Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Schedule of Income Tax Expense (Benefit)

The income tax expense (benefit) is comprised of the following (dollars in thousands):



	Year Ended December 31,
	2015		2014			2013
Current tax expense (benefit)	$	48	$	3		$	(1	)
Deferred tax expense (benefit)	—		(284		)	4
Total income tax expense (benefit)	$	48	$	(281	)	$	3

Summary of Income Tax Expense (Benefit) Reconciliation

The income tax expense (benefit) differed from the amounts computed by applying the statutory U.S. federal income tax rate of 34% to pretax income as a result of the following (dollars in thousands):



	Year Ended December 31,
	2015			2014			2013

Income (loss) before income taxes	$	83		$	(7,220	)	$	283
Deconsolidation of affiliate	55			—			—
Statutory U.S. federal income tax rate	28			(2,455		)	96
State income taxes, net of federal benefit	(72		)	(246		)	—
Gains on acquisitions	—			—			(1,278		)
Tax‑exempt investment income and dividend received deduction	(116		)	(66		)	(80		)
Nondeductible acquisition costs and purchase adjustments	—			143			70
Nondeductible meals and entertainment	45			30			22
Valuation allowance on deferred tax assets	(2,050		)	2,283			1,089
NOL write-off	2,150			—			—
Other	8			30			84
Income tax expense (benefit)	$	48		$	(281	)	$	3
Effective tax rate	57.8		%	3.9		%	1.2		%

Schedule of Deferred Tax Assets and Liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below (dollars in thousands):



	December 31,
	2015			2014
Deferred tax assets:
Discounted unpaid losses and loss adjustment expenses	$	465		$	481
Unearned premiums	3,385			2,423
Net operating loss carryforwards	5,932			6,889
State net operating loss carryforwards	209			213
Other	(152		)	(159		)
Gross deferred tax assets	9,839			9,847
Less valuation allowance	(5,160		)	(6,917		)
Total deferred tax assets, net of allowance	4,679			2,930
Deferred tax liabilities:
Investment basis difference	49			38
Unrealized gains on investments	266			562
Deferred policy acquisition costs	4,115			1,971
Intangible assets	307			306
Property and equipment	267			378
Total deferred tax liabilities	5,004			3,255
Net deferred tax liability	$	(325	)	$	(325	)