What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-11-14 compared with 2024-08-14 · 543 added, 537 removed, 2121 unchanged (34% of the section changed)

Financial Statements.

Fixed maturity securities, available for sale, at estimated fair

(amortized cost of $ 360,599,601

and $ 390,884,441

for 2024 and 2023,

respectively;

net of allowance for credit losses of $ 394,260

and $ 314,549

for 2024 and 2023, respectively)

September 30,

Fixed maturity securities, available for sale, at estimated fair value (amortized cost of $ 347,143,698 and $ 390,884,441 for 2024 and 2023, respectively;

net of allowance for credit losses of $ 414,602 and $ 314,549 for 2024 and 2023, respectively)

$ 346,513,336

$ 381,535,986

Equity securities at estimated fair value (cost of $ 11,266,705 and

$ 10,571,505 for 2024 and 2023, respectively)

Mortgage loans held for investment (net of allowance for credit losses

of $ 2,853,852 and $ 3,818,653 for 2024 and 2023, respectively)

Real estate held for investment (net of accumulated depreciation of

$ 28,582,113 and $ 29,307,791 for 2024 and 2023, respectively)

Equity securities at estimated fair value (cost of $ 11,357,095 and $ 10,571,505 for 2024 and 2023, respectively)

Mortgage loans held for investment (net of allowance for credit losses of $ 1,579,746 and $ 3,818,653 for 2024 and 2023, respectively)

Real estate held for investment (net of accumulated depreciation of $ 30,005,134 and $ 29,307,791 for 2024 and 2023, respectively)

Real estate held for sale

Other investments and policy loans (net of allowance for credit losses

of $ 1,535,324 and $ 1,553,836 for 2024 and 2023, respectively)

Other investments and policy loans (net of allowance for credit losses of $ 1,540,835 and $ 1,553,836 for 2024 and 2023, respectively)

Accrued investment income

2 unchanged sentences

Loans held for sale at estimated fair value

Receivables (net of allowance for credit losses of $ 1,770,911 and $ 1,897,887

for 2024 and 2023, respectively)

Restricted assets (including $ 10,107,237 and $ 9,239,063 for 2024 and 2023

respectively, at estimated fair value)

Cemetery perpetual care trust investments (including $ 5,197,829 and

$ 4,969,005 for 2024 and 2023, respectively, at estimated fair value)

Receivables (net of allowance for credit losses of $ 1,566,150 and $ 1,897,887 for 2024 and 2023, respectively)

Restricted assets (including $ 11,608,495 and $ 9,239,063 for 2024 and 2023 respectively, at estimated fair value)

Cemetery perpetual care trust investments (including $ 5,844,356 and $ 4,969,005 for 2024 and 2023, respectively, at estimated fair value)

Receivable from reinsurers

9 unchanged sentences

CONSOLIDATED BALANCE SHEETS (Continued)

September 30,

Liabilities and Stockholders’ Equity

17 unchanged sentences

40,000,000 shares authorized;

21,085,936 shares issued and outstanding as of June 30, 2024 and

20,048,002 shares issued and outstanding as of December 31, 2023

21,117,986 shares issued and outstanding as of September 30, 2024 and 21,052,883 (1) shares issued and outstanding as of December 31, 2023

non-voting common stock - $ 1.00 par value;

5,000,000 shares

5,000,000 shares authorized;

none issued or outstanding

convertible common stock - $ 2.00 par value;

6,000,000 shares

3,120,166 shares issued and outstanding as of June 30, 2024

and 2,971,854 shares issued and outstanding as of December 31, 2023

6,000,000 shares authorized;

3,120,166 shares issued and outstanding as of September 30, 2024 and 3,120,432 (1) shares issued and outstanding as of December 31, 2023

Common stock value

2 unchanged sentences

( 6,885,558 )

Retained earnings

Treasury stock at cost - 966,102 Class A shares and 37,503 Class C shares

as of June 30, 2024;

and 806,311 Class A shares and 35,717 Class C

shares as of December 31, 2023

Treasury stock at cost - 938,919 Class A shares and 37,503 Class C shares as of September 30, 2024;

and 852,338 (1) Class A shares and 37,503 (1) Class C shares as of December 31, 2023

( 6,490,559 )

4 unchanged sentences

$ 1,430,552,275

(1) Issued and outstanding

shares have been adjusted retroactively for the effect of annual stock dividends.

accompanying notes to condensed consolidated financial statements (unaudited).

NATIONAL FINANCIAL CORPORATION

SECURITY NATIONAL FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF EARNINGS

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended

September 30,

Nine Months Ended

September 30,

Mortgage fee income

8 unchanged sentences

Increase in future policy benefits

Amortization of deferred policy and pre-need acquisition

costs and value of business acquired

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

Selling, general and administrative expenses:

11 unchanged sentences

( 3,258,740 )

earnings per Class A Equivalent common share (1)

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

Net earnings per Class A Equivalent common share (1)

Net earnings per Class A Equivalent common share-assuming

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

8 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended

September 30,

Nine Months Ended

September 30,

Other comprehensive income:

2 unchanged sentences

( 6,580,750 )

( 1,782,140 )

Unrealized losses on restricted assets (1)

Unrealized losses on cemetery perpetual care trust investments

Unrealized gains (losses) on restricted assets (1)

Unrealized gains (losses) on cemetery perpetual care trust

investments (1)

Other comprehensive income (loss), before income tax

2 unchanged sentences

Income tax (expense) benefit

( 2,201,866 )

( 1,826,546 )

Other comprehensive income (loss), net of income tax

1 unchanged sentence

( 5,212,021 )

Comprehensive income

maturity securities available for sale

Comprehensive income (loss)

$ ( 1,346,234 )

(1) Fixed maturity

securities available for sale

accompanying notes to condensed consolidated financial statements (unaudited).

1 unchanged sentence

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Class A Common Stock

Class C Common Stock

Additional Paid-in Capital

Accumulated Other Comprehensive Income (Loss)

Retained Earnings

Treasury Stock

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Class A Common Stock

36 unchanged sentences

$ 325,765,993

Six Months Ended June 30, 2023

Other comprehensive income

Stock-based compensation expense

Exercise of stock options

Vesting of restricted stock units

Sale of treasury stock

Purchase of treasury stock

Stock dividends

September 30, 2024

$ 225,400,933

$ ( 6,490,559 )

$ 346,322,066

NATIONAL FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Continued)

Nine Months Ended September 30, 2023

Class A Common Stock

23 unchanged sentences

$ 297,033,642

Other comprehensive loss

( 3,952,052 )

Stock-based compensation expense

Exercise of stock options

Vesting of restricted stock units

Sale of treasury stock

Purchase of treasury stock

( 1,514,049 )

( 1,387,059 )

Conversion Class C to Class A

Stock dividends

( 9,002,969 )

June 30, 2023

$ ( 12,894,771 )

$ 200,078,709

$ ( 5,841,350 )

$ 298,762,757

$ ( 12,894,771 )

$ 200,078,709

$ ( 5,841,350 )

$ 298,762,757

Other comprehensive loss

9 unchanged sentences

Purchase of treasury stock

( 1,514,049 )

( 1,387,059 )

Conversion Class C to Class A

Stock dividends

( 9,002,969 )

June 30, 2023

September 30, 2023

$ ( 18,282,298 )

8 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

Nine Months Ended

September 30,

Cash flows from operating activities:

14 unchanged sentences

Purchases of cemetery perpetual care trust investments

( 2,487,924 )

Sales, calls and maturities of perpetual care trust investments

21 unchanged sentences

( 1,423,826 )

( 69,133,305 )

Proceeds from bank loans

1 unchanged sentence

( 52,720,401 )

( 55,805,126 )

Net cash used in financing activities

2 unchanged sentences

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

( 11,843,357 )

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

6 unchanged sentences

Non Cash Operating, Investing and Financing Activities:

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

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

Loans held for sale foreclosed into real estate held for sale

Benefit plans funded with treasury stock

Loans held for sale foreclosed into real estate held for sale

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

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

Transfer from mortgage loans held for investment to restricted assets

4 unchanged sentences

of cash, cash equivalents, restricted cash and restricted cash equivalents as shown in the condensed consolidated statements of cash

flows is presented in the table below:

Six Months Ended June 30,

flows are presented in the table below:

Nine Months Ended September 30,

Cash and cash equivalents

3 unchanged sentences

Cemetery perpetual care trust investments

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

Total cash, cash equivalents, restricted cash and restricted cash

$ 188,938,399

18 unchanged sentences

considered necessary for a fair presentation have been included.

Operating results for the three and six month periods ended June 30,

Operating results for the three and nine month periods ended September

30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

57 unchanged sentences

required disclosures.

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

2018-12 that requires the standard to be adopted by the

Company commencing on January 1, 2025.

The Company is nearing completion of its analysis and implementation of the new standard, including

the identification of cohorts, system updates, and design.

The Company has engaged its team of actuaries, accountants, and systems specialists

and consulted external system providers as part of the implementation.

The Company is in the process of estimating the impact of the

new guidance on the consolidated financial statements.

2018-12 is effective for annual reporting periods beginning after December 15, 2024 and interim reporting

periods beginning after December 15, 2025.

The Company will adopt the standard commencing with its annual reporting period ending December

The Company is nearing completion of its analysis and implementation of the new standard, including the identification of cohorts,

system updates, and design.

The Company has engaged its team of actuaries, accountants, and systems specialists and consulted external

system providers as part of the implementation.

The Company is in the process of estimating the impact of the new guidance on the consolidated

financial statements.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

38 unchanged sentences

30, 2024 (Unaudited)

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

3) Investments

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

of Investments

4 unchanged sentences

Estimated Fair Value

June 30, 2024:

September 30, 2024:

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

20 unchanged sentences

Mortgage loans held for investment at amortized cost:

$ 103,667,890

Residential construction

23 unchanged sentences

losses are net of allowance for credit losses

Includes $ 553,900 of Membership stock and $ 1,796,600 of Activity

stock attributable to short-term borrowings and letters of credit.

(2) Includes $ 553,900

of Membership stock and $ 1,824,300 of Activity stock attributable to short-term borrowings and letters of credit.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

66 unchanged sentences

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

equity securities and fixed maturity securities) as of June 30, 2024, other than investments issued or guaranteed by the United States

equity securities and fixed maturity securities) as of September 30, 2024, other than investments issued or guaranteed by the United

States Government.

Maturity Securities

table below summarizes unrealized losses on fixed maturity securities available for sale that were carried at estimated fair value as

of June 30, 2024 and December 31, 2023.

of September 30, 2024 and December 31, 2023.

The fair values of fixed maturity securities are based on quoted market prices, when available.

9 unchanged sentences

Combined Fair Value

June 30, 2024

September 30, 2024

Treasury securities and obligations of U.S.

13 unchanged sentences

$ 250,584,924

holdings were comprised of 646 securities with fair values aggregating 94.8 % of the aggregate amortized cost as of June 30, 2024.

holdings were comprised of 606 securities with fair values aggregating 94.9 % of the aggregate amortized cost as of December 31, 2023.

Credit loss release of $ 16,289 and credit loss provision of $ 44,505 have been recognized for the three month periods ended June 30, 2024

and 2023, respectively.

Credit loss provision of $ 79,711 and $ 224,005 have been recognized for the six month periods ended June 30, 2024

holdings were comprised of 433 securities with fair values aggregating 94.9 % of the aggregate amortized cost as of September 30, 2024.

Relevant holdings were comprised of 606 securities with fair values aggregating 94.9 % of the aggregate amortized cost as of December

Credit loss provision of $ 20,342 and credit loss release of $ 1,741 have been recognized for the three month periods ended September

30, 2024 and 2023, respectively.

Credit losses are included in gains (losses) on investments and other assets on the condensed consolidated statements

Other unrealized losses for which no credit loss was recognized are primarily the result of increases in interest rates.

Credit loss provision of $ 100,053 and $ 222,264 have been recognized for the nine month periods ended

September 30, 2024 and 2023, respectively.

Credit losses are included in gains (losses) on investments and other assets on the condensed

consolidated statements of earnings.

Other unrealized losses for which no credit loss was recognized are primarily the result of increases

in interest rates.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

49 unchanged sentences

Based on the NAIC designations, the Company

had 98.1 % and 98.2 % of its fixed maturity securities rated investment grade as of June 30, 2024 and December 31, 2023, respectively.

had 97.9 % and 98.2 % of its fixed maturity securities rated investment grade as of September 30, 2024 and December 31, 2023, respectively.

The following table summarizes the credit quality, by NAIC designation, of the Company’s fixed maturity securities available for

1 unchanged sentence

of Credit Quality of Fixed Maturity Security Portfolio by NAIC Designation

June 30, 2024

September 30, 2024

December 31, 2023

11 unchanged sentences

following tables present a roll forward of the Company’s allowance for credit losses on fixed maturity securities available for

sale for the three month periods ended June 30, 2024:

sale for the three month periods ended September 30, 2024:

of Allowance for Credit Losses on Fixed Maturity Securities Available for Sale

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Treasury securities and obligations of U.S.

3 unchanged sentences

Mortgage-backed securities

Beginning balance - March 31, 2024

Beginning balance - June 30, 2024

Additions for credit losses not previously recorded

4 unchanged sentences

Recoveries of amounts previously written off

Ending Balance - June 30, 2024

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2024 (Unaudited)

Investments (Continued)

Three Months Ended June 30, 2023

Ending Balance - September 30, 2024

Three Months Ended September 30, 2023

Treasury securities and obligations of U.S.

3 unchanged sentences

Mortgage-backed securities

Beginning balance - March 31, 2023

Beginning balance - June 30, 2023

Additions for credit losses not previously recorded

4 unchanged sentences

Recoveries of amounts previously written off

Ending Balance - June 30, 2023

Ending Balance - September 30, 2023

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2024 (Unaudited)

3) Investments (Continued)

following tables present a roll forward of the Company’s allowance for credit losses on fixed maturity securities available for

sale for the six month periods ended June 30, 2024:

Six Months Ended June 30, 2024

sale for the nine month periods ended September 30, 2024:

Nine Months Ended September 30, 2024

Treasury securities and obligations of U.S.

10 unchanged sentences

Recoveries of amounts previously written off

Ending Balance - June 30, 2024

Six Months Ended June 30, 2023

Ending Balance - September 30, 2024

Nine Months Ended September 30, 2023

Treasury securities and obligations of U.S.

10 unchanged sentences

Recoveries of amounts previously written off

Ending Balance - June 30, 2023

Ending Balance - September 30, 2023

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

2 unchanged sentences

3) Investments (Continued)

table below presents the amortized cost and the estimated fair value of fixed maturity securities available for sale as of June 30, 2024,

table below presents the amortized cost and the estimated fair value of fixed maturity securities available for sale as of September

30, 2024, by contractual maturity.

Actual or expected maturities may differ from contractual maturities because certain borrowers may have the

right to call or prepay obligations with or without call or prepayment penalties.

Actual or expected maturities may differ from contractual maturities because certain borrowers may

have the right to call or prepay obligations with or without call or prepayment penalties.

of Investments Classified by Contractual Maturity Date

10 unchanged sentences

of Major Categories of Net Investment Income

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Proceeds from sales

8 unchanged sentences

of Assets on Deposit With Life Insurance

September 30,

Fixed maturity securities available for sale at estimated fair value

3 unchanged sentences

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

September 30,

Fixed maturity securities available for sale at estimated fair value

5 unchanged sentences

These pledged securities are used as collateral for any FHLB cash advances.

September 30,

Fixed maturity securities available for sale at estimated fair value

4 unchanged sentences

Real Estate Held for Investment and Held for Sale

Company owns and manages commercial real estate assets as a means of generating investment income.

These assets are acquired in accordance

with the Company’s goals and objectives for risk-adjusted returns.

Due diligence is conducted on each asset using internal and

third-party resources.

The geographic locations and asset classes of investments are determined by senior management under the direction

of the Board of Directors.

Company owns and manages commercial real estate assets as a means of both generating investment income and providing workspace for its

These assets are acquired in accordance with the Company’s goals and objectives for risk-adjusted returns.

Due diligence

is conducted on each asset using internal and third-party resources.

The geographic locations and asset classes of investments are determined

by senior management under the direction of the Board of Directors.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

6 unchanged sentences

or through strategic lease-up periods.

The Company generally looks to acquire assets that are in regions expected to have high growth

in employment and population and that provide operational efficiencies.

The Company will generally acquire assets as a result of company acquisitions or that are in regions

expected to have high growth in employment and population and that provide operational efficiencies.

Company currently owns and operates six commercial properties in two states.

4 unchanged sentences

class diversification.

aggregated net book value of commercial real estate serving as collateral for bank loans was $ 121,972,571 and $ 124,381,467 as of June

aggregated net book value of commercial real estate serving as collateral for bank loans was $ 120,756,194 and $ 124,381,467 as of September

30, 2024 and December 31, 2023, respectively.

The associated bank loan carrying values totaled $ 96,911,932 and $ 97,807,614 as of June

The associated bank loan carrying values totaled $ 96,470,650 and $ 97,807,614 as of September

30, 2024 and December 31, 2023, respectively.

the three and six month periods ended June 30, 2024 and 2023, the Company did not record any impairment losses on commercial real estate

held for investment or held for sale.

Impairment losses, if any, are included in gains (losses) on investment and other assets on the

condensed consolidated statements of earnings.

the three month periods ended June 30, 2024 and 2023, the Company recorded depreciation expense on commercial real estate held for investment

of $ 1,418,301 and $ 1,576,901 , respectively, and of $ 2,946,094 and $ 3,142,828 during the six month periods ended June 30, 2024 and 2023,

respectively.

Commercial real estate held for investment is stated at cost and is depreciated over the estimated useful life, primarily

using the straight-line method.

the three and nine month periods ended September 30, 2024 and 2023, the Company did not record any impairment losses on commercial real

estate held for investment or held for sale.

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

on the condensed consolidated statements of earnings.

the three month periods ended September 30, 2024 and 2023, the Company recorded depreciation expense on commercial real estate held for

investment of $ 1,420,367 and $ 1,572,494 , respectively, and of $ 4,366,462 and $ 4,715,322 during the nine month periods ended September

30, 2024 and 2023, respectively.

Commercial real estate held for investment is stated at cost and is depreciated over the estimated useful

life, primarily using the straight-line method.

Depreciation is included in net investment income on the consolidated statements of earnings.

3 unchanged sentences

Total Square Footage

December 31, 2023

September 30,

$ 126,861,284

3 unchanged sentences

Includes Center53

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

Net Book Value

Total Square Footage

September 30,

Consists of approximately 93 acres of undeveloped land

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

2 unchanged sentences

3) Investments (Continued)

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

Net Book Value

Total Square Footage

December 31, 2023

Mississippi (1)

(1) Consists of approximately

93 acres of undeveloped land for $ 151,553 for 2024 and 2023.

The remaining property for $ 2,877,420 was sold in February 2024 for a gain

of approximately $ 250,000 .

property is being marketed with the assistance of commercial real estate brokers in Mississippi.

Real Estate Held for Investment and Held for Sale

Company occasionally acquires a small portfolio of residential homes primarily because of loan foreclosures.

The Company has the option

to sell these properties or to continue to hold them for expected cash flow and price appreciation.

The Company also invests in residential

subdivision development.

Company occasionally acquires residential homes through the mortgage loan foreclosure process.

The Company has the option to sell these

properties or to continue to hold them for expected cash flow and price appreciation.

Company established Security National Real Estate Services (“SNRE”) to manage its residential property portfolio.

2 unchanged sentences

residential property portfolio.

the three and six month periods ended June 30, 2024 and 2023 the Company did no t record any impairment losses on residential real estate

held for sale or held for investment.

Impairment losses, if any, are included in gains (losses) on investment and other assets on the

condensed consolidated statements of earnings.

the three month periods ended June 30, 2024 and 2023, the Company recorded depreciation expense on residential real estate held for investment

of $ 2,653 and $ 2,648 , respectively, and $ 5,305 and $ 5,296 during the six month periods ended June 30, 2024 and 2023, respectively.

real estate held for investment is stated at cost and is depreciated over the estimated useful life, primarily using the straight-line

the three and nine month periods ended September 30, 2024 and 2023 the Company did no t record any impairment losses on residential real

estate held for sale or held for investment.

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

on the condensed consolidated statements of earnings.

the three month periods ended September 30, 2024 and 2023, the Company recorded depreciation expense on residential real estate held

for investment of $ 2,653 and $ 2,648 , respectively, and $ 7,958 and $ 7,944 during the nine month periods ended September 30, 2024 and 2023,

respectively.

Residential real estate held for investment is stated at cost and is depreciated over the estimated useful life, primarily

using the straight-line method.

Depreciation is included in net investment income on the consolidated statements of earnings.

2 unchanged sentences

Net Book Value

(1) Includes multiple

residential subdivision development projects

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2024 (Unaudited)

Investments (Continued)

following table presents additional information regarding the Company’s residential subdivision development in Utah:

September 30,

Includes multiple residential subdivision development projects

Company also invests in residential subdivision developments.

The following table presents additional information regarding the Company’s

residential subdivision development projects in Utah:

September 30,

Lots developed

2 unchanged sentences

Net Book Value

net book value of foreclosed residential real estate included in residential real estate held for sale was $ 858,977 and nil as of June

September 30,

net book value of foreclosed residential real estate included in residential real estate held for sale was $ 849,900 and nil as of September

30, 2024 and December 31, 2023, respectively.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2024 (Unaudited)

3) Investments (Continued)

Estate Owned and Occupied by the Company

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

As of June 30, 2024, real estate owned

and occupied by the Company is summarized as follows:

As of September 30, 2024, real estate

owned and occupied by the Company is summarized as follows:

of Real Estate Owned and Occupied by the Company

Business Segment

Approximate Square Footage

Square Footage Occupied by the Company

Square Footage

433 Ascension Way, Floors 4, 5 and 6, Salt Lake City, UT - Center53 Building 2 (1)

4 unchanged sentences

Life Insurance Sales

(1) Included in real

estate held for investment on the condensed consolidated balance sheets

(2) Included in property

and equipment on the condensed consolidated balance sheets

Included in real estate held for investment on the condensed

consolidated balance sheets

Included in property and equipment on the condensed consolidated

balance sheets

Listed for sale

10 unchanged sentences

of the geographic region in which the debtors do business or are employed.

As of June 30, 2024, the Company had 47 %, 10 %, 8 %, 7 % and

7 %, of its mortgage loans from borrowers located in the states of Utah, Texas, Florida, California, and Arizona, respectively.

December 31, 2023, the Company had 44 %, 11 %, 10 %, 7 % and 6 % of its mortgage loans from borrowers located in the states of Utah, Florida,

As of September 30, 2024, the Company had 53 %, 9 %, 7 %, 7 %

and 5 %, of its mortgage loans from borrowers located in the states of Utah, Florida, Texas, Arizona, and California, respectively.

of December 31, 2023, the Company had 44 %, 11 %, 10 %, 7 % and 6 % of its mortgage loans from borrowers located in the states of Utah, Florida,

California, Texas, and Arizona respectively.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2024 (Unaudited)

Investments (Continued)

loans held for investment are carried at their unpaid principal balances adjusted for net deferred fees, charge-offs, premiums, discounts,

11 unchanged sentences

market value of the respective loan collateral, additional collateral or mortgage insurance by an approved third-party insurer is required.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2024 (Unaudited)

3) Investments (Continued)

of Allowance for Credit Losses

16 unchanged sentences

Interest not accrued

on these loans totaled approximately $ 274,000 and $ 237,000 as of June 30, 2024 and December 31, 2023, respectively.

on these loans totaled approximately $ 297,000 and $ 237,000 as of September 30, 2024 and December 31, 2023, respectively.

Company measures expected credit losses based on the fair value of the collateral when the Company determines that foreclosure is probable.

21 unchanged sentences

the allowance for credit losses.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2024 (Unaudited)

Investments (Continued)

— These loans are secured by first and second mortgages on single-family dwellings.

14 unchanged sentences

the Company to arrive at the allowance for credit losses.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2024 (Unaudited)

3) Investments (Continued)

construction (including land acquisition and development) – These loans are underwritten in accordance with the Company’s

13 unchanged sentences

at least annually or as loan losses or market trends require.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2024 (Unaudited)

Investments (Continued)

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

1 unchanged sentence

Three Months Ended

Residential Construction

Beginning balance - March 31, 2024

Beginning balance - June 30, 2024

Adoption of ASU 2016-13 (1)

Change in provision for credit losses (2)

Ending balance - June 30, 2024

Beginning balance - March 31, 2023

( 1,095,485 )

Ending balance - September 30, 2024

Beginning balance - June 30, 2023

Change in provision for credit losses (2)

Ending balance - June 30, 2023

Six Months Ended

Residential Construction

Ending balance - September 30, 2023

Nine Months Ended

Beginning balance - January 1, 2024

Change in provision for credit losses (2)

Ending balance - June 30, 2024

( 1,143,422 )

( 1,095,485 )

Ending balance - September 30, 2024

Beginning balance - January 1, 2023

1 unchanged sentence

Change in provision for credit losses (2)

Ending balance - June 30, 2023

(1) See Note 2 of the

notes to the condensed consolidated financial statements

(2) Included in other

expenses on the condensed consolidated statements of earnings

Ending balance - September 30, 2023

See Note 2 of the notes to the condensed consolidated financial

Included in other expenses on the condensed consolidated statements

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

4 unchanged sentences

of Aging of Mortgage Loans

June 30, 2024

September 30, 2024

30-59 days past due

6 unchanged sentences

( 1,579,746 )

( 2,853,852 )

Unamortized deferred loan fees, net

5 unchanged sentences

$ 281,734,182

$ 284,343,531

December 31, 2023

16 unchanged sentences

$ 275,616,837

(1) Interest income

is not recognized on loans which are more than 90 days past due or in foreclosure.

Interest income is not recognized on loans which are more than

90 days past due or in foreclosure.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

8 unchanged sentences

aggregate unpaid principal balance of commercial mortgage loans by credit quality indicator and origination year was as follows as of

June 30, 2024:

September 30, 2024:

of Commercial Mortgage Loans By Credit Quality Indicator

10 unchanged sentences

9,174,841 (1) (1)

(1) Commercial construction

Commercial construction loan

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

7 unchanged sentences

aggregate unpaid principal balance of residential mortgage loans by credit quality indicator and origination year was as follows as of

June 30, 2024:

September 30, 2024:

Credit Quality Indicator

1 unchanged sentence

Non-performing (1)

$ 103,667,890

(1) Includes residential

mortgage loans in the process of foreclosure of $ 1,965,642

Includes residential mortgage loans in the process of foreclosure

of $ 3,516,610

Less than 65%

Greater than 80%

$ 103,667,890

aggregate unpaid principal balance of residential mortgage loans by credit quality indicator and origination year was as follows as of

4 unchanged sentences

$ 103,153,587

(1) Includes residential

mortgage loans in the process of foreclosure of $ 1,021,790

Includes residential mortgage loans in the process of foreclosure

of $ 1,021,790

Less than 65%

10 unchanged sentences

aggregate unpaid principal balance of residential construction mortgage loans by credit quality indicator and origination year was as

follows as of June 30, 2024:

follows as of September 30, 2024:

Schedule of Residential Construction Mortgage Loans

24 unchanged sentences

of Aging of Insurance Assignments

As of June 30,

As of December 31,

September 30,

30-59 days past due

13 unchanged sentences

of Allowance for Credit Losses

Three Months Ended

Beginning balance - March 31, 2024

Beginning balance - June 30, 2024

Change in provision for credit losses (1)

Ending balance - June 30, 2024

Beginning balance - March 31, 2023

Ending balance - September 30, 2024

Beginning balance - June 30, 2023

Change in provision for credit losses (1)

Ending balance - June 30, 2023

Six Months Ended

Ending balance - September 30, 2023

Beginning balance - January 1, 2024

Change in provision for credit losses (1)

Ending balance - June 30, 2024

Ending balance - September 30, 2024

Beginning balance - January 1, 2023

Change in provision for credit losses (1)

Ending balance - June 30, 2023

(1) Included in other

expenses on the condensed consolidated statements of earnings

Ending balance - September 30, 2023

Included in other expenses on the condensed consolidated statements

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

6 unchanged sentences

of Gain (Loss) on Investments

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended

September 30,

Nine Months Ended

September 30,

Fixed maturity securities:

5 unchanged sentences

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

( 1,321,511 )

Mortgage loans held for investment:

Gross realized gains

Gross realized losses

( 1,161,364 )

Real estate held for investment and sale:

7 unchanged sentences

using the specific identification method.

realized gains and losses includes gains and losses by the restricted assets and cemetery perpetual care trust investments of the cemeteries

and mortuaries of $ 202,800 in net losses and $ 197,580 in net gains for the three month periods ended June 30, 2024 and 2023, respectively,

and of $ 379,363 and $ 251,510 in net gains for the six month periods ended June 30, 2024 and 2023, respectively.

realized gains and losses includes gains and losses by the cemetery perpetual care trust investments and the restricted assets and of

the cemeteries and mortuaries of $ 1,140,136 and $ 452,115 in net gains for the three month periods ended September 30, 2024 and 2023,

respectively, and of $ 1,519,487 and $ 200,605 in net gains for the nine month periods ended September 30, 2024 and 2023, respectively.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

3 unchanged sentences

categories of net investment income were as follows:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended

September 30,

Nine Months Ended

September 30,

Fixed maturity securities available for sale

12 unchanged sentences

Net investment income

investment income includes income earned by the restricted assets of the cemeteries and mortuaries of $ 470,808 and $ 1,250,861 for the

three month periods ended June 30, 2024 and 2023, respectively, and of $ 1,404,359 and $ 1,852,352 for the six month periods ended June

30, 2024 and 2023, respectively.

investment income includes income earned by the cemetery perpetual care trust investments and the restricted assets of the cemeteries

and mortuaries of $ 393,811 and $ 372,277 for the three month periods ended September 30, 2024 and 2023, respectively, and of $ 1,798,170

and $ 2,224,629 for the nine month periods ended September 30, 2024 and 2023, respectively.

investment income on real estate consists primarily of rental revenue.

4 unchanged sentences

of Accrued Investment Income

As of June 30,

As of December 31,

September 30,

Fixed maturity securities available for sale

14 unchanged sentences

Included in loans held for sale are loans in the process of foreclosure with an aggregate unpaid principal balance of $ 332,848

and $ 1,636,090 as of June 30, 2024 and December 31, 2023, respectively.

and $ 1,636,090 as of September 30, 2024 and December 31, 2023, respectively.

See Note 8 to the condensed consolidated financial statements

2 unchanged sentences

of Aggregate Fair Value Loans Held for Sale

As of June 30,

As of December 31,

September 30,

Aggregate fair value

7 unchanged sentences

of Mortgage Fee Income for Loans Held for Sale

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended

September 30,

Nine Months Ended

September 30,

Interest income

1 unchanged sentence

Change in fair value of loan commitments

Change in fair value of loans held for sale

( 1,504,286 )

Change in fair value of loans held for sale

Provision for loan loss reserve

14 unchanged sentences

of Loan Loss Reserve Included in Other Liabilities and Accrued Expenses

As of June 30,

As of December 31,

September 30,

Balance, beginning of period

3 unchanged sentences

Balance, end of period

(1) Included in mortgage

Included in mortgage fee income

Company maintains reserves for estimated losses on current production volumes.

For the six month period ended June 30, 2024, $ 475,601

For the nine month period ended September 30, 2024, $ 729,734

in reserves were added at a rate of 4.2 basis points per loan, the equivalent of $ 420 per $ 1,000,000 in loans originated.

This is a decrease

over the six month period ended June 30, 2023, when reserves of $ 513,431 were added at a rate of 4.5 basis points per loan originated,

over the nine month period ended September 30, 2023, when reserves of $ 770,220 were added at a rate of 4.5 basis points per loan originated,

the equivalent of $ 450 per $ 1,000,000 in loans originated.

7 unchanged sentences

based compensation expense for stock options issued of $ 195,431 and $ 145,973 has been recognized for these plans for the three month

periods ended June 30, 2024 and 2023, respectively, and $ 382,182 and $ 284,883 has been recognized for these plans for the six month periods

ended June 30, 2024 and 2023, respectively, and is included in personnel expenses on the condensed consolidated statements of earnings.

As of June 30, 2024, the total unrecognized compensation expense related to the options issued was $ 329,670 , which is expected to be

recognized over the remaining vesting period.

periods ended September 30, 2024 and 2023, respectively, and $ 577,613 and $ 430,856 has been recognized for these plans for the nine month

periods ended September 30, 2024 and 2023, respectively, and is included in personnel expenses on the condensed consolidated statements

As of September 30, 2024, the total unrecognized compensation expense related to the options issued was $ 134,239 , which

is expected to be recognized over the remaining vesting period.

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.

of the stock option plans during the six month period ended June 30, 2024, is summarized as follows:

of the stock option plans during the nine month period ended September 30, 2024, is summarized as follows:

Schedule of Activity of Stock Option Plans

Class A Shares

Weighted Average Exercise Price (2)

Class C Shares

Weighted Average Exercise Price (2)

Outstanding at January 1, 2024

Adjustment for the effect of stock dividends

Outstanding at June 30, 2024

As of June 30, 2024:

Outstanding at September 30, 2024

As of September 30, 2024:

Options exercisable

As of June 30, 2024:

As of September 30, 2024:

Available options for future grant

Weighted average contractual term of options outstanding at June 30, 2024

Weighted average contractual term of options exercisable at June 30, 2024

Aggregated intrinsic value of options outstanding at June 30, 2024 (1)

Aggregated intrinsic value of options exercisable at June 30, 2024 (1)

(1) The Company used

a stock price of $ 7.61 as of June 30, 2024 to derive intrinsic value.

(2) Adjusted for the

effect of annual stock dividends.

Weighted average contractual term of options outstanding at September 30, 2024

Weighted average contractual term of options exercisable at September 30, 2024

Aggregated intrinsic value of options outstanding at September 30, 2024 (1)

Aggregated intrinsic value of options exercisable at September 30, 2024 (1)

The Company used a stock price of $ 9.20 as of September 30,

2024 to derive intrinsic value.

Adjusted for the effect of annual stock dividends.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

2 unchanged sentences

5) Stock Compensation Plans (Continued)

of the stock option plans during the six month period ended June 30, 2023, is summarized as follows:

of the stock option plans during the nine month period ended September 30, 2023, is summarized as follows:

Class A Shares

4 unchanged sentences

Adjustment for the effect of stock dividends

Outstanding at June 30, 2023

As of June 30, 2023:

Outstanding at September 30, 2023

As of September 30, 2023:

Options exercisable

As of June 30, 2023:

As of September 30, 2023:

Available options for future grant

Weighted average contractual term of options outstanding at June 30, 2023

Weighted average contractual term of options exercisable at June 30, 2023

Aggregated intrinsic value of options outstanding at June 30, 2023 (1)

Aggregated intrinsic value of options exercisable at June 30, 2023 (1)

(1) The Company used

a stock price of $ 8.45 as of June 30, 2023 to derive intrinsic value.

(2) Adjusted for the

effect of annual stock dividends.

Weighted average contractual term of options outstanding at September 30, 2023

Weighted average contractual term of options exercisable at September 30, 2023

Aggregated intrinsic value of options outstanding at September 30, 2023 (1)

Aggregated intrinsic value of options exercisable at September 30, 2023 (1)

The Company used a stock price of $ 7.84 as of September 30,

2023 to derive intrinsic value.

Adjusted for the effect of annual stock dividends.

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 month periods ended June 30, 2024 and 2023 was $ 142,210 and $ 387,561 , respectively.

the exercise date) of stock options exercised during the nine month periods ended September 30, 2024 and 2023 was $ 290,159 and $ 454,923 ,

respectively.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

3 unchanged sentences

Stock Units (“RSUs”)

based compensation expense for RSUs issued of $ 882 and nil has been recognized under these plans for the three month periods ended June

30, 2024 and 2023, respectively, and of $ 1,771 and $ 742 has been recognized under these plans for the six month periods ended June 30,

based compensation expense for RSUs issued of $ 895 and nil has been recognized under these plans for the three month periods ended September

30, 2024 and 2023, respectively, and of $ 2,666 and $ 742 has been recognized under these plans for the nine month periods ended September

30, 2024 and 2023, respectively, and is included in personnel expenses on the condensed consolidated statements of earnings.

The fair value

of each RSU granted is determined by the Company’s stock price on the date of the grant.

As of June 30, 2024, the total unrecognized

compensation expense related to the RSUs issued was $ 1,493 , which is expected to be recognized over the remaining vesting period.

of the RSUs during the six month period ended June 30, 2024 is summarized as follows:

value of each RSU granted is determined by the Company’s stock price on the date of the grant.

As of September 30, 2024, the total

unrecognized compensation expense related to the RSUs issued was $ 598 , which is expected to be recognized over the remaining vesting

of the RSUs during the nine month period ended September 30, 2024 is summarized as follows:

Schedule of Activity Restricted Stock Units

Class A Shares

Weighted Average Grant Date Fair Value

Average Grant

Date Fair Value

Non-vested at January 1, 2024

Non-vested at June 30, 2024

Non-vested at September 30, 2024

Available RSUs for future grant

of the RSUs during the six month period ended June 30, 2023 is summarized as follows:

of the RSUs during the nine month period ended September 30, 2023 is summarized as follows:

Class A Shares

1 unchanged sentence

Non-vested at January 1, 2023

Non-vested at March 31, 2023

Non-vested at September 30, 2023

Available RSUs for future grant

8 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Basic weighted-average shares outstanding

4 unchanged sentences

Diluted net earnings per share

the six month periods ended June 30, 2024 and 2023, there were 143,456 and 55,125 anti-dilutive 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.

the nine month periods ended September 30, 2024 and 2023, there were nil and 55,125 anti-dilutive 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.

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

following table summarizes the activity in shares of capital stock.

3 unchanged sentences

Vesting of restricted stock units

Stock dividends

Conversion of Class C to Class A

Outstanding shares at June 30, 2023

Outstanding shares at September 30, 2023

Outstanding shares at December 31, 2023 (1)

Common stock, outstanding shares, beginning

Exercise of stock options

Vesting of restricted stock units

Stock dividends

Conversion of Class C to Class A

Outstanding shares at June 30, 2024

Common stock, outstanding shares, ending

Outstanding shares at September 30, 2024

(1) Adjusted retroactively for the effect of annual stock dividends

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

31 unchanged sentences

For the Three Months Ended

June 30, 2024

September 30, 2024

Revenues from external customers

2 unchanged sentences

Segment profit (loss) before income taxes

For the Six Months Ended

June 30, 2024

For the Nine Months Ended

September 30, 2024

Revenues from external customers

$ 146,061,306

$ 255,253,221

Intersegment revenues

12 unchanged sentences

For the Three Months Ended

June 30, 2023

September 30, 2023

Revenues from external customers

3 unchanged sentences

( 3,486,083 )

For the Six Months Ended

June 30, 2023

For the Nine Months Ended

September 30, 2023

Revenues from external customers

$ 140,685,555

$ 243,588,620

Intersegment revenues

25 unchanged sentences

Financial assets and financial liabilities whose values are based on the following:

prices for similar assets or liabilities in active markets.

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

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 financial assets and financial liabilities.

Quoted prices for similar assets or liabilities in active markets.

Quoted prices for identical or similar assets or liabilities

in non-active markets;

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 financial assets and financial liabilities.

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

84 unchanged sentences

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 as of June 30, 2024:

their classification in the condensed consolidated balance sheet as of September 30, 2024:

Schedule of Fair Value Assets and Liabilities Measured on a Recurring Basis

Quoted Prices in Active Markets for Identical

Quoted Prices in Active Markets for Identical Assets

Significant Observable Inputs

26 unchanged sentences

$ ( 3,168,855 )

(1) Fixed maturity

securities available for sale

(2) Equity securities

(3) Included in other

assets on the consolidated balance sheets

(4) Included in other

liabilities and accrued expenses on the consolidated balance sheets

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

4 unchanged sentences

their classification in the condensed consolidated balance sheet as of December 31, 2023:

Quoted Prices in Active Markets for Identical

Quoted Prices in Active Markets for Identical Assets

Significant Observable Inputs

26 unchanged sentences

$ ( 3,412,224 )

(1) Fixed maturity

securities available for sale

(2) Equity securities

(3) Included in other

assets on the consolidated balance sheets

(4) Included in other

liabilities and accrued expenses on the consolidated balance sheets

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

2 unchanged sentences

8) Fair Value of Financial Instruments (Continued)

Level 3 assets and liabilities measured at fair value on a recurring basis as of June 30, 2024, the significant unobservable inputs used

in the fair value measurements were as follows:

Level 3 assets and liabilities measured at fair value on a recurring basis as of September 30, 2024, the significant unobservable inputs

used in the fair value measurements were as follows:

of Level 3 Assets and Liabilities Measured at Fair Value on Recurring Basis

Range of Inputs

Fair Value at

June 30, 2024

Range of Inputs

Loans held for sale

11 unchanged sentences

used in the fair value measurements were as follows:

Range of Inputs

Fair Value at

December 31, 2023

Range of Inputs

Loans held for sale

14 unchanged sentences

following table is a summary of changes in the condensed consolidated balance sheet line items measured using level 3 inputs for the

three month period ended June 30, 2024:

three month period ended September 30, 2024:

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

2 unchanged sentences

Fixed Maturity Securities Available for Sale

Balance - March 31, 2024

Balance - June 30, 2024

$ 150,196,416

5 unchanged sentences

( 179,836 )(1)

14,576,935 (1)

Included in other comprehensive income

Balance - June 30, 2024

Balance - September 30, 2024

$ 142,897,741

(1) As a component

of Mortgage fee income on the condensed consolidated statements of earnings

(2) As a component

of Net investment income on the condensed consolidated statements of earnings

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

following table is a summary of changes in the condensed consolidated balance sheet line items measured using level 3 inputs for the

three month period ended June 30, 2023:

three month period ended September 30, 2023:

Net Loan Commitments

1 unchanged sentence

Fixed Maturity Securities Available for Sale

Balance - March 31, 2023

Balance - June 30, 2023

$ 161,310,060

9 unchanged sentences

Included in other comprehensive income

Balance - June 30, 2023

Balance - September 30, 2023

$ 152,546,566

(1) As a component

of Mortgage fee income on the condensed consolidated statements of earnings

(2) As a component

of Net investment income on the condensed consolidated statements of earnings

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

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

3 unchanged sentences

following table is a summary of changes in the condensed consolidated balance sheet line items measured using level 3 inputs for the

six month period ended June 30, 2024:

nine month period ended September 30, 2024:

Net Loan Commitments

8 unchanged sentences

Transfer to mortgage loans held for investment

( 1,867,552 )

Loans held for sale foreclosed into real estate held for sale

3 unchanged sentences

Included in other comprehensive income

Balance - June 30, 2024

Balance - September 30, 2024

$ 142,897,741

(1) As a component

of Mortgage fee income on the condensed consolidated statements of earnings

(2) As 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

following table is a summary of changes in the condensed consolidated balance sheet line items measured using level 3 inputs for the

six month period ended June 30, 2023:

nine month period ended September 30, 2023:

Net Loan Commitments

12 unchanged sentences

( 977,716 )(1)

31,576,482 (1)

Included in other comprehensive income

Balance - June 30, 2023

Balance - September 30, 2023

$ 152,546,566

(1) As a component

of Mortgage fee income on the condensed consolidated statements of earnings

(2) As a component

of Net investment income on the condensed consolidated statements of earnings

Company did not have any financial assets and financial liabilities measured at fair value on a nonrecurring basis as of June 30, 2024

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

Company did not have any financial assets and financial liabilities measured at fair value on a nonrecurring basis as of September 30,

2024 and as of December 31, 2023.

10 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 as of June 30, 2024 and December

are not necessarily indicative of the amounts the Company could have realized in a sales transaction as of September 30, 2024 and December

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, 2024:

are summarized as follows as of September 30, 2024:

Schedule of Financial Instruments Carried at Other Than Fair Value

2 unchanged sentences

Mortgage loans held for investment

$ 100,537,622

Residential construction

19 unchanged sentences

( 105,136,015 )

(1) Included in other

investments and policy loans on the condensed consolidated balance sheets

(2) Mortgage loans

held for investment

(3) Included in future

policy benefits and unpaid claims on the condensed consolidated balance sheets

Included in other investments and policy loans on the condensed

consolidated balance sheets

Mortgage loans held for investment

Included in future policy benefits and unpaid claims on the

condensed consolidated balance sheets

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

28 unchanged sentences

( 102,177,585 )

(1) Included in other

investments and policy loans on the consolidated balance sheets

(2) Mortgage loans

held for investment

(3) Included in future

policy benefits and unpaid claims on the consolidated balance sheets

Included in other investments and policy loans on the consolidated

balance sheets

Mortgage loans held for investment

Included in future policy benefits and unpaid claims on the

consolidated balance sheets

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

86 unchanged sentences

Schedule of Derivative Assets at Fair Value

June 30, 2024

September 30, 2024

December 31, 2023

19 unchanged sentences

Net Amount Gain (Loss)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended

September 30,

Nine Months Ended

September 30,

Classification

2 unchanged sentences

$ ( 179,836 )

$ ( 1,504,286 )

$ ( 977,716 )

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

3 unchanged sentences

Company follows the procedure of reinsuring risks of more than a specified limit, which ranges from $ 25,000 to $ 100,000 on newly issued

The Company has also assumed various reinsurance agreements through acquisition of various life companies.

The Company has also assumed various reinsurance agreements through acquisition of life companies.

The Company is ultimately

11 unchanged sentences

Covenants for Mortgage Warehouse Lines of Credit

Company, through its subsidiary SecurityNational Mortgage Company (“SecurityNational Mortgage”), has a line of credit with

Texas Capital Bank N.A.

This agreement allows SecurityNational Mortgage to borrow up to $ 100,000,000 for the sole purpose of funding

mortgage loans (the “Texas Capital Bank Warehouse Line of Credit”).

The agreement charges interest at the 1-Month SOFR rate

plus 2.0% and matures on November 30, 2024 .

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 four-quarter basis.

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

This agreement allows SecurityNational

Mortgage to borrow up to $ 15,000,000 for the sole purpose of funding mortgage loans (the “U.S.

Bank Warehouse Line of Credit”

and, together with the Texas Capital Bank Warehouse Line of Credit, the “Warehouse Lines of Credit”).

Company, through its subsidiary SecurityNational Mortgage, has two lines of credit for the purpose of funding mortgage loans.

Company’s agreement with U.S.

Bank allows SecurityNational Mortgage to borrow up to $ 15,000,000 .

The agreement charges interest

at 2.10% plus the greater of (i) 0%, and (ii) the one-month forward-looking term rate based on SOFR and matures on June 20, 2025 .

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’s agreement with Western Alliance Bank allows SecurityNational Mortgage to borrow up to $ 25,000,000 .

The agreement charges

interest at 2.10% plus the greater of (i) 0%, and (ii) the one-month forward-looking term rate based on SOFR and matures on June 20,

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 Western Alliance Bank.

This agreement allows SecurityNational

Mortgage to borrow up to $ 35,000,000 for the sole purpose of funding mortgage loans (the “Western Alliance Bank Warehouse Line

The agreement charges interest at the 1-Month SOFR rate plus 2.0% and matures on June 20, 2025 .

The Company is required

to comply with covenants for adjusted tangible net worth, unrestricted cash balance, and minimum combined pre-tax income of at least

$ 1.00 on a quarterly basis.

interest at the 1-Month SOFR rate plus 2.0% and matures on August 27, 2025 .

The Company is required to comply with covenants for adjusted

tangible net worth, unrestricted cash balance, and minimum combined pre-tax income of at least $ 1.00 on a quarterly basis.

agreements for both warehouse lines of credit include cross default provisions where certain events of default under other of SecurityNational

Mortgage’s obligations constitute events of default under the warehouse lines of credit.

As of September 30, 2024, the Company

was in compliance with the net income covenant of the warehouse lines of credit and its operating cash flow covenant for its standby

letter of credit with its primary bank.

The Company has performed an internal analysis of its funding capacities of both internal and

external sources and has determined that there are sufficient funds to continue its current business model.

The Company continues to

negotiate other warehouse lines of credit with other lenders.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

2 unchanged sentences

10) Reinsurance, Commitments and Contingencies (Continued)

agreements for the warehouse lines of credit include cross default provisions where certain events of default under other of SecurityNational

Mortgage’s obligations constitute events of default under the warehouse lines of credit.

As of June 30, 2024, the Company was not

in compliance with the net income covenant of the warehouse lines of credit and its operating cash flow covenant for its standby letter

of credit with its primary bank.

SecurityNational Mortgage has received or is in the process of receiving waivers under the warehouse

lines of credit from the warehouse banks.

In the unlikely event the Company is required to repay the outstanding advances of approximately

$ 6,617,000 on the warehouse line of credit that has not provided a covenant waiver, the Company has sufficient cash and borrowing capacity

on the warehouse lines of credit that have provided covenant waivers to fund its origination activities.

The Company has performed an

internal analysis of its funding capacities of both internal and external sources and has determined that there are sufficient funds

to continue its business model.

The Company continues to negotiate other warehouse lines of credit with other lenders.

Covenants for Revolving Lines of Credit and Bank Loans

Company has debt covenants on its revolving lines of credit and is required to comply with minimum operating cash flow ratios and minimum

net worth for each of its business segments.

The Company also has debt covenants for one of its loans on real estate for a minimum consolidated

operating cash flow ratio, minimum liquidity, and consolidated net worth.

In addition to these financial debt covenants, the Company

is required to provide segment specific financial statements and building specific financial statements on all bank loans.

30, 2024, the Company was in compliance with all these debt covenants.

Company also has debt covenants on its revolving lines of credit and is required to comply with minimum operating cash flow ratios and

minimum net worth for each of its business segments.

The Company also has debt covenants for one of its loans on real estate for a minimum

consolidated operating cash flow ratio, minimum liquidity, and consolidated net worth.

In addition to these financial debt covenants,

the Company is required to provide segment specific financial statements and building specific financial statements on all bank loans.

As of September 30, 2024, the Company was in compliance with all these debt covenants.

Contingencies and Commitments

Company has commitments to fund existing construction and land development loans pursuant to the various loan agreements.

As of September

30, 2024, the Company’s commitments were approximately $ 193,870,000 for these loans, of which $ 131,896,896 had been funded.

45 unchanged sentences

Schedule of Mortgage Servicing Rights

As of June 30,

As of September 30,

As of December 31,

3 unchanged sentences

Amortization (2)

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

Application of valuation allowance to write down MSRs

with other than temporary impairment

Balance before valuation allowance at end of period

1 unchanged sentence

Balance at beginning of year

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

Application of valuation allowance to write down MSRs

with other than temporary impairment

Balance at end of period

1 unchanged sentence

Estimated fair value of MSRs at end of period

(1) Included in mortgage

fee income on the condensed consolidated statements of earnings

(2) Included in other

expenses on the condensed consolidated statements of earnings

Included in mortgage fee income on the condensed consolidated

statements of earnings

Included in other expenses on the condensed consolidated statements

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

4 unchanged sentences

This projection

was developed using the Company’s assumptions in its June 30, 2024 valuation of MSRs.

The assumptions used in the following table

are likely to change as market conditions, portfolio composition and borrower behavior change, causing both actual and projected amortization

levels to change over time.

was developed using the Company’s assumptions in its September 30, 2024 valuation of MSRs.

The assumptions used in the following

table are likely to change as market conditions, portfolio composition and borrower behavior change, causing both actual and projected

amortization levels to change over time.

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

3 unchanged sentences

of Other Revenues

Three Months Ended

Six Months Ended

Three Months Ended September 30,

Nine Months Ended

September 30,

Contractual servicing fees

1 unchanged sentence

of Unpaid Principal Balances of the Servicing Portfolio

As of June 30,

As of September 30,

As of December 31, 2023

4 unchanged sentences

of Assumptions Used in Determining MSR Value

June 30, 2024

September 30, 2024

December 31, 2023

2 unchanged sentences

30, 2024 (Unaudited)

Company’s overall effective tax rate for the three month periods ended June 30, 2024 and 2023 was 22.6 % and 22.0 %, respectively,

which resulted in a provision for income taxes of $ 2,118,044 and $ 1,796,627 , respectively, and for the six month periods ended June 30,

12) Income Taxes

Company’s overall effective tax rate for the three month periods ended September 30, 2024 and 2023 was 22.2 % and 21.7 %, respectively,

which resulted in a provision for income taxes of $ 3,383,238 and $ 1,117,397 , respectively, and for the nine month periods ended September

30, 2024 and 2023 was 22.3 % and 21.9 %, respectively, which resulted in a provision for income taxes of $ 7,646,071 and $ 3,258,740 , respectively.

51 unchanged sentences

Opening (January 1, 2024)

Closing (June 30, 2024)

Closing (September 30, 2024)

Increase/(decrease)

6 unchanged sentences

Increase/(decrease)

(1) Included in Receivables,

net on the condensed consolidated balance sheets

amount of revenue recognized and included in the opening contract liability balance for the three month periods ended June 30, 2024 and

2023 was $ 1,429,381 and $ 1,116,566 , respectively, and for the six month periods ended June 30, 2024 and 2023 was $ 2,935,495 and $ 2,236,898 ,

respectively.

Included in Receivables, net on the condensed consolidated

balance sheets

amount of revenue recognized and included in the opening contract liability balance for the three month periods ended September 30, 2024

and 2023 was $ 1,320,688 and $ 1,279,750 , respectively, and for the nine month periods ended September 30, 2024 and 2023 was $ 4,256,184

and $ 3,516,215 , respectively.

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

4 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Major goods/service lines

Net mortuary and cemetery sales

mortuary and cemetery sales

Timing of Revenue Recognition

1 unchanged sentence

Services transferred at a point in time

Net mortuary and cemetery

mortuary and cemetery sales

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

6 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Net mortuary and cemetery sales

Gains on investments and other assets

Gains (losses) on investments and other assets

Net investment income

1 unchanged sentence

Revenues from external customers

14) Receivables

consist of the following:

Schedule of Receivables

As of June 30, 2024

As of September 30, 2024

As of December 31, 2023

11 unchanged sentences

Three Months Ended

Beginning balance - March 31, 2024

Beginning balance - June 30, 2024

Change in provision for credit losses (1)

Ending balance - June 30, 2024

Beginning balance - March 31, 2023

Ending balance - September 30, 2024

Beginning balance - June 30, 2023

Change in provision for credit losses (1)

Ending balance - June 30, 2023

(1) Included in other

expenses on the condensed consolidated statements of earnings

Ending balance - September 30, 2023

Included in other expenses on the condensed consolidated statements

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2024 (Unaudited)

14) Receivables (Continued)

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

Six Months Ended

Nine Months Ended

Beginning balance - January 1, 2024

Change in provision for credit losses (1)

Ending balance - June 30, 2024

Ending balance - September 30, 2024

Beginning balance - January 1, 2023

Change in provision for credit losses (1)

Ending balance - June 30, 2023

Ending balance - September 30, 2023

(1) Included in other

12 unchanged sentences

Care Obligation in the accompanying consolidated balance sheets .

components of the cemetery perpetual care investments and obligation as of June 30, 2024, are as follows:

components of the cemetery perpetual care investments and obligation as of September 30, 2024, are as follows:

of Investments

4 unchanged sentences

Estimated Fair Value

June 30, 2024:

September 30, 2024:

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

52 unchanged sentences

table below summarizes unrealized losses on fixed maturity securities available for sale that were carried at estimated fair value as

of June 30, 2024 and December 31, 2023.

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

of September 30, 2024 and December 31, 2023.

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

maturity securities:

Schedule of Fair Value of Fixed Maturity Securities

2 unchanged sentences

Total Unrealized Loss

June 30, 2024

September 30, 2024

Treasury securities and obligations of U.S.

10 unchanged sentences

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

holdings were comprised of three securities with fair values aggregating 96.7 % of the aggregate amortized cost as of June 30, 2024.

holdings were comprised of four securities with fair values aggregating 98.1 % of aggregate amortized cost as of December 31, 2023.

credit losses have been recognized for the three and six month periods ended June 30, 2024 and 2023, since the increase in unrealized

losses is primarily a result of increases in interest rates.

See Note 3 for additional information regarding the Company’s evaluation

of the allowance for credit losses for fixed maturity securities available for sale.

table below presents the amortized cost and estimated fair value of fixed maturity securities available for sale as of June 30, 2024,

holdings were comprised of three securities with fair values aggregating 99.2 % of the aggregate amortized cost as of September 30, 2024.

Relevant holdings were comprised of four securities with fair values aggregating 98.1 % of aggregate amortized cost as of December 31,

No credit losses have been recognized for the three and nine month periods ended September 30, 2024 and 2023, since the increase

in unrealized losses is primarily a result of increases in interest rates.

See Note 3 for additional information regarding the Company’s

evaluation of the allowance for credit losses for fixed maturity securities available for sale.

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

2024, by contractual maturity.

Expected maturities may differ from contractual maturities because certain borrowers may have the right to call

or prepay obligations with or without call or prepayment penalties.

Expected maturities may differ from contractual maturities because certain borrowers may have the right

to call or prepay obligations with or without call or prepayment penalties.

Schedule of Investments Classified by Contractual

11 unchanged sentences

with its pre-need sales for its cemetery and mortuary segment.

cash also represents escrows held for borrowers and investors under servicing and appraisal agreements relating to mortgage loans, funds

held by warehouse banks in accordance with loan purchase agreements and funds held in escrow for certain real estate construction development

Additionally, the Company elected to maintain its medical benefit fund without change from the prior year and has included

this amount as a component of restricted cash.

These restricted cash items are for the Company’s life insurance and mortgage segments.

assets as of June 30, 2024, are summarized as follows:

Additionally,

restricted cash represents escrows held for borrowers and investors under servicing and appraisal agreements relating to mortgage loans,

funds held by warehouse banks in accordance with loan purchase agreements and funds held in escrow for certain real estate construction

development projects.

Additionally, the Company elected to maintain its medical benefit fund without change from the prior year and has

included this amount as a component of restricted cash.

These restricted cash items are for the Company’s life insurance and mortgage

assets as of September 30, 2024, are summarized as follows:

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

4 unchanged sentences

Estimated Fair Value

June 30, 2024:

September 30, 2024:

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

19 unchanged sentences

and cash equivalents of $ 12,032,252 for the life insurance and mortgage segments.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2024 (Unaudited)

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated

Financial Statements

September 30, 2024 (Unaudited)

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

23 unchanged sentences

Total restricted assets

(1) Including cash and cash equivalents of $ 6,930,930 for the life insurance and mortgage segments.

(1) Including cash

and cash equivalents of $ 6,930,930 for the life insurance and mortgage segments.

Maturity Securities

table below summarizes unrealized losses on fixed maturity securities available for sale that were carried at estimated fair value as

of June 30, 2024 and December 31, 2023.

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

of September 30, 2024 and December 31, 2023.

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

maturity securities.

of Fair Value of Fixed Maturity Securities

2 unchanged sentences

Total Unrealized Loss

June 30, 2024

September 30, 2024

Treasury securities and obligations of U.S.

7 unchanged sentences

Corporate securities including public utilities

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2024 (Unaudited)

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated

Financial Statements

September 30, 2024 (Unaudited)

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

holdings were comprised of 14 securities with fair values aggregating 98.7 % of the aggregate amortized cost as of June 30, 2024.

holdings were comprised of 12 securities with fair values aggregating 99.1 % of the aggregate amortized cost as of December 31, 2023.

No credit losses have been recognized for the three and six month periods ended June 30, 2024 and 2023, since the increase in unrealized

losses is primarily a result of increases in interest.

See Note 3 for additional information regarding the Company’s evaluation

of the allowance for credit losses for fixed maturity securities available for sale.

table below presents the amortized cost and estimated fair value of fixed maturity securities available for sale as of June 30, 2024,

holdings were comprised of 12 securities with fair values aggregating 99.3 % of the aggregate amortized cost as of September 30, 2024.

Relevant holdings were comprised of 12 securities with fair values aggregating 99.1 % of the aggregate amortized cost as of December 31,

No credit losses have been recognized for the three and nine month periods ended September 30, 2024 and 2023, since the increase

in unrealized losses is primarily a result of increases in interest.

See Note 3 for additional information regarding the Company’s

evaluation of the allowance for credit losses for fixed maturity securities available for sale.

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

2024, by contractual maturity.

Expected maturities may differ from contractual maturities because certain borrowers may have the right to call

or prepay obligations with or without call or prepayment penalties.

Expected maturities may differ from contractual maturities because certain borrowers may have the right

to call or prepay obligations with or without call or prepayment penalties.

Schedule of Investments Classified by Contractual

6 unchanged sentences

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

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

June 30, 2024 (Unaudited)

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated

Financial Statements

September 30, 2024 (Unaudited)

16) Accumulated Other Comprehensive Income (loss)

1 unchanged sentence

Schedule of Changes in Accumulated Other Comprehensive Income

Three Months Ended June 30,

Six Months Ended June 30,

Unrealized gains (losses) on fixed maturity securities available for

$ ( 654,164 )

Three Months Ended September 30,

Nine Months Ended September 30,

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

$ ( 6,725,752 )

7 unchanged sentences

( 1,824,502 )

Unrealized losses on restricted assets (1)

Unrealized losses on cemetery perpetual care

( 5,376,426 )

( 5,198,792 )

Unrealized gains (losses) on restricted assets (1)

Tax (expense) benefit

Unrealized gains (losses) on cemetery perpetual care

trust investments (1)

Tax (expense) benefit

Other comprehensive income (loss) changes

1 unchanged sentence

$ ( 5,212,021 )

$ ( 1,412,227 )

(1) Fixed maturity

securities available for sale

following table presents the accumulated balances of other comprehensive income (loss) as of June 30, 2024:

following table presents the accumulated balances of other comprehensive income (loss) as of September 30, 2024:

Schedule of Accumulated Balances of Other Comprehensive Income

1 unchanged sentence

Change for the period

Ending Balance June 30,

Unrealized losses on fixed maturity securities available for sale

$ ( 6,876,629 )

$ ( 1,408,167 )

$ ( 8,284,796 )

Unrealized losses on restricted assets (1)

Unrealized losses on cemetery perpetual care trust investments (1)

Other comprehensive loss

$ ( 6,885,558 )

Ending Balance September 30,

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

$ ( 6,876,629 )

Unrealized gains (losses) on restricted assets (1)

Unrealized gains (losses) on cemetery perpetual care trust investments (1)

Other comprehensive income (loss)

$ ( 6,885,558 )

(1) Fixed maturity securities available for sale

(1) Fixed maturity

securities available for sale

following table presents the accumulated balances of other comprehensive income (loss) as of December 31, 2023:

13 unchanged sentences

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