Tax Credit Investments

6 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

Tax Credit Investments

Tax Credit Investments

TCIs are primarily for investments promoting qualified affordable housing projects and investments in community development entities. 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 recorded 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. All of the TCIs are evaluated for impairment at the end of each reporting period.

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

		June 30,		December 31,
		2022		2021
Included in other assets:		(in thousands)
Affordable housing tax credit investments		$	168,500	$	161,052
Other tax credit investments		62,043		42,987
	Total TCIs	$	230,543	$	204,039
Included in other liabilities:
Unfunded affordable housing tax credit commitments		$	56,630	$	49,364
Other tax credit liabilities		48,113		33,941
	Total unfunded tax credit commitments and liabilities	$	104,743	$	83,305

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

		Three months ended June 30				Six months ended June 30
		2022		2021		2022		2021
Components of income taxes:		(in thousands)
Affordable housing tax credits and other tax benefits		$	(6,209)	$	(6,543)	$	(12,417)	$	(13,031)
Other tax credit investment credits and tax benefits		(845)		(722)		(1,690)		(1,445)
Amortization of affordable housing investments, net of tax benefit		4,824		4,323		9,649		8,689
Deferred tax expense		192		160		383		320
	Total net reduction in income tax expense	$	(2,038)	$	(2,782)	$	(4,075)	$	(5,467)
Amortization of TCIs:
	Total amortization of TCIs	$	695	$	1,563	$	1,391	$	3,094