Income taxes

6 Months Ended

Jun. 30, 2021

Income Tax Disclosure [Abstract]

Income taxes

Income taxes

The Company’s and the Utilities’ effective tax rates (combined federal and state income tax rates) were each 21%, for the six months ended June 30, 2021. These rates differed from the combined statutory rates, due primarily to the Utilities’ amortization of excess deferred income taxes related to the provision in the Tax Act that lowered the federal income tax rate from 35% to 21%, the tax benefits derived from the low income housing tax credit investments and the non-taxability of the bank-owned life insurance income. The Company’s and the Utilities’ effective tax rates were 17% and 19%, respectively, for the six months ended June 30, 2020.

In August 2020, the Internal Revenue Service notified the Company that its 2017 and 2018 income tax returns would be examined. The Company was previously audited every year through 2011, at which time the IRS changed their internal policies regarding audit frequency. The Company has received several initial requests for general tax return information and has responded or is in the process of responding to such requests.