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Fair Value of Financial Instruments (Tables) | 3 Months Ended
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Mar. 31, 2023
Fair Value Disclosures [Abstract] |
Schedule of Fair Value Assets and Liabilities Measured on a Recurring Basis | The following tables summarize Level 1, 2 and 3 financial assets and financial liabilities measured at fair value on a recurring basis by their classification in the condensed consolidated balance sheet at March 31, 2023. 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 |  | $ | 357,570,527 |  |  | $ | - |  |  | $ | 356,135,008 |  |  | $ | 1,435,519 |
Equity securities |  |  | 12,354,007 |  |  |  | 12,354,007 |  |  |  | - |  |  |  | - |
Loans held for sale |  |  | 173,015,404 |  |  |  | - |  |  |  | - |  |  |  | 173,015,404 |
Restricted assets (1) |  |  | 1,217,307 |  |  |  | - |  |  |  | 1,217,307 |  |  |  | - |
Restricted assets (2) |  |  | 5,660,427 |  |  |  | 5,660,427 |  |  |  | - |  |  |  | - |
Cemetery perpetual care trust investments (1) |  |  | 256,422 |  |  |  | - |  |  |  | 256,422 |  |  |  | - |
Cemetery perpetual care trust investments (2) |  |  | 3,691,958 |  |  |  | 3,691,958 |  |  |  | - |  |  |  | - |
Derivatives - loan commitments (3) |  |  | 6,560,948 |  |  |  | - |  |  |  | - |  |  |  | 6,560,948 |
Total assets accounted for at fair value on a recurring basis |  | $ | 560,327,000 |  |  | $ | 21,706,392 |  |  | $ | 357,608,737 |  |  | $ | 181,011,871 |
Liabilities accounted for at fair value on a recurring basis |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivatives - call options (4) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivatives - put options (4) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivatives - loan commitments (4) |  |  | (3,176,119 | ) |  |  | - |  |  |  | - |  |  |  | (3,176,119 | )
Total liabilities accounted for at fair value on a recurring basis |  | $ | (3,176,119 | ) |  | $ | - |  |  | $ | - |  |  | $ | (3,176,119 | )
(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 Condensed Consolidated Financial Statements March 31, 2023 (Unaudited) 8) Fair Value of Financial Instruments (Continued) The following tables summarize Level 1, 2 and 3 financial assets and financial liabilities measured at fair value on a recurring basis by their classification in the condensed 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 (1) |  |  | 1,217,308 |  |  |  | - |  |  |  | 1,217,308 |  |  |  | - |
Restricted assets (2) |  |  | 5,348,244 |  |  |  | 5,348,244 |  |  |  | - |  |  |  | - |
Restricted assets (2) |  |  | 5,348,244 |  |  |  | 5,348,244 |  |  |  | - |  |  |  | - |
Cemetery perpetual care trust investments (1) |  |  | 254,731 |  |  |  | - |  |  |  | 254,731 |  |  |  | - |
Cemetery perpetual care trust investments (1) |  |  | 254,731 |  |  |  | - |  |  |  | 254,731 |  |  |  | - |
Cemetery perpetual care trust investments (2) |  |  | 3,605,162 |  |  |  | 3,605,162 |  |  |  | - |  |  |  | - |
Cemetery perpetual care trust investments (2) |  |  | 3,605,162 |  |  |  | 3,605,162 |  |  |  | - |  |  |  | - |
Derivatives - loan commitments (3) |  |  | 4,089,856 |  |  |  | - |  |  |  | - |  |  |  | 4,089,856 |
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 | )
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
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 March 31, 2023, 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 |
|  | 3/31/2023 |  |  | Technique |  | Input(s) |  | Value |  |  | Value |  |  | Average |
Loans held for sale |  | $ | 173,015,404 |  |  | Market approach |  | Investor contract pricing as a percentage of unpaid principal balance |  |  | 70.0 | % |  |  | 111.0 | % |  |  | 100.0 | %
Derivatives - loan commitments (net) |  |  | 3,384,829 |  |  | Market approach |  | Pull-through rate |  |  | 65.0 | % |  |  | 95.0 | % |  |  | 85.0 | %
|  |  |  |  |  |  |  | Initial-Value |  |  | N/A |  |  |  | N/A |  |  |  | N/A |
|  |  |  |  |  |  |  | Servicing |  |  | 0 bps |  |  |  | 149 bps |  |  |  | 45 bps |
Fixed maturity securities available for sale |  |  | 1,435,519 |  |  | Broker quotes |  | Pricing quotes |  | $ | 100.00 |  |  | $ | 111.11 |  |  | $ | 104.97 |
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 |
Schedule of Changes in the Condensed Consolidated Balance Sheet Line Items Measured Using Level 3 Inputs | The following table is a summary of changes in the condensed consolidated balance sheet line items measured using level 3 inputs for the three month periods ended March 31, 2023: Schedule of Changes in the Condensed Consolidated Balance Sheet Line Items Measured Using Level 3 Inputs
|  | Net Loan Commitments |  |  | Loans Held for Sale |  |  | Fixed Maturity Securities Available for Sale |
Balance - December 31, 2022 |  | $ | 2,706,877 |  |  | $ | 141,179,620 |  |  | $ | 1,435,519 |
Originations and purchases |  |  | - |  |  |  | 531,867,796 |  |  |  | - |
Sales, maturities and paydowns |  |  | - |  |  |  | (511,909,942 | ) |  |  | - |
Total gains (losses): |  |  |  |  |  |  |  |  |  |  |  |
Included in earnings |  |  | 677,952 | (1) |  |  | 11,877,930 | (1) |  |  | - | (2)
Included in other comprehensive income |  |  | - |  |  |  | - |  |  |  | - |
Balance - March 31, 2023 |  | $ | 3,384,829 |  |  | $ | 173,015,404 |  |  | $ | 1,435,519 |
(1) | As a component of Mortgage fee income on the condensed consolidated statements of earnings
(2) | As a component of Net investment income on the condensed consolidated statements of earnings
The following table is a summary of changes in the condensed consolidated balance sheet line items measured using level 3 inputs for the three month periods ended March 31, 2022:
|  | Net 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 and purchases |  |  | - |  |  |  | 1,039,216,582 |  |  |  | - |
Sales, maturities and paydowns |  |  | - |  |  |  | (1,132,085,830 | ) |  |  | (11,950 | )
Total gains (losses): |  |  |  |  |  |  |  |  |  |  |  |
Included in earnings |  |  | 2,675,371 | (1) |  |  | 24,105,293 | (1) |  |  | 961 | (2)
Included in other comprehensive income |  |  | - |  |  |  | - |  |  |  | (587 | )
Balance - March 31, 2022 |  | $ | 9,690,886 |  |  | $ | 234,012,872 |  |  | $ | 2,011,772 |
(1) | As a component of Mortgage fee income on the condensed consolidated statements of earnings
(2) | As a component of Net investment income on the condensed consolidated statements of earnings
Schedule of Fair Value Assets Measured on a Nonrecurring Basis | The following table summarizes Level 1, 2 and 3 financial assets and financial liabilities measured at fair value on a nonrecurring basis by their classification in the condensed consolidated balance sheet at December 31, 2022. 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 |  | $ | 794,224 |  |  | $ | - |  |  | $ | - |  |  | $ | 794,224 |
Total assets accounted for at fair value on a nonrecurring basis |  | $ | 794,224 |  |  | $ | - |  |  | $ | - |  |  | $ | 794,224 |
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 March 31, 2023: 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 |  | $ | 91,417,171 |  |  | $ | - |  |  | $ | - |  |  | $ | 89,949,922 |  |  | $ | 89,949,922 |
Residential construction |  |  | 145,531,682 |  |  |  | - |  |  |  | - |  |  |  | 145,531,682 |  |  |  | 145,531,682 |
Commercial |  |  | 49,597,786 |  |  |  | - |  |  |  | - |  |  |  | 48,049,451 |  |  |  | 48,049,451 |
Mortgage loans held for investment, net |  | $ | 286,546,639 |  |  | $ | - |  |  | $ | - |  |  | $ | 283,531,055 |  |  | $ | 283,531,055 |
Policy loans |  |  | 13,012,347 |  |  |  | - |  |  |  | - |  |  |  | 13,012,347 |  |  |  | 13,012,347 |
Insurance assignments, net (1) |  |  | 43,887,930 |  |  |  | - |  |  |  | - |  |  |  | 43,887,930 |  |  |  | 43,887,930 |
Restricted assets (2) |  |  | 2,936,896 |  |  |  | - |  |  |  | - |  |  |  | 2,936,896 |  |  |  | 2,936,896 |
Cemetery perpetual care trust investments (2) |  |  | 2,709,339 |  |  |  | - |  |  |  | - |  |  |  | 2,709,339 |  |  |  | 2,709,339 |
Mortgage servicing rights, net |  |  | 3,166,133 |  |  |  | - |  |  |  | - |  |  |  | 4,164,686 |  |  |  | 4,164,686 |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Bank and other loans payable |  | $ | (138,391,846 | ) |  | $ | - |  |  | $ | - |  |  | $ | (138,391,846 | ) |  | $ | (138,391,846 | )
Policyholder account balances (3) |  |  | (40,865,405 | ) |  |  | - |  |  |  | - |  |  |  | (41,529,360 | ) |  |  | (41,529,360 | )
Future policy benefits - annuities (3) |  |  | (106,474,611 | ) |  |  | - |  |  |  | - |  |  |  | (128,238,451 | ) |  |  | (128,238,451 | )
(1) | Included in other investments and policy loans on the condensed consolidated balance sheets
(2) | Mortgage loans held for investment
(3) | Included in future policy benefits and unpaid claims on the condensed consolidated balance sheets
SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2023 (Unaudited) 8) 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, 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

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- Definition 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). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (bbb) -SubTopic 10 -Topic 820 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-2 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-2 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-2 + Details
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- Definition 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. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-2 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-2 + Details
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- Definition 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). + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-2 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-2 + Details
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