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Note 6 - Affordable Housing Tax Credit Limited Partnership Investments

9 Months Ended

Sep. 30, 2024

NOTE 6 - AFFORDABLE HOUSING TAX CREDIT LIMITED PARTNERSHIP INVESTMENTS

LCNB is a limited partner in multiple limited partnerships that sponsor affordable housing projects utilizing the Low Income Housing Tax Credit pursuant to Section 42 of the Internal Revenue Code. The purpose of the investments is to achieve a satisfactory return on capital, to facilitate the sale of additional affordable housing product offerings, and to assist in achieving goals associated with the Community Reinvestment Act. The primary activities of the limited partnerships include the identification, development, and operation of multi-family housing that is leased to qualifying residential tenants.

The following table presents the balances of LCNB's affordable housing tax credit investments and related unfunded commitments at September 30, 2024 and December 31, 2023 (in thousands):

	September 30,		December 31,
	2024		2023
Affordable housing tax credit investment	$	18,950		16,950
Less amortization		5,721		4,626
Net affordable housing tax credit investment	$	13,229		12,324

Unfunded commitment	$	4,775		4,527

The net affordable housing tax credit investment is included in other assets and the unfunded commitment is included in accrued interest and other liabilities in the consolidated condensed balance sheets.

LCNB anticipates to fund the unfunded commitment over 12.0 years.

The following table presents other information relating to LCNB's affordable housing tax credit investments for the three and nine months ended September 30, 2024 and 2023 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Tax credits and other tax benefits recognized	$	450		438		1,338		1,302
Tax credit amortization expense included in provision for income taxes		355		362		1,096		1,080