• Filing Date: 2015-03-10
  • Form Type: 10-K
  • Description: Annual report
v2.4.1.9
Income Taxes
12 Months Ended
Dec. 31, 2014
Income Tax Disclosure [Abstract]  
Income Taxes

Note 12 — Income Taxes

A summary of income tax expense is as follows:

 

     Years Ended December 31,  
     2014      2013      2012  

Current:

        

Federal

   $ 36,651       $ 34,372       $ 18,484   

State

     6,222         5,844         3,168   

Foreign

     167         118         137   
  

 

 

    

 

 

    

 

 

 

Total current taxes

  43,040      40,334      21,789   
  

 

 

    

 

 

    

 

 

 

Deferred:

Federal

  (4,060   514      (1,986

State

  (678   43      (380

Foreign

  (4   —        —     
  

 

 

    

 

 

    

 

 

 

Total deferred taxes

  (4,742   557      (2,366
  

 

 

    

 

 

    

 

 

 

Income tax expense

$ 38,298    $ 40,891    $ 19,423   
  

 

 

    

 

 

    

 

 

 

 

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,  
     2014     2013     2012  
     Amount     %     Amount     %     Amount      %  

Income taxes at statutory rate

   $ 35,337        35.0      $ 37,258        35.0      $ 17,353         35.0   

Increase (decrease) in income taxes resulting from:

             

State income taxes, net of federal tax benefits

     3,601        3.6        3,802        3.6        1,799         3.6   

Other

     (640     (0.7     (169     (0.2     271         0.6   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Income tax expense

$ 38,298      37.9    $ 40,891      38.4    $ 19,423      39.2   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

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, 2013, 2012, and 2011 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 material amounts of interest or penalties for the years ended December 31, 2014 and 2013. Effective October 20, 2014, the Internal Revenue Service notified the Company that the examination of the Company’s 2011 federal income tax return was completed with no change to the Company’s reported tax. In addition, as of April 18, 2014, the Florida Department of Revenue completed an audit of the state income tax returns filed for 2010, 2011, and 2012. The audit resulted in no material changes to the state income taxes originally reported.

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,  
     2014      2013  

Deferred tax assets:

     

Unearned premiums

   $ 11,718       $ 8,829   

Losses and loss adjustment expenses

     866         885   

Organizational costs

     83         95   

Stock-based compensation

     3,081         2,026   

Accrued expenses

     175         163   

Deferred expenses

     —           —     

Unearned revenue

     381         52   

Bad debt reserve

     10         5   
  

 

 

    

 

 

 

Total deferred tax assets

  16,314      12,055   
  

 

 

    

 

 

 

Deferred tax liabilities:

Property and equipment

  (1,604   (1,748

Deferred policy acquisition costs

  (5,959   (5,600

Unrealized net gain on securities available-for-sale

  (418   (700

Basis difference related to convertible senior notes

  (5,110   (6,295

Prepaid expenses

  (464   (296

Other

  (260   (156
  

 

 

    

 

 

 

Total deferred tax liabilities

  (13,815   (14,795
  

 

 

    

 

 

 

Net deferred tax assets (liabilities)

$ 2,499    $ (2,740
  

 

 

    

 

 

 

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, 2014 or 2013.