1

ANNUAL REPORT 2015

4 DONOR HIGHLIGHT

6 GREAT FALLS RESCUE MISSION

8 THE RED LION INN

10 TIN ROOF TACOS

CONTENTS12 TRAILER TERRACE

14 GOOSE CREEK TRAILER COURT

15 IMPACTS & FINANCIALS

21 MONTANA & IDAHO CDC INVESTORS & TEAM

Montana & Idaho CDC’s mission is to provide financing and consulting services that transform the lives of individuals

and strengthen community prosperity.

Our community vibrancy is built one entrepreneur at a time, and I am excited to introduce you to some of those inspiring people. Everyone we funded last year refused to quit. Even though they heard that their ideas would never fly, they believed in themselves and persevered. They got comfortable with hearing “no,” but they didn’t let it get in the way of their dreams. Instead, they dusted themselves off, changed the pitch, adjusted the course, and shouldered their way into opportunity.

In this report, you are going to meet a few of these people, like Rick Orizotti, who knew that Polson, Montana, needed his new hotel. He had an uphill battle to convince everyone that his vision was sound. The community’s tourism-based economy is seasonal, and concerns about the winter months resulted in Rick hearing “no” when he sought financing. But Rick designed the hotel to reduce seasonal fluctuations by bringing in conferences and sporting events during the winter. In partnership with US Bank, Montana & Idaho CDC was able to say “yes” to the project. Today, Rick’s hotel is the hub of a new city center and is hosting community events in the off season.

Jim Kizer, the Executive Director of the Great Falls Rescue Mission, knows about hearing “no.” He said it to homeless families who needed shelter because there wasn’t enough room at the mission for everyone.

When room was available, he had to split up families between mens’ and womens’ facilities. Using our New Markets Tax Credit financing, Montana & Idaho CDC financed The Cameron Family Center, which will give homeless families shelter and resources to find permanent homes. Now Jim will be able to say “yes” to families in need.

These are just a couple of the wonderful, tenacious entrepreneurs who you will meet in this report and who make us thankful for the work they do. They keep us sharp and push us to find new and better products and services to help them succeed. Their persistence creates successful businesses and healthy communities. And we are all the better for it.

We’re also happy to announce that we are changing our name to Montana & Idaho CDC to reflect the expansion of our lending into Idaho. It’s an exciting move that will help us reach even more inspiring businesses and communities in the coming years.

Dave Glaser, President

F R I E N D S O F M O N TA N A & I DA H O C D C ,

Cover photo: Loan clients Becky and Parker Arrien.Above photo: A child at the Great Falls Rescue Mission.

Nick and Mary Babson fund change. They know the power of small business to bring life and vitality to local communities. “You have to always keep community values at heart,” says Nick. That’s why Nick and Mary decided to financially support Montana & Idaho CDC.

Before learning about Montana & Idaho CDC, community development financial institutions (CDFIs) were unknown to them. “CDFIs are still well kept secrets,” says Nick. “They are a big arrow in the quiver to support small businesses in rural communities, and more people need to know they exist.” That is why Nick joined the Montana & Idaho CDC board in 2008, and why he and Mary made their first donation to expand the program to offer free consulting to loan clients.

NICK & MARY BABSON

DONOR HIGHLIGHT

“I became enamored with the idea of Montana & Idaho CDC providing capital and consulting to help entrepreneurs become successful business owners,” says Nick. Nick also said he appreciates that his donation will be matched by state and federal dollars. “Montana & Idaho CDC can turn my dollar into eight dollars for local businesses by pairing it with other programs.” Nick served as board chair for Montana & Idaho CDC in 2013 and 2014. Under his leadership, the organization expanded into Idaho and became much more

focused on expanding programs aimed at helping the most impoverished people and communities.

This year, Nick and Mary launched Montana & Idaho CDC’s planned giving program by establishing the organization’s first charitable bequest. For the Babsons, business success and community prosperity are synonymous, and their investment will ensure that is true long into the future.

$2.6M I N C O N T R I B U T I O N S F R O M

I N D I V I D UA L D O N O R S

M O N TA N A & I D A H O C D CH A S R EC E I V E D

4 5

“ YO U H AV E TO A LWAY S

K E E P C O M M U N I T Y VA LU E S

AT H E A R T.”

Nick and Mary being recognized for their philanthropy at The Sewanee Inn.

The Great Falls Rescue Mission provides around-the-clock shelter, meals, counseling, and medical services. The Mission operates beyond capacity and can’t house families together. Montana & Idaho CDC allocated $10.5 million in New Markets Tax Credits (NMTC) to help fund a new building for temporary shelter of up to 34 families, a medical clinic, classrooms, commercial kitchen and dining space, and a play area. The NMTC financing for the Mission was a portion of a $30 million NMTC allocation for projects that make significant impacts in their communities. The Cameron Family Center will allow the Mission to welcome families in need, rather than send them away.

GREAT FALLS, MT

6 7

GREAT FALLS RESCUE MISSION

“ W E W E R E N ’ T G O I N G TO

T U R N AWAY O N E M O R E

H O M E L E S S FA M I LY.”

L O W- I N C O M E P EO P L E

M O N TA N A & I D A H O C D C H A S F I N A N C E D C O M M U N I T Y

FA C I L I T I E S T H AT S E R V E

Site of the new Cameron Family Center.

17,660

Polson, Montana, located on the Flathead Indian Reservation at the south shore of Flathead Lake, enjoys a busy summer tourist season thanks to abundant recreational opportunities. The community has been working to foster a stable, year-round economy. Montana & Idaho CDC moved Polson’s economic development agenda forward by providing $11.4 million in New Markets Tax Credits allocation to help build a hotel and convention center with a full-service restaurant. Polson can now host conventions and provide accommodations and hospitality for larger regional events. The project will create an estimated 42 new jobs and be a catalyst for additional private investment in the area.

THE RED LION INN

POLSON, MT

8 9

“ W E W E R E TO L D

B U S I N E S S I N P O L S O N C O U L D

O N LY B E S E A S O N A L . W E

W O U L D N ’ T B E L I E V E I T .” $3MTO R U R A L S M A L L

B U S I N E S S E S I N 2 0 1 5

M O N TA N A & I D A H O C D C L O A N E D A L M O S T

Working at her brother-in-law’s taco shop in Texas, Susan Loyd learned the business and helped it grow. When her sister Sandy Brown moved to Boise, the two women saw a chance to recreate the taco shop they loved in a new community. Susan and Sandy had experience, dedication, and a solid business plan, but like many entrepreneurs with start-up restaurants, they couldn’t obtain traditional bank financing. Montana & Idaho CDC recognized the sisters’ potential and provided financing and technical assistance to help them achieve their dream of opening their taco shop in the heart of Boise.

TIN ROOF TACOSBOISE, ID

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“ W E W O U L D N ’ T G I V E U P

O N A G R E AT I D E A .” $2.5MTO W O M E N - O W N E D

B U S I N E S S E S I N 2 0 1 5

M O N TA N A & I D A H O C D C L O A N E D OV E R

11

When Don Feist and his family moved into Trailer Terrace, they faced murky water pouring from the tap and a sludge-clogged sewer system seeping into nearby ground water. Determined to improve their living conditions, Don and other Trailer Terrace residents worked with NeighborWorks Montana to establish a resident-owned community (ROC), and Montana & Idaho CDC financed the acquisition of the land under their homes. Today, Don and his neighbors have control of the maintenance needed for safe, healthy homes and have a stake in the stability of their neighborhood.

TRAILER TERRACE

GREAT FALLS, MT

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“ O U R L A N D L O R D I G N O R E D

O U R N E E D S S O W E TO O K

B A C K O U R H O M E S A N D

B U I LT A C O M M U N I T Y.” 157FA M I L I E S

M O N TA N A & I D A H O C D C F INANC ING TO ROC COMMUNIT I ES

C R E AT E D H O M E S FO R

A YEAR OF SIGNIFICANT

IMPACTIn 2015, Montana & Idaho CDC increased its

lending from its revolving loan fund by 80%.

New Meadows is a small high-end resort town in Idaho where year-round residents struggle to find quality, affordable housing. Local rafting company owners Parker and Becky Arriens took matters into their own hands by purchasing a local trailer court and renovating it. They did such a nice job that when the owners of nearby Goose Creek trailer park retired, they asked the Arriens to buy their park too. With financing from Montana & Idaho CDC, the Arriens have been renovating and adding much-needed and much-appreciated housing at Goose Creek.

GOOSE CREEKTRAILER COURT

NEW MEADOWS, ID

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“ G O O S E C R E E K T R A I L E R

C O U R T I S A N I C E P L A C E

TO L I V E , T H A N K S TO

M O N TA N A & I D A H O C D C .”

Bill Weimer, manager and resident.

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From loans that change the lives of individuals to loans that affect thousands, Montana & Idaho CDC provides financing and technical assistance that transform our communities. $41M

I N TOTA L L E N D I N G I N 2 0 1 5

62

$5.5M 616

33B O R R O W E R S

N E A R LY

I N L O A N S TO L O W- I N C O M E P L A C E S

TOTA L J O B S C R E AT E D

L O A N S TO L O W- I N C O M E P EO P L E

SIGNIFICANT IMPACT IN 2015

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C O N S O L I D AT E D S TAT E M E N T O F F I N A N C I A L P O S I T I O N * S TAT E M E N T O F A C T I V I T I E S *

* The Consolidated Statement of Activities and Consolidated Financial Position presented as of December 31, 2015 are unaudited. Complete audited financial statements are available from Rick Eneas, Controller, Montana & Idaho CDC, 229 E. Main St. Missoula, MT 59802.

A S S E T S F Y 1 5

CURRENT ASSETS

Cash and cash equivalents 11,772,480

Receivables and other current assets 574,830

Loans receivable, net, current portion 2,176,148

Total current assets $ 14,523,458

NONCURRENT ASSETS

Investment in subsidiaries 28,748

Loans receivable, net, noncurrent portion 17,430,212

Property and Equipment, net 1,973,881

Other noncurrent assets 33,000

Total noncurrent assets $ 19,465,841

Total assets $ 33,989,299

L I A B I L I T I E S A N D N E T A S S E T S F Y 1 5

CURRENT LIABILITIES

Accounts payable and other accrued liabilities 632,284

Current portion of long-term debt 2,879,944

Total current liabilities $ 3,512,228

LONG-TERM LIABILITIES

Long-term debt, net, current portion 7,962,979

Total liabilities $ 11,475,207

NET ASSETS

Unrestricted 18,190,444

Temporarily restricted 2,982,228

Permanently restricted 1,341,420

Total net assets $ 22,514,092

Total liabilities and net assets $ 33,989,299

S U P P O R T A N D R E V E N U E S F Y 1 5

Grants and contributions 1,769,572

Contracts 257,278

Revolving loan fund income 1,323,776

NMTC Fees 3,045,208

Other 70,340

Total support and revenues $ 6,466,174

E X P E N S E S F Y 1 5

Program services

Business loans 2,509,635

Business consulting 503,257

Administration 1,329,965

Total expenses $ 4,342,857

Total change in net assets $ 2,123,317

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COMMUNIT IES WHERE MONTANA & IDAHO CDC HAS PROVIDED F INANCING

GROWINGH E R E A N D

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View from the Red Lion Inn & Suites in Polson, Montana.

$385MS I N C E 1 9 8 6

M O N TA N A & I D A H O C D C H A S S A I D Y E S TO OV E R

I N L O A N S

610TO OV E R

V E RY D E T E R M I N E D B U S I N E S S O W N E R S

4,400C O N T R I B U T I N G TO OV E R

J O B S C R E AT E D O R R E TA I N E D

An electrician upgrades services at Trailer Terrace.

L O A N F U N D C O N T R I B U TO R S A N D I N V E S TO R S

American BankAnonymousBank of America Bank of MontanaBig Sky Western BankBruce and Nancy BugbeeCalvert Social Investment FoundationCharles Engelhard FoundationClients of Trillium Asset Management CorporationColleen and Jeff RudioDatsopoulos, MacDonald & Lind, PCDavid and Sandra Burner Charitable TrustFarmers State BankFirst Bank of Montana First Interstate BankFirst Interstate Bank FoundationFirst Security Bank of MissoulaGlacier BankGoldman Sachs Urban Investment GroupHarry and Cindy PoettHearst FoundationsHigh Stakes FoundationJennifer KnoetgenM. J. Murdock Charitable TrustMacArthur, Means & Wells ArchitectsMarian CoulterMary StranahanMax and Betty Swanson FoundationMontana Board of InvestmentsMontana Community Finance CorporationMontana Department of Commerce, MicroBusiness Finance ProgramMontana Department of Labor and Industry, Incumbent Worker Training

Montana State Small Business Credit InitiativeNick and Mary BabsonNicole Hagerman Miller and Drew MillerOpportunity Finance NetworkSandra Roe in memory of John RoeSisters of Saint DominicStockman BankStranahan FoundationSusan Fenton Kubiak and Mark KubiakThe Domestic and Foreign Missionary Society of the Protestant Episcopal ChurchTim and Stephanie ChristensenTina BegayTom and Mary McMakinTreasure State BankU.S. Administration for Children and Families, Community Economic Development ProgramUS Bancorp CDCUS Bank US Bank Foundation U.S. Small Business Administration Microloan ProgramU.S. Small Business Administration, Program for Investment in Micro-entrepreneurs United States Department of Agriculture, Rural Development Intermediary Relending ProgramUnited States Department of Agriculture, Rural Micro Assistance ProgramUnited States Department of Commerce, Economic Development AdministrationUnited States Department of the Treasury, Community Development Financial Institutions FundValley Bank of HelenaWayne Chamberlain and Betsy GrimleyWells Fargo Western Security Bank

M O N TA N A & I D A H O C D C E X T E R N A L L O A N C O M M I T T E E

Heidi DeArment, Montana & Idaho CDCJulie Ehlers, Montana & Idaho CDCRick Eneas, Montana & Idaho CDCPri Fernando, US BankSarah Fitzgerald, Montana & Idaho CDC Dave Glaser, Montana & Idaho CDCKori Green, First Security Bank of MissoulaSpider McKnight, Six Pony HitchTom McMakin, Profitable Ideas Exchange

M O N TA N A & I D A H O C D C B O A R D O F D I R EC TO R S

Tom McMakin, Chairperson, Chief Executive Officer, Profitable Ideas ExchangeNicole Hagerman Miller, Vice Chairperson, Managing Director, Biomimicry 3.8; Co-Owner, House Design StudioDave Burner, Secretary, Chairman and CEO, Retired, BFGoodrich CompanyCraig Birgenheier, Treasurer, CFO, Big Sky BrewingTina Begay, Director, Business Instructor, Salish Kootenai College; Interim Director, National American Indian Business LeadersBruce Bugbee, Director, Founder and President, American Public Land Exchange CompanyPri Fernando, Director, Vice President, US BankDave Glaser, Director, President, Montana & Idaho CDCKori Green, Director, Commercial Loan Officer, First Security Bank of MissoulaMinette Jessup, Director, Principal, Retired, Vanguard GroupSara Smith, Director, CFO, ALPS Corporation

2120

Congratulations to the 33 loan clients who paid off their loans to us in 2015.

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N E W M A R K E T S TA X C R E D I T A DV I S O RY B O A R D

Terry Butikofer, The Development Company, IDJanice Copeland, Headwaters RC&D, MTMark Dahlquist, NeighborWorks Pocatello, IDAndrea Davis, Homeword, MTBreanne Durham, Beautiful Downtown Lewiston, IDSusan Hay Patrick, United Way of Missoula County, MTChris Naumann, Downtown Bozeman Partnership, MTCory Phelps, Idaho Housing and Finance Association (IHFA), IDTracy Reich, Helena Business Improvement District, MTSheila Rice, NeighborWorks Montana, MTJan Rogers, Regional Economic Development for Eastern Idaho (REDI), IDJim Ronquillo, Billings BURD District, MTDavid Sims, Boundary Economic Development Council, IDCindy Smith, Bullhook Community Health Center, MTMary Stranahan, High Stakes Foundation, MTLillian Sunwall, Great Falls Development Authority, MTCindy Williams, Idaho Nevada CDFI, IDJennifer Yost, City of Nampa, ID

M O N TA N A & I D A H O C D C S TA F F

Mary Anderson, Client Intake SpecialistJordan Backstrom, Housing Fellow Betsy Beauvais, Director of LendingMelanie Calahan, Director of Sales and OutreachHeidi DeArment, Chief Financial OfficerJulie Ehlers, Director of Client RelationsRick Eneas, ControllerSarah Fitzgerald, NMTC DirectorKeegan Flaherty, Manager of StrategyDave Glaser, Chief Executive OfficerRachel Golden, Lead AccountantCatherine Jones, Director of DevelopmentCloe Klippenstein, Credit AnalystAlex Markle, Marketing InternJulia Neaves, Impacts FellowJen Nord, Senior Credit AnalystErin Nostrant, Client Intake SpecialistTana Paul, Loan Asset ManagerMegan Purdy, Administrative Assistant Anna Reid, Loan Closing CoordinatorSarah Shepard, Annual Fund DirectorBrock Stetzner, Finance Intern Mike Trueba, Business Development ManagerKeegan Witt, Manager of ComplianceBen Wright, Director of Client ServicesJessica Zieg, Manager of HR and Administration

P H OTO G R A P H Y

Tom Robertson Photography (tomrobertsonphoto.com)

D E S I G N

Six Pony Hitch (sixponyhitch.com)

MONTANA & IDAHO CDC

Montana & Idaho CDC is an equal opportunity provider and employer. Printed on recycled paper using eco-friendly inks. FSC certified.

MT 406.728.9234 ID 208.336.6465 E info@mtcdc.org

229 E. Main St.Missoula, MT 59802

222 E. Main St., Suite 202 Bozeman, MT 59715

1161 W. River St., Suite 220 Boise, ID 83702

Construction at the new Cameron Family Center.

mtcdc.org