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Income Taxes | 12 Months Ended
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Dec. 31, 2016
Income Tax Disclosure [Abstract] |
Income Taxes | NOTE 12 – INCOME TAXES Significant components of the income tax provision are as follows for the periods presented (in thousands):
|  | For the Years Ended December 31, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 50,645 |  |  | $ | 61,830 |  |  | $ | 47,245 |
State and local |  |  | 8,105 |  |  |  | 7,402 |  |  |  | 7,877 |
Total current expense (benefit) |  |  | 58,750 |  |  |  | 69,232 |  |  |  | 55,122 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 4,106 |  |  |  | (775 | ) |  |  | (152 | )
State and local |  |  | 617 |  |  |  | 82 |  |  |  | (354 | )
Total deferred expense (benefit) |  |  | 4,723 |  |  |  | (693 | ) |  |  | (506 | )
Income tax expense |  | $ | 63,473 |  |  | $ | 68,539 |  |  | $ | 54,616 |
The following table reconciles the statutory federal income tax rate to the Company’s effective tax rate for the periods presented (in thousands):
|  | For the Years Ended December 31, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
Expected provision at federal statutory tax rate |  |  | 35.0 | % |  |  | 35.0 | % |  |  | 35.0 | %
Increases (decreases) resulting from: |  |  |  |  |  |  |  |  |  |  |  |
Disallowed meals & entertainment |  |  | 0.3 | % |  |  | 0.2 | % |  |  | 0.4 | %
Disallowed compensation |  |  | 0.4 | % |  |  | 1.1 | % |  |  | 4.2 | %
State income tax, net of federal tax benefit |  |  | 3.2 | % |  |  | 3.4 | % |  |  | 3.6 | %
Effect of change in rate |  |  | — |  |  |  | 0.1 | % |  |  | — |
Other, net |  |  | 0.1 | % |  |  | (0.6 | %) |  |  | (0.4 | %)
Total income tax expense (benefit) |  |  | 39.0 | % |  |  | 39.2 | % |  |  | 42.8 | %
Deferred income taxes represent the temporary differences between the GAAP and tax basis of the Company’s assets and liabilities and available tax loss and credit carryforwards. As of December 31, 2016 and 2015, the significant components of the Company’s deferred taxes consisted of the following (in thousands):
|  | As of December 31, |
|  | 2016 |  |  | 2015 |
Deferred income tax assets: |  |  |  |  |  |  |  |
Unearned premiums |  | $ | 26,861 |  |  | $ | 25,082 |
Advanced premiums |  |  | 1,314 |  |  |  | 1,859 |
Unpaid losses and LAE |  |  | 374 |  |  |  | 1,105 |
Regulatory assessments |  |  | — |  |  |  | 31 |
Share-based compensation |  |  | 3,256 |  |  |  | 5,535 |
Accrued wages |  |  | 297 |  |  |  | 164 |
Allowance for uncollectible receivables |  |  | 284 |  |  |  | 214 |
Additional tax basis of securities |  |  | 51 |  |  |  | 51 |
Capital loss carryforwards |  |  | 759 |  |  |  | 850 |
Other comprehensive income |  |  | 3,982 |  |  |  | 2,521 |
Other |  |  | 131 |  |  |  | — |
Total deferred income tax assets |  |  | 37,309 |  |  |  | 37,412 |
Valuation allowance |  |  | (133 | ) |  |  | — |
Deferred income tax assets, net of valuation allowance |  |  | 37,176 |  |  |  | 37,412 |
Deferred income tax liabilities: |  |  |  |  |  |  |  |
Deferred policy acquisition costs, net |  |  | (24,812 | ) |  |  | (22,969 | )
Prepaid expenses |  |  | (504 | ) |  |  | (456 | )
Fixed assets |  |  | (880 | ) |  |  | — |
Other |  |  | (306 | ) |  |  | (75 | )
Total deferred income tax liabilities |  |  | (26,502 | ) |  |  | (23,500 | )
Net deferred income tax asset |  | $ | 10,674 |  |  | $ | 13,912 |
At each balance sheet date, management assesses the need to establish a valuation allowance that reduces deferred tax assets when it is more likely than not that all, or some portion, of the deferred tax assets will not be realized. A valuation allowance would be based on all available information including the Company’s assessment of uncertain tax positions and projections of future taxable income and capital gain from each tax-paying component in each jurisdiction, principally derived from business plans and available tax planning strategies. As of December 31, 2016, the Company has state capital loss carryforwards of $8.3 million and $15.3 million for the periods ending December 31, 2012 and 2013, respectively. These state capital loss carryforwards will begin to expire beginning in 2017. Management believes that it is more likely than not that a portion of the benefit from certain state capital loss carryforwards will not be realized. In recognition of this risk, the company has provided a valuation allowance of $133 thousand on the deferred tax asset relating to the state capital loss carryforward. If management’s assumptions change and we determine the Company will be able to realize these capital loss carryforwards, the tax benefits related to any reversal of the valuation allowance on deferred tax assets as of December 31, 2016, will be accounted for as a future reduction in income tax expense and a corresponding increase in equity. The Company has adopted ASC 740-10-05, Accounting for Uncertainty in Income Taxes, which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. ASC 740 provides a threshold for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company’s policy is to classify interest and penalties related to unrecognized tax positions in its provision for income taxes. As of December 31, 2016, 2015 and 2014, we have determined that no uncertain tax liabilities are required. The Company filed a consolidated federal income tax return for the fiscal years ended December 31, 2015, 2014 and 2013 and intends to file the same for the year ended December 31, 2016. The tax allocation agreement between the Company and the Insurance Entities provide that they will incur income taxes based on a computation of taxes as if they were stand-alone taxpayers. The computations are made utilizing the financial statements of the Insurance Entities prepared on a statutory basis of accounting and prior to consolidating entries which include the conversion of certain balances and transactions of the statutory financial statements to a GAAP basis. During 2015, the Company amended its 2010 federal tax return which resulted in a decrease to the 2013 Capital Loss carryforward and offsetting refund of approximately $5.6 million. As of December 31, 2016 the Company has recovered this refund. The Company files its tax returns as prescribed by the tax laws of the jurisdictions in which it operates. The Company’s 2013 through 2015 tax years are still subject to examination in the U.S. Various state jurisdiction tax years remain open to examination. The Company has concluded its 2012 IRS examination, the results of which yielded no material change.

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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 Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: 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=65882285&loc=d3e32559-109319 Reference 3: 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=65882285&loc=d3e32718-109319 Reference 4: 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=65882285&loc=d3e32639-109319 Reference 5: 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=65882285&loc=d3e32537-109319 + Details
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