• Filing Date: 2014-03-12
  • Form Type: 10-K
  • Description: Annual report
v2.4.0.8
Income Taxes
12 Months Ended
Dec. 31, 2013
Income Tax Disclosure [Abstract]  
Income Taxes

Note 13 — Income Taxes

A summary of income tax expense is as follows:

 

     Years Ended December 31,  
     2013      2012     2011  

Current:

       

Federal

   $ 34,372       $ 18,484      $ 7,220   

State

     5,844         3,168        1,196   

Foreign

     118         137        9   
  

 

 

    

 

 

   

 

 

 

Total current taxes

     40,334         21,789        8,425   
  

 

 

    

 

 

   

 

 

 

Deferred:

       

Federal

     514         (1,986     (1,715

State

     43         (380     (269
  

 

 

    

 

 

   

 

 

 

Total deferred taxes

     557         (2,366     (1,984
  

 

 

    

 

 

   

 

 

 

Income tax expense

   $ 40,891       $ 19,423      $ 6,441   
  

 

 

    

 

 

   

 

 

 

The reasons for the differences between the statutory Federal income tax rate and the effective tax rate are summarized as follows:

 

     Years Ended December 31,  
     2013     2012      2011  
     Amount     %     Amount      %      Amount      %  

Income taxes at statutory rate

   $ 37,258        35.0      $ 17,353         35.0       $ 5,785         35.0   

Increase (decrease) in income taxes resulting from :

               

State income taxes, net of federal tax benefits

     3,802        3.6        1,799         3.6         599         3.6   

Other

     (169     (0.2     271         0.6         57         0.7   
  

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Income tax expense

   $ 40,891        38.4      $ 19,423         39.2       $ 6,441         39.3   
  

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

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, 2012, 2011, and 2010 remain subject to examination by the Company’s 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. There have been no such interest or penalties during the three years ended December 31, 2013. In January 2014, the Company received notice from the Internal Revenue Service with respect to an examination of the Company’s 2011 federal income tax return. The examination commenced in the first quarter of 2014. In February 2014, the Company received notice from the Florida Department of Revenue with respect to an examination of the Company’s 2010, 2011 and 2012 state income tax returns. The examination commenced in the first quarter of 2014.

 

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 the Company’s net deferred income tax (liabilities) assets are as follows:

 

     December 31,  
     2013     2012  

Deferred tax assets:

    

Unearned premiums

   $ 8,829      $ 9,149   

Losses and loss adjustment expenses

     885        1,116   

Organizational costs

     95        106   

Stock-based compensation

     2,026        394   

Accrued expenses

     163        40   

Deferred expenses

     —          72   

Unearned revenue

     52        —     

Bad debt reserve

     5        —     
  

 

 

   

 

 

 

Total deferred tax assets

     12,055        10,877   
  

 

 

   

 

 

 

Deferred tax liabilities:

    

Property and equipment

     (1,748     (1,519

Deferred policy acquisition costs

     (5,600     (4,027

Unrealized net gain on securities available-for-sale

     (700     (1,017

Basis difference related to convertible senior notes

     (6,295     —     

Prepaid expenses

     (296     (225

Unearned brokerage income

     —          (105

Other

     (156     (136
  

 

 

   

 

 

 

Total deferred tax liabilities

     (14,795     (7,029
  

 

 

   

 

 

 

Net deferred tax (liabilities) assets

   $ (2,740   $ 3,848   
  

 

 

   

 

 

 

A valuation allowance is established if, based upon the relevant facts and circumstances, management believes any portion of the deferred 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, 2013 or 2012.