10-K Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Schedule of Components of Income Tax Expense (Benefit)

The income tax provision is as follows:


Years Ended December 31,	2023		2022
	($ in thousands)
Deferred income tax benefit
Federal	$	(4,362)	$	(2,972)

Total deferred income tax benefit	(4,362)		(2,972)

Current income tax expense
Federal	11,182		6,194
State	248		183
Total current income tax expense	11,430		6,377

Income tax expense	$	7,068	$	3,405

Schedule of Effective Income Tax Rate Reconciliation

The effective tax rate on income from continuing operations was higher than the prevailing statutory federal income tax rate. Among the most significant book-to-tax adjustments were the following:


Years Ended December 31,	2023		2022
	($ in thousands)
Tax expense (benefit) at statutory tax rate of 21.0%	$	6,744	$	3,079

Tax effect of significant reconciling items:
Permanent differences	128		181

State tax, net of federal tax	196		145



Income tax expense	$	7,068	$	3,405

Schedule of Deferred Tax Assets and Liabilities

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes, and the amount used for income tax purposes. Significant components of the Company’s net deferred income taxes are as follows:


As of December 31,	2023		2022
	($ in thousands)
Deferred tax assets
Unearned premium disallowance	$	9,578	$	6,606
Unrealized losses on investments	3,023		4,436
Reserves for losses and loss adjustment expenses	5,377		2,586
Share-based compensation	338		206
Accrued benefits	281		168
Amortization of startup costs	291		159
Accrued expenses	87		92
Other	34		31
Capital loss carryforward	3		3






Total deferred tax assets	19,012		14,287

Deferred tax liabilities
Deferred policy acquisition costs	$	4,075	$	2,421
Depreciation	219		538
Accrued bond discount	489		47




Total deferred tax liabilities	4,783		3,006



Net deferred tax assets	$	14,229	$	11,281