INCOME TAXES

6 Months Ended

Jun. 30, 2019

INCOME TAXES

5. INCOME TAXES

Our effective tax rate for the three and six-month periods ended June 30, 2019 was 17.1 percent and 18.9 percent, respectively, compared to 16.0 percent and 15.7 percent, respectively, for the same periods in 2018. Effective rates are dependent upon components of pretax earnings and the related tax effects. The effective rate was higher for the first six months of 2019 due largely to higher levels of pre-tax earnings, which caused the tax-favored adjustments to be smaller on a percentage basis in 2019 compared to the prior year.

Income tax expense attributable to income from operations 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 percent 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,
	2019				2018				2019				2018
(in thousands)	Amount		%		Amount		%		Amount		%		Amount		%
Provision for income taxes at the statutory rate of 21%	$	10,254	21.0	%	$	8,308	21.0	%	$	27,419	21.0	%	$	11,327	21.0	%
Increase (reduction) in taxes resulting from:
Excess tax benefit on share-based compensation		(2,191)	(4.5)	%		(924)	(2.3)	%		(2,932)	(2.3)	%		(2,067)	(3.9)	%
Tax exempt interest income		(309)	(0.6)	%		(504)	(1.3)	%		(654)	(0.5)	%		(1,085)	(2.0)	%
Dividends received deduction		(214)	(0.4)	%		(169)	(0.4)	%		(417)	(0.3)	%		(366)	(0.7)	%
ESOP dividends paid deduction		(140)	(0.3)	%		(145)	(0.4)	%		(277)	(0.2)	%		(284)	(0.5)	%
Other items, net		961	1.9	%		(255)	(0.6)	%		1,490	1.2	%		948	1.8	%
Total tax expense	$	8,361	17.1	%	$	6,311	16.0	%	$	24,629	18.9	%	$	8,473	15.7	%