Income Taxes

6 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

4. INCOME TAXES

Our effective tax rate for the three and six months ended June 30, 2022 was 65.8 percent and 12.1 percent, respectively, compared to 19.8 percent and 19.3 percent, respectively, for the same period in 2021. Effective rates are dependent upon components of pretax earnings and the related tax effects. Tax-favored adjustments acting on a pretax loss, caused by unrealized losses on the equity portfolio, resulted in a higher effective tax rate for the second quarter of 2022. The effective tax rate was lower for the six-month period in 2022, as lower pretax income increased the percentage impact of tax-favored adjustments.

Income tax expense attributable to income from operations for the three and six-month periods ended June 30, 2022 and 2021 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 June 30,														For the Six Months Ended June 30,
	2022							2021							2022							2021
(in thousands)	Amount			%				Amount			%				Amount			%				Amount			%
Provision for income taxes at the statutory rate of 21%	$	(1,376	)		21.0		%	$	21,424			21.0		%	$	10,914			21.0		%	$	40,290			21.0		%
Increase (reduction) in taxes resulting from:
Excess tax benefit on share-based compensation		(761	)		11.6		%		(270	)		(0.3	)	%		(2,175	)		(4.2	)	%		(2,194	)		(1.1	)	%
Tax exempt interest income		(288	)		4.4		%		(310	)		(0.3	)	%		(570	)		(1.1	)	%		(629	)		(0.3	)	%
Dividends received deduction		(163	)		2.5		%		(248	)		(0.2	)	%		(434	)		(0.8	)	%		(484	)		(0.3	)	%
Investment tax credit		(1,182	)		18.0		%		(801	)		(0.8	)	%		(2,363	)		(4.5	)	%		(1,603	)		(0.8	)	%
ESOP dividends paid deduction		(138	)		2.1		%		(137	)		(0.1	)	%		(268	)		(0.5	)	%		(267	)		(0.1	)	%
Nondeductible expenses		258			(3.9	)	%		826			0.8		%		574			1.1		%		1,237			0.6		%
Other items, net		(665	)		10.1		%		(278	)		(0.3	)	%		609			1.1		%		678			0.3		%
Total tax expense	$	(4,315	)		65.8		%	$	20,206			19.8		%	$	6,287			12.1		%	$	37,028			19.3		%