LOW INCOME HOUSING PROJECT INVESTMENTS

The Company’s investment in Low Income Housing Projects that generate Low Income Housing Tax Credits (“LIHTC”) at March 31, 2014 was $26.9 million with a recorded liability of $23.3 million in funding obligations. The Company has invested in three separate LIHTC projects which provide the Company with tax credits and with operating loss tax benefits over a remaining approximate 15 year period. None of the original investment will be repaid. The investment in LIHTC projects is being accounted for using the proportional amortization method, under which the Company amortizes the initial cost of the investment in proportion to the amount of the tax credits and other tax benefits received and recognizes the net investment performance in the income statement as a component of income tax expense (benefit).

The following table presents the pertinent information related to the Company's investments in low income housing projects as of the date indicated:



	March 31, 2014
	(dollars in thousands)
Original investment value	$	27,543
Current recorded investment	26,946
Unfunded liability obligation	23,279
Tax credits and benefits (1)	1,629
Amortization of investments (2)	1,101
Net income tax benefit (3)	528


(1)	The amount reflected in this row represent both the tax credits as well as the tax benefits expected to be generated by the Low Income Housing Projects operating loss for the year ended December 31, 2014.


(2)	This amount reduces the tax credits and benefits expected to be generated by the Low Income Housing Projects for the year ended December 31, 2014.


(3)	This amount represents the net tax benefit expected to be realized for the year ended December 31, 2014 in determining the Company's effective tax rate as of March 31, 2014.