OTHER COMPREHENSIVE INCOME (LOSS) |
|
11. |
OTHER COMPREHENSIVE INCOME (LOSS) |
Other comprehensive income (loss) included in the consolidated statements of shareholders’ equity consists of unrealized gains and losses on available for sale securities, disproportional tax effects and changes in unrealized gains and losses on the postretirement liability. The change includes reclassification of net gains or (losses) and impairment charges on sales of securities of $153,000 and $11,000 for the three months ended March 31, 2016 and 2015, respectively. Reclassifications also include amortization of unrealized gains on postretirement plan and accretion of unrealized loss on held to maturity securities.
Other comprehensive income (loss) components and related tax effects for the three-month periods are as follows:
|
Unrealized
Gains (Losses)
on Securities
Available for
Sale |
|
Disproportionate
Tax Effect from
Securities
Available for
Sale |
|
Losses on
Securities
Transferred
From
Available for
Sale
to Held to
Maturity |
|
Unrealized
Gains (Losses)
from
Postretirement
Plan |
|
Disproportionate
Tax Effect from
Postretirement
Plan |
|
Total |
|
March 31, 2016 |
(Dollars in thousands) |
|
Balances at beginning of period, net
of tax |
$ |
(2,492 |
) |
$ |
(17,110 |
) |
$ |
(960 |
) |
$ |
831 |
|
$ |
511 |
|
$ |
(19,220 |
) |
Other comprehensive income
before reclassifications |
|
6,528 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
6,528 |
|
Amortization of unrealized gains of
postretirement plan
recognized in other
comprehensive income |
|
— |
|
|
— |
|
|
— |
|
|
(181 |
) |
|
— |
|
|
(181 |
) |
Accretion of unrealized losses of
securities transferred from
available for sale to held to
maturity recognized in other
comprehensive income |
|
— |
|
|
— |
|
|
34 |
|
|
— |
|
|
— |
|
|
34 |
|
Reclassification adjustment for
gains realized in income |
|
(99 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(99 |
) |
Net current period other
comprehensive income |
|
6,429 |
|
|
— |
|
|
34 |
|
|
(181 |
) |
|
— |
|
|
6,282 |
|
Balances at end of period, net of
tax |
$ |
3,937 |
|
$ |
(17,110 |
) |
$ |
(926 |
) |
$ |
650 |
|
$ |
511 |
|
$ |
(12,938 |
) |
|
Unrealized
Gains (Losses)
on Securities
Available for
Sale |
|
Disproportionate
Tax Effect from
Securities
Available for
Sale |
|
Unrealized
Gains (Losses)
from
Postretirement
Plan |
|
Disproportionate
Tax Effect from Postretirement
Plan |
|
Total |
|
March 31, 2015 |
(Dollars in thousands) |
|
Balances at beginning of period, net
of tax |
$ |
(4,315 |
) |
$ |
(17,110 |
) |
$ |
916 |
|
$ |
511 |
|
$ |
(19,998 |
) |
Other comprehensive income before
reclassifications |
|
3,897 |
|
|
— |
|
|
— |
|
|
— |
|
|
3,897 |
|
Reclassification adjustment for
gains realized in income |
|
(7 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(7 |
) |
Net current period other comprehensive
income |
|
3,890 |
|
|
— |
|
|
— |
|
|
— |
|
|
3,890 |
|
Balances at end of period, net of tax |
$ |
(425 |
) |
$ |
(17,110 |
) |
$ |
916 |
|
$ |
511 |
|
$ |
(16,108 |
) |
As of June 30, 2014, management concluded it was more likely than not that the Company’s net deferred tax asset (DTA) would be realized and accordingly determined a full deferred tax valuation allowance was no longer required. Upon reversal of the former full deferred tax valuation allowance as of June 30, 2014, certain disproportionate tax effects are retained in accumulated other comprehensive income (loss) totaling approximately a ($16.6) million loss. Almost the entire disproportionate tax effect is attributable to valuation allowance expense recorded through other comprehensive income (loss) on the tax benefit of losses sustained on the available for sale securities portfolio while the Company was in a full deferred tax valuation allowance. This valuation allowance was appropriately reversed through continuing operations at June 30, 2014, leaving the original expense in accumulated other comprehensive income (loss), where it will remain in accordance with the Company’s election of the “portfolio approach”, until such time as the Company would cease to have an available for sale security portfolio.
The following are significant amounts reclassified out of each component of accumulated comprehensive income (loss) for the three months ended March 31, 2016:
|
Amount Reclassified |
|
Affected Line Item on |
|
From Accumulated |
|
the Statement Where |
Details About Accumulated Other Comprehensive |
Other Comprehensive |
|
Net Income is |
Income Components |
Income |
|
Presented |
|
(Dollars in thousands) |
|
|
Realized net gains on the sale of available for sale securities |
$ |
(153 |
) |
Net gains on securities available for sale |
|
|
54 |
|
Tax expense |
|
|
(99 |
) |
Net of tax |
Amortization of postretirement benefits prior service costs |
|
(278 |
) |
Reduction in salaries and employee benefits |
|
|
97 |
|
Tax expense |
|
|
(181 |
) |
Net of tax |
Total reclassification during the period |
$ |
(280 |
) |
Increase to net income |
The following is significant amounts reclassified out of each component of accumulated comprehensive income (loss) for the three months ended March 31, 2015:
|
Amount Reclassified |
|
Affected Line Item on |
|
From Accumulated |
|
the Statement Where |
Details About Accumulated Other Comprehensive |
Other Comprehensive |
|
Net Income is |
Income Components |
Income |
|
Presented |
|
(Dollars in thousands) |
|
|
Realized net gains on the sale of available for sale securities |
$ |
(11 |
) |
Net gains on securities available for sale |
|
|
4 |
|
Tax expense |
Total reclassification during the period |
$ |
(7 |
) |
Net of tax, increase to net income |
|