Tax Credit Investments

6 Months Ended

Jun. 30, 2020

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:


		June 30,				December 31,
		2020				2019
Included in other assets:				(in thousands)
Affordable housing tax credit investment, net				$	139,956			$	153,351
Other tax credit investments, net				62,932				64,354
	Total TCIs, net	$	202,888			$	217,705
Included in other liabilities:
Unfunded affordable housing tax credit commitments				$	12,513			$	16,684
Other tax credit liabilities				54,823				55,105
	Total unfunded tax credit commitments and liabilities	$	67,336			$	71,789

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


		Three Months Ended												Six Months Ended
		June 30												June 30
		2020				2019				2020				2019
Components of income taxes:				(in thousands)
Affordable housing tax credits and other tax benefits				$	(7,194)			$	(7,575)			$	(14,388)			$	(15,150)
Other tax credit investment credits and tax benefits				(941)				(1,135)				(1,882)				(2,271)
Amortization of affordable housing investments, net of tax benefit				5,023				5,494				10,047				10,989
Deferred tax expense				208				239				416				477
	Total net reduction in income tax expense	$	(2,904)			$	(2,977)			$	(5,807)			$	(5,955)
Amortization of TCIs:
Affordable housing tax credits investment				$	1,022			$	823			$	2,044			$	1,645
Other tax credit investment amortization				428				669				856				1,338
	Total amortization of TCIs	$	1,450			$	1,492			$	2,900			$	2,983