What changed in this filing

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Item 1. Financial Statements

2025-08-14 compared with 2025-05-15 · 1635 added, 1361 removed, 1205 unchanged (71% of the section changed)

Fixed maturity securities, available for sale, at estimated fair value (amortized cost of $ 376,903,025 and $ 376,012,071 for 2025 and 2024, respectively;

Financial Statements.

Fixed maturity

securities, available for sale, at estimated fair value (amortized cost of $ 393,340,165 and $ 376,012,071 for 2025 and 2024,

respectively;

net of allowance for credit losses of $ 486,986 and $ 420,993 for 2025 and 2024, respectively)

1 unchanged sentence

$ 366,546,129

Equity securities at estimated fair value (cost of $ 11,548,300 and $ 11,386,454 for 2025 and 2024, respectively)

Mortgage loans held for investment (net of allowance for credit losses of $ 2,008,592 and $ 1,885,390 for 2025 and 2024, respectively)

Real estate held for investment (net of accumulated depreciation of $ 32,853,123 and $ 31,419,539 for 2025 and 2024, respectively)

Equity securities at estimated

fair value (cost of $ 11,657,063 and $ 11,386,454 for 2025 and 2024, respectively)

Mortgage loans held for

investment (net of allowance for credit losses of $ 2,640,744 and $ 1,885,390 for 2025 and 2024, respectively)

Real estate held for investment

(net of accumulated depreciation of $ 34,288,777 and $ 31,419,539 for 2025 and 2024, respectively)

Real estate held for sale

Other investments and policy loans (net of allowance for credit losses of $ 1,517,783 and $ 1,536,926 for 2025 and 2024, respectively)

Accrued investment income

Other investments and policy

loans (net of allowance for credit losses of $ 1,481,032 and $ 1,536,926 for 2025 and 2024, respectively)

investment income

Total investments

1,042,891,503

Cash and cash equivalents

Loans held for sale at estimated fair value

Receivables (net of allowance for credit losses of $ 1,632,099 and $ 1,678,531 for 2025 and 2024, respectively)

Restricted assets (including $ 12,910,825 and $ 12,323,535 for 2025 and 2024 respectively, at estimated fair value)

Cemetery perpetual care trust investments (including $ 5,841,653 and $ 5,689,706 for 2025 and 2024, respectively, at estimated fair value)

Receivables (net of allowance for credit losses

of $ 1,491,043 and $ 1,678,531 for 2025 and 2024, respectively)

Restricted assets (including $ 13,778,778 and

$ 12,323,535 for 2025 and 2024 respectively, at estimated fair value)

Cemetery perpetual care trust investments (including

$ 6,043,952 and $ 5,689,706 for 2025 and 2024, respectively, at estimated fair value)

Receivable from reinsurers

Cemetery land and improvements

Deferred policy and pre-need contract acquisition costs

Deferred policy and pre-need contract acquisition

Mortgage servicing rights, net

3 unchanged sentences

$ 1,489,807,214

See accompanying notes to condensed

consolidated financial statements (unaudited).

SECURITY NATIONAL

FINANCIAL CORPORATION

AND SUBSIDIARIES

CONDENSED CONSOLIDATED

BALANCE SHEETS (Continued)

Liabilities and Stockholders’ Equity

Future policy benefits and unpaid claims

accompanying notes to condensed consolidated financial statements (unaudited).

NATIONAL FINANCIAL CORPORATION

CONSOLIDATED BALANCE SHEETS (Continued)

Liabilities and Stockholders’

Future policy benefits and unpaid

$ 959,492,863

2 unchanged sentences

Bank and other loans payable

Deferred pre-need cemetery and mortuary contract revenues

Deferred pre-need cemetery and mortuary contract

Cemetery perpetual care obligation

7 unchanged sentences

5,000,000 shares authorized;

none issued or

none issued or outstanding

common stock - $ 2.00 par value;

40,000,000 shares authorized;

21,321,739 shares issued and outstanding as of March 31,

2025 and 21,255,006 shares issued and outstanding as of December 31, 2024

non-voting common stock - $ 1.00 par value;

22,391,637 shares issued and outstanding as of June 30, 2025 and 22,321,422 (1) shares issued and outstanding as of December

non-voting common stock - $ 1.00 par

5,000,000 shares authorized;

none issued or

none issued or outstanding

convertible common stock - $ 2.00 par value;

6,000,000 shares authorized;

3,417,170 shares issued and outstanding as of

March 31, 2025 and 3,321,833 shares issued and outstanding as of December 31, 2024

6,000,000 shares

3,587,614 shares issued and outstanding as of June 30, 2025 and 3,492,672 (1) shares issued and outstanding as

of December 31, 2024

Common stock, value

Additional paid-in capital

Accumulated other comprehensive loss, net of taxes

Accumulated other comprehensive loss, net of

( 1,830,143 )

1 unchanged sentence

Retained earnings

Treasury stock at cost - 1,037,568 Class A shares and 99,623 Class C shares as of March 31, 2025;

1,025,784 Class A shares and 99,623 Class C shares as of December 31, 2024

Treasury stock at cost - 1,161,072 Class A

shares and 104,604 Class C shares as of June 30, 2025;

and 1,081,281 (1) Class A shares and 104,604 (1) Class C shares

as of December 31, 2024

( 9,485,613 )

( 8,477,686 )

Total stockholders’ equity

Total Liabilities and Stockholders’ Equity

Total stockholders’

Liabilities and Stockholders’ Equity

$ 1,543,978,107

$ 1,489,807,214

See accompanying notes to condensed

consolidated financial statements (unaudited).

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

accompanying notes to condensed consolidated financial statements (unaudited).

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

CONDENSED CONSOLIDATED

STATEMENTS OF EARNINGS

Three Months Ended March 31,

CONSOLIDATED STATEMENTS OF EARNINGS

Months Ended June 30,

Mortgage fee income

2 unchanged sentences

Net mortuary and cemetery sales

Gains on investments and other assets

Gains (losses) on investments and other assets

Total revenues

3 unchanged sentences

Increase in future policy benefits

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

Amortization of deferred policy and pre-need

acquisition costs and value of business acquired

Selling, general and administrative expenses:

Rent and rent related

Depreciation on property and equipment

Costs related to funding mortgage loans

Depreciation on property

and equipment

Costs related to funding

mortgage loans

Interest expense

Cost of goods and services sold-mortuaries and cemeteries

Cost of goods and services

sold-mortuaries and cemeteries

Total benefits and expenses

3 unchanged sentences

( 2,118,044 )

Net earnings per

Class A Equivalent common share (1)

Net earnings per

Class A Equivalent common share-assuming dilution (1)

Weighted-average Class A equivalent

common shares outstanding (1)

Weighted-average Class A equivalent

common shares outstanding-assuming dilution (1)

(1) Net earnings per share amounts have been adjusted retroactively for the effect of annual

stock dividends.

The weighted-average shares outstanding includes the weighted-average Class A common shares and the weighted-average

Class C common shares determined on an equivalent Class A common stock basis.

Net earnings per common share represent net earnings per

equivalent Class A common share.

See accompanying

notes to condensed consolidated financial statements (unaudited).

SECURITY NATIONAL

FINANCIAL CORPORATION

AND SUBSIDIARIES

CONDENSED CONSOLIDATED

STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended March 31,

( 3,062,866 )

( 4,262,833 )

earnings per Class A Equivalent common share (1)

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

Weighted-average Class

A equivalent common shares outstanding (1)

Weighted-average Class

A equivalent common shares outstanding-assuming dilution (1)

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

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.

accompanying notes to condensed consolidated financial statements (unaudited).

NATIONAL FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Months Ended June 30,

Other comprehensive income:

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

Unrealized gains (losses)

on fixed maturity securities available for sale

( 1,782,140 )

Unrealized gains (losses) on restricted

Unrealized gains

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

Other comprehensive income (loss), before income tax

Unrealized losses on restricted

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

comprehensive income (loss), before income tax

( 1,787,548 )

Income tax (expense) benefit

Other comprehensive income (loss), net of income tax

( 1,361,984 )

Other comprehensive

income (loss), net of income tax

( 1,412,227 )

Comprehensive income

(1) Fixed maturity

securities available for sale

See accompanying

notes to condensed consolidated financial statements (unaudited).

SECURITY NATIONAL

FINANCIAL CORPORATION

AND SUBSIDIARIES

CONDENSED CONSOLIDATED

STATEMENTS OF STOCKHOLDERS’ EQUITY

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

maturity securities available for sale

accompanying notes to condensed consolidated financial statements (unaudited).

NATIONAL FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

A Common Stock

C Common Stock

Paid-in Capital

Other Comprehensive Income (Loss)

Months Ended June 30, 2025

A Common Stock

C Common Stock

Paid-in Capital

Other Comprehensive Income (Loss)

December 31, 2024

14 unchanged sentences

$ 346,493,686

Three Months Ended March 31, 2024

Class A Common Stock

Class C Common Stock

Additional Paid-in Capital

Accumulated Other Comprehensive Income (Loss)

Retained Earnings

Treasury Stock

Other comprehensive income

Stock-based compensation expense

Vesting of restricted stock units

Sale of treasury stock

Purchase of treasury stock

Conversion Class C to Class A

Stock dividends

( 11,160,040 )

June 30, 2025

$ ( 1,830,143 )

$ 225,043,793

$ ( 9,485,613 )

$ 354,754,718

Months Ended June 30, 2024

A Common Stock

C Common Stock

Paid-in Capital

Other Comprehensive Income (Loss)

December 31, 2023

3 unchanged sentences

$ 312,895,219

Other comprehensive loss

Stock-based compensation expense

Vesting of restricted stock units

Sale of treasury stock

Purchase of treasury stock

Conversion Class C to

March 31, 2024

$ ( 7,780,656 )

2 unchanged sentences

$ 320,103,974

$ ( 7,780,656 )

$ 214,452,895

$ ( 5,336,081 )

$ 320,103,974

Other comprehensive loss

Other comprehensive income (loss )

Stock-based compensation expense

Exercise of stock options

Vesting of restricted stock units

1 unchanged sentence

Purchase of treasury stock

( 1,588,058 )

Conversion Class C to Class A

March 31, 2024

Stock dividends

( 8,153,824 )

June 30, 2024

$ ( 8,297,785 )

5 unchanged sentences

$ ( 6,671,931 )

SECURITY NATIONAL

FINANCIAL CORPORATION

AND SUBSIDIARIES

CONDENSED CONSOLIDATED

STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

Cash flows from operating activities:

Net cash provided by operating activities

Cash flows from investing activities:

$ 325,765,993

NATIONAL FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

Months Ended June 30,

Cash flows from operating

cash provided by operating activities

Cash flows from investing

Purchases of fixed maturity securities

1 unchanged sentence

( 34,437,326 )

Sales, calls and maturities of fixed maturity securities

Sales, calls and maturities of fixed maturity

Purchases of equity securities

3 unchanged sentences

Purchases of restricted assets

( 2,397,575 )

( 1,116,336 )

Sales, calls and maturities of restricted assets

Purchases of cemetery perpetual care trust investments

Sales, calls and maturities of perpetual care trust investments

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

Purchases of cemetery perpetual care trust

Sales, calls and maturities of perpetual care

trust investments

Mortgage loans held for investment, other investments

and policy loans made

( 446,677,580 )

( 364,394,871 )

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

Payments received for mortgage loans held for

investment, other investments and policy loans

Purchases of property and equipment

4 unchanged sentences

Sales of real estate

Net cash provided by (used in) investing activities

cash provided by (used in) investing activities

( 72,442,859 )

Cash flows from financing activities:

Cash flows from financing

Investment contract receipts

4 unchanged sentences

Purchases of treasury stock

( 1,203,684 )

( 1,629,135 )

Repayment of bank loans

Net change in warehouse line borrowings for loans held for sale

Net cash provided by (used in) financing activities

( 18,012,268 )

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

Proceeds from bank loans

Net change in warehouse

line borrowings for loans held for sale

( 1,114,584 )

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

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

cash provided by (used in) financing activities

( 4,726,306 )

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

( 57,699,157 )

Supplemental Disclosure of Cash Flow Information:

Cash, cash equivalents,

restricted cash and restricted cash equivalents at beginning of period

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

$ 156,685,547

Supplemental Disclosure

of Cash Flow Information:

Cash paid during the year for:

Income taxes (net of refunds)

Non Cash Operating, Investing and Financing Activities:

Transfer from fixed maturity securities available for sale to other investments

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

Non Cash Operating, Investing

and Financing Activities:

Transfer from fixed maturity securities available

for sale to other investments

Right-of-use assets obtained in exchange for

operating lease liabilities

Benefit plans funded with treasury stock

Loans held for sale foreclosed into real estate held for sale

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

SECURITY NATIONAL

FINANCIAL CORPORATION

AND SUBSIDIARIES

CONDENSED CONSOLIDATED

STATEMENTS OF CASH FLOWS (Continued)

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:

Loans held for sale foreclosed into real estate

held for sale

Transfer of loans held for sale to mortgage

loans held for investment

NATIONAL FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

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:

Cash and cash equivalents

$ 143,632,984

$ 150,930,786

Restricted assets

Cemetery perpetual care trust investments

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

$ 145,292,245

Cemetery perpetual care

trust investments

Total cash, cash equivalents,

restricted cash and restricted cash equivalents

$ 156,685,547

1 unchanged sentence

$ 156,685,547

$ 164,550,756

See accompanying

notes to condensed consolidated financial statements (unaudited).

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2025 (Unaudited)

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

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, 2024, 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 period ended March 31, 2025 are not necessarily

indicative of the results that may be expected for the year ending December 31, 2025.

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

Accordingly, significant estimates used in the preparation of the Company’s financial statements may be subject to significant

adjustments in future periods.

accompanying notes to condensed consolidated financial statements (unaudited).

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2025 (Unaudited)

of Presentation

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, 2024, 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 and six month periods ended June 30,

2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

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

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;

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 liability for future policy benefits;

those used in determining the value of loans held for sale;

and those used in determining loan loss

Although some variability is inherent in these estimates, management believes the amounts provided are fairly stated in all material

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2025 (Unaudited)

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.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2025 (Unaudited)

2) Recent Accounting Pronouncements

2 unchanged sentences

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

— 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.

“Financial Services – Insurance (Topic 944):

Effective Date and Early Application,”

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

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.

The Company will adopt the standard commencing with its annual reporting

period ending December 31, 2025.

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

identification of cohorts, system updates, and design.

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

and consulted external system providers as part of the implementation.

The adoption of this guidance is expected to have an impact on

its financial position, results of operations, and disclosures, as well as systems, processes and controls.

The Company continues to evaluate

the impact of the new guidance on its consolidated financial statements.

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.

The Company will adopt the standard commencing with

its annual reporting period ending December 31, 2025.

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

standard, including the identification of cohorts, system updates, and design.

The Company has engaged its team of actuaries, accountants,

and systems specialists and consulted external system providers as part of the implementation.

The adoption of this guidance is expected

to have an impact on its financial position, results of operations, and disclosures, as well as systems, processes and controls.

Company continues to evaluate the impact of the new guidance on its consolidated financial statements.

“Income Taxes (Topic 740):

Improvements to Income Tax Disclosures” — Issued in December 2023, ASU 2023-09 requires

that public business entities, on an annual basis:

(i) disclose specific categories in the rate reconciliation and (ii) provide additional

information for reconciling items that meet a quantitative threshold.

In addition, the amendments in this update require that all entities

disclose on an annual basis the following information about income taxes paid:

(i) the amount of income taxes paid (net of refunds received)

disaggregated by federal (national), state, and foreign taxes and (ii) the amount of income taxes paid (net of refunds received) disaggregated

by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5 percent of total income

taxes paid (net of refunds received).

ASU 2023-09 is effective for the Company for the annual reporting periods beginning January 1, 2025.

Improvements to Income Tax Disclosures” — Issued in December 2023, ASU

2023-09 requires that public business entities, on an annual basis:

(i) disclose specific categories in the rate reconciliation and (ii)

provide additional information for reconciling items that meet a quantitative threshold.

In addition, the amendments in this update require

that all entities disclose on an annual basis the following information about income taxes paid:

(i) the amount of income taxes paid

(net of refunds received) disaggregated by federal (national), state, and foreign taxes and (ii) the amount of income taxes paid (net

of refunds received) disaggregated by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater

than 5 percent of total income taxes paid (net of refunds received).

ASU 2023-09 is effective for the Company for the annual reporting

periods beginning January 1, 2025.

The Company will adopt the standard commencing with its annual reporting period ending December 31,

The Company does not anticipate

that the adoption of ASU 2023-09 will have a material impact on the consolidated financial statements.

The Company does not anticipate that the adoption of ASU 2023-09 will have a material impact on the consolidated financial statements.

“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.

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

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

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

ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning

2 unchanged sentences

The Company is in the process of estimating the potential impact of the new guidance 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.

NATIONAL FINANCIAL CORPO RATION

AND SUBSIDIARIES

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.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

1 unchanged sentence

3) Investments

The Company’s investments as of March 31, 2025

are summarized as follows:

Company’s investments as of June 30, 2025 are summarized as follows:

of Investments

Amortized Cost

Gross Unrealized Gains

Gross Unrealized Losses (1)

Allowance for Credit Losses

Estimated Fair Value

March 31, 2025:

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

Treasury securities and obligations of U.S.

Unrealized Gains

Unrealized Losses (1)

for Credit Losses

June 30, 2025:

Fixed maturity securities, available for sale,

at estimated fair value:

securities and obligations of U.S.

Government agencies

$ ( 247,044 )

Obligations of states and political subdivisions

Corporate securities including public utilities

Obligations of states and

political subdivisions

Corporate securities including

public utilities

( 4,397,245 )

1 unchanged sentence

( 3,743,849 )

Redeemable preferred stock

Total fixed maturity securities available for sale

preferred stock

fixed maturity securities available for sale

$ 393,340,165

4 unchanged sentences

Common stock:

Industrial, miscellaneous and all other

Industrial, miscellaneous

and all other

$ ( 606,714 )

Total equity securities at estimated fair value

equity securities at estimated fair value

$ ( 606,714 )

Mortgage loans held for investment at amortized cost:

Mortgage loans held for investment at amortized

Residential construction

Unamortized deferred loan fees, net

Unamortized deferred

loan fees, net

( 2,230,234 )

Allowance for credit losses

Allowance for credit

( 2,640,744 )

Net discounts

Total mortgage loans held for investment

Total mortgage loans

held for investment

$ 324,403,996

Real estate held for investment - net of accumulated depreciation:

Total real estate held for investment

Real estate held for investment - net of accumulated

depreciation:

Total real estate

held for investment

$ 213,045,016

Real estate held for sale:

Total real estate held for sale

Other investments and policy loans at amortized cost:

Total real estate

held for sale

Other investments and policy loans at amortized

Insurance assignments

Federal Home Loan Bank stock (2)

Federal Home Loan Bank

Other investments

1 unchanged sentence

( 1,481,032 )

Total other investments and policy loans

Accrued investment income

Total other investments

and policy loans

Accrued investment

Total investments

$ 1,042,891,503

(1) Gross unrealized

losses are net of allowance for credit losses

(2) Includes $ 580,700

of Membership stock and $ 49,500 of Activity stock attributable to short-term borrowings and letters of credit.

unrealized losses are net of allowance for credit losses

$ 581,600 of Membership stock and $ 743,200 of Activity stock attributable to short-term borrowings

and letters of credit.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

1 unchanged sentence

30, 2025 (Unaudited)

Investments (Continued)

The Company’s investments as of December 31,

2024 are summarized as follows:

Amortized Cost

Gross Unrealized Gains

Gross Unrealized Losses (1)

Allowance for Credit Losses

Estimated Fair Value

December 31, 2024:

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

Treasury securities and obligations of U.S.

3) Investments

Company’s investments as of December 31, 2024 are summarized as follows:

Unrealized Gains

Unrealized Losses (1)

for Credit Losses

Fixed maturity securities, available for sale,

at estimated fair value:

securities and obligations of U.S.

Government agencies

$ ( 486,976 )

Obligations of states and political subdivisions

Corporate securities including public utilities

Obligations of states and

political subdivisions

Corporate securities including

public utilities

( 6,922,871 )

2 unchanged sentences

Redeemable preferred stock

Total fixed maturity securities available for sale

fixed maturity securities available for sale

$ 376,012,071

4 unchanged sentences

Common stock:

Industrial, miscellaneous and all other

Industrial, miscellaneous

and all other

$ ( 591,340 )

Total equity securities at estimated fair value

equity securities at estimated fair value

$ ( 591,340 )

Mortgage loans held for investment at amortized cost:

Mortgage loans held for investment at amortized

Residential construction

Unamortized deferred loan fees, net

Unamortized deferred

loan fees, net

( 2,082,241 )

Allowance for credit losses

Allowance for credit

( 1,885,390 )

Net discounts

Total mortgage loans held for investment

Total mortgage loans

held for investment

$ 301,747,358

Real estate held for investment - net of accumulated depreciation:

Total real estate held for investment

Real estate held for investment - net of

accumulated depreciation:

Total real estate

held for investment

$ 197,693,338

Real estate held for sale:

Total real estate held for sale

Other investments and policy loans at amortized cost:

Total real estate

held for sale

Other investments and policy loans at amortized

Insurance assignments

Federal Home Loan Bank stock (2)

Federal Home Loan Bank

Other investments

1 unchanged sentence

( 1,536,926 )

Total policy loans and other investments

Accrued investment income

Total policy loans and

other investments

Accrued investment

Total investments

$ 966,390,748

(1) Gross unrealized

losses are net of allowance for credit losses

(2) Includes $ 553,900

of Membership stock and $ 1,851,000 of Activity stock due to short-term advances and letters of credit.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2025 (Unaudited)

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, 2025, 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, 2025 and December 31, 2024.

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, 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.

unrealized losses are net of allowance for credit losses

$ 553,900 of Membership stock and $ 1,851,000 of Activity stock due to short-term advances

and letters of credit.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2025 (Unaudited)

3) Investments

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 June 30, 2025, other than investments

issued or guaranteed by the United States Government.

Maturity Securities

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

of June 30, 2025 and December 31, 2024.

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

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

Unrealized Losses for More than Twelve Months

Total Unrealized Loss

Combined Fair Value

March 31, 2025

Treasury securities and obligations of U.S.

Losses for Less than Twelve Months

Losses for More than Twelve Months

Unrealized Loss

June 30, 2025

Treasury securities and obligations

Government agencies

5 unchanged sentences

December 31, 2024

Treasury securities and obligations of U.S.

Treasury securities and obligations of

Government agencies

4 unchanged sentences

$ 221,767,792

Relevant holdings were comprised of 585 securities

with fair values aggregating 95.0 % of the aggregate amortized cost as of March 31, 2025, compared to 706 securities with fair values aggregating

94.9 % of the aggregate amortized cost as of December 31, 2024.

A credit loss provision of $ 86,307 and of $ 96,000 have been recognized

for the three month periods ended March 31, 2025 and 2024, 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.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2025 (Unaudited)

Investments (Continued)

holdings were comprised of 477 securities with fair values aggregating 94.7 % of the aggregate amortized cost as of June 30, 2025, compared

to 706 securities with fair values aggregating 94.9 % of the aggregate amortized cost as of December 31, 2024.

A credit loss release of

$ 20,313 and of $ 16,289 have been recognized for the three month periods ended June 30, 2025 and 2024, respectively.

A credit loss provision

of $ 65,993 and of $ 79,711 have been recognized for the six month periods ended June 30, 2025 and 2024, respectively.

Credit losses are

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

Other unrealized losses

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

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2025 (Unaudited)

3) Investments

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

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 interest and principal 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

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2025 (Unaudited)

Investments (Continued)

Credit Quality Indicators

Based on the NAIC securities designations, the Company

had 98.2 % and 97.7 % of its fixed maturity securities rated investment grade as of March 31, 2025 and December 31, 2024, 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.

Company evaluates its fixed maturity securities classified as available for sale on a quarterly basis to identify any potential credit

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 interest and principal 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.

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.

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.

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.

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.

due on available for sale fixed maturities that are deemed to be uncollectible are written off and removed from the allowance for credit

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.

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.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2025 (Unaudited)

3) Investments

Quality Indicators

on the NAIC securities designations, the Company had 98.1 % and 97.7 % of its fixed maturity securities rated investment grade as of June

30, 2025 and December 31, 2024, 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, 2025

December 31, 2024

Estimated Fair

$ 201,287,345

6 unchanged sentences

$ 366,296,129

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, 2025 and 2024:

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

sale for the three month periods ended June 30, 2025 and 2024:

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

Three Months Ended March 31, 2025

Months Ended June 30, 2025

Treasury securities and obligations of U.S.

Government agencies

Obligations of states and political subdivisions

Corporate securities including public utilities

Mortgage-backed securities

of states and political subdivisions

securities including public utilities

Mortgage-backed

Beginning balance - March 31, 2025

Additions for credit losses

not previously recorded

Change in allowance on

securities with previous allowance

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

Ending Balance - June 30, 2025

Months Ended June 30, 2024

Treasury securities and obligations of U.S.

Government agencies

of states and political subdivisions

securities including public utilities

Mortgage-backed

Beginning balance - March 31, 2024

Additions for credit losses

not previously recorded

Change in allowance on

securities with previous allowance

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

Ending Balance - June 30, 2024

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2025 (Unaudited)

3) Investments

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

sale for the six month periods ended June 30, 2025 and 2024:

Months Ended June 30, 2025

Treasury securities and obligations of U.S.

Government agencies

of states and political subdivisions

securities including public utilities

Mortgage-backed

Beginning balance - December 31, 2024

Additions for credit losses not previously recorded

Change in allowance on securities with previous allowance

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, 2025

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2025 (Unaudited)

Investments (Continued)

Three Months Ended March 31, 2024

Additions for credit losses

not previously recorded

Change in allowance on

securities with previous allowance

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

Ending Balance - June 30, 2025

Months Ended June 30, 2024

Treasury securities and obligations of U.S.

Government agencies

Obligations of states and political subdivisions

Corporate securities including public utilities

Mortgage-backed securities

of states and political subdivisions

securities including public utilities

Mortgage-backed

Beginning balance - December 31, 2023

Additions for credit losses not previously recorded

Change in allowance on securities with previous allowance

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, 2024

The table below

presents the amortized cost and the estimated fair value of fixed maturity securities available for sale as of March 31, 2025, by contractual

Actual or expected maturities may differ from contractual maturities because certain securities afford the issuer the right

to call or prepay its obligations.

Additions for credit losses

not previously recorded

Change in allowance on

securities with previous allowance

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

Ending Balance - June 30, 2024

table below presents the amortized cost and the estimated fair value of fixed maturity securities available for sale as of June 30, 2025,

by contractual maturity.

Actual or expected maturities may differ from contractual maturities because certain securities afford the issuer

the right to call or prepay its obligations.

Schedule of Investments Classified by Contractual Maturity Date

Estimated Fair

Due in 1 year

6 unchanged sentences

$ 390,441,720

Information regarding

sales of fixed maturity securities available for sale is presented as follows.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2025 (Unaudited)

3) Investments

regarding sales of fixed maturity securities available for sale is presented as follows.

Schedule of Major Categories of Net Investment Income

Three Months Ended March 31,

Months Ended June 30,

Proceeds from sales

1 unchanged sentence

Gross realized losses

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2025 (Unaudited)

Investments (Continued)

Deposit, Held in Trust, and Pledged as Collateral

Assets on deposit

with life insurance regulatory authorities as required by law were as follows:

on Deposit, Held in Trust, and Pledged as Collateral

on deposit with life insurance regulatory authorities as required by law were as follows:

Schedule of Assets on Deposit With Life Insurance

Fixed maturity securities available for sale at estimated fair value

of December 31, 2024

Fixed maturity securities available

for sale at estimated fair value

Other investments

1 unchanged sentence

Total assets on deposit

Assets held in trust related to third-party reinsurance agreements were

Fixed maturity securities available for sale at estimated fair value

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

of December 31, 2024

Fixed maturity securities available

for sale at estimated fair value

Cash and cash equivalents

Total assets on deposit

The Company is a member of the Federal Home Loan Bank

of Des Moines and Dallas (“FHLB”).

Assets pledged as collateral with the FHLB are presented below.

These pledged securities

are used as collateral for any FHLB cash advances.

Fixed maturity securities available for sale at estimated fair value

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

Assets pledged as collateral with the

FHLB are presented below.

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

As of June 30, 2025, the Company

owed $ 15,000,000 to the FHLB for advances.

The Company received $ 32,000,000 in advances and repaid $ 17,000,000 of these advances during

the second quarter of 2025.

of December 31, 2024

Fixed maturity securities available

for sale at estimated fair value

Total assets pledged as collateral

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.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2025 (Unaudited)

3) Investments

Estate Held for Investment and Held for Sale

Company strategically deploys resources into real estate assets to match the income and yield durations of its primary obligations.

sources for these real estate assets come through its various business units in the form of acquisition, development, and mortgage foreclosures.

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.

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.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2025 (Unaudited)

Investments (Continued)

The Company employs

full-time employees to attend to the day-to-day operations of its commercial real estate within the greater Salt Lake area and close surrounding

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 that are

in regions 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 $ 118,658,948 and $ 119,889,846 as of March 31, 2025 and

December 31, 2024, respectively.

The associated bank loan carrying values totaled $ 95,542,882 and $ 96,007,488 as of March 31, 2025 and

December 31, 2024, respectively.

During the three

month periods ended March 31, 2025 and 2024, 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, 2025 and 2024, the Company recorded depreciation expense on commercial real estate held for investment of

$ 1,422,016 and $ 1,527,793 , respectively.

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

useful life, primarily using the straight-line method.

Depreciation is included in net investment income on the consolidated statements

The Company’s

commercial real estate held for investment is summarized as follows as of the respective dates indicated:

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.

Company employs full-time employees to attend to 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 that are in regions expected to have high growth in employment and population and that provide operational efficiencies.

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

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.

aggregate net book value of commercial real estate serving as collateral for bank loans was $ 117,337,770 and $ 119,889,846 as of June

30, 2025 and December 31, 2024, respectively.

The associated bank loan carrying values totaled $ 95,074,196 and $ 96,007,488 as of June

30, 2025 and December 31, 2024, respectively.

the three and six month periods ended June 30, 2025 and 2024, the Company did not record any impairment losses on commercial real estate

held for investment or held for sale.

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

condensed consolidated statements of earnings.

the three month periods ended June 30, 2025 and 2024, the Company recorded depreciation expense on commercial real estate held for investment

of $ 1,432,921 and $ 1,418,301 , respectively, and of $ 2,854,937 and $ 2,946,094 during the six month periods ended June 30, 2025 and 2024,

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.

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

December 31, 2024

Square Footage

$ 124,049,860

2 unchanged sentences

$ 126,074,928

(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, 2025

December 31, 2024

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2025 (Unaudited)

3) Investments

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

Mississippi (1)

(1) Consists of approximately

93 acres of undeveloped land

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2025 (Unaudited)

Investments (Continued)

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, 2025, real estate owned and occupied by

the Company is summarized as follows:

Consists of approximately 93 acres of undeveloped

Real Estate Owned and Occupied by the Company

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

As of June 30, 2025, real estate owned

and occupied by the Company is summarized as follows:

of Real Estate Owned and Occupied by the Company

Business Segment

Approximate Square Footage

Square Footage Occupied by the Company

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

Corporate Offices, Life Insurance, Cemetery/Mortuary Operations, and Mortgage Operations and Sales

Square Footage

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,

Cemetery/Mortuary Operations, and Mortgage Operations and Sales

1818 Marshall Street, Shreveport, LA (2)

2 unchanged sentences

Life Insurance Sales

(1) Included in real

estate held for investment on the condensed consolidated balance sheets

(2) Included in property

and equipment on the condensed consolidated balance sheets

(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.

in real estate held for investment on the condensed consolidated balance sheets

in property and equipment on the condensed consolidated balance sheets

Real Estate Held for Investment and Held for Sale

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.

During the three

month periods ended March 31, 2025 and 2024 the Company did not record any impairment losses on residential real estate held for sale

or held for investment.

the three and six month periods ended June 30, 2025 and 2024 the Company did not record any impairment losses on residential real estate

held for investment.

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, 2025 and 2024, the Company recorded depreciation expense on residential real estate held for investment

of $ 2,676 and $ 2,653 , respectively.

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

useful life, primarily using the straight-line method.

Depreciation is included in net investment income on the consolidated statements

The Company’s

residential real estate held for investment is summarized as follows as of the respective dates indicated:

the three month periods ended June 30, 2025 and 2024, the Company recorded depreciation expense on residential real estate held for investment

of $ 2,732 and $ 2,653 , respectively, and $ 5,408 and $ 5,305 during the six month periods ended June 30, 2025 and 2024, respectively.

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

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

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2025 (Unaudited)

3) Investments

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

(1) Includes multiple

residential subdivision development projects, refer to the following table.

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2025 (Unaudited)

Investments (Continued)

The Company also

invests in residential subdivision developments.

The following table presents additional information regarding the Company’s residential

subdivision development projects in Utah:

multiple residential subdivision development projects, refer to the following tables.

Company also invests in residential subdivision developments.

The following table presents additional information regarding the Company’s

residential subdivision development projects in Utah:

Lots developed

Lots to be developed

The Company’s

residential real estate held for sale is summarized as follows as of the respective dates indicated:

Net Book Value

December 31, 2024

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

2,561,487 (1 )

(1) Includes a residential

subdivision development project for $ 2,106,487

value of foreclosed residential real estate included in residential real estate held for sale was $ 455,000 and $ 1,126,480 as of March

31, 2025 and December 31, 2024, respectively.

Mortgage Loans

Held for Investment

Mortgage loans held for investment consist of first

and second mortgages and are generally classified in three distinct group:

Commercial, Residential and Residential Construction.

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 a number

of 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.

As of March 31, 2025, the Company had 59 %, 8 %, 7 %, 4 % and 4 %, of its mortgage loans from borrowers located

in the states of Utah, Florida, Arizona, Texas, and California, respectively.

As of December 31, 2024, the Company had 56 %, 8 %, 9 % and

6 % of its mortgage loans from borrowers located in the states of Utah, Florida, Arizona, and Texas, respectively.

Mortgage loans

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

a residential subdivision development project for $ 2,106,487

net book value of foreclosed residential real estate included in residential real estate held for sale was $ 835,000 and $ 1,126,480 as

of June 30, 2025 and December 31, 2024, respectively.

Loans Held for Investment

loans held for investment consist of first and second mortgages and are generally classified in three distinct group:

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 a number of 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.

As of June 30, 2025, the Company had 57 %, 8 %, 6 %, 5 %, 4 % and

4 %, of its mortgage loans from borrowers located in the states of Utah, Florida, Arizona, California, Texas, and Hawaii, respectively.

As of December 31, 2024, the Company had 56 %, 8 %, 9 % and 6 % of its mortgage loans from borrowers located in the states of Utah, Florida,

Arizona, and Texas, respectively.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2025 (Unaudited)

3) Investments

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.

5 unchanged sentences

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.

For loans of more than 80% of the fair market value

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

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated

Financial Statements

March 31, 2025 (Unaudited)

3) Investments

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.

For loans of more than 80% of the fair

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

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.

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

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.

Given this policy, the Company does not measure a credit loss allowance on accrued interest receivable.

interest receivable 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.

Accrued interest receivable 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.

Accrual of interest resumes if a mortgage loan is brought current.

Interest not accrued on these

loans totaled approximately $ 259,000 and $ 244,000 as of March 31, 2025 and December 31, 2024, respectively.

The Company measures

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

a mortgage loan becomes delinquent, the Company proceeds to foreclose and all expenses for foreclosure are expensed as incurred.

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 by loan type.

The Company’s loan types are commercial, residential,

and residential construction.

The inherent risks within the portfolio vary depending upon the loan type 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 fair value is assessed if the loan becomes 90 days

Interest not accrued

on these loans totaled approximately $ 343,000 and $ 244,000 as of June 30, 2025 and December 31, 2024, respectively.

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 and all expenses for foreclosure are expensed as incurred.

Once foreclosed, the property is classified as real estate held for investment or held for sale.

determine the allowance for credit losses, the Company has segmented its mortgage loans held for investment by loan type.

The Company’s

loan types are commercial, residential, and residential construction.

The inherent risks within the portfolio vary depending upon the

loan type as follows:

- 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.

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.

value is assessed if the loan becomes 90 days delinquent.

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 the life events and the

general economic condition of the region.

Where loan to value 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, loan to value, payment status, age, and

current property values.

Analyzing the information from the various sources allows the Company to arrive at the allowance for credit losses.

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated

Financial Statements

March 31, 2025 (Unaudited)

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.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2025 (Unaudited)

3) Investments

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.

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 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 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.

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

The borrower’s ability to repay is sensitive

to the life events and the general economic condition of the region.

Where loan to value exceeds 80%, the loan is generally guaranteed

by private mortgage insurance, the FHA, or VA.

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, loan to value, payment status, age, and current property values.

Analyzing the information from the various sources allows

the Company to arrive at the allowance for credit losses.

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.

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.

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.

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 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.

The Company has commitments to

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

As of March 31, 2025, the Company’s

The Company has commitments

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

As of June 30, 2025, the Company’s

commitments were approximately $ 220,679,000 for these loans, of which $ 168,666,015 had been drawn.

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 for 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:

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 for subsequent draws.

The per loan basis point is reviewed

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

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2025 (Unaudited)

3) Investments

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

Residential Construction

Beginning balance - March 31, 2025

Change in provision for

credit losses (1)

Ending balance - June 30, 2025

Beginning balance - March 31, 2024

Change in provision for

credit losses (1)

Ending balance - June 30, 2024

Beginning balance - December 31, 2024

Change in provision for credit losses (1)

Ending balance - March 31, 2025

Change in provision for

credit losses (1)

Ending balance - June 30, 2025

Beginning balance - December 31, 2023

Change in provision for credit losses (1)

Ending balance - March 31, 2024

(1) Included in other

expenses on the condensed consolidated statements of earnings

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated

Financial Statements

March 31, 2025 (Unaudited)

Change in provision for

credit losses (1)

Ending balance - June 30, 2024

in other expenses on the condensed consolidated statements of earnings

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2025 (Unaudited)

3) Investments

The following table presents the aging of mortgage loans held for investment

by loan type as of the dates indicated:

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

March 31, 2025

30-59 days past due

June 30, 2025

60-89 days past due

Over 90 days past due (1)

In process of foreclosure (1)

Total past due

Total mortgage loans

process of foreclosure (1)

mortgage loans

Allowance for credit losses

1 unchanged sentence

( 1,129,892 )

Unamortized deferred loan fees, net

( 2,640,744 )

Unamortized deferred loan

( 1,275,782 )

Unamortized discounts, net

Net mortgage loans held for investment

( 2,230,234 )

discounts, net

mortgage loans held for investment

$ 164,679,678

$ 324,403,996

December 31, 2024

2 unchanged sentences

Over 90 days past due (1)

In process of foreclosure (1)

Total past due

Total mortgage loans

process of foreclosure (1)

mortgage loans

Allowance for credit losses

( 1,885,390 )

Unamortized deferred loan fees, net

Unamortized deferred loan

( 1,307,539 )

( 2,082,241 )

Unamortized discounts, net

Net mortgage loans held for investment

discounts, net

mortgage loans held for investment

$ 150,211,240

$ 301,747,358

(1) Interest income

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

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated

Financial Statements

March 31, 2025 (Unaudited)

3) Investments

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, 2025:

Schedule of Commercial Mortgage Loans By Credit Quality Indicator

Credit Quality Indicator

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

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2025 (Unaudited)

Quality Indicators

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.

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

June 30, 2025:

of Commercial and Residential Mortgage Loans By Credit Quality Indicator

Credit Quality

Less than 65%

1 unchanged sentence

1.00x - 1.20x

The aggregate unpaid principal balance of commercial

mortgage loans by credit quality indicator and origination year was as follows as of December 31, 2024:

Credit Quality Indicator

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

December 31, 2024:

Credit Quality

Less than 65%

1 unchanged sentence

1.00x - 1.20x

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated

Financial Statements

March 31, 2025 (Unaudited)

3) Investments

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, 2025:

Credit Quality Indicator

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2025 (Unaudited)

Company evaluates and monitors the credit quality of its residential mortgage loans by analyzing LTV and loan performance.

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.

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

June 30, 2025:

Credit Quality

Performance Indicators:

Non-performing (1)

(1) Includes residential

mortgage loans in the process of foreclosure of $ 2,818,740

Includes residential mortgage loans in the process of

foreclosure of $ 2,189,399

Less than 65%

Greater than 80%

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated

Financial Statements

March 31, 2025 (Unaudited)

3) Investments

The aggregate unpaid principal balance of residential

mortgage loans by credit quality indicator and origination year was as follows as of December 31, 2024:

Credit Quality Indicator

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

December 31, 2024:

Credit Quality

Performance Indicators:

Non-performing (1)

(1) Includes residential

mortgage loans in the process of foreclosure of $ 3,942,392

Includes residential mortgage loans in the process of

foreclosure of $ 3,942,392

Less than 65%

Greater than 80%

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated

Financial Statements

March 31, 2025 (Unaudited)

3) Investments

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.

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, 2025:

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2025 (Unaudited)

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.

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

follows as of June 30, 2025:

Schedule of Residential Construction Mortgage Loans

Credit Quality Indicator

Credit Quality

Performance Indicators:

$ 165,707,402

$ 169,877,471

Non-performing

$ 165,707,402

$ 169,877,471

Less than 65%

1 unchanged sentence

$ 165,707,402

$ 169,877,471

The aggregate unpaid principal balance of residential

construction mortgage loans by credit quality indicator and origination year was as follows as of December 31, 2024:

Credit Quality Indicator

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

follows as of December 31, 2024:

Credit Quality

Performance Indicators:

8 unchanged sentences

$ 151,172,733

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated

Financial Statements

March 31, 2025 (Unaudited)

3) Investments

The following table presents the aging of insurance assignments, included

in other investments and policy loans on the condensed consolidated balance sheets:

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2025 (Unaudited)

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

8 unchanged sentences

Net insurance assignments

The Company records an allowance for credit losses

when the insurance assignment is funded.

Once an insurance assignment moves to 90 days past due or 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:

Company records an allowance for credit losses when the insurance assignment is funded.

Once an insurance assignment moves to 90 days

past due or legal proceedings, it is monitored for write-off and collectability, and any adjustments to the allowance are recorded at

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

Three Months Ended

Beginning balance - March 31, 2025

Change in provision for

credit losses (1)

Ending balance - June 30, 2025

Beginning balance - March 31, 2024

Change in provision for

credit losses (1)

Ending balance - June 30, 2024

Beginning balance - December 31, 2024

Change in provision for credit losses (1)

Ending balance - March 31, 2025

Change in provision for

credit losses (1)

Ending balance - June 30, 2025

Beginning balance - December 31, 2023

Change in provision for credit losses (1)

Ending balance - March 31, 2024

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated

Financial Statements

March 31, 2025 (Unaudited)

3) Investments

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:

Change in provision for

credit losses (1)

Ending balance - June 30, 2024

Included in other expenses

on the condensed consolidated statements of earnings

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2025 (Unaudited)

Interest Entities (“VIE”)

Company has a 50 % ownership interest in HHH Real Estate LLC (“HHH”), an entity that holds and develops single family lots

for residential construction.

In accordance with the HHH operating agreement, net profits or losses are allocated to the members in accordance

with their ownership interests.

The investment in HHH is accounted for under the equity method of accounting.

HHH has not commenced its

principal operations as of June 30, 2025.

The carrying value of the equity investment in HHH was $ 11,163,125 and nil at June 30, 2025

and December 31, 2024, respectively, which is included in other investments and policy loans on the condensed consolidated balance sheets.

Company has determined that HHH is a VIE 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 investee is limited to the carrying value of the Company’s investment

of $ 11,163,125 .

Related Earnings

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

Three Months Ended March 31,

Months Ended June 30,

Fixed maturity securities:

Gross realized gains

Gross realized

Gross realized losses

1 unchanged sentence

Equity securities:

Gains (losses) on securities sold

Unrealized gains on securities held at the end of the period

Gains (losses) on securities

Unrealized gains on securities

held at the end of the period

Real estate held for investment and sale:

3 unchanged sentences

Gross realized gains

Gross realized losses

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.

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

mortuaries and totaled $ 213,979 and $ 582,172 in net gains for the three month periods ended March 31, 2025 and 2024, respectively .

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated

Financial Statements

March 31, 2025 (Unaudited)

3) Investments

Major categories

of net investment income were as follows:

Three Months Ended March 31,

Fixed maturity securities available for sale

realized losses

$ ( 377,239 )

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.

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

and mortuaries and totaled $ 271,176 and $ 202,800 in net gains for the three month periods ended June 30, 2025 and 2024, respectively,

and of $ 485,155 and $ 379,363 in net gains for the six month periods ended June 30, 2025 and 2024, respectively.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2025 (Unaudited)

categories of net investment income were as follows:

Months Ended June 30,

Fixed maturity securities available

Equity securities

8 unchanged sentences

( 3,776,320 )

( 10,276,439 )

( 7,998,286 )

Net investment income

Net investment

income includes income earned from cemetery perpetual care trust investments and the restricted assets of cemeteries and mortuaries and

totaled $ 146,838 and $ 933,551 for the three month periods ended March 31, 2025 and 2024, 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:

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

and totaled $ 220,634 and $ 470,808 for the three month periods ended June 30, 2025 and 2024, respectively, and $ 367,472 and $ 1,404,359

for the six month periods ended June 30, 2025 and 2024, respectively.

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.

Investment Income

investment income consists of the following:

Schedule of Accrued Investment Income

As of March 31,

As of December 31, 2024

Fixed maturity securities available for sale

Fixed maturity securities available

Equity securities

3 unchanged sentences

Cash and cash equivalents

Total accrued investment income

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated

Financial Statements

March 31, 2025 (Unaudited)

Total accrued investment

SECURITY NATIONAL

FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed

Consolidated Financial Statements

June 30, 2025

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:

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

See Note 8 to the condensed consolidated financial statements for additional disclosures regarding loans held for sale.

following table presents the aggregate fair value and the aggregate unpaid principal balance of loans held for sale:

of Aggregate Fair Value Loans Held for Sale

As of December 31, 2024

Aggregate fair value

3 unchanged sentences

Unrealized gain

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:

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.

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

of Mortgage Fee Income for Loans Held for Sale

Three Months Ended March 31,

Months Ended June 30,

Interest income

2 unchanged sentences

Change in fair value of loans held for sale

Provision for loan loss reserve

Provision for loan

Mortgage fee income

Loan Loss Reserve

Repurchase demands from third party investors that

correspond to 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 repurchase demand.

In many instances, the Company can resolve the issues relating to the repurchase demand

by the third-party investor without having to make any payments to the investor.

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated

Financial Statements

March 31, 2025 (Unaudited)

4) Loans Held for

Sale (Continued)

The loan loss reserve, which is included in other

liabilities and accrued expenses, is summarized as follows:

SECURITY NATIONAL

FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed

Consolidated Financial Statements

June 30, 2025

Loans Held for Sale

demands from third party investors that correspond to 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 repurchase demand.

In many instances, the Company can resolve

the issues relating to the repurchase demand by the third-party investor without having to make any payments to the investor.

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

June 30, 2025

December 31, 2024

Balance, beginning of period

Provision on current loan originations (1)

Charge-offs, net of recaptured amounts

Charge-offs, net of recaptured

Balance, end of period

(1) Included in mortgage

The Company maintains

reserves for estimated losses on current production volumes.

For the three month periods ended March 31, 2025 and 2024, $ 183,034 and $ 163,476

in reserves, respectively, 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.

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated

Financial Statements

March 31, 2025 (Unaudited)

5) Stock Compensation

The Company has

equity incentive plans (the “2013 Plan”, the “2014 Director Plan” and the “2022 Plan”).

Stock Options

Stock based compensation

expense for stock options issued of $ 299,272 and $ 198,998 has been recognized for these plans for the three month periods ended March

31, 2025 and 2024, respectively, and is included in personnel expenses on the condensed consolidated statements of earnings.

31, 2025, the total unrecognized compensation expense related to the options issued was $ 873,138 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.

of the stock option plans during the three month period ended March 31, 2025, is summarized as follows:

Schedule of Activity Restricted Stock Units

Included in mortgage fee

Company maintains reserves for estimated losses on current production volumes.

For the six month period ended June 30, 2025, $ 398,937

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.

month period ended June 30, 2024, $ 475,601 in reserves that were added at a rate of 4.4 basis points per loan, the equivalent of $ 440

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.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Condensed Consolidated Financial Statements

2025 (Unaudited)

Stock Compensation Plans

Company has equity incentive plans (the “2013 Plan”, the “2014 Director Plan” and the “2022 Plan”).

based compensation expense for stock options issued of $ 310,430 and $ 183,184 has been recognized for these plans for the three month

periods ended June 30, 2025 and 2024, respectively, and $ 609,703 and $ 382,182 has been recognized for these plans for the six month periods

ended June 30, 2025 and 2024, respectively, and is included in personnel expenses on the condensed consolidated statements of earnings.

As of June 30, 2025, the total unrecognized compensation expense related to the options issued was $ 562,707 which is expected to be recognized

over the remaining vesting period.

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

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.

activity of the stock option plans during the six month period ended June 30, 2025, is summarized as follows:

Schedule of Activity of Stock Option Plans

Class A Shares

Weighted Average Exercise Price (2)

Average Exercise Price (2)

Class C Shares

Weighted Average Exercise Price (2)

Average Exercise Price (2)

Outstanding at December 31, 2024

Outstanding at March 31, 2025

As of March 31, 2025:

Adjustment for the effect of stock dividends

Outstanding at June 30, 2025

As of June 30, 2025:

Options exercisable

As of March 31, 2025:

Available options for future grant

Weighted average contractual term of options outstanding at March 31, 2025

Weighted average contractual term of options exercisable at March 31, 2025

Aggregated intrinsic value of options outstanding at March 31, 2025 (1)

Aggregated intrinsic value of options exercisable at March 31, 2025 (1)

(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.

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated

Financial Statements

March 31, 2025 (Unaudited)

Stock Compensation Plans (Continued)

of the stock option plans during the three month period ended March 31, 2024, is summarized as follows:

As of June 30, 2025:

Available options for

Weighted average contractual term of options outstanding at June 30,

Weighted average contractual term of options exercisable at June 30,

Aggregated intrinsic value of options

outstanding at June 30, 2025 (1)

Aggregated intrinsic value of options exercisable at June 30, 2025 (1)

The Company used a stock

price of $ 9.02 as of June 30, 2025 to derive intrinsic value.

Adjusted for the effect of

annual stock dividends.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Condensed Consolidated Financial Statements

2025 (Unaudited)

Stock Compensation Plans

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

Class A Shares

Weighted Average Exercise Price (2)

Average Exercise Price (2)

Class C Shares

Weighted Average Exercise Price

Average Exercise Price

Outstanding at December 31, 2023

Outstanding at March 31, 2024

As of March 31, 2024:

Adjustment for the effect of stock dividends

Outstanding at June 30, 2024

As of June 30, 2024:

Options exercisable

As of March 31, 2024:

Available options for future grant

Weighted average contractual term of options outstanding at March 31, 2024

Weighted average contractual term of options exercisable at March 31, 2024

Aggregated intrinsic value of options outstanding at March 31, 2024 (1)

Aggregated intrinsic value of options exercisable at March 31, 2024 (1)

(1) The Company used

a stock price of $ 7.91 as of March 31, 2024 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, 2025 and 2024 was $ 1,357,776 and nil , respectively.

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated

Financial Statements

March 31, 2025 (Unaudited)

Stock Compensation Plans (Continued)

As of June 30, 2024:

Available options for

Weighted average contractual term of options outstanding at June 30,

Weighted average contractual term of options exercisable at June 30,

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

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

The Company used a stock

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

Adjusted for the effect of

annual stock dividends.

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

the exercise date) of stock options exercised during the six month periods ended June 30, 2025 and 2024 was $ 1,357,776 and $ 142,210 ,

respectively.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Condensed Consolidated Financial Statements

2025 (Unaudited)

Stock Compensation Plans

Stock Units (“RSUs”)

Stock based compensation

expense for RSUs issued of $ 9,988 and $ 889 has been recognized under these plans for the three month periods ended March 31, 2025 and

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

based compensation expense for RSUs issued of $ 9,949 and $ 882 has been recognized under these plans for the three month periods ended

June 30, 2025 and 2024, respectively, and $ 19,936 and $ 1,771 has been recognized under these plans for the six month periods ended June

30, 2025 and 2024, 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, 2025, the total unrecognized compensation

As of June 30, 2025, the total unrecognized compensation

expense related to the RSUs issued was $ 17,362 , which is expected to be recognized over the remaining vesting period.

Activity of the

RSUs during the three month period ended March 31, 2025, is summarized as follows:

of the RSUs during the six month period ended June 30, 2025, is summarized as follows:

Schedule of Activity Restricted Stock Units

Class A Shares

Weighted Average Grant Date Fair Value

Average Grant Date Fair Value

Non-vested at December 31, 2024

Non-vested at March 31, 2025

Available RSUs for future grant

Activity of the

RSUs during the three month period ended March 31, 2024, is summarized as follows:

Class A Shares

Weighted Average Grant Date Fair Value

Non-vested at June 30, 2025

Available RSUs for future

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

Average Grant Date Fair Value

Non-vested at December 31, 2023

Non-vested at March 31, 2024

Available RSUs for future grant

Non-vested at June 30, 2024

Available RSUs for future

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

Condensed Consolidated Financial Statements

2025 (Unaudited)

4 unchanged sentences

Schedule of Earnings Per Share, Basic and Diluted

Three Months Ended

Basic weighted-average shares outstanding

Months Ended June 30,

weighted-average shares outstanding

Effect of dilutive securities:

Employee stock options

Diluted weighted-average shares outstanding

stock options

weighted-average shares outstanding

Basic net earnings per share

Diluted net earnings per share

the three month periods ended March 31, 2025 and 2024, there were 382,700 and 467,125 anti-dilutive stock option shares, respectively,

that were not included in the computation of diluted net earnings per common share as their effect would be anti-dilutive.

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

the six month periods ended June 30, 2025 and 2024, there were 416,539 and 143,456 anti-dilutive stock option shares, respectively, that

were not included in the computation of diluted net earnings per common share as their effect would be anti-dilutive.

Basic and diluted

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

following table summarizes the activity in shares of capital stock.

2 unchanged sentences

Exercise of stock options

Vesting of restricted stock units

Outstanding shares at March 31, 2025

Vesting of restricted stock

Conversion of Class C to

Outstanding shares at June 30, 2025 (1)

Outstanding shares at December 31, 2023 (1)

Outstanding shares

Vesting of restricted stock units

Conversion of Class C to Class A

Outstanding shares at March 31, 2024 (1)

Outstanding shares

(1) Adjusted retroactively

for the effect of annual stock dividends

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2025 (Unaudited)

Outstanding shares, beginning

Exercise of stock options

Vesting of restricted stock

Conversion of Class C to

Outstanding shares at June 30, 2024 (1)

Outstanding shares, ending

Adjusted retroactively for

the effect of annual stock dividends

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Condensed Consolidated Financial Statements

2025 (Unaudited)

Business Segment Information

42 unchanged sentences

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

Condensed Consolidated Financial Statements

2025 (Unaudited)

Business Segment Information (Continued)

Business Segment Information

Schedule of Revenues and Expenses by Reportable Segment

For the Three Months Ended March 31, 2025

the Three Months Ended June 30, 2025

From external sources:

1 unchanged sentence

Net investment income

Gains (losses) on investments and other assets

Other revenues

Intersegment revenues

Total segment revenues

Elimination of intersegment

( 1,987,667 )

Total consolidated revenues

Death benefits

Surrenders and other policy benefits

Increase in future policy benefits

Amortization of deferred policy and pre-need

acquisition costs and value of business acquired

Selling, general and administrative expenses:

Rent and rent related

Depreciation on property

and equipment

Cost related to funding

mortgage loans

Data processing and IT

Premium taxes on insurance

premiums and other considerations (1)

Other segment items (1)(2)

Intersegment expenses (3)

Interest expense

Costs of goods and services sold-mortuaries

and cemeteries

Income tax expense (benefit)

Segment net earnings (loss)

( 1,260,869 )

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.

For each reportable segment,

other segment items includes:

Insurance - bad debt, insurance expenses, professional service expenses, state insurance department fees, amortization of intangible

assets, and certain overhead expenses.

Cemetery/Mortuary

- bad debt, insurance expenses, professional service expenses, maintenance and utility expenses, property taxes, amortization of intangible

assets, and certain overhead expenses.

- 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.

For each reportable segment,

intersegment expenses includes:

Insurance - mortgage servicing fees and interest expense.

Cemetery/Mortuary

- rent expense, data processing and IT related expenses, and interest expense.

- rent expense and interest expense.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Condensed Consolidated Financial Statements

2025 (Unaudited)

Business Segment Information

the Three Months Ended June 30, 2024

From external sources:

Revenue from external customers

Net investment income

Gains (losses) on investments and other assets

Other revenues

Intersegment revenues

Total segment revenues

Elimination of intersegment

( 2,135,729 )

Total consolidated revenues

Death benefits

Surrenders and other policy benefits

Increase in future policy benefits

Amortization of deferred policy and pre-need

acquisition costs and value of business acquired

Selling, general and administrative expenses:

Rent and rent related

Depreciation on property

and equipment

Cost related to funding

mortgage loans

Data processing and IT

Premium taxes on insurance

premiums and other considerations (1)

Other segment items (1)(2)

Intersegment expenses (3)

Interest expense

Costs of goods and services sold-mortuaries

and cemeteries

Income tax expense (benefit)

Segment net earnings

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.

For each reportable segment,

other segment items includes:

Insurance - bad debt, insurance expenses, professional service expenses, state insurance department fees, amortization of intangible

assets, and certain overhead expenses.

Cemetery/Mortuary

- bad debt, insurance expenses, professional service expenses, maintenance and utility expenses, property taxes, amortization of intangible

assets, and certain overhead expenses.

- 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.

For each reportable segment,

intersegment expenses includes:

Insurance - mortgage servicing fees and interest expense.

Cemetery/Mortuary

- rent expense, data processing and IT related expenses, and interest expense.

- rent expense and interest expense.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Condensed Consolidated Financial Statements

2025 (Unaudited)

Business Segment Information

the Six Months Ended June 30, 2025

From external sources:

Revenue from external customers

$ 128,817,662

Net investment income

Gains on investments and other assets

2 unchanged sentences

Total segment revenues

Elimination of intersegment revenues

Elimination of intersegment

( 3,513,294 )

3 unchanged sentences

Increase in future policy benefits

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

Amortization of deferred policy and pre-need

acquisition costs and value of business acquired

Selling, general and administrative expenses:

Rent and rent related

Depreciation on property and equipment

Cost related to funding mortgage loans

Data processing and IT related (1)

Premium taxes on insurance premiums and other considerations (1)

Depreciation on property

and equipment

Cost related to funding

mortgage loans

Data processing and IT

Premium taxes on insurance

premiums and other considerations (1)

Other segment items (1)(2)

1 unchanged sentence

Interest expense

Costs of goods and services sold-mortuaries and cemeteries

Costs of goods and services sold-mortuaries

and cemeteries

Income tax expense (benefit)

5 unchanged sentences

$ 1,571,059,283

$ 1,616,076,736

Elimination of intersegment assets

Elimination of intersegment

( 27,081,176 )

1 unchanged sentence

$ 1,543,978,107

Expenditures for long-lived assets

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.

each reportable segment, other segment items includes:

Insurance - bad debt, insurance expenses, professional service expenses, state insurance department fees,

amortization of intangible assets, and certain overhead expenses.

Expenditures for long-lived

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.

For each reportable segment,

other segment items includes:

Insurance - bad debt, insurance expenses, professional service expenses, state insurance department fees, amortization of intangible

assets, and certain overhead expenses.

Cemetery/Mortuary

- bad debt, insurance expenses, professional service expenses, maintenance and utility expenses,

property taxes, amortization of intangible assets, and certain overhead expenses.

- 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.

each reportable segment, intersegment expenses includes:

- bad debt, insurance expenses, professional service expenses, maintenance and utility expenses, property taxes, amortization of intangible

assets, and certain overhead expenses.

- 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.

For each reportable segment,

intersegment expenses includes:

Insurance - mortgage servicing fees and interest expense.

3 unchanged sentences

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

Condensed Consolidated Financial Statements

2025 (Unaudited)

Business Segment Information (Continued)

For the Three Months Ended March 31, 2024

Business Segment Information

the Six Months Ended June 30, 2024

From external sources:

Revenue from external customers

$ 125,981,275

Net investment income

Gains (losses) on investments and other assets

Gains on investments and other assets

Other revenues

1 unchanged sentence

Total segment revenues

Elimination of intersegment revenues

Elimination of intersegment

( 3,746,678 )

3 unchanged sentences

Increase in future policy benefits

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

Amortization of deferred policy and pre-need

acquisition costs and value of business acquired

Selling, general and administrative expenses:

Rent and rent related

Depreciation on property and equipment

Cost related to funding mortgage loans

Data processing and IT related (1)

Premium taxes on insurance premiums and other considerations (1)

Depreciation on property

and equipment

Cost related to funding

mortgage loans

Data processing and IT

Premium taxes on insurance

premiums and other considerations (1)

Other segment items (1)(2)

1 unchanged sentence

Interest expense

Costs of goods and services sold-mortuaries and cemeteries

Costs of goods and services sold-mortuaries

and cemeteries

Income tax expense (benefit)

4 unchanged sentences

$ 1,490,016,970

Elimination of intersegment assets

Elimination of intersegment

( 29,292,449 )

1 unchanged sentence

$ 1,460,724,521

Expenditures for long-lived assets

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.

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.

Cemetery/Mortuary - 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.

For each reportable segment, intersegment expenses includes:

Life Insurance - mortgage servicing fees and interest expense.

Cemetery/Mortuary - rent expense, data processing and IT related

expenses, and interest expense.

Mortgage - rent expense and interest expense.

Expenditures for long-lived

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.

For each reportable segment,

other segment items includes:

Insurance - bad debt, insurance expenses, professional service expenses, state insurance department fees, amortization of intangible

assets, and certain overhead expenses.

Cemetery/Mortuary

- bad debt, insurance expenses, professional service expenses, maintenance and utility expenses, property taxes, amortization of intangible

assets, and certain overhead expenses.

- 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.

For each reportable segment,

intersegment expenses includes:

Insurance - mortgage servicing fees and interest expense.

Cemetery/Mortuary

- rent expense, data processing and IT related expenses, and interest expense.

- rent expense and interest expense.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

Condensed Consolidated Financial Statements

2025 (Unaudited)

Fair Value of Financial Instruments

Fair Value of Financial

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

8 unchanged sentences

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

prices for similar assets or liabilities in active markets.

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

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

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

both unobservable and significant to the overall fair value measurement.

These inputs may reflect the Company’s estimates of the

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

Quoted prices for similar

assets or liabilities in active markets.

Quoted prices for identical

or similar assets or liabilities in non-active markets;

models whose inputs are observable, directly or indirectly, for substantially the full term

of the asset or liability.

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

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

These inputs may reflect the Company’s estimates

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

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

23 unchanged sentences

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

Condensed Consolidated Financial Statements

2025 (Unaudited)

Fair Value of Financial Instruments (Continued)

Fair Value of Financial

Instruments (Continued)

items shown under Level 3 are valued as follows:

56 unchanged sentences

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

Condensed Consolidated Financial Statements

2025 (Unaudited)

Fair Value of Financial Instruments (Continued)

Fair Value of Financial

Instruments (Continued)

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

their classification in the condensed consolidated balance sheet as of March 31, 2025:

their classification in the condensed consolidated balance sheet as of June 30, 2025:

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

Quoted Prices in Active Markets for Identical Assets

Significant Observable Inputs

Significant Unobservable Inputs

Assets accounted for at fair value on a recurring basis

Fixed maturity securities available for sale

Prices in Active Markets for Identical Assets

Observable Inputs

Unobservable Inputs

Assets accounted for at fair value on a recurring

Fixed maturity securities available

$ 390,441,720

7 unchanged sentences

Derivatives - loan commitments

Total assets accounted for at fair value on a recurring basis

Total assets accounted

for at fair value on a recurring basis

$ 596,374,391

1 unchanged sentence

$ 170,703,148

Liabilities accounted for at fair value on a recurring basis

Liabilities accounted for at fair value on

a recurring basis

Derivatives - loan commitments

Total liabilities accounted for at fair value on a recurring basis

Total liabilities accounted

for at fair value on a recurring basis

$ ( 757,137 )

(1) Fixed maturity

securities available for sale

Fixed maturity securities

available for sale

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

Included in other assets

on the condensed consolidated balance sheets

Included in other liabilities

and accrued expenses on the condensed consolidated balance sheets

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

Condensed Consolidated Financial Statements

2025 (Unaudited)

Fair Value of Financial Instruments (Continued)

Fair Value of Financial

Instruments (Continued)

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

their classification in the condensed consolidated balance sheet as of December 31, 2024:

Quoted Prices in Active Markets for Identical Assets

Significant Observable Inputs

Significant Unobservable Inputs

Assets accounted for at fair value on a recurring basis

Fixed maturity securities available for sale

Prices in Active Markets for Identical Assets

Observable Inputs

Unobservable Inputs

Assets accounted for at fair value on a recurring

Fixed maturity securities available

$ 366,546,129

7 unchanged sentences

Derivatives - loan commitments

Total assets accounted for at fair value on a recurring basis

Total assets accounted

for at fair value on a recurring basis

$ 536,860,288

1 unchanged sentence

$ 137,679,163

Liabilities accounted for at fair value on a recurring basis

Liabilities accounted for at fair value on

a recurring basis

Derivatives - loan commitments

1 unchanged sentence

$ ( 3,034,879 )

Total liabilities accounted for at fair value on a recurring basis

Total liabilities accounted

for at fair value on a recurring basis

$ ( 3,034,879 )

(1) Fixed maturity

securities available for sale

Fixed maturity securities

available for sale

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

Included in other assets

on the condensed consolidated balance sheets

Included in other liabilities

and accrued expenses on the condensed consolidated balance sheets

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

Condensed Consolidated Financial Statements

2025 (Unaudited)

Fair Value of Financial Instruments (Continued)

Level 3 assets and liabilities measured at fair value on a recurring basis as of March 31, 2025, the significant unobservable inputs

used in the fair value measurements were as follows:

Fair Value of Financial

Instruments (Continued)

Level 3 assets and liabilities measured at fair value on a recurring basis as of June 30, 2025, the significant unobservable inputs used

in the fair value measurements were as follows:

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

Fair Value at

Range of Inputs

Loans held for sale

1 unchanged sentence

Market approach

Investor contract pricing as a percentage of unpaid principal balance

Investor contract pricing as a

percentage of unpaid principal balance

Derivatives - loan commitments (net)

8 unchanged sentences

Fair Value at

Range of Inputs

Loans held for sale

1 unchanged sentence

Market approach

Investor contract pricing as a percentage of unpaid principal balance

Investor contract pricing as a

percentage of unpaid principal balance

Derivatives - loan commitments (net)

6 unchanged sentences

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

Condensed Consolidated Financial Statements

2025 (Unaudited)

Fair Value of Financial Instruments (Continued)

Fair Value of Financial

Instruments (Continued)

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:

three month period ended June 30, 2025:

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, 2024

Loan Commitments

Held for Sale

Maturity Securities Available for Sale

Balance - March 31, 2025

$ 139,834,226

2 unchanged sentences

( 603,595,597 )

Transter to mortgage loans held for investment

Loans held for sale foreclosed into real estate

held for sale

Total gains (losses):

1 unchanged sentence

13,948,844 (1)

Included in other comprehensive income

in other comprehensive income

Balance - June 30, 2025

$ 165,876,119

As a component of Mortgage

fee income on the condensed consolidated statements of earnings

As a component of Net investment

income on the condensed consolidated statements of earnings

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

three month period ended June 30, 2024:

Loan Commitments

Held for Sale

Maturity Securities Available for Sale

Balance - March 31, 2024

$ 112,678,958

Originations and purchases

Sales, maturities and paydowns

( 599,685,654 )

Total gains (losses):

Included in earnings

12,984,711 (1)

in other comprehensive income

Balance - June 30, 2024

$ 150,196,416

(1) As a component

2 unchanged sentences

of Net investment income on the condensed consolidated statements of earnings

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Condensed Consolidated Financial Statements

2025 (Unaudited)

Fair Value of Financial

Instruments (Continued)

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, 2024:

Net Loan Commitments

Loans Held for Sale

Fixed Maturity Securities Available for Sale

six month period ended June 30, 2025:

Loan Commitments

Held for Sale

Maturity Securities Available for Sale

Balance - December 31, 2024

1 unchanged sentence

Originations and purchases

1,134,783,086

Sales, maturities and paydowns

1 unchanged sentence

Transfer to mortgage loans held for investment

Loans held for sale foreclosed into real estate

held for sale

Total gains (losses):

Included in earnings

26,098,121 (1)

in other comprehensive income

Balance - June 30, 2025

$ 165,876,119

As a component of Mortgage

fee income on the condensed consolidated statements of earnings

As a component of Net investment

income on the condensed consolidated statements of earnings

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

six month period ended June 30, 2024:

Loan Commitments

Held for Sale

Maturity Securities Available for Sale

Balance - December 31, 2023

$ 126,549,190

Originations and purchases

1,089,823,515

Sales, maturities and paydowns

( 1,085,736,592 )

Transfer to mortgage loans held for investment

( 1,867,552 )

Foreclosed into real estate held for sale

2 unchanged sentences

22,286,832 (1)

Included in other comprehensive income

Balance - March 31, 2024

in other comprehensive income

Balance - June 30, 2024

$ 150,196,416

(1) As a component

of Mortgage fee income on the condensed consolidated statements of earnings

(2) As a component

of Net investment income on the condensed consolidated statements of earnings

As a component of Mortgage

fee income on the condensed consolidated statements of earnings

As a component of Net investment income on

the condensed consolidated statements of earnings

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

Condensed Consolidated Financial Statements

2025 (Unaudited)

Fair Value of Financial Instruments (Continued)

Company did not have any financial assets and financial liabilities measured at fair value on a nonrecurring basis as of March 31, 2025

Fair Value of Financial

Instruments (Continued)

Company did not have any financial assets and financial liabilities measured at fair value on a nonrecurring basis as of June 30, 2025

or as of December 31, 2024.

6 unchanged sentences

Therefore, for substantially all financial instruments, the fair value estimates presented herein

are not necessarily indicative of the amounts the Company could have realized in a sales transaction as of March 31, 2025 and December

are not necessarily indicative of the amounts the Company could have realized in a sales transaction as of June 30, 2025 and December

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

are summarized as follows as of March 31, 2025:

are summarized as follows as of June 30, 2025:

Schedule of Financial Instruments Carried at Other Than Fair Value

Carrying Value

Total Estimated Fair Value

Estimated Fair Value

Mortgage loans held for investment

20 unchanged sentences

( 104,473,330 )

(1) Included in other

investments and policy loans on the condensed consolidated balance sheets

(2) Mortgage loans

held for investment

(3) Included in future

policy benefits and unpaid claims on the condensed consolidated balance sheets

Included in other investments

and policy loans on the condensed consolidated balance sheets

Mortgage loans held for investment

Included in future policy

benefits and unpaid claims on the condensed consolidated balance sheets

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

Condensed Consolidated Financial Statements

2025 (Unaudited)

Fair Value of Financial Instruments (Continued)

Fair Value of Financial

Instruments (Continued)

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, 2024:

Carrying Value

Total Estimated Fair Value

Estimated Fair Value

Mortgage loans held for investment

20 unchanged sentences

( 104,611,544 )

(1) Included in other

investments and policy loans on the consolidated balance sheets

(2) Mortgage loans

held for investment

(3) Included in future

policy benefits and unpaid claims on the consolidated balance sheets

Included in other investments

and policy loans on the consolidated balance sheets

Mortgage loans held for investment

Included in future policy

benefits and unpaid claims on the consolidated balance sheets

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

17 unchanged sentences

approximate their fair values because they are fully collateralized by the cash surrender value of the underlying insurance policies.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Condensed Consolidated Financial Statements

2025 (Unaudited)

Fair Value of Financial

Instruments (Continued)

Assignments, Net :

1 unchanged sentence

condensed consolidated balance sheet for these financial instruments approximate their fair values.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

31, 2025 (Unaudited)

Fair Value of Financial Instruments (Continued)

and Other Loans Payable :

47 unchanged sentences

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

Condensed Consolidated Financial Statements

2025 (Unaudited)

Derivative Instruments (Continued)

Derivative Instruments

Sale Commitments

9 unchanged sentences

Schedule of Derivative Assets at Fair Value

March 31, 2025

December 31, 2024

Balance Sheet Location

Notional Amount

Asset Fair Value

Liability Fair Value

Notional Amount

Asset Fair Value

Liability Fair Value

Balance Sheet

Derivatives not designated as hedging instruments:

Loan commitments

Other assets and Other liabilities

and Other liabilities

$ 218,215,543

7 unchanged sentences

Net Amount Gain

Three Months Ended March 31,

Net Amount Gain

Months Ended June 30,

Classification

Loan commitments

Mortgage fee income

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

Condensed Consolidated Financial Statements

2025 (Unaudited)

Reinsurance, Commitments and Contingencies

Reinsurance, Commitments

and Contingencies

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

18 unchanged sentences

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 June 20, 2025 .

The Company is required to comply with covenants for adjusted tangible net worth, unrestricted cash balance, and a minimum pre-tax loss below $2.5 million for the quarter.

on July 17, 2026 .

The Company is required to comply with covenants for adjusted tangible net worth, unrestricted cash balance, and a

maximum pre-tax loss of $ 2.5 million for the quarter.

Company’s other line of credit, with Western Alliance Bank, 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

The Company is required to comply with

covenants for adjusted tangible net worth, unrestricted cash balance, and a minimum pre-tax loss below $ 2.5

million for the quarter.

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

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

As of March 31, 2025, 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

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

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

The Company is required

to comply with covenants for adjusted tangible net worth, unrestricted cash balance, and a maximum pre-tax loss of $ 2.5 million for the

The agreement for the U.S.

Bank warehouse line of credit includes 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 June 30, 2025, SecurityNational Mortgage was not in compliance with the net income covenant of Western

Alliance Bank’s warehouse line of credit.

SecurityNational Mortgage is in the process of receiving waivers.

In the unlikely event

the Company is required to repay the outstanding advances of approximately $ 12,751,822 on the warehouse lines of credit, the Company has

sufficient cash to do so.

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.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

Condensed Consolidated Financial Statements

2025 (Unaudited)

Reinsurance, Commitments and Contingencies (Continued)

Reinsurance, Commitments

and Contingencies (Continued)

Covenants for Revolving Lines of Credit and Bank Loans

6 unchanged sentences

all bank loans.

As of March 31, 2025, the Company was in compliance with all these debt covenants.

As of June 30, 2025, the Company was in compliance with all these debt covenants.

Contingencies and Commitments

41 unchanged sentences

of Mortgage Servicing Rights

As of March 31,

As of December 31,

June 30, 2025

December 31, 2024

Amortized cost:

Balance before valuation allowance at beginning of year

Balance before valuation allowance

at beginning of year

MSR additions resulting from loan sales (1)

Amortization (2)

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

Balance before valuation allowance at end of period

Application of valuation

allowance to write down MSRs with other than temporary impairment

Balance before valuation

allowance at end of period

Valuation allowance for impairment of MSRs:

Balance at beginning of year

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

Application of valuation

allowance to write down MSRs with other than temporary impairment

Balance at end of period

Mortgage servicing rights, net

Estimated fair value of MSRs at end of period

(1) Included in mortgage

fee income on the condensed consolidated statements of earnings

(2) Included in other

expenses on the condensed consolidated statements of earnings

Mortgage servicing rights,

Estimated fair value of MSRs at end of

Included in mortgage fee

income on the condensed consolidated statements of earnings

Included in other expenses

on the condensed consolidated statements of earnings

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

1 unchanged sentence

30, 2025 (Unaudited)

Mortgage Servicing Rights (Continued)

Mortgage Servicing Rights

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, 2025 valuation of MSRs.

was developed using the Company’s assumptions in its June 30, 2025 valuation of MSRs.

The assumptions used in the following table

2 unchanged sentences

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

Estimated MSR Amortization

MSR Amortization

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

1 unchanged sentence

of Other Revenues

Three Months Ended March 31,

Contractual servicing fees

1 unchanged sentence

of Unpaid Principal Balances of the Servicing Portfolio

As of March 31,

As of December 31, 2024

June 30, 2025

December 31, 2024

Servicing UPB

3 unchanged sentences

of Assumptions Used in Determining MSR Value

March 31, 2025

June 30, 2025

December 31, 2024

2 unchanged sentences

30, 2025 (Unaudited)

Company’s overall effective tax rate for the three month periods ended March 31, 2025 and 2024 was 22.1 % and 22.3 %, respectively,

which resulted in a provision for income taxes of $ 1,232,602 and $ 2,144,789 , 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 decrease in the effective

tax rate when compared to the prior year was primarily due to the Company’s decreased state income tax provision.

Company’s overall effective tax rate for the three month periods ended June 30, 2025 and 2024 was 22.0 % and 22.6 %, respectively,

which resulted in a provision for income taxes of $ 1,830,264 and $ 2,118,044 , respectively, and for the six month periods ended June 30,

2025 and 2024 was 22.0 % and 22.4 %, respectively, which resulted in a provision for income taxes of $ 3,062,866 and $ 4,262,833 , 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 decrease in the effective tax rate when compared to the prior year was primarily due to the Company’s decreased

state income tax provision.

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

3 unchanged sentences

tax provisions and accruals.

Revenues from Contracts with Customers

Revenues from Contracts

with Customers

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

30 unchanged sentences

30, 2025 (Unaudited)

Revenues from Contracts with Customers (Continued)

Revenues from Contracts

with Customers (Continued)

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

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

Contract Balances

Receivables (1)

Contract Asset

Contract Liability

Opening (December 31, 2024)

Closing (March 31, 2025)

Closing (June 30, 2025)

Increase/(decrease)

Contract Balances

Receivables (1)

Contract Asset

Contract Liability

Opening (December 31, 2023)

1 unchanged sentence

Increase/(decrease)

(1) Included in Receivables,

net on the condensed consolidated balance sheets

amount of revenue recognized and included in the opening contract liability balance for the three month periods ended March 31, 2025

and 2024 was $ 1,159,212 and $ 1,506,114 , respectively.

in Receivables, net on the condensed consolidated balance sheets

amount of revenue recognized and included in the opening contract liability balance for the three month periods ended June 30, 2025 and

2024 was $ 1,164,177 and $ 1,429,381 , respectively, and for the six month periods ended June 30, 2025 and 2024 was $ 2,323,389 and $ 2,935,495 ,

respectively.

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

3 unchanged sentences

of Revenues of the Cemetery and Mortuary Contracts

Three Months Ended

Major goods/service lines

Major goods/service

Net mortuary and cemetery

Timing of Revenue Recognition

Timing of Revenue

Goods transferred at a point in time

Services transferred at a point in time

Services transferred at

a point in time

Net mortuary and cemetery

4 unchanged sentences

Schedule of Receivable

As of March 31, 2025

As of December 31, 2024

June 30, 2025

December 31, 2024

Contracts with customers

8 unchanged sentences

of Allowance Credit Losses

Three Months Ended

Beginning balance - March 31, 2025

Change in provision for

credit losses (1)

Ending balance - June 30, 2025

Beginning balance - March 31, 2024

Change in provision for

credit losses (1)

Ending balance - June 30, 2024

Included in other expenses on the condensed consolidated statements of

Beginning balance - December 31, 2024

Change in provision for credit losses (1)

Ending balance - March 31, 2025

Change in provision for

credit losses (1)

Ending balance - June 30, 2025

Beginning balance - December 31, 2023

Change in provision for credit losses (1)

Ending balance - March 31, 2024

(1) Included in other

expenses on the condensed consolidated statements of earnings

Change in provision for

credit losses (1)

Ending balance - June 30, 2024

Included in other expenses on the condensed consolidated statements of

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

1 unchanged sentence

30, 2025 (Unaudited)

Cemetery Perpetual Care Trust Investments and Obligation and Restricted Assets

Cemetery Perpetual Care

Trust Investments and Obligation and Restricted Assets

Perpetual Care Trust Investments and Obligation

6 unchanged sentences

Care Obligation in the accompanying consolidated balance sheets .

components of cemetery perpetual care investments and obligation as of March 31, 2025, are as follows:

components of cemetery perpetual care investments and obligation as of June 30, 2025, are as follows:

of Investments and Obligation

Amortized Cost

Gross Unrealized Gains

Gross Unrealized Losses

Estimated Fair Value

March 31, 2025:

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

Treasury securities and obligations of U.S.

Unrealized Gains

Unrealized Losses

June 30, 2025:

Fixed maturity securities, available for sale,

at estimated fair value:

securities and obligations of U.S.

Government agencies

Obligations of states and political subdivisions

Total fixed maturity securities available for sale

of states and political subdivisions

fixed maturity securities available for sale

Equity securities at estimated fair value:

Common stock:

Industrial, miscellaneous and all other

Industrial, miscellaneous

and all other

$ ( 229,299 )

Total equity securities at estimated fair value

equity securities at estimated fair value

$ ( 229,299 )

Mortgage loans held for investment at amortized cost:

Mortgage loans held for investment at amortized

Residential construction

Allowance for credit losses

Total mortgage loans held for investment

Total mortgage loans

held for investment

Other investments

Cash and cash equivalents

Accrued investment income

Total cemetery perpetual care trust investments

Cemetery perpetual care obligation

Accrued investment

Total cemetery perpetual

care trust investments

Cemetery perpetual

care obligation

$ ( 5,788,630 )

Trust investments in excess of trust obligations

Trust investments

in excess of trust obligations

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

1 unchanged sentence

30, 2025 (Unaudited)

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

Cemetery Perpetual Care

Trust Investments and Obligations and Restricted Assets (Continued)

components of cemetery perpetual care investments and obligation as of December 31, 2024, are as follows:

Amortized Cost

Gross Unrealized Gains

Gross Unrealized Losses

Estimated Fair Value

December 31, 2024:

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

Treasury securities and obligations of U.S.

Unrealized Gains

Unrealized Losses

Fixed maturity securities, available for sale,

at estimated fair value:

securities and obligations of U.S.

Government agencies

Obligations of states and political subdivisions

Total fixed maturity securities available for sale

of states and political subdivisions

fixed maturity securities available for sale

Equity securities at estimated fair value:

Common stock:

Industrial, miscellaneous and all other

Industrial, miscellaneous

and all other

$ ( 226,007 )

Total equity securities at estimated fair value

equity securities at estimated fair value

$ ( 226,007 )

Mortgage loans held for investment at amortized cost:

Mortgage loans held for investment at amortized

Residential construction

Allowance for credit losses

Allowance for

credit losses

Allowance for credit losses

Total mortgage loans held for investment

Total mortgage loans

held for investment

Cash and cash equivalents

Accrued investment income

Total cemetery perpetual care trust investments

Cemetery perpetual care obligation

Accrued investment

Total cemetery perpetual

care trust investments

Cemetery perpetual

care obligation

$ ( 5,642,693 )

Trust investments in excess of trust obligations

Trust investments

in excess of trust obligations

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2025 (Unaudited)

Cemetery Perpetual Care

Trust Investments and Obligations and Restricted Assets (Continued)

Maturity Securities

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

of March 31, 2025 and December 31, 2024.

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

maturity securities:

of June 30, 2025 and December 31, 2024.

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

Schedule of Fair Value of Fixed Maturity Securities

Unrealized Losses for Less than Twelve Months

Unrealized Losses for More than Twelve Months

Total Unrealized Loss

March 31, 2025

Treasury securities and obligations of U.S.

Losses for Less than Twelve Months

Losses for More than Twelve Months

Unrealized Loss

June 30, 2025

Treasury securities and obligations

Government agencies

Obligations of states and political subdivisions

Obligations of states

and political subdivisions

December 31, 2024

Treasury securities and obligations of U.S.

Treasury securities and obligations of

Government agencies

Obligations of states and political subdivisions

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

31, 2025 (Unaudited)

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

holdings were comprised of three securities with fair values aggregating 99.1 % of the aggregate amortized cost as of March 31, 2025.

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

No credit losses have been recognized for the three month periods ended March 31, 2025 and 2024, since the increase in unrealized

losses is primarily a result of increases in interest rates.

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

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

table below presents the amortized cost and estimated fair value of fixed maturity securities available for sale as of March 31, 2024,

Obligations of states

and political subdivisions

holdings were comprised of three securities with fair values aggregating 99.1 % of the aggregate amortized cost as of June 30, 2025.

holdings were comprised of four securities with fair values aggregating 99.1 % of aggregate amortized cost as of December 31, 2024.

credit losses have been recognized for the three and six month periods ended June 30, 2025 and 2024, since the unrealized losses are

primarily the result of increases in interest rates.

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

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

table below presents the amortized cost and estimated fair value of fixed maturity securities available for sale as of June 30, 2025,

by contractual maturity.

10 unchanged sentences

30, 2025 (Unaudited)

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

Cemetery Perpetual Care

Trust Investments and Obligations and Restricted Assets (Continued)

Company has also established certain restricted assets to provide for future merchandise and service obligations incurred in connection

7 unchanged sentences

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

assets as of March 31, 2025, are summarized as follows:

assets as of June 30, 2025, 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, 2025:

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

Treasury securities and obligations of U.S.

Unrealized Gains

Unrealized Losses

June 30, 2025:

Fixed maturity securities, available for sale,

at estimated fair value:

securities and obligations of U.S.

Government agencies

Obligations of states and political subdivisions

Corporate securities including public utilities

Total fixed maturity securities available for sale

Obligations of states and

political subdivisions

securities including public utilities

fixed maturity securities available for sale

Equity securities at estimated fair value:

Common stock:

Industrial, miscellaneous and all other

Industrial, miscellaneous

and all other

$ ( 396,055 )

Total equity securities at estimated fair value

equity securities at estimated fair value

$ ( 396,055 )

Mortgage loans held for investment at amortized cost:

loans held for investment at amortized cost:

Residential construction

Allowance for credit losses

Total mortgage loans held for investment

Total mortgage loans

held for investment

Other investments

1 unchanged sentence

Accrued investment income

Total restricted assets

(1) Including cash

and cash equivalents of $ 10,828,570 for the life insurance and mortgage segments.

Total restricted

Including cash and cash equivalents of $ 11,520,474

for the life insurance and mortgage segments.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

1 unchanged sentence

30, 2025 (Unaudited)

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

Cemetery Perpetual Care

Trust Investments and Obligations and Restricted Assets (Continued)

assets as of December 31, 2024, are summarized as follows:

Amortized Cost

Gross Unrealized Gains

Gross Unrealized Losses

Estimated Fair Value

December 31, 2024:

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

Treasury securities and obligations of U.S.

Unrealized Gains

Unrealized Losses

Fixed maturity securities, available for sale,

at estimated fair value:

securities and obligations of U.S.

Government agencies

Obligations of states and political subdivisions

Corporate securities including public utilities

Total fixed maturity securities available for sale

Obligations of states and

political subdivisions

securities including public utilities

fixed maturity securities available for sale

Equity securities at estimated fair value:

Common stock:

Industrial, miscellaneous and all other

Industrial, miscellaneous

and all other

$ ( 489,852 )

Total equity securities at estimated fair value

equity securities at estimated fair value

$ ( 489,852 )

Mortgage loans held for investment at amortized cost:

Mortgage loans held for investment at amortized

Residential construction

Allowance for credit losses

Total mortgage loans held for investment

Total mortgage loans

held for investment

Other investments

1 unchanged sentence

Accrued investment income

Total restricted assets

(1) Including cash

and cash equivalents of $ 7,657,958

Total restricted

Including cash and cash equivalents of $ 7,657,958

for the life insurance and mortgage segments.

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

30, 2025 (Unaudited)

Cemetery Perpetual Care

Trust Investments and Obligations and Restricted Assets (Continued)

Maturity Securities

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

of March 31, 2025 and December 31, 2024.

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

maturity securities.

of June 30, 2025 and December 31, 2024.

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

Schedule of Fair Value of Fixed Maturity Securities

Unrealized Losses for Less than Twelve Months

Unrealized Losses for More than Twelve Months

Total Unrealized Loss

At March 31, 2025

Treasury securities and obligations of U.S.

Losses for Less than Twelve Months

Losses for More than Twelve Months

Unrealized Loss

At June 30, 2025

Treasury securities and obligations

Government agencies

Obligations of states and political subdivisions

Corporate securities including public utilities

Corporate securities including

public utilities

Total unrealized losses

At December 31, 2024

Treasury securities and obligations of U.S.

Treasury securities and obligations of

Government agencies

Obligations of states and political subdivisions

Corporate securities including public utilities

Corporate securities including

public utilities

Total unrealized losses

NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

31, 2025 (Unaudited)

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

holdings were comprised of nine securities with fair values aggregating 99.0 % of the aggregate amortized cost as of March 31, 2025.

holdings were comprised of 11 securities with fair values aggregating 99.5 % of the aggregate amortized cost as of June 30, 2025.

holdings were comprised of 15 securities with fair values aggregating 99.2 % of the aggregate amortized cost as of December 31, 2024.

No credit losses have been recognized for the three month periods ended March 31, 2025 and 2024, since the increase in unrealized losses

is primarily a result of increases in interest.

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

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

table below presents the amortized cost and estimated fair value of fixed maturity securities available for sale as of March 31, 2025,

No credit losses have been recognized for the three and six month periods ended June 30, 2025 and 2024, since the unrealized losses are

primarily the result of increases in interest rates.

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

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

table below presents the amortized cost and estimated fair value of fixed maturity securities available for sale as of June 30, 2025,

by contractual maturity.

11 unchanged sentences

30, 2025 (Unaudited)

Accumulated Other Comprehensive Income (loss)

Accumulated Other Comprehensive

Income (loss)

following table summarizes the changes in accumulated other comprehensive income (loss):

Schedule of Changes in Accumulated Other Comprehensive Income

Three Months Ended March 31,

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

of Changes in Accumulated Other Comprehensive Income (Loss)

Months Ended June 30,

Unrealized gains (losses) on fixed

maturity securities available for sale

$ ( 654,164 )

Amounts reclassified into net earnings

$ ( 1,689,264 )

Amounts reclassified into

Net unrealized gains (losses) before taxes

1 unchanged sentence

Tax (expense) benefit

Unrealized gains (losses) on restricted assets (1)

Tax (expense) benefit

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

( 1,361,701 )

( 1,408,167 )

Unrealized losses on restricted assets (1)

Unrealized gains (losses) on cemetery perpetual

care trust investments (1)

Unrealized gains (losses)

Tax (expense) benefit

Other comprehensive income (loss) changes

Other comprehensive

income (loss) changes

$ ( 517,129 )

(1) Fixed maturity

securities available for sale

following table presents the accumulated balances of other comprehensive income (loss) as of March 31, 2025:

$ ( 1,412,227 )

Fixed maturity securities available for sale

following table presents the accumulated balances of other comprehensive income (loss) as of June 30, 2025:

Schedule of Accumulated Balances of Other Comprehensive Income

Beginning Balance December 31, 2024

Change for the period

Ending Balance March 31,

Unrealized gains (losses) on fixed maturity securities

available for sale

Balance December 31, 2024

for the period

Balance June 30,

Unrealized gains (losses) on fixed

maturity securities available for sale

$ ( 6,941,915 )

$ ( 1,821,642 )

Unrealized gains (losses) on restricted assets (1)

Unrealized gains (losses) on cemetery perpetual

care trust investments (1)

Other comprehensive income (loss)

Unrealized losses on restricted assets (1)

Unrealized gains (losses)

on cemetery perpetual care trust investments (1)

Other comprehensive

income (loss)

$ ( 6,951,266 )

$ ( 1,830,143 )

(1) Fixed maturity

securities available for sale

Fixed maturity securities available for sale

following table presents the accumulated balances of other comprehensive income (loss) as of December 31, 2024:

Beginning Balance December 31, 2023

Change for the period

Ending Balance December 31,

Unrealized losses on fixed maturity securities

available for sale

Balance December 31, 2023

for the period

Balance December 31,

Unrealized losses on fixed maturity

securities available for sale

$ ( 6,876,629 )

$ ( 6,941,915 )

Unrealized gains (losses) on restricted assets (1)

Unrealized losses on cemetery perpetual

care trust investments (1)

Other comprehensive loss

Unrealized gains (losses) on restricted

Unrealized losses on

cemetery perpetual care trust investments (1)

Other comprehensive

$ ( 6,885,558 )

$ ( 6,951,266 )

(1) Fixed maturity

securities available for sale

Fixed maturity securities

available for sale

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

What changed 10-Q

Item 1. Financial Statements