3) Investments (Tables)

9 Months Ended

Sep. 30, 2020

Table Text Block Supplement [Abstract]

Held-to-maturity Securities

The Company’s investments as of September 30, 2020 are summarized as follows:

	Amortized Cost	Gross Unrealized Gains	Gross Unrealized Losses	Estimated Fair Value
September 30, 2020:
Fixed maturity securities, available for sale, at estimated fair value:
U.S. Treasury securities and obligations of U.S. Government agencies	$      92,395,468	$       2,059,112	$                      -	$        94,454,580
Obligations of states and political subdivisions	5,765,286	322,859	(1,792)	6,086,353
Corporate securities including public utilities	189,323,616	24,248,838	(2,137,953)	211,434,501
Mortgage-backed securities	31,887,810	1,313,395	(499,496)	32,701,709
Redeemable preferred stock	269,214	3,530	(32,500)	240,244
Total fixed maturity securities available for sale	$    319,641,394	$     27,947,734	$      (2,671,741)	$      344,917,387
Equity securities at estimated fair value:
Common stock:
Industrial, miscellaneous and all other	$      11,304,152	$       1,845,615	$      (1,934,161)	$        11,215,606
Total equity securities at estimated fair value	$      11,304,152	$       1,845,615	$      (1,934,161)	$        11,215,606
Mortgage loans held for investment at amortized cost:
Residential	$      80,051,914
Residential construction	120,298,836
Commercial	49,378,938
Less: Unamortized deferred loan fees, net	(905,018)
Less: Allowance for loan losses	(2,066,481)
Less: Net discounts	(1,148,662)
Total mortgage loans held for investment	$    245,609,527
Real estate held for investment - net of accumulated depreciation:
Residential	$      25,166,274
Commercial	97,836,409
Total real estate held for investment	$    123,002,683
Real estate held for sale:
Residential	$        3,455,244
Commercial	4,534,937
Total real estate held for sale	$        7,990,181
Other investments and policy loans at amortized cost:
Policy loans	$      14,234,935
Insurance assignments	45,858,660
Federal Home Loan Bank stock (1)	4,066,600
Other investments	5,450,438
Less: Allowance for doubtful accounts	(1,602,483)
Total policy loans and other investments	$      68,008,150
Accrued investment income	$        5,712,998
Total investments	$    806,456,532
(1) Includes $866,900 of Membership stock and $3,199,700 of Activity stock due to short-term borrowings.

The Company’s investments as of December 31, 2019 are summarized as follows:

	Amortized Cost	Gross Unrealized Gains	Gross Unrealized Losses	Estimated Fair Value
December 31, 2019:
Fixed maturity securities, available for sale, at estimated fair value:
U.S. Treasury securities and obligations of U.S. Government agencies	$    142,740,641	$          632,185	$           (25,215)	$      143,347,611
Obligations of states and political subdivisions	7,450,366	87,812	(9,026)	7,529,152
Corporate securities including public utilities	156,599,184	16,768,449	(463,413)	172,904,220
Mortgage-backed securities	31,475,280	597,395	(240,177)	31,832,498
Redeemable preferred stock	364,339	-	-	364,339
Total fixed maturity securities available for sale	$    338,629,810	$     18,085,841	$         (737,831)	$      355,977,820
Equity securities at estimated fair value:
Common stock:
Industrial, miscellaneous and all other	$        6,900,537	$       1,139,799	$         (769,171)	$          7,271,165
Total equity securities at estimated fair value	$        6,900,537	$       1,139,799	$         (769,171)	$          7,271,165
Mortgage loans held for investment at amortized cost:
Residential	$    113,043,965
Residential construction	89,430,237
Commercial	38,718,220
Less: Unamortized deferred loan fees, net	(2,391,567)
Less: Allowance for loan losses	(1,453,037)
Less: Net discounts	(653,272)
Total mortgage loans held for investment	$    236,694,546
Real estate held for investment - net of accumulated depreciation:
Residential	$      12,530,306
Commercial	90,226,640
Total real estate held for investment	$    102,756,946
Real estate held for sale:
Residential	$        8,021,306
Commercial	6,076,321
Total real estate held for sale	$      14,097,627
Other investments and policy loans at amortized cost:
Policy loans	$      14,762,805
Insurance assignments	41,062,965
Federal Home Loan Bank stock (1)	894,300
Other investments	4,973,225
Less: Allowance for doubtful accounts	(1,448,026)
Total policy loans and other investments	$      60,245,269
Accrued investment income	$        4,833,232
Total investments	$    781,876,605
(1) Includes $894,300 of Membership stock and $-0- of Activity stock due to short-term borrowings.

Schedule of Unrealized Loss on Investments

The tables set forth unrealized losses by duration with the fair value of the related fixedmaturity 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 September 30, 2020
Obligations of States and Political Subdivisions	$            1,792	$        207,330	$                  -	$                  -	$            1,792	$        207,330
Corporate Securities	1,305,034	28,511,620	832,919	3,366,248	2,137,953	31,877,868
Mortgage and other asset-backed securities	476,698	5,601,677	22,798	401,217	499,496	6,002,894
Redeemable preferred stock	32,500	217,500	-	-	32,500	217,500
Total unrealized losses	$     1,816,024	$   34,538,127	$        855,717	$     3,767,465	$     2,671,741	$   38,305,592
At December 31, 2019
U.S. Treasury Securities and Obligations
of U.S. Government Agencies	$          20,211	$   30,629,288	$            5,004	$   10,000,400	$          25,215	$   40,629,688
Obligations of States and Political Subdivisions	9,026	3,062,889	-	-	9,026	3,062,889
Corporate Securities	118,746	7,184,311	344,667	3,950,509	463,413	11,134,820
Mortgage and other asset-backed securities	205,470	13,266,443	34,707	502,769	240,177	13,769,212
Total unrealized losses	$        353,453	$   54,142,931	$        384,378	$   14,453,678	$        737,831	$   68,596,609

Investments Classified by Contractual Maturity Date

The amortized cost and estimated fair value of fixed maturity securitiesavailable for sale, at September 30, 2020, 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 Cost	Estimated Fair Value
Due in 1 year	$       50,670,550	$       51,171,942
Due in 2-5 years	74,293,341	77,094,479
Due in 5-10 years	85,128,399	92,517,720
Due in more than 10 years	77,392,080	91,191,293
Mortgage-backed securities	31,887,810	32,701,709
Redeemable preferred stock	269,214	240,244
Total	$     319,641,394	$     344,917,387

Gain (Loss) on Investments

The Company’s net realized gains and losses from sales, calls, and maturities, unrealized gains and losses on equity securities, and other than temporary impairments are summarized as follows:

`	Three Months Ended September 30		Nine Months Ended September 30
	2020	2019	2020	2019
Fixed maturity securities:
Gross realized gains	$        50,171	$      113,849	$      201,130	$      362,475
Gross realized losses	(39,130)	(16,814)	(51,219)	(121,829)
Equity securities:
Gains (losses) on securities sold	95,331	85,998	(12,141)	138,662
Unrealized gains and (losses) on securities held at the end of the period	511,168	(98,635)	(512,629)	676,589
Other assets:
Gross realized gains	1,480,053	472,691	1,985,817	2,265,914
Gross realized losses	(1,297,086)	(1,076,762)	(1,784,419)	(3,060,716)
Total	$      800,507	$     (519,673)	$     (173,461)	$      261,095

Schedule of Major categories of net investment income

Major categories of net investment income are as follows:

	Three Months Ended September 30		Nine Months Ended September 30
	2020	2019	2020	2019
Fixed maturity securities	$     3,191,064	$     2,563,481	$     9,258,850	$     7,596,035
Equity securities	126,369	74,629	329,534	227,280
Mortgage loans held for investment	6,918,081	4,558,232	18,154,123	13,187,416
Real estate held for investment	2,998,806	2,259,064	8,940,072	6,266,286
Policy loans	264,422	113,541	755,914	308,583
Insurance assignments	4,561,574	3,851,804	13,244,176	11,970,755
Other investments	-	-	25,421	106,678
Cash and cash equivalents	65,460	398,997	385,848	1,363,873
Gross investment income	18,125,776	13,819,748	51,093,938	41,026,906
Investment expenses	(3,416,634)	(3,341,182)	(10,021,552)	(9,965,837)
Net investment income	$   14,709,142	$   10,478,566	$   41,072,386	$   31,061,069

Commercial Real Estate Investment

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

	Net Ending Balance		Total Square Footage
	September 30 2020	December 31 2019	September 30 2020	December 31 2019
Louisiana	$    5,889,327	$   6,009,079	125,114	125,114
Mississippi	2,932,976	2,951,478	21,521	21,521
Utah (1)	89,014,106	81,266,083	462,730	465,230
	$   97,836,409	$ 90,226,640	609,365	611,865
(1) Includes Center53 phase 1 completed in July 2017 and phase 2 which is under construction

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

	Net Ending Balance		Total Square Footage
	September 30 2020	December 31 2019	September 30 2020	December 31 2019
Arizona (1)	$                  -	$        2,500	-	-
Kansas	4,000,000	4,800,000	222,679	222,679
Mississippi	234,937	318,322	12,300	12,300
Nevada	-	655,499	-	4,800
Texas (2)	300,000	300,000	-	-
	$      4,534,937	$  6,076,321	234,979	239,779
(1) Undeveloped land
(2) Improved commercial pad

Residential Real Estate Investment

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

	Net Ending Balance
	September 30 2020	December 31 2019
Florida	$      1,261,975	$     2,487,723
Nevada	686,124	293,516
Utah (1)	22,931,994	9,462,886
Washington	286,181	286,181
	$    25,166,274	$   12,530,306
(1) Includes subdivision land developments

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

	Net Ending Balance
	September 30 2020	December 31 2019
California	-	640,452
Florida	1,104,936	1,300,641
Nevada	293,516	-
Ohio	10,000	10,000
Utah	2,046,792	5,880,213
Washington	-	190,000
	$      3,455,244	$  8,021,306

Real Estate Owned and Occupied by the Company

As of September 30, 2020, real estate owned and occupied by the Company is summarized as follows:

Location	Business Segment	Approximate Square Footage	Square Footage Occupied by the Company
121 W. Election Rd., Draper, UT	Corporate Offices, Life Insurance and      Cemetery/Mortuary Operations	78,979	18%
5201 Green Street, Salt Lake City, UT (1)	Life Insurance and Mortgage Operations	39,157	73%
1044 River Oaks Dr., Flowood, MS	Life Insurance Operations	19,694	28%
1818 Marshall Street, Shreveport, LA (1)(2)	Life Insurance Operations	12,274	100%
909 Foisy Street, Alexandria, LA (1)(2)	Life Insurance Sales	8,059	100%
812 Sheppard Street, Minden, LA (1)(2)	Life Insurance Sales	1,560	100%
1550 N 3rd Street, Jena, LA (1)(2)	Life Insurance Sales	1,737	100%
(1) Included in property and equipment on the condensed consolidated balance sheets
(2) See Note 15 regarding the acquisition of Kilpatrick Life Insurance Company

Schedule of Allowance for loan losses as a contra-asset account

The following is a summary of the allowance for loan losses as a contra-asset account for the periods presented:

	Commercial	Residential	Residential Construction	Total
September 30, 2020
Allowance for credit losses:
Beginning balance - January 1, 2020	$        187,129	$     1,222,706	$          43,202	$     1,453,037
Charge-offs	-	-	-	-
Provision	-	613,444	-	613,444
Ending balance - September 30, 2020	$        187,129	$     1,836,150	$          43,202	$     2,066,481
Ending balance: individually evaluated for impairment	$                    -	$        238,997	$                    -	$        238,997
Ending balance: collectively evaluated for impairment	$        187,129	$     1,597,153	$          43,202	$     1,827,484
Mortgage loans:
Ending balance	$   49,378,938	$   80,051,914	$ 120,298,836	$ 249,729,688
Ending balance: individually evaluated for impairment	$     3,414,719	$     5,193,865	$        630,574	$     9,239,158
Ending balance: collectively evaluated for impairment	$   45,964,219	$   74,858,049	$ 119,668,262	$ 240,490,530
December 31, 2019
Allowance for credit losses:
Beginning balance - January 1, 2019	$        187,129	$     1,125,623	$          35,220	$     1,347,972
Charge-offs	-	(32,692)	-	(32,692)
Provision	-	129,775	7,982	137,757
Ending balance - December 31, 2019	$        187,129	$     1,222,706	$          43,202	$     1,453,037
Ending balance: individually evaluated for impairment	$                    -	$        195,993	$                    -	$        195,993
Ending balance: collectively evaluated for impairment	$        187,129	$     1,026,713	$          43,202	$     1,257,044
Mortgage loans:
Ending balance	$   38,718,220	$ 113,043,965	$   89,430,237	$ 241,192,422
Ending balance: individually evaluated for impairment	$     4,488,719	$     3,752,207	$        655,000	$     8,895,926
Ending balance: collectively evaluated for impairment	$   34,229,501	$ 109,291,758	$   88,775,237	$ 232,296,496

Schedule of aging of mortgage loans

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

	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	Unamortized discounts, net	Net Mortgage Loans
September 30, 2020
Commercial	$        255,858	$     495,937	$      3,414,719	$                           -	$      4,166,514	$     45,212,424	$    49,378,938	$        (187,129)	$           (43,338)	$         (828,049)	$    48,320,422
Residential	5,261,818	1,930,361	3,745,621	1,448,244	12,386,044	67,665,870	80,051,914	(1,836,150)	(521,661)	(320,613)	77,373,490
Residential   Construction	276,403	1,630,000	630,574	-	2,536,977	117,761,859	120,298,836	(43,202)	(340,019)	-	119,915,615
Total	$    5,794,079	$  4,056,298	$     7,790,914	$          1,448,244	$   19,089,535	$   230,640,153	$  249,729,688	$    (2,066,481)	$          (905,018)	$       (1,148,662)	$  245,609,527
December 31, 2019
Commercial	$     1,872,000	$                    -	$     4,488,719	$                           -	$     6,360,719	$     32,357,501	$     38,718,220	$        (187,129)	$            (88,918)	$         (653,272)	$     37,788,901
Residential	10,609,296	4,085,767	2,100,742	1,651,465	18,447,270	94,596,695	113,043,965	(1,222,706)	(1,567,581)	-	110,253,678
Residential   Construction	-	-	655,000	-	655,000	88,775,237	89,430,237	(43,202)	(735,068)	-	88,651,967
Total	$    12,481,296	$  4,085,767	$     7,244,461	$           1,651,465	$  25,462,989	$   215,729,433	$    241,192,422	$    (1,453,037)	$      (2,391,567)	$         (653,272)	$  236,694,546
(1)  Interest income is not recognized on loans past due greater than 90 days or in foreclosure.

Schedule of Impaired Mortgage Loans

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:

	Recorded Investment	Unpaid Principal Balance	Related Allowance	Average Recorded Investment	Interest Income Recognized
September 30, 2020
With no related allowance recorded:
Commercial	$    3,414,719	$    3,414,719	$                  -	$    1,772,817	$                   -
Residential	3,435,710	3,435,710	-	4,235,285	-
Residential construction	630,574	630,574	-	673,383	-
With an allowance recorded:
Commercial	$                  -	$                   -	$                  -	$                  -	$                   -
Residential	1,758,155	1,758,155	238,997	1,186,545	-
Residential construction	-	-	-	-	-
Total:
Commercial	$    3,414,719	$    3,414,719	$                  -	$    1,772,817	$                   -
Residential	5,193,865	5,193,865	238,997	5,421,830	-
Residential construction	630,574	630,574	-	673,383	-
December 31, 2019
With no related allowance recorded:
Commercial	$    4,488,719	$    4,488,719	$                  -	$    1,499,043	$                   -
Residential	2,254,189	2,254,189	-	3,367,151	-
Residential construction	655,000	655,000	-	1,457,278	-
With an allowance recorded:
Commercial	$                  -	$                   -	$                  -	$                  -	$                   -
Residential	1,498,018	1,498,018	195,993	665,270	-
Residential construction	-	-	-	-	-
Total:
Commercial	$    4,488,719	$    4,488,719	$                  -	$    1,499,043	$                   -
Residential	3,752,207	3,752,207	195,993	4,032,421	-
Residential construction	655,000	655,000	-	1,457,278	-

Schedule Of Credit Risk Of Mortgage Loans Based On Performance Status:

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

	Commercial		Residential		Residential Construction		Total
	September   30, 2020	December 31, 2019	September   30, 2020	December 31, 2019	September   30, 2020	December 31, 2019	September   30, 2020	December 31, 2019
Performing	$   45,964,219	$   34,229,501	$   74,858,049	$  109,291,758	$   119,668,262	$  88,775,237	$ 240,490,530	$     232,296,496
Non-performing	3,414,719	4,488,719	5,193,865	3,752,207	630,574	655,000	9,239,158	8,895,926
Total	$  49,378,938	$   38,718,220	$     80,051,914	$  113,043,965	$  120,298,836	$  89,430,237	$ 249,729,688	$       241,192,422

Schedule of Mortgage loans on a nonaccrual status

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

	As of September 30 2020	As of December 31 2019
Commercial	$                    3,414,719	$                   4,488,719
Residential	5,193,865	3,752,207
Residential construction	630,574	655,000
Total	$                    9,239,158	$                   8,895,926