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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

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,
						2022						2021						2020
Current:
Federal						$	5,674					$	10,597					$	1,988
State and local						1,462						1,676						349
Total current expense						7,136						12,273						2,337
Deferred:
Federal						(10,752)						(4,064)						2,403
State and local						(1,374)						(203)						386
Total deferred expense (benefit)						(12,126)						(4,267)						2,789
Income tax expense (benefit)						$	(4,990)					$	8,006					$	5,126

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,
						2022						2021						2020
Federal statutory tax rate						21.0		%				21.0		%				21.0		%
Increases (decreases) resulting from:
State income tax, net of federal tax benefit						(1.4)		%				1.7		%				3.1		%
Effect of change in tax rate						2.0		%				0.1		%				0.5		%
Disallowed meals & expenses						(0.4)		%				0.1		%				0.4		%
Disallowed compensation						(3.7)		%				2.1		%				6.2		%
Liability adjustment						—						—		%				(9.7)		%
Excess tax (benefit) shortfall						(0.8)		%				2.3		%				0.4		%
Other, net						1.6		%				0.9		%				(0.7)		%
Effective income tax rate						18.3		%				28.2		%				21.2		%

Components of Deferred Income Taxes

The Company accounts for income taxes using a balance sheet approach. As of December 31, 2022 and 2021, the significant components of the Company’s deferred income taxes consisted of the following (in thousands):

						As of December 31,
						2022						2021
Deferred income tax assets:
Unearned premiums						$	32,410					$	28,748
Advanced premiums						2,683						2,476
Unpaid losses and LAE						2,574						2,513
Share-based compensation						3,744						3,458
Accrued wages						237						211
Allowance for uncollectible receivables						220						186
Net operating loss carryforwards						7,591						534
Unrealized gain/loss						4,175						890
Other comprehensive income						33,795						4,729
Other						410						77
Total deferred income tax assets						87,839						43,822
Deferred income tax liabilities:
Deferred policy acquisition costs, net						(25,512)						(25,361)
Fixed assets						(4,484)						(1,790)
Unpaid loss and LAE transition adjustment						(269)						(340)
Other						(316)						—
Total deferred income tax liabilities						(30,581)						(27,491)
Net deferred income tax asset						$	57,258					$	16,331

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- Definition

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

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 9
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32639-109319

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- Definition

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

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 2
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32537-109319

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- Definition

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

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 12
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32687-109319

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