Responsive Innovative Lending CONTACT US CRA Complex 801 ... · [email protected] 801-503-0547...

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ROCKY MOUNTAIN COMMUNITY REINVESTMENT CORPORATION

2019 ANNUAL REPORTResponsive • Innovative • Proficient

64 E. Winchester Street, Suite 230 • Salt Lake City, UT 84107 Phone: 801-366-0400 • www.rmcrc.org

CONTACT USSteven Nielsen, [email protected]

801-833-0008Cell: 801-201-7069

David Watkins, [email protected]

801-503-0547Cell: 435-655-1660

Nicholas Berger, [email protected]

801-833-0009Cell: 801-641-3156

Natasha Pfeiffer, [email protected]

801-335-5401Cell: 801-865-7222


Celebrating 20 Years!

Our MembersOur Members

Thank youfor your support and membership,

Investors and Lenders

At RMCRC’s September 2019 annual member meeting, 28 member banks renewed their membership and two banks joined. We would like to wel-come Continental Bank and Brighton Bank to RMCRC!

As a result, today’s total com-mitment line of credit from the member banks is $286 million. We appreciate the ongoing confidence from our member banks and their partnership in allocating these funds to serve those providing affordable housing in our communities!

I don’t think the government can

solve this problem, but I do think

government could be a huge

catalyst in helping solve the

problem, in partnership with

good developers and lending

institutions.”

“

Jacob L. AndereggUtah State Senator

Message from the President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Message from the Board Chair . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

The Problem / The Solution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-8

The People We Serve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Our Portfolio — AMI-Served Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Our Lending Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Responsive and Proficient . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Innovative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Community Outreach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Community Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Our Loan Products — LIHTC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Non-LIHTC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Loans Funded in 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18-29

Board, Committees & Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30-31

Independent Auditor’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32-50

Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51-52

Contents

Influential collaborator in the affordablehousing communityProvider of CRA service opportunitiesfor member banksProperty locations in over 50 cities,serving eight states in the RockyMountain area

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Formed by local banks in 1999 as a 501(c)(3) nonprofit organizationCurrent portfolio — $145 million; forward commitments — $80 millionAffordable units funded — 7,500+Average AMI served — 45%Member of NAAHL, UBA, NLIHC,UHC, NAHRO, UNA, UAFS, NAIB

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About Us

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Working closely with our community part-ners, RMCRC seeks to eradicate the severe shortage of affordable housing that exists

throughout the Rocky Mountain region.

Vision

MissionMission

Through sustainable direct lending, technical assistance and community collaboration,

Rocky Mountain Community Reinvestment Corporation (RMCRC) will facilitate the devel-

opment and preservation of safe and clean affordable housing and community facilities

that serve low- to moderate-income individu-als, families and underserved communities

throughout the Rocky Mountain region.

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As a result of a strong foundation built over the past

three years, dedicated employees and the invalu-

able support from Member Banks, 2018 has been an

outstanding year for Rocky Mountain Community

Reinvestment Corporation (RMCRC).

Twenty-eight projects, comprising over 1,500

affordable units, received commitments totaling

just over $72 million that when combined with

other debt and equity provided $332 million to

affordable housing projects. Many have asked why

we have enjoyed so much success. Clearly, expand-

ing our geographic reach to the eight states of the

Rocky Mountain region has increased opportunities.

However, RMCRC has positioned itself as the

premiere affordable housing lender with excellent

people, polices and processes that allow us to

respond decisively, yet responsibly, in a timely

manner, to requests for financing.

Through careful management of our financial

resources and closing, servicing, accounting and

community development, we continue covering our

operating costs.

Finally, in addition to the expanding financial

contribution, RMCRC continues to increase our

influence throughout the affordable housing

community. We sponsored or participated in more

affordable housing–oriented conferences than in

previous years. Locally, we served on the board of 4

Steven NielsenCEO & President

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Message from the President

— Steven Nielsen

the Utah Housing Coalition and participated in the

Salt Lake Chamber’s Housing Gap Coalition. We

hosted our second annual celebration, in which

over 100 individuals participated, including mem-

bers of the Utah Senate. Nationally, we continue to

support the National Association of Affordable

Housing Lenders (NAAHL) as a sustaining member

and board member. And, in support of our banking

partners, we submitted a comment to the OCC’s

proposed rule regarding reforming the CRA.

We are excited about the past and with your much

appreciated support, look forward to increasingly

successful years ahead.

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RMCRC had another great year in 2018! As outlined

in the message from the president, RMCRC made

great strides on multiple fronts and has really

positioned itself as a leader in affordable housing.

Based on its experience and strong record, RMCRC is

becoming an influential thought leader in the

affordable housing industry, both locally and

nationally. As a leading CDFI, RMCRC provided an

important voice in its comment letter to the OCC in

response to an Advance Notice of Proposed

Rulemaking regarding the Community Reinvest-

ment Act (CRA), which is critically important to

RMCRC’s member banks.

Also significant is the tireless work by RMCRC

President Steve Nielsen to engage community

stakeholders in exploring and developing new ways

to finance affordable housing for low- or moderate-

income individuals without reliance on the federal

Low-Income Housing Tax Credit. This work is critical,

especially for small-population states, such as Utah,

because federal tax credits are allocated to states

based primarily on population. Watch for more to

come in this area!

It continues to be an honor to serve as board chair. I

am grateful for the volunteer service of my fellow

board members. As I stated in my previous board

chair message, my most profound thanks to the

RMCRC staff members, who continue to demonstrate

passion and dedication to RMCRC’s mission. The

need for quality affordable housing continues to

grow, and I am humbled and excited to be involved

in supporting RMCRC’s continuing great work to

address the increasing need for affordable housing.

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Message from the Board Chair

— Jan Bergeson

Jan BergesonBoard Chair, Ally Bank

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The Problem

Utah has a severe shortage of rental homes that are affordable to low-income individuals and families.

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In Utah, there are 50,000 units in which occupants

are paying more than 30% of their income for

housing

Only 11% of all the rental units in the state of Utah

are rent- and income restricted

LIHTC units are the only units being built to serve

this population, approximately 700 units per year, or

1.4% of the units needed

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RENTAL HOMES AFFORDABLE AND AVAILABLEPER 100 EXTREMELY LOW INCOME RENTER HOUSEHOLDS BY STATE

Section 8 wait list

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Nationally, individuals earning the federal minimum

wage of $7.25 per hour would have to work 110

hours per week to afford a two-bedroom unit at the

fair market rate and 90 hours a week to afford a

one-bedroom apartment

Two-bedroom rents increased by 8%, while renters’

income statewide increased by only 1%• • Community

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2019 UTAH AFFORDABLE HOUSING FACT SHEET

NEW CONSTRUCTION COSTS BREAKOUT OF RESTRICTED UNITS STATE vs. FEDERAL SUPPORT UTAH HOME PRICE TARGET-AMI

AMI LEVELS HOMELESS & RENT-BURDENED UTAH INCOME-RESTRICTED UNITS INCOME-RESTRICTED UNITS NEEDED

Pie chart showing income from various sources is in this cell.

Extreme Low: < 30%

Very Low: < 50%

Low: < 80%

75%

9%7%

5%4%

LIHTC Section 8Public Housing USDAHome Funds

95%FEDERAL

5%UTAH

FEDERAL UTAH

50% AMI: $150,000

60% AMI: $195,000

70% AMI: $235,000

2,876HOMELESS

INDIVIDUALS

241,914 UNRESTRICTED RENTAL UNITS

29,667RESTRICTED

UNITS83,583UNITS

NEEDED

29,667RESTRICTED

UNITS

53,916RENT

BURDENED HOUSEHOLDS

TINY HOMES: $95,000

REHAB: $135,000

LIHTC: $230,000

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INCREASE CAPITAL INVESTMENTS & RENTAL ASSISTANCE PROGRAMS Community Community

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The Solution

What is A�ordable Housing?The government

says housing is“a�ordable” if a

family spendsno more than

30% of theirincome to live

there.

We're creating more families every year

for the last three or four years than

we're creating housing stock. The

solutions to the problem will involve a

multifaceted approach that includes

public and private collaboration.”

“

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Joel BriscoeUtah House Representative

* Figures based off Salt Lake Countyarea median income

EXTREMELY LOW-INCOME INDIVIDUAL* $18,570 or less per year

for an individual * Affordable rent up to

$416 per month

EXTREMELY LOW-INCOME FAMILIES$23,880 or less per yearfor a family of three *

Affordable rent up to$535 per month

VERY LOW-INCOME INDIVIDUAL$30,950 or less per year

for an individual * Affordable rent up to

$725 per month

VERY LOW-INCOME FAMILIES$39,800 or less per yearfor a family of three *

Affordable rent up to$933 per month

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The People We Serve


12%

13%

70%

5%

Market rate$25.1 million

Low: 51-80% AMI$27.1 million

Very low: 31-50% AMI$146.4 million

Extremely low: 30%AMI$10.4 million

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AMI-Served Analysis — Loans Funded & Committed

Because of the shortage of affordable homes,

many lower-income households spend more

on housing than they can afford and must

sacrifice other necessities.

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Our Portfolio — AMI-Served Analysis


2018 Loan Commitments

State Amount NumberUtah

New MexicoArizona

WyomingColorado

IdahoNevada

Grand Total

$43,117,020$10,600,000$8,464,500$4,176,000$2,845,462$2,680,000$230,000

$72,112,982

1444212128

Funded and Committed Loans by State as of December 31, 2018

Arizona1,144 units

$21,110,57116 loans

Colorado123 units

$6,895,4622 loans

Idaho330 units

$9,520,5447 loans

Nevada255 units

$4,539,6254 loans

Utah4,969 units

$164,625,39384 loans

Wyoming309 units

$9,783,9776 loans

New Mexico296 units

$10,050,0004 loans

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+ + RMCRC has

7,426 units=

TOTAL$226,525,572

123 loans

Member Banks’ Aggregate Line of Credit . . . $286,750,000

Outstanding Portfolio Balance . . . . . . . . . . . . . $151,764,360

2018 Originated Commitments . . . . . . . . . . . . . . $72,112,982

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Our Lending Activity


RMCRC loan programs meet a wide spectrum of financing needs, such as:

Combined 4%, 9%, NMTC, condominium and land lease

transactions

Hospice shelter for the homeless

Ten-story Section 8 substantial renovation while keeping

tenants in place

RDA substantial renovation while keeping tenants in place

Mobile home park preservation, protecting vulnerable

low-income mobile home owners

Preservation of naturally occurring affordable housing (NOAH)

properties with no public subsidies or funding

Homeless shelter for youth under age 18

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RMCRC has the expertise to provide financing in eight different states with disparate markets. RMCRC serves the largest metro areas (Phoenix, Denver) as well as some of the smallest rural com-munities (Cody, Nogales).

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RMCRC advocates for and supports the affordable housing cause in many ways:

Created a database of every restricted property in Utah to

educate local municipalities and to help preserve existing

supply

Currently reaching out to local governments with affordable

housing data specific to their cities to find solutions and

suggest actions

RMCRC serves on the state legislative advisory committee and

is helping to educate legislators and draft innovative afford-

able housing legislation

Created operating expense database from over 100 properties

to improve underwriting accuracy. Provides this data to

appraisers for more accurate valuations

Collaborating with local housing authorities to increase deed-

restricted affordable housing

Developing a “tiny home” initiative to locate homes on unused

parcels of city-held land

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RMCRC participates in community outreach in

numerous capacities:

Attended the Utah Coalition Housing Day on the

Hill as well as the Utah Nonprofit Day on the Hill

Supported SB0034S01 Affordable Housing Modifi-

cations, Senator Anderegg. This bill modifies

provisions related to a municipality’s and a county’s

general plan related to moderate-income housing

and adds an appropriation to OWHLF

Supported HB386 Economic Development and

Affordable Homes Amendments, Representative

Briscoe. This bill amends provisions in Title 17C,

Limited Purpose Local Government Entities -

Community Reinvestment Agency Act

Provided data to show how the funds from S.B.34

would be best used

Board member of NAAHL, the National Association

of Affordable Housing Lenders

Board member of the Utah Housing Coalition

Met with municipalities to discuss their needs and

to assist them with their obligations in relation to

S.B.34

Entered into a memorandum of understanding

with the Utah League of Cities and Towns to

coordinate education efforts with local municipal

leaders

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Community Outreach

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RMCRC — Utah Preservation Proposal

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2019

UTAH LEAGUE OF CITIES AND TOWNS

GENERAL LEGISLATIVE SESSION

Emily S. NiehausMayor of Moab


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Community Service

Utah Food Bank — Mobile Food Pantry

Underserved families and individuals are found in all our communities. One

of the ways RMCRC has chosen to give back to our community is through

volunteering with the Utah Food Bank’s Mobile School Pantry program. Since

2018, each month during the school year, RMCRC employees have provided

assistance distributing food to the students and families of Magna Elemen-

tary School. Food is provided to 75 – 100 families each month. Recognizing

the tremendous need that exists in the community, RMCRC staff also donated

a number of winter coats, boots and financial contributions to the students at

Magna Elementary last winter. Below are some of the thank-you cards we

received.

RMCRC attended and judged the Youthlinc Young Humanitarian Award

celebration, which recognizes outstanding humanitarian service among Utah

youth, sponsored in its thirteenth year by the George S. & Dolores Dore´

Eccles Foundation.

RMCRC also participated in the fourth annual INN Between golf tournament

in August of 2018.

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Eligible Loans

The LIHTC loan program offers permanent financ-

ing for five or more unit multifamily real estate

projects that have been newly constructed,

acquired, refinanced, recently rehabilitated or are

seeking rehabilitation.

Funding Process

For new construction and substantial rehabilitation,

RMCRC will provide a forward commitment up to

30 months. Upon stabilization and completion,

RMCRC will fund and assume a first lien position.

Term & Amortization

The standard loan term is 16 years, with up to a

40-year amortization available. Economic life, as

determined by an RMCRC-approved third-party

report, must exceed amortization by five years.

Note Rate

The interest rate is fixed at a spread over compa-

rable term Constant Maturity Treasury rates.


a progressive forward lock margin is added to the

interest rate. The forward lock margin may be

adjusted downward based on the time needed to

close.

Loan Underwriting

Loan amounts will be sized to meet a debt coverage

ratio (DCR) of 1.2:1 on RMCRC debt and 1.5:1 on all

hard debt.

Prepayment

Yield maintenance. No prepayment premium will be

required for prepayment occurring within six

months of the scheduled loan maturity. In addition

to scheduled principal payments, borrower may pay

5% (noncumulative) of the original loan balance

annually.

Fee Estimate

Origination fee of 1.0–1.5%, dependent on loan size.

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Our Loan Products — LIHTC

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Natasha PfeifferLoan Officer

Nicholas BergerVP Chief Lending Officer

Eligible Loans

The non-LIHTC loan program offers permanent

financing for five or more unit multifamily real

estate projects that have been recently rehabili-

tated, acquired, refinanced, constructed or are

seeking rehabilitation.

Affordability Requirements

RMCRC affordability restriction is required for the

duration of the loan. A majority of the units (51% or

more) in the project must be restricted to house-

holds with incomes less than 80% of the area

median income (AMI) and at rental rates that do

not exceed those that are affordable to a house-

hold earning less than 80% AMI as determined by

the U.S. Department of Housing and Urban Devel-

opment.

Funding Process


RMCRC will provide a forward commitment up to

30 months. RMCRC will fund and assume a first lien

position upon completion and stabilization.

Term & Amortization

Loan maturity is up to 10 years, with up to a 40-year

amortization available. Economic life, as deter-

mined by an RMCRC-approved third-party report,

must exceed amortization by five years.

Note Rate

The interest rate is fixed to maturity at a spread over

comparable term Constant Maturity Treasury rates.


a progressive forward lock margin is added to the

interest rate. The forward lock margin may be

adjusted downward based on the time needed to

close.

Loan Underwriting

Loan amounts will be sized to meet a debt coverage

ratio (DCR) of 1.2:1 on RMCRC debt and 1.5:1 on all

hard debt. RMCRC debt must not exceed a loan-to-

value ratio of 80%, with no loan-to-value limit on all

debt.

Prepayment

Five-year lockout. No prepayment premium will be

required after five years. In addition to scheduled

principal payments, borrower may pay 5%

(noncumulative) of the original loan balance

annually.

Fee Estimate

Origination fee of 1.0–1.5%, dependent on loan size.

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Non-LIHTC


RMCRC provided $5,400,000 term financing for the Station at Midvale apartments, located in Midvale, Utah. The Station at Midvale is a one-building 102-unit multifamily property containing 48 one-bedroom units, 24 two-bedroom units, 20 three-bedroom units and 10 four-bedroom units. Seventy-eight units are restricted under Section 42 LIHTC requirements to households earning between 25-50 percent of area median income, with an average of 44.8 percent AMI.

The project includes amenities such as clubroom with kitchen, fitness center, playground, business center, bike rack and dog park.

Partners involved in the Station at Midvale include the following:

BorrowerStation at Midvale, LLC

Investor MemberAmerican Express — West Equity Fund, LP

DeveloperHorizon Development and Management, LLC

Other LendersOlene Walker Housing Loan Fund

Property ManagerHorizon Property Management

Station at Midvale Community Community

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Loans Funded in 2018

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RMCRC provided $1,200,000 term financing for Valley Meadows apartments, located in Tooele, Utah. Valley Meadows is comprised of 40 units in 10 fourplex buildings containing 32 two-bedroom units and eight three-bedroom units. One hundred percent of the 40 units are restricted under Section 42 LIHTC requirements to households earning between 36-53 percent of area median income, with an average of 49.7 percent AMI.

$400,000 of the financing was used for repairs to the project to help preserve the low-income housing in order to meet the high demand.

Partners involved in Valley Meadows include the following:

BorrowerValley Meadows, LLC

DeveloperTooele County Housing Authority


Property ManagerTooele County Housing Authority

Valley Meadows Community Community

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RMCRC provided $850,000 term financing for Sharon Gardens apartments, located in South Salt Lake, Utah. Sharon Gardens apartments is a 58-unit property, consisting of 44 one-bedroom units, 13 market units and one manager unit, serving the affordable housing needs of seniors. Fourty-four units are restricted under Section 42 LIHTC require-ments to households earning between 25-47 percent of area median income, with an average of 43.8 percent AMI.

The project includes amenities such as a business center, fitness center, on-site laundry and residents’ lounge.

Partners involved in Sharon Gardens apartments include the following:

BorrowerSharon Gardens, LLC

Investor MemberAmerican Express

DeveloperUtah Nonprofit Housing Corporation


Property ManagerUtah Nonprofit Housing Corporation

Sharon Gardens Community Community

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RMCRC provided $550,000 term financing to Cedar Bluff Apartments, located in Cody, Wyoming. Cedar Bluff Apartments is a two-building 24-unit multi-family property consisting of four one-bedroom units, 12 two-bedroom units and eight three-bedroom units. Twenty-three units are restricted under Section 42 LIHTC requirements to house-holds earning between 40-45 percent of area median income, with an average of 43.4 percent AMI.

The project includes a children’s play area and a BBQ area with picnic tables.

Partners involved in Cedar Bluff Apartments include the following:

BorrowerCedar Bluff Apartments, LP

Investor MemberAmerican Express-Utah Equity Fund II, LLLP

DeveloperSummit Housing Group, Inc.

Property ManagerHighland Property Management, Inc.

Cedar Bluff Apartments Community Community

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RMCRC provided $3,436,000 term financing for the Station at Midvale II apartments, located in Midvale, Utah. The Station at Midvale II is a one-building 84-unit multifamily property containing 39 one-bedroom units, 18 two-bedroom units, 18 three-bedroom units and nine four-bedroom units. Sixty-four units are restricted under Section 42 LIHTC requirements to households earning between 25-50 percent of area median income, with an average of 44.8 percent AMI.

The project includes amenities such as a clubroom with a kitchen, fitness center, playground, business center, bike rack and dog park.

Partners involved in the Station at Midvale II include the following:

BorrowerStation at Midvale II, LLC

Investor MemberAmerican Express West Equity Fund II, LLLP

DeveloperHorizon Development and Management, LLC


Property ManagerHorizon Property Management

Station at Midvale II Community Community

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RMCRC provided $1,148,321 term financing for

Eagle View Townhomes II, located in Richfield, Utah.

Eagle View Townhomes II has 22 townhome-style

buildings consisting of 47 two-bedroom units, with

occupancy restricted to seniors ages 55 or older.

Forty-three of the 47 units are restricted under

Section 42 LIHTC requirements to households

earning between 25-49 percent of area median

income, with an average of 44.1 percent AMI.

This project includes amenities such as a commu-

nity clubhouse with training room, laundry, medical

exam room and tot lot.

Partners involved in Eagle View Townhomes II include the following:

BorrowerEagle View Townhomes II, LLC

Investor MemberAmerican Express West Equity Fund II, LLLP

DeveloperAdams Construction and Management Company

Property ManagerAdams Management, LLC

Eagle View Townhomes II Community Community

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RMCRC provided $557,877 term financing to the Pacific Drive Apartments, located in American Fork, Utah. The Pacific Drive Apartments are a senior housing project consisting of seven fourplex buildings, featuring 26 one-bedroom units, with residents restricted to ages 62 or older. Eighteen of the 26 units are restricted under Section 42 LIHTC requirements to households earning between 25-50 percent of area median income, with an average of 43.6 percent AMI.

The project includes amenities such as a clubhouse with restroom, multipurpose room, wellness office, fitness room and computer room as well as 27 storage units for tenants’ use.

Partners involved in the Pacific Drive Apartments include the following:

BorrowerPacific Drive Apartments, LLC

Investor MemberRaymond James Housing Opportunities Fund 32, LLC

DeveloperHousing Authority of Utah County

Other LendersHousing Authority of Utah County, Olene Walker Housing Loan Fund, Provo RDA

Property ManagerHousing Authority of Utah County

Pacific Drive Apartments Community Community

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RMCRC provided $1,534,000 term financing to the Parker & Willey Apartments, located in Salt Lake City, Utah. The Parker & Willey Apartments are a scattered-site project, consisting of four buildings and 23 units. The Parker Apartments consist of two buildings with 16 two-bedroom units. The Willey Apartments consist of two buildings with seven units, featuring four two-bedroom units and three three-bedroom units. All 23 units are restricted under Section 42 LIHTC requirements to house-holds earning between 35-60 percent of area median income, with an average of 48.7 percent AMI.

The project includes amenities such as balconies and courtyard areas.

Partners involved in the Parker & Willey Apartments include the following:

BorrowerParker Willey CDC, LLC

DeveloperCommunity Development Corporation of Utah


Property ManagerEvergreene Management Group, Inc.

Parker & Willey Apartments Community Community

Lending

Responsive


Lending

Innovative Complex

Complex

Complex CRA



26

RMCRC provided $1,215,000 term financing to Brigham Place Apartments Phase II, located in Brigham City, Utah. Brigham Place Apartments Phase II has two buildings featuring 24 one-bedroom units, six two-bedroom units, 12 three-bedroom units and six four-bedroom units. Forty-two of the 48 units are restricted under Section 42 LIHTC requirements to households earning between 25-50 percent of average median income, with an average of 44.45 percent AMI.

The project includes amenities such as a tot lot, computer room, clubroom with full kitchen, bicycle rack and fitness center.

Partners involved in Brigham Place Apartments Phase II include the following:

BorrowerBPA - II, LLC

InvestorGoldman Sachs

DeveloperEV Partners II, LLC


Property ManagerEvergreene Management Group, LLC

Brigham Place Apartments Phase II Community Community

Lending

Responsive


Lending

Innovative Complex

Complex

Complex CRA


RMCRC provided $2,120,000 term financing for The

INN Between hospice, located in Salt Lake City,

Utah. The INN Between is a one-building 46-unit

project that provides short-term residency and

basic needs, such as meals, clothing, bedding,

laundry and personal hygiene items, to Utah's

homeless men and women. The INN Between also

serves as a place where the homeless can experi-

ence the end of life with dignity and receive

professional hospice services.

Partners involved in The INN Between include the following:

BorrowerThe INN Between Corporation


The INN Between Community Community

Lending

Responsive


Lending

Innovative Complex

Complex

Complex CRA

Loans Funded in 2018 — Non-LIHTC


Complex


28

RMCRC provided $140,800 term financing for Family Promise 2, located in Salt Lake City, Utah. Family Promise 2 is a three-bedroom single-family residence with 894 square feet of living space on the ground floor. Family Promise’s mission is to help homeless families achieve lasting self-sufficiency by providing shelter and services. This single-family residence allows Family Promise to provide no-cost or extremely low-cost housing for homeless families.

Family Promise 2 Community Community

Lending

Responsive


Lending

Innovative Complex

Complex

Complex CRA

Loans Funded in 2018 — Non-LIHTC


29

RMCRC provided $759,948 term financing for the rehabilitation of the Wasatch Manor property, located in Salt Lake City, Utah. Wasatch Manor is an 11-story 184-unit senior complex that consists of 88 studio units, 70 one-bedroom units and 26 two-bedroom units. One hundred eleven of the 184 units are subsidized with HAP contracts to help maintain affordability, with the remaining 73 units being unrestricted.

The project includes amenities such as a commu-nity kitchen, computer room, hair salon, movie room and small dog park.

Partners involved in Wasatch Manor include the following:

BorrowerWasatch Manor, LLC


Property ManagerDanville Development Corporation

Wasatch Manor Community Community

Lending

Responsive


Lending

Innovative Complex

Complex

Complex CRA

30

Jan Bergeson, Chair . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Scott Simmons, Vice Chair . . . . . . . . . . . . . . . . . . . . . . . .

Steven Nielsen, Chief Executive Officer . . . . . . . . . . . .

David Watkins, Treasurer . . . . . . . . . . . . . . . . . . . . . . . . .

Alan Urie, Past Chair . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Greg Rich . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Mike Palmer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

William Whetstone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rob Pedersen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Stephanie White . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Scott Simmons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Dustin Phillips . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Brian Gurney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Kirt Petersen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Sharlene Wilde . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Michael Gallegos . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Jonathan Hanks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Spencer McAllister . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Kirk Weller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Ally Bank

Marlin Business Bank

RMCRC

RMCRC

Synchrony Bank

Optum Bank

TAB Bank

American Express

Sallie Mae

USB Bank USA

Marlin Business Bank

People’s Intermountain Bank

Central Bank

Horizon Development and Management

NeighborWorks Provo

Salt Lake County Government Center

Utah Housing Corporation

BMW Bank of North America

WEX Bank

2018-19 Board of Directors

Greg Rich, Chair . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rob Pedersen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Carlo Limgenco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Alan Urie . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Ed Haidenthaller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Optum Bank

Sallie Mae

BMW Bank of North America

Synchrony Bank

Pitney Bowes Bank

2018-19 Loan Pricing Committee

Community Community

Lending

Responsive


Lending

Innovative Complex

Complex

Complex CRA

Board, Committees & Officers


Syd Peacock, Chair . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Kathy Hale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Marc Watters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Syd Peacock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Greg Rich . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tim Raccuia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Steve Scullion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Julie Buchholz . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Darren Nate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Ward Ogden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Synchrony Bank

Ally Bank

UBS Bank USA

Synchrony Bank

Optum Bank

Zions Bank

Merrick Bank

Comenity Bank

People’s Intermountain Bank

Ogden City

2018-19 Loan Committee

Laura Olsen, Chair . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Matt Nelson, Vice Chair . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cliff Pedersen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Michael Holt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rob Leonard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

LCA Bank Corporation

Bank of Utah

Medallion Bank

Brighton Bank

Prime Alliance Bank

2018-19 Audit Committee

Steven Nielsen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

David Watkins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Nick Berger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

John Montgomery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

President & CEO

Vice President & Chief Financial Officer

Vice President & Chief Lending Officer

Vice President & Chief Risk Officer

2018-19 RMCRC Officers

Community Community

Lending

Responsive


Lending

Innovative Complex

Complex

Complex CRA


31

The Board of Trustees

Rocky Mountain Community Reinvestment CorporationSalt Lake City, Utah

Report on the Financial StatementsWe have audited the accompanying financial statementsof Rocky Mountain Community Reinvestment Corporation (a nonprofit corporation) which comprise the statements of financial position as of December 31, 2018 and 2017, and the related statements of activities and cash flows for the years then ended, and the related notes to the financial statements.

Management’s Responsibilities for the Financial StatementsManagement is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance on internal control relevant to the preparation and fair presentation of financial statements that are free from material missstatement, whether due to fraud or error.

Auditor’s ResponsibilitiesOur 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 audits to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risk of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit

procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Rocky Mountain Community Reinvestment Corporation as of December 31, 2018 and 2017, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Emphasis of MatterAs discussed in Note 1 to the financial statements, Rocky Mountain Commuinty Reinvestment Corporation has adopted the provisions of Financial Accounting Standards Board Accounting Standards Update No. 2016-14, Presentation of Funancial Statements for Not-for-Profit Entities. Accordingly, the December 31, 2017 financial statements have been restated to adopt this standard. Our opinion in not modified with repect to this matter.

Salt Lake City, UtahApril 2, 2019

Community Community

Lending

Responsive


Lending

Innovative Complex

Complex

Complex CRA

Independent Auditor’s Report

32

Statement of Financial Position — Year Ended December 31, 2018 & 2017Rocky Mountain Community Reinvestment Corporation

Assets Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . Designated cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loan administration fees receivable . . . . . . . . . . . . . . . . . . . . .

Loans receivable Mortgage loans receivable . . . . . . . . . . . . . . . . . . . . . . . . . . Loan funding advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Direct loan cost - net of deferred loan fees . . . . . . . . . . . . . .

Net loans receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Servicing assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . .

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Liabilities and Net Assets Liabilities Accounts payable and accrued liabilities . . . . . . . . . . . . . . . Borrower fees on loans in process . . . . . . . . . . . . . . . . . . . . Interest payable - member banks . . . . . . . . . . . . . . . . . . . . . Notes payable - line of credit - member banks . . . . . . . . . . . Notes payable - loans - member banks . . . . . . . . . . . . . . . . .

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net Assets Without donor restrictions Designated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Undesignated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total liabilities and net assets . . . . . . . . . . . . .

2018 2017

$579,2661,457,352

100,283

147,874,443

3,889,917677,019

1,907,795

154,349,174

47,03730,4148,096

$156,571,622

91,222703,010491,644

- 145,382,880

146,668,756

1,457,3528,445,514

9,902,866

$156,571,622

$189,5891,457,352

8,003

122,529,577

16,749,810639,775

1,518,185

141,437,347

50,46048,5876,473

$143,197,811

130,813430,978454,271

12,156,095120,510,753

133,682,910

1,457,3528,057,549

9,514,901

$143,197,811

33

Statement of Activities — Year Ended December 31, 2018 & 2017Rocky Mountain Community Reinvestment Corporation

Loan Revenues Interest income - loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Loan administration fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other Loan revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net servicing revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total loan revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Direct Loan Costs Interest expense - loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Loan administration costs . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Servicing and agent fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total loan revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net loan revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Program Expenses Salaries and employee benefits . . . . . . . . . . . . . . . . . . . . . . . .

Rent and other office expenses . . . . . . . . . . . . . . . . . . . . . . . .

Professional fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

General and administrative expenses . . . . . . . . . . . . . . . . . . . .

Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Operating revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other revenue

Interest income - deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total other revenue . . . . . . . . . . . . . . . . . . . . . . . . . . .

Change in net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net assets without donor restrictions, beginning of year . . . . . . . .

Net assets without donor restrictions, end of year . . . . . . . . . .

2018 20172018 2017

$6,933,516

783,981

22,918

51,815

7,792,230

5,793,919

204,927

18,260

6,017,106

1,775,124

902,904

190,799

117,365

177,553

1,388,621

386,503

1,462

1,462

387,965

9,514,901

9,902,866

$6,188,200

566,207

23,655

28,611

6,806,673

4,862,586

102,070

9,633

4,974,289

1,832,384

815,107

180,623

138,624

126,197

1,260,551

571,833

935

935

572,768

8,942,133

9,514,901

34

Statement of Cash Flows — Year Ended December 31, 2018 & 2017Rocky Mountain Community Reinvestment Corporation

Operating Activities Change in net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Adjustments to reconcile change in net assets to net cash from operating activities: Change in fair value of servicing assets . . . . . . . . . . . . . . . . Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Change in operating assets and liabilities: Loan administration fees receivable . . . . . . . . . . . . . . . . . . . Interest receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Direct loan costs - net of deferred loan fees . . . . . . . . . . . . Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . . Checks written in excess of bank balance . . . . . . . . . . . . . . Accounts payable and accrued liabilities . . . . . . . . . . . . . . . Borrower fees on loans in process . . . . . . . . . . . . . . . . . . . . Interest payable - member banks . . . . . . . . . . . . . . . . . . . . .

Net cash from operating activities . . . . . . . . . . . . . . . . . . . . . .

Investing Activities Issuance of mortgage and interim loans . . . . . . . . . . . . . . . Issuance of loan funding advances . . . . . . . . . . . . . . . . . . . Principal payments received on mortgage and interim loans . . Principal payments received on loan funding advances . . . . Purchase of equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net cash used by investing activities . . . . . . . . . . . . . . . . . . . .

Financing Activities Net borrowing under line of credit . . . . . . . . . . . . . . . . . . . . Issuance of notes payable for loan pool . . . . . . . . . . . . . . . . Principal payments made on notes payable in loan pool . . .

Net cash provided from financing activities . . . . . . . . . . . . . . .

Net change in cash and cash equivalents . . . . . . . . . . . . . . . . .

Cash and cash equivalents, beginning of period . . . . . . . . . . . .

Cash and cash equivalents, end of period . . . . . . . . . . . . . . .

Cash per statement of financial position Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . Designated cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cash and cash equivalents, end of period . . . . . . . . . . . . . . . . .

Supplemental cash flow information: Interest paid to member bank - capitalization and loan pool . .

2018 2017

$572,768

36,75126,413

5,091(76,481)

(102,737)(654)

(49,695)(388,743)(53,832)

92,276

61,157

(18,365,568)(28,788,172)

5,117,59818,584,385

(1,382)

(23,453,139)

10,565,48117,808,946(5,137,031)

23,237,396

(154,586)

1,801,527

$1,646,941

189,5891,457,352

$1,646,941

$4,729,947

$387,965

3,42325,940

(92,280)(37,244)

(389,610)(1,623)

- (39,590)

272,03237,373

166,386

(32,241,192)(18,911,946)

6,896,32531,771,839

(7,767)

(12,492,741)

(12,156,095)31,955,196(7,083,069)

12,716,032

389,677

1,646,941

$2,036,618

579,2661,457,352

$2,036,618

$5,678,413

35

of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Contributions

All contributions are considered to be available for unrestricted use unless specifically restricted by the donor. Donated materials and equipment are reflected as contributions at their estimated values at date of receipt.

Cash and Cash EquivalentsCash equivalents include highly liquid short-term investments with original maturities of three months or less, which are readily convertible to known amounts of cash. Cash and cash equivalents are held in insured depository institutions in accordance with the Board of Directors (Board) approved investment policy, which limits accounts to 250% of the account’s insured limit excepting the account established to hold designated amounts received by RMCRC, which is not limited by Board policy (see Note 10). At times, bank deposit account balances exceed federally insured limits.

Note 1 - Summary of Significant Accounting Policies

Reporting EntityRocky Mountain Community Reinvestment Corporation (RMCRC) was formed on March 19, 1999, and began granting loans in 2000. RMCRC is a nonprofit, community development financial institution working in cooperation with its member banks (Members) serving as a catalyst for community development by offering flexible financing for affordable, quality housing to assist Utah’s low and moderate-income residents, working with government agencies to maximize leverage of public and private dollars, and providing technical assistance to project sponsors. RMCRC uses a pool of funds provided by its Members under the Intercreditor Agreement (Agreement) along with the sale of direct loan participations to fund loans to mortgagors.

Accounting Policy and Revenue RecognitionRevenues and expenses are recognized on the accrual basis in accordance with generally accepted accounting principles. Loan origination fee revenues and correspond-ing expenses are deferred and recognized over the life of the corresponding loan. Deferred loan origination fees are reported in direct loan costs – net of deferred loan origination fees on the accompanying statements of financial position. Other loan administrative fee revenues are recognized at the time the loan is funded. Revenue from loan sales is recognized when ownership of the loan passes from RMCRC to the purchaser and the gain or loss is represented by the difference between the selling price and the loan basis.

Use of EstimatesThe 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 at the date of the financial statements and the reported amounts

Notes to Financial Statements — Year Ended December 31, 2018 & 2017Rocky Mountain Community Reinvestment Corporation

36

forth in the loan agreements, and receives a benefit for assuming such responsibility. The balance in these accounts at December 31, 2018 and 2017, was $16,661,552 and $15,922,338, respectively; such amounts are not reflected on RMCRC's statements of financial position.

Mortgage Loans ReceivableThe entire loan portfolio outstanding as of December 31, 2018 and 2017, is represented by mortgage, construction, and bridge loans on properties in Utah, Idaho, Wyoming, Nevada, and Arizona. These financed receivables, that management has the intent and ability to hold for the foreseeable future or until maturity or payoff, are reported at their outstanding unpaid principal balances. Deferred loan origination fees, net of direct origination costs, are amortized into income over the expected or contractual life of the loan using the straight-line method, which does not differ materially from the interest method.

Loans receivable are considered past due if loan payments are not made according to the mortgage loan agreement. RMCRC does not currently maintain an allowance for mortgage loan losses; however, RMCRC does maintain designated net assets to cover loan losses pursuant to the Agreement. The Agreement requires the net gain on the sale of loans to be restricted to cover potential future losses on the sales of loans or as a result of default by borrowers. Additionally, the Board has designated proceeds from borrowers for rate ceiling and rate lock margin fees and may establish additional funds at its discretion from net operating revenue to be designated for the same purposes (see Note 10).

Net Assets

Net assets, revenues, gains, and losses are classified based on the existence or absence of donor or grantor- imposed restrictions. Accordingly, net assets and changes therein are classified and reported as follows:

Net Assets without Donor Restrictions – Net assets available for use in general operations and not subject to donor (or certain grantor) restrictions. The Board and the Agreement has designated, from net assets without donor restrictions, net assets for a reserve to protect against Member losses.

Net Assets with Donor Restrictions – Net assets subject to donor- (or certain grantor-) imposed restrictions. Some donor-imposed restrictions are temporary in nature, such as those that will be met by the passage of time or other events specified by the donor. Other donor-imposed restrictions are perpetual in nature, where the donor stipulates that resources be maintained in perpetuity. RMCRC reports contributions restricted by donors as increases in net assets without donor restrictions if the restrictions expire (that is, when a stipulated time restric-tion ends, or purpose restriction is accomplished) in the reporting period in which the revenue is recognized. All other donor- restricted contributions are reported as increases in net assets with donor restrictions, depending on the nature of the restrictions. When a restriction expires, net assets with donor restrictions are reclassified to net assets without donor restrictions and reported in the statements of activities as net assets released from restrictions.

Custodial AccountsRMCRC is custodian of certain funds of the borrowers associated with loans that RMCRC services. These funds are held in various accounts including reserve accounts as well as tax and insurance escrow accounts. These funds are the property of the respective borrowers. RMCRC administers these funds pursuant to terms of the respec-tive loan agreements, holds fiduciary responsibility set


37

greater than the outstanding loan balances, respectively. RMCRC estimates that the fair value of all other financial instruments at December 31, 2018 and 2017, does not differ materially from the aggregate carrying values of its financial instruments recorded in the accompanying financial statements based on applicable interest rates.

Property and EquipmentProperty and equipment is recorded at cost. A capitaliza-tion threshold of $1,000 is used by RMCRC. Maintenance, repairs and minor replacements are charged to expense as incurred. Property is depreciated over the estimated useful life of each class of depreciable asset and is computed on the straight-line method.

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount that the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. At December 31, 2018, management reviewed its long-lived assets as disclosed above and determined no impairment was necessary.

Pursuant to the Agreement and the notes issued thereun-der, each loan payable to Members is secured by an assignment of a corresponding RMCRC mortgage loan receivable and recourse is limited to such assigned receivable. While recourse is limited to the assigned collateral underlying the related mortgage loan receivable, the designated net assets provide a means to entice continued participation of Members in the Agreement. Under the terms of the Agreement, any losses on mortgage loans receivable beyond those amounts covered by the designated net asset balances are to be absorbed by the Members in proportion to their relative funding percentage of the mortgage loan. The individual Members determine their own loan loss allowance in relation to their funding percentage.

Loan Sales and Servicing AssetsWhen RMCRC sells loans it may retain servicing rights which are initially measured at fair value. Gains or losses on the sale of the loans depends in part on both (a) the previous carrying amount of the loans involved in the transfer, allocated between the assets sold and the servicing rights that continue to be held based on their relative fair value at the date of transfer, and (b) the proceeds received. To obtain fair values, quoted market prices are used if available. However, quotes are generally not available for servicing rights that continue to be held, so RMCRC generally estimates fair value using the present value of future expected cash flows based on manage-ment's best estimates of the key assumptions—credit losses, prepayment speeds, forward yield curves, and discount rates commensurate with the risks involved (see Note 8).

Fair Value of Financial InstrumentsRMCRC has a number of financial instruments, none of which are held for sale or trading purposes, which include loans receivable and notes payable. RMCRC estimates that the fair value of portfolio mortgage loans receivable at December 31, 2018 and 2017, is $229,742 and $3,916,141


38

exempt purposes. RMCRC has determined that it is not subject to unrelated business income tax.

RMCRC has appropriate support for any tax positions taken affecting its annual filing requirements, and as such, does not have any uncertain tax positions that are material to the financial statements. RMCRC will recognize future accrued interest and penalties related to unrecog-nized tax benefits and liabilities in income tax expense if such interest and penalties are incurred.

ConcentrationRMCRC provides financing primarily to multifamily rental apartment properties in a limited regional service area encompassing the Rocky Mountain region with an emphasis on Utah.

Changes in Accounting PolicyAs of January 1, 2018, RMCRC adopted the provisions of Accounting Standards Update (ASU) 2016-14, Presenta-tion of Financial Statements for Not-For-Profit Entities. The provisions of the ASU replace the existing three classes of net assets with two new classes (net assets without donor restrictions and net assets with donor restrictions). The ASU introduces new disclosure requirements to provide information about what is included or excluded from RMCRC’s intermediate measure of operations as well as disclosures to improve a financial statement user’s ability to assess the Organization’s liquidity and exposure to risk.

Salaries Expense

During the years ended December 31, 2018 and 2017, certain components of salaries and related taxes and benefits expense were classified as direct loan costs. These costs are netted against deferred loan fees on the statements of financial position. The amount of salaries and related taxes and benefits expense so classified in 2018 and 2017 was $778,243 and $562,360, respectively. Gross salaries, related taxes and employee benefit expenses for the years ended December 31, 2018 and 2017, was $1,344,123 and $1,377,467, respectively.

Functional Allocation of ExpensesThe costs of program and supporting services activities have been summarized in the statements of activities. Note 12 presents the natural classification detail of expenses by function. Accordingly, certain costs have been allocated among the programs and supporting services benefited. The financial statements report certain categories of expenses that are attributed to more than one program or supporting function. Therefore, expenses require allocation on a reasonable basis that is consistently applied. The expenses that are allocated include salaries and wages, benefits, payroll taxes, professional services, office expenses, rent, depreciation, insurance, and other, which are allocated on the basis of estimates of time and effort expended by employees in relation to those expenses.

Income Tax StatusRMCRC is organized as a Utah nonprofit corporation and has been recognized by the Internal Revenue Service (IRS) as exempt from federal income taxes under Section 501(a) of the Internal Revenue Code as an organization described in Section 501(c)(3) and qualifies for the charitable contribution deduction under Section 509(a)(2). RMCRC is required to file an annual Return of Organization Exempt from Income Tax (Form 990) with the IRS. In addition, RMCRC is subject to income tax on net income that is derived from business activities that are unrelated to their


39

The ASU also introduces new reporting requirements to present expenses by both function and natural classification in a single location and to present investment returns on the statements of activities net of external and direct internal investment expenses.

RMCRC has adopted this standard as management believes the standard improves the usefulness and understandability of RMCRC’s financial reporting.

Subsequent EventsRMCRC has evaluated subsequent events through April 2, 2019, the date these financial statements were available to be issued.

Note 2 - Liquitity and AvailabilityFinancial assets available for general expenditure, that is, without donor or other restrictions limiting their use, within one year of the statement of financial position date, comprise the following:

Cash and cash equivalentsDesignated cashLoan administration fees receivableMortgage loansLoan funding advancesInterest receivable

RMCRC expects to receive an estimated $7,837,000 within one year of the financial statements for interest on notes receivable held at December 31, 2018.

Note 3 - Property and EquipmentA summary of property and equipment at December 31, 2018 and 2017, is as follows:

Office equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Depreciation expense for the years ended December 31, 2018 and 2017, was $25,940 and $26,413, respectively.


$579,2661,457,352

100,2836,194,8713,889,917

677,019

$12,898,708

2018 2017

$143,128(112,714)

$30,414

$135,361(86,774)

$48,587

40

2018 2017

$113,662,84115,210,91322,325,549

565,057

$151,764,360

$99,390,04215,481,77322,315,240

2,092,332

$139,279,387

Note 4 - Mortgage Loans Receivable and LoanFunding AdvancesRMCRC mortgage loans receivable and loan funding advances consist of the following types of loans:

LIHTC-I – A LIHTC-I loan is a permanent loan for multifamily real estate proper-ties during the initial 15-year low income housing tax credit compliance period during which the LIHTC investor is the majority owner of the borrowing entity. As a majority owner there is substantial financial consequence if the property financed does not comply with section 42 of the IRS tax code. The probability is extremely high that the majority owner would provide financial support if the property did not perform as projected in order to maintain its tax credit. LIHTC-I loans may finance (i) the construction of, (ii) the acquisition of, or (iii) the rehabilitation of multifamily real estate properties.LIHTC – A LIHTC loan is a permanent loan for multifamily real estate properties during the extended LIHTC compliance period which extends beyond the 15-year compliance period and may be used to (i) acquire properties, (ii) rehabilitate properties at no more than $20,000 per unit, or (iii) refinance properties to preserve affordable housing.CRC – A CRC loan is a permanent loan for naturally occurring affordable housing multifamily real estate properties that may be used to (i) construct, (ii) acquire, or (iii) rehabilitate not to exceed $20,000 per unit.Specialty – A specialty loan is a permanent loan that relies upon grants and or donations for repayment as opposed to traditional rental income.

The following is a summary of mortgage loans receivable and loan funding advances by major category as of December 31, 2018 and 2017:

LIHTC - I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .LIHTC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .CRC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Specialty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Credit Quality IndicatorsRMCRC has developed Loan Risk Grades to facilitate the prudent management of risks associated with its portfolio of loans. The Loan Risk Grades may change in response to changes in the commercial real estate environment. Loans are placed into risk grade categories based on relevant information about the project, including but not necessarily limited to the ability of borrowers toservice their debt, property age, property management, remaining years in LIHTC, strength of key principles, debt coverage ratio, debt yield, county


•

•

•

•

41

population, and loan to value. Loans are graded on an ongoing basis to reflect the current risk profile. The risk grades are defined as follows:

Pass (Grade 1-5) – Loans graded as pass represent loans that are performing under the stated terms. Pass rated assets are analyzed by the paying capacity, the current net worth, and the value of the loan collateral of the obligor.

Special Mention (Grade 6) – A special mention loan has potential weaknesses that deserve RMCRC’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the RMCRC’s credit position at some future date. Special mention assets are not adversely classified and do not expose RMCRC to sufficient risk to warrant adverse classification.

Substandard (Grade 7) – A substandard loan is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that RMCRC will sustain some loss if the deficiencies are not corrected.

Troubled Debt Restructuring – Includes loans modified in a troubled debt restructuring (TDR) where concessions have been granted to borrowers experiencing financial difficulties. These concessions could include a reduction in interest rate on the loan, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collections.

All loans receivable are current on loan payments as of December 31, 2018. As described in Note 1, any losses beyond the designated net assets without donor restrictions are to be absorbed by Members. Accordingly, no provision for loan losses has been recorded by RMCRC. In management’s opinion, RMCRC’s credit risk relating to granting loans is mitigated by the diversity of borrowers, the types of projects, the underlying value of the mortgaged property, and reason-able loan to value ratios. Based on the most recent analysis performed, the risk category of loss by class of loans as of December 31, 2018 was as follows:

LIHTC - I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . LIHTC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .CRC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Specialty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


$103,392,05515,210,91318,920,922

565,057

$138,088,947

$2,940,242-

3,404,627-

$6,344,869

$6,969,588- - -

$6,969,588

$360,956- - -

$360,956

Pass (1-5) TDRSubstandard (7)Special

Mention (6)

42

Note 5 - Notes Payable — Loans — Member BanksRMCRC uses a revolving line of credit provided by Members to fund loans to its mortgagors. The line of credit limit at December 31, 2018 and 2017, was $286,750,000 and $249,800,000, respectively. At December 31, 2018 and 2017, the balance of funds available on the line of credit, taking into account the outstanding loan commitments issued by RMCRC which thus obligate funds of the line of credit (see Note 12), was $68,966,467 and $56,385,839, respectively. With respect to the line of credit, the loans payable to Members have various stated interest rates between 2.56% and 6.48%. The mortgage loans receivable from RMCRC borrowers have various stated interest rates between 2.25% and 7.95%. The revolving line of credit is secured by the mortgage loans receivable. The payment terms for both loans payable and loans receivable vary by loan.

The revolving line of credit is available to RMCRC only for the origination of loans. As monthly or periodic payments as well as prepayments are made on the loans receivable, the corresponding loans payable are paid down as required by the Agreement.

The balance of Notes Payable – Loans – Member Banks as of December 31, 2018 and 2017, of $145,382,880 and $120,510,753, respectively, includes participation amounts due to former Members that no longer participate in the revolving line of credit and amounts due to Members whose revolving line of credit has adjusted causing some amounts to not represent potential regeneration of the line of credit.

The scheduled principal payments on the line of credit based on each loan’s respective amortization schedules are as follows:

Year Ended December 31,

2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Note 6 - Retirement PlanRMCRC contributes to a 403(b) thrift plan for the benefit of its employees. All full-time employees are eligible to contribute to the 403(b) thrift plan. RMCRC’s contribution on behalf of its employees to the retirement plans for the years ended December 31, 2018 and 2017, was $89,646 and $73,549, respectively.


$9,259,7983,644,8333,768,1846,856,6616,199,379

115,654,025

$145,382,880

43

2018 2017

$50,460(3,423)

$47,037

$87,211(36,751)

$50,460

2018 2017

$55,238(3,423)

$51,815

$65,362(36,751)

$28,611

Note 7 - Operating LeaseIn April 2015, RMCRC entered into an operating lease agreement for office space. The lease expires in July 2020. Rent expense for the years ended Decem-ber 31, 2018 and 2017, was $87,316 and $77,592, respectively. Minimum lease payments due under the lease are as follows:

Year Ended December 31,

2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Note 8 - Servicing AssetsThe following table presents the changes in the fair value of servicing assets during the years ended December 31, 2018 and 2017:

Beginning balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Changes in fair value of servicing asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Ending balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net servicing revenue for the years ended December 31, 2018 and 2017. is comprised of the following:

Contractually specified servicing revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Changes in fair value of servicing asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net servicing revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Management’s estimates of fair value of servicing assets are determined using the net discounted present value of future cash flows, which consists of projecting future servicing cash flows and discounting such cash flows using an appropriate risk-adjusted discount rate. These valuations require various assumptions, including future servicing fees, servicing costs, credit losses, discount rates and prepayments. Due to subsequent changes in economic and market conditions, these assumptions can, and generally will, change from year to year.


$89,94053,369

$143,309

44

$47,037

36.42%1,7193,514

6.53%690

1,528

The following table presents RMCRC’s key assumptions used in measuring the fair value of servicing assets at December 31, 2018, and the sensitivity of fair values to an immediate 10% and 20% adverse change in these assumptions:

Fair value of capitalized servicing assets

Weighted average prepayment speeds Impact on fair value of 10% adverse change Impact on fair value of 20% adverse change

Weighted average discount rateImpact on fair value of 10% adverse changeImpact on fair value of 20% adverse change

The sensitivity analysis above is hypothetical and should be used with caution. In particular, the effect of a variation in a particular assumption on the fair value of servicing assets is calculated independent of changes in any other assump-tion; in practice, changes in one factor may result in changes in another factor, which may magnify or counteract the sensitivities. Further changes in fair value based on a single assumption to the change in fair value may not be linear.

The principal balance of this servicing portfolio, which is not shown on the statement of financial position, as of December 31, 2018 and 2017, was $14,988,981 and $15,416,018, respectively.

RMCRC’s loan servicing contracts to third parties permit termination of the contracts without compensation of the base servicing fees, though with compensation of servicing premiums negotiated in certain contracts, with or without cause, and therefore such contracts are at risks not within RMCRC’s control. However, historical practice within the industry supports the reasonable expectation that such servicing contracts will run their full term.

Note 9 - Fair Value MeasurementsAccounting principles generally accepted in the United States (US GAAP) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. US GAAP also specifies a fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobserv-able inputs (lowest level) reflect internally developed market assumptions. Fair value measurements are classified under the following hierarchy:


45

Level 1: Financial assets and financial liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that RMCRC can access.

Level 2: Financial assets and financial liabilities whose values are based on the following:

a) Quoted prices for similar assets or liabilities in active markets;

b) Quoted prices for identical or similar assets or liabilities in non-active markets; or

c) Valuation models whose inputs are observable, directly or indirectly, for substantially the full term of the asset or liability

Level 3: Financial assets and financial liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs may reflect our estimates of the assumptions that market participants would use in valuing the financial assets and financial liabilities.

RMCRC utilizes internal valuation models as described in Note 8 to determine fair value of its servicing assets.

The following table summarizes Level 1, 2 and 3 financial assets and financial liabilities measured on a recurring basis by their classification in the statement of financial position at December 31, 2018.

The following table summarizes Level 1, 2 and 3 financial assets and financial liabilities measured on a recurring basis by their classification in the statement of financial position at December 31, 2017.


$47,037

Level 3Level 2Level 1Assets

Servicing Assets

Servicing Assets

- -

$50.460

Level 3Level 2Level 1Assets

- -

46

A summary of changes in the statement of financial position line item for servicing assets measured using Level 3 inputs is presented in Note 8.

Fair Value of Financial Instruments Not Required to be Reported at Fair ValueThe carrying amounts of cash and cash equivalents, designated cash, accounts payable and accrued liabilities approximate fair value due to the short-term nature of the items and are considered to fall within Level 1 of the fair value hierarchy. The carrying amount of loans receivable is based on the discounted net present value of the expected future cash receipts, and approximate fair value. The fair values of notes payable is based on a combination of the stated or implied interest rates and the unsecured borrowing rate available to us at the measurement dates, and approximate their carrying amount. These estimates are considered to fall within Level 2 of the fair value hierarchy.

Note 10 - Designated Net Assets without Donor Restric-tionsUnder the Agreement, the gain on the sale of loans, less an amount to compensate RMCRC for time spent in preparation of the loan sale and out-of-pocket expenses, must be designated for use in protecting Members in the event loans are sold at a discount, or other potential loan loss. RMCRC sold a package of 10 loans in 2005 and a package of 19 loans in 2011. The amount of gain designated from the 2011 and 2005 sales was $832,842 and $315,435, respectively. These gains comprise $1,148,277 of designated net assets without donor restriction as of December 31, 2018 and 2017, and the related cash is included in designated cash on the statement of financial position.

In addition, proceeds received from borrowers for rate ceiling and rate lock margin fees are designated for use in meeting payment obligations to Members in the event of a loan loss either from sale of loans at a discount or payment default by a borrower. As of December 31, 2018 and 2017, RMCRC has received a total of $309,075 in rate ceiling and rate lock margin fees is included in designated cash at December 31, 2018 and 2017.

Note 11 - Lines of CreditRMCRC has a $5 million line of credit with a bank. The line of credit matures in December 2019 and is secured by RMCRC loans receivable and associated cash flows. Interest accrues on the line of credit at the three-month LIBOR rate plus 2% per annum. The interest rate at December 31, 2018, was 4.74%. At December 31, 2018 and 2017, the balance due on the line of credit was $0 and $5,000,000, respectively.

RMCRC has an additional $5 million line of credit with a bank. The line of credit matures in December 2019 and is secured by RMCRC loans receivable and associated cash flows. Interest accrues on the line of credit at the three-month LIBOR rate plus 2% per annum. The interest rate at December 31, 2018, was 4.74%. At December 31, 2018 and 2017, the balance due on the line of credit was $0 and $0, respectively.


47

$5,793,919204,927

18,260902,904190,799117,365177,553

7,405,727

(5,793,919)(204,927)

(18,260)

$1,388,621

TotalManagementand General

MembershipDevelopment

ProgramServicesLending

RMCRC has an additional $10 million line of credit with a bank. The line of credit matures in June 2019 and is secured by all RMCRC assets. Interest accrues on the line of credit at the three-month LIBOR rate plus 2% per annum. The interest rate at December 31, 2018 was 4.74%. At December 31, 2018 and 2017, the balance due on the line of credit was $0 and $7,156,095, respectively.

Note 12 - CommitmentsIn the normal course of business, RMCRC has various outstanding commitments to originate loans. These commitments obligate RMCRC and in turn its Members to close and fund loans in the future (up to 30 months in some instances) if prospective borrow-ers satisfy all closing conditions including completion of improvements on, rent up, and stabilization of collateral properties. These commitments are not reflected in the financial statements. At December 31, 2018 and 2017, the total commitment for loans in process was $81,018,000 and $25,438,000, respectively. None of the prospective borrowers under these commitments had satisfied the closing conditions with respect to these commit-ments as of December 31, 2018 and 2017, respectively.

Note 13 - Functionalized ExpensesThe following schedule presents the natural classification of expenses by function for the year ended December 31, 2018:


$5,793,919204,927

18,260559,568148,823

91,54543,931

6,860,973

(5,793,919)(204,927)

(18,260)

$843,867

$ - - -

343,33641,97625,82012,391

423,523

- - -

$423,523

$ - - - - - -

121,231

121,231

- - -

$121,231

Interest expense - loans . . . . . . . . . . . . . . . . . . .Loan administration costs . . . . . . . . . . . . . . . . Servicing and agent fees . . . . . . . . . . . . . . . . . Salaries and employee benefits . . . . . . . . . . .Rent and other office expenses . . . . . . . . . . . Professional fees . . . . . . . . . . . . . . . . . . . . . . . . . . General and administrative expenses . . . . .

Less expenses included with revenues on the statement of activities Interest expense - loans . . . . . . . . . . . . . . . . . Loan administration costs . . . . . . . . . . . . . . . Servicing and agent fees . . . . . . . . . . . . . . . .

Total expenses included in the expense section on the statement of activities

48


The following schedule presents the natural classification of expenses by function for the year ended December 31, 2017:

Interest expense - loans . . . . . . . . . . . . . . . . . . .Loan administration costs . . . . . . . . . . . . . . . . Servicing and agent fees . . . . . . . . . . . . . . . . . Salaries and employee benefits . . . . . . . . . . .Rent and other office expenses . . . . . . . . . . . Professional fees . . . . . . . . . . . . . . . . . . . . . . . . . . General and administrative expenses . . . . .

Less expenses included with revenues on the statement of activities Interest expense - loans . . . . . . . . . . . . . . . . . Loan administration costs . . . . . . . . . . . . . . . Servicing and agent fees . . . . . . . . . . . . . . . .

Total expenses included in the expense section on the statement of activities

Note 14 - Restatement Resulting from Change in Accounting PolicyAs disclosed in Note 1, RMCRC adopted the provisions of ASU 2016-14, Presenta-tion of Financial Statements for Not-For-Profit Entities as of January 1, 2018. As a part of the adoption, changes were made to the presentation of the financial statements and the classification of net assets. Following is a summary of the effects of the change in accounting policy in RMCRC’s December 31, 2017 financial statements.

TotalManagementand General

MembershipDevelopment

ProgramServicesLending

$4,862,586102,070

9,633503,262128,241

98,42336,609

5,740,824

(4,862,586)(102,070)

(9,633)

$766,535

$ - - -

311,84552,38240,20114,954

419,382

- - -

$419,382

$ - - - - - -

74,634

74,634

- - -

$74,634

$4,862,586102,070

9,633815,107180,623138,624126,197

6,234,840

(4,862,586)(102,070)

(9,633)

$1,260,551

49

$7,793,8561,148,277

-

$8,366,6241,148,277

-

$(7,793,856)(1,148,277)

8,942,133

(8,366,624)(1,148,277)

9,514,901

$ - -

8,942,133

$ - -

9,514,901

As RestatedAs Previously

ReportedAdoption ofASU 2016-14

The effect on RMCRC’s statement of activities as of December 31, 2017, is as follows:

Net Assets, Beginning of YearUnrestrictedTemporarily restricted net assetsNet assets without donor restrictions, beginning of year

Net Assets, End of YearUnrestrictedTemporarily restricted net assetsNet assets without donor restrictions, end of year

Note 15 - Subsequent EventsSubsequent to the balance sheet date, RMCRC has entered into a transaction whereby Western Region Nonprofit Housing Corporation will purchase and RMCRC will sell, at PAR not to exceed $2,346,700, seven RMCRC Developer Notes issued in connection with LaPorte Development. The seven Developer Notes are all recorded Substandard. Said transaction is expected to be consummated on or before April 30, 2019.


$309,0757,829,307

228,2421,148,277

- -

$(309,075)(7,829,307)

(228,242)(1,148,277)

1,457,3528,057,549

$ - - - -

1,457,3528,057,549

As RestatedAs Previously

ReportedAdoption ofASU 2016-14

The effect on RMCRC’s statement of financial position as of December 31, 2017, is as follows:

Unrestricted net assets Designated Undesignated Member bank contributionsTemporarily restricted net assetsNet assets without donor restrictions Designated Undesignated

50

NOTES

51

NOTES

52

Our MembersOur Members

Thank youfor your support and membership,

Investors and Lenders

At RMCRC’s September 2019 annual member meeting, 28 member banks renewed their membership and two banks joined. We would like to wel-come Continental Bank and Brighton Bank to RMCRC!

As a result, today’s total com-mitment line of credit from the member banks is $286 million. We appreciate the ongoing confidence from our member banks and their partnership in allocating these funds to serve those providing affordable housing in our communities!

I don’t think the government can

solve this problem, but I do think

government could be a huge

catalyst in helping solve the

problem, in partnership with

good developers and lending

institutions.”

“

Jacob L. AndereggUtah State Senator

Complex

Community Community

Lending

Responsive

Responsive

Responsive

Responsive

Innovative Innovative Lending

Innovative

Innovative

Complex

Complex

Complex CRA CRA CRA

CRA


2019 ANNUAL REPORTResponsive • Innovative • Proficient

64 E. Winchester Street, Suite 230 • Salt Lake City, UT 84107 Phone: 801-366-0400 • www.rmcrc.org

CONTACT USSteven Nielsen, [email protected]

801-833-0008Cell: 801-201-7069

David Watkins, [email protected]

801-503-0547Cell: 435-655-1660

Nicholas Berger, [email protected]

801-833-0009Cell: 801-641-3156

Natasha Pfeiffer, [email protected]

801-335-5401Cell: 801-865-7222


Celebrating 20 Years!

Responsive Innovative Lending CONTACT US CRA Complex 801 ... · [email protected] 801-503-0547...

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