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Note 2 - Investments

3 Months Ended

Mar. 31, 2026

Note 2.

Investments

Fixed Maturity

The amortized cost and fair value of available for sale investments as of March 31, 2026 and December 31, 2025 is as follows:

March 31, 2026

Cost or

Gross

Amortized

Unrealized

Cost

Gains

Losses

Fair Value

(unaudited)

Available for sale:

Fixed maturities:

US Treasury securities

809,794

(82,997

)

726,797

Corporate bonds

30,375,995

102,327

(2,919,393

)

27,558,929

Municipal bonds

6,328,396

130

(574,165

)

5,754,361

Redeemable preferred stock

1,669,244

(177,443

)

1,491,801

Term loans

12,244,604

30,171

(181,390

)

12,093,385

Mortgage backed and asset backed securities

41,041,765

429,717

(833,342

)

40,638,140

Total available for sale

92,469,798

562,345

(4,768,730

)

88,263,413

December 31 2025

Cost or

Gross

Amortized

Unrealized

Cost

Gains

Losses

Fair Value

Available for sale:

Fixed maturities:

US Treasury securities

810,255

1,562

(78,925

)

732,892

Corporate bonds

30,702,897

218,634

(2,622,315

)

28,299,216

Municipal bonds

6,341,809

1,735

(536,408

)

5,807,136

Redeemable preferred stock

2,142,141

3,788

(147,491

)

1,998,438

Term loans

11,187,284

10,032

(191,512

)

11,005,804

Mortgage backed and asset backed securities

38,852,468

638,213

(799,463

)

38,691,218

Total available for sale

90,036,854

873,964

(4,376,114

)

86,534,704

The amortized cost and fair value of debt securities as of March 31, 2026 and December 31, 2025, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	As of March 31, 2026				As of December 31, 2025
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(unaudited)
Amounts maturing in:
One year or less	$	374,235	$	372,441	$	1,074,089	$	1,072,360
After one year through five years		25,664,377		25,513,104		23,367,252		23,263,307
After five years through ten years		4,233,458		4,033,331		4,878,273		4,797,585
More than 10 years		19,486,719		16,214,595		19,722,631		16,711,796
Redeemable preferred stocks		1,669,244		1,491,801		2,142,141		1,998,438
Mortgage backed and asset backed securities		41,041,765		40,638,141		38,852,468		38,691,218
Total amortized cost and fair value	$	92,469,798	$	88,263,413	$	90,036,854	$	86,534,704

Proceeds from the sale of securities, maturities, and asset paydowns in the three months ended March 31, 2026 and 2025 were $2,813,005 and $3,712,625 respectively. With the revision of ASC 326, changes in the allowance for credit losses is included in net gains (losses). Realized gains and losses related to the sale of securities and net credit losses recognized in income are summarized as follows:

	Three Months Ended March 31,
	(unaudited)
	2026			2025
Gross gains	$	17,014		$	-
Gross losses		(35,556	)		(476,146	)
Net security losses	$	(18,542	)	$	(476,146	)


Mortgage loans on real estate		(88,501	)		(432,975	)
Increase in allowance for credit losses	$	(88,501	)	$	(432,975	)

Gross unrealized losses by duration are summarized as follows:

Less than 12 months

Greater than 12 months

Total

Fair

Unrealized

Fair

Unrealized

Fair

Unrealized

Value

Loss

Value

Loss

Value

Loss

March 31, 2026

(unaudited)

Available for sale:

Fixed maturities:

US Treasury securities

449,896

(1,082

)

276,901

(81,915

)

726,797

(82,997

)

Corporate bonds

12,992,131

(179,871

)

11,702,480

(2,739,522

)

24,694,611

(2,919,393

)

Municipal bonds

1,591,559

(41,535

)

4,062,792

(532,630

)

5,654,351

(574,165

)

Redeemable preferred stock

74,156

(389

)

1,343,770

(177,054

)

1,417,926

(177,443

)

Term loans

5,735,961

(181,390

)

5,735,961

(181,390

)

Mortgage backed and asset backed securities

16,550,714

(220,523

)

5,805,169

(612,819

)

22,355,883

(833,342

)

Total fixed maturities

31,658,456

(443,400

)

28,927,073

(4,325,330

)

60,585,529

(4,768,730

)

Less than 12 months

Greater than 12 months

Total

Fair

Unrealized

Fair

Unrealized

Fair

Unrealized

Value

Loss

Value

Loss

Value

Loss

December 31, 2025

Available for sale:

Fixed maturities:

US Treasury securities

280,278

(78,925

)

280,278

(78,925

)

Corporate bonds

8,857,877

(122,197

)

12,403,317

(2,500,118

)

21,261,194

(2,622,315

)

Municipal bonds

1,163,445

(27,032

)

4,293,247

(509,376

)

5,456,692

(536,408

)

Redeemable preferred stock

1,521,302

(147,491

)

1,521,302

(147,491

)

Term loans

897,477

(1,338

)

6,843,379

(190,174

)

7,740,856

(191,512

)

Mortgage backed and asset backed securities

13,117,705

(178,342

)

6,120,275

(621,121

)

19,237,980

(799,463

)

Total fixed maturities

24,036,504

(328,909

)

31,461,798

(4,047,205

)

55,498,302

(4,376,114

)

Unrealized losses occur from market price declines due to changes in interest rates. The total number of available for sale fixed maturity securities in the investment portfolio in an unrealized loss position as of March 31, 2026 was 206, which represented an unrealized loss of $4,768,730 of the aggregate carrying value of those securities. The 206 securities breakdown as follows: 122 bonds, 70 mortgage and asset backed securities, 6 term loans, and 8 redeemable preferred stock. Management does not intend to sell and it is likely that management will not be required to sell before their anticipated recovery.

Mortgage Loans on Real Estate

The Company has invested in various mortgage loans through participation agreements with the original issuing entity. The Company’s mortgage loans by property type as of March 31, 2026 and December 31, 2025 are summarized as follows:

	March 31, 2026			December 31, 2025
	(unaudited)
Commercial mortgage loans by property type
Mixed use	$	4,547,207		$	4,352,463
Lodging		2,697,304			2,819,346
Multi-property		1,323,332			866,514
Multi-family		2,676,260			2,678,271
Single-family		50,000			61,000
Industrial		800,000			800,000
Retail/Office		14,266,557			12,166,561
Total commercial mortgages	$	26,360,660		$	23,744,155
Allowance for credit losses		(187,619	)		(99,118	)
Carrying value	$	26,173,041		$	23,645,037

The Company’s mortgage loans by loan-to-value ratio as of March 31, 2026 and December 31, 2025 are summarized as follows:

	March 31, 2026			December 31, 2025
	(unaudited)
Loan to value ratio
Over 80%	$	265,283		$	265,283
Over 70 to 80%		1,593,911			892,800
Over 60 to 70%		8,721,746			8,868,648
Over 50 to 60%		5,700,000			5,700,000
Over 40 to 50%		5,612,039			4,312,074
Over 30 to 40%		3,726,681			1,705,350
Over 20 to 30%		241,000			1,500,000
Over 10 to 20%		500,000			500,000
Total	$	26,360,660		$	23,744,155

Allowance for credit losses		(187,619	)		(99,118	)
Carrying value	$	26,173,041		$	23,645,037

The Company’s mortgage loans by maturity date as of March 31, 2026 and December 31, 2025 are summarized as follows:

	March 31, 2026			December 31, 2025
	(unaudited)
Maturity Date
One year or less	$	8,927,979		$	8,728,034
After one year through five years		17,432,681			15,016,121
Total	$	26,360,660		$	23,744,155

Allowance for credit losses		(187,619	)		(99,118	)
Carrying value	$	26,173,041		$	23,645,037

The Company evaluates commercial mortgage loans on a collective basis when similar risk characteristics exist and on an individual basis when such characteristics are not present. For individually evaluated loans where it is determined that it is not probable that all amounts due under the contractual terms will be collected, the Company measures expected credit losses based on the present value of expected future cash flows, discounted at the loan’s original effective interest rate. If repayment is expected to be provided solely through the sale or operation of the collateral, expected credit losses are measured based on the fair value of the collateral, adjusted for estimated costs to sell when appropriate. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the loans to present the net carrying value expected to be collected. Changes in the allowance are recognized through earnings as credit loss expense. Loans are written off against the allowance when deemed uncollectible.

The Company recorded realized losses by writing down two mortgage loans during the year ending December 31, 2025. The first mortgage loan has a principal amount after impairment of $265,283 that is secured by real estate. The loan originated on March 28, 2022 and has an original maturity date of April 10, 2024. We no longer accrue interest on this asset. It previously carried an interest rate of 6.95%. As of the reporting date, the borrower is 630 days past due on payments. Specifically, the borrower has missed payments for the following periods:

- Payment due on April 10, 2024 - $755,663 Principal Amount

As of the reporting date, the loan has past due payments totaling $755,663, which includes both principal and accrued interest. In accordance with FASB ASC 326, the Company has evaluated the loan for expected credit losses by considering the borrower’s historical payment behavior, current financial condition, and the fair value of the collateral securing the loan. Based on this assessment, the loan is determined to be collateral-dependent, as repayment is expected to be provided primarily through the operation or sale of the underlying collateral. The fair value of the collateral, net of estimated selling costs where applicable, is $490,380 less than the loan’s amortized cost basis. The Company established an initial allowance for this loan in March of 2025 and increased it in November of 2025. An increase in allowance for credit losses in the amount of $490,380 was recorded and was subsequently recorded as a charge-off.

The second mortgage loan has a principal amount after impairment of $515,248 that is secured by real estate. This asset represents a pool of individual loans. The loan was originated on October 22, 2020 and has various maturity dates and interest rates. We no longer accrue interest on this asset. As of the reporting date, there are 11 loans. Five out of the 11 loans are delinquent with a total outstanding loan amount of $134,695, and 4 real estate owned properties with an outstanding loan amount of $329,393. Specifically, the borrower has missed payments totaling $464,358. No interest is being accrued on these loans.

The Company has evaluated the loan for expected credit losses in accordance with FASB ASC 326. This evaluation considered the borrower’s historical payment performance, current financial condition, and the value of the collateral securing the loan. As part of this assessment, the Company determined that the loan is collateral-dependent, as repayment is expected to be provided primarily through the operation or sale of the underlying collateral. The fair value of the collateral, net of estimated costs to sell when applicable, is $193,473 less than the amortized cost basis of the loan. As a result, an allowance for credit losses of $193,473 was established in December of 2025 and was subsequently recorded as a charge-off.

Additionally, the Company had one mortgage loan participation with a specific allowance for credit losses of $250,000 as of March 31, 2025. This allowance was reversed based upon an updated third-party appraisal of the property, which showed the collateral value exceeded the amortized cost basis of the loan. The mortgage loan has a principal amount of $1,000,000 that is secured by real estate. The loan was originated on November 4, 2022 and had an original maturity date of December 1, 2025. The loan has been extended an additional nine months. It previously carried an interest rate of 8%. Payments due beginning in the second quarter of 2025 have been modified to a reduced interest rate of 5% with the lost interest capitalized into the principal of the loan. It is uncertain if the borrower will be able to continue to make payments.

The Company has evaluated the loan for expected credit losses in accordance with FASB ASC 326. As part of this assessment, the Company considered relevant information about the borrower’s current financial condition, historical payment performance, and the value of the collateral securing the loan. Based on this evaluation, the loan is determined to be collateral-dependent, and repayment is expected to be derived primarily from the operation or sale of the collateral. The fair value of the collateral, net of estimated costs to sell when applicable, exceeds the amortized cost basis of the loan by 40%. As such, no allowance for credit losses has been recorded as of the reporting date.

For mortgage loans on which the collection of interest income is uncertain, we discontinue the accrual of interest and recognize it in the period when an interest payment is received. We typically do not resume the accrual of interest on mortgage loans on nonaccrual status until there are significant improvements in the underlying financial condition of the borrower. We consider a loan to be delinquent if full payment is not received in accordance with the contractual terms of the loan.

The amount of the general loan allowance is based upon management's evaluation of the collectability of the loan portfolio, historical loss experience, delinquencies, credit concentrations, underwriting standards, and national and local economic conditions. The Company does not measure a credit loss allowance on accrued interest receivable, as we write off any uncollectible accrued interest receivable balance to net investment income in a timely manner. The Company did not charge off any uncollectible accrued interest receivable on our commercial mortgage loan portfolio during the three months ended March 31, 2026 and 2025.

The Company's commercial mortgage loans are pooled by risk rating and property collateral type and an estimated loss ratio is applied against each risk pool. The loss ratios are generally based upon historical loss experience for each risk pool and are adjusted for current and forecasted economic factors management believes to be relevant and supportable. Economic factors are forecasted for two years with immediate reversion to historical experience.

The following table presents a roll-forward of our general and specific valuation allowances for our commercial mortgage loan portfolio:

	Three Months Ended March 31, 2026				Three Months Ended March 31, 2025
	Specific Allowance		General Allowance		Specific Allowance			General Allowance
	(unaudited)				(unaudited)
Beginning allowance balance	$	-	$	99,118	$	-		$	55,685
Change in provision for credit losses		-		88,501		670,013			182,975
Charge-offs		-		-		(420,013	)		-
Ending Allowance	$	-	$	187,619	$	250,000		$	238,660

The following table presents a breakdown of our mortgage loans by aging category:

	As of March 31, 2026
	Outstanding Balance		Allowance for Credit Losses			Net Carrying Amount
	(unaudited)
Aging Category
Not past due (Current)	$	25,590,046	$	(184,560	)	$	25,405,486
1-30 days past due		-		-			-
31-60 days past due		-		-			-
61-90 day past due		-		-			-
Over 90 days past due		770,614		(3,059	)		767,555
Mortgage loan carrying value	$	26,360,660	$	(187,619	)	$	26,173,041

The Company will record an "intent-to-sell impairment" as a reduction to the amortized cost of available for sale fixed maturities in an unrealized loss position if the Company intends to sell or it is more likely than not that the Company will be required to sell the fixed maturity before a recovery in value. A corresponding charge is recorded in net realized losses equal to the difference between the fair value on the impairment date and the amortized cost basis of the fixed maturity before recognizing the impairment.

For fixed maturity securities where a credit loss has been identified and no intent-to-sell impairment has been recorded, the Company will record an allowance for credit loss ("ACL") for the portion of the unrealized loss related to a credit loss. Any remaining unrealized loss on a fixed maturity after recording an ACL is the non-credit amount is recorded in other comprehensive income. The ACL is the excess of the amortized cost over the greater of the Company's best estimate present value of the expected future cash flows or the security's fair value. Cash flows are discounted at the effective yield that is used to record interest income. The ACL cannot exceed the unrealized loss and, therefore, it may fluctuate with the changes in the fair value of the fixed maturity if the fair is greater than the Company's best estimate of the present value of expected future cash flows. The initial ACL and any subsequent changes are recorded in net realized gains and losses. The ACL is written off against amortized cost in the period in which all or a portion of the related fixed maturity is determined to be uncollectible.

Developing the Company's best estimate of expected future cash flows is a quantitative and qualitative process that incorporates information received from third party sources along with certain internal assumptions regarding the future performance. The Company's considerations include a) changes in the financial condition of the issuer and/or the underlying collateral, (b) whether the issuer is current on contractually obligated interest and principal payments, (c) credit ratings, (d) payment structure of the security, and (e) the extent to which the fair value has been less than the amortized cost of the security. For non-structured securities, assumptions included, but are not limited to, economic and industry specific trends and fundamentals, instrument specific developments including changes in credit ratings, industry earnings multiples, and the issuer's ability to restructure, access capital markets, and execute asset sales.

The Company did not record an ACL on fixed maturities in the three months ended March 31, 2026 and 2025.

Investment Income, Net of Expenses

The components of net investment income for the three months ended March 31, 2026 and 2025 are as follows:

	Three Months Ended March 31,
	2026			2025
	(unaudited)
Fixed maturities	$	1,390,994		$	1,337,626
Mortgages		549,848			440,895
Equity securities		52,004			69,477
Other invested assets		35,257			29,511
Cash and cash equivalents		112,826			66,332
		2,140,929			1,943,841
Less investment expenses		(109,708	)		(219,113	)
	$	2,031,221		$	1,724,728

Net Investment Gains (losses)

Net investment losses for the three months ended March 31, 2026 and 2025 are summarized as follows:

	Three Months Ended March 31,
	(unaudited)
	2026			2025
Recognized gains on sale of investments	$	(18,542	)	$	(56,133	)
Realized loss on charge offs of investments		-			(420,013	)
Change in allowance for credit loss recognized in earnings		(88,501	)		(432,975	)
Unrealized net gains recognized in earnings		(45,610	)		(21,790	)
Embedded derivative		40,846			(118,762	)
Net investment losses	$	(111,807	)	$	(1,049,673	)