Low-Income Housing Tax Credits

6 Months Ended

Jun. 30, 2024

Low-Income Housing Tax Credits [Abstract]

Low-Income Housing Tax Credits

Note 5. Low-Income Housing Tax Credits

The Company was invested in four separate housing equity funds at both June 30, 2024 and December 31, 2023. The general purpose of these funds is to encourage and assist participants in investing in low-income residential rental properties located in the Commonwealth of Virginia; develop and implement strategies to maintain projects as low-income housing; deliver Federal Low Income Housing Credits to investors; allocate tax losses and other possible tax benefits to investors; and preserve and protect project assets.

The investments in these funds were recorded as other assets on the consolidated balance sheets and were $821 thousand and $1.1 million at June 30, 2024 and December 31, 2023, respectively. The expected terms of these investments and the related tax benefits run through 2033. There were no additional capital calls expected for the funds at June 30, 2024.

During the period, the Company adopted ASU 2023-02, “Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method,” (“ASC 323”). These amendments allow reporting entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits. The adoption resulted in an adjustment of $108 thousand, which reduced the investment balance and stockholders’ equity.

The table below summarizes the tax credits and other tax benefits recognized by the Company related to these investments during the periods indicated:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(dollars in thousands)	2024			2023			2024			2023
Tax credits and other benefits
Amortization of operating losses		$	42		$	92		$	134		$	184
Tax benefit of operating losses*			9			19			28			39
Tax credits			78			78			155			155
Total tax benefits		$	87		$	97		$	183		$	194

* Computed using a 21% tax rate.