SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-KSB

(Mark One)

[ X ] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2003

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 333-4028LA

MINISTRY PARTNERS INVESTMENT CORPORATION

(Name of small business issuer in its charter)





|California(State or other jurisdiction of incorporation or organization) | 33-0489154
(I.R.S. Employer Identification Number)
|------------------------------------------------------------------------ | --------------------------------------------------

955 West Imperial Highway, Brea, California, 92822

(Address of principal executive offices)(Zip code)

(714) 671-5720

(Issuer's telephone number)

Securities registered under Section 12(b) of the Exchange Act:

Title of each class:

Name of each exchange on which registered:

Securities registered under Section 12(g) of the Exchange Act:

Title of each class:

Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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
|----- | --



Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [x] Issuer's revenues for its most recent fiscal year: $2,375,973



State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of a specified date within the past 60 days: None.

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:

At December 31, 2003, registrant had issued and outstanding 125,000 shares of its no par value common stock, all of which were held by Evangelical Christian Credit Union. No market exists for the Common Stock. Registrant estimates the aggregate market value of such shares to be not greater than $1,250,000.



DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference, briefly describe them and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) Into which the document is incorporated: (1) any annual report to security holders; (2) any proxy or information statement; and (e) any prospectus filed pursuant to Rule 424(b) or of the Securities Act of 1933 ("Securities Act"). The list documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1990).



Transitional Small Business Disclosure Format (check one):

|YES | NO X
|--- | ----





PART I

Item 1. Description of Business

The Company:

The Company, Ministry Partners Investment Corporation, is a California corporation, formed in October, 1991. The Company was formed by ECCU, which owns all of the Company's outstanding common stock. See "BUSINESS OF THE COMPANY - ECCU and Its Relationship to the Company." The Company is a taxable organization under both federal and California state law. ECCU is a mutual benefit corporation and is exempt from both federal and California state income taxes but is subject to taxes on unrelated business income.

The Company was organized for the purpose of providing funds for real property secured loans for the benefit of Evangelical churches and church organizations through funding provided to the Company by members of and persons associated with such churches and organizations. In accordance with its mission, the Company seeks to provide higher than average yields to its investors in relation to the yields it realizes on its mortgage loan investments and its operating, general and administrative costs. The Company does not seek to maximize its profits from its lending activities. The Company's primary goal will be to continue to provide affordable secured loans to Evangelical churches and church organizations on a cost effective basis both for the Company and such borrowers.

The Company is one of the few institutions or agencies within the western United States organized to assist local evangelical Christian church congregations and organizations to provide financing for the acquisition, development and/or renovation of churches or church-related properties. Historically, through the sale of its debt securities to persons affiliated with evangelical Christian churches and organizations, the Company has given these persons the opportunity to jointly and indirectly provide their organizations with such financing, something they may not have been able to accomplish individually. To date, the Company has suffered no defaults under any of its mortgage loans nor has the Company defaulted on or been delinquent in the payment of any interest or principal on the notes it has sold to investors.

The Company's investments are financed by the sale of investor notes and through ECCU's investment in the Company's common stock. The Company's mortgage loan investments are facilitated through a warehouse credit line from ECCU in the amount of $3,000,000. This credit line, which the Company intends to maintain indefinitely, is subject to ECCU's standard commercial loan requirements, including blanket liens on the Company's assets. ECCU has agreed to subordinate this loan to the payment of its Class A-1 and Class Alpha Notes. There is no assurance that ECCU will be able to continue to provide this credit line to the Company in the future.

The Company currently employs three full-time persons. ECCU provides the Company with certain services for which ECCU charges the Company on a current basis.



Reports:

The Company is not required to, and does not, deliver annual reports to its security holders.

The Company is required to file such reports with the Securities and Exchange Commission (the "Commission") as it may be required to file pursuant to the Exchange Act by reason of Section 15(d) thereof. The Company is not otherwise subject to the information requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith does not otherwise file reports, proxy statements and other information with the Commission. Any reports, proxy statements and other information filed by the Company in accordance with the Exchange Act can be inspected and copied at the public reference facilities maintained by the Commission at Room 1204, Judiciary Plaza, 450 Fifth Street NW, Washington, DC 20549 and Suite 1400, 5670 Wilshire Boulevard, 11th Floor, Los Angeles, California 90036. Copies of such material can be obtained at prescribed rates from the public reference section of the Commission at 450 Fifth Street NW, Washington, DC 20549. Copies of such reports, proxy statements and other information concerning the company may also be obtained from the Commission's website at http://www.sec.gov.



Item 2. Description of Property

The Company's business offices are located at 955 West Imperial Highway, Brea, California 92822. The Company's telephone number is 800-753-6742.

The Company currently rents its offices (approximately 1200 square feet) from ECCU on a month-to-month basis for $2,160. ECCU provides the Company with certain services and the use of certain of its facilities for which ECCU charges the Company on a current basis. Presently, the amounts ECCU charges the Company in this regard are at the market rate for similar services and facilities charged by unrelated persons.



Item 3. Legal Proceedings

None

Item 4. Submission of Matters to a Vote of Security Holders

None.

PART II

Item 5. Market for Common Equity and Related Stockholder Matters.

The Company's common stock is not traded in any public market.

On February 25, 2002, the Company sold 200 shares of its Series A Preferred Stock to Telesis Community Credit Union, 9301 Winnetka Avenue, Chatsworth, CA 91311, at a cash price of $1,000 per share. The Company relied upon the exemption from Registration under Section 4(2) of the Securities Act of 1933 in making the sale.



Item 6. Management's Discussion and Analysis of Operations

The financial information included herein should be read in conjunction with the Financial Statements, including the notes thereto. The Company's plan of business consists of the offer and sale of debt obligations to investors on a continuous basis to provide funds for the Company's mortgage loan investments. Management believes that its strategy for maintaining liquidity will enable it to timely service and retire the notes regardless of the maturity mix of the notes outstanding.



Management intends to continue the Company's current liquidity plan which relies primarily on funds from operations, cash reserves and borrowings under the ECCU Credit Line to pay interest and principal on its debt securities on a timely basis. In addition, the Company has from time to time asked ECCU to repurchase some of the Company's mortgage loan investments in order to provide short term liquidity, in each case ECCU agreed to do so. However, ECCU is under no obligation to continue this practice. Historically, the Company has experienced significant rates of reinvestment or renewal by its debt security investors upon maturity of their investments. These sources may not continue to provide sufficient liquidity in the event the Company does not experience comparable reinvestment rates on the notes. Even so, management believes that the Company can realize sufficient funds from its ECCU Credit Line and/or the sale or hypothecation of its mortgage loan investments, should additional funds be necessary to repay the Company's debt securities as they mature. Management bases this belief on the size and quality of the Company's mortgage loan investments, the availability of purchasers of those assets on a timely basis and a historic price (at or near par) paid for secured loans comparable to the Company's mortgage loan investments.

Management believes that it can continue to achieve profitable margins between interest revenues and interest expenses irrespective of fluctuating interest rates or inflation based on the adjustment of interest rates the Company pays to its note investors to reflect increases or decreases, in the blended index rate (as defined in the prospectus). In addition, a significant percentage of the Company's mortgage loan investments have variable interest rates and reflect interest rate fluctuations due to inflation or other factors over the term of the investment.

Results of Operations

During the twelve months ended December 31, 2003, the Company had net income of $125,189 as compared to net income of $104,277 for the same twelve months ended December 31, 2002, an increase in net income of $20,912. Interest income, net, for the period, was $814,481, an increase of 17% from $698,929 for the twelve months ended December 31, 2003. The Company's cost of funds (i.e., interest expense) during this period increased $270,841 (or 21%) to$1,561,492for the twelve-month period ending December 31, 2003 as compared to $1,290,651 for the twelve months ended December 31, 2002. The increase is attributable to growth in both the Company's debt securities (i.e., notes payable) and notes receivable portfolios over the same period in 2002. At December 31, 2003, the company had outstanding debt securities (notes payable) of $43,016,580, up from $30,248,223 at December 31, 2002, an increase of 42%.

The Company's operating expenses for the twelve months ended December 31, 2003 increased to $543,812 from $471,816for the same period ending December 31, 2002, an increase of 15%. This is attributable to increases in Salaries and Benefits, and increases in Office Operations for the company over the same period in 2002.



Liquidity and Capital Resources

Net increase in cash during the twelve months ended December 31, 2003 was $1,267,974, compared to a net increase of $82,178 for the twelve months ended December 31, 2002. This increase of $1,185,796 was due to increases in net cash provided by financing. Net cash provided by operating activities totaled $82,904 for the twelve months ended December 31, 2003; a decrease of $68,429 from $151,333 provided by operating activities during the twelve months ended December 31, 2002.

Net cash used by investing activities totaled $11,777,313 during the twelve months ended December 31, 2003, compared to $7,370,344 usedduring the twelve months ended December 31, 2002, an increase in cash used of $4,406,969. This difference is primarily attributable to an increase in cash used by net notes receivable (the difference between purchases of notes receivable and principal payments received on notes receivable) during the twelve months ended December 31, 2003 as compared to the same period in 2002.

Net cash provided by financing activities totaled $12,962,383 for this twelve-month period in 2003, an increase of $5,661,194 from $7,301,189 provided by financing activities during the twelve months ended December 31, 2002. This difference is primarily attributable to an increase in cash provided by net borrowings on notes payable (the difference between principal payments made one notes payable and proceeds from borrowings on notes payable) and proceeds from the sale of preferred stock as compared to the same period in 2002.

At December 31, 2003, the Company's cash, which includes cash reserves and cash available for investment in the mortgage loans, was $1,462,799, up from$194,825 at December 31, 2002, an increase of $1,267,974.



The Balance Sheets, Statements of Income and Retained Earnings and Statements of Cash Flows for the twelve months ended December 31, 2003 and 2002 of Registrant (the "Company") are included following the Independent Auditor's Report below.



Item 8. Changes In and disagreements With Accountants on Accounting and Financial Disclosure

None



PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(a) of the Exchange Act Set forth below are the Directors and Executive officers of the Company:

|Name:                | Age | Position Held:                                                          
|-------------------- | --- | ------------------------------------------------------------------------
|Mark G. Holbrook     | 54  | Chairman of the Board, Chief Executive Officer                          
|Stephen A. Ballas    | 54  | President                                                               
|Mark A. Johnson      | 46  | Vice Chairman of the Board, Chief Financial Officer, Treasurer, Director
|Van C. Elliott*      | 68  | Director                                                                
|Arthur G. Black*     | 65  | Director                                                                
|Scott T. Vandeventer | 47  | Director                                                                
|Shirley Bracken*     | 52  | Director                                                                





The following is a summary of the business experience of the officers and directors of the Company during the past five years.

MARK G. HOLBROOK has served as our chairman since our inception. Mr. Holbrook also serves as president and chief executive officer of ECCU. He began his career with ECCU in 1975 and has served as its president since 1984. ECCU currently has assets under management of over $1 billion and more than 13,000 members in 50 states and 100 foreign countries. Mr. Holbrook has served as Board Chairman of Christian Management Association. He received his Bachelor of Arts degree from Biola University in 1973 and has completed post-graduate studies at Chapman College.

STEPHEN A. BALLAS has served as our president since May 1, 2000. Prior to joining the Company, Mr. Ballas was employed by and/or served as a consultant to manufacturing companies, software start-ups, and medical equipment companies. Mr. Ballas was a partner in and President of The Loan Connection and served as executive officer of operations of Founders Financial and Vice President of Meracor Mortgage. Mr. Ballas has extensive experience in real estate development, mortgage lending and marketing, including service as President of a mortgage origination company from 1990 to 1993.

MARK A. JOHNSON has served as chief financial officer, treasurer, and a director since our inception. Mr. Johnson also serves as executive vice president of ECCU, a position he has held since June, 1993. Prior to joining ECCU, Mr. Johnson served as vice president of a multi-company commercial warehousing/distribution organization and for six years served as president and chief executive officer of a subsidiary of that company. Prior to that, Mr. Johnson served as vice president/branch manager of a Southern California independent bank. Mr. Johnson has a Bachelor of Science degree in Business Administration from Biola University.

VAN C. ELLIOTT has served as a director since 1994. He has served as director for ECCU since 1990. Mr. Elliott served as associate director of the Conservative Baptist Association of Southern California from 1980 to 1994 where he was responsible for the general administrative oversight of the association's activities. Since that time, he has been self-employed as a consultant, and is Vice President of Business Services for Dynamic Church Planting International. He received his Bachelor's and Master's degrees in mathematics and speech from Purdue University and spent seven years in the computer industry. Mr. Elliott holds a Master of Divinity from Denver Seminary and has spent fourteen years in local church ministries serving in the areas of Christian education and administration. He has completed post-graduate instruction at the College for Financial Planning. Mr. Elliott is a member of the Institute of Certified Financial Planners, Christian Estate Planners of California, Christian Management Association, and holds the professional designation of Certified Financial Planner.

ARTHUR G. BLACK has served as a director since 1997. Mr. Black is currently Director of Ministry Support for Ambassador Advertising Agency. Prior to joining that firm in 1998, he had served as a ministry development officer at ECCU. Mr. Black was previously executive vice president of Truth For Life (1994-1996), a nationally-syndicated radio Bible teaching ministry. He held similar positions with the Biola Hour (1981-1991) and Solid Rock Radio (1991-1993), and he served as director of U.S. broadcasting for Insight For Living from 1993 to 1994. Mr. Black has been in Christian ministry management since 1974. Prior to that, he held several corporate sales and marketing management positions and six years as owner/President of two consumer product/service companies. He is a General Partner for Rancho Sierra Acres, Christian Investors, P/L Properties and Ocean View Investors. Mr. Black was elected to the Board of Directors to replace the seat previously held by Paul A. Kienel.

SCOTT T. VANDEVENTER has served as a director since 1992. Mr. Vandeventer has been employed by ECCU since 1988 and is currently executive vice president and chief operating officer of ECCU. Prior to that time, Mr. Vandeventer provided consulting services to ECCU and others through AM Business Communications, Inc., a marketing communication company he has managed since he founded the company in 1980. Mr. Vandeventer is also currently associated with NYE Partners, a business consulting firm whose clients may include firms doing business with us and/or ECCU. Mr. Vandeventer received his Bachelors Degree from Biola University and has completed graduate work in finance and marketing at California State University Fullerton School of Business Administration.

SHIRLEY M. BRACKEN has served as a director since June 2003. Ms. Bracken has owned and operated Shirley Bracken Consulting Services, a consulting firm providing services in the areas of communications, funding, development, and marketing for non-profit organizations including schools since 1997. Ms. Bracken also worked for Carl Karcher Enterprises, Inc. of Anaheim, California which she first joined in 1983. At the time she left, Ms. Bracken served as that Company's Vice-President, Communications/ Human Resources. Ms. Bracken has more than 15 years experience in senior management, communications, and public affairs and has extensive experience in employee communications, government affairs, media relations, crisis management, and community relations. Ms. Bracken holds a Bachelors Degree in Sociology from California State University, Fullerton, and has completed coursework towards an MBA at the Claremont Graduate School.

The Company has no class of equity securities registered pursuant to Section 12 of the Exchange Act.



Item 10. Executive Compensation

Except for Mr. Ballas, none of the Company's officers or directors currently receives compensation from the Company. Each, however, is entitled to be reimbursed for expenses incurred in performing duties on behalf of the Company.

The following table sets forth certain information regarding compensation paid by the Company for services rendered to the Company during its fiscal year ended December 31, 2003, its fiscal year ended December 31, 2002 and its fiscal year ended December 31, 2001 by its Chief Executive Officer, and President. Mr. Ballas was appointed President of the Company by the Board of Directors effective May 1, 2000. Mr. Ballas replaced interim President and Board Member Van C. Elliot, who succeeded Mr. Garmo on January 3, 2000.

Except for Mr. Ballas, none of the Company's executive officers (the named Executive Officers) had total salary, plus bonus, exceeding $100,000 during this period.



Option/Warrant Grants in Current Fiscal Year:

No options, warrants or other rights to purchase securities of the Company have been issued.



Summary Compensation Table

Annual Compensation



|Name and Principal Position                         | Year Ended | Salary(s) | Bonus (2) | Other Annual Compensation (3) | All Other Compensation (4)
|--------------------------------------------------- | ---------- | --------- | --------- | ----------------------------- | --------------------------
|Mark G. Holbrook, Chairman, Chief Executive Officer | 2003       | (1)       | -0-       | -0-                           | -0-                       
|2002                                                | (1)        | -0-       | -0-       | -0-                          
|2001                                                | (1)        | -0-       | -0-       | -0-                          
|                                                    |            |           |           |                               |                           
|Stephen A. Ballas, President                        | 2003       | $ 86,320  | $ 20,500  | $ 4,800                       | $10,035                   
|                                                    | 2002       | $ 86,100  | $ 14,300  | $ 4,800                       | $ 8,856                   
|                                                    | 2001       | $ 78,923  | $ 8,770   | $ 4,800                       | $ 8,505                   
|                                                    |            |           |           |                               |                           



(1) Mr. Holbrook is a full-time employee of ECCU. Since December 1, 1994, the commencement date of hiring Mr. Garmo as president of the Company, Mr. Holbrook has expended, on the average, approximately 2% of his time as an officer and director of the Company. The Company reimburses ECCU for that portion of Mr. Holbrook's time devoted to service to the Company as an officer (but not director). Mr. Holbrook currently devotes less than 1% of his time serving the Company as an officer.

(2) An aggregate bonus amount of $20,500 was paid to Mr. Ballas for the Fiscal year 2003.

(3) Includes an automobile allowance of $4,800 for the fiscal year 2003, paid by the Company for the benefit of Mr. Ballas.

(4) The company contributed an aggregate amount of $6,564 for Mr. Ballas' Retirement plan, $2,406 for medical benefits and $1,065 for life and disability insurance.



Item 11. Security Ownership of Certain Beneficial Owners and Management.

The Company has 125,000 shares of its common stock outstanding, all of which shares are owned by Evangelical Christian Credit Union, 955 West Imperial Highway, Brea, California 92821. The Company has 200 shares of its preferred stock outstanding, all of which are owned by Telesis Community Credit Union, 9301 Winnetka Avenue, Chatsworth, CA 91311. None of the Company's officers or directors beneficially owns any of the outstanding shares. The Company does not have outstanding any options, warrants or convertible securities. There are no other rights to purchase equity securities other than as disclosed.

The Company has not authorized the issuance of any of its securities under an equity compensation plan.



Item 12. Certain Relationships and Related Transactions

As described elsewhere in this Memorandum, ECCU is our sole shareholder. Since our inception, ECCU has provided us with a line of credit which, under its March 28, 2003 loan agreement, is currently a $3.0 million revolving credit line loan. The terms and conditions of this credit line, including the interest rates charged thereon, are the same as those charged by ECCU to its other commercial borrowers. Pursuant to the Subordination Agreement, ECCU has agreed to subordinate repayment of its loans to us to certain classes of our debt securities. There is no assurance that in the future ECCU will not modify, reduce or terminate this credit line.

During the years ended December 31, 2003 and 2002, respectively, we purchased participation loans totaling $41,363,266 and $30,809,066 from ECCU.We recognized interest income on notes receivable from ECCU of $2,355,524 and $1,977,919 during the years ended December 31, 2003 and 2002, respectively.

The Company pays support charges for management services and rent to ECCU on a month-to-month basis. For the years ended December 31, 2003 and 2002, respectively, charges of $79,380 and $79,380 were paid for these services. The periodic charges are based on the fair market value of services provided. The Company also reimbursed ECCU $234,888 and $195,022, for the salaries and benefits of employees we used during the years ended December 31, 2003 and 2002.

Item 13. Exhibits and Reports on Form 8-K

Exhibits:

27 Financial Data Schedule (included)

Reports on Form 8-K:

None



Item 14. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures. Based on their evaluation as of a date within 90 days of the filing date of this Annual Report on Form 10-K, the principal executive officer and principal financial officer of the Company have concluded that the Company's disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the securities Exchange Act of 1934) are effective to ensure that the information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Changes in Internal Controls. There were no significant changes in the Company's internal controls or in other factors that could significantly affect those controls subsequent to the date of their most recent evaluation.



Item 15. (Reserved)



Item 16. Principal Accountant Fees and Services.



SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: March 29, 2004 MINISTRY PARTNERS INVESTMENT CORPORATION

(Registrant)



|By: /s/ Stephen A. Ballas     
|------------------------------
|                              
|                              
|                              
|By: /s/ Gabriel B. Encarnacion
|                              
|                              







MINISTRY PARTNERS INVESTMENT CORPORATION

FINANCIAL STATEMENTS

DECEMBER 31, 2003 AND 2002



TABLE OF CONTENTS

|                                           | Page
|------------------------------------------ | ----
|Independent Auditor's Report               | 1   
|Balance Sheets                             | 2   
|Statements of Income and Retained Earnings | 3   
|Statements of Cash Flows                   | 4   
|Notes to Financial Statements              | 6   























INDEPENDENT AUDITOR'S REPORT



Board of Directors



We have audited the accompanying balance sheets of Ministry Partners Investment Corporation as of December 31, 2003 and 2002, and the related statements of income and retained earnings and cash flows for the years then ended. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Ministry Partners Investment Corporation as of December 31, 2003 and 2002, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.



/s/ TURNER, WARREN, HWANG & CONRAD

TURNER, WARREN, HWANG & CONRAD

ACCOUNTANCY CORPORATION







MINISTRY PARTNERS INVESTMENT CORPORATION

BALANCE SHEETS

DECEMBER 31

|                                                                                                                                                |   | 2003         |   | 2002        
|----------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------ | - | ------------
|ASSETS                                                                                                                                          |   | ___________  |   | ___________ 
|Current Assets                                                                                                                                  |   |              |   |             
|Cash                                                                                                                                            | $ | 1,462,799    | $ | 194,825     
|Notes receivable, net of allowance for losses of $90,000                                                                                        |   | 4,497,014    |   | 10,391,521  
|Loan receivable                                                                                                                                 |   | 349,273      |   | 689         
|Interest receivable                                                                                                                             |   | 175,972      |   | 148,506     
|Prepaid expenses                                                                                                                                |   | 18,733       |   | 29,210      
|                                                                                                                                                |   | ___________  |   | ___________ 
|Total Current Assets                                                                                                                            |   | 6,503,791    |   | 10,764,751  
|                                                                                                                                                |   | ___________  |   | ___________ 
|Other Assets                                                                                                                                    |   |              |   |             
|Notes receivable                                                                                                                                |   | 38,307,455   |   | 21,014,121  
|Loan receivable                                                                                                                                 |   | 63,026       |   | 63,726      
|Property and equipment, net of accumulated depreciation                                                                                         |   | 320          |   | 454         
|                                                                                                                                                |   | ___________  |   | ___________ 
|Total Other Assets                                                                                                                              |   | 38,370,801   |   | 21,078,301  
|                                                                                                                                                |   | ___________  |   | ___________ 
|Total Assets                                                                                                                                    | $ | 44,874,592   | $ | 31,843,052  
|                                                                                                                                                |   | ==========   |   | ==========  
|LIABILITIES AND STOCKHOLDER'S EQUITY                                                                                                            |   |              |   |             
|Current Liabilities                                                                                                                             |   |              |   |             
|Accounts payable                                                                                                                                | $ | 45,632       | $ | 45,954      
|Notes payable - current portion                                                                                                                 | $ | 33,063,632   | $ | 25,052,971  
|Income taxes payable                                                                                                                            |   | 12,443       |   | 68,154      
|                                                                                                                                                |   | ___________  |   | ___________ 
|Total Current Liabilities                                                                                                                       |   | 33,121,707   |   | 25,167,079  
|                                                                                                                                                |   | ___________  |   | ___________ 
|Long-term Liabilities                                                                                                                           |   |              |   |             
|Notes payable                                                                                                                                   |   | 43,016,580   |   | 30,248,223  
|Less current portion                                                                                                                            |   | (33,063,632) |   | (25,052,971)
|                                                                                                                                                |   | ___________  |   | ___________ 
|Total Long-term Liabilities                                                                                                                     |   | 9,952,948    |   | 5,195,252   
|                                                                                                                                                |   | ___________  |   | ___________ 
|Commitments and contingent liabilities                                                                                                          |   | -            |   | -           
|Stockholder's Equity                                                                                                                            |   |              |   |             
|Preferred stock, 1,000,000 shares authorized; 200 shares issued and outstanding, no par value (liquidation preference value of $1000 per share) |   | 200,000      |   | -           
|Common stock, 10,000,000 shares authorized; 125,000 shares issued and outstanding, no par value                                                 |   | 1,250,000    |   | 1,250,000   
|Retained earnings                                                                                                                               |   | 349,937      |   | 230,721     
|                                                                                                                                                |   | ___________  |   | ___________ 
|Total Stockholder's Equity                                                                                                                      |   | 1,799,937    |   | 1,480,721   
|                                                                                                                                                |   | ___________  |   | ___________ 
|Total Liabilities and Stockholder's Equity                                                                                                      | $ | 44,874,592   | $ | 31,843,052  
|                                                                                                                                                |   | ==========   |   | ==========  

The accompanying notes are an integral part of these financial statements

Page 2





MINISTRY PARTNERS INVESTMENT CORPORATION

STATEMENTS OF INCOME AND RETAINED EARNINGS

FOR THE YEARS END DECEMBER 31

|                                                                |   | 2003        |   | 2002       
|--------------------------------------------------------------- | - | ----------- | - | -----------
|INTEREST INCOME                                                 |   | ___________ |   | ___________
|Notes receivable and loan receivable                            | $ | 2,372,887   | $ | 1,984,147  
|Interest-bearing accounts                                       |   | 3,086       |   | 5,433      
|Miscellaneous income                                            |   | -           |   | -          
|                                                                |   | ___________ |   | ___________
|Total Interest Income                                           |   | 2,375,973   |   | 1,989,580  
|                                                                |   | ___________ |   | ___________
|INTEREST EXPENSE                                                |   |             |   |            
|Line of credit                                                  |   | 6,779       |   | 5,712      
|Notes payable                                                   |   | 1,554,713   |   | 1,284,939  
|                                                                |   | ___________ |   | ___________
|Total Interest Expense                                          |   | 1,561,492   |   | 1,290,651  
|                                                                |   | ___________ |   | ___________
|NET INTEREST INCOME                                             |   | 814,481     |   | 698,929    
|                                                                |   | ___________ |   | ___________
|PROVISION FOR NOTES RECEIVABLE LOSSES                           |   | 30,000      |   | 20,000     
|                                                                |   | ___________ |   | ___________
|NET INTEREST INCOME AFTER PROVISION FOR NOTES RECEIVABLE LOSSES |   | 784,481     |   | 678,929    
|                                                                |   | ___________ |   | ___________
|OTHER INCOME                                                    |   | 1,516       |   | 1,631      
|                                                                |   |             |   |            
|OPERATING EXPENSES                                              |   |             |   |            
|Salaries and benefits                                           |   | 271,231     |   | 212,522    
|Marketing and promotion                                         |   | 73,417      |   | 87,540     
|Office occupancy                                                |   | 31,285      |   | 23,344     
|Office operations                                               |   | 105,732     |   | 95,186     
|Legal and accounting                                            |   | 50,147      |   | 41,224     
|Ministry support                                                |   | 12,000      |   | 12,000     
|                                                                |   | ___________ |   | ___________
|Total Operating Expenses                                        |   | 543,812     |   | 471,816    
|                                                                |   | ___________ |   | ___________
|INCOME BEFORE PROVISION FOR INCOME TAXES                        |   | 242,185     |   | 208,744    
|Provision for income taxes                                      |   | 116,996     |   | 104,467    
|                                                                |   | ___________ |   | ___________
|INCOME AFTER INCOME TAXES                                       |   | 125,189     |   | 104,277    
|RETAINED EARNINGS, BEGINNING                                    |   | 230,721     |   | 126,444    
|Dividends                                                       |   | (5,973)     |   | -          
|Net income                                                      |   | 125,189     |   | 104,277    
|                                                                |   | ___________ |   | ___________
|RETAINED EARNINGS, ENDING                                       | $ | 349,937     | $ | 230,721    
|                                                                |   | ==========  |   | ========== 

The accompanying notes are an integral part of these financial statements

Page 3





MINISTRY PARTNERS INVESTMENT CORPORATION

STATEMENTS OF CASH FLOWS

FOR THE YEARS END DECEMBER 31

|                                                                                       |   | 2003         |   | 2002        
|-------------------------------------------------------------------------------------- | - | ------------ | - | ------------
|CASH FLOWS FROM OPERATING ACTIVITIES                                                   |   | ___________  |   | ___________ 
|Net income                                                                             | $ | 125,189      | $ | 104,277     
|Adjustments to reconcile net income to net cash
provided by operating activities:      |   |              |   |             
|Depreciation                                                                           |   | 737          |   | 740         
|Provision for notes receivable losses                                                  |   | 30,000       |   | 20,000      
|Increase in accrued interest receivable                                                |   | (27,466)     |   | (21,502)    
|Decrease in prepaid income taxes                                                       |   | -            |   | -           
|Decrease in prepaid expenses                                                           |   | 10,477       |   | (5,646)     
|Decrease in accounts payable                                                           |   | (322)        |   | 9,950       
|Decrease in income taxes payable                                                       |   | (55,711)     |   | 43,514      
|                                                                                       |   | ___________  |   | ___________ 
|Net cash provided by operating activities                                              |   | 82,904       |   | 151,333     
|                                                                                       |   | ___________  |   | ___________ 
|CASH FLOWS FROM INVESTING ACTIVITIES                                                   |   |              |   |             
|Loan made                                                                              |   | (347,884)    |   | -           
|Principal payments received on loan receivable                                         |   | -            |   | 585         
|Purchases of notes receivable                                                          |   | (41,363,266) |   | (30,809,066)
|Proceeds from sales and maturities and principal payments
received on notes receivable |   | 29,934,440   |   | 23,438,137  
|Purchases of property and equipment                                                    |   | (603)        |   | -           
|                                                                                       |   | ___________  |   | ___________ 
|Net cash used by investing activities                                                  |   | (11,777,312) |   | (7,370,344) 
|                                                                                       |   | ___________  |   | ___________ 
|CASH FLOWS FROM FINANCING ACTIVITIES                                                   |   |              |   |             
|Advances made on line of credit                                                        |   | 10,519,600   |   | 4,755,000   
|Amounts paid on line of credit                                                         |   | (10,519,600) |   | (4,755,000) 
|Principal payments made on notes payable                                               |   | (15,531,259) |   | (9,136,375) 
|Proceeds from borrowings on notes payable                                              |   | 28,299,615   |   | 16,437,564  
|Proceeds from sale of preferred stock                                                  |   | 200,000      |   | -           
|                                                                                       |   | ___________  |   | ___________ 
|Net cash provided by financing activities                                              |   | 12,968,356   |   | 7,301,189   
|                                                                                       |   | ___________  |   | ___________ 
|Net increase (decrease) in cash and cash equivalents                                   |   | 1,267,974    |   | 82,178      
|Cash and cash equivalents at beginning of year                                         |   | 194,825      |   | 112,647     
|                                                                                       |   | ___________  |   | ___________ 
|Cash and cash equivalents at end of year                                               | $ | 1,462,799    | $ | 194,825     
|                                                                                       |   | ==========   |   | ==========  
|                                                                                       |   |              |   |             





































The accompanying notes are an integral part of these financial statements

Page 4





MINISTRY PARTNERS INVESTMENT CORPORATION

STATEMENTS OF CASH FLOWS (CONTINUED)

FOR THE YEARS END DECEMBER 31



SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

|Interest paid     | $ | 1,561,492 | $ | 1,290,651
|----------------- | - | --------- | - | ---------
|Income taxes paid |   | 172,707   |   | 36,280   



The accompanying notes are an integral part of these financial statements

Page 5





MINISTRY PARTNERS INVESTMENT CORPORATION

NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2003 AND 2002



NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Nature of Business: Ministry Partners Investment Corporation was incorporated in California in 1991 and is a subsidiary of Evangelical Christian Credit Union (ECCU). The Company provides funds for real property secured loans for the benefit of Evangelical churches and church organizations through funding provided by members of and persons associated with such churches and organizations. The Company's offices, as well as those of its loan origination source, ECCU, are located in the state of California and substantially all of the business and operations of the Company are currently conducted in California and its mortgage loan investments are concentrated in California.



Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.



Notes Receivable: Interest income on notes receivable is recognized over the term of the note and is generally computed using the simple interest method. The allowance for notes receivable losses is increased by charges to income and decreased by charge offs (net of recoveries).



Property and Equipment: Furniture, fixtures, and equipment are stated at cost, less accumulated depreciation. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets, which range from three to five years.



Prepaid Offering Expense: Prepaid public offering is related to a public offering of unsecured notes. It is being amortized over a two-year period.

Reclassifications: Certain account reclassifications have been made to the financial statements of the prior year in order to conform to classifications used in the current year.



NOTE 2 - RELATED PARTY TRANSACTIONS

The Company maintains all its funds at the parent, ECCU. Total funds held with ECCU at December 31, 2003 and 2002 were $1,462,799 and $194,825, respectively. Interest earned on these funds for the years ended December 31, 2003 and 2002 were $3,086and $5,433, respectively.



Page 6



NOTE 2 - RELATED PARTY TRANSACTIONS (CONTINUED)

The Company, as part of its investment strategy, purchases an interest in participation loans offered for sale by ECCU. The Company purchased participation loans totaling $41,363,266and $30,809,066 from ECCU and received no fee income from ECCU during the years ended December 31, 2003 and 2002, respectively. The Company recognized interest income on notes receivable from ECCU of $2,355,524 and $1,977,919 during the years ended December 31, 2003 and 2002, respectively.

The Company pays support charges for management services and rent to ECCU on a month-to-month basis. Charges of $79,380and $79,380 were paid for these services for the years ended December 31, 2003 and 2002, respectively. The method used to arrive at the periodic charge is based on the fair market value of services provided. Management believes that such method is reasonable.

The Company reimburses ECCU for salaries and benefits of employees. The amounts reimbursed for the years ended December 31, 2003 and 2002 were $234,888 and $195,022, respectively.

The Company had $34,782 and $34,338 due to ECCU at December 31, 2003 and 2002, respectively.



NOTE 3 - NOTES RECEIVABLE

The notes receivable are backed by loan participation agreements secured by loans originated by ECCU to various churches and related organizations to finance facilities. Loan maturities extend through 2008. The notes earn interest at rates between 3.21% and 9.63%, with a weighted average yield of 5.43%.

The Company maintains allowance for notes receivable losses of $90,000. The Company has no experience of loan loss and, as of December 31, 2003, none of the loans are impaired. Management believes all of the notes are adequately secured and the allowance is adequately maintained.



NOTE 4 - LINE OF CREDIT

The Company has an unsecured $3,000,000 line of credit with ECCU that expires March 31, 2004. There were no outstanding borrowings as of December 31, 2003 and 2002. The interest rate at December 31, 2003 was 4.00%. The interest rate on this line varies based on changes in an independent index which is the Prime Rate published by The Wall Street Journal. Interest of $6,779 and $5,712 was paid to ECCU during the years ended December 31, 2003 and 2002, respectively.



NOTE 5 - NOTES PAYABLE



A summary of unsecured promissory notes payable at December 31 is as follows:



|                                    |   | 2003          |   | 2002         |  | Interest Rate at December 31, 2003
|----------------------------------- | - | ------------- | - | ------------ |  | ----------------------------------
|                                    |   | _____________ |   | ____________ |  | _______________                   
|Public Offering Notes - Class A     | $ | -             | $ | 163,743      |  | -                                 
|Public Offering Notes - Class A-1   |   | 1,244,139     |   | 2,278,827    |  | 1.82% to 7.50%                    
|Public Offering Notes - Alpha Class |   | 17,736,292    |   | 13,994,106   |  | 1.57% to 6.25%                    
|Special Offering Notes              |   | 23,918,491    |   | 13,682,766   |  | 1.82% to 7.58%                    
|International Notes                 |   | 117,658       |   | 128,781      |  | 2.13% to 6.69%                    
|                                    |   | _____________ |   | ____________ |  |                                   
|                                    | $ | 43,016,580    | $ | 30,248,223   |  |                                   
|                                    |   | ===========   |   | ===========  |  |                                   

Notes payable are substantially to members of ECCU.



The following are maturities of notes payable for each of the next five years:

|Year Ending December 31, |   |            
|------------------------ | - | -----------
|_____________            |   |            
|2004                     | $ | 33,140,206 
|2005                     |   | 5,470,505  
|2006                     |   | 1,229,794  
|2007                     |   | 943,196    
|2008                     |   | 2,232,885  
|                         |   | ___________
|                         | $ | 43,016,580 
|                         |   | ========== 



The Class A-1 and Alpha Class Notes contain covenants pertaining to limitation on restricted payment, maintenance of a tangible net worth, limitation on issuance of additional notes and incurrence of indebtedness. All three classes require that the company maintain a minimum tangible adjusted net worth, as defined in the Loan and Standby Trust Agreement, of not less than $2,000,000. The Company is not allowed to issue any Class A-1 and Alpha Class Notes if, after giving effect to such issuance, the Class A-1 and Alpha Class Notes then outstanding would have an aggregate unpaid balance exceeding $10,000,000 and $20,000,000, respectively. The Company's other indebtedness, as defined in the Loan and Standby Agreement, is not to exceed $500,000 outstanding at any time while any Class A Note is outstanding and $750,000 outstanding at any time while any Class A-1 or Alpha Class Note is outstanding. The Company was in compliance with these covenants as of December 31, 2003.



NOTE 6 - PUBLIC OFFERING

The Company filed a registration statement with the U.S. Securities and Exchange Commission (SEC) and received approval in October 1996 to offer $5,000,000 of Class A unsecured promissory notes to the public. Class A Notes totaling $-0- and $163,743 were outstanding at December 31, 2003 and 2002, respectively.

In December 1997, the Company received approval from the SEC to offer $25,000,000 of Class A-1 unsecured promissory notes nationwide. In December 1997, the Company registered $15,000,000 of the Class A-1 Notes. By November 29, 1999, $12,064,110 of the $15,000,000 had been sold. The Company deregistered the remaining $2,935,890 on November 29, 1999. On November 30, 1999, the Company registered another $12,500,000 of the Class A-1 Notes. Class A-1 Notes totaling $1,244,139 and $2,278,827 were outstanding at December 31, 2003 and 2002, respectively.

In July 2001, the Company received approval from the SEC to offer $50,000,000 of Alpha Class unsecured promissory notes nationwide. In July 2001, the Company registered $25,000,000 of the Alpha Class Notes. Alpha Class Notes totaling $17,736,292 and $13,994,106 were outstanding at December 31, 2003 and 2002, respectively.



NOTE 7 - PREFERRED STOCK

The Company has 200 shares of Series A, non-voting, non-transferrable cumulative preferred stock outstanding. The number of shares in the Series A Preferred Shares is 5,000. The liquidation preference of the Series A Preferred Stock is $1,000 per share. Each share is entitled to receive a quarterly cash dividend equal to a percentage of the liquidation preference which percentage equals the greater of 150 basis points higher than the London Bank Inter-Bank Offer Rate (LIBOR) for six months in effect on the last day of the calendar quarter for which the dividend is to be declared or 5% per annum. Under a redemption provision, the Company, at its sole election, at any time after December 31, 2006, may redeem any shares of Series A Preferred Stock for cash, in whole or in part, for an amount equal to the liquidation preference of each share of Series A Preferred Stock redeemed, plus any accrued and unpaid dividends on such shares, whether or not declared.



NOTE 8 - INCOME TAXES

Federal income and state franchise taxes for the years ended December 31, 2003 and 2002 are as follows:

|                      |   | 2003      |   | 2002     
|--------------------- | - | --------- | - | ---------
|                      |   | _________ |   | _________
|Federal income taxes  | $ | 85,693    | $ | 77,063   
|State franchise taxes |   | 31.303    |   | 27,404   
|                      |   | _________ |   | _________
|Tax expense           | $ | 116,996   | $ | 104,467  
|                      |   | ========  |   | ======== 

NOTE 9 - CONCENTRATION OF CREDIT RISK

At December 31, 2003 and 2002, the Company had cash and certificates of deposit at its parent that are not insured. The aggregate uninsured amount was $1,462,799 and $194,825, respectively.



NOTE 10 - FAIR VALUE OF FINANCIAL INSTRUMENTS



Statement of Financial Accounting Standards No. 107, Disclosures about Fair Value of Financial Instruments, requires disclosure of fair value information about financial instruments, whether or not recognized in the statement of financial condition. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instruments. Statement No. 107 excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the company.



The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate fair value:



Cash and Cash Equivalents: The carrying amount is a reasonable estimate of fair value.

Notes and Loans Receivable: Fair value is estimated by discounting the future cash flows using the current average rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.

Notes Payable: The fair value of fixed maturity notes is estimated by discounting the future cash flows using the rates currently offered for notes payable of similar remaining maturities.

|                                                       |   | Carrying Amount |  |   | Fair Value
|------------------------------------------------------ | - | --------------- |  | - | ----------
|                                                       |   | __________      |  |   | __________
|Financial assets:                                      |   |                 |  |   |           
|Cash and cash equivalents                              | $ | 1,462,799       |  | $ | 1,462,799 
|Notes and loan receivable,
net of allowance for losses |   | 43,216,768      |  |   | 45,040,000
|Financial liabilities:                                 |   |                 |  |   |           
|Notes payable                                          |   | 43,016,580      |  |   | 43,328,000



NOTE 11 - PENSION PLAN

Employees of the company participate in ECCU's defined benefit contribution pension plan that includes two components: a 401(k) plan and a profit-sharing plan.

401(k):

Employees are eligible upon hire date, no minimum service is required and the minimum age is twenty-one. Each employee may elect voluntary contributions not to exceed 15% of salary. The plan has a matching program, the percent of which is annually determined by the board of directors. Contributions for the plan years ended December 31, 2003 and 2002 were $7,021 and $5,577, respectively.

Profit-sharing:

The profit-sharing plan is for all employees who, at the end of the calendar year, are at least twenty-one years old, still employed, and have at least 1,000 hours of service during the latest accrual period. The amount annually contributed on behalf of each qualified employee is determined by the board of directors, and is calculated as a percentage of the eligible employee's annual earnings. Plan forfeitures are used to reduce the credit union's annual contribution. Contributions for the plan year ended December 31, 2003 and 2002 were $5,837 and $5,007, respectively.