What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-11-15 compared with 2021-08-17 · 1131 added, 894 removed, 967 unchanged (68% of the section changed)

Financial Statements

Fixed maturity

securities, available for sale, at estimated fair value (amortized

cost of $ 233,569,650 and

$ 265,150,484 for

2021 and 2020)

Fixed maturity securities, available for sale, at estimated fair value (amortized cost of $ 238,809,528 and $ 265,150,484 for 2021 and 2020)

$ 264,844,942

$ 294,656,679

Equity securities at

estimated fair value (cost of $ 7,810,399 and $ 9,698,490 for

2021 and 2020)

Mortgage loans held for

investment (net of allowances for loan losses of $ 1,900,935

and $ 2,005,127

for 2021 and 2020)

Real estate held for

investment (net of accumulated depreciation of $ 15,268,717

and $ 13,800,973

for 2021 and 2020)

Equity securities at estimated fair value (cost of $ 8,198,282 and $ 9,698,490 for 2021 and 2020)

Mortgage loans held for investment (net of allowances for loan losses of $ 1,753,853 and $ 2,005,127 for 2021 and 2020)

Real estate held for investment (net of accumulated depreciation of $ 18,908,623 and $ 13,800,973 for 2021 and 2020)

Real estate held for sale

Other investments and policy

loans (net of allowances for doubtful accounts

of $ 1,676,618 and

$ 1,645,475 for

2021 and 2020)

investment income

Other investments and policy loans (net of allowances for doubtful accounts of $ 1,795,037 and $ 1,645,475 for 2021 and 2020)

Accrued investment income

Total investments

Cash and cash equivalents

Loans held for sale at estimated

Receivables (net of

allowances for doubtful accounts of $ 1,733,393 and $ 1,685,382

for 2021 and 2020)

Restricted assets (including

$ 4,363,172 and

$ 3,989,415 for

2021 and 2020 at estimated fair

Cemetery perpetual care trust

investments (including $ 3,077,592 and $ 2,810,070

for 2021 and 2020 at estimated fair value)

Loans held for sale at estimated fair value

Receivables (net of allowances for doubtful accounts of $ 1,664,747 and $ 1,685,382 for 2021 and 2020)

Restricted assets (including $ 4,596,169 and $ 3,989,415 for 2021 and 2020 at estimated fair value)

Cemetery perpetual care trust investments (including $ 3,173,658 and $ 2,810,070 for 2021 and 2020 at estimated fair value)

Receivable from reinsurers

Cemetery land and improvements

Deferred policy and pre-need

contract acquisition costs

Mortgage servicing rights,

Deferred policy and pre-need contract acquisition costs

Mortgage servicing rights, net

Property and equipment, net

5 unchanged sentences

CONSOLIDATED BALANCE SHEETS (Continued)

and Stockholders' Equity

Future policy

benefits and unpaid claims

Liabilities and Stockholders’ Equity

Future policy benefits and unpaid claims

$ 860,871,187

2 unchanged sentences

Bank and other loans payable

Deferred pre-need cemetery

and mortuary contract revenues

Deferred pre-need cemetery and mortuary contract revenues

Cemetery perpetual care obligation

Accounts payable

Other liabilities and accrued

Other liabilities and accrued expenses

Total liabilities

1,261,609,812

1,284,953,425

Stockholders'

Preferred Stock - non-voting - $ 1.00

Stockholders’ Equity

Preferred Stock - non-voting - $ 1.00 par value;

5,000,000 shares authorized;

issued or outstanding

common stock - $ 2.00

none issued or outstanding

common stock - $ 2.00 par value;

20,000,000 shares authorized;

issued 17,561,521

shares in 2021 and 16,595,783

shares in 2020

non-voting common

stock - $ 1.00

issued or outstanding

convertible common

stock - $ 2.00

issued 2,762,630

shares in 2021 and 2,679,603

shares in 2020

issued 17,594,048 shares in 2021 and 16,595,783 shares in 2020

non-voting common stock - $ 1.00 par value;

5,000,000 shares authorized;

none issued or outstanding

convertible common stock - $ 2.00 par value;

3,000,000 shares authorized;

issued 2,761,909 shares in 2021 and 2,679,603 shares in 2020

Common Stock, Value

Additional paid-in capital

Accumulated other comprehensive

income, net of taxes

Accumulated other comprehensive income, net of taxes

Retained earnings

Treasury stock at cost - 175,153

Class A shares and 95,356

Class C shares in 2021;

Class A shares and 10,985

Class C shares in 2020

Treasury stock at cost – 44,145 Class A shares and 95,356 Class C shares in 2021;

and 227,852 Class A shares and 10,985 Class C shares in 2020

( 1,127,442 )

( 1,833,272 )

stockholders' equity

Liabilities and Stockholders' Equity

Total stockholders’ equity

Total Liabilities and Stockholders’ Equity

$ 1,558,325,980

3 unchanged sentences

CONSOLIDATED STATEMENTS OF EARNINGS

Months Ended June 30

Three Months Ended

Nine Months Ended

Mortgage fee income

$ 204,414,276

$ 212,209,718

premiums and other considerations

Net investment

and cemetery sales

Gains (losses)

on investments and other assets

and expenses:

Insurance premiums and other considerations

Net investment income

Net mortuary and cemetery sales

Gains (losses) on investments and other assets

Total revenues

Benefits and expenses:

Death benefits

and other policy benefits

future policy benefits

of deferred policy and pre-need acquisition costs and value of business acquired

Selling, general

and administrative expenses:

Rent and rent

on property and equipment

Costs related

to funding mortgage loans

Surrenders and other policy benefits

Increase in future policy benefits

Amortization of deferred policy and pre- need acquisition costs and value of business acquired

Selling, general and administrative expenses:

Rent and rent related

Depreciation on property and equipment

Costs related to funding mortgage loans

Interest expense

of goods and services sold-mortuaries and cemeteries

benefits and expenses

before income taxes

Cost of goods and services sold-mortuaries and cemeteries

Total benefits and expenses

Earnings before income taxes

Income tax expense

( 3,352,663 )

2 unchanged sentences

( 15,965,656 )

earnings per Class A Equivalent common share (1)

earnings per Class A Equivalent common share-assuming dilution (1)

Weighted-average

Class A equivalent common shares outstanding (1)

Weighted-average

Class A equivalent common shares outstanding-assuming dilution (1)

Net earnings per share amounts have been adjusted retroactively for the effect of annual stock dividends.

The weighted-average shares

outstanding includes the weighted-average Class A common shares and the weighted-average Class C common shares determined on an equivalent

Class A common stock basis.

Net earnings per Class A Equivalent common share (1)

Net earnings per Class A Equivalent common share-assuming dilution (1)

Weighted-average Class A equivalent common shares outstanding (1)

Weighted-average Class A equivalent common shares outstanding-assuming dilution (1)

earnings per share amounts have been adjusted retroactively for the effect of annual stock dividends.

The weighted-average shares outstanding

includes the weighted-average Class A common shares and the weighted-average Class C common shares determined on an equivalent Class

A common stock basis.

Net earnings per common share represent net earnings per equivalent Class A common share.

2 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Months Ended June 30

comprehensive income:

gains (losses) on fixed maturity securities available for sale

Three Months Ended

Nine Months Ended

Other comprehensive income:

Unrealized gains (losses) on fixed maturity securities available for sale

$ ( 1,406,615 )

gains (losses) on restricted assets

gains (losses) on cemetery perpetual care trust investments

currency translation adjustments

comprehensive income (loss), before income tax

( 3,477,826 )

tax benefit (expense)

Unrealized gains (losses) on restricted assets

Unrealized losses on cemetery perpetual care trust investments

Foreign currency translation adjustments

Other comprehensive income (loss), before income tax

( 1,425,235 )

comprehensive income (loss), net of income tax

( 3,507,600 )

Comprehensive

Income tax benefit (expense)

( 1,644,446 )

Other comprehensive income (loss), net of income tax

( 1,125,206 )

( 2,769,841 )

Comprehensive income

accompanying notes to condensed consolidated financial statements (unaudited).

1 unchanged sentence

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Months Ended June 30, 2021

A Common Stock

C Common Stock

Paid-in Capital

Other Comprehensive Income

Class A Common Stock

Class C Common Stock

Additional Paid-in Capital

Accumulated Other Comprehensive Income

Retained Earnings

Treasury Stock

Nine Months Ended September 30, 2021

Class A Common Stock

Class C Common Stock

Additional Paid-in Capital

Accumulated Other Comprehensive Income

Retained Earnings

Treasury Stock

January 1, 2021

$ 153,739,167

1 unchanged sentence

$ 263,987,053

comprehensive loss

Other comprehensive loss

( 5,388,522 )

compensation expense

Stock-based compensation expense

Exercise of stock options

of treasury stock

Class C to Class A

Sale of treasury stock

Purchase of treasury stock

Stock dividends

Conversion Class C to Class A

March 31, 2021

$ 165,867,882

1 unchanged sentence

$ 271,867,841

comprehensive income

Other comprehensive income

Exercise of stock options

of treasury stock

Sale of treasury stock

Purchase of treasury stock

( 2,596,006 )

Stock dividends

( 8,710,354 )

June 30, 2021

$ 168,415,007

1 unchanged sentence

$ 285,848,713

Months Ended June 30, 2020

A Common Stock

C Common Stock

Paid-in Capital

Other Comprehensive Income

Other comprehensive loss

( 1,125,206 )

Exercise of stock options

Sale of treasury stock

Purchase of treasury stock

Conversion Class C to Class A

Stock dividends

September 30, 2021

$ 179,195,423

comprehensive loss

$ ( 1,127,442 )

$ 296,716,168

compensation expense

NATIONAL FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Nine Months Ended September 30, 2020

Class A Common Stock

Class C Common Stock

Additional Paid-in Capital

Accumulated Other Comprehensive Income

Retained Earnings

Treasury Stock

January 1, 2020

$ 101,256,229

$ ( 1,580,582 )

$ 196,710,605

Other comprehensive loss

( 8,852,313 )

Stock-based compensation expense

Exercise of stock options

of treasury stock

Class C to Class A

Sale of treasury stock

Purchase of treasury stock

Stock dividends

Conversion Class C to Class A

March 31, 2020

$ 102,677,084

1 unchanged sentence

$ 189,712,263

comprehensive income

compensation expense

Other comprehensive income

Stock-based compensation expense

Exercise of stock options

of treasury stock

Sale of treasury stock

Purchase of treasury stock

Stock dividends

( 3,107,607 )

June 30, 2020

$ 120,126,524

1 unchanged sentence

$ 222,614,226

Beginning balance, value

$ 120,126,524

$ ( 1,542,276 )

$ 222,614,226

Other comprehensive income

Stock-based compensation expense

Sale of treasury stock

Purchase of treasury stock

Stock dividends

Conversion Class C to Class A

September 30, 2020

$ 149,428,819

$ ( 866,330 )

$ 256,045,957

Ending balance, value

$ 149,428,819

$ ( 866,330 )

$ 256,045,957

NATIONAL FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

Months Ended June 30

flows from operating activities:

cash provided by (used in) operating activities

Nine Months Ended September 30

Cash flows from operating activities:

Net cash provided by (used in) operating activities

$ 128,890,897

$ ( 164,589,158 )

flows from investing activities:

of fixed maturity securities

Cash flows from investing activities:

Purchases of fixed maturity securities

( 14,359,481 )

( 56,899,073 )

calls and maturities of fixed maturity securities

of equity securities

Sales, calls and maturities of fixed maturity securities

Purchases of equity securities

( 1,382,227 )

of equity securities

in restricted assets

( 6,492,243 )

in perpetual care trusts

loans held for investment, other investments and policy loans made

Sales of equity securities

Net changes in restricted assets

( 2,650,188 )

Net changes in perpetual care trusts

Mortgage loans held for investment, other investments and policy loans made

( 635,682,683 )

received for mortgage loans held for investment, other investments and policy loans

of property and equipment

( 486,189,616 )

of real estate

Payments received for mortgage loans held for investment, other investments and policy loans

Purchases of property and equipment

( 4,187,580 )

( 1,111,360 )

of real estate

cash used in investing activities

Sales of property and equipment

Purchases of real estate

( 70,404,325 )

( 27,528,643 )

flows from financing activities:

contract receipts

contract withdrawals

Sales of real estate

Net cash used in investing activities

( 80,155,707 )

( 12,708,707 )

from stock options exercised

of treasury stock

Cash flows from financing activities:

Investment contract receipts

Investment contract withdrawals

( 11,776,818 )

of bank loans

( 12,759,734 )

Proceeds from stock options exercised

Purchases of treasury stock

( 3,722,157 )

from bank loans

change in warehouse line borrowings for loans held for sale

( 1,100,827 )

cash provided by (used in) financing activities

Repayment of bank loans

( 54,454,529 )

change in cash, cash equivalents, restricted cash and restricted cash equivalents

( 251,041,466 )

cash equivalents, restricted cash and restricted cash equivalents at beginning of period

cash equivalents, restricted cash and restricted cash equivalents at end of period

Proceeds from bank loans

Net change in warehouse line borrowings for loans held for sale

( 77,374,340 )

Net cash provided by (used in) financing activities

( 41,176,509 )

Disclosure of Cash Flow Information:

paid during the year for:

taxes (net of refunds)

Cash Operating, Investing and Financing Activities:

real estate construction costs and retainage

plans funded with treasury stock

assets obtained in exchange for operating lease liabilities

loans held for investment foreclosed into real estate held for investment

of loans held for sale to mortgage loans held for investment

assets obtained in exchange for finance lease liabilities

Net change in cash, cash equivalents, restricted cash and restricted cash equivalents

Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period

Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period

$ 123,023,767

$ 161,475,839

Supplemental Disclosure of Cash Flow Information:

Cash paid during the year for:

Income taxes (net of refunds)

Non Cash Operating, Investing and Financing Activities:

Accrued real estate construction costs and retainage

Benefit plans funded with treasury stock

Right-of-use assets obtained in exchange for operating lease liabilities

Mortgage loans held for investment foreclosed into real estate held for investment

Transfer of loans held for sale to mortgage loans held for investment

Right-of-use assets obtained in exchange for finance lease liabilities

NATIONAL FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

CONSOLIDATED STATEMENTS OF CASH FLOWS

Reconciliation

1 unchanged sentence

flows is presented in the table below:

Months Ended June 30

and cash equivalents

Nine Months Ended September 30

Cash and cash equivalents

$ 111,498,676

$ 151,686,960

perpetual care trust investments

cash, cash equivalents, restricted cash and restricted cash equivalents

Restricted assets

Cemetery perpetual care trust investments

Total cash, cash equivalents, restricted cash and restricted cash equivalents

$ 123,023,767

4 unchanged sentences

30, 2021 (Unaudited)

of Presentation

Basis of Presentation

accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally

8 unchanged sentences

considered necessary for a fair presentation have been included.

Operating results for the three and six months ended June 30, 2021 are

not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

Operating results for the three and nine months ended September 30,

2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires

9 unchanged sentences

those used in determining

the value of mortgage loans foreclosed to real estate held for investment;

those used in determining the liability for future policy

benefits;those used in estimating other than temporary impairments on available for sale securities;

those used in determining the value

of mortgage servicing rights;those used in determining allowances for loan losses for mortgage loans held for investment;

in determining loan loss reserve;

the value of mortgage loans foreclosed to real estate held for investment or sale;

those used in determining the liability for future

policy benefits;

those used in estimating other than temporary impairments on available for sale securities;

those used in determining

the value of mortgage servicing rights;

those used in determining allowances for loan losses for mortgage loans held for investment;

those used in determining loan loss reserve;

and those used in determining deferred tax assets and liabilities.

Although some variability is inherent

in these estimates, management believes the amounts provided are fairly stated in all material respects.

Although some variability

is inherent in these estimates, management believes the amounts provided are fairly stated in all material respects.

During 2020, the outbreak of COVID-19 had spread worldwide and was declared a global pandemic by the World Health Organization on March

COVID-19 poses a threat to the health and economic well-being of the Company’s employees, customers, and vendors.

Company is closely monitoring developments relating to the COVID-19 pandemic and assessing its impact on the Company’s business.

The continued uncertainty surrounding the COVID-19 pandemic has had and continues to have a major impact on the global economy and financial

Governments and businesses have taken numerous measures to try to contain the virus, which include the implementation of travel

bans, self-imposed quarantine periods, and social distancing.

COVID-19, and its variants, pose a threat to the health and economic well-being of the Company’s employees, customers,

The Company is closely monitoring developments relating to the ongoing COVID-19 pandemic and assessing its impact on the

Company’s business.

The continued uncertainty surrounding the COVID-19 pandemic has had and continues to have a major impact on

the global economy and financial markets.

Governments and businesses have taken numerous measures to try to contain the virus and its

variants, which include the implementation of travel bans, self-imposed quarantine periods, social distancing, and various mask and vaccine

These measures have disrupted and will continue to disrupt businesses globally.

Governments and central banks have reacted with significant monetary and fiscal interventions designed to stabilize the economic conditions.

Governments and central banks have reacted

with significant monetary and fiscal interventions designed to stabilize the economic conditions.

most businesses, COVID-19 has impacted the Company.

7 unchanged sentences

the Company’s fixed maturity debt securities and individual borrowers with mortgage loans held by the Company.

Company has implemented risk management, business continuity plans and has taken preventive measures and other precautions, such as business

travel restrictions and remote work arrangements.

Company has implemented risk management, business continuity plans and has taken preventive measures and other precautions, including

some remote work arrangements.

Such measures and precautions have enabled the Company to continue to conduct business.

Accounting Pronouncements

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

Recent Accounting Pronouncements

Standards Adopted in 2020

34 unchanged sentences

In November 2020, the FASB issued an update to ASU No.

2018-12 that made the ASU effective for the Company

on January 1, 2025.

The Company is in the process of evaluating the potential impact of this standard.

2018-12 that made the ASU effective for the Company on January

The Company has engaged an industry software expert and is in the process of implementing this software and other changes to

The Company anticipates that it will be ready by the effective date.

Company has reviewed other recent accounting pronouncements and has determined that they will not significantly impact the Company’s

results of operations or financial position.

3) Investments

Company’s investments as of June 30, 2021 are summarized as follows:

Available for sale

Unrealized Gains

Unrealized Losses

maturity securities, available for sale, at estimated fair value:

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

Company’s investments as of September 30, 2021 are summarized as follows:

of Investments

Amortized Cost

Gross Unrealized Gains

Gross Unrealized Losses

Estimated Fair Value

September 30, 2021:

Fixed maturity securities, available for sale, at estimated fair value:

Treasury securities and obligations of U.S.

Government agencies

of states and political subdivisions

securities including public utilities

Mortgage-backed

preferred stock

fixed maturity securities available for sale

$ 233,569,650

Obligations of states and political subdivisions

Corporate securities including public utilities

Mortgage-backed securities

Redeemable preferred stock

Total fixed maturity securities available for sale

$ 238,809,528

$ ( 482,366 )

securities at estimated fair value:

miscellaneous and all other

$ 264,844,942

Equity securities at estimated fair value:

Common stock:

Industrial, miscellaneous and all other

$ ( 353,599 )

loans held for investment at amortized cost:

Total equity securities at estimated fair value

$ ( 353,599 )

Mortgage loans held for investment at amortized cost:

Residential construction

Unamortized deferred loan fees, net

3 unchanged sentences

Net discounts

mortgage loans held for investment

Total mortgage loans held for investment

$ 307,390,481

estate held for investment - net of accumulated depreciation:

real estate held for investment

Real estate held for investment - net of accumulated depreciation:

Total real estate held for investment

$ 189,610,360

estate held for sale:

Real estate held for sale:

investments and policy loans at amortized cost:

Home Loan Bank stock (1)

Total real estate held for sale

Other investments and policy loans at amortized cost:

Insurance assignments

Federal Home Loan Bank stock (1)

Other investments

Allowance for doubtful accounts

( 1,795,037 )

policy loans and other investments

investment income

Total policy loans and other investments

Accrued investment income

Total investments

$ 857,659,066

$905,700 of Membership stock and $2,199,440 of Activity stock due to short-term borrowings.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

3) Investments (Continued)

Company’s investments as of December 31, 2020 are summarized as follows:

Unrealized Gains

Unrealized Losses

maturity securities, available for sale, at estimated fair value:

Amortized Cost

Gross Unrealized Gains

Gross Unrealized Losses

Estimated Fair Value

December 31, 2020:

Fixed maturity securities, available for sale, at estimated fair value:

Treasury securities and obligations of U.S.

Government agencies

of states and political subdivisions

securities including public utilities

Mortgage-backed

preferred stock

fixed maturity securities available for sale

$ 265,150,484

Obligations of states and political subdivisions

Corporate securities including public utilities

Mortgage-backed securities

Redeemable preferred stock

Total fixed maturity securities available for sale

$ 265,150,484

$ ( 949,845 )

securities at estimated fair value:

miscellaneous and all other

$ 294,656,679

Equity securities at estimated fair value:

Common stock:

Industrial, miscellaneous and all other

$ ( 750,407 )

loans held for investment at amortized cost:

Total equity securities at estimated fair value

$ ( 750,407 )

Mortgage loans held for investment at amortized cost:

Residential construction

Unamortized deferred loan fees, net

4 unchanged sentences

( 1,260,896 )

mortgage loans held for investment

Total mortgage loans held for investment

$ 249,343,936

estate held for investment - net of accumulated depreciation:

real estate held for investment

Real estate held for investment - net of accumulated depreciation:

Total real estate held for investment

$ 131,684,453

estate held for sale:

Real estate held for sale:

investments and policy loans at amortized cost:

Home Loan Bank stock (1)

Total real estate held for sale

Other investments and policy loans at amortized cost:

Insurance assignments

Federal Home Loan Bank stock (1)

Other investments

Allowance for doubtful accounts

( 1,645,475 )

policy loans and other investments

investment income

Total policy loans and other investments

Accrued investment income

Total investments

$ 773,945,298

$866,900 of Membership stock and $1,639,700 of Activity stock due to short-term borrowings.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

3) Investments (Continued)

Maturity Securities

following tables summarize unrealized losses on fixed maturity securities available for sale, which were carried at estimated fair value,

at June 30, 2021 and December 31, 2020.

at September 30, 2021 and December 31, 2020.

The unrealized losses were primarily related to interest rate fluctuations and uncertainties

1 unchanged sentence

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

Schedule of Unrealized Loss

on Investments

Losses for Less than Twelve Months

Losses for More than Twelve Months

Unrealized Loss

June 30, 2021

of States and Political Subdivisions

and other asset-backed securities

unrealized losses

December 31, 2020

of States and Political Subdivisions

and other asset-backed securities

unrealized losses

were 51 securities with fair value of 97.2 %

of amortized cost at June 30, 2021.

Schedule of Unrealized Loss on Investments

Unrealized Losses for Less than Twelve Months

Unrealized Losses for More than Twelve Months

Total Unrealized Loss

At September 30, 2021

Obligations of States and Political Subdivisions

Corporate Securities

Mortgage and other asset-backed securities

Total unrealized losses

At December 31, 2020

Obligations of States and Political Subdivisions

Corporate Securities

Mortgage and other asset-backed securities

Total unrealized losses

were 51 securities with fair value of 97.4 % of amortized cost at September 30, 2021.

There were 63 securities with fair value of 94.7 %

of amortized cost at December 31, 2020.

No additional credit losses have been recognized for the three and six months ended June 30,

No additional credit losses have been recognized for the three and nine months ended September

30, 2021 and 2020.

19 unchanged sentences

the investments.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

3) Investments (Continued)

following table presents a rollforward of the Company's cumulative other than temporary credit impairments (“OTTI”) recognized

in earnings on fixed maturity securities available for sale for the six months ended June 30:

Schedule of earnings on fixed

maturity securities

of credit-related OTTI at January 1

for credit impairments recognized on:

not previously impaired

previously impaired

for credit impairments previously recognized on:

that matured or were sold during the period (realized)

due to an increase in expected cash flows

of credit-related OTTI at June 30

amortized cost and estimated fair value of fixed maturity securities available for sale at June 30, 2021, by contractual maturity, are

following table presents a rollforward of the Company’s cumulative other than temporary credit impairments (“OTTI”)

recognized in earnings on fixed maturity securities available for sale for the nine months ended September 30:

Schedule of Earnings on Fixed Maturity Securities

Balance of credit-related OTTI at January 1

Additions for credit impairments recognized on:

Securities not previously impaired

Securities previously impaired

Reductions for credit impairments previously recognized on:

Securities that matured or were sold during the period (realized)

Securities due to an increase in expected cash flows

Balance of credit-related OTTI at September 30

amortized cost and estimated fair value of fixed maturity securities available for sale at September 30, 2021, by contractual maturity,

are shown below.

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.

Investments Classified by

Contractual Maturity Date

in 5-10 years

in more than 10 years

Mortgage-backed

preferred stock

of Investments Classified by Contractual Maturity Date

Estimated Fair

Due in 1 year

Due in 2-5 years

Due in 5-10 years

Due in more than 10 years

Mortgage-backed securities

Redeemable preferred stock

$ 238,809,528

1 unchanged sentence

Company is a member of the Federal Home Loan Bank of Des Moines and Dallas (“FHLB”).

The Company pledged a total of $20,000,000,

par value, of United States Treasury fixed maturity securities with the FHLB at June 30, 2021.

These securities are used as collateral

on any cash borrowings from the FHLB.

As of June 30, 2021, the Company did not have any amounts outstanding with the FHLB and its estimated

remaining maximum borrowing capacity was $19,152,949.

The Company has pledged a total of $ 29,552,638 ,

par value, of United States Treasury and various Ginnie Mae fixed maturity securities with the FHLB at September 30, 2021.

These securities

are used as collateral on any cash borrowings from the FHLB.

As of September 30, 2021, the Company owed $ 14,443,758 to the FHLB and its

estimated remaining maximum borrowing capacity was $ 13,787,339 .

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

3) Investments (Continued)

2 unchanged sentences

other than temporary impairments are summarized as follows:

(Loss) on Investments

Months Ended June 30

maturity securities:

realized gains

realized losses

(losses) on securities sold

gains and (losses) on securities held at the end of the period

of Gain (Loss) on Investments

Three Months Ended

Nine Months Ended

Fixed maturity securities:

Gross realized gains

Gross realized losses

Equity securities:

Gains (losses) on securities sold

Unrealized gains and (losses) on securities held at the end of the period

Other assets:

Gross realized gains

Gross realized losses

( 1,297,086 )

realized gains

realized losses

( 1,784,419 )

$ ( 173,461 )

net realized gains and losses on the sale of securities are recorded on the trade date, and the cost of the securities sold is determined

1 unchanged sentence

regarding sales of fixed maturity securities available for sale is summarized as follows:

of Major categories of net investment income

Months Ended June 30

realized gains

realized losses

Schedule of Major Categories of Net Investment Income

Three Months Ended

Nine Months Ended

Proceeds from sales

Gross realized gains

Gross realized losses

categories of net investment income are as follows:

Months Ended June 30

maturity securities

loans held for investment

and cash equivalents

investment income

Three Months Ended

Nine Months Ended

Fixed maturity securities

Equity securities

Mortgage loans held for investment

Insurance assignments

Other investments

Cash and cash equivalents

Gross investment income

Investment expenses

( 3,162,092 )

2 unchanged sentences

( 10,021,552 )

investment income

investment income includes income earned by the restricted assets cemeteries and mortuaries of $ 190,668

and $ 140,093

for the three months

ended June 30, 2021 and 2020, respectively, and $ 351,879

and $ 250,732

for the six months ended

June 30, 2021 and 2020, respectively.

Net investment income

investment income includes income earned by the restricted assets cemeteries and mortuaries of $ 778,892 and $ 129,347 for the three months

ended September 30, 2021 and 2020, respectively, and $ 1,130,771 and $ 380,079 for the nine months ended September 30, 2021 and 2020, respectively.

investment income on real estate consists primarily of rental revenue.

1 unchanged sentence

expenses relating to investment activities.

on deposit with regulatory authorities as required by law amounted to $ 10,263,529

at June 30,2021 and $ 9,684,409

at December 31, 2020.

These restricted securities are included in various assets under investments on the accompanying condensed consolidated balance sheets.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

3) Investments (Continued)

on deposit with regulatory authorities as required by law amounted to $ 10,168,666 at September 30, 2021 and $ 9,684,409 at December 31,

These restricted securities are included in various assets under investments on the accompanying condensed consolidated balance

were no investments, aggregated by issuer, in excess of 10% of shareholders’ equity (before net unrealized gains and losses on

equity securities and fixed maturity securities) at June 30, 2021, other than investments issued or guaranteed by the United States Government.

equity securities and fixed maturity securities) at September 30, 2021, other than investments issued or guaranteed by the United States

Estate Held for Investment and Held for Sale

17 unchanged sentences

These properties include office buildings, a funeral home,

flex office space,and includes the redevelopment and expansion of its corporate campus (“Center 53”) in Salt Lake City, Utah.

flex office space, and includes the redevelopment and expansion of its corporate campus (“Center 53”) in Salt Lake City,

The Company also holds undeveloped land that may be used for future commercial developments.

1 unchanged sentence

cases to leverage established yields or to acquire a higher quality or different class of asset.

aggregated net ending balance of commercial real estate that serves as collateral for bank loans was $ 110,763,510

and $ 71,517,902

as of June 30, 2021 and

December 31, 2020, respectively.

The associated bank loan carrying values totaled $ 66,163,722

and $ 46,153,283

as of June 30, 2021 and

December 31, 2020, respectively.

the three months ended June 30, 2021 and 2020, the Company recorded impairment losses on commercial real estate held for sale of $ 28,378

and $ 15,551 ,

respectively.

During the six months ended June 30, 2021 and 2020, the Company recorded impairment losses on commercial real estate held

for sale of $ 28,378

and $ 46,980 ,

respectively.

These impairment losses relate to an office building and a funeral home held by the life insurance segment.

losses are included in gains (losses) on investment and other assets on the condensed consolidated statements of earnings.

aggregated net ending balance of commercial real estate that serves as collateral for bank loans was $ 124,940,289 and $ 71,517,902 as

of September 30, 2021 and December 31, 2020, respectively.

The associated bank loan carrying values totaled $ 75,989,280 and $ 46,153,283

as of September 30, 2021 and December 31, 2020, respectively.

the three months ended September 30, 2021 and 2020, the Company recorded impairment losses on commercial real estate held for sale of

$- 0 - and $ 800,000 , respectively.

During the nine months ended September 30, 2021 and 2020, the Company recorded impairment losses on

commercial real estate held for sale of $ 28,378 and $ 846,980 , respectively.

These impairment losses relate to an office building and

a funeral home held by the life insurance segment.

Impairment losses are included in gains (losses) on investment and other assets on

the condensed consolidated statements of earnings.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

3) Investments (Continued)

following is a summary of the Company’s commercial real estate held for investment for the periods presented:

Commercial Real Estate Investment

of Commercial Real Estate Investment

Net Ending Balance

Total Square Footage

September 30 2021

December 31 2020

September 30 2021

December 31 2020

$ 137,296,733

2 unchanged sentences

$ 106,840,710

(1) Includes Center53 phase 1 and phase

2, which is under construction.

The following

is a summary of the Company’s commercial real estate held for sale for the periods presented:

Includes Center53 phase 1 completed and phase 2, which is currently

under construction.

following is a summary of the Company’s commercial real estate held for sale for the periods presented:

Net Ending Balance

Total Square Footage

commercial pad

10 unchanged sentences

net ending balance of foreclosed residential real estate included in residential real estate held for investment and sale is $ 1,190,602

and $ 4,327,079

as of June 30, 2021 and

December 31, 2020, respectively.

the three and six months ended June 30, 2021 and 2020 the Company did no t

record any impairment losses on residential 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.

and $ 4,327,079 as of September 30, 2021 and December 31, 2020, respectively.

the three months ended September 30, 2021 and 2020 the Company did no t record any impairment losses on residential real estate held for

investment or held for sale.

During the nine months ended September 30, 2021 and 2020 the Company recorded impairment losses on residential

real estate held for investment of $- 0 - and $ 43,394 , respectively.

Impairment losses, if any, are included in gains (losses) on investment

and other assets on the condensed consolidated statements of earnings.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

3) Investments (Continued)

following is a summary of the Company’s residential real estate held for investment for the periods presented:

Real Estate Investment

of Residential Real Estate Investment

Net Ending Balance

Washington (2)

subdivision land developments

1 unchanged sentence

information regarding the Company’s subdivision land developments in Utah is summarized as follows:

available for sale

to be developed

Lots available for sale

Lots to be developed

Ending Balance

estimated remaining cost to complete the undeveloped lots is $ 42,965,000

and $ 17,354,000

as of June 30, 2021 and December 31, 2020,

respectively.

Investments (Continued)

following is a summary of the Company’s residential real estate held for sale for the periods presented:

4 unchanged sentences

primary business units of the Company occupy a portion of the real estate owned by the Company.

As of June 30, 2021, real estate owned

and occupied by the Company is summarized as follows:

Real Estate Owned and Occupied

by the Company

As of September 30, 2021, real estate

owned and occupied by the Company is summarized as follows:

of Real Estate Owned and Occupied by the Company

Business Segment

Square Footage

Footage Occupied by the Company

Approximate Square

Square Footage Occupied by the Company

Election Rd., Draper, UT

Offices, Life Insurance and

Corporate Offices, Life Insurance and

Cemetery/Mortuary Operations

5201 Green Street, Salt Lake City, UT (1)

Insurance and Mortgage Operations

Life Insurance and Mortgage Operations

1044 River Oaks Dr., Flowood, MS

Insurance Operations

Life Insurance Operations

1818 Marshall Street, Shreveport, LA (1)

Insurance Operations

Street, Alexandria, LA (1)

Insurance Sales

Street, Minden, LA (1)

Insurance Sales

Life Insurance Operations

909 Foisy Street, Alexandria, LA (1)

Life Insurance Sales

812 Sheppard Street, Minden, LA (1)

Life Insurance Sales

1550 N 3rd Street, Jena, LA (1)

Insurance Sales

(1) Included in property and equipment

on the condensed consolidated balance sheets

Mortgage Loans Held for Investment

Life Insurance Sales

Included in property and equipment on the condensed consolidated

balance sheets

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

3) Investments (Continued)

Loans Held for Investment

loans held for investment consist of first and second mortgages.

7 unchanged sentences

of its debtors’ ability to honor obligations is reliant on the economic stability of the geographic region in which the debtors

At June 30,2021, the Company had 60%, 13%, 8%, 4%, 3%,2%, 2% and 2% of its mortgage loans from borrowers located in the

states of Utah, Florida, Texas,Nevada, Arizona, Colorado, Hawaii, and Louisiana, respectively.

At September 30,2021, the Company had 62 % , 13 % , 5 % , 4 % , 2 % , 2 % and 2 % of its mortgage loans from borrowers located in the

states of Utah, Florida, Texas, Nevada, Arizona, Hawaii, and Louisiana, respectively.

At December 31, 2020, the Company had 57 % , 13 % ,

57%, 13%, 9%, 4%, 3% and 3% of its mortgage loans from borrowers located in the states of Utah, Florida, Texas, California, Nevada and

Arizona, respectively.

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 loan losses.

income is included in net investment income on the condensed consolidated statements of earnings and is recognized when earned.

defers related material loan origination fees, net of related direct loan origination costs, and amortizes the net fees over the term

of the loans.

Origination fees are included in net investment income on the condensed consolidated statements of earnings.

9 % , 4 % , 3 % and 3 % of its mortgage loans from borrowers located in the states of Utah, Florida, Texas, California, Nevada and Arizona,

respectively.

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 loan 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 term of the loans.

Origination fees are included in net investment income on the condensed

consolidated statements of earnings.

loans are secured by the underlying property and require an appraisal at the time of underwriting and funding.

11 unchanged sentences

based upon an assessment of the fair value of the underlying collateral.

addition, when a mortgage loan is past due more than 90 days, the Company does not accrue any interest income.

When a loan becomes delinquent,

the Company proceeds to foreclose on the real estate and all expenses for foreclosure are expensed as incurred.

Once foreclosed, an adjustment

for the lower of cost or fair value is made, if necessary, and the amount is classified as real estate held for investment or held for

In addition, when a mortgage loan is past due more than 90 days,

the Company does not accrue any interest income.

When a loan becomes delinquent, the Company proceeds to foreclose on the real estate

and all expenses for foreclosure are expensed as incurred.

Once foreclosed, an adjustment for the lower of cost or fair value is made,

if necessary, and the amount is classified as real estate held for investment or held for sale.

allowance for losses on mortgage loans held for investment could change based on changes in the value of the underlying collateral, the

20 unchanged sentences

dependent upon the success of the completed project and the ability of the borrower to secure long-term financing.

Additionally,

land is underwritten according to the Company’s policies, which include independent appraisal valuations as well as the estimated

value associated with the land upon completion of development into finished lots.

Additionally, land

is underwritten according to the Company’s policies, which include independent appraisal valuations as well as the estimated value

associated with the land upon completion of development into finished lots.

These cost and valuation estimates may be inaccurate.

These loans are considered to be 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.

loans are considered to be 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.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

3) Investments (Continued)

Company establishes a valuation allowance for credit losses in its mortgage loans held for investment portfolio.

1 unchanged sentence

of the allowance for loan losses as a contra-asset account for the periods presented:

Schedule of Allowance for

loan losses as a contra-asset account

for credit losses:

Beginning balance

- January 1, 2021

balance - June 30, 2021

Schedule of Allowance for Loan Losses as Contra-Asset Account

Residential Construction

September 30, 2021

Allowance for credit losses:

Beginning balance - January 1, 2021

Ending balance - September 30, 2021

Ending balance:

individually evaluated for impairment

Ending balance:

collectively evaluated for impairment

Mortgage loans:

Ending balance – September 30, 2021

$ 169,030,287

$ 310,661,878

Ending balance:

individually evaluated for impairment

Ending balance:

collectively evaluated for impairment

1 unchanged sentence

$ 306,916,156

for credit losses:

December 31, 2020

Allowance for credit losses:

Beginning balance - January 1, 2020

Ending balance – December 31, 2020

Ending balance:

individually evaluated for impairment

Ending balance:

collectively evaluated for impairment

balance - December 31, 2020

Mortgage loans:

Ending balance - December 31, 2020

$ 111,111,777

$ 253,771,091

Ending balance:

individually evaluated for impairment

Ending balance:

collectively evaluated for impairment

1 unchanged sentence

$ 243,488,621

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

3) Investments (Continued)

following is a summary of the aging of mortgage loans held for investment for the periods presented:

Schedule of aging of mortgage

Schedule of Aging of Mortgage Loans

September 30, 2021

30-59 Days Past Due

60-89 Days Past Due

Than 90 Days (1)

Process of Foreclosure (1)

Mortgage Loans

for Loan Losses

( 1,670,604 )

Greater Than 90 Days (1)

In Process of Foreclosure (1)

Total Past Due

Total Mortgage Loans

Allowance for Loan Losses

( 1,523,522 )

deferred loan fees, net

( 1,753,853 )

Unamortized deferred loan fees, net

( 1,013,925 )

discounts, net

Mortgage Loans

Unamortized discounts, net

Net Mortgage Loans

$ 168,696,882

$ 307,390,481

December 31, 2020

30-59 Days Past Due

60-89 Days Past Due

Than 90 Days (1)

Process of Foreclosure (1)

Mortgage Loans

for Loan Losses

Greater Than 90 Days (1)

In Process of Foreclosure (1)

Total Past Due

Total Mortgage Loans

Allowance for Loan Losses

( 1,774,796 )

( 2,005,127 )

deferred loan fees, net

Unamortized deferred loan fees, net

( 1,161,132 )

discounts, net

Unamortized discounts, net

( 1,260,896 )

Mortgage Loans

Net Mortgage Loans

$ 110,849,864

1 unchanged sentence

income is not recognized on loans past due greater than 90 days or in foreclosure.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

3) Investments (Continued)

5 unchanged sentences

period and the average recorded investment and interest income recognized during the time the loans were impaired were as follows:

Schedule of Impaired Mortgage

Principal Balance

Schedule of Impaired Mortgage Loans

Recorded Investment

Income Recognized

no related allowance recorded:

an allowance recorded:

no related allowance recorded:

an allowance recorded:

Unpaid Principal Balance

Related Allowance

Average Recorded Investment

Interest Income Recognized

September 30, 2021

With no related allowance recorded:

Residential construction

With an allowance recorded:

Residential construction

December 31, 2020

With no related allowance recorded:

Residential construction

With an allowance recorded:

Residential construction

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

3) Investments (Continued)

6 unchanged sentences

Company’s performing and non-performing mortgage loans held for investment were as follows:

Schedule Of Credit

Risk Of Mortgage Loans Based On Performance Status:

Schedule Of Credit Risk Of Mortgage Loans Based on Performance Status

Residential Construction

$ 169,030,287

14 unchanged sentences

Accrual of interest resumes if a loan is brought current.

Interest not accrued on these loans totals approximately $ 316,000

and $ 491,000

as of June 30, 2021 and December 31, 2020, respectively.

Interest not accrued on these loans totals approximately $ 265,000 and $ 491,000 as of September 30, 2021 and December 31, 2020, respectively.

following is a summary of mortgage loans held for investment on a non-accrual status for the periods presented.

Schedule of Mortgage loans

on a nonaccrual status

of December 31

Held for Sale

Schedule of Mortgage loans on a Nonaccrual Status

September 30 2021

December 31 2020

Residential construction

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

Loans Held for Sale

Company has elected the fair value option for loans held for sale.

5 unchanged sentences

following is a summary of the aggregate fair value and the aggregate unpaid principal balance of loans held for sale for the periods

Aggregate fair value - Loans

Held for Sale

of December 31 2020

Aggregate fair

of Aggregate fair value - Loans Held for Sale

September 30 2021

December 31 2020

Aggregate fair value

$ 312,655,843

$ 422,772,418

principal balance

Unpaid principal balance

Unrealized gain

fee income consists of origination fees, processing fees, interest income and certain other income related to the origination and sale

1 unchanged sentence

categories of mortgage fee income for loans held for sale are as follows:

of Mortgage Fee Income for Loans Held for Sale

Months Ended June 30

in fair value of loan commitments

in fair value of loans held for sale

( 1,114,632 )

Schedule of Mortgage Fee Income for Loans Held for Sale

Three Months Ended September 30

Nine Months Ended September 30

Interest income

Secondary gains

Change in fair value of loan commitments

Change in fair value of loans held for sale

( 8,319,820 )

for loan loss reserve

Provision for loan loss reserve

( 1,352,438 )

1 unchanged sentence

( 3,489,982 )

Mortgage fee income

$ 204,414,276

13 unchanged sentences

to the investor.

Held for Sale (Continued)

following is a summary of the loan loss reserve that is included in other liabilities and accrued expenses:

Schedule of loan loss reserve

which is included in other liabilities and accrued expenses

of December 31

Balance, beginning

on current loan originations (1)

provision for loan loss reserve

net of recaptured amounts

Summary of Loan Loss Reserve Included in Other Liabilities and Accrued Expenses

September 30 2021

December 31 2020

Balance, beginning of period

Provision on current loan originations (1)

Additional provision for loan loss reserve

Charge-offs, net of recaptured amounts

( 19,877,085 )

( 4,906,914 )

end of period

Balance, end of period

in mortgage fee income

Company maintains reserves for estimated losses on current production volumes.

For the six months ended June 30, 2021, $1,269,232 in

reserves were added at a rate of 4.5 basis points per loan, the equivalent of $450 per $1,000,000 in loans originated.

This is an increase

over the six months ended June 30, 2020, when reserves were added at a rate of 2.5 basis points per loan originated, the equivalent of

$250 per $1,000,000 in loans originated.

The Company also increased its loan loss reserve for the year ended December 31, 2020 by an

additional $16,506,030 to account for changes in estimates specific to settlements of loan losses.

Note 11 for additional information regarding mortgage loan loss settlements and charge-offs .

economic impact of COVID-19 and subsequent government action has increased the potential for losses due to early payoff penalties and

potential for losses due to increased delinquency.

The unique nature of these current events creates significant difficulty for forecasting

potential future losses.

The Company will continue to monitor data and economic conditions in order to maintain adequate loss reserves

on current production.

Thus, the Company believes that the final loan loss reserve as of June 30, 2021, represents its best estimate

for adequate loss reserves on loans sold.

Compensation Plans

For the nine months ended September 30, 2021, $ 1,701,700

in reserves were added.

The Company currently adds reserves a rate of 3.0 basis points per loan, the equivalent of $ 300 per $ 1,000,000

in loans originated.

This is a decrease over the nine months ended September 30, 2020, when reserves were added at a rate of 8.9 basis

points per loan originated, the equivalent of $ 890 per $ 1,000,000 in loans originated.

The Company also increased its loan loss reserve

for the year ended December 31, 2020 by an additional $ 16,506,030 to account for changes in estimates specific to settlements of loan

See Note 11 for additional information regarding mortgage loan loss settlements and charge-offs.

The unique nature of COVID-19

creates significant difficulty for forecasting potential future losses.

The Company will continue to monitor data and economic conditions

in order to maintain adequate loss reserves on current production.

Thus, the Company believes that the final loan loss reserve as of

September 30, 2021, represents its best estimate for adequate loss reserves on loans sold.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

Stock Compensation Plans

Company has two fixed option plans (the “2013 Plan” and the “2014 Director Plan”).

Compensation expense for options

issued of $ 0

and $ 101,520

has been recognized for

these plans for the three months ended June 30, 2021 and 2020, respectively, and $ 39,153

and $ 167,397

has been recognized for

these plans for the six months ended June 30, 2021 and 2020, respectively.

As of June 30, 2021, the total unrecognized compensation expense

related to the options issued was $ 0 .

issued of $- 0 - and $ 104,562 has been recognized for these plans for the three months ended September 30, 2021 and 2020, respectively,

and $ 39,153 and $ 271,959 has been recognized for these plans for the nine months ended September 30, 2021 and 2020, respectively.

of September 30, 2021, the total unrecognized compensation expense related to the options issued was $ 0 .

fair value of each option granted is estimated on the date of grant using the Black Scholes Option Pricing Model.

5 unchanged sentences

the expected life of the options is based upon the Federal Reserve Board’s daily interest rates in effect at the time of the grant.

summary of the status of the Company’s stock compensation plans as of June 30, 2021, and the changes during the six months ended

June 30, 2021, are presented below:

Schedule of stock inventive

summary of the status of the Company’s stock compensation plans as of September 30, 2021, and the changes during the nine months

ended September 30, 2021, are presented below:

Schedule of stock inventive plan changes

Class A Shares

Average Exercise Price

Weighted Average Exercise Price

Class C Shares

Average Exercise Price

at January 1, 2021

for effect of stock dividends

at June 30, 2021

As of June 30, 2021:

options for future grant

Weighted average contractual

term of options

at June 30, 2021

Weighted average contractual

term of options

at June 30, 2021

Aggregated intrinsic value

at June 30, 2021 (1)

Aggregated intrinsic value

at June 30, 2021 (1)

Company used a stock price of $8.33 as of June 30, 2021 to derive intrinsic value.

Weighted Average Exercise Price

Outstanding at January 1, 2021

Adjustment for effect of stock dividends

Outstanding at September 30, 2021

As of September 30, 2021:

Options exercisable

As of September 30, 2021:

Available options for future grant

Weighted average contractual term of options outstanding at September 30, 2021

Weighted average contractual term of options exercisable at September 30, 2021

Aggregated intrinsic value of options outstanding at September 30, 2021 (1)

Aggregated intrinsic value of options exercisable at September 30, 2021 (1)

Company used a stock price of $ 8.23 as of September 30, 2021 to derive intrinsic value.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

Stock Compensation Plans (Continued)

summary of the status of the Company’s stock compensation plans as of June 30, 2020, and the changes during the six months ended

June 30, 2020, are presented below:

summary of the status of the Company’s stock compensation plans as of September 30, 2020, and the changes during the nine months

ended September 30, 2020, are presented below:

Class A Shares

Average Exercise Price

Weighted Average Exercise Price

Class C Shares

Average Exercise Price

at January 1, 2020

for effect of stock dividends

at June 30, 2020

As of June 30, 2020:

options for future grant

Weighted average contractual

term of options

at June 30, 2020

Weighted average contractual

term of options

at June 30, 2020

Aggregated intrinsic value

at June 30, 2020 (1)

Aggregated intrinsic value

at June 30, 2020 (1)

Company used a stock price of $6.58 as of June 30, 2020 to derive intrinsic value.

Weighted Average Exercise Price

Outstanding at January 1, 2020

Adjustment for effect of stock dividends

Outstanding at September 30, 2020

As of September 30, 2020:

Options exercisable

As of September 30, 2020:

Available options for future grant

Weighted average contractual term of options outstanding at September 30, 2020

Weighted average contractual term of options exercisable at September 30, 2020

Aggregated intrinsic value of options outstanding at September 30, 2020 (1)

Aggregated intrinsic value of options exercisable at September 30, 2020 (1)

The Company used a stock price of $ 6.40 as of September 30,

2020 to derive intrinsic value.

total intrinsic value (which is the amount by which the fair value of the underlying stock exceeds the exercise price of an option on

the exercise date) of stock options exercised during the six months June 30, 2021 and 2020 was $434,318 and $191,656, respectively.

the exercise date) of stock options exercised during the nine months September 30, 2021 and 2020 was $ 591,603 and $ 191,309 , respectively.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

Earnings Per Share

basic and diluted earnings per share amounts were calculated as follows:

of Earnings Per Share, Basic and Diluted

weighted-average shares outstanding

dilutive securities:

Employee stock

weighted-average shares outstanding

net earnings per share

Schedule of Earnings Per Share, Basic and Diluted

Three Months Ended September 30

Nine Months Ended September 30

Basic weighted-average shares outstanding

Effect of dilutive securities:

Employee stock options

Diluted weighted-average shares outstanding

Basic net earnings per share

Diluted net earnings per share

earnings per share amounts have been retroactively adjusted for the effect of annual stock dividends.

For the six months June 30, 2021

and 2020,there were 0

of anti-dilutive employee

stock option shares, respectively, that were not included in the computation of diluted net earnings per common share as their effect

would be anti-dilutive.

Basic and diluted earnings per share amounts are the same for each class of common stock.

For the nine months September 30,

2021 and 2020, there were - 0 - and - 0 - of anti-dilutive employee stock option shares, respectively, that were not included in the computation

of diluted net earnings per common share as their effect would be anti-dilutive.

Basic and diluted earnings per share amounts are the

same for each class of common stock.

following table summarizes the activity in shares of capital stock for the periods presented:

Schedule of Activity of Stock

shares at December 31, 2019

of stock options

of Class C to Class A

shares at June 30, 2020

Schedule of Activity of Stock Option Plans

Outstanding shares at December 31, 2019

of stock options

of Class C to Class A

shares at June 30, 2021

Segment Information

Exercise of stock options

Stock dividends

Conversion of Class C to Class A

Outstanding shares at September 30, 2020

Outstanding shares at December 31, 2020

Exercise of stock options

Stock dividends

Conversion of Class C to Class A

Outstanding shares at September 30, 2021

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

Business Segment Information

of Products and Services by Segment

20 unchanged sentences

to determine when other business segments may need to be reported.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

Business Segment Information (Continued)

Schedule of Revenues and

Expenses by Reportable Segment

of Revenues and Expenses by Reportable Segment

Life Insurance

For the Three Months Ended

from external customers

September 30, 2021

Revenues from external customers

$ 119,509,131

Intersegment revenues

( 1,989,458 )

profit before income taxes

Segment profit before income taxes

For the Three Months Ended

from external customers

September 30, 2020

Revenues from external customers

$ 101,447,531

$ 146,204,565

profit before income taxes

For the Six Months Ended

from external customers

Intersegment revenues

( 3,200,822 )

Segment profit before income taxes

For the Nine Months Ended

September 30, 2021

Revenues from external customers

$ 121,640,865

$ 216,764,653

profit before income taxes

$ 358,918,052

Intersegment revenues

( 6,115,280 )

Segment profit before income taxes

Identifiable Assets

1,241,514,729

2 unchanged sentences

1,244,280,299

For the Six Months Ended

from external customers

( 78,248,809 )

1,558,325,980

For the Nine Months Ended

September 30, 2020

Revenues from external customers

$ 110,255,399

profit before income taxes

$ 219,403,866

$ 344,475,256

Intersegment revenues

( 6,509,521 )

Segment profit before income taxes

Identifiable Assets

1,232,786,760

1 unchanged sentence

1,643,678,399

Value of Financial Instruments

1,235,552,330

( 88,204,200 )

1,647,197,987

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

Fair Value of Financial Instruments

defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal

9 unchanged sentences

Quoted prices for similar assets or liabilities in active markets;

prices for identical or similar assets or liabilities in non-active markets;

Quoted prices for identical or similar assets or liabilities in non-active markets;

Valuation models whose inputs are observable, directly or indirectly, for substantially the full term of the asset or liability.

Financial assets and financial liabilities whose values are based on prices or valuation techniques that require inputs that

are both unobservable and significant to the overall fair value measurement.

These inputs may reflect the Company’s estimates of

the assumptions that market participants would use in valuing the financial assets and financial liabilities.

Financial assets and financial liabilities whose values are based on prices or valuation techniques that require inputs that are

both unobservable and significant to the overall fair value measurement.

These inputs may reflect the Company’s estimates of the

assumptions that market participants would use in valuing the financial assets and financial liabilities.

Company utilizes a combination of third-party valuation service providers, brokers, and internal valuation models to determine fair value.

21 unchanged sentences

The fair values for call and put options are based on quoted market prices.

Value of Financial Instruments (Continued)

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

Fair Value of Financial Instruments (Continued)

items shown under Level 3 are valued as follows:

22 unchanged sentences

Mortgage Loans Held for Investment :

believes that the fair value of these nonperforming loans will approximate the unpaid principal balance expected to be recovered based

on the fair value of the underlying collateral.

For residential and commercial properties, the collateral value is estimated by

obtaining an independent appraisal.

The appraisal typically considers area comparables and property condition as well as potential

rental income that could be generated (particularly for commercial properties).

For residential construction loans, the collateral

is typically incomplete, so fair value is estimated as the replacement cost using data from a provider of building cost information to

the real estate construction.

The Company believes that the fair value of these nonperforming loans will approximate the

unpaid principal balance expected to be recovered based on the fair value of the underlying collateral.

For residential and commercial

properties, the collateral value is estimated by obtaining an independent appraisal.

The appraisal typically considers area comparables

and property condition as well as potential rental income that could be generated (particularly for commercial properties).

For residential

construction loans, the collateral is typically incomplete, so fair value is estimated as the replacement cost using data from a provider

of building cost information to the real estate construction.

Real Estate Held for Investment :

believes that in an orderly market, fair value will approximate the replacement cost of a home and the rental income provides a cash

flow stream for investment analysis.

The Company believes the highest and best use of the properties are as income producing assets since

it is the Company’s intent to hold the properties as rental properties, matching the income from the investment in rental properties

with the funds required for future estimated policy claims.

The Company believes that in an orderly market, fair value will approximate the replacement

cost of a home and the rental income provides a cash flow stream for investment analysis.

The Company believes the highest and best use

of the properties are as income producing assets since it is the Company’s intent to hold the properties as rental properties,

matching the income from the investment in rental properties with the funds required for future estimated policy claims.

should be noted that for replacement cost, when determining the fair value of real estate held for investment, the Company uses a provider

12 unchanged sentences

See Note 12 for more information regarding MSRs.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

Fair Value of Financial Instruments (Continued)

following tables summarize Level 1, 2 and 3 financial assets and financial liabilities measured at fair value on a recurring basis by

their classification in the condensed consolidated balance sheet at June 30, 2021.

Schedule of fair value assets

and liabilities measured on a recurring basis

Prices in Active Markets for Identical Assets

Observable Inputs

Unobservable Inputs

accounted for at fair value on a

recurring basis

maturity securities available for sale

their classification in the condensed consolidated balance sheet at September 30, 2021.

of Fair Value Assets and Liabilities Measured on a Recurring Basis

Quoted Prices in Active Markets for Identical Assets

Significant Observable Inputs

Significant Unobservable Inputs

Assets accounted for at fair value on a recurring basis

Fixed maturity securities available for sale

$ 264,844,942

$ 262,794,121

held for sale

perpetual care trust investments (1)

perpetual care trust investments (2)

- loan commitments (3)

assets accounted for at fair value on a recurring basis

Equity securities

Loans held for sale

Restricted assets (1)

Restricted assets (2)

Cemetery perpetual care trust investments (1)

Cemetery perpetual care trust investments (2)

Derivatives - loan commitments (3)

Total assets accounted for at fair value on a recurring basis

$ 606,396,534

1 unchanged sentence

$ 325,102,842

accounted for at fair value on a

recurring basis

- call options (4)

- loan commitments (4)

liabilities accounted for at fair value

on a recurring basis

Liabilities accounted for at fair value on a recurring basis

Derivatives - call options (4)

Derivatives – put options (4)

Derivatives - loan commitments (4)

Total liabilities accounted for at fair value on a recurring basis

$ ( 857,235 )

$ ( 816,661 )

Fixed maturity securities available

Equity securities

maturity securities available for sale

in other assets on the consolidated balance sheets

Included in other liabilities

and accrued expenses on the consolidated balance sheets

in other liabilities and accrued expenses on the consolidated balance sheets

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

Fair Value of Financial Instruments (Continued)

following tables summarize Level 1, 2 and 3 financial assets and financial liabilities measured at fair value on a recurring basis by

3 unchanged sentences

Unobservable Inputs

accounted for at fair value on a

recurring basis

accounted for at fair value on a recurring basis

maturity securities available for sale

$ 294,656,679

$ 292,455,504

held for sale

2 unchanged sentences

- loan commitments (3)

assets accounted for at fair value on a

recurring basis

$ 748,145,493

$ 294,676,908

$ 437,566,265

accounted for at fair value on a

recurring basis

assets accounted for at fair value on a recurring basis

accounted for at fair value on a recurring basis

- call options (4)

- loan commitments (4)

( 2,464,062 )

liabilities accounted for at fair value

on a recurring basis

$ ( 2,507,159 )

$ ( 2,464,062 )

Fixed maturity securities available

Equity securities

Included in other assets on

the consolidated balance sheets

Included in other liabilities

and accrued expenses on the consolidated balance sheets

Level 3 assets and liabilities measured at fair value on a recurring basis as of June 30, 2021, the significant unobservable inputs used

in the fair value measurements were as follows:

Assets and liabilities measured

at fair value on a recurring basis

liabilities accounted for at fair value on a recurring basis

maturity securities available for sale

in other assets on the consolidated balance sheets

in other liabilities and accrued expenses on the consolidated balance sheets

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

Fair Value of Financial Instruments (Continued)

Level 3 assets and liabilities measured at fair value on a recurring basis as of September 30, 2021, the significant unobservable inputs

used in the fair value measurements were as follows:

Assets and Liabilities Measured at Fair Value on A Recurring Basis

Range of Inputs

Fair Value at

held for sale

Loans held for sale

$ 312,655,843

contract pricing as a percentage of unpaid principal balance

- loan commitments (net)

Market approach

Investor contract pricing as a percentage of unpaid principal balance

Derivatives - loan commitments (net)

Market approach

Pull-through rate

Initial-Value

maturity securities available for sale

Fixed maturity securities available for sale

Broker quotes

Pricing quotes

Level 3 assets and liabilities measured at fair value on a recurring basis as of December 31, 2020, the significant unobservable inputs

used in the fair value measurements were as follows:

Range of Inputs

Fair Value at

held for sale

Loans held for sale

$ 422,772,418

contract pricing as a percentage of unpaid principal balance

- loan commitments (net)

Market approach

Investor contract pricing as a percentage of unpaid principal balance

Derivatives - loan commitments (net)

Market approach

Pull-through rate

Initial-Value

maturity securities available for sale

Fixed maturity securities available for sale

Broker quotes

Pricing quotes

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

Fair Value of Financial Instruments (Continued)

is a summary of changes in the condensed consolidated balance sheet line items measured using level 3 inputs for the periods presented:

Schedule of Changes in the

consolidated balance sheet line items measured using level 3 inputs

Loan Commitments

Held for Sale

Maturity Securities Available for Sale

Schedule of Changes in the Consolidated Balance Sheet Line Items Measured Using Level 3 Inputs

Net Loan Commitments

Loans Held for Sale

Fixed Maturity Securities

Available for Sale

Balance - December 31, 2020

$ 422,772,418

and purchases

Originations and purchases

4,243,072,600

maturities and paydowns

Sales, maturities and paydowns

( 4,484,170,804 )

to mortgage loans held for investment

gains (losses):

Transfer to mortgage loans held for investment

Total gains (losses):

Included in earnings

( 549,093 )(1)

131,183,580 (1)

in other comprehensive income

- June 30, 2021

Included in other comprehensive income

Balance – September 30, 2021

$ 312,655,843

2 unchanged sentences

is a summary of changes in the condensed consolidated balance sheet line items measured using level 3 inputs for the periods presented:

Loan Commitments

Held for Sale

Maturity Securities Available for Sale

Net Loan Commitments

Loans Held for Sale

Fixed Maturity Securities Available for Sale

Balance - December 31, 2019

$ 213,457,632

and purchases

Originations and purchases

3,824,329,264

maturities and paydowns

Sales, maturities and paydowns

( 3,709,992,155 )

( 1,031,500 )

to mortgage loans held for investment

Transfer to mortgage loans held for investment

( 9,170,610 )

gains (losses):

Total gains (losses):

Included in earnings

12,454,218 (1)

127,254,848 (1)

in other comprehensive income

- June 30, 2020

Included in other comprehensive income

Balance - September 30, 2020

$ 445,878,979

a component of Mortgage fee income on the condensed consolidated statements of earnings

a component of Net investment income on the condensed consolidated statements of earnings

As a component of Mortgage fee income on the condensed consolidated

statements of earnings

As a component of Net investment income on the condensed consolidated

statements of earnings

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

Fair Value of Financial Instruments (Continued)

is a summary of changes in the condensed consolidated balance sheet line items measured using level 3 inputs for the periods presented:

Loan Commitments

Held for Sale

Maturity Securities Available for Sale

Balance - March

$ 304,030,372

and purchases

Net Loan Commitments

Loans Held for Sale

Fixed Maturity Securities Available for Sale

Balance - June 30, 2021

$ 296,728,086

maturities and paydowns

Originations and purchases

1,432,842,093

to mortgage loans held for investment

gains (losses):

Sales, maturities and paydowns

( 1,459,143,727 )

Transfer to mortgage loans held for investment

Total gains (losses):

Included in earnings

( 380,696 )(1)

in other comprehensive income

- June 30, 2021

Included in other comprehensive income

Balance - September 30, 2021

$ 312,655,843

1 unchanged sentence

a component of Net investment income on the condensed consolidated statements of earnings

Following is a summary

of changes in the condensed consolidated balance sheet line items measured using level 3 inputs for the periods presented:

Loan Commitments

Held for Sale

Maturity Securities Available for Sale

Balance - March

$ 281,052,576

and purchases

is a summary of changes in the condensed consolidated balance sheet line items measured using level 3 inputs for the periods presented:

Net Loan Commitments

Loans Held for Sale

Fixed Maturity Securities Available for Sale

Balance - June 30, 2020

$ 356,949,958

maturities and paydowns

Originations and purchases

1,719,281,234

Sales, maturities and paydowns

( 1,692,015,364 )

to mortgage loans held for investment

gains (losses):

Transfer to mortgage loans held for investment

Total gains (losses):

Included in earnings

3,901,086 (1)

61,900,085 (1)

in other comprehensive income

- June 30, 2020

Included in other comprehensive income

Balance - September 30, 2020

$ 445,878,979

1 unchanged sentence

a component of Net investment income on the condensed consolidated statements of earnings

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

Fair Value of Financial Instruments (Continued)

following tables summarize Level 1, 2 and 3 financial assets and financial liabilities measured at fair value on a nonrecurring basis

by their classification in the condensed consolidated balance sheet at June 30, 2021.

Fair Value Assets Measured

on a Nonrecurring Basis

Prices in Active Markets for Identical Assets

Observable Inputs

Unobservable Inputs

accounted for at fair value on a nonrecurring basis

mortgage loans held for investment

real estate held for sale

by their classification in the condensed consolidated balance sheet at September 30, 2021.

of Fair Value Assets Measured on a Nonrecurring Basis

Quoted Prices in Active Markets for Identical Assets

Significant Observable Inputs

Significant Unobservable Inputs

Assets accounted for at fair value on a nonrecurring basis

Impaired mortgage loans held for investment

Impaired real estate held for sale

Total assets accounted for at fair value on a nonrecurring basis

following tables summarize Level 1, 2 and 3 financial assets and financial liabilities measured at fair value on a nonrecurring basis

by their classification in the condensed consolidated balance sheet at December 31, 2020.

Prices in Active Markets for Identical Assets

Observable Inputs

Unobservable Inputs

accounted for at fair value on a nonrecurring basis

mortgage loans held for investment

real estate held for sale

Quoted Prices in Active Markets for Identical Assets

Significant Observable Inputs

Significant Unobservable Inputs

Assets accounted for at fair value on a nonrecurring basis

Impaired mortgage loans held for investment

Impaired real estate held for sale

Total assets accounted for at fair value on a nonrecurring basis

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

Fair Value of Financial Instruments (Continued)

Value of Financial Instruments Carried at Other Than Fair Value

5 unchanged sentences

Therefore, for substantially all financial instruments, the fair value estimates presented herein are not

necessarily indicative of the amounts the Company could have realized in a sales transaction at June 30, 2021 and December 31, 2020.

necessarily indicative of the amounts the Company could have realized in a sales transaction at September 30, 2021 and December 31, 2020.

carrying values and estimated fair values for such financial instruments, and their corresponding placement in the fair value hierarchy,

are summarized as follows as of June 30, 2021:

Schedule of Financial Instruments

Carried at Other Than Fair Value

Estimated Fair Value

loans held for investment

loans held for investment, net

are summarized as follows as of September 30, 2021:

Schedule of Financial Instruments Carried at Other Than Fair Value

Carrying Value

Total Estimated Fair Value

Mortgage loans held for investment

Residential construction

Mortgage loans held for investment, net

$ 307,390,481

1 unchanged sentence

$ 310,808,152

assignments, net (1)

perpetual care trust investments (2)

servicing rights, net

and other loans payable

Insurance assignments, net (1)

Restricted assets (2)

Cemetery perpetual care trust investments (2)

Mortgage servicing rights, net

Bank and other loans payable

$ ( 263,186,923 )

1 unchanged sentence

$ ( 263,186,923 )

account balances (3)

Policyholder account balances (3)

( 43,058,156 )

1 unchanged sentence

( 42,144,499 )

policy benefits - annuities (3)

Future policy benefits - annuities (3)

( 108,252,697 )

4 unchanged sentences

in future policy benefits and unpaid claims

The carrying values

and estimated fair values for such financial instruments, and their corresponding placement in the fair value hierarchy, are summarized

as follows as of December 31, 2020:

Estimated Fair Value

loans held for investment

carrying values and estimated fair values for such financial instruments, and their corresponding placement in the fair value hierarchy,

are summarized as follows as of December 31, 2020:

Carrying Value

Total Estimated Fair Value

Mortgage loans held for investment

$ 100,384,283

loans held for investment, net

Residential construction

Mortgage loans held for investment, net

$ 249,343,936

1 unchanged sentence

$ 256,493,572

assignments, net (1)

perpetual care trust investments (2)

servicing rights, net

and other loans payable

Insurance assignments, net (1)

Restricted assets (2)

Cemetery perpetual care trust investments (2)

Mortgage servicing rights, net

Bank and other loans payable

$ ( 297,824,368 )

1 unchanged sentence

$ ( 297,824,368 )

account balances (3)

Policyholder account balances (3)

( 44,026,809 )

1 unchanged sentence

( 42,220,725 )

policy benefits - annuities (3)

Future policy benefits - annuities (3)

( 106,522,113 )

4 unchanged sentences

in future policy benefits and unpaid claims on the condensed consolidated balance sheets

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

Fair Value of Financial Instruments (Continued)

methods, assumptions and significant valuation techniques and inputs used to estimate the fair value of these financial instruments are

10 unchanged sentences

were sold recently.

Construction – These loans are primarily short in maturity.Accordingly, the estimated fair value is determined to be the carrying

Construction – These loans are primarily short in maturity.

Accordingly, the estimated fair value is determined to be the carrying

– The estimated fair value is determined by estimating expected future cash flows of payments and discounting them using current

6 unchanged sentences

and Other Loans Payable :

The carrying amounts reported in the accompanying condensed consolidated

balance sheet for these financial instruments approximate their fair values due to their relatively short-term maturities and variable

interest rates.

The carrying amounts reported in the accompanying condensed consolidated balance sheet for these financial

instruments approximate their fair values due to their relatively short-term maturities and variable interest rates.

Account Balances and Future Policy Benefits-Annuities :

Future policy benefit reserves for

interest-sensitive insurance products are computed under a retrospective deposit method and represent policy account balances before

applicable surrender charges.

Policy benefits and claims that are charged to expense include benefit claims incurred in the period in

excess of related policy account balances.

Interest crediting rates for interest-sensitive insurance products ranged from 1.5% to 6.5%.

The fair values for these investment-type insurance contracts are estimated based on the present value of liability cash flows.The fair

values for the Company’s insurance contracts other than investment-type contracts are not required to be disclosed.

fair values of liabilities under all insurance contracts are taken into consideration in the Company’s overall management of interest

rate risk, such that the Company’s exposure to changing interest rates is minimized through the matching of investment maturities

with amounts due under insurance contracts.

for Doubtful Accounts

Future policy benefit reserves for interest-sensitive insurance products

are computed under a retrospective deposit method and represent policy account balances before applicable surrender charges.

Policy benefits

and claims that are charged to expense include benefit claims incurred in the period in excess of related policy account balances.

crediting rates for interest-sensitive insurance products ranged from 1.5% to 6.5%.

The fair values for these investment-type insurance

contracts are estimated based on the present value of liability cash flows.

The fair values for the Company’s insurance contracts

other than investment-type contracts are not required to be disclosed.

However, the fair values of liabilities under all insurance contracts

are taken into consideration in the Company’s overall management of interest rate risk, such that the Company’s exposure

to changing interest rates is minimized through the matching of investment maturities with amounts due under insurance contracts.

Allowance for Doubtful Accounts

Company records an allowance and recognizes an expense for potential losses from other investments and receivables in accordance with

8 unchanged sentences

overall economy

10) Derivative

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

Derivative Instruments

Banking Derivatives

54 unchanged sentences

and accrued expenses on the condensed consolidated balance sheets.

following table shows the notional amount and fair value of derivatives as of June 30, 2021 and December 31, 2020.

Schedule of Derivative Assets

at Fair Value

Values and Notional Values of Derivative Instruments

Sheet Location

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

10) Derivative

Instruments (Continued)

following table shows the notional amount and fair value of derivatives as of September 30, 2021 and December 31, 2020.

Schedule of Derivative Assets at Fair Value

Fair Values and Notional Values of Derivative Instruments

September 30, 2021

December 31, 2020

Balance Sheet Location

Notional Amount

Asset Fair Value

Liability Fair Value

Notional Amount

Asset Fair Value

Liability Fair Value

Derivatives not designated as hedging instruments:

assets and Other liabilities

Loan commitments

Other assets and Other liabilities

$ 1,085,101,600

$ 659,245,038

Other liabilities

$ 1,086,799,100

1 unchanged sentence

following table shows the gains and losses on derivatives for the periods presented.

of Gains and Losses on Derivatives

Net Amount Gain

Months Ended June 30

Schedule of Gains and Losses on Derivatives

Net Amount Gain (Loss)

Three Months Ended September 30

Nine Months Ended September 30

Classification

Loan commitments

Mortgage fee income

$ ( 380,696 )

$ ( 549,093 )

and put options

on investments and other assets

Call and put options

Gains on investments and other assets

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

Reinsurance, Commitments and Contingencies

8 unchanged sentences

The estimated liability for indemnification

losses is included in other liabilities and accrued expenses and, as of June 30, 2021 and December 31, 2020, the balances were $ 2,412,652

and $ 20,583,618 ,

respectively.

The Company believes that the final loan loss reserve as of June 30, 2021, represents its best estimate for adequate loss

reserves on loans sold.

losses is included in other liabilities and accrued expenses and, as of September 30, 2021 and December 31, 2020, the balances were $ 2,408,233

and $ 20,583,618 , respectively.

The Company believes that the final loan loss reserve as of September 30, 2021, represents its best estimate

for adequate loss reserves on loans sold.

Loan Loss Litigation

Agreement and Mutual Release with Lehman Brothers Holdings Inc.

2004 to early 2008, Security National Mortgage Company (“Security National Mortgage”), a wholly owned subsidiary of the Company,

2004 to early 2008, SecurityNational Mortgage Company (“SecurityNational Mortgage”), a wholly owned subsidiary of the Company,

originated “limited documentation” or “reduced documentation” loans which were sold to certain affiliates of

1 unchanged sentence

(“Lehman Holdings”).

Certain of these loans became the subject of disputes between Security

National Mortgage and Lehman Holdings and certain Lehman Holdings affiliates.

Lehman Holdings filed a Petition for Relief under Chapter

11 of the United States Bankruptcy Code in 2008.

In May of 2011, Security National Mortgage filed a complaint in U.S.

District Court

against certain Lehman Holdings affiliates.

In June of 2011, Lehman Holdings filed a complaint in Federal District Court against

Security National Mortgage, both of which were later resolved.

In 2016, certain other pending loan disputes between Security National

Mortgage and Lehman Holdings became the subject of an unsuccessful, non-binding alternate dispute resolution mediation proceeding.

in 2016, Lehman Holdings filed an adversary proceeding complaint against approximately 150 mortgage loan originators, including Security

National Mortgage, in the U.S.

Bankruptcy Court of the Southern District of New York, which included seeking damages relating to the

alleged obligations of the defendants under indemnification provisions of alleged agreements, in amounts to be determined at trial, including

interest, attorneys’ fees and costs incurred by Lehman Holdings in enforcing the obligations of the defendants.

The complaint was

later amended with the latest amended complaint filed against Security National Mortgage on December 27, 2016, seeking damages to be

determined at trial, including interest, attorneys’ fees and costs.

This complaint involved approximately 135 mortgage loans, there

being millions of dollars allegedly in dispute.

These claims against Security National Mortgage were asserted as a result of Lehman Holdings’

earlier settlements with the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Corporation (“Freddie

2018, Lehman Holdings filed a separate adversary proceeding complaint against Security National Mortgage.

This adversary proceeding

allegedly involved approximately 577 mortgage loans relative to private securitization trusts (“RMBS Loans”) and

millions of dollars in damages.

Certain of these loans became the subject of disputes between SecurityNational

Mortgage and Lehman Holdings and certain Lehman Holdings affiliates.

Lehman Holdings filed a Petition for Relief under Chapter 11 of

the United States Bankruptcy Code in 2008.

In May of 2011, SecurityNational Mortgage filed a complaint in U.S.

District Court against

certain Lehman Holdings affiliates.

In June of 2011, Lehman Holdings filed a complaint in Federal District Court against SecurityNational

Mortgage, both of which were later resolved.

In 2016, certain other pending loan disputes between SecurityNational Mortgage and Lehman

Holdings became the subject of an unsuccessful, non-binding alternate dispute resolution mediation proceeding.

in 2016, Lehman Holdings filed an adversary proceeding complaint against approximately 150 mortgage loan originators, including SecurityNational

Mortgage, in the U.S.

Bankruptcy Court of the Southern District of New York, which included seeking damages relating to the alleged obligations

of the defendants under indemnification provisions of alleged agreements, in amounts to be determined at trial, including interest, attorneys’

fees and costs incurred by Lehman Holdings in enforcing the obligations of the defendants.

The complaint was later amended with the latest

amended complaint filed against SecurityNational Mortgage on December 27, 2016, seeking damages to be determined at trial, including

interest, attorneys’ fees and costs.

This complaint involved approximately 135 mortgage loans, there being millions of dollars

allegedly in dispute.

These claims against SecurityNational Mortgage were asserted as a result of Lehman Holdings’ earlier settlements

with the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Corporation (“Freddie Mac”).

2018, Lehman Holdings filed a separate adversary proceeding complaint against SecurityNational Mortgage.

This adversary proceeding allegedly

involved approximately 577 mortgage loans relative to private securitization trusts (“RMBS Loans”) and millions of dollars

Thereafter, Lehman Holdings made a filing that effectively reduced the number of RMBS Loans to 248.

This proceeding was in addition to the above-referenced proceeding involving the Fannie Mae and Freddie Mac mortgage loans.

the above-referenced proceeding, damages were sought including interest, costs, and attorneys’ fees.

National Mortgage, as well as other defendants, have been involved in written discovery, and production of documents relative to the

cases, and the filing of motions.

This proceeding was in

addition to the above-referenced proceeding involving the Fannie Mae and Freddie Mac mortgage loans.

As with the above-referenced proceeding,

damages were sought including interest, costs, and attorneys’ fees.

SecurityNational

Mortgage, as well as other defendants, have been involved in written discovery, and production of documents relative to the cases, and

the filing of motions.

The deposition phase of the cases was yet to begin, as well as the later expert witness phase.

phases would require substantial expenditures of legal fees and costs.

February 1, 2021, Security National Mortgage executed a settlement agreement with Lehman Holdings in relation to these two adversary

proceedings wherein all mortgage loan related claims were resolved, thereby ending all liabilities asserted by Lehman Holdings and conclusively

ending all proceedings between Security National Mortgage and Lehman Holdings.

The full amount of Security National Mortgage’s

settlement payment was accounted for in the Company’s loan loss reserve as of December 31, 2020 and was paid during the first quarter

Those phases would

require substantial expenditures of legal fees and costs.

February 1, 2021, SecurityNational Mortgage executed a settlement agreement with Lehman Holdings in relation to these two adversary proceedings

wherein all mortgage loan related claims were resolved, thereby ending all liabilities asserted by Lehman Holdings and conclusively ending

all proceedings between SecurityNational Mortgage and Lehman Holdings.

The full amount of SecurityNational Mortgage’s settlement

payment was accounted for in the Company’s loan loss reserve as of December 31, 2020 and was paid during the first quarter 2021.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

Reinsurance, Commitments and Contingencies (Continued)

Covenants for Mortgage Warehouse Lines of Credit

Company, through its subsidiary Security National Mortgage, has a $100,000,000 line of credit with Wells Fargo Bank N.A.

Company, through its subsidiary SecurityNational Mortgage, has a $ 100,000,000 line of credit with Wells Fargo Bank N.A.

The agreement

charges interest at the 1-Month LIBOR rate plus 2.1% and matures on June 9, 2022 .

Security National Mortgage is required to comply with

SecurityNational Mortgage is required to comply with

covenants for adjusted tangible net worth, unrestricted cash balance, the ratio of indebtedness to adjusted tangible net worth, and the

liquidity overhead coverage ratio, and a quarterly gross profit of at least $ 1.00 .

Company, through its subsidiary Security National Mortgage, has a line of credit with Texas Capital Bank N.A.

Company, through its subsidiary SecurityNational Mortgage, has a line of credit with Texas Capital Bank N.A.

This agreement with the

bank allows Security National Mortgage to borrow up to $100,000,000 for the sole purpose of funding mortgage loans.

bank allows SecurityNational Mortgage to borrow up to $ 100,000,000 for the sole purpose of funding mortgage loans.

The agreement charges

interest at the 1-Month LIBOR rate plus 2% and matures on November 15, 2021.

interest at the 1-Month LIBOR rate plus 2% and matures on August 9, 2022 .

The Company is required to comply with covenants for adjusted

1 unchanged sentence

servicing rights) of at least $ 1.00 on a rolling four-quarter basis.

Company through its subsidiary Security National Mortgage, has a line of credit with Comerica Bank.

Company through its subsidiary SecurityNational Mortgage, has a line of credit with Comerica Bank.

This agreement with the bank allows

Security National Mortgage to borrow up to $75,000,000 for the sole purpose of funding mortgage loans.

SecurityNational Mortgage to borrow up to $ 70,000,000 for the sole purpose of funding mortgage loans.

The agreement charges interest

3 unchanged sentences

rights) of at least $ 1.00 on a rolling twelve months.

Company through its subsidiary Security National Mortgage, has a line of credit with U.S Bank.

This agreement with the bank allows

Security National Mortgage to borrow up to $ 100,000,000 for

the sole purpose of funding mortgage loans.

The agreement charges interest at the 1-Month LIBOR rate plus 2.0% and matures on June

The Company is required to comply with

covenants for adjusted tangible net worth, unrestricted cash balance, and minimum combined pre-tax income (excluding any changes in

the fair value of mortgage servicing rights) of at least $1.00 on a rolling twelve months.

Company through its subsidiary SecurityNational Mortgage, has a line of credit with U.S Bank.

This agreement with the bank allows SecurityNational

Mortgage to borrow up to $ 100,000,000 for the sole purpose of funding mortgage loans.

The agreement charges interest at the 1-Month LIBOR

rate plus 2.0% and matures on June 4, 2022 .

The Company is required to comply with covenants for adjusted tangible net worth, unrestricted

cash balance, and minimum combined pre-tax income (excluding any changes in the fair value of mortgage servicing rights) of at least

$ 1.00 on a rolling twelve months.

Company, through its subsidiary EverLEND Mortgage, has a line of credit with Texas Capital Bank N.A.

8 unchanged sentences

violation under the other agreement.

As of June 30, 2021, the Company believes that it was in compliance with all debt covenants.

As of September 30, 2021, the Company was in compliance with all debt covenants.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

Reinsurance, Commitments and Contingencies (Continued)

Contingencies and Commitments

1 unchanged sentence

and development.

As of June 30, 2021, the Company’s commitments were approximately $ 249,815,000

for these loans, of which

$ 139,207,610 had

As of September 30, 2021, the Company’s commitments were approximately $ 318,081,000 for these loans, of which

$ 172,636,000 had been funded.

The Company will advance funds once the work has been completed and an independent inspection is made.

The maximum loan

commitment ranges between 50% and 80% of appraised value.

The Company receives fees and interest for these loans and the interest rate

is generally fixed 5.25% to 8.00% per annum.

The maximum loan commitment ranges between 50 % and 80 % of appraised value.

The Company receives fees and interest for these loans and

the interest rate is generally fixed 5.25 % to 8.00 % per annum.

Maturities range between six and eighteen months.

Company belongs to a captive insurance group for certain casualty insurance, worker compensation and liability programs.

reserves are maintained relative to these programs.

The level of exposure from catastrophic events is limited by the purchase of stop-loss

and aggregate liability reinsurance coverage.

Insurance reserves

are maintained relative to these programs.

The level of exposure from catastrophic events is limited by the purchase of stop-loss and

aggregate liability reinsurance coverage.

When estimating the insurance liabilities and related reserves, the captive insurance management

7 unchanged sentences

Company is a defendant in various other legal actions arising from the normal conduct of business.

Management believes that none of

the actions, if adversely determined, will have a material effect on the Company’s financial position or results of

Based on management’s assessment and legal counsel’s representations concerning the likelihood of

unfavorable outcomes, no amounts have been accrued for the above claims in the consolidated financial statements.

Management believes that none of the

actions, if adversely determined, will have a material effect on the Company’s financial position or results of operations.

on management’s assessment and legal counsel’s representations concerning the likelihood of unfavorable outcomes, no amounts

have been accrued for the above claims in the consolidated financial statements.

Company is not a party to any other material legal proceedings outside the ordinary course of business or to any other legal proceedings,

which, if adversely determined, would have a material adverse effect on its financial condition or results of operations.

Servicing Rights

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

Mortgage Servicing Rights

Company initially records these MSRs at fair value as discussed in Note 8.

2 unchanged sentences

is included in other expenses on the consolidated statements of earnings.

MSR amortization is determined

by amortizing the MSR balance in proportion to, and over the period of the estimated future net servicing income of the underlying financial

MSR amortization is determined by amortizing the MSR balance

in proportion to, and over the period of the estimated future net servicing income of the underlying financial assets.

Company periodically assesses MSRs for impairment.

Impairment occurs when the current fair value of the MSR falls below the

asset’s carrying value (carrying value is the amortized cost reduced by any related valuation allowance).

impaired, the impairment is recognized in current-period earnings and the carrying value of the MSRs is adjusted through a valuation

Impairment occurs when the current fair value of the MSR falls below the asset’s

carrying value (carrying value is the amortized cost reduced by any related valuation allowance).

If MSRs are impaired, the impairment

is recognized in current-period earnings and the carrying value of the MSRs is adjusted through a valuation allowance.

periodically reviews the various loan strata to determine whether the value of the MSRs in a given stratum is impaired and likely to

2 unchanged sentences

following is a summary of the MSR activity for the periods presented.

Schedule of Mortgage Servicing

of December 31

before valuation allowance at beginning of year

MSR additions

resulting from loan sales

of Mortgage Servicing Rights

As of September 30

As of December 31

Amortized cost:

Balance before valuation allowance at beginning of year

MSR additions resulting from loan sales

Amortization (1)

( 10,897,897 )

( 11,841,478 )

of valuation allowance to write down MSRs

with other than temporary impairment

before valuation allowance at end of period

allowance for impairment of MSRs:

at beginning of year

of valuation allowance to write down MSRs

with other than temporary impairment

at end of period

servicing rights, net

fair value of MSRs at end of period

Application of valuation allowance to write down MSRs with other than temporary

Balance before valuation allowance at end of period

Valuation allowance for impairment of MSRs:

Balance at beginning of year

Application of valuation allowance to write down MSRs with other than temporary

Balance at end of period

Mortgage servicing rights, net

Estimated fair value of MSRs at end of period

in other expenses on the condensed consolidated statements of earnings

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

Mortgage Servicing Rights (Continued)

following table summarizes the Company’s estimate of future amortization of its existing MSRs carried at amortized cost:

of Finite-Lived Intangible Assets, Future Amortization Expense, Mortgage Servicing Rights

MSR Amortization

Company collected the following contractual servicing fee income and late fee income as reported in other revenues on the condensed

consolidated statement of earnings:

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense, Mortgage Servicing Rights

Estimated MSR Amortization

Company collected the following contractual servicing fee income and late fee income as reported in other revenues on the condensed consolidated

statement of earnings:

Schedule of Other Revenues

servicing fees

Three Months Ended

Nine Months Ended

Contractual servicing fees

following is a summary of the unpaid principal balances (“UPB”) of the servicing portfolio for the periods presented:

Summary of Unpaid Principal

Balances of the Servicing Portfolio

of December 31 2020

Summary of Unpaid Principal Balances of the Servicing Portfolio

As of September 30 2021

As of December 31 2020

Servicing UPB

$ 6,709,170,790

1 unchanged sentence

following key assumptions were used in determining MSR value:

Assumptions used

in determining MSR value

Company’s overall effective tax rate for the three months ended June 30, 2021 and 2020 was 23.3 %

respectively, which resulted in a provision for income taxes of $ 3,419,873

and $ 6,636,709 ,

respectively.

The Company’s overall effective tax rate for the six months ended June 30, 2021 and 2020 was 24.6 %

respectively, which resulted in a provision for income taxes of $ 7,646,213

and $ 6,686,494 ,

respectively.

of Assumptions Used in Determining MSR Value

September 30, 2021

December 31, 2020

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

Company’s overall effective tax rate for the three months ended September 30, 2021 and 2020 was 23.7 % and 24.0 % , respectively,

which resulted in a provision for income taxes of $ 3,352,663 and $ 9,279,162 , respectively.

The Company’s overall effective tax

rate for the nine months ended September 30, 2021 and 2020 was 24.3 % and 23.6 % , respectively, which resulted in a provision for income

taxes of $ 10,998,876 and $ 15,965,656 , respectively.

The Company’s effective tax rates differ from the U.S.

federal statutory rate of 21% partially due to its provision for

state income taxes.

The effective tax rate in the current period decreased when compared to the prior year period partly due to

the Company's provision for state income taxes.

federal statutory rate

of 21 % partially due to its provision for state income taxes.

The effective tax rate in the current period decreased when compared to

the prior year period partly due to the Company’s provision for state income taxes.

income taxes are based on an estimated annualized effective tax rate applied to the respective quarterly periods, adjusted for discrete

5 unchanged sentences

Company reports revenues from contracts with customers pursuant to ASC No.

606, Revenue from Contracts with

606, Revenue from Contracts with Customers .

about Performance Obligations and Contract Balances

11 unchanged sentences

When specialty merchandise is ordered, it can take time to manufacture and deliver the product.

deferred until the at-need merchandise is received.

deferred until the at-need merchandise is delivered to the Company.

Pre-need Land Revenue :

11 unchanged sentences

does not fulfill an obligation and revenue remains deferred.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2021 (Unaudited)

Revenues from Contracts with Customers (Continued)

opening and closing balances of the Company’s receivables, contract assets and contract liabilities are as follows:

Schedule of Opening and Closing

Balances of Receivables, Contract Assets and Contract Liabilities

of Opening and Closing Balances of Receivables, Contract Assets and Contract Liabilities

Contract Balances

Receivables (1)

Contract Asset

Contract Liability

Opening (1/1/2021)

Closing (9/30/2021)

Increase/(decrease)

Contract Balances

Receivables (1)

Contract Asset

Contract Liability

Opening (1/1/2020)

Closing (12/31/2020)

Increase/(decrease)

in Receivables, net on the condensed consolidated balance sheets

amount of revenue recognized and included in the opening contract liability balance for the three months ended June 30, 2021 and 2020

was $ 1,309,936

and $ 880,663 ,

respectively, and for the six months ended June 30, 2021 and 2020 was $ 2,444,937

and $ 1,831,406 ,

amount of revenue recognized and included in the opening contract liability balance for the three months ended September 30, 2021 and

2020 was $ 1,143,745 and $ 1,427,418 , respectively, and for the nine months ended September 30, 2021 and 2020 was $ 3,588,682 and $ 3,258,824 ,

difference between the opening and closing balances of the Company’s contract assets and contract liabilities primarily results

2 unchanged sentences

following table disaggregates revenue for the Company’s cemetery and mortuary contracts for the periods presented:

Revenues of the Cemetery

and Mortuary Contracts

Ended June 30

goods/service lines

of Revenue Recognition

transferred at a point in time

Schedule of Revenues of the Cemetery and Mortuary Contracts

Three Months Ended

Ended September 30

Major goods/service lines

Net mortuary and cemetery

Timing of Revenue Recognition

Goods transferred at a point in time

Services transferred at a point in time

Net mortuary and cemetery

following table reconciles revenues from cemetery and mortuary contracts to Note 7 – Business Segment Information for the Cemetery/Mortuary

Segment for the periods presented:

Reconciliation of Revenues

from Cemetery and mortuary contracts to Business Segment Information

mortuary and cemetery sales

(losses) on investments and other assets

Net investment

from external customers

Schedule of Reconciliation of Revenues from Cemetery and Mortuary Contracts to Business Segment Information

Three Months Ended

Nine Months Ended

Net mortuary and cemetery sales

Gains (losses) on investments and other assets

Net investment income

Other revenues

Revenues from external customers

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements