Note 9 — Investments in Qualified Affordable Housing Partnerships, Tax Credit and Other Investments, Net

The 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 in Income tax expense on the Consolidated Statements of Income.

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)	September 30, 2017		December 31, 2016
Investments in qualified affordable housing partnerships, net	$	178,344	$	183,917
Accrued expenses and other liabilities — Unfunded commitments	$	63,607	$	57,243

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




($ in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2017		2016		2017		2016
Tax credits and other tax benefits recognized	$	15,840	$	8,591	$	35,027	$	26,561
Amortization expense included in income tax expense	$	8,944	$	6,612	$	22,945	$	20,923

Investments in Tax Credit and Other Investments, Net

Investments in tax credit and other investments, net, were $203.8 million and $173.3 million as of September 30, 2017 and December 31, 2016, 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 or cost method of accounting.

Total unfunded commitments for these investments were $103.0 million and $117.0 million as of September 30, 2017 and December 31, 2016, respectively, and are included in Accrued expenses and other liabilities on the Consolidated Balance Sheets. Amortization of tax credit and other investments was $23.8 million and $32.6 million for the three months ended September 30, 2017 and 2016, respectively. Amortization of tax credit and other investments was $66.1 million and $60.8 million for the nine months ended September 30, 2017 and 2016, respectively.