Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

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

	Year Ended December 31,
	2015			2014			2013
Federal:
Current	$	20		$	228		$	175
Deferred		(893	)		(19,098	)		(4	)
		(873	)		(18,870	)		171
State:
Current		255			650			476
Deferred		(24	)		(125	)		3
		231			525			479
	$	(642	)	$	(18,345	)	$	650

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,
	2015			2014			2013
Provision (benefit) for income taxes at statutory rate	$	(900	)	$	3,403		$	3,440
Tax effect of:
Tax-exempt investment income		(22	)		(21	)		(27	)
Change in the beginning of the period balance of the valuation allowance for deferred tax assets allocated to federal income taxes		9			(22,427	)		(4,277	)
Stock-based compensation		22			137			1,133
State income taxes, net of federal income tax benefit and state valuation allowance		142			525			479
Permanent items		107			38			(98	)
	$	(642	)	$	(18,345	)	$	650

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).

	Year Ended December 31,
	2015			2014
Deferred tax assets:
Net operating loss carryforwards	$	6,859		$	6,180
Stock-based compensation		421			402
Unearned premiums and loss and loss adjustment expense reserves		6,797			5,614
Goodwill and identifiable intangible assets		4,252			5,404
Alternative minimum tax (“AMT”) credit carryforwards		2,015			2,004
Accrued expenses and other nondeductible items		1,551			1,201
Other		3,528			3,127
		25,423			23,932
Deferred tax liabilities:
Deferred acquisition costs		(1,928	)		(1,211	)
Identifiable intangible assets		(1,872	)		(1,872	)
Net unrealized change on investments		(1,244	)		(2,105	)
Other		(332	)		(460	)
		(5,376	)		(5,648	)
Total net deferred tax asset		20,047			18,284
Less: Valuation allowance		(1,746	)		(1,763	)
Net deferred tax asset	$	18,301		$	16,521