2021 BCLC Annual Report

THE ARENA.

“IT IS NOT THE CRITIC WHO COUNTS; NOT THE MAN WHO POINTS OUT HOW THE STRONG MAN STUMBLES, OR WHERE THE DOER OF DEEDS COULD HAVE DONE THEM BETTER.

Dear Friends,

The Arena

The most famous arena ever built in the Roman Empire was the Colosseum. After eight years of construction, the 50,000-seat arena was completed in 80 A.D. and opened with great fanfare. For approximately four centuries, the arena hosted gladiator combats and public entertainment events. It weathered storms and earthquakes, slowly deteriorating until it was eventually abandoned for use.

Physical arenas for boxing matches, rodeos, and other public events are temporarily entertaining, but like the Roman Colosseum, they are not eternal. Only God’s Kingdom is forever. God gives believers arenas in which we are called to “fight the good fight of faith” (1 Timothy 6:12). The Baptist Church Loan Corporation (BCLC) strives to fight the good fight in its designated arena by equipping churches and, thereby, assisting Kingdom growth each and every day.

Domingo

BCLC has been blessed through the years because God has placed partners in our God-given arenas to help us. One such partner was Domingo, a man living in the Texas Rio Grande Valley who provided assistance to us through his local Baptist association. Domingo provided us with knowledge of the churches and the needs in the Rio Grande Valley. He consistently introduced us to churches in need of financial assistance. Through our partnership with Domingo, BCLC was able to serve many churches in South Texas. Domingo was successful because he was willing to step into the arena daily in order to grow the local church and the Kingdom of God.

BCLC believes that God will continue to provide partners like Domingo so that we can do our part to grow the Kingdom by providing financial assistance to churches in other arenas across the country.

BCLC

The most popular portion of one of Theodore Roosevelt’s most well-known speeches (“The Man in the Arena”) appears throughout our 2021 Annual Report. The speech focuses on those who battle daily, on those who are actually in the arena striving for a worthy cause.

BCLC believes that our Lord and Savior, Jesus Christ, gives all of us access to arenas in which we can have eternal impact. Some days we are successful with our efforts to fight the good fight of faith. Other days, our lack of faith discourages our efforts. The most important thing is that we remain strong, stay in the arena and continue the good fight of faith.

Thank you to the many men and women who have volunteered their time and skills to serve on the BCLC Board of Directors.

Gerald R. James, Jr. President/CEO

THE ARENA: WHERE FAITH IS TESTED FOR THE GLORY OF THE KINGDOM.

The arena is a place of strife and striving where the courageous contend for a worthy cause. It is where strength is tested, trials are withstood, and champions are made. When COVID-19 closed our churches and afflicted our communities, an arena no less real than the gladiator’s coliseum or the boxer’s ring was established in our midst. It fell upon each church whether it would enter the fight for God’s Kingdom or do nothing.

Many entered and dared greatly against the invisible opponent that threatened the faith of believers, separating communities and stagnating worship. In response, brave churches spread hope, brought communities together and reinvigorated worship in new ways. Though they were knocked down time and again, pastors and congregants got back up with bold counterpunches. We’ve been inspired to see how many of our churches made a real difference in their communities this year.

After vying with COVID for a full 12 rounds and finally beating back the virus, we are all left with the challenge of reattracting church members and making them feel comfortable in our spaces. Churches are making many adjustments. We are seeing more projects to widen entryways, create open space for worship, and reconfigure ingresses and egresses to flow better so people don’t have to pass each other or touch the same surfaces.

When it’s time to make adjustments to your church, whether it be so your congregation can worship without worry or expanding your facility to keep growing, BCLC is in your corner. We’re here with affordable loans and straightforward rates that will help you stay in the arena and triumph. And with our Next Step Partnership program, we can provide advice from specialists on the next best steps to repurpose your culture, strategy, or facilities.

We want to encourage and enable you to get back out there and keep up the good fight. Work hard to grow your congregation and serve your community. The cause is worthy and the reward is great.

BCLC exists to assist churches in their efforts to spread the gospel by providing affordable real estate related loans.

In fulfilling this mission, our priorities are to:

Our Mission. Our Leadership.

• Focus on the long term spiritual and financial health of each church we consult.

• Provide our churches with straightforward terms, rate options, and underwriting guidelines.

• Serve as many churches as feasible, regardless of their size, longevity, or ethnicity.

board of directors

Jared Green BCLC, Chairman of the Board Tyler, Texas

Michael Mason Dallas, Texas

Lynne Meers Dallas, Texas

Ralph Ramsey Denton, Texas

Jan Cason Waco, Texas

Russell Shelton BCLC, Vice Chairman Orlando, Florida

Ryan Gibson Abilene, Texas

Philip Price Dallas, Texas

Bryan Rogers Richardson, Texas

corporate officers

Gerald James, Jr. President/CEO

Landon Yeager

Chief Financial Officer

Jamye Cappadonna

Dallas, Texas

Barbara Jane Kaplan

Dallas, Texas

Kelly McBrayer Richardson, Texas

Bob Gage Senior

Vice President

Marissa Kane

Corporate Secretary

THE CREDIT BELONGS

TO THE MAN WHO IS ACTUALLY IN THE ARENA, WHOSE FACE IS MARRED BY DUST AND SWEAT AND BLOOD; WHO STRIVES VALIANTLY;

WHO ERRS, WHO COMES SHORT AGAIN AND AGAIN, BECAUSE THERE IS NO EFFORT WITHOUT ERROR AND SHORTCOMING; BUT WHO DOES ACTUALLY STRIVE TO DO THE DEEDS;

If anything would cause the downfall of a young church plant, directives from government and health authorities to stop all gatherings would be it – but not for Rio Grande Bible Church. In fact, the pandemic only strengthened this tight-knit community’s calling to serve one another.

Pastor Castillo knew that maintaining communication would be the key to holding the church together. He used all the technology at his disposal, including social media, Zoom, and the church’s mobile app to share Sunday services and discipleship classes. Whenever he heard that someone in the community was sick or lost their job, he made sure the church reached out to offer prayers and support. But their pastoral care didn’t end there.

Rio Grande Bible Church’s initiative to live the Gospel brought them beyond their congregation, even beyond their country. They hosted prayer meetings in hospital parking lots, delivered groceries to the community and supported missionaries and pastors in Cuba. They never stopped ministering or sharing the Word of God. Growth naturally followed this strategy of good communication and fervent service. When it was time to reopen, people were eager to return, because their faith had come alive.

BCLC is privileged to help this church grow by financing the purchase of a two-acre property where they plan to remodel a home for small group meetings and build church facilities. The greatest lesson Rio Grande Bible Church has to teach is that staying in the arena bears great fruit – new ways to reach people with technology, a revitalized congregation and a reawakened sense of purpose. We applaud them for it, though they give all credit and glory to God, and assure them of our continued prayers and support for the work ahead.

“I thank God for BCLC because they helped us confirm God’s will for our church and the plans the Lord has ahead of us. They supported and guided us throughout the whole process,” said Pastor Castillo.

“Our greatest encouragement came when we saw new people coming and surrendering their lives to Christ. That’s when I knew we were doing the Lord’s will and needed to keep fighting the pandemic and serving our church and the community.”

McAllen, Texas Pastor Victor Castillo

Redlands, California

Pastor Rob Futral

Pathway Church’s experience in the arena over the last year was not one of flawless composure or having it all figured out. But they stayed in the fight, learning as they went and getting up when they were knocked down. True to their name, Pathway stepped up several times to clear a way for their community to move forward from the pandemic through selfless giving and rededication to Gospel principles.

They faced the challenge of updating technology to host quality live stream weekly worship, the struggle of adding a parking lot worship experience despite poor air quality from fires, and the crucible of 90 percent of their staff contracting COVID in a two-month span – all while trying to engage members and care for a community polarized by political tension. These challenges might have gotten the better of a church that bows out when the going gets tough. But Pathway pushed ahead.

They started with service – publishing daily devotionals, distributing food boxes, and hosting creative drivethroughs to support the isolated elderly in Redlands. Church members also stepped up, setting a new record for mission giving. Twelve-year-old member Brody Brewer took it upon himself to raise hundreds of dollars for the Lottie Moon Christmas Offering by selling axes he made himself!

Several years ago, BCLC helped Pathway purchase nearby apartments, which they used to house missionaries delayed stateside due to the pandemic. The space will continue to be a blessing to the community and could possibly become a church plant residency in the future. It’s been inspiring to watch Pathway stay in the fight and stay focused on mission as they find creative ways to build the Kingdom and praise the Lord in every circumstance.

“BCLC checked on us and cared throughout the pandemic. We are investing more support in missionaries thanks to the lower interest rate they secured for us,” said Lead Pastor Futral.

“Keeping your eyes on the Lord during the storm is better than knowing what to do.”

GRACE POINT CHURCH

San Antonio, Texas Executive Pastor Emeritus Jamye Cappadonna

Being in a church’s corner doesn’t just mean we coach and encourage from a distance. It means we join you as an ally in the arena. Grace Point Church is a perfect example of this.

Established as the second campus of Castle Hills First Baptist, the mission that would become Grace Point took on a life of its own. Engaging in a more contemporary worship and lifestyle evangelism, they became their own church, which meant assuming the debt for their facilities and 27 acres. Having borrowed from a private lender, church leadership was always anxious whether the lender would renew their terms or not.

“BCLC appealed to us right away. We met with Bob Gage and I knew we had a like-minded partner who wanted to fuel the work we were doing and provide favorable rates. The security of having BCLC to rely on every year was a huge relief,” said Jamye Cappadonna.

When the growing westside of San Antonio needed a contemporary church, Grace Point seized the opportunity by purchasing a seven-acre campus with our help in 2014. Two years later, their original church fell victim to a fire and we were right there to help them unravel the financial entanglements between city, construction and insurance entities.

“Bob visited us in-person several times to help us through this rough time. If we had been working with just a bank, everything would have been much more difficult. Having a partner in prayer and encouragement meant so much to us.”

After 25 years of ministry, Jamye retired as executive pastor in May 2020 to spend more time with her grandchildren. But Grace Point stayed active in the arena. Their service culminated in Easter 2021 when Grace Point volunteers served meals to 2,000 families in partnership with the San Antonio Food Bank. That spirit of service lives on in Jamye, now a board member of BCLC, and in Grace Point through their robust local and global missions, life groups and ministries.

“If we had been working with just a bank, everything would have been much more difficult. Having a partner in prayer and encouragement meant so much to us.”

2021 FINANCIAL HIGHLIGHTS

Church Loan Ministry

Amidst the uncertainty of fiscal year 2021, BCLC stood alongside the Church in the arena, approving $38 million in loans to congregations throughout the United States.

Financial Strength

Over the last three years, BCLC’s liquidity has increased over seven times. BCLC is equipped and ready to deploy its resources to assist churches in their efforts to advance the Kingdom.

*Cash & cash equivalents + accrued interest receivable / total assets

MANAGEMENT‘S DISCUSSION OF FINANCIAL ACTIVITIES

Fiscal Year Ended June 30, 2021 As Compared To Fiscal Year Ended June 30, 2020

During fiscal year ended June 30, 2021, interest revenues decreased 16.27%, or $1,301,073 over fiscal year ended June 30, 2020. Church mortgage loans decreased approximately 14% for the same period. The weighted average return on church mortgage loans outstanding decreased at fiscal year ended 2021 to 4.13%, compared to 4.38% at fiscal year ended 2020.

As a result of excess principal reduction on church mortgage loans, BCLC reduced its bank debt by $18,690,433 over fiscal year 2021. The decrease in borrowed funds resulted in a decrease in interest expense of 28.66%, or $786,543. Total outstanding bank debt was $44,623,218 for fiscal year ended 2021, compared to $63,313,651 at June 30, 2020.

Lower outstanding loan volume and a decrease in market interest rates contributed to a lower yield on earning assets, 4.08% for fiscal year 2021, compared to 4.58% for fiscal year 2020. Lower outstanding bank debt contributed to a lower cost of funding earning assets, 1.19% for fiscal 2021, compared to 1.58% for fiscal 2020. The decrease in yield on earning assets exceeded the decrease in the cost of funding earning assets, resulting in a slightly lower net interest margin for the fiscal year 2021, 2.89%, compared to 3.01% for fiscal year 2020.

BCLC originated 29 church mortgage loans, in the amount of $21,390,406 during fiscal year ended 2021, compared to 33 church mortgage loans, in the amount of $20,373,918 during fiscal year ended 2020. The average dollar amount of each new church mortgage loan originated and closed during fiscal year ended 2021 increased from $617,391 per loan to $737,600.

BCLC had 0.28% past due loans for fiscal year ended June 30, 2021, and 0.29% for fiscal year ended June 30, 2020.

At fiscal year ended June 30, 2021, net earnings increased $48,074 to $2,646,898, compared to $2,598,824 at fiscal year ended June 30, 2020. Due to stability of the loan portfolio, BCLC did not make provisions for loan losses during fiscal year ended 2021. The lack of provision for loan losses, along with the decrease in interest expense of $786,692, were the primary factors that led to BCLC’s increase in net earnings for fiscal year ended June 30, 2021. Operating expenses remained relatively flat for fiscal year ended June 30, 2021, decreasing approximately $74,000 to $2,094,933.

Fiscal Year Ended June 30, 2020 As Compared To Fiscal Year Ended June 30, 2019

During fiscal year ended June 30, 2020, interest revenues increased 4.54%, or approximately $346,000, over fiscal year ended June 30, 2019. Church mortgage loans decreased approximately 3.27% for the same period. The weighted average return on church mortgage loans outstanding decreased from 4.59% at fiscal year ended 2019 to 4.38% at fiscal year ended 2020.

BCLC increased its bank debt by $10,000,000 at the beginning of fiscal year ended June 30, 2020 to meet an increase in loan demand. The increase in borrowing resulted in an increase in interest expense of 10.11%, or approximately $252,000. BCLC used excess cash throughout the year to reduce bank debt, resulting in a net decrease of approximately $511,000, bringing total outstanding bank debt to $63,313,651 for fiscal year ended June 30, 2020, compared to $63,824,495 at June 30, 2019.

The increase in interest expense was offset by an increase in yield on earning assets of 4.45% for fiscal year ended June 30, 2020, compared to 4.32% for fiscal year ended June 30, 2019. The higher yield on earning assets contributed to BCLC’s improved net interest margin of 3.06% at fiscal year ended June 30, 2020, compared to 2.95% for fiscal year ended June 30, 2019.

BCLC originated 33 church mortgage loans, in the amount of $20,373,918 during fiscal year ended 2020, compared to 36 church mortgage loans, in the amount of $20,808,115 during fiscal year ended 2019. The average dollar amount of each new church mortgage loan originated and closed during fiscal year ended 2020 increased from $578,003 to $617,391 per loan. Total church mortgage loans outstanding decreased from $173,745,236 at fiscal year ended June 30, 2019, to $168,060,469, at fiscal year ended June 30, 2020. BCLC had 0.29% past due loans for fiscal year ended June 30, 2020, and 0.00% for fiscal year ended June 30, 2019.

At fiscal year ended June 30, 2020, net earnings decreased $461,622 to $2,598,824, compared to $3,060,446 at fiscal year ended June 30, 2019. The decrease in net earnings for fiscal year ended June 30, 2020 was attributable to a $500,000 provision for loan losses. BCLC increased its allowance for loan loss reserve to mitigate potential risks associated with the Corona Virus Disease (COVID-19). Operating expenses remained relatively flat for fiscal year ended June 30, 2020, increasing approximately $60,000 over operating expense during fiscal year ended June 30, 2019.

WHO KNOWS GREAT ENTHUSIASMS, THE GREAT DEVOTIONS; WHO SPENDS HIMSELF IN A WORTHY CAUSE; WHO AT THE BEST KNOWS IN THE END THE TRIUMPH OF HIGH ACHIEVEMENT,

AND WHO AT THE WORST, IF HE FAILS, AT LEAST FAILS WHILE DARING GREATLY, SO THAT HIS PLACE SHALL NEVER BE WITH THOSE COLD AND TIMID SOULS WHO NEITHER KNOW VICTORY NOR DEFEAT.”

Theodore Roosevelt