VARIABLE INTEREST ENTITIES

9 Months Ended

Sep. 30, 2022

Equity Method Investments and Joint Ventures [Abstract]

NOTE 8 - 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)	September 30, 2022	December 31, 2021
Lending to special purpose entities included in loans and leases	$3,647	$2,646
LIHTC investment included in other assets	2,148	1,978
LIHTC unfunded commitments included in other liabilities	985	927
Asset-backed investments included in HTM securities	614	737
Renewable energy investments included in other assets	390	429

Lending to Special Purpose Entities

Citizens provides lending facilities to third-party sponsored special purpose entities. As of September 30, 2022 and December 31, 2021, the lending facilities had aggregate unpaid principal balances of $3.6 billion and $2.6 billion, respectively, and undrawn commitments to extend credit of $2.4 billion and $1.9 billion, respectively. For more information on commitments to extend credit see Note 13.

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 information related to the Company’s affordable housing tax credit investments:


	Three Months Ended September 30,		Nine Months Ended September 30,
(in millions)	2022	2021	2022	2021
Tax credits included in income tax expense	$59	$48	$180	$150
Other tax benefits included in income tax expense	15	11	46	36
Total tax benefits included in income tax expense	74	59	226	186
Less: Amortization included in income tax expense	61	50	190	156
Net benefit from affordable housing tax credit investments included in income tax expense	$13	$9	$36	$30

No LIHTC investment impairment losses were recognized during the three and nine months ended September 30, 2022 and 2021.