Comprehensive Income and Accumulated Other Comprehensive Income

3 Months Ended

Mar. 31, 2020

Comprehensive Income and Accumulated Other Comprehensive Income

Note 7. Comprehensive Income and Accumulated Other Comprehensive Income

Comprehensive income was $12.3 million for the three months ended March 31, 2020, compared to $25.2 million for the three months ended March 31, 2019. The difference between net income as reported and comprehensive income was due primarily to changes in unrealized gains and losses, net of tax on available-for-sale debt 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 comprehensive income, we used a 21 percent tax rate in 2020 and 2019. 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 March 31,
	2020			2019
	(in thousands)
Balance, beginning of period	$	12,211		$	(832	)
Other comprehensive income before reclassification		1,830			5,981
Amounts reclassified from accumulated other comprehensive income		(346	)		11
Change in deferred tax valuation allowance		—			(198	)
Net current period other comprehensive income		1,484			5,794
Balance, end of period	$	13,695		$	4,962

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 Comprehensive Income	Three Months Ended March 31,						Affected line item in the statement of income
	2020			2019
	(in thousands)
Unrealized gains (losses) on available-for- sale securities	$	438		$	(14	)	Net realized gains on investments
		438			(14	)	Income before income taxes
		(92	)		3		Income tax expense
	$	346		$	(11	)	Net income