Tax Equity Investments

12 Months Ended

Dec. 31, 2024

Note 9 – Tax Equity Investments

The Company makes investments in the equity of certain limited partnerships or limited liability companies that typically qualify for credit under the Community Reinvestment Act. Certain of these equity investments are associated with affordable housing projects that generate low-income housing tax credit (“LIHTC”) and other income tax benefits for the Company.

The Company typically accounts for tax equity investments using the proportional amortization method, if certain criteria are met. The election to account for tax equity investments using the proportional amortization method is done so on a tax credit program-by-tax credit program basis. Under the proportional amortization method, the Company amortizes the initial cost of the investment, which is inclusive of any commitments to make future equity contributions, in proportion to the income tax credits and other income tax benefits that are allocated to the Company over the period of the investment. The net benefits of these investments, which are comprised of income tax credits and operating loss income tax benefits, net of investment amortization, are recognized in the income statement as a component of income tax expense. At December 31, 2024 and 2023 the carrying value of these investments was $85.3 million and $88.8 million, respectively, and are included in other assets in the consolidated statements of financial position.

As of December 31, 2024, the Company’s unfunded commitments associated with tax equity investments, which are comprised of investments in affordable housing partnerships, were estimated to be due as follows:


(Dollars in thousands)	Amount
Year Ending December 31,
2025	$	18,111
2026	12,317
2027	899
2028	573
2029	299
Thereafter	2,625
Total unfunded commitments	$	34,824

The following table presents income tax credits and other income tax benefits, as well as amortization expense, associated with investments in qualified affordable housing partnerships where the proportional amortization method of accounting has been applied for the years ended December 31, 2024, 2023, and 2022.


(Dollars in thousands)	2024		2023		2022
Tax credit and other tax benefits recognized	$	17,471	$	16,292	$	14,180
Amortization of investments	$	13,500	$	13,089	$	12,070

For the year ended December 31, 2024, non-income-tax-related income of $371,000 associated with a tax equity investment was included in other income in the consolidated statements of income. There was no non-income-tax-related activity associated with tax equity investments recorded outside of income tax expense for the years ended December 31, 2023 and 2022. There were no impairment losses recorded on tax equity investments for the years ended December 31, 2024, 2023, and 2022.