What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-10 compared with 2026-05-11 · 196 added, 119 removed, 131 unchanged (71% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Discussion and Analysis of Financial Condition and Results of Operations.

Company’s operations over the last several years generally reflect three strategies which the Company expects to continue:

15 unchanged sentences

underwriting practices that result in higher mortality costs.

following table shows the condensed financial results of the insurance operations for the three-month periods ended March 31, 2026, and

following table shows the condensed financial results of the insurance operations for the three and six month periods ended June 30,

2026, and 2025.

See Note 16 to the condensed consolidated financial statements.

Three months ended March 31,

months ended June 30,

(in thousands of dollars)

months ended June 30,

(in thousands of dollars)

Increase (Decrease)

Revenues from external customers:

Insurance premiums

Net investment income

Gains on investments and other assets

Other revenues

Intersegment revenues

Total segment revenues

Segment net earnings

Increase (Decrease)

from external customers:

investment income

on investments and other assets

segment revenues

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.

for the six-month period ended June 30, 2026 decreased due to (a) a $5,221,000 decrease in net investment income, (b) a $2,405,000 decrease

in insurance premiums and other considerations, (c) a $283,000 decrease in other revenues, and (d) a $62,000 increase in amortization

of deferred policy acquisition costs, which were partially offset by (i) a $2,266,000 increase in gains on investments and other assets,

(ii) a $2,114,000 decrease in policyholder benefits and claims, (iii) a $892,000 decrease in selling, general and administrative expenses,

(iv) a $571,000 decrease in income tax expense, (v) a $113,000 decrease in interest expense, (vi) a $57,000 decrease in intersegment

expenses, and (vii) a $54,000 increase in intersegment revenue.

Home and Cemetery Operations

8 unchanged sentences

the time of sale, and land is removed from inventory.

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.

following table shows the condensed financial results of the funeral home and cemetery operations for the three and six month periods

ended June 30, 2026, and 2025.

See Note 16 to the condensed consolidated financial statements.

Three months ended March 31,

months ended June 30,

(in thousands of dollars)

months ended June 30,

(in thousands of dollars)

Increase (Decrease)

Revenues from external customers:

Cemetery revenues

Funeral home revenues

Net investment income

Gains (losses) on investments and other assets

Other revenues

Interesegment revenues

Total segment revenues

Segment net earnings

Increase (Decrease)

from external customers:

home revenues

investment income

on investments and other assets

Interesegment

segment revenues

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.

in the six-month period ended June 30, 2026 increased due to (a) a $978,000 increase in gains on investments and other assets, (b) a

$408,000 increase in cemetery pre-need sales, (c) a $306,000 increase in net investment income, (d) a $212,000 increase in funeral home

at-need sales, (e) a $155,000 increase in cemetery at-need sales, (f) a $14,000 decrease in intersegment expenses, and (g) a $2,000 decrease

in cost of goods and services sold, which were partially offset by (i) a $715,000 increase in selling, general and administrative expenses,

primarily attributable to a $461,000 increase in personnel expenses, (ii) a $306,000 increase in income tax expense, (iii) a $184,000

increase in amortization of deferred policy acquisition costs, and (iv) a $19,000 decrease in other revenues.

Company’s wholly owned subsidiary, SecurityNational Mortgage Company (“SecurityNational Mortgage”), is a mortgage lender

20 unchanged sentences

refinance classification.

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.

following table shows the condensed financial results of the mortgage operations for the three-month periods ended March 31, 2026, and

the three and six month periods ended June 30, 2026, and 2025, SecurityNational Mortgage originated 3,011 loans ($1,036,088,000 total

loan volume principal amount) and 3,375 loans ($1,134,783,000 total loan volume principal amount), respectively.

following table shows the condensed financial results of the mortgage operations for the three and six month periods ended June 30, 2026,

See Note 16 to the condensed consolidated financial statements.

Three months ended March 31,

months ended June 30,

(in thousands of dollars)

months ended June 30,

(in thousands of dollars)

Increase (Decrease)

Revenues from external customers

Secondary gains from investors

Income from loan originations

Change in fair value of loans held for sale

Change in fair value of loan commitments

Net investment income

Gains on investments and other assets

Other revenues

Intersegment revenues

Total segment revenues

Segment net loss

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.

Increase (Decrease)

from external customers

gains from investors

from loan originations

in fair value of loans held for sale

in fair value of loan commitments

investment income

(losses) on investments and other assets

segment revenues

net earnings (loss)

for the six-month period ended June 30, 2026 decreased due to (a) a $4,189,000 decrease in personnel expenses, (b) a $3,579,000 decrease

in commissions, (c) a $412,000 increase in the fair value of loan commitments, (d) a $332,000 decrease in rent and rent related expenses,

(e) a $254,000 decrease in advertising expenses, (f) a $201,000 decrease in interest expense, (g) a $63,000 decrease in depreciation

on property and equipment, (h) a $61,000 increase in net investment income, and (i) a $23,000 decrease in costs related to funding mortgage

loans, which were partially offset by (i) a $3,830,000 decrease in secondary gains from investors, (ii) a $1,507,000 decrease in the

fair value of loans held for sale, (iii) a $788,000 decrease in income tax benefit, (iv) a $291,000 increase in data processing and IT

related expenses, (v) a $161,000 increase in other expenses, (vi) an $82,000 decrease in income from loan originations, (vii) a $69,000

increase in intersegment expenses, (viii) a $57,000 decrease in intersegment revenues, (ix) a $42,000 decrease in gains on investments

and other assets, and (x) a $36,000 decrease in other revenues.

Results of Operations

period ended March 31, 2026, Compared to Three-month period ended March 31, 2025

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 ended June 30, 2026, Compared to Three-month period ended June 30, 2025

revenues decreased by $5,615,000, or 6.3%, to $83,926,000 for the three-month period ended June 30, 2026, from $89,541,000 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.

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

Contributing to this decrease in total revenues was a $4,152,000 decrease in net investment income, a $3,688,000 decrease

in mortgage fee income, a $1,481,000 decrease in insurance premiums and other considerations, and a $74,000 decrease in other revenues,

which were partially offset by a $3,438,000 increase in gains on investments and other assets and a $342,000 increase in net funeral

home and cemetery sales.

fee income decreased by $3,688,000, or 12.5%, to $25,797,000, for the three-month period ended June 30, 2026, from $29,485,000 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.

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

This decrease was primarily due to a $3,290,000 decrease in secondary gains from mortgage loans sold to third-party

investors into the secondary market reflecting lower overall loan volume and less favorable pricing conditions, and a $638,000 decrease

in income from loan originations, and a $498,000 decrease in the fair value of loan commitments, which were partially offset by a $738,000

increase in the fair value of loans held for sale.

premiums and other considerations decreased by $1,481,000, or 4.9%, to $28,705,000 for the three-month period ended June 30, 2026, from

$30,186,000 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.

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

This decrease was primarily due to a decrease of $1,820,000 in first year premiums because

of a decrease in sales, which was partially offset by an increase of $339,000 in renewal premiums.

investment income decreased by $4,152,000, or 20.2%, to $16,429,000 for the three-month period ended June 30, 2026, from $20,581,000

for the comparable period in 2025.

This decrease was primarily attributable to a $6,116,000 decrease in mortgage loan interest resulting

from a decline in the average balance of the mortgage loan portfolio held for investment, a $260,000 decrease in insurance assignment

income, a $59,000 decrease in fixed maturity securities income, a $26,000 decrease in policy loan interest, and a $14,000 decrease in

equity securities income, which were partially offset by a $1,923,000 decrease in investment expenses, a $242,000 increase in interest

on cash and cash equivalents, a $115,000 increase in other investment income, and a $41,000 increase in real estate income.

funeral home and cemetery sales increased by $342,000, or 4.7%, to $7,600,000 for the three-month period ended June 30, 2026, from $7,258,000

for the comparable period in 2025.

This increase was primarily due to a $216,000 increase in funeral home at-need sales, a $104,000 increase

in cemetery pre-need sales, and a $22,000 increase in cemetery at-need sales.

on investments and other assets increased by $3,438,000 to $4,580,000 for the three-month period ended June 30, 2026, from $1,142,000

for the comparable period in 2025.

This increase in gains on investments and other assets was primarily due to a $3,065,000 increase

in gains on equity securities primarily attributable to increases in the fair value of these equity securities and a $628,000 increase

in gains on real estate, which were partially offset by a $210,000 decrease in gains on fixed maturity securities and a $45,000 decrease

in gains on other assets.

revenues decreased by $74,000, or 8.3%, to $815,000 for the three-month period ended June 30, 2026, from $889,000 for the comparable

period in 2025.

This decrease was primarily due to a decrease of $74,000 in other miscellaneous revenues.

benefits and claims decreased by $1,198,000 or 4.7%, to $24,317,000 for the three-month period ended June 30, 2026, from $25,515,000

for the comparable period in 2025.

This decrease was primarily the result of a $941,000 decrease in future policy benefits and a $335,000

decrease in death benefits, which were partially offset by a $78,000 increase in surrender and other policy benefits.

of deferred policy and pre-need acquisition costs and value of business acquired increased by $64,000, or 2.2%, to $2,938,000 for the

three-month period ended June 30, 2026, from $2,874,000 for the comparable period in 2025.

This increase is due to a $74,000 increase

in the amortization of deferred policy and pre-need acquisition costs due to an increase in the average outstanding balance, which 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.

general and administrative expenses decreased by $5,231,000, or 10.9%, to $42,730,000 for the three-month period ended June 30, 2026,

from $47,961,000 for the comparable period in 2025.

This decrease was primarily the result of a $3,148,000 decrease in commissions, a

$1,665,000 decrease in personnel expenses, a $282,000 decrease in costs related to funding mortgage loans, a $210,000 decrease in advertising

expense, a $151,000 decrease in rent and rent related expenses, and a $12,000 decrease in depreciation on property and equipment, which

were partially offset by a $237,000 increase in other expenses.

expense decreased by $189,000, or 14.6%, to $1,105,000 for the three-month period ended June 30, 2026, from $1,293,000 for the comparable

period in 2025.

This decrease was primarily due to a decrease of $98,000 in interest expense on bank loans and $91,000 in interest expense

on mortgage warehouse lines of credit for loans held for sale.

home and cemetery cost of goods and services sold increased by $18,000, or 1.6%, to $1,177,000 for the three-month period ended June

30, 2026, from $1,159,000 for the comparable period in 2025.

This increase was primarily due to an increase of $22,000 in pre-need sales,

which was partially offset by a decrease of $4,000 in at-need sales.

tax expense increased by $309,000, or 13.1%, to $2,677,000 for the three-month period ended June 30, 2026, from $2,368,000 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 22.1% for 2025 to 23.0% in 2026, a 0.9% increase in the effective tax rate or a 4.1% change.

This increase was primarily due to certain permanent tax adjustments that are higher when compared to the prior year.

period ended June 30, 2026, Compared to Six-month period ended June 30, 2025

revenues decreased by $8,626,000, or 5.0%, to $163,655,000 for the six-month period ended June 30, 2026, from $172,281,000 for the comparable

period in 2025.

Contributing to this decrease in total revenues was a $5,007,000 decrease in mortgage fee income, a $4,853,000 decrease

in net investment income, a $2,405,000 decrease in insurance premiums and other considerations, and a $338,000 decrease in other revenues,

which were partially offset by a $3,202,000 increase in gains on investments and other assets and a $775,000 increase in net funeral

home and cemetery sales.

fee income decreased by $5,007,000, or 9.2%, to $49,287,000, for the six-month period ended June 30, 2026, from $54,294,000 for the comparable

period in 2025.

This decrease was primarily due to a $3,830,000 decrease in secondary gains from mortgage loans sold to third-party investors

into the secondary market reflecting lower overall loan volume and less favorable pricing conditions, a $1,507,000 decrease in the fair

value of loans held for sale, and an $82,000 decrease in income from loan originations, which were partially offset by a $412,000 increase

in the fair value of loan commitments.

premiums and other considerations decreased by $2,405,000, or 4.0%, to $57,560,000 for the six-month period ended June 30, 2026, from

$59,965,000 for the comparable period in 2025.

This decrease was primarily due to a decrease of $2,785,000 in first year premiums because

of a decrease in sales, which was partially offset by an increase of $380,000 in renewal premiums.

investment income decreased by $4,853,000, or 12.2%, to $34,930,000 for the six-month period ended June 30, 2026, from $39,783,000 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

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

This decrease was primarily attributable to a $5,806,000 decrease in mortgage loan interest resulting

from a decline in the average balance of the mortgage loan portfolio held for investment, a $548,000 decrease in insurance assignment

income, a $113,000 decrease in interest on cash and cash equivalents, a $29,000 decrease in policy loan interest, and an $11,000 decrease

in fixed maturity securities income, which were partially offset by a $1,364,000 decrease in investment expenses, a $269,000 increase

in other investment income, a $20,000 increase in real estate income, and a $1,000 increase in equity securities income.

funeral home and cemetery sales increased by $775,000, or 5.3%, to $15,333,000 for the six-month period ended June 30, 2026, from $14,558,000

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.

(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.

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

This increase was primarily due to a $408,000 increase in cemetery pre-need sales, a $212,000 increase

in funeral home at-need sales, and a $155,000 increase in cemetery at-need sales.

on investments and other assets increased by $3,202,000 to $4,931,000 for the six-month period ended June 30, 2026, from $1,729,000 for

the comparable period in 2025.

This increase in gains on investments and other assets was primarily due to a $2,639,000 increase in gains

on equity securities primarily attributable to increases in the fair value of these equity securities, a $784,000 increase in gains on

real estate, and a $10,000 increase in gains on other assets, which were partially offset by a $231,000 decrease in gains on fixed maturity

revenues decreased by $338,000, or 17.3%, to $1,613,000 for the six-month period ended June 30, 2026, from $1,951,000 for the comparable

period in 2025.

This decrease was primarily due to a decrease of $338,000 in other miscellaneous revenues.

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

benefits and claims decreased by $2,114,000 or 4.1%, to $48,857,000 for the six-month period ended June 30, 2026, from $50,971,000 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.

This decrease was primarily the result of a $1,619,000 decrease in future policy benefits, a $491,000

decrease in death benefits, and a $4,000 decrease in surrender and other policy benefits.

of deferred policy and pre-need acquisition costs and value of business acquired increased by $247,000, or 4.4%, to $5,917,000 for the

three-month period ended March 31, 2026, from $2,797,000 for the comparable period in 2025.

six-month period ended June 30, 2026, from $5,670,000 for the comparable period in 2025.

This increase is due to a $265,000 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.

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.

in the amortization of deferred policy and pre-need acquisition costs due to an increase in the average outstanding balance, which was

partially offset by an $18,000 decrease in the amortization of value of business acquired due to no new deferrals and a decreasing average

outstanding balance.

general and administrative expenses decreased by $8,167,000, or 8.9%, to $83,658,000 for the six-month period ended June 30, 2026, from

$91,825,000 for the comparable period in 2025.

This decrease was primarily the result of a $4,793,000 decrease in commissions, a $3,246,000

$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.

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

decrease in personnel expenses, a $317,000 decrease in rent and rent related expenses, a $297,000 decrease in advertising expense, a

$47,000 decrease in depreciation on property and equipment, and a $23,000 decrease in costs related to funding mortgage loans, which

were partially offset by a $556,000 increase in other expenses.

expense decreased by $312,000, or 12.9%, to $2,101,000 for the six-month period ended June 30, 2026, from $2,413,000 for the comparable

period in 2025.

1 unchanged sentence

loans held for sale and a decrease of $111,000 in interest expense on bank loans.

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

home and cemetery cost of goods and services sold decreased by $1,000, or 0.1%, to $2,411,000 for the six-month period ended June 30,

2026, from $2,412,000 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.

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

This decrease was primarily due to a decrease of $22,000 in at-need sales, which

was partially offset by an increase of $21,000 in pre-need sales.

tax expense increased by $523,000, or 12.4%, to $4,728,000 for the six-month period ended June 30, 2026, from $4,205,000 for the comparable

period in 2025.

13 unchanged sentences

maintenance of existing policies, debt service, and to meet current operating expenses.

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 six-month periods ended June 30, 2026, and 2025, the Company’s operations provided cash of approximately $36,934,000 and of

approximately $1,905,000, 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.

Company expects to pay out liabilities under its funeral plans over the long term given the nature of those plans.

18 unchanged sentences

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

subsidiaries amounted to $363,471,000 (at estimated fair value) and $365,986,000 (at estimated fair value) as of June 30, 2026, and December

31, 2025, respectively.

This represented 40.1% and 35.2% of the total investments of the Company as of June 30, 2026, and December 31,

2025, respectively.

Generally, all bonds owned by the life insurance subsidiaries are rated by the National Association of Insurance

1 unchanged sentence

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)

As of June 30, 2026, 1.6% (or $5,966,000)

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

2 unchanged sentences

minimum capital levels based on the perceived risk of assets, liabilities, disintermediation, and business risk.

As of March 31, 2026,

As of June 30, 2026,

and December 31, 2025, the life insurance subsidiaries were in compliance with the regulatory criteria.

Company’s total capitalization of stockholders’ equity, bank and other loans payable was $534,276,000 as of March 31, 2026,

Company’s total capitalization of stockholders’ equity, bank and other loans payable was $555,266,000 as of June 30, 2026,

as compared to $508,757,000 as of December 31, 2025.

This increase was primarily due to an increase of $22,667,000 in stockholders’

equity and an increase of $10,372,000 in bank loans and other loans payable.

equity and an increase of $23,842,000 in bank 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.

was 78.0% and 80.7% as of June 30, 2026, and December 31, 2025, respectively.

of the Company’s three mortgage warehouse lines of credit, through Western Alliance Bank and JPMorgan Chase Bank, are scheduled

to mature on August 15, 2026.

The Company is currently in the process of negotiating renewals of these facilities and anticipates that

both will be renewed on substantially similar terms.

However, there can be no assurance that such renewals will be completed.

facilities are not renewed, the Company may need to secure alternative funding sources for its mortgage lending operations, which could

result in less favorable terms and temporarily impact loan origination volumes.

See Note 19 to the condensed consolidated financial statements

for additional information regarding these warehouse lines.

rates measure the amount of insurance terminated during a particular period.

3 unchanged sentences

combined statutory capital and surplus of the Company’s life insurance subsidiaries was approximately $144,894,000 and $139,068,000

as of March 31, 2026, and December 31, 2025, respectively.

as of June 30, 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.

Quantitative and Qualitative Disclosures About Market Risk.

and Qualitative Disclosures About Market Risk.

a smaller reporting company, the Company is not required to provide information typically disclosed under this item.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis