• Filing Date: 2012-03-30
  • Form Type: 10-K
  • Description: Annual report
v2.4.0.6
Income Taxes
12 Months Ended
Dec. 31, 2011
Income Taxes [Abstract]  
Income Taxes

Note 9 -- Income Taxes

A summary of income taxes is as follows (in thousands):

 

                     
         

Year Ended December 31,

 
         

2011

   

2010

 
       

Current:

                     

Federal

   $7,220        1,238   

State

          1,196        236   

Foreign

                 9               --   
       

Total current taxes

          8,425        1,474   
       

Deferred:

                     

Federal

          (1,715     1,449   

State

            (269        241   
       

Total deferred taxes

          (1,984     1,690   
     

Income taxes

   $ 6,441        3,164   

The reasons for the differences between the statutory Federal income tax rate and the effective tax rate are summarized as follows (dollars in thousands):

 

                                         
          Years Ended December 31,  
          2011          2010  
          Amount      %          Amount     %  
         

Income taxes at statutory rate

   $5,785         35.0   $3,005        35.0

Increase (decrease) in income taxes resulting from:

                                           

State income taxes, net of federal tax benefit

          599         3.6             313        3.6   

Stock-based compensation

          7         --             13        .2   

Other

                50               .7               (167      (1.9
         

Income taxes

   $6,441         39.3   $3,164        36.9

 

The Company has no uncertain tax positions or unrecognized tax benefits that, if recognized, would impact the effective income tax rate. The tax years ending December 31, 2010, 2009, and 2008 remain subject to examination by our major taxing jurisdictions. There have been no interest or penalties recognized for the years ended December 31, 2011 and 2010.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Significant components of our net deferred income tax asset are as follows (in thousands):

 

                 
    

At December 31,

 
    

2011

   

2010

 

Deferred income tax assets:

                

Unearned premiums

   $ 6,768        3,262   

Losses and loss adjustment expenses

     756        610   

Organizational costs

     118        129   

Stock-based compensation

     252        355   

Accrued expenses

     466        19   

Unrealized net loss on securities available for sale

           --             27   

Deferred tax assets

     8,360        4,402   
     

Deferred tax liabilities:

                

Property and equipment

     (943     (123

Deferred policy acquisition costs

     (4,870     (3,690

Unrealized net gain on securities available for sale

     (131     --   

Other

         (48           (5

Deferred tax liabilities

     (5,992     (3,818

Net deferred income tax asset

   $ 2,368        584   

 

A valuation allowance is established if, based upon the relevant facts and circumstances, management believes any portion of the tax assets will not be realized. Although realization of deferred income tax assets is not certain, management believes it is more likely than not that deferred tax assets will be realized. As a result, the Company did not have a valuation allowance established as of December 31, 2011 or 2010.