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Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2021

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, 2021.

Schedule of Fair Value Assets and Liabilities Measured on a Recurring Basis 

		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

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

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, 2020.

		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		$	294,656,679			$	-			$	292,455,504			$	2,201,175
Equity securities			11,324,239				11,324,239				-				-
Loans held for sale			422,772,418				-				-				422,772,418
Restricted assets (1)			1,473,637				-				1,473,637				-
Restricted assets (2)			2,515,778				2,515,778				-				-
Cemetery perpetual care trust investments (1)			747,767				-				747,767				-
Cemetery perpetual care trust investments (2)			2,062,303				2,062,303				-				-
Derivatives - loan commitments (3)			12,592,672				-				-				12,592,672
Total assets accounted for at fair value on a recurring basis		$	748,145,493			$	15,902,320			$	294,676,908			$	437,566,265
Liabilities accounted for at fair value on a  recurring basis
Derivatives - call options (4)		$	(43,097	)		$	(43,097	)		$	-			$	-
Derivatives - loan commitments (4)			(2,464,062	)			-				-				(2,464,062	)
Total liabilities accounted for at fair value on a recurring basis		$	(2,507,159	)		$	(43,097	)		$	-			$	(2,464,062	)

(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, 2021, the significant unobservable inputs used in the fair value measurements were as follows:

Assets and Liabilities Measured at Fair Value on A Recurring Basis 

								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

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

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, 2020, 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
		12/31/2020				Technique		Input(s)		Value				Value				Average
Loans held for sale		$	422,772,418			Market approach		Investor contract pricing as a percentage of unpaid principal balance			99.0	%			110.0	%			104.0	%
Derivatives - loan commitments (net)			10,128,610			Market approach		Pull-through rate			52.0	%			92.0	%			81.0	%
								Initial-Value			N/A				N/A				N/A
								Servicing			0 bps				184 bps				58 bps
Fixed maturity securities available for sale			2,201,175			Broker quotes		Pricing quotes		$	90.83			$	119.33			$	113.47

Schedule of Changes in the Consolidated Balance Sheet Line Items Measured Using Level 3 Inputs

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

Schedule 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

Following 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, 2019		$	2,491,233			$	213,457,632			$	3,216,382
Originations/purchases			-				5,627,013,749				-
Sales, maturities and paydowns			-				(5,600,045,285	)			(1,042,400	)
Transfer to mortgage loans held for investment			-				(16,960,549	)			-
Total gains (losses):
Included in earnings			7,637,377	(1)			199,306,871	(1)			3,408	(2)
Included in other comprehensive income			-				-				23,785
Balance - December 31, 2020		$	10,128,610			$	422,772,418			$	2,201,175

(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 tables 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.

Schedule of Fair Value Assets Measured on a Nonrecurring Basis 

		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

The following tables 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, 2020.

		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		$	1,297,356			$	-			$	-			$	1,297,356
Impaired real estate held for sale			4,249,000				-				-				4,249,000
Total assets accounted for at fair value on  a nonrecurring basis		$	5,546,356			$	-			$	-			$	5,546,356

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, 2021:

Schedule of Financial Instruments Carried at Other Than Fair Value 

		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

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

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, 2020:

		Carrying Value				Level 1				Level 2				Level 3				Total Estimated Fair Value
Assets
Mortgage loans held for investment
Residential		$	92,757,613			$	-			$	-			$	100,384,283			$	100,384,283
Residential construction			110,849,864				-				-				110,849,864				110,849,864
Commercial			45,736,459				-				-				45,259,425				45,259,425
Mortgage loans held for investment, net		$	249,343,936			$	-			$	-			$	256,493,572			$	256,493,572
Policy loans			14,171,589				-				-				14,171,589				14,171,589
Insurance assignments, net (1)			51,585,656				-				-				51,585,656				51,585,656
Restricted assets (2)			3,317,877				-				-				3,317,877				3,317,877
Cemetery perpetual care trust investments (2)			1,468,600				-				-				1,468,600				1,468,600
Mortgage servicing rights, net			35,210,516				-				-				38,702,358				38,702,358
Liabilities
Bank and other loans payable		$	(297,824,368	)		$	-			$	-			$	(297,824,368	)		$	(297,824,368	)
Policyholder account balances (3)			(44,026,809	)			-				-				(42,220,725	)			(42,220,725	)
Future policy benefits - annuities (3)			(106,522,113	)			-				-				(112,354,186	)			(112,354,186	)

(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

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Schedule of Changes in the Consolidated Balance Sheet Line Items Measured Using Level 3 Inputs [Table Text Block]

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Tabular disclosure of assets and liabilities by class, including financial instruments measured at fair value that are classified in shareholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). Disclosures may include, but are not limited to: (a) the fair value measurements recorded and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements are categorized in their entirety (levels 1, 2, 3).

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Tabular disclosure of liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, by class that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3). Where the quoted price in an active market for the identical liability is not available, the Level 1 input is the quoted price of an identical liability when traded as an asset.

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Tabular disclosure of assets and liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3).

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