SECURITY NATIONAL FINANCIAL CORP (SNFCA)

CIK: 0000318673. SIC: 6199 Finance Services. Latest 10-K as of: 2026-03-16.

SIC breadcrumb: Finance, Insurance, And Real Estate > SIC Major Group 61 > SIC 6199 Finance Services

SEC company page: https://www.sec.gov/edgar/browse/?CIK=318673. Latest filing source: 0001493152-26-010228.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-16. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000318673.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-11. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000318673.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001493152-26-022202.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high. Filing date: 2026-05-11. Report date: 2026-03-31.

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 funeral home and cemetery business; and (iii) capitalizing on the 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-month periods ended March 31, 2026, and
2025. See Note 16 to the condensed consolidated financial statements.

Three months ended March 31,

(in thousands of dollars)

2026

2025

% Increase (Decrease)

Revenues from external customers:

Insurance premiums

$

28,855

$

29,780

(3

)%

Net investment income

17,717

18,631

(5

)%

Gains on investments and other assets

383

291

32

%

Other revenues

375

585

(36

)%

Intersegment revenues

1,523

1,320

15

%

Total segment revenues

$

48,853

$

50,607

(3

)%

Segment net earnings

$

5,938

$

6,222

(5

)%

Profitability
for the three-month period ended March 31, 2026 decreased due to (a) a $924,000 decrease in insurance premiums and other considerations,
(b) a $914,000 decrease in net investment income, (c) a $211,000 decrease in other revenues, and (d) a $66,000 increase in amortization
of deferred policy acquisition costs, which were partially offset by (i) a $916,000 decrease in policyholder benefits and claims, (ii)
a $435,000 decrease in selling, general and administrative expenses, (iii) a $203,000 increase in intersegment revenue, (iv) a $122,000
decrease in income tax expense, (v) a $92,000 increase in gains on investments and other assets, (vi) a $49,000 decrease in intersegment
expenses, and (vii) a $14,000 decrease in interest expense.

76

Funeral
Home and Cemetery Operations

The
Company sells funeral home services and products through its eleven funeral homes in Utah and four funeral homes 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 funeral home and cemetery product sales and services are recognized as
revenue when the services are performed or when the products are delivered. Pre-need funeral home 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 funeral home and cemetery operations for the three-month periods ended March
31, 2026, and 2025. See Note 16 to the condensed consolidated financial statements.

Three months ended March 31,

(in thousands of dollars)

2026

2025

% Increase (Decrease)

Revenues from external customers:

Cemetery revenues

$

4,148

$

3,710

12

%

Funeral home revenues

3,586

3,590

0

%

Net investment income

652

421

55

%

Gains (losses) on investments and other assets

(74

)

210

(135

)%

Other revenues

161

188

(14

)%

Interesegment revenues

84

84

0

%

Total segment revenues

$

8,557

$

8,203

4

%

Segment net earnings

$

1,631

$

1,703

(4

)%

Profitability
in the three-month period ended March 31, 2026 decreased due to (a) a $353,000 increase in selling, general and administrative expenses,
primarily attributable to a $195,000 increase in personnel expenses, (b) a $284,000 decrease in gains on investments and other assets,
(c) a $116,000 increase in amortization of deferred policy acquisition costs, (d) a $27,000 decrease in other revenues, and (e) a $4,000
decrease in funeral home at-need sales, which were partially offset by (i) a $305,000 increase in cemetery pre-need sales, (ii) a $231,000
increase in net investment income, (iii) a $133,000 increase in cemetery at-need sales, (iv) a $20,000 decrease in cost of goods and
services sold, and (v) a $16,000 decrease in income tax expense, (vi) a $7,000 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 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 2.04% of its loan origination volume. These mortgage loans are serviced by either SecurityNational
Mortgage or an approved third-party sub-servicer.

77

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 three-month periods ended March 31, 2026, and 2025, SecurityNational Mortgage originated 1,415 loans ($488,560,000 total loan volume
principal amount) and 1,508 loans ($517,886,000 total loan volume principal amount), respectively.

The
following table shows the condensed financial results of the mortgage operations for the three-month periods ended March 31, 2026, and
2025. See Note 16 to the condensed consolidated financial statements.

Three months ended March 31,

(in thousands of dollars)

2026

2025

% Increase (Decrease)

Revenues from external customers

Secondary gains from investors

$

16,415

$

16,955

(3

)%

Income from loan originations

7,294

6,738

8

%

Change in fair value of loans held for sale

(1,604

)

641

(350

)%

Change in fair value of loan commitments

1,385

475

192

%

Net investment income

132

150

(12

)%

Gains on investments and other assets

42

86

(51

)%

Other revenues

262

289

(9

)%

Intersegment revenues

72

122

(41

)%

Total segment revenues

$

23,998

$

25,456

(6

)%

Segment net loss

$

(567

)

$

(1,511

)

62

%

Losses
for the three-month period ended March 31, 2026 decreased due to (a) a $1,988,000 decrease in personnel expenses, (b) a $1,285,000 decrease
in commissions, (c) a $910,000 increase in the fair value of loan commitments, (d) a $556,000 increase in income from loan originations,
(e) a $161,000 decrease in rent and rent related expenses, (f) a $110,000 decrease in interest expense, (g) a $35,000 decrease in depreciation
on property and equipment, and (h) a $28,000 decrease in advertising expenses, which were partially offset by (i) a $2,245,000 decrease
in the fair value of loans held for sale, (ii) a $540,000 decrease in secondary gains from investors, (iii) a $352,000 decrease in income
tax benefit, (iv) a $259,000 increase in costs related to funding mortgage loans, (v) a $231,000 increase in other expenses, (vi) a $210,000
increase in intersegment expenses, (vii) a $153,000 increase in data processing and IT related expenses, (viii) a $50,000 decrease in
intersegment revenues, (ix) a $43,000 decrease in gains on investments and other assets, (x) a $26,000 decrease in other revenues, and
(xi) a $19,000 decrease in net investment income.

Consolidated
Results of Operations

Three-month
period ended March 31, 2026, Compared to Three-month period ended March 31, 2025

Total
revenues decreased by $3,011,000, or 3.6%, to $79,729,000 for the three-month period ended March 31, 2026, from $82,740,000 for the comparable
period in 2025. Contributing to this decrease in total revenues was a $1,319,000 decrease in mortgage fee income, a $924,000 decrease
in insurance premiums and other considerations, a $701,000 decrease in net investment income, a $264,000 decrease in other revenues,
and a $235,000 decrease in gains on investments and other assets, which were partially offset by a $434,000 increase in net funeral home
and cemetery sales.

78

Mortgage
fee income decreased by $1,319,000, or 5.3%, to $23,490,000, for the three-month period ended March 31, 2026, from $24,809,000 for the
comparable period in 2025. This decrease was primarily due to a $2,245,000 decrease in the fair value of loans held for sale and a $540,000
decrease in secondary gains from mortgage loans sold to third-party investors into the secondary market, which were partially offset
by a $910,000 increase in the fair value of loan commitments and a $556,000 increase in income from loan originations.

Insurance
premiums and other considerations decreased by $924,000, or 3.1%, to $28,855,000 for the three-month period ended March 31, 2026, from
$29,779,000 for the comparable period in 2025. This decrease was primarily due to a decrease of $966,000 in first year premiums, which
was partially offset by an increase of $42,000 in renewal premiums.

Net
investment income decreased by $701,000, or 3.7%, to $18,501,000 for the three-month period ended March 31, 2026, from $19,202,000 for
the comparable period in 2025. This decrease was primarily attributable to a $560,000 increase in investment expenses, a $355,000 decrease
in interest on cash and cash equivalents, a $288,000 decrease in insurance assignment income, a $22,000 decrease in real estate income,
and a $3,000 decrease in policy loan interest, which were partially offset by a $310,000 increase in mortgage loan interest, a $154,000
increase in other investment income, a $48,000 increase in fixed maturity securities income, and a $15,000 increase in equity securities
income.

Net
funeral home and cemetery sales increased by $434,000, or 5.9%, to $7,734,000 for the three-month period ended March 31, 2026, from $7,300,000
for the comparable period in 2025. This increase was primarily due to a $305,000 increase in cemetery pre-need sales and a $133,000 increase
in cemetery at-need sales, which were partially

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted from Item 7 to the first post-MD&A boundary after HTML sanitization. Confidence: high. Filing date: 2026-03-16. Report date: 2025-12-31.

Item
7. 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 cemetery and mortuary business; and (iii) capitalizing on the housing market by originating
mortgage loans.

Insurance
Operations

The
following table shows the condensed financial results for the Company’s insurance operations for 2025, and 2024. See Note 20 of
the Notes to Consolidated Financial Statements. See Note 1 of the Notes to Consolidated Financial Statements regarding the adoption of
ASU 2018-12.

Years
ended December 31

(in thousands of dollars)

2025

2024

2025
vs 2024

% Increase (Decrease)

Revenues from external customers:

Insurance premiums

$

119,757

$

119,656

0

%

Net investment income

76,379

68,255

12

%

Gains on investments and other assets

3,229

2,055

57

%

Other revenues

1,904

1,564

22

%

Intersegment revenues

6,996

7,272

(4

)%

Total segment revenues

$

208,265

$

198,802

5

%

Segment net earnings

$

29,439

$

27,435

7

%

Profitability
for 2025 increased due to (a) a $8,124,000 increase in net investment income, (b) a $1,174,000 increase in gains on investments and other
assets, (c) a $340,000 increase in other revenues, (d) a $219,000 decrease in intersegment expenses, and (e) a $101,000 increase in insurance
premiums and other considerations, which were partially offset by (i) a $6,134,000 increase in selling, general and administrative expenses,
(ii) a $711,000 increase in amortization of deferred policy acquisition costs, (iii) a $621,000 increase in income tax expense, (iv)
a $276,000 decrease in intersegment revenue, (v) a $205,000 increase in policyholder benefits and claims, and (vi) a $7,000 increase
in interest expense.

19

Cemetery
and Mortuary Operations

The
following table shows the condensed financial results for the Company’s cemetery and mortuary operations for 2025, and 2024. See
Note 20 of the Notes to Consolidated Financial Statements.

Years
ended December 31

(in thousands of dollars)

2025

2024

2025
vs 2024

% Increase (Decrease)

Revenues from external customers:

Cemetery revenues

$

15,243

$

16,101

(5

)%

Mortuary revenues

13,462

12,936

4

%

Net investment income

2,345

2,569

(9

)%

Gains on investments and other assets

1,347

873

54

%

Other revenues

920

543

69

%

Intersegment revenues

340

341

0

%

Total segment revenues

$

33,657

$

33,363

1

%

Segment net earnings

$

6,584

$

6,634

(1

)%

Profitability
in 2025 decreased due to (a) a $888,000 decrease in cemetery pre-need sales, (b) a $570,000 increase in selling, general and administrative
expenses, (c) a $223,000 decrease in net investment income, (d) an $8,000 increase in income tax expense, and (e) a $2,000 increase in
interest expense, which were partially offset by (i) a $526,000 increase in mortuary at-need sales, (ii) a $474,000 increase in gains
on investments and other assets, (iii) a $377,000 increase in other revenues, (iv) a $143,000 decrease in costs of goods and services
sold, (v) a $63,000 decrease in amortization of deferred policy acquisition costs, (vi) a $29,000 increase in cemetery at-need sales,
and (vii) a $29,000 decrease in intersegment expenses.

Mortgage
Operations

The
Company’s wholly owned subsidiary, 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 SecurityNational Mortgage are funded through loan purchase agreements with the Company,
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 MSRs on approximately
0.85% 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
2025, and 2024, SecurityNational Mortgage originated 6,844 loans ($2,296,055,000 total volume) and 7,269 loans ($2,295,830,000 total
volume), respectively.

20

The
following table shows the condensed financial results for the Company’s mortgage operations for 2025, and 2024. See Note 20 of
the Notes to Consolidated Financial Statements.

Years
ended December 31

(in thousands of dollars)

2025

2024

2025
vs 2024

% Increase (Decrease)

Revenues from external customers:

Secondary gains
from investors

$

75,817

$

70,355

8

%

Income from loan originations

32,609

33,604

(3

)%

Change in fair value of
loans held for sale

616

2,870

(79

)%

Change in fair value of
loan commitments

(833

)

730

(214

)%

Net investment income

614

902

(32

)%

Gains (losses) on investments and other assets

60

(986

)

106

%

Other revenues

1,118

2,497

(55

)%

Intersegment revenues

354

573

(38

)%

Total segment revenues

$

110,355

$

110,545

0

%

Segment net loss

$

(3,871

)

$

(4,949

)

22

%

Losses
in 2025 compared to 2024 decreased due to (a) a $5,462,000 increase in secondary gains from investors, (b) a $3,076,000 decrease in personnel
expenses, (c) a $1,302,000 decrease in rent and rent related expenses, (d) a $1,046,000 increase in gains on investments and other assets,
(e) a $248,000 decrease in intersegment expenses, and (f) a $13,000 decrease in depreciation on property and equipment, which were partially
offset by (i) a $2,254,000 decrease in the fair value of loans held for sale, (ii) a $1,563,000 decrease in the fair value of loan commitments,
(iii) a $1,379,000 decrease in other revenues, (iv) a $994,000 decrease in income from loan originations, (v) an $845,000 increase in
commissions, (vi) an $833,000 increase in other expenses, (vii) a $488,000 increase in costs related to funding mortgage loans, (viii)
a $390,000 increase in advertising expenses, (iv) a $374,000 increase in income tax expense, (x) a $287,000 decrease in net investment
income, (xi) a $255,000 increase in interest expense, (xii) a $220,000 decrease in intersegment revenues, and (xiii) a $187,000 increase
in data processing and IT related expenses.

Critical
Accounting Policies and Estimates

The
Company’s significant accounting policies are fundamental to understanding its results of operations and financial condition as
they require that the Company use estimates and assumptions that may affect the value of its assets or liabilities and financial results.
See Note 1 – Summary of Significant Accounting Policies of the Notes to the Consolidated Financial Statements for further information.

Two
of these policies, discussed below, relate to critical estimates because they require management to make difficult, subjective and complex
judgments about matters that are inherently uncertain and because it is likely that materially different amounts would be reported under
different conditions or using different assumptions. Actual results could differ from those estimates.

The
Company’s Management and the Audit Committee of the Board of Directors have reviewed and approved the accounting policies associated
with these critical estimates.

Future
Policy Benefits

A
liability for future policy benefits is accrued as premium revenue is recognized, which is the present value of expected future
policy benefits to be paid to or on behalf of policyholders less the present value of expected future net premiums to be collected
from policyholders. This liability is calculated using a discount rate assumption that is an upper-medium grade fixed-income
instrument yield as provided by Bloomberg’s Evaluated Pricing (“BVAL”) methodology. This discount rate for a
particular cohort is locked-in when that cohort is closed to new contracts and is used for purposes of interest accretion for the
future policy benefits liability and is reflected in policyholder benefits and claims on the consolidated statements of earnings. The current rate as of each reporting date is used to calculate an adjusted future
policy benefit liability and is recognized through accumulated other comprehensive income (“AOCI”). Other assumptions include best-estimate
mortality and lapse rates that are based on the company’s historical experience, industry data, and other factors; also
estimates of expected non-level costs, such as termination or settlement costs. Routine policy maintenance costs are not included.
These assumptions are reviewed at least annually. Any changes to these assumptions will be reflected in policyholder benefits and
claims on the consolidated statements of earnings. The DPL equals accumulated deferrals (prior to and including the valuation
date) minus accumulated amortization, where “deferrals” equals the difference between gross and net premium, and
“amortization” equals the product of the measure of in force policies (units in force) and an amortization ratio which
is updated at the same time as the net premium ratio.

21

Deferred
Acquisition Costs and Value of Business Acquired

Commissions
and other acquisition costs, net of commission and expense allowances for reinsurance ceded, that vary with and are primarily related
to the production of new insurance business that have been incurred are deferred. For traditional long-duration life insurance products,
deferred policy acquisition costs (“DAC”) are amortized on a constant-level basis established on a cohort-grouped contract
basis over the expected term of the related contracts, with the amortization basis being units in force using assumptions consistent
with those used in computing the liability for future policy benefits. For policyholder account balance insurance products, DAC is amortized
using the policy counts for annuities and units in-force for interest sensitive life products. Deferred acquisition costs are written
off when policies terminate.

Value
of business acquired (“VOBA”) is the present value of estimated future profits of the acquired business and is amortized
the same way as DAC.

Results
of Consolidated Operations

2025
Compared to 2024

Total
revenues increased by $10,065,000, or 3.0%, to $344,588,000 for 2025 from $334,523,000 for 2024. Contributing to this increase in total
revenues was primarily a $7,613,000 increase in net investment income, a $2,695,000 increase in gains on investments and other assets,
a $651,000 increase in mortgage fee income, and a $101,000 increase in insurance premiums and other considerations. This increase in
total revenues was offset by a $662,000 decrease in other revenues and a $333,000 decrease in net cemetery and mortuary sales.

Mortgage
fee income increased by $651,000, or 0.6%, to $108,209,000 for 2025, from $107,558,000 for 2024. This increase was primarily due to a
$5,462,000 increase in secondary gains from mortgage loans sold to third-party investors into the secondary market. This increase in
mortgage fee income was partially offset by a $3,817,000 decrease in the fair value of loans held for sale and loan commitments and a
$994,000 decrease in loan fees and interest income net of the provision for loan loss reserve.

Insurance
premiums and other considerations increased by $101,000, or 0.1%, to $119,757,000 for 2025, from $119,656,000 for 2024. This increase
was primarily due to an increase of $2,564,000 in renewal premiums due to the growth of the Company in recent years, particularly in
whole life products, which resulted in more premium paying policies in force. This increase was partially offset by a decrease of $2,463,000
in first year premiums because of decreased preneed insurance sales.

22

Net
investment income increased by $7,613,000, or 10.6%, to $79,338,000 for 2025, from $71,725,000 for 2024. This increase was primarily
attributable to a $9,875,000 increase in mortgage loan interest, a $1,603,000 increase in fixed maturity securities income, a $928,000
increase in insurance assignment income, $258,000 increase in rental income from real estate held for investment, a $189,000 increase
in income in other investments, a $156,000 increase in equity securities income, and a $12,000 increase in policy loan income. This increase
was partially offset by a $2,773,000 increase in investment expenses and a $2,635,000 decrease in interest on cash and cash equivalents.

Net
mortuary and cemetery sales decreased by $333,000, or 1.1%, to $28,704,000 for 2025, from $29,037,000 for 2024. This decrease was primarily
due to an $888,000 decrease in cemetery pre-need sales. This decrease was partially offset by a $526,000 increase in mortuary at-need
sales and a $29,000 increase in cemetery at-need sales.

Gains
on investments and other assets increased by $2,695,000, or 138.8%, to $4,636,000 for 2025, from $1,942,000 for 2024. This increase in
gains on investments and other assets was primarily due to a $1,167,000 increase in gains on mortgage loans held for investment, an $864,000
increase in gains on real estate held for investment and sale, and an $856,000 increase in gains on equity securities mostly attributable
to increases in the fair value of these equity securities. This increase was partially offset by a $101,000 decrease in gains on fixed
maturity securities and a $91,000 decrease in gains on other investments and assets.

Other
revenues decreased by $662,000, or 14.4%, to $3,942,000 for 2025 from $4,604,000 for 2024. This decrease was primarily attributable to
a $1,350,000 legal settlement that was received in 2024, which was partially offset by an increase in other miscellaneous revenues in
2025.

Total
benefits and expenses were $303,178,000, or 88.0% of total revenues for 2025, as compared to $297,149,000, or 88.8% of total revenues
for 2024.

Policyholder
benefits and claims increased by an aggregate of $205,000, or 0.2%, to $100,818,000 for 2025, from $100,613,000 for 2024. This increase
was primarily the result of a $2,306,000 increase in death benefits and a $485,000 increase in surrender and other policy benefits. This
increase was partially offset by a $2,586,000 decrease in future policy benefits.

Amortization
of deferred policy and pre-need acquisition costs and value of business acquired increased by $648,000, or 5.9%, to $11,661,000 for 2025,
from $11,013,000 for 2024. This increase is due to a $689,000 increase in the amortization of deferred policy and pre-need acquisition
costs due to an increase in the average outstanding balance. This increase was partially offset by a $41,000 decrease in the amortization
of value of business acquired due to no new deferrals and a decreasing average outstanding balance.

Selling,
general and administrative expenses increased by an aggregate of $5,055,000, or 2.9%, to $181,520,000 for 2025, from $176,465,000 for
2024. This increase was primarily the result of a $3,370,000 increase in other expenses, a $2,067,000 increase in personnel expenses,
a $488,000 increase in costs related to funding mortgage loans, a $400,000 increase in advertising expenses, a $76,000 increase in commissions,
and a $42,000 increase in depreciation on property and equipment. This increase was partially offset by a $1,386,000 decrease in rent
and rent related expenses.

Interest
expense increased by $265,000, or 6.2%, to $4,519,000 for 2025, from $4,254,000 for 2024. This increase was primarily due to an increase
of $256,000 in interest expense on mortgage warehouse lines of credit for loans held for sale and an increase of $9,000 in interest expense
on bank loans.

Income
tax expense increased by $1,002,000, or 12.1%, to $9,257,000 for 2025, from $8,255,000 for 2024. This increase was primarily due to an
increase in earnings before income taxes for 2025 compared to 2024. The Company’s overall effective tax rate increased from 22.1%
for 2024 to 22.4% in 2025, a 0.3% increase in the effective tax rate or a 1.4% change. This increase was partially due to an increase
in non-deductible items.

23

Risks

The
following is a description of the material risks facing the Company and how it mitigates those risks:

Legal
and Regulatory Risks. Changes in the legal or regulatory environment in which the Company operates may create additional expenses
and risks not anticipated by the Company in developing and pricing its products. Regulatory initiatives designed to reduce insurer profits,
new legal theories or insurance company insolvencies through guaranty fund assessments may create costs for the insurer beyond those
recorded in the consolidated financial statements. In addition, changes in tax law with respect to mortgage interest deductions or other
public policy or legislative changes may affect the Company’s mortgage sales. Also, the Company may be subject to further regulations
in the cemetery and mortuary business. The Company aims to mitigate these risks by offering a wide range of products and by diversifying
its operations, thus reducing its exposure to any single product or jurisdiction, and by employing underwriting practices that identify
and minimize the adverse impact of such risks.

Mortgage
Industry Risks. Developments in the mortgage industry and credit markets can adversely affect the Company’s ability to sell
its mortgage loans to investors, which can impact the Company’s financial results by requiring it to assume the risk of holding
and servicing any unsold loans.

The
mortgage loan loss reserve is an estimate of probable losses at the balance sheet date that the Company could realize in the future on
mortgage loans sold to third-party investors. The Company’s mortgage subsidiary may be required to reimburse third-party investors
for costs associated with early payoff of loans within the first six months of such loans and to repurchase loans where there is a default
in any of the first four monthly payments to the investors or, in lieu of repurchase, to pay a negotiated fee to the investors. The Company’s
estimates are based upon historical loss experience and the best estimate of the probable loan loss liabilities.

During
2025 and 2024 the Company decreased its loan loss reserve by $312,000 and increased its loan loss reserve by $150,000, respectively,
for loan originations, and the charges have been included in mortgage fee income. The estimated liability for indemnification losses
is included in other liabilities and accrued expenses and, as of December 31, 2025 and 2024, the balances were $384,000 and $697,000,
respectively. The Company believes the loan loss reserve represents probable loan losses incurred as of December 31, 2025. There is a
risk, however, that future loan losses may exceed the loan loss reserve.

As
of December 31, 2025, the Company’s mortgage loans held for investment portfolio consisted of mortgage loans in an aggregate principal
amount of $6,516,000 with delinquencies exceeding 90 days. Of this amount, loans with an aggregate principal amount of $1,204,000 were
in foreclosure proceedings. The Company has not received or recognized any interest income on the $6,516,000 in mortgage loans with delinquencies
exceeding 90 days. During 2025 and 2024, the Company increased its allowance for credit losses by $704,000 and decreased it by $1,934,000,
respectively, which was charged to bad debt expense and included in selling, general and administrative expenses for the period. The
main reasons for the increase in 2025 when compared to 2024 were due to an increase in the commercial loan held for investment portfolio
and in the residential construction loan held for investment portfolio. The allowances for credit losses on the Company’s mortgage
loans held for investment portfolio as of December 31, 2025 and 2024 were $2,589,000 and $1,885,000, respectively.

Interest
Rate Risk. Fluctuations in interest rates may cause a decrease in the value of the Company’s investments or impair the ability
of the Company to market its mortgage and cemetery and mortuary products. This change in rates may cause certain interest-sensitive products
to become uncompetitive or may cause disintermediation. The Company aims to mitigate this risk by charging fees for non-conformance with
certain policy provisions, by offering products that transfer this risk to the purchaser, and by attempting to match the maturity schedule
of its assets with the expected payouts of its liabilities. To the extent that liabilities come due more quickly than assets mature,
the Company might have to borrow funds or sell assets prior to maturity and potentially recognize a loss on the sale.

Mortality
and Morbidity Risks. The Company’s actuarial assumptions differing from actual mortality and morbidity experienced may mean
that the Company’s relevant products sold were underpriced, may require the Company to liquidate insurance or make other claims
earlier than planned, and have other potentially adverse consequences to the business. The Company aims to minimize this risk through
sound underwriting practices, asset and liability duration matching, and sound actuarial practices.

Estimates.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the
amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

24

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.

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 on 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 December 31, 2025, SecurityNational Mortgage was not in compliance with the net income covenant of the US Bank, Western Alliance
Bank and JP Morgan Chase Bank warehouse lines of credit. SecurityNational Mortgage has since received waivers from each of these
lenders with respect to this covenant. In the unlikely event the Company is required to repay the outstanding advances of
approximately $4,173,449 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 from 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
2025 and 2024, the Company’s operations provided cash of $45,540,000 and of $57,320,000, respectively. The decrease in cash provided
by operations was due primarily to a decrease in proceeds from loans held for sale.

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 held for sale. 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 $365,986,000 (at estimated fair value) and $348,774,000 (at estimated fair value) as of December 31,
2025, and 2024, respectively. This represented 35.2% and 38.0% of the total investments of the Company as of December 31, 2025, and 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 December 31, 2025, 1.6% (or $5,825,000) and as
of December 31, 2024, 2.4% (or $8,431,000) of the insurance subsidiaries’ total bond investments were invested in bonds in rating
categories three through six, which are considered non-investment grade.

See
Note 2 of the Notes to Consolidated Financial Statements for the schedule of the maturity of fixed maturity securities available for
sale and for the schedule of principal payments for mortgage loans held for investment.

25

See
Note 15 of the Notes to Consolidated Financial Statements for a description of the Company’s sources of liquidity.

If
market conditions were to cause interest rates to change, the fair value of the Company’s fixed income portfolio (of approximately
$705,213,000), which includes bonds, preferred stocks and mortgage loans held for investment, could change by the following amounts based
on the respective basis point swing (the change in the fair values were calculated using a modeling technique):

-200
bps

-100
bps

+100
bps

+200
bps

Change in Fair Value

$

50,112

$

22,837

$

(23,334

)

$

(47,001

)

(in thousands)

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 December 31, 2025
and 2024, the life insurance subsidiaries were in compliance with the regulatory criteria.

The
Company’s total capitalization of stockholders’ equity, and bank loans and other loans payable were $508,757,000 and $488,639,000
as of December 31, 2025 and 2024, respectively. This increase was primarily due to a $28,470,000 increase in stockholders’ equity,
which was partially offset by a decrease of $8,352,000 in bank loans and other loans payable. Stockholders’ equity as a percentage
of total capitalization was 80.7% and 78.2% as of December 31, 2025 and 2024, respectively.

Lapse
rates measure the amount of insurance terminated during a particular period. The Company’s lapse rate for life insurance was 7.2%
for 2025 as compared to a rate of 7.0% for 2024.

The
combined statutory capital and surplus of the Company’s life insurance subsidiaries was $139,068,000 and $120,216,000 as of December
31, 2025 and 2024, respectively. The life insurance subsidiaries cannot pay dividends to their parent company without the approval of
state insurance regulatory authorities.

Forward-Looking
Statements

The
Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements to encourage companies to provide
prospective information about their businesses without fear of litigation so long as those statements are identified as forward-looking
and are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially
from those projected in such statements. The Company desires to take advantage of the “safe harbor” provisions of the act.

This
Annual Report on Form 10-K contains forward-looking statements, together with related data and projections, about the Company’s
projected financial results and its plans and strategies. However, the actual results and needs of the Company may vary materially from
forward-looking statements and projections made from time to time by the Company based on management’s then-current expectations.
The business in which the Company is engaged involves changing and competitive markets, which may involve a high degree of risk, and
there can be no assurance that forward-looking statements and projections will prove accurate.

Factors
that may cause the Company’s actual results to differ materially from those contemplated or projected, forecast, estimated or budgeted
in such forward looking statements include among others, the following possibilities: (i) heightened competition, including the intensification
of price competition, the entry of new competitors, and the introduction of new products by new and existing competitors; (ii) adverse
state and federal legislation or regulation, including decreases in rates, limitations on premium levels, increases in minimum capital
and reserve requirements, benefit mandates and tax treatment of insurance products; (iii) fluctuations in interest rates causing a reduction
of investment income or increase in interest expense and in the market value of interest rate sensitive investment; (iv) failure to obtain
new customers, retain existing customers or reductions in policies in force by existing customers; (v) higher service, administrative,
or general expenses due to the need for additional advertising, marketing, administrative or management information systems expenditures;
(vi) loss or retirement of key executives or employees; (vii) increases in medical costs; (viii) changes in the Company’s liquidity
due to changes in asset and liability matching; (ix) restrictions on insurance underwriting based on genetic testing and other criteria;
(x) adverse changes in the ratings obtained by independent rating agencies; (xi) failure to maintain adequate reinsurance; (xii) possible
claims relating to sales practices for insurance products and claim denials; (xiii) adverse trends in mortality and morbidity; (xiv)
deterioration of real estate markets; and (xv) lawsuits in the ordinary course of business.

26

Off-Balance
Sheet Agreements

The
Company has commitments to fund existing construction and land development loans pursuant to the various loan agreements. As of December
31, 2025, the Company’s commitments were approximately $201,220,000 for these loans, of which $158,908,000 had been drawn. 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 80% of 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.

Contractual
Obligations

In
the ordinary course of the Company’s operations, the Company enters certain contractual obligations. Such obligations include operating
leases for office space, agreements with respect to borrowed funds and future policy benefits. See Notes 15, 16, and 24 of the Notes
to Consolidated Financial Statements for more information about these obligations.

Captive
Insurance Participation

The
Company has a limited equity interest in a captive insurance entity (the “Captive’) that provides workers compensation, general
liability and automobile insurance . This program permits the Company to pool insurance risks and resources with like-minded companies
in order to obtain more competitive pricing for claims administration, stop loss insurance premiums and to limit its risk of loss in
any particular year. The Captive also provides access to a wide array of safety-related services and regular safety training to help
the Company control claims. The maximum exposure to a loss related to the Company’s involvement in the Captive is limited to approximately
$443,758, which is collateralized under a standby letter of credit issued on the insurance entity’s behalf. See Note 24 of the
Notes to Consolidated Financial Statements for additional discussion of commitments associated with the insurance program. The Company
has been a member of the Captive since 2006 and does not expect any material losses to result from the issuance of the standby letter
of credit given the Company’s past performance.