Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Schedule of Deferred Tax Assets and Liabilities

The tax effect of significant differences representing deferred tax assets and liabilities are as follows (dollars in thousands):

	As of December 31,  2017 (21% tax rate)			As of December 31, 2016 (34% tax rate)
General expenses	$	1,069		$	1,685
Unearned premiums	1,269			2,046
Claims liabilities	484			746
AMT credit	1,575			1,230
Impairment on real estate owned	116			187
Unrealized loss on interest rate swaps	128			350
Deferred tax assets	4,641			6,244
Depreciation	(88		)	(135		)
Deferred policy acquisition costs	(1,706		)	(2,839		)
Pre-1984 policyholder surplus account	(529		)	—
Unrealized gains on securities available-for-sale	(831		)	(868		)
Deferred tax liabilities	(3,154		)	(3,842		)
Net deferred tax asset	$	1,487		$	2,402

Changes in Temporary Differences in Federal Income Tax

The appropriate income tax effects of changes in temporary differences are as follows (at 34% with the exception of the impact of the change in tax rate which is calculated at 21%)(dollars in thousands):

	Year ended December 31,
	2017			2016
Deferred policy acquisition costs	$	(77	)	$	(46	)
Unearned premiums	(10		)	(7		)
General expenses	(45		)	(116		)
Depreciation	7			24
Claims liabilities	(38		)	(16		)
Litigation settlement	—			1,748
AMT credit	(345		)	(414		)
Impact of repeal of special provision on pre-1984 policyholder surplus	857			—
Impact of TCJA change in corporate tax rate	(54		)	—
Deferred income tax expense	$	295		$	1,173

Schedule of Effective Income Tax Rate Reconciliation

Total income tax expense (benefit) varies from amounts computed by applying current federal income tax rates to income or loss before income taxes.  The reasons for these differences and the approximate tax effects are as follows:

	Year ended December 31,
	2017		2016
Federal income tax rate applied to pre-tax income/loss	34.0	%	34.0	%
Dividends received deduction and tax-exempt interest	5.8	%	(1.9	)%
Company owned life insurance	3.4	%	0.3	%
Small life deduction	30.7	%	(8.6	)%
Pre-1984 policyholder surplus account at current statutory rate	(76.9	)%	—	%
Impact of change in tax rate under TCJA	4.9	%	—	%
AMT credit	(6.8	)%	—	%
Other, net	(3.1	)%	1.4	%
Effective federal income tax rate	(8.0	)%	25.2	%