Note 14: Business Segment Information

12 Months Ended

Dec. 31, 2015

Notes

Note 14: Business Segment Information

14)    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 Company’s life insurance segment consists of life insurance premiums and operating expenses from the sale of insurance products sold by the Company’s independent agency force and net investment income derived from investing policyholder and segment surplus funds. The Company’s cemetery and mortuary segment consists of revenues and operating expenses from the sale of at-need cemetery and mortuary merchandise and services at its mortuaries and cemeteries, pre-need sales of cemetery spaces after collection of 10% or more of the purchase price and the net investment income from investing segment surplus funds. The Company’s mortgage segment consists of 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 Enterprise’s Reportable Segments

The Company’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.

	2015
	Life	Cemetery/		Reconciling
	Insurance	Mortuary	Mortgage	Items	Consolidated
Revenues:
From external sources:
Revenue from customers	$       58,883,721	$       11,502,045	$     171,849,594	$                         -	$     242,235,360
Net investment income	25,297,486	450,854	8,259,564	-	34,007,904
Realized gains (losses) on
investments and other assets	2,332,456	387,316	(318,413)	-	2,401,359
Other than temporary impairments	(413,714)	-	(191,716)	-	(605,430)
Other revenues	824,759	146,831	4,150,217	-	5,121,807
Intersegment revenues:
Net investment income	7,615,338	1,155,180	326,822	(9,097,340)	-
Total revenues	94,540,046	13,642,226	184,076,068	(9,097,340)	283,161,000
Expenses:
Death and other policy benefits	33,549,893	-	-	-	33,549,893
Increase in future policy benefits	17,212,001	-	-	-	17,212,001
Amortization of deferred policy     and preneed acquisition costs and
value of business acquired	5,306,781	334,512	-	-	5,641,293
Depreciation	710,733	403,066	1,069,697	-	2,183,496
General, administrative and
other costs:
Intersegment	-	156,777	199,244	(356,021)	-
Provision for loan losses	-	-	6,295,043	-	6,295,043
Costs related to funding mortgage
loans	-	-	8,864,404	-	8,864,404
Other	27,416,860	10,117,012	147,600,822	(1)	185,134,693
Interest expense:
Intersegment	726,919	1,379,668	6,634,731	(8,741,318)	-
Other	1,151,860	337,632	2,969,120	-	4,458,612
Total benefits and expenses	86,075,047	12,728,667	173,633,061	(9,097,340)	263,339,435
Earnings before income    taxes	$         8,464,999	$            913,559	$       10,443,007	$                         -	$       19,821,565
Income tax expense	(3,138,929)	-	(4,059,756)	-	(7,198,685)
Net earnings	$         5,326,070	$            913,559	$         6,383,251	$                         -	$       12,622,880
Identifiable assets	$     721,362,741	$     101,935,898	$       66,743,342	$     (140,108,664)	$     749,933,317
Goodwill	$         2,765,570	$                        -	$                        -	$                         -	$         2,765,570
Expenditures for long-lived assets	$         3,024,223	$            154,226	$            454,241	$                         -	$         3,632,690

	2014
	Life	Cemetery/		Reconciling
	Insurance	Mortuary	Mortgage	Items	Consolidated
Revenues:
From external sources:
Revenue from customers	$       57,037,623	$       11,426,308	$     124,668,054	$                         -	$     193,131,985
Net investment income	23,008,489	275,324	5,019,927	-	28,303,740
Realized gains (losses) on
investments and other assets	1,208,391	585,543	124,242	-	1,918,176
Other than temporary impairments	(164,240)	-	-	-	(164,240)
Other revenues	682,682	169,464	2,894,867	-	3,747,013
Intersegment revenues:
Net investment income	6,128,389	1,288,856	642,880	(8,060,125)	-
Total revenues	87,901,334	13,745,495	133,349,970	(8,060,125)	226,936,674
Expenses:
Death and other policy benefits	29,789,964	-	-	-	29,789,964
Increase in future policy benefits	18,060,151	-	-	-	18,060,151
Amortization of deferred policy and preneed acquisition costs and
value of business acquired	6,561,589	331,389	-	-	6,892,978
Depreciation	644,510	436,390	1,096,265	-	2,177,165
General, administrative and
other costs:
Intersegment	24,000	166,079	208,513	(398,592)	-
Provision for loan losses	-	-	3,053,403	-	3,053,403
Costs related to funding mortgage
loans	-	-	6,877,069	-	6,877,069
Other	23,045,928	10,245,144	111,319,492	(2)	144,610,562
Interest expense:
Intersegment	725,354	1,481,317	5,454,860	(7,661,531)	-
Other	578,083	421,920	1,994,426	-	2,994,429
Total benefits and expenses	79,429,579	13,082,239	130,004,028	(8,060,125)	214,455,721
Earnings before income    taxes	$         8,471,755	$            663,256	$         3,345,942	$                         -	$       12,480,953
Income tax expense	(3,427,254)	-	(1,299,051)	-	(4,726,305)
Net earnings	$         5,044,501	$            663,256	$         2,046,891	$                         -	$         7,754,648
Identifiable assets	$     652,348,803	$     109,114,226	$       52,349,204	$     (142,742,671)	$     671,069,562
Goodwill	$         2,765,570	$                        -	$                        -	$                         -	$         2,765,570
Expenditures for long-lived assets	$         1,420,950	$            121,677	$            737,936	$                         -	$         2,280,563

	2013
	Life	Cemetery/		Reconciling
	Insurance	Mortuary	Mortgage	Items	Consolidated
Revenues:
From external sources:
Revenue from customers	$       51,322,567	$       12,000,375	$     127,950,021	$                         -	$     191,272,963
Net investment income	15,877,784	268,923	4,207,295	-	20,354,002
Realized gains (losses) on
investments and other assets	1,402,352	15,699	-	-	1,418,051
Other than temporary impairments	(336,226)	-	-	-	(336,226)
Other revenues	538,009	94,703	1,973,518	-	2,606,230
Intersegment revenues:
Net investment income	7,220,282	1,356,825	262,074	(8,839,181)	-
Total revenues	76,024,768	13,736,525	134,392,908	(8,839,181)	215,315,020
Expenses:
Death and other policy benefits	28,534,936	-	-	-	28,534,936
Increase in future policy benefits	19,594,890	-	-	-	19,594,890
Amortization of deferred policy     and preneed acquisition costs and
value of business acquired	4,811,300	370,537	-	-	5,181,837
Depreciation	401,893	426,641	792,535	-	1,621,069
General, administrative and
other costs:
Intersegment	24,000	141,367	199,193	(364,560)	-
Provision for loan losses	-	-	1,751,472	-	1,751,472
Costs related to funding mortgage
loans	-	-	6,635,290	-	6,635,290
Other	18,753,753	10,467,717	110,096,627	1	139,318,098
Interest expense:
Intersegment	802,352	1,664,096	6,008,174	(8,474,622)	-
Other	233,343	443,133	2,177,225	-	2,853,701
Total benefits and expenses	73,156,467	13,513,491	127,660,516	(8,839,181)	205,491,293
Earnings before income    taxes	$         2,868,301	$            223,034	$         6,732,392	$                         -	$         9,823,727
Income tax (expense) benefit	399,304	-	(2,637,110)	-	(2,237,806)
Net earnings	$         3,267,605	$            223,034	$         4,095,282	$                         -	$         7,585,921
Identifiable assets	$     591,465,834	$     114,454,631	$       50,250,677	$     (137,413,688)	$     618,757,454
Goodwill	$            391,848	$            285,191	$                        -	$                         -	$            677,039
Expenditures for long-lived assets	$            659,259	$         1,100,195	$         1,810,879	$                         -	$         3,570,333