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Investments
 9 Months Ended
Sep. 30, 2025
Investments, Debt and Equity Securities [Abstract]  
Investments

3) Investments

 

The Company’s investments as of September 30, 2025, are summarized as follows:

 

   Amortized Cost   Gross Unrealized Gains   Gross Unrealized Losses (1)   Allowance for Credit Losses   Estimated Fair Value 
September 30, 2025:                         
Fixed maturity securities, available for sale, at estimated fair value:                         
U.S. Treasury securities and obligations of U.S. Government agencies  $77,815,616   $941,844   $(154,207)  $-   $78,603,253 
                          
Obligations of states and political subdivisions   3,416,026    11,280    (175,233)   -    3,252,073 
                          
Corporate securities including public utilities   281,126,441    7,265,563    (3,263,456)   (378,819)   284,749,729 
                          
Mortgage-backed securities   25,532,582    110,226    (3,622,125)   (154,049)   21,866,634 
                          
Redeemable preferred stock   750,000    9,400    (37,500)   -    721,900 
                          
Total fixed maturity securities available for sale  $388,640,665   $8,338,313   $(7,252,521)  $(532,868)  $389,193,589 
                          
Equity securities at estimated fair value:                         
                          
Common stock:                         
                          
Industrial, miscellaneous and all other  $12,128,914   $5,898,600   $(336,490)       $17,691,024 
                          
Total equity securities at estimated fair value  $12,128,914   $5,898,600   $(336,490)       $17,691,024 
                          
Mortgage loans held for investment at amortized cost:                         
Residential  $91,948,455                     
Residential construction   165,869,176                     
Commercial   76,447,701                     
Less: Unamortized deferred loan fees, net   (2,159,279)                    
Less: Allowance for credit losses   (2,677,001)                    
Less: Net discounts   (264,361)                    
                          
Total mortgage loans held for investment  $329,164,691                     
                          
Real estate held for investment - net of accumulated depreciation:                         
Residential  $93,885,033                     
Commercial   122,678,848                     
                          
Total real estate held for investment  $216,563,881                     
                          
Real estate held for sale:                         
Residential  $1,467,850                     
Commercial   151,553                     
                          
Total real estate held for sale  $1,619,403                     
                          
Other investments and policy loans at amortized cost:                         
Policy loans  $14,372,484                     
Insurance assignments   42,278,320                     
Federal Home Loan Bank stock (2)   1,590,400                     
Other investments   26,417,783                     
Less: Allowance for credit losses for insurance assignments   (1,534,957)                    
                          
Total other investments and policy loans  $83,124,030                     
                          
Accrued investment income  $9,746,368                     
                          
Total investments  $1,047,102,986                     

 

 
(1)Gross unrealized losses are net of allowance for credit losses
(2)Includes $581,600 of Membership stock and $1,008,800 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, 2025 (Unaudited)

 

3) Investments (Continued)

 

The Company’s investments as of December 31, 2024, are summarized as follows:

 

   Amortized Cost   Gross Unrealized Gains   Gross Unrealized Losses (1)   Allowance for Credit Losses   Estimated Fair Value 
December 31, 2024:                         
Fixed maturity securities, available for sale, at estimated fair value:                         
U.S. Treasury securities and obligations of U.S. Government agencies  $74,680,606   $327,618   $(486,976)  $-   $74,521,248 
                          
Obligations of states and political subdivisions   6,416,751    1,762    (290,448)   -    6,128,065 
                          
Corporate securities including public utilities   262,954,278    2,444,842    (6,922,871)   (408,944)   258,067,305 
                          
Mortgage-backed securities   31,710,436    125,764    (4,244,640)   (12,049)   27,579,511 
                          
Redeemable preferred stock   250,000    -    -    -    250,000 
                          
Total fixed maturity securities available for sale  $376,012,071   $2,899,986   $(11,944,935)  $(420,993)  $366,546,129 
                          
Equity securities at estimated fair value:                         
                          
Common stock:                         
                          
Industrial, miscellaneous and all other  $11,386,454   $4,976,567   $(591,340)       $15,771,681 
                          
Total equity securities at estimated fair value  $11,386,454   $4,976,567   $(591,340)       $15,771,681 
                          
Mortgage loans held for investment at amortized cost:                         
Residential  $92,061,787                     
Residential construction   151,172,733                     
Commercial   62,753,085                     
Less: Unamortized deferred loan fees, net   (2,082,241)                    
Less: Allowance for credit losses   (1,885,390)                    
Less: Net discounts   (272,616)                    
                          
Total mortgage loans held for investment  $301,747,358                     
                          
Real estate held for investment - net of accumulated depreciation:                         
Residential  $71,618,410                     
Commercial   126,074,928                     
                          
Total real estate held for investment  $197,693,338                     
                          
Real estate held for sale:                         
Residential  $1,126,480                     
Commercial   151,553                     
                          
Total real estate held for sale  $1,278,033                     
                          
Other investments and policy loans at amortized cost:                         
Policy loans  $14,019,248                     
Insurance assignments   48,493,858                     
Federal Home Loan Bank stock (2)   2,404,900                     
Other investments   11,473,961                     
Less: Allowance for credit losses for insurance assignments   (1,536,926)                    
                          
Total policy loans and other investments  $74,855,041                     
                          
Accrued investment income  $8,499,168                     
                          
Total investments  $966,390,748                     

 

 
(1)Gross unrealized losses are net of allowance for credit losses
(2)Includes $553,900 of Membership stock and $1,851,000 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, 2025 (Unaudited)

 

3) Investments (Continued)

 

There were no investments in fixed maturity securities or equity securities, aggregated by issuer, of more than 10% of shareholders’ equity (before net unrealized gains and losses on equity securities and fixed maturity securities) as of September 30, 2025, 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, 2025, and December 31, 2024. The fair values of fixed maturity securities that are actively traded are based on quoted market prices. For fixed maturity securities that are not actively traded, fair values are estimated using values obtained from independent pricing services, or in the case of private placements, are estimated by discounting expected future cash flows using a current market value applicable to the coupon rate, credit and maturity of the investments. The table below sets forth unrealized losses by duration with the fair value of the related fixed maturity securities.

   Unrealized
Losses for
Less than
Twelve
Months		   Fair Value   Unrealized
Losses for
More than
Twelve
Months		   Fair Value   Total
Unrealized
Loss		   Combined
Fair Value		 
September 30, 2025                              
U.S. Treasury securities and obligations of U.S. Government agencies  $5,286   $2,413,864   $148,921   $10,950,745   $154,207   $13,364,609 
Obligations of states and political subdivisions   322    199,678    174,911    2,107,032    175,233    2,306,710 
Corporate securities   456,904    28,709,675    2,806,552    51,662,199    3,263,456    80,371,874 
Mortgage-backed securities   6,859    360,565    3,615,266    18,132,086    3,622,125    18,492,651 
Redeemable preferred stock   37,500    212,500    -    -    37,500    212,500 
Totals  $506,871   $31,896,282   $6,745,650   $82,852,062   $7,252,521   $114,748,344 
                               
December 31, 2024                              
U.S. Treasury securities and obligations of U.S. Government agencies  $8,737   $986,365   $478,239   $22,110,495   $486,976   $23,096,860 
Obligations of states and political subdivisions   15,003    2,167,918    275,445    3,008,385    290,448    5,176,303 
Corporate securities including public utilities   1,888,022    93,562,219    5,034,849    77,975,776    6,922,871    171,537,995 
Mortgage-backed securities   32,150    2,915,192    4,212,490    19,041,442    4,244,640    21,956,634 
Totals  $1,943,912   $99,631,694   $10,001,023   $122,136,098   $11,944,935   $221,767,792 

 

Relevant holdings were comprised of 359 securities with fair values aggregating 94.1% of the aggregate amortized cost as of September 30, 2025, compared to 706 securities with fair values aggregating 94.9% of the aggregate amortized cost as of December 31, 2024. A credit loss provision of $45,882 and of $20,342 have been recognized for the three-month periods ended September 30, 2025, and 2024, respectively. A credit loss provision of $111,875 and of $100,053 have been recognized for the nine-month periods ended September 30, 2025, and 2024, 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, 2025 (Unaudited)

 

3) Investments (Continued)

 

Evaluation of Allowance for Credit Losses

 

The Company evaluates its fixed maturity securities classified as available for sale on a quarterly basis to identify any potential credit losses. This evaluation includes a review of current ratings by the National Association of Insurance Commissions (“NAIC”) and other industry rating agencies. Securities with NAIC rating of 1 or 2 are considered investment grade and are only reviewed for credit loss if current market data or recent company news could lead to a credit downgrade. Securities with NAIC ratings of 3 to 5 are considered non-investment grade and are evaluated for credit loss. The evaluation involves assessing all facts and circumstances surrounding each security including, but not limited to, historical values, interest payment history, projected earnings, and revenue growth rates as well as a review of the reason for a downgrade in the NAIC rating. Based on the analysis of a security that is rated 3 to 5, a determination is made whether the security will likely make payments in accordance with the terms of the financial instrument. Securities with a rating of 6 are automatically determined to be impaired, and a credit loss is recognized in earnings.

 

Where the decline in fair value of fixed maturity securities is attributable to changes in market interest rates or to factors such as market volatility, liquidity and spread widening, and the Company anticipates recovery of all contractual or expected cash flows, the Company does not consider these securities to have credit loss because the Company does not intend to sell these securities and it is not more likely than not the Company will be required to sell these securities before a recovery of amortized cost, which may be at maturity.

 

If the Company intends to sell a fixed maturity security or if it is more likely than not that the Company will be required to sell a security before recovery of its amortized cost basis, a credit loss has occurred and the difference between the amortized cost and the fair value that relates to the expected credit loss is recognized as a loss in earnings, included in gains (losses) on investments and other assets on the condensed consolidated statements of earnings.

 

If the Company does not intend to sell a fixed maturity security and it is less likely than not that the Company will be required to sell the security but the Company also does not expect to recover the entire amortized cost basis of the security, a credit loss is recognized in earnings for the amount of the expected credit loss with a corresponding allowance for credit losses as a contra-asset account. The credit loss is included in gains (losses) on investments and other assets on the condensed consolidated statements of earnings. The recognized credit loss is limited to the total unrealized loss on the security due to a change in credit.

 

Amounts due on available for sale fixed maturities that are deemed to be uncollectible are written off and removed from the allowance for credit loss. A write-off may also occur if the Company intends to sell a security or when it is more likely than not that the Company will be required to sell the security before the recovery of its amortized cost.

 

The Company does not calculate a credit loss allowance on accrued interest income, included in accrued investment income on the condensed consolidated balance sheets, as the Company writes off any accrued interest income to net investment income if the accrued but unpaid amount exceeds 90 days.

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

 

3) Investments (Continued)

 

Credit Quality Indicators

 

Based on the NAIC securities designations, the Company had 98.5% and 97.7% of its fixed maturity securities rated investment grade as of September 30, 2025, and December 31, 2024, 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, 2025   December 31, 2024 
NAIC Designation  Amortized
Cost		   Estimated Fair
Value		   Amortized
Cost		   Estimated Fair
Value		 
1  $201,200,500   $200,858,163   $188,386,980   $183,460,027 
2   180,271,273    181,731,893    178,060,265    174,405,442 
3   5,748,526    5,407,297    7,961,422    7,342,220 
4   406,486    412,461    649,592    600,459 
5   262,549    61,875    702,643    487,981 
6   1,331    -    1,169    - 
Total  $387,890,665   $388,471,689   $375,762,071   $366,296,129 

 

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, 2025, and 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 
   Three Months Ended September 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 - June 30, 2025  $  -   $            -   $474,937   $12,049   $486,986 
                          
Additions for credit losses not previously recorded   -    -    45,882    -    45,882 
Change in allowance on securities with previous allowance   -    -    -    -    - 
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, 2025  $-   $-   $520,819   $12,049   $532,868 

 

                     
   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 

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (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, 2025, and 2024:

 

                     
   Nine Months Ended Sepember 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   -    -    39,875    -    39,875 
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, 2025  $-   $-   $520,819   $12,049   $532,868 

 

                     
   Nine Months Ended Sepember 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 - December 31, 2023  $   -   $       -   $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 

 

The table below presents the amortized cost and the estimated fair value of fixed maturity securities available for sale as of September 30, 2025, by contractual maturity. Actual or expected maturities may differ from contractual maturities because certain securities afford the issuer the right to call or prepay its obligations.

   Amortized
Cost		   Estimated Fair
 Value		 
Due in 1 year  $5,431,523   $5,435,051 
Due in 2-5 years   138,658,507    139,348,247 
Due in 5-10 years   129,622,596    133,518,158 
Due in more than 10 years   88,645,457    88,303,599 
Mortgage-backed securities   25,532,582    21,866,634 
Redeemable preferred stock   750,000    721,900 
Total  $388,640,665   $389,193,589 

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

 

3) Investments (Continued)

 

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

   2025   2024   2025   2024 
   Three Months Ended
September 30,		   Nine Months Ended
September 30,		 
   2025   2024   2025   2024 
Proceeds from sales  $377,496   $181,949   $3,142,137   $789,190 
Gross realized gains   3,668    -    4,194    2,714 
Gross realized losses   (14,777)   (20,666)   (15,318)   (1,522)

 

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, 2025		  

As of

December 31, 2024

 
Fixed maturity securities available for sale at estimated fair value  $7,756,474   $6,126,589 
Other investments   -    400,000 
Cash and cash equivalents   1,538,320    1,444,654 
Total assets on deposit  $9,294,794   $7,971,243 

 

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

 

   As of
September 30, 2025		   As of
December 31, 2024		 
Fixed maturity securities available for sale at estimated fair value  $26,013,241   $25,309,270 
Cash and cash equivalents   1,310,683    4,417,683 
Total assets on deposit  $27,323,924   $29,726,953 

 

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 September 30, 2025, the Company owed $21,000,000 to the FHLBs for advances, which is included in Bank and other loans payable on the condensed consolidated balance sheets. The Company received $69,000,000 in advances and repaid $48,000,000 of these advances during the nine months ended September 30, 2025.

 

   As of
September 30, 2025		   As of
December 31, 2024		 
Fixed maturity securities available for sale at estimated fair value  $62,730,848   $63,800,454 

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

 

3) Investments (Continued)

 

Real Estate Held for Investment and Held for Sale

 

The Company strategically deploys resources into real estate assets to match the income and yield durations of its primary obligations. The sources for these real estate assets come through its various business units in the form of acquisition, development, and mortgage foreclosures.

 

Commercial Real Estate Held for Investment and Held for Sale

 

The Company owns, invests in and manages commercial real estate as a means of both generating investment income and providing workspace for its employees. This asset class is acquired in accordance with the Company’s goals and objectives for risk-adjusted returns. Due diligence is conducted on each asset using internal and third-party resources. The geographic locations and asset sub-classes of investments are determined by senior management under the direction of the Board of Directors.

 

The Company employs full-time employees to manage the day-to-day operations of its commercial real estate within the greater Salt Lake area and close surrounding markets. The Company utilizes third party property managers where the geographic location does not warrant full-time staff or through strategic lease-up periods. The Company generally acquires commercial real estate in connection with company acquisitions or 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 aggregate net book value of commercial real estate serving as collateral for bank loans was $116,012,235 and $119,889,846 as of September 30, 2025, and December 31, 2024, respectively. The associated bank loan carrying values totaled $94,597,809 and $96,007,488 as of September 30, 2025, and December 31, 2024, respectively.

 

During the three- and nine-month periods ended September 30, 2025, and 2024, 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, 2025, and 2024, the Company recorded depreciation expense on commercial real estate held for investment of $1,432,750 and $1,420,367, respectively, and of $4,287,687 and $4,366,462 during the nine-month periods ended September 30, 2025, and 2024, respectively. Commercial real estate held for investment is stated at cost and is depreciated over the estimated useful life, primarily using the straight-line method. Depreciation is included in net investment income on the condensed consolidated statements of earnings.

 

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

   Net Book Value   Total Square Footage 
   September 30,
2025		   December 31, 2024   September 30,
2025		   December 31, 2024 
Utah (1)  $122,660,759   $126,056,342    546,941    546,941 
Louisiana   18,089    18,586    1,622    1,622 
                     
   $122,678,848   $126,074,928    548,563    548,563 

 

 
(1)Includes Center53

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

 

3) Investments (Continued)

 

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

 

   Net Book Value 
   September 30, 2025   December 31, 2024 
Mississippi (1)  $151,553   $151,553 
           
   $151,553   $151,553 

 

 
(1)Consists of approximately 93 acres of undeveloped land

 

Commercial Real Estate Owned and Occupied by the Company

 

The primary business units of the Company occupy a portion of the real estate owned by the Company. As of September 30, 2025, 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   216,865    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

 

Residential Real Estate Held for Investment and Held for Sale

 

The Company occasionally acquires residential homes through the mortgage loan foreclosure process. The Company has the option to sell these properties or to continue to hold them for expected cash flow and price appreciation. The Company also looks for opportunities to acquire land that can be developed into single family lots. Once developed, finished lots are sold to builder partners and others.

 

During the three- and nine-month periods ended September 30, 2025, and 2024 the Company did not record any impairment losses on residential real estate 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, 2025, and 2024, the Company recorded depreciation expense on residential real estate held for investment of $2,732 and $2,653, respectively, and $8,139 and $7,958 during the nine-month periods ended September 30, 2025, and 2024, respectively. Residential real estate held for investment is stated at cost and is depreciated over the estimated useful life, primarily using the straight-line method. Depreciation is included in net investment income on the condensed consolidated statements of earnings.

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

 

3) Investments (Continued)

 

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

   Net Book Value 
   September 30,
2025		   December 31, 2024 
Utah (1)  $93,885,033   $71,618,410 
   $93,885,033   $71,618,410 

 

 

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

 

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,
2025		   December 31, 2024 
Lots developed   184    231 
Lots to be developed   1,238    1,046 
Book Value  $93,718,118   $71,443,356 

 

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

 

   Net Book Value 
   September 30,
2025		   December 31, 2024 
Utah  $455,000   $849,900 
Florida   442,355    276,580 
Georgia   380,000    - 
Colorado   190,495    - 
   $1,467,850   $1,126,480 

 

The net book value of foreclosed residential real estate included in residential real estate held for sale was $1,467,850 and $1,126,480 as of September 30, 2025, and December 31, 2024, respectively.

 

Mortgage Loans Held for Investment

 

Mortgage loans held for investment consist of first and second mortgages and are generally classified into three distinct groups: Commercial, Residential and Residential Construction. These mortgage loans bear interest at rates ranging from 2.0% to 10.5%; maturity dates range from nine months to 30 years and have amortization periods of 0 to 30 years.

 

Concentrations of credit risk arise when several mortgage loan debtors have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions. Although the Company has a diversified mortgage loan portfolio consisting of residential mortgages, commercial loans and residential construction loans and requires collateral on all real estate exposures, a substantial portion of the relevant debtors’ ability to honor obligations is dependent upon the economic stability of the geographic region in which the debtors do business or are employed. As of September 30, 2025, the Company had 59%, 8%, 6%, 6%, and 4%, of its mortgage loans from borrowers located in the states of Utah, Florida, Arizona, California, and Texas, respectively. As of December 31, 2024, the Company had 56%, 8%, 9%, and 6% of its mortgage loans from borrowers located in the states of Utah, Florida, Arizona, and Texas, respectively.

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

 

3) Investments (Continued)

 

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 generally required.

 

Evaluation of Allowance for Credit Losses

 

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

 

Once a mortgage loan is past due 90 days, it is the policy of the Company to end the accrual of interest income on the loan and reverse any interest income that had been accrued. 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 $1,043,517 and $244,000 as of September 30, 2025, and December 31, 2024, respectively.

 

The Company measures expected credit losses based on the fair value of the collateral when the Company determines that foreclosure is probable. When a mortgage loan becomes delinquent, the Company proceeds to foreclose. Once foreclosed, the property is classified as real estate held for investment or held for sale.

 

To determine the allowance for credit losses, the Company has segmented its mortgage loans held for investment 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.

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

 

3) Investments (Continued)

 

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 LTV exceeds 80%, the loan is generally guaranteed by private mortgage insurance, the FHA, or VA.

 

Residential loans are evaluated for credit loss by using relevant available information from both internal and external sources. Among other things, the Company uses its historical delinquency information and considers current and forecasted economic conditions. External sources include a monthly analysis of its residential portfolio by a third party. The third party uses the Company’s current loan data and runs it through various models to project cash flows and provide a projected life of loan loss. The models consider loan features such as loan type, LTV, payment status, age, and current property values. Analyzing the information from various sources allows the Company to arrive at an allowance for credit losses.

 

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

 

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

 

The Company advances funds in accordance with the loan agreements once the work has been completed, and an independent inspection is made. The maximum loan commitment ranges between 50% and 85% of the appraised value. The Company receives fees and interest for these loans, and the interest rate is generally fixed at 5.25% to 8.50% per annum. Maturities range between six and eighteen months. The Company has commitments to fund existing construction and land development loans pursuant to the various loan agreements. As of September 30, 2025, the Company’s commitments were approximately $221,215,527 for these loans, of which $168,880,381 had been drawn.

 

Residential construction mortgage loans are evaluated for credit loss by considering historical activity and current housing market trends to arrive at a per loan basis point allowance that is recognized at loan origination and subsequent draws. The per loan basis point is reviewed at least annually or as loan losses or market trends require.

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

 

3) Investments (Continued)

 

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 - June 30, 2025  $1,179,267   $1,129,892   $331,585   $2,640,744 
Change in provision for credit losses (1)   375,839    (340,049)   467    36,257 
Charge-offs   -    -    -    - 
Ending balance - September 30, 2025  $1,555,106   $789,843   $332,052   $2,677,001 
                     
Beginning balance - June 30, 2024  $849,323   $1,779,386   $225,143   $2,853,852 
Change in provision for credit losses (1)   (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 

 

   Nine Months Ended 
   Commercial   Residential   Residential Construction   Total 
Beginning balance - December 31, 2024  $732,494   $850,550   $302,346   $1,885,390 
Change in provision for credit losses (1)   822,612    (60,707)   29,706    791,611 
Charge-offs   -    -    -    - 
Ending balance - September 30, 2025  $1,555,106   $789,843   $332,052   $2,677,001 
                     
Beginning balance - December 31, 2023  $1,219,653   $2,390,894   $208,106   $3,818,653 
Change in provision for credit losses (1)   (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 

 

 

(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, 2025 (Unaudited)

 

3) Investments (Continued)

 

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 
September 30, 2025                    
30-59 days past due  $132,237   $6,057,452   $-   $6,189,689 
60-89 days past due   -    1,687,873    -    1,687,873 
Over 90 days past due (1)   3,196,505    3,014,258    -    6,210,763 
In process of foreclosure (1)   191,508    2,427,736    -    2,619,244 
Total past due   3,520,250    13,187,319    -    16,707,569 
Current   72,927,451    78,761,136    165,869,176    317,557,763 
Total mortgage loans   76,447,701    91,948,455    165,869,176    334,265,332 
Allowance for credit losses   (1,555,106)   (789,843)   (332,052)   (2,677,001)
Unamortized deferred loan fees, net   (319,736)   (1,321,211)   (518,332)   (2,159,279)
Unamortized discounts, net   (145,419)   (118,942)   -    (264,361)
Net mortgage loans held for investment  $74,427,440   $89,718,459   $165,018,792   $329,164,691 
                     
December 31, 2024                    
30-59 days past due  $2,100,000   $5,818,334   $-   $7,918,334 
60-89 days past due   -    845,980    -    845,980 
Over 90 days past due (1)   4,205,000    3,061,450    -    7,266,450 
In process of foreclosure (1)   191,508    3,942,392    -    4,133,900 
Total past due   6,496,508    13,668,156    -    20,164,664 
Current   56,256,577    78,393,631    151,172,733    285,822,941 
Total mortgage loans   62,753,085    92,061,787    151,172,733    305,987,605 
Allowance for credit losses   (732,494)   (850,550)   (302,346)   (1,885,390)
Unamortized deferred loan fees, net   (115,555)   (1,307,539)   (659,147)   (2,082,241)
Unamortized discounts, net   (149,268)   (123,348)   -    (272,616)
Net mortgage loans held for investment  $61,755,768   $89,780,350   $150,211,240   $301,747,358 

 

 

(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, 2025 (Unaudited)

 

3) 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 September 30, 2025:

Credit Quality Indicator  2025   2024   2023   2022   2021   Prior   Total   % of Total 
LTV:                                        
Less than 65%  $19,847,653   $3,892,248   $15,600,000   $462,761   $824,305   $8,475,563   $49,102,530    64.23%
65% to 80%   14,381,076    10,432,942    1,840,776    293,872    -    -    26,948,666    35.25%
Greater than 80%   -    -    -    -    396,505    -    396,505    0.52%
                                         
Total  $34,228,729   $14,325,190   $17,440,776   $756,633   $1,220,810   $8,475,563   $76,447,701    100.00%
                                         
DSCR                                        
>1.20x  $8,542,000   $13,892,248   $13,640,000   $-   $-   $5,322,035   $41,396,283    54.15%
1.00x - 1.20x   20,161,729    432,942    3,800,776    756,633    1,220,810    3,153,528    29,526,418    38.62%
<1.00x   5,525,000    -    -    -    -    -    5,525,000    7.23%
                                         
Total  $34,228,729   $14,325,190   $17,440,776   $756,633   $1,220,810   $8,475,563   $76,447,701    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, 2024:

 

Credit Quality Indicator  2024   2023   2022   2021   2020   Prior   Total   % of Total 
LTV:                                        
Less than 65%  $7,653,600   $24,600,000   $2,352,150   $864,128   $-   $8,867,779   $44,337,657    70.65%
65% to 80%   10,432,942    1,840,776    823,397    -    4,913,313    -    18,010,428    28.70%
Greater than 80%   -    -    -    405,000    -    -    405,000    0.65%
                                         
Total  $18,086,542   $26,440,776   $3,175,547   $1,269,128   $4,913,313   $8,867,779   $62,753,085    100.00%
                                         
DSCR                                        
>1.20x  $16,300,000   $20,990,000   $1,000,000   $-   $4,913,313   $5,414,274   $48,617,587    77.47%
1.00x - 1.20x   432,942    5,450,776    2,175,547    1,269,128    -    3,453,505    12,781,898    20.37%
<1.00x   1,353,600    -    -    -    -    -    1,353,600    2.16%
                                         
Total  $18,086,542   $26,440,776   $3,175,547   $1,269,128   $4,913,313   $8,867,779   $62,753,085    100.00%

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (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, 2025:

 

Credit Quality Indicator  2025   2024   2023   2022   2021   Prior   Total   % of Total 
Performance Indicators:                                        
Performing  $9,761,488   $11,925,652   $8,846,498   $39,491,126   $2,894,338   $13,587,359   $86,506,461    94.08%
Non-performing (1)   546,602    -    3,013,370    943,125    -    938,897    5,441,994    5.92%
                                         
Total  $10,308,090   $11,925,652   $11,859,868   $40,434,251   $2,894,338   $14,526,256   $91,948,455    100.00%

 

 
(1)Includes residential mortgage loans in the process of foreclosure of $2,427,736

 

LTV:                                
Less than 65%  $3,581,292   $5,723,881   $4,547,440   $6,670,677   $1,337,492   $7,570,352   $29,431,134    32.01%
65% to 80%   5,742,730    6,046,634    6,638,395    32,174,154    1,556,846    6,416,327    58,575,086    63.70%
Greater than 80%   984,068    155,137    674,033    1,589,420    -    539,577    3,942,235    4.29%
                                         
Total  $10,308,090   $11,925,652   $11,859,868   $40,434,251   $2,894,338   $14,526,256   $91,948,455    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, 2024:

 

Credit Quality Indicator  2024   2023   2022   2021   2020   Prior   Total   % of Total 
Performance Indicators:                                        
Performing  $14,861,098   $10,030,848   $42,634,670   $3,076,901   $5,513,462   $8,940,966   $85,057,945    92.39%
Non-performing (1)   -    3,442,992    1,451,039    291,359    311,116    1,507,336    7,003,842    7.61%
                                         
Total  $14,861,098   $13,473,840   $44,085,709   $3,368,260   $5,824,578   $10,448,302   $92,061,787    100.00%

 

 
(1)Includes residential mortgage loans in the process of foreclosure of $3,942,392

 

      Year 2   Year 3   Year 4   Year 5             
LTV:                                
Less than 65%  $6,241,730   $4,931,376   $5,488,954   $1,790,036   $2,440,002   $5,273,672   $26,165,770    28.42%
65% to 80%   7,802,984    7,662,200    37,509,634    1,578,224    2,701,008    5,107,289    62,361,339    67.74%
Greater than 80%   816,384    880,264    1,087,121    -    683,568    67,341    3,534,678    3.84%
                                         
Total  $14,861,098   $13,473,840   $44,085,709   $3,368,260   $5,824,578   $10,448,302   $92,061,787    100.00%

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (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, 2025:

Credit Quality Indicator  2025   2024   2023   2022   2021   Total   % of Total 
Performance Indicators:                                   
Performing  $97,416,837   $55,925,032   $7,751,304   $-   $4,776,003   $165,869,176    100.00%
Non-performing   -    -    -    -    -    -    0.00%
                                    
Total  $97,416,837   $55,925,032   $7,751,304   $-   $4,776,003   $165,869,176    100.00%
                                    
LTV:                                   
Less than 65%  $27,347,365   $30,938,061   $7,751,304   $-   $4,776,003   $70,812,733    42.69%
65% to 80%   65,953,712    24,986,971    -    -    -    90,940,683    54.83%
Greater than 80%   4,115,760    -    -    -    -    4,115,760    2.48%
                                    
Total  $97,416,837   $55,925,032   $7,751,304   $-   $4,776,003   $165,869,176    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, 2024:

 

Credit Quality Indicator  2024   2023   2022   2021   Total   % of Total 
Performance Indicators:                              
Performing  $118,863,944   $21,375,552   $972,468   $9,960,769   $151,172,733    100.00%
Non-performing   -    -    -    -    -    0.00%
                               
Total  $118,863,944   $21,375,552   $972,468   $9,960,769   $151,172,733    100.00%
                               
LTV:                              
Less than 65%  $48,065,177   $21,375,552   $518,590   $9,960,769   $79,920,088    52.87%
65% to 80%   70,798,767    -    453,878    -    71,252,645    47.13%
Greater than 80%        -    -    -    -    0.00%
                               
Total  $118,863,944   $21,375,552   $972,468   $9,960,769   $151,172,733    100.00%

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (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, 2025		   As of
December 31, 2024		 
30-59 days past due  $7,982,177   $8,785,184 
60-89 days past due   2,834,811    4,046,731 
Over 90 days past due   4,883,289    5,320,216 
Total past due   15,700,277    18,152,131 
Current   26,578,043    30,341,727 
Total insurance assignments   42,278,320    48,493,858 
Allowance for credit losses   (1,534,957)   (1,536,926)
Net insurance assignments  $40,743,363   $46,956,932 

 

The Company records an allowance for credit losses when the insurance assignment is funded. Once an insurance assignment is 90 days past due or is in legal proceedings, it is monitored for write-off and collectability, and any adjustments to the allowance are recorded at that time.

 

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

   Three Months Ended 
Beginning balance - June 30, 2025  $1,481,032 
Change in provision for credit losses (1)   248,408 
Charge-offs   (194,483)
Ending balance - September 30, 2025  $1,534,957 
      
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 
      

 

   Nine Months Ended 
Beginning balance - December 31, 2024  $1,536,926 
Change in provision for credit losses (1)   799,460 
Charge-offs   (801,429)
Ending balance - September 30, 2025  $1,534,957 
      
Beginning balance - December 31, 2023  $1,553,836 
Change in provision for credit losses (1)   752,256 
Charge-offs   (765,257)
Ending balance - September 30, 2024  $1,540,835 

 

 
(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, 2025 (Unaudited)

 

3) Investments (Continued)

 

Variable Interest Entities (“VIE”)

 

The Company has a 50% ownership interest in three VIEs; HHH Real Estate LLC (“HHH”), SN Oquirrh LLC (“Oquirrh”), and SN Towns LLC (“Towns”). These entities hold and develop single family lots for residential construction. In accordance with the operating agreements for these entities, net profits or losses are allocated to the members in accordance with their ownership interests. The investments in HHH, Oquirrh and Towns are accounted for under the equity method of accounting. The carrying value of the equity investment in HHH was $11,163,125 and nil at September 30, 2025, and December 31, 2024, respectively, which is included in other investments and policy loans on the condensed consolidated balance sheets. The carrying value of the equity investment in Oquirrh was $870,063 and $1,500,000 at September 30, 2025, and December 31, 2024, respectively, which is included in other investments and policy loans on the condensed consolidated balance sheets. The carrying value of the equity investment in Towns was $2,614,037 and $4,063,537 at September 30, 2025, and December 31, 2024, respectively. $1,445,769 and $1,939,269 of which at September 30, 2025, and December 31, 2024, respectively, is included in restricted assets and $1,168,268 and $2,124,268 of which at September 30, 2025, and December 31, 2024, respectively, is included in cemetery perpetual care trust investments on the condensed consolidated balance sheets.

 

The Company has determined that HHH, Oquirrh and Towns are VIEs for which the Company is not the primary beneficiary for the following reasons: (1) the at-risk equity holders, as a group, lack the characteristics of a controlling financial interest, (2) the General Manager directs the activities and legal operations that most significantly affect the entity’s economic performance and (3) the Company does not have majority voting rights and no power to unilaterally direct the activities of the entity, and therefore, is not the primary beneficiary. The Company’s exposure to loss because of its involvement with the equity method investees is limited to the carrying value of the Company’s investments.

 

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:

   2025   2024   2025   2024 
   Three Months Ended September 30,   Nine Months Ended September 30, 
   2025   2024   2025   2024 
Fixed maturity securities:                    
Gross realized gains  $3,904   $7,929   $5,425   $13,120 
Gross realized losses   (24,168)   (43,184)   (36,426)   (61,539)
Net credit loss provision   (45,882)   (20,342)   (111,875)   (100,053)
                     
Equity securities:                    
Gains (losses) on securities sold   (990,140)   708    (860,032)   (16,662)
Unrealized gains on securities held at the end of the period   2,477,603    2,415,881    3,544,484    3,534,285 
                     
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   644,370    71,622    1,241,285    360,474 
Gross realized losses   (12,099)    -    (12,099)   - 
                     
Other assets:                    
Gross realized gains   448    95,690    11,252    92,095 
Gross realized losses   (81,838)   (19,284)   (81,088)   (20,513)
Total  $1,972,198   $1,347,656   $3,700,926   $2,639,843 

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

 

3) Investments (Continued)

 

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 from cemetery perpetual care trust investments and the restricted assets of cemeteries and mortuaries and totaled $711,436 and $1,140,136 in net gains for the three-month periods ended September 30, 2025 and 2024, respectively, and of $1,196,591 and $1,519,487 in net gains for the nine-month periods ended September 30, 2025 and 2024, respectively.

 

Major categories of net investment income were as follows:

 

   2025   2024   2025   2024 
  

Three Months Ended

September 30,

  

Nine Months Ended

September 30,

 
   2025   2024   2025   2024 
Fixed maturity securities available for sale  $4,818,558   $4,301,241   $14,233,356   $13,050,503 
Equity securities   210,342    171,767    650,605    516,363 
Mortgage loans held for investment   10,149,577    7,032,201    30,571,474    22,867,797 
Real estate held for investment and sale   2,885,847    3,093,459    8,718,124    9,893,539 
Policy loans   256,796    225,393    737,159    715,791 
Insurance assignments   4,948,025    5,009,043    15,818,390    14,971,607 
Other investments   236,288    272,062    480,123    672,363 
Cash and cash equivalents   747,758    1,700,898    3,104,010    5,107,765 
Gross investment income   24,253,191    21,806,064    74,313,241    67,795,728 
Investment expenses   (4,143,591)   (4,006,968)   (14,420,029)   (12,005,256)
Net investment income  $20,109,600   $17,799,096   $59,893,212   $55,790,472 

 

Net investment income includes income earned from cemetery perpetual care trust investments and the restricted assets of cemeteries and mortuaries and totaled $319,480 and $393,811 for the three-month periods ended September 30, 2025, and 2024, respectively, and $686,952 and $1,798,170 for the nine-month periods ended September 30, 2025, and 2024, 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:

   As of
September 30, 2025		  

As of

December 31, 2024

 
Fixed maturity securities available for sale  $4,530,512   $3,795,581 
Equity securities   14,147    11,049 
Mortgage loans held for investment   981,754    1,049,489 
Real estate held for investment   4,181,528    3,559,463 
Other investments   4,667    - 
Cash and cash equivalents   33,760    83,586 
Total accrued investment income  $9,746,368   $8,499,168 

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)