SECURITY NATIONAL FINANCIAL CORP
For the period ended Jun 30, 2026. Filed Aug 10, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 10, 2026
SNFCA$9.48+1.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-11.
0001493152-26-022202
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-10.
0001493152-26-036814
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 44 previous paragraphs and 58 current paragraphs.
18 unchanged; 24 reworded; 14 added; 2 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 3 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
Profitability in the six-month period ended June 30, 2026 increased due to (a) a $978,000 increase in gains on investments and other assets, (b) a $408,000 increase in cemetery pre-need sales, (c) a $306,000 increase in net investment income, (d) a $212,000 increase in funeral home at-need sales, (e) a $155,000 increase in cemetery at-need sales, (f) a $14,000 decrease in intersegment expenses, and (g) a $2,000 decrease in cost of goods and services sold, which were partially offset by (i) a $715,000 increase in selling, general and administrative expenses, primarily attributable to a $461,000 increase in personnel expenses, (ii) a $306,000 increase in income tax expense, (iii) a $184,000 increase in amortization of deferred policy acquisition costs, and (iv) a $19,000 decrease in other revenues.
Current report
Policyholder benefits and claims decreased by $1,198,000 or 4.7%, to $24,317,000 for the three-month period ended June 30, 2026, from $25,515,000 for the comparable period in 2025. This decrease was primarily the result of a $941,000 decrease in future policy benefits and a $335,000 decrease in death benefits, which were partially offset by a $78,000 increase in surrender and other policy benefits.
Current report
Interest expense decreased by $189,000, or 14.6%, to $1,105,000 for the three-month period ended June 30, 2026, from $1,293,000 for the comparable period in 2025. This decrease was primarily due to a decrease of $98,000 in interest expense on bank loans and $91,000 in interest expense on mortgage warehouse lines of credit for loans held for sale.
Current report
Six-month period ended June 30, 2026, Compared to Six-month period ended June 30, 2025
Current report
Total revenues decreased by $8,626,000, or 5.0%, to $163,655,000 for the six-month period ended June 30, 2026, from $172,281,000 for the comparable period in 2025. Contributing to this decrease in total revenues was a $5,007,000 decrease in mortgage fee income, a $4,853,000 decrease in net investment income, a $2,405,000 decrease in insurance premiums and other considerations, and a $338,000 decrease in other revenues, which were partially offset by a $3,202,000 increase in gains on investments and other assets and a $775,000 increase in net funeral home and cemetery sales.
Current report
Mortgage fee income decreased by $5,007,000, or 9.2%, to $49,287,000, for the six-month period ended June 30, 2026, from $54,294,000 for the comparable period in 2025. This decrease was primarily due to a $3,830,000 decrease in secondary gains from mortgage loans sold to third-party investors into the secondary market reflecting lower overall loan volume and less favorable pricing conditions, a $1,507,000 decrease in the fair value of loans held for sale, and an $82,000 decrease in income from loan originations, which were partially offset by a $412,000 increase in the fair value of loan commitments.
Current report
Insurance premiums and other considerations decreased by $2,405,000, or 4.0%, to $57,560,000 for the six-month period ended June 30, 2026, from $59,965,000 for the comparable period in 2025. This decrease was primarily due to a decrease of $2,785,000 in first year premiums because of a decrease in sales, which was partially offset by an increase of $380,000 in renewal premiums.
Current report
Net investment income decreased by $4,853,000, or 12.2%, to $34,930,000 for the six-month period ended June 30, 2026, from $39,783,000 for the comparable period in 2025. This decrease was primarily attributable to a $5,806,000 decrease in mortgage loan interest resulting from a decline in the average balance of the mortgage loan portfolio held for investment, a $548,000 decrease in insurance assignment income, a $113,000 decrease in interest on cash and cash equivalents, a $29,000 decrease in policy loan interest, and an $11,000 decrease in fixed maturity securities income, which were partially offset by a $1,364,000 decrease in investment expenses, a $269,000 increase in other investment income, a $20,000 increase in real estate income, and a $1,000 increase in equity securities income.
Current report
Net funeral home and cemetery sales increased by $775,000, or 5.3%, to $15,333,000 for the six-month period ended June 30, 2026, from $14,558,000 for the comparable period in 2025. This increase was primarily due to a $408,000 increase in cemetery pre-need sales, a $212,000 increase in funeral home at-need sales, and a $155,000 increase in cemetery at-need sales.
Current report
Gains on investments and other assets increased by $3,202,000 to $4,931,000 for the six-month period ended June 30, 2026, from $1,729,000 for the comparable period in 2025. This increase in gains on investments and other assets was primarily due to a $2,639,000 increase in gains on equity securities primarily attributable to increases in the fair value of these equity securities, a $784,000 increase in gains on real estate, and a $10,000 increase in gains on other assets, which were partially offset by a $231,000 decrease in gains on fixed maturity securities.
Current report
Other revenues decreased by $338,000, or 17.3%, to $1,613,000 for the six-month period ended June 30, 2026, from $1,951,000 for the comparable period in 2025. This decrease was primarily due to a decrease of $338,000 in other miscellaneous revenues.
Current report
Selling, general and administrative expenses decreased by $8,167,000, or 8.9%, to $83,658,000 for the six-month period ended June 30, 2026, from $91,825,000 for the comparable period in 2025. This decrease was primarily the result of a $4,793,000 decrease in commissions, a $3,246,000 decrease in personnel expenses, a $317,000 decrease in rent and rent related expenses, a $297,000 decrease in advertising expense, a $47,000 decrease in depreciation on property and equipment, and a $23,000 decrease in costs related to funding mortgage loans, which were partially offset by a $556,000 increase in other expenses.
Current report
Funeral home and cemetery cost of goods and services sold decreased by $1,000, or 0.1%, to $2,411,000 for the six-month period ended June 30, 2026, from $2,412,000 for the comparable period in 2025. This decrease was primarily due to a decrease of $22,000 in at-need sales, which was partially offset by an increase of $21,000 in pre-need sales.
Current report
Two of the Company’s three mortgage warehouse lines of credit, through Western Alliance Bank and JPMorgan Chase Bank, are scheduled to mature on August 15, 2026. The Company is currently in the process of negotiating renewals of these facilities and anticipates that both will be renewed on substantially similar terms. However, there can be no assurance that such renewals will be completed. If these facilities are not renewed, the Company may need to secure alternative funding sources for its mortgage lending operations, which could result in less favorable terms and temporarily impact loan origination volumes. See Note 19 to the condensed consolidated financial statements for additional information regarding these warehouse lines.
Removed paragraphs (2)
Previous report
Item 2.** Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Previous report
Profitability in the three-month period ended March 31, 2026 decreased due to (a) a $353,000 increase in selling, general and administrative expenses, primarily attributable to a $195,000 increase in personnel expenses, (b) a $284,000 decrease in gains on investments and other assets, (c) a $116,000 increase in amortization of deferred policy acquisition costs, (d) a $27,000 decrease in other revenues, and (e) a $4,000 decrease in funeral home at-need sales, which were partially offset by (i) a $305,000 increase in cemetery pre-need sales, (ii) a $231,000 increase in net investment income, (iii) a $133,000 increase in cemetery at-need sales, (iv) a $20,000 decrease in cost of goods and services sold, and (v) a $16,000 decrease in income tax expense, (vi) a $7,000 decrease in intersegment expenses.
Reworded paragraphs (24)
Previous wording
The following table shows the condensed financial results of the insurance operations for the three-month periods ended March 31, 2026, and 2025. See Note 16 to the condensed consolidated financial statements.
Current wording
The following table shows the condensed financial results of the insurance operations for the three and six month periods ended June 30, 2026, and 2025. See Note 16 to the condensed consolidated financial statements.
Previous wording
Profitability for the three-month period ended March 31, 2026 decreased due to (a) a $924,000 decrease in insurance premiums and other considerations, (b) a $914,000 decrease in net investment income, (c) a $211,000 decrease in other revenues, and (d) a $66,000 increase in amortization of deferred policy acquisition costs, which were partially offset by (i) a $916,000 decrease in policyholder benefits and claims, (ii) a $435,000 decrease in selling, general and administrative expenses, (iii) a $203,000 increase in intersegment revenue, (iv) a $122,000 decrease in income tax expense, (v) a $92,000 increase in gains on investments and other assets, (vi) a $49,000 decrease in intersegment expenses, and (vii) a $14,000 decrease in interest expense.
Current wording
Profitability for the six-month period ended June 30, 2026 decreased due to (a) a $5,221,000 decrease in net investment income, (b) a $2,405,000 decrease in insurance premiums and other considerations, (c) a $283,000 decrease in other revenues, and (d) a $62,000 increase in amortization of deferred policy acquisition costs, which were partially offset by (i) a $2,266,000 increase in gains on investments and other assets, (ii) a $2,114,000 decrease in policyholder benefits and claims, (iii) a $892,000 decrease in selling, general and administrative expenses, (iv) a $571,000 decrease in income tax expense, (v) a $113,000 decrease in interest expense, (vi) a $57,000 decrease in intersegment expenses, and (vii) a $54,000 increase in intersegment revenue.
Previous wording
The following table shows the condensed financial results of the funeral home and cemetery operations for the three-month periods ended March 31, 2026, and 2025. See Note 16 to the condensed consolidated financial statements.
Current wording
The following table shows the condensed financial results of the funeral home and cemetery operations for the three and six month periods ended June 30, 2026, and 2025. See Note 16 to the condensed consolidated financial statements.
Previous wording
SecurityNational Mortgage receives fees from borrowers that are involved in mortgage loan originations and refinancings, and secondary fees earned from third party investors that purchase the mortgage loans. Mortgage loans are generally sold with mortgage servicing rights (“MSRs”) released to third-party investors or retained by SecurityNational Mortgage. SecurityNational Mortgage currently retains the mortgage servicing rights on approximately 2.04% of its loan origination volume. These mortgage loans are serviced by either SecurityNational Mortgage or an approved third-party sub-servicer.
Current wording
SecurityNational Mortgage receives fees from borrowers that are involved in mortgage loan originations and refinancings, and secondary fees earned from third party investors that purchase the mortgage loans. Mortgage loans are generally sold with mortgage servicing rights (“MSRs”) released to third-party investors or retained by SecurityNational Mortgage. SecurityNational Mortgage currently retains the mortgage servicing rights on approximately 1.59% of its loan origination volume. These mortgage loans are serviced by either SecurityNational Mortgage or an approved third-party sub-servicer.
Previous wording
For the three-month periods ended March 31, 2026, and 2025, SecurityNational Mortgage originated 1,415 loans ($488,560,000 total loan volume principal amount) and 1,508 loans ($517,886,000 total loan volume principal amount), respectively.
Current wording
For the three and six month periods ended June 30, 2026, and 2025, SecurityNational Mortgage originated 3,011 loans ($1,036,088,000 total loan volume principal amount) and 3,375 loans ($1,134,783,000 total loan volume principal amount), respectively.
Previous wording
The following table shows the condensed financial results of the mortgage operations for the three-month periods ended March 31, 2026, and 2025. See Note 16 to the condensed consolidated financial statements.
Current wording
The following table shows the condensed financial results of the mortgage operations for the three and six month periods ended June 30, 2026, and 2025. See Note 16 to the condensed consolidated financial statements.
Previous wording
Losses for the three-month period ended March 31, 2026 decreased due to (a) a $1,988,000 decrease in personnel expenses, (b) a $1,285,000 decrease in commissions, (c) a $910,000 increase in the fair value of loan commitments, (d) a $556,000 increase in income from loan originations, (e) a $161,000 decrease in rent and rent related expenses, (f) a $110,000 decrease in interest expense, (g) a $35,000 decrease in depreciation on property and equipment, and (h) a $28,000 decrease in advertising expenses, which were partially offset by (i) a $2,245,000 decrease in the fair value of loans held for sale, (ii) a $540,000 decrease in secondary gains from investors, (iii) a $352,000 decrease in income tax benefit, (iv) a $259,000 increase in costs related to funding mortgage loans, (v) a $231,000 increase in other expenses, (vi) a $210,000 increase in intersegment expenses, (vii) a $153,000 increase in data processing and IT related expenses, (viii) a $50,000 decrease in intersegment revenues, (ix) a $43,000 decrease in gains on investments and other assets, (x) a $26,000 decrease in other revenues, and (xi) a $19,000 decrease in net investment income.
Current wording
Losses for the six-month period ended June 30, 2026 decreased due to (a) a $4,189,000 decrease in personnel expenses, (b) a $3,579,000 decrease in commissions, (c) a $412,000 increase in the fair value of loan commitments, (d) a $332,000 decrease in rent and rent related expenses, (e) a $254,000 decrease in advertising expenses, (f) a $201,000 decrease in interest expense, (g) a $63,000 decrease in depreciation on property and equipment, (h) a $61,000 increase in net investment income, and (i) a $23,000 decrease in costs related to funding mortgage loans, which were partially offset by (i) a $3,830,000 decrease in secondary gains from investors, (ii) a $1,507,000 decrease in the fair value of loans held for sale, (iii) a $788,000 decrease in income tax benefit, (iv) a $291,000 increase in data processing and IT related expenses, (v) a $161,000 increase in other expenses, (vi) an $82,000 decrease in income from loan originations, (vii) a $69,000 increase in intersegment expenses, (viii) a $57,000 decrease in intersegment revenues, (ix) a $42,000 decrease in gains on investments and other assets, and (x) a $36,000 decrease in other revenues.
Previous wording
Total revenues decreased by $3,011,000, or 3.6%, to $79,729,000 for the three-month period ended March 31, 2026, from $82,740,000 for the comparable period in 2025. Contributing to this decrease in total revenues was a $1,319,000 decrease in mortgage fee income, a $924,000 decrease in insurance premiums and other considerations, a $701,000 decrease in net investment income, a $264,000 decrease in other revenues, and a $235,000 decrease in gains on investments and other assets, which were partially offset by a $434,000 increase in net funeral home and cemetery sales.
Current wording
Total revenues decreased by $5,615,000, or 6.3%, to $83,926,000 for the three-month period ended June 30, 2026, from $89,541,000 for the comparable period in 2025. Contributing to this decrease in total revenues was a $4,152,000 decrease in net investment income, a $3,688,000 decrease in mortgage fee income, a $1,481,000 decrease in insurance premiums and other considerations, and a $74,000 decrease in other revenues, which were partially offset by a $3,438,000 increase in gains on investments and other assets and a $342,000 increase in net funeral home and cemetery sales.
Previous wording
Mortgage fee income decreased by $1,319,000, or 5.3%, to $23,490,000, for the three-month period ended March 31, 2026, from $24,809,000 for the comparable period in 2025. This decrease was primarily due to a $2,245,000 decrease in the fair value of loans held for sale and a $540,000 decrease in secondary gains from mortgage loans sold to third-party investors into the secondary market, which were partially offset by a $910,000 increase in the fair value of loan commitments and a $556,000 increase in income from loan originations.
Current wording
Mortgage fee income decreased by $3,688,000, or 12.5%, to $25,797,000, for the three-month period ended June 30, 2026, from $29,485,000 for the comparable period in 2025. This decrease was primarily due to a $3,290,000 decrease in secondary gains from mortgage loans sold to third-party investors into the secondary market reflecting lower overall loan volume and less favorable pricing conditions, and a $638,000 decrease in income from loan originations, and a $498,000 decrease in the fair value of loan commitments, which were partially offset by a $738,000 increase in the fair value of loans held for sale.
Previous wording
Insurance premiums and other considerations decreased by $924,000, or 3.1%, to $28,855,000 for the three-month period ended March 31, 2026, from $29,779,000 for the comparable period in 2025. This decrease was primarily due to a decrease of $966,000 in first year premiums, which was partially offset by an increase of $42,000 in renewal premiums.
Current wording
Insurance premiums and other considerations decreased by $1,481,000, or 4.9%, to $28,705,000 for the three-month period ended June 30, 2026, from $30,186,000 for the comparable period in 2025. This decrease was primarily due to a decrease of $1,820,000 in first year premiums because of a decrease in sales, which was partially offset by an increase of $339,000 in renewal premiums.
Previous wording
Net investment income decreased by $701,000, or 3.7%, to $18,501,000 for the three-month period ended March 31, 2026, from $19,202,000 for the comparable period in 2025. This decrease was primarily attributable to a $560,000 increase in investment expenses, a $355,000 decrease in interest on cash and cash equivalents, a $288,000 decrease in insurance assignment income, a $22,000 decrease in real estate income, and a $3,000 decrease in policy loan interest, which were partially offset by a $310,000 increase in mortgage loan interest, a $154,000 increase in other investment income, a $48,000 increase in fixed maturity securities income, and a $15,000 increase in equity securities income.
Current wording
Net investment income decreased by $4,152,000, or 20.2%, to $16,429,000 for the three-month period ended June 30, 2026, from $20,581,000 for the comparable period in 2025. This decrease was primarily attributable to a $6,116,000 decrease in mortgage loan interest resulting from a decline in the average balance of the mortgage loan portfolio held for investment, a $260,000 decrease in insurance assignment income, a $59,000 decrease in fixed maturity securities income, a $26,000 decrease in policy loan interest, and a $14,000 decrease in equity securities income, which were partially offset by a $1,923,000 decrease in investment expenses, a $242,000 increase in interest on cash and cash equivalents, a $115,000 increase in other investment income, and a $41,000 increase in real estate income.
Previous wording
Net funeral home and cemetery sales increased by $434,000, or 5.9%, to $7,734,000 for the three-month period ended March 31, 2026, from $7,300,000 for the comparable period in 2025. This increase was primarily due to a $305,000 increase in cemetery pre-need sales and a $133,000 increase in cemetery at-need sales, which were partially offset by a $4,000 decrease in funeral home at-need sales.
Current wording
Net funeral home and cemetery sales increased by $342,000, or 4.7%, to $7,600,000 for the three-month period ended June 30, 2026, from $7,258,000 for the comparable period in 2025. This increase was primarily due to a $216,000 increase in funeral home at-need sales, a $104,000 increase in cemetery pre-need sales, and a $22,000 increase in cemetery at-need sales.
Previous wording
Gains (losses) on investments and other assets decreased by $235,000 to $351,000 in net gains for the three-month period ended March 31, 2026, from $586,000 in net gains for the comparable period in 2025. This decrease in gains on investments and other assets was primarily due to a $426,000 decrease in gains on equity securities primarily attributable to decreases in the fair value of these equity securities and a $21,000 decrease in gains on fixed maturity securities, which were partially offset by a $157,000 increase in gains on real estate and a $55,000 increase in gains on other assets.
Current wording
Gains on investments and other assets increased by $3,438,000 to $4,580,000 for the three-month period ended June 30, 2026, from $1,142,000 for the comparable period in 2025. This increase in gains on investments and other assets was primarily due to a $3,065,000 increase in gains on equity securities primarily attributable to increases in the fair value of these equity securities and a $628,000 increase in gains on real estate, which were partially offset by a $210,000 decrease in gains on fixed maturity securities and a $45,000 decrease in gains on other assets.
Previous wording
Other revenues decreased by $264,000, or 24.9%, to $798,000 for the three-month period ended March 31, 2026, from $1,062,000 for the comparable period in 2025. This decrease was primarily due to a decrease of $264,000 in other miscellaneous revenues.
Current wording
Other revenues decreased by $74,000, or 8.3%, to $815,000 for the three-month period ended June 30, 2026, from $889,000 for the comparable period in 2025. This decrease was primarily due to a decrease of $74,000 in other miscellaneous revenues.
Previous wording
Amortization of deferred policy and pre-need acquisition costs and value of business acquired increased by $182,000, or 6.5%, to $2,979,000 for the three-month period ended March 31, 2026, from $2,797,000 for the comparable period in 2025. This increase is due to a $192,000 increase in the amortization of deferred policy and pre-need acquisition costs due to an increase in the average outstanding balance. This increase was partially offset by a $10,000 decrease in the amortization of value of business acquired due to no new deferrals and a decreasing average outstanding balance.
Current wording
Amortization of deferred policy and pre-need acquisition costs and value of business acquired increased by $64,000, or 2.2%, to $2,938,000 for the three-month period ended June 30, 2026, from $2,874,000 for the comparable period in 2025. This increase is due to a $74,000 increase in the amortization of deferred policy and pre-need acquisition costs due to an increase in the average outstanding balance, which was partially offset by a $10,000 decrease in the amortization of value of business acquired due to no new deferrals and a decreasing average outstanding balance.
Previous wording
Selling, general and administrative expenses decreased by $2,936,000, or 6.7%, to $40,928,000 for the three-month period ended March 31, 2026, from $43,864,000 for the comparable period in 2025. This decrease was primarily the result of a $1,645,000 decrease in commissions, a $1,581,000 decrease in personnel expenses, a $166,000 decrease in rent and rent related expenses, an $87,000 decrease in advertising expense, and a $35,000 decrease in depreciation on property and equipment, which were partially offset by a $319,000 increase in other expenses and a $259,000 increase in costs related to funding mortgage loans.
Current wording
Selling, general and administrative expenses decreased by $5,231,000, or 10.9%, to $42,730,000 for the three-month period ended June 30, 2026, from $47,961,000 for the comparable period in 2025. This decrease was primarily the result of a $3,148,000 decrease in commissions, a $1,665,000 decrease in personnel expenses, a $282,000 decrease in costs related to funding mortgage loans, a $210,000 decrease in advertising expense, a $151,000 decrease in rent and rent related expenses, and a $12,000 decrease in depreciation on property and equipment, which were partially offset by a $237,000 increase in other expenses.
Previous wording
Funeral home and cemetery cost of goods and services sold decreased by $20,000, or 1.6%, to $1,233,000 for the three-month period ended March 31, 2026, from $1,253,000 for the comparable period in 2025. This decrease was primarily due to a decrease of $18,000 in at-need sales and decrease of $2,000 in pre-need sales.
Current wording
Funeral home and cemetery cost of goods and services sold increased by $18,000, or 1.6%, to $1,177,000 for the three-month period ended June 30, 2026, from $1,159,000 for the comparable period in 2025. This increase was primarily due to an increase of $22,000 in pre-need sales, which was partially offset by a decrease of $4,000 in at-need sales.
Previous wording
Income tax expense increased by $214,000, or 11.7%, to $2,051,000 for the three-month period ended March 31, 2026, from $1,837,000 for the comparable period in 2025. This increase was primarily due to an increase in earnings before income taxes for 2026 compared to 2025. The Company’s overall effective tax rate increased from 22.3% for 2025 to 22.7% in 2026, a 0.4% increase in the effective tax rate or a 1.8% change. This increase was primarily due to certain permanent tax adjustments that are higher when compared to the prior year.
Current wording
Income tax expense increased by $309,000, or 13.1%, to $2,677,000 for the three-month period ended June 30, 2026, from $2,368,000 for the comparable period in 2025. This increase was primarily due to an increase in earnings before income taxes for 2026 compared to 2025. The Company’s overall effective tax rate increased from 22.1% for 2025 to 23.0% in 2026, a 0.9% increase in the effective tax rate or a 4.1% change. This increase was primarily due to certain permanent tax adjustments that are higher when compared to the prior year.
Previous wording
Policyholder benefits and claims decreased by $916,000 or 3.6%, to $24,539,000 for the three-month period ended March 31, 2026, from $25,455,000 for the comparable period in 2025. This decrease was primarily the result of a $679,000 decrease in future policy benefits, a $156,000 decrease in death benefits, and an $81,000 decrease in surrender and other policy benefits.
Current wording
Policyholder benefits and claims decreased by $2,114,000 or 4.1%, to $48,857,000 for the six-month period ended June 30, 2026, from $50,971,000 for the comparable period in 2025. This decrease was primarily the result of a $1,619,000 decrease in future policy benefits, a $491,000 decrease in death benefits, and a $4,000 decrease in surrender and other policy benefits.
Previous wording
Interest expense decreased by $123,000, or 11.0%, to $996,000 for the three-month period ended March 31, 2026, from $1,119,000 for the comparable period in 2025. This decrease was primarily due to a decrease of $110,000 in interest expense on mortgage warehouse lines of credit for loans held for sale and a decrease of $13,000 in interest expense on bank loans.
Current wording
Interest expense decreased by $312,000, or 12.9%, to $2,101,000 for the six-month period ended June 30, 2026, from $2,413,000 for the comparable period in 2025. This decrease was primarily due to a decrease of $201,000 in interest expense on mortgage warehouse lines of credit for loans held for sale and a decrease of $111,000 in interest expense on bank loans.
Previous wording
During the three-month periods ended March 31, 2026, and 2025, the Company’s operations provided cash of approximately $32,940,000 and of approximately $9,586,000, respectively. The increase in cash provided by operations was due primarily to a decrease in originations of loans held for sale and an increase in net earnings.
Current wording
During the six-month periods ended June 30, 2026, and 2025, the Company’s operations provided cash of approximately $36,934,000 and of approximately $1,905,000, respectively. The increase in cash provided by operations was due primarily to a decrease in originations of loans held for sale and an increase in net earnings.
Previous wording
The Company’s investment policy is also to invest predominantly in fixed maturity securities, real estate, mortgage loans, and warehousing of mortgage loans. The warehoused mortgage loans are typically held for sale on a short-term basis before selling the loans to investors in accordance with the requirements and laws governing the Company’s life insurance subsidiaries. Bonds owned by the insurance subsidiaries amounted to $350,683,000 (at estimated fair value) and $365,986,000 (at estimated fair value) as of March 31, 2026, and December 31, 2025, respectively. This represented 34.2% and 35.2% of the total investments of the Company as of March 31, 2026, and December 31, 2025, respectively. Generally, all bonds owned by the life insurance subsidiaries are rated by the National Association of Insurance Commissioners. Under this rating system, there are six categories used for the rating of bonds. As of March 31, 2026, 1.7% (or $5,945,000) and as of December 31, 2025, 1.6% (or $5,825,000) of the Company’s total bond investments were invested in bonds in rating categories three through six, which are considered non-investment grade.
Current wording
The Company’s investment policy is also to invest predominantly in fixed maturity securities, real estate, mortgage loans, and warehousing of mortgage loans. The warehoused mortgage loans are typically held for sale on a short-term basis before selling the loans to investors in accordance with the requirements and laws governing the Company’s life insurance subsidiaries. Bonds owned by the insurance subsidiaries amounted to $363,471,000 (at estimated fair value) and $365,986,000 (at estimated fair value) as of June 30, 2026, and December 31, 2025, respectively. This represented 40.1% and 35.2% of the total investments of the Company as of June 30, 2026, and December 31, 2025, respectively. Generally, all bonds owned by the life insurance subsidiaries are rated by the National Association of Insurance Commissioners. Under this rating system, there are six categories used for the rating of bonds. As of June 30, 2026, 1.6% (or $5,966,000) and as of December 31, 2025, 1.6% (or $5,825,000) of the Company’s total bond investments were invested in bonds in rating categories three through six, which are considered non-investment grade.
Previous wording
The Company’s total capitalization of stockholders’ equity, bank and other loans payable was $534,276,000 as of March 31, 2026, as compared to $508,757,000 as of December 31, 2025. This increase was primarily due to an increase of $15,147,000 in stockholders’ equity and an increase of $10,372,000 in bank loans and other loans payable. Stockholders’ equity as a percentage of total capitalization was 79.6% and 80.7% as of March 31, 2026, and December 31, 2025, respectively.
Current wording
The Company’s total capitalization of stockholders’ equity, bank and other loans payable was $555,266,000 as of June 30, 2026, as compared to $508,757,000 as of December 31, 2025. This increase was primarily due to an increase of $22,667,000 in stockholders’ equity and an increase of $23,842,000 in bank and other loans payable. Stockholders’ equity as a percentage of total capitalization was 78.0% and 80.7% as of June 30, 2026, and December 31, 2025, respectively.
Previous wording
The combined statutory capital and surplus of the Company’s life insurance subsidiaries was approximately $140,204,000 and $139,068,000 as of March 31, 2026, and December 31, 2025, respectively. The life insurance subsidiaries cannot pay a dividend to their parent company without the approval of state insurance regulatory authorities.
Current wording
The combined statutory capital and surplus of the Company’s life insurance subsidiaries was approximately $144,894,000 and $139,068,000 as of June 30, 2026, and December 31, 2025, respectively. The life insurance subsidiaries cannot pay a dividend to their parent company without the approval of state insurance regulatory authorities.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Amortization of deferred policy and pre-need acquisition costs and value of business acquired increased by $247,000, or 4.4%, to $5,917,000 for the six-month period ended June 30, 2026, from $5,670,000 for the comparable period in 2025. This increase is due to a $265,000 increase in the amortization of deferred policy and pre-need acquisition costs due to an increase in the average outstanding balance, which was partially offset by an $18,000 decrease in the amortization of value of business acquired due to no new deferrals and a decreasing average outstanding balance.
Current report — wording carried from elsewhere
Income tax expense increased by $523,000, or 12.4%, to $4,728,000 for the six-month period ended June 30, 2026, from $4,205,000 for the comparable period in 2025. This increase was primarily due to an increase in earnings before income taxes for 2026 compared to 2025. The Company’s overall effective tax rate increased from 22.1% for 2025 to 22.8% in 2026, a 0.7% increase in the effective tax rate or a 3.1% change. This increase was primarily due to certain permanent tax adjustments that are higher when compared to the prior year.