Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Jun. 29, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | MINISTRY PARTNERS INVESTMENT COMPANY, LLC | |
Entity Central Index Key | 0000944130 | |
Document Type | 10-K | |
Document Period End Date | Dec. 31, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | FY | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Entity Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 146,522 | |
Entity Public Float | $ 7,904,250 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Assets: | ||
Cash | $ 9,877 | $ 9,907 |
Restricted cash | 51 | 58 |
Loans receivable, net of allowance for loan losses of $2,480 and $2,097 as of December 31, 2018 and December 31, 2017, respectively | 143,380 | 148,835 |
Accrued interest receivable | 711 | 742 |
Investments in joint venture | 887 | 896 |
Property and equipment, net | 87 | 103 |
Servicing assets | 212 | 270 |
Other assets | 234 | 211 |
Total assets | 155,439 | 161,022 |
Liabilities: | ||
NCUA credit facilities | 76,515 | 81,492 |
Notes payable, net of debt issuance costs of $92 and $85 as of December 31, 2018 and December 31, 2017, respectively | 68,300 | 69,003 |
Accrued interest payable | 249 | 208 |
Other liabilities | 844 | 890 |
Total liabilities | 145,908 | 151,593 |
Members' Equity: | ||
Series A preferred units, 1,000,000 units authorized, 117,100 units issued and outstanding at December 31, 2018 and December 31, 2017 (liquidation preference of $100 per unit): See Note 13 | 11,715 | 11,715 |
Class A common units, 1,000,000 units authorized, 146,522 units issued and outstanding at December 31, 2018 and December 31, 2017; See Note 13 | 1,509 | 1,509 |
Accumulated deficit | (3,693) | (3,795) |
Total members' equity | 9,531 | 9,429 |
Total liabilities and members' equity | $ 155,439 | $ 161,022 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Consolidated Balance Sheets [Abstract] | ||
Allowance for loan losses | $ 2,480 | $ 2,097 |
Notes payable, debt issuance costs | $ 92 | $ 85 |
Preferred units - Series A, units authorized | 1,000,000 | 1,000,000 |
Preferred units - Series A, units issued | 117,100 | 117,100 |
Preferred units - Series A, units outstanding | 117,100 | 117,100 |
Preferred units - Series A, liquidation preference per unit | $ 100 | $ 100 |
Common units - Class A, units authorized | 1,000,000 | 1,000,000 |
Common units - Class A, units issued | 146,522 | 146,522 |
Common units - Class A, units outstanding | 146,522 | 146,522 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Interest income: | ||
Interest on loans | $ 9,112 | $ 9,424 |
Interest on interest-bearing accounts | 96 | 48 |
Total interest income | 9,208 | 9,472 |
Interest expense: | ||
NCUA Credit Facilities | 2,000 | 2,123 |
Notes payable | 2,836 | 2,465 |
Total interest expense | 4,836 | 4,588 |
Net interest income | 4,372 | 4,884 |
Provision for loan losses | 666 | 262 |
Net interest income after provision for loan losses | 3,706 | 4,622 |
Non-interest income: | ||
Broker-dealer commissions and fees | 523 | 854 |
Other lending income | 921 | 329 |
Total non-interest income | 1,444 | 1,183 |
Non-interest expenses: | ||
Salaries and benefits | 2,695 | 2,754 |
Marketing and promotion | 140 | 166 |
Office occupancy | 153 | 152 |
Office operations and other expenses | 1,224 | 1,287 |
Legal and accounting | 441 | 485 |
Total non-interest expenses | 4,653 | 4,844 |
Income before provision for income taxes | 497 | 961 |
Provision for income taxes and state LLC fees | 20 | 24 |
Net income | $ 477 | $ 937 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) $ in Thousands | Series A Preferred Units [Member] | Class A Common Units [Member] | Accumulated Deficit [Member] | Total |
Beginning balance at Dec. 31, 2016 | $ 11,715 | $ 1,509 | $ (4,417) | $ 8,807 |
Beginning balance, shares at Dec. 31, 2016 | 117,100 | 146,522 | ||
Net income | 937 | 937 | ||
Dividends on preferred units | (315) | (315) | ||
Ending balance at Dec. 31, 2017 | $ 11,715 | $ 1,509 | (3,795) | 9,429 |
Ending balance, shares at Dec. 31, 2017 | 117,100 | 146,522 | ||
Net income | 477 | 477 | ||
Dividends on preferred units | (375) | (375) | ||
Ending balance at Dec. 31, 2018 | $ 11,715 | $ 1,509 | $ (3,693) | $ 9,531 |
Ending balance, shares at Dec. 31, 2018 | 117,100 | 146,522 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |
Net income | $ 937 |
Adjustments to reconcile net income to net cash used by operating activities: | |
Depreciation | 30 |
Amortization of deferred loan fees | (438) |
Amortization of debt issuance costs | 114 |
Provision for loan losses | 262 |
Accretion of loan discount | (44) |
Gain on sale of loans | (136) |
Loss on investments | (4) |
Changes in: | |
Accrued interest receivable | (85) |
Other assets | 74 |
Accrued interest payable | 35 |
Other liabilities | 29 |
Net cash provided by operating activities | 774 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |
Loan originations | (29,917) |
Loan sales | 9,735 |
Loan principal collections | 15,784 |
Purchase of property and equipment | (18) |
Net cash provided (used) by investing activities | (4,416) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |
Change in NCUA borrowings | (4,834) |
Net change in notes payable | 8,532 |
Debt issuance costs | (121) |
Dividends paid on preferred units | (306) |
Net cash provided (used) by financing activities | 3,271 |
Net decrease in cash and restricted cash | (371) |
Cash, cash equivalents, and restricted cash at beginning of period | 10,336 |
Cash, cash equivalents, and restricted cash at end of period | 9,965 |
Supplemental disclosures of cash flow information | |
Interest paid | 4,553 |
Income taxes paid | 22 |
Dividends declared to preferred unit holders | $ 138 |
Nature of Business and Summary
Nature of Business and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Nature of Business and Summary of Significant Accounting Policies [Abstract] | |
Nature of Business and Summary of Significant Accounting Policies | Note 1. Nature of Business and Summary of Significant Accounting Policies Nature of Business Throughout these notes to consolidated financial statements, we refer to Ministry Partners Investment Company, LLC and its subsidiaries as “the Company” . The Company was formed in California in 1991. The Company’s primary operations are financing commercial real property secured loans and providing investment services for the benefit of evangelical churches and church organizations. The Company funds its operations primarily through the sale of debt securities. The Company’s wholly owned subsidiaries are: · Ministry Partners Funding, LLC (“ MPF ”), · MP Realty Services, Inc., a California corporation (“ MP Realty ”), and · Ministry Partners Securities, LLC, a Delaware limited liability company (“ MP Securities ”). We formed MPF in 2007 and rendered the subsidiary inactive on November 30, 2009. In December 2014, the Company reactivated MPF to hold loans used as collateral for our Secured Investment Certificates. The Company formed MP Realty in November 2009, and obtained a license to operate as a corporate real estate broker through the California Department of Real Estate on February 23, 2010. MP Realty has conducted limited operations to date. We formed MP Securities on April 26, 2010 to provide investment and financing solutions for individuals, churches, charitable institutions, and faith-based organizations. MP Securities acts as the selling agent for the Company’s public and private placement notes. Principles of Consolidation The consolidated financial statements include the accounts of Ministry Partners Investment Company, LLC and its wholly owned subsidiaries, MPF, MP Realty, and MP Securities. We eliminate all significant inter ‑company balances and transactions in consolidation. Conversion to LLC Effective as of December 31, 2008, the Company converted its form of organization from a corporation organized under California law to a limited liability company organized under the laws of the State of California. With the filing of Articles of Organization-Conversion with the California Secretary of State, the separate existence of Ministry Partners Investment Corporation ceased and the entity continued by operation of law under the name Ministry Partners Investment Company, LLC. Since the conversion became effective, a group of managers provides oversight of the Company’s affairs and carries out their duties similar to the role and function that the Board of Directors performed under the previous bylaws. Operating like a Board of Directors, the managers have full, exclusive, and complete discretion, power, and authority to oversee the management of Company affairs. Instead of Articles of Incorporation and Bylaws, an Operating Agreement governs management structure and governance procedures. The Company’s managers and members have entered into this Operating Agreement. Cash and Cash Equivalents For purposes of the statement of cash flows, cash equivalents include time deposits, certificates of deposit, and all highly liquid debt instruments with original maturities of three months or less. The Company had no cash positions other than demand deposits as of December 31, 2018 and December 31, 2017 . The National Credit Union Insurance Fund insures a portion of the Company’s cash held at credit unions. The Federal Deposit Insurance Corporation (“ FDIC” ) insures a portion of cash held at other financial institutions. The Company maintains cash that may exceed insured limits. The Company does not expect to incur losses in its cash accounts. Reclassifications Certain reclassifications have been made to the 2017 financial statements to conform to the 2018 presentation. These reclassifications do not affect member’s equity or net income for the year ended December 31, 2017 Use of Estimates The preparation of consolidated financial statements in conformity with United States generally accepted accounting principles (" GAAP ") requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates govern areas such as the allowance for credit losses and the fair value of financial instruments. Actual results could differ from these estimates. Investments in Joint Venture On a periodic basis, management analyzes the Company’s investment in a joint venture for impairment by comparing the carrying value of the investment to the estimated value of the underlying real property. Management records any impairment charges as a valuation allowance against the value of the asset. The Company’s share of income and expenses of the joint venture will increase or decrease the Company’s investment and will be recorded on the income statement as realized gains or losses on investment. Loans Receivable Loans that management has the intent and ability to hold for the foreseeable future are reported at their outstanding unpaid principal balance adjusted for an allowance for loan losses, deferred loan fees and costs, and loan discounts. Interest income on loans is accrued on a daily basis using the interest method. Loan origination fees and costs are deferred and recognized as an adjustment to the related loan yield using the interest method. Loan discounts represent interest accrued and unpaid which has been added to loan principal balances at the time the loan was restructured. Loan discounts are accreted to interest income over the term of the restructured loan once the loan is deemed fully collectible and is no longer considered impaired. Loan discounts also represent the differences between the purchase price on loans the Company purchased from third parties and the recorded principal balance of the loan. These discounts are accreted to interest income over the term of the loan using the interest method. Discounts are not accreted to income on impaired loans. The accrual of interest is discontinued at the time a loan is 90 days past due. Management can discontinue accrual of interest prior to the loan becoming 90 days past due if we determine the loan is impaired. Past due status is based on contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged off at an earlier date if management considers the collection of principal or interest doubtful. All interest accrued but not collected for loans that are placed on nonaccrual or charged off are reversed against interest income. The interest on these loans is accounted for on the cash basis or cost-recovery method until the loan qualifies for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Allowance for Loan Losses The Company sets aside an allowance or reserve for loan losses through charges to earnings, which are shown in the Company’s Consolidated Statements of Income as a provision for loan losses. Loan losses are charged against the allowance when management believes the uncollectability of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. The allowance for loan losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. The allowance consists of general and specific components. The general component covers non-classified loans and is based on historical loss experience adjusted for qualitative factors. In establishing the allowance for loan losses, management considers significant factors that affect the collectability of the Company’s loan portfolio. While historical loss experience provides a reasonable starting point for the analysis, such experience by itself does not form a sufficient basis to determine the appropriate level of the allowance for loan losses. Management also considers qualitative (or environmental) factors that are likely to cause estimated credit losses associated with our existing portfolio to differ from historical loss experience, including: · Changes in lending policies and procedures, including changes in underwriting standards and collection; · Changes in national, regional and local economic and business conditions and developments that affect the collectability of the portfolio; · Changes in the volume and severity of past due loans, the volume of nonaccrual loans, and the volume and severity of adversely classified loans; · Changes in the value of underlying collateral for collateral-dependent loans; and · The effect of credit concentrations. These factors are adjusted on an on-going basis. The specific component of the Company’s allowance for loan losses relates to loans that are classified as impaired. For such loans, an allowance is established when the discounted cash flows, collateral value, or observable market price of the impaired loan is lower than the carrying value of that loan. All loans in the loan portfolio are subject to impairment analysis. The Company reviews its loan portfolio monthly by examining delinquency reports and information related to the financial condition of its borrowers and collateral value of its loans. Through this process, the Company identifies potential impaired loans. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal and interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting future scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower's prior payment record, and the amount of the shortfall in relation to the principal and interest owed. A loan is generally deemed to be impaired when it is 90 days or more past due, or earlier when facts and circumstances indicate that it is probable that a borrower will be unable to make payments in accordance with the loan contract. Impairment is measured on a loan-by-loan basis by either the present value of expected future cash flows discounted at the loan's effective interest rate, the obtainable market price, or the fair value of the collateral if the loan is collateral-dependent. When the Company modifies the terms of a loan for a borrower that is experiencing financial difficulties, a troubled debt restructuring is deemed to have occurred and the loan is classified as impaired. Loans or portions thereof are charged off when they are determined by management to be uncollectible. Uncollectability is evaluated periodically on all loans classified as “Loans of Lesser Quality.” The Company had historically not charged off a loan until the borrower has exhausted all reasonable means of making loan payments from cash flows, at which point the underlying collateral becomes subject to foreclosure. Among other variables, when assessing uncollectability, management will consider factors such as the financial condition of the borrower and the value of the underlying collateral. However, in 2018 the Company has begun to charge off loans in workout situations. In these situations, the Company charges off the amount that it deems it will not collect due to the terms of the workout. Troubled Debt Restructurings A troubled debt restructuring is a loan for which the Company, for reasons related to a borrower’s financial difficulties, grants a concession to a borrower that the Company would not otherwise consider. A restructuring of a loan usually involves an interest rate modification, extension of the maturity date, or reduction of accrued interest owed on the loan on a contingent or absolute basis. Loans that are renewed at below-market terms are considered to be troubled debt restructurings if the below-market terms represent a concession due to the borrower’s troubled financial condition. Troubled debt restructurings are classified as impaired loans and are measured at the present value of estimated future cash flows using the loan's effective rate at inception of the loan. The change in the present value of cash flows attributable to the passage of time is reported as interest income. If the loan is considered to be collateral-dependent, impairment is measured based on the fair value of the collateral. Loan Portfolio Segments and Classes Management segregates the loan portfolio into portfolio segments for purposes of evaluating the allowance for loan losses. A portfolio segment is defined as the level at which the Company develops and documents a systematic method for determining its allowance for loan losses. The portfolio segments are segregated based on loan types and the underlying risk factors present in each loan type. Such risk factors are periodically reviewed by management and revised as deemed appropriate. Company’s loan portfolio consists of one segment – church loans. The loan portfolio is segregated into the following portfolio classes: Loan Class Class Description Wholly-Owned First Collateral Position Wholly-owned loans and the retained portion of loans originated by the Company and sold for which the Company possesses a senior lien on the collateral underlying the loan. Wholly-Owned Junior Collateral Position Wholly-owned loans and the retained portion of loans originated by the Company and sold for which the Company possesses a lien on the underlying collateral that is superseded by another lien on the same collateral. This class also contains any loans that are not secured. These loans present higher credit risk than loans for which the Company possesses a senior lien due to the increased risk of loss should the loan default. Participations First Collateral Position Participated loans purchased from another financial entity for which the Company possesses a senior lien on the collateral underlying the loan. Loan participations purchased may present higher credit risk than wholly owned loans because disposition and direction of actions regarding the management and collection of the loans must be coordinated and negotiated with the other participants, whose best interests regarding the loan may not align with those of the Company. Participations Junior Collateral Position Participated loans purchased from another financial entity for which the Company possesses a lien on the underlying collateral that is superseded by another lien on the same collateral. Loan participations in the junior collateral position loans have higher credit risk than wholly owned loans and participated loans purchased where the Company possesses a senior lien on the collateral. The increased risk is the result of the factors presented above relating to both junior lien positions and participations. Credit Quality Indicators The Company’s policies provide for the classification of loans that are considered to be of lesser quality as watch, special mention, substandard, doubtful, or loss assets. Special mention assets exhibit potential or actual weaknesses that present a higher potential for loss under certain conditions. An asset is considered substandard if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Substandard assets include those assets characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Assets classified as doubtful have all of the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable, based on currently existing facts, conditions, and values. Assets (or portions of assets) classified as loss are those considered uncollectible and of such little value that their continuance as assets is not warranted. Assets that do not expose the Company to risk sufficient to warrant classification in one of the aforementioned categories, but which possess potential weaknesses that deserve close attention, are designated as watch. Loans designated as watch are considered pass loans. The Company has established a standard loan grading system to assist management and review personnel in their analysis and supervision of the loan portfolio. The loan grading system is as follows: Pass : The borrower has sufficient cash to fund debt services. The borrower may be able to obtain similar financing from other lenders with comparable terms. The risk of default is considered low. Watch : These loans exhibit potential or developing weaknesses that deserve extra attention from credit management personnel. If the developing weakness is not corrected or mitigated, there may be deterioration in the ability of the borrower to repay the debt in the future. Loans graded Watch must be reported to executive management and the Board of Managers. Potential for loss under adverse circumstances is elevated, but not foreseeable. Watch loans are considered pass loans. Special mention : These credit facilities exhibit potential or actual weaknesses that present a higher potential for loss under adverse circumstances, and deserve management’s close attention. If uncorrected, these weaknesses may result in deterioration of the repayment prospects for the loan at some future date. Substandard : Loans and other credit extensions bearing this grade are considered to be inadequately protected by the current sound worth and debt service capacity of the borrower or of any pledged collateral. These obligations, even if apparently protected by collateral value, have well-defined weaknesses related to adverse financial, managerial, economic, ministry, or environmental conditions which have clearly jeopardized repayment of principal and interest as originally intended. Furthermore, there is the possibility that some future loss will be sustained if such weaknesses are not corrected. Doubtful : This classification consists of loans that display the properties of substandard loans with the added characteristic that the severity of the weaknesses makes collection or liquidation in full highly questionable or improbable based upon currently existing facts, conditions, and values. The probability of some loss is very high, but because of certain important and reasonably specific factors, the amount of loss cannot be exactly determined. Such pending factors could include merger or liquidation, additional capital injection, refinancing plans, or perfection of liens on additional collateral. Loss : Loans in this classification are considered uncollectible and cannot be justified as a viable asset. This classification does not mean the loan has absolutely no recovery value, but that it is neither practical nor desirable to defer writing off this loan even though partial recovery may be obtained in the future. Foreclosed Assets Assets acquired through foreclosure or other proceedings are initially recorded at fair value at the date of foreclosure less estimated costs of disposal, which establishes a new cost. After foreclosure, valuations are periodically performed by management, and foreclosed assets held for sale are carried at the lower of cost or fair value, less estimated costs of disposal. Any write-down to fair value just prior to the transfer to foreclosed assets is charged to the allowance for loan losses. The Company’s real estate assets acquired through foreclosure or other proceedings are evaluated regularly to ensure that the recorded amount is supported by its current fair value and that valuation allowances to reduce the varying amount to fair value less estimated costs of disposal are recorded as necessary. Revenue and expense from the operation of the Company’s foreclosed assets and changes in the valuation allowance are included in net expenses from foreclosed assets. When the foreclosed property is sold, a gain or loss is recognized on the sale for the difference between the sales proceeds and the carrying amount of the property. Transfers of Financial Assets Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to have been surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. The Company, from time to time, sells participation interests in mortgage loans it has originated or acquired. In order to recognize the transfer of a portion of a financial asset as a sale, the transferred portion and any portion that continues to be held by the transferor must represent a participating interest, and the transfer of the participating interest must meet the conditions for surrender of control. To qualify as a participating interest (i) each portion of a financial asset must represent a proportionate ownership interest in an entire financial asset; (ii) from the date of transfer, all cash flows received from the entire financial asset must be divided proportionately among the participating interest holders in an amount equal to their share of ownership; (iii) the transfer must be made on a non-recourse basis (other than standard representations and warranties made under the loan participation sale agreement); (iv) the transfer may not be subordinate to any other participating interest holder; and (v) no party has the right to pledge or exchange the entire financial asset. If either the participating interest or surrender of control criteria is not met, the transaction is accounted for as a secured borrowing arrangement. Under some circumstances, when the Company sells participations in wholly owned loans receivable that it services, it retains a servicing asset that is initially measured at fair value. As quoted market prices are generally not available for these assets, the Company estimates fair value based on the present value of future expected cash flows associated with the loan receivable. The Company amortizes servicing assets over the life of the associated receivable using the interest method. Any gain or loss recognized on the sale of loans receivable depends in part on both the previous carrying amount of the financial assets involved in the sale, allocated between the assets sold and the interests that continue to be held by the Company based on their relative fair value at the date of transfer, and the proceeds received. Property and Equipment Furniture, fixtures, and equipment are stated at cost, less accumulated depreciation. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets, which range from three to seven years. Debt Issuance Costs Debt issuance costs are related to borrowings from financial institutions as well as public offerings of unsecured notes, and are amortized into interest expense over the contractual terms of the debt using the straight line method. Employee Benefit Plan Contributions to the qualified employee retirement plan are recorded as compensation cost in the period incurred. Income Taxes The Company has elected to be treated as a partnership for income tax purposes. Therefore, income and expenses of the Company are passed through to its members for tax reporting purposes. According to its operating agreement, Tesoro Hills, LLC, a joint venture in which the Company has an investment, has also elected to be treated as a partnership for income tax purposes. The Company and MP Securities are subject to a California LLC fee. The Company uses a recognition threshold and a measurement attribute for the consolidated financial statement recognition and measurement of a tax position taken in a tax return. Benefits from tax positions are recognized in the financial statements only when it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority that would have full knowledge of all relevant information. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold are recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold are derecognized in the first subsequent financial reporting period in which that threshold is no longer met. New accounting guidance In May 2014, the Financial Accounting Standards Board (“ FASB ”) issued Accounting Standards Update (“ ASU ”) 2014-09, “Revenue from Contracts with Customers”, which supersedes existing accounting standards for revenue recognition and creates a single framework. ASU 2014-09 and all subsequent amendments to the ASU (collectively "ASC 606") requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers and revises when it is appropriate to recognize a gain or loss from the transfer of nonfinancial assets such as other real estate owned. This standard also specifies the accounting for certain costs to obtain or fulfill a contract with a customer. The Company’s implementation efforts included a detailed review of revenue contracts within the scope of guidance and an evaluation of the impact on the Company’s revenue recognition policies. No transition-related practical expedients were applied. The majority of Company's revenues come from interest income, which is outside the scope of ASC 606. The Company's revenues that are within the scope of ASC 606 are presented as Non-Interest Income and are recognized as revenue when the Company satisfies its obligation to the customer. Revenues within the scope of ASC 606 include wealth advisory fees, investment brokerage fees, and other service and miscellaneous income. The Company adopted ASC 606 using the modified retrospective method applied to all contracts not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606 while prior period amounts continue to be reported in accordance with legacy GAAP . The adoption of ASC 606 did not result in a material change to the accounting for any of the in-scope revenue streams; as such, no cumulative effect adjustment was recorded. In November 2016, the FASB issued ASU No. 2016-18, "Statement of Cash Flows-Restricted Cash (Topic 230)." The amendments in this update clarify the inclusion of restricted cash in the cash and cash equivalents beginning-of-period and end-of period reconciliation on the statement of cash flows. The Company adopted this update in the first quarter of 2018. However, because this amendment primarily affects the presentation and classification of information, this ASU did not have a material impact on the Company's consolidated financial statements and results of operations. Accounting Standards Pending Adoption In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)," which supersedes previous leasing guidance in Topic 840. Under the new guidance, lessees are required to recognize lease right-of use assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The FASB has since issued additional related ASU amendments that are intended to clarify and improve certain aspects of the guidance and implementation of Topic 842 but do not change the core principles of the topic. The effective dates are the same as the effective date in Topic 842. In accordance with the guidance as amended, the Company may elect to apply the new standard at the adoption date (leases existing at, or entered into after January 1, 2019) and recognize a cumulative effect adjustment to retained earnings upon adoption, or use the modified retrospective transition approach which would require recording leases at the beginning of the earliest comparative period presented in the consolidated financial statements (January 1, 2017 for the Company), with certain practical expedients available. In 2019, the Company will implement this ASU and will apply the new lease standard on leases existing at January 1, 2019 rather than at the earliest comparative period allowable as noted above. Once this ASU has been fully implemented, the balance sheet will reflect both lease liabilities and right-of-use assets. In addition, the Company will recognize lease expense, which approximates the amount recorded under current GAAP, on a straight-line basis within the non-interest expense section of the income statement. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. ASU 2016-13 also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. ASU 2016-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The guidance requires companies to apply the requirements in the year of adoption through cumulative adjustment with some aspects of the update requiring a prospective transition approach. The Company preliminary evaluation indicates the provisions of ASU No. 2016-13 are expected to affect the Company’s consolidated financial statements, in particular the level of the reserve for credit losses. The Company is continuing to evaluate the extent of the potential impact. In August 2018, the FASB issued ASU No. 2018-13, “Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement.” The ASU removes, modifies, and adds certain disclosure requirements for fair value measurements. For example, public entities will no longer be required to disclose the valuation processes for Level 3 fair value measurements, but will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. ASU No. 2018-13 is effective for interim and annual reporting periods beginning after December 15, 2019. In addition, entities may early adopt the modified or eliminated disclosure requirements and delay adoption of the additional disclosure requirements until their effective date. The Company does not believe ASU No. 2018-13 will have a material impact on the consolidated financial statements, as the update only revises disclosure requirements. |
Pledge of Cash and Restricted C
Pledge of Cash and Restricted Cash | 12 Months Ended |
Dec. 31, 2018 | |
Pledge of Cash and Restricted Cash [Abstract] | |
Pledge of Cash and Restricted Cash | Note 2. Pledge of Cash and Restricted Cash Under the terms of its debt agreements, the Company has the ability to pledge cash as collateral for its borrowings. This cash is considered restricted cash. At December 31, 2018 and December 31, 2017 , the Company held no pledged cash. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the statement of financial position that sum to the total of the same such amounts shown in the statement of cash flows (dollars in thousands): December 31, 2018 2017 Cash and cash equivalents $ 9,877 $ 9,907 Restricted cash 51 58 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 9,928 $ 9,965 Amounts included in restricted cash represent those required to be set aside with the Central Registration Depository (" CRD ") account with FINRA, as well as funds the Company has deposited with RBC Dain as clearing deposits. The CRD funds may only be used for fees charged by FINRA to maintain the membership status of the Company or for fees related to registered and associated persons of the Company. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 3. Related Party Transactions Transactions with Equity Owners Transactions with Evangelical Christian Credit Union (“ECCU”) ECCU is the Company’s founder and largest equity owner and as such, the Company has several related party dealings. The following describes the nature and dollar amounts of the material related party transactions with ECCU. ECCU related parties who serve on the Company’s Board of Managers: ECCU Role MPIC Role Chairman of the Board Board of Managers Related party balances pertaining to the assets of the Company (in thousands): December 31, December 31, 2018 2017 Total funds held on deposit at ECCU $ 457 $ 1,065 Loan participations purchased from and serviced by ECCU 5,109 9,190 Related party transactions of the Company (dollars in thousands): Year ended December 31, 2018 2017 Interest earned on funds held with ECCU $ 34 $ 6 Interest income earned on loans purchased from ECCU 278 546 Fees paid to ECCU from MP Securities Networking Agreement 25 22 Income from Master Services Agreement with ECCU 54 54 Income from Successor Servicing Agreement with ECCU 9 9 Rent expense on lease agreement with ECCU 116 116 Loan participation interests purchased: Occasionally, the Company purchases loan participation interests from ECCU. The Company negotiates pass-through interest rates on loan participation interests purchased from ECCU on a loan by loan basis. The Company did not purchase loans from ECCU for the years ended December 31, 2018 and 2017 . Management believes these terms are equivalent to those that prevail in arm's length transactions. Lease and Services Agreement: The Company leases its corporate offices and purchases other facility-related services from ECCU pursuant to a written lease and services agreement. Management believes these terms are equivalent to those that prevail in arm's length transactions. MP Securities Networking Agreement with ECCU: MP Securities, the Company’s wholly-owned subsidiary, entered into a Networking Agreement with ECCU pursuant to which MP Securities has agreed to offer investment products and services to ECCU’s members that: (1) have been approved by ECCU or its Board of Directors, (2) comply with applicable investor suitability standards required by federal and state securities laws and regulations, (3) are offered in accordance with NCUA rules and regulations, and (4) are in compliance with its membership agreement with FINRA. The agreement entitles ECCU to be paid a percentage of total revenue received by MP Securities from transactions conducted for, or on behalf of, ECCU members. The Networking Agreement may be terminated by either ECCU or MP Securities without cause upon thirty days prior written notice. Master Services Agreement (the “Services Agreement”) with ECCU: The Company and ECCU have entered into the Services Agreement, pursuant to which the Company provides relationship management services to ECCU’s members and business development services to new leads in the southeast region of the United States. The agreement renews annually unless either parts provides at least thirty days written notice of non-renewal. In addition, either party may terminate the Services Agreement for any reason by providing thirty (30) days written notice. On March 1, 2018, the Company and ECCU amended the agreement to include referral fees to be paid by either party on the successful closing of a referred loan. Successor Servicing Agreement with ECCU: On October 5, 2016, the Company entered into a Successor Servicing Agreement with ECCU pursuant to which the Company has agreed to serve as the successor loan servicing agent for certain mortgage loans designated by ECCU in the event ECCU requests that the Company assume its obligation to act as the servicing agent for those loans. The term of the Agreement is for a period of three years. Transactions with America’s Christian Credit Union (“ACCU”) ACCU is one of the equity owners of the Company and has several related party agreements with the Company. The following describes the nature and dollar amounts of the material related party transactions with ACCU. Ownership transfer: On May 4, 2017, ACCU acquired 12,000 Class A Units and 12,000 Series A Preferred Units of the Company’s Class A Common Units and Series A Preferred Units, respectively, which represents 8.19% of the Company’s issued and outstanding Class A Units and 10.25% of the Company’s issued and outstanding Series A Preferred Units from Financial Partners Credit Union, a California state chartered credit union (“FPCU”). The Company’s Board of Managers approved ACCU’s purchase of the Class A and Series A Preferred Units from FPCU and consented to ACCU’s request to be admitted as a new member of the Company. ACCU’s purchase of the Class A Units and Series A Preferred Units was consummated pursuant to a privately negotiated transaction. On June 29, 2018, ACCU acquired 2,000 of the Company’s Series A Preferred Units, which represents 1.71% of the Company’s issued and outstanding Series A Preferred Units from The National Credit Union Administration Board as Liquidating Agent of Telesis Community Credit Union, a federally chartered credit union (“NCUAB”). The Company’s Board of Managers has approved ACCU’s purchase of the Membership Units from NCUAB and has consented to ACCU’s acquisition of additional membership interests of the Company. ACCU related parties who serve on the Company’s Board of Managers: ACCU Role MPIC Role President, Chief Executive Officer Board of Managers Related party balances pertaining to the assets of the Company (dollars in thousands): December 31, December 31, 2018 2017 Total funds held on deposit at ACCU $ 5,675 $ 6,103 Dollar outstanding loan participations sold to ACCU and serviced by the Company 3,184 2,696 Loan participations purchased from and serviced by ACCU 1,662 1,719 Related party transactions of the Company (dollars in thousands): Year ended December 31, 2018 2017 Dollar amount of loans sold to ACCU $ 554 $ 6,365 Interest earned on funds held with ACCU 69 26 Interest income earned on loans purchased from ACCU 86 89 Income from Master Services Agreement with ACCU 20 12 Fees paid based on MP Securities Networking Agreement with ACCU 56 190 Loan participation interests purchased: Occasionally, the Company sells or purchases loan participation interests from ACCU. The Company negotiates pass-through interest rates on loan participation interests purchased or sold from and to ACCU on a loan by loan basis. Management believes these terms are equivalent to those that prevail in arm's length transactions. From time to time, the Company may purchase a loan participation interest from a related party. The terms and conditions of such a purchase will be negotiated in good faith and in accordance with the Company’s related party procedures and governance practices. The approval of such a purchase must be approved by each party after full disclosure of the related party transaction and must include terms and conditions that would normally be included in arms length transaction conducted by independent parties. MP Securities networking agreement with ACCU: MP Securities has entered into a Networking Agreement with ACCU pursuant to which MP Securities has agreed to offer investment products and services to ACCU’s members that: (1) have been approved by ACCU or its Board of Directors, (2) comply with applicable investor suitability standards required by federal and state securities laws and regulations, (3) are offered in accordance with NCUA rules and regulations, and (4) are in compliance with its membership agreement with FINRA. The agreement entitles ACCU to be paid a percentage of total revenue received by MP Securities from transactions conducted for or on behalf of ACCU members. The Networking Agreement may be terminated by either ACCU or MP Securities without cause upon thirty days prior written notice. Transactions with Other Equity Owners The Company has a Loan Participation Agreement with UNIFY Financial Credit Union (“ UFCU ”), an owner of both the Company’s Class A Common Units and Series A Preferred Units. Under this agreement, the Company sold UFCU a $5.0 million loan participation interest in one of its mortgage loan interests on August 14, 2013. As part of this agreement, the Company retained the right to service the loan, and it charges UFCU a fee for servicing the loan. Management believes the terms of the agreement are equivalent to those that prevail in arm's length transactions. Transactions with Subsidiaries The Company has several agreements with its subsidiary, MP Securities. The income and expense related to these agreements are eliminated in the consolidated financials. MP Securities serves as the managing broker for the Company’s public and private placement notes. The Company receives compensation related to these services ranging from 0.25% to 5.50% over the life of a note depending on the length of the note and the offering under which the note was sold. In addition, the Company’s subsidiary, MPF, serves as the collateral agent for the Company’s Secured Notes. The terms of these agreements are described in the Company’s Prospectus for its Class 1A Notes and the private placement offerings that have been conducted by the Company. Additional details regarding the Company’s Notes are described in section “10. Notes Payable” of this Report. The Company also has entered into an Administrative Services Agreement with MP Securities in which it provides services such as the use of office space, use of equipment, including computers and phones, and payroll and personnel services. The agreement stipulates MP Securities will provide ministerial, compliance, marketing, operational, and investor relations-related services regarding the Company’s investor note program. As stated above, all intercompany transactions related to this agreement are eliminated in the consolidated financial statements. Related Party Transaction Policy To assist in evaluating any related transactions the Company may enter into with a related party, the Board has adopted a Related Party Transaction Policy. Under this policy, a majority of the members of the Company’s Board and majority of its independent Board members must approve a material transaction that it enters into with a related party. As a result, all transactions that the Company undertakes with an affiliate or a related party are on terms believed by its management to be no less favorable than are available from unaffiliated third parties, and these transactions are approved by a majority of its independent Board members. From time to time, the Company’s Board and members of its executive management team have purchased investor notes from the Company or have purchased investment products through MP Securities. Investor notes payable to related parties totaled $394 thousand and $250 thousand at December 31, 2018 and December 31, 2017 . |
Loans Receivable and Allowance
Loans Receivable and Allowance for Loan Losses | 12 Months Ended |
Dec. 31, 2018 | |
Loans Receivable and Allowance for Loan Losses [Abstract] | |
Loans Receivable and Allowance for Loan Losses | Note 4. Loans Receivable and Allowance for Loan Losses The Company’s loan portfolio is comprised of one segment – church loans. The loans fall into four classes, which include wholly-owned loans for which the Company possesses the first collateral position, wholly-owned loans that are either unsecured or for which the Company possesses a junior collateral position, participated loans purchased for which the Company possesses the first collateral position, and participated loans purchased for which the Company possesses a junior collateral position. See “Note 1 – Loan Portfolio Segments and Classes” to Part I “Financial Information” of this Report. All of our loans are made to various evangelical churches and related organizations, primarily to purchase, construct, or improve facilities. Loan maturities extend through 2029. The loan portfolio had a weighted average rate of 6.44% and 6.31% as of December 31, 2018 and December 31, 2017 , respectively. The table below is a summary of the Company’s mortgage loans owned (dollars in thousands): December 31, December 31, 2018 2017 Loans to evangelical churches and related organizations: Real estate secured $ 147,061 $ 151,214 Unsecured 274 1,500 Total loans 147,335 152,714 Deferred loan fees, net (848) (911) Loan discount (627) (871) Allowance for loan losses (2,480) (2,097) Loans, net $ 143,380 $ 148,835 Allowance for Loan Losses Management believes that the allowance for loan losses, as shown in the following table, as of December 31, 2018 and December 31, 2017 is appropriate. The following table shows the changes in the allowance for loan losses for the years ended December 31, 2018 and 2017 (dollars in thousands): December 31, 2018 December 31, 2017 Balance, beginning of period $ 2,097 $ 1,875 Provision for loan loss 666 262 Chargeoffs (283) (40) Balance, end of period $ 2,480 $ 2,097 Loans by portfolio segment (church loans) and the related allowance for loan losses are presented below. Loans and the allowance for loan losses are further segregated by impairment methodology (dollars in thousands). Loans and Allowance for Loan Losses (by segment) As of December 31, 2018 December 31, 2017 Loans: Individually evaluated for impairment $ 13,601 $ 9,255 Collectively evaluated for impairment 133,734 143,459 Balance $ 147,335 $ 152,714 Allowance for loan losses: Individually evaluated for impairment $ 1,463 $ 1,260 Collectively evaluated for impairment 1,017 837 Balance $ 2,480 $ 2,097 The Company has established a standard loan grading system to assist management and loan review personnel in their analysis and supervision of the loan portfolio. The following table is a summary of the loan portfolio credit quality indicators by loan class at December 31, 2018 and December 31, 2017 , which is the date on which the information was updated for each credit quality indicator (dollars in thousands): Credit Quality Indicators (by class) As of December 31, 2018 Wholly-Owned First Wholly-Owned Junior Participation First Participation Junior Total Grade: Pass $ 100,140 $ 4,067 $ 2,004 $ — $ 106,211 Watch 27,321 — 202 — 27,523 Special mention 1,208 — — — 1,208 Substandard 6,497 187 3,586 — 10,270 Doubtful 2,123 — — — 2,123 Loss — — — — — Total $ 137,289 $ 4,254 $ 5,792 $ — $ 147,335 Credit Quality Indicators (by class) As of December 31, 2017 Wholly-Owned First Wholly-Owned Junior Participation First Participation Junior Total Grade: Pass $ 115,422 $ 5,269 $ 9,474 $ — $ 130,165 Watch 13,082 — 212 — 13,294 Special mention 3,152 — — — 3,152 Substandard 5,907 196 — — 6,103 Doubtful — — — — — Loss — — — — — Total $ 137,563 $ 5,465 $ 9,686 $ — $ 152,714 The following table sets forth certain information with respect to the Company’s loan portfolio delinquencies by loan class and amount at December 31, 2018 and December 31, 2017 (dollars in thousands): Age Analysis of Past Due Loans (by class) As of December 31, 2018 30-59 Days Past Due 60-89 Days Past Due Greater Than 90 Days Total Past Due Current Total Loans Recorded Investment 90 Days or more and Accruing Church loans: Wholly-Owned First $ 3,259 $ — $ 5,804 $ 9,063 $ 128,226 $ 137,289 $ — Wholly-Owned Junior 187 — — 187 4,067 4,254 — Participation First 2,293 — 1,292 3,585 2,207 5,792 — Participation Junior — — — — — — — Total $ 5,739 $ — $ 7,096 $ 12,835 $ 134,500 $ 147,335 $ — Age Analysis of Past Due Loans (by class) As of December 31, 2017 30-59 Days Past Due 60-89 Days Past Due Greater Than 90 Days Total Past Due Current Total Loans Recorded Investment 90 Days or more and Accruing Church loans: Wholly-Owned First $ — $ 3,521 $ 1,587 $ 5,108 $ 132,455 $ 137,563 $ — Wholly-Owned Junior — 196 — 196 5,269 5,465 — Participation First — — — — 9,686 9,686 — Participation Junior — — — — — — — Total $ — $ 3,717 $ 1,587 $ 5,304 $ 147,410 $ 152,714 $ — Impaired Loans Impaired loans include non-accrual loans, loans 90 days or more past due and still accruing, and restructured loans. Non-accrual loans represent loans on which interest accruals have been discontinued. Restructured loans are loans in which the borrower has been granted a concession on the interest rate or the original repayment terms due to financial distress. Impaired loans are closely monitored on an ongoing basis as part of management’s loan review and work-out process. The potential risk of loss on these loans is evaluated by comparing the loan balance to the fair value of any underlying collateral or the present value of projected future cash flows. The following tables are summaries of impaired loans by loan class as of and for the years ended December 31, 2018 and 2017 , respectively. The unpaid principal balance reflects the contractual principal outstanding on the loan. The recorded balance reflects the unpaid principal balance less any interest payments that have been recorded against principal. The recorded investment reflects the recorded balance less discounts taken. The related allowance reflects specific reserves taken on the impaired loans (dollars in thousands): Impaired Loans (by class) As of December 31, 2018 Unpaid Principal Balance Recorded Balance Recorded Investment Related Allowance Average Recorded Investment Interest Income Recognized With no allowance recorded: Church loans: Wholly-Owned First $ 5,734 $ 5,687 $ 5,694 $ — $ 5,915 $ 123 Wholly-Owned Junior — — — — — — Participation First 2,293 2,293 2,316 — 2,312 — Participation Junior — — — — — — With an allowance recorded: Church loans: Wholly-Owned First 4,818 4,142 3,632 1,165 3,714 — Wholly-Owned Junior 215 187 176 176 181 — Participation First 1,302 1,292 1,292 122 1,299 10 Participation Junior — — — — — — Total: Church loans $ 14,362 $ 13,601 $ 13,110 $ 1,463 $ 13,421 $ 133 Impaired Loans (by class) As of December 31, 2017 Unpaid Principal Balance Recorded Balance Recorded Investment Related Allowance Average Recorded Investment Interest Income Recognized With no allowance recorded: Church loans: Wholly-Owned First $ 6,395 $ 5,060 $ 4,634 $ — $ 4,703 $ — Wholly-Owned Junior 216 196 185 — 200 — Participation First — — — — — — Participation Junior — — — — — — With an allowance recorded: Church loans: Wholly-Owned First 5,271 3,999 3,680 1,260 4,163 — Wholly-Owned Junior — — — — — — Participation First — — — — — — Participation Junior — — — — — — Total: Church loans $ 11,882 $ 9,255 $ 8,499 $ 1,260 $ 9,066 $ — A summary of nonaccrual loans by loan class at December 31, 2018 and December 31, 2017 is as follows (dollars in thousands): Loans on Nonaccrual Status (by class) December 31, 2018 December 31, 2017 Church loans: Wholly-Owned First $ 8,619 $ 8,167 Wholly-Owned Junior 187 196 Participation First 1,292 — Participation Junior — — Total $ 10,098 $ 8,363 The Company restructured four loans during the year ended December 31, 2018. The Company restructured no loans during the year ended December 31, 2017 . A summary of troubled debt restructures by loan class during the year ended December 31, 2018 is as follows (dollars in thousands): Troubled Debt Restructurings (by class) For the year ended December 31, 2018 Number of Loans Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Recorded Investment At Period End Church loans: Wholly-Owned First 2 $ 1,748 $ 1,668 $ 1,668 Wholly-Owned Junior — — — — Participation First 2 3,595 3,595 3,586 Participation Junior — — — — Total 4 $ 5,343 $ 5,264 $ 5,254 The Company had five previously restructured loans that were past maturity as of December 31, 2018 . For four of these loans, the Company has entered into forbearance agreements with the borrowers and is evaluating what actions it should undertake to restructure these mortgage loans and protect its investment . For the remaining one of these loans, the Company has extended the maturity date of the loan as part of the formal restructure agreement that was completed in January 2019. Loans modified in a troubled debt restructuring are closely monitored for delinquency as an early indicator for future default. If loans modified in a troubled debt restructuring subsequently default, management evaluates such loans fo r potential further impairment. As a result of this evaluation, specific reserves may be increased or adjustments may be made in the allocation of reserves . No loans that were restructured during the year ended December 31, 2018 subsequently defaulted during 2018. As of December 31, 2018, no additional funds were committed to be advanced in connection with loans modified as troubled debt restructurings . |
Investments in Joint Venture
Investments in Joint Venture | 12 Months Ended |
Dec. 31, 2018 | |
Investments in Joint Venture [Abstract] | |
Investments in Joint Venture | Note 5. Investments in Joint Venture In December 2015, the Company finalized an agreement with Intertex Property Management, Inc., a California corporation, to enter into a joint venture to form Tesoro Hills, LLC (the “ Valencia Hills Project ”), a company that will develop and market property formerly classified by the Company as a foreclosed asset. In January 2016, the Company transferred ownership in the foreclosed asset to the Valencia Hills Project as part of the agreement and reclassified the carrying value of the property from foreclosed assets to investments in joint venture. The Company’s initial investment in the joint venture was $900 thousand, which was equal to its carrying value in the foreclosed asset at December 31, 2015. The joint venture incurred $11 thousand in losses during the year ended December 31, 2018 and incurred $4 thousand in gains for the years ended December 31, 2017 . The value of the Company’s investment in the property was $887 thousand and $896 thousand, as of December 31, 2018 and 2017, respectively. Management has conducted an evaluation of the investment as of December 31, 2018 and has determined that the investment is not impaired. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2018 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | Note 6. Revenue Recognition Pursuant to the adoption of ASU 2014-09, Revenue from Contracts with Customers (Topic 606), the following disclosures discuss the Company's revenue recognition accounting policies. The Company recognizes two primary types of revenue: interest income and non-interest income. Interest Income The Company’s principal source of revenue is interest income from loans, which is not within the scope of Topic 606. In addition, certain non-interest income streams, such as fees associated with loan servicing, are also not in the scope of Topic 606. Non-interest Income Non-interest income includes revenue from various types of transactions and services provided to customers. The following tables reflect the Company’s non-interest income disaggregated by financial statement line item. Items outside of scope of ASC 606 are noted as such. The commentary following the tables describes the nature, amount, and timing of the related revenue streams (dollars in thousands): December 31, 2018 2017 Non-interest income Wealth advisory fees $ 231 $ 170 Investment brokerage fees 292 684 Lending fees (1) 838 254 Other non-interest income 83 75 Total non-interest income $ 1,444 $ 1,183 (1) Not within scope of ASC 606 The following is a description of principal activities from which the Company generates non-interest income revenue. Revenues are recognized as the Company satisfies its obligations with our clients, service partners, and borrowers in an amount that reflects the consideration that we expect to receive in exchange for those services. Wealth advisory fees Wealth advisory fees are generally recognized over time as services are rendered and are based on either a percentage of the market value of the assets under management, or fixed based on the services provided to the client. The Company’s execution of these services represents its related performance obligations. Fees are calculated quarterly and are usually collected at the beginning of the period from the client’s account and recognized ratably over the related billing period as the performance obligation is fulfilled. Any commissions or referral fees paid related to this revenue are also recognized ratably over the related billing period as the performance obligation is fulfilled. Investment brokerage fees Investment brokerage fees arise from selling and distribution services and trade execution services. The Company’s execution of these services fulfills its related performance obligations. The Company also offers selling and distribution services, and earns commissions through the sale of annuity and mutual fund products. The Company acts as an agent in these transactions and recognizes revenue at a point in time when the customer executes a contract with a product carrier. The Company may also receive trailing commissions and 12b-1 fees related to mutual fund and annuity products, and recognizes this revenue in the period that they are realized since the revenue cannot be accurately predicted at the time the policy becomes effective. Trade execution commissions are earned and recognized on the trade date, which is when the performance obligation is fulfilled. Payment for the trade execution is due on the settlement date. Other non-interest income Other non-interest income includes fees earned based on service contracts the Company has entered into with credit unions. Revenue is recognized monthly based on the terms of the contracts, which require monthly payments for the services we perform. |
Loan Sales
Loan Sales | 12 Months Ended |
Dec. 31, 2018 | |
Loan Sales [Abstract] | |
Loan Sales | Note 7. Loan Sales The Company sold a note during the year ended December 31, 2018. The following table shows the amount of loan participation sales and the resulting changes in servicing assets recorded during the years ended December 31, 2018 and 2017 . Servicing assets are amortized using the interest method as an adjustment to servicing fee income. A summary of loan participation sales and servicing assets are as follows (dollars in thousands) : December 31, December 31, 2018 2017 Participation loans sold by the Company $ 4,254 $ 9,700 Servicing Assets Balance, beginning of period $ 270 $ 258 Additions: Servicing obligations from sale of loan participations 21 203 Subtractions: Amortization (79) (191) Balance, end of period $ 212 $ 270 |
Premises and Equipment
Premises and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Premises and Equipment [Abstract] | |
Premises and Equipment | Note 8. Premises and Equipment The table below summarizes our premises and equipment (dollars in thousands): As of December 31, December 31, 2018 2017 Furniture and office equipment $ 491 $ 486 Computer system 231 222 Leasehold improvements 25 25 Total premises and equipment 747 733 Less accumulated depreciation and amortization (660) (630) Premises and equipment, net $ 87 $ 103 (dollars in thousands) 2018 2017 Depreciation and amortization expense for the years ended December 31, $ 30 $ 30 |
NCUA Credit Facilities
NCUA Credit Facilities | 12 Months Ended |
Dec. 31, 2018 | |
Notes Payable and NCUA Credit Facilities [Abstract] | |
NCUA Credit Facilities | Note 9. NCUA Credit Facilities The Company has two credit facilities with the NCUA, the “WesCorp Credit Facility Extension”, and the “MU Credit Facility”. The NCUA credit facilities may be collateralized by qualifying mortgage loans or cash. As of December 31, 2018, all collateral pledged is qualifying mortgage loans. The facilities are non-revolving, do not have an option to renew or extend additional credit, and do not contain a prepayment penalty. These credit facilities include a number of borrower covenants, which as of December 31, 2018 and December 31, 2017 , respectively, the Company was in compliance. The following table summarizes the terms of each facility as of December 31, 2018 (dollars in millions): Maturity Date Amount Outstanding Amount of Loan Collateral Pledged Interest Rate Interest Calculation MU Credit Facility 11/1/2026 $59.49 $70.73 Fixed at 2.525% Accrued interest is due and payable monthly in arrears on the first day of each month WesCorp Credit Facility Extension 11/1/2026 $17.02 $21.78 Fixed at 2.525% Accrued interest is due and payable monthly in arrears on the first day of each month Future principal contractual payments of the Company’s borrowings from financial institutions during the twelve month periods ending December 31 are as follows (dollars in thousands): 2019 $ 5,041 2020 5,203 2021 5,341 2022 5,477 2023 5,617 Thereafter 49,836 $ 76,515 |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2018 | |
Notes Payable and NCUA Credit Facilities [Abstract] | |
Notes Payable | Note 10. Notes Payable The table below provides information on the Company notes payable as of the years ended December 31, 2018 and 2017 ( dollars in thousands): As of As of December 31, 2018 December 31, 2017 SEC Registered Public Offerings Offering Type Amount Weighted Average Interest Rate Amount Weighted Average Interest Rate Class A Offering Unsecured $ 8,758 4.28 % $ 12,255 4.00 % Class 1 Offering Unsecured 29,114 3.98 % 39,704 3.70 % Class 1A Offering Unsecured 13,817 3.84 % — — % Public Offering Total $ 51,689 3.99 % $ 51,959 3.77 % Private Offerings Special Offering Unsecured — 3.93 % 473 3.94 % Special Subordinated Notes Unsecured 7,533 4.93 % 6,835 4.66 % Secured Notes Secured 9,170 3.86 % 9,821 3.77 % Private Offering Total $ 16,703 4.35 % $ 17,129 4.13 % Total Notes Payable $ 68,392 4.08 % $ 69,088 3.86 % Notes Payable Totals by Security Unsecured Total Unsecured $ 59,222 4.11 % $ 59,267 3.87 % Secured Total Secured $ 9,170 3.86 % $ 9,821 3.77 % Future maturities for the Compan y’s investor notes during the twelve month periods ending December 31, are as follows (dollars in thousands): 2019 $ 21,467 2020 16,332 2021 16,507 2022 4,338 2023 9,748 $ 68,392 Debt issuance costs related to the Company’s notes payable were $92 thousand and $85 thousand at December 31, 2018 and December 31, 2017 , respectively The notes are payable to investors who have purchased the securities, including individuals, churches, and Christian ministries, many of whom are members of ECCU or ACCU. Notes pay interest at stated spreads over an index rate. Interest can be reinvested or paid at the investor's option. The Company may repurchase all or a portion of notes at any time at its sole discretion, and may allow investors to redeem their notes prior to maturity at its sole discretion. SEC Registered Public Offerings Class A Offering. In April 2008, the Company registered with the SEC its Class A Notes. The Class A Note Offering expired on December 31, 2015 and the Company discontinued the sale of its Class A Notes. The offering included three categories of notes, including a fixed interest note, a variable interest note, and a flex note that allows borrowers to increase their interest rate once a year with certain limitations. The Class A Notes contained restrictive covenants pertaining to paying dividends, making redemptions, acquiring, purchasing or making certain payments, requiring the maintenance of minimum tangible net worth, limitations on the issuance of additional notes, and incurring of indebtedness. The Company was in compliance with these covenants as of December 31, 2018 and December 31, 2017 . The Class A Notes were issued under a Trust Indenture between the Company and U.S. Bank National Association (“ US Bank ”). Class 1 Offering. In January 2015, the Company registered with the SEC its Class 1 Notes. The Class 1 Note Offering expired on December 31, 2017 and the Company discontinued the sale of its Class 1 Notes at that time. The offering included two categories of notes, including a fixed interest note and a variable interest note. The Class 1 Notes contain restrictive covenants pertaining to paying dividends, making redemptions, acquiring, purchasing or making certain payments, requiring the maintenance of minimum tangible net worth, limitations on the issuance of additional notes, and incurring of indebtedness. The Company was in compliance with these covenants as of December 31, 2018 and December 31, 2017 . The Class 1 Notes were issued under a Trust Indenture between the Company and U.S. Bank. Class 1A Offering . In February 2018, the Company launched its Class 1A Notes Offering. Pursuant to a Registration Statement declared effective on February 27, 2018, the Company registered $90 million of its Class 1A Notes in two series – fixed and variable notes. The Class 1A Notes are unsecured. The interest rate paid on the Fixed Series Notes is determined in reference to a Constant Maturity Treasury Index published by the U.S. Department of Treasury (“ CMT Index ”) in effect on the date that the note is issued plus a rate spread as described in the Company’s Class 1A Prospectus. The interest rate paid on a Variable Series Note is determined by reference to the variable index in effect on the date the interest rate is set. The CMT Index is determined by the Constant Maturity Treasury rates published by the U.S. Department of Treasury for actively traded Treasury securities. The variable index is equal to the 3-month LIBOR rate. The Class 1A Notes are issued under a Trust Indenture entered into between the Company and U.S. Bank. Private Offerings Secured Investment Certificates (“Secured Notes”). In January 2015, the Company began offering Secured Notes under a new private placement memorandum pursuant to the requirements of Rule 506 of Regulation D. Under this offering, the Company may sell up to $80.0 million in Secured Notes to qualified investors. The Notes require as collateral either cash pledged in the amount of 100% of the outstanding balance of the N otes, or loans receivable pledged in the amount of 105% of the outstanding balance of the Notes. At December 31, 2018 and December 31, 2017 , the collateral securing the Secured Notes had an outstanding balance of $9.67 million and $10.9 million, respectively . The December 31, 2018 and December 31, 2017 collateral balance was sufficient to satisfy the minimum collateral requirement of the Secured Notes offering. As of December 31, 2018 and December 31, 2017 , no cash was pledged in regards to the Secured Notes. The Company’s 2015 Secured Note offering terminated on December 31, 2017. Effective as of April 30, 2018, the Company launched a new $80 million secured note offering. The 2018 Secured Note offering was issued pursuant to a Loan and Security Agreement and it will include the same terms and conditions previously set forth in its 2015 Secured Note offering. Series 1 Subordinated Capital Notes (“Subordinated Notes”) . In June 2018, the Company amended the offer and sale of its Subordinated Notes initially launched in February 2013, pursuant to a limited private offering to qualified investors that meets the requirements of Rule 506 of Regulation D. The Subordinated Notes have been offered with maturity terms from 12 to 60 months at an interest rate fixed on the date of issuance, as determined by the then current seven -day average rate reported by the U.S. Federal Reserve Board for interest rate swaps. Under the Subordinated Notes offering, the Company is subject to certain covenants, including limitations on restricted payments, limitations on the amount of notes that can be sold, restrictions on mergers and acquisitions, and proper maintenance of books and records. The Company was in compliance with these covenants at December 31, 2018 and December 31, 2017 . Special Offering Notes. Special Offering Notes are unsecured general obligation notes having various terms. The Company has issued these Notes over the past several years to ministries, ministry-related organizations, and individuals. Except for a small number of investors (in total not exceeding 35 individuals), the holders of these Notes are accredited investors within the meaning of Regulation D under the 1933 Securities Act. The Company may continue to sell these debt securities to eligible investors on an individual, negotiated basis, as it deems appropriate and provided the sale is in compliance with exemptions from registration or qualifications under federal and applicable state securities laws. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 11. Commitments and Contingencies Unfunded Commitments The Company is a party to credit-related financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include un-advanced lines of credit and standby letters of credit. Such commitments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the balance sheet. The Company’s exposure to credit loss is represented by the contractual amount of these commitments. The Company uses the same credit policies in making commitments as it does for on-balance-sheet instruments. The table below shows the outstanding financial instruments whose contract amounts represent credit risk (dollars in thousands) : Contract Amount at: December 31, 2018 December 31, 2017 Undisbursed loans $ 1,919 $ 1,199 Standby letter of credit $ — $ 384 Undisbursed loans are commitments for possible future extensions of credit to existing customers. These loans are sometimes unsecured and may not necessarily be drawn upon to the total extent to which the Company is committed. Commitments to extend credit are generally at variable rates. Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. Contingencies In the normal course of business, the Company may become involved in various legal proceedings. As of December 31, 2018, the Company is a defendant in a wrongful termination of employment lawsuit. The Company is contesting the claim and at December 31, 2018, the Company’s liabilities include an accrual of $30 thousand for litigation-related expenses incurred in connection with this claim. Although the Company believes that it will prevail on the merits, the litigation could have a lengthy process, and the ultimate outcome cannot be predicted. Operating Lease Commitments The Company has lease commitments covering its offices in Brea and Fresno, California. Future minimum rental payments for the years ending December 31 are as follows (dollars in thousands): 2019 $ 164 2020 149 2021 146 2022 150 2023 155 Total $ 764 Total rent expense, including common area costs, was $ 143 thousand, and $ 142 thousand for the years ended December 31, 2018 and 2017, respectively. The Brea office lease was renewed in January 2019 for an additional five year term. The lease does not contain any additional options to renew. The Fresno office lease is scheduled to expire in 2020 . There are no options to renew in the lease agreement. |
Office Operations and Other Exp
Office Operations and Other Expenses | 12 Months Ended |
Dec. 31, 2018 | |
Office Operations and Other Expenses [Abstract] | |
Office Operations and Other Expenses | Note 12. Office Operations and Other Expenses Office operations and other expenses comprise the following (dollars in thousands): December 31, 2018 December 31, 2017 Lending expenses $ 71 $ 53 Technology expenses 401 354 Depreciation 30 30 Insurance 275 278 Travel expenses 41 64 Human resources 34 48 Communication 36 35 Referral fees 81 214 Correspondent fees 60 60 Other 195 151 Total $ 1,224 $ 1,287 |
Preferred and Common Units Unde
Preferred and Common Units Under LLC Structure | 12 Months Ended |
Dec. 31, 2018 | |
Preferred and Common Units Under LLC Structure [Abstract] | |
Preferred And Common Units Under LLC Structure | Note 13. Preferred and Common Units Under LLC Structure Holders of the Series A Preferred Units are entitled to receive a quarterly cash dividend that is 25 basis points higher than the one -year LIBOR rate in effect on the last day of the calendar month for which the preferred return is approved. The Company has also agreed to set aside an annual amount equal to 10% of its net profits earned for any year, after subtracting from profits the quarterly Series A Preferred Unit dividends paid, for distribution to its Series A Preferred Unit holders. The Series A Preferred Units have a liquidation preference of $100 per unit, have no voting rights, and are subject to redemption in whole or in part at the Company’s election on December 31 of any year for an amount equal to the liquidation preference of each unit, plus any accrued and declared but unpaid quarterly dividends and preferred distributions on such units. The Series A Preferred Units have priority as to earnings and distributions over the Common Units. The resale of the Company’s Series A Preferred Units and Common Units are subject to the Company’s first right of refusal to purchase units proposed to be transferred. Upon the Company’s failure to pay quarterly dividends for four consecutive quarters, the holders of the Series A Preferred Units have the right to appoint two managers to its Board of Managers. The Class A Common Units have voting rights, but have no liquidation preference or rights to dividends, unless declared. |
Retirement Plans
Retirement Plans | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Plans [Abstract] | |
Retirement Plans | Note 14. Retirement Plans 401(k) All of the Company’s employees are eligible to participate in the Automated Data Processing, Inc. (“ ADP ”) 401(k) plan effective as of the date their employment commences. No minimum service is required and the minimum age is 21 . Each employee may elect voluntary contributions not to exceed 86% of salary, subject to certain limits based on U.S. tax law. The plan has a matching program, which qualifies as a Safe Harbor 401(k) plan. As a Safe Harbor Section 401(k) plan, the Company matches each eligible employee’s contribution, dollar for dollar, up to 3% of the employee’s compensation, and 50% of the employee’s contribution that exceeds 3% of their compensation, up to a maximum contribution of 5% of the employee’s compensation. Company matching contributions for the years ended December 31, 2018 and 2017 were $76 thousand and $77 thousand, respectively. Profit Sharing The profit sharing plan is for all employees who, at the end of the calendar year, are at least 21 years old, still employed, and have at least 900 hours of service during the plan year. The amount annually contributed on behalf of each qualified employee is determined by the Company’s Board of Managers and is calculated as a percentage of the eligible employee's annual earnings. Plan forfeitures are used to reduce the Company’s annual contribution. The Company made no profit sharing contributions to the plan during the year ended December 31, 2018 and 2017 . |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | Note 15. Fair Value Measurements Fair Value Measurements Using Fair Value Hierarchy Measurements of fair value are classified within a hierarchy based upon inputs that give the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows: · Level 1 inputs are quoted prices (unadjusted) for identical assets or liabilities in active markets. · Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical assets and liabilities in inactive markets, inputs that are observable for the asset or liability (such as interest rates, prepayment speeds, credit risks, etc.), or inputs that are derived principally from or corroborated by observable market data by correlation or by other means. · Level 3 inputs are unobservable and reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. Fair Value of Financial Instruments The following tables show the carrying amounts and estimated fair values of the Company’s financial instruments (dollars in thousands): Fair Value Measurements at December 31, 2018 using Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value FINANCIAL ASSETS: Cash $ 9,877 $ 9,877 $ — $ — $ 9,877 Loans, net 143,380 — — 140,989 140,989 Investments in joint venture 887 — — 887 887 Accrued interest receivable 711 — — 711 711 FINANCIAL LIABILITIES: NCUA borrowings $ 76,515 $ — $ — $ 57,386 $ 57,386 Notes payable 68,300 — — 68,865 68,865 Other financial liabilities 356 — — 356 356 Fair Value Measurements at December 31, 2017 using Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value FINANCIAL ASSETS: Cash $ 9,907 $ 9,907 $ — $ — $ 9,907 Loans, net 148,835 — — 146,732 146,732 Investments in joint venture 896 — — 896 896 Accrued interest receivable 742 — — 742 742 FINANCIAL LIABILITIES: NCUA borrowings $ 81,492 $ — $ — $ 76,945 $ 76,945 Notes payable 69,003 — — 69,264 69,264 Other financial liabilities 346 — — 346 346 Management uses judgment in estimating the fair value of the Company’s financial instruments; however, there are inherent weaknesses in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented herein are not necessarily indicative of the amounts the Company could have realized in a sales transaction at December 31, 2018 and December 31, 2017 . The following methods and assumptions were used to estimate the fair value of financial instruments: Cash – The carrying amounts reported in the balance sheets approximate fair value for cash. Loans – Fair value is estimated by discounting the future cash flows using the current average rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Investments – Fair value is estimated by analyzing the operations and marketability of the underlying investment to determine if the investment is other-than-temporarily impaired. Notes Payable – The fair value of fixed maturity notes is estimated by discounting the future cash flows using the rates currently offered for notes payable of similar remaining maturities. The discount rate is estimated by Company management by using market rates that reflect the interest rate risk inherent in the notes. NCUA Borrowings – The fair value of borrowings from financial institutions are estimated using discounted cash flow analyses based on current incremental borrowing rates for similar types of borrowing arrangements. The discount rate is estimated by Company management using market rates that reflect the interest rate risk inherent in the notes. Off-Balance Sheet Instruments – The fair value of loan commitments is based on fees currently charged to enter into similar agreements, taking into account the remaining term of the agreements and the counterparties' credit standing. The fair value of loan commitments is insignificant at December 31, 2018 and December 31, 2017 . Fair Value Measured on a Nonrecurring Basis Certain assets are measured at fair value on a nonrecurring basis; that is, the assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). The following table presents such assets carried on the balance sheet by caption and by level within the valuation hierarchy (dollars in thousands): Fair Value Measurements Using: Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets at December 31, 2018: Collateral-dependent loans ( net of allowance and discount) $ — $ — $ 11,616 $ 11,616 Investments in joint venture — — 887 887 Total $ — $ — $ 12,503 $ 12,503 Assets at December 31, 2017: Collateral-dependent loans ( net of allowance and discount) $ — $ — $ 6,135 $ 6,135 Investments in joint venture — — 896 896 Total $ — $ — $ 7,031 $ 7,031 Activity in Level 3 assets is as follows for the year ended years ended December 31, 2018 and 2017 (dollars in thousands): Impaired loans (net of allowance and discount) Balance, December 31, 2017 $ 6,135 Changes in allowance and discount (306) Loans that became impaired 7,620 Loan payments, payoffs, sales, and charge-offs (1,833) Balance, December 31, 2018 $ 11,616 Investments in joint venture (net of allowance and discount) Balance, December 31, 2017 $ 896 Pro rata share of joint venture losses (9) Balance, December 31, 2018 $ 887 Impaired loans (net of allowance and discount) Balance, December 31, 2016 $ 4,736 Re-classifications of assets from Level 3 into Level 2 1,253 Changes in allowance and discount (500) Loans that became impaired 1,495 Loan payments and payoffs (849) Balance, December 31, 2017 $ 6,135 Investments in joint venture (net of allowance and discount) Balance, December 31, 2016 $ 892 Pro rata share of joint venture income 4 Balance, December 31, 2017 $ 896 Impaired Loans Collateral-dependent impaired loans are carried at the fair value of the collateral less estimated costs to sell, incorporating assumptions that experienced parties might use in estimating the value of such collateral. The fair value of collateral is determined based on appraisals. In some cases, the Company has adjusted the appraised values for various factors including age of the appraisal, age of comparable properties included in the appraisal, and known changes in the market and in the collateral. When the Company has made significant adjustments based on unobservable inputs, management categorizes the resulting fair value measurement as a Level 3 measurement. Otherwise, collateral-dependent impaired loans are categorized under Level 2. The table below summarized the valuation methodologies used to measure the fair value adjustments for Level 3 assets recorded at fair value on a nonrecurring basis (dollars in thousands): December 31, 2018 Assets Fair Value (in thousands) Valuation Techniques Unobservable Input Range (Weighted Average) Impaired Loans $ 11,616 Discounted appraised value Selling cost / Estimated market decrease 15% - 72% ( 33% ) Investments in joint venture $ 887 Internal evaluations Estimated future market value 0% ( 0% ) December 31, 2017 Assets Fair Value (in thousands) Valuation Techniques Unobservable Input Range (Weighted Average) Impaired Loans $ 6,135 Discounted appraised value Selling cost / Estimated market decrease 25% - 58% ( 38% ) Investment in joint venture $ 896 Internal evaluations Estimated future market value 0% ( 0% ) |
Income Taxes and State LLC Fees
Income Taxes and State LLC Fees | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes and State LLC Fees [Abstract] | |
Income Taxes and State LLC Fees | Note 16. Income Taxes and State LLC Fees MPIC is subject to a California gross receipts LLC fee of approximately $12,000 per year. MP Securities is subject to a California gross receipts LLC fee of approximately $6,000 and the state minimum franchise tax of $800 per year . MP Realty incurred a tax loss for the years ended December 31, 2018 and 2017, and recorded a provision of $800 per year for the state minimum franchise tax. For the years ended December 31, 2018 and 2017, MP Realty has federal and state net operating loss carryforwards of approximately $430 thousand and $407 thousand, respectively, which begin to expire in 2030 . Management assessed the realizability of the deferred tax asset and determined that a 100% valuation against the deferred tax asset was appropriate at December 31, 2018 and 2017. Tax years ended December 31, 2015 through December 31, 2018 remain subject to examination by the Internal Revenue Service and the tax years ended December 31, 2014 through December 31, 2018 remain subject to examination by the California Franchise Tax Board. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2018 | |
Segment Information [Abstract] | |
Segment Information | Note 17. Segment Information The Company's reportable segments are strategic business units that offer different products and services. The Company manages the segments separately because each business requires different management, personnel proficiencies, and marketing strategies. Reflecting the manner in which the C ompany manages its businesses, including resource allocation and performance assessment, the C ompany has two reportable segments that represent the primary businesses reported in the consolidated financial statements: finance company (the parent company) and broker-dealer (MP Securities). The finance company segment uses funds from the sale of debt securities, operations, and loan participations to originate or purchase mortgage loans. The finance company also services loans. The broker-dealer segment generates fee income by selling debt securities and other investment products, as well as providing investment advisory services. The accounting policies applied to determine the segment information are the same as those described in the summary of significant accounting policies. Management accounts for intersegment revenues and expenses at amounts that assume the Company made the transactions to unrelated third parties at the current market prices at the time of the transactions. Management evaluates the performance of each segment based on net income or loss before provision for income taxes and LLC fees. Financial information with respect to the reportable segments for the year ended December 31, 2018 is as follows (dollars in thousands): Finance Company Broker Dealer Other Segments Adjustments / Eliminations Total Total revenue $ 10,126 $ 1,189 $ — $ (663) $ 10,652 Total non interest expense and provision for tax 3,655 995 23 — 4,673 Net profit (loss) 157 194 (23) 149 477 Total assets 154,072 1,307 55 5 155,439 Financial information with respect to the reportable segments for the year ended December 31, 2017 is as follows (dollars in thousands): Finance Company Broker Dealer Other Segments Adjustments / Eliminations Total Total revenue $ 9,799 $ 1,756 $ — $ (900) $ 10,655 Total non interest expense and provision for tax 3,761 1,088 19 — 4,868 Net profit (loss) 286 668 (19) 2 937 Total assets 159,791 1,207 55 (31) 161,022 |
Condensed Financial Statements
Condensed Financial Statements of Parent Company | 12 Months Ended |
Dec. 31, 2018 | |
Condensed Financial Statements of Parent Company [Abstract] | |
Condensed Financial Statements of Parent Company | Note 18. Condensed Financial Statements of Parent Company Financial information pertaining only to the parent company, Ministry Partners Investment Company, LLC, is as follows (dollars in thousands) : As of December 31, 2018 2017 Assets: Cash $ 8,612 $ 8,783 Loans receivable, net of allowance for loan losses 143,380 148,835 Accrued interest receivable 711 742 Investments in joint venture 887 896 Property and equipment, net 85 99 Investment in subsidiaries 796 625 Due from subsidiaries 488 573 Servicing assets 212 270 Other assets 209 191 Total assets $ 155,380 $ 161,014 Liabilities and members’ equity Liabilities: NCUA credit facilities $ 76,515 $ 81,492 Notes payable, net of debt issuance costs 68,300 69,003 Accrued interest payable 249 208 Other liabilities 785 882 Total liabilities 145,849 151,585 Equity 9,531 9,429 Total liabilities and members' equity $ 155,380 $ 161,014 For the years ended December 31, 2018 2017 Income: Interest Income $ 9,207 $ 9,471 Other income 920 327 Total income 10,127 9,798 Interest expense: NCUA Credit Facilities 2,000 2,123 Notes payable 3,649 2,465 Total interest expense 5,649 4,588 Provision for loan losses 666 262 Other operating expenses 3,647 4,645 Income before provision for income taxes 165 303 Provision for income taxes and state LLC fees 8 15 Income before equity in undistributed net income of subsidiaries 157 288 Equity in undistributed net income of subsidiaries 320 649 Net income $ 477 $ 937 For the years ended December 31, 2018 2017 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 477 $ 937 Adjustments to reconcile net income to net cash used by operating activities: Equity in undistributed net income of subsidiaries (320) (649) Depreciation 27 26 Amortization of deferred loan fees (258) (438) Amortization of debt issuance costs 85 114 Provision for loan losses 666 262 Accretion of loan discount (24) (44) Gain on sale of loans (13) (136) Changes in: Accrued interest receivable 31 (85) Other assets 179 80 Accrued interest payable 41 35 Other liabilities 97 (57) Net cash provided by operating activities 988 45 CASH FLOWS FROM INVESTING ACTIVITIES: Loan purchases (2,721) — Loan originations (15,486) (29,917) Loan sales 5,414 9,735 Loan principal collections 17,817 15,784 Purchase of property and equipment (13) (18) Net cash provided (used) by investing activities 5,011 (4,416) CASH FLOWS FROM FINANCING ACTIVITIES: Change in NCUA borrowings (4,977) (4,834) Net change in notes payable (696) 8,532 Debt issuance costs (92) (121) Dividends paid on preferred units (405) (306) Net cash (used) provided by financing activities (6,170) 3,271 Net (decrease) in cash and restricted cash (171) (1,100) Cash, cash equivalents, and restricted cash at beginning of period 8,783 9,883 Cash, cash equivalents, and restricted cash at end of period $ 8,612 $ 8,783 Supplemental disclosures of cash flow information Interest paid $ 4,795 $ 4,553 Income taxes paid $ 23 $ 14 Dividends declared to preferred unit holders $ 107 $ 138 |
Nature of Business and Summar_2
Nature of Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Nature of Business and Summary of Significant Accounting Policies [Abstract] | |
Nature of Business | Nature of Business Throughout these notes to consolidated financial statements, we refer to Ministry Partners Investment Company, LLC and its subsidiaries as “the Company” . The Company was formed in California in 1991. The Company’s primary operations are financing commercial real property secured loans and providing investment services for the benefit of evangelical churches and church organizations. The Company funds its operations primarily through the sale of debt securities. The Company’s wholly owned subsidiaries are: · Ministry Partners Funding, LLC (“ MPF ”), · MP Realty Services, Inc., a California corporation (“ MP Realty ”), and · Ministry Partners Securities, LLC, a Delaware limited liability company (“ MP Securities ”). We formed MPF in 2007 and rendered the subsidiary inactive on November 30, 2009. In December 2014, the Company reactivated MPF to hold loans used as collateral for our Secured Investment Certificates. The Company formed MP Realty in November 2009, and obtained a license to operate as a corporate real estate broker through the California Department of Real Estate on February 23, 2010. MP Realty has conducted limited operations to date. We formed MP Securities on April 26, 2010 to provide investment and financing solutions for individuals, churches, charitable institutions, and faith-based organizations. MP Securities acts as the selling agent for the Company’s public and private placement notes. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Ministry Partners Investment Company, LLC and its wholly owned subsidiaries, MPF, MP Realty, and MP Securities. We eliminate all significant inter ‑company balances and transactions in consolidation. |
Conversion to LLC | Conversion to LLC Effective as of December 31, 2008, the Company converted its form of organization from a corporation organized under California law to a limited liability company organized under the laws of the State of California. With the filing of Articles of Organization-Conversion with the California Secretary of State, the separate existence of Ministry Partners Investment Corporation ceased and the entity continued by operation of law under the name Ministry Partners Investment Company, LLC. Since the conversion became effective, a group of managers provides oversight of the Company’s affairs and carries out their duties similar to the role and function that the Board of Directors performed under the previous bylaws. Operating like a Board of Directors, the managers have full, exclusive, and complete discretion, power, and authority to oversee the management of Company affairs. Instead of Articles of Incorporation and Bylaws, an Operating Agreement governs management structure and governance procedures. The Company’s managers and members have entered into this Operating Agreement. |
Cash and Cash Equivalents | Cash and Cash Equivalents For purposes of the statement of cash flows, cash equivalents include time deposits, certificates of deposit, and all highly liquid debt instruments with original maturities of three months or less. The Company had no cash positions other than demand deposits as of December 31, 2018 and December 31, 2017 . The National Credit Union Insurance Fund insures a portion of the Company’s cash held at credit unions. The Federal Deposit Insurance Corporation (“ FDIC” ) insures a portion of cash held at other financial institutions. The Company maintains cash that may exceed insured limits. The Company does not expect to incur losses in its cash accounts. |
Reclassifications | Reclassifications Certain reclassifications have been made to the 2017 financial statements to conform to the 2018 presentation. These reclassifications do not affect member’s equity or net income for the year ended December 31, 2017 |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with United States generally accepted accounting principles (" GAAP ") requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates govern areas such as the allowance for credit losses and the fair value of financial instruments. Actual results could differ from these estimates. |
Investments in Joint Venture | Investments in Joint Venture On a periodic basis, management analyzes the Company’s investment in a joint venture for impairment by comparing the carrying value of the investment to the estimated value of the underlying real property. Management records any impairment charges as a valuation allowance against the value of the asset. The Company’s share of income and expenses of the joint venture will increase or decrease the Company’s investment and will be recorded on the income statement as realized gains or losses on investment. |
Loans Receivable | Loans Receivable Loans that management has the intent and ability to hold for the foreseeable future are reported at their outstanding unpaid principal balance adjusted for an allowance for loan losses, deferred loan fees and costs, and loan discounts. Interest income on loans is accrued on a daily basis using the interest method. Loan origination fees and costs are deferred and recognized as an adjustment to the related loan yield using the interest method. Loan discounts represent interest accrued and unpaid which has been added to loan principal balances at the time the loan was restructured. Loan discounts are accreted to interest income over the term of the restructured loan once the loan is deemed fully collectible and is no longer considered impaired. Loan discounts also represent the differences between the purchase price on loans the Company purchased from third parties and the recorded principal balance of the loan. These discounts are accreted to interest income over the term of the loan using the interest method. Discounts are not accreted to income on impaired loans. The accrual of interest is discontinued at the time a loan is 90 days past due. Management can discontinue accrual of interest prior to the loan becoming 90 days past due if we determine the loan is impaired. Past due status is based on contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged off at an earlier date if management considers the collection of principal or interest doubtful. All interest accrued but not collected for loans that are placed on nonaccrual or charged off are reversed against interest income. The interest on these loans is accounted for on the cash basis or cost-recovery method until the loan qualifies for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. |
Allowance for Loan Losses | Allowance for Loan Losses The Company sets aside an allowance or reserve for loan losses through charges to earnings, which are shown in the Company’s Consolidated Statements of Income as a provision for loan losses. Loan losses are charged against the allowance when management believes the uncollectability of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. The allowance for loan losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. The allowance consists of general and specific components. The general component covers non-classified loans and is based on historical loss experience adjusted for qualitative factors. In establishing the allowance for loan losses, management considers significant factors that affect the collectability of the Company’s loan portfolio. While historical loss experience provides a reasonable starting point for the analysis, such experience by itself does not form a sufficient basis to determine the appropriate level of the allowance for loan losses. Management also considers qualitative (or environmental) factors that are likely to cause estimated credit losses associated with our existing portfolio to differ from historical loss experience, including: · Changes in lending policies and procedures, including changes in underwriting standards and collection; · Changes in national, regional and local economic and business conditions and developments that affect the collectability of the portfolio; · Changes in the volume and severity of past due loans, the volume of nonaccrual loans, and the volume and severity of adversely classified loans; · Changes in the value of underlying collateral for collateral-dependent loans; and · The effect of credit concentrations. These factors are adjusted on an on-going basis. The specific component of the Company’s allowance for loan losses relates to loans that are classified as impaired. For such loans, an allowance is established when the discounted cash flows, collateral value, or observable market price of the impaired loan is lower than the carrying value of that loan. All loans in the loan portfolio are subject to impairment analysis. The Company reviews its loan portfolio monthly by examining delinquency reports and information related to the financial condition of its borrowers and collateral value of its loans. Through this process, the Company identifies potential impaired loans. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal and interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting future scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower's prior payment record, and the amount of the shortfall in relation to the principal and interest owed. A loan is generally deemed to be impaired when it is 90 days or more past due, or earlier when facts and circumstances indicate that it is probable that a borrower will be unable to make payments in accordance with the loan contract. Impairment is measured on a loan-by-loan basis by either the present value of expected future cash flows discounted at the loan's effective interest rate, the obtainable market price, or the fair value of the collateral if the loan is collateral-dependent. When the Company modifies the terms of a loan for a borrower that is experiencing financial difficulties, a troubled debt restructuring is deemed to have occurred and the loan is classified as impaired. Loans or portions thereof are charged off when they are determined by management to be uncollectible. Uncollectability is evaluated periodically on all loans classified as “Loans of Lesser Quality.” The Company had historically not charged off a loan until the borrower has exhausted all reasonable means of making loan payments from cash flows, at which point the underlying collateral becomes subject to foreclosure. Among other variables, when assessing uncollectability, management will consider factors such as the financial condition of the borrower and the value of the underlying collateral. However, in 2018 the Company has begun to charge off loans in workout situations. In these situations, the Company charges off the amount that it deems it will not collect due to the terms of the workout. |
Troubled Debt Restructurings | Troubled Debt Restructurings A troubled debt restructuring is a loan for which the Company, for reasons related to a borrower’s financial difficulties, grants a concession to a borrower that the Company would not otherwise consider. A restructuring of a loan usually involves an interest rate modification, extension of the maturity date, or reduction of accrued interest owed on the loan on a contingent or absolute basis. Loans that are renewed at below-market terms are considered to be troubled debt restructurings if the below-market terms represent a concession due to the borrower’s troubled financial condition. Troubled debt restructurings are classified as impaired loans and are measured at the present value of estimated future cash flows using the loan's effective rate at inception of the loan. The change in the present value of cash flows attributable to the passage of time is reported as interest income. If the loan is considered to be collateral-dependent, impairment is measured based on the fair value of the collateral. |
Loan Portfolio Segments and Classes | Loan Portfolio Segments and Classes Management segregates the loan portfolio into portfolio segments for purposes of evaluating the allowance for loan losses. A portfolio segment is defined as the level at which the Company develops and documents a systematic method for determining its allowance for loan losses. The portfolio segments are segregated based on loan types and the underlying risk factors present in each loan type. Such risk factors are periodically reviewed by management and revised as deemed appropriate. Company’s loan portfolio consists of one segment – church loans. The loan portfolio is segregated into the following portfolio classes: Loan Class Class Description Wholly-Owned First Collateral Position Wholly-owned loans and the retained portion of loans originated by the Company and sold for which the Company possesses a senior lien on the collateral underlying the loan. Wholly-Owned Junior Collateral Position Wholly-owned loans and the retained portion of loans originated by the Company and sold for which the Company possesses a lien on the underlying collateral that is superseded by another lien on the same collateral. This class also contains any loans that are not secured. These loans present higher credit risk than loans for which the Company possesses a senior lien due to the increased risk of loss should the loan default. Participations First Collateral Position Participated loans purchased from another financial entity for which the Company possesses a senior lien on the collateral underlying the loan. Loan participations purchased may present higher credit risk than wholly owned loans because disposition and direction of actions regarding the management and collection of the loans must be coordinated and negotiated with the other participants, whose best interests regarding the loan may not align with those of the Company. Participations Junior Collateral Position Participated loans purchased from another financial entity for which the Company possesses a lien on the underlying collateral that is superseded by another lien on the same collateral. Loan participations in the junior collateral position loans have higher credit risk than wholly owned loans and participated loans purchased where the Company possesses a senior lien on the collateral. The increased risk is the result of the factors presented above relating to both junior lien positions and participations. |
Credit Quality Indicators | Credit Quality Indicators The Company’s policies provide for the classification of loans that are considered to be of lesser quality as watch, special mention, substandard, doubtful, or loss assets. Special mention assets exhibit potential or actual weaknesses that present a higher potential for loss under certain conditions. An asset is considered substandard if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Substandard assets include those assets characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Assets classified as doubtful have all of the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable, based on currently existing facts, conditions, and values. Assets (or portions of assets) classified as loss are those considered uncollectible and of such little value that their continuance as assets is not warranted. Assets that do not expose the Company to risk sufficient to warrant classification in one of the aforementioned categories, but which possess potential weaknesses that deserve close attention, are designated as watch. Loans designated as watch are considered pass loans. The Company has established a standard loan grading system to assist management and review personnel in their analysis and supervision of the loan portfolio. The loan grading system is as follows: Pass : The borrower has sufficient cash to fund debt services. The borrower may be able to obtain similar financing from other lenders with comparable terms. The risk of default is considered low. Watch : These loans exhibit potential or developing weaknesses that deserve extra attention from credit management personnel. If the developing weakness is not corrected or mitigated, there may be deterioration in the ability of the borrower to repay the debt in the future. Loans graded Watch must be reported to executive management and the Board of Managers. Potential for loss under adverse circumstances is elevated, but not foreseeable. Watch loans are considered pass loans. Special mention : These credit facilities exhibit potential or actual weaknesses that present a higher potential for loss under adverse circumstances, and deserve management’s close attention. If uncorrected, these weaknesses may result in deterioration of the repayment prospects for the loan at some future date. Substandard : Loans and other credit extensions bearing this grade are considered to be inadequately protected by the current sound worth and debt service capacity of the borrower or of any pledged collateral. These obligations, even if apparently protected by collateral value, have well-defined weaknesses related to adverse financial, managerial, economic, ministry, or environmental conditions which have clearly jeopardized repayment of principal and interest as originally intended. Furthermore, there is the possibility that some future loss will be sustained if such weaknesses are not corrected. Doubtful : This classification consists of loans that display the properties of substandard loans with the added characteristic that the severity of the weaknesses makes collection or liquidation in full highly questionable or improbable based upon currently existing facts, conditions, and values. The probability of some loss is very high, but because of certain important and reasonably specific factors, the amount of loss cannot be exactly determined. Such pending factors could include merger or liquidation, additional capital injection, refinancing plans, or perfection of liens on additional collateral. Loss : Loans in this classification are considered uncollectible and cannot be justified as a viable asset. This classification does not mean the loan has absolutely no recovery value, but that it is neither practical nor desirable to defer writing off this loan even though partial recovery may be obtained in the future. |
Foreclosed Assets | Foreclosed Assets Assets acquired through foreclosure or other proceedings are initially recorded at fair value at the date of foreclosure less estimated costs of disposal, which establishes a new cost. After foreclosure, valuations are periodically performed by management, and foreclosed assets held for sale are carried at the lower of cost or fair value, less estimated costs of disposal. Any write-down to fair value just prior to the transfer to foreclosed assets is charged to the allowance for loan losses. The Company’s real estate assets acquired through foreclosure or other proceedings are evaluated regularly to ensure that the recorded amount is supported by its current fair value and that valuation allowances to reduce the varying amount to fair value less estimated costs of disposal are recorded as necessary. Revenue and expense from the operation of the Company’s foreclosed assets and changes in the valuation allowance are included in net expenses from foreclosed assets. When the foreclosed property is sold, a gain or loss is recognized on the sale for the difference between the sales proceeds and the carrying amount of the property. |
Transfers of Financial Assets | Transfers of Financial Assets Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to have been surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. The Company, from time to time, sells participation interests in mortgage loans it has originated or acquired. In order to recognize the transfer of a portion of a financial asset as a sale, the transferred portion and any portion that continues to be held by the transferor must represent a participating interest, and the transfer of the participating interest must meet the conditions for surrender of control. To qualify as a participating interest (i) each portion of a financial asset must represent a proportionate ownership interest in an entire financial asset; (ii) from the date of transfer, all cash flows received from the entire financial asset must be divided proportionately among the participating interest holders in an amount equal to their share of ownership; (iii) the transfer must be made on a non-recourse basis (other than standard representations and warranties made under the loan participation sale agreement); (iv) the transfer may not be subordinate to any other participating interest holder; and (v) no party has the right to pledge or exchange the entire financial asset. If either the participating interest or surrender of control criteria is not met, the transaction is accounted for as a secured borrowing arrangement. Under some circumstances, when the Company sells participations in wholly owned loans receivable that it services, it retains a servicing asset that is initially measured at fair value. As quoted market prices are generally not available for these assets, the Company estimates fair value based on the present value of future expected cash flows associated with the loan receivable. The Company amortizes servicing assets over the life of the associated receivable using the interest method. Any gain or loss recognized on the sale of loans receivable depends in part on both the previous carrying amount of the financial assets involved in the sale, allocated between the assets sold and the interests that continue to be held by the Company based on their relative fair value at the date of transfer, and the proceeds received. |
Property and Equipment | Property and Equipment Furniture, fixtures, and equipment are stated at cost, less accumulated depreciation. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets, which range from three to seven years. |
Debt Issuance Costs | Debt Issuance Costs Debt issuance costs are related to borrowings from financial institutions as well as public offerings of unsecured notes, and are amortized into interest expense over the contractual terms of the debt using the straight line method. |
Employee Benefit Plan | Employee Benefit Plan Contributions to the qualified employee retirement plan are recorded as compensation cost in the period incurred. |
Income Taxes | Income Taxes The Company has elected to be treated as a partnership for income tax purposes. Therefore, income and expenses of the Company are passed through to its members for tax reporting purposes. According to its operating agreement, Tesoro Hills, LLC, a joint venture in which the Company has an investment, has also elected to be treated as a partnership for income tax purposes. The Company and MP Securities are subject to a California LLC fee. The Company uses a recognition threshold and a measurement attribute for the consolidated financial statement recognition and measurement of a tax position taken in a tax return. Benefits from tax positions are recognized in the financial statements only when it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority that would have full knowledge of all relevant information. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold are recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold are derecognized in the first subsequent financial reporting period in which that threshold is no longer met. |
New accounting guidance | New accounting guidance In May 2014, the Financial Accounting Standards Board (“ FASB ”) issued Accounting Standards Update (“ ASU ”) 2014-09, “Revenue from Contracts with Customers”, which supersedes existing accounting standards for revenue recognition and creates a single framework. ASU 2014-09 and all subsequent amendments to the ASU (collectively "ASC 606") requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers and revises when it is appropriate to recognize a gain or loss from the transfer of nonfinancial assets such as other real estate owned. This standard also specifies the accounting for certain costs to obtain or fulfill a contract with a customer. The Company’s implementation efforts included a detailed review of revenue contracts within the scope of guidance and an evaluation of the impact on the Company’s revenue recognition policies. No transition-related practical expedients were applied. The majority of Company's revenues come from interest income, which is outside the scope of ASC 606. The Company's revenues that are within the scope of ASC 606 are presented as Non-Interest Income and are recognized as revenue when the Company satisfies its obligation to the customer. Revenues within the scope of ASC 606 include wealth advisory fees, investment brokerage fees, and other service and miscellaneous income. The Company adopted ASC 606 using the modified retrospective method applied to all contracts not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606 while prior period amounts continue to be reported in accordance with legacy GAAP . The adoption of ASC 606 did not result in a material change to the accounting for any of the in-scope revenue streams; as such, no cumulative effect adjustment was recorded. In November 2016, the FASB issued ASU No. 2016-18, "Statement of Cash Flows-Restricted Cash (Topic 230)." The amendments in this update clarify the inclusion of restricted cash in the cash and cash equivalents beginning-of-period and end-of period reconciliation on the statement of cash flows. The Company adopted this update in the first quarter of 2018. However, because this amendment primarily affects the presentation and classification of information, this ASU did not have a material impact on the Company's consolidated financial statements and results of operations. |
Accounting Standards Pending Adoption | Accounting Standards Pending Adoption In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)," which supersedes previous leasing guidance in Topic 840. Under the new guidance, lessees are required to recognize lease right-of use assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The FASB has since issued additional related ASU amendments that are intended to clarify and improve certain aspects of the guidance and implementation of Topic 842 but do not change the core principles of the topic. The effective dates are the same as the effective date in Topic 842. In accordance with the guidance as amended, the Company may elect to apply the new standard at the adoption date (leases existing at, or entered into after January 1, 2019) and recognize a cumulative effect adjustment to retained earnings upon adoption, or use the modified retrospective transition approach which would require recording leases at the beginning of the earliest comparative period presented in the consolidated financial statements (January 1, 2017 for the Company), with certain practical expedients available. In 2019, the Company will implement this ASU and will apply the new lease standard on leases existing at January 1, 2019 rather than at the earliest comparative period allowable as noted above. Once this ASU has been fully implemented, the balance sheet will reflect both lease liabilities and right-of-use assets. In addition, the Company will recognize lease expense, which approximates the amount recorded under current GAAP, on a straight-line basis within the non-interest expense section of the income statement. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. ASU 2016-13 also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. ASU 2016-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The guidance requires companies to apply the requirements in the year of adoption through cumulative adjustment with some aspects of the update requiring a prospective transition approach. The Company preliminary evaluation indicates the provisions of ASU No. 2016-13 are expected to affect the Company’s consolidated financial statements, in particular the level of the reserve for credit losses. The Company is continuing to evaluate the extent of the potential impact. In August 2018, the FASB issued ASU No. 2018-13, “Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement.” The ASU removes, modifies, and adds certain disclosure requirements for fair value measurements. For example, public entities will no longer be required to disclose the valuation processes for Level 3 fair value measurements, but will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. ASU No. 2018-13 is effective for interim and annual reporting periods beginning after December 15, 2019. In addition, entities may early adopt the modified or eliminated disclosure requirements and delay adoption of the additional disclosure requirements until their effective date. The Company does not believe ASU No. 2018-13 will have a material impact on the consolidated financial statements, as the update only revises disclosure requirements. |
Pledge of Cash and Restricted_2
Pledge of Cash and Restricted Cash (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Pledge of Cash and Restricted Cash [Abstract] | |
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | December 31, 2018 2017 Cash and cash equivalents $ 9,877 $ 9,907 Restricted cash 51 58 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 9,928 $ 9,965 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
ECCU [Member] | |
Related Party Transaction [Line Items] | |
Summary of Related Party Balances | December 31, December 31, 2018 2017 Total funds held on deposit at ECCU $ 457 $ 1,065 Loan participations purchased from and serviced by ECCU 5,109 9,190 |
Schedule of Related Party Transactions | Year ended December 31, 2018 2017 Interest earned on funds held with ECCU $ 34 $ 6 Interest income earned on loans purchased from ECCU 278 546 Fees paid to ECCU from MP Securities Networking Agreement 25 22 Income from Master Services Agreement with ECCU 54 54 Income from Successor Servicing Agreement with ECCU 9 9 Rent expense on lease agreement with ECCU 116 116 |
ACCU [Member] | |
Related Party Transaction [Line Items] | |
Summary of Related Party Balances | December 31, December 31, 2018 2017 Total funds held on deposit at ACCU $ 5,675 $ 6,103 Dollar outstanding loan participations sold to ACCU and serviced by the Company 3,184 2,696 Loan participations purchased from and serviced by ACCU 1,662 1,719 |
Schedule of Related Party Transactions | Year ended December 31, 2018 2017 Dollar amount of loans sold to ACCU $ 554 $ 6,365 Interest earned on funds held with ACCU 69 26 Interest income earned on loans purchased from ACCU 86 89 Income from Master Services Agreement with ACCU 20 12 Fees paid based on MP Securities Networking Agreement with ACCU 56 190 |
Loans Receivable and Allowanc_2
Loans Receivable and Allowance for Loan Losses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Loans Receivable and Allowance for Loan Losses [Abstract] | |
Summary of Loans | December 31, December 31, 2018 2017 Loans to evangelical churches and related organizations: Real estate secured $ 147,061 $ 151,214 Unsecured 274 1,500 Total loans 147,335 152,714 Deferred loan fees, net (848) (911) Loan discount (627) (871) Allowance for loan losses (2,480) (2,097) Loans, net $ 143,380 $ 148,835 |
Schedule of Changes in Allowance for Loan Losses | December 31, 2018 December 31, 2017 Balance, beginning of period $ 2,097 $ 1,875 Provision for loan loss 666 262 Chargeoffs (283) (40) Balance, end of period $ 2,480 $ 2,097 |
Schedule of Loans and Allowance for Loan Losses by Impairment Methodology | Loans and Allowance for Loan Losses (by segment) As of December 31, 2018 December 31, 2017 Loans: Individually evaluated for impairment $ 13,601 $ 9,255 Collectively evaluated for impairment 133,734 143,459 Balance $ 147,335 $ 152,714 Allowance for loan losses: Individually evaluated for impairment $ 1,463 $ 1,260 Collectively evaluated for impairment 1,017 837 Balance $ 2,480 $ 2,097 |
Schedule of Loan Portfolio Credit Quality Indicators by Class | Credit Quality Indicators (by class) As of December 31, 2018 Wholly-Owned First Wholly-Owned Junior Participation First Participation Junior Total Grade: Pass $ 100,140 $ 4,067 $ 2,004 $ — $ 106,211 Watch 27,321 — 202 — 27,523 Special mention 1,208 — — — 1,208 Substandard 6,497 187 3,586 — 10,270 Doubtful 2,123 — — — 2,123 Loss — — — — — Total $ 137,289 $ 4,254 $ 5,792 $ — $ 147,335 Credit Quality Indicators (by class) As of December 31, 2017 Wholly-Owned First Wholly-Owned Junior Participation First Participation Junior Total Grade: Pass $ 115,422 $ 5,269 $ 9,474 $ — $ 130,165 Watch 13,082 — 212 — 13,294 Special mention 3,152 — — — 3,152 Substandard 5,907 196 — — 6,103 Doubtful — — — — — Loss — — — — — Total $ 137,563 $ 5,465 $ 9,686 $ — $ 152,714 |
Schedule of Age Analysis of Past Due Loans by Class | Age Analysis of Past Due Loans (by class) As of December 31, 2018 30-59 Days Past Due 60-89 Days Past Due Greater Than 90 Days Total Past Due Current Total Loans Recorded Investment 90 Days or more and Accruing Church loans: Wholly-Owned First $ 3,259 $ — $ 5,804 $ 9,063 $ 128,226 $ 137,289 $ — Wholly-Owned Junior 187 — — 187 4,067 4,254 — Participation First 2,293 — 1,292 3,585 2,207 5,792 — Participation Junior — — — — — — — Total $ 5,739 $ — $ 7,096 $ 12,835 $ 134,500 $ 147,335 $ — Age Analysis of Past Due Loans (by class) As of December 31, 2017 30-59 Days Past Due 60-89 Days Past Due Greater Than 90 Days Total Past Due Current Total Loans Recorded Investment 90 Days or more and Accruing Church loans: Wholly-Owned First $ — $ 3,521 $ 1,587 $ 5,108 $ 132,455 $ 137,563 $ — Wholly-Owned Junior — 196 — 196 5,269 5,465 — Participation First — — — — 9,686 9,686 — Participation Junior — — — — — — — Total $ — $ 3,717 $ 1,587 $ 5,304 $ 147,410 $ 152,714 $ — |
Schedule of Impaired Loans by Class | Impaired Loans (by class) As of December 31, 2018 Unpaid Principal Balance Recorded Balance Recorded Investment Related Allowance Average Recorded Investment Interest Income Recognized With no allowance recorded: Church loans: Wholly-Owned First $ 5,734 $ 5,687 $ 5,694 $ — $ 5,915 $ 123 Wholly-Owned Junior — — — — — — Participation First 2,293 2,293 2,316 — 2,312 — Participation Junior — — — — — — With an allowance recorded: Church loans: Wholly-Owned First 4,818 4,142 3,632 1,165 3,714 — Wholly-Owned Junior 215 187 176 176 181 — Participation First 1,302 1,292 1,292 122 1,299 10 Participation Junior — — — — — — Total: Church loans $ 14,362 $ 13,601 $ 13,110 $ 1,463 $ 13,421 $ 133 Impaired Loans (by class) As of December 31, 2017 Unpaid Principal Balance Recorded Balance Recorded Investment Related Allowance Average Recorded Investment Interest Income Recognized With no allowance recorded: Church loans: Wholly-Owned First $ 6,395 $ 5,060 $ 4,634 $ — $ 4,703 $ — Wholly-Owned Junior 216 196 185 — 200 — Participation First — — — — — — Participation Junior — — — — — — With an allowance recorded: Church loans: Wholly-Owned First 5,271 3,999 3,680 1,260 4,163 — Wholly-Owned Junior — — — — — — Participation First — — — — — — Participation Junior — — — — — — Total: Church loans $ 11,882 $ 9,255 $ 8,499 $ 1,260 $ 9,066 $ — |
Schedule of Loans on Nonaccrual Status by Class | Loans on Nonaccrual Status (by class) December 31, 2018 December 31, 2017 Church loans: Wholly-Owned First $ 8,619 $ 8,167 Wholly-Owned Junior 187 196 Participation First 1,292 — Participation Junior — — Total $ 10,098 $ 8,363 |
Schedule of Troubled Debt Restructurings by Class | Troubled Debt Restructurings (by class) For the year ended December 31, 2018 Number of Loans Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Recorded Investment At Period End Church loans: Wholly-Owned First 2 $ 1,748 $ 1,668 $ 1,668 Wholly-Owned Junior — — — — Participation First 2 3,595 3,595 3,586 Participation Junior — — — — Total 4 $ 5,343 $ 5,264 $ 5,254 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue Recognition [Abstract] | |
Schedule of Disaggregated Revenue | December 31, 2018 2017 Non-interest income Wealth advisory fees $ 231 $ 170 Investment brokerage fees 292 684 Lending fees (1) 838 254 Other non-interest income 83 75 Total non-interest income $ 1,444 $ 1,183 (1) Not within scope of ASC 606 |
Loan Sales (Tables)
Loan Sales (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Loan Sales [Abstract] | |
Schedule of Servicing Assets | December 31, December 31, 2018 2017 Participation loans sold by the Company $ 4,254 $ 9,700 Servicing Assets Balance, beginning of period $ 270 $ 258 Additions: Servicing obligations from sale of loan participations 21 203 Subtractions: Amortization (79) (191) Balance, end of period $ 212 $ 270 |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Premises and Equipment [Abstract] | |
Summary of Premises and Equipment | As of December 31, December 31, 2018 2017 Furniture and office equipment $ 491 $ 486 Computer system 231 222 Leasehold improvements 25 25 Total premises and equipment 747 733 Less accumulated depreciation and amortization (660) (630) Premises and equipment, net $ 87 $ 103 (dollars in thousands) 2018 2017 Depreciation and amortization expense for the years ended December 31, $ 30 $ 30 |
NCUA Credit Facilities (Tables)
NCUA Credit Facilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Line of Credit Facility [Line Items] | |
Summary of Credit Facilities | The NCUA credit facilities may be collateralized by qualifying mortgage loans or cash. As of December 31, 2018, all collateral pledged is qualifying mortgage loans. The facilities are non-revolving, do not have an option to renew or extend additional credit, and do not contain a prepayment penalty. These credit facilities include a number of borrower covenants, which as of December 31, 2018 and December 31, 2017 , respectively, the Company was in compliance. The following table summarizes the terms of each facility as of December 31, 2018 (dollars in millions): Maturity Date Amount Outstanding Amount of Loan Collateral Pledged Interest Rate Interest Calculation MU Credit Facility 11/1/2026 $59.49 $70.73 Fixed at 2.525% Accrued interest is due and payable monthly in arrears on the first day of each month WesCorp Credit Facility Extension 11/1/2026 $17.02 $21.78 Fixed at 2.525% Accrued interest is due and payable monthly in arrears on the first day of each month |
Credit Facilities [Member] | |
Line of Credit Facility [Line Items] | |
Schedule of Maturities of Credit Facilities | 2019 $ 5,041 2020 5,203 2021 5,341 2022 5,477 2023 5,617 Thereafter 49,836 $ 76,515 |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Instrument [Line Items] | |
Schedule of Notes Payable | As of As of December 31, 2018 December 31, 2017 SEC Registered Public Offerings Offering Type Amount Weighted Average Interest Rate Amount Weighted Average Interest Rate Class A Offering Unsecured $ 8,758 4.28 % $ 12,255 4.00 % Class 1 Offering Unsecured 29,114 3.98 % 39,704 3.70 % Class 1A Offering Unsecured 13,817 3.84 % — — % Public Offering Total $ 51,689 3.99 % $ 51,959 3.77 % Private Offerings Special Offering Unsecured — 3.93 % 473 3.94 % Special Subordinated Notes Unsecured 7,533 4.93 % 6,835 4.66 % Secured Notes Secured 9,170 3.86 % 9,821 3.77 % Private Offering Total $ 16,703 4.35 % $ 17,129 4.13 % Total Notes Payable $ 68,392 4.08 % $ 69,088 3.86 % Notes Payable Totals by Security Unsecured Total Unsecured $ 59,222 4.11 % $ 59,267 3.87 % Secured Total Secured $ 9,170 3.86 % $ 9,821 3.77 % |
Notes Payable [Member] | |
Debt Instrument [Line Items] | |
Schedule of Maturities of Notes Payable | 2019 $ 21,467 2020 16,332 2021 16,507 2022 4,338 2023 9,748 $ 68,392 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies [Abstract] | |
Unfunded Commitments | Contract Amount at: December 31, 2018 December 31, 2017 Undisbursed loans $ 1,919 $ 1,199 Standby letter of credit $ — $ 384 |
Operating Lease Commitments | 2019 $ 164 2020 149 2021 146 2022 150 2023 155 Total $ 764 |
Office Operations and Other E_2
Office Operations and Other Expenses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Office Operations and Other Expenses [Abstract] | |
Schedule of Office Operations and Other Expenses | December 31, 2018 December 31, 2017 Lending expenses $ 71 $ 53 Technology expenses 401 354 Depreciation 30 30 Insurance 275 278 Travel expenses 41 64 Human resources 34 48 Communication 36 35 Referral fees 81 214 Correspondent fees 60 60 Other 195 151 Total $ 1,224 $ 1,287 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Measurements [Abstract] | |
Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments | Fair Value Measurements at December 31, 2018 using Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value FINANCIAL ASSETS: Cash $ 9,877 $ 9,877 $ — $ — $ 9,877 Loans, net 143,380 — — 140,989 140,989 Investments in joint venture 887 — — 887 887 Accrued interest receivable 711 — — 711 711 FINANCIAL LIABILITIES: NCUA borrowings $ 76,515 $ — $ — $ 57,386 $ 57,386 Notes payable 68,300 — — 68,865 68,865 Other financial liabilities 356 — — 356 356 Fair Value Measurements at December 31, 2017 using Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value FINANCIAL ASSETS: Cash $ 9,907 $ 9,907 $ — $ — $ 9,907 Loans, net 148,835 — — 146,732 146,732 Investments in joint venture 896 — — 896 896 Accrued interest receivable 742 — — 742 742 FINANCIAL LIABILITIES: NCUA borrowings $ 81,492 $ — $ — $ 76,945 $ 76,945 Notes payable 69,003 — — 69,264 69,264 Other financial liabilities 346 — — 346 346 |
Schedule of Fair Value Measured on a Nonrecurring Basis | Fair Value Measurements Using: Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets at December 31, 2018: Collateral-dependent loans ( net of allowance and discount) $ — $ — $ 11,616 $ 11,616 Investments in joint venture — — 887 887 Total $ — $ — $ 12,503 $ 12,503 Assets at December 31, 2017: Collateral-dependent loans ( net of allowance and discount) $ — $ — $ 6,135 $ 6,135 Investments in joint venture — — 896 896 Total $ — $ — $ 7,031 $ 7,031 |
Schedule of Activity in Level 3 Assets | Impaired loans (net of allowance and discount) Balance, December 31, 2017 $ 6,135 Changes in allowance and discount (306) Loans that became impaired 7,620 Loan payments, payoffs, sales, and charge-offs (1,833) Balance, December 31, 2018 $ 11,616 Investments in joint venture (net of allowance and discount) Balance, December 31, 2017 $ 896 Pro rata share of joint venture losses (9) Balance, December 31, 2018 $ 887 Impaired loans (net of allowance and discount) Balance, December 31, 2016 $ 4,736 Re-classifications of assets from Level 3 into Level 2 1,253 Changes in allowance and discount (500) Loans that became impaired 1,495 Loan payments and payoffs (849) Balance, December 31, 2017 $ 6,135 Investments in joint venture (net of allowance and discount) Balance, December 31, 2016 $ 892 Pro rata share of joint venture income 4 Balance, December 31, 2017 $ 896 |
Schedule of Valuation Methodologies Used to Measure the Fair Value Adjustments for Level 3 Assets Recorded at Fair Value on a Nonrecurring Basis | December 31, 2018 Assets Fair Value (in thousands) Valuation Techniques Unobservable Input Range (Weighted Average) Impaired Loans $ 11,616 Discounted appraised value Selling cost / Estimated market decrease 15% - 72% ( 33% ) Investments in joint venture $ 887 Internal evaluations Estimated future market value 0% ( 0% ) December 31, 2017 Assets Fair Value (in thousands) Valuation Techniques Unobservable Input Range (Weighted Average) Impaired Loans $ 6,135 Discounted appraised value Selling cost / Estimated market decrease 25% - 58% ( 38% ) Investment in joint venture $ 896 Internal evaluations Estimated future market value 0% ( 0% ) |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Information [Abstract] | |
Schedule of Financial Information by Reportable Segments | Financial information with respect to the reportable segments for the year ended December 31, 2018 is as follows (dollars in thousands): Finance Company Broker Dealer Other Segments Adjustments / Eliminations Total Total revenue $ 10,126 $ 1,189 $ — $ (663) $ 10,652 Total non interest expense and provision for tax 3,655 995 23 — 4,673 Net profit (loss) 157 194 (23) 149 477 Total assets 154,072 1,307 55 5 155,439 Financial information with respect to the reportable segments for the year ended December 31, 2017 is as follows (dollars in thousands): Finance Company Broker Dealer Other Segments Adjustments / Eliminations Total Total revenue $ 9,799 $ 1,756 $ — $ (900) $ 10,655 Total non interest expense and provision for tax 3,761 1,088 19 — 4,868 Net profit (loss) 286 668 (19) 2 937 Total assets 159,791 1,207 55 (31) 161,022 |
Condensed Financial Statement_2
Condensed Financial Statements of Parent Company (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Condensed Financial Statements of Parent Company [Abstract] | |
Schedule of Parent Company Balance Sheets | As of December 31, 2018 2017 Assets: Cash $ 8,612 $ 8,783 Loans receivable, net of allowance for loan losses 143,380 148,835 Accrued interest receivable 711 742 Investments in joint venture 887 896 Property and equipment, net 85 99 Investment in subsidiaries 796 625 Due from subsidiaries 488 573 Servicing assets 212 270 Other assets 209 191 Total assets $ 155,380 $ 161,014 Liabilities and members’ equity Liabilities: NCUA credit facilities $ 76,515 $ 81,492 Notes payable, net of debt issuance costs 68,300 69,003 Accrued interest payable 249 208 Other liabilities 785 882 Total liabilities 145,849 151,585 Equity 9,531 9,429 Total liabilities and members' equity $ 155,380 $ 161,014 |
Schedule of Parent Company Statements of Income | For the years ended December 31, 2018 2017 Income: Interest Income $ 9,207 $ 9,471 Other income 920 327 Total income 10,127 9,798 Interest expense: NCUA Credit Facilities 2,000 2,123 Notes payable 3,649 2,465 Total interest expense 5,649 4,588 Provision for loan losses 666 262 Other operating expenses 3,647 4,645 Income before provision for income taxes 165 303 Provision for income taxes and state LLC fees 8 15 Income before equity in undistributed net income of subsidiaries 157 288 Equity in undistributed net income of subsidiaries 320 649 Net income $ 477 $ 937 |
Schedule of Parent Company Statements of Cash Flows | For the years ended December 31, 2018 2017 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 477 $ 937 Adjustments to reconcile net income to net cash used by operating activities: Equity in undistributed net income of subsidiaries (320) (649) Depreciation 27 26 Amortization of deferred loan fees (258) (438) Amortization of debt issuance costs 85 114 Provision for loan losses 666 262 Accretion of loan discount (24) (44) Gain on sale of loans (13) (136) Changes in: Accrued interest receivable 31 (85) Other assets 179 80 Accrued interest payable 41 35 Other liabilities 97 (57) Net cash provided by operating activities 988 45 CASH FLOWS FROM INVESTING ACTIVITIES: Loan purchases (2,721) — Loan originations (15,486) (29,917) Loan sales 5,414 9,735 Loan principal collections 17,817 15,784 Purchase of property and equipment (13) (18) Net cash provided (used) by investing activities 5,011 (4,416) CASH FLOWS FROM FINANCING ACTIVITIES: Change in NCUA borrowings (4,977) (4,834) Net change in notes payable (696) 8,532 Debt issuance costs (92) (121) Dividends paid on preferred units (405) (306) Net cash (used) provided by financing activities (6,170) 3,271 Net (decrease) in cash and restricted cash (171) (1,100) Cash, cash equivalents, and restricted cash at beginning of period 8,783 9,883 Cash, cash equivalents, and restricted cash at end of period $ 8,612 $ 8,783 Supplemental disclosures of cash flow information Interest paid $ 4,795 $ 4,553 Income taxes paid $ 23 $ 14 Dividends declared to preferred unit holders $ 107 $ 138 |
Nature of Business and Summar_3
Nature of Business and Summary of Significant Accounting Policies (Narrative) (Details) | 12 Months Ended | |
Dec. 31, 2018USD ($)segment | Dec. 31, 2017USD ($) | |
Significant Accounting Policies [Line Items] | ||
Cash, net of demand deposits | $ | $ 0 | $ 0 |
Number of loan portfolio segments | segment | 1 | |
Minimum [Member] | ||
Significant Accounting Policies [Line Items] | ||
Estimated useful lives of property and equipment | 3 years | |
Maximum [Member] | ||
Significant Accounting Policies [Line Items] | ||
Estimated useful lives of property and equipment | 7 years |
Pledge of Cash and Restricted_3
Pledge of Cash and Restricted Cash (Narrative) (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Pledge of Cash and Restricted Cash [Abstract] | ||
Pledged cash | $ 0 | $ 0 |
Pledge of Cash and Restricted_4
Pledge of Cash and Restricted Cash (Reconciliation of Cash, Cash Equivalents, and Restricted Cash) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Pledge of Cash and Restricted Cash [Abstract] | |||
Cash and cash equivalents | $ 9,877 | $ 9,907 | |
Restricted Cash | 51 | 58 | |
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows | $ 9,928 | $ 9,965 | $ 10,336 |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Details) $ in Thousands | Jun. 29, 2018shares | May 04, 2017shares | Aug. 14, 2013USD ($)loan | Dec. 31, 2018USD ($)loan | Dec. 31, 2017USD ($)loan |
ECCU [Member] | |||||
Related Party Transaction [Line Items] | |||||
Number of Loans purchased from related party | loan | 0 | 0 | |||
ECCU [Member] | Master Services Agreement [Member] | |||||
Related Party Transaction [Line Items] | |||||
Notice period for termination of agreement | 30 days | ||||
ECCU [Member] | Successor Servicing Agreement [Member] | |||||
Related Party Transaction [Line Items] | |||||
Loan servicing period | 3 years | ||||
UFCU [Member] | |||||
Related Party Transaction [Line Items] | |||||
Number of loans sold to related party | loan | 1 | ||||
Dollar amount of loans sold to related party | $ | $ 5,000 | ||||
Board and Executive Management [Member] | |||||
Related Party Transaction [Line Items] | |||||
Notes held by related parties | $ | $ 394 | $ 250 | |||
Minimum [Member] | MP Securities [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related party servicing fee | 0.25% | ||||
Maximum [Member] | MP Securities [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related party servicing fee | 5.50% | ||||
Class A Common Units [Member] | ACCU [Member] | |||||
Related Party Transaction [Line Items] | |||||
Shares purchased by related party | shares | 12,000 | ||||
Interest acquired | 8.19% | ||||
Series A Preferred Stock [Member] | ACCU [Member] | |||||
Related Party Transaction [Line Items] | |||||
Shares purchased by related party | shares | 2,000 | 12,000 | |||
Interest acquired | 1.71% | 10.25% | |||
MP Securities [Member] | ECCU [Member] | Networking Agreement [Member] | |||||
Related Party Transaction [Line Items] | |||||
Notice period for termination of agreement | 30 days | ||||
MP Securities [Member] | ACCU [Member] | Networking Agreement [Member] | |||||
Related Party Transaction [Line Items] | |||||
Notice period for termination of agreement | 30 days |
Related Party Transactions (Sum
Related Party Transactions (Summary of Related Party Balances) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
ECCU [Member] | ||
Related Party Transaction [Line Items] | ||
Total funds held on deposit | $ 457 | $ 1,065 |
Loan participations purchased from and serviced by related party | 5,109 | 9,190 |
ACCU [Member] | ||
Related Party Transaction [Line Items] | ||
Total funds held on deposit | 5,675 | 6,103 |
Dollar outstanding loan participations sold to related party and serviced by the Company | 3,184 | 2,696 |
Loan participations purchased from and serviced by related party | $ 1,662 | $ 1,719 |
Related Party Transactions (Sch
Related Party Transactions (Schedule of Related Party Transactions) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | ||
Income from related parties | $ 1,444 | $ 1,183 |
ECCU [Member] | Funds Held With Related Party [Member] | ||
Related Party Transaction [Line Items] | ||
Interest earned on funds held with related party | 34 | 6 |
ECCU [Member] | Loans Purchased [Member] | ||
Related Party Transaction [Line Items] | ||
Income from related parties | 278 | 546 |
ECCU [Member] | Networking Agreement [Member] | ||
Related Party Transaction [Line Items] | ||
Related party expenses/fees paid | 25 | 22 |
ECCU [Member] | Master Services Agreement [Member] | ||
Related Party Transaction [Line Items] | ||
Income from related parties | 54 | 54 |
ECCU [Member] | Successor Servicing Agreement [Member] | ||
Related Party Transaction [Line Items] | ||
Income from related parties | 9 | 9 |
ECCU [Member] | Lease Agreement [Member] | ||
Related Party Transaction [Line Items] | ||
Related party expenses/fees paid | 116 | 116 |
ACCU [Member] | Funds Held With Related Party [Member] | ||
Related Party Transaction [Line Items] | ||
Interest earned on funds held with related party | 69 | 26 |
ACCU [Member] | Loans Sold [Member] | ||
Related Party Transaction [Line Items] | ||
Dollar amount of loans sold to related party | 554 | 6,365 |
ACCU [Member] | Loans Purchased [Member] | ||
Related Party Transaction [Line Items] | ||
Income from related parties | 86 | 89 |
ACCU [Member] | Networking Agreement [Member] | ||
Related Party Transaction [Line Items] | ||
Related party expenses/fees paid | 56 | 190 |
ACCU [Member] | Master Services Agreement [Member] | ||
Related Party Transaction [Line Items] | ||
Income from related parties | $ 20 | $ 12 |
Loans Receivable and Allowanc_3
Loans Receivable and Allowance for Loan Losses (Narrative) (Details) | 12 Months Ended | |
Dec. 31, 2018USD ($)segmentloanitem | Dec. 31, 2017loan | |
Loans Receivable and Allowance for Loan Losses [Abstract] | ||
Number of loan categories | item | 4 | |
Loan interest rate | 6.44% | 6.31% |
Number of loan portfolio segments | segment | 1 | |
Number of restructured loans | 4 | 0 |
Troubled debt restructurings that subsequently defaulted, number of loans | 0 | 5 |
Number of defaulted restructured loans in foreclosure agreement | 4 | |
Funds committed to be advanced in connection with impaired loans | $ | $ 0 |
Loans Receivable and Allowanc_4
Loans Receivable and Allowance for Loan Losses (Summary of Loans) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total loans | $ 147,335 | $ 152,714 | |
Deferred loan fees, net | (848) | (911) | |
Loan discount | (627) | (871) | |
Allowance for loan losses | (2,480) | (2,097) | $ (1,875) |
Loans, net | 143,380 | 148,835 | |
Real Estate Secured [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total loans | 147,061 | 151,214 | |
Unsecured [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total loans | $ 274 | $ 1,500 |
Loans Receivable and Allowanc_5
Loans Receivable and Allowance for Loan Losses (Schedule of Changes in Allowance for Loan Losses) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Loans Receivable and Allowance for Loan Losses [Abstract] | ||
Balance, beginning of period | $ 2,097 | $ 1,875 |
Provision for loan loss | 666 | 262 |
Chargeoffs | (283) | (40) |
Balance, end of period | $ 2,480 | $ 2,097 |
Loans Receivable and Allowanc_6
Loans Receivable and Allowance for Loan Losses (Schedule of Loans and Allowance for Loan Losses by Impairment Methodology) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Loans Receivable and Allowance for Loan Losses [Abstract] | |||
Loans: Individually evaluated for impairment | $ 13,601 | $ 9,255 | |
Loans: Collectively evaluated for impairment | 133,734 | 143,459 | |
Loans: Balance | 147,335 | 152,714 | |
Allowance for loan losses: Individually evaluated for impairment | 1,463 | 1,260 | |
Allowance for loan losses: Collectively evaluated for impairment | 1,017 | 837 | |
Allowance for loan losses: Balance | $ 2,480 | $ 2,097 | $ 1,875 |
Loans Receivable and Allowanc_7
Loans Receivable and Allowance for Loan Losses (Schedule of Loan Portfolio Credit Quality Indicators by Class) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Financing Receivable, Recorded Investment [Line Items] | ||
Credit risks rated loans | $ 147,335 | $ 152,714 |
Wholly-Owned First [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Credit risks rated loans | 137,289 | 137,563 |
Wholly-Owned Junior [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Credit risks rated loans | 4,254 | 5,465 |
Participation First [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Credit risks rated loans | 5,792 | 9,686 |
Pass [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Credit risks rated loans | 106,211 | 130,165 |
Pass [Member] | Wholly-Owned First [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Credit risks rated loans | 100,140 | 115,422 |
Pass [Member] | Wholly-Owned Junior [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Credit risks rated loans | 4,067 | 5,269 |
Pass [Member] | Participation First [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Credit risks rated loans | 2,004 | 9,474 |
Watch [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Credit risks rated loans | 27,523 | 13,294 |
Watch [Member] | Wholly-Owned First [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Credit risks rated loans | 27,321 | 13,082 |
Watch [Member] | Participation First [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Credit risks rated loans | 202 | 212 |
Special Mention [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Credit risks rated loans | 1,208 | 3,152 |
Special Mention [Member] | Wholly-Owned First [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Credit risks rated loans | 1,208 | 3,152 |
Substandard [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Credit risks rated loans | 10,270 | 6,103 |
Substandard [Member] | Wholly-Owned First [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Credit risks rated loans | 6,497 | 5,907 |
Substandard [Member] | Wholly-Owned Junior [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Credit risks rated loans | 187 | $ 196 |
Substandard [Member] | Participation First [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Credit risks rated loans | 3,586 | |
Doubtful [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Credit risks rated loans | 2,123 | |
Doubtful [Member] | Wholly-Owned First [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Credit risks rated loans | $ 2,123 |
Loans Receivable and Allowanc_8
Loans Receivable and Allowance for Loan Losses (Schedule of Age Analysis of Past Due Loans by Class) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans: Balance | $ 147,335 | $ 152,714 |
Wholly-Owned First [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans: Balance | 137,289 | 137,563 |
Wholly-Owned Junior [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans: Balance | 4,254 | 5,465 |
Participation First [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans: Balance | 5,792 | 9,686 |
Church Loans [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 12,835 | 5,304 |
Current | 134,500 | 147,410 |
Loans: Balance | 147,335 | 152,714 |
Church Loans [Member] | 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 5,739 | |
Church Loans [Member] | 60 to 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 3,717 | |
Church Loans [Member] | Greater Than 90 Days [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 7,096 | 1,587 |
Church Loans [Member] | Wholly-Owned First [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 9,063 | 5,108 |
Current | 128,226 | 132,455 |
Loans: Balance | 137,289 | 137,563 |
Church Loans [Member] | Wholly-Owned First [Member] | 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 3,259 | |
Church Loans [Member] | Wholly-Owned First [Member] | 60 to 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 3,521 | |
Church Loans [Member] | Wholly-Owned First [Member] | Greater Than 90 Days [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 5,804 | 1,587 |
Church Loans [Member] | Wholly-Owned Junior [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 187 | 196 |
Current | 4,067 | 5,269 |
Loans: Balance | 4,254 | 5,465 |
Church Loans [Member] | Wholly-Owned Junior [Member] | 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 187 | |
Church Loans [Member] | Wholly-Owned Junior [Member] | 60 to 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 196 | |
Church Loans [Member] | Participation First [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 3,585 | |
Current | 2,207 | 9,686 |
Loans: Balance | 5,792 | $ 9,686 |
Church Loans [Member] | Participation First [Member] | 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 2,293 | |
Church Loans [Member] | Participation First [Member] | Greater Than 90 Days [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | $ 1,292 |
Loans Receivable and Allowanc_9
Loans Receivable and Allowance for Loan Losses (Schedule of Impaired Loans by Class) (Details) - Church Loans [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Unpaid Principal Balance, Total | $ 14,362 | $ 11,882 |
Recorded Balance, Total | 13,601 | 9,255 |
Recorded Investment, Total | 13,110 | 8,499 |
Related Allowance | 1,463 | 1,260 |
Average Recorded Investment, Total | 13,421 | 9,066 |
Interest Income Recognized, Total | 133 | |
Wholly-Owned First [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Unpaid Principal Balance, With no allowance recorded | 5,734 | 6,395 |
Unpaid Principal Balance, With an allowance recorded | 4,818 | 5,271 |
Recorded Balance, With no allowance recorded | 5,687 | 5,060 |
Recorded Balance, With an allowance recorded | 4,142 | 3,999 |
Recorded Investment, With no related allowance recorded | 5,694 | 4,634 |
Recorded Investment, With an allowance recorded | 3,632 | 3,680 |
Related Allowance | 1,165 | 1,260 |
Average Recorded Investment, With no allowance recorded | 5,915 | 4,703 |
Average Recorded Investment, With an allowance recorded | 3,714 | 4,163 |
Interest Income Recognized, With no related allowance | 123 | |
Wholly-Owned Junior [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Unpaid Principal Balance, With no allowance recorded | 216 | |
Unpaid Principal Balance, With an allowance recorded | 215 | |
Recorded Balance, With no allowance recorded | 196 | |
Recorded Balance, With an allowance recorded | 187 | |
Recorded Investment, With no related allowance recorded | 185 | |
Recorded Investment, With an allowance recorded | 176 | |
Related Allowance | 176 | |
Average Recorded Investment, With no allowance recorded | $ 200 | |
Average Recorded Investment, With an allowance recorded | 181 | |
Participation First [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Unpaid Principal Balance, With no allowance recorded | 2,293 | |
Unpaid Principal Balance, With an allowance recorded | 1,302 | |
Recorded Balance, With no allowance recorded | 2,293 | |
Recorded Balance, With an allowance recorded | 1,292 | |
Recorded Investment, With no related allowance recorded | 2,316 | |
Recorded Investment, With an allowance recorded | 1,292 | |
Related Allowance | 122 | |
Average Recorded Investment, With no allowance recorded | 2,312 | |
Average Recorded Investment, With an allowance recorded | 1,299 | |
Interest Income Recognized, With an allowance recorded | $ 10 |
Loans Receivable and Allowan_10
Loans Receivable and Allowance for Loan Losses (Schedule of Loans on Nonaccrual Status by Class) (Details) - Church Loans [Member] - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Nonaccrual loans | $ 10,098 | $ 8,363 |
Wholly-Owned First [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Nonaccrual loans | 8,619 | 8,167 |
Wholly-Owned Junior [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Nonaccrual loans | 187 | $ 196 |
Participation First [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Nonaccrual loans | $ 1,292 |
Loans Receivable and Allowan_11
Loans Receivable and Allowance for Loan Losses (Schedule of Troubled Debt Restructurings by Class) (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018USD ($)loan | Dec. 31, 2017loan | |
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Number of Loans | loan | 4 | 0 |
Church Loans [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Number of Loans | loan | 4 | |
Pre-Modification Outstanding Recorded Investment | $ 5,343 | |
Post-Modification Outstanding Recorded Investment | 5,264 | |
Recorded Investment At Period End | $ 5,254 | |
Church Loans [Member] | Wholly-Owned First [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Number of Loans | loan | 2 | |
Pre-Modification Outstanding Recorded Investment | $ 1,748 | |
Post-Modification Outstanding Recorded Investment | 1,668 | |
Recorded Investment At Period End | $ 1,668 | |
Church Loans [Member] | Participation First [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Number of Loans | loan | 2 | |
Pre-Modification Outstanding Recorded Investment | $ 3,595 | |
Post-Modification Outstanding Recorded Investment | 3,595 | |
Recorded Investment At Period End | $ 3,586 |
Investments in Joint Venture (N
Investments in Joint Venture (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2015 | |
Investments in Joint Venture [Abstract] | |||
Investments in joint venture | $ 887 | $ 896 | $ 900 |
Income (loss) from Joint Venture Investment | $ (11) | $ 4 |
Revenue Recognition (Schedule o
Revenue Recognition (Schedule of Disaggregated Revenue) (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($)item | Dec. 31, 2017USD ($) | ||
Disaggregation of Revenue [Line Items] | |||
Total non-interest income | $ 1,444 | $ 1,183 | |
Types of revenue, number | item | 2 | ||
Wealth Advisory Fees [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total non-interest income | $ 231 | 170 | |
Investment Brokerage Fees [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total non-interest income | 292 | 684 | |
Lending Fees [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total non-interest income | [1] | 838 | 254 |
Other Non-Interest Income [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total non-interest income | $ 83 | $ 75 | |
[1] | Not within scope of ASC 606 |
Loan Sales (Schedule of Servici
Loan Sales (Schedule of Servicing Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Loan Sales [Abstract] | ||
Participation loans sold by the Company | $ 4,254 | $ 9,700 |
Balance, beginning of period | 270 | 258 |
Additions: Servicing obligations from sale of loan participations | 21 | 203 |
Subtractions: Amortization | (79) | (191) |
Balance, end of period | $ 212 | $ 270 |
Premises and Equipment (Summary
Premises and Equipment (Summary of Premises and Equipment) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | ||
Total premises and equipment | $ 747 | $ 733 |
Less accumulated depreciation and amortization | (660) | (630) |
Premises and equipment, net | 87 | 103 |
Depreciation and amortization expense | 30 | 30 |
Furniture And Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total premises and equipment | 491 | 486 |
Computer System [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total premises and equipment | 231 | 222 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total premises and equipment | $ 25 | $ 25 |
NCUA Credit Facilities (Narrati
NCUA Credit Facilities (Narrative) (Details) | Dec. 31, 2018item |
Notes Payable and NCUA Credit Facilities [Abstract] | |
Number of credit facilities | 2 |
NCUA Credit Facilities (Summary
NCUA Credit Facilities (Summary of Credit Facilities) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
MU Credit Facility [Member] | |
Line of Credit Facility [Line Items] | |
Maturity Date | Nov. 1, 2026 |
Interest Rate | 2.525% |
Interest Calculation | Accrued interest is due and payable monthly in arrears on the first day of each month |
Amount outstanding | $ 59,490 |
Collateral pledged | $ 70,730 |
WesCorp Credit Facility Extension [Member] | |
Line of Credit Facility [Line Items] | |
Maturity Date | Nov. 1, 2026 |
Interest Rate | 2.525% |
Interest Calculation | Accrued interest is due and payable monthly in arrears on the first day of each month |
Amount outstanding | $ 17,020 |
Collateral pledged | $ 21,780 |
NCUA Credit Facilities (Schedul
NCUA Credit Facilities (Schedule of Maturities of Credit Facilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Line of Credit Facility [Line Items] | ||
Total | $ 68,392 | $ 69,088 |
Credit Facilities [Member] | ||
Line of Credit Facility [Line Items] | ||
2019 | 5,041 | |
2020 | 5,203 | |
2021 | 5,341 | |
2022 | 5,477 | |
2023 | 5,617 | |
Thereafter | 49,836 | |
Total | $ 76,515 |
Notes Payable (Narrative) (Deta
Notes Payable (Narrative) (Details) | 12 Months Ended | |||
Dec. 31, 2018USD ($)item | Feb. 28, 2018USD ($) | Dec. 31, 2017USD ($) | Jan. 31, 2015USD ($) | |
Debt Instrument [Line Items] | ||||
Debt issuance costs | $ 92,000 | $ 85,000 | ||
Class A [Member] | ||||
Debt Instrument [Line Items] | ||||
Number of series in class of notes | item | 3 | |||
Class 1 [Member] | ||||
Debt Instrument [Line Items] | ||||
Number of series in class of notes | item | 2 | |||
Class 1A [Member] | ||||
Debt Instrument [Line Items] | ||||
Number of series in class of notes | item | 2 | |||
Notes authorized, maximum | $ 90,000,000 | |||
Secured Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes authorized, maximum | $ 80,000,000 | $ 80,000,000 | ||
Collateral pledged | 10,900,000 | |||
Secured Notes [Member] | Cash [Member] | ||||
Debt Instrument [Line Items] | ||||
Minimum collateralization ratio | 100.00% | |||
Collateral pledged | $ 0 | $ 0 | ||
Secured Notes [Member] | Loans Receivable [Member] | ||||
Debt Instrument [Line Items] | ||||
Minimum collateralization ratio | 105.00% | |||
Collateral pledged | $ 9,670,000 | |||
Special Subordinated Notes [Member] | Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity period | 12 months | |||
Special Subordinated Notes [Member] | Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity period | 60 months | |||
Special Subordinated Notes [Member] | Swap Index Rate [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate measurement period | 7 days | |||
Special Offering [Member] | ||||
Debt Instrument [Line Items] | ||||
Maximum number of non accredited investors | item | 35 |
Notes Payable (Schedule of Note
Notes Payable (Schedule of Notes Payable) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Amount | $ 68,392 | $ 69,088 |
Weighted Average Interest Rate | 4.08% | 3.86% |
Public Offerings [Member] | ||
Debt Instrument [Line Items] | ||
Amount | $ 51,689 | $ 51,959 |
Weighted Average Interest Rate | 3.99% | 3.77% |
Public Offerings [Member] | Class A [Member] | ||
Debt Instrument [Line Items] | ||
Amount | $ 8,758 | $ 12,255 |
Weighted Average Interest Rate | 4.28% | 4.00% |
Public Offerings [Member] | Class 1 [Member] | ||
Debt Instrument [Line Items] | ||
Amount | $ 29,114 | $ 39,704 |
Weighted Average Interest Rate | 3.98% | 3.70% |
Public Offerings [Member] | Class 1A [Member] | ||
Debt Instrument [Line Items] | ||
Amount | $ 13,817 | |
Weighted Average Interest Rate | 3.84% | |
Private Offerings [Member] | ||
Debt Instrument [Line Items] | ||
Amount | $ 16,703 | $ 17,129 |
Weighted Average Interest Rate | 4.35% | 4.13% |
Private Offerings [Member] | Special Offering [Member] | ||
Debt Instrument [Line Items] | ||
Amount | $ 473 | |
Weighted Average Interest Rate | 3.93% | 3.94% |
Private Offerings [Member] | Special Subordinated Notes [Member] | ||
Debt Instrument [Line Items] | ||
Amount | $ 7,533 | $ 6,835 |
Weighted Average Interest Rate | 4.93% | 4.66% |
Private Offerings [Member] | Secured Notes [Member] | ||
Debt Instrument [Line Items] | ||
Amount | $ 9,170 | $ 9,821 |
Weighted Average Interest Rate | 3.86% | 3.77% |
Unsecured [Member] | ||
Debt Instrument [Line Items] | ||
Amount | $ 59,222 | $ 59,267 |
Weighted Average Interest Rate | 4.11% | 3.87% |
Secured [Member] | ||
Debt Instrument [Line Items] | ||
Amount | $ 9,170 | $ 9,821 |
Weighted Average Interest Rate | 3.86% | 3.77% |
Notes Payable (Schedule of Matu
Notes Payable (Schedule of Maturities of Notes Payable) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Total | $ 68,392 | $ 69,088 |
Notes Payable [Member] | ||
Debt Instrument [Line Items] | ||
2019 | 21,467 | |
2020 | 16,332 | |
2021 | 16,507 | |
2022 | 4,338 | |
2023 | 9,748 | |
Total | $ 68,392 |
Commitments and Contingencies_2
Commitments and Contingencies (Narrative) (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($)item | Dec. 31, 2017USD ($) | Jan. 31, 2019 | |
Commitments And Contingencies [Line Items] | |||
Loss contingency accrual | $ 30 | ||
Rent expense | $ 143 | $ 142 | |
Brea [Member] | |||
Commitments And Contingencies [Line Items] | |||
Lease expiration year | 2020 | ||
Brea [Member] | Subsequent Event [Member] | |||
Commitments And Contingencies [Line Items] | |||
Lease renewal term | 5 years | ||
Fresno [Member] | |||
Commitments And Contingencies [Line Items] | |||
Number of lease extension options remaining | item | 0 |
Commitments and Contingencies_3
Commitments and Contingencies (Unfunded Commitments) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Undisbursed Loans [Member] | ||
Commitments And Contingencies [Line Items] | ||
Unfunded Commitments | $ 1,919 | $ 1,199 |
Standby Letter Of Credit [Member] | ||
Commitments And Contingencies [Line Items] | ||
Unfunded Commitments | $ 384 |
Commitments and Contingencies_4
Commitments and Contingencies (Operating Lease Commitments) (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Commitments and Contingencies [Abstract] | |
2019 | $ 164 |
2020 | 149 |
2021 | 146 |
2022 | 150 |
2023 | 155 |
Total | $ 764 |
Office Operations and Other E_3
Office Operations and Other Expenses (Schedule of Office Operations and Other Expenses) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Office Operations and Other Expenses [Abstract] | ||
Lending expenses | $ 71 | $ 53 |
Technology expenses | 401 | 354 |
Depreciation | 30 | 30 |
Insurance | 275 | 278 |
Travel expenses | 41 | 64 |
Human resources | 34 | 48 |
Communication | 36 | 35 |
Referral fees | 81 | 214 |
Correspondent fees | 60 | 60 |
Other | 195 | 151 |
Total | $ 1,224 | $ 1,287 |
Preferred and Common Units Un_2
Preferred and Common Units Under LLC Structure (Narrative) (Details) | 12 Months Ended | |
Dec. 31, 2018item / sharesitem$ / shares | Dec. 31, 2017$ / shares | |
Class of Stock [Line Items] | ||
Liquidation preference, per share | $ / shares | $ 100 | $ 100 |
Series A Preferred Units [Member] | ||
Class of Stock [Line Items] | ||
Spread over LIBOR | 0.25% | |
Interest rate measurement period | 1 year | |
Preferred stock, dividend payment rate | 10% | |
Liquidation preference, per share | $ / shares | $ 100 | |
Number of voting rights | item / shares | 0 | |
Threshold of number of consecutive quarters without paid preferred return for appointment of managers | item | 4 | |
Number of managers that can be appointed after threshold for period of unpaid preferred returns reached | item | 2 |
Retirement Plans (Narrative) (D
Retirement Plans (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
401(k) plan [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Minimum service period | 0 years | |
Minimum age restriction for participation | 21 years | |
Maximum voluntary percentage contributions of salary (as a percent) | 86.00% | |
Contribution percentage, comapany match as percent of employee contribution | 3.00% | |
Contribution percentage, percent of company match after initial threshold | 50.00% | |
Contribution percentage, initial threshold for change in company matching contribution | 3.00% | |
Matching contributions by employer | $ 76,000 | $ 77,000 |
401(k) plan [Member] | Maximum [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Contribution percentage, comapany match as percent of employee contribution | 5.00% | |
Profit Sharing [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Minimum age restriction for participation | 21 years | |
Matching contributions by employer | $ 0 | $ 0 |
Minimum number of service hours required in plan year to be eligible under plan | 900 hours |
Fair Value Measurements (Schedu
Fair Value Measurements (Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2015 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Carrying Value, Cash | $ 9,877 | $ 9,907 | |
Carrying Value, Loans, net | 143,380 | 148,835 | |
Carrying Value, Investments in joint venture | 887 | 896 | $ 900 |
Carrying Value, NCUA borrowings | 76,515 | 81,492 | |
Carrying Value, Notes payable | 68,300 | 69,003 | |
Carrying Value [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Carrying Value, Cash | 9,877 | 9,907 | |
Carrying Value, Loans, net | 143,380 | 148,835 | |
Carrying Value, Investments in joint venture | 887 | 896 | |
Carrying Value, Accrued interest receivable | 711 | 742 | |
Carrying Value, NCUA borrowings | 76,515 | 81,492 | |
Carrying Value, Notes payable | 68,300 | 69,003 | |
Carrying Value, Other financial liabilities | 356 | 346 | |
Fair Value [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair Value, Cash | 9,877 | 9,907 | |
Fair Value, Loans, net | 140,989 | 146,732 | |
Fair Value, Investments in joint venture | 887 | 896 | |
Fair Value, Accrued interest receivable | 711 | 742 | |
Fair Value, NCUA borrowings | 57,386 | 76,945 | |
Fair Value, Notes payable | 68,865 | 69,264 | |
Fair Value, Other financial liabilities | 356 | 346 | |
Quoted Prices In Active Markets For Identical Assets Level 1 [Member] | Fair Value [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair Value, Cash | 9,877 | 9,907 | |
Significant Unobservable Inputs Level 3 [Member] | Fair Value [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair Value, Loans, net | 140,989 | 146,732 | |
Fair Value, Investments in joint venture | 887 | 896 | |
Fair Value, Accrued interest receivable | 711 | 742 | |
Fair Value, NCUA borrowings | 57,386 | 76,945 | |
Fair Value, Notes payable | 68,865 | 69,264 | |
Fair Value, Other financial liabilities | $ 356 | $ 346 |
Fair Value Measurements (Sche_2
Fair Value Measurements (Schedule of Fair Value Measured on a Nonrecurring Basis) (Details) - Fair Value Measured On A Nonrecurring Basis [Member] - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Collateral-dependent loans (net of allowance and discount) | $ 11,616 | $ 6,135 |
Investments in joint venture | 887 | 896 |
Total | 12,503 | 7,031 |
Significant Unobservable Inputs Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Collateral-dependent loans (net of allowance and discount) | 11,616 | 6,135 |
Investments in joint venture | 887 | 896 |
Total | $ 12,503 | $ 7,031 |
Fair Value Measurements (Sche_3
Fair Value Measurements (Schedule of Activity in Level 3 Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Impaired Loans [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance | $ 6,135 | $ 4,736 |
Re-classifications of assets from Level 3 into Level 2 | 1,253 | |
Changes in allowance and discount | (306) | (500) |
Loans that became impaired | 7,620 | 1,495 |
Loan payments, payoffs, sales, and charge-offs | (1,833) | (849) |
Ending Balance | 11,616 | 6,135 |
Corporate Joint Venture [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance | 896 | 892 |
Pro rata share of joint venture losses | (9) | 4 |
Ending Balance | $ 887 | $ 896 |
Fair Value Measurements (Sche_4
Fair Value Measurements (Schedule of Valuation Methodologies Used to Measure the Fair Value Adjustments for Level 3 Assets Recorded at Fair Value on a Nonrecurring Basis) (Details) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2015USD ($) |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Investments in joint venture | $ 887,000 | $ 896,000 | $ 900,000 |
Significant Unobservable Inputs Level 3 [Member] | Impaired Loans [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Impaired Loans | 11,616,000 | 6,135,000 | |
Significant Unobservable Inputs Level 3 [Member] | Corporate Joint Venture [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Investments in joint venture | $ 887,000 | $ 896,000 | |
Investment in joint venture, measurement input | 0 | 0 | |
Minimum [Member] | Significant Unobservable Inputs Level 3 [Member] | Impaired Loans [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Impaired Loans Unobservable Input | 0.15 | 0.25 | |
Maximum [Member] | Significant Unobservable Inputs Level 3 [Member] | Impaired Loans [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Impaired Loans Unobservable Input | 0.72 | 0.58 | |
Weighted Average [Member] | Significant Unobservable Inputs Level 3 [Member] | Impaired Loans [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Impaired Loans Unobservable Input | 0.33 | 0.38 | |
Weighted Average [Member] | Significant Unobservable Inputs Level 3 [Member] | Corporate Joint Venture [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Investment in joint venture, measurement input | 0 | 0 |
Income Taxes and State LLC Fe_2
Income Taxes and State LLC Fees (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Line Items] | ||
Operating loss carryforward expiration | Dec. 31, 2030 | |
California Franchise Tax Board [Member] | ||
Income Tax Disclosure [Line Items] | ||
Gross receipt fee based on turnover | $ 12,000 | |
MP Securities [Member] | California Franchise Tax Board [Member] | ||
Income Tax Disclosure [Line Items] | ||
Gross receipt fee based on turnover | 6,000 | |
MP Realty [Member] | ||
Income Tax Disclosure [Line Items] | ||
Operating loss carryforwards | $ 430,000 | $ 407,000 |
Valuation allowance, percentage | 100.00% | 100.00% |
MP Realty [Member] | California Franchise Tax Board [Member] | ||
Income Tax Disclosure [Line Items] | ||
Gross receipt fee based on turnover | $ 800 | $ 800 |
Segment Information (Narrative)
Segment Information (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2018segment | |
Segment Information [Abstract] | |
Number of segments | 2 |
Segment Information (Schedule o
Segment Information (Schedule of Financial Information by Reportable Segments) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 10,652 | $ 10,655 |
Non interest expense and prov. for tax | 4,673 | 4,868 |
Net profit (loss) | 477 | 937 |
Assets | 155,439 | 161,022 |
Adjustments/Eliminations [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | (663) | (900) |
Net profit (loss) | 149 | 2 |
Assets | 5 | (31) |
Finance Company [Member] | Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 10,126 | 9,799 |
Non interest expense and prov. for tax | 3,655 | 3,761 |
Net profit (loss) | 157 | 286 |
Assets | 154,072 | 159,791 |
Broker Dealer [Member] | Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 1,189 | 1,756 |
Non interest expense and prov. for tax | 995 | 1,088 |
Net profit (loss) | 194 | 668 |
Assets | 1,307 | 1,207 |
Other Segments [Member] | Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Non interest expense and prov. for tax | 23 | 19 |
Net profit (loss) | (23) | (19) |
Assets | $ 55 | $ 55 |
Condensed Financial Statement_3
Condensed Financial Statements of Parent Company (Schedule of Parent Company Balance Sheets) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Assets: | ||||
Cash | $ 9,877 | $ 9,907 | ||
Loans receivable, net of allowance for loan losses | 143,380 | 148,835 | ||
Accrued interest receivable | 711 | 742 | ||
Investments in joint venture | 887 | 896 | $ 900 | |
Property and equipment, net | 87 | 103 | ||
Servicing assets | 212 | 270 | ||
Other assets | 234 | 211 | ||
Total assets | 155,439 | 161,022 | ||
Liabilities: | ||||
NCUA credit facilities | 76,515 | 81,492 | ||
Notes payable, net of debt issuance costs | 68,300 | 69,003 | ||
Accrued interest payable | 249 | 208 | ||
Other liabilities | 844 | 890 | ||
Total liabilities | 145,908 | 151,593 | ||
Equity | 9,531 | 9,429 | $ 8,807 | |
Total liabilities and members' equity | 155,439 | 161,022 | ||
Parent [Member] | ||||
Assets: | ||||
Cash | 8,612 | 8,783 | ||
Loans receivable, net of allowance for loan losses | 143,380 | 148,835 | ||
Accrued interest receivable | 711 | 742 | ||
Investments in joint venture | 887 | 896 | ||
Property and equipment, net | 85 | 99 | ||
Investments in subsidiaries | 796 | 625 | ||
Due from subsidiaries | 488 | 573 | ||
Servicing assets | 212 | 270 | ||
Other assets | 209 | 191 | ||
Total assets | 155,380 | 161,014 | ||
Liabilities: | ||||
NCUA credit facilities | 76,515 | 81,492 | ||
Notes payable, net of debt issuance costs | 68,300 | 69,003 | ||
Accrued interest payable | 249 | 208 | ||
Other liabilities | 785 | 882 | ||
Total liabilities | 145,849 | 151,585 | ||
Equity | 9,531 | 9,429 | ||
Total liabilities and members' equity | $ 155,380 | $ 161,014 |
Condensed Financial Statement_4
Condensed Financial Statements of Parent Company (Schedule of Parent Company Statements of Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Interest income: | ||
Interest Income | $ 9,208 | $ 9,472 |
Other income | 1,444 | 1,183 |
Total income | 10,652 | 10,655 |
Interest expense: | ||
NCUA credit facilities | 2,000 | 2,123 |
Notes payable | 2,836 | 2,465 |
Total interest expense | 4,836 | 4,588 |
Provision for loan losses | 666 | 262 |
Other operating expenses | 195 | 151 |
Income before provision for income taxes | 497 | 961 |
Provision for income taxes and state LLC fees | 20 | 24 |
Net income | 477 | 937 |
Parent [Member] | ||
Interest income: | ||
Interest Income | 9,207 | 9,471 |
Other income | 920 | 327 |
Total income | 10,127 | 9,798 |
Interest expense: | ||
NCUA credit facilities | 2,000 | 2,123 |
Notes payable | 3,649 | 2,465 |
Total interest expense | 5,649 | 4,588 |
Provision for loan losses | 666 | 262 |
Other operating expenses | 3,647 | 4,645 |
Income before provision for income taxes | 165 | 303 |
Provision for income taxes and state LLC fees | 8 | 15 |
Income before equity in undistributed net income of subsidiaries | 157 | 288 |
Equity in undistributed net income of subsidiaries | 320 | 649 |
Net income | $ 477 | $ 937 |
Condensed Financial Statement_5
Condensed Financial Statements of Parent Company (Schedule of Parent Company Statements of Cash Flows) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 477 | $ 937 |
Adjustments to reconcile net income to net cash provided (used) by operating activities: | ||
Depreciation | 30 | 30 |
Amortization of deferred loan fees | (258) | (438) |
Amortization of debt issuance costs | 85 | 114 |
Provision for loan losses | 666 | 262 |
Accretion of loan discount | (24) | (44) |
Gain on sale of loans | (13) | (136) |
Changes in: | ||
Accrued interest receivable | 31 | (85) |
Other assets | 103 | 74 |
Accrued interest payable | 41 | 35 |
Other liabilities | (15) | 29 |
Net cash provided by operating activities | 1,123 | 774 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Loan purchases | (2,721) | |
Loan originations | (15,486) | (29,917) |
Loan sales | 5,414 | 9,735 |
Loan principal collections | 17,817 | 15,784 |
Purchase of property and equipment | (14) | (18) |
Net cash provided (used) by investing activities | 5,010 | (4,416) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Change in NCUA borrowings | (4,977) | (4,834) |
Net change in notes payable | (696) | 8,532 |
Debt issuance costs | (92) | (121) |
Dividends paid on preferred units | (405) | (306) |
Net cash provided (used) by financing activities | (6,170) | 3,271 |
Net decrease in cash and restricted cash | (37) | (371) |
Cash, cash equivalents, and restricted cash at beginning of period | 9,965 | 10,336 |
Cash, cash equivalents, and restricted cash at end of period | 9,928 | 9,965 |
Supplemental disclosures of cash flow information | ||
Interest paid | 4,795 | 4,553 |
Income taxes paid | 23 | 22 |
Dividends declared to preferred unit holders | 107 | 138 |
Parent [Member] | ||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | 477 | 937 |
Adjustments to reconcile net income to net cash provided (used) by operating activities: | ||
Equity in undistributed net income of subsidiaries | (320) | (649) |
Depreciation | 27 | 26 |
Amortization of deferred loan fees | (258) | (438) |
Amortization of debt issuance costs | 85 | 114 |
Provision for loan losses | 666 | 262 |
Accretion of loan discount | (24) | (44) |
Gain on sale of loans | (13) | (136) |
Changes in: | ||
Accrued interest receivable | 31 | (85) |
Other assets | 179 | 80 |
Accrued interest payable | 41 | 35 |
Other liabilities | 97 | (57) |
Net cash provided by operating activities | 988 | 45 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Loan purchases | (2,721) | |
Loan originations | (15,486) | (29,917) |
Loan sales | 5,414 | 9,735 |
Loan principal collections | 17,817 | 15,784 |
Purchase of property and equipment | (13) | (18) |
Net cash provided (used) by investing activities | 5,011 | (4,416) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Change in NCUA borrowings | (4,977) | (4,834) |
Net change in notes payable | (696) | 8,532 |
Debt issuance costs | (92) | (121) |
Dividends paid on preferred units | (405) | (306) |
Net cash provided (used) by financing activities | (6,170) | 3,271 |
Net decrease in cash and restricted cash | (171) | (1,100) |
Cash, cash equivalents, and restricted cash at beginning of period | 8,783 | 9,883 |
Cash, cash equivalents, and restricted cash at end of period | 8,612 | 8,783 |
Supplemental disclosures of cash flow information | ||
Interest paid | 4,795 | 4,553 |
Income taxes paid | 23 | 14 |
Dividends declared to preferred unit holders | $ 107 | $ 138 |