CEO Letter to Shareholders

Dear Shareholders and Friends:

It’s hard to believe that in 2021 we celebrated our 25-YEAR ANNIVERSARY as a CDFI making impactful, life changing, community development loans. Our employees have truly accomplished remarkable milestones as we “moved forward” from a start-up lending experiment to a sustainable financial institution. Here are a few of my favorite accomplishments over the past quarter century:

  • Over 2,546 loans originated totaling over $2.1 billion
  • Over $600 million in New Markets Tax Credits deployed
  • 1000 single family loans to first-time home buyers totaling $250 million
  • 22 consecutive years of profitability
  • Over $50 million in cumulative retained earnings
  • Awarded “Best of the World” B Corporation for the past four consecutive award years

This past year required us to manage through ongoing worldwide health issues, address new workplace norms, tackle communication challenges, and navigate unsettling economic and global political conflicts. Clearinghouse CDFI responded to these challenges. We helped thousands of low-and-moderate-income families with core loans for housing, services, and other community and economic development needs. Additionally, we achieved record levels for loan performance, revenue, and profit.

Perhaps our most significant accomplishment in 2021 was the first closing of FVLCRUM Fund LP. This $250 million endeavor addresses the minority wealth gap in United States through equity investments in successful minority-owned mid-market companies. Five Clearinghouse CDFI shareholders were part of the $104 million December closing. Noteworthy was our successful effort to obtain OCC approval of the fund as a “qualified CRA investment”. This new off-balance sheet fund is transformative as a vehicle for wealth creation while providing strong investment returns.

Our expansion into Texas was a central focus in 2021. Clearinghouse CDFI opened two new offices, in Dallas and Austin, to provide direct loan services for this region. Our outstanding Texas employees are making new contacts with banks and community groups, providing a hands-on customer service experience that is integral to our corporate culture. One of the Texas loans that funded in 2021 will provide homeless individuals with shelter and supportive services to restore dignity and improve their lives.

We continued helping small businesses in 2021 by providing additional Paycheck Protection Program (PPP) loans. Over the past two years we directly assisted 488 small businesses with $22 million in PPP funding, saving 2,389 jobs. Our average loan size, at $46,000, was less than half the national average. This remarkable statistic re-confirms an adherence to one of our founding principles: “addressing unmet credit needs”.

2021 financial performance included a record pre-tax profit of over $14 million. This number, while outstanding, is somewhat skewed by some atypical events last year. A combination of reducing the loan loss reserves established during the onset of the pandemic in 2020 and high loan payoffs resulted in greater income recognition. Likewise, our annual asset growth was lower than projected due to the record level of loan payoffs. Borrower performance remained extremely strong (< 1% non-performing loans) indicative of the outstanding work of our underwriting and loan servicing teams.

On a daily basis, our dedicated staff strives to meet our mission and exceed expectations—with a strong and resolute focus on the future. Thank you to our shareholders, borrowers, employees, and friends! Because of your strong support and assistance, Clearinghouse CDFI is moving FORWARD.

Sincerely,

Doug Bystry
Douglas J. Bystry
President / CEO