INCOME TAXES

The actual income tax expense (benefit) for the three and six months ended June 30, 2018 and 2017 differed from the “expected” income tax expense (benefit) for those periods (computed by applying the United States federal corporate tax rates of 21 percent during 2018 and 35 percent during 2017 to income (loss) before income tax) as follows:



	Three months ended June 30,						Six months ended June 30,
($ in thousands)	2018			2017			2018			2017
Computed "expected" income tax expense (benefit)	$	(1,622	)	$	2,530		$	(1,733	)	$	5,484
Increases (decreases) in tax resulting from:
Incremental benefit of net operating loss carry back	(839		)	—			(839		)	—
Tax-exempt interest income	(297		)	(761		)	(607		)	(1,466		)
Dividends received deduction	(151		)	(348		)	(274		)	(654		)
Proration of tax-exempt interest and dividends received deduction	112			166			220			318
Other, net	70			138			54			(321		)
Total income tax expense (benefit)	$	(2,727	)	$	1,725		$	(3,179	)	$	3,361

Pursuant to Staff Accounting Bulletin No. 118 issued by the Securities Exchange Commission, the Company made reasonable estimates of the effects the Tax Cuts and Jobs Act of 2017 (TCJA) had on deferred income tax assets and liabilities at December 31, 2017. For items where the Company could not make a reasonable estimate, primarily loss reserve discounting, the Company used existing accounting guidance and the provisions of the tax laws that were in place prior to the enactment. Beginning in the first quarter of 2018, the Company is using estimated industry discount factors until further guidance and updated discount factors are released by the Internal Revenue Service (IRS). The Company continues to wait on guidance from the IRS to complete its analysis of the effects of the TCJA.

The Company had no provision for uncertain income tax positions at June 30, 2018 or December 31, 2017. The Company recognized no interest expense or other penalties related to U.S. federal or state income taxes during the three or six months ended June 30, 2018 or 2017. It is the Company’s accounting policy to reflect income tax penalties as other expense, and interest as interest expense.

The Company files a U.S. federal income tax return, along with various state income tax returns. The Company is no longer subject to U.S. federal and state income tax examinations by tax authorities for years before 2014.