INCOME TAXES

The Company recorded an income tax benefit of $1.7 million for the three months ended December 31, 2018, resulting in an effective tax rate of (11.56%), compared to an income tax expense of $5.7 million, or an effective tax rate of 54.90%, for the three months ended December 31, 2017. The Company’s effective tax rate is lower than the U.S. statutory rate of 21% primarily because of the anticipated effect of investment tax credits during fiscal year 2019. The Company’s effective tax rate in the future will depend in part on actual investment tax credits earned as part of its financing of solar energy projects.

The table below compares the income tax expense components for the periods presented.



Three Months Ended December 31,	2018			2017
(Dollars in Thousands)
Provision at statutory rate	$	3,072		$	2,540
Tax-exempt income	(1,201		)	(2,068		)
State income taxes	701			718
Interim period effective rate adjustment	5,263			717
Tax credit investments, net - federal	(9,568		)	—
Tax Reform rate adjustment	—			3,635
Other, net	42			142
Income tax expense	$	(1,691	)	$	5,684
Effective tax rate	(11.56		%)	54.90		%