Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 14, 2017 | |
Entity Registrant Name | SECURITY NATIONAL FINANCIAL CORP | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
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 | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Class A Common Stock | ||
Entity Common Stock, Shares Outstanding | 13,820,079 | |
Class C Common Stock | ||
Entity Common Stock, Shares Outstanding | 2,005,026 |
Balance Sheet
Balance Sheet - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Investments: | ||
Fixed maturity securities, held to maturity, at amortized cost | $ 230,811,272 | $ 184,979,644 |
Equity securities, available for sale, at estimated fair value | 5,957,488 | 9,911,256 |
Mortgage loans held for investment (net of allowances for loan losses of $2,051,818 and $1,748,783 for 2017 and 2016) | 147,300,691 | 148,990,732 |
Real estate held for investment (net of accumulated depreciation of $17,919,427 and $16,138,439 for 2017 and 2016) | 150,568,998 | 145,165,921 |
Policy loans and other investments (net of allowances for doubtful accounts of $1,142,257 and $1,119,630 for 2017 and 2016) | 42,489,149 | 41,599,246 |
Short-term investments | 17,830,990 | 27,560,040 |
Accrued investment income | 3,391,688 | 2,972,596 |
Total investments | 598,350,276 | 561,179,435 |
Cash and cash equivalents | 38,593,462 | 38,987,430 |
Loans held for sale (including $166,990,187 for 2017 and $-0- for 2016 at estimated fair value) | 201,895,906 | 189,139,832 |
Receivables (net of allowances for doubtful accounts of $2,758,394and $2,355,482 for 2017 and 2016) | 8,613,364 | 8,410,546 |
Restricted assets | 10,815,726 | 10,391,394 |
Cemetery perpetual care trust investments | 4,438,788 | 4,131,885 |
Receivable from reinsurers | 13,394,586 | 13,079,668 |
Cemetery land and improvements | 10,581,368 | 10,672,836 |
Deferred policy and pre-need contract acquisition costs | 78,049,594 | 69,118,745 |
Mortgage servicing rights, net | 20,396,568 | 18,872,362 |
Property and equipment, net | 7,560,662 | 8,791,522 |
Value of business acquired | 6,831,777 | 7,570,300 |
Goodwill | 2,765,570 | 2,765,570 |
Other assets | 5,616,664 | 9,310,040 |
Total Assets | 1,007,904,311 | 952,421,565 |
Liabilities | ||
Future policy benefits and unpaid claims | 600,643,308 | 584,067,692 |
Unearned premium reserve | 4,290,164 | 4,469,771 |
Bank and other loans payable | 182,769,669 | 152,140,679 |
Deferred pre-need cemetery and mortuary contract revenues | 12,716,761 | 12,360,249 |
Cemetery perpetual care obligation | 3,679,925 | 3,598,580 |
Accounts payable | 3,279,790 | 4,213,109 |
Other liabilities and accrued expenses | 33,448,055 | 34,693,485 |
Income taxes | 27,732,758 | 24,318,869 |
Total liabilities | 868,560,430 | 819,862,434 |
Common Stock: | ||
Additional paid-in capital | 35,490,027 | 34,813,246 |
Accumulated other comprehensive income, net of taxes | 336,631 | 264,822 |
Retained earnings | 72,848,622 | 67,409,204 |
Treasury stock at cost - 559,605 Class A shares in 2017 and 704,122 Class A shares in 2016 | (981,609) | (1,370,611) |
Total stockholders' equity | 139,343,881 | 132,559,131 |
Total Liabilities and Stockholders' Equity | 139,343,881 | 132,559,131 |
Class A Common Stock | ||
Common Stock: | ||
Common stock | 27,640,158 | 27,638,012 |
Class B Common Stock | ||
Common Stock: | ||
Common stock | ||
Class C Common Stock | ||
Common Stock: | ||
Common stock | 4,010,052 | 3,804,458 |
Preferred Stock | ||
Preferred Stock: | ||
Preferred stock |
Balance Sheet Parenthetical
Balance Sheet Parenthetical - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Allowance for losses on mortgage loans on real estate and construction loans, held for investment | $ 2,051,818 | $ 1,748,783 |
Accumulated depreciation on real estate held for investment | 17,919,427 | 16,138,439 |
Allowance for doubtful accounts on policy and other loans | 1,142,257 | 1,119,630 |
Fair Value of Loans Held for Sale | 166,990,187 | |
Allowance for doubtful accounts on receivables | $ 2,758,394 | $ 2,355,482 |
Preferred Stock Par Value | $ 1 | $ 1 |
Preferred Stock Authorized | 5,000,000 | 5,000,000 |
Class A Common Stock | ||
Common Stock Par Value | $ 2 | $ 2 |
Common Stock Authorized | 20,000,000 | 20,000,000 |
Common Stock Issued | 13,820,079 | 13,819,006 |
Treasury Stock | 559,605 | 704,122 |
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 | 3,000,000 | 3,000,000 |
Common Stock Issued | 2,005,026 | 1,902,229 |
Income Statement
Income Statement - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues: | ||||
Insurance premiums and other considerations | $ 17,489,560 | $ 17,157,319 | $ 52,345,184 | $ 47,508,420 |
Net investment income | 8,361,466 | 8,089,857 | 25,559,113 | 23,484,280 |
Net mortuary and cemetery sales | 2,717,311 | 2,776,023 | 9,356,659 | 9,541,950 |
Realized gains (losses) on investments and other assets | (319,666) | (39,169) | 713,066 | 179,296 |
Other than temporary impairments on investments | (163,375) | (30,000) | (481,741) | (133,630) |
Mortgage fee income | 41,597,573 | 53,195,763 | 122,086,734 | 146,967,246 |
Other income | 2,288,982 | 1,798,864 | 6,393,691 | 4,944,670 |
Total revenues | 71,971,851 | 82,948,657 | 215,972,706 | 232,492,232 |
Benefits and expenses: | ||||
Death benefits | 8,772,153 | 7,250,100 | 26,113,770 | 22,410,230 |
Surrenders and other policy benefits | 547,648 | 630,735 | 2,085,296 | 1,709,915 |
Increase in future policy benefits | 6,735,141 | 6,382,949 | 17,669,279 | 15,777,008 |
Amortization of deferred policy and pre-need acquisition costs and value of business acquired | 2,238,955 | 2,301,107 | 6,271,763 | 6,221,495 |
Selling, general and administrative expenses: | ||||
Commissions | 18,999,583 | 24,395,173 | 53,877,389 | 68,214,894 |
Personnel | 17,200,315 | 17,755,070 | 53,754,920 | 52,535,277 |
Advertising | 1,611,599 | 2,006,013 | 4,407,877 | 5,053,968 |
Rent and rent related | 2,257,259 | 2,122,708 | 6,693,292 | 6,235,430 |
Depreciation on property and equipment | 517,041 | 528,051 | 1,723,879 | 1,585,995 |
Provision for loan loss reserve | 600,000 | 600,000 | ||
Costs related to funding mortgage loans | 2,809,471 | 2,365,395 | 7,315,227 | 6,956,774 |
Other expenses | 7,035,570 | 8,075,906 | 22,227,370 | 21,388,693 |
Interest expense | 1,655,870 | 1,476,137 | 4,295,263 | 3,775,483 |
Cost of goods and services sold-mortuaries and cemeteries | 453,229 | 485,783 | 1,507,295 | 1,396,574 |
Total benefits and expenses | 70,833,834 | 76,375,127 | 207,942,620 | 213,861,736 |
Earnings before income taxes | 1,138,017 | 6,573,530 | 8,030,086 | 18,630,496 |
Income tax expense | (41,179) | (2,390,525) | (2,587,384) | (6,892,544) |
Net earnings | $ 1,096,838 | $ 4,183,005 | $ 5,442,702 | $ 11,737,952 |
Net earnings per Class A Equivalent common share (1) | $ 0.07 | $ 0.28 | $ 0.36 | $ 0.80 |
Net earnings per Class A Equivalent common share-assuming dilution (1) | $ 0.07 | $ 0.27 | $ 0.35 | $ 0.77 |
Weighted-average Class A equivalent common share outstanding (1) | 15,256,857 | 14,830,078 | 15,159,569 | 14,744,779 |
Weighted-average Class A equivalent common shares outstanding-assuming dilution (1) | 15,542,660 | 15,269,613 | 15,474,826 | 15,166,045 |
Comprehensive Income Statement
Comprehensive Income Statement - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Comprehensive Income Statement | ||||
Net earnings | $ 1,096,838 | $ 4,183,005 | $ 5,442,702 | $ 11,737,952 |
Other comprehensive income: | ||||
Unrealized gains on available for sale securities | 144,381 | 212,413 | 106,543 | 684,002 |
Unrealized gains on derivative instruments | 554 | 3,170 | 5,541 | |
Other comprehensive income, before income tax | 144,935 | 212,413 | 109,713 | 689,543 |
Income tax expense | (50,517) | (74,383) | (37,904) | (239,339) |
Other comprehensive income, net of income tax | 94,418 | 138,030 | 71,809 | 450,204 |
Comprehensive income | $ 1,191,256 | $ 4,321,035 | $ 5,514,511 | $ 12,188,156 |
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, 2015 | $ 26,218,200 | $ 3,419,280 | $ 30,232,582 | $ (499,358) | $ 60,525,404 | $ (2,179,429) | $ 117,716,679 |
Net earnings | 11,737,952 | 11,737,952 | |||||
Other comprehensive income (loss) | 450,204 | 450,204 | |||||
Grant of stock options | 253,427 | 253,427 | |||||
Exercise of stock options | 64,834 | 12,374 | 77,208 | ||||
Sale of treasury stock | 440,420 | 634,268 | 1,074,688 | ||||
Stock Dividends | 274 | 12,768 | 30,779 | (43,821) | |||
Conversion Class C to Class A | 17,016 | (17,016) | |||||
Balance at Sep. 30, 2016 | 26,300,324 | 3,415,032 | 30,969,582 | (49,154) | 72,219,535 | (1,545,161) | 131,310,158 |
Balance at Dec. 31, 2016 | 27,638,012 | 3,804,458 | 34,813,246 | 264,822 | 67,409,204 | (1,370,611) | 132,559,131 |
Net earnings | 5,442,702 | 5,442,702 | |||||
Other comprehensive income (loss) | 71,809 | 71,809 | |||||
Grant of stock options | 305,741 | 305,741 | |||||
Exercise of stock options | 2 | 206,804 | (206,806) | ||||
Sale of treasury stock | 575,496 | 574,472 | 1,149,968 | ||||
Purchase of treasury stock | (185,470) | (185,470) | |||||
Stock Dividends | 930 | 4 | 2,350 | (3,284) | |||
Conversion Class C to Class A | 1,214 | (1,214) | |||||
Balance at Sep. 30, 2017 | $ 27,640,158 | $ 4,010,052 | $ 35,490,027 | $ 336,631 | $ 72,848,622 | $ (981,609) | $ 139,343,881 |
Statement of Cash Flows
Statement of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net cash provided by operating activities | $ 6,030,453 | $ 17,639,672 |
Securities held to maturity: | ||
Purchase-fixed maturity securities | (59,325,291) | (6,519,416) |
Calls and maturities - fixed maturity securities | 11,933,573 | 10,032,336 |
Securities available for sale: | ||
Purchase - equity securities | (5,126,062) | (3,726,194) |
Sales - equity securities | 9,153,786 | 3,349,728 |
Purchases of short-term investments | (27,483,124) | (13,379,112) |
Sales of short-term investments | 37,212,174 | 7,185,582 |
Net changes in restricted assets | (409,625) | (438,204) |
Net changes in perpetual care trusts | (231,415) | (966,367) |
Mortgage loans, policy loans, and other investments made | (340,424,956) | (338,457,602) |
Payments received for mortgage loans, policy loans and other investments | 344,278,996 | 330,303,396 |
Purchase of property and equipment | (508,846) | (1,303,979) |
Sale of property and equipment | 9,977 | 34,000 |
Purchase of real estate | (12,474,490) | (19,448,152) |
Sale of real estate | 8,612,307 | 5,672,484 |
Cash paid for purchase of subsidiaries, net of cash acquired | (4,328,520) | |
Net cash used in investing activities | (34,782,996) | (31,990,020) |
Cash flows from financing activities: | ||
Investment contract receipts | 9,457,285 | 8,401,542 |
Investment contract withdrawals | $ (11,522,652) | (9,957,964) |
Proceeds from stock options exercised | 77,208 | |
Purchase of treasury stock | (185,470) | |
Repayment of bank loans | $ (2,142,382) | (1,169,233) |
Proceeds from borrowing on bank loans | 16,729,056 | 2,523,670 |
Net change in warehouse line borrowings | 16,022,738 | 23,893,122 |
Net change in line of credit borrowings | 1,439,650 | |
Net cash provided by financing activities | 28,358,575 | 25,207,995 |
Net change in cash and cash equivalents | (393,968) | 10,857,647 |
Cash and cash equivalents at beginning of period | 38,987,430 | 40,053,242 |
Cash and cash equivalents at end of period | 38,593,462 | 50,910,889 |
Cash paid (received) during the year for: | ||
Interest (net of amount capitalized) | 4,188,579 | 3,781,423 |
Income taxes (net of refunds) | (788,601) | 2,538,097 |
Non Cash Operating, Investing and Financing Activities: | ||
Transfer of loans held for sale to mortgage loans held for investment | 5,032,147 | 7,386,432 |
Accrued real estate construction costs and retainage | 1,932,790 | |
Mortgage loans foreclosed into real estate | 1,576,196 | 1,703,476 |
Benefit plans funded with treasury stock | $ 1,149,968 | $ 1,074,688 |
1) Basis of Presentation
1) Basis of Presentation | 9 Months Ended |
Sep. 30, 2017 | |
Notes | |
1) Basis of Presentation | 1) Basis of Presentation The accompanying unaudited condensed 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, 2016, included in the CompanyÂ’s Annual Report on Form 10-K/A (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 nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. The presentation of certain amounts in the prior year have been reclassified to conform to the 2017 presentation. The Company reclassified certain amounts from other assets to receivables, from receivables to other liabilities, from other assets to other liabilities, from equity securities to other investments, from other liabilities to mortgage loans held for investment, from net investment income to mortgage fee income, and from mortgage fee income to net investment income. These reclassifications had no impact on net earnings or stockholdersÂ’ equity. Additionally, see the discussion regarding correction of errors in Notes 21 and 22 included in the Company's Form 10-K/A for the year ended 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. Material estimates that are particularly susceptible to significant changes in the near term are those used in determining the value of derivative assets and liabilities; those used in determining deferred acquisition costs and the value of business acquired; those used in determining the value of mortgage loans foreclosed to real estate held for investment; 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 allowances for loan losses for mortgage loans held for investment; 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 | 9 Months Ended |
Sep. 30, 2017 | |
Notes | |
2) Recent Accounting Pronouncements | 2) Recent Accounting Pronouncements ASU No. 2017-01: “Business Combinations (Topic 805): Clarifying the Definition of a Business” – Issued in January 2017, ASU 2017-01 intends to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Under the current implementation guidance in Topic 805, there are three elements of a business: inputs, processes, and outputs. While an integrated set of assets and activities, collectively referred to as a “set,” that is a business usually has outputs, outputs are not required to be present. ASU 2017-01 provides a screen to determine when a set is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. ASU 2017-01 will be effective for the Company on January 1, 2018. While the Company’s acquisitions have historically been classified as either business combinations or asset acquisitions, certain acquisitions that were classified as business combinations by the Company likely would have been considered asset acquisitions under the new standard. As a result, transaction costs are more likely to be capitalized since the Company expects some of its future acquisitions to be classified as asset acquisitions under this new standard. In addition, goodwill that was previously allocated to businesses that were sold or held for sale will no longer be allocated and written off upon sale if future sales were deemed to be sales of assets and not businesses. ASU No. 2016-13: “Financial Instruments – Credit Losses (Topic 326)” – Issued in June 2016, ASU 2016-13 amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in current generally accepted accounting principles (“GAAP”) and, instead, requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available for sale debt securities, credit losses should be measured in a manner similar to current GAAP, however Topic 326 will require that credit losses be presented as an allowance rather than as a write-down. The new authoritative guidance is effective for interim and annual periods beginning after December 15, 2019. 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 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, which is not expected to be material to the Company’s results of operations but will have an effect on the balance sheet presentation for leased assets and obligations. 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 Company holds equity securities classified as available for sale securities that are currently measured at fair value with changes in fair value recognized through other comprehensive income. Upon adoption of ASU 2016-01 the Company will be required to recognize changes in the fair value of these equity securities through earnings, thus increasing the volatility of the Company’s earnings. However, adoption of this standard will not significantly affect the Company’s comprehensive income or stockholders’ equity. This new authoritative guidance is effective for interim and annual periods beginning after December 15, 2017, with the cumulative effect of the adoption made to the balance sheet as of the date of adoption. Thus, the adoption will result in a reclassification of the related accumulated net unrealized gains (losses) currently included in accumulated other comprehensive income to retained earnings. See Note 3 for details regarding the Company’s equity securities currently classified as available for sale. The Company will adopt this standard beginning January 1, 2018. 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”. ASU 2014-09 clarifies the principles for recognizing revenue in order to improve comparability of revenue recognition practices across entities and industries. ASU 2014-09 provides guidance intended to assist in the identification of contracts with customers and separate performance obligations within those contracts, the determination and allocation of the transaction price to those identified performance obligations and the recognition of revenue when a performance obligation has been satisfied. ASU 2014-09 also requires disclosures regarding the nature, amount, timing, and uncertainty of revenues and cash flows from contracts with customers. Insurance contracts are excluded from the scope of this new guidance. Upon adoption, ASU 2014-09 provides for transition through either a full retrospective approach requiring the restatement of all presented prior periods or a modified retrospective approach, which allows the new recognition standard to be applied to only those contracts that are not completed at the date of transition. If the modified retrospective approach is adopted, a cumulative effect adjustment to retained earnings is performed with additional disclosures required including the amount by which each line item is affected by the transition as compared to the guidance in effect before adoption and an explanation of the reasons for significant changes in these amounts. The Company intends to adopt ASU 2014-09 using the modified retrospective method. The Company does not expect to record a cumulative effect adjustment to its beginning retained earnings as a result of adoption of ASU 2014-09. The Company’s revenues from contracts with customers that are subject to ASU 2014-09 include revenues on mortuary and cemetery contracts. The recognition and measurement of these items is not expected to change as a result of the Company’s adoption of ASU 2014-09 and thus the Company does not expect that the adoption of ASU 2014-09 will significantly impact the Company’s results of operations or financial position but is still in the process of evaluating the final impact, including the potential impact on disclosures of contracts with customers. The new authoritative guidance is effective for interim and annual periods beginning after December 15, 2017. The Company will adopt this standard beginning January 1, 2018. 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 | 9 Months Ended |
Sep. 30, 2017 | |
Notes | |
3) Investments | 3) Investments The Company’s investments as of September 30, 2017 are summarized as follows: Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value September 30, 2017 Fixed maturity securities held to maturity carried at amortized cost: Bonds: U.S. Treasury securities and obligations of U.S. Government agencies $ 54,279,156 $ 237,071 $ (226,543) $ 54,289,684 Obligations of states and political subdivisions 5,865,790 124,685 (77,272) 5,913,203 Corporate securities including public utilities 160,278,125 14,088,157 (1,285,361) 173,080,921 Mortgage-backed securities 9,764,566 253,573 (171,423) 9,846,716 Redeemable preferred stock 623,635 53,403 - 677,038 Total fixed maturity securities held to maturity $ 230,811,272 $ 14,756,889 $ (1,760,599) $ 243,807,562 Equity securities available for sale at estimated fair value: Common stock: Industrial, miscellaneous and all other $ 6,310,307 $ 467,132 $ (819,951) $ 5,957,488 Total equity securities available for sale at estimated fair value $ 6,310,307 $ 467,132 $ (819,951) $ 5,957,488 Mortgage loans held for investment at amortized cost: Residential $ 65,759,761 Residential construction 41,306,722 Commercial 42,923,761 Less: Unamortized deferred loan fees, net (637,735) Less: Allowance for loan losses (2,051,818) Total mortgage loans held for investment $ 147,300,691 Real estate held for investment net of accumulated depreciation: Residential $ 69,469,220 Commercial 81,099,778 Total real estate held for investment $ 150,568,998 Policy loans and other investments at amortized cost: Policy loans $ 6,677,924 Insurance assignments 33,340,431 Federal Home Loan Bank stock 689,400 Other investments 2,923,681 Less: Allowance for doubtful accounts (1,142,287) Total policy loans and other investments $ 42,489,149 Short-term investments at amortized cost $ 17,830,990 Accrued investment income $ 3,391,688 The Company’s investments as of December 31, 2016 are summarized as follows: Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value December 31, 2016 Fixed maturity securities held to maturity carried at amortized cost: Bonds: U.S. Treasury securities and obligations of U.S. Government agencies $ 4,475,065 $ 249,028 $ (66,111) $ 4,657,982 Obligations of states and political subdivisions 6,017,225 153,514 (133,249) 6,037,490 Corporate securities including public utilities 164,375,636 10,440,989 (3,727,013) 171,089,612 Mortgage-backed securities 9,488,083 221,400 (280,871) 9,428,612 Redeemable preferred stock 623,635 13,418 - 637,053 Total fixed maturity securities held to maturity $ 184,979,644 $ 11,078,349 $ (4,207,244) $ 191,850,749 Equity securities available for sale at estimated fair value: Common stock: Industrial, miscellaneous and all other $ 10,323,238 $ 447,110 $ (859,092) $ 9,911,256 Total securities available for sale carried at estimated fair value $ 10,323,238 $ 447,110 $ (859,092) $ 9,911,256 Mortgage loans held for investment at amortized cost: Residential $ 58,593,622 Residential construction 40,800,117 Commercial 51,536,622 Less: Unamortized deferred loan fees, net (190,846) Less: Allowance for loan losses (1,748,783) Total mortgage loans held for investment $ 148,990,732 Real estate held for investment net of accumulated depreciation: Residential $ 76,191,985 Commercial 68,973,936 Total real estate held for investment $ 145,165,921 Policy loans and other investments at amortized cost: Policy loans $ 6,694,148 Insurance assignments 33,548,079 Promissory notes 48,797 Federal Home Loan Bank stock 662,100 Other investments 1,765,752 Less: Allowance for doubtful accounts (1,119,630) Total policy loans and other investments $ 41,599,246 Short-term investments at amortized cost $ 27,560,040 Accrued investment income $ 2,972,596 Fixed Maturity Securities The following tables summarize unrealized losses on fixed maturity securities held to maturity, which are carried at amortized cost, at September 30, 2017 and December 31, 2016. The unrealized losses were primarily related to interest rate fluctuations. The tables set forth unrealized losses by duration with the fair value of the related fixed maturity securities: Unrealized Losses for Less than Twelve Months Fair Value Unrealized Losses for More than Twelve Months Fair Value Total Unrealized Loss Fair Value At September 30, 2017 U.S. Treasury Securities and Obligations of U.S. Government Agencies $ 182,493 $ 51,456,444 $ 44,050 $ 851,779 $ 226,543 $ 52,308,223 Obligations of states and political subdivisions 18,357 2,486,400 58,915 1,651,253 77,272 4,137,653 Corporate securities 286,166 16,526,010 999,195 10,820,005 1,285,361 27,346,015 Mortgage-backed securities 68,972 2,026,033 102,451 1,156,803 171,423 3,182,836 Total unrealized losses $ 555,988 $ 72,494,887 $ 1,204,611 $ 14,479,840 $ 1,760,599 $ 86,974,727 At December 31, 2016 U.S. Treasury Securities and Obligations of U.S. Government Agencies $ 66,111 $ 1,342,088 $ - $ - $ 66,111 $ 1,342,088 Obligations of states and political subdivisions 133,249 3,686,856 - - 133,249 3,686,856 Corporate securities 1,728,312 41,796,016 1,998,701 12,969,135 3,727,013 54,765,151 Mortgage-backed securities 176,715 4,176,089 104,156 940,278 280,871 5,116,367 Total unrealized losses $ 2,104,387 $ 51,001,049 $ 2,102,857 $ 13,909,413 $ 4,207,244 $ 64,910,462 There were 143 securities with an average fair value of 98.3% of amortized cost at September 30, 2017. There were 250 securities with an average fair value of 93.9% of amortized cost at December 31, 2016. During the three months ended September 30, 2017 and 2016 an other than temporary decline in fair value resulted in the recognition of credit losses on fixed maturity securities of $100,000 and $30,000, respectively, and for the nine months ended September 30, 2017 and 2016 an other than temporary decline in fair value resulted in the recognition of credit losses on fixed maturity securities of $418,366 and $90,000, respectively. On a quarterly basis, the Company evaluates its fixed maturity securities held to maturity. This evaluation includes a review of current ratings by the National Association of Insurance Commissions (“NAIC”). Securities with a rating of 1 or 2 are considered investment grade and are not reviewed for impairment. Securities with ratings of 3 to 5 are evaluated for impairment. Securities with a rating of 6 are automatically determined to be impaired and are written down. The evaluation involves an analysis of the securities in relation to historical values, interest payment history, projected earnings and revenue growth rates as well as a review of the reason for a downgrade in the NAIC rating. Based on the analysis of a security that is rated 3 to 5, a determination is made whether the security will likely make interest and principal payments in accordance with the terms of the financial instrument. If it is unlikely that the security will meet contractual obligations, the loss is considered to be other than temporary, the security is written down to the new anticipated market value and an impairment loss is recognized. Impairment losses are treated as credit losses as the Company holds fixed maturity securities to maturity unless the underlying conditions have changed in the financial instrument to require an impairment. 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 amortized cost and estimated fair value of fixed maturity securities held to maturity, at September 30, 2017, 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 2017 $ 1,205,533 $ 1,208,929 Due in 2018 through 2021 77,063,707 78,846,158 Due in 2022 through 2026 54,265,268 56,731,089 Due after 2026 87,888,563 96,497,632 Mortgage-backed securities 9,764,566 9,846,716 Redeemable preferred stock 623,635 677,038 Total held to maturity $ 230,811,272 $ 243,807,562 The Company is a member of the Federal Home Loan Bank of Des Moines (“FHLB”). In June through August of 2017, the Company purchased a total of $50,000,000, par value, of United States Treasury fixed maturity securities that it deposited with the FHLB. These securities will generate interest income for the Company and will be available to use as collateral on any cash borrowings from the FHLB. As of September 30, 2017, the Company did not have any outstanding amounts owed to FHLB. Equity Securities The following tables summarize unrealized losses on equity securities available for sale, that were carried at estimated fair value based on quoted trading prices at September 30, 2017 and December 31, 2016. The unrealized losses were primarily the result of decreases in fair value in the retail, industrial and energy sectors. The tables set forth unrealized losses by duration and number of investment positions, together with the fair value of the related equity securities available for sale in a loss position: Unrealized Losses for Less than Twelve Months No. of Investment Positions Unrealized Losses for More than Twelve Months No. of Investment Positions Total Unrealized Losses At September 30, 2017 Industrial, miscellaneous and all other $ 150,581 108 $ 669,370 92 $ 819,951 Total unrealized losses $ 150,581 108 $ 669,370 92 $ 819,951 Fair Value $ 988,159 $ 1,444,994 $ 2,433,153 At December 31, 2016 Industrial, miscellaneous and all other $ 215,563 124 $ 643,529 104 $ 859,092 Total unrealized losses $ 215,563 124 $ 643,529 104 $ 859,092 Fair Value $ 2,063,144 $ 1,685,874 $ 3,749,018 The average fair value of the equity securities available for sale was 74.8% and 81.4% of the original investment as of September 30, 2017 and December 31, 2016, 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 September 30, 2017 and 2016, an other than temporary decline in the fair value resulted in the recognition of an impairment loss on equity securities of $63,375 and $-0-, respectively, and for the nine months ended September 30, 2017 and 2016, an other than temporary decline in the fair value resulted in the recognition of an impairment loss on equity securities of $63,375 and $43,630, respectively. On a quarterly basis, the Company reviews its investment in equity securities that are in a loss position. The first step is to identify securities by lots which are currently carried on the books at a value greater than the 52-week high. These securities are further evaluated by reviewing current market value in relation to historical value, price earnings ratios, projected earnings, revenue growth rates, negative company related events, market sector comparisons and analyst reports to determine if a security has a reasonable expectation to return to the current cost basis. 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 security will recover from the loss position, the loss is considered to be other than temporary, the security is written down to a restated value and an impairment loss is recognized. The fair values for equity securities are based on quoted market prices. There were no investments, aggregated by issuer, in excess of 10% of shareholders’ equity (before net unrealized gains and losses on equity securities available for sale) at September 30, 2017, other than investments issued or guaranteed by the United States Government. The Company’s net realized gains and losses from sales, calls, and maturities, and other than temporary impairments from investments and other assets are summarized as follows: Three Months Ended September 30 Nine Months Ended September 30 2017 2016 2017 2016 Fixed maturity securities held to maturity: Gross realized gains $ 110,529 $ 65,179 $ 163,950 $ 259,635 Gross realized losses (651,754) (4,527) (686,819) (7,405) Other than temporary impairments (100,000) (30,000) (418,366) (90,000) Equity securities available for sale: Gross realized gains 25,898 36,751 132,350 176,331 Gross realized losses (26) (4,544) (58,464) (37,146) Other than temporary impairments (63,375) - (63,375) (43,630) Other assets: Gross realized gains 225,022 191,992 2,006,721 468,675 Gross realized losses (29,335) (324,020) (844,672) (680,794) Total $ (483,041) $ (69,169) $ 231,325 $ 45,666 The net realized gains and losses on the sale of securities are recorded on the trade date, and the cost of the securities sold is determined using the specific identification method. The carrying amount of held to maturity securities sold was $2,240,249 and $1,989,159 for the nine months ended September 30, 2017 and 2016, respectively. The net realized loss related to these sales was $385,484 for the nine months ended September 30, 2017 and the net realized gain related to these sales was $156,154 for the nine months ended September 30, 2016. Although the intent is to buy and hold a fixed maturity security to maturity, the Company will sell a security prior to maturity if conditions have changed within the entity that issued the security to increase the risk of default to an unacceptable level. Major categories of net investment income are as follows: Three Months Ended September 30 Nine Months Ended September 30 2017 2016 2017 2016 Fixed maturity securities $ 2,692,586 $ 2,410,641 $ 7,475,156 $ 6,472,847 Equity securities 66,320 78,402 209,517 208,696 Mortgage loans held for investment 2,973,349 2,830,853 8,803,257 8,238,249 Real estate held for investment 2,818,672 2,736,301 8,540,756 8,162,574 Policy loans 195,098 205,537 621,854 558,778 Insurance assignments 3,234,520 2,952,170 9,943,561 8,915,654 Other investments 16,051 - 36,041 13,962 Short-term investments 109,939 20,978 311,989 66,480 Gross investment income 12,106,535 11,234,882 35,942,131 32,637,240 Investment expenses (3,745,069) (3,145,025) (10,383,018) (9,152,960) Net investment income $ 8,361,466 $ 8,089,857 $ 25,559,113 $ 23,484,280 Net investment income includes income earned by the restricted assets of the cemeteries and mortuaries of $129,235 and $133,289 for the three months ended September 30, 2017 and 2016, respectively, and $369,721 and $295,630 for the nine months ended September 30, 2017 and 2016, 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 with regulatory authorities as required by law amounted to $9,166,082 at September 30, 2017 and $9,269,121 at December 31, 2016. The pledged securities are included in various assets under investments on the accompanying condensed consolidated balance sheets. Real Estate Held for Investment 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 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 12 commercial properties in 7 states. These properties include industrial warehouses, office buildings, retail centers, undeveloped land and includes the redevelopment and expansion of its corporate campus in Salt Lake City, Utah. The Company does use debt in strategic cases to leverage established yields or to acquire a higher quality or different class of asset. The aggregated net ending balance of commercial real estate that serves as collateral for bank borrowings was approximately $65,907,000 and $51,507,000 as of September 30, 2017 and December 31, 2016, respectively. The associated bank loan carrying values totaled approximately $38,161,000 and $21,831,000 as of September 30, 2017 and December 31, 2016, respectively. The following is a summary of the Company’s commercial real estate held for investment for the periods presented: Net Ending Balance Total Square Footage September 30 December 31 September 30 December 31 2017 2016 2017 2016 Arizona $ 4,000 (1) $ 450,538 (1) - 16,270 Arkansas 97,219 100,369 3,200 3,200 Kansas 11,993,029 12,450,297 222,679 222,679 Louisiana 499,573 518,700 7,063 7,063 Mississippi 3,748,324 3,818,985 33,821 33,821 New Mexico 7,000 (1) 7,000 (1) - - Texas 3,728,960 3,734,974 23,470 23,470 Utah 61,021,673 (2) 47,893,073 (2) 433,244 433,244 $ 81,099,778 $ 68,973,936 723,477 739,747 (1) Includes undeveloped land (2) Includes 53rd Center completed in July 2017 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. As an orderly and active market for these homes returns, the Company has the option to dispose or to continue and hold them for cash flow and acceptable returns. The Company established Security National Real Estate Services (“SNRE”) 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 September 30, 2017, SNRE manages 107 residential properties in 9 states across the United States which includes a newly constructed apartment complex, Dry Creek at East Village, in Sandy, Utah. The net ending balance of residential real estate that serves as collateral for a bank borrowing was approximately $34,772,000 and $35,798,000 , as of September 30, 2017 and December 31, 2016, respectively. The associated bank loan carrying value was approximately $26,893,000 and $27,377,000 as of September 30, 2017 and December 31, 2016, respectively. The net ending balance of foreclosed residential real estate included in residential real estate held for investment is $34,167,065 and $39,856,434 as of September 30, 2017 and December 31, 2016, respectively. The following is a summary of the Company’s residential real estate held for investment for the periods presented: Net Ending Balance September 30 December 31 2017 2016 Arizona $ 217,516 $ 742,259 California 5,663,871 5,848,389 Colorado - 364,489 Florida 7,311,913 8,327,355 Hawaii 712,286 - Ohio 46,658 46,658 Oklahoma 17,500 - Texas 511,486 1,091,188 Utah 54,701,809 59,485,466 Washington 286,181 286,181 $ 69,469,220 $ 76,191,985 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 80,000 square feet, or approximately 10% of the overall commercial real estate holdings. As of September 30, 2017, 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% 1044 River Oaks Dr., Flowood, MS Life Insurance Operations 5,522 27% (1) This asset is included in property and equipment on the condensed consolidated balance sheet Mortgage Loans Held for Investment 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 4 %, %, %, % % of its mortgage loans from borrowers located in the states of Utah, California, Texas, Florida, , respectively. Mortgage loans held for investment are Mortgage loans are secured by the underlying property and require an appraisal at the time of underwriting and funding. Generally, the Company will fund a loan not to exceed 80% of the loan’s collateral fair market value. Amounts over 80% will require additional collateral or mortgage insurance by an approved third-party insurer. The Company provides for losses on its mortgage loans held for investment through an allowance for loan losses (a contra-asset account). The allowance is comprised of two components. The first component is an allowance for collectively evaluated impairment that is based upon the Company’s historical experience in collecting similar receivables. The second component is based upon individual evaluation of loans that are determined to be impaired. Upon determining impairment, the Company establishes an individual impairment allowance based upon an assessment of the fair value of the underlying collateral. The allowance for losses on mortgage loans held for investment could change based on changes in the value of the underlying collateral, the performance status of the loans, or the Company’s actual collection experience. The actual losses could change, in the near term, from the established allowance, based upon the occurrence or non-occurrence of these events. For purposes of determining the allowance for losses, the Company has segmented its mortgage loans held for investment by loan type. The Company’s loan types are commercial, residential, and residential construction. The inherent risks within the portfolio vary depending upon the loan type as follows: Commercial Residential Residential construction (including land acquisition and development) 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 September 30, 2017 Allowance for credit losses: Beginning balance - January 1, 2017 $ 187,129 $ 1,461,540 $ 100,114 $ 1,748,783 Charge-offs - (49,775) (64,894) (114,669) Provision - 417,704 - 417,704 Ending balance - September 30, 2017 $ 187,129 $ 1,829,469 $ 35,220 $ 2,051,818 Ending balance: individually evaluated for impairment $ - $ 411,172 $ - $ 411,172 Ending balance: collectively evaluated for impairment $ 187,129 $ 1,418,297 $ 35,220 $ 1,640,646 Mortgage loans: Ending balance $ 42,923,761 $ 65,759,761 $ 41,306,722 $ 149,990,244 Ending balance: individually evaluated for impairment $ 203,806 $ 5,425,757 $ - $ 5,629,563 Ending balance: collectively evaluated for impairment $ 42,719,955 $ 60,334,004 $ 41,306,722 $ 144,360,681 December 31, 2016 Allowance for credit losses: Beginning balance - January 1, 2016 $ 187,129 $ 1,560,877 $ 100,114 $ 1,848,120 Charge-offs - (420,135) - (420,135) Provision - 320,798 - 320,798 Ending balance - December 31, 2016 $ 187,129 $ 1,461,540 $ 100,114 $ 1,748,783 Ending balance: individually evaluated for impairment $ - $ 374,501 $ - $ 374,501 Ending balance: collectively evaluated for impairment $ 187,129 $ 1,087,039 $ 100,114 $ 1,374,282 Mortgage loans: Ending balance $ 51,536,622 $ 58,593,622 $ 40,800,117 $ 150,930,361 Ending balance: individually evaluated for impairment $ 202,992 $ 2,916,538 $ 64,895 $ 3,184,425 Ending balance: collectively evaluated for impairment $ 51,333,630 $ 55,677,084 $ 40,735,222 $ 147,745,936 The following is a summary of the aging of mortgage loans for the periods presented Age Analysis of Mortgage Loans Held for Investment 30-59 Days Past Due 60-89 Days Past Due Greater Than 90 Days (1) In Process of Foreclosure (1) Total Past Due Current Total Mortgage Loans Allowance for Loan Losses Unamortized deferred loan fees, net Net Mortgage Loans September 30, 2017 Commercial $ 513,218 $ - $ - $ 203,806 $ 717,024 $ 42,206,737 $ 42,923,761 $ (187,129) $ (229,603) $ 42,507,029 Residential 22,277 1,236,721 2,200,206 3,225,551 6,684,755 59,075,006 65,759,761 (1,829,469) (21,578) 63,908,714 Residential Construction - - - - - 41,306,722 41,306,722 (35,220) (386,554) 40,884,948 Total $ 535,495 $ 1,236,721 $ 2,200,206 $ 3,429,357 $ 7,401,779 $ 142,588,465 $ 149,990,244 $ (2,051,818) $ (637,735) $ 147,300,691 December 31, 2016 Commercial $ - $ - $ - $ 202,992 $ 202,992 $ 51,333,630 $ 51,536,622 $ (187,129) $ (155,725) $ 51,193,768 Residential 964,960 996,779 1,290,355 1,626,183 4,878,277 53,715,345 58,593,622 (1,461,540) (35,121) 57,096,961 Residential Construction - - 64,895 - 64,895 40,735,222 40,800,117 (100,114) - 40,700,003 Total $ 964,960 $ 996,779 $ 1,355,250 $ 1,829,175 $ 5,146,164 $ 145,784,197 $ 150,930,361 $ (1,748,783) $ (190,846) $ 148,990,732 (1) Interest income is not recognized on loans past due greater than 90 days or in foreclosure. Impaired Mortgage Loans Held for Investment 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 September 30, 2017 With no related allowance recorded: Commercial $ 203,806 $ 203,806 $ - $ 456,524 $ - Residential 3,872,587 3,872,587 - 3,281,980 - Residential construction - - - - - With an allowance recorded: Commercial $ - $ - $ - $ - $ - Residential 1,553,170 1,553,170 411,172 1,287,394 - Residential construction - - - - - Total: Commercial $ 203,806 $ 203,806 $ - $ 456,524 $ - Residential 5,425,757 5,425,757 411,172 4,569,374 - Residential construction - - - - - December 31, 2016 With no related allowance recorded: Commercial $ 202,992 $ 202,992 $ - $ 202,992 $ - Residential - - - - - Residential construction 64,895 64,895 - 79,082 - With an allowance recorded: Commercial $ - $ - $ - $ - $ - Residential 2,916,538 2,916,538 374,501 3,001,850 - Residential construction - - - - - Total: Commercial $ 202,992 $ 202,992 $ - $ 202,992 $ - Residential 2,916,538 2,916,538 374,501 3,001,850 - Residential construction 64,895 64,895 - 79,082 - Credit Risk Profile Based on Performance Status The Company’s mortgage loan held for investment 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 held for investment were as follows: Mortgage Loans Held for Investment Credit Exposure Credit Risk Profile Based on Payment Activity Commercial Residential Residential Construction Total September 30, 2017 December 31, 2016 September 30, 2017 December 31, 2016 September 30, 2017 December 31, 2016 September 30, 2017 December 31, 2016 Performing $ 42,719,955 $ 51,333,630 $ 60,334,004 $ 55,677,084 $ 41,306,722 $ 40,735,222 $ 144,360,681 $ 147,745,936 Non-performing 203,806 202,992 5,425,757 2,916,538 - 64,895 5,629,563 3,184,425 Total $ 42,923,761 $ 51,536,622 $ 65,759,761 $ 58,593,622 $ 41,306,722 $ 40,800,117 $ 149,990,244 $ 150,930,361 Non-Accrual Mortgage Loans Held for Investment 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 interest income that had been accrued. Payments received for loans on a non-accrual status are recognized on a cash basis. Interest income recognized from any payments received for loans on a non-accrual status was immaterial. Accrual of interest resumes if a loan is brought current. Interest not accrued on these loans totals approximately $185,000 and $172,000 as of September 30, 2017 and December 31, 2016, respectively. The following is a summary of mortgage loans held for investment on a non-accrual status for the periods presented. Mortgage Loans on Non-Accrual Status As of September 30 2017 As of December 31 2016 Commercial $ 203,806 $ 202,992 Residential 5,425,757 2,916,538 Residential construction - 64,895 Total $ 5,629,563 $ 3,184,425 |
4) Loans Held For Sale
4) Loans Held For Sale | 9 Months Ended |
Sep. 30, 2017 | |
Notes | |
4) Loans Held For Sale | 4) Loans Held for Sale Fair Value Option Election Accounting Standards Codification (“ASC”) No. 825, “Financial Instruments”, allows for the option to report certain financial assets and liabilities at fair value initially and at subsequent measurement dates with changes in fair value included in earnings. The option may be applied instrument by instrument, but it is irrevocable. The Company elected the fair value option for loans held for sale originated after July 1, 2017. The Company believes the fair value option most closely aligns the timing of the recognition of gains and costs. These loans are intended for sale and the Company believes that the fair value is the best indicator of the resolution of these loans. Electing fair value also reduces certain timing differences and better matches changes in the fair value of these assets with changes in the fair value of the related derivatives used for these assets. Interest income is recorded based on the contractual terms of the loan and in accordance with the Company’s policy on mortgage loans held for investment and is included in mortgage fee income on the condensed consolidated statement of earnings. None of these loans are 90 or more days past due nor on nonaccrual status as of September 30, 2017. See Note 8 to the condensed consolidated financial statements for additional disclosures regarding loans held for sale. The following is a summary of the aggregate fair value and the aggregate unpaid principal balance (“UPB”) of loans held for sale for the periods presented: As of September 30 2017 Aggregate fair value $ 166,990,187 UPB 161,165,793 Unrealized gain 5,824,394 Mortgage Fee Income Mortgage fee income consists of origination fees, processing fees, interest income and certain other income related to the origination and sale of mortgage loans held for sale. Major categories of mortgage fee income for loans held for sale are as follows: Three Months Ended September 30 Nine Months Ended September 30 2017 2016 2017 2016 Loan fees $ 15,203,107 $ 11,988,959 $ 33,291,947 $ 33,071,486 Interest income 2,097,249 2,204,286 5,679,868 6,022,796 Secondary gains 28,550,295 41,346,576 87,165,736 108,667,085 Change in fair value of loan commitments (4,833,268) (1,505,820) (3,677,554) 1,459,568 Change in fair value of loans held for sale 1,061,917 - 1,061,917 - Provision for loan loss reserve (481,727) (838,238) (1,435,180) (2,253,689) Mortgage fee income $ 41,597,573 $ 53,195,763 $ 122,086,734 $ 146,967,246 Loan Loss Reserve When a repurchase demand corresponding to a mortgage loan previously held for sale and sold to a third-party investor 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 September 30 2017 As of December 31 2016 Balance, beginning of period $ 627,733 $ 2,805,900 Provision on current loan originations (1) 1,435,180 2,988,754 Additional provision for loan loss reserve - 1,700,000 Charge-offs, net of recaptured amounts 108,175 (6,866,921) Balance, end of period $ 2,171,088 $ 627,733 (1) Included in Mortgage fee income 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. The Company believes there is potential to resolve any alleged claims by third-party investors on acceptable terms. If the Company is unable to resolve such claims on acceptable terms, legal action may ensue. In the event of legal action by any third-party investor, the Company believes it has significant defenses to any such action and intends to vigorously defend itself against such action. |
5) Stock-based Compensation
5) Stock-based Compensation | 9 Months Ended |
Sep. 30, 2017 | |
Notes | |
5) Stock-based Compensation | 5) Stock Compensation Plans 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 $102,429 and $84,949 has been recognized for these plans for the three months ended September 30, 2017 and 2016, respectively, and $305,741 and $253,427 for the nine months ended September 30, 2017 and 2016, respectively. As of September 30, 2017, the total unrecognized compensation expense related to the options issued was $69,719 , 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 weighted historical volatility of the Company’s Class A common stock 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 compensation plans as of September 30, 2017, and the changes during the nine months ended September 30, 2017, 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, 2016 741,973 $ 4.33 556,298 $ 4.61 Granted - - Exercised - (103,402) 1.31 Cancelled - (24,227) 1.31 Outstanding at September 30, 2017 741,973 $ 4.33 428,669 $ 5.59 As of September 30, 2017: Options exercisable 706,854 $ 4.21 407,669 $ 5.50 As of September 30, 2017: Available options for future grant 525,682 227,750 Weighted average contractual term of options outstanding at September 30, 2017 6.62 years 2.63 years Weighted average contractual term of options exercisable at September 30, 2017 6.50 years 2.55 years Aggregated intrinsic value of options outstanding at September 30, 2017 (1) $941,567 $151,012 Aggregated intrinsic value of options exercisable at September 30, 2017 (1) $941,311 $151,012 (1) The Company used a stock price of $5.10 as of September 30, 2017 to derive intrinsic value. A summary of the status of the Company’s stock compensation plans as of September 30, 2016, and the changes during the nine months ended September 30, 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 (32,417) 2.38 - Cancelled - - Outstanding at September 30, 2016 585,844 $ 3.97 577,436 $ 3.54 As of September 30, 2016: Options exercisable 550,792 $ 3.82 551,186 $ 3.38 As of September 30, 2016: Available options for future grant 397,342 57,750 Weighted average contractual term of options outstanding at September 30, 2016 6.99 years 2.00 years Weighted average contractual term of options exercisable at September 30, 2016 6.86 years 1.90 years Aggregated intrinsic value of options outstanding at September 30, 2016 (1) $1,179,541 $1,460,167 Aggregated intrinsic value of options exercisable at September 30, 2016 (1) $1,179,541 $1,460,167 (1) The Company used a stock price of $5.86 as of September 30, 2016 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 nine months ended September 30, 2017 and 2016 was $578,017 and $98,663 , respectively. |
6) Earnings Per Share
6) Earnings Per Share | 9 Months Ended |
Sep. 30, 2017 | |
Notes | |
6) Earnings Per Share | 6) Earnings Per Share The basic and diluted earnings per share amounts were calculated as follows: Three Months Ended September 30 Nine Months Ended September 30 2017 2016 2017 2016 Numerator: Net earnings $ 1,096,838 $ 4,183,005 $ 5,442,702 $ 11,737,952 Denominator: Basic weighted-average shares outstanding 15,256,857 14,830,078 15,159,569 14,744,779 Effect of dilutive securities: Employee stock options 285,803 439,535 315,257 421,266 Diluted weighted-average shares outstanding 15,542,660 15,269,613 15,474,826 15,166,045 Basic net earnings per share $0.07 $0.28 $0.36 $0.80 Diluted net earnings per share $0.07 $0.27 $0.35 $0.77 Net earnings per share amounts have been retroactively adjusted for the effect of annual stock dividends. For the nine months ended September 30, 2017 and 2016, there were 486,725 and 250,039 of anti-dilutive employee stock option shares, respectively, that were not included in the computation of diluted net earnings per common share as their effect would be anti-dilutive. |
7) Business Segments
7) Business Segments | 9 Months Ended |
Sep. 30, 2017 | |
Notes | |
7) Business Segments | 7) Business Segment Information 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 loans . 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, 2016. 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 Intercompany Eliminations Consolidated For the Three Months Ended September 30, 2017 Revenues from external customers $ 25,229,759 $ 2,988,137 $ 43,753,955 $ - $ 71,971,851 Intersegment revenues 3,333,593 116,290 86,580 (3,536,463) - Segment profit before income taxes 522,574 237,108 378,335 - 1,138,017 For the Three Months Ended September 30, 2016 Revenues from external customers $ 24,972,397 $ 2,900,917 $ 55,075,343 $ - $ 82,948,657 Intersegment revenues 3,318,369 107,745 79,164 (3,505,278) - Segment profit before income taxes 2,139,702 54,891 4,378,937 - 6,573,530 For the Nine Months Ended September 30, 2017 Revenues from external customers $ 77,112,117 $ 9,907,037 $ 128,953,552 $ - $ 215,972,706 Intersegment revenues 9,299,671 338,745 268,764 (9,907,180) - Segment profit before income taxes 4,824,654 1,331,896 1,873,536 - 8,030,086 Identifiable Assets 853,298,860 94,716,098 190,202,990 (133,079,207) 1,005,138,741 Goodwill 2,765,570 - - - 2,765,570 Total Assets 856,064,430 94,716,098 190,202,990 (133,079,207) 1,007,904,311 For the Nine Months Ended September 30, 2016 Revenues from external customers $ 70,616,968 $ 10,045,384 $ 151,829,880 $ - $ 232,492,232 Intersegment revenues 9,780,803 616,532 239,503 (10,636,838) - Segment profit before income taxes 5,785,464 1,283,553 11,561,479 - 18,630,496 Identifiable Assets 797,486,493 95,414,964 194,469,525 (138,809,339) 948,561,643 Goodwill 2,765,570 - - - 2,765,570 Total Assets 800,252,063 95,414,964 194,469,525 (138,809,339) 951,327,213 |
8)_ Fair Value of Financial Ins
8): Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2017 | |
Notes | |
8): Fair Value of Financial Instruments | 8) Fair Value of Financial Instruments Generally accepted accounting principles (GAAP) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. GAAP also specifies a fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. Fair value measurements are classified under the following hierarchy: Level 1: 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 significant financial instruments: The items shown under Level 1 and Level 2 are valued as follows: Equity Securities Available for Sale : The fair values of investments in equity securities along with methods used to estimate such values are disclosed in Note 3 of the Notes to the condensed consolidated financial statements. Restricted Assets : A portion of these assets include mutual funds and equity securities that have quoted market prices that are used to determine fair value. Also included are cash and cash equivalents and participations in mortgage loans. The carrying amounts reported in the accompanying condensed consolidated balance sheets for these financial instruments approximate their fair values due to their short-term nature. Cemetery Endowment Care Trust Investments : A portion of these assets include equity securities that have quoted market prices that are used to determine fair value. Also included are cash and cash equivalents. The carrying amounts reported in the accompanying condensed consolidated balance sheets for these financial instruments approximate their fair values due to their short-term nature. Call and Put Options : The Company uses quoted market prices to value its call and put options. Additionally, there were no transfers between Level 1 and Level 2 in the fair value hierarchy. The items shown under Level 3 are valued as follows: Loans Held for Sale, at Fair Value : The Company elected the fair value option for all loans held for sale originated after July 1, 2017. The fair value is based on quoted market prices, when available. When a quoted market price is not readily available, the Company uses the market price from its last sale of similar assets. Loan Commitments and Forward Sale Commitments The Company estimates the fair value of a loan commitment based on the change in estimated fair value of the underlying mortgage loan, quoted MBS prices, estimates of the fair value of mortgage servicing rights, and an estimate of 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 loan commitment is issued. 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 and other factors from the Company’s recent historical data are used to estimate the quantity and value of mortgage loans that will fund within the terms of the commitments. Interest Rate Swaps Impaired Mortgage Loans Held for Investment : 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 also considers area comparables and property condition when determining fair value. In addition to this analysis performed by the Company, the Company depreciates Real Estate Held for Investment. This depreciation reduces the book value of these properties and lessens the exposure to the Company from further deterioration in real estate values. Mortgage Servicing Rights The following tables summarize Level 1, 2 and 3 financial assets and financial liabilities measured at fair value on a recurring basis by their classification in the condensed consolidated balance sheet at September 30, 2017. Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets accounted for at fair value on a recurring basis Common stock $ 5,957,488 $ 5,957,488 $ - $ - Total equity securities available for sale $ 5,957,488 $ 5,957,488 $ - $ - Loans held for sale $ 166,990,187 $ - $ - $ 166,990,187 Restricted assets (1) 78,421 78,421 - - Cemetery perpetual care trust investments (1) 676,881 676,881 - - Derivatives - loan commitments (2) 3,140,704 - - 3,140,704 Total assets accounted for at fair value on a recurring basis $ 176,843,681 $ 6,712,790 $ - $ 170,130,891 Liabilities accounted for at fair value on a recurring basis Derivatives - bank loan interest rate swaps (3) $ (138) $ - $ - $ (138) - call options (4) (50,452) (50,452) - - - put options (4) (63,637) (63,637) - - - loan commitments (4) (8,926) - - (8,926) Total liabilities accounted for at fair value on a recurring basis $ (123,153) $ (114,089) $ - $ (9,064) (1) Excluding cash (2) Included in other assets on the condensed consolidated balance sheet (3) Included in bank and other loans payable on the condensed consolidated balance sheet (4) Included in other liabilities and accrued expenses on the condensed consolidated balance sheet Following is a summary of changes in the condensed consolidated balance sheet line items measured using level 3 inputs: Net Loan Commitments Bank Loan Interest Rate Swaps Loans Held for Sale Balance - December 31, 2016 $ 6,809,332 $ (3,308) $ - Purchases 636,022,818 Sales (473,930,540) Total gains (losses): Included in earnings (1) (3,677,554) - 4,897,909 Included in other comprehensive income (2) - 3,170 - Balance - September 30, 2017 $ 3,131,778 $ (138) $ 166,990,187 (1) As a component of Mortgage fee income on the condensed consolidated statement of earnings (2) As a component of Unrealized gains on derivative instruments on the condensed consolidated statement of comprehensive income 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 September 30, 2017. 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 Impaired mortgage loans held for investment $ 5,218,392 $ - $ - $ 5,218,392 Mortgage servicing rights additions 4,057,974 - - 4,057,974 Total assets accounted for at fair value on a nonrecurring basis $ 9,276,366 $ - $ - $ 9,276,366 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, 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 $ 9,911,256 $ 9,911,256 $ - $ - Total equity securities available for sale $ 9,911,256 $ 9,911,256 $ - $ - Restricted assets (1) $ 736,603 $ 736,603 $ - $ - Cemetery perpetual care trust investments (1) 698,202 698,202 - - Derivatives - loan commitments (2) 6,911,544 - - 6,911,544 Total assets accounted for at fair value on a recurring basis $ 18,257,605 $ 11,346,061 $ - $ 6,911,544 Liabilities accounted for at fair value on a recurring basis Derivatives - bank loan interest rate swaps (3) $ (3,308) - - $ (3,308) - call options (4) (109,474) (109,474) - - - put options (4) (26,494) (26,494) - - - loan commitments (4) (102,212) - - (102,212) Total liabilities accounted for at fair value on a recurring basis $ (241,488) $ (135,968) $ - $ (105,520) (1) Excluding cash (2) Included in other assets on the condensed consolidated balance sheet (3) Included in bank and other loans payable on the condensed consolidated balance sheet (4) Included in other liabilities and accrued expenses on the condensed consolidated balance sheet Following is a summary of changes in the condensed consolidated balance sheet line items measured using level 3 inputs: Net Loan Commitments Bank Loan Interest Rate Swaps Balance - December 31, 2015 $ 7,671,495 $ (13,947) Total gains (losses): Included in earnings (1) (862,163) - Included in other comprehensive income (2) - 10,639 Balance - December 31, 2016 $ 6,809,332 $ (3,308) (1) As a component of Mortgage fee income on the condensed consolidated statement of earnings (2) As a component of Unrealized gains on derivative instruments on the condensed consolidated statement of comprehensive income 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, 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 Impaired mortgage loans held for investment $ 2,809,925 $ - $ - $ 2,809,925 Mortgage servicing rights additions 8,603,154 - - 8,603,154 Real estate held for investment 2,347,820 - - 2,347,820 Total assets accounted for at fair value on a nonrecurring basis $ 13,760,899 $ - $ - $ 13,760,899 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 September 30, 2017 and December 31, 2016. 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 September 30, 2017: Carrying Value Level 1 Level 2 Level 3 Total Estimated Fair Value Assets Fixed maturity securities held to maturity $ 230,811,272 $ - $ 243,807,562 $ - $ 243,807,562 Mortgage loans held for investment: Residential 63,908,714 - - 68,139,551 68,139,551 Residential construction 40,884,948 - - 40,884,948 40,884,948 Commercial 42,507,029 - - 44,223,823 44,223,823 Mortgage loans held for investment, net $ 147,300,691 $ - $ - $ 153,248,322 $ 153,248,322 Loans held for sale (at amortized costs) 34,905,719 - - 35,131,853 35,131,853 Policy loans 6,677,924 - - 6,677,924 6,677,924 Insurance assignments, net (1) 32,198,144 - - 32,198,144 32,198,144 Short-term investments 17,830,990 - 17,830,990 - 17,830,990 Mortgage servicing rights, net 20,396,568 - - 26,785,380 26,785,380 Liabilities Bank and other loans payable $ (182,769,531) $ - $ - $ (182,769,531) $ (182,769,531) Policyholder account balances (2) (48,200,442) - - (37,564,692) (37,564,692) Future policy benefits - annuities (2) (99,519,758) - - (100,851,101) (100,851,101) (1) Included in policy loans and other investments on the condensed consolidated balance sheet. (2) Included in future policy benefits and unpaid claims on the condensed consolidated balance sheet. 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, 2016: Carrying Value Level 1 Level 2 Level 3 Total Estimated Fair Value Assets Fixed maturity securities held to maturity $ 184,979,644 $ - $ 191,850,749 $ - $ 191,850,749 Mortgage loans held for investment: Residential 57,096,961 - - 61,357,393 61,357,393 Residential construction 40,700,003 - - 40,700,003 40,700,003 Commercial 51,193,768 - - 53,299,800 53,299,800 Mortgage loans held for investment, net $ 148,990,732 $ - $ - $ 155,357,196 $ 155,357,196 Loans held for sale 189,578,243 - - 192,289,854 192,289,854 Policy loans 6,694,148 - - 6,694,148 6,694,148 Insurance assignments, net (1) 32,477,246 - - 32,477,246 32,477,246 Short-term investments 27,560,040 - 27,560,040 - 27,560,040 Mortgage servicing rights, net 18,872,362 - - 25,496,832 25,496,832 Liabilities Bank and other loans payable $ (152,137,371) $ - $ - $ (152,137,371) $ (152,137,371) Policyholder account balances (2) (49,421,125) - - (38,530,031) (38,530,031) Future policy benefits - annuities (2) (99,388,662) - - (100,253,261) (100,253,261) (1) Included in policy loans and other investments on the condensed consolidated balance sheet. (2) Included in future policy benefits and unpaid claims on the condensed consolidated balance sheet. The methods, assumptions and significant valuation techniques and inputs used to estimate the fair value of these financial instruments are summarized as follows: Fixed Maturity Securities Held to Maturity : Mortgage Loans Held for Investment : The estimated fair value of the Company’s mortgage loans held for investment 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 is determined through a combination of discounted cash flows (estimating expected future cash flows of interest payments and discounting them using current interest rates from single family mortgages) and considering pricing of similar loans that were sold recently. Residential Construction – These loans are primarily short in maturity accordingly, the estimated fair value is determined to be the carrying 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. Loans Held for Sale, at Amortized Cost : The fair value is based on quoted market prices, when available. When a quoted market price is not readily available, the Company uses the market price from its last sale of similar assets. Policy Loans : The carrying amounts reported in the accompanying condensed consolidated balance sheet for these financial instruments approximate their fair values because they are fully collateralized by the cash surrender value of the underlying insurance policies. Insurance Assignments, Net : These investments are primarily short in maturity, accordingly, 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 due to their short-term nature. Mortgage Servicing Rights, Net : The methods used to determine fair value of mortgage servicing rights were previously disclosed in this Note 8. Bank and Other Loans Payable The carrying amounts reported in the accompanying condensed consolidated balance sheet for these financial instruments approximate their fair values due to their relatively short-term maturities and variable interest rates. 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 1.5% to 6.5%. The fair values for these investment-type insurance contracts are estimated based on the present value of liability cash flows. 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. |
9) Allowance For Doubtful Accou
9) Allowance For Doubtful Accounts and Loan Losses and Impaired Loans | 9 Months Ended |
Sep. 30, 2017 | |
Notes | |
9) Allowance For Doubtful Accounts and Loan Losses and Impaired Loans | 9) Allowance for Doubtful Accounts The Company records an allowance and recognizes an expense for potential losses from other investments 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. |
10) Derivative Commitments
10) Derivative Commitments | 9 Months Ended |
Sep. 30, 2017 | |
Notes | |
10) Derivative Commitments | 10) Derivative Instruments Mortgage Banking Derivatives Loan Commitments The Company is exposed to price risk due to the potential impact of changes in interest rates on the values of loan commitments from the time a 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 loan commitments that will be exercised (i.e., the number of loans that will be funded) fluctuates. The probability that a loan will not be funded or the loan application is denied or withdrawn within the terms of the commitment is driven by a number of factors, particularly the change, if any, in mortgage rates following the issuance of the loan commitment. 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 loan commitments and are updated periodically to reflect the most current data. The Company estimates the fair value of a loan commitment based on the change in estimated fair value of the underlying mortgage loan, quoted MBS prices, estimates of the fair value of mortgage servicing rights, and an estimate of 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 loan commitment is issued and is shown net of expenses. Following issuance, the value of a loan commitment can be either positive or negative depending upon the change in value of the underlying mortgage loans. Forward Sale Commitments The Company utilizes forward commitments to economically hedge the price risk associated with its outstanding mortgage loan commitments. A forward commitment protects the Company from losses on sales of the loans arising from exercise of the loan commitments. Management expects these types of commitments will experience changes in fair value opposite to changes in fair value of the loan commitments, thereby reducing earnings volatility related to the recognition in earnings of changes in the values of the commitments. The net changes in fair value of all loan commitments and forward sale commitments are shown in current earnings as a component of mortgage fee income. Call and Put Options The Company uses 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 uses the strategy of selling put options as a means of generating cash or purchasing equity securities at lower than current market prices. The Company receives an immediate payment of cash for the value of the option and establishes a liability for the fair value of the option. The liability for options is adjusted to fair value at each reporting date. In the event a call option is exercised, the Company recognizes a gain on the sale of the equity security enhanced by the value of the option that was sold. If the option expires unexercised, the Company recognizes a gain from the sale of the option. In the event a put option is exercised, the Company acquires an equity security at the strike price of the option reduced by the value received from the sale of the put option. The equity security is then traded as a normal equity security in the Company’s portfolio. The following table shows the notional amount and fair value of derivatives as of September 30, 2017 and December 31, 2016. Fair Values and Notional Values of Derivative Instruments September 30, 2017 December 31, 2016 Balance Sheet Location Notional Amount Asset Fair Value Liability Fair Value Notional Amount Asset Fair Value Liability Fair Value Derivatives not designated as hedging instruments: Loan commitments Other assets and Other liabilities $147,086,043 $3,140,704 $ 8,926 $191,757,193 $6,911,544 $102,212 Call options Other liabilities 1,473,050 -- 50,452 2,169,850 -- 109,474 Put options Other liabilities 2,593,300 -- 63,637 1,336,750 -- 26,494 Derivatives designated as fair value hedging instruments: Interest rate swaps Bank and other loans payable 43,940 -- 138 175,762 -- 3,308 Total $151,196,333 $3,140,704 $123,153 $195,439,555 $6,911,544 $241,488 The following table shows the gains and losses on derivatives for the periods presented. There were no gains or losses reclassified from accumulated other comprehensive income (OCI) into income or gains or losses recognized in income on derivatives ineffective portion or any amounts excluded from effective testing. Net Amount Gain (Loss) Net Amount Gain (Loss) Three Months Ended September 30 Nine Months Ended September 30 Derivative Classification 2017 2016 2017 2016 Interest Rate Swaps Other comprehensive income $ 554 $ - $ 3,170 $ 5,541 Loan commitments Mortgage fee income $ (4,833,268) $ (1,505,820) $ (3,677,554) $ 1,459,568 Call and put options Realized gains on investments and other assets $ 27,734 $ 73,250 $ 216,561 $ 210,522 |
11) Reinsurance, Commitments an
11) Reinsurance, Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Notes | |
11) Reinsurance, Commitments and Contingencies | 11) Reinsurance, Commitments and Contingencies Reinsurance The Company follows the procedure of reinsuring risks in excess of a specified limit, which ranges from $25,000 to $100,000. The Company is liable for these amounts in the event such reinsurers are unable to pay their portion of the claims. The Company has also assumed insurance from other companies. 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 estimated liability for indemnification losses is included in other liabilities and accrued expenses and, as of September 30, 2017 and December 31, 2016, the balances were $2,171,000 and $628,000 , respectively. Mortgage Loan Loss Litigation Lehman Brothers Holdings Litigation – Delaware and New York In January 2014, Lehman Brothers Holdings, Inc. (“Lehman Holdings”) entered into a settlement with the Federal National Mortgage Association (Fannie Mae) concerning the mortgage loan claims that Fannie Mae had asserted against Lehman Holdings, which were based on alleged breaches of certain representations and warranties by Lehman Holdings in the mortgage loans it had sold to Fannie Mae. Lehman Holdings acquired these loans from Aurora Bank, FSB, formerly known as Lehman Brothers Bank, FSB, which in turn purchased the loans from certain residential mortgage loan originators, including SecurityNational Mortgage. A settlement based on similar circumstances was entered into between Lehman Holdings and the Federal Home Loan Mortgage Corporation (Freddie Mac) in February 2014. Lehman Holdings filed a motion in May 2014 with the U.S. Bankruptcy Court of the Southern District of New York to require the mortgage loan originators, including SecurityNational Mortgage, to engage in non-binding mediations of their alleged indemnification claims against the mortgage loan originators relative to the Fannie Mae and Freddie Mac settlements with Lehman Holdings. The mediation was not successful in resolving any issues between SecurityNational Mortgage and Lehman Holdings. On January 26, 2016, SecurityNational Mortgage filed a declaratory judgment action against Lehman Holdings in the Superior Court for the State of Delaware. In the Delaware action, SecurityNational Mortgage asserted its right to obtain a declaration of rights in that there are allegedly millions of dollars in dispute with Lehman Holdings pertaining to approximately 136 loans. SecurityNational Mortgage sought a declaratory judgment as to its rights as it contends that it has no liability to Lehman Holdings as a result of Lehman Holdings’ settlements with Fannie Mae and Freddie Mac. Lehman Holdings filed a motion in the Delaware court seeking to stay or dismiss the declaratory judgment action. On August 24, 2016, the Court ruled that it would exercise its discretion to decline jurisdiction over the action and granted Lehman Holdings’ motion to dismiss. On February 3, 2016, Lehman Holdings filed an adversary proceeding against approximately 150 mortgage loan originators, including SecurityNational Mortgage, in the U.S. Bankruptcy Court of the Southern District of New York seeking a declaration of rights similar in nature to the declaratory judgment that SecurityNational Mortgage sought in its Delaware lawsuit, and for damages relating to the alleged obligations of the defendants under the indemnification provisions of the alleged agreements, in amounts to be determined at trial, including interest, attorneys’ fees and costs incurred by Lehman Holdings in enforcing the obligations of the defendants. No response was required to be filed relative to the Complaint or the Amended Complaint dated March 7, 2016. A Case Management Order was entered on November 1, 2016. On December 27, 2016, pursuant to the Case Management Order, Lehman Holdings filed a Second Amended Complaint against SecurityNational Mortgage, which eliminates the declaratory judgment claim but retains a similar claim for damages as in the Complaint. The case is presently in a motion period. Many of the defendants, including SecurityNational Mortgage, filed a joint motion in the case asserting that the Bankruptcy Court does not have subject matter jurisdiction concerning the matter and that venue is improper. Lehman Holdings’ response memorandum was filed on May 31, 2017 and a reply memorandum of the defendants filing the motion was filed on July 14, 2017. A hearing date for the motion has not been set. No Answer to the Second Amended Complaint is required to be filed by SecurityNational Mortgage pending further order of the Court. SecurityNational Mortgage denies that it has any liability to Lehman Holdings and intends to vigorously protect and defend its position. Other Contingencies and Commitments The Company has entered into commitments to fund construction and land development loans and has also provided financing for land acquisition and development. As of September 30, 2017, the Company’s commitments were approximately $69,601,000 for these loans, of which $41,307,000 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 and interest for these loans and the interest rate is generally fixed 5.50% to 8.00% per annum. Maturities range between six and eighteen 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. 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. |
12) Mortgage Servicing Rights
12) Mortgage Servicing Rights | 9 Months Ended |
Sep. 30, 2017 | |
Notes | |
12) Mortgage Servicing Rights | 12) Mortgage Servicing Rights The Company initially records these Mortgage Servicing Rights (“MSRs”) at fair value as discussed in Note 8. 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 which estimates the proportion to, and over the period of the estimated future net servicing income of the underlying financial assets. 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 is a summary of the MSR activity for the periods presented. As of September 30 2017 As of December 31 2016 Amortized cost: Balance before valuation allowance at beginning of year $ 18,872,362 $ 12,679,755 MSR additions resulting from loan sales 4,057,974 8,603,154 Amortization (1) (2,533,768) (2,410,547) Application of valuation allowance to write down MSRs with other than temporary impairment - - Balance before valuation allowance at end of period $ 20,396,568 $ 18,872,362 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 $ 20,396,568 $ 18,872,362 Estimated fair value of MSRs at end of period $ 26,785,380 $ 25,496,832 (1) Included in other expenses on the condensed consolidated statements of earnings The following table summarizes the Company’s estimate of future amortization of its existing MSRs carried at amortized cost: Estimated MSR Amortization 2017 $ 162,284 2018 3,372,381 2019 3,372,381 2020 3,372,381 2021 3,372,381 Thereafter 6,744,760 Total $ 20,396,568 The Company collected the following contractual servicing fee income and late fee income as reported in other revenues on the condensed consolidated statement of earnings: Three Months Ended September 30 Nine Months Ended September 30 2017 2016 2017 2016 Contractual servicing fees $ 1,848,831 $ 1,496,365 $ 5,359,425 $ 4,024,720 Late fees 99,077 67,032 266,218 189,237 Total $ 1,947,908 $ 1,563,397 $ 5,625,643 $ 4,213,957 The following is a summary of the unpaid principal balances (“UPB”) of the servicing portfolio for the periods presented: As of September 30 2017 As of December 31 2016 Servicing UPB $ 3,003,608,494 $ 2,720,441,340 The following key assumptions were used in determining MSR value: Prepayment Speeds Average Life (Years) Discount Rate September 30, 2017 3.59 6.2 10.01 December 31, 2016 3.77 6.52 10.01 |
13) Acquisitions
13) Acquisitions | 9 Months Ended |
Sep. 30, 2017 | |
Notes | |
13) Acquisitions | 13) Acquisitions Acquisition of First Guaranty Insurance Company On July 11, 2016, the Company, through its wholly owned subsidiary Security National Life, completed the stock purchase transaction with the shareholders of Reppond Holding Corporation, an Arkansas corporation ("Reppond Holding") and sole shareholder of First Guaranty Insurance Company, a Louisiana domestic stock legal reserve life insurance company ("First Guaranty"), to purchase all the outstanding shares of common stock of Reppond Holding. Under the terms of the stock purchase agreement, dated February 17, 2016, between Security National Life and Reppond Holding, which was later amended on March 4 and 17, 2016, Security National Life paid a total of $6,753,000 at the closing in consideration for the purchase of all the outstanding shares of stock of Reppond Holding from its shareholders. The estimated fair values of the assets acquired and the liabilities assumed at the date of acquisition were as follows: Fixed maturity securities, held to maturity $ 43,878,084 Equity securities, available for sale 646,335 Mortgage loans held for investment 4,528,582 Real estate held for investment 528,947 Policy loans 145,953 Short-term investments 5,358,403 Accrued investment income 585,985 Cash and cash equivalents 2,424,480 Receivables 73,347 Property and equipment 21,083 Deferred tax asset 1,190,862 Receivable from reinsurers 34,948 Other 57,768 Total assets acquired 59,474,777 Future policy benefits and unpaid claims (52,648,838) Accounts payable (6,953) Other liabilities and accrued expenses (65,986) Total liabilities assumed (52,721,777) Fair value of net assets acquired/consideration paid $ 6,753,000 The estimated fair value of the fixed maturity securities and the equity securities is based on unadjusted quoted prices for identical assets in an active market. These types of financial assets are considered Level 1 under the fair value hierarchy. The estimated fair value of future policy benefits and unpaid claims is based on assumptions of the future value of the business acquired. Based on the unobservable nature of certain of these assumptions, the valuation for these financial liabilities is considered to be Level 3 under the fair value hierarchy. The Company determined that the estimated fair value of the remaining assets and liabilities acquired approximated their book values. The fair value of assets acquired and liabilities assumed were subject to adjustment during the first twelve months after the acquisition date if additional information became available to indicate a more accurate or appropriate value for an asset or liability. No adjustments were made. The following unaudited pro forma information has been prepared to present the results of operations of the Company assuming the acquisition of First Guaranty had occurred at the beginning of the three and nine-month periods ended September 30, 2016. This pro forma information is supplemental and does not necessarily present the operations of the Company that would have occurred had the acquisition occurred on those dates and may not reflect the operations that will occur in the future: For the Nine Months Ended September 30 (unaudited) 2016 Total revenues $ 234,629,101 Net earnings $ 11,472,978 Net earnings per Class A equivalent common share $ 0.78 Net earnings per Class A equivalent common share assuming dilution $ 0.76 The pro forma results for the three and nine-month periods ended September 30, 2017 and for the three-month period ended September 30, 2016 are not included in the table above because the operating results for the First Guaranty acquisition were included in the CompanyÂ’s condensed consolidated statements of earnings for these periods. |
14) Income Taxes
14) Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Notes | |
14) Income Taxes | 14) Income Taxes The CompanyÂ’s overall effective tax rate for the three months ended September 30, 2017 and 2016 was 3.6% and 36.4%, respectively, which resulted in a provision for income taxes of $41,000 41179 2390525 2587384 6892544 |
1) Basis of Presentation_ Accou
1) Basis of Presentation: Accounting Policy (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Policies | |
Accounting Policy | The accompanying unaudited condensed 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, 2016, included in the CompanyÂ’s Annual Report on Form 10-K/A (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 nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. The presentation of certain amounts in the prior year have been reclassified to conform to the 2017 presentation. The Company reclassified certain amounts from other assets to receivables, from receivables to other liabilities, from other assets to other liabilities, from equity securities to other investments, from other liabilities to mortgage loans held for investment, from net investment income to mortgage fee income, and from mortgage fee income to net investment income. These reclassifications had no impact on net earnings or stockholdersÂ’ equity. Additionally, see the discussion regarding correction of errors in Notes 21 and 22 included in the Company's Form 10-K/A for the year ended December 31, 2016. |
1) Basis of Presentation_ Use o
1) Basis of Presentation: Use of Estimates Policy (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
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. Material estimates that are particularly susceptible to significant changes in the near term are those used in determining the value of derivative assets and liabilities; those used in determining deferred acquisition costs and the value of business acquired; those used in determining the value of mortgage loans foreclosed to real estate held for investment; 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 allowances for loan losses for mortgage loans held for investment; 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 Pronounc24
2) Recent Accounting Pronouncements: New Accounting Pronouncements, Policy (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Policies | |
New Accounting Pronouncements, Policy | ASU No. 2017-01: “Business Combinations (Topic 805): Clarifying the Definition of a Business” – Issued in January 2017, ASU 2017-01 intends to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Under the current implementation guidance in Topic 805, there are three elements of a business: inputs, processes, and outputs. While an integrated set of assets and activities, collectively referred to as a “set,” that is a business usually has outputs, outputs are not required to be present. ASU 2017-01 provides a screen to determine when a set is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. ASU 2017-01 will be effective for the Company on January 1, 2018. While the Company’s acquisitions have historically been classified as either business combinations or asset acquisitions, certain acquisitions that were classified as business combinations by the Company likely would have been considered asset acquisitions under the new standard. As a result, transaction costs are more likely to be capitalized since the Company expects some of its future acquisitions to be classified as asset acquisitions under this new standard. In addition, goodwill that was previously allocated to businesses that were sold or held for sale will no longer be allocated and written off upon sale if future sales were deemed to be sales of assets and not businesses. ASU No. 2016-13: “Financial Instruments – Credit Losses (Topic 326)” – Issued in June 2016, ASU 2016-13 amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in current generally accepted accounting principles (“GAAP”) and, instead, requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available for sale debt securities, credit losses should be measured in a manner similar to current GAAP, however Topic 326 will require that credit losses be presented as an allowance rather than as a write-down. The new authoritative guidance is effective for interim and annual periods beginning after December 15, 2019. 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 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, which is not expected to be material to the Company’s results of operations but will have an effect on the balance sheet presentation for leased assets and obligations. 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 Company holds equity securities classified as available for sale securities that are currently measured at fair value with changes in fair value recognized through other comprehensive income. Upon adoption of ASU 2016-01 the Company will be required to recognize changes in the fair value of these equity securities through earnings, thus increasing the volatility of the Company’s earnings. However, adoption of this standard will not significantly affect the Company’s comprehensive income or stockholders’ equity. This new authoritative guidance is effective for interim and annual periods beginning after December 15, 2017, with the cumulative effect of the adoption made to the balance sheet as of the date of adoption. Thus, the adoption will result in a reclassification of the related accumulated net unrealized gains (losses) currently included in accumulated other comprehensive income to retained earnings. See Note 3 for details regarding the Company’s equity securities currently classified as available for sale. The Company will adopt this standard beginning January 1, 2018. 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”. ASU 2014-09 clarifies the principles for recognizing revenue in order to improve comparability of revenue recognition practices across entities and industries. ASU 2014-09 provides guidance intended to assist in the identification of contracts with customers and separate performance obligations within those contracts, the determination and allocation of the transaction price to those identified performance obligations and the recognition of revenue when a performance obligation has been satisfied. ASU 2014-09 also requires disclosures regarding the nature, amount, timing, and uncertainty of revenues and cash flows from contracts with customers. Insurance contracts are excluded from the scope of this new guidance. Upon adoption, ASU 2014-09 provides for transition through either a full retrospective approach requiring the restatement of all presented prior periods or a modified retrospective approach, which allows the new recognition standard to be applied to only those contracts that are not completed at the date of transition. If the modified retrospective approach is adopted, a cumulative effect adjustment to retained earnings is performed with additional disclosures required including the amount by which each line item is affected by the transition as compared to the guidance in effect before adoption and an explanation of the reasons for significant changes in these amounts. The Company intends to adopt ASU 2014-09 using the modified retrospective method. The Company does not expect to record a cumulative effect adjustment to its beginning retained earnings as a result of adoption of ASU 2014-09. The Company’s revenues from contracts with customers that are subject to ASU 2014-09 include revenues on mortuary and cemetery contracts. The recognition and measurement of these items is not expected to change as a result of the Company’s adoption of ASU 2014-09 and thus the Company does not expect that the adoption of ASU 2014-09 will significantly impact the Company’s results of operations or financial position but is still in the process of evaluating the final impact, including the potential impact on disclosures of contracts with customers. The new authoritative guidance is effective for interim and annual periods beginning after December 15, 2017. The Company will adopt this standard beginning January 1, 2018. 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) | 9 Months Ended |
Sep. 30, 2017 | |
AsOfSeptember302017Member | |
Held-to-maturity Securities | Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value September 30, 2017 Fixed maturity securities held to maturity carried at amortized cost: Bonds: U.S. Treasury securities and obligations of U.S. Government agencies $ 54,279,156 $ 237,071 $ (226,543) $ 54,289,684 Obligations of states and political subdivisions 5,865,790 124,685 (77,272) 5,913,203 Corporate securities including public utilities 160,278,125 14,088,157 (1,285,361) 173,080,921 Mortgage-backed securities 9,764,566 253,573 (171,423) 9,846,716 Redeemable preferred stock 623,635 53,403 - 677,038 Total fixed maturity securities held to maturity $ 230,811,272 $ 14,756,889 $ (1,760,599) $ 243,807,562 Equity securities available for sale at estimated fair value: Common stock: Industrial, miscellaneous and all other $ 6,310,307 $ 467,132 $ (819,951) $ 5,957,488 Total equity securities available for sale at estimated fair value $ 6,310,307 $ 467,132 $ (819,951) $ 5,957,488 Mortgage loans held for investment at amortized cost: Residential $ 65,759,761 Residential construction 41,306,722 Commercial 42,923,761 Less: Unamortized deferred loan fees, net (637,735) Less: Allowance for loan losses (2,051,818) Total mortgage loans held for investment $ 147,300,691 Real estate held for investment net of accumulated depreciation: Residential $ 69,469,220 Commercial 81,099,778 Total real estate held for investment $ 150,568,998 Policy loans and other investments at amortized cost: Policy loans $ 6,677,924 Insurance assignments 33,340,431 Federal Home Loan Bank stock 689,400 Other investments 2,923,681 Less: Allowance for doubtful accounts (1,142,287) Total policy loans and other investments $ 42,489,149 Short-term investments at amortized cost $ 17,830,990 Accrued investment income $ 3,391,688 |
AsOfDecember312016Member | |
Held-to-maturity Securities | Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value December 31, 2016 Fixed maturity securities held to maturity carried at amortized cost: Bonds: U.S. Treasury securities and obligations of U.S. Government agencies $ 4,475,065 $ 249,028 $ (66,111) $ 4,657,982 Obligations of states and political subdivisions 6,017,225 153,514 (133,249) 6,037,490 Corporate securities including public utilities 164,375,636 10,440,989 (3,727,013) 171,089,612 Mortgage-backed securities 9,488,083 221,400 (280,871) 9,428,612 Redeemable preferred stock 623,635 13,418 - 637,053 Total fixed maturity securities held to maturity $ 184,979,644 $ 11,078,349 $ (4,207,244) $ 191,850,749 Equity securities available for sale at estimated fair value: Common stock: Industrial, miscellaneous and all other $ 10,323,238 $ 447,110 $ (859,092) $ 9,911,256 Total securities available for sale carried at estimated fair value $ 10,323,238 $ 447,110 $ (859,092) $ 9,911,256 Mortgage loans held for investment at amortized cost: Residential $ 58,593,622 Residential construction 40,800,117 Commercial 51,536,622 Less: Unamortized deferred loan fees, net (190,846) Less: Allowance for loan losses (1,748,783) Total mortgage loans held for investment $ 148,990,732 Real estate held for investment net of accumulated depreciation: Residential $ 76,191,985 Commercial 68,973,936 Total real estate held for investment $ 145,165,921 Policy loans and other investments at amortized cost: Policy loans $ 6,694,148 Insurance assignments 33,548,079 Promissory notes 48,797 Federal Home Loan Bank stock 662,100 Other investments 1,765,752 Less: Allowance for doubtful accounts (1,119,630) Total policy loans and other investments $ 41,599,246 Short-term investments at amortized cost $ 27,560,040 Accrued investment income $ 2,972,596 |
3) Investments_ Schedule of Unr
3) Investments: Schedule of Unrealized Loss on Investments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fixed Maturities | |
Schedule of Unrealized Loss on Investments | Unrealized Losses for Less than Twelve Months Fair Value Unrealized Losses for More than Twelve Months Fair Value Total Unrealized Loss Fair Value At September 30, 2017 U.S. Treasury Securities and Obligations of U.S. Government Agencies $ 182,493 $ 51,456,444 $ 44,050 $ 851,779 $ 226,543 $ 52,308,223 Obligations of states and political subdivisions 18,357 2,486,400 58,915 1,651,253 77,272 4,137,653 Corporate securities 286,166 16,526,010 999,195 10,820,005 1,285,361 27,346,015 Mortgage-backed securities 68,972 2,026,033 102,451 1,156,803 171,423 3,182,836 Total unrealized losses $ 555,988 $ 72,494,887 $ 1,204,611 $ 14,479,840 $ 1,760,599 $ 86,974,727 At December 31, 2016 U.S. Treasury Securities and Obligations of U.S. Government Agencies $ 66,111 $ 1,342,088 $ - $ - $ 66,111 $ 1,342,088 Obligations of states and political subdivisions 133,249 3,686,856 - - 133,249 3,686,856 Corporate securities 1,728,312 41,796,016 1,998,701 12,969,135 3,727,013 54,765,151 Mortgage-backed securities 176,715 4,176,089 104,156 940,278 280,871 5,116,367 Total unrealized losses $ 2,104,387 $ 51,001,049 $ 2,102,857 $ 13,909,413 $ 4,207,244 $ 64,910,462 |
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 September 30, 2017 Industrial, miscellaneous and all other $ 150,581 108 $ 669,370 92 $ 819,951 Total unrealized losses $ 150,581 108 $ 669,370 92 $ 819,951 Fair Value $ 988,159 $ 1,444,994 $ 2,433,153 At December 31, 2016 Industrial, miscellaneous and all other $ 215,563 124 $ 643,529 104 $ 859,092 Total unrealized losses $ 215,563 124 $ 643,529 104 $ 859,092 Fair Value $ 2,063,144 $ 1,685,874 $ 3,749,018 |
3) Investments_ Investments Cla
3) Investments: Investments Classified by Contractual Maturity Date (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Held-to-maturity Securities | |
Investments Classified by Contractual Maturity Date | Amortized Cost Estimated Fair Value Held to Maturity: Due in 2017 $ 1,205,533 $ 1,208,929 Due in 2018 through 2021 77,063,707 78,846,158 Due in 2022 through 2026 54,265,268 56,731,089 Due after 2026 87,888,563 96,497,632 Mortgage-backed securities 9,764,566 9,846,716 Redeemable preferred stock 623,635 677,038 Total held to maturity $ 230,811,272 $ 243,807,562 |
3) Investments_ Gain (Loss) on
3) Investments: Gain (Loss) on Investments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Gain (Loss) on Investments | Three Months Ended September 30 Nine Months Ended September 30 2017 2016 2017 2016 Fixed maturity securities held to maturity: Gross realized gains $ 110,529 $ 65,179 $ 163,950 $ 259,635 Gross realized losses (651,754) (4,527) (686,819) (7,405) Other than temporary impairments (100,000) (30,000) (418,366) (90,000) Equity securities available for sale: Gross realized gains 25,898 36,751 132,350 176,331 Gross realized losses (26) (4,544) (58,464) (37,146) Other than temporary impairments (63,375) - (63,375) (43,630) Other assets: Gross realized gains 225,022 191,992 2,006,721 468,675 Gross realized losses (29,335) (324,020) (844,672) (680,794) Total $ (483,041) $ (69,169) $ 231,325 $ 45,666 |
3) Investments_ Schedule of Maj
3) Investments: Schedule of Major categories of net investment income (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Schedule of Major categories of net investment income | Three Months Ended September 30 Nine Months Ended September 30 2017 2016 2017 2016 Fixed maturity securities $ 2,692,586 $ 2,410,641 $ 7,475,156 $ 6,472,847 Equity securities 66,320 78,402 209,517 208,696 Mortgage loans held for investment 2,973,349 2,830,853 8,803,257 8,238,249 Real estate held for investment 2,818,672 2,736,301 8,540,756 8,162,574 Policy loans 195,098 205,537 621,854 558,778 Insurance assignments 3,234,520 2,952,170 9,943,561 8,915,654 Other investments 16,051 - 36,041 13,962 Short-term investments 109,939 20,978 311,989 66,480 Gross investment income 12,106,535 11,234,882 35,942,131 32,637,240 Investment expenses (3,745,069) (3,145,025) (10,383,018) (9,152,960) Net investment income $ 8,361,466 $ 8,089,857 $ 25,559,113 $ 23,484,280 |
3) Investments_ Commercial Real
3) Investments: Commercial Real Estate Investment (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Commercial Real Estate Investment | Net Ending Balance Total Square Footage September 30 December 31 September 30 December 31 2017 2016 2017 2016 Arizona $ 4,000 (1) $ 450,538 (1) - 16,270 Arkansas 97,219 100,369 3,200 3,200 Kansas 11,993,029 12,450,297 222,679 222,679 Louisiana 499,573 518,700 7,063 7,063 Mississippi 3,748,324 3,818,985 33,821 33,821 New Mexico 7,000 (1) 7,000 (1) - - Texas 3,728,960 3,734,974 23,470 23,470 Utah 61,021,673 (2) 47,893,073 (2) 433,244 433,244 $ 81,099,778 $ 68,973,936 723,477 739,747 (1) Includes undeveloped land (2) Includes 53rd Center completed in July 2017 |
3) Investments_ Residential Rea
3) Investments: Residential Real Estate Investment (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Residential Real Estate Investment | Net Ending Balance September 30 December 31 2017 2016 Arizona $ 217,516 $ 742,259 California 5,663,871 5,848,389 Colorado - 364,489 Florida 7,311,913 8,327,355 Hawaii 712,286 - Ohio 46,658 46,658 Oklahoma 17,500 - Texas 511,486 1,091,188 Utah 54,701,809 59,485,466 Washington 286,181 286,181 $ 69,469,220 $ 76,191,985 |
3) Investments_ Schedule of All
3) Investments: Schedule of Allowance for loan losses as a contra-asset account (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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 September 30, 2017 Allowance for credit losses: Beginning balance - January 1, 2017 $ 187,129 $ 1,461,540 $ 100,114 $ 1,748,783 Charge-offs - (49,775) (64,894) (114,669) Provision - 417,704 - 417,704 Ending balance - September 30, 2017 $ 187,129 $ 1,829,469 $ 35,220 $ 2,051,818 Ending balance: individually evaluated for impairment $ - $ 411,172 $ - $ 411,172 Ending balance: collectively evaluated for impairment $ 187,129 $ 1,418,297 $ 35,220 $ 1,640,646 Mortgage loans: Ending balance $ 42,923,761 $ 65,759,761 $ 41,306,722 $ 149,990,244 Ending balance: individually evaluated for impairment $ 203,806 $ 5,425,757 $ - $ 5,629,563 Ending balance: collectively evaluated for impairment $ 42,719,955 $ 60,334,004 $ 41,306,722 $ 144,360,681 December 31, 2016 Allowance for credit losses: Beginning balance - January 1, 2016 $ 187,129 $ 1,560,877 $ 100,114 $ 1,848,120 Charge-offs - (420,135) - (420,135) Provision - 320,798 - 320,798 Ending balance - December 31, 2016 $ 187,129 $ 1,461,540 $ 100,114 $ 1,748,783 Ending balance: individually evaluated for impairment $ - $ 374,501 $ - $ 374,501 Ending balance: collectively evaluated for impairment $ 187,129 $ 1,087,039 $ 100,114 $ 1,374,282 Mortgage loans: Ending balance $ 51,536,622 $ 58,593,622 $ 40,800,117 $ 150,930,361 Ending balance: individually evaluated for impairment $ 202,992 $ 2,916,538 $ 64,895 $ 3,184,425 Ending balance: collectively evaluated for impairment $ 51,333,630 $ 55,677,084 $ 40,735,222 $ 147,745,936 |
3) Investments_ Schedule of agi
3) Investments: Schedule of aging of mortgage loans (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Schedule of aging of mortgage loans | Age Analysis of Mortgage Loans Held for Investment 30-59 Days Past Due 60-89 Days Past Due Greater Than 90 Days (1) In Process of Foreclosure (1) Total Past Due Current Total Mortgage Loans Allowance for Loan Losses Unamortized deferred loan fees, net Net Mortgage Loans September 30, 2017 Commercial $ 513,218 $ - $ - $ 203,806 $ 717,024 $ 42,206,737 $ 42,923,761 $ (187,129) $ (229,603) $ 42,507,029 Residential 22,277 1,236,721 2,200,206 3,225,551 6,684,755 59,075,006 65,759,761 (1,829,469) (21,578) 63,908,714 Residential Construction - - - - - 41,306,722 41,306,722 (35,220) (386,554) 40,884,948 Total $ 535,495 $ 1,236,721 $ 2,200,206 $ 3,429,357 $ 7,401,779 $ 142,588,465 $ 149,990,244 $ (2,051,818) $ (637,735) $ 147,300,691 December 31, 2016 Commercial $ - $ - $ - $ 202,992 $ 202,992 $ 51,333,630 $ 51,536,622 $ (187,129) $ (155,725) $ 51,193,768 Residential 964,960 996,779 1,290,355 1,626,183 4,878,277 53,715,345 58,593,622 (1,461,540) (35,121) 57,096,961 Residential Construction - - 64,895 - 64,895 40,735,222 40,800,117 (100,114) - 40,700,003 Total $ 964,960 $ 996,779 $ 1,355,250 $ 1,829,175 $ 5,146,164 $ 145,784,197 $ 150,930,361 $ (1,748,783) $ (190,846) $ 148,990,732 (1) Interest income is not recognized on loans past due greater than 90 days or in foreclosure. |
3) Investments_ Schedule of Imp
3) Investments: Schedule of Impaired Mortgage Loans (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Schedule of Impaired Mortgage Loans | Impaired Loans Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized September 30, 2017 With no related allowance recorded: Commercial $ 203,806 $ 203,806 $ - $ 456,524 $ - Residential 3,872,587 3,872,587 - 3,281,980 - Residential construction - - - - - With an allowance recorded: Commercial $ - $ - $ - $ - $ - Residential 1,553,170 1,553,170 411,172 1,287,394 - Residential construction - - - - - Total: Commercial $ 203,806 $ 203,806 $ - $ 456,524 $ - Residential 5,425,757 5,425,757 411,172 4,569,374 - Residential construction - - - - - December 31, 2016 With no related allowance recorded: Commercial $ 202,992 $ 202,992 $ - $ 202,992 $ - Residential - - - - - Residential construction 64,895 64,895 - 79,082 - With an allowance recorded: Commercial $ - $ - $ - $ - $ - Residential 2,916,538 2,916,538 374,501 3,001,850 - Residential construction - - - - - Total: Commercial $ 202,992 $ 202,992 $ - $ 202,992 $ - Residential 2,916,538 2,916,538 374,501 3,001,850 - Residential construction 64,895 64,895 - 79,082 - |
3) Investments_ Schedule Of Cre
3) Investments: Schedule Of Credit Risk Of Mortgage Loans Based On Performance Status (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Schedule Of Credit Risk Of Mortgage Loans Based On Performance Status: | Mortgage Loans Held for Investment Credit Exposure Credit Risk Profile Based on Payment Activity Commercial Residential Residential Construction Total September 30, 2017 December 31, 2016 September 30, 2017 December 31, 2016 September 30, 2017 December 31, 2016 September 30, 2017 December 31, 2016 Performing $ 42,719,955 $ 51,333,630 $ 60,334,004 $ 55,677,084 $ 41,306,722 $ 40,735,222 $ 144,360,681 $ 147,745,936 Non-performing 203,806 202,992 5,425,757 2,916,538 - 64,895 5,629,563 3,184,425 Total $ 42,923,761 $ 51,536,622 $ 65,759,761 $ 58,593,622 $ 41,306,722 $ 40,800,117 $ 149,990,244 $ 150,930,361 |
3) Investments_ Schedule of Mor
3) Investments: Schedule of Mortgage loans on a nonaccrual status (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Schedule of Mortgage loans on a nonaccrual status | Mortgage Loans on Non-Accrual Status As of September 30 2017 As of December 31 2016 Commercial $ 203,806 $ 202,992 Residential 5,425,757 2,916,538 Residential construction - 64,895 Total $ 5,629,563 $ 3,184,425 |
4) Loans Held For Sale_ Aggrega
4) Loans Held For Sale: Aggregate fair value - Loans Held for Sale (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Aggregate fair value - Loans Held for Sale | As of September 30 2017 Aggregate fair value $ 166,990,187 UPB 161,165,793 Unrealized gain 5,824,394 |
4) Loans Held For Sale_ Schedul
4) Loans Held For Sale: Schedule of Mortgage Fee Income for Loans Held for Sale (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Schedule of Mortgage Fee Income for Loans Held for Sale | Three Months Ended September 30 Nine Months Ended September 30 2017 2016 2017 2016 Loan fees $ 15,203,107 $ 11,988,959 $ 33,291,947 $ 33,071,486 Interest income 2,097,249 2,204,286 5,679,868 6,022,796 Secondary gains 28,550,295 41,346,576 87,165,736 108,667,085 Change in fair value of loan commitments (4,833,268) (1,505,820) (3,677,554) 1,459,568 Change in fair value of loans held for sale 1,061,917 - 1,061,917 - Provision for loan loss reserve (481,727) (838,238) (1,435,180) (2,253,689) Mortgage fee income $ 41,597,573 $ 53,195,763 $ 122,086,734 $ 146,967,246 |
4) Loans Held For Sale_ Sched39
4) Loans Held For Sale: Schedule of loan loss reserve which is included in other liabilities and accrued expenses (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Schedule of loan loss reserve which is included in other liabilities and accrued expenses | As of September 30 2017 As of December 31 2016 Balance, beginning of period $ 627,733 $ 2,805,900 Provision on current loan originations (1) 1,435,180 2,988,754 Additional provision for loan loss reserve - 1,700,000 Charge-offs, net of recaptured amounts 108,175 (6,866,921) Balance, end of period $ 2,171,088 $ 627,733 (1) Included in Mortgage fee income |
5) Stock-based Compensation_ Sc
5) Stock-based Compensation: Schedule of stock inventive plan changes (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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, 2016 741,973 $ 4.33 556,298 $ 4.61 Granted - - Exercised - (103,402) 1.31 Cancelled - (24,227) 1.31 Outstanding at September 30, 2017 741,973 $ 4.33 428,669 $ 5.59 As of September 30, 2017: Options exercisable 706,854 $ 4.21 407,669 $ 5.50 As of September 30, 2017: Available options for future grant 525,682 227,750 Weighted average contractual term of options outstanding at September 30, 2017 6.62 years 2.63 years Weighted average contractual term of options exercisable at September 30, 2017 6.50 years 2.55 years Aggregated intrinsic value of options outstanding at September 30, 2017 (1) $941,567 $151,012 Aggregated intrinsic value of options exercisable at September 30, 2017 (1) $941,311 $151,012 (1) The Company used a stock price of $5.10 as of September 30, 2017 to derive intrinsic value. A summary of the status of the CompanyÂ’s stock compensation plans as of September 30, 2016, and the changes during the nine months ended September 30, 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 (32,417) 2.38 - Cancelled - - Outstanding at September 30, 2016 585,844 $ 3.97 577,436 $ 3.54 As of September 30, 2016: Options exercisable 550,792 $ 3.82 551,186 $ 3.38 As of September 30, 2016: Available options for future grant 397,342 57,750 Weighted average contractual term of options outstanding at September 30, 2016 6.99 years 2.00 years Weighted average contractual term of options exercisable at September 30, 2016 6.86 years 1.90 years Aggregated intrinsic value of options outstanding at September 30, 2016 (1) $1,179,541 $1,460,167 Aggregated intrinsic value of options exercisable at September 30, 2016 (1) $1,179,541 $1,460,167 (1) The Company used a stock price of $5.86 as of September 30, 2016 to derive intrinsic value. |
6) Earnings Per Share_ Schedule
6) Earnings Per Share: Schedule of Earnings Per Share, Basic and Diluted (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Schedule of Earnings Per Share, Basic and Diluted | Three Months Ended September 30 Nine Months Ended September 30 2017 2016 2017 2016 Numerator: Net earnings $ 1,096,838 $ 4,183,005 $ 5,442,702 $ 11,737,952 Denominator: Basic weighted-average shares outstanding 15,256,857 14,830,078 15,159,569 14,744,779 Effect of dilutive securities: Employee stock options 285,803 439,535 315,257 421,266 Diluted weighted-average shares outstanding 15,542,660 15,269,613 15,474,826 15,166,045 Basic net earnings per share $0.07 $0.28 $0.36 $0.80 Diluted net earnings per share $0.07 $0.27 $0.35 $0.77 |
7) Business Segments_ Schedule
7) Business Segments: Schedule of Revenues and Expenses by Reportable Segment (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Schedule of Revenues and Expenses by Reportable Segment | Life Insurance Cemetery/ Mortuary Mortgage Intercompany Eliminations Consolidated For the Three Months Ended September 30, 2017 Revenues from external customers $ 25,229,759 $ 2,988,137 $ 43,753,955 $ - $ 71,971,851 Intersegment revenues 3,333,593 116,290 86,580 (3,536,463) - Segment profit before income taxes 522,574 237,108 378,335 - 1,138,017 For the Three Months Ended September 30, 2016 Revenues from external customers $ 24,972,397 $ 2,900,917 $ 55,075,343 $ - $ 82,948,657 Intersegment revenues 3,318,369 107,745 79,164 (3,505,278) - Segment profit before income taxes 2,139,702 54,891 4,378,937 - 6,573,530 For the Nine Months Ended September 30, 2017 Revenues from external customers $ 77,112,117 $ 9,907,037 $ 128,953,552 $ - $ 215,972,706 Intersegment revenues 9,299,671 338,745 268,764 (9,907,180) - Segment profit before income taxes 4,824,654 1,331,896 1,873,536 - 8,030,086 Identifiable Assets 853,298,860 94,716,098 190,202,990 (133,079,207) 1,005,138,741 Goodwill 2,765,570 - - - 2,765,570 Total Assets 856,064,430 94,716,098 190,202,990 (133,079,207) 1,007,904,311 For the Nine Months Ended September 30, 2016 Revenues from external customers $ 70,616,968 $ 10,045,384 $ 151,829,880 $ - $ 232,492,232 Intersegment revenues 9,780,803 616,532 239,503 (10,636,838) - Segment profit before income taxes 5,785,464 1,283,553 11,561,479 - 18,630,496 Identifiable Assets 797,486,493 95,414,964 194,469,525 (138,809,339) 948,561,643 Goodwill 2,765,570 - - - 2,765,570 Total Assets 800,252,063 95,414,964 194,469,525 (138,809,339) 951,327,213 |
8)_ Fair Value of Financial I43
8): Fair Value of Financial Instruments: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
AsOfSeptember302017Member | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets accounted for at fair value on a recurring basis Common stock $ 5,957,488 $ 5,957,488 $ - $ - Total equity securities available for sale $ 5,957,488 $ 5,957,488 $ - $ - Loans held for sale $ 166,990,187 $ - $ - $ 166,990,187 Restricted assets (1) 78,421 78,421 - - Cemetery perpetual care trust investments (1) 676,881 676,881 - - Derivatives - loan commitments (2) 3,140,704 - - 3,140,704 Total assets accounted for at fair value on a recurring basis $ 176,843,681 $ 6,712,790 $ - $ 170,130,891 Liabilities accounted for at fair value on a recurring basis Derivatives - bank loan interest rate swaps (3) $ (138) $ - $ - $ (138) - call options (4) (50,452) (50,452) - - - put options (4) (63,637) (63,637) - - - loan commitments (4) (8,926) - - (8,926) Total liabilities accounted for at fair value on a recurring basis $ (123,153) $ (114,089) $ - $ (9,064) (1) Excluding cash (2) Included in other assets on the condensed consolidated balance sheet (3) Included in bank and other loans payable on the condensed consolidated balance sheet (4) Included in other liabilities and accrued expenses on the condensed consolidated balance sheet |
AsOfDecember312016Member | |
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 $ 9,911,256 $ 9,911,256 $ - $ - Total equity securities available for sale $ 9,911,256 $ 9,911,256 $ - $ - Restricted assets (1) $ 736,603 $ 736,603 $ - $ - Cemetery perpetual care trust investments (1) 698,202 698,202 - - Derivatives - loan commitments (2) 6,911,544 - - 6,911,544 Total assets accounted for at fair value on a recurring basis $ 18,257,605 $ 11,346,061 $ - $ 6,911,544 Liabilities accounted for at fair value on a recurring basis Derivatives - bank loan interest rate swaps (3) $ (3,308) - - $ (3,308) - call options (4) (109,474) (109,474) - - - put options (4) (26,494) (26,494) - - - loan commitments (4) (102,212) - - (102,212) Total liabilities accounted for at fair value on a recurring basis $ (241,488) $ (135,968) $ - $ (105,520) (1) Excluding cash (2) Included in other assets on the condensed consolidated balance sheet (3) Included in bank and other loans payable on the condensed consolidated balance sheet (4) Included in other liabilities and accrued expenses on the condensed consolidated balance sheet |
8)_ Fair Value of Financial I44
8): Fair Value of Financial Instruments: Schedule of Changes in the consolidated balance sheet line items measured using level 3 inputs (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
AsOfSeptember302017Member | |
Schedule of Changes in the consolidated balance sheet line items measured using level 3 inputs | Net Loan Commitments Bank Loan Interest Rate Swaps Loans Held for Sale Balance - December 31, 2016 $ 6,809,332 $ (3,308) $ - Purchases 636,022,818 Sales (473,930,540) Total gains (losses): Included in earnings (1) (3,677,554) - 4,897,909 Included in other comprehensive income (2) - 3,170 - Balance - September 30, 2017 $ 3,131,778 $ (138) $ 166,990,187 (1) As a component of Mortgage fee income on the condensed consolidated statement of earnings (2) As a component of Unrealized gains on derivative instruments on the condensed consolidated statement of comprehensive income |
AsOfDecember312016Member | |
Schedule of Changes in the consolidated balance sheet line items measured using level 3 inputs | Net Loan Commitments Bank Loan Interest Rate Swaps Balance - December 31, 2015 $ 7,671,495 $ (13,947) Total gains (losses): Included in earnings (1) (862,163) - Included in other comprehensive income (2) - 10,639 Balance - December 31, 2016 $ 6,809,332 $ (3,308) (1) As a component of Mortgage fee income on the condensed consolidated statement of earnings (2) As a component of Unrealized gains on derivative instruments on the condensed consolidated statement of comprehensive income |
8)_ Fair Value of Financial I45
8): Fair Value of Financial Instruments: Schedule of Fair Value Measurements, Nonrecurring (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
AsOfSeptember302017Member | |
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 Impaired mortgage loans held for investment $ 5,218,392 $ - $ - $ 5,218,392 Mortgage servicing rights additions 4,057,974 - - 4,057,974 Total assets accounted for at fair value on a nonrecurring basis $ 9,276,366 $ - $ - $ 9,276,366 |
AsOfDecember312016Member | |
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 Impaired mortgage loans held for investment $ 2,809,925 $ - $ - $ 2,809,925 Mortgage servicing rights additions 8,603,154 - - 8,603,154 Real estate held for investment 2,347,820 - - 2,347,820 Total assets accounted for at fair value on a nonrecurring basis $ 13,760,899 $ - $ - $ 13,760,899 |
8)_ Fair Value of Financial I46
8): Fair Value of Financial Instruments: Schedule of Financial Instruments Carried at Other Than Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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 Fixed maturity securities held to maturity $ 230,811,272 $ - $ 243,807,562 $ - $ 243,807,562 Mortgage loans held for investment: Residential 63,908,714 - - 68,139,551 68,139,551 Residential construction 40,884,948 - - 40,884,948 40,884,948 Commercial 42,507,029 - - 44,223,823 44,223,823 Mortgage loans held for investment, net $ 147,300,691 $ - $ - $ 153,248,322 $ 153,248,322 Loans held for sale (at amortized costs) 34,905,719 - - 35,131,853 35,131,853 Policy loans 6,677,924 - - 6,677,924 6,677,924 Insurance assignments, net (1) 32,198,144 - - 32,198,144 32,198,144 Short-term investments 17,830,990 - 17,830,990 - 17,830,990 Mortgage servicing rights, net 20,396,568 - - 26,785,380 26,785,380 Liabilities Bank and other loans payable $ (182,769,531) $ - $ - $ (182,769,531) $ (182,769,531) Policyholder account balances (2) (48,200,442) - - (37,564,692) (37,564,692) Future policy benefits - annuities (2) (99,519,758) - - (100,851,101) (100,851,101) (1) Included in policy loans and other investments on the condensed consolidated balance sheet. (2) Included in future policy benefits and unpaid claims on the condensed consolidated balance sheet. 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, 2016: Carrying Value Level 1 Level 2 Level 3 Total Estimated Fair Value Assets Fixed maturity securities held to maturity $ 184,979,644 $ - $ 191,850,749 $ - $ 191,850,749 Mortgage loans held for investment: Residential 57,096,961 - - 61,357,393 61,357,393 Residential construction 40,700,003 - - 40,700,003 40,700,003 Commercial 51,193,768 - - 53,299,800 53,299,800 Mortgage loans held for investment, net $ 148,990,732 $ - $ - $ 155,357,196 $ 155,357,196 Loans held for sale 189,578,243 - - 192,289,854 192,289,854 Policy loans 6,694,148 - - 6,694,148 6,694,148 Insurance assignments, net (1) 32,477,246 - - 32,477,246 32,477,246 Short-term investments 27,560,040 - 27,560,040 - 27,560,040 Mortgage servicing rights, net 18,872,362 - - 25,496,832 25,496,832 Liabilities Bank and other loans payable $ (152,137,371) $ - $ - $ (152,137,371) $ (152,137,371) Policyholder account balances (2) (49,421,125) - - (38,530,031) (38,530,031) Future policy benefits - annuities (2) (99,388,662) - - (100,253,261) (100,253,261) (1) Included in policy loans and other investments on the condensed consolidated balance sheet. (2) Included in future policy benefits and unpaid claims on the condensed consolidated balance sheet. |
10) Derivative Commitments_ Sch
10) Derivative Commitments: Schedule of Derivative Assets at Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Schedule of Derivative Assets at Fair Value | Fair Values and Notional Values of Derivative Instruments September 30, 2017 December 31, 2016 Balance Sheet Location Notional Amount Asset Fair Value Liability Fair Value Notional Amount Asset Fair Value Liability Fair Value Derivatives not designated as hedging instruments: Loan commitments Other assets and Other liabilities $147,086,043 $3,140,704 $ 8,926 $191,757,193 $6,911,544 $102,212 Call options Other liabilities 1,473,050 -- 50,452 2,169,850 -- 109,474 Put options Other liabilities 2,593,300 -- 63,637 1,336,750 -- 26,494 Derivatives designated as fair value hedging instruments: Interest rate swaps Bank and other loans payable 43,940 -- 138 175,762 -- 3,308 Total $151,196,333 $3,140,704 $123,153 $195,439,555 $6,911,544 $241,488 |
10) Derivative Commitments_ S48
10) Derivative Commitments: Schedule of Gains and Losses on Derivatives (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Schedule of Gains and Losses on Derivatives | Net Amount Gain (Loss) Net Amount Gain (Loss) Three Months Ended September 30 Nine Months Ended September 30 Derivative Classification 2017 2016 2017 2016 Interest Rate Swaps Other comprehensive income $ 554 $ - $ 3,170 $ 5,541 Loan commitments Mortgage fee income $ (4,833,268) $ (1,505,820) $ (3,677,554) $ 1,459,568 Call and put options Realized gains on investments and other assets $ 27,734 $ 73,250 $ 216,561 $ 210,522 |
12) Mortgage Servicing Rights_
12) Mortgage Servicing Rights: Schedule of Mortgage Servicing Rights (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Schedule of Mortgage Servicing Rights | As of September 30 2017 As of December 31 2016 Amortized cost: Balance before valuation allowance at beginning of year $ 18,872,362 $ 12,679,755 MSR additions resulting from loan sales 4,057,974 8,603,154 Amortization (1) (2,533,768) (2,410,547) Application of valuation allowance to write down MSRs with other than temporary impairment - - Balance before valuation allowance at end of period $ 20,396,568 $ 18,872,362 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 $ 20,396,568 $ 18,872,362 Estimated fair value of MSRs at end of period $ 26,785,380 $ 25,496,832 (1) Included in other expenses on the condensed consolidated statements of earnings |
12) Mortgage Servicing Rights50
12) Mortgage Servicing Rights: Schedule of Finite-Lived Intangible Assets, Future Amortization Expense, Mortgage Servicing Rights (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense, Mortgage Servicing Rights | Estimated MSR Amortization 2017 $ 162,284 2018 3,372,381 2019 3,372,381 2020 3,372,381 2021 3,372,381 Thereafter 6,744,760 Total $ 20,396,568 |
12) Mortgage Servicing Rights51
12) Mortgage Servicing Rights: Schedule of Other Revenues (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Schedule of Other Revenues | Three Months Ended September 30 Nine Months Ended September 30 2017 2016 2017 2016 Contractual servicing fees $ 1,848,831 $ 1,496,365 $ 5,359,425 $ 4,024,720 Late fees 99,077 67,032 266,218 189,237 Total $ 1,947,908 $ 1,563,397 $ 5,625,643 $ 4,213,957 |
12) Mortgage Servicing Rights52
12) Mortgage Servicing Rights: Summary of Unpaid Principal Balances of the Servicing Portfolio (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Summary of Unpaid Principal Balances of the Servicing Portfolio | As of September 30 2017 As of December 31 2016 Servicing UPB $ 3,003,608,494 $ 2,720,441,340 |
12) Mortgage Servicing Rights53
12) Mortgage Servicing Rights: Assumptions used in determining MSR value (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Assumptions used in determining MSR value | Prepayment Speeds Average Life (Years) Discount Rate September 30, 2017 3.59 6.2 10.01 December 31, 2016 3.77 6.52 10.01 |
13) Acquisitions_ Estimated Fai
13) Acquisitions: Estimated Fair Values of Assets Acquired and Liabilities Assumed (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Estimated Fair Values of Assets Acquired and Liabilities Assumed | Fixed maturity securities, held to maturity $ 43,878,084 Equity securities, available for sale 646,335 Mortgage loans held for investment 4,528,582 Real estate held for investment 528,947 Policy loans 145,953 Short-term investments 5,358,403 Accrued investment income 585,985 Cash and cash equivalents 2,424,480 Receivables 73,347 Property and equipment 21,083 Deferred tax asset 1,190,862 Receivable from reinsurers 34,948 Other 57,768 Total assets acquired 59,474,777 Future policy benefits and unpaid claims (52,648,838) Accounts payable (6,953) Other liabilities and accrued expenses (65,986) Total liabilities assumed (52,721,777) Fair value of net assets acquired/consideration paid $ 6,753,000 |
13) Acquisitions_ Business Acqu
13) Acquisitions: Business Acquisition, Pro Forma Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Business Acquisition, Pro Forma Information | For the Nine Months Ended September 30 (unaudited) 2016 Total revenues $ 234,629,101 Net earnings $ 11,472,978 Net earnings per Class A equivalent common share $ 0.78 Net earnings per Class A equivalent common share assuming dilution $ 0.76 |
3) Investments_ Held-to-matur56
3) Investments: Held-to-maturity Securities (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
AmortizedCost | $ 230,811,272 | $ 184,979,644 |
Held-to-maturity Securities, Unrecognized Holding Gain | 14,756,889 | 11,078,349 |
Held-to-maturity Securities, Unrecognized Holding Loss | (1,760,599) | (4,207,244) |
Represents the monetary amount of HeldToMaturitySecuritiesEstimatedFairValue, as of the indicated date. | 243,807,562 | 191,850,749 |
Mortgage loans on real estate and construction | 147,300,691 | 148,990,732 |
Mortgage loans on real estate and construction, unamortized deferred loan fees, net | (637,735) | (190,846) |
Mortgage loans on real estate and construction, allowance for losses | (2,051,818) | (1,748,783) |
Real estate held for investment, net of depreciation | 150,568,998 | 145,165,921 |
Policy loans | 6,677,924 | 6,694,148 |
Insurance assignments | 33,340,431 | 33,548,079 |
Federal Home Loan Bank stock | 689,400 | 662,100 |
Other investments | 2,923,681 | 1,765,752 |
Allowance for doubtful accounts | (1,142,287) | (1,119,630) |
Total policy loans and other investments | 42,489,149 | 41,599,246 |
Short-term investments at amortized cost | 17,830,990 | 27,560,040 |
Accrued investment income | 3,391,688 | 2,972,596 |
Promissory notes | 48,797 | |
Residential Mortgage | ||
Mortgage loans on real estate and construction | 65,759,761 | 58,593,622 |
Real estate held for investment, net of depreciation | 69,469,220 | 76,191,985 |
Residential Construction | ||
Mortgage loans on real estate and construction | 41,306,722 | 40,800,117 |
Commercial Loan | ||
Mortgage loans on real estate and construction | 42,923,761 | 51,536,622 |
Real estate held for investment, net of depreciation | 81,099,778 | 68,973,936 |
US Treasury and Government | ||
AmortizedCost | 54,279,156 | 4,475,065 |
Held-to-maturity Securities, Unrecognized Holding Gain | 237,071 | 249,028 |
Held-to-maturity Securities, Unrecognized Holding Loss | (226,543) | (66,111) |
Represents the monetary amount of HeldToMaturitySecuritiesEstimatedFairValue, as of the indicated date. | 54,289,684 | 4,657,982 |
US States and Political Subdivisions Debt Securities | ||
AmortizedCost | 5,865,790 | 6,017,225 |
Held-to-maturity Securities, Unrecognized Holding Gain | 124,685 | 153,514 |
Held-to-maturity Securities, Unrecognized Holding Loss | (77,272) | (133,249) |
Represents the monetary amount of HeldToMaturitySecuritiesEstimatedFairValue, as of the indicated date. | 5,913,203 | 6,037,490 |
Corporate Debt Securities | ||
AmortizedCost | 160,278,125 | 164,375,636 |
Held-to-maturity Securities, Unrecognized Holding Gain | 14,088,157 | 10,440,989 |
Held-to-maturity Securities, Unrecognized Holding Loss | (1,285,361) | (3,727,013) |
Represents the monetary amount of HeldToMaturitySecuritiesEstimatedFairValue, as of the indicated date. | 173,080,921 | 171,089,612 |
Collateralized Mortgage Backed Securities | ||
AmortizedCost | 9,764,566 | 9,488,083 |
Held-to-maturity Securities, Unrecognized Holding Gain | 253,573 | 221,400 |
Held-to-maturity Securities, Unrecognized Holding Loss | (171,423) | (280,871) |
Represents the monetary amount of HeldToMaturitySecuritiesEstimatedFairValue, as of the indicated date. | 9,846,716 | 9,428,612 |
Redeemable Preferred Stock | ||
AmortizedCost | 623,635 | 623,635 |
Held-to-maturity Securities, Unrecognized Holding Gain | 53,403 | 13,418 |
Represents the monetary amount of HeldToMaturitySecuritiesEstimatedFairValue, as of the indicated date. | 677,038 | 637,053 |
Industrial, miscellaneous and all other equity securities | ||
Available-for-sale Securities, Amortized Cost Basis | 6,310,307 | 10,323,238 |
Available-for-sale Securities, Gross Unrealized Gain | 467,132 | 447,110 |
AvailableForSaleSecuritiesGrossUnrealizedLosses | (819,951) | (859,092) |
Represents the monetary amount of AvailableForSaleSecuritiesEstimatedFairValue, as of the indicated date. | 5,957,488 | 9,911,256 |
Equity Securities | ||
Available-for-sale Securities, Amortized Cost Basis | 6,310,307 | 10,323,238 |
Available-for-sale Securities, Gross Unrealized Gain | 467,132 | 447,110 |
AvailableForSaleSecuritiesGrossUnrealizedLosses | (819,951) | (859,092) |
Represents the monetary amount of AvailableForSaleSecuritiesEstimatedFairValue, as of the indicated date. | $ 5,957,488 | $ 9,911,256 |
3) Investments_ Schedule of U57
3) Investments: Schedule of Unrealized Loss on Investments (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017USD ($) | Dec. 31, 2016USD ($) | |
Held-to-maturity Securities, Unrecognized Holding Loss | $ 1,760,599 | $ 4,207,244 |
Held-to-maturity Securities, Fair Value | 86,974,727 | 64,910,462 |
Fair Value | 2,433,153 | 3,749,018 |
USTreasurySecurities1Member | ||
Held-to-maturity Securities, Fair Value | 52,308,223 | 1,342,088 |
US States and Political Subdivisions Debt Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 77,272 | 133,249 |
Held-to-maturity Securities, Fair Value | 4,137,653 | 3,686,856 |
Corporate Debt Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 1,285,361 | 3,727,013 |
Held-to-maturity Securities, Fair Value | 27,346,015 | 54,765,151 |
Collateralized Mortgage Backed Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 171,423 | 280,871 |
Held-to-maturity Securities, Fair Value | 3,182,836 | 5,116,367 |
Industrial, miscellaneous and all other equity securities | ||
AvailableForSaleSecuritiesGrossUnrealizedLosses | 819,951 | 859,092 |
Equity Securities | ||
AvailableForSaleSecuritiesGrossUnrealizedLosses | 819,951 | 859,092 |
Less than 12 months | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 555,988 | 2,104,387 |
Held-to-maturity Securities, Fair Value | 72,494,887 | 51,001,049 |
Fair Value | 988,159 | 2,063,144 |
Less than 12 months | USTreasurySecurities1Member | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 182,493 | 66,111 |
Held-to-maturity Securities, Fair Value | 51,456,444 | 1,342,088 |
Less than 12 months | US States and Political Subdivisions Debt Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 18,357 | 133,249 |
Held-to-maturity Securities, Fair Value | 2,486,400 | 3,686,856 |
Less than 12 months | Corporate Debt Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 286,166 | 1,728,312 |
Held-to-maturity Securities, Fair Value | 16,526,010 | 41,796,016 |
Less than 12 months | Collateralized Mortgage Backed Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 68,972 | 176,715 |
Held-to-maturity Securities, Fair Value | 2,026,033 | 4,176,089 |
Less than 12 months | Industrial, miscellaneous and all other equity securities | ||
AvailableForSaleSecuritiesGrossUnrealizedLosses | $ 150,581 | $ 215,563 |
No. of Investment Positions | 108 | 124 |
Less than 12 months | Equity Securities | ||
AvailableForSaleSecuritiesGrossUnrealizedLosses | $ 150,581 | $ 215,563 |
No. of Investment Positions | 108 | 124 |
More than 12 months | ||
Held-to-maturity Securities, Unrecognized Holding Loss | $ 1,204,611 | $ 2,102,857 |
Held-to-maturity Securities, Fair Value | 14,479,840 | 13,909,413 |
Fair Value | 1,444,994 | 1,685,874 |
More than 12 months | USTreasurySecurities1Member | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 44,050 | |
Held-to-maturity Securities, Fair Value | 851,779 | |
More than 12 months | US States and Political Subdivisions Debt Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 58,915 | |
Held-to-maturity Securities, Fair Value | 1,651,253 | |
More than 12 months | Corporate Debt Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 999,195 | 1,998,701 |
Held-to-maturity Securities, Fair Value | 10,820,005 | 12,969,135 |
More than 12 months | Collateralized Mortgage Backed Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 102,451 | 104,156 |
Held-to-maturity Securities, Fair Value | 1,156,803 | 940,278 |
More than 12 months | Industrial, miscellaneous and all other equity securities | ||
AvailableForSaleSecuritiesGrossUnrealizedLosses | $ 669,370 | $ 643,529 |
No. of Investment Positions | 92 | 104 |
More than 12 months | Equity Securities | ||
AvailableForSaleSecuritiesGrossUnrealizedLosses | $ 669,370 | $ 643,529 |
No. of Investment Positions | 92 | 104 |
TotalMember | ||
Held-to-maturity Securities, Unrecognized Holding Loss | $ 1,760,599 | $ 4,207,244 |
TotalMember | USTreasurySecurities1Member | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 226,543 | 66,111 |
TotalMember | US States and Political Subdivisions Debt Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 77,272 | 133,249 |
TotalMember | Corporate Debt Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 1,285,361 | 3,727,013 |
TotalMember | Collateralized Mortgage Backed Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | $ 171,423 | $ 280,871 |
3) Investments (Details)
3) Investments (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Average market value over amortized cost | 98.30% | 98.30% | 93.90% | ||
Other than Temporary Impairment, Credit Losses Recognized in Earnings, Period Increase (Decrease) | $ 100,000 | $ 30,000 | $ 418,366 | $ 90,000 | |
Net Investment Income | 8,361,466 | 8,089,857 | 25,559,113 | 23,484,280 | |
Securities on deposit for regulatory authorities | 9,166,082 | 9,166,082 | $ 9,269,121 | ||
Residential Real Estate 1 | |||||
Pledged Assets Separately Reported, Other Assets Pledged as Collateral, at Fair Value | 34,772,000 | 34,772,000 | 35,798,000 | ||
Bank Loans | 26,893,000 | 26,893,000 | 27,377,000 | ||
Foreclosed Residential Real Estate included in Residential Real Estate Held for Investment | 34,167,065 | 34,167,065 | $ 39,856,434 | ||
Cemeteries and mortuaries | |||||
Net Investment Income | $ 129,235 | $ 133,289 | $ 369,721 | $ 295,630 |
3) Investments_ Investments C59
3) Investments: Investments Classified by Contractual Maturity Date (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
AmortizedCost | $ 230,811,272 | $ 184,979,644 |
Represents the monetary amount of HeldToMaturitySecuritiesEstimatedFairValue, as of the indicated date. | 243,807,562 | 191,850,749 |
Collateralized Mortgage Backed Securities | ||
AmortizedCost | 9,764,566 | 9,488,083 |
Represents the monetary amount of HeldToMaturitySecuritiesEstimatedFairValue, as of the indicated date. | 9,846,716 | 9,428,612 |
Redeemable Preferred Stock | ||
AmortizedCost | 623,635 | 623,635 |
Represents the monetary amount of HeldToMaturitySecuritiesEstimatedFairValue, as of the indicated date. | 677,038 | $ 637,053 |
DueIn2017Member | ||
AmortizedCost | 1,205,533 | |
Represents the monetary amount of HeldToMaturitySecuritiesEstimatedFairValue, as of the indicated date. | 1,208,929 | |
DueIn2018Through2021Member | ||
AmortizedCost | 77,063,707 | |
Represents the monetary amount of HeldToMaturitySecuritiesEstimatedFairValue, as of the indicated date. | 78,846,158 | |
DueIn2022Through2026Member | ||
AmortizedCost | 54,265,268 | |
Represents the monetary amount of HeldToMaturitySecuritiesEstimatedFairValue, as of the indicated date. | 56,731,089 | |
DueAfter2026Member | ||
AmortizedCost | 87,888,563 | |
Represents the monetary amount of HeldToMaturitySecuritiesEstimatedFairValue, as of the indicated date. | $ 96,497,632 |
3) Investments_ Equity Securiti
3) Investments: Equity Securities - Additional (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Average Market Value of Security over initial investment | 74.80% | 81.40% | |
Equity Securities | |||
Other than Temporary Impairment Losses, Investments, Portion Recognized in Earnings, Net, Available-for-sale Securities | $ 63,375 | $ 43,630 |
3) Investments_ Gain (Loss) o61
3) Investments: Gain (Loss) on Investments (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Fixed maturity securities held to maturity: | $ (483,041) | $ (69,169) | $ 231,325 | $ 45,666 |
Held-to-maturity Securities | ||||
Gross Realized Gains | 110,529 | 65,179 | 163,950 | 259,635 |
Gross Realized Losses | (651,754) | (4,527) | (686,819) | (7,405) |
Other than Temporary Impairments | (100,000) | (30,000) | (418,366) | (90,000) |
Available-for-sale Securities | ||||
Gross Realized Gains | 25,898 | 36,751 | 132,350 | 176,331 |
Gross Realized Losses | (26) | (4,544) | (58,464) | (37,146) |
Other than Temporary Impairments | (63,375) | (63,375) | (43,630) | |
Other Assets | ||||
Gross Realized Gains | 225,022 | 191,992 | 2,006,721 | 468,675 |
Gross Realized Losses | $ (29,335) | $ (324,020) | $ (844,672) | $ (680,794) |
3) Investments_ Net carrying am
3) Investments: Net carrying amount of held to maturity securities (Details) - Held-to-maturity Securities - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Net carrying amount for sales of securities | $ 2,240,249 | $ 1,989,159 |
Net realized loss related to sales of securities | $ 385,484 | |
Net realized gain related to sales of securities | $ 156,154 |
3) Investments_ Schedule of M63
3) Investments: Schedule of Major categories of net investment income (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Gross investment income | $ 12,106,535 | $ 11,234,882 | $ 35,942,131 | $ 32,637,240 |
Investment Income, Investment Expense | (3,745,069) | (3,145,025) | (10,383,018) | (9,152,960) |
Net Investment Income | 8,361,466 | 8,089,857 | 25,559,113 | 23,484,280 |
Fixed Maturities | ||||
Gross investment income | 2,692,586 | 2,410,641 | 7,475,156 | 6,472,847 |
Equity Securities | ||||
Gross investment income | 66,320 | 78,402 | 209,517 | 208,696 |
Mortgage Loans - Real Estate | ||||
Gross investment income | 2,973,349 | 2,830,853 | 8,803,257 | 8,238,249 |
Real Estate | ||||
Gross investment income | 2,818,672 | 2,736,301 | 8,540,756 | 8,162,574 |
PolicyStudentAndOtherLoansMember | ||||
Gross investment income | 195,098 | 205,537 | 621,854 | 558,778 |
Insurance Assignments | ||||
Gross investment income | 3,234,520 | 2,952,170 | 9,943,561 | 8,915,654 |
Other investments | ||||
Gross investment income | 16,051 | 36,041 | 13,962 | |
Short-term investments, principally gains on sale of mortgage loans | ||||
Gross investment income | $ 109,939 | $ 20,978 | $ 311,989 | $ 66,480 |
3) Investments_ Commercial Re64
3) Investments: Commercial Real Estate Investment (Details) | Sep. 30, 2017USD ($) | Dec. 31, 2016USD ($) |
Real estate held for investment (net of accumulated depreciation of $17,919,427 and $16,138,439 for 2017 and 2016) | $ 150,568,998 | $ 145,165,921 |
Commercial Real Estate 1 | ||
Real estate held for investment (net of accumulated depreciation of $17,919,427 and $16,138,439 for 2017 and 2016) | $ 81,099,778 | $ 68,973,936 |
Square Footage | 723,477 | 739,747 |
Commercial Real Estate 1 | ArizonaMember | ||
Real estate held for investment (net of accumulated depreciation of $17,919,427 and $16,138,439 for 2017 and 2016) | $ 4,000 | $ 450,538 |
Square Footage | 16,270 | |
Commercial Real Estate 1 | ArkansasMember | ||
Real estate held for investment (net of accumulated depreciation of $17,919,427 and $16,138,439 for 2017 and 2016) | $ 97,219 | $ 100,369 |
Square Footage | 3,200 | 3,200 |
Commercial Real Estate 1 | KansasMember | ||
Real estate held for investment (net of accumulated depreciation of $17,919,427 and $16,138,439 for 2017 and 2016) | $ 11,993,029 | $ 12,450,297 |
Square Footage | 222,679 | 222,679 |
Commercial Real Estate 1 | LouisianaMember | ||
Real estate held for investment (net of accumulated depreciation of $17,919,427 and $16,138,439 for 2017 and 2016) | $ 499,573 | $ 518,700 |
Square Footage | 7,063 | 7,063 |
Commercial Real Estate 1 | MississippiMember | ||
Real estate held for investment (net of accumulated depreciation of $17,919,427 and $16,138,439 for 2017 and 2016) | $ 3,748,324 | $ 3,818,985 |
Square Footage | 33,821 | 33,821 |
Commercial Real Estate 1 | NewMexicoMember | ||
Real estate held for investment (net of accumulated depreciation of $17,919,427 and $16,138,439 for 2017 and 2016) | $ 7,000 | $ 7,000 |
Commercial Real Estate 1 | TexasMember | ||
Real estate held for investment (net of accumulated depreciation of $17,919,427 and $16,138,439 for 2017 and 2016) | $ 3,728,960 | $ 3,734,974 |
Square Footage | 23,470 | 23,470 |
Commercial Real Estate 1 | UtahMember | ||
Real estate held for investment (net of accumulated depreciation of $17,919,427 and $16,138,439 for 2017 and 2016) | $ 61,021,673 | $ 47,893,073 |
Square Footage | 433,244 | 433,244 |
3) Investments_ Residential R65
3) Investments: Residential Real Estate Investment (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Real estate held for investment (net of accumulated depreciation of $17,919,427 and $16,138,439 for 2017 and 2016) | $ 150,568,998 | $ 145,165,921 |
Residential Real Estate 1 | ||
Real estate held for investment (net of accumulated depreciation of $17,919,427 and $16,138,439 for 2017 and 2016) | 69,469,220 | 76,191,985 |
Residential Real Estate 1 | ArizonaMember | ||
Real estate held for investment (net of accumulated depreciation of $17,919,427 and $16,138,439 for 2017 and 2016) | 217,516 | 742,259 |
Residential Real Estate 1 | CaliforniaMember | ||
Real estate held for investment (net of accumulated depreciation of $17,919,427 and $16,138,439 for 2017 and 2016) | 5,663,871 | 5,848,389 |
Residential Real Estate 1 | ColoradoMember | ||
Real estate held for investment (net of accumulated depreciation of $17,919,427 and $16,138,439 for 2017 and 2016) | 364,489 | |
Residential Real Estate 1 | FloridaMember | ||
Real estate held for investment (net of accumulated depreciation of $17,919,427 and $16,138,439 for 2017 and 2016) | 7,311,913 | 8,327,355 |
Residential Real Estate 1 | HawaiiMember | ||
Real estate held for investment (net of accumulated depreciation of $17,919,427 and $16,138,439 for 2017 and 2016) | 712,286 | |
Residential Real Estate 1 | OhioMember | ||
Real estate held for investment (net of accumulated depreciation of $17,919,427 and $16,138,439 for 2017 and 2016) | 46,658 | |
Residential Real Estate 1 | OklahomaMember | ||
Real estate held for investment (net of accumulated depreciation of $17,919,427 and $16,138,439 for 2017 and 2016) | 17,500 | |
Residential Real Estate 1 | TexasMember | ||
Real estate held for investment (net of accumulated depreciation of $17,919,427 and $16,138,439 for 2017 and 2016) | 511,486 | 1,091,188 |
Residential Real Estate 1 | UtahMember | ||
Real estate held for investment (net of accumulated depreciation of $17,919,427 and $16,138,439 for 2017 and 2016) | 54,701,809 | 59,485,466 |
Residential Real Estate 1 | WashingtonMember | ||
Real estate held for investment (net of accumulated depreciation of $17,919,427 and $16,138,439 for 2017 and 2016) | $ 286,181 | $ 286,181 |
3) Investments_ Schedule of A66
3) Investments: Schedule of Allowance for loan losses as a contra-asset account (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Financing Receivable, Allowance for Credit Losses, Beginning Balance | $ 1,748,783 | $ 1,848,120 |
Allowance for credit losses, Charge-offs | (114,669) | (420,135) |
Allowance for credit losses, Provision | 417,704 | 320,798 |
Financing Receivable, Allowance for Credit Losses, Ending Balance | 2,051,818 | 1,748,783 |
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment | 411,172 | 374,501 |
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment | 1,640,646 | 1,374,282 |
Mortgage loans | 149,990,244 | 150,930,361 |
Financing Receivable, Individually Evaluated for Impairment | 5,629,563 | 3,184,425 |
Financing Receivable, Collectively Evaluated for Impairment | 144,360,681 | 147,745,936 |
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 | 42,923,761 | 51,536,622 |
Financing Receivable, Individually Evaluated for Impairment | 203,806 | 202,992 |
Financing Receivable, Collectively Evaluated for Impairment | 42,719,955 | 51,333,630 |
Residential Mortgage | ||
Financing Receivable, Allowance for Credit Losses, Beginning Balance | 1,461,540 | 1,560,877 |
Allowance for credit losses, Charge-offs | (49,775) | (420,135) |
Allowance for credit losses, Provision | 417,704 | 320,798 |
Financing Receivable, Allowance for Credit Losses, Ending Balance | 1,829,469 | 1,461,540 |
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment | 411,172 | 374,501 |
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment | 1,418,297 | 1,087,039 |
Mortgage loans | 65,759,761 | 58,593,622 |
Financing Receivable, Individually Evaluated for Impairment | 5,425,757 | 2,916,538 |
Financing Receivable, Collectively Evaluated for Impairment | 60,334,004 | 55,677,084 |
Residential Construction | ||
Financing Receivable, Allowance for Credit Losses, Beginning Balance | 100,114 | 100,114 |
Allowance for credit losses, Charge-offs | (64,894) | |
Financing Receivable, Allowance for Credit Losses, Ending Balance | 35,220 | 100,114 |
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment | 35,220 | 100,114 |
Mortgage loans | 41,306,722 | 40,800,117 |
Financing Receivable, Individually Evaluated for Impairment | 64,895 | |
Financing Receivable, Collectively Evaluated for Impairment | $ 41,306,722 | $ 40,735,222 |
3) Investments_ Schedule of a67
3) Investments: Schedule of aging of mortgage loans (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | ||
Mortgage Loans during period | $ (2,051,818) | $ (1,748,783) | |
Mortgage Loans, Allowance for Loan Losses | (637,735) | (190,846) | |
Mortgage Loans, Unamortized deferred loan fees, net | 147,300,691 | 148,990,732 | |
Commercial Loan | |||
Mortgage Loans during period | (187,129) | (187,129) | |
Mortgage Loans, Allowance for Loan Losses | (229,603) | (155,725) | |
Mortgage Loans, Unamortized deferred loan fees, net | 42,507,029 | 51,193,768 | |
Residential Mortgage | |||
Mortgage Loans during period | (1,829,469) | (1,461,540) | |
Mortgage Loans, Allowance for Loan Losses | (21,578) | (35,121) | |
Mortgage Loans, Unamortized deferred loan fees, net | 63,908,714 | 57,096,961 | |
Residential Construction | |||
Mortgage Loans during period | (35,220) | (100,114) | |
Mortgage Loans, Allowance for Loan Losses | (386,554) | ||
Mortgage Loans, Unamortized deferred loan fees, net | 40,884,948 | 40,700,003 | |
Past due 30 to 59 days | |||
Mortgage Loans during period | 1,236,721 | 996,779 | |
Past due 30 to 59 days | Residential Mortgage | |||
Mortgage Loans during period | 1,236,721 | 996,779 | |
Past due 60 to 89 days | |||
Mortgage Loans during period | 2,200,206 | 1,355,250 | |
Past due 60 to 89 days | Residential Mortgage | |||
Mortgage Loans during period | 2,200,206 | 1,290,355 | |
Past due 60 to 89 days | Residential Construction | |||
Mortgage Loans during period | 64,895 | ||
Past due 90 or more days | |||
Mortgage Loans during period | [1] | 3,429,357 | 1,829,175 |
Past due 90 or more days | Commercial Loan | |||
Mortgage Loans during period | [1] | 203,806 | 202,992 |
Past due 90 or more days | Residential Mortgage | |||
Mortgage Loans during period | [1] | 3,225,551 | 1,626,183 |
In Foreclosure | |||
Mortgage Loans during period | [1] | 7,401,779 | 5,146,164 |
In Foreclosure | Commercial Loan | |||
Mortgage Loans during period | [1] | 717,024 | 202,992 |
In Foreclosure | Residential Mortgage | |||
Mortgage Loans during period | [1] | 6,684,755 | 4,878,277 |
In Foreclosure | Residential Construction | |||
Mortgage Loans during period | [1] | 64,895 | |
Total Past Due | |||
Mortgage Loans during period | 142,588,465 | 145,784,197 | |
Total Past Due | Commercial Loan | |||
Mortgage Loans during period | 42,206,737 | 51,333,630 | |
Total Past Due | Residential Mortgage | |||
Mortgage Loans during period | 59,075,006 | 53,715,345 | |
Total Past Due | Residential Construction | |||
Mortgage Loans during period | 41,306,722 | 40,735,222 | |
Current | |||
Mortgage Loans during period | 149,990,244 | 150,930,361 | |
Current | Commercial Loan | |||
Mortgage Loans during period | 42,923,761 | 51,536,622 | |
Current | Residential Mortgage | |||
Mortgage Loans during period | 65,759,761 | 58,593,622 | |
Current | Residential Construction | |||
Mortgage Loans during period | $ 41,306,722 | $ 40,800,117 | |
[1] | There was not any interest income recognized on loans past due greater than 90 days or in foreclosure. |
3) Investments_ Schedule of I68
3) Investments: Schedule of Impaired Mortgage Loans (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Commercial Loan | ||
Impaired Financing Receivable, with No Related Allowance, Recorded Investment | $ 203,806 | $ 202,992 |
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment | 456,524 | 202,992 |
Impaired Financing Receivable, with Related Allowance, Recorded Investment | 203,806 | 202,992 |
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance | 203,806 | 202,992 |
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment | 456,524 | 202,992 |
Residential Construction | ||
Impaired Financing Receivable, with No Related Allowance, Recorded Investment | 64,895 | |
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment | 79,082 | |
Impaired Financing Receivable, with Related Allowance, Recorded Investment | 64,895 | |
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance | 64,895 | |
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment | 79,082 | |
Residential Mortgage | ||
Impaired Financing Receivable, with Related Allowance, Recorded Investment | 1,553,170 | 2,916,538 |
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance | 1,553,170 | 2,916,538 |
Impaired Financing Receivable, Related Allowance | 411,172 | 374,501 |
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment | 1,287,394 | 3,001,850 |
TotalResidentialMortgageMember | ||
Impaired Financing Receivable, with Related Allowance, Recorded Investment | 5,425,757 | 2,916,538 |
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance | 5,425,757 | 2,916,538 |
Impaired Financing Receivable, Related Allowance | 411,172 | 374,501 |
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment | $ 4,569,374 | $ 3,001,850 |
3) Investments_ Schedule Of C69
3) Investments: Schedule Of Credit Risk Of Mortgage Loans Based On Performance Status (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Represents the monetary amount of MortgageLoans, as of the indicated date. | $ 149,990,244 | $ 150,930,361 |
Commercial Loan | ||
Represents the monetary amount of MortgageLoans, as of the indicated date. | 42,923,761 | 51,536,622 |
Residential Mortgage | ||
Represents the monetary amount of MortgageLoans, as of the indicated date. | 65,759,761 | 58,593,622 |
Residential Construction | ||
Represents the monetary amount of MortgageLoans, as of the indicated date. | $ 41,306,722 | $ 40,800,117 |
3) Investments_ Summary of Inte
3) Investments: Summary of Interest not accrued on non-performing mortgage loans (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Details | ||
Interest not accrued on non-performing loans | $ 185,000 | $ 172,000 |
3) Investments_ Schedule of M71
3) Investments: Schedule of Mortgage loans on a nonaccrual status (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | $ 5,629,563 | $ 3,184,425 |
Commercial Loan | ||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | 203,806 | 202,992 |
Residential Mortgage | ||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | $ 5,425,757 | 2,916,538 |
Residential Construction | ||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | $ 64,895 |
4) Loans Held For Sale_ Aggre72
4) Loans Held For Sale: Aggregate fair value - Loans Held for Sale (Details) | Sep. 30, 2017USD ($) |
Details | |
Fair Value of Loans Held for Sale | $ 166,990,187 |
Aggregate unpaid principal balance - Loans Held for Sale | 161,165,793 |
Unrealized gain - Loans Held for Sale | $ 5,824,394 |
4) Loans Held For Sale_ Sched73
4) Loans Held For Sale: Schedule of Mortgage Fee Income for Loans Held for Sale (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Interest and Other Income | $ 2,097,249 | $ 2,204,286 | $ 5,679,868 | $ 6,022,796 |
Mortgage fee income | 41,597,573 | 53,195,763 | 122,086,734 | 146,967,246 |
LoansHeldForSaleMember | ||||
Loan fees | 15,203,107 | 11,988,959 | 33,291,947 | 33,071,486 |
Secondary gains | 28,550,295 | 41,346,576 | 87,165,736 | 108,667,085 |
Change in fair value of loan commitments | (4,833,268) | (1,505,820) | (3,677,554) | 1,459,568 |
Change in fair value of loans held for sale | 1,061,917 | 1,061,917 | ||
Provision for loan loss reserve | (481,727) | (838,238) | (1,435,180) | (2,253,689) |
Mortgage fee income | $ 41,597,573 | $ 53,195,763 | $ 122,086,734 | $ 146,967,246 |
4) Loans Held For Sale_ Sched74
4) Loans Held For Sale: Schedule of loan loss reserve which is included in other liabilities and accrued expenses (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Details | ||
Beginning, Loan Loss Reserve | $ 627,733 | $ 2,805,900 |
Loan loss reserve, Provisions for losses | 1,435,180 | 2,988,754 |
Additional loan loss reserve, Provisions for losses | 1,700,000 | |
Loan loss reserve, Charge-offs | 108,175 | (6,866,921) |
Ending, Loan Loss Reserve | $ 2,171,088 | $ 627,733 |
5) Stock-based Compensation (De
5) Stock-based Compensation (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Details | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs, Capitalized Amount | $ 102,429 | $ 84,949 | $ 305,741 | $ 253,427 |
Unrecognized compensation expense related to the options issued in December 2014 | $ 69,719 | 69,719 | ||
Total intrinsic value | $ 578,017 | $ 98,663 |
5) Stock-based Compensation_ 76
5) Stock-based Compensation: Schedule of stock inventive plan changes (Details) - USD ($) | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Class A Common Stock | ||||
Shares, Outstanding | 741,973 | 585,844 | 741,973 | 618,261 |
Shares outstanding | $ 4.33 | $ 3.97 | $ 4.33 | $ 3.89 |
Shares Exercised | (32,417) | |||
Per Share Shares Exercised | $ 2.38 | |||
Options Exercisable | 706,854 | 550,792 | ||
Options exercisable | $ 4.21 | $ 3.82 | ||
Available options for future grant | $ 525,682 | $ 397,342 | ||
Weighted average contractual term of options outstanding | 6.62 years | 6.99 years | ||
Weighted average contractual term of options exercisable | 6.50 years | 6.86 years | ||
Aggregated intrinsic value of options outstanding | $ 941,567 | $ 1,179,541 | ||
Aggregated intrinsic value of options exercisable | $ 941,311 | $ 1,179,541 | ||
Class C Common Stock | ||||
Shares, Outstanding | 428,669 | 577,436 | 556,298 | 577,436 |
Shares outstanding | $ 5.59 | $ 3.54 | $ 4.61 | $ 3.54 |
Shares Exercised | (103,402) | |||
Per Share Shares Exercised | $ 1.31 | |||
Shares Cancelled | (24,227) | |||
Per Share Shares cancelled | $ 1.31 | |||
Options Exercisable | 407,669 | 551,186 | ||
Options exercisable | $ 5.50 | $ 3.38 | ||
Available options for future grant | $ 227,750 | $ 57,750 | ||
Weighted average contractual term of options outstanding | 2.63 years | 2.00 years | ||
Weighted average contractual term of options exercisable | 2.55 years | 1.90 years | ||
Aggregated intrinsic value of options outstanding | $ 151,012 | $ 1,460,167 | ||
Aggregated intrinsic value of options exercisable | $ 151,012 | $ 1,460,167 |
6) Earnings Per Share_ Schedu77
6) Earnings Per Share: Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Details | ||||
Net earnings | $ 1,096,838 | $ 4,183,005 | $ 5,442,702 | $ 11,737,952 |
Weighted-average Class A equivalent common share outstanding (1) | 15,256,857 | 14,830,078 | 15,159,569 | 14,744,779 |
GrantOfEmployeeStockOptions | $ 285,803 | $ 439,535 | $ 315,257 | $ 421,266 |
Diluted weighted-average shares outstanding | 15,542,660 | 15,269,613 | 15,474,826 | 15,166,045 |
Net earnings per Class A Equivalent common share (1) | $ 0.07 | $ 0.28 | $ 0.36 | $ 0.80 |
Net earnings per Class A Equivalent common share-assuming dilution (1) | $ 0.07 | $ 0.27 | $ 0.35 | $ 0.77 |
6) Earnings Per Share (Details)
6) Earnings Per Share (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Details | ||
Antidilutive Securities Excluded from Computation of Net Income, Per Outstanding Unit, Amount | $ 486,725 | $ 250,039 |
7) Business Segments_ Schedul79
7) Business Segments: Schedule of Revenues and Expenses by Reportable Segment (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Revenue from customers | $ 71,971,851 | $ 82,948,657 | $ 215,972,706 | $ 232,492,232 | |
SegmentReportingInformationIncomeLossBeforeIncomeTaxes | 1,138,017 | 6,573,530 | 8,030,086 | 18,630,496 | |
Identifiable Assets | 1,005,138,741 | 948,561,643 | 1,005,138,741 | 948,561,643 | |
Goodwill | 2,765,570 | 2,765,570 | 2,765,570 | 2,765,570 | $ 2,765,570 |
Life Insurance Segment | |||||
Revenue from customers | 25,229,759 | 24,972,397 | 77,112,117 | 70,616,968 | |
SegmentReportingInformationIntersegmentRevenue | 3,333,593 | 3,318,369 | 9,299,671 | 9,780,803 | |
SegmentReportingInformationIncomeLossBeforeIncomeTaxes | 522,574 | 2,139,702 | 4,824,654 | 5,785,464 | |
Identifiable Assets | 853,298,860 | 797,486,493 | 853,298,860 | 797,486,493 | |
Goodwill | 2,765,570 | 2,765,570 | 2,765,570 | 2,765,570 | |
Cemetery and Mortuary | |||||
Revenue from customers | 2,988,137 | 2,900,917 | 9,907,037 | 10,045,384 | |
SegmentReportingInformationIntersegmentRevenue | 116,290 | 107,745 | 338,745 | 616,532 | |
SegmentReportingInformationIncomeLossBeforeIncomeTaxes | 237,108 | 54,891 | 1,331,896 | 1,283,553 | |
Identifiable Assets | 94,716,098 | 95,414,964 | 94,716,098 | 95,414,964 | |
Mortgage | |||||
Revenue from customers | 43,753,955 | 55,075,343 | 128,953,552 | 151,829,880 | |
SegmentReportingInformationIntersegmentRevenue | 86,580 | 79,164 | 268,764 | 239,503 | |
SegmentReportingInformationIncomeLossBeforeIncomeTaxes | 378,335 | 4,378,937 | 1,873,536 | 11,561,479 | |
Identifiable Assets | 190,202,990 | 194,469,525 | 190,202,990 | 194,469,525 | |
Significant Reconciling Items | |||||
SegmentReportingInformationIntersegmentRevenue | (3,536,463) | (3,505,278) | (9,907,180) | (10,636,838) | |
Identifiable Assets | $ (133,079,207) | $ (138,809,339) | $ (133,079,207) | $ (138,809,339) |
8)_ Fair Value of Financial I80
8): Fair Value of Financial Instruments: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Assets accounted for at fair value on a recurring basis | ||
Available-for-sale Securities | $ 5,957,488 | $ 9,911,256 |
Fair Value of Loans Held for Sale | 166,990,187 | |
Restricted assets of cemeteries and mortuaries | 78,421 | 736,603 |
Cemetery perpetual care trust investments | 676,881 | 698,202 |
Derivatives - loan commitments | 3,140,704 | 6,911,544 |
Assets, Fair Value Disclosure | 176,843,681 | 18,257,605 |
Liabilities accounted for at fair value on a recurring basis | ||
Derivatives - bank loan interest rate swaps | (138) | (3,308) |
Derivatives - Call Options | (50,452) | (109,474) |
Derivatives - Put Options | (63,637) | (26,494) |
Derivatives - loan commitments1 | (8,926) | (102,212) |
Liabilities accounted for at fair value | (123,153) | (241,488) |
Fair Value, Inputs, Level 1 | ||
Assets accounted for at fair value on a recurring basis | ||
Available-for-sale Securities | 5,957,488 | 9,911,256 |
Restricted assets of cemeteries and mortuaries | 78,421 | 736,603 |
Cemetery perpetual care trust investments | 676,881 | 698,202 |
Assets, Fair Value Disclosure | 6,712,790 | 11,346,061 |
Liabilities accounted for at fair value on a recurring basis | ||
Derivatives - Call Options | (50,452) | (109,474) |
Derivatives - Put Options | (63,637) | (26,494) |
Liabilities accounted for at fair value | (114,089) | (135,968) |
Fair Value, Inputs, Level 3 | ||
Assets accounted for at fair value on a recurring basis | ||
Fair Value of Loans Held for Sale | 166,990,187 | |
Derivatives - loan commitments | 3,140,704 | 6,911,544 |
Assets, Fair Value Disclosure | 170,130,891 | 6,911,544 |
Liabilities accounted for at fair value on a recurring basis | ||
Derivatives - bank loan interest rate swaps | (138) | (3,308) |
Derivatives - loan commitments1 | (8,926) | (102,212) |
Liabilities accounted for at fair value | $ (9,064) | $ (105,520) |
8)_ Fair Value of Financial I81
8): Fair Value of Financial Instruments: Schedule of Changes in the consolidated balance sheet line items measured using level 3 inputs (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Loan Commitments | ||
Fair Value Balance | $ 6,809,332 | $ 7,671,495 |
Fair Value, Losses (Gains) included in earnings | (3,677,554) | (862,163) |
Fair Value Balance | 3,131,778 | 6,809,332 |
Bank Loan Interest Rate Swaps | ||
Fair Value Balance | (3,308) | (13,947) |
Fair Value, Losses (Gains) included in other comprehensive income | 3,170 | 10,639 |
Fair Value Balance | (138) | $ (3,308) |
Loans Held for Sale | ||
Fair Value, Purchases | 636,022,818 | |
Fair Value, Sales | (473,930,540) | |
Fair Value, Losses (Gains) included in earnings | 4,897,909 | |
Fair Value Balance | $ 166,990,187 |
8)_ Fair Value of Financial I82
8): Fair Value of Financial Instruments: Schedule of Fair Value Measurements, Nonrecurring (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Mortgage Loans on Real Estate | $ 5,218,392 | $ 2,809,925 |
Assets accounted for at fair value on a nonrecurring basis - Mortgage servicing rights | 4,057,974 | 8,603,154 |
Assets, Fair Value Disclosure, Nonrecurring | 9,276,366 | 13,760,899 |
Assets accounted for at fair value on non-recurring basis | ||
Real estate held for investment | 2,347,820 | |
Fair Value, Inputs, Level 3 | ||
Mortgage Loans on Real Estate | 5,218,392 | 2,809,925 |
Assets accounted for at fair value on a nonrecurring basis - Mortgage servicing rights | 4,057,974 | 8,603,154 |
Assets, Fair Value Disclosure, Nonrecurring | $ 9,276,366 | 13,760,899 |
Assets accounted for at fair value on non-recurring basis | ||
Real estate held for investment | $ 2,347,820 |
8)_ Fair Value of Financial I83
8): Fair Value of Financial Instruments: Schedule of Financial Instruments Carried at Other Than Fair Value (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
FixedMaturitySecuritiesHeldToMaturityMember | ||
Carrying Value | $ 230,811,272 | $ 184,979,644 |
Estimated Fair Value | 243,807,562 | 191,850,749 |
Residential Mortgage | ||
Carrying Value | 63,908,714 | 57,096,961 |
Estimated Fair Value | 68,139,551 | 61,357,393 |
Residential Construction | ||
Carrying Value | 40,884,948 | 40,700,003 |
Estimated Fair Value | 40,884,948 | 40,700,003 |
Commercial Loan | ||
Carrying Value | 42,507,029 | 51,193,768 |
Estimated Fair Value | 44,223,823 | 53,299,800 |
MortgageLoansNet1Member | ||
Carrying Value | 147,300,691 | 148,990,732 |
Estimated Fair Value | 153,248,322 | 155,357,196 |
LoansHeldForSaleMember | ||
Carrying Value | 34,905,719 | 189,578,243 |
Estimated Fair Value | 35,131,853 | 192,289,854 |
PolicyLoanMember | ||
Carrying Value | 6,677,924 | 6,694,148 |
Estimated Fair Value | 6,677,924 | 6,694,148 |
Insurance Assignments | ||
Carrying Value | 32,198,144 | 32,477,246 |
Estimated Fair Value | 32,198,144 | 32,477,246 |
ShortTermInvestments1Member | ||
Carrying Value | 17,830,990 | 27,560,040 |
Estimated Fair Value | 17,830,990 | 27,560,040 |
MortgageServicingRightsMember | ||
Carrying Value | 20,396,568 | 18,872,362 |
Estimated Fair Value | 26,785,380 | 25,496,832 |
BankAndOtherLoansPayableMember | ||
Carrying Value | (182,769,531) | (152,137,371) |
Estimated Fair Value | (182,769,531) | (152,137,371) |
PolicyholderAccountBalancesMember | ||
Carrying Value | (48,200,442) | (49,421,125) |
Estimated Fair Value | (37,564,692) | (38,530,031) |
FuturePolicyBenefitsAnnuitiesMember | ||
Carrying Value | (99,519,758) | (99,388,662) |
Estimated Fair Value | (100,851,101) | (100,253,261) |
Fair Value, Inputs, Level 2 | FixedMaturitySecuritiesHeldToMaturityMember | ||
Estimated Fair Value | 243,807,562 | 191,850,749 |
Fair Value, Inputs, Level 2 | ShortTermInvestments1Member | ||
Estimated Fair Value | 17,830,990 | 27,560,040 |
Fair Value, Inputs, Level 3 | Residential Mortgage | ||
Estimated Fair Value | 68,139,551 | 61,357,393 |
Fair Value, Inputs, Level 3 | Residential Construction | ||
Estimated Fair Value | 40,884,948 | 40,700,003 |
Fair Value, Inputs, Level 3 | Commercial Loan | ||
Estimated Fair Value | 44,223,823 | 53,299,800 |
Fair Value, Inputs, Level 3 | MortgageLoansNet1Member | ||
Estimated Fair Value | 153,248,322 | 155,357,196 |
Fair Value, Inputs, Level 3 | LoansHeldForSaleMember | ||
Estimated Fair Value | 35,131,853 | 192,289,854 |
Fair Value, Inputs, Level 3 | PolicyLoanMember | ||
Estimated Fair Value | 6,677,924 | 6,694,148 |
Fair Value, Inputs, Level 3 | Insurance Assignments | ||
Estimated Fair Value | 32,198,144 | 32,477,246 |
Fair Value, Inputs, Level 3 | MortgageServicingRightsMember | ||
Estimated Fair Value | 26,785,380 | 25,496,832 |
Fair Value, Inputs, Level 3 | BankAndOtherLoansPayableMember | ||
Estimated Fair Value | (182,769,531) | (152,137,371) |
Fair Value, Inputs, Level 3 | PolicyholderAccountBalancesMember | ||
Estimated Fair Value | (37,564,692) | (38,530,031) |
Fair Value, Inputs, Level 3 | FuturePolicyBenefitsAnnuitiesMember | ||
Estimated Fair Value | $ (100,851,101) | $ (100,253,261) |
10) Derivative Commitments_ S84
10) Derivative Commitments: Schedule of Derivative Assets at Fair Value (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Derivative, Notional Amount | $ 151,196,333 | $ 195,439,555 |
Derivative Asset, Notional Amount | 3,140,704 | 6,911,544 |
Derivative Liability, Notional Amount | 123,153 | 241,488 |
Loan Commitments | ||
Derivative, Notional Amount | 147,086,043 | 191,757,193 |
Derivative Asset, Notional Amount | 3,140,704 | 6,911,544 |
Derivative Liability, Notional Amount | 8,926 | 102,212 |
Call Options | ||
Derivative, Notional Amount | 1,473,050 | 2,169,850 |
Derivative Liability, Notional Amount | 50,452 | 109,474 |
Put Options | ||
Derivative, Notional Amount | 2,593,300 | 1,336,750 |
Derivative Liability, Notional Amount | 63,637 | 26,494 |
Bank Loan Interest Rate Swaps | ||
Derivative, Notional Amount | 43,940 | 175,762 |
Derivative Liability, Notional Amount | $ 138 | $ 3,308 |
10) Derivative Commitments_ S85
10) Derivative Commitments: Schedule of Gains and Losses on Derivatives (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Details | ||||
Gain (Loss) on Derivatives, Interest Rate Swaps | $ 554 | $ 3,170 | $ 5,541 | |
Gain (Loss) on Derivatives, Loan Commitments | (4,833,268) | $ (1,505,820) | (3,677,554) | 1,459,568 |
Gain (Loss) on Derivatives, Call and put options | $ 27,734 | $ 73,250 | $ 216,561 | $ 210,522 |
11) Reinsurance, Commitments 86
11) Reinsurance, Commitments and Contingencies: Mortgage Loan Loss Settlements (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Details | ||
Funds reserved and accrued to settle investor related claims | $ 2,171,000 | $ 628,000 |
11) Reinsurance, Commitments 87
11) Reinsurance, Commitments and Contingencies: Other Contingencies and Commitments (Details) | Sep. 30, 2017USD ($) |
Details | |
Commitments to fund new residential construction loans | $ 69,601,000 |
Commitments to fund new residential construction loans funded | $ 41,307,000 |
12) Mortgage Servicing Rights88
12) Mortgage Servicing Rights: Schedule of Mortgage Servicing Rights (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Details | ||
Balance before valuation allowance at beginning of year | $ 18,872,362 | $ 12,679,755 |
MSRs proceeds from loan sales | 4,057,974 | 8,603,154 |
Amortization | (2,533,768) | (2,410,547) |
Balance before valuation allowance at year end | 20,396,568 | 18,872,362 |
Mortgage servicing rights, net | 20,396,568 | 18,872,362 |
Estimated fair value of MSRs at end of period | $ 26,785,380 | $ 25,496,832 |
12) Mortgage Servicing Rights89
12) Mortgage Servicing Rights: Schedule of Finite-Lived Intangible Assets, Future Amortization Expense, Mortgage Servicing Rights (Details) | Sep. 30, 2017USD ($) |
Details | |
Finite-Lived Intangible Assets, Amortization Expense, Remainder of Fiscal Year | $ 162,284 |
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 3,372,381 |
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 3,372,381 |
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 3,372,381 |
Finite-Lived Intangible Assets, Amortization Expense, Year Five | 3,372,381 |
Finite-Lived Intangible Assets, Amortization Expense, after Year Five | 6,744,760 |
Finite-Lived Intangible Assets, Accumulated Amortization | $ 20,396,568 |
12) Mortgage Servicing Rights90
12) Mortgage Servicing Rights: Schedule of Other Revenues (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Other Revenue, Net | $ 1,947,908 | $ 1,563,397 | $ 5,625,643 | $ 4,213,957 |
Contractual Servicing Fees | ||||
Other Revenue, Net | 1,848,831 | 1,496,365 | 5,359,425 | 4,024,720 |
Late fees | ||||
Other Revenue, Net | $ 99,077 | $ 67,032 | $ 266,218 | $ 189,237 |
12) Mortgage Servicing Rights91
12) Mortgage Servicing Rights: Summary of Unpaid Principal Balances of the Servicing Portfolio (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Details | ||
Servicing Unpaid Principal Balance | $ 3,003,608,494 | $ 2,720,441,340 |
12) Mortgage Servicing Rights92
12) Mortgage Servicing Rights: Assumptions used in determining MSR value (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Details | ||
Prepayment Speeds | 3.59% | 3.77% |
Average Life in Years of MSR | 6.2 | 6.52 |
Discount Rate | 10.01% | 10.01% |
13) Acquisitions_ Estimated F93
13) Acquisitions: Estimated Fair Values of Assets Acquired and Liabilities Assumed (Details) | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Details | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Fixed Maturity Securities, Held to Maturity | $ 43,878,084 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Equity Securities, Available for Sale | 646,335 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Mortgage Loans held for investment | 4,528,582 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Real Estate Held for Investment | 528,947 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Policy Loans | 145,953 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Short-term investments | 5,358,403 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Accrued Investment Income | 585,985 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents | 2,424,480 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables | 73,347 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | 21,083 |
Business Combination Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Assets | 1,190,862 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Received from Reinsurers | 34,948 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Other | 57,768 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets | 59,474,777 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Future policy benefits and unpaid claims | (52,648,838) |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Accounts Payable | (6,953) |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Other | (65,986) |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities | (52,721,777) |
Fair Value of Assets Acquired | $ 6,753,000 |
13) Acquisitions_ Business Ac94
13) Acquisitions: Business Acquisition, Pro Forma Information (Details) - First Guaranty Insurance Company | 3 Months Ended |
Sep. 30, 2016USD ($)$ / shares | |
Business Acquisition, Pro Forma Revenue | $ | $ 234,629,101 |
Business Acquisition, Pro Forma Net Income (Loss) | $ | $ 11,472,978 |
Business Acquisition, Pro Forma Earnings Per Share, Basic | $ / shares | $ 0.78 |
Business Acquisition, Pro Forma Earnings Per Share, Diluted | $ / shares | $ 0.76 |
14) Income Taxes (Details)
14) Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Details | ||||
Effective Income Tax Rate Reconciliation, Percent | 3.60% | 36.40% | 32.20% | 37.00% |
Income tax expense | $ 41,179 | $ 2,390,525 | $ 2,587,384 | $ 6,892,544 |