Income Taxes

The provision for income taxes for both continuing and discontinued operations consisted of the following:



	For the Years Ended December 31,
	2013		2012		2011
Income taxes - continuing operations	$	5,660	$	6,716	$	5,947
Income taxes - discontinued operations	8,343		1,579		1,193
Income taxes	$	14,003	$	8,295	$	7,140



The provision for income taxes from continuing operations consisted of the following:	For the Years Ended December 31,
	2013			2012		2011
Current	$	7,978		$	4,272	$	4,797
Deferred	(2,318		)	2,444		1,150
Income taxes - continuing operations	$	5,660		$	6,716	$	5,947

The following table shows a reconciliation of income taxes from continuing operations calculated at the federal statutory rate of 35% and the income tax expense attributable to continuing operations for the following periods:



	For the Years Ended December 31,
	2013					2012					2011
	Amount			Percent of Pre-tax Income		Amount			Percent of Pre-tax Income		Amount			Percent of Pre-tax Income
Income taxes at federal income tax rate	$	6,113		35.00	%	$	6,887		35.00	%	$	6,129		35.00	%
Effect of:
Small life deduction	(516		)	(2.95	)	(444		)	(2.26	)	(375		)	(2.14	)
Non-deductible expenses	91			0.52		33			0.17		233			1.33
Non-deductible preferred dividends	—			—		—			—		105			0.60
Tax exempt interest	(136		)	(0.78	)	(123		)	(0.63	)	(120		)	(0.69	)
State taxes	414			2.37		324			1.65		219			1.25
Prior year tax true up	247			1.41		98			0.50		(506		)	(2.89	)
Non-controlling interest	(516		)	(2.95	)	—			—		—			—
Other, net	(37		)	(0.21	)	(59		)	(0.30	)	262			1.50
Income taxes - continuing operations	$	5,660		32.41	%	$	6,716		34.13	%	$	5,947		33.96	%

The components of the Company's deferred income taxes are as follows:



	At December 31,
	2013		2012
Gross deferred tax assets
Unearned premiums	$	5,052	$	4,852
Deferred revenue	8,080		7,960
Net operating loss carryforward	245		516
Unrealized losses on investments	796		—
Other basis differences in investments	109		—
Unrealized loss on interest rate swap	1,341		1,636
Research credit	—		671
Unpaid claims	115		146
Deferred compensation	977		483
Bad debt allowance	60		238
Other deferred assets	122		108
Total gross deferred tax assets	16,897		16,610
Gross deferred tax liabilities
Deferred acquisition costs	20,228		20,250
Other intangible assets	7,769		14,165
Advanced commissions	4,524		4,204
Depreciation on property and equipment	4,035		5,250
Unrealized gains on investments	—		1,290
Other basis differences in investments	—		65
Other deferred tax liabilities	—		37
Total gross deferred tax liabilities	36,556		45,261
Deferred income taxes, net	$	19,659	$	28,651

At December 31, 2013, the Company had a net operating loss carry forward of $0.6 million, which is subject to certain limitations under IRC Section 382 and will begin to expire in 2025. The Company expects to fully utilize the net operating loss carryforward.

At December 31, 2012, the Company had research and experimentation (research) tax credit carry forwards for federal and state income tax purposes in the amount of $0.5 million and $0.2 million, respectively that were subject to certain limitations under IRC Section 382 and were to begin to expire in 2019. As part of the valuation determinations of the subsidiary in which the research credit was generated, the Company recorded a $0.2 million liability against the research credit carryforward deferred tax asset. At December 31, 2013, the research credits were no longer available to the Company since they were generated by eReinsure, which was sold on December 31, 2013.

The Company has reviewed its uncertain tax positions and management has concluded that there are no additional amounts required to be recorded.

In 2012, the Company was under examination by the Internal Revenue Service ("IRS") for the 2010 and 2009 tax years. In February 2013, the IRS completed its field audit for those tax years and presented its findings. The Company has agreed to those findings and paid $57.0 thousand, which was expensed in the first quarter of 2013.

The Company's income tax returns are subject to review and examination by federal and state taxing authorities. The Company is currently open to audit under the applicable statutes of limitations by the IRS for the tax years 2011 through 2013. The years open to examination by state taxing authorities vary by jurisdiction. There are no extensions of the statute of limitations to assess income taxes currently in effect.