UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x
Quarterly Report Under Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Quarterly Period Ended March 31, 2011
or
o
Transition Report Under Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Transition Period from ------------to------------
Commission File Number 000-25919
American Church Mortgage Company
(Exact name of
registrant as specified in its charter)
Minnesota
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41-1793975
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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1
0237 Yellow Circle Drive Minnetonka, MN
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55343
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(Address of principal executive offices)
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(Zip Code)
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(952) 945-9455
(Registrant’s telephone number,
including area code)
Indicate by
check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes
x
No
o
Indicate by
check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or such
shorter period that the registrant was required to submit and post such files). Yes
o
No
o
Indicate by
check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting
company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting
company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
o
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
x
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Indicate by
check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
o
No
x
Indicate the
number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
Class
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Outstanding at May 13, 2011
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Common Stock, $0.01 par value per share
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1,940,338 shares
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AMERICAN CHURCH
MORTGAGE COMPANY
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INDEX
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Page
No.
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PART I. FINANCIAL INFORMATION
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Item 1. Financial Statements:
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Balance Sheets
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2 - 3
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Statements of Operations
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4 - 5
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Statements of Cash Flows
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6 - 7
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Notes to Financial Statements
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8 - 16
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Item 2. Management’s Discussion and Analysis of Financial
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Condition and Results of Operations
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17 – 22
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Items 4. Controls and Procedures
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22
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PART II. OTHER INFORMATION
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Item 1. Legal Proceedings
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23
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Item 1A. Risk Factors
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23
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
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23
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Item 3. Defaults Upon Senior Securities
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24
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Item 4. (Removed and Reserved)
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24
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Item 5. Other Information
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24
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Item 6. Exhibits
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24
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Signatures
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25
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AMERICAN CHURCH MORTGAGE COMPANY
Minnetonka, Minnesota
Financial Statements
March 31, 2011
AMERICAN CHURCH MORTGAGE COMPANY
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Balance Sheets
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ASSETS
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March 31, 2011
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December 31, 2010
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(Unaudited)
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Current Assets
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Cash and equivalents
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$ 495,769
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$ 350,339
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Accounts receivable
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149,807
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112,209
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Interest receivable
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130,489
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139,441
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Current maturities of mortgage loans receivable, net of
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allowance of $23,467 and $28,574 and deferred
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origination fees of $41,080 and $39,965 at March 31,
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31, 2011 and December 31, 2010, respectively
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895,950
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1,193,149
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Current maturities of bond portfolio, at fair value
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789,000
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627,000
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Prepaid expenses
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21,835
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7,407
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Total current assets
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2,482,850
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2,429,545
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Mortgage Loans Receivable, net of current maturities,
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allowance of $733,925 and $683,255 and deferred
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origination fees of $520,033 and $532,873 at March
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31, 2011 and December 31, 2010, respectively
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28,784,867
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28,952,689
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Bond Portfolio, at fair value, net of current maturities
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9,499,047
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9,650,849
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Real Estate Held for Sale
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727,132
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727,532
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Deferred Offering Costs,
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net of accumulated amortization of $734,793 and $705,923
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at March 31, 2011 and December 31, 2010, respectively
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838,778
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845,694
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Total Assets
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$ 42,332,674
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$ 42,606,309
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Notes to Unaudited Financial Statements are an integral part of this Statement
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AMERICAN CHURCH MORTGAGE COMPANY
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Balance Sheets
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LIABILITIES AND STOCKHOLDERS’
EQUITY
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March 31, 2011
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December 31, 2010
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(Unaudited)
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Current Liabilities
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Current maturities of secured investor certificates
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$ 892,000
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$ 902,000
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Line of credit
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1,000,000
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1,416,000
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Accounts payable
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78,269
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37,364
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Management fee payable
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-
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22,357
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Dividends payable
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213,437
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194,311
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Total current liabilities
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2,183,706
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2,572,032
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Deposit on real estate held for sale
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45,000
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45,000
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Secured Investor Certificates, Series B, net of current maturities
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18,270,000
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18,307,000
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Secured Investor Certificates, Series C
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5,405,000
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5,134,000
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Total liabilities
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25,903,706
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26,058,032
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Stockholders’ Equity
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Common stock, par value $.01 per share
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Authorized, 30,000,000 shares
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Issued and outstanding, 1,940,338 shares at
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March 31, 2011 and 1,943,107 at December 31, 2010
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19,403
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19,431
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Additional paid-in capital
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20,161,514
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20,175,331
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Accumulated deficit
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(3,751,949)
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(3,646,485)
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Total stockholders’ equity
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16,428,968
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16,548,277
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Total liabilities and stockholders' equity
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$ 42,332,674
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$ 42,606,309
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Notes to Unaudited Financial Statements are an integral part of this Statement
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AMERICAN CHURCH MORTGAGE COMPANY
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Statements of Operations
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For the Three Months Ended
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March 31, 2011
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March 31, 2010
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Interest and Other Income
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$ 788,366
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$ 899,809
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Interest Expense
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455,463
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423,975
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Net Interest Income
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332,903
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475,834
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Allowance for losses on mortgage loans receivable
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45,563
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53,492
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Net Interest Income after Allowance for Mortgage and Bond Losses
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287,340
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422,342
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Operating Expenses
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Other operating expenses
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179,524
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207,277
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Operating Income
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107,816
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215,065
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Other Income
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157
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4,745
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Net Income
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$ 107,973
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$ 219,810
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Basic and Diluted Income Per Share
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$ 0.06
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$ 0.09
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Dividends Declared Per Share
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$ 0.11
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$ 0.10
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Weighted Average Common Shares Outstanding -
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Basic and Diluted
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1,942,279
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2,472,081
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Notes to Unaudited Financial Statements are an integral part of this Statement
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AMERICAN CHURCH MORTGAGE COMPANY
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Statements of Cash Flows
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For the Three Months Ended
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March 31, 2011
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March 31, 2010
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Cash Flows from Operating Activities
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Net income
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$107,973
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$219,810
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Adjustments to reconcile net income to net cash
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from operating activities:
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Allowance for losses on mortgage loans receivable
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45,563
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53,492
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Amortization of loan origination discounts
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(11,725)
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(7,812)
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Amortization of deferred costs
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28,870
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31,911
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Change in assets and liabilities
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Accounts receivable
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(18,828)
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3,387
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Interest receivable
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8,952
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12,014
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Prepaid expenses
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(14,428)
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(8,894)
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Accounts payable
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40,905
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2,266
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Management fee payable
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(22,357)
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-
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Net cash provided by operating activities
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164,925
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306,174
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Cash Flows from Investing Activities
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Proceeds from origination fees
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-
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11,620
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Collections of mortgage loans
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412,812
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67,335
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Investment in bonds
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(31,046)
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-
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Proceeds from bonds
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20,849
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780,255
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Net cash provided by investing activities
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402,615
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859,210
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Cash Flows from Financing Activities
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Payments on line of credit, net
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(416,000)
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(700,140)
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Proceeds from secured investor certificates
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$258,000
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452,000
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Payments on secured investor certificate maturities
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(47,000)
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(303,000)
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Payments for deferred costs
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(21,954)
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(37,780)
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Stock redemptions
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(845)
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-
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Dividends paid
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(194,311)
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(247,208)
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Net cash used for financing activities
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(422,110)
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(836,128)
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Net Increase (Decrease) in Cash and Equivalents
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145,430
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329,256
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Cash and Equivalents - Beginning of Year
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350,339
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67,137
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Cash and Equivalents - End of Year
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$495,769
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$396,393
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Notes to Unaudited Financial Statements are an integral part of this Statement
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AMERICAN CHURCH MORTGAGE COMPANY
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Statements of Cash Flows - Continued
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For the Three Months Ended
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March 31, 2011
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March 31, 2010
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Supplemental Cash Flow Information
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Dividends payable
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$ 213,437
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$ 247,208
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Interest paid
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$ 426,593
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$ 419,402
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Secured investor certificates issued
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through the stock repurchase program
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$ 13,000
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$ -
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Notes to Unaudited Financial Statements are an integral part of this Statement
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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited financial statements
have been prepared in accordance with the instructions for interim statements and, therefore, do not include all information and
disclosures necessary for fair presentation of results of operations, financial position, and changes in cash flow in conformity
with generally accepted accounting principles. However, in the opinion of management, such statements reflect all adjustments (which
include only normal recurring adjustments) necessary for fair presentation of financial position, results of operations, and cash
flows for the period presented.
The unaudited financial statements of the Company
should be read in conjunction with the December 31, 2010 audited financial statements included in the Company’s Annual Report
on Form 10-K, as filed with the Securities and Exchange Commission for the year ended December 31, 2010. Operating results for
the periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2011.
Nature of Business
American Church Mortgage Company, a Minnesota
corporation, was incorporated on May 27, 1994. The Company was organized to engage primarily in the business of making mortgage
loans to churches and other nonprofit religious organizations throughout the United States, on terms established for individual
organizations.
Accounting Estimates
Management uses estimates and assumptions in
preparing these financial statements in accordance with accounting principles generally accepted in the United States of America.
Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and
liabilities, and the reported revenues and expenses. Actual results could differ from those estimates. The most sensitive estimates
relate to the realizability of the mortgage loans receivable, the valuation of the bond portfolio and real estate held for sale.
It is at least reasonably possible that these estimates could change in the near term and that the effect of the change, if any,
may be material to the financial statements.
Concentration of Credit Risk
The Company's loans have been granted to churches and other non-profit
religious organizations. The ability of the Company’s debtors to honor their contracts is dependent on member contributions
and the involvement in the church or organization of its senior pastor.
Cash and Equivalents
The Company considers all highly liquid debt
instruments purchased with maturities of three months or less to be cash equivalents.
The Company maintains accounts primarily at
two financial institutions. At times throughout the year, the Company’s cash and equivalents balances may exceed amounts
insured by the Federal Deposit Insurance Corporation. Cash in money market funds is not federally insured. The Company had approximately
$11,000 and $5,000 in money market fund accounts at March 31, 2011 and December 31, 2010, respectively. The Company has not experienced
any losses in such accounts.
Bond Portfolio
The Company accounts for the bond portfolio
under the Accounting Standards Codification (ASC) 320. The Company classifies the bond portfolio as “available-for sale”
and measures the portfolio at fair value. While the bonds are generally held until contractual maturity, the Company classifies
them as available for sale as the bonds may be used to repay secured investor certificates or provide additional liquidity or working
capital in the short term. The Company has classified $789,000 and $627,000 in bonds as current assets as of March 31, 2011 and
December 31, 2010, respectively, based on management’s estimates for liquidity requirements and contractual maturities of
certain bonds maturing in 2011 and 2010, respectively.
Allowance for Mortgage Loans
Receivable
The Company records mortgage loans
receivable at estimated net realizable value, which is the unpaid principal balances of the mortgage loans receivable, less
the allowance for mortgage loans. The Company’s loan policy provides an allowance for estimated uncollectible loans
based on an evaluation of the current status of the loan portfolio. This policy reserves for principal amounts outstanding on
a particular loan if cumulative interruptions occur in the normal payment schedule of a loan; therefore, the Company
recognizes an allowance for losses and an allowance for the outstanding principal amount of a loan in the Company’s
portfolio if the amount is in doubt of collection. Additionally, no additional interest income is recognized on impaired
loans that are declared to be in default and are in the foreclosure process. At March 31, 2011, the Company reserved $757,392
for sixteen mortgage loans, of which ten are three or more mortgage payments in arrears. Three of the loans are in the
foreclosure process. At December 31, 2010, the Company reserved $711,829 for sixteen mortgage loans, of which ten were three
or more mortgage payments in arrears. Three of the loans were in the foreclosure process.
A summary of transactions in the allowance
for credit losses for the three months ended March 31, 2011 is as follows:
Balance at December 31, 2010
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$
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711,829
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Allowance for additional losses
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45,563
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Charge-offs
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|
-
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Balance at March 31, 2011
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$
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757,392
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The total impaired loans, which are loans that
are in the foreclosure process or are declared to be in default, were approximately $2,248,000 at both March 31, 2011 and December
31, 2010, which the Company believes are adequately secured by the underlying collateral and the allowance for mortgage loans.
Loans totaling approximately $3,009,000 and
$2,989,000 exceeded 90 days past due but continued to accrue interest as of March 31, 2011 and December 31, 2010, respectively.
The Company believes that continued interest accruals are appropriate because the loans are well secured, not deemed to be in default
and the Company is actively pursuing collection of past due payments.
Real Estate Held for Sale
The Company records real estate held for sale
at the estimated fair value, which is net of the expected expenses related to the sale of the real estate.
Carrying Value of Long-Lived Assets
The Company tests long-lived assets or asset
groups for recoverability when events or changes in circumstances indicate that the carrying amount may not be recoverable. Circumstances
which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant
adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally
expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history
of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will
more likely than not be sold or disposed of significantly before the end of the estimated useful life.
Recoverability is assessed based on the carrying
amount of the asset compared to the sum of the undiscounted cash flows expected to result from the use and the eventual disposal
of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is
deemed not recoverable and exceeds fair value as determined through various valuation techniques including, but not limited to,
discounted cash flow models, quoted market values, and third party independent appraisals.
Revenue Recognition
Interest income on mortgage loans receivable
and the bond portfolio is recognized as earned. Other income included with interest represents cash received for loan origination
fees, which are recognized over the life of the loan as an adjustment to the yield on the loan.
Deferred Financing Costs
The Company defers the costs related to obtaining
financing. These costs are amortized over the life of the financing using the straight line method, which approximates the effective
interest method.
Income Per Common Share
No adjustments were made to income for the
purpose of calculating earnings per share, as there were no potential dilutive shares outstanding.
2. FAIR VALUE MEASUREMENTS
The Company measures certain financial instruments
at fair value in our balance sheets. The fair value of these instruments is based on valuations that include inputs that can be
classified within one of the three levels of a hierarchy. Level 1 inputs include quoted market prices in an active market for identical
assets or liabilities. Level 2 inputs are market data, other than Level 1, that are observable either directly or indirectly. Level
2 inputs include quoted market prices for similar assets or liabilities, quoted market prices in an inactive market, and other
observable information that can be corroborated by market data. Level 3 inputs are unobservable and corroborated by little or no
market data.
Except for the bond portfolio, which is
required by authoritative accounting guidance to be recorded at fair value in our Balance Sheets, the Company elected not to
record any other financial assets or liabilities at fair value on a recurring basis. We recorded additional allowances for
losses on our St. Agnes and Agape bonds (Note 3), which totaled $0 and $200,000 for the periods ended March 31, 2011 and
December 31, 2010, respectively. Total allowance for losses on our bond portfolio equaled $700,000 at
March 31, 2011 and 2010.
The following table summarizes the Company’s financial
instruments that were measured at fair value on a recurring basis:
|
|
Fair Value
Measurement
|
March 31, 2011
|
Fair Value
|
Level 3
|
|
|
|
Bond portfolio
|
$10,288,047
|
$
10,288,047
|
|
|
Fair Value
Measurement
|
December 31, 2010
|
Fair Value
|
Level 3
|
|
|
|
Bond portfolio
|
$10,277,849
|
$
10,277,849
|
We determine the fair value of the bond portfolio
shown in the table above by comparing it with similar instruments in inactive markets. The analysis reflects the contractual terms
of the bonds, which
are callable at par by the issuer at any time, and the anticipated cash flows of the bonds, and uses observable
and unobservable market-based inputs. Unobservable inputs include our internal credit rating and selection of similar bonds for
valuation.
The change in Level 3 assets measured at fair value on a
recurring basis is summarized as follows:
|
Bond Portfolio
|
|
|
Balance at December 31, 2010
|
$10,277,849
|
Purchases
|
31,046
|
Proceeds
|
(20,848)
|
Allowance for losses
|
-
|
Balance at March 31, 2011
|
$
10,288,047
|
Real estate held for sale and impaired loans
are recorded at fair value on a nonrecurring basis. The fair value of real estate held for sale was based upon the listed sales
price less expected selling costs, which is a Level 2 input. The resulting impairment charges were $0 and $139,000 for the periods
ended March 31, 2011 and December 31, 2010, respectively.
The following table summarizes the Company’s financial
instruments that were measured at fair value on a nonrecurring basis:
|
March 31, 2011
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Fair Value at March 31,
2011
|
Impaired Loans
|
$ -
|
|
$ -
|
|
$1,840,000
|
|
$1,840,000
|
Real estate held for resale
|
-
|
|
727,132
|
|
-
|
|
727,132
|
|
$ -
|
|
$727,132
|
|
$1,840,000
|
|
$2,567,132
|
|
December 31, 2010
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Fair Value at December 31,
2010
|
Impaired Loans
|
$ -
|
|
$ -
|
|
$1,840,000
|
|
$1,840,000
|
Real estate held for resale
|
-
|
|
727,532
|
|
-
|
|
727,532
|
|
$ -
|
|
$727,532
|
|
$1,840,000
|
|
$2,567,532
|
The change in Level 2 and Level 3 assets measured at fair
value on a nonrecurring basis is summarized as follows:
|
Fair Value
Measurement
Level 3
|
Fair Value
Measurement
Level 2
|
|
|
|
|
Impaired Loans
|
Real Estate Held for Sale
|
|
|
|
Balance at December 31, 2010
|
$1,840,000
|
$727,532
|
Additions/Acquisitions
|
-
|
-
|
Dispositions/Proceeds
|
-
|
(400)
|
Allowance for other than temporary losses
|
-
|
-
|
Balance at March 31, 2011
|
$1,840,000
|
$
727,132
|
3. MORTGAGE LOANS RECEIVABLE AND BOND PORTFOLIO
At March 31, 2011, the Company had mortgage
loans receivable totaling $30,999,322. The loans bear interest ranging from 5.00% to 10.25% with a weighted average of approximately
8.36% at March 31, 2011. The Company had mortgage loans receivable totaling $31,430,505 that bore interest ranging from 5.00% to
10.25% with a weighted average of approximately 8.30% at December 31, 2010.
The Company has a portfolio of secured church
bonds at March 31, 2011 and December 31, 2010, which are carried at fair value. The bonds pay either semi-annual or quarterly interest
ranging from 5.25% to 10.40%. The aggregate value of secured church bonds equaled approximately $10,988,047 at March 31, 2011 with
a weighted average interest rate of 7.90% and approximately $10,991,000 at December 31, 2010 with a weighted average interest rate
of 7.92%. These bonds are due at various maturity dates through July 2039.
The contractual maturity schedule for mortgage
loans receivable and the bond portfolio as of March 31, 2011, is as follows:
|
Mortgage Loans
|
Bond Portfolio
|
|
|
|
April 1, 2011 through March 31, 2012
|
$ 960,497
|
$ 789,000
|
April 1, 2012 through December 31, 2012
|
463,159
|
183,000
|
2013
|
1,663,131
|
605,000
|
2014
|
851,656
|
681,000
|
2015
|
989,708
|
146,000
|
Thereafter
|
26,071,171
|
8,584,047
|
|
30,999,322
|
10,988,047
|
Less loan loss and bond loss allowances
|
(757,392)
|
(700,000)
|
Less deferred origination income
|
(561,113)
|
______-__
|
Totals
|
$
29,680,817
|
$
10,288,047
|
The Company currently owns $2,035,000
First Mortgage Bonds issued by St. Agnes Missionary Baptist Church located in Houston, Texas. The total principal amount of
First Mortgage Bonds issued by St. Agnes is $13,375,000. St. Agnes defaulted on its payment obligations to bondholders in
September 2007. The church subsequently commenced a Chapter 11 bankruptcy reorganization proceeding regarding the three
properties that secure the First Mortgage Bonds in November 2007, which was dismissed in September 2008, and the church was
subsequently foreclosed upon. The Company, along with all other bondholders, has a superior lien over all other creditors. No
accrual for interest receivable from the First Mortgage Bonds is recorded by the Company. The Company has an aggregate
allowance for losses of $600,000 for the First Mortgage Bonds at both March 31, 2011 and December 31, 2010, which effectively
reduces the bonds to the fair value amount management believes will be recovered. In March 2009, a lease was signed with St.
Agnes to permit it to remain in the property while submitting lease payments to bondholders as partial interest payments.
Lease payments began in the second quarter of 2009, however St. Agnes failed to make all required lease payments and was
evicted from the property in the first quarter of 2009. The trustee is currently preparing the three properties for sale.
The Company currently owns $637,000 First Mortgage
Bonds and $497,000 Second Mortgage Bonds issued by Agape Assembly Baptist Church located in Orlando, Florida. The total principal
amount of First Mortgage Bonds issued by Agape is $7,200,000, and the total principal amount of Second Mortgage Bonds issued is
$715,000. Agape defaulted on its payment obligations to bondholders in September 2010. The church subsequently commenced a Chapter
11 bankruptcy reorganization proceeding regarding the property that secures the First Mortgage Bonds in December 2010. The Company,
along with all other bondholders, has a superior lien over all other creditors. The Company has an allowance for losses of $100,000
for the First and Second Mortgage Bonds at both March 31, 2011 and December 31, 2010, which effectively reduces the bonds to the
fair value amount management believes will be recovered.
4. SECURED INVESTOR CERTIFICATES
Secured investor certificates are collateralized
by certain mortgage loans receivable or secured church bonds of approximately the same value as the certificates. The weighted
average interest rate on the certificates was 6.72% and 6.73% at March 31, 2011 and December 31, 2010, respectively. Holders of
the secured investor certificates may renew certificates at the current rates and terms upon maturity at the Company’s discretion.
Renewals upon maturity are considered neither proceeds from nor issuance of secured investor certificates. Renewals totaled approximately
$56,000 and $266,000 for the three months ended March 31, 2011 and 2010, respectively. The secured investor certificates have certain
financial and non-financial covenants indentified in the respective series’ trust indentures.
The estimated maturity schedule for the secured
investor certificates at March 31, 2011 is as follows:
|
|
|
April 1, 2011 through March 31, 2012
|
$ 892,000
|
|
April 1, 2012 through December 31, 2012
|
1,181,000
|
|
2013
|
1,155,000
|
|
2014
|
1,718,000
|
|
2015
|
1,663,000
|
|
Thereafter
|
17,958,000
|
|
|
|
|
Totals
|
$
24,567,000
|
|
In October 2008, the Company filed a registration
statement with the Securities and Exchange Commission to offer $20,000,000 worth of Series C secured investor certificates. The
offering was declared effective by the SEC on March 30, 2009 and was amended in January 2010. The certificates are being offered
in multiples of $1,000 with interest rates ranging from 4.50% to 7.25%, subject to changing market rates, and maturities from 4
to 7 and 13 to 20 years. The certificates are collateralized by certain mortgage loans receivable and church bonds of approximately
the same value. At March 31, 2011, approximately 2,824 Series C certificates had been issued for $2,824,000. The Company has also
issued 2,581 Series C certificates through its stock repurchase program (see Note 5).
5. STOCK REPURCHASE PROGRAM
The Company commenced a stock repurchase program
effective February 2, 2010 whereby it offers to shareholders on an ongoing basis (until terminated or modified by the Board of
Directors) an exchange of one $1,000 principal amount Series C secured investor certificate for 200 shares of common stock of the
Company, and, with respect to odd-lot holders above 200 shares converted into certificates, the sum of $5.00 cash for each remaining
share. This exchange ratio was determined by management and approved by the Board of Directors, and was established as a basis
for the completion of the exchange offer. This ratio was not intended to represent the amount at which the Company or any other
party would be expected to purchase common stock in an arm’s-length transaction. The Company’s Board of Directors has
approved up to 1,000,000 shares to be repurchased. As of March 31, 2011, requests representing approximately 532,000 shares have
been submitted for share exchanges. The Company exchanged 2,769 shares during the three months ended March 31, 2011 for 13 Series
C certificates ($13,000 in principal amount) and paid $845 in cash for remainder shares. The Company exchanged 528,974 shares during
the year ended December 31, 2010 for 2,568 Series C certificates ($2,568,000 in principal amount) and paid $76,870 in cash for
remainder shares. The cash paid is reflected on the Statements of Cash Flows as “stock redemptions.”
6. LINE OF CREDIT
The Company has a $1.42 million line of credit
with Beacon Bank. Interest is charged monthly at the rate of 6.00%. We had outstanding balances of $1,000,000 and $1,416,000 at
March 31, 2011 and December 31, 2010, respectively. The line of credit is secured by a first priority security interest in substantially
all of the Company’s assets other than collateral pledged to secure the Company’s Series
B and Series C secured investor
certificates. The maturity date for the line is December 31, 2011, but, at the Company’s election, may be extended to December
31, 2012 if one half of the outstanding balance at December 31, 2010 is paid by December 31, 2011. The line of credit has various
financial and non-financial covenants. At March 31, 2011, the Company was in compliance with financial and non-financial covenants.
7. TRANSACTIONS WITH AFFILIATES
The Company has an Advisory Agreement with
Church Loan Advisors, Inc. (the “Advisor”). The Advisor is responsible for the day-to-day operations of the Company
and provides office space and administrative services. The Advisor and the Company are related through common ownership and common
management. The Company paid the Advisor management fees of approximately $102,000 and $96,000 during the three month periods ended
March 31, 2011 and 2010, respectively.
8. FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company is required to disclose the fair
value information about financial instruments, where it is practicable to estimate that value. Because assumptions used in these
valuation techniques are inherently subjective in nature, the estimated fair values cannot always be substantiated by comparison
to independent market quotes and, in many cases, the estimated fair values could not necessarily be realized in an immediate sale
or settlement of the instrument.
The fair value estimates presented herein are
based on relevant information available to management as of March 31, 2011 and December 31, 2010, respectively. Management is not
aware of any factors that would significantly affect these estimated fair value amounts. As these reporting requirements exclude
certain financial instruments and all non-financial instruments, the aggregate fair value amounts presented herein do not represent
management’s estimate of the underlying value of the Company.
The estimated fair values of the Company’s
financial instruments, none of which are held for trading purposes, are as follows:
|
March 31, 2011
|
December 31, 2010
|
|
Carrying
|
Fair
|
Carrying
|
Fair
|
|
Amount
|
Value
|
Amount
|
Value
|
|
|
|
|
|
Cash and equivalents
|
$ 495,769
|
$ 495,769
|
$ 350,339
|
$ 350,339
|
Accounts receivable
|
149,807
|
149,807
|
112,209
|
112,209
|
Interest receivable
|
130,489
|
130,489
|
139,441
|
139,441
|
Mortgage loans receivable
|
29,680,817
|
29,933,549
|
30,145,838
|
29,650,126
|
Bond portfolio
|
10,288,047
|
10,288,047
|
10,277,849
|
10,277,849
|
Secured investor certificates
|
24,567,000
|
30,553,210
|
24,343,000
|
27,952,977
|
Line of credit
|
1,000,000
|
1,000,000
|
1,416,000
|
1,416,000
|
The following methods and assumptions were
used by the Company to estimate the fair value of each class of financial instrument for which it is practicable to estimate that
value:
Cash and equivalents
Due to their short-term nature, the carrying
amount of cash and cash equivalents approximates fair value.
Accounts receivable
The carrying amount of accounts receivable
approximates fair value.
Interest receivable
The carrying amount of interest receivable
approximates fair value.
Mortgage loans receivable
The fair value of the mortgage loans receivable
is currently less than the carrying value as the portfolio is currently yielding a lower rate than similar mortgages with similar
terms for borrowers with similar credit quality. The credit markets in which we conduct business have experienced an increase in
interest rates resulting in the fair value of the mortgage loans falling during the three months ended March 31, 2011.
Bond portfolio
We determine the fair value of the bond portfolio
shown in the table above by comparing with similar instruments in inactive markets. The analysis reflects the contractual terms
of the bonds, which are callable at par by the issuer at any time, and the anticipated cash flows of the bonds and uses observable
and unobservable market-based inputs. Unobservable inputs include our internal credit rating and selection of similar bonds for
valuation.
Secured investor certificates
The fair value of the secured investor certificates
is currently greater than the carrying value due to higher interest rates than current market rates.
Line of credit
The carrying amount of the line of credit approximates
fair value.
Item 2. Management’s Discussion and Analysis of Financial
Condition and Results of Operations
.
Safe Harbor Statement Under the Private
Securities Litigation Reform Act of 1995
Certain statements contained in this section
and elsewhere in this Form 10-Q constitute
“forward-looking statements”
within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements involve a number of known and unknown risks, uncertainties and other
factors which may cause our actual results, performance or achievements to be materially different from any future results, performance
or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, (i) trends
affecting our financial condition or results of operations; (ii) our business and growth strategies; (iii) the mortgage loan industry
and the financial status of religious organizations; (iv) our financing plans; and other risks detailed in the Company’s
other periodic reports filed with the Securities and Exchange Commission. The words
“believe”, “expect”,
“anticipate”, “may”, “plan”, “should”,
and similar expressions identify forward-looking
statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date
the statements were made and are not guarantees of future performance.
A detailed statement of risks and uncertainties
is contained in our reports to the SEC, including, in particular, our Annual Report on Form 10-K for the year ended December 31,
2010 and other public filings and disclosures. Investors and shareholders are urged to read these documents carefully.
Plan of Operation
We were founded in May 1994 and commenced active
business operations on April 15, 1996 after the completion of our initial public offering.
We have completed public offerings of common
stock and debt securities. In October 2008, we filed a registration statement with the Securities and Exchange Commission for a
public offering of $20,000,000 worth of Series C Secured Investor Certificates, which may be purchased in multiples of $1,000 at
interest rates ranging from 4.50% to 7.25%, subject to changing market rates, and maturities from 4 to 7 and 13 to 20 years. The
offering was declared effective by the Securities and Exchange Commission on March 30, 2010 and amended in January 2010. At March
31, 2011, approximately 2,824 Series C certificates had been issued for $2,824,000. The Company has also issued 2,581 Series C
certificates in connection with its stock repurchase program.
We currently have seventy-one first mortgage
loans aggregating $30,984,253 in principal amount, one second mortgage loan of $15,069 in principal amount and a first mortgage
bond portfolio with par values aggregating $11,001,500. Funding of additional first mortgage loans and purchase of first mortgage
bonds issued by churches is expected to continue on an on-going basis as more investable assets become available through: (i) future
sales of securities; (ii) prepayment and repayment at maturity of existing loans and bonds; and (iii) borrowed funds. The Company
has not made such investments since the fourth quarter of 2010 due principally to less than favorable conditions in the markets
in which our business is generally conducted. These capital sources and interest received on loans and bonds provide general working
capital to the Company.
Results of Operations
Net income for the Company’s three month
periods ended March 31, 2011 and 2010 was approximately $108,000 and $220,000, respectively, on total interest and other income
of approximately $788,000 and $900,000, respectively. Interest and other income is comprised of interest from loans, interest from
bonds, amortization of bond discounts and amortization of loan origination fees. As of March 31, 2011,
the Company’s loans
receivable have interest rates ranging from 5.00% to 10.25%, with an average, principal-adjusted interest rate of 8.36%. The Company’s
bond portfolio has an average current yield of 7.90% as of March 31, 2011. As of March 31, 2010, the average, principal-adjusted
interest rate on the Company’s portfolio of loans was 8.44% and the Company’s portfolio of bonds had an average current
yield of 7.72%. The decrease in interest income was due to the scheduled repayment of mortgage loans and the maturation and sale
of some of the bonds in our portfolio.
Interest expense was approximately $455,000
and $424,000 for the three month periods ended March 31, 2011 and 2010, respectively. The increase in interest expense was due
to the issuance of additional secured investor certificates. Net interest margin decreased from 52.88% to 42.23% resulting primarily
from a decline in interest and other income of approximately 12.00% compared to an increase in interest expense of approximately
7.42%.
We continually assess our
loan portfolio and reserve for potential losses based on the payment history, status of loans, and market conditions. Due to changing
economic conditions and the current status of and trends in our loan portfolio, which has seen a significant rise in both past
due loans and loans in the foreclosure process, we made changes to our loan policy in fiscal 2010 to permit us to accelerate the
recording of allowances when amounts become past due. In addition, we have written off accrued interest on certain loans as a result
of these changes. These changes to our loan loss policy have increased the amount of reserves against potential loan losses and
our expense of past due amounts that are deemed doubtful of collection.
Allowance for losses on mortgage loans receivable
increased during the three months ended March 31, 2011 as we recorded additional allowance against the mortgage loans. We recorded
an additional allowance for losses on loans during the three months ended March 31, 2011 of approximately $46,000 compared to approximately
$53,000 for the three months ended March 31, 2010. At March 31, 2011, we reserved approximately $727,000 for sixteen mortgage loans,
of which ten are three or more mortgage payments in arrears. Three of these loans are in the foreclosure process. At December 31,
2010, we reserved approximately $712,000 for sixteen mortgage loans, of which ten were three or more mortgage payments in arrears
and three were in the foreclosure process.
Our lending practices limit
deployment of our capital to churches and other non-profit religious organizations. The total principal amount of our second mortgage
loans is limited to 20% of our average invested assets. We currently have one second mortgage loan of approximately $15,000 in
principal amount outstanding. We do not loan to any borrower who has been in operation for less than two years and the borrower
must demonstrate they can service the debt outstanding for the prior three years based on historical financial statements. We do
not loan money based on projections or pledge programs. The loan amount to any borrower cannot exceed 75% loan to appraised value.
Typically, we do not loan over 70% loan to value except in extenuating circumstances. In addition, the borrower’s long-term
debt (including the proposed loan) cannot exceed four times the borrower’s gross income for the previous twelve month period.
Historically, loans in our
portfolio are outstanding for an average of four and a half years. Our borrowers are typically small independent churches with
little or no borrowing history. Once a church establishes a payment history with us, they look to refinance their loan with a local
bank, credit union or other financial institution which is willing to provide financing since the borrower has established a payment
history and have demonstrated they can meet their mortgage debt obligations.
Operating expenses for the three months ended
March 31, 2011 decreased to approximately $180,000 compared to $207,000 at March 31, 2010. The decrease is the result of lower
accounting fees and the fact that we did not sustain a capital loss on the sale of bonds from our portfolio as we did during the
three
months ended March 31, 2010. This is due to the fact that no bonds were sold during the three months ended March 31, 2011.
Mortgage Loans and Real Estate Held for
Sale
No mortgage loans were paid in full during
the three months ended March 31, 2011. No new loans were funded during the three months ended March 31, 2011.
The Company currently owns $2,035,000
First Mortgage Bonds issued by St. Agnes Missionary Baptist Church located in Houston, Texas. The total principal amount of
First Mortgage Bonds issued by St. Agnes is $13,375,000. St. Agnes defaulted on its payment obligations to bondholders in
September 2007. The church subsequently commenced a Chapter 11 bankruptcy reorganization proceeding regarding the three
properties that secure the First Mortgage Bonds in November 2007, which was dismissed in September 2008, and the church was
subsequently foreclosed upon. The Company, along with all other bondholders, has a superior lien over all other creditors. No
accrual for interest receivable from the First Mortgage Bonds is recorded by the Company. The Company has an aggregate
allowance for losses of $600,000 for the First Mortgage Bonds at both March 31, 2011 and December 31, 2010, which
effectively reduces the bonds to the fair value amount management believes will be recovered. In March 2009, a lease was
signed with St. Agnes to permit it to remain in the property while submitting lease payments to bondholders as partial
interest payments. Lease payments began in the second quarter of 2009, however St. Agnes failed to make all required lease
payments and was evicted from the property in the first quarter of 2010. The trustee is currently preparing the three
properties for sale.
The Company currently owns $637,000 First Mortgage
Bonds and $497,000 Second Mortgage Bonds issued by Agape Assembly Baptist Church located in Orlando, Florida. The total principal
amount of First Mortgage Bonds issued by Agape is $7,200,000, and the total principal amount of Second Mortgage Bonds issued is
$715,000. Agape defaulted on its payment obligations to bondholders in September 2010. The church subsequently commenced a Chapter
11 bankruptcy reorganization proceeding regarding the property that secures the First Mortgage Bonds in December 2010. The Company,
along with all other bondholders, has a superior lien over all other creditors. The Company has an allowance for losses of $100,000
for the First and Second Mortgage Bonds at both March 31, 2011 and December 31, 2010, which effectively reduces the bonds to the
fair value amount management believes will be recovered.
Dividends
We have elected to operate as a real estate
investment trust (REIT), therefore we are required, among other things, to distribute to shareholders at least 90% of “Taxable
Income” in order to maintain our REIT status. The dividends declared and paid to shareholders may include cash from origination
fees even though they are not recognized as income in their entirety for the period under generally accepted accounting principles
in the United States. We did not earn any origination fees for the three months ended March 31, 2011. We earned origination fees
of approximately $11,600 for the three months ended March 31, 2010.
We paid a dividend of $.10 for each share held
of record on January 25, 2011. The dividend, which was paid January 28, 2011, represents a 4.00% annual rate of return on each
share of common stock owned, assuming a purchase price of $10 per share.
Our Board of Directors declared a dividend
of $.11 for each share held of record on April 26, 2011. The dividend, which was paid April 29, 2011, represents a 4.40% annual
rate of return on each share of common stock owned, assuming a purchase price of $10 per share.
Liquidity and Capital Resources
We generate revenue through implementation
of our business plan of making mortgage loans to, and acquiring first mortgage bonds issued by, churches and other non-profit religious
organizations. Our revenue is derived principally from interest income, and secondarily through the origination fees and renewal
fees generated by the mortgage loans we make. We also earn income through interest on funds that are invested pending their use
in funding mortgage loans and on income generated on church bonds. Our principal recurring expenses are advisory fees, legal and
accounting fees, interest payments on secured investor certificates and our line of credit. Our liabilities at March 31, 2011 are
primarily comprised of: dividends declared as of March 31, 2011 but not yet paid; our line of credit balance; and our secured investor
certificates.
Our future capital needs are expected to be
met by: (i) the additional sale of securities; (ii) prepayment and repayment at maturity of mortgage loans we make; (iii) borrowed
funds; and (iv) bonds that mature or we sell from our bond portfolio. We believe that the “rolling” effect of mortgage
loans maturing and bond repayments will provide a supplemental source of capital to fund our business operations in future years.
Nevertheless, we believe that it may be desirable, if not necessary, to sell additional securities in order to enhance our capacity
to make mortgage loans on a continuous basis. There can be no assurance we will be able to raise additional capital on terms acceptable
for such purposes.
The Company has a $1.42 million line of
credit with Beacon Bank. Interest is charged monthly at the rate of 6.00%. We had outstanding balances of $1,000,000 and
$1,416,000 at March 31, 2011 and December 31, 2010, respectively. The line of credit is secured by a first priority security
interest in substantially all of the Company’s assets other than collateral pledged to secure the Company’s
Series B and Series C secured investor certificates. The maturity date for the line is December 31, 2011, but, at the
Company’s election, may be extended to December 31, 2012 if one half of the outstanding balance at December 31, 2010 is
paid by December 31, 2011. The line of credit has various financial and non-financial covenants. At March 31, 2011, the
Company was in compliance with financial and non-financial covenants. We will continue to pay the line of credit by either
(i) selling the bonds in our church bond portfolio; (ii) using proceeds from the sale of the secured investor
certificates; or (iii) use principal payments and pre-payments received from current borrowers.
In October 2008, we filed with the Securities
and Exchange Commission a registration statement to offer $20,000,000 worth of Series C Secured Investor Certificates to qualified
investors. The offering was declared effective by the Securities and Exchange Commission on March 30, 2009 and amended in January
2010. These certificates are expected to provide a source of capital to fund additional loans to qualified borrowers, pay down
existing maturing certificates and to pay down our line of credit which, at times, may provide funds at less favorable terms than
funds obtained through our certificate offering. At March 31, 2011, approximately $2,824,000 had been collected from the issuance
of 2,824 Series C certificates. The proceeds were used to pay down our line of credit and maturing certificates. We may also use
proceeds from the sale of secured investor certificates to pay dividends, if needed.
The Company commenced a stock repurchase program
effective February 2, 2010 whereby it offers to shareholders on an ongoing basis (until terminated or modified by the Board of
Directors) an exchange of one $1,000 principal amount Series C secured investor certificate for 200 shares of common stock of the
Company, and, with respect to odd-lot holders above 200 shares converted into certificates, the sum of $5.00 cash for each remaining
share. This exchange ratio was determined by management and approved by the Board of Directors, and was established as a basis
for the completion of the exchange offer. This ratio was not intended to represent the amount at which the Company or any other
party would be expected to purchase common stock in an arm’s-length transaction. The Company’s Board of Directors has
approved up to 1,000,000 shares to be repurchased. As of March 31, 2011, requests representing
approximately 532,000 shares have
been submitted for share exchanges. The Company exchanged 2,769 shares during the three months ended March 31, 2011 for 13 Series
C certificates ($13,000 in principal amount) and paid $845 in cash for remainder shares. The Company exchanged 528,974 shares during
the year ended December 31, 2010 for 2,568 Series C certificates ($2,568,000 in principal amount) and paid $76,870 in cash for
remainder shares.
During the three months ended March 31, 2011,
our total assets decreased by approximately $274,000 due to a decrease in mortgage loans receivable resulting from payments on
mortgage loans. Current liabilities decreased by approximately $388,000 for the three months ended March 31, 2011 due to decreases
in current maturities of our secured investor certificates and payments made on our line of credit balance. Non-current liabilities
increased by approximately $234,000 for the three months ended March 31, 2011 due to the sale, renewal and issuance through the
stock repurchase program of secured investor certificates.
For the three months ended March 31, 2011,
cash from operating activities decreased to approximately $165,000 from $306,000 from the comparative period ended March 31, 2010,
primarily related to decreases in the allowance for mortgage loans receivable, amortization of loan origination discounts and interest
receivable.
For the three months ended March 31,
2011, cash provided by investing activities was approximately $403,000 compared to cash provided by investing activities of
approximately $859,000 from the comparative three months ended March 31, 2010, due to an increase in collections of mortgage
loans, which was offset by a decrease in proceeds from bonds.
For the three months ended March 31, 2011,
cash used for financing activities decreased to approximately $422,000 from $836,000 for the comparative three months ended March
31, 2010, primarily due to a decrease in payments on our line of credit and secured investor certificate maturities.
Critical Accounting Estimates
Preparation of our financial statements requires
estimates and judgments to be made that affect the amounts of assets, liabilities, revenues and expenses reported. Such decisions
include the selection of the appropriate accounting principles to be applied and the assumptions on which to base accounting estimates.
We evaluate these estimates based on assumptions we believe to be reasonable under the circumstances.
The difficulty in applying these policies arises
from the assumptions, estimates and judgments that have to be made currently about matters that are inherently uncertain, such
as future economic conditions, operating results and valuations as well as management intentions. As the difficulty increases,
the level of precision decreases, meaning that actual results can and probably will be different from those currently estimated.
Management uses estimates and assumptions in
preparing these financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions
affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues
and expenses. Actual results could differ from those estimates. The most sensitive estimates relate to the realizability of the
mortgage loans receivable and the valuation of the bond portfolio and real estate held for sale. It is at least reasonably possible
that these estimates could change in the near term and that the effect of the change, if any, may be material to the financial
statements.
We estimate the value of real estate we hold
pending re-sale based on a number of factors. We look at the current condition of the property as well as current market conditions
in determining a fair value, which will determine the listing price of each property. Each property is valued based on its current
listing price less any anticipated selling costs, including for example, realtor commissions. Since churches are single use facilities
the listing price of the property may be lower than the total amount owed to us. Attorney fees, taxes, utilities along with real
estate commission fees will also reduce the amount we collect from the sale of a property we have acquired through foreclosure.
The fair value of the real estate held for sale includes estimates of expenses related to the sale of the real estate.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
Items 4. Controls and Procedures
Disclosure Controls and Procedures
An evaluation was carried out under the supervision
and with the participation of the Company’s management, including the principal executive officer and the principal accounting
officer, of the effectiveness of the Company’s disclosure controls and procedures as of the end of the quarter ended March
31, 2011. Based on that evaluation, the principal executive officer and the principal accounting officer concluded that the Company’s
disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by
the Company in reports that it files or submits under the Securities and Exchange Commission is recorded, processed, summarized
and reported within the time periods specified in Securities and Exchange Commission rules and forms and that information required
to be disclosed in reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including
our principal accounting officer, to allow timely decisions regarding required disclosure.
Changes in Internal Controls Over Financial
Reporting
During the three months ended March 31, 2011,
there were no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably
likely to materially affect, its internal control over financial reporting.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
.
None.
Item 1A. Risk Factors.
Not applicable.
Item 2. Unregistered Sales of Equity Securities and
Use of Proceeds
.
(a)
Not Applicable
(b)
Not Applicable
(c)
Issuer Purchases of Equity Securities*
Period
|
Total Number of Shares Purchased
|
Average Price Paid Per Share
|
Total Number of Shares Purchased as Part
of Publicly Announced Plan
|
Maximum Number of Shares that May Yet Be Purchased Under the Plan
|
January 1, 2011 to
January 31, 2011
|
0
|
$5.00
|
0
|
471,026
|
February 1, 2011 to
February 28, 2011
|
0
|
$5.00
|
0
|
471,026
|
March 1, 2011 to March 31, 2011
|
2,769
|
$5.00
|
2,769
|
468,257
|
Totals:
|
2,769
|
|
2,769
|
|
*The Company commenced a stock repurchase
program effective February 2, 2010 whereby it offers to shareholders on an ongoing basis (until terminated or modified by the Board
of Directors) an exchange of one $1,000 principal amount Series C secured investor certificate for 200 shares of common stock of
the Company, and, with respect to odd-lot holders after conversion, we paid the sum of $5.00 cash for each remaining share. The
Company’s Board of Directors has approved up to 1,000,000 shares to be repurchased. The Company exchanged 2,769 shares during
the three months ended March 31, 2011 for 13 Series C certificates ($13,000 in principal amount) and paid $845 in cash for remainder
shares.
Item 3. Defaults Upon Senior Securities
.
None.
Item 4. (Removed and Reserved)
.
Item 5. Other Information
.
None.
Item 6. Exhibits
Exhibit
Number
Title of Document
31.1 Certification of the Chief
Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 Certification of the Chief
Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 Certification
of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the of the Sarbanes-Oxley
Act of 2002.
32.2 Certification of the Chief
Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the of the Sarbanes-Oxley Act of 2002.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused the report to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: May
13, 2011
|
AMERICAN CHURCH MORTGAGE COMPANY
|
|
|
|
|
By:
|
/s/ Philip J. Myers
|
|
|
Philip J. Myers
|
|
|
Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
By:
|
/s/ Scott J. Marquis
|
|
|
Scott J. Marquis
|
|
|
Chief Financial Officer and Treasurer
|
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
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