Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | ||
Sep. 30, 2013 | Nov. 14, 2013 | Nov. 14, 2013 | |
Class A Common Stock | Class C Common Stock | ||
Entity Registrant Name | 'SECURITY NATIONAL FINANCIAL CORP | ' | ' |
Document Type | '10-Q | ' | ' |
Document Period End Date | 30-Sep-13 | ' | ' |
Amendment Flag | 'false | ' | ' |
Entity Central Index Key | '0000318673 | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'Q3 | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 11,242,385 | 12,669,983 |
Balance_Sheet
Balance Sheet (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Assets | ' | ' |
Fixed maturity securities, held to maturity, at amortized cost | $144,709,482 | $129,449,410 |
Equity securities, available for sale, at estimated fair value | 5,129,640 | 5,405,112 |
Mortgage loans on real estate and construction loans, held for investment net of allowances for losses of $4,150,360 and $4,239,861 for 2013 and 2012 | 90,971,516 | 84,462,205 |
Real estate held for investment, net of accumulated depreciation of $8,700,030 and $7,441,418 for 2013 and 2012 | 99,596,061 | 64,254,030 |
Policy and other loans, net of allowances for doubtful accounts of $419,050 and $505,030 for 2013 and 2012 | 19,548,139 | 20,188,516 |
Short-term investments | 18,457,264 | 40,925,390 |
Accrued investment income | 2,633,249 | 2,393,941 |
Total investments | 381,045,351 | 347,078,604 |
Cash and cash equivalents | 35,537,048 | 33,494,284 |
Mortgage loans sold to investors | 75,949,895 | 94,597,969 |
Receivables, net | 12,560,422 | 16,559,277 |
Restricted assets | 15,488,017 | 9,366,958 |
Cemetery perpetual care trust investments | 2,286,108 | 2,090,111 |
Receivable from reinsurers | 14,336,802 | 14,529,144 |
Cemetery land and improvements | 10,593,642 | 11,079,755 |
Deferred policy and pre-need contract acquisition costs | 44,046,261 | 39,913,465 |
Mortgage servicing rights, net | 4,336,016 | 2,797,470 |
Property and equipment, net | 11,157,912 | 11,033,957 |
Value of business acquired | 8,904,133 | 9,829,082 |
Goodwill | 677,039 | 677,039 |
Other assets | 4,490,941 | 4,169,508 |
Total Assets | 621,409,587 | 597,216,623 |
Liabilities | ' | ' |
Future life, annuity, and other benefits | 448,437,839 | 438,003,813 |
Unearned premium reserve | 5,222,250 | 5,383,800 |
Bank and other loans payable | 16,325,863 | 11,910,343 |
Deferred pre-need cemetery and mortuary contract revenues | 13,283,084 | 13,412,339 |
Cemetery perpetual care obligation | 3,242,236 | 3,153,001 |
Accounts payable | 1,618,821 | 2,026,433 |
Other liabilities and accrued expenses | 29,894,013 | 25,591,487 |
Income taxes | 17,263,487 | 17,923,298 |
Total liabilities | 535,287,593 | 517,404,514 |
Stockholders' Equity | ' | ' |
Additional paid-in capital | 21,305,603 | 21,262,140 |
Accumulated other comprehensive income, net of taxes | 1,312,472 | 1,934,359 |
Retained earnings | 41,213,800 | 35,114,072 |
Treasury stock at cost - 1,125,516 Class A shares in 2013 and 1,097,416 Class A shares in 2012 | -2,728,648 | -2,380,434 |
Total stockholders' equity | 86,121,994 | 79,812,109 |
Total Liabilities and Stockholders' Equity | 621,409,587 | 597,216,623 |
Class A Common Stock | ' | ' |
Stockholders' Equity | ' | ' |
Common stock | 22,484,770 | 21,687,152 |
Class C Common Stock | ' | ' |
Stockholders' Equity | ' | ' |
Common stock | $2,533,997 | $2,194,820 |
Balance_Sheet_Parenthetical
Balance Sheet Parenthetical (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Allowance for losses on mortgage loans on real estate and construction loans, held for investment | $4,150,360 | $4,239,861 |
Accumulated depreciation on real estate held for investment | 8,700,030 | 7,441,418 |
Allowance for doubtful accounts on policy and other loans | $419,050 | $505,030 |
Class A Common Stock | ' | ' |
Common Stock Par Value | $2 | $2 |
Common Stock Authorized | 20,000,000 | 20,000,000 |
Common Stock Issued | 11,242,385 | 10,843,576 |
Treasury Stock | 1,125,516 | 1,097,416 |
Class B Common Stock | ' | ' |
Common Stock Par Value | $1 | $1 |
Common Stock Authorized | 5,000,000 | 5,000,000 |
Common Stock Issued | ' | ' |
Common Stock Outstanding | ' | ' |
Class C Common Stock | ' | ' |
Common Stock Par Value | $0.20 | $0.20 |
Common Stock Authorized | 15,000,000 | 15,000,000 |
Common Stock Issued | 12,669,983 | 10,974,101 |
Income_Statement
Income Statement (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Revenues: | ' | ' | ' | ' |
Insurance premiums and other considerations | $12,593,886 | $12,045,553 | $37,920,272 | $36,915,237 |
Net investment income | 5,254,047 | 5,570,951 | 15,281,108 | 16,721,369 |
Net mortuary and cemetery sales | 2,887,855 | 2,619,605 | 9,024,671 | 8,121,244 |
Realized gains on investments and other assets | 194,727 | 222,621 | 1,177,487 | 580,607 |
Other than temporary impairments on investments | -30,000 | -440,315 | -205,922 | -530,315 |
Mortgage fee income | 28,897,521 | 43,456,537 | 101,660,436 | 105,075,705 |
Other income | 754,755 | 272,951 | 1,879,262 | 715,490 |
Total revenues | 50,552,791 | 63,747,903 | 166,737,314 | 167,599,337 |
Benefits and expenses: | ' | ' | ' | ' |
Death benefits | 6,144,319 | 5,914,468 | 19,464,984 | 16,024,565 |
Surrenders and other policy benefits | 632,374 | 453,838 | 2,061,202 | 1,566,828 |
Increase in future policy benefits | 5,079,645 | 5,642,818 | 14,494,056 | 17,694,810 |
Amortization of deferred policy and pre-need acquisition costs and value of business acquired | 1,178,579 | 1,094,886 | 3,764,103 | 3,853,189 |
Commissions | 14,361,623 | 23,486,730 | 52,809,618 | 58,766,750 |
Salaries | 8,492,420 | 6,924,095 | 24,237,358 | 19,358,604 |
Provision for loan losses and loss reserve | 395,605 | 1,763,090 | 1,663,895 | 3,263,437 |
Costs related to funding mortgage loans | 1,544,229 | 1,980,512 | 5,190,829 | 5,141,164 |
Other expenses | 9,626,035 | 8,749,357 | 29,568,910 | 24,340,043 |
Interest expense | 667,237 | 1,142,428 | 2,352,319 | 2,758,313 |
Cost of goods and services sold-mortuaries and cemeteries | 466,441 | 463,386 | 1,468,613 | 1,334,369 |
Total benefits and expenses | 48,588,507 | 57,615,608 | 157,075,887 | 154,102,072 |
Earnings before income taxes | 1,964,284 | 6,132,295 | 9,661,427 | 13,497,265 |
Income tax expense | -697,793 | -2,142,249 | -3,562,425 | -4,252,003 |
Net earnings | $1,266,491 | $3,990,046 | $6,099,002 | $9,245,262 |
Net earnings per Class A Equivalent common share (1) | $0.11 | $0.39 | $0.55 | $0.92 |
Net earnings per Class A Equivalent common share-assuming dilution (1) | $0.11 | $0.36 | $0.52 | $0.92 |
Weighted-average Class A equivalent common share outstanding (1) | 11,307,249 | 10,104,202 | 11,097,776 | 10,059,548 |
Weighted-average Class A equivalent common shares outstanding-assuming dilution (1) | 11,828,052 | 11,000,772 | 11,666,680 | 10,072,952 |
Comprehensive_Income_Statement
Comprehensive Income Statement (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Comprehensive Income Statement | ' | ' | ' | ' |
Net earnings | $1,266,491 | $3,990,046 | $6,099,002 | $9,245,262 |
Net unrealized losses on derivative instruments | -982,064 | -2,184,088 | -799,028 | -260,238 |
Net unrealized gains on available for sale securities | 44,199 | 82,521 | 177,141 | 98,681 |
Other comprehensive loss | -937,865 | -2,101,567 | -621,887 | -161,557 |
Comprehensive income | $328,626 | $1,888,479 | $5,477,115 | $9,083,705 |
Statements_of_Stockholders_Equ
Statements of Stockholders' Equity (USD $) | Class A Common Stock | Class C Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Treasury Stock | Total |
Balance at Dec. 31, 2011 | $19,277,596 | $2,027,195 | $19,487,565 | $654,443 | $22,546,623 | ($2,762,835) | $61,230,587 |
Net earnings | ' | ' | ' | ' | 9,245,262 | ' | 9,245,262 |
Other comprehensive loss | ' | ' | ' | -161,557 | ' | ' | -161,557 |
Grant of stock options | ' | ' | 187,510 | ' | ' | ' | 187,510 |
Sale of treasury stock | ' | ' | -97,983 | ' | ' | 344,961 | 246,978 |
Conversion Class C to Class A | 646 | -645 | -1 | ' | ' | ' | ' |
Balance at Sep. 30, 2012 | 19,278,242 | 2,026,550 | 19,577,091 | 492,886 | 31,791,885 | -2,417,874 | 70,748,780 |
Balance at Dec. 31, 2012 | 21,687,152 | 2,194,820 | 21,262,140 | 1,934,359 | 35,114,072 | -2,380,434 | 79,812,109 |
Net earnings | ' | ' | ' | ' | 6,099,002 | ' | 6,099,002 |
Other comprehensive loss | ' | ' | ' | -621,887 | ' | ' | -621,887 |
Grant of stock options | ' | ' | 66,711 | ' | ' | ' | 66,711 |
Exercise of stock options | 714,572 | 422,422 | -344,545 | ' | ' | -543,334 | 249,115 |
Sale of treasury stock | ' | ' | 321,824 | ' | ' | 195,120 | 516,944 |
Stock Dividends | -200 | ' | -526 | ' | 726 | ' | ' |
Conversion Class C to Class A | 83,246 | -83,245 | -1 | ' | ' | ' | ' |
Balance at Sep. 30, 2013 | $22,484,770 | $2,533,997 | $21,305,603 | $1,312,472 | $41,213,800 | ($2,728,648) | $86,121,994 |
Statement_of_Cash_Flows
Statement of Cash Flows (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Cash flows from operating activities: | ' | ' |
Net cash provided by operating activities | $43,181,923 | $34,508,526 |
Cash flows from investing activities: | ' | ' |
Purchase-fixed maturity securities | -22,178,297 | -10,022,393 |
Calls and maturities - fixed maturity securities | 6,684,365 | 6,721,257 |
Purchase - equity securities | -2,347,616 | -1,077,129 |
Sales - equity securities | 3,127,298 | 2,318,410 |
Purchase of short-term investments | -16,369,471 | -11,921,131 |
Sales of short-term investments | 38,837,597 | 10,604,937 |
Sales (purchases) of restricted assets | -6,068,005 | 537,969 |
Changes in assets for perpetual care trusts | -187,387 | -196,621 |
Amount received for perpetual care trusts | 89,235 | 107,979 |
Mortgage, policy, and other loans made | -118,810,066 | -87,585,273 |
Payments received for mortgage, policy and other loans | 99,118,375 | 104,728,438 |
Purchase of property and equipment | -2,717,237 | -1,880,302 |
Disposal of property and equipment | 350 | 14,769 |
Purchase of real estate | -27,222,603 | -81,095 |
Sale of real estate | 6,672,446 | 401,443 |
Cash paid for purchase of subsidiaries, net of cash received | ' | -180,591 |
Net cash provided by (used in) investing activities | -41,371,016 | 12,490,667 |
Cash flows from financing activities: | ' | ' |
Annuity contract receipts | 7,102,573 | 6,713,474 |
Annuity contract withdrawals | -11,563,042 | -10,257,481 |
Proceeds from stock options exercised | 249,115 | ' |
Repayment of bank loans on notes and contracts | -1,738,501 | -1,069,127 |
Proceeds from borrowing on bank loans | 4,789,916 | 152,460 |
Change in line of credit borrowings | 1,391,796 | -1,400,000 |
Net cash provided by (used in) financing activities | 231,857 | -5,860,674 |
Net change in cash and cash equivalents | 2,042,764 | 41,138,519 |
Cash and cash equivalents at beginning of period | 33,494,284 | 11,671,773 |
Cash and cash equivalents at end of period | 35,537,048 | 52,810,292 |
Mortgage loans foreclosed into real estate | $2,884,297 | $15,200,527 |
1_Basis_of_Presentation
1) Basis of Presentation | 9 Months Ended |
Sep. 30, 2013 | |
Notes | ' |
1) Basis of Presentation | ' |
1) 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 for interim financial information and with the instructions to Form 10 Q and Articles 8 and 10 of Regulation S X. Accordingly, they do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America for complete financial statements. These financial statements should be read in conjunction with the consolidated financial statements of the Company and notes thereto for the year ended December 31, 2012, included in the Company’s Annual Report on Form 10-K (file number 000-09341). In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. | |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. | |
The estimates susceptible to significant change are those used in determining the liability for future policy benefits and claims, those used in determining valuation allowances for mortgage loans on real estate and construction loans held for investment, those used in determining loan loss reserve, and those used in determining the estimated future costs for pre-need sales. Although some variability is inherent in these estimates, management believes the amounts provided are fairly stated in all material respects. | |
Certain 2012 amounts have been reclassified to bring them into conformity with the 2013 presentation. |
2_Recent_Accounting_Pronouncem
2) Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2013 | |
Notes | ' |
2) Recent Accounting Pronouncements | ' |
2) Recent Accounting Pronouncements | |
Disclosures about Offsetting Assets and Liabilities – In December 2011, the Financial Accounting Standards Board ("FASB") issued authoritative guidance related to balance sheet offsetting. The new guidance requires disclosures about assets and liabilities that are offset or have the potential to be offset. These disclosures are intended to address differences in the asset and liability offsetting requirements under U.S. GAAP and International Financial Reporting Standards (“IFRS”). This new guidance was effective for the Company for interim and annual reporting periods beginning January 1, 2013, with retrospective application required. The adoption of this guidance did not have a material impact on the Company’s results of operations or financial position. | |
Presentation of Comprehensive Income - On February 5, 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2013-02 "Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income" ("ASU 2013-02"), which requires an entity to report, either on the face of the statement where net income is presented or in the notes, the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under U.S. GAAP to be reclassified in its entirety to net income. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures required under U.S. GAAP that provide additional detail about those amounts. The guidance in ASU 2013-02 is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2012. The adoption of this guidance did not have a material impact on the Company’s results of operations or financial position. |
3_Investments
3) Investments | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Notes | ' | |||||||||||||||
3) Investments | ' | |||||||||||||||
3) Investments | ||||||||||||||||
The Company’s investments in fixed maturity securities held to maturity and equity securities available for sale as of September 30, 2013 are summarized as follows: | ||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||
September 30, 2013: | ||||||||||||||||
Fixed maturity securities held to maturity carried at amortized cost: | ||||||||||||||||
Bonds: | ||||||||||||||||
U.S. Treasury securities and obligations of U.S. Government agencies | $ 2,287,767 | $ 357,964 | $ - | $ 2,645,731 | ||||||||||||
Obligations of states and political subdivisions | 1,789,947 | 193,721 | (9,275) | 1,974,393 | ||||||||||||
Corporate securities including public utilities | 134,811,745 | 12,177,008 | (1,380,808) | 145,607,945 | ||||||||||||
Mortgage-backed securities | 5,132,905 | 240,671 | (8,847) | 5,364,729 | ||||||||||||
Redeemable preferred stock | 687,118 | 30,300 | (8,800) | 708,618 | ||||||||||||
Total fixed maturity securities held to maturity | $ 144,709,482 | $ 12,999,664 | $ (1,407,730) | $ 156,301,416 | ||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||
September 30, 2013: | ||||||||||||||||
Equity securities available for sale at estimated fair value: | ||||||||||||||||
Common stock: | ||||||||||||||||
Industrial, miscellaneous and all other | $ 5,583,487 | $ 365,385 | $ (819,232) | $ 5,129,640 | ||||||||||||
Total equity securities available for sale at estimated fair value | $ 5,583,487 | $ 365,385 | $ (819,232) | $ 5,129,640 | ||||||||||||
Mortgage loans on real estate and construction loans held for investment at amortized cost: | ||||||||||||||||
Residential | $ 47,668,697 | |||||||||||||||
Residential construction | 9,885,587 | |||||||||||||||
Commercial | 37,567,592 | |||||||||||||||
Less: Allowance for loan losses | (4,150,360) | |||||||||||||||
Total mortgage loans on real estate and construction loans held for investment | $ 90,971,516 | |||||||||||||||
Real estate held for investment - net of depreciation | $ 40,610,932 | |||||||||||||||
Other real estate owned held for investment - net of depreciation | 58,985,129 | |||||||||||||||
Other real estate owned held for sale | - | |||||||||||||||
Total real estate | $ 99,596,061 | |||||||||||||||
Policy and other loans at amortized cost - net of allowance for doubtful accounts | $ 19,548,139 | |||||||||||||||
Short-term investments at amortized cost | $ 18,457,264 | |||||||||||||||
During the first quarter 2013, the Company reclassified its Other real estate owned held for sale to Other real estate owned held for investment. The properties are now being depreciated and are held as rental properties and are not listed for sale. | ||||||||||||||||
The Company’s investments in fixed maturity securities held to maturity and equity securities available for sale as of December 31, 2012 are summarized as follows: | ||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||
December 31, 2012: | ||||||||||||||||
Fixed maturity securities held to maturity carried at amortized cost: | ||||||||||||||||
Bonds: | ||||||||||||||||
U.S. Treasury securities and obligations of U.S. Government agencies | $ 2,602,589 | $ 514,572 | $ - | $ 3,117,161 | ||||||||||||
Obligations of states and political subdivisions | 2,040,277 | 285,241 | (3,982) | 2,321,536 | ||||||||||||
Corporate securities including public utilities | 118,285,147 | 16,230,468 | (607,322) | 133,908,293 | ||||||||||||
Mortgage-backed securities | 5,010,519 | 327,871 | (76,056) | 5,262,334 | ||||||||||||
Redeemable preferred stock | 1,510,878 | 98,087 | (1,200) | 1,607,765 | ||||||||||||
Total fixed maturity securities held to maturity | $ 129,449,410 | $ 17,456,239 | $ (688,560) | $ 146,217,089 | ||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||
December 31, 2012: | ||||||||||||||||
Equity securities available for sale at estimated fair value: | ||||||||||||||||
Non-redeemable preferred stock | $ 20,281 | $ - | $ (1,486) | $ 18,795 | ||||||||||||
Common stock: | ||||||||||||||||
Industrial, miscellaneous and all other | 6,047,474 | 309,752 | (970,909) | 5,386,317 | ||||||||||||
Total equity securities available for sale at estimated fair value | $ 6,067,755 | $ 309,752 | $ (972,395) | $ 5,405,112 | ||||||||||||
Mortgage loans on real estate and construction loans held for investment at amortized cost: | ||||||||||||||||
Residential | $ 50,584,923 | |||||||||||||||
Residential construction | 3,161,112 | |||||||||||||||
Commercial | 34,956,031 | |||||||||||||||
Less: Allowance for loan losses | (4,239,861) | |||||||||||||||
Total mortgage loans on real estate and construction loans held for investment | $ 84,462,205 | |||||||||||||||
Real estate held for investment - net of depreciation | $ 3,543,751 | |||||||||||||||
Other real estate owned held for investment - net of depreciation | 55,027,669 | |||||||||||||||
Other real estate owned held for sale | 5,682,610 | |||||||||||||||
Total real estate | $ 64,254,030 | |||||||||||||||
Policy and other loans at amortized cost - net of allowance for doubtful accounts | $ 20,188,516 | |||||||||||||||
Short-term investments at amortized cost | $ 40,925,390 | |||||||||||||||
Fixed Maturity Securities | ||||||||||||||||
The following tables summarize unrealized losses on fixed maturity securities, which are carried at amortized cost, at September 30, 2013 and December 31, 2012. The unrealized losses were primarily related to interest rate fluctuations. The tables set forth unrealized losses by duration and number of investment positions, together with the fair value of the related fixed maturity securities: | ||||||||||||||||
Unrealized Losses for Less than Twelve Months | No. of Investment Positions | Unrealized Losses for More than Twelve Months | No. of Investment Positions | Total Unrealized Loss | ||||||||||||
At September 30, 2013 | ||||||||||||||||
Obligations of states and political subdivisions | $ 6,963 | 1 | $ 2,312 | 1 | $ 9,275 | |||||||||||
U.S. Treasury Securities And Obilgations of U.S. Government Agencies | $ - | 0 | $ - | 0 | - | |||||||||||
Corporate securities including public utilities | 1,154,057 | 74 | 226,751 | 7 | 1,380,808 | |||||||||||
Mortgage-backed securities | - | 0 | 8,847 | 1 | 8,847 | |||||||||||
Redeemable preferred stock | 8,800 | 1 | - | 0 | 8,800 | |||||||||||
Total unrealized losses | $ 1,169,820 | 76 | $ 237,910 | 9 | $ 1,407,730 | |||||||||||
Fair Value | $ 24,899,980 | $ 2,468,225 | $ 27,368,205 | |||||||||||||
At December 31, 2012 | ||||||||||||||||
Obligations of states and political subdivisions | $ - | 0 | $ 3,982 | 2 | $ 3,982 | |||||||||||
Corporate securities including public utilities | 191,662 | 16 | 415,660 | 9 | 607,322 | |||||||||||
Mortgage-backed securities | - | 0 | 76,056 | 3 | 76,056 | |||||||||||
Redeemable preferred stock | 1,200 | 1 | - | 0 | 1,200 | |||||||||||
Total unrealized losses | $ 192,862 | 17 | $ 495,698 | 14 | $ 688,560 | |||||||||||
Fair Value | $ 4,609,268 | $ 3,972,091 | $ 8,581,359 | |||||||||||||
As of September 30, 2013, the average market value of the related fixed maturities was 95.1% of amortized cost and the average market value was 92.6% of amortized cost as of December 31, 2012. During the nine months ended September 30, 2013 and 2012 an other than temporary decline in fair value resulted in the recognition of credit losses on fixed maturity securities of $90,000 and $135,000, respectively. | ||||||||||||||||
On a quarterly basis, the Company reviews its fixed maturity investment securities related to corporate securities and other public utilities, consisting of bonds and preferred stocks that are in a loss position. The review involves an analysis of the securities in relation to historical values, and projected earnings and revenue growth rates. Based on the analysis, a determination is made whether a security will likely recover from the loss position within a reasonable period of time. If it is unlikely that the investment will recover from the loss position, the loss is considered to be other than temporary, the security is written down to the impaired value and an impairment loss is recognized. | ||||||||||||||||
Equity Securities | ||||||||||||||||
The following tables summarize unrealized losses on equity securities that were carried at estimated fair value based on quoted trading prices at September 30, 2013 and December 31, 2012. The unrealized losses were primarily the result of decreases in fair value due to overall equity market declines. The tables set forth unrealized losses by duration and number of investment positions, together with the fair value of the related equity securities available-for-sale in a loss position: | ||||||||||||||||
Unrealized Losses for Less than Twelve Months | No. of Investment Positions | Unrealized Losses for More than Twelve Months | No. of Investment Positions | Total Unrealized Losses | ||||||||||||
At September 30, 2013 | ||||||||||||||||
Industrial, miscellaneous and all other | $ 142,874 | 36 | $ 676,358 | 39 | $ 819,232 | |||||||||||
Total unrealized losses | $ 142,874 | 36 | $ 676,358 | 39 | $ 819,232 | |||||||||||
Fair Value | $ 1,394,029 | $ 1,312,798 | $ 2,706,827 | |||||||||||||
At December 31, 2012 | ||||||||||||||||
Non-redeemable preferred stock | $ 686 | 1 | $ 800 | 1 | $ 1,486 | |||||||||||
Industrial, miscellaneous and all other | 236,293 | 39 | 734,616 | 44 | 970,909 | |||||||||||
Total unrealized losses | $ 236,979 | 40 | $ 735,416 | 45 | $ 972,395 | |||||||||||
Fair Value | $ 1,422,436 | $ 1,493,538 | $ 2,915,974 | |||||||||||||
As of September 30, 2013, the average market value of the equity securities available for sale was 76.8% of the original investment and the average market value was 75.0% of the original investment as of December 31, 2012. The intent of the Company is to retain equity securities for a period of time sufficient to allow for the recovery in fair value. However, the Company may sell equity securities during a period in which the fair value has declined below the amount of the original investment. In certain situations new factors, including changes in the business environment, can change the Company’s previous intent to continue holding a security. During the nine months ended September 30, 2013 and 2012, there was no other than temporary decline in fair value. | ||||||||||||||||
On a quarterly basis, the Company reviews its investment in industrial, miscellaneous and all other equity securities that are in a loss position. The review involves an analysis of the securities in relation to historical values, price earnings ratios, projected earnings and revenue growth rates. Based on the analysis a determination is made whether a security will likely recover from the loss position within a reasonable period of time. If it is unlikely that the investment will recover from the loss position, the loss is considered to be other than temporary, the security is written down to the impaired value and an impairment loss is recognized. | ||||||||||||||||
The fair values of fixed maturity securities are based on quoted market prices, when available. For fixed maturity securities not actively traded, fair values are estimated using values obtained from independent pricing services, or in the case of private placements, are estimated by discounting expected future cash flows using a current market value applicable to the coupon rate, credit and maturity of the investments. The fair values for equity securities are based on quoted market prices. | ||||||||||||||||
The amortized cost and estimated fair value of fixed maturity securities at September 30, 2013, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because certain borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. | ||||||||||||||||
Amortized Cost | Estimated Fair Value | |||||||||||||||
Held to Maturity: | ||||||||||||||||
Due in 2013 | $ 500,000 | $ 531,645 | ||||||||||||||
Due in 2014 through 2017 | 20,761,134 | 22,545,722 | ||||||||||||||
Due in 2018 through 2022 | 45,332,609 | 50,475,862 | ||||||||||||||
Due after 2022 | 72,295,716 | 76,674,840 | ||||||||||||||
Mortgage-backed securities | 5,132,905 | 5,364,729 | ||||||||||||||
Redeemable preferred stock | 687,118 | 708,618 | ||||||||||||||
Total held to maturity | $ 144,709,482 | $ 156,301,416 | ||||||||||||||
The amortized cost and estimated fair value of available for sale securities at September 30, 2013, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because certain borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Equities are valued using the specific identification method. | ||||||||||||||||
Amortized Cost | Estimated Fair Value | |||||||||||||||
Available for Sale: | ||||||||||||||||
Due in 2013 | $ - | $ - | ||||||||||||||
Due in 2014 through 2017 | - | - | ||||||||||||||
Due in 2018 through 2022 | - | - | ||||||||||||||
Due after 2022 | - | - | ||||||||||||||
Non-redeemable preferred stock | - | - | ||||||||||||||
Common stock | 5,583,487 | 5,129,640 | ||||||||||||||
Total available for sale | $ 5,583,487 | $ 5,129,640 | ||||||||||||||
The Company’s realized gains and losses, other than temporary impairments from investments and other assets, are summarized as follows: | ||||||||||||||||
Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Fixed maturity securities held to maturity: | ||||||||||||||||
Gross realized gains | $ 60,330 | $ 266,801 | $ 75,734 | $ 404,056 | ||||||||||||
Gross realized losses | (20,796) | (1,292) | (35,964) | (1,626) | ||||||||||||
Other than temporary impairments | (30,000) | (45,000) | (90,000) | (135,000) | ||||||||||||
Securities available for sale: | ||||||||||||||||
Gross realized gains | 59,041 | 139,352 | 298,423 | 291,932 | ||||||||||||
Gross realized losses | - | - | (2,678) | (5,705) | ||||||||||||
Other than temporary impairments | - | - | - | - | ||||||||||||
Other assets: | ||||||||||||||||
Gross realized gains | 96,152 | 27,244 | 841,972 | 114,113 | ||||||||||||
Gross realized losses | - | (209,484) | - | (222,163) | ||||||||||||
Other than temporary impairments | - | (395,315) | (115,922) | (395,315) | ||||||||||||
Total | $ 164,727 | $ (217,694) | $ 971,565 | $ 50,292 | ||||||||||||
The net carrying amount of held to maturity securities sold was $949,859 and $2,174,300 for the nine months ended September 30, 2013 and the year ended December 31, 2012, respectively. The net realized gain related to these sales was $11,009 and $271,364 for the nine months ended September 30, 2013 and the year ended December 31, 2012, respectively. Certain circumstances lead to these decisions to sell. In 2013 and 2012, the Company sold certain held to maturity bonds in gain positions to reduce its risk in certain industries or companies. | ||||||||||||||||
There were no investments, aggregated by issuer, in excess of 10% of shareholders’ equity (before net unrealized gains and losses on available for sale securities) at September 30, 2013, other than investments issued or guaranteed by the United States Government. | ||||||||||||||||
Major categories of net investment income are as follows: | ||||||||||||||||
Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Fixed maturity securities | $ 2,131,804 | $ 1,949,665 | $ 6,141,648 | $ 5,803,282 | ||||||||||||
Equity securities | 53,123 | 65,839 | 157,612 | 197,563 | ||||||||||||
Mortgage loans on real estate | 1,151,536 | 1,404,396 | 3,189,020 | 4,492,457 | ||||||||||||
Real estate | 2,048,994 | 1,282,918 | 4,492,517 | 3,627,574 | ||||||||||||
Policy and other loans | 211,387 | 192,197 | 610,618 | 610,472 | ||||||||||||
Short-term investments, principally gains on sale of mortgage loans and other | 2,263,234 | 2,193,680 | 6,855,865 | 6,240,791 | ||||||||||||
Gross investment income | 7,860,078 | 7,088,695 | 21,447,280 | 20,972,139 | ||||||||||||
Investment expenses | (2,606,031) | (1,517,744) | (6,166,172) | (4,250,770) | ||||||||||||
Net investment income | $ 5,254,047 | $ 5,570,951 | $ 15,281,108 | $ 16,721,369 | ||||||||||||
Net investment income includes income earned by the restricted assets of the cemeteries and mortuaries of $93,801 and $78,855 for the three months ended September 30, 2013 and 2012 respectively, and $259,810 and $247,844 for nine months ended September 30, 2013 and 2012, respectively. | ||||||||||||||||
Net investment income on real estate consists primarily of rental revenue received under short-term leases. | ||||||||||||||||
Investment expenses consist primarily of depreciation, property taxes, operating expenses of real estate and an estimated portion of administrative expenses relating to investment activities. | ||||||||||||||||
Securities on deposit for regulatory authorities as required by law amounted to $8,884,387 at September 30, 2013 and $9,190,012 at December 31, 2012. The restricted securities are included in various assets under investments on the accompanying condensed consolidated balance sheets. | ||||||||||||||||
Mortgage Loans | ||||||||||||||||
Mortgage loans consist of first and second mortgages. The mortgage loans bear interest at rates ranging from 2.0% to 10.5% per annum, maturity dates range from three months to 30 years and are secured by real estate. Concentrations of credit risk arise when a number of mortgage loan debtors have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions. Although the Company has a diversified mortgage loan portfolio consisting of residential mortgages, commercial loans and residential construction loans and requires collateral on all real estate exposures, a substantial portion of its debtors’ ability to honor obligations is reliant on the economic stability of the geographic region in which the debtors live or do business. At September 30, 2013, the Company had 36%, 24%, 10%, 7% and 5% of its mortgage loans from borrowers located in the states of Utah, California, Texas, Oklahoma and Florida, respectively. The mortgage loans on real estate balances on the consolidated balance sheet are reflected net of an allowance for loan losses of $4,150,360 and $4,239,861 at September 30, 2013 and December 31, 2012, respectively. | ||||||||||||||||
The Company establishes a valuation allowance for credit losses in its portfolio. | ||||||||||||||||
The following is a summary of the allowance for loan losses as a contra-asset account for the periods presented: | ||||||||||||||||
Allowance for Credit Losses and Recorded Investment in Mortgage Loans | ||||||||||||||||
Commercial | Residential | Residential Construction | Total | |||||||||||||
30-Sep-13 | ||||||||||||||||
Allowance for credit losses: | ||||||||||||||||
Beginning balance - January 1, 2013 | $ - | $ 4,193,674 | $ 46,187 | $ 4,239,861 | ||||||||||||
Charge-offs | - | (380,375) | - | (380,375) | ||||||||||||
Provision | 187,129 | (87,811) | 191,556 | 290,874 | ||||||||||||
Ending balance -September 30, 2013 | $ 187,129 | $ 3,725,488 | $ 237,743 | $ 4,150,360 | ||||||||||||
Ending balance: individually evaluated for impairment | $ - | $ 301,870 | $ 137,629 | $ 439,499 | ||||||||||||
Ending balance: collectively evaluated for impairment | $ 187,129 | $ 3,423,618 | $ 100,114 | $ 3,710,861 | ||||||||||||
Ending balance: loans acquired with deteriorated credit quality | $ - | $ - | $ - | $ - | ||||||||||||
Mortgage loans: | ||||||||||||||||
Ending balance | $ 37,567,592 | $ 47,668,697 | $ 9,885,587 | $ 95,121,876 | ||||||||||||
Ending balance: individually evaluated for impairment | $ - | $ 2,008,714 | $ 226,629 | $ 2,235,343 | ||||||||||||
Ending balance: collectively evaluated for impairment | $ 37,567,592 | $ 45,659,983 | $ 9,658,958 | $ 92,886,533 | ||||||||||||
Ending balance: loans acquired with deteriorated credit quality | $ - | $ - | $ - | $ - | ||||||||||||
31-Dec-12 | ||||||||||||||||
Allowance for credit losses: | ||||||||||||||||
Beginning balance - January 1, 2012 | $ - | $ 4,338,805 | $ 542,368 | $ 4,881,173 | ||||||||||||
Charge-offs | - | (560,699) | (514,442) | (1,075,141) | ||||||||||||
Provision | - | 415,568 | 18,261 | 433,829 | ||||||||||||
Ending balance - December 31, 2012 | $ - | $ 4,193,674 | $ 46,187 | $ 4,239,861 | ||||||||||||
Ending balance: individually evaluated for impairment | $ - | $ 692,199 | $ - | $ 692,199 | ||||||||||||
Ending balance: collectively evaluated for impairment | $ - | $ 3,501,475 | $ 46,187 | $ 3,547,662 | ||||||||||||
Ending balance: loans acquired with deteriorated credit quality | $ - | $ - | $ - | $ - | ||||||||||||
Mortgage loans: | ||||||||||||||||
Ending balance | $ 34,956,031 | $ 50,584,923 | $ 3,161,112 | $ 88,702,066 | ||||||||||||
Ending balance: individually evaluated for impairment | $ - | $ 4,692,517 | $ 1,346,126 | $ 6,038,643 | ||||||||||||
Ending balance: collectively evaluated for impairment | $ 34,956,031 | $ 45,892,406 | $ 1,814,986 | $ 82,663,423 | ||||||||||||
Ending balance: loans acquired with deteriorated credit quality | $ - | $ - | $ - | $ - | ||||||||||||
The following is a summary of the aging of mortgage loans for the periods presented: | ||||||||||||||||
Age Analysis of Past Due Mortgage Loans | ||||||||||||||||
30-59 Days Past Due | 60-89 Days Past Due | Greater Than 90 Days (1) | In Foreclosure (1) | Total Past Due | Current | Total Mortgage Loans | Allowance for Loan Losses | Net Mortgage Loans | ||||||||
30-Sep-13 | ||||||||||||||||
Commercial | $ - | $ - | $ - | $ - | $ - | $ 37,567,592 | $ 37,567,592 | $ (187,129) | $ 37,380,463 | |||||||
Residential | 1,938,382 | 968,459 | 8,117,303 | 2,008,714 | 13,032,858 | 34,635,839 | 47,668,697 | (3,725,488) | 43,943,209 | |||||||
Residential Construction | - | - | 64,895 | 226,629 | 291,524 | 9,594,063 | 9,885,587 | (237,743) | 9,647,844 | |||||||
Total | $ 1,938,382 | $ 968,459 | $ 8,182,198 | $ 2,235,343 | $ 13,324,382 | $ 81,797,494 | $ 95,121,876 | $ (4,150,360) | $ 90,971,516 | |||||||
31-Dec-12 | ||||||||||||||||
Commercial | $ 581,984 | $ - | $ 143,252 | $ - | $ 725,236 | $ 34,230,795 | $ 34,956,031 | $ - | $ 34,956,031 | |||||||
Residential | 2,963,259 | 1,345,247 | 5,208,742 | 4,692,517 | 14,209,765 | 36,375,158 | 50,584,923 | (4,193,674) | 46,391,249 | |||||||
Residential Construction | - | - | 288,468 | 1,346,126 | 1,634,594 | 1,526,518 | 3,161,112 | (46,187) | 3,114,925 | |||||||
Total | $ 3,545,243 | $ 1,345,247 | $ 5,640,462 | $ 6,038,643 | $ 16,569,595 | $ 72,132,471 | $ 88,702,066 | $ (4,239,861) | $ 84,462,205 | |||||||
(1) Interest income is not recognized on loans past due greater than 90 days or in foreclosure. | ||||||||||||||||
Impaired Mortgage Loans | ||||||||||||||||
Impaired mortgage loans include loans with a related specific valuation allowance or loans whose carrying amount has been reduced to the expected collectible amount because the impairment has been considered other than temporary. The recorded investment in and unpaid principal balance of impaired loans along with the related loan specific allowance for losses, if any, for each reporting period and the average recorded investment and interest income recognized during the time the loans were impaired were as follows: | ||||||||||||||||
Impaired Loans | ||||||||||||||||
Recorded Investment | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | Interest Income Recognized | ||||||||||||
30-Sep-13 | ||||||||||||||||
With no related allowance recorded: | ||||||||||||||||
Commercial | $ - | $ - | $ - | $ - | $ - | |||||||||||
Residential | 8,117,303 | 8,117,303 | - | 8,117,303 | - | |||||||||||
Residential construction | 64,895 | 64,895 | - | 64,895 | - | |||||||||||
With an allowance recorded: | ||||||||||||||||
Commercial | $ - | $ - | $ - | $ - | $ - | |||||||||||
Residential | 2,008,714 | 2,008,714 | 301,870 | 2,008,714 | - | |||||||||||
Residential construction | 226,629 | 226,629 | 137,629 | 226,629 | - | |||||||||||
Total: | ||||||||||||||||
Commercial | $ - | $ - | $ - | $ - | $ - | |||||||||||
Residential | 10,126,017 | 10,126,017 | 301,870 | 10,126,017 | - | |||||||||||
Residential construction | 291,524 | 291,524 | 137,629 | 291,524 | - | |||||||||||
31-Dec-12 | ||||||||||||||||
With no related allowance recorded: | ||||||||||||||||
Commercial | $ 143,252 | $ 143,252 | $ - | $ 143,252 | $ - | |||||||||||
Residential | 5,208,742 | 5,208,742 | - | 5,208,742 | - | |||||||||||
Residential construction | 1,634,594 | 1,634,594 | - | 1,634,594 | - | |||||||||||
With an allowance recorded: | ||||||||||||||||
Commercial | $ - | $ - | $ - | $ - | $ - | |||||||||||
Residential | 4,692,517 | 4,692,517 | 692,199 | 4,692,517 | - | |||||||||||
Residential construction | - | - | - | - | - | |||||||||||
Total: | ||||||||||||||||
Commercial | $ 143,252 | $ 143,252 | $ - | $ 143,252 | $ - | |||||||||||
Residential | 9,901,259 | 9,901,259 | 692,199 | 9,901,259 | - | |||||||||||
Residential construction | 1,634,594 | 1,634,594 | - | 1,634,594 | - | |||||||||||
Credit Risk Profile Based on Performance Status | ||||||||||||||||
The Company’s mortgage loan portfolio is monitored based on performance of the loans. Monitoring a mortgage loan increases when the loan is delinquent or earlier if there is an indication of impairment. The Company defines non-performing mortgage loans as loans 90 days past due or on non-accrual status. | ||||||||||||||||
The Company’s performing and non-performing mortgage loans were as follows: | ||||||||||||||||
Mortgage Loan Credit Exposure | ||||||||||||||||
Credit Risk Profile Based on Payment Activity | ||||||||||||||||
Commercial | Residential | Residential Construction | Total | |||||||||||||
September 30, 2013 | 31-Dec-12 | September 30, 2013 | 31-Dec-12 | September 30, 2013 | 31-Dec-12 | September 30, 2013 | 31-Dec-12 | |||||||||
Performing | $37,567,592 | $34,812,779 | $37,542,681 | $40,683,664 | $9,594,063 | $1,526,518 | $84,704,336 | $77,022,961 | ||||||||
Nonperforming | - | 143,252 | 10,126,016 | 9,901,259 | 291,524 | 1,634,594 | 10,417,540 | 11,679,105 | ||||||||
Total | $37,567,592 | $34,956,031 | $47,668,697 | $50,584,923 | $9,885,587 | $3,161,112 | $95,121,876 | $88,702,066 | ||||||||
Non-Accrual Mortgage Loans | ||||||||||||||||
Once a loan is past due 90 days, it is the Company’s policy to end the accrual of interest income on the loan and write off any income that had been accrued. Interest not accrued on these loans totals $1,688,713 and $1,925,000 as of September 30, 2013 and December 31, 2012, respectively. | ||||||||||||||||
The following is a summary of mortgage loans on a nonaccrual status for the periods presented. | ||||||||||||||||
Mortgage Loans on Nonaccrual Status | ||||||||||||||||
As of September 30 | As of December 31 | |||||||||||||||
2013 | 2012 | |||||||||||||||
Commercial | $ - | $ 143,252 | ||||||||||||||
Residential | 10,126,016 | 9,901,259 | ||||||||||||||
Residential construction | 291,524 | 1,634,594 | ||||||||||||||
Total | $ 10,417,540 | $ 11,679,105 | ||||||||||||||
Loan Loss Reserve | ||||||||||||||||
When a repurchase demand is received from a third party investor, the data is reviewed and captured. The key factors that are captured are as follows: (i) lien position, (ii) payment status, (iii) claim type, (iv) unpaid principal balance, (v) interest rate, and (vi) validity of the demand. Other data is also captured and is useful for management purposes. The Company conducts its own review upon the receipt of a repurchase demand. In many instances, the Company is able to resolve the issues relating to the repurchase demand by the third party investor without having to make any payments to the investor. | ||||||||||||||||
The following is a summary of the loan loss reserve that is included in other liabilities and accrued expenses: | ||||||||||||||||
As of September 30 | As of December 31 | |||||||||||||||
2013 | 2012 | |||||||||||||||
Balance, beginning of period | $ 6,035,295 | $ 2,337,875 | ||||||||||||||
Provisions for losses | 1,614,769 | 4,053,051 | ||||||||||||||
Charge-offs | (418,382) | (355,631) | ||||||||||||||
Balance, end of period | $ 7,231,682 | $ 6,035,295 | ||||||||||||||
Existing conditions in the mortgage industry make it extremely difficult to determine with absolute certainty that the loan loss reserve is adequate for potential unknown claims that could be asserted by third party investors. Actual loan loss experience could change, in the near-term, from the established reserve based upon claims asserted by third party investors. The Company believes the loan loss reserve represents a sufficient amount to resolve investor claims as of the balance sheet date. | ||||||||||||||||
4_Stockbased_Compensation
4) Stock-based Compensation | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Notes | ' | ||||||||
4) Stock-based Compensation | ' | ||||||||
4) Stock-Based Compensation | |||||||||
The Company has five fixed option plans (the “1993 Plan,” the “2000 Plan”, the “2003 Plan”, the “2006 Plan” and the “2013 Plan”). Compensation expense for options issued of $4,122 and $93,074 has been recognized for these plans for the quarters ended September 30, 2013 and 2012, respectively, and $66,711 and $187,510 for the nine months ended September 30, 2013 and 2012, respectively. | |||||||||
Options to purchase 5,000 shares of the Company’s common stock were granted December 7, 2012. The fair value relating to stock-based compensation is $15,920 and will be expensed as options become available to exercise at the rate of 25% at the end of each quarter over the twelve months ended December 7, 2013. | |||||||||
Options to purchase 342,000 shares of the Company’s common stock were granted April 13, 2012. The fair value relating to stock-based compensation is $219,881. These options have been expensed and are available to be exercised. | |||||||||
The weighted-average fair value of each option granted in 2012 under the 2006 Plan, is estimated at $3.18 for the December 7, 2012 options as of the grant date using the Black Scholes Option Pricing Model with the following weighted-average assumptions: dividend yield of 5%, volatility of 73.89%, risk-free interest rate of 0.70%, and an expected term of 5.31 years. | |||||||||
The weighted-average fair value of each option granted in 2012 under the 2003 Plan and the 2006 Plan, is estimated at $0.66 for the April 13, 2012 options as of the grant date using the Black Scholes Option Pricing Model with the following weighted-average assumptions: dividend yield of 5%, volatility of 72.58%, risk-free interest rate of 1.04%, and an expected term of 5.32 years, respectively. | |||||||||
The Company generally estimates the expected life of the options based upon the contractual term of the options adjusted for actual experience. Future volatility is estimated based upon the a weighted historical volatility of the Company’s Class A common stock and three peer company stocks over a period equal to the estimated life of the options. Common stock issued upon exercise of stock options are generally new share issuances rather than from treasury shares. | |||||||||
A summary of the status of the Company’s stock incentive plans as of September 30, 2013, and the changes during the nine months ended September 30, 2013, is presented below: | |||||||||
Number of Class A Shares | Weighted Average Exercise Price | Number of Class C Shares(1) | Weighted Average Exercise Price(1) | ||||||
Outstanding at January 1, 2013 | 972,253 | $ 2.07 | 5,838,505 | $ 2.18 | |||||
Granted | - | - | - | - | |||||
Exercised | (482,866) | 2.15 | (1,906,022) | 2.24 | |||||
Cancelled | (76,032) | 3.36 | (638,138) | 3.33 | |||||
Outstanding at September 30, 2013 | 413,355 | $ 1.84 | 3,294,345 | $ 1.78 | |||||
As of September 30, 2013: | |||||||||
Options Exercisable | 412,040 | $ 1.83 | 3,294,345 | $ 1.78 | |||||
Weighted average contractual term of options | |||||||||
outstanding at September 30, 2013 | 5.95 years | 2.37 years | |||||||
Weighted average contractual term of options | |||||||||
exercisable at September 30, 2013 | 5.94 years | 2.37 years | |||||||
Aggregated intrinsic value of options | |||||||||
outstanding at September 30, 2013 | $1,748,854 | $1,409,984 | |||||||
Aggregated intrinsic value of options | |||||||||
exercisable at September 30, 2013 | $1,748,854 | $1,409,984 | |||||||
(1) Class “C” shares are converted to Class “A” shares on a 10 to 1 ratio. The Weighted Average Exercise Price is based on Class A Common shares. | |||||||||
The total intrinsic value (which is the amount by which the fair value of the underlying stock exceeds the exercise price of an option on the exercise date) of stock options exercised during the nine months ended September 30, 2013 and 2012 was $2,170,468 and $92,409, respectively. |
5_Capital_Stock
5) Capital Stock | 9 Months Ended |
Sep. 30, 2013 | |
Notes | ' |
5) Capital Stock | ' |
5) Capital Stock | |
The Company has two classes of common stock with shares outstanding: Class A and Class C. Class C shares are convertible into Class A shares at any time on a ten to one ratio. |
6_Earnings_Per_Share
6) Earnings Per Share | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Notes | ' | |||||||||
6) Earnings Per Share | ' | |||||||||
6) Earnings Per Share | ||||||||||
The basic and diluted earnings per share amounts were calculated as follows: | ||||||||||
Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||
2013 | 2012 | 2013 | 2012 | |||||||
Numerator: | ||||||||||
Net earnings | $1,266,491 | $3,990,046 | $6,099,002 | $9,245,262 | ||||||
Denominator: | ||||||||||
Basic weighted-average shares outstanding | 11,307,249 | 10,104,202 | 11,097,776 | 10,059,548 | ||||||
Effect of dilutive securities: | ||||||||||
Employee stock options | 520,803 | 896,570 | 568,904 | 13,404 | ||||||
Dilutive potential common shares | 520,803 | 896,570 | 568,904 | 13,404 | ||||||
Diluted weighted-average shares outstanding | 11,828,052 | 11,000,772 | 11,666,680 | 10,072,952 | ||||||
Basic net earnings per share | $0.11 | $0.39 | $0.55 | $0.92 | ||||||
Diluted net earnings per share | $0.11 | $0.36 | $0.52 | $0.92 | ||||||
Net earnings per share amounts have been adjusted for the effect of annual stock dividends. For the three and nine months ended September 30, 2013 and 2012, there were 5,250 and -0- of anti-dilutive employee stock option shares, respectively, that were not included in the computation of diluted net loss per common share as their effect would be anti-dilutive. |
7_Business_Segments
7) Business Segments | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Notes | ' | ||||||||||
7) Business Segments | ' | ||||||||||
7) Business Segments | |||||||||||
Description of Products and Services by Segment | |||||||||||
The Company has three reportable business segments: life insurance, cemetery and mortuary, and mortgage. The Company’s life insurance segment consists of life insurance premiums and operating expenses from the sale of insurance products sold by the Company’s independent agency force and net investment income derived from investing policyholder and segment surplus funds. The Company’s cemetery and mortuary segment consists of revenues and operating expenses from the sale of at-need cemetery and mortuary merchandise and services at its mortuaries and cemeteries, pre-need sales of cemetery spaces after collection of 10% or more of the purchase price and the net investment income from investing segment surplus funds. The Company’s mortgage segment consists of loan fee income and expenses from the originations of residential and commercial mortgage loans and interest earned and interest expenses from warehousing pre-sold loans before the funds are received from financial institutional investors. | |||||||||||
Measurement of Segment Profit or Loss and Segment Assets | |||||||||||
The accounting policies of the reportable segments are the same as those described in the Significant Accounting Principles of the form 10K for the year ended December 31, 2012. Intersegment revenues are recorded at cost plus an agreed upon intercompany profit, and are eliminated upon consolidation. | |||||||||||
Factors Management Used to Identify the Enterprise’s Reportable Segments | |||||||||||
The Company’s reportable segments are business units that offer different products and are managed separately due to the different products and the need to report to the various regulatory jurisdictions. | |||||||||||
Life Insurance | Cemetery/ Mortuary | Mortgage | Reconciling Items | Consolidated | |||||||
For the Three Months Ended | |||||||||||
30-Sep-13 | |||||||||||
Revenues from external customers | $ 17,341,200 | $ 2,959,197 | $ 30,252,394 | $ - | $ 50,552,791 | ||||||
Intersegment revenues | 2,334,416 | 369,121 | 67,637 | (2,771,174) | - | ||||||
Segment profit before income taxes | 1,102,552 | 12,757 | 848,975 | - | 1,964,284 | ||||||
For the Three Months Ended | |||||||||||
30-Sep-12 | |||||||||||
Revenues from external customers | $ 16,330,037 | $ 2,720,029 | $ 44,697,837 | $ - | $ 63,747,903 | ||||||
Intersegment revenues | 2,793,644 | 386,681 | 71,689 | (3,252,014) | - | ||||||
Segment profit before income taxes | 922,428 | (75,966) | 5,285,833 | - | 6,132,295 | ||||||
For the Nine Months Ended | |||||||||||
30-Sep-13 | |||||||||||
Revenues from external customers | $ 51,382,581 | $ 9,319,788 | $ 106,034,945 | $ - | $ 166,737,314 | ||||||
Intersegment revenues | 7,427,209 | 1,084,627 | 192,402 | (8,704,238) | - | ||||||
Segment profit before income taxes | 2,357,705 | 197,123 | 7,106,599 | - | 9,661,427 | ||||||
Identifiable Assets | 584,851,564 | 111,152,568 | 59,582,138 | (134,176,683) | 621,409,587 | ||||||
Goodwill | 391,848 | 285,191 | - | - | 677,039 | ||||||
For the Nine Months Ended | |||||||||||
30-Sep-12 | |||||||||||
Revenues from external customers | $ 51,438,923 | $ 8,410,186 | $ 107,750,228 | $ - | $ 167,599,337 | ||||||
Intersegment revenues | 6,954,477 | 1,144,239 | 222,978 | (8,321,694) | - | ||||||
Segment profit before income taxes | 3,814,289 | 73,126 | 9,609,850 | - | 13,497,265 | ||||||
Identifiable Assets | 521,801,393 | 112,072,090 | 46,079,386 | (119,191,969) | 560,760,900 | ||||||
Goodwill | 391,848 | 285,191 | - | - | 677,039 | ||||||
8_Fair_Value_of_Financial_Inst
8): Fair Value of Financial Instruments | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Notes | ' | ||||||||
8): Fair Value of Financial Instruments | ' | ||||||||
8) Fair Value of Financial Instruments | |||||||||
Generally accepted accounting principles (GAAP) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. GAAP also specifies a fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. Fair value measurements are classified under the following hierarchy: | |||||||||
Level 1: Financial assets and financial liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that we can access. | |||||||||
Level 2: Financial assets and financial liabilities whose values are based on the following: | |||||||||
a) Quoted prices for similar assets or liabilities in active markets; | |||||||||
b) Quoted prices for identical or similar assets or liabilities in non-active markets; or | |||||||||
c) Valuation models whose inputs are observable, directly or indirectly, for substantially the full term of the asset or liability. | |||||||||
Level 3: Financial assets and financial liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs may reflect our estimates of the assumptions that market participants would use in valuing the financial assets and financial liabilities. | |||||||||
The Company utilizes a combination of third party valuation service providers, brokers, and internal valuation models to determine fair value. | |||||||||
The following methods and assumptions were used by the Company in estimating the fair value disclosures related to other significant financial instruments: | |||||||||
The items shown under Level 1 and Level 2 are valued as follows: | |||||||||
Securities Available-for-sale and Held-to-Maturity: The fair values of investments in fixed maturity and equity securities along with methods used to estimate such values are disclosed in Note 3. | |||||||||
Restricted Assets of the Cemeteries and Mortuaries: A portion of these assets include mutual funds and equity securities that have quoted market prices. Also included are cash and cash equivalents and participations in mortgage loans. The carrying amounts reported in the accompanying consolidated balance sheet for these financial instruments approximate their fair values. | |||||||||
Cemetery Perpetual Care Trust Investments: A portion of these assets include equity securities that have quoted market prices. Also included are cash and cash equivalents. The carrying amounts reported in the accompanying consolidated balance sheet for these financial instruments approximate their fair values. | |||||||||
Call Options: The fair values along with methods used to estimate such values are disclosed in Note 3. | |||||||||
The items shown under Level 3 are valued as follows: | |||||||||
Investment-Type Insurance Contracts: Future policy benefit reserves for interest-sensitive insurance products are computed under a retrospective deposit method and represent policy account balances before applicable surrender charges. Policy benefits and claims that are charged to expense include benefit claims incurred in the period in excess of related policy account balances. Interest crediting rates for interest-sensitive insurance products ranged from 4% to 6.5%. The fair values for the Company’s liabilities under investment-type insurance contracts (disclosed as policyholder account balances and future policy benefits – annuities) are estimated based on the contracts’ cash surrender values. | |||||||||
The fair values for the Company’s insurance contracts other than investment-type contracts are not required to be disclosed. However, the fair values of liabilities under all insurance contracts are taken into consideration in the Company’s overall management of interest rate risk, such that the Company’s exposure to changing interest rates is minimized through the matching of investment maturities with amounts due under insurance contracts. | |||||||||
Interest Rate Lock Commitments: The Company’s mortgage banking activities enters into interest rate lock commitments with potential borrowers and forward commitments to sell loans to third-party investors. The Company also implements a hedging strategy for these transactions. A mortgage loan commitment binds the Company to lend funds to a qualified borrower at a specified interest rate and within a specified period of time, generally up to 30 days after inception of the mortgage loan commitment. Mortgage loan commitments are defined to be derivatives under generally accepted accounting principles and are recognized at fair value on the consolidated balance sheet with changes in their fair values recorded as part of other comprehensive income from mortgage banking operations. | |||||||||
Bank Loan Interest Rate Swaps: Management considers the interest rate swap instruments to be an effective cash flow hedge against the variable interest rate on bank borrowings since the interest rate swap mirrors the term of the note payable and expires on the maturity date of the bank loan it hedges. The interest rate swaps are a derivative financial instruments carried at its fair value. The fair value of the interest rate swap was derived from a proprietary model of the bank from whom the interest rate swap was purchased and to whom the note is payable. | |||||||||
Mortgage Loans on Real Estate: The fair values are estimated using interest rates currently being offered for similar loans to borrowers with similar credit ratings. Loans with similar characteristics are aggregated for purposes of the calculations. The carrying amounts reported in the accompanying consolidated balance sheet for these financial instruments approximate their fair values. | |||||||||
Real Estate Held for Investment: The Company believes that in an orderly market fair value will approximate the replacement cost of a home and the rental income provides a cash flow stream for investment analysis. The Company believes the highest and best use of the properties are as income producing assets since it is the Company’s intent to hold the properties as rental properties, matching the income from the investment in rental properties with the funds required for future estimated policy claims. Accordingly, the fair value determination will be weighted more heavily toward the rental analysis. | |||||||||
It should be noted that for replacement cost, when determining the fair value of mortgage properties, the Company uses Marshall and Swift, a provider of building cost information to the real estate construction industry. For the investment analysis, the Company uses market data based upon its real estate operation experience and projected the present value of the net rental income over seven years. The Company uses 60% of the projected cash flow analysis and 40% of the replacement cost to approximate fair value of the collateral. | |||||||||
In addition to this analysis performed by the Company, the Company depreciates Real Estate Held for Investment. This depreciation reduces the book value of these properties and lessens the exposure to the Company from further deterioration in real estate values. | |||||||||
Mortgage Servicing Rights: The Company initially recognizes MSRs at their estimated fair values derived from the net cash flows associated with the servicing contracts, where the Company assumes the obligation to service the loan in the sale transaction. Considerable judgment is required to estimate the fair values of these assets and the exercise of such judgment can significantly affect the Company’s earnings. | |||||||||
The following tables summarize Level 1, 2 and 3 financial assets and financial liabilities measured at fair value on a recurring basis by their classification in the condensed consolidated balance sheet at September 30, 2013. | |||||||||
Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||
Assets accounted for at fair value on a recurring basis | |||||||||
Common stock | $ 5,129,640 | $ 5,129,640 | $ - | $ - | |||||
Total securities available for sale | 5,129,640 | 5,129,640 | - | - | |||||
Restricted assets of cemeteries and mortuaries | 647,242 | 647,242 | - | - | |||||
Cemetery perpetual care trust investments | 634,657 | 634,657 | - | - | |||||
Derivatives - interest rate lock commitments | 2,719,681 | - | - | 2,719,681 | |||||
Total assets accounted for at fair value on a recurring basis | $ 9,131,220 | $ 6,411,539 | $ - | $ 2,719,681 | |||||
Liabilities accounted for at fair value on a recurring basis | |||||||||
Policyholder account balances | $ (48,232,865) | $ - | $ - | $ (48,232,865) | |||||
Future policy benefits - annuities | (64,775,274) | - | - | (64,775,274) | |||||
Derivatives - bank loan interest rate swaps | (65,881) | - | - | (65,881) | |||||
- call options | (129,110) | (129,110) | - | - | |||||
- interest rate lock commitments | (855,315) | - | - | (855,315) | |||||
Total liabilities accounted for at fair value on a recurring basis | $ (114,058,445) | $ (129,110) | $ - | $ (113,929,335) | |||||
Following is a summary of changes in the consolidated balance sheet line items measured using level 3 inputs: | |||||||||
Policyholder Account Balances | Future Policy Benefits - Annuities | Interest Rate Lock Commitments | Bank Loan Interest Rate Swaps | ||||||
Balance - December 31, 2012 | $ (49,746,337) | $ (65,171,687) | $ 2,961,465 | $ (93,572) | |||||
Total gains (losses): | |||||||||
Included in earnings | 1,513,472 | 396,413 | - | - | |||||
Included in other comprehensive income (loss) | - | - | (1,097,099) | 27,691 | |||||
Balance - September 30, 2013 | $ (48,232,865) | $ (64,775,274) | $ 1,864,366 | $ (65,881) | |||||
The following tables summarize Level 1, 2 and 3 financial assets and financial liabilities measured at fair value on a nonrecurring basis by their classification in the consolidated balance sheet at September 30, 2013. | |||||||||
Quoted Prices | |||||||||
in Active | Significant | Significant | |||||||
Markets for | Observable | Unobservable | |||||||
Identical Assets | Inputs | Inputs | |||||||
Total | (Level 1) | (Level 2) | (Level 3) | ||||||
Assets accounted for at fair value on a nonrecurring basis | |||||||||
Mortgage servicing rights | $ 4,336,016 | - | - | $ 4,336,016 | |||||
Mortgage loans on real estate | 89,000 | - | - | 89,000 | |||||
Other real estate owned held for investment | 660,784 | - | - | 660,784 | |||||
Total assets accounted for at fair value on a nonrecurring basis | $ 5,085,800 | $ - | $ - | $ 5,085,800 | |||||
The following tables summarize Level 1, 2 and 3 financial assets and financial liabilities measured at fair value on a recurring basis by their classification in the condensed consolidated balance sheet at December 31, 2012. | |||||||||
Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||
Assets accounted for at fair value on a recurring basis | |||||||||
Non-redeemable preferred stock | $ 18,795 | $ 18,795 | $ - | $ - | |||||
Common stock | 5,386,317 | 5,386,317 | - | - | |||||
Total securities available for sale | 5,405,112 | 5,405,112 | - | - | |||||
Restricted assets of cemeteries and mortuaries | 585,412 | 585,412 | - | - | |||||
Cemetery perpetual care trust investments | 626,048 | 626,048 | - | - | |||||
Derivatives - interest rate lock commitments | 3,127,689 | - | - | 3,127,689 | |||||
Total assets accounted for at fair value on a recurring basis | $ 9,744,261 | $ 6,616,572 | $ - | $ 3,127,689 | |||||
Liabilities accounted for at fair value on a recurring basis | |||||||||
Policyholder account balances | $ (49,746,337) | $ - | $ - | $ (49,746,337) | |||||
Future policy benefits - annuities | (65,171,687) | - | - | (65,171,687) | |||||
Derivatives - bank loan interest rate swaps | (93,572) | - | - | (93,572) | |||||
- call options | (126,215) | (126,215) | - | - | |||||
- interest rate lock commitment | (166,224) | - | - | (166,224) | |||||
Total liabilities accounted for at fair value on a recurring basis | $ (115,304,035) | $ (126,215) | $ - | $ (115,177,820) | |||||
Following is a summary of changes in the condensed consolidated balance sheet line items measured using level 3 | |||||||||
inputs: | |||||||||
Policyholder Account Balances | Future Policy Benefits - Annuities | Interest Rate Lock Commitments | Bank Loan Interest Rate Swaps | ||||||
Balance - December 31, 2011 | $ (50,926,020) | $ (65,281,586) | $ 1,694,541 | $ (117,812) | |||||
Total gains (losses): | |||||||||
Included in earnings | 1,179,683 | 109,899 | - | - | |||||
Included in other | |||||||||
comprehensive income | - | - | 1,266,924 | 24,240 | |||||
Balance - December 31, 2012 | $ (49,746,337) | $ (65,171,687) | $ 2,961,465 | $ (93,572) | |||||
The following tables summarize Level 1, 2 and 3 financial assets and financial liabilities measured at fair value on a nonrecurring basis by their classification in the consolidated balance sheet at December 31, 2012. | |||||||||
Quoted Prices | |||||||||
in Active | Significant | Significant | |||||||
Markets for | Observable | Unobservable | |||||||
Identical Assets | Inputs | Inputs | |||||||
Total | (Level 1) | (Level 2) | (Level 3) | ||||||
Assets accounted for at fair value on a | |||||||||
nonrecurring basis | |||||||||
Mortgage servicing rights | $ 2,797,470 | - | - | $ 2,797,470 | |||||
Mortgage loans on real estate | 4,621,500 | - | - | 4,621,500 | |||||
Other real estate owned held for investment | 985,219 | - | - | 985,219 | |||||
Total assets accounted for at fair value on a | |||||||||
nonrecurring basis | $ 8,404,189 | $ - | $ - | $ 8,404,189 | |||||
9_Other_Business_Activity
9) Other Business Activity | 9 Months Ended |
Sep. 30, 2013 | |
Notes | ' |
9) Other Business Activity | ' |
9) Other Business Activity | |
Mortgage Operations | |
Approximately 64% of the Company’s revenues for the nine months ended September 30, 2013 were through its wholly owned subsidiary, SecurityNational Mortgage Company (“SecurityNational Mortgage”). SecurityNational Mortgage is a mortgage lender incorporated under the laws of the State of Utah. SecurityNational Mortgage is approved and regulated by the Federal Housing Administration (FHA), a department of the U.S. Department of Housing and Urban Development (HUD), to originate mortgage loans that qualify for government insurance in the event of default by the borrower. SecurityNational Mortgage obtains loans primarily from its retail offices and independent brokers. SecurityNational Mortgage funds the loans from internal cash flows, including loan purchase agreements from Security National Life Insurance Company (“Security National Life”), and with unaffiliated financial institutions. | |
SecurityNational Mortgage receives fees from the borrowers and other secondary fees from third party investors that purchase its loans. SecurityNational Mortgage sells its loans to third party investors and retains servicing on some of these loans. SecurityNational Mortgage pays the brokers and retail loan officers a commission for loans that are brokered through or originated by SecurityNational Mortgage. For the nine months ended September 30, 2013 and 2012, SecurityNational Mortgage originated and sold 9,064 loans ($1,692,112,000 total volume) and 9,578 loans ($1,737,214,000 total volume), respectively. | |
SecurityNational Mortgage has entered into loan purchase agreements to originate and sell mortgage loans to two unaffiliated warehouse banks. On March 19, 2012, SecurityNational Mortgage and Wells Fargo Bank, N.A. (“Wells Fargo”) entered into a loan purchase agreement in which Wells Fargo agreed to provide a warehouse line of up to $55,000,000 to fund certain approved mortgage loans originated by SecurityNational Mortgage. On August 6, 2012, SecurityNational Mortgage and Wells Fargo agreed to an amendment to the March 19, 2012 loan purchase agreement to increase the amount of the warehouse line available to fund mortgage loans originated by SecurityNational Mortgage from $55,000,000 to $75,000,000. | |
On July 16, 2012, SecurityNational Mortgage and UBS Real Estate Securities Inc. (“UBS”) entered into a loan purchase agreement in which UBS agreed to provide a warehouse line of up to $30,000,000 to fund mortgage loans originated by SecurityNational Mortgage. On October 26, 2012, SecurityNational Mortgage and UBS agreed to an amendment to the July 16, 2012 loan purchase agreement to increase the amount of the warehouse line available to fund mortgage loans originated by SecurityNational Mortgage from $30,000,000 to $40,000,000. | |
SecurityNational Mortgage originates mortgage loans funded by the warehouse banks and immediately sells them to third party investors. Generally, when mortgage loans are sold to the warehouse banks, SecurityNational | |
Mortgage is no longer obligated to pay the amounts outstanding on the mortgage loans, but is required to pay a fee in the form of interest on a portion of the mortgage loans between the date the loans are sold to warehouse banks and the settlement date with the third party investors. The terms of the loan purchase agreements are typically for one year, with interest accruing on a portion of the mortgage loans at annual rates ranging from 2.5% to 2.75% over the 30-day LIBOR rate. | |
Key accounting policies related to mortgage operations are as follows: | |
Mortgage loans on real estate and construction loans are carried at their principal balances adjusted for charge offs, the related allowance for loan losses, and net deferred fees or costs on originated loans. The Company defers related material loan origination fees, net of related direct loan origination costs, and amortizes the net fees over the term of the loans. | |
Mortgage loans are collateral dependent and require an appraisal at the time of underwriting and funding. Generally, the Company will fund a loan not to exceed 80% of the fair value of the loan’s collateral value. Amounts over 80% require mortgage insurance by an approved third party insurer. Once a loan is deemed to be impaired, the Company will review the market value of the collateral and provide an allowance for any impairment. | |
Mortgage loans sold to investors are carried at the amount due from third party investors, which is the estimated fair value at the balance sheet date, since these amounts are generally collected within a short period of time. | |
Real estate held for investment is carried at cost, less accumulated depreciation provided on a straight-line basis over the estimated useful lives of the properties, or is adjusted to a new basis for impairment in value, if any. | |
Other real estate owned held for investment are foreclosed properties which the Company intends to hold for investment purposes. These properties are recorded at the lower of cost or fair value upon foreclosure. Deprecation is provided on a straight line basis over the estimated useful life of the properties. These properties are analyzed for impairment periodically in accordance with our policy for long-lived assets. | |
Policy and other loans are carried at the aggregate unpaid balances, less allowances for possible losses. | |
Mortgage Servicing Rights are initially recognized at their estimated fair values derived from the net cash flows associated with the servicing contracts, where the Company assumes the obligation to service the loan in the sale transaction. Considerable judgment is required to estimate the fair values of these assets and the exercise of such judgment can significantly affect the Company’s earnings. After being initially recorded at fair value, MSRs backed by mortgage loans are accounted for using the amortization method. The Company also periodically assesses MSRs for impairment. If MSRs are impaired, the impairment is recognized in current-period earnings and the carrying value of the MSRs is adjusted through a valuation allowance. | |
Mortgage fee income consists of origination fees, processing fees and certain other income related to the origination and sale of mortgage loans. For mortgage loans sold to third party investors, mortgage fee income and related expenses are recognized pursuant to generally accepted accounting principles at the time the sales of the mortgage loans comply with the sales criteria for the transfer of financial assets. The sales criteria are as follows: (i) the transferred assets have been isolated from SecurityNational Mortgage and its creditors, (ii) the transferee has the right to pledge or exchange the mortgage, and (iii) SecurityNational Mortgage does not maintain effective control over the transferred mortgage. | |
SecurityNational Mortgage must determine that all three sales criteria are met at the time a mortgage loan is funded. All rights and title to the mortgage loans are assigned to unrelated financial institution investors, including investor commitments for the loans made prior to warehouse banks purchasing the loans under the purchase commitments. As of September 30, 2013, there were $125,119,000 in mortgage loans in which settlements with third party investors were still pending. | |
SecurityNational Mortgage sells all mortgage loans to third party investors without recourse. However, it may be required to repurchase a loan or pay a fee instead of repurchase under certain events, which include the following: | |
· Failure to deliver original documents specified by the investor, | |
· The existence of misrepresentation or fraud in the origination of the loan, | |
· The loan becomes delinquent due to nonpayment during the first several months after it is sold, | |
· Early pay-off of a loan, as defined by the agreements, | |
· Excessive time to settle a loan, | |
· Investor declines purchase, and | |
· Discontinued product and expired commitment. | |
Loan purchase commitments generally specify a date 30 to 45 days after delivery upon which the underlying loans should be settled. Depending on market conditions, these commitment settlement dates can be extended at a cost to SecurityNational Mortgage. Generally, a ten day extension will cost .125% (12.5 basis points) of the loan amount. SecurityNational Mortgage’s historical data shows that 99% of all loans originated are ordinarily settled by the investors as agreed within 16 days after delivery. There are situations, however, when SecurityNational Mortgage determines that it is unable to enforce the settlement of loans rejected by the third-party investors and that it is in its best interest to repurchase those loans from the warehouse banks. | |
It is SecurityNational Mortgage's policy to cure any documentation problems regarding such loans at a minimal cost for up to a six-month time period and to pursue efforts to enforce loan purchase commitments from third-party investors concerning the loans. SecurityNational Mortgage believes that six months allows adequate time to remedy any documentation issues, to enforce purchase commitments, and to exhaust other alternatives. Remedial methods include the following: | |
· Research reasons for rejection, | |
· Provide additional documents, | |
· Request investor exceptions, | |
· Appeal rejection decision to purchase committee, and | |
· Commit to secondary investors. | |
Once purchase commitments have expired and other alternatives to remedy are exhausted, which could be earlier than the six month time period, the loans are repurchased and transferred to the long term investment portfolio at the lower of cost or fair value and the previously recorded sales revenue is reversed. Any loan that later becomes delinquent is evaluated by the Company at that time and any impairment is adjusted accordingly. | |
Determining lower of cost or market. Cost is equal to the amount paid to the warehouse bank and the amount originally funded by SecurityNational Mortgage. Market value, while often difficult to determine, is based on the following guidelines: | |
· For loans that have an active market, SecurityNational Mortgage uses the market price on the repurchase date. | |
· For loans where there is no market but there is a similar product, SecurityNational Mortgage uses the market value for the similar product on the repurchase date. | |
· For loans where no active market exists on the repurchase date, SecurityNational Mortgage determines that the unpaid principal balance best approximates the market value on the repurchase date, after considering the fair value of the underlying real estate collateral and estimated future cash flows. | |
The appraised value of the real estate underlying the original mortgage loan adds support to SecurityNational Mortgage’s determination of fair value because, if the loan becomes delinquent, SecurityNational Mortgage has sufficient value to collect the unpaid principal balance or the carrying value of the loan. In determining the market value on the date of repurchase, SecurityNational Mortgage considers the total value of all of the loans because any sale of loans would be made as a pool. | |
For mortgages originated and held for investment, mortgage fee income and related expenses are recognized when the loan is originated. |
10_Allowance_For_Doubtful_Acco
10) Allowance For Doubtful Accounts and Loan Losses and Impaired Loans | 9 Months Ended |
Sep. 30, 2013 | |
Notes | ' |
10) Allowance For Doubtful Accounts and Loan Losses and Impaired Loans | ' |
10) Allowance for Doubtful Accounts and Loan Losses and Impaired Loans | |
The Company records an allowance and recognizes an expense for potential losses from mortgage loans, other loans and receivables in accordance with generally accepted accounting principles. | |
Receivables are the result of cemetery and mortuary operations, mortgage loan operations and life insurance operations. The allowance is based upon the Company’s historical experience for collectively evaluated impairment. Other allowances are based upon receivables individually evaluated for impairment. Collectability of the cemetery and mortuary receivables is significantly influenced by current economic conditions. The critical issues that impact recovery of mortgage loan operations are interest rate risk, loan underwriting, new regulations and the overall economy. | |
The Company provides allowances for losses on its mortgage loans held for investment through an allowance for loan losses. The allowance is comprised of two components. The first component is an allowance for collectively evaluated impairment that is based upon the Company’s historical experience in collecting similar receivables. The second component is based upon individual evaluation of loans that are determined to be impaired. Upon determining impairment the Company establishes an individual impairment allowance based upon an assessment of the fair value of the underlying collateral. See the schedules in Note 3 for additional information. In addition, when a mortgage loan is past due more than 90 days, the Company, does not accrue any interest income and proceeds to foreclose on the real estate. All expenses for foreclosure are expensed as incurred. Once foreclosed, the carrying value will approximate its fair value and the amount is classified as other real estate owned held for investment. The Company will rent the properties until it is deemed desirable to sell them. | |
The mortgage loan loss reserve is an estimate of probable losses at the balance sheet date that the Company will realize in the future on mortgage loans sold to third party investors. | |
The loan loss reserve analysis involves mortgage loans that have been sold to third party investors where the Company has received a demand from the investor. There are generally three types of demands: make whole, repurchase, or indemnification. These types of demands are more particularly described as follows: | |
Make whole demand – A make whole demand occurs when an investor forecloses on a property and then sells the property. The make whole amount is calculated as the difference between the original unpaid principal balance, accrued interest and fees, less the sale proceeds. | |
Repurchase demand – A repurchase demand usually occurs when there is a significant payment default, error in underwriting or detected loan fraud. | |
Indemnification demand – On certain loans the Company has negotiated a set fee that is to be paid in lieu of repurchase. The fee varies by investor and by loan product type. | |
Additional information related to the Loan Loss Reserve is included in Note 3. | |
11_Derivative_Investments
11) Derivative Investments | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Notes | ' | |||||||||||||||
11) Derivative Investments | ' | |||||||||||||||
11) Derivative Commitments | ||||||||||||||||
The Company is exposed to price risk due to the potential impact of changes in interest rates on the values of mortgage loan commitments from the time a derivative loan commitment is made to an applicant to the time the loan that would result from the exercise of that loan commitment is funded. Managing price risk is complicated by the fact that the ultimate percentage of derivative loan commitments that will be exercised (i.e., the number of loan commitments that will be funded) fluctuates. The probability that a loan will not be funded within the terms of the commitment is driven by a number of factors, particularly the change, if any, in mortgage rates following the inception of the interest rate lock. However, many borrowers continue to exercise derivative loan commitments even when interest rates have fallen. | ||||||||||||||||
In general, the probability of funding increases if mortgage rates rise and decreases if mortgage rates fall. This is due primarily to the relative attractiveness of current mortgage rates compared to the applicant’s committed rate. The probability that a loan will not be funded within the terms of the mortgage loan commitment also is influenced by the source of the applications (retail, broker or correspondent channels), proximity to rate lock expiration, purpose for the loan (purchase or refinance) product type and the application approval status. The Company has developed fallout estimates using historical data that take into account all of the variables, as well | ||||||||||||||||
as renegotiations of rate and point commitments that tend to occur when mortgage rates fall. These fallout estimates are used to estimate the number of loans that the Company expects to be funded within the terms of the mortgage loan commitments and are updated periodically to reflect the most current data. | ||||||||||||||||
The Company estimates the fair value of a mortgage loan commitment based on the change in estimated fair value of the underlying mortgage loan and the probability that the mortgage loan will fund within the terms of the commitment. The change in fair value of the underlying mortgage loan is measured from the date the mortgage loan commitment is issued. Therefore, at the time of issuance, the estimated fair value is zero. Following issuance, the value of a mortgage loan commitment can be either an asset or liability depending upon the change in value of the underlying mortgage loans. Fallout rates derived from the Company’s recent historical empirical data are used to estimate the quantity of mortgage loans that will fund within the terms of the commitments. | ||||||||||||||||
The Company utilizes forward loan sales commitments to economically hedge the price risk associated with its outstanding mortgage loan commitments. A forward loan sales commitment protects the Company from losses on sales of the loans arising from exercise of the loan commitments by securing the ultimate sales price and delivery date of the loans. Management expects these derivatives will experience changes in fair value opposite to changes in fair value of the derivative loan commitments, thereby reducing earnings volatility related to the recognition in earnings of changes in the values of the commitments. | ||||||||||||||||
The Company has adopted a strategy of selling “out of the money” call options on its available for sale equity securities as a source of revenue. The options give the purchaser the right to buy from the Company specified equity securities at a set price up to a pre-determined date in the future. The Company receives an immediate payment of cash for the value of the option and establishes a liability for the fair value of the option. The liability for call options is adjusted to fair value at each reporting date. The fair value of outstanding call options as of September 30, 2013 and December 31, 2012 was $129,110 and $126,215, respectively. In the event an option is exercised, the Company recognizes a gain on the sale of the equity security and a gain from the sale of the option. If the option expires unexercised, the Company recognizes a gain from the sale of the option and retains the underlying equity security. | ||||||||||||||||
The following table shows the fair value of derivatives as of September 30, 2013 and December 31, 2012. | ||||||||||||||||
Fair Value of Derivative Instruments | ||||||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||||||
30-Sep-13 | 31-Dec-12 | 30-Sep-13 | 31-Dec-12 | |||||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | |||||||||
Derivatives designated as hedging instruments: | ||||||||||||||||
Interest rate lock and forward sales commitments | other assets | $2,719,681 | other assets | $3,127,689 | Other liabilities | $ 855,315 | Other liabilities | $ 166,224 | ||||||||
Call Options | -- | -- | -- | -- | Other liabilities | 129,110 | Other liabilities | 126,215 | ||||||||
Interest rate swaps | -- | -- | -- | -- | Bank loans payable | 65,881 | Bank loans payable | 93,572 | ||||||||
Total | $2,719,681 | $3,127,689 | $1,050,306 | $ 386,011 | ||||||||||||
The following table shows the gain (loss) on derivatives for the periods presented. There were no gains or losses reclassified from accumulated other comprehensive income (OCI) into income or gains or losses recognized in income on derivatives ineffective portion or any amounts excluded from effective testing. | ||||||||||||||||
Net Amount Gain (Loss) Recognized in OCI | Net Amount Gain (Loss) Recognized in OCI | |||||||||||||||
Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||
Derivative - Cash Flow Hedging Relationships: | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Interest Rate Lock Commitments | $ (1,616,310) | $ (3,313,971) | $ (1,097,099) | $ (412,438) | ||||||||||||
Interest Rate Swaps | 5,890 | 4,746 | 27,691 | 14,779 | ||||||||||||
Sub Total | (1,610,420) | (3,309,225) | (1,069,408) | (397,659) | ||||||||||||
Tax Effect | (628,356) | (1,125,137) | (270,380) | (137,421) | ||||||||||||
Total | $ (982,064) | $ (2,184,088) | $ (799,028) | $ (260,238) | ||||||||||||
12_Reinsurance_Commitments_and
12) Reinsurance, Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2013 | |
Notes | ' |
12) Reinsurance, Commitments and Contingencies | ' |
12) Reinsurance, Commitments and Contingencies | |
Reinsurance with Mothe Life Insurance Company and DLE Life Insurance Company | |
On December 19, 2012, the Company, through its wholly owned subsidiary, Security National Life, entered into a Coinsurance Agreement with Mothe Life Insurance Company, a Louisiana domiciled insurance company, and a subsidiary, DLE Life Insurance Company, also a Louisiana domiciled life insurance company (collectively referred to as “Mothe Life”). The effective date of the Coinsurance Agreement was November 1, 2012. Under the terms of the Coinsurance Agreement, Security National Life agreed to reinsure certain insurance policies of Mothe Life in exchange for the settlement amount of $34,485,000. In addition, the Coinsurance Agreement provides that effective November 1, 2012, Mothe Life ceded and transferred to Security National Life, and Security National Life accepted and coinsured all of Mothe Life’s contractual liabilities under the coinsured policies by means of indemnity reinsurance. On December 18, 2012, the Louisiana Department of Insurance approved the Coinsurance Agreement. | |
The Coinsurance Agreement further provides that on and after the effective date of November 1, 2012, Security National Life is entitled to exercise all contractual rights of Mothe Life under the coinsured policies in accordance with the terms and provisions of such policies. Moreover, after the closing date of December 19, 2012, the Company agreed to be responsible for all the contractual liabilities under the coinsured policies, including the administration of the coinsured policies at its sole expense in accordance with the terms and conditions of a Service Agreement between Security National Life and Mothe Life. Pursuant to the terms of the Coinsurance Agreement, Security National Life paid a ceding commission to Mothe Life in the amount of $4,684,000. As a result of the ceding commission, Mothe Life transferred $34,485,000 in assets and $39,169,000 in statutory reserves, or liabilities, to Security National Life. | |
Mortgage Loan Loss Settlements | |
The mortgage industry has seen potential loan losses increase. Future loan losses are extremely difficult to estimate, especially in the current market. However, management believes that the Company’s reserve methodology and its current practice of property preservation allow it to estimate its losses on loans sold. The amounts accrued for loan losses for the three months ended September 30, 2013 and 2012 were $434,000 and $1,703,000, respectively, and for the nine months ended September 30, 2013 and 2012, were $1,615,000 and $3,238,000 respectively. The estimated liability for indemnification losses is included in other liabilities and accrued expenses and, as of September 30, 2013 and December 31, 2012, the balances were $7,232,000 and $6,035,000, respectively. | |
Settlement with Wells Fargo | |
On April 7, 2011, SecurityNational Mortgage entered into a settlement agreement with Wells Fargo Funding, Inc. (“Wells Fargo”). The settlement agreement provides that it is intended to be a pragmatic commercial accommodation between SecurityNational Mortgage and Wells Fargo and is not to be construed as an admission of responsibility, liability or fault for either party’s claims. Under the terms of the settlement agreement, SecurityNational Mortgage paid an initial settlement amount to Wells Fargo in the amount of $4,300,000. | |
SecurityNational Mortgage is also required under the settlement agreement to set aside 10 basis points (.0010) during the period from April 8, 2011 to March 31, 2017 from the purchase proceeds of any loans that it sells to any mortgage loan purchaser, including Wells Fargo, and pay such amounts to Wells Fargo. SecurityNational Mortgage is additionally required under the settlement agreement to set aside 50% from the net proceeds that it receives from any sale, liquidation or other transfer of certain real estate properties that it owns, after subtracting taxes, commissions, recording fees and other transaction costs. These real estate properties consist of 27 real estate properties with a total book value of $5,191,000 as of September 30, 2013. | |
In consideration for SecurityNational Mortgage making the initial settlement payment to Wells Fargo, Wells Fargo and related parties, including Wells Fargo Bank, released SecurityNational Mortgage and related parties, including the Company and Security National Life, from any claims, demands, damages, obligations, liabilities, or causes of action relating to residential mortgage loans that Wells Fargo purchased from SecurityNational Mortgage prior to December 31, 2009. Similarly, SecurityNational Mortgage released Wells Fargo and its related parties from any claims, demands, damages, obligations, liabilities, or causes of actions relating to residential mortgage loans that Wells Fargo purchased from SecurityNational Mortgage prior to December 31, 2009. | |
Mortgage Loan Loss Demands | |
Third Party Investors | |
There have been assertions in third party investor correspondence that SecurityNational Mortgage sold mortgage loans that allegedly contained borrower misrepresentations or experienced early payment defaults, or that were otherwise allegedly defective or not in compliance with agreements between SecurityNational Mortgage and the third party investors consisting principally of financial institutions. As a result of these claims, third party investors have made demands that SecurityNational Mortgage repurchase certain alleged defective mortgage loans that were sold to such investors or indemnify them against any losses related to such loans. | |
The total amount of potential claims by third party investors is difficult to determine. The Company has reserved and accrued $7,232,000 as of September 30, 2013 to settle all such investor related claims. The Company believes that the reserve for mortgage loan loss, which includes provisions for probable losses and indemnification on mortgage loans sold to investors, is reasonable based on available information. Moreover, the Company has successfully negotiated acceptable settlement terms with other third party investors that asserted claims for mortgage loan losses against SecurityNational Mortgage. | |
SecurityNational Mortgage disagrees with the repurchase demands and notices of potential claims from third party investors and believes it has significant defenses to these demands. If SecurityNational Mortgage is unable to resolve the alleged claims by the third party investors on acceptable terms, legal action may ensue. In the event of legal action, if SecurityNational Mortgage is not successful in its defenses against claims asserted by these third party investors to the extent that a substantial judgment is entered against SecurityNational Mortgage which is beyond its capacity to pay, SecurityNational Mortgage may be required to curtail or cease operations. | |
JP Morgan Chase Indemnification Demand | |
The Company and its wholly-owned subsidiary, SecurityNational Mortgage, received a notice of claim for indemnification dated December 21, 2011, from JP Morgan Chase & Co. (“JP Morgan Chase”) on behalf of EMC Mortgage, LLC (“EMC Mortgage”), relating to 21 mortgage loans that EMC Mortgage allegedly purchased as a third party investor from SecurityNational Mortgage. The notice also referenced an Agreement of Guaranty, dated February 23, 2006, by the Company relative to EMC Mortgage. The indemnification notice additionally stated that EMC Mortgage had been named in a lawsuit by the Bear Stearns Mortgage Funding Trust 2007-AR2 (the “Trust”), which was filed on September 13, 2011 in the Delaware Court of Chancery. | |
The lawsuit the Trust brought against EMC Mortgage contends that more than 800 residential mortgage loans that EMC Mortgage sold to the Trust (including the 21 loans allegedly originated by SecurityNational Mortgage) contained breaches of representations and warranties with respect to the mortgage loans, as well as defaults and foreclosures in many of such loans. As a result of the alleged breaches of representations and warranties by EMC Mortgage, the complaint requests that EMC Mortgage be ordered to repurchase from the Trust any loans for which it breached its representations and warranties, in the amount of the mortgage loans’ outstanding principal balance and all accrued but unpaid interest. | |
The indemnification notice from JP Morgan Chase further stated that the Company and SecurityNational Mortgage are required to indemnify EMC Mortgage for any of its losses arising from the lawsuit the Trust has brought against EMC based upon allegedly untrue statements of material fact related to information that was provided by SecurityNational Mortgage. To the extent the claims in the complaint relate to the 21 mortgage loans that SecurityNational Mortgage allegedly sold to EMC Mortgage, the Company believes it has significant defenses to such claims. The Company intends to vigorously defend itself and SecurityNational Mortgage in the event that JP Morgan Chase were to bring any legal action to require the Company or SecurityNational Mortgage to indemnify it for any loss, liability or expense in connection with the lawsuit that the Trust has brought against EMC Mortgage. | |
Mortgage Loan Loss Litigation | |
Lehman Brothers - Aurora Loan Services Litigation | |
On April 15, 2005, SecurityNational Mortgage entered into a loan purchase agreement with Lehman Brothers Bank, FSB (“Lehman Bank”). Under the terms of the loan purchase agreement, Lehman Bank agreed to purchase mortgage loans from time to time from SecurityNational Mortgage. During 2007, Lehman Bank and its wholly owned subsidiary, Aurora Loan Services LLC (“Aurora Loan Services”), purchased a total of 1,490 mortgage loans in the aggregate amount of $352,774,000 from SecurityNational Mortgage. Lehman Bank asserted that certain of the mortgage loans that it purchased from SecurityNational Mortgage during 2007 contained alleged misrepresentations and early payment defaults. As a result of these alleged breaches in the mortgage loans, Lehman Bank contended it had the right to require SecurityNational Mortgage to repurchase certain loans or be liable for losses related to such loans under the loan purchase agreement. SecurityNational Mortgage disagrees with these claims. | |
On December 17, 2007, SecurityNational Mortgage entered into an Indemnification Agreement with Lehman Bank and Aurora Loan Services. Under the terms of the Indemnification Agreement, SecurityNational Mortgage agreed to indemnify Lehman Bank and Aurora Loan Services for 75% of all losses that Lehman Bank and Aurora Loan Services may incur relative to breaches by mortgagors pertaining to 55 mortgage loans that were purchased from SecurityNational Mortgage. SecurityNational Mortgage was released from any obligation to pay the remaining 25% of such losses. The Indemnification Agreement also required SecurityNational Mortgage to indemnify Lehman Bank and Aurora Loan Services for 100% of any future losses incurred on mortgage loans with breaches that were not among the 55 mortgage loans. | |
Pursuant to the Indemnification Agreement, SecurityNational Mortgage paid $395,000 to Aurora Loan Services as a deposit into a reserve account, to secure any obligations of SecurityNational Mortgage under the Indemnification Agreement. This deposit was in addition to a $250,000 deposit that SecurityNational Mortgage previously made into the reserve account for a total of $645,000. Losses from mortgage loans with alleged breaches were payable from the reserve account. However, Lehman Bank and Aurora Loan Services were not to apply any funds from the reserve account to a particular mortgage loan until an actual loss had occurred. Under the Indemnification Agreement SecurityNational Mortgage was to pay to Aurora Loan Services each calendar month the difference between the reserve account balance and $645,000, but in no event would SecurityNational Mortgage be required to make payments into the reserve account in excess of $125,000 for any calendar month. | |
Since the reserve account was established, funds had been paid from the account to indemnify $4,281,000 in alleged losses from 31 mortgage loans that were among 55 mortgage loans with alleged breaches that were covered by the Indemnification Agreement and ten other mortgage loans with alleged breaches. In the last monthly billing statement dated April 24, 2011 to SecurityNational Mortgage, Lehman Brothers Holdings Inc. (“Lehman Holdings”) claimed that SecurityNational Mortgage owed approximately $3,745,000 for mortgage loan losses under the Indemnification Agreement. | |
During 2010 and 2011, the Company recognized alleged losses of $1,289,000 and $-0-, respectively. However, management cannot fully determine the total losses because there may be potential claims for losses that have not yet been determined. As of December 31, 2012, the Company had not accrued for any losses under the Indemnification Agreement. SecurityNational Mortgage was involved in discussions with Lehman Bank and Lehman Holdings concerning issues under the Indemnification Agreement. During the discussion period, monthly payments for December 2010 and January, February, March and April of 2011 totaling $625,000 were abated or deferred. | |
On May 11, 2011, SecurityNational Mortgage filed a complaint against Aurora Bank FSB, formerly known as Lehman Bank, and Aurora Loan Services in the United States District Court for the District of Utah because it had been unable to resolve certain issues under the Indemnification Agreement. The complaint alleges, among other things, material breach of the Indemnification Agreement, including a claim that neither Lehman Bank nor Aurora Loan Services owned mortgage loans sold by SecurityNational to justify the amount of payments demanded from, and made by SecurityNational Mortgage. As a result, SecurityNational Mortgage claims it is entitled to judgment of approximately $4,000,000 against Lehman Bank, as well as Aurora Loan Services to the extent of its involvement and complicity with Lehman Bank. The complaint also alleges a second claim for material breach of a section of the Indemnification Agreement that contains an alleged “sunset” provision and that the amount of the requested payments made was not justified under the “sunset” provision. | |
On June 8, 2011, Lehman Holdings, which had filed for bankruptcy in September 2008, filed a complaint against SecurityNational Mortgage in the United States District Court for the District of Utah. A Lehman Holdings’ subsidiary owns Lehman Bank. The complaint alleges that SecurityNational Mortgage sold loans to Lehman Bank, which were then sold to Lehman Holdings. The complaint additionally alleges that Lehman Bank and Aurora Loan Services assigned their rights and remedies under the loan purchase agreement, as well as the Indemnification Agreement to Lehman Holdings, which latter assignment purportedly took place on March 28, 2011. Lehman Holdings declared in a letter dated June 2, 2011 that the Indemnification Agreement was null and void except for losses previously released and discharged, which is disputed by SecurityNational Mortgage. | |
Lehman Holdings’ alleged claims are for damages for breach of contract and breach of warranty pursuant to a loan purchase agreement and Seller’s Guide. Based on claiming that the Indemnification Agreement is null and void pursuant to its lawsuit, Lehman Holdings has initially claimed damages in excess of $5,000,000. Prior to declaring the Indemnification Agreement null and void, Lehman Holdings claimed in a then recent billing statement under the terms of the Indemnification Agreement, that SecurityNational Mortgage owed approximately $3,745,000 for mortgage loan losses under the Indemnification Agreement. SecurityNational Mortgage strongly disagrees with the position of Lehman Holdings and, as set forth in its May 11, 2011 complaint, seeks affirmative relief of approximately $4,000,000 from Lehman Bank and Aurora Loan Services, which are related to Lehman Holdings. | |
On September 4, 2012, SecurityNational Mortgage filed a motion for summary judgment in its action against Lehman Bank and Aurora Loan Services on certain material issues, as well as against Lehman Holdings regarding its claims against SecurityNational Mortgage. Lehman Bank and Aurora Loan Services filed a cross motion for summary judgment as to the issues in SecurityNational Mortgage’s motion and, in the Lehman Holdings case, Lehman Holdings has requested that the Court allow a cross motion on the issues which are the subject of SecurityNational Mortgage’s September 4, 2012 motion. The cases are before two different federal judges. | |
On February 27, 2013, SecurityNational Mortgage’s motion for summary judgment against Lehman Bank and Aurora Loan Services and the related cross motion were heard by Judge David Nuffer of the United States District Court for the District of Utah. After an extensive hearing, Judge Nuffer requested that the parties prepare findings of fact in accordance with the Court’s earlier promulgated findings as modified at the hearing, and that each party submit proposed conclusions of law related to the motions. Judge Nuffer also said that he may request a further hearing on the matter. The motion and cross motion are under advisement. SecurityNational Mortgage’s motion in the Lehman Holdings case has been reset for hearing on January 14, 2014 before Judge Ted Stewart of the United States District Court for the District of Utah, with a trial, as may be necessary, set for March 17, 2014. | |
Other Contingencies and Commitments | |
The Company has entered into commitments to fund new residential construction loans. As of September 30, 2013, the Company’s commitments were $18,241,000 for these loans of which $9,886,000 had been funded. The Company will advance funds once the work has been completed and an independent inspection is made. The maximum loan commitment ranges between 50% and 80% of appraised value. The Company receives fees from the borrowers and the interest rate is generally 2% to 6.75% over the bank prime rate (3.25% as of September 30, 2013). Maturities range between six and twelve months. | |
The Company is not a party to any other material legal proceedings outside the ordinary course of business or to any other legal proceedings, which, if adversely determined, would have a material adverse effect on its financial condition or results of operations. | |
13_Acquisitions
13) Acquisitions | 9 Months Ended | |||
Sep. 30, 2013 | ||||
Notes | ' | |||
13) Acquisitions | ' | |||
13) Acquisitions | ||||
On August 31, 2011 the Company entered into a stock purchase agreement with North America Life to purchase all of the outstanding shares of common stock of Trans-Western Life Insurance Company (“Trans-Western”), a Texas domiciled insurance company and a wholly-owned subsidiary of North America Life. The Company completed the Stock Purchase Agreement on May 2, 2012. Purchase consideration paid was $494,207 which was the capital and surplus of Trans-Western at May 2, 2012. The Stock Purchase Agreement was approved by the Texas Insurance Department on March 20, 2012. All of Trans-Western’s insurance business had been ceded to North America Life, of which approximately 47% of the insurance in force had been assumed by the Company under the Coinsurance Agreement explained in note 12. As part of the stock purchase agreement, the Company recaptured the 47% of insurance in force. | ||||
The estimated fair values of the assets acquired and the liabilities assumed at the date of acquisition were as follows: | ||||
Cash | $ 313,616 | |||
Receivables, net | 186,487 | |||
Receivable from reinsurers | 7,422,999 | |||
Total assets acquired | 7,923,102 | |||
Future life, annuity, and other benefits | (7,422,999) | |||
Other liabilities and accrued expenses | (5,896) | |||
Total liabilities assumed | (7,428,895) | |||
Fair value of net assets acquired | $ 494,207 | |||
The following unaudited pro forma information has been prepared to present the results of operations of the Company assuming the acquisition of Trans-Western had occurred at the beginning of the nine months periods ended September 30, 2013 and 2012. This pro forma information is supplemental and does not necessarily present the operations of the Company that would have occurred had the acquisition occurred on those dates and may not reflect the operations that will occur in the future: | ||||
For the Nine Months Ended September 30 (unaudited) | ||||
2013 | 2012 | |||
Total revenues | $ 166,737,314 | $ 167,607,664 | ||
Net earnings | $ 6,099,002 | $ 9,246,699 | ||
Net earnings per Class A equivalent common share | $ 0.55 | $ 0.92 | ||
Net earnings per Class A equivalent common share assuming dilution | $ 0.52 | $ 0.92 | ||
14_Mortgage_Servicing_Rights
14) Mortgage Servicing Rights | 9 Months Ended | ||
Sep. 30, 2013 | |||
Notes | ' | ||
14) Mortgage Servicing Rights | ' | ||
14) Mortgage Servicing Rights | |||
The following is a summary of the MSR activity for the periods presented. | |||
As of September 30 | As of December 31 | ||
2013 | 2012 | ||
Amortized cost: | |||
Balance before valuation allowance at beginning of year | $ 2,797,470 | $ - | |
MSRs received as proceeds from loan sales | 1,851,221 | 2,797,470 | |
Amortization | (312,675) | - | |
Application of valuation allowance to write down MSRs with other than temporary impairment | - | - | |
Balance before valuation allowance at year end | $ 4,336,016 | $ 2,797,470 | |
Valuation allowance for impairment of MSRs: | |||
Balance at beginning of year | $ - | $ - | |
Additions | - | - | |
Application of valuation allowance to write down MSRs with other than temporary impairment | - | - | |
Balance at year end | $ - | $ - | |
Mortgage servicing rights, net | $ 4,336,016 | $ 2,797,470 | |
Estimated fair value of MSRs at year end | $ 4,336,016 | $ 2,797,470 | |
Amortization for 2012 was immaterial, and was not recorded. The following table summarizes the Company’s estimate of future amortization of its existing MSRs carried at amortized cost. This projection was developed using the assumptions made by management in its September 30, 2013 valuation of MSRs. The assumptions underlying the following estimate will change as market conditions and portfolio composition and behavior change, causing both actual and projected amortization levels to change over time. Therefore, the following estimates will change in a manner and amount not presently determinable by management. | |||
Estimated MSR Amortization | |||
2013 | $ 433,602 | ||
2014 | 433,602 | ||
2015 | 433,602 | ||
2016 | 433,602 | ||
2017 | 433,602 | ||
Thereafter | 2,168,006 | ||
Total | $ 4,336,016 | ||
The Company began to retain MSRs in the second quarter of 2012. Since the retained MSRs were relatively small, they were determined to be immaterial. However, the Company substantially increased its MSR retention in the fourth quarter 2012 and began to report these MSRs pursuant to the accounting policy discussed in Note 9 of the Notes to Consolidated Financial Statements. |
1_Basis_of_Presentation_Accoun
1) Basis of Presentation: Accounting Policy (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Policies | ' |
Accounting Policy | ' |
The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10 Q and Articles 8 and 10 of Regulation S X. Accordingly, they do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America for complete financial statements. These financial statements should be read in conjunction with the consolidated financial statements of the Company and notes thereto for the year ended December 31, 2012, included in the Company’s Annual Report on Form 10-K (file number 000-09341). In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. | |
1_Basis_of_Presentation_Use_of
1) Basis of Presentation: Use of Estimates Policy (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Policies | ' |
Use of Estimates Policy | ' |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. | |
The estimates susceptible to significant change are those used in determining the liability for future policy benefits and claims, those used in determining valuation allowances for mortgage loans on real estate and construction loans held for investment, those used in determining loan loss reserve, and those used in determining the estimated future costs for pre-need sales. Although some variability is inherent in these estimates, management believes the amounts provided are fairly stated in all material respects. |
3_Investments_Heldtomaturity_S
3) Investments: Held-to-maturity Securities (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
AsOfMarch312013Member | ' | ||||||||
Tables/Schedules | ' | ||||||||
Held-to-maturity Securities | ' | ||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||
September 30, 2013: | |||||||||
Fixed maturity securities held to maturity carried at amortized cost: | |||||||||
Bonds: | |||||||||
U.S. Treasury securities and obligations of U.S. Government agencies | $ 2,287,767 | $ 357,964 | $ - | $ 2,645,731 | |||||
Obligations of states and political subdivisions | 1,789,947 | 193,721 | (9,275) | 1,974,393 | |||||
Corporate securities including public utilities | 134,811,745 | 12,177,008 | (1,380,808) | 145,607,945 | |||||
Mortgage-backed securities | 5,132,905 | 240,671 | (8,847) | 5,364,729 | |||||
Redeemable preferred stock | 687,118 | 30,300 | (8,800) | 708,618 | |||||
Total fixed maturity securities held to maturity | $ 144,709,482 | $ 12,999,664 | $ (1,407,730) | $ 156,301,416 | |||||
AsOfDecember312012Member | ' | ||||||||
Tables/Schedules | ' | ||||||||
Held-to-maturity Securities | ' | ||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||
December 31, 2012: | |||||||||
Fixed maturity securities held to maturity carried at amortized cost: | |||||||||
Bonds: | |||||||||
U.S. Treasury securities and obligations of U.S. Government agencies | $ 2,602,589 | $ 514,572 | $ - | $ 3,117,161 | |||||
Obligations of states and political subdivisions | 2,040,277 | 285,241 | (3,982) | 2,321,536 | |||||
Corporate securities including public utilities | 118,285,147 | 16,230,468 | (607,322) | 133,908,293 | |||||
Mortgage-backed securities | 5,010,519 | 327,871 | (76,056) | 5,262,334 | |||||
Redeemable preferred stock | 1,510,878 | 98,087 | (1,200) | 1,607,765 | |||||
Total fixed maturity securities held to maturity | $ 129,449,410 | $ 17,456,239 | $ (688,560) | $ 146,217,089 | |||||
3_Investments_Availableforsale
3) Investments: Available-for-sale Securities (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
AsOfMarch312013Member | ' | ||||||||
Tables/Schedules | ' | ||||||||
Available-for-sale Securities | ' | ||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||
September 30, 2013: | |||||||||
Equity securities available for sale at estimated fair value: | |||||||||
Common stock: | |||||||||
Industrial, miscellaneous and all other | $ 5,583,487 | $ 365,385 | $ (819,232) | $ 5,129,640 | |||||
Total equity securities available for sale at estimated fair value | $ 5,583,487 | $ 365,385 | $ (819,232) | $ 5,129,640 | |||||
Mortgage loans on real estate and construction loans held for investment at amortized cost: | |||||||||
Residential | $ 47,668,697 | ||||||||
Residential construction | 9,885,587 | ||||||||
Commercial | 37,567,592 | ||||||||
Less: Allowance for loan losses | (4,150,360) | ||||||||
Total mortgage loans on real estate and construction loans held for investment | $ 90,971,516 | ||||||||
Real estate held for investment - net of depreciation | $ 40,610,932 | ||||||||
Other real estate owned held for investment - net of depreciation | 58,985,129 | ||||||||
Other real estate owned held for sale | - | ||||||||
Total real estate | $ 99,596,061 | ||||||||
Policy and other loans at amortized cost - net of allowance for doubtful accounts | $ 19,548,139 | ||||||||
Short-term investments at amortized cost | $ 18,457,264 | ||||||||
AsOfDecember312012Member | ' | ||||||||
Tables/Schedules | ' | ||||||||
Available-for-sale Securities | ' | ||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||
December 31, 2012: | |||||||||
Equity securities available for sale at estimated fair value: | |||||||||
Non-redeemable preferred stock | $ 20,281 | $ - | $ (1,486) | $ 18,795 | |||||
Common stock: | |||||||||
Industrial, miscellaneous and all other | 6,047,474 | 309,752 | (970,909) | 5,386,317 | |||||
Total equity securities available for sale at estimated fair value | $ 6,067,755 | $ 309,752 | $ (972,395) | $ 5,405,112 | |||||
Mortgage loans on real estate and construction loans held for investment at amortized cost: | |||||||||
Residential | $ 50,584,923 | ||||||||
Residential construction | 3,161,112 | ||||||||
Commercial | 34,956,031 | ||||||||
Less: Allowance for loan losses | (4,239,861) | ||||||||
Total mortgage loans on real estate and construction loans held for investment | $ 84,462,205 | ||||||||
Real estate held for investment - net of depreciation | $ 3,543,751 | ||||||||
Other real estate owned held for investment - net of depreciation | 55,027,669 | ||||||||
Other real estate owned held for sale | 5,682,610 | ||||||||
Total real estate | $ 64,254,030 | ||||||||
Policy and other loans at amortized cost - net of allowance for doubtful accounts | $ 20,188,516 | ||||||||
Short-term investments at amortized cost | $ 40,925,390 | ||||||||
3_Investments_Schedule_of_Unre
3) Investments: Schedule of Unrealized Loss on Investments (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Fixed Maturities | ' | ||||||||||
Tables/Schedules | ' | ||||||||||
Schedule of Unrealized Loss on Investments | ' | ||||||||||
Unrealized Losses for Less than Twelve Months | No. of Investment Positions | Unrealized Losses for More than Twelve Months | No. of Investment Positions | Total Unrealized Loss | |||||||
At September 30, 2013 | |||||||||||
Obligations of states and political subdivisions | $ 6,963 | 1 | $ 2,312 | 1 | $ 9,275 | ||||||
U.S. Treasury Securities And Obilgations of U.S. Government Agencies | $ - | 0 | $ - | 0 | - | ||||||
Corporate securities including public utilities | 1,154,057 | 74 | 226,751 | 7 | 1,380,808 | ||||||
Mortgage-backed securities | - | 0 | 8,847 | 1 | 8,847 | ||||||
Redeemable preferred stock | 8,800 | 1 | - | 0 | 8,800 | ||||||
Total unrealized losses | $ 1,169,820 | 76 | $ 237,910 | 9 | $ 1,407,730 | ||||||
Fair Value | $ 24,899,980 | $ 2,468,225 | $ 27,368,205 | ||||||||
At December 31, 2012 | |||||||||||
Obligations of states and political subdivisions | $ - | 0 | $ 3,982 | 2 | $ 3,982 | ||||||
Corporate securities including public utilities | 191,662 | 16 | 415,660 | 9 | 607,322 | ||||||
Mortgage-backed securities | - | 0 | 76,056 | 3 | 76,056 | ||||||
Redeemable preferred stock | 1,200 | 1 | - | 0 | 1,200 | ||||||
Total unrealized losses | $ 192,862 | 17 | $ 495,698 | 14 | $ 688,560 | ||||||
Fair Value | $ 4,609,268 | $ 3,972,091 | $ 8,581,359 | ||||||||
Equity Securities | ' | ||||||||||
Tables/Schedules | ' | ||||||||||
Schedule of Unrealized Loss on Investments | ' | ||||||||||
Unrealized Losses for Less than Twelve Months | No. of Investment Positions | Unrealized Losses for More than Twelve Months | No. of Investment Positions | Total Unrealized Losses | |||||||
At September 30, 2013 | |||||||||||
Industrial, miscellaneous and all other | $ 142,874 | 36 | $ 676,358 | 39 | $ 819,232 | ||||||
Total unrealized losses | $ 142,874 | 36 | $ 676,358 | 39 | $ 819,232 | ||||||
Fair Value | $ 1,394,029 | $ 1,312,798 | $ 2,706,827 | ||||||||
At December 31, 2012 | |||||||||||
Non-redeemable preferred stock | $ 686 | 1 | $ 800 | 1 | $ 1,486 | ||||||
Industrial, miscellaneous and all other | 236,293 | 39 | 734,616 | 44 | 970,909 | ||||||
Total unrealized losses | $ 236,979 | 40 | $ 735,416 | 45 | $ 972,395 | ||||||
Fair Value | $ 1,422,436 | $ 1,493,538 | $ 2,915,974 | ||||||||
3_Investments_Investments_Clas
3) Investments: Investments Classified by Contractual Maturity Date (Tables) | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Held-to-maturity Securities | ' | ||||
Tables/Schedules | ' | ||||
Investments Classified by Contractual Maturity Date | ' | ||||
Amortized Cost | Estimated Fair Value | ||||
Held to Maturity: | |||||
Due in 2013 | $ 500,000 | $ 531,645 | |||
Due in 2014 through 2017 | 20,761,134 | 22,545,722 | |||
Due in 2018 through 2022 | 45,332,609 | 50,475,862 | |||
Due after 2022 | 72,295,716 | 76,674,840 | |||
Mortgage-backed securities | 5,132,905 | 5,364,729 | |||
Redeemable preferred stock | 687,118 | 708,618 | |||
Total held to maturity | $ 144,709,482 | $ 156,301,416 | |||
Available-for-sale Securities | ' | ||||
Tables/Schedules | ' | ||||
Investments Classified by Contractual Maturity Date | ' | ||||
Amortized Cost | Estimated Fair Value | ||||
Available for Sale: | |||||
Due in 2013 | $ - | $ - | |||
Due in 2014 through 2017 | - | - | |||
Due in 2018 through 2022 | - | - | |||
Due after 2022 | - | - | |||
Non-redeemable preferred stock | - | - | |||
Common stock | 5,583,487 | 5,129,640 | |||
Total available for sale | $ 5,583,487 | $ 5,129,640 | |||
3_Investments_Gain_Loss_on_Inv
3) Investments: Gain (Loss) on Investments (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Tables/Schedules | ' | ||||||||
Gain (Loss) on Investments | ' | ||||||||
Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||
2013 | 2012 | 2013 | 2012 | ||||||
Fixed maturity securities held to maturity: | |||||||||
Gross realized gains | $ 60,330 | $ 266,801 | $ 75,734 | $ 404,056 | |||||
Gross realized losses | (20,796) | (1,292) | (35,964) | (1,626) | |||||
Other than temporary impairments | (30,000) | (45,000) | (90,000) | (135,000) | |||||
Securities available for sale: | |||||||||
Gross realized gains | 59,041 | 139,352 | 298,423 | 291,932 | |||||
Gross realized losses | - | - | (2,678) | (5,705) | |||||
Other than temporary impairments | - | - | - | - | |||||
Other assets: | |||||||||
Gross realized gains | 96,152 | 27,244 | 841,972 | 114,113 | |||||
Gross realized losses | - | (209,484) | - | (222,163) | |||||
Other than temporary impairments | - | (395,315) | (115,922) | (395,315) | |||||
Total | $ 164,727 | $ (217,694) | $ 971,565 | $ 50,292 | |||||
3_Investments_Schedule_of_Majo
3) Investments: Schedule of Major categories of net investment income (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Tables/Schedules | ' | |||||||
Schedule of Major categories of net investment income | ' | |||||||
Three Months Ended September 30 | Nine Months Ended September 30 | |||||||
2013 | 2012 | 2013 | 2012 | |||||
Fixed maturity securities | $ 2,131,804 | $ 1,949,665 | $ 6,141,648 | $ 5,803,282 | ||||
Equity securities | 53,123 | 65,839 | 157,612 | 197,563 | ||||
Mortgage loans on real estate | 1,151,536 | 1,404,396 | 3,189,020 | 4,492,457 | ||||
Real estate | 2,048,994 | 1,282,918 | 4,492,517 | 3,627,574 | ||||
Policy and other loans | 211,387 | 192,197 | 610,618 | 610,472 | ||||
Short-term investments, principally gains on sale of mortgage loans and other | 2,263,234 | 2,193,680 | 6,855,865 | 6,240,791 | ||||
Gross investment income | 7,860,078 | 7,088,695 | 21,447,280 | 20,972,139 | ||||
Investment expenses | (2,606,031) | (1,517,744) | (6,166,172) | (4,250,770) | ||||
Net investment income | $ 5,254,047 | $ 5,570,951 | $ 15,281,108 | $ 16,721,369 | ||||
3_Investments_Schedule_of_Allo
3) Investments: Schedule of Allowance for loan losses as a contra-asset account (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Tables/Schedules | ' | |||||||
Schedule of Allowance for loan losses as a contra-asset account | ' | |||||||
The following is a summary of the allowance for loan losses as a contra-asset account for the periods presented: | ||||||||
Allowance for Credit Losses and Recorded Investment in Mortgage Loans | ||||||||
Commercial | Residential | Residential Construction | Total | |||||
30-Sep-13 | ||||||||
Allowance for credit losses: | ||||||||
Beginning balance - January 1, 2013 | $ - | $ 4,193,674 | $ 46,187 | $ 4,239,861 | ||||
Charge-offs | - | (380,375) | - | (380,375) | ||||
Provision | 187,129 | (87,811) | 191,556 | 290,874 | ||||
Ending balance -September 30, 2013 | $ 187,129 | $ 3,725,488 | $ 237,743 | $ 4,150,360 | ||||
Ending balance: individually evaluated for impairment | $ - | $ 301,870 | $ 137,629 | $ 439,499 | ||||
Ending balance: collectively evaluated for impairment | $ 187,129 | $ 3,423,618 | $ 100,114 | $ 3,710,861 | ||||
Ending balance: loans acquired with deteriorated credit quality | $ - | $ - | $ - | $ - | ||||
Mortgage loans: | ||||||||
Ending balance | $ 37,567,592 | $ 47,668,697 | $ 9,885,587 | $ 95,121,876 | ||||
Ending balance: individually evaluated for impairment | $ - | $ 2,008,714 | $ 226,629 | $ 2,235,343 | ||||
Ending balance: collectively evaluated for impairment | $ 37,567,592 | $ 45,659,983 | $ 9,658,958 | $ 92,886,533 | ||||
Ending balance: loans acquired with deteriorated credit quality | $ - | $ - | $ - | $ - | ||||
31-Dec-12 | ||||||||
Allowance for credit losses: | ||||||||
Beginning balance - January 1, 2012 | $ - | $ 4,338,805 | $ 542,368 | $ 4,881,173 | ||||
Charge-offs | - | (560,699) | (514,442) | (1,075,141) | ||||
Provision | - | 415,568 | 18,261 | 433,829 | ||||
Ending balance - December 31, 2012 | $ - | $ 4,193,674 | $ 46,187 | $ 4,239,861 | ||||
Ending balance: individually evaluated for impairment | $ - | $ 692,199 | $ - | $ 692,199 | ||||
Ending balance: collectively evaluated for impairment | $ - | $ 3,501,475 | $ 46,187 | $ 3,547,662 | ||||
Ending balance: loans acquired with deteriorated credit quality | $ - | $ - | $ - | $ - | ||||
Mortgage loans: | ||||||||
Ending balance | $ 34,956,031 | $ 50,584,923 | $ 3,161,112 | $ 88,702,066 | ||||
Ending balance: individually evaluated for impairment | $ - | $ 4,692,517 | $ 1,346,126 | $ 6,038,643 | ||||
Ending balance: collectively evaluated for impairment | $ 34,956,031 | $ 45,892,406 | $ 1,814,986 | $ 82,663,423 | ||||
Ending balance: loans acquired with deteriorated credit quality | $ - | $ - | $ - | $ - | ||||
3_Investments_Schedule_of_agin
3) Investments: Schedule of aging of mortgage loans (Tables) | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Tables/Schedules | ' | |||||||||
Schedule of aging of mortgage loans | ' | |||||||||
The following is a summary of the aging of mortgage loans for the periods presented: | ||||||||||
Age Analysis of Past Due Mortgage Loans | ||||||||||
30-59 Days Past Due | 60-89 Days Past Due | Greater Than 90 Days (1) | In Foreclosure (1) | Total Past Due | Current | Total Mortgage Loans | Allowance for Loan Losses | Net Mortgage Loans | ||
30-Sep-13 | ||||||||||
Commercial | $ - | $ - | $ - | $ - | $ - | $ 37,567,592 | $ 37,567,592 | $ (187,129) | $ 37,380,463 | |
Residential | 1,938,382 | 968,459 | 8,117,303 | 2,008,714 | 13,032,858 | 34,635,839 | 47,668,697 | (3,725,488) | 43,943,209 | |
Residential Construction | - | - | 64,895 | 226,629 | 291,524 | 9,594,063 | 9,885,587 | (237,743) | 9,647,844 | |
Total | $ 1,938,382 | $ 968,459 | $ 8,182,198 | $ 2,235,343 | $ 13,324,382 | $ 81,797,494 | $ 95,121,876 | $ (4,150,360) | $ 90,971,516 | |
31-Dec-12 | ||||||||||
Commercial | $ 581,984 | $ - | $ 143,252 | $ - | $ 725,236 | $ 34,230,795 | $ 34,956,031 | $ - | $ 34,956,031 | |
Residential | 2,963,259 | 1,345,247 | 5,208,742 | 4,692,517 | 14,209,765 | 36,375,158 | 50,584,923 | (4,193,674) | 46,391,249 | |
Residential Construction | - | - | 288,468 | 1,346,126 | 1,634,594 | 1,526,518 | 3,161,112 | (46,187) | 3,114,925 | |
Total | $ 3,545,243 | $ 1,345,247 | $ 5,640,462 | $ 6,038,643 | $ 16,569,595 | $ 72,132,471 | $ 88,702,066 | $ (4,239,861) | $ 84,462,205 | |
(1) Interest income is not recognized on loans past due greater than 90 days or in foreclosure. | ||||||||||
3_Investments_Schedule_of_Impa
3) Investments: Schedule of Impaired Mortgage Loans (Tables) | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Tables/Schedules | ' | |||||||||
Schedule of Impaired Mortgage Loans | ' | |||||||||
Impaired Loans | ||||||||||
Recorded Investment | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | Interest Income Recognized | ||||||
30-Sep-13 | ||||||||||
With no related allowance recorded: | ||||||||||
Commercial | $ - | $ - | $ - | $ - | $ - | |||||
Residential | 8,117,303 | 8,117,303 | - | 8,117,303 | - | |||||
Residential construction | 64,895 | 64,895 | - | 64,895 | - | |||||
With an allowance recorded: | ||||||||||
Commercial | $ - | $ - | $ - | $ - | $ - | |||||
Residential | 2,008,714 | 2,008,714 | 301,870 | 2,008,714 | - | |||||
Residential construction | 226,629 | 226,629 | 137,629 | 226,629 | - | |||||
Total: | ||||||||||
Commercial | $ - | $ - | $ - | $ - | $ - | |||||
Residential | 10,126,017 | 10,126,017 | 301,870 | 10,126,017 | - | |||||
Residential construction | 291,524 | 291,524 | 137,629 | 291,524 | - | |||||
31-Dec-12 | ||||||||||
With no related allowance recorded: | ||||||||||
Commercial | $ 143,252 | $ 143,252 | $ - | $ 143,252 | $ - | |||||
Residential | 5,208,742 | 5,208,742 | - | 5,208,742 | - | |||||
Residential construction | 1,634,594 | 1,634,594 | - | 1,634,594 | - | |||||
With an allowance recorded: | ||||||||||
Commercial | $ - | $ - | $ - | $ - | $ - | |||||
Residential | 4,692,517 | 4,692,517 | 692,199 | 4,692,517 | - | |||||
Residential construction | - | - | - | - | - | |||||
Total: | ||||||||||
Commercial | $ 143,252 | $ 143,252 | $ - | $ 143,252 | $ - | |||||
Residential | 9,901,259 | 9,901,259 | 692,199 | 9,901,259 | - | |||||
Residential construction | 1,634,594 | 1,634,594 | - | 1,634,594 | - | |||||
3_Investments_ScheduleOfCredit
3) Investments: ScheduleOfCreditRiskOfMortgageLoansBasedOnPerformanceStatus (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Tables/Schedules | ' | |||||||||||||||
ScheduleOfCreditRiskOfMortgageLoansBasedOnPerformanceStatus: | ' | |||||||||||||||
The Company’s performing and non-performing mortgage loans were as follows: | ||||||||||||||||
Mortgage Loan Credit Exposure | ||||||||||||||||
Credit Risk Profile Based on Payment Activity | ||||||||||||||||
Commercial | Residential | Residential Construction | Total | |||||||||||||
September 30, 2013 | 31-Dec-12 | September 30, 2013 | 31-Dec-12 | September 30, 2013 | 31-Dec-12 | September 30, 2013 | 31-Dec-12 | |||||||||
Performing | $37,567,592 | $34,812,779 | $37,542,681 | $40,683,664 | $9,594,063 | $1,526,518 | $84,704,336 | $77,022,961 | ||||||||
Nonperforming | - | 143,252 | 10,126,016 | 9,901,259 | 291,524 | 1,634,594 | 10,417,540 | 11,679,105 | ||||||||
Total | $37,567,592 | $34,956,031 | $47,668,697 | $50,584,923 | $9,885,587 | $3,161,112 | $95,121,876 | $88,702,066 | ||||||||
3_Investments_Schedule_of_Mort
3) Investments: Schedule of Mortgate loans on a nonaccrual status (Tables) | 9 Months Ended | |||
Sep. 30, 2013 | ||||
Tables/Schedules | ' | |||
Schedule of Mortgate loans on a nonaccrual status | ' | |||
Mortgage Loans on Nonaccrual Status | ||||
As of September 30 | As of December 31 | |||
2013 | 2012 | |||
Commercial | $ - | $ 143,252 | ||
Residential | 10,126,016 | 9,901,259 | ||
Residential construction | 291,524 | 1,634,594 | ||
Total | $ 10,417,540 | $ 11,679,105 | ||
3_Investments_Schedule_of_loan
3) Investments: Schedule of loan loss reserve which is included in other liabilities and accrued expenses (Tables) | 9 Months Ended | |||
Sep. 30, 2013 | ||||
Tables/Schedules | ' | |||
Schedule of loan loss reserve which is included in other liabilities and accrued expenses | ' | |||
As of September 30 | As of December 31 | |||
2013 | 2012 | |||
Balance, beginning of period | $ 6,035,295 | $ 2,337,875 | ||
Provisions for losses | 1,614,769 | 4,053,051 | ||
Charge-offs | (418,382) | (355,631) | ||
Balance, end of period | $ 7,231,682 | $ 6,035,295 | ||
4_Stockbased_Compensation_Sche
4) Stock-based Compensation: Schedule of stock inventive plan changes (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Tables/Schedules | ' | ||||||||
Schedule of stock inventive plan changes | ' | ||||||||
A summary of the status of the Company’s stock incentive plans as of September 30, 2013, and the changes during the nine months ended September 30, 2013, is presented below: | |||||||||
Number of Class A Shares | Weighted Average Exercise Price | Number of Class C Shares(1) | Weighted Average Exercise Price(1) | ||||||
Outstanding at January 1, 2013 | 972,253 | $ 2.07 | 5,838,505 | $ 2.18 | |||||
Granted | - | - | - | - | |||||
Exercised | (482,866) | 2.15 | (1,906,022) | 2.24 | |||||
Cancelled | (76,032) | 3.36 | (638,138) | 3.33 | |||||
Outstanding at September 30, 2013 | 413,355 | $ 1.84 | 3,294,345 | $ 1.78 | |||||
As of September 30, 2013: | |||||||||
Options Exercisable | 412,040 | $ 1.83 | 3,294,345 | $ 1.78 | |||||
Weighted average contractual term of options | |||||||||
outstanding at September 30, 2013 | 5.95 years | 2.37 years | |||||||
Weighted average contractual term of options | |||||||||
exercisable at September 30, 2013 | 5.94 years | 2.37 years | |||||||
Aggregated intrinsic value of options | |||||||||
outstanding at September 30, 2013 | $1,748,854 | $1,409,984 | |||||||
Aggregated intrinsic value of options | |||||||||
exercisable at September 30, 2013 | $1,748,854 | $1,409,984 | |||||||
(1) Class “C” shares are converted to Class “A” shares on a 10 to 1 ratio. The Weighted Average Exercise Price is based on Class A Common shares. |
6_Earnings_Per_Share_Schedule_
6) Earnings Per Share: Schedule Of Calculation Of Numerator And Denominator In Earnings Per Share Table Text Block (Tables) | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Tables/Schedules | ' | |||||||||
Schedule Of Calculation Of Numerator And Denominator In Earnings Per Share Table Text Block | ' | |||||||||
Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||
2013 | 2012 | 2013 | 2012 | |||||||
Numerator: | ||||||||||
Net earnings | $1,266,491 | $3,990,046 | $6,099,002 | $9,245,262 | ||||||
Denominator: | ||||||||||
Basic weighted-average shares outstanding | 11,307,249 | 10,104,202 | 11,097,776 | 10,059,548 | ||||||
Effect of dilutive securities: | ||||||||||
Employee stock options | 520,803 | 896,570 | 568,904 | 13,404 | ||||||
Dilutive potential common shares | 520,803 | 896,570 | 568,904 | 13,404 | ||||||
Diluted weighted-average shares outstanding | 11,828,052 | 11,000,772 | 11,666,680 | 10,072,952 | ||||||
Basic net earnings per share | $0.11 | $0.39 | $0.55 | $0.92 | ||||||
Diluted net earnings per share | $0.11 | $0.36 | $0.52 | $0.92 | ||||||
7_Business_Segments_Schedule_o
7) Business Segments: Schedule of Revenues and Expenses by Reportable Segment (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Tables/Schedules | ' | ||||||||||
Schedule of Revenues and Expenses by Reportable Segment | ' | ||||||||||
Life Insurance | Cemetery/ Mortuary | Mortgage | Reconciling Items | Consolidated | |||||||
For the Three Months Ended | |||||||||||
30-Sep-13 | |||||||||||
Revenues from external customers | $ 17,341,200 | $ 2,959,197 | $ 30,252,394 | $ - | $ 50,552,791 | ||||||
Intersegment revenues | 2,334,416 | 369,121 | 67,637 | (2,771,174) | - | ||||||
Segment profit before income taxes | 1,102,552 | 12,757 | 848,975 | - | 1,964,284 | ||||||
For the Three Months Ended | |||||||||||
30-Sep-12 | |||||||||||
Revenues from external customers | $ 16,330,037 | $ 2,720,029 | $ 44,697,837 | $ - | $ 63,747,903 | ||||||
Intersegment revenues | 2,793,644 | 386,681 | 71,689 | (3,252,014) | - | ||||||
Segment profit before income taxes | 922,428 | (75,966) | 5,285,833 | - | 6,132,295 | ||||||
For the Nine Months Ended | |||||||||||
30-Sep-13 | |||||||||||
Revenues from external customers | $ 51,382,581 | $ 9,319,788 | $ 106,034,945 | $ - | $ 166,737,314 | ||||||
Intersegment revenues | 7,427,209 | 1,084,627 | 192,402 | (8,704,238) | - | ||||||
Segment profit before income taxes | 2,357,705 | 197,123 | 7,106,599 | - | 9,661,427 | ||||||
Identifiable Assets | 584,851,564 | 111,152,568 | 59,582,138 | (134,176,683) | 621,409,587 | ||||||
Goodwill | 391,848 | 285,191 | - | - | 677,039 | ||||||
For the Nine Months Ended | |||||||||||
30-Sep-12 | |||||||||||
Revenues from external customers | $ 51,438,923 | $ 8,410,186 | $ 107,750,228 | $ - | $ 167,599,337 | ||||||
Intersegment revenues | 6,954,477 | 1,144,239 | 222,978 | (8,321,694) | - | ||||||
Segment profit before income taxes | 3,814,289 | 73,126 | 9,609,850 | - | 13,497,265 | ||||||
Identifiable Assets | 521,801,393 | 112,072,090 | 46,079,386 | (119,191,969) | 560,760,900 | ||||||
Goodwill | 391,848 | 285,191 | - | - | 677,039 | ||||||
8_Fair_Value_of_Financial_Inst1
8): Fair Value of Financial Instruments: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
AsOfJune302013Member | ' | ||||||||
Tables/Schedules | ' | ||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | ' | ||||||||
Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||
Assets accounted for at fair value on a recurring basis | |||||||||
Common stock | $ 5,129,640 | $ 5,129,640 | $ - | $ - | |||||
Total securities available for sale | 5,129,640 | 5,129,640 | - | - | |||||
Restricted assets of cemeteries and mortuaries | 647,242 | 647,242 | - | - | |||||
Cemetery perpetual care trust investments | 634,657 | 634,657 | - | - | |||||
Derivatives - interest rate lock commitments | 2,719,681 | - | - | 2,719,681 | |||||
Total assets accounted for at fair value on a recurring basis | $ 9,131,220 | $ 6,411,539 | $ - | $ 2,719,681 | |||||
Liabilities accounted for at fair value on a recurring basis | |||||||||
Policyholder account balances | $ (48,232,865) | $ - | $ - | $ (48,232,865) | |||||
Future policy benefits - annuities | (64,775,274) | - | - | (64,775,274) | |||||
Derivatives - bank loan interest rate swaps | (65,881) | - | - | (65,881) | |||||
- call options | (129,110) | (129,110) | - | - | |||||
- interest rate lock commitments | (855,315) | - | - | (855,315) | |||||
Total liabilities accounted for at fair value on a recurring basis | $ (114,058,445) | $ (129,110) | $ - | $ (113,929,335) | |||||
AsOfDecember312012Member | ' | ||||||||
Tables/Schedules | ' | ||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | ' | ||||||||
Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||
Assets accounted for at fair value on a recurring basis | |||||||||
Non-redeemable preferred stock | $ 18,795 | $ 18,795 | $ - | $ - | |||||
Common stock | 5,386,317 | 5,386,317 | - | - | |||||
Total securities available for sale | 5,405,112 | 5,405,112 | - | - | |||||
Restricted assets of cemeteries and mortuaries | 585,412 | 585,412 | - | - | |||||
Cemetery perpetual care trust investments | 626,048 | 626,048 | - | - | |||||
Derivatives - interest rate lock commitments | 3,127,689 | - | - | 3,127,689 | |||||
Total assets accounted for at fair value on a recurring basis | $ 9,744,261 | $ 6,616,572 | $ - | $ 3,127,689 | |||||
Liabilities accounted for at fair value on a recurring basis | |||||||||
Policyholder account balances | $ (49,746,337) | $ - | $ - | $ (49,746,337) | |||||
Future policy benefits - annuities | (65,171,687) | - | - | (65,171,687) | |||||
Derivatives - bank loan interest rate swaps | (93,572) | - | - | (93,572) | |||||
- call options | (126,215) | (126,215) | - | - | |||||
- interest rate lock commitment | (166,224) | - | - | (166,224) | |||||
Total liabilities accounted for at fair value on a recurring basis | $ (115,304,035) | $ (126,215) | $ - | $ (115,177,820) | |||||
8_Fair_Value_of_Financial_Inst2
8): Fair Value of Financial Instruments: Schedule of Changes in the consolidated balance sheet line items measured using level 3 inputs (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
AsOfJune302013Member | ' | ||||||||
Tables/Schedules | ' | ||||||||
Schedule of Changes in the consolidated balance sheet line items measured using level 3 inputs | ' | ||||||||
Policyholder Account Balances | Future Policy Benefits - Annuities | Interest Rate Lock Commitments | Bank Loan Interest Rate Swaps | ||||||
Balance - December 31, 2012 | $ (49,746,337) | $ (65,171,687) | $ 2,961,465 | $ (93,572) | |||||
Total gains (losses): | |||||||||
Included in earnings | 1,513,472 | 396,413 | - | - | |||||
Included in other comprehensive income (loss) | - | - | (1,097,099) | 27,691 | |||||
Balance - September 30, 2013 | $ (48,232,865) | $ (64,775,274) | $ 1,864,366 | $ (65,881) | |||||
AsOfDecember312012Member | ' | ||||||||
Tables/Schedules | ' | ||||||||
Schedule of Changes in the consolidated balance sheet line items measured using level 3 inputs | ' | ||||||||
inputs: | |||||||||
Policyholder Account Balances | Future Policy Benefits - Annuities | Interest Rate Lock Commitments | Bank Loan Interest Rate Swaps | ||||||
Balance - December 31, 2011 | $ (50,926,020) | $ (65,281,586) | $ 1,694,541 | $ (117,812) | |||||
Total gains (losses): | |||||||||
Included in earnings | 1,179,683 | 109,899 | - | - | |||||
Included in other | |||||||||
comprehensive income | - | - | 1,266,924 | 24,240 | |||||
Balance - December 31, 2012 | $ (49,746,337) | $ (65,171,687) | $ 2,961,465 | $ (93,572) | |||||
8_Fair_Value_of_Financial_Inst3
8): Fair Value of Financial Instruments: Schedule of Fair Value Measurements, Nonrecurring (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
AsOfJune302013Member | ' | |||||||
Tables/Schedules | ' | |||||||
Schedule of Fair Value Measurements, Nonrecurring | ' | |||||||
Quoted Prices | ||||||||
in Active | Significant | Significant | ||||||
Markets for | Observable | Unobservable | ||||||
Identical Assets | Inputs | Inputs | ||||||
Total | (Level 1) | (Level 2) | (Level 3) | |||||
Assets accounted for at fair value on a nonrecurring basis | ||||||||
Mortgage servicing rights | $ 4,336,016 | - | - | $ 4,336,016 | ||||
Mortgage loans on real estate | 89,000 | - | - | 89,000 | ||||
Other real estate owned held for investment | 660,784 | - | - | 660,784 | ||||
Total assets accounted for at fair value on a nonrecurring basis | $ 5,085,800 | $ - | $ - | $ 5,085,800 | ||||
AsOfDecember312012Member | ' | |||||||
Tables/Schedules | ' | |||||||
Schedule of Fair Value Measurements, Nonrecurring | ' | |||||||
Quoted Prices | ||||||||
in Active | Significant | Significant | ||||||
Markets for | Observable | Unobservable | ||||||
Identical Assets | Inputs | Inputs | ||||||
Total | (Level 1) | (Level 2) | (Level 3) | |||||
Assets accounted for at fair value on a | ||||||||
nonrecurring basis | ||||||||
Mortgage servicing rights | $ 2,797,470 | - | - | $ 2,797,470 | ||||
Mortgage loans on real estate | 4,621,500 | - | - | 4,621,500 | ||||
Other real estate owned held for investment | 985,219 | - | - | 985,219 | ||||
Total assets accounted for at fair value on a | ||||||||
nonrecurring basis | $ 8,404,189 | $ - | $ - | $ 8,404,189 | ||||
11_Derivative_Investments_Sche
11) Derivative Investments: Schedule of Derivative Assets at Fair Value (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Tables/Schedules | ' | |||||||||||||||
Schedule of Derivative Assets at Fair Value | ' | |||||||||||||||
Fair Value of Derivative Instruments | ||||||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||||||
30-Sep-13 | 31-Dec-12 | 30-Sep-13 | 31-Dec-12 | |||||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | |||||||||
Derivatives designated as hedging instruments: | ||||||||||||||||
Interest rate lock and forward sales commitments | other assets | $2,719,681 | other assets | $3,127,689 | Other liabilities | $ 855,315 | Other liabilities | $ 166,224 | ||||||||
Call Options | -- | -- | -- | -- | Other liabilities | 129,110 | Other liabilities | 126,215 | ||||||||
Interest rate swaps | -- | -- | -- | -- | Bank loans payable | 65,881 | Bank loans payable | 93,572 | ||||||||
Total | $2,719,681 | $3,127,689 | $1,050,306 | $ 386,011 | ||||||||||||
11_Derivative_Investments_Sche1
11) Derivative Investments: Schedule of Gains and Losses on Derivatives (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Tables/Schedules | ' | ||||||||
Schedule of Gains and Losses on Derivatives | ' | ||||||||
Net Amount Gain (Loss) Recognized in OCI | Net Amount Gain (Loss) Recognized in OCI | ||||||||
Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||
Derivative - Cash Flow Hedging Relationships: | 2013 | 2012 | 2013 | 2012 | |||||
Interest Rate Lock Commitments | $ (1,616,310) | $ (3,313,971) | $ (1,097,099) | $ (412,438) | |||||
Interest Rate Swaps | 5,890 | 4,746 | 27,691 | 14,779 | |||||
Sub Total | (1,610,420) | (3,309,225) | (1,069,408) | (397,659) | |||||
Tax Effect | (628,356) | (1,125,137) | (270,380) | (137,421) | |||||
Total | $ (982,064) | $ (2,184,088) | $ (799,028) | $ (260,238) | |||||
13_Acquisitions_Estimated_fair
13) Acquisitions: Estimated fair values of the assets acquired and the liabilities assumed (Tables) | 9 Months Ended | |
Sep. 30, 2013 | ||
Tables/Schedules | ' | |
Estimated fair values of the assets acquired and the liabilities assumed | ' | |
Cash | $ 313,616 | |
Receivables, net | 186,487 | |
Receivable from reinsurers | 7,422,999 | |
Total assets acquired | 7,923,102 | |
Future life, annuity, and other benefits | (7,422,999) | |
Other liabilities and accrued expenses | (5,896) | |
Total liabilities assumed | (7,428,895) | |
Fair value of net assets acquired | $ 494,207 | |
13_Acquisitions_Unaudited_pro_
13) Acquisitions: Unaudited pro forma (Tables) | 9 Months Ended | |||
Sep. 30, 2013 | ||||
Tables/Schedules | ' | |||
Unaudited pro forma | ' | |||
For the Nine Months Ended September 30 (unaudited) | ||||
2013 | 2012 | |||
Total revenues | $ 166,737,314 | $ 167,607,664 | ||
Net earnings | $ 6,099,002 | $ 9,246,699 | ||
Net earnings per Class A equivalent common share | $ 0.55 | $ 0.92 | ||
Net earnings per Class A equivalent common share assuming dilution | $ 0.52 | $ 0.92 | ||
14_Mortgage_Servicing_Rights_S
14) Mortgage Servicing Rights: Schedule of mortgage servicing rights (Tables) | 9 Months Ended | ||
Sep. 30, 2013 | |||
Tables/Schedules | ' | ||
Schedule of mortgage servicing rights | ' | ||
The following is a summary of the MSR activity for the periods presented. | |||
As of September 30 | As of December 31 | ||
2013 | 2012 | ||
Amortized cost: | |||
Balance before valuation allowance at beginning of year | $ 2,797,470 | $ - | |
MSRs received as proceeds from loan sales | 1,851,221 | 2,797,470 | |
Amortization | (312,675) | - | |
Application of valuation allowance to write down MSRs with other than temporary impairment | - | - | |
Balance before valuation allowance at year end | $ 4,336,016 | $ 2,797,470 | |
Valuation allowance for impairment of MSRs: | |||
Balance at beginning of year | $ - | $ - | |
Additions | - | - | |
Application of valuation allowance to write down MSRs with other than temporary impairment | - | - | |
Balance at year end | $ - | $ - | |
Mortgage servicing rights, net | $ 4,336,016 | $ 2,797,470 | |
Estimated fair value of MSRs at year end | $ 4,336,016 | $ 2,797,470 | |
14_Mortgage_Servicing_Rights_S1
14) Mortgage Servicing Rights: Schedule of Mortgage Servicing Rights Amortization (Tables) | 9 Months Ended | ||
Sep. 30, 2013 | |||
Tables/Schedules | ' | ||
Schedule of Mortgage Servicing Rights Amortization | ' | ||
Estimated MSR Amortization | |||
2013 | $ 433,602 | ||
2014 | 433,602 | ||
2015 | 433,602 | ||
2016 | 433,602 | ||
2017 | 433,602 | ||
Thereafter | 2,168,006 | ||
Total | $ 4,336,016 |
3_Investments_Heldtomaturity_S1
3) Investments: Held-to-maturity Securities (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Amortized Cost | $144,709,482 | $129,449,410 |
Held-to-maturity Securities, Unrecognized Holding Gain | 12,999,664 | 17,456,239 |
Held-to-maturity Securities, Unrecognized Holding Loss | -1,407,730 | -688,560 |
HeldToMaturitySecuritiesEstimatedFairValue | 156,301,416 | 146,217,089 |
US Treasury and Government | ' | ' |
Amortized Cost | 2,287,767 | 2,602,589 |
Held-to-maturity Securities, Unrecognized Holding Gain | 357,964 | 514,572 |
HeldToMaturitySecuritiesEstimatedFairValue | 2,645,731 | 3,117,161 |
US States and Political Subdivisions Debt Securities | ' | ' |
Amortized Cost | 1,789,947 | 2,040,277 |
Held-to-maturity Securities, Unrecognized Holding Gain | 193,721 | 285,241 |
Held-to-maturity Securities, Unrecognized Holding Loss | -9,275 | -3,982 |
HeldToMaturitySecuritiesEstimatedFairValue | 1,974,393 | 2,321,536 |
Corporate Debt Securities | ' | ' |
Amortized Cost | 134,811,745 | 118,285,147 |
Held-to-maturity Securities, Unrecognized Holding Gain | 12,177,008 | 16,230,468 |
Held-to-maturity Securities, Unrecognized Holding Loss | -1,380,808 | -607,322 |
HeldToMaturitySecuritiesEstimatedFairValue | 145,607,945 | 133,908,293 |
Collateralized Mortgage Backed Securities | ' | ' |
Amortized Cost | 5,132,905 | 5,010,519 |
Held-to-maturity Securities, Unrecognized Holding Gain | 240,671 | 327,871 |
Held-to-maturity Securities, Unrecognized Holding Loss | -8,847 | -76,056 |
HeldToMaturitySecuritiesEstimatedFairValue | 5,364,729 | 5,262,334 |
Redeemable Preferred Stock | ' | ' |
Amortized Cost | 687,118 | 1,510,878 |
Held-to-maturity Securities, Unrecognized Holding Gain | 30,300 | 98,087 |
Held-to-maturity Securities, Unrecognized Holding Loss | -8,800 | -1,200 |
HeldToMaturitySecuritiesEstimatedFairValue | $708,618 | $1,607,765 |
3_Investments_Availableforsale1
3) Investments: Available-for-sale Securities (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Available-for-sale Securities, Amortized Cost Basis | $5,583,487 | ' |
AvailableForSaleSecuritiesEstimatedFairValue | 5,129,640 | ' |
Mortgage loans on real estate and construction | 90,971,516 | 84,462,205 |
Mortgage loans on real estate and construction, allowance for losses | -4,150,360 | -4,239,861 |
Real estate held for investment, net of depreciation | 40,610,932 | 3,543,751 |
Other real estate owned, held for investment, net of depreciation | 58,985,129 | 55,027,669 |
Other real estate owned held for sale | ' | 5,682,610 |
Real estate held | 99,596,061 | 64,254,030 |
Loans Held-for-sale, Consumer, Installment, Student | 19,548,139 | 20,188,516 |
Short-term investments at amortized cost | 18,457,264 | 40,925,390 |
Residential Mortgage | ' | ' |
Mortgage loans on real estate and construction | 47,668,697 | 50,584,923 |
Residential Construction | ' | ' |
Mortgage loans on real estate and construction | 9,885,587 | 3,161,112 |
Commercial Loan | ' | ' |
Mortgage loans on real estate and construction | 37,567,592 | 34,956,031 |
Industrial, miscellaneous and all other equity securities | ' | ' |
Available-for-sale Securities, Amortized Cost Basis | 5,583,487 | 6,047,474 |
Available-for-sale Securities, Gross Unrealized Gains | 365,385 | 309,752 |
AvailableForSaleSecuritiesGrossUnrealizedLosses | -819,232 | -970,909 |
AvailableForSaleSecuritiesEstimatedFairValue | 5,129,640 | 5,386,317 |
Equity Securities | ' | ' |
Available-for-sale Securities, Amortized Cost Basis | 5,583,487 | 6,067,755 |
Available-for-sale Securities, Gross Unrealized Gains | 365,385 | 309,752 |
AvailableForSaleSecuritiesGrossUnrealizedLosses | -819,232 | -972,395 |
AvailableForSaleSecuritiesEstimatedFairValue | 5,129,640 | 5,405,112 |
Nonredeemable Preferred Stock | ' | ' |
Available-for-sale Securities, Amortized Cost Basis | ' | 20,281 |
AvailableForSaleSecuritiesGrossUnrealizedLosses | ' | -1,486 |
AvailableForSaleSecuritiesEstimatedFairValue | ' | 18,795 |
Common Stock | ' | ' |
Available-for-sale Securities, Amortized Cost Basis | 5,583,487 | ' |
AvailableForSaleSecuritiesEstimatedFairValue | $5,129,640 | ' |
3_Investments_Schedule_of_Unre1
3) Investments: Schedule of Unrealized Loss on Investments (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Held-to-maturity Securities, Unrecognized Holding Loss | $1,407,730 | $688,560 |
Held-to-maturity Securities, Fair Value | 27,368,205 | 8,581,359 |
Available-for-sale Securities, Fair Value Disclosure | 2,706,827 | 2,915,974 |
US States and Political Subdivisions Debt Securities | ' | ' |
Held-to-maturity Securities, Unrecognized Holding Loss | 9,275 | 3,982 |
U.S. Treasury Securities | ' | ' |
Held-to-maturity Securities, Unrecognized Holding Loss | ' | 3,982 |
Corporate Debt Securities | ' | ' |
Held-to-maturity Securities, Unrecognized Holding Loss | 1,380,808 | 607,322 |
Collateralized Mortgage Backed Securities | ' | ' |
Held-to-maturity Securities, Unrecognized Holding Loss | 8,847 | 76,056 |
Redeemable Preferred Stock | ' | ' |
Held-to-maturity Securities, Unrecognized Holding Loss | 8,800 | 1,200 |
Industrial, miscellaneous and all other equity securities | ' | ' |
AvailableForSaleSecuritiesGrossUnrealizedLosses | 819,232 | 970,909 |
Equity Securities | ' | ' |
AvailableForSaleSecuritiesGrossUnrealizedLosses | 819,232 | 972,395 |
Nonredeemable Preferred Stock | ' | ' |
AvailableForSaleSecuritiesGrossUnrealizedLosses | ' | 1,486 |
Less than 12 months | ' | ' |
Held-to-maturity Securities, Unrecognized Holding Loss | 1,169,820 | 192,862 |
No. of Investment Positions | 76 | 17 |
Held-to-maturity Securities, Fair Value | 24,899,980 | 4,609,268 |
Available-for-sale Securities, Fair Value Disclosure | 1,394,029 | 1,422,436 |
Less than 12 months | US States and Political Subdivisions Debt Securities | ' | ' |
Held-to-maturity Securities, Unrecognized Holding Loss | 6,963 | ' |
No. of Investment Positions | 1 | ' |
Less than 12 months | U.S. Treasury Securities | ' | ' |
No. of Investment Positions | 0 | 0 |
Less than 12 months | Corporate Debt Securities | ' | ' |
Held-to-maturity Securities, Unrecognized Holding Loss | 1,154,057 | 191,662 |
No. of Investment Positions | 74 | 16 |
Less than 12 months | Collateralized Mortgage Backed Securities | ' | ' |
No. of Investment Positions | 0 | 0 |
Less than 12 months | Redeemable Preferred Stock | ' | ' |
Held-to-maturity Securities, Unrecognized Holding Loss | 8,800 | 1,200 |
No. of Investment Positions | 1 | 1 |
Less than 12 months | Industrial, miscellaneous and all other equity securities | ' | ' |
No. of Investment Positions | 36 | 39 |
AvailableForSaleSecuritiesGrossUnrealizedLosses | 142,874 | 236,293 |
Less than 12 months | Equity Securities | ' | ' |
No. of Investment Positions | 36 | 40 |
AvailableForSaleSecuritiesGrossUnrealizedLosses | 142,874 | 236,979 |
Less than 12 months | Nonredeemable Preferred Stock | ' | ' |
No. of Investment Positions | ' | 1 |
AvailableForSaleSecuritiesGrossUnrealizedLosses | ' | 686 |
More than 12 months | ' | ' |
Held-to-maturity Securities, Unrecognized Holding Loss | 237,910 | 495,698 |
No. of Investment Positions | 9 | 14 |
Held-to-maturity Securities, Fair Value | 2,468,225 | 3,972,091 |
Available-for-sale Securities, Fair Value Disclosure | 1,312,798 | 1,493,538 |
More than 12 months | US States and Political Subdivisions Debt Securities | ' | ' |
Held-to-maturity Securities, Unrecognized Holding Loss | 2,312 | ' |
No. of Investment Positions | 1 | ' |
More than 12 months | U.S. Treasury Securities | ' | ' |
Held-to-maturity Securities, Unrecognized Holding Loss | ' | 3,982 |
No. of Investment Positions | 0 | 2 |
More than 12 months | Corporate Debt Securities | ' | ' |
Held-to-maturity Securities, Unrecognized Holding Loss | 226,751 | 415,660 |
No. of Investment Positions | 7 | 9 |
More than 12 months | Collateralized Mortgage Backed Securities | ' | ' |
Held-to-maturity Securities, Unrecognized Holding Loss | 8,847 | 76,056 |
No. of Investment Positions | 1 | 3 |
More than 12 months | Redeemable Preferred Stock | ' | ' |
No. of Investment Positions | 0 | 0 |
More than 12 months | Industrial, miscellaneous and all other equity securities | ' | ' |
No. of Investment Positions | 39 | 44 |
AvailableForSaleSecuritiesGrossUnrealizedLosses | 676,358 | 734,616 |
More than 12 months | Equity Securities | ' | ' |
No. of Investment Positions | 39 | 45 |
AvailableForSaleSecuritiesGrossUnrealizedLosses | 676,358 | 735,416 |
More than 12 months | Nonredeemable Preferred Stock | ' | ' |
No. of Investment Positions | ' | 1 |
AvailableForSaleSecuritiesGrossUnrealizedLosses | ' | $800 |
3_Investments_Details
3) Investments (Details) (USD $) | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Details | ' | ' | ' |
Average market value over amortized cost | 95.10% | ' | 92.60% |
Other than Temporary Impairment, Credit Losses Recognized in Earnings, Period Increase (Decrease) | $90,000 | $135,000 | ' |
3_Investments_Equity_Securitie
3) Investments: Equity Securities - Additional (Details) | Sep. 30, 2013 | Dec. 31, 2012 |
Details | ' | ' |
Average Market Value of Security over initial investment | 76.80% | 75.00% |
3_Investments_Investments_Clas1
3) Investments: Investments Classified by Contractual Maturity Date (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Amortized Cost | $144,709,482 | $129,449,410 |
HeldToMaturitySecuritiesEstimatedFairValue | 156,301,416 | 146,217,089 |
Available-for-sale Securities, Amortized Cost Basis | 5,583,487 | ' |
AvailableForSaleSecuritiesEstimatedFairValue | 5,129,640 | ' |
Collateralized Mortgage Backed Securities | ' | ' |
Amortized Cost | 5,132,905 | 5,010,519 |
HeldToMaturitySecuritiesEstimatedFairValue | 5,364,729 | 5,262,334 |
Redeemable Preferred Stock | ' | ' |
Amortized Cost | 687,118 | 1,510,878 |
HeldToMaturitySecuritiesEstimatedFairValue | 708,618 | 1,607,765 |
Nonredeemable Preferred Stock | ' | ' |
Available-for-sale Securities, Amortized Cost Basis | ' | 20,281 |
AvailableForSaleSecuritiesEstimatedFairValue | ' | 18,795 |
Common Stock | ' | ' |
Available-for-sale Securities, Amortized Cost Basis | 5,583,487 | ' |
AvailableForSaleSecuritiesEstimatedFairValue | 5,129,640 | ' |
Due in 2013 | ' | ' |
Amortized Cost | 500,000 | ' |
HeldToMaturitySecuritiesEstimatedFairValue | 531,645 | ' |
DueIn2014Through2017Member | ' | ' |
Amortized Cost | 20,761,134 | ' |
HeldToMaturitySecuritiesEstimatedFairValue | 22,545,722 | ' |
DueIn2018Through2022Member | ' | ' |
Amortized Cost | 45,332,609 | ' |
HeldToMaturitySecuritiesEstimatedFairValue | 50,475,862 | ' |
DueAfter2022Member | ' | ' |
Amortized Cost | 72,295,716 | ' |
HeldToMaturitySecuritiesEstimatedFairValue | $76,674,840 | ' |
3_Investments_Gain_Loss_on_Inv1
3) Investments: Gain (Loss) on Investments (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Fixed maturity securities held to maturity: | $164,727 | ($217,694) | $971,565 | $50,292 |
Categories of Investments, Marketable Securities, Held-to-maturity Securities | ' | ' | ' | ' |
Gross Realized Gains | 60,330 | 266,801 | 75,734 | 404,056 |
Gross Realized Losses | -20,796 | -1,292 | -35,964 | -1,626 |
Other than Temporary Impairments | -30,000 | -45,000 | -90,000 | -135,000 |
Categories of Investments, Marketable Securities, Available-for-sale Securities | ' | ' | ' | ' |
Gross Realized Gains | 59,041 | 139,352 | 298,423 | 291,932 |
Gross Realized Losses | ' | ' | -2,678 | -5,705 |
Other Assets | ' | ' | ' | ' |
Gross Realized Gains | 96,152 | 27,244 | 841,972 | 114,113 |
Gross Realized Losses | ' | -209,484 | ' | -222,163 |
Other than Temporary Impairments | ' | ($395,315) | ($115,922) | ($395,315) |
3_Investments_Fixed_Maturity_S
3) Investments: Fixed Maturity Securities - Carrying Amount and Net Realized Gain (Details) (Categories of Investments, Marketable Securities, Held-to-maturity Securities, USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
Categories of Investments, Marketable Securities, Held-to-maturity Securities | ' | ' |
Net carrying amount for sales of securities | $949,859 | $2,174,300 |
Net realized gain related to sales of securities | $11,009 | $271,364 |
3_Investments_Schedule_of_Majo1
3) Investments: Schedule of Major categories of net investment income (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Gross investment income | $7,860,078 | $7,088,695 | $21,447,280 | $20,972,139 |
Investment Income, Investment Expense | -2,606,031 | -1,517,744 | -6,166,172 | -4,250,770 |
Net Investment Income | 5,254,047 | 5,570,951 | 15,281,108 | 16,721,369 |
Fixed Maturities | ' | ' | ' | ' |
Gross investment income | 2,131,804 | 1,949,665 | 6,141,648 | 5,803,282 |
Equity Securities | ' | ' | ' | ' |
Gross investment income | 53,123 | 65,839 | 157,612 | 197,563 |
Mortgage loans on real estate | ' | ' | ' | ' |
Gross investment income | 1,151,536 | 1,404,396 | 3,189,020 | 4,492,457 |
Real Estate | ' | ' | ' | ' |
Gross investment income | 2,048,994 | 1,282,918 | 4,492,517 | 3,627,574 |
Policy, Student and other loans | ' | ' | ' | ' |
Gross investment income | 211,387 | 192,197 | 610,618 | 610,472 |
Short-term investments, principally gains on sale of mortgage loans | ' | ' | ' | ' |
Gross investment income | $2,263,234 | $2,193,680 | $6,855,865 | $6,240,791 |
3_Investments_Net_Investment_I
3) Investments: Net Investment Income - Additional (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Net Investment Income | $5,254,047 | $5,570,951 | $15,281,108 | $16,721,369 | ' |
Securities on deposit for regulatory authorities | 8,884,387 | ' | 8,884,387 | ' | 9,190,012 |
Cemeteries and mortuaries | ' | ' | ' | ' | ' |
Net Investment Income | $93,801 | $78,855 | $259,810 | $247,844 | ' |
3_Investments_Mortgage_Loans_A
3) Investments: Mortgage Loans - Additional (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Details | ' | ' |
Mortgage loans on real estate balances, net of allowance for losses | $4,150,360 | $4,239,861 |
3_Investments_Schedule_of_Allo1
3) Investments: Schedule of Allowance for loan losses as a contra-asset account (Details) (USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
Financing Receivable, Allowance for Credit Losses, Beginning Balance | $4,239,861 | $4,881,173 |
Allowance for credit losses, Charge-offs | -380,375 | -1,075,141 |
Allowance for credit losses, Provision | 290,874 | 433,829 |
Financing Receivable, Allowance for Credit Losses, Ending Balance | 4,150,360 | 4,239,861 |
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment | 439,499 | 692,199 |
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment | 3,710,861 | 3,547,662 |
Mortgage loans | 95,121,876 | 88,702,066 |
Financing Receivable, Individually Evaluated for Impairment | 2,235,343 | 6,038,643 |
Financing Receivable, Collectively Evaluated for Impairment | 92,886,533 | 82,663,423 |
Commercial Loan | ' | ' |
Allowance for credit losses, Provision | 187,129 | ' |
Financing Receivable, Allowance for Credit Losses, Ending Balance | 187,129 | ' |
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment | 187,129 | ' |
Mortgage loans | 37,567,592 | 34,956,031 |
Financing Receivable, Collectively Evaluated for Impairment | 37,567,592 | 34,956,031 |
Residential Mortgage | ' | ' |
Financing Receivable, Allowance for Credit Losses, Beginning Balance | 4,193,674 | 4,338,805 |
Allowance for credit losses, Charge-offs | -380,375 | -560,699 |
Allowance for credit losses, Provision | -87,811 | 415,568 |
Financing Receivable, Allowance for Credit Losses, Ending Balance | 3,725,488 | 4,193,674 |
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment | 301,870 | 692,199 |
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment | 3,423,618 | 3,501,475 |
Mortgage loans | 47,668,697 | 50,584,923 |
Financing Receivable, Individually Evaluated for Impairment | 2,008,714 | 4,692,517 |
Financing Receivable, Collectively Evaluated for Impairment | 45,659,983 | 45,892,406 |
Residential Construction | ' | ' |
Financing Receivable, Allowance for Credit Losses, Beginning Balance | 46,187 | 542,368 |
Allowance for credit losses, Charge-offs | ' | -514,442 |
Allowance for credit losses, Provision | 191,556 | 18,261 |
Financing Receivable, Allowance for Credit Losses, Ending Balance | 237,743 | 46,187 |
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment | 137,629 | ' |
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment | 100,114 | 46,187 |
Mortgage loans | 9,885,587 | 3,161,112 |
Financing Receivable, Individually Evaluated for Impairment | 226,629 | 1,346,126 |
Financing Receivable, Collectively Evaluated for Impairment | $9,658,958 | $1,814,986 |
3_Investments_Schedule_of_agin1
3) Investments: Schedule of aging of mortgage loans (Details) (USD $) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2013 | Dec. 31, 2012 | |||
Mortgage Loans during period | $95,121,876 | $88,702,066 | ||
Mortgage Loans, Allowance for Loan Losses | -4,150,360 | -4,239,861 | ||
Mortgage Loans, Net | 90,971,516 | 84,462,205 | ||
Commercial Loan | ' | ' | ||
Mortgage Loans during period | 37,567,592 | 34,956,031 | ||
Mortgage Loans, Allowance for Loan Losses | -187,129 | ' | ||
Mortgage Loans, Net | 37,380,463 | 34,956,031 | ||
Residential Mortgage | ' | ' | ||
Mortgage Loans during period | 47,668,697 | 50,584,923 | ||
Mortgage Loans, Allowance for Loan Losses | -3,725,488 | -4,193,674 | ||
Mortgage Loans, Net | 43,943,209 | 46,391,249 | ||
Residential Construction | ' | ' | ||
Mortgage Loans during period | 9,885,587 | 3,161,112 | ||
Mortgage Loans, Allowance for Loan Losses | -237,743 | -46,187 | ||
Mortgage Loans, Net | 9,647,844 | 3,114,925 | ||
Past due 30 to 59 days | ' | ' | ||
Mortgage Loans during period | 1,938,382 | 3,545,243 | ||
Past due 30 to 59 days | Commercial Loan | ' | ' | ||
Mortgage Loans during period | ' | 581,984 | ||
Past due 30 to 59 days | Residential Mortgage | ' | ' | ||
Mortgage Loans during period | 1,938,382 | 2,963,259 | ||
Past due 60 to 89 days | ' | ' | ||
Mortgage Loans during period | 968,459 | 1,345,247 | ||
Past due 60 to 89 days | Residential Mortgage | ' | ' | ||
Mortgage Loans during period | 968,459 | 1,345,247 | ||
Past due 90 or more days | ' | ' | ||
Mortgage Loans during period | 8,182,198 | [1] | 5,640,462 | [1] |
Past due 90 or more days | Commercial Loan | ' | ' | ||
Mortgage Loans during period | ' | 143,252 | [1] | |
Past due 90 or more days | Residential Mortgage | ' | ' | ||
Mortgage Loans during period | 8,117,303 | [1] | 5,208,742 | [1] |
Past due 90 or more days | Residential Construction | ' | ' | ||
Mortgage Loans during period | 64,895 | [1] | 288,468 | [1] |
In Foreclosure | ' | ' | ||
Mortgage Loans during period | 2,235,343 | [1] | 6,038,643 | [1] |
In Foreclosure | Residential Mortgage | ' | ' | ||
Mortgage Loans during period | 2,008,714 | [1] | 4,692,517 | [1] |
In Foreclosure | Residential Construction | ' | ' | ||
Mortgage Loans during period | 226,629 | [1] | 1,346,126 | [1] |
Total Past Due | ' | ' | ||
Mortgage Loans during period | 13,324,382 | 16,569,595 | ||
Total Past Due | Commercial Loan | ' | ' | ||
Mortgage Loans during period | ' | 725,236 | ||
Total Past Due | Residential Mortgage | ' | ' | ||
Mortgage Loans during period | 13,032,858 | 14,209,765 | ||
Total Past Due | Residential Construction | ' | ' | ||
Mortgage Loans during period | 291,524 | 1,634,594 | ||
Current | ' | ' | ||
Mortgage Loans during period | 81,797,494 | 72,132,471 | ||
Current | Commercial Loan | ' | ' | ||
Mortgage Loans during period | 37,567,592 | 34,230,795 | ||
Current | Residential Mortgage | ' | ' | ||
Mortgage Loans during period | 34,635,839 | 36,375,158 | ||
Current | Residential Construction | ' | ' | ||
Mortgage Loans during period | $9,594,063 | $1,526,518 | ||
[1] | There was not any interest income recognized on loans past due greater than 90 days or in foreclosure. |
3_Investments_Schedule_of_Impa1
3) Investments: Schedule of Impaired Mortgage Loans (Details) (USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
Commercial Loan | ' | ' |
Impaired Financing Receivable, with No Related Allowance, Recorded Investment | ' | $143,252 |
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance | ' | 143,252 |
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment | ' | 143,252 |
Impaired Financing Receivable, Average Recorded Investment | ' | 143,252 |
Impaired Financing Receivable, Unpaid Principal Balance | ' | 143,252 |
Residential Mortgage | ' | ' |
Impaired Financing Receivable, with No Related Allowance, Recorded Investment | 8,117,303 | 5,208,742 |
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance | 8,117,303 | 5,208,742 |
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment | 8,117,303 | 5,208,742 |
Impaired Financing Receivable, with Related Allowance, Recorded Investment | 2,008,714 | 4,692,517 |
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance | 2,008,714 | 4,692,517 |
Impaired Financing Receivable, Related Allowance | 301,870 | 692,199 |
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment | 2,008,714 | 4,692,517 |
Impaired Financing Receivable, Average Recorded Investment | 10,126,017 | 9,901,259 |
Impaired Financing Receivable, Unpaid Principal Balance | 10,126,017 | 9,901,259 |
Residential Construction | ' | ' |
Impaired Financing Receivable, with No Related Allowance, Recorded Investment | 64,895 | 1,634,594 |
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance | 64,895 | 1,634,594 |
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment | 64,895 | 1,634,594 |
Impaired Financing Receivable, with Related Allowance, Recorded Investment | 226,629 | ' |
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance | 226,629 | ' |
Impaired Financing Receivable, Related Allowance | 137,629 | ' |
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment | 226,629 | ' |
Impaired Financing Receivable, Average Recorded Investment | 291,524 | 1,634,594 |
Impaired Financing Receivable, Unpaid Principal Balance | $291,524 | $1,634,594 |
3_Investments_ScheduleOfCredit1
3) Investments: ScheduleOfCreditRiskOfMortgageLoansBasedOnPerformanceStatus (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Mortgage loans | $95,121,876 | $88,702,066 |
Performing Financing Receivable | ' | ' |
Mortgage loans | 84,704,336 | 77,022,961 |
Nonperforming Financing Receivable | ' | ' |
Mortgage loans | 10,417,540 | 11,679,105 |
Commercial Loan | ' | ' |
Mortgage loans | 37,567,592 | 34,956,031 |
Commercial Loan | Performing Financing Receivable | ' | ' |
Mortgage loans | 37,567,592 | 34,812,779 |
Commercial Loan | Nonperforming Financing Receivable | ' | ' |
Mortgage loans | ' | 143,252 |
Residential Mortgage | ' | ' |
Mortgage loans | 47,668,697 | 50,584,923 |
Residential Mortgage | Performing Financing Receivable | ' | ' |
Mortgage loans | 37,542,681 | 40,683,664 |
Residential Mortgage | Nonperforming Financing Receivable | ' | ' |
Mortgage loans | 10,126,016 | 9,901,259 |
Residential Construction | ' | ' |
Mortgage loans | 9,885,587 | 3,161,112 |
Residential Construction | Performing Financing Receivable | ' | ' |
Mortgage loans | 9,594,063 | 1,526,518 |
Residential Construction | Nonperforming Financing Receivable | ' | ' |
Mortgage loans | $291,524 | $1,634,594 |
3_Investments_Summary_of_Inter
3) Investments: Summary of Interest not accrued on non-performing mortgage loans (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Details | ' | ' |
Interest not acrued on non-performing loans | $1,688,713 | $1,925,000 |
3_Investments_Schedule_of_Mort1
3) Investments: Schedule of Mortgate loans on a nonaccrual status (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | $10,417,540 | $11,679,105 |
Commercial Loan | ' | ' |
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | ' | 143,252 |
Residential Mortgage | ' | ' |
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | 10,126,016 | 9,901,259 |
Residential Construction | ' | ' |
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | $291,524 | $1,634,594 |
3_Investments_Schedule_of_loan1
3) Investments: Schedule of loan loss reserve which is included in other liabilities and accrued expenses (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Details | ' | ' | ' |
Loan loss reserve, balance at start of period | $7,231,682 | $6,035,295 | $2,337,875 |
Loan loss reserve, Provisions for losses | 1,614,769 | 4,053,051 | ' |
Loan loss reserve, Charge-offs | -418,382 | -355,631 | ' |
Loan loss reserve, balance at end of period | $7,231,682 | $6,035,295 | $2,337,875 |
4_Stockbased_Compensation_Deta
4) Stock-based Compensation (Details) (USD $) | 6 Months Ended | 9 Months Ended | ||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 07, 2012 | Apr. 13, 2012 | |
Details | ' | ' | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs, Capitalized Amount | $4,122 | $93,074 | $66,711 | $187,510 | ' | ' |
Fair value related to stock based compensation | ' | ' | ' | ' | 15,920 | 219,881 |
Total intrinsic value | ' | ' | $2,170,468 | $92,409 | ' | ' |
4_Stockbased_Compensation_Sche1
4) Stock-based Compensation: Schedule of stock inventive plan changes (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2012 | |
Class A Common Stock | ' | ' |
Shares, Outstanding | 413,355 | 972,253 |
Shares outstanding | $1.84 | $2.07 |
Shares Exercised | -482,866 | ' |
Per Share Shares exercised | $2.15 | ' |
Shares Cancelled | -76,032 | ' |
Per Share Shares cancelled | $3.36 | ' |
Options Exercisable | 412,040 | ' |
Options exercisable | $1.83 | ' |
Weighted average contractual term of options outstanding | '5.95 years | ' |
Weighted average contractual term of options exercisable | '5.94 years | ' |
Aggregated intrinsic value of options outstanding | $1,748,854 | ' |
Aggregated intrinsic value of options exercisable | 1,748,854 | ' |
Class C Common Stock | ' | ' |
Shares, Outstanding | 3,294,345 | 5,838,505 |
Shares outstanding | $1.78 | $2.18 |
Shares Exercised | -1,906,022 | ' |
Per Share Shares exercised | $2.24 | ' |
Shares Cancelled | -638,138 | ' |
Per Share Shares cancelled | $3.33 | ' |
Options Exercisable | 3,294,345 | ' |
Options exercisable | $1.78 | ' |
Weighted average contractual term of options outstanding | '2.37 years | ' |
Weighted average contractual term of options exercisable | '2.37 years | ' |
Aggregated intrinsic value of options outstanding | 1,409,984 | ' |
Aggregated intrinsic value of options exercisable | $1,409,984 | ' |
6_Earnings_Per_Share_Schedule_1
6) Earnings Per Share: Schedule Of Calculation Of Numerator And Denominator In Earnings Per Share Table Text Block (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Details | ' | ' | ' | ' |
Net earnings | $1,266,491 | $3,990,046 | $6,099,002 | $9,245,262 |
Weighted-average Class A equivalent common share outstanding (1) | 11,307,249 | 10,104,202 | 11,097,776 | 10,059,548 |
GrantOfEmployeeStockOptions | $520,803 | $896,570 | $568,904 | $13,404 |
Pro Forma Weighted Average Shares Outstanding, Diluted | 520,803 | 896,570 | 568,904 | 13,404 |
Weighted-average Class A equivalent common shares outstanding-assuming dilution (1) | 11,828,052 | 11,000,772 | 11,666,680 | 10,072,952 |
Net earnings per Class A Equivalent common share (1) | $0.11 | $0.39 | $0.55 | $0.92 |
Net earnings per Class A Equivalent common share-assuming dilution (1) | $0.11 | $0.36 | $0.52 | $0.92 |
7_Business_Segments_Schedule_o1
7) Business Segments: Schedule of Revenues and Expenses by Reportable Segment (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Revenue from customers | $50,552,791 | $63,747,903 | $166,737,314 | $167,599,337 | ' |
SegmentReportingInformationIncomeLossBeforeIncomeTaxes | 1,964,284 | 6,132,295 | 9,661,427 | 13,497,265 | ' |
Identifiable Assets | 621,409,587 | 560,760,900 | 621,409,587 | 560,760,900 | ' |
Goodwill | 677,039 | 677,039 | 677,039 | 677,039 | 677,039 |
Life Insurance Segment | ' | ' | ' | ' | ' |
Revenue from customers | 17,341,200 | 16,330,037 | 51,382,581 | 51,438,923 | ' |
SegmentReportingInformationIntersegmentRevenue | 2,334,416 | 2,793,644 | 7,427,209 | 6,954,477 | ' |
SegmentReportingInformationIncomeLossBeforeIncomeTaxes | 1,102,552 | 922,428 | 2,357,705 | 3,814,289 | ' |
Identifiable Assets | 584,851,564 | 521,801,393 | 584,851,564 | 521,801,393 | ' |
Goodwill | 391,848 | 391,848 | 391,848 | 391,848 | ' |
Cemetery and Mortuary | ' | ' | ' | ' | ' |
Revenue from customers | 2,959,197 | 2,720,029 | 9,319,788 | 8,410,186 | ' |
SegmentReportingInformationIntersegmentRevenue | 369,121 | 386,681 | 1,084,627 | 1,144,239 | ' |
SegmentReportingInformationIncomeLossBeforeIncomeTaxes | 12,757 | -75,966 | 197,123 | 73,126 | ' |
Identifiable Assets | 111,152,568 | 112,072,090 | 111,152,568 | 112,072,090 | ' |
Goodwill | 285,191 | 285,191 | 285,191 | 285,191 | ' |
Mortgage | ' | ' | ' | ' | ' |
Revenue from customers | 30,252,394 | 44,697,837 | 106,034,945 | 107,750,228 | ' |
SegmentReportingInformationIntersegmentRevenue | 67,637 | 71,689 | 192,402 | 222,978 | ' |
SegmentReportingInformationIncomeLossBeforeIncomeTaxes | 848,975 | 5,285,833 | 7,106,599 | 9,609,850 | ' |
Identifiable Assets | 59,582,138 | 46,079,386 | 59,582,138 | 46,079,386 | ' |
Significant Reconciling Items | ' | ' | ' | ' | ' |
SegmentReportingInformationIntersegmentRevenue | -2,771,174 | -3,252,014 | -8,704,238 | -8,321,694 | ' |
Identifiable Assets | ($134,176,683) | ($119,191,969) | ($134,176,683) | ($119,191,969) | ' |
8_Fair_Value_of_Financial_Inst4
8): Fair Value of Financial Instruments: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Available-for-sale Securities | $5,129,640 | $5,405,112 |
Restricted assets of cemeteries and mortuaries | 647,242 | 585,412 |
Cemetery perpetual care trust investments | 634,657 | 626,048 |
Derivatives - interest rate lock commitments | 2,719,681 | 3,127,689 |
Assets, Fair Value Disclosure | 9,131,220 | 9,744,261 |
Policyholder account balances | -48,232,865 | -49,746,337 |
Future policy benefits - annuities | -64,775,274 | -65,171,687 |
Derivatives - bank loan interest rate swaps | -65,881 | -93,572 |
Derivatives - bank loan interest rate swaps, Call Options | -129,110 | -126,215 |
Derivatives - bank loan interest rate swaps, Interest rate lock commitments | -855,315 | -166,224 |
Liabilities accounted for at fair value | -114,058,445 | -115,304,035 |
Non-redeemable preferred stock | ' | 18,795 |
Trading Securities, Equity | ' | 5,386,317 |
Fair Value, Inputs, Level 1 | ' | ' |
Available-for-sale Securities | 5,129,640 | 5,405,112 |
Restricted assets of cemeteries and mortuaries | 647,242 | 585,412 |
Cemetery perpetual care trust investments | 634,657 | 626,048 |
Assets, Fair Value Disclosure | 6,411,539 | 6,616,572 |
Derivatives - bank loan interest rate swaps, Call Options | -129,110 | -126,215 |
Liabilities accounted for at fair value | -129,110 | -126,215 |
Non-redeemable preferred stock | ' | 18,795 |
Trading Securities, Equity | ' | 5,386,317 |
Fair Value, Inputs, Level 3 | ' | ' |
Derivatives - interest rate lock commitments | 2,719,681 | 3,127,689 |
Assets, Fair Value Disclosure | 2,719,681 | 3,127,689 |
Policyholder account balances | -48,232,865 | -49,746,337 |
Future policy benefits - annuities | -64,775,274 | -65,171,687 |
Derivatives - bank loan interest rate swaps | -65,881 | -93,572 |
Derivatives - bank loan interest rate swaps, Interest rate lock commitments | -855,315 | -166,224 |
Liabilities accounted for at fair value | ($113,929,335) | ($115,177,820) |
8_Fair_Value_of_Financial_Inst5
8): Fair Value of Financial Instruments: Schedule of Changes in the consolidated balance sheet line items measured using level 3 inputs (Details) (USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
Policyholder Account Balances | ' | ' |
Fair Value Balance | ($49,746,337) | ($50,926,020) |
Fair Value, Losses (Gains) included in earnings | 1,513,472 | 1,179,683 |
Fair Value Balance | -48,232,865 | -49,746,337 |
Future Policy Benefits - Annuities | ' | ' |
Fair Value Balance | -65,171,687 | -65,281,586 |
Fair Value, Losses (Gains) included in earnings | 396,413 | 109,899 |
Fair Value Balance | -64,775,274 | -65,171,687 |
Interest Rate Lock Commitments | ' | ' |
Fair Value Balance | 2,961,465 | 1,694,541 |
Fair Value, Losses (Gains) included in other comprehensive income | -1,097,099 | 1,266,924 |
Fair Value Balance | 1,864,366 | 2,961,465 |
Bank Loan Interest Rate Swaps | ' | ' |
Fair Value Balance | -93,572 | -117,812 |
Fair Value, Losses (Gains) included in other comprehensive income | 27,691 | 24,240 |
Fair Value Balance | ($65,881) | ($93,572) |
8_Fair_Value_of_Financial_Inst6
8): Fair Value of Financial Instruments: Schedule of Fair Value Measurements, Nonrecurring (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Mortgage servicing rights | $4,336,016 | $2,797,470 |
Mortgage loans on real estate | 89,000 | 4,621,500 |
Other real estate owned held for investment | 660,784 | 985,219 |
Assets, Fair Value Disclosure, Nonrecurring | 5,085,800 | 8,404,189 |
Fair Value, Inputs, Level 3 | ' | ' |
Mortgage servicing rights | 4,336,016 | 2,797,470 |
Mortgage loans on real estate | 89,000 | 4,621,500 |
Other real estate owned held for investment | 660,784 | 985,219 |
Assets, Fair Value Disclosure, Nonrecurring | $5,085,800 | $8,404,189 |
9_Other_Business_Activity_Deta
9) Other Business Activity (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Details | ' | ' |
Mortgages originated and sold | ($1,692,112,000) | ($1,737,214,000) |
AmountAvailableToOriginateLoansUnderWellsFargoAgreement | 75,000,000 | ' |
AmountAvailableToOriginateLoansUnderUBS Agreement | 40,000,000 | ' |
Interest accuring on a portion of the mortgage loans - range | '2.5% to 2.75% over the 30-day LIBOR rate | ' |
Mortgage loans in which settlements with third party investors were still pending | $125,119,000 | ' |
11_Derivative_Investments_Deta
11) Derivative Investments (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Details | ' | ' |
Fair value of outstanding call options | $129,110 | $126,215 |
11_Derivative_Investments_Sche2
11) Derivative Investments: Schedule of Derivative Assets at Fair Value (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Details | ' | ' |
Fair Value of Asset Derivatives, Interest rate lock and forward sales commitments | $2,719,681 | $3,127,689 |
Fair Value of Liability Derivatives, Interest rate lock and forward sales commitments | 855,315 | 166,224 |
Fair Value of Liability Derivatives, Call Options | 129,110 | 126,215 |
Fair Value of Liability Derivatives, Interest Rate Swaps | 65,881 | 93,572 |
Fair Value of Asset Derivatives, Total | 2,719,681 | 3,127,689 |
Fair Value of Liability Derivatives, Total | $1,050,306 | $386,011 |
11_Derivative_Investments_Sche3
11) Derivative Investments: Schedule of Gains and Losses on Derivatives (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Details | ' | ' | ' | ' |
Gain (Loss) on Derivatives, Interest Rate Lock Commitments | ($1,616,310) | ($3,313,971) | ($1,097,099) | ($412,438) |
Gain (Loss) on Derivatives, Interest Rate Swaps | 5,890 | 4,746 | 27,691 | 14,779 |
GainLossOnDerivativesSubTotal | -1,610,420 | -3,309,225 | -1,069,408 | -397,659 |
TaxEffect-GainLossOnDerivatives | -628,356 | -1,125,137 | -270,380 | -137,421 |
Gain (Loss) on Derivatives, Total | ($982,064) | ($2,184,088) | ($799,028) | ($260,238) |
12_Reinsurance_Commitments_and1
12) Reinsurance, Commitments and Contingencies: Mortgage Loan Loss Settlements (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Amounts accrued for loan losses | $434,000 | $1,703,000 | $1,615,000 | $3,238,000 | ' |
Funds reserved and accrued to settle investor related claims | 7,232,000 | ' | 7,232,000 | ' | 6,035,000 |
Wells Fargo | ' | ' | ' | ' | ' |
Initial Settlement Amount Paid | ' | ' | $4,300,000 | ' | ' |
12_Reinsurance_Commitments_and2
12) Reinsurance, Commitments and Contingencies: Other Contingencies and Commitments (Details) (USD $) | Sep. 30, 2013 |
Details | ' |
Commitments to fund new residential construction loans | $18,241,000 |
Commitments to fund new residential construction loans funded | $9,886,000 |
13_Acquisitions_Estimated_fair1
13) Acquisitions: Estimated fair values of the assets acquired and the liabilities assumed (Details) (USD $) | Aug. 31, 2011 |
Details | ' |
Estimated fair value of Cash | $313,616 |
Estimated fair value of Receivables, Net | 186,487 |
Estimated fair value of Receivable from reinsurers | 7,422,999 |
Total assets acquired | 7,923,102 |
Future life, annuity, and other benefits | -7,422,999 |
Estimated fair value of Other liabilities and accrued expensesbenefits | -5,896 |
Estimated fair value of Total liabilities assumed | -7,428,895 |
Estimated fair value of net assets aquired | $494,207 |
13_Acquisitions_Unaudited_pro_1
13) Acquisitions: Unaudited pro forma (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Details | ' | ' |
ProForma Revenues | $166,737,314 | $167,607,664 |
ProForma Net Earnings | 6,099,002 | 9,246,699 |
ProForma Net Earnings per Class A equivalent common share | $0.55 | $0.92 |
ProForma Net Earnings per Class A equivalent common share assuming dilution | $0.52 | $0.92 |
14_Mortgage_Servicing_Rights_S2
14) Mortgage Servicing Rights: Schedule of mortgage servicing rights (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2012 | |
Details | ' | ' |
MSRs received as proceeds from loan sales | $1,851,221 | ' |
MSR Amortization | -312,675 | ' |
MortgageServicingRights | $4,336,016 | $2,797,470 |
14_Mortgage_Servicing_Rights_S3
14) Mortgage Servicing Rights: Schedule of Mortgage Servicing Rights Amortization (Details) (USD $) | 12 Months Ended | |||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2018 | |
Details | ' | ' | ' | ' | ' | ' |
Amortization of Mortgage Servicing Rights (MSRs) | $433,602 | $433,602 | $433,602 | $433,602 | $433,602 | ' |
Amortization of Mortgage Servicing Rights Thereafter | ' | ' | ' | ' | ' | $2,168,006 |