Accumulated Other Comprehensive Income (Loss) (Tables)

12 Months Ended

Dec. 31, 2020

Equity [Abstract]

Accumulated Other Comprehensive Loss

The following table presents changes in accumulated other comprehensive income (loss) balances:

Year Ended December 31,	2020		2019		2018
	(in millions)
Unrealized gains (losses) on investment securities:
Balance at beginning of period	$	(116)	$	(519)	$	(250)
Cumulative effect adjustment to initially apply new accounting guidance for measuring credit losses on securities available-for-sale, net of tax of $1 million(1)	2		—		—
Cumulative effect adjustment to initially apply new accounting guidance for equity investments which were previously classified as available-for-sale, net of tax of $2 million(2)	—		—		4
Cumulative effect adjustment to initially apply new accounting guidance for stranded tax effects resulting from Tax Legislation(3)	—		—		(53)
Balance at beginning of period, adjusted	(114)		(519)		(299)
Other comprehensive income (loss) for period:
Net unrealized gains (losses) arising during period, net of tax of $298 million, $145 million and $(68) million, respectively	944		459		(215)
Reclassification adjustment for gains realized in net income (loss), net of tax of $(33) million, $(21) million and $(6) million, respectively(4)	(104)		(67)		(18)
Reversal of provision for credit losses realized in net income (loss), net of tax of less than $(1) million(5)	(2)		—		—
Amortization of net unrealized losses on securities transferred from available-for-sale to held-to-maturity realized in net income (loss), net of tax of $8 million, $4 million and $4 million, respectively(6)	26		11		13
Total other comprehensive income (loss) for period	864		403		(220)
Balance at end of period	750		(116)		(519)
Unrealized gains (losses) on fair value option liabilities attributable to our own credit spread:
Balance at beginning of period	(9)		301		(19)
Cumulative effect adjustment to initially apply new accounting guidance for stranded tax effects resulting from Tax Legislation(3)	—		—		(4)
Balance at beginning of period, adjusted	(9)		301		(23)
Other comprehensive income (loss) for period:
Net unrealized gains (losses) arising during period, net of tax of $8 million, $(68) million and $103 million, respectively	24		(217)		324
Reclassification adjustment for a gain realized in net income (loss), net of tax of $(30) million(7)	—		(93)		—
Total other comprehensive income (loss) for period	24		(310)		324
Balance at end of period	15		(9)		301
Unrealized gains (losses) on derivatives designated as cash flow hedges:
Balance at beginning of period	(151)		(159)		(164)
Cumulative effect adjustment to initially apply new accounting guidance for stranded tax effects resulting from Tax Legislation(3)	—		—		(35)
Balance at beginning of period, adjusted	(151)		(159)		(199)
Other comprehensive income (loss) for period:
Net unrealized gains (losses) arising during period, net of tax of $20 million, $(5) million and $7 million, respectively	64		(19)		22
Reclassification adjustment for losses realized in net income (loss), net of tax of $3 million, $8 million and $5 million, respectively(8)	8		27		18
Total other comprehensive income for period	72		8		40
Balance at end of period	(79)		(151)		(159)
Pension and postretirement benefit liability:
Balance at beginning of period	(3)		11		2
Cumulative effect adjustment to initially apply new accounting guidance for stranded tax effects resulting from Tax Legislation(3)	—		—		1
Balance at beginning of period, adjusted	(3)		11		3
Other comprehensive income (loss) for period:
Change in unfunded pension and postretirement liability, net of tax of $(1) million, $(5) million and $3 million, respectively	(4)		(14)		8
Total other comprehensive income (loss) for period	(4)		(14)		8
Balance at end of period	(7)		(3)		11
Total accumulated other comprehensive income (loss) at end of period	$	679	$	(279)	$	(366)

(1)See Note 2, "Summary of Significant Accounting Policies and New Accounting Pronouncements," for additional discussion.

(2)As a result of adopting new accounting guidance in 2018, beginning January 1, 2018, changes in fair value for equity securities are recognized in net income (loss). Prior to January 1, 2018, changes in fair value for equity securities classified as available-for-sale were recognized in other comprehensive income.

(3)See Note 17, "Income Taxes," for additional discussion.

(4)Amount reclassified to net income (loss) is included in other securities gains, net in our consolidated statement of income (loss).

(5)Changes in the allowance for credit losses on securities available-for-sale are included in the provision for credit losses in our consolidated statement of income (loss).

(6)Amount amortized to net income (loss) is included in interest income in our consolidated statement of income (loss). During 2014, we transferred securities from available-for-sale to held-to-maturity. At the date of transfer, AOCI included net pretax unrealized losses related to the transferred securities which are being amortized over the remaining contractual life of each security as an adjustment of yield in a manner consistent with the amortization of any premium or discount.

(7)In 2019, HSBC Bank USA repurchased long-term debt that was designated under fair value option. As a result, the cumulative gain attributable to our own credit spread associated with the debt was reclassified to other income in our consolidated statement of income (loss).

(8)Amount reclassified to net income (loss) is included in net interest income in our consolidated statement of income (loss).