Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Total income taxes were allocated as follows:

	2020		2019
Total tax expense (benefit) on income	$	3,334	$	(21	)

Tax expense on components of shareholders’ equity:
Net unrealized gains on investment securities		3,865		4,783
Total tax expense	$	7,199	$	4,762

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

	2020			2019
Federal income tax provision	$	3,256		$	(86	)
Statutory rate		21	%		21	%
Dividends-received deduction		(12	)		(23	)
Meals & entertainment		20			55
Vested stock & club dues		36			37
Parking disallowance		16			17
Adjustment for prior years’ estimates to actual		18			(21	)
Income tax expense (benefit)	$	3,334		$	(21	)
Effective tax rate		21.5	%		5.2	%

Deferred tax assets and liabilities at December 31, 2020 and 2019 were comprised of the following:

	2020			2019
Deferred tax assets:
Deferred acquisition costs	$	4,666		$	2,540
Insurance reserves		2,682			3,323
Impaired assets		822			822
Bad debts and other		326			319
Total deferred tax assets		8,496			7,004
Deferred tax liabilities:
Deferred and uncollected premiums	$	(409	)	$	(328	)
Net unrealized investment gains		(9,235	)		(6,090	)
Other		(153	)		(272	)
Total deferred tax liabilities		(9,797	)		(6,690	)
Net deferred tax (liability) asset	$	(1,301	)	$	314

The components of income tax expense (benefit) were: