Comprehensive Income

12 Months Ended

Dec. 31, 2020

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

CONNECTONE BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 16 – Comprehensive Income

Total comprehensive income includes all changes in equity during a period from transactions and other events and circumstances from non-owner sources. The Company’s other comprehensive income is comprised of unrealized holding gains and losses on securities available-for-sale, unrealized gains and losses on cash flow hedges, obligations for defined benefit pension plan and an adjustment to reflect the curtailment of the Company’s defined benefit pension plan, each net of taxes.

The following table represents the reclassification out of accumulated other comprehensive (loss) income for the periods presented:

Details about Accumulated Other Comprehensive Income (Loss) Components	Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)						Affected Line Item in the Consolidated Statements of Income
	For the Year Ended December 31,
(dollars in thousands)	2020		2019		2018
Sale of investment securities available-for-sale	$	29	$	(280)	$	-	Net gains (losses) on sale of investment securities
		(6)		79		-	Income tax expense
		23		(201)		-
Net interest (expense) income on swaps		(1,577)		677		464	Interest expense
		443		(190)		(130)	Income tax expense
		(1,134)		487		334
Amortization of pension plan net actuarial losses		(301)		(358)		(359)	Salaries and employee benefits
		84		101		101	Income tax benefit
		(217)		(257)		(258)
Total reclassification	$	(1,328)	$	29	$	76

Accumulated other comprehensive income (loss) as of December 31, 2020 and 2019 consisted of the following:

	2020		2019
	(dollars in thousands)
Investment securities available-for-sale, net of tax	$	7,859	$	2,724
Cash flow hedge, net of tax		(1,520)		(193)
Defined benefit pension and post-retirement plans, net of tax		(3,542)		(3,678)
Total	$	2,797	$	(1,147)

Effective January 1, 2018, the Company implemented ASU 2018-02, “Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” Under ASU 2018-02, the FASB amended existing guidance to allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from The Tax Cuts and Jobs Act of 2017. In order to comply with this new ASU, the Company recorded an adjustment to the Consolidated Statement of Condition on January 1, 2018 of approximately $709 thousand that increased retained earnings and increased accumulated other comprehensive loss.

Effective January 1, 2018, the Company implemented ASU 2016-01, “Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” Under ASU 2016-01, equity securities, with certain exceptions, are to be measured at fair value with changes in fair value recognized in net income. In order to comply with this new ASU, the Company recorded a cumulative-effect adjustment to the Consolidated Statement of Condition of approximately $55 thousand.