LCMS Convention Workbook St. Louis, Missouri — 2013, Page 124

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124

SYNOD REPORTS

licensing requirements. LCEF now offers rostered church worker
loans in the states where a majority of the church workers reside.
2010–2011

A tough economic environment continued into fiscal year 2011,
and LCEF continued to assist many congregations, schools and universities, missions, and other LCMS organizations with their loan,
investment, and support-service needs.
Total assets as of June 30, 2011, were $1.84 billion, with $1.60 billion in investor payables and $162.4 million in net assets. With strong
net interest income during fiscal 2011, LCEF added to the loan-loss
reserves for delinquent and impaired loans, and lower valuations of
LCEF’s real estate portfolio, a result of the continuing real estate market decline. Loans receivables totaled $1.50 billion.
LCEF’s interest rates continued to compare favorably with rates
at other financial institutions, and LCEF investors remained loyal
and committed to supporting LCMS ministries and church workers.
In many congregations, LCEF volunteers advocating the mission of
LCEF helped to retain investors.
Just as other organizations and businesses made structural changes
to be more responsive to customer needs, LCEF did as well. The
national office initiated a realignment in fiscal 2011 to improve efficiency and effectiveness.
An area added in fiscal 2010, the Loan Resolution Group,
diligently worked with ministries challenged by the economic downturn, seeking options that provided ministries time to address the
challenges, while continuing to meet obligations and financial commitments. This group has received high marks from ministries they
support. In addition, district staff members strived to be the best financial resources to ministries at the local level. At fiscal 2011 year-end,
90-day delinquencies totaled just 3.9% of the loan portfolio, down
from the previous year’s mark of 7.2%.
High energy costs caused many ministries to seek solutions that
put more dollars toward outreach and programs rather than building
operating costs. LCEF’s Laborers For Christ members assisted in a
variety of ways, including replacing windows and doors, installing
exterior siding that increases the level of insulation from the elements, and changing lighting fixtures to meet government standards
for more efficient bulbs and ballasts. Laborers teams have always been
conscious of these considerations, but many congregations, too, are
more mindful and are actively seeking the expertise and experience of
Laborers and members of LCEF’s Architectural Advisory Committee.
2011–2012

Economic recovery—globally and nationally—was slow to gain
traction and continued to impact ministries. LCEF saw many ministries seeking the best way to embrace and rejoice in their mission,
while adapting to a changing environment. We continued to shape our
offerings to be the best possible resource for them.
Our district and ministry support areas were reorganized to be
more holistic, assessing a ministry’s focus and helping it clarify its
purpose before aligning resources and setting plans into action. We
saw a steady increase in ministries seeking a joyful stewardship experience with the assistance of our Capital Funding Services consultants.
These campaigns were blessed by an outpouring of faith and reflections of God’s gifts to us. While some were for debt reduction, many
had a mission component to them. For that we thank God and His
people determined to share the Gospel.
As of June 30, 2012, LCEF’s total assets were $1.82 billion, with
$1.59 billion in investor payables and $1.42 billion in loans receivable. Delinquencies in excess of 90 days totaled just 2.40% of the
loan portfolio, once again illustrating that our loan restructures and
concentrated work with challenged ministries resulted in positive
results for ministry.
2013 Convention Workbook

During this timeframe, LCEF hired a Chief Credit Officer and
established a national ministry loan area to focus on Recognized
Service Organizations, an area previously underserved by LCEF. In
addition, LCEF implemented procedures to more effectively market
LCEF’s loan products to LCMS ministries. The implementation of a
new loan underwriting system and the cross-training of all loan staff
members improved the services of our loan area.
LCEF experienced a strong level of net income, totaling $10.8
million compared to $3.1 million as of June 30, 2011. This was the
result of lower levels of required reserves, improved market value
appreciation on LCEF’s investment portfolio, increased operating efficiencies, and a significant level of gift and bequest income. The base
capital-to-asset ratio (which excludes loan loss reserves) improved
to 9.41%, compared to 8.85% as of June 30, 2011. Inclusive of loan
loss reserves, the capital ratio reached 11.32%.
Recognizing that LCEF must reach out to more LCMS members
to ensure continued strong investment at all age levels, LCEF has
planned and executed several strategies and programs.
One of the most exciting programs initiated in fiscal 2012 was
the National Student Marketing Competition. Open to Concordia
University students, all of the colleges and universities were invited
to assemble a team of undergraduate students under the guidance of
a faculty advisor to research and develop a campaign to attract new
and younger investors to LCEF. The inaugural event culminated in
presentations by four teams in April 2012 at the LCMS International
Center in St. Louis. The competition provided an opportunity to connect with valued ministry partners, gain knowledge that could further
our mission, and give practical experience to business, marketing, and
advertising students.
The 2013 competition presentations were April 11–13, again at
the International Center. Those participating included Concordia
University, Irvine, California; Concordia University Chicago, River
Forest, Illinois; Concordia University, St. Paul, Minnesota; Concordia
College—New York, Bronxville, New York; Concordia University
Texas, Austin, Texas; and Concordia University Wisconsin, Mequon,
Wisconsin.
Recognizing further changes in the housing loan market and the
unique needs of pastors and rostered church workers (RCWs), LCEF
initiated a new RCW residential loan with a 30-year fixed-rate mortgage. This Well-Qualified Buyer Loan is available for the purchase of
a home, not for refinances. This complements our other variable-rate
RCW loan products with low down payments and no private mortgage insurance (PMI) requirements, giving church workers choices
that best suit their needs and situations.
LCEF’s cost of funds decreased to a historical low of 2.375%,
which allowed LCEF the opportunity to provide loans at competitively low rates. In addition, congregations with new LCEF loans
can reduce their interest rate further if a certain percentage of members invest. We call this partnership program Shared Blessings, which
helps ensure LCEF reaches new investors, investments are adequate to
fund loan needs, and costs are kept low for the congregation so more
dollars are available for ministry.
During fiscal 2011, the Committee on Constitutional Matters
(CCM) reviewed LCEF’s articles of incorporation and bylaws for
compliance with the Bylaws of the Synod. As LCEF’s articles of
incorporation already state that LCEF is subject to the Bylaws of the
Synod and the recommended changes clarified references and provisions to which LCEF already adhered, LCEF recommended changes
during its November 2011 annual meeting held in conjunction with
LCEF’s Fall Leadership Conference.