advancing your financing and development objectives...title of presentation business value:...

1

Advancing Your Financing and

Development Objectives

1 Arthur Fleming, Senior Vice President, Director of CIS, FHLBank Atlanta

Florida Housing Coalition

2013 Annual Conference

Tuesday, September 10, 2013 - Orlando, FL

• FHLBank Atlanta Overview

• Overview of CIS Products and Services

• Connecting the Dots

• Business Value and Benefits

• What Can We Do To Assist You?

Our Discussion Today

2

FHLBanks Perform Critical Function

• Cooperative, regional structure of FHLBanks helps

reduce risk; increases responsiveness to

shareholders

• FHLBanks meet liquidity and risk management

needs of shareholders of all sizes

• Via our shareholders, provide essential “equity-like”

funding for locally based affordable housing and

community development

3

Overview

FHLBank System

New York Boston

Seattle

San Francisco

Dallas

Topeka

Des Moines Chicago

Indianapolis

Cincinnati

Atlanta

US Territories: Puerto Rico,

Virgin Islands, Guam

Overview

Pittsburgh

4 4

724 Commercial Banks

118 Savings Banks

14 Insurance Companies

161 Credit Unions 1 CDFI

FHLBank Atlanta Shareholders As of December 31, 2012

Overview

• Total assets: $123.7 billion

• Total Advances (loans): $87.5 billion

• Net Income: $270 million

• Headquartered in Atlanta since 1972

FHLBank Atlanta-Financial Highlights

Overview

As of December 31, 2012

Products and Services

• Advances (Loans)

• Letters of Credit

• Interest rate risk management tools

• Cash Management services

• Affordable Housing Program (AHP) and

Community Investment Program (CIP)

Overview

7 7

• Like every “dividend,” predicated upon earnings

• “Equity-like” capital for real estate transactions

• Direct & indirect benefits to shareholders, developers, homebuyers, tenants, and the community

Unique Offering to Shareholder and Community

8

FHLBank

Products Community

Dividend Earnings

10 percent

=

Connecting the Dots

Growing communities

create demand for

additional financing

FHLBank Atlanta provides “equity-like”

funding enabling shareholders to make transactions viable and attract new customers

Funds are invested in community- based transactions generating successful lending opportunities

FHLBank

Atlanta

Shareholder

Community

Shareholder originations

create demand

for advances

Indirect Benefit New and rehabbed

housing,

growing local tax base,

job creation

Direct Benefit Viable lending, new customers,

reduced loan risk

9

Connecting the Dots

10

Scale and Impact

Economic

Development

Program

AHP

Competitive

Program

AHP

Set-aside

Program

Community

Investment

Program

$441 Million competitive funding to create over 73,000 rental and homeownership opportunities for moderate-, low- and very low-income households since 1990. AHP Competitive Leverage Ratio – 1:15

$121 Million funded through AHP Set-aside products and supporting more than 18,000 units since 1997. AHP Set-aside Leverage Ratio – 1:18

$6.5 Billion low-cost CICA advances supporting

community economic initiatives and affordable housing development.

*As of 07/31/2013

11

Scale and Impact

796 LIHTC Projects

50,708 LIHTC Units Awarded AHP Funds

$5.6 billion $289 million LIHTC/AHP

52 LIHTC Projects

6,075 LIHTC Units Awarded AHP Funds 1:25 Leverage

15 Unique Shareholders

$745 million

$30 million LIHTC/AHP

4,741+ JOBS

TAX REVENUE

$84 MILLION

LOCAL DEVELOPMENT

$745 MILLION

FHLBank Atlanta AHP Competitive LIHTC Projects(1990-2013)

12

Scale and Impact

$1.1 billion

$147 million SH/AHP

31 Unique Shareholders

$266 million

$35 million SH/AHP

5,483 JOBS+

TAX REVENUE

$97 MILLION

LOCAL DEVELOPMENT

$266 MILLION

On Supportive Housing1 Projects

1:7 Leverage

418 Supportive Housing Projects

20,795 Units Awarded AHP Funds

1 “Supportive Housing” defined here as Non-LIHTC Rental Projects where one or more units has been reserved for occupants with

special needs such as Mentally or Physically Disability, Chronic Homelessness, Elderly, Recovering from Drug, Alcohol , Physical

Abuse, and/or Persons with AIDS.

SUPPORTIVE HOUSING

86 Supportive Housing Projects

4,154 Units Awarded AHP Funds 1:8 Leverage

Supportive Housing/AHP Impact

FHLBank Atlanta AHP Competitive –Supportive Housing1 (1990-2013)

Value to Your Business AND Your Community

Affordable Housing Program (AHP)

– AHP Competitive – rental and ownership

• New construction/rehabilitation

• Single-family/multi-family

• Acquisition/owner-occupied

– AHP Set-aside – ownership only

• First-time Homebuyer Product (FHP)

• Community Stability Homebuyer Product (CSP)

• Foreclosure Recovery Homebuyer Product (FRP)

• Energy Efficiency/Weatherization Rehabilitation Product (EWP)

• Accessibility Rehabilitation Product (ARP)

• Veterans Product Suite (VPP, RVPP, VRP, RVRP)

Community Investment Program (CIP)/

Economic Development Program (EDP)

• Discounted advance products for residential or economic

development projects

• Commercial loan officers

• CRA officers • Business development officers

• SF mortgage loan officers • CRA officers • Business development officers

• Commercial loan officers • CRA officers • Business development officers

13

Connecting the Dots

13

Products: 2013 Homeownership Suite (AHP Set-aside)

Purchase Products

Foreclosure Recovery Product

(FRP)

Community Stability Product (CSP)

Veterans Purchase Product

(VPP)

First-time Homebuyer

Product (FHP)

Returning

Veterans Purchase Product (RVPP)

Energy Efficiency/ Weatherization Rehabilitation Product (EWP)

Accessibility Rehabilitation Product (ARP)

Rehabilitation Products

Veterans Rehabiliation Product (VRP)

Returning

Veterans Rehabiliation

Product (RVRP)

14

The Products

14

15

• Rental transactions

• Types

• Low-Income housing tax credit (LIHTC)

• Non-LIHTC multi-family

• Mixed-Use

• Reduces project debt service

• Which thereby permits a reduction in project rents to enable affordability

• Use of Funds

• Acquisition

• Rehabilitation

• New Construction and/ or

• Permanent funding

• Supportive Housing transactions

• Social service residential facilities

The Products

Products: AHP Competitive Program (Rental)

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

• 2014

• 2015

• 2016

The Products

Looking Ahead: AHP Competitive 3-year Application Schedule



Open

1/14/14

Close

2/13/14

Decision

5/29/14

Decision

10/2014

Close

07/2015

Open

06/2015

Open

03/2015

Close

04/2016

Decision

07/2016

16

Our Success Stories Tell US

FHLBank Atlanta’s

CIS Products

Reduce Loan Risk in

Transactions

Advance Shareholder

Initiatives

Get the Phones to Ring with Product

Differentiation

Open Doors with

“Gatekeepers”

Advance Your Brand

Through Media

Cross-sell to Your

Depositors

Value and Benefits

17

Title of Presentation

Business Value of Product Differentiation:

Getting the Phones to Ring

18

• Shareholder marketing of products drives

customer response

• Shareholders brand products in their name Marketing Templates available on FHLBank Atlanta website

Direct assistance with shareholders

• Value in making the products available

• Get the phones to ring!

Value and Benefits

19

Value and Benefits

Shareholder Success Stories: Getting the Phones to Ring

Virginia Heritage Bank, Vienna, VA “We are a big fan of the Federal Home Loan Bank of Atlanta. They were

critical in helping us establish our mortgage operation. We see the strategic

marketing advantage of using AHP programs. We just got done with a Fair

Lending review with our regulator who was very pleased with Virginia Heritage

Bank’s first time homebuyer activity.”

--Richard Hutchison, Chief Mortgage Officer, Virginia Heritage Bank

Total Costs AHP Shareholder Other

Acquisition $590,000 $590,000

Construction $9,160,282 $0 $134,988 $9,025,294

Soft Costs $1,716,414 $65,000 $106,161 $2,063,862

Other Costs $2,143,311 $547,815 $858,851 $3,014,288

Total Development Budget $13,610,007 $612,815 $1,100,000 $11,897,192

Total Debt – First Mortgage $1,100,000

Member Loan-to-value (LTV/Cost) 8.1%

AHP Competitive $612,815

Total Debt if AHP converted to Debt $1,712,815

Member LTV/Cost if AHP

converted to Debt

12.6%

DCR 1.36

DCR if AHP converted to Debt

(7% for 15 years) 0.71

20

Value and Benefits

Multi-family Rental, New Construction

Winter Haven, FL 84 units

Business Value: Extend Credit and Reduce Loan Risk


21

Business Value: Extend Credit and Reduce Loan Risk

Rental Example

• Enabled Shareholder’s extension of credit - With AHP 1.36 DCR; without AHP 0.71 DCR

• Reduced Shareholder’s loan risk in transaction - With AHP 8.1% First Mortgage LTC; without AHP 12.6% LTC

• Enabled Shareholder lending on difficult to finance

transaction - Could enhance branding of Shareholder within the community

Value and Benefits


22

CRA Value:

Rental Example -Assessment Potential Impact

• Provided Shareholder a $1,100,000 extension of credit • CRA-eligible Lending Opportunity

• Shareholder sponsored the AHP Competitive

application for the direct subsidy • Which could be CRA-eligible Service Opportunity

• Tenants in project are all at 80% or below of area

median income • Which would position project as a CRA-eligible activity

Value and Benefits

Multi-family Rental, New Construction

Ft. Walton Beach, FL 12 units

Housing for Homeless AHP Shareholder Other

Construction $885,880 $772,500 $128,924 $4,456

Soft Costs $147,423 $38,076 $109,347

Other Costs $129,397 $60,000 $69,397

Total Development Budget $1,162,700 $772,500 $227,000 $183,200

Total Shareholder Debt – First Mortgage $227,000

Shareholder Loan-to-value (LTV)/cost 19.5%

AHP Competitive $772,000

Total Shareholder Debt if AHP converted to

Debt

$999,500

Shareholder LTV/cost if AHP converted to Debt 86.0%

DCR 1.05

DCR if AHP converted to debt (7.5% for 15 years)

0.21

23 “AHP has the ability to fill funding gaps.” – FHLBank Atlanta Shareholder

Business Value: Difficult to Finance Transactions

Value and Benefits

24

Home Sales Price $60,000

Closing Costs $7,808

Total Costs $67,808

Member First Mortgage $57,987

AHP Set-aside $5,000

Homebuyer down-payment $1,250

Member LTV (First Mortgage/Sales Price)

96.6%

Member LTV without AHP Set-aside (First Mortgage/Sales Price)

105.0%

First-time Homebuyer Product

Wilson Family, FL

Home Sales Price $55,500

Closing Costs $3,326

Total Costs $58,826

Member First Mortgage $42,250

AHP Set-aside $12,000

Homebuyer down-payment $4,576

Member LTV (First Mortgage/Sales Price)

76.1%

Member LTV without AHP Set-aside (First Mortgage/Sales Price)

97.7%

Foreclosure Recovery Product

Sola Family, FL

Business Value: Ownership Example - Transactional Level

Value and Benefits

25

Value and Benefits

Old Florida National Bank, Longwood, FL – Leveraged AHP funds for a non-performing 48-unit apartment complex,

allowing Old Florida National Bank to reposition the project, creating a

new business relationship by making a construction loan and getting

CRA credit for the project

“This is a great program and is getting us a lot of CRA credit.”

Thomas Berrell, Senior Vice President, Old Florida National Bank

Creating a new business relationship

Leverage AHP Funds & reposition the project

Receive CRA credit for the project

Shareholder Success Stories:

Rental Example


Business Value:

Cross-Sell to Your Depositors and Current Customers

26

• Survey shows banks are not doing

a very good job of selling

mortgage loans to existing

customers

• “There’s a huge opportunity for

banks within their captive

customer base but they have to offer a cost competitive product.”

Tom Mataconis Vice President of Consulting

Carlisle & Gallagher

• Why not use FHLBank Atlanta

products to cross sell to your depositors?

Value and Benefits



Cross-Sell to Your Depositors and Current Customers

27

Value and Benefits

CenterState Bank, Zephyrhills, FL Converted a rehab customer into a new depositor for CenterState Bank

“We are making people safer and improving the quality of their lives. I am

embarrassed sometimes with the gratitude expressed by our customers and I wish you could hear how relieved and happy this program is making people.”

» --Hazel Greene, Residential Loan Officer, CenterState Bank

Cheaha Bank, Anniston, AL

“We have leveraged the rehab product to gain a greater market share of

depositors for the bank, including both personal accounts from the rehab

recipients and commercial accounts from the contractors doing the work.”

» --Alan Easterwood, Vice President, Mortgage Loan Originator, Cheaha Bank

Business Value:

Magnet for New Relationships with “Gatekeepers”

• Who are the “gatekeepers” of your potential new customers?

• Use products to open previously closed doors

• Direct value proposition for public unit relationships

• Local governments

• Connect to realtors in a different manner

28

Value and Benefits


Magnet for New Relationships with “Gatekeepers”

29

Value and Benefits

Dade County Federal Credit Union, Miami, FL • Initiative in progress that leverages AHP products to establish new

relationships with the Miami/Dade Community Development

Department and the City of Miami Gardens

30

Value and Benefits


Advance Shareholder Initiatives

Pentagon Federal Credit Union

• Began using the Veterans rehab and Veterans purchase products in 2012

• They are happy with the ease of handling the transactions and now want to

roll the veterans product out to their entire nationwide membership

Services

• Connections to Business Drivers: FHLBank Atlanta has a database of over

4,000 developers, realtors, contractors, nonprofits, etc. that can be shared

with shareholders

– Can be sorted by local market

• Marketing: FHLBank Atlanta provides templates for the marketing of

homeownership products

– Templates available on web

– Direct assistance with shareholders

• Technical Assistance: FHLBank Atlanta will conduct, in collaboration with

our shareholders, webinars, joint outreach, business development events,

etc. to attract, train, or retain our shareholder’s customers

31

The Services

United Bank, Vienna, VA, and the Fairmont-

Morgantown Housing Authority

32

Advancing Your Brand Through Media

First Tuskegee Bank and the City of Montgomery, AL

33

http://youtu.be/1ilfWg1vo8I

Advancing Your Brand Through Media

http://youtu.be/1ilfWg1vo8I

34

FHLBank Atlanta The Community Dividend at Work

Foreclosure Recovery

Sola Family

Down payment Assistance

North Lauderdale, FL

AHP Investment

$12,000

Sales price

$55,500

Affordable Housing

Laurel Oaks

Okeechobee, FL

AHP Investment

$500,000

Total Development Cost

$12,210,311

Affordable Housing

Grace Meadows Subdivision Fellsmere, FL

AHP Investment

$75,000


$1,247,000

Affordable Housing

Little Haiti Gateway

Miami, FL

AHP Investment

$500,000


$4,422,000

Affordable Housing

Butterfly Gardens Stuart, FL

AHP Investment

$375,000


$2,645,000

Affordable Housing

Casa Caesar Chavez

Florida City, FL

AHP Investment

$470,325


$1,734,000

Overview

What Can We Do to

Help Advance Your

Success Story?

35

Contact Us For More Information

(800) 536-9650, Option 3, Option 1, Option 3

Visit our website at www.fhlbatl.com

RENTAL TEAM Joel Brockmann – Rental Production Manager

Don Billingsley

James Monaghan

OWNERSHIP TEAM Lia Webster – Ownership Production Manager

Maxima Sims

Glenn Stewart

36

We’re Here to Help

advancing your financing and development objectives...title of presentation business value:...

Documents