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Cemetery Perpetual Care Trust Investments and Obligation and Restricted Assets | 3 Months Ended
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Mar. 31, 2024
Cemetery Perpetual Care Trust Investments And Obligation And Restricted Assets |
Cemetery Perpetual Care Trust Investments and Obligation and Restricted Assets | 15) 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 March 31, 2024, are as follows: Schedule of Investments
|  | Amortized Cost |  |  | Gross Unrealized Gains |  |  | Gross Unrealized Losses |  |  | Allowance for Credit Losses |  |  | Estimated Fair Value |
March 31, 2024: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturity securities, available for sale, at estimated fair value: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities and obligations of U.S. Government agencies |  | $ | 478,900 |  |  | $ | 458 |  |  | $ | (786 | ) |  | $ | - |  |  | $ | 478,572 |
Obligations of states and political subdivisions |  |  | 168,209 |  |  |  | - |  |  |  | (6,002 | ) |  |  | - |  |  |  | 162,207 |
Total fixed maturity securities available for sale |  | $ | 647,109 |  |  | $ | 458 |  |  | $ | (6,788 | ) |  | $ | - |  |  | $ | 640,779 |
Equity securities at estimated fair value: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common stock: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Industrial, miscellaneous and all other |  | $ | 3,657,164 |  |  | $ | 1,066,760 |  |  | $ | (147,635 | ) |  |  |  |  |  | $ | 4,576,289 |
Total equity securities at estimated fair value |  | $ | 3,657,164 |  |  | $ | 1,066,760 |  |  | $ | (147,635 | ) |  |  |  |  |  | $ | 4,576,289 |
Mortgage loans held for investment at amortized cost: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential construction |  | $ | 123,600 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Less: Allowance for credit losses |  |  | (247 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total mortgage loans held for investment |  | $ | 123,353 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accrued investment income |  | $ | 6,968 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 3,021,586 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total cemetery perpetual care trust investments |  | $ | 8,368,975 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cemetery perpetual care obligation |  | $ | (5,384,115 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trust investments in excess of trust obligations |  | $ | 2,984,860 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2024 (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, 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 |  |  |  |  |  |  |  |  |  |  |  |  |
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 March 31, 2024 and December 31, 2023. The tables set forth unrealized losses by duration with the fair value of the related fixed maturity securities: 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 |  |  | Fair Value |
March 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities and obligations of U.S. Government agencies |  | $ | 786 |  |  | $ | 143,234 |  |  | $ | - |  |  | $ | - |  |  | $ | 786 |  |  | $ | 143,234 |
Obligations of states and political subdivisions |  |  | - |  |  |  | - |  |  |  | 6,002 |  |  |  | 162,207 |  |  |  | 6,002 |  |  |  | 162,207 |
Totals |  | $ | 786 |  |  | $ | 143,234 |  |  | $ | 6,002 |  |  | $ | 162,207 |  |  | $ | 6,788 |  |  | $ | 305,441 |
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 |
Totals |  | $ | 574 |  |  | $ | 143,448 |  |  | $ | 5,285 |  |  | $ | 164,179 |  |  | $ | 5,859 |  |  | $ | 307,627 |
SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2024 (Unaudited)
15) | Cemetery Perpetual Care Trust Investments and Obligations and Restricted Assets (Continued)
Relevant holdings were comprised of four securities with fair values aggregating 97.8% of the aggregate amortized cost as of March 31, 2024. Relevant holdings were comprised of four securities with fair values aggregating 98.1% of aggregate amortized cost as of December 31, 2023. No credit losses have been recognized for the three month periods ended March 31, 2024 and 2023, 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 March 31, 2024, 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. Schedule of Investments Classified by Contractual Maturity Date
|  | Amortized |  |  | Estimated Fair |
|  | Cost |  |  | Value |
Due in 1 year |  | $ | 334,878 |  |  | $ | 335,336 |
Due in 2-5 years |  |  | 258,559 |  |  |  | 252,489 |
Due in 5-10 years |  |  | - |  |  |  | - |
Due in more than 10 years |  |  | 53,672 |  |  |  | 52,954 |
Total |  | $ | 647,109 |  |  | $ | 640,779 |
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. SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2024 (Unaudited)
15) | Cemetery Perpetual Care Trust Investments and Obligations and Restricted Assets (Continued)
Restricted assets as of March 31, 2024, are summarized as follows: Schedule of Restricted Assets in Cemetery and Mortuary Endowment Care and Pre need Merchandise Funds
|  | Amortized Cost |  |  | Gross Unrealized Gains |  |  | Gross Unrealized Losses |  |  | Allowance for Credit Losses |  |  | Estimated Fair Value |
March 31, 2024: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturity securities, available for sale, at estimated fair value: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities and obligations of U.S. Government agencies |  | $ | 932,737 |  |  | $ | 5,273 |  |  | $ | (1,370 | ) |  | $ | - |  |  | $ | 936,640 |
Obligations of states and political subdivisions |  |  | 555,848 |  |  |  | 12 |  |  |  | (8,102 | ) |  |  | - |  |  |  | 547,758 |
Corporate securities including public utilities |  |  | 324,253 |  |  |  | 18 |  |  |  | (4,055 | ) |  |  | - |  |  |  | 320,216 |
Total fixed maturity securities available for sale |  | $ | 1,812,838 |  |  | $ | 5,303 |  |  | $ | (13,527 | ) |  | $ | - |  |  | $ | 1,804,614 |
Equity securities at estimated fair value: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common stock: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Industrial, miscellaneous and all other |  | $ | 7,023,615 |  |  | $ | 1,506,405 |  |  | $ | (251,408 | ) |  |  |  |  |  | $ | 8,278,612 |
Total equity securities at estimated fair value |  | $ | 7,023,615 |  |  | $ | 1,506,405 |  |  | $ | (251,408 | ) |  |  |  |  |  | $ | 8,278,612 |
Mortgage loans held for investment at amortized cost: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential construction |  | $ | 183,942 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Less: Allowance for credit losses |  |  | (368 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total mortgage loans held for investment |  | $ | 183,574 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accrued investment income |  | $ | 13,377 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents (1) |  | $ | 10,598,384 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total restricted assets |  | $ | 20,878,561 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(1) |  | Including cash and cash equivalents of $6,925,987 for the 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 $6,930,930 for the life insurance and mortgage segments.
SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2024 (Unaudited)
15) | Cemetery Perpetual Care Trust Investments and Obligations and Restricted Assets (Continued)
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 March 31, 2024 and December 31, 2023. The tables set forth unrealized losses by duration with the fair value of the related fixed maturity securities. 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 |  |  | Fair Value |
March 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities and obligations of U.S. Government agencies |  | $ | 1,370 |  |  | $ | 249,507 |  |  | $ | - |  |  | $ | - |  |  | $ | 1,370 |  |  | $ | 249,507 |
Obligations of states and political subdivisions |  |  | 4,206 |  |  |  | 335,100 |  |  |  | 3,896 |  |  |  | 187,645 |  |  |  | 8,102 |  |  |  | 522,745 |
Corporate securities including public utilities |  |  | 684 |  |  |  | 75,757 |  |  |  | 3,371 |  |  |  | 219,442 |  |  |  | 4,055 |  |  |  | 295,199 |
Totals |  | $ | 6,260 |  |  | $ | 660,364 |  |  | $ | 7,267 |  |  | $ | 407,087 |  |  | $ | 13,527 |  |  | $ | 1,067,451 |
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 |
Totals |  | $ | 1,000 |  |  | $ | 249,877 |  |  | $ | 7,282 |  |  | $ | 673,319 |  |  | $ | 8,282 |  |  | $ | 923,196 |
Relevant holdings were comprised of 15 securities with fair values aggregating 98.7% of the aggregate amortized cost as of March 31, 2024. Relevant holdings were comprised of 12 securities with fair values aggregating 99.1% of the aggregate amortized cost as of December 31, 2023. No credit losses have been recognized for the three month periods ended March 31, 2024 and 2023, since the increase in unrealized losses is primarily a result of increases in interest. 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 March 31, 2024, 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. Schedule of Investments Classified by Contractual Maturity Date
|  | Amortized |  |  | Estimated Fair |
|  | Cost |  |  | Value |
Due in 1 year |  | $ | 681,860 |  |  | $ | 687,133 |
Due in 2-5 years |  |  | 461,092 |  |  |  | 455,800 |
Due in 5-10 years |  |  | 102,422 |  |  |  | 101,308 |
Due in more than 10 years |  |  | 567,464 |  |  |  | 560,373 |
Total |  | $ | 1,812,838 |  |  | $ | 1,804,614 |
See Notes 3 and 8 for additional information regarding restricted assets and cemetery perpetual care trust investments. SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2024 (Unaudited)

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