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Cemetery Perpetual Care Trust Investments and Obligation and Restricted Assets (Tables)
 9 Months Ended
Sep. 30, 2023
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]  
Schedule of Investments

The Company’s investments as of September 30, 2023 are summarized as follows:

 

   Amortized Cost   Gross Unrealized Gains   Gross Unrealized Losses (1)   Allowance for Credit Losses   Estimated Fair Value 
September 30, 2023:                         
Fixed maturity securities, available for sale, at estimated fair value:                         
U.S. Treasury securities and obligations of U.S. Government agencies  $108,680,913   $5,981   $(2,498,554)  $-   $106,188,340 
                          
Obligations of states and political subdivisions   6,649,289    218    (586,789)   -    6,062,718 
                          
Corporate securities including public utilities   231,814,067    600,075    (15,412,932)   (211,500)   216,789,710 
                          
Mortgage-backed securities   32,889,293    13,422    (5,755,224)   -    27,147,491 
                          
Redeemable preferred stock   250,000    10,000    -    -    260,000 
                          
Total fixed maturity securities available for sale  $380,283,562   $629,696   $(24,253,499)  $(211,500)  $356,448,259 
                          
Equity securities at estimated fair value:                         
                          
Common stock:                         
                          
Industrial, miscellaneous and all other  $10,470,974   $2,684,920   $(846,350)       $12,309,544 
                          
Total equity securities at estimated fair value  $10,470,974   $2,684,920   $(846,350)       $12,309,544 
                          
Mortgage loans held for investment at amortized cost:                         
Residential  $96,591,643                     
Residential construction   101,295,751                     
Commercial   55,991,027                     
Less: Unamortized deferred loan fees, net   (1,629,546)                    
Less: Allowance for credit losses   (2,612,944)                    
Less: Net discounts   (328,833)                    
                          
Total mortgage loans held for investment  $249,307,098                     
                          
Real estate held for investment - net of accumulated depreciation:                         
Residential  $38,034,997                     
Commercial   146,656,466                     
                          
Total real estate held for investment  $184,691,463                     
                          
Real estate held for sale:                         
Residential  $2,285,707                     
Commercial   2,478,660                     
                          
Total real estate held for sale  $4,764,367                     
                          
Other investments and policy loans at amortized cost:                         
Policy loans  $13,154,845                     
Insurance assignments   42,624,001                     
Federal Home Loan Bank stock (2)   2,699,300                     
Other investments   9,330,532                     
Less: Allowance for credit losses for insurance assignments   (1,555,261)                    
                          
Total other investments and policy loans  $66,253,417                     
                          
Accrued investment income  $12,266,695                     
                          
Total investments  $886,040,843                     

 

 

 

(1)Gross unrealized losses are net of allowance for credit losses
(2)Includes $978,600 of Membership stock and $1,720,700 of Activity stock attributable to short-term borrowings and letters of credit.

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2023 (Unaudited)

 

3) Investments (Continued)

 

The Company’s investments as of December 31, 2022 are summarized as follows:

 

   Amortized Cost   Gross Unrealized Gains   Gross Unrealized Losses   Estimated Fair Value 
December 31, 2022:                    
Fixed maturity securities, available for sale, at estimated fair value:                    
U.S. Treasury securities and obligations of U.S. Government agencies  $93,182,210   $180,643   $(2,685,277)  $90,677,576 
                     
Obligations of states and political subdivisions   6,675,071    13,869    (458,137)   6,230,803 
                     
Corporate securities including public utilities   229,141,544    1,909,630    (11,930,773)   219,120,401 
                     
Mortgage-backed securities   33,501,686    168,700    (4,100,674)   29,569,712 
                     
Redeemable preferred stock   250,000    10,000    -    260,000 
                     
Total fixed maturity securities available for sale  $362,750,511   $2,282,842   $(19,174,861)  $345,858,492 
                     
Equity securities at estimated fair value:                    
                     
Common stock:                    
                     
Industrial, miscellaneous and all other  $9,942,265   $2,688,375   $(948,114)  $11,682,526 
                     
Total equity securities at estimated fair value  $9,942,265   $2,688,375   $(948,114)  $11,682,526 
                     
Mortgage loans held for investment at amortized cost:                    
Residential  $93,355,623                
Residential construction   172,516,125                
Commercial   46,311,955                
Less: Unamortized deferred loan fees, net   (1,746,605)               
Less: Allowance for credit losses   (1,970,311)               
Less: Net discounts   (342,860)               
                     
Total mortgage loans held for investment  $308,123,927                
                     
Real estate held for investment - net of accumulated depreciation:                    
Residential  $38,437,960                
Commercial   152,890,656                
                     
Total real estate held for investment  $191,328,616                
                     
Real estate held for sale:                    
Residential  $11,010,029                
Commercial   151,553                
                     
Total real estate held for sale  $11,161,582                
                     
Other investments and policy loans at amortized cost:                    
Policy loans  $13,095,473                
Insurance assignments   46,942,536                
Federal Home Loan Bank stock (1)   2,600,300                
Other investments   9,479,798                
Less: Allowance for credit losses for insurance assignments   (1,609,951)               
                     
Total other investments and policy loans  $70,508,156                
                     
Accrued investment income  $10,299,826                
                     
Total investments  $948,963,125                

 

 

 

(1) Includes $938,500 of Membership stock and $1,661,800 of Activity stock attributable to short-term borrowings and letters of credit.
Schedule of Fair Value of Fixed Maturity Securities

 

   Unrealized Losses for Less than Twelve Months   Fair Value   Unrealized Losses for More than Twelve Months   Fair Value   Total Unrealized Loss   Combined Fair Value 
September 30, 2023                              
U.S. Treasury Securities And Obligations of U.S. Government Agencies  $331,740   $36,115,986   $2,166,815   $69,967,155   $2,498,555   $106,083,141 
Obligations of States and Political Subdivisions   155,458    1,469,753    431,331    4,142,748    586,789    5,612,501 
Corporate Securities   4,092,910    86,409,480    11,320,021    106,047,158    15,412,931    192,456,638 
Mortgage and other asset-backed securities   123,790    4,627,445    5,631,434    22,003,452    5,755,224    26,630,897 
Totals  $4,703,898   $128,622,664   $19,549,601   $202,160,513   $24,253,499   $330,783,177 
                               
December 31, 2022                              
U.S. Treasury Securities And Obligations of U.S. Government Agencies  $2,685,277   $79,400,753   $-   $-   $2,685,277   $79,400,753 
Obligations of States and Political Subdivisions   378,067    5,467,910    80,070    429,020    458,137    5,896,930 
Corporate Securities   10,935,114    162,995,969    995,659    5,781,822    11,930,773    168,777,791 
Mortgage and other asset-backed securities   2,884,731    19,909,907    1,215,943    6,978,745    4,100,674    26,888,652 
Totals  $16,883,189   $267,774,539   $2,291,672   $13,189,587   $19,174,861   $280,964,126 
Schedule of Investments Classified by Contractual Maturity Date

The table below presents the amortized cost and the estimated fair value of fixed maturity securities available for sale as of September 30, 2023, by contractual maturity. Actual or 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  $6,818,008   $6,812,398 
Due in 2-5 years   160,874,392    155,802,499 
Due in 5-10 years   93,763,663    88,297,470 
Due in more than 10 years   85,688,206    78,128,401 
Mortgage-backed securities   32,889,293    27,147,491 
Redeemable preferred stock   250,000    260,000 
Total  $380,283,562   $356,448,259 
Restricted Assets [Member]  
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]  
Schedule of Fair Value of Fixed Maturity Securities

The table below summarizes unrealized losses on fixed maturity securities available for sale that were carried at estimated fair value as of September 30, 2023 and December 31, 2022. The unrealized losses were primarily related to interest rate fluctuations. 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 
September 30, 2023                              
U.S. Treasury securities and obligations of U.S. Government agencies  $4,002   $243,232   $-   $-   $4,002   $243,232 
Obligations of states and political subdivisions   3,189    71,811    16,337    580,227    19,526    652,038 
Corporate securities including public utilities   1,016    101,649    8,431    294,075    9,447    395,724 
Total unrealized losses  $8,207   $416,692   $24,768   $874,302   $32,975   $1,290,994 
                               
December 31, 2022                              
Obligations of states and political subdivisions  $11,891   $760,255   $3,469   $58,072   $15,360   $818,327 
Corporate securities including public utilities   3,016    198,755    -    -    3,016    198,755 
Total unrealized losses  $14,907   $959,010   $3,469   $58,072   $18,376   $1,017,082 
Schedule of Restricted Assets in Cemetery and Mortuary Endowment Care and Pre need Merchandise Funds

Restricted assets as of September 30, 2023, are summarized as follows:

 

   Amortized Cost   Gross Unrealized Gains   Gross Unrealized Losses   Allowance for Credit Losses   Estimated Fair Value 
September 30, 2023:                         
Fixed maturity securities, available for sale, at estimated fair value:                         
U.S. Treasury securities and obligations of U.S. Government agencies  $389,641   $924   $(4,002)  $-   $386,563 
Obligations of states and political subdivisions   771,564    201    (19,526)   -    752,239 
Corporate securities including public utilities   405,171    -    (9,447)   -    395,724 
Total fixed maturity securities available for sale  $1,566,376   $1,125   $(32,975)  $-   $1,534,526 
                          
Equity securities at estimated fair value:                         
Common stock:                         
Industrial, miscellaneous and all other  $6,011,816   $739,197   $(438,403)       $6,312,610 
Total equity securities at estimated fair value  $6,011,816   $739,197   $(438,403)       $6,312,610 
                          
Mortgage loans held for investment at amortized cost:                         
Residential construction  $1,116,202                     
Less: Allowance for credit losses   (2,232)                    
Total mortgage loans held for investment  $1,113,970                     
                          
Cash and cash equivalents (1)  $10,946,379                     
                          
Total restricted assets  $19,907,485                     

 

 

(1) Including cash and cash equivalents of $8,224,592 for the life insurance and mortgage segments.

 

Restricted assets as of December 31, 2022, are summarized as follows:

 

   Amortized Cost   Gross Unrealized Gains   Gross Unrealized Losses   Estimated Fair Value 
December 31, 2022:                    
Fixed maturity securities, available for sale, at estimated fair value:                    
Obligations of states and political subdivisions  $1,033,047   $866   $(15,360)  $1,018,553 
Corporate securities including public utilities   201,771    -    (3,016)   198,755 
Total fixed maturity securities available for sale  $1,234,818   $866   $(18,376)  $1,217,308 
                     
Equity securities at estimated fair value:                    
Common stock:                    
Industrial, miscellaneous and all other  $4,955,360   $703,049   $(310,165)  $5,348,244 
Total equity securities at estimated fair value  $4,955,360   $703,049   $(310,165)  $5,348,244 
                     
Mortgage loans held for investment at amortized cost:                    
Residential construction  $1,731,469                
                     
Cash and cash equivalents (1)  $10,638,034                
                     
Total restricted assets  $18,935,055                

 

 

(1) Including cash and cash equivalents of $8,527,620 for the life insurance and mortgage segments.
Cemetery Perpectual Care Oblication [Member]  
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]  
Schedule of Investments

The components of the cemetery perpetual care investments and obligation as of September 30, 2023, are as follows:

 

   Amortized Cost   Gross Unrealized Gains   Gross Unrealized Losses   Allowance for Credit Losses   Estimated Fair Value 
September 30, 2023:                         
Fixed maturity securities, available for sale, at estimated fair value:                         
U.S. Treasury securities and obligations of U.S. Government agencies  $208,568   $668   $(2,297)  $-   $206,939 
Obligations of states and political subdivisions   129,509    -    (9,169)   -    120,340 
Corporate securities including public utilities   41,086    -    (973)   -    40,113 
Total fixed maturity securities available for sale  $379,163   $668   $(12,439)  $-   $367,392 
                          
Equity securities at estimated fair value:                         
Common stock:                         
Industrial, miscellaneous and all other  $3,507,720   $624,037   $(275,952)       $3,855,805 
Total equity securities at estimated fair value  $3,507,720   $624,037   $(275,952)       $3,855,805 
                          
Mortgage loans held for investment at amortized cost:                         
Residential construction  $1,966,520                     
Less: Allowance for credit losses   (3,933)                    
Total mortgage loans held for investment  $1,962,587                     
                          
Real estate held for investment: Residential  $30,632                     
                          
Cash and cash equivalents  $1,424,574                     
                          
Total cemetery perpetual care trust investments  $7,640,990                     
                          
Cemetery perpetual care obligation  $(5,265,166)                    
                          
Trust investments in excess of trust obligations  $2,375,824                     

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2023 (Unaudited)

 

15) Cemetery Perpetual Care Trust Investments and Obligations and Restricted Assets (Continued)

 

The components of the cemetery perpetual care investments and obligation as of December 31, 2022, are as follows:

 

   Amortized Cost   Gross Unrealized Gains   Gross Unrealized Losses   Estimated Fair Value 
December 31, 2022:                    
Fixed maturity securities, available for sale, at estimated fair value:                    
U.S. Treasury securities and obligations of U.S. Government agencies  $89,004   $42   $(38)  $89,008 
Obligations of states and political subdivisions   174,201    -    (8,478)   165,723 
Total fixed maturity securities available for sale  $263,205   $42   $(8,516)  $254,731 
                     
Equity securities at estimated fair value:                    
Common stock:                    
Industrial, miscellaneous and all other  $3,195,942   $584,383   $(175,163)  $3,605,162 
Total equity securities at estimated fair value  $3,195,942   $584,383   $(175,163)  $3,605,162 
Mortgage loans held for investment at amortized cost:                     
Residential construction  $1,506,517                
                     
Real estate held for investment: Residential  $(16,178)               
                     
Cash and cash equivalents  $1,925,978                
                     
Total cemetery perpetual care trust investments  $7,276,210                
                     
Cemetery perpetual care obligation  $(5,099,542)               
                     
Trust investments in excess of trust obligations  $2,176,668                
Schedule of Fair Value of Fixed Maturity Securities

The table below summarizes unrealized losses on fixed maturity securities available for sale that were carried at estimated fair value as of September 30, 2023 and December 31, 2022. The unrealized losses were primarily related to interest rate fluctuations. 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 
September 30, 2023                              
U.S. Treasury securities and obligations of U.S. Government agencies  $2,297   $139,633   $-   $-   $2,297   $139,633 
Obligations of states and political subdivisions   -    -    9,169    120,340    9,169    120,340 
Corporate securities including public utilities   -    -    973    40,113    973    40,113 
Total unrealized losses  $2,297   $139,633   $10,142   $160,453   $12,439   $300,086 
                               
December 31, 2022                              
U.S. Treasury securities and obligations of U.S. Government agencies  $38   $59,392   $-   $-   $38   $59,392 
Obligations of states and political subdivisions   1,845    94,612    6,633    71,112    8,478    165,724 
Total unrealized losses  $1,883   $154,004   $6,633   $71,112   $8,516   $225,116 
Schedule of Investments Classified by Contractual Maturity Date

The table below presents the amortized cost and estimated fair value of fixed maturity securities available for sale as of September 30, 2023, by contractual maturity. 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   Estimated Fair 
   Cost   Value 
Due in 1 year  $29,573   $30,000 
Due in 2-5 years   254,242    245,011 
Due in 5-10 years   41,086    40,113 
Due in more than 10 years   54,262    52,268 
Total  $379,163   $367,392 
Restricted Assets [Member]  
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]  
Schedule of Investments Classified by Contractual Maturity Date

The table below presents the amortized cost and estimated fair value of fixed maturity securities available for sale as of September 30, 2023, by contractual maturity. 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   Estimated Fair 
   Cost   Value 
Due in 1 year  $-   $- 
Due in 2-5 years   702,873    692,458 
Due in 5-10 years   111,301    110,090 
Due in more than 10 years   752,202    731,978 
Total  $1,566,376   $1,534,526