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Income Taxes | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | 15.Income Taxes On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted, implementing numerous changes to tax law including temporary changes regarding the prior and future utilization of net operating losses, temporary changes to the prior and future limitations on interest deductions, and the creation of certain refundable employee retention credits. There has been no impact to the Company’s income taxes due to this legislation. The components of our provision for income tax expense (benefit) were as follows:
|  | Year Ended December 31, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
Current tax provision |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 3,930 |  |  | $ | 10,109 |  |  | $ | 5,116 |
State |  |  | 354 |  |  |  | 725 |  |  |  | 324 |
Total current |  |  | 4,284 |  |  |  | 10,834 |  |  |  | 5,440 |
Deferred tax (benefit) provision |  |  | (1,310 | ) |  |  | 638 |  |  |  | 1,871 |
Total provision for income taxes |  | $ | 2,974 |  |  | $ | 11,472 |  |  | $ | 7,311 |
The provision for income taxes differs from the amount that would be computed by applying the statutory federal rate to income before provision for income taxes as a result of the following:
|  | Year Ended December 31, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
Income before income taxes |  | $ | 11,306 |  |  | $ | 52,816 |  |  | $ | 33,811 |
Expected provision for federal income taxes at 21% |  | $ | 2,374 |  |  | $ | 11,091 |  |  | $ | 7,100 |
State income taxes, net of federal impact |  |  | 474 |  |  |  | 570 |  |  |  | 224 |
Tax-exempt interest |  |  | (197 | ) |  |  | (209 | ) |  |  | (235 | )
Dividends received deduction |  |  | (122 | ) |  |  | (104 | ) |  |  | (89 | )
Compensation-related expenses |  |  | 326 |  |  |  | 130 |  |  |  | 151 |
Change in valuation allowance |  |  | 77 |  |  |  | (17 | ) |  |  | 7 |
Other |  |  | 42 |  |  |  | 11 |  |  |  | 153 |
Total provision for income taxes |  | $ | 2,974 |  |  | $ | 11,472 |  |  | $ | 7,311 |
We re-measure existing deferred income tax assets (including loss carryforwards) and liabilities when a change in tax rate occurs and record an offset for the net amount of the change as a component of income tax expense from continuing operations in the period of enactment. We record any change to a previously recorded valuation allowance as a result of re-measuring existing temporary differences and loss carryforwards as a component of income tax expense from continuing operations. The valuation allowance against certain deferred income tax assets was $1,008, $931, and $594 at December 31, 2021, 2020, and 2019, respectively. 89 Table of Contents The income tax effects of temporary differences that give rise to significant portions of our deferred income tax assets and deferred income tax liabilities at December 31, 2021 and 2020 were as follows:
|  | December 31, |
|  | 2021 |  |  | 2020 |
Deferred income tax assets: |  |  |  |  |  |  |  |
Unearned premium |  | $ | 5,783 |  |  | $ | 5,013 |
Unpaid losses and LAE |  |  | 1,096 |  |  |  | 792 |
Net operating loss carryovers |  |  | 1,224 |  |  |  | 1,260 |
Other |  |  | 1,967 |  |  |  | 1,538 |
Total deferred income tax assets |  |  | 10,070 |  |  |  | 8,603 |
Deferred income tax liabilities: |  |  |  |  |  |  |  |
Deferred policy acquisition costs |  |  | 5,670 |  |  |  | 5,033 |
Net unrealized gains on investments |  |  | 7,382 |  |  |  | 9,897 |
Intangibles |  |  | 1,464 |  |  |  | 1,451 |
Other |  |  | 52 |  |  |  | 48 |
Total deferred income tax liabilities |  |  | 14,568 |  |  |  | 16,429 |
Net deferred income tax liability |  |  | (4,498 | ) |  |  | (7,826 | )
Valuation allowance |  |  | (1,008 | ) |  |  | (931 | )
Deferred income tax liability, net |  | $ | (5,506 | ) |  | $ | (8,757 | )
At December 31, 2021 and 2020, we had no unrecognized tax benefits, no accrued interest and penalties, and no significant uncertain tax positions. No interest and penalties were recognized during the years ended December 31, 2021, 2020, or 2019. At December 31, 2021 and 2020, the Company, other than Battle Creek and Westminster, had no income tax related carryovers for net operating losses, alternative minimum tax credits, or capital losses. Battle Creek, which files its federal income tax returns on a stand-alone basis, had net operating loss carryovers of $3,215 and $3,390 at December 31, 2021 and 2020, respectively. The net operating loss carryforward began expiring in 2021 and will continue through 2032 due to limitations on the use of this net operating loss carryforward. Westminster, which became part of the Company’s consolidated federal income tax return beginning in 2020, had $2,122 and $2,340 of net operating loss carryover at December 31, 2021 and 2020, respectively. This net operating loss carryforward expires in 2023 due to limitations on the use of this net operating loss carryforward.

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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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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