v3.26.1
Segment Reporting
 12 Months Ended
Dec. 31, 2025
Segment Reporting [Abstract]  
Segment Reporting

5. Segment Reporting

 

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic (“ASC”) 280, Segment Reporting, requires that the Company report financial and descriptive information about reportable segments and how these segments were determined. We determine the allocation of resources and performance of business units based on operating income and net income, which are the same. Segments are identified and aggregated based on products sold or services provided. Based on these factors, we have determined that the Company’s operations were in two segments prior to the sale of 339 Justabout Land Company, LLC, as further described below. The segments were commercial lending and the development of land parcels. Information about reportable segments, and reconciliations of such information to the Consolidated Financial Statements are described below.

 

On August 6, 2025, the Company completed the sale of all assets held by 339 Justabout Land Company, LLC (“339”), a business segment, to the principal owners of the Company’s largest customer, Benjamin Marcus Homes (“BMH” or “Buyer”), for a sales price of $9,876. The assets sold consisted primarily of undeveloped lots, which had a net book value of $9,683 at the time of the sale. The sale includes the settlement of $725 in option fees receivable from BMH at the time of closing and a reduction of $240 in deferred revenue associated with prior deposits from BMH for lot purchases from 339. The Company recognized a gain of $193 on the sale.

 

Concurrent with the sale of 339, the Company amended its existing credit agreement with BMH to increase the total loan commitment to $13,450. At closing, BMH borrowed $11,416 under the amended agreement. Of this amount, $9,876 was used to fund the purchase of 339, $1,000 was allocated to a refundable prepaid interest account related to the increased loan commitment, and $54 was used to settle outstanding payables to the Company for accounting services. The balance on this credit agreement is presented in loans receivable in the accompanying Consolidated Balance Sheet as of December 31, 2025. All assets transferred to BMH in connection with the sale of 339 sale were pledged as collateral under the amended credit agreement.

 

Reconciliation of Consolidated Statements of Operations:

 

Shepherd’s Finance, LLC

Consolidated Statements of Operations

For the Year Ended December 31, 2025

Schedule of Information about Reportable Segments and Reconciliations of Consolidated Financial Statements 

(in thousands of dollars)  339 Justabout Land Company, LLC  

Shepherd’s

Finance, LLC

   Total 
             
Net Interest and Fee Income                         
Interest and fee income on loans  $–   $10,804   $10,804 
Interest expense:               
Interest related to secure borrowings   –    1,473    1,473 
Interest related to unsecured borrowings   –    3,599    3,599 
Interest expense  $–   $5,072   $5,072 
                
Net interest and fee income   –    5,732    5,732 
                
Less: Provision for credit losses   –    1,066    1,066 
Net interest and fee income after provision for credit losses   –    4,666    4,666 
                
Non-Interest Income               
Gain on sale of real estate investments  $193   $83   $276 
Revenue from the sale of land parcels   2,805    –    2,805 
Option fee income   314    –    314 
Other income   –    249    249 
Total non-interest income  $3,312   $332   $3,644 
                
Income before non-interest expense   3,312    4,998    8,310 
                
Non-Interest Expense               
Selling, general and administrative  $–   $3,824   $3,824 
Depreciation and amortization   –    63    63 
Loss on foreclosed assets   –    205    205 
Cost of land parcels sold   2,805    –    2,805 
Total non-interest expense  $2,805   $4,092   $6,897 
                
Net Income  $507   $906   $1,413 

 

 

Shepherd’s Finance, LLC

Consolidated Statements of Operations

For the Year Ended December 31, 2024

 

(in thousands of dollars)  339 Justabout Land Company, LLC  

Shepherd’s

Finance, LLC

   Total 
             
Net Interest and Fee Income               
Interest and fee income on loans  $–   $10,198   $10,198 
Interest expense:               
Interest related to secure borrowings   –    1,297    1,297 
Interest related to unsecured borrowings   –    3,564    3,564 
Interest expense  $–   $4,861   $4,861 
                
Net interest and fee income   –    5,337    5,337 
                
Less: Provision for credit losses   –    762    762 
Net interest and fee income after provision for credit losses   –    4,575    4,575 
                
Non-Interest Income               
Gain on foreclosed assets  $–   $–   $– 
Revenue from the sale of land parcels   2,998    –    2,998 
Option fee income   816    –    816 
Other income   –    82    82 
Total non-interest income  $3,814   $82   $3,896 
                
Income before non-interest expense   3,814    4,657    8,471 
                
Non-Interest Expense               
Selling, general and administrative  $–   $3,061   $3,061 
Depreciation and amortization   –    80    80 
Loss on foreclosed assets   –    595    595 
Cost of land parcels sold   2,998    –    2,998 
Total non-interest expense  $2,998   $3,736   $6,734 
                
Net Income  $816   $921   $1,737 

 

 

Reconciliation of total assets:

 

(in thousands of dollars)  339 Justabouot Land Company, LLC  

Shepherd’s

Finance,

LLC

   Elimination   Total 
                 
Total assets as of December 31, 2025  $–   $68,536   $–   $68,536 
                     
Total assets as of December 31, 2024  $11,977   $58,253   $–   $70,230