Qualified Affordable Housing

12 Months Ended

Dec. 31, 2019

Investments in Affordable Housing Projects [Abstract]

QUALIFIED AFFORDABLE HOUSING

QUALIFIED AFFORDABLE HOUSING

As part of our responsibilities under the Community Reinvestment Act and due to their favorable federal income tax benefits, we invest in Low Income Housing projects. As a limited partner in these operating partnerships, we receive tax credits and tax deductions for losses incurred by the underlying properties. We use the cost method to account for these partnerships.

Our total investment in qualified affordable housing projects was $4.8 million at December 31, 2019 and $6.3 million at December 31, 2018. Amortization expense, included in other noninterest expense in the Consolidated Statements of Net Income, was $2.6 million, $2.7 million and $3.0 million for December 31, 2019, 2018 and 2017. The amortization expense was offset by tax credits of $4.2 million, $3.1 million and $3.4 million for December 31, 2019, 2018 and 2017 as a reduction to our federal tax provision.

On September 11, 2019, we entered into a new qualified affordable housing project and committed to an investment of $10.2 million. As of December 31, 2019, we have invested $1.5 million in this new project. We expect to recognize a $0.5 million income tax benefit in our tax provision in 2020 from tax credits related to this project.