Tax Credit Investments

9 Months Ended

Sep. 30, 2019

Income Tax Disclosure [Abstract]

Tax Credit Investments

Tax Credit Investments

Tax credit investments ("TCIs") are primarily for investments promoting qualified affordable housing projects and investments in community development entities. Investments in these projects generate a return primarily through the realization of federal income tax credits and deductions for operating losses over a specified time period.

The TCIs are included in other assets, with any unfunded equity commitments recorded in other liabilities on the Consolidated Balance Sheets. Certain TCIs qualify for the proportional amortization method and are amortized over the period the Corporation expects to receive the tax credits, with the expense included within income taxes on the Consolidated Statements of Income. Other TCIs are accounted for under the equity method of accounting, with amortization included within non-interest expense on the Consolidated Statements of Income. This amortization includes equity in partnership losses and the systematic write-down of investments over the period in which income tax credits are earned. All of the TCIs are evaluated for impairment at the end of each reporting period.

The following table presents the balances of the Corporation's TCIs and related unfunded commitments:

		September 30,		December 31,
		2019		2018
Recorded in other assets on the Consolidated Balance Sheets:		(in thousands)
Affordable housing tax credit investment, net		$	159,502	$	170,401
Other tax credit investments, net		64,922		72,584
	Total TCIs, net	$	224,424	$	242,985
Recorded in other liabilities on the Consolidated Balance Sheets:
Unfunded affordable housing tax credit commitments		$	19,727	$	23,196
Other tax credit investment liabilities		54,623		59,823
	Total unfunded tax credit investment commitments and liabilities	$	74,350	$	83,019

The following table presents other information relating to the Corporation's TCIs:

		Three Months Ended						Nine Months Ended
		September 30						September 30
		2019			2018			2019			2018
Components of income taxes:		(in thousands)
Affordable housing tax credits and other tax benefits		$	(7,852	)	$	(8,555	)	$	(23,002	)	$	(23,642	)
Other tax credit investment credits and tax benefits		(1,136		)	(1,596		)	(3,407		)	(4,789		)
Amortization of affordable housing investments, net of tax benefit		5,649			5,459			16,638			16,376
Deferred tax expense		238			336			715			1,007
	Total reduction in income tax expense	$	(3,101	)	$	(4,356	)	$	(9,056	)	$	(11,048	)
Amortization of TCIs:
Affordable housing tax credits investment		$	863		$	839		$	2,508		$	2,517
Other tax credit investment amortization		670			798			2,008			2,394
	Total amortization of TCIs	$	1,533		$	1,637		$	4,516		$	4,911