INCOME TAXES

The actual income tax expense (benefit) for the three and six months ended June 30, 2014 and 2013 differed from the “expected” income tax expense (benefit) for those periods (computed by applying the United States federal corporate tax rate of 35 percent to income before income tax expense (benefit)) as follows:



	Three months ended June 30,						Six months ended June 30,
	2014			2013			2014			2013
Computed "expected" income tax expense	$	95		$	2,782		$	5,306		$	9,960
Increases (decreases) in tax resulting from:
Tax-exempt interest income	(858		)	(993		)	(1,802		)	(1,936		)
Dividends received deduction	(258		)	(222		)	(478		)	(417		)
Proration of tax-exempt interest and dividends received deduction	167			182			342			353
Other, net	110			(12		)	182			13
Income tax expense (benefit)	$	(744	)	$	1,737		$	3,550		$	7,973

The Company had no provision for uncertain income tax positions at June 30, 2014 or December 31, 2013. The Company did not recognize any interest or other penalties related to U.S. federal or state income taxes during the three or six months ended June 30, 2014 or 2013. It is the Company’s accounting policy to reflect income tax penalties as other expense, and interest as interest expense.

The Company files a U.S. federal income tax return, along with various state income tax returns. The Company is no longer subject to U.S. federal and state income tax examinations by tax authorities for years before 2010. The Company’s 2011 income tax return has been audited and no adjustments were proposed.