Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Total income taxes were allocated as follows:

	2018			2017
Total tax expense (benefit) on income	$	(267	)	$	828

Tax expense (benefit) on components of shareholders’ equity:
Net unrealized gains on investment securities		(2,541	)		2,111
Total tax expense (benefit)	$	(2,808	)	$	2,939

Reconciliation of Income Tax Expense (Benefit)

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

	2018			2017
Federal income tax provision	$	(204	)	$	1,875
Statutory rate		21	%		35	%

Dividends-received deduction		(39	)		(92	)
Small life insurance company deduction		-			(613	)
Other		75			72
Remeasurement of deferred taxes due to tax reform enactment		-			(395	)
Adjustment for prior years’ estimates to actual		(99	)		(19	)
Income tax expense (benefit)	$	(267	)	$	828
Effective tax rate		27.5	%		15.5	%

Deferred tax liabilities and assets

Deferred tax liabilities and assets at December 31, 2018 and 2017 were comprised of the following:

	2018			2017
Deferred tax assets:
Deferred acquisition costs	$	175		$	-
Insurance reserves		3,410			3,216
Impaired assets		1,142			869
Bad debts and other		332			380
Total deferred tax assets		5,059			4,465
Deferred tax liabilities:
Deferred acquisition costs	$	-		$	(1,200	)
Deferred and uncollected premiums		(360	)		(377	)
Net unrealized investment gains		(148	)		(3,150	)
Other		(367	)		(331	)
Total deferred tax liabilities		(875	)		(5,058	)
Net deferred tax asset (liability)	$	4,184		$	(593	)

Components of Income Tax Expense (Benefit)

The components of income tax expense (benefit) were:

	2018			2017
Current - Federal	$	1,969		$	2,186
Deferred - Federal		(2,236	)		(1,358	)
Total	$	(267	)	$	828