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Craft3 in 2017 annual report

President’s Message

For Craft3, 2017 is a story of completion.

We completed the regional build-out envisioned in our 2012 Strategic Plan, locating our eighth office in Klamath Falls, Ore. We resituated our Seattle office in the heart of the Chinatown-International District and our Lower Columbia office in the heart of Astoria. We completed a redesign of our lending departments to better serve our customers and increase capacity. And we completed a new strategic plan that positions us on the leading edge of innovation in community development finance. These significant accomplishments were achieved by a deeply talented team of professionals that show up to work every day to make their communities better.

With all the changes and work listed above I’m also happy to report that our balance sheet is strong. We added new investors and our $20 million private placement offering is nearly fully subscribed. Our lenders deployed more than $48 million. Our default rate remained low. And we laid the groundwork to further expand our impact in 2018.

Our new strategic plan distills our mission of regional resilience into clear strategies that position Craft3 for growth and deeper impact. It calls for a structured innovation and evaluation process that will lead us to highly-strategic engagement in places and sectors, delivering impactful investments across the region and in key sectors: food and agriculture, community facilities and clean energy. Our 2017 Annual Report begins a multi-year series that will profile our work in each of those sectors — starting with clean energy.

We look forward to working with you this year to create a more resilient Pacific Northwest. Whether it be as a borrower, investor, policymaker or community member, our team is ready to find the right terms of engagement and create impactful investments of the highest caliber.

Come join us,

Adam Zimmerman, President & CEO

2017 Loan Production

Our Energy Story

It starts with a core belief: a strong clean energy ecosystem is critical for our region’s resilience. And that doesn’t just mean generating renewable energy from the sun, the wind or biomass. It means saving energy and investing in innovative clean tech, as well.

Since our founding, we’ve invested more than $50 million into clean energy projects in the Northwest. Over the next five years, we intend to increase our strategic engagement in the sector by replicating past successes, deepening roots with industry partners, and deploying another $50 million.

In this Annual Report, you’ll read about borrowers that made a commitment to write their own energy story. We hope you’re as inspired by them as we are.

Energy Wise

Albany, Oregon

After more than a decade in commercial lighting efficiency, Energy Wise began developing small-scale solar projects in 2009. Since then, owners Peter Greenberg and Rick Post have grown the business into one of the largest owners of distributed solar systems in Oregon. To date, Energy Wise has completed more than 160 installations, helping to stabilize energy costs for nonprofits, schools, tribes and ranches across the state. Craft3 started working with Energy Wise in 2013, providing installation and term loans to finance the construction of over 4.5 megawatts in new solar capacity. It’s just one way we’re supporting the growth of small-scale renewable energy in the Northwest.

Coastal Energy Project

Grayland, Washington

Coastal Community Action Program provides housing, energy assistance and emergency social services to low-income families in Grays Harbor and Pacific Counties. When they needed financing to install four 1.5 megawatt wind turbines, CEO Craig Dublanko called Craft3 to see if we could help. The rest, as they say, is history. Watch the video below for the full story.

High Desert Biomass

Burns, Oregon

“In Harney County, we depend on each other and work together to solve problems. Five years ago, the County and School District in Burns had a big problem: inadequate heating systems that were failing. In response, we created an innovative cooperative to provide heat to the community, fueled by debris from our local forests,” said Lori Cheek, High Desert Biomass Coop. “With the help of Craft3 and our other partners, we’re proud to ensure the long-term community ownership of this biomass district-heating system.”

Our Impact.

Since 1994, we have been investing in communities across Oregon and Washington. We are pleased to share our impact during 2017.

Allumia

Seattle, Washington

“As an early-stage company, securing revolving construction financing was a complex and challenging hurdle to overcome," said Aaron Block, Allumia. "In the time since we received the loan through Craft3, Allumia has funded and developed efficiency projects that will save Washington residents and businesses over 4.5 gigawatt hours of electricity each year.”

Frank and Shellie

Aurora, Oregon

When Frank and Shellie purchased their 1901 Aurora home, it was in total disrepair. So, they started from scratch, stripping the house down to the studs and remodeling the entire structure. By the time they got to the inoperative baseboard heaters and old wood stove, the remodel project was $70,000 over budget – and they simply couldn’t afford to put another $8,400 on their credit card for a new heating system.

As they were weighing their options, Oregon Ductless told them about Energy Trust of Oregon’s Heat Pump Upgrade program, with financing through Craft3 and on-bill repayment through their PGE utility bill. The simple, no-stress process was a pleasant change after all the problems Frank and Shellie experienced with the house. We’re proud to have them join the 3,868 other families we’ve helped take control of their energy use since launching our Home Energy Loan in 2009.

Our Funders

Institutional Investors in 2017

Wealth Managers of Individual Investors in 2017

Capitalization by Investor Type

“Craft3’s partnership with the State of Washington Clean Energy Fund is a huge benefit for the growing clean energy industry here in the Northwest. Access to capital is critical for entrepreneurs, and Craft3 has demonstrated again and again that it can finance innovative projects that create a more resilient economy and environment. I’m glad they are a friend of the CleanTech Alliance.” - J. Thomas Ranken, President & CEO of the CleanTech Alliance
Zillah Lakes Inn, Zillah, Washington

Financial Results

Consolidated Statement of Activities*

Consolidated Statement of Financial Position*

*The Consolidated Statement of Financial Position and Consolidated Statement of Activities presented were audited by Peterson Sullivan LLP. These have been derived from the complete financial statements and are available online at www.craft3.org/results.

Artisan Electric, Seattle, Washington

Our sincere appreciation and thanks to:

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