Business Segment Information

12 Months Ended

Dec. 31, 2022

Segment Reporting [Abstract]

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.

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2022 and 2021

15) Business Segment Information (Continued)

	Year Ended December 31, 2022
	Life			Cemetery/						Intercompany
	Insurance			Mortuary			Mortgage			Eliminations			Consolidated
Revenues:
From external sources:
Revenue from customers	$	105,144,646		$	26,993,855		$	173,356,675			-		$	305,495,176
Net investment income		62,565,021			2,444,599			1,187,972			-			66,197,592
Gains (losses) on investments and other assets		(459,462	)		(796,096	)		398,098			-			(857,460	)
Other than temporary impairments		-			-			-			-			-
Other revenues		1,932,402			305,073			16,579,545			-			18,817,020
Intersegment revenues:
Net investment income		6,601,132			451,139			356,574			(7,408,845	)		-
Total revenues		175,783,739			29,398,570			191,878,864			(7,408,845	)		389,652,328
Expenses:
Death, surrenders and other policy benefits		64,066,432			-			-			-			64,066,432
Increase in future policy benefits		28,858,969			-			-			-			28,858,969
Amortization of deferred policy and pre-need acquisition costs and value of business acquired		17,352,803			597,399			-			-			17,950,202
Selling, general and administrative expenses:
Commissions		4,097,680			1,372,200			57,851,212			-			63,321,092
Personnel		26,285,207			9,305,429			64,520,887			-			100,111,523
Advertising		1,649,273			628,114			3,420,611			-			5,697,998
Rent and rent related		384,908			163,182			6,334,923			-			6,883,013
Depreciation on property and equipment		1,036,521			759,415			700,970			-			2,496,906
Provision for loan loss reserve		-			-			-			-			-
Cost related to funding mortgage loans		-			-			7,540,041			-			7,540,041
Intersegment		232,915			160,690			1,795,507			(2,189,112	)		-
Other		13,190,827			5,321,730			27,285,196			-			45,797,753
Interest expense:
Intersegment		462,753			274,911			4,482,069			(5,219,733	)		-
Other		3,969,905			710			3,859,828			-			7,830,443
Costs of goods and services sold-mortuaries and cemeteries		-			4,721,094			-			-			4,721,094
Total benefits and expenses		161,588,193			23,304,874			177,791,244			(7,408,845	)		355,275,466
Earnings before income taxes	$	14,195,546		$	6,093,696		$	14,087,620		$	-		$	34,376,862
Income tax expense		(4,034,979	)		(1,523,954	)		(3,127,627	)		-			(8,686,560	)
Net earnings	$	10,160,567		$	4,569,742		$	10,959,993		$	-		$	25,690,302
Identifiable assets	$	1,246,840,586		$	82,320,929		$	219,872,163		$	(93,174,569	)	$	1,455,859,109
Goodwill	$	2,765,570		$	2,488,213		$	-		$	-		$	5,253,783

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2022 and 2021

15) Business Segment Information (Continued)

	Year Ended December 31, 2021
	Life			Cemetery/						Intercompany
	Insurance			Mortuary			Mortgage			Eliminations			Consolidated
Revenues:
From external sources:
Revenue from customers	$	100,254,573		$	23,997,313		$	263,418,230			-		$	387,670,116
Net investment income		56,091,725			1,653,940			519,018			-			58,264,683
Gains on investments and other assets		4,554,528			1,511,965			198,641			-			6,265,134
Other than temporary impairments		(39,502	)		-			-			-			(39,502	)
Other revenues		2,152,531			100,255			16,282,325			-			18,535,111
Intersegment revenues:
Net investment income		7,569,875			314,001			599,115			(8,482,991	)		-
Total revenues		170,583,730			27,577,474			281,017,329			(8,482,991	)		470,695,542
Expenses:
Death, surrenders and other policy benefits		67,218,455			-			-			-			67,218,455
Increase in future policy benefits		26,263,312			-			-			-			26,263,312
Amortization of deferred policy and pre-need acquisition costs and value of business acquired		15,611,374			531,596			-			-			16,142,970
Selling, general and administrative expenses:
Commissions		3,514,498			1,917,899			112,854,072			-			118,286,469
Personnel		25,009,096			6,850,617			68,880,448			-			100,740,161
Advertising		1,160,640			570,924			4,894,854			-			6,626,418
Rent and rent related		733,726			109,318			6,399,243			-			7,242,287
Depreciation on property and equipment		806,543			479,005			650,065			-			1,935,613
Provision for loan loss reserve		-			-			-			-			-
Cost related to funding mortgage loans		-			-			10,541,570			-			10,541,570
Intersegment		497,113			113,062			671,107			(1,281,282	)		-
Other		12,075,374			5,224,178			35,766,430			-			53,065,982
Interest expense:
Intersegment		392,003			97,195			6,712,511			(7,201,709	)		-
Other		2,328,868			54,620			4,744,028			-			7,127,516
Costs of goods and services sold-mortuaries and cemeteries		-			3,704,014			-			-			3,704,014
Total benefits and expenses		155,611,002			19,652,428			252,114,328			(8,482,991	)		418,894,767
Earnings before income taxes	$	14,972,728		$	7,925,046		$	28,903,001		$	-		$	51,800,775
Income tax expense		(2,943,715	)		(1,975,787	)		(7,362,283	)		-			(12,281,785	)
Net earnings	$	12,029,013		$	5,949,259		$	21,540,718		$	-		$	39,518,990
Identifiable assets	$	1,236,406,558		$	73,432,116		$	328,600,841		$	(96,099,992	)	$	1,542,339,523
Goodwill	$	2,765,570		$	2,488,213		$	-		$	-		$	5,253,783

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2022 and 2021