Federal and State Income Taxes

9 Months Ended

Sep. 30, 2017

Income Tax Disclosure [Abstract]

Federal and State Income Taxes

Federal and State Income Taxes

The Company is a corporation subject to federal income tax at a statutory rate of 34% of pretax earnings. The Company estimated an annual effective income tax rate of 7.3% based on projected results for the year and applied this rate to income before taxes to calculate income tax expense. For the three months ended September 30, 2017 and 2016 the tax expense was approximately $149,000 and $39,000, resulting in an effective tax rate of approximately 5.4% and 2.6%, respectively. For the nine months ended September 30, 2017 and 2016 the tax expense was approximately $485,000 and $151,000, resulting in an effective tax rate of approximately 7.3% and 3.7%, respectively. The difference in the statutory and effective tax rates is primarily due to the company utilizing an available net operating loss carry-forward.

Based on management's analysis, the Company did not have any uncertain tax positions as of September 30, 2017.