

NOTE 8	—	INVESTMENTS IN QUALIFIED AFFORDABLE HOUSING PARTNERSHIPS, TAX CREDIT AND OTHER INVESTMENTS, NET

The Community Reinvestment Act (“CRA”) encourages banks to meet the credit needs of their communities for housing and other purposes, particularly in neighborhoods with low or moderate income. The Company invests in certain affordable housing limited partnerships that qualify for CRA credits. Such limited partnerships are formed to develop and operate apartment complexes designed as high-quality affordable housing for lower income tenants throughout the U.S. Each of the partnerships must meet the regulatory requirements for affordable housing for a minimum 15-year compliance period to fully utilize the tax credits. In addition to affordable housing limited partnerships, the Company invests in new market tax credit projects that qualify for CRA credits and eligible projects that qualify for renewable energy and historic tax credits. Investments in renewable energy tax credits help promote the development of renewable energy sources, while the investments in historic tax credits promote the rehabilitation of historic buildings and economic revitalization of the surrounding areas.

Investments in Qualified Affordable Housing Partnerships, Net

The Company records its investments in qualified affordable housing partnerships, net, using the proportional amortization method. Under the proportional amortization method, the Company amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received, and recognizes the amortization on the Consolidated Statements of Income as a component of income tax expense. The following table presents the balances of the Company’s investments in qualified affordable housing partnerships, net, and related unfunded commitments as of the periods indicated:




($ in thousands)	December 31,
($ in thousands)	2016		2015
Investments in qualified affordable housing partnerships, net	$	183,917	$	193,978
Accrued expenses and other liabilities — Unfunded commitments	$	57,243	$	61,525

The following table presents additional information related to the Company’s investments in qualified affordable housing partnerships, net, for the periods indicated:




($ in thousands)	Year Ended December 31,
($ in thousands)	2016		2015		2014
Tax credits and other tax benefits recognized	$	37,252	$	38,271	$	32,613
Amortization expense included in income tax expense	$	28,206	$	26,814	$	21,428

Investments in Tax Credit and Other Investments, Net

Investments in tax credit and other investments, net, were $173.3 million and $187.5 million as of December 31, 2016 and 2015, respectively. The Company is not the primary beneficiary in these partnerships and, therefore, is not required to consolidate its investments in tax credit and other investments on the Consolidated Financial Statements. Depending on the ownership percentage and the influence the Company has on the limited partnership, the Company applies either the equity method or cost method of accounting.

Total unfunded commitments for these investments were $117.0 million and $113.2 million as of December 31, 2016 and 2015, respectively, and were included in Accrued expenses and other liabilities on the Consolidated Balance Sheets. Amortization of tax credit and other investments were $83.4 million, $36.1 million and $44.1 million for the years ended December 31, 2016, 2015 and 2014, respectively.

The Company’s unfunded commitments related to investments in qualified affordable housing partnerships, tax credit and other investments, net, are estimated to be paid as follows:




Estimates for the Years Ending December 31,	Amount ($ in thousands)
2017	$	96,390
2018	34,849
2019	17,254
2020	12,502
2021	8,172
Thereafter	5,089
Total	$	174,256