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Business Segment Information
 12 Months Ended
Dec. 31, 2023
Segment Reporting [Abstract]  
Business Segment Information

15) Business Segment Information

 

Description of Products and Services by Segment

 

The Company has three reportable business segments: life insurance, cemetery and mortuary, and mortgage. The Company’s life insurance segment consists of life insurance premiums and operating expenses from the sale of insurance products sold by the Company’s independent agency force and net investment income derived from investing policyholder and segment surplus funds. The Company’s cemetery and mortuary segment consists of revenues and operating expenses from the sale of at-need cemetery and mortuary merchandise and services at its mortuaries and cemeteries, pre-need sales of cemetery spaces after collection of 10% or more of the purchase price and the net investment income from investing segment surplus funds. The Company’s mortgage segment consists of fee income and expenses from the originations of residential mortgage loans and interest earned and interest expenses from warehousing pre-sold loans before the funds are received from financial institutional investors.

 

Measurement of Segment Profit or Loss and Segment Assets

 

The accounting policies of the reportable segments are the same as those described in the Significant Accounting Principles. Intersegment revenues are recorded at cost plus an agreed upon intercompany profit and are eliminated upon consolidation.

 

Factors Management Used to Identify the Enterprise’s Reportable Segments

 

The Company’s reportable segments are business units that are managed separately due to the different products provided and the need to report separately to the various regulatory jurisdictions. The Company regularly reviews the quantitative thresholds and other criteria to determine when other business segments may need to be reported.

 

 

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2023 and 2022

 

15) Business Segment Information (Continued)

 

   Insurance   Mortuary   Mortgage   Eliminations   Consolidated 
   Year Ended December 31, 2023 
   Life   Cemetery/       Intercompany     
   Insurance   Mortuary   Mortgage   Eliminations   Consolidated 
Revenues:                         
From external sources:                         
Revenue from customers  $114,735,304   $27,864,811   $98,071,104    -   $240,671,219 
Net investment income   67,811,926    2,951,577    1,579,544    -    72,343,047 
Gains (losses) on investments and other assets   962,824    717,312    157,206    -    1,837,342 
Other revenues   1,666,020    404,256    1,575,606    -    3,645,882 
Intersegment revenues:                         
Net investment income   8,203,306    340,001    531,406    (9,074,713)   - 
Total revenues   193,379,380    32,277,957    101,914,866    (9,074,713)   318,497,490 
Expenses:                         
Death, surrenders and other policy benefits   66,002,863    -    -    -    66,002,863 
Increase in future policy benefits   34,008,997    -    -    -    34,008,997 
Amortization of deferred policy and pre-need acquisition costs and value of business acquired   17,485,699    538,639    -    -    18,024,338 
Selling, general and administrative expenses:                         
Commissions   3,963,185    1,777,071    34,189,300    -    39,929,556 
Personnel   26,769,211    9,722,659    46,649,889    -    83,141,759 
Advertising   638,071    663,113    2,409,261    -    3,710,445 
Rent and rent related   414,564    159,877    6,282,696    -    6,857,137 
Depreciation on property and equipment   880,116    812,641    658,904    -    2,351,661 
Provision for loan loss reserve   -    -    -    -    - 
Cost related to funding mortgage loans   -    -    6,440,439    -    6,440,439 
Intersegment   310,689    143,652    1,930,370    (2,384,711)   - 
Other   12,991,888    4,961,320    14,105,648    -    32,058,856 
Interest expense:                         
Intersegment   560,718    247,664    5,881,620    (6,690,002)   - 
Other   4,081,348    955    783,024    -    4,865,327 
Costs of goods and services sold-mortuaries and cemeteries   -    4,805,700    -    -    4,805,700 
Total benefits and expenses   168,107,349    23,833,291    119,331,151    (9,074,713)   302,197,078 
Earnings (loss) before income taxes  $25,272,031   $8,444,666   $(17,416,285)  $-   $16,300,412 
Income tax benefit (expense)   (3,655,148)   (2,131,289)   3,981,083    -    (1,805,354)
Net earnings (loss)  $21,616,883   $6,313,377   $(13,435,202)  $-   $14,495,058 
                          
Identifiable assets  $1,325,287,933   $95,059,724   $97,018,754   $(93,063,440)  $1,424,302,971 
                          
Goodwill  $2,765,570   $2,488,213   $-   $-   $5,253,783 

 

 

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2023 and 2022

 

15) Business Segment Information (Continued)

 

   Insurance   Mortuary   Mortgage   Eliminations   Consolidated 
   Year Ended December 31, 2022 
   Life   Cemetery/       Intercompany     
   Insurance   Mortuary   Mortgage   Eliminations   Consolidated 
Revenues:                         
From external sources:                         
Revenue from customers  $105,144,646   $26,993,855   $173,356,675    -   $305,495,176 
Net investment income   62,565,021    2,444,599    1,187,972    -    66,197,592 
Gains (losses) on investments and other assets   (459,462)   (796,096)   398,098    -    (857,460)
Other revenues   1,932,402    305,073    16,579,545    -    18,817,020 
Intersegment revenues:                         
Net investment income   6,601,132    451,139    356,574    (7,408,845)   - 
Total revenues   175,783,739    29,398,570    191,878,864    (7,408,845)   389,652,328 
Expenses:                         
Death, surrenders and other policy benefits   64,066,432    -    -    -    64,066,432 
Increase in future policy benefits   28,858,969    -    -    -    28,858,969 
Amortization of deferred policy and pre-need acquisition costs and value of business acquired   17,352,803    597,399    -    -    17,950,202 
Selling, general and administrative expenses:                         
Commissions   4,097,680    1,372,200    57,851,212    -    63,321,092 
Personnel   26,285,207    9,305,429    64,520,887    -    100,111,523 
Advertising   1,649,273    628,114    3,420,611    -    5,697,998 
Rent and rent related   384,908    163,182    6,334,923    -    6,883,013 
Depreciation on property and equipment   1,036,521    759,415    700,970    -    2,496,906 
Provision for loan loss reserve   -    -    -    -    - 
Cost related to funding mortgage loans   -    -    7,540,041    -    7,540,041 
Intersegment   232,915    160,690    1,795,507    (2,189,112)   - 
Other   13,190,827    5,321,730    27,285,196    -    45,797,753 
Interest expense:                         
Intersegment   462,753    274,911    4,482,069    (5,219,733)   - 
Other   3,969,905    710    3,859,828    -    7,830,443 
Costs of goods and services sold-mortuaries and cemeteries   -    4,721,094    -    -    4,721,094 
Total benefits and expenses   161,588,193    23,304,874    177,791,244    (7,408,845)   355,275,466 
Earnings before income taxes  $14,195,546   $6,093,696   $14,087,620   $-   $34,376,862 
Income tax expense   (4,034,979)   (1,523,954)   (3,127,627)   -    (8,686,560)
Net earnings  $10,160,567   $4,569,742   $10,959,993   $-   $25,690,302 
                          
Identifiable assets  $1,246,840,586   $82,320,929   $219,872,163   $(93,174,569)  $1,455,859,109 
                          
Goodwill  $2,765,570   $2,488,213   $-   $-   $5,253,783 

 

 

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2023 and 2022