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Investments

9 Months Ended

Sep. 30, 2024

Investments, Debt and Equity Securities [Abstract]

3) Investments

The Company’s investments as of September 30, 2024 are summarized as follows:

Schedule of Investments

	Amortized Cost			Gross Unrealized Gains		Gross Unrealized Losses (1)			Allowance for Credit Losses			Estimated Fair Value
September 30, 2024:
Fixed maturity securities, available for sale, at estimated fair value:
U.S. Treasury securities and obligations of U.S. Government agencies	$	76,328,048		$	1,233,362	$	(451,493	)	$	-		$	77,109,917

Obligations of states and political subdivisions		5,940,034			19,228		(145,441	)		-			5,813,821

Corporate securities including public utilities		230,885,585			6,223,923		(3,885,889	)		(402,553	)		232,821,066

Mortgage-backed securities		33,740,031			361,640		(3,571,090	)		(12,049	)		30,518,532

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

Total fixed maturity securities available for sale	$	347,143,698		$	7,838,153	$	(8,053,913	)	$	(414,602	)	$	346,513,336

Equity securities at estimated fair value:

Common stock:

Industrial, miscellaneous and all other	$	11,357,095		$	5,299,178	$	(270,702	)				$	16,385,571

Total equity securities at estimated fair value	$	11,357,095		$	5,299,178	$	(270,702	)				$	16,385,571

Mortgage loans held for investment at amortized cost:
Residential	$	88,452,336
Residential construction		130,683,596
Commercial		66,462,554
Less: Unamortized deferred loan fees, net		(1,978,564	)
Less: Allowance for credit losses		(1,579,746	)
Less: Net discounts		(305,994	)

Total mortgage loans held for investment	$	281,734,182

Real estate held for investment - net of accumulated depreciation:
Residential	$	73,610,520
Commercial		126,880,036

Total real estate held for investment	$	200,490,556

Real estate held for sale:
Residential	$	849,900
Commercial		151,553

Total real estate held for sale	$	1,001,453

Other investments and policy loans at amortized cost:
Policy loans	$	13,735,282
Insurance assignments		45,954,394
Federal Home Loan Bank stock (2)		2,378,200
Other investments		9,692,608
Less: Allowance for credit losses for insurance assignments		(1,540,835	)

Total other investments and policy loans	$	70,219,649

Accrued investment income	$	7,860,824

Total investments	$	924,205,571

(1)	Gross unrealized losses are net of allowance for credit losses

(2)	Includes $553,900 of Membership stock and $1,824,300 of Activity stock attributable to short-term borrowings and letters of credit.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2024 (Unaudited)

3) Investments (Continued)

The Company’s investments as of December 31, 2023 are summarized as follows:

	Amortized Cost			Gross Unrealized Gains		Gross Unrealized Losses (1)			Allowance for Credit Losses			Estimated Fair Value
December 31, 2023:
Fixed maturity securities, available for sale, at estimated fair value:
U.S. Treasury securities and obligations of U.S. Government agencies	$	111,450,753		$	344,425	$	(1,416,448	)	$	-		$	110,378,730

Obligations of states and political subdivisions		6,524,083			500		(319,260	)		-			6,205,323

Corporate securities including public utilities		232,299,727			3,688,642		(7,145,507	)		(308,500	)		228,534,362

Mortgage-backed securities		40,359,878			506,647		(4,702,905	)		(6,049	)		36,157,571

Redeemable preferred stock		250,000			10,000		-			-			260,000

Total fixed maturity securities available for sale	$	390,884,441		$	4,550,214	$	(13,584,120	)	$	(314,549	)	$	381,535,986

Equity securities at estimated fair value:

Common stock:

Industrial, miscellaneous and all other	$	10,571,505		$	3,504,141	$	(439,575	)				$	13,636,071

Total equity securities at estimated fair value	$	10,571,505		$	3,504,141	$	(439,575	)				$	13,636,071

Mortgage loans held for investment at amortized cost:
Residential	$	103,153,587
Residential construction		104,052,748
Commercial		74,176,538
Less: Unamortized deferred loan fees, net		(1,623,226	)
Less: Allowance for credit losses		(3,818,653	)
Less: Net discounts		(324,157	)

Total mortgage loans held for investment	$	275,616,837

Real estate held for investment - net of accumulated depreciation:
Residential	$	40,924,865
Commercial		142,494,427

Total real estate held for investment	$	183,419,292

Real estate held for sale:
Residential	$	-
Commercial		3,028,973

Total real estate held for sale	$	3,028,973

Other investments and policy loans at amortized cost:
Policy loans	$	13,264,183
Insurance assignments		45,605,322
Federal Home Loan Bank stock (2)		2,279,800
Other investments		9,809,148
Less: Allowance for credit losses for insurance assignments		(1,553,836	)

Total policy loans and other investments	$	69,404,617

Accrued investment income	$	10,170,790

Total investments	$	936,812,566

(1)	Gross unrealized losses are net of allowance for credit losses

(2)	Includes $530,900 of Membership stock and $1,748,900 of Activity stock due to short-term advances and letters of credit.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2024 (Unaudited)

3) Investments (Continued)

There were no investments, aggregated by issuer, of more than 10% of shareholders’ equity (before net unrealized gains and losses on equity securities and fixed maturity securities) as of September 30, 2024, other than investments issued or guaranteed by the United States Government.

Fixed Maturity Securities

The table below summarizes unrealized losses on fixed maturity securities available for sale that were carried at estimated fair value as of September 30, 2024 and December 31, 2023. The fair values of fixed maturity securities are based on quoted market prices, when available. For fixed maturity securities not actively traded, fair values are estimated using values obtained from independent pricing services, or in the case of private placements, are estimated by discounting expected future cash flows using a current market value applicable to the coupon rate, credit and maturity of the investments. The table below sets forth unrealized losses by duration with the fair value of the related fixed maturity securities.

	Unrealized Losses for Less than Twelve Months		Fair Value		Unrealized Losses for More than Twelve Months		Fair Value		Total Unrealized Loss		Combined Fair Value
September 30, 2024
U.S. Treasury securities and obligations of U.S. Government agencies	$	534	$	4,411,131	$	450,959	$	22,087,838	$	451,493	$	26,498,969
Obligations of states and political subdivisions		-		-		145,441		4,162,052		145,441		4,162,052
Corporate securities		171,711		15,096,035		3,714,178		83,653,386		3,885,889		98,749,421
Mortgage-backed securities		5,712		695,868		3,565,378		19,827,317		3,571,090		20,523,185
Totals	$	177,957	$	20,203,034	$	7,875,956	$	129,730,593	$	8,053,913	$	149,933,627

December 31, 2023
U.S. Treasury securities and obligations of U.S. Government agencies	$	29,394	$	9,436,090	$	1,387,054	$	70,885,403	$	1,416,448	$	80,321,493
Obligations of states and political subdivisions		11,105		470,325		308,155		5,284,498		319,260		5,754,823
Corporate securities		529,660		32,507,773		6,615,847		107,556,216		7,145,507		140,063,989
Mortgage-backed securities		29,799		2,260,445		4,673,106		22,184,174		4,702,905		24,444,619
Totals	$	599,958	$	44,674,633	$	12,984,162	$	205,910,291	$	13,584,120	$	250,584,924

Relevant holdings were comprised of 433 securities with fair values aggregating 94.9% of the aggregate amortized cost as of September 30, 2024. Relevant holdings were comprised of 606 securities with fair values aggregating 94.9% of the aggregate amortized cost as of December 31, 2023. Credit loss provision of $20,342 and credit loss release of $1,741 have been recognized for the three month periods ended September 30, 2024 and 2023, respectively. Credit loss provision of $100,053 and $222,264 have been recognized for the nine month periods ended September 30, 2024 and 2023, respectively. Credit losses are included in gains (losses) on investments and other assets on the condensed consolidated statements of earnings. Other unrealized losses for which no credit loss was recognized are primarily the result of increases in interest rates.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2024 (Unaudited)

3) Investments (Continued)

Evaluation of Allowance for Credit Losses

See Note 2 regarding the adoption of ASU 2016-13.

On a quarterly basis, the Company evaluates its fixed maturity securities classified as available for sale 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 a rating of 1 or 2 are considered investment grade and are not reviewed for credit loss unless current market data or recent company news could lead to a credit downgrade. Securities with ratings of 3 to 5 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 interest and principal 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 debt security and it is less likely than not that the Company will be required to sell the debt 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 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 measure a credit loss allowance on accrued interest receivable, included in accrued investment income on the condensed consolidated balance sheets, as the Company writes off any accrued interest receivable balance to net investment income in a timely manner (after 90 days) when the Company has concerns regarding collectability.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2024 (Unaudited)

3) Investments (Continued)

Credit Quality Indicators

The NAIC assigns designations to fixed maturity securities. These designations range from Class 1 (highest quality) to Class 6 (lowest quality). The NAIC designations are utilized by insurers in preparing their annual statutory statements. NAIC Class 1 and 2 are considered investment grade while the NAIC Class 3 through 6 designations are considered non-investment grade. Based on the NAIC designations, the Company had 97.9% and 98.2% of its fixed maturity securities rated investment grade as of September 30, 2024 and December 31, 2023, respectively. The following table summarizes the credit quality, by NAIC designation, of the Company’s fixed maturity securities available for sale, excluding redeemable preferred stock.

	September 30, 2024				December 31, 2023
NAIC Designation	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
1	$	176,865,129	$	176,303,283	$	221,933,425	$	216,975,288
2		162,142,176		162,728,124		161,062,016		157,346,803
3		6,534,603		6,134,808		6,418,829		5,953,542
4		1,104,422		1,048,370		982,290		948,478
5		246,186		48,750		236,648		51,875
6		1,182		1		1,233		-
Total	$	346,893,698	$	346,263,336	$	390,634,441	$	381,275,986

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


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

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

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

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


	Three Months Ended September 30, 2023
	U.S. Treasury securities and obligations of U.S. Government agencies		Obligations of states and political subdivisions		Corporate securities including public utilities			Mortgage-backed securities		Total

Beginning balance - June 30, 2023	$	-	$	-	$	224,005		$	-	$	224,005

Additions for credit losses not previously recorded		-		-		-			-		-
Change in allowance on securities with previous allowance		-		-		(1,741	)		-		(1,741	)
Reductions for securities sold during the period		-		-		(10,764	)		-		(10,764	)
Reductions for securities with credit losses due to intent to sell		-		-		-			-		-
Write-offs charged against the allowance		-		-		-			-		-
Recoveries of amounts previously written off		-		-		-			-		-

Ending Balance - September 30, 2023	$	-	$	-	$	211,500		$	-	$	211,500

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2024 (Unaudited)

3) Investments (Continued)

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


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

Beginning balance - January 1, 2024	$	-	$	-	$	308,500	$	6,049	$	314,549

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

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


	Nine Months Ended September 30, 2023
	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 - January 1, 2023	$	-	$	-	$	-		$	-	$	-
Balance	$	-	$	-	$	-		$	-	$	-

Additions for credit losses not previously recorded		-		-		179,500			-		179,500
Change in allowance on securities with previous allowance		-		-		42,764			-		42,764
Reductions for securities sold during the period		-		-		(10,764	)		-		(10,764	)
Reductions for securities with credit losses due to intent to sell		-		-		-			-		-
Write-offs charged against the allowance		-		-		-			-		-
Recoveries of amounts previously written off		-		-		-			-		-

Ending Balance - September 30, 2023	$	-	$	-	$	211,500		$	-	$	211,500
Balance	$	-	$	-	$	211,500		$	-	$	211,500

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2024 (Unaudited)

3) Investments (Continued)

The table below presents the amortized cost and the estimated fair value of fixed maturity securities available for sale as of September 30, 2024, by contractual maturity. Actual or expected maturities may differ from contractual maturities because certain borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized Cost		Estimated Fair Value
Due in 1 year	$	7,981,489	$	7,842,911
Due in 2-5 years		136,017,903		136,085,053
Due in 5-10 years		103,303,678		106,137,140
Due in more than 10 years		65,850,597		65,679,700
Mortgage-backed securities		33,740,031		30,518,532
Redeemable preferred stock		250,000		250,000
Total	$	347,143,698	$	346,513,336

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

	2024			2023			2024			2023
	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Proceeds from sales	$	181,949		$	207,522		$	789,190		$	1,163,132
Gross realized gains		-			-			2,714			11,257
Gross realized losses		(20,666	)		(3,368	)		(1,522	)		(57,472	)

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2024 (Unaudited)

3) Investments (Continued)

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

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

	As of September 30, 2024		As of December 31, 2023
Fixed maturity securities available for sale at estimated fair value	$	6,402,068	$	6,206,650
Other investments		400,000		400,000
Cash and cash equivalents		1,385,229		1,909,215
Total assets on deposit	$	8,187,297	$	8,515,865

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

	As of September 30, 2024		As of December 31, 2023
Fixed maturity securities available for sale at estimated fair value	$	26,907,601	$	27,903,952
Cash and cash equivalents		3,427,980		2,101,052
Total assets on deposit	$	30,335,581	$	30,005,004

The Company is a member of the Federal Home Loan Bank of Des Moines and Dallas (“FHLB”). Assets pledged as collateral with the FHLB are presented below. These pledged securities are used as collateral for any FHLB cash advances.

	As of September 30, 2024		As of December 31, 2023
Fixed maturity securities available for sale at estimated fair value	$	66,564,387	$	93,903,089
Total assets pledged as collateral	$	66,564,387	$	93,903,089

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 and manages commercial real estate assets as a means of both generating investment income and providing workspace for its employees. These assets are 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 classes of investments are determined by senior management under the direction of the Board of Directors.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2024 (Unaudited)

3) Investments (Continued)

The Company employs full-time employees to attend to the day-to-day operations of those assets 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 will generally acquire assets as a result of company acquisitions or that are in regions expected to have high growth in employment and population and that provide operational efficiencies.

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

The aggregated net book value of commercial real estate serving as collateral for bank loans was $120,756,194 and $124,381,467 as of September 30, 2024 and December 31, 2023, respectively. The associated bank loan carrying values totaled $96,470,650 and $97,807,614 as of September 30, 2024 and December 31, 2023, respectively.

During the three and nine month periods ended September 30, 2024 and 2023, the Company did not record any impairment losses on commercial real estate held for investment or held for sale. Impairment losses, if any, are included in gains (losses) on investment and other assets on the condensed consolidated statements of earnings.

During the three month periods ended September 30, 2024 and 2023, the Company recorded depreciation expense on commercial real estate held for investment of $1,420,367 and $1,572,494, respectively, and of $4,366,462 and $4,715,322 during the nine month periods ended September 30, 2024 and 2023, 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 consolidated statements of earnings.

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

	Net Book Value				Total Square Footage
	September 30, 2024		December 31, 2023		September 30, 2024		December 31, 2023
Utah (1)	$	126,861,284	$	142,475,177		546,941		625,920
Louisiana		18,752		19,250		1,622		1,622

	$	126,880,036	$	142,494,427		548,563		627,542

(1)	Includes Center53

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

	Net Book Value				Total Square Footage
	September 30, 2024 (1)		December 31, 2023		September 30, 2024		December 31, 2023
Mississippi	$	151,553	$	3,028,973		-		19,694

	$	151,553	$	3,028,973		-		19,694

(1)	Consists of approximately 93 acres of undeveloped land

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2024 (Unaudited)

3) Investments (Continued)

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 established Security National Real Estate Services (“SNRE”) to manage its residential property portfolio. SNRE cultivates and maintains the preferred vendor relationships necessary to manage costs and quality of work performed on the Company’s entire residential property portfolio.

During the three and nine month periods ended September 30, 2024 and 2023 the Company did not record any impairment losses on residential real estate held for sale or held for investment. Impairment losses, if any, are included in gains (losses) on investment and other assets on the condensed consolidated statements of earnings.

During the three month periods ended September 30, 2024 and 2023, the Company recorded depreciation expense on residential real estate held for investment of $2,653 and $2,648, respectively, and $7,958 and $7,944 during the nine month periods ended September 30, 2024 and 2023, 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 consolidated statements of earnings.

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

	Net Book Value
	September 30, 2024		December 31, 2023
Utah (1)	$	73,610,520	$	40,924,865
	$	73,610,520	$	40,924,865

(1)	Includes multiple residential subdivision development projects

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

	September 30, 2024		December 31, 2023
Lots developed		35		42
Lots to be developed		1,304		1,145
Book Value	$	73,432,813	$	40,739,201

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

	Net Book Value
	September 30, 2024		December 31, 2023
Utah	$	849,900	$	-
	$	849,900	$	-

The net book value of foreclosed residential real estate included in residential real estate held for sale was $849,900 and nil as of September 30, 2024 and December 31, 2023, respectively.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2024 (Unaudited)

3) Investments (Continued)

Real Estate Owned and Occupied by the Company

The primary business units of the Company occupy a portion of the real estate owned by the Company. As of September 30, 2024, real estate owned and occupied by the Company is summarized as follows:

Location	Business Segment	Approximate Square Footage		Square Footage Occupied by the Company
433 Ascension Way, Floors 4, 5 and 6, Salt Lake City, UT - Center53 Building 2 (1)	Corporate Offices, Life Insurance, Cemetery/Mortuary Operations, and Mortgage Operations and Sales		221,000		50	%
1818 Marshall Street, Shreveport, LA (2)	Life Insurance Operations		12,274		100	%
812 Sheppard Street, Minden, LA (2) (3)	Life Insurance Sales		1,560		100	%

(1)	Included in real estate held for investment on the condensed consolidated balance sheets
(2)	Included in property and equipment on the condensed consolidated balance sheets
(3)	Listed for sale

Mortgage Loans Held for Investment

Mortgage loans held for investment consist of first and second mortgages. The mortgage loans bear interest at rates ranging from 2.0% to 10.5%, maturity dates range from nine months to 30 years and the loans are secured by real estate.

Concentrations of credit risk arise when a number of mortgage loan debtors have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions. Although the Company has a diversified mortgage loan portfolio consisting of residential mortgages, commercial loans and residential construction loans and requires collateral on all real estate exposures, a substantial portion of the relevant debtors’ ability to honor obligations is dependent upon the economic stability of the geographic region in which the debtors do business or are employed. As of September 30, 2024, the Company had 53%, 9%, 7%, 7% and 5%, of its mortgage loans from borrowers located in the states of Utah, Florida, Texas, Arizona, and California, respectively. As of December 31, 2023, the Company had 44%, 11%, 10%, 7% and 6% of its mortgage loans from borrowers located in the states of Utah, Florida, California, Texas, and Arizona respectively.

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

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

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2024 (Unaudited)

3) Investments (Continued)

Evaluation of Allowance for Credit Losses

See Note 2 regarding the adoption of ASU 2016-13.

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

Once a mortgage loan is past due 90 days, it is the policy of the Company to end the accrual of interest income on the loan and reverse any interest income that had been accrued. Given this policy, the Company does not measure a credit loss allowance on accrued interest receivable. Accrued interest receivable is included in accrued investment income on the condensed consolidated balance sheets. Payments received for mortgage loans on a non-accrual status are recognized when received. The interest income recognized from payments received for mortgage loans on a non-accrual status was immaterial. Accrual of interest resumes if a mortgage loan is brought current. Interest not accrued on these loans totaled approximately $297,000 and $237,000 as of September 30, 2024 and December 31, 2023, 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 and all expenses for foreclosure are expensed as incurred. Once foreclosed, the property is classified as real estate held for investment or held for sale.

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

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

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

Residential — These loans are secured by first and second mortgages on single-family dwellings. The borrower’s ability to repay is sensitive to the life events and the general economic condition of the region. Where loan to value 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, loan to value, payment status, age, and current property values. Analyzing the information from the various sources allows the Company to arrive at the allowance for credit losses.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2024 (Unaudited)

3) Investments (Continued)

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

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

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 for 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 - June 30, 2024	$	849,323		$	1,779,386		$	225,143		$	2,853,852
Adoption of ASU 2016-13 (1)		555,807			(192,607	)		301,830			665,030
Change in provision for credit losses (2)		(87,611	)		(127,239	)		36,229			(178,621	)
Charge-offs		-			(1,095,485	)		-			(1,095,485	)
Ending balance - September 30, 2024	$	761,712		$	556,662		$	261,372		$	1,579,746

Beginning balance - June 30, 2023	$	831,055		$	1,589,860		$	242,645		$	2,663,560
Change in provision for credit losses (2)		(20,873	)		10,310			(40,053	)		(50,616	)
Charge-offs		-			-			-			-
Ending balance - September 30, 2023	$	810,182		$	1,600,170		$	202,592		$	2,612,944

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

Beginning balance - January 1, 2023	$	187,129		$	1,739,980		$	43,202		$	1,970,311
Adoption of ASU 2016-13 (1)		555,807			(192,607	)		301,830			665,030
Change in provision for credit losses (2)		67,246			52,797			(142,440	)		(22,397	)
Charge-offs		-			-			-			-
Ending balance - September 30, 2023	$	810,182		$	1,600,170		$	202,592		$	2,612,944

(1)	See Note 2 of the notes to the condensed consolidated financial statements
(2)	Included in other expenses on the condensed consolidated statements of earnings

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2024 (Unaudited)

3) 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
September 30, 2024
30-59 days past due	$	-		$	6,252,738		$	-		$	6,252,738
60-89 days past due		-			1,299,663			-			1,299,663
Over 90 days past due (1)		3,555,000			2,183,008			-			5,738,008
In process of foreclosure (1)		191,508			3,516,610			-			3,708,118
Total past due		3,746,508			13,252,019			-			16,998,527
Current		62,716,046			75,200,317			130,683,596			268,599,959
Total mortgage loans		66,462,554			88,452,336			130,683,596			285,598,486
Allowance for credit losses		(761,712	)		(556,662	)		(261,372	)		(1,579,746	)
Unamortized deferred loan fees, net		(94,848	)		(1,194,377	)		(689,339	)		(1,978,564	)
Unamortized discounts, net		(152,838	)		(153,156	)		-			(305,994	)
Net mortgage loans held for investment	$	65,453,156		$	86,548,141		$	129,732,885		$	281,734,182

December 31, 2023
30-59 days past due	$	-		$	3,387,673		$	-		$	3,387,673
60-89 days past due		-			3,472,760			-			3,472,760
Over 90 days past due (1)		405,000			3,480,931			-			3,885,931
In process of foreclosure (1)		1,241,508			1,021,790			-			2,263,298
Total past due		1,646,508			11,363,154			-			13,009,662
Current		72,530,030			91,790,433			104,052,748			268,373,211
Total mortgage loans		74,176,538			103,153,587			104,052,748			281,382,873
Allowance for credit losses		(1,219,653	)		(2,390,894	)		(208,106	)		(3,818,653	)
Unamortized deferred loan fees, net		(172,989	)		(1,135,491	)		(314,746	)		(1,623,226	)
Unamortized discounts, net		(216,705	)		(107,452	)		-			(324,157	)
Net mortgage loans held for investment	$	72,567,191		$	99,519,750		$	103,529,896		$	275,616,837

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

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2024 (Unaudited)

3) Investments (Continued)

Credit Quality Indicators

The Company evaluates and monitors the credit quality of its commercial loans by analyzing loan to value (“LTV”) and debt service coverage ratios (“DSCR”). Monitoring a commercial mortgage loan increases when the loan is delinquent or earlier if there is an indication of impairment.

The aggregate unpaid principal balance of commercial mortgage loans by credit quality indicator and origination year was as follows as of September 30, 2024:

Credit Quality Indicator	2024		2023		2022		2021		2020		Prior		Total		% of Total
LTV:
Less than 65%	$	5,604,700	$	27,454,450	$	2,828,743	$	3,020,636	$	-	$	9,138,597	$	48,047,126		72.29	%
65% to 80%		10,432,942		1,840,776		823,397		-		4,913,313		-		18,010,428		27.10	%
Greater than 80%		-		-		-		405,000		-		-		405,000		0.61	%

Total	$	16,037,642	$	29,295,226	$	3,652,140	$	3,425,636	$	4,913,313	$	9,138,597	$	66,462,554		100.00	%

DSCR
>1.20x	$	15,604,700	$	20,990,000	$	1,000,000	$	-	$	4,913,313	$	5,459,400	$	47,967,413		72.17	%
1.00x - 1.20x		432,942		8,305,226		2,652,140		3,425,636		-		3,679,197		18,495,141		27.83	%
<1.00x		-		-		-		-		-		-		-		0.00	%

Total	$	16,037,642	$	29,295,226	$	3,652,140	$	3,425,636	$	4,913,313	$	9,138,597	$	66,462,554		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, 2023:

Credit Quality Indicator	2023		2022			2021		2020		2019		Prior		Total		% of Total
LTV:
Less than 65%	$	34,304,954	$	13,555,737		$	3,778,248	$	-	$	2,964,740	$	6,565,389	$	61,169,068		82.46	%
65% to 80%		1,523,926		5,115,231			1,050,000		4,913,313		-		-		12,602,470		16.99	%
Greater than 80%		-		-			405,000		-		-		-		405,000		0.55	%

Total	$	35,828,880	$	18,670,968		$	5,233,248	$	4,913,313	$	2,964,740	$	6,565,389	$	74,176,538		100.00	%

DSCR
>1.20x	$	20,990,000	$	1,000,000		$	700,000	$	4,913,313	$	2,964,740	$	2,612,625	$	33,180,678		44.73	%
1.00x - 1.20x		8,338,880		8,496,127			3,483,248		-		-		3,952,764		24,271,019		32.72	%
<1.00x		6,500,000		9,174,841⁽¹⁾	(1)		1,050,000		-		-		-		16,724,841		22.55	%

Total	$	35,828,880	$	18,670,968		$	5,233,248	$	4,913,313	$	2,964,740	$	6,565,389	$	74,176,538		100.00	%

(1)	Commercial construction loan

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2024 (Unaudited)

3) Investments (Continued)

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

The aggregate unpaid principal balance of residential mortgage loans by credit quality indicator and origination year was as follows as of September 30, 2024:

Credit Quality Indicator	2024		2023		2022		2021		2020		Prior		Total		% of Total
Performance Indicators:
Performing	$	8,179,852	$	11,232,976	$	44,202,986	$	3,379,192	$	5,902,895	$	9,854,817	$	82,752,718		93.56	%
Non-performing (1)		-		2,819,075		541,333		684,478		588,864		1,065,868		5,699,618		6.44	%

Total	$	8,179,852	$	14,052,051	$	44,744,319	$	4,063,670	$	6,491,759	$	10,920,685	$	88,452,336		100.00	%

(1)	Includes residential mortgage loans in the process of foreclosure of $3,516,610


LTV:
Less than 65%	$	2,624,800	$	5,055,179	$	5,981,284	$	1,796,124	$	2,452,998	$	5,348,470	$	23,258,855	26.30	%
65% to 80%		5,555,052		8,806,209		37,672,607		1,948,129		3,351,111		5,504,578		62,837,686	71.04	%
Greater than 80%		-		190,663		1,090,428		319,417		687,650		67,637		2,355,795	2.66	%

Total	$	8,179,852	$	14,052,051	$	44,744,319	$	4,063,670	$	6,491,759	$	10,920,685	$	88,452,336	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, 2023:

Credit Quality Indicator	2023		2022		2021		2020		2019		Prior		Total		% of Total
Performance Indicators:
Performing	$	15,337,828	$	53,875,389	$	7,156,934	$	7,453,796	$	2,786,562	$	12,040,357	$	98,650,866		95.63	%
Non-performing (1)		-		2,202,114		365,061		613,101		-		1,322,445		4,502,721		4.37	%

Total	$	15,337,828	$	56,077,503	$	7,521,995	$	8,066,897	$	2,786,562	$	13,362,802	$	103,153,587		100.00	%

(1)	Includes residential mortgage loans in the process of foreclosure of $1,021,790


LTV:
Less than 65%	$	3,280,144	$	7,049,522	$	1,843,286	$	1,746,970	$	446,675	$	5,206,095	$	19,572,692	18.97	%
65% to 80%		10,962,770		44,371,320		4,269,894		4,222,170		2,339,887		5,711,440		71,877,481	69.68	%
Greater than 80%		1,094,914		4,656,661		1,408,815		2,097,757		-		2,445,267		11,703,414	11.35	%

Total	$	15,337,828	$	56,077,503	$	7,521,995	$	8,066,897	$	2,786,562	$	13,362,802	$	103,153,587	100.00	%

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2024 (Unaudited)

3) Investments (Continued)

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

The aggregate unpaid principal balance of residential construction mortgage loans by credit quality indicator and origination year was as follows as of September 30, 2024:

Credit Quality Indicator	2024		2023		2022		2021		Total		% of Total
Performance Indicators:
Performing	$	93,115,744	$	24,076,981	$	2,084,366	$	11,406,505	$	130,683,596		100.00	%
Non-performing		-		-		-		-		-		0.00	%

Total	$	93,115,744	$	24,076,981	$	2,084,366	$	11,406,505	$	130,683,596		100.00	%

LTV:
Less than 65%	$	35,065,417	$	22,918,540	$	1,630,488	$	11,406,505	$	71,020,950		54.35	%
65% to 80%		57,429,690		1,158,441		453,878		-		59,042,009		45.18	%
Greater than 80%		620,637		-		-		-		620,637		0.47	%

Total	$	93,115,744	$	24,076,981	$	2,084,366	$	11,406,505	$	130,683,596		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, 2023:

Credit Quality Indicator	2023		2022		2021		Total		% of Total
Performance Indicators:
Performing	$	60,311,679	$	16,624,182	$	27,116,887	$	104,052,748		100.00	%
Non-performing		-		-		-		-		0.00	%

Total	$	60,311,679	$	16,624,182	$	27,116,887	$	104,052,748		100.00	%

LTV:
Less than 65%	$	40,215,360	$	8,732,500	$	20,442,302	$	69,390,162		66.69	%
65% to 80%		20,096,319		7,891,682		6,674,585		34,662,586		33.31	%
Greater than 80%		-		-		-		-		0.00	%

Total	$	60,311,679	$	16,624,182	$	27,116,887	$	104,052,748		100.00	%

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2024 (Unaudited)

3) Investments (Continued)

Insurance Assignments

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

	As of September 30, 2024			As of December 31, 2023
30-59 days past due	$	9,571,073		$	10,829,629
60-89 days past due		3,593,162			3,709,754
Over 90 days past due		5,430,234			4,329,468
Total past due		18,594,469			18,868,851
Current		27,359,925			26,736,471
Total insurance assignments		45,954,394			45,605,322
Allowance for credit losses		(1,540,835	)		(1,553,836	)
Net insurance assignments	$	44,413,559		$	44,051,486

The Company records an allowance for credit losses when the insurance assignment is funded. Once an insurance assignment moves to 90 days or legal proceedings, it is monitored for write-off and collectability, and any adjustments to the allowance are recorded at that time. See Note 2 regarding the adoption of ASU 2016-13.

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

Schedule of Allowance for Credit Losses

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

Beginning balance - June 30, 2023	$	1,690,693
Change in provision for credit losses (1)		214,934
Charge-offs		(350,366	)
Ending balance - September 30, 2023	$	1,555,261

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

Beginning balance - January 1, 2023	$	1,609,951
Change in provision for credit losses (1)		667,260
Charge-offs		(721,950	)
Ending balance - September 30, 2023	$	1,555,261

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

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2024 (Unaudited)

3) 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

	2024			2023			2024			2023
	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Fixed maturity securities:
Gross realized gains	$	7,929		$	37,565		$	13,120		$	54,619
Gross realized losses		(43,184	)		(10,383	)		(61,539	)		(102,182	)
Net credit loss release (provision)		(20,342	)		1,740			(100,053	)		(222,264	)

Equity securities:
Gains (losses) on securities sold		708			324,009			(16,662	)		277,057
Unrealized gains (losses) on securities held at the end of the period		2,415,881			(1,321,511	)		3,534,285			(423,448	)

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

Real estate held for investment and sale:
Gross realized gains		71,622			36,166			360,474			197,194
Gross realized losses		-			-			-			-

Other assets:
Gross realized gains		95,690			-			92,095			214,348
Gross realized losses		(19,284	)		-			(20,513	)		-
Total	$	1,347,656		$	(932,414	)	$	2,639,843		$	(4,676	)

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

Net realized gains and losses includes gains and losses by the cemetery perpetual care trust investments and the restricted assets and of the cemeteries and mortuaries of $1,140,136 and $452,115 in net gains for the three month periods ended September 30, 2024 and 2023, respectively, and of $1,519,487 and $200,605 in net gains for the nine month periods ended September 30, 2024 and 2023, respectively.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2024 (Unaudited)

3) Investments (Continued)

Major categories of net investment income were as follows:

	2024			2023			2024			2023
	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Fixed maturity securities available for sale	$	4,301,241		$	4,242,185		$	13,050,503		$	12,398,685
Equity securities		171,767			167,348			516,363			448,564
Mortgage loans held for investment		7,032,201			9,842,845			22,867,797			27,797,908
Real estate held for investment and sale		3,093,459			3,291,047			9,893,539			11,553,643
Policy loans		225,393			191,843			715,791			599,498
Insurance assignments		5,009,043			4,340,644			14,971,607			13,570,659
Other investments		272,062			213,560			672,363			555,720
Cash and cash equivalents		1,700,898			1,083,241			5,107,765			2,651,148
Gross investment income		21,806,064			23,372,713			67,795,728			69,575,825
Investment expenses		(4,006,968	)		(4,124,250	)		(12,005,256	)		(12,380,505	)
Net investment income	$	17,799,096		$	19,248,463		$	55,790,472		$	57,195,320

Net investment income includes income earned by the cemetery perpetual care trust investments and the restricted assets of the cemeteries and mortuaries of $393,811 and $372,277 for the three month periods ended September 30, 2024 and 2023, respectively, and of $1,798,170 and $2,224,629 for the nine month periods ended September 30, 2024 and 2023, 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 September 30, 2024		As of December 31, 2023
Fixed maturity securities available for sale	$	3,798,114	$	3,984,695
Equity securities		9,437		20,451
Mortgage loans held for investment		949,979		2,661,092
Real estate held for investment		3,011,035		3,486,115
Cash and cash equivalents		92,259		18,437
Total accrued investment income	$	7,860,824	$	10,170,790

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2024 (Unaudited)