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Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2012
Income Taxes [Abstract] |
Income Taxes |
7. | Income Taxes
The Company’s deferred income tax assets and liabilities are as follows:
|  | December 31, |
| 2012 |  |  | 2011 |
|  |  |  |  | (As Adjusted) |
|  | (In thousands) |
Deferred income tax assets: |  |  |  |  |  |  |  |
Discounting of net unpaid loss and loss adjustment expenses |  | $ | 21,878 |  |  | $ | 20,576 |
Unearned premiums |  |  | 12,043 |  |  |  | 10,446 |
Accrued expenses and other |  |  | 3,870 |  |  |  | 3,555 |
Accrued policyholder dividends |  |  | 916 |  |  |  | 698 |
Capital loss carryforward |  |  | — |  |  |  | 568 |
Impaired securities |  |  | 94 |  |  |  | 94 |
Accrued insurance-related assessments |  |  | 3,564 |  |  |  | 3,472 |
AMT tax credit |  |  | 64 |  |  |  | — |
Total deferred tax assets |  |  | 42,429 |  |  |  | 39,409 |
Deferred income tax liabilities: |  |  |  |  |  |  |  |
Deferred policy acquisition costs |  |  | (7,499 | ) |  |  | (6,905 | )
Deferred charges |  |  | (666 | ) |  |  | (852 | )
Unrealized gain on securities available-for-sale |  |  | (1,604 | ) |  |  | (1,192 | )
Property and equipment and other |  |  | (356 | ) |  |  | (52 | )
Salvage and subrogation |  |  | (442 | ) |  |  | (360 | )
Guaranty fund related items |  |  | (2,341 | ) |  |  | — |
Total deferred income tax liabilities |  |  | (12,908 | ) |  |  | (9,361 | )
Net deferred income taxes |  | $ | 29,521 |  |  | $ | 30,048 |
The components of consolidated income tax expense (benefit) are as follows:
|  | Year Ended December 31, |
| 2012 |  |  | 2011 |  |  | 2010 |
|  |  |  |  | (As Adjusted) |  |  | (As Adjusted) |
|  | (In thousands) |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 7,372 |  |  | $ | 4,529 |  |  | $ | 11,617 |
State |  |  | 302 |  |  |  | 172 |  |  |  | 254 |
|  |  | 7,674 |  |  |  | 4,701 |  |  |  | 11,871 |
Deferred: |  |  |  |  |  |  |  |
Federal |  |  | 116 |  |  |  | (1,525 | ) |  |  | (2,169 | )
Total |  | $ | 7,790 |  |  | $ | 3,176 |  |  | $ | 9,702 |
In 2012, the Company made no adjustment to the valuation allowance. In 2011, the Company recorded a reduction of $1.4 million in the valuation allowance of $3.0 million established in 2008 for unrealized losses resulting from other-than-temporary impairments. Income tax expense from operations is different from the amount computed by applying the U.S. federal income tax statutory rate of 35% to income before income taxes as follows:
|  | Year Ended December 31, |
| 2012 |  |  | 2011 |  |  | 2010 |
|  |  |  |  | (As Adjusted) |  |  | (As Adjusted) |
|  | (In thousands) |
Income tax computed at federal statutory tax rate |  | $ | 13,000 |  |  | $ | 9,575 |  |  | $ | 15,478 |
Tax-exempt interest, net |  |  | (5,333 | ) |  |  | (5,105 | ) |  |  | (5,133 | )
State income tax |  |  | 302 |  |  |  | 172 |  |  |  | 254 |
Dividends received deduction |  |  | (79 | ) |  |  | (29 | ) |  |  | (6 | )
Valuation allowance |  |  | — |  |  |  | (1,442 | ) |  |  | (869 | )
Other |  |  | (100 | ) |  |  | 5 |  |  |  | (22 | )
|  | $ | 7,790 |  |  | $ | 3,176 |  |  | $ | 9,702 |
The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. There were no uncertain tax positions as of December 31, 2012 and 2011. Tax years 2008 through 2011 are subject to examination by the federal and state taxing authorities. The Company is currently undergoing an examination by the Internal Revenue Service for tax year 2009.

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- Definition 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. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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