7. INCOME TAXES

The Company’s effective tax rate for the six month period ended June 30, 2019, was 15.7%, compared to 15.5% for the same period in 2018. Effective rates are dependent upon components of pretax earnings and the related tax effects.

Income tax expense for the three and six-month periods ended June 30, 2019 and 2018, differed from the amounts computed by applying the U.S. federal tax rate of 21% to pretax income from continuing operations as demonstrated in the following tables:



	For the Three-Months Ended
	June 30,
	2019		2018
Provision for income taxes at the statutory federal tax rates	$	108,999	$	(60,471)
Increase (reduction) in taxes resulting from:
Dividends received deduction		(9,764)		(8,950)
Tax-exempt interest income		(20,650)		(33,569)
Proration of tax-exempt interest and dividends received deduction		7,604		10,413
Officer life insurance, net		(18,195)		3,578
Nondeductible expenses		8,959		9,746
Prior year true-ups and other		—		(167)
Total	$	76,953	$	(79,420)



	For the Six-Months Ended
	June 30,
	2019		2018
Provision for income taxes at the statutory federal tax rates	$	182,025	$	116,144
Increase (reduction) in taxes resulting from:
Dividends received deduction		(19,527)		(17,901)
Tax-exempt interest income		(43,816)		(69,892)
Proration of tax-exempt interest and dividends received deduction		15,836		21,492
Officer life insurance, net		(14,618)		6,807
Nondeductible expenses		16,046		24,169
Prior year true-up and other		—		4,959
Total	$	135,946	$	85,778

Management believes it is more likely than not that all deferred tax assets will be recovered as the result of future operations, which will generate sufficient taxable income to realize the deferred tax asset.

As of June 30, 2019 and December 31, 2018, the Company does not have any capital or operating loss carryforwards. Periods still subject to IRS audit include 2015 through current year. There are currently no open tax exams.