MINISTRY PARTNERS INVESTMENT COMPANY, LLC: 2025 Performance Review

I’ve put together this guide to help you understand how Ministry Partners Investment Company (MPIC) performed this year. My goal is to explain their business in plain English, focusing on the facts that matter most to your investment decisions.

1. What does this company do?

Think of MPIC as a financial bridge connecting investors with faith-based organizations. Owned by 11 credit unions, they act as a "Credit Union Service Organization." They help churches secure loans for construction or operations while also offering investment and insurance services.

They run two main businesses: a lending group for churches and an advisory group for financial planning. As of December 31, 2025, they manage a $90.2 million loan portfolio and $144.1 million in client assets.

2. How they make money

MPIC uses a diverse business model to stay stable. They earn money in three ways:

• Interest: They earn more from church loans than they pay to the people who invest in their debt certificates. This "net interest" generated $2.1 million in 2025.
• Commissions: Selling insurance and investment products brought in $1.8 million.
• Advisory Fees: Charging for financial planning services added $0.9 million to their revenue.

3. The "Scorecard": How did they do in 2025?

The company reported a loss of $642,000 in 2025. This occurred because they increased their reserves for potential loan defaults and faced higher interest costs on their debt certificates. Consequently, they did not pay "bonus" dividends to preferred investors. While they still paid dividends to Series A Preferred Unit holders, the payout was adjusted from $4.76 per unit in 2024 to $3.99 in 2025 to preserve cash.

4. Financial Health & The "Safety Net"

MPIC manages $234.3 million in assets. To protect against losses, they maintain an "allowance for loan losses"—a fund for when a church cannot repay a loan. This fund holds $1.1 million, or about 1.22% of their total loans.

The company is shifting its strategy to rely less on big banks and more on selling debt certificates directly to individual investors. These retail investors currently fund 68% of the total loan portfolio. Their renewal rate—the percentage of investors who reinvest when a certificate matures—was 76% in 2025.

5. Key Risks

• The "Pastor Factor": A church’s ability to pay often depends on its leadership. If a senior pastor leaves, it can create instability that may lead to a loan default.
• Property Liquidity: If a church defaults, MPIC takes ownership of the building. Because church properties have specialized zoning, they can be difficult to sell. If this happens, the company faces ongoing property taxes and maintenance costs.
• Construction Exposure: Many loans fund construction projects. If these projects face delays or cost overruns, churches may struggle to meet payment schedules. Currently, 35% of the portfolio is tied to active construction.
• Regulatory Hurdles: Strict rules limit who can purchase their investments. The company must consistently attract "qualified" investors to grow and meet their future capital needs.

6. Future Outlook

MPIC is pivoting to rely more on service fees rather than just loan interest. They aim to grow advisory revenue by 12% in 2026. To support this, they are investing $450,000 in new technology to improve lending efficiency and are actively seeking new credit union partners.

Investor Takeaway: When considering an investment in MPIC, weigh the company's shift toward fee-based revenue against the risks inherent in church-based lending. Because their success is tied directly to the financial health of the churches they serve, their performance is sensitive to changes in church donations and leadership stability.