Bank of the West's Teresa Loker fondly recalls the first big loan she made to a church.

It was 1994, and the Acts Full Gospel Church took out a seven-figure loan to buy property and an abandoned building in a rundown neighborhood of Oakland, Calif.

The land was cleaned up, and the building was gutted and rebuilt into a place of worship. Today the church boasts a growing membership of 5,000; many of the members live in the nearby projects.

And Ms. Loker, the vice president of her bank's religious lending department, is one of a small but growing number of bankers who are focusing on religious organizations.

"These churches are a way to take the communities back and change the lives of those who live there," she said.

Such an undertaking is not unusual today. Church membership has grown to unprecedented levels in recent years, and church construction is following suit.

In the past banks generally steered clear of church lending, in part because of the credit risks and the expected negative publicity of foreclosing on church property, observers said. But that perception has changed with the proliferation of new churches.

Indeed for most of the 1990s new construction has been consistently robust, according to John N. Vaughn, president of Church Growth Today, a consulting firm in Bolivar, Mo. He has been researching the topic for 20 years.

Close to 400 large churches have opened annually across the country in recent years, he said, with most of the growth coming in the West and the Southeast. The fastest-growing denominations include the Southern Baptist Convention, the Assemblies of God, and the United Methodist Church, he said.

"Historically, it was the bond companies and other finance companies that were involved with the churches," Mr. Vaughn said. "But we're seeing a new shift where the banks are now showing some interest."

Big banks, such as NationsBank Corp. of Charlotte, N.C., and smaller ones, such as Silicon Valley Bancshares of Santa Clara, Calif., and Bank of the West, are attracted to the business, Mr. Vaughn added.

Bank of the West has had a department focusing on the niche for 14 years. It has provided more than $500 million of financing for religious-related projects, bank officials said. The department now has a staff of 13, and Ms. Loker predicts further growth.

"I think part of the boom is coming from a concern with the lack of morals being taught at public schools," she said. "So families are looking at the churches to provide them with this necessary component."

Before joining Bank of the West in 1994, Ms. Loker was a branch manager at a nearby community bank, where she developed commercial real estate and construction lending skills.

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