Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 15-May-15 | |
Entity Registrant Name | SECURITY NATIONAL FINANCIAL CORP | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Entity Central Index Key | 318673 | |
Current Fiscal Year End Date | -19 | |
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 | 2015 | |
Document Fiscal Period Focus | Q1 | |
Class A Common Stock | ||
Entity Common Stock, Shares Outstanding | 12,460,012 | |
Class C Common Stock | ||
Entity Common Stock, Shares Outstanding | 1,507,561 |
Balance_Sheet
Balance Sheet (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Assets | ||
Fixed maturity securities, held to maturity, at amortized cost | $133,271,030 | $135,018,347 |
Equity securities, available for sale, at estimated fair value | 6,383,502 | 6,752,750 |
Mortgage loans on real estate and construction loans, held for investment net of allowances for loan losses of $1,902,396 and $2,003,055 for 2015 and 2014 | 125,894,443 | 120,050,072 |
Real estate held for investment, net of accumulated depreciation of $11,367,721 and $10,875,419 for 2015 and 2014 | 113,025,790 | 111,411,351 |
Policy and other loans, net of allowances for doubtful accounts of $813,223 and $693,413 for 2015 and 2014 | 39,184,250 | 34,125,428 |
Short-term investments | 20,620,236 | 27,059,495 |
Accrued investment income | 2,677,827 | 2,483,253 |
Total investments | 441,057,078 | 436,900,696 |
Cash and cash equivalents | 40,744,607 | 30,855,320 |
Mortgage loans sold to investors | 75,008,520 | 67,534,400 |
Receivables, net | 18,234,132 | 14,544,093 |
Restricted assets | 9,825,819 | 9,347,797 |
Cemetery perpetual care trust investments | 2,682,193 | 2,645,423 |
Receivable from reinsurers | 12,125,018 | 12,036,263 |
Cemetery land and improvements | 10,834,072 | 10,848,085 |
Deferred policy and pre-need contract acquisition costs | 51,844,676 | 50,307,503 |
Mortgage servicing rights, net | 8,562,488 | 7,834,747 |
Property and equipment, net | 11,116,818 | 11,307,714 |
Value of business acquired | 8,362,827 | 8,547,627 |
Goodwill | 2,765,570 | 2,765,570 |
Other assets | 8,614,373 | 5,594,324 |
Total Assets | 701,778,191 | 671,069,562 |
Liabilities | ||
Future life, annuity, and other benefits | 495,457,718 | 476,727,465 |
Unearned premium reserve | 4,895,716 | 4,961,937 |
Bank and other loans payable | 29,437,989 | 29,020,378 |
Deferred pre-need cemetery and mortuary contract revenues | 13,129,651 | 13,242,143 |
Cemetery perpetual care obligation | 3,421,452 | 3,406,718 |
Accounts payable | 5,086,123 | 1,789,387 |
Other liabilities and accrued expenses | 27,381,095 | 24,408,666 |
Income taxes | 22,395,997 | 20,421,767 |
Total liabilities | 601,205,741 | 573,978,461 |
Stockholders' Equity | ||
Additional paid-in capital | 26,167,974 | 25,931,119 |
Accumulated other comprehensive income, net of taxes | 2,730,333 | 1,438,566 |
Retained earnings | 45,963,745 | 44,101,252 |
Treasury stock at cost - 987,407 Class A shares in 2015 and 986,264 Class A shares in 2014 | -2,224,748 | -2,086,454 |
Total stockholders' equity | 100,572,450 | 97,091,101 |
Total Liabilities and Stockholders' Equity | 701,778,191 | 671,069,562 |
Class A Common Stock | ||
Stockholders' Equity | ||
Common stock | 24,920,024 | 24,918,480 |
Class B Common Stock | ||
Stockholders' Equity | ||
Common stock | ||
Class C Common Stock | ||
Stockholders' Equity | ||
Common stock | $3,015,122 | $2,788,138 |
Balance_Sheet_Parenthetical
Balance Sheet Parenthetical (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Allowance for losses on mortgage loans on real estate and construction loans, held for investment | $1,902,396 | $2,003,055 |
Accumulated depreciation on real estate held for investment | 11,367,721 | 10,875,419 |
Allowance for doubtful accounts on policy and other loans | $813,223 | $693,413 |
Class A Common Stock | ||
Common Stock Par Value | $2 | $2 |
Common Stock Authorized | 20,000,000 | 20,000,000 |
Common Stock Issued | 12,460,012 | 12,459,240 |
Treasury Stock | 987,407 | 986,264 |
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 | $2 | $2 |
Common Stock Authorized | 2,000,000 | 2,000,000 |
Common Stock Issued | 1,507,561 | 1,394,069 |
Income_Statement
Income Statement (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Revenues: | ||
Insurance premiums and other considerations | $13,853,515 | $13,129,447 |
Net investment income | 7,822,844 | 5,642,500 |
Net mortuary and cemetery sales | 2,872,235 | 2,831,062 |
Realized gains on investments and other assets | 420,064 | 198,993 |
Other than temporary impairments on investments | -55,896 | -30,000 |
Mortgage fee income | 37,821,800 | 22,537,538 |
Other income | 1,315,070 | 743,736 |
Total revenues | 64,049,632 | 45,053,276 |
Benefits and expenses: | ||
Death benefits | 7,927,872 | 6,675,493 |
Surrenders and other policy benefits | 653,734 | 515,612 |
Increase in future policy benefits | 4,179,812 | 4,367,443 |
Amortization of deferred policy and pre-need acquisition costs and value of business acquired | 1,167,499 | 1,403,642 |
Commissions | 18,566,047 | 10,560,881 |
Personnel | 14,313,316 | 11,497,168 |
Advertising | 1,416,290 | 772,013 |
Rent and rent related | 1,885,076 | 1,343,443 |
Depreciation on property and equipment | 562,737 | 497,202 |
Provision for loan losses and loss reserve | 666,739 | 372,093 |
Costs related to funding mortgage loans | 2,183,011 | 1,297,685 |
Other expenses | 6,085,503 | 4,596,451 |
Interest expense | 985,346 | 497,864 |
Cost of goods and services sold-mortuaries and cemeteries | 458,266 | 490,299 |
Total benefits and expenses | 61,051,248 | 44,887,289 |
Earnings before income taxes | 2,998,384 | 165,987 |
Income tax expense | -1,134,681 | -27,139 |
Net earnings | $1,863,703 | $138,848 |
Net earnings per Class A Equivalent common share (1) | $0.14 | $0.01 |
Net earnings per Class A Equivalent common share-assuming dilution (1) | $0.14 | $0.01 |
Weighted-average Class A equivalent common share outstanding (1) | 12,934,816 | 12,400,954 |
Weighted-average Class A equivalent common shares outstanding-assuming dilution (1) | 13,469,900 | 12,863,895 |
Comprehensive_Income_Statement
Comprehensive Income Statement (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Comprehensive Income Statement | ||
Net earnings | $1,863,703 | $138,848 |
Net unrealized gains on derivative instruments | 1,520,023 | 278,230 |
Net unrealized gains (losses) on available for sale securities | -228,256 | 37,905 |
Other comprehensive income | 1,291,767 | 316,135 |
Comprehensive income | $3,155,470 | $454,983 |
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, 2013 | $23,614,574 | $2,660,382 | $23,215,875 | $1,218,396 | $39,666,587 | ($2,624,625) | $87,751,189 |
Net earnings | 138,848 | 138,848 | |||||
Other comprehensive income | 316,135 | 316,135 | |||||
Grant of stock options | 64,325 | 64,325 | |||||
Exercise of stock options | 69,910 | -19,611 | 50,299 | ||||
Sale of treasury stock | 76,478 | 105,327 | 181,805 | ||||
Stock Dividends | 3,446 | -1 | 4,910 | -8,355 | |||
Conversion Class C to Class A | 1,424 | -1,423 | -1 | ||||
Balance at Mar. 31, 2014 | 23,689,354 | 2,658,958 | 23,341,976 | 1,534,531 | 39,797,080 | -2,519,298 | 88,502,601 |
Balance at Dec. 31, 2014 | 24,918,480 | 2,788,138 | 25,931,119 | 1,438,566 | 44,101,252 | -2,086,454 | 97,091,101 |
Net earnings | 1,863,703 | 1,863,703 | |||||
Other comprehensive income | 1,291,767 | 1,291,767 | |||||
Grant of stock options | 85,545 | 85,545 | |||||
Exercise of stock options | 228,046 | 15,963 | -244,009 | ||||
Sale of treasury stock | 134,619 | 105,715 | 240,334 | ||||
Stock Dividends | 480 | 2 | 728 | -1,210 | |||
Conversion Class C to Class A | 1,064 | -1,064 | |||||
Balance at Mar. 31, 2015 | $24,920,024 | $3,015,122 | $26,167,974 | $2,730,333 | $45,963,745 | ($2,224,748) | $100,572,450 |
Statement_of_Cash_Flows
Statement of Cash Flows (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Cash flows from operating activities: | ||
Net cash provided by operating activities | $711,854 | $22,716,675 |
Cash flows from investing activities: | ||
Purchase-fixed maturity securities | -720,168 | |
Calls and maturities - fixed maturity securities | 2,423,142 | 1,482,142 |
Purchase - equity securities | -970,123 | -2,078,830 |
Sales - equity securities | 1,115,336 | 666,524 |
Purchase of short-term investments | -19,289,330 | -4,995,216 |
Sales of short-term investments | 25,728,589 | 312,659 |
Sales (purchases) of restricted assets | -477,434 | 94,028 |
Changes in assets for perpetual care trusts | -77,547 | -59,880 |
Amount received for perpetual care trusts | 14,734 | 43,305 |
Mortgage, policy, and other loans made | -98,936,237 | -49,908,636 |
Payments received for mortgage, policy and other loans | 85,963,685 | 33,846,466 |
Purchase of property and equipment | -371,843 | -275,002 |
Purchase of real estate | -1,695,631 | -2,139,341 |
Sale of real estate | 1,924,500 | 1,247,104 |
Cash received from reinsurance | 15,113,391 | 7,304,993 |
Net cash provided by (used in) investing activities | 9,745,064 | -14,459,684 |
Cash flows from financing activities: | ||
Annuity contract receipts | 2,507,650 | 2,524,342 |
Annuity contract withdrawals | -3,496,843 | -3,647,370 |
Proceeds from stock options exercised | 50,299 | |
Repayment of bank loans on notes and contracts | -607,286 | -588,471 |
Proceeds from borrowing on bank loans | 1,028,848 | 30,159 |
Net cash used in financing activities | -567,631 | -1,631,041 |
Net change in cash and cash equivalents | 9,889,287 | 6,625,950 |
Cash and cash equivalents at beginning of period | 30,855,320 | 38,203,164 |
Cash and cash equivalents at end of period | 40,744,607 | 44,829,114 |
Non Cash Investing and Financing Activities | ||
Mortgage loans foreclosed into real estate | $2,389,330 |
1_Basis_of_Presentation
1) Basis of Presentation | 3 Months Ended |
Mar. 31, 2015 | |
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, 2014, 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 months ended March 31, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. | |
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. |
2_Recent_Accounting_Pronouncem
2) Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2015 | |
Notes | |
2) Recent Accounting Pronouncements | 2) Recent Accounting Pronouncements |
Accounting Standards Update (“ASU”) No. 2014-11: "Transfers and Servicing - Repurchase to Maturity Transactions, Repurchase Financings, and Disclosures (Topic 860)" – Issued in June 2014, ASU 2014-11 aligns the accounting for repurchase to maturity transactions and repurchase agreements executed as a repurchase financing with the accounting for other typical repurchase agreements. Going forward, these transactions would all be accounted for as secured borrowings. The new authoritative guidance is effective for the first interim or annual period beginning after December 15, 2014. In addition the disclosure of certain transactions accounted for as a sale is effective for the first interim or annual period beginning on or after December 15, 2014, and the disclosure for transactions accounted for as secured borrowings is required for annual periods beginning after December 15, 2014, and interim periods beginning after March 15, 2015. Early adoption is prohibited. This new guidance has not and will not have a significant impact on the Company’s results of operations or financial position. | |
ASU No. 2014-09: “Revenue from Contracts with Customers (Topic 606)” - Issued in May 2014, ASU 2014-09 supersedes the revenue recognition requirements in ASC Topic 605, “Revenue Recognition”, and requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Insurance contracts are excluded from the scope of this new guidance. The new authoritative guidance is effective for interim and annual periods beginning after December 15, 2016. The Company is in the process of evaluating the potential impact of this standard, which is not expected to be material to the Company’s results of operations or financial position. | |
ASU No. 2014-14: “Receivables – Troubled Debt Restructurings by Creditors (Subtopic 310-40)” - In January 2014, ASU No. 2014-14 amended ASC Topic 310, "Receivables" to reduce diversity by clarifying when an in substance repossession or foreclosure occurs, that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan receivable should be derecognized and the real estate property recognized. The new authoritative guidance is effective for interim and annual periods beginning after December 15, 2014 and did not have a significant impact on the Company’s results of operations or financial position. | |
The Company has reviewed other recent accounting pronouncements and has determined that they will not significantly impact the Company’s results of operations or financial position |
3_Investments
3) Investments | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Notes | ||||||||||||||||
3) Investments | 3) Investments | |||||||||||||||
The Company’s investments in fixed maturity securities held to maturity and equity securities available for sale as of March 31, 2015 are summarized as follows: | ||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||
31-Mar-15 | ||||||||||||||||
Fixed maturity securities held to maturity carried at amortized cost: | ||||||||||||||||
Bonds: | ||||||||||||||||
U.S. Treasury securities and obligations of U.S. Government agencies | $ 1,870,964 | $ 361,034 | $ - | $ 2,231,998 | ||||||||||||
Obligations of states and political subdivisions | 1,984,709 | 247,576 | (4,322) | 2,227,963 | ||||||||||||
Corporate securities including public utilities | 124,944,246 | 16,894,360 | (830,091) | 141,008,515 | ||||||||||||
Mortgage-backed securities | 3,859,088 | 311,980 | (467) | 4,170,601 | ||||||||||||
Redeemable preferred stock | 612,023 | 35,937 | - | 647,960 | ||||||||||||
Total fixed maturity securities held to maturity | $ 133,271,030 | $ 17,850,887 | $ (834,880) | $ 150,287,037 | ||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||
31-Mar-15 | ||||||||||||||||
Equity securities available for sale at estimated fair value: | ||||||||||||||||
Common stock: | ||||||||||||||||
Industrial, miscellaneous and all other | $ 7,095,225 | $ 298,891 | $ (1,010,614) | $ 6,383,502 | ||||||||||||
Total equity securities available for sale at estimated fair value | $ 7,095,225 | $ 298,891 | $ (1,010,614) | $ 6,383,502 | ||||||||||||
Mortgage loans on real estate and construction loans held for investment at amortized cost: | ||||||||||||||||
Residential | $ 52,045,350 | |||||||||||||||
Residential construction | 29,684,359 | |||||||||||||||
Commercial | 46,067,130 | |||||||||||||||
Less: Allowance for loan losses | (1,902,396) | |||||||||||||||
Total mortgage loans on real estate and construction loans held for investment | $ 125,894,443 | |||||||||||||||
Real estate held for investment - net of depreciation | $ 113,025,790 | |||||||||||||||
Policy and other loans at amortized cost: | ||||||||||||||||
Policy loans | $ 7,187,804 | |||||||||||||||
Other loans | 32,809,669 | |||||||||||||||
Less: Allowance for doubtful accounts | (813,223) | |||||||||||||||
Total policy and other loans at amortized cost | $ 39,184,250 | |||||||||||||||
Short-term investments at amortized cost | $ 20,620,236 | |||||||||||||||
The Company’s investments in fixed maturity securities held to maturity and equity securities available for sale as of December 31, 2014 are summarized as follows: | ||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||
December 31, 2014: | ||||||||||||||||
Fixed maturity securities held to maturity carried at amortized cost: | ||||||||||||||||
Bonds: | ||||||||||||||||
U.S. Treasury securities and obligations of U.S. Government agencies | $ 1,873,146 | $ 345,715 | $ - | $ 2,218,861 | ||||||||||||
Obligations of states and political subdivisions | 1,736,489 | 221,893 | (5,278) | 1,953,104 | ||||||||||||
Corporate securities including public utilities | 126,533,483 | 15,841,536 | (980,357) | 141,394,662 | ||||||||||||
Mortgage-backed securities | 4,263,206 | 305,381 | (11,894) | 4,556,693 | ||||||||||||
Redeemable preferred stock | 612,023 | 22,032 | - | 634,055 | ||||||||||||
Total fixed maturity securities held to maturity | $ 135,018,347 | $ 16,736,557 | $ (997,529) | $ 150,757,375 | ||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||
December 31, 2014: | ||||||||||||||||
Equity securities available for sale at estimated fair value: | ||||||||||||||||
Common stock: | ||||||||||||||||
Industrial, miscellaneous and all other | $ 7,179,010 | $ 393,873 | $ (820,133) | $ 6,752,750 | ||||||||||||
Total securities available for sale carried at estimated fair value | $ 7,179,010 | $ 393,873 | $ (820,133) | $ 6,752,750 | ||||||||||||
Mortgage loans on real estate and construction loans held for investment at amortized cost: | ||||||||||||||||
Residential | $ 53,592,433 | |||||||||||||||
Residential construction | 33,071,938 | |||||||||||||||
Commercial | 35,388,756 | |||||||||||||||
Less: Allowance for loan losses | (2,003,055) | |||||||||||||||
Total mortgage loans on real estate and construction loans held for investment | $ 120,050,072 | |||||||||||||||
Real estate held for investment - net of depreciation | $ 111,411,351 | |||||||||||||||
Policy and other loans at amortized cost: | ||||||||||||||||
Policy loans | $ 7,011,012 | |||||||||||||||
Other loans | 27,807,829 | |||||||||||||||
Less: Allowance for doubtful accounts | (693,413) | |||||||||||||||
Total policy and other loans at amortized cost | $ 34,125,428 | |||||||||||||||
Short-term investments at amortized cost | $ 27,059,495 | |||||||||||||||
Fixed Maturity Securities | ||||||||||||||||
The following tables summarize unrealized losses on fixed maturity securities, which are carried at amortized cost, at March 31, 2015 and December 31, 2014. 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 March 31 2015 | ||||||||||||||||
Obligations of states and political subdivisions | $ - | $ 4,322 | 1 | $ 4,322 | ||||||||||||
Corporate securities including public utilities | 566,310 | 23 | 263,781 | 10 | 830,091 | |||||||||||
Mortgage-backed securities | 467 | 1 | - | 467 | ||||||||||||
Total unrealized losses | $ 566,777 | 24 | $ 268,103 | 11 | $ 834,880 | |||||||||||
Fair Value | $ 9,346,785 | $ 2,522,624 | $ 11,869,409 | |||||||||||||
At December 31, 2014 | ||||||||||||||||
Obligations of states and political subdivisions | $ - | 0 | $ 5,278 | 1 | $ 5,278 | |||||||||||
Corporate securities including public utilities | 548,310 | 21 | 432,047 | 11 | 980,357 | |||||||||||
Mortgage-backed securities | 3,966 | 1 | 7,928 | 1 | 11,894 | |||||||||||
Total unrealized losses | $ 552,276 | 22 | $ 445,253 | 13 | $ 997,529 | |||||||||||
Fair Value | $ 7,081,352 | $ 2,777,587 | $ 9,858,939 | |||||||||||||
As of March 31, 2015, the average market value of the related fixed maturities was 93.4% of amortized cost and the average market value was 90.8% of amortized cost as of December 31, 2014. During the three months ended March 31, 2015 and 2014 an other than temporary decline in fair value resulted in the recognition of credit losses on fixed maturity securities of $30,000 for each reporting period. | ||||||||||||||||
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 March 31, 2015 and December 31, 2014. 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 March 31, 2015 | ||||||||||||||||
Industrial, miscellaneous and all other | $ 461,641 | 158 | $ 548,973 | 28 | $ 1,010,614 | |||||||||||
Total unrealized losses | $ 461,641 | 158 | $ 548,973 | 28 | $ 1,010,614 | |||||||||||
Fair Value | $ 2,444,324 | $ 609,689 | $ 3,054,013 | |||||||||||||
At December 31, 2014 | ||||||||||||||||
Industrial, miscellaneous and all other | $ 327,389 | 138 | $ 492,744 | 27 | $ 820,133 | |||||||||||
Total unrealized losses | $ 327,389 | 138 | $ 492,744 | 27 | $ 820,133 | |||||||||||
Fair Value | $ 2,162,425 | $ 676,706 | $ 2,839,131 | |||||||||||||
As of March 31, 2015, the average market value of the equity securities available for sale was 75.1% of the original investment and the average market value was 77.6% of the original investment as of December 31, 2014. 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 three months ended March 31, 2015 and 2014, an other than temporary decline in the fair value resulted in the recognition of an impairment loss on equity securities of $25,896 and $-0-, respectively. | ||||||||||||||||
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 March 31, 2015, 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 2015 | $ 3,816,196 | $ 3,880,262 | ||||||||||||||
Due in 2016 through 2019 | 33,339,908 | 36,890,422 | ||||||||||||||
Due in 2020 through 2024 | 25,469,059 | 28,347,845 | ||||||||||||||
Due after 2024 | 66,174,756 | 76,349,947 | ||||||||||||||
Mortgage-backed securities | 3,859,088 | 4,170,601 | ||||||||||||||
Redeemable preferred stock | 612,023 | 647,960 | ||||||||||||||
Total held to maturity | $ 133,271,030 | $ 150,287,037 | ||||||||||||||
The amortized cost and estimated fair value of available for sale securities at March 31, 2015, 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: | ||||||||||||||||
Common stock | $ 7,095,225 | $ 6,383,502 | ||||||||||||||
Total available for sale | $ 7,095,225 | $ 6,383,502 | ||||||||||||||
The Company’s realized gains and losses, other than temporary impairments from investments and other assets, are summarized as follows: | ||||||||||||||||
Three Months Ended March 31 | ||||||||||||||||
2015 | 2014 | |||||||||||||||
Fixed maturity securities held to maturity: | ||||||||||||||||
Gross realized gains | $ 85,997 | $ - | ||||||||||||||
Gross realized losses | (9,776) | - | ||||||||||||||
Other than temporary impairments | (30,000) | (30,000) | ||||||||||||||
Securities available for sale: | ||||||||||||||||
Gross realized gains | 87,720 | 53,253 | ||||||||||||||
Gross realized losses | (1,016) | - | ||||||||||||||
Other than temporary impairments | (25,896) | - | ||||||||||||||
Other assets: | ||||||||||||||||
Gross realized gains | 257,139 | 145,740 | ||||||||||||||
Gross realized losses | - | - | ||||||||||||||
Other than temporary impairments | - | - | ||||||||||||||
Total | $ 364,168 | $ 168,993 | ||||||||||||||
The net carrying amount of held to maturity securities sold was $257,962 and $-0- for the three months ended March 31, 2015 and 2014, respectively. The net realized gain related to these sales was $8,962 and $-0- for the three months ended March 31, 2015 and 2014, respectively. | ||||||||||||||||
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 March 31, 2015, other than investments issued or guaranteed by the United States Government. | ||||||||||||||||
Major categories of net investment income are as follows: | ||||||||||||||||
Three Months Ended March 31 | ||||||||||||||||
2015 | 2014 | |||||||||||||||
Fixed maturity securities | $ 1,980,696 | $ 2,109,121 | ||||||||||||||
Equity securities | 59,418 | 39,247 | ||||||||||||||
Mortgage loans on real estate | 1,850,626 | 1,552,110 | ||||||||||||||
Real estate | 1,623,741 | 1,689,595 | ||||||||||||||
Policy and other loans | 188,546 | 197,568 | ||||||||||||||
Short-term investments, principally gains on sale of mortgage loans and other | 4,225,785 | 1,899,113 | ||||||||||||||
Gross investment income | 9,928,812 | 7,486,754 | ||||||||||||||
Investment expenses | (2,105,968) | (1,844,254) | ||||||||||||||
Net investment income | $ 7,822,844 | $ 5,642,500 | ||||||||||||||
Net investment income includes income earned by the restricted assets of the cemeteries and mortuaries of $92,922 and $94,745 for the three months ended March 31, 2015 and 2014, respectively. | ||||||||||||||||
Net investment income on real estate consists primarily of rental revenue. | ||||||||||||||||
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 $9,310,227 at March 31, 2015 and $8,886,001 at December 31, 2014. 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%, maturity dates range from six 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 do business. At March 31, 2015, the Company had 39%, 19%, 13%, 8%, and 6% of its mortgage loans from borrowers located in the states of Utah, California, Texas, Florida, and Nevada, respectively. The mortgage loans on real estate balances on the consolidated balance sheet are reflected net of an allowance for loan losses of $1,902,396 and $2,003,055 at March 31, 2015 and December 31, 2014, respectively. | ||||||||||||||||
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 | |||||||||||||
31-Mar-15 | ||||||||||||||||
Allowance for credit losses: | ||||||||||||||||
Beginning balance - January 1, 2015 | $ 187,129 | $ 1,715,812 | $ 100,114 | $ 2,003,055 | ||||||||||||
Charge-offs | - | - | - | - | ||||||||||||
Provision | - | (100,659) | - | (100,659) | ||||||||||||
Ending balance -March 31, 2015 | $ 187,129 | $ 1,615,153 | $ 100,114 | $ 1,902,396 | ||||||||||||
Ending balance: individually evaluated for impairment | $ - | $ 245,952 | $ - | $ 245,952 | ||||||||||||
Ending balance: collectively evaluated for impairment | $ 187,129 | $ 1,369,201 | $ 100,114 | $ 1,656,444 | ||||||||||||
Ending balance: loans acquired with deteriorated credit quality | $ - | $ - | $ - | $ - | ||||||||||||
Mortgage loans: | ||||||||||||||||
Ending balance | $ 46,067,130 | $ 52,045,350 | $ 29,684,359 | $ 127,796,839 | ||||||||||||
Ending balance: individually evaluated for impairment | $ - | $ 2,544,731 | $ - | $ 2,544,731 | ||||||||||||
Ending balance: collectively evaluated for impairment | $ 46,067,130 | $ 49,500,619 | $ 29,684,359 | $ 125,252,108 | ||||||||||||
Ending balance: loans acquired with deteriorated credit quality | $ - | $ - | $ - | $ - | ||||||||||||
31-Dec-14 | ||||||||||||||||
Allowance for credit losses: | ||||||||||||||||
Beginning balance - January 1, 2014 | $ 187,129 | $ 1,364,847 | $ 100,114 | $ 1,652,090 | ||||||||||||
Charge-offs | - | (38,444) | - | (38,444) | ||||||||||||
Provision | - | 389,409 | - | 389,409 | ||||||||||||
Ending balance - December 31, 2014 | $ 187,129 | $ 1,715,812 | $ 100,114 | $ 2,003,055 | ||||||||||||
Ending balance: individually evaluated for impairment | $ - | $ 153,446 | $ - | $ 153,446 | ||||||||||||
Ending balance: collectively evaluated for impairment | $ 187,129 | $ 1,562,366 | $ 100,114 | $ 1,849,609 | ||||||||||||
Ending balance: loans acquired with deteriorated credit quality | $ - | $ - | $ - | $ - | ||||||||||||
Mortgage loans: | ||||||||||||||||
Ending balance | $ 35,388,756 | $ 53,592,433 | $ 33,071,938 | $ 122,053,127 | ||||||||||||
Ending balance: individually evaluated for impairment | $ - | $ 1,556,182 | $ 414,499 | $ 1,970,681 | ||||||||||||
Ending balance: collectively evaluated for impairment | $ 35,388,756 | $ 52,036,251 | $ 32,657,439 | $ 120,082,446 | ||||||||||||
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 | ||||||||
31-Mar-15 | ||||||||||||||||
Commercial | $ - | $ 272,934 | $ - | $ - | $ 272,934 | $ 45,794,196 | $ 46,067,130 | $ (187,129) | $ 45,880,001 | |||||||
Residential | 1,092,140 | 706,753 | 4,107,831 | 2,544,731 | 8,451,455 | 43,593,895 | 52,045,350 | (1,615,153) | 50,430,197 | |||||||
Residential Construction | - | 25,049 | 64,895 | - | 89,944 | 29,594,415 | 29,684,359 | (100,114) | 29,584,245 | |||||||
Total | $ 1,092,140 | $ 1,004,736 | $ 4,172,726 | $ 2,544,731 | $ 8,814,333 | $ 118,982,506 | $ 127,796,839 | $ (1,902,396) | $ 125,894,443 | |||||||
31-Dec-14 | ||||||||||||||||
Commercial | $ - | $ - | $ - | $ - | $ - | $ 35,388,756 | $ 35,388,756 | $ (187,129) | $ 35,201,627 | |||||||
Residential | 1,631,142 | 1,174,516 | 5,464,901 | 1,556,182 | 9,826,741 | 43,765,692 | 53,592,433 | (1,715,812) | 51,876,621 | |||||||
Residential Construction | - | - | 64,895 | 414,499 | 479,394 | 32,592,544 | 33,071,938 | (100,114) | 32,971,824 | |||||||
Total | $ 1,631,142 | $ 1,174,516 | $ 5,529,796 | $ 1,970,681 | $ 10,306,135 | $ 111,746,992 | $ 122,053,127 | $ (2,003,055) | $ 120,050,072 | |||||||
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 | ||||||||||||
31-Mar-15 | ||||||||||||||||
With no related allowance recorded: | ||||||||||||||||
Commercial | $ - | $ - | $ - | $ - | $ - | |||||||||||
Residential | - | - | - | - | - | |||||||||||
Residential construction | - | - | - | - | - | |||||||||||
With an allowance recorded: | ||||||||||||||||
Commercial | $ - | $ - | $ - | $ - | $ - | |||||||||||
Residential | 2,544,731 | 2,544,731 | 245,952 | 2,544,731 | - | |||||||||||
Residential construction | - | - | - | - | - | |||||||||||
Total: | ||||||||||||||||
Commercial | $ - | $ - | $ - | $ - | $ - | |||||||||||
Residential | 2,544,731 | 2,544,731 | 245,952 | 2,544,731 | - | |||||||||||
Residential construction | - | - | - | - | - | |||||||||||
31-Dec-14 | ||||||||||||||||
With no related allowance recorded: | ||||||||||||||||
Commercial | $ - | $ - | $ - | $ - | $ - | |||||||||||
Residential | - | - | - | - | - | |||||||||||
Residential construction | 414,499 | 414,499 | - | 414,499 | - | |||||||||||
With an allowance recorded: | ||||||||||||||||
Commercial | $ - | $ - | $ - | $ - | $ - | |||||||||||
Residential | 1,556,182 | 1,556,182 | 153,446 | 1,556,182 | - | |||||||||||
Residential construction | - | - | - | - | - | |||||||||||
Total: | ||||||||||||||||
Commercial | $ - | $ - | $ - | $ - | $ - | |||||||||||
Residential | 1,556,182 | 1,556,182 | 153,446 | 1,556,182 | - | |||||||||||
Residential construction | 414,499 | 414,499 | - | 414,499 | - | |||||||||||
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 | |||||||||||||
31-Mar-15 | 31-Dec-14 | 31-Mar-15 | 31-Dec-14 | 31-Mar-15 | 31-Dec-14 | 31-Mar-15 | 31-Dec-14 | |||||||||
Performing | $ 46,067,130 | $ 35,388,756 | $ 45,392,788 | $ 46,571,350 | $ 29,619,464 | $ 32,592,544 | $ 121,079,382 | $ 114,552,650 | ||||||||
Nonperforming | - | - | 6,652,562 | 7,021,083 | 64,895 | 479,394 | 6,717,457 | 7,500,477 | ||||||||
Total | $ 46,067,130 | $ 35,388,756 | $ 52,045,350 | $ 53,592,433 | $ 29,684,359 | $ 33,071,938 | $ 127,796,839 | $ 122,053,127 | ||||||||
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 $534,000 and $535,000 as of March 31, 2015 and December 31, 2014, respectively. | ||||||||||||||||
The following is a summary of mortgage loans on a nonaccrual status for the periods presented. | ||||||||||||||||
Mortgage Loans on Nonaccrual Status | ||||||||||||||||
As of March 31 2015 | As of December 31 2014 | |||||||||||||||
Residential | $ 6,652,562 | $ 7,021,083 | ||||||||||||||
Residential construction | 64,895 | 479,394 | ||||||||||||||
Total | $ 6,717,457 | $ 7,500,477 | ||||||||||||||
Loan Loss Reserve | ||||||||||||||||
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. | ||||||||||||||||
When a repurchase demand is received from a third party investor, the relevant data is reviewed and captured so that an estimated future loss can be calculated. The key factors that are used in the estimated loss calculation 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 captured and is useful for management purposes; the actual estimated loss is generally based on these key factors. 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 March 31 2015 | As of December 31 2014 | |||||||||||||||
Balance, beginning of period | $ 1,718,150 | $ 5,506,532 | ||||||||||||||
Provisions for losses | 666,739 | 3,053,403 | ||||||||||||||
Charge-offs | (173,106) | (6,841,785) | ||||||||||||||
Balance, end of period | $ 2,211,783 | $ 1,718,150 | ||||||||||||||
The Company believes the loan loss reserve represents probable loan losses incurred as of the balance sheet date. Actual loan loss experience could change, in the near-term, from the established reserve based upon claims that could be asserted by third party investors. SecurityNational Mortgage believes there is potential to resolve any alleged claims by third party investors on acceptable terms. If SecurityNational Mortgage is unable to resolve such claims on acceptable terms, legal action may ensue. In the event of legal action by any third party investor, SecurityNational Mortgage believes it has significant defenses to any such action and intends to vigorously defend itself against such action. |
4_Stockbased_Compensation
4) Stock-based Compensation | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Notes | |||||||||
4) Stock-based Compensation | 4) Stock-Based Compensation | ||||||||
The Company has four fixed option plans (the “2003 Plan”, the “2006 Director Plan”, the “2013 Plan” and the “2014 Director Plan”). Compensation expense for options issued of $85,545 and $64,325 has been recognized for these plans for the three months ended March 31, 2015 and 2014, respectively. As of March 31, 2015, the total unrecognized compensation expense related to the options issued in December 2014 and July 2014 were $235,086 and $44,356, respectively, which are expected to be recognized over the vesting periods of one year. | |||||||||
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 March 31, 2015, and the changes during the three months ended March 31, 2015, are presented below: | |||||||||
Number of Class A Shares | Weighted Average Exercise Price | Number of Class C Shares | Weighted Average Exercise Price | ||||||
Outstanding at December 31, 2014 | 512,795 | $ 3.20 | 691,591 | $ 2.00 | |||||
Granted | - | - | |||||||
Exercised | - | (114,023) | 2.14 | ||||||
Cancelled | (8,846) | 2.31 | - | ||||||
Outstanding at March 31, 2015 | 503,949 | $ 3.21 | 577,568 | $ 2.62 | |||||
As of March 31, 2015: | |||||||||
Options exercisable | 379,946 | $ 2.75 | 471,943 | $ 2.15 | |||||
As of March 31, 2015: | |||||||||
Available options for future grant | 266,649 | - | |||||||
Weighted average contractual term of options | |||||||||
outstanding at March 31, 2015 | 7.57 years | 2.93 years | |||||||
Weighted average contractual term of options | |||||||||
exercisable at March 31, 2015 | 6.91 years | 2.30 years | |||||||
Aggregated intrinsic value of options | |||||||||
outstanding at March 31, 2015 (1) | $1,076,880 | $1,572,653 | |||||||
Aggregated intrinsic value of options | |||||||||
exercisable at March 31, 2015 (1) | $988,022 | $1,506,415 | |||||||
(1) The Company used a stock price of $5.34 as of March 31, 2015 to derive intrinsic value. | |||||||||
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 three months ended March 31, 2015 and 2014 was $438,989 and $-0-, respectively. |
5_Earnings_Per_Share
5) Earnings Per Share | 3 Months Ended | |||||
Mar. 31, 2015 | ||||||
Notes | ||||||
5) Earnings Per Share | 5) Earnings Per Share | |||||
The basic and diluted earnings per share amounts were calculated as follows: | ||||||
Three Months Ended March 31 | ||||||
2015 | 2014 | |||||
Numerator: | ||||||
Net earnings | $ 1,863,703 | $ 138,848 | ||||
Denominator: | ||||||
Basic weighted-average shares outstanding | 12,934,816 | 12,400,954 | ||||
Effect of dilutive securities: | ||||||
Employee stock options | 535,084 | 462,941 | ||||
Diluted weighted-average shares outstanding | 13,469,900 | 12,863,895 | ||||
Basic net earnings per share | $0.14 | $0.01 | ||||
Diluted net earnings per share | $0.14 | $0.01 | ||||
Net earnings per share amounts have been adjusted for the effect of annual stock dividends. For the three months ended March 31, 2015 and 2014, there were 4,632 and 615,472 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. |
6_Business_Segments
6) Business Segments | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
Notes | |||||||||||
6) Business Segments | 6) 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, 2014. 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 | Eliminations | Consolidated | |||||||
For the Three Months Ended | |||||||||||
31-Mar-15 | |||||||||||
Revenues from external customers | $ 20,985,500 | $ 3,098,238 | $ 39,965,894 | $ - | $ 64,049,632 | ||||||
Intersegment revenues | 2,818,867 | 311,998 | 88,487 | (3,219,352) | - | ||||||
Segment profit before income taxes | 1,403,851 | 409,175 | 1,185,358 | - | 2,998,384 | ||||||
Identifiable Assets | 677,059,957 | 104,778,721 | 62,765,551 | (142,826,038) | 701,778,191 | ||||||
Goodwill | 2,765,570 | - | - | - | 2,765,570 | ||||||
For the Three Months Ended | |||||||||||
31-Mar-14 | |||||||||||
Revenues from external customers | $ 18,472,816 | $ 3,040,568 | $ 23,539,892 | $ - | $ 45,053,276 | ||||||
Intersegment revenues | 2,061,720 | 336,298 | 164,146 | (2,562,164) | - | ||||||
Segment profit before income taxes | 1,331,469 | 182,778 | (1,348,260) | - | 165,987 | ||||||
Identifiable Assets | 604,260,546 | 108,627,471 | 49,375,595 | (135,523,285) | 626,740,327 | ||||||
Goodwill | 391,848 | 285,191 | - | - | 677,039 |
7_Fair_Value_of_Financial_Inst
7): Fair Value of Financial Instruments | 3 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
Notes | ||||||||||
7): Fair Value of Financial Instruments | 7) 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 of the Notes to Condensed Consolidated Statements. | ||||||||||
Restricted Assets: 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 and Put Options: The Company uses quoted market prices to value its call and put options. | ||||||||||
The items shown under Level 3 are valued as follows: | ||||||||||
Policyholder Account Balances and Future Policy Benefits-Annuities: 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. | ||||||||||
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 positive or negative 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. | ||||||||||
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 condensed 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 used market data based upon its real estate operation experience and projected the present value of the net rental income over seven years. The Company used 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 Other 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. The precise fair value of MSRs cannot be readily determined because MSRs are not actively traded in stand-alone markets. 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 Company’s subsequent accounting for MSRs is based on the class of MSRs. The Company has identified two classes of MSRs: MSRs backed by mortgage loans with initial term of 30 years and MSRs backed by mortgage loans with initial term of 15 years. The Company distinguishes between these classes of MSRs due to their differing sensitivities to change in value as the result of changes in market. After being initially recorded at fair value, MSRs backed by mortgage loans are accounted for using the amortization method. MSR amortization is determined by amortizing the balance straight-line over an estimated nine year life. | ||||||||||
The Company periodically assesses MSRs for impairment. Impairment occurs when the current fair value of the MSR falls below the asset’s carrying value (carrying value is the amortized cost reduced by any related valuation allowance). 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. | ||||||||||
Management periodically reviews the various loan strata to determine whether the value of the MSRs in a given stratum is impaired and likely to recover. When management deems recovery of the value to be unlikely in the foreseeable future, a write-down of the cost of the MSRs for that stratum to its estimated recoverable value is charged to the valuation allowance. | ||||||||||
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 March 31, 2015. | ||||||||||
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 | $ 6,383,502 | $ 6,383,502 | $ - | $ - | ||||||
Total securities available for sale | $ 6,383,502 | $ 6,383,502 | $ - | $ - | ||||||
Restricted assets of cemeteries and mortuaries | $ 715,791 | $ 715,791 | $ - | $ - | ||||||
Cemetery perpetual care trust investments | 654,458 | 654,458 | - | - | ||||||
Derivatives - interest rate lock commitments | 5,002,929 | - | - | 5,002,929 | ||||||
Total assets accounted for at fair value on a recurring basis | $ 12,756,680 | $ 7,753,751 | $ - | $ 5,002,929 | ||||||
Liabilities accounted for at fair value on a recurring basis | ||||||||||
Policyholder account balances | $ (51,516,976) | $ - | $ - | $ (51,516,976) | ||||||
Future policy benefits - annuities | (68,843,240) | - | - | (68,843,240) | ||||||
Derivatives - bank loan interest rate swaps | (27,419) | - | - | (27,419) | ||||||
- call options | (37,476) | (37,476) | - | - | ||||||
- put options | (40,727) | (40,727) | - | - | ||||||
- interest rate lock commitments | (585,187) | - | - | (585,187) | ||||||
Total liabilities accounted for at fair value on a recurring basis | $ (121,051,025) | $ (78,203) | $ - | $ (120,972,822) | ||||||
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, 2014 | $ (45,310,699) | $ (65,540,985) | $ 1,929,851 | $ (31,370) | ||||||
Total gains (losses): | ||||||||||
Included in earnings | (6,206,277) | (3,302,255) | - | - | ||||||
Included in other comprehensive income (loss) | - | - | 2,487,891 | 3,951 | ||||||
Balance - March 31, 2015 | $ (51,516,976) | $ (68,843,240) | $ 4,417,742 | $ (27,419) | ||||||
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 condensed consolidated balance sheet at March 31, 2015. | ||||||||||
Total | Quoted Prices | Significant | Significant | |||||||
in Active | Observable | Unobservable | ||||||||
Markets for | Inputs | Inputs | ||||||||
Identical Assets | (Level 2) | (Level 3) | ||||||||
(Level 1) | ||||||||||
Assets accounted for at fair value on a nonrecurring basis | ||||||||||
Mortgage servicing rights | $ 987,707 | - | - | $ 987,707 | ||||||
Mortgage loans on real estate | 320,000 | - | - | 320,000 | ||||||
Total assets accounted for at fair value on a nonrecurring basis | $ 1,307,707 | $ - | $ - | $ 1,307,707 | ||||||
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, 2014. | ||||||||||
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 | $ 6,752,750 | $ 6,752,750 | $ - | $ - | ||||||
Total securities available for sale | $ 6,752,750 | $ 6,752,750 | $ - | $ - | ||||||
Restricted assets of cemeteries and mortuaries | $ 715,202 | $ 715,202 | $ - | $ - | ||||||
Cemetery perpetual care trust investments | 695,235 | 695,235 | - | - | ||||||
Derivatives - interest rate lock commitments | 2,111,529 | - | - | 2,111,529 | ||||||
Total assets accounted for at fair value on a recurring basis | $ 10,274,716 | $ 8,163,187 | $ - | $ 2,111,529 | ||||||
Liabilities accounted for at fair value on a recurring basis | ||||||||||
Policyholder account balances | $ (45,310,699) | $ - | $ - | $ (45,310,699) | ||||||
Future policy benefits - annuities | (65,540,985) | - | - | (65,540,985) | ||||||
Derivatives - bank loan interest rate swaps | (31,370) | - | - | (31,370) | ||||||
- call options | (116,036) | (116,036) | - | - | ||||||
- put options | (11,867) | (11,867) | - | - | ||||||
- interest rate lock commitment | (181,678) | - | - | (181,678) | ||||||
Total liabilities accounted for at fair value on a recurring basis | $ (111,192,635) | $ (127,903) | $ - | $ (111,064,732) | ||||||
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, 2013 | $ (48,000,668) | $ (65,052,928) | $ 1,487,908 | $ (58,310) | ||||||
Total gains (losses): | ||||||||||
Included in earnings | 2,689,969 | (488,057) | - | - | ||||||
Included in other | ||||||||||
comprehensive income | - | - | 441,943 | 26,940 | ||||||
Balance - December 31, 2014 | $ (45,310,699) | $ (65,540,985) | $ 1,929,851 | $ (31,370) | ||||||
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 condensed consolidated balance sheet at December 31, 2014. | ||||||||||
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 | $ 3,741,381 | - | - | $ 3,741,381 | ||||||
Real estate held for investment | 53,500 | - | - | 53,500 | ||||||
Total assets accounted for at fair value on a | ||||||||||
nonrecurring basis | $ 3,794,881 | $ - | $ - | $ 3,794,881 | ||||||
Fair Value of Financial Instruments Carried at Other Than Fair Value | ||||||||||
ASC 825, Financial Instruments, requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate that value. | ||||||||||
Management uses its best judgment in estimating the fair value of the Company’s financial instruments; however, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented herein are not necessarily indicative of the amounts the Company could have realized in a sales transaction at March 31, 2015 and December 31, 2014. The estimated fair value amounts for March 31, 2015 and December 31, 2014 have been measured as of period-end, and have not been reevaluated or updated for purposes of these Condensed Consolidated Financial Statements subsequent to those dates. As such, the estimated fair values of these financial instruments subsequent to the reporting date may be different than the amounts reported at period-end. | ||||||||||
The carrying values and estimated fair values for such financial instruments, and their corresponding placement in the fair value hierarchy, are summarized as follows as of March 31, 2015: | ||||||||||
Carrying Value | Level 1 | Level 2 | Level 3 | Total Estimated Fair Value | ||||||
Assets | ||||||||||
Mortgage loans: | ||||||||||
Residential | $ 50,430,197 | $ - | $ - | $ 53,693,961 | $ 53,693,961 | |||||
Residential construction | 29,584,245 | - | - | 29,584,245 | 29,584,245 | |||||
Commercial | 45,880,001 | - | - | 47,829,817 | 47,829,817 | |||||
Mortgage loans, net | $ 125,894,443 | $ - | $ - | $ 131,108,023 | $ 131,108,023 | |||||
Policy loans | 7,187,804 | - | - | 7,187,804 | 7,187,804 | |||||
Other loans | 31,996,446 | - | - | 31,996,446 | 31,996,446 | |||||
Short-term investments | 20,620,236 | - | - | 20,620,236 | 20,620,236 | |||||
Liabilities | ||||||||||
Bank and other loans payable | $ (29,410,570) | $ - | $ - | $ (29,410,570) | $ (29,410,570) | |||||
The carrying values and estimated fair values for such financial instruments, and their corresponding placement in the fair value hierarchy, are summarized as follows as of December 31, 2014: | ||||||||||
Carrying Value | Level 1 | Level 2 | Level 3 | Total Estimated Fair Value | ||||||
Assets | ||||||||||
Mortgage loans: | ||||||||||
Residential | $ 51,876,621 | $ - | $ - | $ 55,247,638 | $ 55,247,638 | |||||
Residential construction | 32,971,824 | - | - | 32,971,824 | 32,971,824 | |||||
Commercial | 35,201,627 | - | - | 36,829,266 | 36,829,266 | |||||
Mortgage loans, net | $ 120,050,072 | $ - | $ - | $ 125,048,728 | $ 125,048,728 | |||||
Policy loans | 7,011,012 | - | - | 7,011,012 | 7,011,012 | |||||
Other loans | 27,114,416 | - | - | 27,114,416 | 27,114,416 | |||||
Short-term investments | 27,059,495 | - | - | 27,059,495 | 27,059,495 | |||||
Liabilities | ||||||||||
Bank and other loans payable | $ (28,989,008) | $ - | $ - | $ (28,989,008) | $ (28,989,008) | |||||
The methods, assumptions and significant valuation techniques and inputs used to estimate the fair value of financial instruments are summarized as follows: | ||||||||||
Mortgage Loans on Real Estate: The estimated fair value of the Company’s mortgage loans is determined using various methods. The Company’s mortgage loans are grouped into three categories: Residential, Residential Construction and Commercial. When estimating the expected future cash flows, it is assumed that all loans will be held to maturity, and any loans that are non-performing are evaluated individually for impairment. | ||||||||||
Residential – The estimated fair value of mortgage loans originated prior to 2013 is determined by estimating expected future cash flows of interest payments and discounting them using current interest rates from single family mortgages. The estimated fair value of mortgage loans originated in 2013, 2014 and 2015 is determined from pricing of similar loans that were sold in 2013 and 2014. | ||||||||||
Residential Construction – These loans are primarily short in maturity (4-6 months) accordingly, the estimated fair value is determined to be the net book value. | ||||||||||
Commercial – The estimated fair value is determined by estimating expected future cash flows of interest payments and discounting them using current interest rates for commercial mortgages. | ||||||||||
Policy and Other Loans: The carrying amounts reported in the accompanying condensed consolidated balance sheet for these financial instruments approximate their fair values. | ||||||||||
Short-Term Investments: The carrying amounts reported in the accompanying condensed consolidated balance sheet for these financial instruments approximate their fair values. | ||||||||||
Bank and Other Loans Payable: The carrying amounts reported in the accompanying condensed consolidated balance sheet for these financial instruments approximate their fair values. |
8_Allowance_For_Doubtful_Accou
8) Allowance For Doubtful Accounts and Loan Losses and Impaired Loans | 3 Months Ended |
Mar. 31, 2015 | |
Notes | |
8) Allowance For Doubtful Accounts and Loan Losses and Impaired Loans | 8) Allowance for Doubtful Accounts, Allowance for 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 2 for additional information. In addition, when a mortgage loan is past due more than 90 days, the Company does not accrue any interest income. When a loan becomes delinquent, the Company proceeds to foreclose on the real estate and all expenses for foreclosure are expensed as incurred. Once foreclosed, an adjustment for the lower of cost or fair value is made, if necessary, and the amount is classified as other real estate owned held for investment or sale. The Company will rent the properties until it is deemed desirable to sell them. | |
The allowance for losses on mortgage loans held for investment could change based on changes in the value of the underlying collateral, the performance status of the loans, or the Company’s actual collection experience. The actual losses could change, in the near term, from the established allowance, based upon the occurrence or non-occurrence of these events. |
9_Derivative_Commitments
9) Derivative Commitments | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Notes | ||||||||||||||||
9) Derivative Commitments | ||||||||||||||||
9) 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 positive or negative 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 has adopted the selling of put options as a means of generating cash or purchasing equity securities at lower than current market prices. 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 and put options is adjusted to fair value at each reporting date. The fair value of outstanding call and put options as of March 31, 2015 and December 31, 2014 was $78,203 and $127,903, 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. | ||||||||||||||||
The following table shows the fair value of derivatives as of March 31, 2015 and December 31, 2014. | ||||||||||||||||
Fair Value of Derivative Instruments | ||||||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||||||
31-Mar-15 | 31-Dec-14 | 31-Mar-15 | 31-Dec-14 | |||||||||||||
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 | $5,002,929 | other assets | $2,111,529 | Other liabilities | $ 585,187 | Other liabilities | $ 181,678 | ||||||||
Call options | -- | -- | -- | -- | Other liabilities | 37,476 | Other liabilities | 116,036 | ||||||||
Put options | -- | -- | -- | -- | Other liabilities | 40,727 | Other liabilities | 11,867 | ||||||||
Interest rate swaps | -- | -- | -- | -- | Bank loans payable | 27,419 | Bank loans payable | 31,370 | ||||||||
Total | $5,002,929 | $2,111,529 | $ 690,809 | $ 340,951 | ||||||||||||
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 | ||||||||||||||||
Three Months Ended March 31 | ||||||||||||||||
Derivative - Cash Flow Hedging Relationships: | 2015 | 2014 | ||||||||||||||
Interest Rate Lock Commitments | $ 2,487,891 | $ 449,263 | ||||||||||||||
Interest Rate Swaps | 3,951 | 6,852 | ||||||||||||||
Sub Total | 2,491,842 | 456,115 | ||||||||||||||
Tax Effect | 971,819 | 177,885 | ||||||||||||||
Total | $ 1,520,023 | $ 278,230 | ||||||||||||||
10_Reinsurance_Commitments_and
10) Reinsurance, Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Notes | |
10) Reinsurance, Commitments and Contingencies | 10) Reinsurance, Commitments and Contingencies |
Reinsurance | |
Reinsurance Agreement with North America Life Insurance Company | |
On May 8, 2015, the Company, through its wholly owned subsidiary, Security National Life, signed a paid-up business offer under the coinsurance agreement effective December 1, 2010 to reinsure certain life insurance policies from North America Life Insurance Company (“North America Life”). Pursuant to the paid-up business offer, North America Life ceded and transferred to Security National Life all contractual obligations and risks under the coinsured policies. Security National Life paid a ceding commission to North America Life in the amount of $281,908. As a result of the ceding commission, North America Life transferred $8,900,282 of cash and $9,182,190 in statutory reserves, or liabilities, to Security National Life. | |
Reinsurance Agreement with American Republic Insurance Company | |
On February 11, 2015, the Company, through its wholly owned subsidiary, Security National Life, signed a coinsurance agreement to reinsure certain life insurance policies from American Republic Insurance Company (“American Republic”). The policies were previously reinsured by North America Life under a coinsurance agreement between World Insurance Company (“World Insurance”) and North America Life entered into on July 22, 2009 which was commuted. World Insurance was subsequently purchased by and merged into American Republic. The current coinsurance agreement is between Security National Life and American Republic and became effective on January 1, 2015. As part of the coinsurance agreement, American Republic transferred all contractual obligations and risks to Security National Life and Security National Life took control of $15,004,771 of assets in a trust account held by Texas Capital Bank as the trustee. | |
Reinsurance Agreement with LJA Insurance Company | |
On December 19, 2014, the Company, through its wholly owned subsidiary, Security National Life, entered into a Coinsurance Funds Withheld Reinsurance Agreement with LJA Insurance Company (“LJA Insurance”), a Republic of the Marshall Islands domiciled insurance company. This agreement was effective November 1, 2014. Under the terms of the funds withheld agreement, Security National Life ceded to LJA Insurance 100% of three blocks of deferred annuities in the amount of $4,337,000 and retained the assets and recorded a funds held under coinsurance liability for the same amount. LJA Insurance agreed to pay Security National Life an initial ceding commission of $60,000 and an asset management fee of $16,000 per quarter to administer the policies. Security National Life will also receive a 90% experience refund for any profits from the business. Security National Life has the right to recapture the business by giving LJA Insurance 90 days written notice, or it may be terminated by mutual consent of both parties. | |
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 March 31, 2015 and 2014 were $667,000 and $372,000, respectively. The estimated liability for indemnification losses is included in other liabilities and accrued expenses and, as of March 31, 2015 and December 31, 2014, the balances were $2,212,000 and $1,718,000, respectively. | |
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 $2,212,000 as of March 31, 2015 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. Furthermore, SecurityNational Mortgage believes there is potential to resolve the alleged claims by the third party investors on acceptable terms. If SecurityNational Mortgage is unable to resolve such claims on acceptable terms, legal action may ensue. In the event of legal action by any third party investor, SecurityNational Mortgage believes it has significant defenses to any such action and intends to vigorously defend itself against such action. | |
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 a guaranty agreement, dated February 23, 2006, by the Company for the benefit of 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 alleged that the Company and SecurityNational Mortgage are required to indemnify EMC Mortgage for any of its losses arising from the lawsuit that the Trust 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 brought against EMC Mortgage. | |
Mortgage Loan Loss Litigation | |
For a description of the litigation involving SecurityNational Mortgage and Lehman Brothers and Aurora Loan Services, reference is to Part II, Item 1. Legal Proceedings. | |
Other Contingencies and Commitments | |
The Company has entered into commitments to fund new residential construction loans. As of March 31, 2015, the Company’s commitments were $40,835,000 for these loans of which $29,684,000 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 March 31, 2015). 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. | |
11_Mortgage_Servicing_Rights
11) Mortgage Servicing Rights | 3 Months Ended | ||
Mar. 31, 2015 | |||
Notes | |||
11) Mortgage Servicing Rights | |||
11) Mortgage Servicing Rights | |||
The following is a summary of the MSR activity for the periods presented. | |||
As of March 31 2015 | As of December 31 2014 | ||
Amortized cost: | |||
Balance before valuation allowance at beginning of year | $ 7,834,747 | $ 4,844,101 | |
MSRs proceeds from loan sales | 987,707 | 3,741,381 | |
Amortization | (259,966) | (750,735) | |
Application of valuation allowance to write down MSRs with other than temporary impairment | - | - | |
Balance before valuation allowance at year end | $ 8,562,488 | $ 7,834,747 | |
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 end of period | $ - | $ - | |
Mortgage servicing rights, net | $ 8,562,488 | $ 7,834,747 | |
Estimated fair value of MSRs at end of period | $ 8,926,200 | $ 8,485,570 | |
The Company reports these MSRs pursuant to the accounting policy discussed in Note 7. | |||
12_Mergers_Acquisitions_and_Di
12) Mergers, Acquisitions and Dispositions Disclosures | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Notes | |||||
12) Mergers, Acquisitions and Dispositions Disclosures | 12) Acquisitions | ||||
Acquisition of American Funeral Financial | |||||
On June 4, 2014, the Company, through its wholly owned subsidiary, SNFC Subsidiary, LLC (“SNFC Subsidiary”), completed a purchase transaction with American Funeral Financial, LLC, a South Carolina limited liability company (“American Funeral Financial”) and Hypershop, LLC, a North Carolina limited liability company (“Hypershop”), the sole owner of all the limited liability company interests of American Funeral Financial, to purchase all of the outstanding limited liability company interests, or membership units, of American Funeral Financial. American Funeral Financial is engaged in the operation of a factoring business with the principal purpose of providing funding for funeral homes and mortuaries. | |||||
The following unaudited pro forma information has been prepared to present the results of operations of the Company assuming the acquisition of American Funeral Financial had occurred at the beginning of the three month periods ended March 31, 2015 and 2014. 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 Three Months Ended March 31 (unaudited) | |||||
2015 | 2014 | ||||
Total revenues | $ 64,049,632 | $ 46,521,936 | |||
Net earnings | $ 1,863,703 | $ 342,683 | |||
Net earnings per Class A equivalent common share | $ 0.14 | $ 0.03 | |||
Net earnings per Class A equivalent common share assuming dilution | $ 0.14 | $ 0.03 |
1_Basis_of_Presentation_Accoun
1) Basis of Presentation: Accounting Policy (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
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, 2014, 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 months ended March 31, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. |
1_Basis_of_Presentation_Use_of
1) Basis of Presentation: Use of Estimates Policy (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
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) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Held-to-maturity Securities | |||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||
31-Mar-15 | |||||||||
Fixed maturity securities held to maturity carried at amortized cost: | |||||||||
Bonds: | |||||||||
U.S. Treasury securities and obligations of U.S. Government agencies | $ 1,870,964 | $ 361,034 | $ - | $ 2,231,998 | |||||
Obligations of states and political subdivisions | 1,984,709 | 247,576 | (4,322) | 2,227,963 | |||||
Corporate securities including public utilities | 124,944,246 | 16,894,360 | (830,091) | 141,008,515 | |||||
Mortgage-backed securities | 3,859,088 | 311,980 | (467) | 4,170,601 | |||||
Redeemable preferred stock | 612,023 | 35,937 | - | 647,960 | |||||
Total fixed maturity securities held to maturity | $ 133,271,030 | $ 17,850,887 | $ (834,880) | $ 150,287,037 | |||||
AsOfDecember312014Member | |||||||||
Held-to-maturity Securities | |||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||
December 31, 2014: | |||||||||
Fixed maturity securities held to maturity carried at amortized cost: | |||||||||
Bonds: | |||||||||
U.S. Treasury securities and obligations of U.S. Government agencies | $ 1,873,146 | $ 345,715 | $ - | $ 2,218,861 | |||||
Obligations of states and political subdivisions | 1,736,489 | 221,893 | (5,278) | 1,953,104 | |||||
Corporate securities including public utilities | 126,533,483 | 15,841,536 | (980,357) | 141,394,662 | |||||
Mortgage-backed securities | 4,263,206 | 305,381 | (11,894) | 4,556,693 | |||||
Redeemable preferred stock | 612,023 | 22,032 | - | 634,055 | |||||
Total fixed maturity securities held to maturity | $ 135,018,347 | $ 16,736,557 | $ (997,529) | $ 150,757,375 |
3_Investments_Availableforsale
3) Investments: Available-for-sale Securities (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Available-for-sale Securities | |||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||
31-Mar-15 | |||||||||
Equity securities available for sale at estimated fair value: | |||||||||
Common stock: | |||||||||
Industrial, miscellaneous and all other | $ 7,095,225 | $ 298,891 | $ (1,010,614) | $ 6,383,502 | |||||
Total equity securities available for sale at estimated fair value | $ 7,095,225 | $ 298,891 | $ (1,010,614) | $ 6,383,502 | |||||
Mortgage loans on real estate and construction loans held for investment at amortized cost: | |||||||||
Residential | $ 52,045,350 | ||||||||
Residential construction | 29,684,359 | ||||||||
Commercial | 46,067,130 | ||||||||
Less: Allowance for loan losses | (1,902,396) | ||||||||
Total mortgage loans on real estate and construction loans held for investment | $ 125,894,443 | ||||||||
Real estate held for investment - net of depreciation | $ 113,025,790 | ||||||||
Policy and other loans at amortized cost: | |||||||||
Policy loans | $ 7,187,804 | ||||||||
Other loans | 32,809,669 | ||||||||
Less: Allowance for doubtful accounts | (813,223) | ||||||||
Total policy and other loans at amortized cost | $ 39,184,250 | ||||||||
Short-term investments at amortized cost | $ 20,620,236 | ||||||||
AsOfDecember312014Member | |||||||||
Available-for-sale Securities | |||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||
December 31, 2014: | |||||||||
Equity securities available for sale at estimated fair value: | |||||||||
Common stock: | |||||||||
Industrial, miscellaneous and all other | $ 7,179,010 | $ 393,873 | $ (820,133) | $ 6,752,750 | |||||
Total securities available for sale carried at estimated fair value | $ 7,179,010 | $ 393,873 | $ (820,133) | $ 6,752,750 | |||||
Mortgage loans on real estate and construction loans held for investment at amortized cost: | |||||||||
Residential | $ 53,592,433 | ||||||||
Residential construction | 33,071,938 | ||||||||
Commercial | 35,388,756 | ||||||||
Less: Allowance for loan losses | (2,003,055) | ||||||||
Total mortgage loans on real estate and construction loans held for investment | $ 120,050,072 | ||||||||
Real estate held for investment - net of depreciation | $ 111,411,351 | ||||||||
Policy and other loans at amortized cost: | |||||||||
Policy loans | $ 7,011,012 | ||||||||
Other loans | 27,807,829 | ||||||||
Less: Allowance for doubtful accounts | (693,413) | ||||||||
Total policy and other loans at amortized cost | $ 34,125,428 | ||||||||
Short-term investments at amortized cost | $ 27,059,495 |
3_Investments_Schedule_of_Unre
3) Investments: Schedule of Unrealized Loss on Investments (Tables) | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
Fixed Maturities | |||||||||||
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 March 31 2015 | |||||||||||
Obligations of states and political subdivisions | $ - | $ 4,322 | 1 | $ 4,322 | |||||||
Corporate securities including public utilities | 566,310 | 23 | 263,781 | 10 | 830,091 | ||||||
Mortgage-backed securities | 467 | 1 | - | 467 | |||||||
Total unrealized losses | $ 566,777 | 24 | $ 268,103 | 11 | $ 834,880 | ||||||
Fair Value | $ 9,346,785 | $ 2,522,624 | $ 11,869,409 | ||||||||
At December 31, 2014 | |||||||||||
Obligations of states and political subdivisions | $ - | 0 | $ 5,278 | 1 | $ 5,278 | ||||||
Corporate securities including public utilities | 548,310 | 21 | 432,047 | 11 | 980,357 | ||||||
Mortgage-backed securities | 3,966 | 1 | 7,928 | 1 | 11,894 | ||||||
Total unrealized losses | $ 552,276 | 22 | $ 445,253 | 13 | $ 997,529 | ||||||
Fair Value | $ 7,081,352 | $ 2,777,587 | $ 9,858,939 | ||||||||
Equity Securities | |||||||||||
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 March 31, 2015 | |||||||||||
Industrial, miscellaneous and all other | $ 461,641 | 158 | $ 548,973 | 28 | $ 1,010,614 | ||||||
Total unrealized losses | $ 461,641 | 158 | $ 548,973 | 28 | $ 1,010,614 | ||||||
Fair Value | $ 2,444,324 | $ 609,689 | $ 3,054,013 | ||||||||
At December 31, 2014 | |||||||||||
Industrial, miscellaneous and all other | $ 327,389 | 138 | $ 492,744 | 27 | $ 820,133 | ||||||
Total unrealized losses | $ 327,389 | 138 | $ 492,744 | 27 | $ 820,133 | ||||||
Fair Value | $ 2,162,425 | $ 676,706 | $ 2,839,131 | ||||||||
3_Investments_Investments_Clas
3) Investments: Investments Classified by Contractual Maturity Date (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Held-to-maturity Securities | |||||
Investments Classified by Contractual Maturity Date | |||||
Amortized Cost | Estimated Fair Value | ||||
Held to Maturity: | |||||
Due in 2015 | $ 3,816,196 | $ 3,880,262 | |||
Due in 2016 through 2019 | 33,339,908 | 36,890,422 | |||
Due in 2020 through 2024 | 25,469,059 | 28,347,845 | |||
Due after 2024 | 66,174,756 | 76,349,947 | |||
Mortgage-backed securities | 3,859,088 | 4,170,601 | |||
Redeemable preferred stock | 612,023 | 647,960 | |||
Total held to maturity | $ 133,271,030 | $ 150,287,037 | |||
Available-for-sale Securities | |||||
Investments Classified by Contractual Maturity Date | |||||
Amortized Cost | Estimated Fair Value | ||||
Available for Sale: | |||||
Common stock | $ 7,095,225 | $ 6,383,502 | |||
Total available for sale | $ 7,095,225 | $ 6,383,502 |
3_Investments_Gain_Loss_on_Inv
3) Investments: Gain (Loss) on Investments (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Tables/Schedules | |||||
Gain (Loss) on Investments | Three Months Ended March 31 | ||||
2015 | 2014 | ||||
Fixed maturity securities held to maturity: | |||||
Gross realized gains | $ 85,997 | $ - | |||
Gross realized losses | (9,776) | - | |||
Other than temporary impairments | (30,000) | (30,000) | |||
Securities available for sale: | |||||
Gross realized gains | 87,720 | 53,253 | |||
Gross realized losses | (1,016) | - | |||
Other than temporary impairments | (25,896) | - | |||
Other assets: | |||||
Gross realized gains | 257,139 | 145,740 | |||
Gross realized losses | - | - | |||
Other than temporary impairments | - | - | |||
Total | $ 364,168 | $ 168,993 |
3_Investments_Schedule_of_Majo
3) Investments: Schedule of Major categories of net investment income (Tables) | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Tables/Schedules | ||||
Schedule of Major categories of net investment income | Three Months Ended March 31 | |||
2015 | 2014 | |||
Fixed maturity securities | $ 1,980,696 | $ 2,109,121 | ||
Equity securities | 59,418 | 39,247 | ||
Mortgage loans on real estate | 1,850,626 | 1,552,110 | ||
Real estate | 1,623,741 | 1,689,595 | ||
Policy and other loans | 188,546 | 197,568 | ||
Short-term investments, principally gains on sale of mortgage loans and other | 4,225,785 | 1,899,113 | ||
Gross investment income | 9,928,812 | 7,486,754 | ||
Investment expenses | (2,105,968) | (1,844,254) | ||
Net investment income | $ 7,822,844 | $ 5,642,500 | ||
3_Investments_Schedule_of_Allo
3) Investments: Schedule of Allowance for loan losses as a contra-asset account (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Tables/Schedules | ||||||||
Schedule of Allowance for loan losses as a contra-asset account | ||||||||
Allowance for Credit Losses and Recorded Investment in Mortgage Loans | ||||||||
Commercial | Residential | Residential Construction | Total | |||||
31-Mar-15 | ||||||||
Allowance for credit losses: | ||||||||
Beginning balance - January 1, 2015 | $ 187,129 | $ 1,715,812 | $ 100,114 | $ 2,003,055 | ||||
Charge-offs | - | - | - | - | ||||
Provision | - | (100,659) | - | (100,659) | ||||
Ending balance -March 31, 2015 | $ 187,129 | $ 1,615,153 | $ 100,114 | $ 1,902,396 | ||||
Ending balance: individually evaluated for impairment | $ - | $ 245,952 | $ - | $ 245,952 | ||||
Ending balance: collectively evaluated for impairment | $ 187,129 | $ 1,369,201 | $ 100,114 | $ 1,656,444 | ||||
Ending balance: loans acquired with deteriorated credit quality | $ - | $ - | $ - | $ - | ||||
Mortgage loans: | ||||||||
Ending balance | $ 46,067,130 | $ 52,045,350 | $ 29,684,359 | $ 127,796,839 | ||||
Ending balance: individually evaluated for impairment | $ - | $ 2,544,731 | $ - | $ 2,544,731 | ||||
Ending balance: collectively evaluated for impairment | $ 46,067,130 | $ 49,500,619 | $ 29,684,359 | $ 125,252,108 | ||||
Ending balance: loans acquired with deteriorated credit quality | $ - | $ - | $ - | $ - | ||||
31-Dec-14 | ||||||||
Allowance for credit losses: | ||||||||
Beginning balance - January 1, 2014 | $ 187,129 | $ 1,364,847 | $ 100,114 | $ 1,652,090 | ||||
Charge-offs | - | (38,444) | - | (38,444) | ||||
Provision | - | 389,409 | - | 389,409 | ||||
Ending balance - December 31, 2014 | $ 187,129 | $ 1,715,812 | $ 100,114 | $ 2,003,055 | ||||
Ending balance: individually evaluated for impairment | $ - | $ 153,446 | $ - | $ 153,446 | ||||
Ending balance: collectively evaluated for impairment | $ 187,129 | $ 1,562,366 | $ 100,114 | $ 1,849,609 | ||||
Ending balance: loans acquired with deteriorated credit quality | $ - | $ - | $ - | $ - | ||||
Mortgage loans: | ||||||||
Ending balance | $ 35,388,756 | $ 53,592,433 | $ 33,071,938 | $ 122,053,127 | ||||
Ending balance: individually evaluated for impairment | $ - | $ 1,556,182 | $ 414,499 | $ 1,970,681 | ||||
Ending balance: collectively evaluated for impairment | $ 35,388,756 | $ 52,036,251 | $ 32,657,439 | $ 120,082,446 | ||||
Ending balance: loans acquired with deteriorated credit quality | $ - | $ - | $ - | $ - |
3_Investments_Schedule_of_agin
3) Investments: Schedule of aging of mortgage loans (Tables) | 3 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
Tables/Schedules | ||||||||||
Schedule of aging of mortgage loans | ||||||||||
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 | ||
31-Mar-15 | ||||||||||
Commercial | $ - | $ 272,934 | $ - | $ - | $ 272,934 | $ 45,794,196 | $ 46,067,130 | $ (187,129) | $ 45,880,001 | |
Residential | 1,092,140 | 706,753 | 4,107,831 | 2,544,731 | 8,451,455 | 43,593,895 | 52,045,350 | (1,615,153) | 50,430,197 | |
Residential Construction | - | 25,049 | 64,895 | - | 89,944 | 29,594,415 | 29,684,359 | (100,114) | 29,584,245 | |
Total | $ 1,092,140 | $ 1,004,736 | $ 4,172,726 | $ 2,544,731 | $ 8,814,333 | $ 118,982,506 | $ 127,796,839 | $ (1,902,396) | $ 125,894,443 | |
31-Dec-14 | ||||||||||
Commercial | $ - | $ - | $ - | $ - | $ - | $ 35,388,756 | $ 35,388,756 | $ (187,129) | $ 35,201,627 | |
Residential | 1,631,142 | 1,174,516 | 5,464,901 | 1,556,182 | 9,826,741 | 43,765,692 | 53,592,433 | (1,715,812) | 51,876,621 | |
Residential Construction | - | - | 64,895 | 414,499 | 479,394 | 32,592,544 | 33,071,938 | (100,114) | 32,971,824 | |
Total | $ 1,631,142 | $ 1,174,516 | $ 5,529,796 | $ 1,970,681 | $ 10,306,135 | $ 111,746,992 | $ 122,053,127 | $ (2,003,055) | $ 120,050,072 |
3_Investments_Schedule_of_Impa
3) Investments: Schedule of Impaired Mortgage Loans (Tables) | 3 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
Tables/Schedules | ||||||||||
Schedule of Impaired Mortgage Loans | ||||||||||
Impaired Loans | ||||||||||
Recorded Investment | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | Interest Income Recognized | ||||||
31-Mar-15 | ||||||||||
With no related allowance recorded: | ||||||||||
Commercial | $ - | $ - | $ - | $ - | $ - | |||||
Residential | - | - | - | - | - | |||||
Residential construction | - | - | - | - | - | |||||
With an allowance recorded: | ||||||||||
Commercial | $ - | $ - | $ - | $ - | $ - | |||||
Residential | 2,544,731 | 2,544,731 | 245,952 | 2,544,731 | - | |||||
Residential construction | - | - | - | - | - | |||||
Total: | ||||||||||
Commercial | $ - | $ - | $ - | $ - | $ - | |||||
Residential | 2,544,731 | 2,544,731 | 245,952 | 2,544,731 | - | |||||
Residential construction | - | - | - | - | - | |||||
31-Dec-14 | ||||||||||
With no related allowance recorded: | ||||||||||
Commercial | $ - | $ - | $ - | $ - | $ - | |||||
Residential | - | - | - | - | - | |||||
Residential construction | 414,499 | 414,499 | - | 414,499 | - | |||||
With an allowance recorded: | ||||||||||
Commercial | $ - | $ - | $ - | $ - | $ - | |||||
Residential | 1,556,182 | 1,556,182 | 153,446 | 1,556,182 | - | |||||
Residential construction | - | - | - | - | - | |||||
Total: | ||||||||||
Commercial | $ - | $ - | $ - | $ - | $ - | |||||
Residential | 1,556,182 | 1,556,182 | 153,446 | 1,556,182 | - | |||||
Residential construction | 414,499 | 414,499 | - | 414,499 | - |
3_Investments_Schedule_Of_Cred
3) Investments: Schedule Of Credit Risk Of Mortgage Loans Based On Performance Status (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Tables/Schedules | ||||||||||||||||
Schedule Of Credit Risk Of Mortgage Loans Based On Performance 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 | |||||||||||||
31-Mar-15 | 31-Dec-14 | 31-Mar-15 | 31-Dec-14 | 31-Mar-15 | 31-Dec-14 | 31-Mar-15 | 31-Dec-14 | |||||||||
Performing | $ 46,067,130 | $ 35,388,756 | $ 45,392,788 | $ 46,571,350 | $ 29,619,464 | $ 32,592,544 | $ 121,079,382 | $ 114,552,650 | ||||||||
Nonperforming | - | - | 6,652,562 | 7,021,083 | 64,895 | 479,394 | 6,717,457 | 7,500,477 | ||||||||
Total | $ 46,067,130 | $ 35,388,756 | $ 52,045,350 | $ 53,592,433 | $ 29,684,359 | $ 33,071,938 | $ 127,796,839 | $ 122,053,127 | ||||||||
3_Investments_Schedule_of_Mort
3) Investments: Schedule of Mortgage loans on a nonaccrual status (Tables) | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Tables/Schedules | ||||
Schedule of Mortgage loans on a nonaccrual status | ||||
Mortgage Loans on Nonaccrual Status | ||||
As of March 31 2015 | As of December 31 2014 | |||
Residential | $ 6,652,562 | $ 7,021,083 | ||
Residential construction | 64,895 | 479,394 | ||
Total | $ 6,717,457 | $ 7,500,477 |
3_Investments_Schedule_of_loan
3) Investments: Schedule of loan loss reserve which is included in other liabilities and accrued expenses (Tables) | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Tables/Schedules | ||||
Schedule of loan loss reserve which is included in other liabilities and accrued expenses | As of March 31 2015 | As of December 31 2014 | ||
Balance, beginning of period | $ 1,718,150 | $ 5,506,532 | ||
Provisions for losses | 666,739 | 3,053,403 | ||
Charge-offs | (173,106) | (6,841,785) | ||
Balance, end of period | $ 2,211,783 | $ 1,718,150 |
4_Stockbased_Compensation_Sche
4) Stock-based Compensation: Schedule of stock inventive plan changes (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Tables/Schedules | |||||||||
Schedule of stock inventive plan changes | |||||||||
Number of Class A Shares | Weighted Average Exercise Price | Number of Class C Shares | Weighted Average Exercise Price | ||||||
Outstanding at December 31, 2014 | 512,795 | $ 3.20 | 691,591 | $ 2.00 | |||||
Granted | - | - | |||||||
Exercised | - | (114,023) | 2.14 | ||||||
Cancelled | (8,846) | 2.31 | - | ||||||
Outstanding at March 31, 2015 | 503,949 | $ 3.21 | 577,568 | $ 2.62 | |||||
As of March 31, 2015: | |||||||||
Options exercisable | 379,946 | $ 2.75 | 471,943 | $ 2.15 | |||||
As of March 31, 2015: | |||||||||
Available options for future grant | 266,649 | - | |||||||
Weighted average contractual term of options | |||||||||
outstanding at March 31, 2015 | 7.57 years | 2.93 years | |||||||
Weighted average contractual term of options | |||||||||
exercisable at March 31, 2015 | 6.91 years | 2.30 years | |||||||
Aggregated intrinsic value of options | |||||||||
outstanding at March 31, 2015 (1) | $1,076,880 | $1,572,653 | |||||||
Aggregated intrinsic value of options | |||||||||
exercisable at March 31, 2015 (1) | $988,022 | $1,506,415 | |||||||
(1) The Company used a stock price of $5.34 as of March 31, 2015 to derive intrinsic value. |
5_Earnings_Per_Share_Schedule_
5) Earnings Per Share: Schedule Of Calculation Of Numerator And Denominator In Earnings Per Share (Tables) | 3 Months Ended | |||||
Mar. 31, 2015 | ||||||
Tables/Schedules | ||||||
Schedule Of Calculation Of Numerator And Denominator In Earnings Per Share | The basic and diluted earnings per share amounts were calculated as follows: | |||||
Three Months Ended March 31 | ||||||
2015 | 2014 | |||||
Numerator: | ||||||
Net earnings | $ 1,863,703 | $ 138,848 | ||||
Denominator: | ||||||
Basic weighted-average shares outstanding | 12,934,816 | 12,400,954 | ||||
Effect of dilutive securities: | ||||||
Employee stock options | 535,084 | 462,941 | ||||
Diluted weighted-average shares outstanding | 13,469,900 | 12,863,895 | ||||
Basic net earnings per share | $0.14 | $0.01 | ||||
Diluted net earnings per share | $0.14 | $0.01 |
6_Business_Segments_Schedule_o
6) Business Segments: Schedule of Revenues and Expenses by Reportable Segment (Tables) | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
Tables/Schedules | |||||||||||
Schedule of Revenues and Expenses by Reportable Segment | |||||||||||
Life Insurance | Cemetery/ Mortuary | Mortgage | Eliminations | Consolidated | |||||||
For the Three Months Ended | |||||||||||
31-Mar-15 | |||||||||||
Revenues from external customers | $ 20,985,500 | $ 3,098,238 | $ 39,965,894 | $ - | $ 64,049,632 | ||||||
Intersegment revenues | 2,818,867 | 311,998 | 88,487 | (3,219,352) | - | ||||||
Segment profit before income taxes | 1,403,851 | 409,175 | 1,185,358 | - | 2,998,384 | ||||||
Identifiable Assets | 677,059,957 | 104,778,721 | 62,765,551 | (142,826,038) | 701,778,191 | ||||||
Goodwill | 2,765,570 | - | - | - | 2,765,570 | ||||||
For the Three Months Ended | |||||||||||
31-Mar-14 | |||||||||||
Revenues from external customers | $ 18,472,816 | $ 3,040,568 | $ 23,539,892 | $ - | $ 45,053,276 | ||||||
Intersegment revenues | 2,061,720 | 336,298 | 164,146 | (2,562,164) | - | ||||||
Segment profit before income taxes | 1,331,469 | 182,778 | (1,348,260) | - | 165,987 | ||||||
Identifiable Assets | 604,260,546 | 108,627,471 | 49,375,595 | (135,523,285) | 626,740,327 | ||||||
Goodwill | 391,848 | 285,191 | - | - | 677,039 |
7_Fair_Value_of_Financial_Inst1
7): Fair Value of Financial Instruments: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
As of September 30, 2014 | |||||||||
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 | $ 6,383,502 | $ 6,383,502 | $ - | $ - | |||||
Total securities available for sale | $ 6,383,502 | $ 6,383,502 | $ - | $ - | |||||
Restricted assets of cemeteries and mortuaries | $ 715,791 | $ 715,791 | $ - | $ - | |||||
Cemetery perpetual care trust investments | 654,458 | 654,458 | - | - | |||||
Derivatives - interest rate lock commitments | 5,002,929 | - | - | 5,002,929 | |||||
Total assets accounted for at fair value on a recurring basis | $ 12,756,680 | $ 7,753,751 | $ - | $ 5,002,929 | |||||
Liabilities accounted for at fair value on a recurring basis | |||||||||
Policyholder account balances | $ (51,516,976) | $ - | $ - | $ (51,516,976) | |||||
Future policy benefits - annuities | (68,843,240) | - | - | (68,843,240) | |||||
Derivatives - bank loan interest rate swaps | (27,419) | - | - | (27,419) | |||||
- call options | (37,476) | (37,476) | - | - | |||||
- put options | (40,727) | (40,727) | - | - | |||||
- interest rate lock commitments | (585,187) | - | - | (585,187) | |||||
Total liabilities accounted for at fair value on a recurring basis | $ (121,051,025) | $ (78,203) | $ - | $ (120,972,822) | |||||
AsOfDecember312014Member | |||||||||
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 | $ 6,752,750 | $ 6,752,750 | $ - | $ - | |||||
Total securities available for sale | $ 6,752,750 | $ 6,752,750 | $ - | $ - | |||||
Restricted assets of cemeteries and mortuaries | $ 715,202 | $ 715,202 | $ - | $ - | |||||
Cemetery perpetual care trust investments | 695,235 | 695,235 | - | - | |||||
Derivatives - interest rate lock commitments | 2,111,529 | - | - | 2,111,529 | |||||
Total assets accounted for at fair value on a recurring basis | $ 10,274,716 | $ 8,163,187 | $ - | $ 2,111,529 | |||||
Liabilities accounted for at fair value on a recurring basis | |||||||||
Policyholder account balances | $ (45,310,699) | $ - | $ - | $ (45,310,699) | |||||
Future policy benefits - annuities | (65,540,985) | - | - | (65,540,985) | |||||
Derivatives - bank loan interest rate swaps | (31,370) | - | - | (31,370) | |||||
- call options | (116,036) | (116,036) | - | - | |||||
- put options | (11,867) | (11,867) | - | - | |||||
- interest rate lock commitment | (181,678) | - | - | (181,678) | |||||
Total liabilities accounted for at fair value on a recurring basis | $ (111,192,635) | $ (127,903) | $ - | $ (111,064,732) |
7_Fair_Value_of_Financial_Inst2
7): Fair Value of Financial Instruments: Schedule of Changes in the consolidated balance sheet line items measured using level 3 inputs (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
As of September 30, 2014 | |||||||||
Schedule of Changes in the consolidated balance sheet line items measured using level 3 inputs | 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, 2014 | $ (45,310,699) | $ (65,540,985) | $ 1,929,851 | $ (31,370) | |||||
Total gains (losses): | |||||||||
Included in earnings | (6,206,277) | (3,302,255) | - | - | |||||
Included in other comprehensive income (loss) | - | - | 2,487,891 | 3,951 | |||||
Balance - March 31, 2015 | $ (51,516,976) | $ (68,843,240) | $ 4,417,742 | $ (27,419) | |||||
AsOfDecember312014Member | |||||||||
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, 2013 | $ (48,000,668) | $ (65,052,928) | $ 1,487,908 | $ (58,310) | |||||
Total gains (losses): | |||||||||
Included in earnings | 2,689,969 | (488,057) | - | - | |||||
Included in other | |||||||||
comprehensive income | - | - | 441,943 | 26,940 | |||||
Balance - December 31, 2014 | $ (45,310,699) | $ (65,540,985) | $ 1,929,851 | $ (31,370) |
7_Fair_Value_of_Financial_Inst3
7): Fair Value of Financial Instruments: Schedule of Fair Value Measurements, Nonrecurring (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
AsOfMarch312015Member | ||||||||
Schedule of Fair Value Measurements, Nonrecurring | ||||||||
Total | Quoted Prices | Significant | Significant | |||||
in Active | Observable | Unobservable | ||||||
Markets for | Inputs | Inputs | ||||||
Identical Assets | (Level 2) | (Level 3) | ||||||
(Level 1) | ||||||||
Assets accounted for at fair value on a nonrecurring basis | ||||||||
Mortgage servicing rights | $ 987,707 | - | - | $ 987,707 | ||||
Mortgage loans on real estate | 320,000 | - | - | 320,000 | ||||
Total assets accounted for at fair value on a nonrecurring basis | $ 1,307,707 | $ - | $ - | $ 1,307,707 | ||||
AsOfDecember312014Member | ||||||||
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 | $ 3,741,381 | - | - | $ 3,741,381 | ||||
Real estate held for investment | 53,500 | - | - | 53,500 | ||||
Total assets accounted for at fair value on a | ||||||||
nonrecurring basis | $ 3,794,881 | $ - | $ - | $ 3,794,881 |
7_Fair_Value_of_Financial_Inst4
7): Fair Value of Financial Instruments: Schedule of Financial Instruments Carried at Other Than Fair Value (Tables) | 3 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
Tables/Schedules | ||||||||||
Schedule of Financial Instruments Carried at Other Than Fair Value | ||||||||||
Carrying Value | Level 1 | Level 2 | Level 3 | Total Estimated Fair Value | ||||||
Assets | ||||||||||
Mortgage loans: | ||||||||||
Residential | $ 50,430,197 | $ - | $ - | $ 53,693,961 | $ 53,693,961 | |||||
Residential construction | 29,584,245 | - | - | 29,584,245 | 29,584,245 | |||||
Commercial | 45,880,001 | - | - | 47,829,817 | 47,829,817 | |||||
Mortgage loans, net | $ 125,894,443 | $ - | $ - | $ 131,108,023 | $ 131,108,023 | |||||
Policy loans | 7,187,804 | - | - | 7,187,804 | 7,187,804 | |||||
Other loans | 31,996,446 | - | - | 31,996,446 | 31,996,446 | |||||
Short-term investments | 20,620,236 | - | - | 20,620,236 | 20,620,236 | |||||
Liabilities | ||||||||||
Bank and other loans payable | $ (29,410,570) | $ - | $ - | $ (29,410,570) | $ (29,410,570) | |||||
The carrying values and estimated fair values for such financial instruments, and their corresponding placement in the fair value hierarchy, are summarized as follows as of December 31, 2014: | ||||||||||
Carrying Value | Level 1 | Level 2 | Level 3 | Total Estimated Fair Value | ||||||
Assets | ||||||||||
Mortgage loans: | ||||||||||
Residential | $ 51,876,621 | $ - | $ - | $ 55,247,638 | $ 55,247,638 | |||||
Residential construction | 32,971,824 | - | - | 32,971,824 | 32,971,824 | |||||
Commercial | 35,201,627 | - | - | 36,829,266 | 36,829,266 | |||||
Mortgage loans, net | $ 120,050,072 | $ - | $ - | $ 125,048,728 | $ 125,048,728 | |||||
Policy loans | 7,011,012 | - | - | 7,011,012 | 7,011,012 | |||||
Other loans | 27,114,416 | - | - | 27,114,416 | 27,114,416 | |||||
Short-term investments | 27,059,495 | - | - | 27,059,495 | 27,059,495 | |||||
Liabilities | ||||||||||
Bank and other loans payable | $ (28,989,008) | $ - | $ - | $ (28,989,008) | $ (28,989,008) |
9_Derivative_Commitments_Sched
9) Derivative Commitments: Schedule of Derivative Assets at Fair Value (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Tables/Schedules | ||||||||||||||||
Schedule of Derivative Assets at Fair Value | ||||||||||||||||
Fair Value of Derivative Instruments | ||||||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||||||
31-Mar-15 | 31-Dec-14 | 31-Mar-15 | 31-Dec-14 | |||||||||||||
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 | $5,002,929 | other assets | $2,111,529 | Other liabilities | $ 585,187 | Other liabilities | $ 181,678 | ||||||||
Call options | -- | -- | -- | -- | Other liabilities | 37,476 | Other liabilities | 116,036 | ||||||||
Put options | -- | -- | -- | -- | Other liabilities | 40,727 | Other liabilities | 11,867 | ||||||||
Interest rate swaps | -- | -- | -- | -- | Bank loans payable | 27,419 | Bank loans payable | 31,370 | ||||||||
Total | $5,002,929 | $2,111,529 | $ 690,809 | $ 340,951 |
9_Derivative_Commitments_Sched1
9) Derivative Commitments: Schedule of Gains and Losses on Derivatives (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Tables/Schedules | |||||
Schedule of Gains and Losses on Derivatives | Net Amount Gain (Loss) Recognized in OCI | ||||
Three Months Ended March 31 | |||||
Derivative - Cash Flow Hedging Relationships: | 2015 | 2014 | |||
Interest Rate Lock Commitments | $ 2,487,891 | $ 449,263 | |||
Interest Rate Swaps | 3,951 | 6,852 | |||
Sub Total | 2,491,842 | 456,115 | |||
Tax Effect | 971,819 | 177,885 | |||
Total | $ 1,520,023 | $ 278,230 | |||
11_Mortgage_Servicing_Rights_S
11) Mortgage Servicing Rights: Schedule of Mortgage Servicing Rights (Tables) | 3 Months Ended | ||
Mar. 31, 2015 | |||
Tables/Schedules | |||
Schedule of Mortgage Servicing Rights | |||
The following is a summary of the MSR activity for the periods presented. | |||
As of March 31 2015 | As of December 31 2014 | ||
Amortized cost: | |||
Balance before valuation allowance at beginning of year | $ 7,834,747 | $ 4,844,101 | |
MSRs proceeds from loan sales | 987,707 | 3,741,381 | |
Amortization | (259,966) | (750,735) | |
Application of valuation allowance to write down MSRs with other than temporary impairment | - | - | |
Balance before valuation allowance at year end | $ 8,562,488 | $ 7,834,747 | |
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 end of period | $ - | $ - | |
Mortgage servicing rights, net | $ 8,562,488 | $ 7,834,747 | |
Estimated fair value of MSRs at end of period | $ 8,926,200 | $ 8,485,570 |
12_Mergers_Acquisitions_and_Di1
12) Mergers, Acquisitions and Dispositions Disclosures: Schedule of pro forma financial information (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Tables/Schedules | |||||
Schedule of pro forma financial information | |||||
For the Three Months Ended March 31 (unaudited) | |||||
2015 | 2014 | ||||
Total revenues | $ 64,049,632 | $ 46,521,936 | |||
Net earnings | $ 1,863,703 | $ 342,683 | |||
Net earnings per Class A equivalent common share | $ 0.14 | $ 0.03 | |||
Net earnings per Class A equivalent common share assuming dilution | $ 0.14 | $ 0.03 |
3_Investments_Heldtomaturity_S1
3) Investments: Held-to-maturity Securities (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Amortized Cost | $133,271,030 | $135,018,347 |
Held-to-maturity Securities, Unrecognized Holding Gain | 17,850,887 | 16,736,557 |
Held-to-maturity Securities, Unrecognized Holding Loss | -834,880 | -997,529 |
HeldToMaturitySecuritiesEstimatedFairValue | 150,287,037 | 150,757,375 |
US Treasury and Government | ||
Amortized Cost | 1,870,964 | 1,873,146 |
Held-to-maturity Securities, Unrecognized Holding Gain | 361,034 | 345,715 |
HeldToMaturitySecuritiesEstimatedFairValue | 2,231,998 | 2,218,861 |
US States and Political Subdivisions Debt Securities | ||
Amortized Cost | 1,984,709 | 1,736,489 |
Held-to-maturity Securities, Unrecognized Holding Gain | 247,576 | 221,893 |
Held-to-maturity Securities, Unrecognized Holding Loss | -4,322 | -5,278 |
HeldToMaturitySecuritiesEstimatedFairValue | 2,227,963 | 1,953,104 |
Corporate Debt Securities | ||
Amortized Cost | 124,944,246 | 126,533,483 |
Held-to-maturity Securities, Unrecognized Holding Gain | 16,894,360 | 15,841,536 |
Held-to-maturity Securities, Unrecognized Holding Loss | -830,091 | -980,357 |
HeldToMaturitySecuritiesEstimatedFairValue | 141,008,515 | 141,394,662 |
Collateralized Mortgage Backed Securities | ||
Amortized Cost | 3,859,088 | 4,263,206 |
Held-to-maturity Securities, Unrecognized Holding Gain | 311,980 | 305,381 |
Held-to-maturity Securities, Unrecognized Holding Loss | -467 | -11,894 |
HeldToMaturitySecuritiesEstimatedFairValue | 4,170,601 | 4,556,693 |
Redeemable Preferred Stock | ||
Amortized Cost | 612,023 | 612,023 |
Held-to-maturity Securities, Unrecognized Holding Gain | 35,937 | 22,032 |
HeldToMaturitySecuritiesEstimatedFairValue | $647,960 | $634,055 |
3_Investments_Availableforsale1
3) Investments: Available-for-sale Securities (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Available-for-sale Securities, Amortized Cost Basis | $7,095,225 | |
AvailableForSaleSecuritiesEstimatedFairValue | 6,383,502 | |
Mortgage loans on real estate and construction | 125,894,443 | 120,050,072 |
Mortgage loans on real estate and construction, allowance for losses | -1,902,396 | -2,003,055 |
Real estate held for investment, net of depreciation | 113,025,790 | 111,411,351 |
Loans held for sale policy loans | 7,187,804 | 7,011,012 |
Disposal Group, Including Discontinued Operation, Other Loans | 32,809,669 | 27,807,829 |
Loans held for sale allowance for doubtful accounts | -813,223 | -693,413 |
Disposal Group, Including Discontinued Operation, Loans Receivable, Net | 39,184,250 | 34,125,428 |
Short-term investments at amortized cost | 20,620,236 | 27,059,495 |
Residential Mortgage | ||
Mortgage loans on real estate and construction | 52,045,350 | 53,592,433 |
Residential Construction | ||
Mortgage loans on real estate and construction | 29,684,359 | 33,071,938 |
Commercial Loan | ||
Mortgage loans on real estate and construction | 46,067,130 | 35,388,756 |
Common Stock | ||
Available-for-sale Securities, Amortized Cost Basis | 7,095,225 | |
AvailableForSaleSecuritiesEstimatedFairValue | 6,383,502 | |
Industrial, miscellaneous and all other equity securities | ||
Available-for-sale Securities, Amortized Cost Basis | 7,095,225 | 7,179,010 |
Available-for-sale Securities, Gross Unrealized Gains | 298,891 | 393,873 |
AvailableForSaleSecuritiesGrossUnrealizedLosses | -1,010,614 | -820,133 |
AvailableForSaleSecuritiesEstimatedFairValue | 6,383,502 | 6,752,750 |
Equity Securities | ||
Available-for-sale Securities, Amortized Cost Basis | 7,095,225 | 7,179,010 |
Available-for-sale Securities, Gross Unrealized Gains | 298,891 | 393,873 |
AvailableForSaleSecuritiesGrossUnrealizedLosses | -1,010,614 | -820,133 |
AvailableForSaleSecuritiesEstimatedFairValue | $6,383,502 | $6,752,750 |
3_Investments_Schedule_of_Unre1
3) Investments: Schedule of Unrealized Loss on Investments (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Held-to-maturity Securities, Unrecognized Holding Loss | $834,880 | $997,529 |
Available-for-sale Securities, Fair Value Disclosure | 3,054,013 | 2,839,131 |
US States and Political Subdivisions Debt Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 4,322 | 5,278 |
Corporate Debt Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 830,091 | 980,357 |
Collateralized Mortgage Backed Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 467 | 11,894 |
Industrial, miscellaneous and all other equity securities | ||
AvailableForSaleSecuritiesGrossUnrealizedLosses | 1,010,614 | 820,133 |
Equity Securities | ||
AvailableForSaleSecuritiesGrossUnrealizedLosses | 1,010,614 | 820,133 |
Less than 12 months | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 566,777 | 552,276 |
No. of Investment Positions | 24 | 22 |
Held-to-maturity Securities, Fair Value | 9,346,785 | 7,081,352 |
Available-for-sale Securities, Fair Value Disclosure | 2,444,324 | 2,162,425 |
Less than 12 months | Corporate Debt Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 566,310 | 548,310 |
No. of Investment Positions | 23 | 21 |
Less than 12 months | Collateralized Mortgage Backed Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 467 | 3,966 |
No. of Investment Positions | 1 | 1 |
Less than 12 months | U.S. Treasury Securities | ||
No. of Investment Positions | 0 | |
Less than 12 months | Industrial, miscellaneous and all other equity securities | ||
No. of Investment Positions | 158 | 138 |
AvailableForSaleSecuritiesGrossUnrealizedLosses | 461,641 | 327,389 |
Less than 12 months | Equity Securities | ||
No. of Investment Positions | 158 | 138 |
AvailableForSaleSecuritiesGrossUnrealizedLosses | 461,641 | 327,389 |
More than 12 months | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 268,103 | 445,253 |
No. of Investment Positions | 11 | 13 |
Held-to-maturity Securities, Fair Value | 2,522,624 | 2,777,587 |
Available-for-sale Securities, Fair Value Disclosure | 609,689 | 676,706 |
More than 12 months | US States and Political Subdivisions Debt Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 4,322 | |
No. of Investment Positions | 1 | |
More than 12 months | Corporate Debt Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 263,781 | 432,047 |
No. of Investment Positions | 10 | 11 |
More than 12 months | Collateralized Mortgage Backed Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 7,928 | |
No. of Investment Positions | 1 | |
More than 12 months | U.S. Treasury Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 5,278 | |
No. of Investment Positions | 1 | |
More than 12 months | Industrial, miscellaneous and all other equity securities | ||
No. of Investment Positions | 28 | 27 |
AvailableForSaleSecuritiesGrossUnrealizedLosses | 548,973 | 492,744 |
More than 12 months | Equity Securities | ||
No. of Investment Positions | 28 | 27 |
AvailableForSaleSecuritiesGrossUnrealizedLosses | 548,973 | 492,744 |
Total | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 834,880 | 997,529 |
Held-to-maturity Securities, Fair Value | 11,869,409 | 9,858,939 |
Total | US States and Political Subdivisions Debt Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 4,322 | |
Total | Corporate Debt Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 830,091 | 980,357 |
Total | Collateralized Mortgage Backed Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 467 | 11,894 |
Total | U.S. Treasury Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | $5,278 |
3_Investments_Details
3) Investments (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Details | |||
Average market value over amortized cost | 93.40% | 90.80% | |
Other than Temporary Impairment, Credit Losses Recognized in Earnings, Period Increase (Decrease) | $30,000 | $30,000 |
3_Investments_Equity_Securitie
3) Investments: Equity Securities - Additional (Details) | Mar. 31, 2015 | Dec. 31, 2014 |
Details | ||
Average Market Value of Security over initial investment | 75.10% | 77.60% |
3_Investments_Investments_Clas1
3) Investments: Investments Classified by Contractual Maturity Date (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Amortized Cost | $133,271,030 | $135,018,347 |
HeldToMaturitySecuritiesEstimatedFairValue | 150,287,037 | 150,757,375 |
Available-for-sale Securities, Amortized Cost Basis | 7,095,225 | |
AvailableForSaleSecuritiesEstimatedFairValue | 6,383,502 | |
Collateralized Mortgage Backed Securities | ||
Amortized Cost | 3,859,088 | 4,263,206 |
HeldToMaturitySecuritiesEstimatedFairValue | 4,170,601 | 4,556,693 |
Redeemable Preferred Stock | ||
Amortized Cost | 612,023 | 612,023 |
HeldToMaturitySecuritiesEstimatedFairValue | 647,960 | 634,055 |
Common Stock | ||
Available-for-sale Securities, Amortized Cost Basis | 7,095,225 | |
AvailableForSaleSecuritiesEstimatedFairValue | 6,383,502 | |
Due in 2015 | ||
Amortized Cost | 3,816,196 | |
HeldToMaturitySecuritiesEstimatedFairValue | 3,880,262 | |
Due in 2016 through 2019 | ||
Amortized Cost | 33,339,908 | |
HeldToMaturitySecuritiesEstimatedFairValue | 36,890,422 | |
Due in 2020 through 2024 | ||
Amortized Cost | 25,469,059 | |
HeldToMaturitySecuritiesEstimatedFairValue | 28,347,845 | |
Due after 2024 | ||
Amortized Cost | 66,174,756 | |
HeldToMaturitySecuritiesEstimatedFairValue | $76,349,947 |
3_Investments_Gain_Loss_on_Inv1
3) Investments: Gain (Loss) on Investments (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Fixed maturity securities held to maturity: | $364,168 | $168,993 |
Categories of Investments, Marketable Securities, Held-to-maturity Securities | ||
Gross Realized Gains | 85,997 | |
Gross Realized Losses | -9,776 | |
Other than Temporary Impairments | -30,000 | -30,000 |
Categories of Investments, Marketable Securities, Available-for-sale Securities | ||
Gross Realized Gains | 87,720 | 53,253 |
Gross Realized Losses | -1,016 | |
Other than Temporary Impairments | -25,896 | |
Other Assets | ||
Gross Realized Gains | $257,139 | $145,740 |
3_Investments_Net_carrying_amo
3) Investments: Net carrying amount of held to maturity securities (Details) (Categories of Investments, Marketable Securities, Held-to-maturity Securities, USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Categories of Investments, Marketable Securities, Held-to-maturity Securities | |
Net carrying amount for sales of securities | $257,962 |
Net realized gain related to sales of securities | $8,962 |
3_Investments_Schedule_of_Majo1
3) Investments: Schedule of Major categories of net investment income (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Gross investment income | $9,928,812 | $7,486,754 |
Investment Income, Investment Expense | -2,105,968 | -1,844,254 |
Net Investment Income | 7,822,844 | 5,642,500 |
Fixed Maturities | ||
Gross investment income | 1,980,696 | 2,109,121 |
Equity Securities | ||
Gross investment income | 59,418 | 39,247 |
Mortgage loans on real estate | ||
Gross investment income | 1,850,626 | 1,552,110 |
Real Estate | ||
Gross investment income | 1,623,741 | 1,689,595 |
Policy, Student and other loans | ||
Gross investment income | 188,546 | 197,568 |
Short-term investments, principally gains on sale of mortgage loans | ||
Gross investment income | $4,225,785 | $1,899,113 |
3_Investments_Net_Investment_I
3) Investments: Net Investment Income - Additional (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Net Investment Income | $7,822,844 | $5,642,500 | |
Securities on deposit for regulatory authorities | 9,310,227 | 8,886,001 | |
Cemeteries and mortuaries | |||
Net Investment Income | $92,922 | $94,745 |
3_Investments_Mortgage_Loans_A
3) Investments: Mortgage Loans - Additional (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Details | ||
Mortgage loans on real estate balances, net of allowance for losses | $1,902,396 | $2,003,055 |
3_Investments_Schedule_of_Allo1
3) Investments: Schedule of Allowance for loan losses as a contra-asset account (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Financing Receivable, Allowance for Credit Losses, Beginning Balance | $2,003,055 | $1,652,090 | |
Allowance for credit losses, Charge-offs | -38,444 | ||
Allowance for credit losses, Provision | -100,659 | 389,409 | |
Financing Receivable, Allowance for Credit Losses, Ending Balance | 1,902,396 | 2,003,055 | |
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment | 245,952 | 153,446 | |
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment | 1,656,444 | 1,849,609 | |
Mortgage loans | 127,796,839 | 122,053,127 | |
Financing Receivable, Individually Evaluated for Impairment | 2,544,731 | 1,970,681 | |
Financing Receivable, Collectively Evaluated for Impairment | 125,252,108 | 120,082,446 | |
Commercial Loan | |||
Financing Receivable, Allowance for Credit Losses, Beginning Balance | 187,129 | ||
Financing Receivable, Allowance for Credit Losses, Ending Balance | 187,129 | 187,129 | 187,129 |
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment | 187,129 | 187,129 | |
Mortgage loans | 46,067,130 | 35,388,756 | |
Financing Receivable, Collectively Evaluated for Impairment | 46,067,130 | 35,388,756 | |
Residential Mortgage | |||
Financing Receivable, Allowance for Credit Losses, Beginning Balance | 1,715,812 | 1,364,847 | |
Allowance for credit losses, Charge-offs | -38,444 | ||
Allowance for credit losses, Provision | -100,659 | 389,409 | |
Financing Receivable, Allowance for Credit Losses, Ending Balance | 1,615,153 | 1,715,812 | |
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment | 245,952 | 153,446 | |
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment | 1,369,201 | 1,562,366 | |
Mortgage loans | 52,045,350 | 53,592,433 | |
Financing Receivable, Individually Evaluated for Impairment | 2,544,731 | 1,556,182 | |
Financing Receivable, Collectively Evaluated for Impairment | 49,500,619 | 52,036,251 | |
Residential Construction | |||
Financing Receivable, Allowance for Credit Losses, Beginning Balance | 100,114 | ||
Financing Receivable, Allowance for Credit Losses, Ending Balance | 100,114 | 100,114 | 100,114 |
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment | 100,114 | 100,114 | |
Mortgage loans | 29,684,359 | 33,071,938 | |
Financing Receivable, Individually Evaluated for Impairment | 414,499 | ||
Financing Receivable, Collectively Evaluated for Impairment | $29,684,359 | $32,657,439 |
3_Investments_Schedule_of_agin1
3) Investments: Schedule of aging of mortgage loans (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2015 | Dec. 31, 2014 | |||
Mortgage Loans during period | $127,796,839 | $122,053,127 | ||
Mortgage Loans, Allowance for Loan Losses | -1,902,396 | -2,003,055 | ||
Net Mortgage Loans | 125,894,443 | 120,050,072 | ||
Commercial Loan | ||||
Mortgage Loans during period | 46,067,130 | 35,388,756 | ||
Mortgage Loans, Allowance for Loan Losses | -187,129 | -187,129 | ||
Net Mortgage Loans | 45,880,001 | 35,201,627 | ||
Residential Mortgage | ||||
Mortgage Loans during period | 52,045,350 | 53,592,433 | ||
Mortgage Loans, Allowance for Loan Losses | -1,615,153 | -1,715,812 | ||
Net Mortgage Loans | 50,430,197 | 51,876,621 | ||
Residential Construction | ||||
Mortgage Loans during period | 29,684,359 | 33,071,938 | ||
Mortgage Loans, Allowance for Loan Losses | -100,114 | -100,114 | ||
Net Mortgage Loans | 29,584,245 | 32,971,824 | ||
Past due 30 to 59 days | ||||
Mortgage Loans during period | 1,092,140 | 1,631,142 | ||
Past due 30 to 59 days | Residential Mortgage | ||||
Mortgage Loans during period | 1,092,140 | 1,631,142 | ||
Past due 60 to 89 days | ||||
Mortgage Loans during period | 1,004,736 | 1,174,516 | ||
Past due 60 to 89 days | Commercial Loan | ||||
Mortgage Loans during period | 272,934 | |||
Past due 60 to 89 days | Residential Mortgage | ||||
Mortgage Loans during period | 706,753 | 1,174,516 | ||
Past due 60 to 89 days | Residential Construction | ||||
Mortgage Loans during period | 25,049 | |||
Past due 90 or more days | ||||
Mortgage Loans during period | 4,172,726 | [1] | 5,529,796 | [1] |
Past due 90 or more days | Residential Mortgage | ||||
Mortgage Loans during period | 4,107,831 | [1] | 5,464,901 | [1] |
Past due 90 or more days | Residential Construction | ||||
Mortgage Loans during period | 64,895 | [1] | 64,895 | [1] |
In Foreclosure | ||||
Mortgage Loans during period | 2,544,731 | [1] | 1,970,681 | [1] |
In Foreclosure | Residential Mortgage | ||||
Mortgage Loans during period | 2,544,731 | [1] | 1,556,182 | [1] |
In Foreclosure | Residential Construction | ||||
Mortgage Loans during period | 414,499 | [1] | ||
Total Past Due | ||||
Mortgage Loans during period | 8,814,333 | 10,306,135 | ||
Total Past Due | Commercial Loan | ||||
Mortgage Loans during period | 272,934 | |||
Total Past Due | Residential Mortgage | ||||
Mortgage Loans during period | 8,451,455 | 9,826,741 | ||
Total Past Due | Residential Construction | ||||
Mortgage Loans during period | 89,944 | 479,394 | ||
Current | ||||
Mortgage Loans during period | 118,982,506 | 111,746,992 | ||
Current | Commercial Loan | ||||
Mortgage Loans during period | 45,794,196 | 35,388,756 | ||
Current | Residential Mortgage | ||||
Mortgage Loans during period | 43,593,895 | 43,765,692 | ||
Current | Residential Construction | ||||
Mortgage Loans during period | $29,594,415 | $32,592,544 | ||
[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 $) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Residential Mortgage | ||
Impaired Financing Receivable, with Related Allowance, Recorded Investment | $2,544,731 | $1,556,182 |
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance | 2,544,731 | 1,556,182 |
Impaired Financing Receivable, Related Allowance | 245,952 | 153,446 |
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment | 2,544,731 | 1,556,182 |
Total Residential Mortgage | ||
Impaired Financing Receivable, with Related Allowance, Recorded Investment | 2,544,731 | 1,556,182 |
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance | 2,544,731 | 1,556,182 |
Impaired Financing Receivable, Related Allowance | 245,952 | 153,446 |
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment | 2,544,731 | 1,556,182 |
Residential Construction | ||
Impaired Financing Receivable, with Related Allowance, Recorded Investment | 414,499 | |
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance | 414,499 | |
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment | 414,499 | |
Impaired Financing Receivable, with No Related Allowance, Recorded Investment | 414,499 | |
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment | $414,499 |
3_Investments_Schedule_Of_Cred1
3) Investments: Schedule Of Credit Risk Of Mortgage Loans Based On Performance Status (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Mortgage loans | $127,796,839 | $122,053,127 |
Performing Financing Receivable | ||
Mortgage loans | 121,079,382 | 114,552,650 |
Nonperforming Financing Receivable | ||
Mortgage loans | 6,717,457 | 7,500,477 |
Commercial Loan | ||
Mortgage loans | 46,067,130 | 35,388,756 |
Commercial Loan | Performing Financing Receivable | ||
Mortgage loans | 46,067,130 | 35,388,756 |
Residential Mortgage | ||
Mortgage loans | 52,045,350 | 53,592,433 |
Residential Mortgage | Performing Financing Receivable | ||
Mortgage loans | 45,392,788 | 46,571,350 |
Residential Mortgage | Nonperforming Financing Receivable | ||
Mortgage loans | 6,652,562 | 7,021,083 |
Residential Construction | ||
Mortgage loans | 29,684,359 | 33,071,938 |
Residential Construction | Performing Financing Receivable | ||
Mortgage loans | 29,619,464 | 32,592,544 |
Residential Construction | Nonperforming Financing Receivable | ||
Mortgage loans | $64,895 | $479,394 |
3_Investments_Summary_of_Inter
3) Investments: Summary of Interest not accrued on non-performing mortgage loans (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Details | ||
Interest not accrued on non-performing loans | $534,000 | $535,000 |
3_Investments_Schedule_of_Mort1
3) Investments: Schedule of Mortgage loans on a nonaccrual status (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | $6,717,457 | $7,500,477 |
Residential Mortgage | ||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | 6,652,562 | 7,021,083 |
Residential Construction | ||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | $64,895 | $479,394 |
3_Investments_Schedule_of_loan1
3) Investments: Schedule of loan loss reserve which is included in other liabilities and accrued expenses (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Details | |||
Loan loss reserve, balance at start of period | $2,211,783 | $1,718,150 | $5,506,532 |
Loan loss reserve, Provisions for losses | 666,739 | 3,053,403 | |
Loan loss reserve, Charge-offs | -173,106 | -6,841,785 | |
Loan loss reserve, balance at end of period | $2,211,783 | $1,718,150 | $5,506,532 |
4_Stockbased_Compensation_Deta
4) Stock-based Compensation (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Details | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs, Capitalized Amount | $85,545 | $64,325 |
Unrecognized compensation expense related to the options issued in July 2014 | 235,086 | |
Unrecognized compensation expense related to the options issued in December 2013 | 44,356 | |
Total intrinsic value | $438,989 |
4_Stockbased_Compensation_Sche1
4) Stock-based Compensation: Schedule of stock inventive plan changes (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | |
Class A Common Stock | ||
Shares, Outstanding | 503,949 | 512,795 |
Shares outstanding | $3.21 | $3.20 |
Shares Cancelled | -8,846 | |
Per Share Shares cancelled | $2.31 | |
Options Exercisable | 379,946 | |
Options exercisable | $2.75 | |
Available options for future grant | $266,649 | |
Weighted average contractual term of options outstanding | 7.57 years | |
Weighted average contractual term of options exercisable | 6.91 years | |
Aggregated intrinsic value of options outstanding | 1,076,880 | |
Aggregated intrinsic value of options exercisable | 988,022 | |
Class C Common Stock | ||
Shares, Outstanding | 577,568 | 691,591 |
Shares outstanding | $2.62 | $2 |
Shares Exercised | -114,023 | |
Per Share Shares Exercised | $2.14 | |
Options Exercisable | 471,943 | |
Options exercisable | $2.15 | |
Weighted average contractual term of options outstanding | 2.93 years | |
Weighted average contractual term of options exercisable | 2.30 years | |
Aggregated intrinsic value of options outstanding | 1,572,653 | |
Aggregated intrinsic value of options exercisable | $1,506,415 |
5_Earnings_Per_Share_Schedule_1
5) Earnings Per Share: Schedule Of Calculation Of Numerator And Denominator In Earnings Per Share (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Details | ||
Net earnings | $1,863,703 | $138,848 |
Weighted-average Class A equivalent common share outstanding (1) | 12,934,816 | 12,400,954 |
GrantOfEmployeeStockOptions | $535,084 | $462,941 |
Diluted weighted-average shares outstanding | 13,469,900 | 12,863,895 |
Net earnings per Class A Equivalent common share (1) | $0.14 | $0.01 |
Net earnings per Class A Equivalent common share-assuming dilution (1) | $0.14 | $0.01 |
5_Earnings_Per_Share_Details
5) Earnings Per Share (Details) (USD $) | 3 Months Ended | 9 Months Ended |
Mar. 31, 2015 | Sep. 30, 2013 | |
Details | ||
Antidilutive Securities Excluded from Computation of Net Income, Per Outstanding Unit, Amount | $4,632 | $615,472 |
6_Business_Segments_Schedule_o1
6) Business Segments: Schedule of Revenues and Expenses by Reportable Segment (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Revenue from customers | $64,049,632 | $45,053,276 | |
SegmentReportingInformationIncomeLossBeforeIncomeTaxes | 2,998,384 | 165,987 | |
Identifiable Assets | 701,778,191 | 626,740,327 | |
Goodwill | 2,765,570 | 677,039 | 2,765,570 |
Life Insurance Segment | |||
Revenue from customers | 20,985,500 | 18,472,816 | |
SegmentReportingInformationIntersegmentRevenue | 2,818,867 | 2,061,720 | |
SegmentReportingInformationIncomeLossBeforeIncomeTaxes | 1,403,851 | 1,331,469 | |
Identifiable Assets | 677,059,957 | 604,260,546 | |
Goodwill | 2,765,570 | 391,848 | |
Cemetery and Mortuary | |||
Revenue from customers | 3,098,238 | 3,040,568 | |
SegmentReportingInformationIntersegmentRevenue | 311,998 | 336,298 | |
SegmentReportingInformationIncomeLossBeforeIncomeTaxes | 409,175 | 182,778 | |
Identifiable Assets | 104,778,721 | 108,627,471 | |
Goodwill | 285,191 | ||
Mortgage | |||
Revenue from customers | 39,965,894 | 23,539,892 | |
SegmentReportingInformationIntersegmentRevenue | 88,487 | 164,146 | |
SegmentReportingInformationIncomeLossBeforeIncomeTaxes | 1,185,358 | -1,348,260 | |
Identifiable Assets | 62,765,551 | 49,375,595 | |
Significant Reconciling Items | |||
SegmentReportingInformationIntersegmentRevenue | -3,219,352 | -2,562,164 | |
Identifiable Assets | ($142,826,038) | ($135,523,285) |
7_Fair_Value_of_Financial_Inst5
7): Fair Value of Financial Instruments: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Available-for-sale Securities | $6,383,502 | |
Restricted assets of cemeteries and mortuaries | 715,791 | 715,202 |
Cemetery perpetual care trust investments | 654,458 | 695,235 |
Derivatives - interest rate lock commitments | 5,002,929 | 2,111,529 |
Assets, Fair Value Disclosure | 12,756,680 | 10,274,716 |
Policyholder account balances | -51,516,976 | -45,310,699 |
Future policy benefits - annuities | -68,843,240 | -65,540,985 |
Derivatives - bank loan interest rate swaps | -27,419 | -31,370 |
Derivatives - bank loan interest rate swaps, Call Options | -37,476 | -116,036 |
Derivatives - bank loan interest rate swaps, Put Options | -40,727 | -11,867 |
Derivatives - bank loan interest rate swaps, Interest rate lock commitments | -585,187 | -181,678 |
Liabilities accounted for at fair value | -121,051,025 | -111,192,635 |
Non-redeemable preferred stock | 6,752,750 | |
Trading Securities, Equity | 6,752,750 | |
Fair Value, Inputs, Level 1 | ||
Available-for-sale Securities | 6,383,502 | |
Restricted assets of cemeteries and mortuaries | 715,791 | 715,202 |
Cemetery perpetual care trust investments | 654,458 | 695,235 |
Assets, Fair Value Disclosure | 7,753,751 | 8,163,187 |
Derivatives - bank loan interest rate swaps, Call Options | -37,476 | -116,036 |
Derivatives - bank loan interest rate swaps, Put Options | -40,727 | -11,867 |
Liabilities accounted for at fair value | -78,203 | -127,903 |
Non-redeemable preferred stock | 6,752,750 | |
Trading Securities, Equity | 6,752,750 | |
Fair Value, Inputs, Level 3 | ||
Derivatives - interest rate lock commitments | 5,002,929 | 2,111,529 |
Assets, Fair Value Disclosure | 5,002,929 | 2,111,529 |
Policyholder account balances | -51,516,976 | -45,310,699 |
Future policy benefits - annuities | -68,843,240 | -65,540,985 |
Derivatives - bank loan interest rate swaps | -27,419 | -31,370 |
Derivatives - bank loan interest rate swaps, Interest rate lock commitments | -585,187 | -181,678 |
Liabilities accounted for at fair value | ($120,972,822) | ($111,064,732) |
7_Fair_Value_of_Financial_Inst6
7): Fair Value of Financial Instruments: Schedule of Changes in the consolidated balance sheet line items measured using level 3 inputs (Details) (USD $) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Policyholder Account Balances | ||
Fair Value Balance | ($45,310,699) | ($48,000,668) |
Fair Value, Losses (Gains) included in earnings | -6,206,277 | 2,689,969 |
Fair Value Balance | -51,516,976 | -45,310,699 |
Future Policy Benefits - Annuities | ||
Fair Value Balance | -65,540,985 | -65,052,928 |
Fair Value, Losses (Gains) included in earnings | -3,302,255 | -488,057 |
Fair Value Balance | -68,843,240 | -65,540,985 |
Interest Rate Lock Commitments | ||
Fair Value Balance | 1,929,851 | 1,487,908 |
Fair Value, Losses (Gains) included in other comprehensive income | 2,487,891 | 441,943 |
Fair Value Balance | 4,417,742 | 1,929,851 |
Bank Loan Interest Rate Swaps | ||
Fair Value Balance | -31,370 | -58,310 |
Fair Value, Losses (Gains) included in other comprehensive income | 3,951 | 26,940 |
Fair Value Balance | ($27,419) | ($31,370) |
7_Fair_Value_of_Financial_Inst7
7): Fair Value of Financial Instruments: Schedule of Fair Value Measurements, Nonrecurring (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Assets accounted for at fair value on a nonrecurring basis - Mortgage servicing rights | $987,707 | |
Mortgage loans on real estate | 320,000 | |
Assets accounted for at fair value on a nonrecurring basis | 1,307,707 | |
Mortgage servicing rights | 3,741,381 | |
Real estate held for investment | 53,500 | |
Assets, Fair Value Disclosure, Nonrecurring | 3,794,881 | |
Fair Value, Inputs, Level 3 | ||
Assets accounted for at fair value on a nonrecurring basis - Mortgage servicing rights | 987,707 | |
Mortgage loans on real estate | 320,000 | |
Assets accounted for at fair value on a nonrecurring basis | 1,307,707 | |
Mortgage servicing rights | 3,741,381 | |
Real estate held for investment | 53,500 | |
Assets, Fair Value Disclosure, Nonrecurring | $3,794,881 |
7_Fair_Value_of_Financial_Inst8
7): Fair Value of Financial Instruments: Schedule of Financial Instruments Carried at Other Than Fair Value (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Carrying Value | ($29,410,570) | ($28,989,008) |
Estimated Fair Value | -29,410,570 | -28,989,008 |
Residential Mortgage | ||
Carrying Value | 50,430,197 | 51,876,621 |
Estimated Fair Value | 53,693,961 | 55,247,638 |
Residential Construction | ||
Carrying Value | 29,584,245 | 32,971,824 |
Estimated Fair Value | 29,584,245 | 32,971,824 |
Commercial Loan | ||
Carrying Value | 45,880,001 | 35,201,627 |
Estimated Fair Value | 47,829,817 | 36,829,266 |
MortgageLoansNet1Member | ||
Carrying Value | 125,894,443 | 120,050,072 |
Estimated Fair Value | 131,108,023 | 125,048,728 |
PolicyLoanMember | ||
Carrying Value | 7,187,804 | 7,011,012 |
Estimated Fair Value | 7,187,804 | 7,011,012 |
OtherLoansMember | ||
Carrying Value | 31,996,446 | 27,114,416 |
Estimated Fair Value | 31,996,446 | 27,114,416 |
ShortTermInvestments1Member | ||
Carrying Value | 20,620,236 | 27,059,495 |
Estimated Fair Value | 20,620,236 | 27,059,495 |
Fair Value, Inputs, Level 3 | ||
Estimated Fair Value | -29,410,570 | -28,989,008 |
Fair Value, Inputs, Level 3 | Residential Mortgage | ||
Estimated Fair Value | 53,693,961 | 55,247,638 |
Fair Value, Inputs, Level 3 | Residential Construction | ||
Estimated Fair Value | 29,584,245 | 32,971,824 |
Fair Value, Inputs, Level 3 | Commercial Loan | ||
Estimated Fair Value | 47,829,817 | 36,829,266 |
Fair Value, Inputs, Level 3 | MortgageLoansNet1Member | ||
Estimated Fair Value | 131,108,023 | 125,048,728 |
Fair Value, Inputs, Level 3 | PolicyLoanMember | ||
Estimated Fair Value | 7,187,804 | 7,011,012 |
Fair Value, Inputs, Level 3 | OtherLoansMember | ||
Estimated Fair Value | 31,996,446 | 27,114,416 |
Fair Value, Inputs, Level 3 | ShortTermInvestments1Member | ||
Estimated Fair Value | $20,620,236 | $27,059,495 |
9_Derivative_Commitments_Detai
9) Derivative Commitments (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Details | ||
Fair value of outstanding call options | $78,203 | $127,903 |
9_Derivative_Commitments_Sched2
9) Derivative Commitments: Schedule of Derivative Assets at Fair Value (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Details | ||
Fair Value of Asset Derivatives, Interest rate lock and forward sales commitments | $5,002,929 | $2,111,529 |
Fair Value of Liability Derivatives, Interest rate lock and forward sales commitments | 585,187 | 181,678 |
Fair Value of Liability Derivatives, Call Options | 37,476 | 116,036 |
Fair Value of Liability Derivatives, Put Options | 40,727 | 11,867 |
Fair Value of Liability Derivatives, Interest Rate Swaps | 27,419 | 31,370 |
Fair Value of Asset Derivatives, Total | 5,002,929 | 2,111,529 |
Fair Value of Liability Derivatives, Total | $690,809 | $340,951 |
9_Derivative_Commitments_Sched3
9) Derivative Commitments: Schedule of Gains and Losses on Derivatives (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Details | ||
Gain (Loss) on Derivatives, Interest Rate Lock Commitments | $2,487,891 | $449,263 |
Gain (Loss) on Derivatives, Interest Rate Swaps | 3,951 | 6,852 |
GainLossOnDerivativesSubTotal | 2,491,842 | 456,115 |
TaxEffect-GainLossOnDerivatives | 971,819 | 177,885 |
Gain (Loss) on Derivatives, Total | $1,520,023 | $278,230 |
10_Reinsurance_Commitments_and1
10) Reinsurance, Commitments and Contingencies (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Details | |||
Amounts accrued for loan losses | $667,000 | $372,000 | |
Funds reserved and accrued to settle investor related claims | $2,212,000 | $1,718,000 |
10_Reinsurance_Commitments_and2
10) Reinsurance, Commitments and Contingencies: Other Contingencies and Commitments (Details) (USD $) | Mar. 31, 2015 |
Details | |
Commitments to fund new residential construction loans | $40,835,000 |
Commitments to fund new residential construction loans funded | $29,684,000 |
11_Mortgage_Servicing_Rights_S1
11) Mortgage Servicing Rights: Schedule of Mortgage Servicing Rights (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Details | ||
Balance before valuation allowance at beginning of year | $7,834,747 | $4,844,101 |
MSRs proceeds from loan sales | 987,707 | 3,741,381 |
Amortization | -259,966 | -750,735 |
Balance before valuation allowance at year end | 8,562,488 | 7,834,747 |
Mortgage servicing rights, net | 8,562,488 | 7,834,747 |
Estimated fair value of MSRs at end of period | $8,926,200 | $8,485,570 |
12_Mergers_Acquisitions_and_Di2
12) Mergers, Acquisitions and Dispositions Disclosures: Schedule of pro forma financial information (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Details | ||
Business Acquisition, Pro Forma Revenue | $64,049,632 | $46,521,936 |
Business Acquisition, Pro Forma Net Income (Loss) | $1,863,703 | $342,683 |
Business Acquisition, Pro Forma Earnings Per Share, Basic | $0.14 | $0.03 |
Business Acquisition, Pro Forma Earnings Per Share, Diluted | $0.14 | $0.03 |