Financial Strength

NCB Capital Impact Financial Strength
Year after Year

CARS™ Awards Highest Financial Strength & Impact Performance Ratings to
NCB Capital Impact in July 2009

Every day across the nation, a network of dedicated community development financial institutions (CDFIs) invests in underserved communities, making life better for millions of low and moderate income Americans. NCB Capital Impact works among these CDFIs, which are funded largely by investors ranging from banks to insurance companies to foundations.

With no uniform approach for comparing CDFIs, funders have relied on a myriad of criteria developed within each organization to decide which financial institutions deserve their dollars. The Opportunity Finance Network (OFN) stepped up to fill the void with the creation of the CDFI Assessment and Rating System (CARS™ ). CARS uses an underwriting approach similar to the CAMEL rating system used for large financial institutions, but pushes beyond merely assessing financial capacity to measuring impact and policy performance.

“Our strong CARS rating lets investors know that they can trust our programs to return their money and make a difference in the lives of low income people,” says Jeff Brenner, Chief Financial Officer of NCB Capital Impact. "We are especially pleased in this difficult economic environment, when many financial institutions are seeking government help, that NCB Capital Impact was recognized for its continued strong performance."

NCB Capital Impact creates lasting economic progress with an integrated combination of innovative community lending, expert technical assistance and effective policy development. NCB Capital Impact offers financing and technical assistance for communities most in need of four critical areas: affordable homeownership, long-term care and supports, health care facilities and charter schools facilities.

Rigorous process proves worthwhile

OFN performed NCB Capital Impact’s CARS review. The company rated 12 CDFIs in 2006, and a total of 28 between 2004-06, and 48 in 2007-08.

Two analysts for OFN gathered extensive data on NCB Capital Impact from May to June 2009. “We found the process rigorous, but we expected that,” Brenner reports. “In addition to responding to a several-page request for due diligence materials, the analysts were on-site for two days of interviews and presentations. We were later told that we were one of the most prepared and responsive CDFIs that OFN has analyzed.” As a large CDFI, NCB Capital Impact maintains strong systems and operating guidelines that enabled it to respond to the reviewer’s request for information, Brenner adds.

“While we were extremely pleased with our financial ratings, we were very gratified that our deep social impact was recognized by the increase in our rating from "AA" to "AAA,” Brenner commented.

What the ratings mean

OFN’s rating system emulates long-established systems established by Moody’s and Standard and Poors for analyzing securities and offering investors tools for evaluating investment opportunities. OFN updates the ratings annually based on current financial information, and conducts a new complete review every three years.

CARS™ Official Ratings Descriptions

Financial Strength and Performance Rating
“1” A CDFI in this group is sound in every respect. It exhibits exceptional financial strength, performance and risk management practices. Any weaknesses are minor and can be handled in a routine manner by the board of directors and management. This CDFI is resilient to significant changes in its operating environment. It generally has a score of 1 or 2 in all five of the FSP areas.

Impact Performance Rating
“AAA” A CDFI in this group has clear alignment of mission, strategies, activities, and data that guides its programs and planning. The CDFI presents data that clearly indicate that it is using its resources effectively to achieve positive impacts related to its mission. It has processes and systems that track output and outcome data on an ongoing basis, and it can provide data showing positive changes in the communities or populations being served. This CDFI uses its data on an ongoing basis to adjust strategies and activities in line with its desired impact.

Policy Plus
Policy change is an integral part of this CDFI’s strategies. The CDFI leads initiatives to change government policy to benefit the community development finance industry or disadvantaged people and communities. The CDFI can provide evidence of its leadership role in recent policy changes that produced benefits beyond additional resources for the CDFI itself, and management can clearly articulate the CDFI’s leadership role in current policy activities.

“The report will offer participating investors all the information they should need for evaluating an investment in NCB Capital Impact and reduce the amount of time both organizations spend on due diligence,” Brenner says. “We are an exceedingly complex organization, because unlike a standard bank we also provide technical assistance and policy development expertise. We are committed to the belief that it takes more than money to create a lasting economic impact in our communities. But we can’t do our job without capital, and the rating confirms for our investors that we are a premier organization in our industry.”

For more information about NCB Capital Impact, contact:
    Jeff Brenner at (703) 647-2306.

For more information about CARS, contact:
     Paige Chapel at (206) 328-6110 or pchapel@opportunityfinance.net.

NCB refers to National Consumer Cooperative Bank and its subsidiaries (primarily NCB, FSB and NCB Financial Advisors, Inc.), its affiliated non-profit corporation, NCB Capital Impact

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