Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Taxes

Schedule of components of deferred tax assets and liabilities

	December 31
($ in thousands)	2019		2018
Deferred tax assets:
Loss reserves	$	13,289	$	11,342
Loss reserves transitional adjustment		6,104		6,954
Unearned premiums		16,785		14,985
Net operating loss carry forwards – state and local		17,008		16,373
Net operating loss carry forwards – federal		357		16,771
Capital loss carry forwards – federal		1,519		2,577
Bad debt reserve		3,229		3,182
Impairments		517		556
Deferred compensation		5,659		5,613
Amortization of intangibles		695		813
Limited partnership income		2,566		—
Unrealized depreciation of investments		—		7,446
Other		3,151		2,211
Total deferred tax assets		70,879		88,823
Less: valuation allowance		(17,604)		(16,962)
Deferred tax assets, net of allowance		53,275		71,861
Deferred tax liabilities:
Deferred policy acquisition costs		20,693		19,634
Loss reserve transitional adjustment		4,578		6,085
Fair value adjustments		3,628		3,635
Unrealized appreciation of investments		8,669		—
Limited partnership income		—		422
Other		10,904		8,846
Total deferred tax liabilities		48,472		38,622
Net deferred income taxes	$	4,803	$	33,239

Schedule of tax benefit of the U.S. federal NOLs generated by year and expiration date

($ in thousands)	Amount		Expires
2010	$	357	2030
Total	$	357

Schedule of change in valuation allowance account with respect to the deferred tax asset

($ in thousands)	2019		2018
Balance, beginning of year	$	16,962	$	6,511
Change in valuation allowance		642		10,451
Balance, end of year	$	17,604	$	16,962

Schedule of reconciliation of the beginning and ending amount of unrecognized tax benefits

($ in thousands)	2019		2018
Balance, beginning of year	$	528	$	483
Additions for tax positions of prior years		260		45
Reductions for tax positions of prior years		(350)		—
Balance, end of year	$	438	$	528

Summary of effective income tax rate reconciliation

($ in thousands)	2019		2018		2017
Expected tax expense at statutory rates in taxable  jurisdictions	$	12,103	$	13,896	$	11,384
Tax-exempt interest		—		(46)		(42)
State taxes		(629)		(10,746)		3,302
Valuation allowance		642		10,451		(2,819)
Effect of provision to tax return filing adjustments		42		—		671
Effect of Tax Reform		—		—		25,108
Other		(21)		(166)		629
Total income tax expense	$	12,137	$	13,389	$	38,233