UTAH
|
87-0345941
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
5300 South 360 West, Suite 250 Salt Lake City, Utah
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84123
|
(Address of principal executive offices)
|
(Zip Code)
|
Registrant's telephone number, including area code:
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(801) 264-1060
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Title of each class
|
Name of each exchange on which registered
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Class A common stock, $2.00 Par Value
|
NASDAQ National Market
|
Class C common stock, $2.00 Par Value
|
None
|
Large accelerated filer [ ]
|
Accelerated filer [ ]
|
Nonaccelerated filer [ ]
|
Smaller reporting company [X]
|
(Do not check if a smaller reporting company)
|
Page
|
||
Part I
|
||
Item 1.
|
Business
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3
|
Item 2.
|
Properties
|
10
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Item 3.
|
Legal Proceedings
|
13
|
Item 4.
|
Mine Safety Disclosures
|
14
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Part II
|
||
Item 5.
|
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
15
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Item 6.
|
Selected Financial Data
|
17
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Item 7.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
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17
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Item 7A.
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Quantitative and Qualitative Disclosures About Market Risk
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30
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Item 8.
|
Financial Statements and Supplementary Data
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30
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Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
101
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Item 9A.
|
Controls and Procedures
|
101
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Item 9B.
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Other Information
|
102
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Part III
|
||
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
103
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Item 11.
|
Executive Compensation
|
107
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Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
118 |
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
119
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Item 14.
|
Principal Accounting Fees and Services
|
119
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Part IV
|
||
Item 15.
|
Exhibits, Financial Statement Schedules
|
119
|
2016
|
2015
|
2014
|
2013
|
2012
|
||||||||||||||||||||
Life Insurance | ||||||||||||||||||||||||
Policy/Cert Count as of December 31
|
531,775
|
(2
|
)
|
509,058
|
497,933
|
498,228
|
502,978
|
(1
|
)
|
|||||||||||||||
Insurance in force as of December 31 (omitted 000)
|
$
|
1,672,081
|
(2
|
)
|
$
|
2,862,803
|
$
|
2,763,496
|
$
|
2,828,470
|
$
|
2,913,419
|
(1
|
)
|
||||||||||
Premiums Collected (omitted 000)
|
$
|
65,220
|
(2
|
)
|
$
|
55,780
|
$
|
52,418
|
$
|
50,009
|
$
|
48,168
|
(1)
|
Includes coinsurance with Mothe Life Insurance Company and DLE Life Insurance Company.
|
(2)
|
Includes the acquisition of First Guaranty Insurance Company and the termination of the reinsurance assumed for Servicemembers' Group Life Insurance ("SGLI").
|
Age Nearest Birthday
|
Non‑Medical Limits
|
|||
0‑50
|
$
|
100,000
|
||
51‑up
|
Medical information
required (APS or exam)
|
2016
|
2015
|
2014
|
2013
|
2012
|
||||||||||||||||||
Annuities Policy/Cert Count as of December 31
|
21,364
|
(1
|
)
|
12,022
|
12,701
|
12,703
|
12,320
|
|||||||||||||||
Deposits Collected (omitted 000)
|
$
|
11,019
|
(1
|
)
|
$
|
8,069
|
$
|
8,010
|
$
|
7,281
|
$
|
6,777
|
(1)
|
Includes the acquisition of First Guaranty Insurance Company.
|
2016
|
2015
|
2014
|
2013
|
2012
|
||||||||||||||||
Accident and Health Policy/Cert Count as of December 31
|
4,761
|
5,185
|
5,838
|
6,451
|
7,291
|
|||||||||||||||
Premiums Collected (omitted 000)
|
$
|
113
|
$
|
119
|
$
|
133
|
$
|
144
|
$
|
158
|
City
|
State
|
Function
|
Owned Leased
|
Approximate
Square
Footage
|
Lease
Amount |
Expiration
|
|||||||||||||||||
5300 S. 360 W. |
Salt Lake City
|
UT
|
Corporate Headquarters
|
Owned
|
36,000
|
N/A
|
|||||||||||||||||
5201 S. Green Street
|
Salt Lake City
|
UT
|
Mortgage Operations
|
Owned
|
36,899
|
N/A
|
|||||||||||||||||
1044 River Oaks Dr.
|
Flowood
|
MS
|
Insurance Operations
|
Owned
|
21,521
|
N/A
|
|||||||||||||||||
5239 Greenpine Dr.
|
Murray
|
UT
|
Funeral Service Operations
|
Owned
|
1,642
|
N/A
|
|||||||||||||||||
351 N. 3rd St.
|
Ashdown
|
AR
|
Insurance Operations
|
Leased
|
4,200
|
$
|
1,757
|
/
|
mo
|
7/12/2017
|
|||||||||||||
497-A Sutton Bridge Rd.
|
Rainbow City
|
AL
|
Fast Funding Operations
|
Leased
|
5,500
|
$
|
33,600
|
/
|
yr
|
6/30/2018
|
|||||||||||||
9700 Stirling Rd., Suite 110
|
Cooper City
|
FL
|
Fast Funding Operations
|
Leased
|
1,018
|
$
|
63,600
|
/
|
yr
|
month to month
|
|||||||||||||
3515 Pelham Rd., Suite 200
|
Greenville
|
SC
|
Fast Funding Operations
|
Leased
|
4,000
|
$
|
4,643
|
/
|
mo
|
5/31/2018
|
|||||||||||||
2567 Mall Rd.
|
Florence
|
AL
|
Mortgage Sales
|
Sub-Leased
|
1,600
|
$
|
750
|
/
|
mo
|
month to month
|
|||||||||||||
16427 North Scottsdale Road
|
Scottsdale
|
AZ
|
Mortgage Sales
|
Leased
|
3,966
|
$
|
10,246
|
/
|
mo
|
2/29/2020
|
|||||||||||||
17015 N. Scottsdale Rd., Suite 125
|
Scottsdale
|
AZ
|
Mortgage Sales
|
Leased
|
6,070
|
$
|
13,025
|
/
|
mo
|
3/31/2017
|
|||||||||||||
17015 N. Scottsdale Rd., Suite 210
|
Scottsdale
|
AZ
|
Mortgage Sales
|
Leased
|
2,906
|
$
|
6,054
|
/
|
mo
|
3/31/2017
|
|||||||||||||
17015 N. Scottsdale Rd., Suite 340
|
Scottsdale
|
AZ
|
Mortgage Sales
|
Leased
|
1,900
|
$
|
3,958
|
/
|
mo
|
1/31/2019
|
|||||||||||||
8600 East Anderson Drive, Suite 240
|
Scottsdale
|
AZ
|
Mortgage Sales
|
Leased
|
3,756
|
$
|
8,138
|
/
|
mo
|
10/31/2019
|
|||||||||||||
1819 S. Dobson
|
Mesa
|
AZ
|
Mortgage Sales
|
Leased
|
2,397
|
$
|
1,381
|
/
|
mo
|
4/30/2017
|
|||||||||||||
5701 Talavi Blvd. Suite 155
|
Glendale
|
AZ
|
Mortgage Sales
|
Leased
|
2,214
|
$
|
4,428
|
/
|
mo
|
month to month
|
|||||||||||||
6751 N. Sunset Blvd.
|
Glendale
|
AZ
|
Mortgage Sales
|
Leased
|
3,431
|
$
|
6,576
|
/
|
mo
|
6/30/2018
|
|||||||||||||
2450 S. Gilbert Rd.
|
Chandler
|
AZ
|
Mortgage Sales
|
Leased
|
6,306
|
$
|
10,247
|
/
|
mo
|
2/28/2019
|
|||||||||||||
3100 W. Ray Rd.
|
Chandler
|
AZ
|
Mortgage Sales
|
Leased
|
1,000
|
$
|
949
|
/
|
mo
|
month to month
|
|||||||||||||
3435 South Demaree
|
Visalia
|
CA
|
Mortgage Sales
|
Leased
|
1,740
|
$
|
2,175
|
/
|
mo
|
4/30/2019
|
|||||||||||||
2333 San Ramon Vallue Blvd.
|
San Ramon
|
CA
|
Mortgage Sales
|
Leased
|
1,563
|
$
|
3,908
|
/
|
mo
|
5/30/2019
|
|||||||||||||
923 East Valley Blvd.
|
San Gabriel
|
CA
|
Mortgage Sales
|
Leased
|
820
|
$
|
1,400
|
/
|
mo
|
8/31/2017
|
|||||||||||||
3005 Douglas Blvd., Suite 100
|
Roseville
|
CA
|
Mortgage Sales
|
Leased
|
3,722
|
$
|
7,406
|
/
|
mo
|
4/14/2018
|
|||||||||||||
140 Gregory Lane
|
Pleasant Hill
|
CA
|
Mortgage Sales
|
Leased
|
3,125
|
$
|
3,244
|
/
|
mo
|
1/31/2019
|
|||||||||||||
140 Lake Ave., Suite 305
|
Pasadena
|
CA
|
Mortgage Sales
|
Leased
|
1,105
|
$
|
3,244
|
/
|
mo
|
3/31/2017
|
|||||||||||||
765 The City Dr., Suite 360
|
Orange
|
CA
|
Mortgage Sales
|
Leased
|
3,886
|
$
|
8,451
|
/
|
mo
|
8/31/2017
|
|||||||||||||
18625 Suter Blvd., Suite 300
|
Morgan Hill
|
CA
|
Mortgage Sales
|
Leased
|
2,255
|
$
|
2,660
|
/
|
mo
|
6/30/2018
|
|||||||||||||
750 University Ave.
|
Los Gatos
|
CA
|
Mortgage Sales
|
Leased
|
2,137
|
$
|
9,018
|
/
|
mo
|
4/30/2018
|
|||||||||||||
3643 East 4th Street, Suite A
|
Long Beach
|
CA
|
Mortgage Sales
|
Leased
|
1,250
|
$
|
2,060
|
/
|
mo
|
10/31/2017
|
|||||||||||||
3908 Hathaway Ave.
|
Long Beach
|
CA
|
Mortgage Sales
|
Leased
|
200
|
$
|
100
|
/
|
mo
|
month to month
|
|||||||||||||
13191 Crossroads Parkway
|
City of Ind.
|
CA
|
Mortgage Sales
|
Leased
|
2,569
|
$
|
5,954
|
/
|
mo
|
7/31/2020
|
|||||||||||||
5650 El Camino Real
|
Carlsbad
|
CA
|
Mortgage Sales
|
Leased
|
1,739
|
$
|
2,956
|
/
|
mo
|
10/31/2017
|
|||||||||||||
7100 E. Bellview Ave., Suite 301
|
Greenwood Village
|
CO
|
Mortgage Sales
|
Leased
|
2,549
|
$
|
2,929
|
/
|
mo
|
month to month
|
|||||||||||||
8480 E. Orchard Rd.
|
Greenwood Village
|
CO
|
Mortgage Sales
|
Leased
|
4,631
|
$
|
9,647
|
/
|
mo
|
2/28/2018
|
|||||||||||||
1120 West 122nd Ave.
|
Denver
|
CO
|
Mortgage Sales
|
Leased
|
5,238
|
$
|
5,250
|
/
|
mo
|
10/31/2021
|
|||||||||||||
14502 N. Dale Mabry Highway
|
Tampa
|
FL
|
Mortgage Sales
|
Leased
|
250
|
$
|
550
|
/
|
mo
|
month to month
|
|||||||||||||
4023 Armenia Ave.
|
Tampa
|
FL
|
Mortgage Sales
|
Leased
|
1,563
|
$
|
1,865
|
/
|
mo
|
4/30/2019
|
|||||||||||||
35190 US Highway N.
|
Palm
|
FL
|
Mortgage Sales
|
Leased
|
1,982
|
$
|
2,945
|
/
|
mo
|
2/28/2018
|
|||||||||||||
17 N. Summerlin Ave.
|
Orlando
|
FL
|
Mortgage Sales
|
Leased
|
1,400
|
$
|
3,328
|
/
|
mo
|
11/30/2018
|
|||||||||||||
5222 Andrus Ave.
|
Orlando
|
FL
|
Mortgage Sales
|
Leased
|
1,450
|
$
|
1,716
|
/
|
mo
|
12/31/2017
|
|||||||||||||
7575 Dr. Phillips Blvd., Suite 270
|
Orlando
|
FL
|
Mortgage Sales
|
Leased
|
1,844
|
$
|
5,292
|
/
|
mo
|
3/31/2018
|
|||||||||||||
3689 Tampa Rd.
|
Oldsmar
|
FL
|
Mortgage Sales
|
Leased
|
5,620
|
$
|
6,720
|
/
|
mo
|
3/31/2018
|
|||||||||||||
4947 Tamiami Trail N.
|
Naples
|
FL
|
Mortgage Sales
|
Leased
|
1,168
|
$
|
1,303
|
/
|
mo
|
11/30/2018
|
|||||||||||||
4732 US Highway 98 North
|
Lakeland
|
FL
|
Mortgage Sales
|
Leased
|
1,250
|
$
|
1,070
|
/
|
mo
|
5/30/2017
|
|||||||||||||
1145 TownPark Ave., Suite 2215
|
Lake Mary
|
FL
|
Mortgage Sales
|
Leased
|
9,390
|
$
|
14,775
|
/
|
mo
|
3/1/2020
|
|||||||||||||
1525 International Parkway
|
Lake Mary
|
FL
|
Mortgage Sales
|
Leased
|
2,862
|
$
|
5,128
|
/
|
mo
|
10/31/2019
|
|||||||||||||
4575 Via Royal, Suite 100
|
Ft Myers
|
FL
|
Mortgage Sales
|
Sub-Leased
|
2,631
|
$
|
500
|
/
|
mo
|
month to month
|
|||||||||||||
2500 N. Military Trail
|
Boca Raton
|
FL
|
Mortgage Sales
|
Leased
|
2,453
|
$
|
4,500
|
/
|
mo
|
7/14/2017
|
|||||||||||||
3030 McEver Rd.
|
Gainsville
|
GA
|
Mortgage Sales
|
Leased
|
300
|
$
|
839
|
/
|
mo
|
month to month
|
|||||||||||||
2250 Satellite Blvd.
|
Duluth
|
GA
|
Mortgage Sales
|
Leased
|
1,380
|
$
|
1,553
|
/
|
mo
|
1/31/2017
|
|||||||||||||
4520 Kuhui St.
|
Kapaa
|
HI
|
Mortgage Sales
|
Leased
|
750
|
$
|
1,025
|
/
|
mo
|
month to month
|
|||||||||||||
12 W. Main St.
|
Rexburg
|
ID
|
Mortgage Sales
|
Leased
|
800
|
$
|
800
|
/
|
mo
|
9/30/2017
|
|||||||||||||
9042 W. Barnes Dr.
|
Boise
|
ID
|
Mortgage Sales
|
Leased
|
1,568
|
$
|
2,090
|
/
|
mo
|
10/31/2018
|
|||||||||||||
7227 West Madison St.
|
Forest Park
|
IL
|
Mortgage Sales
|
Leased
|
1,800
|
$
|
2,100
|
/
|
mo
|
6/30/2017
|
|||||||||||||
30700 Telegraph Rd.
|
Bingham Farms
|
MI
|
Mortgage Sales
|
Leased
|
1,099
|
$
|
1,374
|
/
|
mo
|
3/31/2019
|
|||||||||||||
108 Sikes Place
|
Charlotte
|
NC
|
Mortgage Sales
|
Leased
|
275
|
$
|
875
|
/
|
mo
|
2/28/2017
|
|||||||||||||
10765 Double R Blvd.
|
Reno
|
NV
|
Mortgage Sales
|
Leased
|
4,214
|
$
|
8,639
|
/
|
mo
|
10/31/2021
|
|||||||||||||
1980 Festival Plaza Dr.
|
Las Vegas
|
NV
|
Mortgage Sales
|
Leased
|
12,866
|
$
|
39,884
|
/
|
mo
|
5/31/2021
|
|||||||||||||
4000 S. Eastern Ave., Suite 310
|
Las Vegas
|
NV
|
Mortgage Sales
|
Leased
|
2,750
|
$
|
54,450
|
/
|
yr
|
1/31/2020
|
|||||||||||||
6130 Elton Ave., Suite 223
|
Las Vegas
|
NV
|
Mortgage Sales
|
Leased
|
125
|
$
|
400
|
/
|
mo
|
month to month
|
|||||||||||||
9330 W. Sahara Ave., Suite 270
|
Las Vegas
|
NV
|
Mortgage Sales
|
Leased
|
2,681
|
$
|
4,101
|
/
|
mo
|
8/31/2018
|
|||||||||||||
2370 Corporate Circle, Suite 200
|
Henderson
|
NV
|
Mortgage Sales
|
Leased
|
10,261
|
$
|
184,855
|
/
|
yr
|
4/30/2020
|
|||||||||||||
1160 State Route 28
|
Millford
|
OH
|
Mortgage Sales
|
Leased
|
300
|
$
|
550
|
/
|
mo
|
month to month
|
|||||||||||||
999 Polaris Parkway
|
Columbus
|
OH
|
Mortgage Sales
|
Leased
|
1,751
|
$
|
1,642
|
/
|
mo
|
7/31/2018
|
|||||||||||||
11305 Reed Hartman Highway
|
Blue Ash
|
OH
|
Mortgage Sales
|
Leased
|
711
|
$
|
918
|
/
|
mo
|
5/31/2019
|
Street
|
City
|
State
|
Function
|
Owned Leased
|
Approximate
Square
Footage
|
Lease
Amount |
Expiration
|
||||||||||
2468 W. New Orleans
|
Broken Arrow
|
OK
|
Mortgage Sales
|
Leased
|
1,683
|
$
|
1,896
|
/
|
mo
|
12/31/2019
|
|||||||
10610 SE Washington
|
Portland
|
OR
|
Mortgage Sales
|
Leased
|
506
|
$
|
1,000
|
/
|
mo
|
month to month
|
|||||||
3311 NE MLK Jr Blvd., Suite 203
|
Portland
|
OR
|
Mortgage Sales
|
Leased
|
1,400
|
$
|
675
|
/
|
mo
|
month to month
|
|||||||
10365 SE Sunnyside Rd.
|
Clackamus
|
OR
|
Mortgage Sales
|
Leased
|
1,288
|
$
|
2,280
|
/
|
mo
|
11/30/2019
|
|||||||
1063 E. Montague Ave.
|
Charleston
|
SC
|
Mortgage Sales
|
Leased
|
2,334
|
$
|
3,404
|
/
|
mo
|
8/31/2020
|
|||||||
6263 Poplar Ave.
|
Memphis
|
TN
|
Mortgage Sales
|
Leased
|
1,680
|
$
|
2,380
|
/
|
mo
|
3/31/2019
|
|||||||
108 Stekola Ln.
|
Knoxville
|
TN
|
Mortgage Sales
|
Leased
|
1,100
|
$
|
1,200
|
/
|
mo
|
7/31/2018
|
|||||||
6640 Carothers Parkway
|
Franklin
|
TN
|
Mortgage Sales
|
Leased
|
3,229
|
$
|
3,902
|
/
|
mo
|
3/31/2020
|
|||||||
303 Germantown Bend Cove
|
Cordova
|
TN
|
Mortgage Sales
|
Leased
|
1,200
|
$
|
1,500
|
/
|
mo
|
3/31/2017
|
|||||||
8505 Technology Forest Place, Suite 304
|
Woodlands
|
TX
|
Mortgage Sales
|
Leased
|
1,250
|
$
|
2,900
|
/
|
mo
|
5/31/2018
|
|||||||
602 S Main Street, Suite 300
|
Weatherford
|
TX
|
Mortgage Sales
|
Sub-Leased
|
1,000
|
$
|
1,200
|
/
|
mo
|
5/31/2017
|
|||||||
52 Sugar Creek Center Blvd., Suite 150
|
Sugarland
|
TX
|
Mortgage Sales
|
Leased
|
1,788
|
$
|
3,497
|
/
|
mo
|
3/31/2020
|
|||||||
2526 N. Loop 1604 W., Suite 210
|
San Antonio
|
TX
|
Mortgage Sales
|
Leased
|
4,959
|
$
|
10,125
|
/
|
mo
|
11/30/2019
|
|||||||
1 Chisholm Trail Rd., Suite 210
|
Round Rock
|
TX
|
Mortgage Sales
|
Leased
|
3,402
|
$
|
3,331
|
/
|
mo
|
12/31/2017
|
|||||||
3027 Marina Bay Dr.
|
League City
|
TX
|
Mortgage Sales
|
Leased
|
2,450
|
$
|
2,016
|
/
|
mo
|
3/31/2020
|
|||||||
3027 Marina Bay Dr., Suite 110
|
League City
|
TX
|
Mortgage Sales
|
Leased
|
180
|
$
|
740
|
/
|
mo
|
3/31/2020
|
|||||||
120 West Village
|
Laredo
|
TX
|
Mortgage Sales
|
Leased
|
800
|
$
|
1,136
|
/
|
mo
|
4/30/2018
|
|||||||
7913 McPherson, Suite B
|
Laredo
|
TX
|
Mortgage Sales
|
Leased
|
1,200
|
$
|
1,400
|
/
|
mo
|
month to month
|
|||||||
1202 Lakeway Dr., Suite 12
|
Lakeway
|
TX
|
Mortgage Sales
|
Leased
|
1,192
|
$
|
2,145
|
/
|
mo
|
3/31/2018
|
|||||||
24668 Kingsland Blvd.
|
Katy
|
TX
|
Mortgage Sales
|
Leased
|
150
|
$
|
400
|
/
|
mo
|
month to month
|
|||||||
2877 Commercial Center Blvd.
|
Katy
|
TX
|
Mortgage Sales
|
Leased
|
250
|
$
|
2,000
|
/
|
mo
|
month to month
|
|||||||
1848 Norwood Plaza, Suite 205
|
Hurst
|
TX
|
Mortgage Sales
|
Sub-Leased
|
455
|
$
|
361
|
/
|
mo
|
month to month
|
|||||||
16350 Park Ten Place
|
Houston
|
TX
|
Mortgage Sales
|
Leased
|
3,397
|
$
|
7,077
|
/
|
mo
|
11/30/2018
|
|||||||
17347 Village Green Dr., Suite 102A
|
Houston
|
TX
|
Mortgage Sales
|
Sub-Leased
|
3,000
|
$
|
8,970
|
/
|
mo
|
month to month
|
|||||||
30417 5th St., Suite B
|
Fulshear
|
TX
|
Mortgage Sales
|
Sub-Leased
|
1,000
|
$
|
550
|
/
|
mo
|
month to month
|
|||||||
4936 Collinwood, Suite 110
|
Fort Worth
|
TX
|
Mortgage Sales
|
Leased
|
1,900
|
$
|
34,200
|
/
|
yr
|
month to month
|
|||||||
4100 Alpha Rd.
|
Farmers Branch
|
TX
|
Mortgage Sales
|
Leased
|
2,935
|
$
|
4,035
|
/
|
mo
|
3/31/2020
|
|||||||
1626 Lee Trevino
|
El Paso
|
TX
|
Mortgage Sales
|
Leased
|
8,400
|
$
|
7,059
|
mo
|
11/30/2019
|
||||||||
921 West New Hope Drive
|
Cedar Park
|
TX
|
Mortgage Sales
|
Subleased
|
880
|
$
|
1,000
|
/
|
mo
|
7/31/2017
|
|||||||
8700 Manchaca Rd., Suite 603
|
Austin
|
TX
|
Mortgage Sales
|
Sub-Leased
|
850
|
$
|
1,600
|
/
|
mo
|
7/31/2019
|
|||||||
9737 Great Hills Trail, Suite 150
|
Austin
|
TX
|
Mortgage Sales
|
Leased
|
11,717
|
$
|
15,378
|
/
|
mo
|
8/31/2024
|
|||||||
16801 Addison Rd.
|
Addison
|
TX
|
Mortgage Sales
|
Leased
|
4,662
|
$
|
3,011
|
/
|
mo
|
2/14/2018
|
|||||||
118 E. Vine St.
|
Tooele
|
UT
|
Mortgage Sales
|
Leased
|
1,000
|
$
|
849
|
/
|
mo
|
7/31/2017
|
|||||||
5965 So. Redwood Rd.
|
Taylorsville
|
UT
|
Mortgage Sales
|
Leased
|
2,000
|
$
|
600
|
/
|
mo
|
12/31/2017
|
|||||||
6575 S. Redwood Rd.
|
Taylorsville
|
UT
|
Mortgage Sales
|
Leased
|
3,323
|
$
|
4,638
|
/
|
mo
|
8/31/2019
|
|||||||
10437 S. 1300 W. | South Jordan | UT |
Mortgage Sales
|
Leased | 4,000 | $ | 7,800 | / | mo | 9/30/2019 | |||||||
126 West Sego Lily Dr.
|
Sandy
|
UT
|
Mortgage Sales
|
Leased
|
2,794
|
$
|
5,451
|
/
|
mo
|
8/31/2017
|
|||||||
9815 S. Monroe St.
|
Sandy
|
UT
|
Mortgage Sales
|
Leased
|
1,725
|
$
|
3,306
|
/
|
mo
|
9/30/2018
|
|||||||
9815 S. Monroe St., Suite 206
|
Sandy
|
UT
|
Mortgage Sales
|
Leased
|
2,819
|
$
|
5,286
|
/
|
mo
|
5/31/2018
|
|||||||
9980 S. 300 W., Suite 201
|
Sandy
|
UT
|
Mortgage Sales
|
Leased
|
100
|
$
|
1,819
|
/
|
mo
|
month to month
|
|||||||
1111 Brickyard Rd.
|
Salt Lake City
|
UT
|
Mortgage Sales
|
Leased
|
4,857
|
$
|
3,917
|
/
|
mo
|
1/31/2018
|
|||||||
5993 S. Redwood Rd.
|
Salt Lake City
|
UT
|
Mortgage Sales
|
Leased
|
2,880
|
$
|
2,375
|
/
|
mo
|
7/31/2021
|
|||||||
1224 S. River Rd., Suites E3 & E4
|
Saint George
|
UT
|
Mortgage Sales
|
Leased
|
1,900
|
$
|
1,814
|
/
|
mo
|
4/30/2018
|
|||||||
465 N. Main
|
Richfield
|
UT
|
Mortgage Sales
|
Leased
|
2,848
|
$
|
1,600
|
/
|
mo
|
month to month
|
|||||||
1245 Deer Valley Dr., Suite 3A
|
Park City
|
UT
|
Mortgage Sales
|
Leased
|
2,183
|
$
|
4,684
|
/
|
mo
|
12/31/2017
|
|||||||
730 South Sleepy Ridge Dr.
|
Orem
|
UT
|
Mortgage Sales
|
Leased
|
891
|
$
|
1,500
|
/
|
mo
|
10/31/2017
|
|||||||
5201 S. Green St.
|
Murray
|
UT
|
Mortgage Sales
|
Leased
|
10,990
|
$
|
13,456
|
/
|
mo
|
6/30/2017
|
|||||||
210 E. Main St.
|
Midway
|
UT
|
Mortgage Sales
|
Leased
|
1,600
|
$
|
1,850
|
/
|
mo
|
12/31/2018
|
|||||||
6965 S. Union Park, Stes 100, 260, 300, 460, 470, & 480
|
Midvale
|
UT
|
Mortgage Sales
|
Leased
|
37,226
|
$
|
74,098
|
/
|
mo
|
2/28/2018
|
|||||||
6975 Union Park Ave., Suite 420
|
Midvale
|
UT
|
Mortgage Sales
|
Leased
|
6,672
|
$
|
12,500
|
/
|
mo
|
6/30/2019
|
|||||||
1133 North Main St.
|
Layton
|
UT
|
Mortgage Sales
|
Subleased
|
300
|
$
|
500
|
/
|
mo
|
month to month
|
|||||||
288 SR 248, Suite 2A
|
Kamas
|
UT
|
Mortgage Sales
|
Leased
|
1,480
|
$
|
2,350
|
/
|
mo
|
month to month
|
|||||||
497 S. Main
|
Ephraim
|
UT
|
Mortgage Sales
|
Leased
|
953
|
$
|
765
|
/
|
mo
|
9/30/2017
|
|||||||
15640 NE Fourth Plain Blvd., Suite 220
|
Vancouver
|
WA
|
Mortgage Sales
|
Leased
|
360
|
$
|
1,190
|
/
|
mo
|
6/30/2017
|
|||||||
535 Dock St., Suite 100
|
Tacoma
|
WA
|
Mortgage Sales
|
Leased
|
3,825
|
$
|
5,620
|
/
|
mo
|
7/31/2018
|
|||||||
318 39th St. Ave. SW, Suite A
|
Puyallup
|
WA
|
Mortgage Sales
|
Leased
|
3,431
|
$
|
5,575
|
/
|
mo
|
11/30/2017
|
|||||||
11232 120th Ave. NE, Suite 206
|
Kirkland
|
WA
|
Mortgage Sales
|
Leased
|
500
|
$
|
350
|
/
|
mo
|
5/31/2017
|
|||||||
11314 4th Ave. W.
|
Everett
|
WA
|
Mortgage Sales
|
Leased
|
1,793
|
$
|
2,308
|
/
|
mo
|
10/31/2018
|
|||||||
1604 Hewitt Ave., Suite 703
|
Everett
|
WA
|
Mortgage Sales
|
Leased
|
2,038
|
$
|
4,650
|
/
|
mo
|
month to month
|
|||||||
5002 7th Ave.
|
Kenosha
|
WI
|
Mortgage Sales
|
Leased
|
1,450
|
$
|
1,200
|
/
|
mo
|
10/31/2019
|
Net Saleable Acreage
|
||||||
Name of Cemetery
|
Location
|
Date Acquired
|
Developed
Acreage (1)
|
Total
Acreage (1)
|
Acres Sold
as Cemetery
Spaces (2)
|
Total Available
Acreage (1)
|
Memorial Estates, Inc.
|
||||||
Lakeview Cemetery
|
1640 East Lakeview Drive
Bountiful, Utah |
1973
|
7
|
40
|
6
|
34
|
Mountain View Cemetery
|
3115 East 7800 South
Salt Lake City, Utah |
1973
|
17
|
54
|
16
|
38
|
Redwood Cemetery (4)
|
6500 South Redwood Road
West Jordan, Utah |
1973
|
34
|
78
|
30
|
48
|
Deseret Memorial Inc.
Lake Hills Cemetery (3)(6) |
||||||
Lake Hills Cemetery (3)
|
10055 South State Street
Sandy, Utah |
1991
|
9
|
28
|
4
|
24
|
Holladay Memorial Park, Inc.
|
||||||
Holladay Memorial Park (3)(4)
|
4900 South Memory Lane
Holladay, Utah |
1991
|
5
|
14
|
4
|
10
|
California Memorial Estates, Inc.
|
||||||
Singing Hills Memorial Park
|
2800 Dehesa Road
El Cajon, California |
1995
|
8
|
35
|
4
|
31
|
(1)
|
The acreage represents estimates of acres that are based upon survey reports, title reports, appraisal reports or the Company's inspection of the cemeteries.
|
|
(2)
|
Includes spaces sold for cash and installment contract sales.
|
|
(3)
|
As of December 31, 2016, there were mortgages of approximately $147,000 collateralized by the property and facilities at Deseret Mortuary, Cottonwood Mortuary, Holladay Memorial Park, and Lake Hills Cemetery.
|
|
(4)
|
These cemeteries include two granite mausoleums.
|
Date
|
Viewing
|
Square
|
|||
Name of Mortuary
|
Location
|
Acquired
|
Room(s)
|
Chapel(s)
|
Footage
|
Memorial Mortuary, Inc.
|
|||||
Memorial Mortuary
|
5850 South 900 East
|
||||
Murray, Utah
|
1973
|
3
|
1
|
20,000
|
|
Affordable Funerals and
Cremations, St. George |
157 East Riverside Dr., No. 3A
|
2016
|
1
|
1
|
2,360
|
St. George, Utah
|
|||||
Memorial Estates, Inc.
|
|||||
Redwood Mortuary(2)
|
6500 South Redwood Rd.
|
||||
West Jordan, Utah
|
1973
|
2
|
1
|
10,000
|
|
Mountain View Mortuary(2)
|
3115 East 7800 South
|
||||
Salt Lake City, Utah
|
1973
|
2
|
1
|
16,000
|
|
Lakeview Mortuary(2)
|
1640 East Lakeview Dr.
|
||||
Bountiful, Utah
|
1973
|
0
|
1
|
5,500
|
|
Deseret Memorial, Inc.
|
|||||
Deseret Mortuary(1)
|
36 East 700 South
|
||||
Salt Lake City, Utah
|
1991
|
2
|
2
|
36,300
|
|
Lakehills Mortuary(2)
|
10055 South State St.
|
||||
Sandy, Utah
|
1991
|
2
|
1
|
18,000
|
|
Cottonwood Mortuary, Inc.
|
|||||
Cottonwood Mortuary(1)(2)
|
4670 South Highland Dr.
|
||||
Holladay, Utah
|
1991
|
2
|
1
|
14,500
|
(1)
|
As of December 31, 2016, there were mortgages of approximately $147,000 collateralized by the property and facilities at Deseret Mortuary, Cottonwood Mortuary, Holladay Memorial Park and Lake Hills Cemetery.
|
(2)
|
These funeral homes also provide burial niches at their respective locations.
|
Price Range (1)
|
||||||||
High
|
Low
|
|||||||
Period (Calendar Year)
|
||||||||
2015
|
||||||||
First Quarter
|
$
|
5.66
|
$
|
4.82
|
||||
Second Quarter
|
$
|
6.34
|
$
|
4.75
|
||||
Third Quarter
|
$
|
7.38
|
$
|
5.90
|
||||
Fourth Quarter
|
$
|
6.20
|
$
|
5.34
|
||||
2016
|
||||||||
First Quarter
|
$
|
6.17
|
$
|
4.85
|
||||
Second Quarter
|
$
|
4.88
|
$
|
4.23
|
||||
Third Quarter
|
$
|
5.62
|
$
|
4.59
|
||||
Fourth Quarter
|
$
|
7.04
|
$
|
5.45
|
||||
2017
|
||||||||
First Quarter (through March 27, 2017)
|
$
|
7.30
|
$
|
6.24
|
(1) Sales prices have been adjusted retroactively for the effect of annual stock dividends.
|
12/31/11
|
12/31/12
|
12/31/13
|
12/31/14
|
12/31/15
|
12/31/16
|
|
SNFC
|
100
|
564
|
325
|
408
|
487
|
507
|
S & P 500
|
100
|
113
|
147
|
164
|
163
|
178
|
S & P Insurance
|
100
|
117
|
170
|
180
|
181
|
208
|
Years ended December 31
(in thousands of dollars) |
|||||||||||||||||||||
2016
|
2015
|
2016 vs 2015 % Increase (Decrease)
|
2014
|
2015 vs 2014 % Increase (Decrease)
|
|||||||||||||||||
Revenues from external customers
|
|||||||||||||||||||||
Insurance premiums
|
$
|
64,501
|
$
|
56,410
|
14
|
%
|
$
|
53,009
|
6
|
%
|
|||||||||||
Net investment income
|
28,618
|
25,297
|
13
|
%
|
23,008
|
10
|
%
|
||||||||||||||
Revenues from loan originations
|
2,401
|
2,474
|
(3
|
%)
|
4,029
|
(39
|
%)
|
||||||||||||||
Other
|
85
|
2,744
|
(97
|
%)
|
1,727
|
59
|
%
|
||||||||||||||
Total
|
$
|
95,605
|
$
|
86,925
|
10
|
%
|
$
|
81,773
|
6
|
%
|
|||||||||||
Intersegment revenue
|
$
|
7,120
|
$
|
7,615
|
(7
|
%)
|
$
|
6,128
|
24
|
%
|
|||||||||||
Earnings before income taxes
|
$
|
7,858
|
$
|
8,619
|
(9
|
%)
|
$
|
8,626
|
0
|
%
|
Years ended December 31
(in thousands of dollars)
|
||||||||||||||||||||
2016
|
2015
|
2016 vs 2015 % Increase (Decrease)
|
2014
|
2015 vs 2014 % Increase (Decrease)
|
||||||||||||||||
Revenues from external customers
|
||||||||||||||||||||
Mortuary revenues
|
$
|
4,848
|
$
|
4,628
|
5
|
%
|
$
|
4,801
|
(4
|
%)
|
||||||||||
Cemetery revenues
|
7,420
|
6,874
|
8
|
%
|
6,625
|
4
|
%
|
|||||||||||||
Realized gains on investments and other assets
|
211
|
387
|
(45
|
%)
|
586
|
(34
|
%)
|
|||||||||||||
Other
|
401
|
598
|
(33
|
%)
|
445
|
34
|
%
|
|||||||||||||
Total
|
$
|
12,880
|
$
|
12,487
|
3
|
%
|
$
|
12,457
|
0
|
%
|
||||||||||
Earnings before income taxes
|
$
|
1,219
|
$
|
914
|
33
|
%
|
$
|
663
|
38
|
%
|
Years ended December 31
(in thousands of dollars) |
||||||||||||||||||||
2016
|
2015
|
2016 vs 2015 % Increase (Decrease)
|
2014
|
2015 vs 2014 % Increase (Decrease)
|
||||||||||||||||
Revenues from external customers:
|
||||||||||||||||||||
Revenues from loan originations
|
$
|
146,465
|
$
|
134,832
|
9
|
%
|
$
|
100,917
|
34
|
%
|
||||||||||
Secondary gains from investors
|
34,677
|
34,211
|
1
|
%
|
21,862
|
56
|
%
|
|||||||||||||
Total
|
$
|
181,142
|
$
|
169,043
|
7
|
%
|
$
|
122,779
|
38
|
%
|
||||||||||
Earnings before income taxes
|
$
|
10,626
|
$
|
11,481
|
(7
|
%)
|
$
|
4,437
|
159
|
%
|
·
|
Failure to deliver original documents specified by the investor,
|
·
|
The existence of misrepresentation or fraud in the origination of the loan,
|
·
|
The loan becomes delinquent due to nonpayment during the first several months after it is sold,
|
·
|
Early pay-off of a loan, as defined by the agreements,
|
·
|
Excessive time to settle a loan,
|
·
|
Investor declines purchase, and
|
·
|
Discontinued product and expired commitment.
|
·
|
Research reasons for rejection,
|
·
|
Provide additional documents,
|
·
|
Request investor exceptions,
|
·
|
Appeal rejection decision to purchase committee, and
|
·
|
Commit to secondary investors.
|
·
|
For loans that have an active market, the Company uses the market price on the repurchase date.
|
·
|
For loans where there is no market but there is a similar product, the Company uses the market value for the similar product on the repurchase date.
|
·
|
For loans where no active market exists on the repurchase date, the Company determines that the unpaid principal balance best approximates the market value on the repurchase date, after considering the fair value of the underlying real estate collateral and estimated future cash flows.
|
-200 bps
|
-100 bps
|
+100 bps
|
+200 bps
|
|||||||||||||
Change in Market Value (in thousands)
|
$
|
28,572
|
$
|
13,491
|
$
|
(17,119
|
)
|
$
|
(30,069
|
)
|
Less than
1 year |
1-3 years
|
4-5 years
|
over
5 years |
Total
|
||||||||||||||||
Non-cancelable operating leases
|
$
|
6,556,093
|
$
|
7,857,212
|
$
|
534,151
|
$
|
37,438
|
$
|
14,984,894
|
||||||||||
Bank and other loans payable
|
101,177,574
|
37,668,543
|
4,502,845
|
8,791,717
|
152,140,679
|
|||||||||||||||
$
|
107,733,667
|
$
|
45,525,755
|
$
|
5,036,996
|
$
|
8,829,155
|
$
|
167,125,573
|
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
|
||
Page No.
|
||
Financial Statements:
|
||
Report of Independent Registered Public Accounting Firm
|
31
|
|
Consolidated Balance Sheets, December 31, 2016 and 2015 (As Restated)
|
32
|
|
Consolidated Statements of Earnings for the Years Ended December 31, 2016, 2015 and 2014 (As Restated)
|
34
|
|
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2016, 2015 and 2014 (As Restated)
|
35
|
|
Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2016, 2015 and 2014 (As Restated)
|
36
|
|
Consolidated Statements of Cash Flows for the Years Ended December 31, 2016, 2015 and 2014 (As Restated)
|
37
|
|
Notes to Consolidated Financial Statements (As Restated)
|
39
|
December 31
|
||||||||
Assets
|
2016
(As Restated) |
2015
(As Restated) |
||||||
Investments:
|
||||||||
Fixed maturity securities, held to maturity, at amortized cost
|
$
|
184,979,644
|
$
|
145,558,425
|
||||
Equity securities, available for sale, at estimated fair value
|
10,573,356
|
8,431,090
|
||||||
Mortgage loans on real estate and construction loans held for investment, net of allowances for loan losses of $1,748,783 and $1,848,120 for 2016 and 2015
|
149,181,578
|
112,546,905
|
||||||
Real estate held for investment, net of accumulated depreciation of $16,138,439 and $12,210,346 for 2016 and 2015
|
145,165,921
|
114,852,432
|
||||||
Policy loans and other investments, net of allowances for doubtful accounts of $1,119,630 and $906,616 for 2016 and 2015
|
40,937,146
|
39,582,421
|
||||||
Short-term investments
|
27,560,040
|
16,915,808
|
||||||
Accrued investment income
|
2,972,596
|
2,553,819
|
||||||
Total investments
|
561,370,281
|
440,440,900
|
||||||
Cash and cash equivalents
|
38,987,430
|
40,053,242
|
||||||
Loans held for sale
|
189,139,832
|
211,453,006
|
||||||
Receivables, net
|
6,373,364
|
6,060,994
|
||||||
Restricted assets
|
10,391,394
|
9,359,802
|
||||||
Cemetery perpetual care trust investments
|
4,131,885
|
2,848,759
|
||||||
Receivable from reinsurers
|
13,079,668
|
13,400,527
|
||||||
Cemetery land and improvements
|
10,672,836
|
10,780,996
|
||||||
Deferred policy and pre-need contract acquisition costs
|
69,118,745
|
59,004,909
|
||||||
Mortgage servicing rights, net
|
18,872,362
|
12,679,755
|
||||||
Property and equipment, net
|
8,791,522
|
11,441,660
|
||||||
Value of business acquired
|
7,570,300
|
8,743,773
|
||||||
Goodwill
|
2,765,570
|
2,765,570
|
||||||
Other
|
10,413,394
|
11,439,273
|
||||||
Total Assets
|
$
|
951,678,583
|
$
|
840,473,166
|
December 31
|
||||||||
Liabilities and Stockholders' Equity
|
2016
(As Restated) |
2015
(As Restated) |
||||||
Liabilities
|
||||||||
Future life, annuity, and other benefits
|
$
|
584,067,692
|
$
|
515,789,254
|
||||
Unearned premium reserve
|
4,469,771
|
4,737,305
|
||||||
Bank and other loans payable
|
152,140,679
|
131,005,614
|
||||||
Deferred pre-need cemetery and mortuary contract revenues
|
12,360,249
|
12,816,227
|
||||||
Cemetery perpetual care obligation
|
3,598,580
|
3,465,771
|
||||||
Accounts payable
|
4,213,109
|
3,502,046
|
||||||
Other liabilities and accrued expenses
|
33,950,503
|
31,027,381
|
||||||
Income taxes
|
24,318,869
|
20,412,889
|
||||||
Total liabilities
|
819,119,452
|
722,756,487
|
||||||
Stockholders' Equity
|
||||||||
Preferred Stock:
|
||||||||
Preferred stock - non-voting-$1.00 par value; 5,000,000 shares authorized; none issued or outstanding
|
-
|
-
|
||||||
Common Stock:
|
||||||||
Class A: common stock - $2.00 par value; 20,000,000 shares authorized; issued 13,819,006 shares in 2016 and 13,109,100 shares in 2015
|
27,638,012
|
26,218,200
|
||||||
Class B: non-voting common stock - $1.00 par value; 5,000,000 shares authorized; none issued or outstanding
|
-
|
-
|
||||||
Class C: convertible common stock - $2.00 par value; 3,000,000 shares authorized; issued 1,902,229 shares in 2016 and 1,709,640 shares in 2015
|
3,804,458
|
3,419,280
|
||||||
Additional paid-in capital
|
34,813,246
|
30,232,582
|
||||||
Accumulated other comprehensive income, net of taxes
|
264,822
|
(499,358
|
)
|
|||||
Retained earnings
|
67,409,204
|
60,525,404
|
||||||
Treasury stock, at cost - 704,122 Class A shares and -0- Class C shares in 2016; 930,546 Class A shares and -0- Class C shares in 2015
|
(1,370,611
|
)
|
(2,179,429
|
)
|
||||
Total stockholders' equity
|
132,559,131
|
117,716,679
|
||||||
Total Liabilities and Stockholders' Equity
|
$
|
951,678,583
|
$
|
840,473,166
|
Years Ended December 31
|
||||||||||||
2016
(As Restated) |
2015
(As Restated) |
2014
(As Restated) |
||||||||||
Revenues:
|
||||||||||||
Insurance premiums and other considerations
|
$
|
64,501,017
|
$
|
56,409,863
|
$
|
53,008,679
|
||||||
Net investment income
|
37,582,444
|
34,007,904
|
28,303,740
|
|||||||||
Net mortuary and cemetery sales
|
12,267,640
|
11,502,045
|
11,426,308
|
|||||||||
Realized gains on investments and other assets
|
(176,387
|
)
|
2,401,359
|
1,918,176
|
||||||||
Other than temporary impairments
|
(270,358
|
)
|
(605,430
|
)
|
(164,240
|
)
|
||||||
Mortgage fee income
|
183,542,796
|
171,517,284
|
126,807,473
|
|||||||||
Other
|
6,887,749
|
5,121,807
|
3,747,013
|
|||||||||
Total revenues
|
304,334,901
|
280,354,832
|
225,047,149
|
|||||||||
Benefits and expenses:
|
||||||||||||
Death benefits
|
31,033,222
|
31,158,281
|
27,100,278
|
|||||||||
Surrenders and other policy benefits
|
2,354,158
|
2,391,612
|
2,689,686
|
|||||||||
Increase in future policy benefits
|
21,322,195
|
17,057,764
|
17,905,914
|
|||||||||
Amortization of deferred policy and pre-need acquisition costs and value of business acquired
|
8,003,175
|
5,641,293
|
6,892,978
|
|||||||||
Selling, general and administrative expenses:
|
||||||||||||
Commissions
|
88,634,494
|
80,900,618
|
59,374,542
|
|||||||||
Personnel
|
70,254,479
|
60,860,275
|
49,360,406
|
|||||||||
Advertising
|
6,425,277
|
5,730,197
|
4,584,436
|
|||||||||
Rent and rent related
|
8,061,598
|
7,850,776
|
6,135,876
|
|||||||||
Depreciation on property and equipment
|
2,182,724
|
2,183,496
|
2,177,165
|
|||||||||
Provision for loan loss reserve
|
1,700,000
|
3,449,103
|
1,000,000
|
|||||||||
Costs related to funding mortgage loans
|
9,191,488
|
8,901,511
|
6,451,319
|
|||||||||
Other
|
28,569,949
|
26,954,378
|
22,800,066
|
|||||||||
Interest expense
|
5,111,868
|
4,458,612
|
2,994,429
|
|||||||||
Cost of goods and services sold – mortuaries and cemeteries
|
1,787,043
|
1,803,444
|
1,853,103
|
|||||||||
Total benefits and expenses
|
284,631,670
|
259,341,360
|
211,320,198
|
|||||||||
Earnings before income taxes
|
19,703,231
|
21,013,472
|
13,726,951
|
|||||||||
Income tax expense
|
(7,514,604
|
)
|
(7,662,031
|
)
|
(5,510,119
|
)
|
||||||
Net earnings
|
$
|
12,188,627
|
$
|
13,351,441
|
$
|
8,216,832
|
||||||
Net earnings per Class A equivalent common share (1)
|
$
|
0.82
|
$
|
0.92
|
$
|
0.59
|
||||||
Net earnings per Class A equivalent common share - assuming dilution(1)
|
$
|
0.81
|
$
|
0.89
|
$
|
0.57
|
||||||
Weighted average Class A equivalent common shares outstanding (1)
|
14,806,290
|
14,439,274
|
13,893,260
|
|||||||||
Weighted average Class A equivalent common shares outstanding-assuming dilution (1)
|
15,127,204
|
14,951,833
|
14,344,475
|
(1)
|
Earnings per share amounts have been adjusted retroactively for the effect of annual stock dividends. The weighted-average shares outstanding includes the weighted-average Class A common shares and the weighted-average Class C common shares determined on an equivalent Class A common stock basis. Class C common shares have been adjusted retroactively for the effect of the 1-for-10 reverse stock split that was approved by the stockholders in 2014. Net earnings per common share represent net earnings per equivalent Class A common share. Net earnings per Class C common share is $6.68, $7.99 and $5.48 per share for 2016, 2015 and 2014, respectively, and $6.19, $6.88 and $4.55 per share-assuming dilution for 2016, 2015 and 2014, respectively.
|
Years Ended December 31
|
||||||||||||
2016
(As Restated) |
2015
(As Restated) |
2014
(As Restated) |
||||||||||
Net earnings
|
$
|
12,188,627
|
$
|
13,351,441
|
$
|
8,216,832
|
||||||
Other comprehensive income:
|
||||||||||||
Changes in:
|
||||||||||||
Net unrealized gains on derivative instruments
|
6,490
|
10,628
|
16,433
|
|||||||||
Net unrealized gains (losses) on available for sale securities
|
757,690
|
(771,343
|
)
|
(65,848
|
)
|
|||||||
Other comprehensive gain (loss)
|
764,180
|
(760,715
|
)
|
(49,415
|
)
|
|||||||
Comprehensive income
|
$
|
12,952,807
|
$
|
12,590,726
|
$
|
8,167,417
|
Class A
Common Stock
|
Class C
Common Stock
|
Additional
Paid-in Capital
|
Accumulated
Other Comprehensive Income (Loss)
|
Retained
Earnings
|
Treasury
Stock
|
Total
|
||||||||||||||||||||||
Balance at January 1, 2014, (As Previously Reported)
|
$
|
23,614,574
|
$
|
2,660,382
|
$
|
23,215,875
|
$
|
310,772
|
$
|
40,574,211
|
$
|
(2,624,625
|
)
|
$
|
87,751,189
|
|||||||||||||
.
|
||||||||||||||||||||||||||||
Prior period adjustment (see Note 21)
|
-
|
-
|
-
|
-
|
6,405,271
|
-
|
6,405,271
|
|||||||||||||||||||||
Balance at January 1, 2014 (As Restated)
|
23,614,574
|
2,660,382
|
23,215,875
|
310,772
|
46,979,482
|
(2,624,625
|
)
|
94,156,460
|
||||||||||||||||||||
Net earnings (As Restated)
|
-
|
-
|
-
|
-
|
8,216,832
|
-
|
8,216,832
|
|||||||||||||||||||||
Other comprehensive loss
|
-
|
-
|
-
|
(49,415
|
)
|
-
|
-
|
(49,415
|
)
|
|||||||||||||||||||
Stock based compensation
|
-
|
-
|
391,220
|
-
|
-
|
391,220
|
||||||||||||||||||||||
Reverse stock split true up
|
-
|
30
|
-
|
-
|
(30
|
)
|
-
|
-
|
||||||||||||||||||||
Exercise of stock options
|
108,824
|
-
|
(34,800
|
)
|
-
|
-
|
-
|
74,024
|
||||||||||||||||||||
Sale of treasury stock
|
-
|
-
|
361,679
|
-
|
-
|
538,171
|
899,850
|
|||||||||||||||||||||
Stock dividends
|
1,190,040
|
132,767
|
1,997,147
|
-
|
(3,319,954
|
)
|
-
|
-
|
||||||||||||||||||||
Conversion Class C to Class A
|
5,042
|
(5,041
|
)
|
(2
|
)
|
-
|
1
|
-
|
-
|
|||||||||||||||||||
Balance at December 31, 2014, (As Restated)
|
24,918,480
|
2,788,138
|
25,931,119
|
261,357
|
51,876,331
|
(2,086,454
|
)
|
103,688,971
|
||||||||||||||||||||
Net earnings (As Restated)
|
-
|
-
|
-
|
-
|
13,351,441
|
-
|
13,351,441
|
|||||||||||||||||||||
Other comprehensive loss
|
-
|
-
|
-
|
(760,715
|
)
|
-
|
-
|
(760,715
|
)
|
|||||||||||||||||||
Stock based compensation
|
-
|
-
|
387,608
|
-
|
-
|
-
|
387,608
|
|||||||||||||||||||||
Exercise of stock options
|
47,922
|
483,304
|
(55,717
|
)
|
-
|
-
|
(441,832
|
)
|
33,677
|
|||||||||||||||||||
Sale of treasury stock
|
-
|
-
|
666,840
|
-
|
-
|
530,396
|
1,197,236
|
|||||||||||||||||||||
Purchase of treasury stock
|
-
|
-
|
-
|
-
|
-
|
(181,539
|
)
|
(181,539
|
)
|
|||||||||||||||||||
Stock dividends
|
1,248,966
|
150,670
|
3,302,732
|
-
|
(4,702,368
|
)
|
-
|
-
|
||||||||||||||||||||
Conversion Class C to Class A
|
2,832
|
(2,832
|
)
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||
Balance at December 31, 2015, (As Restated)
|
26,218,200
|
3,419,280
|
30,232,582
|
(499,358
|
)
|
60,525,404
|
(2,179,429
|
)
|
117,716,679
|
|||||||||||||||||||
Net earnings (As Restated)
|
-
|
-
|
-
|
-
|
12,188,627
|
-
|
12,188,627
|
|||||||||||||||||||||
Other comprehensive income
|
-
|
-
|
-
|
764,180
|
-
|
-
|
764,180
|
|||||||||||||||||||||
Stock based compensation
|
-
|
-
|
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 December 31, 2016, (As Restated)
|
$
|
27,638,012
|
$
|
3,804,458
|
$
|
34,813,246
|
$
|
264,822
|
$
|
67,409,204
|
$
|
(1,370,611
|
)
|
$
|
132,559,131
|
Years Ended December 31
|
||||||||||||
2016
(As Restated)
|
2015
(As Restated)
|
2014
(As Restated)
|
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net earnings
|
$
|
12,188,627
|
$
|
13,351,441
|
$
|
8,216,832
|
||||||
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
|
||||||||||||
Realized losses (gains) on investments and other assets
|
176,387
|
(2,401,359
|
)
|
(1,918,176
|
)
|
|||||||
Other than temporary impairments
|
270,358
|
605,430
|
164,240
|
|||||||||
Depreciation
|
5,579,259
|
5,023,985
|
4,389,472
|
|||||||||
Provision for loan losses and doubtful accounts
|
1,188,599
|
524,237
|
743,386
|
|||||||||
Amortization of premiums and discounts
|
653,761
|
269,681
|
238,687
|
|||||||||
Provision for deferred and other income taxes
|
6,130,644
|
4,826,010
|
3,856,456
|
|||||||||
Policy and pre-need acquisition costs deferred
|
(16,943,538
|
)
|
(13,061,573
|
)
|
(10,159,895
|
)
|
||||||
Policy and pre-need acquisition costs amortized
|
6,829,702
|
4,364,167
|
5,590,332
|
|||||||||
Value of business acquired amortized
|
1,173,473
|
1,277,126
|
1,302,646
|
|||||||||
Servicing asset at amortized cost, additions
|
(8,603,154
|
)
|
(6,217,551
|
)
|
(3,741,381
|
)
|
||||||
Amortization of mortgage servicing rights
|
2,410,547
|
1,372,543
|
750,735
|
|||||||||
Stock based compensation expense
|
343,577
|
387,608
|
391,220
|
|||||||||
Benefit plans funded with treasury stock
|
1,429,962
|
1,197,236
|
899,850
|
|||||||||
Loans originated for sale
|
(3,098,710,299
|
)
|
(2,861,404,239
|
)
|
(2,044,909,613
|
)
|
||||||
Proceeds from loans sold
|
3,246,127,714
|
2,933,300,742
|
2,102,740,825
|
|||||||||
Net gains on loans sold
|
(137,682,984
|
)
|
(131,130,447
|
)
|
(93,144,155
|
)
|
||||||
Change in assets and liabilities:
|
||||||||||||
Land and improvements held for sale
|
108,160
|
67,089
|
(216,512
|
)
|
||||||||
Future life and other benefits
|
17,989,595
|
15,078,397
|
13,930,657
|
|||||||||
Other operating assets and liabilities
|
(5,125,376
|
)
|
4,456,090
|
(1,589,164
|
)
|
|||||||
Net cash provided by (used in) operating activities
|
35,535,014
|
(28,113,387
|
)
|
(12,463,558
|
)
|
|||||||
Cash flows from investing activities:
|
||||||||||||
Securities held to maturity:
|
||||||||||||
Purchase - fixed maturity securities
|
(11,386,383
|
)
|
(22,604,453
|
)
|
(3,449,187
|
)
|
||||||
Calls and maturities - fixed maturity securities
|
15,343,488
|
11,952,402
|
11,850,864
|
|||||||||
Securities available for sale:
|
||||||||||||
Purchase - equity securities
|
(4,980,320
|
)
|
(9,336,175
|
)
|
(5,996,993
|
)
|
||||||
Sales - equity securities
|
4,523,034
|
6,559,555
|
3,851,664
|
|||||||||
Purchases of short-term investments
|
(18,228,912
|
)
|
(47,160,050
|
)
|
(18,587,022
|
)
|
||||||
Sales of short-term investments
|
12,943,083
|
57,188,522
|
3,663,246
|
|||||||||
Sales (purchases) of restricted assets
|
(981,433
|
)
|
(40,763
|
)
|
(2,628,764
|
)
|
||||||
Change in assets for perpetual care trusts
|
(1,215,778
|
)
|
(267,717
|
)
|
(230,921
|
)
|
||||||
Amount received for perpetual care trusts
|
132,809
|
59,053
|
140,587
|
|||||||||
Mortgage, policy, and other investments made
|
(469,593,661
|
)
|
(372,334,883
|
)
|
(286,974,069
|
)
|
||||||
Payments received for mortgage, policy, and other investments
|
446,242,429
|
371,254,833
|
267,763,998
|
|||||||||
Purchases of property and equipment
|
(3,566,511
|
)
|
(3,632,690
|
)
|
(1,520,443
|
)
|
||||||
Disposal of property and equipment
|
47,293
|
2,899,322
|
894,805
|
|||||||||
Purchases of real estate held for investment
|
(26,634,840
|
)
|
(16,725,475
|
)
|
(19,317,567
|
)
|
||||||
Sale of real estate held for investment
|
6,093,308
|
13,540,913
|
7,269,475
|
|||||||||
Cash received from reinsurance
|
-
|
24,020,215
|
13,553,864
|
|||||||||
Cash paid for purchase of subsidiaries, net of cash acquired
|
(4,328,520
|
)
|
-
|
(15,011,193
|
)
|
|||||||
Net cash provided by (used in) investing activities
|
(55,590,914
|
)
|
15,372,609
|
(44,727,656
|
)
|
Years Ended December 31
|
||||||||||||
2016
(As Restated)
|
2015
(As Restated)
|
2014
(As Restated)
|
||||||||||
Cash flows from financing activities:
|
||||||||||||
Annuity contract receipts
|
$
|
11,349,276
|
$
|
10,172,170
|
$
|
10,051,662
|
||||||
Annuity contract withdrawals
|
(13,620,998
|
)
|
(12,273,707
|
)
|
(14,519,563
|
)
|
||||||
Proceeds from stock options exercised
|
116,106
|
33,677
|
74,024
|
|||||||||
Purchase of treasury stock
|
-
|
(181,539
|
)
|
-
|
||||||||
Repayment of bank and other loans payable
|
(1,680,678
|
)
|
(1,967,197
|
)
|
(2,357,468
|
)
|
||||||
Proceeds from bank borrowings
|
14,500,950
|
13,873,157
|
13,115,348
|
|||||||||
Net change in warehouse line borrowings
|
8,325,432
|
12,282,139
|
43,479,367
|
|||||||||
Net cash provided by financing activities
|
18,990,088
|
21,938,700
|
49,843,370
|
|||||||||
Net change in cash and cash equivalents
|
(1,065,812
|
)
|
9,197,922
|
(7,347,844
|
)
|
|||||||
Cash and cash equivalents at beginning of year
|
40,053,242
|
30,855,320
|
38,203,164
|
|||||||||
Cash and cash equivalents at end of year
|
$
|
38,987,430
|
$
|
40,053,242
|
$
|
30,855,320
|
||||||
Supplemental Disclosure of Cash Flow Information:
|
||||||||||||
Cash paid during the year for:
|
||||||||||||
Interest (net of amount capitalized)
|
$
|
5,119,459
|
$
|
4,347,062
|
$
|
2,901,492
|
||||||
Income taxes
|
2,667,918
|
2,716,161
|
408,939
|
|||||||||
Non Cash Investing and Financing Activities:
|
||||||||||||
Transfer of loans held for sale to mortgage loans held for investment
|
$
|
12,578,743
|
$
|
-
|
$
|
2,282,899
|
||||||
Accrued real estate construction costs and retainage
|
7,358,922
|
-
|
-
|
|||||||||
Mortgage loans foreclosed into real estate
|
2,075,714
|
3,246,712
|
981,820
|
|||||||||
See Note 19 regarding non cash transactions included in the acquisitions of First Guaranty Insurance Company and American Funeral Financial.
|
·
|
Failure to deliver original documents specified by the investor,
|
·
|
The existence of misrepresentation or fraud in the origination of the loan,
|
·
|
The loan becomes delinquent due to nonpayment during the first several months after it is sold,
|
·
|
Early pay-off of a loan, as defined by the agreements,
|
·
|
Excessive time to settle a loan,
|
·
|
Investor declines purchase, and
|
·
|
Discontinued product and expired commitment.
|
·
|
Research reasons for rejection,
|
·
|
Provide additional documents,
|
·
|
Request investor exceptions,
|
·
|
Appeal rejection decision to purchase committee, and
|
·
|
Commit to secondary investors.
|
·
|
For loans that have an active market the Company uses the market price on the repurchased date.
|
·
|
For loans where there is no market but there is a similar product, the Company uses the market value for the similar product on the repurchased date.
|
·
|
For loans where no active market exists on the repurchased date, the Company determines that the unpaid principal balance best approximates the market value on the repurchased date, after considering the fair value of the underlying real estate collateral and estimated future cash flows.
|
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
|
$
|
10,985,338
|
$
|
447,110
|
$
|
(859,092
|
)
|
$
|
10,573,356
|
|||||||
Total securities available for sale carried at estimated fair value
|
$
|
10,985,338
|
$
|
447,110
|
$
|
(859,092
|
)
|
$
|
10,573,356
|
|||||||
Mortgage loans on real estate and construction loans held for investment at amortized cost:
|
||||||||||||||||
Residential
|
$
|
58,593,622
|
||||||||||||||
Residential construction
|
40,800,117
|
|||||||||||||||
Commercial
|
51,536,622
|
|||||||||||||||
Less: Allowance for loan losses
|
(1,748,783
|
)
|
||||||||||||||
Total mortgage loans on real estate and construction loans held for investment
|
$
|
149,181,578
|
||||||||||||||
Real estate held for investment - net of depreciation
|
$
|
145,165,921
|
||||||||||||||
Policy loans and other investments are shown at amortized cost except for other investments that are shown at estimated fair value:
|
||||||||||||||||
Policy loans
|
$
|
6,694,148
|
||||||||||||||
Insurance assignments
|
33,548,079
|
|||||||||||||||
Promissory notes
|
48,797
|
|||||||||||||||
Other investments at estimated fair value
|
1,765,752
|
|||||||||||||||
Less: Allowance for doubtful accounts
|
(1,119,630
|
)
|
||||||||||||||
Total policy loans and other investments
|
$
|
40,937,146
|
||||||||||||||
Short-term investments at amortized cost
|
$
|
27,560,040
|
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
|
$
|
213,684
|
$
|
(1,674,094
|
)
|
$
|
8,431,090
|
|||||||
Total securities available for sale carried at estimated fair value
|
$
|
9,891,500
|
$
|
213,684
|
$
|
(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 loans and other investments are shown at amortized cost except for other investments that are shown at estimated fair value:
|
||||||||||||||||
Policy loans
|
$
|
6,896,457
|
||||||||||||||
Insurance assignments
|
32,369,014
|
|||||||||||||||
Promissory notes
|
48,797
|
|||||||||||||||
Other investments at estimated fair value
|
1,174,769
|
|||||||||||||||
Less: Allowance for doubtful accounts
|
(906,616
|
)
|
||||||||||||||
Total policy loans and other investments
|
$
|
39,582,421
|
||||||||||||||
Short-term investments at amortized cost
|
$
|
16,915,808
|
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 Obligationsof 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
|
||||||||||||
At December 31, 2015
|
||||||||||||||||||||||||
U.S. Treasury Securities and Obligations of U.S. Government Agencies
|
$
|
4,743
|
$
|
2,191,782
|
$
|
-
|
$
|
-
|
$
|
4,743
|
$
|
2,191,782
|
||||||||||||
Obligations of States and Political Subdivisions
|
-
|
-
|
1,040
|
86,388
|
1,040
|
86,388
|
||||||||||||||||||
Corporate Securities
|
3,701,572
|
30,109,114
|
1,800,171
|
3,723,569
|
5,501,743
|
33,832,683
|
||||||||||||||||||
Mortgage and other asset-backed securities
|
75,580
|
1,775,505
|
-
|
-
|
75,580
|
1,775,505
|
||||||||||||||||||
Total unrealized losses
|
$
|
3,781,895
|
$
|
34,076,401
|
$
|
1,801,211
|
$
|
3,809,957
|
$
|
5,583,106
|
$
|
37,886,358
|
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, 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
|
||||||||||||||
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
|
Amortized
|
Estimated Fair
|
|||||||
Cost
|
Value
|
|||||||
Held to Maturity:
|
||||||||
Due in 2017
|
$
|
6,148,334
|
$
|
6,232,674
|
||||
Due in 2018 through 2021
|
42,886,637
|
44,879,897
|
||||||
Due in 2022 through 2026
|
42,090,383
|
43,288,035
|
||||||
Due after 2026
|
83,742,572
|
87,324,617
|
||||||
Mortgage-backed securities
|
9,488,083
|
9,488,473
|
||||||
Redeemable preferred stock
|
623,635
|
637,053
|
||||||
Total held to maturity
|
$
|
184,979,644
|
$
|
191,850,749
|
Estimated Fair
|
||||||||
Cost
|
Value
|
|||||||
Available for Sale:
|
||||||||
Common stock
|
$
|
10,985,338
|
$
|
10,573,356
|
||||
Total available for sale
|
$
|
10,985,338
|
$
|
10,573,356
|
2016
|
2015
|
2014
|
||||||||||
Fixed maturity securities held
|
||||||||||||
to maturity:
|
||||||||||||
Gross realized gains
|
$
|
389,558
|
$
|
387,162
|
$
|
390,203
|
||||||
Gross realized losses
|
(132,124
|
)
|
(82,166
|
)
|
(71,800
|
)
|
||||||
Other than temporary impairments
|
(100,000
|
)
|
(120,000
|
)
|
(120,000
|
)
|
||||||
Securities available for sale:
|
||||||||||||
Gross realized gains
|
221,817
|
180,602
|
349,207
|
|||||||||
Gross realized losses
|
(61,242
|
)
|
(66,850
|
)
|
(55,222
|
)
|
||||||
Other than temporary impairments
|
(170,358
|
)
|
(293,714
|
)
|
(44,240
|
)
|
||||||
Other assets:
|
||||||||||||
Gross realized gains
|
349,252
|
2,067,438
|
1,445,596
|
|||||||||
Gross realized losses
|
(943,648
|
)
|
(84,827
|
)
|
(139,808
|
)
|
||||||
Other than temporary impairments
|
-
|
(191,716
|
)
|
-
|
||||||||
Total
|
$
|
(446,745
|
)
|
$
|
1,795,929
|
$
|
1,753,936
|
2016
|
2015
|
2014
|
||||||||||
Fixed maturity securities
|
$
|
8,972,877
|
$
|
8,168,441
|
$
|
8,229,451
|
||||||
Equity securities
|
270,942
|
269,795
|
212,917
|
|||||||||
Mortgage loans on real estate
|
8,963,105
|
7,696,533
|
7,550,110
|
|||||||||
Real estate
|
10,969,828
|
9,454,567
|
8,433,895
|
|||||||||
Policy loans
|
781,188
|
749,917
|
741,220
|
|||||||||
Insurance assignments
|
11,876,836
|
8,915,655
|
7,324,964
|
|||||||||
Other investments
|
25,122
|
6,533
|
-
|
|||||||||
Short-term investments, principally gains on sale of mortgage loans
|
4,976,180
|
7,594,014
|
5,072,418
|
|||||||||
Gross investment income
|
46,836,078
|
42,855,455
|
37,564,975
|
|||||||||
Investment expenses
|
(9,253,634
|
)
|
(8,847,551
|
)
|
(9,261,235
|
)
|
||||||
Net investment income
|
$
|
37,582,444
|
$
|
34,007,904
|
$
|
28,303,740
|
Net Ending Balance
|
Total Square Footage
|
|||||||||||||||||
December 31
|
December 31
|
|||||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||||
Arizona
|
$
|
450,538
|
(1
|
)
|
$
|
463,774
|
(1
|
)
|
16,270
|
16,270
|
||||||||
Arkansas
|
100,369
|
-
|
3,200
|
-
|
||||||||||||||
Kansas
|
12,450,297
|
11,537,335
|
222,679
|
222,679
|
||||||||||||||
Louisiana
|
518,700
|
-
|
7,063
|
-
|
||||||||||||||
Mississippi
|
3,818,985
|
-
|
33,821
|
-
|
||||||||||||||
New Mexico
|
7,000
|
(1
|
)
|
7,000
|
(1
|
)
|
-
|
-
|
||||||||||
Texas
|
3,734,974
|
3,768,542
|
23,470
|
23,470
|
||||||||||||||
Utah
|
47,893,073
|
(2
|
)
|
17,403,746
|
433,244
|
253,244
|
||||||||||||
$
|
68,973,936
|
$
|
33,180,397
|
739,747
|
515,663
|
|||||||||||||
(1) Includes Vacant Land
|
||||||||||||||||||
(2) Includes 53rd Center to be completed in July 2017.
|
Net Ending Balance
|
||||||||
December 31
|
||||||||
2016
|
2015
|
|||||||
Arizona
|
$
|
742,259
|
$
|
944,614
|
||||
California
|
5,848,389
|
6,158,253
|
||||||
Colorado
|
364,489
|
553,230
|
||||||
Florida
|
8,327,355
|
9,203,624
|
||||||
Illinois
|
-
|
165,800
|
||||||
Oklahoma
|
46,658
|
99,862
|
||||||
Oregon
|
-
|
120,000
|
||||||
South Carolina
|
-
|
823,872
|
||||||
Texas
|
1,091,188
|
1,198,860
|
||||||
Utah
|
59,485,466
|
62,117,738
|
||||||
Washington
|
286,181
|
286,182
|
||||||
$
|
76,191,985
|
$
|
81,672,035
|
Location
|
Business Segment
|
Approximate Square Footage
|
Square Footage Occupied by the Company
|
|||
5300 South 360 West, Salt Lake City, UT (1)
|
Corporate Offices, Life Insurance and Cemetery/Mortuary Operations
|
36,000
|
100%
|
|||
5201 Green Street, Salt Lake City, UT
|
Mortgage Operations
|
36,899
|
34%
|
|||
1044 River Oaks Dr., Flowood, MS
|
Life Insurance Operations
|
5,522
|
27%
|
|||
(1) This asset is included in property and equipment on the Consolidated Balance Sheet
|
Allowance for Credit Losses and Recorded Investment in Mortgage Loans
|
||||||||||||||||
Years Ended December 31
|
||||||||||||||||
Commercial
|
Residential
|
Residential Construction
|
Total
|
|||||||||||||
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
|
||||||||
Ending balance: loans acquired with deteriorated credit quality
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
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
|
||||||||
Ending balance: loans acquired with deteriorated credit quality
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
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
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
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 Process of Foreclosure 1)
|
Total Past Due
|
Current
|
Total Mortgage Loans
|
Allowance for Loan Losses
|
Net Mortgage Loans
|
||||||||||||||||||||||||||||
2016
|
||||||||||||||||||||||||||||||||||||
Commercial
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
202,992
|
$
|
202,992
|
$
|
51,333,630
|
$
|
51,536,622
|
$
|
(187,129
|
)
|
$
|
51,349,493
|
|||||||||||||||||
Residential
|
964,960
|
996,779
|
1,290,355
|
1,626,183
|
4,878,277
|
53,715,345
|
58,593,622
|
(1,461,540
|
)
|
57,132,082
|
||||||||||||||||||||||||||
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
|
)
|
$
|
149,181,578
|
|||||||||||||||||
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
|
|||||||||||||||||
1) There was not any interest income recognized on loans past due greater than 90 days or in foreclosure.
|
Impaired Loans
|
||||||||||||||||||||
Years Ended December 31
|
||||||||||||||||||||
Recorded
Investment
|
Unpaid
Principal
Balance
|
Related
Allowance
|
Average
Recorded
Investment
|
Interest
Income
Recognized
|
||||||||||||||||
2016
|
||||||||||||||||||||
With no related allowance recorded:
|
||||||||||||||||||||
Commercial
|
$
|
202,992
|
$
|
202,992
|
$
|
-
|
$
|
202,992
|
$
|
-
|
||||||||||
Residential
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Residential construction
|
64,895
|
64,895
|
-
|
64,895
|
-
|
|||||||||||||||
With an allowance recorded:
|
||||||||||||||||||||
Commercial
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||
Residential
|
2,916,538
|
2,916,538
|
374,501
|
2,916,538
|
-
|
|||||||||||||||
Residential construction
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Total:
|
||||||||||||||||||||
Commercial
|
$
|
202,992
|
$
|
202,992
|
$
|
-
|
$
|
202,992
|
$
|
-
|
||||||||||
Residential
|
2,916,538
|
2,916,538
|
374,501
|
2,916,538
|
-
|
|||||||||||||||
Residential construction
|
64,895
|
64,895
|
-
|
64,895
|
-
|
|||||||||||||||
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
|
-
|
Mortgage Loan Credit Exposure
|
||||||||||||||||||||||||||||||||
Credit Risk Profile Based on Payment Activity
|
||||||||||||||||||||||||||||||||
Years Ended December 31
|
||||||||||||||||||||||||||||||||
Commercial
|
Residential
|
Residential Construction
|
Total
|
|||||||||||||||||||||||||||||
2016
|
2015
|
2016
|
2015
|
2016
|
2015
|
2016
|
2015
|
|||||||||||||||||||||||||
Performing
|
$
|
51,333,630
|
$
|
33,522,978
|
$
|
55,677,084
|
$
|
40,720,336
|
$
|
40,735,222
|
$
|
34,693,393
|
$
|
147,745,936
|
$
|
108,936,707
|
||||||||||||||||
Non-performing
|
202,992
|
-
|
2,916,538
|
5,300,154
|
64,895
|
158,164
|
3,184,425
|
5,458,318
|
||||||||||||||||||||||||
Total
|
$
|
51,536,622
|
$
|
33,522,978
|
$
|
58,593,622
|
$
|
46,020,490
|
$
|
40,800,117
|
$
|
34,851,557
|
$
|
150,930,361
|
$
|
114,395,025
|
Mortgage Loans on Non-accrual Status
|
||||||||
Years Ended
December 31
|
||||||||
2016
|
2015
|
|||||||
Commercial
|
$
|
202,992
|
$
|
-
|
||||
Residential
|
2,916,538
|
5,300,154
|
||||||
Residential construction
|
64,895
|
158,164
|
||||||
Total
|
$
|
3,184,425
|
$
|
5,458,318
|
Principal
|
Principal
|
Principal
|
||||||||||||||
Amounts
|
Amounts
|
Amounts
|
||||||||||||||
Due in
|
Due in
|
Due
|
||||||||||||||
Total
|
2017
|
2018-2021
|
Thereafter
|
|||||||||||||
Residential
|
$
|
58,593,622
|
$
|
6,115,360
|
$
|
11,916,728
|
$
|
40,561,534
|
||||||||
Residential Construction
|
40,800,117
|
32,504,143
|
8,295,974
|
-
|
||||||||||||
Commercial
|
51,536,622
|
26,697,442
|
20,682,311
|
4,156,869
|
||||||||||||
Total
|
$
|
150,930,361
|
$
|
65,316,945
|
$
|
40,895,013
|
$
|
44,718,403
|
December 31
|
||||||||
2016
(As Restated) |
2015
(As Restated) |
|||||||
Balance, beginning of period
|
$
|
2,805,900
|
$
|
1,718,150
|
||||
Provision for current loan originations (1)
|
2,988,754
|
2,845,940
|
||||||
Additional provision for loan loss reserve
|
1,700,000
|
3,449,103
|
||||||
Charge-offs and settlements
|
(6,866,921
|
)
|
(5,207,293
|
)
|
||||
Balance, at December 31
|
$
|
627,733
|
$
|
2,805,900
|
||||
(1) Included in Mortgage fee income
|
December 31
|
||||||||
2016
(As Restated) |
2015
(As Restated) |
|||||||
Trade contracts
|
$
|
3,482,175
|
$
|
2,890,489
|
||||
Receivables from sales agents
|
4,016,393
|
3,280,423
|
||||||
Held in Escrow – Southern Security
|
107,388
|
245,088
|
||||||
Other
|
1,122,890
|
1,345,690
|
||||||
Total receivables
|
8,728,846
|
7,761,690
|
||||||
Allowance for doubtful accounts
|
(2,355,482
|
)
|
(1,700,696
|
)
|
||||
Net receivables
|
$
|
6,373,364
|
$
|
6,060,994
|
December 31
|
||||||||
2016
|
2015
|
|||||||
Balance at beginning of year
|
$
|
8,743,773
|
$
|
8,547,627
|
||||
Value of business acquired
|
-
|
1,473,272
|
||||||
Imputed interest at 7%
|
45,762
|
590,108
|
||||||
Amortization
|
(1,219,235
|
)
|
(1,867,234
|
)
|
||||
Net amortization charged to income
|
(1,173,473
|
)
|
(1,277,126
|
)
|
||||
Balance at end of year
|
$
|
7,570,300
|
$
|
8,743,773
|
December 31
|
||||||||
2016
|
2015
|
|||||||
Balance at beginning of year
|
$
|
2,765,570
|
$
|
2,765,570
|
||||
Goodwill acquired
|
-
|
-
|
||||||
Other
|
-
|
-
|
||||||
Balance at end of year
|
$
|
2,765,570
|
$
|
2,765,570
|
December 31
|
||||||||
2016
|
2015
|
|||||||
Land and buildings
|
$
|
9,155,665
|
$
|
13,126,195
|
||||
Furniture and equipment
|
19,548,521
|
16,613,862
|
||||||
28,704,186
|
29,740,057
|
|||||||
Less accumulated depreciation
|
(19,912,664
|
)
|
(18,298,397
|
)
|
||||
Total
|
$
|
8,791,522
|
$
|
11,441,660
|
December 31
|
||||||||
2016
(As Restated) |
2015
(As Restated) |
|||||||
1.65% above the monthly LIBOR rate (0.625% at December 31, 2016) note 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.
|
$
|
147,346
|
$
|
312,240
|
||||
Mark to market of interest rate swaps (discussed below) adjustment
|
3,308
|
13,947
|
||||||
6.50% note payable in monthly installments of $1,702 including principal and interest, collateralized by real property with a book value of approximately $278,000, due October 2041.
|
251,072
|
-
|
||||||
2.25% above the monthly LIBOR rate (0.625% at December 31, 2016) 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
$4,564,000, due October 2021. |
3,133,787
|
3,260,266
|
||||||
3.85% note payable in monthly installments of $86,059 including principal and interest, collateralized by shares of Security National Life Insurance Company stock, due January 2018.
|
1,093,349
|
2,062,512
|
||||||
4.27% 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.
|
2,904,354
|
-
|
||||||
4.40% note payable in monthly installments of $46,825 including principal and interest, collateralized by real property with a book value of approximately $12,060,000, due January 2026.
|
7,927,526
|
8,135,438
|
||||||
4.329% note payable in monthly installments of $9,775 including principal and interest, collateralized by real property with a book value of approximately $3,048,000, due September 2025.
|
1,992,056
|
2,020,993
|
||||||
2.5% above the monthly LIBOR rate (0.625% at December 31, 2016) plus 1/16th of the monthly LIBOR rate construction loan payable, collateralized by real property with a book value of approximately $31,835,000, due August 2019.
|
8,777,941
|
-
|
||||||
2.60% above 90 day LIBOR rate (0.99789% at December 31, 2016) note payable in monthly installments of approximately $123,800, collateralized by real property with a book value of approximately $35,798,000, due October 2019.
|
27,377,114
|
24,933,346
|
||||||
1 month LIBOR rate (0.625% at December 31, 2016) plus 3% loan purchase agreement with a warehouse line availability of $100,000,000, matures June 2018
|
76,843,180
|
61,302,069
|
||||||
1 month LIBOR rate (0.625% at December 31, 2016) plus 3% loan purchase agreement with a warehouse line availability of $100,000,000, matures September 2017
|
21,578,951
|
28,794,630
|
||||||
Other collateralized bank loans payable
|
109,734
|
169,212
|
||||||
Other notes payable
|
961
|
961
|
||||||
Total bank and other loans
|
152,140,679
|
131,005,614
|
||||||
Less current installments
|
101,177,574
|
119,734,751
|
||||||
Bank and other loans, excluding current installments
|
$
|
50,963,105
|
$
|
11,270,863
|
2017
|
$
|
101,177,574
|
||
2018
|
1,539,638
|
|||
2019
|
36,128,905
|
|||
2020
|
1,066,254
|
|||
2021
|
3,436,591
|
|||
Thereafter
|
8,791,717
|
|||
Total
|
$
|
152,140,679
|
December 31
|
||||||||
2016
|
2015
|
|||||||
Trust investments, at market value
|
$
|
4,131,885
|
$
|
2,848,759
|
||||
Note receivables from Cottonwood Mortuary
|
||||||||
Singing Hills Cemetery and Memorial Estates eliminated in consolidation
|
1,725,714
|
1,780,618
|
||||||
Total trust assets
|
5,857,599
|
4,629,377
|
||||||
Cemetery perpetual care obligation
|
(3,598,580
|
)
|
(3,465,771
|
)
|
||||
Fair value of trust assets in excess of trust obligations
|
$
|
2,259,019
|
$
|
1,163,606
|
December 31
|
||||||||
2016
|
2015
|
|||||||
Cash and cash equivalents
|
$
|
8,070,972
|
$
|
7,206,863
|
||||
Mutual funds
|
645,241
|
596,994
|
||||||
Fixed maturity securities
|
8,775
|
8,775
|
||||||
Equity securities
|
91,362
|
89,450
|
||||||
Participating in mortgage loans with Security National Life
|
1,575,044
|
1,457,720
|
||||||
Total
|
$
|
10,391,394
|
$
|
9,359,802
|
December 31
|
||||||||
2016
(As Restated) |
2015
(As Restated) |
|||||||
Current
|
$
|
(1,511,762
|
)
|
$
|
(215,366
|
)
|
||
Deferred
|
25,830,631
|
20,628,255
|
||||||
Total
|
$
|
24,318,869
|
$
|
20,412,889
|
December 31
|
||||||||
2016
(As Restated) |
2015
(As Restated) |
|||||||
Assets
|
||||||||
Future policy benefits
|
$
|
(9,719,058
|
)
|
$
|
(7,551,336
|
)
|
||
Loan loss reserve
|
(288,590
|
)
|
(1,163,700
|
)
|
||||
Unearned premium
|
(1,519,722
|
)
|
(1,610,684
|
)
|
||||
Available for sale securities
|
(51,266
|
)
|
(150,984
|
)
|
||||
Net operating loss
|
(1,531,160
|
)
|
(588,537
|
)
|
||||
Deferred compensation
|
(2,225,208
|
)
|
(1,994,927
|
)
|
||||
Deposit obligations
|
(1,033,580
|
)
|
(1,026,984
|
)
|
||||
Other
|
(3,384,144
|
)
|
(3,694,959
|
)
|
||||
Less: Valuation allowance
|
431,802
|
-
|
||||||
Total deferred tax assets
|
(19,320,926
|
)
|
(17,782,111
|
)
|
||||
Liabilities
|
||||||||
Deferred policy acquisition costs
|
18,150,517
|
14,838,604
|
||||||
Basis difference in property and equipment
|
10,749,036
|
9,375,146
|
||||||
Value of business acquired
|
2,573,902
|
2,972,883
|
||||||
Deferred gains
|
9,290,123
|
6,902,888
|
||||||
Trusts
|
1,599,657
|
1,599,657
|
||||||
Tax on unrealized appreciation
|
2,788,322
|
2,721,188
|
||||||
Total deferred tax liabilities
|
45,151,557
|
38,410,366
|
||||||
Net deferred tax liability
|
$
|
25,830,631
|
$
|
20,628,255
|
2016
(As Restated) |
2015
(As Restated) |
2014
(As Restated) |
||||||||||
Current
|
||||||||||||
Federal
|
$
|
1,138,196
|
$
|
2,423,846
|
$
|
1,532,539
|
||||||
State
|
245,764
|
412,175
|
121,124
|
|||||||||
1,383,960
|
2,836,021
|
1,653,663
|
||||||||||
Deferred
|
||||||||||||
Federal
|
5,686,651
|
4,413,336
|
3,406,545
|
|||||||||
State
|
443,993
|
412,674
|
449,911
|
|||||||||
6,130,644
|
4,826,010
|
3,856,456
|
||||||||||
Total
|
$
|
7,514,604
|
$
|
7,662,031
|
$
|
5,510,119
|
2016
(As Restated) |
2015
(As Restated) |
2014
(As Restated) |
||||||||||
Computed expense at statutory rate
|
$
|
6,699,099
|
$
|
7,144,580
|
$
|
4,667,165
|
||||||
State tax expense, net of federal tax benefit
|
455,240
|
544,400
|
376,883
|
|||||||||
Change in valuation allowance
|
431,802
|
-
|
-
|
|||||||||
Other, net
|
(71,537
|
)
|
(26,949
|
)
|
466,071
|
|||||||
Tax expense
|
$
|
7,514,604
|
$
|
7,662,031
|
$
|
5,510,119
|
Years Ending
|
||||
December 31
|
||||
2017
|
$
|
6,556,093
|
||
2018
|
4,121,399
|
|||
2019
|
2,583,941
|
|||
2020
|
1,151,873
|
|||
2021
|
496,713
|
|||
Total
|
$
|
14,910,019
|
Class A
|
Class C (1)
|
|||||||
Balance at December 31, 2013
|
11,807,287
|
1,330,191
|
||||||
Exercise of stock options
|
54,412
|
-
|
||||||
Stock dividends
|
595,020
|
66,384
|
||||||
Reverse stock split true up
|
-
|
15
|
||||||
Conversion of Class C to Class A
|
2,521
|
(2,521
|
)
|
|||||
Balance at December 31, 2014
|
12,459,240
|
1,394,069
|
||||||
Exercise of stock options
|
23,961
|
241,652
|
||||||
Stock dividends
|
624,483
|
75,335
|
||||||
Conversion of Class C to Class A
|
1,416
|
(1,416
|
)
|
|||||
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
|
(1)
|
Class C shares have been retroactively adjusted for the effect of the 1-for-10 reverse stock split that was approved by the stockholders in 2014.
|
2016
(As Restated) |
2015
(As Restated) |
2014
(As Restated) |
||||||||||
Numerator:
|
||||||||||||
Net earnings
|
$
|
12,188,627
|
$
|
13,351,441
|
$
|
8,216,832
|
||||||
Denominator:
|
||||||||||||
Denominator for basic earnings per share-weighted-average shares
|
14,806,290
|
14,439,274
|
13,893,260
|
|||||||||
Effect of dilutive securities Employee stock options
|
320,914
|
512,559
|
451,215
|
|||||||||
Dilutive potential common shares
|
320,914
|
512,559
|
451,215
|
|||||||||
Denominator for diluted earnings per share-adjusted weighted-average shares and assumed conversions
|
15,127,204
|
14,951,833
|
14,344,475
|
|||||||||
Basic earnings per share
|
$
|
0.82
|
$
|
0.92
|
$
|
0.59
|
||||||
Diluted earnings per share
|
$
|
0.81
|
$
|
0.89
|
$
|
0.57
|
Number of
Class A Shares
|
Weighted
Average
Exercise
Price
|
Number of
Class C Shares
|
Weighted
Average
Exercise
Price
|
|||||||||||||
Outstanding at December 31, 2013
|
405,133
|
$
|
2.41
|
508,657
|
$
|
2.00
|
||||||||||
Adjustment for the effect of stock dividends
|
24,446
|
32,934
|
||||||||||||||
Granted
|
173,500
|
150,000
|
||||||||||||||
Exercised
|
(59,713
|
)
|
-
|
|||||||||||||
Cancelled
|
(30,571
|
)
|
-
|
|||||||||||||
Outstanding at December 31, 2014
|
512,795
|
$
|
3.20
|
691,591
|
$
|
2.54
|
||||||||||
Adjustment for the effect of stock dividends
|
29,335
|
27,497
|
||||||||||||||
Granted
|
133,500
|
100,000
|
||||||||||||||
Exercised
|
(26,850
|
)
|
(241,652
|
)
|
||||||||||||
Cancelled
|
(30,519
|
)
|
-
|
|||||||||||||
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
|
||||||||||
Exercisable at end of year
|
601,731
|
$
|
3.78
|
472,298
|
$
|
4.02
|
||||||||||
Available options for future grant
|
253,432
|
-
|
||||||||||||||
Weighted average contractual term of options outstanding at December 31, 2016
|
7.37 years
|
2.67 years
|
||||||||||||||
Weighted average contractual term of options exercisable at December 31, 2016
|
6.77 years
|
2.27 years
|
||||||||||||||
Aggregated intrinsic value of options outstanding at December 31, 2016 (1)
|
$
|
1,452,902
|
$
|
1,079,136
|
||||||||||||
Aggregated intrinsic value of options exercisable at December 31, 2016 (1)
|
$
|
1,452,574
|
$
|
1,079,136
|
||||||||||||
(1) The Company used a stock price of $6.19 as of December 31, 2016 to derive intrinsic value.
|
Net Income
|
Capital and Surplus
|
|||||||||||||||||||
2016
|
2015
|
2014
|
2016
|
2015
|
||||||||||||||||
Amounts by insurance subsidiary:
|
||||||||||||||||||||
Security National Life Insurance Company
|
$
|
2,601,408
|
$
|
3,478,338
|
$
|
5,137,208
|
$
|
36,789,358
|
$
|
32,771,066
|
||||||||||
First Guaranty Insurance Company
|
174,562
|
-
|
-
|
4,091,847
|
-
|
|||||||||||||||
Memorial Insurance Company of America
|
460
|
49
|
415
|
1,081,319
|
1,082,059
|
|||||||||||||||
Southern Security Life Insurance Company, Inc.
|
889
|
491
|
467
|
1,592,440
|
1,590,605
|
|||||||||||||||
Trans-Western Life Insurance Company
|
1,203
|
(52
|
)
|
1,304
|
500,333
|
499,130
|
||||||||||||||
Total
|
$
|
2,778,522
|
$
|
3,478,826
|
$
|
5,139,394
|
$
|
44,055,297
|
$
|
35,942,860
|
2016 (As Restated)
|
||||||||||||||||||||
Life
|
Cemetery/
|
Intercompany
|
||||||||||||||||||
Insurance
|
Mortuary
|
Mortgage
|
Eliminations
|
Consolidated
|
||||||||||||||||
Revenues:
|
||||||||||||||||||||
From external sources:
|
||||||||||||||||||||
Revenue from customers
|
$
|
66,902,126
|
$
|
12,267,640
|
$
|
181,141,687
|
$
|
-
|
$
|
260,311,453
|
||||||||||
Net investment income
|
28,618,485
|
312,494
|
8,651,465
|
-
|
37,582,444
|
|||||||||||||||
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
|
-
|
148,025
|
219,974
|
(367,999
|
)
|
-
|
||||||||||||||
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
|
781,078
|
651,046
|
6,339,224
|
(7,771,348
|
)
|
-
|
||||||||||||||
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
|
$
|
821,097,220
|
$
|
99,611,263
|
$
|
171,844,559
|
$
|
(140,874,459
|
)
|
$
|
951,678,583
|
|||||||||
Goodwill
|
$
|
2,765,570
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
2,765,570
|
||||||||||
Expenditures for long-lived assets
|
$
|
532,958
|
$
|
723,445
|
$
|
2,310,108
|
$
|
-
|
$
|
3,566,511
|
2015 (As Restated)
|
||||||||||||||||||||
Life
|
Cemetery/
|
Intercompany
|
||||||||||||||||||
Insurance
|
Mortuary
|
Mortgage
|
Eliminations
|
Consolidated
|
||||||||||||||||
Revenues:
|
||||||||||||||||||||
From external sources:
|
||||||||||||||||||||
Revenue from customers
|
$
|
58,883,721
|
$
|
11,502,045
|
$
|
169,043,426
|
$
|
-
|
$
|
239,429,192
|
||||||||||
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
|
181,269,900
|
(9,097,340
|
)
|
280,354,832
|
||||||||||||||
Expenses:
|
||||||||||||||||||||
Death and other policy benefits
|
33,549,893
|
-
|
-
|
-
|
33,549,893
|
|||||||||||||||
Increase in future policy benefits
|
17,057,764
|
-
|
-
|
-
|
17,057,764
|
|||||||||||||||
Amortization of deferred policyand 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
|
-
|
-
|
3,449,103
|
-
|
3,449,103
|
|||||||||||||||
Costs related to funding mortgage loans
|
-
|
-
|
8,901,511
|
-
|
8,901,511
|
|||||||||||||||
Other
|
27,416,860
|
10,117,012
|
146,565,817
|
(1
|
)
|
184,099,688
|
||||||||||||||
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
|
85,920,810
|
12,728,667
|
169,789,223
|
(9,097,340
|
)
|
259,341,360
|
||||||||||||||
Earnings before income taxes
|
$
|
8,619,236
|
$
|
913,559
|
$
|
11,480,677
|
$
|
-
|
$
|
21,013,472
|
||||||||||
Income tax expense
|
(3,191,370
|
)
|
-
|
(4,470,661
|
)
|
-
|
(7,662,031
|
)
|
||||||||||||
Net earnings
|
$
|
5,427,866
|
$
|
913,559
|
$
|
7,010,016
|
$
|
-
|
$
|
13,351,441
|
||||||||||
Identifiable assets
|
$
|
721,362,741
|
$
|
101,935,898
|
$
|
157,283,191
|
$
|
(140,108,664
|
)
|
$
|
840,473,166
|
|||||||||
Goodwill
|
$
|
2,765,570
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
2,765,570
|
||||||||||
Expenditures for long-lived assets
|
$
|
3,024,223
|
$
|
154,226
|
$
|
454,241
|
$
|
-
|
$
|
3,632,690
|
2014 (As Restated)
|
||||||||||||||||||||
Life
|
Cemetery/
|
Intercompany
|
||||||||||||||||||
Insurance
|
Mortuary
|
Mortgage
|
Eliminations
|
Consolidated
|
||||||||||||||||
Revenues:
|
||||||||||||||||||||
From external sources:
|
||||||||||||||||||||
Revenue from customers
|
$
|
57,037,623
|
11,426,308
|
$
|
122,778,529
|
$
|
-
|
$
|
191,242,460
|
|||||||||||
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
|
131,460,445
|
(8,060,125
|
)
|
225,047,149
|
||||||||||||||
Expenses:
|
||||||||||||||||||||
Death and other policy benefits
|
29,789,964
|
-
|
-
|
-
|
29,789,964
|
|||||||||||||||
Increase in future policy benefits
|
17,905,914
|
-
|
-
|
-
|
17,905,914
|
|||||||||||||||
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
|
-
|
-
|
1,000,000
|
-
|
1,000,000
|
|||||||||||||||
Costs related to funding mortgage loans
|
-
|
-
|
6,451,319
|
-
|
6,451,319
|
|||||||||||||||
Other
|
23,045,928
|
10,245,144
|
110,817,359
|
(2
|
)
|
144,108,429
|
||||||||||||||
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
|
79,275,342
|
13,082,239
|
127,022,742
|
(8,060,125
|
)
|
211,320,198
|
||||||||||||||
Earnings before income taxes
|
$
|
8,625,992
|
663,256
|
$
|
4,437,703
|
$
|
-
|
$
|
13,726,951
|
|||||||||||
Income tax expense
|
(3,796,327
|
)
|
-
|
(1,713,792
|
)
|
-
|
(5,510,119
|
)
|
||||||||||||
Net earnings
|
$
|
4,829,665
|
663,256
|
$
|
2,723,911
|
$
|
-
|
$
|
8,216,832
|
|||||||||||
Identifiable assets
|
$
|
652,348,803
|
109,114,226
|
$
|
130,972,484
|
$
|
(142,742,671
|
)
|
$
|
749,692,842
|
||||||||||
Goodwill
|
$
|
2,765,570
|
-
|
$
|
-
|
$
|
-
|
$
|
2,765,570
|
|||||||||||
Expenditures for long-lived assets
|
$
|
660,830
|
121,677
|
$
|
737,936
|
$
|
-
|
$
|
1,520,443
|
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.
|
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
|
$
|
10,573,356
|
$
|
10,573,356
|
$
|
-
|
$
|
-
|
||||||||
Total securities available for sale
|
10,573,356
|
10,573,356
|
-
|
-
|
||||||||||||
Restricted assets of cemeteries and mortuaries
|
736,603
|
736,603
|
-
|
-
|
||||||||||||
Cemetery perpetual care trust investments
|
698,202
|
698,202
|
-
|
-
|
||||||||||||
Derivatives - loan commitments
|
6,911,544
|
-
|
-
|
6,911,544
|
||||||||||||
Other investments
|
1,765,752
|
-
|
-
|
1,765,752
|
||||||||||||
Total assets accounted for at fair value on a recurring basis
|
$
|
20,685,457
|
$
|
12,008,161
|
$
|
-
|
$
|
8,677,296
|
||||||||
Liabilities accounted for at fair value on a recurring basis
|
||||||||||||||||
Policyholder account balances
|
$
|
(49,421,125
|
)
|
$
|
-
|
$
|
-
|
$
|
(49,421,125
|
)
|
||||||
Future policy benefits - annuities
|
(99,388,662
|
)
|
-
|
-
|
(99,388,662
|
)
|
||||||||||
Derivatives - bank loan interest rate swaps
|
(3,308
|
)
|
-
|
-
|
(3,308
|
)
|
||||||||||
- call options
|
(109,474
|
)
|
(109,474
|
)
|
-
|
-
|
||||||||||
- put options
|
(26,494
|
)
|
(26,494
|
)
|
-
|
-
|
||||||||||
- loan commitments
|
(102,212
|
)
|
-
|
-
|
(102,212
|
)
|
||||||||||
Total liabilities accounted for at fair value on a recurring basis
|
$
|
(149,051,275
|
)
|
$
|
(135,968
|
)
|
$
|
-
|
$
|
(148,915,307
|
)
|
Policyholder
Account
Balances
|
Future
Policy
Benefits -
Annuities
|
Loan
Commitments
|
Bank Loan
Interest Rate
Swaps
|
Other
Investments
|
||||||||||||||||
Balance - December 31, 2015, as restated
|
$
|
(50,694,953
|
)
|
$
|
(69,398,617
|
)
|
$
|
7,671,495
|
$
|
(13,947
|
)
|
$
|
1,174,769
|
|||||||
Purchases
|
(30,294,480
|
)
|
600,000
|
|||||||||||||||||
Total Losses (Gains):
|
||||||||||||||||||||
Included in earnings
|
1,273,828
|
304,435
|
(862,163
|
)
|
-
|
|||||||||||||||
Included in other comprehensive income (loss)
|
-
|
-
|
-
|
10,639
|
(9,017
|
)
|
||||||||||||||
Balance - December 31, 2016, as restated
|
$
|
(49,421,125
|
)
|
$
|
(99,388,662
|
)
|
$
|
6,809,332
|
$
|
(3,308
|
)
|
$
|
1,765,752
|
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
|
||||||||||||||||
Mortgage loans on real estate
|
$
|
2,809,925
|
$
|
-
|
$
|
-
|
$
|
2,809,925
|
||||||||
Mortgage servicing rights
|
8,603,154
|
-
|
-
|
8,603,154
|
||||||||||||
Real estate held for investment
|
2,347,820
|
-
|
-
|
2,347,820
|
||||||||||||
Total assets accounted for at fair value on a nonrecurring basis
|
$
|
13,760,899
|
$
|
-
|
$
|
-
|
$
|
13,760,899
|
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
|
||||||||||||||||
Non-redeemable preferred stock
|
||||||||||||||||
Common stock
|
$
|
8,431,090
|
$
|
8,431,090
|
$
|
-
|
$
|
-
|
||||||||
Total securities available for sale
|
8,431,090
|
8,431,090
|
-
|
-
|
||||||||||||
Restricted assets of cemeteries and mortuaries
|
686,444
|
686,444
|
-
|
-
|
||||||||||||
Cemetery perpetual care trust investments
|
630,854
|
630,854
|
-
|
-
|
||||||||||||
Derivatives - loan commitments
|
7,779,162
|
-
|
-
|
7,779,162
|
||||||||||||
Other investments
|
1,174,769
|
-
|
-
|
1,174,769
|
||||||||||||
Total assets accounted for at fair value on a recurring basis
|
$
|
18,702,319
|
$
|
9,748,388
|
$
|
-
|
$
|
8,953,931
|
||||||||
Liabilities accounted for at fair value on a recurring basis
|
||||||||||||||||
Policyholder account balances
|
$
|
(50,694,953
|
)
|
$
|
-
|
$
|
-
|
$
|
(50,694,953
|
)
|
||||||
Future policy benefits - annuities
|
(69,398,617
|
)
|
-
|
-
|
(69,398,617
|
)
|
||||||||||
Derivatives - bank loan interest rate swaps
|
(13,947
|
)
|
-
|
-
|
(13,947
|
)
|
||||||||||
- call options
|
(16,342
|
)
|
(16,342
|
)
|
-
|
-
|
||||||||||
- put options
|
(28,829
|
)
|
(28,829
|
)
|
-
|
-
|
||||||||||
- loan commitments
|
(107,667
|
)
|
-
|
-
|
(107,667
|
)
|
||||||||||
Total liabilities accounted for at fair value on a recurring basis
|
$
|
(120,260,355
|
)
|
$
|
(45,171
|
)
|
$
|
-
|
$
|
(120,215,184
|
)
|
Policyholder
Accoun
t Balances
|
Future Policy
Benefits -
Annuities
|
Loan
Commitments
|
Bank Loan
Interest Rate
Swaps
|
Other
Investments
|
||||||||||||||||
Balance - December 31, 2014, as restated
|
$
|
(45,310,699
|
)
|
$
|
(65,540,985
|
)
|
$
|
5,105,605
|
$
|
(31,370
|
)
|
$
|
-
|
|||||||
Purchases
|
1,200,000
|
|||||||||||||||||||
Total Losses (Gains):
|
||||||||||||||||||||
Included in earnings
|
(5,384,254
|
)
|
(3,857,632
|
)
|
2,565,890
|
-
|
||||||||||||||
Included in other
|
||||||||||||||||||||
comprehensive income (loss)
|
-
|
-
|
-
|
17,423
|
(25,231
|
)
|
||||||||||||||
Balance - December 31, 2015, as restated
|
$
|
(50,694,953
|
)
|
$
|
(69,398,617
|
)
|
$
|
7,671,495
|
$
|
(13,947
|
)
|
$
|
1,174,769
|
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
|
||||||||||||||||
Mortgage loans on real estate
|
$
|
2,874,468
|
$
|
2,874,468
|
||||||||||||
Mortgage servicing rights
|
6,217,551
|
-
|
-
|
6,217,551
|
||||||||||||
Real estate held for investment
|
95,000
|
-
|
-
|
95,000
|
||||||||||||
Total assets accounted for at fair value on a nonrecurring basis
|
$
|
9,187,019
|
$
|
-
|
$
|
-
|
$
|
9,187,019
|
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:
|
||||||||||||||||||||
Residential
|
57,132,082
|
-
|
-
|
61,357,393
|
61,357,393
|
|||||||||||||||
Residential construction
|
40,700,003
|
-
|
-
|
40,700,003
|
40,700,003
|
|||||||||||||||
Commercial
|
51,349,493
|
-
|
-
|
53,299,800
|
53,299,800
|
|||||||||||||||
Mortgage loans, net
|
$
|
149,181,578
|
$
|
-
|
$
|
-
|
$
|
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
|
32,477,246
|
-
|
-
|
32,477,246
|
32,477,246
|
|||||||||||||||
Short-term investments
|
27,560,040
|
-
|
-
|
27,560,040
|
27,560,040
|
|||||||||||||||
Mortgage servicing rights
|
18,872,362
|
-
|
-
|
25,496,832
|
25,496,832
|
|||||||||||||||
Liabilities
|
||||||||||||||||||||
Bank and other loans payable
|
$
|
(152,137,341
|
)
|
$
|
-
|
$
|
-
|
$
|
(152,137,341
|
)
|
$
|
(152,137,341
|
)
|
Carrying Value
|
Level 1
|
Level 2
|
Level 3
|
Total
Estimated
Fair Value
|
||||||||||||||||
Assets
|
||||||||||||||||||||
Fixed maturity securities, held to maturity
|
$
|
145,558,425
|
$
|
-
|
$
|
150,507,158
|
$
|
-
|
$
|
150,507,158
|
||||||||||
Mortgage loans:
|
||||||||||||||||||||
Residential
|
44,459,613
|
-
|
-
|
47,193,950
|
47,193,950
|
|||||||||||||||
Residential construction
|
34,751,443
|
-
|
-
|
34,751,443
|
34,751,443
|
|||||||||||||||
Commercial
|
33,335,849
|
-
|
-
|
34,778,136
|
34,778,136
|
|||||||||||||||
Mortgage loans, net
|
$
|
112,546,905
|
$
|
-
|
$
|
-
|
$
|
116,723,529
|
$
|
116,723,529
|
||||||||||
Loans held for sale
|
211,453,006
|
$
|
217,646,189
|
217,646,189
|
||||||||||||||||
Policy loans
|
6,896,457
|
-
|
-
|
6,896,457
|
6,896,457
|
|||||||||||||||
Insurance assignments, net
|
31,511,195
|
-
|
-
|
31,511,195
|
31,511,195
|
|||||||||||||||
Short-term investments
|
16,915,808
|
-
|
-
|
16,915,808
|
16,915,808
|
|||||||||||||||
Mortgage servicing rights
|
12,679,755
|
-
|
-
|
13,897,160
|
13,897,160
|
|||||||||||||||
Liabilities
|
||||||||||||||||||||
Bank and other loans payable
|
$
|
(130,991,667
|
)
|
$
|
-
|
$
|
-
|
$
|
(130,991,667
|
)
|
$
|
(130,991,667
|
)
|
December 31
|
||||||||
2016
|
2015
|
|||||||
Unrealized gains (losses) on available for-sale securities
|
$
|
996,343
|
$
|
(1,289,508
|
)
|
|||
Reclassification adjustment for net realized gains in net income
|
160,575
|
113,751
|
||||||
Net unrealized gains (losses) before taxes
|
1,156,918
|
(1,175,757
|
)
|
|||||
Tax (expense) benefit
|
(399,228
|
)
|
404,414
|
|||||
Net
|
757,690
|
(771,343
|
)
|
|||||
Potential unrealized gains for derivative bank loans (interest rate swaps) before taxes
|
10,639
|
17,423
|
||||||
Tax expense
|
(4,149
|
)
|
(6,795
|
)
|
||||
Net
|
6,490
|
10,628
|
||||||
Other comprehensive income (loss) changes
|
$
|
764,180
|
$
|
(760,715
|
)
|
Beginning
Balance
December 31,
2015
|
Change for
the period
|
Ending
Balance
December 31,
2016 |
||||||||||
Unrealized net gains (losses) on available-for-sale securities and trust investments
|
$
|
(490,850
|
)
|
$
|
757,690
|
$
|
266,840
|
|||||
Unrealized gains (losses) on derivative bank loan interest rate swaps
|
(8,508
|
)
|
6,490
|
(2,018
|
)
|
|||||||
Other comprehensive income (loss)
|
$
|
(499,358
|
)
|
$
|
764,180
|
$
|
264,822
|
Beginning
Balance
December 31,
2014
|
Change for
the period
|
Ending Balance December 31,
2015 |
||||||||||
Unrealized net gains (losses) on available-for-sale securities and trust investments
|
$
|
280,493
|
$
|
(771,343
|
)
|
$
|
(490,850
|
)
|
||||
Unrealized gains (losses) on derivative bank loan interest rate swaps
|
(19,136
|
)
|
10,628
|
(8,508
|
)
|
|||||||
Other comprehensive income (loss)
|
$
|
261,357
|
$
|
(760,715
|
)
|
$
|
(499,358
|
)
|
Beginning
Balance
December 31,
2013
|
Change for
the period
|
Ending
Balance
December 31,
2014 |
||||||||||
Unrealized net gains (losses) on available-for-sale securities and trust investments
|
$
|
346,341
|
$
|
(65,848
|
)
|
$
|
280,493
|
|||||
Unrealized gains (losses) on derivative bank loan interest rate swaps
|
(35,569
|
)
|
16,433
|
(19,136
|
)
|
|||||||
Other comprehensive income (loss)
|
$
|
310,772
|
$
|
(49,415
|
)
|
$
|
261,357
|
Fair Value of Derivative Instruments
|
||||||||||||||||||||
Asset Derivatives
|
Liability Derivatives
|
|||||||||||||||||||
December 31, 2016
(As Restated) |
December 31, 2015
(As Restated) |
December 31, 2016
|
December 31, 2015
|
|||||||||||||||||
Balance Sheet Location
|
Fair Value
|
Balance Sheet Location
|
Fair Value
|
Balance Sheet Location
|
Fair Value
|
Balance Sheet Location
|
Fair Value
|
|||||||||||||
Derivatives designated as hedging instruments:
|
||||||||||||||||||||
Loan commitments
|
other assets
|
$
|
6,911,544
|
other assets
|
$
|
7,779,162
|
Other liabilities
|
$
|
102,212
|
Other liabilities
|
$
|
107,667
|
||||||||
Call Options
|
-
|
-
|
Other liabilities
|
109,474
|
Other liabilities
|
16,342
|
||||||||||||||
Put Options
|
-
|
-
|
Other liabilities
|
26,494
|
Other liabilities
|
28,829
|
||||||||||||||
Interest rate swaps
|
-
|
-
|
Bank loans payable
|
3,308
|
Bank loans payable
|
13,947
|
||||||||||||||
Total
|
$
|
6,911,544
|
$
|
7,779,162
|
$
|
241,488
|
$
|
166,785
|
Net Amount Gain (Loss) Recognized in OCI
|
||||||||
Years ended December 31
|
||||||||
Derivative - Cash Flow Hedging Relationships:
|
2016
|
2015
|
||||||
Interest Rate Swaps
|
$
|
10,639
|
$
|
17,423
|
||||
Sub Total
|
10,639
|
17,423
|
||||||
Tax Effect
|
4,149
|
6,795
|
||||||
Total
|
$
|
6,490
|
$
|
10,628
|
Fixed maturity securities, held to maturity
|
$
|
43,878,084
|
||
Equity securities, available for sale
|
646,335
|
|||
Mortgage loans on real estate
|
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 life, annuity, and other benefits
|
(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
|
For the Year Ended December 31 (unaudited)
|
||||||||||||
2016
(As Restated) |
2015
(As Restated) |
2014
(As Restated) |
||||||||||
Total revenues
|
$
|
306,471,770
|
$
|
284,812,830
|
$
|
229,483,646
|
||||||
Net earnings
|
$
|
11,923,653
|
$
|
12,627,709
|
$
|
8,044,482
|
||||||
Net earnings per Class A equivalent common share
|
$
|
0.81
|
$
|
0.87
|
$
|
0.58
|
||||||
Net earnings per Class A equivalent common share assuming dilution
|
$
|
0.79
|
$
|
0.84
|
$
|
0.56
|
Other investments, net
|
$
|
11,866,193
|
||
Property and equipment
|
760,120
|
|||
Goodwill
|
2,373,722
|
|||
Other
|
1,379,158
|
|||
Total assets acquired
|
16,379,193
|
|||
Other liabilities and accrued expenses
|
(1,368,000
|
)
|
||
Total liabilities assumed
|
(1,368,000
|
)
|
||
Fair value of net assets acquired
|
$
|
15,011,193
|
For the Year Ended December 31 (unaudited)
|
||||||||||||
2016
(As Restated) |
2015
(As Restated) |
2014
(As Restated) |
||||||||||
Total revenues
|
$
|
304,334,901
|
$
|
280,354,832
|
$
|
227,379,128
|
||||||
Net earnings
|
$
|
12,188,627
|
$
|
13,351,441
|
$
|
8,458,589
|
||||||
Net earnings per Class A equivalent common share
|
$
|
0.82
|
$
|
0.92
|
$
|
0.61
|
||||||
Net earnings per Class A equivalent common share
assuming dilution |
$
|
0.81
|
$
|
0.89
|
$
|
0.59
|
December 31
|
||||||||
2016
|
2015
|
|||||||
Amortized cost:
|
||||||||
Balance before valuation allowance at beginning of year
|
$
|
12,679,755
|
$
|
7,834,747
|
||||
MSRs received as proceeds from loan sales
|
8,603,154
|
6,217,551
|
||||||
Amortization
|
(2,410,547
|
)
|
(1,372,543
|
)
|
||||
Application of valuation allowance to write down MSRs with other than temporary impairment
|
-
|
-
|
||||||
Balance before valuation allowance at year end
|
$
|
18,872,362
|
$
|
12,679,755
|
||||
Valuation allowance for impairment of MSRs:
|
||||||||
Balance at beginning of year
|
$
|
-
|
$
|
-
|
||||
Additions
|
-
|
-
|
||||||
Application of valuation allowance to write down MSRs with other than temporary impairment
|
-
|
-
|
||||||
Balance at year end
|
$
|
-
|
$
|
-
|
||||
Mortgage servicing rights, net
|
$
|
18,872,362
|
$
|
12,679,755
|
||||
Estimated fair value of MSRs at year end
|
$
|
25,496,832
|
$
|
13,897,160
|
Estimated MSR Amortization
|
||||
2017
|
$
|
2,696,052
|
||
2018
|
2,696,052
|
|||
2019
|
2,696,052
|
|||
2020
|
2,696,052
|
|||
2021
|
2,696,052
|
|||
Thereafter
|
5,392,104
|
|||
Total
|
$
|
18,872,364
|
2016
|
2015
|
2014
|
||||||||||
Contractual servicing fees
|
$
|
5,661,699
|
$
|
3,864,454
|
$
|
2,641,234
|
||||||
Late fees
|
203,509
|
120,241
|
123,399
|
|||||||||
Total
|
$
|
5,865,207
|
$
|
3,984,695
|
$
|
2,764,633
|
Years Ended December 31
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
Servicing UPB
|
2,720,441,340
|
1,861,835,430
|
1,227,249,143
|
Prepayment
Speeds |
Average
Life(Years) |
Discount
Rate |
||||||||||
December 31, 2016
|
3.77
|
%
|
6.52
|
10.01
|
||||||||
December 31, 2015
|
3.02
|
%
|
5.24
|
10.00
|
||||||||
December 31, 2014
|
2.87
|
%
|
4.96
|
10.00
|
1.
|
Reclassification of Receivables to Loans Held for Sale
|
2.
|
Reclassification of the Provision for Loan Loss Reserve to net against Mortgage Fee Income
|
3.
|
Correction to Future Life, Annuity and Other Benefits to reverse a deferred profit liability
|
As of December 31, 2016
|
||||||||||||||||||||
As Originally Reported
|
Adjustment (A)
|
As Previously Reported
|
Adjustments (B)
|
As Restated
|
||||||||||||||||
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
|
(12,496,755
|
)
|
6,373,364
|
||||||||||||||
Other assets
|
6,891,468
|
-
|
6,891,468
|
3,521,926
|
10,413,394
|
|||||||||||||||
Total Assets
|
854,004,671
|
-
|
854,004,671
|
97,673,912
|
951,678,583
|
|||||||||||||||
Future life, annuity, and other benefits
|
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
|
|||||||||||||||
Income taxes
|
27,904,294
|
-
|
27,904,294
|
(3,585,425
|
)
|
24,318,869
|
||||||||||||||
Total liabilities
|
725,825,117
|
-
|
725,825,117
|
93,294,335
|
819,119,452
|
|||||||||||||||
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
|
97,673,912
|
951,678,583
|
As of December 31, 2015
|
||||||||||||||||||||
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 life, annuity, and other benefits
|
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
|
As of January 1, 2014
|
||||||||||||||||||||
As Originally Reported
|
Adjustment (A)
|
As Previously Reported
|
Adjustments (B)
|
As Restated
|
||||||||||||||||
Accumulated other comprehensive income, net of taxes
|
$
|
1,218,396
|
$
|
(907,624
|
)
|
$
|
310,772
|
$
|
-
|
$
|
310,772
|
|||||||||
Retained earnings
|
39,666,587
|
907,624
|
40,574,211
|
6,405,271
|
46,979,482
|
As of December 31, 2014
|
||||||||||||||||||||
As Originally Reported
|
Adjustment (A)
|
As Previously Reported
|
Adjustments (B)
|
As Restated
|
||||||||||||||||
Accumulated other comprehensive income, net of taxes
|
1,438,566
|
(1,177,209
|
)
|
261,357
|
-
|
261,357
|
||||||||||||||
Retained earnings
|
44,101,252
|
1,177,209
|
45,278,461
|
6,597,870
|
51,876,331
|
Year Ended December 31, 2016
|
||||||||||||||||||||
As Originally Reported
|
Adjustment (A)
|
As Previously Reported
|
Adjustments (B)
|
As Restated
|
||||||||||||||||
Mortgage fee income
|
$
|
186,416,311
|
$
|
-
|
$
|
186,416,311
|
$
|
(2,873,515
|
)
|
$
|
183,542,796
|
|||||||||
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)
|
$
|
0.96
|
$
|
0.00
|
$
|
0.96
|
$
|
(0.14
|
)
|
$
|
0.82
|
|||||||||
Net earnings per common share assuming dilution (1)
|
$
|
0.94
|
$
|
0.00
|
$
|
0.94
|
$
|
(0.14
|
)
|
$
|
0.81
|
Year Ended December 31, 2015
|
||||||||||||||||||||
As Originally Reported
|
Adjustment (A)
|
As Previously Reported
|
Adjustments (B)
|
As Restated
|
||||||||||||||||
Mortgage fee income
|
$
|
174,323,452
|
$
|
1,403,240
|
$
|
175,726,692
|
$
|
(4,209,408
|
)
|
$
|
171,517,284
|
|||||||||
Total revenues
|
283,161,000
|
1,403,240
|
284,564,240
|
(4,209,408
|
)
|
280,354,832
|
||||||||||||||
Increase in future policy benefits
|
17,212,001
|
-
|
17,212,001
|
(154,237
|
)
|
17,057,764
|
||||||||||||||
Commissions
|
81,935,623
|
-
|
81,935,623
|
(1,035,005
|
)
|
80,900,618
|
||||||||||||||
Provision for loan loss reserve
|
6,295,043
|
-
|
6,295,043
|
(2,845,940
|
)
|
3,449,103
|
||||||||||||||
Cost related to funding mortgage loans
|
8,864,404
|
-
|
8,864,404
|
37,107
|
8,901,511
|
|||||||||||||||
Total benefits and expenses
|
263,339,435
|
-
|
263,339,435
|
(3,998,075
|
)
|
259,341,360
|
||||||||||||||
Earnings before income taxes
|
19,821,565
|
1,403,240
|
21,224,805
|
(211,333
|
)
|
21,013,472
|
||||||||||||||
Income tax expense
|
(7,198,685
|
)
|
(547,263
|
)
|
(7,745,948
|
)
|
83,917
|
(7,662,031
|
)
|
|||||||||||
Net earnings
|
12,622,880
|
855,977
|
13,478,857
|
(127,416
|
)
|
13,351,441
|
||||||||||||||
Net earnings per common share (1)
|
$
|
0.87
|
$
|
0.06
|
$
|
0.93
|
$
|
(0.01
|
)
|
$
|
0.92
|
|||||||||
Net earnings per common share assuming dilution (1)
|
$
|
0.84
|
$
|
0.06
|
$
|
0.90
|
$
|
(0.01
|
)
|
$
|
0.89
|
Year Ended December 31, 2014
|
||||||||||||||||||||
As Originally Reported
|
Adjustment (A)
|
As Previously Reported
|
Adjustments (B)
|
As Restated
|
||||||||||||||||
Mortgage fee income
|
$
|
128,696,998
|
$
|
441,943
|
$
|
129,138,941
|
$
|
(2,331,468
|
)
|
$
|
126,807,473
|
|||||||||
Total revenues
|
226,936,674
|
441,943
|
227,378,617
|
(2,331,468
|
)
|
225,047,149
|
||||||||||||||
Increase in future policy benefits
|
18,060,151
|
-
|
18,060,151
|
(154,237
|
)
|
17,905,914
|
||||||||||||||
Commissions
|
59,876,675
|
-
|
59,876,675
|
(502,133
|
)
|
59,374,542
|
||||||||||||||
Provision for loan loss reserve
|
3,053,403
|
-
|
3,053,403
|
(2,053,403
|
)
|
1,000,000
|
||||||||||||||
Cost related to funding mortgage loans
|
6,877,069
|
-
|
6,877,069
|
(425,750
|
)
|
6,451,319
|
||||||||||||||
Total benefits and expenses
|
214,455,721
|
-
|
214,455,721
|
(3,135,523
|
)
|
211,320,198
|
||||||||||||||
Earnings before income taxes
|
12,480,953
|
441,943
|
12,922,896
|
804,055
|
13,726,951
|
|||||||||||||||
Income tax expense
|
(4,726,305
|
)
|
(172,358
|
)
|
(4,898,663
|
)
|
(611,456
|
)
|
(5,510,119
|
)
|
||||||||||
Net earnings
|
7,754,648
|
269,585
|
8,024,233
|
192,599
|
8,216,832
|
|||||||||||||||
Net earnings per common share (1)
|
$
|
0.56
|
$
|
0.02
|
$
|
0.58
|
$
|
0.01
|
$
|
0.59
|
||||||||||
Net earnings per common share assuming dilution (1)
|
$
|
0.54
|
$
|
0.02
|
$
|
0.56
|
$
|
0.01
|
$
|
0.57
|
(1) |
Earnings per share amounts have been adjusted retroactively for the effect of annual stock dividends.
|
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 (losses) on derivative instruments
|
6,490
|
-
|
6,490
|
-
|
6,490
|
|||||||||||||||
Other comprehensive gain (loss)
|
764,180
|
-
|
764,180
|
-
|
764,180
|
|||||||||||||||
Year Ended December 31, 2015
|
||||||||||||||||||||
As Originally Reported
|
Adjustment (A)
|
As Previously Reported
|
Adjustments (B)
|
As Restated
|
||||||||||||||||
Net earnings
|
$
|
12,622,880
|
$
|
855,977
|
$
|
13,478,857
|
$
|
(127,416
|
)
|
$
|
13,351,441
|
|||||||||
Net unrealized gains (losses) on derivative instruments
|
866,605
|
(855,977
|
)
|
10,628
|
-
|
10,628
|
||||||||||||||
Other comprehensive gain (loss)
|
95,262
|
(855,977
|
)
|
(760,715
|
)
|
-
|
(760,715
|
)
|
||||||||||||
Year Ended December 31, 2014
|
||||||||||||||||||||
As Originally Reported
|
Adjustment (A)
|
As Previously Reported
|
Adjustments (B)
|
As Restated
|
||||||||||||||||
Net earnings
|
$
|
7,754,648
|
$
|
269,585
|
$
|
8,024,233
|
$
|
192,599
|
$
|
8,216,832
|
||||||||||
Net unrealized gains (losses) on derivative instruments
|
286,018
|
(269,585
|
)
|
16,433
|
-
|
16,433
|
||||||||||||||
Other comprehensive gain (loss)
|
220,170
|
(269,585
|
)
|
(49,415
|
)
|
-
|
(49,415
|
)
|
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
|
|||||||||||||||
Year Ended December 31, 2015
|
||||||||||||||||||||
As Originally Reported
|
Adjustment (A)
|
As Previously Reported
|
Adjustments (B)
|
As Restated
|
||||||||||||||||
Net earnings
|
$
|
12,622,880
|
$
|
855,977
|
$
|
13,478,857
|
$
|
(127,416
|
)
|
$
|
13,351,441
|
|||||||||
Provision for deferred and other income taxes
|
4,909,927
|
-
|
4,909,927
|
(83,917
|
)
|
4,826,010
|
||||||||||||||
Loans originated for sale
|
-
|
-
|
-
|
(2,861,404,239
|
)
|
(2,861,404,239
|
)
|
|||||||||||||
Proceeds from loans sold
|
-
|
-
|
-
|
2,933,300,742
|
2,933,300,742
|
|||||||||||||||
Net gains on loans sold
|
-
|
-
|
-
|
(131,130,447
|
)
|
(131,130,447
|
)
|
|||||||||||||
Future life and other benefits
|
15,232,634
|
-
|
15,232,634
|
(154,237
|
)
|
15,078,397
|
||||||||||||||
Receivables for mortgage loans sold
|
(47,752,055
|
)
|
-
|
(47,752,055
|
)
|
47,752,055
|
-
|
|||||||||||||
Other operating assets and liabilities
|
4,890,770
|
-
|
4,890,770
|
(434,680
|
)
|
4,456,090
|
||||||||||||||
Net cash provided by (used in) operating activities
|
(15,831,248
|
)
|
-
|
(15,831,248
|
)
|
(12,282,139
|
)
|
(28,113,387
|
)
|
|||||||||||
Net change in warehouse line borrowings
|
-
|
-
|
12,282,139
|
12,282,139
|
||||||||||||||||
Net cash provided by financing activities
|
9,656,561
|
-
|
9,656,561
|
12,282,139
|
21,938,700
|
|||||||||||||||
Year Ended December 31, 2014
|
||||||||||||||||||||
As Originally Reported
|
Adjustment (A)
|
As Previously Reported
|
Adjustments (B)
|
As Restated
|
||||||||||||||||
Net earnings
|
$
|
7,754,648
|
$
|
269,585
|
$
|
8,024,233
|
$
|
192,599
|
$
|
8,216,832
|
||||||||||
Provision for deferred and other income taxes
|
3,245,004
|
-
|
3,245,004
|
611,452
|
3,856,456
|
|||||||||||||||
Loans originated for sale
|
-
|
-
|
-
|
(2,044,909,613
|
)
|
(2,044,909,613
|
)
|
|||||||||||||
Proceeds from loans sold
|
-
|
-
|
-
|
2,102,740,825
|
2,102,740,825
|
|||||||||||||||
Net gains on loans sold
|
-
|
-
|
-
|
(93,144,155
|
)
|
(93,144,155
|
)
|
|||||||||||||
Future life and other benefits
|
14,084,894
|
-
|
14,084,894
|
(154,237
|
)
|
13,930,657
|
||||||||||||||
Receivables for mortgage loans sold
|
7,362,353
|
-
|
7,362,353
|
(7,362,353
|
)
|
-
|
||||||||||||||
Other operating assets and liabilities
|
(135,279
|
)
|
-
|
(135,279
|
)
|
(1,453,885
|
)
|
(1,589,164
|
)
|
|||||||||||
Net cash provided by (used in) operating activities
|
31,015,809
|
-
|
31,015,809
|
(43,479,367
|
)
|
(12,463,558
|
)
|
|||||||||||||
Net change in warehouse line borrowings
|
-
|
-
|
43,479,367
|
43,479,367
|
||||||||||||||||
Net cash provided by financing activities
|
6,364,003
|
-
|
6,364,003
|
43,479,367
|
49,843,370
|
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)
|
$
|
0.18
|
$
|
0.17
|
$
|
0.35
|
$
|
0.34
|
$
|
0.32
|
$
|
0.28
|
$
|
0.12
|
$
|
0.03
|
||||||||||||||||
Net earnings per common share assuming dilution (1)
|
$
|
0.17
|
$
|
0.17
|
$
|
0.34
|
$
|
0.33
|
$
|
0.31
|
$
|
0.27
|
$
|
0.12
|
$
|
0.03
|
2015(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
|
$
|
66,537,523
|
$
|
65,824,546
|
$
|
77,292,625
|
$
|
75,187,618
|
$
|
74,062,877
|
$
|
74,985,622
|
$
|
66,671,215
|
$
|
64,357,046
|
||||||||||||||||
Benefits and expenses
|
61,051,248
|
61,388,750
|
69,808,663
|
68,772,252
|
67,700,286
|
68,073,150
|
64,779,238
|
61,107,208
|
||||||||||||||||||||||||
Earnings before income taxes
|
5,486,275
|
4,435,796
|
7,483,962
|
6,415,366
|
6,362,591
|
6,912,472
|
1,891,977
|
3,249,838
|
||||||||||||||||||||||||
Income tax expense
|
(2,104,958
|
)
|
(1,698,788
|
)
|
(2,867,957
|
)
|
(2,454,812
|
)
|
(2,346,210
|
)
|
(2,554,134
|
)
|
(426,823
|
)
|
(954,297
|
)
|
||||||||||||||||
Net earnings
|
3,381,317
|
2,737,008
|
4,616,005
|
3,960,554
|
4,016,381
|
4,358,338
|
1,465,154
|
2,295,541
|
||||||||||||||||||||||||
Net earnings per common share (1)
|
$
|
0.24
|
$
|
0.19
|
$
|
0.32
|
$
|
0.27
|
$
|
0.28
|
$
|
0.30
|
$
|
0.10
|
$
|
0.16
|
||||||||||||||||
Net earnings per common share assuming dilution (1)
|
$
|
0.23
|
$
|
0.18
|
$
|
0.31
|
$
|
0.26
|
$
|
0.26
|
$
|
0.29
|
$
|
0.10
|
$
|
0.15
|
2014 (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
|
$
|
45,502,539
|
$
|
45,843,231
|
$
|
60,200,879
|
$
|
58,408,816
|
$
|
61,012,516
|
$
|
60,515,415
|
$
|
60,662,683
|
$
|
60,279,687
|
||||||||||||||||
Benefits and expenses
|
44,887,289
|
46,062,797
|
55,224,633
|
53,921,094
|
58,348,652
|
57,958,096
|
55,995,147
|
53,378,211
|
||||||||||||||||||||||||
Earnings before income taxes
|
615,250
|
(219,566
|
)
|
4,976,246
|
4,487,722
|
2,663,864
|
2,557,319
|
4,667,536
|
6,901,476
|
|||||||||||||||||||||||
Income tax expense
|
(202,352
|
)
|
119,914
|
(1,870,803
|
)
|
(1,685,203
|
)
|
(961,140
|
)
|
(919,546
|
)
|
(1,864,368
|
)
|
(3,025,284
|
)
|
|||||||||||||||||
Net earnings
|
412,898
|
(99,652
|
)
|
3,105,443
|
2,802,519
|
1,702,724
|
1,637,773
|
2,803,168
|
3,876,192
|
|||||||||||||||||||||||
Net earnings per common share (1)
|
$
|
0.03
|
$
|
(0.01
|
)
|
$
|
0.22
|
$
|
0.20
|
$
|
0.12
|
$
|
0.12
|
$
|
0.20
|
$
|
0.28
|
|||||||||||||||
Net earnings per common share assuming dilution (1)
|
$
|
0.03
|
$
|
(0.01
|
)
|
$
|
0.22
|
$
|
0.20
|
$
|
0.12
|
$
|
0.11
|
$
|
0.19
|
$
|
0.27
|
(1)
|
Earnings per share amounts have been adjusted retroactively for the effect of annual stock dividends.
|
(2)
|
Earnings restated – See Note 21 of the Notes to Consolidated Financial Statements for additional information regarding correction of errors.
|
·
|
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets of the Company,
|
·
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the Board of Directors of the Company, and
|
·
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the financial statements.
|
·
|
The Company's controls related to the review and approval of invoices, including the evaluation of the timing of services/products, to provide for proper accounting for obligations did not operate effectively. As a result of the control deficiency, a material progress bill concerning work performed and corresponding retainage from a contractor for a building project was not recorded in the Company's accounting records on a timely basis.
|
|
·
|
The Company's review controls over complex accounting matters to properly identify and apply relevant accounting standards did not operate effectively, which resulted in the three errors discussed below.
|
|
1.
|
The use by SecurityNational Mortgage, a subsidiary, of interest rate lock commitments and forward sale mandatory delivery commitments are both considered derivatives under Accounting Standards Codification 815, Derivatives and Hedging. These mortgage banking derivatives are complex financial instruments that are required to be recorded at fair value. The Company, which had previously recorded the changes in fair value of mortgage banking derivatives through other comprehensive income, should have recorded such changes in current period earnings.
|
|
2.
|
The Warehouse Line Repurchase Agreements ("Repurchase Agreements") had been previously treated as off-balance sheet financing. A subsequent review determined that these Repurchase Agreements did not qualify for "true sale" accounting and that the loans and related debt should be recorded as assets and liabilities of the Company.
|
|
3.
|
The Company's valuation allowance of deferred tax assets should have been reversed in an earlier period.
|
Name
|
Age
|
Position with the Company
|
||
Scott M. Quist | 63 |
Chairman of the Board, President, Chief Executive Officer and Director
|
||
Garrett S. Sill
|
46
|
Chief Financial Officer and Treasurer
|
||
Jason G. Overbaugh
|
42
|
Vice President, National Marketing Director of Life Insurance and Director
|
||
S. Andrew Quist
|
36
|
Vice President, Associate General Counsel and Director
|
||
Jeffrey R. Stephens
|
63
|
General Counsel and Corporate Secretary
|
||
Stephen C. Johnson
|
60
|
Vice President of Mortgage Operations
|
||
Christie Q. Overbaugh
|
68
|
Senior Vice President of Internal Operations
|
||
John L. Cook
|
62
|
Director
|
||
Gilbert A. Fuller
|
76
|
Director
|
||
Robert G. Hunter
|
57
|
Director
|
||
H. Craig Moody
|
65
|
Director
|
||
Norman G. Wilbur
|
78
|
Director
|
Name and
Principal Position |
Year
|
Salary
($) |
Bonus ($)
|
Options Awards
($) |
Non-Equity
Incentive Plan
Compensation
($) |
Change in
Pension Value
Non-qualified
Deferred
Compensation
Earnings (1)
($) |
All Other
Compensation (2)
($) |
Total
($) |
|||||||||||||||||||||
Scott M. Quist
Chairman of the Board, President and Chief Executive Officer |
2016
|
$
|
463,572
|
$
|
173,000
|
--
|
--
|
--
|
$
|
41,521
|
$
|
678,093
|
|||||||||||||||||
2015
|
462,700
|
123,000
|
--
|
--
|
--
|
43,148
|
628,848
|
||||||||||||||||||||||
2014
|
429,400
|
21,200
|
--
|
--
|
--
|
40,066
|
490,666
|
||||||||||||||||||||||
Garrett S. Sill
Chief Financial Officer and Treasurer |
2016
|
$
|
194,725
|
$
|
19,307
|
--
|
--
|
--
|
$
|
22,800
|
$
|
236,832
|
|||||||||||||||||
2015
|
182,844
|
13,707
|
--
|
--
|
--
|
16,453
|
213,004
|
||||||||||||||||||||||
2014
|
173,903
|
13,250
|
--
|
--
|
--
|
16,180
|
203,333
|
||||||||||||||||||||||
Stephen C. Johnson
Vice President of Mortgage Operations |
2016
|
$
|
238,331
|
$
|
201,682
|
--
|
--
|
--
|
$
|
19,920
|
$
|
459,933
|
|||||||||||||||||
2015
|
197,750
|
117,299
|
--
|
--
|
--
|
25,676
|
340,725
|
||||||||||||||||||||||
2014
|
191,750
|
68,626
|
--
|
--
|
--
|
24,701
|
285,077
|
||||||||||||||||||||||
S. Andrew Quist
Vice President and Associate General Counsel |
2016
|
$
|
192,292
|
$
|
9,625
|
--
|
--
|
--
|
$
|
23,953
|
$
|
225,870
|
|||||||||||||||||
2015
|
178,240
|
38,925
|
--
|
--
|
--
|
22,426
|
239,591
|
||||||||||||||||||||||
2014
|
166,388
|
54,325
|
--
|
--
|
--
|
21,771
|
242,484
|
||||||||||||||||||||||
Jeffrey R. Stephens
General Counsel and Corporate Secretary |
2016
|
$
|
177,750
|
$
|
12,900
|
--
|
--
|
--
|
$
|
23,743
|
$
|
214,393
|
|||||||||||||||||
2015
|
171,792
|
12,600
|
--
|
--
|
--
|
22,089
|
206,481
|
||||||||||||||||||||||
2014
|
167,957
|
12,350
|
--
|
--
|
--
|
19,788
|
200,095
|
(1)
|
The amounts indicated under "Change in Pension Value and Non-qualified Deferred Compensation Earnings" consist of amounts contributed by the Company into a trust for the benefit of the Named Executive Officers under the Company's Deferred Compensation Plan.
|
|
(2)
|
The amounts indicated under "All Other Compensation" consist of the following amounts paid by the Company for the benefit of the Named Executive Officers:
|
|
a)
|
payments related to the operation of automobiles were for Scott M. Quist ($7,200 for each of the years 2016, 2015 and 2014); and Garrett S. Sill, Stephen C. Johnson, S. Andrew Quist, and Jeffrey R. Stephens ($-0- for each of the years 2016, 2015 and 2014). However, such payments do not include the furnishing of an automobile by the Company to Scott M. Quist, nor the payment of insurance and property taxes with respect to the automobiles operated by the such executive officers;
|
|
b)
|
group life insurance premiums paid by the Company to a group life insurance plan for Scott M. Quist, Stephen C. Johnson, Garrett S. Sill, S. Andrew Quist, and Jeffrey R. Stephens ($178 for 2016, $183 for 2015, and $191 for 2014);
|
|
|
c) |
life insurance premiums paid by the Company for the benefit of Scott M. Quist ($12,390 for each of the years 2016, 2015 and 2014); and Garrett S. Sill, Stephen C. Johnson, S. Andrew Quist, and Jeffrey R. Stephens ($-0- for each of the years 2016, 2015 and 2014);
|
|
d) |
medical insurance premiums paid by the Company to a medical insurance plan: Scott M. Quist ($10,902 for 2016, $9,792 for 2015, and $9,625 for 2014); Garrett S. Sill ($13,447 for 2016, $7,369 for 2015, and $7,243 for 2014); Stephen C. Johnson ($8,691 for 2016, $14,091 for 2015, and $13,850 for 2014); S. Andrew Quist ($15,688 for 2016, $14,091 for 2015, and $13,154 for 2014); and Jeffrey R. Stephens ($15,688 for 2016, $14,091 for 2015, and $11,725 for 2014);
|
|
e) |
long term disability insurance paid by the Company to a provider of such insurance: Scott M. Quist ($251 for 2016, $2,983 for 2015 and $260 for 2014); and Garrett S. Sill, Stephen C. Johnson, S. Andrew Quist, and Jeffrey R. Stephens ($251 for 2016, $439 for 2015 and $260 for 2014);
|
f)
|
contributions to defined contribution plans paid by the Company: Scott M. Quist ($10,600 for 2016, 10,600 for 2015, and $10,400 for 2014); Garrett S. Sill ($8,561 for 2016, $7,862 for 2015, and $7,486 for 2014); Stephen C. Johnson ($10,600 for 2016, $10,600 for 2015, and $10,400 for 2014); S. Andrew Quist ($7,836 for 2016, $7,713 for 2015, and $7,470 for 2014); and Jeffrey R. Stephens ($7,626 for 2016, $7,376 for 2015, and $7,212 for 2014);
|
|
g)
|
contributions to health savings accounts paid by the Company: Scott M. Quist ($-0- for each of the years 2016, 2015 and 2014); Garrett S. Sill ($363 for 2016, $600 for 2015, and $1,000 for 2014); Stephen C. Johnson ($200 for 2016, $363 for 2015, and $-0- for 2014); S. Andrew Quist ($-0- for each of the years 2016, 2015 and 2014); and Jeffrey R. Stephens ($-0- for 2016, $-0- for 2015, and $400 for 2014)
|
Name of Executive Officer
|
Year |
Perks and
Other
Personal
Benefits
|
Tax
Reimbursements
|
Discounted
Securities
Purchases
|
Payments/
Accruals on
Termination
Plans
|
Registrant Contributions to Defined Contribution
Plans
|
Insurance
Premiums
|
Dividends or
Earnings on
Stock or
Option Awards
|
Other (1)
|
||||||||||||||||||||||||
Scott M. Quist
|
2016 |
$
|
7,200
|
-
|
-
|
-
|
$
|
10,600
|
$
|
23,721
|
-
|
-
|
|||||||||||||||||||||
2015 |
7,200
|
-
|
-
|
-
|
10,600
|
25,348
|
-
|
-
|
|||||||||||||||||||||||||
2014 |
7,200
|
-
|
-
|
-
|
10,400
|
22,466
|
-
|
-
|
|||||||||||||||||||||||||
Garrett S. Sill
|
2016 |
$
|
-
|
-
|
-
|
-
|
$
|
8,561
|
$
|
14,239
|
-
|
-
|
|||||||||||||||||||||
2015 |
-
|
-
|
-
|
-
|
7,862
|
8,591
|
-
|
-
|
|||||||||||||||||||||||||
2014 |
-
|
-
|
-
|
-
|
7,486
|
8,694
|
-
|
-
|
|||||||||||||||||||||||||
Stephen C. Johnson
|
2016 |
$
|
-
|
-
|
-
|
-
|
$
|
10,600
|
$
|
9,320
|
-
|
-
|
|||||||||||||||||||||
2015 |
-
|
-
|
-
|
-
|
10,600
|
15,075
|
-
|
-
|
|||||||||||||||||||||||||
2014 |
-
|
-
|
-
|
-
|
10,400
|
14,302
|
-
|
-
|
|||||||||||||||||||||||||
S. Andrew Quist
|
2016 |
$
|
-
|
-
|
-
|
-
|
$
|
7,836
|
$
|
16,117
|
-
|
-
|
|||||||||||||||||||||
2015 |
-
|
-
|
-
|
-
|
7,713
|
14,713
|
-
|
-
|
|||||||||||||||||||||||||
2014 |
-
|
-
|
-
|
-
|
7,470
|
14,301
|
-
|
-
|
|||||||||||||||||||||||||
Jeffrey R. Stephens
|
2016 |
$
|
-
|
-
|
-
|
-
|
$
|
7,626
|
$
|
16,117
|
-
|
-
|
|||||||||||||||||||||
2015 |
-
|
-
|
-
|
-
|
7,376
|
14,713
|
-
|
-
|
|||||||||||||||||||||||||
|
2014 |
-
|
-
|
-
|
-
|
7,212
|
12,576
|
-
|
-
|
Estimated Future Payouts Under Equity Incentive Plan Awards
|
All Other
Awards: Number
of Securities
Underlying
|
Exercise or
Base Price
of Option
Awards
|
Closing
Price on
Grant Date
|
Grant Date
Fair Value
of Stock
and Option
Awards
|
|||||||||||||||||||||||||
Name of Executive Officer
|
Grant Date
|
Threshold
($) |
Target
($) |
Maximum
($) |
Options
(#) |
($/Sh) (2)
|
($/Sh) (2)
|
($) |
|||||||||||||||||||||
Scott M. Quist
|
12/2/16
|
--
|
--
|
--
|
84,000
|
(1) |
$
|
7.35
|
$
|
6.70
|
$
|
104,160
|
|||||||||||||||||
Garrett S. Sill
|
12/2/16
|
--
|
--
|
--
|
10,500
|
(1) |
6.68
|
6.70
|
24,238
|
||||||||||||||||||||
Stephen C. Johnson
|
12/2/16
|
--
|
--
|
--
|
5,250
|
(1) |
6.68
|
6.70
|
12,119
|
||||||||||||||||||||
S. Andrew Quist
|
12/2/16
|
--
|
--
|
--
|
21,000
|
(1) |
6.68
|
6.70
|
48,475
|
||||||||||||||||||||
Jeffrey R. Stephens
|
12/2/16
|
--
|
--
|
--
|
5,250
|
(1) |
6.68
|
6.70
|
12,119
|
(1)
|
The stock options have been adjusted for the 5% annual stock dividend declared on December 2, 2016.
|
(2)
|
Prices have been adjusted for the effect of the 5% annual stock dividend declared on December 2, 2016.
|
Option Awards
|
Stock Awards
|
||||||||||||||||||||||||||||||||||||||||||
Name of Executive Officer
|
Option
Grant Date
|
Number of Securities Underlying Unexercised Options Exercisable (1)
(#) |
Number of Securities Underlying Unexercised Options Unexercisable
(#) |
Option Exercise Price (2)
($) |
Option Expiration Date
|
Stock Award Grant
Date |
Number of Shares or Units of Stock That Have Not Vested
(#) |
Market Value of Shares or Units of Stock That Have Not Vested
($) |
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested
(#) |
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
($) |
|||||||||||||||||||||||||||||||||
Scott M. Quist
|
4/13/12 |
127,629
|
(3
|
)
|
--
|
$
|
1.31
|
04/13/17
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||||||||||||||||||
12/6/13 |
60,775
|
(4
|
)
|
--
|
4.32
|
12/06/18
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||||||||||||||||||||
7/2/14 |
57,881
|
(5
|
)
|
--
|
4.05
|
07/02/19
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||||||||||||||||||||
12/5/14 |
115,763
|
(6
|
)
|
--
|
4.73
|
12/05/19
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||||||||||||||||||||
12/4/15 |
110,250
|
(7
|
)
|
--
|
6.67
|
12/04/20
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||||||||||||||||||||
12/2/16 |
--
|
84,000
|
(8
|
)(9)
|
7.35
|
12/02/21
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||||||||||||||||||||
Garrett S. Sill
|
12/6/13 |
4,863
|
--
|
$
|
3.95
|
12/06/23
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||||||||||||||||||||
7/2/14 |
4,631
|
--
|
3.69
|
07/02/24
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||||||||||||||||||||||
12/5/14 |
9,261
|
--
|
4.30
|
12/05/24
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||||||||||||||||||||||
12/4/15 |
11,025
|
--
|
6.06
|
12/04/25
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||||||||||||||||||||||
12/2/16 |
--
|
10,500
|
(9
|
)
|
6.68
|
12/02/26
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||||||||||||||||||||
Stephen C. Johnson
|
4/13/12 |
3,829
|
--
|
$
|
1.21
|
04/13/22
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||||||||||||||||||||
12/6/13 |
3,647
|
--
|
3.95
|
12/06/23
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||||||||||||||||||||||
7/2/14 |
3,473
|
--
|
3.69
|
07/02/24
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||||||||||||||||||||||
12/5/14 |
6,946
|
--
|
4.30
|
12/05/24
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||||||||||||||||||||||
12/4/15 |
11,025
|
--
|
6.06
|
12/04/25
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||||||||||||||||||||||
12/2/16 |
--
|
5,250
|
(9
|
)
|
6.68
|
12/02/26
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||||||||||||||||||||
S. Andrew Quist
|
12/2/11 |
20,102
|
--
|
$
|
0.96
|
12/02/21
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||||||||||||||||||||
4/13/12 |
19,145
|
--
|
1.21
|
04/13/22
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||||||||||||||||||||||
12/6/13 |
12,155
|
--
|
3.95
|
12/06/23
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||||||||||||||||||||||
7/2/14 |
11,576
|
--
|
3.69
|
07/02/24
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||||||||||||||||||||||
12/5/14 |
23,153
|
--
|
4.30
|
12/05/24
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||||||||||||||||||||||
12/4/15 |
22,050
|
--
|
6.06
|
12/04/25
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||||||||||||||||||||||
12/2/16 |
--
|
21,000
|
(9
|
)
|
6.68
|
12/02/26
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||||||||||||||||||||
Jeffrey R. Stephens
|
4/13/12 |
3,191
|
--
|
$
|
1.21
|
04/13/22
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||||||||||||||||||||
12/6/13 |
3,039
|
--
|
3.95
|
12/06/23
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||||||||||||||||||||||
7/2/14 |
2,894
|
--
|
3.69
|
07/02/24
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||||||||||||||||||||||
12/5/14 |
5,789
|
--
|
4.30
|
12/05/24
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||||||||||||||||||||||
|
12/4/15 |
5,513
|
--
|
6.06
|
12/04/25
|
--
|
--
|
--
|
--
|
--
|
|||||||||||||||||||||||||||||||||
12/2/16 |
--
|
5,250
|
(9
|
)
|
6.68
|
12/02/26
|
--
|
--
|
--
|
--
|
--
|
(1)
|
Except for options granted to Scott M. Quist, which have a five year term, such grants have ten year terms. The vesting of any unvested shares is subject to the recipient's continuous employment. This reflects the equivalent of Class A common shares.
|
(2)
|
Exercise prices have been adjusted for the effect of annual stock dividends.
|
(3)
|
On April 13, 2012, Scott Quist was granted stock options to purchase 100,000 shares of Class A common stock at an exercise price of $1.31 per share or 100,000 shares of Class C common stock at an exercise price of $1.31 per share, or any combination thereof.
|
(4)
|
On December 6, 2013, Scott Quist was granted stock options to purchase 50,000 shares of Class A common stock at an exercise price of $4.32 per share or 50,000 shares of Class C common stock at an exercise price of $4.32 per share, or any combination thereof.
|
(5)
|
On July 2, 2014, Scott Quist was granted stock options to purchase 50,000 shares of Class A common stock at an exercise price of $4.05 per share or 50,000 shares of Class C common stock at an exercise price of $4.05 per share, or any combination thereof.
|
(6)
|
On December 5, 2014, Scott Quist was granted stock options to purchase 100,000 shares of Class A common stock at an exercise price of $4.30 per share or 100,000 shares of Class C common stock at an exercise price of $4.30 per share, or any combination thereof.
|
(7)
|
On December 4, 2015, Scott Quist was granted stock options to purchase 100,000 shares of Class A common stock at an exercise price of $6.67 per share or 100,000 shares of Class C common stock at an exercise price of $6.67 per share, or any combination thereof.
|
(8)
|
On December 2, 2016, Scott Quist was granted stock options to purchase 80,000 shares of Class A common stock at an exercise price of $6.68 per share or 80,000 shares of Class C common stock at an exercise price of $6.68 per share, or any combination thereof.
|
(9)
|
Stock options vest at the rate of 25% of the total number of shares subject to the options on March 2, 2017 and 25% of the total number of shares on the last day of each three month period thereafter.
|
Grant Date
|
Vesting
|
|
12/02/11
|
These options vested 25% per quarter over a one year period after the grant date.
|
|
4/13/12
|
These options vested 25% per quarter over a one year period after the grant date.
|
|
12/06/13
|
These options vested 25% per quarter over a one year period after the grant date.
|
|
07/02/14
|
These options vested 25% per quarter over a one year period after the grant date.
|
|
12/05/14
|
These options vested 25% per quarter over a one year period after the grant date.
|
|
12/04/15
|
These options vested 25% per quarter over a one year period after the grant date.
|
|
12/02/16
|
These options vest 25% per quarter over a one year period after the grant date.
|
Option Awards
|
Stock Awards
|
|||||||||||||||
Number of Shares Acquired on Exercise
|
Value Realized on Exercise
|
Number of Shares Acquired on Vesting
|
Value Realized on Vesting
|
|||||||||||||
Name of Executive Officer
|
(#)
|
|
($)
|
(#)
|
|
($)
|
||||||||||
Scott M. Quist
|
104,975
|
$
|
544,820
|
--
|
--
|
|||||||||||
Garrett S. Sill
|
--
|
--
|
--
|
--
|
||||||||||||
Stephen C. Johnson
|
--
|
--
|
--
|
--
|
||||||||||||
S. Andrew Quist
|
--
|
--
|
--
|
--
|
||||||||||||
Jeffrey R. Stephens
|
--
|
--
|
--
|
--
|
Name of
Executive Officer |
Plan Name
|
Number of Years Credited Service
(#) |
Present Value of Accumulated Benefit
($) |
Payments During Last Fiscal Year
($) |
|||||||||
Scott M. Quist
|
None
|
--
|
--
|
--
|
|||||||||
Garrett S. Sill
|
None
|
--
|
--
|
--
|
|||||||||
Stephen C. Johnson
|
None
|
--
|
--
|
--
|
|||||||||
S. Andrew Quist
|
None
|
--
|
--
|
--
|
|||||||||
Jeffrey R.Stephens
|
None
|
--
|
--
|
--
|
·
|
All compensation plans previously approved by security holders; and
|
·
|
All compensation plans not previously approved by security holders.
|
A |
|
B |
|
C |
|
|||||||
Plan Category
|
Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights
|
Weighted Average Exercise Price of Outstanding Options, Warrants and Rights
|
Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column A)
|
|||||||||
Equity compensation plans approved by stockholders[1]
|
1,298,271
|
$4.33[2}
|
253,432
|
[3]
|
||||||||
Equity compensation plans not approved by stockholders
|
0
|
-
|
0
|
Name
|
Fees Earned
or Paid
in Cash
($) |
Stock
Awards ($)
|
Option
Awards ($)
|
Non-Equity
Incentive
Plan
Compensation ($)
|
Change in
Pension
Value and Nonqualified
Deferred Compensation Earnings
|
All Other Compensation ($)
|
Total
($) |
|||||||||||||||||||||
John L. Cook (1)
|
$
|
21,600
|
--
|
$
|
14,647
|
--
|
--
|
--
|
$
|
36,247
|
||||||||||||||||||
Robert G. Hunter (2)
|
21,600
|
--
|
14,647
|
--
|
--
|
--
|
36,247
|
|||||||||||||||||||||
Gilbert A. Fuller (3)
|
23,850
|
--
|
14,647
|
--
|
--
|
--
|
38,497
|
|||||||||||||||||||||
H. Craig Moody (4)
|
23,850
|
--
|
14,647
|
--
|
--
|
--
|
38,497
|
|||||||||||||||||||||
Norman G. Wilbur (5)
|
23,850
|
--
|
14,647
|
--
|
--
|
--
|
38,497
|
(1)
|
Mr. Cook has options to purchase 26,964 shares of the Company's Class A common stock.
|
(2)
|
Dr. Hunter has options to purchase 74,794 shares of the Company's Class A common stock.
|
(3)
|
Mr. Fuller has options to purchase 28,241 shares of the Company's Class A common stock.
|
(4)
|
Mr. Moody has options to purchase 74,794 shares of the Company's Class A common stock.
|
(5)
|
Mr. Wilbur has options to purchase 25,091 shares of the Company's Class A common stock.
|
Executive
|
Registrant
|
Aggregate
|
Aggregate
|
Aggregate
|
||||||||||||||||
Contributions
|
Contributions
|
Earnings
|
Withdrawals
|
Balance
|
||||||||||||||||
In Last FY
|
In Last FY
|
in last FY
|
Distributions
|
at last FYE
|
||||||||||||||||
Name
|
($)
|
($)
|
($)
|
($)
|
($)
|
|||||||||||||||
Scott M. Quist
|
--
|
--
|
--
|
--
|
$
|
543,573
|
||||||||||||||
Garrett S. Sill
|
--
|
--
|
--
|
--
|
--
|
|||||||||||||||
Stephen C. Johnson
|
--
|
--
|
--
|
--
|
--
|
|||||||||||||||
S. Andrew Quist
|
--
|
--
|
--
|
--
|
--
|
|||||||||||||||
Jeffrey R. Stephens
|
--
|
--
|
--
|
--
|
--
|
Class A
Common Stock |
Class C
Common Stock |
Class A and
Class C Common Stock |
||||||||||||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||||||||||
Beneficially
|
of
|
Beneficially
|
of
|
Beneficially
|
of
|
|||||||||||||||||||
Name and Address (1)
|
Owned
|
Class
|
Owned
|
Class
|
Owned
|
Class
|
||||||||||||||||||
George R. and Shirley C. Quist Family Partnership, Ltd. (2)
|
1,531,806
|
11.6
|
%
|
603,126
|
31.7
|
%
|
2,134,932
|
14.2
|
%
|
|||||||||||||||
Scott M. Quist (3)(5)(6)(7)(8)
|
385,106
|
2.9
|
%
|
1,446,437
|
60.4
|
%
|
1,831,543
|
11.8
|
%
|
|||||||||||||||
401(k) Retirement Savings Plan (4)
|
1,825,303
|
13.9
|
%
|
-
|
-
|
1,825,303
|
12.1
|
%
|
||||||||||||||||
Jordan Capital Partners, L.P. (9)
|
1,216,899
|
9.2
|
%
|
-
|
-
|
1,216,899
|
8.1
|
%
|
||||||||||||||||
Employee Stock Ownership Plan (ESOP) (10)
|
522,384
|
4.0
|
%
|
278,904
|
14.7
|
%
|
801,288
|
5.3
|
%
|
|||||||||||||||
Non-Qualified Deferred Compensation Plan (11)
|
798,146
|
6.1
|
%
|
-
|
-
|
798,146
|
5.3
|
%
|
||||||||||||||||
Christie Q. Overbaugh (12)
|
278,838
|
2.1
|
%
|
23,664
|
1.2
|
%
|
302,502
|
2.0
|
%
|
|||||||||||||||
Jason G. Overbaugh (13)
|
230,441
|
1.7
|
%
|
-
|
-
|
230,441
|
1.5
|
%
|
||||||||||||||||
Associated Investors (14)
|
74,883
|
*
|
117,739
|
6.2
|
%
|
192,622
|
1.3
|
%
|
||||||||||||||||
Estate of George R. Quist
|
113,502
|
*
|
70,095
|
3.7
|
%
|
183,597
|
1.2
|
%
|
||||||||||||||||
S. Andrew Quist (3)(15)
|
168,404
|
1.3
|
%
|
-
|
-
|
168,404
|
1.1
|
%
|
||||||||||||||||
Jeffrey R. Stephens (16)
|
95,716
|
*
|
-
|
-
|
95,716
|
*
|
||||||||||||||||||
Garrett S. Sill (6)(7)(17)
|
83,023
|
*
|
-
|
-
|
83,023
|
*
|
||||||||||||||||||
Robert G. Hunter, M.D. (3)(18)
|
80,769
|
*
|
-
|
-
|
80,769
|
*
|
||||||||||||||||||
H. Craig Moody (19)
|
78,940
|
*
|
-
|
-
|
78,940
|
*
|
||||||||||||||||||
Stephen C. Johnson(20)
|
54,036
|
*
|
-
|
-
|
54,036
|
*
|
||||||||||||||||||
Gilbert A. Fuller (21)
|
24,123
|
*
|
-
|
-
|
24,123
|
*
|
||||||||||||||||||
John L. Cook (22)
|
22,238
|
*
|
-
|
-
|
22,238
|
*
|
||||||||||||||||||
Norman G. Wilbur (23)
|
22,150
|
*
|
-
|
-
|
22,150
|
*
|
||||||||||||||||||
All directors and executive officers (12 persons) (3)(5)(6)(7)
|
1,523,784
|
11.1
|
%
|
1,470,101
|
61.4
|
%
|
2,993,885
|
18.6
|
%
|
(1)
|
Unless otherwise indicated, the address of each listed stockholder is c/o Security National Financial Corporation, 5300 South 360 West, Suite 250, Salt Lake City, Utah 84123.
|
(2)
|
This stock is owned by the George R. and Shirley C. Quist Family Partnership, Ltd., of which Scott M. Quist is the managing general partner and, accordingly, exercises sole voting and investment powers with respect to such shares.
|
(3)
|
Does not include 522,384 shares of Class A common stock and 278,904 shares of Class C common stock owned by the Company's Employee Stock Ownership Plan (ESOP), of which Scott M. Quist, S. Andrew Quist and Robert G. Hunter are the trustees and accordingly, exercise shared voting and investment powers with respect to such shares.
|
(4)
|
The investment committee of the Company's 401(k) retirement savings plan consists of Scott Quist and Garrett S. Sill and, accordingly, exercise shared voting and investment powers with respect to such shares.
|
(5)
|
Does not include 74,883 shares of Class A common stock and 117,739 shares of Class C common stock owned by Associated Investors, a Utah general partnership, of which Scott M. Quist is the managing partner and, accordingly, exercises sole voting and investment powers with respect to such shares.
|
(6)
|
Does not include 1,825,303 shares of Class A common stock owned by the Company's 401(k) Retirement Savings Plan, of which Scott M. Quist and Garrett S. Sill are members of the investment committee and, accordingly, exercise shared voting and investment powers with respect to such shares.
|
(7)
|
Does not include 798,146 shares of Class A common stock owned by the Company's Deferred Compensation Plan, of which Scott M. Quist and Garrett S. Sill are members of the investment committee and, accordingly, exercise shared voting and investment powers with respect to such shares.
|
(8)
|
Includes options to purchase 493,298 shares of Class C common stock granted to Scott M. Quist that are currently exercisable, or will become exercisable within 60 days of March 31, 2017.
|
(9)
|
Jordan Capital Partners, L.P. and its affiliates and subsidiaries have beneficial ownership of an aggregate of 1,216,899 shares of the Company's Class A common stock. Jordan Capital Partners, L.P. has sole power to vote 1,216,899 shares of the Company's Class A common stock and sole power to dispose of 1,216,899 shares of the Company's common stock. The address for Jordan Capital Partners, L.P. is 6001 River Road, Suite 100, Columbus, Georgia 31904.
|
(10)
|
The trustees of the Employee Stock Ownership Plan (ESOP) consist of Scott M. Quist, S. Andrew Quist and Robert G. Hunter who exercise shared voting and investment powers.
|
(11)
|
The investment committee of the Company's Non-Qualified Deferred Compensation Plan consists of Scott M. Quist and Garrett S. Sill and, accordingly, exercised shared voting and investment powers with respect to such shares.
|
(12)
|
Includes options to purchase 32,473 shares of Class A common stock granted to Ms. Overbaugh that are currently exercisable, or will become exercisable within 60 days of March 31, 2017.
|
(13)
|
Includes options to purchase 74,184 shares of Class A common stock granted to Mr. Overbaugh that are currently exercisable, or will become exercisable within 60 days of March 31, 2017.
|
(14)
|
The managing partner of Associated Investors is Scott M. Quist, who exercises sole voting and investment powers.
|
(15)
|
Includes options to purchase 113,431 shares of Class A common stock granted to Mr. Andrew Quist that are currently exercisable, or will become exercisable within 60 days of March 31, 2017.
|
(16)
|
Includes options to purchase 21,738 shares of Class A common stock granted to Mr. Stephens that are currently exercisable, or will become exercisable within 60 days of March 31, 2017.
|
(17)
|
Includes options to purchase 32,405 shares of Class A common stock granted to Mr. Sill that are currently exercisable, or will become exercisable within 60 days of March 31, 2017.
|
(18)
|
Includes options to purchase 70,068 shares of Class A common stock granted to Mr. Hunter that are currently exercisable, or will become exercisable within 60 days of March 31, 2017.
|
(19)
|
Includes options to purchase 70,068 shares of Class A common stock granted to Mr. Moody that are currently exercisable, or will become exercisable within 60 days of March 31, 2017.
|
(20)
|
Includes options to purchase 30,232 shares of Class A common stock granted to Mr. Johnson that are currently exercisable, or will become exercisable within 60 days of March 31, 2017.
|
(21)
|
Includes options to purchase 23,515 shares of Class A common stock granted to Mr. Fuller that are currently exercisable, or will become exercisable within 60 days of March 31, 2017.
|
(22)
|
Includes options to purchase 22,238 shares of Class A common stock granted to Mr. Cook that are currently exercisable, or will become exercisable within 60 days of March 31, 2017.
|
(23)
|
Includes options to purchase 20,365 shares of Class A common stock granted to Mr. Wilbur that are currently exercisable, or will become exercisable within 60 days of March 31, 2017.
|
Fee Category
|
2016
|
2015
|
||||||
Audit Fees (1)
|
$
|
345,583
|
$
|
333,531
|
||||
Audit-Related Fees (2)
|
41,200
|
34,000
|
||||||
Tax Fees (3)
|
79,622
|
78,933
|
||||||
All Other Fees (4)
|
-
|
-
|
||||||
$
|
466,405
|
$
|
446,464
|
(1)
|
Audit fees consist of aggregate fees billed for professional services rendered for the audit of the Company's annual financial statements and review of the interim financial statements included in quarterly reports or services that are normally provided by the independent auditor in connection with statutory and regulatory filings for the years ended December 31, 2016 and 2015.
|
(2)
|
Audit related fees consist of aggregate fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the Company's financial statements and are not reported under "Audit Fees". These fees include review of registration statements, and audits of the Company's ESOP and 401(k) Plans.
|
(3)
|
Tax fees consist of aggregate fees billed for professional services for tax compliance, tax advice, and tax planning.
|
(4)
|
All other fees consist of aggregate fees billed for products and services by the independent auditors, other than those disclosed above.
|
3.1
|
Articles of Amendment to Articles of Incorporation (14)
|
3.2
|
Amended Bylaws (4)
|
4.1
|
Specimen Class A Stock Certificate (1)
|
4.2
|
Specimen Class C Stock Certificate (1)
|
4.3
|
Specimen Preferred Stock Certificate and Certificate of Designation of Preferred Stock (1)
|
10.1
|
Amended Employee Stock Ownership Plan (ESOP) and Trust Agreement (1)
|
10.2
|
2003 Stock Option Plan (3)
|
10.3
|
2006 Director Stock Option Plan (6)
|
10.4
|
2013 Amended Stock Option and Other Equity Incentive Awards Plan (12)
|
10.5
|
2014 Director Stock Option Plan (9)
|
10.6
|
Deferred Compensation Plan (2)
|
10.7
|
Employment agreement with Scott M. Quist (11)
|
10.8
|
Indemnification Agreement among SecurityNational Mortgage Company, Lehman Brothers Bank, and Aurora Loan Services (6)
|
10.9
|
Agreement and Plan of Reorganization among Security National Financial Corporation and certain subsidiaries (7)
|
10.10
|
Purchase Agreement among Security National Financial Corporation, SNFC Subsidiary, LLC, American Funeral Financial, LLC, and Hypershop, LLC (8)
|
10.11
|
Stock Purchase Agreement among Security National Financial Corporation, Christi Babb and Jack Madden, Jr. to purchase First Guaranty Insurance Company (13)
|
21
|
Subsidiaries of the Registrant
|
23.1
|
Consent of Eide Bailly LLP (10)
|
23.2
|
Consent of Mackey Price & Mecham (10)
|
31.1
|
Certification pursuant to 18 U.S.C. Section 1350, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002
|
31.2
|
Certification pursuant to 18 U.S.C. Section 1350, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002
|
32.1
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
32.2
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
101.xml
|
Instance Document
|
101.xsd
|
Taxonomy Extension Schema Document
|
101.cal
|
Taxonomy Extension Calculation Linkbase Document
|
101.def
|
Taxonomy Extension Definition Linkbase Document
|
101.lab
|
Taxonomy Extension Label Linkbase Document
|
101.pre
|
Taxonomy Extension Presentation Linkbase Document
|
(1)
|
Incorporated by reference from Registration Statement on Form S‑1, as filed on September 29, 1987
|
(2)
|
Incorporated by reference from Annual Report on Form 10-K, as filed on April 3, 2002
|
(3)
|
Incorporated by reference from Schedule 14A Definitive Proxy Statement, as filed on September 5, 2003, relating to the Company's Annual Meeting of Stockholders
|
(4)
|
Incorporated by reference from Report on Form 10-Q, as filed on November 14, 2003
|
(5)
|
Incorporated by reference from Schedule 14A Definitive Proxy Statement, as filed on September 1, 2007, relating to the Company's Annual Meeting of Stockholders
|
(6)
|
Incorporated by reference from Report on Form 10-K, as filed on September 30, 2009
|
(7)
|
Incorporated by reference from Report on Form 10-Q, as filed on November 13, 2013
|
(8)
|
Incorporated by reference from Report on Form 8-K, as filed on September 13, 2014
|
(9)
|
Incorporated by reference from Schedule 14A Definitive Proxy Statement, as filed on September 2, 2014, related to Company's Annual Meeting of Stockholders
|
(10)
|
Incorporated by reference from Registration Statement on Form S-8, as filed on October 20, 2015
|
(11)
|
Incorporated by reference from Report on Form 10-Q, as filed on November 13, 2015
|
(12)
|
Incorporated by reference from Report on Form 10-Q, as filed on August 15, 2016
|
(13)
|
Incorporated by reference from Report on Form 8-K, as filed on July 19, 2016
|
(14) | Incorporated by reference from Report on Form 10-K, as filed on March 31, 2017 |
Dated: August 25, 2017
|
By:
|
/s/ Scott M. Quist
|
Scott M. Quist
|
||
Chairman of the Board, President and Chief Executive Officer
|
SIGNATURE |
TITLE
|
DATE
|
/s/ Scott M. Quist
|
Chairman of the Board, President
|
|
Scott M. Quist
|
and Chief Executive Officer
|
|
(Principal Executive Officer)
|
August 25, 2017
|
|
/s/ Garrett S. Sill
|
Chief Financial Officer and
|
|
Garrett S. Sill
|
Treasurer (Principal Financial
|
|
and Accounting Officer)
|
August 25, 2017
|
|
/s/ Jason G. Overbaugh
|
Vice President and Director
|
August 25, 2017
|
Jason G. Overbaugh
|
||
/s/ S. Andrew Quist
|
Vice President and Director
|
August 25, 2017
|
S. Andrew Quist
|
||
/s/ John L. Cook
|
Director
|
August 25, 2017
|
John L. Cook
|
||
/s/ Gilbert A. Fuller
|
Director
|
August 25, 2017
|
Gilbert A. Fuller
|
||
/s/ Robert G. Hunter
|
Director
|
August 25, 2017
|
Robert G. Hunter
|
||
/s/ H. Craig Moody
|
Director
|
August 25, 2017
|
H. Craig Moody
|
||
/s/ Norman G. Wilbur
|
Director
|
August 25, 2017
|
Norman G. Wilbur
|
December 31
|
||||||||
2016
(As Restated) |
2015
(As Restated) |
|||||||
Assets
|
||||||||
Mortgage loans on real estate
|
$
|
2,300,000
|
$
|
-
|
||||
Cash
|
1,252,653
|
2,054,192
|
||||||
Investment in subsidiaries (equity method)
|
140,864,706
|
126,918,934
|
||||||
Receivable from affiliates
|
13,028,057
|
11,088,597
|
||||||
Restricted assets
|
2,612,672
|
-
|
||||||
Property and equipment, at cost, net of accumulated depreciation of $1,663,396 for 2016 and $1,663,396 for 2015
|
-
|
-
|
||||||
Other assets
|
2,803
|
2,803
|
||||||
Total assets
|
$
|
160,060,891
|
$
|
140,064,526
|
December 31
|
||||||||
2016
(As Restated) |
2015
(As Restated) |
|||||||
Liabilities and Stockholders' Equity Liabilities
|
||||||||
Bank and other loans payable:
|
||||||||
Current installments
|
$
|
1,625,974
|
$
|
969,755
|
||||
Long-term
|
2,372,690
|
1,093,718
|
||||||
Advances from affiliated companies
|
9,074,311
|
9,069,338
|
||||||
Other liabilities and accrued expenses
|
672,638
|
976,394
|
||||||
Income taxes
|
13,756,147
|
10,238,642
|
||||||
Total liabilities
|
27,501,760
|
22,347,847
|
||||||
Stockholders' Equity
|
||||||||
Preferred stock - non-voting - $1.00 par value; 5,000,000 shares authorized; none issued or outstanding
|
-
|
-
|
||||||
Class A common stock $2.00 par value; 20,000,000 shares authorized; issued 13,819,006 shares in 2016 and 13,109,100 shares in 2015
|
27,638,012
|
26,218,200
|
||||||
Class B non-voting common stock-$1.00 par value; 5,000,000 shares authorized; none issued or outstanding
|
-
|
-
|
||||||
Class C convertible common stock, $2.00 par value; 3,000,000 shares authorized; issued 1,902,229 shares in 2016 and 1,709,640 shares in 2015
|
3,804,458
|
3,419,280
|
||||||
Additional paid-in capital
|
34,813,246
|
30,232,582
|
||||||
Accumulated other comprehensive income, net of taxes
|
264,822
|
(499,358
|
)
|
|||||
Retained Earnings
|
67,409,204
|
60,525,404
|
||||||
Treasury stock at cost - 704,122 Class A shares and -0- Class C shares in 2016; 930,546 Class A shares and -0- Class C shares in 2015, held by affiliated companies
|
(1,370,611
|
)
|
(2,179,429
|
)
|
||||
Total stockholders' equity
|
132,559,131
|
117,716,679
|
||||||
Total Liabilities and Stockholders' Equity
|
$
|
160,060,891
|
$
|
140,064,526
|
Year Ended December 31
|
||||||||||||
2016
(As Restated) |
2015
(As Restated) |
2014
(As Restated) |
||||||||||
Revenue
|
||||||||||||
Net investment income
|
$
|
9,059
|
$
|
86,829
|
$
|
91,748
|
||||||
Fees from affiliates
|
1,119,272
|
976,146
|
1,009,552
|
|||||||||
Other Income
|
23,464
|
-
|
-
|
|||||||||
Total revenue
|
1,151,795
|
1,062,975
|
1,101,300
|
|||||||||
Benefits and Expenses:
|
||||||||||||
General and administrative expenses
|
616,356
|
673,491
|
728,929
|
|||||||||
Interest expense
|
78,950
|
105,614
|
173,362
|
|||||||||
Total benefits and expenses
|
695,306
|
779,105
|
902,291
|
|||||||||
Earnings before income taxes,
and earnings of subsidiaries |
||||||||||||
456,489
|
283,870
|
199,009
|
||||||||||
Income tax expense
|
(3,658,312
|
)
|
(3,275,782
|
)
|
(3,888,770
|
)
|
||||||
Equity in earnings of subsidiaries
|
15,390,450
|
16,343,353
|
11,906,593
|
|||||||||
Net earnings
|
$
|
12,188,627
|
$
|
13,351,441
|
$
|
8,216,832
|
Year Ended December 31
|
||||||||||||
2016
(As Restated) |
2015
(As Restated) |
2014
(As Restated) |
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net earnings
|
$
|
12,188,627
|
$
|
13,351,441
|
$
|
8,216,832
|
||||||
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
||||||||||||
Depreciation
|
-
|
-
|
309
|
|||||||||
Undistributed earnings of affiliates
|
15,390,450
|
16,343,353
|
11,906,593
|
|||||||||
Provision for deferred and other income taxes
|
3,517,505
|
3,275,260
|
5,186,793
|
|||||||||
Stock based compensation expense
|
343,577
|
387,608
|
391,220
|
|||||||||
Benefit plans funded with treasury stock
|
1,429,962
|
1,197,236
|
899,850
|
|||||||||
Change in assets and liabilities:
|
||||||||||||
Other assets
|
-
|
(1
|
)
|
13,296
|
||||||||
Other liabilities
|
(303,756
|
)
|
(94,068
|
)
|
(199,052
|
)
|
||||||
Net cash provided by operating activities
|
32,566,365
|
34,460,829
|
26,415,841
|
|||||||||
-
|
-
|
-
|
||||||||||
Cash flows from investing activities:
|
||||||||||||
Purchases of restricted assets
|
(2,612,672
|
)
|
-
|
-
|
||||||||
Investment in subsidiaries
|
(28,572,042
|
)
|
(30,988,389
|
)
|
(23,332,723
|
)
|
||||||
Mortgage loans made
|
(2,300,000
|
)
|
-
|
-
|
||||||||
Cash paid for purchase of subsidiaries, net of cash acquired
|
-
|
-
|
(3,000,000
|
)
|
||||||||
Net cash used in investing activities
|
(33,484,714
|
)
|
(30,988,389
|
)
|
(26,332,723
|
)
|
||||||
Cash flows from financing activities:
|
||||||||||||
Advances from (to) affiliates
|
(1,934,487
|
)
|
259,513
|
(1,919,022
|
)
|
|||||||
Purchase of treasury stock
|
-
|
(181,539
|
)
|
-
|
||||||||
Proceeds from stock options exercised
|
116,106
|
33,677
|
74,024
|
|||||||||
Repayment of bank and other loans payable
|
(969,163
|
)
|
(1,394,376
|
)
|
(1,812,964
|
)
|
||||||
Proceeds from bank borrowings
|
2,904,354
|
-
|
-
|
|||||||||
Net cash provided by (used in) financing activities
|
116,810
|
(1,282,725
|
)
|
(3,657,962
|
)
|
|||||||
Net change in cash
|
(801,539
|
)
|
2,189,715
|
(3,574,844
|
)
|
|||||||
Cash at beginning of year
|
2,054,192
|
(135,523
|
)
|
3,439,321
|
||||||||
Cash at end of year
|
$
|
1,252,653
|
$
|
2,054,192
|
$
|
(135,523
|
)
|
December 31
|
||||||||
2016
|
2015
|
|||||||
4.27% 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.
|
$
|
2,904,354
|
$
|
-
|
||||
3.85% note payable in monthly installments of $86,059 including principal and interest, collateralized by shares of Security National Life Insurance Company stock, due January 2018.
|
1,093,349
|
2,062,512
|
||||||
Other notes payable
|
961
|
961
|
||||||
Total bank and other loans
|
3,998,664
|
2,063,473
|
||||||
Less current installments
|
1,625,974
|
969,755
|
||||||
Bank and other loans, excluding current installments
|
$
|
2,372,690
|
$
|
1,093,718
|
2017
|
$
|
1,625,974
|
||
2018
|
554,785
|
|||
2019
|
579,286
|
|||
2020
|
604,729
|
|||
2021
|
633,890
|
|||
Thereafter
|
-
|
|||
Total
|
$
|
3,998,664
|
December 31
|
||||||||
2015
|
2015
|
|||||||
Non-interest bearing advances from affiliates:
|
||||||||
Cemetery and Mortuary subsidiary
|
$
|
1,459,841
|
$
|
1,459,841
|
||||
Life insurance subsidiaries
|
7,614,470
|
7,609,497
|
||||||
$
|
9,074,311
|
$
|
9,069,338
|
Percentage
|
||||||||||||||||||||
Ceded to
|
Assumed
|
of Amount
|
||||||||||||||||||
Direct
|
Other
|
from Other
|
Net
|
Assumed
|
||||||||||||||||
Amount
|
Companies
|
Companies
|
Amount
|
to Net
|
||||||||||||||||
2016
|
||||||||||||||||||||
Life Insurance in force ($000)
|
$
|
1,562,335
|
$
|
60,972
|
$
|
109,746
|
$
|
1,611,109
|
6.8
|
%
|
||||||||||
Premiums:
|
||||||||||||||||||||
Life Insurance
|
$
|
64,002,795
|
$
|
600,412
|
$
|
985,555
|
$
|
64,387,938
|
1.5
|
%
|
||||||||||
Accident and Health Insurance
|
113,063
|
-
|
16
|
113,079
|
0.0
|
%
|
||||||||||||||
Total premiums
|
$
|
64,115,858
|
$
|
600,412
|
$
|
985,571
|
$
|
64,501,017
|
1.5
|
%
|
||||||||||
2015
|
||||||||||||||||||||
Life Insurance in force ($000)
|
$
|
1,393,868
|
$
|
61,655
|
$
|
1,468,935
|
$
|
2,801,148
|
52.4
|
%
|
||||||||||
Premiums:
|
||||||||||||||||||||
Life Insurance
|
$
|
54,978,702
|
$
|
798,483
|
$
|
2,110,480
|
$
|
56,290,699
|
3.7
|
%
|
||||||||||
Accident and Health Insurance
|
119,153
|
-
|
11
|
119,164
|
0.0
|
%
|
||||||||||||||
Total premiums
|
$
|
55,097,855
|
$
|
798,483
|
$
|
2,110,491
|
$
|
56,409,863
|
3.7
|
%
|
||||||||||
2014
|
||||||||||||||||||||
Life Insurance in force ($000)
|
$
|
1,301,156
|
$
|
63,457
|
$
|
1,462,340
|
$
|
2,700,039
|
54.2
|
%
|
||||||||||
Premiums:
|
||||||||||||||||||||
Life Insurance
|
$
|
51,938,012
|
$
|
855,266
|
$
|
1,792,910
|
$
|
52,875,656
|
3.4
|
%
|
||||||||||
Accident and Health Insurance
|
133,002
|
-
|
21
|
133,023
|
0.0
|
%
|
||||||||||||||
Total premiums
|
$
|
52,071,014
|
$
|
855,266
|
$
|
1,792,931
|
$
|
53,008,679
|
3.4
|
%
|
Additions
|
Deductions
|
|||||||||||||||
Balance at
|
Charged to
|
Disposals
|
Balance
|
|||||||||||||
Beginning
|
Costs and
|
and
|
at End of
|
|||||||||||||
of Year
|
Expenses
|
Write-offs
|
Year
|
|||||||||||||
For the Year Ended December 31, 2016
|
||||||||||||||||
Accumulated depreciation on real estate
|
$
|
12,210,346
|
$
|
4,873,478
|
$
|
(945,385
|
)
|
$
|
16,138,439
|
|||||||
Allowance for losses on mortgage loans on real estate and construction loans held for investment
|
1,848,120
|
320,798
|
(420,135
|
)
|
1,748,783
|
|||||||||||
Accumulated depreciation on property and equipment
|
18,298,397
|
2,182,724
|
(568,457
|
)
|
19,912,664
|
|||||||||||
Allowance for doubtful accounts on receivables
|
1,700,696
|
920,354
|
(265,568
|
)
|
2,355,482
|
|||||||||||
Allowance for doubtful accounts on collateral loans
|
906,616
|
610,656
|
(397,642
|
)
|
1,119,630
|
|||||||||||
For the Year Ended December 31, 2015
|
||||||||||||||||
Accumulated depreciation on real estate
|
$
|
10,875,419
|
$
|
2,840,489
|
$
|
(1,505,562
|
)
|
$
|
12,210,346
|
|||||||
Allowance for losses on mortgage loans on real estate and construction loans held for investment
|
2,003,055
|
(30,993
|
)
|
(123,942
|
)
|
1,848,120
|
||||||||||
Accumulated depreciation on property and equipment
|
16,419,343
|
2,183,496
|
(304,442
|
)
|
18,298,397
|
|||||||||||
Allowance for doubtful accounts on receivables
|
1,280,859
|
673,743
|
(253,906
|
)
|
1,700,696
|
|||||||||||
Allowance for doubtful accounts on collateral loans
|
693,413
|
545,372
|
(332,169
|
)
|
906,616
|
|||||||||||
For the Year Ended December 31, 2014
|
||||||||||||||||
Accumulated depreciation on real estate
|
$
|
9,658,599
|
$
|
2,009,521
|
$
|
(792,701
|
)
|
$
|
10,875,419
|
|||||||
Allowance for losses on mortgage loans on real estate and construction loans held for investment
|
1,652,090
|
389,409
|
(38,444
|
)
|
2,003,055
|
|||||||||||
Accumulated depreciation on property and equipment
|
15,260,635
|
2,177,165
|
(1,018,457
|
)
|
16,419,343
|
|||||||||||
Allowance for doubtful accounts on receivables
|
1,248,633
|
403,146
|
(370,920
|
)
|
1,280,859
|
|||||||||||
Allowance for doubtful accounts on collateral loans
|
269,175
|
524,192
|
(99,954
|
)
|
693,413
|
SecurityNational Mortgage Company
|
Security National Life Insurance Company
|
Southern Security Life Insurance Company, Inc.
|
Trans-Western Life Insurance Company
|
Memorial Insurance Company of America
|
Reppond Holding Company
|
First Guaranty Insurance Company
|
C & J Financial, LLC
|
SNFC Subsidiary, LLC
|
American Funeral Financial, LLC
|
FFC Acquisition Co., LLC dba Funeral Funding Center
|
Mortician's Choice, LLC
|
Canadian Funeral Financial, LLC
|
Insuradyne Corporation
|
EverLEND Mortgage Company
|
Marketing Source Center, Inc. dba Security National Travel Services
|
California Memorial Estates, Inc.
|
Cottonwood Mortuary, Inc.
|
Deseret Memorial, Inc.
|
Greer-Wilson Funeral Home, Inc.
|
Holladay Cottonwood Memorial Foundation
|
Holladay Memorial Park, Inc.
|
Memorial Estates, Inc.
|
SN Midway, LLC
|
SN Mapleton, LLC
|
Memorial Mortuary, Inc.
|
Paradise Chapel Funeral Home
|
Dry Creek Property Development, Inc.
|
New York Land Holdings, Inc.
|
Security National Funding Company
|
Select Appraisal Management, Inc.
|
Security National Real Estate Services, Inc.
|
5300 Development LLC
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period covered in which this report is being prepared;
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c) |
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d) |
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
By: |
/s/ Scott M. Quist
|
Scott M. Quist
|
|
Chairman of the Board, President and
|
|
Chief Executive Officer
|
|
(Principal Executive Officer)
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period covered in which this report is being prepared;
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c) |
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d) |
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
By: |
/s/ Garrett S. Sill
|
Garrett S. Sill
|
|
Chief Financial Officer and Treasurer
|
|
(Principal Financial Officer)
|
(1) |
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2) |
the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
|
By:
|
/s/ Scott M. Quist
|
Scott M. Quist
|
|
Chairman of the Board, President
|
|
and Chief Executive Officer
|
|
(Principal Executive Officer)
|
(1) |
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2) |
the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
|
By:
|
/s/ Garrett S. Sill
|
Garrett S. Sill
|
|
Chief Financial Officer and Treasurer
|
|
(Principal Financial Officer)
|
^%
M8O[(DBOM(N99;A-ZAES)*TA7;@8VLQ !&1@ \BLSQ%H_B21KHV#V^H6]SJEC
M=I!/,T36JQ20EPIPP93Y18@;<;F(#'AKVAZ!=^&-#ODL!!=ZA=WDMZ\
Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Mar. 27, 2017 |
Jun. 30, 2016 |
|
Entity Registrant Name | SECURITY NATIONAL FINANCIAL CORP | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Trading Symbol | snfca | ||
Amendment Flag | true | ||
Amendment Description | 1 | ||
Entity Central Index Key | 0000318673 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Public Float | $ 22,000,000 | ||
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 | 2016 | ||
Document Fiscal Period Focus | FY | ||
Class A Common Stock | |||
Entity Common Stock, Shares Outstanding | 13,820,079 | ||
Class C Common Stock | |||
Entity Common Stock, Shares Outstanding | 1,901,624 |
Balance Sheet Parenthetical - USD ($) |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Allowance for losses on mortgage loans on real estate and construction loans, held for investment | $ 1,748,783 | $ 1,848,120 |
Accumulated depreciation on real estate held for investment | 16,138,439 | 12,210,346 |
Allowance for doubtful accounts on policy and other loans | $ 1,119,630 | $ 906,616 |
Preferred Stock Par Value | $ 1.00 | $ 1.00 |
Preferred Stock Authorized | 5,000,000 | 5,000,000 |
Class A Common Stock | ||
Common Stock Par Value | $ 2.00 | $ 2.00 |
Common Stock Authorized | 20,000,000 | 20,000,000 |
Common Stock Issued | 13,819,006 | 13,109,100 |
Treasury Stock | 704,122 | 930,546 |
Class B Common Stock | ||
Common Stock Par Value | $ 1.00 | $ 1.00 |
Common Stock Authorized | 5,000,000 | 5,000,000 |
Common Stock Issued | ||
Common Stock Outstanding | ||
Class C Common Stock | ||
Common Stock Par Value | $ 2.00 | $ 2.00 |
Common Stock Authorized | 3,000,000 | 3,000,000 |
Common Stock Issued | 1,902,229 | 1,709,640 |
Comprehensive Income Statement - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Comprehensive Income Statement | |||
Net earnings | $ 12,188,627 | $ 13,351,441 | $ 8,216,832 |
Changes in: | |||
Net unrealized gains on derivative instruments | 6,490 | 10,628 | 16,433 |
Net unrealized gains (losses) on available for sale securities | 757,690 | (771,343) | (65,848) |
Other comprehensive gain (loss) | 764,180 | (760,715) | (49,415) |
Comprehensive income | $ 12,952,807 | $ 12,590,726 | $ 8,167,417 |
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, 2013 | $ 23,614,574 | $ 2,660,382 | $ 23,215,875 | $ 310,772 | $ 40,574,211 | $ (2,624,625) | $ 87,751,189 |
Prior period adjustment | $ 6,405,271 | $ 6,405,271 | |||||
Balance at January 1, 2014 (As Restated) | 23,614,574 | 2,660,382 | 23,215,875 | 310,772 | 46,979,482 | (2,624,625) | 94,156,460 |
Other comprehensive income | $ (49,415) | $ (49,415) | |||||
Grant of stock options | $ 391,220 | 391,220 | |||||
Reverse stock true-up | $ 30 | $ (30) | |||||
Exercise of stock options | $ 108,824 | (34,800) | 74,024 | ||||
Sale of treasury stock | 361,679 | $ 538,171 | 899,850 | ||||
Stock Dividends | 1,190,040 | 132,767 | 1,997,147 | (3,319,954) | |||
Conversion Class C to Class A | 5,042 | (5,041) | (2) | 1 | |||
Net earnings | 8,216,832 | 8,216,832 | |||||
Balance at Dec. 31, 2014 | 24,918,480 | 2,788,138 | 25,931,119 | 261,357 | 51,876,331 | (2,086,454) | 103,688,971 |
Other comprehensive income | (760,715) | (760,715) | |||||
Grant of stock options | 387,608 | 387,608 | |||||
Exercise of stock options | 47,922 | 483,304 | (55,717) | (441,832) | 33,677 | ||
Sale of treasury stock | 666,840 | 530,396 | 1,197,236 | ||||
Purchase of treasury stock | (181,539) | (181,539) | |||||
Stock Dividends | 1,248,966 | 150,670 | 3,302,732 | (4,702,368) | |||
Conversion Class C to Class A | 2,832 | (2,832) | |||||
Net earnings | 13,351,441 | 13,351,441 | |||||
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 |
Other comprehensive income | 764,180 | 764,180 | |||||
Grant of stock options | 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) | |||||
Net earnings | 12,188,627 | 12,188,627 | |||||
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 |
Note 1: Significant Accounting Policies |
12 Months Ended |
---|---|
Dec. 31, 2016 | |
Notes | |
Note 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 accounting principles generally accepted in the United States of America (GAAP). The presentation of certain amounts in prior years has been reclassified to conform to the 2016 presentation.
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 generally accepted accounting principles. Actual results could differ from those estimates.
Material estimates that are particularly susceptible to significant changes in the near term are those used in determining the value of derivative assets and liabilities, those used in determining deferred acquisition costs and the value of business acquired, those used in determining the value of mortgage loans foreclosed to real estate held for investment, those used in determining the liability for future policy benefits and unearned revenue, those used in determining the estimated future costs for pre-need sales, those used in determining the value of mortgage servicing rights, those used in determining allowances for loan losses for mortgage loans on real estate, those used in determining loan loss reserve, and those used in determining deferred tax assets and liabilities. Although some variability is inherent in these estimates, management believes the amounts provided are fairly stated in all material respects.
Investments
The Companys 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 on real estate and construction loans held for investment are carried at their unpaid principal balances adjusted for charge-offs and the related allowance for loan losses. The Company defers related material loan origination fees, net of related direct loan origination costs, and amortizes the net fees over the term of the loans.
Mortgage loans are collateral dependent and require an appraisal at the time of underwriting and funding. Generally, the Company will fund a loan not to exceed 80% of the loans collateral fair market value. Amounts over 80% will require additional collateral or mortgage insurance by an approved third party insurer. Once a loan is deemed to be impaired the Company will review the market value of the collateral and provide an allowance for any impairment.
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 certificates of deposit and commercial paper with maturities of up to one year.
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 managements 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 Companys 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 debt 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
Loans held for sale are carried at the lower of cost or market and include the amounts due from third party investors. Loans held for sale are also shown net of direct selling revenues and costs. Based on the short-term nature of these assets, the Company has no related allowance for loan losses recorded for these assets.
Restricted Assets
Restricted assets are assets held in a trust account for future mortuary services and merchandise and consist of cash; participations in mortgage loans with Security National Life; mutual funds carried at cost; equity securities carried at fair market value; and a surplus note with Security National Life. 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 percent 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.
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 are amortized over the lesser of the useful life or remaining lease terms.
Recognition of Insurance Premiums and Other Considerations
Premiums and other consideration for traditional life insurance products (which include those products with fixed and guaranteed premiums and benefits and consist principally of whole life insurance policies, limited payment life insurance policies, and certain annuities with life contingencies) are recognized as revenues when due from policyholders. Premiums and other consideration for interest-sensitive insurance policies (which include universal life policies, interest-sensitive life policies, deferred annuities, and annuities without life contingencies) are recognized when earned and consist of amounts assessed against policyholder account balances during the period for policy administration charges and surrender charges.
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 accounting principles generally accepted in the United States of America 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.
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 Companys subsequent accounting for MSRs is based on the class of MSRs. The Company has identified two classes of MSRs: MSRs backed by mortgage loans with initial term of 30 years and MSRs backed by mortgage loans with initial term of 15 years. The Company distinguishes between these classes of MSRs due to their differing sensitivities to change in value as the result of changes in market. After being initially recorded at fair value, MSRs backed by mortgage loans are accounted for using the amortization method. MSR amortization is determined by amortizing the balance straight-line over an estimated seven and nine year life.
The Company periodically assesses MSRs for impairment. Impairment occurs when the current fair value of the MSR falls below the assets 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.
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 applicants committed rate. The probability that a loan will not be funded within the terms of the mortgage loan commitment also is influenced by the source of the applications (retail, broker or correspondent channels), proximity to rate lock expiration, purpose for the loan (purchase or refinance) product type and the application approval status. The Company has developed fallout estimates using historical data that take into account all of the variables, as well as renegotiations of rate and point commitments that tend to occur when mortgage rates fall. These fallout estimates are used to estimate the number of loans that the Company expects to be funded within the terms of the loan commitments and are updated periodically to reflect the most current data.
The Company estimates the fair value of a loan commitment based on the change in estimated fair value of the underlying mortgage loan, quoted MBS prices, estimates of the fair value of mortgage servicing rights, and an estimate of the probability that the mortgage loan will fund within the terms of the commitment net of estimated commission expense. The change in fair value of the underlying mortgage loan is measured from the date the loan commitment is issued and is shown net of expenses. Following issuance, the value of a loan commitment can be either positive or negative depending upon the change in value of the underlying mortgage loans.
Forward Sale Commitments
The Company utilizes forward commitments to economically hedge the price risk associated with its outstanding mortgage loan commitments. A forward commitment protects the Company from losses on sales of the loans arising from exercise of the loan commitments. Management expects these types of commitments will experience changes in fair value opposite to changes in fair value of the loan commitments, thereby reducing earnings volatility related to the recognition in earnings of changes in the values of the commitments.
The net changes in fair value of all loan commitments and forward sale commitments are shown in current earnings as a component of mortgage fee income.
Call and Put Options
The Company uses a strategy of selling out of the money call options on its available for sale equity securities as a source of revenue. The options give the purchaser the right to buy from the Company specified equity securities at a set price up to a pre-determined date in the future. The Company uses the strategy of selling put options as a means of generating cash or purchasing equity securities at lower than current market prices. The Company receives an immediate payment of cash for the value of the option and establishes a liability for the fair value of the option. The liability for options is adjusted to fair value at each reporting date. In the event an option is exercised, the Company recognizes a gain on the sale of the equity security and a gain on the sale of the option. If the option expires unexercised, the Company recognizes a gain from the sale of the option.
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, other loans and receivables in accordance with generally accepted accounting principles.
Receivables are the result of cemetery and mortuary operations, mortgage loan operations and life insurance operations. The allowance is based upon the Companys historical experience for collectively evaluated impairment. Other allowances are based upon receivables individually evaluated for impairment. Collectability of the cemetery and mortuary receivables is significantly influenced by current economic conditions. The critical issues that impact recovery of mortgage loan operations are interest rate risk, loan underwriting, new regulations and the overall economy.
The Company provides allowances for losses on its mortgage loans held for investment through an allowance for loan losses. The allowance is comprised of two components. The first component is an allowance for collectively evaluated impairment that is based upon the Companys 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. In addition, when a mortgage loan is past due more than 90 days, the Company does not accrue any interest income. When a loan becomes delinquent, the Company proceeds to foreclose on the real estate and all expenses for foreclosure are expensed as incurred. Once foreclosed, an adjustment for the lower of cost or fair value is made, if necessary, and the amount is classified as real estate held for investment. The Company will rent the properties until it is deemed desirable to sell them.
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 Companys 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.
Loan Loss Reserve
The mortgage loan loss reserve is an estimate of probable losses at the balance sheet date that the Company will realize in the future on mortgage loans sold to third party investors.
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 A make whole demand occurs when an investor forecloses on a property and then sells the property. The make whole amount is calculated as the difference between the original unpaid principal balance, accrued interest and fees, less the sale proceeds.
Repurchase demand A repurchase demand usually occurs when there is a significant payment default, error in underwriting or detected loan fraud.
Indemnification demand On certain loans the Company has negotiated a set fee that is to be paid in lieu of repurchase. The fee varies by investor and by loan product type.
Additional information related to the Loan Loss Reserve is included in Note 2.
Future Life, Annuity and Other Policy Benefits
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 4.5% 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%.
Participating Insurance
Participating business constituted 2% of insurance in force for the years ended 2016, 2015 and 2014. 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.
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 a minimum percentage 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 Companys 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.
Mortgage Fee Income
Mortgage fee income consists of origination fees, processing fees and certain other income related to the origination and sale of mortgage loans. For mortgage loans sold to third party investors, mortgage fee income and related expenses are recognized pursuant to GAAP at the time the sales of mortgage loans comply with the sales criteria for the transfer of financial assets, which are: (i) the transferred assets have been isolated from the Company and its creditors, (ii) the transferee has the right to pledge or exchange the mortgage, and (iii) the Company does not maintain effective control over the transferred mortgage.
The Company has determined that all three criteria are met at the time a loan is purchased from a third party investor. Until the loan is purchased, all direct selling revenues and costs are deferred.
The Company, through its mortgage subsidiaries, sells mortgage loans to third party investors without recourse. However, it may be required to repurchase a loan or pay a fee instead of repurchase under certain events, which include the following:
· Failure to deliver original documents specified by the investor, · The existence of misrepresentation or fraud in the origination of the loan,
· The loan becomes delinquent due to nonpayment during the first several months after it is sold, · Early pay-off of a loan, as defined by the agreements, · Excessive time to settle a loan, · Investor declines purchase, and · Discontinued product and expired commitment.
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:
· Research reasons for rejection, · Provide additional documents, · Request investor exceptions, · Appeal rejection decision to purchase committee, and · Commit to secondary investors.
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 sales revenue that was to be received from a third-party investor is written off against the loan loss reserve. Any loan that later becomes delinquent is evaluated by the Company at that time and any impairment is adjusted accordingly.
Determining Lower of Cost or Market
Cost 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:
· For loans that have an active market the Company uses the market price on the repurchased date. · For loans where there is no market but there is a similar product, the Company uses the market value for the similar product on the repurchased date. · For loans where no active market exists on the repurchased date, the Company determines that the unpaid principal balance best approximates the market value on the repurchased date, after considering the fair value of the underlying real estate collateral and estimated future cash flows.
The appraised value of the real estate underlying the original mortgage loan adds support to the Companys 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. 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 Company provides an allowance for loan losses on its mortgage loans held for investment. The allowance is comprised of two components. The first component is an allowance for collectively evaluated impairment that is based upon the Companys historical experience in collecting similar receivables. The second component is based upon individual evaluation of loans that are determined to be impaired.
Commercial Loans
Each quarter, management reviews the current commercial loans and determines if an allowance is required based on the Companys actual experience of losses on impaired commercial loans. To date, the Company has not incurred any significant losses. The carrying value of all commercial loans is supported by appraisals and cash flow analysis of revenue received. Also, the Company does not accrue any interest income or capitalize any of the foreclosure costs on impaired commercial loans.
Residential and Construction Loans The Company believes that in an orderly market fair value will approximate the replacement cost of a home and the rental income provides a cash flow stream for investment analysis. The Company believes the highest and best use of the properties are as income producing assets since it is the Companys intent to hold the properties as rental properties, matching the income from the investment in rental properties with the funds required for future estimated policy claims. Accordingly, the fair value determination will be weighted more heavily toward the rental analysis.
It should be noted that for replacement cost, when determining the fair value of mortgage properties, the Company uses Marshall and Swift, a provider of building cost information to the real estate construction industry. For the investment analysis, the Company used market data based upon its real estate operation experience and projected the present value of the net rental income over seven years. The Company used 20% of the projected cash flow analysis and 80% of the replacement cost to approximate fair value of the collateral.
Each quarter the Company also analyzes its current loan portfolio and determines the level of allowance needed for loans that are listed as current in the portfolio. The basis of the analysis places a higher weight on loans with high loan to value ratios, those that lack mortgage insurance, and certain loan types that have a higher percentage of default based on the Companys experience.
Each quarter the Company makes further analysis of the foreclosed properties to determine if any additional allowances are necessary by comparing national indexes of loan to value ratios by region to the Companys loan to value ratios. Based upon the above procedures, the Companys management believes that residential and residential construction loans are reflected in the Companys financial statements at the lower of cost or market in accordance with GAAP requirements.
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.
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.
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.
Earnings Per Common Share
The Company computes earnings per share in accordance with GAAP 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.
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 method. Stock option compensation expense is recognized over the period during which an employee is required to provide service in exchange for the award.
Concentration of Credit Risk
For a description of the geographic concentration risk regarding mortgage loans and real estate, refer to Note 2 of the Notes to Consolidated Financial Statements.
Advertising
The Company expenses advertising costs as incurred.
Recent Accounting Pronouncements
ASU No. 2016-13: Financial Instruments Credit Losses (Topic 326) Issued in June 2016, ASU 2016-13 amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in current generally accepted accounting principles (GAAP) and, instead, requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available for sale debt securities, credit losses should be measured in a manner similar to current GAAP, however Topic 326 will require that credit losses be presented as an allowance rather than as a write-down. The new authoritative guidance is effective for interim and annual periods beginning after December 15, 2019. The Company is in the process of evaluating the potential impact of this standard.
ASU No. 2016-02: Leases (Topic 842) - Issued in February 2016, ASU 2016-02 supersedes the leases requirements in ASC Topic 840, Leases, and was issued to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The new authoritative guidance is effective for interim and annual periods beginning after December 15, 2018. The Company is in the process of evaluating the potential impact of this standard.
ASU No. 2016-01: Financial Instruments Overall (Topic 825-10) Issued in January 2016, ASU 2016-01 changes the accounting for non-consolidated equity investments that are not accounted for under the equity method of accounting by requiring changes in fair value to be recognized in income. Under current guidance, changes in fair value for investments of this nature are recognized in accumulated other comprehensive income as a component of stockholders equity. Additionally, ASU 2016-01 simplifies the impairment assessment of equity investments without readily determinable fair values; requires entities to use the exit price when estimating the fair value of financial instruments; and modifies various presentation disclosure requirements for financial instruments. The new authoritative guidance is effective for interim and annual periods beginning after December 15, 2017. The Company is in the process of evaluating the potential impact of this standard.
ASU No. 2014-09: Revenue from Contracts with Customers (Topic 606) - Issued in May 2014, ASU 2014-09 supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition, and requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Insurance contracts are excluded from the scope of this new guidance. The new authoritative guidance is effective for interim and annual periods beginning after December 15, 2017. The Company is in the process of evaluating the potential impact of this standard, which is not expected to be material to the Companys results of operations or financial position.
The Company has reviewed other recent accounting pronouncements and has determined that they will not significantly impact the Companys results of operations or financial position. |
Note 2: Investments |
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Note 2: Investments | 2) Investments
The Companys investments in fixed maturity securities held to maturity and equity securities available for sale as of December 31, 2016 are summarized as follows:
The Companys investments in fixed maturity securities held to maturity and equity securities available for sale as of December 31, 2015 are summarized as follows:
Fixed Maturity Securities
The following tables summarize unrealized losses on fixed maturities securities, which are carried at amortized cost, at December 31, 2016 and 2015. The unrealized losses were primarily related to interest rate fluctuations. The tables set forth unrealized losses by duration and number of investment positions, together with the fair value of the related fixed maturity securities:
There were 250 securities with unrealized losses of 93.9% of amortized cost at December 31, 2016. There were 123 securities with unrealized losses of 87.2% of amortized cost at December 31, 2015. During the years ended December 31, 2016, 2015 and 2014, an other than temporary decline in market value resulted in the recognition of credit losses on fixed maturity securities of $100,000, $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, 2016 and 2015. 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:
The average market value of the equity securities available for sale was 81.4% and 74.7% of the original investment as of December 31, 2016 and 2015, respectively. The intent of the Company is to retain equity securities for a period of time sufficient to allow for the recovery in fair value. However, the Company may sell equity securities during a period in which the fair value has declined below the amount of the original investment. In certain situations, new factors, including changes in the business environment, can change the Companys previous intent to continue holding a security. During the years ended December 31, 2016, 2015, and 2014, an other than temporary decline in the market value resulted in the recognition of an impairment loss on equity securities of $170,358, $293,714, and $44,240, 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, 2016, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because certain borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
The cost and estimated fair value of available for sale securities at December 31, 2016, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because certain borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Equities are valued using the specific identification method.
The Companys realized gains and losses and other than temporary impairments from investments and other assets for the years ended December 31 are summarized as follows:
The net carrying amount for disposals of securities classified as held to maturity was $2,380,027, $2,569,712 and $2,840,709, for the years ended December 31, 2016, 2015 and 2014, respectively. The net realized gain related to these disposals was $155,346, $311,752 and $20,722, for the years ended December 31, 2016, 2015 and 2014, 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.
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, 2016, other than investments issued or guaranteed by the United States Government.
Major categories of net investment income for the years ended December 31, are as follows:
Net investment income includes net investment income earned by the restricted assets of the cemeteries and mortuaries of $419,360, $369,632 and $356,369 for the years ended December 31, 2016, 2015 and 2014, 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 $9,269,121 and $8,815,542 at December 31, 2016 and 2015, 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 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 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 Companys 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 13 commercial properties in 7 states. These properties include industrial warehouses, office buildings, retail centers and includes the redevelopment and expansion of its corporate campus in Salt Lake City Utah. 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 different class of asset.
The following is a summary of the Companys investment in commercial real estate for the periods presented:
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) 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, 2016, SNRE manages 129 residential properties in 8 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 Companys investment in residential real estate for the periods presented:
Real Estate Owned and Occupied by the Company
The primary business units of the Company occupy a portion of the real estate owned by the Company. Currently, the Company occupies nearly 80,000 square feet, or 10% of the overall commercial real estate holdings.
As of December 31, 2016, real estate owned and occupied by the company is summarized as follows:
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, 2016, the Company has 42%, 14%, 9%, 8% and 7% of its mortgage loans from borrowers located in the states of Utah, California, Texas, Florida and Nevada, respectively. The mortgage loans on real estate balances on the consolidated balance sheet are reflected net of an allowance for loan losses of $1,748,783 and $1,848,120 at December 31, 2016 and 2015, respectively.
The Company establishes a valuation allowance for credit losses in its portfolio. The following is a summary of the allowance for loan losses as a contra-asset account for the periods presented:
The following is a summary of the aging of mortgage loans for the periods presented.
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:
Credit Risk Profile Based on Performance Status
The Companys 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 Companys performing and non-performing mortgage loans were as follows:
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 $172,000 and $268,000 as of December 31, 2016 and 2015, respectively.
The following is a summary of mortgage loans on a non-accrual status for the periods presented.
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, 2016 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.
Loan Loss Reserve
When a repurchase demand corresponding to a mortgage loan previously 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:
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. |
Note 3: Receivables |
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Note 3: Receivables | 3) Receivables
Receivables consist of the following:
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Note 4: Value of Business Acquired |
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Note 4: Value of Business Acquired | 4) Value of Business Acquired and Goodwill
Information with regard to value of business acquired is as follows:
Presuming no additional acquisitions, net amortization charged to income is expected to approximate $1,119,000, $1,041,000, $966,000, $899,000, and $835,000 for the years 2017 through 2021. Actual amortization may vary based on changes in assumptions or experience. As of December 31, 2016, value of business acquired is being amortized over a weighted average life of 5.4 years.
Information with regard to goodwill acquired is as follows:
Goodwill is not amortized but tested annually for impairment. The annual impairment tests resulted in no impairment of goodwill. |
Note 5: Property and Equipment |
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Note 5: Property and Equipment | 5) Property and Equipment
The cost of property and equipment is summarized below:
Depreciation expense for the years ended December 31, 2016, 2015 and 2014 was $2,182,724, $2,183,496 and $2,177,165, respectively. |
Note 6: Bank and Other Loans Payable |
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Note 6: Bank and Other Loans Payable | 6) Bank and Other Loans Payable
Bank loans payable are summarized as follows:
During 2001, the Company entered into an interest rate swap instrument that effectively fixed the interest rate on the note payable at 6.34% per annum. Management considers the interest rate swap instrument an effective cash flow hedge against the variable interest rate on the bank note since the interest rate swap mirrors the term of the note payable and expires on the maturity date of the bank loan it hedges. The interest rate swap is a derivative financial instrument carried at its fair value.
In the event the swap is terminated, any resulting gain or loss would be deferred and amortized to interest expense over the remaining life of the bank loan it hedged. In the event of early extinguishment of the hedged bank loan, any realized or unrealized gain or loss from the hedging swap would be recognized in income coincident with the extinguishment.
At December 31, 2016 and 2015, the fair value of the interest rate swap was an unrealized loss of $3,308 and $13,947, respectively, and was computed based on the underlying variable Libor rate plus 1.65%, or 2.65% per annum. The unrealized loss resulted in a derivative liability of $3,308 and $13,947 and has been reflected in accumulated other comprehensive income. The change in accumulated other comprehensive income from the interest rate swap in 2016 and 2015 was $10,639 and $17,423, respectively. The fair value of the interest rate swap was derived from a proprietary model of the bank from whom the interest rate swap was purchased and to whom the note is payable.
The Company has a $2,000,000 revolving line-of-credit with a bank with interest payable at the prime rate minus .75% (3.00% at December 31, 2016), secured by the capital stock of Security National Life and maturing September 30, 2017, renewable annually. At December 31, 2016, the Company was contingently liable under a standby letter of credit aggregating $560,350, 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 issued as a security deposit to guarantee payment of final bills for electric and gas utility services for a commercial real estate property owned by the Company in Wichita, Kansas. 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. As of December 31, 2016, there were no amounts outstanding under the revolving line-of-credit.
The Company has a $2,500,000 revolving line-of-credit with a bank with interest payable at the overnight LIBOR rate plus 2.25% (2.9375% at December 31, 2016) maturing September 14, 2017. At December 31, 2016, 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. The Company does not expect any material losses to result from the issuance of the standby letters of credit. As of December 31, 2016, there were no amounts outstanding under the revolving line-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, 2017. 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, 2016.
The following tabulation shows the combined maturities of bank loans payable, lines of credit and notes and contracts payable:
Interest expense in 2016, 2015 and 2014 was $5,111,868, $4,458,612 and $2,994,429, respectively. |
Note 7: Cemetery and Mortuary Endowment Care and Pre need Merchandise Funds |
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Note 7: Cemetery and Mortuary Endowment Care and Pre need Merchandise Funds | 7) Cemetery and Mortuary Endowment Care and Pre need Merchandise Funds
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 generally accepted accounting principles. 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 obligation are as follows:
The Company has also established certain restricted trust investments to provide for future merchandise and service obligations incurred in connection with its pre-need sales.
Assets in the restricted asset account are summarized as follows:
A surplus note receivable in the amount of $4,000,000 at December 31, 2016 and 2015, from Security National Life, was eliminated in consolidation. See Notes 1 and 16 for additional information regarding restricted assets. |
Note 8: Income Taxes |
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Note 8: Income Taxes | 8) Income Taxes
The Companys income tax liability (benefit) is summarized as follows:
Significant components of the Companys deferred tax (assets) and liabilities are approximately as follows:
The valuation allowance relates to differences between recorded deferred tax assets and liabilities and ultimate anticipated realization. For the year ended December 31, 2016, the Company recorded a valuation allowance of $431,802 that relates to the acquisition of First Guaranty Insurance Company that was completed on July 11, 2016.
The Company paid $2,667,918, $2,716,161 and $408,939 in income taxes for the years ended December 31, 2016, 2015 and 2014, respectively.
The Companys income tax expense (benefit) is summarized as follows for the years ended December 31:
The reconciliation of income tax expense at the U.S. federal statutory rates is as follows:
At December 31, 2016, the Company had no significant unrecognized tax benefits. As of December 31, 2016, 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 2013 through 2016 are subject to examination by taxing authorities. |
Note 9: Reinsurance, Commitments and Contingencies |
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Note 9: Reinsurance, Commitments and Contingencies | 9) 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 2016 and 2015. 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 $110,000 (unaudited) and approximately $1,468,935,000 (unaudited) at December 31, 2016 and 2015, respectively. The Company terminated its participation in Servicemembers Group Life Insurance in 2016 causing this assumed insurance in force amount to decrease.
Reinsurance Agreement with North America Life Insurance Company
On May 8, 2015, the Company, through its wholly owned subsidiary, Security National Life, signed a paid-up business offer under a coinsurance agreement that was effective December 1, 2010 to reinsure certain life insurance policies from North America Life Insurance Company (North America Life). Pursuant to the paid-up business offer, North America Life ceded and transferred to Security National Life all contractual obligations and risks under the coinsured policies. Security National Life paid a ceding commission to North America Life in the amount of $281,908. As a result of the ceding commission, North America Life transferred $8,900,282 of cash and $9,182,190 in statutory reserves, or liabilities, to Security National Life.
Reinsurance Agreement with American Republic Insurance Company
On February 11, 2015, the Company, through its wholly owned subsidiary, Security National Life, signed a coinsurance agreement to reinsure certain life insurance policies from American Republic Insurance Company (American Republic). The policies were previously reinsured by North America Life under a coinsurance agreement between World Insurance Company (World Insurance) and North America Life that was entered into on July 22, 2009, which was subsequently commuted. World Insurance was subsequently purchased by and merged into American Republic. The current coinsurance agreement is now between Security National Life and American Republic and became effective on January 1, 2015. As part of the coinsurance agreement, American Republic transferred all contractual obligations and risks to Security National Life and Security National Life took control of $15,004,771 of assets in a trust account held by Texas Capital Bank as the trustee. The assets have subsequently been moved to a trust account held by Zions Bank as the trustee.
Mortgage Loan Loss Settlements
Future loan losses can be extremely difficult to estimate. However, management believes that the Companys 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 in years ended December 31, 2016, 2015 and 2014 were $1,700,000 and $3,449,103, and $1,000,000, 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, 2016 and 2015, the balances were $628,000 and $2,806,000, respectively.
Settlement of Investigation by U.S. Department of Justice and the Office of the Inspector General for the U.S. Department of Housing and Urban Development (HUD) of Certain FHA-Insured Mortgage Loans Originated
On September 30, 2016, the Company, through its wholly owned subsidiary, SecurityNational Mortgage, announced the execution of a settlement agreement with the U.S. Department of Justice and the United States Attorney's Office in connection with the origination and underwriting by SecurityNational Mortgage of certain Federal Housing Administration (FHA) insured loans. SecurityNational Mortgage, like many other high volume FHA-approved lenders, was being reviewed by the U.S. Department of Justice and the Office of the Inspector General of the U.S. Department of Housing and Urban Development (HUD) for loan origination activities that occurred as long as nine years ago.
Without any admission of liability and in order to avoid the extended distractions and expenses associated with protracted litigation, SecurityNational Mortgage made a business decision to resolve this matter. Pursuant to the settlement agreement, SecurityNational Mortgage was required to make a payment in the amount of $4,250,000 to the U.S. Department of Justice, which payment was made on October 4, 2016. SecurityNational Mortgage continues to be able to originate FHA-insured mortgage loans and participate fully in all FHA programs as this settlement agreement does not affect SecurityNational Mortgage's status with the Department of Housing and Urban Development. In addition, this settlement does not include any allegations or findings against any particular individuals, such as officers, directors, employees or agents of SecurityNational Mortgage.
Mortgage Loan Loss Litigation
Lehman Brothers and Aurora Loan Services Litigation - Utah
On April 15, 2005, SecurityNational Mortgage entered into a Loan Purchase Agreement with Lehman Brothers Bank, FSB (Lehman Bank) which agreement incorporated a Seller's Guide. Pursuant to the Loan Purchase Agreement, Lehman Bank purchased mortgage loans from time to time from SecurityNational Mortgage. Lehman Bank asserted that certain of the mortgage loans that it purchased from SecurityNational Mortgage contained alleged misrepresentations and early payment defaults. As a result, Lehman Bank contended it had the right to require SecurityNational Mortgage to repurchase certain loans or be liable for losses related to such Loans under the Loan Purchase Agreement. SecurityNational Mortgage disagreed with these claims.
On December 17, 2007, SecurityNational Mortgage entered into an Indemnification Agreement with Lehman Bank and Aurora Loan Services LLC (Aurora). Under the terms of the Indemnification Agreement, SecurityNational Mortgage agreed to indemnify Lehman Bank and Aurora for certain amounts of actual losses, as defined, that Lehman Bank and Aurora may incur on account of the alleged breaches and early payment defaults pertaining to certain identified loans. A reserve account was set up to cover said losses. From the time the reserve account was established, approximately $4,300,000 was taken from the reserve account to indemnify Lehman Bank and Aurora for alleged losses. On March 28, 2011, Aurora Bank FSB (formerly known as Lehman Brothers Bank, FSB) (Aurora Bank) and Aurora allegedly assigned certain rights and remedies under the Indemnification Agreement to Lehman Brothers Holdings, Inc. ("Lehman Holdings").
On May 11, 2011, SecurityNational Mortgage filed a complaint against Aurora Bank and Aurora in the United States District Court, Utah, which was assigned to Judge David Nuffer. The allegations in the complaint included breach of the Indemnification Agreement. SecurityNational Mortgage claimed it was entitled to a judgment of approximately $4,000,000 against Aurora Bank, as well as Aurora to the extent of its involvement, for payments which should not have been taken from the reserve account.
On June 8, 2011, Lehman Holdings, which had filed for bankruptcy in September 2008, filed a complaint in the United States District Court, Utah against SecurityNational Mortgage. The case was assigned to Judge Ted Stewart. The complaint alleged claims for damages for breach of contract and breach of warranty pursuant to the Loan Purchase Agreement, as well as alleged early payment default loans, and initially claimed damages in excess of $5,000,000. Lehman Holdings further alleged that Aurora Bank sold mortgage loans to it and assigned contractual rights and remedies. SecurityNational Mortgage strongly disagreed with the claims in Lehman Holdings complaint.
On November 29, 2016, Judge Nuffer entered a judgment in favor of SecurityNational Mortgage Company, jointly and severally against Aurora Commercial Corporation (successor by merger to Aurora Bank), Aurora Bank and Aurora. The amount of the judgment was $3,892,974 principal, plus interest through May 31, 2014 in the amount of $1,674,240, plus interest for each day after May 31, 2014 until judgment (dated November 29, 2016) at the rate of $960 per diem.
In December 2016, the cases before Judge Nuffer and Judge Stewart were settled. Final settlement agreements were executed on December 20, 2016, which were effective as of December 9, 2016. Under the terms of the settlement, payments were made by Aurora Commercial to SecurityNational Mortgage, and by SecurityNational Mortgage to Lehman Holdings. The net result of the settlement involving both of the Utah cases was that $2,125,000 more was paid to Lehman Holdings. Additionally, the release agreed to by the parties covered claims arising from the sale of mortgage loans by SecurityNational Mortgage to Aurora Bank or Lehman Holdings that were included in the Utah cases.
Lehman Brothers Litigation Delaware and New York
In January 2014, Lehman Holdings entered into a settlement with the Federal National Mortgage Association (Fannie Mae) concerning the mortgage loan claims asserted by Fannie Mae against Lehman Holdings that were based on alleged breaches of certain representations and warranties by Lehman Holdings. Lehman Holdings had acquired these loans from Aurora Bank, which in turn purchased the loans from 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 its 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 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 declaration that SecurityNational Mortgage sought in its Delaware lawsuit, and for damages relating to the defendants obligations under 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. A Case Management Order (CMO) was entered on November 1, 2016. On December 27, 2016, pursuant to the CMO, Lehman Holdings filed a Second Amended Complaint against SecurityNational Mortgage. The case is presently in a motion period and no Answer 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 such 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, 2016, are approximately as follows:
Total rent expense related to non-cancelable operating leases for the years ended December 31, 2016, 2015, and 2014 was approximately $7,879,000, $7,199,000 and $5,589,000, 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, 2016, the Companys commitments were approximately $56,422,000, for these loans of which $40,800,000 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. At December 31, 2016, $416,576 of reserves was established related to such insurance programs versus $834,855 at December 31, 2015.
The Company is a defendant in various other legal actions arising from the normal conduct of business. Management believes that none of the actions will have a material effect on the Companys financial position or results of operations. Based on managements assessment and legal counsels 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. |
Note 10: Retirement Plans |
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Note 10: Retirement Plans | 10) 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 Companys contributions are allocated to eligible employees based on the ratio of each eligible employees compensation to total compensation for all eligible employees during each year. The Company did not make any contributions for the years ended December 31, 2016, 2015 and 2014. At December 31, 2016, the ESOP held 500,450 shares of Class A and 265,623 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, $18,000 and $17,500 for the years 2016, 2015 and 2014, 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 employees total annual compensation and matched 50% of 4% to 5% of an employees annual compensation. The match was in Company stock. The Companys contribution for the years ended December 31, 2016, 2015 and 2014 was $1,429,962, $1,197,236 and $899,850, respectively under the Safe Harbor plan.
In 2001, the Companys 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 Companys Board of Directors. The Company did not make any contributions for 2016, 2015 and 2014.
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. Quists life and a whole life insurance policy in the amount of $500,000 on Mr. Quists life. In the event of disability, Mr. Quists 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. Quists 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 $511,443, $999,961 and $833,183 during the years ended December 31, 2016, 2015 and 2014, respectively, to cover the present value of anticipated retirement benefits under the employment agreement. The liability accrued is $3,776,368 and $3,264,925 as of December 31, 2016 and 2015, respectively and is included in Other liabilities and accrued expenses on the Consolidated Balance Sheet.
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. Becksteads 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 $148,557, $320,039 and $154,817 during the years ended December 31, 2016, 2015 and 2014, respectively, to cover the present value of the retirement benefits under the employment agreement. The company paid $133,842 in retirement compensation to Mr. Beckstead during the year ended December 31, 2016. The liability accrued was $1,109,277 and $1,093,720 as of December 31, 2016 and 2015, respectively and is included in Other liabilities and accrued expenses on the Consolidated Balance Sheet.
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Note 11: Capital Stock |
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Note 11: Capital Stock | 11) 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 companys 401(k) and Deferred Compensation Plans.
Stockholders of both Class A and Class C common stock have received 5% stock dividends in the years 1990 through 2016, as authorized by the Companys 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.
On July 2, 2014, the stockholders approved a 1-for-10 reverse stock split of the Companys Class C common stock at the Annual Meeting of Stockholders. Concurrently with the approval of the reverse stock split, the stockholders also approved amendments to Article V of the Companys Articles of Incorporation to provide that each share of Class C common stock will have weighted voting of ten votes per share and that each share of Class C common stock may be converted into one share of Class A common stock. The Board of Directors had previously approved the reverse stock split and weighted voting of Class C common stock. Prior to the approval of the reverse stock split and weighted voting of Class C shares, the Companys Articles of Incorporation provided that each share of Class C common stock had one vote per share and that Class C common shares were convertible into Class A common shares at a conversion ratio of ten shares of Class C common stock for one share of Class A common stock.
The reverse stock split and weighted voting of the Company's Class C common stock became effective on August 1, 2014, when the Articles of Restatement and Amendment to the Company's Articles of Incorporation were filed with the Utah Division of Corporations and Commercial Code. The reverse stock split affected all of the holders of the Company's Class C common stock uniformly but did not affect any Class C stockholder's percentage ownership interest in the Company or proportionate voting power, except for insignificant changes that resulted from the rounding up of fractional shares. Additionally, the reverse stock split did not impact the existing shares of Class A common stock.
The following table summarizes the activity in shares of capital stock for the three-year period ended December 31, 2016:
(1) Class C shares have been retroactively adjusted for the effect of the 1-for-10 reverse stock split that was approved by the stockholders in 2014.
Earnings per share amounts have been retroactively adjusted for the effect of annual stock dividends. In accordance with accounting principles generally accepted in the United States of America, the basic and diluted earnings per share amounts were calculated as follows:
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Note 12: Stock Compensation Plans |
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Note 12: Stock Compensation Plans | 12) 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 $343,577, $387,608 and $391,220 has been recognized under these plans for the years ended December 31, 2016, 2015 and 2014, respectively. As of December 31, 2016, the total unrecognized compensation expense related to the options issued in December 2016 was $374,914, which is expected to be recognized over the vesting period of one year.
The weighted-average fair value of each option granted in 2016 under the 2013 Plan, is estimated at $2.17 for the December 21, 2016 options as of the grant date using the Black Scholes Option Pricing Model with the following assumptions: dividend yield of 5%, volatility of 54.42%, risk-free interest rate of 1.99%, and an expected term of 5.31 years.
The weighted-average fair value of each option granted in 2016 under the 2014 Director Plan, is estimated at $2.41 for the December 7, 2016 options as of the grant date using the Black Scholes Option Pricing Model with the following assumptions: dividend yield of 5%, volatility of 54.60%, risk-free interest rate of 1.93%, and an expected term of 5.31 years.
The weighted-average fair value of each option granted in 2016 under the 2013 Plan and the 2014 Director Plan, is estimated at $1.89 for the December 2, 2016 options as of the grant date using the Black Scholes Option Pricing Model with the following assumptions: dividend yield of 5%, volatility of 47.05%, risk-free interest rate of 1.78%, and an expected term of 4.33 years.
The weighted-average fair value of each option granted in 2015 under the 2014 Director Plan, is estimated at $1.61 for the December 7, 2015 options as of the grant date using the Black Scholes Option Pricing Model with the following assumptions: dividend yield of 5%, volatility of 43.11%, risk-free interest rate of 1.80%, and an expected term of 5.32 years.
The weighted-average fair value of each option granted in 2015 under the 2013 Plan and the 2014 Director Plan, is estimated at $1.61 for the December 4, 2015 options as of the grant date using the Black Scholes Option Pricing Model with the following assumptions: dividend yield of 5%, volatility of 43.15%, risk-free interest rate of 1.83%, and an expected term of 5.32 years. The weighted-average fair value of each option granted in 2014 under the 2014 Director Plan, is estimated at $1.56 for the December 7, 2014 options as of the grant date using the Black Scholes Option Pricing Model with the following assumptions: dividend yield of 5%, volatility of 52.27%, risk-free interest rate of 1.76%, and an expected term of 5.31 years.
The weighted-average fair value of each option granted in 2014 under the 2013 Plan and the 2014 Director Plan, is estimated at $1.56 for the December 5, 2014 options as of the grant date using the Black Scholes Option Pricing Model with the following assumptions: dividend yield of 5%, volatility of 52.31%, risk-free interest rate of 1.69%, and an expected term of 5.31 years.
The weighted-average fair value of each option granted in 2014 under the 2013 Plan is estimated at $1.74 for the July 2, 2014 options as of the grant date using the Black Scholes Option Pricing Model with the following assumptions: dividend yield of 5%, volatility of 57.77%, risk-free interest rate of 1.79%, and an expected term of 5.32 years.
The Company generally estimates the expected life of the options based upon the contractual term of the options adjusted for actual experience. Future volatility is estimated based upon the weighted historical volatility of the Companys Class A common stock over a period equal to the estimated life of the options. Common stock issued upon exercise of stock options are generally new share issuances rather than from treasury shares.
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, 2016 and 2015 was $670,959 and $1,190,879, respectively. |
Note 13: Statutory Financial Information and Dividend Limitations |
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Note 13: Statutory Financial Information and Dividend Limitations | 13) Statutory Financial Information and Dividend Limitations
The Companys 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 National Association of Insurance Commissioners (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 Companys insurance subsidiaries, determined in accordance with statutory accounting practices prescribed or permitted by insurance regulatory authorities are as follows:
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 enterprises 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, 2016.
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 $44,055,297 at December 31, 2016, exceed minimum statutory capital requirements; however, payments of such amounts as dividends are subject to approval by regulatory authorities. |
Note 14: Business Segment Information |
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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 Companys life insurance segment consists of life insurance premiums and operating expenses from the sale of insurance products sold by the Companys independent agency force and net investment income derived from investing policyholder and segment surplus funds. The Companys 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 Companys 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 Enterprises Reportable Segments
The Companys 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.
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Note 15: Related Party Transactions |
12 Months Ended |
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Notes | |
Note 15: Related Party Transactions | 15) Related Party Transactions
The Companys Board of Directors has a written procedure, which requires disclosure to the Board of any material interest or any affiliation on the part of any of its officers, directors or employees that is in conflict or may be in conflict with the interests of the Company. The Company and its Board of Directors is unaware of any related party transactions that require disclosure as of December 31, 2016. |
Note 16: Fair Value of Financial Instruments |
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Note 16: Fair Value of Financial Instruments | 16) Fair Value of Financial Instruments
Generally accepted accounting principles (GAAP) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. GAAP also specifies a fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. Fair value measurements are classified under the following hierarchy:
Level 1: Financial assets and financial liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that the Company can access.
Level 2: Financial assets and financial liabilities whose values are based on the following: 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: Financial assets and financial liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs may reflect the Companys estimates of the assumptions that market participants would use in valuing the financial assets and financial liabilities.
The Company utilizes a combination of third party valuation service providers, brokers, and internal valuation models to determine fair value.
The following methods and assumptions were used by the Company in estimating the fair value disclosures related to other significant financial instruments:
The items shown under Level 1 and Level 2 are valued as follows:
Securities Available for Sale and Held to Maturity: The fair values of investments in fixed maturity and equity securities along with methods used to estimate such values are disclosed in Note 2 of the Notes to Consolidated Statements.
Restricted Assets: A portion of these assets include mutual funds and equity securities that have quoted market prices. Also included are cash and cash equivalents and participations in mortgage loans. The carrying amounts reported in the accompanying consolidated balance sheet for these financial instruments approximate their fair values.
Cemetery Endowment Care Trust Investments: A portion of these assets include equity securities that have quoted market prices. Also included are cash and cash equivalents. The carrying amounts reported in the accompanying consolidated balance sheet for these financial instruments approximate their fair values.
Call and Put Options: The Company uses quoted market prices to value its call and put options.
The items shown under Level 3 are valued as follows:
Policyholder Account Balances and Future Policy Benefits-Annuities: Future policy benefit reserves for interest-sensitive insurance products are computed under a retrospective deposit method and represent policy account balances before applicable surrender charges. Policy benefits and claims that are charged to expense include benefit claims incurred in the period in excess of related policy account balances. Interest crediting rates for interest-sensitive insurance products ranged from 4% to 6.5%. The fair values for the Companys liabilities under investment-type insurance contracts (disclosed as policyholder account balances and future policy benefits annuities) are estimated based on the contracts cash surrender values.
The fair values for the Companys 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 Companys overall management of interest rate risk, such that the Companys exposure to changing interest rates is minimized through the matching of investment maturities with amounts due under insurance contracts.
Loan Commitments and Forward Sale Commitments: The Companys mortgage segment enters into loan commitments with potential borrowers and forward sale commitments to sell loans to third-party investors. The Company also uses a hedging strategy for these transactions. A loan commitment binds the Company to lend funds to a qualified borrower at a specified interest rate and within a specified period of time, generally up to 30 days after issuance of the loan commitment. Loan commitments are defined to be derivatives under GAAP and are recognized at fair value on the consolidated balance sheet with changes in their fair values recorded in current earnings.
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 net of estimated commission expense. 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 related expenses. 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 Companys 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: Management considers the interest rate swap instruments to be an effective cash flow hedge against the variable interest rate on bank borrowings since the interest rate swap mirrors the term of the note payable and expires on the maturity date of the bank loan it hedges. The interest rate swaps are derivative financial instruments carried at its fair value. The fair value of the interest rate swap was derived from a proprietary model of the bank from whom the interest rate swap was purchased and to whom the note is payable.
Other Investments: The fair values are estimated using one or more valuation techniques for which sufficient and reliable data is available. Factors considered when estimating the fair value include the original transaction price, recent transactions in the same or similar properties, historical lease rates, comparable lease rates of similar properties, discount rates, market capitalization rates, expected vacancy rates, and changes in financial ratios or cash flow.
Mortgage Loans on Real Estate: The fair values are estimated using interest rates currently being offered for similar loans to borrowers with similar credit ratings. Loans with similar characteristics are aggregated for purposes of the calculations. The carrying amounts reported in the accompanying consolidated balance sheet for these financial instruments approximate their fair values.
Real Estate Held for Investment: The Company believes that in an orderly market fair value will approximate the replacement cost of a home and the rental income provides a cash flow stream for investment analysis. The Company believes the highest and best use of the properties are as income producing assets since it is the Companys intent to hold the properties as rental properties, matching the income from the investment in rental properties with the funds required for future estimated policy claims.
It should be noted that for replacement cost, when determining the fair value of mortgage properties, the Company uses Marshall and Swift, a provider of building cost information to the real estate construction industry. For the investment analysis, the Company used market data based upon its real estate operation experience and projected the present value of the net rental income over seven years. The Company used 20% of the projected cash flow analysis and 80% of the replacement cost to approximate fair value of the collateral.
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 Company initially recognizes Mortgage Servicing Rights (MSRs) at their estimated fair values derived from the net cash flows associated with the servicing contracts, where the Company assumes the obligation to service the loan in the sale transaction. The precise fair value of MSRs cannot be readily determined because MSRs are not actively traded in stand-alone markets. Considerable judgment is required to estimate the fair values of these assets and the exercise of such judgment can significantly affect the Companys earnings.
The Companys subsequent accounting for MSRs is based on the class of MSRs. The Company has identified two classes of MSRs: MSRs backed by mortgage loans with initial term of 30 years and MSRs backed by mortgage loans with initial term of 15 years. The Company distinguishes between these classes of MSRs due to their differing sensitivities to change in value as the result of changes in market. After being initially recorded at fair value, MSRs backed by mortgage loans are accounted for using the amortization method. MSR amortization is determined by amortizing the balance straight-line over an estimated seven and nine-year life which estimates the proportion to, and over the period of the estimated future net servicing income of the underlying financial assets.
The Company periodically assesses MSRs for impairment. Impairment occurs when the current fair value of the MSR falls below the assets carrying value (carrying value is the amortized cost reduced by any related valuation allowance). If MSRs are impaired, the impairment is recognized in current-period earnings and the carrying value of the MSRs is adjusted through a valuation allowance.
Management periodically reviews the various loan strata to determine whether the value of the MSRs in a given stratum is impaired and likely to recover. When management deems recovery of the value to be unlikely in the foreseeable future, a write-down of the cost of the MSRs for that stratum to its estimated recoverable value is charged to the valuation allowance.
The following 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, as restated.
Following is a summary of changes in the consolidated balance sheet line items measured using level 3 inputs:
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.
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, 2015, as restated.
Following is a summary of changes in the consolidated balance sheet line items measured using level 3 inputs:
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, 2015.
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 Companys 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, 2016 and 2015. The estimated fair value amounts for December 31, 2016 and 2015 have been measured as of period-end, and have not been reevaluated or updated for purposes of these Consolidated Financial Statements subsequent to those dates. As such, the estimated fair values of these financial instruments subsequent to the reporting date may be different than the amounts reported at period-end.
The carrying values and estimated fair values for such financial instruments, and their corresponding placement in the fair value hierarchy, are summarized as follows as of December 31, 2016, as restated:
The carrying values and estimated fair values for such financial instruments, and their corresponding placement in the fair value hierarchy, are summarized as follows as of December 31, 2015, as restated:
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 on Real Estate: The estimated fair value of the Companys mortgage loans is determined using various methods. The Companys mortgage loans are grouped into three categories: Residential, Residential Construction and Commercial. When estimating the expected future cash flows, it is assumed that all loans will be held to maturity, and any loans that are non-performing are evaluated individually for impairment.
Residential The estimated fair value of mortgage loans originated prior to 2013 is determined by estimating expected future cash flows of interest payments and discounting them using current interest rates from single family mortgages. The estimated fair value of mortgage loans originated in 2013 thru 2016 is determined from pricing of similar loans that were sold in 2016.
Residential Construction These loans are primarily short in maturity (4-6 months) accordingly, the estimated fair value is determined to be the net book value.
Commercial The estimated fair value is determined by estimating expected future cash flows of interest payments and discounting them using current interest rates for commercial mortgages.
Loans Held for Sale: 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: The carrying amounts reported in the accompanying consolidated balance sheet for these financial instruments approximate their fair values due to their short-term nature. |
Note 17: Accumulated Other Comprehensive Income |
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Note 17: Accumulated Other Comprehensive Income | 17) Accumulated Other Comprehensive Income
The following summarizes the changes in accumulated other comprehensive income:
The following is the accumulated balances of other comprehensive income as of December 31, 2016:
The following is the accumulated balances of other comprehensive income as of December 31, 2015:
The following is the accumulated balances of other comprehensive income as of December 31, 2014:
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Note 18: Derivative Instruments |
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Note 18: Derivative Instruments | 18) Derivative Instruments
The following table shows the fair value of derivatives as of December 31, 2016 and 2015.
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 (OCI) into income or gains or losses recognized in income on derivatives ineffective portion or any amounts excluded from effective testing.
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Note 19: Acquisitions |
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Note 19: Acquisitions | 19) Acquisitions
Acquisition of First Guaranty Insurance Company
On July 11, 2016, the Company, through its wholly owned subsidiary, Security National Life completed the stock purchase transaction with the shareholders of Reppond Holding Corporation, an Arkansas corporation ("Reppond Holding") and sole shareholder of First Guaranty Insurance Company, a Louisiana domestic stock legal reserve life insurance company ("First Guaranty"), to purchase all the outstanding shares of common stock of Reppond Holding. Under the terms of the stock purchase agreement, dated February 17, 2016, between Security National Life and Reppond Holding, which was later amended on March 4 and 17, 2016, Security National Life paid a total of $6,753,000 at the closing in consideration for the purchase of all the outstanding shares of stock of Reppond Holding from its shareholders.
The fair values 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. As the acquisition was completed at quarter end, the fair values of substantially all of the net assets are considered preliminary.
The estimated fair values of the assets acquired and the liabilities assumed at the date of acquisition were as follows:
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 life, annuity, and other 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.
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 years ended December 31, 2016, 2015 and 2014, respectively. This pro forma information is supplemental and does not necessarily present the operations of the Company that would have occurred had the acquisition occurred on those dates and may not reflect the operations that will occur in the future:
Acquisition of American Funeral Financial
On June 4, 2014, the Company, through its wholly owned subsidiary, SNFC Subsidiary, LLC (SNFC Subsidiary), completed a purchase transaction with American Funeral Financial, LLC, a South Carolina limited liability company (American Funeral Financial) and Hypershop, LLC, a North Carolina limited liability company (Hypershop), the sole owner of all the limited liability company interests of American Funeral Financial, to purchase all of the outstanding limited liability company interests, or membership units, of American Funeral Financial. American Funeral Financial is engaged in the operation of a factoring business with the principal purpose of providing funding for funeral homes and mortuaries.
Under the terms of the transaction, as set forth in the Unit Purchase Agreement dated June 4, 2014 (the Purchase Agreement), among the Company, SNFC Subsidiary, American Funeral Financial and Hypershop, the Company paid Hypershop purchase consideration equal to (i) $3,000,000 in cash, of which $175,000 was deposited into an interest bearing escrow account to be held for a period of twelve months from the closing date to pay off the indebtedness and other liabilities of American Funeral Financial, plus (ii) $12,011,183, representing the amount of the good standing receivables of American Funeral Financial, plus (iii) earn-out payments equal to .0042 of the aggregate amount of life insurance assignments funded by American Funeral Financial during the three year period following the closing date of the transaction. This earn-out liability was estimated to be $1,368,000. The purchase consideration was to be used to pay off the indebtedness that American Funeral Financial owed to Security Finance Corporation of Spartanburg, as well as to pay off all other indebtedness and liabilities of American Funeral Financial.
The estimated fair values of the assets acquired and the liabilities assumed at the date of acquisition were as follows:
The estimated fair value of the acquisition is based on market assumptions of the future value of the business acquired, the collectability of receivables, the current value of equipment purchased and the useful life of proprietary software. Based on the unobservable nature of certain of these assumptions, the valuation is considered Level 3 under the fair value hierarchy.
The following unaudited pro forma information has been prepared to present the results of operations of the Company assuming the acquisition of American Funeral Financial had occurred at the beginning of the years ended December 31, 2016, 2015 and 2014, respectively. This pro forma information is supplemental and does not necessarily present the operations of the Company that would have occurred had the acquisition occurred on those dates and may not reflect the operations that will occur in the future:
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Note 20: Mortgage Servicing Rights |
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Note 20: Mortgage Servicing Rights | 20) Mortgage Servicing Rights
The following table presents the MSR activity for 2016 and 2015.
The Company reports these MSRs pursuant to the accounting policy discussed in Note 1 of the Notes to Consolidated Financial Statements. The following table summarizes the Companys 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, 2016 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.
During the years ended December 31, 2016, 2015 and 2014, the Company collected the following contractual servicing fee income and late fee income as reported in other revenues on the Consolidated Statement of Earnings:
The following is a summary of the unpaid principal balances of the servicing portfolio for the periods presented:
The following key assumptions were used in determining MSR value:
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Note 21: Correction of Errors |
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Note 21: Correction of Errors | 21) Correction of Errors
The accompanying Consolidated Financial Statements include the restatement of the Companys previously filed consolidated balance sheets and the related consolidated statements of operations, shareholders equity and cash flows for the fiscal years ended December 31, 2014, December 31, 2015, and December 31, 2016. For the revised quarterly results of operations for the fiscal years ended December 31, 2014, 2015 and 2016, see Impact of Restatement Adjustments on Quarterly Financial Statements (Unaudited) in Note 22 of the accompanying Consolidated Financial Statements.
Immaterial Error in Accounting for Loan Commitments: Subsequent to the issuance of the companys 2015 consolidated financial statements, the Company identified an error in the accounting for its loan commitments (Adjustment A). The Company corrected the presentation of the changes in fair value of its loan commitments to present them as a component of current earnings instead of as a component of other comprehensive income, as previously reported. The Companys management has concluded that the effect of the correction is not material to any previously issued Consolidated Financial Statements.
Subsequent to the issuance of the companys 2016 Consolidated Financial Statements, the Company identified the following errors, (Adjustments B):
Material Error in Accounting for Repurchase Agreements: The Company has concluded it should account for its Repurchase Agreements with unaffiliated banks as "On-Balance-Sheet" transactions, rather than as "Off-Balance-Sheet" as previously reported. Accordingly, the Company will reflect any outstanding loans as Loans Held for Sale and the corresponding debt as a Bank Loan Payable. The Company has corrected its sale accounting practice to defer revenue and costs on loans that remain as Held for Sale. The Company will recognize these deferred items at the time the loan is purchased by the ultimate investor.
Material Error in Accounting for Tax Valuation Allowance: The Company determined that it should have reversed its valuation allowance in its entirety in 2012 when the Company no longer qualified for the small life insurance company deduction, rather than in other periods as previously reported.
Other Immaterial Corrections and Reclassifications: In addition, the Company has recorded the following additional corrections in the accompanying Consolidated Financial Statements:
The tables below present the impact of the restatement on the Companys Consolidated Balance Sheets for the periods presented:
The tables below present the impact of the restatement on the Companys Consolidated Statements of Earnings for the periods presented:
(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 Companys Consolidated Statements of Comprehensive Income for the periods presented:
The tables below present the impact of the restatement on the Companys Consolidated Statements of Cash Flows for the periods presented:
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Note 22: Impact of Restatement Adjustments on Quarterly Financial Statements (unaudited) |
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Note 22: Impact of Restatement Adjustments on Quarterly Financial Statements (unaudited) | 22) Impact of Restatement Adjustments on Quarterly Financial Statements (Unaudited)
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(1) Earnings per share amounts have been adjusted retroactively for the effect of annual stock dividends. (2) Earnings restated See Note 21 of the Notes to Consolidated Financial Statements for additional information regarding correction of errors. |
Note 1: Significant Accounting Policies: General Overview of Business (Policies) |
12 Months Ended |
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Dec. 31, 2016 | |
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. |
Note 1: Significant Accounting Policies: Basis of Presentation (Policies) |
12 Months Ended |
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Dec. 31, 2016 | |
Policies | |
Basis of Presentation | Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The presentation of certain amounts in prior years has been reclassified to conform to the 2016 presentation. |
Note 1: Significant Accounting Policies: Principles of Consolidation (Policies) |
12 Months Ended |
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Dec. 31, 2016 | |
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. |
Note 1: Significant Accounting Policies: Use of Estimates (Policies) |
12 Months Ended |
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Dec. 31, 2016 | |
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 generally accepted accounting principles. Actual results could differ from those estimates.
Material estimates that are particularly susceptible to significant changes in the near term are those used in determining the value of derivative assets and liabilities, those used in determining deferred acquisition costs and the value of business acquired, those used in determining the value of mortgage loans foreclosed to real estate held for investment, those used in determining the liability for future policy benefits and unearned revenue, those used in determining the estimated future costs for pre-need sales, those used in determining the value of mortgage servicing rights, those used in determining allowances for loan losses for mortgage loans on real estate, those used in determining loan loss reserve, and those used in determining deferred tax assets and liabilities. Although some variability is inherent in these estimates, management believes the amounts provided are fairly stated in all material respects. |
Note 1: Significant Accounting Policies: Investments (Policies) |
12 Months Ended |
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Dec. 31, 2016 | |
Policies | |
Investments | Investments
The Companys 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 on real estate and construction loans held for investment are carried at their unpaid principal balances adjusted for charge-offs and the related allowance for loan losses. The Company defers related material loan origination fees, net of related direct loan origination costs, and amortizes the net fees over the term of the loans.
Mortgage loans are collateral dependent and require an appraisal at the time of underwriting and funding. Generally, the Company will fund a loan not to exceed 80% of the loans collateral fair market value. Amounts over 80% will require additional collateral or mortgage insurance by an approved third party insurer. Once a loan is deemed to be impaired the Company will review the market value of the collateral and provide an allowance for any impairment.
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 certificates of deposit and commercial paper with maturities of up to one year.
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 managements 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 Companys ability and intent to hold the investment until the fair value recovers, which is not assured. |
Note 1: Significant Accounting Policies: Cash and Cash Equivalents (Policies) |
12 Months Ended |
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Dec. 31, 2016 | |
Policies | |
Cash and Cash Equivalents | Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all highly liquid debt 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. |
Note 1: Significant Accounting Policies: Loans Held For Sale (Policies) |
12 Months Ended |
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Dec. 31, 2016 | |
Policies | |
Loans Held For Sale | Loans Held for Sale
Loans held for sale are carried at the lower of cost or market and include the amounts due from third party investors. Loans held for sale are also shown net of direct selling revenues and costs. Based on the short-term nature of these assets, the Company has no related allowance for loan losses recorded for these assets. |
Note 1: Significant Accounting Policies: Restricted Assets (Policies) |
12 Months Ended |
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Dec. 31, 2016 | |
Policies | |
Restricted Assets | Restricted Assets
Restricted assets are assets held in a trust account for future mortuary services and merchandise and consist of cash; participations in mortgage loans with Security National Life; mutual funds carried at cost; equity securities carried at fair market value; and a surplus note with Security National Life. 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 percent of the qualified direct costs for the preceding year, and has included this amount as a component of restricted cash. |
Note 1: Significant Accounting Policies: Cemetery Perpetual Care Trust Investments (Policies) |
12 Months Ended |
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Dec. 31, 2016 | |
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. |
Note 1: Significant Accounting Policies: Cemetery Land and Improvements (Policies) |
12 Months Ended |
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Dec. 31, 2016 | |
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. |
Note 1: Significant Accounting Policies: Property and Equipment (Policies) |
12 Months Ended |
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Dec. 31, 2016 | |
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 are amortized over the lesser of the useful life or remaining lease terms. |
Note 1: Significant Accounting Policies: Recognition of Insurance Premiums and Other Considerations (Policies) |
12 Months Ended |
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Dec. 31, 2016 | |
Policies | |
Recognition of Insurance Premiums and Other Considerations | Recognition of Insurance Premiums and Other Considerations
Premiums and other consideration for traditional life insurance products (which include those products with fixed and guaranteed premiums and benefits and consist principally of whole life insurance policies, limited payment life insurance policies, and certain annuities with life contingencies) are recognized as revenues when due from policyholders. Premiums and other consideration for interest-sensitive insurance policies (which include universal life policies, interest-sensitive life policies, deferred annuities, and annuities without life contingencies) are recognized when earned and consist of amounts assessed against policyholder account balances during the period for policy administration charges and surrender charges. |
Note 1: Significant Accounting Policies: Deferred Policy Acquisition Costs and Value of Business Acquired (Policies) |
12 Months Ended |
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Dec. 31, 2016 | |
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 accounting principles generally accepted in the United States of America 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. |
Note 1: Significant Accounting Policies: Mortgage Servicing Rights (Policies) |
12 Months Ended |
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Dec. 31, 2016 | |
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.
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 Companys subsequent accounting for MSRs is based on the class of MSRs. The Company has identified two classes of MSRs: MSRs backed by mortgage loans with initial term of 30 years and MSRs backed by mortgage loans with initial term of 15 years. The Company distinguishes between these classes of MSRs due to their differing sensitivities to change in value as the result of changes in market. After being initially recorded at fair value, MSRs backed by mortgage loans are accounted for using the amortization method. MSR amortization is determined by amortizing the balance straight-line over an estimated seven and nine year life.
The Company periodically assesses MSRs for impairment. Impairment occurs when the current fair value of the MSR falls below the assets 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. |
Note 1: Significant Accounting Policies: Derivative Instruments (Policies) |
12 Months Ended |
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Dec. 31, 2016 | |
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 applicants committed rate. The probability that a loan will not be funded within the terms of the mortgage loan commitment also is influenced by the source of the applications (retail, broker or correspondent channels), proximity to rate lock expiration, purpose for the loan (purchase or refinance) product type and the application approval status. The Company has developed fallout estimates using historical data that take into account all of the variables, as well as renegotiations of rate and point commitments that tend to occur when mortgage rates fall. These fallout estimates are used to estimate the number of loans that the Company expects to be funded within the terms of the loan commitments and are updated periodically to reflect the most current data.
The Company estimates the fair value of a loan commitment based on the change in estimated fair value of the underlying mortgage loan, quoted MBS prices, estimates of the fair value of mortgage servicing rights, and an estimate of the probability that the mortgage loan will fund within the terms of the commitment net of estimated commission expense. The change in fair value of the underlying mortgage loan is measured from the date the loan commitment is issued and is shown net of expenses. Following issuance, the value of a loan commitment can be either positive or negative depending upon the change in value of the underlying mortgage loans.
Forward Sale Commitments
The Company utilizes forward commitments to economically hedge the price risk associated with its outstanding mortgage loan commitments. A forward commitment protects the Company from losses on sales of the loans arising from exercise of the loan commitments. Management expects these types of commitments will experience changes in fair value opposite to changes in fair value of the loan commitments, thereby reducing earnings volatility related to the recognition in earnings of changes in the values of the commitments.
The net changes in fair value of all loan commitments and forward sale commitments are shown in current earnings as a component of mortgage fee income.
Call and Put Options
The Company uses a strategy of selling out of the money call options on its available for sale equity securities as a source of revenue. The options give the purchaser the right to buy from the Company specified equity securities at a set price up to a pre-determined date in the future. The Company uses the strategy of selling put options as a means of generating cash or purchasing equity securities at lower than current market prices. The Company receives an immediate payment of cash for the value of the option and establishes a liability for the fair value of the option. The liability for options is adjusted to fair value at each reporting date. In the event an option is exercised, the Company recognizes a gain on the sale of the equity security and a gain on the sale of the option. If the option expires unexercised, the Company recognizes a gain from the sale of the option. |
Note 1: Significant Accounting Policies: Allowance For Doubtful Accounts and Loan Losses and Impaired Loans (Policies) |
12 Months Ended |
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Dec. 31, 2016 | |
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, other loans and receivables in accordance with generally accepted accounting principles.
Receivables are the result of cemetery and mortuary operations, mortgage loan operations and life insurance operations. The allowance is based upon the Companys historical experience for collectively evaluated impairment. Other allowances are based upon receivables individually evaluated for impairment. Collectability of the cemetery and mortuary receivables is significantly influenced by current economic conditions. The critical issues that impact recovery of mortgage loan operations are interest rate risk, loan underwriting, new regulations and the overall economy.
The Company provides allowances for losses on its mortgage loans held for investment through an allowance for loan losses. The allowance is comprised of two components. The first component is an allowance for collectively evaluated impairment that is based upon the Companys 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. In addition, when a mortgage loan is past due more than 90 days, the Company does not accrue any interest income. When a loan becomes delinquent, the Company proceeds to foreclose on the real estate and all expenses for foreclosure are expensed as incurred. Once foreclosed, an adjustment for the lower of cost or fair value is made, if necessary, and the amount is classified as real estate held for investment. The Company will rent the properties until it is deemed desirable to sell them.
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 Companys 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. |
Note 1: Significant Accounting Policies: Loan Loss Reserve (Policies) |
12 Months Ended |
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Dec. 31, 2016 | |
Policies | |
Loan Loss Reserve | Loan Loss Reserve
The mortgage loan loss reserve is an estimate of probable losses at the balance sheet date that the Company will realize in the future on mortgage loans sold to third party investors.
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 A make whole demand occurs when an investor forecloses on a property and then sells the property. The make whole amount is calculated as the difference between the original unpaid principal balance, accrued interest and fees, less the sale proceeds.
Repurchase demand A repurchase demand usually occurs when there is a significant payment default, error in underwriting or detected loan fraud.
Indemnification demand On certain loans the Company has negotiated a set fee that is to be paid in lieu of repurchase. The fee varies by investor and by loan product type.
Additional information related to the Loan Loss Reserve is included in Note 2. |
Note 1: Significant Accounting Policies: Future Life, Annuity and Other Policy Benefits (Policies) |
12 Months Ended |
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Dec. 31, 2016 | |
Policies | |
Future Life, Annuity and Other Policy Benefits | Future Life, Annuity and Other Policy Benefits
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 4.5% 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%. |
Note 1: Significant Accounting Policies: Participating Insurance (Policies) |
12 Months Ended |
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Dec. 31, 2016 | |
Policies | |
Participating Insurance | Participating Insurance
Participating business constituted 2% of insurance in force for the years ended 2016, 2015 and 2014. 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. |
Note 1: Significant Accounting Policies: Reinsurance (Policies) |
12 Months Ended |
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Dec. 31, 2016 | |
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. |
Note 1: Significant Accounting Policies: Pre-need Sales and Costs (Policies) |
12 Months Ended |
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Dec. 31, 2016 | |
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 a minimum percentage 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 Companys 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. |
Note 1: Significant Accounting Policies: Mortgage Fee Income (Policies) |
12 Months Ended |
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Dec. 31, 2016 | |
Policies | |
Mortgage Fee Income | Mortgage Fee Income
Mortgage fee income consists of origination fees, processing fees and certain other income related to the origination and sale of mortgage loans. For mortgage loans sold to third party investors, mortgage fee income and related expenses are recognized pursuant to GAAP at the time the sales of mortgage loans comply with the sales criteria for the transfer of financial assets, which are: (i) the transferred assets have been isolated from the Company and its creditors, (ii) the transferee has the right to pledge or exchange the mortgage, and (iii) the Company does not maintain effective control over the transferred mortgage.
The Company has determined that all three criteria are met at the time a loan is purchased from a third party investor. Until the loan is purchased, all direct selling revenues and costs are deferred.
The Company, through its mortgage subsidiaries, sells mortgage loans to third party investors without recourse. However, it may be required to repurchase a loan or pay a fee instead of repurchase under certain events, which include the following:
· Failure to deliver original documents specified by the investor, · The existence of misrepresentation or fraud in the origination of the loan,
· The loan becomes delinquent due to nonpayment during the first several months after it is sold, · Early pay-off of a loan, as defined by the agreements, · Excessive time to settle a loan, · Investor declines purchase, and · Discontinued product and expired commitment.
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:
· Research reasons for rejection, · Provide additional documents, · Request investor exceptions, · Appeal rejection decision to purchase committee, and · Commit to secondary investors.
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 sales revenue that was to be received from a third-party investor is written off against the loan loss reserve. Any loan that later becomes delinquent is evaluated by the Company at that time and any impairment is adjusted accordingly.
Determining Lower of Cost or Market
Cost 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:
· For loans that have an active market the Company uses the market price on the repurchased date. · For loans where there is no market but there is a similar product, the Company uses the market value for the similar product on the repurchased date. · For loans where no active market exists on the repurchased date, the Company determines that the unpaid principal balance best approximates the market value on the repurchased date, after considering the fair value of the underlying real estate collateral and estimated future cash flows.
The appraised value of the real estate underlying the original mortgage loan adds support to the Companys 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. 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 Company provides an allowance for loan losses on its mortgage loans held for investment. The allowance is comprised of two components. The first component is an allowance for collectively evaluated impairment that is based upon the Companys historical experience in collecting similar receivables. The second component is based upon individual evaluation of loans that are determined to be impaired.
Commercial Loans
Each quarter, management reviews the current commercial loans and determines if an allowance is required based on the Companys actual experience of losses on impaired commercial loans. To date, the Company has not incurred any significant losses. The carrying value of all commercial loans is supported by appraisals and cash flow analysis of revenue received. Also, the Company does not accrue any interest income or capitalize any of the foreclosure costs on impaired commercial loans.
Residential and Construction Loans The Company believes that in an orderly market fair value will approximate the replacement cost of a home and the rental income provides a cash flow stream for investment analysis. The Company believes the highest and best use of the properties are as income producing assets since it is the Companys intent to hold the properties as rental properties, matching the income from the investment in rental properties with the funds required for future estimated policy claims. Accordingly, the fair value determination will be weighted more heavily toward the rental analysis.
It should be noted that for replacement cost, when determining the fair value of mortgage properties, the Company uses Marshall and Swift, a provider of building cost information to the real estate construction industry. For the investment analysis, the Company used market data based upon its real estate operation experience and projected the present value of the net rental income over seven years. The Company used 20% of the projected cash flow analysis and 80% of the replacement cost to approximate fair value of the collateral.
Each quarter the Company also analyzes its current loan portfolio and determines the level of allowance needed for loans that are listed as current in the portfolio. The basis of the analysis places a higher weight on loans with high loan to value ratios, those that lack mortgage insurance, and certain loan types that have a higher percentage of default based on the Companys experience.
Each quarter the Company makes further analysis of the foreclosed properties to determine if any additional allowances are necessary by comparing national indexes of loan to value ratios by region to the Companys loan to value ratios. Based upon the above procedures, the Companys management believes that residential and residential construction loans are reflected in the Companys financial statements at the lower of cost or market in accordance with GAAP requirements. |
Note 1: Significant Accounting Policies: Goodwill (Policies) |
12 Months Ended |
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Dec. 31, 2016 | |
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. |
Note 1: Significant Accounting Policies: Long-lived Assets (Policies) |
12 Months Ended |
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Dec. 31, 2016 | |
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. |
Note 1: Significant Accounting Policies: Income Taxes (Policies) |
12 Months Ended |
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Dec. 31, 2016 | |
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. |
Note 1: Significant Accounting Policies: Earnings Per Common Share (Policies) |
12 Months Ended |
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Dec. 31, 2016 | |
Policies | |
Earnings Per Common Share | Earnings Per Common Share
The Company computes earnings per share in accordance with GAAP 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. |
Note 1: Significant Accounting Policies: Stock Based Compensation (Policies) |
12 Months Ended |
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Dec. 31, 2016 | |
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 method. Stock option compensation expense is recognized over the period during which an employee is required to provide service in exchange for the award. |
Note 1: Significant Accounting Policies: Concentration of Credit Risk (Policies) |
12 Months Ended |
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Dec. 31, 2016 | |
Policies | |
Concentration of Credit Risk | Concentration of Credit Risk
For a description of the geographic concentration risk regarding mortgage loans and real estate, refer to Note 2 of the Notes to Consolidated Financial Statements. |
Note 1: Significant Accounting Policies: Advertising (Policies) |
12 Months Ended |
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Dec. 31, 2016 | |
Policies | |
Advertising | Advertising
The Company expenses advertising costs as incurred. |
Note 1: Significant Accounting Policies: Recent Accounting Pronouncements (Policies) |
12 Months Ended |
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Dec. 31, 2016 | |
Policies | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements
ASU No. 2016-13: Financial Instruments Credit Losses (Topic 326) Issued in June 2016, ASU 2016-13 amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in current generally accepted accounting principles (GAAP) and, instead, requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available for sale debt securities, credit losses should be measured in a manner similar to current GAAP, however Topic 326 will require that credit losses be presented as an allowance rather than as a write-down. The new authoritative guidance is effective for interim and annual periods beginning after December 15, 2019. The Company is in the process of evaluating the potential impact of this standard.
ASU No. 2016-02: Leases (Topic 842) - Issued in February 2016, ASU 2016-02 supersedes the leases requirements in ASC Topic 840, Leases, and was issued to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The new authoritative guidance is effective for interim and annual periods beginning after December 15, 2018. The Company is in the process of evaluating the potential impact of this standard.
ASU No. 2016-01: Financial Instruments Overall (Topic 825-10) Issued in January 2016, ASU 2016-01 changes the accounting for non-consolidated equity investments that are not accounted for under the equity method of accounting by requiring changes in fair value to be recognized in income. Under current guidance, changes in fair value for investments of this nature are recognized in accumulated other comprehensive income as a component of stockholders equity. Additionally, ASU 2016-01 simplifies the impairment assessment of equity investments without readily determinable fair values; requires entities to use the exit price when estimating the fair value of financial instruments; and modifies various presentation disclosure requirements for financial instruments. The new authoritative guidance is effective for interim and annual periods beginning after December 15, 2017. The Company is in the process of evaluating the potential impact of this standard.
ASU No. 2014-09: Revenue from Contracts with Customers (Topic 606) - Issued in May 2014, ASU 2014-09 supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition, and requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Insurance contracts are excluded from the scope of this new guidance. The new authoritative guidance is effective for interim and annual periods beginning after December 15, 2017. The Company is in the process of evaluating the potential impact of this standard, which is not expected to be material to the Companys results of operations or financial position.
The Company has reviewed other recent accounting pronouncements and has determined that they will not significantly impact the Companys results of operations or financial position. |
Note 2: Investments: Held-to-maturity Securities (Tables) |
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Held-to-maturity Securities |
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Note 2: Investments: Schedule of Unrealized Loss on Investments (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fixed Maturities | AsOfDecember312016Member | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Unrealized Loss on Investments |
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Fixed Maturities | AsOfDecember312015Member | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Unrealized Loss on Investments |
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Schedule of Unrealized Loss on Investments |
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Note 2: Investments: Investments Classified by Contractual Maturity Date (Tables) |
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Investments Classified by Contractual Maturity Date |
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Investments Classified by Contractual Maturity Date |
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Note 2: Investments: Gain (Loss) on Investments (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Gain (Loss) on Investments |
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Note 2: Investments: Schedule of Major categories of net investment income (Tables) |
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Schedule of Major categories of net investment income |
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Note 2: Investments: Commercial Real Estate Investment (Tables) |
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Commercial Real Estate Investment |
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Note 2: Investments: Residential Real Estate Investment (Tables) |
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Residential Real Estate Investment |
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Note 2: Investments: The Following Is A Summary of The Allowance For Loan Losses As A Contra-asset Account For The Periods Presented (Tables) |
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The Following Is A Summary of The Allowance For Loan Losses As A Contra-asset Account For The Periods Presented: |
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Note 2: Investments: Schedule of aging of mortgage loans (Tables) |
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Schedule of aging of mortgage loans |
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Note 2: Investments: Schedule of Impaired Mortgage Loans (Tables) |
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Schedule of Impaired Mortgage Loans |
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Note 2: Investments: The Company's Performing and Non-performing Mortgage Loans Were As Follows (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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The Company's Performing and Non-performing Mortgage Loans Were As Follows: | The Companys performing and non-performing mortgage loans were as follows:
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Note 2: Investments: Schedule of Mortgate loans on a nonaccrual status (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||
Schedule of Mortgate loans on a nonaccrual status |
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Note 2: Investments: Schedule of Principal amounts due on mortgage loans on real estate and construction loans held for investment by category (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Principal amounts due on mortgage loans on real estate and construction loans held for investment by category |
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Note 2: Investments: Schedule of loan loss reserve which is included in other liabilities and accrued expenses (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | ||||||||||||||||||||||||||||||||||||||||||||||
Schedule of loan loss reserve which is included in other liabilities and accrued expenses |
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Note 3: Receivables: Schedule of Receivables (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | ||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Receivables | Receivables consist of the following:
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Note 4: Value of Business Acquired: Schedule of Value of Business Acquired (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Value of Business Acquired |
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Note 4: Value of Business Acquired: Goodwill and Intangible Assets Disclosure (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | ||||||||||||||||||||||||||||||||||||
Tables/Schedules | ||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure |
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Note 5: Property and Equipment: Property, Plant and Equipment (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | ||||||||||||||||||||||||||||||||||||
Tables/Schedules | ||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment |
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Note 6: Bank and Other Loans Payable: Summary of Bank Loans Payable (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Summary of Bank Loans Payable |
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Note 6: 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 | ||||||||||||||
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Tables/Schedules | |||||||||||||||
Schedule of combined maturities of bank loans payable, lines of credit and notes and contracts payable |
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Note 7: Cemetery and Mortuary Endowment Care and Pre need Merchandise Funds: Schedule of the components of the cemetery perpetual care obligation (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||
Schedule of the components of the cemetery perpetual care obligation |
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Note 7: Cemetery and Mortuary Endowment Care and Pre need Merchandise Funds: Schedule of Restricted Assets in Cemetery and Mortuary Endowment Care and Pre need Merchandise Funds (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||
Schedule of Restricted Assets in Cemetery and Mortuary Endowment Care and Pre need Merchandise Funds |
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Note 8: Income Taxes: Summary of Income Tax Liability (Tables) |
12 Months Ended | ||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||
Summary of Income Tax Liability |
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Note 8: Income Taxes: Schedule of components of Deferred Tax Liabilities (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of Deferred Tax Liabilities |
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Note 8: Income Taxes: Schedule of Components of Income Tax Expense (Benefit) (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Schedule of Components of Income Tax Expense (Benefit) |
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Note 8: Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||
Schedule of Effective Income Tax Rate Reconciliation |
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Note 9: Reinsurance, Commitments and Contingencies: Schedule of Future Minimum Rental Payments for Operating Leases (Tables) |
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Tables/Schedules | |||||||||||||||||
Schedule of Future Minimum Rental Payments for Operating Leases |
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Note 11: Capital Stock: Schedule of Activity in shares of capital stock (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Schedule of Activity in shares of capital stock |
(1) Class C shares have been retroactively adjusted for the effect of the 1-for-10 reverse stock split that was approved by the stockholders in 2014. |
Note 11: Capital Stock: Schedule of Basic and diluted earnings per share (Tables) |
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Schedule of Basic and diluted earnings per share |
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Note 12: Stock Compensation Plans: Schedule of Activity of the 2003 Plan (Tables) |
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Schedule of Activity of the 2003 Plan |
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Note 13: Statutory Financial Information and Dividend Limitations: Schedule of statutory accounting practices (Tables) |
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Schedule of statutory accounting practices |
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Note 14: Business Segment Information: Schedule of Segment Reporting Information, by Segment (Tables) |
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment |
|
Note 16: Fair Value of Financial Instruments: Schedule of fair value assets and liabilities measured on a recurring basis (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AsOfDecember312016Member | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair value assets and liabilities measured on a recurring basis |
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AsOfDecember312015Member | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair value assets and liabilities measured on a recurring basis |
|
Note 16: Fair Value of Financial Instruments: Schedule of Changes in the consolidated balance sheet line items measured using level 3 inputs (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AsOfDecember312016Member | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in the consolidated balance sheet line items measured using level 3 inputs |
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AsOfDecember312015Member | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in the consolidated balance sheet line items measured using level 3 inputs |
|
Note 16: Fair Value of Financial Instruments: Fair Value Assets Measured on a Nonrecurring Basis (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AsOfDecember312016Member | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Assets Measured on a Nonrecurring Basis |
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AsOfDecember312015Member | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Assets Measured on a Nonrecurring Basis |
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Note 16: Fair Value of Financial Instruments: Schedule of Financial Instruments Carried at Other Than Fair Value (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Financial Instruments Carried at Other Than Fair Value |
The carrying values and estimated fair values for such financial instruments, and their corresponding placement in the fair value hierarchy, are summarized as follows as of December 31, 2015, as restated:
|
Note 17: Accumulated Other Comprehensive Income: Schedule of Changes in accumulated other comprehensive income (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in accumulated other comprehensive income |
|
Note 17: Accumulated Other Comprehensive Income: Accumulated Balances of Other Comprehensive Income (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | ||||||||||||||||||||||||||||||||||||
AsOfDecember312016Member | ||||||||||||||||||||||||||||||||||||
Accumulated Balances of Other Comprehensive Income |
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AsOfDecember312015Member | ||||||||||||||||||||||||||||||||||||
Accumulated Balances of Other Comprehensive Income |
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AsOfDecember312014Member | ||||||||||||||||||||||||||||||||||||
Accumulated Balances of Other Comprehensive Income |
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Note 18: Derivative Instruments: Schedule of Derivative Assets at Fair Value (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Assets at Fair Value |
|
Note 18: Derivative Instruments: Schedule of Gains and Losses on Derivatives (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | ||||||||||||||||||||||||||||||||||||
Tables/Schedules | ||||||||||||||||||||||||||||||||||||
Schedule of Gains and Losses on Derivatives |
|
Note 19: Acquisitions: The Estimated Fair Values of The Assets Acquired and The Liabilities Assumed At The Date of Acquisition (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||
First Guaranty Insurance Company | |||||||||||||||||||||||||||||||||||||||
The Estimated Fair Values of The Assets Acquired and The Liabilities Assumed At The Date of Acquisition |
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American Funeral Financial | |||||||||||||||||||||||||||||||||||||||
The Estimated Fair Values of The Assets Acquired and The Liabilities Assumed At The Date of Acquisition |
|
Note 19: Acquisitions: Business Acquisition, Pro Forma Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||
First Guaranty Insurance Company | |||||||||||||||||||||||||||||||||||||||||||
Business Acquisition, Pro Forma Information |
|
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American Funeral Financial | |||||||||||||||||||||||||||||||||||||||||||
Business Acquisition, Pro Forma Information |
|
Note 20: Mortgage Servicing Rights: Schedule of mortgage servicing rights (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of mortgage servicing rights |
|
Note 20: Mortgage Servicing Rights: Schedule of Mortgage Servicing Rights Amortization (Tables) |
12 Months Ended | ||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 | |||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||
Schedule of Mortgage Servicing Rights Amortization |
|
Note 20: Mortgage Servicing Rights: Schedule of Other Revenues (Tables) |
12 Months Ended | ||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||
Schedule of Other Revenues |
|
Note 20: Mortgage Servicing Rights: Summary of Unpaid Principal Balances of the Servicing Portfolio (Tables) |
12 Months Ended | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 | |||||||||||||||||||
Tables/Schedules | |||||||||||||||||||
Summary of Unpaid Principal Balances of the Servicing Portfolio |
|
Note 20: Mortgage Servicing Rights: Assumptions used in determining MSR value (Tables) |
12 Months Ended | ||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||
Tables/Schedules | |||||||||||||||||
Assumptions used in determining MSR value |
|
Note 22: Impact of Restatement Adjustments on Quarterly Financial Statements (unaudited): Schedule of Quarterly Financial Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Quarterly Financial Information |
|
Note 2: Investments: Fixed Maturity Securities - Additional (Details) - Fixed Maturities - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Average market value over amortized cost | 93.90% | 87.20% | |
Other than Temporary Impairment Losses, Investments, Portion Recognized in Earnings, Net, Available-for-sale Securities | $ 100,000 | $ 120,000 | $ 120,000 |
Note 2: Investments: Equity Securities - Additional (Details) - Equity Securities - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Average Market Value of Security over initial investment | 81.40% | 74.70% | |
Other than Temporary Impairment Losses, Investments, Portion Recognized in Earnings, Net, Available-for-sale Securities | $ 170,358 | $ 293,714 | $ 44,240 |
Note 2: Investments: Investments Classified by Contractual Maturity Date (Details) - USD ($) |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
AmortizedCost | $ 184,979,644 | $ 145,558,425 |
HeldToMaturitySecuritiesEstimatedFairValue | 191,850,749 | 150,507,158 |
Redeemable Preferred Stock | ||
AmortizedCost | 623,635 | 612,023 |
HeldToMaturitySecuritiesEstimatedFairValue | 637,053 | $ 641,698 |
Common Stock | ||
Available-for-sale Securities, Amortized Cost Basis | 10,985,338 | |
AvailableForSaleSecuritiesEstimatedFairValue | 10,573,356 | |
DueIn2017Member | ||
AmortizedCost | 6,148,334 | |
HeldToMaturitySecuritiesEstimatedFairValue | 6,232,674 | |
DueIn2018Through2021Member | ||
AmortizedCost | 42,886,637 | |
HeldToMaturitySecuritiesEstimatedFairValue | 44,879,897 | |
DueIn2022Through2026Member | ||
AmortizedCost | 42,090,383 | |
HeldToMaturitySecuritiesEstimatedFairValue | 43,288,035 | |
DueAfter2026Member | ||
AmortizedCost | 83,742,572 | |
HeldToMaturitySecuritiesEstimatedFairValue | 87,324,617 | |
Mortgage backed securities | ||
AmortizedCost | 9,488,083 | |
HeldToMaturitySecuritiesEstimatedFairValue | $ 9,488,473 |
Note 2: Investments: Gain (Loss) on Investments (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Gains and losses and other than temporary impairments from investments and other assets | $ (446,745) | $ 1,795,929 | $ 1,753,936 |
Held-to-maturity Securities | |||
Gross Realized Gains | 389,558 | 387,162 | 390,203 |
Gross Realized Losses | (132,124) | (82,166) | (71,800) |
Other than Temporary Impairments | (100,000) | (120,000) | (120,000) |
Available-for-sale Securities | |||
Gross Realized Gains | 221,817 | 180,602 | 349,207 |
Gross Realized Losses | (61,242) | (66,850) | (55,222) |
Other than Temporary Impairments | (170,358) | (293,714) | (44,240) |
Other Assets | |||
Gross Realized Gains | 349,252 | 2,067,438 | 1,445,596 |
Gross Realized Losses | $ (943,648) | (84,827) | $ (139,808) |
Other than Temporary Impairments | $ (191,716) |
Note 2: Investments: Fixed Maturity Securities - Carrying Amount and Net Realized Gain (Details) - Held-to-maturity Securities - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Net carrying amount for sales of securities | $ 2,380,027 | $ 2,569,712 | $ 2,840,709 |
Net realized gain related to sales of securities | $ 155,346 | $ 311,752 | $ 20,722 |
Note 2: Investments: Schedule of Major categories of net investment income (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Gross Investment Income | $ 46,836,078 | $ 42,855,455 | $ 37,564,975 |
Investment Income, Investment Expense | (9,253,634) | (8,847,551) | (9,261,235) |
Net Investment Income | 37,582,444 | 34,007,904 | 28,303,740 |
Fixed Maturities | |||
Gross Investment Income | 8,972,877 | 8,168,441 | 8,229,451 |
Equity Securities | |||
Gross Investment Income | 270,942 | 269,795 | 212,917 |
MortgageLoansOnRealEstate1Member | |||
Gross Investment Income | 8,963,105 | 7,696,533 | 7,550,110 |
Real Estate | |||
Gross Investment Income | 10,969,828 | 9,454,567 | 8,433,895 |
PolicyLoans1Member | |||
Gross Investment Income | 781,188 | 749,917 | 741,220 |
Insurance Assignments | |||
Gross Investment Income | 11,876,836 | 8,915,655 | 7,324,964 |
Other investments | |||
Gross Investment Income | 25,122 | 6,533 | |
Short-term investments, principally gains on sale of mortgage loans | |||
Gross Investment Income | $ 4,976,180 | $ 7,594,014 | $ 5,072,418 |
Note 2: Investments: Net Investment Income - Additional (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Net Investment Income | $ 37,582,444 | $ 34,007,904 | $ 28,303,740 |
Securities on deposit for regulatory authorities | 9,269,121 | 8,815,542 | |
Cemeteries and mortuaries | |||
Net Investment Income | $ 419,360 | $ 369,632 | $ 356,369 |
Note 2: Investments: Mortgage Loans - Additional (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Mortgage loans on real estate balances, net of allowance for losses | $ 1,748,783 | $ 1,848,120 |
Minimum | ||
Mortgage Loan, Interest Rate | 2.00% | |
Maximum | ||
Mortgage Loan, Interest Rate | 10.50% |
Note 2: Investments: Schedule of Impaired Mortgage Loans (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Commercial Loan | ||
Impaired Financing Receivable, with No Related Allowance, Recorded Investment | $ 202,992 | |
Impaired Financing Receivable, Average Recorded Investment | 202,992 | |
Impaired Financing Receivable, Unpaid Principal Balance | 202,992 | |
Residential Mortgage | ||
Impaired Financing Receivable, with Related Allowance, Recorded Investment | 2,916,538 | $ 3,087,161 |
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance | 2,916,538 | 3,087,161 |
Impaired Financing Receivable, Related Allowance | 374,501 | 305,962 |
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment | 2,916,538 | 3,087,161 |
Impaired Financing Receivable, Average Recorded Investment | 2,916,538 | 3,087,161 |
Impaired Financing Receivable, Unpaid Principal Balance | 2,916,538 | 3,087,161 |
Residential Construction | ||
Impaired Financing Receivable, with No Related Allowance, Recorded Investment | 64,895 | 93,269 |
Impaired Financing Receivable, Average Recorded Investment | $ 64,895 | $ 93,269 |
Note 2: Investments: The Company's Performing and Non-performing Mortgage Loans Were As Follows (Details) - USD ($) |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Mortgage loans | $ 150,930,361 | $ 114,395,025 |
PerformingMember | ||
Mortgage loans | 147,745,936 | 108,936,707 |
NonPerformingMember | ||
Mortgage loans | 3,184,425 | 5,458,318 |
Commercial Loan | ||
Mortgage loans | 51,536,622 | 33,522,978 |
Commercial Loan | PerformingMember | ||
Mortgage loans | 51,333,630 | 33,522,978 |
Commercial Loan | NonPerformingMember | ||
Mortgage loans | 202,992 | |
Residential Mortgage | ||
Mortgage loans | 58,593,622 | 46,020,490 |
Residential Mortgage | PerformingMember | ||
Mortgage loans | 55,677,084 | 40,720,336 |
Residential Mortgage | NonPerformingMember | ||
Mortgage loans | 2,916,538 | 5,300,154 |
Residential Construction | ||
Mortgage loans | 40,800,117 | 34,851,557 |
Residential Construction | PerformingMember | ||
Mortgage loans | 40,735,222 | 34,693,393 |
Residential Construction | NonPerformingMember | ||
Mortgage loans | $ 64,895 | $ 158,164 |
Note 2: Investments: Summary of Interest not accrued on non-performing mortgage loans (Details) - USD ($) |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Details | ||
Interest not acrued on non-performing loans | $ 172,000 | $ 268,000 |
Note 2: Investments: Schedule of Mortgate loans on a nonaccrual status (Details) - USD ($) |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | $ 3,184,425 | $ 5,458,318 |
Commercial Loan | ||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | 202,992 | |
Residential Mortgage | ||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | 2,916,538 | 5,300,154 |
Residential Construction | ||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | $ 64,895 | $ 158,164 |
Note 2: Investments: Schedule of Principal amounts due on mortgage loans on real estate and construction loans held for investment by category (Details) |
Dec. 31, 2016
USD ($)
|
---|---|
Mortgage Loans Principal Amount due | $ 150,930,361 |
Residential Mortgage | |
Mortgage Loans Principal Amount due | 58,593,622 |
Residential Construction | |
Mortgage Loans Principal Amount due | 40,800,117 |
Commercial Loan | |
Mortgage Loans Principal Amount due | 51,536,622 |
DueInNextYearMember | |
Mortgage Loans Principal Amount due | 65,316,945 |
DueInNextYearMember | Residential Mortgage | |
Mortgage Loans Principal Amount due | 6,115,360 |
DueInNextYearMember | Residential Construction | |
Mortgage Loans Principal Amount due | 32,504,143 |
DueInNextYearMember | Commercial Loan | |
Mortgage Loans Principal Amount due | 26,697,442 |
DueInYearsTwoThroughFiveMember | |
Mortgage Loans Principal Amount due | 40,895,013 |
DueInYearsTwoThroughFiveMember | Residential Mortgage | |
Mortgage Loans Principal Amount due | 11,916,728 |
DueInYearsTwoThroughFiveMember | Residential Construction | |
Mortgage Loans Principal Amount due | 8,295,974 |
DueInYearsTwoThroughFiveMember | Commercial Loan | |
Mortgage Loans Principal Amount due | 20,682,311 |
DueThereafterMember | |
Mortgage Loans Principal Amount due | 44,718,403 |
DueThereafterMember | Residential Mortgage | |
Mortgage Loans Principal Amount due | 40,561,534 |
DueThereafterMember | Commercial Loan | |
Mortgage Loans Principal Amount due | $ 4,156,869 |
Note 2: Investments: Schedule of loan loss reserve which is included in other liabilities and accrued expenses (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Details | |||
Loan loss reserve, balance at start of period | $ 2,805,900 | $ 1,718,150 | |
Provision for current loan originations | 2,988,754 | 2,845,940 | |
Provision for loan loss reserve | 1,700,000 | 3,449,103 | $ 1,000,000 |
Loan loss reserve, Charge-offs and settlements | (6,866,921) | (5,207,293) | |
Loan loss reserve, balance at end of period | $ 627,733 | $ 2,805,900 | $ 1,718,150 |
Note 3: Receivables: Schedule of Receivables (Details) - USD ($) |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Details | ||
Trade contracts | $ 3,482,175 | $ 2,890,489 |
Receivables from sales agents | 4,016,393 | 3,280,423 |
Receivables held in escrow | 107,388 | 245,088 |
Other Receivables | 1,122,890 | 1,345,690 |
Accounts Receivable, Gross | 8,728,846 | 7,761,690 |
Allowance for Doubtful Accounts Receivable | (2,355,482) | (1,700,696) |
Receivables, net | $ 6,373,364 | $ 6,060,994 |
Note 4: Value of Business Acquired: Schedule of Value of Business Acquired (Details) - USD ($) |
12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|||
Details | |||||||||
Value of business acquired, balance at start of period | $ 7,570,300 | $ 8,743,773 | $ 8,547,627 | ||||||
Increase (Decrease) in value of business acquired | 1,473,272 | ||||||||
Imputed interest on value of business acquired | [1] | 45,762 | 590,108 | ||||||
Value of business acquired - amortization | (1,219,235) | (1,867,234) | |||||||
Value of business acquired - net amortization charged to income | $ (835,000) | $ (899,000) | $ (966,000) | $ (1,041,000) | $ (1,119,000) | (1,173,473) | (1,277,126) | ||
Value of business acquired, balance at start of period | $ 7,570,300 | $ 8,743,773 | |||||||
|
Note 4: Value of Business Acquired: Net amortization charged to income (Details) - USD ($) |
12 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Details | |||||||
Value of business acquired - net amortization charged to income | $ 835,000 | $ 899,000 | $ 966,000 | $ 1,041,000 | $ 1,119,000 | $ 1,173,473 | $ 1,277,126 |
Note 4: Value of Business Acquired: Goodwill and Intangible Assets Disclosure (Details) - USD ($) |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Details | ||
Goodwill, Beginning Balance | $ 2,765,570 | $ 2,765,570 |
Goodwill, Ending Balance | $ 2,765,570 | $ 2,765,570 |
Note 5: Property and Equipment: Property, Plant and Equipment (Details) - USD ($) |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Property, Plant and Equipment, Gross | $ 28,704,186 | $ 29,740,057 |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | (19,912,664) | (18,298,397) |
Property and equipment, net | 8,791,522 | 11,441,660 |
Land and Building | ||
Property, Plant and Equipment, Gross | 9,155,665 | 13,126,195 |
Office Equipment | ||
Property, Plant and Equipment, Gross | $ 19,548,521 | $ 16,613,862 |
Note 5: Property and Equipment (Details) - USD ($) |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|---|
Details | |||
Property, Plant and Equipment, Other, Accumulated Depreciation | $ 2,182,724 | $ 2,183,496 | $ 2,177,165 |
Note 6: Bank and Other Loans Payable: Summary of Bank Loans Payable (Details) - USD ($) |
Dec. 31, 2016 |
Dec. 31, 2015 |
|||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Bank loans payable | $ 152,140,679 | $ 131,005,614 | |||||||||||||||||||||||
Current Installment | 101,177,574 | 119,734,751 | |||||||||||||||||||||||
Bank and other loans, excluding current installments | 50,963,105 | 11,270,863 | |||||||||||||||||||||||
N634NotePayableMember | |||||||||||||||||||||||||
Bank loans payable | [1] | 147,346 | 312,240 | ||||||||||||||||||||||
MarkToMarketOfInterestRateSwapsMember | |||||||||||||||||||||||||
Bank loans payable | 3,308 | 13,947 | |||||||||||||||||||||||
N650NotePayableMember | |||||||||||||||||||||||||
Bank loans payable | [2] | 251,072 | |||||||||||||||||||||||
N625ANotePayableMember | |||||||||||||||||||||||||
Bank loans payable | [3] | 3,133,787 | 3,260,266 | ||||||||||||||||||||||
N385ANotePayableMember | |||||||||||||||||||||||||
Bank loans payable | [4] | 1,093,349 | 2,062,512 | ||||||||||||||||||||||
N427NotePayableMember | |||||||||||||||||||||||||
Bank loans payable | [5] | 2,904,354 | |||||||||||||||||||||||
N440NotePayableMember | |||||||||||||||||||||||||
Bank loans payable | [6] | 7,927,526 | 8,135,438 | ||||||||||||||||||||||
N4329NotePayableMember | |||||||||||||||||||||||||
Bank loans payable | [7] | 1,992,056 | 2,020,993 | ||||||||||||||||||||||
N625BNotePayableMember | |||||||||||||||||||||||||
Bank loans payable | [8] | 8,777,941 | |||||||||||||||||||||||
N99789NotePayableMember | |||||||||||||||||||||||||
Bank loans payable | [9] | 27,377,114 | 24,933,346 | ||||||||||||||||||||||
N0625ANotePayableMember | |||||||||||||||||||||||||
Bank loans payable | [10] | 76,843,180 | 61,302,069 | ||||||||||||||||||||||
N0625BNotePayableMember | |||||||||||||||||||||||||
Bank loans payable | [11] | 21,578,951 | 28,794,630 | ||||||||||||||||||||||
OtherCollateralizedBankLoansPayableMember | |||||||||||||||||||||||||
Bank loans payable | 109,734 | 169,212 | |||||||||||||||||||||||
OtherNotesPayable1Member | |||||||||||||||||||||||||
Bank loans payable | $ 961 | $ 961 | |||||||||||||||||||||||
|
Note 6: Bank and Other Loans Payable (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Interest expense | $ 5,111,868 | $ 4,458,612 | $ 2,994,429 |
InterestRateSwapInstrumentMember | |||
Long-term Debt, Fair Value | $ 3,308 | 13,947 | |
Debt Instrument, Interest Rate, Effective Percentage | 2.65% | ||
Derivative Liability | $ 3,308 | $ 13,947 | |
Change in accumulated other comprehensive income | $ 10,639 | $ 17,423 | |
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 | 3.00% | ||
Line of Credit Facility, Collateral | secured by the capital stock of Security National Life | ||
RevolvingLineOfCredit2Member | |||
Line of Credit Facility, Description | The Company has a $2,500,000 revolving line-of-credit with a bank with interest payable at the overnight LIBOR rate plus 2.25% | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 2,500,000 | ||
Line of Credit Facility, Interest Rate at Period End | 2.94% |
Note 6: Bank and Other Loans Payable: Schedule of combined maturities of bank loans payable, lines of credit and notes and contracts payable (Details) |
Dec. 31, 2016
USD ($)
|
---|---|
Bank loans payable, lines of credit and notes and contracts payable | $ 152,140,679 |
DueInYearOneMember | |
Bank loans payable, lines of credit and notes and contracts payable | 101,177,574 |
DueInYearTwoMember | |
Bank loans payable, lines of credit and notes and contracts payable | 1,539,638 |
DueInYearThreeMember | |
Bank loans payable, lines of credit and notes and contracts payable | 36,128,905 |
DueInYearFourMember | |
Bank loans payable, lines of credit and notes and contracts payable | 1,066,254 |
DueInYearFiveMember | |
Bank loans payable, lines of credit and notes and contracts payable | 3,436,591 |
DueInYearThereafterMember | |
Bank loans payable, lines of credit and notes and contracts payable | $ 8,791,717 |
Note 7: Cemetery and Mortuary Endowment Care and Pre need Merchandise Funds: Schedule of the components of the cemetery perpetual care obligation (Details) - USD ($) |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Details | ||
Cemetery perpetual care obligation, trust investments at market value | $ 4,131,885 | $ 2,848,759 |
Cemetery perpetual care obligation, note receivables eliminated in consolidation | 1,725,714 | 1,780,618 |
Cemetery perpetual care obligation, trust assets | 5,857,599 | 4,629,377 |
Cemetery perpetual care obligation | (3,598,580) | (3,465,771) |
Cemetery perpetual care obligation, fair value of trust assets in excess of trust obligations | $ 2,259,019 | $ 1,163,606 |
Note 7: Cemetery and Mortuary Endowment Care and Pre need Merchandise Funds: Schedule of Restricted Assets in Cemetery and Mortuary Endowment Care and Pre need Merchandise Funds (Details) - USD ($) |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Restricted assets | $ 10,391,394 | $ 9,359,802 |
CashAndCashEquivalents1Member | ||
Restricted assets | 8,070,972 | 7,206,863 |
MutualFundsMember | ||
Restricted assets | 645,241 | 596,994 |
FixedMaturitySecuritiesMember | ||
Restricted assets | 8,775 | 8,775 |
EquitySecurities1Member | ||
Restricted assets | 91,362 | 89,450 |
ParticipatingInMortgageLoansWithSecurityNationalLifeMember | ||
Restricted assets | $ 1,575,044 | $ 1,457,720 |
Note 8: Income Taxes: Summary of Income Tax Liability (Details) - USD ($) |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Details | ||
Current Income Tax Liability | $ (1,511,762) | $ (215,366) |
Income Tax Liability | 25,830,631 | 20,628,255 |
Income taxes | $ 24,318,869 | $ 20,412,889 |
Note 8: Income Taxes: Schedule of components of Deferred Tax Liabilities (Details) - USD ($) |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Liabilities | ||
Income Tax Liability | $ 25,830,631 | $ 20,628,255 |
ApproximateMember | ||
Assets | ||
Deferred Tax, Future policy benefits | (9,719,058) | (7,551,336) |
Deferred Tax, Loan Loss Reserve | (288,590) | (1,163,700) |
Deferred Tax, Unearned premium | (1,519,722) | (1,610,684) |
Deferred Tax, Available for sale Securities | (51,266) | (150,984) |
Deferred Tax Net Operating Loss | (1,531,160) | (588,537) |
Deferred Tax Deferred Compensation | (2,225,208) | (1,994,927) |
Deferred Tax Deposit Obligations | (1,033,580) | (1,026,984) |
Deferred Tax, Other assets | (3,384,144) | (3,694,959) |
Deferred Tax, Valuation Allowance | 431,802 | |
Deferred Tax Assets, Net of Valuation Allowance | (19,320,926) | (17,782,111) |
Liabilities | ||
Deferred Tax, Deferred policy acquisition costs | 18,150,517 | 14,838,604 |
Deferred Tax, Basis difference in property and equipment | 10,749,036 | 9,375,146 |
Deferred Tax, Value of business acquired | 2,573,902 | 2,972,883 |
Deferred Tax, Installment sales | 9,290,123 | 6,902,888 |
Deferred Tax, Trusts | 1,599,657 | 1,599,657 |
Tax on unrealized appreciation | 2,788,322 | 2,721,188 |
Deferred Tax Liabilities, Net | 45,151,557 | 38,410,366 |
Income Tax Liability | $ 25,830,631 | $ 20,628,255 |
Note 8: Income Taxes: Deferred taxes, taxes paid and changes in valuation allowance (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Details | |||
Deferred Taxes Increase In The Valuation Allowance | $ 431,802 | ||
Income taxes | $ 2,667,918 | $ 2,716,161 | $ 408,939 |
Note 8: Income Taxes: Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Details | |||
Federal Income Tax Expense (Benefit), Continuing Operations | $ 1,138,196 | $ 2,423,846 | $ 1,532,539 |
State and Local Income Tax Expense (Benefit), Continuing Operations | 245,764 | 412,175 | 121,124 |
Current Income Tax Expense (Benefit) | 1,383,960 | 2,836,021 | 1,653,663 |
Deferred Federal Income Tax Expense (Benefit) | 5,686,651 | 4,413,336 | 3,406,545 |
Deferred State and Local Income Tax Expense (Benefit) | 443,993 | 412,674 | 449,911 |
Provision for deferred and other income taxes | 6,130,644 | 4,826,010 | 3,856,456 |
Income tax expense | $ 7,514,604 | $ 7,662,031 | $ 5,510,119 |
Note 8: Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Details | |||
Effective Income Tax Rate Reconciliation at Federal Statutory Income Tax Rate, Amount | $ 6,699,099 | $ 7,144,580 | $ 4,667,165 |
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Amount | 455,240 | 544,400 | 376,883 |
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Amount | 431,802 | ||
Effective Income Tax Rate Reconciliation, Other Adjustments, Amount | (71,537) | (26,949) | 466,071 |
Income tax expense | $ 7,514,604 | $ 7,662,031 | $ 5,510,119 |
Note 8: Income Taxes: Unrecognized tax benefits, interest and penalties (Details) |
Dec. 31, 2016
USD ($)
|
---|---|
Details | |
Unrecognized Tax Benefits | $ 0 |
Note 9: Reinsurance, Commitments and Contingencies (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Amounts accrued for loan losses | $ 628,000 | $ 2,806,000 | |
Rent expense related to non-cancelable operating leases | 7,879,000 | 7,199,000 | $ 5,589,000 |
UnauditedMember | |||
Insurance assumed from other companies | $ 110,000 | $ 1,468,935,000 |
Note 9: Reinsurance, Commitments and Contingencies: Schedule of Future Minimum Rental Payments for Operating Leases (Details) |
Dec. 31, 2016
USD ($)
|
---|---|
Details | |
Operating Leases, Future Minimum Payments Due, Next Twelve Months | $ 6,556,093 |
Operating Leases, Future Minimum Payments, Due in Two Years | 4,121,399 |
Operating Leases, Future Minimum Payments, Due in Three Years | 2,583,941 |
Operating Leases, Future Minimum Payments, Due in Four Years | 1,151,873 |
Operating Leases, Future Minimum Payments, Due in Five Years | 496,713 |
Operating Leases, Future Minimum Payments Due | $ 14,910,019 |
Note 9: Reinsurance, Commitments and Contingencies: Other Contingencies and Commitments (Details) - USD ($) |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Details | ||
Reserve related to Insurance programs | $ 416,576 | $ 834,855 |
Note 10: Retirement Plans: Noncontributory Employee Stock Ownership Plan (ESOP) (Details) - EmployeeStockOwnershipPlanESOPMember |
12 Months Ended |
---|---|
Dec. 31, 2016
shares
| |
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 Companys contributions are allocated to eligible employees based on the ratio of each eligible employees compensation to total compensation for all eligible employees during each year. |
Class A Common Stock | |
Employee Stock Ownership Plan (ESOP), Shares in ESOP | 500,450 |
Class C Common Stock | |
Employee Stock Ownership Plan (ESOP), Shares in ESOP | 265,623 |
Note 10: Retirement Plans: 401(k) Plans (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
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, $18,000 and $17,500 for the years 2016, 2015 and 2014, respectively or the statutory limits. | ||
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Amount | $ 18,000 | $ 18,000 | $ 17,500 |
SafeHarborPlanMember | |||
Contribution to Retirement Plan | $ 1,429,962 | $ 1,197,236 | $ 899,850 |
Note 10: Retirement Plans: Deferred Compensation Plans (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
ScottMQuistMember | |||
Present value of anticipated benefits | $ 511,443 | $ 999,961 | $ 833,183 |
Deferred Compensation Arrangement with Individual, Recorded Liability | 3,776,368 | 3,264,925 | |
MrBecksteadMember | |||
Present value of anticipated benefits | 148,557 | 320,039 | $ 154,817 |
Deferred Compensation Arrangement with Individual, Recorded Liability | $ 1,109,277 | $ 1,093,720 | |
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. |
Note 11: Capital Stock: Schedule of Activity in shares of capital stock (Details) - USD ($) |
12 Months Ended | 24 Months Ended | |||
---|---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Class A Common Stock | |||||
Common Stock Outstanding | 13,819,006 | 13,109,100 | 12,459,240 | 12,459,240 | 11,807,287 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 42,634 | 23,961 | 54,412 | ||
Dividends | $ 657,919 | $ 624,483 | $ 595,020 | ||
Conversion of Stock, Shares Issued | 9,353 | 1,416 | 2,521 | ||
Class C Common Stock | |||||
Common Stock Outstanding | 1,902,229 | 1,709,640 | 1,394,069 | 1,394,069 | 1,330,191 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 104,975 | 241,652 | |||
Dividends | $ 96,967 | $ 75,335 | $ 66,384 | ||
Conversion of Stock, Shares Issued | (9,353) | (1,416) | (2,521) |
Note 11: Capital Stock: Schedule of Basic and diluted earnings per share (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Details | |||
Net Earnings (Loss) | $ 12,188,627 | $ 13,351,441 | $ 8,216,832 |
Weighted Average Number of Shares Outstanding, Basic and Diluted | 14,806,290 | 14,439,274 | 13,893,260 |
Employee stock options | $ 320,914 | $ 512,559 | $ 451,215 |
Diluted weighted-average shares outstanding | 320,914 | 512,559 | 451,215 |
Adjustedweighted average shares and assumed conversions | 15,127,204 | 14,951,833 | 14,344,475 |
Net earnings per Class A Equivalent common share (1) | $ 0.82 | $ 0.92 | $ 0.59 |
Net earnings per Class A equivalent common share - assuming dilution(1) | $ 0.81 | $ 0.89 | $ 0.57 |
Note 12: Stock Compensation Plans (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Details | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs, Capitalized Amount | $ 343,577 | $ 387,608 | $ 391,220 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ 670,959 | $ 1,190,879 |
Note 12: Stock Compensation Plans: Schedule of Activity of the 2003 Plan (Details) - USD ($) |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Class A Common Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number | 741,973 | 618,261 | 512,795 | 405,133 |
Shares outstanding | $ 4.33 | $ 3.89 | $ 3.20 | $ 2.41 |
Adjustment for the effect of stock dividends | 35,346 | 29,335 | 24,446 | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted | 133,500 | 133,500 | 173,500 | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Exercised | (42,634) | (26,850) | (59,713) | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period | (2,500) | (30,519) | (30,571) | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 601,731 | |||
Options exercisable | $ 3.78 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 253,432 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 7 years 4 months 13 days | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 6 years 9 months 7 days | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | $ 1,452,902 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | $ 1,452,574 | |||
Class C Common Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number | 556,298 | 577,436 | 691,591 | 508,657 |
Shares outstanding | $ 4.52 | $ 3.54 | $ 2.54 | |
Adjustment for the effect of stock dividends | 26,491 | 27,497 | 32,934 | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted | 80,000 | 100,000 | 150,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Exercised | (127,629) | (241,652) | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 472,298 | |||
Options exercisable | $ 4.02 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 2 years 8 months 1 day | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 2 years 3 months 7 days | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | $ 1,079,136 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | $ 1,079,136 |
Note 13: Statutory Financial Information and Dividend Limitations: Schedule of statutory accounting practices (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Statutory Accounting Practices, Statutory Net Income Amount | $ 2,778,522 | $ 3,478,826 | $ 5,139,394 |
Statutory Accounting Practices, Statutory Capital and Surplus, Balance | 44,055,297 | 35,942,860 | |
SecurityNationalLifeInsuranceMember | |||
Statutory Accounting Practices, Statutory Net Income Amount | 2,601,408 | 3,478,338 | 5,137,208 |
Statutory Accounting Practices, Statutory Capital and Surplus, Balance | 36,789,358 | 32,771,066 | |
First Guaranty Insurance Company | |||
Statutory Accounting Practices, Statutory Net Income Amount | 174,562 | ||
Statutory Accounting Practices, Statutory Capital and Surplus, Balance | 4,091,847 | ||
MemorialInsuranceCompanyOfAmericaMember | |||
Statutory Accounting Practices, Statutory Net Income Amount | 460 | 49 | 415 |
Statutory Accounting Practices, Statutory Capital and Surplus, Balance | 1,081,319 | 1,082,059 | |
SouthernSecurityLifeInsuranceCompanyIncMember | |||
Statutory Accounting Practices, Statutory Net Income Amount | 889 | 491 | 467 |
Statutory Accounting Practices, Statutory Capital and Surplus, Balance | 1,592,440 | 1,590,605 | |
TransWesternLifeInsuranceCompanyMember | |||
Statutory Accounting Practices, Statutory Net Income Amount | 1,203 | (52) | $ 1,304 |
Statutory Accounting Practices, Statutory Capital and Surplus, Balance | $ 500,333 | $ 499,130 |
Note 14: Business Segment Information: Schedule of Segment Reporting Information, by Segment (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Revenue from customers | $ 260,311,453 | $ 239,429,192 | $ 191,242,460 |
Net investment income | 37,582,444 | 34,007,904 | 28,303,740 |
Gain (Loss) on Investments | (176,387) | 2,401,359 | 1,918,176 |
Other than Temporary Impairment Losses, Investments | (270,358) | (605,430) | (164,240) |
Other income | 6,887,749 | 5,121,807 | 3,747,013 |
Net Investment Income | 37,582,444 | 34,007,904 | 28,303,740 |
Total revenues | 304,334,901 | 280,354,832 | 225,047,149 |
Death and other policy benefits | 33,387,380 | 33,549,893 | 29,789,964 |
Increase (Decrease) in Future Policy Benefit Reserves | 21,322,195 | 17,057,764 | 17,905,914 |
Amortization of deferred policy and preneed acquisition costs and Value of Business Acquired | 8,003,175 | 5,641,293 | 6,892,978 |
Depreciation | 2,182,724 | 2,183,496 | 2,177,165 |
Provision for Loan and Lease Losses | 1,700,000 | 3,449,103 | 1,000,000 |
Costs related to funding mortgage loans | 9,191,488 | 8,901,511 | 6,451,319 |
Other General Expense | 203,732,840 | 184,099,688 | 144,108,429 |
Interest Expense, Other | 5,111,868 | 4,458,612 | 2,994,429 |
Benefits and Expenses | 284,631,670 | 259,341,360 | 211,320,198 |
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | 19,703,231 | 21,013,472 | 13,726,951 |
Income tax expense | (7,514,604) | (7,662,031) | (5,510,119) |
Net Earnings (Loss) | 12,188,627 | 13,351,441 | 8,216,832 |
Identifiable Assets | 951,678,583 | 840,473,166 | 749,692,842 |
Goodwill | 2,765,570 | 2,765,570 | 2,765,570 |
Expenditures for long-lived assets | 3,566,511 | 3,632,690 | 1,520,443 |
Life Insurance Segment | |||
Revenue from customers | 66,902,126 | 58,883,721 | 57,037,623 |
Net investment income | 28,618,485 | 25,297,486 | 23,008,489 |
Gain (Loss) on Investments | (277,040) | 2,332,456 | 1,208,391 |
Other than Temporary Impairment Losses, Investments | (270,358) | (413,714) | (164,240) |
Other income | 632,260 | 824,759 | 682,682 |
Net Investment Income | 7,119,692 | 7,615,338 | 6,128,389 |
Total revenues | 102,725,165 | 94,540,046 | 87,901,334 |
Death and other policy benefits | 33,387,380 | 33,549,893 | 29,789,964 |
Increase (Decrease) in Future Policy Benefit Reserves | 21,322,195 | 17,057,764 | 17,905,914 |
Amortization of deferred policy and preneed acquisition costs and Value of Business Acquired | 7,647,097 | 5,306,781 | 6,561,589 |
Depreciation | 596,827 | 710,733 | 644,510 |
Administrative costs, intersegment | 24,000 | ||
Other General Expense | 29,478,156 | 27,416,860 | 23,045,928 |
Interest Expense, intersegment | 781,078 | 726,919 | 725,354 |
Interest Expense, Other | 1,654,264 | 1,151,860 | 578,083 |
Benefits and Expenses | 94,866,997 | 85,920,810 | 79,275,342 |
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | 7,858,168 | 8,619,236 | 8,625,992 |
Income tax expense | (3,451,292) | (3,191,370) | (3,796,327) |
Net Earnings (Loss) | 4,406,876 | 5,427,866 | 4,829,665 |
Identifiable Assets | 821,097,220 | 721,362,741 | 652,348,803 |
Goodwill | 2,765,570 | 2,765,570 | 2,765,570 |
Expenditures for long-lived assets | 532,958 | 3,024,223 | 660,830 |
Cemetery and Mortuary | |||
Revenue from customers | 12,267,640 | 11,502,045 | 11,426,308 |
Net investment income | 312,494 | 450,854 | 275,324 |
Gain (Loss) on Investments | 211,429 | 387,316 | 585,543 |
Other income | 88,676 | 146,831 | 169,464 |
Net Investment Income | 691,876 | 1,155,180 | 1,288,856 |
Total revenues | 13,572,115 | 13,642,226 | 13,745,495 |
Amortization of deferred policy and preneed acquisition costs and Value of Business Acquired | 356,078 | 334,512 | 331,389 |
Depreciation | 390,362 | 403,066 | 436,390 |
Administrative costs, intersegment | 148,025 | 156,777 | 166,079 |
Other General Expense | 10,524,535 | 10,117,012 | 10,245,144 |
Interest Expense, intersegment | 651,046 | 1,379,668 | 1,481,317 |
Interest Expense, Other | 282,878 | 337,632 | 421,920 |
Benefits and Expenses | 12,352,924 | 12,728,667 | 13,082,239 |
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | 1,219,191 | 913,559 | 663,256 |
Net Earnings (Loss) | 1,219,191 | 913,559 | 663,256 |
Identifiable Assets | 99,611,263 | 101,935,898 | 109,114,226 |
Expenditures for long-lived assets | 723,445 | 154,226 | 121,677 |
Mortgage | |||
Revenue from customers | 181,141,687 | 169,043,426 | 122,778,529 |
Net investment income | 8,651,465 | 8,259,564 | 5,019,927 |
Gain (Loss) on Investments | (110,776) | (318,413) | 124,242 |
Other than Temporary Impairment Losses, Investments | (191,716) | ||
Other income | 6,166,813 | 4,150,217 | 2,894,867 |
Net Investment Income | 327,778 | 326,822 | 642,880 |
Total revenues | 196,176,967 | 181,269,900 | 131,460,445 |
Depreciation | 1,195,535 | 1,069,697 | 1,096,265 |
Administrative costs, intersegment | 219,974 | 199,244 | 208,513 |
Provision for Loan and Lease Losses | 1,700,000 | 3,449,103 | 1,000,000 |
Costs related to funding mortgage loans | 9,191,488 | 8,901,511 | 6,451,319 |
Other General Expense | 163,730,148 | 146,565,817 | 110,817,359 |
Interest Expense, intersegment | 6,339,224 | 6,634,731 | 5,454,860 |
Interest Expense, Other | 3,174,726 | 2,969,120 | 1,994,426 |
Benefits and Expenses | 185,551,095 | 169,789,223 | 127,022,742 |
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | 10,625,872 | 11,480,677 | 4,437,703 |
Income tax expense | (4,063,312) | (4,470,661) | (1,713,792) |
Net Earnings (Loss) | 6,562,560 | 7,010,016 | 2,723,911 |
Identifiable Assets | 171,844,559 | 157,283,191 | 130,972,484 |
Expenditures for long-lived assets | 2,310,108 | 454,241 | 737,936 |
Significant Reconciling Items | |||
Net Investment Income | (8,139,346) | (9,097,340) | (8,060,125) |
Total revenues | (8,139,346) | (9,097,340) | (8,060,125) |
Administrative costs, intersegment | (367,999) | (356,021) | (398,592) |
Other General Expense | 1 | (1) | (2) |
Interest Expense, intersegment | (7,771,348) | (8,741,318) | (7,661,531) |
Benefits and Expenses | (8,139,346) | (9,097,340) | (8,060,125) |
Identifiable Assets | $ (140,874,459) | $ (140,108,664) | $ (142,742,671) |
Note 16: Fair Value of Financial Instruments: Schedule of fair value assets and liabilities measured on a recurring basis (Details) - USD ($) |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Trading Securities, Equity | $ 10,573,356 | $ 8,431,090 |
Available-for-sale Securities | 10,573,356 | 8,431,090 |
Restricted assets of cemeteries and mortuaries | 736,603 | 686,444 |
Cemetery perpetual care trust investments | 698,202 | 630,854 |
Derivatives - interest rate lock commitments | 6,911,544 | 7,779,162 |
Other Investments | 1,765,752 | 1,174,769 |
Assets, Fair Value Disclosure, Recurring | 20,685,457 | 18,702,319 |
Policyholder account balances | (49,421,125) | (50,694,953) |
Future policy benefits - annuities | (99,388,662) | (69,398,617) |
Derivatives - bank loan interest rate swaps | (3,308) | (13,947) |
Derivatives - bank loan interest rate swaps, Call Options | (109,474) | (16,342) |
Derivatives - bank loan interest rate swaps, Put Options | (26,494) | |
Derivatives - bank loan interest rate swaps, Interest rate lock commitments | (102,212) | (107,667) |
Obligations, Fair Value Disclosure | (149,051,275) | (120,260,355) |
Fair Value, Inputs, Level 1 | ||
Trading Securities, Equity | 10,573,356 | 8,431,090 |
Available-for-sale Securities | 10,573,356 | 8,431,090 |
Restricted assets of cemeteries and mortuaries | 736,603 | 686,444 |
Cemetery perpetual care trust investments | 698,202 | 630,854 |
Assets, Fair Value Disclosure, Recurring | 12,008,161 | 9,748,388 |
Derivatives - bank loan interest rate swaps, Call Options | (109,474) | (16,342) |
Derivatives - bank loan interest rate swaps, Put Options | (26,494) | |
Obligations, Fair Value Disclosure | (135,968) | (45,171) |
Fair Value, Inputs, Level 3 | ||
Derivatives - interest rate lock commitments | 6,911,544 | 7,779,162 |
Other Investments | 1,765,752 | 1,174,769 |
Assets, Fair Value Disclosure, Recurring | 8,677,296 | 8,953,931 |
Policyholder account balances | (49,421,125) | (50,694,953) |
Future policy benefits - annuities | (99,388,662) | (69,398,617) |
Derivatives - bank loan interest rate swaps | (3,308) | (13,947) |
Derivatives - bank loan interest rate swaps, Interest rate lock commitments | (102,212) | (107,667) |
Obligations, Fair Value Disclosure | $ (148,915,307) | $ (120,215,184) |
Note 16: 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, 2016 |
Dec. 31, 2015 |
|
Policyholder Account Balances | ||
Fair Value Balance | $ (50,694,953) | $ (45,310,699) |
Fair Value, Losses (Gains) included in earnings | 1,273,828 | (5,384,254) |
Fair Value Balance | (49,421,125) | (50,694,953) |
Future Policy Benefits - Annuities | ||
Fair Value Balance | (69,398,617) | (65,540,985) |
Purchases | (30,294,480) | |
Fair Value, Losses (Gains) included in earnings | 304,435 | (3,857,632) |
Fair Value Balance | (99,388,662) | (69,398,617) |
Interest Rate Lock Commitments | ||
Fair Value Balance | 7,671,495 | 5,105,605 |
Fair Value, Losses (Gains) included in earnings | (862,163) | 2,565,890 |
Fair Value Balance | 6,809,332 | 7,671,495 |
Bank Loan Interest Rate Swaps | ||
Fair Value Balance | (13,947) | (31,370) |
Fair Value, Losses (Gains) included in other comprehensive income | 10,639 | 17,423 |
Fair Value Balance | (3,308) | (13,947) |
Other Investments | ||
Fair Value Balance | 1,174,769 | |
Purchases | 600,000 | 1,200,000 |
Fair Value, Losses (Gains) included in other comprehensive income | (9,017) | (25,231) |
Fair Value Balance | $ 1,765,752 | $ 1,174,769 |
Note 16: Fair Value of Financial Instruments: Fair Value Assets Measured on a Nonrecurring Basis (Details) - USD ($) |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Mortgage Loans on Real Estate | $ 2,809,925 | $ 2,874,468 |
Mortgage servicing rights | 8,603,154 | 6,217,551 |
Real estate held for investment | 2,347,820 | 95,000 |
Assets, Fair Value Disclosure, Nonrecurring | 13,760,899 | 9,187,019 |
Fair Value, Inputs, Level 3 | ||
Mortgage Loans on Real Estate | 2,809,925 | 2,874,468 |
Mortgage servicing rights | 8,603,154 | 6,217,551 |
Real estate held for investment | 2,347,820 | 95,000 |
Assets, Fair Value Disclosure, Nonrecurring | $ 13,760,899 | $ 9,187,019 |
Note 16: Fair Value of Financial Instruments: Schedule of Financial Instruments Carried at Other Than Fair Value (Details) - USD ($) |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Carrying Value | $ 184,979,644 | $ 145,558,425 |
Estimated Carrying Value | 191,850,749 | 150,507,158 |
Residential Mortgage | ||
Carrying Value | 57,132,082 | 44,459,613 |
Estimated Carrying Value | 61,357,393 | 47,193,950 |
Residential Construction | ||
Carrying Value | 40,700,003 | 34,751,443 |
Estimated Carrying Value | 40,700,003 | 34,751,443 |
Commercial Loan | ||
Carrying Value | 51,349,493 | 33,335,849 |
Estimated Carrying Value | 53,299,800 | 34,778,136 |
MortgageLoansNet1Member | ||
Carrying Value | 149,181,578 | 211,453,006 |
Estimated Carrying Value | 155,357,196 | 217,646,189 |
LoansHeldForSale1Member | ||
Carrying Value | 189,139,832 | 112,546,905 |
Estimated Carrying Value | 192,289,854 | 116,723,529 |
PolicyLoanMember | ||
Carrying Value | 6,694,148 | 6,896,457 |
Estimated Carrying Value | 6,694,148 | 6,896,457 |
Insurance Assignments | ||
Carrying Value | 32,477,246 | 31,511,195 |
Estimated Carrying Value | 32,477,246 | 31,511,195 |
ShortTermInvestments1Member | ||
Carrying Value | 27,560,040 | 16,915,808 |
Estimated Carrying Value | 27,560,040 | 16,915,808 |
MortgageServicingRights2Member | ||
Carrying Value | 18,872,362 | 12,679,755 |
Estimated Carrying Value | 25,496,832 | 13,897,160 |
BankAndOtherLoansPayable1Member | ||
Carrying Value | (152,137,341) | (130,991,667) |
Estimated Carrying Value | (152,137,341) | (130,991,667) |
Fair Value, Inputs, Level 2 | ||
Estimated Carrying Value | 191,850,749 | 150,507,158 |
Fair Value, Inputs, Level 3 | Residential Mortgage | ||
Estimated Carrying Value | 61,357,393 | 47,193,950 |
Fair Value, Inputs, Level 3 | Residential Construction | ||
Estimated Carrying Value | 40,700,003 | 34,751,443 |
Fair Value, Inputs, Level 3 | Commercial Loan | ||
Estimated Carrying Value | 53,299,800 | 34,778,136 |
Fair Value, Inputs, Level 3 | MortgageLoansNet1Member | ||
Estimated Carrying Value | 155,357,196 | 217,646,189 |
Fair Value, Inputs, Level 3 | LoansHeldForSale1Member | ||
Estimated Carrying Value | 192,289,854 | 116,723,529 |
Fair Value, Inputs, Level 3 | PolicyLoanMember | ||
Estimated Carrying Value | 6,694,148 | 6,896,457 |
Fair Value, Inputs, Level 3 | Insurance Assignments | ||
Estimated Carrying Value | 32,477,246 | 31,511,195 |
Fair Value, Inputs, Level 3 | ShortTermInvestments1Member | ||
Estimated Carrying Value | 27,560,040 | 16,915,808 |
Fair Value, Inputs, Level 3 | MortgageServicingRights2Member | ||
Estimated Carrying Value | 25,496,832 | 13,897,160 |
Fair Value, Inputs, Level 3 | BankAndOtherLoansPayable1Member | ||
Estimated Carrying Value | $ (152,137,341) | $ (130,991,667) |
Note 17: Accumulated Other Comprehensive Income: Schedule of Changes in accumulated other comprehensive income (Details) - USD ($) |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Details | ||
Accumulated other comprehensive income, Unrealized gains (losses) on Available for Sale Securities | $ 996,343 | $ (1,289,508) |
Reclassification adjustment for net realized gains in net income | 160,575 | 113,751 |
Net unrealized gains (losses) before taxes | 1,156,918 | (1,175,757) |
Tax (expense) benefit | (399,228) | 404,414 |
Net Unrealized Gain (Loss) | 757,690 | (771,343) |
Net Potential unrealized gains (losses) for derivative mortgage loans before taxes | 10,639 | 17,423 |
Potential Tax Expense Benefit | (4,149) | (6,795) |
Net Unrealized Gain (Loss) including Derivatie Bank Loans and Tax benefit | 6,490 | 10,628 |
Other comprehensive income changes | $ 764,180 | $ (760,715) |
Note 17: Accumulated Other Comprehensive Income: Accumulated Balances of Other Comprehensive Income (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Details | |||
Unrealized net gains on available- for-sale securities and trust investments | $ (490,850) | $ 280,493 | $ 346,341 |
Increase (Decrease) in Unrealized net gains on available- for-sale securities and trust investments | 757,690 | (771,343) | (65,848) |
Unrealized net gains on available- for-sale securities and trust investments | 266,840 | (490,850) | 280,493 |
Unrealized gains (losses) on derivative bank loan interest rate swaps | (8,508) | (19,136) | (35,569) |
Increase (Decrease) in Unrealized gains (losses) on derivative bank loan interest rate swaps | 6,490 | 10,628 | 16,433 |
Unrealized gains (losses) on derivative bank loan interest rate swaps | (2,018) | (8,508) | (19,136) |
Other comprehensive income, Balance | (499,358) | 261,357 | 310,772 |
Increase (Decrease) in Other comprehensive income, Balance | 764,180 | (760,715) | (49,415) |
Other comprehensive income, Balance | $ 264,822 | $ (499,358) | $ 261,357 |
Note 18: Derivative Instruments: Schedule of Derivative Assets at Fair Value (Details) - USD ($) |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Details | ||
Fair Value of Asset Derivatives, Interest rate lock and forward sales commitments | $ 6,911,544 | $ 7,779,162 |
Fair Value of Liability Derivatives, Interest rate lock and forward sales commitments | 102,212 | 107,667 |
Fair Value of Liability Derivatives, Call Options | 109,474 | 16,342 |
Fair Value of Liability Derivatives, Put Options | 26,494 | 28,829 |
Fair Value of Liability Derivatives, Interest Rate Swaps | 3,308 | 13,947 |
Fair Value of Asset Derivatives, Total | 6,911,544 | 7,779,162 |
Fair Value of Liability Derivatives, Total | $ 241,488 | $ 166,785 |
Note 18: Derivative Instruments: Schedule of Gains and Losses on Derivatives (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Details | ||
Gain (Loss) on Derivatives, Interest Rate Swaps | $ 10,639 | $ 17,423 |
Sub total Gain on Derivatives | 10,639 | 17,423 |
Tax Effect Gain on Derivatives | 4,149 | 6,795 |
Gain (Loss) on Derivatives, Total | $ 6,490 | $ 10,628 |
Note 19: Acquisitions: The Estimated Fair Values of The Assets Acquired and The Liabilities Assumed At The Date of Acquisition (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2014 |
|
First Guaranty Insurance Company | ||
Fair Value of Assets Acquired | $ 6,753,000 | |
American Funeral Financial | ||
Fair Value of Assets Acquired | $ 15,011,193 | |
FixedMaturitySecuritiesHeldToMaturityMember | First Guaranty Insurance Company | ||
Fair Value of Assets Acquired | 43,878,084 | |
EquitySecuritiesAvailableForSaleMember | First Guaranty Insurance Company | ||
Fair Value of Assets Acquired | 646,335 | |
MortgageLoansOnRealEstate1Member | First Guaranty Insurance Company | ||
Fair Value of Assets Acquired | 4,528,582 | |
RealEstateHeldForInvestmentMember | First Guaranty Insurance Company | ||
Fair Value of Assets Acquired | 528,947 | |
PolicyLoans1Member | First Guaranty Insurance Company | ||
Fair Value of Assets Acquired | 145,953 | |
ShortTermInvestments1Member | First Guaranty Insurance Company | ||
Fair Value of Assets Acquired | 5,358,403 | |
AccruedInvestmentIncomeMember | First Guaranty Insurance Company | ||
Fair Value of Assets Acquired | 585,985 | |
CashAndCashEquivalents1Member | First Guaranty Insurance Company | ||
Fair Value of Assets Acquired | 2,424,480 | |
ReceivablesMember | First Guaranty Insurance Company | ||
Fair Value of Assets Acquired | 73,347 | |
PropertyAndEquipmentMember | First Guaranty Insurance Company | ||
Fair Value of Assets Acquired | 21,083 | |
PropertyAndEquipmentMember | American Funeral Financial | ||
Fair Value of Assets Acquired | 760,120 | |
DeferredTaxAssetMember | First Guaranty Insurance Company | ||
Fair Value of Assets Acquired | 1,190,862 | |
ReceivableFromReinsurersMember | First Guaranty Insurance Company | ||
Fair Value of Assets Acquired | 34,948 | |
OtherMember | First Guaranty Insurance Company | ||
Fair Value of Assets Acquired | 57,768 | |
OtherMember | American Funeral Financial | ||
Fair Value of Assets Acquired | 1,379,158 | |
TotalAssetsMember | First Guaranty Insurance Company | ||
Fair Value of Assets Acquired | 59,474,777 | |
TotalAssetsMember | American Funeral Financial | ||
Fair Value of Assets Acquired | 16,379,193 | |
FutureLifeAnnuityAndOtherBenefitsMember | First Guaranty Insurance Company | ||
Fair Value of Assets Acquired | (52,648,838) | |
AccountsPayable1Member | First Guaranty Insurance Company | ||
Fair Value of Assets Acquired | (6,953) | |
OtherLiabilitiesAndAccruedExpensesMember | First Guaranty Insurance Company | ||
Fair Value of Assets Acquired | (65,986) | |
OtherLiabilitiesAndAccruedExpensesMember | American Funeral Financial | ||
Fair Value of Assets Acquired | (1,368,000) | |
TotalLiabilitiesMember | First Guaranty Insurance Company | ||
Fair Value of Assets Acquired | $ (52,721,777) | |
TotalLiabilitiesMember | American Funeral Financial | ||
Fair Value of Assets Acquired | (1,368,000) | |
OtherLoansMember | American Funeral Financial | ||
Fair Value of Assets Acquired | 11,866,193 | |
Goodwill1Member | American Funeral Financial | ||
Fair Value of Assets Acquired | $ 2,373,722 |
Note 19: Acquisitions: Business Acquisition, Pro Forma Information (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
First Guaranty Insurance Company | |||
Business Acquisition, Pro Forma Revenue | $ 306,471,770 | $ 284,812,830 | $ 229,483,646 |
Business Acquisition, Pro Forma Net Income (Loss) | $ 11,923,653 | $ 12,627,709 | $ 8,044,482 |
Business Acquisition, Pro Forma Earnings Per Share, Basic | $ 0.95 | $ 0.88 | $ 0.57 |
Business Acquisition, Pro Forma Earnings Per Share, Diluted | $ 0.93 | $ 0.85 | $ 0.55 |
American Funeral Financial | |||
Business Acquisition, Pro Forma Revenue | $ 304,334,901 | $ 280,354,832 | $ 227,379,128 |
Business Acquisition, Pro Forma Net Income (Loss) | $ 12,188,627 | $ 13,351,441 | $ 8,458,589 |
Business Acquisition, Pro Forma Earnings Per Share, Basic | $ 0.96 | $ 0.93 | $ 0.59 |
Business Acquisition, Pro Forma Earnings Per Share, Diluted | $ 0.94 | $ 0.90 | $ 0.58 |
Note 20: Mortgage Servicing Rights: Schedule of mortgage servicing rights (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Details | ||
Mortgage servicing rights | $ 8,603,154 | $ 6,217,551 |
Amortization of MSR's | (2,410,547) | (1,372,543) |
MortgageServicingRights | 18,872,362 | 12,679,755 |
Estimated fair value of MSRs | $ 25,496,832 | $ 13,897,160 |
Note 20: Mortgage Servicing Rights: Schedule of Mortgage Servicing Rights Amortization (Details) - USD ($) |
12 Months Ended | |||||
---|---|---|---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2022 |
|
Details | ||||||
Estimated Amortization of Mortgage Service Rights | $ 2,696,052 | $ 2,696,052 | $ 2,696,052 | $ 2,696,052 | $ 2,696,052 | |
Amortization of Mortgage Servicing Rights Thereafter | $ 5,392,104 |
Note 20: Mortgage Servicing Rights: Schedule of Other Revenues (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Other Revenue, Net | $ 5,865,207 | $ 3,984,695 | $ 2,764,633 |
Contractual Servicing Fees | |||
Other Revenue, Net | 5,661,699 | 3,864,454 | 2,641,234 |
Late fees | |||
Other Revenue, Net | $ 203,509 | $ 120,241 | $ 123,399 |
Note 20: Mortgage Servicing Rights: Summary of Unpaid Principal Balances of the Servicing Portfolio (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Details | |||
Servicing Unpaid Principal Balance | $ 2,720,441,340 | $ 1,861,835,430 | $ 1,227,249,143 |
Note 20: Mortgage Servicing Rights: Assumptions used in determining MSR value (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Details | |||
Prepayment Speeds | 3.77% | 3.02% | 2.87% |
Average Life in Years of MSR | 6.52 | 5.24 | 4.96 |
Discount Rate | 10.01% | 10.00% | 10.00% |
Note 21: Correction of Errors: Schedule of Error Corrections and Prior Period Adjustments (Details) - USD ($) |
3 Months Ended | 12 Months Ended | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2014 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Loans held for sale | $ 211,453,006 | $ 189,139,832 | $ 211,453,006 | |||||||||||||
Receivables, net | 6,060,994 | 6,373,364 | 6,060,994 | |||||||||||||
Other assets | 11,439,273 | 10,413,394 | 11,439,273 | |||||||||||||
Total Assets | 840,473,166 | 951,678,583 | 840,473,166 | |||||||||||||
Future life, annuity, and other benefits | 515,789,254 | 584,067,692 | 515,789,254 | |||||||||||||
Bank and other loans payable | 131,005,614 | 152,140,679 | 131,005,614 | |||||||||||||
Income taxes | 20,412,889 | 24,318,869 | 20,412,889 | |||||||||||||
Total liabilities | 722,756,487 | 819,119,452 | 722,756,487 | |||||||||||||
Accumulated other comprehensive income, net of taxes | (499,358) | 264,822 | (499,358) | |||||||||||||
Retained earnings | 60,525,404 | 67,409,204 | 60,525,404 | |||||||||||||
Balance | 117,716,679 | $ 103,688,971 | 132,559,131 | 117,716,679 | $ 103,688,971 | $ 87,751,189 | ||||||||||
Total Liabilities and Stockholders' Equity | 840,473,166 | 951,678,583 | 840,473,166 | |||||||||||||
Mortgage fee income | 183,542,796 | 171,517,284 | 126,807,473 | |||||||||||||
Total revenues | 304,334,901 | 280,354,832 | 225,047,149 | |||||||||||||
Increase in future policy benefits | 21,322,195 | 17,057,764 | 17,905,914 | |||||||||||||
Commissions | 88,634,494 | 80,900,618 | 59,374,542 | |||||||||||||
Provision for loan loss reserve | 1,700,000 | 3,449,103 | 1,000,000 | |||||||||||||
Costs related to funding mortgage loans | 9,191,488 | 8,901,511 | 6,451,319 | |||||||||||||
Total benefits and expenses | 284,631,670 | 259,341,360 | 211,320,198 | |||||||||||||
Earnings before income taxes | 19,703,231 | 21,013,472 | 13,726,951 | |||||||||||||
Income tax expense | 7,514,604 | 7,662,031 | 5,510,119 | |||||||||||||
Net earnings | $ 12,188,627 | $ 13,351,441 | $ 8,216,832 | |||||||||||||
Net earnings per Class A Equivalent common share (1) | $ 0.82 | $ 0.92 | $ 0.59 | |||||||||||||
Net earnings per Class A equivalent common share - assuming dilution(1) | $ 0.81 | $ 0.89 | $ 0.57 | |||||||||||||
Net unrealized gains on derivative instruments | $ 6,490 | $ 10,628 | $ 16,433 | |||||||||||||
Other comprehensive income | 764,180 | (760,715) | (49,415) | |||||||||||||
Provision for deferred and other income taxes | 6,130,644 | 4,826,010 | 3,856,456 | |||||||||||||
Loans originated for sale | (3,098,710,299) | (2,861,404,239) | (2,044,909,613) | |||||||||||||
Proceeds from loans sold | 3,246,127,714 | 2,933,300,742 | 2,102,740,825 | |||||||||||||
Net gains on loans sold | (137,682,984) | (131,130,447) | (93,144,155) | |||||||||||||
Future life and other benefits | 17,989,595 | 15,078,397 | 13,930,657 | |||||||||||||
Other operating assets and liabilities | (5,125,376) | 4,456,090 | (1,589,164) | |||||||||||||
Net cash provided by (used in) operating activities | 35,535,014 | (28,113,387) | (12,463,558) | |||||||||||||
Net change in warehouse line borrowings | 8,325,432 | 12,282,139 | 43,479,367 | |||||||||||||
Net cash provided by financing activities | 18,990,088 | 21,938,700 | 49,843,370 | |||||||||||||
ScenarioAsOriginallyReportedMember | ||||||||||||||||
Loans held for sale | 115,286,455 | 82,491,091 | 115,286,455 | |||||||||||||
Receivables, net | 16,026,100 | 18,870,119 | 16,026,100 | |||||||||||||
Other assets | 7,100,869 | 6,891,468 | 7,100,869 | |||||||||||||
Total Assets | 749,933,317 | 854,004,671 | 749,933,317 | |||||||||||||
Future life, annuity, and other benefits | 517,177,388 | 585,610,063 | 517,177,388 | |||||||||||||
Bank and other loans payable | 40,908,915 | 53,718,548 | 40,908,915 | |||||||||||||
Income taxes | 25,052,059 | 27,904,294 | 25,052,059 | |||||||||||||
Total liabilities | 638,687,092 | 725,825,117 | 638,687,092 | |||||||||||||
Accumulated other comprehensive income, net of taxes | 1,533,828 | 1,438,566 | 264,822 | 1,533,828 | 1,438,566 | 1,218,396 | ||||||||||
Retained earnings | 52,021,764 | 44,101,252 | 63,029,627 | 52,021,764 | 44,101,252 | 39,666,587 | ||||||||||
Balance | 111,246,225 | 128,179,554 | 111,246,225 | |||||||||||||
Total Liabilities and Stockholders' Equity | 749,933,317 | 854,004,671 | 749,933,317 | |||||||||||||
Mortgage fee income | 186,416,311 | 174,323,452 | 128,696,998 | |||||||||||||
Total revenues | 307,208,416 | 283,161,000 | 226,936,674 | |||||||||||||
Increase in future policy benefits | 21,476,432 | 17,212,001 | 18,060,151 | |||||||||||||
Commissions | 87,762,583 | 81,935,623 | 59,876,675 | |||||||||||||
Provision for loan loss reserve | 4,688,754 | 6,295,043 | 3,053,403 | |||||||||||||
Costs related to funding mortgage loans | 8,756,791 | 8,864,404 | 6,877,069 | |||||||||||||
Total benefits and expenses | 286,468,053 | 263,339,435 | 214,455,721 | |||||||||||||
Earnings before income taxes | 20,740,363 | 19,821,565 | 12,480,953 | |||||||||||||
Income tax expense | (6,460,859) | (7,198,685) | (4,726,305) | |||||||||||||
Net earnings | $ 14,279,504 | $ 12,622,880 | $ 7,754,648 | |||||||||||||
Net earnings per Class A Equivalent common share (1) | $ 0.96 | $ 0.87 | $ 0.56 | |||||||||||||
Net earnings per Class A equivalent common share - assuming dilution(1) | $ 0.94 | $ 0.84 | $ 0.54 | |||||||||||||
Net unrealized gains on derivative instruments | $ 6,490 | $ 866,605 | $ 286,018 | |||||||||||||
Other comprehensive income | 764,180 | 95,262 | 220,170 | |||||||||||||
Provision for deferred and other income taxes | 5,076,899 | 4,909,927 | 3,245,004 | |||||||||||||
Future life and other benefits | 18,143,832 | 15,232,634 | 14,084,894 | |||||||||||||
Receivables for mortgage loans sold | 20,216,621 | (47,752,055) | 7,362,353 | |||||||||||||
Other operating assets and liabilities | (8,473,503) | 4,890,770 | (135,279) | |||||||||||||
Net cash provided by (used in) operating activities | 43,860,446 | (15,831,248) | 31,015,809 | |||||||||||||
Net cash provided by financing activities | $ 10,664,656 | 9,656,561 | 6,364,003 | |||||||||||||
AdjustmentAMember | ||||||||||||||||
Accumulated other comprehensive income, net of taxes | (2,033,186) | (1,177,209) | (2,033,186) | (1,177,209) | (907,624) | |||||||||||
Retained earnings | 2,033,186 | 1,177,209 | 2,033,186 | 1,177,209 | 907,624 | |||||||||||
Mortgage fee income | 1,403,240 | 441,943 | ||||||||||||||
Total revenues | 1,403,240 | 441,943 | ||||||||||||||
Earnings before income taxes | 1,403,240 | 441,943 | ||||||||||||||
Income tax expense | (547,263) | (172,358) | ||||||||||||||
Net earnings | $ 855,977 | $ 269,585 | ||||||||||||||
Net earnings per Class A Equivalent common share (1) | $ 0.00 | $ 0.06 | $ 0.02 | |||||||||||||
Net earnings per Class A equivalent common share - assuming dilution(1) | $ 0.00 | $ 0.06 | $ 0.02 | |||||||||||||
Net unrealized gains on derivative instruments | $ (855,977) | $ (269,585) | ||||||||||||||
Other comprehensive income | (855,977) | (269,585) | ||||||||||||||
Scenario, Previously Reported | ||||||||||||||||
Loans held for sale | 115,286,455 | $ 82,491,091 | 115,286,455 | |||||||||||||
Receivables, net | 16,026,100 | 18,870,119 | 16,026,100 | |||||||||||||
Other assets | 7,100,869 | 6,891,468 | 7,100,869 | |||||||||||||
Total Assets | 749,933,317 | 854,004,671 | 749,933,317 | |||||||||||||
Future life, annuity, and other benefits | 517,177,388 | 585,610,063 | 517,177,388 | |||||||||||||
Bank and other loans payable | 40,908,915 | 53,718,548 | 40,908,915 | |||||||||||||
Income taxes | 25,052,059 | 27,904,294 | 25,052,059 | |||||||||||||
Total liabilities | 638,687,092 | 725,825,117 | 638,687,092 | |||||||||||||
Accumulated other comprehensive income, net of taxes | (499,358) | 261,357 | 264,822 | (499,358) | 261,357 | 310,772 | ||||||||||
Retained earnings | 54,054,950 | 45,278,461 | 63,029,627 | 54,054,950 | 45,278,461 | 40,574,211 | ||||||||||
Balance | 111,246,225 | 128,179,554 | 111,246,225 | |||||||||||||
Total Liabilities and Stockholders' Equity | 749,933,317 | 854,004,671 | 749,933,317 | |||||||||||||
Mortgage fee income | 186,416,311 | 175,726,692 | 129,138,941 | |||||||||||||
Total revenues | $ 74,147,490 | $ 84,393,427 | $ 81,312,192 | $ 67,355,307 | 66,671,215 | $ 74,062,877 | $ 77,292,625 | $ 66,537,523 | 60,662,683 | $ 61,012,516 | $ 60,200,879 | $ 45,502,539 | 307,208,416 | 284,564,240 | 227,378,617 | |
Increase in future policy benefits | 21,476,432 | 17,212,001 | 18,060,151 | |||||||||||||
Commissions | 87,762,583 | 81,935,623 | 59,876,675 | |||||||||||||
Provision for loan loss reserve | 4,688,754 | 6,295,043 | 3,053,403 | |||||||||||||
Costs related to funding mortgage loans | 8,756,791 | 8,864,404 | 6,877,069 | |||||||||||||
Total benefits and expenses | 286,468,053 | 263,339,435 | 214,455,721 | |||||||||||||
Earnings before income taxes | 20,740,363 | 21,224,805 | 12,922,896 | |||||||||||||
Income tax expense | $ 233,548 | $ 2,190,206 | $ 2,456,885 | $ 1,580,220 | $ 426,823 | $ 2,346,210 | $ 2,867,957 | $ 2,104,958 | $ 1,864,368 | $ 961,140 | $ 1,870,803 | $ 202,352 | (6,460,859) | (7,745,948) | (4,898,663) | |
Net earnings | $ 14,279,504 | $ 13,478,857 | $ 8,024,233 | |||||||||||||
Net earnings per Class A Equivalent common share (1) | $ 0.12 | $ 0.32 | $ 0.35 | $ 0.18 | $ 0.10 | $ 0.28 | $ 0.32 | $ 0.24 | $ 0.20 | $ 0.12 | $ 0.22 | $ 0.03 | $ 0.96 | $ 0.93 | $ 0.58 | |
Net earnings per Class A equivalent common share - assuming dilution(1) | $ 0.12 | $ 0.31 | $ 0.34 | $ 0.17 | $ 0.10 | $ 0.26 | $ 0.31 | $ 0.23 | $ 0.19 | $ 0.12 | $ 0.22 | $ 0.03 | $ 0.94 | $ 0.90 | $ 0.56 | |
Net unrealized gains on derivative instruments | $ 6,490 | $ 10,628 | $ 16,433 | |||||||||||||
Other comprehensive income | 764,180 | (760,715) | (49,415) | |||||||||||||
Provision for deferred and other income taxes | 5,076,899 | 4,909,927 | 3,245,004 | |||||||||||||
Future life and other benefits | 18,143,832 | 15,232,634 | 14,084,894 | |||||||||||||
Receivables for mortgage loans sold | 20,216,621 | (47,752,055) | 7,362,353 | |||||||||||||
Other operating assets and liabilities | (8,473,503) | 4,890,770 | (135,279) | |||||||||||||
Net cash provided by (used in) operating activities | 43,860,446 | (15,831,248) | 31,015,809 | |||||||||||||
Net cash provided by financing activities | 10,664,656 | 9,656,561 | 6,364,003 | |||||||||||||
AdjustmentBMember | ||||||||||||||||
Loans held for sale | $ 96,166,551 | 106,648,741 | 96,166,551 | |||||||||||||
Receivables, net | (9,965,106) | (12,496,755) | (9,965,106) | |||||||||||||
Other assets | 4,338,404 | 3,521,926 | 4,338,404 | |||||||||||||
Total Assets | 90,539,849 | 97,673,912 | 90,539,849 | |||||||||||||
Future life, annuity, and other benefits | (1,388,134) | (1,542,371) | (1,388,134) | |||||||||||||
Bank and other loans payable | 90,096,699 | 98,422,131 | 90,096,699 | |||||||||||||
Income taxes | (4,639,170) | (3,585,425) | (4,639,170) | |||||||||||||
Total liabilities | 84,069,395 | 93,294,335 | 84,069,395 | |||||||||||||
Retained earnings | 6,470,454 | $ 6,597,870 | 4,379,577 | 6,470,454 | 6,597,870 | 6,405,271 | ||||||||||
Balance | 6,470,454 | 4,379,577 | 6,470,454 | |||||||||||||
Total Liabilities and Stockholders' Equity | 90,539,849 | 97,673,912 | 90,539,849 | |||||||||||||
Mortgage fee income | (2,873,515) | (4,209,408) | (2,331,468) | |||||||||||||
Total revenues | (2,873,515) | (4,209,408) | (2,331,468) | |||||||||||||
Increase in future policy benefits | (154,237) | (154,237) | (154,237) | |||||||||||||
Commissions | 871,911 | (1,035,005) | (502,133) | |||||||||||||
Provision for loan loss reserve | (2,988,754) | (2,845,940) | (2,053,403) | |||||||||||||
Costs related to funding mortgage loans | 434,697 | 37,107 | (425,750) | |||||||||||||
Total benefits and expenses | (1,836,383) | (3,998,075) | (3,135,523) | |||||||||||||
Earnings before income taxes | (1,037,132) | (211,333) | 804,055 | |||||||||||||
Income tax expense | (1,053,745) | 83,917 | (611,456) | |||||||||||||
Net earnings | $ (2,090,877) | $ (127,416) | $ 192,599 | |||||||||||||
Net earnings per Class A Equivalent common share (1) | $ (0.14) | $ (0.01) | $ 0.01 | |||||||||||||
Net earnings per Class A equivalent common share - assuming dilution(1) | $ (0.14) | $ (0.01) | $ 0.01 | |||||||||||||
Provision for deferred and other income taxes | $ 1,053,745 | $ (83,917) | $ 611,452 | |||||||||||||
Loans originated for sale | (3,098,710,299) | (2,861,404,239) | (2,044,909,613) | |||||||||||||
Proceeds from loans sold | 3,246,127,714 | 2,933,300,742 | 2,102,740,825 | |||||||||||||
Net gains on loans sold | (137,682,984) | (131,130,447) | (93,144,155) | |||||||||||||
Future life and other benefits | (154,237) | (154,237) | (154,237) | |||||||||||||
Receivables for mortgage loans sold | (20,216,621) | 47,752,055 | (7,362,353) | |||||||||||||
Other operating assets and liabilities | 3,348,127 | (434,680) | (1,453,885) | |||||||||||||
Net cash provided by (used in) operating activities | (8,325,432) | (12,282,139) | (43,479,367) | |||||||||||||
Net change in warehouse line borrowings | 8,325,432 | 12,282,139 | 43,479,367 | |||||||||||||
Net cash provided by financing activities | 8,325,432 | 12,282,139 | 43,479,367 | |||||||||||||
Restatement Adjustment | ||||||||||||||||
Loans held for sale | 211,453,006 | 189,139,832 | 211,453,006 | |||||||||||||
Receivables, net | 6,060,994 | 6,373,364 | 6,060,994 | |||||||||||||
Other assets | 11,439,273 | 10,413,394 | 11,439,273 | |||||||||||||
Total Assets | 840,473,166 | 951,678,583 | 840,473,166 | |||||||||||||
Future life, annuity, and other benefits | 515,789,254 | 584,067,692 | 515,789,254 | |||||||||||||
Bank and other loans payable | 131,005,614 | 152,140,679 | 131,005,614 | |||||||||||||
Income taxes | 20,412,889 | 24,318,869 | 20,412,889 | |||||||||||||
Total liabilities | 722,756,487 | 819,119,452 | 722,756,487 | |||||||||||||
Accumulated other comprehensive income, net of taxes | (499,358) | 261,357 | 264,822 | (499,358) | 261,357 | 310,772 | ||||||||||
Retained earnings | 60,525,404 | 51,876,331 | 67,409,204 | 60,525,404 | 51,876,331 | $ 46,979,482 | ||||||||||
Balance | 117,716,679 | 132,559,131 | 117,716,679 | |||||||||||||
Total Liabilities and Stockholders' Equity | 840,473,166 | 951,678,583 | 840,473,166 | |||||||||||||
Mortgage fee income | 183,542,796 | 171,517,284 | 126,807,473 | |||||||||||||
Total revenues | $ 71,842,669 | $ 82,948,657 | $ 80,087,227 | $ 69,456,348 | 64,357,046 | $ 74,985,622 | $ 75,187,618 | $ 65,824,546 | 60,279,687 | $ 60,515,415 | $ 58,408,816 | $ 45,843,231 | 304,334,901 | 280,354,832 | 225,047,149 | |
Increase in future policy benefits | 21,322,195 | 17,057,764 | 17,905,914 | |||||||||||||
Commissions | 88,634,494 | 80,900,618 | 59,374,542 | |||||||||||||
Provision for loan loss reserve | 1,700,000 | 3,449,103 | 1,000,000 | |||||||||||||
Costs related to funding mortgage loans | 9,191,488 | 8,901,511 | 6,451,319 | |||||||||||||
Total benefits and expenses | 284,631,670 | 259,341,360 | 211,320,198 | |||||||||||||
Earnings before income taxes | 19,703,231 | 21,013,472 | 13,726,951 | |||||||||||||
Income tax expense | $ 622,061 | $ 2,390,525 | $ 2,968,879 | $ 1,533,139 | $ 954,297 | $ 2,554,134 | $ 2,454,812 | $ 1,698,788 | $ 3,025,284 | $ 919,546 | $ 1,685,203 | $ (119,914) | (7,514,604) | (7,662,031) | (5,510,119) | |
Net earnings | $ 12,188,627 | $ 13,351,441 | $ 8,216,832 | |||||||||||||
Net earnings per Class A Equivalent common share (1) | $ 0.03 | $ 0.28 | $ 0.34 | $ 0.17 | $ 0.16 | $ 0.30 | $ 0.27 | $ 0.19 | $ 0.28 | $ 0.12 | $ 0.20 | $ (0.01) | $ 0.82 | $ 0.92 | $ 0.59 | |
Net earnings per Class A equivalent common share - assuming dilution(1) | $ 0.03 | $ 0.27 | $ 0.33 | $ 0.17 | $ 0.15 | $ 0.29 | $ 0.26 | $ 0.18 | $ 0.27 | $ 0.11 | $ 0.20 | $ (0.01) | $ 0.81 | $ 0.89 | $ 0.57 | |
Net unrealized gains on derivative instruments | $ 6,490 | $ 10,628 | $ 16,433 | |||||||||||||
Other comprehensive income | 764,180 | (760,715) | (49,415) | |||||||||||||
Provision for deferred and other income taxes | 6,130,644 | 4,826,010 | 3,856,456 | |||||||||||||
Loans originated for sale | (3,098,710,299) | (2,861,404,239) | (2,044,909,613) | |||||||||||||
Proceeds from loans sold | 3,246,127,714 | 2,933,300,742 | 2,102,740,825 | |||||||||||||
Net gains on loans sold | (137,682,984) | (131,130,447) | (93,144,155) | |||||||||||||
Future life and other benefits | 17,989,595 | 15,078,397 | 13,930,657 | |||||||||||||
Other operating assets and liabilities | (5,125,376) | 4,456,090 | (1,589,164) | |||||||||||||
Net cash provided by (used in) operating activities | 35,535,014 | (28,113,387) | (12,463,558) | |||||||||||||
Net change in warehouse line borrowings | 8,325,432 | 12,282,139 | 43,479,367 | |||||||||||||
Net cash provided by financing activities | $ 18,990,088 | $ 21,938,700 | $ 49,843,370 |
Note 22: Impact of Restatement Adjustments on Quarterly Financial Statements (unaudited): Schedule of Quarterly Financial Information (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2014 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Total revenues | $ 304,334,901 | $ 280,354,832 | $ 225,047,149 | ||||||||||||
Benefits and Expenses | 284,631,670 | 259,341,360 | 211,320,198 | ||||||||||||
Income tax expense | $ (7,514,604) | $ (7,662,031) | $ (5,510,119) | ||||||||||||
Net earnings per Class A Equivalent common share (1) | $ 0.82 | $ 0.92 | $ 0.59 | ||||||||||||
Net earnings per Class A equivalent common share - assuming dilution(1) | $ 0.81 | $ 0.89 | $ 0.57 | ||||||||||||
Scenario, Previously Reported | |||||||||||||||
Total revenues | $ 74,147,490 | $ 84,393,427 | $ 81,312,192 | $ 67,355,307 | $ 66,671,215 | $ 74,062,877 | $ 77,292,625 | $ 66,537,523 | $ 60,662,683 | $ 61,012,516 | $ 60,200,879 | $ 45,502,539 | $ 307,208,416 | $ 284,564,240 | $ 227,378,617 |
Benefits and Expenses | 72,117,972 | 77,427,792 | 73,758,739 | 63,163,550 | 64,779,238 | 67,700,286 | 69,808,663 | 61,051,248 | 55,995,147 | 58,348,652 | 55,224,633 | 44,887,289 | |||
Earnings (loss) before income taxes | 2,029,518 | 6,965,635 | 7,553,453 | 4,191,757 | 1,891,977 | 6,362,591 | 7,483,962 | 5,486,275 | 4,667,536 | 2,663,864 | 4,976,246 | 615,250 | |||
Income tax expense | (233,548) | (2,190,206) | (2,456,885) | (1,580,220) | (426,823) | (2,346,210) | (2,867,957) | (2,104,958) | (1,864,368) | (961,140) | (1,870,803) | (202,352) | $ 6,460,859 | $ 7,745,948 | $ 4,898,663 |
Net Earnings | $ 1,795,970 | $ 4,775,429 | $ 5,096,568 | $ 2,611,537 | $ 1,465,154 | $ 4,016,381 | $ 4,616,005 | $ 3,381,317 | $ 2,803,168 | $ 1,702,724 | $ 3,105,443 | $ 412,898 | |||
Net earnings per Class A Equivalent common share (1) | $ 0.12 | $ 0.32 | $ 0.35 | $ 0.18 | $ 0.10 | $ 0.28 | $ 0.32 | $ 0.24 | $ 0.20 | $ 0.12 | $ 0.22 | $ 0.03 | $ 0.96 | $ 0.93 | $ 0.58 |
Net earnings per Class A equivalent common share - assuming dilution(1) | $ 0.12 | $ 0.31 | $ 0.34 | $ 0.17 | $ 0.10 | $ 0.26 | $ 0.31 | $ 0.23 | $ 0.19 | $ 0.12 | $ 0.22 | $ 0.03 | $ 0.94 | $ 0.90 | $ 0.56 |
Restatement Adjustment | |||||||||||||||
Total revenues | $ 71,842,669 | $ 82,948,657 | $ 80,087,227 | $ 69,456,348 | $ 64,357,046 | $ 74,985,622 | $ 75,187,618 | $ 65,824,546 | $ 60,279,687 | $ 60,515,415 | $ 58,408,816 | $ 45,843,231 | $ 304,334,901 | $ 280,354,832 | $ 225,047,149 |
Benefits and Expenses | 70,769,933 | 76,375,127 | 72,101,342 | 65,385,268 | 61,107,208 | 68,073,150 | 68,772,252 | 61,388,750 | 53,378,211 | 57,958,096 | 53,921,094 | 46,062,797 | |||
Earnings (loss) before income taxes | 1,072,736 | 6,573,530 | 7,985,885 | 4,071,080 | 3,249,838 | 6,912,472 | 6,415,366 | 4,435,796 | 6,901,476 | 2,557,319 | 4,487,722 | (219,566) | |||
Income tax expense | (622,061) | (2,390,525) | (2,968,879) | (1,533,139) | (954,297) | (2,554,134) | (2,454,812) | (1,698,788) | (3,025,284) | (919,546) | (1,685,203) | 119,914 | $ 7,514,604 | $ 7,662,031 | $ 5,510,119 |
Net Earnings | $ 450,675 | $ 4,183,005 | $ 5,017,006 | $ 2,537,941 | $ 2,295,541 | $ 4,358,338 | $ 3,960,554 | $ 2,737,008 | $ 3,876,192 | $ 1,637,773 | $ 2,802,519 | $ (99,652) | |||
Net earnings per Class A Equivalent common share (1) | $ 0.03 | $ 0.28 | $ 0.34 | $ 0.17 | $ 0.16 | $ 0.30 | $ 0.27 | $ 0.19 | $ 0.28 | $ 0.12 | $ 0.20 | $ (0.01) | $ 0.82 | $ 0.92 | $ 0.59 |
Net earnings per Class A equivalent common share - assuming dilution(1) | $ 0.03 | $ 0.27 | $ 0.33 | $ 0.17 | $ 0.15 | $ 0.29 | $ 0.26 | $ 0.18 | $ 0.27 | $ 0.11 | $ 0.20 | $ (0.01) | $ 0.81 | $ 0.89 | $ 0.57 |
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