15) Business Segment Information

12 Months Ended

Dec. 31, 2019

Notes

15) Business Segment Information

15)Business Segment Information  

Description of Products and Services by Segment

The Company has three reportable business segments: life insurance, cemetery and mortuary, and mortgage. The Company’s life insurance segment consists of life insurance premiums and operating expenses from the sale of insurance products sold by the Company’s independent agency force and net investment income derived from investing policyholder and segment surplus funds. The Company’s cemetery and mortuary segment consists of revenues and operating expenses from the sale of at-need cemetery and mortuary merchandise and services at its mortuaries and cemeteries, pre-need sales of cemetery spaces after collection of 10% or more of the purchase price and the net investment income from investing segment surplus funds. The Company’s mortgage segment consists of fee income and expenses from the originations of residential mortgage loans and interest earned and interest expenses from warehousing pre-sold loans before the funds are received from financial institutional investors.

Measurement of Segment Profit or Loss and Segment Assets

The accounting policies of the reportable segments are the same as those described in the Significant Accounting Principles. Intersegment revenues are recorded at cost plus an agreed upon intercompany profit, and are eliminated upon consolidation.

Factors Management Used to Identify the Enterprise’s Reportable Segments

The Company’s reportable segments are business units that are managed separately due to the different products provided and the need to report separately to the various regulatory jurisdictions. The Company regularly reviews the quantitative thresholds and other criteria to determine when other business segments may need to be reported.

	2019
	Life	Cemetery/		Intercompany
	Insurance	Mortuary	Mortgage	Eliminations	Consolidated
Revenues:
From external sources:
Revenue from customers	$       81,860,610	$       15,296,235	$     131,976,082	$                         -	$     229,132,927
Net investment income	41,610,831	579,995	828,647	-	43,019,473
Gains on investments and other assets	138,330	530,098	59,939	-	728,367
Other revenues	2,128,961	95,197	7,956,005	-	10,180,163
Intersegment revenues:
Net investment income	4,455,034	443,548	508,637	(5,407,219)	-
Total revenues	130,193,766	16,945,073	141,329,310	(5,407,219)	283,060,930
Expenses:
Death, surrenders and other policy benefits	44,911,805	-	-	-	44,911,805
Increase in future policy benefits	23,568,497	-	-	-	23,568,497
Amortization of deferred policy and pre-need acquisition costs and value of business acquired	14,199,152	435,425	-	-	14,634,577
Selling, general and administrative expenses:
Commissions	3,632,780	1,084,079	52,046,032	-	56,762,891
Personnel	20,311,591	5,177,810	38,731,869	-	64,221,270
Advertising	595,118	368,173	3,821,267	-	4,784,558
Rent and rent related	451,380	47,525	6,556,551	-	7,055,456
Depreciation on property and equipment	477,247	428,633	805,489	-	1,711,369
Cost related to funding mortgage loans	-	-	6,278,954	-	6,278,954
Intersegment	412,853	180,594	544,463	(1,137,910)	-
Other	11,769,097	3,241,023	19,912,641	-	34,922,761
Interest expense:
Intersegment	490,756	154,615	3,623,938	(4,269,309)	-
Other	2,808,081	288,768	4,289,839	-	7,386,688
Costs of goods and services sold-mortuaries and cemeteries	-	2,878,169	-	-	2,878,169
Total benefits and expenses	123,628,357	14,284,814	136,611,043	(5,407,219)	269,116,995
Earnings before income taxes	$         6,565,409	$         2,660,259	$         4,718,267	$                         -	$       13,943,935
Income tax benefit (expense)	(1,085,848)	(649,144)	(1,315,424)	-	(3,050,416)
Net earnings	$         5,479,561	$         2,011,115	$         3,402,843	$                         -	$       10,893,519
Identifiable assets	$  1,110,641,526	$       81,014,182	$     249,970,323	$     (110,701,544)	$  1,330,924,487
Goodwill	$         2,765,570	$            754,018	$                        -	$                         -	$         3,519,588

	2018
	Life	Cemetery/		Intercompany
	Insurance	Mortuary	Mortgage	Eliminations	Consolidated
Revenues:
From external sources:
Revenue from customers	$       75,928,910	$       13,726,518	$     116,185,853	$                         -	$     205,841,281
Net investment income	38,720,365	283,343	909,559	-	39,913,267
Gains on investments and other assets	21,396,282	2,301,342	243,555	-	23,941,179
Other revenues	1,636,901	128,797	8,157,302	-	9,923,000
Intersegment revenues:
Net investment income	3,972,532	429,312	503,794	(4,905,638)	-
Total revenues	141,654,990	16,869,312	126,000,063	(4,905,638)	279,618,727
Expenses:
Death, surrenders and other policy benefits	39,185,087	-	-	-	39,185,087
Increase in future policy benefits	24,332,088	-	-	-	24,332,088
Amortization of deferred policy and pre-need acquisition costs and value of business acquired	11,270,579	360,767	-	-	11,631,346
Selling, general and administrative expenses:
Commissions	3,242,745	1,222,642	45,825,965	-	50,291,352
Personnel	18,489,063	4,773,866	44,106,023	-	67,368,952
Advertising	566,154	333,852	3,702,585	-	4,602,591
Rent and rent related	321,701	33,138	7,250,536	-	7,605,375
Depreciation on property and equipment	400,686	372,469	1,093,846	-	1,867,001
Cost related to funding mortgage loans	-	-	6,423,944	-	6,423,944
Intersegment	402,213	182,009	531,370	(1,115,592)	-
Other	10,094,626	3,046,902	17,873,471	-	31,014,999
Interest expense:
Intersegment	481,587	173,807	3,134,652	(3,790,046)	-
Other	2,744,841	294,535	3,917,331	-	6,956,707
Costs of goods and services sold-mortuaries and cemeteries	-	2,158,895	-	-	2,158,895
Total benefits and expenses	111,531,370	12,952,882	133,859,723	(4,905,638)	253,438,337
Earnings before income taxes	$       30,123,620	$         3,916,430	$       (7,859,660)	$                         -	$       26,180,390
Income tax benefit (expense)	(5,275,662)	(946,820)	1,728,171	-	(4,494,311)
Net earnings	$       24,847,958	$         2,969,610	$       (6,131,489)	$                         -	$       21,686,079
Identifiable assets	$     928,251,387	$       90,639,130	$     159,680,649	$     (130,525,613)	$  1,048,045,553
Goodwill	$         2,765,570	$                        -	$                        -	$                         -	$         2,765,570