SECURITY NATIONAL FINANCIAL CORP 10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2026 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to ________ Commission File Number: 000-09341 Security National Financial Corporation (Exact name of registrant as specified in its charter) utah 87-0345941 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 433 Ascension Way , 6 th Floor , Salt Lake City , Utah 84123 (Address of principal executive offices) (Zip Code) (801) 264-1060 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading symbol Name of each exchange on which registered Class A Common Stock SNFCA The Nasdaq Global Select Market Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☒ Non-accelerated filer ☐ (Do not check if a smaller reporting company) Smaller reporting company ☒ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ As of May 1, 2026, the registrant had 22,450,787 shares of Class A Common Stock, $ 2.00 par value, outstanding and 3,587,099 shares of Class C Common Stock, $ 2.00 par value, outstanding. SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES FORM 10-Q QUARTER ENDED MARCH 31, 2026 Table of Contents Page No. Part I - Financial Information Item 1. Financial Statements (Unaudited) (at March 31, 2026 and December 31, 2025 and for the Three Months Ended March 31, 2026 and 2025) Condensed Consolidated Balance Sheets 3 Condensed Consolidated Statements of Earnings 5 Condensed Consolidated Statements of Comprehensive Income 6 Condensed Consolidated Statements of Stockholders’ Equity 7 Condensed Consolidated Statements of Cash Flows 8 Notes to Condensed Consolidated Financial Statements: 10 Note 1 - Basis of Presentation and Recent Accounting Pronouncements 10 Note 2 - Investments 14 Note 3 - Loans Held for Sale 34 Note 4 - Receivables 36 Note 5 - Restricted Assets 38 Note 6 - Cemetery Perpetual Care Trust Investments and Obligation 41 Note 7 - Mortgage Servicing Rights 44 Note 8 - Deferred Policy and Pre-need Contract Acquisition Costs, Value of Business Acquired and Unearned Premium Reserve 46 Note 9 - Derivative Instruments 47 Note 10 - Future Policy Benefits and Unpaid Claims 49 Note 11 - Policyholder Account Balances 53 Note 12 - Reinsurance 55 Note 13 - Income Taxes 55 Note 14 - Equity 56 Note 15 - Earnings Per Share 58 Note 16 - Business Segment Information 59 Note 17 - Fair Value of Financial Instruments 62 Note 18 - Stock Compensation Plans 70 Note 19 - Commitments and Contingencies 74 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 76 Item 3. Quantitative and Qualitative Disclosures about Market Risk 81 Item 4. Controls and Procedures 81 Part II - Other Information Item 1. Legal Proceedings 82 Item 1A. Risk Factors 82 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 82 Item 3. Defaults Upon Senior Securities 83 Item 4. Mine Safety Disclosures 83 Item 5. Other Information 83 Item 6. Exhibits 83 Signatures 84 2 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) Part I - Financial Information Item 1. Financial Statements. Assets March 31, 2026 December 31, 2025 Assets Investments: Fixed maturity securities, available for sale, at estimated fair value (amortized cost of $ 371,602,158 and $ 382,401,293 for 2026 and 2025, respectively; net of allowance for credit losses of $ 675,997 and $ 579,450 for 2026 and 2025, respectively) $ 367,565,925 $ 382,777,918 Equity securities at estimated fair value (cost of $ 12,477,275 and $ 12,206,559 for 2026 and 2025, respectively) 18,346,314 18,050,062 Mortgage loans held for investment (net of allowance for credit losses of $ 2,553,360 and $ 2,588,918 for 2026 and 2025, respectively) 305,268,440 322,435,385 Real estate held for investment (net of accumulated depreciation of $ 38,595,436 and $ 37,159,212 for 2026 and 2025, respectively) 234,345,333 214,897,130 Real estate held for sale 6,388,376 6,424,027 Other investments and policy loans (net of allowance for credit losses of $ 1,518,047 and $ 1,676,468 for 2026 and 2025, respectively) 83,502,066 85,223,293 Accrued investment income 9,596,277 9,054,645 Total investments 1,025,012,731 1,038,862,460 Cash and cash equivalents 150,120,283 102,256,828 Loans held for sale at estimated fair value 137,607,689 155,968,266 Receivables (net of allowance for credit losses of $ 1,523,072 and $ 1,428,672 for 2026 and 2025, respectively) 16,202,589 15,611,074 Restricted assets (including $ 16,832,910 and $ 16,106,168 for 2026 and 2025 respectively, at estimated fair value) 29,953,633 28,805,946 Cemetery perpetual care trust investments (including $ 6,787,546 and $ 6,575,744 for 2026 and 2025, respectively, at estimated fair value) 10,026,606 9,871,947 Receivable from reinsurers 13,460,840 13,655,373 Cemetery land and improvements 11,333,039 11,299,283 Mortgage servicing rights, net 2,460,261 2,528,459 Property and equipment, net 17,890,401 18,211,717 Deferred policy and pre-need contract acquisition costs 137,601,837 135,978,803 Value of business acquired 6,995,363 7,109,186 Goodwill 5,253,783 5,253,783 Other 16,864,886 16,431,479 Total Assets $ 1,580,783,941 $ 1,561,844,604 See accompanying notes to condensed consolidated financial statements (unaudited). 3 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Continued) (Unaudited) March 31, 2026 December 31, 2025 Liabilities and Stockholders’ Equity Liabilities Future policy benefits and unpaid claims $ 790,945,507 $ 799,706,946 Policyholder account balances 138,842,575 140,605,750 Unearned premium reserve 1,777,365 1,824,796 Bank and other loans payable 108,760,032 98,387,919 Deferred pre-need funeral home and cemetery contract revenues 23,487,532 22,991,603 Cemetery perpetual care obligation 5,998,538 5,918,776 Accounts payable 4,070,711 4,150,119 Other liabilities and accrued expenses 51,291,373 51,969,405 Income taxes 30,094,798 25,920,562 Total liabilities 1,155,268,431 1,151,475,876 Stockholders’ Equity Preferred Stock - non-voting - $ 1.00 par value; 5,000,000 shares authorized; none issued or outstanding - - Class A: common stock - $ 2.00 par value; 40,000,000 shares authorized; 22,432,763 shares issued and outstanding as of March 31, 2026 and 22,428,625 shares issued and outstanding as of December 31, 2025 44,865,526 44,857,250 Class B: non-voting common stock - $ 1.00 par value; 5,000,000 shares authorized; none issued or outstanding - - Class C: convertible common stock - $ 2.00 par value; 6,000,000 shares authorized; 3,587,237 shares issued and outstanding as of March 31, 2026 and 3,587,237 shares issued and outstanding as of December 31, 2025 7,174,474 7,174,474 Common stock value 7,174,474 7,174,474 Additional paid-in capital 90,395,465 89,867,763 Accumulated other comprehensive gain, net of taxes 36,836,062 28,762,123 Retained earnings 255,796,901 248,795,475 Treasury stock at cost - 1,137,578 Class A shares and 104,604 Class C shares as of March 31, 2026; and 1,095,964 Class A shares and 104,604 Class C shares as of December 31, 2025 ( 9,552,918 ) ( 9,088,357 ) Total stockholders’ equity 425,515,510 410,368,728 Total Liabilities and Stockholders’ Equity $ 1,580,783,941 $ 1,561,844,604 See accompanying notes to condensed consolidated financial statements (unaudited). 4 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) 2026 2025 Three Months Ended March 31, 2026 2025 Revenues: Insurance premiums and other considerations $ 28,855,254 $ 29,779,525 Mortgage fee income 23,489,659 24,809,241 Net investment income 18,501,348 19,202,624 Net funeral home and cemetery sales 7,733,823 7,300,221 Gains on investments and other assets 350,748 586,021 Other 797,948 1,062,091 Total revenues 79,728,780 82,739,723 Benefits and expenses: Policyholder benefits and claims (including the impact of assumption updates to the liability for future policy benefits of nil and nil for March 31, 2026 and 2025, respectively) 24,539,397 25,455,174 Amortization of deferred policy and pre-need acquisition costs and value of business acquired 2,979,318 2,796,999 Selling, general and administrative expenses: Commissions 8,793,860 10,438,381 Personnel 20,601,636 22,182,408 Advertising 737,063 823,945 Rent and rent related 822,277 988,611 Depreciation on property and equipment 580,090 615,135 Costs related to funding mortgage loans 1,673,977 1,415,252 Other 7,719,196 7,400,687 Interest expense 996,199 1,119,528 Cost of goods and services sold-funeral home and cemetery 1,233,449 1,253,270 Total benefits and expenses 70,676,462 74,489,390 Earnings before income taxes 9,052,318 8,250,333 Income tax expense ( 2,050,892 ) ( 1,836,598 ) Net earnings $ 7,001,426 $ 6,413,735 Net earnings per Class A Equivalent common share (1) $ 0.28 $ 0.26 Net earnings per Class A Equivalent common share-assuming dilution (1) $ 0.27 $ 0.25 Weighted-average Class A equivalent common shares outstanding (1) 24,818,596 24,699,405 Weighted-average Class A equivalent common shares outstanding-assuming dilution (1) 25,540,657 25,691,647 (1) Net earnings per share 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. See accompanying notes to condensed consolidated financial statements (unaudited). 5 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) 2026 2025 Three Months Ended March 31, 2026 2025 Net earnings $ 7,001,426 $ 6,413,735 Other comprehensive income (loss): Unrealized gains (losses) on fixed maturity securities available for sale $ ( 4,316,311 ) 3,861,257 Unrealized gains (losses) on restricted assets (1) ( 3,257 ) 4,288 Unrealized gains on cemetery perpetual care trust investments (1) 281 2,815 Interest rate remeasurement of future policy benefits 14,536,081 ( 8,122,845 ) Other comprehensive income (loss), before income tax 10,216,794 ( 4,254,485 ) Income tax benefit (expense) ( 2,142,855 ) 892,348 Other comprehensive income (loss), net of income tax 8,073,939 ( 3,362,137 ) Comprehensive income $ 15,075,365 $ 3,051,598 (1) Fixed maturity securities available for sale See accompanying notes to condensed consolidated financial statements (unaudited). 6 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) Class A Common Stock Class C Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Treasury Stock Total Three Months Ended March 31, 2026 Class A Common Stock Class C Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Treasury Stock Total December 31, 2025 $ 44,857,250 $ 7,174,474 $ 89,867,763 $ 28,762,123 $ 248,795,475 $ ( 9,088,357 ) $ 410,368,728 Net earnings - - - - 7,001,426 - 7,001,426 Other comprehensive income - - - 8,073,939 - - 8,073,939 Stock-based compensation expense - - 469,131 - - - 469,131 Exercise of stock options 2,102 4,540 - - 6,642 Vesting of restricted stock units 6,174 - ( 6,174 ) - - - - Sale of treasury stock - - 60,205 - - 320,960 381,165 Purchase of treasury stock - - - - - ( 785,521 ) ( 785,521 ) March 31, 2026 $ 44,865,526 $ 7,174,474 $ 90,395,465 $ 36,836,062 $ 255,796,901 $ ( 9,552,918 ) $ 425,515,510 Three Months Ended March 31, 2025 Class A Common Stock Class C Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Treasury Stock Total December 31, 2024 $ 42,510,012 $ 6,643,666 $ 79,698,367 $ 33,719,629 $ 227,804,439 $ ( 8,477,686 ) $ 381,898,427 Balance $ 42,510,012 $ 6,643,666 $ 79,698,367 $ 33,719,629 $ 227,804,439 $ ( 8,477,686 ) $ 381,898,427 Net earnings - - - - 6,413,735 - 6,413,735 Other comprehensive loss - - - ( 3,362,137 ) - - ( 3,362,137 ) Stock-based compensation expense - - 309,260 - - - 309,260 Exercise of stock options 132,546 190,674 ( 92,965 ) - - ( 149,009 ) 81,246 Vesting of restricted stock units 920 - ( 920 ) - - - - Sale of treasury stock - - 90,895 - - 136,367 227,262 Purchase of treasury stock - - - - - ( 242,265 ) ( 242,265 ) March 31, 2025 $ 42,643,478 $ 6,834,340 $ 80,004,637 $ 30,357,492 $ 234,218,174 $ ( 8,732,593 ) $ 385,325,528 Balance $ 42,643,478 $ 6,834,340 $ 80,004,637 $ 30,357,492 $ 234,218,174 $ ( 8,732,593 ) $ 385,325,528 7 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) 2026 2025 Three Months Ended March 31, 2026 2025 Cash flows from operating activities: Net cash provided by operating activities $ 32,939,808 $ 9,585,902 Cash flows from investing activities: Purchases of fixed maturity securities ( 13,789,720 ) ( 28,292,634 ) Sales, calls and maturities of fixed maturity securities 24,701,046 26,374,371 Purchases of equity securities ( 1,173,461 ) ( 1,114,187 ) Sales of equity securities 912,747 1,085,712 Purchases of restricted assets ( 2,086,944 ) ( 933,673 ) Sales, calls and maturities of restricted assets 1,234,336 96,874 Purchases of cemetery perpetual care trust investments ( 235,488 ) ( 26,565 ) Sales, calls and maturities of perpetual care trust investments 153,025 859,715 Mortgage loans held for investment, other investments and policy loans made ( 180,161,316 ) ( 217,905,832 ) Payments received for mortgage loans held for investment, other investments and policy loans 198,643,862 198,431,585 Purchases of property and equipment ( 189,702 ) ( 441,530 ) Sales of property and equipment - 1,200 Purchases of real estate ( 31,470,405 ) ( 16,643,207 ) Sales of real estate 11,172,949 9,241,645 Net cash provided by (used in) investing activities 7,710,929 ( 29,266,526 ) Cash flows from financing activities: Policyholder account balances - deposits 2,539,604 3,065,288 Policyholder account balances - withdrawals ( 4,707,568 ) ( 4,097,396 ) Proceeds from stock options exercised 6,642 81,246 Purchases of treasury stock ( 785,521 ) ( 242,265 ) Repayment of bank loans ( 525,837 ) ( 504,009 ) Net change in warehouse line borrowings for loans held for sale 10,806,644 16,567,385 Net cash provided by financing activities 7,333,964 14,870,249 Net change in cash, cash equivalents, restricted cash and restricted cash equivalents 47,984,701 ( 4,810,375 ) Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period 114,112,108 150,102,620 Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period $ 162,096,809 $ 145,292,245 Supplemental Disclosure of Cash Flow Information: Cash paid during the year for: Interest $ 986,881 $ 1,098,086 Federal income taxes 19,680 - State income taxes 30 - Non Cash Operating, Investing and Financing Activities: Benefit plans funded with treasury stock $ 381,165 $ 227,262 Right-of-use assets obtained in exchange for operating lease liabilities 191,212 436,109 Right-of-use assets obtained in exchange for finance lease liabilities 71,441 - Transfer from fixed maturity securities available for sale to other investments - 1,185,603 8 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) (Unaudited) Reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents as shown in the condensed consolidated statements of cash flows are presented in the table below: March 31, 2026 March 31, 2025 Cash and cash equivalents $ 150,120,283 $ 132,946,068 Restricted assets 10,659,181 11,455,091 Cemetery perpetual care trust investments 1,317,345 891,086 Total cash, cash equivalents, restricted cash and restricted cash equivalents $ 162,096,809 $ 145,292,245 Cash, cash equivalents, restricted cash and restricted cash equivalents at end of year $ 162,096,809 $ 145,292,245 See accompanying notes to condensed consolidated financial statements (unaudited). 9 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 1) Basis of Presentation and Recent Accounting Pronouncements Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Articles 8 and 10 of Regulation S-X. Accordingly, they do not include all the information and disclosures required by accounting principles generally accepted in the United States of America for complete financial statements. These financial statements should be read in conjunction with the consolidated financial statements of the Company and notes thereto for the year ended December 31, 2025, included in the Company’s Annual Report on Form 10-K (File Number 000-09341). In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three-month periods ended March 31, 2026, are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to adopt policies and make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. In applying these policies and estimates, the Company makes judgments that frequently require assumptions about matters that are inherently uncertain. Accordingly, significant estimates used in the preparation of the Company’s financial statements may be subject to significant adjustments in future periods. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant changes in the near term are those used in determining the value of derivative assets and liabilities; those used in determining deferred acquisition costs and the value of business acquired; those used in determining the liability for future policy benefits; those used in determining the value of loans held for sale; and those used in determining loan loss reserve. Although some variability is inherent in these estimates, management believes the amounts provided are fairly stated in all material respects. Certain prior-period amounts have been reclassified to conform to the current-period presentation. 10 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 1) Basis of Presentation and Recent Accounting Pronouncements (Continued) Recent Accounting Pronouncements Accounting Standards Adopted in 2025 ASU No. 2018-12: “Financial Services – Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts” — Issued in August 2018, ASU 2018-12 is intended to improve the timeliness of recognizing changes in the liability for future policy benefits on traditional long-duration contracts by requiring that assumptions be updated after contract inception and by modifying the rate used to discount future cash flows. The standard is aimed at improving the accounting for certain market-based options or guarantees associated with deposit or account balance contracts, simplifying amortization of deferred acquisition costs while improving and expanding required disclosures. In November 2020, ASU No. 2020-11: “Financial Services – Insurance (Topic 944): Effective Date and Early Application,” was issued. This ASU was issued to provide additional time for the implementation of ASU No. 2018-12 by deferring the effective date by one year. For smaller reporting companies, this update is effective for annual reporting periods beginning after December 15, 2024, and interim reporting periods beginning after December 15, 2025. On December 31, 2025, the Company adopted ASU No. 2018-12, using the modified retrospective approach, for changes to the liability for future policy benefits and deferred policy acquisition costs. The Company applied the guidance as of a transition date of January 1, 2024, and retrospectively adjusted prior period amounts to reflect the new guidance. The Company’s condensed consolidated financial statements are presented under the new guidance for reporting periods beginning January 1, 2024. After adoption, cash flow assumptions, such as mortality, lapse, and expense, will be reviewed at least annually and, if necessary, they will be updated to reflect actual experience and current expectations in the calculation of the Company’s future policy benefits. Historically, cash flow assumptions were locked in at policy issuance and remained in place for the life of the business—even when material variances emerged between assumptions and actual experience—except in the case of a premium deficiency. Under the new guidance, net premiums are capped at 100 percent of gross premiums at the cohort level. Adoption of this standard also requires changes in the future treatment of the Company’s Deferred Acquisition Cost (“DAC”) asset. Historically, the interest rate used to calculate the Company’s future policy benefits was set at policy issuance and remained in effect for the life of the policy. The Company used an expected investment portfolio rate of return based on a conservative experience assumption. The new guidance seeks to improve reporting on the financial impact associated with interest rate sensitivity. To accomplish this, future policy benefits are calculated using a discount rate based on an upper-medium-grade (A-rated) fixed income instrument. The initial future policy benefit for each cohort is calculated using the original discount rate and then remeasured using the current discount rate curve. The original rate is used to determine interest accretion on the liability—which is included in net earnings—as well as to calculate the net premiums in both scenarios. The impact of remeasurement, from the original locked-in discount rate to the current rate, is reported as a component of the Company’s AOCI. This original discount rate is locked in at the cohort’s inception or at the Transition Date and will continue to be used in determining the impact on future net earnings associated with that contract. DAC is used by insurance companies to defer costs related to acquiring insurance policies. Under the new guidance, amortization methods are simplified, and DAC for all insurance contracts will be subject to constant-level basis amortization over the lifetime of the policy. Historically, traditional life contracts were amortized in proportion to premiums over the expected premium-paying period. Additionally, shadow DAC is no longer reported. The requirements of the new guidance did not impact capital and surplus or net income under statutory accounting practices, cash flows on the Company’s policies, or the underlying economics of the Company’s business. 11 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 1) Basis of Presentation and Recent Accounting Pronouncements (Continued) The following tables present amounts as previously reported in 2025, the effect upon those amounts from the adoption of the new guidance under ASU No. 2018-12, and the resulting adjusted amounts that are reflected in the condensed consolidated financial statements included herein. The following tables only include those line items impacted by the adoption of the new guidance. Schedule of Error Correcetion Prior Period Adjustments As Previously Reported Effect of Change As Currently Reported Consolidated Statements of Earnings: Three Months Ended March 31, 2025 As Previously Reported Effect of Change As Currently Reported Benefits and expenses: Policyholder benefits and claims $ 26,235,077 $ ( 779,903 ) $ 25,455,174 Amortization of deferred policy and pre-need acquisition costs and value of business acquired 4,696,535 ( 1,899,536 ) 2,796,999 Total benefits and expenses 77,168,829 ( 2,679,439 ) 74,489,390 Earnings before income taxes 5,570,894 2,679,439 8,250,333 Income tax expense ( 1,232,602 ) ( 603,996 ) ( 1,836,598 ) Net earnings $ 4,338,292 $ 2,075,443 $ 6,413,735 Net earnings per Class A equivalent common share (1) $ 0.18 $ 0.08 $ 0.26 Net earnings per Class A equivalent common share - assuming dilution (1) $ 0.18 $ 0.07 $ 0.25 (1) Adjusted retroactively for the effect of annual stock dividends As Previously Reported Effect of Change As Currently Reported Consolidated Statements of Comprehensive Income: Three Months Ended March 31, 2025 As Previously Reported Effect of Change As Currently Reported Net earnings $ 4,338,292 $ 2,075,443 $ 6,413,735 Other comprehensive income: Unrealized gains on fixed maturity securities available for sale 3,788,729 72,528 3,861,257 Interest rate remeasurement of future policy benefits - ( 8,122,845 ) ( 8,122,845 ) Other comprehensive income (loss), before income tax 3,795,832 ( 8,050,317 ) ( 4,254,485 ) Income tax benefit (expense) ( 798,220 ) 1,690,568 892,348 Other comprehensive income (loss), net of income tax 2,997,612 ( 6,359,749 ) ( 3,362,137 ) Comprehensive income (loss) $ 7,335,904 $ ( 4,284,306 ) $ 3,051,598 As Previously Reported Effect of Change As Currently Reported Consolidated Statements of Stockholders’ Equity: Three Months Ended March 31, 2025 As Previously Reported Effect of Change As Currently Reported Accumulated other comprehensive income (loss) $ ( 3,953,654 ) $ 34,311,146 $ 30,357,492 Retained earnings 229,697,478 4,520,696 234,218,174 Total stockholders’ equity $ 346,493,686 $ 38,831,842 $ 385,325,528 12 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 1) Basis of Presentation and Recent Accounting Pronouncements (Continued) Accounting Standards Issued But Not Yet Adopted ASU No. 2024-03: “Income Statement-Reporting Comprehensive Income- Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” — Issued in November 2024, ASU 2024-03 requires public business entities to disclose, in the notes to the consolidated financial statements, specified information about certain expenses at each interim and annual reporting period. ASU 2024-03 requires disclosures about specific types of expenses (i.e., (a) purchases of inventory, (b) employee compensation, (c) depreciation and (d) intangible asset amortization) included in the expense captions presented on the face of the statement of earnings as well as disclosures about selling expenses. ASU 2024-03 does not change the requirements for the presentation of expenses on the statement of earnings. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Accordingly, the Company will adopt the standard commencing with its annual reporting period ending December 31, 2027. The Company is in the process of estimating the potential impact of this new standard on the consolidated financial statements. ASU No. 2025-11: “Interim Reporting (Topic 270): Narrow-Scope Improvements” — Issued in December 2025, ASU 2025-11 clarifies the form, content, and disclosure requirements for interim financial statements and the application of Topic 270. The update differentiates requirements by entity type: SEC registrants must continue to follow SEC rules for condensed financial statements; non-SEC registrants may present either full or condensed statements, using either the ASU’s guidance or SEC-style condensed guidance; and not-for-profit entities follow the non-SEC model with additional presentation considerations specific to NFP reporting. The ASU also compiles a comprehensive list of required interim disclosures for condensed statements from across the Codification, supported by conforming edits, to improve usability (while not replacing underlying guidance). In addition, the ASU reinforces a disclosure principle requiring entities to provide interim disclosures for significant events or transactions that have had a material effect since the most recent year-end, such as changes in accounting principles, key estimates, financing arrangements, long-term contracts, or the reporting entity. The amendments are effective for public business entities for interim periods within annual periods beginning after December 15, 2027, with early adoption permitted. The guidance may be applied prospectively or retrospectively. The Company is in the process of estimating the potential impact of this new standard on the consolidated financial statements. The 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. 13 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 2) Investments The Company’s investments as of March 31, 2026, are summarized as follows: Schedule of Investments Amortized Cost Gross Unrealized Gains Gross Unrealized Losses (1) Allowance for Credit Losses Estimated Fair Value March 31, 2026: Fixed maturity securities, available for sale, at estimated fair value: U.S. Treasury securities and obligations of U.S. Government agencies $ 65,521,592 $ 551,988 $ ( 105,766 ) $ - $ 65,967,814 Obligations of states and political subdivisions 3,093,790 5,517 ( 180,711 ) - 2,918,596 Corporate securities including public utilities 278,845,730 4,478,480 ( 4,529,438 ) ( 521,948 ) 278,272,824 Mortgage-backed securities 23,391,046 57,503 ( 3,607,509 ) ( 154,049 ) 19,686,991 Redeemable preferred stock 750,000 7,200 ( 37,500 ) - 719,700 Total fixed maturity securities available for sale $ 371,602,158 $ 5,100,688 $ ( 8,460,924 ) $ ( 675,997 ) $ 367,565,925 Equity securities at estimated fair value: Common stock: Industrial, miscellaneous and all other $ 12,477,275 $ 6,222,419 $ ( 353,380 ) $ 18,346,314 Total equity securities at estimated fair value $ 12,477,275 $ 6,222,419 $ ( 353,380 ) $ 18,346,314 Mortgage loans held for investment at amortized cost: Residential $ 85,519,490 Residential construction 149,601,559 Commercial 74,614,673 Less: Unamortized deferred loan fees, net ( 1,664,276 ) Less: Allowance for credit losses ( 2,553,360 ) Less: Net discounts ( 249,646 ) Total mortgage loans held for investment $ 305,268,440 Real estate held for investment - net of accumulated depreciation: Residential $ 114,491,810 Commercial 119,853,523 Total real estate held for investment $ 234,345,333 Real estate held for sale: Residential $ 6,236,823 Commercial 151,553 Total real estate held for sale $ 6,388,376 Other investments and policy loans at amortized cost: Policy loans $ 14,536,305 Insurance assignments 46,315,781 Federal Home Loan Bank stock (2) 677,100 Other investments 23,490,927 Less: Allowance for credit losses for insurance assignments ( 1,518,047 ) Total other investments and policy loans $ 83,502,066 Accrued investment income $ 9,596,277 Total investments $ 1,025,012,731 (1) Gross unrealized losses are net of allowance for credit losses (2) Includes $ 612,300 of Membership stock and $ 64,800 of Activity stock attributable to short-term borrowings and letters of credit. 14 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 2) Investments (Continued) The Company’s investments as of December 31, 2025, are summarized as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses (1) Allowance for Credit Losses Estimated Fair Value December 31, 2025: Fixed maturity securities, available for sale, at estimated fair value: U.S. Treasury securities and obligations of U.S. Government agencies $ 75,713,307 $ 982,769 $ ( 89,550 ) $ - $ 76,606,526 Obligations of states and political subdivisions 3,396,999 11,662 ( 172,184 ) - 3,236,477 Corporate securities including public utilities 277,708,638 7,029,453 ( 3,387,651 ) ( 425,401 ) 280,925,039 Mortgage-backed securities 24,832,349 161,348 ( 3,553,214 ) ( 154,049 ) 21,286,434 Redeemable preferred stock 750,000 10,942 ( 37,500 ) - 723,442 Total fixed maturity securities available for sale $ 382,401,293 $ 8,196,174 $ ( 7,240,099 ) $ ( 579,450 ) $ 382,777,918 Equity securities at estimated fair value: Common stock: Industrial, miscellaneous and all other $ 12,206,559 $ 6,176,440 $ ( 332,937 ) $ 18,050,062 Total equity securities at estimated fair value $ 12,206,559 $ 6,176,440 $ ( 332,937 ) $ 18,050,062 Mortgage loans held for investment at amortized cost: Residential $ 90,644,590 Residential construction 157,398,705 Commercial 79,231,786 Less: Unamortized deferred loan fees, net ( 1,995,795 ) Less: Allowance for credit losses ( 2,588,918 ) Less: Net discounts ( 254,983 ) Total mortgage loans held for investment $ 322,435,385 Real estate held for investment - net of accumulated depreciation: Residential $ 93,638,938 Commercial 121,258,192 Total real estate held for investment $ 214,897,130 Real estate held for sale: Residential $ 6,272,474 Commercial 151,553 Total real estate held for sale $ 6,424,027 Other investments and policy loans at amortized cost: Policy loans $ 14,467,357 Insurance assignments 46,183,999 Federal Home Loan Bank stock (2) 646,500 Other investments 25,601,905 Less: Allowance for credit losses for insurance assignments ( 1,676,468 ) Total policy loans and other investments $ 85,223,293 Accrued investment income $ 9,054,645 Total investments $ 1,038,862,460 (1) Gross unrealized losses are net of allowance for credit losses (2) Includes $ 581,600 of Membership stock and $ 64,900 of Activity stock due to short-term advances and letters of credit. 15 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 2) Investments (Continued) There were no investments in fixed maturity securities or equity securities, aggregated by issuer, of more than 10% of shareholders’ equity (before net unrealized gains and losses on equity securities and fixed maturity securities) as of March 31, 2026, other than investments issued or guaranteed by the United States Government. Fixed Maturity Securities The table below summarizes unrealized losses on fixed maturity securities available for sale that were carried at estimated fair value as of March 31, 2026, and December 31, 2025. The fair values of fixed maturity securities that are actively traded are based on quoted market prices. For fixed maturity securities that are not actively traded, fair values are estimated using values obtained from independent pricing services, or in the case of private placements, are estimated by discounting expected future cash flows using a current market value applicable to the coupon rate, credit and maturity of the investments. The table below sets forth unrealized losses by duration with the fair value of the related fixed maturity securities. Schedule of Fair Value of Fixed Maturity Securities Unrealized Losses for Less than Twelve Months Fair Value Unrealized Losses for More than Twelve Months Fair Value Total Unrealized Loss Combined Fair Value March 31, 2026 U.S. Treasury securities and obligations of U.S. Government agencies $ 47,025 $ 12,992,660 $ 58,741 $ 1,581,809 $ 105,766 $ 14,574,469 Obligations of states and political subdivisions 3,152 196,848 177,559 2,081,355 180,711 2,278,203 Corporate securities including public utilities 1,423,738 76,810,812 3,105,700 37,427,064 4,529,438 114,237,876 Mortgage-backed securities 12,324 973,482 3,595,185 16,667,312 3,607,509 17,640,794 Redeemable preferred stock 37,500 212,500 - - 37,500 212,500 Totals $ 1,523,739 $ 91,186,302 $ 6,937,185 $ 57,757,540 $ 8,460,924 $ 148,943,842 December 31, 2025 U.S. Treasury securities and obligations of U.S. Government agencies $ 2,591 $ 2,047,280 $ 86,959 $ 11,033,603 $ 89,550 $ 13,080,883 Obligations of states and political subdivisions 4,884 195,116 167,300 2,095,220 172,184 2,290,336 Corporate securities including public utilities 638,436 30,085,561 2,749,214 42,688,720 3,387,650 72,774,281 Mortgage-backed securities 4,353 192,242 3,548,862 17,504,265 3,553,215 17,696,507 Redeemable preferred stock 37,500 212,500 - - 37,500 212,500 Totals $ 687,764 $ 32,732,699 $ 6,552,335 $ 73,321,808 $ 7,240,099 $ 106,054,507 Relevant holdings were comprised of 506 securities with fair values aggregating 94.6 % of the aggregate amortized cost as of March 31, 2026, compared to 338 securities with fair values aggregating 93.6 % of the aggregate amortized cost as of December 31, 2025. A credit loss provision of $ 96,547 and of $ 86,307 have been recognized for the three-month periods ended March 31, 2026, and 2025, 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. 16 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 2) Investments (Continued) Evaluation of Allowance for Credit Losses The Company evaluates its fixed maturity securities classified as available for sale on a quarterly basis to identify any potential credit losses. This evaluation includes a review of current ratings by the National Association of Insurance Commissions (“NAIC”) and other industry rating agencies. Securities with NAIC rating of 1 or 2 are considered investment grade and are only reviewed for credit loss if current market data or recent company news could lead to a credit downgrade. Securities with NAIC ratings of 3 to 5 are considered non-investment grade and are evaluated for credit loss. The evaluation involves assessing all facts and circumstances surrounding each security including, but not limited to, historical values, interest payment history, projected earnings, and revenue growth rates as well as a review of the reason for a downgrade in the NAIC rating. Based on the analysis of a security that is rated 3 to 5, a determination is made whether the security will likely make payments in accordance with the terms of the financial instrument. Securities with a rating of 6 are automatically determined to be impaired, and a credit loss is recognized in earnings. Where the decline in fair value of fixed maturity securities is attributable to changes in market interest rates or to factors such as market volatility, liquidity and spread widening, and the Company anticipates recovery of all contractual or expected cash flows, the Company does not consider these securities to have credit loss because the Company does not intend to sell these securities and it is not more likely than not the Company will be required to sell these securities before a recovery of amortized cost, which may be at maturity. If the Company intends to sell a fixed maturity security or if it is more likely than not that the Company will be required to sell a security before recovery of its amortized cost basis, a credit loss has occurred and the difference between the amortized cost and the fair value that relates to the expected credit loss is recognized as a loss in earnings, included in gains (losses) on investments and other assets on the condensed consolidated statements of earnings. If the Company does not intend to sell a fixed maturity security and it is less likely than not that the Company will be required to sell the security but the Company also does not expect to recover the entire amortized cost basis of the security, a credit loss is recognized in earnings for the amount of the expected credit loss with a corresponding allowance for credit losses as a contra-asset account. The credit loss is included in gains (losses) on investments and other assets on the condensed consolidated statements of earnings. The recognized credit loss is limited to the total unrealized loss on the security due to a change in credit. Amounts due on available for sale fixed maturities that are deemed to be uncollectible are written off and removed from the allowance for credit loss. A write-off may also occur if the Company intends to sell a security or when it is more likely than not that the Company will be required to sell the security before the recovery of its amortized cost. The Company does not calculate a credit loss allowance on accrued interest income, included in accrued investment income on the condensed consolidated balance sheets, as the Company writes off any accrued interest income to net investment income if the accrued but unpaid amount exceeds 90 days. 17 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 2) Investments (Continued) Credit Quality Indicators Based on the NAIC securities designations, the Company had 98.4 % and 98.5 % of its fixed maturity securities rated investment grade as of March 31, 2026, and December 31, 2025, respectively. The following table summarizes the credit quality, by NAIC designation, of the Company’s fixed maturity securities available for sale, excluding redeemable preferred stock. Schedule of Credit Quality of Fixed Maturity Security Portfolio by NAIC Designation March 31, 2026 December 31, 2025 NAIC Designation Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value 1 $ 188,389,332 $ 186,162,155 $ 198,055,737 $ 197,788,945 2 175,261,903 174,739,103 177,242,472 178,441,019 3 6,544,197 5,741,086 6,145,460 5,616,342 4 155,585 153,881 155,717 160,830 5 - - - - 6 501,141 50,000 51,907 47,340 Total $ 370,852,158 $ 366,846,225 $ 381,651,293 $ 382,054,476 The following tables present a roll forward of the Company’s allowance for credit losses on fixed maturity securities available for sale for the three-month periods ended March 31, 2026, and 2025: Schedule of Allowance for Credit Losses on Fixed Maturity Securities Available for Sale U.S. Treasury securities and obligations of U.S. Government agencies Obligations of states and political subdivisions Corporate securities including public utilities Mortgage-backed securities Total Three Months Ended March 31, 2026 U.S. Treasury securities and obligations of U.S. Government agencies Obligations of states and political subdivisions Corporate securities including public utilities Mortgage-backed securities Total Beginning balance - December 31, 2025 $ - $ - $ 425,401 $ 154,049 $ 579,450 Additions for credit losses not previously recorded - - 22,498 - 22,498 Change in allowance on securities with previous allowance - - 74,049 - 74,049 Reductions for securities sold during the period - - - - - Reductions for securities with credit losses due to intent to sell - - - - - Write-offs charged against the allowance - - - - - Recoveries of amounts previously written off - - - - - Ending Balance - March 31, 2026 $ - $ - $ 521,948 $ 154,049 $ 675,997 U.S. Treasury securities and obligations of U.S. Government agencies Obligations of states and political subdivisions Corporate securities including public utilities Mortgage-backed securities Total Three Months Ended March 31, 2025 U.S. Treasury securities and obligations of U.S. Government agencies Obligations of states and political subdivisions Corporate securities including public utilities Mortgage-backed securities Total Beginning balance - December 31, 2024 $ - $ - $ 408,944 $ 12,049 $ 420,993 Balance $ - $ - $ 408,944 $ 12,049 $ 420,993 Additions for credit losses not previously recorded - - 72,000 - 72,000 Change in allowance on securities with previous allowance - - 14,437 - 14,437 Reductions for securities sold during the period - - - - - Reductions for securities with credit losses due to intent to sell - - - - - Write-offs charged against the allowance - - - - - Recoveries of amounts previously written off - - ( 130 ) - ( 130 ) Ending Balance - March 31, 2025 $ - $ - $ 495,251 $ 12,049 $ 507,300 Balance $ - $ - $ 495,251 $ 12,049 $ 507,300 18 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 2) Investments (Continued) The table below presents the amortized cost and the estimated fair value of fixed maturity securities available for sale as of March 31, 2026, by contractual maturity. Actual or expected maturities may differ from contractual maturities because certain securities afford the issuer the right to call or prepay their obligations. Schedule of Investments Classified by Contractual Maturity Date Amortized Cost Estimated Fair Value Due in 1 year $ 19,665,703 $ 19,641,777 Due in 2-5 years 129,855,952 130,217,565 Due in 5-10 years 130,676,874 131,821,597 Due in more than 10 years 67,262,583 65,478,295 Mortgage-backed securities 23,391,046 19,686,991 Redeemable preferred stock 750,000 719,700 Total $ 371,602,158 $ 367,565,925 Information regarding sales of fixed maturity securities available for sale is presented as follows. Schedule of Major Categories of Net Investment Income 2026 2025 Three Months Ended March 31, 2026 2025 Proceeds from sales $ 1,179,677 $ 3,224,848 Gross realized gains 247 526 Gross realized losses ( 65,035 ) ( 40,504 ) Assets on Deposit, Held in Trust, and Pledged as Collateral Assets on deposit with life insurance regulatory authorities as required by law were as follows: Schedule of Assets on Deposit with Life Insurance As of March 31, 2026 As of December 31, 2025 Fixed maturity securities available for sale at estimated fair value $ 7,041,560 $ 7,744,141 Other investments 424,670 - Cash and cash equivalents 1,455,333 1,543,842 Total assets on deposit $ 8,921,563 $ 9,287,983 Assets held in trust related to third-party reinsurance agreements were as follows: As of March 31, 2026 As of December 31, 2025 Fixed maturity securities available for sale at estimated fair value $ 22,083,221 $ 23,915,884 Other investments 1,177,008 - Cash and cash equivalents 2,634,084 2,136,642 Total assets on deposit $ 25,894,313 $ 26,052,526 19 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 2) Investments (Continued) The Company, through two of its life insurance subsidiaries, is a member of the Federal Home Loan Banks of Des Moines and Dallas (“FHLBs”). Assets pledged as collateral with the FHLBs are presented below. These pledged securities are used as collateral for any FHLB cash advances. As of March 31, 2026, the Company owed nil to the FHLBs for advances. Amounts owed, if any, are included in Bank and other loans payable on the condensed consolidated balance sheets. The Company did not receive or repay any advances during the three months ended March 31, 2026. As of March 31, 2026 As of December 31, 2025 Fixed maturity securities available for sale at estimated fair value $ 51,704,240 $ 64,066,256 Total assets pledged as collateral $ 51,704,240 $ 64,066,256 Real Estate Held for Investment and Held for Sale The Company strategically deploys resources into real estate assets to match the income and yield durations of its primary obligations. The sources for these real estate assets come through its various business units in the form of acquisition, development, and mortgage foreclosures. Commercial Real Estate Held for Investment and Held for Sale The Company owns, invests in and manages commercial real estate as a means of both generating investment income and providing workspace for its employees. This asset class is acquired in accordance with the Company’s goals and objectives for risk-adjusted returns. Due diligence is conducted on each asset using internal and third-party resources. The geographic locations and asset sub-classes of investments are determined by senior management under the direction of the Board of Directors. The Company employs full-time employees to manage the day-to-day operations of its commercial real estate within the greater Salt Lake area and close surrounding markets. The Company utilizes third party property managers where the geographic location does not warrant full-time staff or through strategic lease-up periods. The Company generally acquires commercial real estate in connection with company acquisitions or those that are in regions that are expected to have high growth in employment and population and that provide operational efficiencies. The Company currently owns and operates six commercial properties in two states. These properties include office buildings, flex office space, and the redevelopment and expansion of its corporate campus (“Center53”) in Salt Lake City, Utah. The Company uses bank debt in strategic cases, primarily where it is anticipated to improve yields, or facilitate the acquisition of higher quality assets or asset class diversification. The aggregate net book value of commercial real estate serving as collateral for bank loans was $ 113,348,613 and $ 114,683,175 as of March 31, 2026, and December 31, 2025, respectively. The associated bank loan carrying values totaled $ 93,638,639 and $ 94,120,446 as of March 31, 2026, and December 31, 2025, respectively. During the three-month periods ended March 31, 2026, and 2025, the Company did not record any impairment losses on commercial real estate held for investment or held for sale. Impairment losses, if any, are included in gains (losses) on investment and other assets on the condensed consolidated statements of earnings. During the three-month periods ended March 31, 2026, and 2025, the Company recorded depreciation expense on commercial real estate held for investment of $ 1,433,507 and $ 1,422,016 , respectively. Commercial real estate held for investment is stated at cost and is depreciated over the estimated useful life, primarily using the straight-line method. Depreciation is included in net investment income on the condensed consolidated statements of earnings. 20 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 2) Investments (Continued) The Company’s commercial real estate held for investment is summarized as follows as of the respective dates indicated: Schedule of Commercial Real Estate Investment Net Book Value Total Square Footage March 31, 2026 December 31, 2025 March 31, 2026 December 31, 2025 Utah (1) $ 119,835,765 $ 121,240,268 546,941 546,941 Louisiana 17,758 17,924 1,622 1,622 $ 119,853,523 $ 121,258,192 548,563 548,563 (1) Includes Center53 The Company’s commercial real estate held for sale is summarized as follows as of the respective dates indicated: Net Book Value March 31, 2026 December 31, 2025 Mississippi (1) $ 151,553 $ 151,553 $ 151,553 $ 151,553 (1) Consists of approximately 93 acres of undeveloped land Commercial Real Estate Owned and Occupied by the Company The primary business units of the Company occupy a portion of the real estate owned by the Company. As of March 31, 2026, real estate owned and occupied by the Company is summarized as follows: Schedule of Real Estate Owned and Occupied by the Company Location Business Segment Approximate Square Footage Square Footage Occupied by the Company 433 Ascension Way, Floors 4, 5 and 6, Salt Lake City, UT - Center53 Building 2 (1) Corporate Offices, Life Insurance, Funeral Home/Cemetery Operations, and Mortgage Operations and Sales 216,865 50 % 1818 Marshall Street, Shreveport, LA (2) (3) Life Insurance Operations 12,274 100 % (1) Included in real estate held for investment on the condensed consolidated balance sheets (2) Included in property and equipment on the condensed consolidated balance sheets (3) Listed for sale Residential Real Estate Held for Investment and Held for Sale The Company occasionally acquires residential homes through the mortgage loan foreclosure process. The Company has the option to sell these properties or to continue to hold them for expected cash flow and price appreciation. The Company also looks for opportunities to acquire land that can be developed into single family lots. Once developed, finished lots are sold to builder partners and others. 21 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 2) Investments (Continued) During the three-month periods ended March 31, 2026, and 2025 the Company recorded impairment losses of $ 35,651 and nil on residential real estate held for sale. Impairment losses are included in gains (losses) on investment and other assets on the condensed consolidated statements of earnings. During the three-month periods ended March 31, 2026, and 2025, the Company recorded depreciation expense on residential real estate held for investment of $ 2,718 and $ 2,676 , respectively. Residential real estate held for investment is stated at cost and is depreciated over the estimated useful life, primarily using the straight-line method. Depreciation is included in net investment income on the condensed consolidated statements of earnings. The Company’s residential real estate held for investment is summarized as follows as of the respective dates indicated: Schedule of Residential Real Estate Investment Net Book Value March 31, 2026 December 31, 2025 Utah (1) $ 114,491,810 $ 93,638,938 $ 114,491,810 $ 93,638,938 (1) Includes multiple residential subdivision development projects, refer to the following table The Company also invests in residential subdivision developments. The following table presents additional information regarding the Company’s residential subdivision development projects in Utah: March 31, 2026 December 31, 2025 Lots developed 435 492 Lots to be developed 990 761 Book Value $ 114,330,346 $ 93,474,755 The Company’s residential real estate held for sale is summarized as follows as of the respective dates indicated: Net Book Value March 31, 2026 December 31, 2025 Utah $ 5,456,806 $ 5,456,806 Colorado 121,000 140,000 Florida 130,000 146,651 Georgia 380,000 380,000 Nevada 149,017 149,017 $ 6,236,823 $ 6,272,474 The net book value of foreclosed residential real estate included in residential real estate held for sale was $ 1,235,017 and $ 1,270,669 as of March 31, 2026, and December 31, 2025, respectively. 22 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 2) Investments (Continued) Mortgage Loans Held for Investment Mortgage loans held for investment consist of first and second mortgages and are generally classified into three distinct groups: Commercial, Residential and Residential Construction. These mortgage loans bear interest at rates ranging from 2.0 % to 10.5 %; maturity dates range from nine months to 30 years and have amortization periods of 0 to 30 years. Concentrations of credit risk arise when several mortgage loan debtors have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions. Although the Company has a diversified mortgage loan portfolio consisting of residential mortgages, commercial loans and residential construction loans and requires collateral on all real estate exposures, a substantial portion of the relevant debtors’ ability to honor obligations is dependent upon the economic stability of the geographic region in which the debtors do business or are employed. The following table presents the distribution of the Company’s mortgage loans held for investment across the various states. Schedule of Mortgage Loans Held for Investment Commercial Residential Residential Construction Total As of March 31, 2026: Utah 27 % 15 % 96 % 58 % Florida 1 % 25 % 0 % 7 % California 19 % 6 % 0 % 6 % Texas 12 % 16 % 0 % 7 % Arizona 9 % 14 % 0 % 6 % Other states 32 % 24 % 4 % 16 % Total 100 % 100 % 100 % 100 % As of December 31, 2025: Utah 26 % 16 % 96 % 57 % Florida 1 % 25 % 0 % 7 % California 24 % 5 % 0 % 7 % Texas 12 % 14 % 0 % 7 % Arizona 9 % 15 % 0 % 6 % Other states 28 % 25 % 4 % 16 % Total 100 % 100 % 100 % 100 % Mortgage loans held for investment are carried at their unpaid principal balances adjusted for net deferred fees, charge-offs, premiums, discounts, and the related allowance for credit losses. Interest income is included in net investment income on the condensed consolidated statements of earnings and is recognized when earned. The Company defers related material loan origination fees, net of related direct loan origination costs, and amortizes the net fees over the terms of the loans. Origination fees are included in net investment income on the condensed consolidated statements of earnings. Mortgage loans are secured by the underlying property and require an appraisal at the time of underwriting and funding. Generally, the Company requires that loans not exceed 80% of the fair market value of the respective loan collateral. Loans that exceed 80% of the fair market value of the respective loan collateral require additional collateral or mortgage insurance by an approved third-party insurer. 23 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 2) Investments (Continued) Evaluation of Allowance for Credit Losses The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the Company’s mortgage loans held for investment to present the net amount expected to be collected. The Company reports in net earnings, as a credit loss expense, the amount necessary to adjust the allowance for credit losses for the Company’s current estimate of expected credit losses on mortgage loans held for investment. This credit loss expense is included in other expenses on the condensed consolidated statements of earnings. Once a mortgage loan is past due 90 days, it is the policy of the Company to end the accrual of interest income on the loan and reverse any interest income that had been accrued and the fair value is reassessed. Accrual of interest resumes if a mortgage loan is brought current. Given this policy, the Company does not measure a credit loss allowance on accrued interest receivable, which is included in accrued investment income on the condensed consolidated balance sheets. Payments received for mortgage loans on a non-accrual status are recognized when received. The interest income recognized from payments received for mortgage loans on a non-accrual status was immaterial. Interest income not accrued on these loans totaled approximately $ 1,315,892 and $ 1,042,325 as of March 31, 2026, and December 31, 2025, respectively. The Company measures expected credit losses based on the fair value of the collateral when the Company determines that foreclosure is probable. When a mortgage loan becomes delinquent, the Company proceeds to foreclose. Once foreclosed, the property is classified as real estate held for investment or held for sale. To determine the allowance for credit losses, the Company has segmented its mortgage loans held for investment into the following loan types: commercial, residential, and residential construction. The inherent risks within each loan type vary as follows: Commercial - Underwritten in accordance with the Company’s policies to determine the borrower’s ability to repay the obligation as agreed. Commercial loans are made primarily based on the underlying collateral supporting the loan. Accordingly, the repayment of a commercial loan depends primarily on the collateral and its ability to generate income and secondarily on the borrower’s (or guarantor’s) ability to repay. Commercial loans are evaluated for credit loss by analyzing common metrics that are predictors for future credit losses such as debt service coverage ratio (“DSCR”), loan to value (“LTV”), local market conditions, borrower quality, and underlying collateral. The fair value of the underlying collateral is based on a third-party appraisal of the property at origination of the loan. The Company uses these metrics to pool similar loans. The allowance for credit losses is based on estimates, historical experience, probability of loss, value of the underlying collateral, and other factors that affect the collectability of the loan. The Company applies a future loss factor to the outstanding balance of each group to arrive at the allowance for credit losses. Residential — These loans are secured by first and second mortgages on single-family dwellings. The borrower’s ability to repay is sensitive to life events and the general economic condition of the region. Where LTV exceeds 80%, the loan is generally guaranteed by private mortgage insurance, the FHA, or VA. Residential loans are evaluated for credit loss by using relevant available information from both internal and external sources. Among other things, the Company uses its historical delinquency information and considers current and forecasted economic conditions. External sources include a monthly analysis of its residential portfolio by a third party. The third party uses the Company’s current loan data and runs it through various models to project cash flows and provide a projected life of loan loss. The models consider loan features such as loan type, LTV, payment status, age, and current property values. Analyzing the information from various sources allows the Company to arrive at an allowance for credit losses. Residential construction (including land acquisition and development loans) – These loans are underwritten in accordance with the Company’s underwriting policies, which include a financial analysis of the builders, borrowers (guarantors), construction cost estimates, and independent appraisal valuations, and factor in estimates of the value of construction projects upon completion. Construction loans generally involve the disbursement of substantial funds over a short period of time with repayment substantially dependent upon the success of the completed project and the ability of the borrower to secure long-term financing. 24 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 2) Investments (Continued) Additionally, land acquisition and development loans are underwritten in accordance with the Company’s underwriting policies, which include independent appraisal valuations as well as the estimated value associated with the land upon completion of development into finished lots. These loans are of a higher risk than other mortgage loans due to their ultimate repayment being sensitive to general economic conditions, availability of long-term or construction financing, and interest rate sensitivity. The Company has commitments to fund existing construction and land development loans pursuant to the various loan agreements. As of March 31, 2026, the Company’s commitments were approximately $ 193,773,996 for these loans, of which $ 152,238,001 had been funded. The Company advances funds in accordance with the loan agreements once the work has been completed, and an independent inspection is made. The maximum loan commitment ranges between 50 % and 85 % of the appraised value. The Company receives fees and interest for these loans, and the interest rate is generally fixed at 5.25 % to 8.50 % per annum. Maturities range between six and eighteen months. Residential construction mortgage loans are evaluated for credit loss by considering historical activity and current housing market trends to arrive at a per loan basis point allowance that is recognized at loan origination and subsequent draws. The per loan basis point is reviewed at least annually or as loan losses or market trends require. The following table presents a roll forward of the allowance for credit losses as of the dates indicated: Schedule of Allowance for Loan Losses Three Months Ended Commercial Residential Residential Construction Total Beginning balance - December 31, 2025 $ 1,368,121 $ 904,738 $ 316,059 $ 2,588,918 Change in provision for credit losses (1) ( 46,037 ) 27,334 ( 16,855 ) ( 35,558 ) Charge-offs - - - - Ending balance - March 31, 2026 $ 1,322,084 $ 932,072 $ 299,204 $ 2,553,360 Beginning balance - December 31, 2024 $ 732,494 $ 850,550 $ 302,346 $ 1,885,390 Change in provision for credit losses (1) 289,236 ( 203,443 ) 37,409 123,202 Charge-offs - - - - Ending balance - March 31, 2025 $ 1,021,730 $ 647,107 $ 339,755 $ 2,008,592 (1) Included in other expenses on the condensed consolidated statements of earnings 25 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 2) Investments (Continued) The following table presents the aging of mortgage loans held for investment by loan type as of the dates indicated: Schedule of Aging of Mortgage Loans Commercial Residential Residential Construction Total March 31, 2026 30-59 days past due $ 81,837 $ 6,858,959 $ - $ 6,940,796 60-89 days past due - 1,195,773 - 1,195,773 Over 90 days past due (1) 2,827,352 4,487,106 - 7,314,458 In process of foreclosure (1) 588,013 1,462,111 - 2,050,124 Total past due 3,497,202 14,003,949 - 17,501,151 Current 71,117,471 71,515,541 149,601,559 292,234,571 Total mortgage loans 74,614,673 85,519,490 149,601,559 309,735,722 Allowance for credit losses ( 1,322,084 ) ( 932,072 ) ( 299,204 ) ( 2,553,360 ) Unamortized deferred loan fees, net ( 242,747 ) ( 1,173,134 ) ( 248,395 ) ( 1,664,276 ) Unamortized discounts, net ( 142,549 ) ( 107,097 ) - ( 249,646 ) Net mortgage loans held for investment $ 72,907,293 $ 83,307,187 $ 149,053,960 $ 305,268,440 December 31, 2025 30-59 days past due $ 86,117 $ 7,302,658 $ - $ 7,388,775 60-89 days past due - 2,485,313 - 2,485,313 Over 90 days past due (1) 2,832,372 2,479,479 - 5,311,851 In process of foreclosure (1) 588,013 616,430 - 1,204,443 Total past due 3,506,502 12,883,880 - 16,390,382 Current 75,725,284 77,760,710 157,398,705 310,884,699 Total mortgage loans 79,231,786 90,644,590 157,398,705 327,275,081 Allowance for credit losses ( 1,368,121 ) ( 904,738 ) ( 316,059 ) ( 2,588,918 ) Unamortized deferred loan fees, net ( 374,372 ) ( 1,283,049 ) ( 338,374 ) ( 1,995,795 ) Unamortized discounts, net ( 146,534 ) ( 108,449 ) - ( 254,983 ) Net mortgage loans held for investment $ 77,342,759 $ 88,348,354 $ 156,744,272 $ 322,435,385 (1) Interest income is not recognized on loans which are more than 90 days past due or in foreclosure. 26 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 2) Investments (Continued) Credit Quality Indicators The Company evaluates and monitors the credit quality of its commercial loans by analyzing LTV and DSCR. Monitoring a commercial mortgage loan increases when the loan is delinquent or earlier if there is an indication of impairment. The aggregate unpaid principal balance of commercial mortgage loans by credit quality indicator and origination year was as follows as of March 31, 2026: Schedule of Commercial and Residential Mortgage Loans By Credit Quality Indicator Credit Quality Indicator 2026 2025 2024 2023 2022 Prior Total % of Total LTV: Less than 65% $ 2,264,400 $ 26,486,545 $ 3,889,812 $ 15,600,000 $ 462,761 $ 9,002,062 $ 57,705,580 77.34 % 65% to 80% 1,260,000 3,525,554 10,432,656 1,000,506 293,872 - 16,512,588 22.13 % Greater than 80% - - - - - 396,505 396,505 0.53 % Total $ 3,524,400 $ 30,012,099 $ 14,322,468 $ 16,600,506 $ 756,633 $ 9,398,567 $ 74,614,673 100.00 % DSCR >1.20x $ - $ 7,680,478 $ 12,089,812 $ 7,500,000 $ - $ 5,265,290 $ 32,535,580 43.60 % 1.00x - 1.20x 3,524,400 17,956,621 2,232,656 9,100,506 756,633 348,050 33,918,866 45.46 % <1.00x - 4,375,000 - - - 3,785,227 8,160,227 10.94 % Total $ 3,524,400 $ 30,012,099 $ 14,322,468 $ 16,600,506 $ 756,633 $ 9,398,567 $ 74,614,673 100.00 % The aggregate unpaid principal balance of commercial mortgage loans by credit quality indicator and origination year was as follows as of December 31, 2025: ` 2025 2024 2023 2022 2021 Prior Total % of Total LTV: Less than 65% $ 34,518,653 $ 3,890,144 $ 15,600,000 $ 462,761 $ 810,696 $ 8,299,883 $ 63,582,137 80.25 % 65% to 80% 3,525,554 10,432,942 1,000,776 293,872 - - 15,253,144 19.25 % Greater than 80% - - - - 396,505 - 396,505 0.50 % Total $ 38,044,207 $ 14,323,086 $ 16,600,776 $ 756,633 $ 1,207,201 $ 8,299,883 $ 79,231,786 100.00 % DSCR >1.20x $ 7,519,000 $ 10,000,000 $ 7,500,000 $ - $ - $ 5,292,385 $ 30,311,385 38.26 % 1.00x - 1.20x 28,300,207 4,323,086 9,100,776 756,633 1,207,201 3,007,498 46,695,401 58.94 % <1.00x 2,225,000 - - - - - 2,225,000 2.81 % Total $ 38,044,207 $ 14,323,086 $ 16,600,776 $ 756,633 $ 1,207,201 $ 8,299,883 $ 79,231,786 100.00 % 27 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 2) Investments (Continued) The Company evaluates and monitors the credit quality of its residential mortgage loans by analyzing LTV and loan performance. The Company defines non-performing mortgage loans as loans more than 90 days past due and on a non-accrual status. Monitoring a residential mortgage loan increases when the loan is delinquent or earlier if there is an indication of impairment. The aggregate unpaid principal balance of residential mortgage loans by credit quality indicator and origination year was as follows as of March 31, 2026: Credit Quality Indicator 2026 2025 2024 2023 2022 Prior Total % of Total Performance Indicators: Performing $ 1,387,990 $ 8,283,600 $ 11,736,720 $ 8,888,926 $ 35,481,702 $ 13,791,335 $ 79,570,273 93.04 % Non-performing (1) - 1,470,213 878,703 1,705,661 539,860 1,354,780 5,949,217 6.96 % Total $ 1,387,990 $ 9,753,813 $ 12,615,423 $ 10,594,587 $ 36,021,562 $ 15,146,115 $ 85,519,490 100.00 % (1) Includes residential mortgage loans in the process of foreclosure of $ 1,462,111 LTV: Less than 65% $ 640,727 $ 1,888,800 $ 6,042,451 $ 4,103,812 $ 5,640,640 $ 8,734,429 $ 27,050,859 31.63 % 65% to 80% 747,263 6,660,280 6,418,110 6,196,811 28,359,148 5,876,068 54,257,680 63.44 % Greater than 80% - 1,204,733 154,862 293,964 2,021,774 535,618 4,210,951 4.92 % Total $ 1,387,990 $ 9,753,813 $ 12,615,423 $ 10,594,587 $ 36,021,562 $ 15,146,115 $ 85,519,490 100.00 % The aggregate unpaid principal balance of residential mortgage loans by credit quality indicator and origination year was as follows as of December 31, 2025: Credit Quality Indicator 2025 2024 2023 2022 2021 Prior Total % of Total Performance Indicators: Performing $ 10,946,252 $ 11,711,336 $ 10,177,427 $ 39,714,697 $ 2,264,902 $ 12,734,067 $ 87,548,681 96.58 % Non-performing (1) 546,602 927,255 616,430 255,544 - 750,078 3,095,909 3.42 % Total $ 11,492,854 $ 12,638,591 $ 10,793,857 $ 39,970,241 $ 2,264,902 $ 13,484,145 $ 90,644,590 100.00 % (1) Includes residential mortgage loans in the process of foreclosure of $ 616,430 LTV: Year 1 Year 2 Year 3 Year 4 Year 5 Less than 65% $ 4,382,324 $ 6,054,903 $ 4,118,599 $ 5,710,475 $ 968,377 $ 7,259,011 $ 28,493,689 31.43 % 65% to 80% 6,673,602 6,428,826 6,380,363 32,514,676 1,296,525 5,688,715 58,982,707 65.07 % Greater than 80% 436,928 154,862 294,895 1,745,090 - 536,419 3,168,194 3.50 % Total $ 11,492,854 $ 12,638,591 $ 10,793,857 $ 39,970,241 $ 2,264,902 $ 13,484,145 $ 90,644,590 100.00 % 28 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 2) Investments (Continued) The Company evaluates and monitors the credit quality of its residential construction loans (including land acquisition and development loans) by analyzing LTV and loan performance. Monitoring a residential construction mortgage loan increases when the loan is delinquent or earlier if there is an indication of impairment. The aggregate unpaid principal balance of residential construction mortgage loans by credit quality indicator and origination year was as follows as of March 31, 2026: Schedule of Residential Construction Mortgage Loans Credit Quality Indicator 2026 2025 2024 2023 2022 Total % of Total Performance Indicators: Performing $ 23,597,361 $ 84,789,314 $ 31,832,775 $ 5,450,344 $ 3,931,765 $ 149,601,559 100.00 % Non-performing - - - - - - 0.00 % Total $ 23,597,361 $ 84,789,314 $ 31,832,775 $ 5,450,344 $ 3,931,765 $ 149,601,559 100.00 % LTV: Less than 65% $ 7,552,555 $ 29,563,386 $ 23,423,845 $ 5,450,344 $ 3,931,765 $ 69,921,895 46.74 % 65% to 80% 16,044,806 52,184,990 8,408,930 - - 76,638,726 51.23 % Greater than 80% - 3,040,938 - - - 3,040,938 2.03 % Total $ 23,597,361 $ 84,789,314 $ 31,832,775 $ 5,450,344 $ 3,931,765 $ 149,601,559 100.00 % The aggregate unpaid principal balance of residential construction mortgage loans by credit quality indicator and origination year was as follows as of December 31, 2025: Credit Quality Indicator 2025 2024 2023 2022 2021 Total % of Total Performance Indicators: Performing $ 105,516,880 $ 42,129,717 $ 5,820,344 $ - $ 3,931,764 $ 157,398,705 100.00 % Non-performing - - - - - - 0.00 % Total $ 105,516,880 $ 42,129,717 $ 5,820,344 $ - $ 3,931,764 $ 157,398,705 100.00 % LTV: Less than 65% $ 24,286,540 $ 20,684,760 $ 5,820,344 $ - $ 3,931,764 $ 54,723,408 34.77 % 65% to 80% 78,223,502 21,444,957 - - - 99,668,459 63.32 % Greater than 80% 3,006,838 - - - - 3,006,838 1.91 % Total $ 105,516,880 $ 42,129,717 $ 5,820,344 $ - $ 3,931,764 $ 157,398,705 100.00 % 29 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 2) Investments (Continued) Insurance Assignments The following table presents the aging of insurance assignments, included in other investments and policy loans on the condensed consolidated balance sheets: Schedule of Aging of Insurance Assignments As of March 31, 2026 As of December 31, 2025 30-59 days past due $ 8,926,915 $ 8,444,866 60-89 days past due 3,969,994 3,344,793 Over 90 days past due 5,494,846 4,976,211 Total past due 18,391,755 16,765,870 Current 27,924,026 29,418,129 Total insurance assignments 46,315,781 46,183,999 Allowance for credit losses ( 1,518,047 ) ( 1,676,468 ) Net insurance assignments $ 44,797,734 $ 44,507,531 The Company records an allowance for credit losses when the insurance assignment is funded. Once an insurance assignment is 90 days past due or is in legal proceedings, it is monitored for write-off and collectability, and any adjustments to the allowance are recorded at that time. The following table presents a roll forward of the allowance for credit losses for insurance assignments as of the dates indicated: Schedule of Allowance for Credit Losses for Insurance Assignments Three Months Ended Beginning balance - December 31, 2025 $ 1,676,468 Change in provision for credit losses (1) 284,826 Charge-offs ( 443,247 ) Ending balance - March 31, 2026 $ 1,518,047 Beginning balance - December 31, 2024 $ 1,536,926 Change in provision for credit losses (1) 293,798 Charge-offs ( 312,941 ) Ending balance - March 31, 2025 $ 1,517,783 (1) Included in other expenses on the condensed consolidated statements of earnings 30 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 2) Investments (Continued) Variable Interest Entities (“VIE”) The Company has 50 % ownership interests in three VIEs: HHH Real Estate LLC (“HHH”), SN Oquirrh LLC (“Oquirrh”), and SN Towns LLC (“Towns”). These entities hold and develop single family lots for residential construction. In accordance with the operating agreements for these entities, net profits and losses are allocated to the members in accordance with their ownership interests. The investments in all three VIEs are accounted for under the equity method of accounting. The Company classifies distributions received using the cumulative earnings approach. The following table presents the carrying value of the investments as of the dates indicated: Schedule of Carrying Value of Investments As of March 31, 2026 As of December 31, 2025 HHH (1) $ 8,639,798 $ 10,530,515 Oquirrh (1) 775,138 887,532 Towns (2) 2,358,039 2,656,616 Total $ 11,772,975 $ 14,074,663 (1) Included in other investments and policy loans on the condensed consolidated balance sheets (2) Out of these totals, $ 1,155,507 and $ 1,467,058 of which at March 31, 2026, and December 31, 2025, respectively, were included in restricted assets and $ 1,202,531 and $ 1,189,558 of which at March 31, 2026, and December 31, 2025, respectively, were included in cemetery perpetual care trust investments on the condensed consolidated balance sheets The Company has determined that HHH, Oquirrh and Towns are VIEs for which the Company is not the primary beneficiary for the following reasons: (1) the at-risk equity holders, as a group, lack the characteristics of a controlling financial interest, (2) the General Manager directs the activities and legal operations that most significantly affect the entity’s economic performance and (3) the Company does not have majority voting rights and no power to unilaterally direct the activities of the entity, and therefore, is not the primary beneficiary. The Company’s exposure to loss because of its involvement with the equity method investees is limited to the carrying value of the Company’s investments. 31 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 2) Investments (Continued) Investment Related Earnings The following table presents the realized gains and losses from sales, calls, and maturities, and unrealized gains and losses on equity securities from investments and other assets: Schedule of Gain (Loss) on Investments 2026 2025 Three Months Ended March 31, 2026 2025 Fixed maturity securities: Gross realized gains $ 25,794 $ 1,068 Gross realized losses ( 77,874 ) ( 42,286 ) Net credit loss provision ( 96,547 ) ( 86,307 ) Equity securities: Gains on securities sold 15,722 114,127 Unrealized gains (losses) on securities held at the end of the period ( 54,513 ) 273,477 Real estate held for investment and sale: Gross realized gains 586,972 394,525 Gross realized losses ( 35,651 ) - Other assets: Gross realized gains 667 6,525 Gross realized losses ( 13,822 ) ( 75,108 ) Total $ 350,748 $ 586,021 The realized gains and losses on the sale of securities are recorded on the trade date, and the cost of the securities sold is determined using the specific identification method. Net realized gains and losses include gains and losses from cemetery perpetual care trust investments and the restricted assets of cemeteries and mortuaries and totaled $ 74,328 in net losses and $ 213,979 in net gains for the three-month periods ended March 31, 2026 and 2025, respectively. 32 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 2) Investments (Continued) Major categories of net investment income were as follows: 2026 2025 Three Months Ended March 31, 2026 2025 Fixed maturity securities available for sale $ 4,712,644 $ 4,664,833 Equity securities 207,832 192,631 Mortgage loans held for investment 8,274,060 7,964,539 Real estate held for investment and sale 2,937,919 2,959,711 Policy loans 241,508 244,605 Insurance assignments 5,444,231 5,732,150 Other investments 315,638 161,486 Cash and cash equivalents 1,047,236 1,402,636 Gross investment income 23,181,068 23,322,591 Investment expenses ( 4,679,720 ) ( 4,119,967 ) Net investment income $ 18,501,348 $ 19,202,624 Net investment income includes income earned from cemetery perpetual care trust investments and the restricted assets of cemeteries and mortuaries and totaled $ 207,132 and $ 146,838 for the three-month periods ended March 31, 2026, and 2025, respectively. Net investment income on real estate consists primarily of rental revenue. Investment expenses consist primarily of depreciation, property taxes, operating expenses of real estate, and an estimated portion of administrative expenses relating to investment activities. Accrued Investment Income Accrued investment income consists of the following: Schedule of Accrued Investment Income As of March 31, 2026 As of December 31, 2025 Fixed maturity securities available for sale $ 4,418,548 $ 4,089,819 Equity securities 9,943 13,169 Mortgage loans held for investment 1,444,226 1,032,964 Real estate held for investment 3,666,530 3,850,958 Other investments 4,667 30,916 Cash and cash equivalents 52,363 36,819 Total accrued investment income $ 9,596,277 $ 9,054,645 33 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 3) Loans Held for Sale The Company’s loans held for sale portfolio is valued using the fair value option. Changes in the fair value of the loans are included in mortgage fee income. Interest income is recorded based on the contractual terms of the loan and in accordance with the Company’s policy on recognition of mortgage loan interest income and is included in mortgage fee income on the condensed consolidated statement of earnings. See Note 8 to the condensed consolidated financial statements for additional disclosures regarding loans held for sale. The following table presents the aggregate fair value and the aggregate unpaid principal balance of loans held for sale: Schedule of Aggregate Fair Value Loans Held for Sale As of March 31, 2026 As of December 31, 2025 Aggregate fair value $ 137,607,689 $ 155,968,266 Unpaid principal balance 137,122,949 154,484,198 Unrealized gain 484,740 1,484,068 Mortgage Fee Income Mortgage fee income consists of origination fees, processing fees, interest income, and other income related to the origination and sale of mortgage loans held for sale. Major categories of mortgage fee income for loans held for sale are summarized as follows: Schedule of Mortgage Fee Income for Loans Held for Sale 2026 2025 Three Months Ended March 31, 2026 2025 Loan fees $ 5,734,513 $ 5,254,090 Interest income 1,730,664 1,667,434 Secondary gains 16,414,739 16,954,943 Change in fair value of loan commitments 1,384,727 474,540 Change in fair value of loans held for sale ( 1,603,988 ) 641,268 Provision for loan loss reserve ( 170,996 ) ( 183,034 ) Mortgage fee income $ 23,489,659 $ 24,809,241 34 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 3) Loans Held for Sale (Continued) Loan Loss Reserve Repurchase demands (“demand(s)”) from third party investors for mortgage loans previously held for sale and sold are reviewed, and relevant data is captured so that an estimated future loss can be calculated. The key factors that are used in the estimated future loss calculation are as follows: (i) lien position, (ii) payment status, (iii) claim type, (iv) unpaid principal balance, (v) interest rate, and (vi) validity of the demand. Other data is captured and is useful for management purposes; the actual estimated loss is generally based on these key factors. The Company conducts its own review upon the receipt of a demand. In many instances, the Company can resolve the issues relating to the demand by the third-party investor without having to make any payments to the investor. The loan loss reserve, which is included in other liabilities and accrued expenses, is summarized as follows: Summary of Loan Loss Reserve Included in Other Liabilities and Accrued Expenses As of March 31, 2026 As of December 31, 2025 Balance, beginning of period $ 384,184 $ 696,626 Provision on current loan originations (1) 170,996 805,518 Additional provision (2) - 40,000 Charge-offs, net of recaptured amounts ( 170,996 ) ( 1,157,960 ) Balance, end of period $ 384,184 $ 384,184 (1) Included in mortgage fee income (2) Included in other expenses The Company maintains reserves for estimated losses on current production volumes. For the three-month period ended March 31, 2026, $ 170,996 in reserves were added at a rate of 3.5 basis points per loan, the equivalent of $ 350 per $ 1,000,000 in loans originated. For the three-month period ended March 31, 2025, $ 183,034 in reserves were added at a rate of 3.5 basis points per loan, the equivalent of $ 350 per $ 1,000,000 in loans originated. The Company monitors market data and trends, and economic conditions (including forecasts) and uses its own experience to determine adequate loss reserves on current production. 35 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 4) Receivables Receivables consist of the following: Schedule of Receivable As of March 31, 2026 As of December 31, 2025 Contracts with customers $ 7,034,138 $ 6,981,676 Receivables from sales agents 4,441,441 4,193,842 Insurance premiums due 1,414,850 1,275,664 Other 4,835,232 4,588,564 Total receivables 17,725,661 17,039,746 Allowance for credit losses ( 1,523,072 ) ( 1,428,672 ) Net receivables $ 16,202,589 $ 15,611,074 The Company records an allowance for credit losses for its receivables in accordance with GAAP. The following table presents a roll forward of the allowance for credit losses as of the dates indicated: Schedule of Allowance for Credit Losses Three Months Ended Beginning balance - December 31, 2025 $ 1,428,672 Change in provision for credit losses (1) 147,555 Charge-offs ( 53,155 ) Ending balance - March 31, 2026 $ 1,523,072 Beginning balance - December 31, 2024 $ 1,678,531 Change in provision for credit losses (1) 16,142 Charge-offs ( 62,574 ) Ending balance - March 31, 2025 $ 1,632,099 (1) Included in other expenses on the condensed consolidated statements of earnings 36 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 4) Receivables (Continued) Contracts with Customers The Company reports revenues from contracts with customers pursuant to ASC No. 606, Revenue from Contracts with Customers . Information about Performance Obligations and Contract Balances The Company’s funeral home and cemetery segment sells a variety of goods and services to customers in both at-need and pre-need situations. Due to the timing of the fulfillment of the obligation, revenue is deferred until that obligation is fulfilled. The Company’s two types of future obligations are as follows: Pre-need Merchandise and Service Revenue : All pre-need merchandise and service revenue are deferred, and the funds are placed in trust until the need arises; the merchandise is received, or the service is performed. The trust is then relieved, and the revenue and commissions are recognized. Pre-need contracts are required to be paid in full prior to a customer using a good or service from a pre-need contract. Goods and services from pre-need contracts can be transferred when paid in full from one owner to another. In such cases, the Company will act as an agent in transferring the requested goods and services. The transfer of goods and services does not fulfill the contract and revenue remains deferred. At-need Specialty Merchandise Revenue : At-need specialty merchandise revenue consists of customizable merchandise ordered from manufacturers such as markers and bases. When specialty merchandise is ordered, it can take time to manufacture and deliver the product. Revenue is deferred until the at-need merchandise is received. Complete payment does not constitute fulfillment of the contract. Goods or services are deferred until such a time the service is performed, or merchandise is received. The 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 Contract Balances Receivables (1) Contract Asset Contract Liability Opening (December 31, 2025) $ 6,981,676 $ - $ 22,991,603 Closing (March 31, 2026) 7,034,138 - 23,487,532 Increase/(decrease) 52,462 - 495,929 Contract Balances Receivables (1) Contract Asset Contract Liability Opening (December 31, 2024) $ 7,095,589 $ - $ 20,168,405 Closing (December 31, 2025) 6,981,676 - 22,991,603 Increase/(decrease) ( 113,913 ) - 2,823,198 (1) Included in Receivables, net on the condensed consolidated balance sheets The amount of revenue recognized and included in the opening contract liability balance for the three-month periods ended March 31, 2026, and 2025 was $ 1,723,991 and $ 1,159,212 , respectively. The difference between the opening and closing balances of the Company’s contract assets and contract liabilities primarily results from the timing difference between the Company’s performance and the customer’s payment. Disaggregation of Revenue The following table disaggregates revenue for the Company’s funeral home and cemetery contracts: Schedule of Revenues of the Cemetery and Mortuary Contracts Three Months Ended March 31, 2026 2025 Major goods/service lines At-need $ 5,845,861 $ 5,716,277 Pre-need 1,887,962 1,583,944 Net mortuary and cemetery sales $ 7,733,823 $ 7,300,221 Timing of Revenue Recognition Goods transferred at a point in time $ 4,859,344 $ 4,154,547 Services transferred at a point in time 2,874,479 3,145,674 Net mortuary and cemetery sales $ 7,733,823 $ 7,300,221 37 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 5) Restricted Assets The Company has also established certain restricted assets to provide for future merchandise and service obligations incurred in connection with its pre-need sales for its funeral home and cemetery segment. Additionally, restricted cash represents escrows held for borrowers and investors under servicing and appraisal agreements relating to mortgage loans, funds held by warehouse banks in accordance with loan purchase agreements and funds held in escrow for certain real estate construction development projects. Additionally, the Company elected to maintain its medical benefit fund without change from the prior year and has included this amount as a component of restricted cash. These restricted cash items are for the Company’s life insurance and mortgage segments. Restricted assets as of March 31, 2026, are summarized as follows: Schedule of Restricted Assets in Cemetery and Mortuary Endowment Care and Pre need Merchandise Funds Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value March 31, 2026: Fixed maturity securities, available for sale, at estimated fair value: U.S. Treasury securities and obligations of U.S. Government agencies $ 269,363 $ - $ - $ 269,363 Obligations of states and political subdivisions 229,553 125 ( 2,003 ) 227,675 Corporate securities including public utilities 51,481 - ( 487 ) 50,994 Total fixed maturity securities available for sale $ 550,397 $ 125 $ ( 2,490 ) $ 548,032 Equity securities at estimated fair value: Common stock: Industrial, miscellaneous and all other $ 14,065,145 $ 2,724,027 $ ( 504,294 ) $ 16,284,878 Total equity securities at estimated fair value $ 14,065,145 $ 2,724,027 $ ( 504,294 ) $ 16,284,878 Mortgage loans held for investment at amortized cost: Residential construction $ 788,778 Less: Allowance for credit losses ( 1,578 ) Total mortgage loans held for investment $ 787,200 Other investments $ 1,654,250 Cash and cash equivalents (1) $ 10,659,181 Accrued investment income $ 20,092 Total restricted assets $ 29,953,633 (1) Including cash and cash equivalents of $ 8,965,571 for the life insurance and mortgage segments. 38 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 5) Restricted Assets (Continued) Restricted assets as of December 31, 2025, are summarized as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value December 31, 2025: Fixed maturity securities, available for sale, at estimated fair value: U.S. Treasury securities and obligations of U.S. Government agencies $ 895,817 $ 1,735 $ - $ 897,552 Obligations of states and political subdivisions 228,512 124 ( 8 ) 228,628 Corporate securities including public utilities 52,030 - ( 959 ) 51,071 Total fixed maturity securities available for sale $ 1,176,359 $ 1,859 $ ( 967 ) $ 1,177,251 Equity securities at estimated fair value: Common stock: Industrial, miscellaneous and all other $ 12,582,890 $ 2,690,346 $ ( 344,319 ) $ 14,928,917 Total equity securities at estimated fair value $ 12,582,890 $ 2,690,346 $ ( 344,319 ) $ 14,928,917 Mortgage loans held for investment at amortized cost: Residential construction $ 812,427 Less: Allowance for credit losses ( 1,625 ) Total mortgage loans held for investment $ 810,802 Other investments $ 1,957,888 Cash and cash equivalents (1) $ 9,919,800 Accrued investment income $ 11,288 Total restricted assets $ 28,805,946 (1) Including cash and cash equivalents of $ 8,383,847 for the life insurance and mortgage segments. 39 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 5) Restricted Assets (Continued) Fixed Maturity Securities The table below summarizes unrealized losses on fixed maturity securities available for sale that were carried at estimated fair value as of March 31, 2026, and December 31, 2025. The tables set forth unrealized losses by duration with the fair value of the related fixed maturity securities. Schedule of Fair Value of Fixed Maturity Securities Unrealized Losses for Less than Twelve Months Fair Value Unrealized Losses for More than Twelve Months Fair Value Total Unrealized Loss Fair Value At March 31, 2026 Obligations of states and political subdivisions $ - $ - $ 2,003 $ 102,549 $ 2,003 $ 102,549 Corporate securities including public utilities - - 487 50,995 487 50,995 Total unrealized losses $ - $ - $ 2,490 $ 153,544 $ 2,490 $ 153,544 At December 31, 2025 Obligations of states and political subdivisions $ - $ - $ 8 $ 103,504 $ 8 $ 103,504 Corporate securities including public utilities - - 959 51,071 959 51,071 Total unrealized losses $ - $ - $ 967 $ 154,575 $ 967 $ 154,575 Relevant holdings were comprised of three securities with fair values aggregating 98.4 % of the aggregate amortized cost as of March 31, 2026. Relevant holdings were comprised of two securities with fair values aggregating 99.4 % of the aggregate amortized cost as of December 31, 2025. No credit losses have been recognized for the three-month periods ended March 31, 2026, and 2025, since the unrealized losses are primarily the result of increases in interest rates. See Note 2 for additional information regarding the Company’s evaluation of the allowance for credit losses for fixed maturity securities available for sale. The table below presents the amortized cost and estimated fair value of fixed maturity securities available for sale as of March 31, 2026, by contractual maturity. Actual or expected maturities may differ from contractual maturities because certain securities afford the issuer the right to call or prepay their obligations. Schedule of Investments Classified by Contractual Maturity Date Amortized Estimated Fair Cost Value Due in 1 year $ 319,363 $ 319,376 Due in 2-5 years - - Due in 5-10 years 75,000 75,112 Due in more than 10 years 156,034 153,544 Total $ 550,397 $ 548,032 See Notes 2 and 17 for additional information regarding restricted assets. 40 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 6) Cemetery Perpetual Care Trust Investments and Obligation State law requires the Company to pay into endowment care trusts a portion of the proceeds from the sale of certain cemetery property interment rights for cemeteries that have established an endowment care trust. These endowment care trusts are defined as Variable Interest Entities pursuant to GAAP. The Company is the primary beneficiary of these trusts, as it absorbs both the losses and any expenses associated with the trusts. The Company has consolidated cemetery endowment care trust investments with a corresponding amount recorded as Cemetery Perpetual Care Obligation in the accompanying consolidated balance sheets . The components of cemetery perpetual care investments and obligation as of March 31, 2026, are as follows: Schedule of Investments and Obligation Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value March 31, 2026: Fixed maturity securities, available for sale, at estimated fair value: U.S. Treasury securities and obligations of U.S. Government agencies $ 154,594 $ 41 $ - $ 154,635 Obligations of states and political subdivisions 119,677 - ( 1,909 ) 117,768 Total fixed maturity securities available for sale $ 274,271 $ 41 $ ( 1,909 ) $ 272,403 Equity securities at estimated fair value: Common stock: Industrial, miscellaneous and all other $ 5,000,830 $ 1,687,074 $ ( 172,761 ) $ 6,515,143 Total equity securities at estimated fair value $ 5,000,830 $ 1,687,074 $ ( 172,761 ) $ 6,515,143 Mortgage loans held for investment at amortized cost: Residential construction $ 612,154 Less: Allowance for credit losses ( 1,224 ) Total mortgage loans held for investment $ 610,930 Other investments $ 1,303,245 Cash and cash equivalents $ 1,317,345 Accrued investment income $ 7,540 Total cemetery perpetual care trust investments $ 10,026,606 Cemetery perpetual care obligation $ ( 5,998,538 ) Trust investments in excess of trust obligations $ 4,028,068 41 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 6) Cemetery Perpetual Care Trust Investments and Obligation (Continued) The components of cemetery perpetual care investments and obligation as of December 31, 2025, are as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value December 31, 2025: Fixed maturity securities, available for sale, at estimated fair value: U.S. Treasury securities and obligations of U.S. Government agencies $ 152,738 $ 842 $ - $ 153,580 Obligations of states and political subdivisions 121,423 - ( 2,991 ) 118,432 Total fixed maturity securities available for sale $ 274,161 $ 842 $ ( 2,991 ) $ 272,012 Equity securities at estimated fair value: Common stock: Industrial, miscellaneous and all other $ 4,835,663 $ 1,637,554 $ ( 169,485 ) $ 6,303,732 Total equity securities at estimated fair value $ 4,835,663 $ 1,637,554 $ ( 169,485 ) $ 6,303,732 Mortgage loans held for investment at amortized cost: Residential construction $ 66,342 Less: Allowance for credit losses ( 133 ) Total mortgage loans held for investment $ 66,209 Cash and cash equivalents $ 1,935,480 Other investments $ 1,290,271 Accrued investment income $ 4,243 Total cemetery perpetual care trust investments $ 9,871,947 Cemetery perpetual care obligation $ ( 5,918,776 ) Trust investments in excess of trust obligations $ 3,953,171 42 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 6) Cemetery Perpetual Care Trust Investments and Obligation (Continued) Fixed Maturity Securities The table below summarizes unrealized losses on fixed maturity securities available for sale that were carried at estimated fair value as of March 31, 2026, and December 31, 2025. The tables set forth unrealized losses by duration with the fair value of the related fixed maturity securities: Schedule of Fair Value of Fixed Maturity Securities Unrealized Losses for Less than Twelve Months Fair Value Unrealized Losses for More than Twelve Months Fair Value Total Unrealized Loss Fair Value March 31, 2026 Obligations of states and political subdivisions $ - $ - $ 1,909 $ 117,768 $ 1,909 $ 117,768 Totals $ - $ - $ 1,909 $ 117,768 $ 1,909 $ 117,768 December 31, 2025 Obligations of states and political subdivisions $ - $ - $ 2,991 $ 118,432 $ 2,991 $ 118,432 Totals $ - $ - $ 2,991 $ 118,432 $ 2,991 $ 118,432 Relevant holdings were comprised of two securities with fair values aggregating 98.4 % of the aggregate amortized cost as of March 31, 2026. Relevant holdings were comprised of two securities with fair values aggregating 97.5 % of aggregate amortized cost as of December 31, 2025. No credit losses have been recognized for the three-month periods ended March 31, 2026, and 2025, since the unrealized losses are primarily the result of increases in interest rates. See Note 2 for additional information regarding the Company’s evaluation of the allowance for credit losses for fixed maturity securities available for sale. The table below presents the amortized cost and estimated fair value of fixed maturity securities available for sale as of March 31, 2026, by contractual maturity. Actual or expected maturities may differ from contractual maturities because certain securities afford the issuer the right to call or prepay their obligations. Schedule of Investments Classified by Contractual Maturity Date Amortized Estimated Fair Cost Value Due in 1 year $ 154,593 $ 154,634 Due in 2-5 years 68,914 67,151 Due in 5-10 years 50,764 50,618 Due in more than 10 years - - Total $ 274,271 $ 272,403 See Notes 2 and 17 for additional information regarding cemetery perpetual care trust investments. 43 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 7) Mortgage Servicing Rights The Company initially records its MSRs at fair value. After being initially recorded at fair value, MSRs backed by mortgage loans are accounted for using the amortization method. Amortization expenses are included in other expenses on the condensed 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 assets. The Company periodically assesses MSRs for impairment. Impairment occurs when the current fair value of the MSR falls below the 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. The Company periodically reviews the various loan strata to determine whether the value of the MSRs in each stratum is impaired and likely to recover. If the Company deems recovery of the value to be unlikely in the foreseeable future, a write-down of the cost of the MSRs for that stratum to its estimated recoverable value is charged to the valuation allowance. The following table presents the MSR activity: Schedule of Mortgage Servicing Rights As of March 31, 2026 As of December 31, 2025 Amortized cost: Balance before valuation allowance at beginning of year $ 2,528,459 $ 2,939,878 MSR additions resulting from loan sales (1) 53,768 151,056 Amortization (2) ( 121,966 ) ( 562,475 ) Sale of MSRs - - Application of valuation allowance to write down MSRs with other than temporary impairment - - Balance before valuation allowance at end of period $ 2,460,261 $ 2,528,459 Valuation allowance for impairment of MSRs: Balance at beginning of year $ - $ - Additions - - Application of valuation allowance to write down MSRs with other than temporary impairment - - Balance at end of period $ - $ - Mortgage servicing rights, net $ 2,460,261 $ 2,528,459 Estimated fair value of MSRs at end of period $ 3,994,484 $ 4,035,635 (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 44 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 7) Mortgage Servicing Rights (Continued) The table below summarizes the Company’s estimate of future amortization of its existing MSRs carried at amortized cost. This projection was developed using the Company’s assumptions in its March 31, 2026, 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. Schedule of Finite-Lived Intangible Assets, Future Amortization Expense, Mortgage Servicing Rights Estimated MSR Amortization 2026 250,438 2027 234,927 2028 215,762 2029 193,541 2030 174,002 Thereafter 1,391,591 Total $ 2,460,261 The Company collected the following contractual service fee income and late fee income as reported in other revenues on the condensed consolidated statement of earnings. Schedule of Other Revenues 2026 2025 Three Months Ended March 31, 2026 2025 Contractual service fees $ 222,067 $ 232,101 Late fees 17,306 19,617 Total $ 239,373 $ 251,718 The following is a summary of the unpaid principal balances (“UPB”) of the servicing portfolio. Summary of Unpaid Principal Balances of the Servicing Portfolio As of March 31, 2026 As of December 31, 2025 Servicing UPB $ 358,018,607 $ 361,632,543 The following key assumptions were used in determining MSR value: Schedule of Assumptions Used in Determining MSR Value Prepayment Speeds Average Life (Years) Discount Rate March 31, 2026 12.10 7.54 11.73 December 31, 2025 12.27 7.44 11.92 45 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) (8) Deferred Policy and Pre-need Contract Acquisition Costs, Value of Business Acquired, and Unearned Premium Reserve Refer to Note 1 regarding the adoption of ASU 2018-12. Deferred Policy and Pre-need Contract Acquisition Costs (“DAC”) The following tables show a roll forward for the lines of business that contain DAC balances, along with a reconciliation to the Company’s total DAC balance: Schedule of Roll Forward for the Lines of Business that Contain DAC Balances Traditional Life Fixed Annuities Universal Life Accident and Health Pre-need Contracts Total Balance at December 31, 2025 $ 127,639,286 $ 571,370 $ 3,430,518 $ - $ 4,337,629 $ 135,978,803 Deferrals 4,131,689 29,139 - - 327,701 4,488,529 Amortization ( 2,460,830 ) ( 32,470 ) ( 82,251 ) - ( 289,944 ) ( 2,865,495 ) Balance at March 31, 2026 $ 129,310,145 $ 568,039 $ 3,348,267 $ - $ 4,375,386 $ 137,601,837 Traditional Life Fixed Annuities Universal Life Accident and Health Pre-need Contracts Total Balance at December 31, 2024 $ 118,803,677 $ 535,836 $ 3,754,867 $ 466 $ 4,125,061 $ 127,219,907 Balance, beginning of period $ 118,803,677 $ 535,836 $ 3,754,867 $ 466 $ 4,125,061 $ 127,219,907 Deferrals 5,299,915 43,786 - - 181,034 5,524,735 Amortization ( 2,390,105 ) ( 33,165 ) ( 76,061 ) ( 447 ) ( 173,965 ) ( 2,673,743 ) Balance at March 31, 2025 $ 121,713,487 $ 546,457 $ 3,678,806 $ 19 $ 4,132,130 $ 130,070,899 Balance, end of period $ 121,713,487 $ 546,457 $ 3,678,806 $ 19 $ 4,132,130 $ 130,070,899 Value of Business Acquired (“VOBA”) The following tables show a roll forward for the lines of business that contain VOBA balances, along with a reconciliation to the Company’s total VOBA balance: Schedule of Roll Forward for the Lines of Business That Contain VOBA Balances Traditional Life Fixed Annuities Universal Life Accident and Health Total Balance at December 31, 2025 $ 6,968,331 $ - $ 124,932 $ 15,923 $ 7,109,186 Deferrals - - - - - Amortization ( 98,289 ) - ( 14,900 ) ( 634 ) ( 113,823 ) Balance at March 31, 2026 $ 6,870,042 $ - $ 110,032 $ 15,289 $ 6,995,363 Traditional Life Fixed Annuities Universal Life Accident and Health Total Balance at December 31, 2024 $ 7,397,519 $ - $ 186,632 $ 18,370 $ 7,602,521 Balance, beginning of period $ 7,397,519 $ - $ 186,632 $ 18,370 $ 7,602,521 Deferrals - - - - - Amortization ( 106,834 ) - ( 15,708 ) ( 714 ) ( 123,256 ) Balance at March 31, 2025 $ 7,290,685 $ - $ 170,924 $ 17,656 $ 7,479,265 Balance, end of period $ 7,290,685 $ - $ 170,924 $ 17,656 $ 7,479,265 Unearned Premium Reserve The balance and the changes in Unearned Premium Reserve are as follows: Schedule of Balance and the Changes in Unearned Premium Reserve 2026 2025 Three Months Ended March 31, 2026 2025 Universal Life Universal Life Balance, beginning of period $ 1,824,796 $ 2,013,245 Deferrals - - Amortization (1) ( 47,431 ) ( 44,487 ) Unearned premium reserve, end of period $ 1,777,365 $ 1,968,758 (1) Included in premiums and other considerations on the condensed consolidated statements of earnings. 46 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 9) Derivative Instruments Mortgage Banking Derivatives Loan Commitments The Company is exposed to price risk due to the potential impact of changes in interest rates on the values of loan commitments from the time a loan commitment is made to an applicant to the time the loan that would result from the exercise of that loan commitment is funded. Managing price risk is complicated by the fact that the ultimate percentage of loan commitments that will be exercised (i.e., the number of loans that will be funded) fluctuates. The probability that a loan will not be funded, or the loan application is denied or withdrawn within the terms of the commitment is driven by several factors, particularly the change, if any, in mortgage rates following the issuance of the loan commitment. In general, the probability of funding increases if mortgage rates rise and decreases if mortgage rates fall. This is due primarily to the relative attractiveness of current mortgage rates compared to the applicant’s committed rate. The probability that a loan will not be funded within the terms of the mortgage loan commitment also is influenced by the source of the applications (retail, broker or correspondent channels), proximity to rate lock expiration, purpose for the loan (purchase or refinance), product type and the application approval status. The Company has developed fallout estimates using historical data that consider all the variables, as well as renegotiations of rate and point commitments that tend to occur when mortgage rates fall. These fallout estimates are used to estimate the number of loans that the Company expects to be funded within the terms of the loan commitments and are updated periodically to reflect the most current data. The Company estimates the fair value of a loan commitment based on the change in estimated fair value of the underlying mortgage loan, quoted mortgage-backed securities (“MBS”) prices, estimates of the fair value of mortgage servicing rights, and an estimate of the probability that the mortgage loan will fund within the terms of the commitment net of estimated commission expense. The change in fair value of the underlying mortgage loan is measured from the date the loan commitment is issued and is shown net of related expenses. Following issuance, the value of a loan commitment can be either positive or negative depending upon the change in value of the underlying mortgage loans. Fallout rates and other factors from the Company’s recent historical data are used to estimate the quantity and value of mortgage loans that will be funded within the terms of the commitments. Forward Sale Commitments The Company utilizes forward commitments to economically hedge the price risk associated with its outstanding mortgage loan commitments. A forward commitment protects the Company from losses on sales of the loans arising from the exercise of the loan commitments. Management expects these types of commitments will experience changes in fair value in contrast to changes in fair value of the loan commitments, thereby reducing earnings volatility related to the recognition in earnings of changes in the values of the commitments. The net changes in fair value of loan commitments and forward sale commitments are shown in current earnings as a component of mortgage fee income on the consolidated statements of earnings. Mortgage banking derivatives are shown in other assets and other liabilities and accrued expenses on the condensed consolidated balance sheets. 47 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 9) Derivative Instruments (Continued) The following table shows the fair value and notional amounts of derivative instruments: Schedule of Derivative Assets at Fair Value March 31, 2026 December 31, 2025 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: Loan commitments Other assets and Other liabilities $ 182,729,508 $ 2,959,819 $ 94,955 $ 132,887,592 $ 1,700,742 $ 220,605 Total $ 182,729,508 $ 2,959,819 $ 94,955 $ 132,887,592 $ 1,700,742 $ 220,605 The table below presents the gains (losses) on derivatives. There were no gains or losses reclassified from accumulated other comprehensive income into income or gains or losses recognized in income on derivatives ineffective portion, or any amounts excluded from effective testing. Schedule of Gains and Losses on Derivatives Three Months Ended March 31, Derivative Classification 2026 2025 Loan commitments Mortgage fee income $ 1,384,727 $ 474,540 48 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 10) Future Policy Benefits and Unpaid Claims The Company establishes liabilities for amounts payable under insurance policies. These liabilities are comprised of traditional and limited-payment contracts and associated deferred profit liabilities, unpaid claims, and additional insurance liabilities. Also, refer to Note 1 regarding the adoption of ASU 2018-12. The following table provides a reconciliation of future policy benefits and unpaid claims and the related receivable from reinsurers to the condensed consolidated balance sheets. Schedule of Liability for Future Policy Benefits, by Product Segment March 31, 2026 December 31, 2025 Traditional and limited-payment life $ 570,378,453 $ 581,389,399 Deferred profit liability - traditional and limited-payment life 208,486,861 205,802,774 Payout annuities 92,238 95,436 Accident and health 502,669 505,208 Other policyholder funds 4,487,939 4,514,783 Reported but unpaid claims 3,004,213 3,299,899 Incurred but not reported claims 3,993,134 4,099,447 Gross future policy benefits and unpaid claims $ 790,945,507 $ 799,706,946 Receivable from reinsurers Traditional and limited-payment life 9,053,706 9,186,983 Deferred profit liability - traditional and limited-payment life 972,336 985,258 Accident and health 70,173 70,173 Reported but unpaid claims 265,754 131,712 Incurred but not reported claims 6,000 6,000 Total receivable from reinsurers 10,367,969 10,380,126 Net future policy benefits and unpaid claims $ 780,577,538 $ 789,326,820 Net unpaid claims $ 6,725,593 $ 7,261,634 49 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 10) Future Policy Benefits and Unpaid Claims (Continued) Traditional and Limited-Payment Life The following table summarizes the balance of and changes in the liability for future policy benefits for traditional and limited-payment life: Schedule of Balances of and Changes in the Liability for Future Policy Benefits 2026 2025 Three Months Ended March 31, 2026 2025 Present Value of Expected Net Premiums: Balance, beginning of year $ 250,450,302 $ 252,828,339 Beginning balance at original discount rate 250,331,770 258,790,212 Effect of changes in cash flow assumptions - - Effect of actual variances from expected experience (1) ( 3,405,648 ) ( 3,096,557 ) Adjusted beginning of year balance 246,926,122 255,693,655 Issuances 12,049,636 13,385,026 Interest accrual 2,951,697 3,092,598 Net premiums collected (2) ( 12,686,388 ) ( 12,953,003 ) Ending balance at original discount rate 249,241,067 259,218,276 Effect of changes in discount rate assumptions ( 3,606,047 ) ( 3,196,885 ) Balance, end of period $ 245,635,020 $ 256,021,391 Present Value of Expected Future Policy Benefits: Balance, beginning of year $ 831,839,700 $ 800,812,826 Beginning balance at original discount rate 867,177,517 858,516,933 Effect of changes in cash flow assumptions - - Effect of actual variances from expected experience (1) ( 2,090,326 ) ( 1,872,267 ) Adjusted beginning of year balance 865,087,191 856,644,666 Issuances 12,084,657 13,473,915 Interest accrual 10,380,153 10,298,015 Benefit payments ( 17,940,051 ) ( 17,455,096 ) Ending balance at original discount rate 869,611,950 862,961,500 Effect of changes in discount rate assumptions ( 53,598,477 ) ( 46,816,274 ) Balance, end of period $ 816,013,473 $ 816,145,226 Net liability for future policy benefits, pre-flooring $ 570,379,368 $ 560,112,641 Flooring impact, end of period ( 915 ) 11,194 Net liability for future policy benefits, post-flooring 570,378,453 560,123,835 Less: Receivable from reinsurers 9,053,706 9,262,372 Net liability for future policy benefits, after reinsurance $ 561,324,747 $ 550,861,463 (1) For the three months ended March 31, 2026, and 2025, the net effect of actual variances from expected experience was primarily due to lapses. Actual mortality and surrenders were close to expected. (2) Net premiums collected represent the portion of gross premiums collected from policyholders that is used to fund expected benefit payments. 50 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 10) Future Policy Benefits and Unpaid Claims (Continued) The following table summarizes the amount of undiscounted and discounted expected gross premiums and expected future benefit payments for traditional and limited-payment life: Schedule of Amount of Undiscounted and Discounted Expected Gross Premiums and Expected Future Benefit Payments 2026 2025 Three Months Ended March 31, 2026 2025 Undiscounted expected future benefit payments $ 1,932,292,660 $ 1,935,169,657 Discounted expected future benefit payments (at original discount rate) 869,611,949 862,961,500 Discounted expected future benefit payments (at current discount rate) 816,013,472 816,145,226 Undiscounted expected future gross premiums $ 809,818,009 $ 839,169,818 Discounted expected future gross premiums (at original discount rate) 542,367,174 560,102,998 Discounted expected future gross premiums (at current discount rate) 534,520,146 553,195,364 The following table summarizes the amount of gross premiums and interest accretion recognized in insurance premiums and other considerations and policyholder benefits and claims, respectively, in the condensed consolidated statements of earnings for traditional and limited-payment life: Schedule of Gross Premiums and Interest Accretion 2026 2025 Three Months Ended March 31, 2026 2025 Gross premiums $ 28,778,299 $ 29,585,306 Interest accretion $ 7,428,456 $ 7,205,417 The following table summarizes the weighted-average interest rates for traditional and limited-payment life: Schedule of Weighted-average Interest Rates 2026 2025 As of March 31, 2026 2025 Interest accretion rate 4.90 % 4.90 % Current discount rate 5.90 % 5.60 % The following table summarizes the weighted-average duration of the liability for traditional and limited-payment life: Schedule of Weighted Average Duration of the Liability As of March 31, 2026 2025 Duration of the liability in years (at original discount rate) 15 15 Duration of the liability in years (at current discount rate) 13 14 Adverse Development For the three months ended March 31, 2026 and 2025, respectively, there were immaterial impacts to net earnings for traditional and limited-payment life, where net premiums exceeded gross premiums for certain issue-year cohorts. 51 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 10) Future Policy Benefits and Unpaid Claims (Continued) Deferred Profit Liability The following table summarizes the balances of and changes in deferred profit liability for traditional and limited-payment life: Schedule of Balances of and Changes in Deferred Profit Liability for Traditional and Limited- Payment Life 2026 2025 Three Months Ended March 31, 2026 2025 Balance, beginning of year $ 205,802,774 $ 192,278,993 Effect of actual variances from expected experience (1) ( 1,026,648 ) ( 1,320,624 ) Adjusted balance, beginning of period 204,776,126 190,958,369 Profits deferred 16,091,911 16,632,303 Interest accrual 2,553,079 2,394,251 Amortization ( 14,934,255 ) ( 14,635,574 ) Other adjustments - - Balance, end of period 208,486,861 195,349,349 Less: Receivable from reinsurers 972,336 1,011,354 Deferred profit liability, net of reinsurance $ 207,514,525 $ 194,337,995 (1) For the three months ended March 31, 2026, and 2025, the net effect of actual variances from expected experience was primarily due to lapses. Actual mortality and surrenders were close to expected. Unpaid Claims The following table provides a roll forward of the Company’s liability for reported but unpaid claims and incurred but not reported claims, net of the related receivable from reinsurers. Schedule of Liability for Reported but Unpaid Claims and Incurred but not Reported Claims Life Annuities Accident and Health Total Balance at 12/31/2025 $ 6,941,791 $ 302,843 $ 17,000 $ 7,261,634 Incurred 15,889,797 (1) 3,602,875 (2) 11,375 (3) 19,504,047 Settled ( 16,474,852 ) ( 3,563,861 ) ( 1,375 ) ( 20,040,088 ) Balance at 3/31/2026 $ 6,356,736 $ 341,857 $ 27,000 $ 6,725,593 Life Annuities Accident and Health Total Balance at 12/31/2024 $ 6,363,243 $ 255,480 $ 17,000 $ 6,635,723 Incurred 16,045,465 (1) 3,208,604 (2) 300 (3) 19,254,369 Settled ( 15,559,375 ) ( 2,938,897 ) ( 300 ) ( 18,498,572 ) Balance at 3/31/2025 $ 6,849,333 $ 525,187 $ 17,000 $ 7,391,520 (1) Included in policyholder benefits and claims on the condensed consolidated statements of earnings (2) Released from policyholder account balances (3) Included in policyholder benefits and claims on the condensed consolidated statements of earnings 52 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 11) Policyholder Account Balances The Company establishes liabilities for policyholder account balances, which are generally equal to the account value, and which include interest credited. The following table provides a reconciliation of policyholder account balances and the related receivable from reinsurers to the condensed consolidated balance sheets. Schedule of Reconciliation of Policyholder Account Balances and the Related Receivable from Reinsurers to the Consolidated Balance Sheets March 31, 2026 December 31, 2025 Policyholder account balances - fixed annuities $ 103,029,371 $ 104,233,454 Deferred profit liability - fixed annuities 523,926 546,802 Policyholder account balances - universal life 35,289,278 35,825,494 Gross policyholder account balances $ 138,842,575 $ 140,605,750 Receivable from reinsurers Policyholder account balances - fixed annuities 3,092,871 3,275,247 Total receivable from reinsurers 3,092,871 3,275,247 Net policyholder account balances $ 135,749,704 $ 137,330,503 The following table summarizes the balances and changes in policyholder account balances for the lines of business indicated: Schedule of Balances and Changes in Policyholder Account Balances Three Months Ended March 31, 2026 Three Months Ended March 31, 2025 Universal Life Fixed Annuities Universal Life Fixed Annuities Balance, beginning of year $ 35,825,494 $ 104,233,454 $ 37,091,230 $ 105,088,621 Deposits 337,324 2,202,600 353,341 2,711,947 Interest credited 437,262 764,992 423,220 767,523 Policy charges (1) ( 590,416 ) ( 2,097 ) ( 532,389 ) ( 1,690 ) Surrenders, withdrawals and benefit payments ( 720,386 ) ( 4,169,578 ) ( 384,291 ) ( 3,713,105 ) Balance, end of period 35,289,278 103,029,371 36,951,111 104,853,296 Less: Receivable from reinsurers - 3,092,871 - 3,438,939 Policyholder account balances, net of reinsurance $ 35,289,278 $ 99,936,500 $ 36,951,111 $ 101,414,357 Weighted-average crediting rate 4.16 % 3.04 % 4.16 % 3.03 % Net amount at risk (2) 130,213,794 N/A 137,245,425 N/A Cash surrender value 35,289,277 102,546,622 36,951,111 104,493,368 (1) Contracts included in the policyholder account balances are generally charged a premium and/or monthly assessments on the basis of the account balance. Included in premiums and other considerations on the consolidated statements of earnings. (2) For those guarantees of benefits that are payable in the event of death, the net amount at risk is generally defined as the current guaranteed minimum death benefit in excess of the current account balance at the balance sheet date 53 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 11) Policyholder Account Balances (Continued) The following table summarizes the balances of and changes in deferred profit liability for fixed annuities: Schedule of Balances of and Changes in Deferred Profit Liability for Fixed Annuities Three Months Ended March 31, 2026 2025 Balance, beginning of year $ 546,802 $ 627,465 Effect of actual variances from expected experience - - Adjusted balance, beginning of period 546,802 627,465 Profits deferred - - Interest accrual - - Amortization ( 22,876 ) ( 19,409 ) Other adjustments - - Balance, end of period 523,926 608,056 Less: Receivable from reinsurers - - Deferred profit liability, net of reinsurance $ 523,926 $ 608,056 The balance of account values by range of guaranteed minimum crediting rates and the related range of difference, in basis points, between rates being credited to policyholders and the respective guaranteed minimums for the lines of business indicated are as follows: Schedule of Account Values by Range of Guaranteed Minimum Crediting Rates and the Related Range of Difference March 31, 2026 Range of Guaranteed Minimum Crediting Rate At guaranteed minimum 1-50 bps above guaranteed minimum 51-150 bps above guaranteed minimum Greater than 150 bps above guaranteed minimum Total Universal Life Less than 1.00% $ - $ - $ - $ - $ - 1.00% - 1.99% - - - - - 2.00% - 2.99% - - - - - 3:00%-4.00% 24,884,774 - 1,541,532 - 26,426,306 Greater than 4.00% 4,284,184 4,578,788 - - 8,862,972 Total $ 29,168,958 $ 4,578,788 $ 1,541,532 $ - $ 35,289,278 Fixed Annuities Less than 1.00% $ - $ - $ - $ - $ - 1.00% - 1.99% 10,729,410 9,927,428 - - 20,656,838 2.00% - 2.99% 5,689,266 - 330,239 4,848,175 10,867,680 3:00%-4.00% 47,533,902 10,286,807 55,261 432,287 58,308,257 Greater than 4.00% 12,847,413 - 349,183 - 13,196,596 Total $ 76,799,991 $ 20,214,235 $ 734,683 $ 5,280,462 $ 103,029,371 March 31, 2025 Range of Guaranteed Minimum Crediting Rate At guaranteed minimum 1-50 bps above guaranteed minimum 51-150 bps above guaranteed minimum Greater than 150 bps above guaranteed minimum Total Universal Life Less than 1.00% $ - $ - $ - $ - $ - 1.00% - 1.99% - - - - - 2.00% - 2.99% - - - - - 3:00%-4.00% 25,948,248 - 1,524,901 - 27,473,149 Greater than 4.00% 4,725,717 4,752,245 - - 9,477,962 Total $ 30,673,965 $ 4,752,245 $ 1,524,901 $ - $ 36,951,111 Fixed Annuities Less than 1.00% $ - $ - $ - $ - $ - 1.00% - 1.99% 11,826,448 11,168,785 - - 22,995,233 2.00% - 2.99% 4,854,112 - 327,727 5,054,713 10,236,552 3:00%-4.00% 47,384,970 10,552,439 36,757 450,086 58,424,252 Greater than 4.00% 12,848,005 - 349,254 - 13,197,259 Total $ 76,913,535 $ 21,721,224 $ 713,738 $ 5,504,799 $ 104,853,296 54 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 12) Reinsurance The Company follows the procedure of reinsuring risks of more than a specified limit, which ranges from $ 25,000 to $ 100,000 on newly issued policies. The Company has also assumed various reinsurance agreements through acquisition of life companies. The Company is ultimately liable for these reinsured amounts in the event such reinsurers are unable to pay their portion of the claims. The Company evaluates the financial condition of reinsurers and monitors the concentration of credit risk. The Company is also a reinsurer of insurance with other companies. 13) Income Taxes On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes provisions that allow for the immediate expensing of domestic research and development expenses, immediate expensing of certain capital expenditures, and other changes to the U.S. taxation of profits derived from foreign operations. OBBBA did not have a material impact on the Company’s estimated effective tax rate for 2025. The Company’s overall effective tax rate for the three-month periods ended March 31, 2026 and 2025 was 22.7 % and 22.3 %, respectively, which resulted in a provision for income taxes of $ 2,050,892 and $ 1,836,598 , respectively. The Company’s effective tax rate is higher than the U.S. federal statutory rate of 21 % due to, among other factors, state taxes as offset by certain state income tax benefits, along with certain permanent tax adjustments such as meals and entertainment and stock-based compensation. The increase in the effective tax rate when compared to the prior year was primarily due to certain permanent tax adjustments that are higher when compared to the prior year. Interim income taxes are based on an estimated annualized effective tax rate applied to the respective quarterly periods, adjusted for discrete tax items in the period in which they occur. Although the Company believes its tax estimates are reasonable, the Company can make no assurance that the final tax outcome of these matters will not be different from that which it has reflected in its historical income tax provisions and accruals. 55 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 14) Equity Capital Stock The following table summarizes the activity in shares of capital stock. Summary of Activities in Shares of Capital Stock Class A Class C Outstanding shares at December 31, 2025 22,428,625 3,587,237 Exercise of stock options 1,051 - Vesting of restricted stock units 3,087 - Conversion of Class C to Class A - - Outstanding shares at March 31, 2026 22,432,763 3,587,237 Outstanding shares at December 31, 2024 (1) 22,321,559 3,492,674 Outstanding shares, beginning 22,321,559 3,492,674 Exercise of stock options 66,273 95,337 Vesting of restricted stock units 460 - Outstanding shares at March 31, 2025 22,388,292 3,588,011 Outstanding shares, ending 22,388,292 3,588,011 (1) Adjusted retroactively for the effect of annual stock dividends Accumulated Other Comprehensive Income (Loss) Refer to Note 1 regarding the adoption of ASU 2018-12. The following table summarizes the changes in accumulated other comprehensive income (loss): Schedule of Changes in Accumulated Other Comprehensive Income (Loss) Three Months Ended March 31, 2026 2025 Unrealized gains (losses) on fixed maturity securities available for sale $ ( 4,167,685 ) $ 3,988,782 Amounts reclassified into net earnings ( 148,626 ) ( 127,525 ) Net unrealized gains (losses) before taxes ( 4,316,311 ) 3,861,257 Tax (expense) benefit 908,982 ( 811,680 ) Net ( 3,407,329 ) 3,049,577 Unrealized gains (losses) on restricted assets (1) ( 3,257 ) 4,288 Tax (expense) benefit 811 ( 1,068 ) Net ( 2,446 ) 3,220 Unrealized gains on cemetery perpetual care trust investments (1) 281 2,815 Unrealized gains (losses) 281 2,815 Tax (expense) ( 70 ) ( 701 ) Net 211 2,114 Interest rate remeasurement of future policy benefits 14,536,081 ( 8,122,845 ) Tax (expense) benefit ( 3,052,578 ) 1,705,797 Net 11,483,503 ( 6,417,048 ) Other comprehensive income (loss) changes $ 8,073,939 $ ( 3,362,137 ) (1) Fixed maturity securities available for sale 56 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 14) Equity (Continued) The following table presents the accumulated balances of other comprehensive income (loss) as of March 31, 2026: Schedule of Accumulated Balances of Other Comprehensive Income Beginning Balance December 31, 2025 Change for the period Ending Balance March 31, 2026 Unrealized gains (losses) on fixed maturity securities available for sale $ 752,551 $ ( 3,407,329 ) $ ( 2,654,778 ) Unrealized gains (losses) on restricted assets (1) 669 ( 2,446 ) ( 1,777 ) Unrealized gains (losses) on cemetery perpetual care trust investments (1) ( 1,613 ) 211 ( 1,402 ) Interest rate remeasurement of future policy benefits 28,010,516 11,483,503 39,494,019 Other comprehensive income $ 28,762,123 $ 8,073,939 $ 36,836,062 (1) Fixed maturity securities available for sale The following table presents the accumulated balances of other comprehensive income (loss) as of December 31, 2025: Beginning Balance December 31, 2024 Change for the period Ending Balance December 31, 2025 Unrealized gains (losses) on fixed maturity securities available for sale $ ( 7,147,384 ) $ 7,899,935 $ 752,551 Unrealized gains (losses) on restricted assets (1) ( 4,126 ) 4,795 669 Unrealized gains (losses) on cemetery perpetual care trust investments (1) ( 5,225 ) 3,612 ( 1,613 ) Interest rate remeasurement of future policy benefits 40,876,364 $ ( 12,865,848 ) 28,010,516 Other comprehensive income (loss) $ 33,719,629 $ ( 4,957,506 ) $ 28,762,123 (1) Fixed maturity securities available for sale 57 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 15) Earnings Per Share Earnings per share have been retroactively adjusted for the effect of annual stock dividends. In accordance with GAAP, the basic and diluted earnings per share were calculated as follows: Schedule of Earnings Per Share, Basic and Diluted Three Months Ended March 31, 2026 2025 Numerator: Net earnings $ 7,001,426 $ 6,413,735 Denominator: Basic weighted-average shares outstanding 24,818,596 24,699,405 Effect of dilutive securities: Employee stock options 721,312 992,242 Unvested restricted stock units 749 - Diluted weighted-average shares outstanding 25,540,657 25,691,647 Basic net earnings per share $ 0.28 $ 0.26 Diluted net earnings per share $ 0.27 $ 0.25 For the three-month periods ended March 31, 2026, and 2025, there were 402,994 and 382,700 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 are the same for each class of common stock. 58 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 16) Business Segment Information Description of Products and Services by Segment The Company has identified three operating and reportable business segments: life insurance, funeral home and cemetery, and mortgage. The Company’s life insurance segment revenue consists of life insurance premiums; fees earned on factored life insurance policies and net investment income derived from investing policyholder and surplus funds. Its expenses include operating expenses to collect insurance premiums and insurance policy receivables, and administer claims, and commissions payable related to the sale of insurance products sold by the Company’s independent agency force. The Company’s funeral home and cemetery segment revenue consists of fees from the sale of at-need cemetery and funeral home merchandise, services at its funeral homes and cemeteries, pre-need sales of cemetery spaces and the net investment income from investing surplus cash. Its expenses include operating expenses to maintain funeral home and cemetery operations and commissions related to the sale of insurance products sold by the Company’s agents. The Company’s mortgage segment revenue consists of residential mortgage origination fee income and mortgage interest income. Its expenses include normal operating expenses related to the origination and sale of residential mortgage loans, loan servicing, and warehouse interest and fee expenses. Services and Cost Sharing Policies The accounting policies of the Company’s operating and reportable segments are the same as those described in Part II, Item 8, Note 1 - Significant Accounting Policies of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Intersegment revenues are recorded at cost plus an agreed upon intercompany profit and are eliminated upon consolidation. In addition to revenues, the reportable segments share in business services and costs including personnel expenses, rent, information technology, software, interest expense, and other similar operating costs. These shared services and costs are allocated between the segments using prevailing market rates and other agreed upon allocation methods. Factors Management Used to Identify the Company’s Operating and Reportable Segments The Company’s operating and reportable segments are business units that are managed separately due to the different products provided and the need to report separately to the various regulatory jurisdictions. Chief Operating Decision Maker (“CODM”) The Company’s CODM is the Chief Executive Officer. The following table summarizes significant segment expenses. The significant expenses are based on the information that the CODM is regularly provided to assess segment performance. The CODM reviews the regularly provided information for each segment monthly and gives added emphasis on month-over-month and year-over-year comparative results. The CODM considers these comparative results when making decisions about the allocation of the Company’s resources to each segment. The measure of segment profit or loss for the Company’s three operating and reportable business segments is net earnings. 59 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 16) Business Segment Information (Continued) Schedule of Revenues and Expenses by Reportable Segment For the Three Months Ended March 31, 2026 Life Funeral Home Insurance and Cemetery Mortgage Total Revenues: From external sources: Revenue from external customers $ 28,855,254 $ 7,733,823 $ 23,489,659 $ 60,078,736 Net investment income 17,717,277 652,531 131,540 18,501,348 Gains (losses) on investments and other assets 382,514 ( 74,328 ) 42,562 350,748 Other revenues 375,052 160,642 262,254 797,948 Intersegment revenues 1,523,146 83,836 72,306 1,679,288 Total segment revenues 48,853,243 8,556,504 23,998,321 81,408,068 Elimination of intersegment revenues ( 1,679,288 ) Total consolidated revenues 79,728,780 Less: Policyholder benefits and claims 24,539,397 - - Amortization of deferred policy and pre-need acquisition costs and value of business acquired 2,689,374 289,944 - Selling, general and administrative expenses: Commissions 472,826 238,209 8,082,825 Personnel 8,738,857 2,733,070 9,129,709 Advertising 90,904 101,937 544,222 Rent and rent related 94,375 37,903 689,999 Depreciation on property and equipment 213,559 241,226 125,305 Cost related to funding mortgage loans - - 1,673,977 Data processing and IT related (1) 354,819 88,667 1,031,269 Premium taxes on insurance premiums and other considerations (1) 659,615 - - Other segment items (1)(2) 2,349,313 1,362,050 1,873,463 Intersegment expenses (3) 156,141 80,089 1,443,058 Interest expense 892,777 708 102,714 Costs of goods and services sold-mortuaries and cemeteries - 1,233,449 - Income tax expense (benefit) 1,663,288 518,697 ( 131,093 ) Segment net earnings (loss) 5,937,998 1,630,555 ( 567,127 ) 7,001,426 Net earnings $ 7,001,426 Segment assets $ 1,412,106,259 $ 108,161,913 $ 81,768,909 $ 1,602,037,081 Elimination of intersegment assets ( 21,253,140 ) Total consolidated assets $ 1,580,783,941 Expenditures for long-lived assets $ 31,477,400 $ 182,707 $ - $ 31,660,107 (1) Included in other expenses on the condensed consolidated statements of earnings. Data processing and IT related expenses includes various software subscriptions, maintenance, consulting, support and storage fees. (2) For each reportable segment, other segment items includes: Life Insurance - bad debt, insurance expenses, professional service expenses, state insurance department fees, amortization of intangible assets, and certain overhead expenses. Funeral Home and Cemetery - bad debt, insurance expenses, professional service expenses, maintenance and utility expenses, property taxes, amortization of intangible assets, and certain overhead expenses. Mortgage - bad debt, insurance expenses, professional service expenses, business license and registration fees, dues and subscriptions, amortization expense of mortgage servicing rights, and certain overhead expenses. (3) For each reportable segment, intersegment expenses includes: Life Insurance - mortgage servicing fees and interest expense. Funeral Home and Cemetery - rent expense, data processing and IT related expenses, and interest expense. Mortgage - rent expense and interest expense. 60 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 16) Business Segment Information (Continued) For the Three Months Ended March 31, 2025 Life Funeral Home Insurance and Cemetery Mortgage Total Revenues: From external sources: Revenue from external customers $ 29,779,525 $ 7,300,221 $ 24,809,241 $ 61,888,987 Net investment income 18,630,945 421,253 150,426 19,202,624 Gains on investments and other assets 290,534 209,970 85,517 586,021 Other revenues 585,598 187,850 288,643 1,062,091 Intersegment revenues 1,319,923 83,836 121,868 1,525,627 Total segment revenues 50,606,525 8,203,130 25,455,695 84,265,350 Elimination of intersegment revenues ( 1,525,627 ) Total consolidated revenues 82,739,723 Less: Policyholder benefits and claims 25,455,174 - - Amortization of deferred policy and pre-need acquisition costs and value of business acquired 2,623,034 173,965 - Selling, general and administrative expenses: Commissions 862,343 208,420 9,367,618 Personnel 8,526,188 2,538,026 11,118,194 Advertising 99,976 151,609 572,360 Rent and rent related 99,790 38,038 850,783 Depreciation on property and equipment 242,812 212,361 159,962 Cost related to funding mortgage loans - - 1,415,252 Data processing and IT related (1) 235,788 70,526 878,110 Premium taxes on insurance premiums and other considerations (1) 718,071 - - Other segment items (1)(2) 2,624,538 1,231,210 1,642,444 Intersegment expenses (3) 205,558 87,441 1,232,628 Interest expense 906,447 163 212,918 Costs of goods and services sold-mortuaries and cemeteries - 1,253,270 - Income tax expense (benefit) 1,785,207 534,844 ( 483,453 ) Segment net earnings (loss) 6,221,599 1,703,257 ( 1,511,121 ) 6,413,735 Net earnings $ 6,413,735 Segment assets $ 1,360,748,004 $ 100,073,999 $ 100,755,930 $ 1,561,577,933 Elimination of intersegment assets ( 30,644,368 ) Total consolidated assets $ 1,530,933,565 Expenditures for long-lived assets $ 16,717,670 $ 257,933 $ 109,134 $ 17,084,737 (1) Included in other expenses on the condensed consolidated statements of earnings. Data processing and IT related expenses includes various software subscriptions, maintenance, consulting, support and storage fees. (2) For each reportable segment, other segment items includes: Life Insurance - bad debt, insurance expenses, professional service expenses, state insurance department fees, amortization of intangible assets, and certain overhead expenses. Funeral Home and Cemetery - bad debt, insurance expenses, professional service expenses, maintenance and utility expenses, property taxes, amortization of intangible assets, and certain overhead expenses. Mortgage - bad debt, insurance expenses, professional service expenses, business license and registration fees, dues and subscriptions, amortization expense of mortgage servicing rights, and certain overhead expenses. (3) For each reportable segment, intersegment expenses includes: Life Insurance - mortgage servicing fees and interest expense. Funeral Home and Cemetery - rent expense, data processing and IT related expenses, and interest expense. Mortgage - rent expense and interest expense. 61 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 17) Fair Value of Financial Instruments GAAP 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 or most advantageous market for the asset or liability in an orderly transaction between market participants. GAAP also specifies a fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. Fair value measurements are classified under the following hierarchy: Level 1: Financial assets and financial liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that the Company can access. Level 2: Financial assets and financial liabilities whose values are based on the following: a) Quoted prices for similar assets or liabilities in active markets. b) Quoted prices for identical or similar assets or liabilities in non-active markets; or c) Valuation models whose inputs are observable, directly or indirectly, for substantially the full term of the asset or liability. Level 3: 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. The Company utilizes a combination of third-party valuation service providers, brokers, and internal valuation models to determine fair value. The following methods and assumptions were used by the Company in estimating the fair value presented in its disclosures related to significant financial instruments. The items shown under Level 1 and Level 2 are valued as follows: Fixed Maturity Securities Available for Sale : The fair values of fixed maturity securities are based on quoted market prices (when available). For fixed maturity securities not actively traded, fair values are estimated using values obtained from independent pricing services, or in the case of private placements (considered Level 3 financial assets), are estimated by discounting expected future cash flows using a current market value applicable to the coupon rate, credit and maturity of the investments. Equity Securities : The fair values for equity securities are based on quoted market prices. Restricted Assets : A portion of these assets include equity securities and fixed maturity securities that have quoted market prices that are used to determine fair value. Also included are cash and cash equivalents and participations in mortgage loans. The carrying amounts reported in the accompanying condensed consolidated balance sheets for these financial instruments approximate their fair values due to their short-term nature. Cemetery Perpetual Care Trust Investments : A portion of these assets include equity securities and fixed maturity securities that have quoted market prices that are used to determine fair value. Also included are cash and cash equivalents. The carrying amounts reported in the accompanying condensed consolidated balance sheets for these financial instruments approximate their fair values due to their short-term nature. Additionally, there were no transfers between Level 1 and Level 2 in the fair value hierarchy. 62 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 17) Fair Value of Financial Instruments (Continued) The items shown under Level 3 are valued as follows: Loans Held for Sale : The Company elected the fair value option for loans held for sale. The fair value is based on quoted market prices (when available). When a quoted market price is not readily available, the Company uses the market price from its last sale of similar assets. Fair value is often difficult to determine in volatile markets and may contain significant unobservable inputs. Loan Commitments and Forward Sale Commitments : The Company’s mortgage segment enters loan commitments with potential borrowers and forward sale commitments to sell loans with third-party investors. The Company also uses a hedging strategy for these transactions. A loan commitment binds the Company to lend funds to a qualified borrower at a specified interest rate and within a specified period, generally up to 30 days after issuance of the loan commitment. Loan commitments are defined to be derivatives under GAAP and are recognized at fair value on the consolidated balance sheets with changes in their fair values recorded in current earnings. The Company estimates the fair value of a loan commitment based on the change in estimated fair value of the underlying mortgage loan, quoted MBS prices, estimates of the fair value of mortgage servicing rights, and an estimate of the probability that the mortgage loan will fund within the terms of the commitment. The change in fair value of the underlying mortgage loan is measured from the date the loan commitment is issued. Following issuance, the value of a mortgage loan commitment can be either positive or negative depending upon the change in value of the underlying mortgage loans. Fallout rates and other factors from the Company’s recent historical data are used to estimate the quantity and value of mortgage loans that will be funded within the terms of the commitments. Impaired Mortgage Loans Held for Investment : 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 comparable sales in the area, property condition, and potential rental income that could be generated (particularly for commercial properties). For residential construction loans, the collateral is typically incomplete, so the fair value is estimated as the replacement cost using data from a provider of building cost information to the real estate construction. Impaired Real Estate Held for Investment : Fair value is generally determined by obtaining an independent appraisal, which typically considers area comparable properties and property conditions. The Company believes that in an orderly market, fair value approximates the replacement cost of a home and will list for sale any foreclosed properties. In a disorderly market, the Company believes the highest and best use of the properties is as income producing assets and will hold the properties as rental properties, matching the income from the investment in rental property with the funds required for estimated future policy benefits. Accordingly, in addition to an appraisal, the determination of fair value will generally be weighed more heavily toward the rental analysis. It should be noted that for replacement cost, when determining the fair value of real estate held for investment, the Company uses a provider of building cost information to the real estate construction industry. For the investment analysis, the Company uses market data based upon its real estate operation experience and projected the present value of net rental income over seven years. The Company also considers comparable properties in the area and property conditions when determining fair value. In addition to this analysis performed by the Company, the Company depreciates Real Estate Held for Investment. This depreciation reduces the book value of these properties and lessens the exposure to the Company from further deterioration in real estate values. Mortgage Servicing Rights : The Company initially recognizes Mortgage Servicing Rights (“MSRs”) at their estimated fair values derived from the net cash flows associated with the servicing contracts, where the Company assumes the obligation to service the loan in the sale transaction. 63 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 17) Fair Value of Financial Instruments (Continued) The 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 March 31, 2026: Schedule of Fair Value Assets and Liabilities Measured on a Recurring Basis Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets accounted for at fair value on a recurring basis Fixed maturity securities available for sale $ 367,565,925 $ - $ 366,991,282 $ 574,643 Equity securities 18,346,314 18,346,314 - - Loans held for sale 137,607,689 - - 137,607,689 Restricted assets (1) 548,032 - 548,032 - Restricted assets (2) 16,284,878 16,284,878 - - Cemetery perpetual care trust investments (1) 272,403 - 272,403 - Cemetery perpetual care trust investments (2) 6,515,143 6,515,143 - - Derivatives - loan commitments (3) 2,959,819 - - 2,959,819 Total assets accounted for at fair value on a recurring basis $ 550,100,203 $ 41,146,335 $ 367,811,717 $ 141,142,151 Liabilities accounted for at fair value on a recurring basis Derivatives - loan commitments (4) ( 94,955 ) - - ( 94,955 ) Total liabilities accounted for at fair value on a recurring basis $ ( 94,955 ) $ - $ - $ ( 94,955 ) (1) Fixed maturity securities available for sale (2) Equity securities (3) Included in other assets on the condensed consolidated balance sheets (4) Included in other liabilities and accrued expenses on the condensed consolidated balance sheets 64 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 17) Fair Value of Financial Instruments (Continued) The 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 December 31, 2025: Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets accounted for at fair value on a recurring basis Fixed maturity securities available for sale $ 382,777,918 $ - $ 382,203,275 $ 574,643 Equity securities 18,050,062 18,050,062 - - Loans held for sale 155,968,266 - - 155,968,266 Restricted assets (1) 1,177,251 - 1,177,251 - Restricted assets (2) 14,928,917 14,928,917 - - Cemetery perpetual care trust investments (1) 272,012 - 272,012 - Cemetery perpetual care trust investments (2) 6,303,732 6,303,732 - - Derivatives - loan commitments (3) 1,700,742 - - 1,700,742 Total assets accounted for at fair value on a recurring basis $ 581,178,900 $ 39,282,711 $ 383,652,538 $ 158,243,651 Liabilities accounted for at fair value on a recurring basis Derivatives - loan commitments (4) $ ( 220,605 ) $ - $ - $ ( 220,605 ) Total liabilities accounted for at fair value on a recurring basis $ ( 220,605 ) $ - $ - $ ( 220,605 ) (1) Fixed maturity securities available for sale (2) Equity securities (3) Included in other assets on the condensed consolidated balance sheets (4) Included in other liabilities and accrued expenses on the condensed consolidated balance sheets 65 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 17) Fair Value of Financial Instruments (Continued) For Level 3 assets and liabilities measured at fair value on a recurring basis as of March 31, 2026, the significant unobservable inputs used in the fair value measurements were as follows: Schedule of Level 3 Assets and Liabilities Measured at Fair Value on Recurring Basis Significant Range of Inputs Fair Value at Valuation Unobservable Minimum Maximum Weighted March 31, 2026 Technique Input(s) Value Value Average Loans held for sale $ 137,607,689 Market approach Investor contract pricing as a percentage of unpaid principal balance 87.0 % 109.0 % 101.0 % Derivatives - loan commitments (net) 2,864,864 Market approach Pull-through rate 51.0 % 100.0 % 91.0 % Initial-Value N/A N/A N/A Servicing 0 bps 251 bps 50 bps Fixed maturity securities available for sale 574,643 Broker quotes Pricing quotes $ 100.00 $ 100.07 $ 100.10 For Level 3 assets and liabilities measured at fair value on a recurring basis as of December 31, 2025, the significant unobservable inputs used in the fair value measurements were as follows: Significant Range of Inputs Fair Value at Valuation Unobservable Minimum Maximum Weighted December 31, 2025 Technique Input(s) Value Value Average Loans held for sale $ 155,968,266 Market approach Investor contract pricing as a percentage of unpaid principal balance 86.0 % 107.0 % 102.0 % Derivatives - loan commitments (net) 1,480,137 Market approach Pull-through rate 60.0 % 100.0 % 89.0 % Initial-Value N/A N/A N/A Servicing 0 bps 251 bps 52 bps Fixed maturity securities available for sale 574,643 Broker quotes Pricing quotes $ 100.00 $ 100.77 $ 100.10 66 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 17) Fair Value of Financial Instruments (Continued) The 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 March 31, 2026: 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, 2025 $ 1,480,137 $ 155,968,266 $ 574,643 Originations and purchases - 488,560,300 - Sales, maturities and paydowns - ( 516,712,505 ) - Total gains (losses): Included in earnings 1,384,727 (1) 9,791,628 (1) - (2) Included in other comprehensive income - - - Balance - March 31, 2026 $ 2,864,864 $ 137,607,689 $ 574,643 (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 The 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 March 31, 2025: Net Loan Commitments Loans Held for Sale Fixed Maturity Securities Available for Sale Balance - December 31, 2024 $ 2,313,210 $ 131,181,148 $ 1,149,926 Originations and purchases - 517,886,377 - Sales, maturities and paydowns - ( 521,382,576 ) - Total gains (losses): Included in earnings 474,540 (1) 12,149,277 (1) - (2) Included in other comprehensive income - - 378 Balance - March 31, 2025 $ 2,787,750 $ 139,834,226 $ 1,150,304 (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 67 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 17) Fair Value of Financial Instruments (Continued) The Company did not have any financial assets and financial liabilities measured at fair value on a nonrecurring basis as of March 31, 2026, or as of March 31, 2025. Fair Value of Financial Instruments Carried at Other Than Fair Value The Company uses its best judgment in estimating the fair value of the Company’s financial instruments; however, there are inherent limitations in any estimation technique. 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 March 31, 2026, and December 31, 2025. 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 March 31, 2026: Schedule of Financial Instruments Carried at Other Than Fair Value Carrying Value Level 1 Level 2 Level 3 Total Estimated Fair Value Assets Mortgage loans held for investment Residential $ 83,307,187 $ - $ - $ 85,877,780 $ 85,877,780 Residential construction 149,053,960 - - 149,053,960 149,053,960 Commercial 72,907,293 - - 74,030,925 74,030,925 Mortgage loans held for investment, net $ 305,268,440 $ - $ - $ 308,962,665 $ 308,962,665 Policy loans (1) 14,536,305 - - 14,536,305 14,536,305 Insurance assignments, net (1) 44,797,734 - - 44,797,734 44,797,734 Restricted assets (2) 787,200 - - 787,200 787,200 Cemetery perpetual care trust investments (2) 610,930 - - 610,930 610,930 Mortgage servicing rights, net 2,460,261 - - 3,994,484 3,994,484 Liabilities Bank and other loans payable $ ( 108,760,032 ) $ - $ - $ ( 97,468,978 ) $ ( 97,468,978 ) Policyholder account balances - universal life ( 35,289,278 ) - - ( 35,358,733 ) ( 35,358,733 ) Policyholder account balances - fixed annuities ( 103,553,297 ) - - ( 103,199,369 ) ( 103,199,369 ) (1) Included in other investments and policy loans on the condensed consolidated balance sheets (2) Mortgage loans held for investment 68 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 17) Fair Value of Financial Instruments (Continued) 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, 2025: Carrying Value Level 1 Level 2 Level 3 Total Estimated Fair Value Assets Mortgage loans held for investment Residential $ 88,348,354 $ - $ - $ 89,318,434 $ 89,318,434 Residential construction 156,744,272 - - 156,744,272 156,744,272 Commercial 77,342,759 - - 78,683,341 78,683,341 Mortgage loans held for investment, net $ 322,435,385 $ - $ - $ 324,746,047 $ 324,746,047 Policy loans (1) 14,467,357 - - 14,467,357 14,467,357 Insurance assignments, net (1) 44,507,531 - - 44,507,531 44,507,531 Restricted assets (2) 810,802 - - 810,802 810,802 Cemetery perpetual care trust investments (2) 66,209 - - 66,209 66,209 Mortgage servicing rights, net 2,528,459 - - 4,035,635 4,035,635 Liabilities Bank and other loans payable $ ( 98,387,919 ) $ - $ - $ ( 87,490,315 ) $ ( 87,490,315 ) Policyholder account balances - universal life ( 35,825,494 ) - - ( 35,986,392 ) ( 35,986,392 ) Policyholder account balances - fixed annuities ( 104,780,256 ) - - ( 103,880,576 ) ( 103,880,576 ) (1) Included in other investments and policy loans on the consolidated balance sheets (2) Mortgage loans held for investment The methods, assumptions and significant valuation techniques and inputs used to estimate the fair value of these financial instruments are summarized as follows: Mortgage Loans Held for Investment : The estimated fair value of the Company’s mortgage loans held for investment is determined using various methods. The Company’s mortgage loans are grouped into three categories: Residential, Residential Construction, and Commercial. When estimating the expected future cash flows, it is assumed that all loans will be held to maturity, and any loans that are non-performing are evaluated individually for impairment. Residential – The estimated fair value is determined through a combination of discounted cash flows (estimating expected future cash flows of payments and discounting them using current interest rates from single-family mortgages) and considering pricing of similar loans that were sold recently. Residential Construction – These loans primarily have short term maturities. Accordingly, the estimated fair value is determined to be the carrying value. Commercial – The estimated fair value is determined by estimating expected future cash flows of payments and discounting them using current interest rates for commercial mortgages. Policy Loans : These loans are fully collateralized by the cash surrender value of the underlying policy. Accordingly, the carrying amounts reported in the accompanying condensed consolidated balance sheet approximates their fair values. Insurance Assignments, Net : These investments primarily have short-term maturities. Accordingly, the carrying amounts reported in the accompanying condensed consolidated balance sheet approximates their fair values. 69 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 17) Fair Value of Financial Instruments (Continued) Bank and Other Loans Payable : The carrying amounts reported in the accompanying condensed consolidated balance sheet for warehouse lines of credit approximate their fair values due to their relatively short-term maturities and variable interest rates. The estimated fair value for bank loans collateralized by real estate is determined by estimating future cash flows of payments and discounting them using current market rates. Policyholder Account Balances : Policyholder account balances 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 of more than 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 policies 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 policies. 18) Stock Compensation Plans The Company has three active equity incentive plans (the “2013 Plan”, the “2014 Director Plan” and the “2022 Plan” or “the Plans”). Stock Options Stock based compensation expense for stock options issued of $ 463,699 and $ 299,272 has been recognized for these Plans for the three-month periods ended March 31, 2026, and 2025, respectively, and is included in personnel expenses on the condensed consolidated statements of earnings. As of March 31, 2026, the total unrecognized compensation expense related to the options issued was $ 1,233,463 which is expected to be recognized over the remaining vesting period. The fair value of each option granted is estimated on the date of grant using the Black Scholes Option Pricing Model. The Company estimates the expected life of the options using the simplified method. Future volatility is estimated based upon the weighted historical volatility of the Company’s Class A common stock over a period equal to the expected life of the options. The risk-free interest rate for 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. 70 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 18) Stock Compensation Plans (Continued) The activity of the Plans during the three-month period ended March 31, 2026, is summarized as follows: Schedule of Activity of Stock Option Plans Number of Class A Shares Weighted Average Exercise Price (2) Number of Class C Shares Weighted Average Exercise Price (2) Outstanding at December 31, 2025 760,838 $ 6.85 2,366,291 $ 7.54 Granted 7,500 - Exercised ( 1,051 ) - Cancelled ( 6,598 ) - Outstanding at March 31, 2026 760,689 $ 6.88 2,366,291 $ 7.54 As of March 31, 2026: Options exercisable 557,659 $ 6.28 1,860,534 $ 7.26 As of March 31, 2026: Available options for future grant 1,896,335 4,207 Weighted average contractual term of options outstanding at March 31, 2026 6.64 years 6.75 years Weighted average contractual term of options exercisable at March 31, 2026 5.54 years 5.99 years Aggregated intrinsic value of options outstanding at March 31, 2026 (1) $ 2,136,093 $ 5,659,342 Aggregated intrinsic value of options exercisable at March 31, 2026 (1) $ 1,952,408 $ 5,192,461 (1) The Company used a stock price of $ 9.48 as of March 31, 2026 to derive intrinsic value. (2) Adjusted for the effect of annual stock dividends. 71 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 18) Stock Compensation Plans (Continued) The activity of the Plans during the three-month period ended March 31, 2025, is summarized as follows: Number of Class A Shares Weighted Average Exercise Price (2) Number of Class C Shares Weighted Average Exercise Price (2) Outstanding at December 31, 2024 646,594 $ 5.93 1,724,400 $ 7.23 Granted 24,000 - Exercised ( 112,735 ) ( 113,023 ) Cancelled - - Outstanding at March 31, 2025 557,859 $ 6.24 1,611,377 $ 7.50 As of March 31, 2025: Options exercisable 501,834 $ 5.51 1,363,881 $ 6.47 As of March 31, 2025: Available options for future grant 53,718 146,238 Weighted average contractual term of options outstanding at March 31, 2025 5.38 years 6.64 years Weighted average contractual term of options exercisable at March 31, 2025 5.02 years 6.16 years Aggregated intrinsic value of options outstanding at March 31, 2025 (1) $ 3,269,071 $ 7,406,757 Aggregated intrinsic value of options exercisable at March 31, 2025 (1) $ 3,305,118 $ 7,676,614 (1) The Company used a stock price of $ 12.10 as of March 31, 2025 to derive intrinsic value. (2) Adjusted for the effect of annual stock dividends. The 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 three-month periods ended March 31, 2026, and 2025 were $ 2,449 and $ 1,357,776 , respectively. 72 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 18) Stock Compensation Plans (Continued) Restricted Stock Units (“RSUs”) Stock based compensation expense for RSUs issued of $ 5,431 and $ 9,988 has been recognized under these plans for the three-month periods ended March 31, 2026, and 2025, 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 March 31, 2026, the total unrecognized compensation expense related to the RSUs issued was $ 21,194 , which is expected to be recognized over the remaining vesting period. Activity of the RSUs during the three-month period ended March 31, 2026, is summarized as follows: Schedule of Activity Restricted Stock Units Number of Class A Shares Weighted Average Grant Date Fair Value Non-vested at December 31, 2025 17,568 $ 9.33 Granted - Vested ( 3,087 ) Non-vested at March 31, 2026 14,481 $ 8.53 Available RSUs for future grant 489,706 Activity of the RSUs during the three-month period ended March 31, 2025, is summarized as follows: Number of Class A Shares Weighted Average Grant Date Fair Value Non-vested at December 31, 2024 12,813 $ 12.90 Granted - Vested ( 460 ) Non-vested at March 31, 2025 12,353 $ 13.08 Available RSUs for future grant 4,187 73 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 19) Commitments and Contingencies Mortgage Loan Loss Settlements Future loan losses can be extremely difficult to estimate. However, the Company believes that the Company’s reserve methodology and its current practice of property preservation allow it to estimate its potential losses on loans sold. See Note 3 to the condensed consolidated financial statements for additional information about the Company’s loan loss reserve. Debt Covenants for Mortgage Warehouse Lines of Credit The Company, through its subsidiary SecurityNational Mortgage, has three lines of credit agreements for funding mortgage loans held for sale: one through U.S. Bank, a second through Western Alliance Bank, and a third through JPMorgan Chase Bank. The Company anticipates renewing all agreements in 2026. The U.S. Bank warehouse line of credit agreement allows SecurityNational Mortgage to borrow up to $ 15,000,000 . The relevant agreement contemplates interest at 2.10% plus the greater of (i) 0%, and (ii) the one-month forward-looking term rate based on SOFR on drawn amounts and matures on July 17, 2026 . The Company is required to comply with covenants for adjusted tangible net worth, unrestricted cash balance, and a minimum net loss of $ 2.5 million for the quarter. The Western Alliance Bank warehouse line of credit agreement allows SecurityNational Mortgage to borrow up to $ 25,000,000 . The relevant agreement contemplates interest at the 1-Month SOFR rate plus 2.0% on drawn amounts and matures on August 15, 2026 . The Company is required to comply with covenants for adjusted tangible net worth, unrestricted cash balance, and a minimum pre-tax loss of $ 2.5 million for the quarter. The JPMorgan Chase Bank warehouse line of credit agreement allows SecurityNational Mortgage to borrow up to $ 35,000,000 . The relevant agreement contemplates interest at the 1-Month SOFR rate plus 1.95% on drawn amounts and matures on August 15, 2026 . The Company is required to comply with covenants for adjusted tangible net worth, unrestricted cash balance, and a minimum pre-tax income of $ 1 for the year. The agreements for US Bank and JP Morgan Chase Bank warehouse lines of credit include a cross-default provision where certain events of default under other of SecurityNational Mortgage’s obligations constitute events of default under the warehouse lines of credit. As of March 31, 2026, SecurityNational Mortgage was in compliance with all covenants under its warehouse lines of credit. The Company has also performed an 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. 74 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 2026 (Unaudited) 19) Commitments and Contingencies (Continued) Debt Covenants for Revolving Lines of Credit and Bank Loans The Company’s revolving line of credit agreements contain debt covenants requiring the Company to maintain minimum operating cash flow ratios and minimum net worth requirements for each of its business segments. The Company is also subject to debt covenants under one of its real estate loans which require maintenance of a minimum consolidated operating cash flow ratio, minimum liquidity amounts, and minimum consolidated net worth value. In addition to these financial debt covenants, the Company is required to provide segment specific financial statements and building specific financial statements under the agreements for each of its bank loans. As of March 31, 2026, the Company was in compliance with all of those debt covenants. Other Contingencies and Commitments The Company belongs to a captive insurance group (“the captive group”) for certain casualty insurance, worker compensation and general liability programs. The captive group maintains insurance reserves 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 group considers several factors, which include historical claims experience, demographic factors, severity factors and valuations provided by independent third-party actuaries. If actual claims or adverse development of loss reserves occurs and exceed these estimates, additional reserves may be required from the Company and its subsidiaries. The estimation process contains uncertainty since captive insurance management must use judgment to estimate the ultimate cost that will be incurred to settle reported claims and unreported claims for incidents incurred but not reported as of the balance sheet date. The Company is a defendant in various legal actions arising from the normal conduct of business. The Company believes that none of the actions, if adversely determined, will have a material effect on the Company’s financial position or results of operations. Based on management’s assessment and legal counsel’s analysis concerning the likelihood of unfavorable outcomes, no amounts have been accrued for the above claims in the consolidated financial statements. The 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. 75 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Overview The Company’s operations over the last several years generally reflect three strategies which the Company expects to continue: (i) increased attention to “niche” insurance products, such as the Company’s funeral plan policies and traditional whole life products; (ii) increased emphasis on the funeral home and cemetery business; and (iii) capitalizing on the housing market by originating mortgage loans. Insurance Operations The Company’s life insurance business includes funeral plans and interest-sensitive life insurance, as well as other traditional life, accident and health insurance products. The Company places specific marketing emphasis on funeral plans through pre-need planning. A funeral plan is a small face value life insurance policy that generally has face coverage of up to $30,000. The Company believes that funeral plans represent a marketing niche that is less competitive because most insurance companies do not offer similar coverage. The purpose of the funeral plan policy is to pay the costs and expenses incurred at the time of a person’s death. On a per thousand-dollar cost of insurance basis, these policies can be more expensive to the policyholder than many types of non-burial insurance due to their low face amount, requiring the fixed cost of the policy administration to be distributed over a smaller policy size, and the simplified underwriting practices that result in higher mortality costs. The following table shows the condensed financial results of the insurance operations for the three-month periods ended March 31, 2026, and 2025. See Note 16 to the condensed consolidated financial statements. Three months ended March 31, (in thousands of dollars) 2026 2025 % Increase (Decrease) Revenues from external customers: Insurance premiums $ 28,855 $ 29,780 (3 )% Net investment income 17,717 18,631 (5 )% Gains on investments and other assets 383 291 32 % Other revenues 375 585 (36 )% Intersegment revenues 1,523 1,320 15 % Total segment revenues $ 48,853 $ 50,607 (3 )% Segment net earnings $ 5,938 $ 6,222 (5 )% Profitability for the three-month period ended March 31, 2026 decreased due to (a) a $924,000 decrease in insurance premiums and other considerations, (b) a $914,000 decrease in net investment income, (c) a $211,000 decrease in other revenues, and (d) a $66,000 increase in amortization of deferred policy acquisition costs, which were partially offset by (i) a $916,000 decrease in policyholder benefits and claims, (ii) a $435,000 decrease in selling, general and administrative expenses, (iii) a $203,000 increase in intersegment revenue, (iv) a $122,000 decrease in income tax expense, (v) a $92,000 increase in gains on investments and other assets, (vi) a $49,000 decrease in intersegment expenses, and (vii) a $14,000 decrease in interest expense. 76 Funeral Home and Cemetery Operations The Company sells funeral home services and products through its eleven funeral homes in Utah and four funeral homes in New Mexico. The Company also sells cemetery services, products and land (burial plots) through its five cemeteries in Utah, one cemetery in San Diego County, California, and one cemetery in Santa Fe, New Mexico. At-need funeral home and cemetery product sales and services are recognized as revenue when the services are performed or when the products are delivered. Pre-need funeral home and cemetery product sales and services are deferred until the merchandise is delivered, or services are performed. Revenue for pre-need cemetery land sales is recognized at the time of sale, and land is removed from inventory. The following table shows the condensed financial results of the funeral home and cemetery operations for the three-month periods ended March 31, 2026, and 2025. See Note 16 to the condensed consolidated financial statements. Three months ended March 31, (in thousands of dollars) 2026 2025 % Increase (Decrease) Revenues from external customers: Cemetery revenues $ 4,148 $ 3,710 12 % Funeral home revenues 3,586 3,590 0 % Net investment income 652 421 55 % Gains (losses) on investments and other assets (74 ) 210 (135 )% Other revenues 161 188 (14 )% Interesegment revenues 84 84 0 % Total segment revenues $ 8,557 $ 8,203 4 % Segment net earnings $ 1,631 $ 1,703 (4 )% Profitability in the three-month period ended March 31, 2026 decreased due to (a) a $353,000 increase in selling, general and administrative expenses, primarily attributable to a $195,000 increase in personnel expenses, (b) a $284,000 decrease in gains on investments and other assets, (c) a $116,000 increase in amortization of deferred policy acquisition costs, (d) a $27,000 decrease in other revenues, and (e) a $4,000 decrease in funeral home at-need sales, which were partially offset by (i) a $305,000 increase in cemetery pre-need sales, (ii) a $231,000 increase in net investment income, (iii) a $133,000 increase in cemetery at-need sales, (iv) a $20,000 decrease in cost of goods and services sold, and (v) a $16,000 decrease in income tax expense, (vi) a $7,000 decrease in intersegment expenses. Mortgage Operations The Company’s wholly owned subsidiary, SecurityNational Mortgage Company (“SecurityNational Mortgage”), is a mortgage lender incorporated under the laws of the State of Utah and approved and regulated by the Federal Housing Administration (FHA), a department of the U.S. Department of Housing and Urban Development (HUD), which originates mortgage loans that qualify for government insurance in the event of default by the borrower, in addition to various conventional mortgage loan products. SecurityNational Mortgage originates and refinances mortgage loans on a retail basis. Mortgage loans originated or refinanced by SecurityNational Mortgage are funded through loan purchase agreements with Security National Life, Kilpatrick Life and unaffiliated financial institutions. SecurityNational Mortgage receives fees from borrowers that are involved in mortgage loan originations and refinancings, and secondary fees earned from third party investors that purchase the mortgage loans. Mortgage loans are generally sold with mortgage servicing rights (“MSRs”) released to third-party investors or retained by SecurityNational Mortgage. SecurityNational Mortgage currently retains the mortgage servicing rights on approximately 2.04% of its loan origination volume. These mortgage loans are serviced by either SecurityNational Mortgage or an approved third-party sub-servicer. 77 Mortgage rates have followed the US Treasury yields in response to inflation and slowing new home sales. As expected, the lack of mortgage rate reductions has resulted in a decrease in loan originations classified as ‘refinance.’ Higher than anticipated mortgage rates have also had a negative effect on loan originations classified as ‘purchases’ although not as significant as those in the refinance classification. For the three-month periods ended March 31, 2026, and 2025, SecurityNational Mortgage originated 1,415 loans ($488,560,000 total loan volume principal amount) and 1,508 loans ($517,886,000 total loan volume principal amount), respectively. The following table shows the condensed financial results of the mortgage operations for the three-month periods ended March 31, 2026, and 2025. See Note 16 to the condensed consolidated financial statements. Three months ended March 31, (in thousands of dollars) 2026 2025 % Increase (Decrease) Revenues from external customers Secondary gains from investors $ 16,415 $ 16,955 (3 )% Income from loan originations 7,294 6,738 8 % Change in fair value of loans held for sale (1,604 ) 641 (350 )% Change in fair value of loan commitments 1,385 475 192 % Net investment income 132 150 (12 )% Gains on investments and other assets 42 86 (51 )% Other revenues 262 289 (9 )% Intersegment revenues 72 122 (41 )% Total segment revenues $ 23,998 $ 25,456 (6 )% Segment net loss $ (567 ) $ (1,511 ) 62 % Losses for the three-month period ended March 31, 2026 decreased due to (a) a $1,988,000 decrease in personnel expenses, (b) a $1,285,000 decrease in commissions, (c) a $910,000 increase in the fair value of loan commitments, (d) a $556,000 increase in income from loan originations, (e) a $161,000 decrease in rent and rent related expenses, (f) a $110,000 decrease in interest expense, (g) a $35,000 decrease in depreciation on property and equipment, and (h) a $28,000 decrease in advertising expenses, which were partially offset by (i) a $2,245,000 decrease in the fair value of loans held for sale, (ii) a $540,000 decrease in secondary gains from investors, (iii) a $352,000 decrease in income tax benefit, (iv) a $259,000 increase in costs related to funding mortgage loans, (v) a $231,000 increase in other expenses, (vi) a $210,000 increase in intersegment expenses, (vii) a $153,000 increase in data processing and IT related expenses, (viii) a $50,000 decrease in intersegment revenues, (ix) a $43,000 decrease in gains on investments and other assets, (x) a $26,000 decrease in other revenues, and (xi) a $19,000 decrease in net investment income. Consolidated Results of Operations Three-month period ended March 31, 2026, Compared to Three-month period ended March 31, 2025 Total revenues decreased by $3,011,000, or 3.6%, to $79,729,000 for the three-month period ended March 31, 2026, from $82,740,000 for the comparable period in 2025. Contributing to this decrease in total revenues was a $1,319,000 decrease in mortgage fee income, a $924,000 decrease in insurance premiums and other considerations, a $701,000 decrease in net investment income, a $264,000 decrease in other revenues, and a $235,000 decrease in gains on investments and other assets, which were partially offset by a $434,000 increase in net funeral home and cemetery sales. 78 Mortgage fee income decreased by $1,319,000, or 5.3%, to $23,490,000, for the three-month period ended March 31, 2026, from $24,809,000 for the comparable period in 2025. This decrease was primarily due to a $2,245,000 decrease in the fair value of loans held for sale and a $540,000 decrease in secondary gains from mortgage loans sold to third-party investors into the secondary market, which were partially offset by a $910,000 increase in the fair value of loan commitments and a $556,000 increase in income from loan originations. Insurance premiums and other considerations decreased by $924,000, or 3.1%, to $28,855,000 for the three-month period ended March 31, 2026, from $29,779,000 for the comparable period in 2025. This decrease was primarily due to a decrease of $966,000 in first year premiums, which was partially offset by an increase of $42,000 in renewal premiums. Net investment income decreased by $701,000, or 3.7%, to $18,501,000 for the three-month period ended March 31, 2026, from $19,202,000 for the comparable period in 2025. This decrease was primarily attributable to a $560,000 increase in investment expenses, a $355,000 decrease in interest on cash and cash equivalents, a $288,000 decrease in insurance assignment income, a $22,000 decrease in real estate income, and a $3,000 decrease in policy loan interest, which were partially offset by a $310,000 increase in mortgage loan interest, a $154,000 increase in other investment income, a $48,000 increase in fixed maturity securities income, and a $15,000 increase in equity securities income. Net funeral home and cemetery sales increased by $434,000, or 5.9%, to $7,734,000 for the three-month period ended March 31, 2026, from $7,300,000 for the comparable period in 2025. This increase was primarily due to a $305,000 increase in cemetery pre-need sales and a $133,000 increase in cemetery at-need sales, which were partially offset by a $4,000 decrease in funeral home at-need sales. Gains (losses) on investments and other assets decreased by $235,000 to $351,000 in net gains for the three-month period ended March 31, 2026, from $586,000 in net gains for the comparable period in 2025. This decrease in gains on investments and other assets was primarily due to a $426,000 decrease in gains on equity securities primarily attributable to decreases in the fair value of these equity securities and a $21,000 decrease in gains on fixed maturity securities, which were partially offset by a $157,000 increase in gains on real estate and a $55,000 increase in gains on other assets. Other revenues decreased by $264,000, or 24.9%, to $798,000 for the three-month period ended March 31, 2026, from $1,062,000 for the comparable period in 2025. This decrease was primarily due to a decrease of $264,000 in other miscellaneous revenues. Policyholder benefits and claims decreased by $916,000 or 3.6%, to $24,539,000 for the three-month period ended March 31, 2026, from $25,455,000 for the comparable period in 2025. This decrease was primarily the result of a $679,000 decrease in future policy benefits, a $156,000 decrease in death benefits, and an $81,000 decrease in surrender and other policy benefits. Amortization of deferred policy and pre-need acquisition costs and value of business acquired increased by $182,000, or 6.5%, to $2,979,000 for the three-month period ended March 31, 2026, from $2,797,000 for the comparable period in 2025. This increase is due to a $192,000 increase in the amortization of deferred policy and pre-need acquisition costs due to an increase in the average outstanding balance. This increase was partially offset by a $10,000 decrease in the amortization of value of business acquired due to no new deferrals and a decreasing average outstanding balance. Selling, general and administrative expenses decreased by $2,936,000, or 6.7%, to $40,928,000 for the three-month period ended March 31, 2026, from $43,864,000 for the comparable period in 2025. This decrease was primarily the result of a $1,645,000 decrease in commissions, a $1,581,000 decrease in personnel expenses, a $166,000 decrease in rent and rent related expenses, an $87,000 decrease in advertising expense, and a $35,000 decrease in depreciation on property and equipment, which were partially offset by a $319,000 increase in other expenses and a $259,000 increase in costs related to funding mortgage loans. Interest expense decreased by $123,000, or 11.0%, to $996,000 for the three-month period ended March 31, 2026, from $1,119,000 for the comparable period in 2025. This decrease was primarily due to a decrease of $110,000 in interest expense on mortgage warehouse lines of credit for loans held for sale and a decrease of $13,000 in interest expense on bank loans. 79 Funeral home and cemetery cost of goods and services sold decreased by $20,000, or 1.6%, to $1,233,000 for the three-month period ended March 31, 2026, from $1,253,000 for the comparable period in 2025. This decrease was primarily due to a decrease of $18,000 in at-need sales and decrease of $2,000 in pre-need sales. Income tax expense increased by $214,000, or 11.7%, to $2,051,000 for the three-month period ended March 31, 2026, from $1,837,000 for the comparable period in 2025. This increase was primarily due to an increase in earnings before income taxes for 2026 compared to 2025. The Company’s overall effective tax rate increased from 22.3% for 2025 to 22.7% in 2026, a 0.4% increase in the effective tax rate or a 1.8% change. This increase was primarily due to certain permanent tax adjustments that are higher when compared to the prior year. Liquidity and Capital Resources The Company’s life insurance subsidiaries and funeral home and cemetery subsidiaries realize cash flow from premiums, contract payments and sales on personal services rendered for funeral home and cemetery business, from interest and dividends on invested assets, and from the proceeds from the sale or maturity of investments. The mortgage subsidiaries realize cash flow from fees generated by originating and refinancing mortgage loans and fees from mortgage loans held for sale that are sold to investors into the secondary market. It should be noted that current conditions in the financial markets and economy may affect the realization of these expected cash flows. The Company considers these sources of cash flow to be adequate to fund future policyholder and funeral home and cemetery liabilities, which generally are long-term, and adequate to pay current policyholder claims, annuity payments, expenses related to the issuance of new policies, the maintenance of existing policies, debt service, and to meet current operating expenses. During the three-month periods ended March 31, 2026, and 2025, the Company’s operations provided cash of approximately $32,940,000 and of approximately $9,586,000, respectively. The increase in cash provided by operations was due primarily to a decrease in originations of loans held for sale and an increase in net earnings. The Company expects to pay out liabilities under its funeral plans over the long term given the nature of those plans. Funeral plans are small face value life insurance policies that payout upon a person’s death to cover funeral burial costs; policyholders generally keep these policies in force until, and do not surrender prior to, death. Because of the long-term nature of these liabilities, the Company can hold to maturity or for the targeted investment period its corresponding bond, real estate, and mortgage loan investments, thus reducing the risk of liquidating these long-term investments because of any sudden changes in their fair values. The Company attempts to match the duration of invested assets with its policyholder and funeral home and cemetery liabilities. The Company may sell investments other than those held to maturity in the portfolio to help in this timing matching. The Company purchases short-term investments on a temporary basis to meet the expected short-term requirements of the Company’s insurance products. The Company’s investment philosophy is intended to provide a rate of return for the expected duration of its funeral home and cemetery policies that will exceed the accruing of liabilities under those policies regardless of future interest rate movements. The Company’s investment policy is also to invest predominantly in fixed maturity securities, real estate, mortgage loans, and warehousing of mortgage loans. The warehoused mortgage loans are typically held for sale on a short-term basis before selling the loans to investors in accordance with the requirements and laws governing the Company’s life insurance subsidiaries. Bonds owned by the insurance subsidiaries amounted to $350,683,000 (at estimated fair value) and $365,986,000 (at estimated fair value) as of March 31, 2026, and December 31, 2025, respectively. This represented 34.2% and 35.2% of the total investments of the Company as of March 31, 2026, and December 31, 2025, respectively. Generally, all bonds owned by the life insurance subsidiaries are rated by the National Association of Insurance Commissioners. Under this rating system, there are six categories used for the rating of bonds. As of March 31, 2026, 1.7% (or $5,945,000) and as of December 31, 2025, 1.6% (or $5,825,000) of the Company’s total bond investments were invested in bonds in rating categories three through six, which are considered non-investment grade. The Company’s life insurance subsidiaries are subject to risk-based capital guidelines established by statutory regulators requiring minimum capital levels based on the perceived risk of assets, liabilities, disintermediation, and business risk. As of March 31, 2026, and December 31, 2025, the life insurance subsidiaries were in compliance with the regulatory criteria. The Company’s total capitalization of stockholders’ equity, bank and other loans payable was $534,276,000 as of March 31, 2026, as compared to $508,757,000 as of December 31, 2025. This increase was primarily due to an increase of $15,147,000 in stockholders’ equity and an increase of $10,372,000 in bank loans and other loans payable. Stockholders’ equity as a percentage of total capitalization was 79.6% and 80.7% as of March 31, 2026, and December 31, 2025, respectively. 80 Lapse rates measure the amount of insurance terminated during a particular period. The Company’s lapse rate for life insurance in 2025 was 7.2% as compared to a lapse rate of 7.0% for 2024. The 2026 lapse rate to date has been approximately the same as 2025. The combined statutory capital and surplus of the Company’s life insurance subsidiaries was approximately $140,204,000 and $139,068,000 as of March 31, 2026, and December 31, 2025, respectively. The life insurance subsidiaries cannot pay a dividend to their parent company without the approval of state insurance regulatory authorities. Item 3. Quantitative and Qualitative Disclosures About Market Risk. As a smaller reporting company, the Company is not required to provide information typically disclosed under this item. Item 4. Controls and Procedures. Evaluation of Disclosure Controls and Procedures As of March 31, 2026, the Company carried out an evaluation under the supervision and with the participation of its Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company has designed these controls and procedures to ensure that information the Company is required to disclose in reports filed under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to Company management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure. The executive officers have concluded that the Company’s disclosure controls and procedures were not effective as of March 31, 2026, because of the material weakness in the Company’s internal control over financial reporting described below. This material weakness was also identified during the fourth quarter of 2025 and is disclosed in the Company’s Annual Report on Form 10-K along with the report of the Company’s registered public accounting firm. The Company identified a material weakness related to information technology general controls (“ITGCs”) because the Company did not design and maintain effective ITGCs for information systems that are relevant to the preparation of the financial statements. Specifically, deficiencies were identified related to user access controls and program change management controls for financial systems. These deficiencies resulted in related control deficiencies with respect to information generated from the impacted systems and used in the performance of controls relevant to the preparation of the financial statements. The material weakness related to the ITGCs did not result in adjustments to the financial statements for the quarter ended March 31, 2026. Changes in Internal Control over Financial Reporting The Company is taking actions to remediate the material weakness relating to its internal control over financial reporting. Other than the changes to the Company’s internal control over financial reporting described in “Remediation Plan and Status” below, there were no changes to the Company’s internal control over financial reporting as defined by Rule 13a-15(f) under the Exchange Act during the quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. Remediation Plan and Status The Company is committed to remediating its material weaknesses as promptly as possible. Management is in the process of implementing its remediation plan. Management will test the ongoing operating effectiveness of the new and existing controls in future periods. The material weaknesses cannot be considered completely remediated until the applicable controls have operated for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. 81 Part II - Other Information Item 1. Legal Proceedings . The Company is not a party to any material legal proceedings outside the ordinary course of business or to any other legal proceedings, which if adversely determined, would be expected to have a material adverse effect on its financial condition or results of operations. Item 1A. Risk Factors. As a smaller reporting company, the Company is not required to provide information typically disclosed under this item. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. Recent Sales of Unregistered Securities and Use of Proceeds from Registered Securities None. Issuer Purchases of Equity Securities On February 16, 2026, the Company executed a 10b5-1 agreement with a broker to repurchase shares of the Company’s Class A Common Stock. Under the terms of the agreement, the broker is permitted to repurchase up to $1,000,000 of the Company’s Class A Common Stock. Purchases commenced on March 16, 2026. The agreement is subject to the daily time, price, and volume conditions of Rule 10b-18. The agreement expires on December 31, 2026. The following table shows the Company’s repurchase activity during the three-month period ended March 31, 2026, under the 10b5-1 agreement. Period (a) Total Number of Class A Shares Purchased (b) Average Price Paid per Class A Share (1) (c) Total Number of Class A Shares Purchased as Part of Publicly Announced Plan or Program (d) Maximum Number (or Approximate Dollar Value) of Class A Shares that May Yet Be Purchased Under the Plan or Program (2) 1/1/2026-1/31/2026 - $ - - 99,028 2/1/2026-2/28/2026 - - - 99,028 3/1/2026-3/31/2026 45,193 9.29 - 53,835 Total 45,193 $ 9.29 - 53,835 (1) Includes fees and commissions paid on stock repurchases. (2) In September 2018, the Board of Directors of the Company approved a Stock Repurchase Plan that authorized the repurchase of 300,000 shares of the Company’s Class A Common Stock in the open market. The Company amended the Stock Repurchase Plan on December 4, 2020. The amendment authorized the repurchase of a total of 1,000,000 shares of the Company’s Class A Common Stock in the open market. Any repurchased shares of Class A common stock are to be held as treasury shares to be used as the Company’s employer matching contribution to the Employee 401(k) Retirement Savings Plan and for shares held in the Deferred Compensation Plan. 82 Item 3. Defaults Upon Senior Securities. None. Item 4. Mine Safety Disclosures. None. Item 5. Other Information. None of our directors or officers informed us of the adoption or termination of a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Item 408 of Regulation S-K, during the three-month period ended March 31, 2026. Item 6. Exhibits, Financial Statements Schedules, and Reports on Form 8-K. (a)(1) Financial Statements See “Table of Contents – Part I – Financial Information” under page 2 above. (a)(2) Financial Statement Schedules None All other schedules to the consolidated financial statements required by Article 7 of Regulation S-X are not required under the related instructions or are inapplicable and therefore have been omitted. (a)(3) Exhibits The following Exhibits are filed herewith pursuant to Rule 601 of Regulation S-K or are incorporated by reference to previous filings. 3.1 Amended and Restated Articles of Incorporation (1) 3.2 Amended and Restated Bylaws (2) 21 Subsidiaries of the Registrant 31.1 Certification pursuant to 18 U.S.C. Section 1350, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002 31.2 Certification pursuant to 18 U.S.C. Section 1350, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002 32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 101.INS Inline XBRL Instance Document 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) (1) Incorporated by reference from Report on Form 10-K, as filed on March 31, 2017 (2) Incorporated by reference from Report on Form 10-Q, as filed on May 15, 2019 83 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. REGISTRANT SECURITY NATIONAL FINANCIAL CORPORATION Registrant Dated: May 11, 2026 /s/ Scott M. Quist Scott M. Quist Chairman, President and Chief Executive Officer (Principal Executive Officer) Dated: May 11, 2026 /s/ Garrett S. Sill Garrett S. Sill Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer) 84