Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Total income taxes were allocated as follows:

	2017		2016
Total tax expense on income	$	828	$	888

Tax expense on components of shareholders’ equity:
Net unrealized gains on investment securities		2,111		671
Total tax expense	$	2,939	$	1,559

A reconciliation of the differences between income taxes computed at the federal statutory income tax rate and the income tax expense is as follows:

	2017			2016
Federal income tax provision at statutory rate of 35%	$	1,875		$	1,233
Dividends-received deduction		(92	)		(95	)
Small life insurance company deduction		(613	)		(376	)
Other		72			55
Remeasurement of deferred taxes due to tax reform enactment		(395	)		—
Adjustment for prior years’ estimates to actual		(19	)		71
Income tax expense	$	828		$	888
Effective tax rate		15.5	%		25.2	%

Deferred tax liabilities and assets at December 31, 2017 and 2016 were comprised of the following:

	2017			2016
Deferred tax liabilities:
Deferred acquisition costs	$	(1,200	)	$	(2,345	)
Deferred and uncollected premiums		(377	)		(654	)
Net unrealized investment gains		(3,150	)		(3,140	)
Other		(331	)		(666	)
Total deferred tax liabilities		(5,058	)		(6,805	)
Deferred tax assets:
Insurance reserves		3,216			4,589
Impaired assets		869			1,454
Alternative minimum tax credit		—			282
Bad debts and other		380			640
Total deferred tax assets		4,465			6,965
Net deferred tax asset (liability)	$	(593	)	$	160

The components of income tax expense were: