Wesbanco Bank Community Development Corporation (“WBCDC”), a consolidated subsidiary of Wesbanco Bank, is a Certified Development Entity (“CDE”) with $125.0 million of New Markets Tax Credits (“NMTC”) of which $85.0 million had been invested in WBCDC at December 31, 2019. The remaining $40.0 million of NMTC, which had not been invested as of December 31, 2019, consists of $15 million and $25 million awarded to WBCDC in 2018 and 2019, respectively. The NMTC program is administered by the Community Development Financial Institutions Fund of the U.S. Treasury and is aimed at stimulating economic and community development and job creation in low-income communities. The program provides federal tax credits to investors who make qualified equity investments (“QEIs”) in a CDE. The CDE is required to invest the proceeds of each QEI in low-income communities, which are generally defined as those census tracts with poverty rates greater than 20% and/or median family incomes that are less than or equal to 80% of the area median family income.

The credit provided to the investor totals 39% of each QEI in a CDE and is claimed over a seven-year credit allowance period. In each of the first three years, the investor receives a credit equal to 5% of the total amount the investor paid to the CDE for each QEI. For each of the remaining four years, the investor receives a credit equal to 6% of the total amount the investor paid to the CDE for each QEI. As of December 31, 2019, Wesbanco has received $24.7 million in tax credits over the seven-year credit allowance periods for its $85.0 million NMTC authority invested in WBCDC. Wesbanco is eligible to receive an additional $8.5 million in tax credits with respect to aggregate QEI amounts invested with a remaining seven-year credit allowance period. In addition, Wesbanco will be eligible to receive $15.6 million in tax credits over a seven-year credit allowance period for the $40.0 million NMTC authority awarded in 2018 and 2019 that has yet to be invested.

Wesbanco Bank recognized $1.6 million, $0.7 million and $1.0 million in NMTC in its income tax provision for the years ended December 31, 2019, 2018 and 2017, respectively. These tax credits are subject to certain general business tax credit limitations and are therefore limited in deductibility on Wesbanco’s federal income tax return. As of December 31, 2019, no prior NMTC has been carried forward to future tax years.

The NMTC claimed by Wesbanco Bank with respect to each QEI remain subject to recapture over each QEI’s credit allowance period upon the occurrence of any of the following:

At December 31, 2019, 2018 and 2017, none of the above recapture events had occurred, nor in the opinion of management are such events anticipated to occur in the foreseeable future. Approximately half of the tax credits are no longer subject to recapture.

The following condensed financial statements summarize the financial position of WBCDC as of December 31, 2019, and the results of its operations and cash flows for the year ended December 31, 2019:

(in thousands)	December 31, 2019
Assets
Cash and due from banks	$	61,329
Loans, net of allowance for loan losses of $298		36,666
Investments		1,693
Other assets		26
Total Assets	$	99,714
Liabilities	$	319
Shareholder Equity		99,395
Total Liabilities and Shareholder Equity	$	99,714

(in thousands)	For the Year Ended December 31, 2019
Interest income
Loans	$	1,127
Other		25
Total interest income		1,152
Provision for loan losses		37
Net interest income after provision for loan losses		1,115
Gain on investments		252
Non-interest expense		235
Income before provision for income taxes		1,132
Provision for income taxes		260
Net income	$	872

(in thousands)	For the Year Ended December 31, 2019
Operating Activities
Net income	$	872
Provision for loan losses		37
Gain on investments		(252	)
Net change in other assets		49
Net change in other liabilities		113
Net cash provided by operating activities		819
Investing Activities
Increase in loans		(7,201	)
Net cash used in investing activities		(7,201	)
Financing Activities
Qualified equity investment by parent company		25,000
Net cash provided by financing activities		25,000
Net increase in cash and cash equivalents		18,618
Cash and cash equivalents at beginning of year		42,711
Cash and cash equivalents at end of year	$	61,329