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Investments (Tables)

6 Months Ended

Jun. 30, 2024

Investments, Debt and Equity Securities [Abstract]

Schedule of Investments

The Company’s investments as of June 30, 2024 are summarized as follows:

 Schedule of Investments 

		Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses (1)				Allowance for Credit Losses				Estimated Fair Value
June 30, 2024:
Fixed maturity securities, available for sale, at estimated fair value:
U.S. Treasury securities and obligations of U.S. Government agencies		$	84,577,137			$	92,975			$	(961,257	)		$	-			$	83,708,855
Obligations of states and political subdivisions			6,030,338				348				(289,225	)			-				5,741,461
Corporate securities including public utilities			232,747,782				2,272,483				(7,783,014	)			(382,211	)			226,855,040
Mortgage-backed securities			36,994,344				260,021				(4,449,645	)			(12,049	)			32,792,671
Redeemable preferred stock			250,000				10,000				-				-				260,000
Total fixed maturity securities available for sale		$	360,599,601			$	2,635,827			$	(13,483,141	)		$	(394,260	)		$	349,358,027
Equity securities at estimated fair value:
Common stock:
Industrial, miscellaneous and all other		$	11,266,705			$	4,219,352			$	(466,878	)						$	15,019,179
Total equity securities at estimated fair value		$	11,266,705			$	4,219,352			$	(466,878	)						$	15,019,179
Mortgage loans held for investment at amortized cost:
Residential		$	103,667,890
Residential construction			112,571,713
Commercial			73,221,774
Less: Unamortized deferred loan fees, net			(1,952,616	)
Less: Allowance for credit losses			(2,853,852	)
Less: Net discounts			(311,378	)
Total mortgage loans held for investment		$	284,343,531
Real estate held for investment - net of accumulated depreciation:
Residential		$	60,200,289
Commercial			128,120,364
Total real estate held for investment		$	188,320,653
Real estate held for sale:
Residential		$	858,977
Commercial			151,553
Total real estate held for sale		$	1,010,530
Other investments and policy loans at amortized cost:
Policy loans		$	13,472,198
Insurance assignments			48,406,690
Federal Home Loan Bank stock (2)			2,350,500
Other investments			9,826,523
Less: Allowance for credit losses for insurance assignments			(1,535,324	)
Total other investments and policy loans		$	72,520,587
Accrued investment income		$	8,838,006
Total investments		$	919,410,513

(1)		Gross unrealized losses are net of allowance for credit losses
(2)		Includes $553,900 of Membership stock and $1,796,600 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, 2024 (Unaudited)

3) Investments (Continued)

The Company’s investments as of December 31, 2023 are summarized as follows:

		Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses (1)				Allowance for Credit 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		$	111,450,753			$	344,425			$	(1,416,448	)		$	-			$	110,378,730
Obligations of states and political subdivisions			6,524,083				500				(319,260	)			-				6,205,323
Corporate securities including public utilities			232,299,727				3,688,642				(7,145,507	)			(308,500	)			228,534,362
Mortgage-backed securities			40,359,878				506,647				(4,702,905	)			(6,049	)			36,157,571
Redeemable preferred stock			250,000				10,000				-				-				260,000
Total fixed maturity securities available for sale		$	390,884,441			$	4,550,214			$	(13,584,120	)		$	(314,549	)		$	381,535,986
Equity securities at estimated fair value:
Common stock:
Industrial, miscellaneous and all other		$	10,571,505			$	3,504,141			$	(439,575	)						$	13,636,071
Total equity securities at estimated fair value		$	10,571,505			$	3,504,141			$	(439,575	)						$	13,636,071
Mortgage loans held for investment at amortized cost:
Residential		$	103,153,587
Residential construction			104,052,748
Commercial			74,176,538
Less: Unamortized deferred loan fees, net			(1,623,226	)
Less: Allowance for credit losses			(3,818,653	)
Less: Net discounts			(324,157	)
Total mortgage loans held for investment		$	275,616,837
Real estate held for investment - net of accumulated depreciation:
Residential		$	40,924,865
Commercial			142,494,427
Total real estate held for investment		$	183,419,292
Real estate held for sale:
Residential		$	-
Commercial			3,028,973
Total real estate held for sale		$	3,028,973
Other investments and policy loans at amortized cost:
Policy loans		$	13,264,183
Insurance assignments			45,605,322
Federal Home Loan Bank stock (2)			2,279,800
Other investments			9,809,148
Less: Allowance for credit losses for insurance assignments			(1,553,836	)
Total policy loans and other investments		$	69,404,617
Accrued investment income		$	10,170,790
Total investments		$	936,812,566

(1) Gross unrealized losses are net of allowance for credit losses

(2) Includes $530,900 of Membership stock and $1,748,900 of Activity stock due to short-term advances and letters of credit.

Schedule of Fair Value of 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				Combined Fair Value
June 30, 2024
U.S. Treasury securities and obligations of U.S. Government agencies		$	112,212			$	42,279,344			$	849,045			$	22,526,803			$	961,257			$	64,806,147
Obligations of states and political subdivisions			-				-				289,225				5,291,113				289,225				5,291,113
Corporate securities			593,138				31,797,535				7,189,876				117,820,419				7,783,014				149,617,954
Mortgage-backed securities			9,481				2,816,918				4,440,164				22,812,836				4,449,645				25,629,754
Totals		$	714,831			$	76,893,797			$	12,768,310			$	168,451,171			$	13,483,141			$	245,344,968
December 31, 2023
U.S. Treasury securities and obligations of U.S. Government agencies		$	29,394			$	9,436,090			$	1,387,054			$	70,885,403			$	1,416,448			$	80,321,493
Obligations of states and political subdivisions			11,105				470,325				308,155				5,284,498				319,260				5,754,823
Corporate securities			529,660				32,507,773				6,615,847				107,556,216				7,145,507				140,063,989
Mortgage-backed securities			29,799				2,260,445				4,673,106				22,184,174				4,702,905				24,444,619
Totals		$	599,958			$	44,674,633			$	12,984,162			$	205,910,291			$	13,584,120			$	250,584,924

Schedule of Credit Quality of Fixed Maturity Security Portfolio by NAIC Designation

 Schedule of Credit Quality of Fixed Maturity Security Portfolio by NAIC Designation

		June 30, 2024								December 31, 2023
NAIC Designation		Amortized Cost				Estimated Fair Value				Amortized Cost				Estimated Fair Value
1		$	188,735,664			$	182,709,415			$	221,933,425			$	216,975,288
2			164,475,503				159,828,103				161,062,016				157,346,803
3			6,067,391				5,716,888				6,418,829				5,953,542
4			827,044				806,121				982,290				948,478
5			242,804				37,500				236,648				51,875
6			1,195				-				1,233				-
Total		$	360,349,601			$	349,098,027			$	390,634,441			$	381,275,986

Schedule of Allowance for Credit Losses on Fixed Maturity Securities Available for Sale

The following tables present a roll forward of the Company’s allowance for credit losses on fixed maturity securities available for sale for the three month periods ended June 30, 2024:

Schedule of Allowance for Credit Losses on Fixed Maturity Securities Available for Sale 

		Three Months Ended June 30, 2024
		U.S. Treasury securities and obligations of U.S. Government agencies				Obligations of states and political subdivisions				Corporate securities including public utilities				Mortgage-backed securities				Total
Beginning balance - March 31, 2024		$	-			$	-			$	398,500			$	12,049			$	410,549
Additions for credit losses not previously recorded			-				-				-				-				-
Change in allowance on securities with previous allowance			-				-				(16,289	)			-				(16,289	)
Reductions for securities sold during the period			-				-				-				-				-
Reductions for securities with credit losses due to intent to sell			-				-				-				-				-
Write-offs charged against the allowance			-				-				-				-				-
Recoveries of amounts previously written off			-				-				-				-				-
Ending Balance - June 30, 2024		$	-			$	-			$	382,211			$	12,049			$	394,260

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

June 30, 2024 (Unaudited)

3) Investments (Continued)

		Three Months Ended June 30, 2023
		U.S. Treasury securities and obligations of U.S. Government agencies				Obligations of states and political subdivisions				Corporate securities including public utilities				Mortgage-backed securities				Total
Beginning balance - March 31, 2023		$	-			$	-			$	179,500			$	-			$	179,500
Additions for credit losses not previously recorded			-				-				-				-				-
Change in allowance on securities with previous allowance			-				-				44,505				-				44,505
Reductions for securities sold during the period			-				-				-				-				-
Reductions for securities with credit losses due to intent to sell			-				-				-				-				-
Write-offs charged against the allowance			-				-				-				-				-
Recoveries of amounts previously written off			-				-				-				-				-
Ending Balance - June 30, 2023		$	-			$	-			$	224,005			$	-			$	224,005

The following tables present a roll forward of the Company’s allowance for credit losses on fixed maturity securities available for sale for the six month periods ended June 30, 2024:

		Six Months Ended June 30, 2024
		U.S. Treasury securities and obligations of U.S. Government agencies				Obligations of states and political subdivisions				Corporate securities including public utilities				Mortgage-backed securities				Total
Beginning balance - January 1, 2024		$	-			$	-			$	308,500			$	6,049			$	314,549
Additions for credit losses not previously recorded			-				-				30,000				6,000				36,000
Change in allowance on securities with previous allowance			-				-				43,711				-				43,711
Reductions for securities sold during the period			-				-				-				-				-
Reductions for securities with credit losses due to intent to sell			-				-				-				-				-
Write-offs charged against the allowance			-				-				-				-				-
Recoveries of amounts previously written off			-				-				-				-				-
Ending Balance - June 30, 2024		$	-			$	-			$	382,211			$	12,049			$	394,260

		Six Months Ended June 30, 2023
		U.S. Treasury securities and obligations of U.S. Government agencies				Obligations of states and political subdivisions				Corporate securities including public utilities				Mortgage-backed securities				Total
Beginning balance - January 1, 2023		$	-			$	-			$	-			$	-			$	-
Balance		$	-			$	-			$	-			$	-			$	-
Additions for credit losses not previously recorded			-				-				179,500				-				179,500
Change in allowance on securities with previous allowance			-				-				44,505				-				44,505
Reductions for securities sold during the period			-				-				-				-				-
Reductions for securities with credit losses due to intent to sell			-				-				-				-				-
Write-offs charged against the allowance			-				-				-				-				-
Recoveries of amounts previously written off			-				-				-				-				-
Ending Balance - June 30, 2023		$	-			$	-			$	224,005			$	-			$	224,005
Balance		$	-			$	-			$	224,005			$	-			$	224,005

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 as of June 30, 2024, 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.

Schedule of Investments Classified by Contractual Maturity Date 

		Amortized Cost				Estimated Fair Value
Due in 1 year		$	28,273,026			$	28,077,221
Due in 2-5 years			127,055,688				124,443,548
Due in 5-10 years			102,523,947				101,192,513
Due in more than 10 years			65,502,596				62,592,074
Mortgage-backed securities			36,994,344				32,792,671
Redeemable preferred stock			250,000				260,000
Total		$	360,599,601			$	349,358,027

Schedule of Major Categories of Net Investment Income

Information regarding sales of fixed maturity securities available for sale is presented as follows.

Schedule of Major Categories of Net Investment Income 

		2024				2023				2024				2023
		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Proceeds from sales		$	427,253			$	-			$	607,242			$	955,610
Gross realized gains			24,031				-				24,334				11,257
Gross realized losses			(36,646	)			-				(37,499	)			(54,104	)

Major categories of net investment income were as follows:

		2024				2023				2024				2023
		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Fixed maturity securities available for sale		$	4,345,704			$	4,143,768			$	8,749,262			$	8,156,500
Equity securities			176,448				140,709				344,596				281,216
Mortgage loans held for investment			7,021,559				9,467,407				15,835,595				17,955,063
Real estate held for investment and sale			3,285,019				4,897,672				6,800,080				8,262,596
Policy loans			189,131				207,441				490,398				407,655
Insurance assignments			4,886,015				4,461,813				9,962,563				9,230,016
Other investments			201,342				213,103				400,301				342,160
Cash and cash equivalents			1,715,910				780,146				3,406,867				1,567,907
Gross investment income			21,821,128				24,312,059				45,989,662				46,203,113
Investment expenses			(3,776,320	)			(4,140,085	)			(7,998,286	)			(8,256,256	)
Net investment income		$	18,044,808			$	20,171,974			$	37,991,376			$	37,946,857

 

Schedule of Assets on Deposit With Life Insurance

Assets on deposit with life insurance regulatory authorities as required by law were as follows:

Schedule of Assets on Deposit With Life Insurance 

		As of June 30, 2024				As of December 31, 2023
Fixed maturity securities available for sale at estimated fair value		$	6,202,936			$	6,206,650
Other investments			400,000				400,000
Cash and cash equivalents			1,424,707				1,909,215
Total assets on deposit		$	8,027,643			$	8,515,865

Assets held in trust related to third-party reinsurance agreements were as follows:

		As of June 30, 2024				As of December 31, 2023
Fixed maturity securities available for sale at estimated fair value		$	28,134,790			$	27,903,952
Cash and cash equivalents			776,883				2,101,052
Total assets on deposit		$	28,911,673			$	30,005,004

The Company is a member of the Federal Home Loan Bank of Des Moines and Dallas (“FHLB”). Assets pledged as collateral with the FHLB are presented below. These pledged securities are used as collateral for any FHLB cash advances.

		As of June 30, 2024				As of December 31, 2023
Fixed maturity securities available for sale at estimated fair value		$	58,645,012			$	93,903,089
Total assets pledged as collateral		$	58,645,012			$	93,903,089

Schedule of Commercial Real Estate Investment

The Company’s commercial real estate held for investment is summarized as follows as of the respective dates indicated:

Schedule of Commercial Real Estate Investment 

		Net Book Value								Total Square Footage
		June 30, 2024				December 31, 2023				June 30, 2024				December 31, 2023
Utah (1)		$	128,101,446			$	142,475,177				546,941				625,920
Louisiana			18,918				19,250				1,622				1,622
		$	128,120,364			$	142,494,427				548,563				627,542

(1) Includes Center53

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

June 30, 2024 (Unaudited)

3) Investments (Continued)

The Company’s commercial real estate held for sale is summarized as follows as of the respective dates indicated:

		Net Book Value								Total Square Footage
		June 30, 2024				December 31, 2023				June 30, 2024				December 31, 2023
Mississippi (1)		$	151,553			$	3,028,973				-				19,694
		$	151,553			$	3,028,973				-				19,694

(1) Consists of approximately 93 acres of undeveloped land for $151,553 for 2024 and 2023. The remaining property for $2,877,420 was sold in February 2024 for a gain of approximately $250,000.

Schedule of Residential Real Estate Investment

The Company’s residential real estate held for investment is summarized as follows as of the respective dates indicated:

Schedule of Residential Real Estate Investment 

		Net Book Value
		June 30, 2024				December 31, 2023
Utah (1)		$	60,200,289			$	40,924,865
		$	60,200,289			$	40,924,865

(1) Includes multiple residential subdivision development projects

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

June 30, 2024 (Unaudited)

3) Investments (Continued)

The following table presents additional information regarding the Company’s residential subdivision development in Utah:

		June 30, 2024				December 31, 2023
Lots developed			50				42
Lots to be developed			1,293				1,145
Book Value		$	60,019,930			$	40,739,201

The Company’s residential real estate held for sale is summarized as follows as of the respective dates indicated:

		Net Book Value
		June 30, 2024				December 31, 2023
Utah		$	858,977			$	-
		$	858,977			$	-

Schedule of Real Estate Owned and Occupied by the Company

The primary business units of the Company occupy a portion of the real estate owned by the Company. As of June 30, 2024, real estate owned and occupied by the Company is summarized as follows:

Schedule of Real Estate Owned and Occupied by the Company 

Location		Business Segment		Approximate Square Footage				Square Footage Occupied by the Company
433 Ascension Way, Floors 4, 5 and 6, Salt Lake City, UT - Center53 Building 2 (1)		Corporate Offices, Life Insurance, Cemetery/Mortuary Operations, and Mortgage Operations and Sales			221,000				50	%
1818 Marshall Street, Shreveport, LA (2)		Life Insurance Operations			12,274				100	%
812 Sheppard Street, Minden, LA (2) (3)		Life Insurance Sales			1,560				100	%

(1) Included in real estate held for investment on the condensed consolidated balance sheets

(2) Included in property and equipment on the condensed consolidated balance sheets

(3) Listed for sale

Schedule of Allowance for Loan Losses

The following table presents a roll forward of the allowance for credit losses as of the dates indicated:

Schedule of Allowance for Loan Losses 

		Three Months Ended
		Commercial				Residential				Residential Construction				Total
Beginning balance - March 31, 2024		$	859,622			$	1,862,495			$	199,497			$	2,921,614
Adoption of ASU 2016-13 (1)			555,807				(192,607	)			301,830				665,030
Change in provision for credit losses			(10,299	)			(83,109	)			25,646				(67,762	)
Charge-offs			-				-				-				-
Ending balance - June 30, 2024		$	849,323			$	1,779,386			$	225,143			$	2,853,852
Beginning balance - March 31, 2023		$	758,131			$	1,685,100			$	292,188			$	2,735,419
Change in provision for credit losses (2)			72,924				(95,240	)			(49,543	)			(71,859	)
Charge-offs			-				-				-				-
Ending balance - June 30, 2023		$	831,055			$	1,589,860			$	242,645			$	2,663,560

		Six Months Ended
		Commercial				Residential				Residential Construction				Total
Beginning balance - January 1, 2024		$	1,219,653			$	2,390,894			$	208,106			$	3,818,653
Change in provision for credit losses (2)			(370,330	)			(611,508	)			17,037				(964,801	)
Charge-offs			-				-				-				-
Ending balance - June 30, 2024		$	849,323			$	1,779,386			$	225,143			$	2,853,852
Beginning balance - January 1, 2023		$	187,129			$	1,739,980			$	43,202			$	1,970,311
Adoption of ASU 2016-13 (1)			555,807				(192,607	)			301,830				665,030
Change in provision for credit losses (2)			88,119				42,487				(102,387	)			28,219
Charge-offs			-				-				-				-
Ending balance - June 30, 2023		$	831,055			$	1,589,860			$	242,645			$	2,663,560

(1) See Note 2 of the notes to the condensed consolidated financial statements

(2) Included in other expenses on the condensed consolidated statements of earnings

Schedule of Aging of Mortgage Loans

The following table presents the aging of mortgage loans held for investment by loan type as of the dates indicated:

Schedule of Aging of Mortgage Loans 

		Commercial				Residential				Residential Construction				Total
June 30, 2024
30-59 days past due		$	2,150,000			$	8,155,074			$	-			$	10,305,074
60-89 days past due			109,510				1,807,652				-				1,917,162
Over 90 days past due (1)			405,000				3,367,379				-				3,772,379
In process of foreclosure (1)			191,508				1,965,642				-				2,157,150
Total past due			2,856,018				15,295,747				-				18,151,765
Current			70,365,756				88,372,143				112,571,713				271,309,612
Total mortgage loans			73,221,774				103,667,890				112,571,713				289,461,377
Allowance for credit losses			(849,323	)			(1,779,386	)			(225,143	)			(2,853,852	)
Unamortized deferred loan fees, net			(119,303	)			(1,195,913	)			(637,400	)			(1,952,616	)
Unamortized discounts, net			(156,409	)			(154,969	)			-				(311,378	)
Net mortgage loans held for investment		$	72,096,739			$	100,537,622			$	111,709,170			$	284,343,531
December 31, 2023
30-59 days past due		$	-			$	3,387,673			$	-			$	3,387,673
60-89 days past due			-				3,472,760				-				3,472,760
Over 90 days past due (1)			405,000				3,480,931				-				3,885,931
In process of foreclosure (1)			1,241,508				1,021,790				-				2,263,298
Total past due			1,646,508				11,363,154				-				13,009,662
Current			72,530,030				91,790,433				104,052,748				268,373,211
Total mortgage loans			74,176,538				103,153,587				104,052,748				281,382,873
Allowance for credit losses			(1,219,653	)			(2,390,894	)			(208,106	)			(3,818,653	)
Unamortized deferred loan fees, net			(172,989	)			(1,135,491	)			(314,746	)			(1,623,226	)
Unamortized discounts, net			(216,705	)			(107,452	)			-				(324,157	)
Net mortgage loans held for investment		$	72,567,191			$	99,519,750			$	103,529,896			$	275,616,837

(1) Interest income is not recognized on loans which are more than 90 days past due or in foreclosure.

Schedule of Commercial Mortgage Loans By Credit Quality Indicator

The aggregate unpaid principal balance of commercial mortgage loans by credit quality indicator and origination year was as follows as of June 30, 2024:

 Schedule of Commercial Mortgage Loans By Credit Quality Indicator

Credit Quality Indicator		2024				2023				2022				2021				2020				Prior				Total				% of Total
LTV:
Less than 65%		$	6,034,800			$	33,954,450			$	2,828,743			$	3,033,422			$	-			$	9,271,857			$	55,123,272				75.28	%
65% to 80%			10,432,942				1,523,850				823,397				-				4,913,313				-			$	17,693,502				24.16	%
Greater than 80%			-				-				-				405,000				-				-			$	405,000				0.55	%
Total		$	16,467,742			$	35,478,300			$	3,652,140			$	3,438,422			$	4,913,313			$	9,271,857			$	73,221,774				100.00	%
DSCR
>1.20x		$	16,034,800			$	20,990,000			$	1,000,000			$	-			$	4,913,313			$	5,502,594			$	48,440,707				66.16	%
1.00x - 1.20x			432,942				7,988,300				2,652,140				3,438,422				-				3,769,263				18,281,067				24.97	%
<1.00x			-				6,500,000				-				-				-				-				6,500,000				8.88	%
Total		$	16,467,742			$	35,478,300			$	3,652,140			$	3,438,422			$	4,913,313			$	9,271,857			$	73,221,774				100.00	%

The aggregate unpaid principal balance of commercial mortgage loans by credit quality indicator and origination year was as follows as of December 31, 2023:

Credit Quality Indicator		2023				2022				2021				2020				2019				Prior				Total				% of Total
LTV:
Less than 65%		$	34,304,954			$	13,555,737			$	3,778,248			$	-			$	2,964,740			$	6,565,389			$	61,169,068				82.46	%
65% to 80%			1,523,926				5,115,231				1,050,000				4,913,313				-				-				12,602,470				16.99	%
Greater than 80%			-				-				405,000				-				-				-				405,000				0.55	%
Total		$	35,828,880			$	18,670,968			$	5,233,248			$	4,913,313			$	2,964,740			$	6,565,389			$	74,176,538				100.00	%
DSCR
>1.20x		$	20,990,000			$	1,000,000			$	700,000			$	4,913,313			$	2,964,740			$	2,612,625			$	33,180,678				44.73	%
1.00x - 1.20x			8,338,880				8,496,127				3,483,248				-				-				3,952,764				24,271,019				32.72	%
<1.00x			6,500,000				9,174,841(1)	(1)			1,050,000				-				-				-				16,724,841				22.55	%
Total		$	35,828,880			$	18,670,968			$	5,233,248			$	4,913,313			$	2,964,740			$	6,565,389			$	74,176,538				100.00	%

(1) Commercial construction loan

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

June 30, 2024 (Unaudited)

3) Investments (Continued)

The Company evaluates and monitors the credit quality of its residential mortgage loans by analyzing LTV and loan performance. The Company defines non-performing mortgage loans as loans more than 90 days past due and on a non-accrual status. Monitoring a residential mortgage loan increases when the loan is delinquent or earlier if there is an indication of impairment.

The aggregate unpaid principal balance of residential mortgage loans by credit quality indicator and origination year was as follows as of June 30, 2024:

Credit Quality Indicator		2024				2023				2022				2021				2020				Prior				Total				% of Total
Performance Indicators:
Performing		$	5,918,960			$	13,236,536			$	50,568,628			$	6,657,886			$	7,669,161			$	14,283,699			$	98,334,870				94.86	%
Non-performing (1)			-				2,880,161				696,461				365,061				406,356				984,981				5,333,020				5.14	%
Total		$	5,918,960			$	16,116,697			$	51,265,089			$	7,022,947			$	8,075,517			$	15,268,680			$	103,667,890				100.00	%

(1) Includes residential mortgage loans in the process of foreclosure of $1,965,642

LTV:
Less than 65%		$	1,196,344			$	3,388,129			$	6,276,467			$	2,422,737			$	2,343,791			$	6,296,278			$	21,923,746				21.15	%
65% to 80%			4,722,616				10,345,277				40,410,742				3,134,505				3,829,636				7,013,035				69,455,811				67.00	%
Greater than 80%			-				2,383,291				4,577,880				1,465,705				1,902,090				1,959,367				12,288,333				11.85	%
Total		$	5,918,960			$	16,116,697			$	51,265,089			$	7,022,947			$	8,075,517			$	15,268,680			$	103,667,890				100.00	%

The aggregate unpaid principal balance of residential mortgage loans by credit quality indicator and origination year was as follows as of December 31, 2023:

Credit Quality Indicator		2023				2022				2021				2020				2019				Prior				Total				% of Total
Performance Indicators:
Performing		$	15,337,828			$	53,875,389			$	7,156,934			$	7,453,796			$	2,786,562			$	12,040,357			$	98,650,866				95.63	%
Non-performing (1)			-				2,202,114				365,061				613,101				-				1,322,445				4,502,721				4.37	%
Total		$	15,337,828			$	56,077,503			$	7,521,995			$	8,066,897			$	2,786,562			$	13,362,802			$	103,153,587				100.00	%

(1) Includes residential mortgage loans in the process of foreclosure of $1,021,790

LTV:
Less than 65%		$	3,280,144			$	7,049,522			$	1,843,286			$	1,746,970			$	446,675			$	5,206,095			$	19,572,692				18.97	%
65% to 80%			10,962,770				44,371,320				4,269,894				4,222,170				2,339,887				5,711,440				71,877,481				69.68	%
Greater than 80%			1,094,914				4,656,661				1,408,815				2,097,757				-				2,445,267				11,703,414				11.35	%
Total		$	15,337,828			$	56,077,503			$	7,521,995			$	8,066,897			$	2,786,562			$	13,362,802			$	103,153,587				100.00	%

Schedule of Residential Construction Mortgage Loans

The aggregate unpaid principal balance of residential construction mortgage loans by credit quality indicator and origination year was as follows as of June 30, 2024:

Schedule of Residential Construction Mortgage Loans 

Credit Quality Indicator		2024				2023				2022				2021				Total				% of Total
Performance Indicators:
Performing		$	60,704,074			$	35,864,948			$	4,585,632			$	11,417,059			$	112,571,713				100.00	%
Non-performing			-				-				-				-				-				0.00	%
Total		$	60,704,074			$	35,864,948			$	4,585,632			$	11,417,059			$	112,571,713				100.00	%
LTV:
Less than 65%		$	18,845,154			$	26,531,552			$	3,038,388			$	11,417,059			$	59,832,153				53.15	%
65% to 80%			41,858,920				9,333,396				1,547,244				-				52,739,560				46.85	%
Greater than 80%			-				-				-				-				-				0.00	%
Total		$	60,704,074			$	35,864,948			$	4,585,632			$	11,417,059			$	112,571,713				100.00	%

The aggregate unpaid principal balance of residential construction mortgage loans by credit quality indicator and origination year was as follows as of December 31, 2023:

Credit Quality Indicator		2023				2022				2021				Total				% of Total
Performance Indicators:
Performing		$	60,311,679			$	16,624,182			$	27,116,887			$	104,052,748				100.00	%
Non-performing			-				-				-				-				0.00	%
Total		$	60,311,679			$	16,624,182			$	27,116,887			$	104,052,748				100.00	%
LTV:
Less than 65%		$	40,215,360			$	8,732,500			$	20,442,302			$	69,390,162				66.69	%
65% to 80%			20,096,319				7,891,682				6,674,585				34,662,586				33.31	%
Greater than 80%			-				-				-				-				0.00	%
Total		$	60,311,679			$	16,624,182			$	27,116,887			$	104,052,748				100.00	%

Schedule of Aging of Insurance Assignments

The following table presents the aging of insurance assignments, included in other investments and policy loans on the condensed consolidated balance sheets:

Schedule of Aging of Insurance Assignments 

		As of June 30, 2024				As of December 31, 2023
30-59 days past due		$	10,983,745			$	10,829,629
60-89 days past due			4,082,558				3,709,754
Over 90 days past due			5,580,886				4,329,468
Total past due			20,647,189				18,868,851
Current			27,759,501				26,736,471
Total insurance assignments			48,406,690				45,605,322
Allowance for credit losses			(1,535,324	)			(1,553,836	)
Net insurance assignments		$	46,871,366			$	44,051,486

Schedule of Allowance for Credit Losses

The following table presents a roll forward of the allowance for credit losses for insurance assignments as of the dates indicated:

Schedule of Allowance for Credit Losses 

		Three Months Ended
Beginning balance - March 31, 2024		$	1,587,525
Change in provision for credit losses (1)			242,046
Charge-offs			(294,247	)
Ending balance - June 30, 2024		$	1,535,324
Beginning balance - March 31, 2023		$	1,685,901
Change in provision for credit losses (1)			219,213
Charge-offs			(214,421	)
Ending balance - June 30, 2023		$	1,690,693

		Six Months Ended
Beginning balance - January 1, 2024		$	1,553,836
Change in provision for credit losses (1)			492,613
Charge-offs			(511,125	)
Ending balance - June 30, 2024		$	1,535,324
Beginning balance - January 1, 2023		$	1,609,951
Change in provision for credit losses (1)			452,326
Charge-offs			(371,584	)
Ending balance - June 30, 2023		$	1,690,693

(1) Included in other expenses on the condensed consolidated statements of earnings

Schedule of Gain (Loss) on Investments

The following table presents the realized gains and losses from sales, calls, and maturities, and unrealized gains and losses on equity securities from investments and other assets:

Schedule of Gain (Loss) on Investments 

		2024				2023				2024				2023
		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Fixed maturity securities:
Gross realized gains		$	24,031			$	1,563			$	24,334			$	17,054
Gross realized losses			(36,646	)			(36,908	)			(37,499	)			(91,799	)
Net credit loss release (provision)			16,289				(44,505	)			(79,711	)			(224,005	)
Equity securities:
Gains (losses) on securities sold			43,733				5,363				(17,370	)			(46,952	)
Unrealized gains (losses) on securities held at the end of the period			(424,455	)			566,633				1,118,405				898,064
Real estate held for investment and sale:
Gross realized gains			38,890				161,028				288,852				161,028
Gross realized losses			-				-				(39,081	)			-
Other assets:
Gross realized gains			(39,081	)			163,410				35,486				214,348
Gross realized losses			-				-				(1,229	)			-
Total		$	(377,239	)		$	816,584			$	1,292,187			$	927,738

Schedule of Accrued Investment Income

Accrued investment income consists of the following:

Schedule of Accrued Investment Income 

		As of June 30, 2024				As of December 31, 2023
Fixed maturity securities available for sale		$	4,125,306			$	3,984,695
Equity securities			10,876				20,451
Mortgage loans held for investment			1,121,383				2,661,092
Real estate held for investment			3,507,053				3,486,115
Cash and cash equivalents			73,388				18,437
Total accrued investment income		$	8,838,006			$	10,170,790

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