INCOME TAXES

On December 22, 2017 the Tax Cuts and Jobs Act (“Tax Reform”), was enacted, which, among numerous provisions reduced the federal statutory corporate tax rate from 35% to 21%. Based on the provisions of the Tax Reform, the Company remeasured its deferred tax assets and adjusted its estimated annual federal income tax rate to incorporate the lower corporate tax rate into the tax provision for the current quarter ended December 31, 2017.

During the quarter ended December 31, 2017, the Company applied the newly enacted corporate federal income tax rate, resulting in a reduction of approximately $1.3 million of the income tax provision, which is reflected in the Company’s consolidated statements of income. The revaluation of deferred tax assets at the lower enacted corporate tax rate resulted in an immaterial change of income tax expense. The change represents a discrete item for purposes of income tax accounting. The final impact of the Tax Reform may differ due to changes in interpretations, assumptions made by the Company and the issuance of additional guidance.