When leadership matters most
On this day in 1999, a political drama would debut on NBC that would later rank among the best tv series of all time and go on to win 26 Emmy’s. Our own Chair Myers was a consultant to The West Wing and an inspiration for the Press Secretary role played by Allison Janney. While fictional, this drama was hailed for providing a realistic depiction of an idealistic administration making difficult and sometimes unpopular decisions, often in the face of misinformation.
Times of crisis require bold leaders to take unpopular actions while adroitly communicating over the increasing flood of misinformation to reassure and lead citizens to a better outcome.
Our Governor overwhelmingly prevailed in the recall election and overcame the false narrative that he was principally responsible for CA’s intractable woes such as crime, homelessness, inequality and even natural disasters. Our President is currently mired in a war to end the pandemic against a massive misinformation campaign regarding the dangers of vaccines and benefits of self-prescribed remedies.
Appropriately, we will hear today from the California Science Center, a key institution with a focus on making science-based learning widely accessible to all segments of society.
Today marks the anniversary of the final executions of the convicted “witches” from the Salem witch trials in 1692. Misinformation is clearly not new, but this was one of most infamous occasions of its use leading to mass hysteria amidst a failure of public leadership.
On this same day in 1862, another individual demonstrated heroic leadership amidst a crisis. Abraham Lincoln issued one of the most consequential executive orders in our nation’s history. The Emancipation Proclamation declared all persons held as slaves to be forever free, ushering a new era of life, liberty and the pursuit of happiness to over 3.5 million Americans. A single virtuous action by a leader undaunted by fear of near-term consequences, costing his party in the midterm election and later his own life, but setting free the soul of the nation to pursue a better future.
Business Announcements:
1- Bills that affect IBank which passed in the recent legislative cycle and are awaiting the Governor’s signature:
- AB 1297 would authorize IBank to finance facilities that include elements of housing.
- AB 1036 authorizes and creates two new manufacturing financing programs to be administered by IBank.
- SB 83 would develop the Sea Level Rise Revolving Loan Program for providing loans to local jurisdictions to purchase vulnerable coastal properties.
2- As we compile our draft Annual Reports, let me share some preliminary highlights of FY2020-21:
Last year was one for the ages, for CA, America and the world. Yesterday, the UN secretary general referred to COVID and climate change as the greatest cascade of crises in our lifetimes. Despite the largest pandemic, greatest economic turmoil, and most widespread social unrest in our lifetimes, IBank continued to focus on its work, never missing a day and never missing a beat.
From a program and operating standpoint:
- The Bond Program produced its largest activity of the last 15 years, issuing $2.2B in bonds, including a record $1B to nonprofits.
- In addition, we recapitalized our own balance sheet via a $324M bond offering with less restricted taxable funds and a more flexible indenture to better service our customers while saving $19M and reducing our true interest cost by over 1%.
- The Infrastructure State Revolving Fund closed $29M in loans and approved an additional $70M for critical municipal projects. Despite the severity of the economic dislocation, our portfolio of over 100 municipal loans did not experience a single default or even a late payment – a testament to our AAA credit rating.
- Our Small Business Finance Center was a focal point, given the catastrophic effects of the pandemic on small business activities. During the fiscal year, the SBFC completed over 2,000 small business, micro business and disaster relief loan guarantees supporting over $240M of loans and creating or retaining nearly 18,000 jobs.
- Immediately after the onset of the pandemic, we launched a COVID microloan disaster guarantee initiative that continues to achieve its goal of reaching the most underserved populations. These businesses average 5 employees and 87% of these guarantees went to businesses owned by women or minorities or located in LMI tracts.
- When we learned that the lending community serving disadvantaged populations was short of capital, we coalesced a public private partnership and provided the anchor investment for the launch of the CA Rebuilding Fund.
- In addition to the economic crisis, we made meaningful steps to address the climate crisis. We formally launched the Climate Catalyst Fund and recently received legislative approval for its initial funding.
- We also executed our initial ClimateTech transactions, one for an innovative microgrid and the other for a first ever hydrogen ferry that will soon launch to provide service between San Francisco and Oakland.
- We could not have achieved these milestones without the support of the Governor and the Legislature. Together, they provided us $50M of emergency funds last April for the COVID-19 microloan guarantees, $50M in last year’s budget to the SBFC to recapitalize the SBLGP and DRLGP along with $37.5M for the Rebuilding Fund. An additional $70M was appropriated this year for the same purposes.
- We also updated the IBank Act to merge our bond cap to $15B, expanding by three-fold IBank’s ability to finance public development facilities.
- The US Treasury’s SSBCI allocated $895M to CA for small business programs that will be managed jointly by IBank and the STO.
- We’ve made strides to modernize and digitize and continue to find new ways to communicate and collaborate to provide top notch customer service to our communities. We launched a new website adding a language converter to translate in over 100 languages, completed both a major backend and front-end IT transition, initiated activity across the major social media platforms, and are currently installing a Salesforce CRM.
- Our Comprehensive Annual Financial Report will show strong results:
- Highest revenue year since our initial capitalization
- Highest loan income year in our history
- Significant increases in our net spread and operating income following several years of increasing losses
- We have substantially increased our balance sheet, and upon receipt of some of the funds mentioned above, will exceed $1B in assets for the first time in our history.
All of this was accomplished under a remote work environment by our small but dedicated team. During FY2021 and in the short time thereafter, IBank has filled out its executive team with outstanding talent:
- Clint Kellum as our Chief Deputy and Chief Operating Officer
- Ross Culverwell as our Chief Credit Officer
- Karen Naungayan as our Deputy Director of External Affairs
- Megan Hodapp as our head of the SBFC
- Dan Adler as a climate advisor spearheading the Climate Catalyst launch
- Justin Cohen-Shapiro to lead our prospective launch of a state VC program
FY2021 was the heart of the global crisis. IBank stepped up and our programmatic and financial results would indicate the strongest year in our 27-year history. It could not have been possible without the perseverance and effort of each and every member of our staff, along with the guidance of this board and the support of the Governor and the Legislature. I would like to thank all of you.
Of course, we all recognize that we still have a long way to go to meet the needs of the communities of CA. We’re not yet out of the woods of the COVID crisis and the climate crisis will require all of us to muster whatever effort we have. However, IBank has very significant plans for the year ahead, and you can rest assured that we will continue to rise to the occasion in the years to come.
