Qualified Affordable Housing Project Investments

The Company's investment in Qualified Affordable Housing Funds that generate Low Income Housing Tax Credits at December 31, 2017 and 2016 was $11.6 million and $7.0 million, respectively, recorded in other assets. Total unfunded commitments related to the investments in qualified affordable housing funds totaled $1.3 million and $749 thousand at December 31, 2017 and 2016, respectively. The Company has invested in three separate LIHTC funds, which provide the Company with CRA credit. Additionally, the investment in LIHTC funds provide the Company with tax credits and with operating loss tax benefits over an approximately 10 year period. None of the original investment will be repaid. The investments in the WNC Institutional Tax Credit funds are being accounted for using the cost method, under which the Company amortizes as non-interest expense the initial cost of the investment equally over the expected time period in which tax credits and other tax benefits will be received. The investment in the Sycamore Court fund qualifies for and is being accounted for using the proportional amortization method, which allows for the amortization of the investment to be in proportion to the total of the tax credits and other tax benefits that are allocated to the investor. The tax credits and operating loss tax benefits are recognized in the income statement as a component of income tax expense (benefit) for all LIHTC funds.

The following table presents the Company's original investment in the LIHTC funds, the current recorded investment balance, and the unfunded liability balance of each investment at December 31, 2017 and 2016. In addition, the table reflects the tax credits and tax benefits recorded by the Company during 2017 and 2016, the amortization of the investment and the net impact to the Company's income tax provision for 2017 and 2016.



Qualified Affordable Housing Funds at December 31, 2017	Original Investment Value		Current Recorded Investment		Unfunded Liability Obligation		Tax Credits and Tax Deductions (1)		Amortization of Investments (2)		Net Income Tax Benefit

WNC Institutional Tax Credit Fund X, CA Series 11 L.P.	$	5,000	$	2,750	$	85	$	455	$	500	$	(663	)
WNC Institutional Tax Credit Fund X, CA Series 12, L.P.	5,000		3,250		288		482		500		(690		)
Sycamore Court	6,181		5,582		927		1,577		599		(782		)
Total - Investments in Qualified Affordable Housing Projects	$	16,181	$	11,582	$	1,300	$	2,514	$	1,599	$	(2,135	)

Qualified Affordable Housing Funds at December 31, 2016	Original Investment Value		Current Recorded Investment		Unfunded Liability Obligation		Tax Credits and Tax Deductions (1)		Amortization of Investments (2)		Net Income Tax Benefit

WNC Institutional Tax Credit Fund X, CA Series 11 L.P.	$	5,000	$	3,250	$	223	$	488	$	542	$	(596	)
WNC Institutional Tax Credit Fund X, CA Series 12, L.P.	5,000		3,750		526		473		782		(637		)
Total - Investments in Qualified Affordable Housing Projects	$	10,000	$	7,000	$	749	$	961	$	1,324	$	(1,233	)
(1) The amounts reflected in this column represent both the tax credits, as well as the tax benefits generated by the Qualified Affordable Housing Projects operating loss for the year, which are included in the calculation of income tax expense. (2) This amount represents the amortization of the investment cost of the LIHTC.