v3.26.1
Business Segment Information
 6 Months Ended
Jun. 30, 2026
Segment Reporting [Abstract]  
Business Segment Information

16) Business Segment Information

 

Description of Products and Services by Segment

 

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

 

Services and Cost Sharing Policies

 

The accounting policies of the Company’s operating and reportable segments are the same as those described in Part II, Item 8, Note 1 - Significant Accounting Policies of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Intersegment revenues are recorded at cost plus an agreed upon intercompany profit and are eliminated upon consolidation. In addition to revenues, the reportable segments share in business services and costs including personnel expenses, rent, information technology, software, interest expense, and other similar operating costs. These shared services and costs are allocated between the segments using prevailing market rates and other agreed upon allocation methods.

 

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

 

The Company’s operating and reportable segments are business units that are managed separately due to the different products provided and the need to report separately to the various regulatory jurisdictions.

 

Chief Operating Decision Maker (“CODM”)

 

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

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

June 30, 2026 (Unaudited)

 

16) Business Segment Information (Continued)

Schedule of Revenues and Expenses by Reportable Segment 

                 
   For the Three Months Ended June 30, 2026 
   Life   Funeral Home/         
   Insurance   Cemetery   Mortgage   Total 
Revenues:                    
From external sources:                    
Revenue from external customers  $28,704,662   $7,599,588   $25,797,533   $62,101,783 
Net investment income   15,692,590    540,965    195,346    16,428,901 
Gains (losses) on investments and other assets   3,047,602    1,533,457    (736)   4,580,323 
Other revenues   392,765    154,243    268,033    815,041 
Intersegment revenues   1,679,529    84,767    66,745    1,831,041 
Total segment revenues   49,517,148    9,913,020    26,326,921    85,757,089 
                     
Elimination of intersegment revenues                  (1,831,041)
Total consolidated revenues                  83,926,048 
                     
Less:                    
Policyholder benefits and claims   24,317,248    -    -      
Amortization of deferred policy and pre-need acquisition costs and value of business acquired   2,716,063    221,833    -      
Selling, general and administrative expenses:                    
Commissions   324,242    478,614    9,514,070      
Personnel   8,666,571    2,939,810    8,899,596      
Advertising   143,580    140,932    445,833      
Rent and rent related   99,164    36,052    651,190      
Depreciation on property and equipment   209,664    250,390    127,431      
Cost related to funding mortgage loans   -    -    1,610,111      
Data processing and IT related (1)   366,891    99,532    1,036,588      
Premium taxes on insurance premiums and other considerations (1)   692,730    -    -      
Other segment items (1)(2)   2,388,214    1,448,790    2,159,975      
Intersegment expenses (3)   151,513    77,266    1,602,262      
Interest expense   894,049    1,751    208,749      
Costs of goods and services sold-mortuaries and cemeteries   -    1,177,676    -      
Income tax expense   1,900,118    752,166    24,728      
Segment net earnings   6,647,101    2,288,208    46,388    8,981,697 
                     
Net earnings                 $8,981,697 

 

 

(1) Included in other expenses on the condensed consolidated statements of earnings. Data processing and IT related expenses includes various software subscriptions, maintenance, consulting, support and storage fees.
(2) For each reportable segment, other segment items includes:
    Life Insurance - bad debt, insurance expenses, professional service expenses, state insurance department fees, amortization of intangible assets, and certain overhead expenses.
    Funeral Home/Cemetery - bad debt, insurance expenses, professional service expenses, maintenance and utility expenses, property taxes, amortization of intangible assets, and certain overhead expenses.
    Mortgage - bad debt, insurance expenses, professional service expenses, business license and registration fees, dues and subscriptions, amortization expense of mortgage servicing rights, and certain overhead expenses.
(3) For each reportable segment, intersegment expenses includes:
    Life Insurance - mortgage servicing fees and interest expense.
    Funeral Home/Cemetery - rent expense, data processing and IT related expenses, and interest expense.
    Mortgage - rent expense and interest expense.

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

June 30, 2026 (Unaudited)

 

16) Business Segment Information (Continued)

 

                 
   For the Three Months Ended June 30, 2025 
   Life   Funeral Home/         
   Insurance   Cemetery   Mortgage   Total 
Revenues:                    
From external sources:                    
Revenue from external customers  $30,185,854   $7,257,717   $29,485,104   $66,928,675 
Net investment income   19,999,873    465,425    115,690    20,580,988 
Gains (losses) on investments and other assets   873,261    271,176    (1,730)   1,142,707 
Other revenues   465,668    146,243    276,868    888,779 
Intersegment revenues   1,828,343    84,767    74,557    1,987,667 
Total segment revenues   53,352,999    8,225,328    29,950,489    91,528,816 
                     
Elimination of intersegment revenues                  (1,987,667)
Total consolidated revenues                  89,541,149 
                     
Less:                    
Policyholder benefits and claims   25,515,540    -    -      
Amortization of deferred policy and pre-need acquisition costs and value of business acquired   2,720,095    153,412    -      
Selling, general and administrative expenses:                    
Commissions   1,076,858    580,026    11,808,454      
Personnel   8,397,298    2,673,778    11,100,269      
Advertising   126,294    142,609    671,545      
Rent and rent related   78,960    35,956    822,223      
Depreciation on property and equipment   219,873    223,184    155,961      
Cost related to funding mortgage loans   -    -    1,891,789      
Data processing and IT related (1)   312,143    74,406    899,009      
Premium taxes on insurance premiums and other considerations (1)   734,203    -    -      
Other segment items (1)(2)   2,402,646    1,303,824    2,229,404      
Intersegment expenses (3)   159,256    84,485    1,743,926      
Interest expense   993,830    147    299,461      
Costs of goods and services sold-mortuaries and cemeteries   -    1,159,283    -      
Income tax expense (benefit)   2,348,731    429,866    (410,683)     
Segment net earnings (loss)   8,267,272    1,364,352    (1,260,869)   8,370,755 
                     
Net earnings                 $8,370,755 

 

 

(1) Included in other expenses on the condensed consolidated statements of earnings. Data processing and IT related expenses includes various software subscriptions, maintenance, consulting, support and storage fees.
(2) For each reportable segment, other segment items includes:
    Life Insurance - bad debt, insurance expenses, professional service expenses, state insurance department fees, amortization of intangible assets, and certain overhead expenses.
    Funeral Home/Cemetery - bad debt, insurance expenses, professional service expenses, maintenance and utility expenses, property taxes, amortization of intangible assets, and certain overhead expenses.
    Mortgage - bad debt, insurance expenses, professional service expenses, business license and registration fees, dues and subscriptions, amortization expense of mortgage servicing rights, and certain overhead expenses.
(3) For each reportable segment, intersegment expenses includes:
    Life Insurance - mortgage servicing fees and interest expense.
    Funeral Home/Cemetery - rent expense, data processing and IT related expenses, and interest expense.
    Mortgage - rent expense and interest expense.

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

June 30, 2026 (Unaudited)

 

16) Business Segment Information (Continued)

 

                 
   For the Six Months Ended June 30, 2026 
   Life   Funeral Home         
   Insurance   and Cemetery   Mortgage   Total 
Revenues:                    
From external sources:                    
Revenue from external customers  $57,559,916   $15,333,411   $49,287,192   $122,180,519 
Net investment income   33,409,867    1,193,496    326,886    34,930,249 
Gains on investments and other assets   3,430,116    1,459,129    41,826    4,931,071 
Other revenues   767,817    314,885    530,287    1,612,989 
Intersegment revenues   3,202,675    168,603    139,051    3,510,329 
Total segment revenues   98,370,391    18,469,524    50,325,242    167,165,157 
                     
Elimination of intersegment revenues                  (3,510,329)
Total consolidated revenues                  163,654,828 
                     
Less:                    
Policyholder benefits and claims   48,856,645    -    -      
Amortization of deferred policy and pre-need acquisition costs and value of business acquired   5,405,437    511,777    -      
Selling, general and administrative expenses:                    
Commissions   797,068    716,823    17,596,895      
Personnel   17,405,428    5,672,880    18,029,305      
Advertising   234,484    242,869    990,055      
Rent and rent related   193,539    73,955    1,341,189      
Depreciation on property and equipment   423,223    491,616    252,736      
Cost related to funding mortgage loans   -    -    3,284,088      
Data processing and IT related (1)   721,710    188,199    2,067,857      
Premium taxes on insurance premiums and other considerations (1)   1,352,345    -    -      
Other segment items (1)(2)   4,737,527    2,810,840    4,033,438      
Intersegment expenses (3)   307,654    157,355    3,045,320      
Interest expense   1,786,826    2,459    311,463      
Costs of goods and services sold-mortuaries and cemeteries   -    2,411,125    -      
Income tax expense (benefit)   3,563,406    1,270,863    (106,365)     
Segment net earnings (loss)   12,585,099    3,918,763    (520,739)   15,983,123 
                     
Net earnings                 $15,983,123 
                     
Segment assets  $1,423,062,141   $110,989,273   $96,186,799   $1,630,238,213 
                     
Elimination of intersegment assets                  (20,923,245)
Total consolidated assets                 $1,609,314,968 
                     
Expenditures for long-lived assets  $45,649,313   $435,969   $47,766   $46,133,048 

 

 

(1) Included in other expenses on the condensed consolidated statements of earnings. Data processing and IT related expenses includes various software subscriptions, maintenance, consulting, support and storage fees.
(2) For each reportable segment, other segment items includes:
    Life Insurance - bad debt, insurance expenses, professional service expenses, state insurance department fees, amortization of intangible assets, and certain overhead expenses.
    Funeral Home and Cemetery - bad debt, insurance expenses, professional service expenses, maintenance and utility expenses, property taxes, amortization of intangible assets, and certain overhead expenses.
    Mortgage - bad debt, insurance expenses, professional service expenses, business license and registration fees, dues and subscriptions, amortization expense of mortgage servicing rights, and certain overhead expenses.
(3) For each reportable segment, intersegment expenses includes:
    Life Insurance - mortgage servicing fees and interest expense.
    Funeral Home and Cemetery - rent expense, data processing and IT related expenses, and interest expense.
    Mortgage - rent expense and interest expense.

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

June 30, 2026 (Unaudited)

 

16) Business Segment Information (Continued)

 

                 
   For the Six Months Ended June 30, 2025 
   Life   Funeral Home         
   Insurance   and Cemetery   Mortgage   Total 
Revenues:                    
From external sources:                    
Revenue from external customers  $59,965,379   $14,557,938   $54,294,345   $128,817,662 
Net investment income   38,630,818    886,678    266,116    39,783,612 
Gains on investments and other assets   1,163,795    481,146    83,787    1,728,728 
Other revenues   1,051,266    334,093    565,511    1,950,870 
Intersegment revenues   3,148,266    168,603    196,425    3,513,294 
Total segment revenues   103,959,524    16,428,458    55,406,184    175,794,166 
                     
Elimination of intersegment revenues                  (3,513,294)
Total consolidated revenues                  172,280,872 
                     
Less:                    
Policyholder benefits and claims   50,970,714    -    -      
Amortization of deferred policy and pre-need acquisition costs and value of business acquired   5,343,129    327,377    -      
Selling, general and administrative expenses:                    
Commissions   1,939,201    788,446    21,176,072      
Personnel   16,923,486    5,211,804    22,218,463      
Advertising   226,270    294,218    1,243,905      
Rent and rent related   178,750    73,994    1,673,006      
Depreciation on property and equipment   462,685    435,545    315,923      
Cost related to funding mortgage loans   -    -    3,307,041      
Data processing and IT related (1)   547,931    144,932    1,777,119      
Premium taxes on insurance premiums and other considerations (1)   1,452,274    -    -      
Other segment items (1)(2)   5,027,184    2,535,034    3,871,848      
Intersegment expenses (3)   364,814    171,926    2,976,554      
Interest expense   1,900,277    310    512,379      
Costs of goods and services sold-mortuaries and cemeteries   -    2,412,553    -      
Income tax expense (benefit)   4,133,938    964,710    (894,136)     
Segment net earnings (loss)   14,488,871    3,067,609    (2,771,990)   14,784,490 
                     
Net earnings                 $14,784,490 
                     
Segment assets  $1,392,400,255   $101,407,961   $86,674,977   $1,580,483,193 
                     
Elimination of intersegment assets                  (26,857,765)
Total consolidated assets                 $1,553,625,428 
                     
Expenditures for long-lived assets  $38,588,008   $535,256   $253,231   $39,376,495 

 

 

(1) Included in other expenses on the condensed consolidated statements of earnings. Data processing and IT related expenses includes various software subscriptions, maintenance, consulting, support and storage fees.
(2) For each reportable segment, other segment items includes:
    Life Insurance - bad debt, insurance expenses, professional service expenses, state insurance department fees, amortization of intangible assets, and certain overhead expenses.
    Funeral Home and Cemetery - bad debt, insurance expenses, professional service expenses, maintenance and utility expenses, property taxes, amortization of intangible assets, and certain overhead expenses.
    Mortgage - bad debt, insurance expenses, professional service expenses, business license and registration fees, dues and subscriptions, amortization expense of mortgage servicing rights, and certain overhead expenses.
(3) For each reportable segment, intersegment expenses includes:
    Life Insurance - mortgage servicing fees and interest expense.
    Funeral Home and Cemetery - rent expense, data processing and IT related expenses, and interest expense.
    Mortgage - rent expense and interest expense.

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

June 30, 2026 (Unaudited)