ftfc20160630

Cash Flow, Supplemental Disclosures [Text Block]

In conjunction with this 2015 reinsurance assumption transaction, the non-cash impact on operating activities is summarized as follows:

	(Unaudited) Six Months Ended June 30, 2015

Reinsurance assumption asset	$	550,000

Gain on reinsurance assumption	$	550,000

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Note 1 - Organization and Significant Accounting Policies	6 Months Ended
	Jun. 30, 2016
Notes to Financial Statements
Significant Accounting Policies [Text Block]	1. Organization and Significant Accounting Policies Nature of Operations First Trinity Financial Corporation (the “Company” or “FTFC”) is the parent holding company of Trinity Life Insurance Company (“TLIC”), Family Benefit Life Insurance Company (“FBLIC”) and First Trinity Capital Corporation (“FTCC”). The Company was incorporated in Oklahoma on April 19, 2004, for the primary purpose of organizing a life insurance subsidiary. The Company owns 100% of TLIC. TLIC owns 100% of FBLIC. TLIC and FBLIC are primarily engaged in the business of marketing, underwriting and distributing a broad range of individual life insurance and annuity products to individuals. TLIC’s and FBLIC’s current product portfolio consists of a modified premium whole life insurance policy with a flexible premium deferred annuity rider, whole life, term, final expense, accidental death and dismemberment and annuity products. The term products are both renewable and convertible and issued for 10, 15, 20 and 30 years. They can be issued with premiums fully guaranteed for the entire term period or with a limited premium guarantee. The final expense is issued as either a simplified issue or as a graded benefit, determined by underwriting. The TLIC and FBLIC products are sold through independent agents. TLIC is licensed in the states of Illinois, Kansas, Kentucky, Nebraska, North Dakota, Ohio, Oklahoma and Texas. FBLIC is licensed in the states of Alabama, Arizona, Arkansas, Colorado, Georgia, Illinois, Indiana, Kansas, Kentucky, Louisiana, Michigan, Mississippi, Missouri, Nebraska, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Dakota, Tennessee, Texas, Utah, Virginia and West Virginia. The Company owns 100% of FTCC that was incorporated in 2006, and began operations in January 2007. FTCC provided financing for casualty insurance premiums for individuals and companies and was licensed to conduct premium financing business in the states of Alabama, Arkansas, Louisiana, Mississippi and Oklahoma. FTCC currently has no operations other than minor premium refunds, collections of past due accounts and accounts involved in litigation. Company Capitalization The Company raised $1,450,000 from two private placement stock offerings during 2004 and $25,669,480 from two public stock offerings and one private placement stock offering from June 22, 2005 through February 23, 2007; June 29, 2010 through April 30, 2012; and August 15, 2012 through March 8, 2013. The Company issued 7,347,488 shares of its common stock and incurred $3,624,518 of offering costs during these private placements and public stock offerings. The Company also issued 702,685 shares of its common stock in connection with two stock dividends paid to shareholders in 2011 and 2012 that resulted in accumulated earnings being charged $5,270,138 with an offsetting credit of $5,270,138 to common stock and additional paid-in capital. The Company has also purchased 247,580 shares of treasury stock at a cost of $893,947 from former members of the Board of Directors including the former Chairman of the Board of Directors, a former agent, the former spouse of the Company’s Chairman, Chief Executive Officer and President and a charitable organization where a former member of the Board of Directors had donated shares of the Company’s common stock. Acquisition of Other Companies On December 23, 2008, FTFC acquired 100% of the outstanding common stock of First Life America Corporation (“FLAC”) from an unaffiliated company. The acquisition of FLAC was accounted for as a purchase. The aggregate purchase price for FLAC was approximately $2,695,000 (including direct cost associated with the acquisition of approximately $195,000). The acquisition of FLAC was financed with the working capital of FTFC. On December 31, 2008, FTFC made FLAC a 15 year loan in the form of a surplus note in the amount of $250,000 with an interest rate of 6% payable monthly, that was approved by the Oklahoma Insurance Department (“OID”). This surplus note is eliminated in consolidation. On August 31, 2009, two of the Company’s subsidiaries, Trinity Life Insurance Company (“Old TLIC”) and FLAC, were merged, with FLAC being the surviving company. Immediately following the merger, FLAC changed its name to TLIC. On December 28, 2011, TLIC acquired 100% of the outstanding common stock of FBLIC from FBLIC’s shareholders. The acquisition of FBLIC was accounted for as a purchase. The aggregate purchase price for the acquisition of FBLIC was $13,855,129. The acquisition of FBLIC was financed with the working capital of TLIC. On April 28, 2015, the Company acquired a block of life insurance policies and annuity contracts according to the terms of an assumption reinsurance agreement. During the second quarter of 2015, the Company estimated and recorded assets of $550,000 and a gain of $550,000 on the reinsurance assumption transaction. The Company completed the reinsurance assumption transaction during the third quarter of 2015 and adjusted the gain to $588,923 and recorded assets of $3,644,839 (including cash) and assumed liabilities of $3,055,916. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting primarily of normal recurring accruals) considered necessary for a fair presentation of the results for the interim periods have been included. The results of operations for the three and six months ended June 30, 2016 are not necessarily indicative of the results to be expected for the year ended December 31, 2016 or for any other interim period or for any other future year. Certain financial information which is normally included in notes to consolidated financial statements prepared in accordance with U.S. GAAP, but which is not required for interim reporting purposes, has been condensed or omitted. The accompanying consolidated financial statements and notes thereto should be read in conjunction with the financial statements and notes thereto included in the Company's report on Form 10-K for the year ended December 31, 2015. Principles of Consolidation The consolidated financial statements include the accounts and operations of the Company and its subsidiaries. All intercompany accounts and transactions are eliminated in consolidation. Reclassifications Certain reclassifications have been made in the prior year and prior quarter financial statements to conform to current year and current quarter classifications. These reclassifications had no effect on previously reported net income or shareholders' equity. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results. Common Stock Common stock is fully paid, non-assessable and has a par value of $.01 per share. Treasury Stock Treasury stock, representing shares of the Company’s common stock that have been reacquired after having been issued and fully paid, is recorded at the reacquisition cost and the shares are no longer outstanding. Subsequent Events Management has evaluated all events subsequent to June 30, 2016 through the date that these financial statements have been issued. Recent Accounting Pronouncements Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board (“FASB”) issued updated guidance to clarify the principles for recognizing revenue. While insurance contracts are not within the scope of this updated guidance, the Company's fee income related to providing services will be subject to this updated guidance. The updated guidance requires an entity to recognize revenue as performance obligations are met, in order to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration the entity is entitled to receive for those goods or services. The following steps are applied in the updated guidance: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when, or as, the entity satisfies a performance obligation. In July 2015, the FASB deferred the effective date of the updated guidance on revenue recognition by one year to the quarter ending March 31, 2018. The adoption of this guidance is not expected to have a material effect on the Company’s result of operations, financial position or liquidity. Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period In June 2014, the FASB issued updated guidance to resolve diversity in practice concerning employee share-based payments that contain performance targets that could be achieved after the requisite service period. Many reporting entities account for performance targets that could be achieved after the requisite service period as performance conditions that affect the vesting of the award and, therefore, do not reflect the performance targets in the estimate of the grant-date fair value of the award. Other reporting entities treat those performance targets as nonvesting conditions that affect the grant-date fair value of the award. The updated guidance requires that a performance target that affects vesting and that can be achieved after the requisite service period be treated as a performance condition. As such, the performance target that affects vesting should not be reflected in estimating that fair value of the award at the grant date. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the periods for which service has been rendered. If the performance target becomes probable of being achieved before the end of the service period, the remaining unrecognized compensation cost for which requisite service has not yet been rendered is recognized prospectively over the remaining service period. The total amount of compensation cost recognized during and after the service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The updated guidance is effective for annual and interim periods beginning after December 15, 2015, with early adoption permitted. The adoption of this guidance did not have a material effect on the Company's results of operations, financial position or liquidity. Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern In August 2014, the FASB issued guidance to address the diversity in practice in determining when there is substantial doubt about an entity's ability to continue as a going concern and when an entity must disclose certain relevant conditions and events. The new guidance requires an entity to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued (or available to be issued). The new guidance allows the entity to consider the mitigating effects of management's plans that will alleviate the substantial doubt and requires certain disclosures when substantial doubt is alleviated as a result of consideration of management's plans. If conditions or events raise substantial doubt that is not alleviated, an entity should disclose that there is substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued (or available to be issued), along with the principal conditions or events that raise substantial doubt, management's evaluation of the significance of those conditions or events in relation to the entity's ability to meet its obligations and management's plans that are intended to mitigate those conditions. The guidance is effective for annual periods ending after December 15, 2016, and interim and annual periods thereafter. The adoption of this guidance is not expected to have a material effect on the Company's results of operations, financial position or liquidity. Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity In November 2014, the FASB issued updated guidance to clarify when the separation of certain embedded derivative features in a hybrid financial instrument that is issued in the form of a share is required. That is, an entity will continue to evaluate whether the economic characteristics and risks of the embedded derivative feature are clearly and closely related to those of the host contract. Specifically, the amendments clarify that an entity should consider all relevant terms and features, including the embedded derivative feature being evaluated for bifurcation, in evaluating the nature of the host contract. Furthermore, the amendments clarify that no single term or feature would necessarily determine the economic characteristics and risks of the host contract. Rather, the nature of the host contract depends upon the economic characteristics and risks of the entire hybrid financial instrument. The updated guidance is effective for reporting periods beginning after December 15, 2015. Early adoption is permitted. The adoption of this guidance did not have a material effect on the Company's results of operations, financial position or liquidity. Troubled Debt Restructurings by Creditors In January 2015, the FASB issued updated guidance for troubled debt restructurings clarifying when an in substance repossession or foreclosure occurs, and when a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan. The new guidance is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2015. This guidance can be elected for prospective adoption or by using a retrospective transition method. The adoption of this guidance did not have a material effect on the Company's results of operations, financial position or liquidity. Amendments to the Consolidation Analysis In February 2015, the FASB issued updated guidance that makes targeted amendments to the current consolidation accounting guidance. The update is in response to accounting complexity concerns, particularly from the asset management industry. The guidance simplifies consolidation accounting by reducing the number of approaches to consolidation, provides a scope exception to registered money market funds and similar unregistered money market funds and ends the indefinite deferral granted to investment companies from applying the variable interest entity guidance. The updated guidance is effective for annual and interim periods beginning after December 15, 2015. The adoption of this guidance did not have a material effect on the Company’s results of operations, financial position or liquidity. Simplifying the Presentation of Debt Issuance Costs In April 2015, the FASB issued updated guidance to clarify the required presentation of debt issuance costs. The amended guidance requires that debt issuance costs be presented in the balance sheet as a direct reduction from the carrying amount of the recognized debt liability, consistent with the treatment of debt discounts. Amortization of debt issuance costs is to be reported as interest expense. The recognition and measurement guidance for debt issuance costs are not affected by the updated guidance. The updated guidance is effective for reporting periods beginning after December 15, 2015. Early adoption is permitted. The adoption of this guidance did not have a material effect on the Company’s results of operations, financial position or liquidity. Simplifying the Accounting for Measurement-Period Adjustments In September 2015, the FASB issued updated guidance regarding business combinations that requires an acquirer to recognize post-close measurement adjustments for provisional amounts in the period the adjustment amounts are determined rather than retrospectively. The acquirer is also required to recognize, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the provisional amount, calculated as if the accounting had been completed at the acquisition date. The updated guidance is to be applied prospectively effective for annual and interim periods beginning after December 15, 2015. In connection with business combinations which have already been completed, the adoption of this guidance did not have a material effect on the Company’s results of operations, financial position or liquidity. Recognition and Measurement of Financial Assets and Financial Liabilities In January 2016, the FASB issued updated guidance regarding financial instruments. This guidance intends to enhance reporting for financial instruments and addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The significant amendments in this update generally require equity investments to be measured at fair value with changes in fair value recognized in net income, require the use of an exit price notion when measuring the fair value of financial instruments for disclosure purposes and clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities. This guidance also intends to enhance the presentation of certain fair value changes for financial liabilities measured at fair value. It also amends certain disclosure requirements associated with the fair value of financial instruments. This guidance is effective for fiscal years beginning after December 15, 2017. The recognition and measurement provisions of this guidance will be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption and early adoption is not permitted. The Company is evaluating this guidance but expects the primary impact will be the recognition of unrealized gains and losses on available-for-sale equity securities in net income. Currently, all unrealized gains and losses on available-for-sale equity securities are recognized in other comprehensive income (loss). The effect of the adoption of this guidance on the Company’s results of operations, financial position and liquidity is primarily dependent on the fair value of the available-for-sale equity securities in future periods and the existence of a deferred tax asset related to available-for-sale securities in future periods that have not yet been fully assessed. Leases In February 2016, the FASB issued updated guidance to require lessees to recognize a right-to-use asset and a lease liability for leases with terms of more than 12 months. The updated guidance retains the two classifications of a lease as either an operating or finance lease (previously referred to as a capital lease). Both lease classifications require the lessee to record the right-to-use asset and the lease liability based upon the present value of cash flows. Finance leases will reflect the financial arrangement by recognizing interest expense on the lease liability separately from the amortization expense of the right-to-use asset. Operating leases will recognize lease expense (with no separate recognition of interest expense) on a straight-line basis over the term of the lease. The accounting by lessors is not significantly changed by the updated guidance. The updated guidance requires expanded qualitative and quantitative disclosures, including additional information about the amounts recorded in the financial statements. The updated guidance is effective for reporting periods beginning after December 15, 2018, and will require that the earliest comparative period presented include the measurement and recognition of existing leases with an adjustment to equity as if the updated guidance had always been applied. Early adoption is permitted. The adoption of this guidance is not expected to have a material effect on the Company’s results of operations, financial position or liquidity. Improvements to Employee Share-Based Payment Accounting In March 2016, the FASB issued updated guidance to simplify several aspects of accounting for share-based payment transactions as follows: Accounting for Income Taxes Under current accounting guidance, if the deduction for a share-based payment award for tax purposes exceeds, or is less than, the compensation cost recognized for financial reporting purposes, the resulting excess tax benefit, or tax deficiency, is reported as part of additional paid-in capital. Under the updated guidance, these excess tax benefits, or tax deficiencies, are reported as part of income tax expense or benefit in the income statement. The updated guidance also removes the requirement to delay recognition of any excess tax benefit when there are no current taxes payable to which the benefit would be applied. The tax-related cash flows resulting from share-based payments are to be included with other income tax cash flows as an operating activity rather than being reported separately as a financing activity. Forfeitures The updated guidance permits an entity to make an accounting policy election to either account for forfeitures when they occur or continue to apply the current method of accruing the compensation cost based on the number of awards that are expected to vest. Minimum Statutory Tax Withholding Requirements The updated guidance changes the threshold amount an entity can withhold for taxes when settling an equity award and still qualify for equity classification. A company can withhold up to the maximum statutory tax rates in the employees’ applicable jurisdiction rather than withholding up to the employers’ minimum statutory withholding requirement. The update also clarifies that all cash payments made to taxing authorities on behalf of employees for withheld shares are to be presented in financing activities on the statement of cash flows. Transition The updated guidance is effective for reporting periods beginning after December 15, 2016. Early adoption is permitted in any interim period; if early adoption is elected, the entity must adopt all of the amendments in the same reporting period and reflect any adjustments as of the beginning of the fiscal year. The Company has not elected early adoption. The adoption of this guidance is not expected to have a material effect on the Company’s results of operations, financial position or liquidity. Simplifying the Transition to the Equity Method of Accounting In March 2016, the FASB issued updated guidance that eliminates the requirement to retroactively apply the equity method of accounting when an investment that was previously accounted for using another method of accounting becomes qualified to apply the equity method due to an increase in the level of ownership interest or degree of influence. If the investment was previously accounted for as an available-for-sale security, any related unrealized gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for the equity method is recognized through earnings. The updated guidance is effective for reporting periods beginning after December 15, 2016, and is to be applied prospectively. Early adoption is permitted. The adoption of this guidance is not expected to have a material effect on the Company’s results of operations, financial position or liquidity. Contingent Put and Call Options in Debt Instruments In March 2016, the FASB issued updated guidance clarifying that when a call (put) option in a debt instrument can accelerate the repayment of principal on the debt instrument, a reporting entity does not need to assess whether the contingent event that triggers the ability to exercise the call (put) option is related to interest rates or credit risk in determining whether the option should be accounted for separately. The updated guidance is effective for reporting periods beginning after December 15, 2016. Early adoption is permitted. The adoption of this guidance is not expected to have a material effect on the Company’s results of operations, financial position or liquidity. Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued updated guidance for the accounting for credit losses for financial instruments. The updated guidance applies a new credit loss model (current expected credit losses or CECL) for determining credit-related impairments for financial instruments measured at amortized cost (e.g. reinsurance recoverables) and requires an entity to estimate the credit losses expected over the life of an exposure or pool of exposures. The estimate of expected credit losses should consider historical information, current information, as well as reasonable and supportable forecasts, including estimates of prepayments. The expected credit losses, and subsequent adjustments to such losses, will be recorded through an allowance account that is deducted from the amortized cost basis of the financial asset, with the net carrying value of the financial asset presented on the consolidated balance sheet at the amount expected to be collected. The updated guidance also amends the current other-than-temporary impairment model for available-for-sale debt securities by requiring the recognition of impairments relating to credit losses through an allowance account and limits the amount of credit loss to the difference between a security’s amortized cost basis and its fair value. In addition, the length of time a security has been in an unrealized loss position will no longer impact the determination of whether a credit loss exists. The updated guidance is effective for reporting periods beginning after December 15, 2019. Early adoption is permitted for reporting periods beginning after December 15, 2018. The Company will not be able to determine the impact that the updated guidance will have on its results of operations, financial position or liquidity until the updated guidance is adopted.

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Note 2 - Investments

6 Months Ended

Jun. 30, 2016

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

Investments

Fixed Maturity and Equity Securities Available-For-Sale

Investments in fixed maturity and equity securities available-for-sale as of June 30, 2016 and December 31, 2015 are summarized as follows:

	Amortized Cost or Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	June 30, 2016 (Unaudited)
Fixed maturity securities
U.S. government and U.S. government agencies	$	3,287,423	$	143,821	$	2,314	$	3,428,930
States and political subdivisions		8,958,695		530,719		-		9,489,414
Residential mortgage-backed securities		36,284		53,016		-		89,300
Corporate bonds		105,456,971		5,084,674		1,397,412		109,144,233
Foreign bonds		16,411,742		713,152		337,905		16,786,989
Total fixed maturity securities		134,151,115		6,525,382		1,737,631		138,938,866
Equity securities
Mutual funds		339,564		-		681		338,883
Corporate preferred stock		149,725		9,059		-		158,784
Corporate common stock		189,149		87,453		-		276,602
Total equity securities		678,438		96,512		681		774,269
Total fixed maturity and equity securities	$	134,829,553	$	6,621,894	$	1,738,312	$	139,713,135

	December 31, 2015
Fixed maturity securities
U.S. government and U.S. government agencies	$	2,793,161	$	136,190	$	108,597	$	2,820,754
States and political subdivisions		8,993,848		61,592		102,835		8,952,605
Residential mortgage-backed securities		49,980		43,846		-		93,826
Corporate bonds		109,164,942		1,820,894		4,234,897		106,750,939
Foreign bonds		17,026,524		185,225		1,273,846		15,937,903
Total fixed maturity securities		138,028,455		2,247,747		5,720,175		134,556,027
Equity securities
Mutual funds		335,554		-		10,613		324,941
Corporate preferred stock		259,993		6,035		990		265,038
Corporate common stock		194,668		117,196		9,043		302,821
Total equity securities		790,215		123,231		20,646		892,800
Total fixed maturity and equity securities	$	138,818,670	$	2,370,978	$	5,740,821	$	135,448,827

	Fair Value		Unrealized Loss		Number of Securities
	June 30, 2016 (Unaudited)
Fixed maturity securities
Less than 12 months
U.S. government and U.S. government agencies	$	347,687	$	2,314		1
Corporate bonds		3,994,028		101,673		18
Foreign bonds		1,749,956		105,859		9
Total less than 12 months		6,091,671		209,846		28
More than 12 months
Corporate bonds		12,505,112		1,295,739		55
Foreign bonds		1,167,258		232,046		6
Total more than 12 months		13,672,370		1,527,785		61
Total fixed maturity securities		19,764,041		1,737,631		89
Equity securities
Less than 12 months
Mutual funds		87,825		681		1
Total equity securities		87,825		681		1
Total fixed maturity and equity securities	$	19,851,866	$	1,738,312		90

	December 31, 2015
Fixed maturity securities
Less than 12 months
U.S. government and U.S. government agencies	$	381,592	$	20,006	2
States and political subdivisions		5,422,934		102,835	26
Corporate bonds		46,907,532		2,646,997	186
Foreign bonds		9,155,830		879,659	40
Total less than 12 months		61,867,888		3,649,497	254
More than 12 months
U.S. government and U.S. government agencies		1,041,409		88,591	2
Corporate bonds		5,646,642		1,587,900	31
Foreign bonds		489,008		394,187	3
Total more than 12 months		7,177,059		2,070,678	36
Total fixed maturity securities		69,044,947		5,720,175	290
Equity securities
Less than 12 months
Mutual funds		74,547		10,613	1
Corporate preferred stock		109,279		990	1
Corporate common stock		41,804		9,043	1
Total equity securities		225,630		20,646	3
Total fixed maturity and equity securities	$	69,270,577	$	5,740,821	293

Fixed maturity securities were 93% and 94% investment grade as rated by Standard & Poor’s as of June 30, 2016 and December 31, 2015, respectively.

There were no impairments during the six months ended June 30, 2016.

The Company experienced no additional other-than-temporary impairments during 2015.

First Trinity Financial Corporation and Subsidiaries

Notes to Consolidated Financial Statements

June 30, 2016

(Unaudited)

	(Unaudited)
	June 30, 2016			December 31, 2015
Unrealized appreciation (depreciation) on available-for-sale securities	$	4,883,582		$	(3,369,843	)
Adjustment to deferred acquisition costs		(77,140	)		50,073
Deferred income taxes		(961,287	)		663,953
Net unrealized appreciation (depreciation) on available-for-sale securities	$	3,845,155		$	(2,655,817	)

The amortized cost and fair value of fixed maturity available-for-sale securities and other long-term investments as of June 30, 2016, by contractual maturity, are summarized as follows:

	June 30, 2016 (Unaudited)
	Fixed Maturity Available-For-Sale Securities				Other Long-Term Investments
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	6,996,581	$	7,097,315	$	4,301,079	$	4,365,290
Due in one year through five years		33,406,995		34,668,060		13,320,129		14,602,101
Due after five years through ten years		48,357,584		49,392,939		10,961,293		13,634,874
Due after ten years		45,353,671		47,691,252		9,314,290		15,624,273
Due at multiple maturity dates		36,284		89,300		-		-
	$	134,151,115	$	138,938,866	$	37,896,791	$	48,226,538

Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Three Months Ended June 30, (Unaudited)
	Fixed Maturity Securities						Equity Securities				Mortgage Loans on Real Estate				Investment Real Estate
	2016			2015			2016		2015		2016		2015		2016		2015
Proceeds	$	5,219,798		$	1,399,932		$	19,210	$	7,529	$	2,089,278	$	2,573,436	$	-	$	-
Gross realized gains		155,956			62,791			8,711		-		14,416		19,758		-		-
Gross realized losses		(12,990	)		(462	)		-		-		-		-		-		-
Loss on other-than- temporary impairment		-			(304,256	)		-		-		-		-		-		-

	Six Months Ended June 30, (Unaudited)
	Fixed Maturity Securities						Equity Securities						Mortgage Loans on Real Estate				Investment Real Estate
	2016			2015			2016			2015			2016		2015		2016		2015
Proceeds	$	7,494,211		$	2,588,161		$	128,010		$	533,813		$	3,661,522	$	4,124,035	$	-	$	7,083,246
Gross realized gains		163,050			88,632			8,711			996			17,991		30,809		-		390,202
Gross realized losses		(41,342	)		(1,654	)		(1,468	)		(2,896	)		-		-		-		-
Loss on other-than- temporary impairment		-			(304,256	)		-			-			-		-		-		-

	Three Months Ended June 30, (Unaudited)						Six Months Ended June 30, (Unaudited)
	2016			2015			2016			2015
Change in unrealized investment gains:
Available-for-sale securities:
Fixed maturity securities	$	4,452,781		$	(2,723,522	)	$	8,260,179		$	(1,655,536	)
Equity securities		(1,604	)		(32,114	)		(6,754	)		(37,129	)
Net realized investment gains (losses):
Available-for-sale securities:
Fixed maturity securities		142,966			(241,927	)		121,708			(217,278	)
Equity securities		8,711			-			7,243			(1,900	)
Mortgage loans on real estate		14,416			19,758			17,991			30,809
Investment real estate		-			-			-			390,202

Major categories of net investment income for the three and six months ended June 30, 2016 and 2015 are summarized as follows:

	Three Months Ended June 30, (Unaudited)						Six Months Ended June 30, (Unaudited)
	2016			2015			2016			2015
Fixed maturity securities	$	1,533,301		$	1,245,734		$	3,100,519		$	2,419,515
Equity securities		6,658			8,725			13,840			20,254
Other long-term investments		622,502			424,587			1,170,324			838,829
Mortgage loans		1,328,427			980,728			2,681,498			1,936,872
Policy loans		26,491			25,165			52,589			50,306
Real estate		91,968			71,822			183,936			259,410
Short-term and other investments		69,874			65,434			142,144			113,626
Gross investment income		3,679,221			2,822,195			7,344,850			5,638,812
Investment expenses		(420,587	)		(317,433	)		(726,013	)		(726,490	)
Net investment income	$	3,258,634		$	2,504,762		$	6,618,837		$	4,912,322

As of June 30, 2016 and December 31, 2015, these required deposits had fair values that totaled $4,167,034 and $4,034,042, respectively.

The Company’s mortgage loans by property type as of June 30, 2016 and December 31, 2015 are summarized as follows:

	(Unaudited)
	June 30, 2016					December 31, 2015
	Amount		Percentage			Amount		Percentage
Commercial mortgage loans
Retail stores	$	1,113,771		1.72	%	$	1,272,881		2.17	%
Office buildings		186,238		0.29	%		191,774		0.32	%
Total commercial mortgage loans		1,300,009		2.01	%		1,464,655		2.49	%
Residential mortgage loans		63,224,782		97.99	%		57,310,263		97.51	%
Total mortgage loans	$	64,524,791		100.00	%	$	58,774,918		100.00	%

The Company’s investment real estate as of June 30, 2016 and December 31, 2015 is summarized as follows:

	(Unaudited)
	June 30, 2016			December 31, 2015
Land - held for the production of income	$	213,160		$	213,160
Land - held for sale		750,047			750,047
Total land		963,207			963,207
Building - held for the production of income		2,267,557			2,267,557
Less - accumulated depreciation		(976,950	)		(904,206	)
Buildings net of accumulated depreciation		1,290,607			1,363,351
Residential real estate - held for sale		198,622			-
Total residential real estate		198,622			-
Investment real estate, net of accumulated depreciation	$	2,452,436		$	2,326,558

including assignment of the tenant leases). In connection with the repayments of the two notes payable, the Company expensed the loan origination fees remaining as of March 11, 2015 of $72,744. During the period from January 1, 2015 to March 11, 2015, the Company incurred interest expense of $35,181 on the two notes payable and amortized $7,423 of loan origination fees.

The entire disclosure for investments in certain debt and equity securities.

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Note 3 - Fair Value Measurements

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Text Block]

Fair Value Measurements

Level 1

- Quoted prices in active markets for identical assets or liabilities. The Company’s Level 1 assets include equity securities that are traded in an active exchange market.

Level 2

- Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. The Company’s Level 2 assets and liabilities include fixed maturity securities with quoted prices that are traded less frequently than exchange-traded instruments or assets and liabilities whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. This category generally includes U.S. Government and agency mortgage-backed debt securities and corporate debt securities.

Level 3

- Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company’s Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category generally includes certain private equity investments where independent pricing information was not able to be obtained for a significant portion of the underlying assets.

First Trinity Financial Corporation and Subsidiaries

Notes to Consolidated Financial Statements

June 30, 2016

(Unaudited)

Fair Value Measurements

(continued)

The Company’s fair value hierarchy for those financial instruments measured at fair value on a recurring basis as of June 30, 2016 and December 31, 2015 is summarized as follows:

	Level 1		Level 2		Level 3		Total
	June 30, 2016 (Unaudited)
Fixed maturity securities, available-for-sale
U.S. government and U.S. government agencies	$	-	$	3,428,930	$	-	$	3,428,930
States and political subdivisions		-		9,489,414		-		9,489,414
Residential mortgage-backed securities		-		89,300		-		89,300
Corporate bonds		-		109,144,233		-		109,144,233
Foreign bonds		-		16,786,989		-		16,786,989
Total fixed maturity securities	$	-	$	138,938,866	$	-	$	138,938,866

Equity securities, available-for-sale
Mutual funds	$	-	$	338,883	$	-	$	338,883
Corporate preferred stock		105,440		53,344		-		158,784
Corporate common stock		230,102		-		46,500		276,602
Total equity securities	$	335,542	$	392,227	$	46,500	$	774,269

	December 31, 2015
Fixed maturity securities, available-for-sale
U.S. government and U.S. government agencies	$	-	$	2,820,754	$	-	$	2,820,754
States and political subdivisions		-		8,952,605		-		8,952,605
Residential mortgage-backed securities		-		93,826		-		93,826
Corporate bonds		-		106,750,939		-		106,750,939
Foreign bonds		-		15,937,903		-		15,937,903
Total fixed maturity securities	$	-	$	134,556,027	$	-	$	134,556,027

Equity securities, available-for-sale
Mutual funds	$	-	$	324,941	$	-	$	324,941
Corporate preferred stock		211,278		53,760		-		265,038
Corporate common stock		256,321		-		46,500		302,821
Total equity securities	$	467,599	$	378,701	$	46,500	$	892,800

As of both June 30, 2016 and December 31, 2015, Level 3 financial instruments consisted of two private placement common stocks that have no active trading.

First Trinity Financial Corporation and Subsidiaries

Notes to Consolidated Financial Statements

June 30, 2016

(Unaudited)

The Company’s fixed maturity and equity securities available-for-sale portfolio is highly liquid and allows for a high percentage of the portfolio to be priced through pricing services.

First Trinity Financial Corporation and Subsidiaries

Notes to Consolidated Financial Statements

June 30, 2016

(Unaudited)

Fair

Value Measurements

(continued)

Financial Instruments Disclosed, But Not Carried, at Fair Value:

	June 30, 2016 (Unaudited)
	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Financial assets
Mortgage loans on real estate
Commercial	$	1,300,009	$	1,317,503	$	-	$	-	$	1,317,503
Residential		63,224,782		63,327,961		-		-		63,327,961
Policy loans		1,522,192		1,522,192		-		-		1,522,192
Short-term investments		50,033		50,033		50,033		-		-
Other long-term investments		37,896,791		48,226,538		-		-		48,226,538
Cash and cash equivalents		10,806,505		10,806,505		10,806,505		-		-
Accrued investment income		2,181,988		2,181,988		-		-		2,181,988
Loans from premium financing		68,223		68,223		-		-		68,223
Total financial assets	$	117,050,523	$	127,276,975	$	10,856,538	$	-	$	116,420,437
Financial liabilities
Policyholders' account balances	$	207,963,636	$	196,912,001	$	-	$	-	$	196,912,001
Policy claims		859,740		859,740		-		-		859,740
Total financial liabilities	$	208,823,376	$	197,771,741	$	-	$	-	$	197,771,741

	December 31, 2015
	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Financial assets
Mortgage loans on real estate
Commercial	$	1,464,655	$	1,486,601	$	-	$	-	$	1,486,601
Residential		57,310,263		57,356,546		-		-		57,356,546
Policy loans		1,486,317		1,486,317		-		-		1,486,317
Short-term investments		599,855		599,855		599,855		-		-
Other long-term investments		31,566,927		37,755,989		-		-		37,755,989
Cash and cash equivalents		9,047,586		9,047,586		9,047,586		-		-
Accrued investment income		2,205,469		2,205,469		-		-		2,205,469
Loans from premium financing		123,824		123,824		-		-		123,824
Total financial assets	$	103,804,896	$	110,062,187	$	9,647,441	$	-	$	100,414,746
Financial liabilities
Policyholders' account balances	$	197,688,616	$	179,233,152	$	-	$	-	$	179,233,152
Policy claims		714,928		714,928		-		-		714,928
Total financial liabilities	$	198,403,544	$	179,948,080	$	-	$	-	$	179,948,080

The following methods and assumptions were used in estimating the fair value disclosures for financial instruments in the accompanying financial statements and notes thereto:

Fixed Maturity Securities and Equity Securities

The fair value of fixed maturity securities and equity securities are based on the principles previously discussed as Level 1, Level 2 and Level 3.

Mortgage Loans on Real Estate

Cash and Cash Equivalents, Short-Term Investments, Accrued Investment Income,

Policy Loans and Loans from Premium Financing

Other Long-Term Investments

Investment Contracts – Policyholders’ Account Balances

The fair values for insurance contracts other than investment-type contracts are not required to be disclosed.

Policy Claims

The carrying amounts reported for these liabilities approximate their fair value.

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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Note 4 - Segment Data

6 Months Ended

Jun. 30, 2016

Segment Reporting Disclosure [Text Block]

Segment Data

. These segments as of June 30, 2016 and December 31, 2015 and

for the three and six months ended June 30, 2016 and 2015 are summarized as follows:

	Three Months Ended June 30, (Unaudited)					Six Months Ended June 30, (Unaudited)
	2016		2015			2016		2015
Revenues:
Life insurance operations	$	3,602,546	$	2,828,290		$	7,347,790	$	5,691,976
Annuity operations		2,718,287		2,221,647			5,355,711		4,405,722
Corporate operations		148,820		119,133			307,059		228,059
Total	$	6,469,653	$	5,169,070		$	13,010,560	$	10,325,757
Income (loss) before income taxes:
Life insurance operations	$	22,562	$	(99,996	)	$	52,515	$	2,190
Annuity operations		350,169		353,586			578,425		469,091
Corporate operations		29,856		43,373			119,853		205,021
Total	$	402,587	$	296,963		$	750,793	$	676,302
Depreciation and amortization expense:
Life insurance operations	$	324,040	$	472,131		$	998,587	$	817,745
Annuity operations		182,591		150,809			338,503		345,511
Corporate operations		-		12,563			-		25,289
Total	$	506,631	$	635,503		$	1,337,090	$	1,188,545

	(Unaudited) June 30, 2016		December 31, 2015
Assets:
Life insurance operations	$	48,902,428	$	44,151,860
Annuity operations		237,429,746		218,172,909
Corporate operations		6,851,689		6,805,073
Total	$	293,183,863	$	269,129,842

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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Note 5 - Federal Income Taxes	6 Months Ended
Note 5 - Federal Income Taxes	Jun. 30, 2016
Notes to Financial Statements
Income Tax Disclosure [Text Block]	5. Federal Income Taxes The provision for federal income taxes is based on the asset and liability method of accounting for income taxes. Deferred income taxes are provided for the cumulative temporary differences between balances of assets and liabilities determined under GAAP and the balances using tax bases. A valuation allowance has been established due to the uncertainty of certain loss carryforwards. The Company has no known uncertain tax benefits within its provision for income taxes. In addition, the Company does not believe it would be subject to any penalties or interest relative to any open tax years and, therefore, has not accrued any such amounts. The Company files U.S. federal income tax returns and income tax returns in various state jurisdictions. The 2012 through 2015 U.S. federal tax years are subject to income tax examination by tax authorities. The Company classifies any interest and penalties (if applicable) as income tax expense in the financial statements.

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Note 6 - Legal Matters and Contingent Liabilities	6 Months Ended
Note 6 - Legal Matters and Contingent Liabilities	Jun. 30, 2016
Notes to Financial Statements
Contingencies Disclosure [Text Block]	6 . Legal Matters and Contingent Liabilities The Company and Chairman, President and Chief Executive Officer, Gregg E. Zahn, filed an action in the District Court of Tulsa County, Oklahoma in 2013, Case No. CJ-2013-03385, against former Company Board of Directors member, Wayne Pettigrew and Mr. Pettigrew’s company, Group & Pension Planners, Inc. (the “Defendants”). The petition filed in the case alleges that Mr. Pettigrew, during and after the time he was a member of the Company’s Board of Directors, made defamatory statements regarding the Company and Mr. Zahn and committed breaches of his fiduciary duties to the Company. The defendants are alleged to have made defamatory statements to certain shareholders of the Company, to the press and to the Oklahoma Insurance Department and the Oklahoma Department of Securities. Mr. Pettigrew has denied the allegations. The Board of Directors, represented by independent counsel, concluded that there was no action to be taken against Mr. Zahn and that the allegations by Mr. Pettigrew were without substance. The Company has been informed by the Oklahoma Insurance Department that it would take no action and also informed that the Oklahoma Department of Securities, after its investigation of the allegations, concluded that no proceedings were needed with respect to the alleged matters. It is the Company’s intention to vigorously prosecute this action against the Defendants for damages and for the correction of the defamatory statements. In the opinion of the Company’s management, the ultimate resolution of any contingencies that may arise from this litigation is not considered material in relation to the financial position or results of operations of the Company. Prior to its acquisition by TLIC, FBLIC developed, marketed, and sold life insurance products known as “Decreasing Term to 95” policies. On January 17, 2013, FBLIC’s Board of Directors voted that, effective March 1, 2013, it was not approving, and therefore was not providing, a dividend for the Decreasing Term to 95 policies. On November 22, 2013, three individuals who owned Decreasing Term to 95 policies filed a Petition in the Circuit Court of Greene County, Missouri asserting claims against FBLIC relating to FBLIC’s decision to not provide a dividend under the Decreasing Term to 95 policies. On June 18, 2015, plaintiffs filed an amended petition. Like the original Petition, the amended Petition asserts claims for breach of contract and anticipatory breach of contract, and alleges that FBLIC breached, and will anticipatorily breach, the Decreasing Term to 95 policies of insurance by not providing a dividend sufficient to purchase a one year term life insurance policy which would keep the death benefit under the Decreasing Term to 95 policies the same as that provided during the first year of coverage under the policy. It also asserts claims for negligent misrepresentation, fraud, and violation of the Missouri Merchandising Practices Act (“MMPA”). It alleges that during its sale of the Decreasing Term to 95 policies, FBLIC represented that the owners of these policies would always be entitled to dividends to purchase a one-year term life insurance policy and that the owners would have a level death benefit without an increase in premium. The main difference between the original Petition and the amended Petition is that the amended Petition also seeks equitable relief based on two new theories: that the Decreasing Term to 95 policies should be reformed so that they will provide a level death benefit for a level premium payment until the policyholder reaches 95 years of age; and alternatively, Count VIII of the amended Petition asks the Court to (1) find that the dividend provisions in the Decreasing Term to 95 policies violate Missouri law, specifically, § 376.360 RSMo.; (2) order that the policies are void ab initio; and (3) order that FBLIC return all premiums collected under these policies. In addition, as part of the MMPA claim, plaintiffs are now alleging that FBLIC undertook a fraudulent scheme to sell the Decreasing Term to 95 policies as a level premium for level benefit even though FBLIC never intended to pay dividends for the life of the policies and that part of this alleged fraudulent scheme included having a dividend option which is not allowed under Missouri law. FBLIC denies the allegations in the amended Petition and will continue to defend against them. On February 1, 2016, the plaintiffs asked that the Court certify the case as a class action. With their motion, Plaintiffs filed an affidavit from an actuary stating the opinion that FBLIC has collected at least $2,548,939 in premiums on the Decreasing Term to 95 policies. This presumably is the amount that Plaintiffs will seek to be refunded to policyholders if the policies are declared void. FBLIC opposed the request for class certification. On July 21, 2016, the Court certified three classes to maintain the claims for breach of contract, anticipatory breach of contract, violation of the MMPA, reformation, and to void the Decreasing Term to 95 policies. On August 1, 2016, FBLIC filed a Petition for Leave to Appeal with the Missouri Court of Appeals, Southern District asking for permission to appeal the Court’s class certification. The Petition for Leave to Appeal was denied. FBLIC intends to defend vigorously against the class and individual allegations. The Company is unable to determine the potential magnitude of the claims in the event of a final certification and the plaintiffs prevailing on this substantive action. On May 13, 2015, FBLIC filed a Counterclaim against Doyle Nimmo seeking indemnity and seeking damages for breach of fiduciary duty in the event FBLIC is liable under Plaintiffs’ underlying claims. In addition, on April 29, 2015, TLIC filed a lawsuit against Doyle Nimmo and Michael Teel alleging that they were liable for violations of federal and state securities laws for failing to disclose information relating to the Decreasing Term to 95 policies. This lawsuit is currently pending in the District Court for the Western District of Missouri (hereinafter the “Federal Lawsuit”). No claims have been made against TLIC in the Federal Lawsuit. The Federal Lawsuit has been stayed pending resolution of the lawsuit against FBLIC in the Circuit Court of Greene County, Missouri. On September 28, 2015, Doyle Nimmo filed a Third-Party Petition for Declaratory Judgment (and Other Relief) against FBLIC. In this Third-Party Petition, Doyle Nimmo, a former director for FBLIC, seeks a declaratory judgment that the corporate by-laws of FBLIC require FBLIC to indemnify him for attorney’s fees, judgments, costs, fines, and amounts paid in defense of both the Counterclaim and the Federal Lawsuit and seeks a monetary judgment for the amounts expended by Doyle Nimmo in such defense. Prior to Doyle Nimmo’s filing of the Third-Party Petition, FBLIC’s Board of Directors executed a Unanimous Written Consent in Lieu of a Special Meeting in which it denied Doyle Nimmo’s tender of defense and request for indemnification finding Mr. Nimmo did not meet the applicable standard of conduct for indemnification under Missouri law. FBLIC intends to vigorously defend the Third-Party Petition on these grounds. The Company is unable to determine the potential magnitude of the claims in the event Doyle Nimmo prevails on his Third-Party Petition. As stated above, FBLIC filed a Counterclaim and TLIC filed the Federal Lawsuit against Doyle Nimmo. Doyle Nimmo submitted a claim and tendered the defense of these claims to Utica Mutual Insurance Company under a policy providing Insurance Agents and Brokers Errors and Omissions Liability coverage. On November 4, 2015, Utica Mutual Insurance Company filed a lawsuit against Doyle Nimmo and other interested parties, including FBLIC and TLIC. The lawsuit is pending in the District Court for the Western District of Missouri and asks the Court to determine whether the Errors and Omissions policy provides coverage for the lawsuits filed against Doyle Nimmo. Utica Mutual Insurance Company does not seek a monetary judgment against FBLIC or TLIC. In most states, guaranty fund assessments may be taken as a credit against premium taxes, typically over a five-year period. These assessments, brought about by the insolvency of life and health insurers, are levied at the discretion of the various state guaranty fund associations to cover association obligations.

The entire disclosure for loss and gain contingencies. Describes any existing condition, situation, or set of circumstances involving uncertainty as of the balance sheet date (or prior to issuance of the financial statements) as to a probable or reasonably possible loss incurred by an entity that will ultimately be resolved when one or more future events occur or fail to occur, and typically discloses the amount of loss recorded or a range of possible loss, or an assertion that no reasonable estimate can be made.

+ References

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+ Details

XML 26 R15.htm IDEA: XBRL DOCUMENT

Note 7 - Other Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss)

6 Months Ended

Jun. 30, 2016

Comprehensive Income (Loss) Note [Text Block]

Other Comprehensive Income

(Loss)

and Accumulated Other Comprehensive Income (Loss)

The changes in the components of the Company’s accumulated other comprehensive income (loss) for the three and six months ended June 30, 2016 and 2015 are summarized as follows:

	Three Months Ended June 30, 2016 and 2015 (Unaudited)
	Unrealized						Accumulated
	Appreciation on			Adjustment to			Other
	Available-For-Sale			Deferred Acquisition			Comprehensive
	Securities			Costs			Income
Balance as of April 1, 2016	$	345,923		$	(8,045	)	$	337,878
Other comprehensive income before reclassifications, net of tax		3,682,284			(53,666	)		3,628,618
Less amounts reclassified from accumulated other comprehensive income, net of tax		121,341			-			121,341
Other comprehensive income		3,560,943			(53,666	)		3,507,277
Balance as of June 30, 2016	$	3,906,866		$	(61,711	)	$	3,845,155

Balance as of April 1, 2015	$	3,563,071		$	(43,141	)	$	3,519,930
Other comprehensive loss before reclassifications, net of tax		(2,398,050	)		28,397			(2,369,653	)
Less amounts reclassified from accumulated other comprehensive income, net of tax		(193,541	)		-			(193,541	)
Other comprehensive loss		(2,204,509	)		28,397			(2,176,112	)
Balance as of June 30, 2015	$	1,358,562		$	(14,744	)	$	1,343,818


	Six Months Ended June 30, 2016 and 2015 (Unaudited)
	Unrealized
	Appreciation						Accumulated
	(Depreciation) on			Adjustment to			Other
	Available-For-Sale			Deferred Acquisition			Comprehensive
	Securities			Costs			Income (Loss)
Balance as of January 1, 2016	$	(2,695,876	)	$	40,059		$	(2,655,817	)
Other comprehensive income before reclassifications, net of tax		6,705,902			(101,770	)		6,604,132
Less amounts reclassified from accumulated other comprehensive loss, net of tax		103,160			-			103,160
Other comprehensive income		6,602,742			(101,770	)		6,500,972
Balance as of June 30, 2016	$	3,906,866		$	(61,711	)	$	3,845,155

Balance as of January 1, 2015	$	2,712,694		$	(29,151	)	$	2,683,543
Other comprehensive loss before reclassifications, net of tax		(1,529,474	)		14,407			(1,515,067	)
Less amounts reclassified from accumulated other comprehensive income, net of tax		(175,342	)		-			(175,342	)
Other comprehensive loss		(1,354,132	)		14,407			(1,339,725	)
Balance as of June 30, 2015	$	1,358,562		$	(14,744	)	$	1,343,818

	Three Months Ended June 30, 2016 (Unaudited)

				Income Tax
	Pretax			Expense			Net of Tax
Other comprehensive income:
Change in net unrealized gains on available-for-sale securities:
Unrealized holding gains arising during the period	$	4,602,854		$	920,570		$	3,682,284
Reclassification adjustment for net gains included in operations		151,677			30,336			121,341
Net unrealized gains on investments		4,451,177			890,234			3,560,943
Adjustment to deferred acquisition costs		(67,083	)		(13,417	)		(53,666	)
Total other comprehensive income	$	4,384,094		$	876,817		$	3,507,277

	Three Months Ended June 30, 2015 (Unaudited)
				Income Tax
				Expense
	Pretax			(Benefit)			Net of Tax
Other comprehensive loss:
Change in net unrealized gains on available-for-sale securities:
Unrealized holding losses arising during the period	$	(2,997,563	)	$	(599,513	)	$	(2,398,050	)
Reclassification adjustment for net losses included in operations		(241,927	)		(48,386	)		(193,541	)
Net unrealized losses on investments		(2,755,636	)		(551,127	)		(2,204,509	)
Adjustment to deferred acquisition costs		35,497			7,100			28,397
Total other comprehensive loss	$	(2,720,139	)	$	(544,027	)	$	(2,176,112	)

	Six Months Ended June 30, 2016 (Unaudited)

				Income Tax
	Pretax			Expense			Net of Tax
Other comprehensive income:
Change in net unrealized gains on available-for-sale securities:
Unrealized holding gains arising during the period	$	8,382,376		$	1,676,474		$	6,705,902
Reclassification adjustment for net gains included in operations		128,951			25,791			103,160
Net unrealized gains on investments		8,253,425			1,650,683			6,602,742
Adjustment to deferred acquisition costs		(127,213	)		(25,443	)		(101,770	)
Total other comprehensive income	$	8,126,212		$	1,625,240		$	6,500,972

	Six Months Ended June 30, 2015 (Unaudited)
				Income Tax
				Expense
	Pretax			(Benefit)			Net of Tax
Other comprehensive loss:
Change in net unrealized gains on available-for-sale securities:
Unrealized holding losses arising during the period	$	(1,911,843	)	$	(382,369	)	$	(1,529,474	)
Reclassification adjustment for net losses included in operations		(219,178	)		(43,836	)		(175,342	)
Net unrealized losses on investments		(1,692,665	)		(338,533	)		(1,354,132	)
Adjustment to deferred acquisition costs		18,008			3,601			14,407
Total other comprehensive loss	$	(1,674,657	)	$	(334,932	)	$	(1,339,725	)

Realized gains and losses on the sales of investments are determined based upon the specific identification method and include provisions for other-than-temporary impairments where appropriate.

	Three Months Ended June 30, (Unaudited)					Six Months Ended June 30, (Unaudited)
Reclassification Adjustments	2016		2015			2016		2015
Unrealized gains on available-for-sale securities:
Realized gains (losses) on sales of securities (a)	$	151,677	$	(241,927	)	$	128,951	$	(219,178	)
Income tax expense (benefit) (b)		30,336		(48,386	)		25,791		(43,836	)
Total reclassification adjustments	$	121,341	$	(193,541	)	$	103,160	$	(175,342	)

(a) These items appear within net realized investment gains and loss on other-than-temporary impairment in the consolidated statements of operations.

(b) These items appear within federal income taxes in the consolidated statements of operations.

The entire disclosure for comprehensive income, which includes, but is not limited to, 1) the amount of income tax expense or benefit allocated to each component of other comprehensive income, including reclassification adjustments, 2) the reclassification adjustments for each classification of other comprehensive income and 3) the ending accumulated balances for each component of comprehensive income.

+ References

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-Name Accounting Standards Codification
-Glossary Reclassification Adjustments
-URI http://asc.fasb.org/extlink&oid=6522872

+ Details

XML 27 R16.htm IDEA: XBRL DOCUMENT

Note 8 - Allowance for Loan Losses from Mortgage Loans on Real Estate and Loans from Premium Financing

6 Months Ended

Jun. 30, 2016

Premiums Receivable Note [Text Block]

. Allowance for Loan Losses from Mortgage Loans on Real Estate and Loans from Premium Financing

losses of $279,662 and $197,172 as of June 30, 2016 and December 31, 2015, respectively. The Company has made no premium financing loans since June 30, 2012. FTCC currently has no operations other than minor premium refunds, collections of past due accounts and accounts involved in litigation.

	(Unaudited)
	As of and for the Three Months Ended June 30,
	Residential Mortgage Loans				Commercial Mortgage Loans						Premium Finance Loans					Total
	2016		2015		2016			2015			2016		2015			2016		2015
Allowance, beginning	$	182,472	$	141,395	$	7,245		$	9,674		$	192,690	$	197,358		$	382,407	$	348,427
Charge offs		-		-		-			-			-		-			-		-
Recoveries		-		-		-			-			-		-			-		-
Provision		8,860		14,859		(713	)		(1,470	)		86,972		(187	)		95,119		13,202
Allowance, ending	$	191,332	$	156,254	$	6,532		$	8,204		$	279,662	$	197,171		$	477,526	$	361,629
Allowance, ending:
Individually evaluated for impairment	$	-	$	-	$	-		$	-		$	279,662	$	192,689		$	279,662	$	192,689
Collectively evaluated for impairment	$	191,332	$	156,254	$	6,532		$	8,204		$	-	$	4,482		$	197,864	$	168,940
Carrying Values:
Individually evaluated for impairment	$	-	$	-	$	-		$	-		$	347,885	$	316,514		$	347,885	$	316,514
Collectively evaluated for impairment	$	38,594,991	$	31,398,186	$	1,300,009		$	1,632,604		$	-	$	4,482		$	39,895,000	$	33,035,272

	(Unaudited)
	As of and for the Six Months Ended June 30,
	Residential Mortgage Loans				Commercial Mortgage Loans						Premium Finance Loans					Total
	2016		2015		2016			2015			2016		2015			2016		2015
Allowance, beginning	$	175,988	$	116,604	$	7,360		$	9,862		$	197,172	$	197,358		$	380,520	$	323,824
Charge offs		-		-		-			-			-		-			-		-
Recoveries		-		-		-			-			-		-			-		-
Provision		15,344		39,650		(828	)		(1,658	)		82,490		(187	)		97,006		37,805
Allowance, ending	$	191,332	$	156,254	$	6,532		$	8,204		$	279,662	$	197,171		$	477,526	$	361,629
Allowance, ending:
Individually evaluated for impairment	$	-	$	-	$	-		$	-		$	279,662	$	192,689		$	279,662	$	192,689
Collectively evaluated for impairment	$	191,332	$	156,254	$	6,532		$	8,204		$	-	$	4,482		$	197,864	$	168,940
Carrying Values:
Individually evaluated for impairment	$	-	$	-	$	-		$	-		$	347,885	$	316,514		$	347,885	$	316,514
Collectively evaluated for impairment	$	38,594,991	$	31,398,186	$	1,300,009		$	1,632,604		$	-	$	4,482		$	39,895,000	$	33,035,272

			Residential Mortgage Loans				Commercial Mortgage Loans				Total Mortgage Loans
			(Unaudited)				(Unaudited)				(Unaudited)
Loan to Value Ratio			June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015
Over 70%	to	80%	$	15,414,911	$	15,058,997	$	-	$	-	$	15,414,911	$	15,058,997
Over 60%	to	70%		24,408,263		21,749,312		-		439,250		24,408,263		22,188,562
Over 50%	to	60%		11,401,933		9,700,752		1,075,411		658,693		12,477,344		10,359,445
Over 40%	to	50%		9,198,911		8,553,256		-		-		9,198,911		8,553,256
Over 30%	to	40%		1,810,765		1,430,835		224,598		366,712		2,035,363		1,797,547
Over 20%	to	30%		308,850		159,930		-		-		308,850		159,930
Over 10%	to	20%		665,513		650,688		-		-		665,513		650,688
	10% or less			15,636		6,493		-		-		15,636		6,493
	Total		$	63,224,782	$	57,310,263	$	1,300,009	$	1,464,655	$	64,524,791	$	58,774,918

XML 28 R17.htm IDEA: XBRL DOCUMENT

Significant Accounting Policies (Policies)	6 Months Ended
Significant Accounting Policies (Policies)	Jun. 30, 2016
Accounting Policies [Abstract]
Stockholders' Equity, Policy [Policy Text Block]	Company Capitalization The Company raised $1,450,000 from two private placement stock offerings during 2004 and $25,669,480 from two public stock offerings and one private placement stock offering from June 22, 2005 through February 23, 2007; June 29, 2010 through April 30, 2012; and August 15, 2012 through March 8, 2013. The Company issued 7,347,488 shares of its common stock and incurred $3,624,518 of offering costs during these private placements and public stock offerings. The Company also issued 702,685 shares of its common stock in connection with two stock dividends paid to shareholders in 2011 and 2012 that resulted in accumulated earnings being charged $5,270,138 with an offsetting credit of $5,270,138 to common stock and additional paid-in capital. The Company has also purchased 247,580 shares of treasury stock at a cost of $893,947 from former members of the Board of Directors including the former Chairman of the Board of Directors, a former agent, the former spouse of the Company’s Chairman, Chief Executive Officer and President and a charitable organization where a former member of the Board of Directors had donated shares of the Company’s common stock.
Business Combinations Policy [Policy Text Block]	Acquisition of Other Companies On December 23, 2008, FTFC acquired 100% of the outstanding common stock of First Life America Corporation (“FLAC”) from an unaffiliated company. The acquisition of FLAC was accounted for as a purchase. The aggregate purchase price for FLAC was approximately $2,695,000 (including direct cost associated with the acquisition of approximately $195,000). The acquisition of FLAC was financed with the working capital of FTFC. On December 31, 2008, FTFC made FLAC a 15 year loan in the form of a surplus note in the amount of $250,000 with an interest rate of 6% payable monthly, that was approved by the Oklahoma Insurance Department (“OID”). This surplus note is eliminated in consolidation. On August 31, 2009, two of the Company’s subsidiaries, Trinity Life Insurance Company (“Old TLIC”) and FLAC, were merged, with FLAC being the surviving company. Immediately following the merger, FLAC changed its name to TLIC. On December 28, 2011, TLIC acquired 100% of the outstanding common stock of FBLIC from FBLIC’s shareholders. The acquisition of FBLIC was accounted for as a purchase. The aggregate purchase price for the acquisition of FBLIC was $13,855,129. The acquisition of FBLIC was financed with the working capital of TLIC. On April 28, 2015, the Company acquired a block of life insurance policies and annuity contracts according to the terms of an assumption reinsurance agreement. During the second quarter of 2015, the Company estimated and recorded assets of $550,000 and a gain of $550,000 on the reinsurance assumption transaction. The Company completed the reinsurance assumption transaction during the third quarter of 2015 and adjusted the gain to $588,923 and recorded assets of $3,644,839 (including cash) and assumed liabilities of $3,055,916.
Basis of Accounting, Policy [Policy Text Block]	Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting primarily of normal recurring accruals) considered necessary for a fair presentation of the results for the interim periods have been included. The results of operations for the three and six months ended June 30, 2016 are not necessarily indicative of the results to be expected for the year ended December 31, 2016 or for any other interim period or for any other future year. Certain financial information which is normally included in notes to consolidated financial statements prepared in accordance with U.S. GAAP, but which is not required for interim reporting purposes, has been condensed or omitted. The accompanying consolidated financial statements and notes thereto should be read in conjunction with the financial statements and notes thereto included in the Company's report on Form 10-K for the year ended December 31, 2015.
Consolidation, Policy [Policy Text Block]	Principles of Consolidation The consolidated financial statements include the accounts and operations of the Company and its subsidiaries. All intercompany accounts and transactions are eliminated in consolidation.
Reclassification, Policy [Policy Text Block]	Reclassifications Certain reclassifications have been made in the prior year and prior quarter financial statements to conform to current year and current quarter classifications. These reclassifications had no effect on previously reported net income or shareholders' equity.
Use of Estimates, Policy [Policy Text Block]	Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results.
Common Stock Policy [Policy Text Block]	Common Stock Common stock is fully paid, non-assessable and has a par value of $.01 per share.
Treasury Stock [Policy Text Block]	Treasury Stock Treasury stock, representing shares of the Company’s common stock that have been reacquired after having been issued and fully paid, is recorded at the reacquisition cost and the shares are no longer outstanding.
Subsequent Events, Policy [Policy Text Block]	Subsequent Events Management has evaluated all events subsequent to June 30, 2016 through the date that these financial statements have been issued.
New Accounting Pronouncements, Policy [Policy Text Block]	Recent Accounting Pronouncements Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board (“FASB”) issued updated guidance to clarify the principles for recognizing revenue. While insurance contracts are not within the scope of this updated guidance, the Company's fee income related to providing services will be subject to this updated guidance. The updated guidance requires an entity to recognize revenue as performance obligations are met, in order to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration the entity is entitled to receive for those goods or services. The following steps are applied in the updated guidance: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when, or as, the entity satisfies a performance obligation. In July 2015, the FASB deferred the effective date of the updated guidance on revenue recognition by one year to the quarter ending March 31, 2018. The adoption of this guidance is not expected to have a material effect on the Company’s result of operations, financial position or liquidity. Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period In June 2014, the FASB issued updated guidance to resolve diversity in practice concerning employee share-based payments that contain performance targets that could be achieved after the requisite service period. Many reporting entities account for performance targets that could be achieved after the requisite service period as performance conditions that affect the vesting of the award and, therefore, do not reflect the performance targets in the estimate of the grant-date fair value of the award. Other reporting entities treat those performance targets as nonvesting conditions that affect the grant-date fair value of the award. The updated guidance requires that a performance target that affects vesting and that can be achieved after the requisite service period be treated as a performance condition. As such, the performance target that affects vesting should not be reflected in estimating that fair value of the award at the grant date. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the periods for which service has been rendered. If the performance target becomes probable of being achieved before the end of the service period, the remaining unrecognized compensation cost for which requisite service has not yet been rendered is recognized prospectively over the remaining service period. The total amount of compensation cost recognized during and after the service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The updated guidance is effective for annual and interim periods beginning after December 15, 2015, with early adoption permitted. The adoption of this guidance did not have a material effect on the Company's results of operations, financial position or liquidity. Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern In August 2014, the FASB issued guidance to address the diversity in practice in determining when there is substantial doubt about an entity's ability to continue as a going concern and when an entity must disclose certain relevant conditions and events. The new guidance requires an entity to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued (or available to be issued). The new guidance allows the entity to consider the mitigating effects of management's plans that will alleviate the substantial doubt and requires certain disclosures when substantial doubt is alleviated as a result of consideration of management's plans. If conditions or events raise substantial doubt that is not alleviated, an entity should disclose that there is substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued (or available to be issued), along with the principal conditions or events that raise substantial doubt, management's evaluation of the significance of those conditions or events in relation to the entity's ability to meet its obligations and management's plans that are intended to mitigate those conditions. The guidance is effective for annual periods ending after December 15, 2016, and interim and annual periods thereafter. The adoption of this guidance is not expected to have a material effect on the Company's results of operations, financial position or liquidity. Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity In November 2014, the FASB issued updated guidance to clarify when the separation of certain embedded derivative features in a hybrid financial instrument that is issued in the form of a share is required. That is, an entity will continue to evaluate whether the economic characteristics and risks of the embedded derivative feature are clearly and closely related to those of the host contract. Specifically, the amendments clarify that an entity should consider all relevant terms and features, including the embedded derivative feature being evaluated for bifurcation, in evaluating the nature of the host contract. Furthermore, the amendments clarify that no single term or feature would necessarily determine the economic characteristics and risks of the host contract. Rather, the nature of the host contract depends upon the economic characteristics and risks of the entire hybrid financial instrument. The updated guidance is effective for reporting periods beginning after December 15, 2015. Early adoption is permitted. The adoption of this guidance did not have a material effect on the Company's results of operations, financial position or liquidity. Troubled Debt Restructurings by Creditors In January 2015, the FASB issued updated guidance for troubled debt restructurings clarifying when an in substance repossession or foreclosure occurs, and when a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan. The new guidance is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2015. This guidance can be elected for prospective adoption or by using a retrospective transition method. The adoption of this guidance did not have a material effect on the Company's results of operations, financial position or liquidity. Amendments to the Consolidation Analysis In February 2015, the FASB issued updated guidance that makes targeted amendments to the current consolidation accounting guidance. The update is in response to accounting complexity concerns, particularly from the asset management industry. The guidance simplifies consolidation accounting by reducing the number of approaches to consolidation, provides a scope exception to registered money market funds and similar unregistered money market funds and ends the indefinite deferral granted to investment companies from applying the variable interest entity guidance. The updated guidance is effective for annual and interim periods beginning after December 15, 2015. The adoption of this guidance did not have a material effect on the Company’s results of operations, financial position or liquidity. Simplifying the Presentation of Debt Issuance Costs In April 2015, the FASB issued updated guidance to clarify the required presentation of debt issuance costs. The amended guidance requires that debt issuance costs be presented in the balance sheet as a direct reduction from the carrying amount of the recognized debt liability, consistent with the treatment of debt discounts. Amortization of debt issuance costs is to be reported as interest expense. The recognition and measurement guidance for debt issuance costs are not affected by the updated guidance. The updated guidance is effective for reporting periods beginning after December 15, 2015. Early adoption is permitted. The adoption of this guidance did not have a material effect on the Company’s results of operations, financial position or liquidity. Simplifying the Accounting for Measurement-Period Adjustments In September 2015, the FASB issued updated guidance regarding business combinations that requires an acquirer to recognize post-close measurement adjustments for provisional amounts in the period the adjustment amounts are determined rather than retrospectively. The acquirer is also required to recognize, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the provisional amount, calculated as if the accounting had been completed at the acquisition date. The updated guidance is to be applied prospectively effective for annual and interim periods beginning after December 15, 2015. In connection with business combinations which have already been completed, the adoption of this guidance did not have a material effect on the Company’s results of operations, financial position or liquidity. Recognition and Measurement of Financial Assets and Financial Liabilities In January 2016, the FASB issued updated guidance regarding financial instruments. This guidance intends to enhance reporting for financial instruments and addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The significant amendments in this update generally require equity investments to be measured at fair value with changes in fair value recognized in net income, require the use of an exit price notion when measuring the fair value of financial instruments for disclosure purposes and clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities. This guidance also intends to enhance the presentation of certain fair value changes for financial liabilities measured at fair value. It also amends certain disclosure requirements associated with the fair value of financial instruments. This guidance is effective for fiscal years beginning after December 15, 2017. The recognition and measurement provisions of this guidance will be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption and early adoption is not permitted. The Company is evaluating this guidance but expects the primary impact will be the recognition of unrealized gains and losses on available-for-sale equity securities in net income. Currently, all unrealized gains and losses on available-for-sale equity securities are recognized in other comprehensive income (loss). The effect of the adoption of this guidance on the Company’s results of operations, financial position and liquidity is primarily dependent on the fair value of the available-for-sale equity securities in future periods and the existence of a deferred tax asset related to available-for-sale securities in future periods that have not yet been fully assessed. Leases In February 2016, the FASB issued updated guidance to require lessees to recognize a right-to-use asset and a lease liability for leases with terms of more than 12 months. The updated guidance retains the two classifications of a lease as either an operating or finance lease (previously referred to as a capital lease). Both lease classifications require the lessee to record the right-to-use asset and the lease liability based upon the present value of cash flows. Finance leases will reflect the financial arrangement by recognizing interest expense on the lease liability separately from the amortization expense of the right-to-use asset. Operating leases will recognize lease expense (with no separate recognition of interest expense) on a straight-line basis over the term of the lease. The accounting by lessors is not significantly changed by the updated guidance. The updated guidance requires expanded qualitative and quantitative disclosures, including additional information about the amounts recorded in the financial statements. The updated guidance is effective for reporting periods beginning after December 15, 2018, and will require that the earliest comparative period presented include the measurement and recognition of existing leases with an adjustment to equity as if the updated guidance had always been applied. Early adoption is permitted. The adoption of this guidance is not expected to have a material effect on the Company’s results of operations, financial position or liquidity. Improvements to Employee Share-Based Payment Accounting In March 2016, the FASB issued updated guidance to simplify several aspects of accounting for share-based payment transactions as follows: Accounting for Income Taxes Under current accounting guidance, if the deduction for a share-based payment award for tax purposes exceeds, or is less than, the compensation cost recognized for financial reporting purposes, the resulting excess tax benefit, or tax deficiency, is reported as part of additional paid-in capital. Under the updated guidance, these excess tax benefits, or tax deficiencies, are reported as part of income tax expense or benefit in the income statement. The updated guidance also removes the requirement to delay recognition of any excess tax benefit when there are no current taxes payable to which the benefit would be applied. The tax-related cash flows resulting from share-based payments are to be included with other income tax cash flows as an operating activity rather than being reported separately as a financing activity. Forfeitures The updated guidance permits an entity to make an accounting policy election to either account for forfeitures when they occur or continue to apply the current method of accruing the compensation cost based on the number of awards that are expected to vest. Minimum Statutory Tax Withholding Requirements The updated guidance changes the threshold amount an entity can withhold for taxes when settling an equity award and still qualify for equity classification. A company can withhold up to the maximum statutory tax rates in the employees’ applicable jurisdiction rather than withholding up to the employers’ minimum statutory withholding requirement. The update also clarifies that all cash payments made to taxing authorities on behalf of employees for withheld shares are to be presented in financing activities on the statement of cash flows. Transition The updated guidance is effective for reporting periods beginning after December 15, 2016. Early adoption is permitted in any interim period; if early adoption is elected, the entity must adopt all of the amendments in the same reporting period and reflect any adjustments as of the beginning of the fiscal year. The Company has not elected early adoption. The adoption of this guidance is not expected to have a material effect on the Company’s results of operations, financial position or liquidity. Simplifying the Transition to the Equity Method of Accounting In March 2016, the FASB issued updated guidance that eliminates the requirement to retroactively apply the equity method of accounting when an investment that was previously accounted for using another method of accounting becomes qualified to apply the equity method due to an increase in the level of ownership interest or degree of influence. If the investment was previously accounted for as an available-for-sale security, any related unrealized gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for the equity method is recognized through earnings. The updated guidance is effective for reporting periods beginning after December 15, 2016, and is to be applied prospectively. Early adoption is permitted. The adoption of this guidance is not expected to have a material effect on the Company’s results of operations, financial position or liquidity. Contingent Put and Call Options in Debt Instruments In March 2016, the FASB issued updated guidance clarifying that when a call (put) option in a debt instrument can accelerate the repayment of principal on the debt instrument, a reporting entity does not need to assess whether the contingent event that triggers the ability to exercise the call (put) option is related to interest rates or credit risk in determining whether the option should be accounted for separately. The updated guidance is effective for reporting periods beginning after December 15, 2016. Early adoption is permitted. The adoption of this guidance is not expected to have a material effect on the Company’s results of operations, financial position or liquidity. Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued updated guidance for the accounting for credit losses for financial instruments. The updated guidance applies a new credit loss model (current expected credit losses or CECL) for determining credit-related impairments for financial instruments measured at amortized cost (e.g. reinsurance recoverables) and requires an entity to estimate the credit losses expected over the life of an exposure or pool of exposures. The estimate of expected credit losses should consider historical information, current information, as well as reasonable and supportable forecasts, including estimates of prepayments. The expected credit losses, and subsequent adjustments to such losses, will be recorded through an allowance account that is deducted from the amortized cost basis of the financial asset, with the net carrying value of the financial asset presented on the consolidated balance sheet at the amount expected to be collected. The updated guidance also amends the current other-than-temporary impairment model for available-for-sale debt securities by requiring the recognition of impairments relating to credit losses through an allowance account and limits the amount of credit loss to the difference between a security’s amortized cost basis and its fair value. In addition, the length of time a security has been in an unrealized loss position will no longer impact the determination of whether a credit loss exists. The updated guidance is effective for reporting periods beginning after December 15, 2019. Early adoption is permitted for reporting periods beginning after December 15, 2018. The Company will not be able to determine the impact that the updated guidance will have on its results of operations, financial position or liquidity until the updated guidance is adopted.

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Supplemental Disclosures to Consolidated Statements of Cash Flows (Tables)

6 Months Ended

Jun. 30, 2016

Schedule of Cash Flow, Supplemental Disclosures [Table Text Block]

	(Unaudited) Six Months Ended June 30, 2015

Reinsurance assumption asset	$	550,000

Gain on reinsurance assumption	$	550,000

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Note 2 - Investments (Tables)

6 Months Ended

Jun. 30, 2016

Available For Sale Fixed Maturity Securities [Member]

Investments Classified by Contractual Maturity Date [Table Text Block]

	June 30, 2016 (Unaudited)
	Fixed Maturity Available-For-Sale Securities				Other Long-Term Investments
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	6,996,581	$	7,097,315	$	4,301,079	$	4,365,290
Due in one year through five years		33,406,995		34,668,060		13,320,129		14,602,101
Due after five years through ten years		48,357,584		49,392,939		10,961,293		13,634,874
Due after ten years		45,353,671		47,691,252		9,314,290		15,624,273
Due at multiple maturity dates		36,284		89,300		-		-
	$	134,151,115	$	138,938,866	$	37,896,791	$	48,226,538

Schedule of Available-for-sale Securities Reconciliation [Table Text Block]

	Amortized Cost or Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	June 30, 2016 (Unaudited)
Fixed maturity securities
U.S. government and U.S. government agencies	$	3,287,423	$	143,821	$	2,314	$	3,428,930
States and political subdivisions		8,958,695		530,719		-		9,489,414
Residential mortgage-backed securities		36,284		53,016		-		89,300
Corporate bonds		105,456,971		5,084,674		1,397,412		109,144,233
Foreign bonds		16,411,742		713,152		337,905		16,786,989
Total fixed maturity securities		134,151,115		6,525,382		1,737,631		138,938,866
Equity securities
Mutual funds		339,564		-		681		338,883
Corporate preferred stock		149,725		9,059		-		158,784
Corporate common stock		189,149		87,453		-		276,602
Total equity securities		678,438		96,512		681		774,269
Total fixed maturity and equity securities	$	134,829,553	$	6,621,894	$	1,738,312	$	139,713,135

	December 31, 2015
Fixed maturity securities
U.S. government and U.S. government agencies	$	2,793,161	$	136,190	$	108,597	$	2,820,754
States and political subdivisions		8,993,848		61,592		102,835		8,952,605
Residential mortgage-backed securities		49,980		43,846		-		93,826
Corporate bonds		109,164,942		1,820,894		4,234,897		106,750,939
Foreign bonds		17,026,524		185,225		1,273,846		15,937,903
Total fixed maturity securities		138,028,455		2,247,747		5,720,175		134,556,027
Equity securities
Mutual funds		335,554		-		10,613		324,941
Corporate preferred stock		259,993		6,035		990		265,038
Corporate common stock		194,668		117,196		9,043		302,821
Total equity securities		790,215		123,231		20,646		892,800
Total fixed maturity and equity securities	$	138,818,670	$	2,370,978	$	5,740,821	$	135,448,827

Schedule of Unrealized Loss on Investments [Table Text Block]

	Fair Value		Unrealized Loss		Number of Securities
	June 30, 2016 (Unaudited)
Fixed maturity securities
Less than 12 months
U.S. government and U.S. government agencies	$	347,687	$	2,314		1
Corporate bonds		3,994,028		101,673		18
Foreign bonds		1,749,956		105,859		9
Total less than 12 months		6,091,671		209,846		28
More than 12 months
Corporate bonds		12,505,112		1,295,739		55
Foreign bonds		1,167,258		232,046		6
Total more than 12 months		13,672,370		1,527,785		61
Total fixed maturity securities		19,764,041		1,737,631		89
Equity securities
Less than 12 months
Mutual funds		87,825		681		1
Total equity securities		87,825		681		1
Total fixed maturity and equity securities	$	19,851,866	$	1,738,312		90

	December 31, 2015
Fixed maturity securities
Less than 12 months
U.S. government and U.S. government agencies	$	381,592	$	20,006	2
States and political subdivisions		5,422,934		102,835	26
Corporate bonds		46,907,532		2,646,997	186
Foreign bonds		9,155,830		879,659	40
Total less than 12 months		61,867,888		3,649,497	254
More than 12 months
U.S. government and U.S. government agencies		1,041,409		88,591	2
Corporate bonds		5,646,642		1,587,900	31
Foreign bonds		489,008		394,187	3
Total more than 12 months		7,177,059		2,070,678	36
Total fixed maturity securities		69,044,947		5,720,175	290
Equity securities
Less than 12 months
Mutual funds		74,547		10,613	1
Corporate preferred stock		109,279		990	1
Corporate common stock		41,804		9,043	1
Total equity securities		225,630		20,646	3
Total fixed maturity and equity securities	$	69,270,577	$	5,740,821	293

Unrealized Gain (Loss) on Investments [Table Text Block]

	(Unaudited)
	June 30, 2016			December 31, 2015
Unrealized appreciation (depreciation) on available-for-sale securities	$	4,883,582		$	(3,369,843	)
Adjustment to deferred acquisition costs		(77,140	)		50,073
Deferred income taxes		(961,287	)		663,953
Net unrealized appreciation (depreciation) on available-for-sale securities	$	3,845,155		$	(2,655,817	)

Realized Gain (Loss) on Investments [Table Text Block]

	Three Months Ended June 30, (Unaudited)
	Fixed Maturity Securities						Equity Securities				Mortgage Loans on Real Estate				Investment Real Estate
	2016			2015			2016		2015		2016		2015		2016		2015
Proceeds	$	5,219,798		$	1,399,932		$	19,210	$	7,529	$	2,089,278	$	2,573,436	$	-	$	-
Gross realized gains		155,956			62,791			8,711		-		14,416		19,758		-		-
Gross realized losses		(12,990	)		(462	)		-		-		-		-		-		-
Loss on other-than- temporary impairment		-			(304,256	)		-		-		-		-		-		-

	Six Months Ended June 30, (Unaudited)
	Fixed Maturity Securities						Equity Securities						Mortgage Loans on Real Estate				Investment Real Estate
	2016			2015			2016			2015			2016		2015		2016		2015
Proceeds	$	7,494,211		$	2,588,161		$	128,010		$	533,813		$	3,661,522	$	4,124,035	$	-	$	7,083,246
Gross realized gains		163,050			88,632			8,711			996			17,991		30,809		-		390,202
Gross realized losses		(41,342	)		(1,654	)		(1,468	)		(2,896	)		-		-		-		-
Loss on other-than- temporary impairment		-			(304,256	)		-			-			-		-		-		-

Available-for-sale Securities [Table Text Block]

	Three Months Ended June 30, (Unaudited)						Six Months Ended June 30, (Unaudited)
	2016			2015			2016			2015
Change in unrealized investment gains:
Available-for-sale securities:
Fixed maturity securities	$	4,452,781		$	(2,723,522	)	$	8,260,179		$	(1,655,536	)
Equity securities		(1,604	)		(32,114	)		(6,754	)		(37,129	)
Net realized investment gains (losses):
Available-for-sale securities:
Fixed maturity securities		142,966			(241,927	)		121,708			(217,278	)
Equity securities		8,711			-			7,243			(1,900	)
Mortgage loans on real estate		14,416			19,758			17,991			30,809
Investment real estate		-			-			-			390,202

Investment Income [Table Text Block]

	Three Months Ended June 30, (Unaudited)						Six Months Ended June 30, (Unaudited)
	2016			2015			2016			2015
Fixed maturity securities	$	1,533,301		$	1,245,734		$	3,100,519		$	2,419,515
Equity securities		6,658			8,725			13,840			20,254
Other long-term investments		622,502			424,587			1,170,324			838,829
Mortgage loans		1,328,427			980,728			2,681,498			1,936,872
Policy loans		26,491			25,165			52,589			50,306
Real estate		91,968			71,822			183,936			259,410
Short-term and other investments		69,874			65,434			142,144			113,626
Gross investment income		3,679,221			2,822,195			7,344,850			5,638,812
Investment expenses		(420,587	)		(317,433	)		(726,013	)		(726,490	)
Net investment income	$	3,258,634		$	2,504,762		$	6,618,837		$	4,912,322

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

	(Unaudited)
	June 30, 2016					December 31, 2015
	Amount		Percentage			Amount		Percentage
Commercial mortgage loans
Retail stores	$	1,113,771		1.72	%	$	1,272,881		2.17	%
Office buildings		186,238		0.29	%		191,774		0.32	%
Total commercial mortgage loans		1,300,009		2.01	%		1,464,655		2.49	%
Residential mortgage loans		63,224,782		97.99	%		57,310,263		97.51	%
Total mortgage loans	$	64,524,791		100.00	%	$	58,774,918		100.00	%

Schedule of Real Estate Properties [Table Text Block]

	(Unaudited)
	June 30, 2016			December 31, 2015
Land - held for the production of income	$	213,160		$	213,160
Land - held for sale		750,047			750,047
Total land		963,207			963,207
Building - held for the production of income		2,267,557			2,267,557
Less - accumulated depreciation		(976,950	)		(904,206	)
Buildings net of accumulated depreciation		1,290,607			1,363,351
Residential real estate - held for sale		198,622			-
Total residential real estate		198,622			-
Investment real estate, net of accumulated depreciation	$	2,452,436		$	2,326,558

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Note 3 - Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2016

Fair Value, Assets Measured on Recurring Basis [Table Text Block]

	Level 1		Level 2		Level 3		Total
	June 30, 2016 (Unaudited)
Fixed maturity securities, available-for-sale
U.S. government and U.S. government agencies	$	-	$	3,428,930	$	-	$	3,428,930
States and political subdivisions		-		9,489,414		-		9,489,414
Residential mortgage-backed securities		-		89,300		-		89,300
Corporate bonds		-		109,144,233		-		109,144,233
Foreign bonds		-		16,786,989		-		16,786,989
Total fixed maturity securities	$	-	$	138,938,866	$	-	$	138,938,866

Equity securities, available-for-sale
Mutual funds	$	-	$	338,883	$	-	$	338,883
Corporate preferred stock		105,440		53,344		-		158,784
Corporate common stock		230,102		-		46,500		276,602
Total equity securities	$	335,542	$	392,227	$	46,500	$	774,269

	December 31, 2015
Fixed maturity securities, available-for-sale
U.S. government and U.S. government agencies	$	-	$	2,820,754	$	-	$	2,820,754
States and political subdivisions		-		8,952,605		-		8,952,605
Residential mortgage-backed securities		-		93,826		-		93,826
Corporate bonds		-		106,750,939		-		106,750,939
Foreign bonds		-		15,937,903		-		15,937,903
Total fixed maturity securities	$	-	$	134,556,027	$	-	$	134,556,027

Equity securities, available-for-sale
Mutual funds	$	-	$	324,941	$	-	$	324,941
Corporate preferred stock		211,278		53,760		-		265,038
Corporate common stock		256,321		-		46,500		302,821
Total equity securities	$	467,599	$	378,701	$	46,500	$	892,800

Fair Value, by Balance Sheet Grouping [Table Text Block]

	June 30, 2016 (Unaudited)
	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Financial assets
Mortgage loans on real estate
Commercial	$	1,300,009	$	1,317,503	$	-	$	-	$	1,317,503
Residential		63,224,782		63,327,961		-		-		63,327,961
Policy loans		1,522,192		1,522,192		-		-		1,522,192
Short-term investments		50,033		50,033		50,033		-		-
Other long-term investments		37,896,791		48,226,538		-		-		48,226,538
Cash and cash equivalents		10,806,505		10,806,505		10,806,505		-		-
Accrued investment income		2,181,988		2,181,988		-		-		2,181,988
Loans from premium financing		68,223		68,223		-		-		68,223
Total financial assets	$	117,050,523	$	127,276,975	$	10,856,538	$	-	$	116,420,437
Financial liabilities
Policyholders' account balances	$	207,963,636	$	196,912,001	$	-	$	-	$	196,912,001
Policy claims		859,740		859,740		-		-		859,740
Total financial liabilities	$	208,823,376	$	197,771,741	$	-	$	-	$	197,771,741

	December 31, 2015
	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Financial assets
Mortgage loans on real estate
Commercial	$	1,464,655	$	1,486,601	$	-	$	-	$	1,486,601
Residential		57,310,263		57,356,546		-		-		57,356,546
Policy loans		1,486,317		1,486,317		-		-		1,486,317
Short-term investments		599,855		599,855		599,855		-		-
Other long-term investments		31,566,927		37,755,989		-		-		37,755,989
Cash and cash equivalents		9,047,586		9,047,586		9,047,586		-		-
Accrued investment income		2,205,469		2,205,469		-		-		2,205,469
Loans from premium financing		123,824		123,824		-		-		123,824
Total financial assets	$	103,804,896	$	110,062,187	$	9,647,441	$	-	$	100,414,746
Financial liabilities
Policyholders' account balances	$	197,688,616	$	179,233,152	$	-	$	-	$	179,233,152
Policy claims		714,928		714,928		-		-		714,928
Total financial liabilities	$	198,403,544	$	179,948,080	$	-	$	-	$	179,948,080

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Note 4 - Segment Data (Tables)

6 Months Ended

Jun. 30, 2016

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Three Months Ended June 30, (Unaudited)					Six Months Ended June 30, (Unaudited)
	2016		2015			2016		2015
Revenues:
Life insurance operations	$	3,602,546	$	2,828,290		$	7,347,790	$	5,691,976
Annuity operations		2,718,287		2,221,647			5,355,711		4,405,722
Corporate operations		148,820		119,133			307,059		228,059
Total	$	6,469,653	$	5,169,070		$	13,010,560	$	10,325,757
Income (loss) before income taxes:
Life insurance operations	$	22,562	$	(99,996	)	$	52,515	$	2,190
Annuity operations		350,169		353,586			578,425		469,091
Corporate operations		29,856		43,373			119,853		205,021
Total	$	402,587	$	296,963		$	750,793	$	676,302
Depreciation and amortization expense:
Life insurance operations	$	324,040	$	472,131		$	998,587	$	817,745
Annuity operations		182,591		150,809			338,503		345,511
Corporate operations		-		12,563			-		25,289
Total	$	506,631	$	635,503		$	1,337,090	$	1,188,545

Reconciliation of Assets from Segment to Consolidated [Table Text Block]

	(Unaudited) June 30, 2016		December 31, 2015
Assets:
Life insurance operations	$	48,902,428	$	44,151,860
Annuity operations		237,429,746		218,172,909
Corporate operations		6,851,689		6,805,073
Total	$	293,183,863	$	269,129,842

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Note 7 - Other Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss) (Tables)

6 Months Ended

Jun. 30, 2016

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

	Three Months Ended June 30, 2016 and 2015 (Unaudited)
	Unrealized						Accumulated
	Appreciation on			Adjustment to			Other
	Available-For-Sale			Deferred Acquisition			Comprehensive
	Securities			Costs			Income
Balance as of April 1, 2016	$	345,923		$	(8,045	)	$	337,878
Other comprehensive income before reclassifications, net of tax		3,682,284			(53,666	)		3,628,618
Less amounts reclassified from accumulated other comprehensive income, net of tax		121,341			-			121,341
Other comprehensive income		3,560,943			(53,666	)		3,507,277
Balance as of June 30, 2016	$	3,906,866		$	(61,711	)	$	3,845,155

Balance as of April 1, 2015	$	3,563,071		$	(43,141	)	$	3,519,930
Other comprehensive loss before reclassifications, net of tax		(2,398,050	)		28,397			(2,369,653	)
Less amounts reclassified from accumulated other comprehensive income, net of tax		(193,541	)		-			(193,541	)
Other comprehensive loss		(2,204,509	)		28,397			(2,176,112	)
Balance as of June 30, 2015	$	1,358,562		$	(14,744	)	$	1,343,818


	Six Months Ended June 30, 2016 and 2015 (Unaudited)
	Unrealized
	Appreciation						Accumulated
	(Depreciation) on			Adjustment to			Other
	Available-For-Sale			Deferred Acquisition			Comprehensive
	Securities			Costs			Income (Loss)
Balance as of January 1, 2016	$	(2,695,876	)	$	40,059		$	(2,655,817	)
Other comprehensive income before reclassifications, net of tax		6,705,902			(101,770	)		6,604,132
Less amounts reclassified from accumulated other comprehensive loss, net of tax		103,160			-			103,160
Other comprehensive income		6,602,742			(101,770	)		6,500,972
Balance as of June 30, 2016	$	3,906,866		$	(61,711	)	$	3,845,155

Balance as of January 1, 2015	$	2,712,694		$	(29,151	)	$	2,683,543
Other comprehensive loss before reclassifications, net of tax		(1,529,474	)		14,407			(1,515,067	)
Less amounts reclassified from accumulated other comprehensive income, net of tax		(175,342	)		-			(175,342	)
Other comprehensive loss		(1,354,132	)		14,407			(1,339,725	)
Balance as of June 30, 2015	$	1,358,562		$	(14,744	)	$	1,343,818

Comprehensive Income (Loss) [Table Text Block]

	Three Months Ended June 30, 2016 (Unaudited)

				Income Tax
	Pretax			Expense			Net of Tax
Other comprehensive income:
Change in net unrealized gains on available-for-sale securities:
Unrealized holding gains arising during the period	$	4,602,854		$	920,570		$	3,682,284
Reclassification adjustment for net gains included in operations		151,677			30,336			121,341
Net unrealized gains on investments		4,451,177			890,234			3,560,943
Adjustment to deferred acquisition costs		(67,083	)		(13,417	)		(53,666	)
Total other comprehensive income	$	4,384,094		$	876,817		$	3,507,277

	Three Months Ended June 30, 2015 (Unaudited)
				Income Tax
				Expense
	Pretax			(Benefit)			Net of Tax
Other comprehensive loss:
Change in net unrealized gains on available-for-sale securities:
Unrealized holding losses arising during the period	$	(2,997,563	)	$	(599,513	)	$	(2,398,050	)
Reclassification adjustment for net losses included in operations		(241,927	)		(48,386	)		(193,541	)
Net unrealized losses on investments		(2,755,636	)		(551,127	)		(2,204,509	)
Adjustment to deferred acquisition costs		35,497			7,100			28,397
Total other comprehensive loss	$	(2,720,139	)	$	(544,027	)	$	(2,176,112	)

	Six Months Ended June 30, 2016 (Unaudited)

				Income Tax
	Pretax			Expense			Net of Tax
Other comprehensive income:
Change in net unrealized gains on available-for-sale securities:
Unrealized holding gains arising during the period	$	8,382,376		$	1,676,474		$	6,705,902
Reclassification adjustment for net gains included in operations		128,951			25,791			103,160
Net unrealized gains on investments		8,253,425			1,650,683			6,602,742
Adjustment to deferred acquisition costs		(127,213	)		(25,443	)		(101,770	)
Total other comprehensive income	$	8,126,212		$	1,625,240		$	6,500,972

	Six Months Ended June 30, 2015 (Unaudited)
				Income Tax
				Expense
	Pretax			(Benefit)			Net of Tax
Other comprehensive loss:
Change in net unrealized gains on available-for-sale securities:
Unrealized holding losses arising during the period	$	(1,911,843	)	$	(382,369	)	$	(1,529,474	)
Reclassification adjustment for net losses included in operations		(219,178	)		(43,836	)		(175,342	)
Net unrealized losses on investments		(1,692,665	)		(338,533	)		(1,354,132	)
Adjustment to deferred acquisition costs		18,008			3,601			14,407
Total other comprehensive loss	$	(1,674,657	)	$	(334,932	)	$	(1,339,725	)

Schedule of Amounts Recognized in Other Comprehensive Income (Loss) [Table Text Block]

	Three Months Ended June 30, (Unaudited)					Six Months Ended June 30, (Unaudited)
Reclassification Adjustments	2016		2015			2016		2015
Unrealized gains on available-for-sale securities:
Realized gains (losses) on sales of securities (a)	$	151,677	$	(241,927	)	$	128,951	$	(219,178	)
Income tax expense (benefit) (b)		30,336		(48,386	)		25,791		(43,836	)
Total reclassification adjustments	$	121,341	$	(193,541	)	$	103,160	$	(175,342	)

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Note 8 - Allowance for Loan Losses from Mortgage Loans on Real Estate and Loans from Premium Financing (Tables)

6 Months Ended

Jun. 30, 2016