|3 Months Ended|
Mar. 31, 2018
|Income Tax Disclosure [Abstract]|
NOTE 10. INCOME TAXES
The Company uses an estimated annual effective tax rate method in computing its interim tax provision. This effective tax rate is based on forecasted annual pre-tax income, permanent tax differences and statutory tax rates.
The effective tax rates for the three months ended March 31, 2018 and 2017 were 19.6% and 43.8%, respectively. The decrease in the effective tax rate for the three months ended March 31, 2018 was primarily due to the enactment of the Tax Cuts and Jobs Act which reduced the corporate tax rate from 34.0% to 21.0%. Additionally, there was an increase in the effective tax rate for the three months ended March 31, 2017 due to the issuance of director incentive stock options that vested immediately.
The Company recorded an uncertain tax position at March 31, 2018 and December 31, 2017 arising from a deduction taken on the 2016 federal return related to a request for change in accounting method. The total amount of the recorded uncertain tax position at both March 31, 2018 and December 31, 2017 was $903 thousand and is included in other liabilities. The Company’s policy is to classify interest and penalties associated with income taxes within other expenses. The Company did not record interest and penalties associated with income taxes for the three months ended March 31, 2018 or 2017.
The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef