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Note 3 - Income Taxes

9 Months Ended

Sep. 30, 2014

3.	INCOME TAXES

The Company’s effective tax rate increased slightly to 36.0% for the three-month period ended September 30, 2014 compared to 35.9% in 2013. The effective tax rate for the nine-month period ended September 30, 2014, decreased to 35.3% compared to 36.8% for the same period in 2013. This decrease was primarily due to a decrease in projected state tax rates due to legislative changes, as well as non-deductible fees associated with the May 2013 Recapitalization that were incurred during 2013.

The unrecognized tax benefit as of September 30, 2014, was $212,000, excluding interest of $6,000 and no penalties. The full unrecognized tax benefits, if recognized, would favorably impact the effective income tax rate. The Company believes it is reasonably possible that the total amount of unrecognized tax benefits will increase slightly during the next 12 months due to state legislative changes. The Company accrues interest and penalties related to uncertain tax position in the statements of income as income tax expense.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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