USAC and its subsidiaries share offices located at 4123 SW Gage Center Drive, Suite 240, Topeka, Kansas 66604. Effective January 1, 2015, the lease amount was $2,250 per month for three years with a one-year option under the same rate, terms, and conditions. Effective January 1, 2019 the company extended its lease for up to three additional years at a lease amount of $3,152 per month. Total rent expense was $27,000 and $27,000 for the years ended December 31, 2018 and 2017.
DCLIC also maintains an office at 107 W. Main Avenue, Suite 325, Bismarck, North Dakota, 58501. The lease for the Bismarck office expired on September 30, 2018 and was renewed for an additional two year term. The lease rate for this location is $920 per month for the first year of the renewal. The Company paid $12,166 and $4,684 in rent for this location in 2018 and 2017.
On August 1, 2017, the Company merged with Northern Plains Capital Corporation with the Company being the ultimate surviving entity. As a result of this merger, the Company acquired Dakota Capital Life Insurance Company which became a wholly owned subsidiary of USALSC.
We have a policy and process in place to identify securities that could potentially have an impairment that is other-than-temporary. The assessment of whether impairments have occurred is based on a case-by-case evaluation of underlying reasons for the decline in fair value. We consider severity of impairment, duration of impairment, forecasted recovery period, industry outlook, financial condition of the issuer, issuer credit ratings and whether we intend to sell a security, or it is more likely than not that we would be required to sell a security, prior to the recovery of the amortized cost. New England Asset Management, our investment manager, provides support to the Company in making these determinations.
The recognition of other-than-temporary impairment losses on debt securities is dependent on the facts and circumstances related to the specific security. If we intend to sell a security or it is more likely than not that we would be required to sell a security prior to recovery of the amortized cost, the difference between amortized cost and fair value is recognized in the income statement as an other-than-temporary impairment. Our membership in the Federal Home Loan Bank provides additional liquidity which further reduces the likelihood that we would be required to sell a security prior to recovery. As it relates to debt securities, if we do not expect to recover the amortized basis, do not plan to sell the security and if it is not more likely than not that we would be required to sell a security before the recovery of its amortized cost, the other-than-temporary impairment would be recognized. We would recognize the credit loss portion through earnings in the income statement and the noncredit loss portion in accumulated other comprehensive loss.
We establish liabilities for amounts payable under insurance policies, including traditional life insurance and annuities. Generally, amounts are payable over an extended period of time. Liabilities for future policy benefits of traditional life insurance have been computed by using a net level premium method based upon estimates at the time of issue for investment yields, mortality and withdrawals. These estimates include provisions for experience less favorable than initially expected. Mortality assumptions are based on industry experience expressed as a percentage of standard mortality tables. Such liabilities are reviewed quarterly by an independent consulting actuary.
A detailed discussion of new accounting standards is provided in the Notes to Consolidated Financial Statements beginning on p. of this annual report.
USALSC entered into a coinsurance transaction with American Life and Security Corporation (“ALSC”) effective September 30, 2017. The agreement resulted in a one-time premium revenue of $3.9 million in the third quarter of 2017 which is the driver of the decrease in revenue. Absent this one-time revenue in 2017 and excluding our bargain purchase gain in 2018, our 2018 revenues increased by $2,101,336 or 26% as compared to 2017.
* 2017 revenue includes one-time revenue of $3.9 million from the ALSC reinsurance transaction.
Premium revenue: Premium revenue for the year ended December 31, 2018 was $8,807,779 compared to $10,773,246 in 2017, a decrease of $1,965,467. The ALSC agreement resulted in a one-time premium revenue of $3.9 million in 2017 which is the driver of the decrease in revenue. The decrease is offset by the growth of our direct and on-going assumed premiums. Absent this one-time premium in 2017, our 2018 premiums increased by $1,889,435, or 27%, as compared to 2017.
Direct, assumed and ceded premiums for the years ended December 31, 2018 and 2017 are summarized in the following table.
Increases in policyholder reserves represents funds that we maintain and invest for the future benefit of our policyholders. Other policy-related expenses represents the other expenses associated with fulfilling our obligations to our policyholders and producers. Operating expenses represent the costs to operate the company. It is important to note that our 2017 operating expense ratio is impacted by the one-time reserve increase which resulted from our transaction with ALSC. Absent this transaction, our 2017 ratio would have been 25%.
Death claims: Death benefits were $959,005 in the year ended December 31, 2018 compared to $823,545 in 2017, an increase of $135,460. This increase is attributable to the growth of our in-force block of life insurance policies. The majority of death claims paid from inception have been on pre-need policies. We expect these claims to grow as we continue to increase the size of our in-force pre-need business.
Net Loss: Our net loss was $456,136 in the year ended December 31, 2018 compared to net loss of $1,049,032 in the same period of 2017, a decrease of $592,896. Our net loss per share decreased to $0.06 from $0.18 in 2017, basic and diluted. While we are pleased to have significantly reduced our loss per share in 2018, it is important to note that the 2018 result is driven by the bargain purchase of USALSC-Montana (Formerly Great Western Life Insurance Company) which resulted in a one-time gain of $0.15 per share. We are using part of proceeds of this gain to create a sales management tool as well as to significantly upgrade our insurance administrative systems. While these expenses were prepaid in 2018, the Company will not take delivery of these items until sometime in 2019, which is when the expense will be recognized. This will adversely reflect on our per share results in 2019. It would be preferable to have recognized this expense within the same year as the bargain purchase gain, as the economics of the gain is being used to fund these enhancements. However, the yearly cut-off of financial reporting requires recognition of this expense to be deferred, which creates distortions in our results.
Cash and cash equivalents: As of December 31, 2018, we had cash and cash equivalent assets of $2,077,646, an increase of $1,425,837 from the December 31, 2017 balance of $651,809. This increase was the result of cash acquired with the purchase of USALSC-Montana.
Investment income due and accrued: As of December 31, 2018, our investment income due and accrued was $286,890 compared to $214,998 as of December 31, 2017. This increase is attributable to the growth of our invested assets.
Value of business acquired, net: As of December 31, 2018, our value of business acquired asset was $580,297, compared to $600,601 as of December 31, 2017. This asset was established in the third quarter of 2017 as a result of our acquisition of DCLIC and is amortized on a straight-line basis.
Property, equipment and software, net: As of December 31, 2018 our property, equipment and software assets were $54,078, a decrease of $166,999 from the December 31, 2017 balance of $221,077. This decrease is a result updated accounting interpretations of leased software which resulted in the immediate amortization of our remaining software fixed assets.
Goodwill: As of December 31, 2018 and 2017, our goodwill was $277,542. Goodwill was established as a result of our merger with Northern Plains and we had no previous goodwill balances. We have determined that there has been no impairment to our goodwill balance.
Liabilities. Our total liabilities were $31,896,323 as of December 31, 2018, an increase of $6,843,688 or 27% from our December 31, 2017 liabilities of $25,052,635.
Accounts payable and accrued expenses: As of December 31, 2018, our accounts payable and accrued expenses were $311,082 compared to $98,382 as of December 31, 2017, an increase of $212,700. The increase is driven expenses accrued as a result of our acquisition of USALSC-Montana and by growth of our premium tax liability associated with our growing business.
The total value of our investments and cash and cash equivalents increased to $39,947,424 as of December 31, 2018 from $34,261,024 at December 31, 2017, an increase of $5,686,400. Increases in investments are primarily attributable to premiums and annuity deposits received by USALSC and DCLIC and our acquisition of USALSC-Montana.
The following table shows the distribution of the credit ratings of our portfolio of fixed maturity securities by carrying value as of December 31, 2018 and 2017.
Reflecting the high quality of securities maintained by us, 98.1% of all fixed maturity securities were investment grade as of December 31, 2018. As of December 31, 2017, 97.9% of all fixed maturity securities were investment grade.
The amortized cost and fair value of debt securities as of December 31, 2018 and 2017, by contractual maturity, are shown below. Equity securities do not have stated maturity dates and therefore are not included in the following maturity summary. 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.
Net cash provided by operating activities was $2,244,068 for the year ended December 31, 2018. The primary sources of cash from operating activities were premiums and deposits received from policyholders. The primary uses of cash for operating activities were for payments of commissions to agents and settlement of policy liabilities. Net cash used in investing activities was $5,159,762. The primary source of cash was from sales of available for sale securities and our acquisition of USALSC-Montana. Offsetting this source of cash was our purchases of investments in available-for-sale securities. Cash provided by financing activities was $4,341,531. The primary sources of cash were receipts on deposit-type contracts and issuance of USAC Common Stock.
At December 31, 2018, we had cash and cash equivalents totaling $2,077,646. We believe that our existing cash and cash equivalents will be sufficient to fund the anticipated operating expenses and capital expenditures for the foreseeable future. We have based this estimate upon assumptions that may prove to be wrong and we could use our capital resources sooner than we currently expect. The growth of USALSC and DCLIC, our insurance subsidiaries, is uncertain and will require additional capital if they continue to grow.