| Provision (Benefit) for Income Taxes Differs from Amounts Computed by Applying Statutory Federal Corporate Tax Rate |
The provision (benefit) for income taxes differs from the amounts computed by applying the statutory federal corporate tax rate of 35% to income (loss) before income taxes as a result of the following (in thousands).
|
|
|
Year Ended December 31, |
|
|
|
|
2014 |
|
|
2013 |
|
|
2012 |
|
|
Provision (benefit) for income taxes at statutory rate |
|
$ |
3,403 |
|
|
$ |
3,440 |
|
|
$ |
(3,166 |
) |
|
Tax effect of: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax-exempt investment income |
|
|
(21 |
) |
|
|
(27 |
) |
|
|
(18 |
) |
|
Change in the beginning of the year balance of the valuation allowance for deferred tax assets allocated to income taxes |
|
|
(22,427 |
) |
|
|
(4,277 |
) |
|
|
580 |
|
|
Stock-based compensation |
|
|
137 |
|
|
|
1,133 |
|
|
|
2,552 |
|
|
State income taxes |
|
|
525 |
|
|
|
479 |
|
|
|
(5 |
) |
|
Other |
|
|
38 |
|
|
|
(98 |
) |
|
|
52 |
|
|
|
|
$ |
(18,345 |
) |
|
$ |
650 |
|
|
$ |
(5 |
) |
|
| Summary of Net Deferred Tax Assets and Liabilities |
The tax effects of temporary differences that give rise to the net deferred tax assets and liabilities are presented below (in thousands).
|
|
|
December 31, |
|
|
|
|
2014 |
|
|
2013 |
|
|
Deferred tax assets: |
|
|
|
|
|
|
|
|
|
Net operating loss carryforwards |
|
$ |
6,180 |
|
|
$ |
9,949 |
|
|
Stock option compensation |
|
|
402 |
|
|
|
516 |
|
|
Unearned premiums and loss and loss adjustment expense reserves |
|
|
5,614 |
|
|
|
4,898 |
|
|
Goodwill and identifiable intangible assets |
|
|
5,404 |
|
|
|
6,311 |
|
|
Alternative minimum tax (“AMT”) credit carryforwards |
|
|
2,004 |
|
|
|
1,784 |
|
|
Accrued expenses and other nondeductible items |
|
|
1,201 |
|
|
|
1,182 |
|
|
Other |
|
|
3,127 |
|
|
|
1,875 |
|
|
|
|
|
23,932 |
|
|
|
26,515 |
|
|
Deferred tax liabilities: |
|
|
|
|
|
|
|
|
|
Deferred acquisition costs |
|
|
(1,211 |
) |
|
|
(1,016 |
) |
|
Identifiable intangible assets |
|
|
(1,872 |
) |
|
|
(1,872 |
) |
|
Net unrealized change on investments |
|
|
(2,105 |
) |
|
|
(1,181 |
) |
|
Other |
|
|
(460 |
) |
|
|
— |
|
|
|
|
|
(5,648 |
) |
|
|
(4,069 |
) |
|
|
|
|
|
|
|
|
|
|
|
Total net deferred tax asset |
|
|
18,284 |
|
|
|
22,446 |
|
|
Less: Valuation allowance |
|
|
(1,763 |
) |
|
|
(24,224 |
) |
|
Net deferred tax asset (liability) |
|
$ |
16,521 |
|
|
$ |
(1,778 |
) |
|