INCOME TAXES (Tables)

3 Months Ended

May 31, 2013

Income Tax Disclosure [Abstract]

Income Tax Expense

Total income tax expense was allocated for the First Quarter of this year and last year as follows: 

	Three Months Ended May 31,
	2013		2012
Income tax expense	$	929,661	$	598,932

Components of Income Tax Expense

Income tax expense was made up of the following components:

	Three Months Ended May 31,
	2013		2012
Current income tax expense (benefit)	$	964,091	$	(2,823,381)
Deferred tax expense (benefit)		(34,430)		3,422,313
Total income tax expense	$	929,661	$	598,932

Difference Between Statutory Federal Tax Rate and Effective Income Tax Rate

Income tax expense differed from amounts computed by applying the Federal income tax rate to pre-tax earnings for the First Quarter of this year and last year, as a result of the following:

	Three Months Ended May 31,
	2013			2012
United States statutory rate		35.0	%		35.0	%
State income taxes		0.1	%		1.3	%
Permanent differences		0.5	%		0.3	%
Combined effective tax rate		35.6	%		36.6	%

Significant Portions of Deferred Tax Assets and Deferred Tax Liabilities

The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities were as follows: 

	May 31, 2013		Feb. 28, 2013
Deferred tax assets:
Impairment of investment in policies	$	290,069	$	305,251
Premium advances allowance		1,540,717		1,510,472
Deferred policy monitoring costs		1,158,532		1,128,832
Investment in securities		672,115		672,115
Charitable contributions		201,658		283,730
Contingency costs		22,109		25,942
Compensated absences		41,393		26,066
State taxes		1,566		23,889
		3,928,159		3,976,297
Valuation allowance		(643,403)		(643,403)
Net deferred tax assets		3,284,756		3,332,894
Deferred tax liabilities:
Settlement costs		(46,169)		(53,867)
Depreciation		(80,422)		(90,327)
Prepaid expenses		(17,500)		(43,750)
Unrealized revenues and brokerage fees		(270,996)		(309,711)
Loss on investment in trust		(13,340)		(13,340)
Net deferred tax liabilities		(428,427)		(510,995)
Total deferred tax asset, net	$	2,856,329	$	2,821,899
Summary of deferred tax assets:
Current	$	1,407,759	$	1,444,709
Non-current		1,448,570		1,377,190
Total deferred tax asset, net	$	2,856,329	$	2,821,899