Tax Credit Investments

6 Months Ended

Jun. 30, 2019

Income Tax Disclosure [Abstract]

Tax Credit Investments

Tax Credit Investments

The Corporation's tax credit investments ("TCIs") are primarily related to investments promoting qualified affordable housing projects and investments in community development entities. The majority of these tax-advantaged investments support the Corporation's corporate mission and vision, as well as regulatory compliance with the Community Reinvestment Act. The Corporation's investments in these projects generate a return primarily through the realization of federal income tax credits and deductions for operating losses over a specified time period.

The TCIs are included in other assets, with any unfunded equity commitments carried in other liabilities on the consolidated balance sheets. Certain TCIs qualify for the proportional amortization method and are amortized over the period the Corporation expects to receive the tax credits, with the expense included within income taxes on the consolidated statements of income. Other TCIs are accounted for under the equity method of accounting, with amortization included within non-interest expense on the consolidated statements of income. This amortization includes equity in partnership losses and the systematic write-down of investments over the period in which income tax credits are earned. All of the TCIs are evaluated for impairment at the end of each reporting period. As illustrated below, realizable tax credits are included within income taxes and offset the amortization expense recorded.

The following table presents the balances of the Corporation's TCIs and related unfunded commitments:

		June 30,		December 31,
		2019		2018
Included in other assets:		(in thousands)
Affordable housing tax credit investment, net		$	161,986	$	170,401
Other tax credit investments, net		72,786		72,584
	Total TCIs, net	$	234,772	$	242,985
Included in other liabilities:
Unfunded affordable housing tax credit commitments		$	18,542	$	23,196
Other tax credit investment liabilities		61,483		59,823
	Total unfunded tax credit investment commitments and liabilities	$	80,025	$	83,019

The following table presents other information relating to the Corporation's TCIs:

		Three Months Ended						Six Months Ended
		June 30						June 30
		2019			2018			2019			2018
Components of income taxes:		(in thousands)
Affordable housing tax credits and other tax benefits		$	(7,575	)	$	(7,543	)	$	(15,150	)	$	(15,087	)
Other tax credit investment credits and tax benefits		(1,135		)	(1,597		)	(2,271		)	(3,193		)
Amortization of affordable housing investments, net of tax benefit		5,494			5,319			10,989			10,917
Deferred tax expense		239			336			477			671
	Total reduction in income tax expense	$	(2,977	)	$	(3,485	)	$	(5,955	)	$	(6,692	)
Amortization of TCIs:
Affordable housing tax credits investment		$	823		$	839		$	1,645		$	1,678
Other tax credit investment amortization		669			798			1,338			1,596
	Total amortization of TCIs	$	1,492		$	1,637		$	2,983		$	3,274