6.	Investments in Affordable Housing and Alternative Energy Partnership s

The Company holds ownership interests in a number of limited partnerships that were formed to develop and operate housing for lower-income tenants throughout the United States and alternative energy partnerships that qualify for energy tax credits. The Company evaluates its interests in these partnerships to determine whether they meet the definition of a Variable Interest Entity (“VIE”) and whether the Company is required to consolidate these entities. A VIE is consolidated by its primary beneficiary, which is the party that has both (i) the power to direct the activities that most significantly impact the economic performance of the VIE and (ii) a variable interest that could potentially be significant to the VIE. To determine whether or

not

a variable interest the Company holds could potentially be significant to the VIE, the Company considers both qualitative and quantitative factors regarding the nature, size and form of the Company's involvement with the VIE. While the Company has determined that its interests in these entities meet the definition of a variable interest in accordance with ASC

810,

the Company has determined that the Company is

not

the primary beneficiary in all but

nine

of these partnerships because the Company does

not

have the power to direct the activities that most significantly impact the economic performance of the entities including operational and credit risk management activities. As the Company is

not

the primary beneficiary, the Company did

not

consolidate the entities.

The investments in these entities approximates the maximum exposure to loss as a result of the Company’s involvement with these unconsolidated entities. The balance of the Company’s investments in these entities was

$282.7

million and

$272.9

million as of

December 31, 2018

and

2017,

respectively.

The Company’s investments in these partnerships, net, are presented in the table below:

	As of December 31,
(In thousands)	2018		2017

Investments in affordable housing partnerships, net	$	259,046	$	260,112
Other borrowings for affordable housing limited partnerships	$	17,298	$	17,481
Investments in affordable housing and alternative energy partnerships, unfunded commitments	$	113,046	$	124,657
Investments in alternative energy tax credit partnerships, net	$	23,688	$	12,759

December 31, 2018,

nine

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

$23.8

million at

December 31, 2018,

and by

$23.6

million at

December 31, 2017.

Recourse in other borrowings for affordable housing limited partnerships is limited to the assets of the limited partnerships. Investments in alternative energy partnerships were

$23.7

million as of

December 31, 2018.

December 31, 2018,

$7.8

million of this investment is in an escrow account with a major bank. These funds will be disbursed in

2019

for solar energy systems to be installed in

2019

and will generate solar tax credits of

$8.0

million. Unfunded commitments for affordable housing limited partnerships and alternative energy tax credit partnerships were recorded under other liabilities.

The Company’s unfunded commitments related to investments in qualified affordable housing and alternative energy partnerships, net, are estimated to be paid as follows:

	Amount
Year Ending December 31,	(In thousands)
2019	$	55,962
2020		29,267
2021		11,669
2022		11,182
2023		1,473
Thereafter		3,493
Total unfunded commitments	$	113,046

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

-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

$200.5

million for Federal and

$1.8

million for state as of

December 31, 2018.

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. In

2018,

non-interest expense included a

$4.5

million impairment charge for investments in low income housing partnerships. In

2017,

the Bank took a

$2.6

million pretax write-down of low-income housing tax credit investments, as a result of the enactment of the Tax Cuts and Jobs Act.

The following table summarizes the Company’s usage of affordable housing and other tax credits including energy tax credits.

	As of December 31,
(In thousands)	2018		2017		2016

Affordable housing and other tax credits recognized	$	18,860	$	17,727	$	13,422
Alternative energy tax credit usage	$	15,013	$	3,301	$	24,472