Qualified Affordable Housing Project Investments

12 Months Ended

Dec. 31, 2019

Equity Method Investments and Joint Ventures [Abstract]

Qualified Affordable Housing Project Investments

The Company invests in certain affordable housing projects in the form of ownership interests in limited partnerships or limited liability companies that qualify for CRA and generate low income housing tax credits (“LIHTC”) and other tax benefits over an approximately 10 year period.

The Company records its investments in qualified affordable housing partnerships, using either the cost method or the proportional amortization method. Under the cost method, the Company amortizes the initial cost of the investment as noninterest expense equally over the expected time period in which tax credits and other tax benefits will be received. Under the proportional amortization method, the Company amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits that are allocated to the Company over the period of the investment. The net benefits of these investments, which is comprised of tax credits and operating loss tax benefits, net of investment amortization, are recognized in the income statement as a component of income tax expense (benefit).

The Company’s net investment in qualified affordable housing projects that generate LIHTC at December 31, 2019 and 2018 was $53.9 million and $39.4 million, respectively, and are recorded in other assets in the consolidated statement of financial condition. Total unfunded commitments related to the investments in qualified affordable housing funds totaled $21.4 million and $13.4 million at December 31, 2019 and 2018, respectively, and are recorded under accrued expenses and other liabilities.

As of December 31, 2019, the Company’s unfunded affordable housing commitments were estimated to be paid as follows:



	Amount
Year Ending December 31,	(dollars in thousands)
2020	$	9,776
2021	6,596
2022	3,806
2023	187
2024	182
Thereafter	867
Total unfunded commitments	$	21,414

The following table presents tax credits and other tax benefits generated by operating losses from qualified affordable housing projects as well as amortization expense associated with these investments for the years ended December 31, 2019, 2018 and 2017.



	2019		2018		2017
	(dollars in thousands)
Tax credit and other tax benefits recognized	$	6,506	$	4,748	$	1,719
Amortization of investments	5,527		4,574		1,599

There were no impairment losses related to LIHTC investments for the years ended December 31, 2019, 2018 and 2017.