• Filing Date: 2020-03-06
  • Form Type: 10-K
  • Description: Annual report
v3.19.3.a.u2
Income Taxes (Tables)
12 Months Ended
Dec. 31, 2019
Income Tax Disclosure [Abstract]  
Summary of Income Tax Expense

A summary of income tax expense is as follows:

 

 

 

Years Ended December 31,

 

 

 

2019

 

 

2018

 

 

2017

 

Current:

 

 

 

 

 

 

 

 

 

 

 

 

Federal

 

$

6,177

 

 

$

7,443

 

 

$

(3,933

)

State

 

 

1,362

 

 

 

1,490

 

 

 

34

 

Foreign

 

 

107

 

 

 

104

 

 

 

81

 

Total current taxes

 

 

7,646

 

 

 

9,037

 

 

 

(3,818

)

Deferred:

 

 

 

 

 

 

 

 

 

 

 

 

Federal

 

 

1,586

 

 

 

(245

)

 

 

(4,144

)

State

 

 

287

 

 

 

392

 

 

 

(757

)

Foreign

 

 

(2

)

 

 

(7

)

 

 

(12

)

Total deferred taxes

 

 

1,871

 

 

 

140

 

 

 

(4,913

)

Income tax expense (benefit)

 

$

9,517

 

 

$

9,177

 

 

$

(8,731

)

Summary of the Differences Between the Statutory Federal Income Tax Rate and the Effective Tax Rate

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,

 

 

 

2019

 

 

2018

 

 

2017

 

 

 

 

 

 

 

Amount

 

 

%

 

 

Amount

 

 

%

 

 

Amount

 

 

%

 

Income taxes at statutory rate

 

$

7,579

 

 

 

21.0

 

 

$

5,649

 

 

 

21.0

 

 

$

(5,468

)

 

 

35.0

 

Increase (decrease) in income taxes

   resulting from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

State income taxes, net of federal

   tax benefits

 

 

1,362

 

 

 

3.8

 

 

 

1,303

 

 

 

4.8

 

 

 

(657

)

 

 

4.2

 

Effects of tax rate changes

 

 

(37

)

 

 

 

 

 

 

 

 

 

 

 

(1,400

)

 

 

9.0

 

Share-based compensation

 

 

(159

)

 

 

(0.4

)

 

 

2,156

 

 

 

8.0

 

 

 

(705

)

 

 

4.5

 

Non-deductible executive compensation

 

 

685

 

 

 

1.9

 

 

 

306

 

 

 

1.1

 

 

 

244

 

 

 

(1.6

)

Other

 

 

87

 

 

 

0.1

 

 

 

(237

)

 

 

(0.8

)

 

 

(745

)

 

 

4.8

 

Income tax (benefit) expense

 

$

9,517

 

 

 

26.4

 

 

$

9,177

 

 

 

34.1

 

 

$

(8,731

)

 

 

55.9

 

Significant Components of Net Deferred Income Tax Asset

Significant components of the Company’s net deferred income tax assets are as follows:

 

 

 

December 31,

 

 

 

2019

 

 

2018

 

Deferred tax assets:

 

 

 

 

 

 

 

 

Unearned premiums

 

$

6,272

 

 

$

5,455

 

Losses and loss adjustment expenses

 

 

2,838

 

 

 

3,001

 

Stock-based compensation

 

 

878

 

 

 

716

 

Net unrealized investment losses

 

 

 

 

 

1,641

 

Other-than-temporary impairment losses

 

 

77

 

 

 

6

 

Organizational costs

 

 

63

 

 

 

76

 

Accrued expenses

 

 

86

 

 

 

78

 

Unearned revenue

 

 

120

 

 

 

231

 

Bad debt reserve

 

 

9

 

 

 

20

 

Other

 

 

 

 

 

26

 

Total deferred tax assets

 

 

10,343

 

 

 

11,250

 

Deferred tax liabilities:

 

 

 

 

 

 

 

 

Property and equipment

 

 

(1,661

)

 

 

(1,430

)

Intangible assets

 

 

(2,214

)

 

 

(1,841

)

Deferred policy acquisition costs

 

 

(5,469

)

 

 

(4,347

)

Net unrealized investment gains

 

 

(1,547

)

 

 

 

Basis difference related to partnership investments

 

 

(1,188

)

 

 

(1,193

)

Basis difference related to convertible senior notes

 

 

(1,256

)

 

 

(2,429

)

Prepaid expenses

 

 

(392

)

 

 

(394

)

Other

 

 

(624

)

 

 

(684

)

Total deferred tax liabilities

 

 

(14,351

)

 

 

(12,318

)

Net deferred tax liabilities

 

$

(4,008

)

 

$

(1,068

)