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Business Segment Information
 9 Months Ended
Sep. 30, 2025
Segment Reporting [Abstract]  
Business Segment Information

7) Business Segment Information

 

Description of Products and Services by Segment

 

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

 

Services and Cost Sharing Policies

 

The accounting policies of the Company’s operating and reportable segments are the same as those described in Part II, Item 8, Note 1 - Significant Accounting Policies of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Intersegment revenues are recorded at cost plus an agreed upon intercompany profit and are eliminated upon consolidation. In addition to revenues, the reportable segments share in business services and costs including personnel expenses, rent, information technology, software, interest expense, and other similar operating costs. These shared services and costs are allocated between the segments using prevailing market rates and other agreed upon allocation methods.

 

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

 

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

 

Chief Operating Decision Maker (“CODM”)

 

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

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

 

7) Business Segment Information (Continued)

 Schedule of Revenues and Expenses by Reportable Segment

   Insurance   Mortuary   Mortgage   Total 
   For the Three Months Ended September 30, 2025 
   Life   Cemetery/     
   Insurance   Mortuary   Mortgage   Total 
Revenues:                    
From external sources:                    
Revenue from external customers  $29,880,785   $7,140,942   $29,139,245   $66,160,972 
Net investment income   19,278,861    641,814    188,925    20,109,600 
Gains on investments and other assets   1,258,854    711,884    1,460    1,972,198 
Other revenues   371,667    432,894    278,832    1,083,393 
Intersegment revenues   2,044,534    85,699    75,882    2,206,115 
Total segment revenues   52,834,701    9,013,233    29,684,344    91,532,278 
                     
Elimination of intersegment revenues                  (2,206,115)
Total consolidated revenues                  89,326,163 
                     
Less:                    
Death benefits   15,182,809    -    -      
Surrenders and other policy benefits   1,374,289    -    -      
Increase in future policy benefits   8,376,973    -    -      
Amortization of deferred policy and pre-need acquisition costs and value of business acquired   5,329,768    203,653    -      
Selling, general and administrative expenses:                    
Commissions   1,327,707    53,382    11,673,028      
Personnel   8,679,182    2,689,765    10,150,091      
Advertising   172,623    174,285    636,383      
Rent and rent related   86,781    38,902    821,981      
Depreciation on property and equipment   217,990    233,853    155,457      
Cost related to funding mortgage loans   -    -    1,813,814      
Data processing and IT related (1)   334,212    78,005    913,247      
Premium taxes on insurance premiums and other considerations (1)   751,520    -    -      
Other segment items (1)(2)   2,884,733    1,299,434    1,339,391      
Intersegment expenses (3)   161,581    83,359    1,961,175      
Interest expense   912,232    136    154,160      
Costs of goods and services sold-mortuaries and cemeteries   -    1,113,425    -      
Income tax expense   1,534,528    757,700    45,698      
Segment net earnings   5,507,773    2,287,334    19,919    7,815,026 
                     
Net earnings                 $7,815,026 

 

 

(1)

Included in other expenses on the condensed consolidated statements of earnings. Data processing and IT related expenses includes various software subscriptions, maintenance, consulting, support and storage fees.

(2)

For each reportable segment, other segment items includes:

Life Insurance - bad debt, insurance expenses, professional service expenses, state insurance department fees, amortization of intangible assets, and certain overhead expenses.

Cemetery/Mortuary - bad debt, insurance expenses, professional service expenses, maintenance and utility expenses, property taxes, amortization of intangible assets, and certain overhead expenses.

Mortgage - bad debt, insurance expenses, professional service expenses, business license and registration fees, dues and subscriptions, amortization expense of mortgage servicing rights, and certain overhead expenses.

(3)

For each reportable segment, intersegment expenses includes:

Life Insurance - mortgage servicing fees and interest expense.

Cemetery/Mortuary - rent expense, data processing and IT related expenses, and interest expense.

Mortgage - rent expense and interest expense.

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

 

7) Business Segment Information (Continued)

 

   Insurance   Mortuary   Mortgage   Total 
   For the Three Months Ended September 30, 2024 
   Life   Cemetery/ 
   Insurance   Mortuary   Mortgage   Total 
Revenues:                
From external sources:                    
Revenue from external customers  $30,011,081   $6,814,331   $30,224,092   $67,049,504 
Net investment income   17,105,712    477,833    215,551    17,799,096 
Gains (losses) on investments and other assets   1,316,673    1,124,513    (1,093,530)   1,347,656 
Other revenues   419,890    126,000    1,531,541    2,077,431 
Intersegment revenues   2,066,052    85,699    137,946    2,289,697 
Total segment revenues   50,919,408    8,628,376    31,015,600    90,563,384 
                     
Elimination of intersegment revenues                  (2,289,697)
Total consolidated revenues                  88,273,687 
                     
Less:                    
Death benefits   13,570,336    -    -      
Surrenders and other policy benefits   1,194,692    -    -      
Increase in future policy benefits   8,589,354    -    -      
Amortization of deferred policy and pre-need acquisition costs and value of business acquired   2,093,892    193,111    -      
Selling, general and administrative expenses:                    
Commissions   953,987    268,499    11,981,920      
Personnel   7,462,332    2,483,960    11,303,262      
Advertising   177,329    159,117    571,082      
Rent and rent related   103,137    39,324    1,237,615      
Depreciation on property and equipment   248,914    205,529    157,032      
Cost related to funding mortgage loans   -    -    1,694,791      
Data processing and IT related (1)   210,002    62,314    813,729      
Premium taxes on insurance premiums and other considerations (1)   739,809    -    -      
Other segment items (1)(2)   2,061,764    1,167,856    1,136,150      
Intersegment expenses (3)   223,434    90,613    1,975,650      
Interest expense   932,239    194    128,220      
Costs of goods and services sold-mortuaries and cemeteries   -    1,117,513    -      
Income tax expense   2,651,944    716,898    14,396      
Segment net earnings   9,706,243    2,123,448    1,753    11,831,444 
                     
Net earnings                 $11,831,444 

 

 

(1)

Included in other expenses on the condensed consolidated statements of earnings. Data processing and IT related expenses includes various software subscriptions, maintenance, consulting, support and storage fees.

(2)

For each reportable segment, other segment items includes:

Life Insurance - bad debt, insurance expenses, professional service expenses, state insurance department fees, amortization of intangible assets, and certain overhead expenses.

Cemetery/Mortuary - bad debt, insurance expenses, professional service expenses, maintenance and utility expenses, property taxes, amortization of intangible assets, and certain overhead expenses.

Mortgage - bad debt, insurance expenses, professional service expenses, business license and registration fees, dues and subscriptions, amortization expense of mortgage servicing rights, and certain overhead expenses.

(3) For each reportable segment, intersegment expenses includes:

Life Insurance - mortgage servicing fees and interest expense.

Cemetery/Mortuary - rent expense, data processing and IT related expenses, and interest expense.

Mortgage - rent expense and interest expense.

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

 

7) Business Segment Information (Continued)

 

   Insurance   Mortuary   Mortgage   Total 
   For the Nine Months Ended September 30, 2025 
   Life   Cemetery/         
   Insurance   Mortuary   Mortgage   Total 
Revenues:                    
From external sources:                    
Revenue from external customers  $89,846,164   $21,698,880   $83,433,590   $194,978,634 
Net investment income   57,909,679    1,528,492    455,041    59,893,212 
Gains on investments and other assets   2,422,649    1,193,030    85,247    3,700,926 
Other revenues   1,422,933    766,987    844,343    3,034,263 
Intersegment revenues   5,192,800    254,302    272,307    5,719,409 
Total segment revenues   156,794,225    25,441,691    85,090,528    267,326,444 
                     
Elimination of intersegment revenues                  (5,719,409)
Total consolidated revenues                  261,607,035 
                     
Less:                    
Death benefits   46,249,912    -    -      
Surrenders and other policy benefits   3,807,498    -    -      
Increase in future policy benefits   26,165,160    -    -      
Amortization of deferred policy and pre-need acquisition costs and value of business acquired   15,436,601    531,030    -      
Selling, general and administrative expenses:                    
Commissions   3,266,908    841,828    32,849,100      
Personnel   25,602,668    7,901,569    32,368,554      
Advertising   398,893    468,503    1,880,288      
Rent and rent related   265,531    112,896    2,494,987      
Depreciation on property and equipment   680,675    669,398    471,380      
Cost related to funding mortgage loans   -    -    5,120,855      
Data processing and IT related (1)   882,143    222,937    2,690,366      
Premium taxes on insurance premiums and other considerations (1)   2,203,794    -    -      
Other segment items (1)(2)   7,911,917    3,834,468    5,211,239      
Intersegment expenses (3)   526,395    255,285    4,937,729      
Interest expense   2,812,509    446    666,539      
Costs of goods and services sold-mortuaries and cemeteries   -    3,525,978    -      
Income tax expense (benefit)   4,526,820    1,722,410    (848,438)     
Segment net earnings (loss)   16,056,801    5,354,943    (2,752,071)   18,659,673 
                     
Net earnings                 $18,659,673 
                     
Segment assets  $1,403,748,846   $105,083,649   $89,648,621   $1,598,481,116 
                     
Elimination of intersegment assets                  (35,495,025)
Total consolidated assets                 $1,562,986,091 
                     
Expenditures for long-lived assets  $53,325,905   $1,176,244   $296,776   $54,798,925 

 

 

(1) Included in other expenses on the condensed consolidated statements of earnings. Data processing and IT related expenses includes various software subscriptions, maintenance, consulting, support and storage fees.
(2) For each reportable segment, other segment items includes:

Life Insurance - bad debt, insurance expenses, professional service expenses, state insurance department fees, amortization of intangible assets, and certain overhead expenses.

Cemetery/Mortuary - bad debt, insurance expenses, professional service expenses, maintenance and utility expenses, property taxes, amortization of intangible assets, and certain overhead expenses.

Mortgage - bad debt, insurance expenses, professional service expenses, business license and registration fees dues and subscriptions, amortization expense of mortgage servicing rights, and certain overhead expenses.

(3) For each reportable segment, intersegment expenses includes:

Life Insurance - mortgage servicing fees and interest expense.

Cemetery/Mortuary - rent expense, data processing and IT related expenses, and interest expense.

Mortgage - rent expense and interest expense.

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

 

7) Business Segment Information (Continued)

 

   Insurance   Mortuary   Mortgage   Total 
   For the Nine Months Ended September 30, 2024 
   Life   Cemetery/     
   Insurance   Mortuary   Mortgage   Total 
Revenues:                    
From external sources:                    
Revenue from external customers  $89,823,732   $21,531,769   $81,675,278   $193,030,779 
Net investment income   52,902,146    2,136,982    751,344    55,790,472 
Gains on investments and other assets   2,194,572    1,503,865    (1,058,594)   2,639,843 
Other revenues   1,140,856    435,507    2,215,764    3,792,127 
Intersegment revenues   5,351,600    255,234    429,541    6,036,375 
Total segment revenues   151,412,906    25,863,357    84,013,333    261,289,596 
                     
Elimination of intersegment revenues                  (6,036,375)
Total consolidated revenues                  255,253,221 
                     
Less:                    
Death benefits   43,354,254    -    -      
Surrenders and other policy benefits   3,453,425    -    -      
Increase in future policy benefits   27,148,178    -    -      
Amortization of deferred policy and pre-need acquisition costs and value of business acquired   10,708,888    623,417    -      
Selling, general and administrative expenses:                    
Commissions   2,817,716    1,047,105    30,773,643      
Personnel   21,979,252    7,346,938    32,581,075      
Advertising   400,206    437,731    1,543,463      
Rent and rent related   332,764    118,753    3,627,275      
Depreciation on property and equipment   698,173    620,861    472,789      
Cost related to funding mortgage loans   -    -    4,677,767      
Data processing and IT related (1)   633,130    183,300    2,618,662      
Premium taxes on insurance premiums and other considerations (1)   2,260,033    -    -      
Other segment items (1)(2)   6,100,295    3,596,281    4,085,217      
Intersegment expenses (3)   683,672    276,933    5,075,770      
Interest expense   2,790,510    650    370,783      
Costs of goods and services sold-mortuaries and cemeteries   -    3,627,101    -      
Income tax expense (benefit)   6,017,032    2,025,774    (396,735)     
Segment net earnings (loss)   22,035,378    5,958,513    (1,416,376)   26,577,515 
                     
Net earnings                 $26,577,515 
                     
Segment assets  $1,329,401,728   $94,063,898   $99,663,509   $1,523,129,135 
                     
Elimination of intersegment assets                  (28,304,940)
Total consolidated assets                 $1,494,824,195 
                     
Expenditures for long-lived assets  $46,317,358   $300,393   $146,993   $46,764,744 

 

 

(1) Included in other expenses on the condensed consolidated statements of earnings. Data processing and IT related expenses includes various software subscriptions, maintenance, consulting, support and storage fees.
(2) For each reportable segment, other segment items includes:

Life Insurance - bad debt, insurance expenses, professional service expenses, state insurance department fees, amortization of intangible assets, and certain overhead expenses.

Cemetery/Mortuary - bad debt, insurance expenses, professional service expenses, maintenance and utility expenses, property taxes, amortization of intangible assets, and certain overhead expenses.

Mortgage - bad debt, insurance expenses, professional service expenses, business license and registration fees, dues and subscriptions, amortization expense of mortgage servicing rights, and certain overhead expenses.

(3) For each reportable segment, intersegment expenses includes:

Life Insurance - mortgage servicing fees and interest expense.

Cemetery/Mortuary - rent expense, data processing and IT related expenses, and interest expense.

Mortgage - rent expense and interest expense.

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)