Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 2020

Change in components of other comprehensive income (loss)

The following summarizes the change in the components of other comprehensive income.



	Three Months Ended June 30,
	2020						2019
	Pretax		Tax Expense/ (Benefit)		After-tax		Pretax		Tax Expense/ (Benefit)		After-tax
	(In Thousands)
Other comprehensive income:
Unrealized holding gains arising during period from debt securities available for sale	$	41,651	$	9,936	$	31,715	$	112,339	$	26,635	$	85,704
Less: reclassification adjustment for net gains on sale of debt securities in net income	3,477		829		2,648		—		—		—
Net change in unrealized gains on debt securities available for sale	38,174		9,107		29,067		112,339		26,635		85,704
Change in unamortized net holding gains on debt securities held to maturity	2,240		535		1,705		2,542		603		1,939
Less: non-credit related impairment on debt securities held to maturity	—		—		—		108		26		82
Change in unamortized non-credit related impairment on debt securities held to maturity	160		39		121		174		42		132
Net change in unamortized holding gains on debt securities held to maturity	2,400		574		1,826		2,608		619		1,989
Unrealized holding gains arising during period from cash flow hedge instruments	14,358		3,425		10,933		96,932		22,982		73,950
Change in defined benefit plans	—		—		—		—		—		—
Other comprehensive income	$	54,932	$	13,106	$	41,826	$	211,879	$	50,236	$	161,643


	Six Months Ended June 30,
	2020						2019
	Pretax		Tax Expense/ (Benefit)		After-tax		Pretax		Tax Expense/ (Benefit)		After-tax
	(In Thousands)
Other comprehensive income:
Unrealized holding gains arising during period from debt securities available for sale	$	172,594	$	41,180	$	131,414	$	180,107	$	42,703	$	137,404
Less: reclassification adjustment for net gains on sale of debt securities in net income	22,616		5,396		17,220		8,958		2,124		6,834
Net change in unrealized gains on debt securities available for sale	149,978		35,784		114,194		171,149		40,579		130,570
Change in unamortized net holding losses on debt securities held to maturity	4,309		1,029		3,280		4,826		1,144		3,682
Less: non-credit related impairment on debt securities held to maturity	—		—		—		108		26		82
Change in unamortized non-credit related impairment on debt securities held to maturity	315		76		239		656		156		500
Net change in unamortized holding gains on debt securities held to maturity	4,624		1,105		3,519		5,374		1,274		4,100
Unrealized holding gains arising during period from cash flow hedge instruments	375,321		89,551		285,770		128,450		30,447		98,003
Change in defined benefit plans	2,301		547		1,754		4,089		970		3,119
Other comprehensive income	$	532,224	$	126,987	$	405,237	$	309,062	$	73,270	$	235,792

Schedule of accumulated other comprehensive income (loss)

Activity in accumulated other comprehensive income (loss), net of tax was as follows:



	Unrealized Gains (Losses) on Debt Securities Available for Sale and Transferred to Held to Maturity			Accumulated Gains (Losses) on Cash Flow Hedging Instruments			Defined Benefit Plan Adjustment			Unamortized Impairment Losses on Debt Securities Held to Maturity			Total
	(In Thousands)
Balance, December 31, 2018	$	(158,433	)	$	6,175		$	(29,495	)	$	(5,095	)	$	(186,848	)
Cumulative effect of adoption of ASUs (1)	(25,844		)	(1,040		)	(7,351		)	(1,201		)	(35,436		)
	$	(184,277	)	$	5,135		$	(36,846	)	$	(6,296	)	$	(222,284	)
Other comprehensive income (loss) before reclassifications	137,404			95,867			—			(82		)	233,189
Amounts reclassified from accumulated other comprehensive income (loss)	(3,152		)	2,136			3,119			500			2,603
Net current period other comprehensive income	134,252			98,003			3,119			418			235,792
Balance, June 30, 2019	$	(50,025	)	$	103,138		$	(33,727	)	$	(5,878	)	$	13,508

Balance, December 31, 2019	$	(40,080	)	$	91,445		$	(46,666	)	$	(5,771	)	$	(1,072	)
Other comprehensive income before reclassifications	131,414			314,919			—			—			446,333
Amounts reclassified from accumulated other comprehensive (loss) income	(13,940		)	(29,149		)	1,754			239			(41,096		)
Net current period other comprehensive income	117,474			285,770			1,754			239			405,237
Balance, June 30, 2020	$	77,394		$	377,215		$	(44,912	)	$	(5,532	)	$	404,165


(1)	Related to the Company's adoption of ASU 2017-12 and ASU 2018-02 on January 1, 2019.

Schedule of reclassifications out of accumulated other comprehensive income

The following table presents information on reclassifications out of accumulated other comprehensive income (loss).



Details About Accumulated Other Comprehensive Income (Loss) Components	Amounts Reclassified From Accumulated Other Comprehensive Income (Loss)(1)												Condensed Consolidated Statements of Income Caption
	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
	(In Thousands)
Unrealized Gains (Losses) on Debt Securities Available for Sale and Transferred to Held to Maturity	$	3,477		$	—		$	22,616		$	8,958		Investment securities gains, net
	(2,240		)	(2,542		)	(4,309		)	(4,826		)	Interest on debt securities held to maturity
	1,237			(2,542		)	18,307			4,132
	(294		)	603			(4,367		)	(980		)	Income tax (expense) benefit
	$	943		$	(1,939	)	$	13,940		$	3,152		Net of tax

Accumulated Gains (Losses) on Cash Flow Hedging Instruments	$	33,833		$	(1,260	)	$	39,292		$	(2,470	)	Interest and fees on loans
	(590		)	(161		)	(1,009		)	(330		)	Interest on FHLB and other borrowings
	33,243			(1,421		)	38,283			(2,800		)
	(7,932		)	337			(9,134		)	664			Income tax (expense) benefit
	$	25,311		$	(1,084	)	$	29,149		$	(2,136	)	Net of tax

Defined Benefit Plan Adjustment	$	—		$	—		$	(2,301	)	$	(4,089	)	(2)
	—			—			547			970			Income tax benefit
	$	—		$	—		$	(1,754	)	$	(3,119	)	Net of tax

Unamortized Impairment Losses on Debt Securities Held to Maturity	$	(160	)	$	(174	)	$	(315	)	$	(656	)	Interest on debt securities held to maturity
	39			42			76			156			Income tax benefit
	$	(121	)	$	(132	)	$	(239	)	$	(500	)	Net of tax


(1)	Amounts in parentheses indicate debits to the Unaudited Condensed Consolidated Statements of Income.


(2)	These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 17, Benefit Plans, in the Notes to the December 31, 2019, Consolidated Financial Statements for additional details).

BBVA USA Bancshares, Inc. 10-Q