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Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 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 September 30, 2024:

Schedule of Fair Value Assets and Liabilities Measured on a Recurring Basis 

		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		$	346,513,336			$	-			$	345,281,782			$	1,231,554
Equity securities			16,385,571				16,385,571				-				-
Loans held for sale			142,897,741				-				-				142,897,741
Restricted assets (1)			1,747,584				-				1,747,584				-
Restricted assets (2)			9,860,911				9,860,911				-				-
Cemetery perpetual care trust investments (1)			771,935								771,935				-
Cemetery perpetual care trust investments (2)			5,072,421				5,072,421				-				-
Derivatives - loan commitments (3)			5,563,882				-				-				5,563,882
Total assets accounted for at fair value on a recurring basis		$	528,813,381			$	31,318,903			$	347,801,301			$	149,693,177
Liabilities accounted for at fair value on a recurring basis
Derivatives - loan commitments (4)			(3,168,855	)			-				-				(3,168,855	)
Total liabilities accounted for at fair value on a recurring basis		$	(3,168,855	)		$	-			$	-			$	(3,168,855	)

(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

September 30, 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 September 30, 2024, the significant unobservable inputs used in the fair value measurements were as follows:

Schedule of Level 3 Assets and Liabilities Measured at Fair Value on Recurring Basis 

		Fair Value at						Significant		Range of Inputs
		September				Valuation		Unobservable		Minimum				Maximum				Weighted
		30, 2024				Technique		Input(s)		Value				Value				Average
Loans held for sale		$	142,897,741			Market approach		Investor contract pricing as a percentage of unpaid principal balance			87.0	%			107.0	%			102.0	%
Derivatives - loan commitments (net)			2,395,027			Market approach		Pull-through rate			65.0	%			100.0	%			85.0	%
								Initial-Value			N/A				N/A				N/A
								Servicing			0 bps				135 bps				44 bps
Fixed maturity securities available for sale			1,231,554			Broker quotes		Pricing quotes		$	98.40			$	100.00			$	99.27

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:

		Fair Value at						Significant		Range of Inputs
		December				Valuation		Unobservable		Minimum				Maximum				Weighted
		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 September 30, 2024:

Schedule of Changes in Consolidated Balance Sheet Line Items Measured Using Level 3 Inputs 

		Net Loan Commitments				Loans Held for Sale				Fixed Maturity Securities Available for Sale
Balance - June 30, 2024		$	2,574,863			$	150,196,416			$	1,237,469
Originations and purchases			-				633,213,359				-
Sales, maturities and paydowns			-				(655,088,969	)			-
Total gains (losses):
Included in earnings			(179,836	)(1)			14,576,935	(1)			-	(2)
Included in other comprehensive income			-				-				(5,915	)
Balance - September 30, 2024		$	2,395,027			$	142,897,741			$	1,231,554

(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 September 30, 2023:

		Net Loan Commitments				Loans Held for Sale				Fixed Maturity Securities Available for Sale
Balance - June 30, 2023		$	3,233,447			$	161,310,060			$	1,431,874
Originations and purchases			-				569,095,944				-
Sales, maturities and paydowns			-				(585,545,472	)			(129,521	)
Transfer to mortgage loans held for investment							(1,867,552	)
Total gains (losses):
Included in earnings			(1,504,286	)(1)			9,553,586	(1)			(109	)(2)
Included in other comprehensive income			-				-				(70,057	)
Balance - September 30, 2023		$	1,729,161			$	152,546,566			$	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

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2024 (Unaudited)

8) Fair Value of Financial Instruments (Continued)

The following table is a summary of changes in the condensed consolidated balance sheet line items measured using level 3 inputs for the nine month period ended September 30, 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			-				1,723,036,874				-
Sales, maturities and paydowns			-				(1,742,693,113	)			-
Transfer to mortgage loans held for investment			-				-				-
Loans held for sale foreclosed into real estate held for sale							(858,977	)
Total gains (losses):
Included in earnings			811,765	(1)			36,863,767	(1)			-	(2)
Included in other comprehensive income			-				-				(7,102	)
Balance - September 30, 2024		$	2,395,027			$	142,897,741			$	1,231,554

(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 nine month period ended September 30, 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			-				1,708,831,185				-
Sales, maturities and paydowns			-				(1,726,023,095	)			(129,521	)
Transfer to mortgage loans held for investment			-				(3,017,626	)			-
Total gains (losses):
Included in earnings			(977,716	)(1)			31,576,482	(1)			(109	)(2)
Included in other comprehensive income			-				-				(73,702	)
Balance - September 30, 2023		$	1,729,161			$	152,546,566			$	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

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 September 30, 2024:

Schedule of Financial Instruments Carried at Other Than Fair Value 

		Carrying Value				Level 1				Level 2				Level 3				Total Estimated Fair Value
Assets
Mortgage loans held for investment
Residential		$	86,548,141			$	-			$	-			$	88,394,509			$	88,394,509
Residential construction			129,732,885				-				-				129,732,885				129,732,885
Commercial			65,453,156				-				-				66,238,958				66,238,958
Mortgage loans held for investment, net		$	281,734,182			$	-			$	-			$	284,366,352			$	284,366,352
Policy loans			13,735,282				-				-				13,735,282				13,735,282
Insurance assignments, net (1)			44,413,559				-				-				44,413,559				44,413,559
Restricted assets (2)			1,111,073				-				-				1,111,073				1,111,073
Cemetery perpetual care trust investments (2)			99,800				-				-				99,800				99,800
Mortgage servicing rights, net			3,051,805				-				-				4,170,880				4,170,880
Liabilities
Bank and other loans payable		$	(106,989,925	)		$	-			$	-			$	(92,105,403	)		$	(92,105,403	)
Policyholder account balances (3)			(37,305,721	)			-				-				(38,150,732	)			(38,150,732	)
Future policy benefits - annuities (3)			(106,361,533	)			-				-				(105,136,015	)			(105,136,015	)

(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

September 30, 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

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Schedule of Changes in the Consolidated Balance Sheet Line Items Measured Using Level 3 Inputs [Table Text Block]

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Tabular disclosure of liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, by class that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3). Where the quoted price in an active market for the identical liability is not available, the Level 1 input is the quoted price of an identical liability when traded as an asset.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

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- Definition

Tabular disclosure of assets and liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3).

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

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