The Company utilizes special purpose entities (SPEs) that constitute investments in limited partnerships that undertake certain development projects to achieve federal and state tax credits. These SPEs are typically structured as VIEs and are thus subject to consolidation by the reporting enterprise that absorbs the majority of the economic risks and rewards of the VIE. To determine whether it must consolidate a VIE, the Company analyzes the design of the VIE to identify the sources of variability within the VIE, including an assessment of the nature of risks created by the assets and other contractual obligations of the VIE, and determines whether it will absorb a majority of that variability.

 

The Company has invested in limited partnerships as a funding investor. The partnerships are single purpose entities that lend money to real estate investors for the purpose of acquiring and operating, or rehabbing, commercial property. The investments qualify for New Market Tax Credits under Internal Revenue Code Section as amended, or Historic Rehabilitation Tax Credits under Code Section as amended, or Low-Income Housing Tax Credits under Code Section as amended. For each of the partnerships, the Company acts strictly in a limited partner capacity. The Company has determined that it is the primary beneficiary of these partnerships because it does have the power to direct the activities of the entity that most significantly impact the entities’ economic performance. The amount of recorded investment in these partnerships as of and was million and million, respectively, of which million and million as of and respectively, are included in loans of the Company. The remaining amounts are included in other assets.