XML 61 R15.htm IDEA: XBRL DOCUMENT v2.4.0.6
Income Taxes
 3 Months Ended
Mar. 31, 2013
Income Taxes [Abstract]  
Income Taxes
10.   Income Taxes

Deferred income taxes represent the temporary differences between the GAAP and tax basis of the Company’s assets and liabilities. The tax effects of temporary differences are as follows for the periods presented (in thousands):

 

                 
    As of March 31,     As of December 31,  
    2013     2012  

Deferred income tax assets:

                

Unearned premiums

   $ 11,230     $ 11,430  

Advanced premiums

     2,057       1,132  

Unpaid losses and LAE

     3,325       3,449  

Regulatory assessments

     2,040       2,447  

Stock-based compensation

     2,749       3,048  

Accrued wages

     638       778  

Allowance for uncollectible receivables

     197       205  

Additional tax basis of securities

     44       573  

Change in unrealized losses on investments

     —         2,782  
   

 

 

    

 

 

  

Total deferred income tax assets

     22,280       25,844  
   

 

 

    

 

 

  
     

Deferred income tax liabilities:

                

Deferred policy acquisition costs, net

     (6,703 )      (6,666 ) 

Change in unrealized gains on investments

     (255 )      —    
   

 

 

    

 

 

  

Total deferred income tax liabilities

     (6,958 )      (6,666 ) 
   

 

 

    

 

 

  
                 
   

 

 

    

 

 

  

Net deferred income tax asset

   $ 15,322     $ 19,178  
   

 

 

    

 

 

  

 

A valuation allowance is deemed unnecessary as of March 31, 2013 and December 31, 2012, respectively, because management believes it is probable that the Company will generate taxable income sufficient to realize the tax benefits associated with the net deferred income tax asset shown above in the near future.

Tax years that remain open for purposes of examination of its income tax liability due to taxing authorities, include the years ended December 31, 2012, 2011 and 2010.

The following table reconciles the statutory federal income tax rate to the Company’s effective tax rate for the periods presented:

 

                 
    Three Months Ended March 31,  
    2013     2012  

Statutory federal income tax rate

     35.0 %      35.0 % 

Increases (decreases) resulting from:

                

Disallowed meals & entertainment

     0.3 %      0.3 % 

Disallowed compensation

     0.8 %      0.3 % 

State income tax, net of federal tax benefit (1)

     3.6 %      3.6 % 

Other, net

     (0.2 %)      0.0 % 
   

 

 

    

 

 

  

Effective tax rate

     39.5 %      39.2 % 
   

 

 

    

 

 

  

 

(1) Included in income tax is Florida income tax at a statutory rate of 5.5%.