Note 5 - Affordable Housing Tax Credit Partnership

9 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Investments in Affordable Housing Tax Credits Projects [Text Block]

NOTE 5—AFFORDABLE HOUSING TAX CREDIT PARTNERSHIP

In April 2023, the Company invested in a limited partnership that will in turn invest in qualified affordable housing projects that will generate tax benefits for the limited partner investors, including federal low-income housing tax credits pursuant to Section 42 of the Internal Revenue Code. This partnership investment is an unconsolidated Variable Interest Entity (VIE) for which the Company holds an interest in but is not the primary beneficiary of the VIE. The purpose of this investment is to achieve a satisfactory return on capital, to facilitate the sale of additional affordable housing product offerings, and to assist in achieving goals associated with the Community Reinvestment Act. The primary activities of the limited partnership include the identification, development, and operation of multi-family housing that is leased to qualifying residential tenants. Generally, these types of investments are funded through a combination of debt and equity.

The Company uses the proportional amortization method to account for its investment. The investment is included in other assets and the unfunded commitment is included in other liabilities. As a limited partner, there is no recourse to the Company by the creditors of the limited partnership, however, the tax credits are generally subject to recapture should the partnership fail to comply with the applicable government regulations.

The following table summarizes the balances of the affordable housing tax credit investment and related unfunded commitment at March 31, 2024 and June 30, 2023.

	March 31, 2024			June 30, 2023
Affordable housing tax credit investment	$	10,250		$	10,250
Less: amortization		(233	)		—
Net affordable housing tax credit investment	$	10,017		$	10,250
Unfunded commitments	$	8,279		$	9,668

The following summarizes other information relating to the affordable housing tax credit investment for the three- and nine- month periods ended March 31, 2024 and 2023.

	Three Months Ended March 31,				Nine Months Ended March 31,
	2024		2023		2024		2023
Tax credits and other tax benefits recognized	$	249	$	—	$	272	$	—
Proportional amortization expense included in provision for income taxes		231		—		233		—