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Note 2: Investments

12 Months Ended

Dec. 31, 2015

Notes

Note 2: Investments

2) Investments

The Company’s investments in fixed maturity securities held to maturity and equity securities available for sale as of December 31, 2015 are summarized as follows:

		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
December 31, 2015:
Fixed maturity securities held to maturity carried at amortized cost:
U.S. Treasury securities and obligations of U.S. Government agencies		$ 3,560,579		$ 292,869		$ (4,743)		$ 3,848,705

Obligations of states and political subdivisions		1,805,828		182,073		(1,040)		1,986,861

Corporate securities including public utilities		134,488,108		9,836,355		(5,501,743)		138,822,720

Mortgage-backed securities		5,091,887		190,867		(75,580)		5,207,174

Redeemable preferred stock		612,023		29,675		-		641,698

Total fixed maturity securities held to maturity		$ 145,558,425		$ 10,531,839		$ (5,583,106)		$ 150,507,158

Equity securities available for sale at estimated fair value:

Common stock:

Industrial, miscellaneous and all other		$ 9,891,500		$ 213,683		$ (1,674,094)		$ 8,431,090

Total securities available for sale carried at estimated fair value		$ 9,891,500		$ 213,683		$ (1,674,094)		$ 8,431,090

Mortgage loans on real estate and construction loans held for investment at amortized cost:
Residential		$ 46,020,490
Residential construction		34,851,557
Commercial		33,522,978
Less: Allowance for loan losses		(1,848,120)

Total mortgage loans on real estate and construction loans held for investment		$ 112,546,905

Real estate held for investment - net of depreciation		$ 114,852,432

Policy and other loans at amortized cost:
Policy loans		$ 6,896,457
Other loans		33,592,580
Less: Allowance for doubtful accounts		(906,616)

Total policy and other loans at amortized cost		$ 39,582,421

Short-term investments at amortized cost		$ 16,915,808

The Company’s investments in fixed maturity securities held to maturity and equity securities available for sale as of December 31, 2014 are summarized as follows:

		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
December 31, 2014:
Fixed maturity securities held to maturity carried at amortized cost:
U.S. Treasury securities and obligations of U.S. Government agencies		$ 1,873,146		$ 345,715		$ -		$ 2,218,861

Obligations of states and political subdivisions		1,736,489		221,893		(5,278)		1,953,104

Corporate securities including public utilities		126,533,483		15,841,536		(980,357)		141,394,662

Mortgage-backed securities		4,263,206		305,381		(11,894)		4,556,693

Redeemable preferred stock		612,023		22,032		-		634,055

Total fixed maturity securities held to maturity		$ 135,018,347		$ 16,736,557		$ (997,529)		$ 150,757,375

Equity securities available for sale at estimated fair value:

Common stock:

Industrial, miscellaneous and all other		$ 7,179,010		$ 393,873		$ (820,133)		$ 6,752,750

Total securities available for sale carried at estimated fair value		$ 7,179,010		$ 393,873		$ (820,133)		$ 6,752,750

Mortgage loans on real estate and construction loans held for investment at amortized cost:
Residential		$ 53,592,433
Residential construction		33,071,938
Commercial		35,388,756
Less: Allowance for loan losses		(2,003,055)

Total mortgage loans on real estate and construction loans held for investment		$ 120,050,072

Real estate held for investment - net of depreciation		$ 111,411,351

Policy and other loans at amortized cost:
Policy loans		$ 7,011,012
Other loans		27,807,829
Less: Allowance for doubtful accounts		(693,413)

Total policy and other loans at amortized cost		$ 34,125,428

Short-term investments at amortized cost		$ 27,059,495

Fixed Maturity Securities

The following tables summarize unrealized losses on fixed maturities securities, which are carried at amortized cost, at December 31, 2015 and 2014. The unrealized losses were primarily related to interest rate fluctuations. The tables set forth unrealized losses by duration and number of investment positions, together with the fair value of the related fixed maturity securities:

		Unrealized Losses for Less than Twelve Months		No. of Investment Positions		Unrealized Losses for More than Twelve Months		No. of Investment Positions		Total Unrealized Loss
At December 31, 2015
U.S. Treasury Securities and Obligations
of U.S. Government Agencies		$ 4,743		2		$ -		0		$ 4,743
Obligations of States and
Political Subdivisions		-		0		1,040		1		1,040
Corporate Securities		3,701,572		98		1,800,171		18		5,501,743
Mortgage and other
asset-backed securities		75,580		4		-		0		75,580
Total unrealized losses		$ 3,781,895		104		$ 1,801,211		19		$ 5,583,106
Fair Value		$34,076,401				$ 3,809,957				$ 7,886,358



At December 31, 2014
Obligations of States and
Political Subdivisions		$ -		0		$ 5,278		1		$ 5,278
Corporate Securities		548,310		21		432,047		11		980,357
Mortgage and other
asset-backed securities		3,966		1		7,928		0		11,894
Total unrealized losses		$ 552,276		22		$ 445,253		12		$ 997,529
Fair Value		$ 7,081,352				$ 2,777,587				$ 9,858,939

The average market value of the related fixed maturities was 87.2% and 90.8% of amortized cost as of December 31, 2015 and 2014, respectively. During 2015, 2014 and 2013, an other than temporary decline in market value resulted in the recognition of credit losses on fixed maturity securities of $120,000, $120,000 and $120,000, respectively.

On a quarterly basis, the Company reviews its available for sale and held to maturity fixed investment securities related to corporate securities and other public utilities, consisting of bonds and preferred stocks that are in a loss position. The review involves an analysis of the securities in relation to historical values, and projected earnings and revenue growth rates. Based on the analysis, a determination is made whether a security will likely recover from the loss position within a reasonable period of time. If it is unlikely that the investment will recover from the loss position, the loss is considered to be other-than-temporary, the security is written down to the impaired value and an impairment loss is recognized.

Equity Securities

The following tables summarize unrealized losses on equity securities that were carried at estimated fair value based on quoted trading prices at December 31, 2015 and 2014. The unrealized losses were primarily the result of decreases in market value due to overall equity market declines. The tables set forth unrealized losses by duration and number of investment positions, together with the fair value of the related equity securities available for sale in a loss position:

		Unrealized Losses for Less than Twelve Months		No. of Investment Positions		Unrealized Losses for More than Twelve Months		No. of Investment Positions		Total Unrealized Losses
At December 31, 2015
Industrial, miscellaneous and all other		$ 997,862		222		$ 676,232		74		$1,674,094
Total unrealized losses		$ 997,862		222		$ 676,232		74		$1,674,094
Fair Value		$4,177,709				$ 760,860				$4,938,569

At December 31, 2014
Industrial, miscellaneous and all other		$ 327,389		138		$ 492,744		27		$ 820,133
Total unrealized losses		$ 327,389		138		$ 492,744		27		$ 820,133
Fair Value		$2,162,425				$ 676,706				$2,839,131

The average market value of the equity securities available for sale was 74.7% and 77.6% of the original investment as of December 31, 2015 and 2014, 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 2015, 2014, and 2013, an other than temporary decline in the market value resulted in the recognition of an impairment loss on equity securities of $293,714, $44,240, and $100,304, respectively.

On a quarterly basis, the Company reviews its investment in industrial, miscellaneous and all other equity securities that are in a loss position. The review involves an analysis of the securities in relation to historical values, price earnings ratios, projected earnings and revenue growth rates. Based on the analysis a determination is made whether a security will likely recover from the loss position within a reasonable period of time. If it is unlikely that the investment will recover from the loss position, the loss is considered to be other than temporary, the security is written down to the impaired value and an impairment loss is recognized.

The fair values of fixed maturity securities are based on quoted market prices, when available. For fixed maturity securities not actively traded, fair values are estimated using values obtained from independent pricing services, or in the case of private placements, are estimated by discounting expected future cash flows using a current market value applicable to the coupon rate, credit and maturity of the investments. The fair values for equity securities are based on quoted market prices.

The amortized cost and estimated fair value of fixed maturity securities at December 31, 2015, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because certain borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

		Amortized		Estimated Fair
		Cost		Value
Held to Maturity:
Due in 2016		$ 5,496,865		$ 5,592,783
Due in 2017 through 2020		34,664,714		36,788,278
Due in 2021 through 2025		34,792,146		35,259,361
Due after 2025		64,900,790		67,017,864
Mortgage-backed securities		5,091,887		5,207,174
Redeemable preferred stock		612,023		641,698
Total held to maturity		$ 145,558,425		$ 150,507,158

The cost and estimated fair value of available for sale securities at December 31, 2015, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because certain borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Equities are valued using the specific identification method.

				Estimated Fair
		Cost		Value
Available for Sale:
Common stock		$ 9,891,500		$ 8,431,090
Total available for sale		$ 9,891,500		$ 8,431,090

The Company’s realized gains and losses and other than temporary impairments from investments and other assets are summarized as follows:

		2015		2014		2013
Fixed maturity securities held
to maturity:
Gross realized gains		$ 387,162		$ 390,203		$ 97,238
Gross realized losses		(82,166)		(71,800)		(41,164)
Other than temporary impairments		(120,000)		(120,000)		(120,000)

Securities available for sale:
Gross realized gains		180,602		349,207		540,990
Gross realized losses		(66,850)		(55,222)		(2,678)
Other than temporary impairments		(293,714)		(44,240)		(100,304)

Other assets:
Gross realized gains		2,067,438		1,445,596		824,203
Gross realized losses		(84,827)		(139,808)		(538)
Other than temporary impairments		(191,716)		-		(115,922)
Total		$ 1,795,929		$ 1,753,936		$ 1,081,825

The net carrying amount for sales of securities classified as held to maturity was $2,569,712, $2,840,709 and $1,455,835, for the years ended December 31, 2015, 2014 and 2013, respectively. The net realized gain related to these sales was $311,752, $20,722 and $12,533, for the years ended December 31, 2015, 2014 and 2013, respectively.

There were no investments, aggregated by issuer, in excess of 10% of shareholders’ equity (before net unrealized gains and losses on available-for-sale securities) at December 31, 2015, other than investments issued or guaranteed by the United States Government.

Major categories of net investment income are as follows:

	2015		2014		2013
Fixed maturity securities	$ 8,168,441		$ 8,229,451		$ 8,265,949
Equity securities	269,795		212,917		210,491
Mortgage loans on real estate	7,696,533		7,550,110		4,666,910
Real estate	9,454,567		8,433,895		6,658,185
Policy and other loans	749,917		741,220		799,703
Short-term investments, principally gains on sale of mortgage loans	16,516,202		12,397,382		8,952,584
Gross investment income	42,855,455		37,564,975		29,553,822
Investment expenses	(8,847,551)		(9,261,235)		(9,199,820)
Net investment income	$ 34,007,904		$ 28,303,740		$ 20,354,002

Net investment income includes net investment income earned by the restricted assets of the cemeteries and mortuaries of $369,632, $356,369 and $341,430 for 2015, 2014 and 2013, 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 $8,815,542 and $8,886,001 at December 31, 2015 and 2014, respectively. The restricted securities are included in various assets under investments on the accompanying consolidated balance sheets.

Real Estate

The Company continues to strategically deploy resources into real estate to match the income and yield durations of its primary obligations. The sources for these real estate assets come through its various business units in the form of acquisition, development and lending foreclosures. The Company reports real estate held for investment pursuant to the accounting policy discussed in Note 1 and Note 16 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 9 commercial properties in 5 states. These properties include industrial warehouses, office building and retail centers. The assets are primarily held without debt; however, the Company does use debt in strategic cases to leverage established yields or to acquire higher quality, or class, of asset.

The following is a summary of the Company’s investment in commercial real estate for the periods presented:

		Net Ending Balance				Total Square Footage
		December 31				December 31
		2015		2014		2015		2014
Arizona		$ 463,774	(1)	$ 477,012	(1)	16,270		16,270
Kansas		11,537,335		10,103,497		222,679		222,679
New Mexico		7,000	(1)	7,000	(1)	-		-
Texas		3,768,542		3,748,571		23,470		23,470
Utah		17,403,746		17,849,072		253,244		297,587

		$ 33,180,397		$ 32,185,152		515,663		560,006

(1) Includes Vacant Land

Residential Real Estate Held for Investment

The Company owns a portfolio of residential homes primarily as a result of loan foreclosures. The strategy has been to lease these homes to produce cash flow, and allow time for the economic fundamentals to return to the various markets. Once the market for these homes return, the Company engages in the disposition of these assets at prices above the book value or at a discount far less than what would have been realized at the time of foreclosure.

The Company established Security National Real Estate Services (“SNRE”) in 2013 to manage the residential portfolio. SNRE cultivates and maintains the preferred vendor relationships necessary to manage costs and quality of work performed on the portfolio of homes across the country.

As of December 31, 2015, SNRE manages 142 residential properties in 11 states across the United States which includes a newly constructed apartment complex, Dry Creek at East Village, in Sandy Utah.

The following is a summary of the Company’s investment in residential real estate for the periods presented:

		Net Ending Balance
		December 31
		2015		2014
Arizona		$ 944,614		$ 1,156,808
California		6,158,253		8,119,757
Colorado		553,230		751,825
Florida		9,203,624		10,715,478
Idaho		-		276,321
Illinois		165,800		223,033
Louisiana		-		323,570
Mississippi		-		3,171
Nebraska		-		77,247
Oklahoma		99,862		198,486
Oregon		120,000		1,018,245
South Carolina		823,872		850,000
Texas		1,198,860		1,815,373
Utah		62,117,738	(1)	53,410,703	(2)
Washington		286,182		286,182
		$ 81,672,035		$ 79,226,199

(1) Includes Dry Creek at East Village - 274,000 square feet with a net book value of $36,676,404

(2) Includes Dry Creek at East Village - 74,000 square feet with a net book value of $22,855,164

Real Estate Owned and Occupied by the Company

The primary business units of the Company occupy a portion of the real estate owned by the Company. Currently, the Company occupies nearly 70,000 square feet, or 13% of the overall commercial real estate holdings.

As of December 31, 2015, real estate owned and occupied by the company is summarized as follows:

Location		Business Segment		Approximate Square Footage		Square Footage Occupied by the Company
5300 South 360 West, Salt Lake City, UT (1)		Corporate Offices, Life Insurance and Cemetery/Mortuary Operations		36,000		100%
5201 Green Street, Salt Lake City, UT		Mortgage Operations		36,899		34%
3935 I-55 South Frontage Road, Jackson, MS (1)		Life Insurance Operations		12,300		100%

(1) These two assets are included in property and equipment on the Consolidated Balance Sheet

Mortgage Loans

Mortgage loans consist of first and second mortgages. The mortgage loans bear interest at rates ranging from 2.0 % to 10.5%, maturity dates range from three months to 30 years and are secured by real estate. Concentrations of credit risk arise when a number of mortgage loan debtors have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions. Although the Company has a diversified mortgage loan portfolio consisting of residential mortgages, commercial loans and residential construction loans and requires collateral on all real estate exposures, a substantial portion of its debtors’ ability to honor obligations is reliant on the economic stability of the geographic region in which the debtors do business. At December 31, 2015, the Company has 51%, 14%, 10% and 8% of its mortgage loans from borrowers located in the states of Utah, California, Texas and Florida, respectively. The mortgage loans on real estate balances on the consolidated balance sheet are reflected net of an allowance for loan losses of $1,848,120 and $2,003,055 at December 31, 2015 and 2014, 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
Years Ended December 31

	Commercial		Residential		Residential Construction		Total
2015
Allowance for credit losses:
Beginning balance	$ 187,129		$ 1,715,812		$ 100,114		$ 2,003,055
Charge-offs	-		(123,942)		-		(123,942)
Provision	-		(30,993)		-		(30,993)
Ending balance	$ 187,129		$ 1,560,877		$ 100,114		$ 1,848,120

Ending balance: individually evaluated for impairment	$ -		$ 305,962		$ -		$ 305,962

Ending balance: collectively evaluated for impairment	$ 187,129		$ 1,254,915		$ 100,114		$ 1,542,158

Ending balance: loans acquired with deteriorated credit quality	$ -		$ -		$ -		$ -

Mortgage loans:
Ending balance	$ 33,522,978		$ 46,020,490		$ 34,851,557		$ 114,395,025

Ending balance: individually evaluated for impairment	$ -		$ 3,087,161		$ 93,269		$ 3,180,430

Ending balance: collectively evaluated for impairment	$ 33,522,978		$ 42,933,329		$ 34,758,287		$ 111,214,594

Ending balance: loans acquired with deteriorated credit quality	$ -		$ -		$ -		$ -

2014
Allowance for credit losses:
Beginning balance	$ 187,129		$ 1,364,847		$ 100,114		$ 1,652,090
Charge-offs	-		(38,444)		-		(38,444)
Provision	-		389,409		-		389,409
Ending balance	$ 187,129		$ 1,715,812		$ 100,114		$ 2,003,055

Ending balance: individually evaluated for impairment	$ -		$ 153,446		$ -		$ 153,446

Ending balance: collectively evaluated for impairment	$ 187,129		$ 1,562,366		$ 100,114		$ 1,849,609

Ending balance: loans acquired with deteriorated credit quality	$ -		$ -		$ -		$ -

Mortgage loans:
Ending balance	$ 35,388,756		$ 53,592,433		$ 33,071,938		$ 122,053,127

Ending balance: individually evaluated for impairment	$ -		$ 1,556,182		$ 414,499		$ 1,970,681

Ending balance: collectively evaluated for impairment	$ 35,388,756		$ 52,036,251		$ 32,657,439		$ 120,082,446

Ending balance: loans acquired with deteriorated credit quality	$ -		$ -		$ -		$ -

The following is a summary of the aging of mortgage loans for the periods presented.

Age Analysis of Past Due Mortgage Loans
Years Ended December 31

	30-59 Days Past Due	60-89 Days Past Due	Greater Than 90 Days 1)	In Foreclosure 1)	Total Past Due	Current	Total Mortgage Loans	Allowance for Loan Losses	Net Mortgage Loans
2015
Commercial	$ -	$ -	$ -	$ -	$ -	$ 33,522,978	$ 33,522,978	$ (187,129)	$ 33,335,849
Residential	1,162,102	884,143	2,212,993	3,087,161	7,346,399	38,674,091	46,020,490	(1,560,877)	44,459,613
Residential Construction	-	-	64,895	93,269	158,164	34,693,393	34,851,557	(100,114)	34,751,443

Total	$ 1,162,102	$ 884,143	$ 2,277,888	$ 3,180,430	$ 7,504,563	$ 106,890,462	$ 114,395,025	$ (1,848,120)	$ 112,546,905

2014
Commercial	$ -	$ -	$ -	$ -	$ -	$ 35,388,756	$ 35,388,756	$ (187,129)	$ 35,201,627
Residential	1,631,142	1,174,516	5,464,901	1,556,182	9,826,741	43,765,692	53,592,433	(1,715,812)	51,876,621
Residential Construction	-	-	64,895	414,499	479,394	32,592,544	33,071,938	(100,114)	32,971,824

Total	$ 1,631,142	$ 1,174,516	$ 5,529,796	$ 1,970,681	$ 10,306,135	$ 111,746,992	$ 122,053,127	$ (2,003,055)	$ 120,050,072

1) There was not any interest income recognized on loans past due greater than 90 days or in foreclosure.

Impaired Mortgage Loans

Impaired mortgage loans include loans with a related specific valuation allowance or loans whose carrying amount has been reduced to the expected collectible amount because the impairment has been considered other than temporary. The recorded investment in and unpaid principal balance of impaired loans along with the related loan specific allowance for losses, if any, for each reporting period and the average recorded investment and interest income recognized during the time the loans were impaired were as follows:

Impaired Loans
Years Ended December 31
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
2015
With no related allowance recorded:
Commercial	$ -		$ -		$ -		$ -		$ -
Residential	-		-		-		-		-
Residential construction	93,269		93,269		-		93,269		-

With an allowance recorded:
Commercial	$ -		$ -		$ -		$ -		$ -
Residential	3,087,161		3,087,161		305,962		3,087,161		-
Residential construction	-		-		-		-		-

Total:
Commercial	$ -		$ -		$ -		$ -		$ -
Residential	3,087,161		3,087,161		305,962		3,087,161		-
Residential construction	93,269		93,269		-		93,269		-

2014
With no related allowance recorded:
Commercial	$ -		$ -		$ -		$ -		$ -
Residential	-		-		-		-		-
Residential construction	414,499		414,499		-		414,499		-

With an allowance recorded:
Commercial	$ -		$ -		$ -		$ -		$ -
Residential	1,556,182		1,556,182		153,446		1,556,182		-
Residential construction	-		-		-		-		-

Total:
Commercial	$ -		$ -		$ -		$ -		$ -
Residential	1,556,182		1,556,182		153,446		1,556,182		-
Residential construction	414,499		414,499		-		414,499		-

Credit Risk Profile Based on Performance Status

The Company’s mortgage loan portfolio is monitored based on performance of the loans. Monitoring a mortgage loan increases when the loan is delinquent or earlier if there is an indication of impairment. The Company defines non-performing mortgage loans as loans 90 days or greater delinquent or on non-accrual status.

The Company’s performing and non-performing mortgage loans were as follows:

Mortgage Loan Credit Exposure
Credit Risk Profile Based on Payment Activity
Years Ended December 31

	Commercial				Residential				Residential Construction				Total
	2015		2014		2015		2014		2015		2014		2015		2014

Performing	$ 33,522,978		$ 35,388,756		$ 40,720,336		$ 46,571,350		$ 34,693,393		$ 32,592,544		$ 108,936,707		$ 114,552,650
Non-performing	-		-		5,300,154		7,021,083		158,164		479,394		5,458,318		7,500,477

Total	$ 33,522,978		$ 35,388,756		$ 46,020,490		$ 53,592,433		$ 34,851,557		$ 33,071,938		$ 114,395,025		$ 122,053,127

Non-Accrual Mortgage Loans

Once a loan is past due 90 days, it is the policy of the Company to end the accrual of interest income on the loan and write off any income that had been accrued. Interest not accrued on these loans totals $268,000 and $535,000 as of December 31, 2015 and 2014, respectively.

The following is a summary of mortgage loans on a non-accrual status for the periods presented.

	Mortgage Loans on Non-accrual Status
	Years Ended December 31
	2015		2014
Residential	$ 5,300,154		$ 7,021,083
Residential construction	158,164		479,394
Total	$ 5,458,318		$ 7,500,477

Principal Amounts Due

The amortized cost and contractual payments on mortgage loans on real estate and construction loans held for investment by category as of December 31, 2015 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		2016		2017-2020		Thereafter
Residential	$ 46,020,490		$ 5,018,321		$ 12,625,406		$ 28,376,763
Residential Construction	34,851,557		29,806,506		5,045,051		-
Commercial	33,522,978		22,884,669		7,983,293		2,655,017
Total	$ 114,395,025		$ 57,709,496		$ 25,653,750		$ 31,031,779

Loan Loss Reserve

When a repurchase demand is received from a third party investor, the relevant data is reviewed and captured so that an estimated future loss can be calculated. The key factors that are used in the estimated loss calculation are as follows: (i) lien position, (ii) payment status, (iii) claim type, (iv) unpaid principal balance, (v) interest rate, and (vi) validity of the demand. Other data is captured and is useful for management purposes; the actual estimated loss is generally based on these key factors. The Company conducts its own review upon the receipt of a repurchase demand. In many instances, the Company is able to resolve the issues relating to the repurchase demand by the third party investor without having to make any payments to the investor.

The following is a summary of the loan loss reserve which is included in other liabilities and accrued expenses:

		December 31
		2015		2014
Balance, beginning of period		$ 1,718,150		$ 5,506,532
Provisions for losses		6,295,043		3,053,403
Charge-offs and settlements		(5,207,293)		(6,841,785)
Balance, at December 31		$ 2,805,900		$ 1,718,150

The Company believes the loan loss reserve represents probable loan losses incurred as of the balance sheet date. Actual loan loss experience could change, in the near-term, from the established reserve based upon claims that could be asserted by third party investors. SecurityNational Mortgage believes there is potential to resolve any alleged claims by third party investors on acceptable terms. If SecurityNational Mortgage is unable to resolve such claims on acceptable terms, legal action may ensue. In the event of legal action by any third party investor, SecurityNational Mortgage believes it has significant defenses to any such action and intends to vigorously defend itself against such action.

- Definition

The entire disclosure for investments in certain debt and equity securities.

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