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Tax Credit Investments (Tables)

12 Months Ended

Dec. 31, 2023

Tax Credit Investments

Summary of investments in qualified affordable housing projects and other tax credit investments

The following table presents a summary of the Company’s investments in qualified affordable housing projects and other tax credit investments at December 31, 2023 and 2022:


(dollars in thousands)				December 31, 2023						December 31, 2022
Investment		Accounting Method ⁽¹⁾			Investment			Unfunded Commitment ⁽²⁾			Investment			Unfunded Commitment
Low Income Housing Tax Credit (LIHTC)		Proportional Amortization		$	16,897		$	7,579		$	4,701		$	—
Federal Historic Tax Credit (FHTC)		Equity			N/A			N/A			1,785			323
Federal Historic Tax Credit (FHTC)		Proportional Amortization			3,403			2,353			N/A			N/A
Total				$	20,300		$	9,932		$	6,486		$	323

(1)	The Company early adopted ASU 2023-02 applying the modified retrospective method. Effective January 1, 2023, historic tax credits were accounted for under the proportional amortization method.

(2)	All commitments are expected to be paid by the Company by December 31, 2024.

Schedule of amortization expense and tax benefit for qualified affordable housing projects and other tax credit investments

The following table presents a summary of the amortization expense and tax benefit recognized for the Company’s qualified affordable housing projects and other tax credit investments during 2023, 2022 and 2021:


		Year Ended
		December 31,
(dollars in thousands)		2023			2022			2021
Amortization Expense⁽¹⁾
LIHTC		$	1,810		$	271		$	280
FHTC			668			408			562
Total		$	2,478		$	679		$	842
Tax Benefit Recognized⁽²⁾
LIHTC		$	(1,693)		$	(330)		$	(330)
FHTC			(912)			(607)			(625)
Total		$	(2,605)		$	(937)		$	(955)

(1)

The amortization expense for the LIHTC investments are included in income tax expense. Prior to 2023, the amortization for the FHTC tax credits are included in noninterest expense. Beginning January 1, 2023, with the adoption of ASU 2023-02, the amortization expense for the FHTC investments are included in income tax expense.

(2)	All of the tax benefits recognized are included in income tax expense. Prior to 2023, the tax benefit recognized for the FHTC investments primarily reflected the tax credits generated from the investments, and excluded the net tax expense/benefit of the investments’ income/loss.