Document and Entity Information
Document and Entity Information - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Aug. 31, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | American Church Mortgage Company | |
Entity Central Index Key | 934,543 | |
Document Type | POS AM | |
Document Period End Date | Jun. 30, 2016 | |
Amendment Flag | true | |
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 | |
Amendment Description | Post Effective Amendment #2 | |
Document Fiscal Year Focus | 2,016 |
Balance Sheets
Balance Sheets - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | |||
Cash and equivalents | $ 4,422,274 | $ 4,377,110 | $ 3,767,102 |
Accounts receivable | 206,467 | 189,609 | 245,125 |
Interest receivable | 174,580 | 172,169 | 128,900 |
Current maturities of mortgage loans receivable, net of allowance of $59,201, $57,663 and 45,759 and deferred origination fees of $21,701 and $23,406 and $45,085 at June 30, 2016 and December 31, 2015 and 2014, respectively | 1,102,477 | 1,134,157 | 1,044,286 |
Current maturities of bond portfolio, at fair value | 104,000 | 84,000 | 805,500 |
Prepaid expenses | 9,132 | 19,904 | 5,879 |
Total current assets | 6,018,930 | 5,976,949 | 5,996,792 |
Mortgage Loans Receivable, net of current maturities, allowance of $1,210,752, 1,147,170 and $1,131,472 and deferred origination fess of $319,643 and $311,938 and $417,257 at June 30, 2016 and December 31, 2015 and 2014, respectively | 22,594,951 | 22,680,542 | 25,330,471 |
Bond Portfolio, at fair value, net of current maturities | 11,175,428 | 10,429,428 | 8,003,103 |
Real Estate Held for Sale | 340,872 | 697,422 | 517,422 |
Deferred Offering Costs, net of accumulated amortization of $1,039,073, $974,991 and $844,443 at June 30, 2016 and December 31, 2015 and 2014, respectively | 858,250 | 861,810 | 860,992 |
Total Assets | 40,988,431 | 40,646,151 | 40,708,780 |
Current Liabilities | |||
Current maturities of secured investor certificates | 4,639,000 | 3,120,000 | 2,340,000 |
Accounts payable | 27,340 | 29,417 | 22,429 |
Dividends payable | 100,668 | 125,836 | 167,780 |
Total current liabilities | 4,767,008 | 3,275,253 | 2,530,209 |
Deposit on real estate held for sale | 61,600 | ||
Secured Investor Certificates, Series B, net of current maturities | 10,792,000 | 13,074,000 | 14,423,000 |
Secured Investor Certificates, Series C, net of current maturities | 6,820,000 | 6,723,000 | 7,536,000 |
Secured Investor Certificates, Series D | 6,840,000 | 5,329,000 | 3,447,000 |
Total liabilities | 29,219,008 | 28,401,253 | 27,997,809 |
Stockholders' Equity | |||
Common stock, par value $.01 per share, Authorized, 30,000,000 shares, Issued and outstanding, 1,677,798 shares at March 31, 2016 and December 31, 2015and 2014, respectively | 16,778 | 16,778 | 16,778 |
Additional paid-in capital | 19,113,458 | 19,113,458 | 19,113,458 |
Accumulated deficit | (7,360,813) | (6,885,338) | (6,419,265) |
Total stockholders' equity | 11,769,423 | 12,244,898 | 12,710,971 |
Total Liabilities and Stockholders' Equity | $ 40,988,431 | $ 40,646,151 | $ 40,708,780 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Current Assets | |||
Current allowance for current maturities of mortgage loans recievable | $ 59,201 | $ (1,204,833) | $ (1,177,231) |
Current deferred origination fees for current mortgage loans recievable | 21,701 | 23,406 | 45,085 |
Allowance for mortgage loans recievable | 1,210,752 | 1,147,170 | 1,131,472 |
Deferred origination fees for mortgage loans recievable | 319,643 | 311,923 | 417,257 |
Accumulated amortization deferred offering costs | $ (1,039,073) | $ (974,991) | $ (844,443) |
Stockholders' Equity | |||
Common Stock, par value | $ 0.01 | $ 0.01 | $ 0.01 |
Common Stock, Authorized | 30,000,000 | 30,000,000 | 30,000,000 |
Common Stock, Issued | 1,677,798 | 1,677,798 | 1,677,798 |
Common Stock, Outstanding | 1,677,798 | 1,677,798 | 1,677,798 |
Statements of Operations
Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | ||||||
Interest and Other Income | $ 661,666 | $ 814,163 | $ 1,338,230 | $ 1,525,893 | $ 2,936,326 | $ 2,782,206 |
Interest Expense | 506,338 | 499,926 | 1,005,657 | 989,576 | 1,997,249 | 1,822,354 |
Net Interest Income | 155,328 | 314,237 | 332,573 | 536,317 | 939,077 | 959,852 |
Provision for losses on mortgage loans receivable | 92,377 | 12,777 | 144,476 | 96,011 | 188,634 | 227,538 |
Provision for losses of bond portfolio | 60,000 | (120,000) | ||||
Net Interest Income after Provision for Mortgage Losses | 2,951 | 301,460 | 68,097 | 440,306 | 750,443 | 732,314 |
Operating Expenses | ||||||
Other operating expenses | 177,310 | 161,928 | 342,236 | 320,990 | 792,730 | 670,553 |
Operating (Loss) Income | (174,359) | 139,532 | (274,139) | 119,316 | (42,287) | 61,761 |
Other Income | 4,053 | 4,053 | 9,383 | |||
Net (Loss) Income | $ (174,359) | $ 139,532 | $ (274,139) | $ 123,369 | $ (38,234) | $ 71,144 |
Basic and Diluted (Loss) Income Per Share | $ (0.10) | $ 0.08 | $ (0.16) | $ 0.07 | $ 0 | $ 0 |
Dividends Declared Per Share | $ 0.06 | $ 0.08 | $ 0.06 | $ 0.08 | $ 0.23 | $ 0.40 |
Weighted Average Common Shares Outstanding - Basic and Diluted | 1,677,798 | 1,677,798 | 1,677,798 | 1,677,798 | 1,677,798 | 1,677,798 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash Flows from Operating Activities | ||||
Net (loss) income | $ (274,139) | $ 123,369 | $ (38,234) | $ 71,144 |
Impairment on real estate held for sale | (62,043) | 296,727 | 45,000 | |
Provision for losses on mortgage loans receivable | 144,476 | 96,011 | 188,634 | 227,538 |
Provision for losses of bond portfolio | (120,000) | |||
Amortization of loan origination discounts | 6,000 | (69,094) | (126,998) | 113,474 |
Amortization of deferred costs | 64,082 | 66,293 | 130,548 | 116,432 |
Accounts receivable | (16,858) | 72,497 | 55,516 | (47,438) |
Interest receivable | (2,411) | (34,325) | (43,269) | 1,072 |
Prepaid expenses | 10,772 | (8,517) | (14,025) | 759 |
Accounts payable | 38,156 | 19,149 | 43,536 | 874 |
Net cash provided by operating activities | 28,035 | 265,383 | 492,435 | 528,855 |
Cash Flows from Investing Activities | ||||
Investment in mortgage loans | (690,497) | (1,058,803) | (2,922,335) | (4,025,903) |
Collections of mortgage loans | 1,035,652 | 3,553,540 | 4,845,882 | 2,687,224 |
Investment in bonds | (930,000) | (1,300,053) | (1,850,053) | (1,983,250) |
Proceeds from bonds | 44,000 | 134,866 | 145,228 | 2,254,089 |
Net cash provided by (used for) investing activities | (540,845) | 1,329,550 | 218,722 | (1,067,840) |
Cash Flows from Financing Activities | ||||
Proceeds from secured investor certificates | 996,000 | 1,257,000 | 1,877,000 | 3,447,000 |
Payments on secured investor certificate maturities | (151,000) | (625,000) | (1,377,000) | (1,396,000) |
Payments for deferred costs | (60,522) | (77,138) | (131,366) | (267,505) |
Dividends paid | (226,504) | (318,781) | (469,783) | (620,785) |
Net cash provided by (used for) financing activities | 557,974 | 236,081 | (101,149) | 1,162,710 |
Net Increase (Decrease) in Cash and Equivalents | 45,164 | 1,831,014 | 610,008 | 623,725 |
Cash and Equivalents - Beginning | 4,377,110 | 3,767,102 | 3,767,102 | 3,143,377 |
Cash and Equivalents - Ending | $ 4,422,274 | $ 5,598,116 | $ 4,377,110 | $ 3,767,102 |
Statements of Cash Flows (Paren
Statements of Cash Flows (Parenthetical) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Cash Flows [Abstract] | ||||
Dividends payable | $ 100,668 | $ 83,890 | $ 125,836 | $ 167,780 |
Loan origination fees | 942,575 | 923,283 | 109,997 | 164,845 |
Interest paid | $ 340,872 | 1,866,701 | 1,704,923 | |
Loan transferred to real estate held for sale | $ 473,105 |
Shareholders Equity
Shareholders Equity - USD ($) | Common Stock | Additional Paid-In Capital | Retained Earnings / Accumulated Deficit |
Beginning balance, shares at Dec. 31, 2012 | 1,677,798 | ||
Beginning balance, value at Dec. 31, 2012 | $ 16,778 | $ 19,113,458 | $ (5,869,624) |
Net Income | $ 71,144 | ||
Dividends declared | $ (620,785) | ||
Ending balance, shares at Dec. 31, 2013 | 1,677,798 | ||
Ending balance, value at Dec. 31, 2013 | $ 16,778 | 19,113,458 | $ (6,419,265) |
Net Income | $ 71,144 | ||
Dividends declared | $ (620,785) | ||
Ending balance, shares at Dec. 31, 2014 | 1,677,798 | ||
Ending balance, value at Dec. 31, 2014 | $ 16,778 | 19,113,458 | $ (6,419,265) |
Net Income | $ 71,144 | ||
Dividends declared | $ (620,785) | ||
Ending balance, shares at Dec. 31, 2015 | 1,677,798 | ||
Ending balance, value at Dec. 31, 2015 | $ 16,778 | $ 19,113,458 | $ (6,419,265) |
Summary Of Significant Accounti
Summary Of Significant Accounting Policies | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | ||
Summary Of Significant Accounting Policies | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited financial statements have been prepared in accordance with the instructions for interim statements and, therefore, do not include all information and disclosures necessary for fair presentation of results of operations, financial position, and changes in cash flow in conformity with generally accepted accounting principles. However, in the opinion of management, such statements reflect all adjustments (which include only normal recurring adjustments) necessary for fair presentation of financial position, results of operations, and cash flows for the period presented. The unaudited financial statements of the Company should be read in conjunction with the December 31, 2015 audited financial statements included in the Companys Annual Report on Form 10-K, as filed with the Securities and Exchange Commission for the year ended December 31, 2015. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. 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 Companys 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 Companys 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 $1,878,283 and $2,233,533 in money market fund accounts at June 30, 2016 and December 31, 2015, 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. 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 $104,000 and $84,000 in bonds as current assets as of June 30, 2016 and December 31, 2015, respectively, based on managements estimates for liquidity requirements and contractual maturities of certain bonds maturing in 2017 and 2016, 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 Companys loan loss policy provides an allowance for estimated uncollectible loans based on an evaluation of the current status of the loan portfolio. This policy provides 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 Companys portfolio if the amount is in doubt of collection. Additionally, no additional interest income is recognized on impaired loans that are declared to be in default and are in the foreclosure process. At June 30, 2016, the Company provided $1,269,953 for seventeen mortgage loans, of which seven totaling approximately $3,483,402 are three or more mortgage payments in arrears, two loans totaling $1,225,659 are declared to be in default and two loans totaling $610,758 are in the foreclosure process. At December 31, 2015, the Company provided $1,205,000 for eighteen mortgage loans, of which eight totaling approximately $3,724,000 were three or more mortgage payments in arrears, two loans totaling approximately $1,004,000 were declared to be in default and three loans totaling approximately $775,000 were in the foreclosure process. A summary of transactions in the allowance for credit losses for the six months ended June 30, 2016 is as follows: Balance at December 31, 2015 $ 1,204,833 Provision for additional losses 144,476 Reclassified to real estate held for sale (29,806 ) Charge-offs (49,550 ) Balance at June 30, 2016 $ 1,269,953 The total impaired loans, which are loans that are in the foreclosure process or are declared to be in default, were approximately $1,836,000 and $1,779,000 at June 30, 2016 and December 31, 2015, respectively, which the Company believes are adequately secured by the underlying collateral and the allowance for mortgage loans. Approximately $640,000 and $581,000 of the Companys allowance for mortgage loans was allocated to impaired loans at June 30, 2016 and December 31, 2015, respectively. 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 Companys 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 Companys 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 $3,484,000 and $3,724,000 exceeded 90 days past due but continued to accrue interest at June 30, 2016 and December 31, 2015, respectively. The Company believes that the loans are well secured, not deemed to be in default and the Company is actively pursuing collection of past due payments. Real Estate Held for Sale As of June 30, 2016, the Company had two properties acquired through foreclosure, and one via deed in lieu of foreclosure, with outstanding loan balances totaling approximately $618,000. The Company has 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 this 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 $341,000 as of June 30, 2016 after an impairment of approximately $277,000. The Company sold one property acquired through foreclosure for approximately $32,000 for the quarter ended June 30, 2016. 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 allowance for losses 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. 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 (Loss) Per Common Share No adjustments were made to income for the purpose of calculating earnings (loss) per share, as there were no potential dilutive shares outstanding. | 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 Companys 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 Companys 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 $2,233,533 and $569,505 in a money market fund account at December 31, 2015 and 2014, 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 $84,000 and $805,500 in bonds as current assets as of December 31, 2015 and 2014, respectively, based on managements estimates for liquidity requirements and contractual maturities of certain bonds maturing in 2015 and 2014, 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 Companys 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 Companys 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, 2015, the Company reserved $1,204,833 for eighteen mortgage loans. Thirteen of these loans are three or more mortgage payments in arrears of which two are declared to be in default and three loans are in the foreclosure process. The total principal amount of these thirteen loans totals approximately $5,503,000 at December 31, 2015. At December 31, 2014, the Company reserved $1,177,231 for seventeen mortgage loans. Fourteen of these loans are three or more mortgage payments in arrears of which four were declared to be in default and one loan was in the foreclosure process. The total principal amount of these fourteen mortgage loans totals approximately $6,815,000 A summary of transactions in the allowance for mortgage loans for the years ended December 31 is as follows: 2015 2014 Balance at beginning of year $ 1,177,231 $ 949,693 Provision for losses on mortgage loans receivable 188,634 227,538 Charge-offs (161,032 ) Balance at end of year $ 1,204,833 $ 1,177,231 The total impaired loans, which are loans that are in the foreclosure process or are declared to be in default, were approximately $1,779,000 and $2,174,000 at December 31, 2015 and 2014, respectively, which the Company believes are adequately secured by the underlying collateral and the allowance for mortgage loans. Approximately $581,000 of the Companys allowance for mortgage loans was allocated to these loans at December 31, 2015. Approximately $638,000 of the Companys allowance for mortgage loans was allocated to impaired loans at December 31, 2014. 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 Companys 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. No interest income was recognized on non-accrual loans for the years ended December 31, 2015 and 2014. When a loan is declared in default according to the Companys 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 $3,724,000 and $4,641,000 exceeded 90 days past due but continued to accrue interest as of December 31, 2015 and 2014, 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, 2015, we have four properties acquired through foreclosure, and one via deed in lieu of foreclosure, with outstanding loan balances totaling approximately $1,497,000. 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 $697,000 as of December 31, 2015 after total impairment of approximately $800,000. 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 we are currently in negotiations to sell the property. 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. Foreclosure was completed in 2015 on a church located in Chicago, Illinois. The Company took possession of the property in November 2015 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 (loss) Per Common Share No adjustments were made to income (loss) for the purpose of calculating earnings (loss) 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 Companys tax status as a REIT, the Company does not have any significant tax uncertainties that would require recognition or disclosure. Subsequent Events The Company has evaluated events and transaction through March 30, 2016, the date the financial statements were available to be issued. No material events or transactions occurred in the time period referenced above requiring adjustment to or disclosure in the December 31, 2015 financial statements. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | ||
Fair Value Measurements | 2. FAIR VALUE MEASUREMENTS 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 (see Note 3), which totaled $320,000 and $200,000 for the periods ended June 30, 2016 and December 31, 2015, respectively. The following table summarizes the Companys financial instruments that were measured at fair value on a recurring basis: Fair Value Measurement June 30, 2016 Fair Value Level 3 Bond portfolio $ 11,279,428 $ 11,279,428 Fair Value Measurement December 31, 2015 Fair Value Level 3 Bond portfolio $ 10,513,428 $ 10,513,428 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, 2015 $ 10,513,428 Purchases 930,000 Proceeds (44,000 ) Additional Bond Fund Reserve (120,000 ) Balance at June 30, 2016 $ 11,279,428 Real estate held for sale and impaired loans are recorded at fair value on a nonrecurring basis. The fair value of real estate held for sale was based upon the listed sales price less expected selling costs, which is a Level 3 input. The resulting impairment charges were $48,979 and $193,104 for the periods ended June 30, 2016 and December 31, 2015, respectively. A reduction in impairment charges of approximately $62,000 occurred due to the sale of one property held for sale for the quarter ended June 30, 2016. The following table summarizes the Companys financial instruments that were measured at fair value on a nonrecurring basis: June 30, 2016 Level 1 Level 2 Level 3 Fair Value at Impaired Loans $ $ $ 1,196,884 $ 1,196,884 Real estate held for resale 340,872 340,872 $ $ $ 1,537,756 $ 1,537,756 December 31, 2015 Level 1 Level 2 Level 3 Fair Value at December 31, Impaired Loans $ $ $ 1,197,302 $ 1,197,302 Real estate held for resale 697,422 697,422 $ $ $ 1,894,724 $ 1,894,724 The change in Level 3 assets measured at fair value on a nonrecurring basis is summarized as follows: Impaired Loans Real Estate Held for Sale Balance at December 31, 2015 $ 1,197,302 $ 697,422 Additions/Acquisitions 221,683 134,173 Dispositions/Proceeds (134,173 ) (471,550 ) Provision for other than temporary losses (87,968 ) (19,173 ) Balance at June 30, 2016 $ 1,196,844 $ 340,872 | 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, 2015 and 2014. The following table summarizes the Companys financial instruments that were measured at fair value on a recurring basis: Fair Value Measurement December 31, 2015 Fair Value Level 3 Bond portfolio $ 10,513,428 $ 10,513,428 Fair Value Measurement December 31, 2014 Fair Value Level 3 Bond portfolio $ 8,808,603 $ 8,808,603 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, 2014 $8,808,603 Purchases 1,850,053 Proceeds (145,228 Balance at December 31, 2015 $ 10,513,428 Real estate held for sale and impaired loans are recorded at fair value on a nonrecurring basis. The fair value of real estate held for sale was based upon the listed sales price less expected selling costs, which is a Level 3 input. The resulting impairment charges were $193,104 and $45,000 for the years ended December 31, 2015 and 2014, respectively. The following table summarizes the Companys financial instruments that were measured at fair value on a nonrecurring basis: December 31, 2015 Level 1 Level 2 Level 3 Fair Value at December 31, Impaired Loans $ $ $ 1,197,302 $ 1,197,302 Real estate held for resale 697,422 697,422 $ $ $ 1,894,724 $ 1,894,724 December 31, 2014 Level 1 Level 2 Level 3 Fair Value at December 31, Impaired Loans $ $ $ 1,536,006 $ 1,536,006 Real estate held for resale 517,422 517,422 $ $ 517,422 $ 1,536,006 $ 2,053,428 The change in Level 3 assets measured at fair value on a nonrecurring basis is summarized as follows: Impaired Loans Real Estate Held for Sale Balance at December 31, 2014 $ 1,536,006 $ 517,422 Additions/Acquisitions 433,310 576,727 Dispositions/Proceeds (631,109 ) (203,623 ) Impairment for other than temporary losses (308,168 ) (193,104 ) Balance at December 31, 2015 $ 1,030,652 $ 697,422 |
Mortgage Loans Receivable and B
Mortgage Loans Receivable and Bond Portfolio | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Notes to Financial Statements | ||
Mortgage Loans Receivable and Bond Portfolio | 3. MORTGAGE LOANS RECEIVABLE AND BOND PORTFOLIO At June 30, 2016, the Company had mortgage loans receivable totaling $25,385,516. The loans bear interest ranging from 0% to 10.25% with a weighted average of approximately 8.28% at June 30, 2016. The Company had mortgage loans receivable totaling $25,354,876 that bore interest ranging from 1.00% to 10.25% with a weighted average of approximately 8.35% at December 31, 2015. The Company has a portfolio of secured church bonds at June 30, 2016 and December 31, 2015, which are carried at fair value. The bonds pay either semi-annual or quarterly interest ranging from 2.50% to 9.55%. The aggregate value of secured church bonds equaled approximately $11,599,000 at June 30, 2016 with a weighted average interest rate of 6.78% and approximately $10,713,000 at December 31, 2015 with a weighted average interest rate of 6.92%. These bonds are due at various maturity dates through April 2040. The contractual maturity schedule for mortgage loans receivable and the bond portfolio as of June 30, 2016, is as follows: Mortgage Loans Bond Portfolio July 1, 2016 through June 30, 2017 $ 1,183,379 $ 104,000 July 1, 2017 through December 31, 2017 2,470,916 56,000 2018 1,377,619 139,000 2019 1,044,283 144,000 2020 1,401,704 156,000 Thereafter 17,830,824 11,000,428 25,308,725 11,599,428 Less loan loss and bond loss allowances (1,269,953) (320,000) Less deferred origination income (341,344 ______-__ Totals $ 23,697,428 $ 11,279,428 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, in excess 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. Agape has missed two quarterly interest payments to all bondholders for the six month period ended June 30, 2016. The Company, along with all other bondholders, has a superior lien over all other creditors. The Company has an aggregate allowance for losses of $320,000 and $200,000 for the First and Second Mortgage Bonds both at June 30, 2016 and December 31, 2015, which effectively reduces the bonds to the fair value amount management believes will be recovered. | 3. MORTGAGE LOANS RECEIVABLE AND BOND PORTFOLIO At December 31, 2015, the Company had first mortgage loans receivable totaling $25,354,876. The loans bear interest ranging from 1.00% to 10.25% with a weighted average of approximately 8.35% at December 31, 2015. The Company had first mortgage loans receivable totaling $28,014,033 that bore interest ranging from 1.00% to 10.25% with a weighted average of approximately 8.44% at December 31, 2014. The Company has a portfolio of secured church bonds at December 31, 2015 and December 31, 2014, which are carried at fair value. The bonds pay either semi-annual or quarterly interest ranging from 4.00% to 9.75%. The aggregate par value of secured church bonds equaled approximately $10,713,428 at December 31, 2015 with a weighted average interest rate of 6.92% and approximately $9,008,603 at December 31, 2014 with a weighted average interest rate of 7.15%. These bonds are due at various maturity dates through April 2040. The Company has recorded an aggregate allowance for losses of $200,000 at both December 31, 2015 and 2014, respectively, for the First Mortgage Bonds issued by Agape Assembly Baptist Church. This bond series in the aggregate constitute approximately 10% of the bond portfolio at both December 31, 2015 and 2014. The Company had maturities and redemptions of bonds of approximately $145,000 and $2,254,000 in 2015 and 2014, respectively and are included in other operating expenses of the Statement of Operations. The contractual maturity schedule for mortgage loans receivable and the bond portfolio as of December 31, 2015, is as follows: Mortgage Loans Bond Portfolio 2016 $ 1,215,226 $ 84,000 2017 2,708,164 78,000 2018 1,371,126 116,000 2019 1,052,335 110,000 2020 1,347,601 112,000 Thereafter 17,660,424 10,213,428 25,354,876 10,713,428 Less loan loss and bond loss allowances (1,204,833) (200,000) Less deferred origination income (335,344 ___-____ Totals $ 23,814,699 $ 10,513,428 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 2014, 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, 2015 and 2014, respectively, which effectively reduces the bonds to the fair value amount management believes will be recovered. |
Secured Investor Certificates
Secured Investor Certificates | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
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 6.66% and 6.44% at March 31, 2016 and December 31, 2015, respectively. Holders of the secured investor certificates may renew certificates at the current rates and terms upon maturity at the Companys discretion. Renewals upon maturity are considered neither proceeds from nor issuance of secured investor certificates. Renewals totaled approximately $174,000 and $356,000 for the three months ended June 30, 2016 and 2015, respectively. The secured investor certificates have certain financial and non-financial covenants identified in the respective series trust indentures. The estimated maturity schedule for the secured investor certificates at June 30, 2016 is as follows: July 1, 2016 through June 30, 2017 $ 4,149,000 July 1, 2017 through December 31, 2017 884,000 2018 4,116,000 2019 2,333,000 2020 4,058,000 Thereafter 13,551,000 Totals $ 29,091,000 | 4. SECURED INVESTOR CERTIFICATES Secured investor certificates are collateralized by certain mortgage loans receivable or secured church bonds of approximately the same value as the certificates. The weighted average interest rate on the certificates was 6.44% and 6.58% at December 31, 2015 and 2014, respectively. Holders of the secured investor certificates may renew certificates at the current rates and terms upon maturity at the Companys discretion. Renewals upon maturity are considered neither proceeds from nor issuance of secured investor certificates. Renewals totaled approximately $958,000 and $989,000 during 2015 and 2014, 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, 2015 is as follows: 2016 $ 3,120,000 2017 2,803,000 2018 4,116,000 2019 2,333,000 2020 4,058,000 Thereafter 11,816,000 Totals $ 28,246,000 In July 2014, the Company filed a registration statement with the Securities and Exchange Commission to offer $10,000,000 worth of Series D secured investor certificates. The offering was declared effective by the SEC on August 12, 2014. The certificates are being offered in multiples of $1,000 with interest rates ranging from 4.00% to 7.00%, subject to changing market rates, and maturities from 5 and 7 to 15 years. The certificates are collateralized by certain mortgage loans receivable and church bonds of approximately the same value. At December 31, 2015, approximately 5,329 Series D certificates had been issued and were outstanding for $5,329,000. |
Transactions With Affiliates
Transactions With Affiliates | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Notes to Financial Statements | ||
Transactions With Affiliates | 5. TRANSACTIONS WITH AFFILIATES The Company has an Advisory Agreement with Church Loan Advisors, Inc. (the Advisor). The Advisor is responsible for the day-to-day operations of the Company and provides office space and administrative services. The Advisor and the Company are related through common ownership and common management. A majority of the independent board members approve the advisory agreement on an annual basis. The Company paid the Advisor management fees of approximately $80,000 and $91,000 for the three months ended June 30, 2016 and 2015, respectively and management fees of approximately $160,000 and $185,000 for the six months ended June 30, 2016 and 2015, respectively. | 5. TRANSACTIONS WITH AFFILIATES The Company has an Advisory Agreement with Church Loan Advisors, Inc. (the Advisor). The Advisor is responsible for the day-to-day operations of the Company and provides office space and administrative services. The Advisor and the Company are related through common ownership and common management. For its services, the Advisor is entitled to receive a management fee equal to 1.25% annually of the Company's Average Invested Assets, plus one-half of any origination fee charged to borrowers on mortgage loans made by the Company. A majority of the independent board members approve the Advisory Agreement on an annual basis. The Company paid the Advisor management and origination fees of approximately $393,000 and $461,000 during the years ended December 31, 2015 and 2014, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 6. 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 2015, the Company had pretax loss of $(38,234) and distributions to shareholders in the form of dividends during the tax year of $469,783. The tax benefit based on statutory rates to the Company, pre-dividends would have been $(13,000) in 2015. In 2014, the Company had pretax income of $71,144 and distributions to shareholders in the form of dividends during the tax year of $620,785. The tax based on statutory rates to the Company, pre-dividends, would have been $24,189 in 2014. The Company paid out 100% of taxable income in dividends in 2015 and 2014. The following reconciles the income tax provision with the expected provision obtained by applying statutory rates to pretax income: 2015 2014 Tax based on statutory rates $ (13,000 ) $ 24,189 Tax effect on realized losses on properties Benefit of REIT distributions 13,000 (24,189 ) Total tax provision $ $ The components of deferred income tax assets are as follows: 2015 2014 Loan origination fees $ 114,017 $ 157,196 Loan and bond loss provisions 477,643 468,289 Real-estate impairment 271,984 302,139 Valuation allowance (863,644 ) (927,624 ) Deferred income tax asset, net $ $ The change in the valuation allowance was approximately $(64,000) and $131,000 for 2015 and 2014, respectively. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Notes to Financial Statements | ||
Fair Value of Financial Instruments | 6. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company is required to disclose the fair value information about financial instruments, where it is practicable to estimate that value. Because assumptions used in these valuation techniques are inherently subjective in nature, the estimated fair values cannot always be substantiated by comparison to independent market quotes and, in many cases, the estimated fair values could not necessarily be realized in an immediate sale or settlement of the instrument. The fair value estimates presented herein are based on relevant information available to management as of June 30, 2016 and December 31, 2015, 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 managements estimate of the underlying value of the Company. The estimated fair values of the Companys financial instruments, none of which are held for trading purposes, are as follows: June 30, 2016 December 31, 2015 Carrying Fair Carrying Fair Amount Value Amount Value Cash and equivalents $ 4,422,274 $ 4,422,274 $ 4,377,110 $ 4,377,110 Accounts receivable 206,487 206,487 189,609 189,609 Interest receivable 174,580 174,580 172,169 172,169 Mortgage loans receivable 23,697,428 31,019,647 25,354,876 29,054,399 Bond portfolio 11,279,428 11,279,428 10,713,428 10,713,428 Secured investor certificates 29,091,000 39,371,898 28,246,000 36,995,152 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 greater than the carrying value as the portfolio is currently yielding a higher rate than similar mortgages with similar terms for borrowers with similar credit quality. 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. | 7. 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, 2015 and 2014, 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 managements estimate of the underlying value of the Company. The estimated fair values of the Companys financial instruments, none of which are held for trading purposes, are as follows: December 31, 2015 December 31, 2014 Carrying Fair Carrying Fair Amount Value Amount Value Cash and equivalents $ 4,377,110 $ 4,377,110 $ 3,767,102 $ 3,767,102 Accounts receivable 189,609 189,609 245,125 245,125 Interest receivable 172,169 172,169 128,900 128,900 Mortgage loans receivable 25,354,876 29,054,399 28,014,330 28,014,330 Bond portfolio 10,713,428 10,713,428 9,008,603 9,008,603 Secured investor certificates 28,246,000 36,995,152 27,746,000 37,500,487 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, 2015. 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 Accoun15
Summary Of Significant Accounting Policies (Policies) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | ||
Nature of Business | 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. | 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 | 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. | 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 Companys debtors to honor their contracts is dependent on member contributions and the involvement in the church or organization of its senior pastor. | Concentration of Credit Risk The Company's loans have been granted to churches and other non-profit religious organizations. The ability of the Companys 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 Companys 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 $1,878,283 and $2,233,533 in money market fund accounts at June 30, 2016 and December 31, 2015, respectively. The Company has not experienced any losses in such accounts. | 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 Companys 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 $2,233,533 and $569,505 in a money market fund account at December 31, 2015 and 2014, 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. 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 $104,000 and $84,000 in bonds as current assets as of June 30, 2016 and December 31, 2015, respectively, based on managements estimates for liquidity requirements and contractual maturities of certain bonds maturing in 2017 and 2016, respectively. | 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 $84,000 and $805,500 in bonds as current assets as of December 31, 2015 and 2014, respectively, based on managements estimates for liquidity requirements and contractual maturities of certain bonds maturing in 2015 and 2014, 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 Companys loan loss policy provides an allowance for estimated uncollectible loans based on an evaluation of the current status of the loan portfolio. This policy provides 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 Companys portfolio if the amount is in doubt of collection. Additionally, no additional interest income is recognized on impaired loans that are declared to be in default and are in the foreclosure process. At June 30, 2016, the Company provided $1,269,953 for seventeen mortgage loans, of which seven totaling approximately $3,483,402 are three or more mortgage payments in arrears, two loans totaling $1,225,659 are declared to be in default and two loans totaling $610,758 are in the foreclosure process. At December 31, 2015, the Company provided $1,205,000 for eighteen mortgage loans, of which eight totaling approximately $3,724,000 were three or more mortgage payments in arrears, two loans totaling approximately $1,004,000 were declared to be in default and three loans totaling approximately $775,000 were in the foreclosure process. A summary of transactions in the allowance for credit losses for the six months ended June 30, 2016 is as follows: Balance at December 31, 2015 $ 1,204,833 Provision for additional losses 144,476 Reclassified to real estate held for sale (29,806 ) Charge-offs (49,550 ) Balance at June 30, 2016 $ 1,269,953 The total impaired loans, which are loans that are in the foreclosure process or are declared to be in default, were approximately $1,836,000 and $1,779,000 at June 30, 2016 and December 31, 2015, respectively, which the Company believes are adequately secured by the underlying collateral and the allowance for mortgage loans. Approximately $640,000 and $581,000 of the Companys allowance for mortgage loans was allocated to impaired loans at June 30, 2016 and December 31, 2015, respectively. 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 Companys 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 Companys 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 $3,484,000 and $3,724,000 exceeded 90 days past due but continued to accrue interest at June 30, 2016 and December 31, 2015, respectively. The Company believes that the loans are well secured, not deemed to be in default and the Company is actively pursuing collection of past due payments. | 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 Companys 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 Companys 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, 2015, the Company reserved $1,204,833 for eighteen mortgage loans. Thirteen of these loans are three or more mortgage payments in arrears of which two are declared to be in default and three loans are in the foreclosure process. The total principal amount of these thirteen loans totals approximately $5,503,000 at December 31, 2015. At December 31, 2014, the Company reserved $1,177,231 for seventeen mortgage loans. Fourteen of these loans are three or more mortgage payments in arrears of which four were declared to be in default and one loan was in the foreclosure process. The total principal amount of these fourteen mortgage loans totals approximately $6,815,000 A summary of transactions in the allowance for mortgage loans for the years ended December 31 is as follows: 2015 2014 Balance at beginning of year $ 1,177,231 $ 949,693 Provision for losses on mortgage loans receivable 188,634 227,538 Charge-offs (161,032 ) Balance at end of year $ 1,204,833 $ 1,177,231 The total impaired loans, which are loans that are in the foreclosure process or are declared to be in default, were approximately $1,779,000 and $2,174,000 at December 31, 2015 and 2014, respectively, which the Company believes are adequately secured by the underlying collateral and the allowance for mortgage loans. Approximately $581,000 of the Companys allowance for mortgage loans was allocated to these loans at December 31, 2015. Approximately $638,000 of the Companys allowance for mortgage loans was allocated to impaired loans at December 31, 2014. 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 Companys 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. No interest income was recognized on non-accrual loans for the years ended December 31, 2015 and 2014. When a loan is declared in default according to the Companys 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 $3,724,000 and $4,641,000 exceeded 90 days past due but continued to accrue interest as of December 31, 2015 and 2014, 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 June 30, 2016, the Company had two properties acquired through foreclosure, and one via deed in lieu of foreclosure, with outstanding loan balances totaling approximately $618,000. The Company has 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 this 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 $341,000 as of June 30, 2016 after an impairment of approximately $277,000. The Company sold one property acquired through foreclosure for approximately $32,000 for the quarter ended June 30, 2016. | Real Estate Held for Sale As of December 31, 2015, we have four properties acquired through foreclosure, and one via deed in lieu of foreclosure, with outstanding loan balances totaling approximately $1,497,000. 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 $697,000 as of December 31, 2015 after total impairment of approximately $800,000. 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 we are currently in negotiations to sell the property. 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. Foreclosure was completed in 2015 on a church located in Chicago, Illinois. The Company took possession of the property in November 2015 and listed it for sale through a local realtor. |
Carrying Value of Long-Lived Assets | Carrying Value of Long-Lived Assets The Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that the carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed of significantly before the end of the estimated useful life. Recoverability is assessed based on the carrying amount of the asset compared to the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An allowance for losses is recognized when the carrying amount is deemed not recoverable and exceeds fair value as determined through various valuation techniques including, but not limited to, discounted cash flow models, quoted market values, and third party independent appraisals. | Carrying Value of Long-Lived Assets The Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that the carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed of significantly before the end of the estimated useful life. Recoverability is assessed based on the carrying amount of the asset compared to the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is deemed not recoverable and exceeds fair value as determined through various valuation techniques including, but not limited to, discounted cash flow models, quoted market values, and third party independent appraisals. |
Revenue Recognition | Revenue Recognition Interest income on mortgage loans receivable and the bond portfolio is recognized as earned. 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. | 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. | Deferred Financing Costs The Company defers the costs related to obtaining financing. These costs are amortized over the life of the financing using the straight line method, which approximates the effective interest method. |
Income (loss) Per Common Share | Income (Loss) Per Common Share No adjustments were made to income for the purpose of calculating earnings (loss) per share, as there were no potential dilutive shares outstanding. | Income (loss) Per Common Share No adjustments were made to income (loss) for the purpose of calculating earnings (loss) 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 Companys tax status as a REIT, the Company does not have any significant tax uncertainties that would require recognition or disclosure. | |
Basis Of Presentation | Basis of Presentation The accompanying unaudited financial statements have been prepared in accordance with the instructions for interim statements and, therefore, do not include all information and disclosures necessary for fair presentation of results of operations, financial position, and changes in cash flow in conformity with generally accepted accounting principles. However, in the opinion of management, such statements reflect all adjustments (which include only normal recurring adjustments) necessary for fair presentation of financial position, results of operations, and cash flows for the period presented. The unaudited financial statements of the Company should be read in conjunction with the December 31, 2015 audited financial statements included in the Companys Annual Report on Form 10-K, as filed with the Securities and Exchange Commission for the year ended December 31, 2015. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. | Subsequent Events The Company has evaluated events and transaction through March 30, 2016, the date the financial statements were available to be issued. No material events or transactions occurred in the time period referenced above requiring adjustment to or disclosure in the December 31, 2015 financial statements. |
Summary Of Significant Accoun16
Summary Of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Allowance For Mortgage Loans Receivable | 2015 2014 Balance at beginning of year $ 1,177,231 $ 949,693 Provision for losses on mortgage loans receivable 188,634 227,538 Charge-offs (161,032 ) Balance at end of year $ 1,204,833 $ 1,177,231 |
Mortgage Loans Receivable and17
Mortgage Loans Receivable and Bond Portfolio (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Notes to Financial Statements | ||
Mortgage Loans Receivable and Bond Portfolio | Mortgage Loans Bond Portfolio July 1, 2016 through June 30, 2017 $ 1,183,379 $ 104,000 July 1, 2017 through December 31, 2017 2,470,916 56,000 2018 1,377,619 139,000 2019 1,044,283 144,000 2020 1,401,704 156,000 Thereafter 17,830,824 11,000,428 25,308,725 11,599,428 Less loan loss and bond loss allowances (1,269,953) (320,000) Less deferred origination income (341,344 ______-__ Totals $ 23,697,428 $ 11,279,428 | Mortgage Loans Bond Portfolio 2016 $ 1,215,226 $ 84,000 2017 2,708,164 78,000 2018 1,371,126 116,000 2019 1,052,335 110,000 2020 1,347,601 112,000 Thereafter 17,660,424 10,213,428 25,354,876 10,713,428 Less loan loss and bond loss allowances (1,204,833) (200,000) Less deferred origination income (335,344 ___-____ Totals $ 23,814,699 $ 10,513,428 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | ||
Fair Value Measurement Bond Portfolio | Fair Value Measurement June 30, 2016 Fair Value Level 3 Bond portfolio $ 11,279,428 $ 11,279,428 Fair Value Measurement December 31, 2015 Fair Value Level 3 Bond portfolio $ 10,513,428 $ 10,513,428 | Fair Value Measurement December 31, 2015 Fair Value Level 3 Bond portfolio $ 10,513,428 $ 10,513,428 Fair Value Measurement December 31, 2014 Fair Value Level 3 Bond portfolio $ 8,808,603 $ 8,808,603 |
Changes In Fair Value Bond Portfolio | Bond Portfolio Balance at December 31, 2015 $ 10,513,428 Purchases 930,000 Proceeds (44,000 ) Additional Bond Fund Reserve (120,000 ) Balance at June 30, 2016 $ 11,279,428 | Bond Portfolio Balance at December 31, 2014 $8,808,603 Purchases 1,850,053 Proceeds (145,228 Balance at December 31, 2015 $ 10,513,428 |
Fair Value Measurements Financial Instruments | June 30, 2016 Level 1 Level 2 Level 3 Fair Value at Impaired Loans $ $ $ 1,196,884 $ 1,196,884 Real estate held for resale 340,872 340,872 $ $ $ 1,537,756 $ 1,537,756 December 31, 2015 Level 1 Level 2 Level 3 Fair Value at December 31, Impaired Loans $ $ $ 1,197,302 $ 1,197,302 Real estate held for resale 697,422 697,422 $ $ $ 1,894,724 $ 1,894,724 | December 31, 2015 Level 1 Level 2 Level 3 Fair Value at December 31, Impaired Loans $ $ $ 1,197,302 $ 1,197,302 Real estate held for resale 697,422 697,422 $ $ $ 1,894,724 $ 1,894,724 December 31, 2014 Level 1 Level 2 Level 3 Fair Value at December 31, Impaired Loans $ $ $ 1,536,006 $ 1,536,006 Real estate held for resale 517,422 517,422 $ $ 517,422 $ 1,536,006 $ 2,053,428 |
Changes In Fair Value Financial Instruments | Impaired Loans Real Estate Held for Sale Balance at December 31, 2015 $ 1,197,302 $ 697,422 Additions/Acquisitions 221,683 134,173 Dispositions/Proceeds (134,173 ) (471,550 ) Provision for other than temporary losses (87,968 ) (19,173 ) Balance at June 30, 2016 $ 1,196,844 $ 340,872 | Impaired Loans Real Estate Held for Sale Balance at December 31, 2014 $ 1,536,006 $ 517,422 Additions/Acquisitions 611,238 576,727 Dispositions/Proceeds (631,109 ) (203,623 ) Impairment for other than temporary losses (318,833 ) (193,104 ) Balance at December 31, 2015 $ 1,197,302 $ 697,422 |
Secured Investor Certificates (
Secured Investor Certificates (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Notes to Financial Statements | ||
Maturity Schedule Secired Investor Certificates | July 1, 2016 through June 30, 2017 $ 4,149,000 July 1, 2017 through December 31, 2017 884,000 2018 4,116,000 2019 2,333,000 2020 4,058,000 Thereafter 13,551,000 Totals $ 29,091,000 | 2016 $ 3,120,000 2017 2,803,000 2018 4,116,000 2019 2,333,000 2020 4,058,000 Thereafter 11,816,000 Totals $ 28,246,000 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 2015 2014 Tax based on statutory rates $(13,000) $24,189 Tax effect on realized losses on properties - - Benefit of REIT distributions 13,000 (24,189) Total tax provision $ - $ - |
Fair Value of Financial Instr21
Fair Value of Financial Instruments (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Notes to Financial Statements | ||
Carrying Amount and Fair Value Financial Instruments | June 30, 2016 December 31, 2015 Carrying Fair Carrying Fair Amount Value Amount Value Cash and equivalents $ 4,422,274 $ 4,422,274 $ 4,377,110 $ 4,377,110 Accounts receivable 206,487 206,487 189,609 189,609 Interest receivable 174,580 174,580 172,169 172,169 Mortgage loans receivable 23,697,428 31,019,647 25,354,876 29,054,399 Bond portfolio 11,279,428 11,279,428 10,713,428 10,713,428 Secured investor certificates 29,091,000 39,371,898 28,246,000 36,995,152 | December 31, 2015 December 31, 2014 Carrying Fair Carrying Fair Amount Value Amount Value Cash and equivalents $ 4,377,110 $ 4,377,110 $ 3,767,102 $ 3,767,102 Accounts receivable 189,609 189,609 245,125 245,125 Interest receivable 172,169 172,169 128,900 128,900 Mortgage loans receivable 25,354,876 29,054,399 28,014,330 28,014,330 Bond portfolio 10,713,428 10,713,428 9,008,603 9,008,603 Secured investor certificates 28,246,000 36,995,152 27,746,000 37,500,487 |
Summary Of Significant Accoun22
Summary Of Significant Accounting Policies - Allowance For Mortgage Loans Receivable (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Accounting Policies [Abstract] | ||
Balance at beginning of yearDecember 31, 2014 | $ 1,177,231 | $ 949,693 |
Provision for additional losses | 188,634 | 227,538 |
Charge-offs | (161,032) | |
Balance at end of year | $ 1,204,833 | $ 1,177,231 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Measurement Bond Portfolio (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Gross Bond portfolio | $ 11,279,428 | $ 10,513,428 | $ 8,808,603 |
Impaired loans | |||
Gross Bond portfolio | $ 11,279,428 | $ 10,513,428 | $ 8,808,603 |
Fair Value Measurements - Chang
Fair Value Measurements - Changes In Fair Value Bond Portfolio (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value Disclosures [Abstract] | ||||||
Balance at December 31, 2015 & 2015 Respecitvely | $ 10,513,428 | $ 8,808,603 | $ 8,808,603 | |||
Bond Purchases | 930,000 | 1,850,053 | ||||
Bond Proceeds | (44,000) | (145,228) | ||||
Provision for losses of bond portfolio | $ 60,000 | (120,000) | ||||
Balance at June 30, 2016 and December 31, 2015 | $ 11,279,428 | $ 11,279,428 | $ 10,513,428 | $ 8,808,603 |
Fair Value Measurements - Fai25
Fair Value Measurements - Fair Value Measurements Financial Instruments (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Impaired Loans | $ 1,196,884 | $ 1,197,302 | $ 1,536,006 |
Real estate held for resale | 340,872 | 697,422 | 517,422 |
Total Fair Value Measurement | 1,537,756 | 1,894,724 | 2,053,428 |
Fair Value Measurement Level 1 | |||
Impaired Loans | |||
Real estate held for resale | |||
Total Fair Value Measurement | |||
Fair Value Measurement level 2 | |||
Impaired Loans | |||
Real estate held for resale | 517,422 | ||
Total Fair Value Measurement | 517,422 | ||
Impaired loans | |||
Impaired Loans | 1,196,884 | 1,197,302 | 1,536,006 |
Real estate held for resale | 340,872 | 697,422 | |
Total Fair Value Measurement | $ 1,537,756 | $ 1,894,724 | $ 1,536,006 |
Fair Value Measurements - Cha26
Fair Value Measurements - Changes In Fair Value Financial Instruments (Details) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Impaired loans | |
Balance at December 31, 2014 | $ 1,536,006 |
Additions/Acquisitions | 611,238 |
Dispositions/Proceeds | (631,109) |
Impairment for other than temporary losses | (318,833) |
Balance at Decmeber 30, 2015 | 1,197,302 |
Real Estate Funds [Member] | |
Dispositions/Proceeds | (203,623) |
Impairment for other than temporary losses | (193,104) |
Balance at Decmeber 30, 2015 | $ 697,422 |
Mortgage Loans Receivable and27
Mortgage Loans Receivable and Bond Portfolio - Mortgage Loans Receivable and Bond Portfolio (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Mortgage Loans | ||
July 1, 2016 through June 30, 2017 | $ 1,183,379 | |
July 1, 2017 through December 31, 2017 | 2,470,916 | |
2,016 | 1,215,226 | |
2,017 | 2,708,164 | |
2,018 | 1,377,619 | 1,371,126 |
2,019 | 1,044,283 | 1,052,335 |
2,020 | 1,401,704 | 1,347,601 |
Thereafter | 17,830,824 | 17,660,424 |
Subtotal | 25,308,725 | 25,354,876 |
Less loan loss and bond loss allowances | (1,269,953) | (1,204,833) |
Less deferred origination income | (341,344) | (335,344) |
Totals | 23,697,428 | 23,814,699 |
Bond Portfolio | ||
July 1, 2016 through June 30, 2017 | 104,000 | |
July 1, 2017 through December 31, 2017 | 56,000 | |
2,016 | 84,000 | |
2,017 | 78,000 | |
2,018 | 139,000 | 116,000 |
2,019 | 144,000 | 110,000 |
2,020 | 156,000 | 112,000 |
Thereafter | 11,000,428 | 10,213,428 |
Subtotal | 11,599,428 | 10,713,428 |
Less loan loss and bond loss allowances | (320,000) | (200,000) |
Less deferred origination income | ||
Totals | $ 11,279,428 | $ 10,513,428 |
Secured Investor Certificates -
Secured Investor Certificates - Maturity Schedule Secured Investor Certificates (Details) - USD ($) | 6 Months Ended | 12 Months Ended | 135 Months Ended | |||||||
Dec. 31, 2017 | Jun. 30, 2016 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2032 | |
Secured Investor Certificate Maturity Schedule | $ 29,091,000 | $ 28,246,000 | ||||||||
Secured Investor Certificates | ||||||||||
Secured Investor Certificate Maturity Schedule | $ 884,000 | $ 4,058,000 | $ 2,333,000 | $ 4,116,000 | $ 2,803,000 | $ 4,149,000 | $ 3,120,000 | $ 13,551,000 | ||
Secured Investor Certificate Maturity Schedule (2) | $ 11,816,000 |
Income Taxes - Income Taxes (De
Income Taxes - Income Taxes (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Income Tax Disclosure [Abstract] | ||
Tax based on statutory rates | $ (13,000) | $ 24,189 |
Realized tax loss on properties | ||
Benefit of REIT distributions | 13,000 | (24,189) |
Total tax provision | ||
Loan origination fees | 114,017 | 157,196 |
Loan and bond loss provisions | 477,643 | 468,289 |
Real-estate impairment | 271,984 | 302,139 |
Valuation allowance | (863,644) | (927,624) |
Total income tax |
Fair Value of Financial Instr30
Fair Value of Financial Instruments - Carrying Amount and Fair Value Financial Instruments (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Interest receivable | $ 174,580 | $ 172,169 | $ 128,900 |
Carrying Value Disclosure | |||
Cash and equivalents | 4,422,274 | 4,377,110 | 3,767,102 |
Accounts receivable | 206,487 | 189,609 | 245,125 |
Interest receivable | 174,580 | 172,169 | 128,900 |
Mortgage loans receivable | 23,697,428 | 25,354,876 | 28,014,330 |
Bond portfolio | 11,279,428 | 10,713,428 | 9,008,603 |
Secured investor certificates | 29,091,000 | 28,246,000 | 27,746,000 |
Fair Value Disclosure | |||
Cash and equivalents | 4,422,274 | 4,377,110 | 3,767,102 |
Accounts receivable | 206,487 | 189,609 | 245,125 |
Interest receivable | 174,580 | 172,169 | 128,900 |
Mortgage loans receivable | 31,019,647 | 29,054,399 | 28,014,330 |
Bond portfolio | 11,279,428 | 10,713,428 | 9,008,603 |
Secured investor certificates | $ 39,371,898 | $ 36,995,152 | $ 37,500,487 |
Summary Of Significant Accoun31
Summary Of Significant Accounting Policies (Details Narrative) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Accounting Policies [Abstract] | |||
Money Market Funds | $ 2,233,533 | $ 569,505 | |
Bond Portfolio | 84,000 | 805,500 | |
Allowance for Mortgage Loans Receivable | 1,204,833 | 1,177,231 | |
Loans Exceeding 90 Days Past Due | 3,724,000 | 4,641,000 | |
Foreclosed Properties | 1,497,000 | ||
Real Estate Held for Sale Carrying Value | $ 340,872 | 697,422 | 517,422 |
Allowance Allocated to Impaired Loans | 800,000 | 638,000 | |
Loan Impairment | |||
Total Loans On Nonaccrual Status | 5,503,000 | 6,815,000 | |
Loans In Default | $ 1,779,000 | $ 2,174,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details Narrative) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value Disclosures [Abstract] | |||
Loan Loss Reserve Church Bonds | $ 320,000 | $ 200,000 | $ 200,000 |
Loan Loss Impaired Loans | 48,979 | 193,104 | 45,000 |
Reduction of Impairment Charges | $ 62,000 |
Secured Investor Certificates33
Secured Investor Certificates (Details Narrative) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Notes to Financial Statements | |||
Renewals Secured Investor Certificates | $ 174,000 | $ 356,000 | $ 989,000 |
Transactions With Affiliates (D
Transactions With Affiliates (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Notes to Financial Statements | ||||||
Advisory Fee | $ 80,000 | $ 91,000 | $ 160,000 | $ 185,000 | $ 393,000 | $ 461,000 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | ||
Income before Provision for Income Taxes | $ (38,234) | $ 71,144 |
Dividends Declared | 469,783 | 620,785 |
Tax based on Statutory Rates | (13,000) | 24,189 |
Valuation Allowance | $ (64,000) | $ 131,000 |