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U.S. Bank Awarded $100 Million of New Markets Tax Credit Allocation Authority

NMTCs Allow U.S. Bank to Continue Financing Community Development Initiatives in Underserved Areas

ST. LOUIS, Mo.--(BUSINESS WIRE)--Feb. 24, 2012-- USBCDE, LLC, U.S. Bank’s Community Development Entity (CDE), has been awarded $100 million of New Markets Tax Credit (NMTC) allocation authority from the U.S. Department of the Treasury. With this award, U.S. Bank will continue to provide equity, equity-like debt and favorable loan rates and terms to operating businesses and developers of real estate in distressed and underserved communities throughout the nation.

The allocation award is part of a $3.5 billion NMTC package announced yesterday by the Treasury’s Community Development Financial Institutions Fund (CDFI Fund). Since the inception of the NMTC Program, the CDFI Fund has made 664 awards—totaling $33 billion in tax credit allocation authority.

Established by Congress in 2000 to increase private investments in underserved areas, the NMTC Program leverages public and private sources to fill community development financing shortfalls. The equity raised through the tax credit program provides financing for companies that lack access to traditional financing and efficiently drives investment into communities with high rates of poverty and unemployment by leveraging financing from other sources. The result is a program which also stimulates economic growth, supports job creation and fosters the development of community services.

Zack Boyers, chairman and chief executive officer of U.S. Bancorp Community Development Corporation (USBCDC), said, “As a community partner, we are supporting high impact developments and businesses efficiently and at a low cost to borrowers.” He noted the NMTC Program has been critical in the economic recovery, as many investments have been the impetus for further development. “The New Markets Tax Credit Program has had a catalytic effect in creating jobs and transforming many inner cities and small towns throughout America,” said Boyers.

Prior to today's announcement, since 2006, U.S. Bank’s CDE had received four allocations totaling $435 million, 96% of which has been utilized to date. The allocations have helped to finance 62 community development initiatives in 49 cities and 27 states across the country. Some of the diverse businesses and developments that U.S. Bank’s CDE has been able to finance with its allocation awards include the:

  • Retention and creation of more than 900 full-time jobs in manufacturing/industrial facilities in Keokuk, IA; Albuquerque, NM; Herrin, IL; Bessemer, NC; and Oconto Falls, WI.
  • Construction of a grocery store in Pagedale, MO, an underserved west St. Louis suburb that had lacked access to basic retail amenities. The store now serves as an anchor for additional revitalization activities.
  • Renovation of the historic Argonaut Building in Detroit into the home of the College for Creative Studies, which houses a visual arts college and provides 3,000 local school children a year with arts programming.
  • Development of a LEED-Silver open-air farmers’ market in the highly distressed, low-income Mission District of Tucson, AZ. The completed market is home to 18 local and regional small businesses including artisan food vendors, restaurants, and farmers who lease their spaces at below market rates.

“These community developments would simply not have occurred without the benefits provided by tax credit financing,” said Boyers.

Besides financing NMTC projects through its Community Development Entity, U.S. Bank serves as one of the most active NMTC investors in the country, both in terms of dollars invested and businesses financed. U.S. Bank’s Community Development Corporation, USBCDC, has made more than $3 billion of NMTC equity committed in support of businesses and real estate development across the United States.

About the New Markets Tax Credit Program
The NMTC Program encourages investment of private capital in designated urban and rural low-income communities, allowing taxpaying investors to receive a credit against federal income taxes for making qualified equity investments in designated Community Development Entities. The CDEs in turn, invest the capital raised into real estate developments and businesses in low-income communities. The credit provided to the investor totals 39 percent of the investment in a CDE and is claimed over a seven-year credit allowance period.

About U.S. Bancorp Community Development Corporation
U.S. Bancorp Community Development Corporation (USBCDC) finances community development initiatives through the use of New Markets, Historic, Low-Income Housing, and renewable energy Investment Tax Credits. USBCDC is the nation’s most active New Markets Tax Credit investor, both in dollars invested and transactions closed. These equity investments have provided much needed revitalization and new resources to communities throughout the country. USBCDC is a subsidiary of U.S. Bank and U.S. Bancorp (NYSE: USB).

About U.S. Bank
U.S. Bancorp (NYSE: USB), with $340 billion in assets as of Dec. 31, 2011, is the parent company of U.S. Bank, the fifth-largest commercial bank in the United States. The company operates 3,085 banking offices in 25 states and 5,053 ATMs, and provides a comprehensive line of banking, brokerage, insurance, investment, mortgage, trust and payment services products to consumers, businesses and institutions. U.S. Bancorp and its employees are dedicated to improving the communities they serve, for which the company earned the 2011 Spirit of America Award, the highest honor bestowed on a company by United Way. Visit U.S. Bancorp on the web at www.usbank.com.

Source: U.S. Bank

U.S. Bank
Media Relations:
Lisa Clark, 608-877-7517

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