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Fair Value of Financial Instruments (Tables)
 12 Months Ended
Dec. 31, 2022
Fair Value Disclosures [Abstract]  
Schedule of Fair Value Assets and Liabilities Measured on a Recurring Basis

The following table summarizes Level 1, 2 and 3 financial assets and financial liabilities measured at fair value on a recurring basis by their classification in the consolidated balance sheet at December 31, 2022.

 

   Total   Quoted Prices in Active Markets for Identical Assets
(Level 1)		   Significant Observable Inputs
(Level 2)		   Significant Unobservable Inputs
(Level 3)		 
Assets accounted for at fair value on a recurring basis                    
Fixed maturity securities available for sale  $345,858,492   $-   $344,422,973   $1,435,519 
Equity securities   11,682,526    11,682,526    -    - 
Loans held for sale   141,179,620    -    -    141,179,620 
Restricted assets (1)   1,217,308    -    1,217,308    - 
Restricted assets (2)   5,348,244    5,348,244    -    - 
Cemetery perpetual care trust investments (1)   254,731    -    254,731    - 
Cemetery perpetual care trust investments (2)   3,605,162    3,605,162    -    - 
Derivatives - loan commitments (3)   4,089,856    -    -    4,089,856 
Total assets accounted for at fair value on a recurring basis  $513,235,939   $20,635,932   $345,895,012   $146,704,995 
                     
Liabilities accounted for at fair value on a recurring basis                    
Derivatives - call options (4)  $(29,715)  $(29,715)  $-   $- 
Derivatives - put options (4)   (13,888)   (13,888)   -    - 
Derivatives - loan commitments (4)   (1,382,979)   -    -    (1,382,979)
Total liabilities accounted for at fair value on a recurring basis  $(1,426,582)  $(43,603)  $-   $(1,382,979)

 

 
(1)Fixed maturity securities available for sale
(2)Equity securities
(3)Included in other assets on the consolidated balance sheets
(4)Included in other liabilities and accrued expenses on the consolidated balance sheets

 

 

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2022 and 2021

 

17) Fair Value of Financial Instruments (Continued

 

The following table summarizes Level 1, 2 and 3 financial assets and financial liabilities measured at fair value on a recurring basis by their classification in the consolidated balance sheet at December 31, 2021.

 

   Total   Quoted Prices in Active Markets for Identical Assets
(Level 1)		   Significant Observable Inputs
(Level 2)		   Significant Unobservable Inputs
(Level 3)		 
Assets accounted for at fair value on a
recurring basis		                    
Fixed maturity securities available for sale  $259,287,603   $-   $257,264,255   $2,023,348 
Equity securities   11,596,414    11,596,414    -    - 
Loans held for sale   302,776,827    -    -    302,776,827 
Restricted assets (1)   1,601,688    -    1,601,688    - 
Restricted assets (2)   3,603,822    3,603,822    -    - 
Cemetery perpetual care trust investments (1)   784,765    -    784,765    - 
Cemetery perpetual care trust investments (2)   3,302,480    3,302,480    -    - 
Derivatives - loan commitments (3)   8,563,410    -    -    8,563,410 
Total assets accounted for at fair value on a recurring basis  $591,517,009   $18,502,716   $259,650,708   $313,363,585 
                     
Liabilities accounted for at fair value on a recurring basis                    
Derivatives - call options (4)  $(50,936)  $(50,936)  $-   $- 
Derivatives - put options (4)   (4,493)   (4,493)   -    - 
Derivatives - loan commitments (4)   (1,547,895)   -    -    (1,547,895)
Total liabilities accounted for at fair value on a recurring basis  $(1,603,324)  $(55,429)  $-   $(1,547,895)

 

 
(1)Fixed maturity securities available for sale
(2)Equity securities
(3)Included in other assets on the consolidated balance sheets
(4)Included in other liabilities and accrued expenses on the consolidated balance sheets
Assets and Liabilities Measured at Fair Value on A Recurring Basis

For Level 3 assets and liabilities measured at fair value on a recurring basis as of December 31, 2022, the significant unobservable inputs used in the fair value measurements were as follows:

 

          Significant  Range of Inputs     
   Fair Value at   Valuation  Unobservable  Minimum   Maximum   Weighted 
   12/31/2022   Technique  Input(s)  Value   Value   Average 
Loans held for sale  $141,179,620   Market approach  Investor contract pricing as a percentage of unpaid principal balance   69.9%   106.1%   99.8%
                           
Derivatives - loan commitments (net)   2,706,877   Market approach  Pull-through rate   65.0%   95.0%   82.2%
           Initial-Value   N/A    N/A    N/A 
           Servicing   0 bps    153 bps    73 bps 
                           
Fixed maturity securities available for sale   1,435,519   Broker quotes  Pricing quotes  $100.00   $111.11   $104.97 

 

 

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2022 and 2021

 

17) Fair Value of Financial Instruments (Continued)

 

For Level 3 assets and liabilities measured at fair value on a recurring basis as of December 31, 2021, the significant unobservable inputs used in the fair value measurements were as follows:

 

          Significant  Range of Inputs     
   Fair Value at   Valuation  Unobservable  Minimum   Maximum   Weighted 
   12/31/2021   Technique  Input(s)  Value   Value   Average 
Loans held for sale  $302,776,827   Market approach  Investor contract pricing as a percentage of unpaid principal balance   95.0%   109.0%   103.0%
                           
Derivatives - loan commitments (net)   7,015,515   Market approach  Pull-through rate   66.0%   95.0%   81.0%
           Initial-Value   N/A    N/A    N/A 
           Servicing   0 bps    148 bps    61 bps 
                           
Fixed maturity securities available for sale   2,023,348   Broker quotes  Pricing quotes  $96.87   $111.11   $106.73 
Schedule of Changes in the Consolidated Balance Sheet Line Items Measured Using Level 3 Inputs

The following table is a summary of changes in the consolidated balance sheet line items measured using level 3 inputs:

 

   Net Derivatives Loan Commitments   Loans Held for Sale   Fixed Maturity Securities Available for Sale 
             
Balance - December 31, 2021  $7,015,515   $302,776,827   $2,023,348 
Originations/purchases   -    3,373,554,484    - 
Sales, maturities and paydowns   -    (3,549,405,402)   (528,980)
Transfer to mortgage loans held for investment   -    (51,691,213)   - 
Total gains (losses):               
Included in earnings   (4,308,638)(1)   65,944,924(1)   1,957(2)
Included in other comprehensive income   -    -    (60,806)
                
Balance - December 31, 2022  $2,706,877   $141,179,620   $1,435,519 

 

(1)As a component of mortgage fee income on the consolidated statements of earnings
(2)As a component of net investment income on the consolidated statements of earnings

 

The following table is a summary of changes in the consolidated balance sheet line items measured using level 3 inputs:

 

   Net Derivatives Loan Commitments   Loans Held for Sale   Fixed Maturity Securities Available for Sale 
             
Balance - December 31, 2020  $10,128,610   $422,772,418   $2,201,175 
Originations/purchases   -    5,611,189,587    - 
Sales, maturities and paydowns   -    (5,900,076,766)   (45,700)
Transfer to mortgage loans held for investment   -    (201,951)   - 
Total gains (losses):               
Included in earnings   (3,113,095)(1)    169,093,539 (1)   3,674(2)
Included in other comprehensive income   -    -    (135,801)
                
Balance - December 31, 2021  $7,015,515   $302,776,827   $2,023,348 

 

(1)As a component of mortgage fee income on the consolidated statements of earnings
(2)As a component of net investment income on the consolidated statements of earnings
Schedule of Fair Value Assets Measured on a Nonrecurring Basis

The following table summarize Level 1, 2 and 3 financial assets and financial liabilities measured at fair value on a nonrecurring basis by their classification in the consolidated balance sheet at December 31, 2022.

 

   Total   Quoted Prices in Active Markets for Identical Assets
(Level 1)		   Significant Observable Inputs
(Level 2)		   Significant Unobservable Inputs
(Level 3)		 
Assets accounted for at fair value on a
nonrecurring basis		                    
Impaired mortgage loans held for investment  $794,224   $       -   $          -   $794,224 
Total assets accounted for at fair value on
a nonrecurring basis		  $794,224   $-   $-   $794,224 

 

The following table summarize Level 1, 2 and 3 financial assets and financial liabilities measured at fair value on a nonrecurring basis by their classification in the consolidated balance sheet at December 31, 2021.

 

   Total   Quoted Prices in Active Markets for Identical Assets
(Level 1)		   Significant Observable Inputs
(Level 2)		   Significant Unobservable Inputs
(Level 3)		 
Assets accounted for at fair value on a
nonrecurring basis		                    
Impaired mortgage loans held for investment  $851,903   $-   $-   $851,903 
Impaired real estate held for sale   2,000,000             -                -    2,000,000 
Total assets accounted for at fair value on
a nonrecurring basis		  $2,851,903   $-   $-   $2,851,903 
Schedule of Financial Instruments Carried at Other Than Fair Value

The carrying values and estimated fair values for such financial instruments, and their corresponding placement in the fair value hierarchy, are summarized as follows as of December 31, 2022:

 

   Carrying Value   Level 1   Level 2   Level 3   Total Estimated Fair Value 
Assets                         
Mortgage loans held for investment                         
Residential  $90,290,776   $-   $-   $88,575,293   $88,575,293 
Residential construction   172,139,077    -    -    172,139,077    172,139,077 
Commercial   45,694,074         -          -    44,079,537    44,079,537 
Mortgage loans held for investment, net  $308,123,927   $-   $-   $304,793,907   $304,793,907 
Policy loans   13,095,473    -    -    13,095,473    13,095,473 
Insurance assignments, net (1)   45,332,585    -    -    45,332,585    45,332,585 
Restricted assets (2)   1,731,469    -    -    1,731,469    1,731,469 
Cemetery perpetual care trust investments (2)   1,506,517    -    -    1,506,517    1,506,517 
Mortgage servicing rights, net   3,039,765    -    -    3,927,877    3,927,877 
                          
Liabilities                         
Bank and other loans payable  $(161,712,804)  $-   $-   $(161,712,804)  $(161,712,804)
Policyholder account balances (3)   (41,146,171)   -    -    (42,181,089)   (42,181,089)
Future policy benefits - annuities (3)   (106,637,094)   -    -    (126,078,031)   (126,078,031)

 

 
(1)Included in other investments and policy loans on the consolidated balance sheets
(2)Mortgage loans held for investment
(3)Included in future policy benefits and unpaid claims on the consolidated balance sheets

 

 

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2022 and 2021

 

17) Fair Value of Financial Instruments (Continued)

 

The carrying values and estimated fair values for such financial instruments, and their corresponding placement in the fair value hierarchy, are summarized as follows as of December 31, 2021:

 

   Carrying Value   Level 1   Level 2   Level 3   Total Estimated Fair Value 
Assets                         
Mortgage loans held for investment                         
Residential  $51,396,172   $-   $-   $55,159,167   $55,159,167 
Residential construction   174,691,408    -    -    174,691,408    174,691,408 
Commercial   51,218,466         -          -    51,008,709    51,008,709 
Mortgage loans held for investment, net  $277,306,046   $-   $-   $280,859,284   $280,859,284 
Policy loans   13,478,214    -    -    13,478,214    13,478,214 
Insurance assignments, net (1)   46,946,590    -    -    46,946,590    46,946,590 
Restricted assets (2)   2,732,320    -    -    2,732,320    2,732,320 
Cemetery perpetual care trust investments (2)   1,823,533    -    -    1,823,533    1,823,533 
Mortgage servicing rights, net   53,060,455    -    -    68,811,809    68,811,809 
                          
Liabilities                         
Bank and other loans payable  $(251,286,927)  $-   $-   $(251,286,927)  $(251,286,927)
Policyholder account balances (3)   (42,939,055)   -    -    (35,855,934)   (35,855,934)
Future policy benefits - annuities (3)   (107,992,830)   -    -    (116,215,717)   (116,215,717)

 

 
(1)Included in other investments and policy loans on the consolidated balance sheets
(2)Mortgage loans held for investment
(3)Included in future policy benefits and unpaid claims on the consolidated balance sheets