Income Taxes

6 Months Ended

Jun. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company adjusts its effective tax rate each quarter to be consistent with the estimated annual effective tax rate. The Company also records the tax effect of unusual or infrequently occurring discrete items.

The provision for income taxes is shown in the table below:

	Three Months Ended June 30
	2021		2020
Income tax expense	$	2,484	$	1,442

	Six Months Ended June 30
	2021		2020
Income tax expense (benefit)	$	2,741	$	(3,408)

The total income tax expense increased $1.0 million to $2.5 million in the second quarter of 2021 as compared to $1.4 million in the second quarter of 2020. The increase was mainly due to an increase in pre-tax earnings which was partially offset by reduction of tax repair deduction benefits and increase in refund of excess deferred income taxes in 2021 as compared to 2020.

The total income tax expense increased $6.1 million to $2.7 million in the first six months of 2021 as compared to $3.4 million income tax benefit in the first six months of 2020. The increase was mainly due to an increase in pre-tax earnings which was partially offset by reduction of tax repair deduction benefits and increase in refund of excess federal deferred income taxes in 2021 as compared to 2020.

The Company’s effective tax rate was 6.02% before discrete items in the second quarter of 2021 as compared to 18.5% in the second quarter of 2020. The decrease in effective income tax rate was primary due to an increase in refund of the excess federal deferred taxes in 2021 as compared to 2020.

The Company had unrecognized tax benefits of approximately $14.2 million and $12.4 million as of June 30, 2021 and 2020, respectively. Included in the balance of unrecognized tax benefits as of June 30, 2021 and 2020, is $3.8 million and $3.0 million, respectively, of tax benefits that, if recognized, would result in an adjustment to the Company’s effective tax rate. The Company does not expect its unrecognized tax benefits to change significantly within the next 12 months.