SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
- -------------------------------------------------------------------------------
[X] Quarterly Report Under Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Quarterly Period Ended June 30, 1997
or
[ ] Transition Report Under Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Transition Period from ------------to------------
- -------------------------------------------------------------------------------
Commission File Number 33-87570
I.R.S. Employer Identification Number 41-1793975
American Church Mortgage Company
Incorporated Under the Laws of the State of Minnesota
10237 Yellow Circle Drive
Minnetonka, MN 55343
Telephone: (612) 945-9455
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 requirements
for the past 90 days. Yes X No
The number of shares outstanding of the Registrant's stock as of
July 31, 1997 was:
368,066 Shares of Common Stock Outstanding
1
<PAGE>
AMERICAN CHURCH MORTGAGE COMPANY
<TABLE>
<CAPTION>
INDEX Page
No.
PART I. FINANCIAL INFORMATION
<S> <C>
Item 1. Financial Statements:
Balance Sheets June 30, 1997 and 1996.............................................3
Statements of Operations
Six Month Periods Ending June 30, 1997 and 1996................................ 4
Interim Three Month Periods Ending
June 30, 1997 and 1996...................................................4
Statements of Cash Flows
Six Months Ended June 30, 1997 and 1996.........................................5
Statement of Stockholders Equity..................................................6
Notes to Financial Statements ................................................... 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations ............................................ 11
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.......................................13
Item 6. Exhibits and Reports on Form 8-K .........................................................13
Signatures'......................................................................13
</TABLE>
2
<PAGE>
AMERICAN CHURCH MORTGAGE COMPANY
UNAUDITED BALANCE SHEETS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
June 30, June 30,
1997 1996
<S> <C> <C>
Assets:
Current Assets
Cash and Cash Equivalents.............................. $ 155,366 $ 428,025
Prepaid Expense........................................ 6,145 695
Current Maturities of Loans Receivable................ 66,682 32,834
---------- -----------
Total current Assets: 228,193 461,554
Loans Receivable, net of current maturities............ 3,095,425 1,773,197
Bonds receivable....................................... 122,700 72,805
Deferred Tax Asset..................................... 15,000 - 0 -
Organizational Expenses, (net of accumulated
amortization June 30, 1997, $935; June
30, 1996, $632)...................................... 616 920
---------- -----------
Total Assets: $ 3,461,934 $ 2,308,476
========== ===========
Liabilities and Shareholder's Equity:
Current Liabilities:
Accounts Payable....................................... $ 13,060 $ 4,379
Deferred Income........................................ 8,167 5,523
Dividends Payable...................................... 83,378 46,667
---------- ----------
Total current Liabilities:......................... 104,605 56,569
Deferred Income........................................ 40,440 24,505
Shareholder's Equity
Common stock, par value $.01 per share; authorized
30,000,000 shares; issued and outstanding 365,389
as of June 30, 1997, 250,170 shares as of
June 30, 1996..................................... 3,654 2,502
Additional Paid in Capital............................. 3,362,364 2,256,620
Accumulated deficit.................................... (49,129) (31,720)
--------- ----------
Total Shareholders Equity: 3,316,889 2,227,402
--------- ----------
$ 3,461,934 $ 2,308,476
========= ==========
</TABLE>
Notes to Financial Statements are an integral part of this Statement.
3
<PAGE>
AMERICAN CHURCH MORTGAGE COMPANY
UNAUDITED STATEMENTS OF OPERATIONS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30, June 30, June 30, June 30,
1997 1996 1997 1996
-------- -------- -------- -------
<S> <C> <C> <C> <C>
Revenues
Interest Income Loans........................... $ 141,830 $ 22,661 $ 80,586 $ 22,661
Interest Income Other........................... 13,977 7,179 6,807 5,909
Capital Gains Realized.......................... 2,060 - 0 - 1,053 - 0 -
Origination Income.............................. 5,523 3,027 2,490 3,027
Escrow Interest Income.......................... - 0 - 37,477 - 0 - 15,076
------------ -------- -------- -------
Total Revenues: 163,390 70,344 90,936 46,673
Expenses
Professional fees............................... 7,600 5,778 6,370 5,778
Director fees................................... 800 - 0 - - 0 - - 0 -
Amortization.................................... 152 152 76 76
Advisory Fees................................... - 0 - 3,714 - 0 - 3,714
Other........................................... 4,137 39,908 2,386 16,454
--------- --------- ------- -------
Total Expenses: 12,689 49,552 8,832 26,022
Provision for (Benefit from )
Income Taxes....................................... 5,000 - 0 - 5,000 - 0 -
--------- --------- -------- -------
Net Income (loss).................................... $ 145,701 $ 20,792 $ 77,104 $ 20,651
======== ========= ======= =======
Income (Loss) Per Common Share....................... $ .40 $ .19 $ .21 $ .10
Weighted Average Common Shares
Outstanding.................................... 361,809 112,341 362,491 204,681
Dividends Declared................................... $ 164,936 $ 46,667 $ 83,378 $ 46,667
</TABLE>
Notes to Financial Statements are an integral part of this Statement.
4
<PAGE>
AMERICAN CHURCH MORTGAGE COMPANY
UNAUDITED STATEMENTS OF CASH FLOWS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Six For the Six
Months Ended Months Ended
June 30, June 30,
1997 1996
<S> <C> <C>
Cash Flows From Operating Activities
Net Income (Loss) $ 145,701 $ 20,792
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Deferred income taxes 5,000
Amortization 153 151
Earnings on Bonds (2,060)
Change in assets and liabilities:
Increase in prepaid expenses (6,145) (695)
Decrease in accounts payable (422) (45,114)
Increase in origination income payable 5,000
Increase in deferred income 2,677 30,028
---------- ----------
Net cash used in operating activities 149,904 5,162
Cash Flows From Investing Activities
Investment in mortgage loans (526,712) (1,817,000)
Collections of mortgage loans 25,429 10,969
Investment in bonds - 0 - (72,805)
---------- -----------
Net cash used for investing activities (501,283) (1,878,836)
Cash Flows From Financing Activities
Proceeds from stock offering - 0 - 2,166,417
Dividends Paid (105,999)
Net cash from (used for) financing activities (105,999) 2,166,417
---------- ----------
Net increase (Decrease) in Cash (457,378) 292,743
Cash
Beginning of period 612,744 135,282
---------- ----------
End of period $ 155,366 $ 428,025
========== ==========
Supplemental Schedule of Noncash
Financing Activities
Dividends declared but not paid $ 83,378 $ 46,667
Deferred offering costs reclassified to additional
paid-in capital $ 107,295
Dividends reinvested $ 55,983
Supplemental Cash Flow Information
Cash paid during the period for
Interest - 0 - - 0 -
Income Taxes - 0 - - 0 -
</TABLE>
Notes to Financial Statements are an integral part of this Statement.
5
<PAGE>
AMERICAN CHURCH MORTGAGE COMPANY
UNAUDITED STATEMENT OF STOCKHOLDER'S EQUITY
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Additional
Common Stock Paid-In Accumulated
Shares Amount Capital Deficit
<S> <C> <C> <C> <C>
Balance, December 31, 1996 359,791 $ 3,598 $ 3,306,437 $ (29,894)
Issuance of 5,598 shares of
common stock, net of
offering costs 5,598 56 55,927
Net Income 145,701
Dividends declared (164,936)
------- -------- --------- ---------
Balance, June 30, 1997 (unaudited) 365,389 $ 3,654 $ 3,362,364 $ (49,129)
</TABLE>
Notes to Financial Statements are an integral part of this Statement.
6
<PAGE>
AMERICAN CHURCH MORTGAGE COMPANY
NOTES TO UNAUDITED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
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 a 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 a fair presentation of the financial position,
results of operations, and cash flows for the period presented.
The unaudited consolidated financial statements of the Company should be read in
conjunction with its December 31, 1996, audited financial statements included in
the Company's Annual Report on Form 10-KSB, as filed with the Securities and
Exchange Commission for the year ended December 31, 1996.
Nature of Business
American Church Mortgage Company, a Minnesota corporation, was incorporated on
May 27, 1994. The Company was organized to engage in the business of making
mortgage loans to churches an other nonprofit religious organizations throughout
the United States, on terms that it establishes for individual organizations.
The Company concluded its public stock offering in November 1996 and commenced
its principal business activities early in 1996.
Accounting Estimates
Management uses estimates and assumptions in preparing these financial
statements in accordance with generally accepted accounting principals. 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.
Cash
The Company considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents. The Company maintains
some cash in bank deposit accounts which, at times, may exceed federally insured
limits. The Company has not experienced any losses in such accounts.
Marketable Securities
The Company accounts for its debt securities under Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and Equity
Securities." The Company classifies its marketable debt securities as
"held-to-maturity" because it has the intent and ability to hold the securities
to maturity. Securities classified as held-to-maturity are carried at amortized
cost.
Allowance for Loans Receivable
The Company follows a policy of providing an allowance for loans receivable.
However, at June 30, 1997, management believes the loans receivable to be
collectible in all material respects.
Deferred Income
Deferred income represents loan origination fees which are recognized over the
life of the loan as an adjustment to the yield on the loan.
7
<PAGE>
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
Income Taxes
Income taxes are provided for the tax effects of transactions reported in the
financial statements and consist of taxes currently due plus deferred taxes
related primarily to differences in recognition of income from loan origination
fees for financial and income tax reporting. Deferred taxes are recognized for
operating losses that are available to offset future taxable income.
For fiscal 1996, the Company will elect to be taxed as a Real Estate Investment
Trust (REIT). Accordingly, the Company will not be subject to Federal income tax
to the extent of distributions to its shareholders if the Company meets all the
requirements under the REIT provisions of the Internal Revenue Code.
Income (Loss) Per Common Share
Income (loss) per common share is computed based upon the weighted average
number of common and dilutive common equivalent shares outstanding during the
period. Fully diluted and primary income (loss) per common share are the same
for the periods presented.
Newly Issued Accounting Standards
In February 1997, Statement of Financial Accounting Standards No. 128, "Earnings
Per Share" was approved for issuance. The Company will adopt this Statement in
fiscal 1997. The effect of this Statement has not been determined, however, the
impact on the Company's financial position and results of operations is not
expected to be material.
2. MORTGAGE AND BONDS RECEIVABLE
At June 30, 1997, the Company had funded eight first mortgage loans and one
second mortgage loan to churches for an aggregate amount of $3,212,000. The
first mortgage loans made by the Company range in interest rates charged to the
borrowers from 9.75% for annually adjustable 20 year amortized loans to 11.25%
for 15 year fixed interest rate loans. The second mortgage loan made by the
Company bears interest at the rate of 15% (adjusting to 12% upon occurrence of a
continency). The maturity schedule for those loans as of June 30, 1997 is as
follows:
<TABLE>
<CAPTION>
<S> <C>
1997 $ 66,682
1998 174,383
1999 82,978
2000 92,567
2001 103,266
Thereafter 2,642,231
---------
Total $3,162,107
</TABLE>
The Company also has three bonds receivable, which are carried at cost plus
amortized interest income. The bonds pay quarterly interest ranging from 8.5% to
9.55%. The combined principal of $150,000 is due at various maturity dates
between May 15, 2001 and June 1, 2010.
3. STOCK OPTION PLAN
The Company has adopted a Stock Option Plan granting each member of the Board of
Directors and the president of the Advisor (Note 5) an option to purchase 3,000
shares of common stock annually upon their re-election. The purchase price of
the stock will be the fair market value at the grant date. On November 15, 1994,
the Company granted options to purchase an aggregate of 21,000 shares of common
stock at $10 per share. These options became exercisable November 15, 1995 and
expire November 15, 1999. No options have been exercised as of June 30, 1997.
The Company has chosen to account for stock based compensation in accordance
with APB Opinion 25. Management believes that the disclosure requirements of
Statement of Financial Accounting Standards No. 123 are not material to its
financial statements.
8
<PAGE>
4. TRANSACTIONS WITH AFFILIATES
The Company has an Advisory Agreement with Church Loan Advisors, Inc. (Advisor).
The Advisor is responsible for the day-to-day operations of the Company and
provides administrative services and personnel.
Upon non-renewal or termination of the Advisory Agreement, the Company is
required to pay the Advisor a termination fee equal to two percent of the value
of the average invested assets of the Company as of the date of termination,
subject to limitations set forth in the Advisory Agreement.
The Company pays the Advisor an annual base management fee of 1.25 percent of
average invested assets (generally defined as the average of the aggregate book
value of the assets invested in securities and equity interests in and loans
secured by real estate), which is payable on a monthly basis. The Advisor will
also receive one-half of the origination fees paid by a mortgage loan borrower,
in connection with a mortgage loan made or renewed by the Company. The Company
paid no advisory or origination fees from January 1 through June 30, 1997.
The Advisor and the Company are related through common ownership and common
management. See Note 6.
5. INCOME TAXES
The income tax expense (benefit) consists of the following components:
<TABLE>
<CAPTION>
June 30
1997 1996
---- ----
<S> <C> <C>
Current $ - $ -
Deferred 5,000 -
------ -----
Total tax expense (benefit) $ 5,000 $ -
====== =====
</TABLE>
The following reconciles the income tax benefit with the expected provision
obtained by applying statutory rates to pretax income:
<TABLE>
<CAPTION>
June 30,
1997 1996
<S> <C> <C>
Expected tax expense (benefit) $ 51,000 $ (300)
(Increase) decrease in valuation allowance 300
Benefit of REIT distributions (46,000)
--------
Totals $ 5,000 $ -
======== ====
</TABLE>
The components of deferred income taxes are as follows:
<TABLE>
<CAPTION>
June 30,
1997 1996
<S> <C> <C>
Deferred tax assets:
Temporary differences (loan origination fees) $ 14,000
Net operating loss carry-forward 1,000 $ 1,600
Valuation allowance - (1,600)
--------- -----
Net deferred tax asset $ 15,000 $ -
========= =====
</TABLE>
The Company increased the valuation allowance by $300 at June 30, 1996.
9
<PAGE>
6. PUBLIC OFFERING OF THE COMPANY'S COMMON STOCK
The Company filed a Registration Statement with the Securities and Exchange
Commission for a public offering of its common stock in 1995. The Company
offered to sell 2,000,000 shares of its common stock at a price of $10 per
shares. The offering was underwritten by an affiliate of the Advisor on a "best
efforts" basis. The Company's initial public offering of its shares was
completed in November 1996.
7. FAIR VALUE OF FINANCIAL INSTRUMENTS
The estimated fair values of the Company's financial instruments, none of which
are held for trading purposes, are as follows at June 30, 1997 and 1996:
<TABLE>
<CAPTION>
June 30,
1997 1996
------------------------- --------------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
<S> <C> <C> <C> <C>
Cash and equivalents $ 155,366 $ 155,366 $ 428,025 $ 428,025
Loans receivable 3,162,107 3,162,107 1,806,031 1,806,031
Bonds receivable 122,700 122,700 72,805 72,805
</TABLE>
The carrying value of cash and equivalents approximates fair value. The fair
value of the loans receivable and the bonds receivable are estimated by
discounting future cash flows using current discount rates that reflect the
risks associated with similar types of loans.
8. SUBSEQUENT EVENT
The Company is planning for a secondary public offering of its common stock
during the third quarter of 1997. The Company is registering with the Securities
and Exchange Commission 1,500,000 shares of common stock to be offered to the
public at $10.00 per share.
10
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Plan of Operation
The Company was founded in May 1994, began a "best efforts" offering of
its common stock on July 11, 1995, and commenced active business operations on
April 15, 1996 after completion of the "Minimum Amount" in its public offering
(described below). Consequently, for the years ended December 31, 1994 and 1995,
the Company had no operating revenues, and expenses were limited to
organizational and offering-related costs.
On July 11, 1995, the Securities and Exchange Commission declared
effective the Company's offering of 2,000,000 common shares at a price of $10.00
per share. The Company achieved the Minimum Offering of at least 200,000 shares
($2,000,000) sold to not less than 100 individuals (the "Minimum Offering") on
April 15, 1996. Until the Minimum Offering was achieved, the Company could not
commence its active business of making mortgage loans to churches. Consequently,
business operations from Inception (May 27, 1994) to completion of the Minimum
Offering (April 15, 1996) were limited to daily business organizational efforts,
activities relating to the offering, reviewing potential candidates for church
mortgage loans to be made by the Company once the Minimum Offering was achieved,
and conducting informational meetings with brokers and broker-dealers identified
to the Company by the Managing Underwriter. As of such date the Company had sold
335,481 shares to approximately 281 individuals, not including 20,000 shares
($200,000) previously purchased by the Company's initial shareholder -- DRM
Holdings, Inc.
Between the date upon which the Company began active business
operations (April 15, 1996) and July 1, 1997, the Company made loans to nine
churches in the aggregate amount of $3,212,000, with the average size being
$357,000. The Company has also purchased in the secondary market three church
mortgage bonds at a discount, including two First Mortgage Church Bonds in the
face amount of $50,000 and one Second Mortgage Church Bond in the face amount of
$100,000. Funding of additional first mortgage loans is expected to continue on
an on-going basis as the Company's investable assets become available through
(i) the sale of additional shares; (ii) prepayment and repayment at maturity of
existing loans; (iii) borrowed funds; and (iv) dividends reinvested under the
Company's Dividend Reinvestment Plan. The Company's initial public offering
ended November 8, 1996.
Results of Operations
The Company commenced active business operations on or about April 15,
1996, therefore, results of operations through December 31, 1996 are reflective
of approximately 255 days of operations. As of July 1, 1997, the Company had
funded eight first mortgage loans and one second mortgage loan to churches for
an aggregate amount of $3,212,000 and purchased $50,000 principal amount of
First Mortgage Church Bonds for a purchase price of $46,412 (which includes $407
in accrued interest), and for $72,805 Second Mortgage Church Bonds in the face
amount of $100,000. The first mortgage loans made by the Company range in
interest rate charged to the borrowers from 9.75% for annually adjustable 20
year amortized loans to 11.25% for 15 year fixed interest rate loans. The second
mortgage loan made by the Company bears interest at the rate of 15% (adjusting
to 12% upon occurrence of a contingency). As of July 1, 1997, the average,
principal-adjusted interest rate on the Company's portfolio of loans was 11.05%
and the average current yield on the Company's portfolio of bonds was 11.68% .
Net operating income for the six months ended June 30, 1997 was
$145,701 ($.40 per share) on total revenues of $163,390. Revenues included
segments of income from interest paid by borrowers, capital gains and
origination income, all of which constitute the Company's "core" income segments
under its business plan. Operations expenses likewise are believed to be
reasonably reflective of the Company's expected on-going expenses which, for the
most part, consist mostly of the Advisory Fee. The Advisory Fee absorbs all
operating expenses of the Company with the exception of professional fees,
director fees and costs related to capital-raising activities. It should be
noted, that the Advisor waived $17,785 in fees otherwise payable to it during
the six month period ended June 30, 1997. Comparison of the six month period
ended June 30, 1997 with 1996 is not believed to be illustrative because the
Company had negligible business operations for the period ended June 30, 1996.
The Company's Board of Directors declared dividends to Shareholders of
$.1927 for each share held of record on June 30, 1996, $.23125 for each share
held of record September 30, 1996, and $.240625 for each share held of record on
December 31, 1996. During the Company's public offering, dividends were computed
and paid to each Shareholder based on the number of days during a quarter that
the Shareholder owned his or her shares. Based on the 75 days of operation for
11
<PAGE>
the quarter ending June 30, 1996 and the subsequent quarters ended September 30,
1996 and December 31, 1996, the dividends paid represented a 9.25%, 9.25% and
9.625% annualized yield to Shareholders respectively. For the quarters ended
March 31, 1997 and June 30, 1997, the Board of Directors declared dividends to
Shareholders of $.225 per share and $.22875 per share respectively, representing
a 9.00% and 9.15% annualized yield to Shareholders, respectively.
Total assets of the Company increased from $2,308,746 as of June 30,
1996 to $3,461,934 as of June 30, 1997, primarily as a result of the sale and
issuance of the Company's common stock pursuant to its initial public offering,
the proceeds of which were deployed into mortgage loans, church bonds purchased
in the secondary market, and cash and cash equivalent money market obligations.
Shareholders' Equity rose from $2,227,402 to $3,316,889 for the same reason.
Company liabilities at the end of the sixth month period ended June 30, 1997 are
primarily comprised of a "Deferred Income" item, reflecting the practice of the
Company of recognizing its origination income -- fees charged to borrowers at
the commencement of its loans -- over the life of each loan, and dividends
declared as of June 30, 1997 but not yet paid. Total assets of the Company as of
June 30, 1997 were $3,461,934.
Liquidity and Capital Resources
On March 31, 1996 the Company had no assets other than the $200,000
cash paid by its promoter, DRM Holdings, for the 20,000 shares owned by it
($10.00 per share) and had incurred no material obligations, other than
accumulated and unpaid expenses pertaining to its initial public offering. The
initial $200,000 capital contribution by DRM Holdings, Inc. was partially used
to pay legal and accounting costs relating to the organization of the Company,
Independent Director's fees and certain professional and other fees and costs
associated with the Company's initial public offering. On or about April 15,
1996, the Company recorded additional paid-in capital of $2,019,205 in
connection with the sale of the Company's common stock in its initial public
offering and began active business operations. As of June 30, 1997, the Company
had recorded a total of $3,362,364 in additional paid in capital, which includes
the initial $200,000 investment by DRM Holdings, Inc.
On June 30, 1997 the Company had liquid assets consisting mainly of
cash and cash equivalents of approximately $155,366, substantially all of which
was available to be loaned by the Company; loans receivable (including current
portion) in the amount of $3,162,107; and church bonds receivable in the amount
of $122,700. The Company believes that it is unnecessary for the Company to
maintain large amount of cash or cash equivalents for reserve or other purposes,
since most operational costs are included within the Advisory Fee paid to the
Advisor. Therefore, the intent of the Company is to deploy materially all of the
Company's assets into loans in order to maximize returns to the Company and
yields to its Shareholders.
The Company's revenue is derived principally from interest income, and
secondarily, origination fees and renewal fees generated by mortgage loans made
by it. The Company also earns income through interest on funds that are invested
pending their use in funding mortgage loans or distributions of dividends to its
Shareholders, and on income generated on church bonds it may purchase and own.
The Company generates revenue through (i) Permitted Temporary Investments of the
net proceeds from the sale of Shares, and (ii) implementation of its business
plan of making mortgage loans to churches and other non-profit religious
organizations. The principal expenses of the Company will be Advisory Fees,
legal and accounting fees, communications costs with its Shareholders, and the
expenses of its stock transfer agent, registrar and dividend reinvestment agent.
The Company's future capital needs are expected to be met by (i)
additional sale of its shares to the public (ii) prepayment, repayment at
maturity and renewal of mortgage loans made by the Company, and (iii) borrowed
funds. The Company believes that the "rolling" effect of mortgage loans
maturing, together with dividends reinvested under the Company's Dividend
Reinvestment Plan, will provide a supplemental source of capital to fund
business operations. Although the Company may borrow funds in an amount not to
exceed 50% of its Average Invested Assets in order to increase its lending
capacity, it has not secured a source for such borrowing.
12
<PAGE>
PART II
OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the
quarter ended March 31, 1997.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits filed with Form 10-QSB
None
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: August 8, 1997
AMERICAN CHURCH MORTGAGE COMPANY
By: /s/ V. James Davis
V. James Davis
Chief Executive Officer, Treasurer
(and Chief Financial Officer)
By: /s/ David G. Reinhart
David G. Reinhart
Vice President and Secretary
13
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 155,366
<SECURITIES> 122,700
<RECEIVABLES> 3,162,107
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 228,193
<PP&E> 0
<DEPRECIATION> 616
<TOTAL-ASSETS> 3,461,934
<CURRENT-LIABILITIES> 104,605
<BONDS> 0
0
0
<COMMON> 3,654
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 3,461,934
<SALES> 0
<TOTAL-REVENUES> 163,390
<CGS> 0
<TOTAL-COSTS> 12,689
<OTHER-EXPENSES> 5,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 150,701
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 145,701
<EPS-PRIMARY> .40
<EPS-DILUTED> 0
</TABLE>
