CSMFO



CAPITAL INVESTMENT

Listed below are the responses to item 14 from the eight firms submitting responses to the Banking Services RFP.

Item 14: How can your institution partner with the City of Elk Grove and other local governments in the region to address the need for capital and make strategic investments in Elk Grove’s and the region’s economy?

Bank of America:

Did not include a response in their proposal.

Bank of the West:

Bank of the West has a Public Finance Department with the capability to assist the City with most, if not all, of its funding needs at competitive, tax-exempt rates. Funding options would include funded loans, leases or lines of credit. If the City is considering issuing variable rate bonds, Bank of the West can also provide a letter of credit backed by the “Aa” strength of our credit rating. Bank of the West is ready to provide the knowledge and financing best suited to get projects done.

Please refer to the following pages for all of the contributions Bank of the West has made in Elk Grove and Sacramento County over the past three years.

Check Processors Inc.:

Provided Lock Box Services only response.

Mechanics Bank:

Community Involvement

“We believe that our mission extends beyond profit-making. We want to make every community in which we operate a better place.” - Eddie Downer III

We are in business to make money, but not just to make money. We strive to make every community in which we operate a better place to live and work, which is why we support a broad range of organizations, programs and activities benefiting a wide scope of individuals.

Giving back to the community is an integral part of Mechanics Bank's culture, and the bank is consistently recognized as one of the Top 50 local corporate philanthropists. Mechanics Bank gives well over $1,000 per employee in donations annually.

In 2010, taking our commitment to community one step further, Mechanics Bank launched the "Community Partners" program complete with its own dedicated website,

This site provides local nonprofits with efficient, centralized access to potential Mechanics Bank employee volunteers, a bundle of customized banking products and services, resources, information relevant to nonprofits, and an online channel for requesting a donation or sponsorship.

The Mechanics Bank Community Development Corporation

Additional efforts to enhance the lives of those within our communities are accomplished through the resources provided by The Mechanics Bank Community Development Corporation (TMBCDC) and our Corporate Giving Program.

In the business arena, Mechanics Bank is a preferred Small Business Administration (SBA.) lender. In 2003, we formed The Mechanics Bank Community Development Corporation (TMBCDC), a wholly owned subsidiary of Mechanics Bank, to enhance our investments under the Community Reinvestment Act, explicitly to aid our small business clients. In 2004 TMBCDC was the only California community bank organized and headquartered in the state to receive an allocation from the Community Development Financial Institution Fund (CDFI) for the New Markets Tax Credit Program. Mechanics Bank's TMBCDC allocation was designated for use in providing loans, commercial financing, real estate financing (retail, industrial, office space, for sale housing and community facilities) and financial counseling to qualifying businesses in low-income census tracts in Alameda, Contra Costa and San Francisco counties.

Corporate Giving Program

The bank's Corporate Giving Program supports our mission by directing corporate donations, sponsorships and the efforts of caring employee volunteers to ensure the success of a variety of nonprofit causes and events pivotal to building prosperity in the communities we serve.

Our Corporate Giving Program addresses a wide range of needs. It is a broad, community-based program focused on community development, educational programs through schools and nonprofit organizations, health services, cultural and civic programs designed to enrich the lives of those in our communities. Though not limited to the Community Reinvestment Act (CRA), a significant portion of our giving is designated to meet CRA requirements, thereby contributing to the bank's CRA rating.

Our Corporate Giving Program is much more than monetary contributions to programs in our communities. This commitment incorporates our employees' personal involvement. Our employees get involved in various ways; things such as board memberships, participating in sponsored events, volunteering to repair homes for the elderly or those with disabilities, teaching financial literacy and collecting food and toys for those in need. Mechanics Bank provides each employee with up to12 hours of paid time annually for volunteer activities during work hours.

Civic and Community

Mechanics Bank supports programs that help build our communities, which help strengthen them economically and provide benefits for a broad segment of the population. As an integral part of our communities, Mechanics Bank supports the work of organizations that seek to increase civic involvement and pride, economic viability, as well as foster positive public and private partnerships.

River City Bank:

As the largest bank based in the Sacramento region with over $1.1 billion in assets, River City Bank is dedicated to driving community and economic development. RCB is actively pursuing new loan opportunities, particularly with our target market of small to medium sized businesses. In 2011 we grew our loan portfolio by a robust 9%, well above the norm for our industry. Our goal is to continue this accelerated rate of loan growth, which will enhance the prosperity of the Sacramento region.

Our customer base is filled with leading local firms that have aspirations to grow throughout the region. We will be able to assist the City of Elk Grove by facilitating introductions to these folks, as well as by providing loan capital to finance investments.

As a Community Bank lender, the Bank is routinely asked to provide financing for Community Development projects, which contribute to the economic enhancement and re-vitalization of the communities we serve. Rates, terms and fees are based on the associated risk of each loan transaction, and are available for credit worthy for-profit and not-for-profit borrowers. The Bank would welcome an opportunity to enter into discussions with the City of Elk Grove on community or sponsored projects where a lender is required, as well as an opportunity to entertain the credit needs of local businesses.

River City Bank is in a loan growth mode and actively searching for credit worthy business borrowers. The Bank currently maintains a loan to deposit ratio of 65% while our peers are hovering around the 80-90% range. With a goal to reach the 80% mark, the Bank has money to lend and therefore access to the capital necessary to stimulate economic growth.

Furthermore, the Bank will also consider project capital financing requests from the City of Elk Grove on a case-by-case basis. Loans may typically be structured with both short term and long-term maturities, and priced on a fixed or adjustable rate basis, depending on the quality and timing of project cash flows, collateral and credit enhancements. Loan accommodations can take the form of Lines of Credit, short term Bridge, or intermediate Term Loan structures. Variable rate pricing is typically offered at the Bank’s Base Commercial Lending Rate (BCLR) plus a spread of 0%-3%.

River City Bank applauds the City of Elk Grove for their participation in the Next Economy. The Bank’s ability to provide access to capital acts as a catalyst for regional businesses to create jobs, innovate, and therefore stimulate overall economic growth for our region.

Union Bank:

Union Bank has a long history of responsible banking in the Sacramento Region. We have made significant investments of capital and resources to further the betterment of the local economy. These investments have included many programs such as the Bank on Sacramento program that is focusing on outreach to the under-banked portions of the region, Financial Education and Financial Literacy programs, such as Small Business Loan Readiness, FDIC sponsored Money Smart seminars, as well as outreach programs for financial education through Junior Achievement and other educational programs.

But our commitment does not stop with just talking about responsible banking. Union Bank has made the commitment to increase our Small Business lending by adding more Professional Loan Officers to our Business Banking Staff, as well as by attaining the SBA Preferred Lender designation. To date in 2012 Union Bank is ranked as a top five SBA 504 lender and a top seven SBA 7A lender by dollar volume, with an aggressive business plan to rise even further in the rankings.

Union Bank has been a responsible lender to businesses and individuals since 1864 in the Sacramento Region, and will continue in our commitment to provide loans to borrowers in a responsible manner for years to come.

Please refer to our Corporate Social Responsibility Information Brochure in Exhibit G for more information regarding our commitment to the communities we serve.

*Note, attached is Exhibit G – Corporate Social Responsibility Report 2009 submitted as part of Union Bank’s response.

US Bank:

We have been active lenders (and investors through US Bancorp CDC) via the low-income housing tax credit program) in the City of Elk Grove and the immediate surrounding areas. We recently closed a deal in Elk Grove where the State of CA was the primary tenant. We have three existing affordable housing deals in Elk Grove and our CDC partners have invested in one completed deal and have one project that is about 70% complete now. We have a joint deal closing in about a month where US Bank will provide an $18MM construction loan and $3MM perm loan, and our CDC will provide over $13MM in equity. This deal is technically in unincorporated Sac County, not Elk Grove, but is located about 750 feet north of the city limits.

U.S. Bancorp has a rich history of giving back to its communities. As a result, the CRA rating on our last examination ('2008) was Outstanding and was achieved in all test levels (Lending, Investment and Service). Comments included: "USB’s lending performance is excellent. An excellent distribution of loans by income level of the borrower, excellent lending activity, excellent level of Community Development Lending that had a significantly positive impact on the rating, and a good geographic distribution of loans resulted in the Outstanding Lending Test rating". For more information on U.S. Bancorp’s CRA Rating please refer to:

Developing communities means investing in people and their hopes and dreams for the future. By providing products and services that meet the diverse needs of our communities – such as our innovative mortgage program for first-time homebuyers – we’re helping to provide a social and economic foundation for achieving affordable housing, productive small businesses and culturally vibrant communities. U.S. Bancorp works in partnership with hundreds of organizations to help develop affordable housing, foster economic revitalization and provide training and education to small businesses, consumers and first-time homebuyers. It’s also why we’re committed to providing financial and leadership support to national and regional equity funds as well as affordable housing units.

Whether it’s providing lower rates in low-income areas or by offering low down payments on business loans thru our SBA Division, U.S. Bank believes when our communities succeed, we all succeed. That’s what community development at U.S. Bancorp is about and it’s integral to the way we do business. Your Relationship Manager, Charline Botelho, is available to work with the City of Elk Grove in addressing the need for capital. By being involved with the City she is there to bring the full array of services and programs available to you; our customer.

Wells Fargo:

At Wells Fargo, we understand that we are only as successful as the communities we’re a part of. This was true when the bank started 160 years ago and it remains true today.

Community reinvestment is an integral part of our business culture. Every day our local Wells Fargo team focuses on building complex and strong partnerships with community leaders and non-profit organizations to provide services to underserved communities.

Our community involvement goes far beyond just writing checks. We aspire to the highest level of community involvement in four areas:

• Social Capital – applying our best thinking as leaders in making communities better places to live and work

• Team Member Volunteerism - encouraging and celebrating the good work our team members do in their communities

• Financial Contributions - giving with purpose and focus

• Compliance - conducting business ethically and responsibly according to legal requirements and our own standards

Wells Fargo is one of America’s largest financial contributors to nonprofits. Our 2011 charitable contributions totaled $213.5 million, surpassing $213 million for the fourth consecutive year and funding approximately 19,000 organizations. Giving is decentralized; decisions are made by local Wells Fargo managers. We focus our support in six areas: education, human services, community development, arts and culture, civic activities, and the environment.

Additionally, Wells Fargo team members are encouraged to support the communities we’re a part of through our annual Community Support and United Way Campaign. During our most recent campaign in September of 2011, team members pledged a record $41.6 million to more than 28,000 nonprofits and schools. That represents a 13 percent increase over the amount pledged during September 2010. In addition, team members recorded 122,000 community volunteer hours during the month-long campaign. For the third year in a row, United Way Worldwide has named Wells Fargo’s annual Community Support and United Way Campaign the No. 1 Giving Campaign.

Details on our specific contributions in the County of Sacramento are provided below.

Philanthropic Investing & Team Member Volunteering1

• $2,676,150 to nonprofits and schools through corporate and foundation giving

• $364,008 in contributions through the annual team member Community Support and United Way Campaign

• $65,525 in contributions to match team member gifts to accredited educational institutions, foundations, and Habitat for Humanity

• 11,617 volunteer hours contributed by team members throughout the Sacramento County community

1(12-month company data as of 12/31/11)

Details on our specific contributions in the City of Elk Grove are provided below.

Philanthropic Investing & Team Member Volunteering1

• $60,250 to nonprofits and schools through corporate and foundation giving

• $17,671 in contributions through the annual team member Community Support and United Way Campaign

• $6,291 in contributions to match team member gifts to accredited educational institutions, foundations, and Habitat for Humanity

• 271 volunteer hours contributed by team members throughout the Elk Grove community

1(12-month company data as of 12/31/11)

Wells Fargo’s leadership role in creating special lending programs has been recognized by the Office of the Comptroller of the Currency, which awarded us its highest possible rating “Outstanding” for our community reinvestment performance. Our most recent Performance Evaluation may be found at the following URL: .

Loans and Investments*

• In Sacramento County, Wells Fargo provided 11,332 mortgage loans, extending $2.3 billion in credit1,2

• Of that, 2,056 mortgage loans were in low-to moderate-income (LMI) communities, providing $276.7 million in credit and 3,593 loans were made to LMI borrowers, providing $500.4 million in credit

• Wells Fargo provided 7,453 small business loans, extending $264.1 million in credit2

• Of that, 2,171 small business loans were in LMI communities, providing $92.9 million in credit

• Wells Fargo provided 38 small farm loans, extending $1.9 million in credit in Sacramento County2

• In Sacramento County, Wells Fargo provided 14 community development loans, totaling $84.9 million and 44 community development investments, totaling $38.0 million3,4

*Company data as of 12/31/11

1Mortgage includes home purchase, home improvement, home refinance, and multi-family loans

2Totals include census tract income level classified loans only

3Some investments and grants cannot be tracked to the county/city level

4Investments include grants and are subject to change as updates are received

Wells Fargo has several business financing units that can work with the Cities in the Sacramento region to structure financing to meet their economic development goals.

Our Community Lending group manages New Market Tax Credits (NMTC) and Wells Fargo currently is the largest investor of NMTC’s in the nation. They provide debt and equity capital for economic development, job creation, and affordable housing in areas of need nationwide.

We will also consider an application for Equity Equivalent Investments (EQ2s) that we will invest in lending and loan funds for up to 10 years at 2%. These funds can be used for predevelopment, relending programs, and land acquisition.

The Wells Fargo Public Finance group also provides funding products and services for public, governmental, nonprofit, and charitable organizations. It finances tax-exempt debt for multi-family housing and assists qualifying organizations in obtaining Industrial Revenue Bond (IRB) financing. Any financing will be subject to the completion of our due diligence in determining the creditworthiness of each entity.

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