VARIABLE INTEREST ENTITIES

3 Months Ended

Mar. 31, 2025

VARIABLE INTEREST ENTITIES

VARIABLE INTEREST ENTITIES

NOTE 12—VARIABLE INTEREST ENTITIES

The Company provides alternative investment management services through the syndication of tax credit funds and development of affordable housing projects. To facilitate the syndication and development of affordable housing projects, the Company is involved with the acquisition and/or formation of limited partnerships and joint ventures with investors, property developers, and property managers that are variable interest entities (“VIEs”). The Company’s continuing involvement in the VIEs usually includes either serving as the manager of the VIE or as a majority investor in the VIE with a property developer or manager serving as the manager of the VIE.

A detailed discussion of the Company’s accounting policies regarding the consolidation of VIEs and significant transactions involving VIEs is included in NOTE 2 and NOTE 17 of the 2024 Form 10-K.

As of March 31, 2025 and December 31, 2024, the assets and liabilities of the consolidated tax credit funds were insignificant. The table below presents the assets and liabilities of the Company’s consolidated joint venture development VIEs included in the Condensed Consolidated Balance Sheets:


Consolidated VIEs (in thousands)			March 31, 2025			December 31, 2024
Assets:
Cash and cash equivalents		$	460		$	863
Restricted cash			3,968			3,939
Receivables, net			26,402			26,570
Other Assets			45,235			44,892
Total assets of consolidated VIEs		$	76,065		$	76,264

Liabilities:
Other liabilities		$	56,866		$	55,527
Total liabilities of consolidated VIEs		$	56,866		$	55,527

The table below presents the carrying value and classification of the Company’s interests in nonconsolidated VIEs included in the Condensed Consolidated Balance Sheets:


Nonconsolidated VIEs (in thousands)			March 31, 2025			December 31, 2024
Assets
Committed investments in tax credit equity		$	337,510		$	313,230
Other assets: Equity-method investments			52,713			50,592
Total interests in nonconsolidated VIEs		$	390,223		$	363,822

Liabilities
Commitments to fund investments in tax credit equity		$	295,052		$	274,975
Total commitments to fund nonconsolidated VIEs		$	295,052		$	274,975

Maximum exposure to losses⁽¹⁾⁽²⁾		$	390,223		$	363,822

(1)

Maximum exposure is determined as “Total interests in nonconsolidated VIEs.” The maximum exposure for the Company’s investments in tax credit equity is limited to the carrying value of its investment, as there are no funding obligations or other commitments related to the nonconsolidated VIEs other than the amounts presented in the table above.

(2)

Based on historical experience and the underlying expected cash flows from the underlying investment, the maximum exposure of loss is not representative of the actual loss, if any, that the Company may incur.