Quarterly report pursuant to Section 13 or 15(d)

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
 3 Months Ended
Mar. 31, 2017
Equity [Abstract]  
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The change in accumulated other comprehensive income (loss) for the three months ended March 31, 2017 is summarized as follows, net of tax (dollars in thousands):

 
Unrealized
Gains (Losses)
on AFS
Securities
 
Unrealized Gain
for AFS
Securities
Transferred to
HTM
 
Change in Fair
Value of Cash
Flow Hedge
 
Unrealized Gains (Losses) on BOLI
 
Total
Balance - December 31, 2016
$
(542
)
 
$
3,377

 
$
(5,179
)
 
$
(1,465
)
 
$
(3,809
)
Other comprehensive income (loss)
3,637

 
—

 
(31
)
 
—

 
3,606

Amounts reclassified from accumulated other comprehensive income
(313
)
 
(184
)
 
180

 
109

 
(208
)
Net current period other comprehensive income (loss)
3,324

 
(184
)
 
149

 
109

 
3,398

Balance - March 31, 2017
$
2,782

 
$
3,193

 
$
(5,030
)
 
$
(1,356
)
 
$
(411
)
 

The change in accumulated other comprehensive income (loss) for the three months ended March 31, 2016 is summarized as follows, net of tax (dollars in thousands):

 
 
Unrealized Gains
(Losses) on AFS
Securities
 
Unrealized Gain
for AFS
Securities
Transferred to
HTM
 
Change in Fair
Value of Cash
Flow Hedge
 
Total
Balance - December 31, 2015
$
7,777

 
$
4,432

 
$
(5,957
)
 
$
6,252

Other comprehensive income (loss)
3,032

 
(292
)
 
(2,681
)
 
59

Amounts reclassified from accumulated other comprehensive income
(93
)
 
—

 
141

 
48

Net current period other comprehensive income (loss)
2,939

 
(292
)
 
(2,540
)
 
107

Balance - March 31, 2016
$
10,716

 
$
4,140

 
$
(8,497
)
 
$
6,359


 

Reclassifications of unrealized gains (losses) on available for sale securities are reported on the Company’s Consolidated Statements of Income as “Gains on securities transactions, net” with the corresponding income tax effect being reflected as a component of income tax expense. The Company reported gains of $481,000 and $143,000 for the three months ended March 31, 2017 and 2016, respectively, related to the sale of securities. The tax effects of these transactions during the three months ended March 31, 2017 and 2016 were $168,000 and $50,000, respectively, which amounts were included as a component of income tax expense.
 
During the second quarter of 2015, the Company transferred securities, which it intends and has the ability to hold until maturity, with a fair value of $201.8 million on the date of transfer, from securities available for sale to securities held to maturity. The securities included net pre-tax unrealized gains of $8.1 million at the date of transfer. Reclassifications of the unrealized gains on transferred securities are reported over time as accretion within interest income on the Company's Consolidated Statements of Income with the corresponding income tax effect being reflected as a component of income tax expense. The Company recorded accretion of $283,000 and $449,000 for the three months ended March 31, 2017 and 2016, respectively. The tax effect of these transactions during the three months ended March 31, 2017 and 2016 were $99,000 and $157,000, respectively, which were included as a component of income tax expense.


Reclassifications of the change in fair value of cash flow hedges are reported in interest income and interest expense on the Company’s Consolidated Statements of Income with the corresponding income tax effect being reflected as a component of income tax expense. The Company reported net interest expense of $277,000 and $217,000 for the three months ended March 31, 2017 and 2016, respectively. The tax effects of these transactions during the three months ended March 31, 2017 and 2016 were $97,000 and $76,000, respectively, which were included as a component of income tax expense.

Reclassifications of unrealized losses on BOLI are reported in salaries and benefits expense on the Company's Consolidated Statements of Income. The Company reported expenses of $109,000 and $0 for the three months ended March 31, 2017 and 2016, respectively.