Cover
Cover - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Mar. 31, 2021 | |
Cover [Abstract] | ||
Document Type | 10-K | |
Amendment Flag | false | |
Document Period End Date | Dec. 31, 2020 | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2020 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 000-25919 | |
Entity Registrant Name | American Church Mortgage Co | |
Entity Central Index Key | 0000934543 | |
Entity Incorporation, State or Country Code | MN | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Public Float | $ 1,676,598 | |
Entity Common Stock, Shares Outstanding | 1,676,598 |
Balance Sheets
Balance Sheets - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and cash equivalents | $ 87,702 | $ 191,987 |
Accounts receivable | 174,915 | 125,539 |
Interest receivable | 168,636 | 185,190 |
Investments | 2,410 | |
Prepaid expenses | 7,796 | 13,121 |
Mortgage Loans Receivable, net of allowance of $1,439,487 and $1,672,003 and deferred origination fees of $278,663and $271,913 at and December 31, 2019 and 2018, respectively | 16,605,967 | 20,717,058 |
Bond Portfolio | 18,100,711 | 16,055,937 |
Real Estate Held for Sale | 428,996 | 651,398 |
Total Assets | 35,574,723 | 37,942,640 |
LIABILITIES | ||
Accounts payable | 14,400 | 12,311 |
Management fee payable | 22,908 | 27,255 |
Line of Credit | 2,288,000 | 1,445,000 |
Dividends payable | 16,766 | 125,835 |
Secured Investor Certificates, Series B | 6,022,500 | 8,855,000 |
Secured Investor Certificates, Series C | 6,127,000 | 6,324,000 |
Secured Investor Certificates, Series D | 8,029,000 | 8,109,000 |
Secured Investor Certificates, Series E | 3,738,000 | 3,562,000 |
(Less) Deferred Offering Costs, net of accumulated amortization of $956,811 and $1,059,702 at December 31, 2019 and 2018, respectively | 769,178 | 865,533 |
Total liabilities | 25,489,396 | 27,594,868 |
Stockholders' Equity | ||
Common Stock, par value $.01 per share authorized, 30,000,000 shares, issued and outstanding, 1,677,798 shares at December 31, 2019 and 2018, respectively | 16,766 | 16,778 |
Additional paid-in capital | 19,111,060 | 19,113,458 |
Accumulated deficit | (9,042,499) | (8,782,464) |
Total stockholders equity | 10,085,327 | 10,347,772 |
Total liabilities and stockholders equity | $ 35,574,723 | $ 37,942,640 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
ASSETS | ||
Allowance for mortgage loans recievable | $ (1,493,996) | $ (1,429,487) |
Deferred origination fees for mortgage loans recievable | 198,816 | 278,633 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Accumulated amortization deferred offering costs | $ (1,066,068) | $ (956,811) |
Stockholders' Equity | ||
Common Stock, par value | $ .01 | $ 0.01 |
Common Stock, Authorized | 30,000,000 | 30,000,000 |
Common Stock, Issued | 1,676,598 | 1,677,798 |
Common Stock, Outstanding | 1,676,598 | 1,677,798 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||
Interest and Other Income | $ 2,543,507 | $ 2,808,534 |
Interest Expense | 1,766,427 | 1,882,290 |
Net Interest Income | 777,080 | 926,244 |
Provision for losses on mortgage loans receivable | 64,509 | 87,727 |
Net Interest Income after Provision for Mortgage Losses | 712,571 | 838,517 |
Operating Expenses | ||
Other than temporary impairment on bond portfolio | 176,226 | 200,000 |
Other operating expenses | 662,204 | 580,731 |
Net Income (Loss) | $ (125,859) | $ 57,786 |
Basic and Diluted Earnings (Loss) Income Per Share | $ (.08) | $ 0.03 |
Dividends Declared Per Share | $ 134,176 | $ 486,562 |
Weighted Average Common Shares Outstanding - Basic and Diluted | 1,676,896 | 1,677,798 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash Flows from Operating Activities | ||
Net income (loss) | $ (125,859) | $ 57,786 |
Adjustments to reconcile net income (loss) net cash from operating activites: | ||
Net gain (loss) on sales and impairment on real estate held for sale | 134,808 | 10,617 |
Provision for losses on mortgage loans receivable | 64,509 | 87,727 |
Other than temporary investements on bond portfolio | 176,226 | 200,000 |
Net amortization of loan origination discounts | 79,818 | 6,721 |
Amortization of deferred offering costs | 109,257 | 110,223 |
Accounts receivable | 24,007 | 125,996 |
Interest receivable | (56,829) | (321) |
Prepaid expenses | 5,325 | (5,955) |
Accounts payable | 2,089 | (564,864) |
Management Fee payable | (4,347) | (446) |
Net cash (used for) by provided by operating activities | 409,004 | 27,484 |
Cash Flows from Investing Activities | ||
Net decrease in loans | 3,966,764 | 470,376 |
Investment in bonds | (2,472,000) | (1,934,000) |
Proceeds from bonds | 251,000 | 1,067,870 |
Proceeds from real estate held for sale | 87,594 | 60,501 |
Net cash (used for) investing activities | 1,833,358 | (335,253) |
Cash Flows from Financing Activities | ||
Net (decrease) in secured investor certificates | (2,933,500) | (2,536,000) |
Payments for deferred costs | 12,902 | 89,345 |
Net change in short term borrowings | 843,000 | 1,445,000 |
Dividends paid | (243,245) | (503,340) |
Net cash (used for) provided by financing activities | (2,346,647) | (1,683,685) |
Net (Decrease) Increase in Cash and Cash Equivalents | (104,285) | (1,991,454) |
Cash and Cash Equivalents - Beginning Period | 191,987 | 2,183,441 |
Cash and Equivalents - Ending Period | $ 87,702 | $ 191,987 |
Statements of Cash Flows (Paren
Statements of Cash Flows (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Cash Flows [Abstract] | ||
Interest paid | $ 1,657,169 | $ 1,772,067 |
Loan transferred to real estate held for sale | $ 321,356 |
Shareholders Equity
Shareholders Equity - USD ($) | Common Stock | Additional Paid-In Capital | Retained Earnings / Accumulated Deficit | Total |
Beginning balance, shares at Dec. 31, 2018 | 1,677,798 | |||
Beginning balance, value at Dec. 31, 2018 | $ 16,778 | $ 19,113,458 | $ 8,353,688 | $ 10,766,548 |
Re-purchase 1,200 shares | 12 | |||
Re-purchase, value | $ (2,398) | |||
Net Income | $ 57,786 | $ 57,786 | ||
Dividends declared | $ (486,562) | $ (486,562) | ||
Ending balance, shares at Dec. 31, 2019 | 1,677,798 | |||
Ending balance, value at Dec. 31, 2019 | $ 16,778 | 19,113,458 | $ (8,782,464) | $ 10,347,772 |
Re-purchase 1,200 shares | (1,200) | |||
Re-purchase, value | $ (12) | (2,398) | (2,410) | |
Net Income | $ (125,859) | $ (125,859) | ||
Dividends declared | $ (134,176) | $ (134,176) | ||
Ending balance, shares at Dec. 31, 2020 | 1,677,798 | |||
Ending balance, value at Dec. 31, 2020 | $ 16,778 | $ 19,111,060 | $ (9,042,499) | $ 10,085,327 |
Shareholders Equity (Parentheti
Shareholders Equity (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||
Re-Purchase 1,200 shares | 12 | |
Re-Purchase Value | $ 2,410 | $ 2,398 |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
Basis of Presentation | 1. BASIS OF PRESENTATION The accompanying audited financial statements of American Church Mortgage Company, (the “Company”) were prepared in accordance with instructions for Form 10-K and Regulation S-X and include information or footnotes necessary for a complete presentation of financial condition, results of operations, changes in equity and cash flows in conformity with accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments necessary for a fair presentation of the financial statements have been included. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business American Church Mortgage Company, a Minnesota corporation, was incorporated on May 27, 1994. The Company is engaged 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 the valuation of 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. Risks and Uncertainties The United States and world economies continue to suffer adverse effects from the COVID-19 virus pandemic (“COVID-19”). The Company has not experienced a material adverse impact to the financial statements. Future potential impacts to the Company may include disruptions or restrictions on employers and contracted agents’ ability to work, reduced demand for new loans and increased repurchase risk of loan or bond defaults. The future impact of the COVID-19 pandemic on the Company cannot be reasonably estimated at this time. Concentration of Credit Risk The Company's loans have been granted to churches and other non-profit religious organizations. The ability of the Company’s debtors to honor their contracts is dependent on member contributions and the involvement in the church or organization of its senior pastor. Cash and Cash Equivalents The Company considers all highly liquid debt instruments purchased with maturities of three months or less to be cash equivalents. The Company maintains accounts primarily at two financial institutions. At times throughout the year, the Company’s cash and equivalents balances may exceed amounts insured by the Federal Deposit Insurance Corporation. Cash in money market funds is not federally insured. Management believes these financial institutions have strong credit ratings and that the credit related to these deposits is minimal. The Company has not experienced any losses in such accounts. Bond Portfolio Bonds that management has the intent to hold to maturity are classified as held to maturity and recorded at amortized costs. Bonds not classified as held to maturity are classified as available for sale and are carried at fair value, with unrealized gains and losses reported in other comprehensive income. Amortization of premiums and accretion of discounts (if any) are recognized in interest income using the interest method over the estimated lives of the securities. Declines in fair value of bonds that are deemed to be other than temporary, if applicable, are reflected in earnings as realized losses. In estimating other-than temporary impairment losses, management considered the length of time and the extent to which fair value has been less than cost, the financial condition and near-term prospects of the issuer, and the interest and the ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. Gains and losses on the sales of securities are recorded on the trade date and determined using the specific-identification method. Bonds transferred from the available for sale category to the held to maturity category are recorded at fair value at the date of transfer. During 2020, the Company reclassified approximately $18,101,000 of bonds available for sale to bonds held to maturity. These bonds were transferred at fair value, which became the costs basis for the bonds held to maturity. There were no unrealized gains or losses at the time of transfer of bonds from available for sale to held to maturity. Allowance for Loan Losses on 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 loan losses on mortgage loans receivable and less deferred loan origination fees. The Company’s loan policy provides an allowance for estimated uncollectible loans based on an evaluation of the current status of the loan portfolio with application of reserve percentages to specific loans based on payment status. This policy reserves for principal amounts outstanding on a specific loan if cumulative interruptions occur in the normal payment schedule of the loan, therefore, the Company recognizes a provision for losses and an allowance for the outstanding principal amount of the loan in the Company’s portfolio if the amount is in doubt of collection. Additionally, no interest income is recognized on impaired loans that are declared to be in default and are in the foreclosure process. At December 31, 2020, the Company reserved $1,493,996 for fourteen mortgage loans. Nine of these loans are three or more mortgage payments in arrears of which two are declared to be in default. The total principal amount of these fourteen loans totaled approximately $6,498 A summary of transactions in the allowance for mortgage loans for the years ended December 31, 2020 and 2019 is as follows: Balance at December 31, 2019 $ 1,429,487 Provisions for loan losses 64,509 Loan charge-offs - Balance at December 31, 2020 $ 1,493,996 Balance at December 31, 2018 $ 1,672,003 Provisions for loan losses 87,727 Loan charge-offs (330,243) Balance at December 31, 2019 $ 1,429,487 Loans that are in the foreclosure process or are declared to be in default, had a principal balance of $588,787 and were considered impaired and written down to their estimated fair value of $37,771 as of December 31, 2020. As a result, the Company recognized a specific valuation allowance against these impaired loans totaling $551,016 as of December 31, 2020. Loans that are in the foreclosure process or are declared to be in default, had a principal balance of $810,470 and were considered impaired and written down to their estimated fair value of $255,797 as of December 31, 2019. As a result, the Company recognized a specific valuation allowance against these impaired loans totaling $554,673 as of December 31, 2019. The outbreak of COVID-19 has affected churches due to shelter-in-place directives which has ceased or greatly curtailed social gatherings such as church worship services. The Company’s borrowers have experienced financial duress during the Covid-19 shelter in place restrictions, amplified by the financial setbacks for many of the church members who have lost their jobs, been furloughed, or had their incomes diminished. The Company has provided some temporary relief by allowing its borrower’s to either make interest only payments for a period of ninety days or forgo one monthly mortgage payment (forbearance). The Company provided nine churches totaling approximately $3,209,000, in principal outstanding, ninety days interest only payments and five churches totaling approximately $2,618,000, in principal outstanding, one-month forbearance of its mortgage payments. As of December 31, 2020, all churches, except four, have returned to full monthly amortization payments. These four churches totaling approximately $758,000, in principal outstanding, have remained on interest only payments. This relief will impact the Company’s revenue and the Company will experience declines in payments due from borrowers and missed bond payments on the bonds owned by the Company which will impact operating income and may potentially impact future distributions and the ability to make payments due on the Company’s certificates and dividends to its shareholders. The future impact of COVID-19 on the Company’s investments or operations cannot be reasonably estimated at this time. The Company will declare a loan to be in default and will place the loan on non-accrual status when the following thresholds have been met: (i) the borrower has missed three consecutive mortgage payments; (ii) the borrower has not communicated to the Company any legitimate reason for delinquency in its payments to the Company and has not arranged for the re-continuance of payments; (iii) lines of communication to the borrower have broken down such that any reasonable prospect of rehabilitating the loan and return of regular payments is gone. The Company 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. The accrual of interest on a loan is discontinued when the loan becomes 90 consecutive days delinquent or whenever management believes the borrower will be unable to make payments as they become due. The interest on these loans is subsequently accounted for on the cash basis or using the cost-recovery method until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current or restructured and future payments are reasonably assured. No interest income was recognized on non-accrual loans for the years ended December 31, 2020 and 2019, respectively. When a loan is declared in default according to the Company’s policy or deemed to be doubtful of collection, the loan committee of the Advisor to the Company will direct the staff to charge-off the uncollectable receivables. Loans that exceed 90 days past due but continue to accrue interest had a principal balance of $2,795,175 and $3,263,492 for the years ended December 31, 2020 and 2019, respectively. These loans were considered impaired and written down to their estimated fair value of $2,218,773 and $2,716,445 as of December 31, 2020 and 2019, respectively. As a result, the Company recognized a specific valuation allowance against these impaired loans totaling $576,442 and $547,053 for the years ended December 31, 2020 and 2019, 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 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, totaled $428,996 and $651,398 for the years ended December 31, 2020 and 2019, respectively. 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. Gain (Losses) on Real Estate Held For Sale The Company records a gain or loss from real estate held for sale when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. When the Company finances real estate held for sale to the buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, real estate held for sale is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. In determining the gain or loss on the sale, the Company adjusts the transaction prices and related gain (loss) on sale if a significant financing component is present. 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 There were no dilutive shares for the years ended December 31, 2020 and 2019, respectively. Recent Accounting Pronouncements In 2016 the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 is intended to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit. For public entities, deemed smaller reporting companies, such as the Company, ASU 2016-13 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company has not yet fully evaluated the potential effects of adopting ASU 2016-13 on the Company’s results of operations, financial position or cash flows. Income Taxes The Company elected to be taxed as a Real Estate Investment Trust (REIT). Accordingly, the Company is not subject to Federal income tax to the extent of distributions to its shareholders if the Company meets all the requirements under the REIT provisions of the Internal Revenue Code. The Company evaluated its recognition of income tax benefits using a two-step approach to recognizing and measuring tax benefits when realization of the benefits is uncertain. The first step is to determine whether the benefit meets the more-likely-than-not condition for recognition and the second step is to determine the amount to be recognized based on the cumulative probability that exceeds 50%. Primarily due to the Company’s tax status as a REIT, the Company does not have any significant tax uncertainties that would require recognition or disclosure. Subsequent Events The Company has evaluated events and transactions through March 31, 2021, the date the financial statements were available to be issued, and no subsequent events have occurred. |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | 3. FAIR VALUE MEASUREMENT Some assets and liabilities, such as securities available for sale, are measured at fair value on a recurring basis under accounting principles generally accepted in the United States. Other assets and liabilities, such as impaired loans, may be measured at fair value on a nonrecurring basis. Following is a description of the valuation methodology and significant inputs used for each asset and liability measured at fair value on a recurring or nonrecurring basis, as well as the classification of the asset or liability within the fair value hierarchy. Bonds available for sale Securities available for sale may be classified as Level 1, Level 2, or Level 3 measurements within the fair value hierarchy. Level 1 securities include debt securities traded on a national exchange. The fair value measurement of a Level 1 security is based on the quoted price of the security. Level 2 securities include U.S. government and agency securities, obligations of states and political subdivisions, corporate debt securities, and mortgage related securities. The fair value measurement of a Level 2 security is obtained from an independent pricing service and is based on recent sales of similar securities and other observable market data. Level 3 securities include church bonds that are not traded in a market. The fair value measurements of Level 3 securities are determined by management. Fair values are calculated using discounted cash flow models that incorporate various assumptions, including expected cash flows and market credit spreads. When comparable sales are available, these are used to validate the models used. Other available industry data, such as information regarding defaults and deferrals, are incorporated into the expected cash flows. Bonds held to maturity Securities held to maturity are not measured at fair value on a recurring basis. However, securities deemed other-than-temporarily impaired are measured at fair value. The fair value measurement of such securities is obtained from an independent firm and is based on a valuation model that incorporates various assumptions market participants would use to value the securities, such as current interest rates, estimated credit and liquidity spreads, conditional default and loss severity rates, and available credit support. Since some of these assumptions are unobservable in the current market environment, the fair value measurement of other-than-temporarily impaired securities held to maturity is considered a Level 3 measurement. Loans Loans are not measured at fair value on a recurring basis. However, loans considered to be impaired (see Note 1) may be measured at fair value on a nonrecurring basis. The fair value measurement of an impaired loan that is collateral dependent is based on the fair value of the underlying collateral. Independent appraisals are obtained that utilize one or more valuation methodologies - typically they will incorporate a comparable sales approach and an income approach. Management routinely evaluates the fair value measurements of independent appraisers and adjusts those valuations based on differences noted between actual selling prices of collateral and the most recent appraised value. Such adjustments are usually significant, which results in a Level 3 classification. All other impaired loan measurements are based on the present value of expected future cash flows discounted at the applicable effective interest rate and, thus, are not fair value measurements. Real estate held for sale Real estate and other property acquired through or in lieu of loan foreclosure are not measured at fair value on a recurring basis. However, foreclosed assets are initially measured at fair value (less estimated costs to sell) when they are acquired and may also be measured at fair value (less estimated costs to sell) if they become subsequently impaired. The fair value measurement for each asset may be obtained from an independent appraiser or prepared internally. Fair value measurements obtained from independent appraisers generally utilize a market approach based on sales of comparable assets and/or an income approach. Such measurements are usually considered Level 2 measurements. However, management routinely evaluates fair value measurements of independent appraisers by comparing actual selling prices to the most recent appraisals. If management determines significant adjustments should be made to the independent appraisals based on these evaluations, these measurements are considered Level 3 measurements. Fair value measurements prepared internally are based on management's comparisons to sales of comparable assets, but include significant unobservable data and are therefore considered Level 3 measurements. Information regarding the fair value of assets and liabilities measured at fair value on a recurring basis as of December 31, 2019 follows: Recurring Fair Value at December 31, 2019 Assets: Quoted Prices in Active Markets for Identical Instruments Significant Other Observable Inputs Significant Unobservable Inputs Total Bond portfolio available for sale $ $ $ 16,055,937 $ 16,055,937 Information regarding the fair value of assets and liabilities measured at fair value on a nonrecurring basis as of December 31, 2020 and 2019 follows: Nonrecurring Fair Value at December 31, 2020 Assets: Quoted Prices in Active Markets for Identical Instruments Significant Other Observable Inputs Significant Unobservable Inputs Total Bond portfolio $ $ $ 4,650,372 $ 4,650,372 Impaired loans $ $ $ 5,004,424 $ 5,004,424 Real estate held for sale $ $ $ 428,996 $ 428,996 Nonrecurring Fair Value at December 31, 2019 Assets: Quoted Prices in Active Markets for Identical Instruments Significant Other Observable Inputs Significant Unobservable Inputs Total Impaired loans $ $ $ 4,557,326 $ 4,557,326 Real estate held for sale $ $ $ 651,398 $ 651,398 During 2020, securities held to maturity with a carrying value of $5,484,988 were written down to their fair value of $4,650,372 since this impairment was deemed to be other than temporary. As a result, an impairment charge of $834,226 was included in earnings for the year ended December 31, 2020. During 2020, loans with a carrying amount of $6,498,421 were considered impaired and were written down to their estimated fair value of $5,004,424 by recognizing a specific valuation allowance of $1,493,996. During 2019, loans with a carrying amount of $5,986,813 were considered impaired and were written down to their estimated fair value of $4,557,326 by recognizing a specific valuation allowance of $1,429,487. Real estate held for sale is recognized at fair value, less costs to sell. Impairment charge of $118,232 and $10,617 were recognized in earnings for the years ended December 31, 2020 and 2019, respectively. The following presents quantitative information about nonrecurring Level 3 fair value measurements at December 31, 2020 and 2019: Fair Value Valuation Technique Significant Unobservable Inputs(s) Range/Weighted December 31, 2020 Bond Portfolio $ 4,650,372 Market or Income Approach Discount to Appraised Values 10-20% Impaired Loans $ 5,004,424 Market or Income Approach Discount to Appraised Values 10-20% Real Estate Held for Sale $ 428,996 Market or Income Approach Discount to Appraised Values 10-20% December 31, 2019 Impaired Loans $ 4,557,326 Market or Income Approach Discount to Appraised Values 10-20% Real Estate Held for Sale $ 651,398 Market or Income Approach Discount to Appraised Values 10-20% The carrying value and estimated fair values of the Company’s financial instruments are as follows: December 31, 2020 Level 1 Level 2 Level 3 Carrying Value at December 31, 2020 Cash and equivalents $ 87,702 $ $ $ 87,702 Accounts receivable 101,532 101,532 Interest receivable 242,019 242,019 Mortgage loans receivable 16,605,967 16,605,967 Bond portfolio 18,100,711 18,100,711 Line of credit 2,288,000 2,288,000 Secured investor certificates 23,916,500 23,916,500 Totals $ 2,719,253 $ 23,916,500 $ 34,706,678 $ 61,342,431 December 31, 2019 Level 1 Level 2 Level 3 Carrying Value Cash and equivalents $ 191,987 $ $ $ 191,987 Accounts receivable 125,539 125,539 Interest receivable 185,190 185,190 Mortgage loans receivable 20,717,058 20,717,058 Bond portfolio 16,055,937 16,055,937 Line of credit 1,445,000 1,445,000 Secured investor certificates 26,850,000 26,850,000 Totals $ 1,947,716 $ 26,850,000 $ 38,481,114 $ 67,278,830 Limitations The fair value of a financial instrument is the current amount that would be exchanged between market participants, other than in a forced liquidation. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company's various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. Consequently, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company. Fair value estimates are made at a specific point in time based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company's entire holdings of a particular instrument. Because no market exists for a significant portion of the Company's financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters that could affect the estimates. Fair value estimates are based on existing on balance-sheet financial instruments without attempting to estimate the value of anticipated future business. Deposits with no stated maturities are defined as having a fair value equivalent to the amount payable on demand. This prohibits adjusting fair value derived from retaining those deposits for an expected future period of time. This component, commonly referred to as a deposit base intangible, is neither considered in the above amounts nor is it recorded as an intangible asset on the balance sheet. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates. |
Mortgage Loans Receivable and B
Mortgage Loans Receivable and Bond Portfolio | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
Mortgage Loans Receivable and Bond Portfolio | 4. MORTGAGE LOANS RECEIVABLE AND BOND PORTFOLIO At December 31, 2020, the Company had mortgage loans receivable totaling $18,298,779. The loans bear interest ranging from 0% to 10.25% with a weighted average of approximately 7.68% at December 31, 2020. At December 31, 2019, the Company had mortgage loans receivable totaling $22,425,178. The loans bear interest ranging from 0% to 10.25% with a weighted average of approximately 7.86% at December 31, 2019. The Company has a portfolio of secured church bonds at December 31, 2020 and 2019, which are carried at amortized cost. The bonds pay either semi-annual or quarterly interest ranging from 3.50% to 9.75%. The aggregate par value of secured church bonds equaled $18,934,937 at December 31, 2020 with a weighted average interest rate of 6.70% and $16,713,937 at December 31, 2019 with a weighted average interest rate of 6.43%. These bonds are due at various maturity dates through February 2047. The Company has recorded an aggregate other than temporary impairment of $834,226 and $658,000 for the years ended December 31, 2020 and 2019, respectively primarily for the First Mortgage Bonds issued by Agape Assembly Baptist Church and Soul Reapers Worship Center. These bond series in the aggregate constitute approximately 10.17% and 6.13% of the bond portfolio at December 31, 2020 and 2019, respectively. The Company had maturities and redemptions of bonds of approximately $251,000 and $1,137,000 for the years ended December 31, 2020 and 2019, respectively. The contractual maturity schedule for mortgage loans receivable and the bond portfolio as of December 31, 2020, is as follows: Mortgage Loans Bond Portfolio 2021 $ 825,073 $ 283,000 2022 1,060,158 144,000 2023 735,480 275,000 2024 1,735,211 471,000 2025 1,258,901 261,000 Thereafter 12,683,956 17,630,937 18,298,779 18,934,937 Less loan loss and other than temporary impairment on bonds allowance (1,493,996) (834,226) Less deferred origination fees (198,816 ___-____ Totals $ 16,605,967 $ 18,100,711 The Company currently owns $529,000 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. In October 2014, the bondholders of Agape agreed to a modification in the terms of their bonds which resulted in the temporary 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 were 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 Church subsequently defaulted on their modification agreement in 2016 and no interest payments were made to bondholders during the year ended December 31, 2020. However, the trustee made a distribution to bondholders during 2017 of $18.54 per $1,000 bond as a repayment of principal only, effectively reducing the outstanding balance of each $1,000 bond to approximately $826. The trustee again initiated foreclosure action against the Church and prevailed in its pursuit to foreclose on the Church’s property on November 1, 2019. However, on the eve of the foreclosure sale, the Church again filed for bankruptcy protection. In October 2020, bondholders were asked by the trustee to accept or reject a plan of reorganization. The trustee is recommending bondholders accept the reorganization plan. The Company accepted the reorganization plan. Acceptance of the plan by bondholders could result in a return of approximately 67% of the original principal investment outstanding. The reorganization plan has been accepted by a majority of the bondholders. However, the trustee has not finalized the plan as of December 31, 2020. The Company currently owns $900,000 First Mortgage Bonds issued by Soul Reapers Worship Center International located in Raleigh, North Carolina. The total principal amount of First Mortgage Bonds issued by Soul Reapers is $1,920,000. The Church has failed to make payments as required under the terms of the Trust Indenture. As a Bondholder, the Company expected to receive interest and principal payment(s) on time and according to the terms of the Bonds. The Company has not received any quarterly interest payments from the issuer for the year ended December 31, 2020. The Company did restructure one loan during the year ended December 31, 2020 and none for the year ended December 31, 2019, respectively. A summary of loans restructured or modified as of December 31, 2020 and 2019 are shown below. All of the loans shown, except one, are currently performing under the terms of the modifications for their mortgage obligations. The non-performing loan is a second mortgage loan with a current unpaid principal balance of approximately $45,000. This loan has been declared to be in default. December 31, 2020 Type of Loan Number of Loans Original Principal Balance Original Average Interest Rate Unpaid Principal Balance Modified Average Interest Rate Mortgage Loans 7 $4,696,544 8.193% $3,523,123 6.059% December 31, 2019 Type of Loan Number of Loans Original Principal Balance Original Average Interest Rate Unpaid Principal Balance Modified Average Interest Rate Mortgage Loans 6 $4,100,544 7.892% $3,185,720 5.58% |
Secured Investor Certificates
Secured Investor Certificates | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
Secured Investor Certificates | 5. 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 6.19% and 6.33% for the years ended December 31, 2020 and 2019, respectively. Holders of the secured investor certificates may renew certificates at the current rates and terms upon maturity at the Company’s discretion. Renewals upon maturity are considered neither proceeds from nor issuance of secured investor certificates. Renewals totaled approximately $1,007,000 and $793,000 for the years ended December 31, 2020 and 2019, 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, 2020 is as follows: 2021 $ 2,168,000 2022 1,042,000 2023 3,404,000 2024 1,396,000 2025 1,093,000 Thereafter 14,813,500 $23,916,500 Less deferred offering costs (769,178) Totals $ 23,146,782 The Company’s current certificate offering terminated November 6, 2020. As a result, no new secured investor certificates are not being offered and instead the Company is financing loan requests and liquidity needs through loan and bond payments received and its line of credit. |
Transactions With Affiliates
Transactions With Affiliates | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
Transactions With Affiliates | 6. TRANSACTIONS WITH AFFILIATES The Company has an Advisory Agreement with Church Loan Advisors, Inc. (the “Advisor”). The Advisor is responsible for the day-to-day operations of the Company and provides office space and administrative services. The Advisor and the Company are related through common 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 $284,000 and $323,000 for years ended December 31, 2020 and 2019, respectively. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business American Church Mortgage Company, a Minnesota corporation, was incorporated on May 27, 1994. The Company is engaged 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 the valuation of real estate held for sale. It is at least reasonably possible that these estimates could change in the near term and that the effect of the change, if any, may be material to the financial statements. |
Concentration of Credit Risk | Concentration of Credit Risk The Company's loans have been granted to churches and other non-profit religious organizations. The ability of the Company’s debtors to honor their contracts is dependent on member contributions and the involvement in the church or organization of its senior pastor. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid debt instruments purchased with maturities of three months or less to be cash equivalents. The Company maintains accounts primarily at two financial institutions. At times throughout the year, the Company’s cash and equivalents balances may exceed amounts insured by the Federal Deposit Insurance Corporation. Cash in money market funds is not federally insured. Management believes these financial institutions have strong credit ratings and that the credit related to these deposits is minimal. The Company has not experienced any losses in such accounts. |
Bond Portfolio | Bond Portfolio Bonds that management has the intent to hold to maturity are classified as held to maturity and recorded at amortized costs. Amortization of premiums and accretion of discounts (if any) are recognized in interest income using the interest method over the estimated lives of the securities. Declines in fair value of bonds that are deemed to be other than temporary, if applicable, are reflected in earnings as realized losses. In estimating other-than temporary impairment losses, management considered the length of time and the extent to which fair value has been less than cost, the financial condition and near-term prospects of the issuer, and the interest and the ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. Gains and losses on the sales of securities are recorded on the trade date and determined using the specific-identification method. Bonds transferred from the available for sale category to the held to maturity category are recorded at fair value at the date of transfer. During 2020, the Company reclassified approximately $18,101,000 of bonds available for sale to bonds held to maturity. These bonds were transferred at fair value, which became the costs basis for the bonds held to maturity. There were no unrealized gains or losses at the time of transfer of bonds from available for sale to held to maturity. |
Allowance for Loan Losses on Mortgage Loans Receivable | Allowance for Loan Losses on 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 loan losses on mortgage loans receivable and less deferred loan origination fees. The Company’s loan policy provides an allowance for estimated uncollectible loans based on an evaluation of the current status of the loan portfolio with application of reserve percentages to specific loans based on payment status. This policy reserves for principal amounts outstanding on a specific loan if cumulative interruptions occur in the normal payment schedule of the loan, therefore, the Company recognizes a provision for losses and an allowance for the outstanding principal amount of the loan in the Company’s portfolio if the amount is in doubt of collection. Additionally, no interest income is recognized on impaired loans that are declared to be in default and are in the foreclosure process. At December 31, 2020, the Company reserved $1,493,996 for fourteen mortgage loans. Nine of these loans are three or more mortgage payments in arrears of which two are declared to be in default. The total principal amount of these fourteen loans totaled approximately $6,498 A summary of transactions in the allowance for mortgage loans for the years ended December 31, 2020 and 2019 is as follows: Balance at December 31, 2019 $ 1,429,487 Provisions for loan losses 64,509 Loan charge-offs - Balance at December 31, 2020 $ 1,493,996 Balance at December 31, 2018 $ 1,672,003 Provisions for loan losses 87,727 Loan charge-offs (330,243) Balance at December 31, 2019 $ 1,429,487 Loans that are in the foreclosure process or are declared to be in default, had a principal balance of $588,787 and were considered impaired and written down to their estimated fair value of $37,771 as of December 31, 2020. As a result, the Company recognized a specific valuation allowance against these impaired loans totaling $551,016 as of December 31, 2020. Loans that are in the foreclosure process or are declared to be in default, had a principal balance of $810,470 and were considered impaired and written down to their estimated fair value of $255,797 as of December 31, 2019. As a result, the Company recognized a specific valuation allowance against these impaired loans totaling $554,673 as of December 31, 2019. The outbreak of COVID-19 has affected churches due to shelter-in-place directives which has ceased or greatly curtailed social gatherings such as church worship services. The Company’s borrowers have experienced financial duress during the Covid-19 shelter in place restrictions, amplified by the financial setbacks for many of the church members who have lost their jobs, been furloughed, or had their incomes diminished. The Company has provided some temporary relief by allowing its borrower’s to either make interest only payments for a period of ninety days or forgo one monthly mortgage payment (forbearance). The Company provided nine churches totaling approximately $3,209,000, in principal outstanding, ninety days interest only payments and five churches totaling approximately $2,618,000, in principal outstanding, one-month forbearance of its mortgage payments. As of December 31, 2020, all churches, except four, have returned to full monthly amortization payments. These four churches totaling approximately $758,000, in principal outstanding, have remained on interest only payments. This relief will impact the Company’s revenue and the Company will experience declines in payments due from borrowers and missed bond payments on the bonds owned by the Company which will impact operating income and may potentially impact future distributions and the ability to make payments due on the Company’s certificates and dividends to its shareholders. The future impact of COVID-19 on the Company’s investments or operations cannot be reasonably estimated at this time. The Company will declare a loan to be in default and will place the loan on non-accrual status when the following thresholds have been met: (i) the borrower has missed three consecutive mortgage payments; (ii) the borrower has not communicated to the Company any legitimate reason for delinquency in its payments to the Company and has not arranged for the re-continuance of payments; (iii) lines of communication to the borrower have broken down such that any reasonable prospect of rehabilitating the loan and return of regular payments is gone. The Company 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. The accrual of interest on a loan is discontinued when the loan becomes 90 consecutive days delinquent or whenever management believes the borrower will be unable to make payments as they become due. The interest on these loans is subsequently accounted for on the cash basis or using the cost-recovery method until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current or restructured and future payments are reasonably assured. No interest income was recognized on non-accrual loans for the years ended December 31, 2020 and 2019, respectively. When a loan is declared in default according to the Company’s policy or deemed to be doubtful of collection, the loan committee of the Advisor to the Company will direct the staff to charge-off the uncollectable receivables. Loans that exceed 90 days past due but continue to accrue interest had a principal balance of $2,795,175 and $3,263,492 for the years ended December 31, 2020 and 2019, respectively. These loans were considered impaired and written down to their estimated fair value of $2,218,773 and $2,716,445 as of December 31, 2020 and 2019, respectively. As a result, the Company recognized a specific valuation allowance against these impaired loans totaling $576,442 and $547,053 for the years ended December 31, 2020 and 2019, 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 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, totaled $428,996 and $651,398 for the years ended December 31, 2020 and 2019, respectively. |
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 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 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. |
Gain (Losses) on Real Estate Held For Sale | Gain (Losses) on Real Estate Held For Sale The Company records a gain or loss from real estate held for sale when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. When the Company finances real estate held for sale to the buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, real estate held for sale is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. In determining the gain or loss on the sale, the Company adjusts the transaction prices and related gain (loss) on sale if a significant financing component is present. |
Deferred Financing Costs | Deferred Financing Costs The Company defers the costs related to obtaining financing. These costs are amortized over the life of the financing using the straight-line method, which approximates the effective interest method. |
Income (Loss) Per Common Share | Income (Loss) Per Common Share There were no dilutive shares for the years ended December 31, 2020 and 2019, respectively. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In 2016 the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 is intended to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit. For public entities, deemed smaller reporting companies, such as the Company, ASU 2016-13 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company has not yet fully evaluated the potential effects of adopting ASU 2016-13 on the Company’s results of operations, financial position or cash flows. |
Income Taxes | Income Taxes The Company elected to be taxed as a Real Estate Investment Trust (REIT). Accordingly, the Company is not subject to Federal income tax to the extent of distributions to its shareholders if the Company meets all the requirements under the REIT provisions of the Internal Revenue Code. The Company evaluated its recognition of income tax benefits using a two-step approach to recognizing and measuring tax benefits when realization of the benefits is uncertain. The first step is to determine whether the benefit meets the more-likely-than-not condition for recognition and the second step is to determine the amount to be recognized based on the cumulative probability that exceeds 50%. Primarily due to the Company’s tax status as a REIT, the Company does not have any significant tax uncertainties that would require recognition or disclosure. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Allowance For Mortgage Loans | Balance at December 31, 2019 $ 1,429,487 Provisions for loan losses 64,509 Loan charge-offs - Balance at December 31, 2020 $ 1,493,996 Balance at December 31, 2018 $ 1,672,003 Provisions for loan losses 87,727 Loan charge-offs (330,243) Balance at December 31, 2019 $ 1,429,487 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Recurring Fair Value | Recurring Fair Value at December 31, 2019 Assets: Quoted Prices in Active Markets for Identical Instruments Significant Other Observable Inputs Significant Unobservable Inputs Total Bond portfolio available for sale $ $ $ 16,055,937 $ 16,055,937 |
Nonrecurring Fair Value | Nonrecurring Fair Value at December 31, 2020 Assets: Quoted Prices in Active Markets for Identical Instruments Significant Other Observable Inputs Significant Unobservable Inputs Total Bond portfolio $ $ $ 4,650,372 $ 4,650,372 Impaired loans $ $ $ 5,004,424 $ 5,004,424 Real estate held for sale $ $ $ 428,996 $ 428,996 Nonrecurring Fair Value at December 31, 2019 Assets: Quoted Prices in Active Markets for Identical Instruments Significant Other Observable Inputs Significant Unobservable Inputs Total Impaired loans $ $ $ 4,557,326 $ 4,557,326 Real estate held for sale $ $ $ 651,398 $ 651,398 |
Fair Valuation Technique | Fair Value Valuation Technique Significant Unobservable Inputs(s) Range/Weighted December 31, 2020 Bond Portfolio $ 4,650,372 Market or Income Approach Discount to Appraised Values 10-20% Impaired Loans $ 5,004,424 Market or Income Approach Discount to Appraised Values 10-20% Real Estate Held for Sale $ 428,996 Market or Income Approach Discount to Appraised Values 10-20% December 31, 2019 Impaired Loans $ 4,557,326 Market or Income Approach Discount to Appraised Values 10-20% Real Estate Held for Sale $ 651,398 Market or Income Approach Discount to Appraised Values 10-20% |
Carrying Value Financial Instruments | December 31, 2020 Level 1 Level 2 Level 3 Carrying Value at December 31, 2020 Cash and equivalents $ 87,702 $ $ $ 87,702 Accounts receivable 101,532 101,532 Interest receivable 242,019 242,019 Mortgage loans receivable 16,605,967 16,605,967 Bond portfolio 18,100,711 18,100,711 Line of credit 2,288,000 2,288,000 Secured investor certificates 23,916,500 23,916,500 Totals $ 2,719,253 $ 23,916,500 $ 34,706,678 $ 61,342,431 December 31, 2019 Level 1 Level 2 Level 3 Carrying Value Cash and equivalents $ 191,987 $ $ $ 191,987 Accounts receivable 125,539 125,539 Interest receivable 185,190 185,190 Mortgage loans receivable 20,717,058 20,717,058 Bond portfolio 16,055,937 16,055,937 Line of credit 1,445,000 1,445,000 Secured investor certificates 26,850,000 26,850,000 Totals $ 1,947,716 $ 26,850,000 $ 38,481,114 $ 67,278,830 |
Mortgage Loans Receivable and_2
Mortgage Loans Receivable and Bond Portfolio (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
Mortgage Loans & Bond Portfolio | Mortgage Loans Bond Portfolio 2021 $ 825,073 $ 283,000 2022 1,060,158 144,000 2023 735,480 275,000 2024 1,735,211 471,000 2025 1,258,901 261,000 Thereafter 12,683,956 17,630,937 18,298,779 18,934,937 Less loan loss and other than temporary impairment on bonds allowance (1,493,996) (834,226) Less deferred origination fees (198,816 ___-____ Totals $ 16,605,967 $ 18,100,711 |
Loans restructured | December 31, 2020 Type of Loan Number of Loans Original Principal Balance Original Average Interest Rate Unpaid Principal Balance Modified Average Interest Rate Mortgage Loans 7 $4,696,544 8.193% $3,523,123 6.059% December 31, 2019 Type of Loan Number of Loans Original Principal Balance Original Average Interest Rate Unpaid Principal Balance Modified Average Interest Rate Mortgage Loans 6 $4,100,544 7.892% $3,185,720 5.58% |
Secured Investor Certificates (
Secured Investor Certificates (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
Maturity Schedule Secured Investor Certificates | 2021 $ 2,168,000 2022 1,042,000 2023 3,404,000 2024 1,396,000 2025 1,093,000 Thereafter 14,813,500 $23,916,500 Less deferred offering costs (769,178) Totals $ 23,146,782 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Allowance For Mortgage Loans (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||
Balance at beginning of year | $ 1,429,487 | $ 1,672,003 |
Provisions for loan losses | 64,509 | 87,727 |
Loan charge-offs | (330,243) | |
Balance the end of the year | $ 1,493,996 | $ 1,429,487 |
Fair Value Measurement - Recurr
Fair Value Measurement - Recurring Fair Value (Details) | Dec. 31, 2019USD ($) |
Bond portfolio available for sale | $ 16,055,937 |
Recurring Fair Value Bond Portfolio Available For Sale | |
Bond portfolio available for sale | $ 16,055,937 |
Fair Value Measurement - Nonrec
Fair Value Measurement - Nonrecurring Fair Value (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Bond portfolio fair value | $ 4,650,372 | |
Impaired loans | 5,004,424 | 4,557,326 |
Real Estate Held for Sale | 428,996 | 651,398 |
Nonrecurring Fair Value Active Markets Level 1 | ||
Assets | ||
Bond portfolio fair value | ||
Impaired loans | ||
Real Estate Held for Sale | ||
Nonrecurring Fair Value Observale Inputs Leve 2 | ||
Assets | ||
Bond portfolio fair value | ||
Impaired loans | ||
Real Estate Held for Sale | ||
Nonrecurring Fair Value Unobeservable Inputs Level 3 | ||
Assets | ||
Bond portfolio fair value | 4,650,372 | |
Impaired loans | 5,004,424 | |
Real Estate Held for Sale | $ 428,996 | $ 651,398 |
Fair Value Measurement - Carryi
Fair Value Measurement - Carrying Value Financial Instruments (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Cash and equivalents | $ 87,702 | $ 191,987 | $ 2,183,441 |
Line of Credit | 2,288,000 | 1,445,000 | |
Level 1-2-3 | |||
Cash and equivalents | 87,702 | 191,987 | |
Accounts receivable | 101,532 | 125,539 | |
Interest receivable | 242,019 | 185,190 | |
Mortgage loans receivable | 16,605,967 | 20,717,058 | |
Bond portfolio | 18,100,711 | 16,055,937 | |
Line of Credit | 2,288,000 | 1,445,000 | |
Secured investor certificates | 23,916,500 | 26,950,000 | |
Totals | $ 61,342,431 | $ 67,278,830 |
Mortgage Loans Receivable and_3
Mortgage Loans Receivable and Bond Portfolio - Mortgage Loans & Bond Portfolio (Details) | Dec. 31, 2020USD ($) |
Mortgage Loans | |
2021 | $ 825,073 |
2022 | 1,060,158 |
2023 | 735,480 |
2024 | 1,735,211 |
2025 | 1,258,901 |
Thereafter | 12,683,956 |
Subtotal | 18,298,779 |
Less loan loss and other than temporary impairment on bonds allowance | (1,493,996) |
Less deferred origination fees | (198,816) |
Totals | 16,605,967 |
Bond Portfolio | |
2021 | 283,000 |
2022 | 144,000 |
2023 | 275,000 |
2024 | 471,000 |
2025 | 261,000 |
Thereafter | 17,630,937 |
Subtotal | 18,934,937 |
Less loan loss and other than temporary impairment on bonds allowance | (834,226) |
Less deferred origination fees | |
Totals | $ 18,100,711 |
Mortgage Loans Receivable and_4
Mortgage Loans Receivable and Bond Portfolio - Loans restructured (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Notes to Financial Statements | ||
Number of Loans | $ 7 | $ 6 |
Original Principal Balance | 4,696,544 | 4,100,544 |
Original Average Interest Rate | 8 | 8 |
Unpaid Principal Balance | 3,523,123 | 3,185,720 |
Modified Average Interest Rate | $ 6 | $ 6 |
Secured Investor Certificates -
Secured Investor Certificates - Maturity Schedule Secured Investor Certificates (Details) - USD ($) | 12 Months Ended | 117 Months Ended | |||||
Dec. 31, 2025 | Dec. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2035 | |
Notes to Financial Statements | |||||||
Secured Investor Certificate Maturity Schedule | $ 1,093,000 | $ 1,396,000 | $ 3,404,000 | $ 1,042,000 | $ 2,168,000 | $ 23,916,500 | $ 14,813,500 |
Certificates Deferred Offering Costs | (769,178) | ||||||
Secured Investor Certificates Net | $ 23,146,782 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||
Allowance for Mortgage Loans Receivable | $ 1,493,996 | $ 1,429,487 |
Loans Exceeding 90 Days Past Due | 2,795,175 | 3,263,492 |
Fair Value Loans Exceeding 90 Days Past Due | 2,218,773 | 2,716,445 |
Allowance for Loans Esceeding 90 Days Past Due | 576,442 | 547,053 |
Real Estate Held for Sale Carrying Value | 428,996 | 651,398 |
Allowance Allocated to Impaired Loans | 551,016 | 554,673 |
Loans In Default | 588,787 | 810,470 |
Principal Balance Loans Receivable Allowance | 6,498,000 | 5,987,000 |
Fair Value Loans In Default | 37,771 | 255,797 |
Loans Interest Only 90-Day Period | 3,209,000 | |
Loans 1 Month Forbearance | 2,618,000 | |
Principal Balance Loans Interest Only | $ 758,000 |
Fair Value Measurement (Details
Fair Value Measurement (Details Narrative) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Fair Value Disclosures [Abstract] | ||
Bonds carrying value held to maturity | $ 5,484,998 | |
Bond impairment charge | 834,226 | |
Fair value bonds held to maturity | 4,650,372 | |
Impaired loans carrying value | 6,498,421 | 5,986,813 |
Loans impairment charge | 1,493,996 | 1,429,487 |
Fair value impaired loans | 5,004,424 | 4,557,326 |
Impairment charge real estate held for sale | $ 118,232 | $ 10,617 |
Mortgage Loans Receivable and_5
Mortgage Loans Receivable and Bond Portfolio (Details Narrative) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Notes to Financial Statements | ||
Mortgage Loans Receivable Gross | $ 18,462,121 | $ 22,425,178 |
Church Bonds Owned Gross | 19,054,937 | 16,713,937 |
Bond Reserve Fund | 770,802 | 658,000 |
Agape First Mortgage Bonds | 529,000 | 529,000 |
Agape Second Mortgage Bonds | 497,000 | 497,000 |
Agape First Mortgage Bonds Gross | 7,200,000 | 7,200,000 |
Agape Second Mortgage Bonds Gross | 715,000 | 715,000 |
Agape Distribution to Bondholders | 19 | 19 |
Principal Balance Agape Bonds | 826 | 826 |
Soul Reapers First Mortgage Bonds | 900,000 | |
Soul Reapers First Mortgage Bonds Gross | 1,920,000 | |
Maturities and Redemption of Bonds | 131,000 | 1,137,000 |
Restructured Mortgage Loans | ||
Non-performing restuctured loans | $ 45,000 |
Secured Investor Certificates_2
Secured Investor Certificates (Details Narrative) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Notes to Financial Statements | ||
Renewals Secured Investor Certificates | $ 1,007,000 | $ 793,000 |
Transactions With Affiliates (D
Transactions With Affiliates (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Notes to Financial Statements | ||
Advisor Managment Fees | $ 284,000 | $ 323,000 |