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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | 10. Incom e Taxes Income Tax Provision The components of our consolidated income tax provision from continuing operations are as follows.
Income tax provision |  |  |  |  |  |  |  |  |
|  | Years Ended December 31, |
(In thousands) |  | 2024 |  |  | 2023 |  |  | 2022 |
Current provision (benefit) |  | $ | 4,575 |  |  | $ | (633 | ) |  | $ | 2,920 |
Deferred provision |  |  | 162,275 |  |  |  | 165,001 |  |  |  | 206,925 |
Total income tax provision |  | $ | 166,850 |  |  | $ | 164,368 |  |  | $ | 209,845 |
The reconciliation of taxes computed at the statutory tax rate of 21% in 2024, 2023 and 2022 to the provision for income taxes is as follows.
Reconciliation of provision for income taxes |
|  | Years Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
(In thousands) |  | $ |  |  | % of Pretax Income |  |  | $ |  |  | % of Pretax Income |  |  | $ |  |  | % of Pretax Income |
Provision for income taxes computed at the statutory tax rate |  | $ | 161,971 |  |  |  | 21.0 | % |  | $ | 161,172 |  |  |  | 21.0 | % |  | $ | 200,084 |  |  |  | 21.0 | %
Change in tax resulting from: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
State tax provision (benefit), net of federal impact |  |  | 537 |  |  |  | 0.1 | % |  |  | 8,988 |  |  |  | 1.2 | % |  |  | 20,869 |  |  |  | 2.2 | %
Valuation allowance |  |  | 3,236 |  |  |  | 0.4 | % |  |  | (6,283 | ) |  |  | (0.8 | )% |  |  | (13,791 | ) |  |  | (1.4 | )%
Nondeductible compensation expense |  |  | 8,668 |  |  |  | 1.1 | % |  |  | 4,659 |  |  |  | 0.6 | % |  |  | 4,413 |  |  |  | 0.5 | %
Other nontaxable or nondeductible items |  |  | (6,344 | ) |  |  | (0.8 | )% |  |  | (1,679 | ) |  |  | (0.3 | )% |  |  | 1,997 |  |  |  | 0.1 | %
Other, net |  |  | (1,218 | ) |  |  | (0.2 | )% |  |  | (2,489 | ) |  |  | (0.3 | )% |  |  | (3,727 | ) |  |  | (0.4 | )%
Income tax provision |  | $ | 166,850 |  |  |  | 21.6 | % |  | $ | 164,368 |  |  |  | 21.4 | % |  | $ | 209,845 |  |  |  | 22.0 | %
As of December 31, 2024 and 2023, our current federal income tax liability primarily relates to applying the standards of accounting for uncertainty in income taxes, and is included as a component of other liabilities in our consolidated balance sheets. See Note 9 for additional detail on the components of our other liabilities. Deferred Tax Assets and Liabilities The significant components of our net deferred tax assets and liabilities from continuing operations are summarized as follows.
Deferred tax assets and liabilities |  |  |  |  |  |
|  | December 31, |
(In thousands) |  | 2024 |  |  | 2023 |
Deferred tax assets |  |  |  |  |  |
Net unrealized loss on investments |  | $ | 93,201 |  |  | $ | 88,065 |
State income taxes |  |  | 46,463 |  |  |  | 46,170 |
Unearned premiums |  |  | 24,928 |  |  |  | 24,948 |
Goodwill and intangibles |  |  | 24,393 |  |  |  | 29,197 |
Capitalized research and development |  |  | 16,060 |  |  |  | 12,450 |
Accrued expenses |  |  | 11,983 |  |  |  | 10,829 |
Other |  |  | 42,562 |  |  |  | 43,227 |
Total gross deferred tax assets |  |  | 259,590 |  |  |  | 254,886 |
Less: Valuation allowance |  |  | 66,590 |  |  |  | 63,354 |
Total deferred tax assets |  |  | 193,000 |  |  |  | 191,532 |
Deferred tax liabilities |  |  |  |  |  |
Contingency reserve |  |  | 925,152 |  |  |  | 755,481 |
Other |  |  | 14,533 |  |  |  | 25,615 |
Total deferred tax liabilities |  |  | 939,685 |  |  |  | 781,096 |
Net deferred tax asset (liability) |  | $ | (746,685 | ) |  | $ | (589,564 | )
As of December 31, 2024, we have generated deferred tax assets related to unrealized capital losses, and we consider it more likely than not that these assets will be realized. We will continue to monitor the level of these losses and our overall ability to realize the related deferred tax assets in future periods. In addition, certain entities within our consolidated group have generated net deferred tax assets relating primarily to state and local NOL carryforwards which, if unutilized, will expire during various future tax periods. We have determined that certain of these entities may continue to generate taxable losses on a separate company basis in the near term and may not be able to fully utilize certain of their state and local NOLs on their state and local tax returns. Therefore, we have concluded a valuation allowance is required with respect to deferred tax assets relating to these state and local NOLs and other state timing adjustments. As a mortgage guaranty insurer, we are eligible for a tax deduction, subject to certain limitations, under Internal Revenue Code Section 832(e) for amounts required by state law or regulation to be set aside in statutory contingency reserves. The deduction is allowed only to the extent that, in conjunction with quarterly federal tax payment due dates, we purchase non-interest-bearing U.S. Mortgage Guaranty Tax and Loss Bonds issued by the U.S. Department of the Treasury in an amount equal to the tax benefit derived from deducting any portion of our statutory contingency reserves. As of December 31, 2024 and 2023, we held $921 million and $750 million, respectively, of these bonds, which are reported as prepaid federal income taxes in our consolidated balance sheets. The corresponding deduction of our statutory contingency reserves resulted in the recognition of a net deferred tax liability. See Note 16 for additional information about our U.S. Mortgage Guaranty Tax and Loss Bonds. Unrecognized Tax Benefits A reconciliation of the beginning and ending gross unrecognized tax benefits, excluding interest and penalties, is as follows.
Reconciliation of gross unrecognized tax benefits |  |  |  |  |  |  |  |  |
|  | Years Ended December 31, |
(In thousands) |  | 2024 |  |  | 2023 |  |  | 2022 |
Balance at beginning of period |  | $ | 19,931 |  |  | $ | 20,810 |  |  | $ | 19,888 |
Tax positions related to the current year: |  |  |  |  |  |  |  |  |
Increases |  |  | 698 |  |  |  | 314 |  |  |  | 1,791 |
Decreases |  |  | — |  |  |  | (290 | ) |  |  | — |
Tax positions related to prior years: |  |  |  |  |  |  |  |  |
Increases |  |  | 18,742 |  |  |  | 20,387 |  |  |  | 17,666 |
Decreases |  |  | (106 | ) |  |  | (667 | ) |  |  | (17 | )
Lapses of applicable statute of limitation |  |  | (18,631 | ) |  |  | (20,623 | ) |  |  | (18,518 | )
Balance at end of period |  | $ | 20,634 |  |  | $ | 19,931 |  |  | $ | 20,810 |
Net unrecognized tax benefits that, if recognized, would affect the effective tax rate |  | $ | 4,843 |  |  | $ | 3,519 |  |  | $ | 2,827 |
Our gross unrecognized tax benefits increased from December 31, 2023, to December 31, 2024, primarily as a result of the impact of unrecognized tax benefits associated with our recognition of certain premium income, partially offset by reductions related to lapses of the statute of limitations. Although unrecognized tax benefits decreased due to statute expirations, certain amounts for premium income recognition continued to impact subsequent years, resulting in a corresponding increase in unrecognized tax benefits related to premium income recognition. Although it is reasonably possible that a change in the balance of unrecognized tax benefits may occur within the next 12 months, based on the information currently available, we do not expect any change to be material to our consolidated financial condition. The company is no longer subject to U.S. federal income tax examinations by tax authorities for years before 2021. Additionally, among the entities within our consolidated group, various tax years remain open to potential examination by state and local taxing authorities.

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