Accumulated Other Comprehensive Income (Loss)

AOCI includes net income as well as unrealized gains and losses, net of tax, on AFS securities and derivative instruments, as well as changes in the funded status of our defined benefit pension plan. Unrealized gains and losses and changes in the funded status of the pension plan, net of tax, are excluded from net income, and are reflected as a direct charge or credit to shareholders’ equity. Comprehensive income (loss) and the related components are disclosed in the consolidated statements of comprehensive income.

The following table provides a roll-forward of the changes in AOCI by component for the years ended December 31, 2016, 2017 and 2018 (net of tax):



	Unrealized Holding Gains (Losses) on AFS Securities			Unrealized Gains (Losses) on Derivative Instruments			Change in Unrecognized Pension Cost on Defined Benefit Pension Plan			Total
Balance, January 1, 2016	$	3,536		$	—		$	(3,315	)	$	221
OCI before reclassifications	(5,865		)	248			282			(5,335		)
Amounts reclassified from AOCI	525			—			238			763
Subtotal	(5,340		)	248			520			(4,572		)
Tax effect	1,834			(84		)	(177		)	1,573
OCI, net of tax	(3,506		)	164			343			(2,999		)
Balance, December 31, 2016	30			164			(2,972		)	(2,778		)
OCI before reclassifications	289			43			11			343
Amounts reclassified from AOCI	(142		)	—			412			270
Subtotal	147			43			423			613
Tax effect	89			(15		)	(144		)	(70		)
OCI, net of tax	236			28			279			543
One-time non-cash tax rate adjustment due to the Tax Act	125			38			(530		)	(367		)
Balance, December 31, 2017	391			230			(3,223		)	(2,602		)
OCI before reclassifications	(7,229		)	33			265			(6,931		)
Amounts reclassified from AOCI	—			—			345			345
Subtotal	(7,229		)	33			610			(6,586		)
Tax effect	1,415			(7		)	(128		)	1,280
OCI, net of tax	(5,814		)	26			482			(5,306		)
Adoption of ASU 2016-01	223			—			—			223
Balance, December 31, 2018	$	(5,200	)	$	256		$	(2,741	)	$	(7,685	)

Included in OCI for the year ended December 31, 2018 are changes in unrealized holding gains and losses related to auction rate money market preferred stocks. These investments, for federal income tax purposes, have no deferred federal income taxes related to unrealized holding gains or losses given the nature of the investments.

In accordance with the Tax Act, the effect of income tax law changes on deferred taxes also applies to items recognized in other comprehensive income. In January 2018, FASB issued ASU 2018-02 which allowed for the "stranded" tax effects in AOCI to be reclassified to retained earnings rather than income tax expense. We early adopted this guidance and applied this accounting alternative in our consolidated statements of changes in shareholders equity as of December 31, 2017.

A summary of the components of unrealized holding gains on AFS securities included in OCI follows for the years ended December 31:



	2018									2017								2016
	Auction Rate Money Market Preferred Stocks			All Other AFS Securities			Total			Auction Rate Money Market Preferred Stocks		All Other AFS Securities			Total			Auction Rate Money Market Preferred and Preferred Stocks		All Other AFS securities			Total
Unrealized gains (losses) arising during the period	$	(495	)	$	(6,734	)	$	(7,229	)	$	407	$	(118	)	$	289		$	54	$	(5,919	)	$	(5,865	)
Reclassification adjustment for net (gains) losses included in net income	—			—			—			—		(142		)	(142		)	—		(245		)	(245		)
Reclassification adjustment for impairment loss included in net income	—			—			—			—		—			—			—		770			770
Net unrealized gains (losses)	(495		)	(6,734		)	(7,229		)	407		(260		)	147			54		(5,394		)	(5,340		)
Tax effect ⁽¹⁾	—			1,415			1,415			—		89			89			—		1,834			1,834
Unrealized gains (losses), net of tax	$	(495	)	$	(5,319	)	$	(5,814	)	$	407	$	(171	)	$	236		$	54	$	(3,560	)	$	(3,506	)

⁽¹⁾ Calculations are based on a federal income tax rate of 21% in 2018 and 34% in 2017 and 2016.

The following table details reclassification adjustments and the related affected line items in our consolidated statements of income for the years ended December 31:



Details about AOCI components	Amount Reclassified from AOCI							Affected Line Item in the Consolidated Statements of Income
	2018		2017		2016
Unrealized holding gains (losses) on AFS securities
	$	—	$	142	$	245		Net gains on sale of AFS securities
	—		—		(770		)	Other noninterest expenses
	—		142		(525		)	Income before federal income tax expense
	—		48		(179		)	Federal income tax expense (benefit) ⁽¹⁾
	$	—	$	94	$	(346	)	Net income

Change in unrecognized pension cost on defined benefit pension plan
	$	345	$	412	$	238		Other noninterest expenses
	72		140		81			Federal income tax expense ⁽¹⁾
	$	273	$	272	$	157		Net income

⁽¹⁾ Calculations are based on a federal income tax rate of 21% in 2018 and 34% in 2017 and 2016.