XML 33 R17.htm IDEA: XBRL DOCUMENT v3.24.1
Cemetery Perpetual Care Trust Investments and Obligation and Restricted Assets
 12 Months Ended
Dec. 31, 2023
Cemetery Perpetual Care Trust Investments And Obligation And Restricted Assets  
Cemetery Perpetual Care Trust Investments and Obligation and Restricted Assets

8) Cemetery Perpetual Care Trust Investments and Obligation and Restricted Assets

 

Cemetery Perpetual Care Trust Investments and Obligation

 

State law requires the Company to pay into endowment care trusts a portion of the proceeds from the sale of certain cemetery property interment rights for cemeteries that have established an endowment care trust. These endowment care trusts are defined as Variable Interest Entities pursuant to GAAP. The Company is the primary beneficiary of these trusts, as it absorbs both the losses and any expenses associated with the trusts. The Company has consolidated cemetery endowment care trust investments with a corresponding amount recorded as Cemetery Perpetual Care Obligation in the accompanying consolidated balance sheets.

 

The components of the cemetery perpetual care investments and obligation as of December 31, 2023 are as follows:

  

   Amortized Cost   Gross Unrealized Gains   Gross Unrealized Losses   Estimated Fair Value 
December 31, 2023:                    
Fixed maturity securities, available for sale, at estimated fair value:                    
U.S. Treasury securities and obligations of U.S. Government agencies  $477,797   $302   $(574)  $477,525 
Obligations of states and political subdivisions   115,792    -    (5,114)   110,678 
Corporate securities including public utilities   53,672    -    (171)   53,501 
Total fixed maturity securities available for sale  $647,261   $302   $(5,859)  $641,704 
                     
Equity securities at estimated fair value:                    
Common stock:                    
Industrial, miscellaneous and all other  $3,614,392   $859,680   $(146,771)  $4,327,301 
Total equity securities at estimated fair value  $3,614,392   $859,680   $(146,771)  $4,327,301 
                     
Mortgage loans held for investment at amortized cost:                    
Residential construction  $247,360             
Less: Allowance for credit losses   (495)            
Total mortgage loans held for investment  $246,865             
                  
Cash and cash equivalents  $2,867,047             
                  
Total cemetery perpetual care trust investments  $8,082,917             
                 
Cemetery perpetual care obligation  $(5,326,196)            
                  
Trust investments in excess of trust obligations  $2,756,721            

 

 

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2023 and 2022

 

8) 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                

 

Fixed Maturity Securities

 

The table below summarizes unrealized losses on fixed maturity securities available for sale that were carried at estimated fair value as of December 31, 2023 and 2022. The unrealized losses were primarily related to interest rate fluctuations. 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, 2023                              
U.S. Treasury securities and obligations of U.S. Government agencies  $574   $143,448   $-   $-   $574   $143,448 
Obligations of states and political subdivisions   -    -    5,114    110,678    5,114    110,678 
Corporate securities including public utilities   -    -    171    53,501    171    53,501 
Total unrealized losses  $574   $143,448   $5,285   $164,179   $5,859   $307,627 
                               
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 

 

Relevant holdings were comprised of four securities with fair values aggregating 98.1% of aggregate amortized cost as of December 31, 2023. There were five securities with fair values aggregating 96.4% of aggregate amortized cost as of December 31, 2022. No credit losses have been recognized for 2023 and 2022, since the increase in unrealized losses is primarily a result of increases in interest rates. See Note 2 for additional information regarding the Company’s evaluation of the allowance for credit losses for fixed maturity securities available for sale.

 

 

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2023 and 2022

 

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

 

The table below presents the amortized cost and estimated fair value of fixed maturity securities available for sale as of December 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  $333,775   $334,077 
Due in 2-5 years   259,814    254,126 
Due in 5-10 years   -    - 
Due in more than 10 years   53,672    53,501 
Total  $647,261   $641,704 

 

Restricted Assets

 

The Company has also established certain restricted assets to provide for future merchandise and service obligations incurred in connection with its pre-need sales for its cemetery and mortuary segment.

 

Restricted cash also represents escrows held for borrowers and investors under servicing and appraisal agreements relating to mortgage loans, funds held by warehouse banks in accordance with loan purchase agreements and funds held in escrow for certain real estate construction development projects. Additionally, the Company elected to maintain its medical benefit fund without change from the prior year and has included this amount as a component of restricted cash. These restricted cash items are for the Company’s life insurance and mortgage segments.

 

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

  

   Amortized Cost   Gross Unrealized Gains   Gross Unrealized Losses   Estimated Fair Value 
December 31, 2023:                    
Fixed maturity securities, available for sale, at estimated fair value:                    
U.S. Treasury securities and obligations of U.S. Government agencies  $932,737   $1,433   $(1,000)  $933,170 
Obligations of states and political subdivisions   652,770    305    (4,542)   648,533 
Corporate securities including public utilities   274,688    209    (2,740)   272,157 
Total fixed maturity securities available for sale  $1,860,195   $1,947   $(8,282)  $1,853,860 
                     
Equity securities at estimated fair value:                    
Common stock:                    
Industrial, miscellaneous and all other  $6,516,044   $1,117,155   $(247,996)  $7,385,203 
Total equity securities at estimated fair value  $6,516,044   $1,117,155   $(247,996)  $7,385,203 
                     
Mortgage loans held for investment at amortized cost:                    
Residential construction  $676,572                
Less: Allowance for credit losses   (1,353)               
Total mortgage loans held for investment  $675,219                
                     
Cash and cash equivalents (1)  $10,114,694                
                     
Total restricted assets  $20,028,976                

 

 

(1)Including cash and cash equivalents of $6,930,933 for the life insurance and mortgage segments.

 

 

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2023 and 2022

 

8) 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.

 

A surplus note receivable in the amount of $4,000,000 at December 31, 2023 and 2022, from Security National Life, was eliminated in consolidation.

 

Fixed Maturity Securities

 

The table below summarizes unrealized losses on fixed maturity securities available for sale that were carried at estimated fair value as of December 31, 2023 and 2022. The unrealized losses were primarily related to interest rate fluctuations. 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, 2023                              
U.S. Treasury securities and obligations of U.S. Government agencies  $1,000   $249,877   $-   $-   $1,000   $249,877 
Obligations of states and political subdivisions   -    -    4,542    451,985    4,542    451,985 
Corporate securities including public utilities   -    -    2,740    221,334    2,740    221,334 
Total unrealized losses  $1,000   $249,877   $7,282   $673,319   $8,282   $923,196 
                               
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 

 

 

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2023 and 2022

 

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

 

Relevant holdings were comprised of 12 securities with fair values aggregating 99.1% of aggregate amortized cost as of December 31, 2023. Relevant holdings were comprised of 17 securities with fair values aggregating of 98.2% of aggregate amortized cost at December 31, 2022. No credit losses have been recognized for 2023 and 2022, since the increase in unrealized losses is primarily a result of increases in interest rates. See Note 3 for additional information regarding the Company’s evaluation of the allowance for credit losses for fixed maturity securities available for sale.

 

The table below presents the amortized cost and estimated fair value of fixed maturity securities available for sale as of December 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  $681,860   $683,293 
Due in 2-5 years   462,189    457,618 
Due in 5-10 years   147,422    147,121 
Due in more than 10 years   568,724    565,828 
Total  $1,860,195   $1,853,860 

 

See Notes 1, 2 and 17 for additional information regarding restricted assets and cemetery perpetual care trust investments.

 

 

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2023 and 2022