2025 was a year of community impact at Three Roots Capital. We directly financed the creation or retention of 730 jobs and the construction or revitalization of more than 335,000 square feet of commercial, industrial, and retail space, in addition to 38 new units of affordable housing. 85% of our financings were allocated to low- and moderate-income areas, with nearly half of our transactions occurring in regions characterized by high poverty rates. 85% of our deals were in areas that are considered rural or non-metro. Approximately one-third of our deals were in areas classified as highly distressed by the Appalachian Regional Commission (ARC). In addition to capital, we contributed more than 200 hours of coaching and technical assistance to current and prospective borrowers and portfolio companies.
In aggregate, during 2025, 3Roots directly deployed $44.2 million through three dozen loans and investments, including investments in six start-up companies. To do this, we raised more than $35 million of new capital, increasing our total assets to approximately $225 million. We raised new capital from six bank partners, the LendTN Program at the Tennessee Department of Economic and Community Development, the U.S. Department of Agriculture, and the Department of Health and Human Services. Our 18 bank partners are critical sources of capital, fueling our ability to accomplish our community impact mission.
In addition to direct capital deployment, in the early part of 2025, 3Roots deployed $50 million of federal New Markets Tax Credits (NMTCs) to help finance the expansion of two major manufacturing businesses, one in Tennessee and one in southwest Virginia, thereby supporting the construction of 584,000 square feet of production space and the creation and retention of 386 jobs in distressed areas. Then, at the end of 2025, as an early Christmas present, we received an additional $85 million in NMTC allocations from the U.S. Department of the Treasury, which we are working to deploy in the first half of 2026.
Our economic impact has been felt in 27 counties, across the entire width and breadth of Tennessee, and into neighboring states, with a heavy concentration in East Tennessee. Our current portfolio includes a mix of placemaking commercial real estate projects, microloans, small business loans, affordable housing projects, and equity investments in companies and projects in Tennessee, Kentucky, and Virginia. We have financed for-profit and non-profit organizations, both independently and in collaboration with bank partners, and our direct financing transactions have ranged from $20 thousand to $21 million.
Also in 2025, we multiplied our efforts around affordable, accessible, high-quality childcare. Leveraging a small grant from the Department of Health and Human Services, 3Roots is convening community stakeholders to address the need to expand capacity and accessibility of affordable, quality childcare. 3Roots is investing in an effort to create a pool of capital and aggregate associated resources to address the lack of affordable, accessible childcare in our region. This endeavor, which we are calling the “One More Child Program,” is not something 3Roots can do alone. Our objective is to add value to the collective effort to expand access in our region, and our focus is on the “access to capital” piece of the puzzle. Projects like these are important to 3Roots because they require community collaboration and support our community development mission.
In closing, I want to express gratitude to all the partners and collaborators who worked with us in 2025. In the midst of our 10th year in business, we are exceptionally aware that our impact and accomplishments are directly attributable to the amazing banks, businesses, community organizations, institutions, individuals, state and federal agencies, vendors, and other entities with which we are able to work and collaborate. As we enter 2026, we look forward to expanding our impact, strengthening our partnerships, and making meaningful loans and investments that support our growing communities.
Sincerely,
Grady Vanderhoofven
Founder, President and CEO