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Income Taxes | 12 Months Ended
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Dec. 31, 2014
Income Taxes [Abstract] |
Income Taxes | Note 5. Income Taxes Total income taxes were allocated as follows:
| 2014 | 2013
Total tax expense on income | $ | 474 |  | $ | 184 |
Tax expense (benefit) on components of shareholders’ equity: |  |  |  |  |  |
Net unrealized gains (losses) on investment securities |  | 1,656 |  |  | (7,247 | )
Fair value adjustment to derivative financial instrument |  | — |  |  | 49 |
Total tax expense (benefit) on shareholders’ equity |  | 1,656 |  |  | (7,198 | )
Total tax expense (benefit) | $ | 2,130 |  | $ | (7,014 | )
A reconciliation of the differences between income taxes computed at the federal statutory income tax rate and the income tax expense is as follows:
| 2014 | 2013
Federal income tax provision at statutory rate of 35% | $ | 1,717 |  | $ | 3,922 |
Dividends-received deduction |  | (115 | ) |  | (149 | )
Small life insurance company deduction |  | (600 | ) |  | (586 | )
Other |  | 53 |  |  | 50 |
Change in asset valuation allowance due to change in judgment relating to realizability of deferred tax assets |  | (651 | ) |  | (3,059 | )
Adjustment for prior years’ estimates to actual |  | 70 |  |  | 6 |
Income tax expense | $ | 474 |  | $ | 184 |
The primary differences between the effective tax rate and the federal statutory income tax rate resulted from the dividends-received deduction (“DRD”), the small life insurance company deduction (“SLD”) and the change in deferred tax asset valuation allowance. The current estimated DRD is adjusted as underlying factors change and can vary from estimates based on, but not limited to, actual distributions from investments as well as the amount of the Company’s taxable income. The SLD varies in amount and is determined at a rate of 60 percent of the tentative life insurance company taxable income (“LICTI”). The SLD for any taxable year is reduced (but not below zero) by 15 percent of the tentative LICTI for such taxable year as it exceeds $3,000 and is ultimately phased out at $15,000. The change in deferred tax asset valuation allowance was due to the unanticipated utilization of certain capital loss carryforward benefits that had been previously reserved. Deferred tax liabilities and assets at December 31, 2014 and 2013 were comprised of the following:
| 2014 | 2013
Deferred tax liabilities: |  |  |  |  |  |
Deferred acquisition costs | $ | (2,832 | ) | $ | (3,766 | )
Deferred and uncollected premiums |  | (704 | ) |  | (734 | )
Net unrealized investment gains |  | (4,997 | ) |  | (3,341 | )
Other |  | (37 | ) |  | (8 | )
Total deferred tax liabilities |  | (8,570 | ) |  | (7,849 | )
Deferred tax assets: |  |  |  |  |  |
Net operating loss carryforwards |  | 20 |  |  | 844 |
Insurance reserves |  | 4,676 |  |  | 5,109 |
Capital loss carryforwards |  | — |  |  | 2,177 |
Impaired assets |  | 1,474 |  |  | 1,406 |
Alternative minimum tax credit |  | 239 |  |  | 309 |
Bad debts and other |  | 766 |  |  | 576 |
Total deferred tax assets |  | 7,175 |  |  | 10,421 |
Asset valuation allowance |  | — |  |  | (2,209 | )
Net deferred tax asset (liability) | $ | (1,395 | ) | $ | 363 |
The components of income tax expense were:
| 2014 | 2013
Current - Federal | $ | 372 |  | $ | 513 |
Deferred - Federal |  | 753 |  |  | 2,730 |
Change in deferred tax asset valuation allowance |  | (651 | ) |  | (3,059 | )
Total | $ | 474 |  | $ | 184 |
As of December 31, 2014, the Company had regular federal net operating loss carryforwards (“NOLs”) of approximately $58 expiring in 2032. Currently, the Company believes that deferred income tax benefits relating to the NOLs will be realized. However, expected realization of the NOLs is assessed periodically based on the Company’s then current and anticipated results of operations, and amounts could increase or decrease if estimates of future taxable income change. At December 31, 2013, a valuation allowance of $2,209 was established against deferred income tax benefits relating primarily to capital loss carryforwards that may not be realized. During 2014, the valuation allowance was decreased to zero. The decrease was primarily due to the write off of certain expired capital loss carryforward benefits that had been previously reserved for through an existing valuation allowance. The Company has formal tax-sharing agreements, and files a consolidated income tax return, with its subsidiaries.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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