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SECURITY NATIONAL FINANCIAL CORP

SECURITY NATIONAL FINANCIAL CORPSNFCAEarnings & Financial Report

Nasdaq · Financials · Finance Services

CNO Financial Group, Inc., formerly Conseco, Inc., is an American financial services holding company based in Carmel, Indiana. Its insurance subsidiaries provide life insurance, annuity and supplemental health insurance products to more than four million customers in the United States. These products are distributed through independent agents, career agents and direct to customers through television advertising and direct mail.

What changed in SECURITY NATIONAL FINANCIAL CORP's 10-K — 2022 vs 2023

Top changes in SECURITY NATIONAL FINANCIAL CORP's 2023 10-K

198 paragraphs added · 206 removed · 163 edited across 4 sections

Item 1. Business

Business — how the company describes what it does

42 edited+2 added−9 removed39 unchanged
These regulations, among other things, specify minimum capital requirements and; procedures for loan origination and underwriting, licensing of brokers and loan officers and, quality review audits and specify the fees that can be charged to borrowers.
These regulations, among other things, specify minimum capital requirements; procedures for loan origination and underwriting, licensing of brokers and loan officers and quality review audits and specify the fees that can be charged to borrowers.
(“Southern Security”) and Trans-Western Life Insurance Company (“Trans-Western”), do not actively write policies, but service and maintain policies that were purchased prior to their acquisition by Security National Life. A funeral plan is a small face value life insurance policy that generally has face coverage of up to $30,000.
(“Southern Security”) and Trans-Western Life Insurance Company (“Trans-Western”), do not actively write policies, but service and maintain policies that were purchased prior to their acquisition by Security National Life. 3 A funeral plan is a small face value life insurance policy that generally has face coverage of up to $30,000.
The Company plans to initiate future phases of the Center53 Development for additional Class A office space in the central valley of Salt Lake City. 8 Regulation The Company’s insurance subsidiaries are subject to comprehensive regulation in the jurisdictions in which they do business under statutes and regulations administered by state insurance commissioners.
The Company plans to initiate future phases of the Center53 Development for additional Class A office space in the central valley of Salt Lake City. Regulation The Company’s insurance subsidiaries are subject to comprehensive regulation in the jurisdictions in which they do business under statutes and regulations administered by state insurance commissioners.
An immediate annuity is a contract in which the individual remits a sum of money to the Company in return for the Company’s obligation to pay a series of payments on a periodic basis over a designated period of time, such as an individual’s life, or for such other period as may be designated.
An immediate annuity is a contract in which the individual remits a sum of money to the Company in return for the Company’s obligation to pay a series of payments on a periodic basis over a designated period, such as an individual’s life, or for such other period as may be designated.
The Company plans to continue its development endeavors as based upon its assessment of the market demand. Center53 Development Center53 Development is an office development project comprising nearly 20 acres of land that is currently owned by the Company in the central valley of Salt Lake City.
The Company plans to continue its development endeavors as based upon its assessment of the market demand. 7 Center53 Development Center53 Development is an office development project comprising nearly 20 acres of land that is currently owned by the Company in the central valley of Salt Lake City.
The Company offers a low-cost comprehensive diver’s accident policy that provides worldwide coverage for medical expense reimbursement in the event of a diving accident. Markets and Distribution The Company currently markets its diver’s accident policies through the internet.
The Company offers a low-cost comprehensive diver’s accident insurance policy that provides worldwide coverage for medical expense reimbursement in the event of a diving accident. Markets and Distribution The Company currently markets its diver’s accident insurance policies through the internet.
The Company’s investor relations website is investor.securitynational.com and the Company promptly makes available on this website, free of charge, the reports that it files or furnishes with the Securities and Exchange Commission.
The Company’s investor relations website is www.investor.securitynational.com and the Company promptly makes available on this website, free of charge, the reports that it files or furnishes with the Securities and Exchange Commission.
At final completion, the multi-year, phased development is expected to create a campus atmosphere and include nearly one million square-feet of office space in five buildings, ranging from four to eleven stories, and will be serviced by three parking structures with about 4,000 stalls.
At final completion, the multi-year, phased development is expected to create a campus atmosphere and include nearly one million square-feet of office space in five buildings, ranging from four to eleven stories, and will be serviced by three parking structures with approximately 4,000 stalls.
The Company was last examined in 2021 (First Guaranty Insurance), 2022 (Security National Life, Southern Security and Trans-Western) and 2021 (Kilpatrick Life). Its most recent final examination reports have been approved by the insurance departments and are public record. The Texas Department of Banking also audits pre-need insurance policies that are issued in the state of Texas.
The Company was last examined in 2021 (First Guaranty Insurance), 2022 (Security National Life, Southern Security and Trans-Western) and 2021 (Kilpatrick Life). Its most recent final examination reports have been approved by the insurance departments and are public records. The Texas Department of Banking also audits pre-need insurance policies that are issued in the state of Texas.
Markets and Distribution The Company is licensed to sell insurance in 40 states. The Company, in marketing its life insurance products, seeks to locate, develop and service specific niche markets. The Company’s funeral plan policies are sold primarily to persons who range in age from 45 to 85 and have low to moderate income.
Markets and Distribution The Company is licensed to sell insurance in 40 states. The Company, in marketing its life insurance products, seeks to locate, develop and service specific niche markets. The Company’s funeral plan policies are sold primarily to people who range in age from 45 to 85 and have low to moderate income.
The subsidiaries are required to keep annual reports on file including financial information concerning the number of spaces sold and, where applicable, funds provided to the Endowment Care Trust Fund. Licenses are issued annually on the basis of such reports. The cemeteries maintain city or county licenses where they conduct business.
The subsidiaries are required to keep annual reports on file including financial information concerning the number of spaces sold and, where applicable, funds provided to the Endowment Care Trust Fund. Licenses are issued annually based on such reports. The cemeteries maintain city or county licenses where they conduct business.
In 2015, the Company broke ground and commenced development on the first phase which included a six-story building of nearly 200,000 square feet and a parking garage with 748 parking stalls. The first phase of the project was completed in July 2017 and is currently 100% leased.
In 2015, the Company broke ground and commenced development on the first phase which included a six-story building of nearly 200,000 square feet and a parking garage with 748 parking stalls. The first phase of the project was completed in July 2017 and is currently 93% leased.
The Company believes that funeral plans represent a marketing niche that has lower competition because most insurance companies do not offer similar coverage. The purpose of the funeral plan policy is to pay the costs and expenses incurred at the time of a person’s death.
The Company believes that funeral plans represent a marketing niche that has less competition because most insurance companies do not offer similar coverage. The purpose of the funeral plan policy is to pay the costs and expenses incurred at the time of a person’s death.
A majority of the Company’s funeral plan premiums come from the states of Arkansas, California, Florida, Georgia, Louisiana, Mississippi, Texas, and Utah. The Company sells its life insurance products through direct agents, brokers, and independent licensed agents who may also sell insurance products of other companies.
Most of the Company’s funeral plan premiums come from the states of Arkansas, California, Florida, Georgia, Louisiana, Mississippi, Texas, and Utah. The Company sells its life insurance products through direct agents, brokers, and independent licensed agents who may also sell insurance products of other companies.
Security National Life was formed in 1965 and has acquired or purchased significant blocks of business which include Capital Investors Life Insurance Company (1994), Civil Service Employees Life Insurance Company (1995), Southern Security Life Insurance Company (1998), Menlo Life Insurance Company (1999), Acadian Life Insurance Company (2002), Paramount Security Life Insurance Company (2004), Memorial Insurance Company of America (2005), Capital Reserve Life Insurance Company (2007), Southern Security Life Insurance Company, Inc.
Security National Life was formed in 1965 and has acquired or purchased significant blocks of business which include Capital Investors Life Insurance Company (1994), Civil Service Employees Life Insurance Company (1995), Southern Security Life Insurance Company (1998), Menlo Life Insurance Company (1999), Acadian Life Insurance Company (2002), Paramount Security Life Insurance Company (2004), Memorial Insurance Company of America (2005 and subsequently sold in 2021 to FOXO Life Insurance Company), Capital Reserve Life Insurance Company (2007), Southern Security Life Insurance Company, Inc.
The mortgage segment originates and underwrites or otherwise purchases residential and commercial loans for new construction, existing homes, and other real estate projects. The mortgage segment operates through 118 retail offices in 26 states, and is an approved mortgage lender in several other states.
The mortgage segment originates and underwrites or otherwise purchases residential and commercial loans for new construction, existing homes, and other real estate projects. The mortgage segment operates through 100 retail offices in 23 states and is an approved mortgage lender in several other states.
In order for the Company to realize a profit on an annuity product, the Company must maintain an interest rate spread between its investment income and the interest rate credited to the annuities. Commissions, issuance expenses, and general and administrative expenses are deducted from this interest rate spread.
For the Company to make a profit on an annuity product, the Company must maintain an interest rate spread between its investment income and the interest rate credited to the annuities. Commissions, issuance expenses, and general and administrative expenses are deducted from this interest rate spread.
Of the full-time employees, 934 were employed by the mortgage segment, 368 by the life insurance segment, and 120 by the cemetery and mortuary segment. The Company requires monthly acknowledgement of its anti-discrimination and anti-harassment policies and communicates to its employees how to report concerns that relate to their employment experience.
Of the full-time employees, 729 were employed by the mortgage segment, 373 by the life insurance segment, and 125 by the cemetery and mortuary segment. The Company requires monthly acknowledgement of its anti-discrimination and anti-harassment policies and communicates to its employees how to report concerns that relate to their employment experience.
The following table summarizes the annuity business for the five years ended December 31, 2022: 2022 2021 2020 2019 (1) 2018 Annuities Policy/Cert Count as of December 31 24,225 24,901 25,476 26,565 22,313 Deposits Collected (in thousands) $ 9,972 $ 9,719 $ 9,637 $ 10,400 $ 9,644 (1) Acquisition of Kilpatrick 5 Accident and Health Products Through its various acquisitions, the Company occasionally acquires small blocks of accident and health policies, which it continues to service.
The following table summarizes the annuity business for the five years ended December 31, 2023: 2023 2022 2021 2020 2019 Annuities Policy/Cert Count as of December 31 24,924 24,225 24,901 25,476 26,565 Deposits Collected (in thousands) $ 10,946 $ 9,972 $ 9,719 $ 9,637 $ 10,400 5 Accident and Health Products Through its various acquisitions, the Company occasionally acquires small blocks of accident and health insurance policies, which it continues to service.
There are approximately 800 legal reserve life insurance companies in business in the United States. These insurance companies differentiate themselves through marketing techniques, product features, pricing, and customer service.
Competition The life insurance industry is highly competitive. There are approximately 800 legal reserve life insurance companies in business in the United States. These insurance companies differentiate themselves through marketing techniques, product features, pricing, and customer service.
The Company’s insurance subsidiaries compete with a large number of insurance companies, many of which have greater financial resources, a longer business history, and more diversified line of insurance products than the Company. In addition, such companies generally have a larger sales force.
The Company’s insurance subsidiaries compete with a large number of insurance companies, many of which have greater financial resources, longer business histories, and more diversified lines of insurance products than the Company. In addition, such companies generally have larger sales forces.
The following table summarizes the accident and health insurance business for the five years ended December 31, 2022: 2022 2021 2020 2019 (1) 2018 Accident and Health Policy/Cert Count as of December 31 11,132 12,494 13,735 15,133 3,763 Premiums Collected (in thousands) $ 543 $ 353 $ 296 $ 110 $ 98 (1) Acquisition of Kilpatrick Reinsurance The primary purpose of reinsurance is to enable an insurance company to issue an insurance policy in an amount larger than the risk the insurance company is willing to assume for itself.
The following table summarizes the accident and health insurance business for the five years ended December 31, 2023: 2023 2022 2021 2020 2019 Accident and Health Policy/Cert Count as of December 31 9,379 11,132 12,494 13,735 15,133 Premiums Collected (in thousands) $ 216 $ 543 $ 353 $ 296 $ 110 Reinsurance The primary purpose of reinsurance is to enable an insurance company to issue an insurance policy in an amount larger than the risk the insurance company is willing to assume for itself.
The Company believes that its products and prices are generally competitive with those in the industry. The mortgage industry is highly competitive with a large number of mortgage companies and banks in the same geographic area in which the Company is operating.
The Company believes that its products and prices are generally competitive with those in the industry. The mortgage industry is highly competitive with many mortgage companies and banks in the same geographic area in which the Company is operating.
Additionally, the Company offers an employee assistance program that provides 24/7 counseling services for employees who may be facing challenges outside of the workplace. Available Information The Company’s internet address is securitynational.com.
The Company provides discounts on certain services provided by the Company to its employees. Additionally, the Company offers an employee assistance program that provides 24/7 counseling services for employees who may be facing challenges outside of the workplace. Available Information The Company’s internet address is www.securitynational.com.
The total amount of life insurance reinsured by other companies as of December 31, 2022, was $346,749,000, which represented approximately 12.1% of the Company’s life insurance in force on that date. See “Management’s Discussion and Analysis of Results of Operations and Financial Condition” and “Notes to Consolidated Financial Statements” for additional disclosure and discussion regarding reinsurance.
The total policy amount of life insurance reinsured by other companies as of December 31, 2023, was $333,211,000, which represented approximately 9.3% of the Company’s total life insurance policy amount in force on that date. See “Management’s Discussion and Analysis of Results of Operations and Financial Condition” and “Notes to Consolidated Financial Statements” for additional disclosure and discussion regarding reinsurance.
Employee Benefits All eligible employees may elect coverage under the Company’s group health (including health savings and flexible spending), retirement, supplemental life and voluntary benefit programs. As of December 31, 2022, 826 employees had elected to participate in the Company’s group health insurance plans.
Employee Benefits All eligible employees may elect coverage under the Company’s group health (including health savings and flexible spending), retirement, supplemental life and voluntary benefit programs. As of December 31, 2023, 756 employees had elected to participate in the Company’s group health insurance plans. The Company has an employee safe harbor retirement plan for each business segment.
In December 2021, the Company ceased operations through EverLEND Mortgage and merged its operations into SecurityNational Mortgage. Security National Life originates and funds commercial real estate loans, residential construction loans, and land development loans for internal investment. Markets and Distribution The Company’s residential mortgage lending services are marketed primarily to real estate brokers, builders and directly with consumers.
Security National Life originates and funds commercial real estate loans, residential construction loans, and land development loans for internal investment. Markets and Distribution The Company’s residential mortgage lending services are marketed primarily to real estate brokers, builders and directly to consumers.
The Company’s subsidiaries Southern Security and Trans-Western are regulated as life insurance companies but do not meet the Internal Revenue Code definition of a life insurance company, so they are taxed as insurance companies other than life insurance companies. 9 Competition The life insurance industry is highly competitive.
The Company’s non-life insurance company subsidiaries are taxed in general under the regular corporate tax provisions. The Company’s subsidiaries Southern Security and Trans-Western are regulated as life insurance companies but do not meet the Internal Revenue Code definition of a life insurance company, so they are taxed as insurance companies other than life insurance companies.
The mortgage industry in general is sensitive to changes in interest rates and the refinancing market is particularly vulnerable to changes in interest rates. Human Capital Management As of December 31, 2022, the Company employed 1,422 full-time and 202 part-time employees.
The mortgage industry in general is sensitive to changes in interest rates and the refinancing market is particularly vulnerable to changes in interest rates. Seasonality The Company’s business is generally not subject to seasonal fluctuations. 9 Human Capital Management As of December 31, 2023, the Company employed 1,227 full-time and 246 part-time employees.
(2008), North America Life Insurance Company (2011, 2015), Trans-Western Life Insurance Company (2012), Mothe Life Insurance Company (2012), DLE Life Insurance Company (2012), American Republic Insurance Company (2015), First Guaranty Insurance Company (2016), and Kilpatrick Life Insurance Company (2019). In August 2021, the Company sold Memorial Insurance Company of America.
(2008), North America Life Insurance Company (2011, 2015), Trans-Western Life Insurance Company (2012), Mothe Life Insurance Company (2012), DLE Life Insurance Company (2012), American Republic Insurance Company (2015), First Guaranty Insurance Company (2016), Kilpatrick Life Insurance Company (2019), and merger with FOXO Life Insurance Company (2023).
The Company’s life insurance business includes funeral plans and interest-sensitive life insurance, as well as other traditional life, accident, and health insurance products. The Company places specific marketing emphasis on funeral plans through pre-need planning. The Company’s insurance subsidiaries, Southern Security Life Insurance Company, Inc.
The Company places specific marketing emphasis on funeral plans through pre-need planning. The Company’s insurance subsidiaries, Southern Security Life Insurance Company, Inc.
Each year, the Company is required to have an audit completed for each mortgage subsidiary by an independent registered public accounting firm to verify compliance with the relevant regulations. In addition to the government regulations, the Company must meet loan requirements, and underwriting guidelines of various investors who purchase the loans.
Each year, the Company is required to have an audit completed for each mortgage subsidiary by an independent registered public accounting firm to verify compliance with the relevant regulations.
In the Utah, California and New Mexico markets where the Company competes, there are a number of cemeteries and mortuaries which have longer business histories, more established positions in the community, and stronger financial positions than the Company.
The Company believes that its policies and rates for the markets it serves are generally competitive. The cemetery and mortuary industry is highly competitive. In the Utah, California, and New Mexico markets where the Company competes, there are several cemeteries and mortuaries which have longer business histories, more established positions in the community, and stronger financial positions than the Company.
The following table summarizes the life insurance business for the five years ended December 31, 2022: 2022 2021 2020 2019 (1) 2018 Life Insurance Policy/Cert Count as of December 31 646,296 653,450 659,237 669,064 531,831 Insurance in force as of December 31 (in thousands) $ 2,865,957 $ 2,863,759 $ 2,890,791 $ 2,877,402 $ 1,838,488 Premiums Collected (in thousands) $ 103,304 $ 99,006 $ 92,058 $ 78,253 $ 74,965 (1) Acquisition of Kilpatrick 4 Underwriting The factors considered in evaluating an application for ordinary life insurance coverage can include the applicant’s age, occupation, general health, and medical history.
The following table summarizes the life insurance business for the five years ended December 31, 2023: 2023 2022 2021 2020 2019 Life Insurance Policy/Cert Count as of December 31 714,953 646,296 653,450 659,237 669,064 Insurance in force as of December 31 (in thousands) $ 3,552,554 $ 3,446,836 (1) $ 3,415,368 (1) $ 3,379,921 (1) $ 3,303,061 (1) Premiums Collected (in thousands) $ 113,584 $ 103,304 $ 99,006 $ 92,058 $ 78,253 (1) Prior years have been adjusted to include accidental death benefit insurance in force that was inadvertently excluded. 4 Underwriting The factors considered in evaluating an application for ordinary life insurance coverage can include the applicant’s age, occupation, general health condition, and medical history.
The cost to acquire existing for-sale assets currently exceeds the replacement costs, thus creating the opportunity for development and redevelopment of the land that the Company currently owns. The Company has developed, or is in the process of developing, assets that have an initial development cost exceeding $100,000,000, primarily relating to the Center53 Development.
The Company has developed, or is in the process of developing, assets that have an initial development cost exceeding $100,000,000, primarily relating to the Center53 Development and multiple single family residential development projects.
The Company has a strong retail origination presence in the Utah, Florida, Texas, Nevada and Arizona markets and many other states across the country.
The Company has a strong retail origination presence in the Utah, Florida, Texas, Nevada and Arizona markets and many other states across the country. See “Management’s Discussion and Analysis of Results of Operations and Financial Condition” and “Notes to Consolidated Financial Statements” for additional disclosure and discussion regarding mortgage loans.
The Company has an employee safe harbor retirement plan that qualifies under section 401(k) of the Internal Revenue Code and contributes a matching contribution based on the employee’s contribution and years of service. The Company provides other time off benefits such as paid sick and paid vacation time. The Company provides discounts on pre-need and death benefits to tenured employees.
The retirement plans qualify under section 401(k) of the Internal Revenue Code and, if approved by the board of directors, the Company makes a matching contribution in Company stock based on the employee’s contribution amount. The Company provides other time off benefits such as paid sick and paid vacation time.
(2019), Rivera Funerals, Cremations and Memorial Gardens (2021), and Holbrook Mortuary (2021). In 1993, the Company formed SecurityNational Mortgage Company (“SecurityNational Mortgage”) to originate and refinance residential mortgage loans. In 2012, the Company formed Green Street Mortgage Services, Inc. (now known as EverLEND Mortgage Company) (“EverLEND Mortgage”) also to originate and refinance residential mortgage loans.
(2019), Rivera Funerals, Cremations and Memorial Gardens (2021), and Holbrook Mortuary (2021). In 1993, the Company formed SecurityNational Mortgage Company (“SecurityNational Mortgage”) to originate and refinance residential mortgage loans. See Note 15 of the Notes to Consolidated Financial Statements for additional information regarding the business segments of the Company.
Life insurance company taxable income is gross income less general business deductions and reserves for future policyholder benefits (with modifications). Under The Tax Cuts and Jobs Act, December 31, 2017 policyholder surplus account balances result in taxable income over a period of eight years.
Under The Tax Cuts and Jobs Act (the “Tax Act”), December 31, 2017 policyholder surplus account balances result in taxable income over a period of eight years. Security National Life, First Guaranty and Kilpatrick calculate their life insurance taxable income after establishing a provision representing a portion of the costs of acquisition of such life insurance business.
Security National Life, First Guaranty and Kilpatrick calculate their life insurance taxable income after establishing a provision representing a portion of the costs of acquisition of such life insurance business. The effect of the provision is that a certain percentage of the Company’s premium income is characterized as deferred expenses and recognized over a five or ten-year period.
The effect of the provision is that a certain percentage of the Company’s premium income is characterized as deferred expenses and recognized over a five or ten-year period. The Tax Act changed this recognition period for amounts deferred after December 31, 2017 to a five or fifteen-year period.
See Note 15 of the Notes to Consolidated Financial Statements for additional information regarding business segments of the Company. 3 Life Insurance Products The Company, through Security National Life, First Guaranty Insurance Company (“First Guaranty”), and Kilpatrick Life Insurance Company (“Kilpatrick”), issues and distributes selected lines of life insurance and annuities.
Life Insurance Products The Company, through Security National Life, First Guaranty Insurance Company (“First Guaranty”), and Kilpatrick Life Insurance Company (“Kilpatrick”), issues and distributes selected lines of life insurance and annuities. The Company’s life insurance business includes funeral plans and interest-sensitive life insurance, as well as other traditional life, accident, and health insurance products.
EverLEND Mortgage is not required to have an audit for 2021 since it ceased operations in December 2021. Income Taxes The Company’s insurance subsidiaries, Security National Life, First Guaranty and Kilpatrick, are taxed under the Life Insurance Company Tax Act of 1984. Under the act, life insurance companies are taxed at standard corporate rates on life insurance company taxable income.
In addition to the government regulations, the Company must meet loan requirements, and underwriting guidelines of various investors who purchase the loans. 8 Income Taxes The Company’s insurance subsidiaries, Security National Life, First Guaranty and Kilpatrick are taxed under the Life Insurance Company Tax Act of 1984.
Removed
In December 2021, the Company ceased operations in EverLEND Mortgage and merged its operations into SecurityNational Mortgage.
Added
Recent Acquisitions and Other Business Activities Real Estate Development The Company is capitalizing on the opportunity to develop commercial and residential assets on its existing and recently acquired properties. The cost to acquire existing for-sale assets currently exceeds the replacement costs, thus creating the opportunity for development and redevelopment of the land that the Company currently owns.
Removed
See “Management’s Discussion and Analysis of Results of Operations and Financial Condition” and “Notes to Consolidated Financial Statements” for additional disclosure and discussion regarding mortgage loans. 7 Recent Acquisitions and Other Business Activities Acquisitions Acquisition of Rivera Funerals, Cremations and Memorial Gardens On December 21, 2021, the Company, through Memorial Estates Inc., completed a business combination transaction with Rivera Funerals, Cremations and Memorial Gardens.
Added
Under the act, life insurance companies are taxed at standard corporate rates on life insurance company taxable income. Life insurance company taxable income is gross income less general business deductions and reserves for future policyholder benefits (with modifications).
Removed
The mortuaries and cemetery are located in New Mexico.
Removed
Under the terms of the transaction, as set forth in the Asset Purchase Agreement, dated December 21, 2021, Memorial Estates Inc. paid a net purchase price of $10,693,395 for the business and assets of Rivera Funerals, Cremations and Memorial Gardens, subject to holdback amounts held by Memorial Estates, Inc. in the total amount of $1,120,000.
Removed
Pursuant to the Asset Purchase Agreement, Memorial Estates, Inc. used $70,000 of the holdback amount to pay trade accounts payable of Rivera Funerals, Cremations and Memorial Gardens to third parties that remained unpaid at the time of purchase.
Removed
The remaining $1,050,000 holdback amount is to be released and paid by Memorial Estates Inc. in annual payments of up to $105,000 each, beginning in January 2023. Acquisition of Holbrook Mortuary On December 28, 2021, the Company, through its wholly-owned subsidiary, Memorial Mortuary Inc., completed a business combination transaction with Holbrook Mortuary located in Salt Lake City, Utah.
Removed
Under the terms of the transaction, as set forth in the Asset Purchase Agreement, dated December 28, 2021, Memorial Mortuary Inc. paid a net purchase price of $3,051,747 for the business and assets of Holbrook Mortuary. Real Estate Development The Company is capitalizing on the opportunity to develop commercial and residential assets on its existing properties.
Removed
The Tax Act changed this recognition period for amounts deferred after December 31, 2017 to a five or fifteen-year period. The Company’s non-life insurance company subsidiaries are taxed in general under the regular corporate tax provisions.
Removed
The Company believes that its policies and rates for the markets it serves are generally competitive. The cemetery and mortuary industry is also highly competitive.

Item 2. Properties

Properties — owned and leased real estate

20 edited+15 added−7 removed1 unchanged
Kapolei HI Mortgage Sales Leased 737 $ 1,759 / mo 12/31/2025 32 Kinoole St. Suite 101, Hilo HI Hilo HI Mortgage Sales Leased 730 $ 1,795 / mo 5/31/2023 1885 Main Street #108 Wailuku HI Mortgage Sales Leased 1,092 $ 1,602 / mo 5/14/2023 677 Ala Moana Blvd.
Kapolei HI Mortgage Sales Leased 737 $ 1,813 / mo 12/31/2025 32 Kinoole St. Suite 101, Hilo HI Hilo HI Mortgage Sales Leased 730 $ 2,373 / mo 5/31/2024 1885 Main Street #108 Wailuku HI Mortgage Sales Leased 1,092 $ 1,602 / mo 5/14/2024 677 Ala Moana Blvd.
Suite 609 Honolulu HI Mortgage Sales Leased 716 $ 2,076 / mo 1/31/2024 970 No Kalaheo Ave, Kailua, Suite A307, HI 96734 Kailua HI Mortgage Sales Leased 510 $ 1,173 / mo 5/31/2023 70 Kanoa Street Suite #140 Wailuku HI Mortgage Sales Leased UNK $ 300 / mo month to month 315 Cece Way Mccall ID Mortgage Sales Leased 100 $ - / mo month to month 4622 Gap Creek Avenue Caldwell ID Mortgage Sales Leased 100 $ - / mo month to month 802 West Bartlett Road Bartlett IL Mortgage Sales Leased 2300 $ 6,000 / mo 12/31/2023 568 Greenluster Dr.
Suite 609 Honolulu HI Mortgage Sales Leased 716 $ 2,141 / mo 1/31/2024 970 No Kalaheo Ave, Kailua, Suite A307, HI 96734 Kailua HI Mortgage Sales Leased 510 $ 1,245 / mo 5/31/2024 70 Kanoa Street Suite #140 Wailuku HI Mortgage Sales Sub-Leased Unknown $ 300 / mo month to month 315 Cece Way Mccall ID Mortgage Sales Leased 100 $ - / mo month to month 802 West Bartlett Road Bartlett IL Mortgage Sales Leased 2,300 $ 6,000 / mo 12/31/2024 568 Greenluster Dr.
Lakeview Mortuary (1) 1640 East Lakeview Dr., Bountiful, Utah 1973 0 1 5,500 Deseret Memorial Inc. Lakehills Mortuary (1) 10055 South State St., Sandy, Utah 1991 2 1 18,000 Cottonwood Mortuary, Inc.
Mountain View Mortuary (1) 3115 East 7800 South, Salt Lake City, Utah 1973 2 1 16,000 Memorial Estates, Inc. Lakeview Mortuary (1) 1640 East Lakeview Dr., Bountiful, Utah 1973 0 1 5,500 Deseret Memorial Inc. Lakehills Mortuary (1) 10055 South State St., Sandy, Utah 1991 2 1 18,000 Cottonwood Mortuary, Inc.
Lake Hills Cemetery 10055 South State Street Sandy, Utah 1991 9 28 6 22 Holladay Memorial Park, Inc. Holladay Memorial Park (3) 4900 South Memory Lane Holladay, Utah 1991 12 14 7 7 California Memorial Estates, Inc.
Redwood Cemetery 6500 South Redwood Road West Jordan, Utah 1973 40 71 35 36 Deseret Memorial Inc. Lake Hills Cemetery 10055 South State Street Sandy, Utah 1991 9 28 6 22 Holladay Memorial Park, Inc. Holladay Memorial Park 4900 South Memory Lane Holladay, Utah 1991 12 14 8 6 California Memorial Estates, Inc.
Stansbury Park UT Mortgage Sales Leased 1,950 $ 3,374 / mo 10/31/2024 833 N. 900 W. Orem UT Mortgage Sales Leased 2,391 $ 3,198 / mo 1/31/2023 1350 E. 300 S. 3rd Floor Lehi UT Mortgage Sales Leased 15,446 $ 37,276 / mo 12/22/2026 2455 E.
Stansbury Park UT Mortgage Sales Leased 1,950 $ 3,475 / mo 10/31/2024 1350 E. 300 S. 3rd Floor Lehi UT Mortgage Sales Leased 15,446 $ 38,396 / mo 12/22/2026 2455 E.
Covington LA Mortgage Sales Leased 150 $ 750 / mo month to month 81 Boulder Drive, Elizabethtown KY Mortgage Sales Leased 100 $ - / mo month to month 8684 Veterans Hwy, Ste 101 Millersville MD Mortgage Sales Leased 4,018 $ 6,725 / mo 7/31/2026 4987 Fall Creek Rd.
Covington LA Mortgage Sales Leased 150 $ 750 / mo month to month 81 Boulder Drive, Elizabethtown KY Mortgage Sales Leased 100 $ - / mo month to month 8684 Veterans Hwy, Ste 101 Millersville MD Mortgage Sales Leased 4,018 $ 6,927 / mo 7/31/2026 860 Blue Gentian Road Suite 205 Eagan NM Mortgage Sales Leased 100 $ 383 / mo month to month 12 Item 2.
Suite 1 Branson MO Mortgage Sales Leased 700 $ 1,000 / mo month to month 4700 Homewood Ct #260 Raleigh NC Mortgage Sales Leased 2,339 $ 5,353 / mo 2/28/2025 2015 Ayrsley Town Blvd, Suite 202-#256 & 258, Charlotte NC Mortgage Sales Leased UNK $ 2,003 / mo month to month 3115 Boone Trail Fayetteville NC Mortgage Sales Leased 1,000 $ 3,000 / mo month to month 2602 Camino Plata Loop NE Rio Rancho NM Mortgage Sales Leased 100 $ - / mo month to month 1980 Festival Plaza Dr., Suite 850 Las Vegas NV Mortgage Sales Leased 12,866 $ 45,031 / mo 3/31/2027 840 Pinnacle Ct., Suite 3 Mesquite NV Mortgage Sales Leased 900 $ 720 / mo 3/12/2022 2635 St.
Suite 1 Branson MO Mortgage Sales Leased 700 $ 1,000 / mo month to month 4700 Homewood Ct #260 Raleigh NC Mortgage Sales Leased 2,339 $ 5,353 / mo 2/28/2025 110 North Center Street, Suite 203 Hickory NC Mortgage Sales Leased 100 $ 680 / mo 5/14/2024 2015 Ayrsley Town Blvd, Suite 247 Charlotte NC Mortgage Sales Leased 100 $ 1,644 / mo month to month 1980 Festival Plaza Dr., Suite 850 Las Vegas NV Mortgage Sales Leased 12,866 $ 46,446 / mo 3/31/2027 840 Pinnacle Ct., Suite 3 Mesquite NV Mortgage Sales Leased 900 $ 720 / mo 3/12/2022 2635 St.
George 157 East Riverside Dr., No. 3A, St. George, Utah 2016 1 1 2,360 Memorial Estates, Inc. Redwood Mortuary (1) 6500 South Redwood Rd., West Jordan, Utah 1973 2 1 10,000 Memorial Estates, Inc. Mountain View Mortuary (1) 3115 East 7800 South, Salt Lake City, Utah 1973 2 1 16,000 Memorial Estates, Inc.
Memorial Mortuary 5850 South 900 East, Murray, Utah 1973 3 1 20,000 Affordable Funerals and Cremations, St. George 157 East Riverside Dr., No. 3A, St. George, Utah 2016 1 1 2,360 Memorial Estates, Inc. Redwood Mortuary (1) 6500 South Redwood Rd., West Jordan, Utah 1973 2 1 10,000 Memorial Estates, Inc.
Properties (Continued) Street City State Function Owned / Leased Approximate Square Footage Lease Amount Expiration 497 S. Main Ephraim UT Mortgage Sales Leased 1,884 $ 1,600 / mo 4/30/2025 11240 S. River Heights Dr. South Jordan UT Mortgage Sales Leased 3,403 $ 8,212 / mo 11/30/2024 500 East Village Blvd.
Sego Lily Dr., Suite 126 Sandy UT Mortgage Sales Leased 2,794 $ 6,933 / mo 1/31/2027 497 S. Main Ephraim UT Mortgage Sales Leased 1,884 $ 1,600 / mo 4/30/2025 11240 S. River Heights Dr. South Jordan UT Mortgage Sales Leased 3,403 $ 8,458 / mo 11/30/2024 500 East Village Blvd.
Properties (Continued) The following table summarizes the location, square footage and the number of viewing rooms and chapels of the twelve Company owned mortuaries: Name of Mortuary Location Date Acquired Viewing Room(s) Chapel(s) Square Footage Memorial Mortuary, Inc. Memorial Mortuary 5850 South 900 East, Murray, Utah 1973 3 1 20,000 Affordable Funerals and Cremations, St.
(3) Includes five main columbariums that can hold approximately 6,000 inurnments. 14 Item 2. Properties (Continued) The following table summarizes the location, square footage and the number of viewing rooms and chapels of the twelve Company owned mortuaries: Date Viewing Square Name of Mortuary Location Acquired Room(s) Chapel(s) Footage Memorial Mortuary, Inc.
Singing Hills Memorial Park (4) 2800 Dehesa Road El Cajon, California 1995 8 97 6 91 SNR-SF Cemetery LLC Santa Fe Memorial Gardens (5) 417 Rodeo Rd Santa Fe, New Mexico 2021 5 5 4 1 (1) The acreage represents estimates of acres that are based upon survey reports, title reports, appraisal reports, or the Company’s inspection of the cemeteries.
Singing Hills Memorial Park 2800 Dehesa Road El Cajon, California 1995 8 97 6 91 (2) SNR-SF Cemetery LLC Santa Fe Memorial Gardens 417 Rodeo Rd Santa Fe, New Mexico 2021 5 (3) 5 4 1 (1) Includes both reserved and occupied spaces. (2) Includes an open easement with a total acreage of approximately 62 acres.
As leases expire, the Company plans to either renew or find comparable leases or acquire additional office space. 13 Item 2.
The Company plans to enter into additional leases or modify existing leases based on its assessments of market demand. Those leases are expected to be month to month where possible. As leases expire, the Company plans to either renew or find comparable leases or acquire additional office space. 13 Item 2.
Lakeview Cemetery 1640 East Lakeview Drive Bountiful, Utah 1973 9 39 8 31 Memorial Estates, Inc. Mountain View Cemetery 3115 East 7800 South Salt Lake City, Utah 1973 26 54 20 34 Memorial Estates, Inc. Redwood Cemetery (3) 6500 South Redwood Road West Jordan, Utah 1973 28 71 35 36 Deseret Memorial Inc.
Net Saleable Acreage Name of Cemetery Location Date Acquired Developed Acreage Total Acreage Acres Sold as Cemetery Spaces (1) Total Available Acreage Memorial Estates, Inc. Lakeview Cemetery 1640 East Lakeview Drive Bountiful, Utah 1973 9 39 8 31 Memorial Estates, Inc. Mountain View Cemetery 3115 East 7800 South Salt Lake City, Utah 1973 26 54 20 34 Memorial Estates, Inc.
Johnson City TN Mortgage Sales Sub-Leased 1,521 $ 800 / mo month to month 347 Main St., Suite 200 Franklin TN Mortgage Sales Leased 2,444 $ 6,050 / mo 8/31/2025 820 N Church Street, Livingston TN Mortgage Sales Leased 1,050 $ 700 / mo month to month 3027 Marina Bay Dr., Suite 200 League City TX Mortgage Sales Leased 1,225 $ 2,450 / mo 4/30/2023 11550 Fuqua, Suite 200 Houston TX Mortgage Sales Leased 1,865 $ 3,264 / mo 4/30/2024 1848 Norwood Plaza, Suite 213 Hurst TX Mortgage Sales Sub-Leased 1,596 $ 1,031 / mo month to month 17347 Village Green Dr., Suite 102 Houston TX Mortgage Sales Sub-Leased 3,300 $ 8,970 / mo 12/1/2024 9737 Great Hills Trail, Suites 150, 200, 220 Austin TX Mortgage Sales Leased 19,891 $ 40,696 / mo month to month 1213 East Alton Gloor Blvd., Suite H Brownsville TX Mortgage Sales Leased 2,000 $ 2,310 / mo 2/28/2024 5020 Collinwood Ave., Suite 100 Fort Worth TX Mortgage Sales Leased 2,687 $ 5,400 / mo 1/31/2025 2408 Jacaman Road, Suite F Laredo TX Mortgage Sales Leased UNK $ 945 / mo 6/1/2023 1900 Country Club Dr., Suite 150 Mansfield TX Mortgage Sales Leased 175 $ 325 / mo month to month 3220 Gus Thomasson Rd.
New Street Kingsport TN Mortgage Sales Leased 100 $ 650 / mo month to month 11550 Fuqua, Suite 200 Houston TX Mortgage Sales Leased 1,865 $ 3,341 / mo 4/30/2024 17347 Village Green Dr., Suite 102 Houston TX Mortgage Sales Sub-Leased 3,300 $ 5,995 / mo 12/1/2024 9737 Great Hills Trail, Suites 150, 200, 220 Austin TX Mortgage Sales Leased 19,891 $ 40,196 / mo month to month 1213 East Alton Gloor Blvd., Suite H Brownsville TX Mortgage Sales Leased 2,000 $ 2,310 / mo 2/28/2024 5020 Collinwood Ave., Suite 100 Fort Worth TX Mortgage Sales Leased 2,687 $ 5,500 / mo 1/31/2025 722 Kiowa Dr.
Properties (Continued) The following table summarizes the location and acreage of the seven Company owned cemeteries, each of which includes one or more mausoleums: Net Saleable Acreage Name of Cemetery Location Date Acquired Developed Acreage (1) Total Acreage (1) Acres Sold as Cemetery Spaces (2) Total Available Acreage (1) Memorial Estates, Inc.
Properties (Continued) The following table summarizes the location and acreage of the seven Company owned cemeteries, each of which includes one or more mausoleums. The acreage represents estimates of acres that are based upon survey reports, title reports, appraisal reports, or the Company’s inspection of the cemeteries. The Company estimates that there are approximately 1,200 spaces per developed acre.
Rose Pkwy, Suites D 100, 110, 120 Hendeson NV Mortgage Sales Leased 5,788 $ 12,281 / mo 9/30/2025 8720 Orion Place, Suite 160 Colombus OH Mortgage Sales Leased 1,973 $ 1,809 / mo 6/30/2023 3311 NE MLK Jr Blvd., Suite 203 Portland OR Mortgage Sales Leased 1,400 $ 875 / mo month to month 10365 SE Sunnyside Rd., Suite 310 Clackamus OR Mortgage Sales Leased 1,288 $ 2,815 / mo 11/30/2024 11104 SE Stark St., Suite S Portland OR Mortgage Sales Sub-Leased 506 $ 600 / mo month to month 11592 SW Roundup Place Terrebonne OR Mortgage Sales Leased 100 $ - / mo month to month 110 Awendaw Way, Greenville SC Mortgage Sales Leased 50 $ - / mo month to month 6263 Poplar Ave., Suite 900 Memphis TN Mortgage Sales Leased 1,680 $ 2,028 / mo 3/31/2023 144 Alf Taylor Rd.
Rose Pkwy, Suites D 100, 110, 120 Hendeson NV Mortgage Sales Leased 5,788 $ 12,649 / mo 9/30/2025 2250 East Postal Drive, Suite 1 Pahrump NV Mortgage Sales Sub-Leased 1,500 $ 1,743 / mo month to month 2546 Findlater Henderson NV Mortgage Sales Leased 120 $ - / mo month to month 670 Meridian Way, Suite 146 Westerville OH Mortgage Sales Leased 100 $ 599 / mo month to month 10365 SE Sunnyside Rd., Suite 310 Clackamus OR Mortgage Sales Leased 1,288 $ 2,899 / mo 11/30/2024 11592 SW Roundup Place Terrebonne OR Mortgage Sales Leased 100 $ - / mo month to month 709 Pacific Ave Tillamook OR Mortgage Sales Leased 120 $ - / mo month to month 144 Alf Taylor Rd.
SR 198 Salem UT Mortgage Sales Leased 1,000 $ 1,200 / mo month to month 768 S. 1600 W., Suite B Mapleton UT Mortgage Sales Leased 1,500 $ 4,000 / mo month to month 21430 Cedar Dr., Suite 200-202 Sterling VA Mortgage Sales Leased 6,850 $ 15,970 / mo 3/9/2024 15640 NE Fourth Plain Blvd., Suite 220/221 Vancouver WA Mortgage Sales Leased 360 $ 850 / mo month to month 2701 Currant St.
Parleys Way, Suites 120 & 150 Salt Lake City UT Mortgage Sales Leased 5,256 $ 8,962 / mo 7/31/2030 859 W South Jordan Pkwy, Suite 101, South Jordan UT Mortgage Sales Leased 3,376 $ 6,175 / mo 5/30/2025 768 S. 1600 W., Suite B Mapleton UT Mortgage Sales Leased 1,500 $ 4,120 / mo month to month UT ( ) 998 N 1200 W, Suite 104 Orem Orem UT Mortgage Sales Leased 2,162 $ 5,648 / mo month to month 21430 Cedar Dr., Suite 200-202 Sterling VA Mortgage Sales Leased 6,850 $ 16,360 / mo 3/9/2024 15650 NE Fourth Blvd Ste 101 Vancouver WA Mortgage Sales Leased 200 $ 485 / mo 11/30/2024 1508 24th Ave., Suite 23 Kenosha WI Mortgage Sales Leased 250 $ 150 / mo month to month 27903 99th St.
Properties (Continued) Street City State Function Owned / Leased Approximate Square Footage Lease Amount Expiration 900 Cricle 75 Parkway, Ste 175 Atlanta GA Mortgage Sales Leased 3,020 $ 6,156 / mo 6/30/2026 6600 Peachtree Dunwoody Rd, Ste 135 Atlanta GA Mortgage Sales Leased 2,129 $ 4,843 / mo 3/31/2026 102 Mary Alice Park Road Suite 506 Cummings GA Mortgage Sales Leased 1,190 $ 1,813 / mo 12/31/2023 4370 Kukui Grove St., Suite 201 Lihue HI Mortgage Sales Leased 864 $ 1,498 / mo 2/28/2025 1001 Kamokila Blvd.
Military Trail, #104B Palm Beach Gardens FL Mortgage Sales Leased 150 $ 800 / mo month to month 970 Island Grove Drive Deland FL Mortgage Sales Leased 100 $ - / mo month to month 10293 61st Ct N Pinellas Park FL Mortgage Sales Leased 100 $ - / mo month to month 5666 Seminole Blvd, Suite 106 & 111 Seminole FL Mortgage Sales Leased 210 $ 1,170 / mo 7/31/2024 2033 Main Street, Suite 407 Sarasota FL Mortgage Sales Leased 2,410 $ 2,812 / mo 10/31/2024 265 E Marion Ave Punta Gorda FL Mortgage Sales Leased - $ 99 / mo month to month 900 Cricle 75 Parkway, Ste 175 Atlanta GA Mortgage Sales Leased 3,020 $ 6,341 / mo 6/30/2026 6600 Peachtree Dunwoody Rd, Ste 135 Atlanta GA Mortgage Sales Leased 2,129 $ 4,988 / mo 3/31/2026 4370 Kukui Grove St., Suite 201 Lihue HI Mortgage Sales Leased 864 $ 1,542 / mo 2/28/2025 1001 Kamokila Blvd.
Charlestown WV Mortgage Sales Leased 2,430 $ 1,700 / mo 4/14/2023 The Company believes the office facilities it occupies are in good operating condition and adequate for current operations. The Company plans to enter into additional leases or modify existing leases based on its assessments of market demand. Those leases are expected to be month to month where possible.
Trevor WI Mortgage Sales Leased 300 $ 150 / mo month to month (1) These two properties were sold during the first quarter of 2024. (2) This property is currently listed for sale and under contract. The Company believes the office facilities it occupies are in good operating condition and adequate for current operations.
State Street Pleasant Grove UT Mortgage Sales Leased 250 $ 500 / mo month to month 126 W.
Larkspur CO Mortgage Sales Leased 250 $ 50 / mo month to month 7800 E.
Removed
Mesquite TX Mortgage Sales Sub-Leased 130 $ 1,000 / mo month to month 722 Kiowa Dr. West Lake Kiowa TX Mortgage Sales Leased 150 $ 495 / mo month to month 124 N. Main St. Mansfield TX Mortgage Sales Sub-Leased 100 $ 3,000 / mo month to month 4411 W.
Added
Item 2. Properties The tables below set forth the location of the Company’s office facilities and certain other information relating to these properties.
Removed
Illinois, Suite B-4 Midland TX Mortgage Sales Sub-Leased 100 $ 1,700 / mo month to month 23227 Red River Drive Katy TX Mortgage Sales Leased 144 $ 750 / mo month to month 6401 Eldorado Pkwy, Ste 313 Mckinnney TX Mortgage Sales Sub-Leased 345 $ 827 / mo month to month 10000 North Central Expressway, Ste 400 Dallas TX Mortgage Sales Leased 200 $ 749 / mo 7/31/2023 5707 Cold Springs Drive San Antonio TX Mortgage Sales Leased 100 $ - / mo month to month 12258 Queenston Blvd, Suite A Houston TX Mortgage Sales Leased 1,300 $ 4,000 / mo month to month 825 Fairmont Parkway, Suite 100 Pasadena TX Mortgage Sales Leased 3,052 $ 3,000 / mo month to month 4500 1-40 West, Suite B Amarillo TX Mortgage Sales Leased 1,238 $ 1,600 / mo 11/30/2023 11525 S.
Added
Street City State Function Owned / Leased Approximate Square Footage Lease Amount Expiration 433 Ascension Way, Floors 4, 5 and 6 Salt Lake City UT Corporate Headquarters, Insurance Operations, Cemetery and Mortuary Operations, Mortgage Operations and Sales Owned 221,000 N/A N/A 1044 River Oaks Dr. (1) Flowood MS Insurance Operations Owned 5,522 N/A N/A 1818 Marshall St.
Removed
Fry Road #106 Fulshear TX Mortgage Sales Leased UNK $ 800 / mo month to month 30417 Fifth Street Suite B Fulshear TX Mortgage Sales Leased 1,000 $ 1,000 / mo month to month 1526 Katy Gap Road Units 503 & 504 Katy TX Mortgage Sales Leased 2,400 $ 5,390 / mo 2/29/2024 105 Hunters Lane, Suite 106 Friendswood TX Mortgage Sales Leased UNK $ 3,750 / mo 12/31/2023 590 W.
Added
Shreveport LA Insurance Operations Owned 12,274 N/A N/A 812 Sheppard St. Minden LA Insurance Sales Owned 1,560 N/A N/A 909 Foisy Ave. (2) Alexandria LA Insurance Sales Owned 8,059 N/A N/A 1550 N. Third St. (1) Jena LA Insurance Sales Owned 1,737 N/A N/A 1 Sanctuary Blvd.
Removed
Sego Lily Dr., Suite 126 Sandy UT Mortgage Sales Leased 2,794 $ 6,781 / mo 1/31/2027 75 Towne Ridge Parkway, Suite 100 Sandy UT Mortgage Sales Leased 6,867 $ 17,712 / mo 8/31/2023 1133 North Main St., Suite 150 Layton UT Mortgage Sales Sub-Leased 300 $ 1,000 / mo month to month 12 Item 2.
Added
Suite 302A Mandeville LA Insurance Sales Leased 1,335 $ 2,400 / mo 6/30/2024 79 E. Main Street Midway UT Funeral Service Sales Leased 4,476 $ 6,233 / mo 10/31/2025 4387 S. 500 W. Salt Lake City UT Funeral Service Sales Leased 2,168 $ 1,895 / mo 7/31/2025 1627A Central Ave.
Removed
Parleys Way, Suites 120 & 150 Salt Lake City UT Mortgage Sales Leased 5,256 $ 8,743 / mo 7/31/2030 859 W South Jordan Pkwy, Suite 101, South Jordan UT Mortgage Sales Leased 3,376 $ 5,995 / mo 5/30/2025 558 E. Riverside Dr., Suite 204 St. George UT Mortgage Sales Leased 1,685 $ 2,235 / mo 8/31/2023 420 N.
Added
Los Alamos NM Funeral Service Sales Leased 1,400 $ 1,600 / mo 12/30/2024 200 Market Way Rainbow City AL Fast Funding Operations Leased 12,850 $ 10,490 / mo 1/31/2025 5100 N. 99th Ave., Suite 101/103 Phoenix AZ Mortgage Sales Sub-Leased 3,940 $ 3,369 / mo month to month 10609 N.
Removed
Lynden WA Mortgage Sales Leased 1,500 $ 50 / mo month to month 1508 24th Ave., Suite 23 Kenosha WI Mortgage Sales Leased 250 $ 150 / mo month to month 27903 99th St. Trevor WI Mortgage Sales Leased 300 $ 150 / mo month to month 219 W. Washington St.
Added
Hayden Rd., Suite 100 Scottsdale AZ Mortgage Sales Leased 3,585 $ 8,650 / mo month to month 1490 S.
Removed
The Company estimates that there are approximately 1,200 spaces per developed acre. (2) Includes both reserved and occupied spaces. (3) Includes two granite mausoleums. (4) Includes an open easement. (5) Includes five main columbariums that can hold approximately 6,000 inurnments. 14 Item 2.
Added
Price Road, Suite 318 Chandler AZ Mortgage Sales Leased 1,600 $ 3,050 / mo 6/30/2024 5100 N. 99th Ave., Suite 111 Phoenix AZ Mortgage Sales Sub-Leased 720 $ 2,382 / mo month to month 1951 West Camelback Rd, Ste 200 Phoenix AZ Mortgage Sales Leased 2,446 $ 3,771 / mo month to month 2636 Hwy 95 Suite 2 Bullhead City AZ Mortgage Sales Leased 1,000 $ 1,225 / mo month to month 2220 S.
Added
Country Club Drive Suite 101 Mesa AZ Mortgage Sales Leased 3,274 $ 5,339 / mo 2/14/2028 350 West 16th Street #209 Yum AZ Mortgage Sales Leased 1,731 $ 4,284 / mo 6/30/2024 102 North Cortez St.
Added
Prescott AZ Mortgage Sales Leased 100 $ 600 / mo month to month 15169 North Scottsdale Road, #205 - office 3012 & 3013 Scottsdale AZ Mortgage Sales Leased Unknown $ 3,400 / mo month to month 10265 W. Camelback Road, #100 Phoenix AZ Mortgage Sales Leased 1,647 $ 3,817 / mo 2/27/2024 40977 Oak Dr.
Added
Forest Falls CA Mortgage Sales Leased 250 $ - / mo month to month 2934 E. Garvey Ave. South, Suite 250 West Covina CA Mortgage Sales Leased 500 $ 1,100 / mo month to month 7398 Fox Trail Unit B Yucca Valley CA Mortgage Sales Leased 900 $ 550 / mo month to month 155 S.
Added
Highway 101 Suite 7 Solana Beach CA Mortgage Sales Leased 2,000 $ 7,426 / mo 7/31/2026 44441 West 16th Street #101 Lancaster CA Mortgage Sales Leased 2,115 $ 2,057 / mo 1/31/2024 1420 Magnolia Ave Oxnard CA Mortgage Sales Leased 100 $ 6,392 / mo 3/30/2024 625 The City Drive, Suite 450 Orange CA Mortgage Sales Leased 2,485 $ 6,655 / mo 12/31/2024 27 Main St., Suite C-104B Edwards CO Mortgage Sales Leased 680 $ 1,950 / mo month to month 4501 Mohawk Dr.
Added
Union Ave., Suite 550 Denver CO Mortgage Sales Sub-Leased 4,656 $ 11,640 / mo 2/28/2026 5982 s Zeno Ct Aurora CO Mortgage Sales Leased 50 $ - / mo month to month 5475 Tech Center Drive #201-A Colorado Springs CO Mortgage Sales Leased 790 $ 1,218 / mo 9/30/2024 1145 Town Park Ave., Suite 2215 Lake Mary FL Mortgage Sales Leased 5,901 $ 12,294 / mo 2/29/2024 8191 College Parkway, Suite 201 Ft Myers FL Mortgage Sales Leased 4,676 $ 4,505 / mo 8/21/2024 2350 Fruitville Rd Ste, Ste 101 Sarasota FL Mortgage Sales Leased 2,455 $ 5,266 / mo 3/14/2026 921 Club House Blvd, New Smyrna Beach, FL Mortgage Sales Leased 50 $ - / mo month to month 9123 N.
Added
Properties (Continued) Street City State Function Owned / Leased Approximate Square Footage Lease Amount Expiration 4987 Fall Creek Rd.
Added
Johnson City TN Mortgage Sales Sub-Leased 1,521 $ 800 / mo month to month 4646 Poplar Avenue, #317 Memphis TN Mortgage Sales Leased 477 $ 845 / mo 3/31/2024 115 W.
Added
West Lake Kiowa TX Mortgage Sales Leased 150 $ 495 / mo month to month 23227 Red River Drive Katy TX Mortgage Sales Leased 144 $ 750 / mo month to month 5707 Cold Springs Drive San Antonio TX Mortgage Sales Leased 100 $ - / mo month to month 4500 1-40 West, Suite B Amarillo TX Mortgage Sales Leased 1,238 $ 1,700 / mo 12/31/2024 30417 Fifth Street Suite B Fulshear TX Mortgage Sales Leased 1,000 $ 1,273 / mo month to month 4908 North Midkiff Road Midland TX Mortgage Sales Leased 1,550 $ 2,500 / mo month to month 462 Mid Cities Boulevard Hurst TX Mortgage Sales Leased 1,640 $ 2,500 / mo month to month 18525 West Lake Houston Parkway, Suite 222 Humble TX Mortgage Sales Leased 1,390 $ 2,612 / mo 9/30/2025 2600 South Shore Boulevard, Suite 300 League City TX Mortgage Sales Leased 94 $ 785 / mo 4/24/2024 106 Decker Court Suite 310 Irving TX Mortgage Sales Leased 1,664 $ 4,160 / mo 4/24/2024 1600 Lee Travino, Suite A-1 El Paso TX Mortgage Sales Leased 1,535 $ 2,110 / mo month to month 23702 IH-10 West, Suite 105-D San Antonio TX Mortgage Sales Leased 100 $ 470 / mo month to month 1777 NE Loop 410, Suite 600 San Antonio TX Mortgage Sales Leased 100 $ 1,070 / mo month to month 299 South Columbia, Stephenville TX Mortgage Sales Leased 3,417 $ 5,700 / mo month to month 18756 Stone Oak Parkway Ste 200 San Antonio TX Mortgage Sales Leased 100 $ 1,908 / mo month to month 10000 Central Expressway Ste 428 Dallas TX Mortgage Sales Leased 200 $ 1,400 / mo 12/31/2024 602 S Main St Weatherford TX Mortgage Sales Leased 1,250 $ 1,282 / mo 12/31/2024 5757 Flewellen Oaks Ln #104 Fulshear TX Mortgage Sales Leased 100 $ 800 / mo month to month 126 W.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

11 edited+0 added−0 removed5 unchanged
The Company currently anticipates that all of its earnings will be retained for use in the operation and expansion of its business and does not intend to pay any cash dividends on its Class A or Class C common stock in the foreseeable future.
The Company currently anticipates that all its earnings will be retained for use in the operation and expansion of its business and does not intend to pay any cash dividends on its Class A or Class C common stock in the foreseeable future.
Any repurchased shares of Class A common stock are to be held as treasury shares to be used as the Company’s employer matching contribution to the Employee 401(k) Retirement Savings Plan and for shares held in the Deferred Compensation Plan. 17 The graph below compares the cumulative total stockholder return of the Company’s Class A common stock with the cumulative total return on the Standard & Poor’s 500 Stock Index and the Standard & Poor’s Insurance Index for the period from December 31, 2018 through December 31, 2022.
Any repurchased shares of Class A common stock are to be held as treasury shares to be used as the Company’s employer matching contribution to the Employee 401(k) Retirement Savings Plan and for shares held in the Deferred Compensation Plan. 17 The graph below compares the cumulative total stockholder return of the Company’s Class A common stock with the cumulative total return on the Standard & Poor’s 500 Stock Index and the Standard & Poor’s Insurance Index for the period from December 31, 2019 through December 31, 2023.
The Company paid a 5% stock dividend on Class A and Class C common stock each year from 1990 through 2019, a 7.5% stock dividend for year 2020, and a 5.0% stock dividend for the years 2021 and 2022. 16 On December 27, 2022, the Company executed a 10b5-1 agreement with a broker to repurchase the Company’s Class A Common Stock.
The Company paid a 5% stock dividend on Class A and Class C common stock each year from 1990 through 2019, a 7.5% stock dividend for the year 2020, and a 5.0% stock dividend for the years 2021 through 2023. 16 On December 27, 2022, the Company executed a 10b5-1 agreement with a broker to repurchase shares of the Company’s Class A Common Stock.
The graph assumes that the value of the investment in the Company’s Class A common stock and in each of the indexes was $100 at December 31, 2018 and that all dividends were reinvested.
The graph assumes that the value of the investment in the Company’s Class A common stock and in each of the indexes was $100 as of December 31, 2019 and that all dividends were reinvested.
The comparisons in the graph below are based on historical data and are not intended to forecast the possible future performance of the Company’s Class A common stock. 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 SNFC 100 119 183 212 176 S & P 500 100 129 149 190 153 S & P Insurance 100 87 110 137 148 The stock performance graph set forth above is required by the Securities and Exchange Commission and shall not be deemed to be incorporated by reference by any general statement incorporating by reference this Form 10-K into any filing under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates this information by reference, and shall not otherwise be deemed soliciting material or filed under such acts.
The comparisons in the graph below are based on historical data and are not intended to forecast the possible future performance of the Company’s Class A common stock. 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 SNFC 100 153 177 148 191 S & P 500 100 116 148 119 148 S & P Insurance 100 126 158 171 183 The stock performance graph set forth above is required by the Securities and Exchange Commission and shall not be deemed to be incorporated by reference by any general statement incorporating by reference this Form 10-K into any filing under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates this information by reference, and shall not otherwise be deemed soliciting material or filed under such acts.
Item 5. Market for the Registrant’s Common Stock, Related Stockholder Matters, and Issuer Purchases of Equity Securities The Company’s Class A common stock trades on The Nasdaq Global Select Market under the symbol “SNFCA.” As of March 27, 2023, the closing stock price of the Class A common stock was $6.09 per share.
Item 5. Market for the Registrant’s Common Stock, Related Stockholder Matters, and Issuer Purchases of Equity Securities The Company’s Class A common stock trades on The Nasdaq Global Select Market under the symbol “SNFCA.” As of March 26, 2024, the closing stock price of the Class A common stock was $7.62 per share.
As of March 27, 2023, there were 1,801 registered stockholders of record of the Company’s Class A common stock and 44 registered stockholders of record of the Company’s Class C common stock.
As of March 26, 2024, there were 1,747 registered stockholders of record of the Company’s Class A common stock and 42 registered stockholders of record of the Company’s Class C common stock.
Period (a) Total Number of Class A Shares Purchased (b) Average Price Paid per Class A Share (1) (c) Total Number of Class A Shares Purchased as Part of Publicly Announced Plan or Program (d) Maximum Number of Class A Shares that May Yet Be Purchased Under the Plan or Program (2) 10/1/2022-10/31/2022 9,829 $ 6.32 - 433,349 11/1/2022-11/30/2022 10,920 $ 6.54 - 422,429 12/1/2022-12/31/2022 39,222 $ 6.47 - 383,207 Total 59,971 $ 6.45 - 383,207 (1) Includes fees and commissions paid on stock repurchases.
Period (a) Total Number of Class A Shares Purchased (b) Average Price Paid per Class A Share (1) (c) Total Number of Class A Shares Purchased as Part of Publicly Announced Plan or Program (d) Maximum Number of Class A Shares that May Yet Be Purchased Under the Plan or Program (2) 10/1/2023-10/31/2023 - $ - - 318,043 11/1/2023-11/30/2023 - $ - - 318,043 12/1/2023-12/31/2023 - $ - - 318,043 Total - $ - - 318,043 (1) Includes fees and commissions paid on stock repurchases.
Under the terms of the agreement, the broker is permitted to repurchase up to $1,000,000 of the Company’s Class A Common Stock. The agreement is subject to the daily time, price and volume conditions of Rule 10b-18. The initial term of the agreement is for one year and may be amended with written consent.
Under the terms of the agreement, the broker is permitted to repurchase up to 1,000,000 shares of the Company’s Class A Common Stock. The agreement is subject to the daily time, price, and volume conditions of Rule 10b-18. The agreement expired December 31, 2023.
The purchases under the 10b5-1 agreement are subject to the 2020 amended stock repurchase plan. The following table shows the Company’s repurchase activity of its common stock during the three months ended December 31, 2022 under its Stock Repurchase Plan.
The following table shows the Company’s repurchase activity of its common stock during the three-month period ended December 31, 2023 under the 10b5-1 agreement.
The following were the high and low market closing stock prices for the Class A common stock by quarter as reported by NASDAQ since January 1, 2021: Price Range (1) High Low Period (Calendar Year) 2021 First Quarter $ 9.56 $ 7.69 Second Quarter $ 8.69 $ 7.06 Third Quarter $ 8.86 $ 7.68 Fourth Quarter $ 9.17 $ 7.81 2022 First Quarter $ 9.86 $ 8.53 Second Quarter $ 9.87 $ 7.84 Third Quarter $ 8.61 $ 6.23 Fourth Quarter $ 7.57 $ 6.10 2023 First Quarter (through March 27, 2023) $ 7.55 $ 6.00 (1) Stock prices have been adjusted retroactively for the effect of annual stock dividends.
The following were the high and low market closing stock prices for the Class A common stock by quarter as reported by NASDAQ since January 1, 2022: Price Range (1) High Low Period (Calendar Year) 2022 First Quarter $ 9.39 $ 8.13 Second Quarter $ 9.40 $ 7.46 Third Quarter $ 8.20 $ 5.93 Fourth Quarter $ 7.21 $ 5.81 2023 First Quarter $ 7.19 $ 5.71 Second Quarter $ 8.45 $ 6.03 Third Quarter $ 8.83 $ 7.58 Fourth Quarter $ 9.60 $ 6.89 2024 First Quarter (through March 26, 2024) $ 9.04 $ 7.62 (1) Stock prices have been adjusted retroactively for the effect of annual stock dividends.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

90 edited+18 added−27 removed46 unchanged
Any loan that later becomes delinquent is evaluated by the Company at that time and any impairment is adjusted accordingly. Determining fair value . Cost for loans held for sale is equal to the amount paid to the warehouse bank and the amount originally funded by the Company.
Any loan that later becomes delinquent is evaluated by the Company at that time and any impairment is adjusted accordingly. Determining fair value . The cost for loans held for sale is equal to the amount paid to the warehouse bank and the amount originally funded by the Company.
For nonparticipating traditional life products, these costs are amortized over the premium paying period of the related policies in proportion to the ratio of annual premium revenues to total anticipated premium revenues.
For nonparticipating traditional life products, these costs are amortized over the premium paying period of the related policies in proportion to the ratio of annual premium revenues to total anticipated premium revenues.
Once purchase commitments have expired and other alternatives to remedy are exhausted, which could be earlier than the six-month time period, the loans are repurchased and transferred to mortgage loans held for investment at the lower of cost or fair value and the previously recorded sales revenue that was to be received from a third-party investor is written off against the loan loss reserve.
Once purchase commitments have expired and other alternatives to remedy are exhausted, which could be earlier than the six-month period, the loans are repurchased and transferred to mortgage loans held for investment at the lower of cost or fair value and the previously recorded sales revenue that was to be received from a third-party investor is written off against the loan loss reserve.
Revenues and costs for at-need sales are recorded when a valid contract exists, the services are performed, collection is reasonably assured, and there are no significant company obligations remaining. 22 Mortgage Operations Mortgage fee income consists of origination fees, processing fees, interest income and certain other income related to the origination and sale of mortgage loans.
Revenues and costs for at-need sales are recorded when a valid contract exists, the services are performed, collection is reasonably assured, and there are no significant company obligations remaining. Mortgage Operations Mortgage fee income consists of origination fees, processing fees, interest income and certain other income related to the origination and sale of mortgage loans.
The Company will rent the properties until it is deemed desirable to sell them. The mortgage loan loss reserve is an estimate of probable losses at the balance sheet date that the Company will realize in the future on mortgage loans sold to third-party investors.
The Company will rent the properties until it is deemed desirable to sell them. 25 The mortgage loan loss reserve is an estimate of probable losses at the balance sheet date that the Company will realize in the future on mortgage loans sold to third-party investors.
The Company desires to take advantage of the “safe harbor” provisions of the act. This Annual Report on Form 10-K contains forward-looking statements, together with related data and projections, about the Company’s projected financial results and its future plans and strategies.
The Company desires to take advantage of the “safe harbor” provisions of the act. This Annual Report on Form 10-K contains forward-looking statements, together with related data and projections, about the Company’s projected financial results and its plans and strategies.
Department of Housing and Urban Development (HUD), which originate mortgage loans that qualify for government insurance in the event of default by the borrower, in addition to various conventional mortgage loan products. SecurityNational Mortgage originates and refinances mortgage loans on a retail basis.
Department of Housing and Urban Development (HUD), which originates mortgage loans that qualify for government insurance in the event of default by the borrower, in addition to various conventional mortgage loan products. SecurityNational Mortgage originates and refinances mortgage loans on a retail basis.
Mortgage Industry Risks . Developments in the mortgage industry and credit markets can adversely affect the Company’s ability to sell its mortgage loans to investors, which can impact the Company’s financial results by requiring it to assume the risk of holding and servicing any unsold loans.
Developments in the mortgage industry and credit markets can adversely affect the Company’s ability to sell its mortgage loans to investors, which can impact the Company’s financial results by requiring it to assume the risk of holding and servicing any unsold loans.
To the extent that liabilities come due more quickly than assets mature, the Company might have to borrow funds or sell assets prior to maturity and potentially recognize a loss on the sale. 28 Mortality and Morbidity Risks .
To the extent that liabilities come due more quickly than assets mature, the Company might have to borrow funds or sell assets prior to maturity and potentially recognize a loss on the sale. Mortality and Morbidity Risks .
Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview The Company’s operations over the last several years generally reflect three strategies which the Company expects to continue: (i) increased attention to “niche” insurance products, such as the Company’s funeral plan policies and traditional whole life products; (ii) increased emphasis on cemetery and mortuary business; and (iii) capitalizing on the housing market by originating mortgage loans.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview The Company’s operations over the last several years generally reflect three strategies which the Company expects to continue: (i) increased attention to “niche” insurance products, such as the Company’s funeral plan policies and traditional whole life products; (ii) increased emphasis on cemetery and mortuary business; and (iii) capitalizing on an improving housing market by originating mortgage loans.
Critical Accounting Policies and Estimates The following is a brief summary of the Company’s significant accounting policies and a review of the Company’s most critical accounting estimates. See Note 1 of the Notes to Consolidated Financial Statements.
Critical Accounting Policies and Estimates The following is a summary of the Company’s significant accounting policies and a review of the Company’s most critical accounting estimates. See Note 1 of the Notes to Consolidated Financial Statements.
Mortgage loans originated or refinanced by the Company’s mortgage subsidiaries are funded through loan purchase agreements with Security National Life, Kilpatrick Life and unaffiliated financial institutions. SecurityNational Mortgage receives fees from borrowers that are involved in mortgage loan originations and refinancings, and secondary fees earned from third party investors that purchase the mortgage loans.
Mortgage loans originated or refinanced by SecurityNational Mortgage are funded through loan purchase agreements with Security National Life, Kilpatrick Life and unaffiliated financial institutions. SecurityNational Mortgage receives fees from borrowers that are involved in mortgage loan originations and refinancings, and secondary fees earned from third party investors that purchase the mortgage loans.
Material estimates that are particularly susceptible to significant changes in the near term are those used in determining the value of derivative assets and liabilities; those used in determining deferred acquisition costs and the value of business acquired; those used in determining the value of mortgage loans foreclosed to real estate held for investment; those used in determining the liability for future policy benefits and unearned revenue; those used in determining the estimated future costs for pre-need sales; those used in determining the value of mortgage servicing rights; those used in determining allowances for loan losses for mortgage loans held for investment; those used in determining loan loss reserve; and those used in determining deferred tax assets and liabilities.
Material estimates that are particularly susceptible to significant changes in the near term are those used in determining the value of derivative assets and liabilities; those used in determining deferred acquisition costs and the value of business acquired; those used in determining the value of mortgage loans foreclosed to real estate held for investment or sale; those used in determining the liability for future policy benefits and unearned revenue; those used in determining the estimated future costs for pre-need sales; those used in determining the value of mortgage servicing rights; those used in determining the value of loans held for sale; those used in determining allowances for credit losses; those used in determining loan loss reserve; and those used in determining deferred tax assets and liabilities.
Funeral plans are small face value life insurance policies that payout upon a person’s death to cover funeral burial costs. Policyholders generally keep these policies in force and do not surrender them prior to death.
Funeral plans are small face value life insurance policies that payout upon a person’s death to cover funeral burial costs; policyholders generally keep these policies in force until, and do not surrender prior to, death.
The mortgage subsidiaries realize cash flow from fees generated by originating and refinancing mortgage loans and fees on mortgage loans held for sale that are sold to investors into the secondary market. It should be noted that current conditions in the financial markets and economy caused by COVID-19 may affect the realization of these expected cash flows.
The mortgage subsidiaries realize cash flow from fees generated by originating and refinancing mortgage loans and fees on mortgage loans held for sale that are sold to investors into the secondary market. It should be noted that current conditions in the financial markets and economy may affect the realization of these expected cash flows.
The Company attempts to match the duration of invested assets with its policyholder and cemetery and mortuary liabilities. The Company may sell investments other than those held to maturity in the portfolio to help in this timing matching. The Company purchases short-term investments on a temporary basis to meet the expectations of short-term requirements of the Company’s products.
The Company attempts to match the duration of invested assets with its policyholder and cemetery and mortuary liabilities. The Company may sell investments other than those held to maturity in the portfolio to help in this timing matching. The Company purchases short-term investments on a temporary basis to meet the expected short-term requirements of the Company’s insurance products.
However, actual results and needs of the Company may vary materially from forward-looking statements and projections made from time to time by the Company on the basis of management’s then-current expectations.
However, the actual results and needs of the Company may vary materially from forward-looking statements and projections made from time to time by the Company based on management’s then-current expectations.
Such anticipated premium revenues are estimated using the same assumption used for computing liabilities for future policy benefits and are generally “locked in” at the date the policies are issued. Value of Business Acquired Value of business acquired (“VOBA”) is the present value of estimated future profits of the acquired business and is amortized similar to deferred acquisition costs.
Such anticipated premium revenues are estimated using the same assumption used for computing liabilities for future policy benefits and are generally “locked in” at the date the policies are issued. Value of Business Acquired Value of business acquired (“VOBA”) is the present value of estimated future profits of the acquired business and is amortized like deferred acquisition costs.
Fallout rates and other factors from the Company’s recent historical data are used to estimate the quantity and value of mortgage loans that will fund within the terms of the commitments. Deferred Acquisition Costs Amortization of deferred policy acquisition costs (“DAC”) for interest sensitive products is dependent upon estimates of current and future gross profits or margins on this business.
Fallout rates and other factors from the Company’s recent historical data are used to estimate the quantity and value of mortgage loans that will be funded within the terms of the commitments. 23 Deferred Acquisition Costs Amortization of deferred policy acquisition costs (“DAC”) for interest sensitive products is dependent upon estimates of current and future gross profits or margins on this business.
The majority of loans originated are sold to third-party investors. The amounts expected to be sold to investors are shown on the consolidated balance sheets as loans held for sale. Use of Significant Accounting Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures.
The amounts expected to be sold to investors are shown on the consolidated balance sheets as loans held for sale. Use of Significant Accounting Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures.
The Company initially accounts for MSRs at fair value and subsequently accounts for them using the amortization method. MSR amortization is determined by amortizing the MSR balance in proportion to, and over the period of the estimated future net servicing income of the underlying financial assets.
The Company initially accounts for MSRs at fair value and subsequently accounts for them using the amortization method. MSR amortization is determined by amortizing the MSR balance in proportion to, and over the period of the estimated future net servicing income of the underlying financial assets. The Company periodically assesses MSRs accounted for using the amortization method for impairment.
Factors that may cause the Company’s actual results to differ materially from those contemplated or projected, forecast, estimated or budgeted in such forward looking statements include among others, the following possibilities: (i) heightened competition, including the intensification of price competition, the entry of new competitors, and the introduction of new products by new and existing competitors; (ii) adverse state and federal legislation or regulation, including decreases in rates, limitations on premium levels, increases in minimum capital and reserve requirements, benefit mandates and tax treatment of insurance products; (iii) fluctuations in interest rates causing a reduction of investment income or increase in interest expense and in the market value of interest rate sensitive investment; (iv) failure to obtain new customers, retain existing customers or reductions in policies in force by existing customers; (v) higher service, administrative, or general expenses due to the need for additional advertising, marketing, administrative or management information systems expenditures; (vi) loss or retirement of key executives or employees; (vii) increases in medical costs; (viii) changes in the Company’s liquidity due to changes in asset and liability matching; (ix) restrictions on insurance underwriting based on genetic testing and other criteria; (x) adverse changes in the ratings obtained by independent rating agencies; (xi) failure to maintain adequate reinsurance; (xii) possible claims relating to sales practices for insurance products and claim denials; (xiii) adverse trends in mortality and morbidity; (xiv) deterioration of real estate markets; and (xv) lawsuits in the ordinary course of business.
The business in which the Company is engaged involves changing and competitive markets, which may involve a high degree of risk, and there can be no assurance that forward-looking statements and projections will prove accurate. 30 Factors that may cause the Company’s actual results to differ materially from those contemplated or projected, forecast, estimated or budgeted in such forward looking statements include among others, the following possibilities: (i) heightened competition, including the intensification of price competition, the entry of new competitors, and the introduction of new products by new and existing competitors; (ii) adverse state and federal legislation or regulation, including decreases in rates, limitations on premium levels, increases in minimum capital and reserve requirements, benefit mandates and tax treatment of insurance products; (iii) fluctuations in interest rates causing a reduction of investment income or increase in interest expense and in the market value of interest rate sensitive investment; (iv) failure to obtain new customers, retain existing customers or reductions in policies in force by existing customers; (v) higher service, administrative, or general expenses due to the need for additional advertising, marketing, administrative or management information systems expenditures; (vi) loss or retirement of key executives or employees; (vii) increases in medical costs; (viii) changes in the Company’s liquidity due to changes in asset and liability matching; (ix) restrictions on insurance underwriting based on genetic testing and other criteria; (x) adverse changes in the ratings obtained by independent rating agencies; (xi) failure to maintain adequate reinsurance; (xii) possible claims relating to sales practices for insurance products and claim denials; (xiii) adverse trends in mortality and morbidity; (xiv) deterioration of real estate markets; and (xv) lawsuits in the ordinary course of business.
Contractual Obligations In the ordinary course of the Company’s operations, the Company enters into certain contractual obligations. Such obligations include operating leases for office space, agreements with respect to borrowed funds and future policy benefits. See Notes 7, 22, 24 of the Notes to Consolidated Financial Statements for more information about these obligations.
Maturities range between six and eighteen months. Contractual Obligations In the ordinary course of the Company’s operations, the Company enters into certain contractual obligations. Such obligations include operating leases for office space, agreements with respect to borrowed funds and future policy benefits. See Notes 7, 22, 24 of the Notes to Consolidated Financial Statements for more information about these obligations.
The estimated liability for indemnification losses is included in other liabilities and accrued expenses and, as of December 31, 2022 and 2021, the balances were $1,726,000 and $2,447,000, respectively. The Company believes the loan loss reserve represents probable loan losses incurred as of December 31, 2022.
The estimated liability for indemnification losses is included in other liabilities and accrued expenses and, as of December 31, 2023 and 2022, the balances were $547,000 and $1,726,000, respectively. The Company believes the loan loss reserve represents probable loan losses incurred as of December 31, 2023.
There is a risk, however, that future loan losses may exceed the loan loss reserve. As of December 31, 2022, the Company’s mortgage loans held for investment portfolio consisted of mortgage loans in an aggregate principal amount of $2,567,000 with delinquencies exceeding 90 days. Of this amount, loans with an aggregate principal amount of $1,281,000 were in foreclosure proceedings.
There is a risk, however, that future loan losses may exceed the loan loss reserve. As of December 31, 2023, the Company’s mortgage loans held for investment portfolio consisted of mortgage loans in an aggregate principal amount of $6,149,000 with delinquencies exceeding 90 days. Of this amount, loans with an aggregate principal amount of $2,263,000 were in foreclosure proceedings.
Mortgage loans are generally sold with mortgage servicing rights (“MSRs”) released to third-party investors or retained by SecurityNational Mortgage. SecurityNational Mortgage currently retains the MSRs on approximately 7% of its loan origination volume. These mortgage loans are serviced by either SecurityNational Mortgage or an approved third-party sub-servicer.
Mortgage loans are generally sold with mortgage servicing rights (“MSRs”) released to third-party investors or retained by SecurityNational Mortgage. SecurityNational Mortgage currently retains the MSRs on approximately 4% of its loan origination volume. These mortgage loans are serviced by either SecurityNational Mortgage or an approved third-party sub-servicer. On October 31, 2022, the Company sold certain of its MSRs.
The Company has the ability to mitigate adverse experience through sound underwriting, asset and liability duration matching, sound actuarial practices, adjustments to credited interest rates, policyholder dividends and cost of insurance charges.
The Company can mitigate adverse experiences through sound underwriting, asset and liability duration matching, sound actuarial practices, adjustments to credited interest rates, policyholder dividends and cost of insurance charges.
At December 31, 2022 and 2021, the life insurance subsidiaries were in compliance with the regulatory criteria. The Company’s total capitalization of stockholders’ equity, and bank loans and other loans payable was $454,499,000 as of December 31, 2022, as compared to $551,054,000 as of December 31, 2021.
As of December 31, 2023 and 2022, the life insurance subsidiaries were in compliance with the regulatory criteria. The Company’s total capitalization of stockholders’ equity, and bank loans and other loans payable was $418,450,000 as of December 31, 2023, as compared to $454,499,000 as of December 31, 2022.
It may be required, however, to repurchase a loan or pay a fee instead of repurchase under certain events, which include the following: ● Failure to deliver original documents specified by the investor, ● The existence of misrepresentation or fraud in the origination of the loan, ● The loan becomes delinquent due to nonpayment during the first several months after it is sold, ● Early pay-off of a loan, as defined by the agreements, ● Excessive time to settle a loan, ● Investor declines purchase, and ● Discontinued product and expired commitment.
It may be required, however, to repurchase a loan or pay a fee instead of repurchasing under certain events, which include the following: ● Failure to deliver original documents specified by the investor, ● The existence of misrepresentation or fraud in the origination of the loan, ● The loan becomes delinquent due to nonpayment during the first several months after it is sold, ● Early pay-off of a loan, as defined by the agreements, ● Excessive time to settle a loan, ● Investor declines purchase, and ● Discontinued product and expired commitment. 22 Loan purchase commitments generally specify a date 30 to 45 days after delivery upon which the underlying loans should be settled.
The Company advances funds once the work has been completed and an inspection is made. The maximum loan commitment ranges between 50% and 80% of appraised value. The Company receives fees and interest for these loans and the interest rate is generally fixed 5.25% to 8.50% per annum. Maturities generally range between six and eighteen months.
The Company advances funds in accordance with the loan agreements once the work has been completed and an independent inspection is made. The maximum loan commitment ranges between 50% and 80% of appraised value. The Company receives fees and interest for these loans and the interest rate is generally fixed at 5.25% to 8.50% per annum.
The Company’s estimates are based upon historical loss experience and the best estimate of the probable loan loss liabilities. During the twelve months ended December 31, 2022 and 2021 the Company increased its loan loss reserve by $1,079,000 and $2,211,000, respectively, for loan originations, and the charges have been included in mortgage fee income.
The Company’s estimates are based upon historical loss experience and the best estimate of the probable loan loss liabilities. During 2023 and 2022 the Company decreased its loan loss reserve by $1,178,000 and increased its loan loss reserve by $1,079,000, respectively, for loan originations, and the charges have been included in mortgage fee income.
These assumptions are made based upon historical experience, industry standards and a best estimate of future results and, for traditional life products, include a provision for adverse deviation. For traditional life insurance, once established for a particular series of products, these assumptions are generally held constant.
These assumptions are made based upon historical experience, industry standards and a best estimate of future results and, for traditional life products, include a provision for adverse deviation.
Also, the Company may be subject to further regulations in the cemetery and mortuary business. The Company aims to mitigate these risks by offering a wide range of products and by diversifying its operations, thus reducing its exposure to any single product or jurisdiction, and also by employing underwriting practices that identify and minimize the adverse impact of such risks.
The Company aims to mitigate these risks by offering a wide range of products and by diversifying its operations, thus reducing its exposure to any single product or jurisdiction, and also by employing underwriting practices that identify and minimize the adverse impact of such risks. 27 Mortgage Industry Risks .
This change in rates may cause certain interest-sensitive products to become uncompetitive or may cause disintermediation. The Company aims to mitigate this risk by charging fees for non-conformance with certain policy provisions, by offering products that transfer this risk to the purchaser, and by attempting to match the maturity schedule of its assets with the expected payouts of its liabilities.
The Company aims to mitigate this risk by charging fees for non-conformance with certain policy provisions, by offering products that transfer this risk to the purchaser, and by attempting to match the maturity schedule of its assets with the expected payouts of its liabilities.
Market value, while often difficult to determine and may contain significant unobservable inputs, is based on the following guidelines: ● For loans that are committed, the Company uses the commitment price. ● For loans that are non-committed that have an active market, the Company uses the market price. ● For loans that are non-committed where there is no market but there is a similar product, the Company uses the market value for the similar product. ● For loans that are non-committed where no active market exists, the Company determines that the unpaid principal balance best approximates the market value, after considering the fair value of the underlying real estate collateral, estimated future cash flows, and loan interest rate. 23 The appraised value of the real estate underlying the original mortgage loan adds significance to the Company’s determination of fair value because, if the loan becomes delinquent, the Company has sufficient value to collect the unpaid principal balance or the carrying value of the loan, thus minimizing credit risk.
Market value, while often difficult to determine and may contain significant unobservable inputs, is based on the following guidelines: ● For loans that are committed, the Company uses the commitment price. ● For loans that are non-committed that have an active market, the Company uses the market price. ● For loans that are non-committed where there is no market but there is a similar product, the Company uses the market value for the similar product. ● For loans that are non-committed where no active market exists, the Company determines that the unpaid principal balance best approximates the market value, after considering the fair value of the underlying real estate collateral, estimated future cash flows, and loan interest rate.
Future policy benefits are recognized as expenses over the life of the policy by means of the provision for future policy benefits. The costs related to acquiring new business, including certain costs of issuing policies and other variable selling expenses (principally commissions), defined as deferred policy acquisition costs, are capitalized and amortized into expense.
The costs related to acquiring new business, including certain costs of issuing policies and other variable selling expenses (principally commissions), defined as deferred policy acquisition costs, are capitalized, and amortized into expenses.
It is the Company’s policy to cure any documentation problems regarding such loans at a minimal cost for up to a six-month time period and to pursue efforts to enforce loan purchase commitments from third-party investors concerning the loans.
Depending on market conditions, these commitment settlement dates can be extended at a cost to the Company. It is the Company’s policy to cure any documentation problems regarding such loans at a minimal cost for up to a six-month period and to pursue efforts to enforce loan purchase commitments from third-party investors concerning the loans.
This increase was due to an increase of $2,253,000 in renewal premiums due to the growth of the Company in recent years, particularly in whole life products, which resulted in more premium paying policies in force and an increase of $2,494,000 in first year premiums as a result of increased final expense insurance sales.
This increase was due to an increase of $9,238,000 in first year premiums because of increased preneed insurance sales and an increase of $419,000 in renewal premiums due to the growth of the Company in recent years, particularly in whole life products, which resulted in more premium paying policies in force.
If market conditions were to cause interest rates to change, the fair value of the Company’s fixed income portfolio (of approximately $653,982,000), which includes bonds, preferred stocks and mortgage loans held for investment, could change by the following amounts based on the respective basis point swing (the change in the fair values were calculated using a modeling technique): -200 bps -100 bps +100 bps +200 bps Change in Fair Value (in thousands) $ 60,877 $ 29,720 $ (32,592 ) $ (63,748 ) The Company is subject to risk-based capital guidelines established by statutory regulators requiring minimum capital levels based on the perceived risk of assets, liabilities, disintermediation, and business risk.
If market conditions were to cause interest rates to change, the fair value of the Company’s fixed income portfolio (of approximately $657,153,000), which includes bonds, preferred stocks and mortgage loans held for investment, could change by the following amounts based on the respective basis point swing (the change in the fair values were calculated using a modeling technique): -200 bps -100 bps +100 bps +200 bps Change in Fair Value $ 44,352 $ 20,873 $ (19,034 ) $ (39,027 ) (in thousands) The Company’s life insurance subsidiaries are subject to risk-based capital guidelines established by statutory regulators requiring minimum capital levels based on the perceived risk of assets, liabilities, disintermediation, and business risk.
The following table shows the condensed financial results for the Company’s mortgage operations for the years ended December 31, 2022 and 2021. See Note 15 of the Notes to Consolidated Financial Statements.
Insurance Operations The following table shows the condensed financial results for the Company’s insurance operations for 2023 and 2022. See Note 15 of the Notes to Consolidated Financial Statements.
As expected, the rapid increase in mortgage rates has resulted in a decrease in loan originations classified as ‘refinance’. Higher mortgage rates have also had a negative effect on loan originations classified as ‘purchase’, although not as significant as those in the refinance classification.
Higher mortgage rates have also had a negative effect on loan originations classified as ‘purchases’, although not as significant as those in the refinance classification.
The Company periodically assesses MSRs accounted for using the amortization method for impairment. 25 Mortgage Allowance for Loan Losses and Loan Loss Reserve The Company provides for losses on its mortgage loans held for investment through an allowance for loan losses (a contra-asset account) and through the mortgage loan loss reserve (a liability account).
Mortgage Allowance for Credit Losses and Loan Loss Reserve The Company provides for losses on its mortgage loans held for investment through an allowance for credit losses (a contra-asset account) and through the mortgage loan loss reserve (a liability account).
This increase was primarily due to an increase in the average outstanding balance of deferred policy and pre-need acquisition costs. Selling, general and administrative expenses decreased by $66,590,000, or 22.3%, to $231,848,000 for 2022, from $298,438,000 for 2021.
This increase was primarily due to an increase in the average outstanding balance of deferred policy and pre-need acquisition costs. Selling, general and administrative expenses decreased by an aggregate of $57,358,000, or 24.7%, to $174,490,000 for 2023, from $231,848,000 for 2022.
Death and other policyholder benefits reflect exposure to mortality risk and fluctuate from year to year on the level of claims incurred under insurance retention limits. The profitability of the Company is primarily affected by fluctuations in mortality, other policyholder benefits, expense levels, interest spreads (i.e., the difference between interest earned on investments and interest credited to policyholders) and persistency.
The profitability of the Company is primarily affected by fluctuations in mortality, other policyholder benefits, expense levels, interest spreads (i.e., the difference between interest earned on investments and interest credited to policyholders) and persistency.
At December 31, 2022, 2.2% (or $7,833,000) and at December 31, 2021, 3.9% (or $9,991,000) of the Company’s total bond investments were invested in bonds in rating categories three through six, which are considered non-investment grade.
As of December 31, 2023, 1.8% (or $6,954,000) and as of December 31, 2022, 2.2% (or $7,833,000) of the insurance subsidiaries’ total bond investments were invested in bonds in rating categories three through six, which are considered non-investment grade.
This decrease was partially offset by a $2,596,000 increase in future policy benefits and a $718,000 increase in surrender and other policy benefits. Amortization of deferred policy and pre-need acquisition costs and value of business acquired increased by $1,807,000, or 11.2%, to $17,950,000 for 2022, from $16,143,000 for 2021.
This increase was partially offset by a $76,000 decrease in surrender and other policy benefits. Amortization of deferred policy and pre-need acquisition costs and value of business acquired increased by $74,000, or 0.4%, to $18,024,000 for 2023, from $17,950,000 for 2022.
Revenues reported for these products consist of policy charges for the cost of insurance, administration charges, amortization of policy initiation fees and surrender charges assessed against policyholder account balances.
Revenues reported for these products consist of policy charges for the cost of insurance, administration charges, amortization of policy initiation fees and surrender charges assessed against policyholder account balances. Surrender benefits paid relating to these products are reflected as decreases in liabilities for policyholder account balances and not as expenses.
Because of the long-term nature of these liabilities, the Company is able to hold to maturity its bonds, real estate, and mortgage loans thus reducing the risk of liquidating these long-term investments as a result of any sudden changes in their fair values.
Because of the long-term nature of these liabilities, the Company can hold to maturity or for the targeted investment period its corresponding bond, real estate, and mortgage loan investments, thus reducing the risk of liquidating these long-term investments because of any sudden changes in their fair values.
Lapse rates measure the amount of insurance terminated during a particular period. The Company’s lapse rate for life insurance was 4.3% in 2022 as compared to a rate of 4.8% for 2021. 30 The combined statutory capital and surplus of the Company’s life insurance subsidiaries was $94,254,000 and $82,823,000 as of December 31, 2022 and 2021, respectively.
The Company’s lapse rate for life insurance was 4.4% for 2023 as compared to a rate of 4.3% for 2022. The combined statutory capital and surplus of the Company’s life insurance subsidiaries was $107,385,000 and $94,254,000 as of December 31, 2023 and 2022, respectively.
Generally, all bonds owned by the life insurance subsidiaries are rated by the National Association of Insurance Commissioners. Under this rating system, there are six categories used for rating bonds.
This represented 38.7% and 36.4% of the total investments of the Company as of December 31, 2023, and 2022, respectively. Generally, all bonds owned by the life insurance subsidiaries are rated by the National Association of Insurance Commissioners. Under this rating system, there are six categories used for rating bonds.
Years ended December 31 (in thousands of dollars) 2022 2021 2022 vs 2021 % Increase (Decrease) Revenues from external customers: Cemetery revenues $ 13,871 $ 15,626 (11 %) Mortuary revenues 13,123 8,371 57 % Net investment income 2,445 1,654 48 % Gains (losses) on investments and other assets (796 ) 1,512 (153 %) Other 305 100 205 % Total $ 28,948 $ 27,263 6 % Earnings before income taxes $ 6,094 $ 7,925 (23 %) Profitability in 2022 decreased due to (a) a $2,398,000 increase in selling, general and administrative expenses, (b) a $2,308,000 decrease in gains on investments and other assets primarily attributable to a $579,000 decrease in gains on real estate sales and a $1,729,000 decrease in gains on equity securities classified as restricted assets and cemetery perpetual care trust investments primarily due to a decrease in the fair value of equity securities, (c) a $2,066,000 decrease in cemetery pre-need sales, (d) a $1,017,000 increase in costs of goods sold, (e) a $225,000 increase in intersegment interest expense and other expenses, and (f) a $66,000 increase in amortization of deferred policy acquisition costs, which were partially offset by (i) a $4,751,000 increase in mortuary at-need sales, (ii) a $791,000 increase in net investment income, (iii) a $311,000 increase in cemetery at-need sales, (iv) a $205,000 increase in other revenues (v) a $137,000 increase in intersegment revenues, and (vi) a $54,000 decrease in interest expense.
Years ended December 31 (in thousands of dollars) 2023 2022 2023 vs 2022 % Increase (Decrease) Revenues from external customers: Cemetery revenues $ 15,189 $ 13,871 10 % Mortuary revenues 12,676 13,123 (3 %) Net investment income 2,952 2,445 21 % Gains (losses) on investments and other assets 717 (796 ) 190 % Other 404 305 32 % Total $ 31,938 $ 28,948 10 % Earnings before income taxes $ 8,445 $ 6,094 39 % Profitability in 2023 increased due to (a) a $2,196,000 increase in cemetery pre-need sales, (b) a $1,513,000 increase in gains on investments and other assets (primarily attributable to an increase in the fair value of equity securities classified as restricted assets and cemetery perpetual care trust investments), (c) a $507,000 increase in net investment income, (d) a $99,000 increase in other revenues, (e) a $59,000 decrease in amortization of deferred policy acquisition costs, and (f) a $44,000 decrease in intersegment interest expense and other expenses, which were partially offset by (i) a $878,000 decrease in cemetery at-need sales, (ii) a $546,000 increase in selling, general and administrative expenses, (iii) a $447,000 decrease in mortuary at-need sales, (iv) a $111,000 decrease in intersegment revenues, and (v) a $85,000 increase in costs of goods sold.
Deferred Tax Assets and Liabilities Deferred tax assets and liabilities require various estimates and judgments and may be affected favorably or unfavorably by various internal and external factors.
The estimated liability for indemnification losses is included in other liabilities and accrued expenses. Deferred Tax Assets and Liabilities Deferred tax assets and liabilities require various estimates and judgments and may be affected favorably or unfavorably by various internal and external factors.
Unearned Premium Reserve The universal life products the Company sells have significant policy initiation fees (front-end load) that are deferred and amortized into revenues over the estimated expected gross profits from surrender charges and investment, mortality and expense margins. The same issues that impact deferred acquisition costs apply to unearned revenue.
For traditional life insurance, once established for a particular series of products, these assumptions are generally held constant. 24 Unearned Premium Reserve The universal life products the Company sells have significant policy initiation fees (front-end load) that are deferred and amortized into revenues over the estimated expected gross profits from surrender charges and investment, mortality, and expense margins.
The fair value is also estimated by obtaining an independent appraisal, which typically considers area comparable properties and property condition. 24 Future Policy Benefits Reserves for future policy benefits for traditional life insurance products requires the use of many assumptions, including the duration of the policies, mortality experience, expenses, investment yield, lapse rates, surrender rates, and dividend crediting rates.
Future Policy Benefits Reserves for future policy benefits for traditional life insurance products requires the use of many assumptions, including the duration of the policies, mortality experience, expenses, investment yield, lapse rates, surrender rates, and dividend crediting rates.
Years ended December 31 (in thousands of dollars) 2022 2021 2022 vs 2021 % Increase (Decrease) Revenues from external customers: Secondary gains from investors $ 153,728 $ 230,417 (33 %) Income from loan originations 32,772 44,897 (27 %) Change in fair value of loans held for sale (8,835 ) (8,783 ) 1 % Change in fair value of loan commitments (4,309 ) (3,113 ) 38 % Net investment income 1,188 519 129 % Gains on investments and other assets 398 199 100 % Other 16,580 16,282 2 % Total $ 191,522 $ 280,418 (32 %) Earnings before income taxes $ 14,088 $ 28,903 (51 %) Included in other revenues is service fee income.
Years ended December 31 (in thousands of dollars) 2023 2022 2023 vs 2022 % Increase (Decrease) Revenues from external customers: Secondary gains from investors $ 68,428 $ 153,728 (55 %) Income from loan originations 31,245 32,772 (5 %) Change in fair value of loans held for sale (478 ) (8,835 ) (95 %) Change in fair value of loan commitments (1,124 ) (4,309 ) (74 %) Net investment income 1,580 1,188 33 % Gains on investments and other assets 157 398 (61 %) Other 1,576 16,580 (90 %) Total $ 101,384 $ 191,522 (47 %) Earnings (loss) before income taxes $ (17,416 ) $ 14,088 (224 %) Included in other revenues is service fee income.
Surrender benefits paid relating to these products are reflected as decreases in liabilities for policyholder account balances and not as expenses. 21 The Company receives investment income earned from the funds deposited into account balances, a portion of which is passed through to the policyholders in the form of interest credited.
The Company receives investment income earned from the funds deposited into account balances, a portion of which is passed through to the policyholders in the form of interest credited. Interest credited to policyholder account balances and benefit claims more than policyholder account balances are reported as expenses in the consolidated financial statements.
When a loan becomes delinquent, the Company proceeds to foreclose on the real estate and all expenses for foreclosure are expensed as incurred. Once foreclosed, an adjustment for the lower of cost or fair value is made, if necessary, and the amount is classified as real estate held for investment.
Once foreclosed, an adjustment for the lower of cost or fair value is made, if necessary, and the amount is classified as real estate held for investment.
Off-Balance Sheet Agreements The Company has entered into commitments to fund construction and land development loans and has also provided financing for land acquisition and development. As of December 31, 2022, the Company’s commitments were approximately $231,250,000 for these loans, of which $175,754,000 had been funded.
Off-Balance Sheet Agreements The Company has commitments to fund existing construction and land development loans pursuant to the various loan agreements. As of December 31, 2023, the Company’s commitments were approximately $146,953,000 for these loans, of which $104,977,000 had been funded.
This decrease was primarily due to a $76,546,000 decrease in secondary gains from mortgage loans sold to third-party investors into the secondary market, a $13,258,000 decrease in loan fees and interest income, a $1,247,000 decrease in the fair value of loans held for sale and loan commitments.
This decrease was primarily due to an $85,366,000 decrease in secondary gains from mortgage loans sold to third-party investors into the secondary market, and a $2,579,000 decrease in loan fees and interest income.
Profitability in 2022 has decreased due to (a) a $76,689,000 decrease in secondary gains from investors, (b) a $12,125,000 decrease in income from loan originations, (c) $1,196,000 decrease in the fair value of loan commitments, (d) a $1,124,000 increase in intersegment expenses, (e) a $242,000 decrease in intersegment revenues, (e) a $51,000 increase in depreciation on property and equipment, and (f) a $51,000 decrease in the fair value of loans held for sale, which were partially offset by (i) a $55,003,000 decrease in commissions, (ii) an $8,481,000 decrease in other expenses, (iii) a $4,360,000 decrease in personnel expenses, (iv) a $3,002,000 decrease in costs related to funding mortgage loans, (v) a $2,230,000 decrease in intersegment interest expense, (vi) a $1,474,000 decrease in advertising expenses, (vii) a $884,000 decrease in interest expense, (viii) $669,000 increase in net investment income, (ix) a $297,000 increase in other revenues, (x) a $199,000 increase in gains on investments and other assets, (xi) and a $64,000 decrease in rent and rent related expenses.
Profitability in 2023 decreased due to (a) an $85,300,000 decrease in secondary gains from investors, (b) a $15,004,000 decrease in other revenues due to the sale of certain MSRs in October 2022, (c) a $1,535,000 increase in intersegment interest expense and other expenses, (d) a $1,527,000 decrease in income from loan originations, and (e) a $241,000 decrease in gains on investments and other assets, which were partially offset by (i) a $23,662,000 decrease in commissions, (ii) a $17,871,000 decrease in personnel expenses, (iii) a $13,180,000 decrease in other expenses, (iv) an $8,356,000 increase in the fair value of loans held for sale, (v) a $3,185,000 increase in the fair value of loan commitments, (vi) a $3,077,000 decrease in interest expense, (vii) a $1,100,000 decrease in costs related to funding mortgage loans, (viii) a $1,011,000 decrease in advertising expenses, (ix) a $392,000 increase in net investment income, (x) a $175,000 increase in intersegment revenues, (xi) a $42,000 decrease in depreciation on property and equipment, and (xii) a $52,000 decrease in rent and rent related expenses.
These tests evaluate whether the present value of future contract-related cash flows will support the capitalized DAC and VOBA assets. These cash flows consist primarily of premium income, less benefits and expenses.
The Company tests for recoverability by using the Company’s current best-estimate assumptions as to policyholder mortality, persistency, maintenance expenses and invested asset returns. These tests evaluate whether the present value of future contract-related cash flows will support the capitalized DAC and VOBA assets. These cash flows consist primarily of premium income, less benefits, and expenses.
This program permits the Company to self-insure a portion of losses, to gain access to a wide array of safety-related services, to pool insurance risks and resources in order to obtain more competitive pricing for administration and reinsurance and to limit its risk of loss in any particular year.
This program permits the Company to pool insurance risks and resources with like-minded companies in order to obtain more competitive pricing for claims administration, stop loss insurance premiums and to limit its risk of loss in any particular year.
This increase was primarily attributable to a $6,191,000 increase in mortgage loan interest, a $2,228,000 increase in rental income from real estate held for investment, a $1,626,000 increase in fixed maturity securities income, a $1,431,000 increase in interest on cash and cash equivalents, a $388,000 increase in income in other investments, and a $65,000 increase in equity securities income.
This increase was primarily attributable to a $4,476,000 increase in fixed maturity securities income, a $2,583,000 increase in interest on cash and cash equivalents, a $477,000 decrease in investment expenses, a $223,000 increase in rental income from real estate held for investment, a $106,000 increase in equity securities income, a $99,000 increase in income in other investments, and a $5,000 increase in insurance assignment income.
This decrease in mortgage fee income was partially offset by a $1,133,000 decrease in the provision for loan loss reserve. Insurance premiums and other considerations increased by $4,747,000, or 4.7%, to $105,002,000 for 2022, from $100,255,000 for 2021.
This decrease in mortgage fee income was partially offset by a $11,541,000 increase in the fair value of loans held for sale and loan commitments and a $1,052,000 decrease in the provision for loan loss reserve. Insurance premiums and other considerations increased by $9,657,000, or 9.2%, to $114,658,000 for 2023, from $105,002,000 for 2022.
Changes in these estimates, judgments or factors may result in an increase or decrease to the Company’s deferred tax assets and liabilities with a related increase or decrease in the Company’s provision for income taxes.
Changes in these estimates, judgments or factors may result in an increase or decrease to the Company’s deferred tax assets and liabilities with a related increase or decrease in the Company’s provision for income taxes. Results of Consolidated Operations 2023 Compared to 2022 Total revenues decreased by $71,155,000, or 18.3%, to $318,497,000 for 2023 from $389,652,000 for 2022.
This increase was primarily due to a $4,751,000 increase in mortuary at-need sales and a $311,000 increase in cemetery at-need sales. This increase was partially offset by a $2,065,000 decrease in cemetery pre-need sales Gains on investments and other assets decreased by $7,123,000, or 113.7%, to $858,000 in losses for 2022, from $6,265,000 in gains for 2021.
This increase was partially offset by a $878,000 decrease in cemetery at-need sales and a $447,000 decrease in mortuary at-need sales. Gains on investments and other assets increased by $2,695,000, or 314.3%, to $1,837,000 in gains for 2023, from $858,000 in losses for 2022.
Net investment income increased by $7,933,000, or 13.6%, to $66,198,000 for 2022, from $58,265,000 for 2021.
Net investment income increased by $6,145,000, or 9.3%, to $72,343,000 for 2023, from $66,198,000 for 2022.
This decrease in gains on investments and other assets was primarily due to a $5,243,000 decrease in gains on equity securities mostly attributable to decreases in the fair value of these equity securities, a $1,197,000 decrease in gains on other assets mostly attributable to a decrease in gains recognized on the sale of mortgage loans held for investment, and a $683,000 decrease in gains on fixed maturity securities.
This increase in gains on investments and other assets was primarily due to a $4,157,000 increase in gains on equity securities mostly attributable to increases in the fair value of these equity securities.
The decrease in cash provided by operations was due primarily to decreased proceeds from the sale of loans held for sale. 29 The Company’s liability for future policy benefits is expected to be paid out over the long-term due to the Company’s market niche of selling funeral plans.
The decrease in cash provided by operations was due primarily to decreased proceeds from the sale of loans held for sale. The Company expects to pay out liabilities under its funeral plans over the long term given the nature of those plans.
Premium Deficiency and Loss Recognition Testing At least annually, the Company tests the adequacy of the net benefit reserves (liability for future policy benefits, net of DAC and VOBA) recorded for life insurance and annuity products. The Company tests for recoverability by using the Company’s current best-estimate assumptions as to policyholder mortality, persistency, maintenance expenses and invested asset returns.
The same issues that impact deferred acquisition costs apply to unearned revenue. Premium Deficiency and Loss Recognition Testing At least annually, the Company tests the adequacy of the net benefit reserves (liability for future policy benefits, net of DAC and VOBA) recorded for life insurance and annuity products.
Death benefits, surrenders and other policy benefits, and future policy benefits decreased by an aggregate of $556,000, or 0.6%, to $92,926,000 for 2022, from $93,482,000 for 2021. This decrease was primarily the result of a $3,870,000 decrease in death benefits ($4,296,000 for COVID-19 related deaths).
Death benefits, surrenders and other policy benefits, and future policy benefits increased by an aggregate of $7,086,000, or 7.6%, to $100,012,000 for 2023, from $92,926,000 for 2022. This increase was primarily the result of a $5,150,000 increase in future policy benefits and a $2,012,000 increase in death benefits.
This increase was partially offset by a $3,039,000 increase in investment expenses, a $949,000 decrease in insurance assignment income, and an $8,000 decrease in policy loan income. Net mortuary and cemetery sales increased by $2,997,000, or 12.5%, to $26,994,000 for 2022, from $23,997,000 for 2021.
This increase was partially offset by a $1,708,000 decrease in mortgage loan interest and a $116,000 decrease in policy loan income. 26 Net mortuary and cemetery sales increased by $871,000, or 3.2%, to $27,865,000 for 2023, from $26,994,000 for 2022. This increase was primarily due to a $2,196,000 increase in cemetery pre-need sales.
This increase was primarily due to a $1,587,000 increase in interest expense on bank loans, which was partially offset by a decrease of $884,000 in interest expense on mortgage warehouse lines for loans held for sale. 27 Cost of goods and services sold of the cemeteries and mortuaries increased by $1,017,000, or 27.5%, to $4,721,000 for 2022, from $3,704,000 for 2021.
Interest expense decreased by $2,965,000, or 37.9%, to $4,865,000 for 2023, from $7,830,000 for 2022. This decrease was primarily due to a decrease of $3,077,000 in interest expense on mortgage warehouse lines of credit for loans held for sale, which was partially offset by a $112,000 increase in interest expense on bank loans.
This amortization is adjusted when the Company revises the estimate of current or future gross profits or margins. For example, deferred policy acquisition costs are amortized earlier than originally estimated when policy terminations are higher than originally estimated or when investments backing the related policyholder liabilities are sold at a gain prior to their anticipated maturity.
For example, deferred policy acquisition costs are amortized earlier than originally estimated when policy terminations are higher than originally estimated or when investments backing the related policyholder liabilities are sold at a gain prior to their anticipated maturity. 21 Death and other policyholder benefits reflect exposure to mortality risk and fluctuate from year to year on the level of claims incurred under insurance retention limits.
This decrease in total revenues was offset by a $7,933,000 increase in net investment income, a $4,747,000 increase in insurance premiums and other considerations, a $2,997,000 increase in net cemetery and mortuary sales, a $281,000 increase in other revenues, and a $40,000 decrease in other than temporary impairments. 26 Mortgage fee income decreased by $89,918,000, or 34.1%, to $173,500,000 for 2022, from $263,418,000 for 2021.
This decrease in total revenues was offset by a $9,657,000 increase in insurance premiums and other considerations, a $6,145,000 increase in net investment income, a $2,695,000 increase in gains on investments and other assets, and an $871,000 increase in net cemetery and mortuary sales. Mortgage fee income decreased by $75,352,000, or 43.4%, to $98,148,000 for 2023, from $173,500,000 for 2022.
For the twelve months ended December 31, 2021, EverLEND Mortgage originated 323 loans ($108,295,000 total volume). Mortgage rates have followed the US Treasury yields up in response to the higher than expected inflation and the expectation that the Federal Reserve will continue to raise rates in the near term.
Mortgage rates have followed the US Treasury yields up in response to the higher-than-expected inflation and the expectation that the Federal Reserve will continue to raise rates in the near term. As expected, the rapid increase in mortgage rates has resulted in a decrease in loan originations classified as ‘refinance’.
This decrease was primarily the result of a $54,965,000 decrease in commissions, a $7,268,000 decrease in other expenses, a $3,002,000 decrease in costs related to funding mortgage loans, a $928,000 decrease in advertising expenses, a $629,000 decrease in personnel expenses, and a $359,000 decrease in rent and rent related expenses.
This decrease was primarily the result of a $23,391,000 decrease in commissions, a $16,970,000 decrease in personnel expenses, a $13,739,000 decrease in other expenses, a $1,987,000 decrease in advertising expenses, a $1,100,000 decrease in costs related to funding mortgage loans, a $145,000 decrease in depreciation on property and equipment, and a $26,000 decrease in rent and rent related expenses.
During the twelve months ended December 31, 2022 and 2021, the Company increased its allowance for loan losses by $270,000 and by $305,000, respectively, which was charged to bad debt expense and included in selling, general and administrative expenses for the period.
The Company has not received or recognized any interest income on the $6,149,000 in mortgage loans with delinquencies exceeding 90 days. During 2023 and 2022, the Company increased its allowance for credit losses by $1,184,000 and by $270,000, respectively, which was charged to bad debt expense and included in selling, general and administrative expenses for the period.
Interest credited to policyholder account balances and benefit claims in excess of policyholder account balances are reported as expenses in the consolidated financial statements. Premiums and other considerations received for traditional life insurance products are recognized as revenues when due.
Premiums and other considerations received for traditional life insurance products are recognized as revenues when due. Future policy benefits are recognized as expenses over the life of the policy by means of the provision for future policy benefits.
The maximum exposure to loss related to the Company’s involvement with this entity is limited to approximately $443,758, which is collateralized under a standby letter of credit issued on the insurance entity’s behalf. See Note 10, “Reinsurance, Commitments and Contingencies,” for additional discussion of commitments associated with the insurance program.
The Captive also provides access to a wide array of safety-related services and regular safety training to help the Company control claims. The maximum exposure to a loss related to the Company’s involvement in the Captive is limited to approximately $443,758, which is collateralized under a standby letter of credit issued on the insurance entity’s behalf.

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