590 | 571,796 |
Cash and Equivalents - Beginning | 1,183,787 | 611,991 |
Cash and Equivalents - Ending | $3,143,377 | $1,183,787 |
Statements_of_Cash_Flows_Paren
Statements of Cash Flows (Parenthetical) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Statement of Cash Flows [Abstract] | ' | ' |
Dividends payable | $167,780 | $218,114 |
Loan origination fees | 13,293 | 109,500 |
Interest paid | $1,729,753 | $1,882,663 |
Stock purchased through stock repurchase program | ' | 100,613 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Accounting Policies [Abstract] | ' | ||||||||
Summary of Significant Accounting Policies | ' | ||||||||
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||
Nature of Business | |||||||||
American Church Mortgage Company, a Minnesota corporation, was incorporated on May 27, 1994. The Company was organized to engage primarily in the business of making mortgage loans to churches and other nonprofit religious organizations throughout the United States, on terms established for individual organizations. | |||||||||
Accounting Estimates | |||||||||
Management uses estimates and assumptions in preparing these financial statements in accordance with accounting principles generally accepted in the United States of America. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates. The most sensitive estimates relate to the realizability of the mortgage loans receivable, the valuation of the bond portfolio and real estate held for sale. It is at least reasonably possible that these estimates could change in the near term and that the effect of the change, if any, may be material to the financial statements. | |||||||||
Concentration of Credit Risk | |||||||||
The Company's loans have been granted to churches and other non-profit religious organizations. The ability of the Company’s debtors to honor their contracts is dependent on member contributions and the involvement in the church or organization of its senior pastor. | |||||||||
Cash and Equivalents | |||||||||
The Company considers all highly liquid debt instruments purchased with maturities of three months or less to be cash equivalents. | |||||||||
The Company maintains accounts primarily at two financial institutions. At times throughout the year, the Company’s cash and equivalents balances may exceed amounts insured by the Federal Deposit Insurance Corporation. Cash in money market funds is not federally insured. The Company had $160,808 and $282,329 in a money market fund account at December 31, 2013 and 2012, respectively. The Company has not experienced any losses in such accounts. | |||||||||
Bond Portfolio | |||||||||
The Company accounts for the bond portfolio under the Accounting Standards Codification (ASC) 320, Investments-Debt and Equity Securities. The Company classifies the bond portfolio as “available-for sale” and measures the portfolio at fair value. While the bonds are generally held until contractual maturity, the Company classifies them as available for sale as the bonds may be used to repay secured investor certificates or provide additional liquidity or working capital in the short term. The Company has classified $796,000 and $1,236,000 in bonds as current assets as of December 31, 2013 and 2012, respectively, based on management’s estimates for liquidity requirements and contractual maturities of certain bonds maturing in 2014 and 2013, respectively. | |||||||||
Allowance for Mortgage Loans Receivable | |||||||||
The Company records mortgage loans receivable at estimated net realizable value, which is the unpaid principal balances of the mortgage loans receivable, less the allowance for mortgage loans. The Company’s loan policy provides an allowance for estimated uncollectible loans based on an evaluation of the current status of the loan portfolio. This policy reserves for principal amounts outstanding on a particular loan if cumulative interruptions occur in the normal payment schedule of a loan, therefore, the Company recognizes a provision for losses and an allowance for the outstanding principal amount of a loan in the Company’s portfolio if the amount is in doubt of collection. Additionally, no interest income is recognized on impaired loans that are declared to be in default and are in the foreclosure process. At December 31, 2013, the Company reserved $949,693 for fourteen mortgage loans, of which six are three or more mortgage payments in arrears, two are declared to be in default and one loan is in the foreclosure process. At December 31, 2012, the Company reserved $848,734 for fourteen mortgage loans, of which three were three or more mortgage payments in arrears. One of the loans was in the foreclosure process. | |||||||||
A summary of transactions in the allowance for mortgage loans for the years ended December 31 is as follows: | |||||||||
2013 | 2012 | ||||||||
Balance at beginning of year | $ | 848,734 | $ | 812,809 | |||||
Provision for losses on mortgage loans receivable | 100,959 | 174,836 | |||||||
Charge-offs | — | (138,911 | ) | ||||||
Balance at end of year | $ | 949,693 | $ | 848,734 | |||||
The total impaired loans, which are loans that are in the foreclosure process or are declared to be in default, were approximately $1,543,000 and $1,521,000 at December 31, 2013 and 2012, respectively, which the Company believes is adequately secured by the underlying collateral and the allowance for mortgage loans. Approximately $493,000 of the Company’s allowance for mortgage loans was allocated to these loans at December 31, 2013. Approximately $437,000 of the Company’s allowance for mortgage loans was allocated to impaired loans at December 31, 2012. | |||||||||
The Company will declare a loan to be in default and will place the loan on non-accrual status when the following thresholds have been met: (i) the borrower has missed three consecutive mortgage payments; (ii) the borrower has not communicated to the Company any legitimate reason for delinquency in its payments to the Company and has not arranged for the re-continuance of payments; (iii) lines of communication to the borrower have broken down such that any reasonable prospect of rehabilitating the loan and return of regular payments is gone. | |||||||||
The Company’s policies on payments received and interest accrued on non-accrual loans are as follows: (i) The Company will accept payments on loans that are currently on non-accrual status when a borrower has communicated to us that they intend to meet their mortgage obligations. A payment made on a non-accrual loan is considered a good faith deposit as to the intent to resume their mortgage payment obligation. This good faith deposit is credited back to interest first then principal as stated in the mortgage loan documentation. (ii) A letter outlining the re-payment terms or the restructure terms (if any) of the loan is provided to the borrower. This letter will be signed by the Senior Pastor and all board members of the borrower. This letter resumes the obligation to make payments on non-accrual loans. (iii) The borrower must meet all its payment obligations for the next 120 days without interruption in order to be removed from non-accrual status. | |||||||||
When a loan is declared in default according to the Company’s policy or deemed to be doubtful of collection, the loan committee of the Advisor to the Company will direct the staff to charge-off the uncollectable receivables. | |||||||||
Loans totaling approximately $3,237,000 and $2,308,000 exceeded 90 days past due but continued to accrue interest as of December 31, 2013 and 2012, respectively. The Company believes that continued interest accruals are appropriate because the loans are well secured, not deemed to be in technical default and the Company is actively pursuing collection of past due payments. | |||||||||
Real Estate Held for Sale | |||||||||
As of December 31, 2013, we have five properties acquired through foreclosure, and one via deed in lieu of foreclosure, with outstanding loan balances totaling approximately $1,406,000. We have listed the properties for sale through local realtors except for the property for which we received a deed in lieu of foreclosure. The Church is still occupying the property and paying rent while trying to either sell the building or obtain refinancing. Each property is valued based on its current listing price less any anticipated selling costs, including, for example, realtor commissions. The Company records real estate held for sale at the estimated fair value, which is net of the expected expenses related to the sale of the real estate. The fair value of our real estate held for sale, which represents the carrying value, is approximately $563,000 as of December 31, 2013 after total impairment of approximately $844,000. | |||||||||
Foreclosure was completed in 2004 on a church located in Battle Creek, Michigan. The church congregation disbanded and the church property is currently unoccupied. The Company owns and took possession of the church and has listed the property for sale through a local realtor. | |||||||||
Foreclosure was also completed on a church located in Tyler, Texas in 2005. The church congregation is now meeting in a different location and the church property is currently unoccupied. The Company owns and took possession of the church and it is currently available for sale. | |||||||||
Foreclosure was completed in 2006 on a church located in Dayton, Ohio. The Company owns and took possession of the church and listed the property for sale through a local realtor. A sale contract was executed for this property with a Church in July 2009. The Company agreed to sell the property for $100,000 under a three year land contract which was extended to December 31, 2016. An initial payment of $20,000 was received in July 2009. A payment of $25,000 was received in April 2010. Payments of $7,300 and $5,300 were received in August and October 2011, respectively. A payment of $4,000 was received in August 2012. Beginning December 31, 2012, a payment of $1,000 is due the 30th of each month until a final balloon payment of approximately $8,500 is due and payable on December 31, 2016. As title has not transferred to the buyer, the sale is not considered complete. Upon receipt of final payment, title to the property will transfer to the buyer and the sale will be considered fully consummated. | |||||||||
Foreclosure was completed in 2008 on a church located in Anderson, Indiana. The Company owns and took possession of the property in May 2008 and listed it for sale through a local realtor. | |||||||||
A deed in lieu of foreclosure was received in 2008 from a church located in Pine Bluff, Arkansas. The Company owns and took possession of the church while the church attempts to obtain financing from another lender. If alternative financing cannot be obtained, the Company will list the church for sale with a local realtor. The church is paying monthly rent until the property is refinanced or sold. | |||||||||
Foreclosure was completed in 2011 on a church located in Detroit, Michigan. The Company took possession of the property in June 2011 and listed it for sale through a local realtor. | |||||||||
Carrying Value of Long-Lived Assets | |||||||||
The Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that the carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed of significantly before the end of the estimated useful life. | |||||||||
Recoverability is assessed based on the carrying amount of the asset compared to the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is deemed not recoverable and exceeds fair value as determined through various valuation techniques including, but not limited to, discounted cash flow models, quoted market values, and third party independent appraisals. | |||||||||
Revenue Recognition | |||||||||
Interest income on mortgage loans receivable and the bond portfolio is recognized as earned per the terms of the specific asset. Other income included with interest represents cash received for loan origination fees, which are recognized over the life of the loan as an adjustment to the yield on the loan. | |||||||||
Deferred Financing Costs | |||||||||
The Company defers the costs related to obtaining financing. These costs are amortized over the life of the financing using the straight line method, which approximates the effective interest method. | |||||||||
Income Per Common Share | |||||||||
No adjustments were made to income for the purpose of calculating earnings per share, as there were no potential dilutive shares outstanding. | |||||||||
Income Taxes | |||||||||
The Company elected to be taxed as a Real Estate Investment Trust (REIT). Accordingly, the Company is not subject to Federal income tax to the extent of distributions to its shareholders if the Company meets all the requirements under the REIT provisions of the Internal Revenue Code. | |||||||||
The Company evaluated its recognition of income tax benefits using a two-step approach to recognizing and measuring tax benefits when realization of the benefits is uncertain. The first step is to determine whether the benefit meets the more-likely-than-not condition for recognition and the second step is to determine the amount to be recognized based on the cumulative probability that exceeds 50%. Primarily due to the Company’s tax status as a REIT, the Company does not have any significant tax uncertainties that would require recognition or disclosure. | |||||||||
Reclassifications | |||||||||
Certain accounts in the prior year financial statements have been reclassified for comparative purposes to conform with the presentation in the current year financial statements. These reclassifications had no effect on net income (loss). |
Fair_Value_Measurement
Fair Value Measurement | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||
Fair Value Measurement | ' | ||||||||
2. FAIR VALUE MEASUREMENT | |||||||||
The Company measures certain financial instruments at fair value in our balance sheets. The fair value of these instruments is based on valuations that include inputs that can be classified within one of the three levels of a hierarchy. Level 1 inputs include quoted market prices in an active market for identical assets or liabilities. Level 2 inputs are market data, other than Level 1, that are observable either directly or indirectly. Level 2 inputs include quoted market prices for similar assets or liabilities, quoted market prices in an inactive market, and other observable information that can be corroborated by market data. Level 3 inputs are unobservable and corroborated by little or no market data. | |||||||||
Except for the bond portfolio, which is required by authoritative accounting guidance to be recorded at fair value in our balance sheets, the Company elected not to record any other financial assets or liabilities at fair value on a recurring basis. We recorded an aggregate allowance for losses on our Agape bonds (Note 3), which totaled $200,000 for the years ended December 31, 2013 and 2012. | |||||||||
The following table summarizes the Company’s financial instruments that were measured at fair value on a recurring basis: | |||||||||
Fair Value Measurement | |||||||||
31-Dec-13 | Fair Value | Level 3 | |||||||
Bond portfolio | $ | 9,079,442 | $ | 9,079,442 | |||||
Fair Value Measurement | |||||||||
31-Dec-12 | Fair Value | Level 3 | |||||||
Bond portfolio | $ | 8,379,708 | $ | 8,379,708 | |||||
We determine the fair value of the bond portfolio shown in the table above by comparing it with similar instruments in inactive markets. The analysis reflects the contractual terms of the bonds, which are callable at par by the issuer at any time, and the anticipated cash flows of the bonds and uses observable and unobservable market-based inputs. Unobservable inputs include our internal credit rating and selection of similar bonds for valuation. | |||||||||
The change in Level 3 assets measured at fair value on a recurring basis is summarized as follows: | |||||||||
Bond Portfolio | |||||||||
Balance at December 31, 2012 | $8,379,708 | ||||||||
Purchases | 1,146,840 | ||||||||
Proceeds | -447,106 | ||||||||
Balance at December 31, 2013 | $9,079,442 | ||||||||
Real estate held for sale and impaired loans are recorded at fair value on a nonrecurring basis. The fair value of real estate held for sale was based upon the listed sales price less expected selling costs, which is a Level 2 input. The resulting impairment charges were $149,775 and $0 for the years ended December 31, 2013 and 2012, respectively. | |||||||||
The following table summarizes the Company’s financial instruments that were measured at fair value on a nonrecurring basis: | |||||||||
31-Dec-13 | |||||||||
Level 1 | Level 2 | Level 3 | Fair Value at December 31, | ||||||
2013 | |||||||||
Impaired Loans | $ - | $ - | $1,049,673 | $1,049,673 | |||||
Real estate held for resale | - | 562,722 | - | 562,722 | |||||
$ - | $562,722 | $1.049,673 | $1,612,395 | ||||||
31-Dec-12 | |||||||||
Level 1 | Level 2 | Level 3 | Fair Value at December 31, | ||||||
2012 | |||||||||
Impaired Loans | $ - | $ - | $1,084,399 | $1,084,399 | |||||
Real estate held for resale | - | 713,297 | - | 713,297 | |||||
$ - | $713,297 | $1,084,399 | $1,797,696 | ||||||
The change in Level 2 and Level 3 assets measured at fair value on a nonrecurring basis is summarized as follows: | |||||||||
Fair Value | Fair Value | ||||||||
Measurement | Measurement | ||||||||
Level 3 | Level 2 | ||||||||
Impaired Loans | Real Estate Held for Sale | ||||||||
Balance at December 31, 2012 | $1,084,339 | $713,297 | |||||||
Additions/Acquisitions | 183,719 | - | |||||||
Dispositions/Proceeds | -133,891 | -800 | |||||||
Impairment for other than temporary losses | (84,494) | -149,775 | |||||||
Balance at December 31, 2013 | $1,049,673 | $562,722 |
Mortgage_Loans_Receivable_and_
Mortgage Loans Receivable and Bond Portfolio | 12 Months Ended | ||
Dec. 31, 2013 | |||
Notes to Financial Statements | ' | ||
Mortgage Loans Receivable and Bond Portfolio | ' | ||
3. MORTGAGE LOANS RECEIVABLE AND BOND PORTFOLIO | |||
At December 31, 2013, the Company had first mortgage loans receivable totaling $26,675,361. The loans bear interest ranging from 1.00% to 10.25% with a weighted average of approximately 8.44% at December 31, 2013. The Company had first mortgage loans receivable totaling $30,020,399 that bore interest ranging from 1.00% to 10.25% with a weighted average of approximately 8.48% at December 31, 2012. | |||
The Company has a portfolio of secured church bonds at December 31, 2013 and December 31, 2012, which are carried at fair value. The bonds pay either semi-annual or quarterly interest ranging from 5.50% to 9.75%. The aggregate par value of secured church bonds equaled approximately $9,279,442 at December 31, 2013 with a weighted average interest rate of 7.54% and approximately $10,379,708 at December 31, 2012 with a weighted average interest rate of 7.62%. These bonds are due at various maturity dates through February 2039. The Company has recorded an aggregate allowance for losses of $200,000 and $2,000,000 at December 31, 2013 and 2012, respectively, for the First Mortgage Bonds issued by Agape Assembly Baptist Church and St. Agnes Missionary Baptist Church bond series. These bond series in the aggregate constitute approximately 12% and 30% of the bond portfolio at December 31, 2013 and 2012, respectively. The Company had maturities and redemptions of bonds of approximately $2,240,000 and $657,000 of bonds in 2013 and 2012, respectively. | |||
The contractual maturity schedule for mortgage loans receivable and the bond portfolio as of December 31, 2013, is as follows: | |||
Mortgage Loans | Bond Portfolio | ||
2014 | $ 709,766 | $ 796,000 | |
2015 | 1,859,491 | 150,000 | |
2016 | 1,278,663 | 133,500 | |
2017 | 1,812,054 | 137,000 | |
2018 | 2,192,663 | 255,000 | |
Thereafter | 18,822,724 | 7,807,942 | |
26,675,361 | 9,279,442 | ||
Less loan loss and bond loss allowances | -949,693 | (200,000) | |
Less deferred origination income | (348,868) | ____-____ | |
Totals | $25,376,800 | $9,079,442 | |
As of December 31, 2012 and during the year ended December 31, 2013 the Company owned $2,035,000 First Mortgage Bonds issued by St. Agnes Missionary Baptist Church located in Houston, Texas. The total principal amount of First Mortgage Bonds issued by St. Agnes was $13,375,000. St. Agnes defaulted on its payment obligations to bondholders in June 2007. The church subsequently commenced a Chapter 11 bankruptcy reorganization proceeding regarding the three properties that secure the First Mortgage Bonds in November 2007, which was dismissed in September 2008, and the church was subsequently foreclosed upon. In March 2009, a lease was signed with St. Agnes to permit it to remain in the property while submitting lease payments to bondholders as partial interest payments. Lease payments began in the second quarter of 2009, however St. Agnes failed to make all required lease payments and was evicted from the property in the first quarter of 2010. The Company, along with all other bondholders, had a superior lien over all other creditors. No accrual for interest receivable from the First Mortgage Bonds was recorded by the Company. In September 2011, one of the parcels was sold for $1,300,000. In June 2013 the second of three properties was sold for $335,000 and in November 2013 the main Sanctuary Dome and Fellowship Center was sold for $3,500,000. The liquidation of the collateral serving as security for the bonds was completed and all final funds were distributed (after costs) to the bondholders. This final payment was a return of $71.90 of principal on each original $1,000 bond investment. The Company received a final payment of approximately $160,000. This payment represents a realized loss of $1,875,000 on $2,035,000 original principal amount. The Company had a $1,800,000 aggregate allowance for losses previously recorded against the bonds. A final loss, included in other operating expenses, of $75,000 was recorded as of December 31, 2013. The $160,000 received by the Company represents the final payment on St. Agnes. | |||
The Company currently owns $637,000 First Mortgage Bonds and $497,000 Second Mortgage Bonds issued by Agape Assembly Baptist Church located in Orlando, Florida. The total principal amount of First Mortgage Bonds issued by Agape is $7,200,000, and the total principal amount of Second Mortgage Bonds issued is $715,000. Agape defaulted on its payment obligations to bondholders in September 2010. The church subsequently commenced a Chapter 11 bankruptcy reorganization proceeding regarding the property that secures the First Mortgage Bonds in December 2010. Agape is currently performing under a loan modification agreement. In October 2013, a minimum of 80% of the bondholders of Agape agreed to a modification in the terms of their bonds which has resulted in the resumption of both principal and interest payments to both the first and second mortgage bond holders. Both the First Mortgage Bonds and Second Mortgage Bonds have been modified to a fully amortized fixed rate, quarterly interest payment of 6.25% with a new maturity date of September 2037 for all the issued and outstanding bonds. The Company, along with all other bondholders, has a superior lien over all other creditors. The Company has an aggregate allowance for losses of $200,000 for the First and Second Mortgage Bonds at December 31, 2013 and 2012, respectively, which effectively reduces the bonds to the fair value amount management believes will be recovered. | |||
On July 12, 2012, the Company completed the sale of a property held for sale. The purchase price of the property was $475,000. The purchaser provided a $20,000 cash down payment. The Company provided a $500,000 loan to the qualified church to purchase the property which is located in Baton Rouge, Louisiana. The terms of the loan were consistent with market terms for such financing. This property was acquired by the Company through foreclosure. The Company took possession of the property in March 2012. The Company recorded a gain of $95,645 in connection with this transaction. This amount has been recorded as a reduction of the provision for losses on mortgage loans receivable. | |||
On December 6, 2013, a loan that was declared to be in default was sold by the borrower. The purchaser provided a $20,000 cash down payment. The Company provided $180,000 loan to a qualified church to purchase the property which is located in Palmdale, California. The terms were consistent with market terms for such financing. The Company had an aggregate allowance for losses of $27,000 for this property. However, no loss occurred in the sale of the property. |
Secured_Investor_Certificates
Secured Investor Certificates | 12 Months Ended | ||
Dec. 31, 2013 | |||
Notes to Financial Statements | ' | ||
Secured Investor Certificates | ' | ||
4. SECURED INVESTOR CERTIFICATES | |||
Secured investor certificates are collateralized by certain mortgage loans receivable or secured church bonds of approximately the same value as the certificates. The weighted average interest rate on the certificates was 6.63% and 6.64% at December 31, 2013 and 2012, respectively. Holders of the secured investor certificates may renew certificates at the current rates and terms upon maturity at the Company’s discretion. Renewals upon maturity are considered neither proceeds from nor issuance of secured investor certificates. Renewals total approximately $632,000 and $671,000 during 2013 and 2012, respectively. The secured investor certificates have certain financial and non-financial covenants identified in the respective series’ trust indentures. | |||
The estimated maturity schedule for the secured investor certificates at December 31, 2013 is as follows: | |||
2014 | $ 1,876,000 | ||
2015 | 2,568,000 | ||
2016 | 3,146,000 | ||
2017 | 2,702,000 | ||
2018 | 3,642,000 | ||
Thereafter | 11,761,000 | ||
Totals | $25,695,000 | ||
In October 2008, the Company filed a registration statement with the Securities and Exchange Commission to offer $20,000,000 worth of Series C secured investor certificates. The offering was declared effective by the SEC on March 30, 2009 and concluded March 30, 2012. The certificates were offered in multiples of $1,000 with interest rates ranging from 3.00% to 7.50%, subject to changing market rates, and maturities from 4 to 7 and 13 to 20 years. The certificates are collateralized by certain mortgage loans receivable and church bonds of approximately the same value. At September 30, 2013, approximately 7,932 Series C certificates had been issued and were outstanding for $7,932,000. |
Stock_Repurchase_Program
Stock Repurchase Program | 12 Months Ended |
Dec. 31, 2013 | |
Notes to Financial Statements | ' |
Stock Repurchase Program | ' |
5. STOCK REPURCHASE PROGRAM | |
The Company commenced a share repurchase plan (“the plan”) on July 19, 2011 which offered to shareholders on an ongoing, first-come, first-served basis (until terminated or modified by the Board of Directors) the repurchase of an aggregate of up to 250,000 shares of common stock at $4.00 per share. The aggregate amount of shares was modified by the Board of Directors on December 14, 2012. The modification increased the aggregate number of shares to 260,750 to accommodate a shareholder who had an additional 10,750 shares requesting repurchase. The Company repurchased 75,313 shares during the nine months ended September 30, 2012. The plan was terminated by the Board of Directors on December 24, 2012 since the total number of shares had been repurchased under the plan. |
Transactions_With_Affiliates
Transactions With Affiliates | 12 Months Ended |
Dec. 31, 2013 | |
Notes to Financial Statements | ' |
Transactions With Affiliates | ' |
6. TRANSACTIONS WITH AFFILIATES | |
The Company has an Advisory Agreement with Church Loan Advisors, Inc. (the “Advisor”). The Advisor is responsible for the day-to-day operations of the Company and provides office space and administrative services. The Advisor and the Company are related through common ownership and common management. For its services, the Advisor is entitled to receive a management fee equal to 1.25% annually of the Company's Average Invested Assets, plus one-half of any origination fee charged to borrowers on mortgage loans made by the Company. A majority of the independent board members approve the Advisory Agreement on an annual basis. The Company paid the Advisor management and origination fees of approximately $383,000 and $458,000 during the years ended December 31, 2013 and 2012, respectively. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Income Taxes | ' | ||||||||
7. INCOME TAXES | |||||||||
As discussed in Note 1, a REIT is subject to taxation to the extent that taxable income exceeds dividend distributions to shareholders. In order to maintain status as a REIT, the Company is required to distribute at least 90% of its taxable income. In 2013, the Company had pretax income of $366,915 and distributions to shareholders in the form of dividends during the tax year of $671,119. The tax based on statutory rates to the Company, pre-dividends would have been $124,751 in 2013. In 2012, the Company had pretax loss of $(594,994) and distributions to shareholders in the form of dividends during the tax year of $652,870. The tax based on statutory rates to the Company, pre-dividends, would have been $(202,298) in 2012. The Company paid out 100% of taxable income in dividends in 2013 and 2012. | |||||||||
The following reconciles the income tax provision with the expected provision obtained by applying statutory rates to pretax income: | |||||||||
2013 | 2012 | ||||||||
Tax based on statutory rates | $ | 124,751 | $ | (202,298 | ) | ||||
Tax effect on realized losses on properties | (637,500 | ) | (47,230 | ) | |||||
Benefit of REIT distributions | 512,749 | 249,528 | |||||||
Total tax provision | $ | — | $ | — | |||||
The components of deferred income taxes are as follows: | |||||||||
2013 | 2012 | ||||||||
Loan origination fees | $ | 118,615 | $ | 175,010 | |||||
Loan and bond loss provisions | 390,896 | 968,570 | |||||||
Real-estate impairment | 286,839 | 235,915 | |||||||
Valuation allowance | (796,350 | ) | (1,379,495 | ) | |||||
Total income tax | $ | — | $ | — | |||||
The total deferred tax assets are as follows: | |||||||||
2013 | 2012 | ||||||||
Deferred tax assets | $ | 796,350 | $ | 1,379,495 | |||||
Tax asset valuation allowance | (796,350 | ) | (1,379,495 | ) | |||||
Net deferred tax assets | $ | — | $ | — | |||||
The change in the valuation allowance was approximately $(583,000) and $345,000 for 2013 and 2012, respectively. |
Fair_Value_Of_Financial_Instru
Fair Value Of Financial Instruments | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Notes to Financial Statements | ' | ||||
Fair Value Of Financial Instruments | ' | ||||
8. FAIR VALUE OF FINANCIAL INSTRUMENTS | |||||
The Company is required to disclose the fair value information about financial instruments, where it is practicable to estimate that value. Because assumptions used in these valuation techniques are inherently subjective in nature, the estimated fair values cannot always be substantiated by comparison to independent market quotes and, in many cases, the estimated fair values could not necessarily be realized in an immediate sale or settlement of the instrument. | |||||
The fair value estimates presented herein are based on relevant information available to management as of December 31, 2013 and 2012, respectively. Management is not aware of any factors that would significantly affect these estimated fair value amounts. As these reporting requirements exclude certain financial instruments and all non-financial instruments, the aggregate fair value amounts presented herein do not represent management’s estimate of the underlying value of the Company. | |||||
The estimated fair values of the Company’s financial instruments, none of which are held for trading purposes, are as follows: | |||||
31-Dec-13 | 31-Dec-12 | ||||
Carrying | Fair | Carrying | Fair | ||
Amount | Value | Amount | Value | ||
Cash and equivalents | $ 3,143,377 | $ 3,143,377 | $ 1,183,787 | $ 1,183,787 | |
Accounts receivable | 197,687 | 197,687 | 139,572 | 139,572 | |
Interest receivable | 129,972 | 129,972 | 134,083 | 134,083 | |
Mortgage loans receivable | 26,675,361 | 28,950,766 | 30,020,399 | 37,828,821 | |
Bond portfolio | 9,279,442 | 9,279,442 | 10,379,708 | 10,379,708 | |
Secured investor certificates | 25,695,000 | 36,312,309 | 26,166,000 | 28,668,404 | |
The following methods and assumptions were used by the Company to estimate the fair value of each class of financial instrument for which it is practicable to estimate that value: | |||||
Cash and equivalents | |||||
Due to their short-term nature, the carrying amount of cash and cash equivalents approximates fair value. | |||||
Accounts receivable | |||||
The carrying amount of accounts receivable approximates fair value. | |||||
Interest receivable | |||||
The carrying amount of interest receivable approximates fair value. | |||||
Mortgage loans receivable | |||||
The fair value of the mortgage loans receivable is currently more than the carrying value as the portfolio is currently yielding a higher rate than similar mortgages with similar terms for borrowers with similar credit quality. The credit markets in which the Company conducts business have experienced a decrease in interest rates resulting in the fair value of the mortgage loans rising during the fiscal year ended December 31, 2013. | |||||
Bond portfolio | |||||
We determine the fair value of the bond portfolio shown in the table above by comparing with similar instruments in inactive markets. The analysis reflects the contractual terms of the bonds, which are callable at par by the issuer at any time, and the anticipated cash flows of the bonds and uses observable and unobservable market-based inputs. Unobservable inputs include our internal credit rating and selection of similar bonds for valuation. | |||||
Secured investor certificates | |||||
The fair value of the secured investor certificates is currently greater than the carrying value due to higher interest rates than current market rates. | |||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Accounting Policies [Abstract] | ' | ||||||||
Accounting Estimates | ' | ||||||||
Accounting Estimates | |||||||||
Management uses estimates and assumptions in preparing these financial statements in accordance with accounting principles generally accepted in the United States of America. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates. The most sensitive estimates relate to the realizability of the mortgage loans receivable, the valuation of the bond portfolio and real estate held for sale. It is at least reasonably possible that these estimates could change in the near term and that the effect of the change, if any, may be material to the financial statements. | |||||||||
Concentration of Credit Risk | ' | ||||||||
Concentration of Credit Risk | |||||||||
The Company's loans have been granted to churches and other non-profit religious organizations. The ability of the Company’s debtors to honor their contracts is dependent on member contributions and the involvement in the church or organization of its senior pastor. | |||||||||
Cash and Equivalents | ' | ||||||||
Cash and Equivalents | |||||||||
The Company considers all highly liquid debt instruments purchased with maturities of three months or less to be cash equivalents. | |||||||||
The Company maintains accounts primarily at two financial institutions. At times throughout the year, the Company’s cash and equivalents balances may exceed amounts insured by the Federal Deposit Insurance Corporation. Cash in money market funds is not federally insured. The Company had $160,808 and $282,329 in a money market fund account at December 31, 2013 and 2012, respectively. The Company has not experienced any losses in such accounts. | |||||||||
Bond Portfolio | ' | ||||||||
Bond Portfolio | |||||||||
The Company accounts for the bond portfolio under the Accounting Standards Codification (ASC) 320, Investments-Debt and Equity Securities. The Company classifies the bond portfolio as “available-for sale” and measures the portfolio at fair value. While the bonds are generally held until contractual maturity, the Company classifies them as available for sale as the bonds may be used to repay secured investor certificates or provide additional liquidity or working capital in the short term. The Company has classified $796,000 and $1,236,000 in bonds as current assets as of December 31, 2013 and 2012, respectively, based on management’s estimates for liquidity requirements and contractual maturities of certain bonds maturing in 2014 and 2013, respectively. | |||||||||
Allowance for Mortgage Loans Receivable | ' | ||||||||
Allowance for Mortgage Loans Receivable | |||||||||
The Company records mortgage loans receivable at estimated net realizable value, which is the unpaid principal balances of the mortgage loans receivable, less the allowance for mortgage loans. The Company’s loan policy provides an allowance for estimated uncollectible loans based on an evaluation of the current status of the loan portfolio. This policy reserves for principal amounts outstanding on a particular loan if cumulative interruptions occur in the normal payment schedule of a loan, therefore, the Company recognizes a provision for losses and an allowance for the outstanding principal amount of a loan in the Company’s portfolio if the amount is in doubt of collection. Additionally, no interest income is recognized on impaired loans that are declared to be in default and are in the foreclosure process. At December 31, 2013, the Company reserved $949,693 for fourteen mortgage loans, of which six are three or more mortgage payments in arrears, two are declared to be in default and one loan is in the foreclosure process. At December 31, 2012, the Company reserved $848,734 for fourteen mortgage loans, of which three were three or more mortgage payments in arrears. One of the loans was in the foreclosure process. | |||||||||
A summary of transactions in the allowance for mortgage loans for the years ended December 31 is as follows: | |||||||||
2013 | 2012 | ||||||||
Balance at beginning of year | $ | 848,734 | $ | 812,809 | |||||
Provision for losses on mortgage loans receivable | 100,959 | 174,836 | |||||||
Charge-offs | — | (138,911 | ) | ||||||
Balance at end of year | $ | 949,693 | $ | 848,734 | |||||
The total impaired loans, which are loans that are in the foreclosure process or are declared to be in default, were approximately $1,543,000 and $1,521,000 at December 31, 2013 and 2012, respectively, which the Company believes is adequately secured by the underlying collateral and the allowance for mortgage loans. Approximately $493,000 of the Company’s allowance for mortgage loans was allocated to these loans at December 31, 2013. Approximately $437,000 of the Company’s allowance for mortgage loans was allocated to impaired loans at December 31, 2012. | |||||||||
The Company will declare a loan to be in default and will place the loan on non-accrual status when the following thresholds have been met: (i) the borrower has missed three consecutive mortgage payments; (ii) the borrower has not communicated to the Company any legitimate reason for delinquency in its payments to the Company and has not arranged for the re-continuance of payments; (iii) lines of communication to the borrower have broken down such that any reasonable prospect of rehabilitating the loan and return of regular payments is gone. | |||||||||
The Company’s policies on payments received and interest accrued on non-accrual loans are as follows: (i) The Company will accept payments on loans that are currently on non-accrual status when a borrower has communicated to us that they intend to meet their mortgage obligations. A payment made on a non-accrual loan is considered a good faith deposit as to the intent to resume their mortgage payment obligation. This good faith deposit is credited back to interest first then principal as stated in the mortgage loan documentation. (ii) A letter outlining the re-payment terms or the restructure terms (if any) of the loan is provided to the borrower. This letter will be signed by the Senior Pastor and all board members of the borrower. This letter resumes the obligation to make payments on non-accrual loans. (iii) The borrower must meet all its payment obligations for the next 120 days without interruption in order to be removed from non-accrual status. | |||||||||
When a loan is declared in default according to the Company’s policy or deemed to be doubtful of collection, the loan committee of the Advisor to the Company will direct the staff to charge-off the uncollectable receivables. | |||||||||
Loans totaling approximately $3,237,000 and $2,308,000 exceeded 90 days past due but continued to accrue interest as of December 31, 2013 and 2012, respectively. The Company believes that continued interest accruals are appropriate because the loans are well secured, not deemed to be in technical default and the Company is actively pursuing collection of past due payments. | |||||||||
Real Estate Held for Sale | ' | ||||||||
Real Estate Held for Sale | |||||||||
As of December 31, 2013, we have five properties acquired through foreclosure, and one via deed in lieu of foreclosure, with outstanding loan balances totaling approximately $1,406,000. We have listed the properties for sale through local realtors except for the property for which we received a deed in lieu of foreclosure. The Church is still occupying the property and paying rent while trying to either sell the building or obtain refinancing. Each property is valued based on its current listing price less any anticipated selling costs, including, for example, realtor commissions. The Company records real estate held for sale at the estimated fair value, which is net of the expected expenses related to the sale of the real estate. The fair value of our real estate held for sale, which represents the carrying value, is approximately $563,000 as of December 31, 2013 after total impairment of approximately $844,000. | |||||||||
Foreclosure was completed in 2004 on a church located in Battle Creek, Michigan. The church congregation disbanded and the church property is currently unoccupied. The Company owns and took possession of the church and has listed the property for sale through a local realtor. | |||||||||
Foreclosure was also completed on a church located in Tyler, Texas in 2005. The church congregation is now meeting in a different location and the church property is currently unoccupied. The Company owns and took possession of the church and it is currently available for sale. | |||||||||
Foreclosure was completed in 2006 on a church located in Dayton, Ohio. The Company owns and took possession of the church and listed the property for sale through a local realtor. A sale contract was executed for this property with a Church in July 2009. The Company agreed to sell the property for $100,000 under a three year land contract which was extended to December 31, 2016. An initial payment of $20,000 was received in July 2009. A payment of $25,000 was received in April 2010. Payments of $7,300 and $5,300 were received in August and October 2011, respectively. A payment of $4,000 was received in August 2012. Beginning December 31, 2012, a payment of $1,000 is due the 30th of each month until a final balloon payment of approximately $8,500 is due and payable on December 31, 2016. As title has not transferred to the buyer, the sale is not considered complete. Upon receipt of final payment, title to the property will transfer to the buyer and the sale will be considered fully consummated. | |||||||||
Foreclosure was completed in 2008 on a church located in Anderson, Indiana. The Company owns and took possession of the property in May 2008 and listed it for sale through a local realtor. | |||||||||
A deed in lieu of foreclosure was received in 2008 from a church located in Pine Bluff, Arkansas. The Company owns and took possession of the church while the church attempts to obtain financing from another lender. If alternative financing cannot be obtained, the Company will list the church for sale with a local realtor. The church is paying monthly rent until the property is refinanced or sold. | |||||||||
Foreclosure was completed in 2011 on a church located in Detroit, Michigan. The Company took possession of the property in June 2011 and listed it for sale through a local realtor. | |||||||||
Revenue Recognition | ' | ||||||||
Revenue Recognition | |||||||||
Interest income on mortgage loans receivable and the bond portfolio is recognized as earned per the terms of the specific asset. Other income included with interest represents cash received for loan origination fees, which are recognized over the life of the loan as an adjustment to the yield on the loan. | |||||||||
Deferred Financing Costs | ' | ||||||||
Deferred Financing Costs | |||||||||
The Company defers the costs related to obtaining financing. These costs are amortized over the life of the financing using the straight line method, which approximates the effective interest method. | |||||||||
Income Per Common Share | ' | ||||||||
Income Per Common Share | |||||||||
No adjustments were made to income for the purpose of calculating earnings per share, as there were no potential dilutive shares outstanding. | |||||||||
Income Taxes | ' | ||||||||
Income Taxes | |||||||||
The Company elected to be taxed as a Real Estate Investment Trust (REIT). Accordingly, the Company is not subject to Federal income tax to the extent of distributions to its shareholders if the Company meets all the requirements under the REIT provisions of the Internal Revenue Code. | |||||||||
The Company evaluated its recognition of income tax benefits using a two-step approach to recognizing and measuring tax benefits when realization of the benefits is uncertain. The first step is to determine whether the benefit meets the more-likely-than-not condition for recognition and the second step is to determine the amount to be recognized based on the cumulative probability that exceeds 50%. Primarily due to the Company’s tax status as a REIT, the Company does not have any significant tax uncertainties that would require recognition or disclosure. | |||||||||
Reclassifications | ' | ||||||||
Reclassifications | |||||||||
Certain accounts in the prior year financial statements have been reclassified for comparative purposes to conform with the presentation in the current year financial statements. These reclassifications had no effect on net income (loss). |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Accounting Policies [Abstract] | ' | ||||||||
Allowance For Mortgage Loans | ' | ||||||||
2013 | 2012 | ||||||||
Balance at beginning of year | $ | 848,734 | $ | 812,809 | |||||
Provision for losses on mortgage loans receivable | 100,959 | 174,836 | |||||||
Charge-offs | — | (138,911 | ) | ||||||
Balance at end of year | $ | 949,693 | $ | 848,734 |
Fair_Value_Measurement_Tables
Fair Value Measurement (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||
Fair Value Measurement Bond Portfolio | ' | ||||||||
Fair Value Measurement | |||||||||
31-Dec-13 | Fair Value | Level 3 | |||||||
Bond portfolio | $ | 9,079,442 | $ | 9,079,442 | |||||
Fair Value Measurement | |||||||||
31-Dec-12 | Fair Value | Level 3 | |||||||
Bond portfolio | $8,379,708 | $8,379,708 | |||||||
Change In Fair Value Bond Portfolio | ' | ||||||||
Bond Portfolio | |||||||||
Balance at December 31, 2012 | $8,379,708 | ||||||||
Purchases | 1,146,840 | ||||||||
Proceeds | -447,106 | ||||||||
Balance at December 31, 2013 | $9,079,442 | ||||||||
Impaired Loans and Real Estate Held For Sale | ' | ||||||||
31-Dec-13 | |||||||||
Level 1 | Level 2 | Level 3 | Fair Value at December 31, | ||||||
2013 | |||||||||
Impaired Loans | $ - | $ - | $1,049,673 | $1,049,673 | |||||
Real estate held for resale | - | 562,722 | - | 562,722 | |||||
$ - | $562,722 | $1.049,673 | $1,612,395 | ||||||
31-Dec-12 | |||||||||
Level 1 | Level 2 | Level 3 | Fair Value at December 31, | ||||||
2012 | |||||||||
Impaired Loans | $ - | $ - | $1,084,399 | $1,084,399 | |||||
Real estate held for resale | - | 713,297 | - | 713,297 | |||||
$ - | $713,297 | $1,084,399 | $1,797,696 | ||||||
Fair Value Measurement Period Increase Decrease | ' | ||||||||
Fair Value | Fair Value | ||||||||
Measurement | Measurement | ||||||||
Level 3 | Level 2 | ||||||||
Impaired Loans | Real Estate Held for Sale | ||||||||
Balance at December 31, 2012 | $1,084,339 | $713,297 | |||||||
Additions/Acquisitions | 183,719 | - | |||||||
Dispositions/Proceeds | -133,891 | -800 | |||||||
Impairment for other than temporary losses | (84,494) | -149,775 | |||||||
Balance at December 31, 2013 | $1,049,673 | $562,722 |
Mortgage_Loans_Receivable_and_1
Mortgage Loans Receivable and Bond Portfolio (Tables) | 12 Months Ended | ||
Dec. 31, 2013 | |||
Notes to Financial Statements | ' | ||
Mortgage Loans and Bond Portfolio Maturity Schedule | ' | ||
Mortgage Loans | Bond Portfolio | ||
2014 | $ 709,766 | $ 796,000 | |
2015 | 1,859,491 | 150,000 | |
2016 | 1,278,663 | 133,500 | |
2017 | 1,812,054 | 137,000 | |
2018 | 2,192,663 | 255,000 | |
Thereafter | 18,822,724 | 7,807,942 | |
26,675,361 | 9,279,442 | ||
Less loan loss and bond loss allowances | -949,693 | (200,000) | |
Less deferred origination income | (348,868) | ____-____ | |
Totals | $25,376,800 | $9,079,442 |
Secured_Investor_Certificates_
Secured Investor Certificates (Tables) | 12 Months Ended | ||
Dec. 31, 2013 | |||
Notes to Financial Statements | ' | ||
Secured Investor Certificates Maturity Schedule | ' | ||
2014 | $ 1,876,000 | ||
2015 | 2,568,000 | ||
2016 | 3,146,000 | ||
2017 | 2,702,000 | ||
2018 | 3,642,000 | ||
Thereafter | 11,761,000 | ||
Totals | $25,695,000 |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Pretax Income | ' | ||||||||
2013 | 2012 | ||||||||
Tax based on statutory rates | $ | 124,751 | $ | (202,298 | ) | ||||
Tax effect on realized losses on properties | (637,500 | ) | (47,230 | ) | |||||
Benefit of REIT distributions | 512,749 | 249,528 | |||||||
Total tax provision | $ | — | $ | — | |||||
Deferred Income Taxes | ' | ||||||||
2013 | 2012 | ||||||||
Loan origination fees | $ | 118,615 | $ | 175,010 | |||||
Loan and bond loss provisions | 390,896 | 968,570 | |||||||
Real-estate impairment | 286,839 | 235,915 | |||||||
Valuation allowance | (796,350 | ) | (1,379,495 | ) | |||||
Total income tax | $ | — | $ | — | |||||
Deferred Tax Asset | ' | ||||||||
2013 | 2012 | ||||||||
Deferred tax assets | $ | 796,350 | $ | 1,379,495 | |||||
Tax asset valuation allowance | (796,350 | ) | (1,379,495 | ) | |||||
Net deferred tax assets | $ | — | $ | — | |||||
Fair_Value_Of_Financial_Instru1
Fair Value Of Financial Instruments (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Notes to Financial Statements | ' | ||||
Fair Value Financial Instruments | ' | ||||
31-Dec-13 | 31-Dec-12 | ||||
Carrying | Fair | Carrying | Fair | ||
Amount | Value | Amount | Value | ||
Cash and equivalents | $ 3,143,377 | $ 3,143,377 | $ 1,183,787 | $ 1,183,787 | |
Accounts receivable | 197,687 | 197,687 | 139,572 | 139,572 | |
Interest receivable | 129,972 | 129,972 | 134,083 | 134,083 | |
Mortgage loans receivable | 26,675,361 | 28,950,766 | 30,020,399 | 37,828,821 | |
Bond portfolio | 9,279,442 | 9,279,442 | 10,379,708 | 10,379,708 | |
Secured investor certificates | 25,695,000 | 36,312,309 | 26,166,000 | 28,668,404 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies - Allowance For Mortgage Loans (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Accounting Policies [Abstract] | ' | ' |
Balance at beginning of year | $848,734 | $812,809 |
Provision for losses on mortgage loans receivable | 100,959 | 174,836 |
Charge-offs | ' | -138,911 |
Balance at end of year | $949,693 | $848,734 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details Narrative) (USD $) | Dec. 31, 2016 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 27, 2012 | Oct. 31, 2011 | Apr. 08, 2011 | Apr. 16, 2010 | Jul. 13, 2009 |
Accounting Policies [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' |
Money Market Funds | ' | $160,808 | $282,239 | ' | ' | ' | ' | ' |
Bond Portfolio | ' | 796,000 | 1,236,000 | ' | ' | ' | ' | ' |
Allowance for Mortgage Loans Receivable | ' | 949,693 | 848,734 | ' | ' | ' | ' | ' |
Impaired Loans | ' | 1,543,000 | 1,521,000 | ' | ' | ' | ' | ' |
Loans Exceeding 90 Days Past Due | ' | 3,237,000 | 2,308,000 | ' | ' | ' | ' | ' |
Foreclosed Properties | ' | 1,406,000 | ' | ' | ' | ' | ' | ' |
Real Estate Held for Sale Carrying Value | ' | 562,722 | 713,297 | ' | ' | ' | ' | ' |
Loan Impairment | ' | 844,000 | ' | ' | ' | ' | ' | ' |
Real Estate Sold | ' | ' | ' | ' | ' | ' | ' | 100,000 |
Payments On Real Estate Sold | $8,500 | $1,000 | ' | $4,000 | $5,300 | $7,300 | $25,000 | $20,000 |
Fair_Value_Measurement_Fair_Va
Fair Value Measurement - Fair Value Measurement Bond Portfolio (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Gross Bond portfolio | $9,079,442 | $8,379,708 |
Fair Value Measurement Level 3 | ' | ' |
Gross Bond portfolio | $9,079,442 | $8,379,708 |
Fair_Value_Measurement_Change_
Fair Value Measurement - Change In Fair Value Bond Portfolio (Details) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Fair Value Disclosures [Abstract] | ' |
Gross Bond portfolio | $8,379,708 |
Bond Purchases | 1,146,840 |
Allowances for losses | -447,106 |
Bond Proceeds | -657,215 |
Gross Bond portfolio | $9,079,442 |
Fair_Value_Measurement_Impaire
Fair Value Measurement - Impaired Loans and Real Estate Held For Sale (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Impaired Loans | $1,049,673 | $1,084,399 |
Real estate held for resale | 562,722 | 713,297 |
Total Fair Value Measurement | 1,612,395 | 1,797,696 |
Fair Value Level 1 | ' | ' |
Impaired Loans | ' | ' |
Real estate held for resale | ' | ' |
Total Fair Value Measurement | ' | ' |
Fair Value Level 2 | ' | ' |
Impaired Loans | ' | ' |
Real estate held for resale | 562,722 | 713,297 |
Total Fair Value Measurement | 562,722 | 713,297 |
Fair Value Measurement Level 3 | ' | ' |
Impaired Loans | 1,049,673 | 1,084,399 |
Real estate held for resale | ' | ' |
Total Fair Value Measurement | $1,049,673 | $1,084,399 |
Fair_Value_Measurement_Fair_Va1
Fair Value Measurement - Fair Value Measurement Period Increase Decrease (Details) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Fair Value Measurement Level 3 | ' |
Balance at December 31, 2012 | $1,084,339 |
Additions/Acquisitions | 183,719 |
Dispositions/Proceeds | -133,891 |
Impairment for other than temporary losses | -84,494 |
Balance at December 31, 2013 | 1,049,673 |
Fair Value Level 2 | ' |
Balance at December 31, 2012 | 713,297 |
Additions/Acquisitions | ' |
Dispositions/Proceeds | -800 |
Impairment for other than temporary losses | -149,775 |
Balance at December 31, 2013 | $562,722 |
Fair_Value_Measurement_Details
Fair Value Measurement (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Fair Value Disclosures [Abstract] | ' | ' |
Provision for Losses Bond Portfolio | $200,000 | $200,000 |
Impairment Charges Real Estate Held for Sale | $149,775 | ' |
Mortgage_Loans_Receivable_and_2
Mortgage Loans Receivable and Bond Portfolio - Mortgage Loans and Bond Portfolio Maturity Schedule (Details) (USD $) | Dec. 31, 2013 |
Mortgage Loans | ' |
2014 | $709,766 |
2015 | 1,859,491 |
2016 | 1,278,663 |
2017 | 1,812,054 |
2018 | 2,192,663 |
Thereafter | 18,822,724 |
Subtotal | 26,675,361 |
Less loan loss and bond loss allowances | -949,693 |
Less deferred origination income | -348,868 |
Totals | 25,376,800 |
Bond Portfolio | ' |
2014 | 796,000 |
2015 | 150,000 |
2016 | 133,500 |
2017 | 137,000 |
2018 | 255,000 |
Thereafter | 7,807,942 |
Subtotal | 9,279,442 |
Less loan loss and bond loss allowances | -200,000 |
Less deferred origination income | ' |
Totals | $9,079,442 |
Mortgage_Loans_Receivable_and_3
Mortgage Loans Receivable and Bond Portfolio (Details Narrative) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Notes to Financial Statements | ' | ' |
Mortgage Loans Receivable Gross | $26,675,361 | $30,020,399 |
Church Bonds Owned Gross | 9,279,442 | 10,379,708 |
Boond Reserve Fund | 200,000 | 2,000,000 |
Bond Maturities and Redemptions | 2,240,000 | 657,000 |
St. Agnes Bonds Owned Gross | 2,035,000 | 2,035,000 |
St. Agnes Bonds Gross | 13,375,000 | ' |
Bond Reserve Fund | 1,875,000 | 1,800,000 |
Sale Proceeds Parcel 1 St. Agnes | 1,300,000 | ' |
Sale Proceeds Parcel 2 St. Agnes | 335,000 | ' |
Sale Proceeds Parcel 3 St. Agnes | 3,500,000 | ' |
Final Payment Amount St. Agnes per Bond | 72 | ' |
Oringinal Principal Amount St. Agnes Bond | 1,000 | ' |
Final Payment Amount St. Agnes | 160,000 | ' |
Final Operating Loss St. Agnes | 75,000 | ' |
Agape First Mortgage Bonds | 637,000 | ' |
Agape Second Mortgage Bonds | 497,000 | ' |
Agape First Mortgage Bonds Gross | 7,200,000 | ' |
Agape Second Mortgage Bonds Gross | 715,000 | ' |
Agape Bond Reserve | 200,000 | ' |
Purchase Price Real Estate Held For Sale | ' | 475,000 |
Down Payment | 20,000 | 20,000 |
Mortgage Loan Amount | 180,000 | 500,000 |
Recorded Gain/Loss on Sale | $27,000 | $95,645 |
Secured_Investor_Certificates_1
Secured Investor Certificates - Secured Investor Certificates Maturity Schedule (Details) (USD $) | 12 Months Ended | 159 Months Ended | 12 Months Ended | ||||
Dec. 31, 2013 | Mar. 31, 2032 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Secured Invetors Certificates | Secured Invetors Certificates | Secured Invetors Certificates | Secured Invetors Certificates | Secured Invetors Certificates | Secured Invetors Certificates | ||
Secured Investor Certificate Maturity Schedule | $25,695,000 | $11,761,000 | $3,642,000 | $2,702,000 | $3,146,000 | $2,568,000 | $1,876,000 |
Secured_Investor_Certificates_2
Secured Investor Certificates (Details Narrative) (USD $) | Dec. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Mar. 30, 2012 | Mar. 30, 2009 |
Notes to Financial Statements | ' | ' | ' | ' | ' |
Secured Investos Certificates Renewal | $632,000 | ' | $671,000 | ' | ' |
Secured Investor Certificates Series C Offering | ' | ' | ' | 20,000,000 | 20,000,000 |
Secured Investor Certificates Series C Issued | ' | 7,932 | ' | ' | ' |
Secured Investor Certificates Series C Value | ' | 7,932,000 | ' | ' | ' |
Secured Investor Certificates Principal Value | $1,000 | ' | ' | ' | ' |
Stock_Repurchase_Program_Detai
Stock Repurchase Program (Details Narrative) (USD $) | Dec. 14, 2012 | Sep. 30, 2012 | Jul. 19, 2011 |
Notes to Financial Statements | ' | ' | ' |
Maximum Number of Shares Stock Repurchase Program | ' | ' | $250,000 |
Cash Amount for Share Repurchase Program | ' | ' | 4 |
Maximum Number of Shares Stock Repurchase Program Amended | 260,750 | ' | ' |
Additional Shares Issued Stock Repurchase Program | 10,750 | ' | ' |
Total Shares Purchased Stock Repurchase Program | ' | $75,313 | ' |
Transactions_With_Affiliates_D
Transactions With Affiliates (Details Narrative) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Notes to Financial Statements | ' | ' |
Management Fee | $383,000 | $458,000 |
Income_Taxes_Pretax_Income_Det
Income Taxes - Pretax Income (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | ' | ' |
Tax based on statutory rates | $124,751 | ($202,298) |
Realized tax loss on properties | -637,500 | -47,230 |
Benefit of REIT distributions | 512,479 | 249,528 |
Total tax provision | ' | ' |
Income_Taxes_Deferred_Income_T
Income Taxes - Deferred Income Taxes (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | ' | ' |
Loan origination fees | $118,615 | $175,010 |
Loan and bond loss provisions | 390,896 | 968,750 |
Real-estate impairment | 286,839 | 235,915 |
Valuation allowance | -796,350 | -1,379,495 |
Total income tax | ' | ' |
Income_Taxes_Deferred_Tax_Asse
Income Taxes - Deferred Tax Asset (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | ' | ' |
Deferred tax assets | $796,350 | $1,379,495 |
Tax asset valuation allowance | -796,350 | -1,379,495 |
Net deferred tax assets | ' | ' |
Income_Taxes_Details_Narrative
Income Taxes (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Disclosure [Abstract] | ' | ' |
Income before Provision for Income Taxes | $366,915 | ($594,994) |
Dividends Declared | -671,119 | -652,870 |
Tax based on Statutory Rates | 124,751 | -202,298 |
Valuation Allowance | ($583,000) | $345,000 |
Fair_Value_Of_Financial_Instru2
Fair Value Of Financial Instruments - Fair Value Financial Instruments (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Interest receivable | $129,972 | $134,083 |
Carrying Value Disclosure | ' | ' |
Cash and equivalents | 3,143,377 | 1,183,787 |
Accounts receivable | 197,687 | 139,572 |
Interest receivable | 129,672 | 134,083 |
Mortgage loans receivable | 26,675,361 | 30,020,399 |
Bond portfolio | 9,279,442 | 10,379,708 |
Secured investor certificates | 25,695,000 | 26,166,000 |
Fair Value Disclosure | ' | ' |
Cash and equivalents | 3,143,377 | 1,183,787 |
Accounts receivable | 197,687 | 139,572 |
Interest receivable | 129,672 | 134,083 |
Mortgage loans receivable | 28,950,766 | 37,828,821 |
Bond portfolio | 9,279,442 | 10,379,708 |
Secured investor certificates | $36,312,309 | $28,668,404 |