| OTHER COMPREHENSIVE INCOME |
OTHER COMPREHENSIVE INCOME
The components of other comprehensive income for the three-month and six-month periods ended June 30, 2017 and 2016, were as follows:
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Three Months Ended
June 30, 2017 |
|
Tax (Expense) |
(dollar amounts in thousands) |
Pretax |
|
Benefit |
|
After-tax |
Noncredit-related impairment recoveries (losses) on debt securities not expected to be sold |
$ |
2,478 |
|
|
$ |
(876 |
) |
|
$ |
1,602 |
|
Unrealized holding gains (losses) on available-for-sale debt securities arising during the period |
53,285 |
|
|
(18,811 |
) |
|
34,474 |
|
Less: Reclassification adjustment for net losses (gains) included in net income |
3,988 |
|
|
(1,410 |
) |
|
2,578 |
|
Net change in unrealized holding gains (losses) on available-for-sale debt securities |
59,751 |
|
|
(21,097 |
) |
|
38,654 |
|
Net change in unrealized holding gains (losses) on available-for-sale equity securities |
— |
|
|
— |
|
|
— |
|
Unrealized gains (losses) on derivatives used in cash flow hedging relationships arising during the period |
1,220 |
|
|
(427 |
) |
|
793 |
|
Less: Reclassification adjustment for net (gains) losses included in net income |
427 |
|
|
(150 |
) |
|
277 |
|
Net change in unrealized gains (losses) on derivatives used in cash flow hedging relationships |
1,647 |
|
|
(577 |
) |
|
1,070 |
|
Net change in pension and other post-retirement obligations |
1,198 |
|
|
(419 |
) |
|
779 |
|
Total other comprehensive income (loss) |
$ |
62,596 |
|
|
$ |
(22,093 |
) |
|
$ |
40,503 |
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Three Months Ended
June 30, 2016 |
|
Tax (Expense) |
(dollar amounts in thousands) |
Pretax |
|
Benefit |
|
After-tax |
Noncredit-related impairment recoveries (losses) on debt securities not expected to be sold |
$ |
1,032 |
|
|
$ |
(365 |
) |
|
$ |
667 |
|
Unrealized holding gains (losses) on available-for-sale debt securities arising during the period |
50,278 |
|
|
(18,234 |
) |
|
32,044 |
|
Less: Reclassification adjustment for net losses (gains) included in net income |
(2,294 |
) |
|
811 |
|
|
(1,483 |
) |
Net change in unrealized holding gains (losses) on available-for-sale debt securities |
49,016 |
|
|
(17,788 |
) |
|
31,228 |
|
Net change in unrealized holding gains (losses) on available-for-sale equity securities |
66 |
|
|
(24 |
) |
|
42 |
|
Unrealized gains (losses) on derivatives used in cash flow hedging relationships arising during the period |
1,989 |
|
|
(696 |
) |
|
1,293 |
|
Less: Reclassification adjustment for net (gains) losses included in net income |
(248 |
) |
|
89 |
|
|
(159 |
) |
Net change in unrealized gains (losses) on derivatives used in cash flow hedging relationships |
1,741 |
|
|
(607 |
) |
|
1,134 |
|
Net change in pension and other post-retirement obligations |
1,293 |
|
|
(453 |
) |
|
840 |
|
Total other comprehensive income (loss) |
$ |
52,116 |
|
|
$ |
(18,872 |
) |
|
$ |
33,244 |
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Six Months Ended
June 30, 2017 |
|
Tax (expense) |
(dollar amounts in thousands) |
Pretax |
|
Benefit |
|
After-tax |
Noncredit-related impairment recoveries (losses) on debt securities not expected to be sold |
$ |
3,288 |
|
|
$ |
(1,162 |
) |
|
$ |
2,126 |
|
Unrealized holding gains (losses) on available-for-sale debt securities arising during the period |
62,282 |
|
|
(21,607 |
) |
|
40,675 |
|
Less: Reclassification adjustment for net losses (gains) included in net income |
9,862 |
|
|
(3,487 |
) |
|
6,375 |
|
Net change in unrealized holding gains (losses) on available-for-sale debt securities |
75,432 |
|
|
(26,256 |
) |
|
49,176 |
|
Net change in unrealized holding gains (losses) on available-for-sale equity securities |
— |
|
|
— |
|
|
— |
|
Unrealized gains (losses) on derivatives used in cash flow hedging relationships arising during the period |
(611 |
) |
|
214 |
|
|
(397 |
) |
Less: Reclassification adjustment for net (gains) losses included in net income |
987 |
|
|
(346 |
) |
|
641 |
|
Net change in unrealized gains (losses) on derivatives used in cash flow hedging relationships |
376 |
|
|
(132 |
) |
|
244 |
|
Net change in pension and other post-retirement obligations |
1,906 |
|
|
(667 |
) |
|
1,239 |
|
Total other comprehensive income (loss) |
$ |
77,714 |
|
|
$ |
(27,055 |
) |
|
$ |
50,659 |
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Six Months Ended
June 30, 2016 |
|
Tax (expense) |
(dollar amounts in thousands) |
Pretax |
|
Benefit |
|
After-tax |
Noncredit-related impairment recoveries (losses) on debt securities not expected to be sold |
$ |
(2,602 |
) |
|
$ |
920 |
|
|
$ |
(1,682 |
) |
Unrealized holding gains (losses) on available-for-sale debt securities arising during the period |
130,746 |
|
|
(46,919 |
) |
|
83,827 |
|
Less: Reclassification adjustment for net losses (gains) included in net income |
(2,758 |
) |
|
975 |
|
|
(1,783 |
) |
Net change in unrealized holding gains (losses) on available-for-sale debt securities |
125,386 |
|
|
(45,024 |
) |
|
80,362 |
|
Net change in unrealized holding gains (losses) on available-for-sale equity securities |
170 |
|
|
(60 |
) |
|
110 |
|
Unrealized gains (losses) on derivatives used in cash flow hedging relationships arising during the period |
16,218 |
|
|
(5,676 |
) |
|
10,542 |
|
Less: Reclassification adjustment for net (gains) losses included in net income |
(892 |
) |
|
313 |
|
|
(579 |
) |
Net change in unrealized gains (losses) on derivatives used in cash flow hedging relationships |
15,326 |
|
|
(5,363 |
) |
|
9,963 |
|
Net change in pension and other post-retirement obligations |
2,586 |
|
|
(905 |
) |
|
1,681 |
|
Total other comprehensive income (loss) |
$ |
143,468 |
|
|
$ |
(51,352 |
) |
|
$ |
92,116 |
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The following table presents activity in accumulated other comprehensive income (loss), net of tax, for the six-month periods ended June 30, 2017 and 2016:
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(dollar amounts in thousands) |
Unrealized gains
and (losses) on
debt securities
(1)
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Unrealized
gains and
(losses) on
equity
securities
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|
Unrealized
gains and
(losses) on
cash flow
hedging
derivatives
|
|
Unrealized gains
(losses) for
pension and
other post-
retirement
obligations
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Total |
December 31, 2015 |
$ |
8,361 |
|
|
$ |
176 |
|
|
$ |
(3,948 |
) |
|
$ |
(230,747 |
) |
|
$ |
(226,158 |
) |
Other comprehensive income before reclassifications |
82,145 |
|
|
110 |
|
|
10,542 |
|
|
— |
|
|
92,797 |
|
Amounts reclassified from accumulated OCI to earnings |
(1,783 |
) |
|
— |
|
|
(579 |
) |
|
1,681 |
|
|
(681 |
) |
Period change |
80,362 |
|
|
110 |
|
|
9,963 |
|
|
1,681 |
|
|
92,116 |
|
June 30, 2016 |
$ |
88,723 |
|
|
$ |
286 |
|
|
$ |
6,015 |
|
|
$ |
(229,066 |
) |
|
$ |
(134,042 |
) |
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|
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December 31, 2016 |
$ |
(192,764 |
) |
|
$ |
287 |
|
|
$ |
(2,634 |
) |
|
$ |
(205,905 |
) |
|
$ |
(401,016 |
) |
Other comprehensive income before reclassifications |
42,801 |
|
|
— |
|
|
(397 |
) |
|
— |
|
|
42,404 |
|
Amounts reclassified from accumulated OCI to earnings |
6,375 |
|
|
— |
|
|
641 |
|
|
1,239 |
|
|
8,255 |
|
Period change |
49,176 |
|
|
— |
|
|
244 |
|
|
1,239 |
|
|
50,659 |
|
June 30, 2017 |
$ |
(143,588 |
) |
|
$ |
287 |
|
|
$ |
(2,390 |
) |
|
$ |
(204,666 |
) |
|
$ |
(350,357 |
) |
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(1) |
Amounts at June 30, 2017 and December 31, 2016 include $98 million and $82 million, respectively, of net unrealized gains on securities transferred from the available-for-sale securities portfolio to the held-to-maturity securities portfolio. The net unrealized gains will be recognized in earnings over the remaining life of the security using the effective interest method.
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The following table presents the reclassification adjustments out of accumulated OCI included in net income and the impacted line items as listed on the Unaudited Condensed Consolidated Statements of Income for the three-month and six-month periods ended June 30, 2017 and 2016:
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Reclassifications out of accumulated OCI |
Accumulated OCI components |
Amounts reclassified from accumulated OCI |
|
Location of net gain (loss) reclassified from accumulated OCI into earnings |
|
Three Months Ended |
|
|
(dollar amounts in thousands) |
June 30, 2017 |
|
June 30, 2016 |
|
|
Gains (losses) on debt securities: |
|
|
|
|
|
Amortization of unrealized gains (losses) |
$ |
(2,284 |
) |
|
$ |
740 |
|
|
Interest income - held-to-maturity securities - taxable |
Realized gain (loss) on sale of securities |
1,855 |
|
|
1,630 |
|
|
Noninterest income - net gains (losses) on sale of securities |
OTTI recorded |
(3,559 |
) |
|
(76 |
) |
|
Noninterest income - net gains (losses) on sale of securities |
|
(3,988 |
) |
|
2,294 |
|
|
Total before tax |
|
1,410 |
|
|
(811 |
) |
|
Tax (expense) benefit |
|
$ |
(2,578 |
) |
|
$ |
1,483 |
|
|
Net of tax |
Gains (losses) on cash flow hedging relationships: |
|
|
|
|
|
Interest rate contracts |
$ |
(427 |
) |
|
$ |
248 |
|
|
Interest income - loans and leases |
Interest rate contracts |
— |
|
|
— |
|
|
Noninterest income - other income |
|
(427 |
) |
|
248 |
|
|
Total before tax |
|
150 |
|
|
(89 |
) |
|
Tax (expense) benefit |
|
$ |
(277 |
) |
|
$ |
159 |
|
|
Net of tax |
Amortization of defined benefit pension and post-retirement items: |
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|
|
|
|
Actuarial gains (losses) |
$ |
(1,690 |
) |
|
$ |
(1,785 |
) |
|
Noninterest expense - personnel costs |
Prior service credit |
492 |
|
|
492 |
|
|
Noninterest expense - personnel costs |
|
(1,198 |
) |
|
(1,293 |
) |
|
Total before tax |
|
419 |
|
|
453 |
|
|
Tax (expense) benefit |
|
$ |
(779 |
) |
|
$ |
(840 |
) |
|
Net of tax |
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|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
Reclassifications out of accumulated OCI |
Accumulated OCI components |
Amounts reclassified from accumulated OCI |
|
Location of net gain (loss) reclassified from accumulated OCI into earnings |
|
Six Months Ended |
|
|
(dollar amounts in thousands) |
June 30, 2017 |
|
June 30, 2016 |
|
|
Gains (losses) on debt securities: |
|
|
|
|
|
Amortization of unrealized gains (losses) |
$ |
(5,890 |
) |
|
$ |
1,204 |
|
|
Interest income - held-to-maturity securities - taxable |
Realized gain (loss) on sale of securities |
(389 |
) |
|
1,630 |
|
|
Noninterest income - net gains (losses) on sale of securities |
OTTI recorded |
(3,583 |
) |
|
(76 |
) |
|
Noninterest income - net gains (losses) on sale of securities |
|
(9,862 |
) |
|
2,758 |
|
|
Total before tax |
|
3,487 |
|
|
(975 |
) |
|
Tax (expense) benefit |
|
$ |
(6,375 |
) |
|
$ |
1,783 |
|
|
Net of tax |
Gains (losses) on cash flow hedging relationships: |
|
|
|
|
|
Interest rate contracts |
$ |
(987 |
) |
|
$ |
893 |
|
|
Interest income - loans and leases |
Interest rate contracts |
— |
|
|
(1 |
) |
|
Noninterest income - other income |
|
(987 |
) |
|
892 |
|
|
Total before tax |
|
346 |
|
|
(313 |
) |
|
Tax (expense) benefit |
|
$ |
(641 |
) |
|
$ |
579 |
|
|
Net of tax |
Amortization of defined benefit pension and post-retirement items: |
|
|
|
|
|
Actuarial gains (losses) |
$ |
(2,890 |
) |
|
$ |
(3,570 |
) |
|
Noninterest expense - personnel costs |
Prior service credit |
984 |
|
|
984 |
|
|
Noninterest expense - personnel costs |
|
(1,906 |
) |
|
(2,586 |
) |
|
Total before tax |
|
667 |
|
|
905 |
|
|
Tax (expense) benefit |
|
$ |
(1,239 |
) |
|
$ |
(1,681 |
) |
|
Net of tax |
|