What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-15 compared with 2024-11-14 · 129 added, 191 removed, 124 unchanged (72% of the section changed)

17 unchanged sentences

underwriting practices that result in higher mortality costs.

following table shows the condensed financial results of the insurance operations for the three and nine month periods ended September

30, 2024 and 2023.

following table shows the condensed financial results of the insurance operations for the three month periods ended March 31, 2025 and

See Note 7 to the condensed consolidated financial statements.

Three months ended September 30,

(in thousands of dollars)

Nine months ended September 30,

Three months ended March 31,

(in thousands of dollars)

% Increase (Decrease)

Revenues from external customers:

Insurance premiums

Mortgage fee income

Net investment income

Gains (losses) on investments and other assets

Intersegment revenue

Earnings before income taxes

Gains on investments and other assets

Other revenues

Intersegment revenues

Total segment revenues

Segment net earnings

Profitability

for the nine month period ended September 30, 2024 increased due to (a) a $4,136,000 increase in insurance premiums and other considerations,

(b) a $3,555,000 decrease in death, surrenders and other policy benefits, (c) a $2,507,000 decrease in amortization of deferred policy

acquisition costs, (d) a $2,196,000 increase in gains on investments and other assets, and (e) a $548,000 decrease in interest expense,

which were partially offset by (i) a $1,791,000 increase in selling, general and administrative expenses, (ii) a $1,117,000 increase

in future policy benefits, (iii) a $1,006,000 decrease in intersegment revenue, (iv) a $707,000 decrease in net investment income, (v)

a $173,000 decrease in other revenues, (vi) a $76,000 decrease in mortgage fee income, and (vii) a $36,000 increase in intersegment interest

expense and other expenses.

for the three month period ended March 31, 2025 decreased due to (a) a $2,536,000 increase in selling, general and administrative expenses,

(b) a $798,000 decrease in gains on investments and other assets, (c) a $332,000 increase in death benefits, (d) a $73,000 decrease in

insurance premiums and other considerations, (e) a $60,000 decrease in intersegment revenue, and (f) a $13,000 increase in amortization

of deferred policy acquisition costs, which were partially offset by (i) a $636,000 decrease in income tax expense, (ii) a $358,000 decrease

in future policy benefits, (iii) a $168,000 increase in other revenues, (iv) a $26,000 decrease in intersegment expenses, (v) a $25,000

decrease in interest expense, (vi) a $19,000 increase in net investment income, and (vii) a $14,000 decrease in surrenders and other

policy benefits.

and Mortuary Operations

Company sells mortuary services and products through its nine mortuaries in Utah and three mortuaries in New Mexico.

Company sells mortuary services and products through its eleven mortuaries in Utah and four mortuaries in New Mexico.

The Company also

6 unchanged sentences

revenue for cemetery land sales occurs when 10% of the purchase price is received.

following table shows the condensed financial results of the cemetery and mortuary operations for the three and nine month periods ended

September 30, 2024 and 2023.

following table shows the condensed financial results of the cemetery and mortuary operations for the three month periods ended March

31, 2025 and 2024.

See Note 7 to the condensed consolidated financial statements.

Three months ended September 30,

(in thousands of dollars)

Nine months ended September 30,

Three months ended March 31,

(in thousands of dollars)

% Increase (Decrease)

Revenues from external customers:

Mortuary revenues

Cemetery revenues

Mortuary revenues

Net investment income

Gains on investments and other assets

Earnings before income taxes

Other revenues

Interesegment revenues

Total segment revenues

Segment net earnings

Profitability

in the nine month period ended September 30, 2024 increased due to (a) a $1,704,000 increase in gains on investments and other assets,

(b) a $445,000 increase in mortuary at-need sales, (c) a $344,000 increase in cemetery pre-need sales, (d) a $143,000 increase in other

revenues, (e) a $19,000 decrease in intersegment interest expense and other expenses, and (f) a $1,000 increase in intersegment revenues,

which were partially offset by (i) a $324,000 decrease in net investment income, (ii) a $224,000 increase in amortization of deferred

policy acquisition costs, (iii) a $132,000 decrease in cemetery at-need sales, (iv) a $62,000 increase in selling, general and administrative

expenses, and (v) a $12,000 increase in cost of goods and services sold.

in the three month period ended March 31, 2025 decreased due to (a) a $663,000 decrease in net investment income, (b) a $372,000 decrease

in gains on investments and other assets, (c) a $234,000 increase in selling, general and administrative expenses, and (d) a $1,000 decrease

in intersegment revenues, which were partially offset by (i) a $252,000 decrease in income tax expense, (ii) a $176,000 increase in mortuary

at-need sales, (iii) a $146,000 increase in cemetery pre-need sales, (iv) a $60,000 decrease in amortization of deferred policy acquisition

costs, (v) a $30,000 increase in cemetery at-need sales, (vi) a $21,000 decrease in cost of goods and services sold, (vii) a $15,000

increase in other revenues, and (viii) a $6,000 decrease in intersegment expenses.

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 mortgages loans that qualify for government insurance in the event

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.

12 unchanged sentences

Mortgage or an approved third-party sub-servicer.

rates have followed the US Treasury yields up in response to the increased inflation and the expectation that the Federal Reserve will

continue to raise rates in the near term.

As expected, the rapid increase in mortgage rates has resulted in a decrease in loan originations

classified as ‘refinance.’ Higher mortgage rates have also had a negative effect on loan originations classified as ‘purchases,’

although not as significant as those in the refinance classification.

the nine month periods ended September 30, 2024 and 2023, SecurityNational Mortgage originated 5,505 loans ($1,723,036,000 total volume)

and 5,680 loans ($1,708,831,000 total volume), respectively.

following table shows the condensed financial results of the mortgage operations for the three and nine month periods ended September

30, 2024 and 2023.

rates have followed the US Treasury yields up in response to increased inflation.

As expected, the rapid increase in mortgage rates has

resulted in a decrease in loan originations classified as ‘refinance.’ Higher mortgage rates have also had a negative effect

on loan originations classified as ‘purchases,’ although not as significant as those in the refinance classification.

the three month periods ended March 31, 2025 and 2024, SecurityNational Mortgage originated 1,508 loans ($517,886,000 total volume) and

1,486 loans ($465,605,000 total volume), respectively.

following table shows the condensed financial results of the mortgage operations for the three month periods ended March 31, 2025 and

See Note 7 to the condensed consolidated financial statements.

Three months ended September 30,

(in thousands of dollars)

Nine months ended September 30,

Three months ended March 31,

(in thousands of dollars)

% Increase (Decrease)

Revenues from external customers

5 unchanged sentences

Gains (losses) on investments and other assets

Earnings (loss) before income taxes

Profitability

for the nine month period ended September 30, 2024 increased due to (a) a $4,834,000 increase in the fair value of loans held for sale,

(b) a $3,067,000 decrease in other expenses, (c) a $3,050,000 decrease in personnel expenses, (d) a $1,807,000 increase in income from

loan originations, (e) a $1,528,000 increase in the fair value of loan commitments, (f) a $1,231,000 decrease in rent and rent related

expenses, (g) a $990,000 increase in other revenues, (h) a $986,000 decrease in intersegment interest expense and other expenses, (i)

a $569,000 decrease in costs related to funding mortgage loans, (j) a $332,000 decrease in advertising expenses, (k) a $310,000 decrease

in interest expense, (l) a $36,000 increase in intersegment revenues, and (m) a $29,000 decrease in depreciation on property and equipment,

which were partially offset by (i) a $4,324,000 increase in commissions, (ii) a $3,421,000 decrease in secondary gains from investors,

(iii) a $1,256,000 decrease in gains on investments and other assets, and (iv) a $374,000 decrease in net investment income.

Other revenues

Intersegment revenues

Total segment revenues

Segment net loss

for the three month period ended March 31, 2025 increased due to (a) a $2,025,000 increase in commissions, (b) a $804,000 increase in

personnel expenses, (c) a $332,000 increase in other expenses, (d) a $120,000 increase in advertising expenses, (e) a $117,000 increase

in interest expense, (f) a $102,000 decrease in income from loan originations, (g) a $99,000 decrease in net investment income, (h) a

$87,000 decrease in the fair value of loan commitments, (i) a $61,000 decrease in other revenues, (j) a $25,000 decrease in intersegment

revenues, and (k) a $3,000 increase in depreciation on property and equipment, which were partially offset by (i) a $2,224,000 increase

in secondary gains from investors, (ii) a $942,000 increase in the fair value of loans held for sale, (iii) a $404,000 decrease in rent

and rent related expenses, (iv) a $87,000 increase in gains on investments and other assets, (v) a $53,000 decrease in intersegment expenses,

(vi) a $34,000 decrease in costs related to funding mortgage loans, and (vii) a $24,000 increase in income tax benefit.

Results of Operations

month period ended September 30, 2024, Compared to Three month period ended September 30, 2023

revenues increased by $8,032,000, or 10.0%, to $88,274,000 for the three month period ended September 30, 2024, from $80,242,000 for

the comparable period in 2023.

Contributing to this increase in total revenues was a $5,288,000 increase in mortgage fee income, a $2,280,000

increase in gains on investments and other assets, a $1,229,000 increase in other revenues, and a $1,104,000 increase in insurance premiums

and other considerations, which were partially offset by a $1,449,000 decrease in net investment income and a $420,000 decrease in net

mortuary and cemetery sales.

fee income increased by $5,288,000, or 21.2%, to $30,224,000, for the three month period ended September 30, 2024, from $24,936,000 for

the comparable period in 2023.

This increase was primarily due to a $3,068,000 increase in the fair value of loans held for sale, a $1,324,000

increase in the fair value of loan commitments, a $539,000 increase in loan fees and interest income net of an increase in the provision

for loan loss reserve, and a $357,000 increase in secondary gains from mortgage loans sold to third-party investors into the secondary

premiums and other considerations increased by $1,104,000, or 3.8%, to $30,011,000 for the three month period ended September 30, 2024,

from $28,907,000 for the comparable period in 2023.

This increase was primarily due to an increase of $1,199,000 in renewal premiums,

which was partially offset by a decrease of $95,000 in first year premiums.

investment income decreased by $1,449,000, or 7.5%, to $17,799,000 for the three month period ended September 30, 2024, from $19,248,000

for the comparable period in 2023.

This decrease was primarily attributable to a $2,811,000 decrease in mortgage loan interest and a

$198,000 decrease in real estate income, which were partially offset by a $668,000 increase in insurance assignment income, a $618,000

increase in interest on cash and cash equivalents, a $117,000 decrease in investment expenses, a $59,000 increase in fixed maturity securities

income, a $59,000 increase in other investment income, a $34,000 increase in policy loan interest, and a $5,000 increase in equity securities

mortuary and cemetery sales decreased by $420,000, or 5.8%, to $6,814,000 for the three month period ended September 30, 2024, from $7,234,000

for the comparable period in 2023.

This decrease was primarily due to a $612,000 decrease in cemetery pre-need sales and a $113,000 decrease

in cemetery at-need sales, which were partially offset by a $305,000 increase in mortuary at-need sales.

(losses) on investments and other assets increased by $2,280,000 to $1,348,000 in net gains for the three month period ended September

30, 2024, from $932,000 in net losses for the comparable period in 2023.

This increase in gains on investments and other assets was primarily

due to a $3,414,000 increase in gains on equity securities, primarily attributable to increases in the fair value of these equity securities,

a $76,000 increase in gains on other assets, and a $35,000 increase in gains on real estate, which were partially offset by a $1,161,000

decrease in gains on mortgage loans held for investment and an $84,000 decrease in gains on fixed maturity securities.

revenues increased by $1,228,000, or 144.7%, to $2,077,000 for the nine month period ended September 30, 2024, from $849,000 for the

comparable period in 2023.

This increase was primarily attributable to a $1,350,000 legal settlement, which was partially offset by a

decrease of $107,000 in other miscellaneous revenues and a decrease of $15,000 in servicing fee revenue due to a decrease in the retention

of mortgage servicing rights.

benefits, surrenders and other policy benefits, and future policy benefits decreased by an aggregate of $2,268,000 or 8.9%, to $23,354,000

for the three month period ended September 30, 2024, from $25,622,000 for the comparable period in 2023.

This decrease was primarily

the result of a $1,108,000 decrease in death benefits, a $888,000 decrease in future policy benefits and a $272,000 decrease in surrender

and other policy benefits.

of deferred policy and pre-need acquisition costs and value of business acquired decreased by $2,193,000, or 49.0%, to $2,287,000 for

the three month period ended September 30, 2024, from $4,480,000 for the comparable period in 2023.

This decrease was primarily due to

increased payment consistency from premium-paying products.

general and administrative expenses increased by $2,587,000, or 6.1%, to $45,239,000 for the three month period ended September 30, 2024,

from $42,652,000 for the comparable period in 2023.

This increase was primarily the result of a $2,737,000 increase in commissions, a

$1,015,000 increase in personnel expenses, a $132,000 increase in costs related to funding mortgage loans, and a $21,000 increase in

depreciation on property and equipment, which were partially offset by a $933,000 decrease in other expenses, a $298,000 decrease in

rent and rent related expenses, and a $87,000 decrease in advertising expense.

expense decreased by $91,000, or 7.9%, to $1,061,000 for the three month period ended September 30, 2024, from $1,152,000 for the comparable

month period ended March 31, 2025, Compared to Three month period ended March 31, 2024

revenues increased by $1,552,000, or 1.9%, to $82,740,000 for the three month period ended March 31, 2025, from $81,188,000 for the comparable

period in 2024.

This decrease was primarily due to a decrease of $23,000 in interest expense on mortgage warehouse lines of credit for

loans held for sale and a decrease of $68,000 in interest expense on bank loans.

of goods and services sold-mortuaries and cemeteries decreased by $60,000, or 5.1%, to $1,117,000 for the three month period ended September

30, 2024, from $1,177,000 for the comparable period in 2023.

This decrease was primarily due to a decrease of $39,000 in cemetery at-need

sales and a decrease of $27,000 in mortuary at-need sales, which were partially offset by an increase of $6,000 in cemetery pre-need

summary total benefits and expenses were $73,059,000, or 82.8% of total revenues, for the three month period ended September 30, 2024,

as compared to $75,083,000, or 93.6% of total revenues, for the comparable period in 2023.

month period ended September 30, 2024, Compared to Nine month period ended September 30, 2023

revenues increased by $11,664,000, or 4.8%, to $255,253,000 for the nine month period ended September 30, 2024, from $243,589,000 for

the comparable period in 2023.

Contributing to this increase in total revenues was a $4,671,000 increase in mortgage fee income, a $4,136,000

increase in insurance premiums and other considerations, a $2,645,000 increase in gains on investments and other assets, a $959,000 increase

in other revenues, and a $658,000 increase in net mortuary and cemetery sales, which were partially offset by a $1,405,000 decrease in

net investment income.

fee income increased by $4,671,000, or 6.1%, to $81,675,000, for the nine month period ended September 30, 2024, from $77,004,000 for

Contributing to this increase in total revenues was a $2,977,000 increase in mortgage fee income, a $352,000 increase

in net mortuary and cemetery sales, and a $122,000 increase in other revenues, which were partially offset by a $1,083,000 decrease in

gains on investments and other assets, a $744,000 decrease in net investment income, and a $72,000 decrease in insurance premiums and

other considerations.

fee income increased by $2,977,000, or 13.6%, to $24,809,000, for the three month period ended March 31, 2025, from $21,832,000 for the

comparable period in 2024.

This increase was primarily due to a $2,224,000 increase in secondary gains from mortgage loans sold to third-party

investors into the secondary market and a $942,000 increase in the fair value of loans held for sale, which were partially offset by

a $102,000 decrease in loan fees and interest income net of an increase in the provision for loan loss reserve and an $87,000 decrease

in the fair value of loan commitments.

premiums and other considerations decreased by $72,000, or 0.2%, to $29,780,000 for the three month period ended March 31, 2025, from

$29,852,000 for the comparable period in 2024.

This decrease was primarily due to a decrease of $350,000 in first year premiums, which

was partially offset by an increase of $278,000 in renewal premiums.

investment income decreased by $744,000, or 3.7%, to $19,203,000 for the three month period ended March 31, 2025, from $19,947,000 for

the comparable period in 2024.

This increase was primarily due to a $4,572,000 increase in the fair value of loans held for sale, a $1,807,000

increase in loan fees and interest income net of an increase in the provision for loan loss reserve, and a $1,789,000 increase in the

fair value of loan commitments, which were partially offset by a $3,497,000 decrease in secondary gains from mortgage loans sold to third-party

investors into the secondary market due to the decline in origination activity because of increasing interest rates.

premiums and other considerations increased by $4,136,000, or 4.8%, to $89,824,000 for the nine month period ended September 30, 2024,

from $85,688,000 for the comparable period in 2023.

This increase was primarily due to an increase of $2,576,000 in first year premiums

and an increase of $1,560,000 in renewal premiums.

investment income decreased by $1,405,000, or 2.5%, to $55,790,000 for the nine month period ended September 30, 2024, from $57,195,000

This decrease was primarily attributable to a $850,000 decrease in mortgage loan interest, a $555,000

decrease in real estate income, a $288,000 decrease in interest on cash and cash equivalents, a $57,000 decrease in policy loan interest,

and a $37,000 decrease in other investment income, which were partially offset by a $656,000 increase in insurance assignment income,

a $261,000 increase in fixed maturity securities income, a $102,000 decrease in investment expenses, and a $24,000 increase in equity

securities income.

mortuary and cemetery sales increased by $352,000, or 5.1%, to $7,300,000 for the three month period ended March 31, 2025, from $6,948,000

for the comparable period in 2024.

This decrease was primarily attributable to a $4,930,000 decrease in mortgage loan interest and a

$1,660,000 decrease in real estate income, which were partially offset by a $2,457,000 increase in interest on cash and cash equivalents,

a $1,401,000 increase in insurance assignment income, a $652,000 increase in fixed maturity securities income, a $375,000 decrease in

investment expenses, a $116,000 increase in other investment income, a $116,000 increase in policy loan interest, and a $68,000 increase

in equity securities income.

mortuary and cemetery sales increased by $658,000, or 3.2%, to $21,532,000 for the nine month period ended September 30, 2024, from $20,874,000

This increase was primarily due to a $146,000 increase in cemetery pre-need sales, a $176,000 increase

in mortuary at-need sales, and a $30,000 increase in cemetery at-need sales.

(losses) on investments and other assets decreased by $1,083,000 to $586,000 for the three month period ended March 31, 2025, from $1,669,000

for the comparable period in 2024.

This increase was primarily due to a $445,000 increase in mortuary at-need sales and a $344,000 increase

in cemetery pre-need sales, which were partially offset by a $131,000 decrease in cemetery at-need sales.

(losses) on investments and other assets increased by $2,645,000 to $2,640,000 in net gains for the nine month period ended September

30, 2024, from $5,000 in net losses for the comparable period in 2023.

This increase in gains on investments and other assets was primarily

due to a $3,664,000 increase in gains on equity securities mostly attributable to increases in the fair value of these equity securities,

a $163,000 increase in gains on real estate, and a $121,000 increase in gains on fixed maturity securities, which were partially offset

by a $1,161,000 decrease in gains on mortgage loans held for investment and a $142,000 decrease in gains on other assets.

revenues increased by $959,000, or 33.9%, to $3,792,000 for the nine month period ended September 30, 2024, from $2,833,000 for the comparable

This decrease in gains on investments and other assets was primarily due to a $1,094,000 decrease

in gains on equity securities, primarily attributable to decreases in the fair value of these equity securities, a $103,000 decrease

in gains on other assets, and a $31,000 decrease in gains on fixed maturity securities, which were partially offset by a $145,000 increase

in gains on real estate.

revenues increased by $122,000, or 13.0%, to $1,062,000 for the three month period ended March 31, 2025, from $940,000 for the comparable

period in 2024.

This increase was primarily attributable to a $1,350,000 legal settlement, which was partially offset by a decrease of

$207,000 in other miscellaneous revenues and a decrease of $184,000 in servicing fee revenue due to a decrease in the retention of mortgage

servicing rights.

This increase was primarily due to an increase of $147,000 in other miscellaneous revenues and a decrease of $25,000

in servicing fee revenue due to a decrease in the retention of mortgage servicing rights.

benefits, surrenders and other policy benefits, and future policy benefits decreased by an aggregate of $40,000 or 0.2%, to $26,235,000

for the nine month period ended September 30, 2024, from $76,394,000 for the comparable period in 2023.

for the three month period ended March 31, 2025, from $26,275,000 for the comparable period in 2024.

This decrease was primarily the

result of a $3,458,000 decrease in death benefits and a $97,000 increase in surrender and other policy benefits, which were partially

offset by a $1,117,000 increase in future policy benefits.

of deferred policy and pre-need acquisition costs and value of business acquired decreased by $2,283,000, or 16.8%, to $11,332,000 for

the nine month period ended September 30, 2024, from $13,615,000 for the comparable period in 2023.

This decrease was primarily due to

increased payment consistency from premium-paying products.

general and administrative expenses decreased by $2,100,000, or 1.6%, to $128,952,000 for the nine month period ended September 30, 2024,

result of a $358,000 decrease in future policy benefits and a $14,000 decrease in surrender and other policy benefits which were partially

offset by a $332,000 increase in death benefits.

of deferred policy and pre-need acquisition costs and value of business acquired decreased by $47,000, or 1.0%, to $4,697,000 for the

three month period ended March 31, 2025, from $4,744,000 for the comparable period in 2024.

This decrease was primarily due to increased

payment consistency from premium-paying products.

general and administrative expenses increased by $5,616,000, or 14.7%, to $43,864,000 for the three month period ended March 31, 2025,

from $38,248,000 for the comparable period in 2024.

This decrease was primarily the result of a $2,831,000 decrease in other expenses,

a $1,207,000 decrease in rent and rent related expenses, a $798,000 decrease in personnel expenses, a $569,000 decrease in costs related

to funding mortgage loans, and a $482,000 decrease in advertising expense, which were partially offset by a $3,761,000 increase in commissions

and a $26,000 increase in depreciation in property and equipment.

expense decreased by $858,000, or 21.3%, to $3,162,000 for the nine month period ended September 30, 2024, from $4,020,000 for the comparable

This increase was primarily the result of a $2,457,000 increase in commissions, a

$2,327,000 increase in personnel expenses, a $1,115,000 increase in other expenses, a $136,000 increase in advertising expense, and a

$28,000 increase in depreciation on property and equipment, which were partially offset by a $413,000 decrease in rent and rent related

expenses and a $34,000 decrease in costs related to funding mortgage loans.

expense increased by $92,000, or 9.0%, to $1,119,000 for the three month period ended March 31, 2025, from $1,027,000 for the comparable

period in 2024.

This decrease was primarily due to a decrease of $310,000 in interest expense on mortgage warehouse lines of credit for

loans held for sale and a decrease of $548,000 in interest expense on bank loans.

of goods and services sold-mortuaries and cemeteries increased by $12,000, or 0.3%, to $3,627,000 for the three month period ended September

This increase was primarily due to an increase of $117,000 in interest expense on mortgage warehouse lines of credit

for loans held for sale, which was partially offset by a decrease of $25,000 in interest expense on bank loans.

of goods and services sold-mortuaries and cemeteries decreased by $21,000, or 1.6%, to $1,253,000 for the three month period ended March

31, 2025, from $1,274,000 for the comparable period in 2024.

This increase was primarily due to an increase of $74,000 in cemetery pre-need

sales and an increase of $31,000 in cemetery at-need sales, which were partially offset by a decrease of $93,000 in mortuary at-need

summary total benefits and expenses were $221,030,000, or 86.6% of total revenues, for the nine month period ended September 30, 2024,

as compared to $228,696,000, or 93.9% of total revenues, for the comparable period in 2023.

This decrease was primarily due to a decrease of $40,000 in at-need sales,

which was partially offset by an increase of $19,000 in pre-need sales.

summary total benefits and expenses were $77,169,000, or 93.3% of total revenues, for the three month period ended March 31, 2025, as

compared to $71,569,000, or 88.2% of total revenues, for the comparable period in 2024.

and Capital Resources

8 unchanged sentences

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

the nine month periods ended September 30, 2024 and 2023, the Company’s operations provided cash of approximately $34,894,000 and

of approximately $18,384,000, respectively.

The increase in cash provided by operations was due primarily to the increase in net earnings.

of March 31, 2025, the Company’s subsidiary SecurityNational Mortgage was in compliance with all covenants under its warehouse

lines of credit.

The Company has also performed an analysis of the funding capacities of both internal and external sources and has determined

that there are sufficient funds to continue its business model.

The Company continues to negotiate other warehouse lines of credit with

other lenders.

the three month periods ended March 31, 2025 and 2024, the Company’s operations provided cash of approximately $9,586,000 and of

approximately $25,077,000, respectively.

The decrease in cash provided by operations was due primarily to the decrease in net earnings

and in loans held for sale.

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

19 unchanged sentences

Bonds owned by the insurance

subsidiaries amounted to $326,914,000 (at estimated fair value) and $362,663,000 (at estimated fair value) as of September 30, 2024 and

December 31, 2023, respectively.

This represented 35.4% and 38.7% of the total investments of the Company as of September 30, 2024 and

December 31, 2023, 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 rating bonds.

As of September 30, 2024, 2.1%

(or $7,232,000) and as of December 31, 2023, 1.8% (or $6,954,000) of the Company’s total bond investments were invested in bonds

in rating categories three through six, which are considered non-investment grade.

subsidiaries amounted to $353,780,000 (at estimated fair value) and $348,774,000 (at estimated fair value) as of March 31, 2025 and December

31, 2024, respectively.

This represented 35.5% and 38.0% of the total investments of the Company as of March 31, 2025 and December 31,

2024, 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, 2025, 1.8% (or $6,473,000)

and as of December 31, 2024, 2.4% (or $8,431,000) of the Company’s total bond investments were invested in bonds in rating categories

three through six, which are considered non-investment grade.

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 September 30,

As of March 31, 2025

and December 31, 2024, the life insurance subsidiaries were in compliance with the regulatory criteria.

Company’s total capitalization of stockholders’ equity, bank and other loans payable was $453,312,000 as of September 30,

Company’s total capitalization of stockholders’ equity, bank and other loans payable was $469,317,000 as of March 31, 2025,

as compared to $445,758,000 as of December 31, 2024.

2 unchanged sentences

Stockholders’ equity as a percent of total capitalization

was 76.4% and 74.8% as of September 30, 2024 and December 31, 2023, respectively.

was 73.8% and 76.1% as of March 31, 2025 and December 31, 2024, respectively.

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 $121,485,000 and $120,216,000

as of September 30, 2024, and December 31, 2023, respectively.

The life insurance subsidiaries cannot pay a dividend to their parent

company without the approval of state insurance regulatory authorities.

as of March 31, 2025, and December 31, 2024, 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.

1 unchanged sentence

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