UTAH
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87-0345941
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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5300 South 360 West, Suite 250, Salt Lake City, Utah
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84123
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(Address of principal executive offices)
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(Zip Code)
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(801) 264-1060
(Registrant’s telephone number, including area code)
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Large accelerated filer [ ]
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Accelerated filer [ ]
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Non-accelerated filer [ ]
(Do not check if a smaller reporting company)
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Smaller reporting company [X]
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Class A Common Stock, $2.00 par value
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12,480,944
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Title of Class
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Number of Shares Outstanding as of
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August 14, 2015
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Class C Common Stock, $2.00 par value
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1,507,561
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Title of Class
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Number of Shares Outstanding as of
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August 14, 2015
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Page No.
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||
PART I - FINANCIAL INFORMATION
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||
Item 1.
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Financial Statements
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Condensed Consolidated Balance Sheets as of June 30, 2015 and December 31, 2014 (unaudited)
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3-4
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Condensed Consolidated Statements of Earnings for the Three and Six Months
Ended June 30, 2015 and 2014 (unaudited)
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5
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Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2015 and 2014 (unaudited)
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6
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Condensed Consolidated Statements of Stockholders' Equity as of June 30, 2015 and June 30, 2014 (unaudited)
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7
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Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2015 and 2014 (unaudited)
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8
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Notes to Condensed Consolidated Financial Statements (unaudited)
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9
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Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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39
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Item 3.
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Quantitative and Qualitative Disclosures about Market Risk
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45
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Item 4.
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Controls and Procedures
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45
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PART II - OTHER INFORMATION
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||
Item 1.
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Legal Proceedings
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46
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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48
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Item 3.
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Defaults Upon Senior Securities
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48
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Item 4.
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Mine Safety Disclosures
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48
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Item 5.
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Other Information
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49
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Item 6.
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Exhibits
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49
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Signature Page
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51
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Assets
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June 30
2015
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December 31
2014
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||||||
Investments:
|
||||||||
Fixed maturity securities, held to maturity, at amortized cost
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$ | 132,401,008 | $ | 135,018,347 | ||||
Equity securities, available for sale, at estimated fair value
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7,025,410 | 6,752,750 | ||||||
Mortgage loans on real estate and construction loans, held for investment net of allowances for loan losses of $1,875,775 and $2,003,055 for 2015 and 2014
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110,747,896 | 120,050,072 | ||||||
Real estate held for investment, net of accumulated depreciation of $11,947,936 and $10,875,419 for 2015 and 2014
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114,724,603 | 111,411,351 | ||||||
Policy and other loans, net of allowances for doubtful accounts of $876,318 and $693,413 for 2015 and 2014
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35,487,729 | 34,125,428 | ||||||
Short-term investments
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21,326,531 | 27,059,495 | ||||||
Accrued investment income
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2,360,410 | 2,483,253 | ||||||
Total investments
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424,073,587 | 436,900,696 | ||||||
Cash and cash equivalents
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48,275,362 | 30,855,320 | ||||||
Mortgage loans sold to investors
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105,222,965 | 67,534,400 | ||||||
Receivables, net
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20,725,389 | 14,544,093 | ||||||
Restricted assets
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10,034,301 | 9,347,797 | ||||||
Cemetery perpetual care trust investments
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2,758,752 | 2,645,423 | ||||||
Receivable from reinsurers
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13,300,910 | 12,036,263 | ||||||
Cemetery land and improvements
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10,812,068 | 10,848,085 | ||||||
Deferred policy and pre-need contract acquisition costs
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54,415,118 | 50,307,503 | ||||||
Mortgage servicing rights, net
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9,988,658 | 7,834,747 | ||||||
Property and equipment, net
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11,931,281 | 11,307,714 | ||||||
Value of business acquired
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9,401,709 | 8,547,627 | ||||||
Goodwill
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2,765,570 | 2,765,570 | ||||||
Other
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8,866,421 | 5,594,324 | ||||||
Total Assets
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$ | 732,572,091 | $ | 671,069,562 |
June 30
2015
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December 31
2014
|
|||||||
Liabilities and Stockholders' Equity
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||||||||
Liabilities
|
||||||||
Future life, annuity, and other benefits
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$ | 511,010,835 | $ | 476,727,465 | ||||
Unearned premium reserve
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4,835,208 | 4,961,937 | ||||||
Bank and other loans payable
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33,385,571 | 29,020,378 | ||||||
Deferred pre-need cemetery and mortuary contract revenues
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13,036,380 | 13,242,143 | ||||||
Cemetery perpetual care obligation
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3,452,647 | 3,406,718 | ||||||
Accounts payable
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4,440,303 | 1,789,387 | ||||||
Other liabilities and accrued expenses
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32,711,302 | 24,408,666 | ||||||
Income taxes
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24,240,043 | 20,421,767 | ||||||
Total liabilities
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627,112,289 | 573,978,461 | ||||||
Stockholders' Equity
|
||||||||
Common Stock:
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||||||||
Class A: common stock - $2.00 par value; 20,000,000 shares authorized; issued 12,473,586 shares in 2015 and 12,459,240 shares in 2014
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24,947,172 | 24,918,480 | ||||||
Class B: non-voting common stock - $1.00 par value; 5,000,000 shares authorized; none issued or outstanding
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- | - | ||||||
Class C: convertible common stock - $2.00 par value; 2,000,000 shares authorized; issued 1,507,561 shares in 2015 and 1,394,069 shares in 2014
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3,015,122 | 2,788,138 | ||||||
Additional paid-in capital
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26,440,822 | 25,931,119 | ||||||
Accumulated other comprehensive income, net of taxes
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3,331,103 | 1,438,566 | ||||||
Retained earnings
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49,816,024 | 44,101,252 | ||||||
Treasury stock at cost - 934,530 Class A shares in 2015 and 986,264 Class A shares in 2014
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(2,090,441 | ) | (2,086,454 | ) | ||||
Total stockholders' equity
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105,459,802 | 97,091,101 | ||||||
Total Liabilities and Stockholders' Equity
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$ | 732,572,091 | $ | 671,069,562 |
Three Months Ended June 30
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Six Months Ended June 30
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|||||||||||||||
2015
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2014
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2015
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2014
|
|||||||||||||
Revenues:
|
||||||||||||||||
Insurance premiums and other considerations
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$ | 13,914,894 | $ | 13,334,986 | $ | 27,768,409 | $ | 26,464,433 | ||||||||
Net investment income
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8,590,673 | 6,707,287 | 16,413,517 | 12,349,787 | ||||||||||||
Net mortuary and cemetery sales
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3,017,853 | 3,446,882 | 5,890,088 | 6,277,944 | ||||||||||||
Realized gains on investments and other assets
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500,776 | 339,852 | 920,840 | 538,845 | ||||||||||||
Other than temporary impairments on investments
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(55,311 | ) | (30,000 | ) | (111,207 | ) | (60,000 | ) | ||||||||
Mortgage fee income
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48,730,028 | 34,773,299 | 86,551,828 | 57,310,837 | ||||||||||||
Other
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1,341,702 | 839,424 | 2,656,772 | 1,583,160 | ||||||||||||
Total revenues
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76,040,615 | 59,411,730 | 140,090,247 | 104,465,006 | ||||||||||||
Benefits and expenses:
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||||||||||||||||
Death benefits
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8,116,411 | 7,082,626 | 16,044,283 | 13,758,119 | ||||||||||||
Surrenders and other policy benefits
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519,663 | 627,151 | 1,173,397 | 1,142,763 | ||||||||||||
Increase in future policy benefits
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4,040,366 | 4,847,082 | 8,220,178 | 9,214,525 | ||||||||||||
Amortization of deferred policy and pre-need acquisition costs and value of business acquired
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1,177,854 | 1,493,293 | 2,345,353 | 2,896,935 | ||||||||||||
Selling, general and administrative expenses:
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||||||||||||||||
Commissions
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23,207,511 | 16,185,164 | 41,773,558 | 26,746,045 | ||||||||||||
Personnel
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15,251,633 | 11,859,398 | 29,564,949 | 23,356,566 | ||||||||||||
Advertising
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1,508,426 | 1,502,045 | 2,924,716 | 2,274,058 | ||||||||||||
Rent and rent related
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1,929,790 | 1,456,038 | 3,814,866 | 2,799,481 | ||||||||||||
Depreciation on property and equipment
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547,387 | 534,346 | 1,110,124 | 1,031,548 | ||||||||||||
Provision for loan losses and loss reserve
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2,252,471 | 571,332 | 2,919,210 | 943,425 | ||||||||||||
Costs related to funding mortgage loans
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2,412,354 | 1,911,634 | 4,595,365 | 3,209,319 | ||||||||||||
Other
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6,982,105 | 5,857,231 | 13,067,608 | 10,453,682 | ||||||||||||
Interest expense
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1,374,269 | 786,248 | 2,359,615 | 1,284,112 | ||||||||||||
Cost of goods and services sold-mortuaries and cemeteries
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488,423 | 511,045 | 946,689 | 1,001,344 | ||||||||||||
Total benefits and expenses
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69,808,663 | 55,224,633 | 130,859,911 | 100,111,922 | ||||||||||||
Earnings before income taxes
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6,231,952 | 4,187,097 | 9,230,336 | 4,353,084 | ||||||||||||
Income tax expense
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(2,379,673 | ) | (1,563,034 | ) | (3,514,354 | ) | (1,590,173 | ) | ||||||||
Net earnings
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$ | 3,852,279 | $ | 2,624,063 | $ | 5,715,982 | $ | 2,762,911 | ||||||||
Net earnings per Class A Equivalent common share (1)
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$ | 0.30 | $ | 0.21 | $ | 0.44 | $ | 0.22 | ||||||||
Net earnings per Class A Equivalent common share-assuming dilution (1)
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$ | 0.28 | $ | 0.20 | $ | 0.42 | $ | 0.21 | ||||||||
Weighted-average Class A equivalent common share outstanding (1)
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13,037,095 | 12,449,786 | 12,986,238 | 12,459,537 | ||||||||||||
Weighted-average Class A equivalent common shares outstanding-assuming dilution (1)
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13,595,918 | 12,897,204 | 13,532,641 | 12,914,781 |
Three Months Ended June 30
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Six Months Ended June 30
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|||||||||||||||
2015
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2014
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2015
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2014
|
|||||||||||||
Net earnings
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$ | 3,852,279 | $ | 2,624,063 | $ | 5,715,982 | $ | 2,762,911 | ||||||||
Other comprehensive income:
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||||||||||||||||
Net unrealized gains on derivative instruments
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766,630 | 484,704 | 2,286,653 | 762,934 | ||||||||||||
Net unrealized gains (losses) on available for sale securities
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(165,860 | ) | 122,161 | (394,116 | ) | 160,066 | ||||||||||
Other comprehensive income
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600,770 | 606,865 | 1,892,537 | 923,000 | ||||||||||||
Comprehensive income
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$ | 4,453,049 | $ | 3,230,928 | $ | 7,608,519 | $ | 3,685,911 |
Class A
Common Stock
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Class C
Common Stock
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Additional
Paid-in Capital
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Retained
Earnings
|
Treasury
Stock
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Total
|
||||||||||||||||||||||
Balance at December 31, 2013
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$ | 23,614,574 | $ | 2,660,382 | $ | 23,215,875 | $ | 1,218,396 | $ | 39,666,587 | $ | (2,624,625 | ) | $ | 87,751,189 | |||||||||||||
Net earnings
|
- | - | - | - | 2,762,911 | - | 2,762,911 | |||||||||||||||||||||
Other comprehensive income
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- | - | - | 923,000 | - | - | 923,000 | |||||||||||||||||||||
Grant of stock options
|
- | - | 128,526 | - | - | - | 128,526 | |||||||||||||||||||||
Exercise of stock options
|
69,910 | - | (19,611 | ) | - | - | - | 50,299 | ||||||||||||||||||||
Sale of treasury stock
|
- | - | 147,542 | - | - | 243,590 | 391,132 | |||||||||||||||||||||
Stock Dividends
|
3,446 | (1 | ) | 4,910 | - | (8,355 | ) | - | - | |||||||||||||||||||
Conversion Class C to Class A
|
1,778 | (1,776 | ) | (2 | ) | - | - | - | - | |||||||||||||||||||
Balance at June 30, 2014
|
$ | 23,689,708 | $ | 2,658,605 | $ | 23,477,240 | $ | 2,141,396 | $ | 42,421,143 | $ | (2,381,035 | ) | $ | 92,007,057 | |||||||||||||
Balance at December 31, 2014
|
$ | 24,918,480 | $ | 2,788,138 | $ | 25,931,119 | $ | 1,438,566 | $ | 44,101,252 | $ | (2,086,454 | ) | $ | 97,091,101 | |||||||||||||
Net earnings
|
- | - | - | - | 5,715,982 | - | 5,715,982 | |||||||||||||||||||||
Other comprehensive income
|
- | - | - | 1,892,537 | - | - | 1,892,537 | |||||||||||||||||||||
Grant of stock options
|
- | - | 211,476 | - | - | - | 211,476 | |||||||||||||||||||||
Exercise of stock options
|
27,148 | 228,046 | 6,366 | - | - | (244,009 | ) | 17,551 | ||||||||||||||||||||
Sale of treasury stock
|
- | - | 291,133 | - | - | 240,022 | 531,155 | |||||||||||||||||||||
Stock Dividends
|
480 | 2 | 728 | - | (1,210 | ) | - | - | ||||||||||||||||||||
Conversion Class C to Class A
|
1,064 | (1,064 | ) | - | - | - | - | - | ||||||||||||||||||||
Balance at June 30, 2015
|
$ | 24,947,172 | $ | 3,015,122 | $ | 26,440,822 | $ | 3,331,103 | $ | 49,816,024 | $ | (2,090,441 | ) | $ | 105,459,802 |
Six Months Ended June 30
|
||||||||
2015
|
2014
|
|||||||
Cash flows from operating activities:
|
||||||||
Net cash provided by (used in) operating activities
|
$ | (18,837,963 | ) | $ | 40,505,997 | |||
Cash flows from investing activities:
|
||||||||
Securities held to maturity:
|
||||||||
Purchase-fixed maturity securities
|
(5,890,324 | ) | (362,817 | ) | ||||
Calls and maturities - fixed maturity securities
|
8,590,035 | 4,769,126 | ||||||
Securities available for sale:
|
||||||||
Purchase - equity securities
|
(2,285,429 | ) | (4,339,038 | ) | ||||
Sales - equity securities
|
1,570,539 | 1,714,695 | ||||||
Purchase of short-term investments
|
(26,379,029 | ) | (10,206,586 | ) | ||||
Sales of short-term investments
|
32,111,993 | 2,074,245 | ||||||
Purchases of restricted assets
|
(688,872 | ) | (200,415 | ) | ||||
Changes in assets for perpetual care trusts
|
(168,603 | ) | (120,398 | ) | ||||
Amount received for perpetual care trusts
|
45,929 | 66,077 | ||||||
Mortgage, policy, and other loans made
|
(180,978,933 | ) | (118,680,888 | ) | ||||
Payments received for mortgage, policy and other loans
|
186,813,832 | 91,321,359 | ||||||
Purchase of property and equipment
|
(1,733,693 | ) | (733,243 | ) | ||||
Sale of property and equipment
|
2,000 | - | ||||||
Purchase of real estate
|
(7,053,011 | ) | (3,871,169 | ) | ||||
Sale of real estate
|
4,973,199 | 2,332,579 | ||||||
Cash received from reinsurance
|
24,020,215 | 7,304,993 | ||||||
Cash paid for purchase of subsidiaries, net of cash acquired
|
- | (15,011,193 | ) | |||||
Net cash provided by (used in) investing activities
|
32,949,848 | (43,942,673 | ) | |||||
Cash flows from financing activities:
|
||||||||
Annuity contract receipts
|
5,244,513 | 5,037,585 | ||||||
Annuity contract withdrawals
|
(6,327,811 | ) | (7,503,928 | ) | ||||
Proceeds from stock options exercised
|
17,551 | 50,299 | ||||||
Repayment of bank loans on notes and contracts
|
(1,208,965 | ) | (1,174,015 | ) | ||||
Proceeds from borrowing on bank loans
|
5,582,869 | 30,159 | ||||||
Net cash provided by (used in) financing activities
|
3,308,157 | (3,559,900 | ) | |||||
Net change in cash and cash equivalents
|
17,420,042 | (6,996,576 | ) | |||||
Cash and cash equivalents at beginning of period
|
30,855,320 | 38,203,164 | ||||||
Cash and cash equivalents at end of period
|
$ | 48,275,362 | $ | 31,206,588 | ||||
Non Cash Investing and Financing Activities
|
||||||||
Mortgage loans foreclosed into real estate
|
$ | 2,389,330 | $ | 886,576 |
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Estimated
Fair
Value
|
|||||||||||||
June 30, 2015
|
||||||||||||||||
Fixed maturity securities held to maturity carried at amortized cost:
|
||||||||||||||||
Bonds:
|
||||||||||||||||
U.S. Treasury securities and obligations of U.S. Government agencies
|
$ | 1,862,291 | $ | 305,024 | $ | (3,620 | ) | $ | 2,163,695 | |||||||
Obligations of states and political subdivisions
|
1,858,861 | 201,771 | (3,726 | ) | 2,056,906 | |||||||||||
Corporate securities including public utilities
|
124,811,868 | 12,115,612 | (1,207,359 | ) | 135,720,121 | |||||||||||
Mortgage-backed securities
|
3,255,965 | 232,136 | (1,147 | ) | 3,486,954 | |||||||||||
Redeemable preferred stock
|
612,023 | 23,838 | - | 635,861 | ||||||||||||
Total fixed maturity securities held to maturity
|
$ | 132,401,008 | $ | 12,878,381 | $ | (1,215,852 | ) | $ | 144,063,537 |
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Estimated
Fair
Value
|
|||||||||||||
June 30, 2015
|
||||||||||||||||
Equity securities available for sale at estimated fair value:
|
||||||||||||||||
Common stock:
|
||||||||||||||||
Industrial, miscellaneous and all other
|
$ | 7,972,306 | $ | 150,184 | $ | (1,097,080 | ) | $ | 7,025,410 | |||||||
Total equity securities available for sale at estimated fair value
|
$ | 7,972,306 | $ | 150,184 | $ | (1,097,080 | ) | $ | 7,025,410 | |||||||
Mortgage loans on real estate and construction loans held for investment at amortized cost:
|
||||||||||||||||
Residential
|
$ | 49,704,426 | ||||||||||||||
Residential construction
|
28,342,809 | |||||||||||||||
Commercial
|
34,576,436 | |||||||||||||||
Less: Allowance for loan losses
|
(1,875,775 | ) | ||||||||||||||
Total mortgage loans on real estate and construction loans held for investment
|
$ | 110,747,896 | ||||||||||||||
Real estate held for investment - net of depreciation
|
$ | 114,724,603 | ||||||||||||||
Policy and other loans at amortized cost:
|
||||||||||||||||
Policy loans
|
$ | 7,095,642 | ||||||||||||||
Other loans
|
29,268,405 | |||||||||||||||
Less: Allowance for doubtful accounts
|
(876,318 | ) | ||||||||||||||
Total policy and other loans at amortized cost
|
$ | 35,487,729 | ||||||||||||||
Short-term investments at amortized cost
|
$ | 21,326,531 |
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Estimated
Fair
Value
|
|||||||||||||
December 31, 2014
:
|
||||||||||||||||
Fixed maturity securities held to maturity carried at amortized cost:
|
||||||||||||||||
Bonds:
|
||||||||||||||||
U.S. Treasury securities and obligations of U.S. Government agencies
|
$ | 1,873,146 | $ | 345,715 | $ | - | $ | 2,218,861 | ||||||||
Obligations of states and political subdivisions
|
1,736,489 | 221,893 | (5,278 | ) | 1,953,104 | |||||||||||
Corporate securities including public utilities
|
126,533,483 | 15,841,536 | (980,357 | ) | 141,394,662 | |||||||||||
Mortgage-backed securities
|
4,263,206 | 305,381 | (11,894 | ) | 4,556,693 | |||||||||||
Redeemable preferred stock
|
612,023 | 22,032 | - | 634,055 | ||||||||||||
Total fixed maturity securities held to maturity
|
$ | 135,018,347 | $ | 16,736,557 | $ | (997,529 | ) | $ | 150,757,375 |
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Estimated
Fair
Value
|
|||||||||||||
December 31, 2014
:
|
||||||||||||||||
Equity securities available for sale at estimated fair value:
|
||||||||||||||||
Common stock:
|
||||||||||||||||
Industrial, miscellaneous and all other
|
$ | 7,179,010 | $ | 393,873 | $ | (820,133 | ) | $ | 6,752,750 | |||||||
Total securities available for sale carried at estimated fair value
|
$ | 7,179,010 | $ | 393,873 | $ | (820,133 | ) | $ | 6,752,750 | |||||||
Mortgage loans on real estate and construction loans held for investment at amortized cost:
|
||||||||||||||||
Residential
|
$ | 53,592,433 | ||||||||||||||
Residential construction
|
33,071,938 | |||||||||||||||
Commercial
|
35,388,756 | |||||||||||||||
Less: Allowance for loan losses
|
(2,003,055 | ) | ||||||||||||||
Total mortgage loans on real estate and construction loans held for investment
|
$ | 120,050,072 | ||||||||||||||
Real estate held for investment - net of depreciation
|
$ | 111,411,351 | ||||||||||||||
Policy and other loans at amortized cost:
|
||||||||||||||||
Policy loans
|
$ | 7,011,012 | ||||||||||||||
Other loans
|
27,807,829 | |||||||||||||||
Less: Allowance for doubtful accounts
|
(693,413 | ) | ||||||||||||||
Total policy and other loans at amortized cost
|
$ | 34,125,428 | ||||||||||||||
Short-term investments at amortized cost
|
$ | 27,059,495 |
Unrealized
Losses for
Less than
Twelve Months
|
No. of
Investment
Positions
|
Unrealized
Losses for
More than
Twelve Months
|
No. of
Investment
Positions
|
Total
Unrealized
Loss
|
||||||||||||||||
At June 30, 2015
|
||||||||||||||||||||
U.S. treasury securities and obligations of U.S. government agencies
|
$ | 3,620 | 1 | $ | - | 0 | $ | 3,620 | ||||||||||||
Obligations of states and political subdivisions
|
- | 3,726 | 1 | 3,726 | ||||||||||||||||
Corporate securities including public utilities
|
947,259 | 63 | 252,472 | 8 | 1,199,731 | |||||||||||||||
Mortgage-backed securities
|
1,147 | 1 | 7,628 | 2 | 8,775 | |||||||||||||||
Total unrealized losses
|
$ | 952,026 | 65 | $ | 263,826 | 11 | $ | 1,215,852 | ||||||||||||
Fair Value
|
$ | 18,942,023 | $ | 2,519,794 | $ | 21,461,817 | ||||||||||||||
At December 31, 2014
|
||||||||||||||||||||
Obligations of states and political subdivisions
|
$ | - | 0 | $ | 5,278 | 1 | $ | 5,278 | ||||||||||||
Corporate securities including public utilities
|
548,310 | 21 | 432,047 | 11 | 980,357 | |||||||||||||||
Mortgage-backed securities
|
3,966 | 1 | 7,928 | 1 | 11,894 | |||||||||||||||
Total unrealized losses
|
$ | 552,276 | 22 | $ | 445,253 | 13 | $ | 997,529 | ||||||||||||
Fair Value
|
$ | 7,081,352 | $ | 2,777,587 | $ | 9,858,939 |
Unrealized
Losses for
Less than
Twelve Months
|
No. of
Investment
Positions
|
Unrealized
Losses for
More than
Twelve Months
|
No. of
Investment
Positions
|
Total
Unrealized
Losses
|
||||||||||||||||
At June 30, 2015
|
||||||||||||||||||||
Industrial, miscellaneous and all other
|
$ | 501,595 | 208 | $ | 595,485 | 36 | $ | 1,097,080 | ||||||||||||
Total unrealized losses
|
$ | 501,595 | 208 | $ | 595,485 | 36 | $ | 1,097,080 | ||||||||||||
Fair Value
|
$ | 3,789,136 | $ | 687,502 | $ | 4,476,638 | ||||||||||||||
At December 31, 2014
|
||||||||||||||||||||
Industrial, miscellaneous and all other
|
$ | 327,389 | 138 | $ | 492,744 | 27 | $ | 820,133 | ||||||||||||
Total unrealized losses
|
$ | 327,389 | 138 | $ | 492,744 | 27 | $ | 820,133 | ||||||||||||
Fair Value
|
$ | 2,162,425 | $ | 676,706 | $ | 2,839,131 |
Amortized
Cost
|
Estimated Fair
Value
|
|||||||
Held to Maturity:
|
||||||||
Due in 2015
|
$ | 1,498,127 | $ | 1,519,903 | ||||
Due in 2016 through 2019
|
31,328,324 | 34,364,866 | ||||||
Due in 2020 through 2024
|
28,140,265 | 30,502,468 | ||||||
Due after 2024
|
67,566,304 | 73,553,485 | ||||||
Mortgage-backed securities
|
3,255,965 | 3,486,954 | ||||||
Redeemable preferred stock
|
612,023 | 635,861 | ||||||
Total held to maturity
|
$ | 132,401,008 | $ | 144,063,537 |
Cost
|
Estimated Fair
Value
|
|||||||
Available for Sale:
|
||||||||
Common stock
|
$ | 7,972,306 | $ | 7,025,410 | ||||
Total available for sale
|
$ | 7,972,306 | $ | 7,025,410 |
Three Months Ended June 30
|
Six Months Ended June 30
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Fixed maturity securities held to maturity:
|
||||||||||||||||
Gross realized gains
|
$ | 273,061 | $ | 47,548 | $ | 359,057 | $ | 47,548 | ||||||||
Gross realized losses
|
(49,594 | ) | (2,284 | ) | (59,370 | ) | (2,284 | ) | ||||||||
Other than temporary impairments
|
(30,000 | ) | (30,000 | ) | (60,000 | ) | (60,000 | ) | ||||||||
Securities available for sale:
|
||||||||||||||||
Gross realized gains
|
42,289 | 72,397 | 130,009 | 125,650 | ||||||||||||
Gross realized losses
|
- | - | (1,016 | ) | - | |||||||||||
Other than temporary impairments
|
(25,311 | ) | - | (51,207 | ) | - | ||||||||||
Other assets:
|
||||||||||||||||
Gross realized gains
|
267,097 | 222,191 | 524,237 | 367,931 | ||||||||||||
Gross realized losses
|
(32,077 | ) | - | (32,077 | ) | - | ||||||||||
Other than temporary impairments
|
- | - | - | - | ||||||||||||
Total
|
$ | 445,465 | $ | 309,852 | $ | 809,633 | $ | 478,845 |
Three Months Ended June 30
|
Six Months Ended June 30
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Fixed maturity securities
|
$ | 2,144,989 | $ | 2,067,324 | $ | 4,125,684 | $ | 4,176,445 | ||||||||
Equity securities
|
55,298 | 50,752 | 114,716 | 89,999 | ||||||||||||
Mortgage loans on real estate
|
1,790,538 | 1,837,060 | 3,641,164 | 3,389,171 | ||||||||||||
Real estate
|
2,233,781 | 2,126,566 | 4,354,352 | 4,291,565 | ||||||||||||
Policy and other loans
|
188,639 | 181,687 | 377,185 | 379,255 | ||||||||||||
Short-term investments, principally gains on sale of mortgage loans and other
|
4,738,607 | 2,781,988 | 8,964,392 | 4,681,101 | ||||||||||||
Gross investment income
|
11,151,852 | 9,045,377 | 21,577,493 | 17,007,536 | ||||||||||||
Investment expenses
|
(2,561,179 | ) | (2,338,090 | ) | (5,163,976 | ) | (4,657,749 | ) | ||||||||
Net investment income
|
$ | 8,590,673 | $ | 6,707,287 | $ | 16,413,517 | $ | 12,349,787 |
Allowance for Credit Losses and Recorded Investment in Mortgage Loans
|
||||||||||||||||
Commercial
|
Residential
|
Residential
Construction
|
Total
|
|||||||||||||
June 30, 2015
|
||||||||||||||||
Allowance for credit losses:
|
||||||||||||||||
Beginning balance - January 1, 2015
|
$ | 187,129 | $ | 1,715,812 | $ | 100,114 | $ | 2,003,055 | ||||||||
Charge-offs
|
- | - | - | - | ||||||||||||
Provision
|
- | (127,280 | ) | - | (127,280 | ) | ||||||||||
Ending balance -June 30, 2015
|
$ | 187,129 | $ | 1,588,532 | $ | 100,114 | $ | 1,875,775 | ||||||||
Ending balance: individually evaluated for impairment
|
$ | - | $ | 217,192 | $ | - | $ | 217,192 | ||||||||
Ending balance: collectively evaluated for impairment
|
$ | 187,129 | $ | 1,371,340 | $ | 100,114 | $ | 1,658,583 | ||||||||
Ending balance: loans acquired with deteriorated credit quality
|
$ | - | $ | - | $ | - | $ | - | ||||||||
Mortgage loans:
|
||||||||||||||||
Ending balance
|
$ | 34,576,436 | $ | 49,704,426 | $ | 28,342,809 | $ | 112,623,671 | ||||||||
Ending balance: individually evaluated for impairment
|
$ | - | $ | 2,320,452 | $ | - | $ | 2,320,452 | ||||||||
Ending balance: collectively evaluated for impairment
|
$ | 34,576,436 | $ | 47,383,974 | $ | 28,342,809 | $ | 110,303,219 | ||||||||
Ending balance: loans acquired with deteriorated credit quality
|
$ | - | $ | - | $ | - | $ | - | ||||||||
December 31, 2014
|
||||||||||||||||
Allowance for credit losses:
|
||||||||||||||||
Beginning balance - January 1, 2014
|
$ | 187,129 | $ | 1,364,847 | $ | 100,114 | $ | 1,652,090 | ||||||||
Charge-offs
|
- | (38,444 | ) | - | (38,444 | ) | ||||||||||
Provision
|
- | 389,409 | - | 389,409 | ||||||||||||
Ending balance - December 31, 2014
|
$ | 187,129 | $ | 1,715,812 | $ | 100,114 | $ | 2,003,055 | ||||||||
Ending balance: individually evaluated for impairment
|
$ | - | $ | 153,446 | $ | - | $ | 153,446 | ||||||||
Ending balance: collectively evaluated for impairment
|
$ | 187,129 | $ | 1,562,366 | $ | 100,114 | $ | 1,849,609 | ||||||||
Ending balance: loans acquired with deteriorated credit quality
|
$ | - | $ | - | $ | - | $ | - | ||||||||
Mortgage loans:
|
||||||||||||||||
Ending balance
|
$ | 35,388,756 | $ | 53,592,433 | $ | 33,071,938 | $ | 122,053,127 | ||||||||
Ending balance: individually evaluated for impairment
|
$ | - | $ | 1,556,182 | $ | 414,499 | $ | 1,970,681 | ||||||||
Ending balance: collectively evaluated for impairment
|
$ | 35,388,756 | $ | 52,036,251 | $ | 32,657,439 | $ | 120,082,446 | ||||||||
Ending balance: loans acquired with deteriorated credit quality
|
$ | - | $ | - | $ | - | $ | - |
Age Analysis of Past Due Mortgage Loans
|
||||||||||||||||||||||||||||||||||||
30-59 Days
Past Due
|
60-89 Days
Past Due
|
Greater Than
90 Days (1)
|
In Foreclosure (1)
|
Total
Past Due
|
Current
|
Total
Mortgage Loans
|
Allowance for
Loan Losses
|
Net Mortgage
Loans
|
||||||||||||||||||||||||||||
June 30, 2015
|
||||||||||||||||||||||||||||||||||||
Commercial
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | 34,576,436 | $ | 34,576,436 | $ | (187,129 | ) | $ | 34,389,307 | |||||||||||||||||
Residential
|
756,115 | 624,651 | 4,278,185 | 2,320,452 | 7,979,403 | 41,725,023 | 49,704,426 | (1,588,532 | ) | 48,115,894 | ||||||||||||||||||||||||||
Residential
Construction
|
- | - | 64,895 | - | 64,895 | 28,277,914 | 28,342,809 | (100,114 | ) | 28,242,695 | ||||||||||||||||||||||||||
Total
|
$ | 756,115 | $ | 624,651 | $ | 4,343,080 | $ | 2,320,452 | $ | 8,044,298 | $ | 104,579,373 | $ | 112,623,671 | $ | (1,875,775 | ) | $ | 110,747,896 | |||||||||||||||||
December 31, 2014
|
||||||||||||||||||||||||||||||||||||
Commercial
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | 35,388,756 | $ | 35,388,756 | $ | (187,129 | ) | $ | 35,201,627 | |||||||||||||||||
Residential
|
1,631,142 | 1,174,516 | 5,464,901 | 1,556,182 | 9,826,741 | 43,765,692 | 53,592,433 | (1,715,812 | ) | 51,876,621 | ||||||||||||||||||||||||||
Residential
Construction
|
- | - | 64,895 | 414,499 | 479,394 | 32,592,544 | 33,071,938 | (100,114 | ) | 32,971,824 | ||||||||||||||||||||||||||
Total
|
$ | 1,631,142 | $ | 1,174,516 | $ | 5,529,796 | $ | 1,970,681 | $ | 10,306,135 | $ | 111,746,992 | $ | 122,053,127 | $ | (2,003,055 | ) | $ | 120,050,072 | |||||||||||||||||
(1) Interest income is not recognized on loans past due greater than 90 days or in foreclosure.
|
Impaired Loans
|
||||||||||||||||||||
Recorded
Investment
|
Unpaid
Principal
Balance
|
Related
Allowance
|
Average
Recorded
Investment
|
Interest
Income
Recognized
|
||||||||||||||||
June 30, 2015
|
||||||||||||||||||||
With no related allowance recorded:
|
||||||||||||||||||||
Commercial
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
Residential
|
- | - | - | - | - | |||||||||||||||
Residential construction
|
- | - | - | - | - | |||||||||||||||
With an allowance recorded:
|
||||||||||||||||||||
Commercial
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
Residential
|
2,320,452 | 2,320,452 | 217,192 | 2,320,452 | - | |||||||||||||||
Residential construction
|
- | - | - | - | - | |||||||||||||||
Total:
|
||||||||||||||||||||
Commercial
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
Residential
|
2,320,452 | 2,320,452 | 217,192 | 2,320,452 | - | |||||||||||||||
Residential construction
|
- | - | - | - | - | |||||||||||||||
December 31, 2014
|
||||||||||||||||||||
With no related allowance recorded:
|
||||||||||||||||||||
Commercial
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
Residential
|
- | - | - | - | - | |||||||||||||||
Residential construction
|
414,499 | 414,499 | - | 414,499 | - | |||||||||||||||
With an allowance recorded:
|
||||||||||||||||||||
Commercial
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
Residential
|
1,556,182 | 1,556,182 | 153,446 | 1,556,182 | - | |||||||||||||||
Residential construction
|
- | - | - | - | - | |||||||||||||||
Total:
|
||||||||||||||||||||
Commercial
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
Residential
|
1,556,182 | 1,556,182 | 153,446 | 1,556,182 | - | |||||||||||||||
Residential construction
|
414,499 | 414,499 | - | 414,499 | - |
Mortgage Loan Credit Exposure
|
||||||||||||||||||||||||||||||||
Credit Risk Profile Based on Payment Activity
|
||||||||||||||||||||||||||||||||
Commercial
|
Residential
|
Residential Construction
|
Total
|
|||||||||||||||||||||||||||||
June
30,
2015
|
December
31,
2014
|
June
30,
2015
|
December
31,
2014
|
June
30,
2015
|
December
31,
2014
|
June
30,
2015
|
December
31,
2014
|
|||||||||||||||||||||||||
Performing
|
$ | 34,576,436 | $ | 35,388,756 | $ | 43,105,790 | $ | 46,571,350 | $ | 28,277,914 | $ | 32,592,544 | $ | 105,960,140 | $ | 114,552,650 | ||||||||||||||||
Nonperforming
|
- | - | 6,598,636 | 7,021,083 | 64,895 | 479,394 | 6,663,531 | 7,500,477 | ||||||||||||||||||||||||
Total
|
$ | 34,576,436 | $ | 35,388,756 | $ | 49,704,426 | $ | 53,592,433 | $ | 28,342,809 | $ | 33,071,938 | $ | 112,623,671 | $ | 122,053,127 |
Mortgage Loans on Nonaccrual Status
|
||||||||
As of
June 30,
2015
|
As of
December 31,
2014
|
|||||||
Residential
|
$ | 6,598,636 | $ | 7,021,083 | ||||
Residential construction
|
64,895 | 479,394 | ||||||
Total
|
$ | 6,663,531 | $ | 7,500,477 |
As of
June 30
2015
|
As of
December 31
2014
|
|||||||
Balance, beginning of period
|
$ | 1,718,150 | $ | 5,506,532 | ||||
Provisions for losses
|
2,919,210 | 3,053,403 | ||||||
Charge-offs
|
(384,540 | ) | (6,841,785 | ) | ||||
Balance, end of period
|
$ | 4,252,820 | $ | 1,718,150 |
Number of
Class A Shares
|
Weighted
Average
Exercise
Price
|
Number of
Class C
Shares
|
Weighted
Average
Exercise
Price
|
|||||||||||||
Outstanding at December 31, 2014
|
512,795 | $ | 3.20 | 691,591 | $ | 2.00 | ||||||||||
Granted
|
- | - | ||||||||||||||
Exercised
|
(15,406 | ) | 1.89 | (114,023 | ) | 2.14 | ||||||||||
Cancelled
|
(8,846 | ) | 2.31 | - | ||||||||||||
Outstanding at June 30, 2015
|
488,543 | $ | 3.25 | 577,568 | $ | 2.62 | ||||||||||
As of June 30, 2015:
|
||||||||||||||||
Options exercisable
|
409,961 | $ | 2.99 | 511,318 | $ | 2.34 | ||||||||||
As of June 30, 2015:
|
||||||||||||||||
Available options for future grant
|
266,649 | - | ||||||||||||||
Weighted average contractual term of options
outstanding at June 30, 2015
|
7.37 years
|
2.69 years
|
||||||||||||||
Weighted average contractual term of options
exercisable at June 30, 2015
|
6.99 years
|
2.35 years
|
||||||||||||||
Aggregated intrinsic value of options
outstanding at June 30, 2015 (1)
|
$ | 1,698,099 | $ | 2,375,472 | ||||||||||||
Aggregated intrinsic value of options
exercisable at June 30, 2015 (1)
|
$ | 1,534,777 | $ | 2,242,810 | ||||||||||||
(1) The Company used a stock price of $6.73 as of June 30, 2015 to derive intrinsic value.
|
Number of
Class A Shares
|
Weighted
Average
Exercise
Price
|
Number of
Class C Shares
|
Weighted
Average
Exercise
Price
|
|||||||||||||
Outstanding at December 31, 2013
|
405,133 | $ | 2.41 | 508,656 | $ | 2.00 | ||||||||||
Granted
|
- | - | ||||||||||||||
Exercised
|
(34,955 | ) | 1.44 | - | ||||||||||||
Cancelled
|
(1,838 | ) | 2.92 | - | ||||||||||||
Outstanding at June 30, 2014
|
368,340 | $ | 2.50 | 508,656 | $ | 2.00 | ||||||||||
As of June 30, 2014:
|
||||||||||||||||
Options exercisable
|
325,243 | $ | 2.23 | 482,406 | $ | 1.84 | ||||||||||
As of June 30, 2014:
|
||||||||||||||||
Available options for future grant
|
314,480 | 105,000 | ||||||||||||||
Weighted average contractual term of options
outstanding at June 30, 2014
|
6.77 years
|
2.11 years
|
||||||||||||||
Weighted average contractual term of options
exercisable at June 30, 2014
|
6.42 years
|
1.99 years
|
||||||||||||||
Aggregated intrinsic value of options
outstanding at June 30, 2014 (1)
|
$ | 690,130 | $ | 1,194,177 | ||||||||||||
Aggregated intrinsic value of options
exercisable at June 30, 2014 (1)
|
$ | 689,924 | $ | 1,194,177 | ||||||||||||
(1) The Company used a stock price of $4.27 as of June 30, 2014 to derive intrinsic value.
|
Three Months Ended
June 30
|
Six Months Ended
June 30
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Numerator:
|
||||||||||||||||
Net earnings
|
$ | 3,852,279 | $ | 2,624,063 | $ | 5,715,982 | $ | 2,762,911 | ||||||||
Denominator:
|
||||||||||||||||
Basic weighted-average shares outstanding
|
13,037,095 | 12,449,786 | 12,986,238 | 12,459,537 | ||||||||||||
Effect of dilutive securities:
|
||||||||||||||||
Employee stock options
|
558,823 | 447,418 | 546,403 | 455,244 | ||||||||||||
Diluted weighted-average shares outstanding
|
13,595,918 | 12,897,204 | 13,532,641 | 12,914,781 | ||||||||||||
Basic net earnings per share
|
$ | 0.30 | $ | 0.21 | $ | 0.44 | $ | 0.22 | ||||||||
Diluted net earnings per share
|
$ | 0.28 | $ | 0.20 | $ | 0.42 | $ | 0.21 |
Life
Insurance
|
Cemetery/
Mortuary
|
Mortgage
|
Eliminations
|
Consolidated
|
||||||||||||||||
For the Three Months Ended
June 30, 2015
|
||||||||||||||||||||
Revenues from external customers
|
$ | 21,476,968 | $ | 3,215,090 | $ | 51,348,557 | $ | - | $ | 76,040,615 | ||||||||||
Intersegment revenues
|
2,858,820 | 305,573 | 92,304 | (3,256,697 | ) | - | ||||||||||||||
Segment profit before income taxes
|
2,115,187 | 151,975 | 3,964,790 | - | 6,231,952 | |||||||||||||||
For the Three Months Ended
June 30, 2014
|
||||||||||||||||||||
Revenues from external customers
|
$ | 19,810,498 | $ | 3,534,881 | $ | 36,066,351 | $ | - | $ | 59,411,730 | ||||||||||
Intersegment revenues
|
2,356,195 | 334,314 | 231,249 | (2,921,758 | ) | - | ||||||||||||||
Segment profit before income taxes
|
1,515,426 | 168,911 | 2,502,760 | - | 4,187,097 | |||||||||||||||
For the Six Months Ended
June 30, 2015
|
||||||||||||||||||||
Revenues from external customers
|
$ | 42,462,468 | $ | 6,313,328 | $ | 91,314,451 | $ | - | $ | 140,090,247 | ||||||||||
Intersegment revenues
|
5,677,687 | 617,571 | 180,791 | (6,476,049 | ) | - | ||||||||||||||
Segment profit before income taxes
|
3,519,038 | 561,150 | 5,150,148 | - | 9,230,336 | |||||||||||||||
Identifiable Assets
|
695,953,881 | 103,231,245 | 70,065,224 | (136,678,259 | ) | 732,572,091 | ||||||||||||||
Goodwill
|
2,765,570 | - | - | - | 2,765,570 | |||||||||||||||
For the Six Months Ended
June 30, 2014
|
||||||||||||||||||||
Revenues from external customers
|
$ | 38,283,314 | $ | 6,575,449 | $ | 59,606,243 | $ | - | $ | 104,465,006 | ||||||||||
Intersegment revenues
|
4,417,915 | 670,612 | 395,395 | (5,483,922 | ) | - | ||||||||||||||
Segment profit before income taxes
|
2,846,895 | 351,689 | 1,154,500 | - | 4,353,084 | |||||||||||||||
Identifiable Assets
|
626,378,955 | 108,686,715 | 56,057,674 | (148,165,860 | ) | 642,957,484 | ||||||||||||||
Goodwill
|
2,802,991 | 285,191 | - | - | 3,088,182 |
a)
|
Quoted prices for similar assets or liabilities in active markets;
|
|
b)
|
Quoted prices for identical or similar assets or liabilities in non-active markets; or
|
|
c)
|
Valuation models whose inputs are observable, directly or indirectly, for substantially the full term of the asset or liability.
|
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
|
||||||||||||||||
Common stock
|
$ | 7,025,410 | $ | 7,025,410 | $ | - | $ | - | ||||||||
Total securities available for sale
|
$ | 7,025,410 | $ | 7,025,410 | $ | - | $ | - | ||||||||
Restricted assets of cemeteries and mortuaries
|
$ | 712,834 | $ | 712,834 | $ | - | $ | - | ||||||||
Cemetery perpetual care trust investments
|
639,962 | 639,962 | - | - | ||||||||||||
Derivatives - interest rate lock commitments
|
5,681,354 | - | - | 5,681,354 | ||||||||||||
Total assets accounted for at fair value on a recurring basis
|
$ | 14,059,560 | $ | 8,378,206 | $ | - | $ | 5,681,354 | ||||||||
Liabilities accounted for at fair value on a recurring basis
|
||||||||||||||||
Policyholder account balances
|
$ | (51,322,531 | ) | $ | - | $ | - | $ | (51,322,531 | ) | ||||||
Future policy benefits - annuities
|
(69,107,482 | ) | - | - | (69,107,482 | ) | ||||||||||
Derivatives - bank loan interest rate swaps
|
(22,659 | ) | - | - | (22,659 | ) | ||||||||||
- call options
|
(21,552 | ) | (21,552 | ) | - | - | ||||||||||
- put options
|
(43,941 | ) | (43,941 | ) | - | - | ||||||||||
- interest rate lock commitments
|
(11,603 | ) | - | - | (11,603 | ) | ||||||||||
Total liabilities accounted for at fair value on a recurring basis
|
$ | (120,529,768 | ) | $ | (65,493 | ) | $ | - | $ | (120,464,275 | ) |
Policyholder
Account
Balances
|
Future
Policy
Benefits -
Annuities
|
Interest
Rate
Lock
Commitments
|
Bank
Loan
Interest
Rate Swaps
|
|||||||||||||
Balance - December 31, 2014
|
$ | (45,310,699 | ) | $ | (65,540,985 | ) | $ | 1,929,851 | $ | (31,370 | ) | |||||
Total gains (losses):
|
||||||||||||||||
Included in earnings
|
(6,011,832 | ) | (3,566,497 | ) | - | - | ||||||||||
Included in other comprehensive income (loss)
|
- | - | 3,739,900 | 8,711 | ||||||||||||
Balance - June 30, 2015
|
$ | (51,322,531 | ) | $ | (69,107,482 | ) | $ | 5,669,751 | $ | (22,659 | ) |
Quoted Prices
|
||||||||||||||||
in Active
|
Significant
|
Significant
|
||||||||||||||
Markets for
|
Observable
|
Unobservable
|
||||||||||||||
Identical Assets
|
Inputs
|
Inputs
|
||||||||||||||
Total
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||||||
Assets accounted for at fair value on a nonrecurring basis
|
||||||||||||||||
Mortgage servicing rights
|
$ | 2,716,641 | - | - | $ | 2,716,641 | ||||||||||
Mortgage loans on real estate
|
320,000 | - | - | 320,000 | ||||||||||||
Total assets accounted for at fair value on a nonrecurring basis
|
$ | 3,036,641 | $ | - | $ | - | $ | 3,036,641 |
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
|
||||||||||||||||
Common stock
|
$ | 6,752,750 | $ | 6,752,750 | $ | - | $ | - | ||||||||
Total securities available for sale
|
$ | 6,752,750 | $ | 6,752,750 | $ | - | $ | - | ||||||||
Restricted assets of cemeteries and mortuaries
|
$ | 715,202 | $ | 715,202 | $ | - | $ | - | ||||||||
Cemetery perpetual care trust investments
|
695,235 | 695,235 | - | - | ||||||||||||
Derivatives - interest rate lock commitments
|
2,111,529 | - | - | 2,111,529 | ||||||||||||
Total assets accounted for at fair value on a recurring basis
|
$ | 10,274,716 | $ | 8,163,187 | $ | - | $ | 2,111,529 | ||||||||
Liabilities accounted for at fair value on a recurring basis
|
||||||||||||||||
Policyholder account balances
|
$ | (45,310,699 | ) | $ | - | $ | - | $ | (45,310,699 | ) | ||||||
Future policy benefits - annuities
|
(65,540,985 | ) | - | - | (65,540,985 | ) | ||||||||||
Derivatives - bank loan interest rate swaps
|
(31,370 | ) | - | - | (31,370 | ) | ||||||||||
- call options
|
(116,036 | ) | (116,036 | ) | - | - | ||||||||||
- put options
|
(11,867 | ) | (11,867 | ) | - | - | ||||||||||
- interest rate lock commitment
|
(181,678 | ) | - | - | (181,678 | ) | ||||||||||
Total liabilities accounted for at fair value on a recurring basis
|
$ | (111,192,635 | ) | $ | (127,903 | ) | $ | - | $ | (111,064,732 | ) |
Policyholder
Account
Balances
|
Future
Policy
Benefits -
Annuities
|
Interest
Rate
Lock
Commitments
|
Bank
Loan
Interest
Rate Swaps
|
|||||||||||||
Balance - December 31, 2013
|
$ | (48,000,668 | ) | $ | (65,052,928 | ) | $ | 1,487,908 | $ | (58,310 | ) | |||||
Total gains (losses):
|
||||||||||||||||
Included in earnings
|
2,689,969 | (488,057 | ) | - | - | |||||||||||
Included in other
|
||||||||||||||||
comprehensive income
|
- | - | 441,943 | 26,940 | ||||||||||||
Balance - December 31, 2014
|
$ | (45,310,699 | ) | $ | (65,540,985 | ) | $ | 1,929,851 | $ | (31,370 | ) |
Quoted Prices
|
||||||||||||||||
in Active
|
Significant
|
Significant
|
||||||||||||||
Markets for
|
Observable
|
Unobservable
|
||||||||||||||
Identical Assets
|
Inputs
|
Inputs
|
||||||||||||||
Total
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||||||
Assets accounted for at fair value on a
nonrecurring basis
|
||||||||||||||||
Mortgage servicing rights
|
$ | 3,741,381 | - | - | $ | 3,741,381 | ||||||||||
Real estate held for investment
|
53,500 | - | - | 53,500 | ||||||||||||
Total assets accounted for at fair value on a
nonrecurring basis
|
$ | 3,794,881 | $ | - | $ | - | $ | 3,794,881 |
Carrying Value
|
Level 1
|
Level 2
|
Level 3
|
Total
Estimated
Fair
Value
|
||||||||||||||||
Assets
|
||||||||||||||||||||
Mortgage loans:
|
||||||||||||||||||||
Residential
|
$ | 48,115,894 | $ | - | $ | - | $ | 51,322,839 | $ | 51,322,839 | ||||||||||
Residential construction
|
28,242,695 | - | - | 28,242,695 | 28,242,695 | |||||||||||||||
Commercial
|
34,389,307 | - | - | 36,043,711 | 36,043,711 | |||||||||||||||
Mortgage loans, net
|
$ | 110,747,896 | $ | - | $ | - | $ | 115,609,245 | $ | 115,609,245 | ||||||||||
Policy loans
|
7,095,642 | - | - | 7,095,642 | 7,095,642 | |||||||||||||||
Other loans
|
28,392,087 | - | - | 28,392,087 | 28,392,087 | |||||||||||||||
Short-term investments
|
21,326,531 | - | - | 21,326,531 | 21,326,531 | |||||||||||||||
Liabilities
|
||||||||||||||||||||
Bank and other loans payable
|
$ | (33,362,912 | ) | $ | - | $ | - | $ | (33,362,912 | ) | $ | (33,362,912 | ) |
Carrying Value
|
Level 1
|
Level 2
|
Level 3
|
Total
Estimated
Fair Value
|
||||||||||||||||
Assets
|
||||||||||||||||||||
Mortgage loans:
|
||||||||||||||||||||
Residential
|
$ | 51,876,621 | $ | - | $ | - | $ | 55,247,638 | $ | 55,247,638 | ||||||||||
Residential construction
|
32,971,824 | - | - | 32,971,824 | 32,971,824 | |||||||||||||||
Commercial
|
35,201,627 | - | - | 36,829,266 | 36,829,266 | |||||||||||||||
Mortgage loans, net
|
$ | 120,050,072 | $ | - | $ | - | $ | 125,048,728 | $ | 125,048,728 | ||||||||||
Policy loans
|
7,011,012 | - | - | 7,011,012 | 7,011,012 | |||||||||||||||
Other loans
|
27,114,416 | - | - | 27,114,416 | 27,114,416 | |||||||||||||||
Short-term investments
|
27,059,495 | - | - | 27,059,495 | 27,059,495 | |||||||||||||||
Liabilities
|
||||||||||||||||||||
Bank and other loans payable
|
$ | (28,989,008 | ) | $ | - | $ | - | $ | (28,989,008 | ) | $ | (28,989,008 | ) |
Fair Value of Derivative Instruments
|
||||||||||||||||||||||||||
Asset Derivatives
|
Liability Derivatives
|
|||||||||||||||||||||||||
June 30, 2015
|
December 31, 2014
|
June 30, 2015
|
December 31, 2014
|
|||||||||||||||||||||||
Balance Sheet Location
|
Fair Value
|
Balance Sheet Location
|
Fair Value
|
Balance Sheet Location
|
Fair Value
|
Balance Sheet Location
|
Fair Value
|
|||||||||||||||||||
Derivatives designated as hedging instruments:
|
||||||||||||||||||||||||||
Interest rate lock and forward sales commitments
|
other assets
|
$ | 5,681,354 |
other assets
|
$ | 2,111,529 |
Other liabilities
|
$ | 11,603 |
Other liabilities
|
$ | 181,678 | ||||||||||||||
Call options
|
-- | -- | -- | -- |
Other liabilities
|
21,552 |
Other liabilities
|
116,036 | ||||||||||||||||||
Put options
|
-- | -- | -- | -- |
Other liabilities
|
43,941 |
Other liabilities
|
11,867 | ||||||||||||||||||
Interest rate swaps
|
-- | -- | -- | -- |
Bank loans payable
|
22,659 |
Bank loans payable
|
31,370 | ||||||||||||||||||
Total
|
$ | 5,681,354 | $ | 2,111,529 | $ | 99,755 | $ | 340,951 |
Net Amount Gain (Loss) Recognized in OCI
|
Net Amount Gain (Loss) Recognized in OCI
|
|||||||||||||||
Three Months Ended June 30
|
Six Months Ended June 30
|
|||||||||||||||
Derivative - Cash Flow Hedging Relationships:
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
Interest Rate Lock Commitments
|
$ | 1,252,010 | $ | 789,149 | $ | 3,739,900 | $ | 1,238,412 | ||||||||
Interest Rate Swaps
|
4,760 | 5,449 | 8,711 | 12,300 | ||||||||||||
Sub Total
|
1,256,770 | 794,598 | 3,748,611 | 1,250,712 | ||||||||||||
Tax Effect
|
490,140 | 309,894 | 1,461,958 | 487,778 | ||||||||||||
Total
|
$ | 766,630 | $ | 484,704 | $ | 2,286,653 | $ | 762,934 |
As of June 30
2015
|
As of December 31
2014
|
|||||||
Amortized cost:
|
||||||||
Balance before valuation allowance at beginning of year
|
$ | 7,834,747 | $ | 4,844,101 | ||||
MSRs proceeds from loan sales
|
2,716,641 | 3,741,381 | ||||||
Amortization
|
(562,730 | ) | (750,735 | ) | ||||
Application of valuation allowance to write down MSRs
with other than temporary impairment
|
- | - | ||||||
Balance before valuation allowance at year end
|
$ | 9,988,658 | $ | 7,834,747 | ||||
Valuation allowance for impairment of MSRs:
|
||||||||
Balance at beginning of year
|
$ | - | $ | - | ||||
Additions
|
- | - | ||||||
Application of valuation allowance to write down MSRs
with other than temporary impairment
|
- | - | ||||||
Balance at end of period
|
$ | - | $ | - | ||||
Mortgage servicing rights, net
|
$ | 9,988,658 | $ | 7,834,747 | ||||
Estimated fair value of MSRs at end of period
|
$ | 11,599,670 | $ | 8,485,570 |
For the Three Months Ended
June 30
(unaudited)
|
For the Six Months Ended
June 30
(unaudited)
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Total revenues
|
$ | 76,040,615 | $ | 60,275,049 | $ | 140,090,247 | $ | 106,796,985 | ||||||||
Net earnings
|
$ | 3,852,279 | $ | 2,661,985 | $ | 5,715,982 | $ | 3,004,668 | ||||||||
Net earnings per Class A equivalent common share
|
$ | 0.30 | $ | 0.21 | $ | 0.44 | $ | 0.24 | ||||||||
Net earnings per Class A equivalent common share
assuming dilution
|
$ | 0.28 | $ | 0.21 | $ | 0.42 | $ | 0.23 |
Three months ended June 30
(in thousands of dollars)
|
Six months ended June 30
(in thousands of dollars)
|
|||||||||||||||||||||||
2015
|
2014
|
% Increase (Decrease)
|
2015
|
2014
|
% Increase (Decrease)
|
|||||||||||||||||||
Revenues from external customers
|
||||||||||||||||||||||||
Insurance premiums
|
$ | 13,914 | $ | 13,335 | 4 | % | $ | 27,768 | $ | 26,464 | 5 | % | ||||||||||||
Net investment income
|
6,279 | 5,452 | 15 | % | 12,490 | 10,279 | 22 | % | ||||||||||||||||
Income from loan originations
|
672 | 714 | (6 | %) | 1,113 | 1,057 | 5 | % | ||||||||||||||||
Other
|
612 | 309 | 98 | % | 1,091 | 483 | 126 | % | ||||||||||||||||
Total
|
$ | 21,477 | $ | 19,810 | 8 | % | $ | 42,462 | $ | 38,283 | 11 | % | ||||||||||||
Intersegment revenue
|
$ | 2,859 | $ | 2,356 | 21 | % | $ | 5,678 | $ | 4,418 | 29 | % | ||||||||||||
Earnings before income taxes
|
$ | 2,115 | $ | 1,516 | 40 | % | $ | 3,519 | $ | 2,847 | 24 | % |
Three months ended June 30
(in thousands of dollars)
|
Six months ended June 30
(in thousands of dollars)
|
|||||||||||||||||||||||
2015
|
2014
|
% Increase (Decrease)
|
2015
|
2014
|
% Increase (Decrease)
|
|||||||||||||||||||
Revenues from external customers
|
||||||||||||||||||||||||
Mortuary revenues
|
$ | 1,112 | $ | 1,342 | (17 | %) | $ | 2,354 | $ | 2,661 | (12 | %) | ||||||||||||
Cemetery revenues
|
2,027 | 2,248 | (10 | %) | 3,781 | 3,883 | (3 | %) | ||||||||||||||||
Other
|
76 | (56 | ) | (236 | %) | 178 | 31 | 474 | % | |||||||||||||||
Total
|
$ | 3,215 | $ | 3,534 | (9 | %) | $ | 6,313 | $ | 6,575 | (4 | %) | ||||||||||||
Earnings before income taxes
|
$ | 152 | $ | 169 | (10 | %) | $ | 561 | $ | 352 | 59 | % |
Three months ended June 30
(in thousands of dollars)
|
Six months ended June 30
(in thousands of dollars)
|
|||||||||||||||||||||||
2015
|
2014
|
% Increase (Decrease)
|
2015
|
2014
|
% Increase (Decrease)
|
|||||||||||||||||||
Revenues from external customers
|
||||||||||||||||||||||||
Income from loan originations
|
$ | 42,334 | $ | 30,413 | 39 | % | $ | 76,590 | $ | 50,457 | 52 | % | ||||||||||||
Secondary gains from investors
|
9,014 | 5,653 | 59 | % | 14,724 | 9,149 | 61 | % | ||||||||||||||||
Total
|
$ | 51,348 | $ | 36,066 | 42 | % | $ | 91,314 | $ | 59,606 | 53 | % | ||||||||||||
Earnings (loss) before income taxes
|
$ | 3,965 | $ | 2,503 | 58 | % | $ | 5,150 | $ | 1,155 | 346 | % |
|
The following Exhibits are filed herewith pursuant to Rule 601 of Regulation S-K or are incorporated by reference to previous filings.
|
(1)
|
Incorporated by reference from Registration Statement on Form S-1, as filed on September 29, 1987
|
(2)
|
Incorporated by reference from Annual Report on Form 10-K, as filed on April 3, 2002
|
(3)
|
Incorporated by reference from Report on Form 8-K/A, as filed on January 8, 2003
|
(4)
|
Incorporated by reference from Schedule 14A Definitive Proxy Statement, as filed on September 5, 2003, relating to the Company’s Annual Meeting of Stockholders
|
(5)
|
Incorporated by reference from Report on Form 10-Q, as filed on November 14, 2003
|
(6)
|
Incorporated by reference from Report on Form 10-K, as filed on March 30, 2004
|
(7)
|
Incorporated by reference from Schedule 14A Definitive Proxy Statement, as filed on June 1, 2007, relating to the Company’s Annual Meeting of Stockholders
|
(8)
|
Incorporated by reference from Report on Form 10-K, as filed on March 31, 2009
|
(9)
|
Incorporated by reference from Report on Form 10-Q, as filed on August 14, 2013
|
(10)
|
Incorporated by reference from Schedule 14A Definitive Proxy Statement, as filed on June 5, 2013, relating to the Company’s Annual Meeting of Stockholders
|
(11)
|
Incorporated by reference from Report on Form 8-K, as filed on June 13, 2014
|
(12)
|
Incorporated by reference from Schedule 14A Definitive Proxy Statement, as filed on June 2, 2014, related to Company’s Annual Meeting of Stockholders
|
Dated: August 14, 2015
|
/s/ Scott M. Quist
|
Scott M. Quist
|
|
Chairman of the Board, President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
Dated: August 14, 2015
|
/s/ Garrett S. Sill
|
Garrett S. Sill
|
|
Chief Financial Officer and Treasurer
|
|
(Principal Financial Officer and Principal Accounting Officer)
|
SECURITY NATIONAL FINANCIAL
CORPORATION
|
|
By:
/s/ Norman Wilbur
|
|
Norman Wilbur, Director and Chairman, Compensation Committee
|
|
/s/ Scott M. Quist
|
|
Scott M. Quist
|
SecurityNational Mortgage Company
|
Security National Reverse Mortgage of Utah
|
Security National Capital, Inc.
|
Security National Life Insurance Company
|
Southern Security Life Insurance Company, Inc.
|
Trans-Western Life Insurance Company
|
Memorial Insurance Company of America
|
Dry Creek Property Development, Inc.
|
New York Land Holdings, Inc.
|
Security National Funding Company
|
Security National Life Scholarship Foundation, Inc.
|
C & J Financial, LLC
|
SNFC Subsidiary, LLC
|
American Funeral Financial, LLC
|
FFC Acquisition Co., LLC dba Funeral Funding Center
|
Mortician's Choice, LLC
|
Canadian Funeral Financial, LLC
|
Cottonwood Mortuary, Inc.
|
Deseret Memorial, Inc.
|
Holladay Cottonwood Memorial Foundation
|
Green Street Mortgage Services, Inc.
|
Select Appraisal Management, Inc.
|
Marketing Source Center, Inc. dba Security National Travel Services
|
Adobe Chapel Funeral Home, Inc.
|
California Memorial Estates, Inc.
|
Crystal Rose Funeral Home, Inc.
|
Greer-Wilson Funeral Home, Inc.
|
Holladay Memorial Park, Inc.
|
Memorial Estates, Inc.
|
Memorial Mortuary, Inc.
|
Paradise Chapel Funeral Home
|
Insuradyne Corporation
|
Security National Real Estate Services, Inc.
|
Dated: August 14, 2015
|
/s/ Scott M. Quist
|
Scott M. Quist
|
|
Chairman of the Board, President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
Dated: August 14, 2015
|
/s/ Garrett S. Sill
|
Garrett S. Sill
|
|
Chief Financial Officer and Treasurer
|
|
(Principal Financial Officer and Principal Accounting Officer)
|
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated: August 14, 2015
|
/s/ Scott M. Quist
|
Scott M. Quist
|
|
Chairman of the Board, President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated: August 14, 2015
|
/s/ Garrett S. Sill
|
Garrett S. Sill
|
|
Chief Financial Officer and Treasurer
|
|
(Principal Financial Officer and Principal Accounting Officer)
|