NOTE

. QUALIFIED AFFORDABLE HOUSING PARTNERSHIP INVESTMENTS

Our investments in Qualified Affordable Housing Partnerships that generate Low Income Housing Tax Credits (“LIHTC”) and deductible operating losses totaled

$3.0

million at

December 31, 2018.

These investments are recorded in

Other Assets

with a corresponding funding obligation of

$343

thousand recorded in

Other Liabilities

in our

Consolidated Balance Sheets

. We have invested in

four

separate LIHTC partnerships, which provide the Company with CRA credit. Additionally, the investments in LIHTC partnerships provide us with tax credits and with operating loss tax benefits over an approximately

-year period.

None

of the original investments will be repaid. The tax credits and the operating loss tax benefits that are generated by each of the properties are expected to exceed the total value of the investments we made and provide returns on the investments of between

and

5%.

over the life of the investment. The investments in LIHTC partnerships are being accounted for using the proportional amortization method, under which we amortize the initial cost of an investment in proportion to the amount of the tax credits and other tax benefits received, and recognize the net investment performance in the

Consolidated Statements of Income

as a component of income tax expense.

The following table presents our original investment in LIHTC partnerships, the current recorded investment balance, and the unfunded liability balance of each investment at

December 31, 2018

and

2017.

In addition, the table reflects the tax credits and tax benefits, amortization of the investment and the net impact to our income tax provision for the years ended

December 31, 2018

and

2017.

	At December 31, 2018						For the year ended December 31, 2018
	Original		Current		Unfunded		Tax Credits		Amortization		Net
(Amounts in thousands)	Investment		Recorded		Liability		and		of		Income Tax
Qualified Affordable Housing Partnerships	Value		Investment		Obligation		Benefits		Investments		Benefit
Raymond James California Housing Opportunities Fund II	$	2,000	$	1,022	$	28	$	200	$	179	$	21
WNC Institutional Tax Credit Fund 38, L.P.		1,000		489		—		126		100		26
Merritt Community Capital Corporation Fund XV, L.P.		2,500		1,270		315		226		206		20
California Affordable Housing Fund		2,454		239		—		31		43		(12	)
Total	$	7,954	$	3,020	$	343	$	583	$	528	$	55

	At December 31, 2017						For the year ended December 31, 2017
	Original		Current		Unfunded		Tax Credits		Amortization		Net
(Amounts in thousands)	Investment		Recorded		Liability		and		of		Income Tax
Qualified Affordable Housing Partnerships	Value		Investment		Obligation		Benefits		Investments		Benefit
Raymond James California Housing Opportunities Fund II	$	2,000	$	1,182	$	20	$	227	$	179	$	48
WNC Institutional Tax Credit Fund 38, L.P.		1,000		589		—		131		108		23
Merritt Community Capital Corporation Fund XV, L.P.		2,500		1,476		341		252		237		15
California Affordable Housing Fund		2,454		282		—		171		164		7
Total	$	7,954	$	3,529	$	361	$	781	$	688	$	93

The following table presents our generated tax credits and tax benefits from investments in qualified affordable housing partnerships for the years ended

December 31, 2018,

2017

and

2016.

	For the Years Ended December 31,
	2018				2017				2016
(Amounts in thousands)	Generated		Tax Benefits from		Generated		Tax Benefits from		Generated		Tax Benefits from
Qualified Affordable Housing Partnerships	Tax Credits		Taxable Losses		Tax Credits		Taxable Losses		Tax Credits		Taxable Losses
Raymond James California Housing Opportunities Fund II	$	170	$	30	$	176	$	51	$	184	$	54
WNC Institutional Tax Credit Fund 38, L.P.		111		15		114		17		107		36
Merritt Community Capital Corporation Fund XV, L.P.		192		34		200		52		206		60
California Affordable Housing Fund		5		26		126		45		158		47
Total	$	478	$	105	$	616	$	165	$	655	$	197

Our generated tax credits and benefits were partially offset by the amortization of the principal investment balances of

$528

thousand,

$688

thousand and

$598

thousand for the years ended

December 31, 2018,

2017

and

2016,

respectively.

The following table reflects the anticipated net income tax benefit at

December 31, 2018,

that is expected to be recognized over the remaining lives of the investments and has been updated to reflect the lower tax rate in the Tax Cuts and Jobs Act enacted on

December 22, 2017.

(Amounts in thousands)
Qualified Affordable Housing Partnerships:	Raymond James		WNC Institutional		Merritt Community		California			Total
Anticipated income tax benefit, net less	California Housing		Tax Credit		Capital Corporation		Affordable Housing			Income Tax
amortization of investments	Opportunities Fund II		Fund 38, L.P.		Fund XV, L.P		Fund			Benefit, Net
2019	$	19	$	17	$	4	$	(14	)	$	26
2020		19		17		4		(14	)		26
2021		19		16		4		(14	)		25
2022		19		14		3		(13	)		23
2023 and thereafter		32		27		6		(31	)		34
Total	$	108	$	91	$	21	$	(86	)	$	134