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Cemetery Perpetual Care Trust Investments and Obligation and Restricted Assets
 9 Months Ended
Sep. 30, 2025
Cemetery Perpetual Care Trust Investments And Obligation And Restricted Assets  
Cemetery Perpetual Care Trust Investments and Obligation and Restricted Assets

15) Cemetery Perpetual Care Trust Investments and Obligation and Restricted Assets

 

Cemetery Perpetual Care Trust Investments and Obligation

 

State law requires the Company to pay into endowment care trusts a portion of the proceeds from the sale of certain cemetery property interment rights for cemeteries that have established an endowment care trust. These endowment care trusts are defined as Variable Interest Entities pursuant to GAAP. The Company is the primary beneficiary of these trusts, as it absorbs both the losses and any expenses associated with the trusts. The Company has consolidated cemetery endowment care trust investments with a corresponding amount recorded as Cemetery Perpetual Care Obligation in the accompanying consolidated balance sheets.

 

The components of cemetery perpetual care investments and obligation as of September 30, 2025, are as follows:

 

 Schedule of Investments and Obligation 

  

Amortized

Cost

  

Gross

Unrealized

Gains

  

Gross

Unrealized

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  $150,482   $1,806   $-   $152,288 
Obligations of states and political subdivisions   122,043    -    (3,046)   118,997 
Total fixed maturity securities available for sale  $272,525   $1,806   $(3,046)  $271,285 
                     
Equity securities at estimated fair value:                    
Common stock:                    
Industrial, miscellaneous and all other  $4,439,406   $1,579,249   $(135,365)  $5,883,290 
Total equity securities at estimated fair value  $4,439,406   $1,579,249   $(135,365)  $5,883,290 
                     

Mortgage loans held for investment at amortized cost:

                    
Residential construction  $1,675,307                
Less: Allowance for credit losses   (3,351)               
Total mortgage loans held for investment  $1,671,956                
                     
Other investments  $1,168,269                
                     
Cash and cash equivalents  $686,777                
                     
Accrued investment income  $4,101                
                     
Total cemetery perpetual care trust investments  $9,685,678                
                     
Cemetery perpetual care obligation  $(5,838,879)               
                     
Trust investments in excess of trust obligations  $3,846,799                

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

 

15) Cemetery Perpetual Care Trust Investments and Obligations and Restricted Assets (Continued)

 

The components of cemetery perpetual care investments and obligation as of December 31, 2024, are as follows:

 

  

Amortized

Cost

  

Gross

Unrealized

Gains

  

Gross

Unrealized

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  $651,428   $-   $(2,010)  $649,418 
Obligations of states and political subdivisions   125,194    -    (4,950)   120,244 
Total fixed maturity securities available for sale  $776,622   $-   $(6,960)  $769,662 
                     
Equity securities at estimated fair value:                    
Common stock:                    
Industrial, miscellaneous and all other  $3,874,522   $1,271,529   $(226,007)  $4,920,044 
Total equity securities at estimated fair value  $3,874,522   $1,271,529   $(226,007)  $4,920,044 
                     
Mortgage loans held for investment at amortized cost:                    
Residential construction  $202,600                
Less: Allowance for credit losses   (405)               
Commercial   1,939,269                
Less: Allowance for credit losses   -                
Total mortgage loans held for investment  $2,141,464                
                     
Cash and cash equivalents  $1,002,396                
                     
Accrued investment income  $2,937                
                     
Total cemetery perpetual care trust investments  $8,836,503                
                     
Cemetery perpetual care obligation  $(5,642,693)               
                     
Trust investments in excess of trust obligations  $3,193,810                

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

 

15) Cemetery Perpetual Care Trust Investments and Obligations and Restricted Assets (Continued)

 

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 tables set forth unrealized losses by duration with the fair value of the related fixed maturity securities:

 

 Schedule of Fair Value of Fixed Maturity Securities 

  

Unrealized

Losses

for Less

than

Twelve

Months

  

Fair

Value

  

Unrealized

Losses

for More

than

Twelve

Months

  

Fair

Value

  

Total

Unrealized

Loss

  

Fair

Value

 
September 30, 2025                              
Obligations of states and political subdivisions  $-   $-   $3,046   $118,998   $3,046   $118,998 
Totals  $-   $-   $3,046   $118,998   $3,046   $118,998 
                               
December 31, 2024                              
U.S. Treasury securities and obligations of U.S. Government agencies  $2,010   $649,419   $-   $-   $2,010   $649,419 
Obligations of states and political subdivisions   4,950    120,243    -    -    4,950    120,243 
Totals  $6,960   $769,662   $-   $-   $6,960   $769,662 

 

Relevant holdings were comprised of two securities with fair values aggregating 97.5% of the aggregate amortized cost as of September 30, 2025. Relevant holdings were comprised of four securities with fair values aggregating 99.1% of aggregate amortized cost as of December 31, 2024. No credit losses have been recognized for the three- and nine-month periods ended September 30, 2025, and 2024, since the unrealized losses are primarily the result of increases in interest rates. See Note 3 for additional information regarding the Company’s evaluation of the allowance for credit losses for fixed maturity securities available for sale.

 

The table below presents the amortized cost and estimated fair value of fixed maturity securities available for sale as of September 30, 2025, by contractual maturity. 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.

 

 Schedule of Investments Classified by Contractual Maturity Date 

   Amortized   Estimated Fair 
   Cost   Value 
Due in 1 year  $-   $- 
Due in 2-5 years   220,652    220,389 
Due in 5-10 years   51,873    50,896 
Due in more than 10 years   -    - 
Total  $272,525   $271,285 

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

 

15) Cemetery Perpetual Care Trust Investments and Obligations and Restricted Assets (Continued)

 

Restricted Assets

 

The Company has also established certain restricted assets to provide for future merchandise and service obligations incurred in connection with its pre-need sales for its cemetery and mortuary segment.

 

Additionally, restricted cash represents escrows held for borrowers and investors under servicing and appraisal agreements relating to mortgage loans, funds held by warehouse banks in accordance with loan purchase agreements and funds held in escrow for certain real estate construction development projects. Additionally, the Company elected to maintain its medical benefit fund without change from the prior year and has included this amount as a component of restricted cash. These restricted cash items are for the Company’s life insurance and mortgage segments.

 

Restricted assets as of September 30, 2025, are summarized as follows:

 Schedule of Restricted Assets in Cemetery and Mortuary Endowment Care and Pre need Merchandise Funds

 

  

Amortized

Cost

  

Gross

Unrealized

Gains

  

Gross

Unrealized

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  $1,625,998   $4,147   $-   $1,630,145 
Obligations of states and political subdivisions   330,955    120    (2,158)   328,917 
Corporate securities including public utilities   52,030    -    (1,016)   51,014 
Total fixed maturity securities available for sale  $2,008,983   $4,267   $(3,174)  $2,010,076 
                     
Equity securities at estimated fair value:                    
Common stock:                    
Industrial, miscellaneous and all other  $10,790,554   $2,553,913   $(337,799)  $13,006,668 
Total equity securities at estimated fair value  $10,790,554   $2,553,913   $(337,799)  $13,006,668 
                     
Mortgage loans held for investment at amortized cost:                     
Residential construction  $1,178,890                
   Less: Allowance for credit losses   (2,358)               
Total mortgage loans held for investment  $1,176,532                
                     
Other investments  $1,912,436                
                     
Cash and cash equivalents (1)  $13,556,435                
                     
Accrued investment income  $10,892                
                     
Total restricted assets  $31,673,039                

 

 

(1) Including cash and cash equivalents of $12,375,579 for the life insurance and mortgage segments.

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

 

15) Cemetery Perpetual Care Trust Investments and Obligations and Restricted Assets (Continued)

 

Restricted assets as of December 31, 2024, are summarized as follows:

 

   Amortized Cost   Gross Unrealized Gains   Gross Unrealized 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  $1,741,029   $2,256   $(1,511)  $1,741,774 
Obligations of states and political subdivisions   471,217    180    (4,223)   467,174 
Corporate securities including public utilities   144,616    32    (2,227)   142,421 
Total fixed maturity securities available for sale  $2,356,862   $2,468   $(7,961)  $2,351,369 
                     
Equity securities at estimated fair value:                    
Common stock:                    
Industrial, miscellaneous and all other  $8,547,709   $1,914,309   $(489,852)  $9,972,166 
Total equity securities at estimated fair value  $8,547,709   $1,914,309   $(489,852)  $9,972,166 
                     
Mortgage loans held for investment at amortized cost:                     
Residential construction  $985,806                
Less: Allowance for credit losses   (1,972)               
Total mortgage loans held for investment  $983,834                
                     
Other investments  $1,939,269                
                     
Cash and cash equivalents (1)  $8,553,803                
                     
Accrued investment income  $6,395                
                     
Total restricted assets  $23,806,836                

 

 

(1) Including cash and cash equivalents of $7,657,958 for the life insurance and mortgage segments.

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

 

15) Cemetery Perpetual Care Trust Investments and Obligations and Restricted Assets (Continued)

 

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 tables set forth unrealized losses by duration with the fair value of the related fixed maturity securities.

 

 Schedule of Fair Value of Fixed Maturity Securities 

  

Unrealized

Losses

for Less

than

Twelve

Months

  

Fair

Value

  

Unrealized

Losses

for More

than

Twelve

Months

  

Fair

Value

  

Total

Unrealized

Loss

  

Fair

Value

 
At September 30, 2025                              
Obligations of states and political subdivisions  $994   $100,305   $1,164   $103,492   $2,158   $203,797 
Corporate securities including public utilities   -    -    1,016    51,014    1,016    51,014 
Total unrealized losses  $994   $100,305   $2,180   $154,506   $3,174   $254,811 
                               
At December 31, 2024                              
U.S. Treasury securities and obligations of U.S. Government agencies  $1,511   $558,707   $-   $-   $1,511   $558,707 
Obligations of states and political subdivisions   2,004    237,636    2,219    129,358    4,223    366,994 
Corporate securities including public utilities   1,316    51,685    911    65,704    2,227    117,389 
Total unrealized losses  $4,831   $848,028   $3,130   $195,062   $7,961   $1,043,090 

 

Relevant holdings were comprised of four securities with fair values aggregating 98.8% of the aggregate amortized cost as of September 30, 2025. Relevant holdings were comprised of 15 securities with fair values aggregating 99.2% of the aggregate amortized cost as of December 31, 2024. No credit losses have been recognized for the three- and nine-month periods ended September 30, 2025, and 2024, since the unrealized losses are primarily the result of increases in interest rates. See Note 3 for additional information regarding the Company’s evaluation of the allowance for credit losses for fixed maturity securities available for sale.

 

The table below presents the amortized cost and estimated fair value of fixed maturity securities available for sale as of September 30, 2025, by contractual maturity. 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.

 

 Schedule of Investments Classified by Contractual Maturity Date 

   Amortized   Estimated Fair 
   Cost   Value 
Due in 1 year  $810,104   $810,295 
Due in 2-5 years   941,887    945,094 
Due in 5-10 years   100,307    100,181 
Due in more than 10 years   156,685    154,506 
Total  $2,008,983   $2,010,076 

 

See Notes 3 and 8 for additional information regarding restricted assets and cemetery perpetual care trust investments.

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)