Accumulated Other Comprehensive Income (Loss) ("AOCI")

3 Months Ended

Mar. 31, 2021

Accumulated Other Comprehensive Income Other Comprehensive Income [Abstract]

Accumulated Other Comprehensive Income (Loss) ("AOCI")

Note 15 – Accumulated Other Comprehensive Income (Loss) (“AOCI”)

The following table presents a summary of the changes in each component of AOCI for the three months ended March 31, 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		(131,433	)		—			—			(131,433	)		(1	)		(131,434	)
Change in unrealized gains (losses) on debt securities for which credit-related portion was recognized in earnings		(387	)		—			—			(387	)		—			(387	)
Change in foreign currency translation adjustment		—			3,532			—			3,532			—			3,532
Amortization of net actuarial loss		—			—			1,690			1,690			—			1,690
Amortization of prior service credit		—			—			(326	)		(326	)		—			(326	)
Tax effect		32,075			(158	)		(362	)		31,555			—			31,555
Balance at March 31, 2021	$	72,007		$	(34,616	)	$	(93,219	)	$	(55,828	)	$	—		$	(55,828	)

The following table presents the other comprehensive income (loss) reclassification adjustments for the three months ended March 31, 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 March 31, 2021
Pretax change before reclassifications	$	(127,206	)	$	3,532		$	—		$	(123,674	)
Reclassifications out of AOCI		(4,615	)		—			1,364			(3,251	)
Tax effect		32,075			(158	)		(362	)		31,555
Total other comprehensive income (loss), net of tax	$	(99,746	)	$	3,374		$	1,002		$	(95,370	)
Three Months Ended March 31, 2020
Pretax change before reclassifications	$	15,396		$	(34,688	)	$	—		$	(19,292	)
Reclassifications out of AOCI		2,822			—			543			3,365
Tax effect		(5,514	)		1,132			(144	)		(4,526	)
Total other comprehensive income (loss), net of tax	$	12,704		$	(33,556	)	$	399		$	(20,453	)

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

(in thousands)	Three Months Ended March 31,						Affected line items
	2021				2020
Unrealized gains (losses) on debt securities:
Net realized gains (losses) on sales of debt securities	$	4,655		$	4,671		Net realized investment gains (losses)
Credit losses recognized on debt securities		(40	)		(7,493	)	Net realized investment gains (losses)
Pretax total	$	4,615		$	(2,822	)
Tax effect	$	(1,123	)	$	854
Pension benefit adjustment (1):
Amortization of net actuarial loss	$	(1,690	)	$	(1,320	)	Other operating expenses
Amortization of prior service credit		326			777		Other operating expenses
Pretax total	$	(1,364	)	$	(543	)
Tax effect	$	362		$	224

(1) Amounts are components of net periodic cost.  See Note 11 Employee Benefit Plans for additional details.