5. INCOME TAXES

Our effective tax rate for the three and six-month periods ended June 30, 2018 was 16.0 percent and 15.7 percent, respectively, compared to 23.0 percent and 23.9 percent, respectively, for the same periods in 2017. The Tax Cuts and Jobs Act of 2017 (TCJA) lowered the federal corporate tax rate from 35 percent to 21 percent effective January 1, 2018, which accounts for the majority of the decrease in effective tax rate for each period over the prior year. Effective rates are also dependent upon components of pretax earnings and the related tax effects. Tax favored investment activity was lower in 2018, which resulted in a lower spread between the corporate rate and effective rate when compared to 2017. There have been no changes to the provisional amounts that we recorded in the fourth quarter of 2017 associated with the TCJA as no new information has been made available by the Internal Revenue Service.

Income tax expense attributable to income from operations for the three and six-month periods ended June 30, 2018 and 2017 differed from the amounts computed by applying the U.S. federal tax rate of 21 percent and 35 percent, respectively, to pretax income by the items detailed in the below table. In interim periods, income taxes are adjusted to reflect the effective tax rate we anticipate for the year, with adjustments flowing through the other items line.


	For the Three-Month Periods Ended June 30,								For the Six-Month Periods Ended June 30,
	2018				2017				2018				2017
(in thousands)	Amount		%		Amount		%		Amount		%		Amount		%
Provision for income taxes at the statutory rate of 21% in 2018 and 35% in 2017	$	8,308	21.0	%	$	11,912	35.0	%	$	11,327	21.0	%	$	21,168	35.0	%
Increase (reduction) in taxes resulting from:
Excess tax benefit on share-based compensation		(924)	(2.3)	%		(2,791)	(8.2)	%		(2,067)	(3.9)	%		(3,234)	(5.3)	%
Tax exempt interest income		(504)	(1.3)	%		(1,160)	(3.4)	%		(1,085)	(2.0)	%		(2,338)	(3.9)	%
Dividends received deduction		(169)	(0.4)	%		(405)	(1.2)	%		(366)	(0.7)	%		(935)	(1.5)	%
ESOP dividends paid deduction		(145)	(0.4)	%		(251)	(0.7)	%		(284)	(0.5)	%		(484)	(0.8)	%
Other items, net		(255)	(0.6)	%		523	1.5	%		948	1.8	%		266	0.4	%
Total tax expense	$	6,311	16.0	%	$	7,828	23.0	%	$	8,473	15.7	%	$	14,443	23.9	%