3) Investments (Tables)

6 Months Ended

Jun. 30, 2020

Table Text Block Supplement [Abstract]

Held-to-maturity Securities

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

	Amortized Cost	Gross Unrealized Gains	Gross Unrealized Losses	Estimated Fair Value
June 30, 2020:
Fixed maturity securities, available for sale, at estimated fair value:
U.S. Treasury securities and obligations of U.S. Government agencies	$    102,442,154	$       2,147,334	$                      -	$      104,589,488
Obligations of states and political subdivisions	5,878,900	269,394	(2,661)	6,145,633
Corporate securities including public utilities	182,731,042	21,371,660	(2,841,768)	201,260,934
Mortgage-backed securities	35,789,063	1,209,447	(734,173)	36,264,337
Redeemable preferred stock	364,339	21,561	(17,500)	368,400
Total fixed maturity securities available for sale	$    327,205,498	$     25,019,396	$      (3,596,102)	$      348,628,792
Equity securities at estimated fair value:
Common stock:
Industrial, miscellaneous and all other	$      12,380,259	$       1,525,151	$      (2,113,899)	$        11,791,511
Total equity securities at estimated fair value	$      12,380,259	$       1,525,151	$      (2,113,899)	$        11,791,511
Mortgage loans held for investment at amortized cost:
Residential	$    109,304,960
Residential construction	106,890,366
Commercial	49,613,367
Less: Unamortized deferred loan fees, net	(1,730,243)
Less: Allowance for loan losses	(2,443,557)
Less: Net discounts	(1,216,889)
Total mortgage loans held for investment	$    260,418,004
Real estate held for investment - net of accumulated depreciation:
Residential	$      19,973,537
Commercial	93,218,885
Total real estate held for investment	$    113,192,422
Real estate held for sale:
Residential	$        4,522,020
Commercial	6,076,321
Total real estate held for sale	$      10,598,341
Other investments and policy loans at amortized cost:
Policy loans	$      14,450,587
Insurance assignments	43,276,682
Federal Home Loan Bank stock (1)	4,056,600
Other investments	5,450,438
Less: Allowance for doubtful accounts	(1,533,696)
Total policy loans and other investments	$      65,700,611
Accrued investment income	$        5,008,772
Total investments	$    815,338,453
(1) Includes $874,400 of Membership stock and $3,182,200 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 June 30, 2020
Obligations of States and Political Subdivisions	$          2,661	$        717,466	$                    -	$                    -	$            2,661	$        717,466
Corporate Securities	1,876,784	22,141,540	964,984	3,039,240	2,841,768	25,180,780
Mortgage and other asset-backed securities	710,364	10,024,319	23,809	504,583	734,173	10,528,902
Redeemable preferred stock	17,500	232,500	-	-	17,500	232,500
Total unrealized losses	$     2,607,309	$   33,115,825	$        988,793	$     3,543,823	$     3,596,102	$   36,659,648
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 June 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	$       61,039,649	$       61,451,128
Due in 2-5 years	73,278,818	76,149,038
Due in 5-10 years	82,777,913	88,468,598
Due in more than 10 years	73,955,716	85,927,291
Mortgage-backed securities	35,789,063	36,264,337
Redeemable preferred stock	364,339	368,400
Total	$     327,205,498	$     348,628,792

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 June 30		Six Months Ended June 30
	2020	2019	2020	2019
Fixed maturity securities:
Gross realized gains	$        55,138	$      163,038	$      150,959	$      248,626
Gross realized losses	(12,089)	(69,622)	(12,089)	(105,015)
Equity securities:
Gains (losses) on securities sold	(50,029)	41,088	(107,471)	52,664
Unrealized gains and (losses) on securities held at the end of the period	1,738,059	14,016	(1,023,797)	775,224
Other assets:
Gross realized gains	48,736	688,289	505,764	1,793,223
Gross realized losses	458,464	(1,862,702)	(487,334)	(1,983,954)
Total	$    2,238,279	$  (1,025,893)	$     (973,968)	$      780,768

Schedule of Major categories of net investment income

Major categories of net investment income are as follows: 

	Three Months Ended June 30		Six Months Ended June 30
	2020	2019	2020	2019
Fixed maturity securities	$     3,143,072	$     2,528,689	$     6,067,786	$     5,032,554
Equity securities	111,122	74,730	203,164	152,651
Mortgage loans held for investment	5,582,152	4,525,817	11,236,042	8,629,184
Real estate held for investment	2,787,881	2,096,927	5,941,267	4,007,221
Policy loans	257,527	106,905	491,492	195,042
Insurance assignments	4,383,398	3,906,832	8,682,602	8,118,952
Other investments	398	52,130	25,421	106,678
Cash and cash equivalents	22,385	465,959	320,390	964,876
Gross investment income	16,287,935	13,757,989	32,968,164	27,207,158
Investment expenses	(3,325,190)	(3,217,154)	(6,604,920)	(6,624,655)
Net investment income	$   12,962,745	$   10,540,835	$   26,363,244	$   20,582,503

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
	June 30 2020	December 31 2019	June 30 2020	December 31 2019
Louisiana	$  5,929,267	$   6,009,079	125,114	125,114
Mississippi	2,914,989	2,951,478	21,521	21,521
Utah (1)	84,374,629	81,266,083	462,730	462,730
	$93,218,885	$ 90,226,640	609,365	609,365
(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
	June 30 2020	December 31 2019	June 30 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
	June 30 2020	December 31 2019
Florida	$    1,269,577	$     2,487,723
Nevada	686,124	293,516
Utah (1)	17,731,655	9,462,886
Washington	286,181	286,181
	$  19,973,537	$   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
	June 30 2020	December 31 2019
California	421,452	640,452
Florida	1,351,040	1,300,641
Nevada	293,516	-
Ohio	10,000	10,000
Utah	2,446,012	5,880,213
Washington	-	190,000
	$   4,522,020	$  8,021,306

Real Estate Owned and Occupied by the Company

As of June 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
June 30, 2020
Allowance for credit losses:
Beginning balance - January 1, 2020	$        187,129	$     1,222,706	$          43,202	$     1,453,037
Charge-offs	-	-	-	-
Provision	-	990,520	-	990,520
Ending balance - June 30, 2020	$        187,129	$     2,213,226	$          43,202	$     2,443,557
Ending balance: individually evaluated for impairment	$                    -	$        427,069	$                    -	$        427,069
Ending balance: collectively evaluated for impairment	$        187,129	$     1,786,157	$          43,202	$     2,016,488
Mortgage loans:
Ending balance	$   49,613,367	$ 109,304,960	$ 106,890,366	$ 265,808,693
Ending balance: individually evaluated for impairment	$     1,039,013	$     7,106,397	$     1,389,574	$     9,534,984
Ending balance: collectively evaluated for impairment	$   48,574,354	$ 102,198,563	$ 105,500,792	$ 256,273,709
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
June 30, 2020
Commercial	$   2,783,200	$    371,938	$  1,039,013	$                       -	$  4,194,151	$  45,419,216	$  49,613,367	$   (187,129)	$        (11,545)	$      (849,914)	$  48,564,779
Residential	7,624,435	3,308,995	5,423,083	1,683,314	18,039,827	91,265,133	109,304,960	(2,213,226)	(1,258,346)	(366,975)	105,466,413
Residential   Construction	-	-	1,389,574	-	1,389,574	105,500,792	106,890,366	(43,202)	(460,352)	-	106,386,812
Total	$ 10,407,635	$ 3,680,933	$  7,851,670	$         1,683,314	$23,623,552	$242,185,141	$  65,808,693	$(2,443,557)	$   (1,730,243)	$  (1,216,889)	$ 260,418,004
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
June 30, 2020
With no related allowance recorded:
Commercial	$    1,039,013	$    1,039,013	$                  -	$       951,866	$                   -
Residential	4,683,807	4,683,807	-	3,466,388	-
Residential construction	1,389,574	1,389,574	-	694,787	-
With an allowance recorded:
Commercial	$                  -	$                   -	$                  -	$                  -	$                   -
Residential	2,422,590	2,422,590	427,069	2,355,231	-
Residential construction	-	-	-	-	-
Total:
Commercial	$    1,039,013	$    1,039,013	$                  -	$       951,866	$                   -
Residential	7,106,397	7,106,397	427,069	5,821,619	-
Residential construction	1,389,574	1,389,574	-	694,787	-
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
	June   30, 2020	December 31, 2019	June   30, 2020	December 31, 2019	June   30, 2020	December 31, 2019	June   30, 2020	December 31, 2019
Performing	$ 48,574,354	$ 34,229,501	$ 102,198,563	$109,291,758	$  105,500,792	$  88,775,237	$ 256,273,709	$     232,296,496
Non-performing	1,039,013	4,488,719	7,106,397	3,752,207	1,389,574	655,000	9,534,984	8,895,926
Total	$  49,613,367	$  38,718,220	$ 109,304,960	$113,043,965	$  106,890,366	$  89,430,237	$ 265,808,693	$     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 June 30 2020	As of December 31 2019
Commercial	$                    1,039,013	$                   4,488,719
Residential	7,106,397	3,752,207
Residential construction	1,389,574	655,000
Total	$                    9,534,984	$                   8,895,926