Income Taxes

3 Months Ended

Mar. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

4. INCOME TAXES

Our effective tax rate for the three months ended March 31, 2021 was 18.7 percent, compared to 22.8 percent for the same period in 2020. Effective rates are dependent upon components of pretax earnings and the related tax effects. The effective rate was lower for the first three months of 2021 as tax-favored adjustments reduced income tax expense, while tax-favored adjustments increased the tax benefit recognized in the first quarter of 2020 as a result of pretax losses.

Income tax expense attributable to income from operations for the three-month periods ended March 31, 2021 and 2020 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 Months Ended March 31,
	2021							2020
(in thousands)	Amount			%				Amount			%
Provision for income taxes at the statutory rate of 21%	$	18,865			21.0		%	$	(16,666	)		21.0		%
Increase (reduction) in taxes resulting from:
Excess tax benefit on share-based compensation		(1,924	)		(2.1	)	%		(1,029	)		1.3		%
Tax exempt interest income		(319	)		(0.4	)	%		(313	)		0.4		%
Dividends received deduction		(236	)		(0.3	)	%		(271	)		0.3		%
Investment tax credit		(801	)		(0.9	)	%		(1,321	)		1.7		%
ESOP dividends paid deduction		(130	)		(0.1	)	%		(132	)		0.2		%
Nondeductible expenses		411			0.5		%		203			(0.3	)	%
Other items, net		956			1.0		%		1,432			(1.8	)	%
Total tax expense (benefit)	$	16,822			18.7		%	$	(18,097	)		22.8		%