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Accumulated Other Comprehensive Income (Loss) ("AOCI")
 9 Months Ended
Sep. 30, 2021
Accumulated Other Comprehensive Income Other Comprehensive Income [Abstract]  
Accumulated Other Comprehensive Income (Loss) ("AOCI")

Note 17 – Accumulated Other Comprehensive Income (Loss) (“AOCI”)

The following table presents a summary of the changes in each component of AOCI for the nine months ended September 30, 2021:

 

First American Financial Corporation

 

 

NCI

 

 

 

 

 

(in thousands)

Unrealized
gains (losses)
on debt securities

 

 

Foreign
currency
translation
adjustment

 

 

Pension
benefit
adjustment

 

 

Accumulated
other
comprehensive
income (loss)

 

 

Accumulated
other
comprehensive
income (loss)

 

 

Balance

 

 

Balance at December 31, 2020

$

171,752

 

 

$

(37,990

)

 

$

(94,221

)

 

$

39,541

 

 

$

1

 

 

$

39,542

 

 

Change in unrealized gains (losses) on debt securities

 

(138,430

)

 

 

—

 

 

 

—

 

 

 

(138,430

)

 

 

(1

)

 

 

(138,431

)

 

Change in unrealized gains (losses) on debt securities for which credit-related portion was recognized in earnings

 

(365

)

 

 

—

 

 

 

—

 

 

 

(365

)

 

 

—

 

 

 

(365

)

 

Change in foreign currency translation adjustment

 

—

 

 

 

(3,844

)

 

 

—

 

 

 

(3,844

)

 

 

—

 

 

 

(3,844

)

 

Amortization of net actuarial loss

 

—

 

 

 

—

 

 

 

5,070

 

 

 

5,070

 

 

 

—

 

 

 

5,070

 

 

Amortization of prior service credit

 

—

 

 

 

—

 

 

 

(978

)

 

 

(978

)

 

 

—

 

 

 

(978

)

 

Tax effect

 

33,942

 

 

 

9

 

 

 

(1,086

)

 

 

32,865

 

 

 

—

 

 

 

32,865

 

 

Balance at September 30, 2021

$

66,899

 

 

$

(41,825

)

 

$

(91,215

)

 

$

(66,141

)

 

$

—

 

 

$

(66,141

)

 

The following table presents the other comprehensive income (loss) reclassification adjustments for the three months ended September 30, 2021 and 2020:

 

(in thousands)

 

Unrealized

gains (losses)

on debt securities

 

 

Foreign

currency

translation

adjustment

 

 

Pension

benefit

adjustment

 

 

Total

other

comprehensive

income (loss)

 

Three Months Ended September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pretax change before reclassifications

 

$

(49,970

)

 

$

(12,948

)

 

$

—

 

 

$

(62,918

)

Reclassifications out of AOCI

 

 

(6,925

)

 

 

—

 

 

 

1,364

 

 

 

(5,561

)

Tax effect

 

 

14,181

 

 

 

329

 

 

 

(362

)

 

 

14,148

 

Total other comprehensive income (loss), net of tax

 

$

(42,714

)

 

$

(12,619

)

 

$

1,002

 

 

$

(54,331

)

Three Months Ended September 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pretax change before reclassifications

 

$

9,110

 

 

$

10,817

 

 

$

—

 

 

$

19,927

 

Reclassifications out of AOCI

 

 

(6,627

)

 

 

—

 

 

 

544

 

 

 

(6,083

)

Tax effect

 

 

(499

)

 

 

(743

)

 

 

(145

)

 

 

(1,387

)

Total other comprehensive income (loss), net of tax

 

$

1,984

 

 

$

10,074

 

 

$

399

 

 

$

12,457

 

 

The following table presents the other comprehensive income (loss) reclassification adjustments for the nine months ended September 30, 2021 and 2020:

 

(in thousands)

 

Unrealized

gains (losses)

on debt securities

 

 

Foreign

currency

translation

adjustment

 

 

Pension

benefit

adjustment

 

 

Total

other

comprehensive

income (loss)

 

Nine Months Ended September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pretax change before reclassifications

 

$

(120,979

)

 

$

(3,844

)

 

$

—

 

 

$

(124,823

)

Reclassifications out of AOCI

 

 

(17,817

)

 

 

—

 

 

 

4,092

 

 

 

(13,725

)

Tax effect

 

 

33,942

 

 

 

9

 

 

 

(1,086

)

 

 

32,865

 

Total other comprehensive income (loss), net of tax

 

$

(104,854

)

 

$

(3,835

)

 

$

3,006

 

 

$

(105,683

)

Nine Months Ended September 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pretax change before reclassifications

 

$

102,392

 

 

$

(9,498

)

 

$

—

 

 

$

92,894

 

Reclassifications out of AOCI

 

 

(5,175

)

 

 

—

 

 

 

1,630

 

 

 

(3,545

)

Tax effect

 

 

(24,000

)

 

 

389

 

 

 

(433

)

 

 

(24,044

)

Total other comprehensive income (loss), net of tax

 

$

73,217

 

 

$

(9,109

)

 

$

1,197

 

 

$

65,305

 

The following table presents the effects of the reclassifications out of AOCI on the respective line items in the condensed consolidated statements of income:

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

Affected line items

(in thousands)

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

Unrealized gains (losses) on debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net realized gains on sales of debt securities

 

$

6,937

 

 

$

6,694

 

 

$

17,888

 

 

$

12,749

 

 

Net realized investment gains

Credit losses recognized on debt securities

 

 

(12

)

 

 

(67

)

 

 

(71

)

 

 

(7,574

)

 

Net realized investment gains

Pretax total

 

$

6,925

 

 

$

6,627

 

 

$

17,817

 

 

$

5,175

 

 

 

Tax effect

 

$

(1,726

)

 

$

(1,322

)

 

$

(4,357

)

 

$

(1,278

)

 

 

Pension benefit adjustment (1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of net actuarial loss

 

$

(1,690

)

 

$

(1,321

)

 

$

(5,070

)

 

$

(3,961

)

 

Other operating expenses

Amortization of prior service credit

 

 

326

 

 

 

777

 

 

 

978

 

 

 

2,331

 

 

Other operating expenses

Pretax total

 

$

(1,364

)

 

$

(544

)

 

$

(4,092

)

 

$

(1,630

)

 

 

Tax effect

 

$

363

 

 

$

145

 

 

$

1,086

 

 

$

433

 

 

 

 

(1)

Amounts are components of net periodic cost.  See Note 13 Employee Benefit Plans for additional details.