v3.26.1
Investments (Tables)
 6 Months Ended
Jun. 30, 2026
Investments, Debt and Equity Securities [Abstract]  
Schedule of Investments

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

 

   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.
Schedule of Fair Value of 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 
Schedule of Credit Quality of Fixed Maturity Security Portfolio by NAIC Designation

 

   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 
Schedule of Allowance for Credit Losses on Fixed Maturity Securities Available for Sale

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 
                          
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 

 
Schedule of Investments Classified by Contractual Maturity Date

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 
Schedule of Major Categories of Net Investment Income

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)
Schedule of Assets on Deposit with Life Insurance

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 
Schedule of Commercial Real Estate Investment

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
Schedule of 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    50%
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
Schedule of Residential Real Estate Investment

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 
Schedule of Mortgage Loans Held for Investment

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%
Schedule of Allowance for Loan Losses

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

 

   Three Months Ended 
   Commercial   Residential   Residential Construction   Total 
Beginning balance - 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
Schedule of Commercial and Residential Mortgage Loans By Credit Quality Indicator

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

 

   Commercial   Residential  

Residential

Construction

   Total 
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%
Schedule of Commercial and Residential Mortgage Loans By Credit Quality Indicator

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%
Schedule of Residential Construction Mortgage Loans

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%
Schedule of Aging of 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 
Schedule of Allowance for Credit Losses for Insurance Assignments

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
Schedule of Carrying Value of Investments

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
Schedule of Gain (Loss) on Investments

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:

 

   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 
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 
 
Schedule of Accrued Investment Income

Accrued investment income consists of the following:

 

  

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