NOTE

QUALIFIED AFFORDABLE HOUSING PARTNERSHIP INVESTMENTS

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. 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

over the life of the investment.

None

of the original investments will be repaid.

Our investments in Qualified Affordable Housing Partnerships totaled

$2.9

million at

March 31, 2019.

These investments are recorded in

Other Assets

with a corresponding funding obligation of

$343

thousand recorded in

Other Liabilities

in our

Consolidated Balance Sheets

. 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

March 31, 2019

and

December 31, 2018.

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

three

months ended

March 31, 2019

and

2018.

	At March 31, 2019						For the Three Months Ended March 31, 2019
(Amounts in thousands)	Original		Current		Unfunded		Tax Credits		Amortization		Net
Qualified Affordable Housing	Investment		Recorded		Liability		and		of		Income Tax
Partnerships	Value		Investment		Obligation		Benefits		Investments		Benefit (Expense)
Raymond James California Housing Opportunities Fund II	$	2,000	$	977	$	28	$	50	$	45	$	5
WNC Institutional Tax Credit Fund 38, L.P.		1,000		467		—		27		23		4
Merritt Community Capital Corporation Fund XV, L.P.		2,500		1,215		315		56		55		1
California Affordable Housing Fund		2,454		229		—		6		9		(3	)
Total	$	7,954	$	2,888	$	343	$	139	$	132	$	7

	At December 31, 2018						For the Three Months Ended March 31, 2018
(Amounts in thousands)	Original		Current		Unfunded		Tax Credits		Amortization		Net
Qualified Affordable Housing	Investment		Recorded		Liability		and		of		Income Tax
Partnerships	Value		Investment		Obligation		Benefits		Investments		Benefit (Expense)
Raymond James California Housing Opportunities Fund II	$	2,000	$	1,022	$	28	$	50	$	44	$	6
WNC Institutional Tax Credit Fund 38, L.P.		1,000		489		—		32		26		6
Merritt Community Capital Corporation Fund XV, L.P.		2,500		1,270		315		56		56		—
California Affordable Housing Fund		2,454		239		—		8		12		(4	)
Total	$	7,954	$	3,020	$	343	$	146	$	138	$	8

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

three

months ended

March 31, 2019

and

2018.

	For the Three Months Ended
	March 31, 2019				March 31, 2018
(Amounts in thousands)	Generated		Tax Benefits From		Generated		Tax Benefits from
Qualified Affordable Housing Partnerships	Tax Credits		Taxable Losses		Tax Credits		Taxable Losses
Raymond James California Housing Opportunities Fund II	$	43	$	7	$	43	$	7
WNC Institutional Tax Credit Fund 38, L.P.		23		4		28		4
Merritt Community Capital Corporation Fund XV, L.P.		48		8		48		8
California Affordable Housing Fund		—		6		1		7
Total	$	114	$	25	$	120	$	26

The following table reflects the net income tax benefit and (expense) at

March 31, 2019,

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

December 22, 2017.

(Amounts in thousands) Qualified Affordable Housing Partnerships: Anticipated net income tax benefit (expense) less amortization of investments	Raymond James California Housing Opportunities Fund II		WNC Institutional Tax Credit Fund 38, L.P.		Merritt Community Capital Corporation Fund XV, L.P		California Affordable Housing Fund			Total Net Income Tax Benefit
2019	$	14	$	13	$	3	$	(10	)	$	20
2020		19		17		4		(14	)		26
2021		19		16		4		(14	)		25
2022		19		14		3		(13	)		23
2023 and thereafter		33		27		6		(32	)		34
Total	$	104	$	87	$	20	$	(83	)	$	128