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22) Correction of Errors

12 Months Ended

Dec. 31, 2017

The accompanying Consolidated Financial Statements include the restatement of the Company’s previously filed consolidated balance sheet and the related consolidated statements of earnings, shareholders’ equity and cash flows for the fiscal year ended December 31, 2016. For the revised quarterly results of operations for the fiscal year ended December 31, 2016, see “Impact of Restatement Adjustments on Quarterly Financial Statements (Unaudited)” in Note 23 of the accompanying Consolidated Financial Statements.

Immaterial Error in Accounting for Loan Commitments: Subsequent to the issuance of the company’s 2015 consolidated financial statements, the Company identified an error in the accounting for its loan commitments (“Adjustment A”). The Company corrected the presentation of the changes in fair value of its loan commitments to present them as a component of current earnings instead of as a component of other comprehensive income, as previously reported. The Company’s management has concluded that the effect of the correction is not material to any previously issued Consolidated Financial Statements.

Subsequent to the issuance of the company’s 2016 Consolidated Financial Statements, the Company identified the following errors, (“Adjustments B”):

Material Error in Accounting for Repurchase Agreements: The Company has concluded it should account for its Repurchase Agreements with unaffiliated banks as "On-Balance-Sheet" transactions, rather than as "Off-Balance-Sheet" as previously reported. Accordingly, the Company will reflect any outstanding loans as Loans Held for Sale and the corresponding debt as a Bank Loan Payable. The Company has corrected its sale accounting practice to defer revenue and costs on loans that remain as Held for Sale. The Company will recognize these deferred items at the time the loan is purchased by the ultimate investor.

Material Error in Accounting for Tax Valuation Allowance: The Company determined that it should have reversed its valuation allowance in its entirety in 2012 when the Company no longer qualified for the small life insurance company deduction, rather than in other periods as previously reported.

Other Immaterial Corrections and Reclassifications: In addition, the Company has recorded the following additional corrections in the accompanying consolidated financial statements:

Reclassification of Receivables to Loans Held for Sale
Reclassification of the Provision for Loan Loss Reserve to net against Mortgage Fee Income
Correction to Future Policy Benefits to reverse a Deferred Profit Liability

The tables below present the impact of the restatement on the Company’s consolidated balance sheets for the periods presented:

	As of December 31, 2016
	As Originally Reported	Adjustment (A)	As Previously Reported	Adjustments (B)	As Restated
Equity securities, available for sale, at estimated fair value	$ 10,573,356	$ -	$ 10,573,356	$ (662,100)	$ 9,911,256
Mortgage loans held for investment	149,181,578	-	149,181,578	(190,846)	148,990,732
Policy loans and other investments	40,937,146	-	40,937,146	662,100	41,599,246
Loans held for sale (formerly called Mortgage loans sold to investors)	82,491,091	-	82,491,091	106,648,741	189,139,832
Receivables, net	18,870,119	-	18,870,119	(10,459,573)	8,410,546
Other assets	6,891,468	-	6,891,468	2,418,572	9,310,040
Total Assets	854,004,671	-	854,004,671	98,416,894	952,421,565
Future policy benefits and unpaid claims	585,610,063	-	585,610,063	(1,542,371)	584,067,692
Bank and other loans payable	53,718,548	-	53,718,548	98,422,131	152,140,679
Other liabilities and accrued expenses	33,950,503	-	33,950,503	742,982	34,693,485
Income taxes	27,904,294	-	27,904,294	(3,585,425)	24,318,869
Total liabilities	725,825,117	-	725,825,117	94,037,317	819,862,434
Accumulated other comprehensive income, net of taxes	264,822	-	264,822	-	264,822
Retained earnings	63,029,627	-	63,029,627	4,379,577	67,409,204
Total stockholders' equity	128,179,554	-	128,179,554	4,379,577	132,559,131
Total Liabilities and Stockholders' Equity	854,004,671	-	854,004,671	98,416,894	952,421,565

	As of January 1, 2016
	As Originally Reported	Adjustment (A)	As Previously Reported	Adjustments (B)	As Restated
Loans held for sale (formerly called Mortgage loans sold to investors)	$ 115,286,455	$ -	$ 115,286,455	$ 96,166,551	$ 211,453,006
Receivables, net	16,026,100	-	16,026,100	(9,965,106)	6,060,994
Other assets	7,100,869	-	7,100,869	4,338,404	11,439,273
Total Assets	749,933,317	-	749,933,317	90,539,849	840,473,166
Future policy benefits and unpaid claims	517,177,388	-	517,177,388	(1,388,134)	515,789,254
Bank and other loans payable	40,908,915	-	40,908,915	90,096,699	131,005,614
Income taxes	25,052,059	-	25,052,059	(4,639,170)	20,412,889
Total liabilities	638,687,092	-	638,687,092	84,069,395	722,756,487
Accumulated other comprehensive income (loss), net of taxes	1,533,828	(2,033,186)	(499,358)	-	(499,358)
Retained earnings	52,021,764	2,033,186	54,054,950	6,470,454	60,525,404
Total stockholders' equity	111,246,225	-	111,246,225	6,470,454	117,716,679
Total Liabilities and Stockholders' Equity	749,933,317	-	749,933,317	90,539,849	840,473,166

The tables below present the impact of the restatement on the Company’s consolidated statements of earnings for the period presented:

	Year Ended December 31, 2016
	As Originally Reported	Adjustment (A)	As Previously Reported	Adjustments (B)	As Restated
Net investment income	$ 37,582,444	$ -	$ 37,582,444	$ (5,603,843)	$ 31,978,601
Mortgage fee income	186,416,311	-	186,416,311	2,730,328	189,146,639
Total revenues	307,208,416	-	307,208,416	(2,873,515)	304,334,901
Increase in future policy benefits	21,476,432	-	21,476,432	(154,237)	21,322,195
Commissions	87,762,583	-	87,762,583	871,911	88,634,494
Provision for loan loss reserve	4,688,754	-	4,688,754	(2,988,754)	1,700,000
Cost related to funding mortgage loans	8,756,791	-	8,756,791	434,697	9,191,488
Total benefits and expenses	286,468,053	-	286,468,053	(1,836,383)	284,631,670
Earnings before income taxes	20,740,363	-	20,740,363	(1,037,132)	19,703,231
Income tax expense	(6,460,859)	-	(6,460,859)	(1,053,745)	(7,514,604)
Net earnings	14,279,504	-	14,279,504	(2,090,877)	12,188,627
Net earnings per common share (1)	$0.92	$0.00	$0.92	($0.13)	$0.78
Net earnings per common share assuming dilution (1)	$0.90	$0.00	$0.90	($0.13)	$0.77

(1) Earnings per share amounts have been adjusted retroactively for the effect of annual stock dividends.

The tables below present the impact of the restatement on the Company’s consolidated statements of comprehensive income for the period presented:

	Year Ended December 31, 2016
	As Originally Reported	Adjustment (A)	As Previously Reported	Adjustments (B)	As Restated
Net earnings	$ 14,279,504	$ -	$ 14,279,504	$ (2,090,877)	$ 12,188,627
Net unrealized gains on derivative instruments	6,490	-	6,490	-	6,490
Other comprehensive gain	764,180	-	764,180	-	764,180

The tables below present the impact of the restatement on the Company’s consolidated statements of cash flows for the period presented:

	Year Ended December 31, 2016
	As Originally Reported	Adjustment (A)	As Previously Reported	Adjustments (B)	As Restated
Net earnings	$ 14,279,504	$ -	$ 14,279,504	$ (2,090,877)	$ 12,188,627
Provision for deferred and other income taxes	5,076,899	-	5,076,899	1,053,745	6,130,644
Loans originated for sale	-	-	-	(3,098,710,299)	(3,098,710,299)
Proceeds from loans sold	-	-	-	3,246,127,714	3,246,127,714
Net gains on loans sold	-	-	-	(137,682,984)	(137,682,984)
Future life and other benefits	18,143,832	-	18,143,832	(154,237)	17,989,595
Receivables for mortgage loans sold	20,216,621	-	20,216,621	(20,216,621)	-
Other operating assets and liabilities	(8,473,503)	-	(8,473,503)	3,348,127	(5,125,376)
Net cash provided by (used in) operating activities	43,860,446	-	43,860,446	(8,325,432)	35,535,014
Net change in warehouse line borrowings	-		-	8,325,432	8,325,432
Net cash provided by financing activities	10,664,656	-	10,664,656	8,325,432	18,990,088