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3) Investments

3 Months Ended

Mar. 31, 2016

Notes

3) Investments

3) Investments

The Company’s investments in fixed maturity securities held to maturity and equity securities available for sale as of March 31, 2016 are summarized as follows:

		Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
March 31, 2016
Fixed maturity securities held to maturity carried at amortized cost:
Bonds:
U.S. Treasury securities and obligations of U.S. Government agencies		$ 3,558,169		$ 378,157		$ -		$ 3,936,326
Obligations of states and political subdivisions		1,803,498		200,444		(455)		2,003,487
Corporate securities including public utilities		133,970,698		11,576,671		(4,997,905)		140,549,464
Mortgage-backed securities		7,501,609		303,697		(173,323)		7,631,983
Redeemable preferred stock		612,023		47,811		-		659,834
Total fixed maturity securities held to maturity		$ 147,445,997		$ 12,506,780		$ (5,171,683)		$ 154,781,094



Equity securities available for sale at estimated fair value:

Common stock:

Industrial, miscellaneous and all other		$ 10,051,680		$ 295,489		$ (1,405,937)		$ 8,941,232

Total equity securities available for sale at estimated fair value		$ 10,051,680		$ 295,489		$ (1,405,937)		$ 8,941,232

Mortgage loans on real estate and construction loans held for investment at amortized cost:
Residential		$ 53,488,217
Residential construction		42,926,820
Commercial		39,057,779
Less: Allowance for loan losses		(2,078,948)
Total mortgage loans on real estate and construction loans held for investment		$ 133,393,868

Real estate held for investment - net of depreciation		$ 116,700,727

Policy loans and other investments are shown at amortized cost except for other investments that are shown at estimated fair value:
Policy loans		$ 6,892,022
Insurance assignments		32,149,213
Promissory notes		48,797
Other investments at estimated fair value		1,222,188
Less: Allowance for doubtful accounts		(1,032,736)

Total policy loans and other investments		$ 39,279,484

Short-term investments at amortized cost		$ 17,809,307

The Company’s investments in fixed maturity securities held to maturity and equity securities available for sale as of December 31, 2015 are summarized as follows:

		Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
December 31, 2015:

Fixed maturity securities held to maturity carried at amortized cost:
Bonds:
U.S. Treasury securities and obligations of U.S. Government agencies		$ 3,560,579		$ 292,869		$ (4,743)		$ 3,848,705
Obligations of states and political subdivisions		1,805,828		182,073		(1,040)		1,986,861
Corporate securities including public utilities		134,488,108		9,836,355		(5,501,743)		138,822,720
Mortgage-backed securities		5,091,887		190,867		(75,580)		5,207,174
Redeemable preferred stock		612,023		29,675		-		641,698
Total fixed maturity securities held to maturity		$ 145,558,425		$ 10,531,839		$ (5,583,106)		$ 150,507,158



Equity securities available for sale at estimated fair value:

Common stock:

Industrial, miscellaneous and all other		$ 9,891,500		$ 213,683		$ (1,674,093)		$ 8,431,090

Total securities available for sale carried at estimated fair value		$ 9,891,500		$ 213,683		$ (1,674,093)		$ 8,431,090

Mortgage loans on real estate and construction loans held for investment at amortized cost:
Residential		$ 46,020,490
Residential construction		34,851,557
Commercial		33,522,978
Less: Allowance for loan losses		(1,848,120)

Total mortgage loans on real estate and construction loans held for investment		$ 112,546,905

Real estate held for investment - net of depreciation		$ 114,852,432

Policy loans and other investments are shown at amortized cost except for other investments that are shown at estimated fair value:
Policy loans		$ 6,896,457
Insurance assignments		32,369,014
Promissory notes		48,797
Other investments at estimated fair value		1,174,769
Less: Allowance for doubtful accounts		(906,616)

Total policy loans and other investments		$ 39,582,421

Short-term investments at amortized cost		$ 16,915,808

Fixed Maturity Securities

The following tables summarize unrealized losses on fixed maturity securities, which are carried at amortized cost, at March 31, 2016 and December 31, 2015. The unrealized losses were primarily related to interest rate fluctuations. The tables set forth unrealized losses by duration and number of investment positions, together with the fair value of the related fixed maturity securities:

		Unrealized Losses for Less than Twelve Months		No. of Investment Positions		Unrealized Losses for More than Twelve Months		No. of Investment Positions		Total Unrealized Loss
At March 31, 2016
U.S. Treasury Securities and Obligations of U.S. Government Agencies		$ -		0		$ -		0		$ -
Obligations of states and political subdivisions		-		0		455		1		455
Corporate securities including public utilities		2,267,982		70		2,729,923		25		4,997,905
Mortgage-backed securities		173,323		6		-		0		173,323
Total unrealized losses		$ 2,441,305		76		$ 2,730,378		26		$ 5,171,683
Fair Value		$ 21,751,797				$ 6,404,000				$ 28,155,797

At December 31, 2015
U.S. Treasury Securities and Obligations of U.S. Government Agencies		$ 4,743		2		$ -		0		$ 4,743
Obligations of states and political subdivisions		-		0		1,040		1		1,040
Corporate securities including public utilities		3,701,572		98		1,800,171		18		5,501,743
Mortgage-backed securities		75,580		4		-		0		75,580
Total unrealized losses		$ 3,781,895		104		$ 1,801,211		19		$ 5,583,106
Fair Value		$ 34,076,401				$ 3,809,957				$ 37,886,358

The average market value of the related fixed maturities was 84.5% and 87.2% of amortized cost as of March 31, 2016 and December 31, 2015, respectively. During the three months ended March 31, 2016 and 2015 an other than temporary decline in fair value resulted in the recognition of credit losses on fixed maturity securities of $30,000 for each reporting period.

On a quarterly basis, the Company reviews its available for sale and held to maturity fixed investment securities related to corporate securities and other public utilities, consisting of bonds and preferred stocks that are in a loss position. The review involves an analysis of the securities in relation to historical values, and projected earnings and revenue growth rates. 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 investment will recover from the loss position, the loss is considered to be other than temporary, the security is written down to the impaired value and an impairment loss is recognized.

Equity Securities

The following tables summarize unrealized losses on equity securities that were carried at estimated fair value based on quoted trading prices at March 31, 2016 and December 31, 2015. The unrealized losses were primarily the result of decreases in fair value due to overall equity market declines. 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 March 31, 2016
Industrial, miscellaneous and all other		$ 798,607		180		$ 607,330		68		$ 1,405,937
Total unrealized losses		$ 798,607		180		$ 607,330		68		$ 1,405,937
Fair Value		$ 3,955,133				$ 1,154,812				$ 5,109,945

At December 31, 2015
Industrial, miscellaneous and all other		$ 997,862		222		$ 676,232		74		$ 1,674,093
Total unrealized losses		$ 997,862		222		$ 676,232		74		$ 1,674,093
Fair Value		$ 4,177,709				$ 760,860				$ 4,938,569

The average market value of the equity securities available for sale was 78.4% and 74.7% of the original investment as of March 31, 2016 and December 31, 2015, 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 three months ended March 31, 2016 and 2015, an other than temporary decline in the fair value resulted in the recognition of an impairment loss on equity securities of $43,630 and $25,896, respectively.

On a quarterly basis, the Company reviews its investment in industrial, miscellaneous and all other equity securities that are in a loss position. The review involves an analysis of the securities in relation to historical values, price earnings ratios, projected earnings and revenue growth rates. 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 investment will recover from the loss position, the loss is considered to be other than temporary, the security is written down to the impaired value and an impairment loss is recognized.

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

The amortized cost and estimated fair value of fixed maturity securities at March 31, 2016, 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 Cost		Estimated Fair Value
Held to Maturity:
Due in 2016		$ 4,298,647		$ 4,345,102
Due in 2017 through 2020		33,393,520		35,451,062
Due in 2021 through 2025		35,564,893		37,200,353
Due after 2025		66,075,305		69,492,760
Mortgage-backed securities		7,501,609		7,631,983
Redeemable preferred stock		612,023		659,834
Total held to maturity		$ 147,445,997		$ 154,781,094

The cost and estimated fair value of available for sale securities at March 31, 2016, 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. Equities are valued using the specific identification method.

		Cost		Estimated Fair Value
Available for Sale:
Common stock		$ 10,051,680		$ 8,941,232
Total available for sale		$ 10,051,680		$ 8,941,232

The Company’s realized gains and losses and other than temporary impairments from investments and other assets, are summarized as follows:

		Three Months Ended March 31
		2016		2015
Fixed maturity securities held to maturity:
Gross realized gains		$ -		$ 85,997
Gross realized losses		(24,795)		(9,776)
Other than temporary impairments		(30,000)		(30,000)

Securities available for sale:
Gross realized gains		63,495		87,720
Gross realized losses		(23,878)		(1,016)
Other than temporary impairments		(43,630)		(25,896)

Other assets:
Gross realized gains		84,768		257,139
Gross realized losses		(1,668)		-
Total		$ 24,292		$ 364,168

The net carrying amount of held to maturity securities sold was $-0- and $257,962 for the three months ended March 31, 2016 and 2015, respectively. The net realized gain related to these sales was $-0- and $8,962 for the three months ended March 31, 2016 and 2015, respectively.

There were no investments, aggregated by issuer, in excess of 10% of shareholders’ equity (before net unrealized gains and losses on available for sale securities) at March 31, 2016, other than investments issued or guaranteed by the United States Government.

Major categories of net investment income are as follows:

	Three Months Ended March 31
	2016		2015
Fixed maturity securities	$ 2,050,569		$ 1,980,696
Equity securities	71,041		59,418
Mortgage loans on real estate	2,026,515		1,874,158
Real estate	2,838,484		2,120,650
Policy loans	182,206		188,546
Insurance assignments	3,104,788		2,789,006
Short-term investments, principally interest on sale of mortgage loans and other	1,863,144		1,511,095
Gross investment income	12,136,747		10,523,569
Investment expenses	(3,144,556)		(2,700,725)
Net investment income	$ 8,992,191		$ 7,822,844

Net investment income includes income earned by the restricted assets of the cemeteries and mortuaries of $87,976 and $92,922 for the three months ended March 31, 2016 and 2015, respectively.

Net investment income on real estate consists primarily of rental revenue.

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 $8,813,368 at March 31, 2016 and $8,815,542 at December 31, 2015. The restricted securities are included in various assets under investments on the accompanying condensed consolidated balance sheets.

Real Estate

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 units in the form of acquisition, development and foreclosures on delinquent mortgage loans.

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 10 commercial properties in 7 states. These properties include industrial warehouses, office building and retail centers. The assets are primarily held without debt; however, the Company does use debt in strategic cases to leverage established yields or to acquire higher quality, or class, of asset.

The following is a summary of the Company’s investment in commercial real estate for the periods presented:

		Net Ending Balance				Total Square Footage
		March 31		December 31		March 31		December 31
		2016		2015		2016		2015
Arizona		$ 460,465	(1)	$ 463,774	(1)	16,270		16,270
Arkansas		103,527		-		3,200		-
Kansas		11,720,154		11,537,335		222,679		222,679
Mississippi		3,152,040		-		21,521		-
New Mexico		7,000	(1)	7,000	(1)	-		-
Texas		3,755,070		3,768,542		23,470		23,470
Utah		17,194,441		17,403,746		233,244		253,244

		$ 36,392,697		$ 33,180,397		520,384		515,663

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. Once the market for these homes return, the Company engages in the disposition of these assets at prices above the book value or at a discount far less than what would have been realized at the time of foreclosure.

The Company established Security National Real Estate Services (“SNRE”) in 2013 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 March 31, 2016, SNRE manages 141 residential properties in 10 states across the United States which includes a newly constructed apartment complex, Dry Creek at East Village, in Sandy Utah.

The following is a summary of the Company’s investment in residential real estate for the periods presented:

		Net Ending Balance
		March 31		December 31
		2016		2015
Arizona		$ 940,537		$ 944,614
California		5,929,061		6,158,253
Colorado		549,214		553,230
Florida		9,082,242		9,203,624
Illinois		-		165,800
Oklahoma		99,264		99,862
Oregon		120,000		120,000
South Carolina		676,200		823,872
Texas		1,279,327		1,198,860
Utah		61,346,004		62,117,738
Washington		286,181		286,182
		$ 80,308,030		$ 81,672,035

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 13% of the overall commercial real estate holdings.

As of March 31, 2016, 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%
3935 I-55 South Frontage Road, Jackson, MS (1)		Life Insurance Operations		12,300		100%

(1) These two assets are included in property and equipment on the Condensed Consolidated Balance Sheet

Mortgage Loans

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 March 31, 2016, the Company had 53%, 14%, 10%, 7%, and 5% of its mortgage loans from borrowers located in the states of Utah, California, Texas, Florida, and Oregon, respectively. The mortgage loans on real estate balances on the consolidated balance sheet are reflected net of an allowance for loan losses of $2,078,948 and $1,848,120 at March 31, 2016 and December 31, 2015, 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

	Commercial		Residential		Residential Construction		Total
March 31, 2016
Allowance for credit losses:
Beginning balance - January 1, 2016	$ 187,129		$ 1,560,877		$ 100,114		$ 1,848,120
Charge-offs	-		(18,374)		-		(18,374)
Provision	-		249,202		-		249,202
Ending balance -March 31, 2016	$ 187,129		$ 1,791,705		$ 100,114		$ 2,078,948

Ending balance: individually evaluated for impairment	$ -		$ 508,655		$ -		$ 508,655

Ending balance: collectively evaluated for impairment	$ 187,129		$ 1,283,050		$ 100,114		$ 1,570,293

Ending balance: loans acquired with deteriorated credit quality	$ -		$ -		$ -		$ -

Mortgage loans:
Ending balance	$ 39,057,779		$ 53,488,217		$ 42,926,820		$ 135,472,816

Ending balance: individually evaluated for impairment	$ -		$ 5,091,409		$ -		$ 5,091,409

Ending balance: collectively evaluated for impairment	$ 39,057,779		$ 48,396,808		$ 42,926,820		$ 130,381,407

Ending balance: loans acquired with deteriorated credit quality	$ -		$ -		$ -		$ -

December 31, 2015
Allowance for credit losses:
Beginning balance - January 1, 2015	$ 187,129		$ 1,715,812		$ 100,114		$ 2,003,055
Charge-offs	-		(123,942)		-		(123,942)
Provision	-		(30,993)		-		(30,993)
Ending balance - December 31, 2015	$ 187,129		$ 1,560,877		$ 100,114		$ 1,848,120

Ending balance: individually evaluated for impairment	$ -		$ 305,962		$ -		$ 305,962

Ending balance: collectively evaluated for impairment	$ 187,129		$ 1,254,915		$ 100,114		$ 1,542,158

Ending balance: loans acquired with deteriorated credit quality	$ -		$ -		$ -		$ -

Mortgage loans:
Ending balance	$ 33,522,978		$ 46,020,490		$ 34,851,557		$ 114,395,025

Ending balance: individually evaluated for impairment	$ -		$ 3,087,161		$ 93,269		$ 3,180,430

Ending balance: collectively evaluated for impairment	$ 33,522,978		$ 42,933,329		$ 34,758,287		$ 111,214,594

Ending balance: loans acquired with deteriorated credit quality	$ -		$ -		$ -		$ -

The following is a summary of the aging of mortgage loans for the periods presented:

Age Analysis of Past Due Mortgage Loans

	30-59 Days Past Due	60-89 Days Past Due	Greater Than 90 Days (1)	In Foreclosure (1)	Total Past Due	Current	Total Mortgage Loans	Allowance for Loan Losses	Net Mortgage Loans
March 31, 2016

Commercial	$ -	$ -	$ -	$ -	$ -	$ 39,057,779	$ 39,057,779	$ (187,129)	$ 38,870,650
Residential	151,779	354,152	726,159	5,091,409	6,323,499	47,164,718	53,488,217	(1,791,705)	51,696,512
Residential Construction	-	-	64,895	-	64,895	42,861,925	42,926,820	(100,114)	42,826,706

Total	$ 151,779	$ 354,152	$ 791,054	$ 5,091,409	$ 6,388,394	$ 129,084,422	$ 135,472,816	$ (2,078,948)	$ 133,393,868

December 31, 2015
Commercial	$ -	$ -	$ -	$ -	$ -	$ 33,522,978	$ 33,522,978	$ (187,129)	$ 33,335,849
Residential	1,162,102	884,143	2,212,993	3,087,161	7,346,399	38,674,091	46,020,490	(1,560,877)	44,459,613
Residential Construction	-	-	64,895	93,269	158,164	34,693,393	34,851,557	(100,114)	34,751,443

Total	$ 1,162,102	$ 884,143	$ 2,277,888	$ 3,180,430	$ 7,504,563	$ 106,890,462	$ 114,395,025	$ (1,848,120)	$ 112,546,905

Impaired Mortgage Loans

Impaired mortgage loans 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

	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
March 31, 2016
With no related allowance recorded:
Commercial	$ -		$ -		$ -		$ -		$ -
Residential	-		-		-		-		-
Residential construction	-		-		-		-		-

With an allowance recorded:
Commercial	$ -		$ -		$ -		$ -		$ -
Residential	5,091,409		5,091,409		508,655		5,091,409		-
Residential construction	-		-		-		-		-

Total:
Commercial	$ -		$ -		$ -		$ -		$ -
Residential	5,091,409		5,091,409		508,655		5,091,409		-
Residential construction	-		-		-		-		-

December 31, 2015
With no related allowance recorded:
Commercial	$ -		$ -		$ -		$ -		$ -
Residential	-		-		-		-		-
Residential construction	93,269		93,269		-		93,269		-

With an allowance recorded:
Commercial	$ -		$ -		$ -		$ -		$ -
Residential	3,087,161		3,087,161		305,962		3,087,161		-
Residential construction	-		-		-		-		-

Total:
Commercial	$ -		$ -		$ -		$ -		$ -
Residential	3,087,161		3,087,161		305,962		3,087,161		-
Residential construction	93,269		93,269		-		93,269		-

Credit Risk Profile Based on Performance Status

The Company’s mortgage loan 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 were as follows:

Mortgage Loan Credit Exposure
Credit Risk Profile Based on Payment Activity

	Commercial				Residential				Residential Construction				Total
	March 31, 2016		December 31, 2015		March 31, 2016		December 31, 2015		March 31, 2016		December 31, 2015		March 31, 2016		December 31, 2015

Performing	$ 39,057,779		$ 33,522,978		$ 47,670,650		$ 40,720,336		$ 42,861,925		$ 34,693,393		$ 129,590,354		$ 108,936,707
Nonperforming	-		-		5,817,567		5,300,154		64,895		158,164		5,882,462		5,458,318

Total	$ 39,057,779		$ 33,522,978		$ 53,488,217		$ 46,020,490		$ 42,926,820		$ 34,851,557		$ 135,472,816		$ 114,395,025

Non-Accrual Mortgage Loans

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. Interest not accrued on these loans totals $440,000 and $268,000 as of March 31, 2016 and December 31, 2015, respectively.

The following is a summary of mortgage loans on a nonaccrual status for the periods presented.

	Mortgage Loans on Nonaccrual Status

	As of March 31 2016		As of December 31 2015
Residential	$ 5,817,567		$ 5,300,154
Residential construction	64,895		158,164
Total	$ 5,882,462		$ 5,458,318

Loan Loss Reserve

When a repurchase demand 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 that is included in other liabilities and accrued expenses:

	As of March 31 2016		As of December 31 2015
Balance, beginning of period	$ 2,805,900		$ 1,718,150
Provisions for losses	586,778		6,295,043
Charge-offs	(40,041)		(5,207,293)
Balance, end of period	$ 3,352,637		$ 2,805,900

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. SecurityNational Mortgage believes there is potential to resolve any alleged claims by third party investors on acceptable terms. If SecurityNational Mortgage is unable to resolve such claims on acceptable terms, legal action may ensue. In the event of legal action by any third party investor, SecurityNational Mortgage believes it has significant defenses to any such action and intends to vigorously defend itself against such action.

- Definition

The entire disclosure for investments in certain debt and equity securities.

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