Note 7 - Income Taxes

6 Months Ended

Jun. 30, 2016

Notes

Note 7 - Income Taxes

Note 7 – Income Taxes

Effective income tax rates were 29% and 23% during the three- and six-month periods ended June 30, 2016, respectively compared to 10% and 11% and during each of the same periods during 2015.  The Company has elected to be, and is, treated as an S corporation for income tax reporting purposes.  Taxable income or loss of an S corporation is passed through to, and included in the individual tax returns, of the shareholders of the Company, rather than being taxed at the corporate level.  Notwithstanding this election, income taxes are reported for, and paid by, the Company's insurance subsidiaries, as they are not allowed by law to be treated as S corporations, as well as for the Company in Louisiana, which does not recognize S corporation status.  The tax rates of the Company’s insurance subsidiaries are below statutory rates due to investments in tax exempt bonds held by the Company’s insurance subsidiaries.  Tax rates increased during the current year periods due to a higher earnings in the insurance subsidiaries.