UTAH
|
87-0345941
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
5300 South 360 West, Suite 250, Salt Lake City, Utah
|
84123
|
(Address of principal executive offices)
|
(Zip Code)
|
(801) 264-1060
(Registrant's telephone number, including area code)
|
Large accelerated filer [ ]
|
Accelerated filer [ ]
|
|
Non-accelerated filer [ ]
(Do not check if a smaller reporting company)
|
Smaller reporting company [X]
|
Class A Common Stock, $2.00 par value
|
12,481,039
|
Title of Class
|
Number of Shares Outstanding as of
|
November 13, 2015
|
|
Class C Common Stock, $2.00 par value
|
1,507,465
|
Title of Class
|
Number of Shares Outstanding as of
|
November 13, 2015
|
PART I - FINANCIAL INFORMATION
|
||
Item 1.
|
Financial Statements
|
|
Condensed Consolidated Balance Sheets as of September 30, 2015 and December 31, 2014 (unaudited)
|
3-4
|
|
Condensed Consolidated Statements of Earnings for the Three and Nine Months Ended September 30, 2015 and 2014 (unaudited)
|
5
|
|
Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2015 and 2014 (unaudited)
|
6
|
|
Condensed Consolidated Statements of Stockholders' Equity as of September 30, 2015 and September 30, 2014 (unaudited)
|
7
|
|
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2015 and 2014 (unaudited)
|
8
|
|
Notes to Condensed Consolidated Financial Statements (unaudited)
|
9
|
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
39
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
45
|
Item 4.
|
Controls and Procedures
|
46
|
PART II - OTHER INFORMATION
|
||
Item 1.
|
Legal Proceedings
|
46
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
47
|
Item 3.
|
Defaults Upon Senior Securities
|
47
|
Item 4.
|
Mine Safety Disclosures
|
47
|
Item 5.
|
Other Information
|
47
|
Item 6.
|
Exhibits
|
47
|
Signature Page
|
50
|
Assets
|
September 30
2015 |
December 31
2014 |
||||||
Investments:
|
||||||||
Fixed maturity securities, held to maturity, at amortized cost
|
$
|
133,357,324
|
$
|
135,018,347
|
||||
Equity securities, available for sale, at estimated fair value
|
7,208,726
|
6,752,750
|
||||||
Mortgage loans on real estate and construction loans, held for investment net of allowances for loan losses of $1,856,694 and $2,003,055 for 2015 and 2014
|
111,683,254
|
120,050,072
|
||||||
Real estate held for investment, net of accumulated depreciation of $11,819,249 and $10,875,419 for 2015 and 2014
|
112,661,696
|
111,411,351
|
||||||
Policy and other loans, net of allowances for doubtful accounts of $888,807 and $693,413 for 2015 and 2014
|
34,461,555
|
34,125,428
|
||||||
Short-term investments
|
19,980,369
|
27,059,495
|
||||||
Accrued investment income
|
2,496,538
|
2,483,253
|
||||||
Total investments
|
421,849,462
|
436,900,696
|
||||||
Cash and cash equivalents
|
71,895,929
|
30,855,320
|
||||||
Mortgage loans sold to investors
|
102,235,979
|
67,534,400
|
||||||
Receivables, net
|
17,332,863
|
14,544,093
|
||||||
Restricted assets
|
10,330,518
|
9,347,797
|
||||||
Cemetery perpetual care trust investments
|
2,776,516
|
2,645,423
|
||||||
Receivable from reinsurers
|
13,454,542
|
12,036,263
|
||||||
Cemetery land and improvements
|
10,819,136
|
10,848,085
|
||||||
Deferred policy and pre-need contract acquisition costs
|
56,978,862
|
50,307,503
|
||||||
Mortgage servicing rights, net
|
11,574,339
|
7,834,747
|
||||||
Property and equipment, net
|
10,256,086
|
11,307,714
|
||||||
Value of business acquired
|
9,041,840
|
8,547,627
|
||||||
Goodwill
|
2,765,570
|
2,765,570
|
||||||
Other
|
8,084,196
|
5,594,324
|
||||||
Total Assets
|
$
|
749,395,838
|
$
|
671,069,562
|
September 30
2015 |
December 31
2014 |
|||||||
Liabilities and Stockholders' Equity
|
||||||||
Liabilities
|
||||||||
Future life, annuity, and other benefits
|
$
|
514,497,225
|
$
|
476,727,465
|
||||
Unearned premium reserve
|
4,794,176
|
4,961,937
|
||||||
Bank and other loans payable
|
39,535,964
|
29,020,378
|
||||||
Deferred pre-need cemetery and mortuary contract revenues
|
12,919,510
|
13,242,143
|
||||||
Cemetery perpetual care obligation
|
3,466,190
|
3,406,718
|
||||||
Accounts payable
|
3,788,303
|
1,789,387
|
||||||
Other liabilities and accrued expenses
|
36,583,403
|
24,408,666
|
||||||
Income taxes
|
24,505,505
|
20,421,767
|
||||||
Total liabilities
|
640,090,276
|
573,978,461
|
||||||
Stockholders' Equity
|
||||||||
Common Stock:
|
||||||||
Class A: common stock - $2.00 par value; 20,000,000 shares authorized; issued 12,481,039
shares in 2015 and 12,459,240 sh
ares in 2014
|
24,962,078
|
24,918,480
|
||||||
Class B: non-voting common stock - $1.00 par value; 5,000,000 shares authorized; none issued or outstanding
|
-
|
-
|
||||||
Class C: convertible common stock -
$2.00 par value; 2,000,000 shares authorized; issued 1,507,465
shares in 2015 and 1,394,069 shares in 2014
|
3,014,930
|
2,788,138
|
||||||
Additional paid-in capital
|
26,720,371
|
25,931,119
|
||||||
Accumulated other comprehensive income, net of taxes
|
1,851,881
|
1,438,566
|
||||||
Retained earnings
|
54,705,809
|
44,101,252
|
||||||
Treasury stock at cost
- 884,375 Cl
ass A shares in 2015 and 986,264 Class A shares in 2014
|
(1,949,507
|
)
|
(2,086,454
|
)
|
||||
Total stockholders' equity
|
109,305,562
|
97,091,101
|
||||||
Total Liabilities and Stockholders' Equity
|
$
|
749,395,838
|
$
|
671,069,562
|
Three Months Ended
September 30
|
Nine Months Ended
September 30
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Revenues:
|
||||||||||||||||
Insurance premiums and other considerations
|
$
|
14,563,582
|
$
|
13,804,510
|
$
|
42,331,991
|
$
|
40,268,943
|
||||||||
Net investment income
|
8,432,414
|
8,191,962
|
24,845,931
|
20,541,749
|
||||||||||||
Net mortuary and cemetery sales
|
2,811,329
|
2,490,280
|
8,701,417
|
8,768,224
|
||||||||||||
Realized gains on investments and other assets
|
1,352,778
|
429,910
|
2,273,618
|
968,755
|
||||||||||||
Other than temporary impairments on investments
|
(56,290
|
)
|
(383,776
|
)
|
(167,497
|
)
|
(443,776
|
)
|
||||||||
Mortgage fee income
|
46,923,321
|
36,235,813
|
133,475,149
|
93,546,650
|
||||||||||||
Other
|
1,467,552
|
957,093
|
4,124,324
|
2,540,253
|
||||||||||||
Total revenues
|
75,494,686
|
61,725,792
|
215,584,933
|
166,190,798
|
||||||||||||
Benefits and expenses:
|
||||||||||||||||
Death benefits
|
7,584,209
|
6,641,923
|
23,628,492
|
20,400,042
|
||||||||||||
Surrenders and other policy benefits
|
715,209
|
707,539
|
1,888,606
|
1,850,302
|
||||||||||||
Increase in future policy benefits
|
4,620,413
|
5,278,079
|
12,840,591
|
14,492,604
|
||||||||||||
Amortization of deferred policy and pre-need acquisition costs and value of business acquired
|
1,338,084
|
1,854,041
|
3,683,437
|
4,750,976
|
||||||||||||
Selling, general and administrative expenses:
|
||||||||||||||||
Commissions
|
21,263,606
|
17,134,597
|
63,037,164
|
43,880,642
|
||||||||||||
Personnel
|
15,768,614
|
13,141,100
|
45,333,563
|
36,497,666
|
||||||||||||
Advertising
|
1,503,476
|
1,135,913
|
4,428,192
|
3,409,971
|
||||||||||||
Rent and rent related
|
1,979,767
|
1,625,624
|
5,794,633
|
4,425,105
|
||||||||||||
Depreciation on property and equipment
|
553,048
|
574,323
|
1,663,172
|
1,605,871
|
||||||||||||
Provision for loan losses and loss reserve
|
1,754,781
|
1,063,451
|
4,673,991
|
2,006,876
|
||||||||||||
Costs related to funding mortgage loans
|
2,352,611
|
1,932,627
|
6,947,976
|
5,141,946
|
||||||||||||
Other
|
6,606,960
|
5,886,301
|
19,674,568
|
16,339,983
|
||||||||||||
Interest expense
|
1,191,627
|
954,610
|
3,551,242
|
2,238,722
|
||||||||||||
Cost of goods and services sold-mortuaries and cemeteries
|
467,881
|
418,524
|
1,414,570
|
1,419,868
|
||||||||||||
Total benefits and expenses
|
67,700,286
|
58,348,652
|
198,560,197
|
158,460,574
|
||||||||||||
Earnings before income taxes
|
7,794,400
|
3,377,140
|
17,024,736
|
7,730,224
|
||||||||||||
Income tax expense
|
(2,904,615
|
)
|
(1,239,318
|
)
|
(6,418,969
|
)
|
(2,829,491
|
)
|
||||||||
Net earnings
|
$
|
4,889,785
|
$
|
2,137,822
|
$
|
10,605,767
|
$
|
4,900,733
|
||||||||
Net earnings per Class A Equivalent common share (1)
|
$
|
0.37
|
$
|
0.17
|
$
|
0.81
|
$
|
0.39
|
||||||||
Net earnings per Class A Equivalent common share-assuming dilution (1)
|
$
|
0.35
|
$
|
0.17
|
$
|
0.78
|
$
|
0.38
|
||||||||
Weighted-average Class A equivalent common share outstanding (1)
|
13,146,617
|
12,455,314
|
13,023,962
|
12,487,646
|
||||||||||||
Weighted-average Class A equivalent common shares outstanding-assuming dilution (1)
|
13,775,102
|
12,924,765
|
13,598,186
|
12,931,350
|
Three Months Ended
September 30
|
Nine Months Ended
September 30
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Net earnings
|
$
|
4,889,785
|
$
|
2,137,822
|
$
|
10,605,767
|
$
|
4,900,733
|
||||||||
Other comprehensive income (loss):
|
||||||||||||||||
Net unrealized gains (losses) on derivative instruments
|
(859,581
|
)
|
(429,209
|
)
|
1,427,072
|
333,725
|
||||||||||
Net unrealized gains (losses) on available for sale securities
|
(619,641
|
)
|
(235,888
|
)
|
(1,013,757
|
)
|
(75,822
|
)
|
||||||||
Other comprehensive income (loss)
|
(1,479,222
|
)
|
(665,097
|
)
|
413,315
|
257,903
|
||||||||||
Comprehensive income
|
$
|
3,410,563
|
$
|
1,472,725
|
$
|
11,019,082
|
$
|
5,158,636
|
Class A Common Stock
|
Class C Common Stock
|
Additional Paid-in Capital
|
Accumulated
Other
Comprehensive Income
|
Retained Earnings
|
Treasury Stock
|
Total
|
||||||||||||||||||||||
Balance at December 31, 2013
|
$
|
23,614,574
|
$
|
2,660,382
|
$
|
23,215,875
|
$
|
1,218,396
|
$
|
39,666,587
|
$
|
(2,624,625
|
)
|
$
|
87,751,189
|
|||||||||||||
Net earnings
|
-
|
-
|
-
|
-
|
4,900,733
|
-
|
4,900,733
|
|||||||||||||||||||||
Other comprehensive income
|
-
|
-
|
-
|
257,903
|
-
|
-
|
257,903
|
|||||||||||||||||||||
Grant of stock options
|
-
|
-
|
237,398
|
-
|
-
|
-
|
237,398
|
|||||||||||||||||||||
Reverse stock split true up
|
-
|
30
|
-
|
-
|
(30
|
)
|
-
|
-
|
||||||||||||||||||||
Exercise of stock options
|
80,936
|
-
|
(22,864
|
)
|
-
|
-
|
-
|
58,072
|
||||||||||||||||||||
Sale of treasury stock
|
-
|
-
|
240,501
|
-
|
-
|
395,994
|
636,495
|
|||||||||||||||||||||
Stock Dividends
|
3,446
|
(1
|
)
|
4,910
|
-
|
(8,355
|
)
|
-
|
-
|
|||||||||||||||||||
Conversion Class C to Class A
|
2,772
|
(2,771
|
)
|
(2
|
)
|
-
|
-
|
-
|
(1
|
)
|
||||||||||||||||||
Balance at September 30, 2014
|
$
|
23,701,728
|
$
|
2,657,640
|
$
|
23,675,818
|
$
|
1,476,299
|
$
|
44,558,935
|
$
|
(2,228,631
|
)
|
$
|
93,841,789
|
|||||||||||||
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
|
-
|
-
|
-
|
-
|
10,605,767
|
-
|
10,605,767
|
|||||||||||||||||||||
Other comprehensive income
|
-
|
-
|
-
|
413,315
|
-
|
-
|
413,315
|
|||||||||||||||||||||
Grant of stock options
|
-
|
-
|
299,986
|
-
|
-
|
-
|
299,986
|
|||||||||||||||||||||
Exercise of stock options
|
41,862
|
228,046
|
(1,208
|
)
|
-
|
-
|
(244,009
|
)
|
24,691
|
|||||||||||||||||||
Sale of treasury stock
|
-
|
-
|
489,746
|
-
|
-
|
380,956
|
870,702
|
|||||||||||||||||||||
Stock Dividends
|
480
|
2
|
728
|
-
|
(1,210
|
)
|
-
|
-
|
||||||||||||||||||||
Conversion Class C to Class A
|
1,256
|
(1,256
|
)
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||
Balance at September 30, 2015
|
$
|
24,962,078
|
$
|
3,014,930
|
$
|
26,720,371
|
$
|
1,851,881
|
$
|
54,705,809
|
$
|
(1,949,507
|
)
|
$
|
109,305,562
|
Nine Months Ended
September 30
|
||||||||
2015
|
2014
|
|||||||
Cash flows from operating activities:
|
||||||||
Net cash provided by (used in) operating activities
|
$
|
(3,677,377
|
)
|
$
|
36,391,145
|
|||
Cash flows from investing activities:
|
||||||||
Securities held to maturity:
|
||||||||
Purchase-fixed maturity securities
|
(8,866,792
|
)
|
(1,089,843
|
)
|
||||
Calls and maturities - fixed maturity securities
|
10,500,608
|
8,930,341
|
||||||
Securities available for sale:
|
||||||||
Purchase - equity securities
|
(3,457,180
|
)
|
(4,859,850
|
)
|
||||
Sales - equity securities
|
1,823,404
|
2,679,292
|
||||||
Purchase of short-term investments
|
(31,768,007
|
)
|
(15,166,706
|
)
|
||||
Sales of short-term investments
|
38,731,918
|
2,278,147
|
||||||
Purchases of restricted assets
|
(1,027,533
|
)
|
(2,818,985
|
)
|
||||
Changes in assets for perpetual care trusts
|
(217,025
|
)
|
(173,172
|
)
|
||||
Amount received for perpetual care trusts
|
59,472
|
97,207
|
||||||
Mortgage, policy, and other loans made
|
(272,667,236
|
)
|
(212,307,189
|
)
|
||||
Payments received for mortgage, policy and other loans
|
278,315,445
|
177,332,341
|
||||||
Purchase of property and equipment
|
(2,286,053
|
)
|
(1,093,783
|
)
|
||||
Sale of property and equipment
|
2,899,322
|
-
|
||||||
Purchase of real estate
|
(11,652,845
|
)
|
(10,484,664
|
)
|
||||
Sale of real estate
|
11,194,483
|
3,491,378
|
||||||
Cash received from reinsurance
|
24,020,215
|
13,553,864
|
||||||
Cash paid for purchase of subsidiaries, net of cash acquired
|
-
|
(3,000,000
|
)
|
|||||
Net cash provided by (used in) investing activities
|
35,602,196
|
(42,631,622
|
)
|
|||||
Cash flows from financing activities:
|
||||||||
Annuity contract receipts
|
7,793,428
|
7,735,783
|
||||||
Annuity contract withdrawals
|
(9,249,285
|
)
|
(11,079,789
|
)
|
||||
Proceeds from stock options exercised
|
24,691
|
58,072
|
||||||
Repayment of bank loans on notes and contracts
|
(1,583,942
|
)
|
(1,772,665
|
)
|
||||
Proceeds from borrowing on bank loans
|
12,130,898
|
5,646,518
|
||||||
Net cash provided by financing activities
|
9,115,790
|
587,919
|
||||||
Net change in cash and cash equivalents
|
41,040,609
|
(5,652,558
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
30,855,320
|
38,203,164
|
||||||
Cash and cash equivalents at end of period
|
$
|
71,895,929
|
$
|
32,550,606
|
||||
Non Cash Investing and Financing Activities
|
||||||||
Mortgage loans foreclosed into real estate
|
$
|
2,659,985
|
$
|
886,576
|
Amortized
Cost |
Gross
Unrealized Gains |
Gross
Unrealized
Losses
|
Estimated
Fair Value |
|||||||||||||
September 30, 2015
|
||||||||||||||||
Fixed maturity securities held to maturity carried at amortized cost:
|
||||||||||||||||
Bonds:
|
||||||||||||||||
U.S. Treasury securities and obligations of U.S. Government agencies
|
$
|
1,860,138
|
$
|
340,699
|
$
|
-
|
$
|
2,200,837
|
||||||||
Obligations of states and political subdivisions
|
1,808,183
|
220,697
|
(2,624
|
)
|
2,026,256
|
|||||||||||
Corporate securities including public utilities
|
126,024,969
|
11,952,326
|
(3,505,213
|
)
|
134,472,082
|
|||||||||||
Mortgage-backed securities
|
3,052,011
|
241,761
|
(6,855
|
)
|
3,286,917
|
|||||||||||
Redeemable preferred stock
|
612,023
|
27,529
|
-
|
639,552
|
||||||||||||
Total fixed maturity securities held to maturity
|
$
|
133,357,324
|
$
|
12,783,012
|
$
|
(3,514,692
|
)
|
$
|
142,625,644
|
Cost |
Gross
Unrealized Gains |
Gross
Unrealized Losses |
Estimated
Fair Value |
|||||||||||||
September 30, 2015
|
||||||||||||||||
Equity securities available for sale at estimated fair value:
|
||||||||||||||||
Common stock:
|
||||||||||||||||
Industrial, miscellaneous and all other
|
$
|
9,012,605
|
$
|
88,504
|
$
|
(1,892,383
|
)
|
$
|
7,208,726
|
|||||||
Total equity securities available for sale at estimated fair value
|
$
|
9,012,605
|
$
|
88,504
|
$
|
(1,892,383
|
)
|
$
|
7,208,726
|
|||||||
Mortgage loans on real estate and construction loans held for investment at amortized cost:
|
||||||||||||||||
Residential
|
$
|
48,076,245
|
||||||||||||||
Residential construction
|
28,862,660
|
|||||||||||||||
Commercial
|
36,601,043
|
|||||||||||||||
Less: Allowance for loan losses
|
(1,856,694
|
)
|
||||||||||||||
Total mortgage loans on real estate and construction loans held for investment
|
$
|
111,683,254
|
||||||||||||||
Real estate held for investment - net of depreciation
|
$
|
112,661,696
|
||||||||||||||
Policy and other loans at amortized cost:
|
||||||||||||||||
Policy loans
|
$
|
7,038,768
|
||||||||||||||
Other loans
|
28,311,594
|
|||||||||||||||
Less: Allowance for doubtful accounts
|
(888,807
|
)
|
||||||||||||||
Total policy and other loans at amortized cost
|
$
|
34,461,555
|
||||||||||||||
Short-term investments at amortized cost
|
$
|
19,980,369
|
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 September 30, 2015
|
||||||||||||||||||||
Obligations of states and political subdivisions
|
$
|
-
|
0
|
$
|
2,624
|
1
|
$
|
2,624
|
||||||||||||
Corporate securities including public utilities
|
2,798,201
|
74
|
707,012
|
12
|
3,505,213
|
|||||||||||||||
Mortgage-backed securities
|
6,855
|
2
|
-
|
0
|
6,855
|
|||||||||||||||
Total unrealized losses
|
$
|
2,805,056
|
76
|
$
|
709,636
|
13
|
$
|
3,514,692
|
||||||||||||
Fair Value
|
$
|
23,917,114
|
$
|
2,327,984
|
$
|
26,245,098
|
||||||||||||||
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 September 30, 2015
|
||||||||||||||||||||
Industrial, miscellaneous and all other
|
$
|
973,583
|
273
|
$
|
918,800
|
66
|
$
|
1,892,383
|
||||||||||||
Total unrealized losses
|
$
|
973,583
|
273
|
$
|
918,800
|
66
|
$
|
1,892,383
|
||||||||||||
Fair Value
|
$
|
4,723,167
|
$
|
802,547
|
$
|
5,525,714
|
||||||||||||||
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
|
$
|
749,780
|
$
|
753,840
|
||||
Due in 2016 through 2019
|
30,426,998
|
33,178,552
|
||||||
Due in 2020 through 2024
|
28,926,814
|
30,445,969
|
||||||
Due after 2024
|
69,589,698
|
74,320,814
|
||||||
Mortgage-backed securities
|
3,052,011
|
3,286,917
|
||||||
Redeemable preferred stock
|
612,023
|
639,552
|
||||||
Total held to maturity
|
$
|
133,357,324
|
$
|
142,625,644
|
Cost |
Estimated Fair
Value |
|||||||
Available for Sale:
|
||||||||
Common stock
|
$
|
9,012,605
|
$
|
7,208,726
|
||||
Total available for sale
|
$
|
9,012,605
|
$
|
7,208,726
|
Three Months Ended
September 30
|
Nine Months Ended
September 30
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Fixed maturity securities held to maturity:
|
||||||||||||||||
Gross realized gains
|
$
|
15,279
|
$
|
211,403
|
$
|
374,337
|
$
|
258,951
|
||||||||
Gross realized losses
|
(22,796
|
)
|
(66,459
|
)
|
(82,166
|
)
|
(68,742
|
)
|
||||||||
Other than temporary impairments
|
(30,000
|
)
|
(30,000
|
)
|
(90,000
|
)
|
(90,000
|
)
|
||||||||
Securities available for sale:
|
||||||||||||||||
Gross realized gains
|
35,009
|
77,386
|
165,018
|
214,303
|
||||||||||||
Gross realized losses
|
(2,521
|
)
|
(27,651
|
)
|
(3,536
|
)
|
(38,918
|
)
|
||||||||
Other than temporary impairments
|
(26,290
|
)
|
-
|
(77,497
|
)
|
-
|
||||||||||
Other assets:
|
||||||||||||||||
Gross realized gains
|
1,731,939
|
352,151
|
2,187,271
|
720,082
|
||||||||||||
Gross realized losses
|
(404,132
|
)
|
(116,920
|
)
|
(367,306
|
)
|
(116,921
|
)
|
||||||||
Other than temporary impairments
|
-
|
(353,776
|
)
|
-
|
(353,776
|
)
|
||||||||||
Total
|
$
|
1,296,488
|
$
|
46,134
|
$
|
2,106,121
|
$
|
524,979
|
Three Months Ended
September 30
|
Nine Months Ended
September 30
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Fixed maturity securities
|
$
|
2,014,014
|
$
|
2,036,407
|
$
|
6,139,698
|
$
|
6,212,852
|
||||||||
Equity securities
|
61,238
|
73,110
|
175,954
|
163,109
|
||||||||||||
Mortgage loans on real estate
|
1,754,852
|
2,216,711
|
5,396,016
|
5,605,882
|
||||||||||||
Real estate
|
2,320,242
|
2,125,374
|
6,674,594
|
6,416,939
|
||||||||||||
Policy loans
|
219,916
|
195,138
|
597,101
|
574,393
|
||||||||||||
Short-term investments, principally gains on sale of mortgage loans and other
|
4,777,404
|
3,831,378
|
13,741,796
|
8,512,479
|
||||||||||||
Gross investment income
|
11,147,666
|
10,478,118
|
32,725,159
|
27,485,654
|
||||||||||||
Investment expenses
|
(2,715,252
|
)
|
(2,286,156
|
)
|
(7,879,228
|
)
|
(6,943,905
|
)
|
||||||||
Net investment income
|
$
|
8,432,414
|
$
|
8,191,962
|
$
|
24,845,931
|
$
|
20,541,749
|
Allowance for Credit Losses and Recorded Investment in Mortgage Loans
|
||||||||||||||||
Commercial
|
Residential
|
Residential Construction
|
Total
|
|||||||||||||
September 30, 2015
|
||||||||||||||||
Allowance for credit losses:
|
||||||||||||||||
Beginning balance - January 1, 2015
|
$
|
187,129
|
$
|
1,715,812
|
$
|
100,114
|
$
|
2,003,055
|
||||||||
Charge-offs
|
-
|
-
|
-
|
-
|
||||||||||||
Provision
|
-
|
(146,361
|
)
|
-
|
(146,361
|
)
|
||||||||||
Ending balance -September 30, 2015
|
$
|
187,129
|
$
|
1,569,451
|
$
|
100,114
|
$
|
1,856,694
|
||||||||
Ending balance: individually evaluated for impairment
|
$
|
-
|
$
|
198,818
|
$
|
-
|
$
|
198,818
|
||||||||
Ending balance: collectively evaluated for impairment
|
$
|
187,129
|
$
|
1,370,634
|
$
|
100,114
|
$
|
1,657,877
|
||||||||
Ending balance: loans acquired with deteriorated credit quality
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
Mortgage loans:
|
||||||||||||||||
Ending balance
|
$
|
36,601,043
|
$
|
48,076,245
|
$
|
28,862,660
|
$
|
113,539,948
|
||||||||
Ending balance: individually evaluated for impairment
|
$
|
-
|
$
|
2,989,318
|
$
|
-
|
$
|
2,989,318
|
||||||||
Ending balance: collectively evaluated for impairment
|
$
|
36,601,043
|
$
|
45,086,928
|
$
|
28,862,660
|
$
|
110,550,631
|
||||||||
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 |
||||||||||||||||||||||||||||
September 30, 2015
|
||||||||||||||||||||||||||||||||||||
Commercial
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
36,601,043
|
$
|
36,601,043
|
$
|
(187,129
|
)
|
$
|
36,413,914
|
|||||||||||||||||
Residential
|
1,183,084
|
960,999
|
2,207,683
|
2,989,318
|
7,341,084
|
40,735,161
|
48,076,245
|
(1,569,451
|
)
|
46,506,794
|
||||||||||||||||||||||||||
Residential
Construction |
-
|
-
|
64,895
|
-
|
64,895
|
28,797,765
|
28,862,660
|
(100,114
|
)
|
28,762,546
|
||||||||||||||||||||||||||
Total
|
$
|
1,183,084
|
$
|
960,999
|
$
|
2,272,578
|
$
|
2,989,318
|
$
|
7,405,979
|
$
|
106,133,969
|
$
|
113,539,948
|
$
|
(1,856,694
|
)
|
$
|
111,683,254
|
|||||||||||||||||
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
|
||||||||||||||||
September 30, 2015
|
||||||||||||||||||||
With no related allowance recorded:
|
||||||||||||||||||||
Commercial
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||
Residential
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Residential construction
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
With an allowance recorded:
|
||||||||||||||||||||
Commercial
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||
Residential
|
2,989,318
|
2,989,318
|
198,818
|
2,989,318
|
-
|
|||||||||||||||
Residential construction
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Total:
|
||||||||||||||||||||
Commercial
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||
Residential
|
2,989,318
|
2,989,318
|
198,818
|
2,989,318
|
-
|
|||||||||||||||
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
|
|||||||||||||||||||||||||||||
September
30, 2015 |
December
31, 2014 |
September
30, 2015 |
December
31, 2014 |
September
30, 2015 |
December
31, 2014 |
September
30, 2015 |
December
31, 2014 |
|||||||||||||||||||||||||
Performing
|
$
|
36,601,043
|
$
|
35,388,756
|
$
|
42,879,244
|
$
|
46,571,350
|
$
|
28,797,765
|
$
|
32,592,544
|
$
|
108,278,052
|
$
|
114,552,650
|
||||||||||||||||
Nonperforming
|
-
|
-
|
5,197,001
|
7,021,083
|
64,895
|
479,394
|
5,261,896
|
7,500,477
|
||||||||||||||||||||||||
Total
|
$
|
36,601,043
|
$
|
35,388,756
|
$
|
48,076,245
|
$
|
53,592,433
|
$
|
28,862,660
|
$
|
33,071,938
|
$
|
113,539,948
|
$
|
122,053,127
|
Mortgage Loans on Nonaccrual Status
|
||||||||
As of
September 30
2015 |
As of
December 31
2014 |
|||||||
Residential
|
$
|
5,197,001
|
$
|
7,021,083
|
||||
Residential construction
|
64,895
|
479,394
|
||||||
Total
|
$
|
5,261,896
|
$
|
7,500,477
|
As of
September 30
2015 |
As of
December 31
2014 |
|||||||
Balance, beginning of period
|
$
|
1,718,150
|
$
|
5,506,532
|
||||
Provisions for losses
|
4,673,991
|
3,053,403
|
||||||
Charge-offs
|
(640,990
|
)
|
(6,841,785
|
)
|
||||
Balance, end of period
|
$
|
5,751,151
|
$
|
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
|
(23,820
|
)
|
1.85
|
(114,023
|
)
|
2.14
|
||||||||||
Cancelled
|
(8,846
|
)
|
2.31
|
-
|
||||||||||||
Outstanding at September 30, 2015
|
480,129
|
$
|
3.28
|
577,568
|
$
|
2.62
|
||||||||||
As of September 30, 2015:
|
||||||||||||||||
Options exercisable
|
447,571
|
$
|
3.17
|
550,693
|
$
|
2.51
|
||||||||||
As of September 30, 2015:
|
||||||||||||||||
Available options for future grant
|
561,649
|
155,000
|
||||||||||||||
Weighted average contractual term of options outstanding at September 30, 2015
|
7.15 years
|
2.43 years
|
||||||||||||||
Weighted average contractual term of options exercisable at September 30, 2015
|
7.00 years
|
2.35 years
|
||||||||||||||
Aggregated intrinsic value of options outstanding at September 30, 2015 (1)
|
$
|
1,646,768
|
$
|
2,363,921
|
||||||||||||
Aggregated intrinsic value of options exercisable at September 30, 2015 (1)
|
$
|
1,583,605
|
$
|
2,312,190
|
||||||||||||
(1) The Company used a stock price of $6.71 as of September 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
|
52,000
|
4.29
|
50,000
|
4.72
|
||||||||||||
Exercised
|
(40,468
|
)
|
1.66
|
-
|
||||||||||||
Cancelled
|
(8,201
|
)
|
2.29
|
-
|
||||||||||||
Outstanding at September 30, 2014
|
408,464
|
$
|
2.75
|
558,656
|
$
|
2.25
|
||||||||||
As of September 30, 2014:
|
||||||||||||||||
Options exercisable
|
334,869
|
$
|
2.40
|
495,532
|
$
|
1.92
|
||||||||||
As of September 30, 2014:
|
||||||||||||||||
Available options for future grant
|
412,480
|
55,000
|
||||||||||||||
Weighted average contractual term of options outstanding at September 30, 2014
|
7.01 years
|
2.57 years
|
||||||||||||||
Weighted average contractual term of options exercisable at September 30, 2014
|
6.45 years
|
1.80 years
|
||||||||||||||
Aggregated intrinsic value of options outstanding at September 30, 2014 (1)
|
$
|
913,166
|
$
|
1,524,902
|
||||||||||||
Aggregated intrinsic value of options exercisable at September 30, 2014 (1)
|
$
|
869,804
|
$
|
1,512,402
|
||||||||||||
(1) The Company used a stock price of $4.97 as of September 30, 2014 to derive intrinsic value.
|
Three Months Ended
September 30 |
Nine Months Ended
September 30 |
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Numerator:
|
||||||||||||||||
Net earnings
|
$
|
4,889,785
|
$
|
2,137,822
|
$
|
10,605,767
|
$
|
4,900,733
|
||||||||
Denominator:
|
||||||||||||||||
Basic weighted-average shares outstanding
|
13,146,617
|
12,455,314
|
13,023,962
|
12,487,646
|
||||||||||||
Effect of dilutive securities:
|
||||||||||||||||
Employee stock options
|
628,485
|
469,451
|
574,224
|
443,704
|
||||||||||||
Diluted weighted-average shares outstanding
|
13,775,102
|
12,924,765
|
13,598,186
|
12,931,350
|
||||||||||||
Basic net earnings per share
|
$
|
0.37
|
$
|
0.17
|
$
|
0.81
|
$
|
0.39
|
||||||||
Diluted net earnings per share
|
$
|
0.35
|
$
|
0.17
|
$
|
0.78
|
$
|
0.38
|
Life Insurance
|
Cemetery/
Mortuary |
Mortgage
|
Eliminations
|
Consolidated
|
||||||||||||||||
For the Three Months Ended
|
||||||||||||||||||||
September 30, 2015
|
||||||||||||||||||||
Revenues from external customers
|
$
|
23,148,090
|
$
|
3,123,168
|
$
|
49,223,428
|
$
|
-
|
$
|
75,494,686
|
||||||||||
Intersegment revenues
|
3,206,703
|
292,445
|
76,159
|
(3,575,307
|
)
|
-
|
||||||||||||||
Segment profit before income taxes
|
3,655,998
|
250,111
|
3,888,291
|
-
|
7,794,400
|
|||||||||||||||
For the Three Months Ended
|
||||||||||||||||||||
September 30, 2014
|
||||||||||||||||||||
Revenues from external customers
|
$
|
21,552,754
|
$
|
2,707,908
|
$
|
37,465,130
|
$
|
-
|
$
|
61,725,792
|
||||||||||
Intersegment revenues
|
2,407,685
|
331,415
|
166,043
|
(2,905,143
|
)
|
-
|
||||||||||||||
Segment profit before income taxes
|
1,986,732
|
(119,548
|
)
|
1,509,956
|
-
|
3,377,140
|
||||||||||||||
For the Nine Months Ended
|
||||||||||||||||||||
September 30, 2015
|
||||||||||||||||||||
Revenues from external customers
|
$
|
65,610,558
|
$
|
9,436,496
|
$
|
140,537,879
|
$
|
-
|
$
|
215,584,933
|
||||||||||
Intersegment revenues
|
8,884,390
|
910,016
|
256,950
|
(10,051,356
|
)
|
-
|
||||||||||||||
Segment profit before income taxes
|
7,175,036
|
811,261
|
9,038,439
|
-
|
17,024,736
|
|||||||||||||||
Identifiable Assets
|
709,683,255
|
100,760,704
|
71,954,237
|
(133,002,358
|
)
|
749,395,838
|
||||||||||||||
Goodwill
|
2,765,570
|
-
|
-
|
-
|
2,765,570
|
|||||||||||||||
For the Nine Months Ended
|
||||||||||||||||||||
September 30, 2014
|
||||||||||||||||||||
Revenues from external customers
|
$
|
59,836,068
|
$
|
9,283,357
|
$
|
97,071,373
|
$
|
-
|
$
|
166,190,798
|
||||||||||
Intersegment revenues
|
6,825,600
|
1,002,027
|
561,438
|
(8,389,065
|
)
|
-
|
||||||||||||||
Segment profit before income taxes
|
4,833,627
|
232,141
|
2,664,456
|
-
|
7,730,224
|
|||||||||||||||
Identifiable Assets
|
646,540,190
|
106,836,565
|
56,961,903
|
(149,825,928
|
)
|
660,512,730
|
||||||||||||||
Goodwill
|
2,765,570
|
285,191
|
-
|
-
|
3,050,761
|
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
|
$
|
7,208,726
|
$
|
7,208,726
|
$
|
-
|
$
|
-
|
||||||||
Total securities available for sale
|
$
|
7,208,726
|
$
|
7,208,726
|
$
|
-
|
$
|
-
|
||||||||
Restricted assets of cemeteries and mortuaries
|
$
|
670,390
|
$
|
670,390
|
$
|
-
|
$
|
-
|
||||||||
Cemetery perpetual care trust investments
|
609,303
|
609,303
|
-
|
-
|
||||||||||||
Derivatives - interest rate lock commitments
|
4,756,170
|
-
|
-
|
4,756,170
|
||||||||||||
Total assets accounted for at fair value on a recurring basis
|
$
|
13,244,589
|
$
|
8,488,419
|
$
|
-
|
$
|
4,756,170
|
||||||||
Liabilities accounted for at fair value on a recurring basis
|
||||||||||||||||
Policyholder account balances
|
$
|
(50,915,543
|
)
|
$
|
-
|
$
|
-
|
$
|
(50,915,543
|
)
|
||||||
Future policy benefits - annuities
|
(63,289,669
|
)
|
-
|
-
|
(63,289,669
|
)
|
||||||||||
Derivatives - call options
|
(6,715
|
)
|
(6,715
|
)
|
-
|
-
|
||||||||||
- put options
|
(103,684
|
)
|
(103,684
|
)
|
-
|
-
|
||||||||||
- interest rate lock commitments
|
(518,227
|
)
|
-
|
-
|
(518,227
|
)
|
||||||||||
Total liabilities accounted for at fair value on a recurring basis
|
$
|
(114,833,838
|
)
|
$
|
(110,399
|
)
|
$
|
-
|
$
|
(114,723,439
|
)
|
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
|
(5,604,844
|
)
|
2,251,316
|
-
|
-
|
|||||||||||
Included in other comprehensive income
|
-
|
-
|
2,308,092
|
31,370
|
||||||||||||
Balance - September 30, 2015
|
$
|
(50,915,543
|
)
|
$
|
(63,289,669
|
)
|
$
|
4,237,943
|
$
|
-
|
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
|
$
|
46,506,794
|
$
|
-
|
$
|
-
|
$
|
49,579,568
|
$
|
49,579,568
|
||||||||||
Residential construction
|
28,762,546
|
-
|
-
|
28,762,546
|
28,762,546
|
|||||||||||||||
Commercial
|
36,413,914
|
-
|
-
|
38,062,674
|
38,062,674
|
|||||||||||||||
Mortgage loans, net
|
$
|
111,683,254
|
$
|
-
|
$
|
-
|
$
|
116,404,788
|
$
|
116,404,788
|
||||||||||
Policy loans
|
7,038,768
|
-
|
-
|
7,038,768
|
7,038,768
|
|||||||||||||||
Other loans
|
27,422,787
|
-
|
-
|
27,422,787
|
27,422,787
|
|||||||||||||||
Short-term investments
|
19,980,369
|
-
|
-
|
19,980,369
|
19,980,369
|
|||||||||||||||
Liabilities
|
||||||||||||||||||||
Bank and other loans payable
|
$
|
(39,535,964
|
)
|
$
|
-
|
$
|
-
|
$
|
(39,535,964
|
)
|
$
|
(39,535,964
|
)
|
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
|
|||||||||||||||||||||||||
September 30, 2015
|
December 31, 2014
|
September 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
|
$
|
4,756,170
|
other assets
|
$
|
2,111,529
|
Other liabilities
|
$
|
518,227
|
Other liabilities
|
$
|
181,678
|
||||||||||||||
Call options
|
--
|
--
|
--
|
--
|
Other liabilities
|
6,715
|
Other liabilities
|
116,036
|
||||||||||||||||||
Put options
|
--
|
--
|
--
|
--
|
Other liabilities
|
103,684
|
Other liabilities
|
11,867
|
||||||||||||||||||
Interest rate swaps
|
--
|
--
|
--
|
--
|
Bank loans payable
|
-
|
Bank loans payable
|
31,370
|
||||||||||||||||||
Total
|
$
|
4,756,170
|
$
|
2,111,529
|
$
|
628,626
|
$
|
340,951
|
Net Amount
Gain (Loss)
Recognized
in OCI
|
Net Amount
Gain (Loss)
Recognized
in OCI
|
|||||||||||||||
Three Months Ended
September 30
|
Nine Months Ended
September 30
|
|||||||||||||||
Derivative - Cash Flow Hedging Relationships:
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
Interest Rate Lock Commitments
|
$
|
(1,431,809
|
)
|
$
|
(713,276
|
)
|
$
|
2,308,092
|
$
|
525,136
|
||||||
Interest Rate Swaps
|
22,659
|
9,655
|
31,370
|
21,955
|
||||||||||||
Sub Total
|
(1,409,150
|
)
|
(703,621
|
)
|
2,339,462
|
547,091
|
||||||||||
Tax Effect
|
(549,569
|
)
|
(274,412
|
)
|
912,390
|
213,366
|
||||||||||
Total
|
$
|
(859,581
|
)
|
$
|
(429,209
|
)
|
$
|
1,427,072
|
$
|
333,725
|
As of
September 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
|
4,674,218
|
3,741,381
|
||||||
Amortization
|
(934,626
|
)
|
(750,735
|
)
|
||||
Application of valuation allowance to write down MSRs with other than temporary impairment
|
-
|
-
|
||||||
Balance before valuation allowance at year end
|
$
|
11,574,339
|
$
|
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
|
$
|
11,574,339
|
$
|
7,834,747
|
||||
Estimated fair value of MSRs at end of period
|
$
|
12,093,178
|
$
|
8,485,570
|
For the
Three Months Ended
September 30 (unaudited) |
For the
Nine Months Ended
September 30 (unaudited) |
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Total revenues
|
$
|
75,494,686
|
$
|
61,725,792
|
$
|
215,584,933
|
$
|
168,522,777
|
||||||||
Net earnings
|
$
|
4,889,785
|
$
|
2,137,822
|
$
|
10,605,767
|
$
|
5,142,490
|
||||||||
Net earnings per Class A equivalent common share
|
$
|
0.37
|
$
|
0.17
|
$
|
0.81
|
$
|
0.41
|
||||||||
Net earnings per Class A equivalent common share assuming dilution
|
$
|
0.35
|
$
|
0.17
|
$
|
0.78
|
$
|
0.40
|
Three months ended September 30
(in thousands of dollars) |
Nine months ended September 30
(in thousands of dollars) |
|||||||||||||||||||||||
2015
|
2014
|
% Increase (Decrease)
|
2015
|
2014
|
% Increase (Decrease)
|
|||||||||||||||||||
Revenues from external customers
|
||||||||||||||||||||||||
Insurance premiums
|
$
|
14,564
|
$
|
13,805
|
5
|
%
|
$
|
42,332
|
$
|
40,269
|
5
|
%
|
||||||||||||
Net investment income
|
6,127
|
6,600
|
(7
|
%)
|
18,617
|
16,879
|
10
|
%
|
||||||||||||||||
Income from loan originations
|
700
|
1,060
|
(34
|
%)
|
1,813
|
2,117
|
(14
|
%)
|
||||||||||||||||
Other
|
1,757
|
88
|
1897
|
%
|
2,849
|
571
|
399
|
%
|
||||||||||||||||
Total
|
$
|
23,148
|
$
|
21,553
|
7
|
%
|
$
|
65,611
|
$
|
59,836
|
10
|
%
|
||||||||||||
Intersegment revenue
|
$
|
3,206
|
$
|
2,408
|
33
|
%
|
$
|
8,884
|
$
|
6,826
|
30
|
%
|
||||||||||||
Earnings before income taxes
|
$
|
3,656
|
$
|
1,987
|
84
|
%
|
$
|
7,175
|
$
|
4,834
|
48
|
%
|
Three months ended September 30
(in thousands of dollars) |
Nine months ended September 30
(in thousands of dollars) |
|||||||||||||||||||||||
2015
|
2014
|
% Increase (Decrease)
|
2015
|
2014
|
% Increase (Decrease)
|
|||||||||||||||||||
Revenues from external customers
|
||||||||||||||||||||||||
Mortuary revenues
|
$
|
1,169
|
$
|
1,179
|
(1
|
%)
|
$
|
3,523
|
$
|
3,840
|
(8
|
%)
|
||||||||||||
Cemetery revenues
|
1,769
|
1,427
|
24
|
%
|
5,550
|
5,310
|
5
|
%
|
||||||||||||||||
Other
|
185
|
102
|
81
|
%
|
363
|
133
|
173
|
%
|
||||||||||||||||
Total
|
$
|
3,123
|
$
|
2,708
|
15
|
%
|
$
|
9,436
|
$
|
9,283
|
2
|
%
|
||||||||||||
Earnings (loss) before income taxes
|
$
|
250
|
$
|
(120
|
)
|
308
|
%
|
$
|
811
|
$
|
232
|
250
|
%
|
Three months ended September 30
(in thousands of dollars) |
Nine months ended September 30
(in thousands of dollars) |
|||||||||||||||||||||||
2015
|
2014
|
% Increase (Decrease)
|
2015
|
2014
|
% Increase (Decrease)
|
|||||||||||||||||||
Revenues from external customers
|
||||||||||||||||||||||||
Income from loan originations
|
$
|
38,784
|
$
|
31,060
|
25
|
%
|
$
|
115,374
|
$
|
81,517
|
42
|
%
|
||||||||||||
Secondary gains from investors
|
10,440
|
6,405
|
63
|
%
|
25,164
|
15,554
|
62
|
%
|
||||||||||||||||
Total
|
$
|
49,224
|
$
|
37,465
|
31
|
%
|
$
|
140,538
|
$
|
97,071
|
45
|
%
|
||||||||||||
Earnings before income taxes
|
$
|
3,888
|
$
|
1,509
|
158
|
%
|
$
|
9,038
|
$
|
2,664
|
239
|
%
|
(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 November 13, 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: November 13, 2015
|
/s/ Scott M. Quist
|
|
Scott M. Quist
|
||
Chairman of the Board, President and Chief Executive Officer
|
||
(Principal Executive Officer)
|
||
Dated: November 13, 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 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
|
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: November 13, 2015
|
/s/ Scott M. Quist
|
|
Scott M. Quist
|
||
Chairman of the Board, President and Chief Executive Officer
|
||
(Principal Executive Officer)
|
Dated: November 13, 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: November 13, 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: November 13, 2015
|
/s/ Garrett S. Sill
|
|
Garrett S. Sill
|
||
Chief Financial Officer and Treasurer
|
||
(Principal Financial Officer and Principal Accounting Officer)
|