Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

7.Income Taxes

The Company’s deferred income tax assets and liabilities are as follows:

	December 31,
	2022			2021
	(in thousands)
Deferred income tax assets:
Discounting of net unpaid loss and loss adjustment expenses	$	16,164		$	18,018
Unearned premiums		6,173			6,560
Accrued expenses and other		2,403			2,385
State income tax		2,468			2,135
Accrued policyholder dividends		1,841			1,989
Accrued insurance-related assessments		1,990			1,901
Net unrealized loss on securities		1,182			—
Total deferred tax assets		32,221			32,988
Deferred income tax liabilities:
Deferred policy acquisition costs		(4,391	)		(4,430	)
Unrealized gain on securities available-for-sale		—			(7,791	)
Property and equipment and other		(473	)		(298	)
Salvage and subrogation		(320	)		(428	)
Loss reserves adjustment		(4,243	)		(5,657	)
Total deferred income tax liabilities		(9,427	)		(18,604	)
Net deferred income taxes	$	22,794		$	14,384

The components of consolidated income tax expense (benefit) are as follows:

	Year Ended December 31,
	2022			2021			2020
	(in thousands)
Current:
Federal	$	12,753		$	11,368		$	17,760
State		427			1,055			900
		13,180			12,423			18,660
Deferred:
Federal		(802	)		2,943			1,403
State		(334	)		(1,673	)		254
		(1,136	)		1,270			1,657
Total	$	12,044		$	13,693		$	20,317

As of December 31, 2022 and 2021, the Company had no valuation allowance against its deferred income tax assets and liabilities. As of December 31, 2020, the Company had a valuation allowance against its deferred income tax benefits of $2.2 million.

Income tax expense from operations is different from the amount computed by applying the U.S. federal income tax statutory rate of 21% to income before income taxes as follows:

	Year Ended December 31,
	2022			2021			2020
	(in thousands)
Income tax computed at federal statutory tax rate	$	14,206		$	16,684		$	22,453
Tax-exempt interest, net		(2,268	)		(2,511	)		(3,226	)
State income tax		3			911			1,080
Dividends received deduction		(134	)		(107	)		(89	)
Valuation allowance		(17	)		(1,803	)		46
Prior year adjustments		14			344			3
Other		240			175			50
	$	12,044		$	13,693		$	20,317

The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. There were no uncertain tax positions as of December 31, 2022, 2021 and 2020.

Tax years 2019 through 2022 are subject to examination by the federal and state taxing authorities.