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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Components of Income Tax Provision

Significant components of the income tax provision are as follows for the periods presented (in thousands):

		For the Years Ended December 31,
		2019				2018				2017
Current:
Federal		$	12,328			$	31,981			$	53,962
State and local		2,703				7,581				8,278
Total current expense		15,031				39,562				62,240
Deferred:
Federal		1,622				(3,487		)		851
State and local		350				(253		)		458
Total deferred expense (benefit)		1,972				(3,740		)		1,309
Income tax expense		$	17,003			$	35,822			$	63,549

Reconciles Statutory Federal Income Tax Rate to Company's Effective Tax Rate

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

		For the Years Ended December 31,
		2019			2018			2017
Expected provision at federal statutory tax rate		21.0	%		21.0	%		35.0	%
Increases (decreases) resulting from:
State income tax, net of federal tax benefit		3.7	%		3.8	%		3.2	%
Effect of change in tax rate		0.3	%		—			2.8	%
Disallowed meals & expenses		0.7	%		0.3	%		0.4	%
Disallowed compensation		3.2	%		1.3	%		0.4	%
Excess tax benefit		(1.0	)%		(3.5	)%		(3.4	)%
Other, net		(1.1	)%		0.5	%		(1.1	)%
Total income tax expense (benefit)		26.8	%		23.4	%		37.3	%

Components of Deferred Income Taxes

The Company accounts for income taxes using a balance sheet approach. As of December 31, 2019 and 2018, the significant components of the Company’s deferred income taxes consisted of the following (in thousands):

		As of December 31,
		2019				2018
Deferred income tax assets:
Unearned premiums		$	23,925			$	22,700
Advanced premiums		1,493				1,269
Unpaid losses and LAE		1,660				820
Share-based compensation		3,837				3,237
Accrued wages		189				332
Allowance for uncollectible receivables		212				203
Additional tax basis of securities		33				33
Capital loss carryforwards		3,143				1,298
Unrealized gain/loss		—				4,246
Other comprehensive income		—				4,086
Other		—				9
Total deferred income tax assets		34,492				38,233
Valuation allowance		—				(781		)
Deferred income tax assets, net of valuation allowance		34,492				37,452
Deferred income tax liabilities:
Deferred policy acquisition costs, net		(22,613		)		(20,944		)
Prepaid expenses		—				(677		)
Fixed assets		(959		)		(992		)
Unrealized gain/loss		(1,480		)		—
Other comprehensive income		(5,197		)		—
Unpaid loss and LAE transition adjustment		(563		)		(78		)
Other		(329		)		(175		)
Total deferred income tax liabilities		(31,141		)		(22,866		)
Net deferred income tax asset		$	3,351			$	14,586

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Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

+ References

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 9
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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

+ References

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-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

+ References

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 12
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