• Filing Date: 2013-03-14
  • Form Type: 10-K
  • Description: Annual report
v2.4.0.6
Income Taxes
12 Months Ended
Dec. 31, 2012
Income Taxes [Abstract]  
Income Taxes

Note 9 — Income Taxes

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

 

                         
    Years Ended December 31,  
    2012     2011     2010  

Current:

                       

Federal

  $ 18,484       7,220       1,238  

State

    3,168       1,196       236  

Foreign

    137       9       —    
   

 

 

   

 

 

   

 

 

 

Total current taxes

    21,789       8,425       1,474  
   

 

 

   

 

 

   

 

 

 
       

Deferred:

                       

Federal

    (1,986     (1,715     1,449  

State

    (380     (269     241  
   

 

 

   

 

 

   

 

 

 

Total deferred taxes

    (2,366     (1,984     1,690  
   

 

 

   

 

 

   

 

 

 

Income taxes

  $ 19,423       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,  
    2012     2011     2010  
    Amount     %     Amount     %     Amount     %  

Income taxes at statutory rate

  $ 17,353       35.0       5,785       35.0       3,005       35.0  

Increase (decrease) in income taxes resulting from :

                                               

State income taxes, net of federal tax benefits

    1,799       3.6       599       3.6       313       3.6  

Stock-based compensation

    —         0.0       7       0.0       13       0.2  

Other

    271       0.6       50       0.7       (167     (1.9
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income taxes

  $ 19,423       39.2       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, 2011, 2010, and 2009 remain subject to examination by our major taxing jurisdictions. The Company elected to classify, if any, interest and penalties arising from uncertain tax positions as income tax expense as permitted by current accounting standards.

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):

 

                 
    December 31,  
    2012     2011  

Deferred tax assets:

               

Unearned premiums

  $ 9,149       6,768  

Losses and loss adjustment expenses

    1,116       756  

Organizational costs

    106       118  

Stock-based compensation

    394       252  

Accrued expenses

    40       466  

Deferred expenses

    72       —    
   

 

 

   

 

 

 

Total deferred tax assets

    10,877       8,360  
   

 

 

   

 

 

 
     

Deferred tax liabilities:

               

Property and equipment

    (1,519     (943

Deferred policy acquisition costs

    (4,027     (4,870

Unrealized net gain on securities available-for-sale

    (1,017     (131

Prepaid expenses

    (225     —    

Unearned brokerage income

    (105     —    

Other

    (136     (48
   

 

 

   

 

 

 

Total deferred tax liabilities

    (7,029     (5,992
   

 

 

   

 

 

 

Net deferred tax assets

  $ 3,848       2,368  
   

 

 

   

 

 

 

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, 2012 or 2011.