Federal Income Tax (Tables)

12 Months Ended

Dec. 31, 2021

Schedule of Federal Income Tax Expense (Benefit)

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



Years Ended December 31,	2021		2020		2019
Current	$	11,081	$	(46,861)	$	(7,843)
Deferred	5,168		(9,948)		9,902
Total	$	16,249	$	(56,809)	$	2,059

Schedule of Income Tax Expense Reconciliation

A reconciliation of income tax expense (benefit) computed at the applicable federal tax rate of 21.0 percent in 2021, 2020 and 2019 to the amount recorded in the accompanying Consolidated Statements of Income and Comprehensive Income is as follows:



Years Ended December 31,	2021		2020		2019
Computed expected income tax expense (benefit)	$	20,337	$	(35,598)	$	3,544

The CARES Act	—		(18,562)		—
Tax-exempt municipal bond interest income	(3,412)		(3,669)		(3,961)
Nontaxable dividend income	(361)		(517)		(594)
Goodwill impairment	—		3,169		—


Compensation	770		695		1,638
Reinsurance			—		998
Research and development credit	(1,545)		(2,045)		—
Other, net	460		(282)		434
Consolidated federal income tax expense (benefit)	$	16,249	$	(56,809)	$	2,059

Schedule of Components of Net Deferred Tax Liability

The significant components of our net deferred tax liability at December 31, 2021 and 2020 are as follows:



December 31,	2021		2020
Deferred tax liabilities
Net unrealized appreciation on investment securities:
Equity securities	$	27,047	$	33,096
All other securities	13,229		22,082
Deferred policy acquisition costs	19,204		18,289
Investments in partnerships	3,229		964
Prepaid pension cost	3,725		4,553
Over funded pension benefit	1,214		—
Net bond discount accretion	323		383
Depreciation	4,097		4,187
Revaluation of investment basis (1)	—		325
Identifiable intangible assets (1)	1,242		1,391
Capitalized Software	6,351		4,891
Other	2,183		1,568
Gross deferred tax liability	81,844		$	91,729
Deferred tax assets
Financial statement reserves in excess of income tax reserves	$	22,879	$	23,851
Unearned premium adjustment	17,296		18,979
Employee profit sharing	2,515		974
Underfunded benefit plan obligation	—		4,295
Post-retirement benefits other than pensions	2,650		9,533
Other-than-temporary impairment of investments	1,529		1,974



Compensation expense related to stock options	1,989		2,307

Nonqualified deferred compensation	2,574		2,066
Other	3,659		2,821


Deferred tax asset	$	55,091	$	66,800
Net deferred tax liability	$	26,753	$	24,929

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