Note 12 - Income Taxes

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Income Tax Disclosure [Text Block]

NOTE 12 - INCOME TAXES

The asset and liability method is used in accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

During the three months ended September 30, 2022 and 2021, the Company recorded an income tax provision of $6.4 million and $6.1 million, respectively, reflecting an effective tax rate of 27.8% and 28.5% for the three months ended September 30, 2022 and 2021, respectively. During the nine months ended September 30, 2022 and 2021, the Company recorded an income tax provision of $19.3 million and $17.3 million, respectively, reflecting an effective tax rate of 29.2% and 29.6% for the nine months ended September 30, 2022 and 2021, respectively. The Company recognized a tax benefit from stock option exercises of $276,000 and $534,000 for the three months ended September 30, 2022 and 2021, respectively and $578,000 and $657,000 for the nine months ended September 30, 2022 and 2021, respectively. The Company amended its 2020 tax returns and 2018 California state tax return and recorded a total of $300,000 tax expense reduction in the third quarter of 2022.