Income Taxes

9 Months Ended

Sep. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes

4. INCOME TAXES

Our effective tax rate for the three and nine months ended September 30, 2021 was 17.5 percent and 19.0 percent, respectively, compared to 17.7 percent and 15.8 percent, respectively, for the same period in 2020. Effective rates are dependent upon components of pretax earnings and the related tax effects. For the nine-month period ended September 30, the effective tax rate was higher for 2021 as lower pretax income was experienced in 2020, which increased the percentage impact of tax-favored adjustments.

Income tax expense attributable to income from operations for the three and nine-month periods ended September 30, 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 September 30,														For the Nine Months Ended September 30,
	2021							2020							2021							2020
(in thousands)	Amount			%				Amount			%				Amount			%				Amount			%
Provision for income taxes at the statutory rate of 21%	$	7,442			21.0		%	$	10,817			21.0		%	$	47,731			21.0		%	$	18,275			21.0		%
Increase (reduction) in taxes resulting from:
Excess tax benefit on share-based compensation		(225	)		(0.6	)	%		(848	)		(1.6	)	%		(2,419	)		(1.1	)	%		(2,141	)		(2.4	)	%
Tax exempt interest income		(298	)		(0.8	)	%		(324	)		(0.6	)	%		(927	)		(0.4	)	%		(960	)		(1.1	)	%
Dividends received deduction		(223	)		(0.6	)	%		(221	)		(0.4	)	%		(707	)		(0.3	)	%		(705	)		(0.8	)	%
Investment tax credit		(801	)		(2.3	)	%		(316	)		(0.6	)	%		(2,404	)		(1.0	)	%		(1,766	)		(2.0	)	%
ESOP dividends paid deduction		(132	)		(0.4	)	%		(134	)		(0.3	)	%		(399	)		(0.2	)	%		(403	)		(0.5	)	%
Nondeductible expenses		642			1.8		%		275			0.5		%		1,879			0.8		%		639			0.7		%
Other items, net		(211	)		(0.6	)	%		(127	)		(0.3	)	%		468			0.2		%		799			0.9		%
Total tax expense	$	6,194			17.5		%	$	9,122			17.7		%	$	43,222			19.0		%	$	13,738			15.8		%