FINAL VERSION - VCC 2014 AR

2 0 1 4 A N N U A L R E P O R T

Helping Virginia Communities Thrive

Vision: To be the first choice for innovative capital and collaborative leadership promoting vibrant local

communities and enhanced quality of life.

2014 Over $46 million in loan deployments

Average $50-55 million per year in loan deployments

$259 MillionLoans Originated

$407 MillionLeveraged Funds

$666 MillionTotal Project Impact

$67 MillionTotal Deposits

4,987Affordable Housing

Units Financed

3,367Jobs Created or Retained

6,600,731Square Feet Real Estate

Development

Over 10,000 HoursAdvisory Services

Provided

$152005

$172006

$292007

$342008

$452009

$712010

$862011

$862012

$1022013

$1212014TOTAL ASSETS

(in millions)

VCC’s assets have steadily grown since the original seed

investment of $15 million.

VCC 2014 Annual Report • 1

Letter from the President & Chairman

VCC experienced a year filled with growth in 2014 and is fortunate to continue flourishing. The CDFI banking industry is also growing, as

demand for innovative capital and advisory services in underserved communities steadily increases. In 2014, the CDFI Fund certified 47 new CDFI banks, the most ever in a given year. The industry’s sustainability is reflected by a 33% increase in assets last year to $34.3 billion as of December 2014 and total net assets of $3.6 billion, an increase of 41% since December 2013.*

Growth fosters the propensity to help more people and more communities. Nationally, small business own-ers’ report lack of access to capital is their most difficult challenge, limiting their growth and job creation. VCC’s small business support grew from $6.5 million in 2013 to $15.5 million in 2014. With this additional capital, 1,409 jobs were created and retained in Virginia.

Virginia residents need access to affordable, nutritious foods. Virginians’ low food access rate is 17.8%, with over 1.4 million residents in food deserts. This is alarming since it is substantially higher than the national rate of 7.3%. VCC’s $10 million Virginia Fresh Food Loan Fund facilitates the growth of healthy food enterprises in Virginia communities. Due to this industry’s unmet capital needs, we expect to help more residents gain food access.

VCC remains focused on mission investing, a concept growing nationally. Global impact investing grew $12.7 billion last year, up 20% from the previous year.* Mission investing provides investors a double bottom return (economic and social). Our Local Impact Opportunity Notes gained traction, with $1 million invested. We expect more institutions, foundations, and individuals who care about “place” will engage in local impact investing in 2015.

Jane N. HendersonPresident & CEO

Dixon B. HannaChairman of the Board

VCC aspires to move from a double bottom return toward a triple bottom return by exploring multi-family energy efficiency lending. Future VCC markets include growing social enterprises and small business mezza-nine financing. A global movement for a new financial system is underway, providing economic, social, and environmental benefits. VCC is leading the way in Virginia.

VCC will celebrate its tenth year in 2016. We are poised to help more people and more communities in the next decade. It would not be possible without you, our partners, and we appreciate all you do. Let’s do more, together.

“ We are poised to help more people and more communities in the next decade. It would not be possible without you, our partners…”

*Sources:

CDBA’s “Peer Analysis”, 2013 and 2014

Global Impact Investing Network’s March 2015 “ImpactBase Snapshot—An Analysis of 300+ Impact Investing Funds”

2 • VCC 2014 Annual Report

“ [VCC] had the right combination of expertise and innovative financing essential to helping the Sappony Tribe grow economically and create jobs.” — Sherry Munford, Secretary, High Plains Construction, Inc.

High Plains Construction, Inc.: Jonathan Mills, Sherry Munford, Dante Desiderio


Lofts at Canal Walk: High Plains Construction’s work

The Sappony, an American Indian tribe, is one of only five recognized tribes in Virginia and is located in Virginia and North Carolina. The Sappony tribal center based in Virgilina, Virginia, is dedicated to helping grow the Sappony economy.

They decided to purchase an existing business that was a sole-proprietorship founded 25 years ago in Chesterfield, Virginia, which specialized in finish carpentry—installing windows, doors, trim, stairs, and cabinets. The new company is High Plains Construction, Inc.

Dante Desiderio, member of the Sappony, knew of VCC’s mission to help meet the needs of non-traditional borrowers. VCC provided the innovative financing— acquisition funding and working capital—and the advice they needed to be successful in this endeavor.

The existing construction business had a single owner and five sub-contractors. Since the Sappony’s involvement, they have expanded to five employees and 21 subcontractors. VCC is delighted to help the Sappony grow and create jobs, especially since this tribe represents a historically underserved population in Virginia.

Jonathan Mills, member of the Sappony and Director of Operations for High Plains Construction, did contract work for the existing company for ten years. Sherry Munford, member of the Sappony and High Plains Construction employee, is a new addition to the team. With VCC’s financing help, they expect to expand capacity in other Virginia markets and North Carolina.

Sherry Munford stated, “VCC was awesome to work with. They had the right combination of exper-tise and innovative financing essential to helping the Sappony Tribe grow economically and create jobs.” Ms. Munford highly recommends VCC to other small businesses needing creative and innovative capital.

Tribally-owned Company Creating Jobs


The Hampton-Newport News Community Services Board (HNNCSB) is one of the largest providers of community-based behavioral health services for people with serious behavioral and developmental disabilities and substance use disorders in

Virginia. HNNCSB, through one of its affiliated non-profits, sought sufficient funding to rehabilitate and refinance an aging and run-down Newport News, Virginia apart-ment complex for people with disabilities. The income level for most of the residents is 12–14% of Area Median Income. Many living there had been homeless in addition to living with physical and/or behavioral disabilities.

VCC provided HNNCSB innovative financing and advice, including a revolving construction loan. The complex also secured permanent financing through VHDA Low-Income Housing Tax Credits with Virginia Community Development Corporation syndication, as well as funding from the Department of Housing and Community Development, Virginia Housing Development Authority SPARC, and Newport News Redevelopment and Housing Authority.

Through VCC’s help, a comprehensive renovation is underway to make the apart-ments more handicap-accessible for residents, energy efficient, attractive, and provide

on-site amenities. There will be three new apartments and a new community building will offer a computer lab, covered outdoor patio area, kitchen, meeting area, property management offices, and laundry facilities. This renovation will help create an overall sense of community for residents by giving the entire complex a more attrac-tive appearance and by providing a place where the residents can visit with one another and have recreational and informative meetings.

Joy Cipriano, Director of Property and Resource Development for the HNNCSB, stated that “VCC’s mission aligns well with our mission, and my overall experience with VCC has been wonderful. This important project will enhance the lives of many low-income Virginians living with disabilities and may even serve as a model for similar refinancing and rehab projects.”

Creating a Sense of Community

“ Before” photo of New Phoenix Village


“ VCC’s mission aligns well with our mission…and this important project will enhance the lives of many low-income Virginians living with disabilities.” — Joy Cipriano, Director, Hampton-Newport News Community Services Board

HNNCSB: Sue Armstrong, Andrea Diggs, Dottie Holmes, Joy Cipriano; Community Housing Partners (contractor): Craig Gooch


“ [VCC offered] valuable insights which helped us achieve our goals to provide expanded access to health care.”

— Kay Crane, Executive Director, PATHS

PATHS: Dr. Drew Baker, Kay Crane, Jim Daniels


Piedmont Access to Health Services (PATHS) is a nonprofit community health center based in Danville with locations in Chatham, Martinsville, and Boydton which offers primary care services including pediatrics. PATHS’ vision is to be a catalyst

for change, making a healthy life possible for everyone. The center serves all patients regardless of their ability to pay and 40% of their patients are uninsured.

PATHS decided to expand health care for residents in Danville. With a grant of over $2 million for this expansion, the center fell short of the budget needed and sought VCC’s help with innovative financing and collaborative leadership, including a gap construction loan, mortgage refinancing, and working capital line.

The rise and fall of Dan River Inc., a textile company in Danville, hurt the area’s economy, leaving many without jobs. With VCC’s help, the expansion will be adding six employees. PATHS will establish pediatric behavioral health services and grow its pediatrics, pharmacy, and OB/GYN. With a child-friendly look, the new space has sick and well waiting rooms for families. The new services will help diagnose children with Attention Deficit Hyperactivity Disorder and autism early.

Kay Crane, PATHS’ Executive Director, said, “I really enjoyed working with VCC—they made it so easy for us, the process was effortless. I especially liked that VCC understood our mission and that we are here to serve community residents who have traditionally been underserved. This enabled them to offer valuable insights which helped us achieve our goals to provide expanded access to health care.”

When asked how she would rate her experience with VCC, Kay Crane stated, “On a scale of 1 to 10, I would rate them above 10 and would absolutely recommend VCC to others seeking innovative capital.”

Expanding Access to Health Care

Dr. Drew Baker holding pediatrics patient


Impact investing is a concept that is taking hold nationally, linking investors with a double bottom return (financial and social). In 2013, VCC rolled out a new investment product, Local Impact Opportunity Notes (LION), offering accredited socially conscious

investors a small financial return and a local social return by funding projects impacting Virginia communities. Investors have the opportunity to do more than traditional philanthropy—to contribute to enhancing Virginians’ lives by allocating their dollars to regions they care about most. Projects may include creating affordable housing, renovating a blighted building for mixed use or helping a small business create jobs.

Why make a social investment in VCC?

It’s simple—to create healthy, vibrant Virginia communities. When asked why he invests in VCC, Jeff Ukrop said, “VCC provides financing that probably wasn’t available to my grandparents (or other small business owners) when they started Ukrop’s Super Markets. So, my investment is supporting small business financing that helps fuel community revitalization.”

Susan Brock Wilkes, Ph.D., Owner of Wilkes Consulting, added, “I had heard of VCC’s reputation for some time and like their work in community development and investing in communities. I support nonprofits through traditional means—philanthropy and volunteering— and saw this as a very unique opportunity to invest vs. just give. The

social benefit is very important to me, so my investment is really congruent with my values. I am impressed that a Richmond company is on the forefront of something so innovative and progressive.”

Another impact investor, Marc McGahee, mentioned, “The LION note concept is very innovative and offers a significant opportunity to make a huge difference in Virginians’ lives by creating jobs, providing affordable housing, health care, and more. It is exciting to be a part of this new type of philanthropy.”

Impact Investors Making a Difference


“ …my investment is really congruent with my values. I am impressed that a Richmond company is on the forefront of something so innovative…”

—Susan Brock Wilkes, Ph.D.

Mission Investors: Marc McGahee, Susan Brock Wilkes, Jeff Ukrop

Planting Seeds to Enhance Quality of Life Across Virginia


CentralEasternRichmondSouthwest

NorthernHampton RoadsSouthsideValley

VCC Loan Originationsas of December 31, 2014

= Affordable Housing = Economic Development

VCC & Community Capital Bank of Virginia Offices

VCC Office

Virginia Regions*

* Weldon Cooper Center for Public Service

Planting Seeds to Enhance Quality of Life Across Virginia



Condensed Consolidated Balance Sheets December 31 2014 2013ASSETSCash & cash equivalents $ 5,895,313 $ 6,300,436Investments 17,499,705 17,908,938Loans, net of allowance for loan losses of $1,020,083 in 2014 and $730,874 in 2013 93,738,786 75,129,808Other assets 3,367,845 2,519,273 Total Assets $120,501,649 $101,858,455

LIABILITIES AND NET ASSETSLiabilities Deposits $ 66,592,211 $ 57,147,198Borrowings 27,361,198 20,184,998Other liabilities 1,904,848 1,000,570 Total Liabilities 95,858,257 78,332,766

Net Assets 24,643,392 23,525,689 Total Liabilities and Net Assets $120,501,649 $101,858,455

2007

$10

2008

$15

2009

$22

2010

$43

2011

$70

2012

$63

2013

$75

2014

$94

2010

$39

2011

$44

2012

$41

2013

$57

2014

$67

Total LoansIn Millions

Total DepositsIn Millions


Condensed Consolidated Statements of Operations Years Ended December 31 2014 2013INCOMEInterest income $4,905,316 $4,350,287Grant income 2,533,437 1,585,274Other income 365,330 808,348 Total Income 7,804,083 6,743,909

EXPENSEProgram services 5,179,101 4,241,193Management and general services 1,423,379 1,251,555Other expenses 91,267 52,110 Total Expense 6,693,747 5,544,858Change in Net Assets $1,110,336 $1,199,051

2007

$29

2008

$34

2009

$45

2010

$71

2011

$86

2012

$86

2013

$102

2014

$121

2007

$19

2008

$19

2009

$19

2010

$19

2011

$20

2012

$22

2013

$24

2014

$25Total Assets

In MillionsTotal Net Assets

In Millions


COMMUNITY ADVOCATE COUNCILStanding left to right:

Lisa AtkinsonDeputy Director of Community Development, Virginia Department of Housing and Community Development

Shea HollifieldRetired, State Government

Chris ThompsonDeputy Director of Housing, Virginia Department of Housing and Community Development

Penny McPhersonVP, Senior Community Development Officer, Wells Fargo

Carolyn SpohrerDeputy Director, Virginia Community Action Partnership

Kathy WheelerPresident & CEO, Community Business Partnership

Shelley MurphyDirector of Program Services,Piedmont Housing Alliance

Overton McGeheeExecutive Director, Habitat for Humanity Virginia

Marjette UpshurDirector, Office of Economic Development, City of Lynchburg

Mike HawkinsManaging Director of Community Outreach, Virginia Housing Development Authority

Kent WareProgram Director, USDA Rural Development

Todd ChristensenExecutive Director, Southwest Virginia Cultural Heritage Foundation

Steve GalyeanDirector, Partnership Marketing Development, Virginia Tourism Corporation

Ed GerardoDirector, Community & Social Investments, Bon Secours Health System, Inc.

Not pictured:

David BaldwinExecutive Director/CEO, Bristol Redevelopment and Housing Authority

Shannon BlevinsDirector of Economic Development, University of Virginia’s College at Wise Resource Center

Graham DriverDirector of New Markets Tax Credits, Virginia Community Development Corporation

Kevin KellyManaging Director, ECDC Enterprise Development Group

Jill McCormickExecutive Director, Cabell Foundation

Nancy O’BrienRetired Public Servant; Lifetime VCC Advocate

Delegate James ScottRetired, Virginia House of Delegates

Séson TaylorAssistant Vice President, Development Advisor, PNC Bank

BOARD Of DIRECTORSStanding left to right:

William SheltonDirector, Department of Housing and Community Development

Jane HendersonPresident & CEO, VCC

Kenneth DanielsProfessor of Finance, Virginia Commonwealth University School of Business

Robert Gilliam, Jr.Retired Bank President & CEO

Charlie Mills, IIICEO, Salera Employee Benefits Solutions

Seated left to right:

James Harkness, Jr.Retired Bank President & CEO

Dixon HannaRetired Associate Provost, Virginia Tech

florence KingstonDirector for Department of Development, City of Newport News

Alvin SmuzynskiRetired Executive Director, Wesley Housing Development Corporation

Michael SchewelAttorney (Partner), McGuire Woods LLP

Not pictured:

Gregory fairchildE. Thayer Bigelow Associate Professor, University of Virginia, Darden Graduate School of Business

Mary Dwyer PembrokeDirector and Senior Counsel, Government Relations, Discover

Our Teams


STAff & CONSULTANTSStanding left to right:

Ginny HodgesProgram Monitor & Analyst

Dawn DeHartSenior Loan Officer

Patricia PowersAccountant

LaTilda OwensSmall Business Consultant

Shaun RaiLoan Officer

Martha ShifflettSenior Loan Officer

Chris DimotsisLoan Officer

Ann CallLoan Support Specialist

Jeff DobsonWebsite & Data Programmer

Angela ElliottExecutive Assistant

Tammy JohnsonSenior Accountant

Wayne WaldropChief Lending Officer

Lisa CarnahanMarketing Manager

Thomas NelsonOperations / Compliance Assistant

Julia CalamitaCredit Analyst

Bob AdamsAdvisory Support Consultant

Candace BranchCredit Underwriter

Terri fawSenior Loan Closer

Jane HendersonPresident & CEO

Ed ChinChief Risk Officer

Tim MattoxWebsite & Data Manager

Jacob WillisLoan Officer

Lenore LinkousCustomer Sales & Service Representative

Neal BarberCommunity Consultant

Bill NguyenDirector of IT

Clyde CornettChief Financial Officer

Tom BridgemanDirector of Operations

Caroline NoweryCommunity Investments

Randy GonzalezPortfolio Manager

Teri LovelaceCommunity Investments & Impact Manager

Terri WrightLoan Operations Manager

Seated left to right:

Tambry HarrisConsultant

Pat KietzmanManager of Administration

Kim BurchetteHuman Resources Manager

Lorie WilliamsLoan Operations Specialist

James WallaceFresh Food Advisor

Monique JohnsonSenior Loan Officer

Maron El-KhouriCustomer Sales & Service Representative

Teresa WalkerSavings & Deposits Manager

Lisa BondLoan Closer

Not pictured:

Diana BerryPortfolio Analyst

Bill GreenleafLoan Officer

Ashley NelsonFinancial Reporting Manager

Adriana WallaceAdministrative Assistant


Partners & Investors804RVA

AERIS

Affordable Housing Trust Fund of Richmond

Altria

America Saves

American Bankers Association

American Heart Association

Annie E Casey Foundation

Appalachian Community Capital (ACC)

Appalachian Sustainable Development

Ariel Ventures LLC

Arlington Partnership for Affordable Housing

B Lab

Ball Office Products

BALLE

Balzer and Associates

Bank of America

Bank of Botetourt

Bank of Fincastle

BB&T

Better Housing Coalition

Blue Ridge Bank

Blue Ridge Health Center Inc.

Bluffwalk Center, LP

Bon Secours Health System Inc.

Bristol Redevelopment and Housing Authority

Brookhill Farm (BHF Inc.)

C&F Bank

Cabell Foundation

Calvert Foundation

Capital Area Partnership Uplifting People (CAPUP)

Capital Link

Capital One

Capital Region Food Collaborative

Cardinal Bank

Carter Bank & Trust

Center for Rural Entrepreneurship

Chain Bridge Bank

Citi Communities at Work FundTM

City of Danville Economic Development

City of Lynchburg Economic Development

City of Richmond Department of Economic & Community Development

Clinton Global Initiative

Commercial Real Estate Women (CREW)

Community Bankers Bank

Community Business Partnership

Community Development Bankers Association (CDBA)

Community Foundation of the New River Valley

Community Futures

Community Housing Partners

Community Investment Collaborative

CowanPerry

Danville Redevelopment and Housing Authority

Danville Regional Foundation

DC Central Kitchen

Discover

Domini Social Investments

ECDC Enterprise Development Group

EIW Group

Essel Propack

E*TRADE Bank

Evergreen Cooperatives

Fairfax Economic Development Authority

Fauquier Housing Authority

Federal Home Loan Bank of Atlanta

Federal Reserve Bank of Richmond

Federation of Appalachian Housing Enterprises (FAHE)

FeedMore

First Bank & Trust Company

First Capital Bank

First Citizens Bank

Floyd County Economic Development Authority

Friends of Southwest Virginia

Global Impact Investing Network (GIIN)

Global Impact Investing Rating System (GIIRS)

Goldman Sachs 10,000 Small Businesses

Goldman Sachs Foundation

Greater Richmond Chamber of Commerce

Greylock Advisory Group

H D Advisors

Habitat for Humanity Virginia

Herndon Foundation

Hometown Bank

Housing Association of Nonprofit Developers (HAND)

Housing Virginia

HSBC Bank

Impact Makers

Institute of Public Health Innovation

Jessie Ball duPont Fund

Knowledge Advisory Group

Larson Development

Launch Place

LeClair Ryan

Lighthouse Labs

Loudoun County Chamber of Commerce

Mary Morton Parsons Foundation

Mary Reynolds Babcock Foundation

McCandlish Holton Attorneys at Law

MGMiller Valuations

Mill Creek Creative LLC

Mission Investors Exchange (MIE)

Montgomery County Chamber of Commerce

My Southwest Virginia Opportunity

National Council on Agricultural Life and Labor Research (NCALL)

National Good Food Network

National Housing Trust

New Richmond Ventures

One Partner Investments LLC

Opportunity Finance Network (OFN)

Partners for the Common Good (PCG)

People Inc.

Peoples Community Bank

Piedmont Housing Alliance

PKW Enterprises, LLC

PNC Bank

Project Glade

Promontory Interfinancial Network, LLC

RAIN Source Capital

Richmond City Health District

Richmond Regional Planning District Commission

River Community Bank, NA

Roanoke Regional Chamber of Commerce

Safe Harbor Title Company

Sequestering Carbon, Accelerating Local Economies (SCALE)

Southeast Rural Community Assistance Project (SERCAP)

Southside Community Development and Housing Corporation

Southwest Virginia Cultural Heritage Foundation

Spotts Fain

Staunton Creative Community Fund

Accreditations

Memberships and Affiliations

Virginia Community Economic Network

Production CreditsDESIgN: Literati | COPyWRITINg: Lisa Carnahan | PRINCIPAL PHOTOgRAPHy: Dennis McWaters, Taylor Dabney | PRINTINg: Worth Higgins and Associates

Strategic Risk Associates

Surdna Foundation

The Alleghany Foundation

The Clay Christensen Group

The Community Foundation

The Democracy Collaborative

The Food Trust

The Lenders Coalition for Community Health Centers (LCCHC)

The Reinvestment Fund (TRF)

TMI Consulting Inc.

Town of Glade Spring

Town of Onancock

Troutman Sanders LLP

Union Bank & Trust

Urban Land Institute (ULI)

US Department of Agriculture

US Department of Housing and Urban Development

US Department of Treasury

US Small Business Administration

USDA – Rural Development

Virginia Asian American Store Owners Association

Virginia Asian Chamber of Commerce

Virginia Association of Community Banks (VACB)

Virginia Bankers Association

Virginia Business Incubator Association

Virginia Commonwealth University Center for Urban & Regional Analysis

Virginia Commonwealth University Medical Center

Virginia Community Action Partnership

Virginia Community Development Corp. (VCDC)

Virginia Community Economic Network (VCEN)

Virginia Community Healthcare Association

Virginia Cooperative Extension

Virginia Department of Agriculture and Consumer Services

Virginia Department of Business Assistance

Virginia Department of Health

Virginia Department of Housing and Community Development (DHCD)

Virginia Downtown Development Association (VDDA)

Virginia Food System Council

Virginia Foundation for Agriculture Innovation and Rural Sustainability

Virginia Housing Coalition

Virginia Housing Development Authority (VHDA)

Virginia Main Street (VMS)

Virginia Small Business Development Center

Virginia Small Business Financing Authority

Virginia Tourism Corporation

Wall Residences

Waukeshaw Development Inc.

Weldon Cooper Center for Public Service

Wells Fargo

Williams Mullen

Woodforest National Bank

Woori America

Partners & Investors continued

930 Cambria Street, N.E.Christiansburg, VA 24073Phone: (540) 260 -3126 Fax: (540) 260 -3164

100 West Franklin StreetSuite 200

Richmond, VA 23220Phone: (804) 344 -5484 Fax: (804) 344 -5451

vacommunitycapital.org

Let’s do more,together!

7001 Loisdale RoadSpringfield, VA 22150

Phone: (703) 778-9920

Mission: To support housing and community development ventures, increase jobs, and build sustainable communities by offering flexible financial products and advisory services.

Documents

FINAL VERSION - VCC 2014 AR