3) Investments

3 Months Ended

Mar. 31, 2017

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, 2017 are summarized as follows:

	Cost	Gross Unrealized Gains	Gross Unrealized Losses	Estimated Fair Value
March 31, 2017
Fixed maturity securities held to maturity carried at amortized cost:
Bonds:
U.S. Treasury securities and obligations of U.S. Government agencies	$4,357,040	$244,853	$(57,240)	$4,544,653
Obligations of states and political subdivisions	5,995,384	146,273	(132,140)	6,009,517
Corporate securities including public utilities	165,716,233	11,763,828	(2,443,238)	175,036,823
Mortgage-backed securities	9,753,206	246,004	(233,586)	9,765,624
Redeemable preferred stock	623,635	14,954	(8,627)	629,962
Total fixed maturity securities held to maturity	$186,445,498	$12,415,912	$(2,874,831)	$195,986,579

Equity securities available for sale at estimated fair value:
Common stock:
Industrial, miscellaneous and all other	$11,139,482	$412,535	$(816,778)	$10,735,239
Total equity securities available for sale at estimated fair value	$11,139,482	$412,535	$(816,778)	$10,735,239
Mortgage loans on real estate and construction loans held for investment at amortized cost:
Residential	$64,629,906
Residential construction	33,917,309
Commercial	37,532,001
Less: Allowance for loan losses	(1,955,443)
Total mortgage loans on real estate and construction loans held for investment	$134,123,773
Real estate held for investment - net of depreciation	$151,417,470
Policy loans and other investments are shown at amortized cost:
Policy loans	$6,666,500
Insurance assignments	33,857,966
Promissory notes	48,797
Other investments	2,250,000
Less: Allowance for doubtful accounts	(1,050,111)
Total policy loans and other investments	$41,773,152
Short-term investments at amortized cost	$28,346,922

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

	Cost	Gross Unrealized Gains	Gross Unrealized Losses	Estimated Fair Value
December 31, 2016:
Fixed maturity securities held to maturity carried at amortized cost:
Bonds:
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	$10,985,338	$447,110	$(859,092)	$10,573,356
Total securities available for sale carried at estimated fair value	$10,985,338	$447,110	$(859,092)	$10,573,356
Mortgage loans on real estate and construction loans held for investment at amortized cost:
Residential	$58,593,622
Residential construction	40,800,117
Commercial	51,536,622
Less: Allowance for loan losses	(1,748,783)
Total mortgage loans on real estate and construction loans held for investment	$149,181,578
Real estate held for investment - net of depreciation	$145,165,921
Policy loans and other investments are shown at amortized cost:
Policy loans	$6,694,148
Insurance assignments	33,548,079
Promissory notes	48,797
Other investments	1,765,752
Less: Allowance for doubtful accounts	(1,119,630)
Total policy loans and other investments	$40,937,146
Short-term investments at amortized cost	$27,560,040

Fixed Maturity Securities

The following tables summarize unrealized losses on fixed maturity securities, which are carried at amortized cost, at March 31, 2017 and December 31, 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 March 31, 2017
U.S. Treasury Securities and Obligations of U.S. Government Agencies	$57,240	$1,345,231	$-	$-	$57,240	$1,345,231
Obligations of states and political subdivisions	132,140	3,270,595	-	-	132,140	3,270,595
Corporate securities	1,094,907	29,075,748	1,348,331	12,362,900	2,443,238	41,438,648
Mortgage-backed securities	126,828	1,745,284	106,758	1,470,559	233,586	3,215,843
Redeemable preferred stock	8,627	98,110	-	-	8,627	98,110
Total unrealized losses	$1,419,742	$35,534,968	$1,455,089	$13,833,459	$2,874,831	$49,368,427
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-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 195 securities with unrealized losses of 94.5% of amortized cost at March 31, 2017. There were 250 securities with unrealized losses of 93.9% of amortized cost at December 31, 2016. During the three months ended March 31, 2017 and 2016 an other than temporary decline in fair value resulted in the recognition of credit losses on fixed maturity securities of $52,139 and $30,000, respectively.

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, 2017 and December 31, 2016. 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, 2017
Industrial, miscellaneous and all other	$178,006	149	$638,772	105	$816,778
Total unrealized losses	$178,006	149	$638,772	105	$816,778
Fair Value	$3,955,133		$1,154,812		$5,109,945
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 86.2% and 81.4% of the original investment as of March 31, 2017 and December 31, 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 three months ended March 31, 2017 and 2016, an other than temporary decline in the fair value resulted in the recognition of an impairment loss on equity securities of $-0- and $43,630, 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, 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 Cost	Estimated Fair    Value
Held to Maturity:
Due in 2017	$5,625,049	$5,677,028
Due in 2018 through 2021	42,733,718	44,794,103
Due in 2022 through 2026	43,263,792	45,020,917
Due after 2026	84,446,098	90,098,945
Mortgage-backed securities	9,753,206	9,765,624
Redeemable preferred stock	623,635	629,962
Total held to maturity	$186,445,498	$195,986,579

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

	Cost	Estimated Fair Value
Available for Sale:
Common stock	$11,139,482	$10,735,239
Total available for sale	$11,139,482	$10,735,239

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

	Three Months Ended Mar 31
	2017	2016
Fixed maturity securities held to maturity:
Gross realized gains	$2,434	$-
Gross realized losses	-	(24,795)
Other than temporary impairments	(52,139)	(30,000)
Securities available for sale:
Gross realized gains	60,978	63,495
Gross realized losses	(4,556)	(23,878)
Other than temporary impairments	-	(43,630)
Other assets:
Gross realized gains	456,275	84,768
Gross realized losses	(369,801)	(1,668)
Total	$93,191	$24,292

The net carrying amount of held to maturity securities sold was $28,073 and $-0- for the three months ended March 31, 2017 and 2016, respectively.  The net realized gain related to these sales was $2,434 and $-0- for the three months ended March 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.

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, 2017, other than investments issued or guaranteed by the United States Government.

Major categories of net investment income are as follows:

	Three Months Ended Mar 31
	2017	2016
Fixed maturity securities	$2,368,710	$2,050,569
Equity securities	54,786	71,041
Mortgage loans on real estate	2,223,139	2,026,515
Real estate	2,894,331	2,838,484
Policy loans	193,734	182,206
Insurance assignments	3,364,642	3,104,788
Other investments	7,543	-
Short-term investments,  principally interest on sale of mortgage loans and other	1,804,746	1,863,144
Gross investment income	12,911,631	12,136,747
Investment expenses	(3,348,349)	(3,144,556)
Net investment income	$9,563,282	$8,992,191

Net investment income includes income earned by the restricted assets of the cemeteries and mortuaries of $115,501 and $87,976 for the three months ended March 31, 2017 and 2016, 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 $9,268,330 at March 31, 2017 and $9,269,121 at December 31, 2016. 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 mortgage foreclosures.

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 13 commercial properties in 7 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 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 different 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
	2017		2016		2017	2016
Arizona	$447,229	(1)	$450,538	(1)	16,270	16,270
Arkansas	99,319		100,369		3,200	3,200
Kansas	12,512,451		12,450,297		222,679	222,679
Louisiana	512,324		518,700		7,063	7,063
Mississippi	3,795,355		3,818,985		33,821	33,821
New Mexico	7,000	(1)	7,000	(1)	-	-
Texas	3,760,499		3,734,974		23,470	23,470
Utah	57,104,854	(2)	47,893,073	(2)	433,244	433,244
	$78,239,031		$68,973,936		739,747	739,747
(1) Includes undeveloped land
(2) Includes 53rd Center to be 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 March 31, 2017, SNRE manages 124 residential properties in 9 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
	2017	2016
Arizona	$739,333	$742,259
California	5,404,417	5,848,389
Colorado	204,538	364,489
Florida	8,273,416	8,327,355
Ohio	46,658	46,658
Oklahoma	17,500	-
Texas	777,843	1,091,188
Utah	57,428,553	59,485,466
Washington	286,181	286,181
	$73,178,439	$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 80,000 square feet, or 10% of the overall commercial real estate holdings.

As of March 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	5,522	27%
(1) This asset is 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, 2017, the Company had 42%, 15%, 10%, 8%, 5% and 3%of its mortgage loans from borrowers located in the states of Utah, California, Texas, Florida, Oregon, and Nevada, respectively. The mortgage loans on real estate balances on the Condensed Consolidated Balance Sheet are reflected net of an allowance for loan losses of $1,955,443and $1,748,783 at March 31, 2017 and December 31, 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
	Commercial	Residential	Residential Construction	Total
March 31, 2017
Allowance for credit losses:
Beginning balance - January 1, 2017	$187,129	$1,461,540	$100,114	$1,748,783
Charge-offs	-	(16,226)	-	(16,226)
Provision	-	222,886	-	222,886
Ending balance -March 31, 2017	$187,129	$1,668,200	$100,114	$1,955,443
Ending balance: individually evaluated for impairment	$-	$423,487	$-	$423,487
Ending balance: collectively evaluated for impairment	$187,129	$1,244,713	$100,114	$1,531,956
Ending balance: loans acquired with deteriorated credit quality	$-	$-	$-	$-
Mortgage loans:
Ending balance	$37,532,001	$64,629,906	$33,917,309	$136,079,216
Ending balance: individually evaluated for impairment	$203,264	$4,842,306	$484,196	$5,529,766
Ending balance: collectively evaluated for impairment	$37,328,737	$59,787,600	$33,433,113	$130,549,450
Ending balance: loans acquired with deteriorated credit quality	$-	$-	$-	$-

December 31, 2016
Allowance for credit losses:
Beginning balance - January 1, 2016	$187,129	$1,560,877	$100,114	$1,848,120
Charge-offs	-	(420,135)	-	(420,135)
Provision	-	320,798	-	320,798
Ending balance - December 31, 2016	$187,129	$1,461,540	$100,114	$1,748,783
Ending balance: individually evaluated for impairment	$-	$374,501	$-	$374,501
Ending balance: collectively evaluated for impairment	$187,129	$1,087,039	$100,114	$1,374,282
Ending balance: loans acquired with deteriorated credit quality	$-	$-	$-	$-
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
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 Process of Foreclosure (1)	Total Past Due	Current	Total Mortgage Loans	Allowance for Loan Losses	Net Mortgage Loans
March 31, 2017
Commercial	$1,547,419	$-	$-	$203,264	$1,750,683	$35,781,318	$37,532,001	$(187,129)	$37,344,872
Residential	733,374	91,433	1,451,582	3,390,724	5,667,113	58,962,793	64,629,906	(1,668,200)	62,961,706
Residential   Construction	-	-	64,895	419,301	484,196	33,433,113	33,917,309	(100,114)	33,817,195
Total	$2,280,793	$91,433	$1,516,477	$4,013,289	$7,901,992	$128,177,224	$136,079,216	$(1,955,443)	$134,123,773
December 31, 2016
Commercial	$-	$-	$-	$202,992	$202,992	$51,333,630	$51,536,622	$(187,129)	$51,349,493
Residential	964,960	996,779	1,290,355	1,626,183	4,878,277	53,715,345	58,593,622	(1,461,540)	57,132,082
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)	$149,181,578
(1)  Interest income is not recognized on loans past due greater than 90 days or in foreclosure.

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, 2017
With no related allowance recorded:
Commercial	$203,264	$203,264	$-	$203,264	$-
Residential	-	-	-	-	-
Residential construction	484,196	484,196	-	484,196	-
With an allowance recorded:
Commercial	$-	$-	$-	$-	$-
Residential	4,842,306	4,842,306	423,487	4,842,306	-
Residential construction	-	-	-	-	-
Total:
Commercial	$203,264	$203,264	$-	$203,264	$-
Residential	4,842,306	4,842,306	423,487	4,842,306	-
Residential construction	484,196	484,196	-	484,196	-
December 31, 2016
With no related allowance recorded:
Commercial	$202,992	$202,992	$-	$202,992	$-
Residential	-	-	-	-	-
Residential construction	64,895	64,895	-	64,895	-
With an allowance recorded:
Commercial	$-	$-	$-	$-	$-
Residential	2,916,538	2,916,538	374,501	2,916,538	-
Residential construction	-	-	-	-	-
Total:
Commercial	$202,992	$202,992	$-	$202,992	$-
Residential	2,916,538	2,916,538	374,501	2,916,538	-
Residential construction	64,895	64,895	-	64,895	-

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, 2017	December 31, 2016	March 31, 2017	December 31, 2016	March 31, 2017	December 31, 2016	March 31, 2017	December 31, 2016
Performing	$37,328,737	$51,333,630	$59,787,600	$55,677,084	$33,433,113	$40,735,222	$130,549,450	$147,745,936
Nonperforming	203,264	202,992	4,842,306	2,916,538	484,196	64,895	5,529,766	3,184,425
Total	$37,532,001	$51,536,622	$64,629,906	$58,593,622	$33,917,309	$40,800,117	$136,079,216	$150,930,361

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 approximately $156,000 and $172,000 as of March 31, 2017 and December 31, 2016, 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 2017	As of December 31 2016
Commercial	$203,264	$202,992
Residential	4,842,306	2,916,538
Residential construction	484,196	64,895
Total	$5,529,766	$3,184,425

Loan Loss Reserve

When a repurchase demand corresponding to a mortgage loan previously 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 that is included in other liabilities and accrued expenses:

	As of March 31 2017 (As Restated) (Unaudited)	As of December 31 2016 (As Restated)
Balance, beginning of period	$                   627,733	$               2,805,900
Provision for current loan originations (1)	426,634	2,988,754
Additional provision for loan loss reserve	-	1,700,000
Charge-offs, net of recaptured amounts	10,708	(6,866,921)
Balance, end of period	$                1,065,075	$                  627,733
(1) Included in Mortgage fee income

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.