Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 31, 2021shares | |
Document And Entity Information [Abstract] | |
Entity Registrant Name | MINISTRY PARTNERS INVESTMENT COMPANY, LLC |
Entity Central Index Key | 0000944130 |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Transition Report | false |
Entity File Number | 333-4028-LA |
Document Period End Date | Mar. 31, 2021 |
Document Fiscal Year Focus | 2021 |
Document Fiscal Period Focus | Q1 |
Current Fiscal Year End Date | --12-31 |
Amendment Flag | false |
Entity Incorporation, State or Country Code | CA |
Entity Tax Identification Number | 26-3959348 |
Entity Address, Address Line One | 915 West Imperial Highway |
Entity Address, Address Line Two | Suite 120 |
Entity Address, City or Town | Brea |
Entity Address, State or Province | CA |
Entity Address, Postal Zip Code | 92821 |
City Area Code | (714) |
Local Phone Number | 671-5720 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 146,522 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Assets: | ||
Cash and cash equivalents | $ 15,664 | $ 21,922 |
Restricted cash | 51 | 51 |
Certificates of deposit | 1,000 | 1,761 |
Loans receivable, net of allowance for loan losses of $1,509 and $1,516 as of March 31, 2021 and December 31, 2020, respectively | 112,338 | 116,121 |
Accrued interest receivable | 819 | 798 |
Investment in joint venture | 882 | 884 |
Property and equipment, net | 207 | 219 |
Foreclosed assets, net | 301 | 301 |
Servicing assets | 142 | 147 |
Other assets | 873 | 889 |
Total assets | 132,277 | 143,093 |
Liabilities: | ||
Term-debt | 36,086 | 51,516 |
Line of credit | 2,000 | |
Investor notes payable, net of debt issuance costs of $87 and $33 as of March 31, 2021 and December 31, 2020, respectively | 77,156 | 76,194 |
Accrued interest payable | 291 | 312 |
Other liabilities | 2,005 | 2,163 |
Total liabilities | 117,538 | 130,185 |
Members' Equity: | ||
Series A preferred units, 1,000,000 units authorized, 117,100 units issued and outstanding at March 31, 2021 and December 31, 2020 (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 March 31, 2021 and December 31, 2020; See Note 13 | 1,509 | 1,509 |
Accumulated equity (deficit) | 1,515 | (316) |
Total members' equity | 14,739 | 12,908 |
Total liabilities and members' equity | $ 132,277 | $ 143,093 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Consolidated Balance Sheets [Abstract] | ||
Loans receivable, allowance for loan losses | $ 1,509 | $ 1,516 |
Notes payable, debt issuance costs | $ 87 | $ 33 |
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 Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Interest income: | ||
Interest on loans | $ 1,868 | $ 2,179 |
Interest on interest-bearing accounts | 14 | 85 |
Total interest income | 1,882 | 2,264 |
Interest expense: | ||
Investor notes payable | 678 | 765 |
Other debt | 289 | 445 |
Total interest expense | 967 | 1,210 |
Net interest income | 915 | 1,054 |
Provision (credit) for loan losses | (7) | 52 |
Net interest income after provision (credit) for loan losses | 922 | 1,002 |
Non-interest income: | ||
Broker-dealer commissions and fees | 296 | 175 |
Other income | 57 | 81 |
Gain on debt extinguishment | 2,398 | |
Total non-interest income | 2,751 | 256 |
Non-interest expenses: | ||
Salaries and benefits | 914 | 782 |
Marketing and promotion | 211 | 8 |
Office occupancy | 44 | 45 |
Office operations and other expenses | 296 | 333 |
Foreclosed assets, net | 21 | 8 |
Legal and accounting | 132 | 121 |
Total non-interest expenses | 1,618 | 1,297 |
Income (loss) before provision for income taxes | 2,055 | (39) |
Provision for income taxes and state LLC fees | 5 | 5 |
Net income (loss) | $ 2,050 | $ (44) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $ 2,050 | $ (44) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation | 12 | 12 |
Amortization of deferred loan fees | (53) | (96) |
Amortization of debt issuance costs | 13 | 23 |
Provision (credit) for loan losses | (7) | 52 |
Accretion of loan discount | (6) | (10) |
Gain on sale of loans | (3) | (35) |
Gain on extinguishment of debt | (2,398) | |
Changes in: | ||
Accrued interest receivable | (21) | 11 |
Other assets | 30 | 69 |
Accrued interest payable | (21) | (30) |
Other liabilities | (177) | 1,077 |
Net cash provided (used) by operating activities | (581) | 1,029 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Loan originations | (4,065) | (12,393) |
Loan sales | 3,467 | 9,329 |
Loan principal collections | 4,443 | 6,774 |
Redemption (purchase) of certificates of deposit | 761 | (1,002) |
Net cash provided by investing activities | 4,606 | 2,708 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Principal payments on term debt | (13,032) | (1,272) |
Net change in line of credit balances | 2,000 | |
Net change in investor notes payable | 1,016 | 40 |
Debt issuance costs | (67) | (20) |
Dividends paid on preferred units | (200) | (237) |
Net cash (used) by financing activities | (10,283) | (1,489) |
Net increase (decrease) in cash and restricted cash | (6,258) | 2,248 |
Cash, cash equivalents, and restricted cash at beginning of period | 21,973 | 26,045 |
Cash, cash equivalents, and restricted cash at end of period | 15,715 | 28,293 |
Supplemental disclosures of cash flow information | ||
Interest paid | 988 | 1,240 |
Servicing assets recorded | 7 | 47 |
Leased assets obtained in exchange of new operating lease liabilities | 53 | |
Lease liabilities recorded | 53 | |
Dividends declared to preferred unit holders | $ 15 | $ 36 |
Nature of Business and Summary
Nature of Business and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
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 The Company was formed in California in 1991. The Company’s primary operations are financing commercial real property secured loans and providing investment advisory and insurance services and products for the benefit of evangelical churches, ministries, and individuals. The Company’s wholly-owned subsidiaries are: · Ministry Partners Funding, LLC, a Delaware limited liability company (“MPF”); · MP Realty Services, Inc., a California corporation (“MP Realty”); · Ministry Partners Securities, LLC, a Delaware limited liability company (“MP Securities”); and · Ministry Partners for Christ, Inc., a not-for-profit Delaware corporation (“MPC”). The Company formed MPF in 2007 and then deactivated the subsidiary on November 30, 2009. In December 2014, the Company reactivated MPF to enable it to serve as collateral agent for loans held as collateral for its Secured Investment Certificates. The Company formed MP Realty in November 2009, and obtained a license to operate as a corporate real estate broker through the California Department of Real Estate on February 23, 2010. MP Realty has conducted limited operations to date. The Company formed MP Securities on April 26, 2010 to provide investment and financial planning solutions for individuals, churches, charitable institutions, and faith-based organizations. MP Securities acts as the selling agent for the Company’s public and private placement notes. The Company formed MPC on December 28, 2018 to be used exclusively for religious and charitable purposes within the meaning of Section 501(c)(3) of the U.S. Internal Revenue Code of 1986. MPC is a not-for-profit corporation formed and organized as a private foundation under Delaware law that makes charitable grants to Christian education, and provides accounting, consulting, and financial expertise to aid evangelical Christian ministries. On August 23, 2019, the Internal Revenue Service granted MPC tax-exempt status as a private foundation under Section 501(c)(3) of the Internal Revenue Code. The MPC Board of Directors approved its first charitable grants during the year ended December 31, 2020. Principles of Consolidation The consolidated financial statements include the accounts of Ministry Partners Investment Company, LLC and its wholly owned subsidiaries. Management eliminates all significant inter ‑company balances and transactions in consolidation. Conversion to LLC Effective 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. The managers have full, exclusive, and complete discretion, power, and authority to oversee the management of Company affairs. As an LLC, the Company’s managers and members have entered into an Operating Agreement that governs the Company’s management structure and governance procedures. Risks and Uncertainties COVID-19, a global pandemic, has adversely impacted the broad economy, including most industries and sectors. The length and depth of the pandemic will ultimately determine the overall financial impact to the Company, but it could impair our borrowers' ability to meet their financial obligations to us. Furthermore, while there has been no material impact to the Company’s employees to date, COVID-19 could potentially create business continuity issues for the Company. In accordance with Financial Accounting Standards Board (FASB) and interagency regulatory guidance issued in March 2020, loans that are modified under the terms of our COVID-19 Deferral Assistance Program were not considered troubled debt restructurings to the extent that they met the terms of such guidance under Section 4013 of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). In addition, in response to COVID-19, the Federal Reserve reduced the Federal Funds rate to zero on March 16, 2020. The reduction in interest rates and other effects of the COVID-19 pandemic raise uncertainties that could negatively affect the Company’s net interest income and non-interest income. The Company’s operations are dependent upon the willingness and ability of its employees, borrowers, noteholders, and investment clients to conduct financial transactions. If the global response to contain COVID-19 results in reinstatement of lock-down or curtailment of activities orders, the Company could experience a material adverse effect on its business, financial condition, results of operations, and cash flows. While it is not possible to know the full extent that the impact of COVID-19, and resulting measures to curtail its spread will have on the Company’s operations, the Company is disclosing potentially material factors that could impact our business of which it is aware. Cash, and Cash Equivalents Cash equivalents include time deposits, certificates of deposit, and all highly liquid debt instruments with original maturities of three months or less. The Company had demand deposits and money market deposit accounts as of March 31, 2021 and December 31, 2020 . The National Credit Union Insurance Fund insures a portion of the Company’s cash held at credit unions, and the Federal Deposit Insurance Corporation insures a portion of cash held by the Company at other financial institutions. The Company holds cash deposits that may exceed insured limits. Management does not expect to incur losses in these cash accounts. The Company maintains cash accounts with Royal Bank of Canada Dain Rauscher (“ RBC Dain ”) as part of its clearing agreement, and with the Central Registration Depository (“ CRD ”) for regulatory purposes. The cash in these accounts is considered restricted cash and management classifies it as such on our balance sheet. Certificates of Deposit Certificates of deposit include investments in certificates of deposit held at financial institutions that carry original maturities of greater than three months. The Company had $1.0 million in certificates of various terms greater than three months as of March 31, 2021 . The Company had $1.8 million in certificates of deposit with original maturities of greater than three months at December 31, 2020. Details of certificates owned by the Company as of March 31, 2021 are as follows (dollars in thousands): Certificate Open Date Certificate Amount Interest Rate Maturity Date CD 1 1/13/2020 $ 1,000 2.25% 10/13/2021 Details of certificates owned by the Company as of December 31, 2020 are as follows (dollars in thousands): Certificate Open Date Certificate Amount Interest Rate Maturity Date CD 1 1/13/2020 $ 1,000 2.25% 10/13/2021 CD 2 4/1/2020 761 1.95% 1/1/2021 Use of Estimates The Company’s presentation of co nsolidated financial statements that conform to United States Generally Accepted Accounting Principles (“U.S. 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, foreclosed assets valuation, and the fair value of financial instruments. Actual results could differ from these estimates. Investments in Joint Venture In 2016, the Company entered into a joint venture agreement to develop and sell property we acquired as part of a Deed in Lieu of Foreclosure agreement reached with one of our borrowers. The joint venture owns a property located in Santa Clarita, California. On a periodic basis, management analyzes the Company’s investment in the joint venture for impairment. In this analysis, management compares the carrying value of the investment to the estimated value of the underlying real property. The Company records any impairment charges as a valuation allowance against the value of the asset. The Company’s share of income and expenses of the joint venture will increase or decrease the Company’s investment in the joint venture. Management records these valuation changes as realized gains or losses on investment on the Company’s consolidated statements of operations . Loans Receivable The Company reports loans that management has the intent and ability to hold for the foreseeable future at their outstanding unpaid principal balance adjusted for an allowance for loan losses, deferred loan fees and costs, and loan discounts. Interest Accrual on Loans Receivable The Company accrues loan interest income daily . Management defers loan origination fees and costs generated in making a loan. The Company amortizes these fees and costs as an adjustment to the related loan yield using the interest method. Loan discounts are interest accrued and unpaid which the Company added to loan principal balances when it restructured the loan. The Company does not accrete discounts to income on impaired loans. However, when management determines that a previously impaired loan is no longer impaired, the Company begins accreting loan discounts to interest income over the term of the restructured loan. For loans purchased from third parties, loan discounts also are the differences between the purchase price and the recorded principal balance of the loan. The Company accretes these discounts to interest income over the term of the loan using the interest method. Management considers a loan impaired if it concludes that the collection of principal or interest according to the terms of the loan agreement is doubtful . The Company stops the accrual of interest when management determines the loan is impaired. For loans that the Company places on nonaccrual status, management reverses all uncollected accrued interest against interest income . Management accounts for the interest on these loans on the cash basis or cost-recovery method until the loan qualifies for return to accrual status. It is not until all the principal and interest amounts contractually due are brought current and future payments are reasonably assured that the Company returns a loan to accrual status. Allowance for Loan Losses The Company sets aside an allowance for loan losses by charging the provision for loan losses account on the Company’s consolidated statements of income . This charge decreases the Company’s earnings. Management charges off the part of loan balances it believes it will not collect against the allowance. The Company credits subsequent recoveries, if any, to the allowance. Loan Portfolio Segments and Classes Management separates the loan portfolio into portfolio segments for purposes of evaluating the allowance for loan losses. A portfolio segment is defined as the level at which the Company develops and documents a systematic method for determining its allowance for loan losses. The Company segments the loan portfolio based on loan types and the underlying risk factors present in each loan type. Management periodically reviews and revises such risk factors, as it considers appropriate. The Company’s loan portfolio consists of one segment – church loans. Management has segregated the loan portfolio 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. Allowance for Loan Loss Evaluation Management evaluates the allowance for loan losses on a regular basis. The Company establishes the allowance for loan losses based upon its periodic review of several factors management believes influences the collectability of the loans, including: · the Company’s loss history; · the characteristics and volume of the loan portfolio; · adverse conditions that may affect the borrower’s ability to repay; · the estimated value of any secured collateral; and · the current economic conditions. This evaluation is subjective, as it requires estimates that are subject to significant revision as more information becomes available. The allowance consists of general and specific components. The general component covers non-classified loans. Management bases the general reserve on the Company’s loss history adjusted for qualitative factors. These qualitative factors are significant factors management considers likely to cause estimated credit losses associated with the Company’s existing portfolio to differ from its historical loss experience. Management adjusts these factors on an on-going basis, some of which include: · changes in lending policies and procedures, including changes in underwriting standards and collection; · changes in national, regional, and local economic and industry conditions that affect the collectability of the portfolio, including the effects of the pandemic; · 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 the collateral for collateral-dependent loans; and · the effect of credit concentrations. Loans that management has classified as impaired receive a specific reserve. For such loans, an allowance is established when the carrying value of that loan is higher than the amount management expects to collect. Management uses multiple approaches to determine the amount the Company expects to receive. These include the discounted cash flow method, using the loan’s underlying collateral value reduced by expected selling costs , or using the observable market price of the impaired loan. Impairment Analysis Impaired loans include non-accrual loans, loans 90 days or more past due and still accruing, and restructured loans. Non-accrual loans are loans on which management has discontinued interest accruals. Restructured loans are loans in which the Company has granted the borrower a concession due to financial distress. Concessions are usually a reduction of the interest rate or a change in the original repayment terms. The Company monitors impaired loans on an ongoing basis as part of management’s loan review and work out process. All loans in the loan portfolio are subject to impairment analysis. The Company reviews its loan portfolio monthly by examining several data points. These include reviewing delinquency reports, any new i nformation related to the financial condition of its borrowers, and any new appraisal or other collateral valuation . Through this process, the Company identifies potential impaired loans. Management generally deems a loan is impaired when current facts and circumstances indicate that it is probable that a borrower will be unable to make payments according to the loan agreement. If management has not already deemed a loan impaired, it will classify the loan as non-accrual when it becomes 90 days or more past due. Management considers several factors when determining impairment status. These factors include the loan’s payment status, the value of any secured collateral, and the probability of collecting scheduled payments when due. Management generally does not classify loans that experience minor payment delays or shortfalls as impaired. Management determines the significance of payment delays or shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower. These circumstances include the length and reasons for the delay, the borrower's payment history, and the amount of the shortfall in relation to the principal and interest owed. Management measures impairment on a loan-by-loan basis using one of three methods: · the present value of expected future cash flows discounted at the loan's effective interest rate; · the obtainable market price; or · the fair value of the collateral if the loan is collateral-dependent. 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, payment reduction, or reduction of accrued interest owed on the loan on a contingent or absolute basis. Management considers loans that it renews at below-market terms to be troubled debt restructurings if the below-market terms represent a concession due to the borrower’s troubled financial condition. The Company classifies troubled debt restructurings as impaired loans. For the loans that are not considered to be collateral-dependent, management measures troubled debt restructurings at the present value of estimated future cash flows using the loan's effective rate at origination of the loan. The Company reports the change in the present value of cash flows related to the passage of time as interest income. If the loan is considered to be collateral-dependent, impairment is measured based on the fair value of the collateral. In accordance with industry standards, the Company classifies a loan as impaired if management has modified it as part of a troubled debt restructuring. However, troubled debt restructures, upon meeting certain performance conditions, are eligible to receive non-classified loan ratings (pass or watch) and to be moved out of non-accrual status. These loans continue to be included in total impaired loans but not necessarily in non-accrual or collateral-dependent loans. Section 403 of the CARES Act provides that a qualifying loan modification or extension is exempt by law from classification as a troubled debt restructuring pursuant to FASB ASC 340-10. On April 7, 2020, the Office of the Comptroller of the Currency and related financial agencies issued OCC Bulletin 2020-35, which provides further guidance regarding when a loan modification or extension is not subject to classification as a TDR pursuant to FASB ASC 340-10. Under section 4013 of the CARES Act, financial institutions may elect not to categorize a loan modification as a troubled debt restructuring if it is (1) related to COVID-19; (2) executed on a loan that was not more than thirty (30) days past due as of December 31, 2019; and (3) executed between March 31, 2020, and the earlier of (A) sixty (60) days after the termination of the National Emergency or (B) December 31, 20 20. * The National Emergency regarding the COVID-19 pandemic was first declared effective March 1, 2020 under Proclamation 9994 by the President under the authority vested in the President by the Constitution and the laws of the United States of America, including sections 201 and 301 of the National Emergencies Act. As of the date of filing, the President under the same authority has continued the National Emergency indefinitely beyond March 1, 2021. For all other loan modifications, federal agencies that regulate financial institutions have confirmed with FASB that short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to relief being extended, would not be classified as a troubled debt restructuring. This treatment includes short-term modifications including payment deferrals, fee waivers, and extension of repayment terms. Loan Charge-offs Management charges off loans or portions thereof when it determines the loans or portions of the loans are uncollectible. The Company evaluates collectability periodically on all loans classified as “Loans of Lesser Quality.” Key factors management uses in assessing a loan’s collectability are the financial condition of the borrower, the value of any secured collateral, and the terms of any workout agreement between the Company and the borrower. In workout situations, the Company charges off the amount deemed uncollectible due to the terms of the workout, the inability of the borrower to make agreed upon payments, and the value of the collateral securing the loan. Credit Quality Indicators The Company has established a loan grading system to assist its management in analyzing and monitoring the loan portfolio. The Company classifies loans it considers lesser quality (“classified loans”) as watch, special mention, substandard, doubtful, or loss assets. 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 net worth and debt service capacity of the borrower or of any pledged collateral. These obligations, even if apparently protected by collateral value, have well-defined weaknesses related to adverse financial, managerial, economic, ministry, or environmental conditions which have clearly jeopardized repayment of principal and interest as originally intended. Furthermore, there is the possibility that some future loss will be sustained if such weaknesses are not corrected. Doubtful: This classification consists of loans that display the properties of substandard loans with the added characteristic that the severity of the weaknesses makes collection or liquidation in full highly questionable or improbable based upon currently existing facts, conditions, and values. The probability of some loss is very high, but because of certain important and reasonably specific factors, the amount of loss cannot be exactly determined. Such pending factors could include merger or liquidation, additional capital injection, refinancing plans, or perfection of liens on additional collateral. Loss: Loans in this classification are considered uncollectible and cannot be justified as a viable asset. This classification does not mean the loan has absolutely no recovery value, but that it is neither practical nor desirable to defer writing off this loan even though partial recovery may be obtained in the future. Revenue Recognition The Company recognizes two primary types of revenue: interest income and non-interest income. Interest Income The Company’s principal source of revenue is interest income from loans, which is not within the scope of ASU 2014-09, Revenue from Contracts with Customers and all subsequent amendments to the ASU (collectively, "ASC 606"). Refer to the discussion in “Loans Receivable” above to understand the Company’s recognition of interest income. Non-interest Income Non-interest income includes revenue from various types of transactions and services provided to customers. Contracts with customers can include multiple services, which are accounted for as separate “performance obligations” if they are determined to be distinct. Our performance obligations to our customers are generally satisfied when we transfer the promised good or service to our customer, either at a point in time or over time. Revenue from a performance obligation transferred at a point in time is recognized at the time that the customer obtains control over the promised good or service. Revenue from our performance obligations satisfied over time are recognized in a manner that depicts our performance in transferring control of the good or service, which is generally measured based on time elapsed, as our customers simultaneously receive and consume the benefit of our services as they are provided. Payment for the majority of our services is considered to be variable consideration, as the amount of revenues we expect to receive is subject to factors outside of our control, including market conditions. Variable consideration is only included in revenue when amounts are not subject to significant reversal, which is generally when uncertainty around the amount of revenue to be received is resolved. Wealth advisory fees Generally, management recognizes wealth advisory fees over time as the Company renders services to its clients. The Company receives these fees either based on a percentage of the market value of the assets under management, or as a fixed fee based on the services the Company provides to the client. The Company’s delivery of these services represents its related performance obligations. The Company typically collects the wealth advisory fees at the beginning of each quarter from the client’s acco unt. Management recognizes these fees ratably over the related billing period as the Company fulfills its performance obligation. In addition, management recognizes any commissions or referral fees paid related to this revenue ratably over the related billing period as the Company fulfills its performance obligation. Investment brokerage fees Investment brokerage fees arise from the selling, distribution, and trade execution services. The Company’s execution of these services fulfills its related performance obligations. The Company also offers sales and distribution services, and earns commissions through the sale of annuity and mutual fund products. The Company acts as an agent in these transactions and recognizes revenue at a point in time when the customer executes a contract with a product carrier. The Company may also receive trailing commissions and 12b-1 fees related to mutual fund and annuity products. Management recognizes this revenue in the period when it is earned, estimating the revenue if necessary based on the balance of the investment and the commission rate on the product. The Company earns and recognizes trade execution commissions on the trade date, which is when the Company fulfills its performance obligation. Payment for the trade execution is due on the settlement date. Lending Fees Lending fees represent charges earned for services we provide as part of the lending process, such as late charges, servicing fees, and documentation fees. The Company recognizes late charges as earned when they are paid. The Company recognizes revenue on other lending fees in the period in which the Company has performed the service. Gains on sales of loans receivable From time to time, the Company sells participation interests in loans receivable that it services. Upon completion of the loan sale, the Company recognizes a gain based on certain factors including the maturity date of the loan, the percentage of the loan sold and retained, and the servicing rate charged to the participant on the sold portion. Other non-interest income Other non-interest income includes fees earned based on service contracts the Company has entered into with credit unions. The Company recognizes the revenue monthly based on the terms of the contracts, which require monthly payments for services the Company performs. Gains/losses on sales of foreclosed assets The Company records a gain or loss from the sale of foreclosed assets when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. When the Company finances the sale of a foreclosed asset to the buyer, the Company assesses whether the buyer is committed to perform their obligation under the contract, whether collectability of the transaction price is probable, and the sufficiency of down payment, among other factors. Once these criteria are met, the foreclosed asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. In determining the gain or loss on the sale, the Company adjusts the transaction price and related gain (loss) on sale if a significant financing component is present. Foreclosed Assets Management records assets acquired through foreclosure or other proceedings at fair market value less estimated costs of disposal. Management determines the fair value at the date of foreclosure, which establishes a new cost for the asset. After foreclosure, the Company carries the asset at the lower of cost or fair value, less estimated costs of disposal. Management evaluates these real estate assets regularly to ensure that the recorded amount is supported by the current fair value and, if necessary, ensuring that valuation allowances reduce the carrying amount to fair value less estimated costs of disposal. Revenue and expense from the operation of the Company’s foreclosed assets and changes in the valuation allowance are included in net expenses from foreclosed assets. When the Company sells the foreclosed property, it recognizes a gain or loss on the sale equal to the difference between the net sales proceeds received and the carrying amount of the property. Transfers of Financial Assets Management accounts for transfers of financial assets as sales when the Company has surrendered control over the asset. Management deems the Company has surrendered control over transferred assets when: · the assets have been isolated from the Company; · the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred asset; and · the Company does not maintain effective control over the transferred asset through an agreement to repurchase it before its maturity. The Company, from time to time, sells participation interests in mortgage loans it has originated or acquired. 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: · each portion of a financial asset must represent a proportionate ownership interest in an entire financial asset; · from the date of transfer, all cash flows received from the entire financial asset must be divided proportionately among the participating interest holders in an amount equal to their respective share of ownership; · the transf |
Pledged Cash and Restricted Cas
Pledged Cash and Restricted Cash | 3 Months Ended |
Mar. 31, 2021 | |
Pledged Cash and Restricted Cash [Abstract] | |
Pledged Cash and Restricted Cash | Note 2: Pledged Cash and Restricted Cash Under the terms of its debt agreements, the Company has the ability to pledge cash as collateral for its bo rrowings . At March 31, 2021 and December 31, 2020 , 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 to the amounts reported in the statements of cash flows (dollars in thousands): March 31, December 31, 2021 2020 2020 Cash and cash equivalents $ 15,664 $ 28,242 $ 21,922 Restricted cash 51 51 51 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 15,715 $ 28,293 $ 21,973 Amounts included in restricted cash represent those required to be set aside with the CRD account with FINRA, as well as funds the Company has deposited with RBC Dain as clearing deposits. The Company may only use the CRD funds for certain fees charged by FINRA. These fees are to maintain the membership status of the Company or are related to the licensing of registered and associated persons of the Company. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 3: Related Party Transactions Transactions with Equity Owners Transactions with Evangelical Christian Credit Union (“ECCU”) The tables below summarize transactions the Company conducts with ECCU, the Company’s largest equity owner. Related party balances pertaining to the assets of the Company (dollars in thousands): March 31, December 31, 2021 2020 Total funds held on deposit at ECCU $ 2,928 $ 7,414 Loan participations purchased from and serviced by ECCU 253 256 Related party transactions of the Company (dollars in thousands): Three months ended March 31, 2021 2020 Interest earned on funds held with ECCU $ 1 $ — Interest income earned on loans purchased from ECCU 4 4 Loans sold to ECCU — 1,164 Fees paid to ECCU from MP Securities Networking Agreement 1 — Income from Successor Servicing Agreement with ECCU 2 2 Rent expense on lease agreement with ECCU 37 37 Loan participation interests purchased: In the past, the Company purchased loan participation interests from ECCU. Management negotiated the pass-through interest rates on these loans on a loan-by-loan basis. Management believes these negotiat ed terms were equivalent to those that would prevail in an arm's length transaction. The Company did not purchase any loans from ECCU during the three months ended March 31, 2021 and 2020 . Loans sold: From time to time, the Company may sell loans to ECCU. On January 23, 2020, the Company sold an impaired loan to ECCU in order to recoup its recorded investment in the loan. The Company did not sell any loans to ECCU during the three months ended March 31, 2021. 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 has entered into a Networking Agreement with ECCU pursuant to which MP Securities agreed to offer investment and insurance products and services to ECCU’s members that: (1) ECCU or its Board of Directors has approved; (2) comply with applicable investor suitability standards required by federal and state securities laws and regulations; (3) are offered in accordance with National Credit Union Administration (“ NCUA ”) rules and regulations; and (4) comply with its membership agreement with Financial Industry Regulation Authority (“ FINRA ”). Successor Servicing Agreement with ECCU: On October 5, 2016, the Company entered into a Successor Servicing Agreement with ECCU. This agreement obligat es the Company to serve as the successor loan-servicing agent for certain mortgage loans designated by ECCU. The Company will service these loans in the event ECCU requests that the Company assume its obligation to act as the servicing agent for those loans. The original Agreement terminated in October 2019, and has converted to a month-to-month agreement. Transactions with America’s Christian Credit Union (“ACCU”) The Company has several related party agreements with ACCU, one of the Company’s equity owners. The following describes the nature and dollar amounts of the material related party transactions with ACCU. Related party balances pertaining to the assets of the Company (dollars in thousands): March 31, December 31, 2021 2020 Total funds held on deposit at ACCU $ 5,852 $ 7,846 Related party transactions of the Company (dollars in thousands): Three months ended March 31, 2021 2020 Interest earned on funds held with ACCU $ 7 $ 39 Loans sold to ACCU 1,000 — Interest income earned on loans purchased from ACCU — 20 Fees paid based on MP Securities Networking Agreement with ACCU 17 11 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. MP Securities Networking Agreement with ACCU: MP Securities has entered into a Networking Ag reement with ACCU pursuant to which MP Secur ities has agreed to offer investment and insurance products and services to ACCU’s members that: (1) ACCU or its Board of Directors has approved; (2) comply with applicable investor suitability standards required by federal and state securities laws and regulations; (3) are offered in accordance with NCUA rules and regulations; and (4) comply with its membership agreement with FINRA. The agreement entitles MP Securities to pay ACCU a percentage of total revenue received by MP Securities from transactions conducted for or on behalf of ACCU members. Either ACCU or MP Securities may terminate the Networking Agreement without cause upon thirty days prior written notice. Transactions with Kane County Teachers Credit Union (“KCT”) Our Board Chairperson, R. Michael Lee, serves as the Chief Executive Officer and President of KCT. On January 13, 2020, the Company purchased $1.0 million of certificates of deposit from KCT. The certificates mature on October 13, 2021 and bear interest at a rate of 2.25% . On September 30, 2020, the Company entered into a Loan and Security Agreement with KCT Credit Union, an Illinois state chartered financial institution . The KCT line of credit is a $7.0 million short-term demand facility with a maturity date of September 30, 2021 . The line of credit will automatically renew for a one -year term unless either party furnishes written notice at least thirty (30) days prior to the maturity date that it does not intend to renew the agreement. The KCT line of credit is secured by certain mortgage loans held as collateral and the Company is required to maintain a minimum collateralization ratio of 120% measured by the outstanding balance of mortgage notes pledged as compared to the total amount owed on the line of credit. The KCT line of credit is evidenced by a promissory note, is payable one hundred twenty (120) days after each advance made or earlier in the event that collateral loan becomes more than sixty (60) days delinquent and the Company fails to cure such delinquency. The interest rate on the Note is set at prime plus 0.50% . At March 31, 2021, the prime rate was 3.25% . The Company approved the KCT line of credit in accordance with its Related Party Transaction Policy, concluded that the terms of the KCT line of credit were in the best interests of the Company, and entered into on terms no less favorable to the Company than could be obtained from an independent third party. As of March 31, 2021, there was $2.0 million in borrowings outstanding on the KCT line of credit. There was no outstanding balance as of December 31, 2020. MP Securities Networking Agreement MP Securities, the Company’s wholly-owned subsidiary, has entered into a Networking Agreement with KCT pursuant to which MP Securities agreed to offer investment and insurance products and services to KCT’s members that: (1) KCT or its Board of Directors has approved; (2) comply with applicable investor suitability standards required by federal and state securities laws and regulations; (3) are offered in accordance with NCUA rules and regulations; and (4) comply with its membership agreement with FINRA. The agreement entitles MP Securities to pay KCT a percentage of total revenue received by MP Securities from transactions conducted for or on behalf of KCT members. Either KCT or MP Securiti es may terminate the Networking Agreement without cause upon thirty days prior written notice. MP Securities paid $4 thousand in fees during the three months ended March 31, 2021 based on its Networking Agreement with KCT. It did not pay any fees during the three months ended March 31, 2020. Loan Participation Interest Sold Occasionally the C ompany sells loan participation interests to KCT in the normal course of business. The Company retains the right to service these participation loans sold to KCT, and it charges KCT a customary fee fo r servicing the loan. As of March 31, 2021, the Company services $1.1 million in loan participations that it has sold to KCT. 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. The Company has also entered into a Loan Participation Agreement with Navy Federal Credit Union (“ NFCU ”), an owner of both the Company’s Class A Common Units and Series A Preferred Units. Under this agreement, the Company sold NFCU a $5.0 million loan participation interest in one of its construction loans on March 20, 2020. As part of this agreement, the Company retained the right to service the loan, and it charges NFCU a fee for servicing the loan. Management believes the terms of the agreement are equivalent to those that prevail in arm's length transactions. F rom time to time, the Company may purchase a loan participation interest from a related party. The Company and its related party will negotiate in good faith the terms and conditions of such a purchase and in accordance with the Company’s related party procedures and governance practices. Each party must approve such a purchase after full disclosure of the related party transaction and must include terms and conditions that would normally be included in arm’s length transactions conducted by independent parties. Transactions with Subsidiaries The Company has entered into several agreements with its subsidiary, MP Securities. The Company eliminates the income and expense related to these agreements in the consolidated financial statements. MP Securities serves as the managing broker for the Company’s public and private placement note offerings. MP Securities receives compensation related to these broker dealer services ranging from 0.25% to 5.50% over the life of a note. The amount of the compensation depends on the length of the note and the terms of the offering under which MP Securities sold the note. The Company also has entered into an Administrative Services Agreement with MP Securities. The Administrative Services Agreement provides services such as the use of office space, use of equipment, including computers and phones, and payroll and personnel services. The agreement stipulates that MP Securities will provide ministerial, compliance, marketing, operational, and investor relations-related services in relation to the Company’s investor note program. As stated above, the Company eliminates all intercompany transactions related to this agreement in its consolidated financial statements. The Company’s subsidiary, MPF, serves as the collateral agent for the Company’s Secured Notes. The Company’s Prospectus for its Class 1A Notes and the private placement memorandum for the Company’s Secured Notes Offering describe the terms of these agreements. See, “Note 11. Investor Notes Payable” to Part I, Item I “Financial Information” of this Report. Related Party Transaction Policy The Board has adopted a Related Party Transaction Policy to assist in evaluating transactions the Company may enter into with a related party. Under this policy, a majority of the members of the Company’s Board and majority of its independent Board members must approve a material transaction that it enters into with a related party. As a result, all transactions that the Company undertakes with an affiliate or a related party are entered into on terms believed by management to be no less favorable than are available from unaffiliated third parties. In addition, a majority of the Company’s independent Board members must approve these transactions. 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 owned by related parties totaled $ 3 18 thousand and $316 thousand at March 31, 2021 and December 31, 2020 , respectively. |
Loans Receivable and Allowance
Loans Receivable and Allowance for Loan Losses | 3 Months Ended |
Mar. 31, 2021 | |
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. See “Note 1 – Loan Portfolio Segments and Classes” to Part I “Financial Information” of this Report. The loans fall into four classes: · 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. The Company makes all of its loans to various evangelical churches and related organizations, primarily to purchase, construct, or improve facilities. Loan maturities extend through 2033. The loan portfolio had a weighted average rate of 6.46% and 6.55% as of March 31, 2021 and December 31, 2020 , respectively. The table below is a summary of the Company’s mortgage loans owned (dollars in thousands): March 31, December 31, 2021 2020 Loans to evangelical churches and related organizations: Real estate secured $ 114,377 $ 118,203 Unsecured 139 144 Total loans 114,516 118,347 Deferred loan fees, net (442) (481) Loan discount (227) (229) Allowance for loan losses (1,509) (1,516) Loans, net $ 112,338 $ 116,121 Allowance for Loan Losses Management believes it has properly calculated the allowance for loan losses as of March 31, 2021 and December 31, 2020. The following table shows the changes in the allowance for loan losses for the three months ended March 31, 2021 and the year ended December 31, 2020 (dollars in thousands): Three months ended Year ended March 31, 2021 December 31, 2020 Balance, beginning of period $ 1,516 $ 1,393 Provision (credit) for loan loss (7) 188 Charge-offs — (65) Balance, end of period $ 1,509 $ 1,516 The table below presents loans by portfolio segment (church loans) and the related allowance for loan losses. In addition, the table segregates loans and the allowance for loan losses by impairment methodology (dollars in thousands). Loans and Allowance for Loan Losses (by segment) As of March 31, 2021 December 31, 2020 Loans: Individually evaluated for impairment $ 6,181 $ 6,181 Collectively evaluated for impairment 108,335 112,166 Balance $ 114,516 $ 118,347 Allowance for loan losses: Individually evaluated for impairment $ 290 $ 290 Collectively evaluated for impairment 1,219 1,226 Balance $ 1,509 $ 1,516 The Company has established a loan grading system to assist management in their analysis and supervision of the loan portfolio. The following tables summarize the credit quality indicators by loan class (dollars in thousands): Credit Quality Indicators (by class) As of March 31, 2021 Wholly-Owned First Wholly-Owned Junior Participation First Participation Junior Total Grade: Pass $ 80,252 $ 1,628 $ 199 $ — $ 82,079 Watch 24,288 1,715 253 — 26,256 Special mention — — — — — Substandard 5,677 — — — 5,677 Doubtful 504 — — — 504 Loss — — — — — Total $ 110,721 $ 3,343 $ 452 $ — $ 114,516 Credit Quality Indicators (by class) As of December 31, 2020 Wholly-Owned First Wholly-Owned Junior Participation First Participation Junior Total Grade: Pass $ 83,494 $ 1,789 $ 201 $ — $ 85,484 Watch 24,710 1,716 256 — 26,682 Special mention — — — — — Substandard 5,677 — — — 5,677 Doubtful 504 — — — 504 Loss — — — — — Total $ 114,385 $ 3,505 $ 457 $ — $ 118,347 The following table sets forth certain information with respect to the Company’s loan portfolio delinquencies by loan class and amount (dollars in thousands): Age Analysis of Past Due Loans (by class) As of March 31, 2021 30-59 Days Past Due 60-89 Days Past Due Greater Than 90 Days Total Past Due Current Total Loans Recorded Investment 90 Days or More and Still Accruing Church loans: Wholly-Owned First $ 7,581 $ — $ 3,971 $ 11,552 $ 99,169 $ 110,721 $ — Wholly-Owned Junior — — — — 3,343 3,343 — Participation First — — — — 452 452 — Participation Junior — — — — — — — Total $ 7,581 $ — $ 3,971 $ 11,552 $ 102,964 $ 114,516 $ — Age Analysis of Past Due Loans (by class) As of December 31, 2020 30-59 Days Past Due 60-89 Days Past Due Greater Than 90 Days Total Past Due Current Total Loans Recorded Investment 90 Days or More and Still Accruing Church loans: Wholly-Owned First $ 2,704 $ — $ 4,185 $ 6,889 $ 107,496 $ 114,385 $ — Wholly-Owned Junior — — — — 3,505 3,505 — Participation First — — — — 457 457 — Participation Junior — — — — — — — Total $ 2,704 $ — $ 4,185 $ 6,889 $ 111,458 $ 118,347 $ — Impaired Loans The following tables are summaries of impaired loans by loan class as of and for three months ended March 31, 2021 and 2020 , and the year ended December 31, 2020 , respectively. The unpaid principal balance reflects the contractual principal outstanding on the loan. Included in the balance of impaired loans are troubled debt restructurings that have been performing and have been upgraded to pass or watch since the date of the modification. The recorded balance reflects the unpaid principal balance less any interest payments that management has 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 March 31, 2021 For the three months ended March 31, 2021 Unpaid Principal Balance Recorded Balance Recorded Investment Related Allowance Average Recorded Investment Interest Income Recognized With no allowance recorded: Church loans: Wholly-Owned First $ 9,835 $ 9,770 $ 9,612 $ — $ 9,609 $ 91 Wholly-Owned Junior — — — — — — Participation First — — — — — — Participation Junior — — — — — — With an allowance recorded: Church loans: Wholly-Owned First 290 290 290 290 290 — Wholly-Owned Junior — — — — — — Participation First — — — — — — Participation Junior — — — — — — Total: Church loans $ 10,125 $ 10,060 $ 9,902 $ 290 $ 9,899 $ 91 Impaired Loans (by class) As of December 31, 2020 For the year ended December 31, 2020 Unpaid Principal Balance Recorded Balance Recorded Investment Related Allowance Average Recorded Investment Interest Income Recognized With no allowance recorded: Church loans: Wholly-Owned First $ 9,856 $ 9,791 $ 9,632 $ — $ 9,674 $ 357 Wholly-Owned Junior — — — — — — Participation First — — — — — — Participation Junior — — — — — — With an allowance recorded: Church loans: Wholly-Owned First 290 290 290 290 290 — Wholly-Owned Junior — — — — — — Participation First — — — — 296 11 Participation Junior — — — — — — Total: Church loans $ 10,146 $ 10,081 $ 9,922 $ 290 $ 10,260 $ 368 Impaired Loans (by class) As of March 31, 2020 For the three months ended March 31, 2020 Unpaid Principal Balance Recorded Balance Recorded Investment Related Allowance Average Recorded Investment Interest Income Recognized With no allowance recorded: Church loans: Wholly-Owned First $ 11,116 $ 11,055 $ 11,076 $ — $ 11,057 $ 109 Wholly-Owned Junior — — — — — — Participation First — — — — — — Participation Junior — — — — — — With an allowance recorded: Church loans: Wholly-Owned First 290 290 290 110 290 — Wholly-Owned Junior — — — — — — Participation First — — — — 296 11 Participation Junior — — — — — — Total: Church loans $ 11,406 $ 11,345 $ 11,366 $ 110 $ 11,643 $ 120 A summary of nonaccrual loans by loan class is as follows (dollars in thousands): Loans on Nonaccrual Status (by class) as of March 31, 2021 December 31, 2020 Church loans: Wholly-Owned First $ 6,181 $ 6,181 Wholly-Owned Junior — — Participation First — — Participation Junior — — Total $ 6,181 $ 6,181 Beginning in April, 2020, the Company has taken measures to assist borrowers adversely affected by COVID-19 by deferring principal and/or interest payments. The concessions granted meet the qualifications under Section 4013 of the CARES Act, and, as a result, the Company has elected not to account for these modifications as troubled debt restructurings. The Company granted concessions to 35 borrowers, representing an outstanding loan principal balance of $47.8 million. As of December 31, 2020, three loans with a total outstanding principal balance of $13.2 million were still in the deferral period. As of March 31, 2021, two loans with a total outstanding principal balance of $9.8 million were still in the deferral period. T here were no loan modifications made during the three months ended March 31, 2021 that qualified as troubled debt restructurings. A summary of loans the Company restructured during the three month period ended March 31, 2020 is as follows (dollars in thousands): Troubled Debt Restructurings (by class) For the three months ended March 31, 2020 Number of Loans Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Recorded Investment At Period End Church loans: Wholly-Owned First 1 $ 1,936 $ 1,955 $ 1,947 Wholly-Owned Junior — — — — Participation First — — — — Participation Junior — — — — Total 1 $ 1,936 $ 1,955 $ 1,947 The Company h as one restructured loan that is pas t maturity as of March 31, 2021 . The Company has entered into a forbearance agreement with the borrower and is evaluating what actions it should undertake to protect its investment on this loan. The Company closely monitors delinquency in loans modified in a troubled debt restructuring as an early indicator for future default. Management regularly evaluates loans modified in a troubled debt restructuring for potential further impairment and will make adjustments to the risk ratings and specific reserves associated with troubled debt restructurings as deemed necessary. As of March 31, 2021 , the Company has no commitments to advance additional funds in connection with loans modified as troubled debt restru cturings . |
Investments in Joint Venture
Investments in Joint Venture | 3 Months Ended |
Mar. 31, 2021 | |
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 ”). The Valencia Hills Project is a joint venture that will develop and market property formerly classified by the Company as a foreclosed asset. In January 2016, the Company transferred ownership in the foreclosed asset to the Valencia Hills Project. In addition, the Company reclassified the carrying value of the property from foreclosed assets to an investment in a joint venture. The Company’s initial investment in the joint venture was $900 thousand. This amount was the carrying value in the foreclosed asset at December 31, 2015. As of March 31, 2021 and December 31, 2020 , the value of the Company’s investment in the joint venture was $ 882 thousand and $ 884 thousand , respectively. Management’s impairment analysis of the investment as of March 31, 2021 has determined that the investment is not impaire d. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2021 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | Note 6: Revenue Recognition The Company recognizes two primary types of revenue: interest income and non-interest income. The following tables reflect the Company’s non-interest income disaggregated by financial statement line item. Items outside of the scope of ASC 606 are noted as such (dollars in thousands): Three months ended March 31, 2021 2020 Non-interest income, in scope Broker-dealer fees and commissions $ 296 $ 175 Gains on loan sales 3 35 Lease income — 13 Gain on debt extinguishment 2,398 — Other non-interest income 2 2 Non-interest income, out of scope Lending fees 52 31 Total non-interest income $ 2,751 $ 256 In accordance with our accounting policies as governed by ASC 606, Revenue from Contracts with Customers, the following table separates revenue from contracts with customers into categories that are based on the nature, amount, timing, and uncertainty of revenue and cash flows associated with each product and distribution channel. Non-interest revenue earned by the Company’s broker-dealer subsidiary, MP Securities, comprises security commissions, sale of investment company shares, insurance product revenue, and advisory fee income. Security commission revenue represents the sale of over-the-counter stock, unit investment trusts, and variable annuities. The revenue earned from the sale of these products is recognized upon satisfaction of performance obligations, which occurs on the trade date and is considered transactional revenue. The Company also earns revenue from the management of invested assets, which is recognized monthly, as earned, based on the average asset value, and is referred to as Assets Under Management revenue (“ AUM ”). (dollars in thousands) Three months ended March 31, 2021 Transactional AUM Total Broker-dealer revenue Security commissions $ 57 $ 13 $ 70 Sale of investment company shares 14 22 36 Other insurance product revenue 101 12 113 Advisory fee income — 77 77 Total broker-dealer revenue $ 172 $ 124 $ 296 (dollars in thousands) Three months ended March 31, 2020 Transactional AUM Total Broker-dealer revenue Security commissions $ 4 $ 5 $ 9 Sale of investment company shares 14 20 34 Other insurance product revenue 3 10 13 Advisory fee income 3 116 119 Total broker-dealer revenue $ 24 $ 151 $ 175 |
Loan Sales
Loan Sales | 3 Months Ended |
Mar. 31, 2021 | |
Loan Sales [Abstract] | |
Loan Sales | Note 7: Loan Sales A summary of loan participation sales and servicing assets are as follows (dollars in thousands) : For the Three months ended Year ended March 31, December 31, 2021 2020 2020 Loan participation interests sold by the Company $ 3,467 $ 8,165 $ 17,106 Total participation interests sold and serviced by the Company 40,695 33,084 37,962 Servicing income 44 28 143 Servicing Assets Balance, beginning of period $ 147 $ 100 $ 100 Additions: Servicing obligations from sale of loan participations 7 47 99 Subtractions: Amortization (12) (16) (52) Balance, end of period $ 142 $ 131 $ 147 During the year ended December 31, 2020, the Company sold to ACCU two participations in loans it had previously purchased from ACCU. These participations totaled $1.6 million. During the year ended December 31, 2020, the Company sold back to ECCU one participation in a loan it had previously purchased from ECCU. This participation totaled $ 1.2 million. |
Foreclosed Assets
Foreclosed Assets | 3 Months Ended |
Mar. 31, 2021 | |
Foreclosed Assets [Abstract] | |
Foreclosed Assets | Note 8: Foreclosed Assets The Company’s investment in foreclosed assets consisted of one property that was valued at $301 thousand at March 31, 2021 and December 31, 2020 . There was no allowance for losses on foreclosed assets a t March 31, 2021 and December 31, 2020 . The Company did not record any provision for losses on foreclosed assets during the three months ended March 31, 2021 and March 31, 2020 . Expenses and income applicable to foreclosed assets include the following (dollars in thousands): Foreclosed Asset Expenses (Income) For the three months ended March 31, 2021 2020 Net loss (gain) on sale of real estate $ — $ — Provision for losses — — Operating expenses, net of income 21 8 Net expense (income) $ 21 $ 8 |
Premises and Equipment
Premises and Equipment | 3 Months Ended |
Mar. 31, 2021 | |
Premises and Equipment [Abstract] | |
Premises and Equipment | Note 9: Premises and Equipment The table below summarizes our premises and equipment (dollars in thousands): As of March 31, December 31, 2021 2020 Furniture and office equipment $ 521 $ 521 Computer system 214 214 Leasehold improvements 43 43 Total premises and equipment 778 778 Less accumulated depreciation and amortization (571) (559) Premises and equipment, net $ 207 $ 219 2021 2020 Depreciation and amortization expense for the three months ended March 31, $ 12 $ 12 |
Credit Facilities
Credit Facilities | 3 Months Ended |
Mar. 31, 2021 | |
Credit Facilities and Investor Notes Payable [Abstract] | |
Credit Facilities | Note 10: Credit Facilities The Company has one secured term-debt credit facility. The facility is non-revolving and does not have an option to renew or extend additional credit. Additionally, the facility does not contain a prepayment penalty. Under the terms of the credit facility, the Company must maintain a minimum collateralization ratio of at least 120% . If at any time the Company fails to maintain its required minimum collateralization ratio, it will be required to deliver cash or qualifying mortgage loans in an amount sufficient to enable us to meet its obligation to maintain a minimum collateralization ratio. The collateral securing the facility at March 31, 2021 and December 31, 202 0 satisfied the 120% minimum. As of March 31, 2021 , the Company has only pledged qualifying mortgage loans as collateral on the credit facility. In addition, the credit facility includes a number of borrower covenants. The Company is in compliance with these covenant s as of March 31, 2021 and December 31, 2020 . O n March 5, 2021, the Co mpany made a $14.3 m i l lion principal payment on this facility and realized a $2.3 million gain on the extinguishment of debt as a result of this payment. The Company was in compliance with the borrower covenants at the time of the payment. Previously, the Company had an additional term-debt credit facility that carried the same terms as the facility it currently has. On Septe mber 25, 2020, the Company reached an agreement with the note holder to pay off the entire outstanding contractual principal balance of $15.0 million. The Company realized a $2.4 million gain on the extinguishment of debt because of this agreement. The Company was in compliance with its covenants and its minimu m collateralization ratio on the facility at the time of the payoff. On April 27, 2020, MP S ecurities applied for and received a Paycheck Protection Program loan (“ PPP Loan ”) granted under the CARES Act. According to the terms of the program, as administered by the Small Business Association ( “SBA” ), payments on the loan were deferred, deferred interest was c apitalized into the principal balance of the loan, and qualifying amounts of the principal balance of the loan and deferred interest were eligible to be forgiven if MP Se curiti es retai ned employees and mainta ined salary levels for its existing employees. On March 5, 2021, the SBA forgave all principal and accrued interest due on this loan. On September 30, 2020, Ministry Partners Investment Company, LLC, entered into a Loan and Security Agreement with KCT Credit Union, an Illinois state chartered financial institution (“CUSO LOC”). The CUSO LOC is a revolving $7.0 milli on short-term demand credi t facility with a one -year maturity date of September 30, 202 1 . The facility carried an outstanding balance of $2.0 million at March 31, 2021 . The interest rate on the facility is equal to the United States Prime Rate plus 0.50% . The interest rate was 3.75% on March 31, 2021 . The CUSO LOC will au tomatically renew for one additional one-year term unless either party furnishes writ ten notice at least thirty ( 30 ) day s prior to the termination date that it does not intend to renew the agreement. The Company may draw funds on the CUSO LOC at any time until the line is fully drawn. However, the Company may only use the CUSO LOC to warehouse loans until they are sold . Repayment of each advance is due one hundred and twenty ( 120 ) days after the advance is made or earlier in the event that a collateral loan becomes more than sixty ( 60 ) days delinquent and the Company fails to cure such deficiency. To secure its obligations under the CUSO LOC, the Company has agreed to grant a priority first lien and security interest in certain of its mortgage loan investments and maintain a minimum collateralization ratio measured by taking outstanding balance of mortgage notes pledged under the facility as compared to the total amount of principal owed on the CUSO LO C. The minimum ratio must equal at least 120% . The CUSO LOC contains typical affirmative covenants f or a credit facility of this nature. The Company was in compli ance with these coven ants at March 31, 2021 . A total of $6.6 million and $7.2 million in loans were pledged on this facility as of March 31, 2021 and December 31, 2020, respectively. March 31, 2021 : Nature of Borrowing Interest Rate Interest Rate Type Amount Outstanding Monthly Payment Maturity Date Amount of Loan Collateral Pledged Amount of Cash Pledged Term Loan 2.525% Fixed $ 36,086 $ 450 11/1/2026 $ 58,274 $ — Line of Credit 3.750% Variable 2,000 — 9/30/2021 8,881 — Future principal contractual payments of the Company’s borrowings from financial institutions during the twelve-month periods ending March 31, are as follows (dollars in thousands): 2022 $ 6,466 2023 4,661 2024 4,778 2025 4,902 2026 5,026 Thereafter 12,253 $ 38,086 |
Investor Notes Payable
Investor Notes Payable | 3 Months Ended |
Mar. 31, 2021 | |
Credit Facilities and Investor Notes Payable [Abstract] | |
Investor Notes Payable | Note 11: Investor Notes Payable The table below provides information on the Company’s investor notes payable (dollars in thousands): As of As of March 31, 2021 December 31, 2020 SEC Registered Public Offerings Offering Type Amount Weighted Average Interest Rate Amount Weighted Average Interest Rate Class 1 Offering Unsecured $ 7,997 4.01 % $ 9,010 3.94 % Class 1A Offering Unsecured 43,596 3.28 % 48,982 3.16 % 2021 Class A Offering Unsecured 6,758 2.74 % — — % Public Offering Total $ 58,351 3.32 % $ 57,992 3.28 % Private Offerings Offering Type Subordinated Notes Unsecured $ 12,676 4.23 % $ 11,655 4.49 % Secured Notes Secured 6,216 4.05 % 6,580 3.99 % Private Offering Total $ 18,892 4.17 % $ 18,235 4.31 % Total Investor Notes Payable $ 77,243 3.53 % $ 76,227 3.53 % Investor Notes Payable Totals by Security Offering Type Unsecured Total Unsecured $ 71,027 3.48 % $ 69,647 3.48 % Secured Total Secured 6,216 4.05 % 6,580 3.99 % Future maturities for the Company’s investor notes during the twelve-month periods ending March 31, are as follows (dollars in thousands): 2022 $ 29,720 2023 8,901 2024 10,233 2025 5,645 2026 22,744 $ 77,243 Debt issuance costs related to the Company’s investor notes payable were $87 thousand and $33 thousand at March 31, 2021 and December 31, 2020 , respectively. The notes are payable to investors who have purchased the securities. Notes pay interest at stated spreads over an index rate. The investor may reinvest the interest or have the interest paid to them at their option. The Company may repurchase all or a portion of notes at any time at its sole discretion. In addition, the Company may allow investors to redeem their notes prior to maturity at its sole discretion. SEC Registered Public Offerings Class 1 Offering. In January 2015, the Company registered its Class 1 Notes with the SEC. The Company discontinued the sale of its Class 1 Note Offering when it expired on December 31, 2017. 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 is in compliance with these covenants as of March 31, 2021 and December 31, 2020 . The Company issued The Class 1 Notes 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 variable index in effect on the date the interest rate is set determines the interest rate paid on a Variable Series Note. The CMT Index refers to the Constant Maturity Treasury rates published by the U.S. Department of Treasury for actively traded Treasury securities. The variable index is equal to the 3-month LIBOR rate. The Company issued the Class 1A Notes under a Trust Indenture entered into between the Company and U.S. Bank. 2021 Class A Offering. In January 2021, the Company launched its 2021 Class A Notes Offering. Pursuant to a Registration Statement declared effective on January 8, 2021, the Company registered $125 million of its 2021 Class A Notes in two series – fixed and variable notes. The 2021 Class A Notes are unsecured. Like the Class 1A Notes Offering, the interest rate paid on the Fixed Series Notes is determined in reference to a CMT Index published by the U.S. Department of Treasury in effect on the date that the note is issued plus a rate spread as described in the Company’s 2021 Class A Prospectus. The variable index in effect on the date the interest rate is set determines the interest rate paid on a Variable Series Note. The CMT Index refers to the Constant Maturity Treasury rates published by the U.S. Department of Treasury for actively traded Treasury securities. The variable index is equal to the 3-month LIBOR rate. The Company issued the 2021 Class A Notes under a Trust Indenture entered into between the Company and U.S. Bank. Private Offerings Series 1 Subordinated Capital Notes (“Subordinated Notes”). In June 2018, the Company renewed the offer and sale of its Subordinated Notes initially launched in February 2013. The Company offers the notes pursuant to a limited private offering to qualified investors that meet the requirements of Rule 506 of Regulation D. The Company offers the Subordinated Notes with maturity terms from 12 to 60 months at an interest rate fixed on the date of issuance, as determined by the then current seven -day 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 it can sell, restrictions on mergers and acquisitions, and proper maintenance of books and records. The Company was in compliance with these covenants at March 31, 2021 and December 31, 2020 . Secured Investment Certificates (“Secured Notes”). In January 2015, the Company began offering Secured Notes under a private placement memorandum pursuant to the requirements of Rule 506 of Regulation D. Under this offering, the Company is authorized to offer up to $80.0 million in Secured Notes to qualified investors. On December 31, 2017, the Company terminated its 2015 Secured Note offering. Effective as of April 30, 2018, the Company launched a new $80 million secured note offering. The Company issued the 2018 Secured Note offering pursuant to a Loan and Security Agreement. This agreement includes the same terms and conditions previously set forth in its 2015 Secured Note offering. The 2018 Secured Note offering terminated on April 30, 2020. The Company secures these notes by pledging either cash or loans receivable as collateral. The collateralization ratio is 100% on the pledged cash and 105% on the pledged loans receivable. Said another way, every dollar of cash collateralizes one dollar of secured notes and every $1.05 of loans receivable collateralizes one dollar of secured notes. At March 31, 2021 and December 31, 2020 , the loans receivable collateral securing the Secured Notes had an outstanding balance of $ 9.0 million and $ 9.1 million, respectively. The March 31, 2021 and December 31, 2020 collateral balances were sufficient to satisfy the minimum collateral requirement of the Secured Notes offering. As of March 31, 2021 and December 31, 2020 , the Company did not have cash pledged for the benefit of the Secured Notes . |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 12: Commitments and Contingencies Unfunded Commitments The Company is a party to credit-related financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include un-advanced lines of credit and standby letters of credit. Such commitments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the balance sheet. The contractual amount of these commitments represents the Company’s exposure to credit loss. The Company uses the same credit policies in making commitments as it does for on-balance-sheet instruments. The table below shows the outstanding financial instruments whose contract amounts represent credit risk (dollars in thousands): Contract Amount at: March 31, 2021 December 31, 2020 Undisbursed loans $ 3,638 $ 2,774 Undisbursed loans are commitments for possible future extensions of credit to existing customers. These loans are sometimes unsecured and the borrower may not necessarily draw upon the line the total amount of the commitment. Commitments to extend credit are generally at variable rates. Operating Leases The Company has lease agreements for its offices in Brea and Fresno, California. The Company renewed its Brea office lease in January 2019 for an additional five -year term. The lease does not contain any additional options to renew. The Fresno office lease expires in March 2022. There are no options to renew in the lease agreement. The Company has determined that both leases are op erating leases. The Company used its incremental borrowing rates to determine the discount rates used in the asset calculations . The table below presents information regarding our existing operating leases (dollars in thousands): Three months ended Year ended March 31, December 31, 2021 2020 2020 Lease cost Operating lease cost $ 43 $ 44 $ 174 Other information Cash paid for operating leases 43 42 169 Right-of-use assets obtained in exchange for operating lease liabilities — 53 53 Weighted average remaining lease term (in years) 2.42 3.32 2.87 Weighted-average discount rate 4.65 % 4.61 % 4.64 % Future minimum lease payments and lease costs for the twelve months ending March 31, are as follows (dollars in thousands): Lease Payments Lease Costs 2022 $ 175 $ 174 2023 151 146 2024 116 110 Total $ 442 $ 430 |
Preferred and Common Units Unde
Preferred and Common Units Under LLC Structure | 3 Months Ended |
Mar. 31, 2021 | |
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 and have no voting rights. They are also subject to redemption in whole or in part at the Company’s election on December 31 of any year for an amount equal to the liquidation preference of each unit, plus any accrued and declared but unpaid quarterly dividends and preferred distributions on such units. The Series A Preferred Units have priority as to earnings and distributions over the Common Units. The resale of the Company’s Series A Preferred Units and Common Units are subject to the Company’s first right of refusal to purchase units proposed to be transferred. Upon the Company’s failure to pay quarterly dividends for four consecutive quarters, the holders of the Series A Preferred Units have the right to appoint two managers to 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 | 3 Months Ended |
Mar. 31, 2021 | |
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 three months ended March 31, 2021 and 2020 were $22 thousand and $26 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 Company’s Board of Managers determines the amount annually contributed on behalf of each qualified employee. The Company determines the amount by calculating it as a percentage of the eligible employee's annual earnings. Plan forfeitures are used to reduce the Company’s annual contribution. The Company did not make or approve a profit sharing contribution for the three months ended March 31, 2020 . |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | Note 15: Fair Value Measurements Fair Value Measurements Using Fair Value Hierarchy The Company classifies measurements of fair value within a hierarchy based upon inputs that give the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows: · Level 1 inputs are quoted prices (unadjusted) for identical assets or liabilities in active markets. · Level 2 inputs include: o quoted prices for similar assets and liabilities in active markets, o quoted prices for identical assets and liabilities in inactive markets, o inputs that are observable for the asset or liability (such as interest rates, prepayment speeds, credit risks, etc.); o 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 March 31, 2021 using Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value FINANCIAL ASSETS: Cash and restricted cash $ 15,715 $ 15,715 $ — $ — $ 15,715 Certificates of deposit 1,000 1,011 1,011 Loans, net 112,338 — — 111,032 111,032 Investment in joint venture 882 — — 882 882 Accrued interest receivable 819 — — 819 819 FINANCIAL LIABILITIES: Term-debt $ 36,086 $ — $ — $ 31,033 $ 31,033 Line of credit 2,000 — — 2,000 2,000 Investor notes payable 77,156 — — 78,567 78,567 Other financial liabilities 510 — — 510 510 Fair Value Measurements at December 31, 2020 using Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value FINANCIAL ASSETS: Cash and restricted cash $ 21,973 $ 21,922 $ — $ — $ 21,922 Certificates of deposit 1,761 — 1,779 — 1,779 Loans, net 116,121 — — 115,477 115,477 Investment in joint venture 884 — — 884 884 Accrued interest receivable 798 — — 798 798 FINANCIAL LIABILITIES: Term-debt $ 51,516 $ — $ — $ 43,832 $ 43,832 Investor notes payable 76,194 — — 78,262 78,262 Other financial liabilities 513 — — 513 513 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 March 31, 2021 and December 31, 2020 . The Company used the following methods and assumptions to estimate the fair value of financial instruments: Cash – The carrying amounts reported in the balance sheets approximate fair value for cash. Certificates of deposit – Management estimates fair value by using a present value discounted cash flow with a discount rate approximating the current market rate for similar assets. Management classifies certificates of deposits as Level 2 of the fair value hierarchy. Loans – Management estimates fair value by discounting the future cash flows of the loans. The discount rate the Company uses is the current average rates at which it would make loans to borrowers with similar credit ratings and for the same remaining maturities. Investments – Management estimates fair value by analyzing the operations and marketability of the underlying investment to determine if the investment is other-than-temporarily impaired. Investor Notes Payable – Management estimates the fair value of fixed maturity notes by discounting the future cash flows of the notes. The discount rate the Company uses is the rates currently offered for investor notes payable of similar remaining maturities. Company management estimates the discount rate by using market rates that reflect the interest rate risk inherent in the notes. Term-debt – Management estimates the fair value of borrowings from financial institutions discounting the future cash flows of the borrowings. The discount rate the Company uses is the current incremental borrowing rates for similar types of borrowing arrangements. Off-Balance Sheet Instruments – Management determines the fair value of loan commitments on fees currently charged to enter into similar agreements, taking into account the remaining term of the agreements and the counterparties' credit standing. The fair value of loan commitments is insignificant at March 31, 2021 and December 31, 2020 . Fair Value Measured on a Nonrecurring Basis The Company measures certain assets at fair value on a nonrecurring basis. On these assets, the Company only makes fair value adjustments in certain circumstances (for example, when there is evidence of impairment). The following table presents the fair value of assets measured on a nonrecurring basis (dollars in thousands): Fair Value Measurements Using: Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets at March 31, 2021: Collateral-dependent loans (net of allowance and discount) $ — $ — $ 5,815 $ 5,815 Investment in joint venture — — 882 882 Foreclosed assets (net of allowance) — — 301 301 Total $ — $ — $ 6,998 $ 6,998 Assets at December 31, 2020: Collateral-dependent loans (net of allowance and discount) $ — $ — $ 5,815 $ 5,815 Investments in joint venture — — 884 884 Foreclosed assets (net of allowance) — — 301 301 Total $ — $ — $ 7,000 $ 7,000 Impaired Loans The Company measures impaired loans at fair value on a nonrecurring basis. Once a loan is considered impaired, the fair value is measured using one of several methods, including collateral liquidation value, the market value of similar debt, or discounted cash flows. Most often management uses the fair value of the underlying real estate collateral to value impaired loans. Such fair values are obtained using independent appraisals, which the Company considers to be Level 3 inputs. Foreclosed Assets The Company initially records real estate acquired through foreclosure or other proceedings (foreclosed assets) at fair value at the date of foreclosure less estimated costs of disposal, which establishes a new cost. After foreclosure, management periodically performs valuations on foreclosed assets. The company carries foreclosed assets held for sale at the lower of cost or fair value, less estimated costs of disposal. The fair values of real properties initially are determined based on appraisals. In some cases, management adjusts 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 or in the collateral. The Company makes subsequent valuations of the real properties based either on management estimates or on updated appraisals. If management makes significant adjustments to appraised values based on unobservable inputs, the Company categorizes foreclosed assets under Level 3. Otherwise, if management bases the foreclosed assets’ value on recent appraisals and the only adjustments made are for known contractual selling costs, the Company will categorize the foreclosed assets under Level 2. T he table below summarizes the valuation methodologies used to measure the fair value adjustments for Level 3 assets recorded at fair value on a nonrecurring basis (dollars in thousands): March 31, 2021 Assets Fair Value (in thousands) Valuation Techniques Unobservable Input Range (Weighted Average) Impaired Loans $ 5,815 Discounted appraised value Selling cost / Estimated market decrease 21% - 81% ( 23% ) Investment in joint venture 882 Internal evaluations Estimated future market value 0% ( 0% ) Foreclosed Assets 301 Internal evaluations Selling cost 6% ( 6% ) December 31, 2020 Assets Fair Value (in thousands) Valuation Techniques Unobservable Input Range (Weighted Average) Impaired loans $ 5,815 Discounted appraised value Selling cost / Estimated market decrease 21% - 81% ( 23% ) Investments in joint venture 884 Internal evaluations Estimated future market value 0% ( 0% ) Foreclosed assets 301 Internal evaluations Selling cost 6% ( 6% ) |
Income Taxes and State LLC Fees
Income Taxes and State LLC Fees | 3 Months Ended |
Mar. 31, 2021 | |
Income Taxes and State LLC Fees [Abstract] | |
Income Taxes and State LLC Fees | Note 16: Income Taxes and State LLC Fees MPIC is subject to a California gross receipts LLC fee of approximately $12,000 per year, and the state minimum franchise tax of $800 per year. MP Securities is subject to a California gross receipts LLC fee of approximately $6,000 and the state minimum franchise tax of $800 per year. MP Realty incurred a tax loss for the years ended December 31, 2020 and 2019 , and recorded a provision of $800 per year for the state minimum franchise tax. For the years ended December 31, 2020 and 2019 , MP Realty has federal and state net operating loss carryforwards of approximately $430 thousand and $423 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 March 31, 2021 and December 31, 2020 . Tax years ended December 31, 2017 through December 31, 20 20 remain subject to examination by the Internal Revenue Service and the tax years ended December 31, 2016 through December 31, 20 20 remain subject to examination by the California Franchise Tax Board and various other state jurisdictions. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2021 | |
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. The Company has two reportable segments that represent the primary businesses reported in the consolidated financial statements: the finance company (the parent company), and the investment advisor and insurance firm (MP Securities). The finance company segment uses funds from the sale of debt securities, income from operations, and the sale of loan participations to originate or purchase mortgage loans. The finance company also services loans. MP Securities generates fee income by selling debt securities and other investment and insurance products, as well as providing investment advisory and financial planning services. The accounting policies applied to determine the segment information are the same as those described in the summary of significant accounting policies. Management accounts for intersegment revenues and expenses at amounts that assume the Company entered into the transaction with unrelated third parties at the current market prices at the time of the transaction. Management evaluates the performance of each segment based on net income or loss before provision for income taxes and LLC fees. Financial information with respect to the reportable segments for the three months ended March 31, 2021 is as follows (dollars in thousands): Three months ended March 31, 2021 Finance Company Broker Dealer Other Segments Adjustments / Eliminations Total Revenue from external sources $ 4,225 $ 408 $ — $ — $ 4,633 Revenue from internal sources — 261 — (261) — Total non-interest expense and provision for tax 1,252 370 — — 1,622 Net profit (loss) 1,762 299 — (11) 2,050 Total assets 128,561 3,370 456 (110) 132,277 Financial information with respect to the reportable segments for the three months ended March 31, 2020 is as follows (dollars in thousands): Three months ended March 31, 2020 Finance Company Broker Dealer Other Segments Adjustments / Eliminations Total Revenue from external sources $ 2,339 $ 181 $ — $ — $ 2,520 Revenue from internal sources — 219 — (219) — Total non-interest expense and provision for tax 960 342 — — 1,302 Net profit (loss) (197) 58 — 95 (44) Total assets 154,610 2,601 371 (24) 157,558 |
Nature of Business and Summar_2
Nature of Business and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Nature of Business and Summary of Significant Accounting Policies [Abstract] | |
Nature of Business | Nature of Business The Company was formed in California in 1991. The Company’s primary operations are financing commercial real property secured loans and providing investment advisory and insurance services and products for the benefit of evangelical churches, ministries, and individuals. The Company’s wholly-owned subsidiaries are: · Ministry Partners Funding, LLC, a Delaware limited liability company (“MPF”); · MP Realty Services, Inc., a California corporation (“MP Realty”); · Ministry Partners Securities, LLC, a Delaware limited liability company (“MP Securities”); and · Ministry Partners for Christ, Inc., a not-for-profit Delaware corporation (“MPC”). The Company formed MPF in 2007 and then deactivated the subsidiary on November 30, 2009. In December 2014, the Company reactivated MPF to enable it to serve as collateral agent for loans held as collateral for its Secured Investment Certificates. The Company formed MP Realty in November 2009, and obtained a license to operate as a corporate real estate broker through the California Department of Real Estate on February 23, 2010. MP Realty has conducted limited operations to date. The Company formed MP Securities on April 26, 2010 to provide investment and financial planning solutions for individuals, churches, charitable institutions, and faith-based organizations. MP Securities acts as the selling agent for the Company’s public and private placement notes. The Company formed MPC on December 28, 2018 to be used exclusively for religious and charitable purposes within the meaning of Section 501(c)(3) of the U.S. Internal Revenue Code of 1986. MPC is a not-for-profit corporation formed and organized as a private foundation under Delaware law that makes charitable grants to Christian education, and provides accounting, consulting, and financial expertise to aid evangelical Christian ministries. On August 23, 2019, the Internal Revenue Service granted MPC tax-exempt status as a private foundation under Section 501(c)(3) of the Internal Revenue Code. The MPC Board of Directors approved its first charitable grants during the year ended December 31, 2020. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Ministry Partners Investment Company, LLC and its wholly owned subsidiaries. Management eliminates all significant inter ‑company balances and transactions in consolidation. |
Conversion to LLC | Conversion to LLC Effective 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. The managers have full, exclusive, and complete discretion, power, and authority to oversee the management of Company affairs. As an LLC, the Company’s managers and members have entered into an Operating Agreement that governs the Company’s management structure and governance procedures. |
Risks and Uncertainties | Risks and Uncertainties COVID-19, a global pandemic, has adversely impacted the broad economy, including most industries and sectors. The length and depth of the pandemic will ultimately determine the overall financial impact to the Company, but it could impair our borrowers' ability to meet their financial obligations to us. Furthermore, while there has been no material impact to the Company’s employees to date, COVID-19 could potentially create business continuity issues for the Company. In accordance with Financial Accounting Standards Board (FASB) and interagency regulatory guidance issued in March 2020, loans that are modified under the terms of our COVID-19 Deferral Assistance Program were not considered troubled debt restructurings to the extent that they met the terms of such guidance under Section 4013 of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). In addition, in response to COVID-19, the Federal Reserve reduced the Federal Funds rate to zero on March 16, 2020. The reduction in interest rates and other effects of the COVID-19 pandemic raise uncertainties that could negatively affect the Company’s net interest income and non-interest income. The Company’s operations are dependent upon the willingness and ability of its employees, borrowers, noteholders, and investment clients to conduct financial transactions. If the global response to contain COVID-19 results in reinstatement of lock-down or curtailment of activities orders, the Company could experience a material adverse effect on its business, financial condition, results of operations, and cash flows. While it is not possible to know the full extent that the impact of COVID-19, and resulting measures to curtail its spread will have on the Company’s operations, the Company is disclosing potentially material factors that could impact our business of which it is aware. |
Cash and Cash Equivalents | Cash, and Cash Equivalents Cash equivalents include time deposits, certificates of deposit, and all highly liquid debt instruments with original maturities of three months or less. The Company had demand deposits and money market deposit accounts as of March 31, 2021 and December 31, 2020 . The National Credit Union Insurance Fund insures a portion of the Company’s cash held at credit unions, and the Federal Deposit Insurance Corporation insures a portion of cash held by the Company at other financial institutions. The Company holds cash deposits that may exceed insured limits. Management does not expect to incur losses in these cash accounts. The Company maintains cash accounts with Royal Bank of Canada Dain Rauscher (“ RBC Dain ”) as part of its clearing agreement, and with the Central Registration Depository (“ CRD ”) for regulatory purposes. The cash in these accounts is considered restricted cash and management classifies it as such on our balance sheet. |
Certificates of Deposit | Certificates of Deposit Certificates of deposit include investments in certificates of deposit held at financial institutions that carry original maturities of greater than three months. The Company had $1.0 million in certificates of various terms greater than three months as of March 31, 2021 . The Company had $1.8 million in certificates of deposit with original maturities of greater than three months at December 31, 2020. Details of certificates owned by the Company as of March 31, 2021 are as follows (dollars in thousands): Certificate Open Date Certificate Amount Interest Rate Maturity Date CD 1 1/13/2020 $ 1,000 2.25% 10/13/2021 Details of certificates owned by the Company as of December 31, 2020 are as follows (dollars in thousands): Certificate Open Date Certificate Amount Interest Rate Maturity Date CD 1 1/13/2020 $ 1,000 2.25% 10/13/2021 CD 2 4/1/2020 761 1.95% 1/1/2021 |
Use of Estimates | Use of Estimates The Company’s presentation of co nsolidated financial statements that conform to United States Generally Accepted Accounting Principles (“U.S. 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, foreclosed assets valuation, and the fair value of financial instruments. Actual results could differ from these estimates. |
Investments in Joint Venture | Investments in Joint Venture In 2016, the Company entered into a joint venture agreement to develop and sell property we acquired as part of a Deed in Lieu of Foreclosure agreement reached with one of our borrowers. The joint venture owns a property located in Santa Clarita, California. On a periodic basis, management analyzes the Company’s investment in the joint venture for impairment. In this analysis, management compares the carrying value of the investment to the estimated value of the underlying real property. The Company records any impairment charges as a valuation allowance against the value of the asset. The Company’s share of income and expenses of the joint venture will increase or decrease the Company’s investment in the joint venture. Management records these valuation changes as realized gains or losses on investment on the Company’s consolidated statements of operations . |
Loans Receivable | Loans Receivable The Company reports loans that management has the intent and ability to hold for the foreseeable future at their outstanding unpaid principal balance adjusted for an allowance for loan losses, deferred loan fees and costs, and loan discounts. |
Interest Accrual on Loans Receivable | Interest Accrual on Loans Receivable The Company accrues loan interest income daily . Management defers loan origination fees and costs generated in making a loan. The Company amortizes these fees and costs as an adjustment to the related loan yield using the interest method. Loan discounts are interest accrued and unpaid which the Company added to loan principal balances when it restructured the loan. The Company does not accrete discounts to income on impaired loans. However, when management determines that a previously impaired loan is no longer impaired, the Company begins accreting loan discounts to interest income over the term of the restructured loan. For loans purchased from third parties, loan discounts also are the differences between the purchase price and the recorded principal balance of the loan. The Company accretes these discounts to interest income over the term of the loan using the interest method. Management considers a loan impaired if it concludes that the collection of principal or interest according to the terms of the loan agreement is doubtful . The Company stops the accrual of interest when management determines the loan is impaired. For loans that the Company places on nonaccrual status, management reverses all uncollected accrued interest against interest income . Management accounts for the interest on these loans on the cash basis or cost-recovery method until the loan qualifies for return to accrual status. It is not until all the principal and interest amounts contractually due are brought current and future payments are reasonably assured that the Company returns a loan to accrual status. |
Allowance for Loan Losses | Allowance for Loan Losses The Company sets aside an allowance for loan losses by charging the provision for loan losses account on the Company’s consolidated statements of income . This charge decreases the Company’s earnings. Management charges off the part of loan balances it believes it will not collect against the allowance. The Company credits subsequent recoveries, if any, to the allowance. Loan Portfolio Segments and Classes Management separates the loan portfolio into portfolio segments for purposes of evaluating the allowance for loan losses. A portfolio segment is defined as the level at which the Company develops and documents a systematic method for determining its allowance for loan losses. The Company segments the loan portfolio based on loan types and the underlying risk factors present in each loan type. Management periodically reviews and revises such risk factors, as it considers appropriate. The Company’s loan portfolio consists of one segment – church loans. Management has segregated the loan portfolio 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. Allowance for Loan Loss Evaluation Management evaluates the allowance for loan losses on a regular basis. The Company establishes the allowance for loan losses based upon its periodic review of several factors management believes influences the collectability of the loans, including: · the Company’s loss history; · the characteristics and volume of the loan portfolio; · adverse conditions that may affect the borrower’s ability to repay; · the estimated value of any secured collateral; and · the current economic conditions. This evaluation is subjective, as it requires estimates that are subject to significant revision as more information becomes available. The allowance consists of general and specific components. The general component covers non-classified loans. Management bases the general reserve on the Company’s loss history adjusted for qualitative factors. These qualitative factors are significant factors management considers likely to cause estimated credit losses associated with the Company’s existing portfolio to differ from its historical loss experience. Management adjusts these factors on an on-going basis, some of which include: · changes in lending policies and procedures, including changes in underwriting standards and collection; · changes in national, regional, and local economic and industry conditions that affect the collectability of the portfolio, including the effects of the pandemic; · 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 the collateral for collateral-dependent loans; and · the effect of credit concentrations. Loans that management has classified as impaired receive a specific reserve. For such loans, an allowance is established when the carrying value of that loan is higher than the amount management expects to collect. Management uses multiple approaches to determine the amount the Company expects to receive. These include the discounted cash flow method, using the loan’s underlying collateral value reduced by expected selling costs , or using the observable market price of the impaired loan. |
Impairment Analysis | Impairment Analysis Impaired loans include non-accrual loans, loans 90 days or more past due and still accruing, and restructured loans. Non-accrual loans are loans on which management has discontinued interest accruals. Restructured loans are loans in which the Company has granted the borrower a concession due to financial distress. Concessions are usually a reduction of the interest rate or a change in the original repayment terms. The Company monitors impaired loans on an ongoing basis as part of management’s loan review and work out process. All loans in the loan portfolio are subject to impairment analysis. The Company reviews its loan portfolio monthly by examining several data points. These include reviewing delinquency reports, any new i nformation related to the financial condition of its borrowers, and any new appraisal or other collateral valuation . Through this process, the Company identifies potential impaired loans. Management generally deems a loan is impaired when current facts and circumstances indicate that it is probable that a borrower will be unable to make payments according to the loan agreement. If management has not already deemed a loan impaired, it will classify the loan as non-accrual when it becomes 90 days or more past due. Management considers several factors when determining impairment status. These factors include the loan’s payment status, the value of any secured collateral, and the probability of collecting scheduled payments when due. Management generally does not classify loans that experience minor payment delays or shortfalls as impaired. Management determines the significance of payment delays or shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower. These circumstances include the length and reasons for the delay, the borrower's payment history, and the amount of the shortfall in relation to the principal and interest owed. Management measures impairment on a loan-by-loan basis using one of three methods: · the present value of expected future cash flows discounted at the loan's effective interest rate; · the obtainable market price; or · the fair value of the collateral if the loan is collateral-dependent. 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, payment reduction, or reduction of accrued interest owed on the loan on a contingent or absolute basis. Management considers loans that it renews at below-market terms to be troubled debt restructurings if the below-market terms represent a concession due to the borrower’s troubled financial condition. The Company classifies troubled debt restructurings as impaired loans. For the loans that are not considered to be collateral-dependent, management measures troubled debt restructurings at the present value of estimated future cash flows using the loan's effective rate at origination of the loan. The Company reports the change in the present value of cash flows related to the passage of time as interest income. If the loan is considered to be collateral-dependent, impairment is measured based on the fair value of the collateral. In accordance with industry standards, the Company classifies a loan as impaired if management has modified it as part of a troubled debt restructuring. However, troubled debt restructures, upon meeting certain performance conditions, are eligible to receive non-classified loan ratings (pass or watch) and to be moved out of non-accrual status. These loans continue to be included in total impaired loans but not necessarily in non-accrual or collateral-dependent loans. Section 403 of the CARES Act provides that a qualifying loan modification or extension is exempt by law from classification as a troubled debt restructuring pursuant to FASB ASC 340-10. On April 7, 2020, the Office of the Comptroller of the Currency and related financial agencies issued OCC Bulletin 2020-35, which provides further guidance regarding when a loan modification or extension is not subject to classification as a TDR pursuant to FASB ASC 340-10. Under section 4013 of the CARES Act, financial institutions may elect not to categorize a loan modification as a troubled debt restructuring if it is (1) related to COVID-19; (2) executed on a loan that was not more than thirty (30) days past due as of December 31, 2019; and (3) executed between March 31, 2020, and the earlier of (A) sixty (60) days after the termination of the National Emergency or (B) December 31, 20 20. * The National Emergency regarding the COVID-19 pandemic was first declared effective March 1, 2020 under Proclamation 9994 by the President under the authority vested in the President by the Constitution and the laws of the United States of America, including sections 201 and 301 of the National Emergencies Act. As of the date of filing, the President under the same authority has continued the National Emergency indefinitely beyond March 1, 2021. For all other loan modifications, federal agencies that regulate financial institutions have confirmed with FASB that short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to relief being extended, would not be classified as a troubled debt restructuring. This treatment includes short-term modifications including payment deferrals, fee waivers, and extension of repayment terms. |
Loan Charge-offs | Loan Charge-offs Management charges off loans or portions thereof when it determines the loans or portions of the loans are uncollectible. The Company evaluates collectability periodically on all loans classified as “Loans of Lesser Quality.” Key factors management uses in assessing a loan’s collectability are the financial condition of the borrower, the value of any secured collateral, and the terms of any workout agreement between the Company and the borrower. In workout situations, the Company charges off the amount deemed uncollectible due to the terms of the workout, the inability of the borrower to make agreed upon payments, and the value of the collateral securing the loan. |
Credit Quality Indicators | Credit Quality Indicators The Company has established a loan grading system to assist its management in analyzing and monitoring the loan portfolio. The Company classifies loans it considers lesser quality (“classified loans”) as watch, special mention, substandard, doubtful, or loss assets. 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 net worth and debt service capacity of the borrower or of any pledged collateral. These obligations, even if apparently protected by collateral value, have well-defined weaknesses related to adverse financial, managerial, economic, ministry, or environmental conditions which have clearly jeopardized repayment of principal and interest as originally intended. Furthermore, there is the possibility that some future loss will be sustained if such weaknesses are not corrected. Doubtful: This classification consists of loans that display the properties of substandard loans with the added characteristic that the severity of the weaknesses makes collection or liquidation in full highly questionable or improbable based upon currently existing facts, conditions, and values. The probability of some loss is very high, but because of certain important and reasonably specific factors, the amount of loss cannot be exactly determined. Such pending factors could include merger or liquidation, additional capital injection, refinancing plans, or perfection of liens on additional collateral. Loss: Loans in this classification are considered uncollectible and cannot be justified as a viable asset. This classification does not mean the loan has absolutely no recovery value, but that it is neither practical nor desirable to defer writing off this loan even though partial recovery may be obtained in the future. |
Revenue Recognition | Revenue Recognition The Company recognizes two primary types of revenue: interest income and non-interest income. |
Interest Income | Interest Income The Company’s principal source of revenue is interest income from loans, which is not within the scope of ASU 2014-09, Revenue from Contracts with Customers and all subsequent amendments to the ASU (collectively, "ASC 606"). Refer to the discussion in “Loans Receivable” above to understand the Company’s recognition of interest income. |
Non-interest Income | Non-interest Income Non-interest income includes revenue from various types of transactions and services provided to customers. Contracts with customers can include multiple services, which are accounted for as separate “performance obligations” if they are determined to be distinct. Our performance obligations to our customers are generally satisfied when we transfer the promised good or service to our customer, either at a point in time or over time. Revenue from a performance obligation transferred at a point in time is recognized at the time that the customer obtains control over the promised good or service. Revenue from our performance obligations satisfied over time are recognized in a manner that depicts our performance in transferring control of the good or service, which is generally measured based on time elapsed, as our customers simultaneously receive and consume the benefit of our services as they are provided. Payment for the majority of our services is considered to be variable consideration, as the amount of revenues we expect to receive is subject to factors outside of our control, including market conditions. Variable consideration is only included in revenue when amounts are not subject to significant reversal, which is generally when uncertainty around the amount of revenue to be received is resolved. Wealth advisory fees Generally, management recognizes wealth advisory fees over time as the Company renders services to its clients. The Company receives these fees either based on a percentage of the market value of the assets under management, or as a fixed fee based on the services the Company provides to the client. The Company’s delivery of these services represents its related performance obligations. The Company typically collects the wealth advisory fees at the beginning of each quarter from the client’s acco unt. Management recognizes these fees ratably over the related billing period as the Company fulfills its performance obligation. In addition, management recognizes any commissions or referral fees paid related to this revenue ratably over the related billing period as the Company fulfills its performance obligation. Investment brokerage fees Investment brokerage fees arise from the selling, distribution, and trade execution services. The Company’s execution of these services fulfills its related performance obligations. The Company also offers sales and distribution services, and earns commissions through the sale of annuity and mutual fund products. The Company acts as an agent in these transactions and recognizes revenue at a point in time when the customer executes a contract with a product carrier. The Company may also receive trailing commissions and 12b-1 fees related to mutual fund and annuity products. Management recognizes this revenue in the period when it is earned, estimating the revenue if necessary based on the balance of the investment and the commission rate on the product. The Company earns and recognizes trade execution commissions on the trade date, which is when the Company fulfills its performance obligation. Payment for the trade execution is due on the settlement date. Lending Fees Lending fees represent charges earned for services we provide as part of the lending process, such as late charges, servicing fees, and documentation fees. The Company recognizes late charges as earned when they are paid. The Company recognizes revenue on other lending fees in the period in which the Company has performed the service. Gains on sales of loans receivable From time to time, the Company sells participation interests in loans receivable that it services. Upon completion of the loan sale, the Company recognizes a gain based on certain factors including the maturity date of the loan, the percentage of the loan sold and retained, and the servicing rate charged to the participant on the sold portion. Other non-interest income Other non-interest income includes fees earned based on service contracts the Company has entered into with credit unions. The Company recognizes the revenue monthly based on the terms of the contracts, which require monthly payments for services the Company performs. Gains/losses on sales of foreclosed assets The Company records a gain or loss from the sale of foreclosed assets when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. When the Company finances the sale of a foreclosed asset to the buyer, the Company assesses whether the buyer is committed to perform their obligation under the contract, whether collectability of the transaction price is probable, and the sufficiency of down payment, among other factors. Once these criteria are met, the foreclosed asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. In determining the gain or loss on the sale, the Company adjusts the transaction price and related gain (loss) on sale if a significant financing component is present. |
Foreclosed Assets | Foreclosed Assets Management records assets acquired through foreclosure or other proceedings at fair market value less estimated costs of disposal. Management determines the fair value at the date of foreclosure, which establishes a new cost for the asset. After foreclosure, the Company carries the asset at the lower of cost or fair value, less estimated costs of disposal. Management evaluates these real estate assets regularly to ensure that the recorded amount is supported by the current fair value and, if necessary, ensuring that valuation allowances reduce the carrying amount to fair value less estimated costs of disposal. Revenue and expense from the operation of the Company’s foreclosed assets and changes in the valuation allowance are included in net expenses from foreclosed assets. When the Company sells the foreclosed property, it recognizes a gain or loss on the sale equal to the difference between the net sales proceeds received and the carrying amount of the property. |
Transfers of Financial Assets | Transfers of Financial Assets Management accounts for transfers of financial assets as sales when the Company has surrendered control over the asset. Management deems the Company has surrendered control over transferred assets when: · the assets have been isolated from the Company; · the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred asset; and · the Company does not maintain effective control over the transferred asset through an agreement to repurchase it before its maturity. The Company, from time to time, sells participation interests in mortgage loans it has originated or acquired. 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: · each portion of a financial asset must represent a proportionate ownership interest in an entire financial asset; · from the date of transfer, all cash flows received from the entire financial asset must be divided proportionately among the participating interest holders in an amount equal to their respective share of ownership; · the transfer must be made on a non-recourse basis (other than standard representations and warranties made under the loan participation sale agreement); · the transfer may not be subordinate to any other participating interest holder; and · no party has the right to pledge or exchange the entire financial asset. If the transaction does not meet either the participating interest or surrender of control criteria, management accounts for it as a secured borrowing arrangement. Under some circumstances, when the Company sells a participation in a wholly-owned loan receivable that it services, it retains loan-servicing rights, and records a servicing asset that is initially measured at fair value. As quoted market prices are generally not available for these assets, the Company estimates fair value based on the present value of future expected cash flows associated with the loan receivable. The Company amortizes servicing assets over t he life of the associated receivable using the interest method. Any gain or loss recognized on the sale of a loan receivable depends in part on both the previous carrying amount of the financial asset involved in the sale, allocated between the asset sold and the interest that continues to be held by the Company based on its relative fair value at the date of transfer, and the proceeds received. |
Property and Equipment | Property and Equipment The Company states its furniture, fixtures, equipment, and leasehold improvements at cost, less accumulated depreciation and amortization. Management computes depreciation on a straight-line basis over the estimated useful lives of the assets. The useful lives of the Company’s assets range from three to seven years. |
Debt Issuance Costs | Debt Issuance Costs The Company’s debt consists of borrowings from financial institutions and obligations to investors incurred through the sale of investor notes. Management presents debt net of debt issuance costs, and amortizes debt issuance costs into interest expense over the contractual terms of the debt using the straight-line method. |
Employee Benefit Plan | Employee Benefit Plan The Company records contributions to the qualified employee retirement plan 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, the Company passes through its income and expenses to its members for tax reporting purposes. Tesoro Hills, LLC, is a joint venture in which the Company has an investment. Tesoro Hills, according to its operating agreement, has elected to be treated as a partnership for income tax purposes. The Company and MP Securities are subject to a California LLC fee. The Company uses a recognition threshold and a measurement attribute for the consolidated financial statement recognition and measurement of a tax position taken in a tax return. The Company recognizes benefits from tax positions in the consolidated financial statements only when it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority that would have full knowledge of all relevant information. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold are recognized in the first subsequent financial reporting period in which that threshold is met. Management derecognizes previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold in the first subsequent financial reporting period in which that threshold is no longer met. |
New Accounting Guidance | New accounting guidance Adoption of New Accounting Standards In March 2020, various regulatory agencies issued an interagency statement on loan modifications and reporting for financial institutions working with borrowers affected by the Coronavirus. The interagency statement was effective immediately and impacted accounting for loan modifications. Under Accounting Standards Codification 310-40, “Receivables – Troubled Debt Restructurings by Creditors,” (“ASC 310-40”), a restructuring of debt constitutes a troubled debt restructuring (“TDR”) if the creditor, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. The agencies confirmed with the staff of the FASB that short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief, are not to be considered TDRs. This includes short-term (e.g., six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant. Borrowers considered current are those that are less than 30 days past due on their contractual payments at the time a modification program is implemented. The effects of the implementation of this guidance are disclosed in Note 4. Loans Receivable and Allowance for Loan Losses. Accounting Standards Pending Adoption In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. ASU 2016-13 also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. The guidance requires companies to apply the requirements in the year of adoption through cumulative adjustment with some aspects of the update requiring a prospective transition approach. In October 2019, the FASB adopted a two-bucket approach to stagger the effective date for the credit losses standard for the fiscal years beginning after December 31, 2022 for certain entities, including certain Securities and Exchange Commission filers, public business entities, and private companies. As a smaller reporting company, the Company is eligible for the delay. The Company’s preliminary evaluation indicates the provisions of ASU No. 2016-13 are expected to affect the level of the allowance for loan losses on the Company’s consolidated financial statements. Management has gathered all necessary data and reviewed potential methods to calculate the expected credit losses. The Company will use a third-party software solution to assist with the adoption of the standard. Management is currently calculating sample expected loss computations and developing the allowance methodology and assumptions that the Company will use under the new standard . |
Nature of Business and Summar_3
Nature of Business and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Nature of Business and Summary of Significant Accounting Policies [Abstract] | |
Details of Certificates of Deposit | Certificate Open Date Certificate Amount Interest Rate Maturity Date CD 1 1/13/2020 $ 1,000 2.25% 10/13/2021 Details of certificates owned by the Company as of December 31, 2020 are as follows (dollars in thousands): Certificate Open Date Certificate Amount Interest Rate Maturity Date CD 1 1/13/2020 $ 1,000 2.25% 10/13/2021 CD 2 4/1/2020 761 1.95% 1/1/2021 |
Pledged of Cash and Restricted
Pledged of Cash and Restricted Cash (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Pledged Cash and Restricted Cash [Abstract] | |
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | March 31, December 31, 2021 2020 2020 Cash and cash equivalents $ 15,664 $ 28,242 $ 21,922 Restricted cash 51 51 51 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 15,715 $ 28,293 $ 21,973 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
ECCU [Member] | |
Related Party Transaction [Line Items] | |
Summary of Related Party Balances | March 31, December 31, 2021 2020 Total funds held on deposit at ECCU $ 2,928 $ 7,414 Loan participations purchased from and serviced by ECCU 253 256 |
Schedule of Related Party Transactions | Three months ended March 31, 2021 2020 Interest earned on funds held with ECCU $ 1 $ — Interest income earned on loans purchased from ECCU 4 4 Loans sold to ECCU — 1,164 Fees paid to ECCU from MP Securities Networking Agreement 1 — Income from Successor Servicing Agreement with ECCU 2 2 Rent expense on lease agreement with ECCU 37 37 |
ACCU [Member] | |
Related Party Transaction [Line Items] | |
Summary of Related Party Balances | March 31, December 31, 2021 2020 Total funds held on deposit at ACCU $ 5,852 $ 7,846 |
Schedule of Related Party Transactions | Three months ended March 31, 2021 2020 Interest earned on funds held with ACCU $ 7 $ 39 Loans sold to ACCU 1,000 — Interest income earned on loans purchased from ACCU — 20 Fees paid based on MP Securities Networking Agreement with ACCU 17 11 |
Loans Receivable and Allowanc_2
Loans Receivable and Allowance for Loan Losses (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Loans Receivable and Allowance for Loan Losses [Abstract] | |
Summary of Loans | March 31, December 31, 2021 2020 Loans to evangelical churches and related organizations: Real estate secured $ 114,377 $ 118,203 Unsecured 139 144 Total loans 114,516 118,347 Deferred loan fees, net (442) (481) Loan discount (227) (229) Allowance for loan losses (1,509) (1,516) Loans, net $ 112,338 $ 116,121 |
Schedule of Changes in Allowance for Loan Losses | Three months ended Year ended March 31, 2021 December 31, 2020 Balance, beginning of period $ 1,516 $ 1,393 Provision (credit) for loan loss (7) 188 Charge-offs — (65) Balance, end of period $ 1,509 $ 1,516 |
Schedule of Loans and Allowance for Loan Losses by Impairment Methodology | Loans and Allowance for Loan Losses (by segment) As of March 31, 2021 December 31, 2020 Loans: Individually evaluated for impairment $ 6,181 $ 6,181 Collectively evaluated for impairment 108,335 112,166 Balance $ 114,516 $ 118,347 Allowance for loan losses: Individually evaluated for impairment $ 290 $ 290 Collectively evaluated for impairment 1,219 1,226 Balance $ 1,509 $ 1,516 |
Schedule of Loan Portfolio Credit Quality Indicators by Class | Credit Quality Indicators (by class) As of March 31, 2021 Wholly-Owned First Wholly-Owned Junior Participation First Participation Junior Total Grade: Pass $ 80,252 $ 1,628 $ 199 $ — $ 82,079 Watch 24,288 1,715 253 — 26,256 Special mention — — — — — Substandard 5,677 — — — 5,677 Doubtful 504 — — — 504 Loss — — — — — Total $ 110,721 $ 3,343 $ 452 $ — $ 114,516 Credit Quality Indicators (by class) As of December 31, 2020 Wholly-Owned First Wholly-Owned Junior Participation First Participation Junior Total Grade: Pass $ 83,494 $ 1,789 $ 201 $ — $ 85,484 Watch 24,710 1,716 256 — 26,682 Special mention — — — — — Substandard 5,677 — — — 5,677 Doubtful 504 — — — 504 Loss — — — — — Total $ 114,385 $ 3,505 $ 457 $ — $ 118,347 |
Schedule of Age Analysis of Past Due Loans by Class | Age Analysis of Past Due Loans (by class) As of March 31, 2021 30-59 Days Past Due 60-89 Days Past Due Greater Than 90 Days Total Past Due Current Total Loans Recorded Investment 90 Days or More and Still Accruing Church loans: Wholly-Owned First $ 7,581 $ — $ 3,971 $ 11,552 $ 99,169 $ 110,721 $ — Wholly-Owned Junior — — — — 3,343 3,343 — Participation First — — — — 452 452 — Participation Junior — — — — — — — Total $ 7,581 $ — $ 3,971 $ 11,552 $ 102,964 $ 114,516 $ — Age Analysis of Past Due Loans (by class) As of December 31, 2020 30-59 Days Past Due 60-89 Days Past Due Greater Than 90 Days Total Past Due Current Total Loans Recorded Investment 90 Days or More and Still Accruing Church loans: Wholly-Owned First $ 2,704 $ — $ 4,185 $ 6,889 $ 107,496 $ 114,385 $ — Wholly-Owned Junior — — — — 3,505 3,505 — Participation First — — — — 457 457 — Participation Junior — — — — — — — Total $ 2,704 $ — $ 4,185 $ 6,889 $ 111,458 $ 118,347 $ — |
Schedule of Impaired Loans by Class | Impaired Loans (by class) As of March 31, 2021 For the three months ended March 31, 2021 Unpaid Principal Balance Recorded Balance Recorded Investment Related Allowance Average Recorded Investment Interest Income Recognized With no allowance recorded: Church loans: Wholly-Owned First $ 9,835 $ 9,770 $ 9,612 $ — $ 9,609 $ 91 Wholly-Owned Junior — — — — — — Participation First — — — — — — Participation Junior — — — — — — With an allowance recorded: Church loans: Wholly-Owned First 290 290 290 290 290 — Wholly-Owned Junior — — — — — — Participation First — — — — — — Participation Junior — — — — — — Total: Church loans $ 10,125 $ 10,060 $ 9,902 $ 290 $ 9,899 $ 91 Impaired Loans (by class) As of December 31, 2020 For the year ended December 31, 2020 Unpaid Principal Balance Recorded Balance Recorded Investment Related Allowance Average Recorded Investment Interest Income Recognized With no allowance recorded: Church loans: Wholly-Owned First $ 9,856 $ 9,791 $ 9,632 $ — $ 9,674 $ 357 Wholly-Owned Junior — — — — — — Participation First — — — — — — Participation Junior — — — — — — With an allowance recorded: Church loans: Wholly-Owned First 290 290 290 290 290 — Wholly-Owned Junior — — — — — — Participation First — — — — 296 11 Participation Junior — — — — — — Total: Church loans $ 10,146 $ 10,081 $ 9,922 $ 290 $ 10,260 $ 368 Impaired Loans (by class) As of March 31, 2020 For the three months ended March 31, 2020 Unpaid Principal Balance Recorded Balance Recorded Investment Related Allowance Average Recorded Investment Interest Income Recognized With no allowance recorded: Church loans: Wholly-Owned First $ 11,116 $ 11,055 $ 11,076 $ — $ 11,057 $ 109 Wholly-Owned Junior — — — — — — Participation First — — — — — — Participation Junior — — — — — — With an allowance recorded: Church loans: Wholly-Owned First 290 290 290 110 290 — Wholly-Owned Junior — — — — — — Participation First — — — — 296 11 Participation Junior — — — — — — Total: Church loans $ 11,406 $ 11,345 $ 11,366 $ 110 $ 11,643 $ 120 |
Schedule of Loans on Non-accrual Status by Class | Loans on Nonaccrual Status (by class) as of March 31, 2021 December 31, 2020 Church loans: Wholly-Owned First $ 6,181 $ 6,181 Wholly-Owned Junior — — Participation First — — Participation Junior — — Total $ 6,181 $ 6,181 |
Schedule of Troubled Debt Restructurings by Class | Troubled Debt Restructurings (by class) For the three months ended March 31, 2020 Number of Loans Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Recorded Investment At Period End Church loans: Wholly-Owned First 1 $ 1,936 $ 1,955 $ 1,947 Wholly-Owned Junior — — — — Participation First — — — — Participation Junior — — — — Total 1 $ 1,936 $ 1,955 $ 1,947 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Revenue Recognition [Abstract] | |
Schedule of Disaggregated Revenue | Three months ended March 31, 2021 2020 Non-interest income, in scope Broker-dealer fees and commissions $ 296 $ 175 Gains on loan sales 3 35 Lease income — 13 Gain on debt extinguishment 2,398 — Other non-interest income 2 2 Non-interest income, out of scope Lending fees 52 31 Total non-interest income $ 2,751 $ 256 |
Revenue from Management of Invested Assets | (dollars in thousands) Three months ended March 31, 2021 Transactional AUM Total Broker-dealer revenue Security commissions $ 57 $ 13 $ 70 Sale of investment company shares 14 22 36 Other insurance product revenue 101 12 113 Advisory fee income — 77 77 Total broker-dealer revenue $ 172 $ 124 $ 296 (dollars in thousands) Three months ended March 31, 2020 Transactional AUM Total Broker-dealer revenue Security commissions $ 4 $ 5 $ 9 Sale of investment company shares 14 20 34 Other insurance product revenue 3 10 13 Advisory fee income 3 116 119 Total broker-dealer revenue $ 24 $ 151 $ 175 |
Loan Sales (Tables)
Loan Sales (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Loan Sales [Abstract] | |
Schedule of Servicing Assets | For the Three months ended Year ended March 31, December 31, 2021 2020 2020 Loan participation interests sold by the Company $ 3,467 $ 8,165 $ 17,106 Total participation interests sold and serviced by the Company 40,695 33,084 37,962 Servicing income 44 28 143 Servicing Assets Balance, beginning of period $ 147 $ 100 $ 100 Additions: Servicing obligations from sale of loan participations 7 47 99 Subtractions: Amortization (12) (16) (52) Balance, end of period $ 142 $ 131 $ 147 |
Foreclosed Assets (Tables)
Foreclosed Assets (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Foreclosed Assets [Abstract] | |
Foreclosed Asset Expenses | Foreclosed Asset Expenses (Income) For the three months ended March 31, 2021 2020 Net loss (gain) on sale of real estate $ — $ — Provision for losses — — Operating expenses, net of income 21 8 Net expense (income) $ 21 $ 8 |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Premises and Equipment [Abstract] | |
Summary of Premises and Equipment | As of March 31, December 31, 2021 2020 Furniture and office equipment $ 521 $ 521 Computer system 214 214 Leasehold improvements 43 43 Total premises and equipment 778 778 Less accumulated depreciation and amortization (571) (559) Premises and equipment, net $ 207 $ 219 2021 2020 Depreciation and amortization expense for the three months ended March 31, $ 12 $ 12 |
Credit Facilities (Tables)
Credit Facilities (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Line of Credit Facility [Line Items] | |
Summary of Principal Terms of Term Debt | Nature of Borrowing Interest Rate Interest Rate Type Amount Outstanding Monthly Payment Maturity Date Amount of Loan Collateral Pledged Amount of Cash Pledged Term Loan 2.525% Fixed $ 36,086 $ 450 11/1/2026 $ 58,274 $ — Line of Credit 3.750% Variable 2,000 — 9/30/2021 8,881 — |
Credit Facilities [Member] | |
Line of Credit Facility [Line Items] | |
Future Principal Contractual Payments of Term Debt | 2022 $ 6,466 2023 4,661 2024 4,778 2025 4,902 2026 5,026 Thereafter 12,253 $ 38,086 |
Investor Notes Payable (Tables)
Investor Notes Payable (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Instrument [Line Items] | |
Schedule of Investor Notes Payable | As of As of March 31, 2021 December 31, 2020 SEC Registered Public Offerings Offering Type Amount Weighted Average Interest Rate Amount Weighted Average Interest Rate Class 1 Offering Unsecured $ 7,997 4.01 % $ 9,010 3.94 % Class 1A Offering Unsecured 43,596 3.28 % 48,982 3.16 % 2021 Class A Offering Unsecured 6,758 2.74 % — — % Public Offering Total $ 58,351 3.32 % $ 57,992 3.28 % Private Offerings Offering Type Subordinated Notes Unsecured $ 12,676 4.23 % $ 11,655 4.49 % Secured Notes Secured 6,216 4.05 % 6,580 3.99 % Private Offering Total $ 18,892 4.17 % $ 18,235 4.31 % Total Investor Notes Payable $ 77,243 3.53 % $ 76,227 3.53 % Investor Notes Payable Totals by Security Offering Type Unsecured Total Unsecured $ 71,027 3.48 % $ 69,647 3.48 % Secured Total Secured 6,216 4.05 % 6,580 3.99 % |
Notes Payable [Member] | |
Debt Instrument [Line Items] | |
Schedule of Maturities of Notes Payable | 2022 $ 29,720 2023 8,901 2024 10,233 2025 5,645 2026 22,744 $ 77,243 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies [Abstract] | |
Unfunded Commitments | Contract Amount at: March 31, 2021 December 31, 2020 Undisbursed loans $ 3,638 $ 2,774 |
Information About Existing Operating Leases | Three months ended Year ended March 31, December 31, 2021 2020 2020 Lease cost Operating lease cost $ 43 $ 44 $ 174 Other information Cash paid for operating leases 43 42 169 Right-of-use assets obtained in exchange for operating lease liabilities — 53 53 Weighted average remaining lease term (in years) 2.42 3.32 2.87 Weighted-average discount rate 4.65 % 4.61 % 4.64 % |
Future Minimum Lease Payments and Lease Costs | Lease Payments Lease Costs 2022 $ 175 $ 174 2023 151 146 2024 116 110 Total $ 442 $ 430 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Measurements [Abstract] | |
Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments | Fair Value Measurements at March 31, 2021 using Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value FINANCIAL ASSETS: Cash and restricted cash $ 15,715 $ 15,715 $ — $ — $ 15,715 Certificates of deposit 1,000 1,011 1,011 Loans, net 112,338 — — 111,032 111,032 Investment in joint venture 882 — — 882 882 Accrued interest receivable 819 — — 819 819 FINANCIAL LIABILITIES: Term-debt $ 36,086 $ — $ — $ 31,033 $ 31,033 Line of credit 2,000 — — 2,000 2,000 Investor notes payable 77,156 — — 78,567 78,567 Other financial liabilities 510 — — 510 510 Fair Value Measurements at December 31, 2020 using Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value FINANCIAL ASSETS: Cash and restricted cash $ 21,973 $ 21,922 $ — $ — $ 21,922 Certificates of deposit 1,761 — 1,779 — 1,779 Loans, net 116,121 — — 115,477 115,477 Investment in joint venture 884 — — 884 884 Accrued interest receivable 798 — — 798 798 FINANCIAL LIABILITIES: Term-debt $ 51,516 $ — $ — $ 43,832 $ 43,832 Investor notes payable 76,194 — — 78,262 78,262 Other financial liabilities 513 — — 513 513 |
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 March 31, 2021: Collateral-dependent loans (net of allowance and discount) $ — $ — $ 5,815 $ 5,815 Investment in joint venture — — 882 882 Foreclosed assets (net of allowance) — — 301 301 Total $ — $ — $ 6,998 $ 6,998 Assets at December 31, 2020: Collateral-dependent loans (net of allowance and discount) $ — $ — $ 5,815 $ 5,815 Investments in joint venture — — 884 884 Foreclosed assets (net of allowance) — — 301 301 Total $ — $ — $ 7,000 $ 7,000 |
Schedule of Valuation Methodologies Used to Measure the Fair Value Adjustments for Level 3 Assets Recorded at Fair Value on a Nonrecurring Basis | March 31, 2021 Assets Fair Value (in thousands) Valuation Techniques Unobservable Input Range (Weighted Average) Impaired Loans $ 5,815 Discounted appraised value Selling cost / Estimated market decrease 21% - 81% ( 23% ) Investment in joint venture 882 Internal evaluations Estimated future market value 0% ( 0% ) Foreclosed Assets 301 Internal evaluations Selling cost 6% ( 6% ) December 31, 2020 Assets Fair Value (in thousands) Valuation Techniques Unobservable Input Range (Weighted Average) Impaired loans $ 5,815 Discounted appraised value Selling cost / Estimated market decrease 21% - 81% ( 23% ) Investments in joint venture 884 Internal evaluations Estimated future market value 0% ( 0% ) Foreclosed assets 301 Internal evaluations Selling cost 6% ( 6% ) |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Information [Abstract] | |
Schedule of Financial Information by Reportable Segments | Financial information with respect to the reportable segments for the three months ended March 31, 2021 is as follows (dollars in thousands): Three months ended March 31, 2021 Finance Company Broker Dealer Other Segments Adjustments / Eliminations Total Revenue from external sources $ 4,225 $ 408 $ — $ — $ 4,633 Revenue from internal sources — 261 — (261) — Total non-interest expense and provision for tax 1,252 370 — — 1,622 Net profit (loss) 1,762 299 — (11) 2,050 Total assets 128,561 3,370 456 (110) 132,277 Financial information with respect to the reportable segments for the three months ended March 31, 2020 is as follows (dollars in thousands): Three months ended March 31, 2020 Finance Company Broker Dealer Other Segments Adjustments / Eliminations Total Revenue from external sources $ 2,339 $ 181 $ — $ — $ 2,520 Revenue from internal sources — 219 — (219) — Total non-interest expense and provision for tax 960 342 — — 1,302 Net profit (loss) (197) 58 — 95 (44) Total assets 154,610 2,601 371 (24) 157,558 |
Nature of Business and Summar_4
Nature of Business and Summary of Significant Accounting Policies (Narrative) (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021USD ($)segmentitem | Dec. 31, 2020USD ($) | |
Significant Accounting Policies [Line Items] | ||
Certificates of deposit | $ | $ 1,000 | $ 1,761 |
Number of loan portfolio segments | segment | 1 | |
Types of revenue, number | item | 2 | |
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 |
Nature of Business and Summar_5
Nature of Business and Summary of Significant Accounting Policies (Details of Certificates of Deposit) (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Certificates of deposit | $ 1,000 | $ 1,761 |
CD1 [Member] | ||
Certificates of deposit | $ 1,000 | $ 1,000 |
Interest Rate | 2.25% | 2.25% |
Maturity Date | Oct. 13, 2021 | Oct. 13, 2021 |
CD2 [Member] | ||
Certificates of deposit | $ 761 | |
Interest Rate | 1.95% | |
Maturity Date | Jan. 1, 2021 |
Pledged Cash and Restricted C_2
Pledged Cash and Restricted Cash (Narrative) (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Pledged Cash and Restricted Cash [Abstract] | ||
Pledged cash | $ 0 | $ 0 |
Pledged Cash and Restricted C_3
Pledged Cash and Restricted Cash (Reconciliation of Cash, Cash Equivalents, and Restricted Cash) (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Pledged Cash and Restricted Cash [Abstract] | ||||
Cash and cash equivalents | $ 15,664 | $ 21,922 | $ 28,242 | |
Restricted Cash | 51 | 51 | 51 | |
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows | $ 15,715 | $ 21,973 | $ 28,293 | $ 26,045 |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Details) | Mar. 20, 2020USD ($)loan | Aug. 14, 2013USD ($)loan | Mar. 31, 2021USD ($)loan | Mar. 31, 2020USD ($)loan | Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($) |
Related Party Transaction [Line Items] | ||||||
Line of credit | $ 2,000,000 | |||||
Certificates of deposit | $ 1,000,000 | $ 1,761,000 | ||||
ECCU [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Number of Loans purchased from related party | loan | 0 | 0 | ||||
Number of loans sold to related party | loan | 0 | |||||
ECCU [Member] | Lease Agreement [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Fees paid to and expenses with related party | $ 37,000 | $ 37,000 | ||||
ACCU [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Loans sold to related party | 1,000,000 | |||||
Fees paid to and expenses with related party | 17,000 | 11,000 | ||||
UFCU [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Number of loans sold to related party | loan | 1 | |||||
Loans sold to related party | $ 5,000,000 | |||||
MP Securities [Member] | Networking Agreement [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Fees paid to and expenses with related party | $ 4,000 | $ 0 | ||||
Minimum cancellation notice | 30 days | |||||
Board of Directors and Executive Management [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Notes held by related parties | $ 318,000 | 316,000 | ||||
Navy Federal Credit Union [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Number of loans sold to related party | loan | 1 | |||||
Loans sold to related party | $ 5,000,000 | |||||
Minimum [Member] | MP Securities [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Related party servicing fee | 0.25% | |||||
Maximum [Member] | MP Securities [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Related party servicing fee | 5.50% | |||||
MP Securities [Member] | ECCU [Member] | Networking Agreement [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Fees paid to and expenses with related party | $ 1,000 | |||||
MP Securities [Member] | ACCU [Member] | Networking Agreement [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Notice period for termination of agreement | 30 days | |||||
Line of Credit [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Amount of loan sold to related party serviced by the company | $ 1,100,000 | |||||
Line of credit | $ 2,000,000 | |||||
Interest rate | 3.75% | |||||
Line of Credit [Member] | KCT Credit Union [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Maximum borrowing capacity | $ 7,000,000 | $ 7,000,000 | ||||
Facility maturity date | Sep. 30, 2021 | |||||
Facility renewal period | 1 year | |||||
Minimum cancellation notice | 30 days | |||||
Minimum collateralization ratio | 120.00% | |||||
Line of credit | $ 2,000,000 | $ 0 | ||||
Maturity period | 120 days | |||||
Delinquency period | 60 days | |||||
Spread over prime rate | 0.50% | |||||
Interest rate | 3.75% | |||||
Certificates of deposit | $ 1,000,000 | |||||
Interest Rate | 2.25% | |||||
Maturity Date | Oct. 13, 2021 | |||||
Line of Credit [Member] | KCT Credit Union [Member] | Prime Rate [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Interest rate | 3.25% |
Related Party Transactions (Sum
Related Party Transactions (Summary of Related Party Balances) (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
ECCU [Member] | ||
Related Party Transaction [Line Items] | ||
Total funds held on deposit | $ 2,928 | $ 7,414 |
Loan participations purchased from and serviced by related party | 253 | 256 |
ACCU [Member] | ||
Related Party Transaction [Line Items] | ||
Total funds held on deposit | $ 5,852 | $ 7,846 |
Related Party Transactions (Sch
Related Party Transactions (Schedule of Related Party Transactions) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Related Party Transaction [Line Items] | ||
Income from related party | $ 2,751 | $ 256 |
ECCU [Member] | ||
Related Party Transaction [Line Items] | ||
Interest earned on funds held with related party | 1 | |
Interest income earned on loans purchased from related party | 4 | 4 |
ECCU [Member] | Loans Sold [Member] | ||
Related Party Transaction [Line Items] | ||
Loans sold to related party | 1,164 | |
ECCU [Member] | Networking Agreement [Member] | MP Securities [Member] | ||
Related Party Transaction [Line Items] | ||
Fees paid to and expenses with related party | 1 | |
ECCU [Member] | Successor Servicing Agreement [Member] | ||
Related Party Transaction [Line Items] | ||
Income from related party | 2 | 2 |
ECCU [Member] | Lease Agreement [Member] | ||
Related Party Transaction [Line Items] | ||
Fees paid to and expenses with related party | 37 | 37 |
ACCU [Member] | ||
Related Party Transaction [Line Items] | ||
Loans sold to related party | 1,000 | |
Interest earned on funds held with related party | 7 | 39 |
Interest income earned on loans purchased from related party | 20 | |
Fees paid to and expenses with related party | $ 17 | $ 11 |
Loans Receivable and Allowanc_3
Loans Receivable and Allowance for Loan Losses (Narrative) (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021USD ($)segmentloanitem | Dec. 31, 2020USD ($)loan | |
Loans Receivable and Allowance for Loan Losses [Abstract] | ||
Number of loan categories | item | 4 | |
Loan interest rate | 6.46% | 6.55% |
Number of loan portfolio segments | segment | 1 | |
Number of restructured loans | 0 | |
Number of restructured loans past maturity | 1 | |
Funds committed to be advanced in connection with impaired loans | $ | $ 0 | |
Number of deferred loans for which repayment has not resumed, CARES Act | 2 | 3 |
Principal balance of loans modified, CARES Act | $ | $ 9,800,000 | $ 13,200,000 |
Number of borrowers granted deferral principal and/or interest payments | 35 | |
Outstanding principal balance | $ | $ 47,800,000 |
Loans Receivable and Allowanc_4
Loans Receivable and Allowance for Loan Losses (Summary of Loans) (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total loans | $ 114,516 | $ 118,347 | |
Deferred loan fees, net | (442) | (481) | |
Loan discount | (227) | (229) | |
Allowance for loan losses | (1,509) | (1,516) | $ (1,393) |
Loans, net | 112,338 | 116,121 | |
Real Estate Secured [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total loans | 114,377 | 118,203 | |
Unsecured [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total loans | $ 139 | $ 144 |
Loans Receivable and Allowanc_5
Loans Receivable and Allowance for Loan Losses (Schedule of Changes in Allowance for Loan Losses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Loans Receivable and Allowance for Loan Losses [Abstract] | |||
Balance, beginning of period | $ 1,516 | $ 1,393 | $ 1,393 |
Provision (credit) for loan loss | (7) | $ 52 | 188 |
Charge-offs | (65) | ||
Balance, end of period | $ 1,509 | $ 1,516 |
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 | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Loans Receivable and Allowance for Loan Losses [Abstract] | |||
Loans: Individually evaluated for impairment | $ 6,181 | $ 6,181 | |
Loans: Collectively evaluated for impairment | 108,335 | 112,166 | |
Loans: Balance | 114,516 | 118,347 | |
Allowance for loan losses: Individually evaluated for impairment | 290 | 290 | |
Allowance for loan losses: Collectively evaluated for impairment | 1,219 | 1,226 | |
Allowance for loan losses: Balance | $ 1,509 | $ 1,516 | $ 1,393 |
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 | Mar. 31, 2021 | Dec. 31, 2020 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | $ 114,516 | $ 118,347 |
Wholly-Owned First [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 110,721 | 114,385 |
Wholly-Owned Junior [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 3,343 | 3,505 |
Participation First [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 452 | 457 |
Pass [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 82,079 | 85,484 |
Pass [Member] | Wholly-Owned First [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 80,252 | 83,494 |
Pass [Member] | Wholly-Owned Junior [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 1,628 | 1,789 |
Pass [Member] | Participation First [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 199 | 201 |
Watch [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 26,256 | 26,682 |
Watch [Member] | Wholly-Owned First [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 24,288 | 24,710 |
Watch [Member] | Wholly-Owned Junior [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 1,715 | 1,716 |
Watch [Member] | Participation First [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 253 | 256 |
Substandard [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 5,677 | 5,677 |
Substandard [Member] | Wholly-Owned First [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 5,677 | 5,677 |
Doubtful [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 504 | 504 |
Doubtful [Member] | Wholly-Owned First [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | $ 504 | $ 504 |
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 | Mar. 31, 2021 | Dec. 31, 2020 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | $ 11,552 | $ 6,889 |
Current | 102,964 | 111,458 |
Loans: Balance | 114,516 | 118,347 |
30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 7,581 | 2,704 |
Greater Than 90 Days [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 3,971 | 4,185 |
Wholly-Owned First [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 11,552 | 6,889 |
Current | 99,169 | 107,496 |
Loans: Balance | 110,721 | 114,385 |
Wholly-Owned First [Member] | 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 7,581 | 2,704 |
Wholly-Owned First [Member] | Greater Than 90 Days [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 3,971 | 4,185 |
Wholly-Owned Junior [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 3,343 | 3,505 |
Loans: Balance | 3,343 | 3,505 |
Participation First [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 452 | 457 |
Loans: Balance | $ 452 | $ 457 |
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 | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Unpaid Principal Balance, Total | $ 10,125 | $ 11,406 | $ 10,146 |
Recorded Balance, Total | 10,060 | 11,345 | 10,081 |
Recorded Investment, Total | 9,902 | 11,366 | 9,922 |
Related Allowance | 290 | 110 | 290 |
Average Recorded Investment, Total | 9,899 | 11,643 | 10,260 |
Interest Income Recognized, Total | 91 | 120 | 368 |
Wholly-Owned First [Member] | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Unpaid Principal Balance, With no allowance recorded | 9,835 | 11,116 | 9,856 |
Unpaid Principal Balance, With an allowance recorded | 290 | 290 | 290 |
Recorded Balance, With no allowance recorded | 9,770 | 11,055 | 9,791 |
Recorded Balance, With an allowance recorded | 290 | 290 | 290 |
Recorded Investment, With no allowance recorded | 9,612 | 11,076 | 9,632 |
Recorded Investment, With an allowance recorded | 290 | 290 | 290 |
Related Allowance | 290 | 110 | 290 |
Average Recorded Investment, With no allowance recorded | 9,609 | 11,057 | 9,674 |
Average Recorded Investment, With an allowance recorded | 290 | 290 | 290 |
Interest Income Recognized, With no allowance recorded | $ 91 | 109 | 357 |
Participation First [Member] | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Average Recorded Investment, With an allowance recorded | 296 | 296 | |
Interest Income Recognized, With an allowance recorded | $ 11 | $ 11 |
Loans Receivable and Allowan_10
Loans Receivable and Allowance for Loan Losses (Schedule of Loans on Non-accrual Status by Class) (Details) - Church Loans [Member] - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Nonaccrual loans | $ 6,181 | $ 6,181 |
Wholly-Owned First [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Nonaccrual loans | $ 6,181 | $ 6,181 |
Loans Receivable and Allowan_11
Loans Receivable and Allowance for Loan Losses (Schedule of Troubled Debt Restructurings by Class) (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021loan | Mar. 31, 2020USD ($)loan | |
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Number of Loans | loan | 0 | |
Church Loans [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Number of Loans | loan | 1 | |
Pre-Modification Outstanding Recorded Investment | $ 1,936 | |
Post-Modification Outstanding Recorded Investment | 1,955 | |
Recorded Investment At Period End | $ 1,947 | |
Church Loans [Member] | Wholly-Owned First [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Number of Loans | loan | 1 | |
Pre-Modification Outstanding Recorded Investment | $ 1,936 | |
Post-Modification Outstanding Recorded Investment | 1,955 | |
Recorded Investment At Period End | $ 1,947 |
Investments in Joint Venture (N
Investments in Joint Venture (Narrative) (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2015 |
Investments in Joint Venture [Abstract] | |||
Investment in joint venture | $ 882 | $ 884 | $ 900 |
Revenue Recognition (Schedule o
Revenue Recognition (Schedule of Disaggregated Revenue) (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021USD ($)item | Mar. 31, 2020USD ($) | |
Disaggregation of Revenue [Line Items] | ||
Total non-interest income | $ 2,751 | $ 256 |
Types of revenue, number | item | 2 | |
Broker-dealer fees and commissions [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total non-interest income | $ 296 | 175 |
Gain on Loan Sales [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total non-interest income | 3 | 35 |
Lease Income [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total non-interest income | 13 | |
Gain on Debt Extinguishment [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total non-interest income | 2,398 | |
Other Non-Interest Income [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total non-interest income | 2 | 2 |
Lending Fees [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total non-interest income | $ 52 | $ 31 |
Revenue Recognition (Revenue fr
Revenue Recognition (Revenue from Management Of Invested Assets) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 2,751 | $ 256 |
Broker-Dealer [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 296 | 175 |
Broker-Dealer [Member] | Transactional [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 172 | 24 |
Broker-Dealer [Member] | Assets Under Management [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 124 | 151 |
Security Commission [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 70 | 9 |
Security Commission [Member] | Transactional [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 57 | 4 |
Security Commission [Member] | Assets Under Management [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 13 | 5 |
Sale Of Investment Company Shares [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 36 | 34 |
Sale Of Investment Company Shares [Member] | Transactional [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 14 | 14 |
Sale Of Investment Company Shares [Member] | Assets Under Management [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 22 | 20 |
Other Insurance Product [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 113 | 13 |
Other Insurance Product [Member] | Transactional [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 101 | 3 |
Other Insurance Product [Member] | Assets Under Management [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 12 | 10 |
Advisory Fee Income [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 77 | 119 |
Advisory Fee Income [Member] | Transactional [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 3 | |
Advisory Fee Income [Member] | Assets Under Management [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 77 | $ 116 |
Loan Sales (Narrative) (Details
Loan Sales (Narrative) (Details) $ in Millions | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020loan | Dec. 31, 2020USD ($)loan | |
ACCU [Member] | ||
Number of loans sold | loan | 2 | |
Proceeds from loans | $ | $ 1.6 | |
ECCU [Member] | ||
Number of loans sold | loan | 1 | |
Proceeds from loans | $ | $ 1.2 |
Loan Sales (Schedule of Servici
Loan Sales (Schedule of Servicing Assets) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Loan participation interests sold by the Company | $ 3,467 | $ 8,165 | $ 17,106 |
Total participation interests sold and serviced by the Company | 40,695 | 33,084 | 37,962 |
Total non-interest income | 2,751 | 256 | |
Balance, beginning of period | 147 | 100 | 100 |
Additions: Servicing obligations from sale of loan participations | 7 | 47 | 99 |
Subtractions: Amortization | (12) | (16) | (52) |
Balance, end of period | 142 | 131 | 147 |
Servicing Assets [Member] | |||
Total non-interest income | $ 44 | $ 28 | $ 143 |
Foreclosed Assets (Narrative) (
Foreclosed Assets (Narrative) (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Foreclosed Assets [Abstract] | ||
Foreclosed assets | $ 301,000 | $ 301,000 |
Allowance for losses on foreclosed assets | 0 | $ 0 |
Loss provision on foreclosed assets | $ 0 |
Foreclosed Assets (Foreclosed A
Foreclosed Assets (Foreclosed Asset Expenses) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Foreclosed Assets [Abstract] | ||
Operating expenses, net of income | $ 21 | $ 8 |
Net expense (income) | $ 21 | $ 8 |
Premises and Equipment (Summary
Premises and Equipment (Summary of Premises and Equipment) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Total premises and equipment | $ 778 | $ 778 | |
Less accumulated depreciation and amortization | (571) | (559) | |
Premises and equipment, net | 207 | 219 | |
Depreciation and amortization expense | 12 | $ 12 | |
Furniture And Office Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total premises and equipment | 521 | 521 | |
Computer System [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total premises and equipment | 214 | 214 | |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total premises and equipment | $ 43 | $ 43 |
Credit Facilities (Narrative) (
Credit Facilities (Narrative) (Details) | Mar. 05, 2021USD ($) | Sep. 25, 2020USD ($) | Mar. 31, 2021USD ($)item | Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($) |
Line of Credit Facility [Line Items] | |||||
Gain on debt extinguishment | $ 2,398,000 | ||||
Line of credit | $ 2,000,000 | ||||
Term Loan [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Number of credit facilities | item | 1 | ||||
Minimum collateralization ratio | 120.00% | ||||
Debt repaid | $ 14,300,000 | ||||
Gain on debt extinguishment | $ 2,300,000 | ||||
Line of Credit [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Line of credit | $ 2,000,000 | ||||
Interest rate | 3.75% | ||||
Previous Credit Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Debt repaid | $ 15,000,000 | ||||
Gain on debt extinguishment | $ 2,400,000 | ||||
KCT Credit Union [Member] | Line of Credit [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Minimum collateralization ratio | 120.00% | ||||
Maximum borrowing capacity | $ 7,000,000 | $ 7,000,000 | |||
Expiration period | 1 year | ||||
Facility maturity date | Sep. 30, 2021 | ||||
Line of credit | $ 2,000,000 | $ 0 | |||
Spread over prime rate | 0.50% | ||||
Interest rate | 3.75% | ||||
Facility renewal period | 1 year | ||||
Minimum cancellation notice | 30 days | ||||
Maturity period | 120 days | ||||
Delinquency period | 60 days | ||||
Collateral pledged | $ 6,600,000 | $ 7,200,000 |
Credit Facilities (Summary of P
Credit Facilities (Summary of Principal Terms of Term Debt) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Line of Credit Facility [Line Items] | ||
Amount Outstanding, Term loan | $ 36,086 | $ 51,516 |
Amount outstanding, Line of credit | $ 2,000 | |
Term Loan [Member] | ||
Line of Credit Facility [Line Items] | ||
Interest Rate, Term Loan | 2.525% | |
Amount Outstanding, Term loan | $ 36,086 | |
Monthly Payment | $ 450 | |
Maturity Date | Nov. 1, 2026 | |
Term Loan [Member] | Loans Receivable [Member] | ||
Line of Credit Facility [Line Items] | ||
Amount of Collateral Pledged | $ 58,274 | |
Line of Credit [Member] | ||
Line of Credit Facility [Line Items] | ||
Interest Rate, Line of Credit | 3.75% | |
Amount outstanding, Line of credit | $ 2,000 | |
Maturity Date | Sep. 30, 2021 | |
Line of Credit [Member] | Loans Receivable [Member] | ||
Line of Credit Facility [Line Items] | ||
Amount of Collateral Pledged | $ 8,881 |
Credit Facilities (Future Princ
Credit Facilities (Future Principal Contractual Payments of Term Debt) (Details) - Credit Facilities [Member] $ in Thousands | Mar. 31, 2021USD ($) |
Line of Credit Facility [Line Items] | |
2022 | $ 6,466 |
2023 | 4,661 |
2024 | 4,778 |
2025 | 4,902 |
2026 | 5,026 |
Thereafter | 12,253 |
Total | $ 38,086 |
Investor Notes Payable (Narrati
Investor Notes Payable (Narrative) (Details) | Apr. 30, 2018USD ($) | Mar. 31, 2021USD ($)item | Jan. 08, 2021USD ($) | Dec. 31, 2020USD ($) | Feb. 27, 2018USD ($) | Jan. 31, 2015USD ($) |
Debt Instrument [Line Items] | ||||||
Debt issuance costs | $ 87,000 | $ 33,000 | ||||
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 | |||||
2021 Class A Offering [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Number of series in class of notes | item | 2 | |||||
Notes authorized, maximum | $ 125,000,000 | |||||
Secured Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Notes authorized, maximum | $ 80,000,000 | |||||
Notes Issued | $ 80,000,000 | |||||
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% | |||||
Subordinated Notes [Member] | Loans Receivable [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Collateral pledged | $ 9,000,000 | $ 9,100,000 | ||||
Subordinated Notes [Member] | Minimum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Maturity period | 12 months | |||||
Subordinated Notes [Member] | Maximum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Maturity period | 60 months | |||||
Subordinated Notes [Member] | Swap Index Rate [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate measurement period | 7 days |
Investor Notes Payable (Schedul
Investor Notes Payable (Schedule of Investor Notes Payable) (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Amount | $ 77,243 | $ 76,227 |
Weighted Average Interest Rate | 3.53% | 3.53% |
Public Offerings [Member] | ||
Debt Instrument [Line Items] | ||
Amount | $ 58,351 | $ 57,992 |
Weighted Average Interest Rate | 3.32% | 3.28% |
Public Offerings [Member] | Class 1 [Member] | ||
Debt Instrument [Line Items] | ||
Amount | $ 7,997 | $ 9,010 |
Weighted Average Interest Rate | 4.01% | 3.94% |
Public Offerings [Member] | Class 1A [Member] | ||
Debt Instrument [Line Items] | ||
Amount | $ 43,596 | $ 48,982 |
Weighted Average Interest Rate | 3.28% | 3.16% |
Private Offerings [Member] | ||
Debt Instrument [Line Items] | ||
Amount | $ 18,892 | $ 18,235 |
Weighted Average Interest Rate | 4.17% | 4.31% |
Private Offerings [Member] | Subordinated Notes [Member] | ||
Debt Instrument [Line Items] | ||
Amount | $ 12,676 | $ 11,655 |
Weighted Average Interest Rate | 4.23% | 4.49% |
Private Offerings [Member] | Secured Notes [Member] | ||
Debt Instrument [Line Items] | ||
Amount | $ 6,216 | $ 6,580 |
Weighted Average Interest Rate | 4.05% | 3.99% |
Unsecured [Member] | ||
Debt Instrument [Line Items] | ||
Amount | $ 71,027 | $ 69,647 |
Weighted Average Interest Rate | 3.48% | 3.48% |
Unsecured [Member] | 2021 Class A Offering [Member] | ||
Debt Instrument [Line Items] | ||
Amount | $ 6,758 | |
Weighted Average Interest Rate | 2.74% | |
Secured [Member] | ||
Debt Instrument [Line Items] | ||
Amount | $ 6,216 | $ 6,580 |
Weighted Average Interest Rate | 4.05% | 3.99% |
Investor Notes Payable (Sched_2
Investor Notes Payable (Schedule of Maturities of Notes Payable) (Details) - Notes Payable [Member] $ in Thousands | Mar. 31, 2021USD ($) |
Debt Instrument [Line Items] | |
2022 | $ 29,720 |
2023 | 8,901 |
2024 | 10,233 |
2025 | 5,645 |
2026 | 22,744 |
Total | $ 77,243 |
Commitments and Contingencies_2
Commitments and Contingencies (Narrative) (Details) - Brea [Member] | Mar. 31, 2021item |
Commitments And Contingencies [Line Items] | |
Lease renewal term | 5 years |
Number of lease extension options remaining | 0 |
Commitments and Contingencies_3
Commitments and Contingencies (Unfunded Commitments) (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Undisbursed Loans [Member] | ||
Commitments And Contingencies [Line Items] | ||
Unfunded Commitments | $ 3,638 | $ 2,774 |
Commitments and Contingencies_4
Commitments and Contingencies (Information About Existing Operating Leases) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Commitments and Contingencies [Abstract] | |||
Operating lease cost | $ 43 | $ 44 | $ 174 |
Cash paid for operating leases | $ 43 | 42 | 169 |
Right-of-use assets obtained in exchange for operating lease liabilities | $ 53 | $ 53 | |
Weighted average remaining lease term (in years) | 2 years 5 months 1 day | 3 years 3 months 26 days | 2 years 10 months 13 days |
Weighted-average discount rate | 4.65% | 4.61% | 4.64% |
Commitments and Contingencies_5
Commitments and Contingencies (Future Minimum Lease Payments and Lease Costs) (Details) $ in Thousands | Mar. 31, 2021USD ($) |
Commitments and Contingencies [Abstract] | |
Lease Payments, 2022 | $ 175 |
Lease Payments, 2023 | 151 |
Lease Payments, 2024 | 116 |
Lease Payments, Total | 442 |
Lease Costs, 2022 | 174 |
Lease Costs, 2023 | 146 |
Lease Costs, 2024 | 110 |
Lease Costs, Total | $ 430 |
Preferred and Common Units Un_2
Preferred and Common Units Under LLC Structure (Narrative) (Details) | 3 Months Ended | |
Mar. 31, 2021item / sharesitem$ / shares | Dec. 31, 2020$ / 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 ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
401(k) plan [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Minimum age restriction for participation | 21 years | |
Maximum voluntary percentage contributions of salary (as a percent) | 86.00% | |
Contribution percentage, company 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 | $ 22,000 | $ 26,000 |
401(k) plan [Member] | Maximum [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Contribution percentage, company 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 | |
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 | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2015 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Carrying Value, Cash and restricted cash | $ 15,715 | $ 21,973 | $ 28,293 | $ 26,045 | |
Carrying Value, Certificates of deposit | 1,000 | 1,761 | |||
Carrying Value, Loans, net | 112,338 | 116,121 | |||
Carrying Value, Investment in joint venture | 882 | 884 | $ 900 | ||
Carrying Value, Term-debt | 36,086 | 51,516 | |||
Carrying Value, Line of Credit | 2,000 | ||||
Carrying Value, Investor notes payable | 77,156 | 76,194 | |||
Carrying Value [Member] | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Carrying Value, Cash and restricted cash | 15,715 | 21,973 | |||
Carrying Value, Certificates of deposit | 1,000 | 1,761 | |||
Carrying Value, Loans, net | 112,338 | 116,121 | |||
Carrying Value, Investment in joint venture | 882 | 884 | |||
Carrying Value, Accrued interest receivable | 819 | 798 | |||
Carrying Value, Investor notes payable | 77,156 | 76,194 | |||
Carrying Value, Other financial liabilities | 510 | 513 | |||
Carrying Value [Member] | Term Loan [Member] | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Carrying Value, Term-debt | 36,086 | 51,516 | |||
Carrying Value [Member] | Credit Facilities [Member] | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Carrying Value, Line of Credit | 2,000 | ||||
Fair Value [Member] | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Fair Value, Cash and restricted cash | 15,715 | 21,922 | |||
Fair Value, Certificates of deposit | 1,011 | 1,779 | |||
Fair Value, Loans, net | 111,032 | 115,477 | |||
Fair Value, Investment in joint venture | 882 | 884 | |||
Fair Value, Accrued interest receivable | 819 | 798 | |||
Fair Value, Investor notes payable | 78,567 | 78,262 | |||
Fair Value, Other financial liabilities | 510 | 513 | |||
Fair Value [Member] | Term Loan [Member] | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Fair Value, Term-debt | 31,033 | 43,832 | |||
Fair Value [Member] | Credit Facilities [Member] | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Fair Value, Line of credit | 2,000 | ||||
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 and restricted cash | 15,715 | 21,922 | |||
Significant Other Observable Inputs Level 2 [Member] | Fair Value [Member] | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Fair Value, Certificates of deposit | 1,011 | 1,779 | |||
Significant Unobservable Inputs Level 3 [Member] | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Carrying Value, Investment in joint venture | 882 | 884 | |||
Fair Value, Loans, net | 5,815 | 5,815 | |||
Significant Unobservable Inputs Level 3 [Member] | Fair Value [Member] | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Fair Value, Loans, net | 111,032 | 115,477 | |||
Fair Value, Investment in joint venture | 882 | 884 | |||
Fair Value, Accrued interest receivable | 819 | 798 | |||
Fair Value, Investor notes payable | 78,567 | 78,262 | |||
Fair Value, Other financial liabilities | 510 | 513 | |||
Significant Unobservable Inputs Level 3 [Member] | Fair Value [Member] | Term Loan [Member] | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Fair Value, Term-debt | 31,033 | $ 43,832 | |||
Significant Unobservable Inputs Level 3 [Member] | Fair Value [Member] | Credit Facilities [Member] | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Fair Value, Line of credit | $ 2,000 |
Fair Value Measurements (Sche_2
Fair Value Measurements (Schedule of Fair Value Measured on a Nonrecurring Basis) (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Foreclosed assets (net of allowance) | $ 301 | $ 301 |
Significant Unobservable Inputs Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Collateral-dependent loans (net of allowance and discount) | 5,815 | 5,815 |
Foreclosed assets (net of allowance) | 301 | 301 |
Fair Value Measured On A Nonrecurring Basis [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Collateral-dependent loans (net of allowance and discount) | 5,815 | 5,815 |
Investment in joint venture | 882 | 884 |
Foreclosed assets (net of allowance) | 301 | 301 |
Total | 6,998 | 7,000 |
Fair Value Measured On A Nonrecurring Basis [Member] | Significant Unobservable Inputs Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Collateral-dependent loans (net of allowance and discount) | 5,815 | 5,815 |
Investment in joint venture | 882 | 884 |
Foreclosed assets (net of allowance) | 301 | 301 |
Total | $ 6,998 | $ 7,000 |
Fair Value Measurements (Sche_3
Fair Value Measurements (Schedule of Valuation Methodologies Used to Measure the Fair Value Adjustments for Level 3 Assets Recorded at Fair Value on a Nonrecurring Basis) (Details) $ in Thousands | Mar. 31, 2021USD ($)item | Dec. 31, 2020USD ($)item | Dec. 31, 2015USD ($) |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Investment in joint venture | $ | $ 882 | $ 884 | $ 900 |
Foreclosed assets | $ | 301 | 301 | |
Significant Unobservable Inputs Level 3 [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Impaired Loans | $ | 5,815 | 5,815 | |
Investment in joint venture | $ | 882 | 884 | |
Foreclosed assets | $ | $ 301 | $ 301 | |
Significant Unobservable Inputs Level 3 [Member] | Joint Venture [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Investment in joint venture, measurement input | 0 | 0 | |
Significant Unobservable Inputs Level 3 [Member] | Foreclosed Assets [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Foreclosed assets. measurement input | 0.06 | 0.06 | |
Minimum [Member] | Significant Unobservable Inputs Level 3 [Member] | Impaired Loans [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Impaired Loans Unobservable Input | 0.21 | 0.21 | |
Maximum [Member] | Significant Unobservable Inputs Level 3 [Member] | Impaired Loans [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Impaired Loans Unobservable Input | 0.81 | 0.81 | |
Weighted Average [Member] | Significant Unobservable Inputs Level 3 [Member] | Impaired Loans [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Impaired Loans Unobservable Input | 0.23 | 0.23 | |
Weighted Average [Member] | Significant Unobservable Inputs Level 3 [Member] | Joint Venture [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Investment in joint venture, measurement input | 0 | 0 | |
Weighted Average [Member] | Significant Unobservable Inputs Level 3 [Member] | Foreclosed Assets [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Foreclosed assets. measurement input | 0.06 | 0.06 |
Income Taxes and State LLC Fe_2
Income Taxes and State LLC Fees (Narrative) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
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 | ||
California Franchise Tax Board [Member] | Minimum [Member] | |||
Income Tax Disclosure [Line Items] | |||
State minimum franchise tax | 800 | ||
MP Securities [Member] | California Franchise Tax Board [Member] | |||
Income Tax Disclosure [Line Items] | |||
Gross receipt fee based on turnover | 6,000 | ||
MP Securities [Member] | California Franchise Tax Board [Member] | Minimum [Member] | |||
Income Tax Disclosure [Line Items] | |||
State minimum franchise tax | $ 800 | ||
MP Realty [Member] | |||
Income Tax Disclosure [Line Items] | |||
Operating loss carryforwards | $ 430,000 | $ 423,000 | |
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) | 3 Months Ended |
Mar. 31, 2021segment | |
Segment Information [Abstract] | |
Number of segments | 2 |
Segment Information (Schedule o
Segment Information (Schedule of Financial Information by Reportable Segments) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | |||
Total non-interest expense and provision for tax | $ 1,622 | $ 1,302 | |
Net profit | 2,050 | (44) | |
Total assets | 132,277 | 157,558 | $ 143,093 |
External Sources [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 4,633 | 2,520 | |
Adjustments/Eliminations [Member] | |||
Segment Reporting Information [Line Items] | |||
Net profit | (11) | 95 | |
Total assets | (110) | (24) | |
Adjustments/Eliminations [Member] | Internal Sources [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | (261) | (219) | |
Finance Company [Member] | Operating Segments [Member] | |||
Segment Reporting Information [Line Items] | |||
Total non-interest expense and provision for tax | 1,252 | 960 | |
Net profit | 1,762 | (197) | |
Total assets | 128,561 | 154,610 | |
Finance Company [Member] | Operating Segments [Member] | External Sources [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 4,225 | 2,339 | |
Broker Dealer [Member] | Operating Segments [Member] | |||
Segment Reporting Information [Line Items] | |||
Total non-interest expense and provision for tax | 370 | 342 | |
Net profit | 299 | 58 | |
Total assets | 3,370 | 2,601 | |
Broker Dealer [Member] | Operating Segments [Member] | External Sources [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 408 | 181 | |
Broker Dealer [Member] | Operating Segments [Member] | Internal Sources [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 261 | 219 | |
Other Segments [Member] | Operating Segments [Member] | |||
Segment Reporting Information [Line Items] | |||
Total assets | $ 456 | $ 371 |