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Income Taxes
12 Months Ended
Dec. 31, 2014
Income Tax Disclosure [Abstract]  
Income Taxes

Note 12. Income Taxes

The Company and its subsidiaries file a consolidated federal income tax return. The Company files consolidated or separate state income tax returns as permitted by individual states in which it operates.

Income tax expense was $9,137, $17,460, and $14,561 for the years ended December 31, 2014, 2013, and 2012, respectively, which differed from the amount computed by applying the federal income tax rate of 35% for the years ended December 31, 2014, 2013, and 2012 to total income before income taxes as a result of the following:

 

     2014      2013      2012  

Federal tax expense at statutory rate

   $ 8,379       $ 16,189       $ 13,760   

Increase (reduction) in income taxes resulting from:

        

Small insurance company income exclusion

     —          —          (451

State tax, net of federal benefit

     603         1,112         1,026   

Other

     155         159         226   
  

 

 

    

 

 

    

 

 

 
   $ 9,137       $ 17,460       $ 14,561   
  

 

 

    

 

 

    

 

 

 

Income tax expense attributable to total income before income taxes consists of the following for the years ended December 31, 2014, 2013, and 2012:

 

     2014      2013      2012  

Current:

        

Federal

   $ 11,827       $ 18,297       $ 7,467   

State and local

     1,859         2,457         1,132   
  

 

 

    

 

 

    

 

 

 
     13,686         20,754         8,599   
  

 

 

    

 

 

    

 

 

 

Deferred:

        

Federal

     (3,958      (2,549      5,516   

State and local

     (591      (745      446   
  

 

 

    

 

 

    

 

 

 
     (4,549      (3,294      5,962   
  

 

 

    

 

 

    

 

 

 

Total

   $ 9,137       $ 17,460       $ 14,561   
  

 

 

    

 

 

    

 

 

 

 

Net deferred tax assets and liabilities consist of the following as of December 31, 2014 and 2013:

 

     2014      2013  

Deferred tax assets:

     

Allowance for credit losses

   $ 15,620       $ 10,769   

Unearned insurance commissions

     1,490         1,461   

Deferred loan fees

     134         3,601   

Share-based compensation

     1,694         988   

Amortization of intangible assets

     609         501   

State net operating loss carryforward

     69         —     

Accrued expenses

     828         694   

Other

     189         12   
  

 

 

    

 

 

 

Gross deferred tax assets

     20,633         18,026   
  

 

 

    

 

 

 

Deferred tax liabilities:

     

Fair market value adjustment of finance receivables

     14,403         16,753   

Deferred loan costs

     2,283         2,226   

Tax over book depreciation

     1,403         1,182   

Prepaid expenses

     518         510   

Other

     156         8   
  

 

 

    

 

 

 

Gross deferred tax liabilities

     18,763         20,679   
  

 

 

    

 

 

 

Net deferred tax asset (liability)

   $ 1,870       $ (2,653
  

 

 

    

 

 

 

The Company’s determination of the realization of the net deferred tax asset is based on its assessment of all available positive and negative evidence. At December 31, 2014, positive evidence supporting the realization of the deferred tax assets includes generation of taxable income for the two prior tax years and reversal of taxable temporary differences. At December 31, 2014, the Company has not identified significant negative evidence related to the realization of its deferred tax assets. At both December 31, 2014, and December 31, 2013, the Company is in a three-year cumulative pre-tax book income position. As noted below, the Company has certain state net operating loss carryforwards at December 31, 2014, and the Company expects to fully utilize these deferred tax assets within the state carryforward periods based on available evidence existing as of the balance sheet date.

As of December 31, 2014 and 2013, the Company has state net operating loss carryforwards of approximately $2.5 million and $0, respectively, which will be available to offset future taxable income. If not used, these carryforwards will expire between 2029 and 2034.

At December 31, 2014, the Company did not have any material uncertain tax positions.