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Cemetery Perpetual Care Trust Investments and Obligation and Restricted Assets (Tables)
 3 Months Ended
Mar. 31, 2023
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]  
Schedule of Investments

The Company’s investments as of March 31, 2023 are summarized as follows:

 

   Amortized Cost   Gross Unrealized Gains   Gross Unrealized Losses (1)   Allowance for Credit Losses   Estimated Fair Value 
March 31, 2023:                         
Fixed maturity securities, available for sale, at estimated fair value:                         
U.S. Treasury securities and obligations of U.S. Government agencies  $95,362,166   $305,924   $(2,047,395)  $-   $93,620,695 
                          
Obligations of states and political subdivisions   6,766,771    14,954    (337,946)   -    6,443,779 
                          
Corporate securities including public utilities   233,143,391    3,467,771    (9,039,301)   (179,500)   227,392,361 
                          
Mortgage-backed securities   33,859,690    203,490    (4,209,488)   -    29,853,692 
                          
Redeemable preferred stock   250,000    10,000    -    -    260,000 
                          
Total fixed maturity securities available for sale  $369,382,018   $4,002,139   $(15,634,130)  $(179,500)  $357,570,527 
                          
Equity securities at estimated fair value:                         
                          
Common stock:                         
                          
Industrial, miscellaneous and all other  $10,356,783   $2,741,720   $(744,496)       $12,354,007 
                          
Total equity securities at estimated fair value  $10,356,783   $2,741,720   $(744,496)       $12,354,007 
                          
Mortgage loans held for investment at amortized cost:                         
Residential  $94,471,213                     
Residential construction   146,093,947                     
Commercial   50,807,452                     
Less: Unamortized deferred loan fees, net   (1,752,369)                    
Less: Allowance for credit losses   (2,735,419)                    
Less: Net discounts   (338,185)                    
                          
Total mortgage loans held for investment  $286,546,639                     
                          
Real estate held for investment - net of accumulated depreciation:                         
Residential  $35,358,867                     
Commercial   151,718,145                     
                          
Total real estate held for investment  $187,077,012                     
                          
Real estate held for sale:                         
Residential  $7,238,709                     
Commercial   151,553                     
                          
Total real estate held for sale  $7,390,262                     
                          
Other investments and policy loans at amortized cost:                         
Policy loans  $13,012,347                     
Insurance assignments   45,573,831                     
Federal Home Loan Bank stock (2)   3,896,800                     
Other investments   9,421,702                     
Less: Allowance for credit losses for insurance assignments   (1,685,901)                    
                          
Total other investments and policy loans  $70,218,779                     
                          
Accrued investment income  $9,427,239                     
                          
Total investments  $930,584,465                     

 

 

(1) Gross unrealized losses are net of allowance for credit losses
(2) Includes $978,100 of Membership stock and $2,918,700 of Activity stock due to short-term borrowings and letters of credit.

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 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 due to short-term advances 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 
At March 31, 2023                              
U.S. Treasury Securities And Obligations of U.S. Government Agencies  $644,240   $53,196,137   $1,403,155   $29,019,470   $2,047,395   $82,215,607 
Obligations of States and Political Subdivisions   204,976    4,644,270    132,970    1,213,482    337,946    5,857,752 
Corporate Securities   5,315,889    123,534,510    3,723,412    26,399,408    9,039,301    149,933,918 
Mortgage and other asset-backed securities   586,825    6,984,005    3,622,663    19,465,113    4,209,488    26,449,118 
Totals  $6,751,930   $188,358,922   $8,882,200   $76,097,473   $15,634,130   $264,456,395 
                               
At 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 following table presents the amortized cost and the estimated fair value of fixed maturity securities available for sale at March 31, 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  $18,103,991   $18,032,556 
Due in 2-5 years   149,458,111    145,781,675 
Due in 5-10 years   81,699,121    80,082,902 
Due in more than 10 years   86,011,105    83,559,702 
Mortgage-backed securities   33,859,690    29,853,692 
Redeemable preferred stock   250,000    260,000 
Total  $369,382,018   $357,570,527 
Restricted Assets [Member]  
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]  
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 March 31, 2023 and at December 31, 2022. The unrealized losses were primarily related to interest rate fluctuations and inflation. 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 March 31, 2023                              
Obligations of states and political subdivisions  $2,670   $338,301   $9,767   $500,955   $12,436   $839,256 
Corporate securities including public utilities   1,620    198,923    -    -    1,620    198,923 
Total unrealized losses  $4,290   $537,225   $9,767   $500,955   $14,056   $1,038,179 
                               
At 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 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 March 31, 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   318,067    311,893 
Due in 5-10 years   153,284    151,610 
Due in more than 10 years   759,334    753,804 
Total  $1,230,685   $1,217,307 
Schedule of Restricted Assets in Cemetery and Mortuary Endowment Care and Pre need Merchandise Funds

Restricted assets as of March 31, 2023, are summarized as follows:

 

   Amortized Cost   Gross Unrealized Gains   Gross Unrealized Losses   Allowance for Credit Losses   Estimated Fair Value 
March 31, 2023:                         
Fixed maturity securities, available for sale, at estimated fair value:                         
Obligations of states and political subdivisions  $1,030,141   $679   $(12,436)  $-   $1,018,384 
Corporate securities including public utilities   200,543    -    (1,620)   -    198,923 
Total fixed maturity securities available for sale  $1,230,685   $679   $(14,056)  $-   $1,217,307 
                          
Equity securities at estimated fair value:                         
Common stock:                         
Industrial, miscellaneous and all other  $5,241,033   $692,339   $(272,945)       $5,660,427 
Total equity securities at estimated fair value  $5,241,033   $692,339   $(272,945)       $5,660,427 
                          
Mortgage loans held for investment at amortized cost:                        
Residential construction  $2,936,896                     
Less: Allowance for credit losses  $(5,874)                    
Total mortgage loans held for investment  $2,931,023                     
                          
Cash and cash equivalents (1)  $9,228,113                     
                          
Total restricted assets  $19,036,870                     

 

 

(1) Including cash and cash equivalents of $8,232,615 for the life insurance and mortgage segments.

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2023 (Unaudited)

 

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

 

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 March 31, 2023, are as follows:

 

   Amortized Cost   Gross Unrealized Gains   Gross Unrealized Losses   Allowance for Credit Losses   Estimated Fair Value 
March 31, 2023:                         
Fixed maturity securities, available for sale, at estimated fair value:                         
U.S. Treasury securities and obligations of U.S. Government agencies  $89,004   $381   $-   $-   $89,384 
Obligations of states and political subdivisions   172,966    -    (5,928)   -    167,038 
Total fixed maturity securities available for sale  $261,969   $381   $(5,928)  $-   $256,422 
                          
Equity securities at estimated fair value:                         
Common stock:                         
Industrial, miscellaneous and all other  $3,251,768   $602,286   $(162,096)       $3,691,958 
Total equity securities at estimated fair value  $3,251,768   $602,286   $(162,096)       $3,691,958 
                          
Mortgage loans held for investment at amortized cost:                         
Residential construction  $2,709,339                     
Less: Allowance for credit losses  $(2,196)                    
Total mortgage loans held for investment  $2,707,143                     
                          
Real estate held for investment: Residential  $55,531                     
                          
Cash and cash equivalents  $749,358                     
                          
Total cemetery perpetual care trust investments  $7,460,412                     
                          
Cemetery perpetual care obligation  $(5,143,233)                    
                          
Trust investments in excess of trust obligations  $2,317,179                     

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2023 (Unaudited)

 

15) Cemetery Perpetual Care Trust Investments and Obligation 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 following tables summarize unrealized losses on fixed maturities securities that were carried at estimated fair value at March 31, 2023 and at December 31, 2022. The unrealized losses were primarily related to interest rate fluctuations and inflation. 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 March 31, 2023                              
Obligations of states and political subdivisions  $435   $54,401   $5,493   $112,637   $5,928   $167,038 
Total unrealized losses  $435   $54,401   $5,493   $112,637   $5,928   $167,038 
                               
At 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 following table presents the amortized cost and estimated fair value of fixed maturity securities available for sale at March 31, 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  $89,004   $89,384 
Due in 2-5 years   76,509    71,788 
Due in 5-10 years   41,621    40,849 
Due in more than 10 years   54,835    54,401 
Total  $261,969   $256,422