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Fair Value of Financial Instruments (Tables)
 3 Months Ended
Mar. 31, 2024
Fair Value Disclosures [Abstract]  
Schedule of Fair Value Assets and Liabilities Measured on a Recurring Basis

The following tables summarize Level 1, 2 and 3 financial assets and financial liabilities measured at fair value on a recurring basis by their classification in the condensed consolidated balance sheet as of March 31, 2024:

 

   Total   Quoted Prices in Active Markets for Identical Assets
(Level 1)		   Significant Observable Inputs
(Level 2)		   Significant Unobservable Inputs
(Level 3)		 
Assets accounted for at fair value on a recurring basis                    
Fixed maturity securities available for sale  $375,833,407   $-   $374,601,220   $1,232,187 
Equity securities   15,161,999    15,161,999    -    - 
Loans held for sale   112,678,958    -    -    112,678,958 
Restricted assets (1)   1,804,614    -    1,804,614    - 
Restricted assets (2)   8,278,612    8,278,612    -    - 
Cemetery perpetual care trust investments (1)   640,779    -    640,779    - 
Cemetery perpetual care trust investments (2)   4,576,289    4,576,289    -    - 
Derivatives - loan commitments (3)   5,454,295    -    -    5,454,295 
Total assets accounted for at fair value on a recurring basis  $524,428,953   $28,016,900   $377,046,613   $119,365,440 
                     
Liabilities accounted for at fair value on a recurring basis                    
Derivatives - loan commitments (4)   (3,309,255)   -    -    (3,309,255)

Total liabilities accounted for at fair value on a recurring basis

  $(3,309,255)  $-   $-   $(3,309,255)

 

 

(1)Fixed maturity securities available for sale
(2)Equity securities
(3)Included in other assets on the consolidated balance sheets
(4)Included in other liabilities and accrued expenses on the consolidated balance sheets

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2024 (Unaudited)

 

8) Fair Value of Financial Instruments (Continued)

 

The following tables summarize Level 1, 2 and 3 financial assets and financial liabilities measured at fair value on a recurring basis by their classification in the condensed consolidated balance sheet as of December 31, 2023:

 

   Total   Quoted Prices in Active Markets for Identical Assets
(Level 1)		   Significant Observable Inputs
(Level 2)		   Significant Unobservable Inputs
(Level 3)		 
Assets accounted for at fair value on a recurring basis                    
Fixed maturity securities available for sale  $381,535,986   $-   $380,297,330   $1,238,656 
Equity securities   13,636,071    13,636,071    -    - 
Loans held for sale   126,549,190    -    -    126,549,190 
Restricted assets (1)   1,853,860    -    1,853,860    - 
Restricted assets (2)   7,385,203    7,385,203    -    - 
Cemetery perpetual care trust investments (1)   641,704    -    641,704    - 
Cemetery perpetual care trust investments (2)   4,327,301    4,327,301    -    - 
Derivatives - loan commitments (3)   4,995,486    -    -    4,995,486 
Total assets accounted for at fair value on a recurring basis  $540,924,801   $25,348,575   $382,792,894   $132,783,332 
                     
Liabilities accounted for at fair value on a recurring basis                    
Derivatives - loan commitments (4)  $(3,412,224)  $-   $-   $(3,412,224)
Total liabilities accounted for at fair value on a recurring basis  $(3,412,224)  $-   $-   $(3,412,224)

 

 

(1)Fixed maturity securities available for sale
(2)Equity securities
(3)Included in other assets on the consolidated balance sheets
(4)Included in other liabilities and accrued expenses on the consolidated balance sheets
Schedule of Level 3 Assets and Liabilities Measured at Fair Value on Recurring Basis

For Level 3 assets and liabilities measured at fair value on a recurring basis as of March 31, 2024, the significant unobservable inputs used in the fair value measurements were as follows:

  

          Significant  Range of Inputs     
   Fair Value at   Valuation  Unobservable  Minimum   Maximum   Weighted 
   March 31, 2024   Technique  Input(s)  Value   Value   Average 
Loans held for sale  $112,678,958   Market approach  Investor contract pricing as a percentage of unpaid principal balance   70.0%   108.0%   99.0%
                           
Derivatives - loan commitments (net)   2,145,040   Market approach  Pull-through rate   65.0%   100.0%   85.0%
           Initial-Value   N/A    N/A    N/A 
           Servicing   0 bps    133 bps    38 bps 
                           
Fixed maturity securities available for sale   1,232,187   Broker quotes  Pricing quotes  $98.40   $102.46   $99.86 

 

For Level 3 assets and liabilities measured at fair value on a recurring basis as of December 31, 2023, the significant unobservable inputs used in the fair value measurements were as follows:

 

          Significant  Range of Inputs     
   Fair Value at   Valuation  Unobservable  Minimum   Maximum   Weighted 
   December 31, 2023   Technique  Input(s)  Value   Value   Average 
Loans held for sale  $126,549,190   Market approach  Investor contract pricing as a percentage of unpaid principal balance   70.0%   121.0%   100.0%
                           
Derivatives - loan commitments (net)   1,583,262   Market approach  Pull-through rate   70.0%   99.0%   86.0%
           Initial-Value   N/A    N/A    N/A 
           Servicing   0 bps    119 bps    49 bps 
                           
Fixed maturity securities available for sale   1,238,656   Broker quotes  Pricing quotes  $98.40   $102.46   $99.86 
Schedule of Changes in Consolidated Balance Sheet Line Items Measured Using Level 3 Inputs

The following table is a summary of changes in the condensed consolidated balance sheet line items measured using level 3 inputs for the three month period ended March 31, 2024:

 

   Net Loan Commitments   Loans Held for Sale   Fixed Maturity Securities Available for Sale 
Balance - December 31, 2023  $1,583,262   $126,549,190   $1,238,656 
Originations and purchases   -    465,605,114    - 
Sales, maturities and paydowns   -    (486,050,938)   - 
Transfer to mortgage loans held for investment   -    (1,867,552)   - 
Foreclosed into real estate held for sale   -    (858,977)   - 
Total gains (losses):               
Included in earnings   561,778(1)   9,302,121 (1)   -(2)
Included in other comprehensive income   -    -    (6,469)
                
Balance - March 31, 2024  $2,145,040   $112,678,958   $1,232,187 

 

 

(1)As a component of Mortgage fee income on the condensed consolidated statements of earnings
(2)As a component of Net investment income on the condensed consolidated statements of earnings

 

The following table is a summary of changes in the condensed consolidated balance sheet line items measured using level 3 inputs for the three month period ended March 31, 2023:

 

   Net Loan Commitments   Loans Held for Sale   Fixed Maturity Securities Available for Sale 
Balance - December 31, 2022  $2,706,877   $141,179,620   $1,435,519 
Originations and purchases   -    531,867,796    - 
Sales, maturities and paydowns   -    (511,909,942)   - 
Total gains (losses):               
Included in earnings   677,952 (1)    11,877,930 (1)   -(2)
Included in other comprehensive income   -    -    - 
                
Balance - March 31, 2023  $3,384,829   $173,015,404   $1,435,519 

 

 

(1)As a component of Mortgage fee income on the condensed consolidated statements of earnings
(2)As a component of Net investment income on the condensed consolidated statements of earnings
Schedule of Financial Instruments Carried at Other Than Fair Value

The carrying values and estimated fair values for such financial instruments, and their corresponding placement in the fair value hierarchy, are summarized as follows as of March 31, 2024:

 

   Carrying Value   Level 1   Level 2   Level 3   Total Estimated Fair Value 
Assets                         
Mortgage loans held for investment                         
Residential  $103,574,492   $-   $-   $100,743,889   $100,743,889 
Residential construction   99,150,788    -    -    99,150,788    99,150,788 
Commercial   65,911,504    -    -    65,471,144    65,471,144 
Mortgage loans held for investment, net  $268,636,784   $-   $-   $265,365,821   $265,365,821 
Policy loans   13,248,999    -    -    13,248,999    13,248,999 
Insurance assignments, net (1)   45,123,053    -    -    45,123,053    45,123,053 
Restricted assets (2)   183,574    -    -    183,574    183,574 
Cemetery perpetual care trust investments (2)   123,353    -    -    123,353    123,353 
Mortgage servicing rights, net   3,318,155    -    -    4,767,315    4,767,315 
                          
Liabilities                         
Bank and other loans payable  $(104,335,116)  $-   $-   $(85,370,689)  $(85,370,689)
Policyholder account balances (3)   (38,923,981)   -    -    (46,252,703)   (46,252,703)
Future policy benefits - annuities (3)   (106,089,620)   -    -    (100,231,984)   (100,231,984)

 

 

(1)Included in other investments and policy loans on the condensed consolidated balance sheets
(2)Mortgage loans held for investment
(3)Included in future policy benefits and unpaid claims on the condensed consolidated balance sheets

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2024 (Unaudited)

 

8) Fair Value of Financial Instruments (Continued)

 

The carrying values and estimated fair values for such financial instruments, and their corresponding placement in the fair value hierarchy, are summarized as follows as of December 31, 2023:

 

   Carrying Value   Level 1   Level 2   Level 3   Total Estimated Fair Value 
Assets                         
Mortgage loans held for investment                         
Residential  $99,519,750   $-   $-   $96,998,106   $96,998,106 
Residential construction   103,529,896    -    -    103,529,896    103,529,896 
Commercial   72,567,191    -    -    72,149,530    72,149,530 
Mortgage loans held for investment, net  $275,616,837   $-   $-   $272,677,532   $272,677,532 
Policy loans   13,264,183    -    -    13,264,183    13,264,183 
Insurance assignments, net (1)   44,051,486    -    -    44,051,486    44,051,486 
Restricted assets (2)   675,219    -    -    675,219    675,219 
Cemetery perpetual care trust investments (2)   246,865    -    -    246,865    246,865 
Mortgage servicing rights, net   3,461,146    -    -    4,543,657    4,543,657 
                          
Liabilities                         
Bank and other loans payable  $(105,555,137)  $-   $-   $(105,555,137)  $(105,555,137)
Policyholder account balances (3)   (39,245,123)   -    -    (48,920,691)   (48,920,691)
Future policy benefits - annuities (3)   (106,285,010)   -    -    (102,177,585)   (102,177,585)

 

 

(1)Included in other investments and policy loans on the consolidated balance sheets
(2)Mortgage loans held for investment
(3)Included in future policy benefits and unpaid claims on the consolidated balance sheets