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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | 7. Income Taxes The Company’s deferred income tax assets and liabilitie s are as follows:
|  | December 31, |
|  | 2024 |  |  | 2023 |
|  | (in thousands) |
Deferred income tax assets: |  |  |  |  |  |
Discounting of net unpaid loss and loss adjustment expenses |  | $ | 14,552 |  |  | $ | 15,035 |
Unearned premiums |  |  | 6,257 |  |  |  | 6,072 |
Accrued expenses and other |  |  | 2,145 |  |  |  | 2,103 |
State income tax |  |  | 2,501 |  |  |  | 2,495 |
Accrued policyholder dividends |  |  | 1,408 |  |  |  | 1,723 |
Accrued insurance-related assessments |  |  | 1,557 |  |  |  | 1,870 |
Total deferred tax assets |  |  | 28,420 |  |  |  | 29,298 |
Deferred income tax liabilities: |  |  |  |  |  |
Deferred policy acquisition costs |  |  | (4,737 | ) |  |  | (4,578 | )
Net unrealized gain on securities available-for-sale |  |  | (2,389 | ) |  |  | (839 | )
Property and equipment and other |  |  | (130 | ) |  |  | (365 | )
Salvage and subrogation |  |  | (302 | ) |  |  | (284 | )
Loss reserves adjustment |  |  | (1,414 | ) |  |  | (2,829 | )
Total deferred income tax liabilities |  |  | (8,972 | ) |  |  | (8,895 | )
Net deferred income taxes |  | $ | 19,448 |  |  | $ | 20,403 |
The components of consolidated income tax expense (benefit) are as follows:
|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
|  | (in thousands) |
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | 11,351 |  |  | $ | 13,621 |  |  | $ | 12,753 |
State |  |  | 867 |  |  |  | 1,020 |  |  |  | 427 |
|  |  | 12,218 |  |  |  | 14,641 |  |  |  | 13,180 |
Deferred: |  |  |  |  |  |  |  |  |
Federal |  |  | 1,408 |  |  |  | 655 |  |  |  | (802 | )
State |  |  | (6 | ) |  |  | (27 | ) |  |  | (334 | )
|  |  | 1,402 |  |  |  | 628 |  |  |  | (1,136 | )
Total |  | $ | 13,620 |  |  | $ | 15,269 |  |  | $ | 12,044 |
As of December 31, 2024, 2023 and 2022, the Company had no valuation allowance against its deferred income tax assets and liabilities. Income tax expense from operations is different from the amount computed by applying the U.S. federal income tax statutory rate of 21% to income before income tax es as follows:
|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
|  | (in thousands) |
Income tax computed at federal statutory tax rate |  | $ | 14,502 |  |  | $ | 16,249 |  |  | $ | 14,206 |
Tax-exempt interest, net |  |  | (1,945 | ) |  |  | (1,997 | ) |  |  | (2,268 | )
State income tax |  |  | 679 |  |  |  | 779 |  |  |  | 3 |
Dividends received deduction |  |  | (85 | ) |  |  | (125 | ) |  |  | (134 | )
IRC section 162(m) compensation adjustment |  |  | 158 |  |  |  | 46 |  |  |  | (17 | )
Prior year adjustments |  |  | 10 |  |  |  | 13 |  |  |  | 14 |
Other |  |  | 301 |  |  |  | 304 |  |  |  | 240 |
|  | $ | 13,620 |  |  | $ | 15,269 |  |  | $ | 12,044 |
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, 2024, 2023 and 2022. The Inflation Reduction Act was enacted on August 16, 2022, and included a new Corporate Alternative Minimum Tax (CAMT). The Company has determined they do not expect to be liable for CAMT in 2024. Tax years 2019 through 2024 are subject to examination by the federal and state taxing authorities.

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