Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 16, 2016 | |
Entity Registrant Name | SECURITY NATIONAL FINANCIAL CORP | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Trading Symbol | snfca | |
Amendment Flag | false | |
Entity Central Index Key | 318,673 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Class A Common Stock | ||
Entity Common Stock, Shares Outstanding | 13,137,702 | |
Class C Common Stock | ||
Entity Common Stock, Shares Outstanding | 1,716,020 |
Balance Sheet
Balance Sheet - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Investments: | ||
Fixed maturity securities, held to maturity, at amortized cost | $ 147,445,997 | $ 145,558,425 |
Equity securities, available for sale, at estimated fair value | 8,941,232 | 8,431,090 |
Mortgage loans on real estate and construction loans, held for investment net of allowances for loan losses of $2,078,948 and $1,848,120 for 2016 and 2015 | 133,393,868 | 112,546,905 |
Real estate held for investment, net of accumulated depreciation of $12,940,497 and $12,210,346 for 2016 and 2015 | 116,700,727 | 114,852,432 |
Policy loans and other investments, net of allowances for doubtful accounts of $1,032,736 and $906,616 for 2016 and 2015 | 39,279,484 | 39,582,421 |
Short-term investments | 17,809,307 | 16,915,808 |
Accrued investment income | 2,559,069 | 2,553,819 |
Total investments | 466,129,684 | 440,440,900 |
Cash and cash equivalents | 46,703,959 | 40,053,242 |
Mortgage loans sold to investors | 85,906,980 | 115,286,455 |
Receivables, net | 16,728,173 | 16,026,100 |
Restricted assets | 8,114,572 | 9,359,802 |
Cemetery perpetual care trust investments | 2,938,732 | 2,848,759 |
Receivable from reinsurers | 13,387,534 | 13,400,527 |
Cemetery land and improvements | 10,748,630 | 10,780,996 |
Deferred policy and pre-need contract acquisition costs | 61,116,736 | 59,004,909 |
Mortgage servicing rights, net | 13,688,362 | 12,679,755 |
Property and equipment, net | 12,020,600 | 11,441,660 |
Value of business acquired | 8,410,685 | 8,743,773 |
Goodwill | 2,765,570 | 2,765,570 |
Other assets | 8,689,264 | 7,100,869 |
Total Assets | 757,349,481 | 749,933,317 |
Liabilities | ||
Future life, annuity, and other benefits | 519,840,644 | 517,177,388 |
Unearned premium reserve | 4,672,289 | 4,737,305 |
Bank and other loans payable | 41,253,242 | 40,908,915 |
Deferred pre-need cemetery and mortuary contract revenues | 12,664,028 | 12,816,227 |
Cemetery perpetual care obligation | 3,477,506 | 3,465,771 |
Accounts payable | 2,830,831 | 3,502,046 |
Other liabilities and accrued expenses | 31,265,273 | 31,027,381 |
Income taxes | 26,756,136 | 25,052,059 |
Total liabilities | 642,759,949 | 638,687,092 |
Stockholders' Equity | ||
Additional paid-in capital | 30,489,006 | 30,232,582 |
Accumulated other comprehensive income, net of taxes | 2,651,399 | 1,533,828 |
Retained earnings | 53,771,475 | 52,021,764 |
Treasury stock at cost - 884,785 Class A shares in 2016 and 930,546 Class A shares in 2015 | (2,029,790) | (2,179,429) |
Total stockholders' equity | 114,589,532 | 111,246,225 |
Total Liabilities and Stockholders' Equity | 757,349,481 | 749,933,317 |
Class A Common Stock | ||
Stockholders' Equity | ||
Common stock | $ 26,275,394 | $ 26,218,200 |
Class B Common Stock | ||
Stockholders' Equity | ||
Common stock | ||
Class C Common Stock | ||
Stockholders' Equity | ||
Common stock | $ 3,432,048 | $ 3,419,280 |
Balance Sheet Parenthetical
Balance Sheet Parenthetical - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Allowance for losses on mortgage loans on real estate and construction loans, held for investment | $ 2,078,948 | $ 1,848,120 |
Accumulated depreciation on real estate held for investment | 12,940,497 | 12,210,346 |
Allowance for doubtful accounts on policy and other loans | $ 1,032,736 | $ 906,616 |
Class A Common Stock | ||
Common Stock Par Value | $ 2 | $ 2 |
Common Stock Authorized | 20,000,000 | 20,000,000 |
Common Stock Issued | 13,137,697 | 13,109,100 |
Treasury Stock | 884,785 | 930,546 |
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 | 1,716,024 | 1,709,640 |
Income Statement
Income Statement - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Revenues: | ||
Insurance premiums and other considerations | $ 14,451,575 | $ 13,853,515 |
Net investment income | 8,992,191 | 7,822,844 |
Net mortuary and cemetery sales | 3,245,856 | 2,872,335 |
Realized gains on investments and other assets | 97,922 | 420,064 |
Other than temporary impairments on investments | (73,630) | (55,896) |
Mortgage fee income | 37,769,975 | 37,821,800 |
Other income | 1,530,426 | 1,315,070 |
Total revenues | 66,014,315 | 64,049,732 |
Benefits and expenses: | ||
Death benefits | 7,824,001 | 7,927,872 |
Surrenders and other policy benefits | 518,321 | 653,734 |
Increase in future policy benefits | 4,160,260 | 4,179,812 |
Amortization of deferred policy and pre-need acquisition costs and value of business acquired | 2,212,836 | 1,167,499 |
Selling, general and administrative expenses: | ||
Commissions | 16,842,270 | 18,566,047 |
Personnel | 17,197,372 | 14,313,316 |
Advertising | 1,078,010 | 1,416,290 |
Rent and rent related | 2,064,325 | 1,885,076 |
Depreciation on property and equipment | 521,455 | 562,737 |
Provision for loan losses and loss reserve | 586,778 | 666,739 |
Costs related to funding mortgage loans | 2,154,397 | 2,183,011 |
Other expenses | 6,480,711 | 6,085,503 |
Interest expense | 1,064,195 | 985,346 |
Cost of goods and services sold-mortuaries and cemeteries | 458,619 | 458,266 |
Total benefits and expenses | 63,163,550 | 61,051,248 |
Earnings before income taxes | 2,850,765 | 2,998,484 |
Income tax expense | (1,057,233) | (1,134,681) |
Net earnings | $ 1,793,532 | $ 1,863,703 |
Net earnings per Class A Equivalent common share (1) | $ 0.13 | $ 0.14 |
Net earnings per Class A Equivalent common share-assuming dilution (1) | $ 0.12 | $ 0.13 |
Weighted-average Class A equivalent common share outstanding (1) | 13,939,377 | 13,592,260 |
Weighted-average Class A equivalent common shares outstanding-assuming dilution (1) | 14,373,499 | 14,154,098 |
Comprehensive Income Statement
Comprehensive Income Statement - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Comprehensive Income Statement | ||
Net earnings | $ 1,793,532 | $ 1,863,703 |
Other comprehensive income: | ||
Net unrealized gains on derivative instruments | 819,674 | 1,520,023 |
Net unrealized gains (losses) on available for sale securities | 297,897 | (228,256) |
Other comprehensive income | 1,117,571 | 1,291,767 |
Comprehensive income | $ 2,911,103 | $ 3,155,470 |
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, 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 |
Balance at Dec. 31, 2015 | 26,218,200 | 3,419,280 | 30,232,582 | 1,533,828 | 52,021,764 | (2,179,429) | 111,246,225 |
Net earnings | 1,793,532 | 1,793,532 | |||||
Other comprehensive income | 1,117,571 | 1,117,571 | |||||
Grant of stock options | 84,452 | 84,452 | |||||
Exercise of stock options | 56,920 | 4,367 | 61,287 | ||||
Sale of treasury stock | 136,826 | 149,639 | 286,465 | ||||
Stock Dividends | 274 | 12,768 | 30,779 | (43,821) | |||
Balance at Mar. 31, 2016 | $ 26,275,394 | $ 3,432,048 | $ 30,489,006 | $ 2,651,399 | $ 53,771,475 | $ (2,029,790) | $ 114,589,532 |
Statement of Cash Flows
Statement of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities: | ||
Net cash provided by (used in) operating activities | $ 25,863,034 | $ 711,854 |
Securities held to maturity: | ||
Purchase-fixed maturity securities | (4,481,397) | (720,168) |
Calls and maturities - fixed maturity securities | 2,470,005 | 2,423,142 |
Securities available for sale: | ||
Purchase - equity securities | (1,651,302) | (970,123) |
Sales - equity securities | 1,487,110 | 1,115,336 |
Purchase of short-term investments | (3,258,070) | (19,289,330) |
Sales of short-term investments | 2,364,571 | 25,728,589 |
Sales (purchases) of restricted assets | 1,242,342 | (477,434) |
Changes in assets for perpetual care trusts | (51,461) | (77,547) |
Amount received for perpetual care trusts | 11,735 | 14,734 |
Mortgage loans, policy loans, and other investments made | (112,920,364) | (98,936,237) |
Payments received for mortgage loans, policy loans and other investments | 99,348,725 | 85,963,685 |
Purchase of property and equipment | (1,084,975) | (371,843) |
Purchase of real estate | (3,432,051) | (1,695,631) |
Sale of real estate | 843,701 | 1,924,500 |
Cash received from reinsurance | 15,113,391 | |
Net cash provided by (used in) investing activities | (19,111,431) | 9,745,064 |
Cash flows from financing activities: | ||
Annuity contract receipts | 2,516,596 | 2,507,650 |
Annuity contract withdrawals | (3,025,833) | (3,496,843) |
Proceeds from stock options exercised | 61,287 | |
Repayment of bank loans on notes and contracts | (390,168) | (607,286) |
Proceeds from borrowing on bank loans | 737,232 | 1,028,848 |
Net cash used in financing activities | (100,886) | (567,631) |
Net change in cash and cash equivalents | 6,650,717 | 9,889,287 |
Cash and cash equivalents at beginning of period | 40,053,242 | 30,855,320 |
Cash and cash equivalents at end of period | 46,703,959 | 40,744,607 |
Non Cash Investing and Financing Activities | ||
Mortgage loans foreclosed into real estate | $ 87,000 | $ 2,389,330 |
1) Basis of Presentation
1) Basis of Presentation | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
1) Basis of Presentation | 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, 2015, included in the CompanyÂ’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, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. 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 value of interest rate locks and commitments, those used in determining deferred acquisition costs and the value of business acquired, those used in determining the value of mortgage loans foreclosed to REO, those used in determining the liability for future policy benefits and unearned revenue, those used in determining the estimated future costs for pre-need sales, those used in determining the value of mortgage servicing rights, those used in determining valuation allowances for mortgage loans on real estate, those used in determining loan loss reserve, and those used in determining deferred tax assets and liabilities. 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, 2016 | |
Notes | |
2) Recent Accounting Pronouncements | 2) Recent Accounting Pronouncements 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, 2017. 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. 2016-01: “Financial Instruments – Overall (Topic 825-10)” – Issued in January 2016, ASU 2016-01 changes the accounting for non-consolidated equity investments that are not accounted for under the equity method of accounting by requiring changes in fair value to be recognized in income. Under current guidance, changes in fair value for investments of this nature are recognized in accumulated other comprehensive income as a component of stockholders’ equity. Additionally, ASU 2016-01 simplifies the impairment assessment of equity investments without readily determinable fair values; requires entities to use the exit price when estimating the fair value of financial instruments; and modifies various presentation disclosure requirements for financial instruments. The new authoritative guidance is effective for interim and annual periods beginning after December 15, 2017. The Company is in the process of evaluating the potential impact of this standard. ASU No. 2016-02: “Leases (Topic 842)” - Issued in February 2016, ASU 2016-02 supersedes the leases requirements in ASC Topic 840, “Leases”, and was issued to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The new authoritative guidance is effective for interim and annual periods beginning after December 15, 2018. The Company is in the process of evaluating the potential impact of this standard. 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, 2016 | |
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, 2016 are summarized as follows: Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value March 31, 2016 Fixed maturity securities held to maturity carried at amortized cost: Bonds: U.S. Treasury securities and obligations of U.S. Government agencies $ 3,558,169 $ 378,157 $ - $ 3,936,326 Obligations of states and political subdivisions 1,803,498 200,444 (455) 2,003,487 Corporate securities including public utilities 133,970,698 11,576,671 (4,997,905) 140,549,464 Mortgage-backed securities 7,501,609 303,697 (173,323) 7,631,983 Redeemable preferred stock 612,023 47,811 - 659,834 Total fixed maturity securities held to maturity $ 147,445,997 $ 12,506,780 $ (5,171,683) $ 154,781,094 Equity securities available for sale at estimated fair value: Common stock: Industrial, miscellaneous and all other $ 10,051,680 $ 295,489 $ (1,405,937) $ 8,941,232 Total equity securities available for sale at estimated fair value $ 10,051,680 $ 295,489 $ (1,405,937) $ 8,941,232 Mortgage loans on real estate and construction loans held for investment at amortized cost: Residential $ 53,488,217 Residential construction 42,926,820 Commercial 39,057,779 Less: Allowance for loan losses (2,078,948) Total mortgage loans on real estate and construction loans held for investment $ 133,393,868 Real estate held for investment - net of depreciation $ 116,700,727 Policy loans and other investments are shown at amortized cost except for other investments that are shown at estimated fair value: Policy loans $ 6,892,022 Insurance assignments 32,149,213 Promissory notes 48,797 Other investments at estimated fair value 1,222,188 Less: Allowance for doubtful accounts (1,032,736) Total policy loans and other investments $ 39,279,484 Short-term investments at amortized cost $ 17,809,307 The Company’s investments in fixed maturity securities held to maturity and equity securities available for sale as of December 31, 2015 are summarized as follows: Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value December 31, 2015 Fixed maturity securities held to maturity carried at amortized cost: Bonds: U.S. Treasury securities and obligations of U.S. Government agencies $ 3,560,579 $ 292,869 $ (4,743) $ 3,848,705 Obligations of states and political subdivisions 1,805,828 182,073 (1,040) 1,986,861 Corporate securities including public utilities 134,488,108 9,836,355 (5,501,743) 138,822,720 Mortgage-backed securities 5,091,887 190,867 (75,580) 5,207,174 Redeemable preferred stock 612,023 29,675 - 641,698 Total fixed maturity securities held to maturity $ 145,558,425 $ 10,531,839 $ (5,583,106) $ 150,507,158 Equity securities available for sale at estimated fair value: Common stock: Industrial, miscellaneous and all other $ 9,891,500 $ 213,683 $ (1,674,093) $ 8,431,090 Total securities available for sale carried at estimated fair value $ 9,891,500 $ 213,683 $ (1,674,093) $ 8,431,090 Mortgage loans on real estate and construction loans held for investment at amortized cost: Residential $ 46,020,490 Residential construction 34,851,557 Commercial 33,522,978 Less: Allowance for loan losses (1,848,120) Total mortgage loans on real estate and construction loans held for investment $ 112,546,905 Real estate held for investment - net of depreciation $ 114,852,432 Policy loans and other investments are shown at amortized cost except for other investments that are shown at estimated fair value: Policy loans $ 6,896,457 Insurance assignments 32,369,014 Promissory notes 48,797 Other investments at estimated fair value 1,174,769 Less: Allowance for doubtful accounts (906,616) Total policy loans and other investments $ 39,582,421 Short-term investments at amortized cost $ 16,915,808 Fixed Maturity Securities The following tables summarize unrealized losses on fixed maturity securities, which are carried at amortized cost, at March 31, 2016 and December 31, 2015. 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, 2016 U.S. Treasury Securities and Obligations of U.S. Government Agencies $ - 0 $ - 0 $ - Obligations of states and political subdivisions - 0 455 1 455 Corporate securities including public utilities 2,267,982 70 2,729,923 25 4,997,905 Mortgage-backed securities 173,323 6 - 0 173,323 Total unrealized losses $ 2,441,305 76 $ 2,730,378 26 $ 5,171,683 Fair Value $ 21,751,797 $ 6,404,000 $ 28,155,797 At December 31, 2015 U.S. Treasury Securities and Obligations of U.S. Government Agencies $ 4,743 2 $ - 0 $ 4,743 Obligations of states and political subdivisions - 0 1,040 1 1,040 Corporate securities including public utilities 3,701,572 98 1,800,171 18 5,501,743 Mortgage-backed securities 75,580 4 - 0 75,580 Total unrealized losses $ 3,781,895 104 $ 1,801,211 19 $ 5,583,106 Fair Value $ 34,076,401 $ 3,809,957 $ 37,886,358 The average market value of the related fixed maturities was 84.5% and 87.2% of amortized cost as of March 31, 2016 and December 31, 2015, respectively. During the three months ended March 31, 2016 and 2015 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 available for sale and held to maturity fixed 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, 2016 and December 31, 2015. 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, 2016 Industrial, miscellaneous and all other $ 798,607 180 $ 607,330 68 $ 1,405,937 Total unrealized losses $ 798,607 180 $ 607,330 68 $ 1,405,937 Fair Value $ 3,955,133 $ 1,154,812 $ 5,109,945 At December 31, 2015 Industrial, miscellaneous and all other $ 997,862 222 $ 676,232 74 $ 1,674,093 Total unrealized losses $ 997,862 222 $ 676,232 74 $ 1,674,093 Fair Value $ 4,177,709 $ 760,860 $ 4,938,569 The average market value of the equity securities available for sale was 78.4% and 74.7% of the original investment as of March 31, 2016 and December 31, 2015, respectively. 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, 2016 and 2015, an other than temporary decline in the fair value resulted in the recognition of an impairment loss on equity securities of $43,630 and $25,896, 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, 2016, 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 2016 $ 4,298,647 $ 4,345,102 Due in 2017 through 2020 33,393,520 35,451,062 Due in 2021 through 2025 35,564,893 37,200,353 Due after 2025 66,075,305 69,492,760 Mortgage-backed securities 7,501,609 7,631,983 Redeemable preferred stock 612,023 659,834 Total held to maturity $ 147,445,997 $ 154,781,094 The cost and estimated fair value of available for sale securities at March 31, 2016, 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. Cost Estimated Fair Value Available for Sale: Common stock $ 10,051,680 $ 8,941,232 Total available for sale $ 10,051,680 $ 8,941,232 The Company’s realized gains and losses and other than temporary impairments from investments and other assets, are summarized as follows: Three Months Ended March 31 2016 2015 Fixed maturity securities held to maturity: Gross realized gains $ - $ 85,997 Gross realized losses (24,795) (9,776) Other than temporary impairments (30,000) (30,000) Securities available for sale: Gross realized gains 63,495 87,720 Gross realized losses (23,878) (1,016) Other than temporary impairments (43,630) (25,896) Other assets: Gross realized gains 84,768 257,139 Gross realized losses (1,668) - Total $ 24,292 $ 364,168 The net carrying amount of held to maturity securities sold was $-0- and $257,962 for the three months ended March 31, 2016 and 2015, respectively. The net realized gain related to these sales was $-0- and $8,962 for the three months ended March 31, 2016 and 2015, 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, 2016, 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 2016 2015 Fixed maturity securities $ 2,050,569 $ 1,980,696 Equity securities 71,041 59,418 Mortgage loans on real estate 2,026,515 1,874,158 Real estate 2,838,484 2,120,650 Policy loans 182,206 188,546 Insurance assignments 3,104,788 2,789,006 Short-term investments, principally interest on sale of mortgage loans and other 1,863,144 1,511,095 Gross investment income 12,136,747 10,523,569 Investment expenses (3,144,556) (2,700,725) Net investment income $ 8,992,191 $ 7,822,844 Net investment income includes income earned by the restricted assets of the cemeteries and mortuaries of $87,976 and $92,922 for the three months ended March 31, 2016 and 2015, 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 $8,813,368 at March 31, 2016 and $8,815,542 at December 31, 2015. The restricted securities are included in various assets under investments on the accompanying condensed consolidated balance sheets. Real Estate The Company continues to strategically deploy resources into real estate to match the income and yield durations of its primary obligations. The sources for these real estate assets come through its various business units in the form of acquisition, development and foreclosures on delinquent mortgage loans. Commercial Real Estate Held for Investment The Company owns and manages commercial real estate assets as a means of generating investment income. These assets are acquired in accordance with the Company’s goals and objectives for risk-adjusted returns. Due diligence is conducted on each asset using internal and third party reports. Geographic locations and asset classes of the investment activity is determined by senior management under the direction of the Board of Directors. The Company employs full-time employees to attend to the day-to-day operations of those assets within the greater Salt Lake area and close surrounding markets. The Company utilizes third party property managers when the geographic boundary does not warrant full-time staff or through strategic lease-up periods. The Company generally looks to acquire assets in regions that are high growth regions for employment and population and in assets that provide operational efficiencies. The Company currently owns and operates 10 commercial properties in 7 states. These properties include industrial warehouses, office building and retail centers. The assets are primarily held without debt; however, the Company does use debt in strategic cases to leverage established yields or to acquire higher quality, or class, of asset. The following is a summary of the Company’s investment in commercial real estate for the periods presented: Net Ending Balance Total Square Footage March 31 December 31 March 31 December 31 2016 2015 2016 2015 Arizona $ 460,465 (1) $ 463,774 (1) 16,270 16,270 Arkansas 103,527 - 3,200 - Kansas 11,720,154 11,537,335 222,679 222,679 Mississippi 3,152,040 - 21,521 - New Mexico 7,000 (1) 7,000 (1) - - Texas 3,755,070 3,768,542 23,470 23,470 Utah 17,194,441 17,403,746 233,244 253,244 $ 36,392,697 $ 33,180,397 520,384 515,663 Residential Real Estate Held for Investment The Company owns a portfolio of residential homes primarily as a result of loan foreclosures. The strategy has been to lease these homes to produce cash flow, and allow time for the economic fundamentals to return to the various markets. Once the market for these homes return, the Company engages in the disposition of these assets at prices above the book value or at a discount far less than what would have been realized at the time of foreclosure. The Company established Security National Real Estate Services (“SNRE”) in 2013 to manage the residential portfolio. SNRE cultivates and maintains the preferred vendor relationships necessary to manage costs and quality of work performed on the portfolio of homes across the country. As of March 31, 2016, SNRE manages 141 residential properties in 10 states across the United States which includes a newly constructed apartment complex, Dry Creek at East Village, in Sandy Utah. The following is a summary of the Company’s investment in residential real estate for the periods presented: Net Ending Balance March 31 December 31 2016 2015 Arizona $ 940,537 $ 944,614 California 5,929,061 6,158,253 Colorado 549,214 553,230 Florida 9,082,242 9,203,624 Illinois - 165,800 Oklahoma 99,264 99,862 Oregon 120,000 120,000 South Carolina 676,200 823,872 Texas 1,279,327 1,198,860 Utah 61,346,004 62,117,738 Washington 286,181 286,182 $ 80,308,030 $ 81,672,035 Real Estate Owned and Occupied by the Company The primary business units of the Company occupy a portion of the real estate owned by the Company. Currently, the Company occupies nearly 70,000 square feet, or 13% of the overall commercial real estate holdings. As of March 31, 2016, real estate owned and occupied by the company is summarized as follows: Location Business Segment Approximate Square Footage Square Footage Occupied by the Company 5300 South 360 West, Salt Lake City, UT (1) Corporate Offices, Life Insurance and Cemetery/Mortuary Operations 36,000 100% 5201 Green Street, Salt Lake City, UT Mortgage Operations 36,899 34% 3935 I-55 South Frontage Road, Jackson, MS (1) Life Insurance Operations 12,300 100% (1) These two assets are included in property and equipment on the Condensed Consolidated Balance Sheet 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 three months to 30 years and are secured by real estate. Concentrations of credit risk arise when a number of mortgage loan debtors have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions. Although the Company has a diversified mortgage loan portfolio consisting of residential mortgages, commercial loans and residential construction loans and requires collateral on all real estate exposures, a substantial portion of its debtors’ ability to honor obligations is reliant on the economic stability of the geographic region in which the debtors do business. At , the Company had , of its mortgage loans from borrowers located in the states of Utah, California Florida respectively. The mortgage loans on real estate balances on the consolidated balance sheet are reflected net of an allowance for loan losses of and $ at and December 31, 2015, respectively. The Company establishes a valuation allowance for credit losses in its portfolio. The following is a summary of the allowance for loan losses as a contra-asset account for the periods presented: Allowance for Credit Losses and Recorded Investment in Mortgage Loans Commercial Residential Residential Construction Total March 31, 2016 Allowance for credit losses: Beginning balance - January 1, 2016 $ 187,129 $ 1,560,877 $ 100,114 $ 1,848,120 Charge-offs - (18,374) - (18,374) Provision - 249,202 - 249,202 Ending balance -March 31, 2016 $ 187,129 $ 1,791,705 $ 100,114 $ 2,078,948 Ending balance: individually evaluated for impairment $ - $ 508,655 $ - $ 508,655 Ending balance: collectively evaluated for impairment $ 187,129 $ 1,283,050 $ 100,114 $ 1,570,293 Ending balance: loans acquired with deteriorated credit quality $ - $ - $ - $ - Mortgage loans: Ending balance $ 39,057,779 $ 53,488,217 $ 42,926,820 $ 135,472,816 Ending balance: individually evaluated for impairment $ - $ 5,091,409 $ - $ 5,091,409 Ending balance: collectively evaluated for impairment $ 39,057,779 $ 48,396,808 $ 42,926,820 $ 130,381,407 Ending balance: loans acquired with deteriorated credit quality $ - $ - $ - $ - December 31, 2015 Allowance for credit losses: Beginning balance - January 1, 2015 $ 187,129 $ 1,715,812 $ 100,114 $ 2,003,055 Charge-offs - (123,942) - (123,942) Provision - (30,993) - (30,993) Ending balance - December 31, 2015 $ 187,129 $ 1,560,877 $ 100,114 $ 1,848,120 Ending balance: individually evaluated for impairment $ - $ 305,962 $ - $ 305,962 Ending balance: collectively evaluated for impairment $ 187,129 $ 1,254,915 $ 100,114 $ 1,542,158 Ending balance: loans acquired with deteriorated credit quality $ - $ - $ - $ - Mortgage loans: Ending balance $ 33,522,978 $ 46,020,490 $ 34,851,557 $ 114,395,025 Ending balance: individually evaluated for impairment $ - $ 3,087,161 $ 93,269 $ 3,180,430 Ending balance: collectively evaluated for impairment $ 33,522,978 $ 42,933,329 $ 34,758,287 $ 111,214,594 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 March 31, 2016 Commercial $ - $ - $ - $ - $ - $ 39,057,779 $ 39,057,779 $ (187,129) $ 38,870,650 Residential 151,779 354,152 726,159 5,091,409 6,323,499 47,164,718 53,488,217 (1,791,705) 51,696,512 Residential Construction - - 64,895 - 64,895 42,861,925 42,926,820 (100,114) 42,826,706 Total $ 151,779 $ 354,152 $ 791,054 $ 5,091,409 $ 6,388,394 $ 129,084,422 $ 135,472,816 $ (2,078,948) $ 133,393,868 December 31, 2015 Commercial $ - $ - $ - $ - $ - $ 33,522,978 $ 33,522,978 $ (187,129) $ 33,335,849 Residential 1,162,102 884,143 2,212,993 3,087,161 7,346,399 38,674,091 46,020,490 (1,560,877) 44,459,613 Residential Construction - - 64,895 93,269 158,164 34,693,393 34,851,557 (100,114) 34,751,443 Total $ 1,162,102 $ 884,143 $ 2,277,888 $ 3,180,430 $ 7,504,563 $ 106,890,462 $ 114,395,025 $ (1,848,120) $ 112,546,905 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 March 31, 2016 With no related allowance recorded: Commercial $ - $ - $ - $ - $ - Residential - - - - - Residential construction - - - - - With an allowance recorded: Commercial $ - $ - $ - $ - $ - Residential 5,091,409 5,091,409 508,655 5,091,409 - Residential construction - - - - - Total: Commercial $ - $ - $ - $ - $ - Residential 5,091,409 5,091,409 508,655 5,091,409 - Residential construction - - - - - December 31, 2015 With no related allowance recorded: Commercial $ - $ - $ - $ - $ - Residential - - - - - Residential construction 93,269 93,269 - 93,269 - With an allowance recorded: Commercial $ - $ - $ - $ - $ - Residential 3,087,161 3,087,161 305,962 3,087,161 - Residential construction - - - - - Total: Commercial $ - $ - $ - $ - $ - Residential 3,087,161 3,087,161 305,962 3,087,161 - Residential construction 93,269 93,269 - 93,269 - 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 or greater delinquent 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 March 31, 2016 December 31, 2015 March 31, 2016 December 31, 2015 March 31, 2016 December 31, 2015 March 31, 2016 December 31, 2015 Performing $ 39,057,779 $ 33,522,978 $ 47,670,650 $ 40,720,336 $ 42,861,925 $ 34,693,393 $ 129,590,354 $ 108,936,707 Nonperforming - - 5,817,567 5,300,154 64,895 158,164 5,882,462 5,458,318 Total $ 39,057,779 $ 33,522,978 $ 53,488,217 $ 46,020,490 $ 42,926,820 $ 34,851,557 $ 135,472,816 $ 114,395,025 Non-Accrual Mortgage Loans Once a loan is past due 90 days, it is the policy of the Company 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 $440,000 and $268,000 as of March 31, 2016 and December 31, 2015, 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 2016 As of December 31 2015 Residential $ 5,817,567 $ 5,300,154 Residential construction 64,895 158,164 Total $ 5,882,462 $ 5,458,318 Loan Loss Reserve 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 2016 As of December 31 2015 Balance, beginning of period $ 2,805,900 $ 1,718,150 Provisions for losses 586,778 6,295,043 Charge-offs (40,041) (5,207,293) Balance, end of period $ 3,352,637 $ 2,805,900 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) Stock-based Compensation
4) Stock-based Compensation | 3 Months Ended |
Mar. 31, 2016 | |
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 $84,452 and $85,545 has been recognized for these plans for the three months ended March 31, 2016 and 2015, respectively. As of March 31, 2016, the total unrecognized compensation expense related to the options issued in December 2015 was $228,136 , which is expected to be recognized over the vesting period 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, 2016, and the changes during the three months ended March 31, 2016, 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, 2015 618,261 $ 3.89 577,436 $ 3.54 Granted - - Exercised (28,460) 2.15 - Cancelled - - Outstanding at March 31, 2016 589,801 $ 3.97 577,436 $ 3.54 As of March 31, 2016: Options exercisable 484,659 $ 3.45 498,686 $ 2.99 As of March 31, 2016: Available options for future grant 454,842 57,750 Weighted average contractual term of options outstanding at March 31, 2016 7.50 years 2.50 years Weighted average contractual term of options exercisable at March 31, 2016 7.03 years 2.16 years Aggregated intrinsic value of options outstanding at March 31, 2016 (1) $844,342 $1,096,391 Aggregated intrinsic value of options exercisable at March 31, 2016 (1) $844,342 $1,096,391 (1) The Company used a stock price of $5.09 as of March 31, 2016 to derive intrinsic value. 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, 2016 and 2015 was $91,989 and $438,989 , respectively. |
5) Earnings Per Share
5) Earnings Per Share | 3 Months Ended |
Mar. 31, 2016 | |
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 2016 2015 Numerator: Net earnings $ 1,793,532 $ 1,863,703 Denominator: Basic weighted-average shares outstanding 13,939,377 13,592,260 Effect of dilutive securities: Employee stock options 434,122 561,838 Diluted weighted-average shares outstanding 14,373,499 14,154,098 Basic net earnings per share $0.13 $0.14 Diluted net earnings per share $0.12 $0.13 Net earnings per share amounts have been adjusted for the effect of annual stock dividends. For the three months ended March 31, 2016 and 2015, there were 250,039 and 4,632 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, 2016 | |
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 CompanyÂ’s life insurance segment consists of life insurance premiums and operating expenses from the sale of insurance products sold by the CompanyÂ’s independent agency force and net investment income derived from investing policyholder and segment surplus funds. The CompanyÂ’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 CompanyÂ’s mortgage segment consists of fee income and expenses from the originations of residential 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 orm 10 K for the year ended December 31, 2015. Intersegment revenues are recorded at cost plus an agreed upon intercompany profit, and are eliminated upon consolidation. Factors Management Used to Identify the EnterpriseÂ’s Reportable Segments The CompanyÂ’s reportable segments are business units that are managed separately due to the different products provided and the need to report separately to the various regulatory jurisdictions. The Company regularly reviews the quantitative thresholds and other criteria to determine when other business segments may need to be reported. Life Insurance Cemetery/ Mortuary Mortgage Eliminations Consolidated For the Three Months Ended March 31, 2016 Revenues from external customers $ 22,075,134 $ 3,330,766 $ 40,608,415 $ - $ 66,014,315 Intersegment revenues 3,103,446 286,925 79,479 (3,469,850) - Segment profit before income taxes 1,065,168 469,055 1,316,542 - 2,850,765 Identifiable Assets 724,858,698 96,827,903 69,077,738 (133,414,858) 757,349,481 Goodwill 2,765,570 - - - 2,765,570 For the Three Months Ended March 31, 2015 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 |
7)_ Fair Value of Financial Ins
7): Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2016 | |
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: Level 2: 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: 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 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 Other Investments 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 : 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’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 seven and 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, 2016. 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 $ 8,941,232 $ 8,941,232 $ - $ - Total securities available for sale $ 8,941,232 $ 8,941,232 $ - $ - Restricted assets of cemeteries and mortuaries $ 687,214 $ 687,214 $ - $ - Cemetery perpetual care trust investments 669,366 669,366 - - Derivatives - interest rate lock commitments 5,096,573 - - 5,096,573 Other investments 1,222,188 - - 1,222,188 Total assets accounted for at fair value on a recurring basis $ 16,616,573 $ 10,297,812 $ - $ 6,318,761 Liabilities accounted for at fair value on a recurring basis Policyholder account balances $ (50,451,491) $ - $ - $ (50,451,491) Future policy benefits - annuities (69,287,925) - - (69,287,925) Derivatives - bank loan interest rate swaps (11,210) - - (11,210) - call options (63,686) (63,686) - - - put options (12,102) (12,102) - - - interest rate lock commitments (422,490) - - (422,490) Total liabilities accounted for at fair value on a recurring basis $ (120,248,904) $ (75,788) $ - $ (120,173,116) 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 Other Investments Balance - December 31, 2015 $ (50,694,953) $ (69,398,617) $ 3,333,091 $ (13,947) $ 1,174,769 Total gains (losses): Included in earnings 243,462 110,692 - - - Included in other comprehensive income - - 1,340,992 2,737 47,419 Balance - March 31, 2016 $ (50,451,491) $ (69,287,925) $ 4,674,083 $ (11,210) $ 1,222,188 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, 2016. 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 $ 1,499,786 $ - $ - $ 1,499,786 Real estate held for investment 1,242,000 - - 1,242,000 Total assets accounted for at fair value on a nonrecurring basis $ 2,741,786 $ - $ - $ 2,741,786 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, 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 $ 8,431,090 $ 8,431,090 $ - $ - Total securities available for sale $ 8,431,090 $ 8,431,090 $ - $ - Restricted assets of cemeteries and mortuaries $ 686,444 $ 686,444 $ - $ - Cemetery perpetual care trust investments 630,854 630,854 - - Derivatives - interest rate lock commitments 3,440,758 - - 3,440,758 Other investments 1,174,769 - - 1,174,769 Total assets accounted for at fair value on a recurring basis $ 14,363,915 $ 9,748,388 $ - $ 4,615,527 Liabilities accounted for at fair value on a recurring basis Policyholder account balances $ (50,694,953) $ - $ - $ (50,694,953) Future policy benefits - annuities (69,398,617) - - (69,398,617) Derivatives - bank loan interest rate swaps (13,947) - - (13,947) - call options (16,342) (16,342) - - - put options (28,829) (28,829) - - - interest rate lock commitment (107,667) - - (107,667) Total liabilities accounted for at fair value on a recurring basis $ (120,260,355) $ (45,171) $ - $ (120,215,184) 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 Other Investments Balance - December 31, 2014 $ (45,310,699) $ (65,540,985) $ 1,929,851 $ (31,370) $ - Purchases - - - - 1,200,000 Total gains (losses): Included in earnings (5,384,254) (3,857,632) - - - Included in other comprehensive income - - 1,403,240 17,423 (25,231) Balance - December 31, 2015 $ (50,694,953) $ (69,398,617) $ 3,333,091 $ (13,947) $ 1,174,769 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, 2015. 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 $ 6,217,551 $ - $ - $ 6,217,551 Real estate held for investment 95,000 - - 95,000 Total assets accounted for at fair value on a nonrecurring basis $ 6,312,551 $ - $ - $ 6,312,551 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, 2016 and December 31, 2015. The estimated fair value amounts for March 31, 2016 and December 31, 2015 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, 2016: Carrying Value Level 1 Level 2 Level 3 Total Estimated Fair Value Assets Mortgage loans: Residential $ 51,696,512 $ - $ - $ 55,117,152 $ 55,117,152 Residential construction 42,826,706 - - 42,826,706 42,826,706 Commercial 38,870,650 - - 40,272,245 40,272,245 Mortgage loans, net $ 133,393,868 $ - $ - $ 138,216,103 $ 138,216,103 Policy loans 6,892,022 - - 6,892,022 6,892,022 Insurance assignments, net 31,165,274 - - 31,165,274 31,165,274 Short-term investments 17,809,307 - - 17,809,307 17,809,307 Liabilities Bank and other loans payable $ (41,242,032) $ - $ - $ (41,242,032) $ (41,242,032) 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, 2015: Carrying Value Level 1 Level 2 Level 3 Total Estimated Fair Value Assets Mortgage loans: Residential $ 44,459,613 $ - $ - $ 47,193,950 $ 47,193,950 Residential construction 34,751,443 - - 34,751,443 34,751,443 Commercial 33,335,849 - - 34,778,136 34,778,136 Mortgage loans, net $ 112,546,905 $ - $ - $ 116,723,529 $ 116,723,529 Policy loans 6,896,457 - - 6,896,457 6,896,457 Insurance assignments, net 31,511,195 - - 31,511,195 31,511,195 Short-term investments 16,915,808 - - 16,915,808 16,915,808 Liabilities Bank and other loans payable $ (40,894,968) $ - $ - $ (40,894,968) $ (40,894,968) 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 thru 2016 is determined from pricing of similar loans that were sold in 2014 and 2015 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 Loans and Other Investments : 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, 2016 | |
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 CompanyÂ’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 CompanyÂ’s historical experience in collecting similar receivables. The second component is based upon individual evaluation of loans that are determined to be impaired. Upon determining impairment the Company establishes an individual impairment allowance based upon an assessment of the fair value of the underlying collateral. See the schedules in Note 3 for additional information. 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 CompanyÂ’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, 2016 | |
Notes | |
9) Derivative Commitments | 9) Derivative Commitments Interest Rate Locks and 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. Call and Put Options 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. 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, 2016 and December 31, 2015. Fair Value of Derivative Instruments Asset Derivatives Liability Derivatives March 31, 2016 December 31, 2015 March 31, 2016 December 31, 2015 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 $5,096,573 other assets $3,440,758 Other liabilities $ 422,490 Other liabilities $ 107,667 Call options -- -- -- -- Other liabilities 63,686 Other liabilities 16,342 Put options -- -- -- -- Other liabilities 12,102 Other liabilities 28,829 Interest rate swaps -- -- -- -- Bank loans payable 11,210 Bank loans payable 13,947 Total $5,096,573 $3,440,758 $ 509,488 $ 166,785 The following table shows the gain 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 Recognized in OCI Three Months Ended March 31 Derivative - Cash Flow Hedging Relationships: 2016 2015 Interest Rate Lock Commitments $ 1,340,992 $ 2,487,891 Interest Rate Swaps 2,737 3,951 Sub Total 1,343,729 2,491,842 Tax Effect 524,055 971,819 Total $ 819,674 $ 1,520,023 |
10) Reinsurance, Commitments an
10) Reinsurance, Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
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. Mortgage Loan Loss Settlements Future loan losses can be extremely difficult to estimate. However, management believes that the Company’s reserve methodology and its current practice of property preservation allow it to estimate its potential losses on loans sold. The amounts expensed for loan losses for the three months ended March 31, 2016 and 2015 were $587,000 and $667,000 , respectively. The estimated liability for indemnification losses is included in other liabilities and accrued expenses and, as of March 31, 2016 and December 31, 2015, the balances were $3,353,000 and $2,806,000 , respectively. Inquiry Regarding FHA Insured Loans SecurityNational Mortgage has been cooperating with the U.S. Department of Justice and the Office of the Inspector General for the Department of Housing and Urban Development (HUD) in a civil investigation regarding compliance with requirements relating to certain mortgage loans insured by the Federal Housing Administration (FHA). No demand has been made from FHA and SecurityNational Mortgage has not established a liability for this matter absent a specific demand because it is not able to estimate a range of reasonably potential loss due to significant uncertainties resulting from: the absence of any specific demand from FHA, the potential remedies that SecurityNational Mortgage may have, including possible defenses, and the lack of information concerning the performance of its FHA insured originations, the majority of which SecurityNational Mortgage does not service. The investigation has focused on loans originated by SecurityNational Mortgage on or after January 1, 2006. The FHA mortgage loans that SecurityNational Mortgage originated between January 1, 2006 and May 21, 2013 total approximately 45,900 loans with an original principal balance of approximately $7.9 billion. 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, 2016, the Company’s commitments were $66,443,000 for these loans of which $42,927,000 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 (3.50% as of March 31, 2016). Maturities range between six and twelve months. The Company belongs to a captive insurance group for certain casualty insurance, worker compensation and liability programs. Insurance reserves are maintained relative to these programs. The level of exposure from catastrophic events is limited by the purchase of stop-loss and aggregate liability reinsurance coverage. When estimating the insurance liabilities and related reserves, the captive insurance management considers a number of factors, which include historical claims experience, demographic factors, severity factors and valuations provided by independent third-party actuaries. If actual claims or adverse development of loss reserves occurs and exceed these estimates, additional reserves may be required. The estimation process contains uncertainty since captive insurance management must use judgment to estimate the ultimate cost that will be incurred to settle reported claims and unreported claims for incidents incurred but not reported as of the balance sheet date. At March 31, 2016, $261,168 of reserves was established related to such insurance programs versus $834,855 at December 31, 2015. The Company is a defendant in various other legal actions arising from the normal conduct of business. Management believes that none of the actions will have a material effect on the Company’s financial position or results of operations. Based on management’s assessment and legal counsel’s representations concerning the likelihood of unfavorable outcomes, no amounts have been accrued for the above claims in the consolidated financial statements. 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, 2016 | |
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 2016 As of December 31 2015 Amortized cost: Balance before valuation allowance at beginning of year $ 12,679,755 $ 7,834,747 MSRs proceeds from loan sales 1,499,786 6,217,551 Amortization (491,179) (1,372,543) Application of valuation allowance to write down MSRs with other than temporary impairment - - Balance before valuation allowance at year end $ 13,688,362 $ 12,679,755 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 $ 13,688,362 $ 12,679,755 Estimated fair value of MSRs at end of period $ 14,354,525 $ 13,897,160 The Company reports these MSRs pursuant to the accounting policy discussed in Note 7. |
1) Basis of Presentation_ Accou
1) Basis of Presentation: Accounting Policy (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
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, 2015, included in the CompanyÂ’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, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. |
1) Basis of Presentation_ Use o
1) Basis of Presentation: Use of Estimates Policy (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
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 value of interest rate locks and commitments, those used in determining deferred acquisition costs and the value of business acquired, those used in determining the value of mortgage loans foreclosed to REO, those used in determining the liability for future policy benefits and unearned revenue, those used in determining the estimated future costs for pre-need sales, those used in determining the value of mortgage servicing rights, those used in determining valuation allowances for mortgage loans on real estate, those used in determining loan loss reserve, and those used in determining deferred tax assets and liabilities. Although some variability is inherent in these estimates, management believes the amounts provided are fairly stated in all material respects. |
2) Recent Accounting Pronounc21
2) Recent Accounting Pronouncements: New Accounting Pronouncements, Policy (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Policies | |
New Accounting Pronouncements, Policy | 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, 2017. 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. 2016-01: “Financial Instruments – Overall (Topic 825-10)” – Issued in January 2016, ASU 2016-01 changes the accounting for non-consolidated equity investments that are not accounted for under the equity method of accounting by requiring changes in fair value to be recognized in income. Under current guidance, changes in fair value for investments of this nature are recognized in accumulated other comprehensive income as a component of stockholders’ equity. Additionally, ASU 2016-01 simplifies the impairment assessment of equity investments without readily determinable fair values; requires entities to use the exit price when estimating the fair value of financial instruments; and modifies various presentation disclosure requirements for financial instruments. The new authoritative guidance is effective for interim and annual periods beginning after December 15, 2017. The Company is in the process of evaluating the potential impact of this standard. ASU No. 2016-02: “Leases (Topic 842)” - Issued in February 2016, ASU 2016-02 supersedes the leases requirements in ASC Topic 840, “Leases”, and was issued to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The new authoritative guidance is effective for interim and annual periods beginning after December 15, 2018. The Company is in the process of evaluating the potential impact of this standard. 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_ Held-to-maturit
3) Investments: Held-to-maturity Securities (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Held-to-maturity Securities | Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value March 31, 2016 Fixed maturity securities held to maturity carried at amortized cost: Bonds: U.S. Treasury securities and obligations of U.S. Government agencies $ 3,558,169 $ 378,157 $ - $ 3,936,326 Obligations of states and political subdivisions 1,803,498 200,444 (455) 2,003,487 Corporate securities including public utilities 133,970,698 11,576,671 (4,997,905) 140,549,464 Mortgage-backed securities 7,501,609 303,697 (173,323) 7,631,983 Redeemable preferred stock 612,023 47,811 - 659,834 Total fixed maturity securities held to maturity $ 147,445,997 $ 12,506,780 $ (5,171,683) $ 154,781,094 |
AsOfDecember312015Member | |
Held-to-maturity Securities | Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value December 31, 2015 Fixed maturity securities held to maturity carried at amortized cost: Bonds: U.S. Treasury securities and obligations of U.S. Government agencies $ 3,560,579 $ 292,869 $ (4,743) $ 3,848,705 Obligations of states and political subdivisions 1,805,828 182,073 (1,040) 1,986,861 Corporate securities including public utilities 134,488,108 9,836,355 (5,501,743) 138,822,720 Mortgage-backed securities 5,091,887 190,867 (75,580) 5,207,174 Redeemable preferred stock 612,023 29,675 - 641,698 Total fixed maturity securities held to maturity $ 145,558,425 $ 10,531,839 $ (5,583,106) $ 150,507,158 |
3) Investments_ Available-for-s
3) Investments: Available-for-sale Securities (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Available-for-sale Securities | Equity securities available for sale at estimated fair value: Common stock: Industrial, miscellaneous and all other $ 10,051,680 $ 295,489 $ (1,405,937) $ 8,941,232 Total equity securities available for sale at estimated fair value $ 10,051,680 $ 295,489 $ (1,405,937) $ 8,941,232 Mortgage loans on real estate and construction loans held for investment at amortized cost: Residential $ 53,488,217 Residential construction 42,926,820 Commercial 39,057,779 Less: Allowance for loan losses (2,078,948) Total mortgage loans on real estate and construction loans held for investment $ 133,393,868 Real estate held for investment - net of depreciation $ 116,700,727 Policy loans and other investments are shown at amortized cost except for other investments that are shown at estimated fair value: Policy loans $ 6,892,022 Insurance assignments 32,149,213 Promissory notes 48,797 Other investments at estimated fair value 1,222,188 Less: Allowance for doubtful accounts (1,032,736) Total policy loans and other investments $ 39,279,484 Short-term investments at amortized cost $ 17,809,307 |
AsOfDecember312015Member | |
Available-for-sale Securities | Equity securities available for sale at estimated fair value: Common stock: Industrial, miscellaneous and all other $ 9,891,500 $ 213,683 $ (1,674,093) $ 8,431,090 Total securities available for sale carried at estimated fair value $ 9,891,500 $ 213,683 $ (1,674,093) $ 8,431,090 Mortgage loans on real estate and construction loans held for investment at amortized cost: Residential $ 46,020,490 Residential construction 34,851,557 Commercial 33,522,978 Less: Allowance for loan losses (1,848,120) Total mortgage loans on real estate and construction loans held for investment $ 112,546,905 Real estate held for investment - net of depreciation $ 114,852,432 Policy loans and other investments are shown at amortized cost except for other investments that are shown at estimated fair value: Policy loans $ 6,896,457 Insurance assignments 32,369,014 Promissory notes 48,797 Other investments at estimated fair value 1,174,769 Less: Allowance for doubtful accounts (906,616) Total policy loans and other investments $ 39,582,421 Short-term investments at amortized cost $ 16,915,808 |
3) Investments_ Schedule of Unr
3) Investments: Schedule of Unrealized Loss on Investments (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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, 2016 U.S. Treasury Securities and Obligations of U.S. Government Agencies $ - 0 $ - 0 $ - Obligations of states and political subdivisions - 0 455 1 455 Corporate securities including public utilities 2,267,982 70 2,729,923 25 4,997,905 Mortgage-backed securities 173,323 6 - 0 173,323 Total unrealized losses $ 2,441,305 76 $ 2,730,378 26 $ 5,171,683 Fair Value $ 21,751,797 $ 6,404,000 $ 28,155,797 At December 31, 2015 U.S. Treasury Securities and Obligations of U.S. Government Agencies $ 4,743 2 $ - 0 $ 4,743 Obligations of states and political subdivisions - 0 1,040 1 1,040 Corporate securities including public utilities 3,701,572 98 1,800,171 18 5,501,743 Mortgage-backed securities 75,580 4 - 0 75,580 Total unrealized losses $ 3,781,895 104 $ 1,801,211 19 $ 5,583,106 Fair Value $ 34,076,401 $ 3,809,957 $ 37,886,358 |
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, 2016 Industrial, miscellaneous and all other $ 798,607 180 $ 607,330 68 $ 1,405,937 Total unrealized losses $ 798,607 180 $ 607,330 68 $ 1,405,937 Fair Value $ 3,955,133 $ 1,154,812 $ 5,109,945 At December 31, 2015 Industrial, miscellaneous and all other $ 997,862 222 $ 676,232 74 $ 1,674,093 Total unrealized losses $ 997,862 222 $ 676,232 74 $ 1,674,093 Fair Value $ 4,177,709 $ 760,860 $ 4,938,569 |
3) Investments_ Investments Cla
3) Investments: Investments Classified by Contractual Maturity Date (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Held-to-maturity Securities | |
Investments Classified by Contractual Maturity Date | Amortized Cost Estimated Fair Value Held to Maturity: Due in 2016 $ 4,298,647 $ 4,345,102 Due in 2017 through 2020 33,393,520 35,451,062 Due in 2021 through 2025 35,564,893 37,200,353 Due after 2025 66,075,305 69,492,760 Mortgage-backed securities 7,501,609 7,631,983 Redeemable preferred stock 612,023 659,834 Total held to maturity $ 147,445,997 $ 154,781,094 |
Available-for-sale Securities | |
Investments Classified by Contractual Maturity Date | Cost Estimated Fair Value Available for Sale: Common stock $ 10,051,680 $ 8,941,232 Total available for sale $ 10,051,680 $ 8,941,232 |
3) Investments_ Gain (Loss) on
3) Investments: Gain (Loss) on Investments (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Tables/Schedules | |
Gain (Loss) on Investments | Three Months Ended March 31 2016 2015 Fixed maturity securities held to maturity: Gross realized gains $ - $ 85,997 Gross realized losses (24,795) (9,776) Other than temporary impairments (30,000) (30,000) Securities available for sale: Gross realized gains 63,495 87,720 Gross realized losses (23,878) (1,016) Other than temporary impairments (43,630) (25,896) Other assets: Gross realized gains 84,768 257,139 Gross realized losses (1,668) - Total $ 24,292 $ 364,168 |
3) Investments_ Schedule of Maj
3) Investments: Schedule of Major categories of net investment income (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Tables/Schedules | |
Schedule of Major categories of net investment income | Three Months Ended March 31 2016 2015 Fixed maturity securities $ 2,050,569 $ 1,980,696 Equity securities 71,041 59,418 Mortgage loans on real estate 2,026,515 1,874,158 Real estate 2,838,484 2,120,650 Policy loans 182,206 188,546 Insurance assignments 3,104,788 2,789,006 Short-term investments, principally interest on sale of mortgage loans and other 1,863,144 1,511,095 Gross investment income 12,136,747 10,523,569 Investment expenses (3,144,556) (2,700,725) Net investment income $ 8,992,191 $ 7,822,844 |
3) Investments_ Residential Rea
3) Investments: Residential Real Estate Investment (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Tables/Schedules | |
Residential Real Estate Investment | Net Ending Balance March 31 December 31 2016 2015 Arizona $ 940,537 $ 944,614 California 5,929,061 6,158,253 Colorado 549,214 553,230 Florida 9,082,242 9,203,624 Illinois - 165,800 Oklahoma 99,264 99,862 Oregon 120,000 120,000 South Carolina 676,200 823,872 Texas 1,279,327 1,198,860 Utah 61,346,004 62,117,738 Washington 286,181 286,182 $ 80,308,030 $ 81,672,035 |
3) Investments_ Schedule of All
3) Investments: Schedule of Allowance for loan losses as a contra-asset account (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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 March 31, 2016 Allowance for credit losses: Beginning balance - January 1, 2016 $ 187,129 $ 1,560,877 $ 100,114 $ 1,848,120 Charge-offs - (18,374) - (18,374) Provision - 249,202 - 249,202 Ending balance -March 31, 2016 $ 187,129 $ 1,791,705 $ 100,114 $ 2,078,948 Ending balance: individually evaluated for impairment $ - $ 508,655 $ - $ 508,655 Ending balance: collectively evaluated for impairment $ 187,129 $ 1,283,050 $ 100,114 $ 1,570,293 Ending balance: loans acquired with deteriorated credit quality $ - $ - $ - $ - Mortgage loans: Ending balance $ 39,057,779 $ 53,488,217 $ 42,926,820 $ 135,472,816 Ending balance: individually evaluated for impairment $ - $ 5,091,409 $ - $ 5,091,409 Ending balance: collectively evaluated for impairment $ 39,057,779 $ 48,396,808 $ 42,926,820 $ 130,381,407 Ending balance: loans acquired with deteriorated credit quality $ - $ - $ - $ - December 31, 2015 Allowance for credit losses: Beginning balance - January 1, 2015 $ 187,129 $ 1,715,812 $ 100,114 $ 2,003,055 Charge-offs - (123,942) - (123,942) Provision - (30,993) - (30,993) Ending balance - December 31, 2015 $ 187,129 $ 1,560,877 $ 100,114 $ 1,848,120 Ending balance: individually evaluated for impairment $ - $ 305,962 $ - $ 305,962 Ending balance: collectively evaluated for impairment $ 187,129 $ 1,254,915 $ 100,114 $ 1,542,158 Ending balance: loans acquired with deteriorated credit quality $ - $ - $ - $ - Mortgage loans: Ending balance $ 33,522,978 $ 46,020,490 $ 34,851,557 $ 114,395,025 Ending balance: individually evaluated for impairment $ - $ 3,087,161 $ 93,269 $ 3,180,430 Ending balance: collectively evaluated for impairment $ 33,522,978 $ 42,933,329 $ 34,758,287 $ 111,214,594 Ending balance: loans acquired with deteriorated credit quality $ - $ - $ - $ - |
3) Investments_ Schedule of agi
3) Investments: Schedule of aging of mortgage loans (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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 March 31, 2016 Commercial $ - $ - $ - $ - $ - $ 39,057,779 $ 39,057,779 $ (187,129) $ 38,870,650 Residential 151,779 354,152 726,159 5,091,409 6,323,499 47,164,718 53,488,217 (1,791,705) 51,696,512 Residential Construction - - 64,895 - 64,895 42,861,925 42,926,820 (100,114) 42,826,706 Total $ 151,779 $ 354,152 $ 791,054 $ 5,091,409 $ 6,388,394 $ 129,084,422 $ 135,472,816 $ (2,078,948) $ 133,393,868 December 31, 2015 Commercial $ - $ - $ - $ - $ - $ 33,522,978 $ 33,522,978 $ (187,129) $ 33,335,849 Residential 1,162,102 884,143 2,212,993 3,087,161 7,346,399 38,674,091 46,020,490 (1,560,877) 44,459,613 Residential Construction - - 64,895 93,269 158,164 34,693,393 34,851,557 (100,114) 34,751,443 Total $ 1,162,102 $ 884,143 $ 2,277,888 $ 3,180,430 $ 7,504,563 $ 106,890,462 $ 114,395,025 $ (1,848,120) $ 112,546,905 |
3) Investments_ Schedule of Imp
3) Investments: Schedule of Impaired Mortgage Loans (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Tables/Schedules | |
Schedule of Impaired Mortgage Loans | Impaired Loans Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized March 31, 2016 With no related allowance recorded: Commercial $ - $ - $ - $ - $ - Residential - - - - - Residential construction - - - - - With an allowance recorded: Commercial $ - $ - $ - $ - $ - Residential 5,091,409 5,091,409 508,655 5,091,409 - Residential construction - - - - - Total: Commercial $ - $ - $ - $ - $ - Residential 5,091,409 5,091,409 508,655 5,091,409 - Residential construction - - - - - December 31, 2015 With no related allowance recorded: Commercial $ - $ - $ - $ - $ - Residential - - - - - Residential construction 93,269 93,269 - 93,269 - With an allowance recorded: Commercial $ - $ - $ - $ - $ - Residential 3,087,161 3,087,161 305,962 3,087,161 - Residential construction - - - - - Total: Commercial $ - $ - $ - $ - $ - Residential 3,087,161 3,087,161 305,962 3,087,161 - Residential construction 93,269 93,269 - 93,269 - |
3) Investments_ Schedule Of Cre
3) Investments: Schedule Of Credit Risk Of Mortgage Loans Based On Performance Status (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Tables/Schedules | |
Schedule Of Credit Risk Of Mortgage Loans Based On Performance Status: | Mortgage Loan Credit Exposure Credit Risk Profile Based on Payment Activity Commercial Residential Residential Construction Total March 31, 2016 December 31, 2015 March 31, 2016 December 31, 2015 March 31, 2016 December 31, 2015 March 31, 2016 December 31, 2015 Performing $ 39,057,779 $ 33,522,978 $ 47,670,650 $ 40,720,336 $ 42,861,925 $ 34,693,393 $ 129,590,354 $ 108,936,707 Nonperforming - - 5,817,567 5,300,154 64,895 158,164 5,882,462 5,458,318 Total $ 39,057,779 $ 33,522,978 $ 53,488,217 $ 46,020,490 $ 42,926,820 $ 34,851,557 $ 135,472,816 $ 114,395,025 |
3) Investments_ Schedule of Mor
3) Investments: Schedule of Mortgage loans on a nonaccrual status (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Tables/Schedules | |
Schedule of Mortgage loans on a nonaccrual status | Mortgage Loans on Nonaccrual Status As of March 31 2016 As of December 31 2015 Residential $ 5,817,567 $ 5,300,154 Residential construction 64,895 158,164 Total $ 5,882,462 $ 5,458,318 |
3) Investments_ Schedule of loa
3) Investments: Schedule of loan loss reserve which is included in other liabilities and accrued expenses (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Tables/Schedules | |
Schedule of loan loss reserve which is included in other liabilities and accrued expenses | As of March 31 2016 As of December 31 2015 Balance, beginning of period $ 2,805,900 $ 1,718,150 Provisions for losses 586,778 6,295,043 Charge-offs (40,041) (5,207,293) Balance, end of period $ 3,352,637 $ 2,805,900 |
4) Stock-based Compensation_ Sc
4) Stock-based Compensation: Schedule of stock inventive plan changes (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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, 2015 618,261 $ 3.89 577,436 $ 3.54 Granted - - Exercised (28,460) 2.15 - Cancelled - - Outstanding at March 31, 2016 589,801 $ 3.97 577,436 $ 3.54 As of March 31, 2016: Options exercisable 484,659 $ 3.45 498,686 $ 2.99 As of March 31, 2016: Available options for future grant 454,842 57,750 Weighted average contractual term of options outstanding at March 31, 2016 7.50 years 2.50 years Weighted average contractual term of options exercisable at March 31, 2016 7.03 years 2.16 years Aggregated intrinsic value of options outstanding at March 31, 2016 (1) $844,342 $1,096,391 Aggregated intrinsic value of options exercisable at March 31, 2016 (1) $844,342 $1,096,391 (1) The Company used a stock price of $5.09 as of March 31, 2016 to derive intrinsic value. A summary of the status of the CompanyÂ’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. |
5) Earnings Per Share_ Schedule
5) Earnings Per Share: Schedule of Earnings Per Share, Basic and Diluted (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Tables/Schedules | |
Schedule of Earnings Per Share, Basic and Diluted | Three Months Ended March 31 2016 2015 Numerator: Net earnings $ 1,793,532 $ 1,863,703 Denominator: Basic weighted-average shares outstanding 13,939,377 13,592,260 Effect of dilutive securities: Employee stock options 434,122 561,838 Diluted weighted-average shares outstanding 14,373,499 14,154,098 Basic net earnings per share $0.13 $0.14 Diluted net earnings per share $0.12 $0.13 |
6) Business Segments_ Schedule
6) Business Segments: Schedule of Revenues and Expenses by Reportable Segment (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Tables/Schedules | |
Schedule of Revenues and Expenses by Reportable Segment | Life Insurance Cemetery/ Mortuary Mortgage Eliminations Consolidated For the Three Months Ended March 31, 2016 Revenues from external customers $ 22,075,134 $ 3,330,766 $ 40,608,415 $ - $ 66,014,315 Intersegment revenues 3,103,446 286,925 79,479 (3,469,850) - Segment profit before income taxes 1,065,168 469,055 1,316,542 - 2,850,765 Identifiable Assets 724,858,698 96,827,903 69,077,738 (133,414,858) 757,349,481 Goodwill 2,765,570 - - - 2,765,570 For the Three Months Ended March 31, 2015 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 |
7)_ Fair Value of Financial I38
7): Fair Value of Financial Instruments: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
AsOfMarch312016Member | |
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 $ 8,941,232 $ 8,941,232 $ - $ - Total securities available for sale $ 8,941,232 $ 8,941,232 $ - $ - Restricted assets of cemeteries and mortuaries $ 687,214 $ 687,214 $ - $ - Cemetery perpetual care trust investments 669,366 669,366 - - Derivatives - interest rate lock commitments 5,096,573 - - 5,096,573 Other investments 1,222,188 - - 1,222,188 Total assets accounted for at fair value on a recurring basis $ 16,616,573 $ 10,297,812 $ - $ 6,318,761 Liabilities accounted for at fair value on a recurring basis Policyholder account balances $ (50,451,491) $ - $ - $ (50,451,491) Future policy benefits - annuities (69,287,925) - - (69,287,925) Derivatives - bank loan interest rate swaps (11,210) - - (11,210) - call options (63,686) (63,686) - - - put options (12,102) (12,102) - - - interest rate lock commitments (422,490) - - (422,490) Total liabilities accounted for at fair value on a recurring basis $ (120,248,904) $ (75,788) $ - $ (120,173,116) |
AsOfDecember312015Member | |
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 $ 8,431,090 $ 8,431,090 $ - $ - Total securities available for sale $ 8,431,090 $ 8,431,090 $ - $ - Restricted assets of cemeteries and mortuaries $ 686,444 $ 686,444 $ - $ - Cemetery perpetual care trust investments 630,854 630,854 - - Derivatives - interest rate lock commitments 3,440,758 - - 3,440,758 Other investments 1,174,769 - - 1,174,769 Total assets accounted for at fair value on a recurring basis $ 14,363,915 $ 9,748,388 $ - $ 4,615,527 Liabilities accounted for at fair value on a recurring basis Policyholder account balances $ (50,694,953) $ - $ - $ (50,694,953) Future policy benefits - annuities (69,398,617) - - (69,398,617) Derivatives - bank loan interest rate swaps (13,947) - - (13,947) - call options (16,342) (16,342) - - - put options (28,829) (28,829) - - - interest rate lock commitment (107,667) - - (107,667) Total liabilities accounted for at fair value on a recurring basis $ (120,260,355) $ (45,171) $ - $ (120,215,184) |
7)_ Fair Value of Financial I39
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, 2016 | |
AsOfMarch312016Member | |
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 Other Investments Balance - December 31, 2015 $ (50,694,953) $ (69,398,617) $ 3,333,091 $ (13,947) $ 1,174,769 Total gains (losses): Included in earnings 243,462 110,692 - - - Included in other comprehensive income - - 1,340,992 2,737 47,419 Balance - March 31, 2016 $ (50,451,491) $ (69,287,925) $ 4,674,083 $ (11,210) $ 1,222,188 |
AsOfDecember312015Member | |
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 Other Investments Balance - December 31, 2014 $ (45,310,699) $ (65,540,985) $ 1,929,851 $ (31,370) $ - Purchases - - - - 1,200,000 Total gains (losses): Included in earnings (5,384,254) (3,857,632) - - - Included in other comprehensive income - - 1,403,240 17,423 (25,231) Balance - December 31, 2015 $ (50,694,953) $ (69,398,617) $ 3,333,091 $ (13,947) $ 1,174,769 |
7)_ Fair Value of Financial I40
7): Fair Value of Financial Instruments: Schedule of Fair Value Measurements, Nonrecurring (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
AsOfMarch312016Member | |
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 $ 1,499,786 $ - $ - $ 1,499,786 Real estate held for investment 1,242,000 - - 1,242,000 Total assets accounted for at fair value on a nonrecurring basis $ 2,741,786 $ - $ - $ 2,741,786 |
AsOfDecember312015Member | |
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 $ 6,217,551 $ - $ - $ 6,217,551 Real estate held for investment 95,000 - - 95,000 Total assets accounted for at fair value on a nonrecurring basis $ 6,312,551 $ - $ - $ 6,312,551 |
7)_ Fair Value of Financial I41
7): Fair Value of Financial Instruments: Schedule of Financial Instruments Carried at Other Than Fair Value (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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 $ 51,696,512 $ - $ - $ 55,117,152 $ 55,117,152 Residential construction 42,826,706 - - 42,826,706 42,826,706 Commercial 38,870,650 - - 40,272,245 40,272,245 Mortgage loans, net $ 133,393,868 $ - $ - $ 138,216,103 $ 138,216,103 Policy loans 6,892,022 - - 6,892,022 6,892,022 Insurance assignments, net 31,165,274 - - 31,165,274 31,165,274 Short-term investments 17,809,307 - - 17,809,307 17,809,307 Liabilities Bank and other loans payable $ (41,242,032) $ - $ - $ (41,242,032) $ (41,242,032) 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, 2015: Carrying Value Level 1 Level 2 Level 3 Total Estimated Fair Value Assets Mortgage loans: Residential $ 44,459,613 $ - $ - $ 47,193,950 $ 47,193,950 Residential construction 34,751,443 - - 34,751,443 34,751,443 Commercial 33,335,849 - - 34,778,136 34,778,136 Mortgage loans, net $ 112,546,905 $ - $ - $ 116,723,529 $ 116,723,529 Policy loans 6,896,457 - - 6,896,457 6,896,457 Insurance assignments, net 31,511,195 - - 31,511,195 31,511,195 Short-term investments 16,915,808 - - 16,915,808 16,915,808 Liabilities Bank and other loans payable $ (40,894,968) $ - $ - $ (40,894,968) $ (40,894,968) |
9) Derivative Commitments_ Sche
9) Derivative Commitments: Schedule of Derivative Assets at Fair Value (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Tables/Schedules | |
Schedule of Derivative Assets at Fair Value | Fair Value of Derivative Instruments Asset Derivatives Liability Derivatives March 31, 2016 December 31, 2015 March 31, 2016 December 31, 2015 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 $5,096,573 other assets $3,440,758 Other liabilities $ 422,490 Other liabilities $ 107,667 Call options -- -- -- -- Other liabilities 63,686 Other liabilities 16,342 Put options -- -- -- -- Other liabilities 12,102 Other liabilities 28,829 Interest rate swaps -- -- -- -- Bank loans payable 11,210 Bank loans payable 13,947 Total $5,096,573 $3,440,758 $ 509,488 $ 166,785 |
9) Derivative Commitments_ Sc43
9) Derivative Commitments: Schedule of Gains and Losses on Derivatives (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Tables/Schedules | |
Schedule of Gains and Losses on Derivatives | Net Amount Gain Recognized in OCI Three Months Ended March 31 Derivative - Cash Flow Hedging Relationships: 2016 2015 Interest Rate Lock Commitments $ 1,340,992 $ 2,487,891 Interest Rate Swaps 2,737 3,951 Sub Total 1,343,729 2,491,842 Tax Effect 524,055 971,819 Total $ 819,674 $ 1,520,023 |
11) Mortgage Servicing Rights_
11) Mortgage Servicing Rights: Schedule of Mortgage Servicing Rights (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Tables/Schedules | |
Schedule of Mortgage Servicing Rights | As of March 31 2016 As of December 31 2015 Amortized cost: Balance before valuation allowance at beginning of year $ 12,679,755 $ 7,834,747 MSRs proceeds from loan sales 1,499,786 6,217,551 Amortization (491,179) (1,372,543) Application of valuation allowance to write down MSRs with other than temporary impairment - - Balance before valuation allowance at year end $ 13,688,362 $ 12,679,755 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 $ 13,688,362 $ 12,679,755 Estimated fair value of MSRs at end of period $ 14,354,525 $ 13,897,160 |
3) Investments_ Held-to-matur45
3) Investments: Held-to-maturity Securities (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
AmortizedCost | $ 147,445,997 | $ 145,558,425 |
Held-to-maturity Securities, Unrecognized Holding Gain | 12,506,780 | 10,531,839 |
Held-to-maturity Securities, Unrecognized Holding Loss | (5,171,683) | (5,583,106) |
HeldToMaturitySecuritiesEstimatedFairValue | 154,781,094 | 150,507,158 |
US Treasury and Government | ||
AmortizedCost | 3,558,169 | 3,560,579 |
Held-to-maturity Securities, Unrecognized Holding Gain | 378,157 | 292,869 |
Held-to-maturity Securities, Unrecognized Holding Loss | (4,743) | |
HeldToMaturitySecuritiesEstimatedFairValue | 3,936,326 | 3,848,705 |
US States and Political Subdivisions Debt Securities | ||
AmortizedCost | 1,803,498 | 1,805,828 |
Held-to-maturity Securities, Unrecognized Holding Gain | 200,444 | 182,073 |
Held-to-maturity Securities, Unrecognized Holding Loss | (455) | (1,040) |
HeldToMaturitySecuritiesEstimatedFairValue | 2,003,487 | 1,986,861 |
Corporate Debt Securities | ||
AmortizedCost | 133,970,698 | 134,488,108 |
Held-to-maturity Securities, Unrecognized Holding Gain | 11,576,671 | 9,836,355 |
Held-to-maturity Securities, Unrecognized Holding Loss | (4,997,905) | (5,501,743) |
HeldToMaturitySecuritiesEstimatedFairValue | 140,549,464 | 138,822,720 |
Collateralized Mortgage Backed Securities | ||
AmortizedCost | 7,501,609 | 5,091,887 |
Held-to-maturity Securities, Unrecognized Holding Gain | 303,697 | 190,867 |
Held-to-maturity Securities, Unrecognized Holding Loss | (173,323) | (75,580) |
HeldToMaturitySecuritiesEstimatedFairValue | 7,631,983 | 5,207,174 |
Redeemable Preferred Stock | ||
AmortizedCost | 612,023 | 612,023 |
Held-to-maturity Securities, Unrecognized Holding Gain | 47,811 | 29,675 |
HeldToMaturitySecuritiesEstimatedFairValue | $ 659,834 | $ 641,698 |
3) Investments_ Available-for46
3) Investments: Available-for-sale Securities (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Available-for-sale Securities, Amortized Cost Basis | $ 10,051,680 | |
AvailableForSaleSecuritiesEstimatedFairValue | 8,941,232 | |
Mortgage loans on real estate and construction | 133,393,868 | $ 112,546,905 |
Mortgage loans on real estate and construction, allowance for losses | (2,078,948) | (1,848,120) |
Real estate held for investment, net of depreciation | 116,700,727 | 114,852,432 |
Loans held for sale policy loans | 6,892,022 | 6,896,457 |
Loans held for sale insurance assignments | 32,149,213 | 32,369,014 |
Loans held for sale promissory notes | 48,797 | 48,797 |
Other investments at estimated fair value | 1,222,188 | 1,174,769 |
Loans held for sale allowance for doubtful accounts | (1,032,736) | (906,616) |
Total policy loans and other investments | 39,279,484 | 39,582,421 |
Short-term investments at amortized cost | 17,809,307 | 16,915,808 |
Residential Mortgage | ||
Mortgage loans on real estate and construction | 53,488,217 | 46,020,490 |
Residential Construction | ||
Mortgage loans on real estate and construction | 42,926,820 | 34,851,557 |
Commercial Loan | ||
Mortgage loans on real estate and construction | 39,057,779 | 33,522,978 |
Common Stock | ||
Available-for-sale Securities, Amortized Cost Basis | 10,051,680 | |
AvailableForSaleSecuritiesEstimatedFairValue | 8,941,232 | |
Industrial, miscellaneous and all other equity securities | ||
Available-for-sale Securities, Amortized Cost Basis | 10,051,680 | 9,891,500 |
Available-for-sale Securities, Gross Unrealized Gain | 295,489 | 213,683 |
AvailableForSaleSecuritiesGrossUnrealizedLosses | (1,405,937) | (1,674,093) |
AvailableForSaleSecuritiesEstimatedFairValue | 8,941,232 | 8,431,090 |
Equity Securities | ||
Available-for-sale Securities, Amortized Cost Basis | 10,051,680 | 9,891,500 |
Available-for-sale Securities, Gross Unrealized Gain | 295,489 | 213,683 |
AvailableForSaleSecuritiesGrossUnrealizedLosses | (1,405,937) | (1,674,093) |
AvailableForSaleSecuritiesEstimatedFairValue | $ 8,941,232 | $ 8,431,090 |
3) Investments_ Schedule of U47
3) Investments: Schedule of Unrealized Loss on Investments (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Held-to-maturity Securities, Unrecognized Holding Loss | $ 5,171,683 | $ 5,583,106 |
Fair Value | 5,109,945 | 4,938,569 |
US States and Political Subdivisions Debt Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 455 | 1,040 |
Corporate Debt Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 4,997,905 | 5,501,743 |
Collateralized Mortgage Backed Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 173,323 | 75,580 |
Industrial, miscellaneous and all other equity securities | ||
AvailableForSaleSecuritiesGrossUnrealizedLosses | 1,405,937 | 1,674,093 |
Equity Securities | ||
AvailableForSaleSecuritiesGrossUnrealizedLosses | 1,405,937 | 1,674,093 |
Less than 12 months | ||
Held-to-maturity Securities, Unrecognized Holding Loss | $ 2,441,305 | $ 3,781,895 |
No. of Investment Positions | 76 | 104 |
Held-to-maturity Securities, Fair Value | $ 21,751,797 | $ 34,076,401 |
Fair Value | $ 3,955,133 | 4,177,709 |
Less than 12 months | U.S. Treasury Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | $ 4,743 | |
No. of Investment Positions | 0 | 2 |
Less than 12 months | US States and Political Subdivisions Debt Securities | ||
No. of Investment Positions | 0 | 0 |
Less than 12 months | Corporate Debt Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | $ 2,267,982 | $ 3,701,572 |
No. of Investment Positions | 70 | 98 |
Less than 12 months | Collateralized Mortgage Backed Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | $ 173,323 | $ 75,580 |
No. of Investment Positions | 6 | 4 |
Less than 12 months | Industrial, miscellaneous and all other equity securities | ||
No. of Investment Positions | 180 | 222 |
AvailableForSaleSecuritiesGrossUnrealizedLosses | $ 798,607 | $ 997,862 |
Less than 12 months | Equity Securities | ||
No. of Investment Positions | 180 | 222 |
AvailableForSaleSecuritiesGrossUnrealizedLosses | $ 798,607 | $ 997,862 |
More than 12 months | ||
Held-to-maturity Securities, Unrecognized Holding Loss | $ 2,730,378 | $ 1,801,211 |
No. of Investment Positions | 26 | 19 |
Held-to-maturity Securities, Fair Value | $ 6,404,000 | $ 3,809,957 |
Fair Value | $ 1,154,812 | $ 760,860 |
More than 12 months | U.S. Treasury Securities | ||
No. of Investment Positions | 0 | 0 |
More than 12 months | US States and Political Subdivisions Debt Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | $ 455 | $ 1,040 |
No. of Investment Positions | 1 | 1 |
More than 12 months | Corporate Debt Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | $ 2,729,923 | $ 1,800,171 |
No. of Investment Positions | 25 | 18 |
More than 12 months | Collateralized Mortgage Backed Securities | ||
No. of Investment Positions | 0 | 0 |
More than 12 months | Industrial, miscellaneous and all other equity securities | ||
No. of Investment Positions | 68 | 74 |
AvailableForSaleSecuritiesGrossUnrealizedLosses | $ 607,330 | $ 676,232 |
More than 12 months | Equity Securities | ||
No. of Investment Positions | 68 | 74 |
AvailableForSaleSecuritiesGrossUnrealizedLosses | $ 607,330 | $ 676,232 |
Total | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 5,171,683 | 5,583,106 |
Held-to-maturity Securities, Fair Value | 28,155,797 | 37,886,358 |
Total | U.S. Treasury Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 4,743 | |
Total | US States and Political Subdivisions Debt Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 455 | 1,040 |
Total | Corporate Debt Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 4,997,905 | 5,501,743 |
Total | Collateralized Mortgage Backed Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | $ 173,323 | $ 75,580 |
3) Investments (Details)
3) Investments (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Average market value over amortized cost | 84.50% | 87.20% | |
Other than Temporary Impairment, Credit Losses Recognized in Earnings, Period Increase (Decrease) | $ 30,000 | $ 30,000 | |
Real estate held for investment, net of accumulated depreciation of $12,940,497 and $12,210,346 for 2016 and 2015 | 116,700,727 | $ 114,852,432 | |
Commercial Real Estate 1 | |||
Real estate held for investment, net of accumulated depreciation of $12,940,497 and $12,210,346 for 2016 and 2015 | $ 36,392,697 | $ 33,180,397 | |
Square Footage | 520,384 | 515,663 | |
Commercial Real Estate 1 | ArizonaMember | |||
Real estate held for investment, net of accumulated depreciation of $12,940,497 and $12,210,346 for 2016 and 2015 | $ 460,465 | $ 463,774 | |
Square Footage | 16,270 | 16,270 | |
Commercial Real Estate 1 | ArkansasMember | |||
Real estate held for investment, net of accumulated depreciation of $12,940,497 and $12,210,346 for 2016 and 2015 | $ 103,527 | ||
Square Footage | 3,200 | ||
Commercial Real Estate 1 | KansasMember | |||
Real estate held for investment, net of accumulated depreciation of $12,940,497 and $12,210,346 for 2016 and 2015 | $ 11,720,154 | $ 11,537,335 | |
Square Footage | 222,679 | 222,679 | |
Commercial Real Estate 1 | MississippiMember | |||
Real estate held for investment, net of accumulated depreciation of $12,940,497 and $12,210,346 for 2016 and 2015 | $ 3,152,040 | ||
Square Footage | 21,521 | ||
Commercial Real Estate 1 | NewMexicoMember | |||
Real estate held for investment, net of accumulated depreciation of $12,940,497 and $12,210,346 for 2016 and 2015 | $ 7,000 | $ 7,000 | |
Commercial Real Estate 1 | TexasMember | |||
Real estate held for investment, net of accumulated depreciation of $12,940,497 and $12,210,346 for 2016 and 2015 | $ 3,755,070 | $ 3,768,542 | |
Square Footage | 23,470 | 23,470 | |
Commercial Real Estate 1 | UtahMember | |||
Real estate held for investment, net of accumulated depreciation of $12,940,497 and $12,210,346 for 2016 and 2015 | $ 17,194,441 | $ 17,403,746 | |
Square Footage | 233,244 | 253,244 |
3) Investments_ Equity Securiti
3) Investments: Equity Securities - Additional (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Average Market Value of Security over initial investment | 78.40% | 74.70% | |
Equity Securities | |||
Other than Temporary Impairment Losses, Investments, Portion Recognized in Earnings, Net, Available-for-sale Securities | $ 43,630 | $ 25,896 |
3) Investments_ Investments C50
3) Investments: Investments Classified by Contractual Maturity Date (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
AmortizedCost | $ 147,445,997 | $ 145,558,425 |
HeldToMaturitySecuritiesEstimatedFairValue | 154,781,094 | 150,507,158 |
Available-for-sale Securities, Amortized Cost Basis | 10,051,680 | |
AvailableForSaleSecuritiesEstimatedFairValue | 8,941,232 | |
Collateralized Mortgage Backed Securities | ||
AmortizedCost | 7,501,609 | 5,091,887 |
HeldToMaturitySecuritiesEstimatedFairValue | 7,631,983 | 5,207,174 |
Redeemable Preferred Stock | ||
AmortizedCost | 612,023 | 612,023 |
HeldToMaturitySecuritiesEstimatedFairValue | 659,834 | $ 641,698 |
Common Stock | ||
Available-for-sale Securities, Amortized Cost Basis | 10,051,680 | |
AvailableForSaleSecuritiesEstimatedFairValue | 8,941,232 | |
DueIn2016Member | ||
AmortizedCost | 4,298,647 | |
HeldToMaturitySecuritiesEstimatedFairValue | 4,345,102 | |
DueIn2017Through2020Member | ||
AmortizedCost | 33,393,520 | |
HeldToMaturitySecuritiesEstimatedFairValue | 35,451,062 | |
DueIn2021Through2025Member | ||
AmortizedCost | 35,564,893 | |
HeldToMaturitySecuritiesEstimatedFairValue | 37,200,353 | |
DueAfter2025Member | ||
AmortizedCost | 66,075,305 | |
HeldToMaturitySecuritiesEstimatedFairValue | $ 69,492,760 |
3) Investments_ Gain (Loss) o51
3) Investments: Gain (Loss) on Investments (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Fixed maturity securities held to maturity: | $ 24,292 | $ 364,168 |
Held-to-maturity Securities | ||
Gross Realized Gains | 85,997 | |
Gross Realized Losses | (24,795) | (9,776) |
Other than Temporary Impairments | (30,000) | (30,000) |
Available-for-sale Securities | ||
Gross Realized Gains | 63,495 | 87,720 |
Gross Realized Losses | (23,878) | (1,016) |
Other than Temporary Impairments | (43,630) | (25,896) |
Other Assets | ||
Gross Realized Gains | 84,768 | $ 257,139 |
Gross Realized Losses | $ (1,668) |
3) Investments_ Net carrying am
3) Investments: Net carrying amount of held to maturity securities (Details) - Held-to-maturity Securities | 3 Months Ended |
Mar. 31, 2015USD ($) | |
Net carrying amount for sales of securities | $ 257,962 |
Net realized gain related to sales of securities | $ 8,962 |
3) Investments_ Schedule of M53
3) Investments: Schedule of Major categories of net investment income (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Gross investment income | $ 12,136,747 | $ 10,523,569 |
Investment Income, Investment Expense | (3,144,556) | (2,700,725) |
Net Investment Income | 8,992,191 | 7,822,844 |
Fixed Maturities | ||
Gross investment income | 2,050,569 | 1,980,696 |
Equity Securities | ||
Gross investment income | 71,041 | 59,418 |
Mortgage loans on real estate | ||
Gross investment income | 2,026,515 | 1,874,158 |
Real Estate | ||
Gross investment income | 2,838,484 | 2,120,650 |
Policy, Student and other loans | ||
Gross investment income | 182,206 | 188,546 |
Short-term investments, principally gains on sale of mortgage loans | ||
Gross investment income | $ 1,863,144 | $ 1,511,095 |
3) Investments_ Net Investment
3) Investments: Net Investment Income - Additional (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Net Investment Income | $ 8,992,191 | $ 7,822,844 | |
Securities on deposit for regulatory authorities | 8,813,368 | $ 8,815,542 | |
Cemeteries and mortuaries | |||
Net Investment Income | $ 87,976 | $ 92,922 |
3) Investments_ Residential R55
3) Investments: Residential Real Estate Investment (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Real estate held for investment, net of accumulated depreciation of $12,940,497 and $12,210,346 for 2016 and 2015 | $ 116,700,727 | $ 114,852,432 |
Residential Real Estate 1 | ||
Real estate held for investment, net of accumulated depreciation of $12,940,497 and $12,210,346 for 2016 and 2015 | 80,308,030 | 81,672,035 |
Residential Real Estate 1 | ArizonaMember | ||
Real estate held for investment, net of accumulated depreciation of $12,940,497 and $12,210,346 for 2016 and 2015 | 940,537 | 944,614 |
Residential Real Estate 1 | CaliforniaMember | ||
Real estate held for investment, net of accumulated depreciation of $12,940,497 and $12,210,346 for 2016 and 2015 | 5,929,061 | 6,158,253 |
Residential Real Estate 1 | ColoradoMember | ||
Real estate held for investment, net of accumulated depreciation of $12,940,497 and $12,210,346 for 2016 and 2015 | 549,214 | 553,230 |
Residential Real Estate 1 | FloridaMember | ||
Real estate held for investment, net of accumulated depreciation of $12,940,497 and $12,210,346 for 2016 and 2015 | 9,082,242 | 9,203,624 |
Residential Real Estate 1 | IllinoisMember | ||
Real estate held for investment, net of accumulated depreciation of $12,940,497 and $12,210,346 for 2016 and 2015 | 165,800 | |
Residential Real Estate 1 | OklahomaMember | ||
Real estate held for investment, net of accumulated depreciation of $12,940,497 and $12,210,346 for 2016 and 2015 | 99,264 | 99,862 |
Residential Real Estate 1 | OregonMember | ||
Real estate held for investment, net of accumulated depreciation of $12,940,497 and $12,210,346 for 2016 and 2015 | 120,000 | 120,000 |
Residential Real Estate 1 | SouthCarolinaMember | ||
Real estate held for investment, net of accumulated depreciation of $12,940,497 and $12,210,346 for 2016 and 2015 | 676,200 | 823,872 |
Residential Real Estate 1 | TexasMember | ||
Real estate held for investment, net of accumulated depreciation of $12,940,497 and $12,210,346 for 2016 and 2015 | 1,279,327 | 1,198,860 |
Residential Real Estate 1 | UtahMember | ||
Real estate held for investment, net of accumulated depreciation of $12,940,497 and $12,210,346 for 2016 and 2015 | 61,346,004 | 62,117,738 |
Residential Real Estate 1 | WashingtonMember | ||
Real estate held for investment, net of accumulated depreciation of $12,940,497 and $12,210,346 for 2016 and 2015 | $ 286,181 | $ 286,182 |
3) Investments_ Mortgage Loans
3) Investments: Mortgage Loans - Additional (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Details | ||
Mortgage loans on real estate balances, net of allowance for losses | $ 2,078,948 | $ 1,848,120 |
3) Investments_ Schedule of A57
3) Investments: Schedule of Allowance for loan losses as a contra-asset account (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Financing Receivable, Allowance for Credit Losses, Beginning Balance | $ 1,848,120 | $ 2,003,055 |
Allowance for credit losses, Charge-offs | (18,374) | (123,942) |
Allowance for credit losses, Provision | 249,202 | (30,993) |
Financing Receivable, Allowance for Credit Losses, Ending Balance | 2,078,948 | 1,848,120 |
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment | 508,655 | 305,962 |
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment | 1,570,293 | 1,542,158 |
Mortgage loans | 135,472,816 | 114,395,025 |
Financing Receivable, Individually Evaluated for Impairment | 5,091,409 | 3,180,430 |
Financing Receivable, Collectively Evaluated for Impairment | 130,381,407 | 111,214,594 |
Commercial Loan | ||
Financing Receivable, Allowance for Credit Losses, Beginning Balance | 187,129 | 187,129 |
Financing Receivable, Allowance for Credit Losses, Ending Balance | 187,129 | 187,129 |
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment | 187,129 | 187,129 |
Mortgage loans | 39,057,779 | 33,522,978 |
Financing Receivable, Collectively Evaluated for Impairment | 39,057,779 | 33,522,978 |
Residential Mortgage | ||
Financing Receivable, Allowance for Credit Losses, Beginning Balance | 1,560,877 | 1,715,812 |
Allowance for credit losses, Charge-offs | (18,374) | (123,942) |
Allowance for credit losses, Provision | 249,202 | (30,993) |
Financing Receivable, Allowance for Credit Losses, Ending Balance | 1,791,705 | 1,560,877 |
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment | 508,655 | 305,962 |
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment | 1,283,050 | 1,254,915 |
Mortgage loans | 53,488,217 | 46,020,490 |
Financing Receivable, Individually Evaluated for Impairment | 5,091,409 | 3,087,161 |
Financing Receivable, Collectively Evaluated for Impairment | 48,396,808 | 42,933,329 |
Residential Construction | ||
Financing Receivable, Allowance for Credit Losses, Beginning Balance | 100,114 | 100,114 |
Financing Receivable, Allowance for Credit Losses, Ending Balance | 100,114 | 100,114 |
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment | 100,114 | 100,114 |
Mortgage loans | 42,926,820 | 34,851,557 |
Financing Receivable, Individually Evaluated for Impairment | 93,269 | |
Financing Receivable, Collectively Evaluated for Impairment | $ 42,926,820 | $ 34,758,287 |
3) Investments_ Schedule of a58
3) Investments: Schedule of aging of mortgage loans (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | ||
Mortgage Loans during period | $ (2,078,948) | $ (1,848,120) | |
Mortgage Loans, Allowance for Loan Losses | 133,393,868 | 112,546,905 | |
Commercial Loan | |||
Mortgage Loans during period | (187,129) | (187,129) | |
Mortgage Loans, Allowance for Loan Losses | 38,870,650 | 33,335,849 | |
Residential Mortgage | |||
Mortgage Loans during period | (1,791,705) | (1,560,877) | |
Mortgage Loans, Allowance for Loan Losses | 51,696,512 | 44,459,613 | |
Residential Construction | |||
Mortgage Loans during period | (100,114) | (100,114) | |
Mortgage Loans, Allowance for Loan Losses | 42,826,706 | 34,751,443 | |
Past due 30 to 59 days | |||
Mortgage Loans during period | 354,152 | 884,143 | |
Past due 30 to 59 days | Residential Mortgage | |||
Mortgage Loans during period | 354,152 | 884,143 | |
Past due 60 to 89 days | |||
Mortgage Loans during period | 791,054 | 2,277,888 | |
Past due 60 to 89 days | Residential Mortgage | |||
Mortgage Loans during period | 726,159 | 2,212,993 | |
Past due 60 to 89 days | Residential Construction | |||
Mortgage Loans during period | 64,895 | 64,895 | |
Past due 90 or more days | |||
Mortgage Loans during period | [1] | 5,091,409 | 3,180,430 |
Past due 90 or more days | Residential Mortgage | |||
Mortgage Loans during period | [1] | 5,091,409 | 3,087,161 |
Past due 90 or more days | Residential Construction | |||
Mortgage Loans during period | [1] | 93,269 | |
In Foreclosure | |||
Mortgage Loans during period | [1] | 6,388,394 | 7,504,563 |
In Foreclosure | Residential Mortgage | |||
Mortgage Loans during period | [1] | 6,323,499 | 7,346,399 |
In Foreclosure | Residential Construction | |||
Mortgage Loans during period | [1] | 64,895 | 158,164 |
Total Past Due | |||
Mortgage Loans during period | 129,084,422 | 106,890,462 | |
Total Past Due | Commercial Loan | |||
Mortgage Loans during period | 39,057,779 | 33,522,978 | |
Total Past Due | Residential Mortgage | |||
Mortgage Loans during period | 47,164,718 | 38,674,091 | |
Total Past Due | Residential Construction | |||
Mortgage Loans during period | 42,861,925 | 34,693,393 | |
Current | |||
Mortgage Loans during period | 135,472,816 | 114,395,025 | |
Current | Commercial Loan | |||
Mortgage Loans during period | 39,057,779 | 33,522,978 | |
Current | Residential Mortgage | |||
Mortgage Loans during period | 53,488,217 | 46,020,490 | |
Current | Residential Construction | |||
Mortgage Loans during period | $ 42,926,820 | $ 34,851,557 | |
[1] | There was not any interest income recognized on loans past due greater than 90 days or in foreclosure. |
3) Investments_ Schedule of I59
3) Investments: Schedule of Impaired Mortgage Loans (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Residential Mortgage | ||
Impaired Financing Receivable, with Related Allowance, Recorded Investment | $ 5,091,409 | $ 3,087,161 |
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance | 5,091,409 | 3,087,161 |
Impaired Financing Receivable, Related Allowance | 508,655 | 305,962 |
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment | 5,091,409 | 3,087,161 |
Total Residential Mortgage | ||
Impaired Financing Receivable, with Related Allowance, Recorded Investment | 5,091,409 | 3,087,161 |
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance | 5,091,409 | 3,087,161 |
Impaired Financing Receivable, Related Allowance | 508,655 | 305,962 |
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment | $ 5,091,409 | 3,087,161 |
Residential Construction | ||
Impaired Financing Receivable, with Related Allowance, Recorded Investment | 93,269 | |
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance | 93,269 | |
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment | 93,269 | |
Impaired Financing Receivable, with No Related Allowance, Recorded Investment | 93,269 | |
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment | $ 93,269 |
3) Investments_ Schedule Of C60
3) Investments: Schedule Of Credit Risk Of Mortgage Loans Based On Performance Status (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Mortgage loans | $ 135,472,816 | $ 114,395,025 |
Performing Financing Receivable | ||
Mortgage loans | 129,590,354 | 108,936,707 |
Nonperforming Financing Receivable | ||
Mortgage loans | 5,882,462 | 5,458,318 |
Commercial Loan | ||
Mortgage loans | 39,057,779 | 33,522,978 |
Commercial Loan | Performing Financing Receivable | ||
Mortgage loans | 39,057,779 | 33,522,978 |
Residential Mortgage | ||
Mortgage loans | 53,488,217 | 46,020,490 |
Residential Mortgage | Performing Financing Receivable | ||
Mortgage loans | 47,670,650 | 40,720,336 |
Residential Mortgage | Nonperforming Financing Receivable | ||
Mortgage loans | 5,817,567 | 5,300,154 |
Residential Construction | ||
Mortgage loans | 42,926,820 | 34,851,557 |
Residential Construction | Performing Financing Receivable | ||
Mortgage loans | 42,861,925 | 34,693,393 |
Residential Construction | Nonperforming Financing Receivable | ||
Mortgage loans | $ 64,895 | $ 158,164 |
3) Investments_ Summary of Inte
3) Investments: Summary of Interest not accrued on non-performing mortgage loans (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Details | ||
Interest not accrued on non-performing loans | $ 440,000 | $ 268,000 |
3) Investments_ Schedule of M62
3) Investments: Schedule of Mortgage loans on a nonaccrual status (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | $ 5,882,462 | $ 5,458,318 |
Residential Mortgage | ||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | 5,817,567 | 5,300,154 |
Residential Construction | ||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | $ 64,895 | $ 158,164 |
3) Investments_ Schedule of l63
3) Investments: Schedule of loan loss reserve which is included in other liabilities and accrued expenses (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Details | ||
Beginning, Loan Loss Reserve | $ 2,805,900 | $ 1,718,150 |
Loan loss reserve, Provisions for losses | 586,778 | 6,295,043 |
Loan loss reserve, Charge-offs | (40,041) | (5,207,293) |
Ending, Loan Loss Reserve | $ 3,352,637 | $ 2,805,900 |
4) Stock-based Compensation (De
4) Stock-based Compensation (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Details | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs, Capitalized Amount | $ 84,452 | $ 85,545 |
Unrecognized compensation expense related to the options issued in December 2014 | 228,136 | |
Total intrinsic value | $ 91,989 | $ 438,989 |
4) Stock-based Compensation_ 65
4) Stock-based Compensation: Schedule of stock inventive plan changes (Details) - USD ($) | 3 Months Ended | ||||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | Sep. 30, 2014 | Dec. 31, 2013 | |
Class A Common Stock | |||||
Shares, Outstanding | 589,801 | 618,261 | 503,949 | 512,795 | |
Shares outstanding | $ 3.97 | $ 3.89 | $ 3.21 | $ 3.20 | |
Shares Exercised | (28,460) | ||||
Per Share Shares Exercised | $ 2.15 | ||||
Shares Cancelled | (8,846) | ||||
Per Share Shares cancelled | $ 2.31 | ||||
Options Exercisable | 484,659 | 379,946 | |||
Options exercisable | $ 3.45 | $ 2.75 | |||
Available options for future grant | $ 454,842 | $ 266,649 | |||
Weighted average contractual term of options outstanding | 7.50 years | 7.57 years | |||
Weighted average contractual term of options exercisable | 7.03 years | 6.91 years | |||
Aggregated intrinsic value of options outstanding | $ 844,342 | $ 1,076,880 | |||
Aggregated intrinsic value of options exercisable | $ 844,342 | $ 988,022 | |||
Class C Common Stock | |||||
Shares, Outstanding | 577,436 | 577,436 | 577,568 | 691,591 | |
Shares outstanding | $ 3.54 | $ 3.54 | $ 2.62 | $ 2 | |
Options Exercisable | 498,686 | 471,943 | |||
Options exercisable | $ 2.99 | $ 2.15 | |||
Available options for future grant | $ 57,750 | ||||
Weighted average contractual term of options outstanding | 2.50 years | 2.93 years | |||
Weighted average contractual term of options exercisable | 2.16 years | 2.30 years | |||
Aggregated intrinsic value of options outstanding | $ 1,096,391 | $ 1,572,653 | |||
Aggregated intrinsic value of options exercisable | $ 1,096,391 | $ 1,506,415 |
5) Earnings Per Share_ Schedu66
5) Earnings Per Share: Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Details | ||
Net earnings | $ 1,793,532 | $ 1,863,703 |
Weighted-average Class A equivalent common share outstanding (1) | 13,939,377 | 13,592,260 |
GrantOfEmployeeStockOptions | $ 434,122 | $ 561,838 |
Diluted weighted-average shares outstanding | 14,373,499 | 14,154,098 |
Net earnings per Class A Equivalent common share (1) | $ 0.13 | $ 0.14 |
Net earnings per Class A Equivalent common share-assuming dilution (1) | $ 0.12 | $ 0.13 |
5) Earnings Per Share (Details)
5) Earnings Per Share (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Details | ||
Antidilutive Securities Excluded from Computation of Net Income, Per Outstanding Unit, Amount | $ 250,039 | $ 4,632 |
6) Business Segments_ Schedul68
6) Business Segments: Schedule of Revenues and Expenses by Reportable Segment (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Revenue from customers | $ 66,014,315 | $ 64,049,632 | |
SegmentReportingInformationIncomeLossBeforeIncomeTaxes | 2,850,765 | 2,998,384 | |
Identifiable Assets | 757,349,481 | 701,778,191 | |
Goodwill | 2,765,570 | 2,765,570 | $ 2,765,570 |
Life Insurance Segment | |||
Revenue from customers | 22,075,134 | 20,985,500 | |
SegmentReportingInformationIntersegmentRevenue | 3,103,446 | 2,818,867 | |
SegmentReportingInformationIncomeLossBeforeIncomeTaxes | 1,065,168 | 1,403,851 | |
Identifiable Assets | 724,858,698 | 677,059,957 | |
Goodwill | 2,765,570 | 2,765,570 | |
Cemetery and Mortuary | |||
Revenue from customers | 3,330,766 | 3,098,238 | |
SegmentReportingInformationIntersegmentRevenue | 286,925 | 311,998 | |
SegmentReportingInformationIncomeLossBeforeIncomeTaxes | 469,055 | 409,175 | |
Identifiable Assets | 96,827,903 | 104,778,721 | |
Mortgage | |||
Revenue from customers | 40,608,415 | 39,965,894 | |
SegmentReportingInformationIntersegmentRevenue | 79,479 | 88,487 | |
SegmentReportingInformationIncomeLossBeforeIncomeTaxes | 1,316,542 | 1,185,358 | |
Identifiable Assets | 69,077,738 | 62,765,551 | |
Significant Reconciling Items | |||
SegmentReportingInformationIntersegmentRevenue | (3,469,850) | (3,219,352) | |
Identifiable Assets | $ (133,414,858) | $ (142,826,038) |
7)_ Fair Value of Financial I69
7): Fair Value of Financial Instruments: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Assets accounted for at fair value on a recurring basis | ||
Available-for-sale Securities | $ 8,941,232 | |
Restricted assets of cemeteries and mortuaries | 687,214 | $ 686,444 |
Cemetery perpetual care trust investments | 669,366 | 630,854 |
Derivatives - interest rate lock commitments | 5,096,573 | 3,440,758 |
Assets, Fair Value Disclosure | 16,616,573 | 14,363,915 |
Liabilities accounted for at fair value on a recurring basis | ||
Policyholder account balances | (50,451,491) | (50,694,953) |
Future policy benefits - annuities | (69,287,925) | (69,398,617) |
Derivatives - bank loan interest rate swaps | (11,210) | (13,947) |
Derivatives - Call Options | (63,686) | (16,342) |
Derivatives - Put Options | (12,102) | (28,829) |
Derivatives - Interest rate lock commitments | (422,490) | (107,667) |
Liabilities accounted for at fair value | (120,248,904) | (120,260,355) |
Non-redeemable preferred stock | 8,431,090 | |
Trading Securities, Equity | 8,431,090 | |
Fair Value, Inputs, Level 1 | ||
Assets accounted for at fair value on a recurring basis | ||
Available-for-sale Securities | 8,941,232 | |
Restricted assets of cemeteries and mortuaries | 687,214 | 686,444 |
Cemetery perpetual care trust investments | 669,366 | 630,854 |
Assets, Fair Value Disclosure | 10,297,812 | 9,748,388 |
Liabilities accounted for at fair value on a recurring basis | ||
Derivatives - Call Options | (63,686) | (16,342) |
Derivatives - Put Options | (12,102) | (28,829) |
Liabilities accounted for at fair value | (75,788) | (45,171) |
Non-redeemable preferred stock | 8,431,090 | |
Trading Securities, Equity | 8,431,090 | |
Fair Value, Inputs, Level 3 | ||
Assets accounted for at fair value on a recurring basis | ||
Derivatives - interest rate lock commitments | 5,096,573 | 3,440,758 |
Assets, Fair Value Disclosure | 6,318,761 | 4,615,527 |
Liabilities accounted for at fair value on a recurring basis | ||
Policyholder account balances | (50,451,491) | (50,694,953) |
Future policy benefits - annuities | (69,287,925) | (69,398,617) |
Derivatives - bank loan interest rate swaps | (11,210) | (13,947) |
Derivatives - Interest rate lock commitments | (422,490) | (107,667) |
Liabilities accounted for at fair value | $ (120,173,116) | $ (120,215,184) |
7)_ Fair Value of Financial I70
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, 2016 | Dec. 31, 2015 | |
Fair Value Balance | $ 1,174,769 | |
Fair Value, Losses (Gains) included in other comprehensive income | 47,419 | $ (25,231) |
Fair Value Balance | 1,222,188 | 1,174,769 |
Policyholder Account Balances | ||
Fair Value Balance | (50,694,953) | (45,310,699) |
Fair Value, Losses (Gains) included in earnings | 243,462 | (5,384,254) |
Fair Value Balance | (50,451,491) | (50,694,953) |
Future Policy Benefits - Annuities | ||
Fair Value Balance | (69,398,617) | (65,540,985) |
Fair Value, Losses (Gains) included in earnings | 110,692 | (3,857,632) |
Fair Value Balance | (69,287,925) | (69,398,617) |
Interest Rate Lock Commitments | ||
Fair Value Balance | 3,333,091 | 1,929,851 |
Fair Value, Losses (Gains) included in other comprehensive income | 1,340,992 | 1,403,240 |
Fair Value Balance | 4,674,083 | 3,333,091 |
Bank Loan Interest Rate Swaps | ||
Fair Value Balance | (13,947) | (31,370) |
Fair Value, Losses (Gains) included in other comprehensive income | 2,737 | 17,423 |
Fair Value Balance | $ (11,210) | $ (13,947) |
7)_ Fair Value of Financial I71
7): Fair Value of Financial Instruments: Schedule of Fair Value Measurements, Nonrecurring (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Assets accounted for at fair value on a nonrecurring basis - Mortgage servicing rights | $ 1,499,786 | |
Real estate held for investment | 1,242,000 | $ 95,000 |
Assets accounted for at fair value on a nonrecurring basis | 2,741,786 | |
Assets accounted for at fair value on non-recurring basis | ||
Mortgage servicing rights | 6,217,551 | |
Assets, Fair Value Disclosure, Nonrecurring | 6,312,551 | |
Fair Value, Inputs, Level 3 | ||
Assets accounted for at fair value on a nonrecurring basis - Mortgage servicing rights | 1,499,786 | |
Real estate held for investment | 1,242,000 | 95,000 |
Assets accounted for at fair value on a nonrecurring basis | $ 2,741,786 | |
Assets accounted for at fair value on non-recurring basis | ||
Mortgage servicing rights | 6,217,551 | |
Assets, Fair Value Disclosure, Nonrecurring | $ 6,312,551 |
7)_ Fair Value of Financial I72
7): Fair Value of Financial Instruments: Schedule of Financial Instruments Carried at Other Than Fair Value (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Carrying Value | $ (41,242,032) | $ (40,894,968) |
Estimated Fair Value | (41,242,032) | (40,894,968) |
Residential Mortgage | ||
Carrying Value | 51,696,512 | 44,459,613 |
Estimated Fair Value | 55,117,152 | 47,193,950 |
Residential Construction | ||
Carrying Value | 42,826,706 | 34,751,443 |
Estimated Fair Value | 42,826,706 | 34,751,443 |
Commercial Loan | ||
Carrying Value | 38,870,650 | 33,335,849 |
Estimated Fair Value | 40,272,245 | 34,778,136 |
MortgageLoansNet1Member | ||
Carrying Value | 133,393,868 | 112,546,905 |
Estimated Fair Value | 138,216,103 | 116,723,529 |
PolicyLoanMember | ||
Carrying Value | 6,892,022 | 6,896,457 |
Estimated Fair Value | 6,892,022 | 6,896,457 |
Insurance assignments | ||
Carrying Value | 31,165,274 | 31,511,195 |
Estimated Fair Value | 31,165,274 | 31,511,195 |
ShortTermInvestments1Member | ||
Carrying Value | 17,809,307 | 16,915,808 |
Estimated Fair Value | 17,809,307 | 16,915,808 |
Fair Value, Inputs, Level 3 | ||
Estimated Fair Value | (41,242,032) | (40,894,968) |
Fair Value, Inputs, Level 3 | Residential Mortgage | ||
Estimated Fair Value | 55,117,152 | 47,193,950 |
Fair Value, Inputs, Level 3 | Residential Construction | ||
Estimated Fair Value | 42,826,706 | 34,751,443 |
Fair Value, Inputs, Level 3 | Commercial Loan | ||
Estimated Fair Value | 40,272,245 | 34,778,136 |
Fair Value, Inputs, Level 3 | MortgageLoansNet1Member | ||
Estimated Fair Value | 138,216,103 | 116,723,529 |
Fair Value, Inputs, Level 3 | PolicyLoanMember | ||
Estimated Fair Value | 6,892,022 | 6,896,457 |
Fair Value, Inputs, Level 3 | Insurance assignments | ||
Estimated Fair Value | 31,165,274 | 31,511,195 |
Fair Value, Inputs, Level 3 | ShortTermInvestments1Member | ||
Estimated Fair Value | $ 17,809,307 | $ 16,915,808 |
9) Derivative Commitments_ Sc73
9) Derivative Commitments: Schedule of Derivative Assets at Fair Value (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Details | ||
Fair Value of Asset Derivatives, Interest rate lock and forward sales commitments | $ 5,096,573 | $ 3,440,758 |
Fair Value of Liability Derivatives, Interest rate lock and forward sales commitments | 422,490 | 107,667 |
Fair Value of Liability Derivatives, Call Options | 63,686 | 16,342 |
Fair Value of Liability Derivatives, Put Options | 12,102 | 28,829 |
Fair Value of Liability Derivatives, Interest Rate Swaps | 11,210 | 13,947 |
Fair Value of Asset Derivatives, Total | 5,096,573 | 3,440,758 |
Fair Value of Liability Derivatives, Total | $ 509,488 | $ 166,785 |
9) Derivative Commitments_ Sc74
9) Derivative Commitments: Schedule of Gains and Losses on Derivatives (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Details | ||
Gain (Loss) on Derivatives, Interest Rate Lock Commitments | $ 1,340,992 | $ 2,487,891 |
Gain (Loss) on Derivatives, Interest Rate Swaps | 2,737 | 3,951 |
GainLossOnDerivativesSubTotal | 1,343,729 | 2,491,842 |
TaxEffect-GainLossOnDerivatives | 524,055 | 971,819 |
Gain (Loss) on Derivatives, Total | $ 819,674 | $ 1,520,023 |
10) Reinsurance, Commitments 75
10) Reinsurance, Commitments and Contingencies: Mortgage Loan Loss Settlements (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Details | |||
Amounts accrued for loan losses | $ 587,000 | $ 667,000 | |
Funds reserved and accrued to settle investor related claims | $ 3,353,000 | $ 2,806,000 |
10) Reinsurance, Commitments 76
10) Reinsurance, Commitments and Contingencies: Other Contingencies and Commitments (Details) | Mar. 31, 2016USD ($) |
Details | |
Commitments to fund new residential construction loans | $ 66,443,000 |
Commitments to fund new residential construction loans funded | $ 42,927,000 |
11) Mortgage Servicing Rights77
11) Mortgage Servicing Rights: Schedule of Mortgage Servicing Rights (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Details | ||
Balance before valuation allowance at beginning of year | $ 12,679,755 | $ 7,834,747 |
MSRs proceeds from loan sales | 1,499,786 | 6,217,551 |
Amortization | (491,179) | (1,372,543) |
Balance before valuation allowance at year end | 13,688,362 | 12,679,755 |
Mortgage servicing rights, net | 13,688,362 | 12,679,755 |
Estimated fair value of MSRs at end of period | $ 14,354,525 | $ 13,897,160 |