FEDERAL INCOME TAX (Tables)

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Federal Income Tax Expense (Benefit)

Federal income tax expense (benefit) is composed of the following:

Years Ended December 31,	2015			2014		2013
Current	$	37,649		$	15,649	$	19,146
Deferred	(5,324		)	1,677		6,616
Total	$	32,325		$	17,326	$	25,762

Income Tax Expense Reconciliation

A reconciliation of income tax expense computed at the applicable federal tax rate of 35.0 percent to the amount recorded in the accompanying Consolidated Statements of Income and Comprehensive Income is as follows:

Years Ended December 31,	2015			2014			2013
Computed expected income tax expense	$	42,508		$	26,762		$	35,666
Tax-exempt municipal bond interest income	(7,669		)	(7,417		)	(7,732		)
Nontaxable dividend income	(1,337		)	(1,232		)	(1,053		)
Valuation allowance reduction	(548		)	(548		)	(548		)
Other, net	(629		)	(239		)	(571		)
Federal income tax expense	$	32,325		$	17,326		$	25,762

Components of Net Deferred Tax Liability

The significant components of our net deferred tax liability at December 31, 2015 and 2014 are as follows:

December 31,	2015			2014
Deferred tax liabilities
Net unrealized appreciation on investment securities:
Equity securities	$	58,674		$	60,952
All other securities	11,159			24,308
Deferred policy acquisition costs	53,960			44,271
Prepaid pension cost	1,920			2,973
Net bond discount accretion	1,430			1,925
Depreciation	1,791			2,667
Revaluation of investment basis (1)	1,824			2,611
Identifiable intangible assets (1)	3,560			3,808
Other	7,627			8,152
Gross deferred tax liability	$	141,945		$	151,667
Deferred tax assets
Financial statement reserves in excess of income tax reserves	$	34,535		$	35,800
Unearned premium adjustment	28,679			26,146
Net operating loss carryforwards	1,265			1,813
Underfunded benefit plan obligation	25,810			31,473
Postretirement benefits other than pensions	17,838			14,374
Other-than-temporary impairment of investments	5,609			5,222
Contingent ceding commission accrual	3,342			3,573
Compensation expense related to stock options	4,627			4,582
Other	6,852			4,738
Gross deferred tax asset	$	128,557		$	127,721
Valuation allowance	(1,265		)	(1,813		)
Deferred tax asset	$	127,292		$	125,908
Net deferred tax liability	$	14,653		$	25,759

(1) Related to our acquisition of Mercer Insurance Group.