INCOME TAXES

3 Months Ended

Jun. 30, 2020

INCOME TAXES

INCOME TAXES

4. INCOME TAXES

Our effective tax rate for the three and six-month periods ended June 30, 2020 was 19.8 percent and 13.0 percent, respectively, compared to 17.1 percent and 18.9 percent, respectively, for the same periods in 2019. Effective rates are dependent upon components of pretax earnings and the related tax effects. The effective rate was higher for the three-month period in 2020 due to higher levels of pre-tax earnings and lower levels of tax-favored adjustments compared to 2019. For the six-month period, lower levels of pre-tax earnings caused tax-favored adjustments to be larger on a percentage basis in 2020 compared to the prior year.

Income tax expense (benefit) attributable to income from operations for the three and six-month periods ended June 30, 2020 and 2019 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, net line.

	For the Three-Month Periods Ended June 30,								For the Six-Month Periods Ended June 30,
	2020				2019				2020				2019
(in thousands)	Amount		%		Amount		%		Amount		%		Amount		%
Provision for income taxes at the statutory rate of 21%	$	24,124	21.0	%	$	10,254	21.0	%	$	7,458	21.0	%	$	27,419	21.0	%
Increase (reduction) in taxes resulting from:
Excess tax benefit on share-based compensation		(265)	(0.2)	%		(2,191)	(4.5)	%		(1,293)	(3.6)	%		(2,932)	(2.3)	%
Tax exempt interest income		(323)	(0.3)	%		(309)	(0.6)	%		(636)	(1.8)	%		(654)	(0.5)	%
Dividends received deduction		(212)	(0.2)	%		(214)	(0.4)	%		(484)	(1.4)	%		(417)	(0.3)	%
ESOP dividends paid deduction		(137)	(0.1)	%		(140)	(0.3)	%		(269)	(0.8)	%		(277)	(0.2)	%
Nondeductible expenses		161	0.1	%		414	0.8	%		364	1.0	%		922	0.7	%
Other items, net		(635)	(0.5)	%		547	1.1	%		(524)	(1.4)	%		568	0.5	%
Total tax expense (benefit)	$	22,713	19.8	%	$	8,361	17.1	%	$	4,616	13.0	%	$	24,629	18.9	%