INVESTMENTS IN UNCONSOLIDATED SUBSIDIARIES

3 Months Ended

Mar. 31, 2023

Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures [Abstract]

INVESTMENTS IN UNCONSOLIDATED SUBSIDIARIES

6. INVESTMENTS IN UNCONSOLIDATED ENTITIES

The components of the Company's investments in unconsolidated entities were as follows:


(dollars in thousands)	March 31, 2023		December 31, 2022
Investments in low income housing tax credit partnerships, net of amortization	$	40,225	$	40,939
Investments in common securities of statutory trusts	1,547		1,547
Investments in affiliates	136		110
Other	4,045		4,045
Total	$	45,953	$	46,641

The Company invests in low-income housing tax credit ("LIHTC") and other partnerships. The Company had commitments to fund LIHTC partnerships totaling $47.8 million and $47.8 million as of March 31, 2023 and December 31, 2022, respectively. Unfunded commitments related to LIHTC partnerships totaled $23.6 million at March 31, 2023 and December 31, 2022, and are included in other liabilities in the Company's consolidated balance sheets. The investments are accounted for under the proportional amortization method and are included in investments in unconsolidated entities in the Company's consolidated balance sheets.

During the first quarter of 2022, the Company invested $2.0 million in Swell Financial, Inc. ("Swell"), which included $1.5 million in other intangible assets and services provided in exchange for Swell non-voting common stock and $0.5 million in cash in exchange for Swell preferred stock. Swell launched a consumer banking app that combines checking, credit and more into one integrated account, and Central Pacific Bank will serve as the bank sponsor. The Company does not have the ability to exercise significant influence over Swell and the investment does not have a readily determinable fair value. As a result, the Company determined that the cost method of accounting for the investment was appropriate. The investment is included in investments in unconsolidated entities.

During the second quarter of 2021, the Company committed $2.0 million to the JAM FINTOP Banktech Fund, L.P., a venture capital investment fund designed to help develop and accelerate technology adoption at community banks across the United States. The Company had $1.1 million and $1.3 million in unfunded commitments related to the investment as of March 31, 2023 and December 31, 2022, respectively, which is recorded in other liabilities. The investment is accounted for under the cost method and is included in investment in unconsolidated entities.

The expected payments for the unfunded commitments of LIHTC and other partnerships as of March 31, 2023 for the remainder of fiscal year 2023, the next five succeeding fiscal years, and all years thereafter are as follows:


(dollars in thousands)
Year Ending December 31,	LIHTC		Other		Total
2023 (remainder)	$	9,693	$	1,123	$	10,816
2024	9,280		—		9,280
2025	4,248		—		4,248
2026	26		—		26
2027	26		—		26
2028	20		—		20
Thereafter	313		—		313
Total unfunded commitments	$	23,606	$	1,123	$	24,729

The following table presents amortization and tax credits recognized associated with our investments in LIHTC partnerships for the three months ended March 31, 2023 and March 31, 2022:


	Three Months Ended March 31,
(dollars in thousands)	2023		2022
Proportional amortization method:
Amortization expense recognized in income tax expense	$	714	$	607
Tax credits recognized in income tax expense	892		709