Ministry Partners Shifts Funding, Reduces Loan Participation Sales

TL;DR

**Ministry Partners is de-risking its balance sheet by leaning on community funding, but the sharp drop in loan participation sales raises questions about future growth.**

AI Summary

MINISTRY PARTNERS INVESTMENT COMPANY, LLC, a credit union service organization (CUSO), reported its fiscal year ended December 31, 2025, focusing on financial services for Christian stewardship. The company generates revenue from interest income on loans and cash investments, fees from securities and insurance sales, investment advisory fees, loan origination and servicing fees, and gains from loan sales. As of December 31, 2025, MP Securities, a subsidiary, managed $234.3 million in assets, primarily in advisory accounts ($199.1 million) and brokerage accounts ($35.2 million). The company's financing strategy has shifted, reducing reliance on borrowings from financial institutions and increasing funding through investor debt certificates and member equity. Loan participation interests sold by the company during 2025 were $1.1 million, a significant decrease from $8.37 million in 2024. The company operates primarily in California but holds loan interests in 29 states, with 99.9% of its loan portfolio secured by real estate.

Why It Matters

This filing reveals a strategic pivot for Ministry Partners, moving away from institutional borrowings towards investor debt and member equity, which could signal a more stable, community-backed funding model. For investors, this shift, coupled with a sharp decline in loan participation sales from $8.37 million in 2024 to $1.1 million in 2025, suggests a potential change in liquidity management or a reduced need for immediate capital. Employees and customers benefit from a company focused on long-term, mission-driven financial services, but competitive pressures from larger financial institutions in both the faith-based and retail markets remain a constant challenge, requiring Ministry Partners to leverage its specialized knowledge and comprehensive approach.

Risk Assessment

Risk Level: medium — The company faces medium risk due to its reliance on a niche market (evangelical Christian organizations) and significant regulatory oversight from the NCUA, FINRA, SEC, and state departments. While the shift to investor debt and member equity reduces reliance on institutional borrowings, the substantial decrease in loan participation sales from $8.37 million in 2024 to $1.1 million in 2025 could indicate reduced loan origination activity or a more conservative approach to capital deployment, potentially impacting future revenue growth.

Analyst Insight

Investors should closely monitor Ministry Partners' ability to grow its investor debt certificates and member equity to offset the reduced loan participation sales. Evaluate the impact of increased regulatory scrutiny on its diverse financial services offerings and assess if the niche market focus can sustain consistent revenue growth amidst broader financial market competition.

Financial Highlights

debt To Equity

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revenue

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operating Margin

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total Assets

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total Debt

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net Income

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eps

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gross Margin

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cash Position

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revenue Growth

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Revenue Breakdown

Key Numbers

• $234.3 million — Assets Under Management (AUM) (MP Securities' AUM as of December 31, 2025, demonstrating its scale in investment services.)
• $199.1 million — Advisory Accounts AUM (Portion of MP Securities' AUM in advisory accounts as of December 31, 2025, indicating a strong advisory focus.)
• $35.2 million — Brokerage Accounts AUM (Portion of MP Securities' AUM in brokerage accounts as of December 31, 2025.)
• $1.1 million — Loan Participation Interests Sold (2025) (Total loan participation interests sold by the company during 2025, a significant decrease from the prior year.)
• $8.37 million — Loan Participation Interests Sold (2024) (Total loan participation interests sold by the company during 2024, highlighting a sharp decline in 2025.)
• 99.9% — Real Estate Secured Loans (Percentage of the loan portfolio secured by real estate as of December 31, 2025, indicating asset backing.)
• 16 — States for Insurance Brokerage (Number of states where MP Securities is licensed as an insurance broker as of December 31, 2025.)
• 26 — States for Investment Offerings (Number of states where MP Securities offers investments as of December 31, 2025.)
• 29 — States with Loan Interests (Number of different states, including D.C., where the company owns loan interests.)
• $250 thousand — Gross Receipts Tax Threshold (Annual gross revenues threshold for California's gross receipts tax, which the company is subject to if exceeded.)

Key Players & Entities

• MINISTRY PARTNERS INVESTMENT COMPANY, LLC (company) — registrant
• MP Securities (company) — subsidiary providing investment advisory, broker-dealer, and insurance services
• MPC (company) — not-for-profit subsidiary for charitable grants and consulting
• MPF (company) — subsidiary serving as custodian for secured investment debt certificates
• MP Realty (company) — subsidiary for loan brokerage and real estate services
• National Credit Union Administration (regulator) — regulates CUSOs
• Financial Industry Regulatory Authority (regulator) — regulates MP Securities
• U.S. Securities and Exchange Commission (regulator) — regulates MP Securities and filing requirements
• California Department of Financial Protection and Innovation (regulator) — regulates MP Securities and credit union owners
• Royal Bank of Canada Dain Rauscher (company) — clearing firm for MP Securities

FAQ

Risk Factors

• Compliance with Financial Regulations [high — regulatory]: As a CUSO and financial services provider, the company is subject to various federal and state regulations. Non-compliance could lead to penalties, fines, and reputational damage. The company operates in 26 states for investment offerings and 16 states for insurance brokerage, increasing the complexity of regulatory adherence.
• Interest Rate Sensitivity [medium — market]: The company's revenue is significantly tied to interest income from loans and investments. Fluctuations in interest rates can impact net interest margins and the profitability of its loan portfolio. The company's financing strategy has shifted towards investor debt certificates and member equity, which may have different interest rate sensitivities than traditional borrowings.
• Cybersecurity Threats [high — operational]: The company handles sensitive financial data for its members and clients. A cybersecurity breach could result in significant financial losses, reputational damage, and legal liabilities. The company's reliance on technology for its operations and investment services makes it vulnerable to such threats.
• Loan Portfolio Performance [high — financial]: The company's primary asset is its loan portfolio, with 99.9% secured by real estate. Deterioration in the real estate market or an increase in loan defaults could lead to significant losses. The decrease in loan participation interests sold ($1.1 million in 2025 vs. $8.37 million in 2024) may indicate a shift in risk appetite or market conditions affecting loan sales.
• Dependence on Member Equity and Investor Debt [medium — financial]: The company's financing strategy has shifted to rely more on investor debt certificates and member equity. Changes in investor confidence or the ability to attract new members and investors could impact the company's funding capacity and growth prospects.
• Competition in Financial Services [medium — market]: The company operates in a competitive landscape of credit unions, banks, and other financial service providers. Maintaining market share and attracting new clients requires continuous innovation and competitive pricing for its services, including investment advisory and loan products.
• California Gross Receipts Tax [low — regulatory]: The company is subject to California's gross receipts tax if its annual gross revenues exceed $250,000. Exceeding this threshold will increase the company's tax burden and impact its net income.

Industry Context

MINISTRY PARTNERS INVESTMENT COMPANY, LLC operates as a CUSO within the financial services sector, specifically catering to Christian stewardship. This niche positions it against a backdrop of increasing competition from traditional banks, credit unions, and specialized investment firms. The industry is characterized by evolving regulatory landscapes, technological advancements in fintech, and a growing demand for personalized financial advice and socially responsible investment options.

Regulatory Implications

As a financial services provider and CUSO, the company faces significant regulatory oversight from federal and state agencies. Compliance with securities laws, lending regulations, and data privacy requirements is paramount. Operating across multiple states for investment and insurance services necessitates adherence to diverse state-specific regulations, increasing compliance complexity and potential for penalties.

What Investors Should Do

1. Monitor loan portfolio performance and real estate market trends.
2. Assess the impact of the shift in financing strategy.
3. Evaluate the growth trajectory of MP Securities' AUM.
4. Analyze the reasons behind the sharp decline in loan participation sales.

Glossary

CUSO

Credit Union Service Organization. An organization that provides services to credit unions. (MINISTRY PARTNERS INVESTMENT COMPANY, LLC is identified as a CUSO, indicating its operational structure and target market.)

AUM

Assets Under Management. The total market value of the investments that a financial institution manages on behalf of clients. (MP Securities, a subsidiary, managed $234.3 million in AUM as of December 31, 2025, showing the scale of its investment services.)

Loan Participation Interests

A portion of a loan that is sold by the originating lender to another party. (The significant decrease in loan participation interests sold ($1.1 million in 2025 from $8.37 million in 2024) indicates a change in the company's loan sale strategy or market demand.)

Gross Receipts Tax

A tax levied on the total amount of revenue a business receives. (The company is subject to this tax in California if its annual gross revenues exceed $250,000, impacting its cost of doing business.)

Year-Over-Year Comparison

The company's 10-K filing for the fiscal year ended December 31, 2025, indicates a significant strategic shift, most notably a sharp decrease in loan participation interests sold, falling from $8.37 million in 2024 to $1.1 million in 2025. This suggests a potential change in risk management or loan origination strategy. Furthermore, the company's financing strategy has evolved, moving away from traditional borrowings towards investor debt certificates and member equity, implying a different capital structure and potentially altered financial leverage compared to the prior year.

Key Financial Figures

• $67.50 — ries A Preferred Units was estimated at $67.50 per unit or $ 7,904,250 . The registran
• $234.3 million — Securities' assets under management of $234.3 million as of December 31, 2025 (dollars in tho
• $250 thousand — if our gross revenues are in excess of $250 thousand per year. Regulation of Mortgage Lende

Filing Documents

• mpic-20251231x10k.htm (10-K) — 4023KB
• mpic-20251231xex21d1.htm (EX-21.1) — 3KB
• mpic-20251231xex23d1.htm (EX-23.1) — 4KB
• mpic-20251231xex31d1.htm (EX-31.1) — 12KB
• mpic-20251231xex31d2.htm (EX-31.2) — 12KB
• mpic-20251231xex32d1.htm (EX-32.1) — 8KB
• mpic-20251231x10k001.jpg (GRAPHIC) — 23KB
• mpic-20251231x10k002.jpg (GRAPHIC) — 36KB
• mpic-20251231x10k003.jpg (GRAPHIC) — 41KB
• mpic-20251231x10k004.jpg (GRAPHIC) — 53KB
• mpic-20251231x10k005.jpg (GRAPHIC) — 26KB
• mpic-20251231x10k006.jpg (GRAPHIC) — 25KB
• 0000944130-26-000009.txt ( ) — 17153KB
• mpic-20251231.xsd (EX-101.SCH) — 92KB
• mpic-20251231_cal.xml (EX-101.CAL) — 79KB
• mpic-20251231_def.xml (EX-101.DEF) — 352KB
• mpic-20251231_lab.xml (EX-101.LAB) — 568KB
• mpic-20251231_pre.xml (EX-101.PRE) — 571KB
• mpic-20251231x10k_htm.xml (XML) — 3982KB

Business

Business 3 Item 1A.

Risk Factors

Risk Factors 20 Item 1B. Unresolved Staff Comments 36 Item 1C . Cybersecurity 36 Item 2.

Properties

Properties 37 Item 3.

Legal Proceedings

Legal Proceedings 37 Item 4. Mine Safety Disclosures 38 Part II Item 5. Market for our Common Equity, Related Member Matters and Issuer Purchases of Equity Securities 39 Item 6. [ Reserved ] 40 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 41 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 62 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 63 – F-59 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 64 Item 9A.

Controls and Procedures

Controls and Procedures 64 Item 9B. Other Information 65 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 65 Part III Item 10. Managers and Executive Officers and Corporate Governance 66 Item 11.

Executive Compensation

Executive Compensation 73 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Member Matters

Security Ownership of Certain Beneficial Owners and Management and Related Member Matters 74 Item 13. Certain Relationships and Related Transactions, and Director Independence 75 Item 14. Principal Accounting Fees and Services 76 Part IV Item 15. Exhibits and Financial Statements Schedules 77 Item 16 Form 10-K Summary 77

SIGNATURES

SIGNATURES 78 Table of Contents Explanatory Note for Purposes of the "Safe Harbor Provisions" of Section 21E of the Securities Exchange Act of 1934, as amended Certain statements in this 2025 10-K Report (" Report "), other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are included with respect to, among other things, our current business plan, core strategy and portfolio management. These forward-looking statements generally are identified by the words "believe," "project," "expect," "anticipate," "estimate," "intend," "strategy," "plan," "may," "should," "will," "would," "will be," "will continue," "will likely result," and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which may cause actual results or outcomes to differ materially from those contained in the forward-looking statements. Important factors that we believe might cause such differences are discussed in the section entitled, "Risk Factors" in Part I, Item 1A of this Form 10-K or otherwise accompany the forward-looking statements contained in this Form 10-K. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. In assessing all forward-looking statements, readers are urged to read carefully all cautionary statements contained in this Form 10-K. 2 Table of Contents OUR COMPANY Contact Information Location of principal office 1 Pointe Drive, Suite 205, Brea, California 92821 Telephone number (800)

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