Under ASC 810-10-65, the Company is deemed to be the primary beneficiary and required to consolidate a variable interest entity (“VIE”) if it has a variable interest in the VIE that provides it with a controlling financial interest. For such purposes, the determination of whether a controlling financial interest exists is based on whether a single party has both the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and the obligation to absorb the losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. ASC 810-10-65, as amended, requires continual reconsideration of conclusions reached regarding which interest holder is a VIE’s primary beneficiary.

The Bank has invested in several affordable housing projects as a limited partner. The partnerships have qualified to receive annual affordable housing federal tax credits that are recognized as a reduction of current tax expense. The Company has determined that these structures meet the definition of VIE’s under Topic ASC 810 but that consolidation is not required, as the Bank is not the primary beneficiary. At March 31, 2019 and December 31, 2018, the Bank’s maximum exposure to loss associated with these limited partnerships was limited to the Bank’s investment. The Company accounts for these investments and the related tax credits using either the effective yield method or the proportional amortization method, depending upon the date of the investment. Under the effective yield method, the Bank recognizes the tax credits as they are allocated and amortizes the initial costs of the investments to provide a constant effective yield over the period that the tax credits are allocated. Under the proportional amortization method, the Bank amortizes the cost of the investment in proportion to 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. At March 31, 2019 and December 31, 2018, the Company had recorded investments in other assets on its consolidated balance sheets of approximately $25.2 million and $7.8 million, respectively related to these investments.

Additionally, the Company invests in other certain limited partnerships accounted for under the fair value practical expedient of net asset value totaling $11.6 million and $11.2 million as of March 31, 2019 and December 31, 2018, respectively. The company recognized $0.7 million gains for both three-month periods ended March 31, 2019 and 2018, related to these assets recorded at fair value through net income. Certain other limited partnerships without readily determinable fair values that do not qualify for the practical expedient are accounted for at their cost minus impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. These investments totaled $10.2 million and $8.7 million as of March 31, 2019 and December 31, 2018, respectively. Other limited partnerships are accounted for under the equity method totaling $9.2 million at both March 31, 2019 and December 31, 2018.

The following table presents a summary of the Company’s investments in limited partnerships subsequent to the adoption of ASU 2016-01 and as of March 31, 2019 and December 31, 2018:

(In thousands)	March 31, 2019		December 31, 2018
Affordable housing projects (amortized cost)	$	25,167	$	7,803
Limited partnerships accounted for under the fair value practical expedient of NAV		11,601		11,191
Limited partnerships without readily determinable fair values that do not qualify for the practical expedient of NAV accounted for under the cost method		10,208		8,714
Limited partnerships required to be accounted for under the equity method		9,209		9,209
Total investments in limited partnerships	$	56,185	$	36,917

Marketable equity securities carried at fair value consist of one CRA qualifying investment and is reported in other assets in the consolidated balance sheets. Total marketable equity securities were $6.1 million and $5.8 million at March 31, 2019 and December 31, 2018, respectively.

Effective January 1, 2018, Cadence adopted the new accounting guidance that requires equity investments with readily determinable fair values not held for trading to be recorded at fair value with changes in fair value reported in net income. Cadence elected a measurement alternative to fair value for certain equity investments without a readily determinable fair value. There were no downward and upward adjustments for impairments or price changes. The carrying amount of equity investments measured under the measurement alternative from observable transactions are as follows:

(In thousands)	Carrying Amount
Carrying value, December 31, 2018	$	8,714
Reclassifications		800
Distributions		(42	)
Contributions		736
Carrying value, March 31, 2019	$	10,208

During 2016, the Bank received net profits interests in oil and gas reserves, in connection with the reorganization under bankruptcy of two loan customers (one of these was sold during 2018). The Company has determined that these contracts meet the definition of VIE’s under Topic ASC 810, but that consolidation is not required as the Bank is not the primary beneficiary. The net profits interest is a financial instrument and recorded at estimated fair value, which was $5.3 million and $5.8 million at March 31, 2019 and December 31, 2018, respectively, representing the maximum exposure to loss as of that date.

The Company has established a rabbi trust related to the deferred compensation plan offered to certain of its employees. The Company contributes employee cash compensation deferrals to the trust. The assets of the trust are available to creditors of the Company only in the event the Company becomes insolvent. This trust is considered a VIE because either there is no equity at risk in the trust or because the Company provided the equity interest to its employees in exchange for services rendered. The Company is considered the primary beneficiary of the rabbi trust as it has the ability to select the underlying investments made by the trust, the activities that most significantly impact the economic performance of the rabbi trust. The Company includes the assets of the rabbi trust as a component of other assets and a corresponding liability for the associated benefit obligation in other liabilities in its consolidated balance sheets. At March 31, 2019 and December 31, 2018, the amount of rabbi trust assets and benefit obligation was $3.8 million and $3.6 million, respectively.