INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2017

Schedule of Components of Income Tax Expense (Benefit)

The components of income tax expense include the following:

໿



	Year Ended December 31,
	2017			2016			2015
	(In thousands)
Federal:
Current	$	2,431		$	5,076		$	15,523
Deferred	810			(4,714		)	5,515
Federal income tax expense	3,241			362			21,038
State:
Current	494			674			2,489
Deferred	(150		)	(494		)	562
State income tax expense	344			180			3,051
Total income tax expense	$	3,585		$	542		$	24,089

Schedule of Effective Income Tax Rate Reconciliation

The actual income tax expense differs from the “expected” income tax expense (computed by applying the combined applicable effective federal and state tax rates to income before income tax expense) as follows:

໿



	Year Ended December 31,
	2017			2016			2015
	(In thousands)
Computed expected tax expense provision, at federal rate	$	3,124		$	631		$	22,031
State tax, net of federal tax benefit	187			50			2,222
Tax-exempt interest	(429		)	(571		)	(445		)
Income subject to dividends-received deduction	(76		)	(219		)	(109		)
Return to provision	329			183			119
Rate changes	297			(38		)	—
Executive compensation	185			382			203
Meals and entertainment	76			130			—
Other	(108		)	(6		)	68
Total income tax expense	$	3,585		$	542		$	24,089

Significant Components of Net Deferred Tax Liability

Significant components of the Company’s net deferred tax asset (liability) include the following:

໿



	Year Ended December 31,
	2017			2016
	(In thousands)
Deferred tax assets:
Unearned premiums	$	9,543		$	13,975
Unpaid losses and loss adjustment expenses	1,050			1,869
Accrued expenses	689			692
Net operating loss carryforwards	1,567			7
Deferred revenue	—			2,637
Share-based compensation	255			—
Other	123			152
Total deferred tax assets	13,227			19,332

Deferred tax liabilities:
Deferred acquisition costs	(11,742		)	(17,493		)
Depreciation and amortization	(548		)	(718		)
Unrealized gains on investment securities	(600		)	(1,277		)
Other	(30		)	(97		)
Total deferred tax liabilities	(12,920		)	(19,585		)

Deferred tax asset (liability), net	$	307		$	(253	)