NOTE

QUALIFIED AFFORDABLE HOUSING PARTNERSHIP INVESTMENTS

We have invested in

five

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

$3.4

million at

March 31, 2020.

These investments are recorded in

Other Assets

with a corresponding funding obligation of

$1.3

million 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. During the

first

quarter of

2020,

we invested

$1.0

million in an additional LIHTC partnership, Boston Capital.

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

March 31, 2020

and

2019.

In addition, the tables reflect 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, 2020

and

2019.

	At March 31, 2020						For the Three Months Ended March 31, 2020
(Amounts in thousands) Qualified Affordable Housing Partnerships	Original Investment Value		Current Recorded Investment		Unfunded Liability Obligation		Tax Credits and Benefits		Amortization of Investments		Net Income Tax Benefit (Expense)
Raymond James California Housing Opportunities Fund II	$	2,000	$	807	$	22	$	50	$	45	$	5
WNC Institutional Tax Credit Fund 38, L.P.		1,000		379		—		26		21		5
Merritt Community Capital Corporation Fund XV, L.P.		2,500		1,013		316		56		54		2
California Affordable Housing Fund		2,454		200		—		6		10		(4	)
Boston Capital		1,000		990		1,000		16		10		6
Total	$	8,954	$	3,389	$	1,338	$	154	$	140	$	14

	At December 31, 2019						For the Three Months Ended March 31, 2019
(Amounts in thousands) Qualified Affordable Housing Partnerships	Original Investment Value		Current Recorded Investment		Unfunded Liability Obligation		Tax Credits and Benefits		Amortization of Investments		Net Income Tax Benefit (Expense)
Raymond James California Housing Opportunities Fund II	$	2,000	$	852	$	22	$	50	$	45	$	5
WNC Institutional Tax Credit Fund 38, L.P.		1,000		400		—		27		23		4
Merritt Community Capital Corporation Fund XV, L.P.		2,500		1,067		316		56		55		1
California Affordable Housing Fund		2,454		210		—		6		9		(3	)
Total	$	7,954	$	2,529	$	338	$	139	$	132	$	7

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

three

months ended

March 31, 2020

and

2019.

	For the Three Months Ended
	March 31, 2020				March 31, 2019
(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.		22		4		23		4
Merritt Community Capital Corporation Fund XV, L.P.		48		8		48		8
California Affordable Housing Fund		—		6		—		6
Boston Capital		11		5		—		—
Total	$	124	$	30	$	114	$	25

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

March 31, 2020,

that is expected to be recognized over the remaining lives of the investments.

(Amounts in thousands)
Qualified Affordable Housing Partnerships:													2024
Anticipated income tax benefit, net less													and
amortization of investments	2020			2021			2022			2023			thereafter		Total
Raymond James California Housing Opportunities Fund II	$	14		$	19		$	19		$	18		$	16	$	86
WNC Institutional Tax Credit Fund 38, L.P.		12			16			14			13			14		69
Merritt Community Capital Corporation Fund XV, L.P.		3			3			3			3			4		16
California Affordable Housing Fund		(10	)		(14	)		(13	)		(35	)		—		(72	)
Boston Capital		11			23			24			23			171		252
Total income tax benefit, net	$	30		$	47		$	47		$	22		$	205	$	351