Note 4 - Qualified Affordable Housing Project Investment

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Affordable Housing Program [Text Block]

4.

       Qualified Affordable Housing Project Investment

On

January 19, 2018,

the Bank entered into an agreement to invest in qualified affordable housing projects through a limited liability company. At

June 30, 2018,

the balance of the Bank’s investment was

$3.8

million and is reflected in other assets on the consolidated balance sheet. The unfunded commitment related to the qualified affordable housing project investment was

$3.3

million at

June 30, 2018

and is reflected in other liabilities on the consolidated balance sheet. The Bank expects to fulfill the commitment as capital calls are made through

2029.

The investment is accounted for using the proportional amortization method. During the

three

months ended

June 30, 2018,

the Bank recognized amortization expense of

$82,000,

which was included in income tax expense on the consolidated statement of income. Additionally, during the

three

months ended

June 30, 2018,

the Bank recognized tax credits and other tax benefits from its qualified affordable housing project investment of

$98,000.

During the

six

months ended

June 30, 2018,

the Bank recognized amortization expense of

$164,000,

included in income tax expense on the consolidated statement of income and tax credits and other tax benefits from its qualified affordable housing project investment of

$196,000.