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Cemetery Perpetual Care Trust Investments and Obligation and Restricted Assets (Tables)
 6 Months Ended
Jun. 30, 2023
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]  
Schedule of Investments

The Company’s investments as of June 30, 2023 are summarized as follows:

 

   Amortized Cost   Gross Unrealized Gains   Gross Unrealized Losses (1)   Allowance for Credit Losses   Estimated Fair Value 
June 30, 2023:                         
Fixed maturity securities, available for sale, at estimated fair value:                         
U.S. Treasury securities and obligations of U.S. Government agencies  $99,323,377   $50,602   $(2,554,426)  $-   $96,819,553 
                          
Obligations of states and political subdivisions   6,757,087    403    (378,987)   -    6,378,503 
                          
Corporate securities including public utilities   232,127,146    2,177,346    (11,487,153)   (224,005)   222,593,334 
                          
Mortgage-backed securities   33,273,655    169,558    (4,704,791)   -    28,738,422 
                          
Redeemable preferred stock   250,000    10,000    -    -    260,000 
                          
Total fixed maturity securities available for sale  $371,731,265   $2,407,909   $(19,125,357)  $(224,005)  $354,789,812 
                          
Equity securities at estimated fair value:                         
                          
Common stock:                         
                          
Industrial, miscellaneous and all other  $10,416,580   $2,976,949   $(591,604)       $12,801,925 
                          
Total equity securities at estimated fair value  $10,416,580   $2,976,949   $(591,604)       $12,801,925 
                          
Mortgage loans held for investment at amortized cost:                         
Residential  $95,208,040                     
Residential construction   121,322,532                     
Commercial   59,205,487                     
Less: Unamortized deferred loan fees, net   (1,689,405)                    
Less: Allowance for credit losses   (2,663,560)                    
Less: Net discounts   (333,509)                    
                          
Total mortgage loans held for investment  $271,049,585                     
                          
Real estate held for investment - net of accumulated depreciation:                         
Residential  $30,680,836                     
Commercial   150,282,066                     
                          
Total real estate held for investment  $180,962,902                     
                          
Real estate held for sale:                         
Residential  $1,675,921                     
Commercial   151,553                     
                          
Total real estate held for sale  $1,827,474                     
                          
Other investments and policy loans at amortized cost:                         
Policy loans  $13,020,654                     
Insurance assignments   41,157,301                     
Federal Home Loan Bank stock (2)   2,677,100                     
Other investments   9,389,786                     
Less: Allowance for credit losses for insurance assignments   (1,690,693)                    
                          
Total other investments and policy loans  $64,554,148                     
                          
Accrued investment income  $10,188,551                     
                          
Total investments  $ 896,174,397                     

 

 

 

(1)Gross unrealized losses are net of allowance for credit losses
(2)Includes $84,800 of Membership stock and $2,592,300 of Activity stock attributable to short-term borrowings and letters of credit.

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

June 30, 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 attributable to short-term borrowings 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 June 30, 2023                              
U.S. Treasury Securities And Obligations of U.S. Government Agencies  $872,936   $56,265,029   $1,681,490   $28,818,980   $2,554,426   $85,084,009 
Obligations of States and Political Subdivisions   159,415    3,758,985    219,572    2,149,115    378,987    5,908,100 
Corporate Securities   3,664,905    96,981,686    7,822,248    71,988,258    11,487,153    168,969,944 
Mortgage and other asset-backed securities   497,345    5,241,798    4,207,446    20,951,604    4,704,791    26,193,402 
Totals  $5,194,601   $162,247,498   $13,930,756   $123,907,957   $19,125,357   $286,155,455 
                               
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 table below presents the amortized cost and the estimated fair value of fixed maturity securities available for sale at June 30, 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  $19,976,902   $19,882,628 
Due in 2-5 years   149,667,318    144,707,290 
Due in 5-10 years   82,678,874    79,333,563 
Due in more than 10 years   85,884,516    81,867,909 
Mortgage-backed securities   33,273,655    28,738,422 
Redeemable preferred stock   250,000    260,000 
Total  $371,731,265   $354,789,812 
Restricted Assets [Member]  
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]  
Schedule of Fair Value of Fixed Maturity Securities

The table below summarizes unrealized losses on fixed maturities securities that were carried at estimated fair value at June 30, 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 June 30, 2023                              
U.S. Treasury securities and obligations of U.S. Government agencies  $4,212   $385,429   $-   $-   $4,212   $385,429 
Obligations of states and political subdivisions   1,266    150,501    8,304    392,384    9,570    542,885 
Corporate securities including public utilities   1,787    216,540    4,325    228,121    6,112    444,661 
Total unrealized losses  $7,265   $752,470   $12,629   $620,505   $19,894   $1,372,975 
                               
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 Restricted Assets in Cemetery and Mortuary Endowment Care and Pre need Merchandise Funds

Restricted assets as of June 30, 2023, are summarized as follows:

   Amortized Cost   Gross Unrealized Gains   Gross Unrealized Losses   Allowance for Credit Losses   Estimated Fair Value 
June 30, 2023:                         
Fixed maturity securities, available for sale, at estimated fair value:                         
U.S. Treasury securities and obligations of U.S. Government agencies  $389,640   $-   $(4,212)  $-   $385,428 
Obligations of states and political subdivisions   654,307    291    (9,570)   -    645,028 
Corporate securities including public utilities   526,586    38    (6,112)   -    520,512 
Total fixed maturity securities available for sale  $1,570,533   $329   $(19,894)  $-   $1,550,968 
                          
Equity securities at estimated fair value:                         
Common stock:                         
Industrial, miscellaneous and all other  $5,688,802   $858,975   $(318,583)            $6,229,194 
Total equity securities at estimated fair value  $5,688,802   $858,975   $(318,583)       $6,229,194 
                          
Mortgage loans held for investment at amortized cost:                         
Residential construction  $1,379,943                     
Less: Allowance for credit losses  $(2,760)                    
Total mortgage loans held for investment  $1,377,183                     
                          
Cash and cash equivalents (1)  $10,276,918                     
                          
Total restricted assets  $19,434,263                     

 

 

(1)Including cash and cash equivalents of $8,006,323 or the life insurance and mortgage segments.

 

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 June 30, 2023, are as follows:

   Amortized Cost   Gross Unrealized Gains   Gross Unrealized Losses   Allowance for Credit Losses   Estimated Fair Value 
June 30, 2023:                         
Fixed maturity securities, available for sale, at estimated fair value:                         
U.S. Treasury securities and obligations of U.S. Government agencies  $258,053   $658   $(2,402)  $-   $256,309 
Obligations of states and political subdivisions   95,348    -    (1,182)   -    94,166 
Corporate securities including public utilities   76,509    -    (6,359)   -    70,150 
Total fixed maturity securities available for sale  $429,910   $658   $(9,943)  $-   $420,625 
                          
Equity securities at estimated fair value:                         
Common stock:                         
Industrial, miscellaneous and all other  $3,379,217   $705,343   $(189,253)       $3,895,307 
Total equity securities at estimated fair value  $3,379,217   $705,343   $(189,253)       $3,895,307 
                          
Mortgage loans held for investment at amortized cost:                         
Residential construction  $2,272,969                     
Less: Allowance for credit losses  $(1,453)                    
Total mortgage loans held for investment  $2,271,516                     
                          
Real estate held for investment: Residential  $1,172                     
                          
Cash and cash equivalents  $1,077,601                     
                          
Total cemetery perpetual care trust investments  $7,666,221                     
                          
Cemetery perpetual care obligation  $(5,207,198)                    
                          
Trust investments in excess of trust obligations  $2,459,023                             

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

June 30, 2023 (Unaudited)

 

15) Cemetery Perpetual Care Trust Investments and Obligations 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 table below summarizes unrealized losses on fixed maturities securities that were carried at estimated fair value at June 30, 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 June 30, 2023                              
U.S. Treasury securities and obligations of U.S. Government agencies  $2,402   $176,593   $-   $-   $2,402   $176,593 
Obligations of states and political subdivisions   -    -    1,182    94,166    1,182    94,166 
Corporate securities including public utilities   -    -    6,359    70,150    6,359    70,150 
Total unrealized losses  $2,402   $176,593   $7,541   $164,316   $9,943   $340,909 
                               
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 table below presents the amortized cost and estimated fair value of fixed maturity securities available for sale at June 30, 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  $79,058   $79,716 
Due in 2-5 years   255,504    246,743 
Due in 5-10 years   41,086    40,513 
Due in more than 10 years   54,262    53,653 
Total  $429,910   $420,625 
Restricted Assets [Member]  
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]  
Schedule of Investments Classified by Contractual Maturity Date

The table below presents the amortized cost and estimated fair value of fixed maturity securities available for sale at June 30, 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   705,807    694,536 
Due in 5-10 years   111,301    110,683 
Due in more than 10 years   753,425    745,749 
Total  $1,570,533   $1,550,968