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INCOME TAX (Tables) | 12 Months Ended
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Dec. 31, 2025
Income Tax Disclosure [Abstract] |
Summary of Income Tax Expense (Benefit) | Income tax expense (benefit) is composed of the following:
Years Ended December 31, | 2025 |  | 2024 |  | 2023
Current | $ | 35,398 |  |  | $ | 23,469 |  |  | $ | (2,217) |
Deferred | (5,653) |  |  | (8,392) |  |  | (7,803) |
Income tax expense (benefit) | $ | 29,745 |  |  | $ | 15,077 |  |  | $ | (10,021) |
Total income tax expense (benefit) disaggregated by domestic and foreign jurisdiction for the year ended December 31, 2025 is as follows:
| 2025
U.S. federal income tax expense (benefit) | $ | 25,043 |
U.S. state income tax expense (benefit)(1) | 1,821 |
Foreign income tax expense (benefit) |
United Kingdom | 2,881 |
Income tax expense (benefit) | $ | 29,745 |
(1) No individual jurisdiction met the 5% threshold for individual disclosure.
Summary of Reconciliation of Income Tax Expense (Benefit) | A reconciliation of tax calculated at the U.S. federal statutory tax rate to that calculated at the effective tax rate for the year ended December 31, 2025 is as follows:
| 2025
| Amount | %
U.S. federal statutory tax rate | $ | 31,067 |  | 21.00 | %
State and local income taxes, net of federal income tax effect(1) | 1,438 |  | 0.97 |
Foreign tax effects |  |
United Kingdom |  |
Foreign tax withheld | 2,881 |  | 1.95 |
Effect of changes in tax laws or rates enacted in the current period | — |  | — |
Effect of cross-border tax laws | 1,028 |  | 0.69 |
Tax credits |  |
Foreign tax credit | (4,448) |  | (3.01) |
Other tax credits | (40) |  | (0.03) |
Changes in valuation allowances | — |  | — |
Nontaxable or nondeductible items | (141) |  | (0.10) |
Changes in unrecognized tax benefits | — |  | — |
Other adjustments |  |
Interest income on refunds | (2,581) |  | (1.74) |
Other adjustments | 541 |  | 0.37 |
Effective tax rate | $ | 29,745 |  | 20.10 | %
(1) State taxes in Illinois made up the majority (greater than 50 percent) of the tax effect in this category. A reconciliation of income tax expense (benefit) computed at the applicable federal tax rate of 21.0 percent for the years ended December 31, 2024 and 2023 to the amount recorded in the accompanying Consolidated Statements of Income is as follows:
Years Ended December 31, | 2024 | 2023
Income (loss) before taxes | $ | 77,034 |  | $ | (39,721) |
Federal statutory rate | 21 | % | 21 | %
Expected income tax expense (benefit) | $ | 16,177 |  | $ | (8,339) |
Tax-exempt municipal bond interest income | (1,881) |  | (2,763) |
Nontaxable dividend income | (27) |  | (269) |
Compensation | 1,228 |  | 596 |
Research & development credit | (16) |  | 540 |
Other, net | (404) |  | 215 |
Income tax expense (benefit) | $ | 15,077 |  | $ | (10,021) |
Summary of Components of Deferred Tax Assets and Liabilities | The significant components of deferred tax assets and liabilities consist of the following at December 31, 2025 and 2024:
December 31, | 2025 | 2024
Deferred tax assets |  |
Financial statement reserves in excess of income tax reserves | $ | 26,388 |  | $ | 23,203 |
Unearned premium adjustment | 24,888 |  | 22,700 |
Employee profit sharing | 5,008 |  | 3,112 |
Other-than-temporary impairment of investments | 597 |  | 14 |
Compensation expense related to stock options | 2,138 |  | 1,410 |
Nonqualified deferred compensation | 2,564 |  | 2,400 |
Net unrealized gain (loss) - all other securities | 7,103 |  | 19,572 |
Other | 4,758 |  | 3,639 |
Gross deferred tax asset | 73,444 |  | 76,050 |
Valuation allowance | — |  | — |
Deferred tax asset | 73,444 |  | 76,050 |
Deferred tax liabilities |  |
Deferred policy acquisition costs | 32,293 |  | 30,459 |
Investments in partnerships | 2,270 |  | 1,938 |
Over funded pension benefit | 4,933 |  | 4,694 |
Prepaid pension cost | 8,832 |  | 8,086 |
Net bond discount accretion | 1,213 |  | 705 |
Depreciation | 2,614 |  | 3,085 |
Identifiable intangible assets (1) | 945 |  | 945 |
Capitalized Software | 2,614 |  | 534 |
Other | 2,282 |  | 2,586 |
Gross deferred tax liability | 57,996 |  | 53,032 |
Net deferred tax asset (liability) | $ | 15,448 |  | $ | 23,018 |
(1) Related to our acquisition of Mercer Insurance Group, Inc.
Summary of Income Taxes Paid (Refunds Received) Domestic and Foreign Jurisdiction | Income taxes paid (net of refunds received) disaggregated by domestic and foreign jurisdiction in 2025 were as follows:
| 2025
U.S. federal income taxes paid (refunded) | $ | 19,490 |
U.S. state income taxes paid (refunded)(1) | 1,180 |
Foreign income taxes paid (refunded) |
United Kingdom | 2,881 |
Income taxes paid (refunded) | $ | 23,551 |
(1) No individual jurisdiction met the 5% threshold for individual disclosure.
Schedule of Domestic and Foreign Income (Loss) from Continuing Operations before Income Tax Expense (Benefit) | Domestic and foreign income (loss) before income tax expense (benefit) for the year ended December 31, 2025 is as follows:
| 2025
U.S. income (loss) | $ | 137,596 |
Foreign income (loss) | 10,340 |
Income (loss) before income taxes | $ | 147,936 |

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