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Investments (Tables)
 12 Months Ended
Dec. 31, 2021
Investments, Debt and Equity Securities [Abstract]  
Schedule of Investments

The Company’s investments as of December 31, 2021 are summarized as follows:

 

   Amortized Cost   Gross Unrealized Gains   Gross Unrealized Losses   Estimated Fair Value 
December 31, 2021:                    
Fixed maturity securities, available for sale, at estimated fair value:                    
U.S. Treasury securities and obligations of U.S. Government agencies  $22,307,736   $578,567   $-   $22,886,303 
                     
Obligations of states and political subdivisions   4,649,917    212,803    (1,989)   4,860,731 
                     
Corporate securities including public utilities   174,711,061    21,791,370    (353,668)   196,148,763 
                     
Mortgage-backed securities   34,365,382    905,159    (161,332)   35,109,209 
                     
Redeemable preferred stock   269,214    13,383    -    282,597 
                     
Total fixed maturity securities available for sale  $236,303,310   $23,501,282   $(516,989)  $259,287,603 
                     
Equity securities at estimated fair value:                    
                     
Common stock:                    
                     
Industrial, miscellaneous and all other  $8,275,772   $3,626,444   $(305,802)  $11,596,414 
                     
Total equity securities at estimated fair value  $8,275,772   $3,626,444   $(305,802)  $11,596,414 
                     
Mortgage loans held for investment at amortized cost:                    
Residential  $53,533,712                
Residential construction   175,117,783                
Commercial   51,683,022                
Less: Unamortized deferred loan fees, net   (918,586)               
Less: Allowance for loan losses   (1,699,902)               
Less: Net discounts   (409,983)               
                     
Total mortgage loans held for investment  $277,306,046                
                     
Real estate held for investment - net of accumulated depreciation:                    
Residential  $41,972,462                
Commercial   155,393,335                
                     
Total real estate held for investment  $197,365,797                
                     
Real estate held for sale:                    
Residential  $1,190,602                
Commercial   2,540,698                
                     
Total real estate held for sale  $3,731,300                
                     
Other investments and policy loans at amortized cost:                    
Policy loans  $13,478,214                
Insurance assignments   48,632,808                
Federal Home Loan Bank stock (1)   2,547,100                
Other investments   4,983,251                
Less: Allowance for doubtful accounts   (1,686,218)               
                     
Total policy loans and other investments  $67,955,155                
                     
Accrued investment income  $6,313,012                
                     
Total investments  $823,555,327                

 

(1) Includes $905,700 of Membership stock and $1,641,400 of Activity stock due to short-term advances and letters of credit.

 

 

 

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

 

2) Investments (Continued)

 

The Company’s investments as of December 31, 2020 are summarized as follows:

 

   Amortized Cost   Gross Unrealized Gains   Gross Unrealized Losses   Estimated Fair Value 
December 31, 2020:                    
Fixed maturity securities, available for sale, at estimated fair value:                    
U.S. Treasury securities and obligations of U.S. Government agencies  $42,381,805   $1,358,562   $-   $43,740,367 
                     
Obligations of states and political subdivisions   5,383,762    312,214     (1,261)   5,694,715 
                     
Corporate securities including public utilities   186,067,912    27,216,496    (681,478)   212,602,930 
                     
Mortgage-backed securities   31,047,791    1,565,377    (267,106)   32,346,062 
                     
Redeemable preferred stock   269,214    3,391    -    272,605 
                     
Total fixed maturity securities available for sale  $265,150,484   $30,456,040   $(949,845)  $294,656,679 
                     
Equity securities at estimated fair value:                    
                     
Common stock:                    
                     
Industrial, miscellaneous and all other  $9,698,490   $2,376,156   $(750,407)  $11,324,239 
                     
Total equity securities at estimated fair value  $9,698,490   $2,376,156   $(750,407)  $11,324,239 
                     
Mortgage loans held for investment at amortized cost:                    
Residential  $95,822,448                
Residential construction   111,111,777                
Commercial   46,836,866                
Less: Unamortized deferred loan fees, net   (1,161,132)               
Less: Allowance for loan losses   (2,005,127)               
Less: Net discounts   (1,260,896)               
                     
Total mortgage loans held for investment  $249,343,936                
                     
Real estate held for investment - net of accumulated depreciation:                    
Residential  $24,843,743                
Commercial   106,840,710                
                     
Total real estate held for investment  $131,684,453                
                     
Real estate held for sale:                    
Residential  $3,478,254                
Commercial   4,400,553                
                     
Total real estate held for sale  $7,878,807                
                     
Other investments and policy loans at amortized cost:                    
Policy loans  $14,171,589                
Insurance assignments   53,231,131                
Federal Home Loan Bank stock (1)   2,506,600                
Other investments   5,432,816                
Less: Allowance for doubtful accounts   (1,645,475)               
                     
Total policy loans and other investments  $73,696,661                
                     
Accrued investment income  $5,360,523                
                     
Total investments  $773,945,298                

 

(1) Includes $866,900 of Membership stock and $1,639,700 of Activity stock due to short-term advances and letters of credit.
Schedule of Fair Value of Fixed Maturity Securities

The following tables summarize unrealized losses on fixed maturities securities that were carried at estimated fair value at December 31, 2021 and at December 31, 2020. The unrealized losses were primarily related to interest rate fluctuations and uncertainties relating to COVID-19. 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 December 31, 2021                              
Obligations of States and Political Subdivisions  $1,989   $548,715   $-   $-   $1,989   $548,715 
Corporate Securities   73,507    4,638,750    280,161    3,771,813    353,668    8,410,563 
Mortgage and other asset-backed securities   72,952    7,934,760    88,380    1,582,804    161,332    9,517,564 
Total unrealized losses  $148,448   $13,122,225   $368,541   $5,354,617   $516,989   $18,476,842 
                               
At December 31, 2020                              
Obligations of States and Political Subdivisions  $1,261   $206,812   $-   $-   $1,261   $206,812 
Corporate Securities   242,596    9,919,298    438,882    2,593,026    681,478    12,512,324 
Mortgage and other asset-backed securities   266,522    3,455,574    584    51,961    267,106    3,507,535 
Total unrealized losses  $510,379   $13,581,684   $439,466   $2,644,987   $949,845   $16,226,671 
Schedule of Earnings on Fixed Maturity Securities

The following table presents a rollforward of the Company’s cumulative other than temporary credit impairments (“OTTI”) recognized in earnings on fixed maturity securities available for sale.

 

   2021   2020 
Balance of credit-related OTTI at January 1  $370,975   $- 
           
Additions for credit impairments recognized on:          
Securities not previously impaired   39,502    370,975 
Securities previously impaired   -    - 
           
Reductions for credit impairments previously recognized on:          
Securities that matured or were sold during the period (realized)   (145,500)   - 
Securities due to an increase in expected cash flows   -    - 
           
Balance of credit-related OTTI at December 31  $264,977   $370,975 
Schedule of Investments Classified by Contractual Maturity Date

The following table presents the amortized cost and estimated fair value of fixed maturity securities available for sale at December 31, 2021, 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  $68,966   $70,024 
Due in 2-5 years   62,958,696    65,605,915 
Due in 5-10 years   70,740,783    77,346,448 
Due in more than 10 years   67,900,269    80,873,410 
Mortgage-backed securities   34,365,382    35,109,209 
Redeemable preferred stock   269,214    282,597 
Total  $236,303,310   $259,287,603 
Schedule of Gain (Loss) on Investments

The following tables presents the net realized gains and losses from sales, calls, and maturities, unrealized gains and losses on equity securities, and other than temporary impairments from investments and other assets.

 

         
   Years Ended December 31 
   2021   2020 
Fixed maturity securities available for sale:          
Gross realized gains  $984,740   $445,749 
Gross realized losses   (139,728)   (77,546)
Other than temporary impairments   (39,502)   (370,975)
           
Equity securities:          
Gains on securities sold   390,597    74,836 
Unrealized gains on securities held at the end of the period   2,732,130    1,125,304 
           
Other assets:          
Gross realized gains   4,786,535    2,342,418 
Gross realized losses   (2,489,140)   (1,984,911)
Total  $6,225,632   $1,554,875 
Schedule of Major Categories of Net Investment Income

Information regarding sales of fixed maturity securities available for sale is presented as follows.

 

         
   Years Ended December 31 
   2021   2020 
Proceeds from sales  $2,896,351   $5,477,438 
Gross realized gains   208,698    358,236 
Gross realized losses   (4,046)   (21,137)

 

 

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

 

2) Investments (Continued)

 

Major categories of net investment income were as follows:

 

         
   Years Ended December 31 
   2021   2020 
Fixed maturity securities available for sale  $10,769,979   $12,233,394 
Equity securities   446,337    642,433 
Mortgage loans held for investment   28,758,614    25,672,746 
Real estate held for investment and sale   12,334,989    11,945,401 
Policy loans   940,890    1,025,179 
Insurance assignments   19,062,052    17,837,578 
Other investments   131,145    126,013 
Cash and cash equivalents   235,470    426,623 
Gross investment income   72,679,476    69,909,367 
Investment expenses   (14,414,793)   (13,579,564)
Net investment income  $58,264,683   $56,329,803 
Schedule of Commercial Real Estate Investment

The Company’s commercial real estate held for investment is summarized as follows:

 

   Net Ending Balance   Total Square Footage 
   December 31   December 31 
   2021   2020   2021   2020 
Utah (1)  $150,105,948   $100,927,528    675,920    379,066 
Louisiana   2,426,612    2,998,684    31,778    84,841 
Mississippi   2,860,775    2,914,498    19,694    21,521 
                     
   $155,393,335   $106,840,710    727,392    485,428 

 

 

(1) Includes Center53 phase 1 and phase 2

 

The Company’s commercial real estate held for sale is summarized as follows:

 

   Net Ending Balance   Total Square Footage 
   December 31   December 31 
   2021   2020   2021   2020 
Kansas  $2,000,000   $4,000,000    222,679    222,679 
Louisiana   389,145    -    2,872    - 
Mississippi (1)   151,553    151,553    -    12,300 
Texas (2)        249,000    -    - 
                     
   $2,540,698   $4,400,553    225,551    234,979 

 

 

(1) Approximately 93 acres of undeveloped land, in 2021, the existing building was removed
(2) Improved commercial pad
Schedule of Residential Real Estate Investment

The Company’s residential real estate held for investment is summarized as follows:

 

         
   Net Ending Balance 
   December 31 
   2021   2020 
Utah (1)  $41,686,281   $24,557,562 
Washington (2)   286,181    286,181 
Residential Real Estate Investment  $41,972,462   $24,843,743 

 

 
(1)Including subdivision land developments
(2)Improved residential lots

 

The following table presents additional information regarding the Company’s subdivision land developments in Utah.

 

         
   December 31 
   2021   2020 
Lots available for sale   67    36 
Lots to be developed   548    350 
Ending Balance  $41,479,434   $23,777,478 

 

 

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

 

2) Investments (Continued)

 

The Company’s residential real estate held for sale is summarized as follows:

 

         
   Net Ending Balance 
   December 31 
   2021   2020 
Nevada  $979,640   $979,640 
Texas   200,962    - 
Ohio   10,000    10,000 
Florida   -    744,322 
Utah   -    1,744,292 
Real Estate held for Sale  $1,190,602   $3,478,254 
Schedule of Real Estate Owned and Occupied by the Company

The primary business units of the Company occupy a portion of the commercial real estate owned by the Company. As of December 31, 2021, real estate owned and occupied by the Company is summarized as follows:

 

Location  Business Segment  Approximate Square Footage   Square Footage Occupied by the Company 
433 West Ascension Way, Salt Lake City, UT - Center53 Phase 2  Corporate Offices, Life Insurance, Cemetery/Mortuary Operations, and Mortgage Operations and Sales   221,000    50%
1044 River Oaks Dr., Flowood, MS  Life Insurance Operations   19,694    28%
1818 Marshall Street, Shreveport, LA (1)  Life Insurance Operations   12,274    100%
909 Foisy Street, Alexandria, LA (1)  Life Insurance Sales   8,059    100%
812 Sheppard Street, Minden, LA (1)  Life Insurance Sales   1,560    100%
1550 N 3rd Street, Jena, LA (1)  Life Insurance Sales   1,737    100%

 

 
(1)Included in property and equipment on the consolidated balance sheets
Schedule of Aging of Mortgage Loans

The Company establishes a valuation allowance for credit losses in its mortgage loans held for investment portfolio. The following table presents the valuation allowance for loan losses as a contra-asset account.

 

   Commercial   Residential   Residential Construction   Total 
December 31, 2021                    
Allowance for credit losses:                    
Beginning balance  $187,129   $1,774,796   $43,202   $2,005,127 
Charge-offs   -    -    -    - 
Provision   -    (305,225)   -    (305,225)
Ending balance  $187,129   $1,469,571   $43,202   $1,699,902 
                     
Ending balance: individually evaluated for impairment  $-   $105,384   $-   $105,384 
                     
Ending balance: collectively evaluated for impairment  $187,129   $1,364,187   $43,202   $1,594,518 
                     
Mortgage loans:                    
Ending balance  $51,683,022   $53,533,712   $175,117,783   $280,334,517 
                     
Ending balance: individually evaluated for impairment  $1,723,372   $2,548,656   $-   $4,272,028 
                     
Ending balance: collectively evaluated for impairment  $49,959,650   $50,985,056   $175,117,783   $2,760,162,489 
                     
December 31, 2020                    
Allowance for credit losses:                    
Beginning balance  $187,129   $1,222,706   $43,202   $1,453,037 
Charge-offs   -    -    -    - 
Provision   -    552,090    -    552,090 
Ending balance  $187,129   $1,774,796   $43,202   $2,005,127 
                     
Ending balance: individually evaluated for impairment  $-   $219,905   $-   $219,905 
                     
Ending balance: collectively evaluated for impairment  $187,129   $1,554,891   $43,202   $1,785,222 
                     
Mortgage loans:                    
Ending balance  $46,836,866   $111,111,777   $95,822,448   $253,771,091 
                     
Ending balance: individually evaluated for impairment  $2,148,827   $7,932,680   $200,963   $10,282,470 
                     
Ending balance: collectively evaluated for impairment  $44,688,039   $103,179,097   $95,621,485   $243,488,621 

 

 

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

 

2) Investments (Continued)

 

The following table presents the aging of mortgage loans held for investment.

 

   Commercial   Residential   Residential
 Construction		   Total 
December 31, 2021                    
30-59 Days Past Due  $-   $3,117,826   $1,363,127   $4,480,953 
60-89 Days Past Due   100,204    580,815    -    681,019 
Greater Than 90 Days (1)   1,723,372    2,052,062    -    3,775,434 
In Process of Foreclosure (1)   -    496,594    -    496,594 
Total Past Due   1,823,576    6,247,297    1,363,127    9,434,000 
Current   49,859,446    47,286,415    173,754,656    270,900,517 
Total Mortgage Loans   51,683,022    53,533,712    175,117,783    280,334,517 
Allowance for Loan Losses   (187,129)   (1,469,571)   (43,202)   (1,699,902)
Unamortized deferred loan fees, net   (36,813)   (498,600)   (383,173)   (918,586)
Unamortized discounts, net   (240,614)   (169,369)   -    (409,983)
Net Mortgage Loans  $51,218,466   $51,396,172   $174,691,408   $277,306,046 
                     
December 31, 2020                    
30-59 Days Past Due  $233,200   $5,866,505   $127,191   $6,226,896 
60-89 Days Past Due   812,780    2,048,148    -    2,860,928 
Greater Than 90 Days (1)   2,148,827    5,669,583    -    7,818,410 
In Process of Foreclosure (1)   -    2,263,097    200,963    2,464,060 
Total Past Due   3,194,807    15,847,333    328,154    19,370,294 
Current   43,642,059    79,975,115    110,783,623    234,400,797 
Total Mortgage Loans   46,836,866    95,822,448    111,111,777    253,771,091 
Allowance for Loan Losses   (187,129)   (1,774,796)   (43,202)   (2,005,127)
Unamortized deferred loan fees, net   (32,557)   (909,864)   (218,711)   (1,161,132)
Unamortized discounts, net   (880,721)   (380,175)   -    (1,260,896)
Net Mortgage Loans  $45,736,459   $92,757,613   $110,849,864   $249,343,936 

 

 
(1)Interest income is not recognized on loans past due greater than 90 days or in foreclosure.
Schedule of Aging of Mortgage Loans

The following table presents the aging of mortgage loans held for investment.

 

   Commercial   Residential   Residential
 Construction		   Total 
December 31, 2021                    
30-59 Days Past Due  $-   $3,117,826   $1,363,127   $4,480,953 
60-89 Days Past Due   100,204    580,815    -    681,019 
Greater Than 90 Days (1)   1,723,372    2,052,062    -    3,775,434 
In Process of Foreclosure (1)   -    496,594    -    496,594 
Total Past Due   1,823,576    6,247,297    1,363,127    9,434,000 
Current   49,859,446    47,286,415    173,754,656    270,900,517 
Total Mortgage Loans   51,683,022    53,533,712    175,117,783    280,334,517 
Allowance for Loan Losses   (187,129)   (1,469,571)   (43,202)   (1,699,902)
Unamortized deferred loan fees, net   (36,813)   (498,600)   (383,173)   (918,586)
Unamortized discounts, net   (240,614)   (169,369)   -    (409,983)
Net Mortgage Loans  $51,218,466   $51,396,172   $174,691,408   $277,306,046 
                     
December 31, 2020                    
30-59 Days Past Due  $233,200   $5,866,505   $127,191   $6,226,896 
60-89 Days Past Due   812,780    2,048,148    -    2,860,928 
Greater Than 90 Days (1)   2,148,827    5,669,583    -    7,818,410 
In Process of Foreclosure (1)   -    2,263,097    200,963    2,464,060 
Total Past Due   3,194,807    15,847,333    328,154    19,370,294 
Current   43,642,059    79,975,115    110,783,623    234,400,797 
Total Mortgage Loans   46,836,866    95,822,448    111,111,777    253,771,091 
Allowance for Loan Losses   (187,129)   (1,774,796)   (43,202)   (2,005,127)
Unamortized deferred loan fees, net   (32,557)   (909,864)   (218,711)   (1,161,132)
Unamortized discounts, net   (880,721)   (380,175)   -    (1,260,896)
Net Mortgage Loans  $45,736,459   $92,757,613   $110,849,864   $249,343,936 

 

 
(1)Interest income is not recognized on loans past due greater than 90 days or in foreclosure.
Schedule of Impaired Mortgage Loans

 

   Recorded Investment   Unpaid Principal Balance   Related Allowance   Average Recorded Investment   Interest Income Recognized 
December 31, 2021                                     
With no related allowance recorded:                         
Commercial  $1,723,372   $1,723,372   $-   $1,053,865   $- 
Residential   1,591,368    1,591,368    -    2,731,421    - 
Residential construction   -    -    -    100,481    - 
                          
With an allowance recorded:                         
Commercial  $-   $-   $-   $-   $- 
Residential   957,288    957,288    105,384    726,449    - 
Residential construction   -    -    -    -    - 
                          
Total:                         
Commercial  $1,723,372   $1,723,372   $-   $1,053,865   $- 
Residential   2,548,656    2,548,656    105,384    3,457,870    - 
Residential construction   -    -    -    100,481    - 
                          
December 31, 2020                         
With no related allowance recorded:                         
Commercial  $2,148,827   $2,148,827   $-   $1,866,819   $- 
Residential   6,415,419    6,415,419    -    5,010,078    - 
Residential construction   200,963    200,963    -    555,278    - 
                          
With an allowance recorded:                         
Commercial  $-   $-   $-   $-   $- 
Residential   1,517,261    1,517,261    219,905    1,182,368    - 
Residential construction   -    -    -    -    - 
                          
Total:                         
Commercial  $2,148,827   $2,148,827   $-   $1,866,819   $- 
Residential   7,932,680    7,932,680    219,905    6,192,446    - 
Residential construction   200,963    200,963    -    555,278    - 
Schedule of Credit Risk of Mortgage Loans Based on Performance Status

The Company’s performing and non-performing mortgage loans held for investment are summarized as follows:

 

   Commercial   Residential   Residential Construction   Total 
   December 31   December 31   December 31   December 31 
   2021   2020   2021   2020   2021   2020   2021   2020 
                                 
Performing  $49,959,650   $44,688,039   $50,985,056   $87,889,768   $175,117,783   $110,910,814   $276,062,489   $243,488,621 
Non-performing   1,723,372    2,148,827    2,548,656    7,932,680    -    200,963    4,272,028    10,282,470 
                                         
Total  $51,683,022   $46,836,866   $53,533,712   $95,822,448   $175,117,783   $111,111,777   $280,334,517   $253,771,091 
Schedule of Mortgage loans Held for Investment

 

       Principal   Principal   Principal 
       Amounts   Amounts   Amounts 
       Due in   Due in   Due 
   Total   1 Year   2-5 Years   Thereafter 
Residential  $53,533,712   $7,451,252   $6,031,628   $40,050,832 
Residential Construction   175,117,783    145,711,262    29,406,521    - 
Commercial   51,683,022    17,007,282    25,761,914    8,913,826 
Total  $280,334,517   $170,169,796   $61,200,063   $48,964,658