Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

The provision (benefit) for income taxes consisted of the following (in thousands).


							Six Months Ended December 31, 2011		Year Ended June 30, 2011
	Year Ended December 31,
	2013			2012
Federal:
Current	$	175		$	—		$	—	$	—
Deferred		(4	)		—			—		—

		171			—			—		—
State:
Current		476			(8	)		146		296
Deferred		3			3			2		(98	)

		479			(5	)		148		198

	$	650		$	(5	)	$	148	$	198

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,						Six Months Ended December 31,			Year Ended June 30,
	2013			2012			2011			2011
Provision (benefit) for income taxes at statutory rate	$	3,440		$	(3,166	)	$	(10,251	)	$	(19,804	)
Tax effect of:
Tax-exempt investment income		(27	)		(18	)		(2	)		(15	)
Change in the beginning of the period balance of the valuation allowance for deferred tax assets allocated to federal income taxes		(4,277	)		580			4,670			4,761
Net operating loss carryforward expirations		—			1			—			735
Goodwill and identifiable intangible assets		—			—			5,545			14,084
Stock-based compensation		1,133			2,552			30			248
State income taxes, net of federal income tax benefit and valuation allowance		479			(5	)		148			198
Other		(98	)		51			8			(9	)

	$	650		$	(5	)	$	148		$	198

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,
	2013			2012
Deferred tax assets:
Net operating loss carryforwards	$	9,949		$	13,091
Stock option compensation		516			1,704
Unearned premiums and loss and loss adjustment expense reserves		4,898			4,980
Goodwill and identifiable intangible assets		6,311			7,341
Alternative minimum tax (“AMT”) credit carryforwards		1,784			1,612
Accrued expenses and other nondeductible items		1,182			495
Other		1,875			3,456

		26,515			32,679
Deferred tax liabilities:
Deferred acquisition costs		(1,016	)		(1,127	)
Identifiable intangible assets		(1,872	)		(1,872	)
Net unrealized change on investments		(1,181	)		(3,046	)
Other		—			—

		(4,069	)		(6,045	)
Total net deferred tax asset		22,446			26,634
Less: Valuation allowance		(24,224	)		(28,413	)

Net deferred tax liability	$	(1,778	)	$	(1,779	)