SNFCA 10-Q Quarterly Report Sept. 30, 2025

SECURITY NATIONAL FINANCIAL CORP

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to ________

Commission File Number: 000-09341

Security National Financial Corporation

(Exact name of registrant as specified in its charter)

utah		87-0345941
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

433 Ascension Way , 6 ^th Floor , Salt Lake City , Utah		84123
(Address of principal executive offices)		(Zip Code)

(801) 264-1060

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading symbol		Name of each exchange on which registered
Class A Common Stock		SNFCA		The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

	Large accelerated filer ☐		Accelerated filer ☐
	Non-accelerated filer ☐ (Do not check if a smaller reporting company)		Smaller reporting company ☒
			Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

As of November 10, 2025, the registrant had 22,398,332 shares of Class A Common Stock, $ 2.00 par value, outstanding and 3,587,237 shares of Class C Common Stock, $ 2.00 par value, outstanding.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

FORM 10-Q

QUARTER ENDED SEPTEMBER 30, 2025

Table of Contents

		Page No.
	Part I - Financial Information
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of September 30, 2025 (unaudited) and December 31, 2024	3-4
	Condensed Consolidated Statements of Earnings for the three and nine month periods ended September 30, 2025 and 2024 (unaudited)	5
	Condensed Consolidated Statements of Comprehensive Income for the three and nine month periods ended September 30, 2025 and 2024 (unaudited)	6
	Condensed Consolidated Statements of Stockholders’ Equity as of September 30, 2025 and September 30, 2024 (unaudited)	7-8
	Condensed Consolidated Statements of Cash Flows for the nine month periods ended September 30, 2025 and 2024 (unaudited)	9-10
	Notes to Condensed Consolidated Financial Statements (unaudited)	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	69
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	75
Item 4.	Controls and Procedures	76
	Part II - Other Information
Item 1.	Legal Proceedings	76
Item 1A.	Risk Factors	76
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	77
Item 3.	Defaults Upon Senior Securities	77
Item 4.	Mine Safety Disclosures	77
Item 5.	Other Information	77
Item 6.	Exhibits	78
	Signatures	79

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

Part I - Financial Information

Item 1. Financial Statements.

	September 30, 2025		December 31, 2024
Assets
Investments:
Fixed maturity securities, available for sale, at estimated fair value (amortized cost of $ 388,640,665 and $ 376,012,071 for 2025 and 2024, respectively; net of allowance for credit losses of $ 532,868 and $ 420,993 for 2025 and 2024, respectively)	$	389,193,589	$	366,546,129
Equity securities at estimated fair value (cost of $ 12,128,914 and $ 11,386,454 for 2025 and 2024, respectively)		17,691,024		15,771,681
Mortgage loans held for investment (net of allowance for credit losses of $ 2,677,001 and $ 1,885,390 for 2025 and 2024, respectively)		329,164,691		301,747,358
Real estate held for investment (net of accumulated depreciation of $ 35,724,258 and $ 31,419,539 for 2025 and 2024, respectively)		216,563,881		197,693,338
Real estate held for sale		1,619,403		1,278,033
Other investments and policy loans (net of allowance for credit losses of $ 1,534,957 and $ 1,536,926 for 2025 and 2024, respectively)		83,124,030		74,855,041
Accrued investment income		9,746,368		8,499,168
Total investments		1,047,102,986		966,390,748
Cash and cash equivalents		100,396,059		140,546,421
Loans held for sale at estimated fair value		159,460,525		131,181,148
Receivables (net of allowance for credit losses of $ 1,542,731 and $ 1,678,531 for 2025 and 2024, respectively)		15,098,066		15,858,743
Restricted assets (including $ 15,016,744 and $ 12,323,535 for 2025 and 2024 respectively, at estimated fair value)		31,673,039		23,806,836
Cemetery perpetual care trust investments (including $ 6,154,575 and $ 5,689,706 for 2025 and 2024, respectively, at estimated fair value)		9,685,678		8,836,503
Receivable from reinsurers		13,721,510		13,831,093
Cemetery land and improvements		11,160,991		10,594,632
Deferred policy and pre-need contract acquisition costs		122,311,900		122,661,298
Mortgage servicing rights, net		2,616,372		2,939,878
Property and equipment, net		18,746,096		19,047,688
Value of business acquired		6,587,339		7,491,600
Goodwill		5,253,783		5,253,783
Other		19,171,747		21,366,843

Total Assets	$	1,562,986,091	$	1,489,807,214

See accompanying notes to condensed consolidated financial statements (unaudited).

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)

(Unaudited)

	September 30, 2025			December 31, 2024
Liabilities and Stockholders’ Equity
Liabilities
Future policy benefits and unpaid claims	$	965,878,450		$	944,811,843
Unearned premium reserve		1,863,566			2,011,679
Bank and other loans payable		123,096,234			106,740,104
Deferred pre-need cemetery and mortuary contract revenues		22,234,892			20,168,405
Cemetery perpetual care obligation		5,838,879			5,642,693
Accounts payable		5,536,098			2,937,293
Other liabilities and accrued expenses		57,177,453			55,633,661
Income taxes		15,978,661			13,079,257
Total liabilities		1,197,604,233			1,151,024,935

Stockholders’ Equity
Preferred Stock - non-voting - $ 1.00 par value; 5,000,000 shares authorized; none issued or outstanding		-			-
Class A: common stock - $ 2.00 par value; 40,000,000 shares authorized; 22,395,245 shares issued and outstanding as of September 30, 2025 and 22,321,559 (1) shares issued and outstanding as of December 31, 2024		44,790,490			42,510,012
Class B: non-voting common stock - $ 1.00 par value; 5,000,000 shares authorized; none issued or outstanding		-			-
Class C: convertible common stock - $ 2.00 par value; 6,000,000 shares authorized; 3,587,237 shares issued and outstanding as of September 30, 2025 and 3,492,674 (1) shares issued and outstanding as of December 31, 2024		7,174,474			6,643,666
Common stock, value		7,174,474			6,643,666
Additional paid-in capital		89,438,415			79,698,367
Accumulated other comprehensive gain (loss), net of taxes		826,844			( 6,951,266	)
Retained earnings		232,857,565			225,359,186
Treasury stock at cost - 1,180,564 Class A shares and 104,604 Class C shares as of September 30, 2025; and 1,080,243 (1) Class A shares and 104,604 (1) Class C shares as of December 31, 2024		( 9,705,930	)		( 8,477,686	)

Total stockholders’ equity		365,381,858			338,782,279

Total Liabilities and Stockholders’ Equity	$	1,562,986,091		$	1,489,807,214

(1)

Issued and outstanding shares have been adjusted retroactively for the effect of annual stock dividends.

See accompanying notes to condensed consolidated financial statements (unaudited).

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

	2025			2024			2025			2024
	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Revenues:
Mortgage fee income	$	29,139,245		$	30,224,092		$	83,433,590		$	81,675,278
Insurance premiums and other considerations		29,880,785			30,011,081			89,846,164			89,823,732
Net investment income		20,109,600			17,799,096			59,893,212			55,790,472
Net mortuary and cemetery sales		7,140,942			6,814,331			21,698,880			21,531,769
Gains on investments and other assets		1,972,198			1,347,656			3,700,926			2,639,843
Other		1,083,393			2,077,431			3,034,263			3,792,127
Total revenues		89,326,163			88,273,687			261,607,035			255,253,221

Benefits and expenses:
Death benefits		15,182,809			13,570,336			46,249,912			43,354,254
Surrenders and other policy benefits		1,374,289			1,194,692			3,807,498			3,453,425
Increase in future policy benefits		8,376,973			8,589,354			26,165,160			27,148,178
Amortization of deferred policy and pre-need acquisition costs and value of business acquired		5,533,421			2,287,003			15,967,631			11,332,305
Selling, general and administrative expenses:
Commissions		13,054,117			13,204,406			36,957,836			34,638,464
Personnel		21,519,038			21,249,554			65,872,791			61,907,265
Advertising		983,291			907,528			2,747,684			2,381,400
Rent and rent related		947,664			1,380,076			2,873,414			4,078,792
Depreciation on property and equipment		607,300			611,475			1,821,453			1,791,823
Costs related to funding mortgage loans		1,813,814			1,694,791			5,120,855			4,677,767
Other		7,600,542			6,191,624			22,956,864			19,476,918
Interest expense		1,066,528			1,060,653			3,479,494			3,161,943
Cost of goods and services sold-mortuaries and cemeteries		1,113,425			1,117,513			3,525,978			3,627,101
Total benefits and expenses		79,173,211			73,059,005			237,546,570			221,029,635

Earnings before income taxes		10,152,952			15,214,682			24,060,465			34,223,586
Income tax expense		( 2,337,926	)		( 3,383,238	)		( 5,400,792	)		( 7,646,071	)

Net earnings	$	7,815,026		$	11,831,444		$	18,659,673		$	26,577,515

Net earnings per Class A Equivalent common share (1)	$	0.32		$	0.48		$	0.75		$	1.09

Net earnings per Class A Equivalent common share-assuming dilution (1)	$	0.31		$	0.47		$	0.73		$	1.05

Weighted-average Class A equivalent common shares outstanding (1)		24,709,518			24,418,679			24,725,938			24,465,661

Weighted-average Class A equivalent common shares outstanding-assuming dilution (1)		25,401,445			25,272,078			25,554,177			25,197,013

(1)

Net earnings per share have been adjusted retroactively for the effect of annual stock dividends. The weighted-average shares outstanding includes the weighted-average Class A common shares and the weighted-average Class C common shares determined on an equivalent Class A common stock basis. Net earnings per common share represent net earnings per equivalent Class A common share.

See accompanying notes to condensed consolidated financial statements (unaudited).

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	2025			2024			2025			2024
	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Net earnings	$	7,815,026		$	11,831,444		$	18,659,673		$	26,577,515
Other comprehensive income:
Unrealized gains on fixed maturity securities available for sale	$	3,353,280			10,443,490		$	9,835,254			8,661,351
Unrealized gains on restricted assets (1)		7,118			9,353			6,586			5,770
Unrealized gains on cemetery perpetual care trust investments (1)		4,056			4,263			5,720			2,438
Other comprehensive income, before income tax		3,364,454			10,457,106			9,847,560			8,669,559
Income tax expense		( 707,467	)		( 2,201,866	)		( 2,069,450	)		( 1,826,546	)
Other comprehensive income, net of income tax		2,656,987			8,255,240			7,778,110			6,843,013
Comprehensive income	$	10,472,013		$	20,086,684		$	26,437,783		$	33,420,528

(1)

Fixed maturity securities available for sale

See accompanying notes to condensed consolidated financial statements (unaudited).

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

	Class A Common Stock		Class C Common Stock			Additional Paid-in Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Treasury Stock			Total
	Nine Months Ended September 30, 2025
	Class A Common Stock		Class C Common Stock			Additional Paid-in Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Treasury Stock			Total

December 31, 2024	$	42,510,012	$	6,643,666		$	79,698,367		$	( 6,951,266	)	$	225,359,186		$	( 8,477,686	)	$	338,782,279

Net earnings		-		-			-			-			4,338,292			-			4,338,292
Other comprehensive income		-		-			-			2,997,612			-			-			2,997,612
Stock-based compensation expense		-		-			309,260			-			-			-			309,260
Exercise of stock options		132,546		190,674			( 92,965	)		-			-			( 149,009	)		81,246
Vesting of restricted stock units		920		-			( 920	)		-			-			-			-
Sale of treasury stock		-		-			90,895			-			-			136,367			227,262
Purchase of treasury stock		-		-			-			-			-			( 242,265	)		( 242,265	)
March 31, 2025	$	42,643,478	$	6,834,340		$	80,004,637		$	( 3,953,654	)	$	229,697,478		$	( 8,732,593	)	$	346,493,686

Net earnings		-		-			-			-			6,506,355			-			6,506,355
Other comprehensive income		-		-			-			2,123,511			-			-			2,123,511
Stock-based compensation expense		-		-			320,379			-			-			-			320,379
Vesting of restricted stock units		6,174		-			( 6,174	)		-			-			-			-
Sale of treasury stock		-		-			63,807			-			-			208,399			272,206
Purchase of treasury stock		-		-			-			-			-			( 961,419	)		( 961,419	)
Conversion Class C to Class A		790		( 790	)		-			-			-			-			-
Stock dividends		2,132,832		341,678			8,685,530			-			( 11,160,040	)		-			-
June 30, 2025	$	44,783,274	$	7,175,228		$	89,068,179		$	( 1,830,143	)	$	225,043,793		$	( 9,485,613	)	$	354,754,718

Net earnings		-		-			-			-			7,815,026			-			7,815,026
Other comprehensive income		-		-			-			2,656,987			-			-			2,656,987
Stock-based compensation expense		-		-			320,241			-			-			-			320,241
Vesting of restricted stock units		6,184		-			( 6,184	)		-			-			-			-
Sale of treasury stock		-		-			55,203			-			-			180,612			235,815
Purchase of treasury stock		-		-			-			-			-			( 400,929	)		( 400,929	)
Conversion Class C to Class A		758		( 758	)		-			-			-			-			-
Stock dividends		274		4			976			-			( 1,254	)		-			-
September 30, 2025	$	44,790,490	$	7,174,474		$	89,438,415		$	826,844		$	232,857,565		$	( 9,705,930	)	$	365,381,858

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Continued)

(Unaudited)

	Nine Months Ended September 30, 2024
	Class A Common Stock		Class C Common Stock			Additional Paid-in Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Treasury Stock			Total

December 31, 2023	$	40,096,004	$	5,943,708		$	72,424,429		$	( 6,885,558	)	$	206,978,373		$	( 5,661,737	)	$	312,895,219

Net earnings		-		-			-			-			7,474,522			-			7,474,522
Other comprehensive loss		-		-			-			( 895,098	)		-			-			( 895,098	)
Stock-based compensation expense		-		-			199,887			-			-			-			199,887
Vesting of restricted stock units		810		-			( 810	)		-			-			-			-
Sale of treasury stock		-		-			103,788			-			-			366,733			470,521
Purchase of treasury stock		-		-			-			-			-			( 41,077	)		( 41,077	)
Conversion Class C to Class A		348		( 348	)		-			-			-			-			-
March 31, 2024	$	40,097,162	$	5,943,360		$	72,727,294		$	( 7,780,656	)	$	214,452,895		$	( 5,336,081	)	$	320,103,974

Net earnings		-		-			-			-			7,271,549			-			7,271,549
Other comprehensive loss		-		-			-			( 517,129	)		-			-			( 517,129	)
Stock-based compensation expense		-		-			184,066			-			-			-			184,066
Exercise of stock options		64,164		-			( 17,982	)		-			-			-			46,182
Vesting of restricted stock units		920		-			( 920	)		-			-			-			-
Sale of treasury stock		-		-			13,201			-			-			252,208			265,409
Purchase of treasury stock		-		-			-			-			-			( 1,588,058	)		( 1,588,058	)
Conversion Class C to Class A		184		( 184	)		-			-			-			-			-
Stock dividends		2,009,442		297,156			5,847,226			-			( 8,153,824	)		-			-
June 30, 2024	$	42,171,872	$	6,240,332		$	78,752,885		$	( 8,297,785	)	$	213,570,620		$	( 6,671,931	)	$	325,765,993
Balance	$	42,171,872	$	6,240,332		$	78,752,885		$	( 8,297,785	)	$	213,570,620		$	( 6,671,931	)	$	325,765,993

Net earnings		-		-			-			-			11,831,444			-			11,831,444
Other comprehensive income		-		-			-			8,255,240			-			-			8,255,240
Other comprehensive income (loss)		-		-			-			8,255,240			-			-			8,255,240
Stock-based compensation expense		-		-			196,326			-			-			-			196,326
Exercise of stock options		62,860		-			7,550			-			-			-			70,410
Vesting of restricted stock units		920		-			( 920	)		-			-			-			-
Sale of treasury stock		-		-			21,281			-			-			224,469			245,750
Purchase of treasury stock		-		-			-			-			-			( 43,097	)		( 43,097	)
Stock dividends		320		-			811			-			( 1,131	)		-			-
September 30, 2024	$	42,235,972	$	6,240,332		$	78,977,933		$	( 42,545	)	$	225,400,933		$	( 6,490,559	)	$	346,322,066
Balance	$	42,235,972	$	6,240,332		$	78,977,933		$	( 42,545	)	$	225,400,933		$	( 6,490,559	)	$	346,322,066

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	2025			2024
	Nine Months Ended September 30,
	2025			2024
Cash flows from operating activities:
Net cash provided by operating activities	$	27,552,994		$	34,894,323

Cash flows from investing activities:
Purchases of fixed maturity securities		( 63,091,501	)		( 45,346,681	)
Sales, calls and maturities of fixed maturity securities		49,800,384			89,829,379
Purchases of equity securities		( 4,245,856	)		( 2,769,612	)
Sales of equity securities		3,814,374			2,018,249
Purchases of restricted assets		( 5,191,557	)		( 2,536,814	)
Sales, calls and maturities of restricted assets		3,323,223			1,171,707
Purchases of cemetery perpetual care trust investments		( 990,234	)		( 2,487,924	)
Sales, calls and maturities of perpetual care trust investments		1,896,777			2,383,653
Mortgage loans held for investment, other investments and policy loans made		( 652,228,219	)		( 549,027,246	)
Payments received for mortgage loans held for investment, other investments and policy loans		615,698,100			540,583,700
Purchases of property and equipment		( 1,591,486	)		( 575,648	)
Sales of property and equipment		4,700			365,693
Purchases of real estate		( 53,207,439	)		( 46,189,096	)
Sales of real estate		31,493,671			28,385,283
Net cash provided by (used in) investing activities		( 74,515,063	)		15,804,643

Cash flows from financing activities:
Investment contract receipts		9,217,213			10,193,442
Investment contract withdrawals		( 12,494,990	)		( 11,520,918	)
Proceeds from stock options exercised		81,246			116,592
Purchases of treasury stock		( 1,604,613	)		( 1,672,232	)
Repayment of bank loans		( 49,525,258	)		( 1,423,826	)
Proceeds from bank loans		69,000,000			-
Net change in warehouse line borrowings for loans held for sale		( 3,174,878	)		2,622,976
Net cash provided by (used in) financing activities		11,498,720			( 1,683,966	)

Net change in cash, cash equivalents, restricted cash and restricted cash equivalents		( 35,463,349	)		49,015,000

Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period		150,102,620			139,923,399

Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period	$	114,639,271		$	188,938,399

Supplemental Disclosure of Cash Flow Information:
Cash paid during the year for:
Interest	$	3,497,142		$	3,124,591
Income taxes (net of refunds)		4,548,279			6,877,342

Non Cash Operating, Investing and Financing Activities:
Transfer from fixed maturity securities available for sale to other investments	$	1,185,603		$	-
Right-of-use assets obtained in exchange for operating lease liabilities		1,157,084			1,130,610
Loans held for sale transferred into mortgage loans held for investment		828,063			-
Benefit plans funded with treasury stock		735,283			981,680
Loans held for sale foreclosed into real estate held for sale		380,000			858,977
Mortgage loans held for investment foreclosed into real estate held for sale		190,495			-
Right-of-use assets obtained in exchange for finance lease liabilities		-			176,040

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Unaudited)

Reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents as shown in the condensed consolidated statements of cash flows are presented in the table below:

	September 30, 2025		September 30, 2024
Cash and cash equivalents	$	100,396,059	$	170,706,542
Restricted assets		13,556,435		15,232,601
Cemetery perpetual care trust investments		686,777		2,999,256

Total cash, cash equivalents, restricted cash and restricted cash equivalents	$	114,639,271	$	188,938,399
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of year	$	114,639,271	$	188,938,399

See accompanying notes to condensed consolidated financial statements (unaudited).

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

1) Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Articles 8 and 10 of Regulation S-X. Accordingly, they do not include all the information and disclosures required by accounting principles generally accepted in the United States of America for complete financial statements. These financial statements should be read in conjunction with the consolidated financial statements of the Company and notes thereto for the year ended December 31, 2024, included in the Company’s Annual Report on Form 10-K (File Number 000-09341). In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three- and nine-month periods ended September 30, 2025, are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to adopt policies and make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. In applying these policies and estimates, the Company makes judgments that frequently require assumptions about matters that are inherently uncertain. Accordingly, significant estimates used in the preparation of the Company’s financial statements may be subject to significant adjustments in future periods. Actual results could differ from those estimates.

Material estimates that are particularly susceptible to significant changes in the near term are those used in determining the value of derivative assets and liabilities; those used in determining deferred acquisition costs and the value of business acquired; those used in determining the liability for future policy benefits; those used in determining the value of loans held for sale; and those used in determining loan loss reserve. Although some variability is inherent in these estimates, management believes the amounts provided are fairly stated in all material respects.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

2) Recent Accounting Pronouncements

Accounting Standards Issued But Not Yet Adopted

ASU No. 2018-12: “Financial Services – Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts” — Issued in August 2018, ASU 2018-12 is intended to improve the timeliness of recognizing changes in the liability for future policy benefits on traditional long-duration contracts by requiring that assumptions be updated after contract inception and by modifying the rate used to discount future cash flows. The standard is aimed at improving the accounting for certain market-based options or guarantees associated with deposit or account balance contracts, simplifying amortization of deferred acquisition costs while improving and expanding required disclosures. In November 2020, ASU No. 2020-11: “Financial Services – Insurance (Topic 944): Effective Date and Early Application,” was issued. This ASU was issued to provide additional time for the implementation of ASU No. 2018-12 by deferring the effective date by one year. For smaller reporting companies, this update is effective for annual reporting periods beginning after December 15, 2024, and interim reporting periods beginning after December 15, 2025. The Company will adopt the standard commencing with its annual reporting period ending December 31, 2025, using the modified retrospective transition method as of the transition date (“Transition Date”) of January 1, 2024. The modified retrospective transition method requires the amended guidance be applied to contracts issued after the beginning of the earliest period presented, or the Transition Date, which will result in the restatement of the 2024 consolidated financial statements.

The Company is nearing completion of its analysis and implementation of the new standard, including the identification of cohorts, system updates, and design. The Company has engaged its team of actuaries, accountants, and systems specialists and consulted external system providers as part of the implementation. The adoption of this guidance is expected to have an impact on its financial position, results of operations, and disclosures, as well as systems, processes and controls. Based upon the modified retrospective transition method, the Company estimates that the January 1, 2024, Transition Date impact from adoption will include an increase to total stockholders’ equity of approximately $ 4 million to $ 6 million. This expected increase includes the estimated impact to accumulated other comprehensive income (“AOCI”), which, as of the Transition Date, is expected to result in an increase of approximately $ 4 million to $ 6 million, net of income tax. The most significant drivers of the expected increase in AOCI are the anticipated impacts of the changes in the discount rates as of the Transition Date to be used in measuring the liability for future policy benefits for traditional and limited payment contracts. The expected increase to total stockholders’ equity also includes the estimated impact to retained earnings, which is immaterial.

After implementation, cash flow assumptions, such as mortality, lapse, and expense, will be reviewed at least annually and, if necessary, they will be updated to reflect actual experience and current expectations in the calculation of the Company’s future policy benefits. Historically, cash flow assumptions were locked in at policy issuance and remained in place for the life of the business—even when material variances emerged between assumptions and actual experience—except in the case of a premium deficiency. Under the new guidance, net premiums are capped at 100 percent of gross premiums at the cohort level. Adoption of this standard also requires changes in the future treatment of the Company’s Deferred Acquisition Cost (“DAC”) asset.

Historically, the interest rate used to calculate the Company’s future policy benefits was set at policy issuance and remained in effect for the life of the policy. The Company used an expected investment portfolio rate of return based on a conservative experience assumption. The new guidance seeks to improve reporting on the financial impact associated with interest rate sensitivity. To accomplish this, future policy benefits will be calculated using a discount rate based on an upper-medium-grade (A-rated) fixed income instrument.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

2) Recent Accounting Pronouncements (Continued)

The initial future policy benefit for each cohort is calculated using the original discount rate and then remeasured using the current discount rate curve. The original rate is used to determine interest accretion on the liability—which is included in net earnings—as well as to calculate the net premiums in both scenarios. The impact of remeasurement, from the original locked-in discount rate to the current rate, is reported as a component of the Company’s AOCI. This original discount rate is locked in at the cohort’s inception or at the Transition Date and will continue to be used in determining the impact on future net earnings associated with that contract.

DAC is used by insurance companies to defer costs related to acquiring insurance policies. Under the new guidance, amortization methods will be simplified, and DAC for all insurance contracts will be subject to straight-line amortization over the lifetime of the policy. Historically, traditional life contracts were amortized in proportion to premiums over the expected premium-paying period. Additionally, shadow DAC will no longer be reported and will be removed from AOCI, net of tax. The impact of the removal of shadow DAC is immaterial. The Company expects the impact on net earnings due to the decrease in amortization of DAC to be in the range of $ 3 million to $ 4 million, net of tax for 2024.

While the requirements of the new guidance represents a change from existing standard, the new guidance will not impact capital and surplus or net income under statutory accounting practices, cash flows on the Company’s policies, or the underlying economics of the Company’s business.

ASU No. 2023-09: “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” — Issued in December 2023, ASU 2023-09 requires that public business entities, on an annual basis: (i) disclose specific categories in the rate reconciliation and (ii) provide additional information for reconciling items that meet a quantitative threshold. In addition, the amendments in this update require that all entities disclose on an annual basis the following information about income taxes paid: (i) the amount of income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes and (ii) the amount of income taxes paid (net of refunds received) disaggregated by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5 percent of total income taxes paid (net of refunds received). ASU 2023-09 is effective for the Company for the annual reporting periods beginning January 1, 2025. The Company will adopt the standard commencing with its annual reporting period ending December 31, 2025. The Company does not anticipate that the adoption of this standard will have a material impact on the consolidated financial statements.

ASU No. 2024-03: “Income Statement-Reporting Comprehensive Income- Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” — Issued in November 2024, ASU 2024-03 requires public business entities to disclose, in the notes to the consolidated financial statements, specified information about certain expenses at each interim and annual reporting period. ASU 2024-03 requires disclosures about specific types of expenses (i.e., (a) purchases of inventory, (b) employee compensation, (c) depreciation and (d) intangible asset amortization) included in the expense captions presented on the face of the statement of earnings as well as disclosures about selling expenses. ASU 2024-03 does not change the requirements for the presentation of expenses on the statement of earnings. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Accordingly, the Company will adopt the standard commencing with its annual reporting period ending December 31, 2027. The Company is in the process of estimating the potential impact of this new standard on the consolidated financial statements.

The Company has reviewed other recent accounting pronouncements and has determined that they will not significantly impact the Company’s results of operations or financial position.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

3) Investments

The Company’s investments as of September 30, 2025, are summarized as follows:

Schedule of Investments

	Amortized Cost			Gross Unrealized Gains		Gross Unrealized Losses (1)			Allowance for Credit Losses			Estimated Fair Value
September 30, 2025:
Fixed maturity securities, available for sale, at estimated fair value:
U.S. Treasury securities and obligations of U.S. Government agencies	$	77,815,616		$	941,844	$	( 154,207	)	$	-		$	78,603,253

Obligations of states and political subdivisions		3,416,026			11,280		( 175,233	)		-			3,252,073

Corporate securities including public utilities		281,126,441			7,265,563		( 3,263,456	)		( 378,819	)		284,749,729

Mortgage-backed securities		25,532,582			110,226		( 3,622,125	)		( 154,049	)		21,866,634

Redeemable preferred stock		750,000			9,400		( 37,500	)		-			721,900

Total fixed maturity securities available for sale	$	388,640,665		$	8,338,313	$	( 7,252,521	)	$	( 532,868	)	$	389,193,589

Equity securities at estimated fair value:

Common stock:

Industrial, miscellaneous and all other	$	12,128,914		$	5,898,600	$	( 336,490	)				$	17,691,024

Total equity securities at estimated fair value	$	12,128,914		$	5,898,600	$	( 336,490	)				$	17,691,024

Mortgage loans held for investment at amortized cost:
Residential	$	91,948,455
Residential construction		165,869,176
Commercial		76,447,701
Less: Unamortized deferred loan fees, net		( 2,159,279	)
Less: Allowance for credit losses		( 2,677,001	)
Less: Net discounts		( 264,361	)

Total mortgage loans held for investment	$	329,164,691

Real estate held for investment - net of accumulated depreciation:
Residential	$	93,885,033
Commercial		122,678,848

Total real estate held for investment	$	216,563,881

Real estate held for sale:
Residential	$	1,467,850
Commercial		151,553

Total real estate held for sale	$	1,619,403

Other investments and policy loans at amortized cost:
Policy loans	$	14,372,484
Insurance assignments		42,278,320
Federal Home Loan Bank stock (2)		1,590,400
Other investments		26,417,783
Less: Allowance for credit losses for insurance assignments		( 1,534,957	)

Total other investments and policy loans	$	83,124,030

Accrued investment income	$	9,746,368

Total investments	$	1,047,102,986

(1)

Gross unrealized losses are net of allowance for credit losses

(2)

Includes $ 581,600 of Membership stock and $ 1,008,800 of Activity stock attributable to short-term borrowings and letters of credit.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

3) Investments (Continued)

The Company’s investments as of December 31, 2024, are summarized as follows:

	Amortized Cost			Gross Unrealized Gains		Gross Unrealized Losses (1)			Allowance for Credit Losses			Estimated Fair Value
December 31, 2024:
Fixed maturity securities, available for sale, at estimated fair value:
U.S. Treasury securities and obligations of U.S. Government agencies	$	74,680,606		$	327,618	$	( 486,976	)	$	-		$	74,521,248

Obligations of states and political subdivisions		6,416,751			1,762		( 290,448	)		-			6,128,065

Corporate securities including public utilities		262,954,278			2,444,842		( 6,922,871	)		( 408,944	)		258,067,305

Mortgage-backed securities		31,710,436			125,764		( 4,244,640	)		( 12,049	)		27,579,511

Redeemable preferred stock		250,000			-		-			-			250,000

Total fixed maturity securities available for sale	$	376,012,071		$	2,899,986	$	( 11,944,935	)	$	( 420,993	)	$	366,546,129

Equity securities at estimated fair value:

Common stock:

Industrial, miscellaneous and all other	$	11,386,454		$	4,976,567	$	( 591,340	)				$	15,771,681

Total equity securities at estimated fair value	$	11,386,454		$	4,976,567	$	( 591,340	)				$	15,771,681

Mortgage loans held for investment at amortized cost:
Residential	$	92,061,787
Residential construction		151,172,733
Commercial		62,753,085
Less: Unamortized deferred loan fees, net		( 2,082,241	)
Less: Allowance for credit losses		( 1,885,390	)
Less: Net discounts		( 272,616	)

Total mortgage loans held for investment	$	301,747,358

Real estate held for investment - net of accumulated depreciation:
Residential	$	71,618,410
Commercial		126,074,928

Total real estate held for investment	$	197,693,338

Real estate held for sale:
Residential	$	1,126,480
Commercial		151,553

Total real estate held for sale	$	1,278,033

Other investments and policy loans at amortized cost:
Policy loans	$	14,019,248
Insurance assignments		48,493,858
Federal Home Loan Bank stock (2)		2,404,900
Other investments		11,473,961
Less: Allowance for credit losses for insurance assignments		( 1,536,926	)

Total policy loans and other investments	$	74,855,041

Accrued investment income	$	8,499,168

Total investments	$	966,390,748

(1)

Gross unrealized losses are net of allowance for credit losses

(2)

Includes $ 553,900 of Membership stock and $ 1,851,000 of Activity stock due to short-term advances and letters of credit.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

3) Investments (Continued)

There were no investments in fixed maturity securities or equity securities, aggregated by issuer, of more than 10% of shareholders’ equity (before net unrealized gains and losses on equity securities and fixed maturity securities) as of September 30, 2025, other than investments issued or guaranteed by the United States Government.

Fixed Maturity Securities

The table below summarizes unrealized losses on fixed maturity securities available for sale that were carried at estimated fair value as of September 30, 2025, and December 31, 2024. The fair values of fixed maturity securities that are actively traded are based on quoted market prices. For fixed maturity securities that are 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 table below sets 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		Combined Fair Value
September 30, 2025
U.S. Treasury securities and obligations of U.S. Government agencies	$	5,286	$	2,413,864	$	148,921	$	10,950,745	$	154,207	$	13,364,609
Obligations of states and political subdivisions		322		199,678		174,911		2,107,032		175,233		2,306,710
Corporate securities		456,904		28,709,675		2,806,552		51,662,199		3,263,456		80,371,874
Mortgage-backed securities		6,859		360,565		3,615,266		18,132,086		3,622,125		18,492,651
Redeemable preferred stock		37,500		212,500		-		-		37,500		212,500
Totals	$	506,871	$	31,896,282	$	6,745,650	$	82,852,062	$	7,252,521	$	114,748,344

December 31, 2024
U.S. Treasury securities and obligations of U.S. Government agencies	$	8,737	$	986,365	$	478,239	$	22,110,495	$	486,976	$	23,096,860
Obligations of states and political subdivisions		15,003		2,167,918		275,445		3,008,385		290,448		5,176,303
Corporate securities including public utilities		1,888,022		93,562,219		5,034,849		77,975,776		6,922,871		171,537,995
Mortgage-backed securities		32,150		2,915,192		4,212,490		19,041,442		4,244,640		21,956,634
Totals	$	1,943,912	$	99,631,694	$	10,001,023	$	122,136,098	$	11,944,935	$	221,767,792

Relevant holdings were comprised of 359 securities with fair values aggregating 94.1 % of the aggregate amortized cost as of September 30, 2025, compared to 706 securities with fair values aggregating 94.9 % of the aggregate amortized cost as of December 31, 2024. A credit loss provision of $ 45,882 and of $ 20,342 have been recognized for the three-month periods ended September 30, 2025, and 2024, respectively. A credit loss provision of $ 111,875 and of $ 100,053 have been recognized for the nine-month periods ended September 30, 2025, and 2024, respectively. Credit losses are included in gains (losses) on investments and other assets on the condensed consolidated statements of earnings. Other unrealized losses for which no credit loss was recognized are primarily the result of increases in interest rates.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

3) Investments (Continued)

Evaluation of Allowance for Credit Losses

The Company evaluates its fixed maturity securities classified as available for sale on a quarterly basis to identify any potential credit losses. This evaluation includes a review of current ratings by the National Association of Insurance Commissions (“NAIC”) and other industry rating agencies. Securities with NAIC rating of 1 or 2 are considered investment grade and are only reviewed for credit loss if current market data or recent company news could lead to a credit downgrade. Securities with NAIC ratings of 3 to 5 are considered non-investment grade and are evaluated for credit loss. The evaluation involves assessing all facts and circumstances surrounding each security including, but not limited to, historical values, interest payment history, projected earnings, and revenue growth rates as well as a review of the reason for a downgrade in the NAIC rating. Based on the analysis of a security that is rated 3 to 5, a determination is made whether the security will likely make payments in accordance with the terms of the financial instrument. Securities with a rating of 6 are automatically determined to be impaired, and a credit loss is recognized in earnings.

Where the decline in fair value of fixed maturity securities is attributable to changes in market interest rates or to factors such as market volatility, liquidity and spread widening, and the Company anticipates recovery of all contractual or expected cash flows, the Company does not consider these securities to have credit loss because the Company does not intend to sell these securities and it is not more likely than not the Company will be required to sell these securities before a recovery of amortized cost, which may be at maturity.

If the Company intends to sell a fixed maturity security or if it is more likely than not that the Company will be required to sell a security before recovery of its amortized cost basis, a credit loss has occurred and the difference between the amortized cost and the fair value that relates to the expected credit loss is recognized as a loss in earnings, included in gains (losses) on investments and other assets on the condensed consolidated statements of earnings.

If the Company does not intend to sell a fixed maturity security and it is less likely than not that the Company will be required to sell the security but the Company also does not expect to recover the entire amortized cost basis of the security, a credit loss is recognized in earnings for the amount of the expected credit loss with a corresponding allowance for credit losses as a contra-asset account. The credit loss is included in gains (losses) on investments and other assets on the condensed consolidated statements of earnings. The recognized credit loss is limited to the total unrealized loss on the security due to a change in credit.

Amounts due on available for sale fixed maturities that are deemed to be uncollectible are written off and removed from the allowance for credit loss. A write-off may also occur if the Company intends to sell a security or when it is more likely than not that the Company will be required to sell the security before the recovery of its amortized cost.

The Company does not calculate a credit loss allowance on accrued interest income, included in accrued investment income on the condensed consolidated balance sheets, as the Company writes off any accrued interest income to net investment income if the accrued but unpaid amount exceeds 90 days.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

3) Investments (Continued)

Credit Quality Indicators

Based on the NAIC securities designations, the Company had 98.5 % and 97.7 % of its fixed maturity securities rated investment grade as of September 30, 2025, and December 31, 2024, respectively. The following table summarizes the credit quality, by NAIC designation, of the Company’s fixed maturity securities available for sale, excluding redeemable preferred stock.

	September 30, 2025				December 31, 2024
NAIC Designation	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
1	$	201,200,500	$	200,858,163	$	188,386,980	$	183,460,027
2		180,271,273		181,731,893		178,060,265		174,405,442
3		5,748,526		5,407,297		7,961,422		7,342,220
4		406,486		412,461		649,592		600,459
5		262,549		61,875		702,643		487,981
6		1,331		-		1,169		-
Total	$	387,890,665	$	388,471,689	$	375,762,071	$	366,296,129

The following tables present a roll forward of the Company’s allowance for credit losses on fixed maturity securities available for sale for the three-month periods ended September 30, 2025, and 2024:

	U.S. Treasury securities and obligations of U.S. Government agencies		Obligations of states and political subdivisions		Corporate securities including public utilities		Mortgage- backed securities		Total
	Three Months Ended September 30, 2025
	U.S. Treasury securities and obligations of U.S. Government agencies		Obligations of states and political subdivisions		Corporate securities including public utilities		Mortgage- backed securities		Total

Beginning balance - June 30, 2025	$	-	$	-	$	474,937	$	12,049	$	486,986

Additions for credit losses not previously recorded		-		-		45,882		-		45,882
Change in allowance on securities with previous allowance		-		-		-		-		-
Reductions for securities sold during the period		-		-		-		-		-
Reductions for securities with credit losses due to intent to sell		-		-		-		-		-
Write-offs charged against the allowance		-		-		-		-		-
Recoveries of amounts previously written off		-		-		-		-		-

Ending Balance - September 30, 2025	$	-	$	-	$	520,819	$	12,049	$	532,868


	Three Months Ended September 30, 2024
	U.S. Treasury securities and obligations of U.S. Government agencies		Obligations of states and political subdivisions		Corporate securities including public utilities			Mortgage- backed securities		Total

Beginning balance - June 30, 2024	$	-	$	-	$	382,211		$	12,049	$	394,260

Additions for credit losses not previously recorded		-		-		25,000			-		25,000
Change in allowance on securities with previous allowance		-		-		( 4,658	)		-		( 4,658	)
Reductions for securities sold during the period		-		-		-			-		-
Reductions for securities with credit losses due to intent to sell		-		-		-			-		-
Write-offs charged against the allowance		-		-		-			-		-
Recoveries of amounts previously written off		-		-		-			-		-

Ending Balance - September 30, 2024	$	-	$	-	$	402,553		$	12,049	$	414,602

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

3) Investments (Continued)

The following tables present a roll forward of the Company’s allowance for credit losses on fixed maturity securities available for sale for the nine-month periods ended September 30, 2025, and 2024:


	Nine Months Ended Sepember 30, 2025
	U.S. Treasury securities and obligations of U.S. Government agencies		Obligations of states and political subdivisions		Corporate securities including public utilities		Mortgage- backed securities		Total

Beginning balance - December 31, 2024	$	-	$	-	$	408,944	$	12,049	$	420,993

Additions for credit losses not previously recorded		-		-		72,000		-		72,000
Change in allowance on securities with previous allowance		-		-		39,875		-		39,875
Reductions for securities sold during the period		-		-		-		-		-
Reductions for securities with credit losses due to intent to sell		-		-		-		-		-
Write-offs charged against the allowance		-		-		-		-		-
Recoveries of amounts previously written off		-		-		-		-		-

Ending Balance - September 30, 2025	$	-	$	-	$	520,819	$	12,049	$	532,868


	Nine Months Ended Sepember 30, 2024
	U.S. Treasury securities and obligations of U.S. Government agencies		Obligations of states and political subdivisions		Corporate securities including public utilities		Mortgage- backed securities		Total

Beginning balance - December 31, 2023	$	-	$	-	$	308,500	$	6,049	$	314,549
Balance	$	-	$	-	$	308,500	$	6,049	$	314,549

Additions for credit losses not previously recorded		-		-		55,000		6,000		61,000
Change in allowance on securities with previous allowance		-		-		39,053		-		39,053
Reductions for securities sold during the period		-		-		-		-		-
Reductions for securities with credit losses due to intent to sell		-		-		-		-		-
Write-offs charged against the allowance		-		-		-		-		-
Recoveries of amounts previously written off		-		-		-		-		-

Ending Balance - September 30, 2024	$	-	$	-	$	402,553	$	12,049	$	414,602
Balance	$	-	$	-	$	402,553	$	12,049	$	414,602

The table below presents the amortized cost and the estimated fair value of fixed maturity securities available for sale as of September 30, 2025, by contractual maturity. Actual or expected maturities may differ from contractual maturities because certain securities afford the issuer the right to call or prepay its obligations.

	Amortized Cost		Estimated Fair Value
Due in 1 year	$	5,431,523	$	5,435,051
Due in 2-5 years		138,658,507		139,348,247
Due in 5-10 years		129,622,596		133,518,158
Due in more than 10 years		88,645,457		88,303,599
Mortgage-backed securities		25,532,582		21,866,634
Redeemable preferred stock		750,000		721,900
Total	$	388,640,665	$	389,193,589

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

3) Investments (Continued)

Information regarding sales of fixed maturity securities available for sale is presented as follows.

	2025			2024			2025			2024
	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Proceeds from sales	$	377,496		$	181,949		$	3,142,137		$	789,190
Gross realized gains		3,668			-			4,194			2,714
Gross realized losses		( 14,777	)		( 20,666	)		( 15,318	)		( 1,522	)

Assets on Deposit, Held in Trust, and Pledged as Collateral

Assets on deposit with life insurance regulatory authorities as required by law were as follows:

	As of September 30, 2025		As of December 31, 2024
Fixed maturity securities available for sale at estimated fair value	$	7,756,474	$	6,126,589
Other investments		-		400,000
Cash and cash equivalents		1,538,320		1,444,654
Total assets on deposit	$	9,294,794	$	7,971,243

Assets held in trust related to third-party reinsurance agreements were as follows:

	As of September 30, 2025		As of December 31, 2024
Fixed maturity securities available for sale at estimated fair value	$	26,013,241	$	25,309,270
Cash and cash equivalents		1,310,683		4,417,683
Total assets on deposit	$	27,323,924	$	29,726,953

The Company, through two of its life insurance subsidiaries, is a member of the Federal Home Loan Banks of Des Moines and Dallas (“FHLBs”). Assets pledged as collateral with the FHLBs are presented below. These pledged securities are used as collateral for any FHLB cash advances. As of September 30, 2025, the Company owed $ 21,000,000 to the FHLBs for advances, which is included in Bank and other loans payable on the condensed consolidated balance sheets. The Company received $ 69,000,000 in advances and repaid $ 48,000,000 of these advances during the nine months ended September 30, 2025.

	As of September 30, 2025		As of December 31, 2024
Fixed maturity securities available for sale at estimated fair value	$	62,730,848	$	63,800,454
Total assets pledged as collateral	$	62,730,848	$	63,800,454

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

3) Investments (Continued)

Real Estate Held for Investment and Held for Sale

The Company strategically deploys resources into real estate assets 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 mortgage foreclosures.

Commercial Real Estate Held for Investment and Held for Sale

The Company owns, invests in and manages commercial real estate as a means of both generating investment income and providing workspace for its employees. This asset class is 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 resources. The geographic locations and asset sub-classes of investments are determined by senior management under the direction of the Board of Directors.

The Company employs full-time employees to manage the day-to-day operations of its commercial real estate within the greater Salt Lake area and close surrounding markets. The Company utilizes third party property managers where the geographic location does not warrant full-time staff or through strategic lease-up periods. The Company generally acquires commercial real estate in connection with company acquisitions or that are in regions expected to have high growth in employment and population and that provide operational efficiencies.

The Company currently owns and operates six commercial properties in two states. These properties include office buildings, flex office space, and the redevelopment and expansion of its corporate campus (“Center53”) in Salt Lake City, Utah. The Company uses bank debt in strategic cases, primarily where it is anticipated to improve yields, or facilitate the acquisition of higher quality assets or asset class diversification.

The aggregate net book value of commercial real estate serving as collateral for bank loans was $ 116,012,235 and $ 119,889,846 as of September 30, 2025, and December 31, 2024, respectively. The associated bank loan carrying values totaled $ 94,597,809 and $ 96,007,488 as of September 30, 2025, and December 31, 2024, respectively.

During the three- and nine-month periods ended September 30, 2025, and 2024, the Company did not record any impairment losses on commercial real estate held for investment or held for sale. Impairment losses, if any, are included in gains (losses) on investment and other assets on the condensed consolidated statements of earnings.

During the three-month periods ended September 30, 2025, and 2024, the Company recorded depreciation expense on commercial real estate held for investment of $ 1,432,750 and $ 1,420,367 , respectively, and of $ 4,287,687 and $ 4,366,462 during the nine-month periods ended September 30, 2025, and 2024, respectively. Commercial real estate held for investment is stated at cost and is depreciated over the estimated useful life, primarily using the straight-line method. Depreciation is included in net investment income on the condensed consolidated statements of earnings.

The Company’s commercial real estate held for investment is summarized as follows as of the respective dates indicated:

	Net Book Value				Total Square Footage
	September 30, 2025		December 31, 2024		September 30, 2025		December 31, 2024
Utah (1)	$	122,660,759	$	126,056,342		546,941		546,941
Louisiana		18,089		18,586		1,622		1,622

	$	122,678,848	$	126,074,928		548,563		548,563

(1)

Includes Center53

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

3) Investments (Continued)

The Company’s commercial real estate held for sale is summarized as follows as of the respective dates indicated:

	Net Book Value
	September 30, 2025		December 31, 2024
Mississippi (1)	$	151,553	$	151,553

	$	151,553	$	151,553

(1)

Consists of approximately 93 acres of undeveloped land

Commercial 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. As of September 30, 2025, real estate owned and occupied by the Company is summarized as follows:

Location	Business Segment	Approximate Square Footage		Square Footage Occupied by the Company
433 Ascension Way, Floors 4, 5 and 6, Salt Lake City, UT - Center53 Building 2 (1)	Corporate Offices, Life Insurance, Cemetery/Mortuary Operations, and Mortgage Operations and Sales		216,865		50	%
1818 Marshall Street, Shreveport, LA (2)	Life Insurance Operations		12,274		100	%
812 Sheppard Street, Minden, LA (2) (3)	Life Insurance Sales		1,560		100	%

(1)

Included in real estate held for investment on the condensed consolidated balance sheets

(2)

Included in property and equipment on the condensed consolidated balance sheets

(3)

Listed for sale

Residential Real Estate Held for Investment and Held for Sale

The Company occasionally acquires residential homes through the mortgage loan foreclosure process. The Company has the option to sell these properties or to continue to hold them for expected cash flow and price appreciation. The Company also looks for opportunities to acquire land that can be developed into single family lots. Once developed, finished lots are sold to builder partners and others.

During the three- and nine-month periods ended September 30, 2025, and 2024 the Company did not record any impairment losses on residential real estate held for investment. Impairment losses, if any, are included in gains (losses) on investment and other assets on the condensed consolidated statements of earnings.

During the three-month periods ended September 30, 2025, and 2024, the Company recorded depreciation expense on residential real estate held for investment of $ 2,732 and $ 2,653 , respectively, and $ 8,139 and $ 7,958 during the nine-month periods ended September 30, 2025, and 2024, respectively. Residential real estate held for investment is stated at cost and is depreciated over the estimated useful life, primarily using the straight-line method. Depreciation is included in net investment income on the condensed consolidated statements of earnings.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

3) Investments (Continued)

The Company’s residential real estate held for investment is summarized as follows as of the respective dates indicated:

	Net Book Value
	September 30, 2025		December 31, 2024
Utah (1)	$	93,885,033	$	71,618,410
	$	93,885,033	$	71,618,410

(1)

Includes multiple residential subdivision development projects, refer to the following tables.

The Company also invests in residential subdivision developments. The following table presents additional information regarding the Company’s residential subdivision development projects in Utah:

	September 30, 2025		December 31, 2024
Lots developed		184		231
Lots to be developed		1,238		1,046
Book Value	$	93,718,118	$	71,443,356

The Company’s residential real estate held for sale is summarized as follows as of the respective dates indicated:

	Net Book Value
	September 30, 2025		December 31, 2024
Utah	$	455,000	$	849,900
Florida		442,355		276,580
Georgia		380,000		-
Colorado		190,495		-
	$	1,467,850	$	1,126,480

The net book value of foreclosed residential real estate included in residential real estate held for sale was $ 1,467,850 and $ 1,126,480 as of September 30, 2025, and December 31, 2024, respectively.

Mortgage Loans Held for Investment

Mortgage loans held for investment consist of first and second mortgages and are generally classified into three distinct groups: Commercial, Residential and Residential Construction. These mortgage loans bear interest at rates ranging from 2.0 % to 10.5 %; maturity dates range from nine months to 30 years and have amortization periods of 0 to 30 years.

Concentrations of credit risk arise when several 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 the relevant debtors’ ability to honor obligations is dependent upon the economic stability of the geographic region in which the debtors do business or are employed. As of September 30, 2025, the Company had 59 %, 8 %, 6 %, 6 %, and 4 %, of its mortgage loans from borrowers located in the states of Utah, Florida, Arizona, California, and Texas, respectively. As of December 31, 2024, the Company had 56 %, 8 %, 9 %, and 6 % of its mortgage loans from borrowers located in the states of Utah, Florida, Arizona, and Texas, respectively.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

3) Investments (Continued)

Mortgage loans held for investment are carried at their unpaid principal balances adjusted for net deferred fees, charge-offs, premiums, discounts, and the related allowance for credit losses. Interest income is included in net investment income on the condensed consolidated statements of earnings and is recognized when earned. The Company defers related material loan origination fees, net of related direct loan origination costs, and amortizes the net fees over the terms of the loans. Origination fees are included in net investment income on the condensed consolidated statements of earnings.

Mortgage loans are secured by the underlying property and require an appraisal at the time of underwriting and funding. Generally, the Company requires that loans not exceed 80% of the fair market value of the respective loan collateral. For loans of more than 80% of the fair market value of the respective loan collateral, additional collateral or mortgage insurance by an approved third-party insurer is generally required.

Evaluation of Allowance for Credit Losses

The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the Company’s mortgage loans held for investment to present the net amount expected to be collected. The Company reports in net earnings, as a credit loss expense, the amount necessary to adjust the allowance for credit losses for the Company’s current estimate of expected credit losses on mortgage loans held for investment. This credit loss expense is included in other expenses on the condensed consolidated statements of earnings.

Once a mortgage loan is past due 90 days, it is the policy of the Company to end the accrual of interest income on the loan and reverse any interest income that had been accrued. Given this policy, the Company does not measure a credit loss allowance on accrued interest receivable. Accrued interest receivable is included in accrued investment income on the condensed consolidated balance sheets. Payments received for mortgage loans on a non-accrual status are recognized when received. The interest income recognized from payments received for mortgage loans on a non-accrual status was immaterial. Accrual of interest resumes if a mortgage loan is brought current. Interest not accrued on these loans totaled approximately $ 1,043,517 and $ 244,000 as of September 30, 2025, and December 31, 2024, respectively.

The Company measures expected credit losses based on the fair value of the collateral when the Company determines that foreclosure is probable. When a mortgage loan becomes delinquent, the Company proceeds to foreclose. Once foreclosed, the property is classified as real estate held for investment or held for sale.

To determine the allowance for credit losses, the Company has segmented its mortgage loans held for investment by loan type. The Company’s loan types are commercial, residential, and residential construction. The inherent risks within the portfolio vary depending upon the loan type as follows:

Commercial - Underwritten in accordance with the Company’s policies to determine the borrower’s ability to repay the obligation as agreed. Commercial loans are made primarily based on the underlying collateral supporting the loan. Accordingly, the repayment of a commercial loan depends primarily on the collateral and its ability to generate income and secondarily on the borrower’s (or guarantor’s) ability to repay.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

3) Investments (Continued)

Commercial loans are evaluated for credit loss by analyzing common metrics that are predictors for future credit losses such as debt service coverage ratio (“DSCR”), loan to value (“LTV”), local market conditions, borrower quality, and underlying collateral. The fair value of the underlying collateral is based on a third-party appraisal of the property at origination of the loan. The fair value is assessed if the loan becomes 90 days delinquent. The Company uses these metrics to pool similar loans. The allowance for credit losses is based on estimates, historical experience, probability of loss, value of the underlying collateral, and other factors that affect the collectability of the loan. The Company applies a future loss factor to the outstanding balance of each group to arrive at the allowance for credit losses.

Residential — These loans are secured by first and second mortgages on single-family dwellings. The borrower’s ability to repay is sensitive to the life events and the general economic condition of the region. Where LTV exceeds 80%, the loan is generally guaranteed by private mortgage insurance, the FHA, or VA.

Residential loans are evaluated for credit loss by using relevant available information from both internal and external sources. Among other things, the Company uses its historical delinquency information and considers current and forecasted economic conditions. External sources include a monthly analysis of its residential portfolio by a third party. The third party uses the Company’s current loan data and runs it through various models to project cash flows and provide a projected life of loan loss. The models consider loan features such as loan type, LTV, payment status, age, and current property values. Analyzing the information from various sources allows the Company to arrive at an allowance for credit losses.

Residential construction (including land acquisition and development loans) – These loans are underwritten in accordance with the Company’s underwriting policies, which include a financial analysis of the builders, borrowers (guarantors), construction cost estimates, and independent appraisal valuations, and factor in estimates of the value of construction projects upon completion. Construction loans generally involve the disbursement of substantial funds over a short period of time with repayment substantially dependent upon the success of the completed project and the ability of the borrower to secure long-term financing.

Additionally, land acquisition and development loans are underwritten in accordance with the Company’s underwriting policies, which include independent appraisal valuations as well as the estimated value associated with the land upon completion of development into finished lots. These loans are of a higher risk than other mortgage loans due to their ultimate repayment being sensitive to general economic conditions, availability of long-term or construction financing, and interest rate sensitivity.

The Company advances funds in accordance with the loan agreements once the work has been completed, and an independent inspection is made. The maximum loan commitment ranges between 50 % and 85 % of the appraised value. The Company receives fees and interest for these loans, and the interest rate is generally fixed at 5.25 % to 8.50 % per annum. Maturities range between six and eighteen months. The Company has commitments to fund existing construction and land development loans pursuant to the various loan agreements. As of September 30, 2025, the Company’s commitments were approximately $ 221,215,527 for these loans, of which $ 168,880,381 had been drawn.

Residential construction mortgage loans are evaluated for credit loss by considering historical activity and current housing market trends to arrive at a per loan basis point allowance that is recognized at loan origination and subsequent draws. The per loan basis point is reviewed at least annually or as loan losses or market trends require.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

3) Investments (Continued)

The following table presents a roll forward of the allowance for credit losses as of the dates indicated:

	Three Months Ended
	Commercial			Residential			Residential Construction		Total
Beginning balance - June 30, 2025	$	1,179,267		$	1,129,892		$	331,585	$	2,640,744
Change in provision for credit losses (1)		375,839			( 340,049	)		467		36,257
Charge-offs		-			-			-		-
Ending balance - September 30, 2025	$	1,555,106		$	789,843		$	332,052	$	2,677,001

Beginning balance - June 30, 2024	$	849,323		$	1,779,386		$	225,143	$	2,853,852
Change in provision for credit losses (1)		( 87,611	)		( 127,239	)		36,229		( 178,621	)
Charge-offs		-			( 1,095,485	)		-		( 1,095,485	)
Ending balance - September 30, 2024	$	761,712		$	556,662		$	261,372	$	1,579,746

	Nine Months Ended
	Commercial			Residential			Residential Construction		Total
Beginning balance - December 31, 2024	$	732,494		$	850,550		$	302,346	$	1,885,390
Change in provision for credit losses (1)		822,612			( 60,707	)		29,706		791,611
Charge-offs		-			-			-		-
Ending balance - September 30, 2025	$	1,555,106		$	789,843		$	332,052	$	2,677,001

Beginning balance - December 31, 2023	$	1,219,653		$	2,390,894		$	208,106	$	3,818,653
Change in provision for credit losses (1)		( 457,941	)		( 738,747	)		53,266		( 1,143,422	)
Charge-offs		-			( 1,095,485	)		-		( 1,095,485	)
Ending balance - September 30, 2024	$	761,712		$	556,662		$	261,372	$	1,579,746

(1)

Included in other expenses on the condensed consolidated statements of earnings

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

3) Investments (Continued)

The following table presents the aging of mortgage loans held for investment by loan type as of the dates indicated:

	Commercial			Residential			Residential Construction			Total
September 30, 2025
30-59 days past due	$	132,237		$	6,057,452		$	-		$	6,189,689
60-89 days past due		-			1,687,873			-			1,687,873
Over 90 days past due (1)		3,196,505			3,014,258			-			6,210,763
In process of foreclosure (1)		191,508			2,427,736			-			2,619,244
Total past due		3,520,250			13,187,319			-			16,707,569
Current		72,927,451			78,761,136			165,869,176			317,557,763
Total mortgage loans		76,447,701			91,948,455			165,869,176			334,265,332
Allowance for credit losses		( 1,555,106	)		( 789,843	)		( 332,052	)		( 2,677,001	)
Unamortized deferred loan fees, net		( 319,736	)		( 1,321,211	)		( 518,332	)		( 2,159,279	)
Unamortized discounts, net		( 145,419	)		( 118,942	)		-			( 264,361	)
Net mortgage loans held for investment	$	74,427,440		$	89,718,459		$	165,018,792		$	329,164,691

December 31, 2024
30-59 days past due	$	2,100,000		$	5,818,334		$	-		$	7,918,334
60-89 days past due		-			845,980			-			845,980
Over 90 days past due (1)		4,205,000			3,061,450			-			7,266,450
In process of foreclosure (1)		191,508			3,942,392			-			4,133,900
Total past due		6,496,508			13,668,156			-			20,164,664
Current		56,256,577			78,393,631			151,172,733			285,822,941
Total mortgage loans		62,753,085			92,061,787			151,172,733			305,987,605
Allowance for credit losses		( 732,494	)		( 850,550	)		( 302,346	)		( 1,885,390	)
Unamortized deferred loan fees, net		( 115,555	)		( 1,307,539	)		( 659,147	)		( 2,082,241	)
Unamortized discounts, net		( 149,268	)		( 123,348	)		-			( 272,616	)
Net mortgage loans held for investment	$	61,755,768		$	89,780,350		$	150,211,240		$	301,747,358

(1)

Interest income is not recognized on loans which are more than 90 days past due or in foreclosure.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

3) Investments (Continued)

Credit Quality Indicators

The Company evaluates and monitors the credit quality of its commercial loans by analyzing LTV and DSCR. Monitoring a commercial mortgage loan increases when the loan is delinquent or earlier if there is an indication of impairment.

The aggregate unpaid principal balance of commercial mortgage loans by credit quality indicator and origination year was as follows as of September 30, 2025:

Credit Quality Indicator	2025		2024		2023		2022		2021		Prior		Total		% of Total
LTV:
Less than 65%	$	19,847,653	$	3,892,248	$	15,600,000	$	462,761	$	824,305	$	8,475,563	$	49,102,530		64.23	%
65% to 80%		14,381,076		10,432,942		1,840,776		293,872		-		-		26,948,666		35.25	%
Greater than 80%		-		-		-		-		396,505		-		396,505		0.52	%

Total	$	34,228,729	$	14,325,190	$	17,440,776	$	756,633	$	1,220,810	$	8,475,563	$	76,447,701		100.00	%

DSCR
>1.20x	$	8,542,000	$	13,892,248	$	13,640,000	$	-	$	-	$	5,322,035	$	41,396,283		54.15	%
1.00x - 1.20x		20,161,729		432,942		3,800,776		756,633		1,220,810		3,153,528		29,526,418		38.62	%
<1.00x		5,525,000		-		-		-		-		-		5,525,000		7.23	%

Total	$	34,228,729	$	14,325,190	$	17,440,776	$	756,633	$	1,220,810	$	8,475,563	$	76,447,701		100.00	%

The aggregate unpaid principal balance of commercial mortgage loans by credit quality indicator and origination year was as follows as of December 31, 2024:

Credit Quality Indicator	2024		2023		2022		2021		2020		Prior		Total		% of Total
LTV:
Less than 65%	$	7,653,600	$	24,600,000	$	2,352,150	$	864,128	$	-	$	8,867,779	$	44,337,657		70.65	%
65% to 80%		10,432,942		1,840,776		823,397		-		4,913,313		-		18,010,428		28.70	%
Greater than 80%		-		-		-		405,000		-		-		405,000		0.65	%

Total	$	18,086,542	$	26,440,776	$	3,175,547	$	1,269,128	$	4,913,313	$	8,867,779	$	62,753,085		100.00	%

DSCR
>1.20x	$	16,300,000	$	20,990,000	$	1,000,000	$	-	$	4,913,313	$	5,414,274	$	48,617,587		77.47	%
1.00x - 1.20x		432,942		5,450,776		2,175,547		1,269,128		-		3,453,505		12,781,898		20.37	%
<1.00x		1,353,600		-		-		-		-		-		1,353,600		2.16	%

Total	$	18,086,542	$	26,440,776	$	3,175,547	$	1,269,128	$	4,913,313	$	8,867,779	$	62,753,085		100.00	%

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

3) Investments (Continued)

The Company evaluates and monitors the credit quality of its residential mortgage loans by analyzing LTV and loan performance. The Company defines non-performing mortgage loans as loans more than 90 days past due and on a non-accrual status. Monitoring a residential mortgage loan increases when the loan is delinquent or earlier if there is an indication of impairment.

The aggregate unpaid principal balance of residential mortgage loans by credit quality indicator and origination year was as follows as of September 30, 2025:

Credit Quality Indicator	2025		2024		2023		2022		2021		Prior		Total		% of Total
Performance Indicators:
Performing	$	9,761,488	$	11,925,652	$	8,846,498	$	39,491,126	$	2,894,338	$	13,587,359	$	86,506,461		94.08	%
Non-performing (1)		546,602		-		3,013,370		943,125		-		938,897		5,441,994		5.92	%

Total	$	10,308,090	$	11,925,652	$	11,859,868	$	40,434,251	$	2,894,338	$	14,526,256	$	91,948,455		100.00	%

(1)

Includes residential mortgage loans in the process of foreclosure of $ 2,427,736

LTV:
Less than 65%	$	3,581,292	$	5,723,881	$	4,547,440	$	6,670,677	$	1,337,492	$	7,570,352	$	29,431,134	32.01	%
65% to 80%		5,742,730		6,046,634		6,638,395		32,174,154		1,556,846		6,416,327		58,575,086	63.70	%
Greater than 80%		984,068		155,137		674,033		1,589,420		-		539,577		3,942,235	4.29	%

Total	$	10,308,090	$	11,925,652	$	11,859,868	$	40,434,251	$	2,894,338	$	14,526,256	$	91,948,455	100.00	%

The aggregate unpaid principal balance of residential mortgage loans by credit quality indicator and origination year was as follows as of December 31, 2024:

Credit Quality Indicator	2024		2023		2022		2021		2020		Prior		Total		% of Total
Performance Indicators:
Performing	$	14,861,098	$	10,030,848	$	42,634,670	$	3,076,901	$	5,513,462	$	8,940,966	$	85,057,945		92.39	%
Non-performing (1)		-		3,442,992		1,451,039		291,359		311,116		1,507,336		7,003,842		7.61	%

Total	$	14,861,098	$	13,473,840	$	44,085,709	$	3,368,260	$	5,824,578	$	10,448,302	$	92,061,787		100.00	%

(1)

Includes residential mortgage loans in the process of foreclosure of $ 3,942,392

	Year 1		Year 2		Year 3		Year 4		Year 5
LTV:
Less than 65%	$	6,241,730	$	4,931,376	$	5,488,954	$	1,790,036	$	2,440,002	$	5,273,672	$	26,165,770	28.42	%
65% to 80%		7,802,984		7,662,200		37,509,634		1,578,224		2,701,008		5,107,289		62,361,339	67.74	%
Greater than 80%		816,384		880,264		1,087,121		-		683,568		67,341		3,534,678	3.84	%

Total	$	14,861,098	$	13,473,840	$	44,085,709	$	3,368,260	$	5,824,578	$	10,448,302	$	92,061,787	100.00	%

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

3) Investments (Continued)

The Company evaluates and monitors the credit quality of its residential construction loans (including land acquisition and development loans) by analyzing LTV and loan performance. Monitoring a residential construction mortgage loan increases when the loan is delinquent or earlier if there is an indication of impairment.

The aggregate unpaid principal balance of residential construction mortgage loans by credit quality indicator and origination year was as follows as of September 30, 2025:

Credit Quality Indicator	2025		2024		2023		2022		2021		Total		% of Total
Performance Indicators:
Performing	$	97,416,837	$	55,925,032	$	7,751,304	$	-	$	4,776,003	$	165,869,176		100.00	%
Non-performing		-		-		-		-		-		-		0.00	%

Total	$	97,416,837	$	55,925,032	$	7,751,304	$	-	$	4,776,003	$	165,869,176		100.00	%

LTV:
Less than 65%	$	27,347,365	$	30,938,061	$	7,751,304	$	-	$	4,776,003	$	70,812,733		42.69	%
65% to 80%		65,953,712		24,986,971		-		-		-		90,940,683		54.83	%
Greater than 80%		4,115,760		-		-		-		-		4,115,760		2.48	%

Total	$	97,416,837	$	55,925,032	$	7,751,304	$	-	$	4,776,003	$	165,869,176		100.00	%

The aggregate unpaid principal balance of residential construction mortgage loans by credit quality indicator and origination year was as follows as of December 31, 2024:

Credit Quality Indicator	2024		2023		2022		2021		Total		% of Total
Performance Indicators:
Performing	$	118,863,944	$	21,375,552	$	972,468	$	9,960,769	$	151,172,733		100.00	%
Non-performing		-		-		-		-		-		0.00	%

Total	$	118,863,944	$	21,375,552	$	972,468	$	9,960,769	$	151,172,733		100.00	%

LTV:
Less than 65%	$	48,065,177	$	21,375,552	$	518,590	$	9,960,769	$	79,920,088		52.87	%
65% to 80%		70,798,767		-		453,878		-		71,252,645		47.13	%
Greater than 80%				-		-		-		-		0.00	%

Total	$	118,863,944	$	21,375,552	$	972,468	$	9,960,769	$	151,172,733		100.00	%

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

3) Investments (Continued)

Insurance Assignments

The following table presents the aging of insurance assignments, included in other investments and policy loans on the condensed consolidated balance sheets:

	As of September 30, 2025			As of December 31, 2024
30-59 days past due	$	7,982,177		$	8,785,184
60-89 days past due		2,834,811			4,046,731
Over 90 days past due		4,883,289			5,320,216
Total past due		15,700,277			18,152,131
Current		26,578,043			30,341,727
Total insurance assignments		42,278,320			48,493,858
Allowance for credit losses		( 1,534,957	)		( 1,536,926	)
Net insurance assignments	$	40,743,363		$	46,956,932

The Company records an allowance for credit losses when the insurance assignment is funded. Once an insurance assignment is 90 days past due or is in legal proceedings, it is monitored for write-off and collectability, and any adjustments to the allowance are recorded at that time.

The following table presents a roll forward of the allowance for credit losses for insurance assignments as of the dates indicated:

	Three Months Ended
Beginning balance - June 30, 2025	$	1,481,032
Change in provision for credit losses (1)		248,408
Charge-offs		( 194,483	)
Ending balance - September 30, 2025	$	1,534,957

Beginning balance - June 30, 2024	$	1,535,324
Change in provision for credit losses (1)		259,643
Charge-offs		( 254,132	)
Ending balance - September 30, 2024	$	1,540,835

	Nine Months Ended
Beginning balance - December 31, 2024	$	1,536,926
Change in provision for credit losses (1)		799,460
Charge-offs		( 801,429	)
Ending balance - September 30, 2025	$	1,534,957

Beginning balance - December 31, 2023	$	1,553,836
Change in provision for credit losses (1)		752,256
Charge-offs		( 765,257	)
Ending balance - September 30, 2024	$	1,540,835

(1)

Included in other expenses on the condensed consolidated statements of earnings

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

3) Investments (Continued)

Variable Interest Entities (“VIE”)

The Company has a 50 % ownership interest in three VIEs; HHH Real Estate LLC (“HHH”), SN Oquirrh LLC (“Oquirrh”), and SN Towns LLC (“Towns”). These entities hold and develop single family lots for residential construction. In accordance with the operating agreements for these entities, net profits or losses are allocated to the members in accordance with their ownership interests. The investments in HHH, Oquirrh and Towns are accounted for under the equity method of accounting. The carrying value of the equity investment in HHH was $ 11,163,125 and nil at September 30, 2025, and December 31, 2024, respectively, which is included in other investments and policy loans on the condensed consolidated balance sheets. The carrying value of the equity investment in Oquirrh was $ 870,063 and $ 1,500,000 at September 30, 2025, and December 31, 2024, respectively, which is included in other investments and policy loans on the condensed consolidated balance sheets. The carrying value of the equity investment in Towns was $ 2,614,037 and $ 4,063,537 at September 30, 2025, and December 31, 2024, respectively. $ 1,445,769 and $ 1,939,269 of which at September 30, 2025, and December 31, 2024, respectively, is included in restricted assets and $ 1,168,268 and $ 2,124,268 of which at September 30, 2025, and December 31, 2024, respectively, is included in cemetery perpetual care trust investments on the condensed consolidated balance sheets.

The Company has determined that HHH, Oquirrh and Towns are VIEs for which the Company is not the primary beneficiary for the following reasons: (1) the at-risk equity holders, as a group, lack the characteristics of a controlling financial interest, (2) the General Manager directs the activities and legal operations that most significantly affect the entity’s economic performance and (3) the Company does not have majority voting rights and no power to unilaterally direct the activities of the entity, and therefore, is not the primary beneficiary. The Company’s exposure to loss because of its involvement with the equity method investees is limited to the carrying value of the Company’s investments.

Investment Related Earnings

The following table presents the realized gains and losses from sales, calls, and maturities, and unrealized gains and losses on equity securities from investments and other assets:

	2025			2024			2025			2024
	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Fixed maturity securities:
Gross realized gains	$	3,904		$	7,929		$	5,425		$	13,120
Gross realized losses		( 24,168	)		( 43,184	)		( 36,426	)		( 61,539	)
Net credit loss provision		( 45,882	)		( 20,342	)		( 111,875	)		( 100,053	)

Equity securities:
Gains (losses) on securities sold		( 990,140	)		708			( 860,032	)		( 16,662	)
Unrealized gains on securities held at the end of the period		2,477,603			2,415,881			3,544,484			3,534,285

Mortgage loans held for investment:
Gross realized gains		-			-			-			-
Gross realized losses		-			( 1,161,364	)		-			( 1,161,364	)

Real estate held for investment and sale:
Gross realized gains		644,370			71,622			1,241,285			360,474
Gross realized losses		( 12,099	)		-			( 12,099	)		-

Other assets:
Gross realized gains		448			95,690			11,252			92,095
Gross realized losses		( 81,838	)		( 19,284	)		( 81,088	)		( 20,513	)
Total	$	1,972,198		$	1,347,656		$	3,700,926		$	2,639,843

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

3) Investments (Continued)

The realized gains and losses on the sale of securities are recorded on the trade date, and the cost of the securities sold is determined using the specific identification method.

Net realized gains and losses includes gains and losses from cemetery perpetual care trust investments and the restricted assets of cemeteries and mortuaries and totaled $ 711,436 and $ 1,140,136 in net gains for the three-month periods ended September 30, 2025 and 2024, respectively, and of $ 1,196,591 and $ 1,519,487 in net gains for the nine-month periods ended September 30, 2025 and 2024, respectively.

Major categories of net investment income were as follows:

	2025			2024			2025			2024
	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Fixed maturity securities available for sale	$	4,818,558		$	4,301,241		$	14,233,356		$	13,050,503
Equity securities		210,342			171,767			650,605			516,363
Mortgage loans held for investment		10,149,577			7,032,201			30,571,474			22,867,797
Real estate held for investment and sale		2,885,847			3,093,459			8,718,124			9,893,539
Policy loans		256,796			225,393			737,159			715,791
Insurance assignments		4,948,025			5,009,043			15,818,390			14,971,607
Other investments		236,288			272,062			480,123			672,363
Cash and cash equivalents		747,758			1,700,898			3,104,010			5,107,765
Gross investment income		24,253,191			21,806,064			74,313,241			67,795,728
Investment expenses		( 4,143,591	)		( 4,006,968	)		( 14,420,029	)		( 12,005,256	)
Net investment income	$	20,109,600		$	17,799,096		$	59,893,212		$	55,790,472

Net investment income includes income earned from cemetery perpetual care trust investments and the restricted assets of cemeteries and mortuaries and totaled $ 319,480 and $ 393,811 for the three-month periods ended September 30, 2025, and 2024, respectively, and $ 686,952 and $ 1,798,170 for the nine-month periods ended September 30, 2025, and 2024, 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.

Accrued Investment Income

Accrued investment income consists of the following:

	As of September 30, 2025		As of December 31, 2024
Fixed maturity securities available for sale	$	4,530,512	$	3,795,581
Equity securities		14,147		11,049
Mortgage loans held for investment		981,754		1,049,489
Real estate held for investment		4,181,528		3,559,463
Other investments		4,667		-
Cash and cash equivalents		33,760		83,586
Total accrued investment income	$	9,746,368	$	8,499,168

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

4) Loans Held for Sale

The Company’s loans held for sale portfolio is valued using the fair value option. Changes in the fair value of the loans are included in mortgage fee income. Interest income is recorded based on the contractual terms of the loan and in accordance with the Company’s policy on recognition of mortgage loan interest income and is included in mortgage fee income on the condensed consolidated statement of earnings. See Note 8 to the condensed consolidated financial statements for additional disclosures regarding loans held for sale.

The following table presents the aggregate fair value and the aggregate unpaid principal balance of loans held for sale:

	As of September 30, 2025		As of December 31, 2024

Aggregate fair value	$	159,460,525	$	131,181,148
Unpaid principal balance		156,916,889		128,948,072
Unrealized gain		2,543,636		2,233,076

Mortgage Fee Income

Mortgage fee income consists of origination fees, processing fees, interest income, and other income related to the origination and sale of mortgage loans held for sale.

Major categories of mortgage fee income for loans held for sale are summarized as follows:

	2025			2024			2025			2024
	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Loan fees	$	6,670,934		$	7,358,830		$	18,634,088		$	20,245,527
Interest income		2,500,007			2,357,379			6,533,686			6,104,113
Secondary gains		20,378,078			17,982,124			57,518,242			51,387,693
Change in fair value of loan commitments		( 202,896	)		( 179,836	)		404,048			811,765
Change in fair value of loans held for sale		10,709			2,959,729			960,050			3,855,914
Provision for loan loss reserve		( 217,587	)		( 254,134	)		( 616,524	)		( 729,734	)
Mortgage fee income	$	29,139,245		$	30,224,092		$	83,433,590		$	81,675,278

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

4) Loans Held for Sale (Continued)

Loan Loss Reserve

Repurchase demands (“demand(s)”) from third party investors for mortgage loans previously held for sale and sold are reviewed, and relevant data is captured so that an estimated future loss can be calculated. The key factors that are used in the estimated future 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 demand. In many instances, the Company can resolve the issues relating to the demand by the third-party investor without having to make any payments to the investor.

The loan loss reserve, which is included in other liabilities and accrued expenses, is summarized as follows:

	As of September 30, 2025			As of December 31, 2024
Balance, beginning of period	$	696,626		$	547,233
Provision on current loan originations (1)		616,524			932,154
Additional provision (2)		40,000			-
Charge-offs, net of recaptured amounts		( 764,281	)		( 782,761	)
Balance, end of period	$	588,869		$	696,626

(1)

Included in mortgage fee income

(2)

Included in other expenses

The Company maintains reserves for estimated losses on current production volumes. For the nine-month period ended September 30, 2025, $ 616,524 in reserves were added at a rate of 3.5 basis points per loan, the equivalent of $ 350 per $ 1,000,000 in loans originated. For the nine-month period ended September 30, 2024, $ 729,734 in reserves were added at a rate of 4.2 basis points per loan, the equivalent of $ 420 per $ 1,000,000 in loans originated. The Company monitors market data and trends, and economic conditions (including forecasts) and uses its own experience to determine adequate loss reserves on current production.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

5) Stock Compensation Plans

The Company has three active equity incentive plans (the “2013 Plan”, the “2014 Director Plan” and the “2022 Plan” or “the Plans”).

Stock Options

Stock based compensation expense for stock options issued of $ 310,165 and $ 195,431 has been recognized for these Plans for the three-month periods ended September 30, 2025, and 2024, respectively, and $ 919,868 and $ 577,613 has been recognized for these Plans for the nine-month periods ended September 30, 2025, and 2024, respectively, and is included in personnel expenses on the condensed consolidated statements of earnings. As of September 30, 2025, the total unrecognized compensation expense related to the options issued was $ 238,128 which is expected to be recognized over the remaining vesting period.

The fair value of each option granted is estimated on the date of grant using the Black Scholes Option Pricing Model. The Company estimates the expected life of the options using the simplified method. Future volatility is estimated based upon the weighted historical volatility of the Company’s Class A common stock over a period equal to the expected life of the options. The risk-free interest rate for the expected life of the options is based upon the Federal Reserve Board’s daily interest rates in effect at the time of the grant.

The activity of the Plans during the nine-month period ended September 30, 2025, is summarized as follows:

	Number of Class A Shares			Weighted Average Exercise Price (2)		Number of Class C Shares			Weighted Average Exercise Price (2)

Outstanding at December 31, 2024		646,594		$	5.63		1,724,400		$	6.87
Adjustment for the effect of stock dividends		27,898					80,571
Granted		24,000					-
Exercised		( 112,735	)				( 113,023	)
Cancelled		( 18,462	)				-
Outstanding at September 30, 2025		567,295		$	5.77		1,691,948		$	7.13

As of September 30, 2025:
Options exercisable		548,470		$	5.55		1,609,452		$	9.05

As of September 30, 2025:
Available options for future grant		2,164,542					678,550

Weighted average contractual term of options
outstanding at September 30, 2025		4.92 years					6.14 years

Weighted average contractual term of options
exercisable at September 30, 2025		4.77 years					6.00 years

Aggregated intrinsic value of options
outstanding at September 30, 2025 (1)	$	1,647,183				$	2,607,971

Aggregated intrinsic value of options
exercisable at September 30, 2025 (1)	$	1,710,565				$	2,926,771

(1)

The Company used a stock price of $ 8.67 as of September 30, 2025 to derive intrinsic value.

(2)

Adjusted for the effect of annual stock dividends.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

5) Stock Compensation Plans (Continued)

The activity of the Plans during the nine-month period ended September 30, 2024, is summarized as follows:

	Number of Class A Shares			Weighted Average Exercise Price (2)		Number of Class C Shares		Weighted Average Exercise Price (2)

Outstanding at December 31, 2023		833,570		$	4.91		1,520,062	$	5.57
Adjustment for the effect of stock dividends		38,724					76,005
Granted		16,500					-
Exercised		( 88,714	)				-
Cancelled		( 17,333	)				-
Outstanding at September 30, 2024		782,747		$	5.16		1,596,067	$	5.57

As of September 30, 2024:
Options exercisable		751,872		$	5.05		1,519,817	$	5.46

As of September 30, 2024:
Available options for future grant		39,006					556,238

Weighted average contractual term of options
outstanding at September 30, 2024		4.91 years					5.74 years

Weighted average contractual term of options
exercisable at September 30, 2024		4.73 years					5.63 years

Aggregated intrinsic value of options
outstanding at September 30, 2024 (1)	$	3,165,305				$	5,793,310

Aggregated intrinsic value of options
exercisable at September 30, 2024 (1)	$	3,119,776				$	5,676,723

(1)

The Company used a stock price of $ 9.20 as of September 30, 2024 to derive intrinsic value.

(2)

Adjusted for the effect of annual stock dividends.

The total intrinsic value (which is the amount by which the fair value of the underlying stock exceeds the exercise price of an option on the exercise date) of stock options exercised during the nine-month periods ended September 30, 2025, and 2024 was $1,357,776 and $290,159, respectively.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

5) Stock Compensation Plans (Continued)

Restricted Stock Units (“RSUs”)

Stock based compensation expense for RSUs issued of $ 10,076 and $ 895 has been recognized under these plans for the three-month periods ended September 30, 2025, and 2024, respectively, and $ 30,012 and $ 2,666 has been recognized under these plans for the nine-month periods ended September 30, 2025, and 2024, and is included in personnel expenses on the condensed consolidated statements of earnings. The fair value of each RSU granted is determined by the Company’s stock price on the date of the grant. As of September 30, 2025, the total unrecognized compensation expense related to the RSUs issued was $ 7,286 , which is expected to be recognized over the remaining vesting period.

Activity of the RSUs during the nine-month period ended September 30, 2025, is summarized as follows:

	Number of Class A Shares			Weighted Average Grant Date Fair Value
Non-vested at December 31, 2024		12,813		$	12.90
Granted		-
Vested		( 6,639	)
Non-vested at September 30, 2025		6,174		$	13.08

Available RSUs for future grant		504,187

Activity of the RSUs during the nine-month period ended September 30, 2024, is summarized as follows:

	Number of Class A Shares			Weighted Average Grant Date Fair Value
Non-vested at December 31, 2023		2,245		$	7.72
Granted		-
Vested		( 1,325	)
Non-vested at September 30, 2024		920		$	7.99

Available RSUs for future grant		16,540

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

6) Earnings Per Share

Earnings per share have been retroactively adjusted for the effect of annual stock dividends. In accordance with GAAP, the basic and diluted earnings per share were calculated as follows:

	2025		2024		2025		2024
	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Numerator:
Net earnings	$	7,815,026	$	11,831,444	$	18,659,673	$	26,577,515
Denominator:
Basic weighted-average shares outstanding		24,709,518		24,418,679		24,725,938		24,465,661
Effect of dilutive securities:
Employee stock options		691,927		853,399		828,239		731,352

Diluted weighted-average shares outstanding		25,401,445		25,272,078		25,554,177		25,197,013

Basic net earnings per share	$	0.32	$	0.48	$	0.75	$	1.09

Diluted net earnings per share	$	0.31	$	0.47	$	0.73	$	1.05

For the nine-month periods ended September 30, 2025, and 2024, there were 403,514 and nil anti-dilutive stock option shares, respectively, that were not included in the computation of diluted net earnings per common share as their effect would be anti-dilutive. Basic and diluted earnings per share are the same for each class of common stock.

The following table summarizes the activity in shares of capital stock.

	Class A		Class C
Outstanding shares at December 31, 2024 (1)		22,321,559		3,492,674

Exercise of stock options		66,273		95,337
Vesting of restricted stock units		6,639		-
Conversion of Class C to Class A		774		( 774	)

Outstanding shares at September 30, 2025 (1)		22,395,245		3,587,237

Outstanding shares at December 31, 2023 (1)		22,119,436		3,291,271
Outstanding shares, beginning		22,119,436		3,291,271

Exercise of stock options		63,512		-
Vesting of restricted stock units		1,325		-
Conversion of Class C to Class A		266		( 266	)

Outstanding shares at September 30, 2024 (1)		22,184,539		3,291,005
Outstanding shares, ending		22,184,539		3,291,005

(1)

Adjusted retroactively for the effect of annual stock dividends

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

7) Business Segment Information

Description of Products and Services by Segment

The Company has identified three operating and reportable business segments: life insurance, cemetery and mortuary, and mortgage. The Company’s life insurance segment revenue consists of life insurance premiums; fees earned on factored life insurance policies and net investment income derived from investing policyholder and surplus funds. Its expenses include operating expenses to collect insurance premiums and insurance policy receivables, and administer claims, and commissions payable related to the sale of insurance products sold by the Company’s independent agency force. The Company’s cemetery and mortuary segment revenue consists of fees from the sale of at-need cemetery and mortuary merchandise, services at its mortuaries and cemeteries, pre-need sales of cemetery spaces and the net investment income from investing surplus cash. Its expenses include operating expenses to maintain mortuary and cemetery operations and commissions related to the sale of insurance products sold by the Company’s agents. The Company’s mortgage segment revenue consists of residential mortgage origination fee income and mortgage interest income. Its expenses include normal operating expenses related to the origination and sale of residential mortgage loans, loan servicing, and warehouse interest and fee expenses.

Services and Cost Sharing Policies

The accounting policies of the Company’s operating and reportable segments are the same as those described in Part II, Item 8, Note 1 - Significant Accounting Policies of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Intersegment revenues are recorded at cost plus an agreed upon intercompany profit and are eliminated upon consolidation. In addition to revenues, the reportable segments share in business services and costs including personnel expenses, rent, information technology, software, interest expense, and other similar operating costs. These shared services and costs are allocated between the segments using prevailing market rates and other agreed upon allocation methods.

Factors Management Used to Identify the Company’s Operating and Reportable Segments

The Company’s operating and 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.

Chief Operating Decision Maker (“CODM”)

The Company’s CODM is the Chief Executive Officer. The following table summarizes significant segment expenses. The significant expenses are based on the information that the CODM is regularly provided to assess segment performance. The CODM reviews the regularly provided information for each segment monthly and gives added emphasis on month-over-month and year-over-year comparative results. The CODM considers these comparative results when making decisions about the allocation of the Company’s resources to each segment. The measure of segment profit or loss for the Company’s three operating and reportable business segments is net earnings.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

7) Business Segment Information (Continued)

	Insurance		Mortuary		Mortgage		Total
	For the Three Months Ended September 30, 2025
	Life		Cemetery/
	Insurance		Mortuary		Mortgage		Total
Revenues:
From external sources:
Revenue from external customers	$	29,880,785	$	7,140,942	$	29,139,245	$	66,160,972
Net investment income		19,278,861		641,814		188,925		20,109,600
Gains on investments and other assets		1,258,854		711,884		1,460		1,972,198
Other revenues		371,667		432,894		278,832		1,083,393
Intersegment revenues		2,044,534		85,699		75,882		2,206,115
Total segment revenues		52,834,701		9,013,233		29,684,344		91,532,278

Elimination of intersegment revenues								( 2,206,115	)
Total consolidated revenues								89,326,163

Less:
Death benefits		15,182,809		-		-
Surrenders and other policy benefits		1,374,289		-		-
Increase in future policy benefits		8,376,973		-		-
Amortization of deferred policy and pre-need acquisition costs and value of business acquired		5,329,768		203,653		-
Selling, general and administrative expenses:
Commissions		1,327,707		53,382		11,673,028
Personnel		8,679,182		2,689,765		10,150,091
Advertising		172,623		174,285		636,383
Rent and rent related		86,781		38,902		821,981
Depreciation on property and equipment		217,990		233,853		155,457
Cost related to funding mortgage loans		-		-		1,813,814
Data processing and IT related (1)		334,212		78,005		913,247
Premium taxes on insurance premiums and other considerations (1)		751,520		-		-
Other segment items (1)(2)		2,884,733		1,299,434		1,339,391
Intersegment expenses (3)		161,581		83,359		1,961,175
Interest expense		912,232		136		154,160
Costs of goods and services sold-mortuaries and cemeteries		-		1,113,425		-
Income tax expense		1,534,528		757,700		45,698
Segment net earnings		5,507,773		2,287,334		19,919		7,815,026

Net earnings							$	7,815,026

(1)

Included in other expenses on the condensed consolidated statements of earnings. Data processing and IT related expenses includes various software subscriptions, maintenance, consulting, support and storage fees.

(2)

For each reportable segment, other segment items includes:

Life Insurance - bad debt, insurance expenses, professional service expenses, state insurance department fees, amortization of intangible assets, and certain overhead expenses.

Cemetery/Mortuary - bad debt, insurance expenses, professional service expenses, maintenance and utility expenses, property taxes, amortization of intangible assets, and certain overhead expenses.

Mortgage - bad debt, insurance expenses, professional service expenses, business license and registration fees, dues and subscriptions, amortization expense of mortgage servicing rights, and certain overhead expenses.

(3)	For each reportable segment, intersegment expenses includes:

Life Insurance - mortgage servicing fees and interest expense.

Cemetery/Mortuary - rent expense, data processing and IT related expenses, and interest expense.

Mortgage - rent expense and interest expense.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

7) Business Segment Information (Continued)

	Insurance		Mortuary		Mortgage			Total
	For the Three Months Ended September 30, 2024
	Life		Cemetery/
	Insurance		Mortuary		Mortgage			Total
Revenues:
From external sources:
Revenue from external customers	$	30,011,081	$	6,814,331	$	30,224,092		$	67,049,504
Net investment income		17,105,712		477,833		215,551			17,799,096
Gains (losses) on investments and other assets		1,316,673		1,124,513		( 1,093,530	)		1,347,656
Other revenues		419,890		126,000		1,531,541			2,077,431
Intersegment revenues		2,066,052		85,699		137,946			2,289,697
Total segment revenues		50,919,408		8,628,376		31,015,600			90,563,384

Elimination of intersegment revenues									( 2,289,697	)
Total consolidated revenues									88,273,687

Less:
Death benefits		13,570,336		-		-
Surrenders and other policy benefits		1,194,692		-		-
Increase in future policy benefits		8,589,354		-		-
Amortization of deferred policy and pre-need acquisition costs and value of business acquired		2,093,892		193,111		-
Selling, general and administrative expenses:
Commissions		953,987		268,499		11,981,920
Personnel		7,462,332		2,483,960		11,303,262
Advertising		177,329		159,117		571,082
Rent and rent related		103,137		39,324		1,237,615
Depreciation on property and equipment		248,914		205,529		157,032
Cost related to funding mortgage loans		-		-		1,694,791
Data processing and IT related (1)		210,002		62,314		813,729
Premium taxes on insurance premiums and other considerations (1)		739,809		-		-
Other segment items (1)(2)		2,061,764		1,167,856		1,136,150
Intersegment expenses (3)		223,434		90,613		1,975,650
Interest expense		932,239		194		128,220
Costs of goods and services sold-mortuaries and cemeteries		-		1,117,513		-
Income tax expense		2,651,944		716,898		14,396
Segment net earnings		9,706,243		2,123,448		1,753			11,831,444

Net earnings								$	11,831,444

(1)

(2)

For each reportable segment, other segment items includes:

Life Insurance - bad debt, insurance expenses, professional service expenses, state insurance department fees, amortization of intangible assets, and certain overhead expenses.

Cemetery/Mortuary - bad debt, insurance expenses, professional service expenses, maintenance and utility expenses, property taxes, amortization of intangible assets, and certain overhead expenses.

(3)	For each reportable segment, intersegment expenses includes:

Life Insurance - mortgage servicing fees and interest expense.

Cemetery/Mortuary - rent expense, data processing and IT related expenses, and interest expense.

Mortgage - rent expense and interest expense.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

7) Business Segment Information (Continued)

	Insurance		Mortuary		Mortgage			Total
	For the Nine Months Ended September 30, 2025
	Life		Cemetery/
	Insurance		Mortuary		Mortgage			Total
Revenues:
From external sources:
Revenue from external customers	$	89,846,164	$	21,698,880	$	83,433,590		$	194,978,634
Net investment income		57,909,679		1,528,492		455,041			59,893,212
Gains on investments and other assets		2,422,649		1,193,030		85,247			3,700,926
Other revenues		1,422,933		766,987		844,343			3,034,263
Intersegment revenues		5,192,800		254,302		272,307			5,719,409
Total segment revenues		156,794,225		25,441,691		85,090,528			267,326,444

Elimination of intersegment revenues									( 5,719,409	)
Total consolidated revenues									261,607,035

Less:
Death benefits		46,249,912		-		-
Surrenders and other policy benefits		3,807,498		-		-
Increase in future policy benefits		26,165,160		-		-
Amortization of deferred policy and pre-need acquisition costs and value of business acquired		15,436,601		531,030		-
Selling, general and administrative expenses:
Commissions		3,266,908		841,828		32,849,100
Personnel		25,602,668		7,901,569		32,368,554
Advertising		398,893		468,503		1,880,288
Rent and rent related		265,531		112,896		2,494,987
Depreciation on property and equipment		680,675		669,398		471,380
Cost related to funding mortgage loans		-		-		5,120,855
Data processing and IT related (1)		882,143		222,937		2,690,366
Premium taxes on insurance premiums and other considerations (1)		2,203,794		-		-
Other segment items (1)(2)		7,911,917		3,834,468		5,211,239
Intersegment expenses (3)		526,395		255,285		4,937,729
Interest expense		2,812,509		446		666,539
Costs of goods and services sold-mortuaries and cemeteries		-		3,525,978		-
Income tax expense (benefit)		4,526,820		1,722,410		( 848,438	)
Segment net earnings (loss)		16,056,801		5,354,943		( 2,752,071	)		18,659,673

Net earnings								$	18,659,673

Segment assets	$	1,403,748,846	$	105,083,649	$	89,648,621		$	1,598,481,116

Elimination of intersegment assets									( 35,495,025	)
Total consolidated assets								$	1,562,986,091

Expenditures for long-lived assets	$	53,325,905	$	1,176,244	$	296,776		$	54,798,925

(1)	Included in other expenses on the condensed consolidated statements of earnings. Data processing and IT related expenses includes various software subscriptions, maintenance, consulting, support and storage fees.
(2)	For each reportable segment, other segment items includes:

Life Insurance - bad debt, insurance expenses, professional service expenses, state insurance department fees, amortization of intangible assets, and certain overhead expenses.

Cemetery/Mortuary - bad debt, insurance expenses, professional service expenses, maintenance and utility expenses, property taxes, amortization of intangible assets, and certain overhead expenses.

Mortgage - bad debt, insurance expenses, professional service expenses, business license and registration fees dues and subscriptions, amortization expense of mortgage servicing rights, and certain overhead expenses.

(3)	For each reportable segment, intersegment expenses includes:

Life Insurance - mortgage servicing fees and interest expense.

Cemetery/Mortuary - rent expense, data processing and IT related expenses, and interest expense.

Mortgage - rent expense and interest expense.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

7) Business Segment Information (Continued)

	Insurance		Mortuary		Mortgage			Total
	For the Nine Months Ended September 30, 2024
	Life		Cemetery/
	Insurance		Mortuary		Mortgage			Total
Revenues:
From external sources:
Revenue from external customers	$	89,823,732	$	21,531,769	$	81,675,278		$	193,030,779
Net investment income		52,902,146		2,136,982		751,344			55,790,472
Gains on investments and other assets		2,194,572		1,503,865		( 1,058,594	)		2,639,843
Other revenues		1,140,856		435,507		2,215,764			3,792,127
Intersegment revenues		5,351,600		255,234		429,541			6,036,375
Total segment revenues		151,412,906		25,863,357		84,013,333			261,289,596

Elimination of intersegment revenues									( 6,036,375	)
Total consolidated revenues									255,253,221

Less:
Death benefits		43,354,254		-		-
Surrenders and other policy benefits		3,453,425		-		-
Increase in future policy benefits		27,148,178		-		-
Amortization of deferred policy and pre-need acquisition costs and value of business acquired		10,708,888		623,417		-
Selling, general and administrative expenses:
Commissions		2,817,716		1,047,105		30,773,643
Personnel		21,979,252		7,346,938		32,581,075
Advertising		400,206		437,731		1,543,463
Rent and rent related		332,764		118,753		3,627,275
Depreciation on property and equipment		698,173		620,861		472,789
Cost related to funding mortgage loans		-		-		4,677,767
Data processing and IT related (1)		633,130		183,300		2,618,662
Premium taxes on insurance premiums and other considerations (1)		2,260,033		-		-
Other segment items (1)(2)		6,100,295		3,596,281		4,085,217
Intersegment expenses (3)		683,672		276,933		5,075,770
Interest expense		2,790,510		650		370,783
Costs of goods and services sold-mortuaries and cemeteries		-		3,627,101		-
Income tax expense (benefit)		6,017,032		2,025,774		( 396,735	)
Segment net earnings (loss)		22,035,378		5,958,513		( 1,416,376	)		26,577,515

Net earnings								$	26,577,515

Segment assets	$	1,329,401,728	$	94,063,898	$	99,663,509		$	1,523,129,135

Elimination of intersegment assets									( 28,304,940	)
Total consolidated assets								$	1,494,824,195

Expenditures for long-lived assets	$	46,317,358	$	300,393	$	146,993		$	46,764,744

(1)	Included in other expenses on the condensed consolidated statements of earnings. Data processing and IT related expenses includes various software subscriptions, maintenance, consulting, support and storage fees.
(2)	For each reportable segment, other segment items includes:

Life Insurance - bad debt, insurance expenses, professional service expenses, state insurance department fees, amortization of intangible assets, and certain overhead expenses.

Cemetery/Mortuary - bad debt, insurance expenses, professional service expenses, maintenance and utility expenses, property taxes, amortization of intangible assets, and certain overhead expenses.

(3)	For each reportable segment, intersegment expenses includes:

Life Insurance - mortgage servicing fees and interest expense.

Cemetery/Mortuary - rent expense, data processing and IT related expenses, and interest expense.

Mortgage - rent expense and interest expense.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

8) Fair Value of Financial Instruments

GAAP defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. GAAP also specifies a fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. Fair value measurements are classified under the following hierarchy:

Level 1: Financial assets and financial liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that the Company can access.

Level 2: Financial assets and financial liabilities whose values are based on the following:

	a)	Quoted prices for similar assets or liabilities in active markets.
	b)	Quoted prices for identical or similar assets or liabilities in non-active markets; or
	c)	Valuation models whose inputs are observable, directly or indirectly, for substantially the full term of the asset or liability.

Level 3: Financial assets and financial liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs may reflect the Company’s estimates of the assumptions that market participants would use in valuing financial assets and financial liabilities.

The Company utilizes a combination of third-party valuation service providers, brokers, and internal valuation models to determine fair value.

The following methods and assumptions were used by the Company in estimating the fair value presented in its disclosures related to significant financial instruments.

The items shown under Level 1 and Level 2 are valued as follows:

Fixed Maturity Securities Available for Sale : 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 (considered Level 3 financial assets), are estimated by discounting expected future cash flows using a current market value applicable to the coupon rate, credit and maturity of the investments.

Equity Securities : The fair values for equity securities are based on quoted market prices.

Restricted Assets : A portion of these assets include equity securities and fixed maturity securities that have quoted market prices that are used to determine fair value. Also included are cash and cash equivalents and participations in mortgage loans. The carrying amounts reported in the accompanying condensed consolidated balance sheets for these financial instruments approximate their fair values due to their short-term nature.

Cemetery Perpetual Care Trust Investments : A portion of these assets include equity securities and fixed maturity securities that have quoted market prices that are used to determine fair value. Also included are cash and cash equivalents. The carrying amounts reported in the accompanying condensed consolidated balance sheets for these financial instruments approximate their fair values due to their short-term nature.

Additionally, there were no transfers between Level 1 and Level 2 in the fair value hierarchy.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

8) Fair Value of Financial Instruments (Continued)

The items shown under Level 3 are valued as follows:

Loans Held for Sale : The Company elected the fair value option for loans held for sale. The fair value is based on quoted market prices (when available). When a quoted market price is not readily available, the Company uses the market price from its last sale of similar assets. Fair value is often difficult to determine in volatile markets and may contain significant unobservable inputs.

Loan Commitments and Forward Sale Commitments : The Company’s mortgage segment enters loan commitments with potential borrowers and forward sale commitments to sell loans with third-party investors. The Company also uses a hedging strategy for these transactions. A loan commitment binds the Company to lend funds to a qualified borrower at a specified interest rate and within a specified period, generally up to 30 days after issuance of the loan commitment. Loan commitments are defined to be derivatives under GAAP and are recognized at fair value on the consolidated balance sheets with changes in their fair values recorded in current earnings.

The Company estimates the fair value of a loan commitment based on the change in estimated fair value of the underlying mortgage loan, quoted MBS prices, estimates of the fair value of mortgage servicing rights, and an estimate of the probability that the mortgage loan will fund within the terms of the commitment. The change in fair value of the underlying mortgage loan is measured from the date the loan commitment is issued. Following issuance, the value of a mortgage loan commitment can be either positive or negative depending upon the change in value of the underlying mortgage loans. Fallout rates and other factors from the Company’s recent historical data are used to estimate the quantity and value of mortgage loans that will be funded within the terms of the commitments.

Impaired Mortgage Loans Held for Investment : The Company believes that the fair value of these nonperforming loans will approximate the unpaid principal balance expected to be recovered based on the fair value of the underlying collateral. For residential and commercial properties, the collateral value is estimated by obtaining an independent appraisal. The appraisal typically considers comparable sales in the area, property condition, and potential rental income that could be generated (particularly for commercial properties). For residential construction loans, the collateral is typically incomplete, so the fair value is estimated as the replacement cost using data from a provider of building cost information to the real estate construction.

Impaired Real Estate Held for Investment : Fair value is generally determined by obtaining an independent appraisal, which typically considers area comparable properties and property conditions. The Company believes that in an orderly market, fair value approximates the replacement cost of a home and will list for sale any foreclosed properties. In a disorderly market, the Company believes the highest and best use of the properties is as income producing assets and will hold the properties as rental properties, matching the income from the investment in rental properties with the funds required for estimated future policy benefits. Accordingly, in addition to an appraisal, the determination of fair value will generally be weighed more heavily toward the rental analysis.

It should be noted that for replacement cost, when determining the fair value of real estate held for investment, the Company uses a provider of building cost information to the real estate construction industry. For the investment analysis, the Company uses market data based upon its real estate operation experience and projected the present value of net rental income over seven years. The Company also considers comparable properties in the area and property conditions when determining fair value.

In addition to this analysis performed by the Company, the Company depreciates Real Estate Held for Investment. This depreciation reduces the book value of these properties and lessens the exposure to the Company from further deterioration in real estate values.

Mortgage Servicing Rights : The Company initially recognizes Mortgage Servicing Rights (“MSRs”) at their estimated fair values derived from the net cash flows associated with the servicing contracts, where the Company assumes the obligation to service the loan in the sale transaction.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

8) Fair Value of Financial Instruments (Continued)

The following tables summarize Level 1, 2 and 3 financial assets and financial liabilities measured at fair value on a recurring basis by their classification in the condensed consolidated balance sheet as of September 30, 2025:

	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets accounted for at fair value on a recurring basis
Fixed maturity securities available for sale	$	389,193,589		$	-	$	388,618,720	$	574,869
Equity securities		17,691,024			17,691,024		-		-
Loans held for sale		159,460,525			-		-		159,460,525
Restricted assets (1)		2,010,076			-		2,010,076		-
Restricted assets (2)		13,006,668			13,006,668		-		-
Cemetery perpetual care trust investments (1)		271,285			-		271,285		-
Cemetery perpetual care trust investments (2)		5,883,290			5,883,290		-		-
Derivatives - loan commitments (3)		2,799,643			-		-		2,799,643
Total assets accounted for at fair value on a recurring basis	$	590,316,100		$	36,580,982	$	390,900,081	$	162,835,037

Liabilities accounted for at fair value on a recurring basis
Derivatives - loan commitments (4)		( 82,385	)		-		-		( 82,385	)
Total liabilities accounted for at fair value on a recurring basis	$	( 82,385	)	$	-	$	-	$	( 82,385	)

(1)	Fixed maturity securities available for sale
(2)	Equity securities
(3)	Included in other assets on the condensed consolidated balance sheets
(4)	Included in other liabilities and accrued expenses on the condensed consolidated balance sheets

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

8) Fair Value of Financial Instruments (Continued)

	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets accounted for at fair value on a recurring basis
Fixed maturity securities available for sale	$	366,546,129		$	-	$	365,396,203	$	1,149,926
Equity securities		15,771,681			15,771,681		-		-
Loans held for sale		131,181,148			-		-		131,181,148
Restricted assets ⁽¹⁾		2,351,369			-		2,351,369		-
Restricted assets ⁽²⁾		9,972,166			9,972,166		-		-
Cemetery perpetual care trust investments ⁽¹⁾		769,662			-		769,662		-
Cemetery perpetual care trust investments ⁽²⁾		4,920,044			4,920,044		-		-
Derivatives - loan commitments ⁽³⁾		5,348,089			-		-		5,348,089
Total assets accounted for at fair value on a recurring basis	$	536,860,288		$	30,663,891	$	368,517,234	$	137,679,163

Liabilities accounted for at fair value on a recurring basis
Derivatives - loan commitments ⁽⁴⁾	$	( 3,034,879	)	$	-	$	-	$	( 3,034,879	)
Total liabilities accounted for at fair value on a recurring basis	$	( 3,034,879	)	$	-	$	-	$	( 3,034,879	)

(1)	Fixed maturity securities available for sale
(2)	Equity securities
(3)	Included in other assets on the condensed consolidated balance sheets
(4)	Included in other liabilities and accrued expenses on the condensed consolidated balance sheets

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

8) Fair Value of Financial Instruments (Continued)

For Level 3 assets and liabilities measured at fair value on a recurring basis as of September 30, 2025, the significant unobservable inputs used in the fair value measurements were as follows:

				Significant	Range of Inputs
	Fair Value at		Valuation	Unobservable	Minimum			Maximum			Weighted
	September 30, 2025		Technique	Input(s)	Value			Value			Average
Loans held for sale	$	159,460,525	Market approach	Investor contract pricing as a percentage of unpaid principal balance		87.0	%		108.0	%		102.0	%

Derivatives - loan commitments (net)		2,717,258	Market approach	Pull-through rate		68.0	%		100.0	%		93.0	%
				Initial-Value		N/A			N/A			N/A
				Servicing		0 bps			251 bps			57 bps

Fixed maturity securities available for sale		574,869	Broker quotes	Pricing quotes	$	100.00		$	101.07		$	100.54

For Level 3 assets and liabilities measured at fair value on a recurring basis as of December 31, 2024, the significant unobservable inputs used in the fair value measurements were as follows:

				Significant	Range of Inputs
	Fair Value at		Valuation	Unobservable	Minimum			Maximum			Weighted
	December 31, 2024		Technique	Input(s)	Value			Value			Average
Loans held for sale	$	131,181,148	Market approach	Investor contract pricing as a percentage of unpaid principal balance		84.0	%		109.0	%		102.0	%

Derivatives - loan commitments (net)		2,313,210	Market approach	Pull-through rate		63.0	%		100.0	%		83.0	%
				Initial-Value		N/A			N/A			N/A
				Servicing		0 bps			242 bps			47 bps

Fixed maturity securities available for sale		1,149,926	Broker quotes	Pricing quotes	$	100.00		$	101.20		$	100.16

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

8) Fair Value of Financial Instruments (Continued)

The following table is a summary of changes in the condensed consolidated balance sheet line items measured using level 3 inputs for the three-month period ended September 30, 2025:

	Net Loan Commitments			Loans Held for Sale			Fixed Maturity Securities Available for Sale
Balance - June 30, 2025	$	2,920,154		$	165,876,119		$	1,149,738
Originations and purchases		-			621,506,268			-
Sales, maturities and paydowns		-			( 642,485,858	)		( 574,074	)
		-			-			-
		-			-			-
		-			-			-
Total gains (losses):
Included in earnings		( 202,896	)(1)		14,563,996	(1)		-	(2)
Included in other comprehensive income		-			-			( 795	)

Balance - September 30, 2025	$	2,717,258		$	159,460,525		$	574,869

(1)	As a component of Mortgage fee income on the condensed consolidated statements of earnings
(2)	As a component of Net investment income on the condensed consolidated statements of earnings

The following table is a summary of changes in the condensed consolidated balance sheet line items measured using level 3 inputs for the three-month period ended September 30, 2024:

	Net Loan Commitments			Loans Held for Sale			Fixed Maturity Securities Available for Sale
Balance - June 30, 2024	$	2,574,863		$	150,196,416		$	1,237,469
Originations and purchases		-			633,213,359			-
Sales, maturities and paydowns		-			( 655,088,969	)		-
Total gains (losses):
Included in earnings		( 179,836	)(1)		14,576,935	(1)		-	(2)
Included in other comprehensive income		-			-			( 5,915	)

Balance - September 30, 2024	$	2,395,027		$	142,897,741		$	1,231,554

(1)	As a component of Mortgage fee income on the condensed consolidated statements of earnings
(2)	As a component of Net investment income on the condensed consolidated statements of earnings

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

8) Fair Value of Financial Instruments (Continued)

The following table is a summary of changes in the condensed consolidated balance sheet line items measured using level 3 inputs for the nine-month period ended September 30, 2025:

	Net Loan Commitments			Loans Held for Sale			Fixed Maturity Securities Available for Sale
Balance - December 31, 2024	$	2,313,210		$	131,181,148		$	1,149,926
Originations and purchases		-			1,756,289,354			-
Sales, maturities and paydowns		-			( 1,767,464,031	)		( 574,074	)
Transfer to mortgage loans held for investment		-			( 828,063	)		-
Loans held for sale foreclosed into real estate held for sale		-			( 380,000	)		-
Total gains (losses):
Included in earnings		404,048	(1)		40,662,117	(1)		-	(2)
Included in other comprehensive income		-			-			( 983	)

Balance - September 30, 2025	$	2,717,258		$	159,460,525		$	574,869

(1)	As a component of Mortgage fee income on the condensed consolidated statements of earnings
(2)	As a component of Net investment income on the condensed consolidated statements of earnings

The following table is a summary of changes in the condensed consolidated balance sheet line items measured using level 3 inputs for the nine-month period ended September 30, 2024:

	Net Loan Commitments			Loans Held for Sale			Fixed Maturity Securities Available for Sale
Balance - December 31, 2023	$	1,583,262		$	126,549,190		$	1,238,656
Originations and purchases		-			1,723,036,874			-
Sales, maturities and paydowns		-			( 1,742,693,113	)		-
Foreclosed into real estate held for sale		-			( 858,977	)		-
Total gains (losses):
Included in earnings		811,765	(1)		36,863,767	(1)		-	(2)
Included in other comprehensive income		-			-			( 7,102	)

Balance - September 30, 2024	$	2,395,027		$	142,897,741		$	1,231,554

(1)	As a component of Mortgage fee income on the condensed consolidated statements of earnings
(2)	As a component of Net investment income on the condensed consolidated statements of earnings

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

8) Fair Value of Financial Instruments (Continued)

The Company did not have any financial assets and financial liabilities measured at fair value on a nonrecurring basis as of September 30, 2025, or as of December 31, 2024.

Fair Value of Financial Instruments Carried at Other Than Fair Value

The Company uses its best judgment in estimating the fair value of the Company’s financial instruments; however, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented herein are not necessarily indicative of the amounts the Company could have realized in a sales transaction as of September 30, 2025, and December 31, 2024.

The carrying values and estimated fair values for such financial instruments, and their corresponding placement in the fair value hierarchy, are summarized as follows as of September 30, 2025:

	Carrying Value			Level 1		Level 2		Level 3			Total Estimated Fair Value
Assets
Mortgage loans held for investment
Residential	$	89,718,459		$	-	$	-	$	89,993,926		$	89,993,926
Residential construction		165,018,792			-		-		165,018,792			165,018,792
Commercial		74,427,440			-		-		75,580,341			75,580,341
Mortgage loans held for investment, net	$	329,164,691		$	-	$	-	$	330,593,059		$	330,593,059
Policy loans		14,372,484			-		-		14,372,484			14,372,484
Insurance assignments, net (1)		40,743,363			-		-		40,743,363			40,743,363
Restricted assets (2)		1,176,532			-		-		1,176,532			1,176,532
Cemetery perpetual care trust investments (2)		1,671,956			-		-		1,671,956			1,671,956
Mortgage servicing rights, net		2,616,372			-		-		4,035,635			4,035,635

Liabilities
Bank and other loans payable	$	( 123,096,234	)	$	-	$	-	$	( 110,888,695	)	$	( 110,888,695	)
Policyholder account balances (3)		( 35,957,897	)		-		-		( 35,998,992	)		( 35,998,992	)
Future policy benefits - annuities (3)		( 105,401,640	)		-		-		( 104,481,604	)		( 104,481,604	)

(1)	Included in other investments and policy loans on the condensed consolidated balance sheets
(2)	Mortgage loans held for investment
(3)	Included in future policy benefits and unpaid claims on the condensed consolidated balance sheets

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

8) Fair Value of Financial Instruments (Continued)

The carrying values and estimated fair values for such financial instruments, and their corresponding placement in the fair value hierarchy, are summarized as follows as of December 31, 2024:

	Carrying Value			Level 1		Level 2		Level 3			Total Estimated Fair Value
Assets
Mortgage loans held for investment
Residential	$	89,780,350		$	-	$	-	$	90,168,328		$	90,168,328
Residential construction		150,211,240			-		-		150,211,240			150,211,240
Commercial		61,755,768			-		-		60,864,775			60,864,775
Mortgage loans held for investment, net	$	301,747,358		$	-	$	-	$	301,244,343		$	301,244,343
Policy loans		14,019,248			-		-		14,019,248			14,019,248
Insurance assignments, net (1)		46,956,932			-		-		46,956,932			46,956,932
Restricted assets (2)		983,834			-		-		983,834			983,834
Cemetery perpetual care trust investments (2)		2,141,464			-		-		2,141,464			2,141,464
Mortgage servicing rights, net		2,939,878			-		-		4,552,316			4,552,316

Liabilities
Bank and other loans payable	$	( 106,740,104	)	$	-	$	-	$	( 90,455,678	)	$	( 90,455,678	)
Policyholder account balances (3)		( 37,066,043	)		-		-		( 37,626,593	)		( 37,626,593	)
Future policy benefits - annuities (3)		( 105,716,087	)		-		-		( 104,611,544	)		( 104,611,544	)

(1)	Included in other investments and policy loans on the consolidated balance sheets
(2)	Mortgage loans held for investment
(3)	Included in future policy benefits and unpaid claims on the consolidated balance sheets

The methods, assumptions and significant valuation techniques and inputs used to estimate the fair value of these financial instruments are summarized as follows:

Mortgage Loans Held for Investment : The estimated fair value of the Company’s mortgage loans held for investment is determined using various methods. The Company’s mortgage loans are grouped into three categories: Residential, Residential Construction, and Commercial. When estimating the expected future cash flows, it is assumed that all loans will be held to maturity, and any loans that are non-performing are evaluated individually for impairment.

Residential – The estimated fair value is determined through a combination of discounted cash flows (estimating expected future cash flows of payments and discounting them using current interest rates from single-family mortgages) and considering pricing of similar loans that were sold recently.

Residential Construction – These loans primarily have short term maturities. Accordingly, the estimated fair value is determined to be the carrying value.

Commercial – The estimated fair value is determined by estimating expected future cash flows of payments and discounting them using current interest rates for commercial mortgages.

Policy Loans : These loans are fully collateralized by the cash surrender value of the underlying policy. Accordingly, the carrying amounts reported in the accompanying condensed consolidated balance sheet approximates their fair values.

Insurance Assignments, Net : These investments primarily have short term maturities. Accordingly, the carrying amounts reported in the accompanying condensed consolidated balance sheet approximates their fair values.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

8) Fair Value of Financial Instruments (Continued)

Bank and Other Loans Payable : The carrying amounts reported in the accompanying condensed consolidated balance sheet for warehouse lines of credit approximate their fair values due to their relatively short-term maturities and variable interest rates. The estimated fair value for bank loans collateralized by real estate is determined by estimating future cash flows of payments and discounting them using current market rates.

Policyholder Account Balances and Future Policy Benefits-Annuities : Future policy benefit reserves for interest-sensitive insurance products are computed under a retrospective deposit method and represent policy account balances before applicable surrender charges. Policy benefits and claims that are charged to expense include benefit claims incurred in the period of more than related policy account balances. Interest crediting rates for interest-sensitive insurance products ranged from 1.5 % to 6.5 %. The fair values for these investment-type insurance contracts are estimated based on the present value of liability cash flows. The fair values for the Company’s insurance contracts other than investment-type contracts are not required to be disclosed. However, the fair values of liabilities under all insurance contracts are taken into consideration in the Company’s overall management of interest rate risk, such that the Company’s exposure to changing interest rates is minimized through the matching of investment maturities with amounts due under insurance contracts.

9) Derivative Instruments

Mortgage Banking Derivatives

Loan Commitments

The Company is exposed to price risk due to the potential impact of changes in interest rates on the values of loan commitments from the time a loan commitment is made to an applicant to the time the loan that would result from the exercise of that loan commitment is funded. Managing price risk is complicated by the fact that the ultimate percentage of loan commitments that will be exercised (i.e., the number of loans that will be funded) fluctuates. The probability that a loan will not be funded, or the loan application is denied or withdrawn within the terms of the commitment is driven by several factors, particularly the change, if any, in mortgage rates following the issuance of the loan commitment.

In general, the probability of funding increases if mortgage rates rise and decreases if mortgage rates fall. This is due primarily to the relative attractiveness of current mortgage rates compared to the applicant’s committed rate. The probability that a loan will not be funded within the terms of the mortgage loan commitment also is influenced by the source of the applications (retail, broker or correspondent channels), proximity to rate lock expiration, purpose for the loan (purchase or refinance), product type and the application approval status. The Company has developed fallout estimates using historical data that consider all the variables, as well as renegotiations of rate and point commitments that tend to occur when mortgage rates fall. These fallout estimates are used to estimate the number of loans that the Company expects to be funded within the terms of the loan commitments and are updated periodically to reflect the most current data.

The Company estimates the fair value of a loan commitment based on the change in estimated fair value of the underlying mortgage loan, quoted mortgage-backed securities (“MBS”) prices, estimates of the fair value of mortgage servicing rights, and an estimate of the probability that the mortgage loan will fund within the terms of the commitment net of estimated commission expense. The change in fair value of the underlying mortgage loan is measured from the date the loan commitment is issued and is shown net of related expenses. Following issuance, the value of a loan commitment can be either positive or negative depending upon the change in value of the underlying mortgage loans. Fallout rates and other factors from the Company’s recent historical data are used to estimate the quantity and value of mortgage loans that will be funded within the terms of the commitments.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

9) Derivative Instruments (Continued)

Forward Sale Commitments

The Company utilizes forward commitments to economically hedge the price risk associated with its outstanding mortgage loan commitments. A forward commitment protects the Company from losses on sales of the loans arising from the exercise of the loan commitments. Management expects these types of commitments will experience changes in fair value opposite to changes in fair value of the loan commitments, thereby reducing earnings volatility related to the recognition in earnings of changes in the values of the commitments.

The net changes in fair value of loan commitments and forward sale commitments are shown in current earnings as a component of mortgage fee income on the consolidated statements of earnings. Mortgage banking derivatives are shown in other assets and other liabilities and accrued expenses on the condensed consolidated balance sheets.

The following table shows the fair value and notional amounts of derivative instruments:

		September 30, 2025						December 31, 2024
	Balance Sheet Location	Notional Amount		Asset Fair Value		Liability Fair Value		Notional Amount		Asset Fair Value		Liability Fair Value
Derivatives not designated as hedging instruments:
Loan commitments	Other assets and Other liabilities	$	185,579,856	$	2,799,643	$	82,385	$	210,597,657	$	5,348,089	$	3,034,879
Total		$	185,579,856	$	2,799,643	$	82,385	$	210,597,657	$	5,348,089	$	3,034,879

The table below presents the gains (losses) on derivatives. There were no gains or losses reclassified from accumulated other comprehensive income into income or gains or losses recognized in income on derivatives ineffective portion, or any amounts excluded from effective testing.

		Net Amount loss						Net Amount Gain
		Three Months Ended September 30,						Nine Months Ended September 30,
Derivative	Classification	2025			2024			2025		2024
Loan commitments	Mortgage fee income	$	( 202,896	)	$	( 179,836	)	$	404,049	$	811,765

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

10) Reinsurance, Commitments and Contingencies

Reinsurance

The Company follows the procedure of reinsuring risks of more than a specified limit, which ranges from $ 25,000 to $ 100,000 on newly issued policies. The Company has also assumed various reinsurance agreements through acquisition of life companies. The Company is ultimately liable for these reinsured amounts in the event such reinsurers are unable to pay their portion of the claims. The Company evaluates the financial condition of reinsurers and monitors the concentration of credit risk. The Company is also a reinsurer of insurance with other companies.

Mortgage Loan Loss Settlements

Future loan losses can be extremely difficult to estimate. However, the Company believes that the Company’s reserve methodology and its current practice of property preservation allow it to estimate its potential losses on loans sold. See Note 4 to the condensed consolidated financial statements for additional information about the Company’s loan loss reserve.

Debt Covenants for Mortgage Warehouse Lines of Credit

The Company, through its subsidiary SecurityNational Mortgage, has three lines of credit for the purpose of funding mortgage loans-one through U.S. Bank, a second through Western Alliance Bank and a third through JPMorgan Chase Bank.

The U.S. Bank warehouse line of credit agreement allows SecurityNational Mortgage to borrow up to $ 15,000,000 . The relevant agreement contemplates interest at 2.10% plus the greater of (i) 0%, and (ii) the one-month forward-looking term rate based on SOFR on drawn amounts and matures on July 17, 2026 . The Company is required to comply with covenants for adjusted tangible net worth, unrestricted cash balance, and a minimum net income of $ 1 for the quarter.

The Western Alliance Bank warehouse line of credit agreement allows SecurityNational Mortgage to borrow up to $ 25,000,000 . The relevant agreement contemplates interest at the 1-Month SOFR rate plus 2.0 % on drawn amounts and matures on August 15, 2026 . The Company is required to comply with covenants for adjusted tangible net worth, unrestricted cash balance, and a minimum pre-tax income of $ 1 for the year.

The JPMorgan Chase Bank warehouse line of credit agreement allows SecurityNational Mortgage to borrow up to $ 35,000,000 . The relevant agreement contemplates interest at the 1-Month SOFR rate plus 1.95 % on drawn amounts and matures on August 15, 2026 . The Company is required to comply with covenants for adjusted tangible net worth, unrestricted cash balance, and a minimum pre-tax income of $ 1 for the year.

The agreements for US Bank and JP Morgan Chase Bank warehouse lines of credit include a cross-default provision where certain events of default under other of SecurityNational Mortgage’s obligations constitute events of default under the warehouse lines of credit. As of September 30, 2025, SecurityNational Mortgage was not in compliance with the adjusted tangible net worth covenant of Western Alliance Bank’s warehouse line of credit. SecurityNational Mortgage is in the process of receiving waivers. In the unlikely event the Company is required to repay the outstanding advances of approximately $ 7,412,571 on the warehouse lines of credit, the Company has sufficient cash to do so. The Company has also performed an analysis of its funding capacities of both internal and external sources and has determined that there are sufficient funds to continue its current business model. The Company continues to negotiate other warehouse lines of credit with other lenders.

Debt Covenants for Revolving Lines of Credit and Bank Loans

The Company’s revolving line of credit agreements contain debt covenants requiring the Company to maintain minimum operating cash flow ratios and minimum net worth requirements for each of its business segments. The Company is also subject to debt covenants under one of its real estate loans which require maintenance of a minimum consolidated operating cash flow ratio, minimum liquidity amounts, and minimum consolidated net worth value. In addition to these financial debt covenants, the Company is required to provide segment specific financial statements and building specific financial statements under the agreements for each of its bank loans. As of September 30, 2025, the Company was in compliance with all of those debt covenants.

Other Contingencies and Commitments

The Company belongs to a captive insurance group (“the captive group”) for certain casualty insurance, worker compensation and general liability programs. The captive group maintains insurance reserves relative to these programs. The level of exposure from catastrophic events is limited by the purchase of stop-loss and aggregate liability reinsurance coverage. When estimating the insurance liabilities and related reserves, the captive group considers several factors, which include historical claims experience, demographic factors, severity factors and valuations provided by independent third-party actuaries. If actual claims or adverse development of loss reserves occurs and exceed these estimates, additional reserves may be required from the Company and its subsidiaries. The estimation process contains uncertainty since captive insurance management must use judgment to estimate the ultimate cost that will be incurred to settle reported claims and unreported claims for incidents incurred but not reported as of the balance sheet date.

The Company is a defendant in various legal actions arising from the normal conduct of business. The Company believes that none of the actions, if adversely determined, will have a material effect on the Company’s financial position or results of operations. Based on management’s assessment and legal counsel’s analysis concerning the likelihood of unfavorable outcomes, no amounts have been accrued for the above claims in the consolidated financial statements. The Company is not a party to any other material legal proceedings outside the ordinary course of business or to any other legal proceedings, which, if adversely determined, would have a material adverse effect on its financial condition or results of operations.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

11) Mortgage Servicing Rights

The Company initially records its MSRs at fair value as discussed in Note 8.

After being initially recorded at fair value, MSRs backed by mortgage loans are accounted for using the amortization method. Amortization expense is included in other expenses on the condensed consolidated statements of earnings. MSR amortization is determined by amortizing the MSR balance in proportion to, and over the period of, the estimated future net servicing income of the underlying financial assets.

The Company periodically assesses MSRs for impairment. Impairment occurs when the current fair value of the MSR falls below the carrying value (carrying value is the amortized cost reduced by any related valuation allowance). If MSRs are impaired, the impairment is recognized in current-period earnings and the carrying value of the MSRs is adjusted through a valuation allowance.

The Company periodically reviews the various loan strata to determine whether the value of the MSRs in each stratum is impaired and likely to recover. If the Company deems recovery of the value to be unlikely in the foreseeable future, a write-down of the cost of the MSRs for that stratum to its estimated recoverable value is charged to the valuation allowance.

The following table presents the MSR activity:

	As of September 30, 2025			As of December 31, 2024
Amortized cost:
Balance before valuation allowance at beginning of year	$	2,939,878		$	3,461,146
MSR additions resulting from loan sales (1)		90,026			90,370
Amortization (2)		( 413,532	)		( 611,638	)
Sale of MSRs		-			-
Application of valuation allowance to write down MSRs with other than temporary impairment		-			-
Balance before valuation allowance at end of period	$	2,616,372		$	2,939,878

Valuation allowance for impairment of MSRs:
Balance at beginning of year	$	-		$	-
Additions		-			-
Application of valuation allowance to write down MSRs with other than temporary impairment		-			-
Balance at end of period	$	-		$	-

Mortgage servicing rights, net	$	2,616,372		$	2,939,878

Estimated fair value of MSRs at end of period	$	4,035,635		$	4,552,316

(1)	Included in mortgage fee income on the condensed consolidated statements of earnings
(2)	Included in other expenses on the condensed consolidated statements of earnings

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

11) Mortgage Servicing Rights (Continued)

The table below summarizes the Company’s estimate of future amortization of its existing MSRs carried at amortized cost. This projection was developed using the Company’s assumptions in its September 30, 2025, valuation of MSRs. The assumptions used in the following table are likely to change as market conditions, portfolio composition and borrower behavior change, causing both actual and projected amortization levels to change over time.

	Estimated MSR Amortization
2025		279,041
2026		253,744
2027		230,321
2028		205,263
2029		183,829
Thereafter		1,464,174
Total	$	2,616,372

The Company collected the following contractual servicing fee income and late fee income as reported in other revenues on the condensed consolidated statement of earnings.

	2025		2024		2025		2024
	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Contractual servicing fees	$	235,892	$	237,531	$	690,893	$	736,137
Late fees		16,603		17,349		48,451		56,637
Total	$	252,495	$	254,880	$	739,344	$	792,774

The following is a summary of the unpaid principal balances (“UPB”) of the servicing portfolio.

As of

September 30,
2025

As of

December 31,

2024

Servicing UPB

366,929,184

385,134,774

The following key assumptions were used in determining MSR value:

	Prepayment Speeds		Average Life (Years)		Discount Rate
September 30, 2025		11.68		7.55		11.93
December 31, 2024		8.79		8.28		12.14

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

12) Income Taxes

The Company’s overall effective tax rate for the three month periods ended September 30, 2025 and 2024 was 23.0 % and 22.2 % , respectively, which resulted in a provision for income taxes of $ 2,337,926 and $ 3,383,238 , respectively, and for the nine month periods ended September 30, 2025 and 2024 was 22.4 % and 22.3 % , respectively, which resulted in a provision for income taxes of $ 5,400,792 and $ 7,646,071 , respectively. The Company’s effective tax rate is higher than the U.S. federal statutory rate of 21 % due to, among other factors, state taxes as offset by certain state income tax benefits, along with certain permanent tax adjustments such as meals and entertainment and stock-based compensation. The increase in the effective tax rate when compared to the prior year was primarily due to certain permanent tax adjustments that, as a ratio of lower pre-tax book income, are higher than when compared to the prior year.

Interim income taxes are based on an estimated annualized effective tax rate applied to the respective quarterly periods, adjusted for discrete tax items in the period in which they occur. Although the Company believes its tax estimates are reasonable, the Company can make no assurance that the final tax outcome of these matters will not be different from that which it has reflected in its historical income tax provisions and accruals.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes provisions that allow for the immediate expensing of domestic research and development expenses, immediate expensing of certain capital expenditures, and other changes to the U.S. taxation of profits derived from foreign operations. The Company continues to evaluate the impact the new legislation will have on its estimated annual effective tax rate and cash tax position; however, the Company does not expect a material impact to its estimated effective tax rate in 2025.

13) Revenues from Contracts with Customers

The Company reports revenues from contracts with customers pursuant to ASC No. 606, Revenue from Contracts with Customers .

Information about Performance Obligations and Contract Balances

The Company’s cemetery and mortuary segment sells a variety of goods and services to customers in both at-need and pre-need situations. Due to the timing of the fulfillment of the obligation, revenue is deferred until that obligation is fulfilled.

The Company’s two types of future obligations are as follows:

Pre-need Merchandise and Service Revenue : All pre-need merchandise and service revenue are deferred, and the funds are placed in trust until the need arises; the merchandise is received, or the service is performed. The trust is then relieved, and the revenue and commissions are recognized. Pre-need contracts are required to be paid in full prior to a customer using a good or service from a pre-need contract. Goods and services from pre-need contracts can be transferred when paid in full from one owner to another. In such cases, the Company will act as an agent in transferring the requested goods and services. The transfer of goods and services does not fulfill the contract and revenue remains deferred.

At-need Specialty Merchandise Revenue : At-need specialty merchandise revenue consists of customizable merchandise ordered from manufacturers such as markers and bases. When specialty merchandise is ordered, it can take time to manufacture and deliver the product. Revenue is deferred until the at-need merchandise is received.

Complete payment does not constitute fulfillment of the contract. Goods or services are deferred until such a time the service is performed, or merchandise is received.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

13) Revenues from Contracts with Customers (Continued)

The opening and closing balances of the Company’s receivables, contract assets and contract liabilities are as follows:

	Contract Balances
	Receivables (1)			Contract Asset		Contract Liability
Opening (December 31, 2024)	$	7,095,589		$	-	$	20,168,405
Closing (September 30, 2025)		6,797,943			-		22,234,892
Increase/(decrease)		( 297,646	)		-		2,066,487

	Contract Balances
	Receivables (1)		Contract Asset		Contract Liability
Opening (December 31, 2023)	$	6,321,573	$	-	$	18,237,246
Closing (December 31, 2024)		7,095,589		-		20,168,405
Increase/(decrease)		774,016		-		1,931,159

(1)	Included in Receivables, net on the condensed consolidated balance sheets

The amount of revenue recognized and included in the opening contract liability balance for the three-month periods ended September 30, 2025, and 2024 was $ 1,326,702 and $ 1,320,688 , respectively, and for the nine-month periods ended September 30, 2025, and 2024 was $ 3,650,091 and $ 4,256,184 , respectively.

The difference between the opening and closing balances of the Company’s contract assets and contract liabilities primarily results from the timing difference between the Company’s performance and the customer’s payment.

Disaggregation of Revenue

The following table disaggregates revenue for the Company’s cemetery and mortuary contracts:

	2025		2024		2025		2024
	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Major goods/service lines
At-need	$	5,441,670	$	5,024,330	$	16,241,736	$	15,299,010
Pre-need		1,699,272		1,790,001		5,457,144		6,232,759
	$	7,140,942	$	6,814,331	$	21,698,880	$	21,531,769

Timing of Revenue Recognition
Goods transferred at a point in time	$	4,384,201	$	4,064,864	$	13,381,830	$	13,287,515
Services transferred at a point in time		2,756,741		2,749,467		8,317,050		8,244,254
	$	7,140,942	$	6,814,331	$	21,698,880	$	21,531,769

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

14) Receivables

Receivables consist of the following:

	As of September 30, 2025			As of December 31, 2024
Contracts with customers	$	6,797,943		$	7,095,589
Receivables from sales agents		4,180,222			4,028,881
Other		5,662,632			6,412,804
Total receivables		16,640,797			17,537,274
Allowance for credit losses		( 1,542,731	)		( 1,678,531	)
Net receivables	$	15,098,066		$	15,858,743

The Company records an allowance for credit losses for its receivables in accordance with GAAP.

The following table presents a roll forward of the allowance for credit losses as of the dates indicated:

	Three Months Ended
Beginning balance - June 30, 2025	$	1,491,043
Change in provision for credit losses (1)		84,603
Charge-offs		( 32,915	)
Ending balance - September 30, 2025	$	1,542,731

Beginning balance - June 30, 2024	$	1,770,911
Change in provision for credit losses (1)		( 167,300	)
Charge-offs		( 37,461	)
Ending balance - September 30, 2024	$	1,566,150

(1)	Included in other expenses on the condensed consolidated statements of earnings

	Nine Months Ended
Beginning balance - December 31, 2024	$	1,678,531
Change in provision for credit losses (1)		153,034
Charge-offs		( 288,834	)
Ending balance - September 30, 2025	$	1,542,731

Beginning balance - December 31, 2023	$	1,897,887
Change in provision for credit losses (1)		( 254,306	)
Charge-offs		( 77,431	)
Ending balance - September 30, 2024	$	1,566,150

(1)	Included in other expenses on the condensed consolidated statements of earnings

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

15) Cemetery Perpetual Care Trust Investments and Obligation and Restricted Assets

Cemetery Perpetual Care Trust Investments and Obligation

State law requires the Company to pay into endowment care trusts a portion of the proceeds from the sale of certain cemetery property interment rights for cemeteries that have established an endowment care trust. These endowment care trusts are defined as Variable Interest Entities pursuant to GAAP. The Company is the primary beneficiary of these trusts, as it absorbs both the losses and any expenses associated with the trusts. The Company has consolidated cemetery endowment care trust investments with a corresponding amount recorded as Cemetery Perpetual Care Obligation in the accompanying consolidated balance sheets .

The components of cemetery perpetual care investments and obligation as of September 30, 2025, are as follows:

	Amortized Cost			Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
September 30, 2025:
Fixed maturity securities, available for sale, at estimated fair value:
U.S. Treasury securities and obligations of U.S. Government agencies	$	150,482		$	1,806	$	-		$	152,288
Obligations of states and political subdivisions		122,043			-		( 3,046	)		118,997
Total fixed maturity securities available for sale	$	272,525		$	1,806	$	( 3,046	)	$	271,285

Equity securities at estimated fair value:
Common stock:
Industrial, miscellaneous and all other	$	4,439,406		$	1,579,249	$	( 135,365	)	$	5,883,290
Total equity securities at estimated fair value	$	4,439,406		$	1,579,249	$	( 135,365	)	$	5,883,290

Mortgage loans held for investment at amortized cost:
Residential construction	$	1,675,307
Less: Allowance for credit losses		( 3,351	)
Total mortgage loans held for investment	$	1,671,956

Other investments	$	1,168,269

Cash and cash equivalents	$	686,777

Accrued investment income	$	4,101

Total cemetery perpetual care trust investments	$	9,685,678

Cemetery perpetual care obligation	$	( 5,838,879	)

Trust investments in excess of trust obligations	$	3,846,799

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

15) Cemetery Perpetual Care Trust Investments and Obligations and Restricted Assets (Continued)

The components of cemetery perpetual care investments and obligation as of December 31, 2024, are as follows:

	Amortized Cost			Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
December 31, 2024:
Fixed maturity securities, available for sale, at estimated fair value:
U.S. Treasury securities and obligations of U.S. Government agencies	$	651,428		$	-	$	( 2,010	)	$	649,418
Obligations of states and political subdivisions		125,194			-		( 4,950	)		120,244
Total fixed maturity securities available for sale	$	776,622		$	-	$	( 6,960	)	$	769,662

Equity securities at estimated fair value:
Common stock:
Industrial, miscellaneous and all other	$	3,874,522		$	1,271,529	$	( 226,007	)	$	4,920,044
Total equity securities at estimated fair value	$	3,874,522		$	1,271,529	$	( 226,007	)	$	4,920,044

Mortgage loans held for investment at amortized cost:
Residential construction	$	202,600
Less: Allowance for credit losses		( 405	)
Commercial		1,939,269
Less: Allowance for credit losses		-
Total mortgage loans held for investment	$	2,141,464

Cash and cash equivalents	$	1,002,396

Accrued investment income	$	2,937

Total cemetery perpetual care trust investments	$	8,836,503

Cemetery perpetual care obligation	$	( 5,642,693	)

Trust investments in excess of trust obligations	$	3,193,810

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

15) Cemetery Perpetual Care Trust Investments and Obligations and Restricted Assets (Continued)

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
September 30, 2025
Obligations of states and political subdivisions	$	-	$	-	$	3,046	$	118,998	$	3,046	$	118,998
Totals	$	-	$	-	$	3,046	$	118,998	$	3,046	$	118,998

December 31, 2024
U.S. Treasury securities and obligations of U.S. Government agencies	$	2,010	$	649,419	$	-	$	-	$	2,010	$	649,419
Obligations of states and political subdivisions		4,950		120,243		-		-		4,950		120,243
Totals	$	6,960	$	769,662	$	-	$	-	$	6,960	$	769,662

Relevant holdings were comprised of two securities with fair values aggregating 97.5 % of the aggregate amortized cost as of September 30, 2025. Relevant holdings were comprised of four securities with fair values aggregating 99.1 % of aggregate amortized cost as of December 31, 2024. No credit losses have been recognized for the three- and nine-month periods ended September 30, 2025, and 2024, since the unrealized losses are primarily the result of increases in interest rates. See Note 3 for additional information regarding the Company’s evaluation of the allowance for credit losses for fixed maturity securities available for sale.

The table below presents the amortized cost and estimated fair value of fixed maturity securities available for sale as of September 30, 2025, by contractual maturity. 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		Estimated Fair
	Cost		Value
Due in 1 year	$	-	$	-
Due in 2-5 years		220,652		220,389
Due in 5-10 years		51,873		50,896
Due in more than 10 years		-		-
Total	$	272,525	$	271,285

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

15) Cemetery Perpetual Care Trust Investments and Obligations and Restricted Assets (Continued)

Restricted Assets

The Company has also established certain restricted assets to provide for future merchandise and service obligations incurred in connection with its pre-need sales for its cemetery and mortuary segment.

Additionally, restricted cash represents escrows held for borrowers and investors under servicing and appraisal agreements relating to mortgage loans, funds held by warehouse banks in accordance with loan purchase agreements and funds held in escrow for certain real estate construction development projects. Additionally, the Company elected to maintain its medical benefit fund without change from the prior year and has included this amount as a component of restricted cash. These restricted cash items are for the Company’s life insurance and mortgage segments.

Restricted assets as of September 30, 2025, are summarized as follows:

	Amortized Cost			Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
September 30, 2025:
Fixed maturity securities, available for sale, at estimated fair value:
U.S. Treasury securities and obligations of U.S. Government agencies	$	1,625,998		$	4,147	$	-		$	1,630,145
Obligations of states and political subdivisions		330,955			120		( 2,158	)		328,917
Corporate securities including public utilities		52,030			-		( 1,016	)		51,014
Total fixed maturity securities available for sale	$	2,008,983		$	4,267	$	( 3,174	)	$	2,010,076

Equity securities at estimated fair value:
Common stock:
Industrial, miscellaneous and all other	$	10,790,554		$	2,553,913	$	( 337,799	)	$	13,006,668
Total equity securities at estimated fair value	$	10,790,554		$	2,553,913	$	( 337,799	)	$	13,006,668

Mortgage loans held for investment at amortized cost:
Residential construction	$	1,178,890
Less: Allowance for credit losses		( 2,358	)
Total mortgage loans held for investment	$	1,176,532

Other investments	$	1,912,436

Cash and cash equivalents (1)	$	13,556,435

Accrued investment income	$	10,892

Total restricted assets	$	31,673,039

(1)	Including cash and cash equivalents of $ 12,375,579 for the life insurance and mortgage segments.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

15) Cemetery Perpetual Care Trust Investments and Obligations and Restricted Assets (Continued)

Restricted assets as of December 31, 2024, are summarized as follows:

	Amortized Cost			Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
December 31, 2024:
Fixed maturity securities, available for sale, at estimated fair value:
U.S. Treasury securities and obligations of U.S. Government agencies	$	1,741,029		$	2,256	$	( 1,511	)	$	1,741,774
Obligations of states and political subdivisions		471,217			180		( 4,223	)		467,174
Corporate securities including public utilities		144,616			32		( 2,227	)		142,421
Total fixed maturity securities available for sale	$	2,356,862		$	2,468	$	( 7,961	)	$	2,351,369

Equity securities at estimated fair value:
Common stock:
Industrial, miscellaneous and all other	$	8,547,709		$	1,914,309	$	( 489,852	)	$	9,972,166
Total equity securities at estimated fair value	$	8,547,709		$	1,914,309	$	( 489,852	)	$	9,972,166

Mortgage loans held for investment at amortized cost:
Residential construction	$	985,806
Less: Allowance for credit losses		( 1,972	)
Total mortgage loans held for investment	$	983,834

Other investments	$	1,939,269

Cash and cash equivalents (1)	$	8,553,803

Accrued investment income	$	6,395

Total restricted assets	$	23,806,836

(1)	Including cash and cash equivalents of $ 7,657,958 for the life insurance and mortgage segments.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

15) Cemetery Perpetual Care Trust Investments and Obligations and Restricted Assets (Continued)

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 September 30, 2025
Obligations of states and political subdivisions	$	994	$	100,305	$	1,164	$	103,492	$	2,158	$	203,797
Corporate securities including public utilities		-		-		1,016		51,014		1,016		51,014
Total unrealized losses	$	994	$	100,305	$	2,180	$	154,506	$	3,174	$	254,811

At December 31, 2024
U.S. Treasury securities and obligations of U.S. Government agencies	$	1,511	$	558,707	$	-	$	-	$	1,511	$	558,707
Obligations of states and political subdivisions		2,004		237,636		2,219		129,358		4,223		366,994
Corporate securities including public utilities		1,316		51,685		911		65,704		2,227		117,389
Total unrealized losses	$	4,831	$	848,028	$	3,130	$	195,062	$	7,961	$	1,043,090

Relevant holdings were comprised of four securities with fair values aggregating 98.8 % of the aggregate amortized cost as of September 30, 2025. Relevant holdings were comprised of 15 securities with fair values aggregating 99.2 % of the aggregate amortized cost as of December 31, 2024. No credit losses have been recognized for the three- and nine-month periods ended September 30, 2025, and 2024, since the unrealized losses are primarily the result of increases in interest rates. See Note 3 for additional information regarding the Company’s evaluation of the allowance for credit losses for fixed maturity securities available for sale.

	Amortized		Estimated Fair
	Cost		Value
Due in 1 year	$	810,104	$	810,295
Due in 2-5 years		941,887		945,094
Due in 5-10 years		100,307		100,181
Due in more than 10 years		156,685		154,506
Total	$	2,008,983	$	2,010,076

See Notes 3 and 8 for additional information regarding restricted assets and cemetery perpetual care trust investments.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

16) Accumulated Other Comprehensive Income (loss)

The following table summarizes the changes in accumulated other comprehensive income (loss):

	2025			2024			2025			2024
	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024

Unrealized gains on fixed maturity securities available for sale	$	3,546,952		$	10,595,637		$	9,978,130		$	8,809,823
Amounts reclassified into net earnings		( 193,672	)		( 152,147	)		( 142,876	)		( 148,472	)
Net unrealized gains before taxes		3,353,280			10,443,490			9,835,254			8,661,351
Tax (expense)		( 704,684	)		( 2,198,474	)		( 2,066,384	)		( 1,824,502	)
Net		2,648,596			8,245,016			7,768,870			6,836,849
Unrealized gains on restricted assets (1)		7,118			9,353			6,586			5,770
Tax (expense)		( 1,773	)		( 2,330	)		( 1,641	)		( 1,437	)
Net		5,345			7,023			4,945			4,333
Unrealized gains on cemetery perpetual care trust investments (1)		4,056			4,263			5,720			2,438
Unrealized gains		4,056			4,263			5,720			2,438
Tax (expense)		( 1,010	)		( 1,062	)		( 1,425	)		( 607	)
Net		3,046			3,201			4,295			1,831
Other comprehensive income changes	$	2,656,987		$	8,255,240		$	7,778,110		$	6,843,013

(1)	Fixed maturity securities available for sale

The following table presents the accumulated balances of other comprehensive income (loss) as of September 30, 2025:

	Beginning Balance December 31, 2024			Change for the period		Ending Balance September 30, 2025
Unrealized gains (losses) on fixed maturity securities available for sale	$	( 6,941,915	)	$	7,768,870	$	826,955
Unrealized gains (losses) on restricted assets (1)		( 4,126	)		4,945		819
Unrealized gains (losses) on cemetery perpetual care trust investments (1)		( 5,225	)		4,295		( 930	)
Other comprehensive income (loss)	$	( 6,951,266	)	$	7,778,110	$	826,844

(1)	Fixed maturity securities available for sale

The following table presents the accumulated balances of other comprehensive income (loss) as of December 31, 2024:

	Beginning Balance December 31, 2023			Change for the period			Ending Balance December 31, 2024
Unrealized losses on fixed maturity securities available for sale	$	( 6,876,629	)	$	( 65,286	)	$	( 6,941,915	)
Unrealized gains (losses) on restricted assets (1)		( 4,757	)		631			( 4,126	)
Unrealized losses on cemetery perpetual care trust investments (1)		( 4,172	)		( 1,053	)		( 5,225	)
Other comprehensive loss	$	( 6,885,558	)	$	( 65,708	)	$	( 6,951,266	)

(1)	Fixed maturity securities available for sale

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Overview

The Company’s operations over the last several years generally reflect three strategies which the Company expects to continue: (i) increased attention to “niche” insurance products, such as the Company’s funeral plan policies and traditional whole life products; (ii) increased emphasis on the cemetery and mortuary business; and (iii) capitalizing on an improving housing market by originating mortgage loans.

Insurance Operations

The Company’s life insurance business includes funeral plans and interest-sensitive life insurance, as well as other traditional life, accident and health insurance products. The Company places specific marketing emphasis on funeral plans through pre-need planning.

A funeral plan is a small face value life insurance policy that generally has face coverage of up to $30,000. The Company believes that funeral plans represent a marketing niche that is less competitive because most insurance companies do not offer similar coverage. The purpose of the funeral plan policy is to pay the costs and expenses incurred at the time of a person’s death. On a per thousand-dollar cost of insurance basis, these policies can be more expensive to the policyholder than many types of non-burial insurance due to their low face amount, requiring the fixed cost of the policy administration to be distributed over a smaller policy size, and the simplified underwriting practices that result in higher mortality costs.

The following table shows the condensed financial results of the insurance operations for the three- and nine-month periods ended September 30, 2025, and 2024. See Note 7 to the condensed consolidated financial statements.

	Three months ended September 30, (in thousands of dollars)							Nine months ended September 30, (in thousands of dollars)
	2025		2024		% Increase (Decrease)			2025		2024		% Increase (Decrease)
Revenues from external customers:
Insurance premiums	$	29,881	$	30,011		0	%	$	89,846	$	89,824		0	%
Net investment income		19,279		17,106		13	%		57,910		52,902		9	%
Gains on investments and other assets		1,259		1,317		(4	%)		2,423		2,195		10	%
Other revenues		372		420		(11	%)		1,423		1,141		25	%
Intersegment revenues		2,044		2,066		(1	%)		5,193		5,352		(3	%)
Total segment revenues	$	52,835	$	50,920		4	%	$	156,795	$	151,414		4	%
Segment net earnings	$	5,508	$	9,706		(43	%)	$	16,057	$	22,035		(27	%)

Profitability for the nine month period ended September 30, 2025 decreased due to (a) a $5,991,000 increase in selling, general and administrative expenses, primarily attributable to a $3,623,000 increase in personnel expenses due to an annual increase in salaries and key new hires as a part of the Company’s growth strategy, (b) a $4,728,000 increase in amortization of deferred policy acquisition costs, (c) a $2,896,000 increase in death benefits, (d) a $354,000 increase in surrenders and other policy benefits (e) a $159,000 decrease in intersegment revenue, and (f) a $22,000 increase in interest expense, which were partially offset by (i) a $5,008,000 increase in net investment income, (ii) a $1,490,000 decrease in income tax expense, (iii) a $983,000 decrease in future policy benefits, (iv) a $282,000 increase in other revenues, (v) a $228,000 increase in gains on investments and other assets, (vi) a $157,000 decrease in intersegment expenses, and (vii) a $22,000 increase in insurance premiums and other considerations.

Cemetery and Mortuary Operations

The Company sells mortuary services and products through its eleven mortuaries in Utah and four mortuaries in New Mexico. The Company also sells cemetery services, products and land (burial plots) through its five cemeteries in Utah, one cemetery in San Diego County, California, and one cemetery in Santa Fe, New Mexico. At-need mortuary and cemetery product sales and services are recognized as revenue when the services are performed or when the products are delivered. Pre-need mortuary and cemetery product sales and services are deferred until the merchandise is delivered, or services are performed. Revenue for pre-need cemetery land sales is recognized at the time of sale, and land is removed from inventory.

The following table shows the condensed financial results of the cemetery and mortuary operations for the three- and nine-month periods ended September 30, 2025, and 2024. See Note 7 to the condensed consolidated financial statements.

	Three months ended September 30, (in thousands of dollars)							Nine months ended September 30, (in thousands of dollars)
	2025		2024		% Increase (Decrease)			2025		2024		% Increase (Decrease)
Revenues from external customers:
Cemetery revenues	$	3,624	$	3,598		1	%	$	11,428	$	11,776		(3	%)
Mortuary revenues		3,517		3,216		9	%		10,271		9,755		5	%
Net investment income		642		478		34	%		1,529		2,137		(28	%)
Gains on investments and other assets		712		1,125		(37	%)		1,193		1,504		(21	%)
Other revenues		433		126		244	%		767		436		76	%
Interesegment revenues		86		86		0	%		254		255		0	%
Total segment revenues	$	9,014	$	8,629		4	%	$	25,442	$	25,863		(2	%)
Segment net earnings	$	2,287	$	2,123		8	%	$	5,355	$	5,959		(10	%)

Profitability in the nine month period ended September 30, 2025 decreased due to (a) a $701,000 increase in selling, general and administrative expenses, primarily attributable to a $555,000 increase in personnel expenses, (b) a $608,000 decrease in net investment income, (c) a $311,000 decrease in gains on investments and other assets, (d) a $240,000 decrease in cemetery pre-need sales, (e) a $108,000 decrease in cemetery at-need sales, and (f) a $1,000 decrease in intersegment revenues, which were partially offset by (i) a $516,000 increase in mortuary at-need sales, (ii) a $331,000 increase in other revenues, (iii) a $303,000 decrease in income tax expense, (iv) a $101,000 decrease in cost of goods and services sold, (v) a $92,000 decrease in amortization of deferred policy acquisition costs, and (vi) a $22,000 decrease in intersegment expenses.

Mortgage Operations

The Company’s wholly owned subsidiary, SecurityNational Mortgage Company (“SecurityNational Mortgage), is a mortgage lender incorporated under the laws of the State of Utah and approved and regulated by the Federal Housing Administration (FHA), a department of the U.S. Department of Housing and Urban Development (HUD), which originates mortgage loans that qualify for government insurance in the event of default by the borrower, in addition to various conventional mortgage loan products. SecurityNational Mortgage originates and refinances mortgage loans on a retail basis. Mortgage loans originated or refinanced by the SecurityNational Mortgage are funded through loan purchase agreements with Security National Life, Kilpatrick Life and unaffiliated financial institutions.

SecurityNational Mortgage receives fees from borrowers that are involved in mortgage loan originations and refinancings, and secondary fees earned from third party investors that purchase the mortgage loans. Mortgage loans are generally sold with mortgage servicing rights (“MSRs”) released to third-party investors or retained by SecurityNational Mortgage. SecurityNational Mortgage currently retains the mortgage servicing rights on approximately 0.43% of its loan origination volume. These mortgage loans are serviced by either SecurityNational Mortgage or an approved third-party sub-servicer.

Mortgage rates have followed the US Treasury yields in response to inflation and slowing new home sales. As expected, the lack of mortgage rate reductions has resulted in a decrease in loan originations classified as ‘refinance.’ Higher than anticipated mortgage rates have also had a negative effect on loan originations classified as ‘purchases’ although not as significant as those in the refinance classification.

For the nine-month periods ended September 30, 2025, and 2024, SecurityNational Mortgage originated 5,216 loans ($1,756,289,000 total volume) and 5,505 loans ($1,723,036,000 total volume), respectively.

The following table shows the condensed financial results of the mortgage operations for the three- and nine-month periods ended September 30, 2025, and 2024. See Note 7 to the condensed consolidated financial statements.

	Three months ended September 30, (in thousands of dollars)									Nine months ended September 30, (in thousands of dollars)
	2025			2024			% Increase (Decrease)			2025			2024			% Increase (Decrease)
Revenues from external customers
Secondary gains from investors	$	20,378		$	17,982			13	%	$	57,518		$	51,388			12	%
Income from loan originations		8,953			9,462			(5	%)		24,551			25,619			(4	%)
Change in fair value of loans held for sale		(203	)		2,960			(107	%)		404			3,856			(90	%)
Change in fair value of loan commitments		11			(180	)		(106	%)		960			812			18	%
Net investment income		189			216			(13	%)		455			751			(39	%)
Gains (losses) on investments and other assets		1			(1,094	)		100	%		85			(1,059	)		108	%
Other revenues		279			1,532			(82	%)		844			2,216			(62	%)
Intersegment revenues		76			138			(45	%)		272			430			(37	%)
Total segment revenues	$	29,684		$	31,016			(4	%)	$	85,089		$	84,013			1	%
Segment net earnings (loss)	$	20		$	2			900	%	$	(2,752	)	$	(1,416	)		94	%

Losses for the nine month period ended September 30, 2025 increased due to (a) a $3,452,000 decrease in the fair value of loans held for sale, (b) a $2,075,000 increase in commissions, (c) a $1,371,000 decrease in other revenues, (d) a $1,197,000 increase in other expenses, (e) a $1,068,000 decrease in income from loan originations, (f) a $443,000 increase in costs related to funding mortgage loans, (g) a $337,000 increase in advertising expenses, (h) a $296,000 increase in interest expense, (i) a $296,000 decrease in net investment income, and (j) a $157,000 decrease in intersegment revenues, which were partially offset by (i) a $6,130,000 increase in secondary gains from investors, (ii) a $1,144,000 increase in gains on investments and other assets, (iii) a $1,132,000 decrease in rent and rent related expenses, (iv) a $452,000 increase in income tax benefit, (v) a $213,000 decrease in personnel expenses, (vi) a $148,000 increase in the fair value of loan commitments, and (vii) a $138,000 decrease in intersegment expenses.

Consolidated Results of Operations

Three-month period ended September 30, 2025, Compared to Three-month period ended September 30, 2024

Total revenues increased by $1,052,000, or 1.2%, to $89,326,000 for the three-month period ended September 30, 2025, from $88,274,000 for the comparable period in 2024. Contributing to this increase in total revenues was a $2,310,000 increase in net investment income, a $624,000 increase in gains on investments and other assets, and a $327,000 increase in net mortuary and cemetery sales, which were partially offset by a $1,085,000 decrease in mortgage fee income, a $994,000 decrease in other revenues, and a $130,000 decrease in insurance premiums and other considerations.

Mortgage fee income decreased by $1,085,000, or 3.6%, to $29,139,000, for the three-month period ended September 30, 2025, from $30,224,000 for the comparable period in 2024. This decrease was primarily due to a $3,163,000 decrease in the fair value of loans held for sale and a $509,000 decrease in income from loan originations, which were partially offset by a $2,396,000 increase in secondary gains from mortgage loans sold to third-party investors into the secondary market and a $191,000 increase in the fair value of loan commitments.

Insurance premiums and other considerations decreased by $130,000, or 0.4%, to $29,881,000 for the three-month period ended September 30, 2025, from $30,011,000 for the comparable period in 2024. This decrease was primarily due to an increase of $557,000 in renewal premiums, which was partially offset by a decrease of $687,000 in first year premiums.

Net investment income increased by $2,310,000, or 13.0%, to $20,109,000 for the three-month period ended September 30, 2025, from $17,799,000 for the comparable period in 2024. This increase was primarily attributable to a $3,117,000 increase in mortgage loan interest, a $517,000 increase in fixed maturity securities income, a $39,000 increase in equity securities income, and a $32,000 increase in policy loan interest, which were partially offset by a $953,000 decrease in interest on cash and cash equivalents, a $208,000 decrease in real estate income, a $137,000 increase in investment expenses, a $61,000 decrease in insurance assignment income, and a $36,000 decrease in other investment income.

Net mortuary and cemetery sales increased by $327,000, or 4.8%, to $7,141,000 for the three-month period ended September 30, 2025, from $6,814,000 for the comparable period in 2024. This increase was primarily due to a $301,000 increase in mortuary at-need sales, a $23,000 increase in cemetery at-need sales, and a $3,000 increase in cemetery pre-need sales.

Gains (losses) on investments and other assets increased by $624,000 to $1,972,000 in net gains for the three-month period ended September 30, 2025, from $1,348,000 in net gains for the comparable period in 2024. This increase in gains on investments and other assets was primarily due to a $1,161,000 increase in gains on mortgage loans held for investment and a $561,000 increase in gains on real estate, which were partially offset by a $929,000 decrease in gains on equity securities primarily attributable to decreases in the fair value of these equity securities, a $158,000 decrease in gains on other assets, and a $11,000 decrease in gains on fixed maturity securities.

Other revenues decreased by $994,000, or 47.8%, to $1,083,000 for the three-month period ended September 30, 2025, from $2,077,000 for the comparable period in 2024. This decrease was primarily due to a decrease of $994,000 in other miscellaneous revenues.

Death benefits, surrenders and other policy benefits, and future policy benefits increased by an aggregate of $1,580,000 or 6.8%, to $24,934,000 for the three-month period ended September 30, 2025, from $23,354,000 for the comparable period in 2024. This increase was primarily the result of a $1,612,000 increase in death benefits and a $180,000 increase in surrender and other policy benefits, which were partially offset by a $212,000 decrease in future policy benefits.

Amortization of deferred policy and pre-need acquisition costs and value of business acquired increased by $3,246,000, or 142.0%, to $5,533,000 for the three-month period ended September 30, 2025, from $2,287,000 for the comparable period in 2024. This increase was primarily due to an increase in the termination rate for deaths, lapses, policies moving to a reduced paid up status, and a shift in product mix.

Selling, general and administrative expenses increased by $1,286,000, or 2.8%, to $46,525,000 for the three-month period ended September 30, 2025, from $45,239,000 for the comparable period in 2024. This increase was primarily the result of a $1,409,000 increase in other expenses, a $269,000 increase in personnel expenses, a $119,000 increase in costs related to funding mortgage loans, and a $76,000 increase in advertising expense, which were partially offset by a $432,000 decrease in rent and rent related expenses, a $150,000 decrease in commissions, and a $5,000 decrease in depreciation on property and equipment.

Interest expense increased by $6,000, or 0.6%, to $1,067,000 for the three-month period ended September 30, 2025, from $1,061,000 for the comparable period in 2024. This increase was primarily due to an increase of $26,000 in interest expense on mortgage warehouse lines of credit for loans held for sale, which was partially offset by a decrease of $20,000 in interest expense on bank loans.

Cost of goods and services sold in mortuaries and cemeteries decreased by $4,000, or 0.4%, to $1,113,000 for the three-month period ended September 30, 2025, from $1,117,000 for the comparable period in 2024. This decrease was primarily due to a decrease of $20,000 in pre-need sales, which was partially offset by an increase of $16,000 in at-need sales.

In summary, total benefits and expenses were $79,173,000, or 88.6% of total revenues, for the three-month period ended September 30, 2025, as compared to $73,059,000, or 82.8% of total revenues, for the comparable period in 2024.

Nine-month period ended September 30, 2025, Compared to Nine-month period ended September 30, 2024

Total revenues increased by $6,354,000, or 2.5%, to $261,607,000 for the nine-month period ended September 30, 2025, from $255,253,000 for the comparable period in 2024. Contributing to this increase in total revenues was a $4,103,000 increase in net investment income, a $1,758,000 increase in mortgage fee income, a $1,061,000 increase in gains on investments and other assets, a $167,000 increase in net mortuary and cemetery sales, and a $22,000 increase in insurance premiums and other considerations, which were partially offset by a $758,000 decrease in other revenues.

Mortgage fee income increased by $1,758,000, or 2.2%, to $83,433,000, for the nine-month period ended September 30, 2025, from $81,675,000 for the comparable period in 2024. This increase was primarily due to a $6,130,000 increase in secondary gains from mortgage loans sold to third-party investors into the secondary market and a $148,000 increase in the fair value of loan commitments, which were partially offset by a $3,452,000 decrease in the fair value of loans held for sale, and a $1,068,000 decrease in income from loan originations.

Insurance premiums and other considerations increased by $22,000, less than a percentage point, to $89,846,000 for the nine-month period ended September 30, 2025, from $89,824,000 for the comparable period in 2024. This increase was primarily due to an increase of $1,432,000 in renewal premiums, which was partially offset by a decrease of $1,410,000 in first year premiums.

Net investment income increased by $4,103,000, or 7.4%, to $59,893,000 for the nine-month period ended September 30, 2025, from $55,790,000 for the comparable period in 2024. This increase was primarily attributable to a $7,704,000 increase in mortgage loan interest, a $1,183,000 increase in fixed maturity securities income, a $847,000 increase in insurance assignment income, a $134,000 increase in equity securities income, and a $21,000 increase in policy loan interest which were partially offset by a $2,415,000 increase in investment expenses, a $2,004,000 decrease in interest on cash and cash equivalents, a $1,175,000 decrease in real estate income, and a $192,000 decrease in other investment income.

Net mortuary and cemetery sales increased by $167,000, or 0.8%, to $21,699,000 for the nine-month period ended September 30, 2025, from $21,532,000 for the comparable period in 2024. This increase was primarily due to a $516,000 increase in mortuary at-need sales, which were partially offset by a $240,000 decrease in cemetery pre-need sales and a $109,000 decrease in cemetery at-need sales.

Gains (losses) on investments and other assets increased by $1,061,000, or 40.2% to $3,701,000 for the nine-month period ended September 30, 2025, from $2,640,000 for the comparable period in 2024. This increase in gains on investments and other assets was primarily due to a $1,161,000 increase in gains on mortgage loans held for investment, a $869,000 increase in gains on real estate, and a $6,000 increase in gains on fixed maturity securities, which were partially offset by a $833,000 decrease in gains on equity securities primarily attributable to decreases in the fair value of these equity securities and a $142,000 decrease in gains on other assets.

Other revenues decreased by $758,000, or 20.00%, to $3,034,000 for the nine-month period ended September 30, 2025, from $3,792,000 for the comparable period in 2024. This decrease was primarily due to a decrease of $713,000 in other miscellaneous revenues and a decrease of $45,000 in servicing fee revenue due to a decrease in the retention of mortgage servicing rights.

Death benefits, surrenders and other policy benefits, and future policy benefits increased by an aggregate of $2,267,000 or 3.1%, to $76,223,000 for the nine-month period ended September 30, 2025, from $73,956,000 for the comparable period in 2024. This increase was primarily the result of a $2,896,000 increase in death benefits and a $354,000 increase in surrender and other policy benefits, which were partially offset by $983,000 decrease in future policy benefits.

Amortization of deferred policy and pre-need acquisition costs and value of business acquired increased by $4,635,000, or 40.9%, to $15,968,000 for the nine-month period ended September 30, 2025, from $11,332,000 for the comparable period in 2024. This increase was primarily due to an increase in the termination rate for deaths, lapses, policies moving to a reduced paid up status, and a shift in product mix.

Selling, general and administrative expenses increased by $9,399,000, or 7.3%, to $138,351,000 for the nine-month period ended September 30, 2025, from $128,952,000 for the comparable period in 2024. This increase was primarily the result of a $3,966,000 increase in personnel expenses due to an annual increase in salaries and key new hires as a part of the Company’s growth strategy, a $3,480,000 increase in other expenses, a $2,319,000 increase in commissions, a $443,000 increase in costs related to funding mortgage loans, a $366,000 increase in advertising expense, and a $30,000 increase in depreciation on property and equipment, which were partially offset by a $1,205,000 decrease in rent and rent related expenses.

Interest expense increased by $317,000, or 10.0%, to $3,479,000 for the nine-month period ended September 30, 2025, from $3,162,000 for the comparable period in 2024. This increase was primarily due to an increase of $296,000 in interest expense on mortgage warehouse lines of credit for loans held for sale and an increase of $21,000 in interest expense on bank loans.

Cost of goods and services sold in mortuaries and cemeteries decreased by $101,000, or 2.8%, to $3,526,000 for the nine-month period ended September 30, 2025, from $3,627,000 for the comparable period in 2024. This decrease was primarily due to a decrease of $87,000 in at-need sales and a decrease of $14,000 in pre-need sales.

In summary, total benefits and expenses were $237,547,000, or 90.8% of total revenues, for the nine-month period ended September 30, 2025, as compared to $221,030,000, or 86.6% of total revenues, for the comparable period in 2024.

Liquidity and Capital Resources

The Company’s life insurance subsidiaries and cemetery and mortuary subsidiaries realize cash flow from premiums, contract payments and sales on personal services rendered for cemetery and mortuary business, from interest and dividends on invested assets, and from the proceeds from the sale or maturity of investments. The mortgage subsidiaries realize cash flow from fees generated by originating and refinancing mortgage loans and fees from mortgage loans held for sale that are sold to investors into the secondary market. It should be noted that current conditions in the financial markets and economy may affect the realization of these expected cash flows. The Company considers these sources of cash flow to be adequate to fund future policyholder and cemetery and mortuary liabilities, which generally are long-term, and adequate to pay current policyholder claims, annuity payments, expenses related to the issuance of new policies, the maintenance of existing policies, debt service, and to meet current operating expenses.

As of September 30, 2025, SecurityNational Mortgage was not in compliance with the adjusted tangible net worth covenant of Western Alliance Bank’s warehouse line of credit. SecurityNational Mortgage is in the process of receiving waivers. In the unlikely event the Company is required to repay the outstanding advances of approximately $7,412,571 on the warehouse lines of credit, the Company has sufficient cash to do so. The Company has also performed an analysis of its funding capacities of both internal and external sources and has determined that there are sufficient funds to continue its current business model. The Company continues to negotiate other warehouse lines of credit with other lenders.

During the nine-month periods ended September 30, 2025, and 2024, the Company’s operations provided cash of approximately $27,553,000 and of approximately $34,894,000, respectively. The decrease in cash provided by operations was due primarily to the decrease in net earnings.

The Company expects to pay out liabilities under its funeral plans over the long term given the nature of those plans. Funeral plans are small face value life insurance policies that payout upon a person’s death to cover funeral burial costs; policyholders generally keep these policies in force until, and do not surrender prior to, death. Because of the long-term nature of these liabilities, the Company can hold to maturity or for the targeted investment period its corresponding bond, real estate, and mortgage loan investments, thus reducing the risk of liquidating these long-term investments because of any sudden changes in their fair values.

The Company attempts to match the duration of invested assets with its policyholder and cemetery and mortuary liabilities. The Company may sell investments other than those held to maturity in the portfolio to help in this timing matching. The Company purchases short-term investments on a temporary basis to meet the expected short-term requirements of the Company’s insurance products. The Company’s investment philosophy is intended to provide a rate of return for the expected duration of its cemetery and mortuary policies that will exceed the accruing of liabilities under those policies regardless of future interest rate movements.

The Company’s investment policy is also to invest predominantly in fixed maturity securities, real estate, mortgage loans, and warehousing of mortgage loans. The warehoused mortgage loans are typically held for sale on a short-term basis before selling the loans to investors in accordance with the requirements and laws governing the Company’s life insurance subsidiaries. Bonds owned by the insurance subsidiaries amounted to $370,953,000 (at estimated fair value) and $348,774,000 (at estimated fair value) as of September 30, 2025, and December 31, 2024, respectively. This represented 35.4% and 38.0% of the total investments of the Company as of September 30, 2025, and December 31, 2024, respectively. Generally, all bonds owned by the life insurance subsidiaries are rated by the National Association of Insurance Commissioners. Under this rating system, there are six categories used for the rating of bonds. As of September 30, 2025, 1.6% (or $5,882,000) and as of December 31, 2024, 2.4% (or $8,431,000) of the Company’s total bond investments were invested in bonds in rating categories three through six, which are considered non-investment grade.

The Company’s life insurance subsidiaries are subject to risk-based capital guidelines established by statutory regulators requiring minimum capital levels based on the perceived risk of assets, liabilities, disintermediation, and business risk. As of September 30, 2025, and December 31, 2024, the life insurance subsidiaries were in compliance with the regulatory criteria.

The Company’s total capitalization of stockholders’ equity, bank and other loans payable was $488,478,000 as of September 30, 2025, as compared to $445,522,000 as of December 31, 2024. This increase was primarily due to an increase of $26,600,000 in stockholders’ equity and an increase of $16,356,000 in bank loans and other loans payable. Stockholders’ equity as a percent of total capitalization was 74.8% and 76.1% as of September 30, 2025, and December 31, 2024, respectively.

Lapse rates measure the amount of insurance terminated during a particular period. The Company’s lapse rate for life insurance in 2024 was 7.0% as compared to a lapse rate of 4.4% for 2023. The 2025 lapse rate to date has been approximately the same as 2024.

The combined statutory capital and surplus of the Company’s life insurance subsidiaries was approximately $133,949,000 and $120,216,000 as of September 30, 2025, and December 31, 2024, respectively. The life insurance subsidiaries cannot pay a dividend to their parent company without the approval of state insurance regulatory authorities.

The One Big Beautiful Bill Act (“OBBBA”), which was signed into law on July 4, 2025, significantly affected U.S. income tax law. The Company is currently assessing its impact; however, the Company does not expect a material impact to its consolidated financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

As a smaller reporting company, the Company is not required to provide information typically disclosed under this item.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

As of September 30, 2025, the Company carried out an evaluation under the supervision and with the participation of its Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed in the Securities and Exchange Commission (SEC) reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time period specified by the SEC’s rules and forms and that such information is accumulated and communicated to management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure. The executive officers have concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2025, and that the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q fairly present, in all material respects, the Company’s financial condition, results of operations, and cash flows for the periods presented in conformity with United States Generally Accepted Accounting Principles (GAAP).

Changes in Internal Control over Financial Reporting

There have not been any significant changes in the Company’s internal control over financial reporting during the most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Part II - Other Information

Item 1. Legal Proceedings .

The Company is not a party to any material legal proceedings outside the ordinary course of business or to any other legal proceedings, which if adversely determined, would be expected to have a material adverse effect on its financial condition or results of operation.

Item 1A. Risk Factors.

As a smaller reporting company, the Company is not required to provide information typically disclosed under this item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Recent Sales of Unregistered Securities and Use of Proceeds from Registered Securities

None.

Issuer Purchases of Equity Securities

On April 22, 2025, the Company executed a 10b5-1 agreement with a broker to repurchase shares of the Company’s Class A Common Stock. Under the terms of the agreement, the broker is permitted to repurchase up to $1,000,000 of the Company’s Class A Common Stock. Purchases commenced April 23, 2025. The agreement is subject to the daily time, price, and volume conditions of Rule 10b-18. The agreement will expire on December 31, 2025.

The following table shows the Company’s repurchase activity during the three-month period ended September 30, 2025, under the 10b5-1 agreement.

Period	(a) Total Number of Class A Shares Purchased		(b) Average Price Paid per Class A Share (1)		(c) Total Number of Class A Shares Purchased as Part of Publicly Announced Plan or Program		(d) Maximum Number (or Approximate Dollar Value) of Class A Shares that May Yet Be Purchased Under the Plan or Program (2)
7/1/2025-7/31/2025		4,463	$	10.22		-		94,565
8/1/2025-8/31/2025		-		-		-		94,565
9/1/2025-9/30/2025		-		-		-		94,565

Total		4,463	$	10.22		-		94,565

	(1)	Includes fees and commissions paid on stock repurchases.

	(2)	In September 2018, the Board of Directors of the Company approved a Stock Repurchase Plan that authorized the repurchase of 300,000 shares of the Company’s Class A Common Stock in the open market. The Company amended the Stock Repurchase Plan on December 4, 2020. The amendment authorized the repurchase of a total of 1,000,000 shares of the Company’s Class A Common Stock in the open market. Any repurchased shares of Class A common stock are to be held as treasury shares to be used as the Company's employer matching contribution to the Employee 401(k) Retirement Savings Plan and for shares held in the Deferred Compensation Plan.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

None.

Item 5. Other Information.

Item 6. Exhibits, Financial Statements Schedules, and Reports on Form 8-K.

(a)(1)

Financial Statements

See “Table of Contents – Part I – Financial Information” under page 2 above.

(a)(2)

Financial Statement Schedules

None

All other schedules to the consolidated financial statements required by Article 7 of Regulation S-X are not required under the related instructions or are inapplicable and therefore have been omitted.

(a)(3)

Exhibits

The following Exhibits are filed herewith pursuant to Rule 601 of Regulation S-K or are incorporated by reference to previous filings.

	3.1	Amended and Restated Articles of Incorporation (1)
	3.2	Amended and Restated Bylaws (2)
	21	Subsidiaries of the Registrant
	31.1	Certification pursuant to 18 U.S.C. Section 1350, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002
	31.2	Certification pursuant to 18 U.S.C. Section 1350, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002
	32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	32.2	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	101.INS	Inline XBRL Instance Document
	101.SCH	Inline XBRL Taxonomy Extension Schema Document
	101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
	101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
	101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
	101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
	104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

	(1)	Incorporated by reference from Report on Form 10-K, as filed on March 31, 2017
	(2)	Incorporated by reference from Report on Form 10-Q, as filed on May 15, 2019

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

REGISTRANT

SECURITY NATIONAL FINANCIAL CORPORATION

Registrant

Dated: November 13, 2025		/s/ Scott M. Quist
		Scott M. Quist
		Chairman, President and Chief Executive Officer
		(Principal Executive Officer)

Dated: November 13, 2025		/s/ Garrett S. Sill
		Garrett S. Sill
		Chief Financial Officer and Treasurer
		(Principal Financial Officer and Principal Accounting Officer)

TABLE OF CONTENTS

Part I - Financial Information Item 1. Financial Statements Item 2. Management S Discussion and Analysis Of Financial Condition and Results Of Operations Item 3. Quantitative and Qualitative Disclosures About Market Risk Item 4. Controls and Procedures Part II - Other Information Item 1. Legal Proceedings Item 1A. Risk Factors Item 2. Unregistered Sales Of Equity Securities and Use Of Proceeds Item 3. Defaults Upon Senior Securities Item 4. Mine Safety Disclosures Item 5. Other Information Item 6. Exhibits, Financial Statements Schedules, and Reports on Form 8-k

Exhibits

21 Subsidiaries of the Registrant 31.1 Certification pursuant to 18 U.S.C. Section 1350, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002 31.2 Certification pursuant to 18 U.S.C. Section 1350, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002 32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SNFCA 10-Q Quarter ended Sept. 30, 2025

Exhibits