10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

xQuarterly Report Under Section 13 or 15(d) of

the Securities Exchange Act of 1934

For the Quarterly Period Ended September 30, 2016

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	41-1793975
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
10237 Yellow Circle Drive Minnetonka, MN	55343
(Address of principal executive offices)	(Zip Code)

(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 x 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	Accelerated filer   o
Non-accelerated filer o (Do not check if a smaller reporting company)	Smaller reporting company x

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	Outstanding at November 15, 2016
Common Stock, $0.01 par value per share	1,677,798 shares

AMERICAN CHURCH MORTGAGE COMPANY
INDEX
	Page No.
PART I.  FINANCIAL INFORMATION
Item 1.  Financial Statements:
Balance Sheets.……………………………………………………………………..…………		2 - 3
Statements of Operations…….…………………………….…………………………………		4 - 5
Statements of Cash Flows……..……………………………………………………………..		6 - 7
Notes to Financial Statements…..……………………………………………….……………		8 - 18
Item 2.  Management’s Discussion and Analysis of Financial
Condition and Results of Operations………….…………………………………………….		19 – 23
Items 4.  Controls and Procedures……………..……………………………………………..		24
PART II.  OTHER INFORMATION
Item 1.  Legal Proceedings…………………………………………………………………….		25
Item 1A.  Risk Factors………………………………….……………………………………...		25
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds………………………..		25
Item 3.  Defaults Upon Senior Securities………………………………………………..…….		25
Item 4.  Mine Safety Disclosures……………………………..………………………………		25
Item 5.  Other Information…………………………………………………………………….		25
Item 6.  Exhibits………………………………………………….…………………………….		25 - 26
Signatures………………………………………………………….…………………..………		27

AMERICAN CHURCH MORTGAGE COMPANY

Minnetonka, Minnesota

Financial Statements

September 30, 2016

AMERICAN CHURCH MORTGAGE COMPANY
Balance Sheets
ASSETS	September 30, 2016	December 31, 2015
	(Unaudited)
Current Assets
Cash and equivalents	$            4,483,963	$            4,377,110
Accounts receivable	220,116	189,609
Interest receivable	172,526	172,169
Current maturities of mortgage loans receivable, net of
allowance of $41,075 and $57,663 and deferred
origination fees of $21,150 and $23,406 at September
30, 2016 and December 31, 2015, respectively	731,949	1,134,157
Current maturities of bond portfolio	104,000	84,000
Prepaid expenses	4,156	19,904
Total current assets	5,716,710	5,976,949
Mortgage Loans Receivable, net of current maturities,
allowance of $1,245,714 and $1,147,170 and deferred
origination fees of $323,644 and $311,923 at September
30, 2016 and December 31, 2015, respectively	22,483,059	22,680,542
Bond Portfolio, net of current maturities	11,115,616	10,429,428
Real Estate Held for Sale	340,872	697,422
Deferred Offering Costs,
net of accumulated amortization of $1,071,323 and $974,991
at September 30, 2016 and December 31, 2015, respectively	842,915	861,810
Total Assets	$          40,499,172	$          40,646,151
Notes to Unaudited Financial Statements are an integral part of this Statement.

AMERICAN CHURCH MORTGAGE COMPANY
Balance Sheets
LIABILITIES AND STOCKHOLDERS’ EQUITY	September 30, 2016	December 31, 2015
	(Unaudited)
Current Liabilities
Current maturities of secured investor certificates	$            4,005,000	$            3,120,000
Accounts payable	22,844	29,417
Dividends payable	100,668	125,836
Total current liabilities	4,128,512	3,275,253
Deposit on real estate held for sale	-	-
Secured Investor Certificates, Series B, net of current maturities	11,147,000	13,074,000
Secured Investor Certificates, Series C, net of current maturities	6,765,000	6,723,000
Secured Investor Certificates, Series D	6,840,000	5,329,000
Total liabilities	28,880,512	28,401,253
Stockholders’ Equity
Common stock, par value $.01 per share
Authorized, 30,000,000 shares
Issued and outstanding, 1,677,798 shares at
September 30, 2016 and December 31, 2015, respectively	16,778	16,778
Additional paid-in capital	19,113,458	19,113,458
Accumulated deficit	(7,511,576)	(6,885,338)
Total stockholders’ equity	11,618,660	12,244,898
Total liabilities and stockholders' equity	$          40,499,172	$          40,646,151
Notes to Unaudited Financial Statements are an integral part of this Statement.

AMERICAN CHURCH MORTGAGE COMPANY
Statements of Operations
	For the Nine Months Ended
	September 30, 2016	September 30, 2015
	(Unaudited)	(Unaudited)
Interest and Other Income	$             1,989,106	$             2,254,675
Interest Expense	1,518,067	1,493,017
Net Interest Income	471,039	761,658
Provision for losses on mortgage loans receivable	161,312	142,120
Provision for losses on bond portfolio	180,000	-
	341,312	142,120
Net Interest Income after Provision for Mortgage Losses	129,727	619,538
Operating Expenses	453,961	472,406
Operating (Loss) Income	(324,234)	147,132
Other Income	-	4,053
Net (Loss) Income	$              (324,234)	$                151,185
Basic and Diluted (Loss) Income  Per Share	$                    (0.19)	$                      0.09
Dividends Declared Per Share	$                      0.06	$                      0.18
Weighted Average Common Shares Outstanding -
Basic and Diluted	1,677,798	1,677,798
Notes to Unaudited Financial Statements are an integral part of this Statement.

AMERICAN CHURCH MORTGAGE COMPANY
Statements of Operations
	For the Three Months Ended
	September 30, 2016	September 30, 2015
	(Unaudited)	(Unaudited)
Interest and Other Income	$                650,876	$                728,782
Interest Expense	512,411	503,441
Net Interest Income	138,465	225,341
Provision for losses on mortgage loans receivable	16,836	46,108
Provision for losses on bond portfolio	60,000	-
	76,836	46,108
Net Interest Income after Provision for Mortgage Losses	61,629	179,233
Operating Expenses	111,724	154,616
Operating (Loss) Income	(50,095)	24,617
Other Income	-	-
Net (Loss) Income	$                (50,095)	$                  24,617
Basic and Diluted (Loss) Income Per Share	$                    (0.03)	$                      0.01
Dividends Declared Per Share	$                      0.06	$                      0.04
Weighted Average Common Shares Outstanding -
Basic and Diluted	1,677,798	1,677,798
Notes to Unaudited Financial Statements are an integral part of this Statement.

AMERICAN CHURCH MORTGAGE COMPANY
Statements of Cash Flows
	For the Nine Months Ended
	September 30, 2016	September 30, 2015
	(Unaudited)	(Unaudited)
Cash Flows from Operating Activities
Net (loss) income	$              (324,234)	$                150,185
Adjustments to reconcile net income to net cash
from operating activities:
Impairment on real estate held for sale	(62,043)	103,623
Provision for losses on mortgage loans receivable	161,312	142,120
Provision for losses on bond portfolio	180,000	-
Amortization of loan origination discounts	9,450	(141,773)
Amortization of deferred costs	96,332	97,695
Change in assets and liabilities
Accounts receivable	(30,507)	54,144
Interest receivable	(357)	(34,009)
Prepaid expenses	15,748	(2,817)
Accounts payable	(43,131)	50,831
Net cash provided by operating activities	2,570	419,999
Cash Flows from Investing Activities
Investment in mortgage loans	(697,447)	(1,242,335)
Collections of mortgage loans	1,581,527	4,470,581
Investment in bonds	(965,000)	(1,406,053)
Proceeds from bonds	78,812	142,275
Net cash (used for) provided by investing activities	(2,108)	1,964,468
Cash Flows from Financing Activities
Proceeds from secured investor certificates	996,000	1,593,000
Payments on secured investor certificate maturities	(485,000)	(1,034,000)
Payments for deferred costs	(77,437)	(104,192)
Dividends paid	(327,172)	(402,672)
Net cash provided by financing activities	106,391	52,136
Net Increase in Cash and Equivalents	106,853	2,436,603
Cash and Equivalents - Beginning of Period	4,377,110	3,767,102
Cash and Equivalents - End of Period	$             4,483,963	$             6,203,705
Notes to Unaudited Financial Statements are an integral part of this Statement.

AMERICAN CHURCH MORTGAGE COMPANY
Statements of Cash Flows - Continued
	For the Nine Months Ended
	September 30, 2016	September 30, 2015
	(Unaudited)	(Unaudited)
Supplemental Cash Flow Information
Dividends payable	$                100,668	$                      67,112
Interest paid	$             1,421,735	$                 1,395,322
Non-cash investing activity:
Real estate held for sale financed through
mortgage loans receivable	$                340,872	$                               -
Notes to Unaudited Financial Statements are an integral part of this Statement.

AMERICAN CHURCH MORTGAGE COMPANY

Notes to Financial Statements - Unaudited

September 30, 2016

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, 2015 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, 2015. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2016.

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.

AMERICAN CHURCH MORTGAGE COMPANY

Notes to Financial Statements - Unaudited

September 30, 2016

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 $1,169,528 and $2,233,533 in money market fund accounts at September 30, 2016 and December 31, 2015, 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 $104,000 and $84,000 in bonds as current assets as of September 30, 2016 and December 31, 2015, respectively, based on management’s estimates for liquidity requirements and contractual maturities of certain bonds maturing in 2017 and 2016, 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 loss policy provides an allowance for estimated uncollectible loans based on an evaluation of the current status of the loan portfolio. This policy provides for principal amounts outstanding on a particular loan if cumulative interruptions occur in the normal payment schedule of a loan; therefore, the Company recognizes a provision 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 September 30, 2016, the Company provided $1,286,789 for seventeen mortgage loans, of which seven totaling approximately $3,460,000 are three or more mortgage payments in arrears, three loans totaling $1,225,659 are declared to be in default and two loans totaling $623,648 are in the foreclosure process. At December 31, 2015, the Company provided $1,205,000 for eighteen mortgage loans, of which eight totaling approximately $3,724,000 were three or more mortgage payments in arrears, two loans totaling approximately $1,004,000 were declared to be in default and three loans totaling approximately $775,000 were in the foreclosure process.

AMERICAN CHURCH MORTGAGE COMPANY

Notes to Financial Statements - Unaudited

September 30, 2016

A summary of transactions in the allowance for credit losses for the nine months ended September 30, 2016 is as follows:

Balance at December 31, 2015	$	1,204,833
Provision for additional losses		161,312
Reclassified to real estate held for sale		(29,806	)
Charge-offs		(49,550	)
Balance at September 30, 2016	$	1,286,789

The total impaired loans, which are loans that are in the foreclosure process or are declared to be in default, were approximately $1,849,000 and $1,779,000 at September 30, 2016 and December 31, 2015, respectively, which the Company believes are adequately secured by the underlying collateral and the allowance for mortgage loans. Approximately $652,000 and $581,000 of the Company’s allowance for mortgage loans was allocated to impaired loans at September 30, 2016 and December 31, 2015, respectively.

The Company will declare a loan to be in default and will place the loan on non-accrual status when the following thresholds have been met: (i) the borrower has missed three consecutive mortgage payments; (ii) the borrower has not communicated to the Company any legitimate reason for delinquency in its payments to the Company and has not arranged for the re-continuance of payments; (iii) lines of communication to the borrower have broken down such that any reasonable prospect of rehabilitating the loan and return of regular payments is gone.

The Company’s policies on payments received and interest accrued on non-accrual loans are as follows: (i) The Company will accept payments on loans that are currently on non-accrual status when a borrower has communicated to us that they intend to meet their mortgage obligations. A payment made on a non-accrual loan is considered a good faith deposit as to the intent to resume their mortgage payment obligation. This good faith deposit is credited back to interest first then principal as stated in the mortgage loan documentation. (ii) A letter outlining the re-payment terms or the restructure terms (if any) of the loan is provided to the borrower. This letter will be signed by the Senior Pastor and all board members of the borrower. This letter resumes the obligation to make payments on non-accrual loans. (iii) The borrower must meet all its payment obligations for the next 120 days without interruption in order to be removed from non-accrual status.

When a loan is declared in default according to the Company’s policy or deemed to be doubtful of collection, the loan committee of the Advisor to the Company will direct the staff to charge-off the uncollectable receivables.

Loans totaling approximately $3,460,000 and $3,724,000 exceeded 90 days past due but continued to accrue interest at September 30, 2016 and December 31, 2015, respectively. The Company believes that the loans are well secured, not deemed to be in default and the Company is actively pursuing collection of past due payments.

AMERICAN CHURCH MORTGAGE COMPANY

Notes to Financial Statements - Unaudited

September 30, 2016

Real Estate Held for Sale

As of September 30, 2016, the Company had two properties acquired through foreclosure, and one via deed in lieu of foreclosure, with outstanding loan balances totaling approximately $618,000. The Company has listed the properties for sale through local realtors except for the property for which we received a deed in lieu of foreclosure. The Church is still occupying this property and paying rent while trying to either sell the building or obtain refinancing. Each property is valued based on its current listing price less any anticipated selling costs, including, for example, realtor commissions. 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. The fair value of our real estate held for sale, which represents the carrying value, is approximately $341,000 as of September 30, 2016 after an impairment of approximately $277,000.

The Company sold one property acquired through foreclosure for approximately $32,000 during the nine months ended September 30, 2016.

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 allowance for losses 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.

AMERICAN CHURCH MORTGAGE COMPANY

Notes to Financial Statements - Unaudited

September 30, 2016

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 (Loss) Per Common Share

No adjustments were made to income for the purpose of calculating earnings (loss) 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 an aggregate allowance for losses on our Agape bonds (see Note 3), which totaled $380,000 and $200,000 for the periods ended September 30, 2016 and December 31, 2015, respectively.

The following table summarizes the Company’s financial instruments that were measured at fair value on a recurring basis:

		Fair Value Measurement
September 30, 2016	Fair Value	Level 3
Bond portfolio	$11,219,616	$11,219,616

		Fair Value Measurement
December 31, 2015	Fair Value	Level 3
Bond portfolio	$10,513,428	$10,513,428

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

AMERICAN CHURCH MORTGAGE COMPANY

Notes to Financial Statements - Unaudited

September 30, 2016

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, 2015	$	10,513,428
Purchases		965,000
Proceeds		(78,812	)
Additional Bond Fund Reserve		(180,000	)
Balance at September 30, 2016	$	11,219,616

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 3 input. The resulting impairment charges were $48,979 and $193,104 for the periods ended September 30, 2016 and December 31, 2015, respectively. A reduction in impairment charges of approximately $62,000 occurred due to the sale of one property held for sale during the nine months ended September 30, 2016.

The following table summarizes the Company’s financial instruments that were measured at fair value on a nonrecurring basis:

	September 30, 2016
	Level 1		Level 2		Level 3		Fair Value at September 30, 2016
Impaired Loans	$	—	$	—	$	1,184,625	$	1,184,625
Real estate held for resale		—		—		340,872		340,872
	$	—	$	—	$	1,525,497	$	1,525,497

	December 31, 2015
	Level 1		Level 2		Level 3		Fair Value at December 31, 2015
Impaired Loans	$	—	$	—	$	1,197,302	$	1,197,302
Real estate held for resale		—		—		697,422		697,422
	$	—	$	—	$	1,894,724	$	1,894,724

AMERICAN CHURCH MORTGAGE COMPANY

Notes to Financial Statements - Unaudited

September 30, 2016

The change in Level 3 assets measured at fair value on a nonrecurring basis is summarized as follows:

		Impaired Loans			Real Estate Held for Sale
Balance at December 31, 2015	$	1,197,302		$	697,422
Additions/Acquisitions		221,683			134,173
Dispositions/Proceeds		(134,173	)		(471,550	)
Provision for other than temporary losses		(100,187	)		(19,173	)
Balance at September 30, 2016	$	1,184,625		$	340,872

3. MORTGAGE LOANS RECEIVABLE AND BOND PORTFOLIO

At September 30, 2016, the Company had mortgage loans receivable totaling $24,879,522. The loans bear interest ranging from 0% to 10.25% with a weighted average of approximately 8.27% at September 30, 2016. The Company had mortgage loans receivable totaling $25,354,876 that bore interest ranging from 1.00% to 10.25% with a weighted average of approximately 8.35% at December 31, 2015.

The Company has a portfolio of secured church bonds at September 30, 2016 and December 31, 2015, which are carried at fair value. The bonds pay either semi-annual or quarterly interest ranging from 2.50% to 9.75%. The aggregate value of secured church bonds equaled approximately $11,600,000 at September 30, 2016 with a weighted average interest rate of 6.73% and approximately $10,713,000 at December 31, 2015 with a weighted average interest rate of 6.92%. These bonds are due at various maturity dates through May 2046.

The contractual maturity schedule for mortgage loans receivable and the bond portfolio as of September 30, 2016, is as follows:

	Mortgage Loans	Bond Portfolio
October 1, 2016 through September 30, 2017	$     794,175	$  104,000
October 1, 2017 through December 31, 2017	2,380,015	41,000
2018	1,340,662	139,000
2019	1,355,748	144,000
2020	1,380,671	156,000
Thereafter	17,595,321	11,015,616
	24,846,591	11,599,616
Less loan loss and bond loss allowances	(1,286,789)	(380,000)
Less deferred origination income	(344,794)	______-__
Totals	$23,215,008	$ 11,219,616

AMERICAN CHURCH MORTGAGE COMPANY

Notes to Financial Statements - Unaudited

September 30, 2016

The Company currently owns $627,000 First Mortgage Bonds and $487,000 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. Agape is currently performing under a loan modification agreement. In October 2013, in excess of 80% of the bondholders of Agape agreed to a modification in the terms of their bonds which has resulted in the resumption of both principal and interest payments to both the first and second mortgage bond holders. Both the First Mortgage Bonds and Second Mortgage Bonds have been modified to a fully amortized fixed rate, quarterly interest payment of 6.25% with a new maturity date of September 2037 for all the issued and outstanding bonds. Agape has missed two quarterly interest payments to all bondholders for the nine month period ended September 30, 2016. A principal distribution of approximately $20,000 was made during the quarter ended September 30, 2016 reducing the principal balance outstanding. The Company, along with all other bondholders, has a superior lien over all other creditors. The Company has an aggregate allowance for losses of $380,000 and $200,000 for the First and Second Mortgage Bonds both at September 30, 2016 and December 31, 2015, 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 6.66% and 6.44% at September 30, 2016 and December 31, 2015, 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 $231,000 and $356,000 for the three months ended September 30, 2016 and 2015, respectively. The secured investor certificates have certain financial and non-financial covenants identified in the respective series’ trust indentures.

The estimated maturity schedule for the secured investor certificates at September 30, 2016 is as follows:

October 1, 2016 through September 30, 2017	$    4,005,000
October 1, 2017 through December 31, 2017	463,000
2018	4,116,000
2019	2,333,000
2020	4,058,000
Thereafter	13,782,000
Totals	$28,757,000

AMERICAN CHURCH MORTGAGE COMPANY

Notes to Financial Statements - Unaudited

September 30, 2016

5. 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. A majority of the independent board members approve the advisory agreement on an annual basis. The Company paid the Advisor management fees of approximately $78,000 and $80,000 for the three months ended September 30, 2016 and 2015, respectively and management fees of approximately $238,000 and $265,000 for the nine months ended September 30, 2016 and 2015, respectively.

6. 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 September 30, 2016 and December 31, 2015, 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:

	September 30, 2016				December 31, 2015
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Cash and equivalents	$	4,483,963	$	4,483,963	$	4,377,110	$	4,377,110
Accounts receivable		220,116		220,116		189,609		189,609
Interest receivable		172,526		172,526		172,169		172,169
Mortgage loans receivable		24,879,552		30,214,164		25,354,876		29,054,399
Bond portfolio		11,599,616		11,599,616		10,713,428		10,713,428
Secured investor certificates		28,757,000		40,614,165		28,246,000		36,995,152

AMERICAN CHURCH MORTGAGE COMPANY

Notes to Financial Statements - Unaudited

September 30, 2016

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 greater than the carrying value as the portfolio is currently yielding a higher rate than similar mortgages with similar terms for borrowers with similar credit quality.

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.

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 operating 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, 2015 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 operate as a real estate investment trust.

We currently have sixty-one first mortgage loans aggregating $24,837,700 in principal amount, two second mortgage loans totaling $58,891 in principal amount and a first mortgage bond portfolio with par values aggregating $11,599,616. 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. These capital sources and interest received on loans and bonds provide general working capital to the Company.

Results of Operations

Fiscal 2016 Nine Months Compared to Fiscal 2015 Nine Months

Our net (loss) income for the nine months ended September 30, 2016 and 2015 was approximately $(324,000) and $150,000, respectively, on total interest and other income of approximately $1,989,000 and $2,255,000, 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 September 30, 2016, our loans receivable have interest rates ranging from 0% to 10.25%, with an average, principal-adjusted interest rate of 8.27%. Our bond portfolio has an average current yield of 6.73% as of September 30, 2016. As of September 30, 2015, the average, principal-adjusted interest rate on our portfolio of loans was 8.36% and our portfolio of bonds had an average current yield of 6.93%. The decrease in interest income was due to the scheduled repayment of mortgage loans and the maturation and redemption of some of the bonds in our portfolio.

Interest expense was approximately $1,518,000 and $1,493,000 for the nine months ended September 30, 2016 and 2015, respectively. The increase in interest expense was due to the sale and issuance of our secured investor certificates. Net interest margin decreased from 33.78% to 23.68% resulting primarily from an decrease in interest and other income of approximately 11.78% and an increase in interest expense of approximately 1.68%.

We follow a loan loss allowance policy on our portfolio of loans outstanding. This critical policy requires complex judgments and estimates. We record mortgage loans receivable at their estimated net realizable value, which is the unpaid principal balance less the allowance for mortgage loans. Our loan policy provides an allowance for estimated uncollectible loans based on an evaluation of the current status of the loan portfolio. This policy provides for principal amounts outstanding on a particular loan if cumulative interruptions occur in the normal payment schedule of a loan. Our policy will provide for the outstanding principal amount of a loan in our portfolio if the amount is in doubt of being collected. Additionally, no interest income is recognized on loans declared to be in default or loans that are in the foreclosure process.

We will declare a loan to be in default and will place the loan on non-accrual status when the following thresholds have been met: (i) the borrower has missed three consecutive mortgage payments; (ii) the borrower has not communicated to the Company any legitimate reason for delinquency in its payments to the Company and has not arranged for the re-continuance of payments; (iii) lines of communication to the borrower have broken down such that any reasonable prospect of rehabilitating the loan and return of regular payments is gone.

Our policies on payments received and interest accrued on non-accrual loans are as follows: (i) We will accept payments on loans that are currently on non-accrual status when a borrower has communicated to us that they intend to meet their mortgage obligations. A payment made on a non-accrual loan is considered a good faith deposit as to the intent to resume their mortgage payment obligation. This good faith deposit is credited back to interest first then principal as stated in the mortgage loan documentation. (ii) A letter outlining the re-payment terms or the restructure terms (if any) of the loan is provided to the borrower. This letter will be signed by the Senior Pastor and all board members of the borrower. This letter resumes the obligation to make payments on non-accrual loans. (iii) The borrower must meet all its payment obligations for the next 120 days without interruption in order to be removed from non-accrual status.

When a loan is declared in default according to our policy or deemed to be doubtful of collection, the loan committee of our Advisor will direct the staff to charge-off the uncollectable receivables.

Allowance for losses on mortgage loans receivable increased during the nine months ended September 30, 2016 as we recorded additional provisions against the mortgage loans. We recorded an additional provision for losses on loans during the nine months ended September 30, 2016 of approximately $161,000 compared to approximately $142,000 for the nine months ended September 30, 2015. At September 30, 2016, we provided approximately $1,286,789 for seventeen mortgage loans, of which seven are three or more mortgage payments in arrears, three loans have been declared to be in default and two are in the foreclosure process. At December 31, 2015, we provided approximately $1,205,000 for eighteen mortgage loans, of which eight were three or more mortgage payments in arrears, two loans have been declared to be in default and two 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 two second mortgage loans totaling approximately $59,000 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 six 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 has demonstrated they can meet their mortgage debt obligations.

Operating expenses for the nine months ended September 30, 2016 decreased to approximately $454,000 compared to $473,000 at September 30, 2015. The decrease is primarily the result of reduced real estate impairment reserve in 2016.

Fiscal 2016 Third Quarter Compared to Fiscal 2015 Third Quarter

The Company had a net loss of approximately $(50,000) for the three months ended September 30, 2016 and had net income of approximately $25,000 for the three months ended September 30, 2015, on total interest and other income of approximately $651,000 and $729,000, respectively. Interest expense was approximately $512,000 and $503,000 for the three months ended September 30, 2016 and 2015, respectively. The decrease in net interest income was approximately $87,000. In addition, the Company experienced an increase in provisions for losses on its bond portfolio of approximately $60,000 for the three month periods ended September 30, 2016.

Operating expenses for the three months ended September 30, 2016 decreased to approximately $112,000 compared to $155,000 at September 30, 2015. The decrease in operating expenses is due to decreases in monthly bank charges and legal fees and costs associated with real estate held for sale.

Mortgage Loans and Bond Portfolio

Three new loans were funded during the nine months ended September 30, 2016. Two of the loans were provided seller financing by us on real estate we held for sale totaling approximately $380,000. The third loan was additional funding to a current loan in the amount of $200,000. In addition, two loans totaling approximately $307,000 paid off during the nine months ended September 30, 2016.

We currently own $627,000 First Mortgage Bonds and $487,000 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. Agape is currently performing under a loan modification agreement. In October 2013, in excess of 80% of the bondholders of Agape agreed to a modification in the terms of their bonds which has resulted in the resumption of both principal and interest payments to both the first and second mortgage bond holders. Both the First Mortgage Bonds and Second Mortgage Bonds have been modified to a fully amortized fixed rate, quarterly interest payment of 6.25% with a new maturity date of September 2037 for all the issued and outstanding bonds. Agape has missed three quarterly interest payments to all bondholders for the nine month period ended September 30, 2106. We, along with all other bondholders, have a superior lien over

all other creditors. We have an aggregate allowance for losses of $380,000 and $200,000 for the First and Second Mortgage Bonds at September 30, 2016 and December 31, 2015, respectively, which effectively reduces the bonds to the fair value amount management believes will be recovered.

Real Estate Held For Sale

We record 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. We recorded an additional impairment on our real estate held for sale of approximately $19,000 and $104,000 for the nine month period ended September 30, 2016 and 2015, respectively. This additional impairment was to properly reflect the value of two of our properties we believe we will recover in a sale.

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 earned approximately $6,000 and $0 in origination fees for the nine months ended September 30, 2016 and 2015, respectively.

Our Board of Directors declared a dividend of $.06 for each share held of record on May 1, 2016. The dividend, which was paid May 3, 2016, represents a 2.40% 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 $.06 for each share held of record on July 30, 2016. The dividend, which was paid August 1, 2016, represents a 2.40% 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 $.06 for each share held of record on September 28, 2016. The dividend, which was paid October 31, 2016, represents a 2.40% 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 and interest payments on secured investor certificates. Our current liabilities at September 30, 2016 are primarily comprised of current maturities of 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.

In July 2014, we filed with the Securities and Exchange Commission a registration statement to offer $10,000,000 worth of Series D Secured Investor Certificates to qualified investors. The offering was declared effective August 12, 2014. At September 30, 2016, approximately $5,045,000 has been collected from the issuance of 5,045 Series D certificates (less underwriting fees). The proceeds are being used to fund new mortgage loans and pay down maturing certificates. We may also use proceeds from the sale of secured investor certificates to pay dividends, if needed.

During the nine months ended September 30, 2016, total assets decreased by approximately $147,000 due to a decrease in loans outstanding which was offset by an increase in cash. Current liabilities increased by approximately $853,000 for the nine months ended September 30, 2016 due to an increase in current maturities of our secured investor certificates. Non-current liabilities increased by $479,000 for the nine months ended September 30, 2016 due to an increase of secured investor certificates outstanding.

For the nine months ended September 30, 2016, net cash provided by operating activities decreased to approximately $3,000 from $420,000 from the comparative period ended September 30, 2015, primarily due to an increase in our provision for losses on our bond portfolio.

For the nine months ended September 30, 2016, net cash (used for) provided by investing activities was approximately $(2,000) compared to cash provided by investing activities of approximately $1,964,000 from the comparative nine months ended September 30, 2015. This decrease was due to an decrease in collections from mortgage loans of approximately $2,889,000.

For the nine months ended September 30, 2016, net cash provided by financing activities increased to approximately $106,000 from $52,000 for the comparative nine months ended September 30, 2015, primarily due to an decrease in issuance of our secured investor certificates which was offset by a decrease in payments on our secured investor certificates.

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 September 30, 2016. 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

As of the end of the quarter ended September 30, 2016, 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) Not Applicable

Item 3. Defaults Upon Senior Securities. 

None.

Item 4. Mine Safety Disclosures.

Not Applicable

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.

101 The following financial information from our Quarterly Report on Form 10-Q for the third quarter of fiscal year 2016 filed with the Securities and Exchange Commission on November 15, 2016, is formatted in eXtensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheets at September 30, 2016 and December 31, 2015; (ii) Consolidated Statements of Operations for the nine and three months ended September 30, 2016 and 2015; (iii) the Consolidated Statements of Cash Flows for the nine months ended September 30, 2016 and 2015; and (iv) the Notes to Financial Statements (Unaudited).

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:       November 15, 2016

	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)

EX-31.1

 Exhibit 31.1

OFFICER'S CERTIFICATE

PURSUANT TO SECTION 302

I, Philip J. Myers, certify that:

1. I have reviewed this quarterly report on Form 10-Q of American Church Mortgage Company.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-5(e) and 15d-15 (e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:   November 15, 2016	By:    /s/ Philip J. Myers
	Philip J. Myers
	Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

OFFICER'S CERTIFICATE

PURSUANT TO SECTION 302

I, Scott J. Marquis, certify that:

1. I have reviewed this quarterly report on Form 10-Q of American Church Mortgage Company.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-5(e) and 15d-15 (e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:   November 15, 2016	By:    /s/ Scott J. Marquis
	Scott J. Marquis
	Chief Financial Officer and Treasurer
	(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of American Church Mortgage Company (the “Company”) on Form 10-Q for the period ended September 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, in the capacities and on the dates indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Dated:   November 15, 2016	By:  /s/ Philip J. Myers
	Chief Executive Officer
	(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of American Church Mortgage Company (the “Company”) on Form 10-Q for the period ended September 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, in the capacities and on the dates indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Dated:   November 15, 2016	By:  /s/ Scott J. Marquis
	Chief Financial Officer and Treasurer
	(Principal Financial Officer)

XML

Document and Entity Information - USD ($)	9 Months Ended
	Sep. 30, 2016	Nov. 15, 2016
Document And Entity Information
Entity Registrant Name	American Church Mortgage Company
Entity Central Index Key	0000934543
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float		$ 1,677,798
Entity Common Stock, Shares Outstanding		1,677,798
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2016

XML

Balance Sheets - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Cash and equivalents	$ 4,483,963	$ 4,377,110
Accounts receivable	220,116	189,609
Interest receivable	172,526	172,169
Current maturities of mortgage loans receivable, net of allowance of $41,075and $57,663 and deferred origination fees of $21,150 and $23,406 at September 30, 2016 and December 31, 2015, respectively	731,949	1,134,157
Current maturities of bond portfolio, at fair value	104,000	84,000
Prepaid expenses	4,156	19,904
Total current assets	5,716,710	5,976,949
Mortgage Loans Receivable, net of current maturities, allowance of $1,245,714 and 1,147,170 and deferred origination fess of $323,644 and $311,923 at September 30, 2016 and December 31, 2015, respectively	22,483,059	22,680,542
Bond Portfolio, at fair value, net of current maturities	11,115,616	10,429,428
Real Estate Held for Sale	340,872	697,422
Deferred Offering Costs, net of accumulated amortization of $1,071,323 and $974,991 at September 30, 2016 and December 31, 2015, respectively	842,915	861,810
Total Assets	40,499,172	40,646,151
Current Liabilities
Current maturities of secured investor certificates	4,005,000	3,120,000
Accounts payable	22,844	29,417
Dividends payable	100,668	125,836
Total current liabilities	4,128,512	3,275,253
Deposit on real estate held for sale
Secured Investor Certificates, Series B, net of current maturities	11,147,000	13,074,000
Secured Investor Certificates, Series C, net of current maturities	6,765,000	6,723,000
Secured Investor Certificates, Series D	6,840,000	5,329,000
Total liabilities	28,880,512	28,401,253
Stockholders' Equity
Common stock, par value $.01 per share, Authorized, 30,000,000 shares, Issued and outstanding, 1,677,798 shares at September 30, 2016 and December 31, 2015, respectively	16,778	16,778
Additional paid-in capital	19,113,458	19,113,458
Accumulated deficit	(7,511,576)	(6,885,338)
Total stockholders' equity	11,618,660	12,244,898
Total Liabilities and Stockholders' Equity	$ 40,499,172	$ 40,646,151

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Balance Sheets (Parenthetical) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Current Assets
Current allowance for current maturities of mortgage loans recievable	$ 41,075	$ 57,663
Current deferred origination fees for current mortgage loans recievable	21,150	23,406
Allowance for mortgage loans recievable	1,245,714	1,147,170
Deferred origination fees for mortgage loans recievable	323,644	311,923
Accumulated amortization deferred offering costs	$ (1,071,323)	$ (974,991)
Stockholders' Equity
Common Stock, par value	$ 0.01	$ 0.01
Common Stock, Authorized	30,000,000	30,000,000
Common Stock, Issued	1,677,798	1,677,798
Common Stock, Outstanding	1,677,798	1,677,798

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Statements of Operations - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Income Statement [Abstract]
Interest and Other Income	$ 650,876	$ 728,782	$ 1,989,106	$ 2,254,675
Interest Expense	512,411	503,441	1,518,067	1,493,017
Net Interest Income	138,465	225,341	471,039	761,658
Provision for losses on mortgage loans receivable	16,836	46,108	161,312	142,120
Provision for losses of bond portfolio	60,000		180,000
Net Interest Income after Provision for Mortgage Losses	61,629	179,233	129,727	619,538
Operating Expenses
Other operating expenses	111,724	154,616	453,961	472,406
Operating (Loss) Income	(50,095)	24,617	(324,234)	146,132
Other Income				4,053
Net (Loss) Income	$ (50,095)	$ 24,617	$ (324,234)	$ 150,185
Basic and Diluted (Loss) Income Per Share	$ (0.03)	$ .01	$ (0.19)	$ .09
Dividends Declared Per Share	$ .06	$ .04	$ .06	$ .18
Weighted Average Common Shares Outstanding - Basic and Diluted	1,677,798	1,677,798	1,677,798	1,677,798

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Statements of Cash Flows - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash Flows from Operating Activities
Net (loss) income	$ (324,234)	$ 150,185
Impairment on real estate held for sale	(62,043)	103,623
Provision for losses on mortgage loans receivable	161,312	142,120
Provision for losses of bond portfolio	180,000
Amortization of loan origination discounts	9,450	(141,773)
Amortization of deferred costs	96,332	97,965
Accounts receivable	(30,507)	54,144
Interest receivable	(357)	(34,009)
Prepaid expenses	15,748	(2,817)
Accounts payable	(43,131)	50,831
Net cash provided by operating activities	2,570	419,999
Cash Flows from Investing Activities
Investment in mortgage loans	(697,447)	(1,242,335)
Collections of mortgage loans	1,581,527	4,470,581
Investment in bonds	(965,000)	(1,406,053)
Proceeds from bonds	78,812	142,275
Net cash provided by (used for) provided by investing activities	(2,108)	1,964,468
Cash Flows from Financing Activities
Proceeds from secured investor certificates	996,000	1,593,000
Payments on secured investor certificate maturities	(485,000)	(1,034,000)
Payments for deferred costs	(77,437)	(104,192)
Dividends paid	(327,172)	(402,672)
Net cash provided by (used for) financing activities	106,391	52,136
Net Increase (Decrease) in Cash and Equivalents	106,853	2,436,603
Cash and Equivalents - Beginning	4,377,110	3,767,102
Cash and Equivalents - Ending	$ 4,483,963	$ 6,203,705

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Statements of Cash Flows (Parenthetical) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Statement of Cash Flows [Abstract]
Dividends payable	$ 100,668	$ 67,112
Interest paid	1,421,735	1,395,322
Non-cash investing activity: Real estate heolf for sale financed through mortgage loans receivable	$ 340,872

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Summary Of Significant Accounting Policies

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

Summary Of Significant Accounting Policies

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, 2015 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, 2015. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2016.

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 $1,169,528 and $2,233,533 in money market fund accounts at September 30, 2016 and December 31, 2015, 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 $104,000 and $84,000 in bonds as current assets as of September 30, 2016 and December 31, 2015, respectively, based on management’s estimates for liquidity requirements and contractual maturities of certain bonds maturing in 2017 and 2016, 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 loss policy provides an allowance for estimated uncollectible loans based on an evaluation of the current status of the loan portfolio. This policy provides for principal amounts outstanding on a particular loan if cumulative interruptions occur in the normal payment schedule of a loan; therefore, the Company recognizes a provision 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 September 30, 2016, the Company provided $1,286,789 for seventeen mortgage loans, of which seven totaling approximately $3,460,000 are three or more mortgage payments in arrears, three loans totaling $1,225,659 are declared to be in default and two loans totaling $623,648 are in the foreclosure process. At December 31, 2015, the Company provided $1,205,000 for eighteen mortgage loans, of which eight totaling approximately $3,724,000 were three or more mortgage payments in arrears, two loans totaling approximately $1,004,000 were declared to be in default and three loans totaling approximately $775,000 were in the foreclosure process.

A summary of transactions in the allowance for credit losses for the nine months ended September 30, 2016 is as follows:

Balance at December 31, 2015	$	1,204,833
Provision for additional losses		161,312
Reclassified to real estate held for sale		(29,806	)
Charge-offs		(49,550	)
Balance at September 30, 2016	$	1,286,789

The total impaired loans, which are loans that are in the foreclosure process or are declared to be in default, were approximately $1,849,000 and $1,779,000 at September 30, 2016 and December 31, 2015, respectively, which the Company believes are adequately secured by the underlying collateral and the allowance for mortgage loans. Approximately $652,000 and $581,000 of the Company’s allowance for mortgage loans was allocated to impaired loans at September 30, 2016 and December 31, 2015, respectively.

The Company will declare a loan to be in default and will place the loan on non-accrual status when the following thresholds have been met: (i) the borrower has missed three consecutive mortgage payments; (ii) the borrower has not communicated to the Company any legitimate reason for delinquency in its payments to the Company and has not arranged for the re-continuance of payments; (iii) lines of communication to the borrower have broken down such that any reasonable prospect of rehabilitating the loan and return of regular payments is gone.

The Company’s policies on payments received and interest accrued on non-accrual loans are as follows: (i) The Company will accept payments on loans that are currently on non-accrual status when a borrower has communicated to us that they intend to meet their mortgage obligations. A payment made on a non-accrual loan is considered a good faith deposit as to the intent to resume their mortgage payment obligation. This good faith deposit is credited back to interest first then principal as stated in the mortgage loan documentation. (ii) A letter outlining the re-payment terms or the restructure terms (if any) of the loan is provided to the borrower. This letter will be signed by the Senior Pastor and all board members of the borrower. This letter resumes the obligation to make payments on non-accrual loans. (iii) The borrower must meet all its payment obligations for the next 120 days without interruption in order to be removed from non-accrual status.

When a loan is declared in default according to the Company’s policy or deemed to be doubtful of collection, the loan committee of the Advisor to the Company will direct the staff to charge-off the uncollectable receivables.

Loans totaling approximately $3,460,000 and $3,724,000 exceeded 90 days past due but continued to accrue interest at September 30, 2016 and December 31, 2015, respectively. The Company believes that 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

As of September 30, 2016, the Company had two properties acquired through foreclosure, and one via deed in lieu of foreclosure, with outstanding loan balances totaling approximately $618,000. The Company has listed the properties for sale through local realtors except for the property for which we received a deed in lieu of foreclosure. The Church is still occupying this property and paying rent while trying to either sell the building or obtain refinancing. Each property is valued based on its current listing price less any anticipated selling costs, including, for example, realtor commissions. 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. The fair value of our real estate held for sale, which represents the carrying value, is approximately $341,000 as of September 30, 2016 after an impairment of approximately $277,000.

The Company sold one property acquired through foreclosure for approximately $32,000 during the nine months ended September 30, 2016.

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 allowance for losses 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 (Loss) Per Common Share

No adjustments were made to income for the purpose of calculating earnings (loss) per share, as there were no potential dilutive shares outstanding.

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Fair Value Measurments

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Fair Value Measurments

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 an aggregate allowance for losses on our Agape bonds (see Note 3), which totaled $380,000 and $200,000 for the periods ended September 30, 2016 and December 31, 2015, respectively.

The following table summarizes the Company’s financial instruments that were measured at fair value on a recurring basis:

		Fair Value Measurement
September 30, 2016	Fair Value	Level 3
Bond portfolio	$11,219,616	$11,219,616

		Fair Value Measurement
December 31, 2015	Fair Value	Level 3
Bond portfolio	$10,513,428	$10,513,428

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, 2015	$	10,513,428
Purchases		965,000
Proceeds		(78,812	)
Additional Bond Fund Reserve		(180,000	)
Balance at September 30, 2016	$	11,219,616

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 3 input. The resulting impairment charges were $48,979 and $193,104 for the periods ended September 30, 2016 and December 31, 2015, respectively. A reduction in impairment charges of approximately $62,000 occurred due to the sale of one property held for sale during the nine months ended September 30, 2016.

The following table summarizes the Company’s financial instruments that were measured at fair value on a nonrecurring basis:

	September 30, 2016
	Level 1	Level 2	Level 3	Fair Value at September 30, 2016
Impaired Loans	$          -	$           -	$1,184,625	$1,184,625
Real estate held for resale	-	-	340,872	340,872
	$          -	$           -	$1,525,497	$1,525,497

	December 31, 2015
	Level 1	Level 2	Level 3	Fair Value at December 31, 2015
Impaired Loans	$                 -	$             -	$1,197,302	$1,197,302
Real estate held for resale	-	-	697,422	697,422
	$                 -	$             -	$1,894,724	$1,894,724

The change in Level 3 assets measured at fair value on a nonrecurring basis is summarized as follows:

		Impaired Loans			Real Estate Held for Sale
Balance at December 31, 2015	$	1,197,302		$	697,422
Additions/Acquisitions		221,683			134,173
Dispositions/Proceeds		(134,173	)		(471,550	)
Provision for other than temporary losses		(100,187	)		(19,173	)
Balance at September 30, 2016	$	1,184,625		$	340,872

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Mortgage Loans Receivable and Bond Portfolio

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Mortgage Loans Receivable and Bond Portfolio

3. MORTGAGE LOANS RECEIVABLE AND BOND PORTFOLIO

At September 30, 2016, the Company had mortgage loans receivable totaling $24,879,522. The loans bear interest ranging from 0% to 10.25% with a weighted average of approximately 8.27% at September 30, 2016. The Company had mortgage loans receivable totaling $25,354,876 that bore interest ranging from 1.00% to 10.25% with a weighted average of approximately 8.35% at December 31, 2015.

The Company has a portfolio of secured church bonds at September 30, 2016 and December 31, 2015, which are carried at fair value. The bonds pay either semi-annual or quarterly interest ranging from 2.50% to 9.75%. The aggregate value of secured church bonds equaled approximately $11,600,000 at September 30, 2016 with a weighted average interest rate of 6.73% and approximately $10,713,000 at December 31, 2015 with a weighted average interest rate of 6.92%. These bonds are due at various maturity dates through May 2046.

The contractual maturity schedule for mortgage loans receivable and the bond portfolio as of September 30, 2016, is as follows:

	Mortgage Loans	Bond Portfolio
October 1, 2016 through September 30, 2017	$     794,174	$  104,000
October 1, 2017 through December 31, 2017	2,380,015	41,000
2018	1,340,662	139,000
2019	1,355,748	144,000
2020	1,380,671	156,000
Thereafter	17,595,321	11,015,616
	24,846,591	11,599,616
Less loan loss and bond loss allowances	(1,286,789)	(380,000)
Less deferred origination income	(344,794)	______-__
Totals	$23,215,008	$ 11,219,616

The Company currently owns $627,000 First Mortgage Bonds and $487,000 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. Agape is currently performing under a loan modification agreement. In October 2013, in excess of 80% of the bondholders of Agape agreed to a modification in the terms of their bonds which has resulted in the resumption of both principal and interest payments to both the first and second mortgage bond holders. Both the First Mortgage Bonds and Second Mortgage Bonds have been modified to a fully amortized fixed rate, quarterly interest payment of 6.25% with a new maturity date of September 2037 for all the issued and outstanding bonds. Agape has missed two quarterly interest payments to all bondholders for the nine month period ended September 30, 2016. A principal distribution of approximately $20,000 was made during the quarter ended September 30, 2016 reducing the principal balance outstanding. The Company, along with all other bondholders, has a superior lien over all other creditors. The Company has an aggregate allowance for losses of $380,000 and $200,000 for the First and Second Mortgage Bonds both at September 30, 2016 and December 31, 2015, which effectively reduces the bonds to the fair value amount management believes will be recovered.

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Secured Investor Certificates

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Secured Investor Certificates

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 6.66% and 6.44% at September 30, 2016 and December 31, 2015, 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 $231,000 and $356,000 for the three months ended September 30, 2016 and 2015, respectively. The secured investor certificates have certain financial and non-financial covenants identified in the respective series’ trust indentures.

The estimated maturity schedule for the secured investor certificates at September 30, 2016 is as follows:

October 1, 2016 through September 30, 2017	$    4,005,000
October 1, 2017 through December 31, 2017	463,000
2018	4,116,000
2019	2,333,000
2020	4,058,000
Thereafter	13,782,000
Totals	$28,757,000

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Transactions With Affiliates

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Transactions With Affiliates

5. 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. A majority of the independent board members approve the advisory agreement on an annual basis. The Company paid the Advisor management fees of approximately $78,000 and $80,000 for the three months ended September 30, 2016 and 2015, respectively and management fees of approximately $238,000 and $265,000 for the nine months ended September 30, 2016 and 2015, respectively.

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Fair Value Of Financial Instruments

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Fair Value Of Financial Instruments

6. 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 September 30, 2016 and December 31, 2015, 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:

	September 30, 2016				December 31, 2015
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Cash and equivalents	$	4,483,963	$	4,483,963	$	4,377,110	$	4,377,110
Accounts receivable		220,116		220,116		189,609		189,609
Interest receivable		172,526		172,526		172,169		172,169
Mortgage loans receivable		24,879,552		30,214,164		25,354,876		29,054,399
Bond portfolio		11,599,616		11,599,616		10,713,428		10,713,428
Secured investor certificates		28,757,000		40,614,165		28,246,000		36,995,152

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 greater than the carrying value as the portfolio is currently yielding a higher rate than similar mortgages with similar terms for borrowers with similar credit quality.

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.

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Summary Of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

Basis Of Presentation

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, 2015 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, 2015. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2016.

Nature of Business

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

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

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

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 $1,169,528 and $2,233,533 in money market fund accounts at September 30, 2016 and December 31, 2015, respectively. The Company has not experienced any losses in such accounts.

Bond Portfolio

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 $104,000 and $84,000 in bonds as current assets as of September 30, 2016 and December 31, 2015, respectively, based on management’s estimates for liquidity requirements and contractual maturities of certain bonds maturing in 2017 and 2016, respectively.

Allowance for Mortgage Loans Receivable

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 loss policy provides an allowance for estimated uncollectible loans based on an evaluation of the current status of the loan portfolio. This policy provides for principal amounts outstanding on a particular loan if cumulative interruptions occur in the normal payment schedule of a loan; therefore, the Company recognizes a provision 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 September 30, 2016, the Company provided $1,286,789 for seventeen mortgage loans, of which seven totaling approximately $3,460,268 are three or more mortgage payments in arrears, two loans totaling $1,225,659 are declared to be in default and two loans totaling $623,648 are in the foreclosure process. At December 31, 2015, the Company provided $1,205,000 for eighteen mortgage loans, of which eight totaling approximately $3,724,000 were three or more mortgage payments in arrears, two loans totaling approximately $1,004,000 were declared to be in default and three loans totaling approximately $775,000 were in the foreclosure process.

A summary of transactions in the allowance for credit losses for the six months ended June 30, 2016 is as follows:

Balance at December 31, 2015	$	1,204,833
Provision for additional losses		161,312
Reclassified to real estate held for sale		(29,806	)
Charge-offs		(49,550	)
Balance at June 30, 2016	$	1,286,789

The total impaired loans, which are loans that are in the foreclosure process or are declared to be in default, were approximately $1,849,000 and $1,779,000 at September 30, 2016 and December 31, 2015, respectively, which the Company believes are adequately secured by the underlying collateral and the allowance for mortgage loans. Approximately $640,000 and $581,000 of the Company’s allowance for mortgage loans was allocated to impaired loans at June 30, 2016 and December 31, 2015, respectively.

The Company will declare a loan to be in default and will place the loan on non-accrual status when the following thresholds have been met: (i) the borrower has missed three consecutive mortgage payments; (ii) the borrower has not communicated to the Company any legitimate reason for delinquency in its payments to the Company and has not arranged for the re-continuance of payments; (iii) lines of communication to the borrower have broken down such that any reasonable prospect of rehabilitating the loan and return of regular payments is gone.

The Company’s policies on payments received and interest accrued on non-accrual loans are as follows: (i) The Company will accept payments on loans that are currently on non-accrual status when a borrower has communicated to us that they intend to meet their mortgage obligations. A payment made on a non-accrual loan is considered a good faith deposit as to the intent to resume their mortgage payment obligation. This good faith deposit is credited back to interest first then principal as stated in the mortgage loan documentation. (ii) A letter outlining the re-payment terms or the restructure terms (if any) of the loan is provided to the borrower. This letter will be signed by the Senior Pastor and all board members of the borrower. This letter resumes the obligation to make payments on non-accrual loans. (iii) The borrower must meet all its payment obligations for the next 120 days without interruption in order to be removed from non-accrual status.

When a loan is declared in default according to the Company’s policy or deemed to be doubtful of collection, the loan committee of the Advisor to the Company will direct the staff to charge-off the uncollectable receivables.

Loans totaling approximately $3,486,000 and $3,724,000 exceeded 90 days past due but continued to accrue interest at September 30, 2016 and December 31, 2015, respectively. The Company believes that 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

Real Estate Held for Sale

As of June 30, 2016, the Company had two properties acquired through foreclosure, and one via deed in lieu of foreclosure, with outstanding loan balances totaling approximately $618,000. The Company has listed the properties for sale through local realtors except for the property for which we received a deed in lieu of foreclosure. The Church is still occupying this property and paying rent while trying to either sell the building or obtain refinancing. Each property is valued based on its current listing price less any anticipated selling costs, including, for example, realtor commissions. 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. The fair value of our real estate held for sale, which represents the carrying value, is approximately $341,000 as of September 30, 2016 after an impairment of approximately $277,000.

The Company sold one property acquired through foreclosure for approximately $32,000 for the quarter ended September 30, 2016.

Carrying Value of Long-Lived Assets

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 allowance for losses 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

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

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 (Loss) Per Common Share

Income (Loss) Per Common Share

No adjustments were made to income for the purpose of calculating earnings (loss) per share, as there were no potential dilutive shares outstanding.

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Summary Of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

Allowance For Credit Losses

Balance at December 31, 2015	$	1,204,833
Provision for additional losses		161,312
Reclassified to real estate held for sale		(29,806	)
Charge-offs		(49,550	)
Balance at September 30, 2016	$	1,286,789

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Fair Value Measurments (Tables)

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Fair Value Measurement Bond Portfolio

				Fair Value Measurement
September30, 2016		Fair Value		Level 3
Bond portfolio	$	11,219,616	$	11,219,616

				Fair Value Measurement
December 31, 2015		Fair Value		Level 3
Bond portfolio	$	10,513,428	$	10,513,428

Change In Fair Value Measurement Bond Portfolio

		Bond Portfolio
Balance at December 31, 2015	$	10,513,428
Purchases		965,000
Proceeds		(78,812	)
Additional Bond Fund Reserve		(180,000	)
Balance at June 30, 2016	$	11,219,616

Fair Value Measurement Impaired Loans and Real Estate Held For Sale

	September 30, 2016
	Level 1		Level 2		Level 3		Fair Value at September 30, 2016
Impaired Loans	$	—	$	—	$	1,184,625	$	1,184,625
Real estate held for resale		—		—		340,872		340,872
	$	—	$	—	$	1,525,497	$	1,525,497

	December 31, 2015
	Level 1		Level 2		Level 3		Fair Value at December 31, 2015
Impaired Loans	$	—	$	—	$	1,197,302	$	1,197,302
Real estate held for resale		—		—		697,422		697,422
	$	—	$	—	$	1,894,724	$	1,894,724

Change In Fair Value Measurement Impaired Loans and Real Estate Held For Sale

		Impaired Loans			Real Estate Held for Sale
Balance at December 31, 2015	$	1,197,302		$	697,422
Additions/Acquisitions		221,683			134,173
Dispositions/Proceeds		(134,173	)		(471,550	)
Provision for other than temporary losses		(100,187	)		(19,173	)
Balance at June 30, 2016	$	1,184,625		$	340,872

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Mortgage Loans Receivable and Bond Portfolio (Tables)

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Mortgage Loans Receivable and Bond Portfolio

	Mortgage Loans	Bond Portfolio
October 1, 2016 through September 30, 2017	$     794,174	$  104,000
October 1, 2017 through December 31, 2017	2,380,015	41,000
2018	1,340,662	139,000
2019	1,355,748	144,000
2020	1,380,671	156,000
Thereafter	17,595,321	11,015,616
	24,846,591	11,599,616
Less loan loss and bond loss allowances	(1,286,789)	(380,000)
Less deferred origination income	(344,794)	______-__
Totals	$23,215,008	$ 11,219,616

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Secured Investor Certificates (Tables)

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Maturity Schedule Secired Investor Certificates

October 1, 2016 through September 30, 2017	$    4,005,000
October 1, 2017 through December 31, 2017	463,000
2018	4,116,000
2019	2,333,000
2020	4,058,000
Thereafter	13,782,000
Totals	$28,757,000

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Fair Value Of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Carrying Amount and Fair Value Financial Instruments

	September 30, 2016				December 31, 2015
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Cash and equivalents	$	4,483,963	$	4,483,963	$	4,377,110	$	4,377,110
Accounts receivable		220,116		220,116		189,609		189,609
Interest receivable		172,526		172,526		172,169		172,169
Mortgage loans receivable		24,879,552		30,214,164		25,354,876		29,054,399
Bond portfolio		11,599,616		11,599,616		10,713,428		10,713,428
Secured investor certificates		28,757,000		40,614,165		28,246,000		36,995,152

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Mortgage Loans Receivable and Bond Portfolio - Mortgage Loans Receivable and Bond Portfolio (Details)	Sep. 30, 2016 USD ($)
Mortgage Loans
October 1, 2016 through September 30, 2017	$ 794,174
October 1, 2017 through December 31, 2017	2,380,015
2018	1,340,662
2019	1,355,748
2020	1,380,671
Thereafter	17,595,321
Subtotal	24,846,591
Less loan loss and bond loss allowances	(1,286,789)
Less deferred origination income	(344,794)
Totals	23,215,008
Bond Portfolio
October 1, 2016 through September 30, 2017	104,000
October 1, 2017 through December 31, 2017	41,000
2018	139,000
2019	144,000
2020	156,000
Thereafter	11,015,616
Subtotal	11,599,616
Less loan loss and bond loss allowances	(380,000)
Less deferred origination income
Totals	$ 11,219,616

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Summary Of Significant Accounting Policies (Details Narrative) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Accounting Policies [Abstract]
Money Market Funds	$ 1,169,528	$ 2,233,533
Bond Portfolio	104,000	84,000
Allowance for Mortgage Loans Receivable	1,286,789	1,205,000
Loans Exceeding 90 Days Past Due	3,460,000	3,724,000
Loans in Default	1,225,659	1,004,000
Foreclosed Properties	623,648	775,000
Real Estate Held for Sale Carrying Value	340,872	697,422
Allowance Allocated to Impaired Loans	652,000	581,000
Total Loan Impairment	1,849,000	1,779,000
Additional Impairment Real Estate Held For Sale	277,000
Real Estate Sold	32,000
Realized Loss Real Estate Sold
Loans In Default	$ 1,225,659	$ 1,004,000

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Fair Value Measurments (Details Narrative) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Notes to Financial Statements
Loan Loss Reserve Church Bonds	$ 380,000	$ 200,000
Loan Loss Impaired Loans	$ 48,979	$ 193,104

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Mortgage Loans Receivable and Bond Portfolio (Details Narrative) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Notes to Financial Statements
Mortgage Loans Receivable Net of Reserves	$ 24,879,522	$ 25,354,876
Church Bonds Owned Gross	11,600,000	10,713,000
Bond Reserve Fund	380,000	200,000
Agape First Mortgage Bonds	627,000
Agape Second Mortgage Bonds	487,000
Agape First Mortgage Bonds Gross	7,200,000
Agape Second Mortgage Bonds Gross	$ 715,000

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Secured Investor Certificates (Details Narrative) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Notes to Financial Statements
Renewals Secured Investor Certificates	$ 231,000	$ 356,000

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Transactions With Affiliates (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Notes to Financial Statements
Advisory Fee	$ 78,000	$ 80,000	$ 238,000	$ 265,000