Note 6 - Investments in Affordable Housing and Alternative Energy Partnerships

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Investments in Affordable Housing [Text Block]

6

.     Investments in Affordable Housing

and Alternative Energy Partnerships

      The Company has invested in certain limited partnerships that were formed to develop and operate housing for lower-income

tenants

throughout the United States. The Company’s investments in these partnerships were

$236.8

million at

December

31,

2016,

and

$172.7

million at

December

31,

2015.

In addition, in

March

2016

and

April

2015,

the Company invested in alternative energy partnerships that qualify for energy tax credits.

     At

December

31,

2016,

seven

of the limited partnerships in which the Company has an equity interest were determined to be variable interest entities for which the Company is the primary beneficiary. The consolidation of these limited partnerships in the Company’s Consolidated Financial Statements increased total assets and liabilities by

$23.7

million at

December

31,

2016,

and by

$24.3

million at

December

31,

2015.

Other borrowings for affordable housing limited partnerships were

$17.7

million at

December

31,

2016,

and

$18.6

million at

December

31,

2015;

recourse is limited to the assets of the limited partnerships. Unfunded commitments for affordable housing limited partnerships of

$115.0

million as of

December

31,

2016,

and

$85.8

million as of

December

31,

2015,

were recorded under other liabilities. The scheduled funding date for unfunded commitment as of

December

31,

2016

are $

52.7

million in

2017,

$

33.4

million in

2018,

$22.7

million in

2019,

$2.6

million in

2020,

$0.6

million in

2021

and

$3.0

million thereafter.

     Each of the partnerships must meet regulatory requirements for affordable housing for a minimum

15

-year compliance period to fully utilize the tax credits. If the partnerships cease to qualify during the compliance period, the credits

may

be denied for any period in which the projects are not in compliance and a portion of the credits previously taken is subject to recapture with interest. The remaining tax credits to be utilized over a multiple-year period are

$160.2

million for Federal and

$3.3

million for state at

December

31,

2016.

The Company’s usage of affordable housing and other tax credits approximated

$13.4

million in

2016,

$10.1

million in

2015,

and

$10.2

million in

2014.

Losses in excess of the Bank’s investment in

three

limited partnerships have not been recorded in the Company’s Consolidated Financial Statements because the Company had fully satisfied all capital commitments required under the respective limited partnership agreements.

     Investment in alternative energy tax credit partnerships, net, was

$14.3

million at

December

31,

2016,

compared to

$10.5

million at

December

31,

2015.

The Company’s usage of energy tax credits approximated

$24.5

million in

2016

compared to

$20.9

million in

2015.