Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 30, 2018 | Jun. 30, 2017 | |
Entity Registrant Name | SECURITY NATIONAL FINANCIAL CORP | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Trading Symbol | snfca | ||
Amendment Flag | false | ||
Entity Central Index Key | 318,673 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Public Float | $ 32,000,000 | ||
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 | FY | ||
Class A Common Stock | |||
Entity Common Stock, Shares Outstanding | 14,569,321 | ||
Class C Common Stock | |||
Entity Common Stock, Shares Outstanding | 2,089,372 |
Balance Sheet
Balance Sheet - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Investments: | ||
Fixed maturity securities, held to maturity, at amortized cost | $ 228,397,623 | $ 184,979,644 |
Equity securities, available for sale, at estimated fair value | 6,037,855 | 9,911,256 |
Mortgage loans held for investment (net of allowances for loan losses of $1,768,796 and $1,748,783 for 2017 and 2016) | 204,210,885 | 148,990,732 |
Real estate held for investment (net of accumulated depreciation of $18,788,869 and $16,138,439 for 2017 and 2016) | 141,298,706 | 145,165,921 |
Other investments and policy loans (net of allowances for doubtful accounts of $846,641 and $1,119,630 for 2017 and 2016) | 45,895,472 | 41,599,246 |
Short-term investments | 27,560,040 | |
Accrued investment income | 3,644,077 | 2,972,596 |
Total investments | 629,484,618 | 561,179,435 |
Cash and cash equivalents | 45,315,661 | 38,987,430 |
Loans held for sale (including $133,414,188 for 2017 and $-0- for 2016 at estimated fair value) | 133,414,188 | 189,139,832 |
Receivables (net of allowances for doubtful accounts of $1,544,518 and $2,355,482 for 2017 and 2016) | 10,443,869 | 8,410,546 |
Restricted assets (including $809,958 for 2017 and $736,603 for 2016 at estimated fair value) | 11,830,621 | 10,391,394 |
Cemetery perpetual care trust investments (including $682,315 for 2017 and $698,202 for 2016 at estimated fair value) | 4,623,563 | 4,131,885 |
Receivable from reinsurers | 13,394,603 | 13,079,668 |
Cemetery land and improvements | 9,942,933 | 10,672,836 |
Deferred policy and pre-need contract acquisition costs | 80,625,304 | 69,118,745 |
Mortgage servicing rights, net | 21,376,937 | 18,872,362 |
Property and equipment, net | 8,069,380 | 8,791,522 |
Value of business acquired | 6,588,759 | 7,570,300 |
Goodwill | 2,765,570 | 2,765,570 |
Other assets | 4,297,048 | 9,310,040 |
Total Assets | 982,173,054 | 952,421,565 |
Liabilities | ||
Future policy benefits and unpaid claims | 604,746,951 | 584,067,692 |
Unearned premium reserve | 4,222,410 | 4,469,771 |
Bank and other loans payable | 157,450,925 | 152,140,679 |
Deferred pre-need cemetery and mortuary contract revenues | 12,873,068 | 12,360,249 |
Cemetery perpetual care obligation | 3,710,740 | 3,598,580 |
Accounts payable | 3,613,100 | 4,213,109 |
Other liabilities and accrued expenses | 29,655,087 | 34,693,485 |
Income taxes | 17,332,783 | 24,318,869 |
Total liabilities | 833,605,064 | 819,862,434 |
Common Stock: | ||
Additional paid-in capital | 38,125,042 | 34,813,246 |
Accumulated other comprehensive income, net of taxes | 603,170 | 264,822 |
Retained earnings | 77,520,951 | 67,409,204 |
Treasury stock, at cost - 537,203 Class A shares and -0- Class C shares in 2017; 704,122 Class A shares and -0- Class C shares in 2016 | (931,075) | (1,370,611) |
Total stockholders' equity | 148,567,990 | 132,559,131 |
Total Liabilities and Stockholders' Equity | 982,173,054 | 952,421,565 |
Class A Common Stock | ||
Common Stock: | ||
Common stock | 29,071,154 | 27,638,012 |
Class B Common Stock | ||
Common Stock: | ||
Common stock | ||
Class C Common Stock | ||
Common Stock: | ||
Common stock | 4,178,748 | 3,804,458 |
Preferred Stock | ||
Preferred Stock: | ||
Preferred stock |
Balance Sheet Parenthetical
Balance Sheet Parenthetical - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Allowance for losses on mortgage loans held for investment | $ 1,768,796 | $ 1,748,783 |
Accumulated depreciation on real estate held for investment | 18,788,869 | 16,138,439 |
Allowance for doubtful accounts on other investments and policy loans | 846,641 | 1,119,630 |
Fair value of loans held for sale | 133,414,188 | |
Allowance for doubtful accounts on receivables | 1,544,518 | 2,355,482 |
Fair value of restricted assets | 809,958 | 736,603 |
Fair value of cemetery perpetual care trust investments | $ 682,315 | $ 698,202 |
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 | 14,535,577 | 13,819,006 |
Treasury Stock | 537,203 | 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 | 2,089,374 | 1,902,229 |
Income Statement
Income Statement - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues: | ||
Insurance premiums and other considerations | $ 70,412,476 | $ 64,501,017 |
Net investment income | 35,062,968 | 31,978,601 |
Net mortuary and cemetery sales | 12,657,117 | 12,267,640 |
Realized losses on investments and other assets | (2,948,482) | (176,387) |
Other than temporary impairments on investments | (774,339) | (270,358) |
Mortgage fee income | 153,797,171 | 189,146,639 |
Other income | 8,719,179 | 6,887,749 |
Total revenues | 276,926,090 | 304,334,901 |
Benefits and expenses: | ||
Death benefits | 33,256,001 | 31,033,222 |
Surrenders and other policy benefits | 2,839,017 | 2,354,158 |
Increase in future policy benefits | 23,622,750 | 21,322,195 |
Amortization of deferred policy and pre-need acquisition costs and value of business acquired | 8,480,250 | 8,003,175 |
Selling, general and administrative expenses: | ||
Commissions | 68,103,017 | 88,634,494 |
Personnel | 70,328,830 | 70,254,479 |
Advertising | 5,754,740 | 6,425,277 |
Rent and rent related | 8,710,694 | 8,448,120 |
Depreciation on property and equipment | 2,220,693 | 2,182,724 |
Provision for loan loss reserve | 1,700,000 | |
Costs related to funding mortgage loans | 8,663,223 | 9,191,488 |
Other expenses | 29,431,599 | 28,183,427 |
Interest expense | 6,037,332 | 5,111,868 |
Cost of goods and services sold - mortuaries and cemeteries | 1,945,832 | 1,787,043 |
Total benefits and expenses | 269,393,978 | 284,631,670 |
Earnings before income taxes | 7,532,112 | 19,703,231 |
Income tax benefit (expense) | 6,580,822 | (7,514,604) |
Net earnings | $ 14,112,934 | $ 12,188,627 |
Net earnings per Class A Equivalent common share (1) | $ 0.88 | $ 0.78 |
Net earnings per Class A equivalent common share - assuming dilution (1) | $ 0.87 | $ 0.77 |
Weighted average Class A equivalent common shares outstanding (1) | 15,972,329 | 15,575,632 |
Weighted average Class A equivalent common shares outstanding-assuming dilution (1) | 16,285,930 | 15,912,592 |
Comprehensive Income Statement
Comprehensive Income Statement - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Comprehensive Income Statement | ||
Net earnings | $ 14,112,934 | $ 12,188,627 |
Other comprehensive income: | ||
Unrealized gains on available for sale securities | 511,974 | 1,156,918 |
Unrealized gains on derivative instruments | 3,308 | 10,639 |
Other comprehensive income, before income tax | 515,282 | 1,167,557 |
Income tax expense | (176,934) | (403,377) |
Other comprehensive income, net of income tax | 338,348 | 764,180 |
Comprehensive income | $ 14,451,282 | $ 12,952,807 |
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 | 12,188,627 | 12,188,627 | |||||
Other comprehensive income | 764,180 | 764,180 | |||||
Stock based compensation expense | 343,577 | 343,577 | |||||
Exercise of stock options | 85,268 | 209,950 | (179,112) | 116,106 | |||
Sale of treasury stock | 621,144 | 808,818 | 1,429,962 | ||||
Stock Dividends | 1,315,838 | 193,934 | 3,795,055 | (5,304,827) | |||
Conversion Class C to Class A | 18,706 | (18,706) | |||||
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 | 14,112,934 | 14,112,934 | |||||
Other comprehensive income | 338,348 | 338,348 | |||||
Stock based compensation expense | 395,603 | 395,603 | |||||
Exercise of stock options | 16,366 | 206,804 | (213,323) | 9,847 | |||
Sale of treasury stock | 712,591 | 822,270 | 1,534,861 | ||||
Purchase of treasury stock | (382,734) | (382,734) | |||||
Stock Dividends | 1,385,270 | 198,992 | 2,416,925 | (4,001,187) | |||
Conversion Class C to Class A | 31,506 | (31,506) | |||||
Balance at Dec. 31, 2017 | $ 29,071,154 | $ 4,178,748 | $ 38,125,042 | $ 603,170 | $ 77,520,951 | $ (931,075) | $ 148,567,990 |
Statement of Cash Flows
Statement of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | ||
Net earnings | $ 14,112,934 | $ 12,188,627 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Realized losses on investments and other assets | 2,948,482 | 176,387 |
Other than temporary impairments on investments | 774,339 | 270,358 |
Depreciation | 6,280,438 | 5,579,259 |
Provision for loan losses and doubtful accounts | 1,154,071 | 1,188,599 |
Net amortization of deferred fees and costs, premiums and discounts | 96,509 | 653,761 |
Provision for deferred income taxes | (7,752,028) | 6,130,644 |
Policy and pre-need acquisition costs deferred | (19,005,268) | (16,943,538) |
Policy and pre-need acquisition costs amortized | 7,498,709 | 6,829,702 |
Value of business acquired amortized | 981,541 | 1,173,473 |
Mortgage servicing rights, additions | (6,085,352) | (8,603,154) |
Amortization of mortgage servicing rights | 3,580,777 | 2,410,547 |
Stock based compensation expense | 395,603 | 343,577 |
Benefit plans funded with treasury stock | 1,534,861 | 1,429,962 |
Net change in fair value of loans held for sale | (4,180,777) | |
Originations of loans held for sale | (2,545,755,713) | (3,098,710,299) |
Proceeds from sales of loans held for sale | 2,671,097,747 | 3,246,127,714 |
Net gains on sales of loans held for sale | (105,368,129) | (137,682,984) |
Change in assets and liabilities: | ||
Land and improvements held for sale | 86,574 | 108,160 |
Future policy benefits and unpaid claims | 22,815,274 | 17,989,595 |
Other operating assets and liabilities | (892,550) | (5,125,376) |
Net cash provided by operating activities | 44,318,042 | 35,535,014 |
Fixed maturity securities held to maturity: | ||
Purchase - fixed maturity securities | (61,232,155) | (11,386,383) |
Calls and maturities - fixed maturity securities | 15,773,732 | 15,343,488 |
Equity securities available for sale: | ||
Purchase - equity securities | (5,301,353) | (4,980,320) |
Sales - equity securities | 9,430,548 | 4,523,034 |
Purchases of short-term investments | (32,865,263) | (18,228,912) |
Sales of short-term investments | 60,425,303 | 12,943,083 |
Net changes in restricted assets | (1,409,990) | (981,433) |
Net changes in cemetery perpetual care trust investments | (377,317) | (1,082,969) |
Mortgage loans held for investment, policy loans, and other investments made | (455,821,383) | (469,593,661) |
Payments received for mortgage loans held for investment, policy loans, and other investments | 433,033,724 | 446,242,429 |
Purchases of property and equipment | (911,007) | (3,566,511) |
Sale of property and equipment | 24,978 | 47,293 |
Purchases of real estate held for investment | (14,751,923) | (26,634,840) |
Sale of real estate held for investment | 13,784,541 | 6,093,308 |
Cash paid for purchase of subsidiaries, net of cash acquired | (4,328,520) | |
Net cash used in investing activities | (40,197,565) | (55,590,914) |
Cash flows from financing activities: | ||
Investment contract receipts | 12,213,843 | 11,349,276 |
Investment contract withdrawals | (14,912,154) | (13,620,998) |
Proceeds from stock options exercised | $ 9,847 | 116,106 |
Purchase of treasury stock | (382,734) | |
Repayment of bank loans | $ (2,796,258) | (1,680,678) |
Proceeds from bank borrowings | 19,660,744 | 14,500,950 |
Net change in warehouse line borrowings for loans held for sale | (11,585,534) | 8,325,432 |
Net cash provided by financing activities | 2,207,754 | 18,990,088 |
Net change in cash and cash equivalents | 6,328,231 | (1,065,812) |
Cash and cash equivalents at beginning of year | 38,987,430 | 40,053,242 |
Cash and cash equivalents at end of year | 45,315,661 | 38,987,430 |
Cash paid during the year for: | ||
Interest (net of amount capitalized) | 5,976,461 | 5,119,459 |
Income taxes | 581,556 | 2,667,918 |
Non Cash Investing and Financing Activities: | ||
Transfer of loans held for sale to mortgage loans held for investment | 39,932,516 | 12,578,743 |
Accrued real estate construction costs and retainage | 258,961 | 7,358,922 |
Mortgage loans held for investment foreclosed into real estate held for investment | 1,576,196 | $ 2,075,714 |
Transfer of cemetery land and improvements to property and equipment | $ 643,329 |
1) Significant Accounting Polic
1) Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
1) Significant Accounting Policies | 1) Significant Accounting Policies General Overview of Business Security National Financial Corporation and its wholly owned subsidiaries (the “Company”) operate in three main business segments: life insurance, cemetery and mortuary, and mortgages. The life insurance segment is engaged in the business of selling and servicing selected lines of life insurance, annuity products and accident and health insurance marketed primarily in the Intermountain West, California and eleven southern states. The cemetery and mortuary segment of the Company consists of eight mortuaries and five cemeteries in Utah and one cemetery in California. The mortgage segment is an approved government and conventional lender that originates and underwrites residential and commercial loans for new construction, existing homes and real estate projects primarily in Florida, Nevada, Texas, and Utah. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (GAAP). The presentation of certain amounts in prior years has 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 stockholders’ equity. Additionally, see the discussion regarding correction of errors in Notes 22 and 23. Principles of Consolidation These consolidated financial statements include the financial statements of the Company and its majority owned subsidiaries. All intercompany transactions and accounts have been eliminated in consolidation. Use of Estimates Management of the Company has made a number of estimates and assumptions related to the reported amounts of assets and liabilities, reported amounts of revenues and expenses, and the disclosure of contingent assets and liabilities to prepare these financial statements in conformity with GAAP. 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; 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. Investments The Company’s management determines the appropriate classifications of investments in fixed maturity securities and equity securities at the acquisition date and re-evaluates the classifications at each balance sheet date. Fixed maturity securities held to maturity are carried at cost, adjusted for amortization of premium or accretion of discount. Although the Company has the ability and intent to hold these investments to maturity, infrequent and unusual conditions could occur under which it would sell certain of these securities. Those conditions include unforeseen changes in asset quality, significant changes in tax laws, and changes in regulatory capital requirements or permissible investments. Equity securities available for sale are carried at estimated fair value. Changes in fair values net of income taxes are reported as unrealized appreciation or depreciation and recorded as an adjustment directly to stockholders’ equity and, accordingly, have no effect on net income. 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. Real estate held for investment is carried at cost, less accumulated depreciation provided on a straight line basis over the estimated useful lives of the properties, or is adjusted to a new basis for impairment in value, if any. Included are foreclosed properties which the Company intends to hold for investment purposes. These properties are recorded at the lower of cost or fair value upon foreclosure. Policy loans and other investments are carried at the aggregate unpaid balances, less allowances for possible losses. Short-term investments are carried at cost and consist of money market funds. Realized gains and losses on investments arise when investments are sold (as determined on a specific identification basis) or are other than temporarily impaired. If in management’s judgment a decline in the value of an investment below cost is other than temporary, the cost of the investment is written down to fair value with a corresponding charge to earnings. Factors considered in judging whether an impairment is other than temporary include: the financial condition, business prospects and credit worthiness of the issuer, the length of time that fair value has been less than cost, the relative amount of the decline, and the Company’s ability and intent to hold the investment until the fair value recovers, which is not assured. Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. The Company maintains its cash in bank deposit accounts, which at times exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. Loans Held for Sale Mortgage loans held for sale prior to July 1, 2017 were carried at the lower of cost or market net of direct selling revenues and costs. Based on the short-term nature of these assets, the Company had no related allowance for loan losses recorded for these assets. On July 1, 2017 the Company elected the fair value option for loans held for sale. See Note 3 and Note 17 to Consolidated Financial Statements for additional disclosures regarding loans held for sale. Mortgage Fee Income Mortgage fee income consists of origination fees, processing fees, interest income and certain other income related to the origination of mortgage loans held for sale. Mortgage loans held for sale prior to July 1, 2017 were shown on the Company’s consolidated balance sheets at the lower of cost or market and all revenues and costs were deferred until the loans were sold to a third-party investor. On July 1, 2017, the Company made an election to use fair value accounting for all mortgage loans that are held for sale. Accordingly, all revenues and costs are now recognized when the mortgage loan is funded and any changes in fair value are shown as a component of mortgage fee income. See Note 3 and Note 17 to Consolidated Financial Statements for additional disclosures regarding loans held for sale. The Company, through its mortgage subsidiaries, sells mortgage loans to third-party investors without recourse unless defects are identified in the representations and warranties made at loan sale. It may be required, however, to repurchase a loan or pay a fee instead of repurchase under certain events, which include the following: · · · · · · · Loan purchase commitments generally specify a date 30 to 45 days after delivery upon which the underlying loans should be settled. Depending on market conditions, these commitment settlement dates can be extended at a cost to the Company. It is the Company's policy to cure any documentation problems regarding such loans at a minimal cost for up to a six-month time period and to pursue efforts to enforce loan purchase commitments from third-party investors concerning the loans. The Company believes that six months allows adequate time to remedy any documentation issues, to enforce purchase commitments, and to exhaust other alternatives. Remedial methods include the following: · · · · · Once purchase commitments have expired and other alternatives to remedy are exhausted, which could be earlier than the six-month time period, the loans are repurchased and transferred to the long-term investment portfolio at the lower of cost or fair value and previously recorded mortgage fee income that was to be received from a third-party investor is written off against the loan loss reserve. Determining Lower of Cost or Market Cost for loans held for sale is equal to the amount paid to the warehouse bank and the amount originally funded by the Company. Market value is often difficult to determine, but is based on the following: · · · · The appraised value of the real estate underlying the original mortgage loan adds support to the Company’s determination of fair value because if the loan becomes delinquent, the Company has sufficient value to collect the unpaid principal balance or the carrying value of the loan, thus minimizing credit risk. In determining the market value on the date of repurchase, the Company considers the total value of all of the loans because any sale of loans would be made as a pool. The majority of loans originated are sold to third-party investors. The amounts expected to be sold to investors are shown on the consolidated balance sheets as loans held for sale. Loan Loss Reserve The loan loss reserve is an estimate of probable losses at the balance sheet date that the Company will realize in the future on loans held for sale. The Company may be required to reimburse third-party investors for costs associated with early payoff of loans within the first six months of such loans and to repurchase loans where there is a default in any of the first four monthly payments to the investors or, in lieu of repurchase, to pay a negotiated fee to the investors. The Company’s estimates are based upon historical loss experience and the best estimate of the probable loan loss liabilities. Upon completion of a transfer that satisfies the conditions to be accounted for as a sale, the Company initially measures at fair value liabilities incurred in a sale relating to any guarantee or recourse provisions. The Company accrues a monthly allowance for indemnification losses to investors based on total production. This estimate is based on the Company’s historical experience and is included as a component of mortgage fee income. Subsequent updates to the recorded liability from changes in assumptions are recorded in selling, general and administrative expenses. The estimated liability for indemnification losses is included in other liabilities and accrued expenses. The loan loss reserve analysis involves mortgage loans that have been sold to third-party investors, which were believed to have met investor underwriting guidelines at the time of sale, where the Company has received a demand from the investor. There are generally three types of demands: make whole, repurchase, or indemnification. These types of demands are more particularly described as follows: Make whole demand Repurchase demand Indemnification demand The Company believes the allowance for loan losses and the loan loss reserve represent probable loan losses incurred as of the balance sheet date. Additional information related to the Loan Loss Reserve is included in Note 3. Restricted Assets Restricted assets are assets held in a trust account for future mortuary services and merchandise and consist of cash and cash equivalents; participations in mortgage loans held for investment with Security National Life Insurance Company (“Security National Life”); mutual funds carried at estimated fair value; equity securities carried at estimated fair value; and a surplus note with Security National Life. Restricted assets also represents escrows held for borrowers and investors under servicing and appraisal agreements relating to mortgage loans, funds held by warehouse banks in accordance with loan purchase agreements and funds held in escrow for certain real estate construction development projects. Additionally, the Company elected to fund its medical benefit safe-harbor limit based on 35% of the qualified direct costs for the preceding year, and has included this amount as a component of restricted cash. Cemetery Perpetual Care Trust Investments Cemetery endowment care trusts have been set up for four of the six cemeteries owned by the Company. Of the six cemeteries owned by the Company, four cemeteries are endowment care properties. Under endowment care arrangements a portion of the price for each lot sold is withheld and invested in a portfolio of investments similar to those described in the prior paragraph. The earnings stream from the investments is designed to fund future maintenance and upkeep of the cemetery. Cemetery Land and Improvements The development of a cemetery involves not only the initial acquisition of raw land but the installation of roads, water lines, landscaping and other costs to establish a marketable cemetery lot. The costs of developing the cemetery are shown as an asset on the balance sheet. The amount on the balance sheet is reduced by the total cost assigned to the development of a particular lot when the criterion for recognizing a sale of that lot is met. Deferred Policy Acquisition Costs and Value of Business Acquired Commissions and other costs, net of commission and expense allowances for reinsurance ceded, that vary with and are primarily related to the production of new insurance business have been deferred. Deferred policy acquisition costs (“DAC”) for traditional life insurance are amortized over the premium paying period of the related policies using assumptions consistent with those used in computing policy benefit reserves. For interest-sensitive insurance products, deferred policy acquisition costs are amortized generally in proportion to the present value of expected gross profits from surrender charges, investment, mortality and expense margins. This amortization is adjusted when estimates of current or future gross profits to be realized from a group of products are reevaluated. Deferred acquisition costs are written off when policies lapse or are surrendered. The Company follows GAAP when accounting for DAC on internal replacements of insurance and investment contracts. An internal replacement is a modification in product benefits, features, rights or coverage that occurs by the exchange of a contract for a new contract, or by amendment, endorsement, or rider to contract, or by the election of a feature or coverage within a contract. Modifications that result in a replacement contract that is substantially changed from the replaced contract are accounted for as an extinguishment of the replaced contract. Unamortized DAC, unearned revenue liabilities and deferred sales inducements from the replaced contract are written-off. Modifications that result in a contract that is substantially unchanged from the replaced contract are accounted for as a continuation of the replaced contract. Value of business acquired is the present value of estimated future profits of the acquired business and is amortized similar to deferred policy acquisition costs. Mortgage Servicing Rights Mortgage Service Rights (“MSR”) arise from contractual agreements between the Company and third-party investors (or their agents) when mortgage loans are sold. Under these contracts, the Company is obligated to retain and provide loan servicing functions on loans sold, in exchange for fees and other remuneration. The servicing functions typically performed include, among other responsibilities, collecting and remitting loan payments; responding to borrower inquiries; accounting for principal and interest, holding custodial (impound) funds for payment of property taxes and insurance premiums; counseling delinquent mortgagors; and supervising the acquisition of real estate owned and property dispositions. The total residential mortgage loans serviced for others consist primarily of agency conforming fixed-rate mortgage loans. The value of MSRs is derived from the net cash flows associated with the servicing contracts. The Company receives a servicing fee of generally about 0.250% annually on the remaining outstanding principal balances of the loans. Based on the result of the cash flow analysis, an asset or liability is recorded for mortgage servicing rights. The servicing fees are collected from the monthly payments made by the mortgagors. The Company generally receives other remuneration including rights to various mortgagor-contracted fees such as late charges, and collateral reconveyance charges and the Company is generally entitled to retain the interest earned on funds held pending remittance of mortgagor principal, interest, tax and insurance payments. Contractual servicing fees and late fees are included in other revenues on the consolidated statements of earnings. The Company’s subsequent accounting for MSRs is based on the class of MSRs. The Company has identified two classes of MSRs: MSRs backed by mortgage loans with initial term of 30 years and MSRs backed by mortgage loans with initial term of 15 years. The Company distinguishes between these classes of MSRs due to their differing sensitivities to change in value as the result of changes in market. After being initially recorded at fair value, MSRs backed by mortgage loans are accounted for using the amortization method. Amortization expense is included in other expenses on the consolidated statements of earnings. MSR amortization is determined by amortizing the MSR balance in proportion to, and over the period of the estimated future net servicing income of the underlying financial assets. Interest rate risk, prepayment risk, and default risk are inherent risks in MSR valuation. Interest rate changes largely drive prepayment rates. Refinance activity generally increases as rates decline. A significant decrease in rates beyond expectation could cause a decline in the value of the MSR. On the contrary, if rates increase borrowers are less likely to refinance or prepay their mortgage, which extends the duration of the loan and MSR values are likely to rise. Because of these risks, discount rates and prepayment speeds are used to estimate the fair value. 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. Property and Equipment Property and equipment are recorded at cost. Depreciation is calculated principally on the straight-line method over the estimated useful lives of the assets which range from three to forty years. Leasehold improvements paid for by the Company as a lessee are amortized over the lesser of the useful life or remaining lease terms. Long-lived Assets Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the related carrying amount may not be recoverable. When required, impairment losses on assets to be held and used are recognized based on the fair value of the asset, and long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. No impairment of long-lived assets has been recognized in the accompanying financial statements. 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 mortgage-backed securities (“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 loan commitments and forward sale commitments are shown in current earnings as a component of mortgage fee income on the consolidated statements of earnings. Mortgage banking derivatives are shown in other assets and other liabilities and accrued expenses on the consolidated balance sheets. 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 net changes in the fair value of call and put options are shown in current earnings as a component of realized gains (losses) on investments and other assets. Call and put options are shown in other liabilities and accrued expenses on the consolidated balance sheets. Allowance for Doubtful Accounts and Loan Losses and Impaired Loans The Company records an allowance and recognizes an expense for potential losses from mortgage loans held for investment, other investments and receivables in accordance with GAAP. Receivables are the result of cemetery and mortuary operations, mortgage loan operations and life insurance operations. The allowance is based upon the Company’s historical experience for collectively evaluated impairment. Other allowances are based upon receivables individually evaluated for impairment. Collectability of the cemetery and mortuary receivables is significantly influenced by current economic conditions. The critical issues that impact recovery of mortgage loan operations are interest rate risk, loan underwriting, new regulations and the overall economy. The Company provides 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. See the schedules in Note 2 for additional information. The allowance for losses on mortgage loans held for investment could change based on changes in the value of the underlying collateral, the performance status of the loans, or the 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) Future Policy Benefits and Unpaid Claims Future policy benefit reserves for traditional life insurance are computed using a net level method, including assumptions as to investment yields, mortality, morbidity, withdrawals, and other assumptions based on the life insurance subsidiaries’ experience, modified as necessary to give effect to anticipated trends and to include provisions for possible unfavorable deviations. Such liabilities are, for some plans, graded to equal statutory values or cash values at or prior to maturity. The range of assumed interest rates for all traditional life insurance policy reserves was 4% to 10%. Benefit reserves for traditional limited-payment life insurance policies include the deferred portion of the premiums received during the premium-paying period. Deferred premiums are recognized as income over the life of the policies. Policy benefit claims are charged to expense in the period the claims are incurred. Increases in future policy benefits are charged to expense. 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 3% to 6.5%. The Company records an unpaid claims liability for claims in the course of settlement equal to the death benefit amount less any reinsurance recoverable amount for claims reported. There is also an unpaid claims liability for claims incurred but not reported. This liability is based on the historical experience of the net amount of claims that were reported in reporting periods subsequent to the reporting period when claims were incurred. This amount is adjusted to include a margin for adverse deviation. Participating Insurance Participating business constituted 2% of insurance in force for the years ended 2017 and 2016. The provision for policyholders’ dividends included in policyholder obligations is based on dividend scales anticipated by management. Amounts to be paid are determined by the Board of Directors. Recognition of Insurance Premiums and Other Considerations Premiums Reinsurance The Company follows the procedure of reinsuring risks in excess of $100,000 to provide for greater diversification of business to allow management to control exposure to potential losses arising from large risks, and provide additional capacity for growth. The Company remains liable for amounts ceded in the event the reinsurers are unable to meet their obligations. The Company entered into coinsurance agreements with unaffiliated insurance companies under which the Company assumed 100% of the risk for certain life insurance policies and certain other policy-related liabilities of the insurance company. Reinsurance premiums, commissions, expense reimbursements, and reserves related to reinsured business are accounted for on a basis consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts. Expense allowances received in connection with reinsurance ceded are accounted for as a reduction of the related policy acquisition costs and are deferred and amortized accordingly. Pre-need Sales and Costs Pre-need contract sales of funeral services and caskets - revenue and costs associated with the sales of pre-need funeral services and caskets are deferred until the services are performed or the caskets are delivered. Sales of cemetery interment rights (cemetery burial property) - revenue and costs associated with the sale of cemetery interment rights are recognized in accordance with the retail land sales provisions based on GAAP. Under GAAP, recognition of revenue and associated costs from constructed cemetery property must be deferred until 10% of the sales price has been collected. Pre-need contract sales of cemetery merchandise (primarily markers and vaults) - revenue and costs associated with the sale of pre-need cemetery merchandise is deferred until the merchandise is delivered. Pre-need contract sales of cemetery services (primarily merchandise delivery, installation fees and burial opening and closing fees) - revenue and costs associated with the sales of pre-need cemetery services are deferred until the services are performed. Prearranged funeral and pre-need cemetery customer acquisition costs - costs incurred related to obtaining new pre-need contract cemetery and prearranged funeral services are accounted for under the guidance of the provisions based on GAAP. Obtaining costs, which include only costs that vary with and are primarily related to the acquisition of new pre-need cemetery and prearranged funeral services, are deferred until the merchandise is delivered or services are performed. Revenues and costs for at need sales are recorded when a valid contract exists, the services are performed, collection is reasonably as |
2) Investments
2) Investments | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
2) Investments | 2) Investments The Company’s investments as of December 31, 2017 are summarized as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value December 31, 2017 Fixed maturity securities held to maturity carried at amortized cost: U.S. Treasury securities and obligations of U.S. Government agencies $ 54,077,069 $ 211,824 $ (579,423) $ 53,709,470 Obligations of states and political subdivisions 5,843,176 112,372 (71,013) 5,884,535 Corporate securities including public utilities 158,350,727 14,336,452 (1,007,504) 171,679,675 Mortgage-backed securities 9,503,016 210,652 (162,131) 9,551,537 Redeemable preferred stock 623,635 49,748 (191) 673,192 Total fixed maturity securities held to maturity $ 228,397,623 $ 14,921,048 $ (1,820,262) $ 241,498,409 Equity securities available for sale at estimated fair value: Common stock: Industrial, miscellaneous and all other $ 6,002,931 $ 667,593 $ (632,669) $ 6,037,855 Total securities available for sale $ 6,002,931 $ 667,593 $ (632,669) $ 6,037,855 Mortgage loans held for investment at amortized cost: Residential $ 102,527,111 Residential construction 50,157,533 Commercial 54,954,865 Less: Unamortized deferred loan fees, net (1,659,828) Less: Allowance for loan losses (1,768,796) Total mortgage loans held for investment $ 204,210,885 Real estate held for investment - net of accumulated depreciation: Residential $ 68,329,917 Commercial 72,968,789 Total real estate held for investment $ 141,298,706 Other investments and policy loans at amortized cost: Policy loans $ 6,531,352 Insurance assignments 36,301,739 Federal Home Loan Bank stock 689,400 Other investments 3,219,622 Less: Allowance for doubtful accounts (846,641) Total policy loans and other investments $ 45,895,472 Accrued investment income $ 3,644,077 Total investments $ 629,484,618 The Company’s investments as of December 31, 2016 are summarized as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value December 31, 2016 Fixed maturity securities held to maturity carried at amortized cost: 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 $ 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 Other investments and policy loans 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 Total investments $ 561,179,435 Fixed Maturity Securities The following tables summarize unrealized losses on fixed maturities securities, which are carried at amortized cost, at December 31, 2017 and 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 December 31, 2017 U.S. Treasury Securities and Obligations of U.S. Government Agencies $ 532,010 $ 51,606,699 $ 47,413 $ 643,380 $ 579,423 $ 52,250,079 Obligations of States and Political Subdivisions 296 214,882 70,717 2,225,021 71,013 2,439,903 Corporate Securities 167,786 11,551,865 839,718 13,193,258 1,007,504 24,745,123 Mortgage and other asset-backed securities 56,756 2,516,660 105,375 1,676,494 162,131 4,193,154 Redeemable preferred stock 191 11,421 - - 191 11,421 Total unrealized losses $ 757,039 $ 65,901,527 $ 1,063,223 $ 17,738,153 $ 1,820,262 $ 83,639,680 Unrealized Losses for Less than Twelve Months Fair Value Unrealized Losses for More than Twelve Months Fair Value Total Unrealized Loss Fair Value 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 and other asset-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 141 securities with fair value of 97.9% of amortized cost at December 31, 2017. There were 250 securities with fair value of 93.9% of amortized cost at December 31, 2016. During the years ended December 31, 2017 and 2016, an other than temporary decline in fair value resulted in the recognition of credit losses on fixed maturity securities of $493,371 and $100,000, 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 at December 31, 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 Estimated Fair Cost Value Held to Maturity: Due in 1 year $ 20,125,883 $ 20,299,016 Due in 2-5 years 69,849,085 70,873,975 Due in 5-10 years 49,842,819 52,444,399 Due in more than 10 years 78,453,185 87,656,290 Mortgage-backed securities 9,503,016 9,551,537 Redeemable preferred stock 623,635 673,192 Total held to maturity $ 228,397,623 $ 241,498,409 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 December 31, 2017, the Company did not have any outstanding amounts owed to FHLB and the estimated maximum borrowing capacity was $47,252,871. Equity Securities The following tables summarize unrealized losses on equity securities that were carried at estimated fair value based on quoted trading prices at December 31, 2017 and 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 December 31, 2017 Industrial, miscellaneous and all other $ 213,097 98 $ 419,572 81 $ 632,669 Total unrealized losses $ 213,097 98 $ 419,572 81 $ 632,669 Fair Value $ 847,718 $ 1,329,213 $ 2,176,931 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 market value of the equity securities available for sale was 77.5% and 81.4% of the original investment as of December 31, 2017 and 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 years ended December 31, 2017 and 2016, an other than temporary decline in the market value resulted in the recognition of an impairment loss on equity securities of $280,968 and $170,358, 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 December 31, 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 for the years ended December 31 are summarized as follows: 2017 2016 Fixed maturity securities held to maturity: Gross realized gains $ 179,182 $ 389,558 Gross realized losses (893,567) (132,124) Other than temporary impairments (493,371) (100,000) Equity securities available for sale: Gross realized gains 166,950 221,817 Gross realized losses (76,475) (61,242) Other than temporary impairments (280,968) (170,358) Other assets: Gross realized gains 3,410,076 349,252 Gross realized losses (5,734,648) (943,648) Total $ (3,722,821) $ (446,745) 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 for disposals of securities classified as held to maturity was $2,932,961 and $2,380,027 , for the years ended December 31, 2017 and 2016, respectively. The net realized loss and gain related to these disposals was $463,892 and $155,346 , for the years ended December 31, 2017 and 2016, respectively. Although the intent is to buy and hold a bond to maturity, the Company will sell a bond prior to maturity if conditions have changed within the entity that issued the bond to increase the risk of default to an unacceptable level. Major categories of net investment income for the years ended December 31, are as follows: 2017 2016 Fixed maturity securities held to maturity $ 10,626,400 $ 9,083,858 Equity securities available for sale 245,490 270,942 Mortgage loans held for investment 12,498,578 11,398,986 Real estate held for investment 11,703,947 10,969,828 Policy loans 488,561 498,444 Insurance assignments 13,289,818 11,876,836 Other investments 105,218 25,122 Short-term investments 543,528 268,988 Gross investment income 49,501,540 44,393,004 Investment expenses (14,438,572) (12,414,403) Net investment income $ 35,062,968 $ 31,978,601 Net investment income includes net investment income earned by the restricted assets of the cemeteries and mortuaries of $501,227 and $419,360 for the years ended December 31, 2017 and 2016, respectively. Net investment income on real estate consists primarily of rental revenue received under short-term leases. Investment expenses consist primarily of depreciation, property taxes, operating expenses of real estate and an estimated portion of administrative expenses relating to investment activities. Securities on deposit for regulatory authorities as required by law amounted to $9,264,977 and $9,269,121 at December 31, 2017 and 2016, respectively. The restricted securities are included in various assets under investments on the accompanying 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 segments in the form of acquisition, development and mortgage foreclosures. The Company reports real estate held for investment pursuant to the accounting policy discussed in Note 1 of the Notes to Consolidated Financial Statements. 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 8 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 $64,704,000 and $51,507,000 as of December 31, 2017 and 2016, respectively. The associated bank loan carrying values totaled approximately $40,994,000 and $21,831,000 as of December 31, 2017 and 2016, respectively. During the years ended December 31, 2017 and 2016, the Company recorded impairment losses on commercial real estate held for investment of $5,350,967 and $900,000, respectively. These impairment losses are included in realized gains (losses) on investment and other assets on the consolidated statements of earnings. The Company’s investment in commercial real estate for the years ended December 31, are summarized as follows: Net Ending Balance Total Square Footage 2017 2016 2017 2016 Arizona $ 4,000 (1) $ 450,538 (1) - 16,270 Arkansas 96,169 100,369 3,200 3,200 Kansas 7,200,000 12,450,297 222,679 222,679 Louisiana 493,197 518,700 7,063 7,063 Mississippi 3,725,039 3,818,985 33,821 33,821 New Mexico 7,000 (1) 7,000 (1) - - Texas 335,000 3,734,974 23,470 23,470 Utah 61,108,384 (2) 47,893,073 433,244 433,244 $ 72,968,789 $ 68,973,936 723,477 739,747 (1) Includes Vacant 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 December 31, 2017, SNRE manages 105 residential properties in 9 states across the United States which includes a newly constructed apartment complex, Dry Creek at East Village (“Dry Creek”), in Sandy Utah. See Note 25 regarding the disposition of Dry Creek. The net ending balance of residential real estate that serves as collateral for a bank borrowing was approximately $34,431,000 and $35,798,000, as of December 31, 2017 and 2016, respectively. The associated bank loan carrying value was approximately $26,773,000 and $27,377,000 as of December 31, 2017 and 2016, respectively. The net ending balance of foreclosed residential real estate included in residential real estate held for investment is $33,372,228 and $39,856,434 as of December 31, 2017 and 2016, respectively. The Company’s investment in residential real estate for the years ended December 31, are summarized as follows: Net Ending Balance 2017 2016 Arizona $ 217,105 $ 742,259 California 5,463,878 5,848,389 Colorado - 364,489 Florida 7,000,684 8,327,355 Hawaii 712,286 - Ohio 10,000 - Oklahoma 17,500 46,658 Texas 509,011 1,091,188 Utah 54,113,272 59,485,466 Washington 286,181 286,181 $ 68,329,917 $ 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 70,000 square feet, or 10% of the overall commercial real estate holdings. As of December 31, 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 21,521 27% 121 West Election Road, Draper, UT Mortgage Sales 78,978 19% (1) This asset is included in property and equipment on the consolidated balance sheets Mortgage Loans Held for Investment The Company reports mortgage loans held for investment pursuant to the accounting policy discussed in Note 1 of the Notes to Consolidated Financial Statements. 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 December 31, 2017, the Company has 42%, 27%, 12%, 14% and 5% of its mortgage loans from borrowers located in the states of Utah, California, Florida, Texas and Nevada, respectively. The mortgage loan balances on the consolidated balance sheet are reflected net of an allowance for loan losses of $1,768,796 and $1,748,783 at December 31, 2017 and 2016, respectively. The Company establishes a valuation allowance for credit losses in its portfolio. The following is a summary of the allowance for loan losses as a contra-asset account for the periods presented: Allowance for Credit Losses and Recorded Investment in Mortgage Loans Held for Investment Years Ended December 31 Commercial Residential Residential Construction Total 2017 Allowance for credit losses: Beginning balance $ 187,129 $ 1,461,540 $ 100,114 $ 1,748,783 Charge-offs - (351,357) (64,894) (416,251) Provision - 436,264 - 436,264 Ending balance $ 187,129 $ 1,546,447 $ 35,220 $ 1,768,796 Ending balance: individually evaluated for impairment $ - $ 237,560 $ - $ 237,560 Ending balance: collectively evaluated for impairment $ 187,129 $ 1,308,887 $ 35,220 $ 1,531,236 Mortgage loans: Ending balance $ 54,954,865 $ 102,527,111 $ 50,157,533 $ 207,639,509 Ending balance: individually evaluated for impairment $ - $ 4,923,552 $ 461,834 $ 5,385,386 Ending balance: collectively evaluated for impairment $ 54,954,865 $ 97,603,559 $ 49,695,699 $ 202,254,123 2016 Allowance for credit losses: Beginning balance $ 187,129 $ 1,560,877 $ 100,114 $ 1,848,120 Charge-offs - (420,135) - (420,135) Provision - 320,798 - 320,798 Ending balance $ 187,129 $ 1,461,540 $ 100,114 $ 1,748,783 Ending balance: individually evaluated for impairment $ - $ 187,470 $ - $ 187,470 Ending balance: collectively evaluated for impairment $ 187,129 $ 1,274,070 $ 100,114 $ 1,561,313 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 held for investment for the periods presented. Age Analysis of Past Due Mortgage Loans Held for Investment Years Ended December 31 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 2017 Commercial $ 1,943,495 $ - $ - $ - $ 1,943,495 $ 53,011,370 $ 54,954,865 $ (187,129) $ (67,411) $ 54,700,325 Residential 6,613,479 495,347 3,591,333 1,332,219 12,032,378 90,494,733 102,527,111 (1,546,447) (1,164,130) 99,816,534 Residential Construction - - 461,834 - 461,834 49,695,699 50,157,533 (35,220) (428,287) 49,694,026 Total $ 8,556,974 $ 495,347 $ 4,053,167 $ 1,332,219 $ 14,437,707 $ 193,201,802 $ 207,639,509 $ (1,768,796) $ (1,659,828) $ 204,210,885 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) There was not any interest income recognized on loans past due greater than 90 days or in foreclosure. Impaired Mortgage Loans Held for Investment Impaired mortgage loans held for investment 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 Years Ended December 31 Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized 2017 With no related allowance recorded: Commercial $ - $ - $ - $ 365,220 $ - Residential 3,322,552 3,322,552 - 3,290,094 - Residential construction 461,834 461,834 - 277,232 - With an allowance recorded: Commercial $ - $ - $ - $ - $ - Residential 1,601,000 1,601,000 237,560 1,350,115 - Residential construction - - - - - Total: Commercial $ - $ - $ - $ 365,220 $ - Residential 4,923,552 4,923,552 237,560 4,640,209 - Residential construction 461,834 461,834 - 277,232 - 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 Years Ended December 31 Commercial Residential Residential Construction Total 2017 2016 2017 2016 2017 2016 2017 2016 Performing $ 54,954,865 $ 51,333,630 $ 97,603,559 $ 55,677,084 $ 49,695,699 $ 40,735,222 $ 202,254,123 $ 147,745,936 Non-performing - 202,992 4,923,552 2,916,538 461,834 64,895 5,385,386 3,184,425 Total $ 54,954,865 $ 51,536,622 $ 102,527,111 $ 58,593,622 $ 50,157,533 $ 40,800,117 $ 207,639,509 $ 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 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 $204,083 and $172,000 as of December 31, 2017 and 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 Years Ended December 31 2017 2016 Commercial $ - $ 202,992 Residential 4,923,552 2,916,538 Residential construction 461,834 64,895 Total $ 5,385,386 $ 3,184,425 Principal Amounts Due The amortized cost and contractual payments on mortgage loans held for investment by category as of December 31, 2017 are shown below. Expected principal payments may differ from contractual obligations because certain borrowers may elect to pay off mortgage obligations with or without early payment penalties. Principal Principal Principal Amounts Amounts Amounts Due in Due in Due Total 1 Year 2-5 Years Thereafter Residential $ 102,527,111 $ 5,454,776 $ 40,995,574 $ 56,076,761 Residential Construction 50,157,533 42,763,420 7,394,113 - Commercial 54,954,865 36,690,847 15,674,563 2,589,455 Total $ 207,639,509 $ 84,909,043 $ 64,064,250 $ 58,666,216 |
3) Loans Held For Sale
3) Loans Held For Sale | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
3) Loans Held For Sale | 3) Loans Held for Sale Fair Value Option Election 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 consolidated statement of earnings. None of these loans are 90 or more days past due nor on nonaccrual status as of December 31, 2017. See Note 17 of the Notes to 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 of loans held for sale for the periods presented: As of December 31 2017 Aggregate fair value $ 133,414,188 Unpaid principal balance 129,233,411 Unrealized gain 4,180,777 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 for the years ended December 31, are as follows: 2017 2016 Loan fees $ 40,434,686 $ 44,341,501 Interest income 7,089,025 8,004,952 Secondary gains 108,756,613 140,651,103 Change in fair value of loan commitments (4,812,743) (862,163) Change in fair value of loans held for sale 4,180,777 - Provision for loan loss reserve (1,851,187) (2,988,754) Mortgage fee income $ 153,797,171 $ 189,146,639 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 which is included in other liabilities and accrued expenses: December 31 2017 2016 Balance, beginning of period $ 627,733 $ 2,805,900 Provision for current loan originations (1) 1,851,187 2,988,754 Additional provision for loan loss reserve - 1,700,000 Charge-offs, net of recaptured amounts 92,604 (6,866,921) Balance, at December 31 $ 2,571,524 $ 627,733 (1) Included in Mortgage fee income on the consolidated statements of earnings. 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. |
4) Receivables
4) Receivables | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
4) Receivables | 4) Receivables Receivables consist of the following: December 31 2017 2016 Trade contracts $ 3,608,379 $ 3,410,321 Receivables from sales agents 3,528,703 4,016,393 Held in Escrow – Southern Security - 107,388 Other 4,851,305 3,231,926 Total receivables 11,988,387 10,766,028 Allowance for doubtful accounts (1,544,518) (2,355,482) Net receivables $ 10,443,869 $ 8,410,546 |
5) Value of Business Acquired a
5) Value of Business Acquired and Goodwill | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
5) Value of Business Acquired and Goodwill | 5) Value of Business Acquired and Goodwill Information with regard to value of business acquired is as follows: December 31 2017 2016 Balance at beginning of year $ 7,570,300 $ 8,743,773 Value of business acquired - - Imputed interest at 7% 39,767 45,762 Amortization (1,021,308) (1,219,235) Net amortization charged to income (981,541) (1,173,473) Balance at end of year $ 6,588,759 $ 7,570,300 Presuming no additional acquisitions, net amortization charged to income is expected to approximate $919,000 , $854,000 , $766,000 , $713,000 , and $663,000 for the years 2018 through 2022. Actual amortization may vary based on changes in assumptions or experience. As of December 31, 2017, value of business acquired is being amortized over a weighted average life of 6.1 years. Information with regard to goodwill acquired is as follows: Goodwill of $2,765,570 is not amortized but tested annually for impairment. The annual impairment tests resulted in no impairment of goodwill. |
6) Property and Equipment
6) Property and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
6) Property and Equipment | 6) Property and Equipment The cost of property and equipment is summarized below: December 31 2017 2016 Land and buildings $ 8,689,302 $ 9,155,665 Furniture and equipment 16,952,404 19,548,521 25,641,706 28,704,186 Less accumulated depreciation (17,572,326) (19,912,664) Total $ 8,069,380 $ 8,791,522 Depreciation expense for the years ended December 31, 2017 and 2016 was $2,220,693 and $2,182,724 , respectively. During 2017, the Company transferred $643,329 of land from cemetery land and improvements to property and equipment. This transfer is shown as a non cash item on the consolidated statements of cash flows. |
7) Bank and Other Loans Payable
7) Bank and Other Loans Payable | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
7) Bank and Other Loans Payable | 7) Bank and Other Loans Payable Bank and other loans payable are summarized as follows: December 31 2017 2016 1.65% above the monthly LIBOR rate note payable in monthly installments of $13,741 including principal and interest, collateralized by real property with a book value of approximately $498,000, paid in full in November 2017. $ - $ 147,346 Mark to market of interest rate swaps (discussed below) adjustment, terminated in November 2017 - 3,308 6.50% note payable in monthly installments of $1,702 including principal and interest, collateralized by real property with a book value of approximately $271,000, due October 2041. 246,847 251,072 2.25% above the monthly LIBOR rate (1.56% at December 31, 2017) plus 1/16th of the monthly LIBOR rate note payable in monthly principal payments of $13,167 plus interest, collateralized by real property with a book value of approximately $4,457,000, due September 2021. 2,975,781 3,133,787 3.85% fixed note payable in monthly installments of $85,419 including principal and interest, collateralized by shares of Security National Life Insurance Company stock, due January 2018. 85,419 1,093,349 4.27% fixed note payable in monthly installments of $53,881 including principal and interest, collateralized by shares of Security National Life Insurance Company stock, due November 2021. 2,372,690 2,904,354 4.40% fixed note payable in monthly installments of $46,825 including principal and interest, collateralized by real property with a book value of approximately $11,837,000, due January 2026. 7,712,854 7,927,526 4.329% fixed note payable in monthly installments of $9,775 including principal and interest, collateralized by real property with a book value of approximately $3,004,000, due September 2025. 1,961,573 1,992,056 2.5% above the monthly LIBOR rate (1.56% at December 31, 2017) plus 1/16th of the monthly LIBOR rate construction loan payable, collateralized by real property with a book value of approximately $45,406,000, due August 2019. 28,343,684 8,777,941 2.25% above 90 day LIBOR rate (1.69% at December 31, 2017) note payable in monthly installments of approximately $125,000, collateralized by real property with a book value of approximately $34,431,000, due October 2019. 26,773,058 27,377,114 1 month LIBOR rate (1.56% at December 31, 2017) plus 3% loan purchase agreement with a warehouse line availability of $100,000,000, matures June 2018 61,298,220 76,843,180 1 month LIBOR rate (1.56% at December 31, 2017) plus 3% loan purchase agreement with a warehouse line availability of $100,000,000, matures September 2018 25,538,378 21,578,951 Other loans payable 142,421 110,695 Total bank and other loans 157,450,925 152,140,679 Less current installments 88,437,940 101,177,574 Bank and other loans, excluding current installments $ 69,012,985 $ 50,963,105 Revolving Lines of Credit The Company has a $2,000,000 revolving line-of-credit with a bank with interest payable at the prime rate minus .75% (3.75% at December 31, 2017), secured by the capital stock of Security National Life and maturing September 30, 2018, renewable annually. At December 31, 2017, the Company was contingently liable under a standby letter of credit aggregating $625,405, to be used as collateral to cover any contingency related to additional risk assessments pertaining to the Company's captive insurance program and under a standby letter of credit aggregating $48,220 . These standby letters of credit will draw on the line of credit if necessary. The Company does not expect any material losses to result from the issuance of the standby letter of credit because claims are not expected to exceed premiums paid. The Company also has a $2,500,000 revolving line-of-credit with a bank with interest payable at the overnight LIBOR rate plus 2.25% (3.68% at December 31, 2017) maturing September 30, 2018. At December 31, 2017, SecurityNational Mortgage was contingently liable under a standby letter of credit aggregating $1,250,000, to be used as collateral to cover any contingency relating to claims filed in states where SecurityNational Mortgage is licensed. This standby letter of credit will draw on the line of credit if necessary. The Company does not expect any material losses to result from the issuance of the standby letters of credit. As of December 31, 2017, there were no amounts outstanding under the revolving line-of-credit. Mortgage Warehouse Lines of Credit The Company, through its subsidiary SecurityNational Mortgage, has a $100,000,000 line of credit with Wells Fargo Bank N.A. The agreement charges interest at the 1-Month LIBOR rate plus 3% and matures on June 16, 2018. SecurityNational Mortgage is required to maintain an adjusted tangible net worth of $19,000,000, unrestricted cash of $10,000,000, indebtedness to adjusted tangible net worth of 12:1, liquidity overhead coverage of 1.75:1, and a quarterly gross profit of at least $1. The Company, through its subsidiary SecurityNational Mortgage, also uses a line of credit with Texas Capital Bank N.A. This agreement with the bank allows SecurityNational Mortgage to borrow up to $100,000,000 for the sole purpose of funding mortgage loans. SecurityNational Mortgage is currently approved to borrow $30,000,000 of the $100,000,000 available. The agreement charges interest at the 1-Month LIBOR rate plus 3% and matures on September 7, 2018. The Company is required to maintain an adjusted tangible net worth of $70,000,000, unrestricted cash of $15,000,000, and no two consecutive quarters with a net loss. In addition to financial covenants of these agreements, the Company is required to carry insurance policies for errors and omissions and general liability and was in compliance with all debt covenants as of December 31, 2017. The following tabulation shows the combined maturities of bank and other loans payable: 2018 $ 88,437,940 2019 55,674,420 2020 1,085,699 2021 3,456,607 2022 326,923 Thereafter 8,469,336 Total $ 157,450,925 Interest expense in 2017 and 2016 was $6,037,332 and $5,111,868 , respectively. |
8) Cemetery Perpetual Care Trus
8) Cemetery Perpetual Care Trust Investments and Obligation and Restricted Assets | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
8) Cemetery Perpetual Care Trust Investments and Obligation and Restricted Assets | 8) Cemetery Perpetual Care Trust Investments and Obligation and Restricted Assets State law requires the Company to pay into endowment care trusts a portion of the proceeds from the sale of certain cemetery property interment rights for cemeteries that have established an endowment care trust. These endowment care trusts are defined as variable interest entities pursuant to GAAP. Also, management has determined that the Company is the primary beneficiary of these trusts, as it absorbs both a majority of the losses and returns associated with the trusts. The Company has consolidated cemetery endowment care trust investments with a corresponding amount recorded as Cemetery Perpetual Care Obligation in the accompanying consolidated balance sheets . The components of the cemetery perpetual care investments and obligation are as follows: December 31 2017 2016 Cash and cash equivalents $ 997,498 $ 865,699 Fixed maturity securities, held to maturity, at amortized cost 943,211 885,729 Equity securities, at estimated fair value 682,315 698,202 Participating interests in mortgage loans held for investment with Security National Life 4,128 3,821 Real estate 1,996,411 1,678,434 Note receivables from Cottonwood Mortuary Singing Hills Cemetery and Memorial Estates eliminated in consolidation 1,667,621 1,725,714 Total cemetery perpetual care trust investments 6,291,184 5,857,599 Cemetery perpetual care obligation (3,710,740) (3,598,580) Trust investments in excess of trust obligations $ 2,580,444 $ 2,259,019 The Company has also established certain restricted assets to provide for future merchandise and service obligations incurred in connection with its pre-need sales for its cemetery and mortuary segment. Restricted cash also represents escrows held for borrowers and investors under servicing and appraisal agreements relating to mortgage loans, funds held by warehouse banks in accordance with loan purchase agreements and funds held in escrow for certain real estate construction development projects. Additionally, the Company elected to fund its medical benefit safe-harbor limit based on 35% of the qualified direct costs for the preceding year, and has included this amount as a component of restricted cash. These restricted cash items are for the CompanyÂ’s life insurance and mortgage segments. Restricted assets are summarized as follows: December 31 2017 2016 Cash and cash equivalents (1) $ 8,188,764 $ 7,089,134 Mutual funds, at estimated fair value 715,952 645,241 Fixed maturity securities, held to maturity, at amortized cost 1,130,088 990,613 Equity securities, at estimated fair value 94,006 91,362 Participating in mortgage loans held for investment with Security National Life 1,701,811 1,575,044 Total $ 11,830,621 $ 10,391,394 (1) Including cash and cash equivalents of $6,392,283 and $5,292,266 as of December 31, 2017 and 2016, respectively, for the life insurance and mortgage segments. A surplus note receivable in the amount of $4,000,000 at December 31, 2017 and 2016, from Security National Life, was eliminated in consolidation. See Notes 1 and 17 for additional information regarding restricted assets. |
9) Income Taxes
9) Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
9) Income Taxes | 9) Income Taxes The Company’s income tax liability (benefit) is summarized as follows: December 31 2017 2016 Current $ (922,754) $ (1,511,762) Deferred 18,255,537 25,830,631 Total $ 17,332,783 $ 24,318,869 Significant components of the Company’s deferred tax (assets) and liabilities are approximately as follows: December 31 2017 2016 Assets Future policy benefits $ (6,803,339) $ (9,719,058) Loan loss reserve (697,779) (288,590) Unearned premium (886,706) (1,519,722) Available for sale securities (237,677) (51,266) Net operating loss (631,892) (1,531,160) Deferred compensation (1,600,401) (2,225,208) Deposit obligations (627,193) (1,033,580) Other (276,127) (3,384,144) Less: Valuation allowance - 431,802 Total deferred tax assets (11,761,114) (19,320,926) Liabilities Deferred policy acquisition costs 13,700,093 18,150,517 Basis difference in property and equipment 6,110,374 10,749,036 Value of business acquired 1,383,639 2,573,902 Deferred gains 6,978,067 9,290,123 Trusts 1,066,438 1,599,657 Tax on unrealized appreciation 778,040 2,788,322 Total deferred tax liabilities 30,016,651 45,151,557 Net deferred tax liability $ 18,255,537 $ 25,830,631 The valuation allowance relates to differences between recorded deferred tax assets and liabilities and ultimate anticipated realization. For the year ended December 31, 2017, the Company has not recorded a valuation allowance and, given additional operating results of First Guaranty Insurance Company (“First Guaranty”) that was acquired in July 2016, the Company has determined that the $431,802 valuation allowance previously recorded in 2016 related to First Guaranty is no longer needed. The Company paid $581,556 and $2,667,918 in income taxes for the years ended December 31, 2017 and 2016, respectively. The Company’s income tax expense (benefit) is summarized as follows for the years ended December 31: 2017 2016 Current Federal $ 934,647 $ 1,138,196 State 236,559 245,764 1,171,206 1,383,960 Deferred Federal (7,811,030) 5,686,651 State 59,002 443,993 (7,752,028) 6,130,644 Total $ (6,580,822) $ 7,514,604 The reconciliation of income tax expense (benefit) at the U.S. federal statutory rates is as follows: 2017 2016 Computed expense at statutory rate $ 2,560,918 $ 6,699,099 State tax expense, net of federal tax benefit 195,070 455,240 Change in valuation allowance (431,802) 431,802 Change in tax law (8,973,722) - Other, net 68,714 (71,537) Income tax expense (benefit) $ (6,580,822) $ 7,514,604 The Company’s overall effective tax rate for the years ended December 31, 2017 and 2016 was (87.4%) and 38.1%, respectively. During the fourth quarter of 2017, the Company recorded a tax benefit of $8,973,722 related to the enactment of the Tax Cuts and Jobs Act (“the Tax Act”) signed into law December 22, 2017. The benefit is primarily related to a re-measurement of deferred tax assets and liabilities taking the Tax Act’s newly enacted tax rate into account. The Company’s overall effective tax rate for the year ended December 31, 2017 without the impact of the Tax Act would be 31.8%. The Company’s effective tax rates differ from the U.S. federal statutory rate of 34% largely due to the Tax Act change, its provision for state income taxes and a reduction in the valuation allowance related to the prior acquisition of First Guaranty that decreased the effective income tax rate when compared to the prior year. At December 31, 2017, the Company had no significant unrecognized tax benefits. As of December 31, 2017, the Company does not expect any material changes to the estimated amount of unrecognized tax benefits in the next twelve months. Federal and state income tax returns for 2014 through 2017 are subject to examination by taxing authorities. Net Operating Losses and Tax Credit Carryforwards: Year of Expiration 2019 $ 229,201 2020 114,601 2021 17,101 2022 - 2023 - Thereafter up through 2037 2,323,615 $ 2,684,518 |
10) Reinsurance, Commitments an
10) Reinsurance, Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
10) Reinsurance, Commitments and Contingencies | 10) Reinsurance, Commitments and Contingencies Reinsurance The Company follows the procedure of reinsuring risks in excess of a specified limit, which ranged from $25,000 to $100,000 during the years 2017 and 2016. 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 having insurance in force amounting to approximately $106,000,000 and approximately $110,000,000 at December 31, 2017 and 2016, respectively. 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 potential losses on loans sold. The additional amounts expensed for loan losses (above the standard reserve for new loans sold) in years ended December 31, 2017 and 2016 were $-0- and $1,700,000, respectively, and the charge has been included in selling, general and administrative expenses. The estimated liability for indemnification losses is included in other liabilities and accrued expenses and, as of December 31, 2017 and 2016, the balances were $2,572,000 and $628,000, respectively. Mortgage Loan Loss Litigation Lehman Brothers 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. Non-Cancelable Leases The Company leases office space and equipment under various non-cancelable agreements, with remaining terms up to five years. Minimum lease payments under these non-cancelable operating leases as of December 31, 2017, are approximately as follows: Years Ending December 31 2018 $ 4,825,139 2019 3,371,267 2020 1,705,632 2021 847,504 2022 26,357 Total $ 10,775,899 Total rent expense related to non-cancelable operating leases for the years ended December 31, 2017 and 2016 was approximately $7,374,000 and $7,879,000 , respectively. 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 December 31, 2017, the Company’s commitments were approximately $78,967,000 , for these loans of which $50,158,000 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. |
11) Retirement Plans
11) Retirement Plans | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
11) Retirement Plans | 11) Retirement Plans The Company and its subsidiaries have a noncontributory Employee Stock Ownership Plan (“ESOP”) for all eligible employees. Eligible employees are primarily those with more than one year of service, who work in excess of 1,000 hours per year. Contributions, which may be in cash or stock of the Company, are determined annually by the Board of Directors. The Company’s contributions are allocated to eligible employees based on the ra tio of each eligible employee’s compensation to total compensation for all eligible employees during each year. At December 31, 2017, the ESOP held 518,517 shares of Class A and 278,904 shares of Class C common stock of the Company. All shares held by the ESOP have been allocated to the participating employees and all shares held by the ESOP are considered outstanding for purposes of computing earnings per share. The Company has three 401(k) savings plans covering all eligible employees, as defined above, which includes employer participation in accordance with the provisions of Section 401(k) of the Internal Revenue Code. The plans allow participants to make pretax contributions up to a maximum of $18,000 and $18,000 for the years 2017 and 2016, respectively or the statutory limits. Beginning January 1, 2008, the Company elected to be a “Safe Harbor” Plan for its matching 401(k) contributions. The Company matched 100% of up to 3% of an employee’s total annual compensation and matched 50% of 4% to 5% of an employee’s annual compensation. The match was in Company stock. The Company’s contribution for the years ended December 31, 2017 and 2016 was $1,534,861 and $1,429,962, respectively under the “Safe Harbor” plan. In 2001, the Company’s Board of Directors adopted a Deferred Compensation Plan. Under the terms of the Plan, the Company will provide deferred compensation for a select group of management or highly compensated employees, within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended. The Board has appointed a Committee of the Company to be the Plan Administrator and to determine the employees who are eligible to participate in the plan. The employees who participate may elect to defer a portion of their compensation into the plan. The Company may contribute into the plan at the discretion of the Company’s Board of Directors. The Company did not make any contributions for 2017 and 2016. On July 16, 2004, the Company entered into an employment agreement with Scott M. Quist, the Chairman of the Board, President and Chief Executive Officer. The agreement is effective as of December 4, 2003 and has a five-year term, but the Company has agreed to renew the agreement on December 4, 2008 and 2013 for additional five-year terms, provided Mr. Quist performs his duties with usual and customary care and diligence. Under the terms of the agreement, Mr. Quist is to devote his full time to the Company serving as its Chairman of the Board, President, and Chief Executive Officer at not less than his current salary and benefits. The Company also agrees to maintain a group term life insurance policy of not less than $1,000,000 on Mr. Quist’s life and a whole life insurance policy in the amount of $500,000 on Mr. Quist’s life. In the event of disability, Mr. Quist’s salary would be continued for up to five years at 75% of its current level. In the event of a sale or merger of the Company and Mr. Quist is not retained in his current position, the Company would be obligated to continue Mr. Quist’s current compensation and benefits for seven years following the merger or sale. The agreement further provides that Mr. Quist is entitled to receive annual retirement benefits beginning (i) one month from the date of his retirement (to commence no sooner than age 65), (ii) five years following complete disability, or (iii) upon termination of his employment without cause. These retirement benefits are to be paid for a period of twenty years in annual installments in the amount equal to 75% of his then current rate of compensation. However, in the event that Mr. Quist dies prior to receiving all retirement benefits there under, the remaining benefits are to be paid to his heirs. The Company expensed $755,302 and $511,443 during the years ended December 31, 2017 and 2016, respectively, to cover the present value of anticipated retirement benefits under the employment agreement. The liability accrued is $4,531,670 and $3,776,368 as of December 31, 2017 and 2016, respectively and is included in Other liabilities and accrued expenses on the consolidated balance sheets. On December 31, 2015, J. Lynn Beckstead, Jr., who served as Vice President of Mortgage Operations and President of SecurityNational Mortgage, retired from the Company. Under the terms of the employment agreement that the Company, through its wholly owned subsidiary, SecurityNational Mortgage, had entered into with Mr. Beckstead, Mr. Beckstead is entitled to receive retirement benefits from the Company for a period of ten years in an amount equal to 50% of his current rate of compensation at the time of his retirement, which was $267,685 for the year ended December 31, 2015. Such retirement payments are paid monthly during the ten-year period. In determining Mr. Beckstead’s current rate of compensation, stock option grants and incentive or similar bonuses are not included. In the event Mr. Beckstead dies prior to receiving all of his retirement benefits under his employment agreement, the remaining benefits will be made to his heirs. The Company expensed $-0- and $148,557 during the years ended December 31, 2017 and 2016, respectively, to cover the present value of the retirement benefits under the employment agreement. The company paid $133,843 and $133,842 in retirement compensation to Mr. Beckstead during the years ended December 31, 2017 and 2016, respectively. The liability accrued was $975,434 and $1,109,277 as of December 31, 2017 and 2016, respectively and is included in Other liabilities and accrued expenses on the consolidated balance sheets. |
12) Capital Stock
12) Capital Stock | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
12) Capital Stock | 12) Capital Stock The Company has one class of preferred stock of $1.00 par value, 5,000,000 shares authorized, of which none are issued. The preferred stock is non-voting. The Company has two classes of common stock with shares outstanding, Class A common shares and Class C common shares. Class C shares have 10 votes per share on all matters except for the election of one third of the directors who are elected solely by the Class A shares. Class C shares are convertible into Class A shares at any time on a one to one ratio. The decrease in treasury stock was the result of treasury stock being used to fund the companyÂ’s 401(k) Plans. Stockholders of both Class A and Class C common stock have received 5% stock dividends in the years 1990 through 2017, as authorized by the CompanyÂ’s Board of Directors. The Company has Class B common stock of $1.00 par value, 5,000,000 shares authorized, of which none are issued. Class B shares are non-voting stock except to any proposed amendment to the Articles of Incorporation which would affect Class B common stock. The following table summarizes the activity in shares of capital stock for the two-year period ended December 31, 2017: Class A Class C Balance at December 31, 2015 13,109,100 1,709,640 Exercise of stock options 42,634 104,975 Stock dividends 657,919 96,967 Conversion of Class C to Class A 9,353 (9,353) Balance at December 31, 2016 13,819,006 1,902,229 Exercise of stock options 8,183 103,402 Stock dividends 692,635 99,496 Conversion of Class C to Class A 15,753 (15,753) Balance at December 31, 2017 14,535,577 2,089,374 Earnings per share amounts have been retroactively adjusted for the effect of annual stock dividends. In accordance with GAAP, the basic and diluted earnings per share amounts were calculated as follows: 2017 2016 Numerator: Net earnings $ 14,112,934 $ 12,188,627 Denominator: Denominator for basic earnings per share-weighted-average shares 15,972,329 15,575,632 Effect of dilutive securities Employee stock options 313,601 336,960 Dilutive potential common shares 313,601 336,960 Denominator for diluted earnings per share-adjusted weighted-average shares and assumed conversions 16,285,930 15,912,592 Basic earnings per share $0.88 $0.78 Diluted earnings per share $0.87 $0.77 For the years ended December 31, 2017 and 2016, there were 589,822 and 334,425 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. |
13) Stock Compensation Plans
13) Stock Compensation Plans | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
13) Stock Compensation Plans | 13) 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 $395,603 and $343,577 has been recognized under these plans for the years ended December 31, 2017 and 2016, respectively, and is included in personnel expenses on the consolidated statements of earnings. As of December 31, 2017, the total unrecognized compensation expense related to the options issued in December 2017 was $213,770 , which is expected to be recognized over the vesting period of one year. The fair value of each option granted is estimated on the date of grant using the Black Scholes Option Pricing Model. The Company estimates the expected life of the options using the simplified method. Future volatility is estimated based upon the weighted historical volatility of the Company’s Class A common stock over a period equal to the expected life of the options. The risk-free interest rate for the expected life of the options is based upon the Federal Reserve Board’s daily interest rates in effect at the time of the grant. The following table summarizes the assumptions used in estimating the fair value of each option granted along with the weighted-average fair value of the options granted: Assumptions Grant Date Plan Weighted-Average Fair Value of Each Option (1) Expected Dividend Yield Underlying stock FMV Weighted-Average Volatility Weighted-Average Risk-Free Interest Rate Weighted-Average Expected Life (years) December 1, 2017 All Plans $ 1.20 5% $ 4.80 41.07% 2.07% 4.35 December 21, 2016 2013 Plan $ 2.17 5% $ 6.62 54.42% 1.99% 5.31 December 7, 2016 2014 Director Plan $ 2.41 5% $ 7.36 54.60% 1.93% 5.31 December 2, 2016 2013 Plan $ 1.89 5% $ 6.68 47.05% 1.78% 4.33 December 2, 2016 2014 Director Plan $ 1.89 5% $ 6.68 47.05% 1.78% 4.33 Activity of the stock option plans is summarized as follows: 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 Adjustment for the effect of stock dividends 35,346 26,491 Granted 133,500 80,000 Exercised (42,634) (127,629) Cancelled (2,500) - Outstanding at December 31, 2016 741,973 $ 4.33 556,298 $ 4.52 Adjustment for the effect of stock dividends 40,978 24,934 Granted 124,500 70,000 Exercised (8,182) (103,402) Cancelled (18,843) (24,227) Outstanding at December 31, 2017 880,426 $ 4.35 523,603 $ 5.24 Exercisable at end of year 749,701 $ 4.22 450,103 $ 5.31 Available options for future grant 421,241 165,638 Weighted average contractual term of options outstanding at December 31, 2017 6.62 years 3.45 years Weighted average contractual term of options exercisable at December 31, 2017 6.55 years 2.38 years Aggregated intrinsic value of options outstanding at December 31, 2017 (1) $915,293 $204,015 Aggregated intrinsic value of options exercisable at December 31, 2017 (1) $904,898 $189,315 (1) The Company used a stock price of $5.00 as of December 31, 2017 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 years ended December 31, 2017 and 2016 was $611,126 and $670,959 , respectively. |
14) Statutory Financial Informa
14) Statutory Financial Information and Dividend Limitations | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
14) Statutory Financial Information and Dividend Limitations | 14) Statutory Financial Information and Dividend Limitations The Company’s insurance subsidiaries prepare their statutory-basis financial statements in conformity with accounting practices prescribed or permitted by the insurance department of the applicable state of domicile. Prescribed statutory accounting practices include a variety of publications of the NAIC, as well as state laws, regulations and general administrative rules. Permitted statutory accounting practices encompass all accounting practices not so prescribed. All states require domiciled insurance companies to prepare statutory-basis financial statements in conformity with the NAIC Accounting Practices and Procedures Manual, subject to any deviations prescribed or permitted by the applicable insurance commissioner and/or director. Statutory accounting practices differ from GAAP primarily since they require charging policy acquisition and certain sales inducement costs to expense as incurred, establishing life insurance reserves based on different actuarial assumptions, and valuing certain investments and establishing deferred taxes on a different basis. Statutory net income and capital and surplus of the Company’s insurance subsidiaries, determined in accordance with statutory accounting practices prescribed or permitted by insurance regulatory authorities are as follows: Net Income Capital and Surplus 2017 2016 2017 2016 Amounts by insurance subsidiary: Security National Life Insurance Company $(3,025,616) $ 2,601,408 $ 36,281,485 $ 36,789,358 First Guaranty Insurance Company 1,437,963 174,562 4,583,346 4,091,847 Memorial Insurance Company of America 36 460 1,081,799 1,081,319 Southern Security Life Insurance Company, Inc. 72 889 1,591,070 1,592,440 Trans-Western Life Insurance Company 2,597 1,203 502,930 500,333 Total $(1,584,948) $ 2,778,522 $ 44,040,630 $ 44,055,297 The Utah, Arkansas, Louisiana, Mississippi and Texas Insurance Departments impose minimum risk-based capital (RBC) requirements that were developed by the NAIC on insurance enterprises. The formulas for determining the RBC specify various factors that are applied to financial balances or various levels of activity based on the perceived degree of risk. Regulatory compliance is determined by a ratio (the Ratio) of the enterprise’s regulatory total adjusted capital, as defined by the NAIC, to its authorized control level, as defined by the NAIC. Enterprises below specific trigger points or ratios are classified within certain levels, each of which requires specified corrective action. The life insurance subsidiaries have a combined weighted Ratio that is greater than the first level of regulatory action as of December 31, 2017. Generally, the net assets of the life insurance subsidiaries available for transfer to the Company are limited to the amounts of the life insurance subsidiaries net assets, as determined in accordance with statutory accounting practices, which were $44,040,630 at December 31, 2017. These amounts exceed minimum statutory capital requirements; however, payments of such amounts as dividends are subject to approval by regulatory authorities. Under the Utah Insurance Code, Security National Life Insurance Company is permitted to pay a stockholder dividend to the Company as long as the Company provides the Utah Insurance Commissioner (the “Utah Commissioner”) with at least 30 days notice and the aggregate amount of all such dividends in any 12 month period does not exceed the lesser of: (i) 10% of its surplus to policyholders as of the end of the immediately preceding calendar year, or (ii) net gain from operations, not including realized capital gains, for the immediately preceding calendar year, not including pro rata distributions of the Company’s own securities. In determining whether a dividend is extraordinary, the Company may include carryforward net income from the previous two calendar years, excluding realized capital gains less dividends paid in the second and immediately preceding calendar years. Security National Life Insurance Company will be permitted to pay a dividend to the Company in excess of the lesser of such two amounts only if it files notice of its intention to declare such a dividend and the amount thereof with the Utah Commissioner and the Utah Commissioner either approves the distribution of the dividend or does not disapprove the distribution within 30 days of its filing. In all cases, a dividend may not be paid that would reduce the insurer’s total adjusted capital below the insurer’s company action level risk-based capital, as defined for statutory reporting purposes. No amounts are available to be paid as dividends in the next 12 months because Security National Life Insurance Company had a net statutory loss for the immediately preceding calendar year. Under the Louisiana Insurance Code, First Guaranty Insurance Company is permitted to pay a stockholder dividend to Security National Life as long as First Guaranty Insurance Company’s capital has been (i) fully paid in cash, (ii) is unimpaired, (iii) has a surplus beyond its capital stock and (iv) has a surplus beyond its minimum required surplus. In 2017, First Guaranty Insurance Company paid to Security National Life a cash dividend of $1,000,000 . Amounts still available to be paid as dividends at December 31, 2017 totaled approximately $683,000. |
15) Business Segment Informatio
15) Business Segment Information | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
15) Business Segment Information | 15) 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 pre-sold loans before the funds are received from financial institutional investors. Measurement of Segment Profit or Loss and Segment Assets The accounting policies of the reportable segments are the same as those described in the Significant Accounting Principles. 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. 2017 Life Cemetery/ Intercompany Insurance Mortuary Mortgage Eliminations Consolidated Revenues: From external sources: Revenue from customers $ 70,412,476 $ 12,657,117 $ 153,797,171 $ - $ 236,866,764 Net investment income 34,068,565 445,663 548,740 - 35,062,968 Realized gains (losses) on investments and other assets (3,871,309) 186,335 736,492 - (2,948,482) Other than temporary impairments (774,339) - - - (774,339) Other revenues 856,094 97,602 7,765,483 - 8,719,179 Intersegment revenues: Net investment income 5,987,731 422,623 392,083 (6,802,437) - Total revenues 106,679,218 13,809,340 163,239,969 (6,802,437) 276,926,090 Expenses: Death and other policy benefits 36,095,018 - - - 36,095,018 Increase in future policy benefits 23,622,750 - - - 23,622,750 Amortization of deferred policy and preneed acquisition costs and value of business acquired 8,157,456 322,794 - - 8,480,250 Depreciation 484,349 401,564 1,334,780 - 2,220,693 General, administrative and other costs: Intersegment 315,588 184,853 505,707 (1,006,148) - Provision for loan losses - - - - - Costs related to funding mortgage loans - - 8,663,223 - 8,663,223 Other 30,632,307 10,689,813 142,952,592 - 184,274,712 Interest expense: Intersegment 445,520 181,793 5,168,976 (5,796,289) - Other 2,218,956 330,211 3,488,165 - 6,037,332 Total benefits and expenses 101,971,944 12,111,028 162,113,443 (6,802,437) 269,393,978 Earnings before income taxes $ 4,707,274 $ 1,698,312 $ 1,126,526 $ - $ 7,532,112 Income tax benefit (expense) 6,400,669 (606,293) 786,446 - 6,580,822 Net earnings $ 11,107,943 $ 1,698,312 $ 1,912,972 $ - $ 14,112,934 Identifiable assets $ 858,068,899 $ 95,097,729 $ 161,051,531 $ (134,810,675) $ 979,407,484 Goodwill $ 2,765,570 $ - $ - $ - $ 2,765,570 2016 Life Cemetery/ Intercompany Insurance Mortuary Mortgage Eliminations Consolidated Revenues: From external sources: Revenue from customers $ 64,501,017 $ 12,267,640 $ 189,146,639 $ - $ 265,915,296 Net investment income 31,019,594 312,494 646,513 - 31,978,601 Realized gains (losses) on investments and other assets (277,040) 211,429 (110,776) - (176,387) Other than temporary impairments (270,358) - - - (270,358) Other revenues 632,260 88,676 6,166,813 - 6,887,749 Intersegment revenues: Net investment income 7,119,692 691,876 327,778 (8,139,346) - Total revenues 102,725,165 13,572,115 196,176,967 (8,139,346) 304,334,901 Expenses: Death and other policy benefits 33,387,380 - - - 33,387,380 Increase in future policy benefits 21,322,195 - - - 21,322,195 Amortization of deferred policy and preneed acquisition costs and value of business acquired 7,647,097 356,078 - - 8,003,175 Depreciation 596,827 390,362 1,195,535 - 2,182,724 General, administrative and other costs: Intersegment 261,119 148,025 219,974 (629,118) - Provision for loan losses - - 1,700,000 - 1,700,000 Costs related to funding mortgage loans - - 9,191,488 - 9,191,488 Other 29,478,156 10,524,535 163,730,148 1 203,732,840 Interest expense: Intersegment 519,959 651,046 6,339,224 (7,510,229) - Other 1,654,264 282,878 3,174,726 - 5,111,868 Total benefits and expenses 94,866,997 12,352,924 185,551,095 (8,139,346) 284,631,670 Earnings before income taxes $ 7,858,168 $ 1,219,191 $ 10,625,872 $ - $ 19,703,231 Income tax expense (3,451,292) - (4,063,312) - (7,514,604) Net earnings $ 4,406,876 $ 1,219,191 $ 6,562,560 $ - $ 12,188,627 Identifiable assets $ 818,140,804 $ 99,611,263 $ 172,778,387 $ (140,874,459) $ 949,655,995 Goodwill $ 2,765,570 $ - $ - $ - $ 2,765,570 Expenditures for long-lived assets $ 532,958 $ 723,445 $ 2,310,108 $ - $ 3,566,511 |
16) Related Party Transactions
16) Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
16) Related Party Transactions | 16) Related Party Transactions The CompanyÂ’s Board of Directors has a written procedure, which requires disclosure to the Board of any material |
17) Fair Value of Financial Ins
17) Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
17) Fair Value of Financial Instruments | 17) Fair Value of Financial Instruments 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: Securities Available for Sale and Held to Maturity : The fair values of investments in fixed maturity and equity securities along with methods used to estimate such values are disclosed in Note 2 of the Notes to Consolidated Financial Statements. Restricted Assets : A portion of these assets include mutual funds, equity securities and fixed maturity 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 held for investment. Cemetery Endowment Care Trust Investments : A portion of these assets include equity securities and fixed maturity securities that have quoted market prices that are used to determine fair value. Also included are cash and cash equivalents, participations in mortgage loans held for investment and real estate. 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 table summarizes Level 1, 2 and 3 financial assets and financial liabilities measured at fair value on a recurring basis by their classification in the consolidated balance sheet at December 31, 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 $ 6,037,855 $ 6,037,855 $ - $ - Total securities available for sale $ 6,037,855 $ 6,037,855 $ - $ - Loans held for sale 133,414,188 133,414,188 Restricted assets (1) 809,958 809,958 - - Cemetery perpetual care trust investments (1) 682,315 682,315 - - Derivatives - loan commitments (2) 2,032,782 - - 2,032,782 Total assets accounted for at fair value on a recurring basis $ 9,562,910 $ 7,530,128 $ - $ 2,032,782 Liabilities accounted for at fair value on a recurring basis Derivatives - call options (3) $ (64,689) $ (64,689) $ - $ - Derivatives - put options (3) (20,568) (20,568) - - Derivatives - loan commitments (3) (36,193) - - (36,193) Total liabilities accounted for at fair value on a recurring basis $ (121,450) $ (85,257) $ - $ (36,193) (1) Mutual funds and equity securities (2) Included in other assets on the consolidated balance sheets (3) Included in other liabilities and accrued expenses on the consolidated balance sheets For Level 3 assets and liabilities measured at fair value on a recurring basis as of December 31, 2017, the significant unobservable inputs used in the fair value measurements were as follows: Significant Range of Inputs Fair Value at Valuation Unobservable Minimum Maximum Weighted 12/31/2017 Technique Input(s) Value Value Average Loans held for sale $ 133,414,188 Market approach Investor contract pricing as a percentage of unpaid principal balance 100.0% 110.5% 102.8% Derivatives - loan commitments (net) 1,996,589 Market approach Fall-out factor 1.0% 99.0% 19.0% Initial-Value N/A N/A N/A Servicing 151 bps 382 bps 275 bps Following is a summary of changes in the consolidated balance sheet line items measured using level 3 inputs: Net Derivatives Loan Commitments Bank Loan Interest Rate Swaps Loans Held for Sale Balance - December 31, 2016, as restated $ 6,809,332 $ (3,308) $ - Originations 1,233,683,666 Sales (1,151,031,388) Total gains (losses): Included in earnings (1) (4,812,743) - 50,761,910 Included in other comprehensive income (2) - 3,308 - Balance - December 31, 2017 $ 1,996,589 $ - $ 133,414,188 (1) As a component of mortgage fee income on the consolidated statements of earnings (2) As a component of unrealized gains on derivative instruments on the consolidated statements 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 consolidated balance sheet at December 31, 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 nonrecurring basis Impaired mortgage loans held for investment $ 1,363,440 $ - $ - $ 1,363,440 Mortgage servicing rights additions 6,085,352 - - 6,085,352 Impaired real estate held for investment 8,500,000 - - 8,500,000 Impaired fixed maturity securities, held to maturity 426,984 - 426,984 - Total assets accounted for at fair value on a nonrecurring basis $ 16,375,776 $ - $ 426,984 $ 15,948,792 The following table summarizes Level 1, 2 and 3 financial assets and financial liabilities measured at fair value on a recurring basis by their classification in the 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 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) Mutual funds and equity securities (2) Included in other assets on the consolidated balance sheets (3) Included in bank and other loans payable on the consolidated balance sheets (4) Included in other liabilities and accrued expenses on the consolidated balance sheets Following is a summary of changes in the consolidated balance sheet line items measured using level 3 inputs: Net Derivatives Loan Commitments Bank Loan Interest Rate Swaps Balance - December 31, 2015, as restated $ 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, as restated $ 6,809,332 $ (3,308) (1) As a component of mortgage fee income on the consolidated statements of earnings (2) As a component of unrealized gains on derivative instruments on the consolidated statements 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 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 nonrecurring basis Impaired mortgage loans held for investment $ 2,809,925 $ - $ - $ 2,809,925 Mortgage servicing rights additions 8,603,154 - - 8,603,154 Impaired 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 December 31, 2017 and 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 December 31, 2017: Carrying Value Level 1 Level 2 Level 3 Total Estimated Fair Value Assets Fixed maturity securities, held to maturity $ 228,397,623 $ - $ 233,806,219 $ 7,692,190 $ 241,498,409 Mortgage loans held for investment Residential 99,816,535 - - 106,050,169 106,050,169 Residential construction 49,694,025 - - 49,694,025 49,694,025 Commercial 54,700,325 - - 56,473,156 56,473,156 Mortgage loans held for investment, net $ 204,210,885 $ - $ - $ 212,217,350 $ 212,217,350 Policy loans 6,531,352 - - 6,531,352 6,531,352 Insurance assignments, net (1) 35,455,098 - - 35,455,098 35,455,098 Restricted assets (2) 1,130,088 - 1,152,324 - 1,152,324 Restricted assets (3) 1,701,811 - - 1,796,910 1,796,910 Cemetery perpetual care trust investments (2) 943,211 - 953,404 - 953,404 Cemetery perpetual care trust investments (3) 4,128 - - 4,411 4,411 Mortgage servicing rights, net 21,376,937 - - 27,427,174 27,427,174 Liabilities Bank and other loans payable $ (157,450,925) $ - $ - $ (157,450,925) $ (157,450,925) Policyholder account balances (4) (47,867,037) - - (34,557,111) (34,557,111) Future policy benefits - annuities (4) (99,474,392) - - (98,827,107) (98,827,107) (1) Included in other investments and policy loans on the consolidated balance sheets (2) Fixed maturity securities held to maturity (3) Participation in mortgage loans held for investment (commercial) (4) Included in future policy benefits and unpaid claims on the consolidated balance sheets 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 189,139,832 - - 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 Restricted assets (2) 990,613 - 991,528 - 991,528 Restricted assets (3) 1,575,044 - - 1,651,539 1,651,539 Cemetery perpetual care trust investments (2) 885,729 - 892,260 - 892,260 Cemetery perpetual care trust investments (3) 3,821 - - 3,863 3,863 Mortgage servicing rights, net 18,872,362 - - 25,496,832 25,496,832 Liabilities Bank and other loans payable $ (152,137,341) $ - $ - $ (152,137,341) $ (152,137,341) Policyholder account balances (4) (49,421,125) - - (38,530,031) (38,530,031) Future policy benefits - annuities (4) (99,385,662) - - (100,253,261) (100,253,261) (1) Included in other investments and policy loans on the consolidated balance sheets (2) Fixed maturity securities held to maturity (3) Participation in mortgage loans held for investment (commercial) (4) Included in future policy benefits and unpaid claims on the consolidated balance sheets The methods, assumptions and significant valuation techniques and inputs used to estimate the fair value of financial instruments are summarized as follows: Fixed Maturity Securities, Held to Maturity : 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. 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 or priced 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 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 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 consolidated balance sheet for these financial instruments approximate their fair values due to their short-term nature. Bank and Other Loans Payable 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. |
18) Accumulated Other Comprehen
18) Accumulated Other Comprehensive Income | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
18) Accumulated Other Comprehensive Income | 18) Accumulated Other Comprehensive Income The following summarizes the changes in accumulated other comprehensive income: December 31 2017 2016 Unrealized gains on equity securities available for sale, restricted assets and cemetery perpetual care trust investments $ 421,499 $ 996,343 Reclassification adjustment for net realized gains in net income 90,475 160,575 Net unrealized gains before taxes 511,974 1,156,918 Tax expense (175,644) (399,228) Net 336,330 757,690 Unrealized gains for bank loan interest rate swaps before taxes 3,308 10,639 Tax expense (1,290) (4,149) Net 2,018 6,490 Other comprehensive income changes $ 338,348 $ 764,180 The following is the accumulated balances of other comprehensive income as of December 31, 2017: Beginning Balance December 31, 2016 Change for the period Ending Balance December 31, 2017 Unrealized gains on equity securities available for sale, restricted assets and cemetery perpetual care trust investments $ 266,840 $ 336,330 $ 603,170 Unrealized gains for bank loan interest rate swaps (2,018) 2,018 - Other comprehensive income $ 264,822 $ 338,348 $ 603,170 The following is the accumulated balances of other comprehensive income as of December 31, 2016: Beginning Balance December 31, 2015 Change for the period Ending Balance December 31, 2016 Unrealized gains (losses) on equity securities available for sale, restricted assets and cemetery perpetual care trust investments $ (490,850) $ 757,690 $ 266,840 Unrealized gains (losses) for bank loan interest rate swaps (8,508) 6,490 (2,018) Other comprehensive income (loss) $ (499,358) $ 764,180 $ 264,822 See Note 1 regarding the adoption of ASU 2016-01. |
19) Derivative Instruments
19) Derivative Instruments | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
19) Derivative Instruments | 19) Derivative Instruments The following table shows the fair value of derivatives as of December 31, 2017 and 2016. Fair Values and Notional Amounts of Derivative Instruments December 31, 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 $105,679,107 $2,032,782 $ 36,193 $191,757,193 $6,911,544 $102,212 Call options Other liabilities 1,488,550 -- 64,689 2,169,850 -- 109,474 Put options Other liabilities 2,265,900 -- 20,568 1,336,750 -- 26,494 Derivatives designated as fair value hedging instruments: Interest rate swaps Bank and other loans payable -- -- -- 175,762 -- 3,308 Total $109,433,557 $2,032,782 $121,450 $195,439,555 $6,911,544 $241,488 The following table shows the gain (loss) on derivatives for the periods presented. There were no gains or losses reclassified from accumulated other comprehensive income into income or gains or losses recognized in income on derivatives ineffective portion or any amounts excluded from effective testing. Net Amount Gain (Loss) Years ended December 31 Derivative Classification 2017 2016 Interest Rate Swaps Other comprehensive income $ 2,018 $ 6,490 Loan commitments Mortgage fee income $ (4,812,743) (1) $ (862,163) Call and put options Realized gains on investments and other assets $ 316,244 $ 208,409 (1) Includes the transfer of loan commitments to the value of loans held for sale. |
20) Acquisitions
20) Acquisitions | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
20) Acquisitions | 20) 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, a Louisiana domestic stock legal reserve life insurance company, 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 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 are subject to adjustment during the first twelve months after the acquisition date if additional information becomes 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 year ended December 31, 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 this date and may not reflect the operations that will occur in the future: For the Year Ended December 31, 2016 (unaudited) Total revenues $ 306,471,770 Net earnings $ 11,923,653 Net earnings per Class A equivalent common share $ 0.77 Net earnings per Class A equivalent common share assuming dilution $ 0.75 The pro forma results for the year ended December 31, 2017 are not included in the table above because the operating results for the First Guaranty acquisition were included in the CompanyÂ’s consolidated statements of earnings for this period. |
21) Mortgage Servicing Rights
21) Mortgage Servicing Rights | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
21) Mortgage Servicing Rights | 21) Mortgage Servicing Rights The Company reports MSRs pursuant to the accounting policy discussed in Note 1 of the Notes to Consolidated Financial Statements. The following table presents the MSR activity for the periods presented. December 31 2017 2016 Amortized cost: Balance before valuation allowance at beginning of year $ 18,872,362 $ 12,679,755 MSR additions resulting from loan sales 6,085,352 8,603,154 Amortization (1) (3,580,777) (2,410,547) Application of valuation allowance to write down MSRs with other than temporary impairment - - Balance before valuation allowance at year end $ 21,376,937 $ 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 year end $ - $ - Mortgage servicing rights, net $ 21,376,937 $ 18,872,362 Estimated fair value of MSRs at year end $ 27,427,174 $ 25,496,832 (1) Included in other expenses on the consolidated statements of earnings The following table summarizes the Company’s estimate of future amortization of its existing MSRs carried at amortized cost. This projection was developed using the assumptions made by management in its December 31, 2017 valuation of MSRs. The assumptions underlying the following estimate will change as market conditions and portfolio composition and behavior change, causing both actual and projected amortization levels to change over time. Therefore, the following estimates will change in a manner and amount not presently determinable by management. Estimated MSR Amortization 2018 $ 4,057,830 2019 4,057,830 2020 4,057,830 2021 4,057,684 2022 3,242,163 Thereafter 1,903,600 Total $ 21,376,937 During the years ended December 31, 2017 and 2016, the Company collected the following contractual servicing fee income and late fee income as reported in other revenues on the consolidated statements of earnings: 2017 2016 Contractual servicing fees $ 7,199,649 $ 5,661,699 Late fees 284,550 203,509 Total $ 7,484,199 $ 5,865,207 The following is a summary of the unpaid principal balances (“UPB”) of the servicing portfolio for the periods presented: Years Ended December 31 2017 2016 Servicing UPB 2,924,868,843 2,720,441,340 The following key assumptions were used in determining MSR value: Prepayment Speeds Average Life(Years) Discount Rate December 31, 2017 3.67% 6.34 10.01 December 31, 2016 3.77% 6.52 10.01 |
22) Correction of Errors
22) Correction of Errors | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
22) Correction of Errors | 22) Correction of Errors The accompanying Consolidated Financial Statements include the restatement of the Company’s previously filed consolidated balance sheet and the related consolidated statements of earnings, shareholders’ equity and cash flows for the fiscal year ended December 31, 2016. For the revised quarterly results of operations for the fiscal year ended December 31, 2016, see “Impact of Restatement Adjustments on Quarterly Financial Statements (Unaudited)” in Note 23 of the accompanying Consolidated Financial Statements. Immaterial Error in Accounting for Loan Commitments Subsequent to the issuance of the company’s 2016 Consolidated Financial Statements, the Company identified the following errors, (“Adjustments B”): Material Error in Accounting for Repurchase Agreements Material Error in Accounting for Tax Valuation Allowance Other Immaterial Corrections and Reclassifications Reclassification of Receivables to Loans Held for Sale Reclassification of the Provision for Loan Loss Reserve to net against Mortgage Fee Income Correction to Future Policy Benefits to reverse a Deferred Profit Liability The tables below present the impact of the restatement on the Company’s consolidated balance sheets for the periods presented: As of December 31, 2016 As Originally Reported Adjustment (A) As Previously Reported Adjustments (B) As Restated Equity securities, available for sale, at estimated fair value $ 10,573,356 $ - $ 10,573,356 $ (662,100) $ 9,911,256 Mortgage loans held for investment 149,181,578 - 149,181,578 (190,846) 148,990,732 Policy loans and other investments 40,937,146 - 40,937,146 662,100 41,599,246 Loans held for sale (formerly called Mortgage loans sold to investors) 82,491,091 - 82,491,091 106,648,741 189,139,832 Receivables, net 18,870,119 - 18,870,119 (10,459,573) 8,410,546 Other assets 6,891,468 - 6,891,468 2,418,572 9,310,040 Total Assets 854,004,671 - 854,004,671 98,416,894 952,421,565 Future policy benefits and unpaid claims 585,610,063 - 585,610,063 (1,542,371) 584,067,692 Bank and other loans payable 53,718,548 - 53,718,548 98,422,131 152,140,679 Other liabilities and accrued expenses 33,950,503 - 33,950,503 742,982 34,693,485 Income taxes 27,904,294 - 27,904,294 (3,585,425) 24,318,869 Total liabilities 725,825,117 - 725,825,117 94,037,317 819,862,434 Accumulated other comprehensive income, net of taxes 264,822 - 264,822 - 264,822 Retained earnings 63,029,627 - 63,029,627 4,379,577 67,409,204 Total stockholders' equity 128,179,554 - 128,179,554 4,379,577 132,559,131 Total Liabilities and Stockholders' Equity 854,004,671 - 854,004,671 98,416,894 952,421,565 As of January 1, 2016 As Originally Reported Adjustment (A) As Previously Reported Adjustments (B) As Restated Loans held for sale (formerly called Mortgage loans sold to investors) $ 115,286,455 $ - $ 115,286,455 $ 96,166,551 $ 211,453,006 Receivables, net 16,026,100 - 16,026,100 (9,965,106) 6,060,994 Other assets 7,100,869 - 7,100,869 4,338,404 11,439,273 Total Assets 749,933,317 - 749,933,317 90,539,849 840,473,166 Future policy benefits and unpaid claims 517,177,388 - 517,177,388 (1,388,134) 515,789,254 Bank and other loans payable 40,908,915 - 40,908,915 90,096,699 131,005,614 Income taxes 25,052,059 - 25,052,059 (4,639,170) 20,412,889 Total liabilities 638,687,092 - 638,687,092 84,069,395 722,756,487 Accumulated other comprehensive income (loss), net of taxes 1,533,828 (2,033,186) (499,358) - (499,358) Retained earnings 52,021,764 2,033,186 54,054,950 6,470,454 60,525,404 Total stockholders' equity 111,246,225 - 111,246,225 6,470,454 117,716,679 Total Liabilities and Stockholders' Equity 749,933,317 - 749,933,317 90,539,849 840,473,166 The tables below present the impact of the restatement on the Company’s consolidated statements of earnings for the period presented: Year Ended December 31, 2016 As Originally Reported Adjustment (A) As Previously Reported Adjustments (B) As Restated Net investment income $ 37,582,444 $ - $ 37,582,444 $ (5,603,843) $ 31,978,601 Mortgage fee income 186,416,311 - 186,416,311 2,730,328 189,146,639 Total revenues 307,208,416 - 307,208,416 (2,873,515) 304,334,901 Increase in future policy benefits 21,476,432 - 21,476,432 (154,237) 21,322,195 Commissions 87,762,583 - 87,762,583 871,911 88,634,494 Provision for loan loss reserve 4,688,754 - 4,688,754 (2,988,754) 1,700,000 Cost related to funding mortgage loans 8,756,791 - 8,756,791 434,697 9,191,488 Total benefits and expenses 286,468,053 - 286,468,053 (1,836,383) 284,631,670 Earnings before income taxes 20,740,363 - 20,740,363 (1,037,132) 19,703,231 Income tax expense (6,460,859) - (6,460,859) (1,053,745) (7,514,604) Net earnings 14,279,504 - 14,279,504 (2,090,877) 12,188,627 Net earnings per common share (1) $0.92 $0.00 $0.92 ($0.13) $0.78 Net earnings per common share assuming dilution (1) $0.90 $0.00 $0.90 ($0.13) $0.77 (1) Earnings per share amounts have been adjusted retroactively for the effect of annual stock dividends. The tables below present the impact of the restatement on the Company’s consolidated statements of comprehensive income for the period presented: Year Ended December 31, 2016 As Originally Reported Adjustment (A) As Previously Reported Adjustments (B) As Restated Net earnings $ 14,279,504 $ - $ 14,279,504 $ (2,090,877) $ 12,188,627 Net unrealized gains on derivative instruments 6,490 - 6,490 - 6,490 Other comprehensive gain 764,180 - 764,180 - 764,180 The tables below present the impact of the restatement on the Company’s consolidated statements of cash flows for the period presented: Year Ended December 31, 2016 As Originally Reported Adjustment (A) As Previously Reported Adjustments (B) As Restated Net earnings $ 14,279,504 $ - $ 14,279,504 $ (2,090,877) $ 12,188,627 Provision for deferred and other income taxes 5,076,899 - 5,076,899 1,053,745 6,130,644 Loans originated for sale - - - (3,098,710,299) (3,098,710,299) Proceeds from loans sold - - - 3,246,127,714 3,246,127,714 Net gains on loans sold - - - (137,682,984) (137,682,984) Future life and other benefits 18,143,832 - 18,143,832 (154,237) 17,989,595 Receivables for mortgage loans sold 20,216,621 - 20,216,621 (20,216,621) - Other operating assets and liabilities (8,473,503) - (8,473,503) 3,348,127 (5,125,376) Net cash provided by (used in) operating activities 43,860,446 - 43,860,446 (8,325,432) 35,535,014 Net change in warehouse line borrowings - - 8,325,432 8,325,432 Net cash provided by financing activities 10,664,656 - 10,664,656 8,325,432 18,990,088 |
23) Quarterly Financial Data (u
23) Quarterly Financial Data (unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
23) Quarterly Financial Data (unaudited) | 23) Quarterly Financial Data (Unaudited) 2017 Three Months Ended March 31 June 30 September 30 December 31 Revenues $ 70,829,297 $ 73,171,558 $ 71,971,851 $ 60,953,384 Benefits and expenses 67,931,527 69,177,259 70,833,834 61,451,358 Earnings before income taxes 2,897,770 3,994,299 1,138,017 (497,974) Income tax expense (1,037,770) (1,508,435) (41,179) 9,168,206 Net earnings 1,860,000 2,485,864 1,096,838 8,670,232 Net earnings per common share (1) $0.12 $0.16 $0.07 $0.54 Net earnings per common share assuming dilution (1) $0.11 $0.15 $0.07 $0.53 Impact of Restatement Adjustments on Quarterly Financial Statements (Unaudited) for 2016. 2016 (2) Three Months Ended March 31 (As Previously Reported) March 31 (As Restated) June 30 (As Previously Reported) June 30 (As Restated) September 30 (As Previously Reported) September 30 (As Restated) December 31 (As Previously Reported) December 31 (As Restated) Revenues $ 67,355,307 $ 69,456,348 $ 81,312,192 $ 80,087,227 $ 84,393,427 $ 82,948,657 $ 74,147,490 $ 71,842,669 Benefits and expenses 63,163,550 65,385,268 73,758,739 72,101,342 77,427,792 76,375,127 72,117,972 70,769,933 Earnings before income taxes 4,191,757 4,071,080 7,553,453 7,985,885 6,965,635 6,573,530 2,029,518 1,072,736 Income tax expense (1,580,220) (1,533,139) (2,456,885) (2,968,879) (2,190,206) (2,390,525) (233,548) (622,061) Net earnings 2,611,537 2,537,941 5,096,568 5,017,006 4,775,429 4,183,005 1,795,970 450,675 Net earnings per common share (1) $0.17 $0.16 $0.33 $0.32 $0.31 $0.27 $0.11 $0.03 Net earnings per common share assuming dilution (1) $0.16 $0.16 $0.32 $0.32 $0.30 $0.26 $0.11 $0.03 ____________ (1) Earnings per share amounts have been adjusted retroactively for the effect of annual stock dividends. (2) Earnings restated – See Note 22 of the Notes to Consolidated Financial Statements for additional information regarding correction of errors. |
24) Future Policy Benefits and
24) Future Policy Benefits and Unpaid Claims | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
24) Future Policy Benefits and Unpaid Claims | 24) Future Policy Benefits and Unpaid Claims The Company reports future policy benefits and unpaid claims pursuant to the accounting policy discussed in Note 1 of the Notes to Consolidated Financial Statements. The following table provides information regarding future policy benefits and unpaid claims and the related receivable from reinsurers. Years Ended September 30 2017 2016 Life $ 445,247,671 $424,878,578 Annuities 99,474,392 99,385,662 Policyholder account balances 47,867,037 49,421,125 Accident and health 482,234 475,059 Other policyholder funds 4,487,521 4,683,720 Reported but unpaid claims 6,023,084 3,897,391 Incurred but not reported claims 1,165,012 1,326,157 Gross future policy benefits and unpaid claims $ 604,746,951 $584,067,692 Receivable from reinsurers Life 7,291,996 7,218,580 Annuities 6,023,092 5,781,402 Reported but unpaid claims 69,218 69,189 Incurred but not reported claims 10,297 10,497 Total receivable from reinsurers 13,394,603 13,079,668 Net future policy benefits and unpaid claims $ 591,352,348 $570,988,024 |
25) Subsequent Events
25) Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
25) Subsequent Events | 25) Subsequent Events On February 27, 2018, Security National Life announced that it entered into an agreement to sell Dry Creek, its 282-unit multifamily complex located in Sandy, Utah. The sale was completed on March 29, 2018 for a purchase price of $57,000,000. |
1) Significant Accounting Pol33
1) Significant Accounting Policies: General Overview of Business (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
General Overview of Business | General Overview of Business Security National Financial Corporation and its wholly owned subsidiaries (the “Company”) operate in three main business segments: life insurance, cemetery and mortuary, and mortgages. The life insurance segment is engaged in the business of selling and servicing selected lines of life insurance, annuity products and accident and health insurance marketed primarily in the Intermountain West, California and eleven southern states. The cemetery and mortuary segment of the Company consists of eight mortuaries and five cemeteries in Utah and one cemetery in California. The mortgage segment is an approved government and conventional lender that originates and underwrites residential and commercial loans for new construction, existing homes and real estate projects primarily in Florida, Nevada, Texas, and Utah. |
1) Significant Accounting Pol34
1) Significant Accounting Policies: Basis of Presentation (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (GAAP). The presentation of certain amounts in prior years has 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 22 and 23. |
1) Significant Accounting Pol35
1) Significant Accounting Policies: Principles of Consolidation (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Principles of Consolidation | Principles of Consolidation These consolidated financial statements include the financial statements of the Company and its majority owned subsidiaries. All intercompany transactions and accounts have been eliminated in consolidation. |
1) Significant Accounting Pol36
1) Significant Accounting Policies: Use of Estimates (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Use of Estimates | Use of Estimates Management of the Company has made a number of estimates and assumptions related to the reported amounts of assets and liabilities, reported amounts of revenues and expenses, and the disclosure of contingent assets and liabilities to prepare these financial statements in conformity with GAAP. 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; 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. |
1) Significant Accounting Pol37
1) Significant Accounting Policies: Investments (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Investments | Investments The CompanyÂ’s management determines the appropriate classifications of investments in fixed maturity securities and equity securities at the acquisition date and re-evaluates the classifications at each balance sheet date. Fixed maturity securities held to maturity are carried at cost, adjusted for amortization of premium or accretion of discount. Although the Company has the ability and intent to hold these investments to maturity, infrequent and unusual conditions could occur under which it would sell certain of these securities. Those conditions include unforeseen changes in asset quality, significant changes in tax laws, and changes in regulatory capital requirements or permissible investments. Equity securities available for sale are carried at estimated fair value. Changes in fair values net of income taxes are reported as unrealized appreciation or depreciation and recorded as an adjustment directly to stockholdersÂ’ equity and, accordingly, have no effect on net income. 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 loanÂ’s collateral fair market value. Amounts over 80% will require additional collateral or mortgage insurance by an approved third-party insurer. Real estate held for investment is carried at cost, less accumulated depreciation provided on a straight line basis over the estimated useful lives of the properties, or is adjusted to a new basis for impairment in value, if any. Included are foreclosed properties which the Company intends to hold for investment purposes. These properties are recorded at the lower of cost or fair value upon foreclosure. Policy loans and other investments are carried at the aggregate unpaid balances, less allowances for possible losses. Short-term investments are carried at cost and consist of money market funds. Realized gains and losses on investments arise when investments are sold (as determined on a specific identification basis) or are other than temporarily impaired. If in managementÂ’s judgment a decline in the value of an investment below cost is other than temporary, the cost of the investment is written down to fair value with a corresponding charge to earnings. Factors considered in judging whether an impairment is other than temporary include: the financial condition, business prospects and credit worthiness of the issuer, the length of time that fair value has been less than cost, the relative amount of the decline, and the CompanyÂ’s ability and intent to hold the investment until the fair value recovers, which is not assured. |
1) Significant Accounting Pol38
1) Significant Accounting Policies: Cash and Cash Equivalents (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Cash and Cash Equivalents | Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. The Company maintains its cash in bank deposit accounts, which at times exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. |
1) Significant Accounting Pol39
1) Significant Accounting Policies: Loans Held For Sale (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Loans Held For Sale | Loans Held for Sale Mortgage loans held for sale prior to July 1, 2017 were carried at the lower of cost or market net of direct selling revenues and costs. Based on the short-term nature of these assets, the Company had no related allowance for loan losses recorded for these assets. On July 1, 2017 the Company elected the fair value option for loans held for sale. See Note 3 and Note 17 to Consolidated Financial Statements for additional disclosures regarding loans held for sale. |
1) Significant Accounting Pol40
1) Significant Accounting Policies: Mortgage Fee Income (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Mortgage Fee Income | Mortgage Fee Income Mortgage fee income consists of origination fees, processing fees, interest income and certain other income related to the origination of mortgage loans held for sale. Mortgage loans held for sale prior to July 1, 2017 were shown on the Company’s consolidated balance sheets at the lower of cost or market and all revenues and costs were deferred until the loans were sold to a third-party investor. On July 1, 2017, the Company made an election to use fair value accounting for all mortgage loans that are held for sale. Accordingly, all revenues and costs are now recognized when the mortgage loan is funded and any changes in fair value are shown as a component of mortgage fee income. See Note 3 and Note 17 to Consolidated Financial Statements for additional disclosures regarding loans held for sale. The Company, through its mortgage subsidiaries, sells mortgage loans to third-party investors without recourse unless defects are identified in the representations and warranties made at loan sale. It may be required, however, to repurchase a loan or pay a fee instead of repurchase under certain events, which include the following: · · · · · · · Loan purchase commitments generally specify a date 30 to 45 days after delivery upon which the underlying loans should be settled. Depending on market conditions, these commitment settlement dates can be extended at a cost to the Company. It is the Company's policy to cure any documentation problems regarding such loans at a minimal cost for up to a six-month time period and to pursue efforts to enforce loan purchase commitments from third-party investors concerning the loans. The Company believes that six months allows adequate time to remedy any documentation issues, to enforce purchase commitments, and to exhaust other alternatives. Remedial methods include the following: · · · · · Once purchase commitments have expired and other alternatives to remedy are exhausted, which could be earlier than the six-month time period, the loans are repurchased and transferred to the long-term investment portfolio at the lower of cost or fair value and previously recorded mortgage fee income that was to be received from a third-party investor is written off against the loan loss reserve. Determining Lower of Cost or Market Cost for loans held for sale is equal to the amount paid to the warehouse bank and the amount originally funded by the Company. Market value is often difficult to determine, but is based on the following: · · · · The appraised value of the real estate underlying the original mortgage loan adds support to the Company’s determination of fair value because if the loan becomes delinquent, the Company has sufficient value to collect the unpaid principal balance or the carrying value of the loan, thus minimizing credit risk. In determining the market value on the date of repurchase, the Company considers the total value of all of the loans because any sale of loans would be made as a pool. The majority of loans originated are sold to third-party investors. The amounts expected to be sold to investors are shown on the consolidated balance sheets as loans held for sale. |
1) Significant Accounting Pol41
1) Significant Accounting Policies: Loan Loss Reserve (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Loan Loss Reserve | Loan Loss Reserve The loan loss reserve is an estimate of probable losses at the balance sheet date that the Company will realize in the future on loans held for sale. The Company may be required to reimburse third-party investors for costs associated with early payoff of loans within the first six months of such loans and to repurchase loans where there is a default in any of the first four monthly payments to the investors or, in lieu of repurchase, to pay a negotiated fee to the investors. The CompanyÂ’s estimates are based upon historical loss experience and the best estimate of the probable loan loss liabilities. Upon completion of a transfer that satisfies the conditions to be accounted for as a sale, the Company initially measures at fair value liabilities incurred in a sale relating to any guarantee or recourse provisions. The Company accrues a monthly allowance for indemnification losses to investors based on total production. This estimate is based on the CompanyÂ’s historical experience and is included as a component of mortgage fee income. Subsequent updates to the recorded liability from changes in assumptions are recorded in selling, general and administrative expenses. The estimated liability for indemnification losses is included in other liabilities and accrued expenses. The loan loss reserve analysis involves mortgage loans that have been sold to third-party investors, which were believed to have met investor underwriting guidelines at the time of sale, where the Company has received a demand from the investor. There are generally three types of demands: make whole, repurchase, or indemnification. These types of demands are more particularly described as follows: Make whole demand Repurchase demand Indemnification demand The Company believes the allowance for loan losses and the loan loss reserve represent probable loan losses incurred as of the balance sheet date. Additional information related to the Loan Loss Reserve is included in Note 3. |
1) Significant Accounting Pol42
1) Significant Accounting Policies: Restricted Assets (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Restricted Assets | Restricted Assets Restricted assets are assets held in a trust account for future mortuary services and merchandise and consist of cash and cash equivalents; participations in mortgage loans held for investment with Security National Life Insurance Company (“Security National Life”); mutual funds carried at estimated fair value; equity securities carried at estimated fair value; and a surplus note with Security National Life. Restricted assets also represents escrows held for borrowers and investors under servicing and appraisal agreements relating to mortgage loans, funds held by warehouse banks in accordance with loan purchase agreements and funds held in escrow for certain real estate construction development projects. Additionally, the Company elected to fund its medical benefit safe-harbor limit based on 35% of the qualified direct costs for the preceding year, and has included this amount as a component of restricted cash. |
1) Significant Accounting Pol43
1) Significant Accounting Policies: Cemetery Perpetual Care Trust Investments (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Cemetery Perpetual Care Trust Investments | Cemetery Perpetual Care Trust Investments Cemetery endowment care trusts have been set up for four of the six cemeteries owned by the Company. Of the six cemeteries owned by the Company, four cemeteries are endowment care properties. Under endowment care arrangements a portion of the price for each lot sold is withheld and invested in a portfolio of investments similar to those described in the prior paragraph. The earnings stream from the investments is designed to fund future maintenance and upkeep of the cemetery. |
1) Significant Accounting Pol44
1) Significant Accounting Policies: Cemetery Land and Improvements (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Cemetery Land and Improvements | Cemetery Land and Improvements The development of a cemetery involves not only the initial acquisition of raw land but the installation of roads, water lines, landscaping and other costs to establish a marketable cemetery lot. The costs of developing the cemetery are shown as an asset on the balance sheet. The amount on the balance sheet is reduced by the total cost assigned to the development of a particular lot when the criterion for recognizing a sale of that lot is met. |
1) Significant Accounting Pol45
1) Significant Accounting Policies: Deferred Policy Acquisition Costs and Value of Business Acquired (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Deferred Policy Acquisition Costs and Value of Business Acquired | Deferred Policy Acquisition Costs and Value of Business Acquired Commissions and other costs, net of commission and expense allowances for reinsurance ceded, that vary with and are primarily related to the production of new insurance business have been deferred. Deferred policy acquisition costs (“DAC”) for traditional life insurance are amortized over the premium paying period of the related policies using assumptions consistent with those used in computing policy benefit reserves. For interest-sensitive insurance products, deferred policy acquisition costs are amortized generally in proportion to the present value of expected gross profits from surrender charges, investment, mortality and expense margins. This amortization is adjusted when estimates of current or future gross profits to be realized from a group of products are reevaluated. Deferred acquisition costs are written off when policies lapse or are surrendered. The Company follows GAAP when accounting for DAC on internal replacements of insurance and investment contracts. An internal replacement is a modification in product benefits, features, rights or coverage that occurs by the exchange of a contract for a new contract, or by amendment, endorsement, or rider to contract, or by the election of a feature or coverage within a contract. Modifications that result in a replacement contract that is substantially changed from the replaced contract are accounted for as an extinguishment of the replaced contract. Unamortized DAC, unearned revenue liabilities and deferred sales inducements from the replaced contract are written-off. Modifications that result in a contract that is substantially unchanged from the replaced contract are accounted for as a continuation of the replaced contract. Value of business acquired is the present value of estimated future profits of the acquired business and is amortized similar to deferred policy acquisition costs. |
1) Significant Accounting Pol46
1) Significant Accounting Policies: Mortgage Servicing Rights (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Mortgage Servicing Rights | Mortgage Servicing Rights Mortgage Service Rights (“MSR”) arise from contractual agreements between the Company and third-party investors (or their agents) when mortgage loans are sold. Under these contracts, the Company is obligated to retain and provide loan servicing functions on loans sold, in exchange for fees and other remuneration. The servicing functions typically performed include, among other responsibilities, collecting and remitting loan payments; responding to borrower inquiries; accounting for principal and interest, holding custodial (impound) funds for payment of property taxes and insurance premiums; counseling delinquent mortgagors; and supervising the acquisition of real estate owned and property dispositions. The total residential mortgage loans serviced for others consist primarily of agency conforming fixed-rate mortgage loans. The value of MSRs is derived from the net cash flows associated with the servicing contracts. The Company receives a servicing fee of generally about 0.250% annually on the remaining outstanding principal balances of the loans. Based on the result of the cash flow analysis, an asset or liability is recorded for mortgage servicing rights. The servicing fees are collected from the monthly payments made by the mortgagors. The Company generally receives other remuneration including rights to various mortgagor-contracted fees such as late charges, and collateral reconveyance charges and the Company is generally entitled to retain the interest earned on funds held pending remittance of mortgagor principal, interest, tax and insurance payments. Contractual servicing fees and late fees are included in other revenues on the consolidated statements of earnings. The Company’s subsequent accounting for MSRs is based on the class of MSRs. The Company has identified two classes of MSRs: MSRs backed by mortgage loans with initial term of 30 years and MSRs backed by mortgage loans with initial term of 15 years. The Company distinguishes between these classes of MSRs due to their differing sensitivities to change in value as the result of changes in market. After being initially recorded at fair value, MSRs backed by mortgage loans are accounted for using the amortization method. Amortization expense is included in other expenses on the consolidated statements of earnings. MSR amortization is determined by amortizing the MSR balance in proportion to, and over the period of the estimated future net servicing income of the underlying financial assets. Interest rate risk, prepayment risk, and default risk are inherent risks in MSR valuation. Interest rate changes largely drive prepayment rates. Refinance activity generally increases as rates decline. A significant decrease in rates beyond expectation could cause a decline in the value of the MSR. On the contrary, if rates increase borrowers are less likely to refinance or prepay their mortgage, which extends the duration of the loan and MSR values are likely to rise. Because of these risks, discount rates and prepayment speeds are used to estimate the fair value. 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. |
1) Significant Accounting Pol47
1) Significant Accounting Policies: Property and Equipment (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost. Depreciation is calculated principally on the straight-line method over the estimated useful lives of the assets which range from three to forty years. Leasehold improvements paid for by the Company as a lessee are amortized over the lesser of the useful life or remaining lease terms. |
1) Significant Accounting Pol48
1) Significant Accounting Policies: Long-lived Assets (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Long-lived Assets | Long-lived Assets Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the related carrying amount may not be recoverable. When required, impairment losses on assets to be held and used are recognized based on the fair value of the asset, and long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. No impairment of long-lived assets has been recognized in the accompanying financial statements. |
1) Significant Accounting Pol49
1) Significant Accounting Policies: Derivative Instruments (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Derivative Instruments | 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 mortgage-backed securities (“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 loan commitments and forward sale commitments are shown in current earnings as a component of mortgage fee income on the consolidated statements of earnings. Mortgage banking derivatives are shown in other assets and other liabilities and accrued expenses on the consolidated balance sheets. 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 net changes in the fair value of call and put options are shown in current earnings as a component of realized gains (losses) on investments and other assets. Call and put options are shown in other liabilities and accrued expenses on the consolidated balance sheets. |
1) Significant Accounting Pol50
1) Significant Accounting Policies: Allowance For Doubtful Accounts and Loan Losses and Impaired Loans (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Allowance For Doubtful Accounts and Loan Losses and Impaired Loans | Allowance for Doubtful Accounts and Loan Losses and Impaired Loans The Company records an allowance and recognizes an expense for potential losses from mortgage loans held for investment, other investments and receivables in accordance with GAAP. Receivables are the result of cemetery and mortuary operations, mortgage loan operations and life insurance operations. The allowance is based upon the CompanyÂ’s historical experience for collectively evaluated impairment. Other allowances are based upon receivables individually evaluated for impairment. Collectability of the cemetery and mortuary receivables is significantly influenced by current economic conditions. The critical issues that impact recovery of mortgage loan operations are interest rate risk, loan underwriting, new regulations and the overall economy. The Company provides 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 CompanyÂ’s historical experience in collecting similar receivables. The second component is based upon individual evaluation of loans that are determined to be impaired. Upon determining impairment, the Company establishes an individual impairment allowance based upon an assessment of the fair value of the underlying collateral. See the schedules in Note 2 for additional information. The allowance for losses on mortgage loans held for investment could change based on changes in the value of the underlying collateral, the performance status of the loans, or the CompanyÂ’s actual collection experience. The actual losses could change, in the near term, from the established allowance, based upon the occurrence or non-occurrence of these events. For purposes of determining the allowance for losses, the Company has segmented its mortgage loans held for investment by loan type. The CompanyÂ’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) |
1) Significant Accounting Pol51
1) Significant Accounting Policies: Future Policy Benefits and Unpaid Claims (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Future Policy Benefits and Unpaid Claims | Future Policy Benefits and Unpaid Claims Future policy benefit reserves for traditional life insurance are computed using a net level method, including assumptions as to investment yields, mortality, morbidity, withdrawals, and other assumptions based on the life insurance subsidiariesÂ’ experience, modified as necessary to give effect to anticipated trends and to include provisions for possible unfavorable deviations. Such liabilities are, for some plans, graded to equal statutory values or cash values at or prior to maturity. The range of assumed interest rates for all traditional life insurance policy reserves was 4% to 10%. Benefit reserves for traditional limited-payment life insurance policies include the deferred portion of the premiums received during the premium-paying period. Deferred premiums are recognized as income over the life of the policies. Policy benefit claims are charged to expense in the period the claims are incurred. Increases in future policy benefits are charged to expense. 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 3% to 6.5%. The Company records an unpaid claims liability for claims in the course of settlement equal to the death benefit amount less any reinsurance recoverable amount for claims reported. There is also an unpaid claims liability for claims incurred but not reported. This liability is based on the historical experience of the net amount of claims that were reported in reporting periods subsequent to the reporting period when claims were incurred. This amount is adjusted to include a margin for adverse deviation. |
1) Significant Accounting Pol52
1) Significant Accounting Policies: Participating Insurance (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Participating Insurance | Participating Insurance Participating business constituted 2% of insurance in force for the years ended 2017 and 2016. The provision for policyholdersÂ’ dividends included in policyholder obligations is based on dividend scales anticipated by management. Amounts to be paid are determined by the Board of Directors. |
1) Significant Accounting Pol53
1) Significant Accounting Policies: Recognition of Insurance Premiums and Other Considerations (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Recognition of Insurance Premiums and Other Considerations | Recognition of Insurance Premiums and Other Considerations Premiums |
1) Significant Accounting Pol54
1) Significant Accounting Policies: Reinsurance (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Reinsurance | Reinsurance The Company follows the procedure of reinsuring risks in excess of $100,000 to provide for greater diversification of business to allow management to control exposure to potential losses arising from large risks, and provide additional capacity for growth. The Company remains liable for amounts ceded in the event the reinsurers are unable to meet their obligations. The Company entered into coinsurance agreements with unaffiliated insurance companies under which the Company assumed 100% of the risk for certain life insurance policies and certain other policy-related liabilities of the insurance company. Reinsurance premiums, commissions, expense reimbursements, and reserves related to reinsured business are accounted for on a basis consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts. Expense allowances received in connection with reinsurance ceded are accounted for as a reduction of the related policy acquisition costs and are deferred and amortized accordingly. |
1) Significant Accounting Pol55
1) Significant Accounting Policies: Pre-need Sales and Costs (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Pre-need Sales and Costs | Pre-need Sales and Costs Pre-need contract sales of funeral services and caskets - revenue and costs associated with the sales of pre-need funeral services and caskets are deferred until the services are performed or the caskets are delivered. Sales of cemetery interment rights (cemetery burial property) - revenue and costs associated with the sale of cemetery interment rights are recognized in accordance with the retail land sales provisions based on GAAP. Under GAAP, recognition of revenue and associated costs from constructed cemetery property must be deferred until 10% of the sales price has been collected. Pre-need contract sales of cemetery merchandise (primarily markers and vaults) - revenue and costs associated with the sale of pre-need cemetery merchandise is deferred until the merchandise is delivered. Pre-need contract sales of cemetery services (primarily merchandise delivery, installation fees and burial opening and closing fees) - revenue and costs associated with the sales of pre-need cemetery services are deferred until the services are performed. Prearranged funeral and pre-need cemetery customer acquisition costs - costs incurred related to obtaining new pre-need contract cemetery and prearranged funeral services are accounted for under the guidance of the provisions based on GAAP. Obtaining costs, which include only costs that vary with and are primarily related to the acquisition of new pre-need cemetery and prearranged funeral services, are deferred until the merchandise is delivered or services are performed. Revenues and costs for at need sales are recorded when a valid contract exists, the services are performed, collection is reasonably assured and there are no significant obligations remaining. The Company, through its cemetery and mortuary operations, provides guaranteed funeral arrangements wherein a prospective customer can receive future goods and services at guaranteed prices. To accomplish this, the Company, through its life insurance operations, sells to the customer an increasing benefit life insurance policy that is assigned to the mortuaries. If, at the time of need, the policyholder/potential mortuary customer utilizes one of the CompanyÂ’s facilities, the guaranteed funeral arrangement contract that has been assigned will provide the funeral goods and services at the contracted price. The increasing life insurance policy will cover the difference between the original contract prices and current prices. Risks may arise if the difference cannot be fully met by the life insurance policy. However, management believes that given current inflation rates and related price increases of goods and services, the risk of exposure is minimal. |
1) Significant Accounting Pol56
1) Significant Accounting Policies: Goodwill (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Goodwill | Goodwill Previous acquisitions have been accounted for as purchases under which assets acquired and liabilities assumed were recorded at their fair values with the excess purchase price recognized as goodwill. The Company evaluates annually or when changes in circumstances warrant the recoverability of goodwill and if there is a decrease in value, the related impairment is recognized as a charge against income. No impairment of goodwill has been recognized in the accompanying financial statements. |
1) Significant Accounting Pol57
1) Significant Accounting Policies: Income Taxes (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Income Taxes | Income Taxes Income taxes include taxes currently payable plus deferred taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to the temporary differences in the financial reporting basis and tax basis of assets and liabilities and operating loss carry-forwards. Deferred tax assets are measured using enacted tax rates expected to apply to taxable income in the years in which these temporary differences are expected to be recovered or settled. Liabilities are established for uncertain tax positions expected to be taken in income tax returns when such positions are judged to meet the “more-likely-than-not” threshold based on the technical merits of the positions. Estimated interest and penalties related to uncertain tax penalties are included as a component of other expenses. |
1) Significant Accounting Pol58
1) Significant Accounting Policies: Earnings Per Common Share (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Earnings Per Common Share | Earnings Per Common Share The Company computes earnings per share which requires presentation of basic and diluted earnings per share. Basic earnings per equivalent Class A common share are computed by dividing net earnings by the weighted-average number of Class A common shares outstanding during each year presented, after the effect of the assumed conversion of Class C common stock to Class A common stock. Diluted earnings per share is computed by dividing net earnings by the weighted-average number of common shares outstanding during the year used to compute basic earnings per share plus dilutive potential incremental shares. Basic and diluted earnings per share amounts have been adjusted retroactively for the effect of annual stock dividends. |
1) Significant Accounting Pol59
1) Significant Accounting Policies: Stock Based Compensation (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Stock Based Compensation | Stock Based Compensation The cost of employee services received in exchange for an award of equity instruments is recognized in the financial statements and is measured based on the fair value on the grant date of the award. The fair value of stock options is calculated using the Black Scholes Option Pricing Model. Stock option compensation expense is recognized over the period during which an employee is required to provide service in exchange for the award and is included in personnel expenses on the consolidated statements of earnings. |
1) Significant Accounting Pol60
1) Significant Accounting Policies: Concentration of Credit Risk (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Concentration of Credit Risk | Concentration of Credit Risk For a description of the geographic concentration risk regarding mortgage loans held for investment and real estate held for investment, refer to Note 2 of the Notes to Consolidated Financial Statements. |
1) Significant Accounting Pol61
1) Significant Accounting Policies: Advertising (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Advertising | Advertising The Company expenses advertising costs as incurred. |
1) Significant Accounting Pol62
1) Significant Accounting Policies: Recent Accounting Pronouncements (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Standards Update (“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. 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 2017-01 was adopted by the Company on January 1, 2018 and it will be applied prospectively to transactions occurring after the adoption date, as applicable. ASU No. 2016-18: “Statement of Cash Flows (Topic 230): Restricted Cash” – Issued in November 2016, ASU 2016-18 requires restricted cash and cash equivalents to be included with cash and cash equivalents in the consolidated statement of cash flows and disclose the nature of the restrictions on cash and cash equivalents. The Company currently discloses the restrictions on cash and cash equivalents in Note 8 of the Notes to Consolidated Financial Statements and will continue these disclosures. Note 8 also discloses the components of the Company’s restricted assets which includes restricted cash. The Company currently presents changes in restricted cash and cash equivalents under investing activities on the consolidated statements of cash flows. Upon adoption of ASU 2016-18, the Company will amend the presentation in the consolidated statements of cash flows to include the restricted cash and cash equivalents with cash and cash equivalents and will retrospectively reclassify all periods presented. After adoption, net changes in restricted cash will no longer be presented under investing activities on the consolidated statements of cash flows. ASU 2016-18 was adopted by the Company on January 1, 2018. The adoption of this standard does not impact the Company’s total cash and cash equivalents but is a change in presentation within the consolidated statements of cash flows. 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 (such as mortgage loans and held to maturity debt securities) and available for sale debt securities. For assets held at amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in current 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 will be effective for the Company on January 1, 2020. 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 Accounting Standards Codification (“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 will be effective for the Company on January 1, 2019. 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. The Company adopted this standard on January 1, 2018 using the modified retrospective approach 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 of $603,170 included in accumulated other comprehensive income as of December 31, 2017 to retained earnings. See Note 2 and 8 for more details regarding equity securities available for sale and Note 18 for more details regarding the components of accumulated other comprehensive income. 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. Premiums and related fees from insurance contracts and mortgage banking revenues are excluded from the scope of this new guidance. The Company analyzed the potential impact of this standard by reviewing its revenue sources and its current policies and procedures to identify potential differences that would result from applying the requirements of this new standard to its contracts with customers. Through the review process, the Company identified and made changes to its processes, systems, and controls to support recognition and disclosure under the new standard. The Company also evaluated the potential changes from adopting the new standard on its future reporting and disclosures. The Company also reviewed its contracts with customers and developed a process for the systematic application of the standard to existing undelivered performance obligations at adoption. Additionally, the Company is implementing a new software program to accommodate recognition and disclosure requirements under the new standard. Finally, the Company identified and designed additional controls around new processes that were implemented upon adoption of the new standard. The Company’s revenues from contracts with customers that are subject to ASU 2014-09 include revenues on mortuary and cemetery contracts, which is less than 5% of the Company’s total revenues. 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 adoption of ASU 2014-09 will not significantly impact the Company’s results of operations or financial position. The Company adopted this standard on January 1, 2018 using a modified retrospective approach. No cumulative effect adjustment will be made to beginning retained earnings. The standard primarily impacts the manner in which the Company recognizes a) certain nonrefundable up-front fees and b) incremental costs to acquire new pre-need funeral trust contracts and pre-need and at-need cemetery contracts (i.e., selling costs). The nonrefundable fees will continue to be deferred and recognized as revenue when the underlying goods and services are delivered to the customer. The incremental selling costs will continue to be deferred and amortized by specific identification to the delivery of the underlying goods and services. Additionally, the amounts due from customers for undelivered performance obligations on cancelable pre-need contracts represent contract assets, which are required to be netted with deferred pre-need cemetery and mortuary contract revenues, instead of receivables on the Company’s consolidated balance sheets. 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. |
2) Investments_ Held-to-maturit
2) Investments: Held-to-maturity Securities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
AsOfDecember312017Member | |
Held-to-maturity Securities | Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value December 31, 2017 Fixed maturity securities held to maturity carried at amortized cost: U.S. Treasury securities and obligations of U.S. Government agencies $ 54,077,069 $ 211,824 $ (579,423) $ 53,709,470 Obligations of states and political subdivisions 5,843,176 112,372 (71,013) 5,884,535 Corporate securities including public utilities 158,350,727 14,336,452 (1,007,504) 171,679,675 Mortgage-backed securities 9,503,016 210,652 (162,131) 9,551,537 Redeemable preferred stock 623,635 49,748 (191) 673,192 Total fixed maturity securities held to maturity $ 228,397,623 $ 14,921,048 $ (1,820,262) $ 241,498,409 Equity securities available for sale at estimated fair value: Common stock: Industrial, miscellaneous and all other $ 6,002,931 $ 667,593 $ (632,669) $ 6,037,855 Total securities available for sale $ 6,002,931 $ 667,593 $ (632,669) $ 6,037,855 Mortgage loans held for investment at amortized cost: Residential $ 102,527,111 Residential construction 50,157,533 Commercial 54,954,865 Less: Unamortized deferred loan fees, net (1,659,828) Less: Allowance for loan losses (1,768,796) Total mortgage loans held for investment $ 204,210,885 Real estate held for investment - net of accumulated depreciation: Residential $ 68,329,917 Commercial 72,968,789 Total real estate held for investment $ 141,298,706 Other investments and policy loans at amortized cost: Policy loans $ 6,531,352 Insurance assignments 36,301,739 Federal Home Loan Bank stock 689,400 Other investments 3,219,622 Less: Allowance for doubtful accounts (846,641) Total policy loans and other investments $ 45,895,472 Accrued investment income $ 3,644,077 Total investments $ 629,484,618 |
AsOfDecember312016Member | |
Held-to-maturity Securities | Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value December 31, 2016 Fixed maturity securities held to maturity carried at amortized cost: 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 $ 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 Other investments and policy loans 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 Total investments $ 561,179,435 |
2) Investments_ Schedule of Unr
2) Investments: Schedule of Unrealized Loss on Investments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fixed Maturities | AsOfDecember312017Member | |
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 December 31, 2017 U.S. Treasury Securities and Obligations of U.S. Government Agencies $ 532,010 $ 51,606,699 $ 47,413 $ 643,380 $ 579,423 $ 52,250,079 Obligations of States and Political Subdivisions 296 214,882 70,717 2,225,021 71,013 2,439,903 Corporate Securities 167,786 11,551,865 839,718 13,193,258 1,007,504 24,745,123 Mortgage and other asset-backed securities 56,756 2,516,660 105,375 1,676,494 162,131 4,193,154 Redeemable preferred stock 191 11,421 - - 191 11,421 Total unrealized losses $ 757,039 $ 65,901,527 $ 1,063,223 $ 17,738,153 $ 1,820,262 $ 83,639,680 |
Fixed Maturities | AsOfDecember312016Member | |
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 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 and other asset-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 December 31, 2017 Industrial, miscellaneous and all other $ 213,097 98 $ 419,572 81 $ 632,669 Total unrealized losses $ 213,097 98 $ 419,572 81 $ 632,669 Fair Value $ 847,718 $ 1,329,213 $ 2,176,931 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 |
2) Investments_ Investments Cla
2) Investments: Investments Classified by Contractual Maturity Date (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Held-to-maturity Securities | |
Investments Classified by Contractual Maturity Date | Amortized Estimated Fair Cost Value Held to Maturity: Due in 1 year $ 20,125,883 $ 20,299,016 Due in 2-5 years 69,849,085 70,873,975 Due in 5-10 years 49,842,819 52,444,399 Due in more than 10 years 78,453,185 87,656,290 Mortgage-backed securities 9,503,016 9,551,537 Redeemable preferred stock 623,635 673,192 Total held to maturity $ 228,397,623 $ 241,498,409 |
2) Investments_ Gain (Loss) on
2) Investments: Gain (Loss) on Investments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Gain (Loss) on Investments | 2017 2016 Fixed maturity securities held to maturity: Gross realized gains $ 179,182 $ 389,558 Gross realized losses (893,567) (132,124) Other than temporary impairments (493,371) (100,000) Equity securities available for sale: Gross realized gains 166,950 221,817 Gross realized losses (76,475) (61,242) Other than temporary impairments (280,968) (170,358) Other assets: Gross realized gains 3,410,076 349,252 Gross realized losses (5,734,648) (943,648) Total $ (3,722,821) $ (446,745) |
2) Investments_ Schedule of Maj
2) Investments: Schedule of Major categories of net investment income (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Major categories of net investment income | 2017 2016 Fixed maturity securities held to maturity $ 10,626,400 $ 9,083,858 Equity securities available for sale 245,490 270,942 Mortgage loans held for investment 12,498,578 11,398,986 Real estate held for investment 11,703,947 10,969,828 Policy loans 488,561 498,444 Insurance assignments 13,289,818 11,876,836 Other investments 105,218 25,122 Short-term investments 543,528 268,988 Gross investment income 49,501,540 44,393,004 Investment expenses (14,438,572) (12,414,403) Net investment income $ 35,062,968 $ 31,978,601 |
2) Investments_ Real Estate Inv
2) Investments: Real Estate Investment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commercial Real Estate 1 | |
Real Estate Investment | Net Ending Balance Total Square Footage 2017 2016 2017 2016 Arizona $ 4,000 (1) $ 450,538 (1) - 16,270 Arkansas 96,169 100,369 3,200 3,200 Kansas 7,200,000 12,450,297 222,679 222,679 Louisiana 493,197 518,700 7,063 7,063 Mississippi 3,725,039 3,818,985 33,821 33,821 New Mexico 7,000 (1) 7,000 (1) - - Texas 335,000 3,734,974 23,470 23,470 Utah 61,108,384 (2) 47,893,073 433,244 433,244 $ 72,968,789 $ 68,973,936 723,477 739,747 (1) Includes Vacant Land (2) Includes 53rd Center completed in July 2017 |
Residential Real Estate 1 | |
Real Estate Investment | Net Ending Balance 2017 2016 Arizona $ 217,105 $ 742,259 California 5,463,878 5,848,389 Colorado - 364,489 Florida 7,000,684 8,327,355 Hawaii 712,286 - Ohio 10,000 - Oklahoma 17,500 46,658 Texas 509,011 1,091,188 Utah 54,113,272 59,485,466 Washington 286,181 286,181 $ 68,329,917 $ 76,191,985 |
2) Investments_ Real Estate Own
2) Investments: Real Estate Owned and Occupied by the Company (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Real Estate Owned and Occupied by the Company | 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 21,521 27% 121 West Election Road, Draper, UT Mortgage Sales 78,978 19% (1) This asset is included in property and equipment on the consolidated balance sheets |
2) Investments_ The Following I
2) Investments: The Following Is A Summary of The Allowance For Loan Losses As A Contra-asset Account For The Periods Presented (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
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 Held for Investment Years Ended December 31 Commercial Residential Residential Construction Total 2017 Allowance for credit losses: Beginning balance $ 187,129 $ 1,461,540 $ 100,114 $ 1,748,783 Charge-offs - (351,357) (64,894) (416,251) Provision - 436,264 - 436,264 Ending balance $ 187,129 $ 1,546,447 $ 35,220 $ 1,768,796 Ending balance: individually evaluated for impairment $ - $ 237,560 $ - $ 237,560 Ending balance: collectively evaluated for impairment $ 187,129 $ 1,308,887 $ 35,220 $ 1,531,236 Mortgage loans: Ending balance $ 54,954,865 $ 102,527,111 $ 50,157,533 $ 207,639,509 Ending balance: individually evaluated for impairment $ - $ 4,923,552 $ 461,834 $ 5,385,386 Ending balance: collectively evaluated for impairment $ 54,954,865 $ 97,603,559 $ 49,695,699 $ 202,254,123 2016 Allowance for credit losses: Beginning balance $ 187,129 $ 1,560,877 $ 100,114 $ 1,848,120 Charge-offs - (420,135) - (420,135) Provision - 320,798 - 320,798 Ending balance $ 187,129 $ 1,461,540 $ 100,114 $ 1,748,783 Ending balance: individually evaluated for impairment $ - $ 187,470 $ - $ 187,470 Ending balance: collectively evaluated for impairment $ 187,129 $ 1,274,070 $ 100,114 $ 1,561,313 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 |
2) Investments_ Schedule of agi
2) Investments: Schedule of aging of mortgage loans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of aging of mortgage loans | Age Analysis of Past Due Mortgage Loans Held for Investment Years Ended December 31 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 2017 Commercial $ 1,943,495 $ - $ - $ - $ 1,943,495 $ 53,011,370 $ 54,954,865 $ (187,129) $ (67,411) $ 54,700,325 Residential 6,613,479 495,347 3,591,333 1,332,219 12,032,378 90,494,733 102,527,111 (1,546,447) (1,164,130) 99,816,534 Residential Construction - - 461,834 - 461,834 49,695,699 50,157,533 (35,220) (428,287) 49,694,026 Total $ 8,556,974 $ 495,347 $ 4,053,167 $ 1,332,219 $ 14,437,707 $ 193,201,802 $ 207,639,509 $ (1,768,796) $ (1,659,828) $ 204,210,885 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) There was not any interest income recognized on loans past due greater than 90 days or in foreclosure. |
2) Investments_ Schedule of Imp
2) Investments: Schedule of Impaired Mortgage Loans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Impaired Mortgage Loans | Impaired Loans Years Ended December 31 Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized 2017 With no related allowance recorded: Commercial $ - $ - $ - $ 365,220 $ - Residential 3,322,552 3,322,552 - 3,290,094 - Residential construction 461,834 461,834 - 277,232 - With an allowance recorded: Commercial $ - $ - $ - $ - $ - Residential 1,601,000 1,601,000 237,560 1,350,115 - Residential construction - - - - - Total: Commercial $ - $ - $ - $ 365,220 $ - Residential 4,923,552 4,923,552 237,560 4,640,209 - Residential construction 461,834 461,834 - 277,232 - 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 - |
2) Investments_ The Company's P
2) Investments: The Company's Performing and Non-performing Mortgage Loans Were As Follows (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
The Company's Performing and Non-performing Mortgage Loans Were As Follows: | The CompanyÂ’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 Years Ended December 31 Commercial Residential Residential Construction Total 2017 2016 2017 2016 2017 2016 2017 2016 Performing $ 54,954,865 $ 51,333,630 $ 97,603,559 $ 55,677,084 $ 49,695,699 $ 40,735,222 $ 202,254,123 $ 147,745,936 Non-performing - 202,992 4,923,552 2,916,538 461,834 64,895 5,385,386 3,184,425 Total $ 54,954,865 $ 51,536,622 $ 102,527,111 $ 58,593,622 $ 50,157,533 $ 40,800,117 $ 207,639,509 $ 150,930,361 |
2) Investments_ Schedule of Mor
2) Investments: Schedule of Mortgate loans on a nonaccrual status (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Mortgate loans on a nonaccrual status | Mortgage Loans on Non-accrual Status Years Ended December 31 2017 2016 Commercial $ - $ 202,992 Residential 4,923,552 2,916,538 Residential construction 461,834 64,895 Total $ 5,385,386 $ 3,184,425 |
2) Investments_ Schedule of Pri
2) Investments: Schedule of Principal amounts due on mortgage loans held for investment by category (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Principal amounts due on mortgage loans held for investment by category | Principal Principal Principal Amounts Amounts Amounts Due in Due in Due Total 1 Year 2-5 Years Thereafter Residential $ 102,527,111 $ 5,454,776 $ 40,995,574 $ 56,076,761 Residential Construction 50,157,533 42,763,420 7,394,113 - Commercial 54,954,865 36,690,847 15,674,563 2,589,455 Total $ 207,639,509 $ 84,909,043 $ 64,064,250 $ 58,666,216 |
3) Loans Held For Sale_ Schedul
3) Loans Held For Sale: Schedule of Derivative Assets at Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Derivative Assets at Fair Value | As of December 31 2017 Aggregate fair value $ 133,414,188 Unpaid principal balance 129,233,411 Unrealized gain 4,180,777 |
3) Loans Held For Sale_ Sched77
3) Loans Held For Sale: Schedule of Mortgage Fee Income for Loans Held for Sale (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Mortgage Fee Income for Loans Held for Sale | 2017 2016 Loan fees $ 40,434,686 $ 44,341,501 Interest income 7,089,025 8,004,952 Secondary gains 108,756,613 140,651,103 Change in fair value of loan commitments (4,812,743) (862,163) Change in fair value of loans held for sale 4,180,777 - Provision for loan loss reserve (1,851,187) (2,988,754) Mortgage fee income $ 153,797,171 $ 189,146,639 |
3) Loans Held For Sale_ Sched78
3) Loans Held For Sale: Schedule of loan loss reserve which is included in other liabilities and accrued expenses (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of loan loss reserve which is included in other liabilities and accrued expenses | December 31 2017 2016 Balance, beginning of period $ 627,733 $ 2,805,900 Provision for current loan originations (1) 1,851,187 2,988,754 Additional provision for loan loss reserve - 1,700,000 Charge-offs, net of recaptured amounts 92,604 (6,866,921) Balance, at December 31 $ 2,571,524 $ 627,733 (1) Included in Mortgage fee income on the consolidated statements of earnings. |
4) Receivables_ Schedule of Rec
4) Receivables: Schedule of Receivables (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Receivables | Receivables consist of the following: December 31 2017 2016 Trade contracts $ 3,608,379 $ 3,410,321 Receivables from sales agents 3,528,703 4,016,393 Held in Escrow – Southern Security - 107,388 Other 4,851,305 3,231,926 Total receivables 11,988,387 10,766,028 Allowance for doubtful accounts (1,544,518) (2,355,482) Net receivables $ 10,443,869 $ 8,410,546 |
5) Value of Business Acquired80
5) Value of Business Acquired and Goodwill: Schedule of Value of Business Acquired (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Value of Business Acquired | December 31 2017 2016 Balance at beginning of year $ 7,570,300 $ 8,743,773 Value of business acquired - - Imputed interest at 7% 39,767 45,762 Amortization (1,021,308) (1,219,235) Net amortization charged to income (981,541) (1,173,473) Balance at end of year $ 6,588,759 $ 7,570,300 |
6) Property and Equipment_ Prop
6) Property and Equipment: Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Property, Plant and Equipment | December 31 2017 2016 Land and buildings $ 8,689,302 $ 9,155,665 Furniture and equipment 16,952,404 19,548,521 25,641,706 28,704,186 Less accumulated depreciation (17,572,326) (19,912,664) Total $ 8,069,380 $ 8,791,522 |
7) Bank and Other Loans Payab82
7) Bank and Other Loans Payable: Summary of Bank Loans Payable (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Summary of Bank Loans Payable | December 31 2017 2016 1.65% above the monthly LIBOR rate note payable in monthly installments of $13,741 including principal and interest, collateralized by real property with a book value of approximately $498,000, paid in full in November 2017. $ - $ 147,346 Mark to market of interest rate swaps (discussed below) adjustment, terminated in November 2017 - 3,308 6.50% note payable in monthly installments of $1,702 including principal and interest, collateralized by real property with a book value of approximately $271,000, due October 2041. 246,847 251,072 2.25% above the monthly LIBOR rate (1.56% at December 31, 2017) plus 1/16th of the monthly LIBOR rate note payable in monthly principal payments of $13,167 plus interest, collateralized by real property with a book value of approximately $4,457,000, due September 2021. 2,975,781 3,133,787 3.85% fixed note payable in monthly installments of $85,419 including principal and interest, collateralized by shares of Security National Life Insurance Company stock, due January 2018. 85,419 1,093,349 4.27% fixed note payable in monthly installments of $53,881 including principal and interest, collateralized by shares of Security National Life Insurance Company stock, due November 2021. 2,372,690 2,904,354 4.40% fixed note payable in monthly installments of $46,825 including principal and interest, collateralized by real property with a book value of approximately $11,837,000, due January 2026. 7,712,854 7,927,526 4.329% fixed note payable in monthly installments of $9,775 including principal and interest, collateralized by real property with a book value of approximately $3,004,000, due September 2025. 1,961,573 1,992,056 2.5% above the monthly LIBOR rate (1.56% at December 31, 2017) plus 1/16th of the monthly LIBOR rate construction loan payable, collateralized by real property with a book value of approximately $45,406,000, due August 2019. 28,343,684 8,777,941 2.25% above 90 day LIBOR rate (1.69% at December 31, 2017) note payable in monthly installments of approximately $125,000, collateralized by real property with a book value of approximately $34,431,000, due October 2019. 26,773,058 27,377,114 1 month LIBOR rate (1.56% at December 31, 2017) plus 3% loan purchase agreement with a warehouse line availability of $100,000,000, matures June 2018 61,298,220 76,843,180 1 month LIBOR rate (1.56% at December 31, 2017) plus 3% loan purchase agreement with a warehouse line availability of $100,000,000, matures September 2018 25,538,378 21,578,951 Other loans payable 142,421 110,695 Total bank and other loans 157,450,925 152,140,679 Less current installments 88,437,940 101,177,574 Bank and other loans, excluding current installments $ 69,012,985 $ 50,963,105 |
7) Bank and Other Loans Payab83
7) Bank and Other Loans Payable: Schedule of combined maturities of bank loans payable, lines of credit and notes and contracts payable (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of combined maturities of bank loans payable, lines of credit and notes and contracts payable | 2018 $ 88,437,940 2019 55,674,420 2020 1,085,699 2021 3,456,607 2022 326,923 Thereafter 8,469,336 Total $ 157,450,925 |
8) Cemetery Perpetual Care Tr84
8) Cemetery Perpetual Care Trust Investments and Obligation and Restricted Assets: Schedule of the components of the cemetery perpetual care obligation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of the components of the cemetery perpetual care obligation | December 31 2017 2016 Cash and cash equivalents $ 997,498 $ 865,699 Fixed maturity securities, held to maturity, at amortized cost 943,211 885,729 Equity securities, at estimated fair value 682,315 698,202 Participating interests in mortgage loans held for investment with Security National Life 4,128 3,821 Real estate 1,996,411 1,678,434 Note receivables from Cottonwood Mortuary Singing Hills Cemetery and Memorial Estates eliminated in consolidation 1,667,621 1,725,714 Total cemetery perpetual care trust investments 6,291,184 5,857,599 Cemetery perpetual care obligation (3,710,740) (3,598,580) Trust investments in excess of trust obligations $ 2,580,444 $ 2,259,019 |
8) Cemetery Perpetual Care Tr85
8) Cemetery Perpetual Care Trust Investments and Obligation and Restricted Assets: Schedule of Restricted Assets in Cemetery and Mortuary Endowment Care and Pre need Merchandise Funds (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Restricted Assets in Cemetery and Mortuary Endowment Care and Pre need Merchandise Funds | December 31 2017 2016 Cash and cash equivalents (1) $ 8,188,764 $ 7,089,134 Mutual funds, at estimated fair value 715,952 645,241 Fixed maturity securities, held to maturity, at amortized cost 1,130,088 990,613 Equity securities, at estimated fair value 94,006 91,362 Participating in mortgage loans held for investment with Security National Life 1,701,811 1,575,044 Total $ 11,830,621 $ 10,391,394 (1) Including cash and cash equivalents of $6,392,283 and $5,292,266 as of December 31, 2017 and 2016, respectively, for the life insurance and mortgage segments. |
9) Income Taxes_ Summary of Inc
9) Income Taxes: Summary of Income Tax Liability (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Summary of Income Tax Liability | December 31 2017 2016 Current $ (922,754) $ (1,511,762) Deferred 18,255,537 25,830,631 Total $ 17,332,783 $ 24,318,869 |
9) Income Taxes_ Schedule of co
9) Income Taxes: Schedule of components of Deferred Tax Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of components of Deferred Tax Liabilities | December 31 2017 2016 Assets Future policy benefits $ (6,803,339) $ (9,719,058) Loan loss reserve (697,779) (288,590) Unearned premium (886,706) (1,519,722) Available for sale securities (237,677) (51,266) Net operating loss (631,892) (1,531,160) Deferred compensation (1,600,401) (2,225,208) Deposit obligations (627,193) (1,033,580) Other (276,127) (3,384,144) Less: Valuation allowance - 431,802 Total deferred tax assets (11,761,114) (19,320,926) Liabilities Deferred policy acquisition costs 13,700,093 18,150,517 Basis difference in property and equipment 6,110,374 10,749,036 Value of business acquired 1,383,639 2,573,902 Deferred gains 6,978,067 9,290,123 Trusts 1,066,438 1,599,657 Tax on unrealized appreciation 778,040 2,788,322 Total deferred tax liabilities 30,016,651 45,151,557 Net deferred tax liability $ 18,255,537 $ 25,830,631 |
9) Income Taxes_ Schedule of 88
9) Income Taxes: Schedule of Components of Income Tax Expense (Benefit) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Components of Income Tax Expense (Benefit) | 2017 2016 Current Federal $ 934,647 $ 1,138,196 State 236,559 245,764 1,171,206 1,383,960 Deferred Federal (7,811,030) 5,686,651 State 59,002 443,993 (7,752,028) 6,130,644 Total $ (6,580,822) $ 7,514,604 |
9) Income Taxes_ Schedule of Ef
9) Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Effective Income Tax Rate Reconciliation | 2017 2016 Computed expense at statutory rate $ 2,560,918 $ 6,699,099 State tax expense, net of federal tax benefit 195,070 455,240 Change in valuation allowance (431,802) 431,802 Change in tax law (8,973,722) - Other, net 68,714 (71,537) Income tax expense (benefit) $ (6,580,822) $ 7,514,604 |
9) Income Taxes_ Summary of Ope
9) Income Taxes: Summary of Operating Loss Carryforwards (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Summary of Operating Loss Carryforwards | Net Operating Losses and Tax Credit Carryforwards: Year of Expiration 2019 $ 229,201 2020 114,601 2021 17,101 2022 - 2023 - Thereafter up through 2037 2,323,615 $ 2,684,518 |
10) Reinsurance, Commitments 91
10) Reinsurance, Commitments and Contingencies: Schedule of Future Minimum Rental Payments for Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Future Minimum Rental Payments for Operating Leases | Years Ending December 31 2018 $ 4,825,139 2019 3,371,267 2020 1,705,632 2021 847,504 2022 26,357 Total $ 10,775,899 |
12) Capital Stock_ Schedule of
12) Capital Stock: Schedule of Activity in shares of capital stock (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Activity in shares of capital stock | Class A Class C Balance at December 31, 2015 13,109,100 1,709,640 Exercise of stock options 42,634 104,975 Stock dividends 657,919 96,967 Conversion of Class C to Class A 9,353 (9,353) Balance at December 31, 2016 13,819,006 1,902,229 Exercise of stock options 8,183 103,402 Stock dividends 692,635 99,496 Conversion of Class C to Class A 15,753 (15,753) Balance at December 31, 2017 14,535,577 2,089,374 |
12) Capital Stock_ Schedule o93
12) Capital Stock: Schedule of Basic and diluted earnings per share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Basic and diluted earnings per share | 2017 2016 Numerator: Net earnings $ 14,112,934 $ 12,188,627 Denominator: Denominator for basic earnings per share-weighted-average shares 15,972,329 15,575,632 Effect of dilutive securities Employee stock options 313,601 336,960 Dilutive potential common shares 313,601 336,960 Denominator for diluted earnings per share-adjusted weighted-average shares and assumed conversions 16,285,930 15,912,592 Basic earnings per share $0.88 $0.78 Diluted earnings per share $0.87 $0.77 |
13) Stock Compensation Plans_ S
13) Stock Compensation Plans: Schedule of Assumptions Used (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Assumptions Used | Assumptions Grant Date Plan Weighted-Average Fair Value of Each Option (1) Expected Dividend Yield Underlying stock FMV Weighted-Average Volatility Weighted-Average Risk-Free Interest Rate Weighted-Average Expected Life (years) December 1, 2017 All Plans $ 1.20 5% $ 4.80 41.07% 2.07% 4.35 December 21, 2016 2013 Plan $ 2.17 5% $ 6.62 54.42% 1.99% 5.31 December 7, 2016 2014 Director Plan $ 2.41 5% $ 7.36 54.60% 1.93% 5.31 December 2, 2016 2013 Plan $ 1.89 5% $ 6.68 47.05% 1.78% 4.33 December 2, 2016 2014 Director Plan $ 1.89 5% $ 6.68 47.05% 1.78% 4.33 |
13) Stock Compensation Plans_95
13) Stock Compensation Plans: Schedule of Activity of the 2003 Plan (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Activity of the 2003 Plan | Activity of the stock option plans is summarized as follows: 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 Adjustment for the effect of stock dividends 35,346 26,491 Granted 133,500 80,000 Exercised (42,634) (127,629) Cancelled (2,500) - Outstanding at December 31, 2016 741,973 $ 4.33 556,298 $ 4.52 Adjustment for the effect of stock dividends 40,978 24,934 Granted 124,500 70,000 Exercised (8,182) (103,402) Cancelled (18,843) (24,227) Outstanding at December 31, 2017 880,426 $ 4.35 523,603 $ 5.24 Exercisable at end of year 749,701 $ 4.22 450,103 $ 5.31 Available options for future grant 421,241 165,638 Weighted average contractual term of options outstanding at December 31, 2017 6.62 years 3.45 years Weighted average contractual term of options exercisable at December 31, 2017 6.55 years 2.38 years Aggregated intrinsic value of options outstanding at December 31, 2017 (1) $915,293 $204,015 Aggregated intrinsic value of options exercisable at December 31, 2017 (1) $904,898 $189,315 (1) The Company used a stock price of $5.00 as of December 31, 2017 to derive intrinsic value. |
14) Statutory Financial Infor96
14) Statutory Financial Information and Dividend Limitations: Schedule of statutory accounting practices (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of statutory accounting practices | Net Income Capital and Surplus 2017 2016 2017 2016 Amounts by insurance subsidiary: Security National Life Insurance Company $(3,025,616) $ 2,601,408 $ 36,281,485 $ 36,789,358 First Guaranty Insurance Company 1,437,963 174,562 4,583,346 4,091,847 Memorial Insurance Company of America 36 460 1,081,799 1,081,319 Southern Security Life Insurance Company, Inc. 72 889 1,591,070 1,592,440 Trans-Western Life Insurance Company 2,597 1,203 502,930 500,333 Total $(1,584,948) $ 2,778,522 $ 44,040,630 $ 44,055,297 |
15) Business Segment Informat97
15) Business Segment Information: Schedule of Segment Reporting Information, by Segment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Segment Reporting Information, by Segment | 2017 Life Cemetery/ Intercompany Insurance Mortuary Mortgage Eliminations Consolidated Revenues: From external sources: Revenue from customers $ 70,412,476 $ 12,657,117 $ 153,797,171 $ - $ 236,866,764 Net investment income 34,068,565 445,663 548,740 - 35,062,968 Realized gains (losses) on investments and other assets (3,871,309) 186,335 736,492 - (2,948,482) Other than temporary impairments (774,339) - - - (774,339) Other revenues 856,094 97,602 7,765,483 - 8,719,179 Intersegment revenues: Net investment income 5,987,731 422,623 392,083 (6,802,437) - Total revenues 106,679,218 13,809,340 163,239,969 (6,802,437) 276,926,090 Expenses: Death and other policy benefits 36,095,018 - - - 36,095,018 Increase in future policy benefits 23,622,750 - - - 23,622,750 Amortization of deferred policy and preneed acquisition costs and value of business acquired 8,157,456 322,794 - - 8,480,250 Depreciation 484,349 401,564 1,334,780 - 2,220,693 General, administrative and other costs: Intersegment 315,588 184,853 505,707 (1,006,148) - Provision for loan losses - - - - - Costs related to funding mortgage loans - - 8,663,223 - 8,663,223 Other 30,632,307 10,689,813 142,952,592 - 184,274,712 Interest expense: Intersegment 445,520 181,793 5,168,976 (5,796,289) - Other 2,218,956 330,211 3,488,165 - 6,037,332 Total benefits and expenses 101,971,944 12,111,028 162,113,443 (6,802,437) 269,393,978 Earnings before income taxes $ 4,707,274 $ 1,698,312 $ 1,126,526 $ - $ 7,532,112 Income tax benefit (expense) 6,400,669 (606,293) 786,446 - 6,580,822 Net earnings $ 11,107,943 $ 1,698,312 $ 1,912,972 $ - $ 14,112,934 Identifiable assets $ 858,068,899 $ 95,097,729 $ 161,051,531 $ (134,810,675) $ 979,407,484 Goodwill $ 2,765,570 $ - $ - $ - $ 2,765,570 2016 Life Cemetery/ Intercompany Insurance Mortuary Mortgage Eliminations Consolidated Revenues: From external sources: Revenue from customers $ 64,501,017 $ 12,267,640 $ 189,146,639 $ - $ 265,915,296 Net investment income 31,019,594 312,494 646,513 - 31,978,601 Realized gains (losses) on investments and other assets (277,040) 211,429 (110,776) - (176,387) Other than temporary impairments (270,358) - - - (270,358) Other revenues 632,260 88,676 6,166,813 - 6,887,749 Intersegment revenues: Net investment income 7,119,692 691,876 327,778 (8,139,346) - Total revenues 102,725,165 13,572,115 196,176,967 (8,139,346) 304,334,901 Expenses: Death and other policy benefits 33,387,380 - - - 33,387,380 Increase in future policy benefits 21,322,195 - - - 21,322,195 Amortization of deferred policy and preneed acquisition costs and value of business acquired 7,647,097 356,078 - - 8,003,175 Depreciation 596,827 390,362 1,195,535 - 2,182,724 General, administrative and other costs: Intersegment 261,119 148,025 219,974 (629,118) - Provision for loan losses - - 1,700,000 - 1,700,000 Costs related to funding mortgage loans - - 9,191,488 - 9,191,488 Other 29,478,156 10,524,535 163,730,148 1 203,732,840 Interest expense: Intersegment 519,959 651,046 6,339,224 (7,510,229) - Other 1,654,264 282,878 3,174,726 - 5,111,868 Total benefits and expenses 94,866,997 12,352,924 185,551,095 (8,139,346) 284,631,670 Earnings before income taxes $ 7,858,168 $ 1,219,191 $ 10,625,872 $ - $ 19,703,231 Income tax expense (3,451,292) - (4,063,312) - (7,514,604) Net earnings $ 4,406,876 $ 1,219,191 $ 6,562,560 $ - $ 12,188,627 Identifiable assets $ 818,140,804 $ 99,611,263 $ 172,778,387 $ (140,874,459) $ 949,655,995 Goodwill $ 2,765,570 $ - $ - $ - $ 2,765,570 Expenditures for long-lived assets $ 532,958 $ 723,445 $ 2,310,108 $ - $ 3,566,511 |
17) Fair Value of Financial I98
17) Fair Value of Financial Instruments: Schedule of fair value assets and liabilities measured on a recurring basis (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
AsOfDecember312017Member | |
Schedule of fair value assets and liabilities measured on a recurring basis | Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets accounted for at fair value on a recurring basis Common stock $ 6,037,855 $ 6,037,855 $ - $ - Total securities available for sale $ 6,037,855 $ 6,037,855 $ - $ - Loans held for sale 133,414,188 133,414,188 Restricted assets (1) 809,958 809,958 - - Cemetery perpetual care trust investments (1) 682,315 682,315 - - Derivatives - loan commitments (2) 2,032,782 - - 2,032,782 Total assets accounted for at fair value on a recurring basis $ 9,562,910 $ 7,530,128 $ - $ 2,032,782 Liabilities accounted for at fair value on a recurring basis Derivatives - call options (3) $ (64,689) $ (64,689) $ - $ - Derivatives - put options (3) (20,568) (20,568) - - Derivatives - loan commitments (3) (36,193) - - (36,193) Total liabilities accounted for at fair value on a recurring basis $ (121,450) $ (85,257) $ - $ (36,193) (1) Mutual funds and equity securities (2) Included in other assets on the consolidated balance sheets (3) Included in other liabilities and accrued expenses on the consolidated balance sheets |
AsOfDecember312016Member | |
Schedule of fair value assets and liabilities measured on a 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 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) Mutual funds and equity securities (2) Included in other assets on the consolidated balance sheets (3) Included in bank and other loans payable on the consolidated balance sheets (4) Included in other liabilities and accrued expenses on the consolidated balance sheets |
17) Fair Value of Financial I99
17) Fair Value of Financial Instruments: Schedule of Effect of Significant Unobservable Inputs, Changes in Plan Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Effect of Significant Unobservable Inputs, Changes in Plan Assets | Significant Range of Inputs Fair Value at Valuation Unobservable Minimum Maximum Weighted 12/31/2017 Technique Input(s) Value Value Average Loans held for sale $ 133,414,188 Market approach Investor contract pricing as a percentage of unpaid principal balance 100.0% 110.5% 102.8% Derivatives - loan commitments (net) 1,996,589 Market approach Fall-out factor 1.0% 99.0% 19.0% Initial-Value N/A N/A N/A Servicing 151 bps 382 bps 275 bps |
17) Fair Value of Financial 100
17) Fair Value of Financial Instruments: Schedule of Changes in the consolidated balance sheet line items measured using level 3 inputs (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
AsOfDecember312017Member | |
Schedule of Changes in the consolidated balance sheet line items measured using level 3 inputs | Net Derivatives Loan Commitments Bank Loan Interest Rate Swaps Loans Held for Sale Balance - December 31, 2016, as restated $ 6,809,332 $ (3,308) $ - Originations 1,233,683,666 Sales (1,151,031,388) Total gains (losses): Included in earnings (1) (4,812,743) - 50,761,910 Included in other comprehensive income (2) - 3,308 - Balance - December 31, 2017 $ 1,996,589 $ - $ 133,414,188 (1) As a component of mortgage fee income on the consolidated statements of earnings (2) As a component of unrealized gains on derivative instruments on the consolidated statements of comprehensive income |
AsOfDecember312016Member | |
Schedule of Changes in the consolidated balance sheet line items measured using level 3 inputs | Net Derivatives Loan Commitments Bank Loan Interest Rate Swaps Balance - December 31, 2015, as restated $ 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, as restated $ 6,809,332 $ (3,308) (1) As a component of mortgage fee income on the consolidated statements of earnings (2) As a component of unrealized gains on derivative instruments on the consolidated statements of comprehensive income |
17) Fair Value of Financial 101
17) Fair Value of Financial Instruments: Fair Value Assets Measured on a Nonrecurring Basis (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
AsOfDecember312017Member | |
Fair Value Assets Measured on a Nonrecurring 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 nonrecurring basis Impaired mortgage loans held for investment $ 1,363,440 $ - $ - $ 1,363,440 Mortgage servicing rights additions 6,085,352 - - 6,085,352 Impaired real estate held for investment 8,500,000 - - 8,500,000 Impaired fixed maturity securities, held to maturity 426,984 - 426,984 - Total assets accounted for at fair value on a nonrecurring basis $ 16,375,776 $ - $ 426,984 $ 15,948,792 |
AsOfDecember312016Member | |
Fair Value Assets Measured on a Nonrecurring 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 nonrecurring basis Impaired mortgage loans held for investment $ 2,809,925 $ - $ - $ 2,809,925 Mortgage servicing rights additions 8,603,154 - - 8,603,154 Impaired 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 |
17) Fair Value of Financial 102
17) Fair Value of Financial Instruments: Schedule of Financial Instruments Carried at Other Than Fair Value (Tables) | 12 Months Ended |
Dec. 31, 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 $ 228,397,623 $ - $ 233,806,219 $ 7,692,190 $ 241,498,409 Mortgage loans held for investment Residential 99,816,535 - - 106,050,169 106,050,169 Residential construction 49,694,025 - - 49,694,025 49,694,025 Commercial 54,700,325 - - 56,473,156 56,473,156 Mortgage loans held for investment, net $ 204,210,885 $ - $ - $ 212,217,350 $ 212,217,350 Policy loans 6,531,352 - - 6,531,352 6,531,352 Insurance assignments, net (1) 35,455,098 - - 35,455,098 35,455,098 Restricted assets (2) 1,130,088 - 1,152,324 - 1,152,324 Restricted assets (3) 1,701,811 - - 1,796,910 1,796,910 Cemetery perpetual care trust investments (2) 943,211 - 953,404 - 953,404 Cemetery perpetual care trust investments (3) 4,128 - - 4,411 4,411 Mortgage servicing rights, net 21,376,937 - - 27,427,174 27,427,174 Liabilities Bank and other loans payable $ (157,450,925) $ - $ - $ (157,450,925) $ (157,450,925) Policyholder account balances (4) (47,867,037) - - (34,557,111) (34,557,111) Future policy benefits - annuities (4) (99,474,392) - - (98,827,107) (98,827,107) (1) Included in other investments and policy loans on the consolidated balance sheets (2) Fixed maturity securities held to maturity (3) Participation in mortgage loans held for investment (commercial) (4) Included in future policy benefits and unpaid claims on the consolidated balance sheets 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 189,139,832 - - 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 Restricted assets (2) 990,613 - 991,528 - 991,528 Restricted assets (3) 1,575,044 - - 1,651,539 1,651,539 Cemetery perpetual care trust investments (2) 885,729 - 892,260 - 892,260 Cemetery perpetual care trust investments (3) 3,821 - - 3,863 3,863 Mortgage servicing rights, net 18,872,362 - - 25,496,832 25,496,832 Liabilities Bank and other loans payable $ (152,137,341) $ - $ - $ (152,137,341) $ (152,137,341) Policyholder account balances (4) (49,421,125) - - (38,530,031) (38,530,031) Future policy benefits - annuities (4) (99,385,662) - - (100,253,261) (100,253,261) (1) Included in other investments and policy loans on the consolidated balance sheets (2) Fixed maturity securities held to maturity (3) Participation in mortgage loans held for investment (commercial) (4) Included in future policy benefits and unpaid claims on the consolidated balance sheets |
18) Accumulated Other Compre103
18) Accumulated Other Comprehensive Income: Schedule of Changes in accumulated other comprehensive income (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Changes in accumulated other comprehensive income | December 31 2017 2016 Unrealized gains on equity securities available for sale, restricted assets and cemetery perpetual care trust investments $ 421,499 $ 996,343 Reclassification adjustment for net realized gains in net income 90,475 160,575 Net unrealized gains before taxes 511,974 1,156,918 Tax expense (175,644) (399,228) Net 336,330 757,690 Unrealized gains for bank loan interest rate swaps before taxes 3,308 10,639 Tax expense (1,290) (4,149) Net 2,018 6,490 Other comprehensive income changes $ 338,348 $ 764,180 |
18) Accumulated Other Compre104
18) Accumulated Other Comprehensive Income: Accumulated Balances of Other Comprehensive Income (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
AsOfDecember312017Member | |
Accumulated Balances of Other Comprehensive Income | Beginning Balance December 31, 2016 Change for the period Ending Balance December 31, 2017 Unrealized gains on equity securities available for sale, restricted assets and cemetery perpetual care trust investments $ 266,840 $ 336,330 $ 603,170 Unrealized gains for bank loan interest rate swaps (2,018) 2,018 - Other comprehensive income $ 264,822 $ 338,348 $ 603,170 |
AsOfDecember312016Member | |
Accumulated Balances of Other Comprehensive Income | Beginning Balance December 31, 2015 Change for the period Ending Balance December 31, 2016 Unrealized gains (losses) on equity securities available for sale, restricted assets and cemetery perpetual care trust investments $ (490,850) $ 757,690 $ 266,840 Unrealized gains (losses) for bank loan interest rate swaps (8,508) 6,490 (2,018) Other comprehensive income (loss) $ (499,358) $ 764,180 $ 264,822 |
19) Derivative Instruments_ Sch
19) Derivative Instruments: Schedule of Fair Values and Notional Amounts of Derivative Instruments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Fair Values and Notional Amounts of Derivative Instruments | Fair Values and Notional Amounts of Derivative Instruments December 31, 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 $105,679,107 $2,032,782 $ 36,193 $191,757,193 $6,911,544 $102,212 Call options Other liabilities 1,488,550 -- 64,689 2,169,850 -- 109,474 Put options Other liabilities 2,265,900 -- 20,568 1,336,750 -- 26,494 Derivatives designated as fair value hedging instruments: Interest rate swaps Bank and other loans payable -- -- -- 175,762 -- 3,308 Total $109,433,557 $2,032,782 $121,450 $195,439,555 $6,911,544 $241,488 |
19) Derivative Instruments_ 106
19) Derivative Instruments: Schedule of Gains and Losses on Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Gains and Losses on Derivatives | Net Amount Gain (Loss) Years ended December 31 Derivative Classification 2017 2016 Interest Rate Swaps Other comprehensive income $ 2,018 $ 6,490 Loan commitments Mortgage fee income $ (4,812,743) (1) $ (862,163) Call and put options Realized gains on investments and other assets $ 316,244 $ 208,409 (1) Includes the transfer of loan commitments to the value of loans held for sale. |
20) Acquisitions_ Estimated Fai
20) Acquisitions: Estimated Fair Values of Assets Acquired and Liabilities Assumed (Tables) | 12 Months Ended |
Dec. 31, 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 |
20) Acquisitions_ Business Acqu
20) Acquisitions: Business Acquisition, Pro Forma Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Business Acquisition, Pro Forma Information | For the Year Ended December 31, 2016 (unaudited) Total revenues $ 306,471,770 Net earnings $ 11,923,653 Net earnings per Class A equivalent common share $ 0.77 Net earnings per Class A equivalent common share assuming dilution $ 0.75 |
21) Mortgage Servicing Rights_
21) Mortgage Servicing Rights: Schedule of mortgage servicing rights (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of mortgage servicing rights | December 31 2017 2016 Amortized cost: Balance before valuation allowance at beginning of year $ 18,872,362 $ 12,679,755 MSR additions resulting from loan sales 6,085,352 8,603,154 Amortization (1) (3,580,777) (2,410,547) Application of valuation allowance to write down MSRs with other than temporary impairment - - Balance before valuation allowance at year end $ 21,376,937 $ 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 year end $ - $ - Mortgage servicing rights, net $ 21,376,937 $ 18,872,362 Estimated fair value of MSRs at year end $ 27,427,174 $ 25,496,832 (1) Included in other expenses on the consolidated statements of earnings |
21) Mortgage Servicing Right110
21) Mortgage Servicing Rights: Schedule of Mortgage Servicing Rights, Future Amortization Expense (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Mortgage Servicing Rights, Future Amortization Expense | Estimated MSR Amortization 2018 $ 4,057,830 2019 4,057,830 2020 4,057,830 2021 4,057,684 2022 3,242,163 Thereafter 1,903,600 Total $ 21,376,937 |
21) Mortgage Servicing Right111
21) Mortgage Servicing Rights: Schedule of Other Revenues (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Other Revenues | 2017 2016 Contractual servicing fees $ 7,199,649 $ 5,661,699 Late fees 284,550 203,509 Total $ 7,484,199 $ 5,865,207 |
21) Mortgage Servicing Right112
21) Mortgage Servicing Rights: Summary of Unpaid Principal Balances of the Servicing Portfolio (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Summary of Unpaid Principal Balances of the Servicing Portfolio | Years Ended December 31 2017 2016 Servicing UPB 2,924,868,843 2,720,441,340 |
21) Mortgage Servicing Right113
21) Mortgage Servicing Rights: Assumptions used in determining MSR value (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Assumptions used in determining MSR value | Prepayment Speeds Average Life(Years) Discount Rate December 31, 2017 3.67% 6.34 10.01 December 31, 2016 3.77% 6.52 10.01 |
22) Correction of Errors_ Sched
22) Correction of Errors: Schedule of Error Corrections and Prior Period Adjustments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Consolidated Balance Sheets | |
Schedule of Error Corrections and Prior Period Adjustments | As of December 31, 2016 As Originally Reported Adjustment (A) As Previously Reported Adjustments (B) As Restated Equity securities, available for sale, at estimated fair value $ 10,573,356 $ - $ 10,573,356 $ (662,100) $ 9,911,256 Mortgage loans held for investment 149,181,578 - 149,181,578 (190,846) 148,990,732 Policy loans and other investments 40,937,146 - 40,937,146 662,100 41,599,246 Loans held for sale (formerly called Mortgage loans sold to investors) 82,491,091 - 82,491,091 106,648,741 189,139,832 Receivables, net 18,870,119 - 18,870,119 (10,459,573) 8,410,546 Other assets 6,891,468 - 6,891,468 2,418,572 9,310,040 Total Assets 854,004,671 - 854,004,671 98,416,894 952,421,565 Future policy benefits and unpaid claims 585,610,063 - 585,610,063 (1,542,371) 584,067,692 Bank and other loans payable 53,718,548 - 53,718,548 98,422,131 152,140,679 Other liabilities and accrued expenses 33,950,503 - 33,950,503 742,982 34,693,485 Income taxes 27,904,294 - 27,904,294 (3,585,425) 24,318,869 Total liabilities 725,825,117 - 725,825,117 94,037,317 819,862,434 Accumulated other comprehensive income, net of taxes 264,822 - 264,822 - 264,822 Retained earnings 63,029,627 - 63,029,627 4,379,577 67,409,204 Total stockholders' equity 128,179,554 - 128,179,554 4,379,577 132,559,131 Total Liabilities and Stockholders' Equity 854,004,671 - 854,004,671 98,416,894 952,421,565 As of January 1, 2016 As Originally Reported Adjustment (A) As Previously Reported Adjustments (B) As Restated Loans held for sale (formerly called Mortgage loans sold to investors) $ 115,286,455 $ - $ 115,286,455 $ 96,166,551 $ 211,453,006 Receivables, net 16,026,100 - 16,026,100 (9,965,106) 6,060,994 Other assets 7,100,869 - 7,100,869 4,338,404 11,439,273 Total Assets 749,933,317 - 749,933,317 90,539,849 840,473,166 Future policy benefits and unpaid claims 517,177,388 - 517,177,388 (1,388,134) 515,789,254 Bank and other loans payable 40,908,915 - 40,908,915 90,096,699 131,005,614 Income taxes 25,052,059 - 25,052,059 (4,639,170) 20,412,889 Total liabilities 638,687,092 - 638,687,092 84,069,395 722,756,487 Accumulated other comprehensive income (loss), net of taxes 1,533,828 (2,033,186) (499,358) - (499,358) Retained earnings 52,021,764 2,033,186 54,054,950 6,470,454 60,525,404 Total stockholders' equity 111,246,225 - 111,246,225 6,470,454 117,716,679 Total Liabilities and Stockholders' Equity 749,933,317 - 749,933,317 90,539,849 840,473,166 |
Consolidated Statements of Earnings | |
Schedule of Error Corrections and Prior Period Adjustments | Year Ended December 31, 2016 As Originally Reported Adjustment (A) As Previously Reported Adjustments (B) As Restated Net investment income $ 37,582,444 $ - $ 37,582,444 $ (5,603,843) $ 31,978,601 Mortgage fee income 186,416,311 - 186,416,311 2,730,328 189,146,639 Total revenues 307,208,416 - 307,208,416 (2,873,515) 304,334,901 Increase in future policy benefits 21,476,432 - 21,476,432 (154,237) 21,322,195 Commissions 87,762,583 - 87,762,583 871,911 88,634,494 Provision for loan loss reserve 4,688,754 - 4,688,754 (2,988,754) 1,700,000 Cost related to funding mortgage loans 8,756,791 - 8,756,791 434,697 9,191,488 Total benefits and expenses 286,468,053 - 286,468,053 (1,836,383) 284,631,670 Earnings before income taxes 20,740,363 - 20,740,363 (1,037,132) 19,703,231 Income tax expense (6,460,859) - (6,460,859) (1,053,745) (7,514,604) Net earnings 14,279,504 - 14,279,504 (2,090,877) 12,188,627 Net earnings per common share (1) $0.92 $0.00 $0.92 ($0.13) $0.78 Net earnings per common share assuming dilution (1) $0.90 $0.00 $0.90 ($0.13) $0.77 |
Consolidated Satements of Comprehensive Income | |
Schedule of Error Corrections and Prior Period Adjustments | Year Ended December 31, 2016 As Originally Reported Adjustment (A) As Previously Reported Adjustments (B) As Restated Net earnings $ 14,279,504 $ - $ 14,279,504 $ (2,090,877) $ 12,188,627 Net unrealized gains on derivative instruments 6,490 - 6,490 - 6,490 Other comprehensive gain 764,180 - 764,180 - 764,180 |
Consolidated Statements of Cash Flows | |
Schedule of Error Corrections and Prior Period Adjustments | Year Ended December 31, 2016 As Originally Reported Adjustment (A) As Previously Reported Adjustments (B) As Restated Net earnings $ 14,279,504 $ - $ 14,279,504 $ (2,090,877) $ 12,188,627 Provision for deferred and other income taxes 5,076,899 - 5,076,899 1,053,745 6,130,644 Loans originated for sale - - - (3,098,710,299) (3,098,710,299) Proceeds from loans sold - - - 3,246,127,714 3,246,127,714 Net gains on loans sold - - - (137,682,984) (137,682,984) Future life and other benefits 18,143,832 - 18,143,832 (154,237) 17,989,595 Receivables for mortgage loans sold 20,216,621 - 20,216,621 (20,216,621) - Other operating assets and liabilities (8,473,503) - (8,473,503) 3,348,127 (5,125,376) Net cash provided by (used in) operating activities 43,860,446 - 43,860,446 (8,325,432) 35,535,014 Net change in warehouse line borrowings - - 8,325,432 8,325,432 Net cash provided by financing activities 10,664,656 - 10,664,656 8,325,432 18,990,088 |
23) Quarterly Financial Data115
23) Quarterly Financial Data (unaudited): Quarterly Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Quarterly Financial Information | 2017 Three Months Ended March 31 June 30 September 30 December 31 Revenues $ 70,829,297 $ 73,171,558 $ 71,971,851 $ 60,953,384 Benefits and expenses 67,931,527 69,177,259 70,833,834 61,451,358 Earnings before income taxes 2,897,770 3,994,299 1,138,017 (497,974) Income tax expense (1,037,770) (1,508,435) (41,179) 9,168,206 Net earnings 1,860,000 2,485,864 1,096,838 8,670,232 Net earnings per common share (1) $0.12 $0.16 $0.07 $0.54 Net earnings per common share assuming dilution (1) $0.11 $0.15 $0.07 $0.53 Impact of Restatement Adjustments on Quarterly Financial Statements (Unaudited) for 2016. 2016 (2) Three Months Ended March 31 (As Previously Reported) March 31 (As Restated) June 30 (As Previously Reported) June 30 (As Restated) September 30 (As Previously Reported) September 30 (As Restated) December 31 (As Previously Reported) December 31 (As Restated) Revenues $ 67,355,307 $ 69,456,348 $ 81,312,192 $ 80,087,227 $ 84,393,427 $ 82,948,657 $ 74,147,490 $ 71,842,669 Benefits and expenses 63,163,550 65,385,268 73,758,739 72,101,342 77,427,792 76,375,127 72,117,972 70,769,933 Earnings before income taxes 4,191,757 4,071,080 7,553,453 7,985,885 6,965,635 6,573,530 2,029,518 1,072,736 Income tax expense (1,580,220) (1,533,139) (2,456,885) (2,968,879) (2,190,206) (2,390,525) (233,548) (622,061) Net earnings 2,611,537 2,537,941 5,096,568 5,017,006 4,775,429 4,183,005 1,795,970 450,675 Net earnings per common share (1) $0.17 $0.16 $0.33 $0.32 $0.31 $0.27 $0.11 $0.03 Net earnings per common share assuming dilution (1) $0.16 $0.16 $0.32 $0.32 $0.30 $0.26 $0.11 $0.03 ____________ (1) Earnings per share amounts have been adjusted retroactively for the effect of annual stock dividends. (2) Earnings restated – See Note 22 of the Notes to Consolidated Financial Statements for additional information regarding correction of errors. |
24) Future Policy Benefits a116
24) Future Policy Benefits and Unpaid Claims: Schedule of Liability for Future Policy Benefits, by Product Segment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Liability for Future Policy Benefits, by Product Segment | Years Ended September 30 2017 2016 Life $ 445,247,671 $424,878,578 Annuities 99,474,392 99,385,662 Policyholder account balances 47,867,037 49,421,125 Accident and health 482,234 475,059 Other policyholder funds 4,487,521 4,683,720 Reported but unpaid claims 6,023,084 3,897,391 Incurred but not reported claims 1,165,012 1,326,157 Gross future policy benefits and unpaid claims $ 604,746,951 $584,067,692 Receivable from reinsurers Life 7,291,996 7,218,580 Annuities 6,023,092 5,781,402 Reported but unpaid claims 69,218 69,189 Incurred but not reported claims 10,297 10,497 Total receivable from reinsurers 13,394,603 13,079,668 Net future policy benefits and unpaid claims $ 591,352,348 $570,988,024 |
2) Investments_ Held-to-matu117
2) Investments: Held-to-maturity Securities (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
HeldToMaturitySecuritiesEstimatedFairValue | $ 241,498,409 | $ 191,850,749 |
Held-to-maturity Securities, Amortized Cost before Other than Temporary Impairment | 228,397,623 | 184,979,644 |
Held-to-maturity Securities, Unrecognized Holding Gain | 14,921,048 | 11,078,349 |
Held-to-maturity Securities, Unrecognized Holding Loss | (1,820,262) | (4,207,244) |
Mortgage loans held for investment | 204,210,885 | 148,990,732 |
Mortgage loans held for investment, unamortized deferred loan fees, net | (1,659,828) | (190,846) |
Allowance for losses on mortgage loans held for investment | (1,768,796) | (1,748,783) |
Real estate held for investment, net of depreciation | 141,298,706 | 145,165,921 |
Policy loans | 6,531,352 | 6,694,148 |
Insurance assignments | 36,301,739 | 33,548,079 |
Federal Home Loan Bank stock | 689,400 | 662,100 |
Other investments at estimated fair value | 3,219,622 | 1,765,752 |
Allowance for doubtful accounts on other investments and policy loans | (846,641) | (1,119,630) |
Policy loans and other investments | 45,895,472 | 41,599,246 |
Accrued investment income | 3,644,077 | 2,972,596 |
Total investments | 629,484,618 | 561,179,435 |
Promissory notes | 48,797 | |
Short-term investments at amortized cost | 27,560,040 | |
Residential Mortgage | ||
Mortgage loans held for investment | 102,527,111 | 58,593,622 |
Real estate held for investment, net of depreciation | 68,329,917 | 76,191,985 |
Residential Construction | ||
Mortgage loans held for investment | 50,157,533 | 40,800,117 |
Commercial Loan | ||
Mortgage loans held for investment | 54,954,865 | 51,536,622 |
Real estate held for investment, net of depreciation | 72,968,789 | 68,973,936 |
US Treasury and Government | ||
HeldToMaturitySecuritiesEstimatedFairValue | 53,709,470 | 4,657,982 |
Held-to-maturity Securities, Amortized Cost before Other than Temporary Impairment | 54,077,069 | 4,475,065 |
Held-to-maturity Securities, Unrecognized Holding Gain | 211,824 | 249,028 |
Held-to-maturity Securities, Unrecognized Holding Loss | (579,423) | (66,111) |
US States and Political Subdivisions Debt Securities | ||
HeldToMaturitySecuritiesEstimatedFairValue | 5,884,535 | 6,037,490 |
Held-to-maturity Securities, Amortized Cost before Other than Temporary Impairment | 5,843,176 | 6,017,225 |
Held-to-maturity Securities, Unrecognized Holding Gain | 112,372 | 153,514 |
Held-to-maturity Securities, Unrecognized Holding Loss | (71,013) | (133,249) |
Corporate Debt Securities | ||
HeldToMaturitySecuritiesEstimatedFairValue | 171,679,675 | 171,089,612 |
Held-to-maturity Securities, Amortized Cost before Other than Temporary Impairment | 158,350,727 | 164,375,636 |
Held-to-maturity Securities, Unrecognized Holding Gain | 14,336,452 | 10,440,989 |
Held-to-maturity Securities, Unrecognized Holding Loss | (1,007,504) | (3,727,013) |
Collateralized Mortgage Backed Securities | ||
HeldToMaturitySecuritiesEstimatedFairValue | 9,551,537 | 9,428,612 |
Held-to-maturity Securities, Amortized Cost before Other than Temporary Impairment | 9,503,016 | 9,488,083 |
Held-to-maturity Securities, Unrecognized Holding Gain | 210,652 | 221,400 |
Held-to-maturity Securities, Unrecognized Holding Loss | (162,131) | (280,871) |
Redeemable Preferred Stock | ||
HeldToMaturitySecuritiesEstimatedFairValue | 673,192 | 637,053 |
Held-to-maturity Securities, Amortized Cost before Other than Temporary Impairment | 623,635 | 623,635 |
Held-to-maturity Securities, Unrecognized Holding Gain | 49,748 | 13,418 |
Held-to-maturity Securities, Unrecognized Holding Loss | (191) | |
Industrial, miscellaneous and all other equity securities | ||
Available-for-sale Securities, Amortized Cost Basis | 6,002,931 | 10,323,238 |
Available-for-sale Debt Securities Gross Unrealized Gain | 667,593 | 447,110 |
Available-for-sale Debt Securities, Gross Unrealized Loss | (632,669) | (859,092) |
AvailableForSaleSecuritiesEstimatedFairValue | 6,037,855 | 9,911,256 |
Equity Securities | ||
Available-for-sale Securities, Amortized Cost Basis | 6,002,931 | 10,323,238 |
Available-for-sale Debt Securities Gross Unrealized Gain | 667,593 | 447,110 |
Available-for-sale Debt Securities, Gross Unrealized Loss | (632,669) | (859,092) |
AvailableForSaleSecuritiesEstimatedFairValue | $ 6,037,855 | $ 9,911,256 |
2) Investments_ Schedule of 118
2) Investments: Schedule of Unrealized Loss on Investments (Details) | 12 Months Ended | |
Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Held-to-maturity Securities, Unrecognized Holding Loss | $ 1,820,262 | $ 4,207,244 |
Held-to-maturity Securities, Fair Value | 83,639,680 | 64,910,462 |
Available For Sale Securities Fair Value | 2,176,931 | 3,749,018 |
US Treasury and Government | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 579,423 | 66,111 |
Held-to-maturity Securities, Fair Value | 52,250,079 | 1,342,088 |
US States and Political Subdivisions Debt Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 71,013 | 133,249 |
Held-to-maturity Securities, Fair Value | 2,439,903 | 3,686,856 |
Corporate Debt Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 1,007,504 | 3,727,013 |
Held-to-maturity Securities, Fair Value | 24,745,123 | 54,765,151 |
Collateralized Mortgage Backed Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 162,131 | 280,871 |
Held-to-maturity Securities, Fair Value | 4,193,154 | 5,116,367 |
Redeemable Preferred Stock | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 191 | |
Held-to-maturity Securities, Fair Value | 11,421 | |
Industrial, miscellaneous and all other equity securities | ||
Available-for-sale Debt Securities, Gross Unrealized Loss | 632,669 | 859,092 |
Equity Securities | ||
Available-for-sale Debt Securities, Gross Unrealized Loss | 632,669 | 859,092 |
Less than 12 months | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 757,039 | 2,104,387 |
Held-to-maturity Securities, Fair Value | 65,901,527 | 51,001,049 |
Available For Sale Securities Fair Value | 847,718 | 2,063,144 |
Less than 12 months | US Treasury and Government | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 532,010 | 66,111 |
Held-to-maturity Securities, Fair Value | 51,606,699 | 1,342,088 |
Less than 12 months | US States and Political Subdivisions Debt Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 296 | 133,249 |
Held-to-maturity Securities, Fair Value | 214,882 | 3,686,856 |
Less than 12 months | Corporate Debt Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 167,786 | 1,728,312 |
Held-to-maturity Securities, Fair Value | 11,551,865 | 41,796,016 |
Less than 12 months | Collateralized Mortgage Backed Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 56,756 | 176,715 |
Held-to-maturity Securities, Fair Value | 2,516,660 | 4,176,089 |
Less than 12 months | Redeemable Preferred Stock | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 191 | |
Held-to-maturity Securities, Fair Value | 11,421 | |
Less than 12 months | Industrial, miscellaneous and all other equity securities | ||
Available-for-sale Debt Securities, Gross Unrealized Loss | $ 213,097 | $ 215,563 |
No. of Investment Positions | 98 | 124 |
Less than 12 months | Equity Securities | ||
Available-for-sale Debt Securities, Gross Unrealized Loss | $ 213,097 | $ 215,563 |
No. of Investment Positions | 98 | 124 |
More than 12 months | ||
Held-to-maturity Securities, Unrecognized Holding Loss | $ 1,063,223 | $ 2,102,857 |
Held-to-maturity Securities, Fair Value | 17,738,153 | 13,909,413 |
Available For Sale Securities Fair Value | 1,329,213 | 1,685,874 |
More than 12 months | US Treasury and Government | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 47,413 | |
Held-to-maturity Securities, Fair Value | 643,380 | |
More than 12 months | US States and Political Subdivisions Debt Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 70,717 | |
Held-to-maturity Securities, Fair Value | 2,225,021 | |
More than 12 months | Corporate Debt Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 839,718 | 1,998,701 |
Held-to-maturity Securities, Fair Value | 13,193,258 | 12,969,135 |
More than 12 months | Collateralized Mortgage Backed Securities | ||
Held-to-maturity Securities, Unrecognized Holding Loss | 105,375 | 104,156 |
Held-to-maturity Securities, Fair Value | 1,676,494 | 940,278 |
More than 12 months | Industrial, miscellaneous and all other equity securities | ||
Available-for-sale Debt Securities, Gross Unrealized Loss | $ 419,572 | $ 643,529 |
No. of Investment Positions | 81 | 104 |
More than 12 months | Equity Securities | ||
Available-for-sale Debt Securities, Gross Unrealized Loss | $ 419,572 | $ 643,529 |
No. of Investment Positions | 81 | 104 |
2) Investments_ Fixed Maturity
2) Investments: Fixed Maturity Securities - Additional (Details) - Fixed Maturities - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Average market value over amortized cost | 97.90% | 93.90% |
Other than Temporary Impairment Losses, Investments, Portion Recognized in Earnings, Net, Available-for-sale Securities | $ 493,371 | $ 100,000 |
2) Investments_ Investments 120
2) Investments: Investments Classified by Contractual Maturity Date (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Held-to-maturity Securities, Amortized Cost before Other than Temporary Impairment | $ 228,397,623 | $ 184,979,644 |
HeldToMaturitySecuritiesEstimatedFairValue | 241,498,409 | 191,850,749 |
Collateralized Mortgage Backed Securities | ||
Held-to-maturity Securities, Amortized Cost before Other than Temporary Impairment | 9,503,016 | 9,488,083 |
HeldToMaturitySecuritiesEstimatedFairValue | 9,551,537 | 9,428,612 |
Redeemable Preferred Stock | ||
Held-to-maturity Securities, Amortized Cost before Other than Temporary Impairment | 623,635 | 623,635 |
HeldToMaturitySecuritiesEstimatedFairValue | 673,192 | $ 637,053 |
DueIn2017Member | ||
Held-to-maturity Securities, Amortized Cost before Other than Temporary Impairment | 20,125,883 | |
HeldToMaturitySecuritiesEstimatedFairValue | 20,299,016 | |
DueIn2018Through2021Member | ||
Held-to-maturity Securities, Amortized Cost before Other than Temporary Impairment | 69,849,085 | |
HeldToMaturitySecuritiesEstimatedFairValue | 70,873,975 | |
DueIn2022Through2026Member | ||
Held-to-maturity Securities, Amortized Cost before Other than Temporary Impairment | 49,842,819 | |
HeldToMaturitySecuritiesEstimatedFairValue | 52,444,399 | |
DueAfter2026Member | ||
Held-to-maturity Securities, Amortized Cost before Other than Temporary Impairment | 78,453,185 | |
HeldToMaturitySecuritiesEstimatedFairValue | $ 87,656,290 |
2) Investments_ Equity Securiti
2) Investments: Equity Securities - Additional (Details) - Equity Securities - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Average Market Value of Security over initial investment | 77.50% | 81.40% |
Other than Temporary Impairment Losses, Investments, Portion Recognized in Earnings, Net, Available-for-sale Securities | $ 280,968 | $ 170,358 |
2) Investments_ Gain (Loss) 122
2) Investments: Gain (Loss) on Investments (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Gains and losses and other than temporary impairments from investments and other assets | $ (3,722,821) | $ (446,745) |
Held-to-maturity Securities | ||
Gross Realized Gains | 179,182 | 389,558 |
Gross Realized Losses | (893,567) | (132,124) |
Other than Temporary Impairments | (493,371) | (100,000) |
Available-for-sale Securities | ||
Gross Realized Gains | 166,950 | 221,817 |
Gross Realized Losses | (76,475) | (61,242) |
Other than Temporary Impairments | (280,968) | (170,358) |
Other Assets | ||
Gross Realized Gains | 3,410,076 | 349,252 |
Gross Realized Losses | $ (5,734,648) | $ (943,648) |
2) Investments_ Fixed Maturi123
2) Investments: Fixed Maturity Securities - Carrying Amount and Net Realized Gain (Details) - Held-to-maturity Securities - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Net carrying amount for sales of securities | $ 2,932,961 | $ 2,380,027 |
Net realized gain related to sales of securities | $ 463,892 | $ 155,346 |
2) Investments_ Schedule of 124
2) Investments: Schedule of Major categories of net investment income (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Gross Investment Income | $ 49,501,540 | $ 44,393,004 |
Investment Income, Investment Expense | (14,438,572) | (12,414,403) |
Net Investment Income | 35,062,968 | 31,978,601 |
Fixed Maturities | ||
Gross Investment Income | 10,626,400 | 9,083,858 |
Equity Securities | ||
Gross Investment Income | 245,490 | 270,942 |
MortgageLoansHeldForInvestment2Member | ||
Gross Investment Income | 12,498,578 | 11,398,986 |
Real Estate | ||
Gross Investment Income | 11,703,947 | 10,969,828 |
PolicyLoans1Member | ||
Gross Investment Income | 488,561 | 498,444 |
Insurance Assignments | ||
Gross Investment Income | 13,289,818 | 11,876,836 |
Other investments | ||
Gross Investment Income | 105,218 | 25,122 |
Short Term Investments | ||
Gross Investment Income | $ 543,528 | $ 268,988 |
2) Investments_ Net Investment
2) Investments: Net Investment Income - Additional (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Net Investment Income | $ 35,062,968 | $ 31,978,601 |
Securities on deposit for regulatory authorities | 9,264,977 | 9,269,121 |
Cemeteries and mortuaries | ||
Net Investment Income | $ 501,227 | $ 419,360 |
2) Investments (Details)
2) Investments (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Realized losses on investments and other assets | $ (2,948,482) | $ (176,387) |
Commercial Real Estate 1 | ||
Pledged Assets Separately Reported, Other Assets Pledged as Collateral, at Fair Value | 64,704,000 | 51,507,000 |
Bank Loans | 40,994,000 | 21,831,000 |
Realized losses on investments and other assets | 5,350,967 | 900,000 |
Residential Real Estate 1 | ||
Pledged Assets Separately Reported, Other Assets Pledged as Collateral, at Fair Value | 34,431,000 | 35,798,000 |
Bank Loans | 26,773,000 | 27,377,000 |
Foreclosed Residential Real Estate included in Residential Real Estate Held for Investment | $ 33,372,228 | $ 39,856,434 |
2) Investments_ Real Estate 127
2) Investments: Real Estate Investment (Details) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Real estate held for investment (net of accumulated depreciation of $18,788,869 and $16,138,439 for 2017 and 2016) | $ 141,298,706 | $ 145,165,921 |
Commercial Real Estate 1 | ||
Real estate held for investment (net of accumulated depreciation of $18,788,869 and $16,138,439 for 2017 and 2016) | $ 72,968,789 | $ 68,973,936 |
Square Footage | 723,477 | 739,747 |
Commercial Real Estate 1 | Arizona | ||
Real estate held for investment (net of accumulated depreciation of $18,788,869 and $16,138,439 for 2017 and 2016) | $ 4,000 | $ 450,538 |
Square Footage | 16,270 | |
Commercial Real Estate 1 | Arkansas | ||
Real estate held for investment (net of accumulated depreciation of $18,788,869 and $16,138,439 for 2017 and 2016) | $ 96,169 | $ 100,369 |
Square Footage | 3,200 | 3,200 |
Commercial Real Estate 1 | Kansas | ||
Real estate held for investment (net of accumulated depreciation of $18,788,869 and $16,138,439 for 2017 and 2016) | $ 7,200,000 | $ 12,450,297 |
Square Footage | 222,679 | 222,679 |
Commercial Real Estate 1 | Louisiana | ||
Real estate held for investment (net of accumulated depreciation of $18,788,869 and $16,138,439 for 2017 and 2016) | $ 493,197 | $ 518,700 |
Square Footage | 7,063 | 7,063 |
Commercial Real Estate 1 | Mississippi | ||
Real estate held for investment (net of accumulated depreciation of $18,788,869 and $16,138,439 for 2017 and 2016) | $ 3,725,039 | $ 3,818,985 |
Square Footage | 33,821 | 33,821 |
Commercial Real Estate 1 | New Mexico | ||
Real estate held for investment (net of accumulated depreciation of $18,788,869 and $16,138,439 for 2017 and 2016) | $ 7,000 | $ 7,000 |
Commercial Real Estate 1 | Texas | ||
Real estate held for investment (net of accumulated depreciation of $18,788,869 and $16,138,439 for 2017 and 2016) | $ 335,000 | $ 3,734,974 |
Square Footage | 23,470 | 23,470 |
Commercial Real Estate 1 | Utah | ||
Real estate held for investment (net of accumulated depreciation of $18,788,869 and $16,138,439 for 2017 and 2016) | $ 61,108,384 | $ 47,893,073 |
Square Footage | 433,244 | 433,244 |
Residential Real Estate 1 | ||
Real estate held for investment (net of accumulated depreciation of $18,788,869 and $16,138,439 for 2017 and 2016) | $ 68,329,917 | $ 76,191,985 |
Residential Real Estate 1 | Arizona | ||
Real estate held for investment (net of accumulated depreciation of $18,788,869 and $16,138,439 for 2017 and 2016) | 217,105 | 742,259 |
Residential Real Estate 1 | Texas | ||
Real estate held for investment (net of accumulated depreciation of $18,788,869 and $16,138,439 for 2017 and 2016) | 509,011 | 1,091,188 |
Residential Real Estate 1 | Utah | ||
Real estate held for investment (net of accumulated depreciation of $18,788,869 and $16,138,439 for 2017 and 2016) | 54,113,272 | 59,485,466 |
Residential Real Estate 1 | California | ||
Real estate held for investment (net of accumulated depreciation of $18,788,869 and $16,138,439 for 2017 and 2016) | 5,463,878 | 5,848,389 |
Residential Real Estate 1 | Colorado | ||
Real estate held for investment (net of accumulated depreciation of $18,788,869 and $16,138,439 for 2017 and 2016) | 364,489 | |
Residential Real Estate 1 | Florida | ||
Real estate held for investment (net of accumulated depreciation of $18,788,869 and $16,138,439 for 2017 and 2016) | 7,000,684 | 8,327,355 |
Residential Real Estate 1 | Hawaii | ||
Real estate held for investment (net of accumulated depreciation of $18,788,869 and $16,138,439 for 2017 and 2016) | 712,286 | |
Residential Real Estate 1 | Ohio | ||
Real estate held for investment (net of accumulated depreciation of $18,788,869 and $16,138,439 for 2017 and 2016) | 10,000 | |
Residential Real Estate 1 | Oklahoma | ||
Real estate held for investment (net of accumulated depreciation of $18,788,869 and $16,138,439 for 2017 and 2016) | 17,500 | 46,658 |
Residential Real Estate 1 | Washington | ||
Real estate held for investment (net of accumulated depreciation of $18,788,869 and $16,138,439 for 2017 and 2016) | $ 286,181 | $ 286,181 |
2) Investments_ Real Estate 128
2) Investments: Real Estate Owned and Occupied by the Company (Details) | Dec. 31, 2017 |
Corporate Office, Life Insurance and Cemetery/Mortuary Operations | |
Approximate Square Footage | 36,000 |
Square Footage Occupied by the Company | 100.00% |
Mortgage Operations | |
Approximate Square Footage | 36,899 |
Square Footage Occupied by the Company | 34.00% |
Life Insurance Operations | |
Approximate Square Footage | 21,521 |
Square Footage Occupied by the Company | 27.00% |
Mortgage Sales | |
Approximate Square Footage | 78,978 |
Square Footage Occupied by the Company | 19.00% |
2) Investments_ Mortgage Loans
2) Investments: Mortgage Loans - Additional (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Allowance for losses on mortgage loans held for investment | $ 1,768,796 | $ 1,748,783 |
Minimum | ||
Mortgage Loan, Interest Rate | 2.00% | |
Maximum | ||
Mortgage Loan, Interest Rate | 10.50% |
2) Investments_ The Followin130
2) Investments: The Following Is A Summary of The Allowance For Loan Losses As A Contra-asset Account For The Periods Presented (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Financing Receivable, Allowance for Credit Losses, Beginning Balance | $ 1,748,783 | $ 1,848,120 |
Allowance for credit losses, Charge-offs | (416,251) | (420,135) |
Allowance for credit losses, Provision | 436,264 | 320,798 |
Financing Receivable, Allowance for Credit Losses, Ending Balance | 1,768,796 | 1,748,783 |
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment | 237,560 | 187,470 |
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment | 1,531,236 | 1,561,313 |
Mortgage loans | 207,639,509 | 150,930,361 |
Financing Receivable, Individually Evaluated for Impairment | 5,385,386 | 3,184,425 |
Financing Receivable, Collectively Evaluated for Impairment | 202,254,123 | 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 | 54,954,865 | 51,536,622 |
Financing Receivable, Individually Evaluated for Impairment | 202,992 | |
Financing Receivable, Collectively Evaluated for Impairment | 54,954,865 | 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 | (351,357) | (420,135) |
Allowance for credit losses, Provision | 436,264 | 320,798 |
Financing Receivable, Allowance for Credit Losses, Ending Balance | 1,546,447 | 1,461,540 |
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment | 237,560 | 187,470 |
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment | 1,308,887 | 1,274,070 |
Mortgage loans | 102,527,111 | 58,593,622 |
Financing Receivable, Individually Evaluated for Impairment | 4,923,552 | 2,916,538 |
Financing Receivable, Collectively Evaluated for Impairment | 97,603,559 | 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 | 50,157,533 | 40,800,117 |
Financing Receivable, Individually Evaluated for Impairment | 461,834 | 64,895 |
Financing Receivable, Collectively Evaluated for Impairment | $ 49,695,699 | $ 40,735,222 |
2) Investments_ Schedule of 131
2) Investments: Schedule of aging of mortgage loans (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Mortgage Loans during period | $ 207,639,509 | $ 150,930,361 | |
Mortgage Loans, Allowance for Loan Losses | (1,768,796) | (1,748,783) | |
Unamortized deferred loan fees, net | (1,659,828) | (190,846) | |
Mortgage Loans, Net | 204,210,885 | 148,990,732 | |
Commercial Loan | |||
Mortgage Loans during period | 54,954,865 | 51,536,622 | |
Mortgage Loans, Allowance for Loan Losses | (187,129) | (187,129) | |
Unamortized deferred loan fees, net | (67,411) | (155,725) | |
Mortgage Loans, Net | 54,700,325 | 51,193,768 | |
Residential Mortgage | |||
Mortgage Loans during period | 102,527,111 | 58,593,622 | |
Mortgage Loans, Allowance for Loan Losses | (1,546,447) | (1,461,540) | |
Unamortized deferred loan fees, net | (1,164,130) | (35,121) | |
Mortgage Loans, Net | 99,816,534 | 57,096,961 | |
Residential Construction | |||
Mortgage Loans during period | 50,157,533 | 40,800,117 | |
Mortgage Loans, Allowance for Loan Losses | (35,220) | (100,114) | |
Unamortized deferred loan fees, net | (428,287) | ||
Mortgage Loans, Net | 49,694,026 | 40,700,003 | |
Past due 30 to 59 days | |||
Mortgage Loans during period | 8,556,974 | 964,960 | |
Past due 30 to 59 days | Commercial Loan | |||
Mortgage Loans during period | 1,943,495 | ||
Past due 30 to 59 days | Residential Mortgage | |||
Mortgage Loans during period | 6,613,479 | 964,960 | |
Past due 60 to 89 days | |||
Mortgage Loans during period | 495,347 | 996,779 | |
Past due 60 to 89 days | Residential Mortgage | |||
Mortgage Loans during period | 495,347 | 996,779 | |
Past due 90 or more days | |||
Mortgage Loans during period | [1] | 4,053,167 | 1,355,250 |
Past due 90 or more days | Residential Mortgage | |||
Mortgage Loans during period | [1] | 3,591,333 | 1,290,355 |
Past due 90 or more days | Residential Construction | |||
Mortgage Loans during period | [1] | 461,834 | 64,895 |
In Foreclosure | |||
Mortgage Loans during period | [1] | 1,332,219 | 1,829,175 |
In Foreclosure | Commercial Loan | |||
Mortgage Loans during period | [1] | 202,992 | |
In Foreclosure | Residential Mortgage | |||
Mortgage Loans during period | [1] | 1,332,219 | 1,626,183 |
Total Past Due | |||
Mortgage Loans during period | 14,437,707 | 5,146,164 | |
Total Past Due | Commercial Loan | |||
Mortgage Loans during period | 1,943,495 | 202,992 | |
Total Past Due | Residential Mortgage | |||
Mortgage Loans during period | 12,032,378 | 4,878,277 | |
Total Past Due | Residential Construction | |||
Mortgage Loans during period | 461,834 | 64,895 | |
Current | |||
Mortgage Loans during period | 193,201,802 | 145,784,197 | |
Current | Commercial Loan | |||
Mortgage Loans during period | 53,011,370 | 51,333,630 | |
Current | Residential Mortgage | |||
Mortgage Loans during period | 90,494,733 | 53,715,345 | |
Current | Residential Construction | |||
Mortgage Loans during period | $ 49,695,699 | $ 40,735,222 | |
[1] | There was not any interest income recognized on loans past due greater than 90 days or in foreclosure. |
2) Investments_ Schedule of 132
2) Investments: Schedule of Impaired Mortgage Loans (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Commercial Loan | ||
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment | $ 202,992 | |
Impaired Financing Receivable, with No Related Allowance, Recorded Investment | 202,992 | |
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance | 202,992 | |
Impaired Financing Receivable, Average Recorded Investment | $ 365,220 | 202,992 |
Impaired Financing Receivable, Recorded Investment | 202,992 | |
Impaired Financing Receivable, Unpaid Principal Balance | 202,992 | |
Residential Mortgage | ||
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment | 3,290,094 | |
Impaired Financing Receivable, with No Related Allowance, Recorded Investment | 3,322,552 | |
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance | 3,322,552 | |
Impaired Financing Receivable, with Related Allowance, Recorded Investment | 1,601,000 | 2,916,538 |
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance | 1,601,000 | 2,916,538 |
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment | 1,350,115 | 3,001,850 |
Impaired Financing Receivable, Average Recorded Investment | 4,640,209 | 3,001,850 |
Impaired Financing Receivable, Recorded Investment | 4,923,552 | 2,916,538 |
Impaired Financing Receivable, Unpaid Principal Balance | 4,923,552 | 2,916,538 |
Impaired Financing Receivable, Related Allowance | 237,560 | 374,501 |
Residential Construction | ||
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment | 277,232 | 79,082 |
Impaired Financing Receivable, with No Related Allowance, Recorded Investment | 461,834 | 64,895 |
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance | 461,834 | 64,895 |
Impaired Financing Receivable, Average Recorded Investment | 277,232 | 79,082 |
Impaired Financing Receivable, Recorded Investment | 461,834 | 64,895 |
Impaired Financing Receivable, Unpaid Principal Balance | $ 461,834 | $ 64,895 |
2) Investments_ The Company'133
2) Investments: The Company's Performing and Non-performing Mortgage Loans Were As Follows (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Mortgage loans | $ 207,639,509 | $ 150,930,361 |
PerformingMember | ||
Mortgage loans | 202,254,123 | 147,745,936 |
NonPerformingMember | ||
Mortgage loans | 5,385,386 | 3,184,425 |
Commercial Loan | ||
Mortgage loans | 54,954,865 | 51,536,622 |
Commercial Loan | PerformingMember | ||
Mortgage loans | 54,954,865 | 51,333,630 |
Commercial Loan | NonPerformingMember | ||
Mortgage loans | 202,992 | |
Residential Mortgage | ||
Mortgage loans | 102,527,111 | 58,593,622 |
Residential Mortgage | PerformingMember | ||
Mortgage loans | 97,603,559 | 55,677,084 |
Residential Mortgage | NonPerformingMember | ||
Mortgage loans | 4,923,552 | 2,916,538 |
Residential Construction | ||
Mortgage loans | 50,157,533 | 40,800,117 |
Residential Construction | PerformingMember | ||
Mortgage loans | 49,695,699 | 40,735,222 |
Residential Construction | NonPerformingMember | ||
Mortgage loans | $ 461,834 | $ 64,895 |
2) Investments_ Summary of Inte
2) Investments: Summary of Interest not accrued on non-performing mortgage loans (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Details | ||
Interest not acrued on non-performing loans | $ 204,083 | $ 172,000 |
2) Investments_ Schedule of 135
2) Investments: Schedule of Mortgate loans on a nonaccrual status (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | $ 5,385,386 | $ 3,184,425 |
Commercial Loan | ||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | 202,992 | |
Residential Mortgage | ||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | 4,923,552 | 2,916,538 |
Residential Construction | ||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | $ 461,834 | $ 64,895 |
2) Investments_ Schedule of 136
2) Investments: Schedule of Principal amounts due on mortgage loans held for investment by category (Details) | Dec. 31, 2017USD ($) |
Mortgage Loans Principal Amount due | $ 207,639,509 |
Residential Mortgage | |
Mortgage Loans Principal Amount due | 102,527,111 |
Residential Construction | |
Mortgage Loans Principal Amount due | 50,157,533 |
Commercial Loan | |
Mortgage Loans Principal Amount due | 54,954,865 |
DueInNextYearMember | |
Mortgage Loans Principal Amount due | 84,909,043 |
DueInNextYearMember | Residential Mortgage | |
Mortgage Loans Principal Amount due | 5,454,776 |
DueInNextYearMember | Residential Construction | |
Mortgage Loans Principal Amount due | 42,763,420 |
DueInNextYearMember | Commercial Loan | |
Mortgage Loans Principal Amount due | 36,690,847 |
DueInYearsTwoThroughFiveMember | |
Mortgage Loans Principal Amount due | 64,064,250 |
DueInYearsTwoThroughFiveMember | Residential Mortgage | |
Mortgage Loans Principal Amount due | 40,995,574 |
DueInYearsTwoThroughFiveMember | Residential Construction | |
Mortgage Loans Principal Amount due | 7,394,113 |
DueInYearsTwoThroughFiveMember | Commercial Loan | |
Mortgage Loans Principal Amount due | 15,674,563 |
DueThereafterMember | |
Mortgage Loans Principal Amount due | 58,666,216 |
DueThereafterMember | Residential Mortgage | |
Mortgage Loans Principal Amount due | 56,076,761 |
DueThereafterMember | Commercial Loan | |
Mortgage Loans Principal Amount due | $ 2,589,455 |
3) Loans Held For Sale_ Sche137
3) Loans Held For Sale: Schedule of Derivative Assets at Fair Value (Details) | Dec. 31, 2017USD ($) |
Details | |
Loans Held-for-sale, Fair Value Disclosure | $ 133,414,188 |
Aggregate unpaid principal balance - Loans Held for Sale | 129,233,411 |
Unrealized gain - Loans Held for Sale | $ 4,180,777 |
3) Loans Held For Sale_ Sche138
3) Loans Held For Sale: Schedule of Mortgage Fee Income for Loans Held for Sale (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Interest and Other Income | $ 7,089,025 | $ 8,004,952 |
Net change in fair value of loans held for sale | 4,180,777 | |
Mortgage fee income | 153,797,171 | 189,146,639 |
LoansHeldForSaleMember | ||
Loan fees | 40,434,686 | 44,341,501 |
Secondary gains | 108,756,613 | 140,651,103 |
Net change in fair value of loan commitments | (4,812,743) | (862,163) |
Net change in fair value of loans held for sale | 4,180,777 | |
Provision for loan loss reserve | (1,851,187) | (2,988,754) |
Mortgage fee income | $ 153,797,171 | $ 189,146,639 |
3) Loans Held For Sale_ Sche139
3) Loans Held For Sale: Schedule of loan loss reserve which is included in other liabilities and accrued expenses (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Details | ||
Loan loss reserve, balance at start of period | $ 627,733 | $ 2,805,900 |
Provision for current loan originations | 1,851,187 | 2,988,754 |
Provision for loan loss reserve | 1,700,000 | |
Loan loss reserve, Charge-offs and settlements | 92,604 | (6,866,921) |
Loan loss reserve, balance at end of period | $ 2,571,524 | $ 627,733 |
4) Receivables_ Schedule of 140
4) Receivables: Schedule of Receivables (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Details | ||
Trade contracts | $ 3,608,379 | $ 3,410,321 |
Receivables from sales agents | 3,528,703 | 4,016,393 |
Receivables held in escrow | 107,388 | |
Other Receivables | 4,851,305 | 3,231,926 |
Accounts Receivable, Gross | 11,988,387 | 10,766,028 |
Receivables (net of allowances for doubtful accounts of $1,544,518 and $2,355,482 for 2017 and 2016) | $ 10,443,869 | $ 8,410,546 |
5) Value of Business Acquire141
5) Value of Business Acquired and Goodwill: Schedule of Value of Business Acquired (Details) - USD ($) | 12 Months Ended | |||||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Details | ||||||||
Value of business acquired, balance at start of period | $ 6,588,759 | $ 7,570,300 | $ 8,743,773 | |||||
Imputed interest on value of business acquired | [1] | 39,767 | 45,762 | |||||
Value of business acquired - amortization | (1,021,308) | (1,219,235) | ||||||
Value of business acquired - net amortization charged to income | $ (663,000) | $ (713,000) | $ (766,000) | $ (854,000) | $ (919,000) | (981,541) | (1,173,473) | |
Value of business acquired, balance at start of period | $ 6,588,759 | $ 7,570,300 | ||||||
[1] | Imputed interest at 7%. |
5) Value of Business Acquire142
5) Value of Business Acquired and Goodwill: Net amortization charged to income (Details) - USD ($) | 12 Months Ended | ||||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Details | |||||||
Value of business acquired - net amortization charged to income | $ 663,000 | $ 713,000 | $ 766,000 | $ 854,000 | $ 919,000 | $ 981,541 | $ 1,173,473 |
5) Value of Business Acquire143
5) Value of Business Acquired and Goodwill (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Details | ||
Goodwill | $ 2,765,570 | $ 2,765,570 |
6) Property and Equipment_ P144
6) Property and Equipment: Property, Plant and Equipment (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment, Gross | $ 25,641,706 | $ 28,704,186 |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | (17,572,326) | (19,912,664) |
Property and equipment, net | 8,069,380 | 8,791,522 |
Land and Building | ||
Property, Plant and Equipment, Gross | 8,689,302 | 9,155,665 |
Office Equipment | ||
Property, Plant and Equipment, Gross | $ 16,952,404 | $ 19,548,521 |
6) Property and Equipment (Deta
6) Property and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Details | ||
Property, Plant and Equipment, Other, Accumulated Depreciation | $ 2,220,693 | $ 2,182,724 |
Transfer of cemetery land and improvements to property and equipment | $ 643,329 |
7) Bank and Other Loans Paya146
7) Bank and Other Loans Payable: Summary of Bank Loans Payable (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | |
Bank loans payable | $ 157,450,925 | $ 152,140,679 | |
Current Installment | 88,437,940 | 101,177,574 | |
Bank and other loans, excluding current installments | 69,012,985 | 50,963,105 | |
N165 Note Payable | |||
Bank loans payable | [1] | 147,346 | |
MarkToMarketOfInterestRateSwapsMember | |||
Bank loans payable | 3,308 | ||
N650NotePayableMember | |||
Bank loans payable | [2] | 246,847 | 251,072 |
N225ANotePayableMember | |||
Bank loans payable | [3] | 2,975,781 | 3,133,787 |
N385ANotePayableMember | |||
Bank loans payable | [4] | 85,419 | 1,093,349 |
N427NotePayableMember | |||
Bank loans payable | [5] | 2,372,690 | 2,904,354 |
N440NotePayableMember | |||
Bank loans payable | [6] | 7,712,854 | 7,927,526 |
N4329NotePayableMember | |||
Bank loans payable | [7] | 1,961,573 | 1,992,056 |
N25BNotePayableMember | |||
Bank loans payable | [8] | 28,343,684 | 8,777,941 |
N225BNotePayableMember | |||
Bank loans payable | [9] | 26,773,058 | 27,377,114 |
N156ANotePayableMember | |||
Bank loans payable | [10] | 61,298,220 | 76,843,180 |
N156BNotePayableMember | |||
Bank loans payable | [11] | 25,538,378 | 21,578,951 |
OtherNotesPayable1Member | |||
Bank loans payable | $ 142,421 | $ 110,695 | |
[1] | Payable in monthly installments of $13,741 including principal and interest, collateralized by real property with a book value of approximately $498,000, due November 2017. | ||
[2] | Monthly installments of $1,702 including principal and interest, collateralized by real property with a book value of approximately $271,000, due October 2041 | ||
[3] | Monthly LIBOR rate note payable in monthly principal payments of $13,167 plus interest, collateralized by real property with a book value of approximately $4,457,000, due September 2021 | ||
[4] | Monthly installments of $85,419 including principal and interest, collateralized by shares of Security National Life Insurance Company stock, due January 2018 | ||
[5] | Monthly installments of $53,881 including principal and interest, collateralized by shares of Security National Life Insurance Company stock, due November 2021 | ||
[6] | Monthly installments of $46,825 including principal and interest, collateralized by real property with a book value of approximately $11,837,000 due January 2026. | ||
[7] | Monthly installments of $9,775 including principal and interest, collateralized by real property with a book value of approximately $3,004,000, due September 2025 | ||
[8] | Monthly LIBOR rate construction loan payable, collateralized by real property with a book value of approximately $45,406,000, due August 2019 | ||
[9] | Monthly installments of approximately $125,000, collateralized by real property with a book value of approximately $34,431,000, due October 2019 | ||
[10] | 1 month LIBOR rate plus 3% loan purchase agreement with a warehouse line availability of $100,000,000, matures June 2018 | ||
[11] | 1 month LIBOR rate plus 3% loan purchase agreement with a warehouse line availability of $100,000,000, matures September 2018 |
7) Bank and Other Loans Paya147
7) Bank and Other Loans Payable (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Interest expense | $ 6,037,332 | $ 5,111,868 |
RevolvingLineOfCredit1Member | ||
Line of Credit Facility, Description | The Company has a $2,000,000 revolving line-of-credit with a bank with interest payable at the prime rate minus .75% | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 2,000,000 | |
Line of Credit Facility, Interest Rate at Period End | 3.75% | |
Line of Credit Facility, Collateral | secured by the capital stock of Security National Life | |
RevolvingLineOfCredit2Member | ||
Line of Credit Facility, Description | The Company also has a $2,500,000 revolving line-of-credit with a bank with interest payable at the overnight LIBOR rate plus 2.25% (3.68% at December 31, 2017 | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 2,500,000 | |
MortgageWarehouseLineOfCredit1 | ||
Line of Credit Facility, Description | The Company, through its subsidiary SecurityNational Mortgage, has a $100,000,000 line of credit with Wells Fargo Bank N.A. The agreement charges interest at the 1-Month LIBOR rate plus 3% and matures on June 16, 2018. | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 100,000,000 | |
MortgageWarehouseLineOfCredit2 | ||
Line of Credit Facility, Description | The Company, through its subsidiary SecurityNational Mortgage, also uses a line of credit with Texas Capital Bank N.A. This agreement with the bank allows SecurityNational Mortgage to borrow up to $100,000,000 for the sole purpose of funding mortgage loans. SecurityNational Mortgage is currently approved to borrow $30,000,000 of the $100,000,000 available. The agreement charges interest at the 1-Month LIBOR rate plus 3% and matures on September 7, 2018. | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 100,000,000 |
7) Bank and Other Loans Paya148
7) Bank and Other Loans Payable: Schedule of combined maturities of bank loans payable, lines of credit and notes and contracts payable (Details) | Dec. 31, 2017USD ($) |
Bank loans payable, lines of credit and notes and contracts payable | $ 157,450,925 |
DueInYearOneMember | |
Bank loans payable, lines of credit and notes and contracts payable | 88,437,940 |
DueInYearTwoMember | |
Bank loans payable, lines of credit and notes and contracts payable | 55,674,420 |
DueInYearThreeMember | |
Bank loans payable, lines of credit and notes and contracts payable | 1,085,699 |
DueInYearFourMember | |
Bank loans payable, lines of credit and notes and contracts payable | 3,456,607 |
DueInYearFiveMember | |
Bank loans payable, lines of credit and notes and contracts payable | 326,923 |
DueInYearThereafterMember | |
Bank loans payable, lines of credit and notes and contracts payable | $ 8,469,336 |
8) Cemetery Perpetual Care T149
8) Cemetery Perpetual Care Trust Investments and Obligation and Restricted Assets: Schedule of the components of the cemetery perpetual care obligation (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Details | ||
Cemetery perpetual care obligation, Cash and Cash Equivalents | $ 997,498 | $ 865,699 |
Cemetery perpetual care obligation, Fixed maturity securities, held to maturity, at amortized cost | 943,211 | 885,729 |
Fair value of cemetery perpetual care trust investments | 682,315 | 698,202 |
Cemetery perpetual care obligation, Participating interests in mortgage loans held for investment with Security National Life | 4,128 | 3,821 |
Cemetery perpetual care obligation, Real estate | 1,996,411 | 1,678,434 |
Cemetery perpetual care obligation, note receivables eliminated in consolidation | 1,667,621 | 1,725,714 |
Cemetery perpetual care obligation, trust investments | 6,291,184 | 5,857,599 |
Cemetery perpetual care obligation | (3,710,740) | (3,598,580) |
Cemetery perpetual care obligation, fair value of trust assets in excess of trust obligations | $ 2,580,444 | $ 2,259,019 |
8) Cemetery Perpetual Care T150
8) Cemetery Perpetual Care Trust Investments and Obligation and Restricted Assets: Schedule of Restricted Assets in Cemetery and Mortuary Endowment Care and Pre need Merchandise Funds (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Restricted assets (including $809,958 for 2017 and $736,603 for 2016 at estimated fair value) | $ 11,830,621 | $ 10,391,394 | $ 10,391,394 |
CashAndCashEquivalents1Member | |||
Restricted assets (including $809,958 for 2017 and $736,603 for 2016 at estimated fair value) | 8,188,764 | 7,089,134 | |
MutualFundsMember | |||
Restricted assets (including $809,958 for 2017 and $736,603 for 2016 at estimated fair value) | 715,952 | 645,241 | |
FixedMaturitySecuritiesMember | |||
Restricted assets (including $809,958 for 2017 and $736,603 for 2016 at estimated fair value) | 1,130,088 | 990,613 | |
EquitySecurities1Member | |||
Restricted assets (including $809,958 for 2017 and $736,603 for 2016 at estimated fair value) | 94,006 | 91,362 | |
ParticipatingInMortgageLoansWithSecurityNationalLifeMember | |||
Restricted assets (including $809,958 for 2017 and $736,603 for 2016 at estimated fair value) | $ 1,701,811 | $ 1,575,044 |
9) Income Taxes_ Summary of 151
9) Income Taxes: Summary of Income Tax Liability (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Details | ||
Current Income Tax Liability | $ (922,754) | $ (1,511,762) |
Income Tax Liability | 18,255,537 | 25,830,631 |
Income taxes | $ 17,332,783 | $ 24,318,869 |
9) Income Taxes_ Schedule of152
9) Income Taxes: Schedule of components of Deferred Tax Liabilities (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Liabilities | ||
Income Tax Liability | $ 18,255,537 | $ 25,830,631 |
ApproximateMember | ||
Assets | ||
Deferred Tax, Future policy benefits | (6,803,339) | (9,719,058) |
Deferred Tax, Loan Loss Reserve | (697,779) | (288,590) |
Deferred Tax, Unearned premium | (886,706) | (1,519,722) |
Deferred Tax, Available for sale Securities | (237,677) | (51,266) |
Deferred Tax Net Operating Loss | (631,892) | (1,531,160) |
Deferred Tax Deferred Compensation | (1,600,401) | (2,225,208) |
Deferred Tax Deposit Obligations | (627,193) | (1,033,580) |
Deferred Tax, Other assets | (276,127) | (3,384,144) |
Deferred Tax, Valuation Allowance | 431,802 | |
Deferred Tax Assets, Net of Valuation Allowance | (11,761,114) | (19,320,926) |
Liabilities | ||
Deferred Tax, Deferred policy acquisition costs | 13,700,093 | 18,150,517 |
Deferred Tax, Basis difference in property and equipment | 6,110,374 | 10,749,036 |
Deferred Tax, Value of business acquired | 1,383,639 | 2,573,902 |
Deferred Tax, Installment sales | 6,978,067 | 9,290,123 |
Deferred Tax, Trusts | 1,066,438 | 1,599,657 |
Tax on unrealized appreciation | 778,040 | 2,788,322 |
Deferred Tax Liabilities, Net | 30,016,651 | 45,151,557 |
Income Tax Liability | $ 18,255,537 | $ 25,830,631 |
9) Income Taxes_ Deferred taxes
9) Income Taxes: Deferred taxes, taxes paid and changes in valuation allowance (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Details | ||
Deferred Taxes Increase In The Valuation Allowance | $ 431,802 | |
Income taxes | $ 581,556 | $ 2,667,918 |
9) Income Taxes_ Schedule of154
9) Income Taxes: Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Details | ||||||
Federal Income Tax Expense (Benefit), Continuing Operations | $ 934,647 | $ 1,138,196 | ||||
State and Local Income Tax Expense (Benefit), Continuing Operations | 236,559 | 245,764 | ||||
Current Income Tax Expense (Benefit) | 1,171,206 | 1,383,960 | ||||
Deferred Federal Income Tax Expense (Benefit) | (7,811,030) | 5,686,651 | ||||
Deferred State and Local Income Tax Expense (Benefit) | 59,002 | 443,993 | ||||
Provision for deferred income taxes | (7,752,028) | 6,130,644 | ||||
Income tax benefit (expense) | $ (9,168,206) | $ 41,179 | $ 1,508,435 | $ 1,037,770 | $ (6,580,822) | $ 7,514,604 |
9) Income Taxes_ Schedule of155
9) Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Details | ||||||
Effective Income Tax Rate Reconciliation at Federal Statutory Income Tax Rate, Amount | $ 2,560,918 | $ 6,699,099 | ||||
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Amount | 195,070 | 455,240 | ||||
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Amount | (431,802) | 431,802 | ||||
Income Tax Reconciliation, Change in Tax Law | (8,973,722) | |||||
Effective Income Tax Rate Reconciliation, Other Adjustments, Amount | 68,714 | (71,537) | ||||
Income tax benefit (expense) | $ (9,168,206) | $ 41,179 | $ 1,508,435 | $ 1,037,770 | $ (6,580,822) | $ 7,514,604 |
9) Income Taxes (Details)
9) Income Taxes (Details) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Details | ||
Effective Income Tax Rate Reconciliation, Percent | (87.40%) | 38.10% |
9) Income Taxes_ Unrecognized t
9) Income Taxes: Unrecognized tax benefits, interest and penalties (Details) | Dec. 31, 2017USD ($) |
Details | |
Unrecognized Tax Benefits | $ 0 |
9) Income Taxes_ Summary of 158
9) Income Taxes: Summary of Operating Loss Carryforwards (Details) | Dec. 31, 2017USD ($) |
Deferred Tax Assets, Operating Loss Carryforwards, Subject to Expiration | $ 2,684,518 |
Year of Expiration: 2019 | |
Deferred Tax Assets, Operating Loss Carryforwards, Subject to Expiration | 229,201 |
Year of Expiration: 2020 | |
Deferred Tax Assets, Operating Loss Carryforwards, Subject to Expiration | 114,601 |
Year of Expiration: 2021 | |
Deferred Tax Assets, Operating Loss Carryforwards, Subject to Expiration | 17,101 |
Year of Expiration: Thereafter up through 2037 | |
Deferred Tax Assets, Operating Loss Carryforwards, Subject to Expiration | $ 2,323,615 |
10) Reinsurance, Commitments159
10) Reinsurance, Commitments and Contingencies: Reinsurance (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
UnauditedMember | ||
Insurance assumed from other companies | $ 106,000,000 | $ 110,000,000 |
10) Reinsurance, Commitments160
10) Reinsurance, Commitments and Contingencies: Mortgage Loan Loss Settlements (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Details | ||
Amounts accrued for loan losses | $ 2,572,000 | $ 628,000 |
10) Reinsurance, Commitments161
10) Reinsurance, Commitments and Contingencies: Schedule of Future Minimum Rental Payments for Operating Leases (Details) | Dec. 31, 2017USD ($) |
Details | |
Operating Leases, Future Minimum Payments Due, Next Twelve Months | $ 4,825,139 |
Operating Leases, Future Minimum Payments, Due in Two Years | 3,371,267 |
Operating Leases, Future Minimum Payments, Due in Three Years | 1,705,632 |
Operating Leases, Future Minimum Payments, Due in Four Years | 847,504 |
Operating Leases, Future Minimum Payments, Due in Five Years | 26,357 |
Operating Leases, Future Minimum Payments Due | $ 10,775,899 |
10) Reinsurance, Commitments162
10) Reinsurance, Commitments and Contingencies: Non-Cancelable Operating Leases (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Details | ||
Rent expense related to non-cancelable operating leases | $ 7,374,000 | $ 7,879,000 |
10) Reinsurance, Commitments163
10) Reinsurance, Commitments and Contingencies: Other Contingencies and Commitments (Details) | Dec. 31, 2017USD ($) |
Details | |
Commitments to fund new residential construction loans | $ 78,967,000 |
Commitments to fund new residential construction loans funded | $ 50,158,000 |
11) Retirement Plans_ Noncontri
11) Retirement Plans: Noncontributory Employee Stock Ownership Plan (ESOP) (Details) - EmployeeStockOwnershipPlanESOPMember | 12 Months Ended |
Dec. 31, 2017shares | |
Employee Stock Ownership Plan (ESOP), Plan Description | The Company and its subsidiaries have a noncontributory Employee Stock Ownership Plan (“ESOP”) for all eligible employees. Eligible employees are primarily those with more than one year of service, who work in excess of 1,000 hours per year. Contributions, which may be in cash or stock of the Company, are determined annually by the Board of Directors. The Company’s contributions are allocated to eligible employees based on the ratio of each eligible employee’s compensation to total compensation for all eligible employees during each year. |
Class A Common Stock | |
Employee Stock Ownership Plan (ESOP), Shares in ESOP | 518,517 |
Class C Common Stock | |
Employee Stock Ownership Plan (ESOP), Shares in ESOP | 278,904 |
11) Retirement Plans_ 401(k) Pl
11) Retirement Plans: 401(k) Plans (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Contribution Plan, Description | The Company has three 401(k) savings plans covering all eligible employees, as defined above, which includes employer participation in accordance with the provisions of Section 401(k) of the Internal Revenue Code. The plans allow participants to make pretax contributions up to a maximum of $18,000 and $18,000 for the years 2017 and 2016, respectively or the statutory limits. | |
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Amount | $ 18,000 | $ 18,000 |
SafeHarborPlanMember | ||
Contribution to Retirement Plan | $ 1,534,861 | $ 1,429,962 |
11) Retirement Plans_ Deferred
11) Retirement Plans: Deferred Compensation Plans (Details) | 12 Months Ended |
Dec. 31, 2017 | |
DeferredCompensationPlanMember | |
Deferred Compensation Arrangements, Overall, Description | Under the terms of the Plan, the Company will provide deferred compensation for a select group of management or highly compensated employees, within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended. The Board has appointed a Committee of the Company to be the Plan Administrator and to determine the employees who are eligible to participate in the plan. The employees who participate may elect to defer a portion of their compensation into the plan. |
12) Capital Stock_ Schedule 167
12) Capital Stock: Schedule of Activity in shares of capital stock (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Class A Common Stock | |||
Common Stock Outstanding | 14,535,577 | 13,819,006 | 13,109,100 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 8,183 | 42,634 | |
Dividends | $ 692,635 | $ 657,919 | |
Conversion of Stock, Shares Issued | 15,753 | 9,353 | |
Class C Common Stock | |||
Common Stock Outstanding | 2,089,374 | 1,902,229 | 1,709,640 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 103,402 | 104,975 | |
Dividends | $ 99,496 | $ 96,967 | |
Conversion of Stock, Shares Issued | (15,753) | (9,353) |
12) Capital Stock_ Schedule 168
12) Capital Stock: Schedule of Basic and diluted earnings per share (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Details | ||||||
Net Earnings (Loss) | $ 14,112,934 | $ 12,188,627 | ||||
Weighted Average Number of Shares Outstanding, Basic and Diluted | 15,972,329 | 15,575,632 | ||||
Employee stock options | $ 313,601 | $ 336,960 | ||||
Pro Forma Weighted Average Shares Outstanding, Diluted | 313,601 | 336,960 | ||||
Adjustedweighted average shares and assumed conversions | 16,285,930 | 15,912,592 | ||||
Net earnings per Class A Equivalent common share (1) | $ 0.54 | $ 0.07 | $ 0.16 | $ 0.12 | $ 0.88 | $ 0.78 |
Net earnings per Class A equivalent common share - assuming dilution (1) | $ 0.53 | $ 0.07 | $ 0.15 | $ 0.11 | $ 0.87 | $ 0.77 |
12) Capital Stock (Details)
12) Capital Stock (Details) - shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Details | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 589,822 | 334,425 |
13) Stock Compensation Plans (D
13) Stock Compensation Plans (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Details | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs, Capitalized Amount | $ 395,603 | $ 343,577 |
Unrecognized Compensation Expense | 213,770 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ 611,126 | $ 670,959 |
13) Stock Compensation Plans171
13) Stock Compensation Plans: Schedule of Assumptions Used (Details) | 12 Months Ended |
Dec. 31, 2017USD ($)$ / shares | |
All Plans | |
Weighted Average Fair Value of Each Option | $ 1.20 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Weighted Average Expected Dividend | $ | $ 0.0500 |
Underlying stock FMV | $ 4.80 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Weighted Average Volatility Rate | 41.07% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.07% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 4 years 4 months 6 days |
2013 Plan 12/21/16 | |
Weighted Average Fair Value of Each Option | $ 2.17 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Weighted Average Expected Dividend | $ | $ 0.0500 |
Underlying stock FMV | $ 6.62 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Weighted Average Volatility Rate | 54.42% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 1.99% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 5 years 3 months 22 days |
2014 Director Plan 12/7/16 | |
Weighted Average Fair Value of Each Option | $ 2.41 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Weighted Average Expected Dividend | $ | $ 0.0500 |
Underlying stock FMV | $ 7.36 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Weighted Average Volatility Rate | 54.60% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 1.93% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 5 years 3 months 22 days |
2013 Plan 12/2/16 | |
Weighted Average Fair Value of Each Option | $ 1.89 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Weighted Average Expected Dividend | $ | $ 0.0500 |
Underlying stock FMV | $ 6.68 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Weighted Average Volatility Rate | 47.05% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 1.78% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 4 years 3 months 29 days |
2014 Director Plan 12/2/16 | |
Weighted Average Fair Value of Each Option | $ 1.89 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Weighted Average Expected Dividend | $ | $ 0.0500 |
Underlying stock FMV | $ 6.68 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Weighted Average Volatility Rate | 47.05% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 1.78% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 4 years 3 months 29 days |
13) Stock Compensation Plans172
13) Stock Compensation Plans: Schedule of Activity of the 2003 Plan (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Class A Common Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number | 880,426 | 741,973 | 618,261 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 4.35 | $ 4.33 | $ 3.89 |
Adjustment for the effect of stock dividends | 40,978 | 35,346 | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted | 124,500 | 133,500 | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Exercised | (8,182) | (42,634) | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period | (18,843) | (2,500) | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 749,701 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 4.22 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 421,241 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 6 years 7 months 13 days | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 6 years 6 months 18 days | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | $ 915,293 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | $ 904,898 | ||
Class C Common Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number | 523,603 | 556,298 | 577,436 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 5.24 | $ 4.52 | |
Adjustment for the effect of stock dividends | 24,934 | 26,491 | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted | 70,000 | 80,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Exercised | (103,402) | (127,629) | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period | (24,227) | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 450,103 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 5.31 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 165,638 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 3 years 5 months 12 days | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 2 years 4 months 17 days | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | $ 204,015 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | $ 189,315 |
14) Statutory Financial Info173
14) Statutory Financial Information and Dividend Limitations: Schedule of statutory accounting practices (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Statutory Accounting Practices, Statutory Net Income Amount | $ (1,584,948) | $ 2,778,522 |
Statutory Accounting Practices, Statutory Capital and Surplus, Balance | 44,040,630 | 44,055,297 |
SecurityNationalLifeInsuranceMember | ||
Statutory Accounting Practices, Statutory Net Income Amount | (3,025,616) | 2,601,408 |
Statutory Accounting Practices, Statutory Capital and Surplus, Balance | 36,281,485 | 36,789,358 |
First Guaranty Insurance Company | ||
Statutory Accounting Practices, Statutory Net Income Amount | 1,437,963 | 174,562 |
Statutory Accounting Practices, Statutory Capital and Surplus, Balance | 4,583,346 | 4,091,847 |
MemorialInsuranceCompanyOfAmericaMember | ||
Statutory Accounting Practices, Statutory Net Income Amount | 36 | 460 |
Statutory Accounting Practices, Statutory Capital and Surplus, Balance | 1,081,799 | 1,081,319 |
SouthernSecurityLifeInsuranceCompanyIncMember | ||
Statutory Accounting Practices, Statutory Net Income Amount | 72 | 889 |
Statutory Accounting Practices, Statutory Capital and Surplus, Balance | 1,591,070 | 1,592,440 |
TransWesternLifeInsuranceCompanyMember | ||
Statutory Accounting Practices, Statutory Net Income Amount | 2,597 | 1,203 |
Statutory Accounting Practices, Statutory Capital and Surplus, Balance | $ 502,930 | $ 500,333 |
14) Statutory Financial Info174
14) Statutory Financial Information and Dividend Limitations (Details) | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Details | |
Statutory Accounting Practices, Permitted Practice, Amount | $ 44,040,630 |
Cash dividend paid | $ 1,000,000 |
15) Business Segment Informa175
15) Business Segment Information: Schedule of Segment Reporting Information, by Segment (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net investment income | $ 35,062,968 | $ 31,978,601 | ||||
Other income | 8,719,179 | 6,887,749 | ||||
Net Investment Income | 35,062,968 | 31,978,601 | ||||
Total revenues | $ 60,953,384 | $ 71,971,851 | $ 73,171,558 | $ 70,829,297 | 276,926,090 | 304,334,901 |
Costs related to funding mortgage loans | 8,663,223 | 9,191,488 | ||||
Benefits and Expenses | 61,451,358 | 70,833,834 | 69,177,259 | 67,931,527 | ||
Income tax benefit (expense) | 9,168,206 | $ (41,179) | $ (1,508,435) | $ (1,037,770) | 6,580,822 | (7,514,604) |
Net Earnings (Loss) | 14,112,934 | 12,188,627 | ||||
Goodwill | 2,765,570 | 2,765,570 | 2,765,570 | |||
Life Insurance Segment | ||||||
Revenue from customers | 70,412,476 | 64,501,017 | ||||
Net investment income | 34,068,565 | 31,019,594 | ||||
Gain (Loss) on Investments | (3,871,309) | (277,040) | ||||
Other than Temporary Impairment Losses, Investments | (774,339) | (270,358) | ||||
Other income | 856,094 | 632,260 | ||||
Net Investment Income | 5,987,731 | 7,119,692 | ||||
Total revenues | 106,679,218 | 102,725,165 | ||||
Death and other policy benefits | 36,095,018 | 33,387,380 | ||||
Increase (Decrease) in Future Policy Benefit Reserves | 23,622,750 | 21,322,195 | ||||
Amortization of deferred policy and preneed acquisition costs and Value of Business Acquired | 8,157,456 | 8,157,456 | 7,647,097 | |||
Depreciation | 484,349 | 596,827 | ||||
Administrative costs, intersegment | 315,588 | 261,119 | ||||
Other General Expense | 30,632,307 | 29,478,156 | ||||
Interest Expense, intersegment | 445,520 | 519,959 | ||||
Interest Expense, Other | 2,218,956 | 1,654,264 | ||||
Benefits and Expenses | 101,971,944 | 94,866,997 | ||||
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | 4,707,274 | 7,858,168 | ||||
Income tax benefit (expense) | 6,400,669 | (3,451,292) | ||||
Net Earnings (Loss) | 11,107,943 | 4,406,876 | ||||
Identifiable Assets | 858,068,899 | 858,068,899 | 818,140,804 | |||
Goodwill | 2,765,570 | 2,765,570 | 2,765,570 | |||
Expenditures for long-lived assets | 532,958 | |||||
Cemetery and Mortuary | ||||||
Revenue from customers | 12,657,117 | 12,267,640 | ||||
Net investment income | 445,663 | 312,494 | ||||
Gain (Loss) on Investments | 186,335 | 211,429 | ||||
Other income | 97,602 | 88,676 | ||||
Net Investment Income | 422,623 | 691,876 | ||||
Total revenues | 13,809,340 | 13,572,115 | ||||
Amortization of deferred policy and preneed acquisition costs and Value of Business Acquired | 322,794 | 322,794 | 356,078 | |||
Depreciation | 401,564 | 390,362 | ||||
Administrative costs, intersegment | 184,853 | 148,025 | ||||
Other General Expense | 10,689,813 | 10,524,535 | ||||
Interest Expense, intersegment | 181,793 | 651,046 | ||||
Interest Expense, Other | 330,211 | 282,878 | ||||
Benefits and Expenses | 12,111,028 | 12,352,924 | ||||
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | 1,698,312 | 1,219,191 | ||||
Income tax benefit (expense) | (606,293) | |||||
Net Earnings (Loss) | 1,698,312 | 1,219,191 | ||||
Identifiable Assets | 95,097,729 | 95,097,729 | 99,611,263 | |||
Expenditures for long-lived assets | 723,445 | |||||
Mortgage | ||||||
Revenue from customers | 153,797,171 | 189,146,639 | ||||
Net investment income | 548,740 | 646,513 | ||||
Gain (Loss) on Investments | 736,492 | (110,776) | ||||
Other income | 7,765,483 | 6,166,813 | ||||
Net Investment Income | 392,083 | 327,778 | ||||
Total revenues | 163,239,969 | 196,176,967 | ||||
Depreciation | 1,334,780 | 1,195,535 | ||||
Administrative costs, intersegment | 505,707 | 219,974 | ||||
Provision for loan loss reserve | 1,700,000 | |||||
Costs related to funding mortgage loans | 8,663,223 | 9,191,488 | ||||
Other General Expense | 142,952,592 | 163,730,148 | ||||
Interest Expense, intersegment | 5,168,976 | 6,339,224 | ||||
Interest Expense, Other | 3,488,165 | 3,174,726 | ||||
Benefits and Expenses | 162,113,443 | 185,551,095 | ||||
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | 1,126,526 | 10,625,872 | ||||
Income tax benefit (expense) | 786,446 | (4,063,312) | ||||
Net Earnings (Loss) | 1,912,972 | 6,562,560 | ||||
Identifiable Assets | 161,051,531 | 161,051,531 | 172,778,387 | |||
Expenditures for long-lived assets | 2,310,108 | |||||
Intercompany Eliminations | ||||||
Net Investment Income | (6,802,437) | (8,139,346) | ||||
Total revenues | (6,802,437) | (8,139,346) | ||||
Administrative costs, intersegment | (1,006,148) | (629,118) | ||||
Other General Expense | 1 | |||||
Interest Expense, intersegment | (5,796,289) | (7,510,229) | ||||
Benefits and Expenses | (6,802,437) | (8,139,346) | ||||
Identifiable Assets | (134,810,675) | (134,810,675) | (140,874,459) | |||
Consolidated | ||||||
Revenue from customers | 236,866,764 | 265,915,296 | ||||
Net investment income | 35,062,968 | 31,978,601 | ||||
Gain (Loss) on Investments | (2,948,482) | (176,387) | ||||
Other than Temporary Impairment Losses, Investments | (774,339) | (270,358) | ||||
Other income | 8,719,179 | 6,887,749 | ||||
Total revenues | 276,926,090 | 304,334,901 | ||||
Death and other policy benefits | 36,095,018 | 33,387,380 | ||||
Increase (Decrease) in Future Policy Benefit Reserves | 23,622,750 | 21,322,195 | ||||
Amortization of deferred policy and preneed acquisition costs and Value of Business Acquired | 8,480,250 | 8,480,250 | 8,003,175 | |||
Depreciation | 2,220,693 | 2,182,724 | ||||
Provision for loan loss reserve | 1,700,000 | |||||
Costs related to funding mortgage loans | 8,663,223 | 9,191,488 | ||||
Other General Expense | 184,274,712 | 203,732,840 | ||||
Interest Expense, Other | 6,037,332 | 5,111,868 | ||||
Benefits and Expenses | 269,393,978 | 284,631,670 | ||||
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | 7,532,112 | 19,703,231 | ||||
Income tax benefit (expense) | 6,580,822 | (7,514,604) | ||||
Net Earnings (Loss) | 14,112,934 | 12,188,627 | ||||
Identifiable Assets | 979,407,484 | 979,407,484 | 949,655,995 | |||
Goodwill | $ 2,765,570 | $ 2,765,570 | 2,765,570 | |||
Expenditures for long-lived assets | $ 3,566,511 |
17) Fair Value of Financial 176
17) Fair Value of Financial Instruments: Schedule of fair value assets and liabilities measured on a recurring basis (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Trading Securities, Equity | $ 6,037,855 | $ 9,911,256 |
Available-for-sale Securities | 6,037,855 | 9,911,256 |
Loans Held-for-sale, Fair Value Disclosure | 133,414,188 | |
Restricted assets of cemeteries and mortuaries | 809,958 | |
Cemetery perpetual care trust investments | 682,315 | 698,202 |
Derivatives - interest rate lock commitments | 2,032,782 | 6,911,544 |
Assets, Fair Value Disclosure, Recurring | 9,562,910 | 18,257,605 |
Derivatives - bank loan interest rate swaps, Call Options | (64,689) | (109,474) |
Derivatives - bank loan interest rate swaps, Put Options | (20,568) | (26,494) |
Derivatives - bank loan interest rate swaps, Interest rate lock commitments | (36,193) | (102,212) |
Obligations, Fair Value Disclosure | (121,450) | (241,488) |
Restricted assets | 736,603 | |
Derivatives - bank loan interest rate swaps | (3,308) | |
Fair Value, Inputs, Level 1 | ||
Trading Securities, Equity | 6,037,855 | 9,911,256 |
Available-for-sale Securities | 6,037,855 | 9,911,256 |
Restricted assets of cemeteries and mortuaries | 809,958 | |
Cemetery perpetual care trust investments | 682,315 | 698,202 |
Assets, Fair Value Disclosure, Recurring | 7,530,128 | 11,346,061 |
Derivatives - bank loan interest rate swaps, Call Options | (64,689) | (109,474) |
Derivatives - bank loan interest rate swaps, Put Options | (20,568) | (26,494) |
Obligations, Fair Value Disclosure | (85,257) | (135,968) |
Restricted assets | 736,603 | |
Fair Value, Inputs, Level 3 | ||
Loans Held-for-sale, Fair Value Disclosure | 133,414,188 | |
Derivatives - interest rate lock commitments | 2,032,782 | 6,911,544 |
Assets, Fair Value Disclosure, Recurring | 2,032,782 | 6,911,544 |
Derivatives - bank loan interest rate swaps, Interest rate lock commitments | (36,193) | (102,212) |
Obligations, Fair Value Disclosure | $ (36,193) | (105,520) |
Derivatives - bank loan interest rate swaps | $ (3,308) |
17) Fair Value of Financial 177
17) Fair Value of Financial Instruments: Schedule of Effect of Significant Unobservable Inputs, Changes in Plan Assets (Details) | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Loans Held for Sale | |
Fair Value Balance | $ 133,414,188 |
Fair Value Measurement With Unobservable Inputs Reconciliation, Recurring Basis, Asset And Liability, Weighted Average | 102.80% |
Loans Held for Sale | Minimum | |
Fair Value Measurement With Unobservable Inputs Reconciliation, Recurring Basis, Asset And Liability, Range of Inputs | 100.00% |
Loans Held for Sale | Maximum | |
Fair Value Measurement With Unobservable Inputs Reconciliation, Recurring Basis, Asset And Liability, Range of Inputs | 110.50% |
Net Derivatives Loan Commitments | |
Fair Value Balance | $ 1,996,589 |
Fair Value Measurement With Unobservable Inputs Reconciliation, Recurring Basis, Asset And Liability, Weighted Average | 19.00% |
Net Derivatives Loan Commitments | Minimum | |
Fair Value Measurement With Unobservable Inputs Reconciliation, Recurring Basis, Asset And Liability, Range of Inputs | 1.00% |
Net Derivatives Loan Commitments | Maximum | |
Fair Value Measurement With Unobservable Inputs Reconciliation, Recurring Basis, Asset And Liability, Range of Inputs | 99.00% |
17) Fair Value of Financial 178
17) Fair Value of Financial Instruments: Schedule of Changes in the consolidated balance sheet line items measured using level 3 inputs (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Net Derivatives Loan Commitments | ||
Fair Value Balance | $ 6,809,332 | $ 7,671,495 |
Fair Value, Gains (Losses) included in earnings | (4,812,743) | (862,163) |
Fair Value Balance | 1,996,589 | 6,809,332 |
Bank Loan Interest Rate Swaps | ||
Fair Value Balance | (3,308) | (13,947) |
Fair Value, Losses (Gains) included in other comprehensive income | 3,308 | 10,639 |
Fair Value Balance | $ (3,308) | |
Loans Held for Sale | ||
Originations | 1,233,683,666 | |
Sales | (1,151,031,388) | |
Fair Value, Gains (Losses) included in earnings | 50,761,910 | |
Fair Value Balance | $ 133,414,188 |
17) Fair Value of Financial 179
17) Fair Value of Financial Instruments: Fair Value Assets Measured on a Nonrecurring Basis (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Impaired mortgage loans held for investment | $ 1,363,440 | $ 2,809,925 |
Mortgage servicing rights - additions | 6,085,352 | 8,603,154 |
Impaired real estate held for investment | 8,500,000 | 2,347,820 |
Impaired fixed maturity securities, held to maturity | 426,984 | |
Assets, Fair Value Disclosure, Nonrecurring | 16,375,776 | 13,760,899 |
Fair Value, Inputs, Level 2 | ||
Impaired fixed maturity securities, held to maturity | 426,984 | |
Assets, Fair Value Disclosure, Nonrecurring | 426,984 | |
Fair Value, Inputs, Level 3 | ||
Impaired mortgage loans held for investment | 1,363,440 | 2,809,925 |
Mortgage servicing rights - additions | 6,085,352 | 8,603,154 |
Impaired real estate held for investment | 8,500,000 | 2,347,820 |
Assets, Fair Value Disclosure, Nonrecurring | $ 15,948,792 | $ 13,760,899 |
17) Fair Value of Financial 180
17) Fair Value of Financial Instruments: Schedule of Financial Instruments Carried at Other Than Fair Value (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
FixedMaturitySecuritiesHeldToMaturityMember | ||
Carrying Value | $ 228,397,623 | $ 184,979,644 |
Estimated Carrying Value | 241,498,409 | 191,850,749 |
Residential Mortgage | ||
Carrying Value | 99,816,535 | 57,096,961 |
Estimated Carrying Value | 106,050,169 | 61,357,393 |
Residential Construction | ||
Carrying Value | 49,694,025 | 40,700,003 |
Estimated Carrying Value | 49,694,025 | 40,700,003 |
Commercial Loan | ||
Carrying Value | 54,700,325 | 51,193,768 |
Estimated Carrying Value | 56,473,156 | 53,299,800 |
MortgageLoansNet1Member | ||
Carrying Value | 204,210,885 | 148,990,732 |
Estimated Carrying Value | 212,217,350 | 155,357,196 |
PolicyLoanMember | ||
Carrying Value | 6,531,352 | 6,694,148 |
Estimated Carrying Value | 6,531,352 | 6,694,148 |
Insurance Assignments | ||
Carrying Value | 35,455,098 | 32,477,246 |
Estimated Carrying Value | 35,455,098 | 32,477,246 |
Restricted Assets 1 | ||
Carrying Value | 1,130,088 | 990,613 |
Estimated Carrying Value | 1,152,324 | 991,528 |
Restricted Assets 2 | ||
Carrying Value | 1,701,811 | 1,575,044 |
Estimated Carrying Value | 1,796,910 | 1,651,539 |
Cemetery perpetual care trust investments 1 | ||
Carrying Value | 943,211 | 885,729 |
Estimated Carrying Value | 953,404 | 892,260 |
Cemetery perpetual care trust investments 2 | ||
Carrying Value | 4,128 | 3,821 |
Estimated Carrying Value | 4,411 | 3,863 |
MortgageServicingRights2Member | ||
Carrying Value | 21,376,937 | 18,872,362 |
Estimated Carrying Value | 27,427,174 | 25,496,832 |
BankAndOtherLoansPayable1Member | ||
Carrying Value | (157,450,925) | (152,137,341) |
Estimated Carrying Value | (157,450,925) | (152,137,341) |
Policyholder account balances | ||
Carrying Value | (47,867,037) | (49,421,125) |
Estimated Carrying Value | (34,557,111) | (38,530,031) |
FuturePolicyBenefitsAnnuitiesMember | ||
Carrying Value | (99,474,392) | (99,385,662) |
Estimated Carrying Value | (98,827,107) | (100,253,261) |
Loans Held for Sale | ||
Carrying Value | 189,139,832 | |
Estimated Carrying Value | 192,289,854 | |
Short Term Investments | ||
Carrying Value | 27,560,040 | |
Estimated Carrying Value | 27,560,040 | |
Fair Value, Inputs, Level 2 | FixedMaturitySecuritiesHeldToMaturityMember | ||
Estimated Carrying Value | 233,806,219 | 191,850,749 |
Fair Value, Inputs, Level 2 | Restricted Assets 1 | ||
Estimated Carrying Value | 1,152,324 | 991,528 |
Fair Value, Inputs, Level 2 | Cemetery perpetual care trust investments 1 | ||
Estimated Carrying Value | 953,404 | 892,260 |
Fair Value, Inputs, Level 3 | FixedMaturitySecuritiesHeldToMaturityMember | ||
Estimated Carrying Value | 7,692,190 | |
Fair Value, Inputs, Level 3 | Residential Mortgage | ||
Estimated Carrying Value | 106,050,169 | 61,357,393 |
Fair Value, Inputs, Level 3 | Residential Construction | ||
Estimated Carrying Value | 49,694,025 | 40,700,003 |
Fair Value, Inputs, Level 3 | Commercial Loan | ||
Estimated Carrying Value | 56,473,156 | 53,299,800 |
Fair Value, Inputs, Level 3 | MortgageLoansNet1Member | ||
Estimated Carrying Value | 212,217,350 | 155,357,196 |
Fair Value, Inputs, Level 3 | PolicyLoanMember | ||
Estimated Carrying Value | 6,531,352 | 6,694,148 |
Fair Value, Inputs, Level 3 | Insurance Assignments | ||
Estimated Carrying Value | 35,455,098 | 32,477,246 |
Fair Value, Inputs, Level 3 | Restricted Assets 2 | ||
Estimated Carrying Value | 1,796,910 | 1,651,539 |
Fair Value, Inputs, Level 3 | Cemetery perpetual care trust investments 2 | ||
Estimated Carrying Value | 4,411 | 3,863 |
Fair Value, Inputs, Level 3 | MortgageServicingRights2Member | ||
Estimated Carrying Value | 27,427,174 | 25,496,832 |
Fair Value, Inputs, Level 3 | BankAndOtherLoansPayable1Member | ||
Estimated Carrying Value | (157,450,925) | (152,137,341) |
Fair Value, Inputs, Level 3 | Policyholder account balances | ||
Estimated Carrying Value | (34,557,111) | (38,530,031) |
Fair Value, Inputs, Level 3 | FuturePolicyBenefitsAnnuitiesMember | ||
Estimated Carrying Value | $ (98,827,107) | (100,253,261) |
Fair Value, Inputs, Level 3 | Loans Held for Sale | ||
Estimated Carrying Value | 192,289,854 | |
Fair Value, Inputs, Level 3 | Short Term Investments | ||
Estimated Carrying Value | $ 27,560,040 |
18) Accumulated Other Compre181
18) Accumulated Other Comprehensive Income: Schedule of Changes in accumulated other comprehensive income (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Details | ||
Accumulated other comprehensive income, Unrealized gains on Available for Sale Securities, Restricted Assets and Cemetery Perpetual Care Trust investments | $ 421,499 | $ 996,343 |
Reclassification adjustment for net realized gains in net income | 90,475 | 160,575 |
Net unrealized gains before taxes | 511,974 | 1,156,918 |
Tax expense | (175,644) | (399,228) |
Net Unrealized Gain (Loss) | 336,330 | 757,690 |
Unrealized gains for bank loan interest rate swaps before taxes | 3,308 | 10,639 |
Potential Tax Expense | (1,290) | (4,149) |
Net Unrealized Gain (Loss) including Derivatie Bank Loans and Tax benefit | 2,018 | 6,490 |
Other comprehensive income changes | $ 338,348 | $ 764,180 |
18) Accumulated Other Compre182
18) Accumulated Other Comprehensive Income: Accumulated Balances of Other Comprehensive Income (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Details | ||
Unrealized net gains on available- for-sale securities and trust investments | $ 266,840 | $ (490,850) |
Increase (Decrease) in Unrealized net gains on available- for-sale securities and trust investments | 336,330 | 757,690 |
Unrealized net gains on available- for-sale securities and trust investments | 603,170 | 266,840 |
Unrealized gains (losses) on derivative bank loan interest rate swaps | (2,018) | (8,508) |
Increase (Decrease) in Unrealized gains (losses) on derivative bank loan interest rate swaps | 2,018 | 6,490 |
Unrealized gains (losses) on derivative bank loan interest rate swaps | (2,018) | |
Other comprehensive income, Balance | 264,822 | (499,358) |
Increase (Decrease) in Other comprehensive income, Balance | 338,348 | 764,180 |
Other comprehensive income, Balance | $ 603,170 | $ 264,822 |
19) Derivative Instruments_ 183
19) Derivative Instruments: Schedule of Fair Values and Notional Amounts of Derivative Instruments (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Derivative, Notional Amount | $ 109,433,557 | $ 195,439,555 |
Derivative Asset, Notional Amount | 2,032,782 | 6,911,544 |
Derivative Liability, Notional Amount | 121,450 | 241,488 |
Loan Commitments | ||
Derivative, Notional Amount | 105,679,107 | 191,757,193 |
Derivative Asset, Notional Amount | 2,032,782 | 6,911,544 |
Derivative Liability, Notional Amount | 36,193 | 102,212 |
Call Options | ||
Derivative, Notional Amount | 1,488,550 | 2,169,850 |
Derivative Liability, Notional Amount | 64,689 | 109,474 |
Put Options | ||
Derivative, Notional Amount | 2,265,900 | 1,336,750 |
Derivative Liability, Notional Amount | $ 20,568 | 26,494 |
Bank Loan Interest Rate Swaps | ||
Derivative, Notional Amount | 175,762 | |
Derivative Liability, Notional Amount | $ 3,308 |
19) Derivative Instruments_ 184
19) Derivative Instruments: Schedule of Gains and Losses on Derivatives (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Details | ||
Gain (Loss) on Derivatives, Interest Rate Swaps | $ 2,018 | $ 6,490 |
Gain (Loss) on Derivatives, Loan Commitments | (4,812,743) | (862,163) |
Gain (Loss) on Derivatives, Call and put options | $ 316,244 | $ 208,409 |
20) Acquisitions_ Estimated 185
20) Acquisitions: Estimated Fair Values of Assets Acquired and Liabilities Assumed (Details) | 12 Months Ended |
Dec. 31, 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 |
20) Acquisitions_ Business A186
20) Acquisitions: Business Acquisition, Pro Forma Information (Details) - First Guaranty Insurance Company | 12 Months Ended |
Dec. 31, 2016USD ($)$ / shares | |
Business Acquisition, Pro Forma Revenue | $ | $ 306,471,770 |
Business Acquisition, Pro Forma Net Income (Loss) | $ | $ 11,923,653 |
Business Acquisition, Pro Forma Earnings Per Share, Basic | $ / shares | $ 0.77 |
Business Acquisition, Pro Forma Earnings Per Share, Diluted | $ / shares | $ 0.75 |
21) Mortgage Servicing Right187
21) Mortgage Servicing Rights: Schedule of mortgage servicing rights (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Details | |||
Mortgage servicing rights, net | $ 21,376,937 | $ 18,872,362 | $ 12,679,755 |
Mortgage servicing rights | 6,085,352 | 8,603,154 | |
Amortization of MSR's | (3,580,777) | (2,410,547) | |
21) Mortgage Servicing Rights | 21,376,937 | 18,872,362 | |
Estimated fair value of MSRs | $ 27,427,174 | $ 25,496,832 |
21) Mortgage Servicing Right188
21) Mortgage Servicing Rights: Schedule of Mortgage Servicing Rights, Future Amortization Expense (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Details | ||
2,018 | $ 4,057,830 | |
2,019 | 4,057,830 | |
2,020 | 4,057,830 | |
2,021 | 4,057,684 | |
2,022 | 3,242,163 | |
Thereafter | 1,903,600 | |
21) Mortgage Servicing Rights | $ 21,376,937 | $ 18,872,362 |
21) Mortgage Servicing Right189
21) Mortgage Servicing Rights: Schedule of Other Revenues (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Other Revenue, Net | $ 7,484,199 | $ 5,865,207 |
Contractual Servicing Fees | ||
Other Revenue, Net | 7,199,649 | 5,661,699 |
Late fees | ||
Other Revenue, Net | $ 284,550 | $ 203,509 |
21) Mortgage Servicing Right190
21) Mortgage Servicing Rights: Summary of Unpaid Principal Balances of the Servicing Portfolio (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Details | ||
Servicing Unpaid Principal Balance | $ 2,924,868,843 | $ 2,720,441,340 |
21) Mortgage Servicing Right191
21) Mortgage Servicing Rights: Assumptions used in determining MSR value (Details) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Details | ||
Prepayment Speeds | 3.67% | 3.77% |
Average Life in Years of MSR | 6.34 | 6.52 |
Discount Rate | 10.01% | 10.01% |
22) Correction of Errors_ Sc192
22) Correction of Errors: Schedule of Error Corrections and Prior Period Adjustments (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 30, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Equity securities, available for sale, at estimated fair value | $ 6,037,855 | $ 6,037,855 | $ 9,911,256 | ||||||||
Mortgage loans held for investment (net of allowances for loan losses of $1,768,796 and $1,748,783 for 2017 and 2016) | 204,210,885 | 204,210,885 | 148,990,732 | ||||||||
Other investments and policy loans (net of allowances for doubtful accounts of $846,641 and $1,119,630 for 2017 and 2016) | 45,895,472 | 45,895,472 | 41,599,246 | ||||||||
Loans held for sale (including $133,414,188 for 2017 and $-0- for 2016 at estimated fair value) | 133,414,188 | 133,414,188 | 189,139,832 | ||||||||
Receivables (net of allowances for doubtful accounts of $1,544,518 and $2,355,482 for 2017 and 2016) | 10,443,869 | 10,443,869 | 8,410,546 | ||||||||
Other assets | 4,297,048 | 4,297,048 | 9,310,040 | ||||||||
Total Assets | 982,173,054 | 982,173,054 | 952,421,565 | ||||||||
Future policy benefits and unpaid claims | 604,746,951 | 604,746,951 | 584,067,692 | ||||||||
Bank and other loans payable | 157,450,925 | 157,450,925 | 152,140,679 | ||||||||
Income taxes | 17,332,783 | 17,332,783 | 24,318,869 | ||||||||
Total liabilities | 833,605,064 | 833,605,064 | 819,862,434 | ||||||||
Accumulated other comprehensive income, net of taxes | 603,170 | 603,170 | 264,822 | ||||||||
Retained earnings | 77,520,951 | 77,520,951 | 67,409,204 | ||||||||
Balance | 148,567,990 | 148,567,990 | 132,559,131 | $ 117,716,679 | |||||||
Total Liabilities and Stockholders' Equity | 982,173,054 | 982,173,054 | 952,421,565 | ||||||||
Net investment income | 35,062,968 | 31,978,601 | |||||||||
Mortgage fee income | 153,797,171 | 189,146,639 | |||||||||
Total revenues | 60,953,384 | $ 71,971,851 | $ 73,171,558 | $ 70,829,297 | 276,926,090 | 304,334,901 | |||||
Increase in future policy benefits | 23,622,750 | 21,322,195 | |||||||||
Commissions | 68,103,017 | 88,634,494 | |||||||||
Provision for loan loss reserve | 1,700,000 | ||||||||||
Costs related to funding mortgage loans | 8,663,223 | 9,191,488 | |||||||||
Total benefits and expenses | 269,393,978 | 284,631,670 | |||||||||
Earnings before income taxes | 7,532,112 | 19,703,231 | |||||||||
Income tax benefit (expense) | $ (9,168,206) | $ 41,179 | $ 1,508,435 | $ 1,037,770 | (6,580,822) | 7,514,604 | |||||
Net earnings | $ 14,112,934 | $ 12,188,627 | |||||||||
Net earnings per Class A Equivalent common share (1) | $ 0.54 | $ 0.07 | $ 0.16 | $ 0.12 | $ 0.88 | $ 0.78 | |||||
Net earnings per Class A equivalent common share - assuming dilution (1) | $ 0.53 | $ 0.07 | $ 0.15 | $ 0.11 | $ 0.87 | $ 0.77 | |||||
Unrealized gains on derivative instruments | $ 3,308 | $ 10,639 | |||||||||
Other comprehensive income | 338,348 | 764,180 | |||||||||
Provision for deferred income taxes | (7,752,028) | 6,130,644 | |||||||||
Net gains on sales of loans held for sale | (105,368,129) | (137,682,984) | |||||||||
Other operating assets and liabilities | (892,550) | (5,125,376) | |||||||||
Net cash provided by operating activities | 44,318,042 | 35,535,014 | |||||||||
Net change in warehouse line borrowings for loans held for sale | 11,585,534 | (8,325,432) | |||||||||
Net cash provided by financing activities | $ 2,207,754 | 18,990,088 | |||||||||
ScenarioAsOriginallyReportedMember | |||||||||||
Equity securities, available for sale, at estimated fair value | 10,573,356 | ||||||||||
Mortgage loans held for investment (net of allowances for loan losses of $1,768,796 and $1,748,783 for 2017 and 2016) | 149,181,578 | ||||||||||
Other investments and policy loans (net of allowances for doubtful accounts of $846,641 and $1,119,630 for 2017 and 2016) | 40,937,146 | ||||||||||
Loans held for sale (including $133,414,188 for 2017 and $-0- for 2016 at estimated fair value) | 82,491,091 | 115,286,455 | |||||||||
Receivables (net of allowances for doubtful accounts of $1,544,518 and $2,355,482 for 2017 and 2016) | 18,870,119 | 16,026,100 | |||||||||
Other assets | 6,891,468 | 7,100,869 | |||||||||
Total Assets | 854,004,671 | 749,933,317 | |||||||||
Future policy benefits and unpaid claims | 585,610,063 | 517,177,388 | |||||||||
Bank and other loans payable | 53,718,548 | 40,908,915 | |||||||||
Income taxes | 27,904,294 | 25,052,059 | |||||||||
Total liabilities | 725,825,117 | 638,687,092 | |||||||||
Accumulated other comprehensive income, net of taxes | 264,822 | 1,533,828 | |||||||||
Retained earnings | 63,029,627 | 52,021,764 | |||||||||
Balance | 128,179,554 | 111,246,225 | |||||||||
Total Liabilities and Stockholders' Equity | 854,004,671 | 749,933,317 | |||||||||
Net investment income | 37,582,444 | ||||||||||
Mortgage fee income | 186,416,311 | ||||||||||
Total revenues | 307,208,416 | ||||||||||
Increase in future policy benefits | 21,476,432 | ||||||||||
Commissions | 87,762,583 | ||||||||||
Provision for loan loss reserve | 4,688,754 | ||||||||||
Costs related to funding mortgage loans | 8,756,791 | ||||||||||
Total benefits and expenses | 286,468,053 | ||||||||||
Earnings before income taxes | 20,740,363 | ||||||||||
Income tax benefit (expense) | (6,460,859) | ||||||||||
Net earnings | $ 14,279,504 | ||||||||||
Net earnings per Class A Equivalent common share (1) | $ 0.92 | ||||||||||
Net earnings per Class A equivalent common share - assuming dilution (1) | $ 0.90 | ||||||||||
Unrealized gains on derivative instruments | $ 6,490 | ||||||||||
Other comprehensive income | 764,180 | ||||||||||
Provision for deferred income taxes | 5,076,899 | ||||||||||
FutureLifeAndOtherBenefits | 18,143,832 | ||||||||||
Net gains on sales of loans held for sale | 20,216,621 | ||||||||||
Other operating assets and liabilities | (8,473,503) | ||||||||||
Net cash provided by operating activities | 43,860,446 | ||||||||||
Net cash provided by financing activities | $ 10,664,656 | ||||||||||
AdjustmentAMember | |||||||||||
Accumulated other comprehensive income, net of taxes | (2,033,186) | ||||||||||
Retained earnings | 2,033,186 | ||||||||||
Net earnings per Class A Equivalent common share (1) | $ 0 | ||||||||||
Net earnings per Class A equivalent common share - assuming dilution (1) | $ 0 | ||||||||||
Scenario, Previously Reported | |||||||||||
Equity securities, available for sale, at estimated fair value | $ 10,573,356 | ||||||||||
Mortgage loans held for investment (net of allowances for loan losses of $1,768,796 and $1,748,783 for 2017 and 2016) | 149,181,578 | ||||||||||
Other investments and policy loans (net of allowances for doubtful accounts of $846,641 and $1,119,630 for 2017 and 2016) | 40,937,146 | ||||||||||
Loans held for sale (including $133,414,188 for 2017 and $-0- for 2016 at estimated fair value) | 82,491,091 | 115,286,455 | |||||||||
Receivables (net of allowances for doubtful accounts of $1,544,518 and $2,355,482 for 2017 and 2016) | 18,870,119 | 16,026,100 | |||||||||
Other assets | 6,891,468 | 7,100,869 | |||||||||
Total Assets | 854,004,671 | 749,933,317 | |||||||||
Future policy benefits and unpaid claims | 585,610,063 | 517,177,388 | |||||||||
Bank and other loans payable | 53,718,548 | 40,908,915 | |||||||||
Income taxes | 27,904,294 | 25,052,059 | |||||||||
Total liabilities | 725,825,117 | 638,687,092 | |||||||||
Accumulated other comprehensive income, net of taxes | 264,822 | (499,358) | |||||||||
Retained earnings | 63,029,627 | 54,054,950 | |||||||||
Balance | 128,179,554 | 111,246,225 | |||||||||
Total Liabilities and Stockholders' Equity | 854,004,671 | 749,933,317 | |||||||||
Net investment income | 37,582,444 | ||||||||||
Mortgage fee income | 186,416,311 | ||||||||||
Total revenues | $ 74,147,490 | $ 84,393,427 | $ 81,312,192 | $ 67,355,307 | 307,208,416 | ||||||
Increase in future policy benefits | 21,476,432 | ||||||||||
Commissions | 87,762,583 | ||||||||||
Provision for loan loss reserve | 4,688,754 | ||||||||||
Costs related to funding mortgage loans | 8,756,791 | ||||||||||
Total benefits and expenses | 286,468,053 | ||||||||||
Earnings before income taxes | 20,740,363 | ||||||||||
Income tax benefit (expense) | $ 233,548 | $ 2,190,206 | $ 2,456,885 | $ 1,580,220 | (6,460,859) | ||||||
Net earnings | $ 14,279,504 | ||||||||||
Net earnings per Class A Equivalent common share (1) | $ 0.11 | $ 0.31 | $ 0.33 | $ 0.17 | $ 0.92 | ||||||
Net earnings per Class A equivalent common share - assuming dilution (1) | $ 0.11 | $ 0.30 | $ 0.32 | $ 0.16 | $ 0.90 | ||||||
Unrealized gains on derivative instruments | $ 6,490 | ||||||||||
Other comprehensive income | 764,180 | ||||||||||
Provision for deferred income taxes | 5,076,899 | ||||||||||
FutureLifeAndOtherBenefits | 18,143,832 | ||||||||||
Net gains on sales of loans held for sale | 20,216,621 | ||||||||||
Other operating assets and liabilities | (8,473,503) | ||||||||||
Net cash provided by operating activities | 43,860,446 | ||||||||||
Net cash provided by financing activities | 10,664,656 | ||||||||||
AdjustmentBMember | |||||||||||
Equity securities, available for sale, at estimated fair value | (662,100) | ||||||||||
Mortgage loans held for investment (net of allowances for loan losses of $1,768,796 and $1,748,783 for 2017 and 2016) | (190,846) | ||||||||||
Other investments and policy loans (net of allowances for doubtful accounts of $846,641 and $1,119,630 for 2017 and 2016) | 662,100 | ||||||||||
Loans held for sale (including $133,414,188 for 2017 and $-0- for 2016 at estimated fair value) | 106,648,741 | 96,166,551 | |||||||||
Receivables (net of allowances for doubtful accounts of $1,544,518 and $2,355,482 for 2017 and 2016) | (10,459,573) | (9,965,106) | |||||||||
Other assets | 2,418,572 | 4,338,404 | |||||||||
Total Assets | 98,416,894 | 90,539,849 | |||||||||
Future policy benefits and unpaid claims | (1,542,371) | (1,388,134) | |||||||||
Bank and other loans payable | 98,422,131 | 90,096,699 | |||||||||
Income taxes | (3,585,425) | (4,639,170) | |||||||||
Total liabilities | 94,037,317 | 84,069,395 | |||||||||
Retained earnings | 4,379,577 | 6,470,454 | |||||||||
Balance | 4,379,577 | 6,470,454 | |||||||||
Total Liabilities and Stockholders' Equity | 98,416,894 | 90,539,849 | |||||||||
Net investment income | (5,603,843) | ||||||||||
Mortgage fee income | 2,730,328 | ||||||||||
Total revenues | (2,873,515) | ||||||||||
Increase in future policy benefits | (154,237) | ||||||||||
Commissions | 871,911 | ||||||||||
Provision for loan loss reserve | (2,988,754) | ||||||||||
Costs related to funding mortgage loans | 434,697 | ||||||||||
Total benefits and expenses | (1,836,383) | ||||||||||
Earnings before income taxes | (1,037,132) | ||||||||||
Income tax benefit (expense) | (1,053,745) | ||||||||||
Net earnings | $ (2,090,877) | ||||||||||
Net earnings per Class A Equivalent common share (1) | $ (0.13) | ||||||||||
Net earnings per Class A equivalent common share - assuming dilution (1) | $ (0.13) | ||||||||||
Provision for deferred income taxes | $ 1,053,745 | ||||||||||
LoansOriginatedForSale | (3,098,710,299) | ||||||||||
Proceeds from Loans | 3,246,127,714 | ||||||||||
Gain (Loss) on Sale of Mortgage Loans | (137,682,984) | ||||||||||
FutureLifeAndOtherBenefits | (154,237) | ||||||||||
Net gains on sales of loans held for sale | (20,216,621) | ||||||||||
Other operating assets and liabilities | 3,348,127 | ||||||||||
Net cash provided by operating activities | (8,325,432) | ||||||||||
Net change in warehouse line borrowings for loans held for sale | 8,325,432 | ||||||||||
Net cash provided by financing activities | 8,325,432 | ||||||||||
Restatement Adjustment | |||||||||||
Equity securities, available for sale, at estimated fair value | 9,911,256 | ||||||||||
Mortgage loans held for investment (net of allowances for loan losses of $1,768,796 and $1,748,783 for 2017 and 2016) | 148,990,732 | ||||||||||
Other investments and policy loans (net of allowances for doubtful accounts of $846,641 and $1,119,630 for 2017 and 2016) | 41,599,246 | ||||||||||
Loans held for sale (including $133,414,188 for 2017 and $-0- for 2016 at estimated fair value) | 189,139,832 | 211,453,006 | |||||||||
Receivables (net of allowances for doubtful accounts of $1,544,518 and $2,355,482 for 2017 and 2016) | 8,410,546 | 6,060,994 | |||||||||
Other assets | 9,310,040 | 11,439,273 | |||||||||
Total Assets | 952,421,565 | 840,473,166 | |||||||||
Future policy benefits and unpaid claims | 584,067,692 | 515,789,254 | |||||||||
Bank and other loans payable | 152,140,679 | 131,005,614 | |||||||||
Income taxes | 24,318,869 | 20,412,889 | |||||||||
Total liabilities | 819,862,434 | 722,756,487 | |||||||||
Accumulated other comprehensive income, net of taxes | 264,822 | (499,358) | |||||||||
Retained earnings | 67,409,204 | 60,525,404 | |||||||||
Balance | 132,559,131 | 117,716,679 | |||||||||
Total Liabilities and Stockholders' Equity | 952,421,565 | $ 840,473,166 | |||||||||
Net investment income | 31,978,601 | ||||||||||
Mortgage fee income | 189,146,639 | ||||||||||
Total revenues | $ 71,842,669 | $ 82,948,657 | $ 80,087,227 | $ 69,456,348 | 304,334,901 | ||||||
Increase in future policy benefits | 21,322,195 | ||||||||||
Commissions | 88,634,494 | ||||||||||
Provision for loan loss reserve | 1,700,000 | ||||||||||
Costs related to funding mortgage loans | 9,191,488 | ||||||||||
Total benefits and expenses | 284,631,670 | ||||||||||
Earnings before income taxes | 19,703,231 | ||||||||||
Income tax benefit (expense) | $ 622,061 | $ 2,390,525 | $ 2,968,879 | $ 1,533,139 | (7,514,604) | ||||||
Net earnings | $ 12,188,627 | ||||||||||
Net earnings per Class A Equivalent common share (1) | $ 0.03 | $ 0.27 | $ 0.32 | $ 0.16 | $ 0.78 | ||||||
Net earnings per Class A equivalent common share - assuming dilution (1) | $ 0.03 | $ 0.26 | $ 0.32 | $ 0.16 | $ 0.77 | ||||||
Unrealized gains on derivative instruments | $ 6,490 | ||||||||||
Other comprehensive income | 764,180 | ||||||||||
Provision for deferred income taxes | 6,130,644 | ||||||||||
LoansOriginatedForSale | (3,098,710,299) | ||||||||||
Proceeds from Loans | 3,246,127,714 | ||||||||||
Gain (Loss) on Sale of Mortgage Loans | (137,682,984) | ||||||||||
FutureLifeAndOtherBenefits | 17,989,595 | ||||||||||
Other operating assets and liabilities | (5,125,376) | ||||||||||
Net cash provided by operating activities | 35,535,014 | ||||||||||
Net change in warehouse line borrowings for loans held for sale | 8,325,432 | ||||||||||
Net cash provided by financing activities | $ 18,990,088 |
23) Quarterly Financial Data193
23) Quarterly Financial Data (unaudited): Quarterly Financial Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 30, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Total revenues | $ 60,953,384 | $ 71,971,851 | $ 73,171,558 | $ 70,829,297 | $ 276,926,090 | $ 304,334,901 | ||||
Benefits and Expenses | 61,451,358 | 70,833,834 | 69,177,259 | 67,931,527 | ||||||
Earnings (loss) before income taxes | (497,974) | 1,138,017 | 3,994,299 | 2,897,770 | ||||||
Income tax benefit (expense) | 9,168,206 | (41,179) | (1,508,435) | (1,037,770) | $ 6,580,822 | $ (7,514,604) | ||||
Net Earnings | $ 8,670,232 | $ 1,096,838 | $ 2,485,864 | $ 1,860,000 | ||||||
Net earnings per Class A Equivalent common share (1) | $ 0.54 | $ 0.07 | $ 0.16 | $ 0.12 | $ 0.88 | $ 0.78 | ||||
Net earnings per Class A equivalent common share - assuming dilution (1) | $ 0.53 | $ 0.07 | $ 0.15 | $ 0.11 | $ 0.87 | $ 0.77 | ||||
Scenario, Previously Reported | ||||||||||
Total revenues | $ 74,147,490 | $ 84,393,427 | $ 81,312,192 | $ 67,355,307 | $ 307,208,416 | |||||
Benefits and Expenses | 72,117,972 | 77,427,792 | 73,758,739 | 63,163,550 | ||||||
Earnings (loss) before income taxes | 2,029,518 | 6,965,635 | 7,553,453 | 4,191,757 | ||||||
Income tax benefit (expense) | (233,548) | (2,190,206) | (2,456,885) | (1,580,220) | $ 6,460,859 | |||||
Net Earnings | $ 1,795,970 | $ 4,775,429 | $ 5,096,568 | $ 2,611,537 | ||||||
Net earnings per Class A Equivalent common share (1) | $ 0.11 | $ 0.31 | $ 0.33 | $ 0.17 | $ 0.92 | |||||
Net earnings per Class A equivalent common share - assuming dilution (1) | $ 0.11 | $ 0.30 | $ 0.32 | $ 0.16 | $ 0.90 | |||||
Restatement Adjustment | ||||||||||
Total revenues | $ 71,842,669 | $ 82,948,657 | $ 80,087,227 | $ 69,456,348 | $ 304,334,901 | |||||
Benefits and Expenses | 70,769,933 | 76,375,127 | 72,101,342 | 65,385,268 | ||||||
Earnings (loss) before income taxes | 1,072,736 | 6,573,530 | 7,985,885 | 4,071,080 | ||||||
Income tax benefit (expense) | (622,061) | (2,390,525) | (2,968,879) | (1,533,139) | $ 7,514,604 | |||||
Net Earnings | $ 450,675 | $ 4,183,005 | $ 5,017,006 | $ 2,537,941 | ||||||
Net earnings per Class A Equivalent common share (1) | $ 0.03 | $ 0.27 | $ 0.32 | $ 0.16 | $ 0.78 | |||||
Net earnings per Class A equivalent common share - assuming dilution (1) | $ 0.03 | $ 0.26 | $ 0.32 | $ 0.16 | $ 0.77 |
24) Future Policy Benefits a194
24) Future Policy Benefits and Unpaid Claims: Schedule of Liability for Future Policy Benefits, by Product Segment (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Future policy benefits and unpaid claims | $ 604,746,951 | $ 584,067,692 |
Receivable from reinsurers | 13,394,603 | 13,079,668 |
Net future policy benefits and unpaid claims | 591,352,348 | 570,988,024 |
Life Insurance Segment | ||
Future policy benefits and unpaid claims | 445,247,671 | 424,878,578 |
Receivable from reinsurers | 7,291,996 | 7,218,580 |
Fixed Annuity | ||
Future policy benefits and unpaid claims | 99,474,392 | 99,385,662 |
Receivable from reinsurers | 6,023,092 | 5,781,402 |
Policyholder account balances | ||
Future policy benefits and unpaid claims | 47,867,037 | 49,421,125 |
Accident and Health Insurance Product Line | ||
Future policy benefits and unpaid claims | 482,234 | 475,059 |
Other Policyholder Funds | ||
Future policy benefits and unpaid claims | 4,487,521 | 4,683,720 |
Reported but unpaid claims | ||
Future policy benefits and unpaid claims | 6,023,084 | 3,897,391 |
Receivable from reinsurers | 69,218 | 69,189 |
Incurred but not reported claims | ||
Future policy benefits and unpaid claims | 1,165,012 | 1,326,157 |
Receivable from reinsurers | $ 10,297 | $ 10,497 |