6) Business Segments

9 Months Ended

Sep. 30, 2016

Notes

6) Business Segments

6)      Business Segments

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 of the Form 10-K for the year ended December 31, 2015. 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.

	Life Insurance	Cemetery/ Mortuary	Mortgage	Eliminations	Consolidated
For the Three Months Ended
September 30, 2016
Revenues from external customers	$  24,972,397	$   2,900,917	$   57,366,454	$                -	$   85,239,768
Intersegment revenues	3,318,369	107,745	79,164	(3,505,278)	-
Segment profit before income taxes	2,101,143	54,891	5,655,942	-	7,811,976
For the Three Months Ended
September 30, 2015
Revenues from external customers	$  23,148,090	$   3,123,168	$   49,223,428	$                -	$   75,494,686
Intersegment revenues	3,206,703	292,445	76,159	(3,575,307)	-
Segment profit before income taxes	3,655,998	250,111	3,888,291	-	7,794,400
For the Nine Months Ended
September 30, 2016
Revenues from external customers	$  70,616,968	$ 10,045,384	$ 152,331,332	$                -	$ 232,993,684
Intersegment revenues	9,780,803	616,532	239,503	(10,636,838)	-
Segment profit before income taxes	5,669,786	1,283,553	11,690,264	-	18,643,603
Identifiable Assets	800,252,063	95,414,964	80,720,446	(138,809,339)	837,578,134
Goodwill	2,765,570	-	-	-	2,765,570
For the Nine Months Ended
September 30, 2015
Revenues from external customers	$  65,610,558	$   9,436,496	$ 140,537,879	$                -	$ 215,584,933
Intersegment revenues	8,884,390	910,016	256,950	(10,051,356)	-
Segment profit before income taxes	7,175,036	811,261	9,038,439	-	17,024,736
Identifiable Assets	709,683,255	100,760,704	71,954,237	(133,002,358)	749,395,838
Goodwill	2,765,570	-	-	-	2,765,570