7.	Income Taxes

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


	December 31,
	2015			2014
	(in thousands)
Deferred income tax assets:
Discounting of net unpaid loss and loss adjustment expenses	$	15,415		$	17,952
Unearned premiums		14,839			14,788
Accrued expenses and other		3,904			4,306
State income tax		488			591
Accrued policyholder dividends		719			438
Impaired securities		238			80
Capital loss carryforward		715			—
Accrued insurance-related assessments		4,953			4,804

Total deferred tax assets		41,271			42,959
Deferred income tax liabilities:
Deferred policy acquisition costs		(9,012	)		(8,815	)
Unrealized gain (loss) on securities available-for-sale		(1,393	)		(1,513	)
Property and equipment and other		(696	)		(331	)
Salvage and subrogation		(265	)		(289	)
Guaranty fund related items		—			(780	)

Total deferred income tax liabilities		(11,366	)		(11,728	)

Net deferred income taxes	$	29,905		$	31,231

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


	Year Ended December 31,
	2015		2014			2013
	(in thousands)
Current:
Federal	$	28,047	$	20,811		$	15,270
State		1,012		684			504

		29,059		21,495			15,774
Deferred:
Federal		1,343		(821	)		(207	)
State		103		(591	)		—

		1,446		(1,412	)		(207	)

Total	$	30,505	$	20,083		$	15,567

In 2013, 2014 and 2015, the Company made no adjustment to the valuation allowance. As of December 31, 2015, there is no valuation allowance.

Income tax expense from operations is different from the amount computed by applying the U.S. federal income tax statutory rate of 35% to income before income taxes as follows:


	Year Ended December 31,
	2015			2014			2013
	(in thousands)
Income tax computed at federal statutory tax rate	$	35,338		$	25,812		$	20,721
Tax-exempt interest, net		(5,630	)		(5,620	)		(5,458	)
State income tax		762			(146	)		504
Dividends received deduction		(19	)		(60	)		(113	)
Other		54			97			(87	)

	$	30,505		$	20,083		$	15,567

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, 2015, 2014 and 2013.

Tax years 2012 through 2015 are subject to examination by the federal and state taxing authorities. Tax year 2011 is currently being examined by the state of Illinois.