Investments

6 Months Ended

Jun. 30, 2026

Investments, Debt and Equity Securities [Abstract]

2) Investments

The Company’s investments as of June 30, 2026, are summarized as follows:

Schedule of Investments

	Amortized Cost			Gross Unrealized Gains		Gross Unrealized Losses (1)			Allowance for Credit Losses			Estimated Fair Value
June 30, 2026:
Fixed maturity securities, available for sale, at estimated fair value:
U.S. Treasury securities and obligations of U.S. Government agencies	$	75,537,690		$	212,461	$	(337,267	)	$	-		$	75,412,884
Obligations of states and political subdivisions		3,090,544			262		(185,443	)		-			2,905,363
Corporate securities including public utilities		284,497,104			4,003,915		(4,153,173	)		(636,611	)		283,711,235
Mortgage-backed securities		21,228,233			37,490		(3,384,006	)		(204,049	)		17,677,668
Redeemable preferred stock		750,000			9,200		(37,500	)		-			721,700
Total fixed maturity securities available for sale	$	385,103,571		$	4,263,328	$	(8,097,389	)	$	(840,660	)	$	380,428,850

Equity securities at estimated fair value:
Common stock:
Industrial, miscellaneous and all other	$	12,540,527		$	8,479,971	$	(237,925	)				$	20,782,573
Total equity securities at estimated fair value	$	12,540,527		$	8,479,971	$	(237,925	)				$	20,782,573

Mortgage loans held for investment at amortized cost:
Residential	$	85,963,856
Residential construction		140,692,240
Commercial		68,081,034
Less: Unamortized deferred loan fees, net		(1,552,440	)
Less: Allowance for credit losses		(2,255,193	)
Less: Net discounts		(244,309	)

Total mortgage loans held for investment	$	290,685,188

Real estate held for investment - net of accumulated depreciation:
Residential	$	116,634,085
Commercial		118,437,302

Total real estate held for investment	$	235,071,387

Real estate held for sale:
Residential	$	6,345,029
Commercial		3,236,285

Total real estate held for sale	$	9,581,314

Other investments and policy loans at amortized cost:
Policy loans	$	14,616,118
Insurance assignments		44,009,510
Federal Home Loan Bank stock (2)		680,200
Other investments		22,223,337
Less: Allowance for credit losses for insurance assignments		(1,476,295	)

Total other investments and policy loans	$	80,052,870
Accrued investment income	$	9,393,407
Total investments	$	1,025,995,589

(1)	Gross unrealized losses are net of allowance for credit losses
(2)	Includes $612,800 of Membership stock and $67,400 of Activity stock attributable to short-term borrowings and letters of credit.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

June 30, 2026 (Unaudited)

2) Investments (Continued)

The Company’s investments as of December 31, 2025, are summarized as follows:

	Amortized Cost			Gross Unrealized Gains		Gross Unrealized Losses (1)			Allowance for Credit Losses			Estimated Fair Value
December 31, 2025:
Fixed maturity securities, available for sale, at estimated fair value:
U.S. Treasury securities and obligations of U.S. Government agencies	$	75,713,307		$	982,769	$	(89,550	)	$	-		$	76,606,526
Obligations of states and political subdivisions		3,396,999			11,662		(172,184	)		-			3,236,477
Corporate securities including public utilities		277,708,638			7,029,453		(3,387,651	)		(425,401	)		280,925,039
Mortgage-backed securities		24,832,349			161,348		(3,553,214	)		(154,049	)		21,286,434
Redeemable preferred stock		750,000			10,942		(37,500	)		-			723,442
Total fixed maturity securities available for sale	$	382,401,293		$	8,196,174	$	(7,240,099	)	$	(579,450	)	$	382,777,918

Equity securities at estimated fair value:
Common stock:
Industrial, miscellaneous and all other	$	12,206,559		$	6,176,440	$	(332,937	)				$	18,050,062
Total equity securities at estimated fair value	$	12,206,559		$	6,176,440	$	(332,937	)				$	18,050,062

Mortgage loans held for investment at amortized cost:
Residential	$	90,644,590
Residential construction		157,398,705
Commercial		79,231,786
Less: Unamortized deferred loan fees, net		(1,995,795	)
Less: Allowance for credit losses		(2,588,918	)
Less: Net discounts		(254,983	)

Total mortgage loans held for investment	$	322,435,385

Real estate held for investment - net of accumulated depreciation:
Residential	$	93,638,938
Commercial		121,258,192

Total real estate held for investment	$	214,897,130

Real estate held for sale:
Residential	$	6,272,474
Commercial		151,553

Total real estate held for sale	$	6,424,027

Other investments and policy loans at amortized cost:
Policy loans	$	14,467,357
Insurance assignments		46,183,999
Federal Home Loan Bank stock (2)		646,500
Other investments		25,601,905
Less: Allowance for credit losses for insurance assignments		(1,676,468	)

Total policy loans and other investments	$	85,223,293
Accrued investment income	$	9,054,645
Total investments	$	1,038,862,460

(1)	Gross unrealized losses are net of allowance for credit losses
(2)	Includes $581,600 of Membership stock and $64,900 of Activity stock due to short-term advances and letters of credit.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

June 30, 2026 (Unaudited)

2) 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 June 30, 2026, 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 June 30, 2026, and December 31, 2025. 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
June 30, 2026
U.S. Treasury securities and obligations of U.S. Government agencies	$	273,354	$	32,972,686	$	63,913	$	1,566,865	$	337,267	$	34,539,551
Obligations of states and political subdivisions		3,662		196,338		181,781		2,073,479		185,443		2,269,817
Corporate securities including public utilities		1,190,106		86,172,801		2,963,067		37,121,227		4,153,173		123,294,028
Mortgage-backed securities		14,268		993,191		3,369,738		14,700,113		3,384,006		15,693,304
Redeemable preferred stock		37,500		212,500		-		-		37,500		212,500
Totals	$	1,518,890	$	120,547,516	$	6,578,499	$	55,461,684	$	8,097,389	$	176,009,200

December 31, 2025
U.S. Treasury securities and obligations of U.S. Government agencies	$	2,591	$	2,047,280	$	86,959	$	11,033,603	$	89,550	$	13,080,883
Obligations of states and political subdivisions		4,884		195,116		167,300		2,095,220		172,184		2,290,336
Corporate securities including public utilities		638,436		30,085,561		2,749,214		42,688,720		3,387,650		72,774,281
Mortgage-backed securities		4,353		192,242		3,548,862		17,504,265		3,553,215		17,696,507
Redeemable preferred stock		37,500		212,500		-		-		37,500		212,500
Totals	$	687,764	$	32,732,699	$	6,552,335	$	73,321,808	$	7,240,099	$	106,054,507

Relevant holdings were comprised of 549 securities with fair values aggregating 95.6% of the aggregate amortized cost as of June 30, 2026, compared to 338 securities with fair values aggregating 93.6% of the aggregate amortized cost as of December 31, 2025. A credit loss provision of $164,663 and of $20,313 have been recognized for the three-month periods ended June 30, 2026, and 2025, respectively. A credit loss provision of $261,210 and of $65,993 have been recognized for the six-month periods ended June 30, 2026, and 2025, 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

June 30, 2026 (Unaudited)

2) 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

June 30, 2026 (Unaudited)

2) Investments (Continued)

Credit Quality Indicators

Based on the NAIC securities designations, the Company had 98.4% and 98.5% of its fixed maturity securities rated investment grade as of June 30, 2026, and December 31, 2025, 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.

	June 30, 2026				December 31, 2025
NAIC Designation	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
1	$	202,837,866	$	199,876,553	$	198,055,737	$	197,788,945
2		174,316,179		173,864,555		177,242,472		178,441,019
3		5,798,920		5,093,932		6,145,460		5,616,342
4		899,491		822,110		155,717		160,830
5		-		-		-		-
6		501,115		50,000		51,907		47,340
Total	$	384,353,571	$	379,707,150	$	381,651,293	$	382,054,476

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 June 30, 2026, and 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
	Three Months Ended June 30, 2026
	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 - March 31, 2026	$	-	$	-	$	521,948	$	154,049	$	675,997

Additions for credit losses not previously recorded		-		-		-		50,000		50,000
Change in allowance on securities with previous allowance		-		-		114,663		-		114,663
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 - June 30, 2026	$	-	$	-	$	636,611	$	204,049	$	840,660

	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 June 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 - March 31, 2025	$	-	$	-	$	495,251		$	12,049	$	507,300

Additions for credit losses not previously recorded		-		-		-			-		-
Change in allowance on securities with previous allowance		-		-		(20,444	)		-		(20,444	)
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		-		-		130			-		130

Ending Balance - June 30, 2025	$	-	$	-	$	474,937		$	12,049	$	486,986

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

June 30, 2026 (Unaudited)

2) 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 six-month periods ended June 30, 2026, and 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
	Six Months Ended June 30, 2026
	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, 2025	$	-	$	-	$	425,401	$	154,049	$	579,450

Additions for credit losses not previously recorded		-		-		17,498		50,000		67,498
Change in allowance on securities with previous allowance		-		-		193,712		-		193,712
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 - June 30, 2026	$	-	$	-	$	636,611	$	204,049	$	840,660

	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
	Six Months Ended June 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
Balance	$	-	$	-	$	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		-		-		(6,007	)		-		(6,007	)
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 - June 30, 2025	$	-	$	-	$	474,937		$	12,049	$	486,986
Balance	$	-	$	-	$	474,937		$	12,049	$	486,986

The table below presents the amortized cost and the estimated fair value of fixed maturity securities available for sale as of June 30, 2026, by contractual maturity. Actual or expected maturities may differ from contractual maturities because certain securities afford the issuer the right to call or prepay their obligations.

	Amortized Cost		Estimated Fair Value
Due in 1 year	$	11,711,839	$	11,709,904
Due in 2-5 years		129,271,705		129,040,087
Due in 5-10 years		140,558,359		141,414,746
Due in more than 10 years		81,583,435		79,864,745
Mortgage-backed securities		21,228,233		17,677,668
Redeemable preferred stock		750,000		721,700
Total	$	385,103,571	$	380,428,850

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

June 30, 2026 (Unaudited)

2) Investments (Continued)

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

	2026		2025			2026			2025
	Three Months Ended June 30,					Six Months Ended June 30,
	2026		2025			2026			2025
Proceeds from sales	$	-	$	15,172		$	1,179,677		$	2,764,641
Gross realized gains		-		-			247			526
Gross realized losses		-		(711	)		(65,035	)		(542	)

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 June 30, 2026		As of December 31, 2025
Fixed maturity securities available for sale at estimated fair value	$	7,098,607	$	7,744,141
Other investments		424,702		-
Cash and cash equivalents		1,457,017		1,543,842
Total assets on deposit	$	8,980,326	$	9,287,983

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

	As of June 30, 2026		As of December 31, 2025
Fixed maturity securities available for sale at estimated fair value	$	21,114,524	$	23,915,884
Other investments		1,175,185		-
Cash and cash equivalents		2,155,747		2,136,642
Total assets on deposit	$	24,445,456	$	26,052,526

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 June 30, 2026, the Company owed nil to the FHLBs for advances. Amounts owed, if any, are included in Bank and other loans payable on the condensed consolidated balance sheets. The Company did not receive or repay any advances during the six months ended June 30, 2026.

As of
June 30, 2026

As of

December 31, 2025

Fixed maturity securities available for sale at estimated fair value

60,674,140

64,066,256

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

June 30, 2026 (Unaudited)

2) 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 those that are in regions that are expected to have high growth in employment and population and that provide operational efficiencies.

The Company currently owns and operates commercial properties in Utah, California, Mississippi and Louisiana. 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 $112,006,917 and $114,683,175 as of June 30, 2026, and December 31, 2025, respectively. The associated bank loan carrying values totaled $93,152,192 and $94,120,446 as of June 30, 2026, and December 31, 2025, respectively.

During the three and six month periods ended June 30, 2026, and 2025, 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 June 30, 2026, and 2025, the Company recorded depreciation expense on commercial real estate held for investment of $1,433,680 and $1,432,921, respectively, and of $2,867,187 and $2,854,937 during the six-month periods ended June 30, 2026 and 2025, 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
	June 30, 2026		December 31, 2025		June 30, 2026		December 31, 2025
Utah (1)	$	118,419,709	$	121,240,268		546,941		546,941
Louisiana		17,593		17,924		1,622		1,622

	$	118,437,302	$	121,258,192		548,563		548,563

(1)

Includes Center53

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

June 30, 2026 (Unaudited)

2) Investments (Continued)

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

	Net Book Value
	June 30, 2026		December 31, 2025
California	$	2,800,000	$	-
Louisiana		284,732		-
Mississippi (1)		151,553		151,553

	$	3,236,285	$	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 June 30, 2026, 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, Funeral Home/Cemetery Operations, and Mortgage Operations and Sales

216,865

1818 Marshall Street, Shreveport, LA (2) (3)

Life Insurance Operations

12,274

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-month periods ended June 30, 2026, and 2025 the Company recorded impairment losses on residential real estate held for sale nil and nil, respectively, and of $35,651 and nil during the six months ended June 30, 2026 and 2025, respectively. Impairment losses are included in gains (losses) on investment and other assets on the condensed consolidated statements of earnings.

During the three-month periods ended June 30, 2026, and 2025, the Company recorded depreciation expense on residential real estate held for investment of $2,718 and $2,732, respectively, and of $5,436 and $5,408 during the six- month periods ended June 30, 2026 and 2025, 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

June 30, 2026 (Unaudited)

2) Investments (Continued)

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

	Net Book Value
	June 30, 2026		December 31, 2025
Utah (1)	$	116,634,085	$	93,638,938
	$	116,634,085	$	93,638,938

(1)	Includes multiple residential subdivision development projects, refer to the following table

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

	June 30, 2026		December 31, 2025
Lots developed		406		492
Lots to be developed		990		761
Book Value	$	116,475,338	$	93,474,755

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

	Net Book Value
	June 30, 2026		December 31, 2025
Utah	$	5,456,806	$	5,456,806
Colorado		121,000		140,000
Florida		-		146,651
Georgia		380,000		380,000
Hawaii		238,206		-
Nevada		149,017		149,017
	$	6,345,029	$	6,272,474

The net book value of foreclosed residential real estate included in residential real estate held for sale was $1,343,223 and $1,270,669 as of June 30, 2026, and December 31, 2025, respectively.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

June 30, 2026 (Unaudited)

2) Investments (Continued)

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.

The following table presents the distribution of the Company’s mortgage loans held for investment across the various states.

	Commercial			Residential			Residential Construction			Total
As of June 30, 2026:
Utah		29	%		15	%		97	%		57	%
Florida		-			25	%		-			7	%
California		12	%		5	%		-			4	%
Texas		13	%		16	%		-			8	%
Arizona		10	%		13	%		-			6	%
Other states		36	%		26	%		3	%		18	%
Total		100	%		100	%		100	%		100	%

As of December 31, 2025:
Utah		26	%		16	%		96	%		57	%
Florida		1	%		25	%		-			7	%
California		24	%		5	%		-			7	%
Texas		12	%		14	%		-			7	%
Arizona		9	%		15	%		-			6	%
Other states		28	%		25	%		4	%		16	%
Total		100	%		100	%		100	%		100	%

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. Loans that exceed 80% of the fair market value of the respective loan collateral require additional collateral or mortgage insurance by an approved third-party insurer.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

June 30, 2026 (Unaudited)

2) Investments (Continued)

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 and the fair value is reassessed. Accrual of interest resumes if a mortgage loan is brought current. Given this policy, the Company does not measure a credit loss allowance on accrued interest receivable, which 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. Interest income not accrued on these loans totaled approximately $603,912 and $1,042,325 as of June 30, 2026, and December 31, 2025, 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 into the following loan types: commercial, residential, and residential construction. The inherent risks within each loan type vary 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.

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 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 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.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

June 30, 2026 (Unaudited)

2) Investments (Continued)

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 has commitments to fund existing construction and land development loans pursuant to the various loan agreements. As of June 30, 2026, the Company’s commitments were approximately $191,479,678 for these loans, of which $144,527,863 had been funded. 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.

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.

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

Schedule of Allowance for Loan Losses

	Three Months Ended
	Commercial			Residential		Residential Construction			Total
Beginning balance - March 31, 2026	$	1,322,084		$	932,072	$	299,204		$	2,553,360
Change in provision for credit losses (1)		(393,653	)		285,703		(17,819	)		(125,769	)
Charge-offs		(172,398	)		-		-			(172,398	)
Ending balance - June 30, 2026	$	756,033		$	1,217,775	$	281,385		$	2,255,193

Beginning balance - March 31, 2025	$	1,021,730		$	647,107	$	339,755		$	2,008,592
Change in provision for credit losses (1)		157,537			482,785		(8,170	)		632,152
Charge-offs		-			-		-			-
Ending balance - June 30, 2025	$	1,179,267		$	1,129,892	$	331,585		$	2,640,744

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

	Six Months Ended
	Commercial			Residential		Residential Construction			Total
Beginning balance - December 31, 2025	$	1,368,121		$	904,738	$	316,059		$	2,588,918
Change in provision for credit losses (1)		(439,690	)		313,037		(34,674	)		(161,327	)
Charge-offs		(172,398	)		-		-			(172,398	)
Ending balance - June 30, 2026	$	756,033		$	1,217,775	$	281,385		$	2,255,193

Beginning balance - December 31, 2024	$	732,494		$	850,550	$	302,346		$	1,885,390
Change in provision for credit losses (1)		446,773			279,342		29,239			755,354
Charge-offs		-			-		-			-
Ending balance - June 30, 2025	$	1,179,267		$	1,129,892	$	331,585		$	2,640,744

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

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

June 30, 2026 (Unaudited)

2) Investments (Continued)

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

Schedule of Aging of Mortgage Loans

	Commercial			Residential			Residential Construction			Total
June 30, 2026
30-59 days past due	$	-		$	6,593,310		$	-		$	6,593,310
60-89 days past due		77,518			1,340,600			-			1,418,118
Over 90 days past due (1)		7,522,308			7,238,352			-			14,760,660
In process of foreclosure (1)		-			1,053,434			-			1,053,434
Total past due		7,599,826			16,225,696			-			23,825,522
Current		60,481,208			69,738,160			140,692,240			270,911,608
Total mortgage loans		68,081,034			85,963,856			140,692,240			294,737,130
Allowance for credit losses		(756,033	)		(1,217,775	)		(281,385	)		(2,255,193	)
Unamortized deferred loan fees, net		(156,865	)		(1,162,227	)		(233,348	)		(1,552,440	)
Unamortized discounts, net		(138,563	)		(105,746	)		-			(244,309	)
Net mortgage loans held for investment	$	67,029,573		$	83,478,108		$	140,177,507		$	290,685,188

December 31, 2025
30-59 days past due	$	86,117		$	7,302,658		$	-		$	7,388,775
60-89 days past due		-			2,485,313			-			2,485,313
Over 90 days past due (1)		2,832,372			2,479,479			-			5,311,851
In process of foreclosure (1)		588,013			616,430			-			1,204,443
Total past due		3,506,502			12,883,880			-			16,390,382
Current		75,725,284			77,760,710			157,398,705			310,884,699
Total mortgage loans		79,231,786			90,644,590			157,398,705			327,275,081
Allowance for credit losses		(1,368,121	)		(904,738	)		(316,059	)		(2,588,918	)
Unamortized deferred loan fees, net		(374,372	)		(1,283,049	)		(338,374	)		(1,995,795	)
Unamortized discounts, net		(146,534	)		(108,449	)		-			(254,983	)
Net mortgage loans held for investment	$	77,342,759		$	88,348,354		$	156,744,272		$	322,435,385

(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

June 30, 2026 (Unaudited)

2) 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 June 30, 2026:

Credit Quality Indicator	2026		2025		2024		2023		2022		Prior		Total		% of Total
LTV:
Less than 65%	$	3,874,000	$	18,643,045	$	3,888,514	$	12,800,000	$	171,493	$	8,689,865	$	48,066,917		70.60	%
65% to 80%		4,769,919		1,212,262		10,424,266		1,000,506		293,872		-		17,700,825		26.00	%
Greater than 80%		-		2,313,292		-		-		-		-		2,313,292		3.40	%

Total	$	8,643,919	$	22,168,599	$	14,312,780	$	13,800,506	$	465,365	$	8,689,865	$	68,081,034		100.00	%

DSCR
>1.20x	$	-	$	295,500	$	9,991,610	$	7,500,000	$	-	$	5,227,181	$	23,014,291		33.80	%
1.00x - 1.20x		8,643,919		17,498,099		4,321,170		6,300,506		465,365		343,289		37,572,348		55.19	%
<1.00x		-		4,375,000		-		-		-		3,119,395		7,494,395		11.01	%

Total	$	8,643,919	$	22,168,599	$	14,312,780	$	13,800,506	$	465,365	$	8,689,865	$	68,081,034		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, 2025:

Credit Quality Indicator	2025		2024		2023		2022		2021		Prior		Total		% of Total
LTV:
Less than 65%	$	34,518,653	$	3,890,144	$	15,600,000	$	462,761	$	810,696	$	8,299,883	$	63,582,137		80.25	%
65% to 80%		3,525,554		10,432,942		1,000,776		293,872		-		-		15,253,144		19.25	%
Greater than 80%		-		-		-		-		396,505		-		396,505		0.50	%

Total	$	38,044,207	$	14,323,086	$	16,600,776	$	756,633	$	1,207,201	$	8,299,883	$	79,231,786		100.00	%

DSCR
>1.20x	$	7,519,000	$	10,000,000	$	7,500,000	$	-	$	-	$	5,292,385	$	30,311,385		38.26	%
1.00x - 1.20x		28,300,207		4,323,086		9,100,776		756,633		1,207,201		3,007,498		46,695,401		58.94	%
<1.00x		2,225,000		-		-		-		-		-		2,225,000		2.81	%

Total	$	38,044,207	$	14,323,086	$	16,600,776	$	756,633	$	1,207,201	$	8,299,883	$	79,231,786		100.00	%

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

June 30, 2026 (Unaudited)

2) 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 June 30, 2026:

Credit Quality Indicator	2026		2025		2024		2023		2022		Prior		Total		% of Total
Performance Indicators:
Performing	$	5,772,823	$	7,880,037	$	10,015,937	$	7,383,847	$	33,701,203	$	12,918,223	$	77,672,070		90.35	%
Non-performing (1)		352,867		1,468,575		1,670,630		2,088,256		992,234		1,719,224		8,291,786		9.65	%

Total	$	6,125,690	$	9,348,612	$	11,686,567	$	9,472,103	$	34,693,437	$	14,637,447	$	85,963,856		100.00	%

(1)	Includes residential mortgage loans in the process of foreclosure of $1,053,434

LTV:
Less than 65%	$	1,797,451	$	2,082,485	$	6,020,086	$	3,119,207	$	5,241,712	$	8,483,048	$	26,743,989	31.11	%
65% to 80%		2,693,202		6,065,619		5,511,619		6,059,879		27,438,602		5,619,593		53,388,514	62.11	%
Greater than 80%		1,635,037		1,200,508		154,862		293,017		2,013,123		534,806		5,831,353	6.78	%

Total	$	6,125,690	$	9,348,612	$	11,686,567	$	9,472,103	$	34,693,437	$	14,637,447	$	85,963,856	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, 2025:

Credit Quality Indicator	2025		2024		2023		2022		2021		Prior		Total		% of Total
Performance Indicators:
Performing	$	10,946,252	$	11,711,336	$	10,177,427	$	39,714,697	$	2,264,902	$	12,734,067	$	87,548,681		96.58	%
Non-performing (1)		546,602		927,255		616,430		255,544		-		750,078		3,095,909		3.42	%

Total	$	11,492,854	$	12,638,591	$	10,793,857	$	39,970,241	$	2,264,902	$	13,484,145	$	90,644,590		100.00	%

(1)	Includes residential mortgage loans in the process of foreclosure of $616,430

LTV:	Year 1		Year 2		Year 3		Year 4		Year 5
Less than 65%	$	4,382,324	$	6,054,903	$	4,118,599	$	5,710,475	$	968,377	$	7,259,011	$	28,493,689	31.43	%
65% to 80%		6,673,602		6,428,826		6,380,363		32,514,676		1,296,525		5,688,715		58,982,707	65.07	%
Greater than 80%		436,928		154,862		294,895		1,745,090		-		536,419		3,168,194	3.50	%

Total	$	11,492,854	$	12,638,591	$	10,793,857	$	39,970,241	$	2,264,902	$	13,484,145	$	90,644,590	100.00	%

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

June 30, 2026 (Unaudited)

2) 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 June 30, 2026:

Credit Quality Indicator	2026		2025		2024		2023		2022		Total		% of Total
Performance Indicators:
Performing	$	54,166,000	$	55,395,707	$	24,335,368	$	3,769,201	$	3,025,964	$	140,692,240		100.00	%
Non-performing		-		-		-		-		-		-		0.00	%

Total	$	54,166,000	$	55,395,707	$	24,335,368	$	3,769,201	$	3,025,964	$	140,692,240		100.00	%

LTV:
Less than 65%	$	11,605,814	$	24,371,764	$	22,989,281	$	3,769,201	$	3,025,964	$	65,762,024		46.74	%
65% to 80%		42,560,186		31,023,943		1,346,087		-		-		74,930,216		53.26	%
Greater than 80%		-		-		-		-		-		-		0.00	%

Total	$	54,166,000	$	55,395,707	$	24,335,368	$	3,769,201	$	3,025,964	$	140,692,240		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, 2025:

Credit Quality Indicator	2025		2024		2023		2022		2021		Total		% of Total
Performance Indicators:
Performing	$	105,516,880	$	42,129,717	$	5,820,344	$	-	$	3,931,764	$	157,398,705		100.00	%
Non-performing		-		-		-		-		-		-		0.00	%

Total	$	105,516,880	$	42,129,717	$	5,820,344	$	-	$	3,931,764	$	157,398,705		100.00	%

LTV:
Less than 65%	$	24,286,540	$	20,684,760	$	5,820,344	$	-	$	3,931,764	$	54,723,408		34.77	%
65% to 80%		78,223,502		21,444,957		-		-		-		99,668,459		63.32	%
Greater than 80%		3,006,838		-		-		-		-		3,006,838		1.91	%

Total	$	105,516,880	$	42,129,717	$	5,820,344	$	-	$	3,931,764	$	157,398,705		100.00	%

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

June 30, 2026 (Unaudited)

2) 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 June 30, 2026			As of December 31, 2025
30-59 days past due	$	8,365,826		$	8,444,866
60-89 days past due		3,947,278			3,344,793
Over 90 days past due		5,148,954			4,976,211
Total past due		17,462,058			16,765,870
Current		26,547,452			29,418,129
Total insurance assignments		44,009,510			46,183,999
Allowance for credit losses		(1,476,295	)		(1,676,468	)
Net insurance assignments	$	42,533,215		$	44,507,531

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 - March 31, 2026	$	1,518,047
Change in provision for credit losses (1)		237,329
Charge-offs		(279,081	)
Ending balance - June 30, 2026	$	1,476,295

Beginning balance - March 3, 2025	$	1,517,783
Change in provision for credit losses (1)		257,253
Charge-offs		(294,004	)
Ending balance - June 30, 2025	$	1,481,032

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

	Six Months Ended
Beginning balance - December 31, 2025	$	1,676,468
Change in provision for credit losses (1)		522,156
Charge-offs		(722,329	)
Ending balance - June 30, 2026	$	1,476,295

Beginning balance - December 31, 2024	$	1,536,926
Change in provision for credit losses (1)		551,051
Charge-offs		(606,945	)
Ending balance - June 30, 2025	$	1,481,032

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

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

June 30, 2026 (Unaudited)

2) Investments (Continued)

Variable Interest Entities (“VIE”)

The Company has 50% ownership interests 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 and losses are allocated to the members in accordance with their ownership interests. The investments in all three VIEs are accounted for under the equity method of accounting. The Company classifies distributions received using the cumulative earnings approach.

The following table presents the carrying value of the investments as of the dates indicated:

	As of June 30, 2026		As of December 31, 2025
HHH (1)	$	7,733,769	$	10,530,515
Oquirrh (1)		652,559		887,532
Towns (2)		2,407,618		2,656,616
Total	$	10,793,946	$	14,074,663

(1)	Included in other investments and policy loans on the condensed consolidated balance sheets
(2)	Out of these totals, $1,174,675 and $1,467,058 of which at June 30, 2026, and December 31, 2025, respectively, were included in restricted assets and $1,232,942 and $1,189,558 of which at June 30, 2026, and December 31, 2025, respectively, were 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 Company does not direct 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.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

June 30, 2026 (Unaudited)

2) Investments (Continued)

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:

Schedule of Gain (Loss) on Investments

	2026			2025			2026			2025
	Three Months Ended June 30,						Six Months Ended June 30,
	2026			2025			2026			2025
Fixed maturity securities:
Gross realized gains	$	15,132		$	453		$	40,926		$	1,521
Gross realized losses		(9,495	)		30,029			(87,368	)		(12,257	)
Net credit loss provision		(164,663	)		20,313			(261,210	)		(65,993	)

Equity securities:
Gains (losses) on securities sold		(157,861	)		15,981			(142,139	)		130,108
Unrealized gains on securities held at the end of the period		4,032,384			793,404			3,977,871			1,066,880

Real estate held for investment and sale:
Gross realized gains		845,360			202,389			1,432,332			596,915
Gross realized losses		(15,119	)		-			(50,771	)		-

Other assets:
Gross realized gains		54,701			81,867			55,370			88,392
Gross realized losses		(20,116	)		(1,729	)		(33,940	)		(76,838	)
Total	$	4,580,323		$	1,142,707		$	4,931,071		$	1,728,728

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 include gains and losses from cemetery perpetual care trust investments and the restricted assets of cemeteries and mortuaries and totaled $1,510,457 in net gains and $271,176 in net gains for the three-month periods ended June 30, 2026 and 2025, respectively, and of $1,436,129 in net gains and $485,155 in net gains for the six-month periods ended June 30, 2026 and 2025, respectively.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

June 30, 2026 (Unaudited)

2) Investments (Continued)

Major categories of net investment income were as follows:

	2026			2025			2026			2025
	Three Months Ended June 30,						Six Months Ended June 30,
	2026			2025			2026			2025
Fixed maturity securities available for sale	$	4,690,866		$	4,749,965		$	9,403,510		$	9,414,798
Equity securities		233,674			247,633			441,506			440,263
Mortgage loans held for investment		6,341,825			12,457,357			14,615,885			20,421,897
Real estate held for investment and sale		2,914,081			2,872,566			5,852,000			5,832,278
Policy loans		210,231			235,758			451,739			480,363
Insurance assignments		4,878,392			5,138,214			10,322,623			10,870,365
Other investments		196,965			82,349			512,603			243,835
Cash and cash equivalents		1,195,981			953,618			2,243,217			2,356,252
Gross investment income		20,662,015			26,737,460			43,843,083			50,060,051
Investment expenses		(4,233,114	)		(6,156,472	)		(8,912,834	)		(10,276,439	)
Net investment income	$	16,428,901		$	20,580,988		$	34,930,249		$	39,783,612

Net investment income includes income earned from cemetery perpetual care trust investments and the restricted assets of cemeteries and mortuaries of $231,327 and $220,634 for the three-month periods ended June 30, 2026, and 2025, respectively, and of $438,459 and $367,472 for the six-month periods ended June 30, 2026, and 2025, 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:

Schedule of Accrued Investment Income

	As of June 30, 2026		As of December 31, 2025
Fixed maturity securities available for sale	$	4,201,037	$	4,089,819
Equity securities		18,326		13,169
Mortgage loans held for investment		1,215,560		1,032,964
Real estate held for investment		3,864,979		3,850,958
Other investments		30,917		30,916
Cash and cash equivalents		62,588		36,819
Total accrued investment income	$	9,393,407	$	9,054,645

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

June 30, 2026 (Unaudited)