4. INCOME TAXES

Our effective tax rate for the three and nine-month periods ended September 30, 2016 was 28.5 percent and 30.5 percent, respectively, compared to 30.9 percent and 31.4 percent, respectively, for the same periods in 2015. Effective rates are dependent upon components of pretax earnings and the related tax effects. The effective rate was slightly lower for the three and nine-month periods ended September 30, 2016. While the dollar amount of tax favored adjustments were similar year over year, they were slightly larger on a percentage basis due to lower levels of pre-tax earnings.

Income tax expense attributable to income from operations for the three and nine-month periods ended September 30, 2016 and 2015 differed from the amounts computed by applying the U.S. federal tax rate of 35 percent to pretax income as a result of the following:


	For the Three-Month Periods Ended September 30,								For the Nine-Month Periods Ended September 30,
	2016				2015				2016				2015
(in thousands)	Amount		%		Amount		%		Amount		%		Amount		%
Provision for income taxes at the statutory rate of 35%	$	10,900	35.0	%	$	18,178	35.0	%	$	41,677	35.0	%	$	52,885	35.0	%
Increase (reduction) in taxes resulting from:
Tax exempt interest income		(1,020)	(3.2)	%		(1,082)	(2.1)	%		(3,149)	(2.6)	%		(3,098)	(2.0)	%
Dividends received deduction		(626)	(2.0)	%		(603)	(1.2)	%		(1,676)	(1.4)	%		(1,715)	(1.1)	%
ESOP dividends paid deduction		(238)	(0.8)	%		(234)	(0.4)	%		(714)	(0.6)	%		(693)	(0.5)	%
Other items, net		(137)	(0.5)	%		(230)	(0.4)	%		205	0.1	%		30	0.0	%
Total tax expense	$	8,879	28.5	%	$	16,029	30.9	%	$	36,343	30.5	%	$	47,409	31.4	%