Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

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

	Year Ended December 31,
	2017		2016			2015
Federal:
Current	$	123	$	—		$	20
Deferred		14,760		(16,024	)		(893	)
		14,883		(16,024	)		(873	)
State:
Current		184		328			255
Deferred		123		(152	)		(24	)
		307		176			231
	$	15,190	$	(15,848	)	$	(642	)

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 21% to (loss) income before income taxes as a result of the following (in thousands).

	Year Ended December 31,
	2017			2016			2015
Provision (benefit) for income taxes at statutory rate	$	2,305		$	(15,796	)	$	(900	)
Tax effect of:
Tax-exempt investment income		(66	)		(48	)		(22	)
Change in the beginning of the period balance of the valuation allowance for deferred tax assets allocated to federal income taxes		1			(157	)		9
Stock-based compensation		229			64			22
State income taxes, net of federal income tax benefit and state valuation allowance		243			60			142
Effect of federal tax law change		12,509			-			-
Other items		(31	)		29			107
	$	15,190		$	(15,848	)	$	(642	)

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,
	2017			2016
Deferred tax assets:
Net operating loss carryforwards	$	13,380		$	24,208
Stock-based compensation		164			404
Unearned premiums and loss and loss adjustment expense reserves		5,408			6,752
Goodwill and identifiable intangible assets		853			2,832
Alternative minimum tax (“AMT”) credit carryforwards		1,991			2,015
Accrued expenses and other nondeductible items		1,292			1,345
Other		2,434			3,619
		25,522			41,175
Deferred tax liabilities:
Deferred acquisition costs		(1,039	)		(1,698	)
Identifiable intangible assets		(1,200	)		(1,872	)
Loss reserve discounting		(1,206	)		—
Other		(191	)		(92	)
		(3,636	)		(3,662	)
Total net deferred tax asset		21,886			37,513
Less: Valuation allowance		(1,337	)		(1,872	)
Net deferred tax asset	$	20,549		$	35,641