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, 1999
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, 1999 was:
1,196,904 Shares of Common Stock Outstanding
1
<PAGE>
AMERICAN CHURCH MORTGAGE COMPANY
INDEX Page
No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Balance Sheets June 30, 1999 and 1998......................... 3
Statements of Operations
Six Month Periods Ending June 30, 1999 and 1998.............. 4
Interim Three Month Periods Ending
June 30, 1999 and 1998...................................... 4
Statements of Cash Flows
Six Months Ended June 30, 1999 and 1998...................... 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 ......................... 10
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders............. 12
Item 6. Exhibits and Reports on Form 8-K ............................... 12
Signatures'..................................................... 12
2
<PAGE>
Item 1. Financial Statements:
AMERICAN CHURCH MORTGAGE COMPANY
UNAUDITED BALANCE SHEETS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
June 30, June 30,
1999 1998
Assets:
Current Assets
<S> <C> <C>
Cash and Cash Equivalents.............................. $ 1,137,573 $ 1,248,563
Current Maturities of Bonds Receivable................. 15,000 4,933
Current Maturities of Loans Receivable................ 171,056 69,723
------------ -----------
Total current Assets: 1,323,629 1,323,219
Bonds Receivable, net of Current Maturities............ 1,918,901 6,649,312
Loans Receivable, net of Current Maturities............ 7,962,561 134,334
Deferred Tax Asset..................................... 40,000 33,000
Deferred Offering Costs................................ 10,841 3,977
Organizational Expenses, (net of accumulated
amortization June 30, 1999, $1,542; June
30, 1998, $1,239).................................... 9 313
------------ -----------
Total Assets: $ 11,255,941 $ 8,144,155
=========== ===========
Liabilities and Shareholder's Equity:
Current Liabilities:
Accounts Payable....................................... $ 26,180 $ 65,254
Escrow Funds Payable................................... - 0 - 365,087
Deferred Income........................................ 32,644 14,515
Dividends Payable...................................... 259,858 174,631
----------- ----------
Total current Liabilities:......................... 318,682 619,487
Deferred Income........................................ 127,499 91,100
Shareholder's Equity
Common stock, par value $.01 per share; authorized
30,000,000 shares; issued and outstanding 1,189,823
as of June 30, 1999, 819,722 shares as of
June 30, 1998..................................... 11,898 8,197
Additional Paid in Capital............................. 10,933,876 7,510,415
Accumulated deficit.................................... (136,014) (85,044)
----------- -----------
Total Shareholders Equity: 10,809,760 7,433,568
---------- -----------
$ 11,255,941 $ 8,144,155
========== ===========
</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,
1999 1998 1999 1998
Revenues
<S> <C> <C> <C> <C>
Interest Income Loans........................... $ 358,207 $ 285,661 $ 193,699 $ 153,906
Interest Income Other........................... 103,611 23,846 58,817 15,539
Capital Gains Realized.......................... 13,458 2,514 11,998 1,319
Origination Income.............................. 16,090 14,439 9,554 10,056
-------- --------- --------- --------
Total Revenues: 491,366 326,460 274,068 180,820
Expenses
Professional fees............................... 13,303 7,780 10,971 7,015
Director fees................................... 1,600 1,600 800 800
Amortization.................................... 152 152 76 76
Advisory Fees................................... 47,764 29,627 25,380 15,498
Other........................................... 9,182 5,951 5,870 3,633
--------- -------- -------- --------
Total Expenses: 72,001 45,110 43,097 27,022
Provision for (Benefit from )
Income Taxes....................................... - 0 - - 0 - - 0 - - 0 -
--------- -------- --------- --------
Net Income (loss).................................... $ 419,365 $ 281,350 $ 230,971 $ 153,798
======== ========= ======== ========
Income (Loss) Per Common Share....................... $ .36 $ .45 $ .19 $ .20
Weighted Average Common Shares
Outstanding.................................... 1,174,200 618,740 1,188,021 760,843
Dividends Declared................................... $ 477,686 $ 317,375 $ 259,858 $ 174,631
</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,
1999 1998
Cash Flows From Operating Activities
<S> <C> <C>
Net Income (Loss) $ 419,365 $ 281,350
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Deferred Offering Costs (10,841) (3,977)
Amortization 152 152
Change in assets and liabilities:
Accounts receivable 28,777 - 0 -
Accounts payable 13,421 414,850
Deferred income 45,962 27,186
--------- -----------
Net cash used in operating activities 496,836 719,561
Cash Flows From Investing Activities
Investment in mortgage loans (3,031,000) (2,130,000)
Collections of mortgage loans 1,129,245 323,273
Investment in bonds (909,902) (13,458)
------------ -----------
Net cash used for investing activities (2,811,657) (1,820,185)
Cash Flows From Financing Activities
Proceeds from stock offering 961,697 2,328,014
Dividends Paid (450,833) (270,642)
----------- ----------
Net cash from (used for) financing activities 510,864 2,057,372
------------ ------------
Net increase (Decrease) in Cash (1,803,957) 956,748
Cash
Beginning of period 2,941,530 291,815
------------ ----------
End of period $ 1,137,573 $ 1,248,563
=========== ===========
Supplemental Schedule of Noncash
Financing Activities
Dividends declared but not paid $ 259,858 $ 174,631
Deferred offering costs reclassified to additional
paid-in capital $ 6,983 $ 10,882
Dividends reinvested $ 129,012 $ 94,368
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, 1998 1,087,646 $ 10,876 $ 9,973,200 $ (77,693)
Issuance of 102,177 shares of
common stock, net of
offering costs 102,177 1,022 960,676
Net Income 419,365
Dividends declared (477,686)
Balance, June 30, 1999 (unaudited) 1,189,823 $ 11,898 $ 10,933,876 $ (136,014)
</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, 1998, 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, 1998.
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.
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, 1999, management believes the loans receivable to be
collectible in all material respects, and therefore, no allowances is presently
provided.
Organizational Expenses
Organizational expenses are stated at cost and are amortized using the
straight-line method over five years.
7
<PAGE>
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
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.
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.
The Company has elected 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 Per Common Share
No adjustments were made to income in either year for the purpose of calculating
earnings per share. Stock options were not included in computing earnings per
share because their effects were antidilutive.
2. MORTGAGE AND BONDS RECEIVABLE
At June 30, 1999, the Company had twenty-three loans receivable totaling
$8,333,750. The loans bear interest ranging from 9.75% to 12.00%. At June 30,
1998, the Company had nineteen loans receivable totaling $6,719,035 which bore
interest ranging form 9.75% to 12.00%.
The Company also has a portfolio of sixty-four church bonds, which are carried
at cost plus amortized interest income. The bonds pay either semi-annual or
quarterly interest ranging from 6.35% to 10.50%. The combined prinicapl of
$2,029,000 at June 30, 1999 is due at various maturity dates between November 1,
1999 and February 1, 2019.
The maturity schedule for mortgage loans and bonds receivable as of June 30,
1999 is as follows:
<TABLE>
<CAPTION>
Mortgage Loans Bond Portfolio
<S> <C> <C> <C>
1998 $ 84,130 $ 7,000
1999 180,496 17,000
2000 200,790 25,000
2001 223,374 11,000
2002 248,507 23,000
Thereafter 7,196,320 1,863,000
--------- ---------
2,029,000
Less Discounts from par (95,099)
Total $ 8,133,618 $1,933,901
========= =========
</TABLE>
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 4) 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, 1999.
8
<PAGE>
3. STOCK OPTION PLAN - Continued
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.
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.
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 advisory and origination fees from January 1 through June 30, 1999 of
$47,764 and $62,051 respectively.
The Advisor and the Company are related through common ownership and common
management. See Note 5.
5. 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, 1999 and 1998:
<TABLE>
<CAPTION>
June 30,
1999 1998
------------------------- ------------------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
<S> <C> <C> <C> <C>
Cash and equivalents $ 1,137,573 $ 1,137,573 $ 1,248,563 $ 1,248,563
Loans receivable 8,133,617 8,133,617 6,719,035 6,719,035
Bonds receivable 1,933,901 1,933,901 139,267 139,267
</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.
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
AMERICAN CHURCH MORTGAGE COMPANY
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 initial 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 Dealer/Manager-- American Investors Group, Inc.
("American"), an affiliate of the Company. The Company concluded its initial
public offering on November 8, 1996. 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., an affiliate of the Company.
On September 26, 1997, the Securities and Exchange Commission declared
effective the Company's second public offering of 1,500,000 common shares at a
price of $10.00 per share ($15,000,000) under SEC File 333-27601. The Offering
was co-underwritten by American Investors Group, Inc. and LaSalle St.
Securities, Inc., ("LaSalle"). American acted in the capacity of the Managing
Underwriter and is an affiliate of the Company. The Offering was conducted on
a"best-efforts" basis pursuant to applicable rules of the Securities and
Exchange Commission. The Company concluded it second public offering on January
22, 1999. The Company sold 799,759 shares during its second public offering. As
of June 30, 1999 the Company has 1,189,823 shares outstanding and approximately
789 individual shareholders.
Between the date upon which the Company began active business operations
(April 15, 1996), and June 30, 1999, the Company has made 33 loans to 29
churches in the aggregate amount of $10,765,750, with the average size being
$326,235. Of the 33 loans made by the Company, six loans totaling $1,832,000,
have been repaid by the borrowing churches. The Company has also purchased in
the secondary market for $3,028,921 (which includes $425 in accrued interest)
First Mortgage Church Bonds in the face amount of $3,047,300 and purchased for
$72,800 Second Mortgage Church Bonds in the face amount of $100,000. Three of
the First Mortgage Church Bonds in the face amount of $38,300 have been called
for redemption by the issuing organizations. In addition, the Company sold
$307,000 principal amount of mortgage bonds for $290,190. 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 in future public offerings; (ii) prepayment and repayment at maturity of
existing loans; (iv) borrowed funds; and (v) dividends reinvested under the
Company's Dividend Reinvestment Plan.
Results of Operations
During the three month period ended June 30, 1999 total assets of the
Company increased by $83,183 due primarily to shareholders electing to have
their first quarter dividend reinvested into additional share of the Company's
common stock. Total liabilities increased by $52,248 due to deferred income and
dividends declared but not yet paid as of June 30, 1999. During the three month
period ending June 30, 1999 the Company funded five additional first mortgage
loans to churches for an aggregate amount of $2,276,000. In addition, the
Company purchased $1,207,000 principal amount of first mortgage church bonds for
a purchase price of $1,203,478 (which includes $18 in accrued interest). All
loans made by the Company range in interest rate charged to the borrowers from
9.85% for fixed 20 year amortized loans, 11.25% for fixed 15 year amortized
loans to 12.00% for a 5-year interim loan. As of June 30, 1999, the average,
principal-adjusted interest rate on the Company's portfolio of loans was 10.65%.
The Company's portfolio of bonds has an average current yield of 9.28% .
Net operating income for the Company's three month period ended June 30,
1999 was $230,971 on total revenues of $274,068. Interest income earned on the
Company's portfolio of loans was $193,699. Excluded from revenue for the three
month period ended March 31, 1999 is $42,540 of origination income, or "points,"
received by the Company,
10
<PAGE>
recognition of which under generally accepted accounting principles ("GAAP")
must be deferred over the expected life of each loan. However, under tax
principles, origination income is recognized in the period received.
Accordingly, because the status of the Company as a real estate investment trust
requires, among other things, the distribution to shareholders of at least 95%
of "Taxable Income," the dividends declared and paid to Shareholders for the
quarter ended June 30, 1999 included origination income even though it is not
recognized in its entirety for the period under GAAP.
The Company's Board of Directors declared dividends of $.21875 for each
share held of record on June 30, 1999. During the Company's public offering,
dividends are computed and paid to each Shareholder based on the number of
days during a quarter that the Shareholder owned his or her shares. The
dividend, which was paid Julyl 30, 1999 represents a 8.75% annual rate of return
on each share of common stock owned and purchased for $10 per share.
Total assets of the Company for the six month period ended June 30, 1998
increased $989,614 to $11,255,941 primarily as a result of the sale and issuance
of the Company's common stock pursuant to its current public offering, the
proceeds of which were deployed into new mortgage loans, church bonds purchased
in the secondary market, and cash and cash equivalent money market obligations.
Shareholders' Equity rose $903,376 to $10,809,760 for the same reason. Company
liabilities at the end of the six month period ended June 30, 1999 are primarily
comprised of a "Deferred Income", 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, 1999 but not yet paid.
Liquidity and Capital Resources
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 the 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 its business operations in
future years. Nevertheless, the Company believes that it may be desirable, if
not necessary, to sell additional shares of common stock, in order to enhance
its capacity to make mortgage loans on a continuous basis. There can be no
assurance that the Company will be able to raise additional capital on terms
acceptable for such purposes. 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 no present intention of doing so, nor has it secured a
source for such borrowing.
11
<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, 1999.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits filed with Form 10-QSB
Amendment No 1. Amended and Reinstated REIT
Advisory Agreement Church Loan Advisors, Inc.
b) Reports on Form 8-K
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 6, 1999
AMERICAN CHURCH MORTGAGE COMPANY
By: /s/ David G. Reinhart
David G. Reinhart
Chief Executive Officer, Treasurer
(and Chief Financial Officer)
By: /s/ V. James Davis
V. James Davis
Vice President and Secretary
file:f:\acmc\10q2nd99.wpd
12
<PAGE>
AMENDMENT NO. 1 TO
AMENDED AND RESTATED REIT ADVISORY AGREEMENT
CHURCH LOAN ADVISORS, INC.
THIS AMENDMENT NO. 1 TO AMENDED AND RESTATED REIT ADVISORY AGREEMENT is
entered into as of this 1st day of January, 1999, between AMERICAN CHURCH
MORTGAGE COMPANY, a Minnesota corporation (the "Company"), and CHURCH LOAN
ADVISORS, INC., a Minnesota corporation (the "Advisor").
WHEREAS, the Company and the Advisor are parties to that certain
Amended and Restated REIT Advisory Agreement dated as of May 19, 1995
(hereinafter the "Advisory Agreement"); and
WHEREAS, the Advisor and the Company desire to amend the provisions of
the Advisory Agreement and evidence such amendment by this Agreement.
NOW, THEREFORE, in consideration of the foregoing, and the promises and
mutual covenants and agreements hereinafter set forth, the parties agree that
the Advisory Agreement is hereby amended as follows:
1. ARTICLE VII - TERM AND TERMINATION, Section 7.3 "Termination
Fee" is hereby deleted in its entirety and shall no longer
have any force and effect. This Section 7.3 shall be deemed to
be "left blank" for all future purposes and other Sections of
Article VII shall remain as originally designated.
2. Except as specifically set forth in "1" above, the Advisory
Agreement shall remain in full force and effect in accordance
with its original terms and provisions.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
the Advisory Agreement to be executed by their duly authorized officers as of
the day and year first above written.
AMERICAN CHURCH MORTGAGE COMPANY
By: /s/ David G. Reihart
David G. Reinhart, President
CHURCH LOAN ADVISORS, INC.
By: /s/ Philip J. Myers
Philip J. Myers, President
REIT.amendmenttoAdvisoryAgreement
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 1,137,573
<SECURITIES> 1,933,901
<RECEIVABLES> 8,133,617
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,323,629
<PP&E> 0
<DEPRECIATION> 9
<TOTAL-ASSETS> 11,255,941
<CURRENT-LIABILITIES> 318,682
<BONDS> 0
0
0
<COMMON> 11,898
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 11,255,941
<SALES> 0
<TOTAL-REVENUES> 274,068
<CGS> 0
<TOTAL-COSTS> 43,097
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 230,971
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 230,971
<EPS-BASIC> .19
<EPS-DILUTED> .19
</TABLE>
