Note 7. Comprehensive Income and Accumulated Other Comprehensive Income

Comprehensive income was $17.2 million for the three months ended September 30, 2017, compared to $16.2 million for the three months ended September 30, 2016. Comprehensive income was $49.1 million for the nine months ended September 30, 2017, compared to $62.8 million for the same period in 2016. The difference between net income as reported and comprehensive income was due to changes in unrealized gains and losses, net of tax on available-for-sale securities.

Comprehensive income includes net income plus unrealized gains (losses) on our available-for-sale investment securities, net of tax. In reporting comprehensive income on a net basis in the statements of income, we used a 35 percent tax rate. The following table illustrates the changes in the balance of each component of accumulated other comprehensive income for each period presented in the interim financial statements.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
	(in thousands)
Beginning balance	$	2,416		$	8,309		$	(492	)	$	2,587
Other comprehensive income (loss) before reclassification		820			(1,589	)		4,032			4,286
Amounts reclassified from accumulated other comprehensive income		(203	)		(124	)		(507	)		(277	)
Net current period other comprehensive income (loss)		617			(1,713	)		3,525			4,009
Ending balance	$	3,033		$	6,596		$	3,033		$	6,596

The sale or other-than-temporary impairment of an available-for-sale security results in amounts being reclassified from accumulated other comprehensive income to current period net income. The effects of reclassifications out of accumulated other comprehensive income by the respective line items of net income are presented in the following table.

Component of Accumulated Other	Three Months Ended						Nine Months Ended						Affected line item in the
Comprehensive Income	September 30,						September 30,						statement of income
	2017			2016			2017			2016
	(in thousands)
Unrealized gains on available-for- sale securities	$	312		$	191		$	780		$	426		Net realized gains (losses) on investments
		312			191			780			426		Income before income taxes
		(109	)		(67	)		(273	)		(149	)	Income tax expense
	$	203		$	124		$	507		$	277		Net income