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Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2017	Mar. 30, 2018	Jun. 30, 2017
Entity Registrant Name	SECURITY NATIONAL FINANCIAL CORP
Document Type	10-K
Document Period End Date	Dec. 31, 2017
Trading Symbol	snfca
Amendment Flag	false
Entity Central Index Key	0000318673
Current Fiscal Year End Date	--12-31
Entity Public Float			$ 32,000,000
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	FY
Class A Common Stock
Entity Common Stock, Shares Outstanding		14,569,321
Class C Common Stock
Entity Common Stock, Shares Outstanding		2,089,372

Balance Sheet - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Investments:
Fixed maturity securities, held to maturity, at amortized cost	$ 228,397,623	$ 184,979,644
Equity securities, available for sale, at estimated fair value	6,037,855	9,911,256
Mortgage loans held for investment (net of allowances for loan losses of $1,768,796 and $1,748,783 for 2017 and 2016)	204,210,885	148,990,732
Real estate held for investment (net of accumulated depreciation of $18,788,869 and $16,138,439 for 2017 and 2016)	141,298,706	145,165,921
Other investments and policy loans (net of allowances for doubtful accounts of $846,641 and $1,119,630 for 2017 and 2016)	45,895,472	41,599,246
Short-term investments		27,560,040
Accrued investment income	3,644,077	2,972,596
Total investments	629,484,618	561,179,435
Cash and cash equivalents	45,315,661	38,987,430
Loans held for sale (including $133,414,188 for 2017 and $-0- for 2016 at estimated fair value)	133,414,188	189,139,832
Receivables (net of allowances for doubtful accounts of $1,544,518 and $2,355,482 for 2017 and 2016)	10,443,869	8,410,546
Restricted assets (including $809,958 for 2017 and $736,603 for 2016 at estimated fair value)	11,830,621	10,391,394
Cemetery perpetual care trust investments (including $682,315 for 2017 and $698,202 for 2016 at estimated fair value)	4,623,563	4,131,885
Receivable from reinsurers	13,394,603	13,079,668
Cemetery land and improvements	9,942,933	10,672,836
Deferred policy and pre-need contract acquisition costs	80,625,304	69,118,745
Mortgage servicing rights, net	21,376,937	18,872,362
Property and equipment, net	8,069,380	8,791,522
Value of business acquired	6,588,759	7,570,300
Goodwill	2,765,570	2,765,570
Other assets	4,297,048	9,310,040
Total Assets	982,173,054	952,421,565
Liabilities
Future policy benefits and unpaid claims	604,746,951	584,067,692
Unearned premium reserve	4,222,410	4,469,771
Bank and other loans payable	157,450,925	152,140,679
Deferred pre-need cemetery and mortuary contract revenues	12,873,068	12,360,249
Cemetery perpetual care obligation	3,710,740	3,598,580
Accounts payable	3,613,100	4,213,109
Other liabilities and accrued expenses	29,655,087	34,693,485
Income taxes	17,332,783	24,318,869
Total liabilities	833,605,064	819,862,434
Common Stock:
Additional paid-in capital	38,125,042	34,813,246
Accumulated other comprehensive income, net of taxes	603,170	264,822
Retained earnings	77,520,951	67,409,204
Treasury stock, at cost - 537,203 Class A shares and -0- Class C shares in 2017; 704,122 Class A shares and -0- Class C shares in 2016	(931,075)	(1,370,611)
Total stockholders' equity	148,567,990	132,559,131
Total Liabilities and Stockholders' Equity	982,173,054	952,421,565
Class A Common Stock
Common Stock:
Common stock	29,071,154	27,638,012
Class B Common Stock
Common Stock:
Common stock
Class C Common Stock
Common Stock:
Common stock	4,178,748	3,804,458
Preferred Stock
Preferred Stock:
Preferred stock

Balance Sheet Parenthetical - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Allowance for losses on mortgage loans held for investment	$ 1,768,796	$ 1,748,783
Accumulated depreciation on real estate held for investment	18,788,869	16,138,439
Allowance for doubtful accounts on other investments and policy loans	846,641	1,119,630
Fair value of loans held for sale	133,414,188
Allowance for doubtful accounts on receivables	1,544,518	2,355,482
Fair value of restricted assets	809,958	736,603
Fair value of cemetery perpetual care trust investments	$ 682,315	$ 698,202
Preferred Stock Par Value	$ 1.00	$ 1.00
Preferred Stock Authorized	5,000,000	5,000,000
Class A Common Stock
Common Stock Par Value	$ 2.00	$ 2.00
Common Stock Authorized	20,000,000	20,000,000
Common Stock Issued	14,535,577	13,819,006
Treasury Stock	537,203	704,122
Class B Common Stock
Common Stock Par Value	$ 1.00	$ 1.00
Common Stock Authorized	5,000,000	5,000,000
Common Stock Issued
Common Stock Outstanding
Class C Common Stock
Common Stock Par Value	$ 2.00	$ 2.00
Common Stock Authorized	3,000,000	3,000,000
Common Stock Issued	2,089,374	1,902,229

Income Statement - USD ($)	12 Months Ended
Income Statement - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Revenues:
Insurance premiums and other considerations	$ 70,412,476	$ 64,501,017
Net investment income	35,062,968	31,978,601
Net mortuary and cemetery sales	12,657,117	12,267,640
Realized losses on investments and other assets	(2,948,482)	(176,387)
Other than temporary impairments on investments	(774,339)	(270,358)
Mortgage fee income	153,797,171	189,146,639
Other income	8,719,179	6,887,749
Total revenues	276,926,090	304,334,901
Benefits and expenses:
Death benefits	33,256,001	31,033,222
Surrenders and other policy benefits	2,839,017	2,354,158
Increase in future policy benefits	23,622,750	21,322,195
Amortization of deferred policy and pre-need acquisition costs and value of business acquired	8,480,250	8,003,175
Selling, general and administrative expenses:
Commissions	68,103,017	88,634,494
Personnel	70,328,830	70,254,479
Advertising	5,754,740	6,425,277
Rent and rent related	8,710,694	8,448,120
Depreciation on property and equipment	2,220,693	2,182,724
Provision for loan loss reserve		1,700,000
Costs related to funding mortgage loans	8,663,223	9,191,488
Other expenses	29,431,599	28,183,427
Interest expense	6,037,332	5,111,868
Cost of goods and services sold - mortuaries and cemeteries	1,945,832	1,787,043
Total benefits and expenses	269,393,978	284,631,670
Earnings before income taxes	7,532,112	19,703,231
Income tax benefit (expense)	6,580,822	(7,514,604)
Net earnings	$ 14,112,934	$ 12,188,627
Net earnings per Class A Equivalent common share (1)	$ 0.88	$ 0.78
Net earnings per Class A equivalent common share - assuming dilution (1)	$ 0.87	$ 0.77
Weighted average Class A equivalent common shares outstanding (1)	15,972,329	15,575,632
Weighted average Class A equivalent common shares outstanding-assuming dilution (1)	16,285,930	15,912,592

Comprehensive Income Statement - USD ($)	12 Months Ended
Comprehensive Income Statement - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Comprehensive Income Statement
Net earnings	$ 14,112,934	$ 12,188,627
Other comprehensive income:
Unrealized gains on available for sale securities	511,974	1,156,918
Unrealized gains on derivative instruments	3,308	10,639
Other comprehensive income, before income tax	515,282	1,167,557
Income tax expense	(176,934)	(403,377)
Other comprehensive income, net of income tax	338,348	764,180
Comprehensive income	$ 14,451,282	$ 12,952,807

Statements of Stockholders' Equity - USD ($)	Class A Common Stock	Class C Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings	Treasury Stock	Total
Balance at Dec. 31, 2015	$ 26,218,200	$ 3,419,280	$ 30,232,582	$ (499,358)	$ 60,525,404	$ (2,179,429)	$ 117,716,679
Net earnings					12,188,627		12,188,627
Other comprehensive income				764,180			764,180
Stock based compensation expense			343,577				343,577
Exercise of stock options	85,268	209,950	(179,112)				116,106
Sale of treasury stock			621,144			808,818	1,429,962
Stock Dividends	1,315,838	193,934	3,795,055		(5,304,827)
Conversion Class C to Class A	18,706	(18,706)
Balance at Dec. 31, 2016	27,638,012	3,804,458	34,813,246	264,822	67,409,204	(1,370,611)	132,559,131
Net earnings					14,112,934		14,112,934
Other comprehensive income				338,348			338,348
Stock based compensation expense			395,603				395,603
Exercise of stock options	16,366	206,804	(213,323)				9,847
Sale of treasury stock			712,591			822,270	1,534,861
Purchase of treasury stock						(382,734)	(382,734)
Stock Dividends	1,385,270	198,992	2,416,925		(4,001,187)
Conversion Class C to Class A	31,506	(31,506)
Balance at Dec. 31, 2017	$ 29,071,154	$ 4,178,748	$ 38,125,042	$ 603,170	$ 77,520,951	$ (931,075)	$ 148,567,990

Statement of Cash Flows - USD ($)	12 Months Ended
Statement of Cash Flows - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Cash flows from operating activities:
Net earnings	$ 14,112,934	$ 12,188,627
Adjustments to reconcile net earnings to net cash provided by operating activities:
Realized losses on investments and other assets	2,948,482	176,387
Other than temporary impairments on investments	774,339	270,358
Depreciation	6,280,438	5,579,259
Provision for loan losses and doubtful accounts	1,154,071	1,188,599
Net amortization of deferred fees and costs, premiums and discounts	96,509	653,761
Provision for deferred income taxes	(7,752,028)	6,130,644
Policy and pre-need acquisition costs deferred	(19,005,268)	(16,943,538)
Policy and pre-need acquisition costs amortized	7,498,709	6,829,702
Value of business acquired amortized	981,541	1,173,473
Mortgage servicing rights, additions	(6,085,352)	(8,603,154)
Amortization of mortgage servicing rights	3,580,777	2,410,547
Stock based compensation expense	395,603	343,577
Benefit plans funded with treasury stock	1,534,861	1,429,962
Net change in fair value of loans held for sale	(4,180,777)
Originations of loans held for sale	(2,545,755,713)	(3,098,710,299)
Proceeds from sales of loans held for sale	2,671,097,747	3,246,127,714
Net gains on sales of loans held for sale	(105,368,129)	(137,682,984)
Change in assets and liabilities:
Land and improvements held for sale	86,574	108,160
Future policy benefits and unpaid claims	22,815,274	17,989,595
Other operating assets and liabilities	(892,550)	(5,125,376)
Net cash provided by operating activities	44,318,042	35,535,014
Fixed maturity securities held to maturity:
Purchase - fixed maturity securities	(61,232,155)	(11,386,383)
Calls and maturities - fixed maturity securities	15,773,732	15,343,488
Equity securities available for sale:
Purchase - equity securities	(5,301,353)	(4,980,320)
Sales - equity securities	9,430,548	4,523,034
Purchases of short-term investments	(32,865,263)	(18,228,912)
Sales of short-term investments	60,425,303	12,943,083
Net changes in restricted assets	(1,409,990)	(981,433)
Net changes in cemetery perpetual care trust investments	(377,317)	(1,082,969)
Mortgage loans held for investment, policy loans, and other investments made	(455,821,383)	(469,593,661)
Payments received for mortgage loans held for investment, policy loans, and other investments	433,033,724	446,242,429
Purchases of property and equipment	(911,007)	(3,566,511)
Sale of property and equipment	24,978	47,293
Purchases of real estate held for investment	(14,751,923)	(26,634,840)
Sale of real estate held for investment	13,784,541	6,093,308
Cash paid for purchase of subsidiaries, net of cash acquired		(4,328,520)
Net cash used in investing activities	(40,197,565)	(55,590,914)
Cash flows from financing activities:
Investment contract receipts	12,213,843	11,349,276
Investment contract withdrawals	(14,912,154)	(13,620,998)
Proceeds from stock options exercised	$ 9,847	116,106
Purchase of treasury stock	(382,734)
Repayment of bank loans	$ (2,796,258)	(1,680,678)
Proceeds from bank borrowings	19,660,744	14,500,950
Net change in warehouse line borrowings for loans held for sale	(11,585,534)	8,325,432
Net cash provided by financing activities	2,207,754	18,990,088
Net change in cash and cash equivalents	6,328,231	(1,065,812)
Cash and cash equivalents at beginning of year	38,987,430	40,053,242
Cash and cash equivalents at end of year	45,315,661	38,987,430
Cash paid during the year for:
Interest (net of amount capitalized)	5,976,461	5,119,459
Income taxes	581,556	2,667,918
Non Cash Investing and Financing Activities:
Transfer of loans held for sale to mortgage loans held for investment	39,932,516	12,578,743
Accrued real estate construction costs and retainage	258,961	7,358,922
Mortgage loans held for investment foreclosed into real estate held for investment	1,576,196	$ 2,075,714
Transfer of cemetery land and improvements to property and equipment	$ 643,329

1) Significant Accounting Policies

12 Months Ended

Dec. 31, 2017

Notes

1) Significant Accounting Policies

General Overview of Business

Security National Financial Corporation and its wholly owned subsidiaries (the “Company”) operate in three main business segments: life insurance, cemetery and mortuary, and mortgages. The life insurance segment is engaged in the business of selling and servicing selected lines of life insurance, annuity products and accident and health insurance marketed primarily in the Intermountain West, California and eleven southern states. The cemetery and mortuary segment of the Company consists of eight mortuaries and five cemeteries in Utah and one cemetery in California. The mortgage segment is an approved government and conventional lender that originates and underwrites residential and commercial loans for new construction, existing homes and real estate projects primarily in Florida, Nevada, Texas, and Utah.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (GAAP). The presentation of certain amounts in prior years has been reclassified to conform to the 2017 presentation. The Company reclassified certain amounts from other assets to receivables; from receivables to other liabilities; from other assets to other liabilities; from equity securities to other investments; from other liabilities to mortgage loans held for investment; from net investment income to mortgage fee income; and from mortgage fee income to net investment income. These reclassifications had no impact on net earnings or stockholders’ equity. Additionally, see the discussion regarding correction of errors in Notes 22 and 23.

Principles of Consolidation

These consolidated financial statements include the financial statements of the Company and its majority owned subsidiaries. All intercompany transactions and accounts have been eliminated in consolidation.

Use of Estimates

Management of the Company has made a number of estimates and assumptions related to the reported amounts of assets and liabilities, reported amounts of revenues and expenses, and the disclosure of contingent assets and liabilities to prepare these financial statements in conformity with GAAP. Actual results could differ from those estimates.

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; 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. Although some variability is inherent in these estimates, management believes the amounts provided are fairly stated in all material respects.

Investments

The Company’s management determines the appropriate classifications of investments in fixed maturity securities and equity securities at the acquisition date and re-evaluates the classifications at each balance sheet date.

Fixed maturity securities held to maturity are carried at cost, adjusted for amortization of premium or accretion of discount. Although the Company has the ability and intent to hold these investments to maturity, infrequent and unusual conditions could occur under which it would sell certain of these securities. Those conditions include unforeseen changes in asset quality, significant changes in tax laws, and changes in regulatory capital requirements or permissible investments.

Equity securities available for sale are carried at estimated fair value. Changes in fair values net of income taxes are reported as unrealized appreciation or depreciation and recorded as an adjustment directly to stockholders’ equity and, accordingly, have no effect on net income.

Mortgage loans held for investment are carried at their unpaid principal balances adjusted for net deferred fees, charge-offs and the related allowance for loan losses. Interest income is included in net investment income on the consolidated statements of earnings and is recognized when earned. The Company defers related material loan origination fees, net of related direct loan origination costs, and amortizes the net fees over the term of the loans. Origination fees are included in net investment income on the consolidated statements of earnings.

Mortgage loans are secured by the underlying property and require an appraisal at the time of underwriting and funding. Generally, the Company will fund a loan not to exceed 80% of the loan’s collateral fair market value. Amounts over 80% will require additional collateral or mortgage insurance by an approved third-party insurer.

Real estate held for investment is carried at cost, less accumulated depreciation provided on a straight line basis over the estimated useful lives of the properties, or is adjusted to a new basis for impairment in value, if any. Included are foreclosed properties which the Company intends to hold for investment purposes. These properties are recorded at the lower of cost or fair value upon foreclosure.

Policy loans and other investments are carried at the aggregate unpaid balances, less allowances for possible losses.

Short-term investments are carried at cost and consist of money market funds.

Realized gains and losses on investments arise when investments are sold (as determined on a specific identification basis) or are other than temporarily impaired. If in management’s judgment a decline in the value of an investment below cost is other than temporary, the cost of the investment is written down to fair value with a corresponding charge to earnings. Factors considered in judging whether an impairment is other than temporary include: the financial condition, business prospects and credit worthiness of the issuer, the length of time that fair value has been less than cost, the relative amount of the decline, and the Company’s ability and intent to hold the investment until the fair value recovers, which is not assured.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. The Company maintains its cash in bank deposit accounts, which at times exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents.

Loans Held for Sale

Mortgage loans held for sale prior to July 1, 2017 were carried at the lower of cost or market net of direct selling revenues and costs. Based on the short-term nature of these assets, the Company had no related allowance for loan losses recorded for these assets. On July 1, 2017 the Company elected the fair value option for loans held for sale. See Note 3 and Note 17 to Consolidated Financial Statements for additional disclosures regarding loans held for sale.

Mortgage Fee Income

Mortgage fee income consists of origination fees, processing fees, interest income and certain other income related to the origination of mortgage loans held for sale. Mortgage loans held for sale prior to July 1, 2017 were shown on the Company’s consolidated balance sheets at the lower of cost or market and all revenues and costs were deferred until the loans were sold to a third-party investor. On July 1, 2017, the Company made an election to use fair value accounting for all mortgage loans that are held for sale. Accordingly, all revenues and costs are now recognized when the mortgage loan is funded and any changes in fair value are shown as a component of mortgage fee income. See Note 3 and Note 17 to Consolidated Financial Statements for additional disclosures regarding loans held for sale.

The Company, through its mortgage subsidiaries, sells mortgage loans to third-party investors without recourse unless defects are identified in the representations and warranties made at loan sale. It may be required, however, to repurchase a loan or pay a fee instead of repurchase under certain events, which include the following:

· specified by the investor, Failure to deliver original documents

· 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.

Loan purchase commitments generally specify a date 30 to 45 days after delivery upon which the underlying loans should be settled. 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 time period and to pursue efforts to enforce loan purchase commitments from third-party investors concerning the loans. The Company believes that six months allows adequate time to remedy any documentation issues, to enforce purchase commitments, and to exhaust other alternatives. Remedial methods include the following:

· Research reasons for rejection,

· Provide additional documents,

· Request investor exceptions,

· Appeal rejection decision to purchase committee, and

· Commit to secondary investors.

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 the long-term investment portfolio at the lower of cost or fair value and previously recorded mortgage fee income that was to be received from a third-party investor is written off against the loan loss reserve.

Determining Lower of Cost or Market

Cost for loans held for sale is equal to the amount paid to the warehouse bank and the amount originally funded by the Company. Market value is often difficult to determine, but is based on the following:

· 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 the loan interest rate.

The appraised value of the real estate underlying the original mortgage loan adds support 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. In determining the market value on the date of repurchase, the Company considers the total value of all of the loans because any sale of loans would be made as a pool.

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.

Loan Loss Reserve

The loan loss reserve is an estimate of probable losses at the balance sheet date that the Company will realize in the future on loans held for sale. The Company may be required to reimburse third-party investors for costs associated with early payoff of loans within the first six months of such loans and to repurchase loans where there is a default in any of the first four monthly payments to the investors or, in lieu of repurchase, to pay a negotiated fee to the investors. The Company’s estimates are based upon historical loss experience and the best estimate of the probable loan loss liabilities.

Upon completion of a transfer that satisfies the conditions to be accounted for as a sale, the Company initially measures at fair value liabilities incurred in a sale relating to any guarantee or recourse provisions. The Company accrues a monthly allowance for indemnification losses to investors based on total production. This estimate is based on the Company’s historical experience and is included as a component of mortgage fee income. Subsequent updates to the recorded liability from changes in assumptions are recorded in selling, general and administrative expenses. The estimated liability for indemnification losses is included in other liabilities and accrued expenses.

The loan loss reserve analysis involves mortgage loans that have been sold to third-party investors, which were believed to have met investor underwriting guidelines at the time of sale, where the Company has received a demand from the investor. There are generally three types of demands: make whole, repurchase, or indemnification. These types of demands are more particularly described as follows:

Make whole demand – A make whole demand occurs when an investor forecloses on a property and then sells the property. The make whole amount is calculated as the difference between the original unpaid principal balance, accrued interest and fees, less the sale proceeds.

Repurchase demand – A repurchase demand usually occurs when there is a significant payment default, error in underwriting or detected loan fraud.

Indemnification demand – On certain loans the Company has negotiated a set fee that is to be paid in lieu of repurchase. The fee varies by investor and by loan product type.

The Company believes the allowance for loan losses and the loan loss reserve represent probable loan losses incurred as of the balance sheet date.

Additional information related to the Loan Loss Reserve is included in Note 3.

Restricted Assets

Restricted assets are assets held in a trust account for future mortuary services and merchandise and consist of cash and cash equivalents; participations in mortgage loans held for investment with Security National Life Insurance Company (“Security National Life”); mutual funds carried at estimated fair value; equity securities carried at estimated fair value; and a surplus note with Security National Life. Restricted assets also represents escrows held for borrowers and investors under servicing and appraisal agreements relating to mortgage loans, funds held by warehouse banks in accordance with loan purchase agreements and funds held in escrow for certain real estate construction development projects. Additionally, the Company elected to fund its medical benefit safe-harbor limit based on 35% of the qualified direct costs for the preceding year, and has included this amount as a component of restricted cash.

Cemetery Perpetual Care Trust Investments

Cemetery endowment care trusts have been set up for four of the six cemeteries owned by the Company. Of the six cemeteries owned by the Company, four cemeteries are endowment care properties. Under endowment care arrangements a portion of the price for each lot sold is withheld and invested in a portfolio of investments similar to those described in the prior paragraph. The earnings stream from the investments is designed to fund future maintenance and upkeep of the cemetery.

Cemetery Land and Improvements

The development of a cemetery involves not only the initial acquisition of raw land but the installation of roads, water lines, landscaping and other costs to establish a marketable cemetery lot. The costs of developing the cemetery are shown as an asset on the balance sheet. The amount on the balance sheet is reduced by the total cost assigned to the development of a particular lot when the criterion for recognizing a sale of that lot is met.

Deferred Policy Acquisition Costs and Value of Business Acquired

Commissions and other costs, net of commission and expense allowances for reinsurance ceded, that vary with and are primarily related to the production of new insurance business have been deferred. Deferred policy acquisition costs (“DAC”) for traditional life insurance are amortized over the premium paying period of the related policies using assumptions consistent with those used in computing policy benefit reserves. For interest-sensitive insurance products, deferred policy acquisition costs are amortized generally in proportion to the present value of expected gross profits from surrender charges, investment, mortality and expense margins. This amortization is adjusted when estimates of current or future gross profits to be realized from a group of products are reevaluated. Deferred acquisition costs are written off when policies lapse or are surrendered.

The Company follows GAAP when accounting for DAC on internal replacements of insurance and investment contracts. An internal replacement is a modification in product benefits, features, rights or coverage that occurs by the exchange of a contract for a new contract, or by amendment, endorsement, or rider to contract, or by the election of a feature or coverage within a contract. Modifications that result in a replacement contract that is substantially changed from the replaced contract are accounted for as an extinguishment of the replaced contract. Unamortized DAC, unearned revenue liabilities and deferred sales inducements from the replaced contract are written-off. Modifications that result in a contract that is substantially unchanged from the replaced contract are accounted for as a continuation of the replaced contract.

Value of business acquired is the present value of estimated future profits of the acquired business and is amortized similar to deferred policy acquisition costs.

Mortgage Servicing Rights

Mortgage Service Rights (“MSR”) arise from contractual agreements between the Company and third-party investors (or their agents) when mortgage loans are sold. Under these contracts, the Company is obligated to retain and provide loan servicing functions on loans sold, in exchange for fees and other remuneration. The servicing functions typically performed include, among other responsibilities, collecting and remitting loan payments; responding to borrower inquiries; accounting for principal and interest, holding custodial (impound) funds for payment of property taxes and insurance premiums; counseling delinquent mortgagors; and supervising the acquisition of real estate owned and property dispositions.

The total residential mortgage loans serviced for others consist primarily of agency conforming fixed-rate mortgage loans. The value of MSRs is derived from the net cash flows associated with the servicing contracts. The Company receives a servicing fee of generally about 0.250% annually on the remaining outstanding principal balances of the loans. Based on the result of the cash flow analysis, an asset or liability is recorded for mortgage servicing rights. The servicing fees are collected from the monthly payments made by the mortgagors. The Company generally receives other remuneration including rights to various mortgagor-contracted fees such as late charges, and collateral reconveyance charges and the Company is generally entitled to retain the interest earned on funds held pending remittance of mortgagor principal, interest, tax and insurance payments. Contractual servicing fees and late fees are included in other revenues on the consolidated statements of earnings.

The Company’s subsequent accounting for MSRs is based on the class of MSRs. The Company has identified two classes of MSRs: MSRs backed by mortgage loans with initial term of 30 years and MSRs backed by mortgage loans with initial term of 15 years. The Company distinguishes between these classes of MSRs due to their differing sensitivities to change in value as the result of changes in market. After being initially recorded at fair value, MSRs backed by mortgage loans are accounted for using the amortization method. Amortization expense is included in other expenses on the consolidated statements of earnings. 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.

Interest rate risk, prepayment risk, and default risk are inherent risks in MSR valuation. Interest rate changes largely drive prepayment rates. Refinance activity generally increases as rates decline. A significant decrease in rates beyond expectation could cause a decline in the value of the MSR. On the contrary, if rates increase borrowers are less likely to refinance or prepay their mortgage, which extends the duration of the loan and MSR values are likely to rise. Because of these risks, discount rates and prepayment speeds are used to estimate the fair value.

The Company periodically assesses MSRs for impairment. Impairment occurs when the current fair value of the MSR falls below the asset’s carrying value (carrying value is the amortized cost reduced by any related valuation allowance). If MSRs are impaired, the impairment is recognized in current period earnings and the carrying value of the MSRs is adjusted through a valuation allowance.

Management periodically reviews the various loan strata to determine whether the value of the MSRs in a given stratum is impaired and likely to recover. When management deems recovery of the value to be unlikely in the foreseeable future, a write-down of the cost of the MSRs for that stratum to its estimated recoverable value is charged to the valuation allowance.

Property and Equipment

Property and equipment are recorded at cost. Depreciation is calculated principally on the straight-line method over the estimated useful lives of the assets which range from three to forty years. Leasehold improvements paid for by the Company as a lessee are amortized over the lesser of the useful life or remaining lease terms.

Long-lived Assets

Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the related carrying amount may not be recoverable. When required, impairment losses on assets to be held and used are recognized based on the fair value of the asset, and long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. No impairment of long-lived assets has been recognized in the accompanying financial statements.

Derivative Instruments

Mortgage Banking Derivatives

Loan Commitments

The Company is exposed to price risk due to the potential impact of changes in interest rates on the values of loan commitments from the time a loan commitment is made to an applicant to the time the loan that would result from the exercise of that loan commitment is funded. Managing price risk is complicated by the fact that the ultimate percentage of loan commitments that will be exercised (i.e., the number of loans that will be funded) fluctuates. The probability that a loan will not be funded or the loan application is denied or withdrawn within the terms of the commitment is driven by a number of factors, particularly the change, if any, in mortgage rates following the issuance of the loan commitment.

In general, the probability of funding increases if mortgage rates rise and decreases if mortgage rates fall. This is due primarily to the relative attractiveness of current mortgage rates compared to the applicant’s committed rate. The probability that a loan will not be funded within the terms of the mortgage loan commitment also is influenced by the source of the applications (retail, broker or correspondent channels), proximity to rate lock expiration, purpose for the loan (purchase or refinance), product type and the application approval status. The Company has developed fallout estimates using historical data that take into account all of the variables, as well as renegotiations of rate and point commitments that tend to occur when mortgage rates fall. These fallout estimates are used to estimate the number of loans that the Company expects to be funded within the terms of the loan commitments and are updated periodically to reflect the most current data.

The Company estimates the fair value of a loan commitment based on the change in estimated fair value of the underlying mortgage loan, quoted mortgage-backed securities (“MBS”) prices, estimates of the fair value of mortgage servicing rights, and an estimate of the probability that the mortgage loan will fund within the terms of the commitment. The change in fair value of the underlying mortgage loan is measured from the date the loan commitment is issued and is shown net of expenses. Following issuance, the value of a loan commitment can be either positive or negative depending upon the change in value of the underlying mortgage loans.

Forward Sale Commitments

The Company utilizes forward commitments to economically hedge the price risk associated with its outstanding mortgage loan commitments. A forward commitment protects the Company from losses on sales of the loans arising from exercise of the loan commitments. Management expects these types of commitments will experience changes in fair value opposite to changes in fair value of the loan commitments, thereby reducing earnings volatility related to the recognition in earnings of changes in the values of the commitments.

The net changes in fair value of loan commitments and forward sale commitments are shown in current earnings as a component of mortgage fee income on the consolidated statements of earnings. Mortgage banking derivatives are shown in other assets and other liabilities and accrued expenses on the consolidated balance sheets.

Call and Put Options

The Company uses a strategy of selling “out of the money” call options on its available for sale equity securities as a source of revenue. The options give the purchaser the right to buy from the Company specified equity securities at a set price up to a pre-determined date in the future. The Company uses the strategy of selling put options as a means of generating cash or purchasing equity securities at lower than current market prices. The Company receives an immediate payment of cash for the value of the option and establishes a liability for the fair value of the option. The liability for options is adjusted to fair value at each reporting date. In the event a call option is exercised, the Company recognizes a gain on the sale of the equity security enhanced by the value of the option that was sold. If the option expires unexercised, the Company recognizes a gain from the sale of the option. In the event a put option is exercised, the Company acquires an equity security at the strike price of the option reduced by the value received from the sale of the put option. The equity security is then traded as a normal equity security in the Company’s portfolio. The net changes in the fair value of call and put options are shown in current earnings as a component of realized gains (losses) on investments and other assets. Call and put options are shown in other liabilities and accrued expenses on the consolidated balance sheets.

Allowance for Doubtful Accounts and Loan Losses and Impaired Loans

The Company records an allowance and recognizes an expense for potential losses from mortgage loans held for investment, other investments and receivables in accordance with GAAP.

Receivables are the result of cemetery and mortuary operations, mortgage loan operations and life insurance operations. The allowance is based upon the Company’s historical experience for collectively evaluated impairment. Other allowances are based upon receivables individually evaluated for impairment. Collectability of the cemetery and mortuary receivables is significantly influenced by current economic conditions. The critical issues that impact recovery of mortgage loan operations are interest rate risk, loan underwriting, new regulations and the overall economy.

The Company provides for losses on its mortgage loans held for investment through an allowance for loan losses (a contra-asset account). The allowance is comprised of two components. The first component is an allowance for collectively evaluated impairment that is based upon the Company’s historical experience in collecting similar receivables. The second component is based upon individual evaluation of loans that are determined to be impaired. Upon determining impairment, the Company establishes an individual impairment allowance based upon an assessment of the fair value of the underlying collateral. See the schedules in Note 2 for additional information. In addition, when a mortgage loan is past due more than 90 days, the Company does not accrue any interest income. 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. The Company will rent the properties until it is deemed desirable to sell them.

The allowance for losses on mortgage loans held for investment could change based on changes in the value of the underlying collateral, the performance status of the loans, or the Company’s actual collection experience. The actual losses could change, in the near term, from the established allowance, based upon the occurrence or non-occurrence of these events.

For purposes of determining the allowance for losses, the Company has segmented its mortgage loans held for investment by loan type. The Company’s loan types are commercial, residential, and residential construction. The inherent risks within the portfolio vary depending upon the loan type as follows:

Commercial - Underwritten in accordance with the Company’s policies to determine the borrower’s ability to repay the obligation as agreed. Commercial loans are made primarily based on the underlying collateral supporting the loan. Accordingly, the repayment of a commercial loan depends primarily on the collateral and its ability to generate income and secondary on the borrower’s (or guarantors) ability to repay.

Residential – Secured by family dwelling units. These loans are secured by first mortgages on the unit, which are generally the primary residence of the borrower, generally at a loan-to-value ratio (“LTV”) of 80% or less.

Residential construction (including land acquisition and development) – Underwritten in accordance with the Company’s underwriting policies which include a financial analysis of the builders, borrowers (guarantors), construction cost estimates, and independent appraisal valuations. These loans will rely on the value associated with the project upon completion. These cost and valuation estimates may be inaccurate. Construction loans generally involve the disbursement of substantial funds over a short period of time with repayment substantially dependent upon the success of the completed project and the ability of the borrower to secure long-term financing. Additionally, land is underwritten according to the Company’s policies, which include independent appraisal valuations as well as the estimated value associated with the land upon completion of development into finished lots. These cost and valuation estimates may be inaccurate. These loans are considered to be of a higher risk than other mortgage loans due to their ultimate repayment being sensitive to general economic conditions, availability of long-term or construction financing, and interest rate sensitivity.

Future Policy Benefits and Unpaid Claims

Future policy benefit reserves for traditional life insurance are computed using a net level method, including assumptions as to investment yields, mortality, morbidity, withdrawals, and other assumptions based on the life insurance subsidiaries’ experience, modified as necessary to give effect to anticipated trends and to include provisions for possible unfavorable deviations. Such liabilities are, for some plans, graded to equal statutory values or cash values at or prior to maturity. The range of assumed interest rates for all traditional life insurance policy reserves was 4% to 10%. Benefit reserves for traditional limited-payment life insurance policies include the deferred portion of the premiums received during the premium-paying period. Deferred premiums are recognized as income over the life of the policies. Policy benefit claims are charged to expense in the period the claims are incurred. Increases in future policy benefits are charged to expense.

Future policy benefit reserves for interest-sensitive insurance products are computed under a retrospective deposit method and represent policy account balances before applicable surrender charges. Policy benefits and claims that are charged to expense include benefit claims incurred in the period in excess of related policy account balances. Interest crediting rates for interest-sensitive insurance products ranged from 3% to 6.5%.

The Company records an unpaid claims liability for claims in the course of settlement equal to the death benefit amount less any reinsurance recoverable amount for claims reported. There is also an unpaid claims liability for claims incurred but not reported. This liability is based on the historical experience of the net amount of claims that were reported in reporting periods subsequent to the reporting period when claims were incurred. This amount is adjusted to include a margin for adverse deviation.

Participating Insurance

Participating business constituted 2% of insurance in force for the years ended 2017 and 2016. The provision for policyholders’ dividends included in policyholder obligations is based on dividend scales anticipated by management. Amounts to be paid are determined by the Board of Directors.

Recognition of Insurance Premiums and Other Considerations

Premiums and other consideration for traditional life insurance products (which include those products with fixed and guaranteed premiums and benefits and consist principally of whole life insurance policies, limited payment life insurance policies, and certain annuities with life contingencies) are recognized as revenues when due from policyholders. Premiums and other consideration for interest-sensitive insurance policies (which include universal life policies, interest-sensitive life policies, deferred annuities, and annuities without life contingencies) are recognized when earned and consist of amounts assessed against policyholder account balances during the period for policy administration charges and surrender charges.

Reinsurance

The Company follows the procedure of reinsuring risks in excess of $100,000 to provide for greater diversification of business to allow management to control exposure to potential losses arising from large risks, and provide additional capacity for growth. The Company remains liable for amounts ceded in the event the reinsurers are unable to meet their obligations.

The Company entered into coinsurance agreements with unaffiliated insurance companies under which the Company assumed 100% of the risk for certain life insurance policies and certain other policy-related liabilities of the insurance company.

Reinsurance premiums, commissions, expense reimbursements, and reserves related to reinsured business are accounted for on a basis consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts. Expense allowances received in connection with reinsurance ceded are accounted for as a reduction of the related policy acquisition costs and are deferred and amortized accordingly.

Pre-need Sales and Costs

Pre-need contract sales of funeral services and caskets - revenue and costs associated with the sales of pre-need funeral services and caskets are deferred until the services are performed or the caskets are delivered.

Sales of cemetery interment rights (cemetery burial property) - revenue and costs associated with the sale of cemetery interment rights are recognized in accordance with the retail land sales provisions based on GAAP. Under GAAP, recognition of revenue and associated costs from constructed cemetery property must be deferred until 10% of the sales price has been collected.

Pre-need contract sales of cemetery merchandise (primarily markers and vaults) - revenue and costs associated with the sale of pre-need cemetery merchandise is deferred until the merchandise is delivered.

Pre-need contract sales of cemetery services (primarily merchandise delivery, installation fees and burial opening and closing fees) - revenue and costs associated with the sales of pre-need cemetery services are deferred until the services are performed.

Prearranged funeral and pre-need cemetery customer acquisition costs - costs incurred related to obtaining new pre-need contract cemetery and prearranged funeral services are accounted for under the guidance of the provisions based on GAAP. Obtaining costs, which include only costs that vary with and are primarily related to the acquisition of new pre-need cemetery and prearranged funeral services, are deferred until the merchandise is delivered or services are performed.

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 obligations remaining.

The Company, through its cemetery and mortuary operations, provides guaranteed funeral arrangements wherein a prospective customer can receive future goods and services at guaranteed prices. To accomplish this, the Company, through its life insurance operations, sells to the customer an increasing benefit life insurance policy that is assigned to the mortuaries. If, at the time of need, the policyholder/potential mortuary customer utilizes one of the Company’s facilities, the guaranteed funeral arrangement contract that has been assigned will provide the funeral goods and services at the contracted price. The increasing life insurance policy will cover the difference between the original contract prices and current prices. Risks may arise if the difference cannot be fully met by the life insurance policy. However, management believes that given current inflation rates and related price increases of goods and services, the risk of exposure is minimal.

Goodwill

Previous acquisitions have been accounted for as purchases under which assets acquired and liabilities assumed were recorded at their fair values with the excess purchase price recognized as goodwill. The Company evaluates annually or when changes in circumstances warrant the recoverability of goodwill and if there is a decrease in value, the related impairment is recognized as a charge against income. No impairment of goodwill has been recognized in the accompanying financial statements.

Income Taxes

Income taxes include taxes currently payable plus deferred taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to the temporary differences in the financial reporting basis and tax basis of assets and liabilities and operating loss carry-forwards. Deferred tax assets are measured using enacted tax rates expected to apply to taxable income in the years in which these temporary differences are expected to be recovered or settled.

Liabilities are established for uncertain tax positions expected to be taken in income tax returns when such positions are judged to meet the “more-likely-than-not” threshold based on the technical merits of the positions. Estimated interest and penalties related to uncertain tax penalties are included as a component of other expenses.

Earnings Per Common Share

The Company computes earnings per share which requires presentation of basic and diluted earnings per share. Basic earnings per equivalent Class A common share are computed by dividing net earnings by the weighted-average number of Class A common shares outstanding during each year presented, after the effect of the assumed conversion of Class C common stock to Class A common stock. Diluted earnings per share is computed by dividing net earnings by the weighted-average number of common shares outstanding during the year used to compute basic earnings per share plus dilutive potential incremental shares. Basic and diluted earnings per share amounts have been adjusted retroactively for the effect of annual stock dividends.

Stock Based Compensation

The cost of employee services received in exchange for an award of equity instruments is recognized in the financial statements and is measured based on the fair value on the grant date of the award. The fair value of stock options is calculated using the Black Scholes Option Pricing Model. Stock option compensation expense is recognized over the period during which an employee is required to provide service in exchange for the award and is included in personnel expenses on the consolidated statements of earnings.

Concentration of Credit Risk

For a description of the geographic concentration risk regarding mortgage loans held for investment and real estate held for investment, refer to Note 2 of the Notes to Consolidated Financial Statements.

Advertising

The Company expenses advertising costs as incurred.

Recent Accounting Pronouncements

Accounting Standards Update (“ASU”) No. 2017-01: “Business Combinations (Topic 805): Clarifying the Definition of a Business” – Issued in January 2017, ASU 2017-01 intends to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Under the current implementation guidance in Topic 805, there are three elements of a business: inputs, processes, and outputs. While an integrated set of assets and activities, collectively referred to as a “set,” that is a business usually has outputs, outputs are not required to be present. ASU 2017-01 provides a screen to determine when a set is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. While the Company’s acquisitions have historically been classified as either business combinations or asset acquisitions, certain acquisitions that were classified as business combinations by the Company likely would have been considered asset acquisitions under the new standard. As a result, transaction costs are more likely to be capitalized since the Company expects some of its future acquisitions to be classified as asset acquisitions under this new standard. In addition, goodwill that was previously allocated to businesses that were sold or held for sale will no longer be allocated and written off upon sale if future sales were deemed to be sales of assets and not businesses. ASU 2017-01 was adopted by the Company on January 1, 2018 and it will be applied prospectively to transactions occurring after the adoption date, as applicable.

ASU No. 2016-18: “Statement of Cash Flows (Topic 230): Restricted Cash” – Issued in November 2016, ASU 2016-18 requires restricted cash and cash equivalents to be included with cash and cash equivalents in the consolidated statement of cash flows and disclose the nature of the restrictions on cash and cash equivalents. The Company currently discloses the restrictions on cash and cash equivalents in Note 8 of the Notes to Consolidated Financial Statements and will continue these disclosures. Note 8 also discloses the components of the Company’s restricted assets which includes restricted cash. The Company currently presents changes in restricted cash and cash equivalents under investing activities on the consolidated statements of cash flows. Upon adoption of ASU 2016-18, the Company will amend the presentation in the consolidated statements of cash flows to include the restricted cash and cash equivalents with cash and cash equivalents and will retrospectively reclassify all periods presented. After adoption, net changes in restricted cash will no longer be presented under investing activities on the consolidated statements of cash flows. ASU 2016-18 was adopted by the Company on January 1, 2018. The adoption of this standard does not impact the Company’s total cash and cash equivalents but is a change in presentation within the consolidated statements of cash flows.

ASU No. 2016-13: “Financial Instruments – Credit Losses (Topic 326)” – Issued in June 2016, ASU 2016-13 amends guidance on reporting credit losses for assets held at amortized cost basis (such as mortgage loans and held to maturity debt securities) and available for sale debt securities. For assets held at amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available for sale debt securities, credit losses should be measured in a manner similar to current GAAP, however Topic 326 will require that credit losses be presented as an allowance rather than as a write-down. The new authoritative guidance will be effective for the Company on January 1, 2020. The Company is in the process of evaluating the potential impact of this standard.

ASU No. 2016-02: “Leases (Topic 842)” - Issued in February 2016, ASU 2016-02 supersedes the requirements in Accounting Standards Codification (“ASC”) Topic 840, “Leases”, and was issued to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The new authoritative guidance will be effective for the Company on January 1, 2019. The Company is in the process of evaluating the potential impact of this standard, which is not expected to be material to the Company’s results of operations but will have an effect on the balance sheet presentation for leased assets and obligations.

ASU No. 2016-01: “Financial Instruments – Overall (Topic 825-10)” – Issued in January 2016, ASU 2016-01 changes the accounting for non-consolidated equity investments that are not accounted for under the equity method of accounting by requiring changes in fair value to be recognized in income. Under current guidance, changes in fair value for investments of this nature are recognized in accumulated other comprehensive income as a component of stockholders’ equity. Additionally, ASU 2016-01 simplifies the impairment assessment of equity investments without readily determinable fair values; requires entities to use the exit price when estimating the fair value of financial instruments; and modifies various presentation disclosure requirements for financial instruments. The Company holds equity securities classified as available for sale securities that are currently measured at fair value with changes in fair value recognized through other comprehensive income. Upon adoption of ASU 2016-01 the Company will be required to recognize changes in the fair value of these equity securities through earnings, thus increasing the volatility of the Company’s earnings. However, adoption of this standard will not significantly affect the Company’s comprehensive income or stockholders’ equity. The Company adopted this standard on January 1, 2018 using the modified retrospective approach with the cumulative effect of the adoption made to the balance sheet as of the date of adoption. Thus, the adoption will result in a reclassification of the related accumulated net unrealized gains of $603,170 included in accumulated other comprehensive income as of December 31, 2017 to retained earnings. See Note 2 and 8 for more details regarding equity securities available for sale and Note 18 for more details regarding the components of accumulated other comprehensive income.

ASU No. 2014-09: “Revenue from Contracts with Customers (Topic 606)” - Issued in May 2014, ASU 2014-09 supersedes the revenue recognition requirements in ASC Topic 605, “Revenue Recognition”. ASU 2014-09 clarifies the principles for recognizing revenue in order to improve comparability of revenue recognition practices across entities and industries. ASU 2014-09 provides guidance intended to assist in the identification of contracts with customers and separate performance obligations within those contracts, the determination and allocation of the transaction price to those identified performance obligations and the recognition of revenue when a performance obligation has been satisfied. ASU 2014-09 also requires disclosures regarding the nature, amount, timing, and uncertainty of revenues and cash flows from contracts with customers. Premiums and related fees from insurance contracts and mortgage banking revenues are excluded from the scope of this new guidance.

The Company analyzed the potential impact of this standard by reviewing its revenue sources and its current policies and procedures to identify potential differences that would result from applying the requirements of this new standard to its contracts with customers. Through the review process, the Company identified and made changes to its processes, systems, and controls to support recognition and disclosure under the new standard.

The Company also evaluated the potential changes from adopting the new standard on its future reporting and disclosures. The Company also reviewed its contracts with customers and developed a process for the systematic application of the standard to existing undelivered performance obligations at adoption. Additionally, the Company is implementing a new software program to accommodate recognition and disclosure requirements under the new standard. Finally, the Company identified and designed additional controls around new processes that were implemented upon adoption of the new standard.

The Company’s revenues from contracts with customers that are subject to ASU 2014-09 include revenues on mortuary and cemetery contracts, which is less than 5% of the Company’s total revenues. The recognition and measurement of these items is not expected to change as a result of the Company’s adoption of ASU 2014-09 and thus the adoption of ASU 2014-09 will not significantly impact the Company’s results of operations or financial position. The Company adopted this standard on January 1, 2018 using a modified retrospective approach. No cumulative effect adjustment will be made to beginning retained earnings.

The standard primarily impacts the manner in which the Company recognizes a) certain nonrefundable up-front fees and b) incremental costs to acquire new pre-need funeral trust contracts and pre-need and at-need cemetery contracts (i.e., selling costs). The nonrefundable fees will continue to be deferred and recognized as revenue when the underlying goods and services are delivered to the customer. The incremental selling costs will continue to be deferred and amortized by specific identification to the delivery of the underlying goods and services. Additionally, the amounts due from customers for undelivered performance obligations on cancelable pre-need contracts represent contract assets, which are required to be netted with deferred pre-need cemetery and mortuary contract revenues, instead of receivables on the Company’s consolidated balance sheets.

The Company has reviewed other recent accounting pronouncements and has determined that they will not significantly impact the Company’s results of operations or financial position.

2) Investments

12 Months Ended

Dec. 31, 2017

Notes

2) Investments

The Company’s investments as of December 31, 2017 are summarized as follows:

	Amortized Cost	Gross Unrealized Gains	Gross Unrealized Losses	Estimated Fair Value
December 31, 2017:
Fixed maturity securities held to maturity carried at amortized cost:
U.S. Treasury securities and obligations of U.S. Government agencies	$ 54,077,069	$ 211,824	$ (579,423)	$ 53,709,470

Obligations of states and political subdivisions	5,843,176	112,372	(71,013)	5,884,535

Corporate securities including public utilities	158,350,727	14,336,452	(1,007,504)	171,679,675

Mortgage-backed securities	9,503,016	210,652	(162,131)	9,551,537

Redeemable preferred stock	623,635	49,748	(191)	673,192

Total fixed maturity securities held to maturity	$ 228,397,623	$ 14,921,048	$ (1,820,262)	$ 241,498,409

Equity securities available for sale at estimated fair value:

Common stock:

Industrial, miscellaneous and all other	$ 6,002,931	$ 667,593	$ (632,669)	$ 6,037,855

Total securities available for sale	$ 6,002,931	$ 667,593	$ (632,669)	$ 6,037,855

Mortgage loans held for investment at amortized cost:
Residential	$ 102,527,111
Residential construction	50,157,533
Commercial	54,954,865
Less: Unamortized deferred loan fees, net	(1,659,828)
Less: Allowance for loan losses	(1,768,796)

Total mortgage loans held for investment	$ 204,210,885

Real estate held for investment - net of accumulated depreciation:
Residential	$ 68,329,917
Commercial	72,968,789

Total real estate held for investment	$ 141,298,706

Other investments and policy loans at amortized cost:
Policy loans	$ 6,531,352
Insurance assignments	36,301,739
Federal Home Loan Bank stock	689,400
Other investments	3,219,622
Less: Allowance for doubtful accounts	(846,641)

Total policy loans and other investments	$ 45,895,472

Accrued investment income	$ 3,644,077

Total investments	$ 629,484,618

The Company’s investments as of December 31, 2016 are summarized as follows:

	Amortized Cost	Gross Unrealized Gains	Gross Unrealized Losses	Estimated Fair Value
December 31, 2016:
Fixed maturity securities held to maturity carried at amortized cost:
U.S. Treasury securities and obligations of U.S. Government agencies	$ 4,475,065	$ 249,028	$ (66,111)	$ 4,657,982

Obligations of states and political subdivisions	6,017,225	153,514	(133,249)	6,037,490

Corporate securities including public utilities	164,375,636	10,440,989	(3,727,013)	171,089,612

Mortgage-backed securities	9,488,083	221,400	(280,871)	9,428,612

Redeemable preferred stock	623,635	13,418	-	637,053

Total fixed maturity securities held to maturity	$ 184,979,644	$ 11,078,349	$ (4,207,244)	$ 191,850,749

Equity securities available for sale at estimated fair value:

Common stock:

Industrial, miscellaneous and all other	$ 10,323,238	$ 447,110	$ (859,092)	$ 9,911,256

Total securities available for sale	$ 10,323,238	$ 447,110	$ (859,092)	$ 9,911,256

Mortgage loans held for investment at amortized cost:
Residential	$ 58,593,622
Residential construction	40,800,117
Commercial	51,536,622
Less: Unamortized deferred loan fees, net	(190,846)
Less: Allowance for loan losses	(1,748,783)

Total mortgage loans held for investment	$ 148,990,732

Real estate held for investment - net of accumulated depreciation:
Residential	$ 76,191,985
Commercial	68,973,936

Total real estate held for investment	$ 145,165,921

Other investments and policy loans at amortized cost:
Policy loans	$ 6,694,148
Insurance assignments	33,548,079
Promissory notes	48,797
Federal Home Loan Bank stock	662,100
Other investments	1,765,752
Less: Allowance for doubtful accounts	(1,119,630)

Total policy loans and other investments	$ 41,599,246

Short-term investments at amortized cost	$ 27,560,040

Accrued investment income	$ 2,972,596

Total investments	$ 561,179,435

Fixed Maturity Securities

The following tables summarize unrealized losses on fixed maturities securities, which are carried at amortized cost, at December 31, 2017 and 2016. The unrealized losses were primarily related to interest rate fluctuations. The tables set forth unrealized losses by duration with the fair value of the related fixed maturity securities:

	Unrealized Losses for Less than Twelve Months	Fair Value	Unrealized Losses for More than Twelve Months	Fair Value	Total Unrealized Loss	Fair Value
At December 31, 2017
U.S. Treasury Securities and Obligations
of U.S. Government Agencies	$ 532,010	$ 51,606,699	$ 47,413	$ 643,380	$ 579,423	$ 52,250,079
Obligations of States and
Political Subdivisions	296	214,882	70,717	2,225,021	71,013	2,439,903
Corporate Securities	167,786	11,551,865	839,718	13,193,258	1,007,504	24,745,123
Mortgage and other
asset-backed securities	56,756	2,516,660	105,375	1,676,494	162,131	4,193,154
Redeemable preferred stock	191	11,421	-	-	191	11,421
Total unrealized losses	$ 757,039	$ 65,901,527	$ 1,063,223	$ 17,738,153	$ 1,820,262	$ 83,639,680

		Fair Value		Fair Value	Total Unrealized Loss	Fair Value
At December 31, 2016
U.S. Treasury Securities and Obligations
of U.S. Government Agencies	$ 66,111	$ 1,342,088	$ -	$ -	$ 66,111	$ 1,342,088
Obligations of States and
Political Subdivisions	133,249	3,686,856	-	-	133,249	3,686,856
Corporate Securities	1,728,312	41,796,016	1,998,701	12,969,135	3,727,013	54,765,151
Mortgage and other
asset-backed securities	176,715	4,176,089	104,156	940,278	280,871	5,116,367
Total unrealized losses	$ 2,104,387	$ 51,001,049	$ 2,102,857	$ 13,909,413	$ 4,207,244	$ 64,910,462

There were 141 securities with fair value of 97.9% of amortized cost at December 31, 2017. There were 250 securities with fair value of 93.9% of amortized cost at December 31, 2016. During the years ended December 31, 2017 and 2016, an other than temporary decline in fair value resulted in the recognition of credit losses on fixed maturity securities of $493,371 and $100,000, respectively.

On a quarterly basis, the Company evaluates its fixed maturity securities held to maturity. This evaluation includes a review of current ratings by the National Association of Insurance Commissions (“NAIC”). Securities with a rating of 1 or 2 are considered investment grade and are not reviewed for impairment. Securities with ratings of 3 to 5 are evaluated for impairment. Securities with a rating of 6 are automatically determined to be impaired and are written down. The evaluation involves an analysis of the securities in relation to historical values, interest payment history, projected earnings and revenue growth rates as well as a review of the reason for a downgrade in the NAIC rating. Based on the analysis of a security that is rated 3 to 5, a determination is made whether the security will likely make interest and principal payments in accordance with the terms of the financial instrument. If it is unlikely that the security will meet contractual obligations, the loss is considered to be other than temporary, the security is written down to the new anticipated market value and an impairment loss is recognized. Impairment losses are treated as credit losses as the Company holds fixed maturity securities to maturity unless the underlying conditions have changed in the financial instrument to require an impairment.

The fair values of fixed maturity securities are based on quoted market prices, when available. For fixed maturity securities not actively traded, fair values are estimated using values obtained from independent pricing services, or in the case of private placements, are estimated by discounting expected future cash flows using a current market value applicable to the coupon rate, credit and maturity of the investments.

The amortized cost and estimated fair value of fixed maturity securities at December 31, 2017, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because certain borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized	Estimated Fair
	Cost	Value
Held to Maturity:
Due in 1 year	$ 20,125,883	$ 20,299,016
Due in 2-5 years	69,849,085	70,873,975
Due in 5-10 years	49,842,819	52,444,399
Due in more than 10 years	78,453,185	87,656,290
Mortgage-backed securities	9,503,016	9,551,537
Redeemable preferred stock	623,635	673,192
Total held to maturity	$ 228,397,623	$ 241,498,409

The Company is a member of the Federal Home Loan Bank of Des Moines (“FHLB”). In June through August of 2017, the Company purchased a total of $50,000,000, par value, of United States Treasury fixed maturity securities that it deposited with the FHLB. These securities will generate interest income for the Company and will be available to use as collateral on any cash borrowings from the FHLB. As of December 31, 2017, the Company did not have any outstanding amounts owed to FHLB and the estimated maximum borrowing capacity was $47,252,871.

Equity Securities

The following tables summarize unrealized losses on equity securities that were carried at estimated fair value based on quoted trading prices at December 31, 2017 and 2016. The unrealized losses were primarily the result of decreases in fair value in the retail, industrial and energy sectors. The tables set forth unrealized losses by duration and number of investment positions, together with the fair value of the related equity securities available for sale in a loss position:

	Unrealized Losses for Less than Twelve Months	No. of Investment Positions	Unrealized Losses for More than Twelve Months	No. of Investment Positions	Total Unrealized Losses
At December 31, 2017
Industrial, miscellaneous and all other	$ 213,097	98	$ 419,572	81	$ 632,669
Total unrealized losses	$ 213,097	98	$ 419,572	81	$ 632,669
Fair Value	$ 847,718		$ 1,329,213		$ 2,176,931

At December 31, 2016
Industrial, miscellaneous and all other	$ 215,563	124	$ 643,529	104	$ 859,092
Total unrealized losses	$ 215,563	124	$ 643,529	104	$ 859,092
Fair Value	$ 2,063,144		$ 1,685,874		$ 3,749,018

The average market value of the equity securities available for sale was 77.5% and 81.4% of the original investment as of December 31, 2017 and 2016, respectively. The intent of the Company is to retain equity securities for a period of time sufficient to allow for the recovery in fair value. However, the Company may sell equity securities during a period in which the fair value has declined below the amount of the original investment. In certain situations, new factors, including changes in the business environment, can change the Company’s previous intent to continue holding a security. During the years ended December 31, 2017 and 2016, an other than temporary decline in the market value resulted in the recognition of an impairment loss on equity securities of $280,968 and $170,358, respectively.

On a quarterly basis, the Company reviews its investment in equity securities that are in a loss position. The first step is to identify securities by lots which are currently carried on the books at a value greater than the 52-week high. These securities are further evaluated by reviewing current market value in relation to historical value, price earnings ratios, projected earnings, revenue growth rates, negative company related events, market sector comparisons and analyst reports to determine if a security has a reasonable expectation to return to the current cost basis. Based on the analysis, a determination is made whether a security will likely recover from the loss position within a reasonable period of time. If it is unlikely that the security will recover from the loss position, the loss is considered to be other than temporary, the security is written down to a restated value and an impairment loss is recognized.

The fair values for equity securities are based on quoted market prices.

There were no investments, aggregated by issuer, in excess of 10% of shareholders’ equity (before net unrealized gains and losses on equity securities available for sale) at December 31, 2017, other than investments issued or guaranteed by the United States Government.

The Company’s net realized gains and losses from sales, calls, and maturities, and other than temporary impairments from investments and other assets for the years ended December 31 are summarized as follows:

	2017	2016
Fixed maturity securities held
to maturity:
Gross realized gains	$ 179,182	$ 389,558
Gross realized losses	(893,567)	(132,124)
Other than temporary impairments	(493,371)	(100,000)

Equity securities available for sale:
Gross realized gains	166,950	221,817
Gross realized losses	(76,475)	(61,242)
Other than temporary impairments	(280,968)	(170,358)

Other assets:
Gross realized gains	3,410,076	349,252
Gross realized losses	(5,734,648)	(943,648)
Total	$ (3,722,821)	$ (446,745)

The net realized gains and losses on the sale of securities are recorded on the trade date, and the cost of the securities sold is determined using the specific identification method.

The carrying amount for disposals of securities classified as held to maturity was $2,932,961 and $2,380,027, for the years ended December 31, 2017 and 2016, respectively. The net realized loss and gain related to these disposals was $463,892 and $155,346, for the years ended December 31, 2017 and 2016, respectively. Although the intent is to buy and hold a bond to maturity, the Company will sell a bond prior to maturity if conditions have changed within the entity that issued the bond to increase the risk of default to an unacceptable level.

Major categories of net investment income for the years ended December 31, are as follows:

	2017	2016
Fixed maturity securities held to maturity	$ 10,626,400	$ 9,083,858
Equity securities available for sale	245,490	270,942
Mortgage loans held for investment	12,498,578	11,398,986
Real estate held for investment	11,703,947	10,969,828
Policy loans	488,561	498,444
Insurance assignments	13,289,818	11,876,836
Other investments	105,218	25,122
Short-term investments	543,528	268,988
Gross investment income	49,501,540	44,393,004
Investment expenses	(14,438,572)	(12,414,403)
Net investment income	$ 35,062,968	$ 31,978,601

Net investment income includes net investment income earned by the restricted assets of the cemeteries and mortuaries of $501,227 and $419,360 for the years ended December 31, 2017 and 2016, respectively.

Net investment income on real estate consists primarily of rental revenue received under short-term leases.

Investment expenses consist primarily of depreciation, property taxes, operating expenses of real estate and an estimated portion of administrative expenses relating to investment activities.

Securities on deposit for regulatory authorities as required by law amounted to $9,264,977 and $9,269,121 at December 31, 2017 and 2016, respectively. The restricted securities are included in various assets under investments on the accompanying consolidated balance sheets.

Real Estate Held for Investment

The Company continues to strategically deploy resources into real estate to match the income and yield durations of its primary obligations. The sources for these real estate assets come through its various business segments in the form of acquisition, development and mortgage foreclosures. The Company reports real estate held for investment pursuant to the accounting policy discussed in Note 1 of the Notes to Consolidated Financial Statements.

Commercial Real Estate Held for Investment

The Company owns and manages commercial real estate assets as a means of generating investment income. These assets are acquired in accordance with the Company’s goals and objectives for risk-adjusted returns. Due diligence is conducted on each asset using internal and third-party reports. Geographic locations and asset classes of the investment activity is determined by senior management under the direction of the Board of Directors.

The Company employs full-time employees to attend to the day-to-day operations of those assets within the greater Salt Lake area and close surrounding markets. The Company utilizes third-party property managers when the geographic boundary does not warrant full-time staff or through strategic lease-up periods. The Company generally looks to acquire assets in regions that are high growth regions for employment and population and in assets that provide operational efficiencies.

The Company currently owns and operates 12 commercial properties in 8 states. These properties include industrial warehouses, office buildings, retail centers, undeveloped land and includes the redevelopment and expansion of its corporate campus in Salt Lake City, Utah. The Company does use debt in strategic cases to leverage established yields or to acquire a higher quality or different class of asset.

The aggregated net ending balance of commercial real estate that serves as collateral for bank borrowings was approximately $64,704,000 and $51,507,000 as of December 31, 2017 and 2016, respectively. The associated bank loan carrying values totaled approximately $40,994,000 and $21,831,000 as of December 31, 2017 and 2016, respectively.

During the years ended December 31, 2017 and 2016, the Company recorded impairment losses on commercial real estate held for investment of $5,350,967 and $900,000, respectively. These impairment losses are included in realized gains (losses) on investment and other assets on the consolidated statements of earnings.

The Company’s investment in commercial real estate for the years ended December 31, are summarized as follows:

	Net Ending Balance				Total Square Footage
	2017		2016		2017	2016
Arizona	$ 4,000	(1)	$ 450,538	(1)	-	16,270
Arkansas	96,169		100,369		3,200	3,200
Kansas	7,200,000		12,450,297		222,679	222,679
Louisiana	493,197		518,700		7,063	7,063
Mississippi	3,725,039		3,818,985		33,821	33,821
New Mexico	7,000	(1)	7,000	(1)	-	-
Texas	335,000		3,734,974		23,470	23,470
Utah	61,108,384	(2)	47,893,073		433,244	433,244

	$ 72,968,789		$ 68,973,936		723,477	739,747

(1) Includes Vacant Land
(2) Includes 53rd Center completed in July 2017

Residential Real Estate Held for Investment

The Company owns a portfolio of residential homes primarily as a result of loan foreclosures. The strategy has been to lease these homes to produce cash flow, and allow time for the economic fundamentals to return to the various markets. As an orderly and active market for these homes returns, the Company has the option to dispose or to continue and hold them for cash flow and acceptable returns.

The Company established Security National Real Estate Services (“SNRE”) to manage the residential portfolio. SNRE cultivates and maintains the preferred vendor relationships necessary to manage costs and quality of work performed on the portfolio of homes across the country.

As of December 31, 2017, SNRE manages 105 residential properties in 9 states across the United States which includes a newly constructed apartment complex, Dry Creek at East Village (“Dry Creek”), in Sandy Utah. See Note 25 regarding the disposition of Dry Creek.

The net ending balance of residential real estate that serves as collateral for a bank borrowing was approximately $34,431,000 and $35,798,000, as of December 31, 2017 and 2016, respectively. The associated bank loan carrying value was approximately $26,773,000 and $27,377,000 as of December 31, 2017 and 2016, respectively.

The net ending balance of foreclosed residential real estate included in residential real estate held for investment is $33,372,228 and $39,856,434 as of December 31, 2017 and 2016, respectively.

The Company’s investment in residential real estate for the years ended December 31, are summarized as follows:

	Net Ending Balance
	2017	2016
Arizona	$ 217,105	$ 742,259
California	5,463,878	5,848,389
Colorado	-	364,489
Florida	7,000,684	8,327,355
Hawaii	712,286	-
Ohio	10,000	-
Oklahoma	17,500	46,658
Texas	509,011	1,091,188
Utah	54,113,272	59,485,466
Washington	286,181	286,181
	$ 68,329,917	$ 76,191,985

Real Estate Owned and Occupied by the Company

The primary business units of the Company occupy a portion of the real estate owned by the Company. Currently, the Company occupies nearly 70,000 square feet, or 10% of the overall commercial real estate holdings.

As of December 31, 2017, real estate owned and occupied by the company is summarized as follows:

Location	Business Segment	Approximate Square Footage	Square Footage Occupied by the Company
5300 South 360 West, Salt Lake City, UT (1)	Corporate Offices, Life Insurance and Cemetery/Mortuary Operations	36,000	100%
5201 Green Street, Salt Lake City, UT	Mortgage Operations	36,899	34%
1044 River Oaks Dr., Flowood, MS	Life Insurance Operations	21,521	27%
121 West Election Road, Draper, UT	Mortgage Sales	78,978	19%

(1) This asset is included in property and equipment on the consolidated balance sheets

Mortgage Loans Held for Investment

The Company reports mortgage loans held for investment pursuant to the accounting policy discussed in Note 1 of the Notes to Consolidated Financial Statements.

Mortgage loans consist of first and second mortgages. The mortgage loans bear interest at rates ranging from 2.0 % to 10.5%, maturity dates range from three months to 30 years and are secured by real estate. Concentrations of credit risk arise when a number of mortgage loan debtors have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions. Although the Company has a diversified mortgage loan portfolio consisting of residential mortgages, commercial loans and residential construction loans and requires collateral on all real estate exposures, a substantial portion of its debtors’ ability to honor obligations is reliant on the economic stability of the geographic region in which the debtors do business. At December 31, 2017, the Company has 42%, 27%, 12%, 14% and 5% of its mortgage loans from borrowers located in the states of Utah, California, Florida, Texas and Nevada, respectively. The mortgage loan balances on the consolidated balance sheet are reflected net of an allowance for loan losses of $1,768,796 and $1,748,783 at December 31, 2017 and 2016, respectively.

The Company establishes a valuation allowance for credit losses in its portfolio. The following is a summary of the allowance for loan losses as a contra-asset account for the periods presented:

Allowance for Credit Losses and Recorded Investment in Mortgage Loans Held for Investment
Years Ended December 31

	Commercial	Residential	Residential Construction	Total
2017
Allowance for credit losses:
Beginning balance	$ 187,129	$ 1,461,540	$ 100,114	$ 1,748,783
Charge-offs	-	(351,357)	(64,894)	(416,251)
Provision	-	436,264	-	436,264
Ending balance	$ 187,129	$ 1,546,447	$ 35,220	$ 1,768,796

Ending balance: individually evaluated for impairment	$ -	$ 237,560	$ -	$ 237,560

Ending balance: collectively evaluated for impairment	$ 187,129	$ 1,308,887	$ 35,220	$ 1,531,236

Mortgage loans:
Ending balance	$ 54,954,865	$ 102,527,111	$ 50,157,533	$ 207,639,509

Ending balance: individually evaluated for impairment	$ -	$ 4,923,552	$ 461,834	$ 5,385,386

Ending balance: collectively evaluated for impairment	$ 54,954,865	$ 97,603,559	$ 49,695,699	$ 202,254,123

2016
Allowance for credit losses:
Beginning balance	$ 187,129	$ 1,560,877	$ 100,114	$ 1,848,120
Charge-offs	-	(420,135)	-	(420,135)
Provision	-	320,798	-	320,798
Ending balance	$ 187,129	$ 1,461,540	$ 100,114	$ 1,748,783

Ending balance: individually evaluated for impairment	$ -	$ 187,470	$ -	$ 187,470

Ending balance: collectively evaluated for impairment	$ 187,129	$ 1,274,070	$ 100,114	$ 1,561,313

Mortgage loans:
Ending balance	$ 51,536,622	$ 58,593,622	$ 40,800,117	$ 150,930,361

Ending balance: individually evaluated for impairment	$ 202,992	$ 2,916,538	$ 64,895	$ 3,184,425

Ending balance: collectively evaluated for impairment	$ 51,333,630	$ 55,677,084	$ 40,735,222	$ 147,745,936

The following is a summary of the aging of mortgage loans held for investment for the periods presented.

Age Analysis of Past Due Mortgage Loans Held for Investment
Years Ended December 31

	30-59 Days Past Due	60-89 Days Past Due	Greater Than 90 Days 1)	In Process of Foreclosure 1)	Total Past Due	Current	Total Mortgage Loans	Allowance for Loan Losses	Unamortized deferred loan fees, net	Net Mortgage Loans
2017
Commercial	$ 1,943,495	$ -	$ -	$ -	$ 1,943,495	$ 53,011,370	$ 54,954,865	$ (187,129)	$ (67,411)	$ 54,700,325
Residential	6,613,479	495,347	3,591,333	1,332,219	12,032,378	90,494,733	102,527,111	(1,546,447)	(1,164,130)	99,816,534
Residential Construction	-	-	461,834	-	461,834	49,695,699	50,157,533	(35,220)	(428,287)	49,694,026

Total	$ 8,556,974	$ 495,347	$ 4,053,167	$ 1,332,219	$ 14,437,707	$ 193,201,802	$ 207,639,509	$ (1,768,796)	$ (1,659,828)	$ 204,210,885

2016
Commercial	$ -	$ -	$ -	$ 202,992	$ 202,992	$ 51,333,630	$ 51,536,622	$ (187,129)	$ (155,725)	$ 51,193,768
Residential	964,960	996,779	1,290,355	1,626,183	4,878,277	53,715,345	58,593,622	(1,461,540)	(35,121)	57,096,961
Residential Construction	-	-	64,895	-	64,895	40,735,222	40,800,117	(100,114)	-	40,700,003

Total	$ 964,960	$ 996,779	$ 1,355,250	$ 1,829,175	$ 5,146,164	$ 145,784,197	$ 150,930,361	$ (1,748,783)	$ (190,846)	$ 148,990,732

1) There was not any interest income recognized on loans past due greater than 90 days or in foreclosure.

Impaired Mortgage Loans Held for Investment

Impaired mortgage loans held for investment include loans with a related specific valuation allowance or loans whose carrying amount has been reduced to the expected collectible amount because the impairment has been considered other than temporary. The recorded investment in and unpaid principal balance of impaired loans along with the related loan specific allowance for losses, if any, for each reporting period and the average recorded investment and interest income recognized during the time the loans were impaired were as follows:

Impaired Loans
Years Ended December 31
	Recorded Investment	Unpaid Principal Balance	Related Allowance	Average Recorded Investment	Interest Income Recognized
2017
With no related allowance recorded:
Commercial	$ -	$ -	$ -	$ 365,220	$ -
Residential	3,322,552	3,322,552	-	3,290,094	-
Residential construction	461,834	461,834	-	277,232	-

With an allowance recorded:
Commercial	$ -	$ -	$ -	$ -	$ -
Residential	1,601,000	1,601,000	237,560	1,350,115	-
Residential construction	-	-	-	-	-

Total:
Commercial	$ -	$ -	$ -	$ 365,220	$ -
Residential	4,923,552	4,923,552	237,560	4,640,209	-
Residential construction	461,834	461,834	-	277,232	-

2016
With no related allowance recorded:
Commercial	$ 202,992	$ 202,992	$ -	$ 202,992	$ -
Residential	-	-	-	-	-
Residential construction	64,895	64,895	-	79,082	-

With an allowance recorded:
Commercial	$ -	$ -	$ -	$ -	$ -
Residential	2,916,538	2,916,538	374,501	3,001,850	-
Residential construction	-	-	-	-	-

Total:
Commercial	$ 202,992	$ 202,992	$ -	$ 202,992	$ -
Residential	2,916,538	2,916,538	374,501	3,001,850	-
Residential construction	64,895	64,895	-	79,082	-

Credit Risk Profile Based on Performance Status

The Company’s mortgage loan held for investment portfolio is monitored based on performance of the loans. Monitoring a mortgage loan increases when the loan is delinquent or earlier if there is an indication of impairment. The Company defines non-performing mortgage loans as loans 90 days or greater delinquent or on non-accrual status.

The Company’s performing and non-performing mortgage loans held for investment were as follows:

Mortgage Loans Held for Investment Credit Exposure
Credit Risk Profile Based on Payment Activity
Years Ended December 31

	Commercial		Residential		Residential Construction		Total
	2017	2016	2017	2016	2017	2016	2017	2016

Performing	$ 54,954,865	$ 51,333,630	$ 97,603,559	$ 55,677,084	$ 49,695,699	$ 40,735,222	$ 202,254,123	$ 147,745,936
Non-performing	-	202,992	4,923,552	2,916,538	461,834	64,895	5,385,386	3,184,425

Total	$ 54,954,865	$ 51,536,622	$ 102,527,111	$ 58,593,622	$ 50,157,533	$ 40,800,117	$ 207,639,509	$ 150,930,361

Non-Accrual Mortgage Loans Held for Investment

Once a loan is past due 90 days, it is the policy of the Company to end the accrual of interest income on the loan and write off any income that had been accrued. Payments received for loans on a non-accrual status are recognized on a cash basis. Interest income recognized from any payments received for loans on a non-accrual status was immaterial. Accrual of interest resumes if a loan is brought current. Interest not accrued on these loans totals $204,083 and $172,000 as of December 31, 2017 and 2016, respectively.

The following is a summary of mortgage loans held for investment on a non-accrual status for the periods presented.

	Mortgage Loans on Non-accrual Status
	Years Ended December 31
	2017	2016
Commercial	$ -	$ 202,992
Residential	4,923,552	2,916,538
Residential construction	461,834	64,895
Total	$ 5,385,386	$ 3,184,425

Principal Amounts Due

The amortized cost and contractual payments on mortgage loans held for investment by category as of December 31, 2017 are shown below. Expected principal payments may differ from contractual obligations because certain borrowers may elect to pay off mortgage obligations with or without early payment penalties.

		Principal	Principal	Principal
		Amounts	Amounts	Amounts
		Due in	Due in	Due
	Total	1 Year	2-5 Years	Thereafter
Residential	$ 102,527,111	$ 5,454,776	$ 40,995,574	$ 56,076,761
Residential Construction	50,157,533	42,763,420	7,394,113	-
Commercial	54,954,865	36,690,847	15,674,563	2,589,455
Total	$ 207,639,509	$ 84,909,043	$ 64,064,250	$ 58,666,216

3) Loans Held For Sale

12 Months Ended

Dec. 31, 2017

Notes

3) Loans Held For Sale

3) Loans Held for Sale

Fair Value Option Election

ASC No. 825, “Financial Instruments”, allows for the option to report certain financial assets and liabilities at fair value initially and at subsequent measurement dates with changes in fair value included in earnings. The option may be applied instrument by instrument, but it is irrevocable. The Company elected the fair value option for loans held for sale originated after July 1, 2017. The Company believes the fair value option most closely aligns the timing of the recognition of gains and costs. These loans are intended for sale and the Company believes that the fair value is the best indicator of the resolution of these loans. Electing fair value also reduces certain timing differences and better matches changes in the fair value of these assets with changes in the fair value of the related derivatives used for these assets.

Interest income is recorded based on the contractual terms of the loan and in accordance with the Company’s policy on mortgage loans held for investment and is included in mortgage fee income on the consolidated statement of earnings. None of these loans are 90 or more days past due nor on nonaccrual status as of December 31, 2017. See Note 17 of the Notes to Consolidated Financial Statements for additional disclosures regarding loans held for sale.

The following is a summary of the aggregate fair value and the aggregate unpaid principal balance of loans held for sale for the periods presented:

	As of December 31 2017

Aggregate fair value	$ 133,414,188
Unpaid principal balance	129,233,411
Unrealized gain	4,180,777

Mortgage Fee Income

Mortgage fee income consists of origination fees, processing fees, interest income and certain other income related to the origination and sale of mortgage loans held for sale.

Major categories of mortgage fee income for loans held for sale for the years ended December 31, are as follows:

	2017	2016
Loan fees	$ 40,434,686	$ 44,341,501
Interest income	7,089,025	8,004,952
Secondary gains	108,756,613	140,651,103
Change in fair value of loan commitments	(4,812,743)	(862,163)
Change in fair value of loans held for sale	4,180,777	-
Provision for loan loss reserve	(1,851,187)	(2,988,754)
Mortgage fee income	$ 153,797,171	$ 189,146,639

Loan Loss Reserve

When a repurchase demand corresponding to a mortgage loan previously held for sale and sold to a third-party investor is received from a third-party investor, the relevant data is reviewed and captured so that an estimated future loss can be calculated. The key factors that are used in the estimated loss calculation are as follows: (i) lien position, (ii) payment status, (iii) claim type, (iv) unpaid principal balance, (v) interest rate, and (vi) validity of the demand. Other data is captured and is useful for management purposes; the actual estimated loss is generally based on these key factors. The Company conducts its own review upon the receipt of a repurchase demand. In

many instances, the Company is able to resolve the issues relating to the repurchase demand by the third-party investor without having to make any payments to the investor.

The following is a summary of the loan loss reserve which is included in other liabilities and accrued expenses:

	December 31
	2017	2016
Balance, beginning of period	$ 627,733	$ 2,805,900
Provision for current loan originations (1)	1,851,187	2,988,754
Additional provision for loan loss reserve	-	1,700,000
Charge-offs, net of recaptured amounts	92,604	(6,866,921)
Balance, at December 31	$ 2,571,524	$ 627,733

(1) Included in Mortgage fee income on the consolidated statements of earnings.

The Company believes the loan loss reserve represents probable loan losses incurred as of the balance sheet date. Actual loan loss experience could change, in the near-term, from the established reserve based upon claims that could be asserted by third-party investors. The Company believes there is potential to resolve any alleged claims by third-party investors on acceptable terms. If the Company is unable to resolve such claims on acceptable terms, legal action may ensue. In the event of legal action by any third-party investor, the Company believes it has significant defenses to any such action and intends to vigorously defend itself against such action.

- Definition

The entire disclosure for a company's election to apply the fair value option for measurement and reporting of eligible financial assets and liabilities (as defined), as well as certain other eligible items (as defined) included in the statement of financial position, whether such option is elected for a single eligible item or a group of similar eligible items and is in addition to other disclosures concerning fair value which the company may be required to provide. Such disclosure might be expected to include: (1) for items included in the statement of financial position: (a) the reasons for electing a fair value option for each eligible item or group of similar eligible items; (b) if the fair value option is elected for some but not all eligible items within a group of similar eligible items: (i) a description of those similar items and the reasons for partial election and (ii) information of how the group of similar items relates to individual balance sheet line items; (c) for each line item in the statement of financial position that includes an item or items for which the fair value option has been elected: (i) information of how each line item in the statement of financial position relates to major categories of assets and liabilities presented in accordance with other fair value disclosures and (ii) the aggregate carrying amount of ineligible items included in each line item in the balance sheet, if any; (d) the difference between the aggregate fair value and the aggregate unpaid principal balance (assuming contractual principal amounts and fair value option elected) of: (i) loans and long-term receivables (other than securities otherwise reported at fair value) and (ii) long-term debt instruments; (e) for loans held as assets for which the fair value option has been elected: (i) the aggregate fair value of loans that are 90 days or more past due, (ii) if the policy is to recognize interest income separately from other changes in fair value, the aggregate fair value of loans in nonaccrual status, and (iii) the difference between the aggregate fair value and the aggregate unpaid principal balance for loans that are 90 days or more past due, in nonaccrual status, or both; (f) for investments that would have been accounted for under the equity method if the entity had not chosen to apply the fair value option, the information required for such investments, if material either individually or in the aggregate; (2) for items included in the income statement: (a) the amounts of gains and losses from fair value changes included in earnings and in which line in the income statement those gains and losses are reported whether or not combined with gains and losses from items required to be accounted for at fair value; (b) a description of how interest and dividends are measured and where they are reported in the income statement; (c) for loans and other receivables held as assets: (i) the estimated amount of gains or losses included in earnings attributable to changes in instrument-specific credit risk and (ii) how the gains or losses attributable to changes in instrument-specific credit risk were determined; (d) for liabilities with fair values that have been significantly affected during the reporting period by changes in the instrument-specific credit risk: (i) the estimated amount of gains and losses from fair value changes included in earnings that are attributable to changes in the instrument-specific credit risk, (ii) qualitative information about the reasons for those changes, and (iii) how the gains and losses attributable to changes in instrument-specific credit risk were determined; and (3) certain other disclosures as required or determined to be provided.

+ References + Details

4) Receivables

12 Months Ended

Dec. 31, 2017

Notes

4) Receivables

Receivables consist of the following:

	December 31
	2017	2016
Trade contracts	$ 3,608,379	$ 3,410,321
Receivables from sales agents	3,528,703	4,016,393
Held in Escrow – Southern Security	-	107,388
Other	4,851,305	3,231,926
Total receivables	11,988,387	10,766,028
Allowance for doubtful accounts	(1,544,518)	(2,355,482)
Net receivables	$ 10,443,869	$ 8,410,546

- Definition

The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses.

+ References + Details

5) Value of Business Acquired and Goodwill

12 Months Ended

Dec. 31, 2017

Notes

5) Value of Business Acquired and Goodwill

Information with regard to value of business acquired is as follows:

	December 31
	2017	2016
Balance at beginning of year	$ 7,570,300	$ 8,743,773
Value of business acquired	-	-
Imputed interest at 7%	39,767	45,762
Amortization	(1,021,308)	(1,219,235)
Net amortization charged to income	(981,541)	(1,173,473)
Balance at end of year	$ 6,588,759	$ 7,570,300

Presuming no additional acquisitions, net amortization charged to income is expected to approximate $919,000, $854,000, $766,000, $713,000, and $663,000 for the years 2018 through 2022. Actual amortization may vary based on changes in assumptions or experience. As of December 31, 2017, value of business acquired is being amortized over a weighted average life of 6.1 years.

Information with regard to goodwill acquired is as follows:

Goodwill of $2,765,570 is not amortized but tested annually for impairment. The annual impairment tests resulted in no impairment of goodwill.

6) Property and Equipment

12 Months Ended

Dec. 31, 2017

Notes

6) Property and Equipment

The cost of property and equipment is summarized below:

	December 31
	2017	2016
Land and buildings	$ 8,689,302	$ 9,155,665
Furniture and equipment	16,952,404	19,548,521
	25,641,706	28,704,186
Less accumulated depreciation	(17,572,326)	(19,912,664)
Total	$ 8,069,380	$ 8,791,522

Depreciation expense for the years ended December 31, 2017 and 2016 was $2,220,693 and $2,182,724, respectively. During 2017, the Company transferred $643,329 of land from cemetery land and improvements to property and equipment. This transfer is shown as a non cash item on the consolidated statements of cash flows.

7) Bank and Other Loans Payable

12 Months Ended

Dec. 31, 2017

Notes

7) Bank and Other Loans Payable

Bank and other loans payable are summarized as follows:

	December 31
	2017	2016
1.65% above the monthly LIBOR rate note payable in monthly installments of $13,741 including principal and interest, collateralized by real property with a book value of approximately $498,000, paid in full in November 2017.	$ -	$ 147,346

Mark to market of interest rate swaps (discussed below) adjustment, terminated in November 2017	-	3,308

6.50% note payable in monthly installments of $1,702 including principal and interest, collateralized by real property with a book value of approximately $271,000, due October 2041.	246,847	251,072

2.25% above the monthly LIBOR rate (1.56% at December 31, 2017) plus 1/16th of the monthly LIBOR rate note payable in monthly principal payments of $13,167 plus interest, collateralized by real property with a book value of approximately $4,457,000, due September 2021.	2,975,781	3,133,787

3.85% fixed note payable in monthly installments of $85,419 including principal and interest, collateralized by shares of Security National Life Insurance Company stock, due January 2018.	85,419	1,093,349

4.27% fixed note payable in monthly installments of $53,881 including principal and interest, collateralized by shares of Security National Life Insurance Company stock, due November 2021.	2,372,690	2,904,354

4.40% fixed note payable in monthly installments of $46,825 including principal and interest, collateralized by real property with a book value of approximately $11,837,000, due January 2026.	7,712,854	7,927,526

4.329% fixed note payable in monthly installments of $9,775 including principal and interest, collateralized by real property with a book value of approximately $3,004,000, due September 2025.	1,961,573	1,992,056

2.5% above the monthly LIBOR rate (1.56% at December 31, 2017) plus 1/16th of the monthly LIBOR rate construction loan payable, collateralized by real property with a book value of approximately $45,406,000, due August 2019.	28,343,684	8,777,941

2.25% above 90 day LIBOR rate (1.69% at December 31, 2017) note payable in monthly installments of approximately $125,000, collateralized by real property with a book value of approximately $34,431,000, due October 2019.	26,773,058	27,377,114

1 month LIBOR rate (1.56% at December 31, 2017) plus 3% loan purchase agreement with a warehouse line availability of $100,000,000, matures June 2018	61,298,220	76,843,180

1 month LIBOR rate (1.56% at December 31, 2017) plus 3% loan purchase agreement with a warehouse line availability of $100,000,000, matures September 2018	25,538,378	21,578,951

Other loans payable	142,421	110,695
Total bank and other loans	157,450,925	152,140,679

Less current installments	88,437,940	101,177,574
Bank and other loans, excluding current installments	$ 69,012,985	$ 50,963,105

Revolving Lines of Credit

The Company has a $2,000,000 revolving line-of-credit with a bank with interest payable at the prime rate minus .75% (3.75% at December 31, 2017), secured by the capital stock of Security National Life and maturing September 30, 2018, renewable annually. At December 31, 2017, the Company was contingently liable under a standby letter of credit aggregating $625,405, to be used as collateral to cover any contingency related to additional risk assessments pertaining to the Company's captive insurance program and under a standby letter of credit aggregating $48,220 issued as a security deposit to guarantee payment of final bills for electric and gas utility services for a commercial real estate property owned by the Company in Wichita, Kansas. These standby letters of credit will draw on the line of credit if necessary. The Company does not expect any material losses to result from the issuance of the standby letter of credit because claims are not expected to exceed premiums paid. As of December 31, 2017, there were no amounts outstanding under the revolving line-of-credit.

The Company also has a $2,500,000 revolving line-of-credit with a bank with interest payable at the overnight LIBOR rate plus 2.25% (3.68% at December 31, 2017) maturing September 30, 2018. At December 31, 2017, SecurityNational Mortgage was contingently liable under a standby letter of credit aggregating $1,250,000, to be used as collateral to cover any contingency relating to claims filed in states where SecurityNational Mortgage is licensed. This standby letter of credit will draw on the line of credit if necessary. The Company does not expect any material losses to result from the issuance of the standby letters of credit. As of December 31, 2017, there were no amounts outstanding under the revolving line-of-credit.

Mortgage Warehouse Lines of Credit

The Company, through its subsidiary SecurityNational Mortgage, has a $100,000,000 line of credit with Wells Fargo Bank N.A. The agreement charges interest at the 1-Month LIBOR rate plus 3% and matures on June 16, 2018. SecurityNational Mortgage is required to maintain an adjusted tangible net worth of $19,000,000, unrestricted cash of $10,000,000, indebtedness to adjusted tangible net worth of 12:1, liquidity overhead coverage of 1.75:1, and a quarterly gross profit of at least $1.

The Company, through its subsidiary SecurityNational Mortgage, also uses a line of credit with Texas Capital Bank N.A. This agreement with the bank allows SecurityNational Mortgage to borrow up to $100,000,000 for the sole purpose of funding mortgage loans. SecurityNational Mortgage is currently approved to borrow $30,000,000 of the $100,000,000 available. The agreement charges interest at the 1-Month LIBOR rate plus 3% and matures on September 7, 2018. The Company is required to maintain an adjusted tangible net worth of $70,000,000, unrestricted cash of $15,000,000, and no two consecutive quarters with a net loss.

In addition to financial covenants of these agreements, the Company is required to carry insurance policies for errors and omissions and general liability and was in compliance with all debt covenants as of December 31, 2017.

The following tabulation shows the combined maturities of bank and other loans payable:

2018	$ 88,437,940
2019	55,674,420
2020	1,085,699
2021	3,456,607
2022	326,923
Thereafter	8,469,336
Total	$ 157,450,925

Interest expense in 2017 and 2016 was $6,037,332 and $5,111,868, respectively.

8) Cemetery Perpetual Care Trust Investments and Obligation and Restricted Assets

12 Months Ended

Dec. 31, 2017

Notes

8) Cemetery Perpetual Care Trust Investments and Obligation and Restricted Assets

State law requires the Company to pay into endowment care trusts a portion of the proceeds from the sale of certain cemetery property interment rights for cemeteries that have established an endowment care trust. These endowment care trusts are defined as variable interest entities pursuant to GAAP. Also, management has determined that the Company is the primary beneficiary of these trusts, as it absorbs both a majority of the losses and returns associated with the trusts. The Company has consolidated cemetery endowment care trust investments with a corresponding amount recorded as Cemetery Perpetual Care Obligation in the accompanying consolidated balance sheets.

The components of the cemetery perpetual care investments and obligation are as follows:

	December 31
	2017	2016
Cash and cash equivalents	$ 997,498	$ 865,699
Fixed maturity securities, held to maturity, at amortized cost	943,211	885,729
Equity securities, at estimated fair value	682,315	698,202
Participating interests in mortgage loans held for investment with Security National Life	4,128	3,821
Real estate	1,996,411	1,678,434
Note receivables from Cottonwood Mortuary
Singing Hills Cemetery and Memorial Estates
eliminated in consolidation	1,667,621	1,725,714
Total cemetery perpetual care trust investments	6,291,184	5,857,599
Cemetery perpetual care obligation	(3,710,740)	(3,598,580)
Trust investments in excess of trust obligations	$ 2,580,444	$ 2,259,019

The Company has also established certain restricted assets to provide for future merchandise and service obligations incurred in connection with its pre-need sales for its cemetery and mortuary segment.

Restricted cash also represents escrows held for borrowers and investors under servicing and appraisal agreements relating to mortgage loans, funds held by warehouse banks in accordance with loan purchase agreements and funds held in escrow for certain real estate construction development projects. Additionally, the Company elected to fund its medical benefit safe-harbor limit based on 35% of the qualified direct costs for the preceding year, and has included this amount as a component of restricted cash. These restricted cash items are for the Company’s life insurance and mortgage segments.

Restricted assets are summarized as follows:

	December 31
	2017	2016
Cash and cash equivalents (1)	$ 8,188,764	$ 7,089,134
Mutual funds, at estimated fair value	715,952	645,241
Fixed maturity securities, held to maturity, at amortized cost	1,130,088	990,613
Equity securities, at estimated fair value	94,006	91,362
Participating in mortgage loans held for investment with Security National Life	1,701,811	1,575,044
Total	$ 11,830,621	$ 10,391,394

(1) Including cash and cash equivalents of $6,392,283 and $5,292,266 as of December 31, 2017 and 2016, respectively, for the life insurance and mortgage segments.

A surplus note receivable in the amount of $4,000,000 at December 31, 2017 and 2016, from Security National Life, was eliminated in consolidation.

See Notes 1 and 17 for additional information regarding restricted assets.

9) Income Taxes

12 Months Ended

Dec. 31, 2017

Notes

9) Income Taxes

The Company’s income tax liability (benefit) is summarized as follows:

	December 31
	2017	2016
Current	$ (922,754)	$ (1,511,762)
Deferred	18,255,537	25,830,631
Total	$ 17,332,783	$ 24,318,869

Significant components of the Company’s deferred tax (assets) and liabilities are approximately as follows:

	December 31
	2017	2016
Assets
Future policy benefits	$ (6,803,339)	$ (9,719,058)
Loan loss reserve	(697,779)	(288,590)
Unearned premium	(886,706)	(1,519,722)
Available for sale securities	(237,677)	(51,266)
Net operating loss	(631,892)	(1,531,160)
Deferred compensation	(1,600,401)	(2,225,208)
Deposit obligations	(627,193)	(1,033,580)
Other	(276,127)	(3,384,144)
Less: Valuation allowance	-	431,802
Total deferred tax assets	(11,761,114)	(19,320,926)

Liabilities
Deferred policy acquisition costs	13,700,093	18,150,517
Basis difference in property and equipment	6,110,374	10,749,036
Value of business acquired	1,383,639	2,573,902
Deferred gains	6,978,067	9,290,123
Trusts	1,066,438	1,599,657
Tax on unrealized appreciation	778,040	2,788,322
Total deferred tax liabilities	30,016,651	45,151,557
Net deferred tax liability	$ 18,255,537	$ 25,830,631

The valuation allowance relates to differences between recorded deferred tax assets and liabilities and ultimate anticipated realization. For the year ended December 31, 2017, the Company has not recorded a valuation allowance and, given additional operating results of First Guaranty Insurance Company (“First Guaranty”) that was acquired in July 2016, the Company has determined that the $431,802 valuation allowance previously recorded in 2016 related to First Guaranty is no longer needed.

The Company paid $581,556 and $2,667,918 in income taxes for the years ended December 31, 2017 and 2016, respectively.

The Company’s income tax expense (benefit) is summarized as follows for the years ended December 31:

	2017	2016
Current
Federal	$ 934,647	$ 1,138,196
State	236,559	245,764
	1,171,206	1,383,960

Deferred
Federal	(7,811,030)	5,686,651
State	59,002	443,993
	(7,752,028)	6,130,644

Total	$ (6,580,822)	$ 7,514,604

The reconciliation of income tax expense (benefit) at the U.S. federal statutory rates is as follows:

	2017	2016
Computed expense at statutory rate	$ 2,560,918	$ 6,699,099
State tax expense, net of federal tax benefit	195,070	455,240
Change in valuation allowance	(431,802)	431,802
Change in tax law	(8,973,722)	-
Other, net	68,714	(71,537)
Income tax expense (benefit)	$ (6,580,822)	$ 7,514,604

The Company’s overall effective tax rate for the years ended December 31, 2017 and 2016 was (87.4%) and 38.1%, respectively. During the fourth quarter of 2017, the Company recorded a tax benefit of $8,973,722 related to the enactment of the Tax Cuts and Jobs Act (“the Tax Act”) signed into law December 22, 2017. The benefit is primarily related to a re-measurement of deferred tax assets and liabilities taking the Tax Act’s newly enacted tax rate into account. The Company’s overall effective tax rate for the year ended December 31, 2017 without the impact of the Tax Act would be 31.8%. The Company’s effective tax rates differ from the U.S. federal statutory rate of 34% largely due to the Tax Act change, its provision for state income taxes and a reduction in the valuation allowance related to the prior acquisition of First Guaranty that decreased the effective income tax rate when compared to the prior year.

At December 31, 2017, the Company had no significant unrecognized tax benefits. As of December 31, 2017, the Company does not expect any material changes to the estimated amount of unrecognized tax benefits in the next twelve months. Federal and state income tax returns for 2014 through 2017 are subject to examination by taxing authorities.

Net Operating Losses and Tax Credit Carryforwards:

Year of Expiration
2019	$ 229,201
2020	114,601
2021	17,101
2022	-
2023	-
Thereafter up through 2037	2,323,615

	$ 2,684,518

10) Reinsurance, Commitments and Contingencies

12 Months Ended

Dec. 31, 2017

Notes

10) Reinsurance, Commitments and Contingencies

Reinsurance

The Company follows the procedure of reinsuring risks in excess of a specified limit, which ranged from $25,000 to $100,000 during the years 2017 and 2016. The Company is liable for these amounts in the event such reinsurers are unable to pay their portion of the claims. The Company has also assumed insurance from other companies having insurance in force amounting to approximately $106,000,000 and approximately $110,000,000 at December 31, 2017 and 2016, respectively.

Mortgage Loan Loss Settlements

Future loan losses can be extremely difficult to estimate. However, management believes that the Company’s reserve methodology and its current practice of property preservation allow it to estimate potential losses on loans sold. The additional amounts expensed for loan losses (above the standard reserve for new loans sold) in years ended December 31, 2017 and 2016 were $-0- and $1,700,000, respectively, and the charge has been included in selling, general and administrative expenses. The estimated liability for indemnification losses is included in other liabilities and accrued expenses and, as of December 31, 2017 and 2016, the balances were $2,572,000 and $628,000, respectively.

Mortgage Loan Loss Litigation

Lehman Brothers Litigation – Delaware and New York

In January 2014, Lehman Brothers Holdings, Inc. (“Lehman Holdings”) entered into a settlement with the Federal National Mortgage Association (Fannie Mae) concerning the mortgage loan claims that Fannie Mae had asserted against Lehman Holdings, which were based on alleged breaches of certain representations and warranties by Lehman Holdings in the mortgage loans it had sold to Fannie Mae. Lehman Holdings acquired these loans from Aurora Bank, FSB, formerly known as Lehman Brothers Bank, FSB, which in turn purchased the loans from certain residential mortgage loan originators, including SecurityNational Mortgage. A settlement based on similar circumstances was entered into between Lehman Holdings and the Federal Home Loan Mortgage Corporation (Freddie Mac) in February 2014.

Lehman Holdings filed a motion in May 2014 with the U.S. Bankruptcy Court of the Southern District of New York to require the mortgage loan originators, including SecurityNational Mortgage, to engage in non-binding mediations of their alleged indemnification claims against the mortgage loan originators relative to the Fannie Mae and Freddie Mac settlements with Lehman Holdings. The mediation was not successful in resolving any issues between SecurityNational Mortgage and Lehman Holdings.

On January 26, 2016, SecurityNational Mortgage filed a declaratory judgment action against Lehman Holdings in the Superior Court for the State of Delaware. In the Delaware action, SecurityNational Mortgage asserted its right

to obtain a declaration of rights in that there are allegedly millions of dollars in dispute with Lehman Holdings pertaining to approximately 136 loans. SecurityNational Mortgage sought a declaratory judgment as to its rights as it contends that it has no liability to Lehman Holdings as a result of Lehman Holdings’ settlements with Fannie Mae and Freddie Mac. Lehman Holdings filed a motion in the Delaware court seeking to stay or dismiss the declaratory judgment action. On August 24, 2016, the Court ruled that it would exercise its discretion to decline jurisdiction over the action and granted Lehman Holdings’ motion to dismiss.

On February 3, 2016, Lehman Holdings filed an adversary proceeding against approximately 150 mortgage loan originators, including SecurityNational Mortgage, in the U.S. Bankruptcy Court of the Southern District of New York seeking a declaration of rights similar in nature to the declaratory judgment that SecurityNational Mortgage sought in its Delaware lawsuit, and for damages relating to the alleged obligations of the defendants under the indemnification provisions of the alleged agreements, in amounts to be determined at trial, including interest, attorneys’ fees and costs incurred by Lehman Holdings in enforcing the obligations of the defendants. No response was required to be filed relative to the Complaint or the Amended Complaint dated March 7, 2016. A Case Management Order was entered on November 1, 2016.

On December 27, 2016, pursuant to the Case Management Order, Lehman Holdings filed a Second Amended Complaint against SecurityNational Mortgage, which eliminates the declaratory judgment claim but retains a similar claim for damages as in the Complaint. The case is presently in a motion period. Many of the defendants, including SecurityNational Mortgage, filed a joint motion in the case asserting that the Bankruptcy Court does not have subject matter jurisdiction concerning the matter and that venue is improper. Lehman Holdings’ response memorandum was filed on May 31, 2017 and a reply memorandum of the defendants filing the motion was filed on July 14, 2017. A hearing date for the motion has not been set. No Answer to the Second Amended Complaint is required to be filed by SecurityNational Mortgage pending further order of the Court. SecurityNational Mortgage denies that it has any liability to Lehman Holdings and intends to vigorously protect and defend its position.

Non-Cancelable Leases

The Company leases office space and equipment under various non-cancelable agreements, with remaining terms up to five years. Minimum lease payments under these non-cancelable operating leases as of December 31, 2017, are approximately as follows:

Years Ending
December 31
2018	$ 4,825,139
2019	3,371,267
2020	1,705,632
2021	847,504
2022	26,357
Total	$ 10,775,899

Total rent expense related to non-cancelable operating leases for the years ended December 31, 2017 and 2016 was approximately $7,374,000 and $7,879,000, respectively.

Other Contingencies and Commitments

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, 2017, the Company’s commitments were approximately $78,967,000, for these loans of which $50,158,000 had been funded. The Company will advance funds 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 5.50% to 8.00% per annum. Maturities range between six and eighteen months.

The Company belongs to a captive insurance group for certain casualty insurance, worker compensation and liability programs. Insurance reserves are maintained relative to these programs. The level of exposure from catastrophic events is limited by the purchase of stop-loss and aggregate liability reinsurance coverage. When estimating the insurance liabilities and related reserves, the captive insurance management considers a number of factors, which include historical claims experience, demographic factors, severity factors and valuations provided by independent third-party actuaries. If actual claims or adverse development of loss reserves occurs and exceed these estimates, additional reserves may be required. The estimation process contains uncertainty since captive insurance management must use judgment to estimate the ultimate cost that will be incurred to settle reported claims and unreported claims for incidents incurred but not reported as of the balance sheet date.

The Company is a defendant in various other legal actions arising from the normal conduct of business. Management believes that none of the actions will have a material effect on the Company’s financial position or results of operations. Based on management’s assessment and legal counsel’s representations concerning the likelihood of unfavorable outcomes, no amounts have been accrued for the above claims in the consolidated financial statements.

The Company is not a party to any other material legal proceedings outside the ordinary course of business or to any other legal proceedings, which, if adversely determined, would have a material adverse effect on its financial condition or results of operations.

11) Retirement Plans

12 Months Ended

Dec. 31, 2017

Notes

11) Retirement Plans

The Company and its subsidiaries have a noncontributory Employee Stock Ownership Plan (“ESOP”) for all eligible employees. Eligible employees are primarily those with more than one year of service, who work in excess of 1,000 hours per year. Contributions, which may be in cash or stock of the Company, are determined annually by the Board of Directors.

The Company’s contributions are allocated to eligible employees based on the ratio of each eligible employee’s compensation to total compensation for all eligible employees during each year. The Company did not make any contributions for the years ended December 31, 2017 and 2016. At December 31, 2017, the ESOP held 518,517 shares of Class A and 278,904 shares of Class C common stock of the Company. All shares held by the ESOP have been allocated to the participating employees and all shares held by the ESOP are considered outstanding for purposes of computing earnings per share.

The Company has three 401(k) savings plans covering all eligible employees, as defined above, which includes employer participation in accordance with the provisions of Section 401(k) of the Internal Revenue Code. The plans allow participants to make pretax contributions up to a maximum of $18,000 and $18,000 for the years 2017 and 2016, respectively or the statutory limits.

Beginning January 1, 2008, the Company elected to be a “Safe Harbor” Plan for its matching 401(k) contributions. The Company matched 100% of up to 3% of an employee’s total annual compensation and matched 50% of 4% to 5% of an employee’s annual compensation. The match was in Company stock. The Company’s contribution for the years ended December 31, 2017 and 2016 was $1,534,861 and $1,429,962, respectively under the “Safe Harbor” plan.

In 2001, the Company’s Board of Directors adopted a Deferred Compensation Plan. Under the terms of the Plan, the Company will provide deferred compensation for a select group of management or highly compensated employees, within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended. The Board has appointed a Committee of the Company to be the Plan Administrator and to determine the employees who are eligible to participate in the plan. The employees who participate may elect to defer a portion of their compensation into the plan. The Company may contribute into the plan at the discretion of the Company’s Board of Directors. The Company did not make any contributions for 2017 and 2016.

On July 16, 2004, the Company entered into an employment agreement with Scott M. Quist, the Chairman of the Board, President and Chief Executive Officer. The agreement is effective as of December 4, 2003 and has a five-year term, but the Company has agreed to renew the agreement on December 4, 2008 and 2013 for additional five-year terms, provided Mr. Quist performs his duties with usual and customary care and diligence. Under the terms of the agreement, Mr. Quist is to devote his full time to the Company serving as its Chairman of the Board, President, and Chief Executive Officer at not less than his current salary and benefits. The Company also agrees to maintain a group term life insurance policy of not less than $1,000,000 on Mr. Quist’s life and a whole life insurance policy in the amount of $500,000 on Mr. Quist’s life. In the event of disability, Mr. Quist’s salary would be continued for up to five years at 75% of its current level.

In the event of a sale or merger of the Company and Mr. Quist is not retained in his current position, the Company would be obligated to continue Mr. Quist’s current compensation and benefits for seven years following the merger or sale. The agreement further provides that Mr. Quist is entitled to receive annual retirement benefits beginning (i) one month from the date of his retirement (to commence no sooner than age 65), (ii) five years following complete disability, or (iii) upon termination of his employment without cause. These retirement benefits are to be paid for a period of twenty years in annual installments in the amount equal to 75% of his then current rate of compensation. However, in the event that Mr. Quist dies prior to receiving all retirement benefits there under, the remaining benefits are to be paid to his heirs. The Company expensed $755,302 and $511,443 during the years ended December 31, 2017 and 2016, respectively, to cover the present value of anticipated retirement benefits under the employment agreement. The liability accrued is $4,531,670 and $3,776,368 as of December 31, 2017 and 2016, respectively and is included in Other liabilities and accrued expenses on the consolidated balance sheets.

On December 31, 2015, J. Lynn Beckstead, Jr., who served as Vice President of Mortgage Operations and President of SecurityNational Mortgage, retired from the Company. Under the terms of the employment agreement that the Company, through its wholly owned subsidiary, SecurityNational Mortgage, had entered into with Mr. Beckstead, Mr. Beckstead is entitled to receive retirement benefits from the Company for a period of ten years in an amount equal to 50% of his current rate of compensation at the time of his retirement, which was $267,685 for the year ended December 31, 2015. Such retirement payments are paid monthly during the ten-year period. In determining Mr. Beckstead’s current rate of compensation, stock option grants and incentive or similar bonuses are not included. In the event Mr. Beckstead dies prior to receiving all of his retirement benefits under his employment agreement, the remaining benefits will be made to his heirs. The Company expensed $-0- and $148,557 during the years ended December 31, 2017 and 2016, respectively, to cover the present value of the retirement benefits under the employment agreement. The company paid $133,843 and $133,842 in retirement compensation to Mr. Beckstead during the years ended December 31, 2017 and 2016, respectively. The liability accrued was $975,434 and $1,109,277 as of December 31, 2017 and 2016, respectively and is included in Other liabilities and accrued expenses on the consolidated balance sheets.

12) Capital Stock

12 Months Ended

Dec. 31, 2017

Notes

12) Capital Stock

The Company has one class of preferred stock of $1.00 par value, 5,000,000 shares authorized, of which none are issued. The preferred stock is non-voting.

The Company has two classes of common stock with shares outstanding, Class A common shares and Class C common shares. Class C shares have 10 votes per share on all matters except for the election of one third of the directors who are elected solely by the Class A shares. Class C shares are convertible into Class A shares at any time on a one to one ratio. The decrease in treasury stock was the result of treasury stock being used to fund the company’s 401(k) Plans.

Stockholders of both Class A and Class C common stock have received 5% stock dividends in the years 1990 through 2017, as authorized by the Company’s Board of Directors.

The Company has Class B common stock of $1.00 par value, 5,000,000 shares authorized, of which none are issued. Class B shares are non-voting stock except to any proposed amendment to the Articles of Incorporation which would affect Class B common stock.

The following table summarizes the activity in shares of capital stock for the two-year period ended December 31, 2017:

	Class A	Class C
Balance at December 31, 2015	13,109,100	1,709,640

Exercise of stock options	42,634	104,975
Stock dividends	657,919	96,967
Conversion of Class C to Class A	9,353	(9,353)

Balance at December 31, 2016	13,819,006	1,902,229

Exercise of stock options	8,183	103,402
Stock dividends	692,635	99,496
Conversion of Class C to Class A	15,753	(15,753)

Balance at December 31, 2017	14,535,577	2,089,374

Earnings per share amounts have been retroactively adjusted for the effect of annual stock dividends. In accordance with GAAP, the basic and diluted earnings per share amounts were calculated as follows:

	2017	2016
Numerator:
Net earnings	$ 14,112,934	$ 12,188,627

Denominator:
Denominator for basic earnings
per share-weighted-average shares	15,972,329	15,575,632

Effect of dilutive securities
Employee stock options	313,601	336,960
Dilutive potential common shares	313,601	336,960

Denominator for diluted earnings
per share-adjusted weighted-average
shares and assumed conversions	16,285,930	15,912,592

Basic earnings per share	$0.88	$0.78
Diluted earnings per share	$0.87	$0.77

For the years ended December 31, 2017 and 2016, there were 589,822 and 334,425 of anti-dilutive employee stock option shares, respectively, that were not included in the computation of diluted net earnings per common share as their effect would be anti-dilutive.

13) Stock Compensation Plans

12 Months Ended

Dec. 31, 2017

Notes

13) Stock Compensation Plans

The Company has four fixed option plans (the “2003 Plan”, the “2006 Director Plan”, the “2013 Plan” and the “2014 Director Plan”). Compensation expense for options issued of $395,603 and $343,577 has been recognized under these plans for the years ended December 31, 2017 and 2016, respectively, and is included in personnel expenses on the consolidated statements of earnings. As of December 31, 2017, the total unrecognized compensation expense related to the options issued in December 2017 was $213,770, which is expected to be recognized over the vesting period of one year.

The fair value of each option granted is estimated on the date of grant using the Black Scholes Option Pricing Model. The Company estimates the expected life of the options using the simplified method. Future volatility is estimated based upon the weighted historical volatility of the Company’s Class A common stock over a period equal to the expected life of the options. The risk-free interest rate for the expected life of the options is based upon the Federal Reserve Board’s daily interest rates in effect at the time of the grant.

The following table summarizes the assumptions used in estimating the fair value of each option granted along with the weighted-average fair value of the options granted:

			Assumptions
Grant Date	Plan	Weighted-Average Fair Value of Each Option (1)	Expected Dividend Yield	Underlying stock FMV	Weighted-Average Volatility	Weighted-Average Risk-Free Interest Rate	Weighted-Average Expected Life (years)
December 1, 2017	All Plans	$ 1.20	5%	$ 4.80	41.07%	2.07%	4.35

December 21, 2016	2013 Plan	$ 2.17	5%	$ 6.62	54.42%	1.99%	5.31
December 7, 2016	2014 Director Plan	$ 2.41	5%	$ 7.36	54.60%	1.93%	5.31
December 2, 2016	2013 Plan	$ 1.89	5%	$ 6.68	47.05%	1.78%	4.33
December 2, 2016	2014 Director Plan	$ 1.89	5%	$ 6.68	47.05%	1.78%	4.33

Activity of the stock option plans is summarized as follows:
	Number of Class A Shares	Weighted Average Exercise Price	Number of Class C Shares	Weighted Average Exercise Price
Outstanding at December 31, 2015	618,261	$ 3.89	577,436	$ 3.54
Adjustment for the effect of stock dividends	35,346		26,491
Granted	133,500		80,000
Exercised	(42,634)		(127,629)
Cancelled	(2,500)		-

Outstanding at December 31, 2016	741,973	$ 4.33	556,298	$ 4.52
Adjustment for the effect of stock dividends	40,978		24,934
Granted	124,500		70,000
Exercised	(8,182)		(103,402)
Cancelled	(18,843)		(24,227)

Outstanding at December 31, 2017	880,426	$ 4.35	523,603	$ 5.24

Exercisable at end of year	749,701	$ 4.22	450,103	$ 5.31

Available options for future grant	421,241		165,638

Weighted average contractual term of options
outstanding at December 31, 2017	6.62 years		3.45 years

Weighted average contractual term of options
exercisable at December 31, 2017	6.55 years		2.38 years

Aggregated intrinsic value of options outstanding
at December 31, 2017 (1)	$915,293		$204,015

Aggregated intrinsic value of options exercisable
at December 31, 2017 (1)	$904,898		$189,315

(1) The Company used a stock price of $5.00 as of December 31, 2017 to derive intrinsic value.

The total intrinsic value (which is the amount by which the fair value of the underlying stock exceeds the exercise price of an option on the exercise date) of stock options exercised during the years ended December 31, 2017 and 2016 was $611,126 and $670,959, respectively.

14) Statutory Financial Information and Dividend Limitations

12 Months Ended

Dec. 31, 2017

Notes

14) Statutory Financial Information and Dividend Limitations

The Company’s insurance subsidiaries prepare their statutory-basis financial statements in conformity with accounting practices prescribed or permitted by the insurance department of the applicable state of domicile. Prescribed statutory accounting practices include a variety of publications of the NAIC, as well as state laws, regulations and general administrative rules. Permitted statutory accounting practices encompass all accounting practices not so prescribed.

All states require domiciled insurance companies to prepare statutory-basis financial statements in conformity with the NAIC Accounting Practices and Procedures Manual, subject to any deviations prescribed or permitted by the applicable insurance commissioner and/or director. Statutory accounting practices differ from GAAP primarily since they require charging policy acquisition and certain sales inducement costs to expense as incurred, establishing life insurance reserves based on different actuarial assumptions, and valuing certain investments and establishing deferred taxes on a different basis.

Statutory net income and capital and surplus of the Company’s insurance subsidiaries, determined in accordance with statutory accounting practices prescribed or permitted by insurance regulatory authorities are as follows:

	Net Income		Capital and Surplus
	2017	2016	2017	2016
Amounts by insurance subsidiary:

Security National Life Insurance Company	$(3,025,616)	$ 2,601,408	$ 36,281,485	$ 36,789,358

First Guaranty Insurance Company	1,437,963	174,562	4,583,346	4,091,847

Memorial Insurance Company of America	36	460	1,081,799	1,081,319

Southern Security Life Insurance Company, Inc.	72	889	1,591,070	1,592,440

Trans-Western Life Insurance Company	2,597	1,203	502,930	500,333

Total	$(1,584,948)	$ 2,778,522	$ 44,040,630	$ 44,055,297

The Utah, Arkansas, Louisiana, Mississippi and Texas Insurance Departments impose minimum risk-based capital (RBC) requirements that were developed by the NAIC on insurance enterprises. The formulas for determining the RBC specify various factors that are applied to financial balances or various levels of activity based on the perceived degree of risk. Regulatory compliance is determined by a ratio (the Ratio) of the enterprise’s regulatory total adjusted capital, as defined by the NAIC, to its authorized control level, as defined by the NAIC. Enterprises below specific trigger points or ratios are classified within certain levels, each of which requires specified corrective action. The life insurance subsidiaries have a combined weighted Ratio that is greater than the first level of regulatory action as of December 31, 2017.

Generally, the net assets of the life insurance subsidiaries available for transfer to the Company are limited to the amounts of the life insurance subsidiaries net assets, as determined in accordance with statutory accounting practices, which were $44,040,630 at December 31, 2017. These amounts exceed minimum statutory capital requirements; however, payments of such amounts as dividends are subject to approval by regulatory authorities.

Under the Utah Insurance Code, Security National Life Insurance Company is permitted to pay a stockholder dividend to the Company as long as the Company provides the Utah Insurance Commissioner (the “Utah Commissioner”) with at least 30 days notice and the aggregate amount of all such dividends in any 12 month period does not exceed the lesser of: (i) 10% of its surplus to policyholders as of the end of the immediately preceding calendar year, or (ii) net gain from operations, not including realized capital gains, for the immediately preceding calendar year, not including pro rata distributions of the Company’s own securities. In determining whether a dividend is extraordinary, the Company may include carryforward net income from the previous two calendar years, excluding realized capital gains less dividends paid in the second and immediately preceding calendar years. Security National Life Insurance Company will be permitted to pay a dividend to the Company in excess of the lesser of such two amounts only if it files notice of its intention to declare such a dividend and the amount thereof with the Utah Commissioner and the Utah Commissioner either approves the distribution of the dividend or does not disapprove the distribution within 30 days of its filing. In all cases, a dividend may not be paid that would reduce the insurer’s total adjusted capital below the insurer’s company action level risk-based capital, as defined for statutory reporting purposes. No amounts are available to be paid as dividends in the next 12 months because Security National Life Insurance Company had a net statutory loss for the immediately preceding calendar year.

Under the Louisiana Insurance Code, First Guaranty Insurance Company is permitted to pay a stockholder dividend to Security National Life as long as First Guaranty Insurance Company’s capital has been (i) fully paid in cash, (ii) is unimpaired, (iii) has a surplus beyond its capital stock and (iv) has a surplus beyond its minimum required surplus. In 2017, First Guaranty Insurance Company paid to Security National Life a cash dividend of $1,000,000. Amounts still available to be paid as dividends at December 31, 2017 totaled approximately $683,000.

- Definition

Tabular disclosure of how the entity's reporting under GAAP as of the balance sheet date differs from the results based on prescribed and permitted accounting practices of the state or country of domicile in which a relevant statutory filing is made, or differences in results based on the National Association of Insurance Commissioners (NAIC) prescribed practices, or a combination thereof. Describes the accounting practices used and the related monetary effect on statutory surplus, net income, and risk-based capital. If an insurance enterprise's risk-based capital would have triggered a regulatory event had it not used a permitted practice, that fact is disclosed in the financial statements. Permitted statutory accounting practices include practices not prescribed but allowed by the domiciliary state insurance department regulatory authority.

+ References + Details

15) Business Segment Information

12 Months Ended

Dec. 31, 2017

Notes

15) Business Segment Information

Description of Products and Services by Segment

The Company has three reportable business segments: life insurance, cemetery and mortuary, and mortgage. The Company’s life insurance segment consists of life insurance premiums and operating expenses from the sale of insurance products sold by the Company’s independent agency force and net investment income derived from investing policyholder and segment surplus funds. The Company’s cemetery and mortuary segment consists of revenues and operating expenses from the sale of at-need cemetery and mortuary merchandise and services at its mortuaries and cemeteries, pre-need sales of cemetery spaces after collection of 10% or more of the purchase price and the net investment income from investing segment surplus funds. The Company’s mortgage segment consists of fee income and expenses from the originations of residential mortgage loans and interest earned and interest expenses from warehousing pre-sold loans before the funds are received from financial institutional investors.

Measurement of Segment Profit or Loss and Segment Assets

The accounting policies of the reportable segments are the same as those described in the Significant Accounting Principles. Intersegment revenues are recorded at cost plus an agreed upon intercompany profit, and are eliminated upon consolidation.

Factors Management Used to Identify the Enterprise’s Reportable Segments

The Company’s reportable segments are business units that are managed separately due to the different products provided and the need to report separately to the various regulatory jurisdictions. The Company regularly reviews the quantitative thresholds and other criteria to determine when other business segments may need to be reported.

	2017
	Life	Cemetery/		Intercompany
	Insurance	Mortuary	Mortgage	Eliminations	Consolidated
Revenues:
From external sources:
Revenue from customers	$ 70,412,476	$ 12,657,117	$ 153,797,171	$ -	$ 236,866,764
Net investment income	34,068,565	445,663	548,740	-	35,062,968
Realized gains (losses) on
investments and other assets	(3,871,309)	186,335	736,492	-	(2,948,482)
Other than temporary impairments	(774,339)	-	-	-	(774,339)
Other revenues	856,094	97,602	7,765,483	-	8,719,179
Intersegment revenues:
Net investment income	5,987,731	422,623	392,083	(6,802,437)	-
Total revenues	106,679,218	13,809,340	163,239,969	(6,802,437)	276,926,090
Expenses:
Death and other policy benefits	36,095,018	-	-	-	36,095,018
Increase in future policy benefits	23,622,750	-	-	-	23,622,750
Amortization of deferred policy and preneed acquisition costs and
value of business acquired	8,157,456	322,794	-	-	8,480,250
Depreciation	484,349	401,564	1,334,780	-	2,220,693
General, administrative and
other costs:
Intersegment	315,588	184,853	505,707	(1,006,148)	-
Provision for loan losses	-	-	-	-	-
Costs related to funding mortgage
loans	-	-	8,663,223	-	8,663,223
Other	30,632,307	10,689,813	142,952,592	-	184,274,712
Interest expense:
Intersegment	445,520	181,793	5,168,976	(5,796,289)	-
Other	2,218,956	330,211	3,488,165	-	6,037,332
Total benefits and expenses	101,971,944	12,111,028	162,113,443	(6,802,437)	269,393,978
Earnings before income taxes	$ 4,707,274	$ 1,698,312	$ 1,126,526	$ -	$ 7,532,112
Income tax benefit (expense)	6,400,669	(606,293)	786,446	-	6,580,822
Net earnings	$ 11,107,943	$ 1,698,312	$ 1,912,972	$ -	$ 14,112,934

Identifiable assets	$ 858,068,899	$ 95,097,729	$ 161,051,531	$ (134,810,675)	$ 979,407,484

Goodwill	$ 2,765,570	$ -	$ -	$ -	$ 2,765,570

	2016
	Life	Cemetery/		Intercompany
	Insurance	Mortuary	Mortgage	Eliminations	Consolidated
Revenues:
From external sources:
Revenue from customers	$ 64,501,017	$ 12,267,640	$ 189,146,639	$ -	$ 265,915,296
Net investment income	31,019,594	312,494	646,513	-	31,978,601
Realized gains (losses) on
investments and other assets	(277,040)	211,429	(110,776)	-	(176,387)
Other than temporary impairments	(270,358)	-	-	-	(270,358)
Other revenues	632,260	88,676	6,166,813	-	6,887,749
Intersegment revenues:
Net investment income	7,119,692	691,876	327,778	(8,139,346)	-
Total revenues	102,725,165	13,572,115	196,176,967	(8,139,346)	304,334,901
Expenses:
Death and other policy benefits	33,387,380	-	-	-	33,387,380
Increase in future policy benefits	21,322,195	-	-	-	21,322,195
Amortization of deferred policy and preneed acquisition costs and
value of business acquired	7,647,097	356,078	-	-	8,003,175
Depreciation	596,827	390,362	1,195,535	-	2,182,724
General, administrative and
other costs:
Intersegment	261,119	148,025	219,974	(629,118)	-
Provision for loan losses	-	-	1,700,000	-	1,700,000
Costs related to funding mortgage
loans	-	-	9,191,488	-	9,191,488
Other	29,478,156	10,524,535	163,730,148	1	203,732,840
Interest expense:
Intersegment	519,959	651,046	6,339,224	(7,510,229)	-
Other	1,654,264	282,878	3,174,726	-	5,111,868
Total benefits and expenses	94,866,997	12,352,924	185,551,095	(8,139,346)	284,631,670
Earnings before income taxes	$ 7,858,168	$ 1,219,191	$ 10,625,872	$ -	$ 19,703,231
Income tax expense	(3,451,292)	-	(4,063,312)	-	(7,514,604)
Net earnings	$ 4,406,876	$ 1,219,191	$ 6,562,560	$ -	$ 12,188,627

Identifiable assets	$ 818,140,804	$ 99,611,263	$ 172,778,387	$ (140,874,459)	$ 949,655,995

Goodwill	$ 2,765,570	$ -	$ -	$ -	$ 2,765,570

Expenditures for long-lived assets	$ 532,958	$ 723,445	$ 2,310,108	$ -	$ 3,566,511

16) Related Party Transactions

12 Months Ended

Dec. 31, 2017

Notes

16) Related Party Transactions

The Company’s Board of Directors has a written procedure, which requires disclosure to the Board of any material interest or any affiliation on the part of any of its officers, directors or employees that is in conflict or may be in conflict with the interests of the Company. The Company and its Board of Directors is unaware of any related party transactions that require disclosure as of December 31, 2017.

17) Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2017

Notes

17) Fair Value of Financial Instruments

GAAP defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. GAAP also specifies a fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. Fair value measurements are classified under the following hierarchy:

Level 1: Financial assets and financial liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that the Company can access.

Level 2: Financial assets and financial liabilities whose values are based on the following:

a) Quoted prices for similar assets or liabilities in active markets;

b) Quoted prices for identical or similar assets or liabilities in non-active markets; or

c) Valuation models whose inputs are observable, directly or indirectly, for substantially the full term of the asset or liability.

Level 3: Financial assets and financial liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs may reflect the Company’s estimates of the assumptions that market participants would use in valuing the financial assets and financial liabilities.

The Company utilizes a combination of third-party valuation service providers, brokers, and internal valuation models to determine fair value.

The following methods and assumptions were used by the Company in estimating the fair value disclosures related to significant financial instruments:

The items shown under Level 1 and Level 2 are valued as follows:

Securities Available for Sale and Held to Maturity: The fair values of investments in fixed maturity and equity securities along with methods used to estimate such values are disclosed in Note 2 of the Notes to Consolidated Financial Statements.

Restricted Assets: A portion of these assets include mutual funds, equity securities and fixed maturity securities that have quoted market prices that are used to determine fair value. Also included are cash and cash equivalents and participations in mortgage loans held for investment.

Cemetery Endowment Care Trust Investments: A portion of these assets include equity securities and fixed maturity securities that have quoted market prices that are used to determine fair value. Also included are cash and cash equivalents, participations in mortgage loans held for investment and real estate.

Call and Put Options: The Company uses quoted market prices to value its call and put options.

Additionally, there were no transfers between Level 1 and Level 2 in the fair value hierarchy.

The items shown under Level 3 are valued as follows:

Loans Held for Sale, at Fair Value: The Company elected the fair value option for all loans held for sale originated after July 1, 2017. The fair value is based on quoted market prices, when available. When a quoted market price is not readily available, the Company uses the market price from its last sale of similar assets.

Loan Commitments and Forward Sale Commitments: The Company’s mortgage segment enters into loan commitments with potential borrowers and forward sale commitments to sell loans to third-party investors. The Company also uses a hedging strategy for these transactions. A loan commitment binds the Company to lend funds to a qualified borrower at a specified interest rate and within a specified period of time, generally up to 30 days after issuance of the loan commitment. Loan commitments are defined to be derivatives under GAAP and are recognized at fair value on the consolidated balance sheets with changes in their fair values recorded in current earnings.

The Company estimates the fair value of a loan commitment based on the change in estimated fair value of the underlying mortgage loan, quoted MBS prices, estimates of the fair value of mortgage servicing rights, and an estimate of the probability that the mortgage loan will fund within the terms of the commitment. The change in fair value of the underlying mortgage loan is measured from the date the loan commitment is issued. Following issuance, the value of a mortgage loan commitment can be either positive or negative depending upon the change in value of the underlying mortgage loans. 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.

Interest Rate Swaps: Management considers interest rate swap instruments to be an effective cash flow hedge against the variable interest rate on bank borrowings since the interest rate swap mirrors the term of the note payable and expires on the maturity date of the bank loan it hedges. Interest rate swaps are derivative financial instruments carried at their fair value, which is derived from a model that factors in current market assumptions about future interest rates.

Impaired Mortgage Loans Held for Investment: The Company believes that the fair value of these nonperforming loans will approximate the unpaid principal balance expected to be recovered based on the fair value of the underlying collateral. For residential and commercial properties, the collateral value is estimated by obtaining an independent appraisal. The appraisal typically considers area comparables and property condition as well as potential rental income that could be generated (particularly for commercial properties). For residential construction loans, the collateral is typically incomplete, so fair value is estimated as the replacement cost using data from Marshall and Swift, a provider of building cost information to the real estate construction.

Real Estate Held for Investment: The Company believes that in an orderly market, fair value will approximate the replacement cost of a home and the rental income provides a cash flow stream for investment analysis. The Company believes the highest and best use of the properties are as income producing assets since it is the Company’s intent to hold the properties as rental properties, matching the income from the investment in rental properties with the funds required for future estimated policy claims.

It should be noted that for replacement cost, when determining the fair value of mortgage properties, the Company uses Marshall and Swift, a provider of building cost information to the real estate construction industry. For the investment analysis, the Company used market data based upon its real estate operation experience and projected the present value of the net rental income over seven years. The Company also considers area comparables and property condition when determining fair value.

In addition to this analysis performed by the Company, the Company depreciates Real Estate Held for Investment. This depreciation reduces the book value of these properties and lessens the exposure to the Company from further deterioration in real estate values.

Mortgage Servicing Rights: The Company initially recognizes MSRs at their estimated fair values derived from the net cash flows associated with the servicing contracts, where the Company assumes the obligation to service the loan in the sale transaction. The precise fair value of MSRs cannot be readily determined because MSRs are not actively traded in stand-alone markets. Considerable judgment is required to estimate the fair values of these assets and the exercise of such judgment can significantly affect the Company’s earnings.

The following table summarizes Level 1, 2 and 3 financial assets and financial liabilities measured at fair value on a recurring basis by their classification in the consolidated balance sheet at December 31, 2017.

	Total	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Assets accounted for at fair value on a recurring basis
Common stock	$ 6,037,855	$ 6,037,855	$ -	$ -
Total securities available for sale	$ 6,037,855	$ 6,037,855	$ -	$ -

Loans held for sale	133,414,188			133,414,188
Restricted assets (1)	809,958	809,958	-	-
Cemetery perpetual care trust investments (1)	682,315	682,315	-	-
Derivatives - loan commitments (2)	2,032,782	-	-	2,032,782

Total assets accounted for at fair value on a recurring basis	$ 9,562,910	$ 7,530,128	$ -	$ 2,032,782

Liabilities accounted for at fair value on a recurring basis
Derivatives - call options (3)	$ (64,689)	$ (64,689)	$ -	$ -
Derivatives - put options (3)	(20,568)	(20,568)	-	-
Derivatives - loan commitments (3)	(36,193)	-	-	(36,193)

Total liabilities accounted for at fair value on a recurring basis	$ (121,450)	$ (85,257)	$ -	$ (36,193)

(1) Mutual funds and equity securities
(2) Included in other assets on the consolidated balance sheets
(3) Included in other liabilities and accrued expenses on the consolidated balance sheets

For Level 3 assets and liabilities measured at fair value on a recurring basis as of December 31, 2017, the significant unobservable inputs used in the fair value measurements were as follows:

			Significant	Range of Inputs
	Fair Value at	Valuation	Unobservable	Minimum	Maximum	Weighted
	12/31/2017	Technique	Input(s)	Value	Value	Average
Loans held for sale	$ 133,414,188	Market approach	Investor contract pricing as a percentage of unpaid principal balance	100.0%	110.5%	102.8%

Derivatives - loan commitments (net)	1,996,589	Market approach	Fall-out factor	1.0%	99.0%	19.0%
			Initial-Value	N/A	N/A	N/A
			Servicing	151 bps	382 bps	275 bps

Following is a summary of changes in the consolidated balance sheet line items measured using level 3 inputs:

	Net Derivatives Loan Commitments	Bank Loan Interest Rate Swaps	Loans Held for Sale

Balance - December 31, 2016, as restated	$ 6,809,332	$ (3,308)	$ -
Originations			1,233,683,666
Sales			(1,151,031,388)
Total gains (losses):
Included in earnings (1)	(4,812,743)	-	50,761,910
Included in other comprehensive income (2)	-	3,308	-

Balance - December 31, 2017	$ 1,996,589	$ -	$ 133,414,188

(1) As a component of mortgage fee income on the consolidated statements of earnings
(2) As a component of unrealized gains on derivative instruments on the consolidated statements of comprehensive income

The following tables summarize Level 1, 2 and 3 financial assets and financial liabilities measured at fair value on a nonrecurring basis by their classification in the consolidated balance sheet at December 31, 2017.

	Total	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Assets accounted for at fair value on a nonrecurring basis
Impaired mortgage loans held for investment	$ 1,363,440	$ -	$ -	$ 1,363,440
Mortgage servicing rights additions	6,085,352	-	-	6,085,352
Impaired real estate held for investment	8,500,000	-	-	8,500,000
Impaired fixed maturity securities, held to maturity	426,984	-	426,984	-

Total assets accounted for at fair value on a nonrecurring basis	$ 16,375,776	$ -	$ 426,984	$ 15,948,792

	Total	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Assets accounted for at fair value on a recurring basis
Common stock	$ 9,911,256	$ 9,911,256	$ -	$ -
Total securities available for sale	$ 9,911,256	$ 9,911,256	$ -	$ -

Restricted assets (1)	$ 736,603	$ 736,603	$ -	$ -
Cemetery perpetual care trust investments (1)	698,202	698,202	-	-
Derivatives - loan commitments (2)	6,911,544	-	-	6,911,544

Total assets accounted for at fair value on a recurring basis	$ 18,257,605	$ 11,346,061	$ -	$ 6,911,544

Liabilities accounted for at fair value on a recurring basis
Derivatives - bank loan interest rate swaps (3)	$ (3,308)		$ -	$ (3,308)
- call options (4)	(109,474)	(109,474)	-	-
- put options (4)	(26,494)	(26,494)	-	-
- loan commitments (4)	(102,212)	-	-	(102,212)

Total liabilities accounted for at fair value on a recurring basis	$ (241,488)	$ (135,968)	$ -	$ (105,520)

(1) Mutual funds and equity securities
(2) Included in other assets on the consolidated balance sheets
(3) Included in bank and other loans payable on the consolidated balance sheets
(4) Included in other liabilities and accrued expenses on the consolidated balance sheets

Following is a summary of changes in the consolidated balance sheet line items measured using level 3 inputs:

	Net Derivatives Loan Commitments	Bank Loan Interest Rate Swaps
Balance - December 31, 2015, as restated	$ 7,671,495	$ (13,947)
Total gains (losses):
Included in earnings (1)	(862,163)	-
Included in other comprehensive income (2)	-	10,639
Balance - December 31, 2016, as restated	$ 6,809,332	$ (3,308)

(1) As a component of mortgage fee income on the consolidated statements of earnings
(2) As a component of unrealized gains on derivative instruments on the consolidated statements of comprehensive income

	Total	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Assets accounted for at fair value on a nonrecurring basis
Impaired mortgage loans held for investment	$ 2,809,925	$ -	$ -	$ 2,809,925
Mortgage servicing rights additions	8,603,154	-	-	8,603,154
Impaired real estate held for investment	2,347,820	-	-	2,347,820

Total assets accounted for at fair value on a nonrecurring basis	$ 13,760,899	$ -	$ -	$ 13,760,899

Fair Value of Financial Instruments Carried at Other Than Fair Value

ASC 825, Financial Instruments, requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate that value.

Management uses its best judgment in estimating the fair value of the Company’s financial instruments; however, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented herein are not necessarily indicative of the amounts the Company could have realized in a sales transaction at December 31, 2017 and 2016.

The carrying values and estimated fair values for such financial instruments, and their corresponding placement in the fair value hierarchy, are summarized as follows as of December 31, 2017:

	Carrying Value	Level 1	Level 2	Level 3	Total Estimated Fair Value
Assets
Fixed maturity securities, held to maturity	$ 228,397,623	$ -	$ 233,806,219	$ 7,692,190	$ 241,498,409
Mortgage loans held for investment
Residential	99,816,535	-	-	106,050,169	106,050,169
Residential construction	49,694,025	-	-	49,694,025	49,694,025
Commercial	54,700,325	-	-	56,473,156	56,473,156
Mortgage loans held for investment, net	$ 204,210,885	$ -	$ -	$ 212,217,350	$ 212,217,350
Policy loans	6,531,352	-	-	6,531,352	6,531,352
Insurance assignments, net (1)	35,455,098	-	-	35,455,098	35,455,098
Restricted assets (2)	1,130,088	-	1,152,324	-	1,152,324
Restricted assets (3)	1,701,811	-	-	1,796,910	1,796,910
Cemetery perpetual care trust investments (2)	943,211	-	953,404	-	953,404
Cemetery perpetual care trust investments (3)	4,128	-	-	4,411	4,411
Mortgage servicing rights, net	21,376,937	-	-	27,427,174	27,427,174

Liabilities
Bank and other loans payable	$ (157,450,925)	$ -	$ -	$ (157,450,925)	$ (157,450,925)
Policyholder account balances (4)	(47,867,037)	-	-	(34,557,111)	(34,557,111)
Future policy benefits - annuities (4)	(99,474,392)	-	-	(98,827,107)	(98,827,107)

(1) Included in other investments and policy loans on the consolidated balance sheets
(2) Fixed maturity securities held to maturity
(3) Participation in mortgage loans held for investment (commercial)
(4) Included in future policy benefits and unpaid claims on the consolidated balance sheets

The carrying values and estimated fair values for such financial instruments, and their corresponding placement in the fair value hierarchy, are summarized as follows as of December 31, 2016:

	Carrying Value	Level 1	Level 2	Level 3	Total Estimated Fair Value
Assets
Fixed maturity securities, held to maturity	$ 184,979,644	$ -	$ 191,850,749	$ -	$ 191,850,749
Mortgage loans held for investment
Residential	57,096,961	-	-	61,357,393	61,357,393
Residential construction	40,700,003	-	-	40,700,003	40,700,003
Commercial	51,193,768	-	-	53,299,800	53,299,800
Mortgage loans held for investment, net	$ 148,990,732	$ -	$ -	$ 155,357,196	$ 155,357,196
Loans held for sale	189,139,832	-	-	192,289,854	192,289,854
Policy loans	6,694,148	-	-	6,694,148	6,694,148
Insurance assignments, net (1)	32,477,246	-	-	32,477,246	32,477,246
Short-term investments	27,560,040	-	-	27,560,040	27,560,040
Restricted assets (2)	990,613	-	991,528	-	991,528
Restricted assets (3)	1,575,044	-	-	1,651,539	1,651,539
Cemetery perpetual care trust investments (2)	885,729	-	892,260	-	892,260
Cemetery perpetual care trust investments (3)	3,821	-	-	3,863	3,863
Mortgage servicing rights, net	18,872,362	-	-	25,496,832	25,496,832

Liabilities
Bank and other loans payable	$ (152,137,341)	$ -	$ -	$ (152,137,341)	$ (152,137,341)
Policyholder account balances (4)	(49,421,125)	-	-	(38,530,031)	(38,530,031)
Future policy benefits - annuities (4)	(99,385,662)	-	-	(100,253,261)	(100,253,261)

(1) Included in other investments and policy loans on the consolidated balance sheets
(2) Fixed maturity securities held to maturity
(3) Participation in mortgage loans held for investment (commercial)
(4) Included in future policy benefits and unpaid claims on the consolidated balance sheets

The methods, assumptions and significant valuation techniques and inputs used to estimate the fair value of financial instruments are summarized as follows:

Fixed Maturity Securities, Held to Maturity: The fair values of fixed maturity securities are based on quoted market prices, when available. For fixed maturity securities not actively traded, fair values are estimated using values obtained from independent pricing services, or in the case of private placements, are estimated by discounting expected future cash flows using a current market value applicable to the coupon rate, credit and maturity of the investments.

Mortgage Loans Held for Investment: The estimated fair value of the Company’s mortgage loans held for investment is determined using various methods. The Company’s mortgage loans are grouped into three categories: Residential, Residential Construction and Commercial. When estimating the expected future cash flows, it is assumed that all loans will be held to maturity, and any loans that are non-performing are evaluated individually for impairment.

Residential – The estimated fair value of mortgage loans is determined through a combination of discounted cash flows (estimating expected future cash flows of interest payments and discounting them using current interest rates from single family mortgages) and considering pricing of similar loans that were sold or priced recently.

Residential Construction – These loans are primarily short in maturity accordingly, the estimated fair value is determined to be the carrying value.

Commercial – The estimated fair value is determined by estimating expected future cash flows of interest payments and discounting them using current interest rates for commercial mortgages.

Loans Held for Sale, at Amortized Cost: The fair value is based on quoted market prices, when available. When a quoted market price is not readily available, the Company uses the market price from its last sale of similar assets.

Policy Loans: The carrying amounts reported in the accompanying consolidated balance sheet for these financial instruments approximate their fair values because they are fully collateralized by the cash surrender value of the underlying insurance policies.

Insurance Assignments, Net: These investments are short in maturity accordingly, the carrying amounts reported in the accompanying condensed consolidated balance sheet for these financial instruments approximate their fair values.

Short-Term Investments: The carrying amounts reported in the accompanying consolidated balance sheet for these financial instruments approximate their fair values due to their short-term nature.

Bank and Other Loans Payable: The carrying amounts reported in the accompanying consolidated balance sheet for these financial instruments approximate their fair values due to their relatively short-term maturities and variable interest rates.

Policyholder Account Balances and Future Policy Benefits-Annuities: Future policy benefit reserves for interest-sensitive insurance products are computed under a retrospective deposit method and represent policy account balances before applicable surrender charges. Policy benefits and claims that are charged to expense include benefit claims incurred in the period in excess of related policy account balances. Interest crediting rates for interest-sensitive insurance products ranged from 1.5% to 6.5%. The fair values for these investment-type insurance contracts are estimated based on the present value of liability cash flows.

The fair values for the Company’s insurance contracts other than investment-type contracts are not required to be disclosed. However, the fair values of liabilities under all insurance contracts are taken into consideration in the Company’s overall management of interest rate risk, such that the Company’s exposure to changing interest rates is minimized through the matching of investment maturities with amounts due under insurance contracts.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

18) Accumulated Other Comprehensive Income

12 Months Ended

Dec. 31, 2017

Notes

18) Accumulated Other Comprehensive Income

The following summarizes the changes in accumulated other comprehensive income:

	December 31
	2017	2016
Unrealized gains on equity securities available for sale, restricted assets and cemetery perpetual care trust investments	$ 421,499	$ 996,343
Reclassification adjustment for net realized gains in net income	90,475	160,575
Net unrealized gains before taxes	511,974	1,156,918
Tax expense	(175,644)	(399,228)
Net	336,330	757,690
Unrealized gains for bank loan interest rate swaps before taxes	3,308	10,639
Tax expense	(1,290)	(4,149)
Net	2,018	6,490
Other comprehensive income changes	$ 338,348	$ 764,180

The following is the accumulated balances of other comprehensive income as of December 31, 2017:

	Beginning Balance December 31, 2016	Change for the period	Ending Balance December 31, 2017
Unrealized gains on equity securities available for sale, restricted assets and cemetery perpetual care trust investments	$ 266,840	$ 336,330	$ 603,170

Unrealized gains for bank loan interest rate swaps	(2,018)	2,018	-
Other comprehensive income	$ 264,822	$ 338,348	$ 603,170

The following is the accumulated balances of other comprehensive income as of December 31, 2016:

	Beginning Balance December 31, 2015	Change for the period	Ending Balance December 31, 2016
Unrealized gains (losses) on equity securities available for sale, restricted assets and cemetery perpetual care trust investments	$ (490,850)	$ 757,690	$ 266,840

Unrealized gains (losses) for bank loan interest rate swaps	(8,508)	6,490	(2,018)
Other comprehensive income (loss)	$ (499,358)	$ 764,180	$ 264,822

See Note 1 regarding the adoption of ASU 2016-01.

19) Derivative Instruments

12 Months Ended

Dec. 31, 2017

Notes

19) Derivative Instruments

The following table shows the fair value of derivatives as of December 31, 2017 and 2016.

	Fair Values and Notional Amounts of Derivative Instruments
		December 31, 2017			December 31, 2016
	Balance Sheet Location	Notional Amount	Asset Fair Value	Liability Fair Value	Notional Amount	Asset Fair Value	Liability Fair Value
Derivatives not designated as hedging instruments:
Loan commitments	Other assets and Other liabilities	$105,679,107	$2,032,782	$ 36,193	$191,757,193	$6,911,544	$102,212
Call options	Other liabilities	1,488,550	--	64,689	2,169,850	--	109,474
Put options	Other liabilities	2,265,900	--	20,568	1,336,750	--	26,494

Derivatives designated as fair value hedging instruments:
Interest rate swaps	Bank and other loans payable	--	--	--	175,762	--	3,308
Total		$109,433,557	$2,032,782	$121,450	$195,439,555	$6,911,544	$241,488

The following table shows the gain (loss) on derivatives for the periods presented. There were no gains or losses reclassified from accumulated other comprehensive income into income or gains or losses recognized in income on derivatives ineffective portion or any amounts excluded from effective testing.

		Net Amount Gain (Loss)
		Years ended December 31
Derivative	Classification	2017		2016
Interest Rate Swaps	Other comprehensive income	$ 2,018		$ 6,490

Loan commitments	Mortgage fee income	$ (4,812,743)	(1)	$ (862,163)

Call and put options	Realized gains on investments and other assets	$ 316,244		$ 208,409

(1) Includes the transfer of loan commitments to the value of loans held for sale.

20) Acquisitions

12 Months Ended

Dec. 31, 2017

Notes

20) Acquisitions

Acquisition of First Guaranty Insurance Company

On July 11, 2016, the Company, through its wholly owned subsidiary, Security National Life completed the stock purchase transaction with the shareholders of Reppond Holding Corporation, an Arkansas corporation (Reppond Holding) and sole shareholder of First Guaranty, a Louisiana domestic stock legal reserve life insurance company, to purchase all the outstanding shares of common stock of Reppond Holding. Under the terms of the stock purchase agreement, dated February 17, 2016, between Security National Life and Reppond Holding, which was later amended on March 4 and 17, 2016, Security National Life paid a total of $6,753,000 at the closing in consideration for the purchase of all the outstanding shares of stock of Reppond Holding from its shareholders.

The estimated fair values of the assets acquired and the liabilities assumed at the date of acquisition were as follows:

Fixed maturity securities, held to maturity	$ 43,878,084
Equity securities, available for sale	646,335
Mortgage loans held for investment	4,528,582
Real estate held for investment	528,947
Policy loans	145,953
Short-term investments	5,358,403
Accrued investment income	585,985
Cash and cash equivalents	2,424,480
Receivables	73,347
Property and equipment	21,083
Deferred tax asset	1,190,862
Receivable from reinsurers	34,948
Other	57,768
Total assets acquired	59,474,777
Future policy benefits and unpaid claims	(52,648,838)
Accounts payable	(6,953)
Other liabilities and accrued expenses	(65,986)
Total liabilities assumed	(52,721,777)
Fair value of net assets acquired/consideration paid	$ 6,753,000

The estimated fair value of the fixed maturity securities and the equity securities is based on unadjusted quoted prices for identical assets in an active market. These types of financial assets are considered Level 1 under the fair value hierarchy. The estimated fair value of future policy benefits is based on assumptions of the future value of the business acquired. Based on the unobservable nature of certain of these assumptions, the valuation for these financial liabilities is considered to be Level 3 under the fair value hierarchy. The Company determined that the estimated fair value of the remaining assets and liabilities acquired approximated their book values. The fair value of assets acquired and liabilities assumed are subject to adjustment during the first twelve months after the acquisition date if additional information becomes available to indicate a more accurate or appropriate value for an asset or liability. No adjustments were made.

The following unaudited pro forma information has been prepared to present the results of operations of the Company assuming the acquisition of First Guaranty had occurred at the beginning of the year ended December 31, 2016. This pro forma information is supplemental and does not necessarily present the operations of the Company that would have occurred had the acquisition occurred on this date and may not reflect the operations that will occur in the future:

		For the Year Ended December 31, 2016 (unaudited)
Total revenues		$ 306,471,770
Net earnings		$ 11,923,653
Net earnings per Class A equivalent common share		$ 0.77
Net earnings per Class A equivalent common share assuming dilution		$ 0.75

The pro forma results for the year ended December 31, 2017 are not included in the table above because the operating results for the First Guaranty acquisition were included in the Company’s consolidated statements of earnings for this period.

21) Mortgage Servicing Rights

12 Months Ended

Dec. 31, 2017

Notes

21) Mortgage Servicing Rights

The Company reports MSRs pursuant to the accounting policy discussed in Note 1 of the Notes to Consolidated Financial Statements.

The following table presents the MSR activity for the periods presented.

	December 31
	2017	2016
Amortized cost:
Balance before valuation allowance at beginning of year	$ 18,872,362	$ 12,679,755
MSR additions resulting from loan sales	6,085,352	8,603,154
Amortization (1)	(3,580,777)	(2,410,547)
Application of valuation allowance to write down MSRs with other than temporary impairment	-	-
Balance before valuation allowance at year end	$ 21,376,937	$ 18,872,362

Valuation allowance for impairment of MSRs:
Balance at beginning of year	$ -	$ -
Additions	-	-
Application of valuation allowance to write down MSRs with other than temporary impairment	-	-
Balance at year end	$ -	$ -

Mortgage servicing rights, net	$ 21,376,937	$ 18,872,362

Estimated fair value of MSRs at year end	$ 27,427,174	$ 25,496,832

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

The following table summarizes the Company’s estimate of future amortization of its existing MSRs carried at amortized cost. This projection was developed using the assumptions made by management in its December 31, 2017 valuation of MSRs. The assumptions underlying the following estimate will change as market conditions and portfolio composition and behavior change, causing both actual and projected amortization levels to change over time. Therefore, the following estimates will change in a manner and amount not presently determinable by management.

		Estimated MSR Amortization
2018		$ 4,057,830
2019		4,057,830
2020		4,057,830
2021		4,057,684
2022		3,242,163
Thereafter		1,903,600
Total		$ 21,376,937

During the years ended December 31, 2017 and 2016, the Company collected the following contractual servicing fee income and late fee income as reported in other revenues on the consolidated statements of earnings:

	2017	2016
Contractual servicing fees	$ 7,199,649	$ 5,661,699
Late fees	284,550	203,509
Total	$ 7,484,199	$ 5,865,207

The following is a summary of the unpaid principal balances (“UPB”) of the servicing portfolio for the periods presented:

	Years Ended December 31
	2017	2016
Servicing UPB	2,924,868,843	2,720,441,340

The following key assumptions were used in determining MSR value:

	Prepayment Speeds	Average Life(Years)	Discount Rate
December 31, 2017	3.67%	6.34	10.01
December 31, 2016	3.77%	6.52	10.01

22) Correction of Errors

12 Months Ended

Dec. 31, 2017

Notes

22) Correction of Errors

The accompanying Consolidated Financial Statements include the restatement of the Company’s previously filed consolidated balance sheet and the related consolidated statements of earnings, shareholders’ equity and cash flows for the fiscal year ended December 31, 2016. For the revised quarterly results of operations for the fiscal year ended December 31, 2016, see “Impact of Restatement Adjustments on Quarterly Financial Statements (Unaudited)” in Note 23 of the accompanying Consolidated Financial Statements.

Immaterial Error in Accounting for Loan Commitments: Subsequent to the issuance of the company’s 2015 consolidated financial statements, the Company identified an error in the accounting for its loan commitments (“Adjustment A”). The Company corrected the presentation of the changes in fair value of its loan commitments to present them as a component of current earnings instead of as a component of other comprehensive income, as previously reported. The Company’s management has concluded that the effect of the correction is not material to any previously issued Consolidated Financial Statements.

Subsequent to the issuance of the company’s 2016 Consolidated Financial Statements, the Company identified the following errors, (“Adjustments B”):

Material Error in Accounting for Repurchase Agreements: The Company has concluded it should account for its Repurchase Agreements with unaffiliated banks as "On-Balance-Sheet" transactions, rather than as "Off-Balance-Sheet" as previously reported. Accordingly, the Company will reflect any outstanding loans as Loans Held for Sale and the corresponding debt as a Bank Loan Payable. The Company has corrected its sale accounting practice to defer revenue and costs on loans that remain as Held for Sale. The Company will recognize these deferred items at the time the loan is purchased by the ultimate investor.

Material Error in Accounting for Tax Valuation Allowance: The Company determined that it should have reversed its valuation allowance in its entirety in 2012 when the Company no longer qualified for the small life insurance company deduction, rather than in other periods as previously reported.

Other Immaterial Corrections and Reclassifications: In addition, the Company has recorded the following additional corrections in the accompanying consolidated financial statements:

Reclassification of Receivables to Loans Held for Sale
Reclassification of the Provision for Loan Loss Reserve to net against Mortgage Fee Income
Correction to Future Policy Benefits to reverse a Deferred Profit Liability

The tables below present the impact of the restatement on the Company’s consolidated balance sheets for the periods presented:

	As of December 31, 2016
	As Originally Reported	Adjustment (A)	As Previously Reported	Adjustments (B)	As Restated
Equity securities, available for sale, at estimated fair value	$ 10,573,356	$ -	$ 10,573,356	$ (662,100)	$ 9,911,256
Mortgage loans held for investment	149,181,578	-	149,181,578	(190,846)	148,990,732
Policy loans and other investments	40,937,146	-	40,937,146	662,100	41,599,246
Loans held for sale (formerly called Mortgage loans sold to investors)	82,491,091	-	82,491,091	106,648,741	189,139,832
Receivables, net	18,870,119	-	18,870,119	(10,459,573)	8,410,546
Other assets	6,891,468	-	6,891,468	2,418,572	9,310,040
Total Assets	854,004,671	-	854,004,671	98,416,894	952,421,565
Future policy benefits and unpaid claims	585,610,063	-	585,610,063	(1,542,371)	584,067,692
Bank and other loans payable	53,718,548	-	53,718,548	98,422,131	152,140,679
Other liabilities and accrued expenses	33,950,503	-	33,950,503	742,982	34,693,485
Income taxes	27,904,294	-	27,904,294	(3,585,425)	24,318,869
Total liabilities	725,825,117	-	725,825,117	94,037,317	819,862,434
Accumulated other comprehensive income, net of taxes	264,822	-	264,822	-	264,822
Retained earnings	63,029,627	-	63,029,627	4,379,577	67,409,204
Total stockholders' equity	128,179,554	-	128,179,554	4,379,577	132,559,131
Total Liabilities and Stockholders' Equity	854,004,671	-	854,004,671	98,416,894	952,421,565

	As of January 1, 2016
	As Originally Reported	Adjustment (A)	As Previously Reported	Adjustments (B)	As Restated
Loans held for sale (formerly called Mortgage loans sold to investors)	$ 115,286,455	$ -	$ 115,286,455	$ 96,166,551	$ 211,453,006
Receivables, net	16,026,100	-	16,026,100	(9,965,106)	6,060,994
Other assets	7,100,869	-	7,100,869	4,338,404	11,439,273
Total Assets	749,933,317	-	749,933,317	90,539,849	840,473,166
Future policy benefits and unpaid claims	517,177,388	-	517,177,388	(1,388,134)	515,789,254
Bank and other loans payable	40,908,915	-	40,908,915	90,096,699	131,005,614
Income taxes	25,052,059	-	25,052,059	(4,639,170)	20,412,889
Total liabilities	638,687,092	-	638,687,092	84,069,395	722,756,487
Accumulated other comprehensive income (loss), net of taxes	1,533,828	(2,033,186)	(499,358)	-	(499,358)
Retained earnings	52,021,764	2,033,186	54,054,950	6,470,454	60,525,404
Total stockholders' equity	111,246,225	-	111,246,225	6,470,454	117,716,679
Total Liabilities and Stockholders' Equity	749,933,317	-	749,933,317	90,539,849	840,473,166

The tables below present the impact of the restatement on the Company’s consolidated statements of earnings for the period presented:

	Year Ended December 31, 2016
	As Originally Reported	Adjustment (A)	As Previously Reported	Adjustments (B)	As Restated
Net investment income	$ 37,582,444	$ -	$ 37,582,444	$ (5,603,843)	$ 31,978,601
Mortgage fee income	186,416,311	-	186,416,311	2,730,328	189,146,639
Total revenues	307,208,416	-	307,208,416	(2,873,515)	304,334,901
Increase in future policy benefits	21,476,432	-	21,476,432	(154,237)	21,322,195
Commissions	87,762,583	-	87,762,583	871,911	88,634,494
Provision for loan loss reserve	4,688,754	-	4,688,754	(2,988,754)	1,700,000
Cost related to funding mortgage loans	8,756,791	-	8,756,791	434,697	9,191,488
Total benefits and expenses	286,468,053	-	286,468,053	(1,836,383)	284,631,670
Earnings before income taxes	20,740,363	-	20,740,363	(1,037,132)	19,703,231
Income tax expense	(6,460,859)	-	(6,460,859)	(1,053,745)	(7,514,604)
Net earnings	14,279,504	-	14,279,504	(2,090,877)	12,188,627
Net earnings per common share (1)	$0.92	$0.00	$0.92	($0.13)	$0.78
Net earnings per common share assuming dilution (1)	$0.90	$0.00	$0.90	($0.13)	$0.77

(1) Earnings per share amounts have been adjusted retroactively for the effect of annual stock dividends.

The tables below present the impact of the restatement on the Company’s consolidated statements of comprehensive income for the period presented:

	Year Ended December 31, 2016
	As Originally Reported	Adjustment (A)	As Previously Reported	Adjustments (B)	As Restated
Net earnings	$ 14,279,504	$ -	$ 14,279,504	$ (2,090,877)	$ 12,188,627
Net unrealized gains on derivative instruments	6,490	-	6,490	-	6,490
Other comprehensive gain	764,180	-	764,180	-	764,180

The tables below present the impact of the restatement on the Company’s consolidated statements of cash flows for the period presented:

	Year Ended December 31, 2016
	As Originally Reported	Adjustment (A)	As Previously Reported	Adjustments (B)	As Restated
Net earnings	$ 14,279,504	$ -	$ 14,279,504	$ (2,090,877)	$ 12,188,627
Provision for deferred and other income taxes	5,076,899	-	5,076,899	1,053,745	6,130,644
Loans originated for sale	-	-	-	(3,098,710,299)	(3,098,710,299)
Proceeds from loans sold	-	-	-	3,246,127,714	3,246,127,714
Net gains on loans sold	-	-	-	(137,682,984)	(137,682,984)
Future life and other benefits	18,143,832	-	18,143,832	(154,237)	17,989,595
Receivables for mortgage loans sold	20,216,621	-	20,216,621	(20,216,621)	-
Other operating assets and liabilities	(8,473,503)	-	(8,473,503)	3,348,127	(5,125,376)
Net cash provided by (used in) operating activities	43,860,446	-	43,860,446	(8,325,432)	35,535,014
Net change in warehouse line borrowings	-		-	8,325,432	8,325,432
Net cash provided by financing activities	10,664,656	-	10,664,656	8,325,432	18,990,088

23) Quarterly Financial Data (unaudited)

12 Months Ended

Dec. 31, 2017

Notes

23) Quarterly Financial Data (unaudited)

23) Quarterly Financial Data (Unaudited)

	2017
	Three Months Ended
	March 31	June 30	September 30	December 31
Revenues	$ 70,829,297	$ 73,171,558	$ 71,971,851	$ 60,953,384
Benefits and expenses	67,931,527	69,177,259	70,833,834	61,451,358
Earnings before income taxes	2,897,770	3,994,299	1,138,017	(497,974)
Income tax expense	(1,037,770)	(1,508,435)	(41,179)	9,168,206
Net earnings	1,860,000	2,485,864	1,096,838	8,670,232
Net earnings per common share (1)	$0.12	$0.16	$0.07	$0.54
Net earnings per common share assuming dilution (1)	$0.11	$0.15	$0.07	$0.53

Impact of Restatement Adjustments on Quarterly Financial Statements (Unaudited) for 2016.

	2016 (2)
	Three Months Ended
	March 31 (As Previously Reported)	March 31 (As Restated)	June 30 (As Previously Reported)	June 30 (As Restated)	September 30 (As Previously Reported)	September 30 (As Restated)	December 31 (As Previously Reported)	December 31 (As Restated)
Revenues	$ 67,355,307	$ 69,456,348	$ 81,312,192	$ 80,087,227	$ 84,393,427	$ 82,948,657	$ 74,147,490	$ 71,842,669
Benefits and expenses	63,163,550	65,385,268	73,758,739	72,101,342	77,427,792	76,375,127	72,117,972	70,769,933
Earnings before income taxes	4,191,757	4,071,080	7,553,453	7,985,885	6,965,635	6,573,530	2,029,518	1,072,736
Income tax expense	(1,580,220)	(1,533,139)	(2,456,885)	(2,968,879)	(2,190,206)	(2,390,525)	(233,548)	(622,061)
Net earnings	2,611,537	2,537,941	5,096,568	5,017,006	4,775,429	4,183,005	1,795,970	450,675
Net earnings per common share (1)	$0.17	$0.16	$0.33	$0.32	$0.31	$0.27	$0.11	$0.03
Net earnings per common share assuming dilution (1)	$0.16	$0.16	$0.32	$0.32	$0.30	$0.26	$0.11	$0.03
____________
(1) Earnings per share amounts have been adjusted retroactively for the effect of annual stock dividends.
(2) Earnings restated – See Note 22 of the Notes to Consolidated Financial Statements for additional information regarding correction of errors.

24) Future Policy Benefits and Unpaid Claims

12 Months Ended

Dec. 31, 2017

Notes

24) Future Policy Benefits and Unpaid Claims

The Company reports future policy benefits and unpaid claims pursuant to the accounting policy discussed in Note 1 of the Notes to Consolidated Financial Statements.

The following table provides information regarding future policy benefits and unpaid claims and the related receivable from reinsurers.

	Years Ended September 30
	2017	2016
Life	$ 445,247,671	$424,878,578
Annuities	99,474,392	99,385,662
Policyholder account balances	47,867,037	49,421,125
Accident and health	482,234	475,059
Other policyholder funds	4,487,521	4,683,720
Reported but unpaid claims	6,023,084	3,897,391
Incurred but not reported claims	1,165,012	1,326,157

Gross future policy benefits and unpaid claims	$ 604,746,951	$584,067,692

Receivable from reinsurers

Life	7,291,996	7,218,580
Annuities	6,023,092	5,781,402
Reported but unpaid claims	69,218	69,189
Incurred but not reported claims	10,297	10,497

Total receivable from reinsurers	13,394,603	13,079,668

Net future policy benefits and unpaid claims	$ 591,352,348	$570,988,024

25) Subsequent Events

12 Months Ended

Dec. 31, 2017

Notes

25) Subsequent Events

On February 27, 2018, Security National Life announced that it entered into an agreement to sell Dry Creek, its 282-unit multifamily complex located in Sandy, Utah. The sale was completed on March 29, 2018 for a purchase price of $57,000,000.

1) Significant Accounting Policies: General Overview of Business (Policies)

12 Months Ended

Dec. 31, 2017

Policies

General Overview of Business

General Overview of Business

1) Significant Accounting Policies: Basis of Presentation (Policies)

12 Months Ended

Dec. 31, 2017

Policies

Basis of Presentation

Basis of Presentation

1) Significant Accounting Policies: Principles of Consolidation (Policies)

12 Months Ended

Dec. 31, 2017

Policies

Principles of Consolidation

Principles of Consolidation

1) Significant Accounting Policies: Use of Estimates (Policies)

12 Months Ended

Dec. 31, 2017

Policies

Use of Estimates

Use of Estimates

1) Significant Accounting Policies: Investments (Policies)

12 Months Ended

Dec. 31, 2017

Policies

Investments

Investments

Policy loans and other investments are carried at the aggregate unpaid balances, less allowances for possible losses.

Short-term investments are carried at cost and consist of money market funds.

- Definition

Disclosure of accounting policy for investments in financial assets, including marketable securities (debt and equity securities with readily determinable fair values), investments accounted for under the equity method and cost method, securities borrowed and loaned, and repurchase and resale agreements. For marketable securities, the disclosure may include the entity's accounting treatment for transfers between investment categories and how the fair values for such securities are determined. Also, for all investments, an entity may describe its policy for assessing, recognizing and measuring impairment of the investment.

+ References + Details

1) Significant Accounting Policies: Cash and Cash Equivalents (Policies)

12 Months Ended

Dec. 31, 2017

Policies

Cash and Cash Equivalents

Cash and Cash Equivalents

1) Significant Accounting Policies: Loans Held For Sale (Policies)

12 Months Ended

Dec. 31, 2017

Policies

Loans Held For Sale

Loans Held for Sale

1) Significant Accounting Policies: Mortgage Fee Income (Policies)

12 Months Ended

Dec. 31, 2017

Policies

Mortgage Fee Income

Mortgage Fee Income

· specified by the investor, Failure to deliver original documents

· 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.

· Research reasons for rejection,

· Provide additional documents,

· Request investor exceptions,

· Appeal rejection decision to purchase committee, and

· Commit to secondary investors.

Determining Lower of Cost or Market

· 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.

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.

1) Significant Accounting Policies: Loan Loss Reserve (Policies)

12 Months Ended

Dec. 31, 2017

Policies

Loan Loss Reserve

Loan Loss Reserve

Repurchase demand – A repurchase demand usually occurs when there is a significant payment default, error in underwriting or detected loan fraud.

Indemnification demand – On certain loans the Company has negotiated a set fee that is to be paid in lieu of repurchase. The fee varies by investor and by loan product type.

The Company believes the allowance for loan losses and the loan loss reserve represent probable loan losses incurred as of the balance sheet date.

Additional information related to the Loan Loss Reserve is included in Note 3.

1) Significant Accounting Policies: Restricted Assets (Policies)

12 Months Ended

Dec. 31, 2017

Policies

Restricted Assets

Restricted Assets

1) Significant Accounting Policies: Cemetery Perpetual Care Trust Investments (Policies)

12 Months Ended

Dec. 31, 2017

Policies

Cemetery Perpetual Care Trust Investments

Cemetery Perpetual Care Trust Investments

1) Significant Accounting Policies: Cemetery Land and Improvements (Policies)

12 Months Ended

Dec. 31, 2017

Policies

Cemetery Land and Improvements

1) Significant Accounting Policies: Deferred Policy Acquisition Costs and Value of Business Acquired (Policies)

12 Months Ended

Dec. 31, 2017

Policies

Deferred Policy Acquisition Costs and Value of Business Acquired

Deferred Policy Acquisition Costs and Value of Business Acquired

Value of business acquired is the present value of estimated future profits of the acquired business and is amortized similar to deferred policy acquisition costs.

1) Significant Accounting Policies: Mortgage Servicing Rights (Policies)

12 Months Ended

Dec. 31, 2017

Policies

Mortgage Servicing Rights

Mortgage Servicing Rights

1) Significant Accounting Policies: Property and Equipment (Policies)

12 Months Ended

Dec. 31, 2017

Policies

Property and Equipment

Property and Equipment

1) Significant Accounting Policies: Long-lived Assets (Policies)

12 Months Ended

Dec. 31, 2017

Policies

Long-lived Assets

1) Significant Accounting Policies: Derivative Instruments (Policies)

12 Months Ended

Dec. 31, 2017

Policies

Derivative Instruments

Derivative Instruments

Mortgage Banking Derivatives

Loan Commitments

Forward Sale Commitments

Call and Put Options

1) Significant Accounting Policies: Allowance For Doubtful Accounts and Loan Losses and Impaired Loans (Policies)

12 Months Ended

Dec. 31, 2017

Policies

Allowance For Doubtful Accounts and Loan Losses and Impaired Loans

Allowance for Doubtful Accounts and Loan Losses and Impaired Loans

The Company records an allowance and recognizes an expense for potential losses from mortgage loans held for investment, other investments and receivables in accordance with GAAP.

1) Significant Accounting Policies: Future Policy Benefits and Unpaid Claims (Policies)

12 Months Ended

Dec. 31, 2017

Policies

Future Policy Benefits and Unpaid Claims

1) Significant Accounting Policies: Participating Insurance (Policies)

12 Months Ended

Dec. 31, 2017

Policies

Participating Insurance

Participating Insurance

1) Significant Accounting Policies: Recognition of Insurance Premiums and Other Considerations (Policies)

12 Months Ended

Dec. 31, 2017

Policies

Recognition of Insurance Premiums and Other Considerations

Recognition of Insurance Premiums and Other Considerations

1) Significant Accounting Policies: Reinsurance (Policies)

12 Months Ended

Dec. 31, 2017

Policies

Reinsurance

Reinsurance

1) Significant Accounting Policies: Pre-need Sales and Costs (Policies)

12 Months Ended

Dec. 31, 2017

Policies

Pre-need Sales and Costs

Pre-need Sales and Costs

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 obligations remaining.

1) Significant Accounting Policies: Goodwill (Policies)

12 Months Ended

Dec. 31, 2017

Policies

Goodwill

Goodwill

1) Significant Accounting Policies: Income Taxes (Policies)

12 Months Ended

Dec. 31, 2017

Policies

Income Taxes

Income Taxes

- Definition

Disclosure of accounting policy for income taxes, which may include its accounting policies for recognizing and measuring deferred tax assets and liabilities and related valuation allowances, recognizing investment tax credits, operating loss carryforwards, tax credit carryforwards, and other carryforwards, methodologies for determining its effective income tax rate and the characterization of interest and penalties in the financial statements.

+ References + Details

1) Significant Accounting Policies: Earnings Per Common Share (Policies)

12 Months Ended

Dec. 31, 2017

Policies

Earnings Per Common Share

Earnings Per Common Share

1) Significant Accounting Policies: Stock Based Compensation (Policies)

12 Months Ended

Dec. 31, 2017

Policies

Stock Based Compensation

Stock Based Compensation

1) Significant Accounting Policies: Concentration of Credit Risk (Policies)

12 Months Ended

Dec. 31, 2017

Policies

Concentration of Credit Risk

1) Significant Accounting Policies: Advertising (Policies)

12 Months Ended

Dec. 31, 2017

Policies

Advertising

Advertising

The Company expenses advertising costs as incurred.

1) Significant Accounting Policies: Recent Accounting Pronouncements (Policies)

12 Months Ended

Dec. 31, 2017

Policies

Recent Accounting Pronouncements

The Company has reviewed other recent accounting pronouncements and has determined that they will not significantly impact the Company’s results of operations or financial position.

2) Investments: Held-to-maturity Securities (Tables)

12 Months Ended

Dec. 31, 2017

AsOfDecember312017Member

Held-to-maturity Securities

	Amortized Cost	Gross Unrealized Gains	Gross Unrealized Losses	Estimated Fair Value
December 31, 2017:
Fixed maturity securities held to maturity carried at amortized cost:
U.S. Treasury securities and obligations of U.S. Government agencies	$ 54,077,069	$ 211,824	$ (579,423)	$ 53,709,470

Obligations of states and political subdivisions	5,843,176	112,372	(71,013)	5,884,535

Corporate securities including public utilities	158,350,727	14,336,452	(1,007,504)	171,679,675

Mortgage-backed securities	9,503,016	210,652	(162,131)	9,551,537

Redeemable preferred stock	623,635	49,748	(191)	673,192

Total fixed maturity securities held to maturity	$ 228,397,623	$ 14,921,048	$ (1,820,262)	$ 241,498,409

Equity securities available for sale at estimated fair value:

Common stock:

Industrial, miscellaneous and all other	$ 6,002,931	$ 667,593	$ (632,669)	$ 6,037,855

Total securities available for sale	$ 6,002,931	$ 667,593	$ (632,669)	$ 6,037,855

Mortgage loans held for investment at amortized cost:
Residential	$ 102,527,111
Residential construction	50,157,533
Commercial	54,954,865
Less: Unamortized deferred loan fees, net	(1,659,828)
Less: Allowance for loan losses	(1,768,796)

Total mortgage loans held for investment	$ 204,210,885

Real estate held for investment - net of accumulated depreciation:
Residential	$ 68,329,917
Commercial	72,968,789

Total real estate held for investment	$ 141,298,706

Other investments and policy loans at amortized cost:
Policy loans	$ 6,531,352
Insurance assignments	36,301,739
Federal Home Loan Bank stock	689,400
Other investments	3,219,622
Less: Allowance for doubtful accounts	(846,641)

Total policy loans and other investments	$ 45,895,472

Accrued investment income	$ 3,644,077

Total investments	$ 629,484,618

AsOfDecember312016Member

Held-to-maturity Securities

	Amortized Cost	Gross Unrealized Gains	Gross Unrealized Losses	Estimated Fair Value
December 31, 2016:
Fixed maturity securities held to maturity carried at amortized cost:
U.S. Treasury securities and obligations of U.S. Government agencies	$ 4,475,065	$ 249,028	$ (66,111)	$ 4,657,982

Obligations of states and political subdivisions	6,017,225	153,514	(133,249)	6,037,490

Corporate securities including public utilities	164,375,636	10,440,989	(3,727,013)	171,089,612

Mortgage-backed securities	9,488,083	221,400	(280,871)	9,428,612

Redeemable preferred stock	623,635	13,418	-	637,053

Total fixed maturity securities held to maturity	$ 184,979,644	$ 11,078,349	$ (4,207,244)	$ 191,850,749

Equity securities available for sale at estimated fair value:

Common stock:

Industrial, miscellaneous and all other	$ 10,323,238	$ 447,110	$ (859,092)	$ 9,911,256

Total securities available for sale	$ 10,323,238	$ 447,110	$ (859,092)	$ 9,911,256

Mortgage loans held for investment at amortized cost:
Residential	$ 58,593,622
Residential construction	40,800,117
Commercial	51,536,622
Less: Unamortized deferred loan fees, net	(190,846)
Less: Allowance for loan losses	(1,748,783)

Total mortgage loans held for investment	$ 148,990,732

Real estate held for investment - net of accumulated depreciation:
Residential	$ 76,191,985
Commercial	68,973,936

Total real estate held for investment	$ 145,165,921

Other investments and policy loans at amortized cost:
Policy loans	$ 6,694,148
Insurance assignments	33,548,079
Promissory notes	48,797
Federal Home Loan Bank stock	662,100
Other investments	1,765,752
Less: Allowance for doubtful accounts	(1,119,630)

Total policy loans and other investments	$ 41,599,246

Short-term investments at amortized cost	$ 27,560,040

Accrued investment income	$ 2,972,596

Total investments	$ 561,179,435

- Definition

Tabular disclosure of all investments in certain debt and equity securities for which the entity has the positive intent and ability to hold until maturity.

+ References + Details

2) Investments: Schedule of Unrealized Loss on Investments (Tables)

12 Months Ended

Dec. 31, 2017

Fixed Maturities | AsOfDecember312017Member

Schedule of Unrealized Loss on Investments

	Unrealized Losses for Less than Twelve Months	Fair Value	Unrealized Losses for More than Twelve Months	Fair Value	Total Unrealized Loss	Fair Value
At December 31, 2017
U.S. Treasury Securities and Obligations
of U.S. Government Agencies	$ 532,010	$ 51,606,699	$ 47,413	$ 643,380	$ 579,423	$ 52,250,079
Obligations of States and
Political Subdivisions	296	214,882	70,717	2,225,021	71,013	2,439,903
Corporate Securities	167,786	11,551,865	839,718	13,193,258	1,007,504	24,745,123
Mortgage and other
asset-backed securities	56,756	2,516,660	105,375	1,676,494	162,131	4,193,154
Redeemable preferred stock	191	11,421	-	-	191	11,421
Total unrealized losses	$ 757,039	$ 65,901,527	$ 1,063,223	$ 17,738,153	$ 1,820,262	$ 83,639,680

Fixed Maturities | AsOfDecember312016Member

Schedule of Unrealized Loss on Investments

		Fair Value		Fair Value	Total Unrealized Loss	Fair Value
At December 31, 2016
U.S. Treasury Securities and Obligations
of U.S. Government Agencies	$ 66,111	$ 1,342,088	$ -	$ -	$ 66,111	$ 1,342,088
Obligations of States and
Political Subdivisions	133,249	3,686,856	-	-	133,249	3,686,856
Corporate Securities	1,728,312	41,796,016	1,998,701	12,969,135	3,727,013	54,765,151
Mortgage and other
asset-backed securities	176,715	4,176,089	104,156	940,278	280,871	5,116,367
Total unrealized losses	$ 2,104,387	$ 51,001,049	$ 2,102,857	$ 13,909,413	$ 4,207,244	$ 64,910,462

Equity Securities

Schedule of Unrealized Loss on Investments

	Unrealized Losses for Less than Twelve Months	No. of Investment Positions	Unrealized Losses for More than Twelve Months	No. of Investment Positions	Total Unrealized Losses
At December 31, 2017
Industrial, miscellaneous and all other	$ 213,097	98	$ 419,572	81	$ 632,669
Total unrealized losses	$ 213,097	98	$ 419,572	81	$ 632,669
Fair Value	$ 847,718		$ 1,329,213		$ 2,176,931

At December 31, 2016
Industrial, miscellaneous and all other	$ 215,563	124	$ 643,529	104	$ 859,092
Total unrealized losses	$ 215,563	124	$ 643,529	104	$ 859,092
Fair Value	$ 2,063,144		$ 1,685,874		$ 3,749,018

2) Investments: Investments Classified by Contractual Maturity Date (Tables)

12 Months Ended

Dec. 31, 2017

Held-to-maturity Securities

Investments Classified by Contractual Maturity Date

	Amortized	Estimated Fair
	Cost	Value
Held to Maturity:
Due in 1 year	$ 20,125,883	$ 20,299,016
Due in 2-5 years	69,849,085	70,873,975
Due in 5-10 years	49,842,819	52,444,399
Due in more than 10 years	78,453,185	87,656,290
Mortgage-backed securities	9,503,016	9,551,537
Redeemable preferred stock	623,635	673,192
Total held to maturity	$ 228,397,623	$ 241,498,409

2) Investments: Gain (Loss) on Investments (Tables)

12 Months Ended

Dec. 31, 2017

2) Investments: Held-to-maturity Securities (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
HeldToMaturitySecuritiesEstimatedFairValue	$ 241,498,409	$ 191,850,749
Held-to-maturity Securities, Amortized Cost before Other than Temporary Impairment	228,397,623	184,979,644
Held-to-maturity Securities, Unrecognized Holding Gain	14,921,048	11,078,349
Held-to-maturity Securities, Unrecognized Holding Loss	(1,820,262)	(4,207,244)
Mortgage loans held for investment	204,210,885	148,990,732
Mortgage loans held for investment, unamortized deferred loan fees, net	(1,659,828)	(190,846)
Allowance for losses on mortgage loans held for investment	(1,768,796)	(1,748,783)
Real estate held for investment, net of depreciation	141,298,706	145,165,921
Policy loans	6,531,352	6,694,148
Insurance assignments	36,301,739	33,548,079
Federal Home Loan Bank stock	689,400	662,100
Other investments at estimated fair value	3,219,622	1,765,752
Allowance for doubtful accounts on other investments and policy loans	(846,641)	(1,119,630)
Policy loans and other investments	45,895,472	41,599,246
Accrued investment income	3,644,077	2,972,596
Total investments	629,484,618	561,179,435
Promissory notes		48,797
Short-term investments at amortized cost		27,560,040
Residential Mortgage
Mortgage loans held for investment	102,527,111	58,593,622
Real estate held for investment, net of depreciation	68,329,917	76,191,985
Residential Construction
Mortgage loans held for investment	50,157,533	40,800,117
Commercial Loan
Mortgage loans held for investment	54,954,865	51,536,622
Real estate held for investment, net of depreciation	72,968,789	68,973,936
US Treasury and Government
HeldToMaturitySecuritiesEstimatedFairValue	53,709,470	4,657,982
Held-to-maturity Securities, Amortized Cost before Other than Temporary Impairment	54,077,069	4,475,065
Held-to-maturity Securities, Unrecognized Holding Gain	211,824	249,028
Held-to-maturity Securities, Unrecognized Holding Loss	(579,423)	(66,111)
US States and Political Subdivisions Debt Securities
HeldToMaturitySecuritiesEstimatedFairValue	5,884,535	6,037,490
Held-to-maturity Securities, Amortized Cost before Other than Temporary Impairment	5,843,176	6,017,225
Held-to-maturity Securities, Unrecognized Holding Gain	112,372	153,514
Held-to-maturity Securities, Unrecognized Holding Loss	(71,013)	(133,249)
Corporate Debt Securities
HeldToMaturitySecuritiesEstimatedFairValue	171,679,675	171,089,612
Held-to-maturity Securities, Amortized Cost before Other than Temporary Impairment	158,350,727	164,375,636
Held-to-maturity Securities, Unrecognized Holding Gain	14,336,452	10,440,989
Held-to-maturity Securities, Unrecognized Holding Loss	(1,007,504)	(3,727,013)
Collateralized Mortgage Backed Securities
HeldToMaturitySecuritiesEstimatedFairValue	9,551,537	9,428,612
Held-to-maturity Securities, Amortized Cost before Other than Temporary Impairment	9,503,016	9,488,083
Held-to-maturity Securities, Unrecognized Holding Gain	210,652	221,400
Held-to-maturity Securities, Unrecognized Holding Loss	(162,131)	(280,871)
Redeemable Preferred Stock
HeldToMaturitySecuritiesEstimatedFairValue	673,192	637,053
Held-to-maturity Securities, Amortized Cost before Other than Temporary Impairment	623,635	623,635
Held-to-maturity Securities, Unrecognized Holding Gain	49,748	13,418
Held-to-maturity Securities, Unrecognized Holding Loss	(191)
Industrial, miscellaneous and all other equity securities
Available-for-sale Securities, Amortized Cost Basis	6,002,931	10,323,238
Available-for-sale Debt Securities Gross Unrealized Gain	667,593	447,110
Available-for-sale Debt Securities, Gross Unrealized Loss	(632,669)	(859,092)
AvailableForSaleSecuritiesEstimatedFairValue	6,037,855	9,911,256
Equity Securities
Available-for-sale Securities, Amortized Cost Basis	6,002,931	10,323,238
Available-for-sale Debt Securities Gross Unrealized Gain	667,593	447,110
Available-for-sale Debt Securities, Gross Unrealized Loss	(632,669)	(859,092)
AvailableForSaleSecuritiesEstimatedFairValue	$ 6,037,855	$ 9,911,256

2) Investments: Schedule of Unrealized Loss on Investments (Details)	12 Months Ended
	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Held-to-maturity Securities, Unrecognized Holding Loss	$ 1,820,262	$ 4,207,244
Held-to-maturity Securities, Fair Value	83,639,680	64,910,462
Available For Sale Securities Fair Value	2,176,931	3,749,018
US Treasury and Government
Held-to-maturity Securities, Unrecognized Holding Loss	579,423	66,111
Held-to-maturity Securities, Fair Value	52,250,079	1,342,088
US States and Political Subdivisions Debt Securities
Held-to-maturity Securities, Unrecognized Holding Loss	71,013	133,249
Held-to-maturity Securities, Fair Value	2,439,903	3,686,856
Corporate Debt Securities
Held-to-maturity Securities, Unrecognized Holding Loss	1,007,504	3,727,013
Held-to-maturity Securities, Fair Value	24,745,123	54,765,151
Collateralized Mortgage Backed Securities
Held-to-maturity Securities, Unrecognized Holding Loss	162,131	280,871
Held-to-maturity Securities, Fair Value	4,193,154	5,116,367
Redeemable Preferred Stock
Held-to-maturity Securities, Unrecognized Holding Loss	191
Held-to-maturity Securities, Fair Value	11,421
Industrial, miscellaneous and all other equity securities
Available-for-sale Debt Securities, Gross Unrealized Loss	632,669	859,092
Equity Securities
Available-for-sale Debt Securities, Gross Unrealized Loss	632,669	859,092
Less than 12 months
Held-to-maturity Securities, Unrecognized Holding Loss	757,039	2,104,387
Held-to-maturity Securities, Fair Value	65,901,527	51,001,049
Available For Sale Securities Fair Value	847,718	2,063,144
Less than 12 months \| US Treasury and Government
Held-to-maturity Securities, Unrecognized Holding Loss	532,010	66,111
Held-to-maturity Securities, Fair Value	51,606,699	1,342,088
Less than 12 months \| US States and Political Subdivisions Debt Securities
Held-to-maturity Securities, Unrecognized Holding Loss	296	133,249
Held-to-maturity Securities, Fair Value	214,882	3,686,856
Less than 12 months \| Corporate Debt Securities
Held-to-maturity Securities, Unrecognized Holding Loss	167,786	1,728,312
Held-to-maturity Securities, Fair Value	11,551,865	41,796,016
Less than 12 months \| Collateralized Mortgage Backed Securities
Held-to-maturity Securities, Unrecognized Holding Loss	56,756	176,715
Held-to-maturity Securities, Fair Value	2,516,660	4,176,089
Less than 12 months \| Redeemable Preferred Stock
Held-to-maturity Securities, Unrecognized Holding Loss	191
Held-to-maturity Securities, Fair Value	11,421
Less than 12 months \| Industrial, miscellaneous and all other equity securities
Available-for-sale Debt Securities, Gross Unrealized Loss	$ 213,097	$ 215,563
No. of Investment Positions	98	124
Less than 12 months \| Equity Securities
Available-for-sale Debt Securities, Gross Unrealized Loss	$ 213,097	$ 215,563
No. of Investment Positions	98	124
More than 12 months
Held-to-maturity Securities, Unrecognized Holding Loss	$ 1,063,223	$ 2,102,857
Held-to-maturity Securities, Fair Value	17,738,153	13,909,413
Available For Sale Securities Fair Value	1,329,213	1,685,874
More than 12 months \| US Treasury and Government
Held-to-maturity Securities, Unrecognized Holding Loss	47,413
Held-to-maturity Securities, Fair Value	643,380
More than 12 months \| US States and Political Subdivisions Debt Securities
Held-to-maturity Securities, Unrecognized Holding Loss	70,717
Held-to-maturity Securities, Fair Value	2,225,021
More than 12 months \| Corporate Debt Securities
Held-to-maturity Securities, Unrecognized Holding Loss	839,718	1,998,701
Held-to-maturity Securities, Fair Value	13,193,258	12,969,135
More than 12 months \| Collateralized Mortgage Backed Securities
Held-to-maturity Securities, Unrecognized Holding Loss	105,375	104,156
Held-to-maturity Securities, Fair Value	1,676,494	940,278
More than 12 months \| Industrial, miscellaneous and all other equity securities
Available-for-sale Debt Securities, Gross Unrealized Loss	$ 419,572	$ 643,529
No. of Investment Positions	81	104
More than 12 months \| Equity Securities
Available-for-sale Debt Securities, Gross Unrealized Loss	$ 419,572	$ 643,529
No. of Investment Positions	81	104

2) Investments: Fixed Maturity Securities - Additional (Details) - Fixed Maturities - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Average market value over amortized cost	97.90%	93.90%
Other than Temporary Impairment Losses, Investments, Portion Recognized in Earnings, Net, Available-for-sale Securities	$ 493,371	$ 100,000

2) Investments: Equity Securities - Additional (Details) - Equity Securities - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Average Market Value of Security over initial investment	77.50%	81.40%
Other than Temporary Impairment Losses, Investments, Portion Recognized in Earnings, Net, Available-for-sale Securities	$ 280,968	$ 170,358

2) Investments: Gain (Loss) on Investments (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Gains and losses and other than temporary impairments from investments and other assets	$ (3,722,821)	$ (446,745)
Held-to-maturity Securities
Gross Realized Gains	179,182	389,558
Gross Realized Losses	(893,567)	(132,124)
Other than Temporary Impairments	(493,371)	(100,000)
Available-for-sale Securities
Gross Realized Gains	166,950	221,817
Gross Realized Losses	(76,475)	(61,242)
Other than Temporary Impairments	(280,968)	(170,358)
Other Assets
Gross Realized Gains	3,410,076	349,252
Gross Realized Losses	$ (5,734,648)	$ (943,648)

2) Investments: Fixed Maturity Securities - Carrying Amount and Net Realized Gain (Details) - Held-to-maturity Securities - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Net carrying amount for sales of securities	$ 2,932,961	$ 2,380,027
Net realized gain related to sales of securities	$ 463,892	$ 155,346

2) Investments (Details) - USD ($)	12 Months Ended
2) Investments (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Realized losses on investments and other assets	$ (2,948,482)	$ (176,387)
Commercial Real Estate 1
Pledged Assets Separately Reported, Other Assets Pledged as Collateral, at Fair Value	64,704,000	51,507,000
Bank Loans	40,994,000	21,831,000
Realized losses on investments and other assets	5,350,967	900,000
Residential Real Estate 1
Pledged Assets Separately Reported, Other Assets Pledged as Collateral, at Fair Value	34,431,000	35,798,000
Bank Loans	26,773,000	27,377,000
Foreclosed Residential Real Estate included in Residential Real Estate Held for Investment	$ 33,372,228	$ 39,856,434

2) Investments: Real Estate Owned and Occupied by the Company (Details)	Dec. 31, 2017
Corporate Office, Life Insurance and Cemetery/Mortuary Operations
Approximate Square Footage	36,000
Square Footage Occupied by the Company	100.00%
Mortgage Operations
Approximate Square Footage	36,899
Square Footage Occupied by the Company	34.00%
Life Insurance Operations
Approximate Square Footage	21,521
Square Footage Occupied by the Company	27.00%
Mortgage Sales
Approximate Square Footage	78,978
Square Footage Occupied by the Company	19.00%

2) Investments: The Following Is A Summary of The Allowance For Loan Losses As A Contra-asset Account For The Periods Presented (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Financing Receivable, Allowance for Credit Losses, Beginning Balance	$ 1,748,783	$ 1,848,120
Allowance for credit losses, Charge-offs	(416,251)	(420,135)
Allowance for credit losses, Provision	436,264	320,798
Financing Receivable, Allowance for Credit Losses, Ending Balance	1,768,796	1,748,783
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment	237,560	187,470
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	1,531,236	1,561,313
Mortgage loans	207,639,509	150,930,361
Financing Receivable, Individually Evaluated for Impairment	5,385,386	3,184,425
Financing Receivable, Collectively Evaluated for Impairment	202,254,123	147,745,936
Commercial Loan
Financing Receivable, Allowance for Credit Losses, Beginning Balance	187,129	187,129
Financing Receivable, Allowance for Credit Losses, Ending Balance	187,129	187,129
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	187,129	187,129
Mortgage loans	54,954,865	51,536,622
Financing Receivable, Individually Evaluated for Impairment		202,992
Financing Receivable, Collectively Evaluated for Impairment	54,954,865	51,333,630
Residential Mortgage
Financing Receivable, Allowance for Credit Losses, Beginning Balance	1,461,540	1,560,877
Allowance for credit losses, Charge-offs	(351,357)	(420,135)
Allowance for credit losses, Provision	436,264	320,798
Financing Receivable, Allowance for Credit Losses, Ending Balance	1,546,447	1,461,540
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment	237,560	187,470
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	1,308,887	1,274,070
Mortgage loans	102,527,111	58,593,622
Financing Receivable, Individually Evaluated for Impairment	4,923,552	2,916,538
Financing Receivable, Collectively Evaluated for Impairment	97,603,559	55,677,084
Residential Construction
Financing Receivable, Allowance for Credit Losses, Beginning Balance	100,114	100,114
Allowance for credit losses, Charge-offs	(64,894)
Financing Receivable, Allowance for Credit Losses, Ending Balance	35,220	100,114
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	35,220	100,114
Mortgage loans	50,157,533	40,800,117
Financing Receivable, Individually Evaluated for Impairment	461,834	64,895
Financing Receivable, Collectively Evaluated for Impairment	$ 49,695,699	$ 40,735,222

2) Investments: Summary of Interest not accrued on non-performing mortgage loans (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Details
Interest not acrued on non-performing loans	$ 204,083	$ 172,000

2) Investments: Schedule of Mortgate loans on a nonaccrual status (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest	$ 5,385,386	$ 3,184,425
Commercial Loan
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest		202,992
Residential Mortgage
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest	4,923,552	2,916,538
Residential Construction
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest	$ 461,834	$ 64,895

2) Investments: Schedule of Principal amounts due on mortgage loans held for investment by category (Details)	Dec. 31, 2017 USD ($)
Mortgage Loans Principal Amount due	$ 207,639,509
Residential Mortgage
Mortgage Loans Principal Amount due	102,527,111
Residential Construction
Mortgage Loans Principal Amount due	50,157,533
Commercial Loan
Mortgage Loans Principal Amount due	54,954,865
DueInNextYearMember
Mortgage Loans Principal Amount due	84,909,043
DueInNextYearMember \| Residential Mortgage
Mortgage Loans Principal Amount due	5,454,776
DueInNextYearMember \| Residential Construction
Mortgage Loans Principal Amount due	42,763,420
DueInNextYearMember \| Commercial Loan
Mortgage Loans Principal Amount due	36,690,847
DueInYearsTwoThroughFiveMember
Mortgage Loans Principal Amount due	64,064,250
DueInYearsTwoThroughFiveMember \| Residential Mortgage
Mortgage Loans Principal Amount due	40,995,574
DueInYearsTwoThroughFiveMember \| Residential Construction
Mortgage Loans Principal Amount due	7,394,113
DueInYearsTwoThroughFiveMember \| Commercial Loan
Mortgage Loans Principal Amount due	15,674,563
DueThereafterMember
Mortgage Loans Principal Amount due	58,666,216
DueThereafterMember \| Residential Mortgage
Mortgage Loans Principal Amount due	56,076,761
DueThereafterMember \| Commercial Loan
Mortgage Loans Principal Amount due	$ 2,589,455

3) Loans Held For Sale: Schedule of Derivative Assets at Fair Value (Details)	Dec. 31, 2017 USD ($)
Details
Loans Held-for-sale, Fair Value Disclosure	$ 133,414,188
Aggregate unpaid principal balance - Loans Held for Sale	129,233,411
Unrealized gain - Loans Held for Sale	$ 4,180,777

3) Loans Held For Sale: Schedule of Mortgage Fee Income for Loans Held for Sale (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Interest and Other Income	$ 7,089,025	$ 8,004,952
Net change in fair value of loans held for sale	4,180,777
Mortgage fee income	153,797,171	189,146,639
LoansHeldForSaleMember
Loan fees	40,434,686	44,341,501
Secondary gains	108,756,613	140,651,103
Net change in fair value of loan commitments	(4,812,743)	(862,163)
Net change in fair value of loans held for sale	4,180,777
Provision for loan loss reserve	(1,851,187)	(2,988,754)
Mortgage fee income	$ 153,797,171	$ 189,146,639

5) Value of Business Acquired and Goodwill: Net amortization charged to income (Details) - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Details
Value of business acquired - net amortization charged to income	$ 663,000	$ 713,000	$ 766,000	$ 854,000	$ 919,000	$ 981,541	$ 1,173,473

6) Property and Equipment: Property, Plant and Equipment (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Property, Plant and Equipment, Gross	$ 25,641,706	$ 28,704,186
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	(17,572,326)	(19,912,664)
Property and equipment, net	8,069,380	8,791,522
Land and Building
Property, Plant and Equipment, Gross	8,689,302	9,155,665
Office Equipment
Property, Plant and Equipment, Gross	$ 16,952,404	$ 19,548,521

6) Property and Equipment (Details) - USD ($)	12 Months Ended
6) Property and Equipment (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Details
Property, Plant and Equipment, Other, Accumulated Depreciation	$ 2,220,693	$ 2,182,724
Transfer of cemetery land and improvements to property and equipment	$ 643,329

7) Bank and Other Loans Payable (Details) - USD ($)	12 Months Ended
7) Bank and Other Loans Payable (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Interest expense	$ 6,037,332	$ 5,111,868
RevolvingLineOfCredit1Member
Line of Credit Facility, Description	The Company has a $2,000,000 revolving line-of-credit with a bank with interest payable at the prime rate minus .75%
Line of Credit Facility, Maximum Borrowing Capacity	$ 2,000,000
Line of Credit Facility, Interest Rate at Period End		3.75%
Line of Credit Facility, Collateral	secured by the capital stock of Security National Life
RevolvingLineOfCredit2Member
Line of Credit Facility, Description	The Company also has a $2,500,000 revolving line-of-credit with a bank with interest payable at the overnight LIBOR rate plus 2.25% (3.68% at December 31, 2017
Line of Credit Facility, Maximum Borrowing Capacity	$ 2,500,000
MortgageWarehouseLineOfCredit1
Line of Credit Facility, Description	The Company, through its subsidiary SecurityNational Mortgage, has a $100,000,000 line of credit with Wells Fargo Bank N.A. The agreement charges interest at the 1-Month LIBOR rate plus 3% and matures on June 16, 2018.
Line of Credit Facility, Maximum Borrowing Capacity	$ 100,000,000
MortgageWarehouseLineOfCredit2
Line of Credit Facility, Description	The Company, through its subsidiary SecurityNational Mortgage, also uses a line of credit with Texas Capital Bank N.A. This agreement with the bank allows SecurityNational Mortgage to borrow up to $100,000,000 for the sole purpose of funding mortgage loans. SecurityNational Mortgage is currently approved to borrow $30,000,000 of the $100,000,000 available. The agreement charges interest at the 1-Month LIBOR rate plus 3% and matures on September 7, 2018.
Line of Credit Facility, Maximum Borrowing Capacity	$ 100,000,000

7) Bank and Other Loans Payable: Schedule of combined maturities of bank loans payable, lines of credit and notes and contracts payable (Details)	Dec. 31, 2017 USD ($)
Bank loans payable, lines of credit and notes and contracts payable	$ 157,450,925
DueInYearOneMember
Bank loans payable, lines of credit and notes and contracts payable	88,437,940
DueInYearTwoMember
Bank loans payable, lines of credit and notes and contracts payable	55,674,420
DueInYearThreeMember
Bank loans payable, lines of credit and notes and contracts payable	1,085,699
DueInYearFourMember
Bank loans payable, lines of credit and notes and contracts payable	3,456,607
DueInYearFiveMember
Bank loans payable, lines of credit and notes and contracts payable	326,923
DueInYearThereafterMember
Bank loans payable, lines of credit and notes and contracts payable	$ 8,469,336

8) Cemetery Perpetual Care Trust Investments and Obligation and Restricted Assets: Schedule of the components of the cemetery perpetual care obligation (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Details
Cemetery perpetual care obligation, Cash and Cash Equivalents	$ 997,498	$ 865,699
Cemetery perpetual care obligation, Fixed maturity securities, held to maturity, at amortized cost	943,211	885,729
Fair value of cemetery perpetual care trust investments	682,315	698,202
Cemetery perpetual care obligation, Participating interests in mortgage loans held for investment with Security National Life	4,128	3,821
Cemetery perpetual care obligation, Real estate	1,996,411	1,678,434
Cemetery perpetual care obligation, note receivables eliminated in consolidation	1,667,621	1,725,714
Cemetery perpetual care obligation, trust investments	6,291,184	5,857,599
Cemetery perpetual care obligation	(3,710,740)	(3,598,580)
Cemetery perpetual care obligation, fair value of trust assets in excess of trust obligations	$ 2,580,444	$ 2,259,019

9) Income Taxes: Summary of Income Tax Liability (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Details
Current Income Tax Liability	$ (922,754)	$ (1,511,762)
Income Tax Liability	18,255,537	25,830,631
Income taxes	$ 17,332,783	$ 24,318,869

9) Income Taxes: Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($)	3 Months Ended				12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2017	Dec. 31, 2016
Details
Federal Income Tax Expense (Benefit), Continuing Operations					$ 934,647	$ 1,138,196
State and Local Income Tax Expense (Benefit), Continuing Operations					236,559	245,764
Current Income Tax Expense (Benefit)					1,171,206	1,383,960
Deferred Federal Income Tax Expense (Benefit)					(7,811,030)	5,686,651
Deferred State and Local Income Tax Expense (Benefit)					59,002	443,993
Provision for deferred income taxes					(7,752,028)	6,130,644
Income tax benefit (expense)	$ (9,168,206)	$ 41,179	$ 1,508,435	$ 1,037,770	$ (6,580,822)	$ 7,514,604

9) Income Taxes (Details)	12 Months Ended
9) Income Taxes (Details)	Dec. 31, 2017	Dec. 31, 2016
Details
Effective Income Tax Rate Reconciliation, Percent	(87.40%)	38.10%

9) Income Taxes: Summary of Operating Loss Carryforwards (Details)	Dec. 31, 2017 USD ($)
Deferred Tax Assets, Operating Loss Carryforwards, Subject to Expiration	$ 2,684,518
Year of Expiration: 2019
Deferred Tax Assets, Operating Loss Carryforwards, Subject to Expiration	229,201
Year of Expiration: 2020
Deferred Tax Assets, Operating Loss Carryforwards, Subject to Expiration	114,601
Year of Expiration: 2021
Deferred Tax Assets, Operating Loss Carryforwards, Subject to Expiration	17,101
Year of Expiration: Thereafter up through 2037
Deferred Tax Assets, Operating Loss Carryforwards, Subject to Expiration	$ 2,323,615

10) Reinsurance, Commitments and Contingencies: Reinsurance (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
UnauditedMember
Insurance assumed from other companies	$ 106,000,000	$ 110,000,000

10) Reinsurance, Commitments and Contingencies: Mortgage Loan Loss Settlements (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Details
Amounts accrued for loan losses	$ 2,572,000	$ 628,000

10) Reinsurance, Commitments and Contingencies: Schedule of Future Minimum Rental Payments for Operating Leases (Details)	Dec. 31, 2017 USD ($)
Details
Operating Leases, Future Minimum Payments Due, Next Twelve Months	$ 4,825,139
Operating Leases, Future Minimum Payments, Due in Two Years	3,371,267
Operating Leases, Future Minimum Payments, Due in Three Years	1,705,632
Operating Leases, Future Minimum Payments, Due in Four Years	847,504
Operating Leases, Future Minimum Payments, Due in Five Years	26,357
Operating Leases, Future Minimum Payments Due	$ 10,775,899

10) Reinsurance, Commitments and Contingencies: Other Contingencies and Commitments (Details)	Dec. 31, 2017 USD ($)
Details
Commitments to fund new residential construction loans	$ 78,967,000
Commitments to fund new residential construction loans funded	$ 50,158,000

11) Retirement Plans: Noncontributory Employee Stock Ownership Plan (ESOP) (Details) - EmployeeStockOwnershipPlanESOPMember	12 Months Ended
	Dec. 31, 2017 shares
Employee Stock Ownership Plan (ESOP), Plan Description	The Company and its subsidiaries have a noncontributory Employee Stock Ownership Plan (“ESOP”) for all eligible employees. Eligible employees are primarily those with more than one year of service, who work in excess of 1,000 hours per year. Contributions, which may be in cash or stock of the Company, are determined annually by the Board of Directors. The Company’s contributions are allocated to eligible employees based on the ratio of each eligible employee’s compensation to total compensation for all eligible employees during each year.
Class A Common Stock
Employee Stock Ownership Plan (ESOP), Shares in ESOP	518,517
Class C Common Stock
Employee Stock Ownership Plan (ESOP), Shares in ESOP	278,904

11) Retirement Plans: 401(k) Plans (Details) - USD ($)	12 Months Ended
11) Retirement Plans: 401(k) Plans (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Defined Contribution Plan, Description	The Company has three 401(k) savings plans covering all eligible employees, as defined above, which includes employer participation in accordance with the provisions of Section 401(k) of the Internal Revenue Code. The plans allow participants to make pretax contributions up to a maximum of $18,000 and $18,000 for the years 2017 and 2016, respectively or the statutory limits.
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Amount	$ 18,000	$ 18,000
SafeHarborPlanMember
Contribution to Retirement Plan	$ 1,534,861	$ 1,429,962