NOTE 12—QUALIFIED AFFORDABLE HOUSING PROJECTS AND OTHER TAX CREDIT INVESTMENTS

The Company is a limited partner in several tax-advantaged limited partnerships whose purpose is to invest in approved qualified affordable housing or other renovation or community revitalization projects. These investments are included in other assets on the balance sheet, with any unfunded commitments included with other liabilities. Certain of these assets qualify for the proportional amortization method and are amortized over the period that the Company expects to receive the tax credits, with the expense included within income tax expense on the consolidated statements of income. The other investments are accounted for under the equity method, with the expense included within pre-tax income on the consolidated statements of income. All of the Company’s tax credit investments are evaluated for impairment at the end of each reporting period. As of September 30, 2017, the Company expects to recover its remaining investments through the use of the tax credits that were generated by the investments.

The following table summarizes Old National’s investments in LIHTCs, FHTCs, and CReEDs at September 30, 2017 and December 31, 2016:


(dollars in thousands)			September 30, 2017				December 31, 2016
Investment	Accounting Method		Investment		Unfunded Commitment (1)		Investment		Unfunded Commitment
LIHTC and other qualifying investments		Proportional amortization	$	32,649	$	19,607	$	29,110	$	16,210
FHTC		Equity		17,411		11,591		4,434		3,104
CReED		Equity		1,504		1,502		1,504		1,502

Total			$	51,564	$	32,700	$	35,048	$	20,816

(1)	All commitments will be paid by the Company by 2027.

The following table summarizes the amortization expense and tax benefit recognized for Old National’s qualified affordable housing projects and other tax credit investments for the three and nine months ended September 30, 2017 and 2016:


(dollars in thousands)	Three Months Ended September 30,				Three Months Ended September 30,						Nine Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017			2016			2017		2016		2017			2016
Investment	Amortization Expense (1)				Tax Benefit Recognized (1)						Amortization Expense (1)				Tax Benefit Recognized (1)
LIHTC and other qualifying investments	$	940	$	201	$	(1,297	)	$	(281	)	$	2,822	$	603	$	(3,892	)	$	(843	)
FHTC		—		—		(1,520	)		—			—		—		(4,559	)		—
CReED (2)		—		—		(303	)		—			—		—		(909	)		—

Total	$	940	$	201	$	(3,120	)	$	(281	)	$	2,822	$	603	$	(9,360	)	$	(843	)

(1)	Tax credit investments are included in the Company’s estimate of the effective annual tax rate.

(2)	The CReED tax credit investment qualifies for an Indiana state tax credit.