3) Investments (Tables)

3 Months Ended

Mar. 31, 2020

Table Text Block Supplement [Abstract]

Held-to-maturity Securities

The Company’s investments as of March 31, 2020 are summarized as follows:

	Amortized Cost	Gross Unrealized Gains	Gross Unrealized Losses	Estimated Fair Value
March 31, 2020:
Fixed maturity securities, available for sale, at estimated fair value:
U.S. Treasury securities and obligations of U.S. Government agencies	$    112,607,309	$       2,088,697	$                      -	$      114,696,006
Obligations of states and political subdivisions	6,399,567	194,880	(9,121)	6,585,326
Corporate securities including public utilities	171,895,973	12,098,857	(7,611,064)	176,383,766
Mortgage-backed securities	31,789,238	634,576	(1,317,320)	31,106,494
Redeemable preferred stock	364,339	18,381	(8,750)	373,970
Total fixed maturity securities available for sale	$    323,056,426	$     15,035,391	$      (8,946,255)	$      329,145,562
Equity securities at estimated fair value:
Common stock:
Industrial, miscellaneous and all other	$        9,970,160	$          786,981	$      (2,521,196)	$          8,235,945
Total equity securities at estimated fair value	$        9,970,160	$          786,981	$      (2,521,196)	$          8,235,945
Mortgage loans held for investment at amortized cost:
Residential	$    117,696,147
Residential construction	93,590,770
Commercial	44,604,661
Less: Unamortized deferred loan fees, net	(2,169,620)
Less: Allowance for loan losses	(2,089,670)
Less: Net discounts	(1,227,769)
Total mortgage loans held for investment	$    250,404,519
Real estate held for investment - net of accumulated depreciation:
Residential	$      10,939,769
Commercial	91,976,650
Total real estate held for investment	$    102,916,419
Real estate held for sale:
Residential	$        5,648,111
Commercial	6,076,321
Total real estate held for sale	$      11,724,432
Other investments and policy loans at amortized cost:
Policy loans	$      14,617,151
Insurance assignments	38,444,267
Federal Home Loan Bank stock (1)	1,674,400
Other investments	5,240,438
Less: Allowance for doubtful accounts	(1,489,113)
Total policy loans and other investments	$      58,487,143
Accrued investment income	$        5,757,535
Total investments	$    766,671,555
(1) Includes $874,400 of Membership stock and $800,000 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 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 March 31, 2020
Obligations of States and Political Subdivisions	$            9,121	$     1,517,439	$                    -	$                    -	$            9,121	$     1,517,439
Corporate Securities	6,202,615	45,578,852	1,408,449	2,597,590	7,611,064	48,176,442
Mortgage and other asset-backed securities	1,285,828	20,262,301	31,492	477,580	1,317,320	20,739,881
Redeemable preferred stock	8,750	241,250	-	-	8,750	241,250
Total unrealized losses	$     7,506,314	$   67,599,842	$     1,439,941	$     3,075,170	$     8,946,255	$   70,675,012
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 securities available for sale, at March 31, 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	$       73,238,213	$       73,502,130
Due in 2-5 years	71,857,335	73,583,452
Due in 5-10 years	77,612,911	76,748,155
Due in more than 10 years	68,194,390	73,831,361
Mortgage-backed securities	31,789,238	31,106,494
Redeemable preferred stock	364,339	373,970
Total	$     323,056,426	$     329,145,562

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 March 31
	2020	2019
Fixed maturity securities:
Gross realized gains	$        95,821	$        85,587
Gross realized losses	-	(35,393)
Equity securities:
Gains (losses) on securities sold	(57,442)	11,576
Unrealized gains and (losses) on securities held at the end of the period	(2,761,856)	761,208
Other assets:
Gross realized gains	457,028	1,104,935
Gross realized losses	(945,798)	(121,252)
Total	$  (3,212,247)	$    1,806,661

Schedule of Major categories of net investment income

Major categories of net investment income are as follows:

	Three Months Ended March 31
	2020	2019
Fixed maturity securities	$     2,924,714	$     2,503,865
Equity securities	92,042	77,921
Mortgage loans held for investment	5,653,890	4,103,367
Real estate held for investment	3,153,385	1,910,294
Policy loans	233,966	88,137
Insurance assignments	4,299,205	4,212,120
Other investments	25,023	54,548
Cash and cash equivalents	298,005	498,918
Gross investment income	16,680,230	13,449,170
Investment expenses	(3,279,731)	(3,407,502)
Net investment income	$   13,400,499	$   10,041,668

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
	March 31 2020	December 31 2019	March 31 2020	December 31 2019
Louisiana	$   5,969,190	$  6,009,079	125,114	125,114
Mississippi	2,933,234	2,951,478	21,521	21,521
Utah (1)	83,074,226	81,266,083	462,730	465,230
	$ 91,976,650	$ 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
	March 31 2020	December 31 2019	March 31 2020	December 31 2019
Arizona (1)	$        2,500	$        2,500	-	-
Kansas	4,800,000	4,800,000	222,679	222,679
Mississippi	318,322	318,322	12,300	12,300
Nevada	655,499	655,499	4,800	4,800
Texas (2)	300,000	300,000	-	-
	$  6,076,321	$  6,076,321	239,779	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
	March 31 2020	December 31 2019
Florida	$    2,166,615	$     2,487,723
Nevada	-	293,516
Utah (1)	8,486,973	9,462,886
Washington	286,181	286,181
	$  10,939,769	$   12,530,306
(1) Includes subdivision developments

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

	Net Ending Balance
	March 31 2020	December 31 2019
California	421,452	640,452
Florida	858,221	1,300,641
Nevada	293,516	-
Ohio	10,000	10,000
Utah	4,064,922	5,880,213
Washington	-	190,000
	$   5,648,111	$  8,021,306

Real Estate Owned and Occupied by the Company

As of March 31, 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:

Allowance for Credit Losses and Recorded Investment in Mortgage Loans
	Commercial	Residential	Residential Construction	Total
March 31, 2020
Allowance for credit losses:
Beginning balance - January 1, 2020	$        187,129	$     1,222,706	$          43,202	$     1,453,037
Charge-offs	-	-	-	-
Provision	-	636,633	-	636,633
Ending balance - March 31, 2020	$        187,129	$     1,859,339	$          43,202	$     2,089,670
Ending balance: individually evaluated for impairment	$                    -	$        345,913	$                    -	$        345,913
Ending balance: collectively evaluated for impairment	$        187,129	$     1,513,426	$          43,202	$     1,743,757
Mortgage loans:
Ending balance	$   44,604,661	$ 117,696,147	$   93,590,770	$ 255,891,578
Ending balance: individually evaluated for impairment	$        864,719	$     4,536,840	$                    -	$     5,401,559
Ending balance: collectively evaluated for impairment	$   43,739,942	$ 113,159,307	$   93,590,770	$ 250,490,019
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:

Age Analysis of Mortgage Loans Held for Investment
	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
March 31, 2020
Commercial	$      1,713,947	$    1,421,979	$         864,719	$                           -	$    4,000,645	$     40,604,016	$     44,604,661	$        (187,129)	$           (74,850)	$          (824,461)	$      43,518,221
Residential	12,130,781	3,423,153	2,730,747	1,806,094	20,090,775	97,605,372	117,696,147	(1,859,339)	(1,440,781)	(403,308)	113,992,719
Residential   Construction	2,002,484	-	-	-	2,002,484	91,588,286	93,590,770	(43,202)	(653,989)	-	92,893,579
Total	$    15,847,212	$   4,845,132	$    3,595,466	$          1,806,094	$  26,093,904	$  229,797,674	$   255,891,578	$   (2,089,670)	$      (2,169,620)	$      (1,227,769)	$   250,404,519
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:

Impaired Loans
	Recorded Investment	Unpaid Principal Balance	Related Allowance	Average Recorded Investment	Interest Income Recognized
March 31, 2020
With no related allowance recorded:
Commercial	$       864,719	$       864,719	$                  -	$       864,719	$                   -
Residential	2,231,530	2,231,530	-	2,231,530	-
Residential construction	-	-	-	-	-
With an allowance recorded:
Commercial	$                  -	$                   -	$                  -	$                  -	$                   -
Residential	2,305,311	2,305,311	345,913	2,305,311	-
Residential construction	-	-	-	-	-
Total:
Commercial	$       864,719	$       864,719	$                  -	$       864,719	$                   -
Residential	4,536,841	4,536,841	345,913	4,536,841	-
Residential construction	-	-	-	-	-
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:

Mortgage Loans Held for Investment Credit Exposure
Credit Risk Profile Based on Payment Activity
	Commercial		Residential		Residential Construction		Total
	March   31, 2020	December 31, 2019	March   31, 2020	December 31, 2019	March   31, 2020	December 31, 2019	March   31, 2020	December 31, 2019
Performing	$  43,739,942	$   34,229,501	$  113,159,306	$  109,291,758	$  93,590,770	$  88,775,237	$  250,490,018	$     232,296,496
Non-performing	864,719	4,488,719	4,536,841	3,752,207	-	655,000	5,401,560	8,895,926
Total	$   44,604,661	$   38,718,220	$  117,696,147	$  113,043,965	$  93,590,770	$  89,430,237	$  255,891,578	$       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.

	Mortgage Loans on Non-Accrual Status
	As of March 31 2020	As of December 31 2019
Commercial	$                       864,719	$                   4,488,719
Residential	4,536,841	3,752,207
Residential construction	-	655,000
Total	$                    5,401,560	$                   8,895,926