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2) Investments

12 Months Ended

Dec. 31, 2017

The Company’s investments as of December 31, 2017 are summarized as follows:

	Amortized Cost	Gross Unrealized Gains	Gross Unrealized Losses	Estimated Fair Value
December 31, 2017:
Fixed maturity securities held to maturity carried at amortized cost:
U.S. Treasury securities and obligations of U.S. Government agencies	$ 54,077,069	$ 211,824	$ (579,423)	$ 53,709,470

Obligations of states and political subdivisions	5,843,176	112,372	(71,013)	5,884,535

Corporate securities including public utilities	158,350,727	14,336,452	(1,007,504)	171,679,675

Mortgage-backed securities	9,503,016	210,652	(162,131)	9,551,537

Redeemable preferred stock	623,635	49,748	(191)	673,192

Total fixed maturity securities held to maturity	$ 228,397,623	$ 14,921,048	$ (1,820,262)	$ 241,498,409

Equity securities available for sale at estimated fair value:

Common stock:

Industrial, miscellaneous and all other	$ 6,002,931	$ 667,593	$ (632,669)	$ 6,037,855

Total securities available for sale	$ 6,002,931	$ 667,593	$ (632,669)	$ 6,037,855

Mortgage loans held for investment at amortized cost:
Residential	$ 102,527,111
Residential construction	50,157,533
Commercial	54,954,865
Less: Unamortized deferred loan fees, net	(1,659,828)
Less: Allowance for loan losses	(1,768,796)

Total mortgage loans held for investment	$ 204,210,885

Real estate held for investment - net of accumulated depreciation:
Residential	$ 68,329,917
Commercial	72,968,789

Total real estate held for investment	$ 141,298,706

Other investments and policy loans at amortized cost:
Policy loans	$ 6,531,352
Insurance assignments	36,301,739
Federal Home Loan Bank stock	689,400
Other investments	3,219,622
Less: Allowance for doubtful accounts	(846,641)

Total policy loans and other investments	$ 45,895,472

Accrued investment income	$ 3,644,077

Total investments	$ 629,484,618

The Company’s investments as of December 31, 2016 are summarized as follows:

	Amortized Cost	Gross Unrealized Gains	Gross Unrealized Losses	Estimated Fair Value
December 31, 2016:
Fixed maturity securities held to maturity carried at amortized cost:
U.S. Treasury securities and obligations of U.S. Government agencies	$ 4,475,065	$ 249,028	$ (66,111)	$ 4,657,982

Obligations of states and political subdivisions	6,017,225	153,514	(133,249)	6,037,490

Corporate securities including public utilities	164,375,636	10,440,989	(3,727,013)	171,089,612

Mortgage-backed securities	9,488,083	221,400	(280,871)	9,428,612

Redeemable preferred stock	623,635	13,418	-	637,053

Total fixed maturity securities held to maturity	$ 184,979,644	$ 11,078,349	$ (4,207,244)	$ 191,850,749

Equity securities available for sale at estimated fair value:

Common stock:

Industrial, miscellaneous and all other	$ 10,323,238	$ 447,110	$ (859,092)	$ 9,911,256

Total securities available for sale	$ 10,323,238	$ 447,110	$ (859,092)	$ 9,911,256

Mortgage loans held for investment at amortized cost:
Residential	$ 58,593,622
Residential construction	40,800,117
Commercial	51,536,622
Less: Unamortized deferred loan fees, net	(190,846)
Less: Allowance for loan losses	(1,748,783)

Total mortgage loans held for investment	$ 148,990,732

Real estate held for investment - net of accumulated depreciation:
Residential	$ 76,191,985
Commercial	68,973,936

Total real estate held for investment	$ 145,165,921

Other investments and policy loans at amortized cost:
Policy loans	$ 6,694,148
Insurance assignments	33,548,079
Promissory notes	48,797
Federal Home Loan Bank stock	662,100
Other investments	1,765,752
Less: Allowance for doubtful accounts	(1,119,630)

Total policy loans and other investments	$ 41,599,246

Short-term investments at amortized cost	$ 27,560,040

Accrued investment income	$ 2,972,596

Total investments	$ 561,179,435

Fixed Maturity Securities

The following tables summarize unrealized losses on fixed maturities securities, which are carried at amortized cost, at December 31, 2017 and 2016. The unrealized losses were primarily related to interest rate fluctuations. The tables set forth unrealized losses by duration with the fair value of the related fixed maturity securities:

	Unrealized Losses for Less than Twelve Months	Fair Value	Unrealized Losses for More than Twelve Months	Fair Value	Total Unrealized Loss	Fair Value
At December 31, 2017
U.S. Treasury Securities and Obligations
of U.S. Government Agencies	$ 532,010	$ 51,606,699	$ 47,413	$ 643,380	$ 579,423	$ 52,250,079
Obligations of States and
Political Subdivisions	296	214,882	70,717	2,225,021	71,013	2,439,903
Corporate Securities	167,786	11,551,865	839,718	13,193,258	1,007,504	24,745,123
Mortgage and other
asset-backed securities	56,756	2,516,660	105,375	1,676,494	162,131	4,193,154
Redeemable preferred stock	191	11,421	-	-	191	11,421
Total unrealized losses	$ 757,039	$ 65,901,527	$ 1,063,223	$ 17,738,153	$ 1,820,262	$ 83,639,680

		Fair Value		Fair Value	Total Unrealized Loss	Fair Value
At December 31, 2016
U.S. Treasury Securities and Obligations
of U.S. Government Agencies	$ 66,111	$ 1,342,088	$ -	$ -	$ 66,111	$ 1,342,088
Obligations of States and
Political Subdivisions	133,249	3,686,856	-	-	133,249	3,686,856
Corporate Securities	1,728,312	41,796,016	1,998,701	12,969,135	3,727,013	54,765,151
Mortgage and other
asset-backed securities	176,715	4,176,089	104,156	940,278	280,871	5,116,367
Total unrealized losses	$ 2,104,387	$ 51,001,049	$ 2,102,857	$ 13,909,413	$ 4,207,244	$ 64,910,462

There were 141 securities with fair value of 97.9% of amortized cost at December 31, 2017. There were 250 securities with fair value of 93.9% of amortized cost at December 31, 2016. During the years ended December 31, 2017 and 2016, an other than temporary decline in fair value resulted in the recognition of credit losses on fixed maturity securities of $493,371 and $100,000, respectively.

On a quarterly basis, the Company evaluates its fixed maturity securities held to maturity. This evaluation includes a review of current ratings by the National Association of Insurance Commissions (“NAIC”). Securities with a rating of 1 or 2 are considered investment grade and are not reviewed for impairment. Securities with ratings of 3 to 5 are evaluated for impairment. Securities with a rating of 6 are automatically determined to be impaired and are written down. The evaluation involves an analysis of the securities in relation to historical values, interest payment history, projected earnings and revenue growth rates as well as a review of the reason for a downgrade in the NAIC rating. Based on the analysis of a security that is rated 3 to 5, a determination is made whether the security will likely make interest and principal payments in accordance with the terms of the financial instrument. If it is unlikely that the security will meet contractual obligations, the loss is considered to be other than temporary, the security is written down to the new anticipated market value and an impairment loss is recognized. Impairment losses are treated as credit losses as the Company holds fixed maturity securities to maturity unless the underlying conditions have changed in the financial instrument to require an impairment.

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

The amortized cost and estimated fair value of fixed maturity securities at December 31, 2017, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because certain borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized	Estimated Fair
	Cost	Value
Held to Maturity:
Due in 1 year	$ 20,125,883	$ 20,299,016
Due in 2-5 years	69,849,085	70,873,975
Due in 5-10 years	49,842,819	52,444,399
Due in more than 10 years	78,453,185	87,656,290
Mortgage-backed securities	9,503,016	9,551,537
Redeemable preferred stock	623,635	673,192
Total held to maturity	$ 228,397,623	$ 241,498,409

The Company is a member of the Federal Home Loan Bank of Des Moines (“FHLB”). In June through August of 2017, the Company purchased a total of $50,000,000, par value, of United States Treasury fixed maturity securities that it deposited with the FHLB. These securities will generate interest income for the Company and will be available to use as collateral on any cash borrowings from the FHLB. As of December 31, 2017, the Company did not have any outstanding amounts owed to FHLB and the estimated maximum borrowing capacity was $47,252,871.

Equity Securities

The following tables summarize unrealized losses on equity securities that were carried at estimated fair value based on quoted trading prices at December 31, 2017 and 2016. The unrealized losses were primarily the result of decreases in fair value in the retail, industrial and energy sectors. The tables set forth unrealized losses by duration and number of investment positions, together with the fair value of the related equity securities available for sale in a loss position:

	Unrealized Losses for Less than Twelve Months	No. of Investment Positions	Unrealized Losses for More than Twelve Months	No. of Investment Positions	Total Unrealized Losses
At December 31, 2017
Industrial, miscellaneous and all other	$ 213,097	98	$ 419,572	81	$ 632,669
Total unrealized losses	$ 213,097	98	$ 419,572	81	$ 632,669
Fair Value	$ 847,718		$ 1,329,213		$ 2,176,931

At December 31, 2016
Industrial, miscellaneous and all other	$ 215,563	124	$ 643,529	104	$ 859,092
Total unrealized losses	$ 215,563	124	$ 643,529	104	$ 859,092
Fair Value	$ 2,063,144		$ 1,685,874		$ 3,749,018

The average market value of the equity securities available for sale was 77.5% and 81.4% of the original investment as of December 31, 2017 and 2016, respectively. The intent of the Company is to retain equity securities for a period of time sufficient to allow for the recovery in fair value. However, the Company may sell equity securities during a period in which the fair value has declined below the amount of the original investment. In certain situations, new factors, including changes in the business environment, can change the Company’s previous intent to continue holding a security. During the years ended December 31, 2017 and 2016, an other than temporary decline in the market value resulted in the recognition of an impairment loss on equity securities of $280,968 and $170,358, respectively.

On a quarterly basis, the Company reviews its investment in equity securities that are in a loss position. The first step is to identify securities by lots which are currently carried on the books at a value greater than the 52-week high. These securities are further evaluated by reviewing current market value in relation to historical value, price earnings ratios, projected earnings, revenue growth rates, negative company related events, market sector comparisons and analyst reports to determine if a security has a reasonable expectation to return to the current cost basis. Based on the analysis, a determination is made whether a security will likely recover from the loss position within a reasonable period of time. If it is unlikely that the security will recover from the loss position, the loss is considered to be other than temporary, the security is written down to a restated value and an impairment loss is recognized.

The fair values for equity securities are based on quoted market prices.

There were no investments, aggregated by issuer, in excess of 10% of shareholders’ equity (before net unrealized gains and losses on equity securities available for sale) at December 31, 2017, other than investments issued or guaranteed by the United States Government.

The Company’s net realized gains and losses from sales, calls, and maturities, and other than temporary impairments from investments and other assets for the years ended December 31 are summarized as follows:

	2017	2016
Fixed maturity securities held
to maturity:
Gross realized gains	$ 179,182	$ 389,558
Gross realized losses	(893,567)	(132,124)
Other than temporary impairments	(493,371)	(100,000)

Equity securities available for sale:
Gross realized gains	166,950	221,817
Gross realized losses	(76,475)	(61,242)
Other than temporary impairments	(280,968)	(170,358)

Other assets:
Gross realized gains	3,410,076	349,252
Gross realized losses	(5,734,648)	(943,648)
Total	$ (3,722,821)	$ (446,745)

The net realized gains and losses on the sale of securities are recorded on the trade date, and the cost of the securities sold is determined using the specific identification method.

The carrying amount for disposals of securities classified as held to maturity was $2,932,961 and $2,380,027, for the years ended December 31, 2017 and 2016, respectively. The net realized loss and gain related to these disposals was $463,892 and $155,346, for the years ended December 31, 2017 and 2016, respectively. Although the intent is to buy and hold a bond to maturity, the Company will sell a bond prior to maturity if conditions have changed within the entity that issued the bond to increase the risk of default to an unacceptable level.

Major categories of net investment income for the years ended December 31, are as follows:

	2017	2016
Fixed maturity securities held to maturity	$ 10,626,400	$ 9,083,858
Equity securities available for sale	245,490	270,942
Mortgage loans held for investment	12,498,578	11,398,986
Real estate held for investment	11,703,947	10,969,828
Policy loans	488,561	498,444
Insurance assignments	13,289,818	11,876,836
Other investments	105,218	25,122
Short-term investments	543,528	268,988
Gross investment income	49,501,540	44,393,004
Investment expenses	(14,438,572)	(12,414,403)
Net investment income	$ 35,062,968	$ 31,978,601

Net investment income includes net investment income earned by the restricted assets of the cemeteries and mortuaries of $501,227 and $419,360 for the years ended December 31, 2017 and 2016, respectively.

Net investment income on real estate consists primarily of rental revenue received under short-term leases.

Investment expenses consist primarily of depreciation, property taxes, operating expenses of real estate and an estimated portion of administrative expenses relating to investment activities.

Securities on deposit for regulatory authorities as required by law amounted to $9,264,977 and $9,269,121 at December 31, 2017 and 2016, respectively. The restricted securities are included in various assets under investments on the accompanying consolidated balance sheets.

Real Estate Held for Investment

The Company continues to strategically deploy resources into real estate to match the income and yield durations of its primary obligations. The sources for these real estate assets come through its various business segments in the form of acquisition, development and mortgage foreclosures. The Company reports real estate held for investment pursuant to the accounting policy discussed in Note 1 of the Notes to Consolidated Financial Statements.

Commercial Real Estate Held for Investment

The Company owns and manages commercial real estate assets as a means of generating investment income. These assets are acquired in accordance with the Company’s goals and objectives for risk-adjusted returns. Due diligence is conducted on each asset using internal and third-party reports. Geographic locations and asset classes of the investment activity is determined by senior management under the direction of the Board of Directors.

The Company employs full-time employees to attend to the day-to-day operations of those assets within the greater Salt Lake area and close surrounding markets. The Company utilizes third-party property managers when the geographic boundary does not warrant full-time staff or through strategic lease-up periods. The Company generally looks to acquire assets in regions that are high growth regions for employment and population and in assets that provide operational efficiencies.

The Company currently owns and operates 12 commercial properties in 8 states. These properties include industrial warehouses, office buildings, retail centers, undeveloped land and includes the redevelopment and expansion of its corporate campus in Salt Lake City, Utah. The Company does use debt in strategic cases to leverage established yields or to acquire a higher quality or different class of asset.

The aggregated net ending balance of commercial real estate that serves as collateral for bank borrowings was approximately $64,704,000 and $51,507,000 as of December 31, 2017 and 2016, respectively. The associated bank loan carrying values totaled approximately $40,994,000 and $21,831,000 as of December 31, 2017 and 2016, respectively.

During the years ended December 31, 2017 and 2016, the Company recorded impairment losses on commercial real estate held for investment of $5,350,967 and $900,000, respectively. These impairment losses are included in realized gains (losses) on investment and other assets on the consolidated statements of earnings.

The Company’s investment in commercial real estate for the years ended December 31, are summarized as follows:

	Net Ending Balance				Total Square Footage
	2017		2016		2017	2016
Arizona	$ 4,000	(1)	$ 450,538	(1)	-	16,270
Arkansas	96,169		100,369		3,200	3,200
Kansas	7,200,000		12,450,297		222,679	222,679
Louisiana	493,197		518,700		7,063	7,063
Mississippi	3,725,039		3,818,985		33,821	33,821
New Mexico	7,000	(1)	7,000	(1)	-	-
Texas	335,000		3,734,974		23,470	23,470
Utah	61,108,384	(2)	47,893,073		433,244	433,244

	$ 72,968,789		$ 68,973,936		723,477	739,747

(1) Includes Vacant Land
(2) Includes 53rd Center completed in July 2017

Residential Real Estate Held for Investment

The Company owns a portfolio of residential homes primarily as a result of loan foreclosures. The strategy has been to lease these homes to produce cash flow, and allow time for the economic fundamentals to return to the various markets. As an orderly and active market for these homes returns, the Company has the option to dispose or to continue and hold them for cash flow and acceptable returns.

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

As of December 31, 2017, SNRE manages 105 residential properties in 9 states across the United States which includes a newly constructed apartment complex, Dry Creek at East Village (“Dry Creek”), in Sandy Utah. See Note 25 regarding the disposition of Dry Creek.

The net ending balance of residential real estate that serves as collateral for a bank borrowing was approximately $34,431,000 and $35,798,000, as of December 31, 2017 and 2016, respectively. The associated bank loan carrying value was approximately $26,773,000 and $27,377,000 as of December 31, 2017 and 2016, respectively.

The net ending balance of foreclosed residential real estate included in residential real estate held for investment is $33,372,228 and $39,856,434 as of December 31, 2017 and 2016, respectively.

The Company’s investment in residential real estate for the years ended December 31, are summarized as follows:

	Net Ending Balance
	2017	2016
Arizona	$ 217,105	$ 742,259
California	5,463,878	5,848,389
Colorado	-	364,489
Florida	7,000,684	8,327,355
Hawaii	712,286	-
Ohio	10,000	-
Oklahoma	17,500	46,658
Texas	509,011	1,091,188
Utah	54,113,272	59,485,466
Washington	286,181	286,181
	$ 68,329,917	$ 76,191,985

Real Estate Owned and Occupied by the Company

The primary business units of the Company occupy a portion of the real estate owned by the Company. Currently, the Company occupies nearly 70,000 square feet, or 10% of the overall commercial real estate holdings.

As of December 31, 2017, real estate owned and occupied by the company is summarized as follows:

Location	Business Segment	Approximate Square Footage	Square Footage Occupied by the Company
5300 South 360 West, Salt Lake City, UT (1)	Corporate Offices, Life Insurance and Cemetery/Mortuary Operations	36,000	100%
5201 Green Street, Salt Lake City, UT	Mortgage Operations	36,899	34%
1044 River Oaks Dr., Flowood, MS	Life Insurance Operations	21,521	27%
121 West Election Road, Draper, UT	Mortgage Sales	78,978	19%

(1) This asset is included in property and equipment on the consolidated balance sheets

Mortgage Loans Held for Investment

The Company reports mortgage loans held for investment pursuant to the accounting policy discussed in Note 1 of the Notes to Consolidated Financial Statements.

Mortgage loans consist of first and second mortgages. The mortgage loans bear interest at rates ranging from 2.0 % to 10.5%, maturity dates range from three months to 30 years and are secured by real estate. Concentrations of credit risk arise when a number of mortgage loan debtors have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions. Although the Company has a diversified mortgage loan portfolio consisting of residential mortgages, commercial loans and residential construction loans and requires collateral on all real estate exposures, a substantial portion of its debtors’ ability to honor obligations is reliant on the economic stability of the geographic region in which the debtors do business. At December 31, 2017, the Company has 42%, 27%, 12%, 14% and 5% of its mortgage loans from borrowers located in the states of Utah, California, Florida, Texas and Nevada, respectively. The mortgage loan balances on the consolidated balance sheet are reflected net of an allowance for loan losses of $1,768,796 and $1,748,783 at December 31, 2017 and 2016, respectively.

The Company establishes a valuation allowance for credit losses in its portfolio. The following is a summary of the allowance for loan losses as a contra-asset account for the periods presented:

Allowance for Credit Losses and Recorded Investment in Mortgage Loans Held for Investment
Years Ended December 31

	Commercial	Residential	Residential Construction	Total
2017
Allowance for credit losses:
Beginning balance	$ 187,129	$ 1,461,540	$ 100,114	$ 1,748,783
Charge-offs	-	(351,357)	(64,894)	(416,251)
Provision	-	436,264	-	436,264
Ending balance	$ 187,129	$ 1,546,447	$ 35,220	$ 1,768,796

Ending balance: individually evaluated for impairment	$ -	$ 237,560	$ -	$ 237,560

Ending balance: collectively evaluated for impairment	$ 187,129	$ 1,308,887	$ 35,220	$ 1,531,236

Mortgage loans:
Ending balance	$ 54,954,865	$ 102,527,111	$ 50,157,533	$ 207,639,509

Ending balance: individually evaluated for impairment	$ -	$ 4,923,552	$ 461,834	$ 5,385,386

Ending balance: collectively evaluated for impairment	$ 54,954,865	$ 97,603,559	$ 49,695,699	$ 202,254,123

2016
Allowance for credit losses:
Beginning balance	$ 187,129	$ 1,560,877	$ 100,114	$ 1,848,120
Charge-offs	-	(420,135)	-	(420,135)
Provision	-	320,798	-	320,798
Ending balance	$ 187,129	$ 1,461,540	$ 100,114	$ 1,748,783

Ending balance: individually evaluated for impairment	$ -	$ 187,470	$ -	$ 187,470

Ending balance: collectively evaluated for impairment	$ 187,129	$ 1,274,070	$ 100,114	$ 1,561,313

Mortgage loans:
Ending balance	$ 51,536,622	$ 58,593,622	$ 40,800,117	$ 150,930,361

Ending balance: individually evaluated for impairment	$ 202,992	$ 2,916,538	$ 64,895	$ 3,184,425

Ending balance: collectively evaluated for impairment	$ 51,333,630	$ 55,677,084	$ 40,735,222	$ 147,745,936

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

Age Analysis of Past Due Mortgage Loans Held for Investment
Years Ended December 31

	30-59 Days Past Due	60-89 Days Past Due	Greater Than 90 Days 1)	In Process of Foreclosure 1)	Total Past Due	Current	Total Mortgage Loans	Allowance for Loan Losses	Unamortized deferred loan fees, net	Net Mortgage Loans
2017
Commercial	$ 1,943,495	$ -	$ -	$ -	$ 1,943,495	$ 53,011,370	$ 54,954,865	$ (187,129)	$ (67,411)	$ 54,700,325
Residential	6,613,479	495,347	3,591,333	1,332,219	12,032,378	90,494,733	102,527,111	(1,546,447)	(1,164,130)	99,816,534
Residential Construction	-	-	461,834	-	461,834	49,695,699	50,157,533	(35,220)	(428,287)	49,694,026

Total	$ 8,556,974	$ 495,347	$ 4,053,167	$ 1,332,219	$ 14,437,707	$ 193,201,802	$ 207,639,509	$ (1,768,796)	$ (1,659,828)	$ 204,210,885

2016
Commercial	$ -	$ -	$ -	$ 202,992	$ 202,992	$ 51,333,630	$ 51,536,622	$ (187,129)	$ (155,725)	$ 51,193,768
Residential	964,960	996,779	1,290,355	1,626,183	4,878,277	53,715,345	58,593,622	(1,461,540)	(35,121)	57,096,961
Residential Construction	-	-	64,895	-	64,895	40,735,222	40,800,117	(100,114)	-	40,700,003

Total	$ 964,960	$ 996,779	$ 1,355,250	$ 1,829,175	$ 5,146,164	$ 145,784,197	$ 150,930,361	$ (1,748,783)	$ (190,846)	$ 148,990,732

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

Impaired Mortgage Loans Held for Investment

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

Impaired Loans
Years Ended December 31
	Recorded Investment	Unpaid Principal Balance	Related Allowance	Average Recorded Investment	Interest Income Recognized
2017
With no related allowance recorded:
Commercial	$ -	$ -	$ -	$ 365,220	$ -
Residential	3,322,552	3,322,552	-	3,290,094	-
Residential construction	461,834	461,834	-	277,232	-

With an allowance recorded:
Commercial	$ -	$ -	$ -	$ -	$ -
Residential	1,601,000	1,601,000	237,560	1,350,115	-
Residential construction	-	-	-	-	-

Total:
Commercial	$ -	$ -	$ -	$ 365,220	$ -
Residential	4,923,552	4,923,552	237,560	4,640,209	-
Residential construction	461,834	461,834	-	277,232	-

2016
With no related allowance recorded:
Commercial	$ 202,992	$ 202,992	$ -	$ 202,992	$ -
Residential	-	-	-	-	-
Residential construction	64,895	64,895	-	79,082	-

With an allowance recorded:
Commercial	$ -	$ -	$ -	$ -	$ -
Residential	2,916,538	2,916,538	374,501	3,001,850	-
Residential construction	-	-	-	-	-

Total:
Commercial	$ 202,992	$ 202,992	$ -	$ 202,992	$ -
Residential	2,916,538	2,916,538	374,501	3,001,850	-
Residential construction	64,895	64,895	-	79,082	-

Credit Risk Profile Based on Performance Status

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

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

Mortgage Loans Held for Investment Credit Exposure
Credit Risk Profile Based on Payment Activity
Years Ended December 31

	Commercial		Residential		Residential Construction		Total
	2017	2016	2017	2016	2017	2016	2017	2016

Performing	$ 54,954,865	$ 51,333,630	$ 97,603,559	$ 55,677,084	$ 49,695,699	$ 40,735,222	$ 202,254,123	$ 147,745,936
Non-performing	-	202,992	4,923,552	2,916,538	461,834	64,895	5,385,386	3,184,425

Total	$ 54,954,865	$ 51,536,622	$ 102,527,111	$ 58,593,622	$ 50,157,533	$ 40,800,117	$ 207,639,509	$ 150,930,361

Non-Accrual Mortgage Loans Held for Investment

Once a loan is past due 90 days, it is the policy of the Company to end the accrual of interest income on the loan and write off any income that had been accrued. Payments received for loans on a non-accrual status are recognized on a cash basis. Interest income recognized from any payments received for loans on a non-accrual status was immaterial. Accrual of interest resumes if a loan is brought current. Interest not accrued on these loans totals $204,083 and $172,000 as of December 31, 2017 and 2016, respectively.

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

	Mortgage Loans on Non-accrual Status
	Years Ended December 31
	2017	2016
Commercial	$ -	$ 202,992
Residential	4,923,552	2,916,538
Residential construction	461,834	64,895
Total	$ 5,385,386	$ 3,184,425

Principal Amounts Due

The amortized cost and contractual payments on mortgage loans held for investment by category as of December 31, 2017 are shown below. Expected principal payments may differ from contractual obligations because certain borrowers may elect to pay off mortgage obligations with or without early payment penalties.

		Principal	Principal	Principal
		Amounts	Amounts	Amounts
		Due in	Due in	Due
	Total	1 Year	2-5 Years	Thereafter
Residential	$ 102,527,111	$ 5,454,776	$ 40,995,574	$ 56,076,761
Residential Construction	50,157,533	42,763,420	7,394,113	-
Commercial	54,954,865	36,690,847	15,674,563	2,589,455
Total	$ 207,639,509	$ 84,909,043	$ 64,064,250	$ 58,666,216