CHFC 2017 Annual Report

Note 23: Accumulated Other Comprehensive Loss The following table summarizes the changes within each component of accumulated other comprehensive income (loss), net of related tax benefit/expense for the years ended December 31, 2017, 2016 and 2015: in thousands) Unrealized gains (losses) on securities available-for-sale, net of tax Defined Benefit Pension Plans Unrealized gains (losses) on cash flow hedges, net of tax Total For the year ended December 31, 2017 Beginning balance $ (14,142) $ (25,894) $ — $ (40,036) Other comprehensive loss before reclassifications 826 8,457 2,771 12,054 Amounts reclassified from accumulated other comprehensive income 4,802 1,139 1,061 7,002 Net current period other comprehensive income (loss) 5,628 9,596 3,832 19,056 Reclassification of certain deferred tax effects (1) (1,834) (3,510) 826 (4,518) Ending balance $ (10,348) $ (19,808) $ 4,658 $ (25,498) For the year ended December 31, 2016 Beginning balance $ (1,888) $ (27,144) $ — $ (29,032) Other comprehensive income (loss) before reclassifications (12,170) (229) — (12,399) Amounts reclassified from accumulated other comprehensive income (84) 1,479 — 1,395 Net current period other comprehensive income (loss) (12,254) 1,250 — (11,004) Ending balance $ (14,142) $ (25,894) $ — $ (40,036) For the year ended December 31, 2015 Beginning balance $ (210) $ (32,243) $ — $ (32,453) Other comprehensive income (loss) before reclassifications (1,269) 2,443 — 1,174 Amounts reclassified from accumulated other comprehensive income (409) 2,656 — 2,247 Net current period other comprehensive income (loss) (1,678) 5,099 — 3,421 Ending balance $ (1,888) $ (27,144) $ — $ (29,032) (1) The reclassification from accumulated other comprehensive income (loss) to retained earnings was due to the early adoption of ASU 2018-02, see Note 1 for further information. The following table summarizes the amounts reclassified out of each component of accumulated other comprehensive income (loss) for the years ended December 31, 2017, 2016 and 2015: (Dollars in thousands) Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) Affected Line Item in the Income Statement December 31, 2017 December 31, 2016 December 31, 2015 Gains and losses on available- for-sale securities $ (7,388) $ 129 $ 630 Net gain on sale of investment securities (noninterest income) 2,586 (45) (221) Income tax (expense)/benefit $ (4,802) $ 84 $ 409 Net Income Amortization of defined benefit pension plan items $ (1,752) $ (2,276) $ (4,086) Salaries, wages and employee benefits (operating expenses) 613 797 1,430 Income tax (expense)/benefit $ (1,139) $ (1,479) $ (2,656) Net Income Gains and losses on cash flow hedges 1,633 — — Interest on short-term borrowings (interest expense) (572) — — Income tax (expense)/benefit $ 1,061 $ — $ — Net Income (loss) Chemical Financial Corporation Notes to Consolidated Financial Statements December 31, 2017 159