INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2015

Summary of Provision for Income Tax Benefit

A summary of the provision for income tax expense is as follows.

	Year Ended December 31,
	2015		2014		2013
	(in thousands)
Federal:
Current	$	15,523	$	16,659	$	4,289
Deferred		6,118		1,059		1,393
Federal income tax expense		21,641		17,718		5,682
State:
Current		2,489		2,204		-
Deferred		623		186		809
State income tax expense		3,112		2,390		809

Total	$	24,753	$	20,108	$	6,491

Components of Effective Federal and State Tax Rates to Income before Provision for Income Tax Benefit

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,
	2015			2014			2013
	(in thousands)
Computed expected tax expense provision, at federal rate	$	22,829		$	19,887		$	6,535
State tax, net of federal tax benefit		2,291			1,696			698
Tax-exempt interest		(445	)		(312	)		(31	)
Income subject to dividends-received deduction		(109	)		(136	)		(97	)
Return to provision and rate changes		119			(1,027	)		(306	)
Other		68			-			(308	)
Income tax expense total	$	24,753		$	20,108		$	6,491

Components of Net Deferred Tax Asset

Significant components of our net deferred tax liability are as follows:

	Year Ended December 31,
	2015			2014
	(in thousands)
Deferred tax assets:
Unearned premiums	$	9,375		$	7,812
Loss and loss adjustment expense reserves		1,175			1,239
Accrued expenses		694			-
Net operating loss carryforwards		140			-
Share-based compensation		606			545
Other		212			144
Total		12,202			9,740

Deferred tax liabilities:
Deferred acquisition costs		(11,906	)		(6,199	)
Net unrealized gains on investments		(2,336	)		(4,792	)
Deferred revenue related to reinsurance		(3,395	)		-
Other		(192	)		(90	)
Total		(17,829	)		(11,081	)

Net deferred tax liability	$	(5,627	)	$	(1,341	)