FEDERAL INCOME TAX (Tables)

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Federal Income Tax Expense (Benefit)

Federal income tax expense (benefit) from both continuing and discontinued operations is composed of the following:

Years Ended December 31,	2020		2019		2018
Current	$	(46,861)	$	(7,843)	$	18,493
Deferred	(9,948)		9,902		(21,791)
Total	$	(56,809)	$	2,059	$	(3,298)

Income Tax Expense Reconciliation

A reconciliation of income tax expense (benefit) computed at the applicable federal tax rate of 21.0 percent in 2020, 2019 and 2018 to the amount recorded in the accompanying Consolidated Statements of Income and Comprehensive Income is as follows:

Years Ended December 31,	2020		2019		2018
Computed expected income tax expense (benefit)	$	(35,598)	$	3,544	$	5,114
The CARES Act	(18,562)		—		—
Tax-exempt municipal bond interest income	(3,669)		(3,961)		(4,235)
Nontaxable dividend income	(517)		(594)		(591)
Goodwill impairment	3,169		—		—
Valuation allowance reduction	—		—		(329)
Compensation	695		1,638		(497)
Reinsurance	—		998		—
Research and development credit	(2,045)		—		—
Other, net	(282)		434		(2,760)
Consolidated federal income tax expense (benefit)	$	(56,809)	$	2,059	$	(3,298)
Reconciliation of consolidated federal income tax expense (benefit) from:
Continuing operations	$	(56,809)	$	2,059	$	(11,405)
Gain on sale of discontinued operations	—		—		7,544
Discontinued operations	—		—		563
Consolidated federal income tax expense (benefit)	$	(56,809)	$	2,059	$	(3,298)

Components of Net Deferred Tax Liability

The significant components of our net deferred tax liability at December 31, 2020 and 2019 are as follows:

December 31,	2020		2019
Deferred tax liabilities
Net unrealized appreciation on investment securities:
Equity securities	$	33,096	$	48,652
All other securities	22,082		12,568
Deferred policy acquisition costs	18,289		19,801
Investments in partnerships	964		2,156
Prepaid pension cost	4,553		4,441
Net bond discount accretion	383		357
Depreciation	4,187		1,908
Revaluation of investment basis (1)	325		377
Identifiable intangible assets (1)	1,391		1,540
Capitalized Software	4,891		—
Other	1,568		1,416
Gross deferred tax liability	91,729		$	93,216
Deferred tax assets
Financial statement reserves in excess of income tax reserves	$	23,851	$	20,845
Unearned premium adjustment	18,979		20,816
Net operating loss carryforwards	—		1,708
Underfunded benefit plan obligation	4,295		9,072
Post-retirement benefits other than pensions	9,533		10,785
Other-than-temporary impairment of investments	1,974		2,094
Compensation expense related to stock options	2,307		2,394
Nonqualified deferred compensation	2,066		1,623
Other	3,795		3,293
Deferred tax asset	$	66,800	$	72,630
Net deferred tax liability	$	24,929	$	20,586

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