VARIABLE INTEREST ENTITIES

3 Months Ended

Mar. 31, 2022

Equity Method Investments and Joint Ventures [Abstract]

NOTE 7 - VARIABLE INTEREST ENTITIES

Citizens is involved in various entities that are considered VIEs, including investments in limited partnerships that sponsor affordable housing projects, limited liability companies that sponsor renewable energy projects or asset-backed securities, and lending to special purpose entities. Citizens’ maximum exposure to loss as a result of its involvement with these entities is limited to the balance sheet carrying amount of its investment in equity and asset-backed securities, unfunded commitments, and outstanding principal balance of loans to special purpose entities. The Company does not consolidate any of its investments in these entities. These investments are included in other assets in the Consolidated Balance Sheets. For more details see Note 11 in the Company’s 2021 Form 10-K.

A summary of these investments is presented below:


(in millions)	March 31, 2022	December 31, 2021
Lending to special purpose entities included in loans and leases	$2,602	$2,646
LIHTC investment included in other assets	2,130	1,978
LIHTC unfunded commitments included in other liabilities	1,050	927
Investment in asset-backed securities included in HTM securities	686	737
Renewable energy investments included in other assets	417	429

Lending to Special Purpose Entities

Citizens provides lending facilities to third-party sponsored special purpose entities. As of March 31, 2022 and December 31, 2021, the lending facilities had aggregate unpaid principal balances of $2.6 billion, and undrawn commitments to extend credit of $2.1 billion and $1.9 billion, respectively.

Low Income Housing Tax Credit Partnerships

The purpose of the Company’s equity investments is to assist in achieving the goals of the Community Reinvestment Act and to earn an adequate return of capital.

The following table presents other information related to the Company’s affordable housing tax credit investments:


	Three Months Ended March 31,
(in millions)		2022	2021
Tax credits included in income tax expense		$61	$51
Other tax benefits included in income tax expense		15	12
Total tax benefits included in income tax expense		76	63
Less: Amortization included in income tax expense		64	53
Net benefit from affordable housing tax credit investments included in income tax expense		$12	$10

No LIHTC investment impairment losses were recognized during the three months ended March 31, 2022 and 2021.