Accumulated Other Comprehensive Income (Loss)

6 Months Ended

Jun. 30, 2019

Accumulated Other Comprehensive Income (Loss)


Note 9		Accumulated Other Comprehensive Income (Loss)

Shareholders’ equity is affected by transactions and valuations of asset and liability positions that require adjustments to accumulated other comprehensive income (loss). The reconciliation of the transactions affecting accumulated other comprehensive income (loss) included in shareholders’ equity is as follows:


Three Months Ended June 30 (Dollars in Millions)	Unrealized Gains (Losses) on Investment Securities Available-For- Sale			Unrealized Gains (Losses) on Investment Securities Transferred From Available-For-Sale to Held-To- Maturity			Unrealized Gains (Losses) on Derivative Hedges			Unrealized Gains (Losses) on Retirement Plans			Foreign Currency Translation			Total
2019
Balance at beginning of period	$	(363	)	$	13		$	51		$	(1,402	)	$	(72	)	$	(1,773	)
Changes in unrealized gains and losses		721			–			(135	)		–			–			586
Foreign currency translation adjustment (a)		–			–			–			–			(8	)		(8	)
Reclassification to earnings of realized gains and losses		(17	)		(3	)		(6	)		22			–			(4	)
Applicable income taxes		(178	)		1			35			(5	)		2			(145	)
Balance at end of period	$	163		$	11		$	(55	)	$	(1,385	)	$	(78	)	$	(1,344	)
2018
Balance at beginning of period	$	(1,017	)	$	19		$	152		$	(1,271	)	$	(76	)	$	(2,193	)
Changes in unrealized gains and losses		(212	)		–			33			2			–			(177	)
Foreign currency translation adjustment (a)		–			–			–			–			(8	)		(8	)
Reclassification to earnings of realized gains and losses		(10	)		(2	)		(2	)		35			–			21
Applicable income taxes		56			–			(7	)		(10	)		3			42
Balance at end of period	$	(1,183	)	$	17		$	176		$	(1,244	)	$	(81	)	$	(2,315	)

(a)	Represents the impact of changes in foreign currency exchange rates on the Company’s investment in foreign operations and related hedges.


Six Months Ended June 30 (Dollars in Millions)	Unrealized Gains (Losses) on Investment Securities Available-For- Sale			Unrealized Gains (Losses) on Investment Securities Transferred From Available-For-Sale to Held-To- Maturity			Unrealized Gains (Losses) on Derivative Hedges			Unrealized Gains (Losses) on Retirement Plans			Foreign Currency Translation			Total
2019
Balance at beginning of period	$	(946	)	$	14		$	112		$	(1,418	)	$	(84	)	$	(2,322	)
Changes in unrealized gains and losses		1,506			—			(209	)		—			—			1,297
Foreign currency translation adjustment (a)		—			—			—			—			8			8
Reclassification to earnings of realized gains and losses		(22	)		(4	)		(14	)		44			—			4
Applicable income taxes		(375	)		1			56			(11	)		(2	)		(331	)
Balance at end of period	$	163		$	11		$	(55	)	$	(1,385	)	$	(78	)	$	(1,344	)
2018
Balance at beginning of period	$	(357	)	$	17		$	71		$	(1,066	)	$	(69	)	$	(1,404	)
Revaluation of tax related balances (b)		(77	)		4			15			(229	)		(13	)		(300	)
Changes in unrealized gains and losses		(988	)		—			119			(1	)		—			(870	)
Foreign currency translation adjustment (a)		—			—			—			—			5			5
Reclassification to earnings of realized gains and losses		(15	)		(5	)		1			69			—			50
Applicable income taxes		254			1			(30	)		(17	)		(4	)		204
Balance at end of period	$	(1,183	)	$	17		$	176		$	(1,244	)	$	(81	)	$	(2,315	)

(a)	Represents the impact of changes in foreign currency exchange rates on the Company’s investment in foreign operations and related hedges.

(b)	Reflects the adoption of new accounting guidance on January 1, 2018 to reclassify the impact of the reduced federal statutory rate for corporations included in 2017 tax reform legislation from accumulated other comprehensive income to retained earnings.

Additional detail about the impact to net income for items reclassified out of accumulated other comprehensive income (loss) and into earnings is as follows:


	Impact to Net Income
	Three Months Ended June 30						Six Months Ended June 30						Affected Line Item in the Consolidated Statement of Income
(Dollars in Millions)	2019			2018			2019			2018			Affected Line Item in the Consolidated Statement of Income
Unrealized gains (losses) on investment securities available-for-sale
Realized gains (losses) on sale of investment securities	$	17		$	10		$	22		$	15		Total securities gains (losses), net
		(4	)		(3	)		(6	)		(4	)	Applicable income taxes
		13			7			16			11		Net-of-tax
Unrealized gains (losses) on investment securities transferred from available-for-sale to held-to-maturity
Amortization of unrealized gains		3			2			4			5		Interest income
		(1	)		–			(1	)		(1	)	Applicable income taxes
		2			2			3			4		Net-of-tax
Unrealized gains (losses) on derivative hedges
Realized gains (losses) on derivative hedges		6			2			14			(1	)	Interest expense
		(1	)		(1	)		(3	)		–		Applicable income taxes
		5			1			11			(1	)	Net-of-tax
Unrealized gains (losses) on retirement plans
Actuarial gains (losses) and prior service cost (credit) amortization		(22	)		(35	)		(44	)		(69	)	Other noninterest expense
		5			10			11			18		Applicable income taxes
		(17	)		(25	)		(33	)		(51	)	Net-of-tax
Total impact to net income	$	3		$	(15	)	$	(3	)	$	(37	)