~~See Note 20 regarding non cash transactions included in the acquisitions of Rivera Funerals, Cremations and Memorial Gardens and Holbrook Mortuary~~

Reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents as shown in the consolidated statements of cash flows is presented in the table below:

Security National Financial Corporation and its wholly owned subsidiaries (the “Company”) operate in three reportable business segments: life insurance, cemetery and mortuary, and mortgages. The life insurance segment is engaged in the business of selling and servicing selected lines of life insurance, annuity products and accident and health insurance marketed primarily in the states located in western, mid-western and southern regions of the United States. The cemetery and mortuary segment of the Company consists of eight mortuaries and five cemeteries in Utah, one cemetery in California, and four mortuaries and one cemetery in New Mexico. The mortgage segment is an approved government and conventional lender that originates and underwrites residential and commercial loans for new construction, existing homes, and real estate projects primarily in Florida, Nevada, Texas, and Utah.

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”).

These consolidated financial statements include the financial statements of the Company and its ~~majority~~wholly owned subsidiaries. All intercompany transactions and accounts have been eliminated in consolidation.

Management of the Company has made ~~a number of~~several estimates and assumptions related to the reported amounts of assets and liabilities, reported amounts of revenues and expenses, and the disclosure of contingent assets and liabilities to prepare these financial statements in conformity with GAAP. Actual results could differ from those estimates.

Material estimates that are particularly susceptible to significant changes in the near term are those used in determining the value of derivative assets and liabilities; those used in determining deferred acquisition costs and the value of business acquired; those used in determining the value of mortgage loans foreclosed to real estate held for ~~investment;~~investment or sale; those used in determining the liability for future policy benefits and unearned revenue; those used in determining the estimated future costs for pre-need sales; those used in determining the value of mortgage servicing rights; those used in determining ~~allowances for loan losses for mortgage~~the value of loans held for ~~investment;~~sale; those used in determining allowances for credit losses; those used in determining loan loss reserve; and those used in determining deferred tax assets and liabilities. Although some variability is inherent in these estimates, management believes the amounts provided are fairly stated in all material respects.

The Company’s management determines the appropriate classifications of investments in fixed maturity securities and equity securities at the acquisition date and re-evaluates the classifications at each balance sheet date.

Fixed maturity securities available for sale are carried at estimated fair value. Changes in fair values are reported as unrealized gains or losses and are recorded in accumulated other comprehensive ~~income.~~income (loss).

Equity securities are carried at estimated fair value. Changes in fair values are reported as unrealized gains or losses and are recorded through net earnings as a component of gains (losses) on investments and other assets.

Mortgage loans held for investment are carried at their unpaid principal balances adjusted for net deferred fees, ~~net~~charge-offs, premiums, discounts, ~~charge-offs~~ and the related allowance for ~~loan~~credit losses. Interest income is included in net investment income on the consolidated statements of earnings and is recognized when earned. The Company defers related material loan origination fees, net of related direct loan origination costs, and amortizes the net fees over the term of the loans. Origination fees are included in net investment income on the 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 ~~will fund a loan~~requires that loans not to exceed 80% of the ~~loan’s collateral~~ fair market ~~value. Amounts over~~value of the respective loan collateral. For loans of more than 80% ~~will require~~of the fair market value of the respective loan collateral, additional collateral or mortgage insurance by an approved third-party ~~insurer.~~insurer is required.

Real estate held for investment is carried at cost, less accumulated depreciation provided on a straight-line basis over the estimated useful lives of the properties or is adjusted to a new basis for impairment in value, if any. Included, if any, are foreclosed ~~properties which the Company intends to hold for investment purposes.~~properties. These properties are recorded at the lower of cost or fair value upon foreclosure. Also, included ~~are~~is residential subdivision land ~~developments~~development which ~~are~~is carried at cost.

Real estate held for sale is carried at lower of cost or fair ~~value.~~value, less estimated costs to sell. Depreciation is not recognized on real estate classified as held for sale.

Other investments and policy loans are carried at the aggregate unpaid balances, less allowances for credit losses.

Accrued investment income refers to earned income from investments that has not yet been received by the Company.

Gains ~~and losses~~(losses) on investments (except for equity securities carried at fair value through net earnings) arise when investments are sold ~~(as determined~~and are recorded on ~~a specific identification basis) or are other than temporarily impaired. If in management’s judgment a decline in~~ the ~~value of an investment below cost is other than temporary,~~trade date and the cost of the ~~investment~~securities sold is ~~written down to fair value with a corresponding charge to earnings. Factors considered~~determined using the specific identification method. The provision (release) for credit losses for fixed maturity securities held for sale are also included in judging whether an impairment is other than temporary include: the financial condition, business prospects and credit worthiness of the issuer, the length of time that fair value has been less than cost, the relative amount of the decline, andgains (losses) on investments. See Note 2 for more information regarding the Company’s ~~ability and intent to hold the investment until the fair value recovers, which is not assured.~~evaluation of credit losses.

The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. The Company maintains its cash in bank deposit accounts, which at times exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents.

Accounting Standards Codification (“ASC”) No. 825, “Financial Instruments”, allows for the option to report certain financial assets and liabilities at fair value initially and at subsequent measurement dates with changes in fair value included in earnings. The option may be applied instrument by instrument, but it is irrevocable. The Company elected the fair value option for loans held for sale. The Company believes the fair value option most closely aligns the timing of the recognition of gains and costs. These loans are intended for sale and the Company believes that ~~the~~ fair value is the best indicator of the resolution of these loans. Electing fair value also reduces certain timing differences and better matches changes in the fair value of these assets with changes in the fair value of the related derivatives used for these assets. See Note 3 and Note 17 to Consolidated Financial Statements for additional disclosures regarding loans held for sale.

Mortgage fee income consists of origination fees, processing fees, interest income and ~~certain~~ other income related to the origination and sale of mortgage loans held for sale. All revenues and costs are recognized when the mortgage loan is funded and any changes in fair value are shown as a component of mortgage fee income. See Note 3 and Note 17 to Consolidated Financial Statements for additional disclosures regarding loans held for sale.

The Company, through its mortgage subsidiaries, sells mortgage loans to third-party investors without recourse unless defects are identified in the representations and warranties made at loan sale. It may be required, however, to repurchase a loan or pay a fee instead of ~~repurchase~~repurchasing under certain events, which include the following:

Loan purchase commitments generally specify a date 30 to 45 days after delivery upon which the underlying loans should be settled. Depending on market conditions, these commitment settlement dates can be extended at a cost to the Company.

It is the Company’s policy to cure any documentation problems regarding such loans at a minimal cost for up to a six-month ~~time~~ period and to pursue efforts to enforce loan purchase commitments from third-party investors concerning the loans. The Company believes that six months allows adequate time to remedy any documentation issues, to enforce purchase commitments, and to exhaust other alternatives. Remedial methods include the following:

Once purchase commitments have expired and other alternatives to remedy are exhausted, which could be earlier than the six-month ~~time~~ period, the loans are repurchased and transferred to the long-term investment portfolio at the lower of cost or fair value and previously recorded mortgage fee income that was to be received from a third-party investor is written off against the loan loss reserve.

~~Cost~~The cost for loans held for sale is equal to the amount paid to the warehouse bank and the amount originally funded by the Company. Fair value is often difficult to determine and may contain significant unobservable inputs, but is based on the following:

The appraised value of the real estate underlying the original mortgage loan adds support to the Company’s determination of fair value because if the loan becomes delinquent, the Company has sufficient value to collect the unpaid principal balance or the carrying value of the loan, thus minimizing credit losses.

~~The majority of~~Most loans originated are sold to third-party investors. The amounts expected to be sold to investors are shown on the consolidated balance sheets as loans held for sale.

The loan loss reserve is an estimate of probable losses at the balance sheet date that the Company will realize in the future on loans sold. The Company may be required to reimburse third-party investors for costs associated with early payoff of loans within six months of origination of such loans and to repurchase loans where there is a default in any of the first four monthly payments to the investors or, in lieu of repurchase, to pay a negotiated fee to the investors. The Company’s estimates are based upon historical loss experience and the best estimate of the probable loan loss liabilities.

Upon completion of a transfer that satisfies the conditions to be accounted for as a sale, the Company initially measures at fair value liabilities incurred in a sale relating to any guarantee or recourse provisions. The Company accrues a monthly allowance for indemnification losses to investors based on total production. This estimate is based on the Company’s historical experience and is included as a component of mortgage fee income. Subsequent updates to the recorded liability from changes in assumptions are recorded in selling, general and administrative expenses as a component of provision for loan loss reserve. The estimated liability for indemnification losses is included in other liabilities and accrued expenses.

The loan loss reserve analysis involves mortgage loans that have been sold to third-party investors, which were believed to have met investor underwriting guidelines at the time of sale, where the Company has received a demand from the investor. There are generally three types of demands: make whole, repurchase, or indemnification. These types of demands are further described as follows:

Make whole demand — A make whole demand occurs when an investor forecloses on a property and then sells the property. The make whole amount is calculated as the difference between the original unpaid principal balance, payments received, accrued interest and fees, less the sale proceeds.

Repurchase demand — A repurchase demand usually occurs when there is a significant payment default, error in underwriting or detected loan fraud.

Indemnification demand — On certain loans the Company has negotiated a set fee that is to be paid in lieu of repurchase. The fee varies by investor and by loan product type.

The Company believes the allowance for loan losses and the loan loss reserve represent probable loan losses incurred as of the balance sheet date.

Restricted assets are assets held in a trust account for future mortuary services and merchandise and consist of cash and cash equivalents; participations in mortgage loans held for investment with Security National Life Insurance Company (“Security National Life”); mutual funds carried at estimated fair value; equity securities carried at estimated fair value; and a surplus note with Security National Life (which is eliminated in consolidation).merchandise. Restricted assets also include escrows held for borrowers and investors under servicing and appraisal agreements relating to mortgage loans, funds held by warehouse banks in accordance with loan purchase agreements and funds held in escrow for certain real estate construction development projects. Additionally, the Company funded its medical benefit safe-harbor limit based on the qualified direct costs and has included this amount as a component of restricted cash. Additional information related to restricted assets is included in Notes 2 and 8 to Consolidated Financial Statements.

Cemetery endowment care trusts have been set up for five of the seven cemeteries owned by the Company. Under endowment care arrangements a portion of the price for each lot sold is withheld and invested in a portfolio of investments ~~similar to~~like those described in the prior paragraph. The earnings stream from the investments is designed to fund future maintenance and upkeep of the cemetery. Additional information related to cemetery perpetual care trust investments is included in Notes 2 and 8 to Consolidated Financial Statements.

The development of a cemetery involves not only the initial acquisition of raw land but also the installation of roads, water lines, landscaping, and other costs to establish a marketable cemetery lot. The costs of developing the cemetery are shown as an asset on the balance sheet. The amount on the balance sheet is reduced by the total cost assigned to the development of a particular lot when the criterion for recognizing a sale of that lot is met.

Commissions and other costs, net of commission and expense allowances for reinsurance ceded, that vary with and are primarily related to the production of new insurance business have been deferred. Deferred policy acquisition costs (“DAC”) for traditional life insurance are amortized over the premium paying period of the related policies using assumptions consistent with those used in computing policy benefit reserves. For interest-sensitive insurance products, deferred policy acquisition costs are amortized generally in proportion to the present value of expected gross profits from surrender charges, investment, mortality, and expense margins. This amortization is adjusted when estimates of current or future gross profits to be realized from a group of products are reevaluated. Deferred acquisition costs are written off when policies lapse or are surrendered.

When accounting for DAC, the Company considers internal replacements of insurance and investment contracts. An internal replacement is a modification in product benefits, features, rights, or coverage that occurs by the exchange of a contract for a new contract, or by amendment, endorsement, or rider to contract, or by the election of a feature or coverage within a contract. Modifications that result in a replacement contract that is substantially changed from the replaced contract are accounted for as an extinguishment of the replaced contract. Unamortized DAC, unearned revenue liabilities and deferred sales inducements from the replaced contract are written-off. Modifications that result in a contract that is substantially unchanged from the replaced contract are accounted for as a continuation of the replaced contract.

Value of business acquired (“VOBA”) is the present value of estimated future profits of the acquired business and is amortized ~~similar to~~like deferred policy acquisition costs.

At least annually, the Company tests the adequacy of the net benefit reserves (liability for future policy benefits, net of DAC and VOBA) recorded for life insurance and annuity products. The Company tests for recoverability by using the Company’s current best-estimate assumptions as to policyholder mortality, persistency, maintenance expenses and invested asset returns. These tests evaluate whether the present value of future contract-related cash flows will support the capitalized DAC and VOBA assets. These cash flows consist primarily of premium income, less benefits, and expenses. If the current contract liabilities plus the present value of future premiums is greater than the sum of the present values of future policy benefits, commissions, and expenses plus the current DAC and VOBA less unearned premium reserve balances, then the capitalized assets are deemed recoverable. The present values are calculated using the best estimate of the ~~after tax~~after-tax net investment earned rate.

Mortgage Servicing Rights (“MSR”) arise from contractual agreements between the Company and third-party investors (or their agents) when mortgage loans are sold. Under these contracts, the Company is obligated to retain and provide loan servicing functions on loans sold, in exchange for fees and other remuneration. The servicing functions typically performed include, among other responsibilities, collecting and remitting loan payments; responding to borrower inquiries; accounting for principal and interest, holding custodial (impound) funds for payment of property taxes and insurance premiums; counseling delinquent mortgagors; and supervising the acquisition of real estate owned and property dispositions.

The total residential mortgage loans serviced for others consist primarily of agency conforming fixed-rate mortgage loans. The value of MSRs is derived from the net cash flows associated with the servicing contracts. The Company receives a servicing fee of generally about 0.25% annually on the remaining outstanding principal balances of the loans. Based on the result of the cash flow analysis, an asset or liability is recorded for mortgage servicing rights. The servicing fees are collected from the monthly payments made by the mortgagors. The Company generally receives other remuneration including rights to various mortgagor-contracted fees such as late charges, and collateral reconveyance charges and the Company is generally entitled to retain the interest earned on funds held pending remittance of mortgagor principal, interest, tax, and insurance payments. Contractual servicing fees and late fees are included in other revenues on the consolidated statements of earnings.

The Company’s subsequent accounting for MSRs is based on the class of MSRs. The Company has identified two classes of MSRs: MSRs backed by mortgage loans with an initial term of 30 years and MSRs backed by mortgage loans with an initial term of 15 years. The Company distinguishes between these classes of MSRs due to their differing sensitivities to change in value as the result of changes in the market. After being initially recorded at fair value, MSRs backed by mortgage loans are accounted for using the amortization method. Amortization expense is included in other expenses on the consolidated statements of earnings. MSR amortization is determined by amortizing the MSR balance in proportion to, and over the period of the estimated future net servicing income of the underlying financial assets.

Interest rate risk, prepayment risk, and default risk are inherent risks in MSR valuation. Interest rate changes largely drive prepayment rates. Refinance activity generally increases as rates decline. A significant decrease in rates beyond expectation could cause a decline in the value of the MSR. On the contrary, if rates increase borrowers are less likely to refinance or prepay their mortgage, which extends the duration of the loan and MSR values are likely to rise. Because of these risks, discount rates and prepayment speeds are used to estimate the fair value.

The Company periodically assesses MSRs for impairment. Impairment occurs when the current fair value of the MSR falls below the asset’s carrying value (carrying value is the amortized cost reduced by any related valuation allowance). If MSRs are impaired, the impairment is recognized in current period earnings and the carrying value of the MSRs is adjusted through a valuation allowance.

~~Management~~The Company periodically reviews the various loan strata to determine whether the value of the MSRs in ~~a given~~each stratum is impaired and likely to recover. When management deems recovery of the value to be unlikely in the foreseeable future, a write-down of the cost of the MSRs for that stratum to its estimated recoverable value is charged to the valuation allowance.

Property and equipment are recorded at cost. Depreciation is calculated principally on the straight-line method over the estimated useful lives of the assets which range from three to forty years. Leasehold improvements paid for by the Company as a lessee are amortized over the lesser of the useful life or remaining lease terms.

Long-lived assets to be held and used, including property and equipment and real estate held for investment, are reviewed for impairment whenever events or changes in circumstances indicate that the related carrying amount may not be recoverable. When required, impairment losses on assets to be held and used are recognized based on the fair value of the asset, and long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. ~~No impairment of long-lived assets has been recognized in the accompanying financial statements except for certain impairments of real estate held for sale as disclosed in Note 2.~~

The Company is exposed to price risk due to the potential impact of changes in interest rates on the values of loan commitments from the time a loan commitment is made to an applicant to the time the loan that would result from the exercise of that loan commitment is funded. Managing price risk is complicated by the fact that the ultimate percentage of loan commitments that will be exercised (i.e., the number of loans that will be funded) fluctuates. The probability that a loan will not be funded, or the loan application is denied or withdrawn within the terms of the commitment is driven by ~~a number of~~several factors, particularly the change, if any, in mortgage rates following the issuance of the loan commitment.

In general, the probability of funding increases if mortgage rates rise and decreases if mortgage rates fall. This is due primarily to the relative attractiveness of current mortgage rates compared to the applicant’s committed rate. The probability that a loan will not be funded within the terms of the mortgage loan commitment also is influenced by the source of the applications (retail, broker, or correspondent channels), proximity to rate lock expiration, purpose for the loan (purchase or refinance), product type and the application approval status. The Company has developed fallout estimates using historical data that ~~take into account~~consider all of the variables, as well as renegotiations of rate and point commitments that tend to occur when mortgage rates fall. These fallout estimates are used to estimate the number of loans that the Company expects to be funded within the terms of the loan commitments and are updated periodically to reflect the most current data.

The Company estimates the fair value of a loan commitment based on the change in estimated fair value of the underlying mortgage loan, quoted mortgage-backed securities (“MBS”) prices, estimates of the fair value of mortgage servicing rights, and an estimate of the probability that the mortgage loan will fund within the terms of the commitment. The change in fair value of the underlying mortgage loan is measured from the date the loan commitment is issued and is shown net of expenses. Following issuance, the value of a loan commitment can be either positive or negative depending upon the change in value of the underlying mortgage loans. Fallout rates and other factors from the Company’s recent historical data are used to estimate the quantity and value of mortgage loans that will fund within the terms of the commitments.

The Company utilizes forward commitments to economically hedge the price risk associated with its outstanding mortgage loan commitments. A forward commitment protects the Company from losses on sales of the loans arising from exercise of the loan commitments. Management expects these types of commitments will experience changes in fair value opposite to changes in fair value of the loan commitments, thereby reducing earnings volatility related to the recognition in earnings of changes in the values of the commitments.

The net changes in fair value of loan commitments and forward sale commitments are shown in current earnings as a component of mortgage fee income on the consolidated statements of earnings. Mortgage banking derivatives are shown in other assets and other liabilities and accrued expenses on the consolidated balance sheets.

The Company ~~uses a strategy~~discontinued its use of selling “out of the money” call options on its equity securities ~~as a source of revenue. The options give~~and the ~~purchaser the right to buy from the Company specified equity securities at a set price up to a pre-determined date in the future. The Company uses the strategy~~use of selling put options as a ~~means~~source of generating cash or purchasing equity securities at lower than current market prices. The Company receives an immediate payment of cash for the value of the option and establishes a liability for the fair value of the option. The liability for options is adjusted to fair value at each reporting date. In the event a call option is exercised, the Company sells the equity security at a favorable price enhanced by the value of the option that was sold. If the option expires unexercised, the Company recognizes a gain from the expired option. In the event a put option is exercised, the Company acquires an equity security at the strike price of the option reduced by the value received from the sale of the put option. The equity security is then treated as a normal equity securityrevenue in the ~~Company’s portfolio.~~first quarter of 2023. The net changes in the fair value of call and put options are shown in current earnings as a component of realized gains (losses) on investments and other assets. Call and put options are shown in other liabilities and accrued expenses on the condensed consolidated balance sheets.

~~Allowance~~Allowances for ~~Doubtful Accounts and Loan~~Credit Losses ~~and Impaired Loans~~

The Company records ~~an allowance and recognizes an expense~~allowances for ~~potential~~current expected credit losses from fixed maturity securities available for sale, mortgage loans held for investment, other investments, and receivables in accordance with GAAP. The allowances for credit losses are valuation accounts that are reported as a reduction of the financial asset’s cost basis and are measured on a pool basis when similar risk characteristics exist. The Company estimates allowances for credit losses using relevant available information from both internal and external sources. The Company considers its historical loss experience, analyzes current market conditions and forecasts and uses third-party assistance to arrive at current expected credit losses. Amounts are written off against the allowance for credit losses when determined to be uncollectible. See below under Recent Accounting Pronouncements regarding the adoption of ASU 2016-13. See Notes 2 and 4 to Consolidated Financial Statements regarding the Company’s evaluation of allowances for credit losses.

Receivables are the result of cemetery and mortuary operations, mortgage loan operations and life insurance operations. The allowance is based upon the Company’s historical experience for collectively evaluated impairment. Other allowances are based upon receivables individually evaluated for impairment. Collectability of the cemetery and mortuary receivables is significantly influenced by current economic conditions. The critical issues that impact recovery of mortgage loan operations are interest rate risk, loan underwriting, new regulations and the overall economy.

The Company provides for losses on its mortgage loans held for investment through an allowance for loan losses (a contra-asset account). The allowance is comprised of two components. The first component is an allowance for collectively evaluated impairment that is based upon the Company’s historical experience in collecting similar receivables. The second component is based upon individual evaluation of loans that are determined to be impaired. As a practical expedient, upon determining impairment, the Company establishes an individual impairment allowance based upon an assessment of the fair value of the underlying collateral. See the schedules in Note 2 for additional information. In addition, when a mortgage loan is past due more than 90 days, the Company does not accrue any interest income. When a loan becomes delinquent, the Company proceeds to foreclose on the real estate and all expenses for foreclosure are expensed as incurred. Once foreclosed, an adjustment for the lower of cost or fair value is made, if necessary, and the amount is classified as real estate held for investment or held for sale.

The allowance for losses on mortgage loans held for investment could change based on changes in the value of the underlying collateral, the performance status of the loans, or the Company’s actual collection experience. The actual losses could change, in the near term, from the established allowance, based upon the occurrence or non-occurrence of these events.

For purposes of determining the allowance for 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 secondary on the borrower’s (or guarantors) ability to repay.

~~Residential~~ — Secured by family dwelling units. These loans are secured by first and second mortgages on the unit. The borrower’s ability to repay is sensitive to the life events and general economic condition of the region. Where loan to values exceed 80%, the loan is generally guaranteed by private mortgage insurance, FHA or VA.

~~Residential construction (including land acquisition and development)~~ — 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. These loans will rely on the value associated with the project upon completion. These cost and valuation estimates may be inaccurate. 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 is underwritten according to the Company’s policies, which include independent appraisal valuations as well as the estimated value associated with the land upon completion of development into finished lots. These cost and valuation estimates may be inaccurate. These loans are considered to be 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.

Future policy benefit reserves for traditional life insurance are computed using a net level method, including assumptions as to investment yields, mortality, morbidity, withdrawals, and other assumptions based on the life insurance subsidiaries’ experience, modified as necessary to give effect to anticipated trends and to include provisions for possible unfavorable deviations. Such liabilities are, for some plans, graded to equal statutory values or cash values at or prior to maturity, which are deemed a reasonable equivalent for GAAP. The range of assumed interest rates for all traditional life insurance policy reserves was 4% to 10%. Benefit reserves for traditional limited-payment life insurance policies include the deferred portion of the premiums received during the premium-paying period. Deferred premiums are recognized as income over the life of the policies. Policy benefit claims are charged to expense in the period the claims are incurred. Increases in future policy benefits are charged to expense.

Future policy benefit reserves for interest-sensitive insurance products are computed under a retrospective deposit method and represent policy account balances before applicable surrender charges. Policy benefits and claims that are charged to expense include benefit claims incurred in the period ~~in excess of~~more than related policy account balances. Interest ~~crediting~~credit rates for interest-sensitive insurance products ranged from 3% to 6.5%.

The Company records an unpaid claims liability for claims in the course of settlement equal to the death benefit amount less any reinsurance recoverable amount for claims reported. There is also an unpaid claims liability for claims incurred but not reported. This liability is based on the historical experience of the net amount of claims that were reported in reporting periods subsequent to the reporting period when claims were incurred.

Participating business constituted 2% of insurance in force for the years ended ~~2022~~2023 and ~~2021.~~2022. The provision for policyholders’ dividends included in policyholder obligations is based on dividend scales anticipated by management. ~~Amounts~~The amounts to be paid are determined by the Board of Directors. The expense recognized for policyholder dividends is included in surrenders and other policy benefits on the consolidated statements of earnings.

Premiums and other consideration for traditional life insurance products (which include those products with fixed and guaranteed premiums and benefits and consist principally of whole life insurance policies, limited payment life insurance policies, and certain annuities with life contingencies) are recognized as revenues when due from policyholders. Premiums and other consideration for interest-sensitive insurance policies (which include universal life policies, interest-sensitive life policies, deferred annuities, and annuities without life contingencies) are recognized when earned and consist of amounts assessed against policyholder account balances during the period for policy administration charges and surrender charges.

The Company follows the procedure of reinsuring risks ~~in excess~~ of more than $100,000 to provide for greater diversification of business to allow management to control exposure to potential losses arising from large risks and provide additional capacity for growth. The Company remains liable for amounts ceded in the event the reinsurers are unable to meet their obligations.

The Company entered into coinsurance agreements with unaffiliated insurance companies under which the Company assumed 100% of the risk for certain life insurance policies and certain other policy-related liabilities of the insurance company.

Reinsurance premiums, commissions, expense reimbursements, and reserves related to reinsured business are accounted for on a basis consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts. Expense allowances received in connection with reinsurance ceded are accounted for as a reduction of the related policy acquisition costs and are deferred and amortized accordingly.

Pre-need contract sales of funeral services and caskets - revenue and costs associated with the sales of pre-need funeral services and caskets are deferred until the performance obligations are fulfilled (services are performed or the caskets are delivered).

Sales of cemetery interment rights (cemetery burial property) - revenue and costs associated with the sale of cemetery interment rights are deferred until 10% of the sales price has been collected.

Pre-need contract sales of cemetery merchandise (primarily markers and vaults) - revenue and costs associated with the sale of pre-need cemetery merchandise is deferred until the merchandise is delivered to the Company.

Pre-need contract sales of cemetery services (primarily merchandise delivery, installation fees and burial opening and closing fees) - revenue and costs associated with the sales of pre-need cemetery services are deferred until the services are performed.

Prearranged funeral and pre-need cemetery customer acquisition costs - costs incurred related to obtaining new pre-need contract cemetery and prearranged funeral services, which include only costs that vary with and are primarily related to the acquisition of new pre-need cemetery and prearranged funeral services, are deferred until the merchandise is delivered or services are performed.

Revenues and costs for at-need sales are recorded when a valid contract exists, the services are performed, collection is reasonably assured and there are no significant performance obligations remaining.

The Company, through its cemetery and mortuary operations, provides guaranteed funeral arrangements wherein a prospective customer can receive future goods and services at guaranteed prices. To accomplish this, the Company, through its life insurance operations, sells to the customer an increasing benefit life insurance policy that is assigned to the mortuaries. If, at the time of need, the policyholder/potential mortuary customer utilizes one of the Company’s facilities, the guaranteed funeral arrangement contract that has been assigned will provide the funeral goods and services at the contracted price. The increasing life insurance policy will cover the difference between the original contract prices and current prices. Risks may arise if the difference cannot be fully met by the life insurance policy. However, management believes that given current inflation rates and related price increases of goods and services, the risk of exposure is minimal.

Previous acquisitions have been accounted for as purchases under which assets acquired and liabilities assumed were recorded at their fair values with the excess purchase price recognized as goodwill. The Company evaluates annually or when changes in circumstances warrant the recoverability of goodwill and if there is a decrease in value, the related impairment is recognized as a charge against income. ~~No impairment of goodwill has been recognized in the accompanying financial statements.~~

Other intangibles are recognized apart from goodwill whenever an acquired intangible asset arises from contractual or other legal rights, or whenever it is capable of being separated or divided from the acquired entity and sold, transferred, licensed, rented, or exchanged, either individually or in combination with a related contract, asset, or liability. The Company engages a third-party valuation firm to analyze the value of the intangible assets that result from significant acquisitions. The value of the intangible assets that result from these acquisitions are included in Other Assets and are determined using the income approach, relying on a relief from the royalty method.

Income taxes include taxes currently payable plus deferred taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to the temporary differences in the financial reporting basis and tax basis of assets and liabilities and operating loss carry-forwards. Deferred tax assets are measured using enacted tax rates expected to apply to taxable income in the years in which these temporary differences are expected to be recovered or settled.

Liabilities are established for uncertain tax positions expected to be taken in income tax returns when such positions are judged to meet the “more-likely-than-not” threshold based on the technical merits of the positions. Estimated interest and penalties related to uncertain tax penalties are included as a component of income tax expense.

The Company computes earnings per share, which requires a presentation of basic and diluted earnings per share. Basic earnings per equivalent Class A common share are computed by dividing net earnings by the weighted-average number of Class A common shares outstanding during each year presented, after the effect of the assumed conversion of Class C common stock to Class A common stock. Diluted earnings per share is computed by dividing net earnings by the weighted-average number of common shares outstanding during the year used to compute basic earnings per share plus dilutive potential incremental shares by application of the treasury stock method. Basic and diluted earnings per share amounts have been adjusted retroactively for the effect of annual stock dividends.

The cost of employee services received in exchange for an award of equity instruments is recognized in the financial statements and is measured based on the fair value on the grant date of the award. The fair value of stock options is calculated using the Black Scholes Option Pricing Model. Stock option compensation expense is recognized over the period during which an employee is required to provide service in exchange for the award and is included in personnel expenses on the consolidated statements of earnings.

For a description of the concentration risk regarding available for sale debt securities, mortgage loans held for investment and real estate held for investment, refer to Note 2, and for receivables from reinsurers, refer to Note 10 of the Notes to Consolidated Financial Statements.

ASU No. 2016-13: “Financial Instruments – Credit Losses (Topic 326)” — Issued in September 2016, ASU 2016-13 amends guidance on reporting credit losses for assets held at amortized cost basis (such as mortgage loans held for investment and held to maturity debt securities) and available for sale debt securities. For assets held at an amortized cost basis, Topic 326 eliminates the probable initial recognition threshold ~~in current GAAP~~ and, instead, requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available for sale debt securities ~~credit losses are measured in a manner similar to current GAAP; however,~~ Topic 326 requires that credit losses be presented as an allowance rather than as a write-down. The Company adopted this standard on January 1, 2023, and after a review of the affected assets, ~~determined that it would decrease~~decreased the opening balance of retained earnings in stockholders’ equity by $~~671,505~~671,506 on January 1, 2023. The allowances for credit losses increased (decreased) by the following amounts.

ASU No. 2018-12: “Financial Services – Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts” — Issued in August 2018, ASU 2018-12 is intended to improve the timeliness of recognizing changes in the liability for future policy benefits on traditional long-duration contracts by requiring that assumptions be updated after contract inception and by modifying the rate used to discount future cash flows. The ~~ASU will improve~~standard is aimed at improving the accounting for certain market-based options or guarantees associated with deposit or account balance contracts, ~~simplify~~simplifying amortization of deferred acquisition costs while improving and expanding required disclosures. In November 2020, the FASB issued an update to ASU No. 2018-12 that ~~made~~requires the ~~ASU effective for~~standard to be adopted by the Company commencing on January 1, 2025. The Company ~~has made progress in the~~is nearing completion of its analysis and implementation of the new standard, including the ~~involvement~~identification of cohorts, system updates, and design. The Company has engaged its team of actuaries, accountants, and systems ~~specialists. However,~~specialists and consulted external system providers as part of the implementation. The Company ~~has not yet estimated~~is in the process of estimating the impact of the new guidance ~~will have~~ on the consolidated financial statements.

ASU No. 2023-09: “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 beginning on January 1, 2025. The Company is in the process of estimating the impact of the new guidance on the consolidated financial statements.

ASU No. 2023-07: “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” — Issued in November 2023, ASU 2023-07 requires enhanced disclosures about significant segment expenses. The key amendments include: (i) disclosures on significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss on an annual and interim basis; (ii) disclosures on an amount for other segment items by reportable segment and a description of its composition on an annual and interim basis. The other segment items category is the difference between segment revenue less the significant expenses disclosed and each reported measure of segment profit or loss; (iii) providing all annual disclosures on a reportable segment’s profit or loss and assets currently required by FASB ASC Topic 280, Segment Reporting in interim periods; and (iv) specifying the title and position of the CODM. ASU 2023-07 is effective for the Company for annual periods beginning January 1, 2024 and interim periods beginning January 1, 2025. The Company is in the process of estimating the 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.

~~The Company’s~~There were no investments, 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 December 31, ~~2021 are summarized as follows:~~2023, other than investments issued or guaranteed by the United States Government.

The ~~following~~ table below summarizes unrealized losses on fixed maturities securities available for sale that were carried at estimated fair value atas of December 31, ~~2022~~2023 and ~~at December 31, 2021.~~2022. The ~~unrealized losses were primarily related~~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 ~~interest~~the coupon rate, ~~fluctuations~~credit, and ~~inflation.~~maturity of the investments. The tables set forth unrealized losses by duration with the fair value of the related fixed maturity ~~securities:~~securities.

~~There~~Relevant holdings were comprised of 606 securities with fair values aggregating 94.9% of the aggregated amortized cost as of December 31, 2023. Relevant holdings were comprised of 713 securities with fair ~~value of~~values aggregating 93.6% of the aggregated amortized cost atas of December 31, 2022. ~~There were 55 securities with fair value~~Credit loss provision (release) of $~~97.3~~325,314 ~~% of amortized cost at December 31, 2021. Credit losses of~~and nil ~~and $39,502~~ have been recognized for 2023 and 2022, respectively. Credit losses are included in gains (losses) on investments and other assets on the ~~years ended~~condensed consolidated statements of earnings. Other unrealized losses for which no credit loss was recognized are primarily the result of increases in interest rates.

On a quarterly basis, the Company evaluates its fixed maturity securities classified as available for ~~sale.~~sale to identify any potential credit losses. This evaluation includes a review of current ratings by the National Association of Insurance Commissions (“NAIC”). and other industry rating agencies. Securities with a rating of 1 or 2 are considered investment grade and are not reviewed for ~~impairment,~~credit loss unless current market data or recent company news could lead to a credit downgrade. Securities with ratings of 3 to 5 are evaluated for ~~impairment. Securities with a rating of 6 are automatically determined to be impaired and are written down.~~credit loss. The evaluation involves ~~an analysis of the securities in relation~~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. IfSecurities 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 ~~unlikely~~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 ~~will meet contractual obligations,~~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 ~~considered~~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 debt security and it is less likely than not that the Company will be required to sell the debt 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 on available for sale fixed maturities that are deemed to be ~~other~~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 ~~temporary,~~not that the Company will be required to sell the security ~~is written down to~~before the ~~new anticipated market value and an impairment loss is recognized.~~recovery of its amortized cost.

The ~~fair values of fixed maturity securities are based~~Company does not measure a credit loss allowance on ~~quoted market prices,~~accrued interest receivable, included in accrued investment income on the condensed consolidated balance sheets, as the Company writes off any accrued interest receivable balance to net investment income in a timely manner (after 90 days) 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.~~Company has concerns regarding collectability.

The NAIC assigns designations to fixed maturity securities. These designations range from Class 1 (highest quality) to Class 6 (lowest quality). The NAIC designations are utilized by insurers in preparing their annual statutory statements. NAIC Class 1 and 2 are considered investment grade while the NAIC Class 3 through 6 designations are considered non-investment grade. Based on the NAIC designations, the Company had 98.2% and 97.7% of its fixed maturity securities rated investment grade as of December 31, 2023 and 2022, 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

The following tables presents a roll forward of the Company’s allowance for credit losses on fixed maturity securities available for sale:

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

The following table presents a ~~rollforward~~roll forward of the Company’s cumulative other than temporary credit impairments (“OTTI”) recognized in earnings on fixed maturity securities available for ~~sale.~~sale which was required to be presented prior to the adoption of ASU 2016-13:

The following table presents the amortized cost and estimated fair value of fixed maturity securities available for sale at December 31, ~~2022,~~2023, by contractual maturity. Expected maturities may differ from contractual maturities because certain borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

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

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

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

The Company is a member of the Federal Home Loan Bank of Des Moines and Dallas (“FHLB”). ~~The Company~~Assets pledged ~~a total of $93,034,880, at estimated fair value, of fixed maturity securities~~as collateral with the FHLB ~~at December 31, 2022.~~are presented below. These pledged securities are used as collateral for any FHLB cash advances. See Note 7 of the Notes to the Consolidated Financial Statements for more information about the FHLB.

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 segments in the form of acquisition, development, and mortgage foreclosures. The Company reports real estate held for investment and held for sale pursuant to the accounting policy discussed in Note 1 of the Notes to Consolidated Financial Statements.

The Company owns and manages commercial real estate assets as a means of generating investment income. These assets are 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 classes of investments are determined by senior management under the direction of the Board of Directors.

The Company employs full-time employees to attend to the day-to-day operations of those assets 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 looks to acquire assets that are in regions expected to have high growth in employment and population and that provide operational efficiencies.

The Company currently owns and operates nine commercial properties in three 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 aggregated net book value of commercial real estate serving as collateral for bank loans was $124,381,467 and $129,330,119 as of December 31, 2023 and 2022, respectively. The associated bank loan carrying values totaled $97,807,614 and $97,112,131 as of December 31, 2023 and 2022, respectively.

During 2023 and 2022, the Company did not record any ~~cash borrowings~~impairment losses on commercial real estate held for investment or held for sale. Impairment losses, if any, are included in gains (losses) on investments and other assets on the consolidated statements of earnings.

During 2023 and 2022, the Company recorded depreciation expense on commercial real estate held for investment of $6,278,828 and $6,090,575, 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 of earnings.

The Company’s commercial real estate held for investment is summarized as follows:

Operating leases arise from the ~~FHLB.~~leasing of the Company’s commercial real estate held for investment. Initial lease terms generally range from three to ten years.

The following is a maturity analysis of the annual undiscounted cash flows of the operating lease payments expected to be received.

These properties are being marketed with the assistance of commercial real estate brokers in Mississippi.

The Company occasionally acquires a small portfolio of residential homes primarily because of loan foreclosures. The Company has the option to sell these properties or to continue to hold them for expected cash flow and price appreciation.

The Company established Security National Real Estate Services (“SNRE”) to manage its residential property portfolio. SNRE cultivates and maintains the preferred vendor relationships necessary to manage costs and quality of work performed on the Company’s entire residential property portfolio.

During 2023 and 2022, the Company recorded impairment losses on residential real estate held for sale of nil and $94,000, respectively. Impairment losses, if any, are included in gains (losses) on investments and other assets on the consolidated statements of earnings.

During 2023 and 2022, the Company recorded depreciation expense on residential real estate held for investment of $10,592 and $10,592, 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 of earnings.

The Company’s residential real estate held for investment is summarized as follows:

The following table presents additional information regarding the Company’s residential subdivision development in Utah.

The net book value of foreclosed residential real estate included in residential real estate held for investment or sale was nil and $11,010,029 as of December 31, 2023 and 2022, respectively.

The primary business units of the Company occupy a portion of the commercial real estate owned by the Company. As of December 31, 2023, real estate owned and occupied by the Company is summarized as follows:

The Company reports mortgage loans held for investment pursuant to the accounting policy discussed in Note 1 of the Notes to Consolidated Financial Statements.

Concentrations of credit risk arise when several mortgage loan debtors have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions. Although the Company has a diversified mortgage loan portfolio consisting of residential mortgages, commercial loans and residential construction loans and requires collateral on all real estate exposures, a substantial portion of the relevant debtors’ ability to honor obligations is dependent upon the economic stability of the geographic region in which the debtors do business or are employed. As of December 31, 2023, the Company had 44%, 11%, 10%, 7% and 6%, of its mortgage loans from borrowers located in the states of Utah, Florida, California, Texas, and Arizona, respectively. As of December 31, 2022, the Company ~~owed~~had 64%, ~~nil~~10%, 5% and 5% of its mortgage loans from borrowers located in the states of Utah, Florida, California, and Texas, respectively.

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. Given this policy, the Company does not measure a credit loss allowance on accrued interest receivable. 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 $237,000 and $226,000 as of December 31, 2023 and 2022, respectively.

The Company measures expected credit losses based on the fair value of the collateral when the Company determines that foreclosure is probable. When a mortgage loan becomes delinquent, the Company proceeds to foreclose 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.

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 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 ~~FHLB~~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.

Residential construction (including land acquisition and development) – 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 ~~maximum borrowing capacity was $86,032,116~~.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.

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:

The following table presents the aging of mortgage loans held for investment by loan type.

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 December 31, 2023:

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 December 31, 2023:

The company evaluates and monitors the credit quality of its residential construction loans (including land acquisition and development loans) by analyzing LTV and loan performance. Monitoring a residential construction mortgage loan increases when the loan is delinquent or earlier if there is an indication of impairment.

The aggregate unpaid principal balance of residential construction mortgage loans by credit quality indicator and origination year was as follows as of December 31, 2023:

The following table presents the amortized cost and contractual payments on mortgage loans held for investment by category as of December 31, 2023. Expected principal payments may differ from contractual obligations because certain borrowers may elect to pay off mortgage obligations with or without early payment penalties.

The following table presents the aging of insurance assignments, included in other investments and policy loans on the condensed consolidated balance sheets:

The Company records an allowance for credit losses when the insurance assignment is funded. Once an insurance assignment moves to 90 days or legal proceedings, it is monitored for write-off and collectability, and any adjustments to the allowance are recorded at that time. See Note 1 regarding the adoption of ASU 2016-13.

The following table presents a roll forward of the allowance for credit losses for insurance assignments:

During 2023 and 2022, 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 investments and other assets on the consolidated statements of earnings.

The Company’s commercial real estate held for investment is summarized as follows:

Operating leases arise from the leasing of the Company’s commercial real estate held for investment. Initial lease terms generally range from three to ten years.

The following is a maturity analysis of the annual undiscounted cash flows of the operating lease payments expected to be received.

These properties are being marketed with the assistance of commercial real estate brokers in Mississippi.

The Company’s residential real estate held for investment is summarized as follows:

The following table presents additional information regarding the Company’s residential subdivision development in Utah.

The net book value of foreclosed residential real estate included in residential real estate held for investment or sale was nil and $11,010,029 as of December 31, 2023 and 2022, respectively.

The Company reports mortgage loans held for investment pursuant to the accounting policy discussed in Note 1 of the Notes to Consolidated Financial Statements.

Concentrations of credit risk arise when several mortgage loan debtors have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions. Although the Company has a diversified mortgage loan portfolio consisting of residential mortgages, commercial loans and residential construction loans and requires collateral on all real estate exposures, a substantial portion of the relevant debtors’ ability to honor obligations is dependent upon the economic stability of the geographic region in which the debtors do business or are employed. As of December 31, 2023, the Company had 44%, 11%, 10%, 7% and 6%, of its mortgage loans from borrowers located in the states of Utah, Florida, California, Texas, and Arizona, respectively. As of December 31, 2022, the Company had 64%, 10%, 5% and 5% of its mortgage loans from borrowers located in the states of Utah, Florida, California, and Texas, respectively.

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 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.

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 following table presents a roll forward of the ~~net realized gains and~~allowance for credit losses ~~from sales, calls, and maturities, unrealized gains and losses on equity securities, and other than temporary impairments from investments and other assets.~~as of the dates indicated:

~~The net realized gains and losses on the sale of securities are recorded on the trade date, and the cost of the securities sold is determined using the specific identification method.~~

~~Net realized gains and losses includes gains and losses by the restricted assets and cemetery perpetual care trust investments of the cemeteries and mortuaries of $817,000~~ ~~in net losses and $933,045~~ ~~in net gains for the years ended December 31, 2022 and 2021, respectively.~~

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

~~Major categories~~The following table presents the aging of ~~net~~mortgage loans held for investment ~~income were as follows:~~by loan type.

~~Net investment income includes income earned by the restricted assets and cemetery perpetual care trust investments of the cemeteries and mortuaries of $~~SECURITY NATIONAL FINANCIAL CORPORATION

~~Net investment income on real estate consists primarily of rental revenue.~~2) Investments (Continued)

~~Investment expenses consist primarily of depreciation, property taxes, operating expenses of real estate and an estimated portion of administrative expenses relating to investment activities.~~Credit Quality Indicators

~~Securities on deposit for regulatory authorities as required~~The Company evaluates and monitors the credit quality of its commercial loans by ~~law amounted to $11,032,165~~analyzing LTV and $~~10,168,853~~ ~~at December 31, 2022 and 2021, respectively (the December 31, 2021 amount has been corrected from that previously reported due to~~DSCR. Monitoring a ~~typographical error). The restricted securities are included in various assets under investments on~~commercial mortgage loan increases when the ~~accompanying consolidated balance sheets.~~loan is delinquent or earlier if there is an indication of impairment.

~~There were no investments, aggregated~~The aggregate unpaid principal balance of commercial mortgage loans by ~~issuer, in excess~~credit quality indicator and origination year was as follows as of ~~10% of shareholders’ equity (before net unrealized gains and losses) at~~ December 31, 2023:

Years Ended December 31, 2023 and 2022 ~~other than investments issued or guaranteed by the United States Government.~~

The aggregate unpaid principal balance of residential mortgage loans by credit quality indicator and origination year was as follows as of December 31, 2023:

The aggregate unpaid principal balance of residential construction mortgage loans by credit quality indicator and origination year was as follows as of December 31, 2023:

The following table presents the aging of insurance assignments, included in other investments and policy loans on the condensed consolidated balance sheets:

The following table presents a roll forward of the allowance for credit losses for insurance assignments:

The Company owns and manages commercial real estate assets as a means of generating investment income. These assets are 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 ~~reports. Geographic~~resources. The geographic locations and asset classes of ~~the investment activity is~~investments are determined by senior management under the direction of the Board of Directors.

The Company employs full-time employees to attend to the day-to-day operations of those assets within the greater Salt Lake area and close surrounding markets. The Company utilizes ~~third-party~~third party property managers ~~when~~where the geographic ~~boundary~~location does not warrant full-time staff or through strategic lease-up periods. The Company generally looks to acquire assets that are in regions ~~that are~~expected to have high growth ~~regions for~~in employment and population and ~~assets~~ that provide operational efficiencies.

The Company currently owns and operates nine commercial properties in three states. These properties include office buildings, flex office space, and ~~includes~~ the redevelopment and expansion of its corporate campus (“Center53”) in Salt Lake City, Utah. The Company ~~does use~~uses bank debt in strategic cases, primarily where it is anticipated to ~~leverage established~~improve yields, or ~~to acquire a~~facilitate the acquisition of higher quality assets or ~~different~~asset class ~~of asset.~~diversification.

The aggregated net ~~ending balance~~book value of commercial real estate ~~that serves~~serving as collateral for bank loans was $~~129,330,119~~124,381,467 and $~~134,251,205~~129,330,119 as of December 31, ~~2022~~2023 and ~~2021,~~2022, respectively. The associated bank loan carrying values totaled $~~97,112,131~~97,807,614 and $~~85,663,148~~97,112,131 as of December 31, ~~2022~~2023 and ~~2021,~~2022, respectively.

During ~~the years ended December 31,~~2023 and 2022, ~~and 2021,~~ the Company ~~recorded~~did not record any impairment losses on commercial real estate held for ~~sale of~~ ~~nil~~ ~~and $2,028,378, respectively.~~investment or held for sale. Impairment losses, if any, are included in gains (losses) on investments and other assets on the consolidated statements of earnings.

During ~~the years ended December 31,~~2023 and 2022, ~~and 2021,~~ the Company recorded depreciation expense on commercial real estate held for investment of $~~6,090,575~~6,278,828 and $~~3,592,207~~6,090,575, 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 of earnings.

The Company’s commercial real estate held for investment is summarized as follows:

Operating leases arise from the leasing of the Company’s commercial real estate held for investment. Initial lease terms generally range from three to ten years.

~~The Company’s commercial real estate held for investment is summarized as follows:~~

The following is a maturity analysis of the annual undiscounted cash flows of the operating lease payments expected to be received.

The Company’s commercial real estate held for sale is summarized as follows:

Net Ending Balance Total Square Footage
December 31 December 31
2022 2021 2022 2021
Kansas $ - $ 2,000,000 - 222,679
Louisiana - 389,145 - 2,872
Mississippi (1) 151,553 151,553 - -

$ 151,553 $ 2,540,698 - 225,551

	Net Book Value				Total Square Footage
	December 31,				December 31,
	2023		2022		2023		2022
Mississippi (1)	$	3,028,973	$	151,553		19,694		-

	$	3,028,973	$	151,553		19,694		-

(1)

~~Approximately~~Consists of approximately 93 acres of undeveloped land for $151,553 for 2023 and 2022. The remaining property for $2,877,420 was sold in February 2024 for a gain of approximately $250,000.

~~This property is~~These properties are being marketed with the assistance of commercial real estate brokers in ~~the markets where the property is located.~~Mississippi.

Residential Real Estate Held for Investment and Held for Sale

The Company occasionally ~~owns~~acquires a small portfolio of residential homes primarily ~~as a result~~because of loan foreclosures. The Company has the option to sell ~~them~~these properties or to continue to hold them for expected cash flow and ~~acceptable returns.~~ price appreciation.

The Company also invests in residential subdivision ~~land developments.~~development.

The Company established Security National Real Estate Services (“SNRE”) to manage ~~the~~its residential property portfolio. SNRE cultivates and maintains the preferred vendor relationships necessary to manage costs and quality of work performed on the Company’s entire residential ~~portfolio across the country.~~property portfolio.

During ~~the years ended December 31,~~2023 and 2022, ~~and 2021,~~ the Company recorded impairment losses on residential real estate held for sale of $~~94,400~~ ~~and~~ nil and $94,000, respectively. ~~These impairment~~Impairment losses, if any, are included in gains (losses) on investments and other assets on the consolidated statements of earnings.

During ~~the years ended December 31,~~2023 and 2022, ~~and 2021,~~ the Company recorded depreciation expense on residential real estate held for investment of $10,592 and $~~12,850~~10,592, 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 of earnings.

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, ~~2022~~2023 and ~~2021~~2022

2) Investments(Continued)

The Company’s residential real estate held for investment is summarized as follows:

Schedule of Residential Real Estate Investment

	Net Book Value
	December 31,
	2023		2022
Utah (1)	$	40,924,865	$	38,437,960
	$	40,924,865	$	38,437,960

(1)

Includes multiple residential subdivision development projects

The following table presents additional information regarding the Company’s residential subdivision development in Utah.

	December 31,
	2023		2022
Lots available for sale		42		80
Lots to be developed		1,145		1,131
Ending Balance	$	40,739,201	$	38,241,705

The Company’s residential real estate held for sale is summarized as follows:

	Net Book Value
	December 31,
	2023		2022
Utah	$	-	$	11,010,029	(1)
	$	-	$	11,010,029

(1)

All sold in 2023

The net ~~ending balance~~book value of foreclosed residential real estate included in residential real estate held for investment or sale was $~~11,010,029~~nil and $~~1,190,602~~11,010,029 as of December 31, 2023 and 2022, ~~and 2021,~~ respectively.

~~The Company’s residential real estate held for investment is summarized as follows:~~

~~Schedule of Residential Real Estate Investment~~

Net Ending Balance
December 31
2022 2021
Utah (1) $ 38,437,960 $ 41,686,281
Washington (2) - 286,181
$ 38,437,960 $ 41,972,462

~~(1)~~

~~Including subdivision land developments~~

~~(2)~~

~~Improved residential lots~~

~~The following table presents additional information regarding the Company’s subdivision land developments in Utah.~~

December 31
2022 2021
Lots available for sale 80 67
Lots to be developed 1,131 548
Ending Balance $ 38,241,705 $ 41,479,434

~~The Company’s residential real estate held for sale is summarized as follows:~~

2022 2021
Net Ending Balance
December 31
2022 2021
Utah $ 11,010,029 $ -
Nevada - 979,640
Texas - 200,962
Ohio - 10,000
Real estate held for sale $ 11,010,029 $ 1,190,602

~~These properties are all actively being marketed with the assistance of residential real estate brokers. The Company expects these properties to sell within the coming 12 months.~~

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, ~~2022~~2023 and ~~2021~~2022

2) Investments (Continued)

Real Estate Owned and Occupied by the Company

The primary business units of the Company occupy a portion of the commercial real estate owned by the Company. As of December 31, ~~2022,~~2023, real estate owned and occupied by the Company is summarized as follows:

Schedule of Real Estate Owned and Occupied by the Company

Location Business Segment Approximate Square Footage Square Footage Occupied by the Company
433 Ascension Way, Floors 4, 5 and 6, Salt Lake City, UT - Center53 Building 2 Corporate Offices, Life Insurance, Cemetery/Mortuary Operations, and Mortgage Operations and Sales 221,000 50 %
1044 River Oaks Dr., Flowood, MS Life Insurance Operations 19,694 28 %
1818 Marshall Street, Shreveport, LA (1) Life Insurance Operations 12,274 100 %
909 Foisy Street, Alexandria, LA (1) Life Insurance Sales 8,059 100 %
812 Sheppard Street, Minden, LA (1) Life Insurance Sales 1,560 100 %
1550 N 3rd Street, Jena, LA (1) Life Insurance Sales 1,737 100 %

Location	Business Segment	Approximate Square Footage		Square Footage Occupied by the Company
433 Ascension Way, Floors 4, 5 and 6, Salt Lake City, UT - Center53 Building 2 (1)	Corporate Offices, Life Insurance, Cemetery/Mortuary Operations, and Mortgage Operations and Sales		221,000		50	%
1044 River Oaks Dr., Flowood, MS (1) (3)	Life Insurance Operations		19,694		28	%
1818 Marshall Street, Shreveport, LA (2)	Life Insurance Operations		12,274		100	%
909 Foisy Street, Alexandria, LA (2) (4)	Life Insurance Sales		8,059		100	%
812 Sheppard Street, Minden, LA (2) (5)	Life Insurance Sales		1,560		100	%
1550 N 3rd Street, Jena, LA (2) (3)	Life Insurance Sales		1,737		100	%

(1)

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

(2)

Included in property and equipment on the consolidated balance sheets

(3)

Listed for sale and sold during the first quarter of 2024

(4)

Listed for sale and currently under contract

(5)

Listed for sale

Mortgage Loans Held for Investment

The Company reports mortgage loans held for investment pursuant to the accounting policy discussed in Note 1 of the Notes to Consolidated Financial Statements.

~~Mortgage loans consist of first and second mortgages. The mortgage loans bear interest at rates ranging from~~ ~~2.0~~ ~~% to~~ ~~10.5%, maturity dates range from~~ ~~nine months~~ to 30 ~~years and are secured by real estate.~~ Concentrations of credit risk arise when ~~a number of~~several mortgage loan debtors have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions. Although the Company has a diversified mortgage loan portfolio consisting of residential mortgages, commercial loans and residential construction loans and requires collateral on all real estate exposures, a substantial portion of ~~its~~the relevant debtors’ ability to honor obligations is ~~reliant on~~dependent upon the economic stability of the geographic region in which the debtors do ~~business. At~~business or are employed. As of December 31, 2023, the Company had 44%, 11%, 10%, 7% and 6%, of its mortgage loans from borrowers located in the states of Utah, Florida, California, Texas, and Arizona, respectively. As of December 31, 2022, the Company had 64%, 10%, 5%, and 5%, 3~~% and~~ 3% of its mortgage loans from borrowers located in the states of Utah, Florida, California, and Texas, ~~Nevada and Arizona,~~ respectively. ~~At December 31, 2021, the Company had~~

70%,

7%, 5%, 4%, 4~~% and~~ 2%Evaluation of ~~its mortgage loans from borrowers located in the states of Utah, Florida, California, Texas, Nevada and Arizona, respectively.~~Allowance for Credit Losses

See Note 1 regarding the adoption of ASU 2016-13.

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, ~~2022~~2023 and ~~2021~~2022

2) Investments (Continued)

~~The Company establishes~~Once a ~~valuation allowance for credit losses in its~~ mortgage ~~loans held for investment portfolio. The following table presents the valuation allowance for loan losses as a contra-asset account.~~

~~Schedule of Allowance for Loan Losses as Contra Asset Account~~

Commercial Residential Residential Construction Total
December 31, 2022
Allowance for credit losses:
Beginning balance $ 187,129 $ 1,469,571 $ 43,202 $ 1,699,902
Charge-offs - - - -
Provision - 270,409 - 270,409
Ending balance $ 187,129 $ 1,739,980 $ 43,202 $ 1,970,311

Ending balance: individually evaluated for impairment $ - $ 225,667 $ - $ 225,667

Ending balance: collectively evaluated for impairment $ 187,129 $ 1,514,313 $ 43,202 $ 1,744,644

Mortgage loans:
Ending balance $ 46,311,955 $ 93,355,623 $ 172,516,125 $ 312,183,703

Ending balance: individually evaluated for impairment $ 405,000 $ 2,162,385 $ - $ 2,567,385

Ending balance: collectively evaluated for impairment $ 45,906,955 $ 91,193,238 $ 172,516,125 $ 309,616,318

December 31, 2021
Allowance for credit losses:
Beginning balance $ 187,129 $ 1,774,796 $ 43,202 $ 2,005,127
Charge-offs - - - -
Provision - (305,225 ) - (305,225 )
Ending balance $ 187,129 $ 1,469,571 $ 43,202 $ 1,699,902

Ending balance: individually evaluated for impairment $ - $ 105,384 $ - $ 105,384

Ending balance: collectively evaluated for impairment $ 187,129 $ 1,364,187 $ 43,202 $ 1,594,518

Mortgage loans:
Ending balance $ 51,683,022 $ 53,533,712 $ 175,117,783 $ 280,334,517

Ending balance: individually evaluated for impairment $ 1,723,372 $ 2,548,656 $ - $ 4,272,028

Ending balance: collectively evaluated for impairment $ 49,959,650 $ 50,985,056 $ 175,117,783 $ 276,062,489 (1)

~~(1)~~

~~Amount corrected from that previously reported due to a typographical error.~~

~~SECURITY NATIONAL FINANCIAL CORPORATION~~

~~AND SUBSIDIARIES~~

~~Notes to Consolidated Financial Statements~~

~~Years Ended December 31, 2022 and 2021~~

2) ~~Investments~~ ~~(Continued)~~

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

~~Schedule of Aging of Mortgage Loans~~

Commercial Residential Residential
Construction Total
December 31, 2022
30-59 Days Past Due $ 1,000,000 $ 3,553,390 $ - $ 4,553,390
60-89 Days Past Due - 814,184 - 814,184
Greater Than 90 Days (1) - 1,286,211 - 1,286,211
In Process of Foreclosure (1) 405,000 876,174 - 1,281,174
Total Past Due 1,405,000 6,529,959 - 7,934,959
Current 44,906,955 86,825,664 172,516,125 304,248,744
Total Mortgage Loans 46,311,955 93,355,623 172,516,125 312,183,703
Allowance for Loan Losses (187,129 ) (1,739,980 ) (43,202 ) (1,970,311 )
Unamortized deferred loan fees, net (199,765 ) (1,212,994 ) (333,846 ) (1,746,605 )
Unamortized discounts, net (230,987 ) (111,873 ) - (342,860 )
Net Mortgage Loans $ 45,694,074 $ 90,290,776 $ 172,139,077 $ 308,123,927

December 31, 2021
30-59 Days Past Due $ - $ 3,117,826 $ 1,363,127 $ 4,480,953
60-89 Days Past Due 100,204 580,815 - 681,019
Greater Than 90 Days (1) 1,723,372 2,052,062 - 3,775,434
In Process of Foreclosure (1) - 496,594 - 496,594
Total Past Due 1,823,576 6,247,297 1,363,127 9,434,000
Current 49,859,446 47,286,415 173,754,656 270,900,517
Total Mortgage Loans 51,683,022 53,533,712 175,117,783 280,334,517
Allowance for Loan Losses (187,129 ) (1,469,571 ) (43,202 ) (1,699,902 )
Unamortized deferred loan fees, net (36,813 ) (498,600 ) (383,173 ) (918,586 )
Unamortized discounts, net (240,614 ) (169,369 ) - (409,983 )
Net Mortgage Loans $ 51,218,466 $ 51,396,172 $ 174,691,408 $ 277,306,046

~~(1)~~

~~Interest income is not recognized on loans past due greater than 90 days or in foreclosure.~~

~~SECURITY NATIONAL FINANCIAL CORPORATION~~

~~AND SUBSIDIARIES~~

~~Notes to Consolidated Financial Statements~~

~~Years Ended December 31, 2022 and 2021~~

2) ~~Investments~~ ~~(Continued)~~

~~Impaired Mortgage Loans Held for Investment~~

Impaired mortgage loans held for investment include loans with a related specific valuation allowance or loans whose carrying amount has been reduced to the expected collectible amount because the impairment has been considered other than temporary. The recorded investment in and unpaid principal balance of impaired loans along with the related loan specific allowance for losses, if any, for each reporting period and the average recorded investment and interest income recognized during the time the loans were impaired are summarized as follows:

~~Schedule of Impaired Mortgage Loans~~

Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized
December 31, 2022
With no related allowance recorded:
Commercial $ 405,000 $ 405,000 $ - $ 762,175 $ -
Residential 1,142,494 1,142,494 - 998,798 -
Residential construction - - - 103,976 -

With an allowance recorded:
Commercial $ - $ - $ - $ - $ -
Residential 1,019,891 1,019,891 225,667 683,922 -
Residential construction - - - - -

Total:
Commercial $ 405,000 $ 405,000 $ - $ 762,175 $ -
Residential 2,162,385 2,162,385 225,667 1,682,720 -
Residential construction - - - 103,976 -

December 31, 2021
With no related allowance recorded:
Commercial $ 1,723,372 $ 1,723,372 $ - $ 1,053,865 $ -
Residential 1,591,368 1,591,368 - 2,731,421 -
Residential construction - - - 100,481 -

With an allowance recorded:
Commercial $ - $ - $ - $ - $ -
Residential 957,288 957,288 105,384 726,449 -
Residential construction - - - - -

Total:
Commercial $ 1,723,372 $ 1,723,372 $ - $ 1,053,865 $ -
Residential 2,548,656 2,548,656 105,384 3,457,870 -
Residential construction - - - 100,481 -

~~Credit Risk Profile Based on Performance Status~~

The Company’s mortgage loans held for investment portfolio is monitored based on performance of the loans. Monitoring a mortgage loan increases when the loan is delinquent or earlier if there is an indication of impairment. The Company defines non-performing mortgage loans as loans 90 days or greater delinquent or on non-accrual status.

~~SECURITY NATIONAL FINANCIAL CORPORATION~~

~~AND SUBSIDIARIES~~

~~Notes to Consolidated Financial Statements~~

~~Years Ended December 31, 2022 and 2021~~

2) ~~Investments~~ ~~(Continued)~~

~~The Company’s performing and non-performing mortgage loans held for investment are summarized as follows:~~

~~Schedule of Credit Risk of Mortgage Loans Based on Performance Status~~

Commercial Residential Residential Construction Total
December 31 December 31 December 31 December 31
2022 2021 2022 2021 2022 2021 2022 2021

Performing $ 45,906,955 $ 49,959,650 $ 91,193,238 $ 50,985,056 $ 172,516,125 $ 175,117,783 $ 309,616,318 $ 276,062,489
Non-performing 405,000 1,723,372 2,162,385 2,548,656 - - 2,567,385 4,272,028

Total $ 46,311,955 $ 51,683,022 $ 93,355,623 $ 53,533,712 $ 172,516,125 $ 175,117,783 $ 312,183,703 $ 280,334,517

~~Non-Accrual Mortgage Loans Held for Investment~~

~~Once a~~ loan is past due 90 days, it is the policy of the Company to end the accrual of interest income on the loan and ~~write off~~reverse any interest income that had been accrued. Given this policy, the Company does not measure a credit loss allowance on accrued interest receivable. 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 ~~on a cash basis. Interest~~when received. The interest income recognized from ~~any~~ 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 ~~totals~~totaled approximately $~~226,000~~237,000 and $~~236,000~~226,000 as of December 31, ~~2022~~2023 and ~~2021,~~2022, respectively.

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 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.

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.

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2023 and 2022

2) Investments (Continued)

The following table presents a roll forward of the allowance for credit losses as of the dates indicated:

Schedule of Allowance for Loan Losses

	Commercial		Residential			Residential Construction			Total
December 31, 2023
Allowance for credit losses:
Beginning balance - January 1, 2023	$	187,129	$	1,739,980		$	43,202		$	1,970,311
Adoption of ASU 2016-13 (1)		555,807		(192,607	)		301,830			665,030
Change in provision for credit losses (2)		476,717		843,521			(136,926	)		1,183,312
Charge-offs		-		-			-			-
Ending balance - December 31, 2023	$	1,219,653	$	2,390,894		$	208,106		$	3,818,653

December 31, 2022
Allowance for credit losses:
Beginning balance - January 1, 2022	$	187,129	$	1,469,571		$	43,202		$	1,699,902
Change in provision for credit losses (2)		-		270,409			-			270,409
Charge-offs		-		-			-			-
Ending balance - December 31, 2022	$	187,129	$	1,739,980		$	43,202		$	1,970,311

(1)

See Note 1 of the notes to the consolidated financial statements

(2)

Included in other expenses on the consolidated statements of earnings

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2023 and 2022

2) Investments (Continued)

The following table presents the aging of mortgage loans held for investment by loan type.

Schedule of Aging of Mortgage Loans

	Commercial			Residential			Residential Construction			Total
December 31, 2023
30-59 days past due	$	-		$	3,387,673		$	-		$	3,387,673
60-89 days past due		-			3,472,760			-			3,472,760
Over 90 days past due (1)		405,000			3,480,931			-			3,885,931
In process of foreclosure (1)		1,241,508			1,021,790			-			2,263,298
Total past due		1,646,508			11,363,154			-			13,009,662
Current		72,530,030			91,790,433			104,052,748			268,373,211
Total mortgage loans		74,176,538			103,153,587			104,052,748			281,382,873
Allowance for credit losses		(1,219,653	)		(2,390,894	)		(208,106	)		(3,818,653	)
Unamortized deferred loan fees, net		(172,989	)		(1,135,491	)		(314,746	)		(1,623,226	)
Unamortized discounts, net		(216,705	)		(107,452	)		-			(324,157	)
Net mortgage loans held for investment	$	72,567,191		$	99,519,750		$	103,529,896		$	275,616,837

December 31, 2022
30-59 days past due	$	1,000,000		$	3,553,390		$	-		$	4,553,390
60-89 days past due		-			814,184			-			814,184
Over 90 days past due (1)		-			1,286,211			-			1,286,211
In process of foreclosure (1)		405,000			876,174			-			1,281,174
Total past due		1,405,000			6,529,959			-			7,934,959
Current		44,906,955			86,825,664			172,516,125			304,248,744
Total mortgage loans		46,311,955			93,355,623			172,516,125			312,183,703
Allowance for credit losses		(187,129	)		(1,739,980	)		(43,202	)		(1,970,311	)
Unamortized deferred loan fees, net		(199,765	)		(1,212,994	)		(333,846	)		(1,746,605	)
Unamortized discounts, net		(230,987	)		(111,873	)		-			(342,860	)
Net mortgage loans held for investment	$	45,694,074		$	90,290,776		$	172,139,077		$	308,123,927

(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 Consolidated Financial Statements

Years Ended December 31, 2023 and 2022

2) Investments (Continued)

Credit Quality Indicators

The aggregate unpaid principal balance of commercial mortgage loans by credit quality indicator and origination year was as follows as of December 31, 2023:

Schedule of Commercial Mortgage Loans By Credit Quality Indicator

Credit Quality Indicator	2023		2022			2021		2020		2019		Prior		Total		% of Total
LTV:
Less than 65%	$	34,304,954	$	13,555,737		$	3,778,248	$	-	$	2,964,740	$	6,565,389	$	61,169,068		82.46	%
65% to 80%		1,523,926		5,115,231			1,050,000		4,913,313		-		-		12,602,470		16.99	%
Greater than 80%		-		-			405,000		-		-		-		405,000		0.55	%

Total	$	35,828,880	$	18,670,968		$	5,233,248	$	4,913,313	$	2,964,740	$	6,565,389	$	74,176,538		100.00	%

DSCR
>1.20x	$	20,990,000	$	1,000,000		$	700,000	$	4,913,313	$	2,964,740	$	2,612,625	$	33,180,678		44.73	%
1.00x - 1.20x		8,338,880		8,496,127			3,483,248		-		-		3,952,764		24,271,019		32.72	%
<1.00x		6,500,000		9,174,841⁽¹⁾	(1)		1,050,000		-		-		-		16,724,841		22.55	%

Total	$	35,828,880	$	18,670,968		$	5,233,248	$	4,913,313	$	2,964,740	$	6,565,389	$	74,176,538		100.00	%

(1)

Commercial construction loan

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2023 and 2022

2) Investments (Continued)

The aggregate unpaid principal balance of residential mortgage loans by credit quality indicator and origination year was as follows as of December 31, 2023:

Credit Quality Indicator	2023		2022		2021		2020		2019		Prior		Total		% of Total
Performance Indicators:
Performing	$	15,337,828	$	53,875,389	$	7,156,934	$	7,453,796	$	2,786,562	$	12,040,357	$	98,650,866		95.63	%
Non-performing (1)		-		2,202,114		365,061		613,101		-		1,322,445		4,502,721		4.37	%

Total	$	15,337,828	$	56,077,503	$	7,521,995	$	8,066,897	$	2,786,562	$	13,362,802	$	103,153,587		100.00	%

(1)

Includes residential mortgage loans in the process of foreclosure of $1,021,790

	2023		2022		2021		2020		2019		Prior		Total		% of Total
LTV:
Less than 65%	$	3,280,144	$	7,049,522	$	1,843,286	$	1,746,970	$	446,675	$	5,206,095	$	19,572,692		18.97	%
65% to 80%		10,962,770		44,371,320		4,269,894		4,222,170		2,339,887		5,711,440		71,877,481		69.68	%
Greater than 80%		1,094,914		4,656,661		1,408,815		2,097,757		-		2,445,267		11,703,414		11.35	%

Total	$	15,337,828	$	56,077,503	$	7,521,995	$	8,066,897	$	2,786,562	$	13,362,802	$	103,153,587		100.00	%

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2023 and 2022

2) Investments (Continued)

The aggregate unpaid principal balance of residential construction mortgage loans by credit quality indicator and origination year was as follows as of December 31, 2023:

Schedule of Residential Construction Mortgage Loans

Credit Quality Indicator	2023		2022		2021		Total		% of Total
Performance Indicators:
Performing	$	60,311,679	$	16,624,182	$	27,116,887	$	104,052,748		100.00	%
Non-performing		-		-		-		-		0.00	%

Total	$	60,311,679	$	16,624,182	$	27,116,887	$	104,052,748		100.00	%

LTV:
Less than 65%	$	40,215,360	$	8,732,500	$	20,442,302	$	69,390,162		66.69	%
65% to 80%		20,096,319		7,891,682		6,674,585		34,662,586		33.31	%
Greater than 80%		-		-		-		-		0.00	%

Total	$	60,311,679	$	16,624,182	$	27,116,887	$	104,052,748		100.00	%

Principal Amounts Due

The following table presents the amortized cost and contractual payments on mortgage loans held for investment by category as of December 31, ~~2022.~~2023. Expected principal payments may differ from contractual obligations because certain borrowers may elect to pay off mortgage obligations with or without early payment penalties.

Schedule of Mortgage loans Held for Investment

			Principal		Principal		Principal				Principal		Principal		Principal
			Amounts		Amounts		Amounts				Amounts		Amounts		Amounts
			Due in		Due in		Due				Due in		Due in		Due
	Total		1 Year		2-5 Years		Thereafter		Total		1 Year		2-5 Years		Thereafter
Residential	$	93,355,623	$	1,332,862	$	10,000,042	$	82,022,719	$	103,153,587	$	2,554,380	$	9,231,545	$	91,367,662
Residential Construction		172,516,125		167,805,559		4,710,566		-		104,052,748		88,880,893		15,171,855		-
Commercial		46,311,955		9,405,903		28,597,132		8,308,920		74,176,538		39,562,489		19,457,975		15,156,074
Total	$	312,183,703	$	178,544,324	$	43,307,740	$	90,331,639	$	281,382,873	$	130,997,762	$	43,861,375	$	106,523,736

6870

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2023 and 2022

2) Investments (Continued)

Insurance Assignments

The following table presents the aging of insurance assignments, included in other investments and policy loans on the condensed consolidated balance sheets:

Schedule of Aging of Insurance Assignments

	Years Ended December 31,
	2023			2022
30-59 days past due	$	10,829,629		$	10,621,443
60-89 days past due		3,709,754			3,997,484
Over 90 days past due		4,329,468			5,813,013
Total past due		18,868,851			20,431,941
Current		26,736,471			26,510,594
Total insurance assignments		45,605,322			46,942,536
Allowance for credit losses		(1,553,836	)		(1,609,951	)
Net insurance assignments	$	44,051,486		$	45,332,585

The following table presents a roll forward of the allowance for credit losses for insurance assignments:

Schedule of Allowance for Credit Losses

	Allowance
Beginning balance - January 1, 2023	$	1,609,951
Change in provision for credit losses (1)		891,959
Charge-offs		(948,074	)
Ending balance - December 31, 2023	$	1,553,836

Beginning balance - January 1, 2022	$	1,686,218
Change in provision for credit losses (1)		889,480
Charge-offs		(965,747	)
Ending balance - December 31, 2022	$	1,609,951

(1)

Included in other expenses on the consolidated statements of earnings

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2023 and 2022

2) Investments (Continued)

Investment Related Earnings

The following table presents the net realized gains and losses from sales, calls, and maturities, unrealized gains and losses on equity securities from investments and other assets.

Schedule of Gain (Loss) on Investments

	2023			2022
	Years Ended December 31
	2023			2022
Fixed maturity securities available for sale:
Gross realized gains	$	67,686		$	205,949
Gross realized losses		(106,760	)		(43,776	)
Net credit loss (provision) release		(325,314	)		-

Equity securities:
Gains (losses) on securities sold		254,917			(10,519	)
Unrealized gains (losses) on securities held at the end of the period		1,782,219			(2,109,556	)

Real estate held for investment and sale:
Gross realized gains		197,194			1,239,332
Gross realized losses		(71,792	)		(825,593	)

Other assets, including call and put option derivatives:
Gross realized gains		214,349			686,703
Gross realized losses		(175,157	)		-
Total	$	1,837,342		$	(857,460	)

The net realized gains and losses on the sale of securities are recorded on the trade date, and the cost of the securities sold is determined using the specific identification method.

Net realized gains and losses includes gains and losses by the restricted assets and cemetery perpetual care trust investments of the cemeteries and mortuaries of $730,000in net gains and $817,000in net losses for 2023 and 2022, respectively.

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2023 and ~~2021~~2022

2) Investments (Continued)

Major categories of net investment income were as follows:

	2023			2022
	Years Ended December 31
	2023			2022
Fixed maturity securities available for sale	$	16,871,558		$	12,395,764
Equity securities		616,989			511,118
Mortgage loans held for investment		33,242,094			34,949,763
Real estate held for investment and sale		14,786,017			14,563,269
Policy loans		816,711			932,362
Insurance assignments		18,118,391			18,112,840
Other investments		617,420			518,865
Cash and cash equivalents		4,250,029			1,666,945
Gross investment income		89,319,209			83,650,926
Investment expenses		(16,976,162	)		(17,453,334	)
Net investment income	$	72,343,047		$	66,197,592

Net investment income includes income earned by the restricted assets and cemetery perpetual care trust investments of the cemeteries and mortuaries of $2,365,378 and $2,404,277 for 2023 and 2022, respectively.

Net investment income on real estate consists primarily of rental revenue. Investment expenses consist primarily of depreciation, property taxes, operating expenses of real estate and an estimated portion of administrative expenses relating to investment activities.

Accrued Investment Income

Accrued investment income consists of the following:

Schedule of Accrued Investment Income

	2023		2022
	Years Ended December 31,
	2023		2022
Fixed maturity securities available for sale	$	3,984,695	$	3,563,767
Equity securities		20,451		14,496
Mortgage loans held for investment		2,661,092		3,220,709
Real estate held for investment		3,486,115		3,455,305
Policy Loans		-		37,951
Cash and cash equivalents		18,437		7,598
Total accrued investment income	$	10,170,790	$	10,299,826

3) Loans Held for Sale

The ~~Company elected~~Company’s loans held for sale portfolio is valued using the fair value ~~option for loans held for sale.~~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 ~~loans held for investment~~loan interest income and is included in mortgage fee income on the consolidated statement of earnings. ~~There aren’t any~~Included in loans ~~that~~held for sale are ~~90 or more days past due~~loans in the process of foreclosure with an aggregate unpaid principal balance of $1,636,090 and ~~on a nonaccrual status~~nil as of December 31, ~~2022.~~2023 and 2022, respectively. See Note 17 of the Notes to Consolidated Financial Statements for additional disclosures regarding loans held for sale.

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2023 and 2022

3) Loans Held for Sale (Continued)

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

Schedule of Aggregate Fair Value Loans Held for Sale

	2022			2021		2023			2022
	December 31					December 31,
	2022			2021		2023			2022
Aggregate fair value	$	141,179,620		$	302,776,827	$	126,549,190		$	141,179,620
Unpaid principal balance		141,337,811			294,481,503		127,185,867			141,337,811
Unrealized (loss) gain		(158,191	)		8,295,324
Unrealized loss							(636,677	)		(158,191	)

Mortgage Fee Income

Mortgage fee income consists of origination fees, processing fees, interest income and ~~certain~~ other income related to the origination and sale of mortgage loans held for sale.

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

Schedule of Mortgage Fee Income for Loans Held for Sale

2022 2021
Years Ended December 31
2022 2021
Loan fees $ 24,184,972 $ 37,723,433
Interest income 9,666,149 9,385,469
Secondary gains 153,870,807 (1) 230,417,029
Change in fair value of loan commitments (4,308,638 ) (3,113,095 )
Change in fair value of loans held for sale (8,834,797 ) (8,783,376 )
Provision for loan loss reserve (1,078,812 ) (2,211,230 )
Mortgage fee income $ 173,499,681 $ 263,418,230

	2023			2022
	Years Ended December 31
	2023			2022
Loan fees	$	21,724,456		$	24,184,972
Interest income		9,547,741			9,666,149
Secondary gains		68,505,014			153,870,807	(1)
Change in fair value of loan commitments		(1,123,615	)		(4,308,638	)
Change in fair value of loans held for sale		(478,460	)		(8,834,797	)
Provision for loan loss reserve		(27,164	)		(1,078,812	)
Mortgage fee income	$	98,147,972		$	173,499,681

(1)

Includes a net gain of $34,051,938 for the sale of mortgage servicing rights

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2023 and 2022

3) Loans Held for Sale (Continued)

Loan Loss Reserve

~~When a repurchase demand corresponding~~Repurchase demands from third party investors that correspond to a mortgage ~~loan~~loans previously held for sale and sold ~~to a third-party investor is received from a third-party investor, the~~are reviewed and relevant data is ~~reviewed and~~ 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 ~~is able to~~can resolve the issues relating to the repurchase demand by the third-party investor without having to make any payments to the investor.

The loan loss reserve, which is included in other liabilities and accrued expenses, is summarized as follows:

Summary of Loan Loss Reserve Included in Other Liabilities and Accrued Expenses

	December 31,
	2023			2022
Beginning Balance	$	1,725,667		$	2,447,139
Provision for current loan originations (1)		27,164			1,078,812
Charge-offs, net of recaptured amounts		(1,205,598	)		(1,800,284	)
Ending Balance	$	547,233		$	1,725,667

69(1)

Included in Mortgage fee income

The Company maintains reserves for estimated losses on current production volumes. For 2023, $27,164 in reserves were added at a rate of 4.3 basis points per loan, the equivalent of $430 per $1,000,000 in loans originated. This is a decrease over 2022, when $1,078,812 in reserves were added at a rate of 3.19 basis points per loan originated, the equivalent of $319 per $1,000,000 in loans originated. The Company monitors market data and trends, economic conditions (including forecasts) and its own experience to maintain adequate loss reserves on current production.

The Company records an allowance for ~~Sale~~ ~~(Continued)~~credit losses for its receivables in accordance with GAAP. See Note 1 regarding the adoption of ASU 2016-13.

The ~~loan loss reserve, which is included in other liabilities and accrued expenses, is summarized as follows:~~following table presents a roll forward of the allowance for credit losses:

~~Summary~~Schedule of ~~Loan Loss Reserve Included in Other Liabilities and Accrued Expenses~~Allowance Credit Losses

~~The Company maintains reserves for estimated losses on current production volumes. For the year ended December 31, 2022, $1,078,812~~ ~~in reserves were added at a rate of 3.19 basis points per loan, the equivalent of $319~~ ~~per $1,000,000~~ ~~in loans originated. This is a decrease over the year ended December 31, 2021, when $2,211,230~~ ~~in reserves were added at a rate of 3.9 basis points per loan originated, the equivalent of $390~~ ~~per $1,000,000~~ ~~in loans originated.~~ In February 2021, SecurityNational Mortgage executed a settlement agreement with Lehman Holdings in relation to two adversary proceedings wherein all mortgage loan related claims were resolved, thereby ending all liabilities asserted by Lehman Holdings and conclusively ending all proceedings between SecurityNational Mortgage and Lehman Holdings. The full amount of SecurityNational Mortgage’s settlement payment was accounted for in the Company’s loan loss reserve as of December 31, 2020 and was paid during the first quarter 2021. The unique nature of COVID-19 creates significant difficulty for forecasting potential future losses. The Company will continue to monitor data and economic conditions in order to maintain adequate loss reserves on current production. Thus, the Company believes that the final loan loss reserve as of December 31, 2022, represents its best estimate for adequate loss reserves on loans sold.

Information ~~with regard to~~regarding value of business acquired was as follows:

Presuming no additional acquisitions, net amortization charged to income is expected to approximate the following:

Actual amortization may vary based on changes in assumptions or experience. As of December 31, ~~2022,~~2023, value of business acquired is being amortized over a weighted average life of ~~5.7~~5.1 years.

Goodwill is not amortized but is tested annually for impairment. The annual impairment tests resulted in no impairment of goodwill for ~~the years ended December 31, 2022~~2023 and ~~2021.~~2022.

The carrying value of the Company’s other intangible assets were as follows which is included in other assets:

Amortization expense for ~~the years ended December 31,~~2023 and 2022 ~~and 2021~~ was $~~256,000~~254,000 and $~~99,999~~256,000, respectively, and is included in other expenses on the consolidated statements of earnings.

The following table summarizes the Company’s estimate of future amortization for the other intangible assets:

Depreciation expense for ~~the years ended December 31,~~2023 and 2022 ~~and 2021~~ was $~~2,496,906~~2,351,661 and $~~1,935,613~~2,496,906, respectively. Property and equipment are stated at cost and are depreciated over their estimated useful lives, primarily using the straight-line method. ~~During 2021, the~~The Company ~~reclassified a building with a gross building cost~~recognized an impairment loss of $~~3,640,755~~122,229 ~~with its associated accumulated depreciation~~in 2023 on a property held by the life segment. This property is listed for sale and currently under contract. Impairment losses are included in gains (losses) on the consolidated statements of $~~532,074~~ ~~from property and equipment to real estate held for investment. See Note 20 for additional information regarding property and equipment acquired through acquisitions.~~earnings.

The Federal Home Loan Banks (“the FHLBs”) are a group of cooperatives that lending institutions use to finance housing and economic development in local communities. The Company is a member of the FHLB based in Des Moines, Iowa and based in Dallas, Texas. As a member of the FHLB, the Company is required to maintain a minimum investment in capital stock of the FHLB and may pledge collateral to the bank for advances of funds to be used in its operations.

AtAs of December 31, ~~2022,~~2023, the amount available for borrowings from the FHLB of Des Moines was approximately $~~80,312,445~~77,324,238, compared with $~~19,259,722~~80,312,445 atas of December 31, ~~2021.~~2022. United States Treasury fixed maturity securities with an estimated fair value of $~~86,338,880~~88,400,026 atas of December 31, ~~2022~~2023 have been pledged at the FHLB of Des Moines as collateral for current and potential borrowings compared with $~~20,244,900~~86,338,880 at December 31, ~~2021. At~~2022. As of December 31, ~~2022~~2023 and ~~2021,~~2022, the Company had no outstanding FHLB borrowings. AtAs of December 31, ~~2022,~~2023, the Company’s total investment in FHLB stock was $~~856,800~~453,600 compared with $~~826,800~~856,800 atas of December 31, ~~2021. At~~2022. As of December 31, ~~2022,~~2023, the Company was contingently liable under standby letters of credit aggregating $~~968,903~~5,823,496~~, $443,758~~. These letters of credit are to be used ~~as collateral~~ to cover any contingency related to additional risk assessments pertaining to the Company’s captive insurance program for $443,758and for bonding of residential land development for $~~525,145~~5,379,738 ~~for land developments.~~.

AtAs of December 31, ~~2022,~~2023, the amount available for borrowings from the FHLB of Dallas was approximately $~~5,719,671~~5,104,610, compared with $~~7,794,625~~5,719,671 atas of December 31, ~~2021.~~2022. Mortgage-Backed fixed maturity securities with an estimated fair value of $~~6,696,100~~5,503,063 atas of December 31, ~~2022~~2023 have been pledged at the FHLB of Dallas as collateral for current and potential borrowings compared with $~~8,774,352~~6,696,100 at December 31, ~~2021. At~~2022. As of December 31, ~~2022~~2023 and ~~2021,~~2022, the Company had no outstanding FHLB borrowings. AtAs of December 31, ~~2022,~~2023, the Company’s total investment in FHLB stock was $~~1,743,500~~1,826,200 compared with $~~1,720,300~~1,743,500 atas of December 31, ~~2021.~~2022.

The Company has a $2,000,000 revolving line-of-credit with a bank with interest payable at the ~~prime~~Prime rate plus ~~1.25~~0.75%% with a 33%% prime floor, secured by the capital stock of Security National Life and maturing March 31, 2024, renewable annually. As of December 31, 2023, ~~renewable annually. At December 31, 2022,~~ the Company was contingently liable under standby letters of credit aggregating $~~622,293~~38,290, to be used as collateral for residential subdivision land ~~developments.~~development. The standby letters of credit will draw on the line of credit if necessary. The Company does not expect any material losses to result from the issuance of the standby letters of credit. As of December 31, ~~2022,~~2023, there were no amounts outstanding under the revolving line-of-credit.

The Company also has a $2,500,000 revolving line-of-credit with a bank with interest payable at the daily simple SOFR plus ~~2.35~~2.35%%, which includes a mandatory .10% credit spread adjustment, maturing ~~December~~March 31, ~~2023~~2024. As of December 31, ~~2022,~~2023, the Company was contingently liable under standby letters of credit aggregating $1,250,000, to be used as collateral for SecurityNational Mortgage’s state licensing. The standby letters of credit will draw on the line of credit if necessary. The Company does not expect any material losses to result from the issuance of the standby letters of credit. As of December 31, 2023, there were no amounts outstanding under the revolving line-of-credit.

The Company, through its subsidiary SecurityNational Mortgage, has a $~~100,000,000~~ ~~line of credit with Wells Fargo Bank N.A.~~ ~~The agreement charges interest at the 1-Month SOFR rate plus 2.1% and matures on~~ ~~June 2, 2023~~. SecurityNational Mortgage is required to comply with covenants for adjusted tangible net worth, unrestricted cash balance, the ratio of indebtedness to adjusted tangible net worth, and the liquidity overhead coverage ratio, and a quarterly gross profit of at least $~~1.00~~.

~~The Company, through its subsidiary SecurityNational Mortgage, has a~~ line of credit with Texas Capital Bank N.A. This agreement ~~with the bank~~ allows SecurityNational Mortgage to borrow up to $100,000,000 for the sole purpose of funding mortgage ~~loans.~~loans (the “Texas Capital Bank Warehouse Line of Credit”). The agreement charges interest at the 1-Month SOFR rate plus 2%2.0% and matures on November ~~9, 2023~~30, 2024. The Company is required to comply with covenants for adjusted tangible net worth, unrestricted cash balance, and minimum combined pre-tax income (excluding any changes in the fair value of mortgage servicing rights) of at least $1.00 on a rolling four-quarter basis.

The Company through its subsidiary SecurityNational Mortgage, has a line of credit with ~~Comerica~~U.S Bank. This agreement ~~with the bank~~ allows SecurityNational Mortgage to borrow up to $~~75,000,000~~15,000,000 for the sole purpose of funding mortgage ~~loans.~~ ~~The agreement charges interest at the 1-Month SOFR rate plus 2.50%~~loans (the “U.S. Bank Warehouse Line of Credit” and, ~~matures on~~ ~~May 26, 2023~~. The Company is required to comply with covenants for adjusted tangible net worth, unrestricted cash balance, and minimum combined pre-tax income (excluding any changes in the fair value of mortgage servicing rights) of at least $~~1.00~~ ~~on a rolling twelve months.~~

~~The Company through its subsidiary SecurityNational Mortgage, has a line of credit with U.S Bank. This agreement~~together with the ~~bank allows SecurityNational Mortgage to borrow up to $50,000,000~~ ~~for~~Texas Capital Bank Warehouse Line of Credit, the ~~sole purpose~~“Warehouse Lines of ~~funding mortgage loans.~~Credit”). The agreement charges interest at 2.10% plus the greater of (i) 0%, and (ii) the one-month forward-looking term rate based on SOFR and matures on ~~June 2, 2023~~May 26, 2024. The Company is required to comply with covenants for adjusted tangible net worth, unrestricted cash balance, and minimum combined pre-tax income (excluding any changes in the fair value of mortgage servicing rights) of at least $1.00 on a rolling twelve months.

The agreements for the warehouse lines of credit include cross default provisions ~~in that a covenant violation~~where certain events of default under ~~one agreement constitutes a covenant violation~~other of SecurityNational Mortgage’s obligations constitute events of default under the ~~other agreement.~~warehouse lines of credit. As of December 31, ~~2022,~~2023, the Company was not in compliance with the net income covenant of the warehouse lines of credit and its operating cash flow covenant for its standby letter of credit with its primary bank. SecurityNational Mortgage has received or is in the process of receiving waivers under the warehouse lines of credit from the warehouse banks. In the unlikely event the Company is required to repay the outstanding advances of approximately $7,732,000 on the warehouse line of credit that has not provided a covenant waiver, the Company has sufficient cash and borrowing capacity on the warehouse lines of credit that have provided covenant waivers to fund its origination activities. The Company has performed an internal analysis of its funding capacities of both internal and external sources and has determined that there are sufficient funds to continue its business model. The Company continues to negotiate other warehouse lines of credit with other lenders.

The Company has debt covenants on its revolving lines of credit and is required to comply with minimum operating cash flow ratios and minimum net worth for each of its business segments. The Company also has debt covenants for one of its loans on real estate for a minimum consolidated operating cash flow ratio, minimum liquidity, and consolidated net worth. In addition to these financial debt covenants, the company is required to provide segment specific financial statements and building specific financial statements on all bank loans. As of December 31, 2023, the Company was in compliance with all these debt covenants.

~~The following tabulation shows the combined maturities of bank and other loans payable:~~

~~Schedule of Combined Maturities of Bank Loans Payable Lines of Credit and Notes and Contracts Payable~~

~~Interest expense in 2022 and 2021 was $7,830,443~~ ~~and $7,127,516, respectively. Interest paid in 2022 and 2021 was $7,697,921~~ ~~and $7,290,867, respectively.~~

The following tabulation shows the combined maturities of bank and other loans payable:

Schedule of Combined Maturities of Bank Loans Payable Lines of Credit and Notes and Contracts Payable

Interest expense in 2023 and 2022 was $4,865,327and ~~2021~~$7,830,443, respectively.

8) Cemetery Perpetual Care Trust Investments and Obligation and Restricted Assets

State law requires the Company to pay into endowment care trusts a portion of the proceeds from the sale of certain cemetery property interment rights for cemeteries that have established an endowment care trust. These endowment care trusts are defined as ~~variable interest entities~~Variable Interest Entities pursuant to GAAP. ~~Also, management has determined that the~~The Company is the primary beneficiary of these trusts, as it absorbs both ~~a majority of~~ the losses and ~~returns~~any expenses associated with the trusts. The Company has consolidated cemetery endowment care trust investments with a corresponding amount recorded as Cemetery Perpetual Care Obligation in the accompanying consolidated balance sheets.

The components of the cemetery perpetual care investments and obligation as of December 31, ~~2022~~2023 are as follows:

8) Cemetery Perpetual Care Trust Investments and Obligation and Restricted Assets(Continued)

The components of the cemetery perpetual care investments and obligation as of December 31, ~~2021~~2022 are as follows:

The ~~following tables summarize~~table below summarizes unrealized losses on fixed ~~maturities~~maturity securities available for sale that were carried at estimated fair value atas of December 31, ~~2022~~2023 and ~~at December 31, 2021.~~2022. The unrealized losses were primarily related to interest rate ~~fluctuations and inflation.~~fluctuations. The tables set forth unrealized losses by duration with the fair value of the related fixed maturity securities:

~~There~~Relevant holdings were 5comprised of four securities with fair ~~value of~~values aggregating ~~96.4~~98.1%% of aggregate amortized cost atas of December 31, ~~2022.~~2023. There were 2five securities with fair ~~value of~~values aggregating ~~99.1~~96.4%% of aggregate amortized cost atas of December 31, ~~2021.~~2022. No credit losses have been recognized for ~~the years ended December 31,~~2023 and 2022, ~~and 2021,~~ since the increase in unrealized losses is primarily a result of ~~the recent rise~~increases in interest rates. See Note 2 for additional information regarding the Company’s evaluation of the allowance for credit losses for fixed maturity securities available for sale.

8) Cemetery Perpetual Care Trust Investments and Obligation and Restricted Assets(Continued)

The ~~following~~ table below presents the amortized cost and estimated fair value of fixed maturity securities available for sale atas of December 31, ~~2022,~~2023, by contractual maturity. Expected maturities may differ from contractual maturities because certain borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

The Company has also established certain restricted assets to provide for future merchandise and service obligations incurred in connection with its pre-need sales for its cemetery and mortuary segment.

Restricted cash also represents escrows held for borrowers and investors under servicing and appraisal agreements relating to mortgage loans, funds held by warehouse banks in accordance with loan purchase agreements and funds held in escrow for certain real estate construction development projects. Additionally, the Company elected to maintain its medical benefit fund without change from the prior year and has included this amount as a component of restricted cash. These restricted cash items are for the Company’s life insurance and mortgage segments.

Schedule of Restricted Assets in Cemetery and Mortuary Endowment Care and Pre need Merchandise Funds

8) Cemetery Perpetual Care Trust Investments and Obligation and Restricted Assets (Continued)

A surplus note receivable in the amount of $4,000,000 at December 31, 2023 and 2022, from Security National Life, was eliminated in consolidation.

The table below summarizes unrealized losses on fixed maturity securities available for sale that were carried at estimated fair value as of December 31, 2023 and 2022. The unrealized losses were primarily related to interest rate fluctuations. The tables set forth unrealized losses by duration with the fair value of the related fixed maturity securities.

8) Cemetery Perpetual Care Trust Investments and Obligation and Restricted Assets(Continued)

~~Restricted assets~~Relevant holdings were comprised of 12 securities with fair values aggregating 99.1% of aggregate amortized cost as of December 31, ~~2021 are summarized as follows:~~

~~A surplus note receivable in the amount of $4,000,000~~ ~~at December 31, 2022 and 2021, from Security National Life, was eliminated in consolidation.~~

The following tables summarize unrealized losses on fixed maturities securities that were carried at estimated fair value at December 31, 2022 and at December 31, 2021. The unrealized losses were primarily related to interest rate fluctuations and inflation. The tables set forth unrealized losses by duration with the fair value of the related fixed maturity securities:

~~There were~~ 17 securities with fair ~~value~~values aggregating of ~~98.2~~98.2%% of aggregate amortized cost at December 31, 2022. ~~There were 4 securities with fair value of~~ ~~99.4% of aggregate amortized cost at December 31, 2021.~~ No credit losses have been recognized for ~~the years ended December 31,~~2023 and 2022, ~~and 2021,~~ since the increase in unrealized losses is primarily a result of ~~the recent rise~~increases in interest rates.

8) ~~Cemetery Perpetual Care Trust Investments and Obligation and Restricted Assets~~ ~~(Continued)~~ See Note 3 for additional information regarding the Company’s evaluation of the allowance for credit losses for fixed maturity securities available for sale.

See Notes 1, 2 and 17 for additional information regarding restricted assets and cemetery perpetual care trust investments.

Significant components of the Company’s deferred tax ~~(assets)~~assets and liabilities are approximately as follows:

The valuation allowance relates to differences between recorded deferred tax assets and liabilities and ultimate anticipated realization.

The reconciliation of income tax expense at the U.S. federal statutory rates is as follows:

The Company’s overall effective tax rate for ~~the years ended December 31,~~2023 and 2022 ~~and 2021~~ was ~~25.3~~11.1%% and ~~23.7~~25.3%% respectively. The Company’s effective tax rates differ from the U.S. federal statutory rate of 2121%% partially due to its provision for state income taxes and ~~an increase~~a decrease to the valuation allowance related to Kilpatrick Life Insurance Company. The ~~increase~~decrease in the effective tax rate when compared to the prior year is partially due to ~~an increase~~a decrease to the valuation allowance in the current period when compared to the prior period year.

AtAs of December 31, ~~2022,~~2023, the Company had no significant unrecognized tax benefits. As of December 31, ~~2022,~~2023, the Company does not expect any material changes to the estimated amount of unrecognized tax benefits in the next twelve months. Federal and state income tax returns for ~~2019~~2020 through ~~2022~~2023 are subject to examination by taxing authorities.

The Company follows the procedure of reinsuring risks ~~in excess~~ of more than a specified limit, which ~~ranged~~ranges from $25,000 to $100,000 ~~during the years 2022~~on newly issued policies. The Company has also assumed various reinsurance agreements through acquisition of various life companies and ~~2021.~~has assets held in trust related to certain agreements. The Company is ultimately liable for these reinsured amounts in the event such reinsurers are unable to pay their portion of the claims. The Company evaluates the financial condition of reinsurers and monitors the concentration of credit risk. The Company had a significant concentration of credit risk with a single reinsurer of ~~93.7~~94.0%% and ~~93.6~~93.7%% of ceded life insurance in force as of December 31, ~~2022~~2023 and ~~2021,~~2022, respectively. This represented approximately ~~11.3~~8.8%% and ~~11.9~~11.3%% of the Company’s total life insurance in force as of December 31, 2023 and 2022, ~~and 2021,~~ respectively. ~~The Company has also assumed insurance from other companies.~~ See Financial Statement Schedule IV for information regarding life insurance in force and premiums for reinsurance.

Future loan losses can be extremely difficult to estimate. However, the Company believes that ~~its~~the Company’s reserve methodology and its current practice of property preservation allow it to estimate potential losses on loans sold. ~~The estimated liability~~See Note 3 for ~~indemnification losses is included in other liabilities and accrued expenses and, as of December 31, 2022 and 2021,~~additional information about the ~~balances were $1,725,667~~ ~~and $2,447,139, respectively. The Company believes that the~~Company’s loan loss ~~reserve as of December 31, 2022, represents its best estimate for adequate loss reserves on loans sold.~~reserve.

The Company leases office space and equipment under various non-cancelable agreements. See Note 2423 regarding leases.

The Company has ~~entered into~~ commitments to fund existing construction and land development loans ~~and has also provided financing for land acquisition and development.~~pursuant to the various loan agreements. As of December 31, ~~2022,~~2023, the Company’s commitments were approximately $~~231,250,000~~146,953,000, for these loans, of which $~~175,754,000~~104,977,000 had been funded. The Company advances funds in accordance with the loan agreements once the work has been completed and an independent inspection is made. The maximum loan commitment ranges between 5050%% and 8080%% of appraised value. The Company receives fees and interest for these loans and the interest rate is generally fixed at ~~5.25~~5.25%% to ~~8.50~~8.50%% per annum. Maturities range between six and eighteen months.

The Company belongs to a captive insurance group (“the captive group”) for certain casualty insurance, worker compensation and general liability programs. ~~Insurance~~The captive group maintains insurance reserves ~~are maintained~~ relative to these programs. The level of exposure from catastrophic events is limited by the purchase of stop-loss and aggregate liability reinsurance coverage. When estimating the insurance liabilities and related reserves, the captive ~~insurance management~~group considers ~~a number of~~several factors, which include historical claims experience, demographic factors, severity factors and valuations provided by independent third-party actuaries. If actual claims or adverse development of loss reserves occurs and exceed these estimates, additional reserves may be ~~required.~~required from the Company and its members. The estimation process contains uncertainty since captive insurance management must use judgment to estimate the ultimate cost that will be incurred to settle reported claims and unreported claims for incidents incurred but not reported as of the balance sheet date.

The Company is a defendant in various other legal actions arising from the normal conduct of business. ~~Management~~The Company believes that none of the actions, if adversely determined, will have a material effect on the Company’s financial position or results of operations. Based on ~~management’s~~the Company’s assessment and legal counsel’s representations concerning the likelihood of unfavorable outcomes, no amounts have been accrued for the above claims in the consolidated financial statements.

The Company is not a party to any other material legal proceedings outside the ordinary course of business or to any other legal proceedings, which, if adversely determined, would have a material adverse effect on its financial condition or results of operations.

The Company and its subsidiaries had a noncontributory Employee Stock Ownership Plan (“ESOP”) for all eligible employees. On November 25, 2019, the Company distributed a notice of intent to terminate the ESOP Plan to all current plan participants. The Company also filed Form 5310 application for determination for terminating plan, with the IRS on December 6, 2019. As of the 4^th quarter of 2020, the Company began to distribute the ESOP Plan assets to participants that had made a distribution election. The Company received approval of its application from the IRS and distributed all the remaining ESOP Plan assets to the participants during 2021.11) Retirement Plans

The Company has three 401(k) savings plans covering all eligible employees which ~~includes~~include employer participation in accordance with the provisions of Section 401(k) of the Internal Revenue Code. The plans allow participants to make pretax contributions up to a maximum of $~~20,500~~22,500 and $~~19,500~~20,500 for the years ~~2022~~2023 and ~~2021,~~2022, respectively or the statutory limits. ~~Beginning in January 2008, the Company elected to be a “Safe Harbor” Plan for its matching 401(k) contributions.~~ The Company matched 100% of up to 3% of an employee’s total annual compensation and matched 50% of 4% to 5% of an employee’s annual ~~compensation.~~compensation. The match was in Company stock. The Company’s contribution for ~~the years ended December 31,~~2023 and 2022 ~~and 2021~~ was $~~2,573,956~~1,819,275 and $~~2,820,315~~2,573,956, respectively under the ~~“Safe Harbor”~~ plan.

~~In 2001, the Company’s Board of Directors adopted~~The Company has a Non-Qualified Deferred Compensation ~~Plan, and this plan was amended in 2005.~~Plan. Under the terms of the Plan, the Company will provide deferred compensation for a select group of management or highly compensated employees, within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended. The Board has appointed a Committee of the Company to be the Plan Administrator and to determine the employees who are eligible to participate in the plan. The employees who participate may elect to defer a portion of their compensation into the plan. The Company may contribute into the plan at the discretion of the Company’s Board of Directors. The Company did not make any contributions for ~~2022~~2023 and ~~2021.~~2022.

Effective December 2, 2022, the Board members approved a motion to extend the Chief Executive Officer’s employment agreement, dated December 4, 2012, for an additional two-year term ending December 2024. In the event of disability, the Chief Executive Officer’s salary would be continued for up to five years at 75% of its current level of compensation. In the event of a sale or merger of the Company and the Chief Executive Officer is not retained in his current position, the Company would be obligated to continue paying the Chief Executive Officer’s current compensation and benefits for seven years following the merger or sale. The agreement further provides that the Chief Executive Officer is entitled to receive annual retirement benefits beginning (i) one month from the date of his retirement (to commence no sooner than age 65), (ii) five years following complete disability, or (iii) upon termination of his employment without cause. These retirement benefits are to be paid for a period of twenty years in annual installments in the amount equal to 75% of his then current level of ~~compensation.~~compensation ~~In the event that~~. If the Chief Executive Officer dies prior to receiving all retirement benefits thereunder, the remaining benefits are to be paid to his heirs. The Company expensed nil and $~~900,000~~nil during ~~the years ended December 31,~~2023 and 2022, ~~and 2021,~~ respectively, to cover the present value of anticipated retirement benefits under the employment agreement. The liability accrued was $7,556,363 and $7,556,363 as of December 31, 2023 and 2022, ~~and 2021,~~ respectively.

The Company, through its wholly owned subsidiary, SecurityNational Mortgage, also has an employment agreement with its former Vice President of Mortgage Operations and President of SecurityNational Mortgage, who retired from the Company on December 31, 2015. Under the terms of the employment agreement, this individual is entitled to receive retirement benefits from the Company for a period of ten years in an amount equal to 50% of his rate of compensation at the time of his retirement, which was $267,685 for the year ended December 31, 2015. Such retirement payments are paid monthly during the ten-year period. ~~In the event that~~If this individual dies prior to receiving all of his retirement benefits under his employment agreement, the remaining benefits will be made to his heirs. The company paid $133,843 and $133,843 in retirement compensation to this individual during ~~the years ended December 31,~~2023 and 2022, ~~and 2021,~~ respectively. The liability accrued was $~~401,529~~267,686 and $~~535,370~~401,529 as of December 31, ~~2022~~2023 and ~~2021,~~2022, respectively and is included in ~~Other~~other liabilities and accrued expenses on the consolidated balance sheets.

The Company has one class of preferred stock of $1.00 par value, 5,000,000 shares authorized, of which none are issued. The preferred stock is non-voting.

The Company has two classes of common stock with shares outstanding, Class A common shares and Class C common shares. Class C shares have 10 votes per share on all matters except for the election of one third of the directors who are elected solely by the Class A ~~shares.~~shares. Class C shares are convertible into Class A shares at any time on a ~~one to one~~one-to-one ratio.

Stockholders of both Class A and Class C common stock have received 5% stock dividends in the years 1990 through 2019, a 7.5% stock dividend in the year 2020, and a 5% stock dividend in the years 2021 ~~and 2022,~~through 2023, as authorized by the Company’s Board of ~~Directors.~~Directors.

The Company has Class B common stock of $1.00 par value, 5,000,000 shares authorized, of which none are issued. Class B shares are non-voting stock except to any proposed amendment to the Articles of Incorporation which would affect Class B common stock.

Earnings per share amounts have been retroactively adjusted for the effect of annual stock dividends. In accordance with GAAP, the basic and diluted earnings per share amounts were calculated as follows:

For ~~the years ended December 31,~~2023 and 2022, ~~and 2021,~~ there were ~~339,150~~nil and ~~50,000~~339,150 of anti-dilutive employee 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.

The Company has ~~three stock compensation~~equity incentive plans (the “2013 Plan”, the “2014 Director Plan” and the “2022 ~~Equity Incentive~~ Plan”).

Stock based compensation expense for stock options issued of $~~929,321~~601,058 and $~~118,384~~929,321 has been recognized under these plans for ~~the years ended December 31,~~2023 and 2022, ~~and 2021,~~ respectively, and is included in personnel expenses on the consolidated statements of earnings. As of December 31, ~~2022,~~2023, the total unrecognized compensation expense related to the stock options issued was $~~506,701~~677,948, which is expected to be recognized over the remaining vesting period.

The fair value of each stock 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.

The following table summarizes the assumptions used in estimating the fair value of each stock option granted along with the weighted-average fair value of the stock options granted.

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 years ended December 31,~~2023 and 2022 ~~and 2021~~ was $~~619,064~~657,354 and $~~1,153,417~~619,064, respectively.

Stock based compensation expense for RSUs issued of $~~371~~304 and $~~nil~~371 has been recognized under these plans for the ~~years ended December 31,~~2023 and 2022, ~~and 2021,~~ respectively, and is included in personnel expenses on the consolidated statements of earnings. As of December 31, ~~2022,~~2023, the total unrecognized compensation expense related to the RSUs issued was $~~742~~3,263, which is expected to be recognized over the remaining vesting period of three months. The fair value of each RSU granted is determined based on the Company’s stock price on the date of grant. The weighted average grant date fair value of RSUs granted on December 2, 2022 was $~~6.48~~.period.

The Company’s insurance subsidiaries prepare their statutory-basis financial statements in conformity with accounting practices prescribed or permitted by the insurance department of the applicable state of domicile. Prescribed statutory accounting practices include a variety of publications of the NAIC, as well as state laws, regulations, and general administrative rules. Permitted statutory accounting practices encompass all accounting practices not so prescribed.

The states in which the Company’s life insurance subsidiaries are domiciled require the preparation of statutory-basis financial statements in conformity with the NAIC Accounting Practices and Procedures Manual, subject to any deviations prescribed or permitted by the applicable insurance commissioner and/or director. Statutory accounting practices differ from GAAP primarily since they require charging policy acquisition and certain sales inducement costs to expense as incurred, establishing life insurance reserves based on different actuarial assumptions, and valuing certain investments and establishing deferred taxes on a different basis.

Statutory net income and capital and surplus of the Company’s insurance subsidiaries, determined in accordance with statutory accounting practices prescribed or permitted by insurance regulatory authorities are as follows:

The Utah, Louisiana, Mississippi, and Texas Insurance Departments impose minimum risk-based capital (“RBC”) requirements that were developed by the NAIC on insurance enterprises. The formulas for determining the RBC specify various factors that are applied to financial balances or various levels of activity based on the perceived degree of risk. Regulatory compliance is determined by a ratio (the Ratio) of the enterprise’s regulatory total adjusted capital, as defined by the NAIC, to its authorized control level, as defined by the NAIC. Enterprises below specific trigger points or ratios are classified within certain levels, each of which requires specified corrective action. The life insurance subsidiaries each have a ratio that is greater than the first level of regulatory action as of December 31, ~~2022.~~2023. The Company does not have any guarantees to maintain the capital and surplus of any affiliates except for the Company’s agreement to provide additional capital to Security National Life Insurance Company in the event risk-based capital drops below 350% of the authorized control level.

Generally, the net assets of the life insurance subsidiaries available for transfer to the Company are limited to the amounts of the life insurance subsidiaries net assets, as determined in accordance with statutory accounting practices, that exceed minimum statutory capital requirements. Additional requirements must be met depending on the state, and payments of such amounts as dividends are subject to approval by regulatory authorities.

Under the Utah Insurance Code, Security National Life Insurance Company is permitted to pay stockholder dividends, or otherwise make distributions, to the Company subject to certain limitations. Security National Life Insurance Company must ensure that its surplus held for policyholders is reasonable in relation to its outstanding liabilities and adequate to its financial needs after payment of any such dividend or distribution. Furthermore, where any dividend or distribution, together with all other dividends and distributions made within the preceding 12 months, exceeds the lesser of (i) 10% of its surplus held for policyholders as of the next preceding December 31; or (ii) its net gain from operations, not including realized capital gains, for the 12-month period ending the next preceding December 31, such dividend or distribution constitutes “extraordinary” under Utah law and Security National Life Insurance Company would be required to file notice of its intention to declare such a dividend or make such a distribution with the Utah Commissioner and the Utah Commissioner must either approve the distribution or dividend or not disapprove the dividend or distribution within 30 days’ of the notice filing. Based on Security National Life Insurance Company’s surplus held for policyholders and net gain from operations as of December 31, ~~2022,~~2023, the maximum aggregate amount of dividends and distributions that it could pay or make in ~~2023~~2024 and which would not constitute an “extraordinary” dividend or distribution under Utah law and would therefore not require notice and approval or lack of disproval from the Utah Commissioner, would be approximately $~~6,420,000~~7,357,000.

Under the Louisiana Insurance Code, First Guaranty Insurance Company and Kilpatrick Life Insurance Company are permitted to pay stockholder dividends, or otherwise make distributions, to the Company subject to certain limitations. First Guaranty Insurance Company and Kilpatrick Life Insurance Company must ensure that its surplus held for policyholders is reasonable in relation to its outstanding liabilities and adequate to its financial needs after payment of any such dividend or distribution. Furthermore, where any dividend or distribution, together with all other dividends and distributions made within the preceding 12 months, exceeds the lesser of (i) 10% of its surplus held for policyholders as of the next preceding December 31; or (ii) its net gain from operations, not including realized capital gains, for the 12-month period ending the next preceding December 31, such dividend or distribution constitutes “extraordinary” under Louisiana law and First Guaranty Insurance Company and Kilpatrick Life Insurance Company would be required to file notice of its intention to declare such a dividend or make such a distribution with the Louisiana Commissioner and the Louisiana Commissioner must either approve the distribution or dividend or not disapprove the dividend or distribution within 30 days’ of the notice filing. Based on First Guaranty Insurance Company’s and Kilpatrick Life Insurance Company’s surplus held for policyholders and net gain from operations as of December 31, ~~2022,~~2023, the maximum aggregate amount of dividends and distributions that it could pay or make in ~~2023~~2024 and which would not constitute an “extraordinary” dividend or distribution under Louisiana law and would therefore not require notice and approval or lack of disproval from the Louisiana Commissioner, would be approximately $~~710,000~~742,000 for First Guaranty Insurance Company and $~~1,650,000~~1,973,000 for Kilpatrick Life Insurance Company.

The Company has three reportable business segments: life insurance, cemetery and mortuary, and mortgage. The Company’s life insurance segment consists of life insurance premiums and operating expenses from the sale of insurance products sold by the Company’s independent agency force and net investment income derived from investing policyholder and segment surplus funds. The Company’s cemetery and mortuary segment consists of revenues and operating expenses from the sale of at-need cemetery and mortuary merchandise and services at its mortuaries and cemeteries, pre-need sales of cemetery spaces after collection of 10% or more of the purchase price and the net investment income from investing segment surplus funds. The Company’s mortgage segment consists of fee income and expenses from the originations of residential mortgage loans and interest earned and interest expenses from warehousing pre-sold loans before the funds are received from financial institutional investors.

The accounting policies of the reportable segments are the same as those described in the Significant Accounting Principles. Intersegment revenues are recorded at cost plus an agreed upon intercompany profit and are eliminated upon consolidation.

The Company’s reportable segments are business units that are managed separately due to the different products provided and the need to report separately to the various regulatory jurisdictions. The Company regularly reviews the quantitative thresholds and other criteria to determine when other business segments may need to be reported.

The Company’s Board of Directors has a written procedure, which requires disclosure to the Board of any material interest or any affiliation on the part of any of its officers, directors or employees that is in conflict or may ~~be in~~ conflict with the interests of the Company. The Company and its Board of Directors isare unaware of any related party transactions that require disclosure as of December 31, ~~2022.~~2023.

GAAP defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. GAAP also specifies a fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. Fair value measurements are classified under the following hierarchy:

Level 1: Financial assets and financial liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that the Company can access.

Level 2: Financial assets and financial liabilities whose values are based on the following:

Level 3: Financial assets and financial liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs may reflect the Company’s estimates of the assumptions that market participants would use in valuing ~~the~~ financial assets and financial liabilities.

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

The following methods and assumptions were used by the Company in estimating the fair value disclosures related to significant financial instruments:

Fixed Maturity Securities Available for Sale: The fair values of fixed maturity securities are based on quoted market prices, when available. For fixed maturity securities not actively traded, fair values are estimated using values obtained from independent pricing services, or in the case of private placements (considered Level 3 financial assets), are estimated by discounting expected future cash flows using a current market value applicable to the coupon rate, credit, and maturity of the investments.

Equity Securities: The fair values for equity securities are based on quoted market prices.

Restricted Assets: A portion of these assets include ~~mutual funds,~~ equity securities and fixed maturity securities available for sale that have quoted market prices that are used to determine fair value. Also included are cash and cash equivalents and participations in mortgage loans. The carrying amounts reported in the accompanying consolidated balance sheets for these financial instruments approximate their fair values due to their short-term nature.

Cemetery Perpetual Care Trust Investments: A portion of these assets include equity securities and fixed maturity securities available for sale that have quoted market prices that are used to determine fair value. Also included are cash and cash equivalents. The carrying amounts reported in the accompanying consolidated balance sheets for these financial instruments approximate their fair values due to their short-term nature

Call and Put Options: The Company uses quoted market prices to value its call and put options.

Additionally, there were no transfers between Level 1 and Level 2 in the fair value hierarchy.

Loans Held for Sale: The Company elected the fair value option for loans held for sale. The fair value is based on quoted market prices, when available. When a quoted market price is not readily available, the Company uses the market price from its last sale of similar assets. Fair value is often difficult to determine and may contain significant unobservable inputs.

Loan Commitments and Forward Sale Commitments: The Company’s mortgage segment enters into loan commitments with potential borrowers and forward sale commitments to sell loans to third-party investors. The Company also uses a hedging strategy for these transactions. A loan commitment binds the Company to lend funds to a qualified borrower at a specified interest rate and within a specified period, ~~of time,~~ generally up to 30 days after issuance of the loan commitment. Loan commitments are defined to be derivatives under GAAP and are recognized at fair value on the consolidated balance sheets with changes in their fair values recorded in current earnings.

The Company estimates the fair value of a loan commitment based on the change in estimated fair value of the underlying mortgage loan, quoted MBS prices, estimates of the fair value of mortgage servicing rights, and an estimate of the probability that the mortgage loan will fund within the terms of the commitment. The change in fair value of the underlying mortgage loan is measured from the date the loan commitment is issued. Following issuance, the value of a mortgage loan commitment can be either positive or negative depending upon the change in value of the underlying mortgage loans. Fallout rates and other factors from the Company’s recent historical data are used to estimate the quantity and value of mortgage loans that will fund within the terms of the commitments.

Impaired Mortgage Loans Held for Investment: The Company believes that the fair value of these nonperforming loans will approximate the unpaid principal balance expected to be recovered based on the fair value of the underlying collateral. For residential and commercial properties, the collateral value is estimated by obtaining an independent appraisal. The appraisal typically considers area ~~comparables~~comparable properties and property condition as well as potential rental income that could be generated (particularly for commercial properties). For residential construction loans, the collateral is typically incomplete, so fair value is estimated as the replacement cost using data from a provider of building cost information to the real estate construction.

Impaired Real Estate Held for Investment: The Company believes that in an orderly market, fair value will approximate the replacement cost of a home and the rental income provides a cash flow stream for investment analysis. The Company believes the highest and best use of the properties are as income producing assets since it is the Company’s intent to hold the properties as rental properties, matching the income from the investment in rental properties with the funds required for future estimated policy claims.

It should be noted that for replacement cost, when determining the fair value of real estate held for investment, the Company uses a provider of building cost information to the real estate construction industry. For the investment analysis, the Company used market data based upon its real estate operation experience and projected the present value of the net rental income over seven years. The Company also considers area comparable properties and property condition when determining fair value.

In addition to this analysis performed by the Company, the Company depreciates Real Estate Held for Investment. This depreciation reduces the book value of these properties and lessens the exposure to the Company from further deterioration in real estate values.

Mortgage Servicing Rights: The Company initially recognizes MSRs at their estimated fair values derived from the net cash flows associated with the servicing contracts, where the Company assumes the obligation to service the loan in the sale transaction.

The following table summarizes Level 1, 2 and 3 financial assets and financial liabilities measured at fair value on a recurring basis by their classification in the consolidated balance sheet atas of December 31, ~~2022.~~2023.

For Level 3 assets and liabilities measured at fair value on a recurring basis as of December 31, 2023, the significant unobservable inputs used in the fair value measurements were as follows:

For Level 3 assets and liabilities measured at fair value on a recurring basis as of December 31, 2022, the significant unobservable inputs used in the fair value measurements were as follows:

~~For Level 3 assets and liabilities measured at fair value on a recurring basis as of December 31, 2021, the significant unobservable inputs used in the fair value measurements were as follows:~~

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

Schedule of Changes in the Consolidated Balance Sheet Line Items Measured Using Level 3 Inputs

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

The Company did not have any financial assets and financial liabilities measured at fair value on a nonrecurring basis as of December 31, 2023.

The following table ~~summarize~~summarizes Level 1, 2 and 3 financial assets and financial liabilities measured at fair value on a nonrecurring basis by their classification in the consolidated balance sheet atas of December 31, 2022.

The following table summarize Level 1, 2 and 3 financial assets and financial liabilities measured at fair value on a nonrecurring basis by their classification in the consolidated balance sheet at December 31, 2021.

ASC 825, Financial Instruments, requires disclosure of fair value information about financial instruments whether or not recognized in the balance sheet, for which it is practicable to estimate that value.

~~Management~~The Company uses its best judgment in estimating the fair value of the Company’s financial instruments; however, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented herein are not necessarily indicative of the amounts the Company could have realized in a sales transaction atas of December 31, ~~2022~~2023 and ~~2021.~~2022.

The carrying values and estimated fair values for such financial instruments, and their corresponding placement in the fair value hierarchy, are summarized as follows as of December 31, ~~2022:~~2023:

The methods, assumptions and significant valuation techniques and inputs used to estimate the fair value of financial instruments are summarized as follows:

Mortgage Loans Held for Investment: The estimated fair value of the Company’s mortgage loans held for investment is determined using various methods. The Company’s mortgage loans are grouped into three categories: Residential, Residential Construction and Commercial. When estimating the expected future cash flows, it is assumed that all loans will be held to maturity, and any loans that are non-performing are evaluated individually for impairment.

Residential — The estimated fair value of mortgage loans is determined through a combination of discounted cash flows (estimating expected future cash flows of payments and discounting them using current interest rates from single family mortgages) and considering pricing of similar loans that were sold recently.

Residential Construction — These loans are primarily short in maturity. Accordingly, the estimated fair value is determined to be the carrying value.

Commercial — The estimated fair value is determined by estimating expected future cash flows of payments and discounting them using current interest rates for commercial mortgages.

Policy Loans: The carrying amounts reported in the accompanying consolidated balance sheet for these financial instruments approximate their fair values because they are fully collateralized by the cash surrender value of the underlying insurance policies.

Insurance Assignments, Net: These investments are short in maturity. Accordingly, the carrying amounts reported in the accompanying consolidated balance sheet for these financial instruments approximate their fair values.

Bank and Other Loans Payable: The carrying amounts reported in the accompanying consolidated balance sheet for ~~these financial instruments~~the warehouse lines of credit approximate their fair values due to their relatively short-term maturities and variable interest rates. The carrying amounts reported in the accompanying consolidated balance sheet for the bank loans collateralized by real estate approximate their fair values due to the non-assumable fixed rates.

Policyholder Account Balances and Future Policy Benefits-Annuities: Future policy benefit reserves for interest-sensitive insurance products are computed under a retrospective deposit method and represent policy account balances before applicable surrender charges. Policy benefits and claims that are charged to expense include benefit claims incurred in the period ~~in excess of~~more than related policy account balances. Interest ~~crediting~~credit rates for interest-sensitive insurance products ranged from ~~1.5%~~1.5% to ~~6.5%~~6.5%. The fair values for these investment-type insurance contracts are estimated based on the present value of liability cash flows. The fair values for the Company’s insurance contracts other than investment-type contracts are not required to be disclosed. However, the fair values of liabilities under all insurance contracts are taken into consideration in the Company’s overall management of interest rate risk, such that the Company’s exposure to changing interest rates is minimized through the matching of investment maturities with amounts due under insurance contracts.

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

The following is the accumulated balances of other comprehensive income (loss) as of December 31, ~~2022:~~2023:

The following is the accumulated balances of other comprehensive income (loss) as of December 31, ~~2021:~~2022:

The Company reports derivative instruments pursuant to the accounting policy discussed in Note 1 of the Notes to Consolidated Financial Statements.

The following table shows the fair value and notional amounts of derivative instruments.

The following table presents the gains (losses) on derivatives. There were no gains or losses reclassified from accumulated other comprehensive income into income or gains or losses recognized in income on derivatives ineffective portion or any amounts excluded from effective testing.

On December 21, 2021, the Company, through its wholly-owned subsidiary, Memorial Estates Inc., completed a business combination transaction with Rivera Funerals, Cremations and Memorial Gardens. The mortuaries and cemetery are located in New Mexico.

~~Under the terms of the transaction, as set forth in the Asset Purchase Agreement, dated December 21, 2021, Memorial Estates Inc. paid a net purchase price of $10,693,395~~ ~~for the business and assets of Rivera Funerals, Cremations and Memorial Gardens, subject to holdback amounts held by Memorial Estates, Inc. in the total amount of $1,120,000. Pursuant to the Asset Purchase Agreement, Memorial Estates, Inc. used $70,000~~ ~~of the holdback amount to pay trade accounts payable of Rivera Funerals, Cremations and Memorial Gardens to third parties that remained unpaid at the time of purchase. The remaining $1,050,000~~ ~~holdback amount is to be released and paid by Memorial Estates Inc. in annual payments of up to $105,000~~ ~~each, beginning in January 2023.~~

~~The estimated fair values of the assets acquired and liabilities assumed as of the date of acquisition were as follows:~~

~~Schedule of Estimated Fair Values of Assets Acquired and Liabilities Assumed~~

~~Rivera Funerals, Cremations and Memorial Gardens revenues and net earnings since the date of acquisition for the year ended December 31, 2021 were $137,386~~ ~~and $14,892, respectively.~~

~~On December 28, 2021, the Company, through its wholly-owned subsidiary, Memorial Mortuary Inc., completed a business combination transaction with Holbrook Mortuary located in Salt Lake City, Utah.~~

~~Under the terms of the transaction, as set forth in the Asset Purchase Agreement, dated December 28, 2021, Memorial Mortuary Inc. paid a net purchase price of $3,051,747~~ ~~for the business and assets of Holbrook Mortuary.~~

~~The estimated fair values of the assets acquired and liabilities assumed as of the date of acquisition were as follows:~~

~~Holbrook Mortuary’s revenues and net loss since the date of acquisition for the year ended December 31, 2021 were~~ ~~nil~~ ~~and $(98,531), respectively.~~

The Company reports MSRs pursuant to the accounting policy discussed in Note 1 of the Notes to Consolidated Financial Statements.

The ~~following~~ 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 ~~made by management~~ in its December 31, ~~2022~~2023 valuation of MSRs. The assumptions ~~underlying~~used in the following ~~estimate will~~table are likely to change as market conditions, ~~and~~ portfolio composition and borrower behavior change, causing both actual and projected amortization levels to change over time. ~~Therefore, the following estimates will change in a manner and amount not presently determinable by management.~~

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

The Company collected the following contractual servicing fee income and late fee income as reported in other revenues on the consolidated statements of earnings.

The following is a summary of the unpaid principal balances (“UPB”) of the servicing portfolio.

On October 31, 2022, the Company sold certain of its MSRs. The MSRs related to mortgage loans previously originated by the Company in aggregate unpaid principal amount of approximately $7.02 billion. As a result of the sale, the book value of the Company’s MSRs decreased $51,185,906 and generated a gain of $34,051,938 included in mortgage fee income on the consolidated statements of earnings. Substantially all of the consideration was received by the Company with the remainder subject to certain holdbacks during transfer of the MSRs. The Company completed the physical transfer of files prior to its ~~deadline and anticipates the release of the~~deadline. The holdbacks were received in ~~the first quarter of~~ 2023.

The Company reports future policy benefits and unpaid claims pursuant to the accounting policy discussed in Note 1 of the Notes to Consolidated Financial Statements.

The following table provides information regarding future policy benefits and unpaid claims and the related receivable from reinsurers.

The following table provides a ~~rollforward~~roll forward of the Company’s liability for reported but unpaid claims and incurred but not reported claims, net of the related receivable from reinsurers.

Summary of Liability for Reported but Unpaid Claims and Incurred but not Reported Claims

The Company reports revenues from contracts with customers pursuant to ASC No. 606, Revenue from Contracts with Customers.

The Company’s cemetery and mortuary segment sells a variety of goods and services to customers in both at-need and pre-need situations. Due to the timing of the fulfillment of the obligation, revenue is deferred until that obligation is fulfilled. The total contract liability for future obligations is included in deferred pre-need cemetery and mortuary contract revenues on the consolidated balance sheets and, as of December 31, ~~2022~~2023 and ~~2021,~~2022, the balances were $~~16,226,836~~18,237,246 and $~~14,508,022~~16,226,836, respectively.

Pre-need Merchandise and Service Revenue: All pre-need merchandise and service revenue is deferred, and the funds are placed in trust until the need arises, the merchandise is received or the service is performed. The trust is then relieved, and the revenue and commissions are recognized. As of December 31, ~~2022~~2023 and ~~2021,~~2022, the balances were $~~15,289,901~~17,424,764 and $~~13,722,348~~15,289,901, respectively.

At-need Specialty Merchandise Revenue: At-need specialty merchandise revenue consists of customizable merchandise ordered from a manufacturer such as markers and bases. When specialty merchandise is ordered, it can take time to manufacture and deliver the product. Revenue is deferred until the at-need merchandise is received. As of December 31, ~~2022~~2023 and ~~2021,~~2022, the balances were $~~936,935~~812,482 and $~~785,674~~936,935, respectively. Deferred revenue for at-need specialty revenue is not placed in trust.

Deferred Pre-need Land Revenue: Deferred pre-need revenue and corresponding commissions are deferred until 1010%% of the funds are received from the customer through regular monthly payments. As of December 31, ~~2022~~2023 and ~~2021,~~2022, the balances were nil and nil, respectively. Deferred pre-need land revenue is not placed in trust.

Complete payment of the contract does not constitute fulfillment of the performance obligation. Goods or services are deferred until such a time the service is performed or merchandise is received. Pre-need contracts are required to be paid in full prior to a customer using a good or service from a pre-need contract. Goods and services from pre-need contracts can be transferred when paid in full from one owner to another. In such cases, the Company will act as an agent in transferring the requested goods and services. A transfer of goods and services does not fulfill an obligation and revenue remains deferred.

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

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

~~The following table disaggregates the opening and closing balances of the Company’s contract balances.~~

The following table disaggregates the opening and closing balances of the Company’s contract balances.

The amount of revenue recognized for ~~the years ended December 31,~~2023 and 2022 ~~and 2021~~ that was included in the opening contract liability balance was $~~4,588,290~~4,539,540 and $~~4,528,646~~4,588,290, respectively.

The difference between the opening and closing balances of the Company’s contract assets and contract liabilities primarily results from the timing difference between the Company’s performance and the customer’s payment.

The following table disaggregates revenue for the Company’s cemetery and mortuary contracts.

The Company’s cemetery and mortuary segment recognizes revenue on future performance obligations when goods are delivered and when services are performed and is not determined by the terms or payments of the contract as long as any good or service is paid in full prior to delivery. Prices are determined based on the market at the time a contract is created. Goods or services are not partially completed. There are no significant judgements, estimations, or allocation methods for when revenue should be recognized.

The Company has not elected to use any of the practical expedients under ASC 606.

The Company’s cemetery and mortuary segment defers certain costs associated with obtaining a contract on future obligations.

Pre-need Merchandise and Service Revenue: Pre-need merchandise and service revenues are deferred until the goods or services are delivered. Recognition can be years until the obligations are satisfied. Commissions and other costs are capitalized and deferred until the obligation is satisfied. Other costs include rent on pre-need offices and training rooms, and call center costs. Costs that are allocated based on a percentage include family service advisor compensation, bonuses, utilities, and supplies that are all used to procure a pre-need sale.

At-need Specialty Merchandise Revenue: At-need specialty merchandise is ordered from a third-party manufacturer. Generally, at-need specialty merchandise is ordered and received within 90 days of order. These orders are also short-term in nature and are deferred until the product is received from the manufacturer and the obligation is satisfied.

Deferred Pre-need Land Revenue: Revenue is recognized on pre-need land sales when the customer has paid at least 10% toward the land price. In cases where customers pay less than 10% the revenue and associated commissions are deferred until such a time when 10% of the contract price is received.

The following table disaggregates contract costs that are included in the deferred policy and pre-need contract acquisition costs on the consolidated balances sheets.

Schedule of Reconciliation of Revenues from Cemetery and mortuary contracts to Business Segment Information

A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period ~~of time~~ in exchange for consideration. The Company determines if a contract is a lease at the inception of the contract. At the commencement date of a lease, the Company measures the lease liability at the present value of the lease payments over the lease term, discounted using the discount rate for the lease. The Company uses the rate implicit in the lease, if available, otherwise the Company uses its incremental borrowing rate. Also, at the commencement date of a lease, the Company measures the cost of the related right-of-use asset which consists of the amount of the initial measurement of the lease liability, any lease payments made to the lessor at or before the commencement date, minus any lease incentives received and any initial direct costs incurred by the Company.

The Company leases office space and equipment from ~~third-parties~~third parties under various non-cancelable agreements. The Company has operating leases for office space for its segments in areas where it conducts business. The Company subleases some of this office space. The Company also has finance leases for certain equipment, such as copy machines and postage machines. The Company does not have any lease agreements with variable lease payments. The Company has not included any options to extend or terminate leases in the recognition of the right-of-use assets or lease liabilities because of the uncertainty that they will be exercised. No residual value guarantees have been provided to the Company. The Company does not have any restrictions or covenants imposed by leases.

The Company does not have any leases that have not commenced that create significant rights or obligations for the Company.

The Company does not have any related party lease transactions that require disclosure as of December 31, ~~2022.~~2023.

The Company made an accounting policy election not to apply the recognition requirements of ASC 842 to short-term leases, which are leases that, at the commencement date, have a lease term of 12 months or less and do not include an option to purchase the underlying assets that the lessee is reasonably certain to exercise.

The Company does not use any significant judgments or assumptions regarding the determination of whether a contract contains a lease; the allocation of the consideration in a contract between lease and nonlease components; or the determination of the discount rates for the leases. The following table presents the Company’s total lease cost recognized in earnings, amounts capitalized as right-of-use assets and cash flows from lease transactions.

The following table presents the maturity analysis of the Company’s lease liabilities.

Schedule of Future Minimum Rental Payments for Finance Leases and Operating Leases

The following table presents the Company’s right-of-use assets and lease liabilities.

The Company is also a lessor and has operating lease agreements with various tenants that lease its commercial ~~and residential~~ properties. See Note 2 for information about the Company’s real estate held for investment.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, the Company has evaluated the effectiveness of its disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective.

(a) Management’s annual report on internal control over financial reporting.

Management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process that is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles (“GAAP”), and includes those policies and procedures that:

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

Management performed an assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, ~~2022~~2023 based on the framework in “Internal Control-Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission. The objective of this assessment was to determine whether the Company’s internal control over financial reporting was effective as of December 31, ~~2022.~~2023. Based on that assessment management believes that atas of December 31, ~~2022,~~2023, the Company’s internal control over financial reporting was effective.

This annual report on internal control over financial reporting does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.

There was no change in the Company’s internal control over financial reporting that occurred in the fourth quarter ~~2022~~2023 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

~~None~~A portion of the Company’s directors’ and officers’ compensation is in the form of equity awards and, from time to time, they may engage in open-market transactions with respect to their Company securities for diversification or other personal reasons. All such transactions in Company securities by directors and officers must comply with the Company’s Insider Trading Policy, which requires that transactions be in accordance with applicable U.S. federal securities laws that prohibit trading while in possession of material nonpublic information. Rule 10b5-1 under the Exchange Act provides an affirmative defense that enables directors and officers to prearrange transactions in the Company’s securities in a manner that avoids concerns about initiating transactions while in possession of material nonpublic information. During the three months ended December 31, 2023, no directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement”, as each term is defined in Item 408(a) of Regulation S-K.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

The information required by these items is incorporated by reference to the Company’s definitive proxy statement relating to its ~~2023~~2024 Annual Meeting of Shareholders. The Company currently anticipates that its definitive proxy statement will be filed with the SEC not later than 120 days after December 31, ~~2022,~~2023, pursuant to Regulation 14A of the Securities and Exchange Act of 1934, as amended.

All other schedules to the consolidated financial statements required by Article 7 of Regulation S-X are not required under the related instructions or are inapplicable and therefore have been omitted.

The following Exhibits are filed herewith pursuant to Rule 601 of Regulation S-K or are incorporated by reference to previous filings.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

433 West Ascension Way, Salt Lake City, Utah		84123
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code:		(801) 264-1060

Title of each class		Trading symbol		Name of exchange on which registered
Class A Common Stock		SNFCA		The Nasdaq Global Select Market

Large accelerated filer ☐		Accelerated filer ☐

Non-accelerated filer ☐		Smaller reporting company ☒

		Emerging growth company ☐

		Page
	Part I

Item 1.	Business	3
Item 1A.	Risk Factors	10
Item 1B.	Unresolved Staff Comments	1110
Item 2.	Properties	1112
Item 3.	Legal Proceedings	16
Item 4.	Mine Safety Disclosures	16

	Part II

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	16
Item 6.	[Reserved]	18
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 8.	Financial Statements and Supplementary Data	32
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	~~119~~125
Item 9A.	Controls and Procedures	~~119~~125
Item 9B.	Other Information	~~119~~125
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	~~119~~126

	Part III

Item 10.	Directors, Executive Officers, and Corporate Governance	~~120~~126
Item 11.	Executive Compensation	~~120~~126
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	~~120~~126
Item 13.	Certain Relationships and Related Transactions, and Director Independence	~~120~~126
Item 14.	Principal Accounting Fees and Services	~~120~~126

	Part IV

Item 15.	Exhibits, Financial Statement Schedules	~~120~~126
Item 16.	Form 10-K Summary	126
Signatures		~~120~~127
~~Signatures~~		~~121~~
Financial Statement Schedules		~~122~~128

	2022		2021		2020		2019 (1)		2018		2023		2022			2021			2020			2019
Life Insurance
Policy/Cert Count as of December 31		646,296		653,450		659,237		669,064		531,831		714,953		646,296			653,450			659,237			669,064
Insurance in force as of December 31 (in thousands)	$	2,865,957	$	2,863,759	$	2,890,791	$	2,877,402	$	1,838,488	$	3,552,554	$	3,446,836	(1)	$	3,415,368	(1)	$	3,379,921	(1)	$	3,303,061	(1)
Premiums Collected (in thousands)	$	103,304	$	99,006	$	92,058	$	78,253	$	74,965	$	113,584	$	103,304		$	99,006		$	92,058		$	78,253

Age Nearest Birthday		Non-Medical Limits
0-50
~~0-50~~	$100,000
51-up		Medical information
		required (APS or exam)

						Net Saleable Acreage									Net Saleable Acreage
Name of Cemetery	Location	Date Acquired		Developed Acreage (1)		Total Acreage (1)		Acres Sold as Cemetery Spaces (2)		Total Available Acreage (1)		Location	Date Acquired	Developed Acreage	Total Acreage	Acres Sold as Cemetery Spaces (1)	Total Available Acreage
Memorial Estates, Inc. Lakeview Cemetery	1640 East Lakeview Drive Bountiful, Utah		1973		9		39		8		31	1640 East Lakeview Drive Bountiful, Utah	1973	9	39	8	31

Memorial Estates, Inc. Mountain View Cemetery	3115 East 7800 South Salt Lake City, Utah		1973		26		54		20		34	3115 East 7800 South Salt Lake City, Utah	1973	26	54	20	34

Memorial Estates, Inc. Redwood Cemetery ~~(3)~~	6500 South Redwood Road West Jordan, Utah		1973		28		71		35		36	6500 South Redwood Road West Jordan, Utah	1973	40	71	35	36

Deseret Memorial Inc. Lake Hills Cemetery	10055 South State Street Sandy, Utah		1991		9		28		6		22	10055 South State Street Sandy, Utah	1991	9	28	6	22

Holladay Memorial Park, Inc. Holladay Memorial Park ~~(3)~~	4900 South Memory Lane Holladay, Utah		1991		12		14		7		7	4900 South Memory Lane Holladay, Utah	1991	12	14	8	6

California Memorial Estates, Inc. Singing Hills Memorial Park ~~(4)~~	2800 Dehesa Road El Cajon, California		1995		8		97		6		91	2800 Dehesa Road El Cajon, California	1995	8	97	6	91 (2)

SNR-SF Cemetery LLC Santa Fe Memorial Gardens ~~(5)~~	417 Rodeo Rd Santa Fe, New Mexico		2021		5		5		4		1	417 Rodeo Rd Santa Fe, New Mexico	2021	5 (3)	5	4	1

	(1)	The acreage represents estimates of acres that are based upon survey reports, title reports, appraisal reports, or the Company’s inspection of the cemeteries. The Company estimates that there are approximately 1,200 spaces per developed acre.
	~~(2)~~	Includes both reserved and occupied spaces.
	~~(3)~~	~~Includes two granite mausoleums.~~
	~~(4)~~(2)	Includes an open ~~easement.~~easement with a total acreage of approximately 62 acres.
	~~(5)~~(3)	Includes five main columbariums that can hold approximately 6,000 inurnments.

											Date		Viewing				Square
Name of Mortuary	Location	Date Acquired		Viewing Room(s)		Chapel(s)		Square Footage		Location	Acquired		Room(s)		Chapel(s)		Footage
Memorial Mortuary, Inc. Memorial Mortuary	5850 South 900 East, Murray, Utah		1973		3		1		20,000	5850 South 900 East, Murray, Utah		1973		3		1		20,000

Affordable Funerals and Cremations, St. George	157 East Riverside Dr., No. 3A, St. George, Utah		2016		1		1		2,360	157 East Riverside Dr., No. 3A, St. George, Utah		2016		1		1		2,360

Memorial Estates, Inc. Redwood Mortuary (1)	6500 South Redwood Rd., West Jordan, Utah		1973		2		1		10,000	6500 South Redwood Rd., West Jordan, Utah		1973		2		1		10,000

Memorial Estates, Inc. Mountain View Mortuary (1)	3115 East 7800 South, Salt Lake City, Utah		1973		2		1		16,000	3115 East 7800 South, Salt Lake City, Utah		1973		2		1		16,000

Memorial Estates, Inc. Lakeview Mortuary (1)	1640 East Lakeview Dr., Bountiful, Utah		1973		0		1		5,500	1640 East Lakeview Dr., Bountiful, Utah		1973		0		1		5,500

Deseret Memorial Inc. Lakehills Mortuary (1)	10055 South State St., Sandy, Utah		1991		2		1		18,000	10055 South State St., Sandy, Utah		1991		2		1		18,000

Cottonwood Mortuary, Inc. Cottonwood Mortuary	4670 South Highland Dr., Holladay, Utah		1991		2		1		14,500	4670 South Highland Dr., Holladay, Utah		1991		2		1		14,500

SN Probst LLC Heber Valley Funeral Home	288 North Main St., Heber City, Utah		2019		1		1		5,900	288 North Main St., Heber City, Utah		2019		1		1		5,900

SN Holbrook LLC Milcreek Funeral Home	3251 S 2300 E, Millcreek, Utah		2021		2		1		6,300	3251 S 2300 E, Millcreek, Utah		2021		2		1		6,300

SNR-SF Mortuary LLC Rivera Family Funeral Home Santa Fe (1)	417 Rodeo RD, Santa Fe, New Mexico		2021		2		1		7,700	417 Rodeo RD, Santa Fe, New Mexico		2021		2		1		7,700

SNR-Espanola LLC Rivera Family Funeral Home Española	305 Calle Salazar, Española, New Mexico		2021		1		2		10,400	305 Calle Salazar, Española, New Mexico		2021		1		2		10,400

SNR-Taos LLC Rivera Family Funeral Home Taos	818 Paseo Del Pueblo Sur, Taos, New Mexico		2021		0		1		9,600	818 Paseo Del Pueblo Sur, Taos, New Mexico		2021		0		1		9,600

	Price Range (1)				Price Range (1)
	High		Low		High		Low
Period (Calendar Year)
2021
First Quarter	$	9.56	$	7.69
Second Quarter	$	8.69	$	7.06
Third Quarter	$	8.86	$	7.68
Fourth Quarter	$	9.17	$	7.81

2022
First Quarter	$	9.86	$	8.53	$	9.39	$	8.13
Second Quarter	$	9.87	$	7.84	$	9.40	$	7.46
Third Quarter	$	8.61	$	6.23	$	8.20	$	5.93
Fourth Quarter	$	7.57	$	6.10	$	7.21	$	5.81

2023
First Quarter (through March 27, 2023)	$	7.55	$	6.00
First Quarter					$	7.19	$	5.71
Second Quarter					$	8.45	$	6.03
Third Quarter					$	8.83	$	7.58
Fourth Quarter					$	9.60	$	6.89

2024
First Quarter (through March 26, 2024)					$	9.04	$	7.62

Period	(a) Total Number of Class A Shares Purchased		(b) Average Price Paid per Class A Share (1)		(c) Total Number of Class A Shares Purchased as Part of Publicly Announced Plan or Program		(d) Maximum Number of Class A Shares that May Yet Be Purchased Under the Plan or Program (2)
10/1/2022-10/31/2022		9,829	$	6.32		-		433,349
11/1/2022-11/30/2022		10,920	$	6.54		-		422,429
12/1/2022-12/31/2022		39,222	$	6.47		-		383,207

Total		59,971	$	6.45		-		383,207

	(1)	Includes fees and commissions paid on stock repurchases.
	(2)	In September 2018, the Board of Directors of the Company approved a Stock Repurchase Plan that authorized the repurchase of 300,000 shares of the Company’s Class A Common Stock in the open market. The Company amended the Stock Repurchase Plan on December 4, 2020. The amendment authorized the repurchase of a total of 1,000,000 shares of the Company’s Class A Common Stock in the open market. Any repurchased shares of Class A common stock are to be held as treasury shares to be used as the Company’s employer matching contribution to the Employee 401(k) Retirement Savings Plan and for shares held in the Deferred Compensation Plan.

	12/31/18		12/31/19		12/31/20		12/31/21		12/31/22
SNFC		100		119		183		212		176
S & P 500		100		129		149		190		153
S & P Insurance		100		87		110		137		148

	Years ended December 31 (in thousands of dollars)									Years ended December 31 (in thousands of dollars)
	2022			2021			2022 vs 2021 % Increase (Decrease)			2023		2022			2023 vs 2022 % Increase (Decrease)
Revenues from external customers:
Insurance premiums	$	105,002		$	100,255			5	%	$	114,658	$	105,002			9	%
Net investment income		62,565			56,092			12	%		67,812		62,565			8	%
Mortgage fee income											77		143			(46	%)
Gains (losses) on investments and other assets		(459	)		4,555			(110	%)		963		(459	)		310	%
Other than temporary impairments		-			(40	)		100	%
Other		2,075			2,152			(4	%)		1,666		1,932			(14	%)
Total	$	169,183		$	163,014			4	%	$	185,176	$	169,183			9	%
Intersegment revenue	$	6,601		$	7,570			(13	%)	$	8,203	$	6,601			24	%
Earnings before income taxes	$	14,196		$	14,973			(5	%)	$	25,272	$	14,196			78	%

	●	Failure to deliver original documents specified by the investor,
	●	The existence of misrepresentation or fraud in the origination of the loan,
	●	The loan becomes delinquent due to nonpayment during the first several months after it is sold,
	●	Early pay-off of a loan, as defined by the agreements,
	●	Excessive time to settle a loan,
	●	Investor declines purchase, and
	●	Discontinued product and expired commitment.

	●	Research reasons for rejection,
	●	Provide additional documents,
	●	Request investor exceptions,
	●	Appeal rejection decision to purchase committee, and
	●	Commit to secondary investors.

	●	For loans that are committed, the Company uses the commitment price.
	●	For loans that are non-committed that have an active market, the Company uses the market price.
	●	For loans that are non-committed where there is no market but there is a similar product, the Company uses the market value for the similar product.
	●	For loans that are non-committed where no active market exists, the Company determines that the unpaid principal balance best approximates the market value, after considering the fair value of the underlying real estate collateral, estimated future cash flows, and loan interest rate.

		-200 bps				-100 bps				+100 bps				+200 bps
Change in Fair Value (in thousands)		$	60,877			$	29,720			$	(32,592	)		$	(63,748	)

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
	Page No.
Financial Statements:
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34)	33
Consolidated Balance Sheets, December 31, ~~2022~~2023 and ~~2021~~2022	35
Consolidated Statements of Earnings for the Years Ended December 31, ~~2022~~2023 and ~~2021~~2022	37
Consolidated Statements of Comprehensive Income for the Years Ended December 31, ~~2022~~2023 and ~~2021~~2022	38
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, ~~2022~~2023 and ~~2021~~2022	39
Consolidated Statements of Cash Flows for the Years Ended December 31, ~~2022~~2023 and ~~2021~~2022	40
Notes to Consolidated Financial Statements	42

		●	evaluated ~~management’s selected~~these actuarial assumptions, including testing the accuracy and completeness of the supporting experience studies,

		●	evaluated management’s judgments regarding ~~the~~these assumptions used in the development of future policy benefits for life insurance contracts and the amortization of deferred policy acquisition costs and value of business acquired,

		●	evaluated the results of the Company’s annual premium deficiency tests.

	Class A Common Stock		Class C Common Stock			Additional Paid-in Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Treasury Stock			Total
Balance at December 31, 2021	$	35,285,444	$	5,733,130		$	57,985,947		$	18,070,448		$	184,537,489		$	(1,845,624	)	$	299,766,834

Net earnings		-		-			-			-			25,690,302			-			25,690,302
Other comprehensive loss		-		-			-			(31,140,725	)		-			-			(31,140,725	)
Stock based compensation expense		-		-			929,692			-			-			-			929,692
Exercise of stock options		219,174		-			(75,742	)		-			-			-			143,432
Sale of treasury stock		-		-			(187,757	)		-			-			5,249,054			5,061,297
Purchase of treasury stock		-		-			106,176			-			-			(7,770,081	)		(7,663,905	)
Stock dividends		1,779,108		278,924			6,009,453			-			(8,067,485	)		-			-
Conversion Class C to Class A		232,336		(232,336	)		-			-			-			-			-
Balance at December 31, 2022		37,516,062		5,779,718			64,767,769			(13,070,277	)		202,160,306			(4,366,651	)		292,786,927
Balance, value		37,516,062		5,779,718			64,767,769			(13,070,277	)		202,160,306			(4,366,651	)		292,786,927

Adoption of ASU 2016-13		-		-			-			-			(671,506	)		-			(671,506	)
Net earnings		-		-			-			-			14,495,058			-			14,495,058
Other comprehensive income		-		-			-			6,184,719			-			-			6,184,719
Stock based compensation expense		-		-			601,362			-			-			-			601,362
Exercise of stock options		558,354		-			(423,967	)		-			-			-			134,387
Vesting of restricted stock units		2,430		-			(2,430	)		-			-			-			-
Sale of treasury stock		-		-			76,202			-			-			2,134,517			2,210,719
Purchase of treasury stock		-		-			583,156			-			-			(3,429,603	)		(2,846,447	)
Stock dividends		1,899,960		283,188			6,822,337			-			(9,005,485	)		-			-
Conversion Class C to Class A		119,198		(119,198	)		-			-			-			-			-
Balance at December 31, 2023	$	40,096,004	$	5,943,708		$	72,424,429		$	(6,885,558	)	$	206,978,373		$	(5,661,737	)	$	312,895,219
Balance, value	$	40,096,004	$	5,943,708		$	72,424,429		$	(6,885,558	)	$	206,978,373		$	(5,661,737	)	$	312,895,219


	Years Ended December 31
	2022			2021
Cash flows from operating activities:
Net earnings	$	25,690,302		$	39,518,990
Adjustments to reconcile net earnings to net cash used in operating activities:
Losses (gains) on investments and other assets		857,460			(6,265,134	)
Other than temporary impairments on investments		-			39,502
Depreciation		8,598,072			5,540,672
Provision for loan losses and doubtful accounts		1,331,887			965,736
Net amortization of deferred fees and costs, premiums and discounts		(1,018,200	)		(1,154,604	)
Provision for deferred income taxes		(9,954,005	)		11,308,436
Policy and pre-need acquisition costs deferred		(20,233,669	)		(19,985,257	)
Policy and pre-need acquisition costs amortized		16,685,871			15,027,841
Value of business acquired amortized		1,264,331			1,115,129
Mortgage servicing rights, additions		(10,243,922	)		(32,701,819	)
Amortization of mortgage servicing rights		9,078,706			14,851,880
Net gains on the sale of mortgage servicing rights		(34,051,938	)		-
Stock based compensation expense		929,692			118,384
Benefit plans funded with treasury stock		5,061,297			6,007,402
Net change in fair value of loans held for sale		8,834,797			8,783,376
Originations of loans held for sale		(3,373,554,484	)		(5,611,189,587	)
Proceeds from sales of loans held for sale		3,549,405,402			5,900,076,766
Net gains on sales of loans held for sale		(74,779,721	)		(177,876,915	)
Change in assets and liabilities:
Land and improvements held for sale		(123,597	)		441,839
Future policy benefits and unpaid claims		27,487,657			22,104,116
Other operating assets and liabilities		(815,484	)		(32,088,511	)
Net cash provided by operating activities		130,450,454			144,638,242
Cash flows from investing activities:
Purchases of fixed maturity securities		(151,581,252	)		(18,857,131	)
Sales, calls and maturities of fixed maturity securities		25,163,141			48,015,753
Purchase of equity securities		(4,193,460	)		(1,950,554	)
Sales of equity securities		2,804,274			3,868,061
Net changes in restricted assets		(862,654	)		473,156
Net changes in cemetery perpetual care trust investments		1,205,208			(143,379	)
Mortgage loans held for investment, other investments and policy loans made		(752,301,471	)		(838,524,150	)
Payments received for mortgage loans held for investment, other investments and policy loans		759,243,828			818,108,666
Proceeds from the sale of mortage servicing rights		79,981,150			-
Purchases of property and equipment		(1,600,195	)		(5,219,928	)
Sales of property and equipment		69,248			-
Purchases of real estate		(20,458,983	)		(92,403,534	)
Sales of real estate		25,369,430			35,644,576
Cash paid for purchase of subsidiaries, net of cash acquired		-			(12,625,142	)
Net cash used in investing activities		(37,161,736	)		(63,613,606	)

	Amount			Amount
Mortgage loans held for investment:
Residential	$	(192,607	)	$	(192,607	)
Residential construction		301,830			301,830
Commercial		555,806			555,807
Total		665,029			665,030

Restriced assets - mortgage loans held for investment:
Restricted assets - mortgage loans held for investment:
Residential construction		3,463			3,463

Cemetery perpetual care trust investments - mortgage loans held for investment:
Residential construction		3,013			3,013

Grand Total		671,505			671,506

	Amortized Cost			Gross Unrealized Gains		Gross Unrealized Losses (1)			Allowance for Credit Losses			Estimated Fair Value
December 31, 2023:
Fixed maturity securities, available for sale, at estimated fair value:
U.S. Treasury securities and obligations of U.S. Government agencies	$	111,450,753		$	344,425	$	(1,416,448	)	$	-		$	110,378,730

Obligations of states and political subdivisions		6,524,083			500		(319,260	)		-			6,205,323

Corporate securities including public utilities		232,299,727			3,688,642		(7,145,507	)		(308,500	)		228,534,362

Mortgage-backed securities		40,359,878			506,647		(4,702,905	)		(6,049	)		36,157,571

Redeemable preferred stock		250,000			10,000		-			-			260,000

Total fixed maturity securities available for sale	$	390,884,441		$	4,550,214	$	(13,584,120	)	$	(314,549	)	$	381,535,986

Equity securities at estimated fair value:

Common stock:

Industrial, miscellaneous and all other	$	10,571,505		$	3,504,141	$	(439,575	)				$	13,636,071

Total equity securities at estimated fair value	$	10,571,505		$	3,504,141	$	(439,575	)				$	13,636,071

Mortgage loans held for investment at amortized cost:
Residential	$	103,153,587
Residential construction		104,052,748
Commercial		74,176,538
Less: Unamortized deferred loan fees, net		(1,623,226	)
Less: Allowance for credit losses		(3,818,653	)
Less: Net discounts		(324,157	)

Total mortgage loans held for investment	$	275,616,837

Real estate held for investment - net of accumulated depreciation:
Residential	$	40,924,865
Commercial		142,494,427

Total real estate held for investment	$	183,419,292

Real estate held for sale:
Residential	$	-
Commercial		3,028,973

Total real estate held for sale	$	3,028,973

Other investments and policy loans at amortized cost:
Policy loans	$	13,264,183
Insurance assignments		45,605,322
Federal Home Loan Bank stock (2)		2,279,800
Other investments		9,809,148
Less: Allowance for credit losses		(1,553,836	)

Total policy loans and other investments	$	69,404,617

Accrued investment income	$	10,170,790

Total investments	$	936,812,566

	Amortized Cost			Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
December 31, 2022:
Fixed maturity securities, available for sale, at estimated fair value:
U.S. Treasury securities and obligations of U.S. Government agencies	$	93,182,210		$	180,643	$	(2,685,277	)	$	90,677,576

Obligations of states and political subdivisions		6,675,071			13,869		(458,137	)		6,230,803

Corporate securities including public utilities		229,141,544			1,909,630		(11,930,773	)		219,120,401

Mortgage-backed securities		33,501,686			168,700		(4,100,674	)		29,569,712

Redeemable preferred stock		250,000			10,000		-			260,000

Total fixed maturity securities available for sale	$	362,750,511		$	2,282,842	$	(19,174,861	)	$	345,858,492

Equity securities at estimated fair value:

Common stock:

Industrial, miscellaneous and all other	$	9,942,265		$	2,688,375	$	(948,114	)	$	11,682,526

Total equity securities at estimated fair value	$	9,942,265		$	2,688,375	$	(948,114	)	$	11,682,526

Mortgage loans held for investment at amortized cost:
Residential	$	93,355,623
Residential construction		172,516,125
Commercial		46,311,955
Less: Unamortized deferred loan fees, net		(1,746,605	)
Less: Allowance for loan losses		(1,970,311	)
Less: Net discounts		(342,860	)

Total mortgage loans held for investment	$	308,123,927

Real estate held for investment - net of accumulated depreciation:
Residential	$	38,437,960
Commercial		152,890,656

Total real estate held for investment	$	191,328,616

Real estate held for sale:
Residential	$	11,010,029
Commercial		151,553

Total real estate held for sale	$	11,161,582

Other investments and policy loans at amortized cost:
Policy loans	$	13,095,473
Insurance assignments		46,942,536
Federal Home Loan Bank stock (1)		2,600,300
Other investments		9,479,798
Less: Allowance for doubtful accounts		(1,609,951	)

Total policy loans and other investments	$	70,508,156

Accrued investment income	$	10,299,826

Total investments	$	948,963,125

													Unrealized Losses for Less than Twelve Months		Fair Value		Unrealized Losses for More than Twelve Months		Fair Value		Total Unrealized Loss		Fair Value
At December 31, 2023
U.S. Treasury securities and obligations of U.S. Government agencies													$	29,394	$	9,436,090	$	1,387,054	$	70,885,403	$	1,416,448	$	80,321,493
Obligations of states and political subdivisions														11,105		470,325		308,155		5,284,498		319,260		5,754,823
Corporate securities including public utilities														529,660		32,507,773		6,615,847		107,556,216		7,145,507		140,063,989
Mortgage and other asset-backed securities														29,799		2,260,445		4,673,106		22,184,174		4,702,905		24,444,619
Total unrealized losses													$	599,958	$	44,674,633	$	12,984,162	$	205,910,291	$	13,584,120	$	250,584,924
	Unrealized Losses for Less than Twelve Months		Fair Value		Unrealized Losses for More than Twelve Months		Fair Value		Total Unrealized Loss		Fair Value
At December 31, 2022
U.S. Treasury securities and obligations of U.S. Government agencies	$	2,685,277	$	79,400,753	$	-	$	-	$	2,685,277	$	79,400,753	$	2,685,277	$	79,400,753	$	-	$	-	$	2,685,277	$	79,400,753
Obligations of States and Political Subdivisions		378,067		5,467,910		80,070		429,020		458,137		5,896,930
Corporate Securities		10,935,114		162,995,969		995,659		5,781,822		11,930,773		168,777,791
Obligations of states and political subdivisions														378,067		5,467,910		80,070		429,020		458,137		5,896,930
Corporate securities including public utilities														10,935,114		162,995,969		995,659		5,781,822		11,930,773		168,777,791
Mortgage and other asset-backed securities		2,884,731		19,909,907		1,215,943		6,978,745		4,100,674		26,888,652		2,884,731		19,909,907		1,215,943		6,978,745		4,100,674		26,888,652
Total unrealized losses	$	16,883,189	$	267,774,539	$	2,291,672	$	13,189,587	$	19,174,861	$	280,964,126	$	16,883,189	$	267,774,539	$	2,291,672	$	13,189,587	$	19,174,861	$	280,964,126

At December 31, 2021
Obligations of States and Political Subdivisions	$	1,989	$	548,715	$	-	$	-	$	1,989	$	548,715
Corporate Securities		73,507		4,638,750		280,161		3,771,813		353,668		8,410,563
Mortgage and other asset-backed securities		72,952		7,934,760		88,380		1,582,804		161,332		9,517,564
Total unrealized losses	$	148,448	$	13,122,225	$	368,541	$	5,354,617	$	516,989	$	18,476,842

	December 31, 2023				December 31, 2022
NAIC Designation	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
1	$	221,933,425	$	216,975,288	$	197,753,818	$	189,691,540
2		161,062,016		157,346,803		156,261,804		148,073,873
3		6,418,829		5,953,542		7,080,305		6,635,786
4		982,290		948,478		1,377,541		1,157,454
5		236,648		51,875		25,736		39,155
6		1,233		-		1,307		684
Total	$	390,634,441	$	381,275,986	$	362,500,511	$	345,598,492


	Year Ended December 31, 2023
	U.S. Treasury Securities And Obligations of U.S. Government Agencies		Obligations of states and political subdivisions		Corporate securities including public utilities			Mortgage-backed securities		Total

Beginning balance - December 31, 2022	$	-	$	-	$	-		$	-	$	-

Additions for credit losses not previously recorded		-		-		261,500			6,049		267,549
Change in allowance on securities with previous allowance		-		-		57,764			-		57,764
Reductions for securities sold during the period		-		-		(10,764	)		-		(10,764	)
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 - December 31, 2023	$	-	$	-	$	308,500		$	6,049	$	314,549

					Amortized		Estimated Fair
	Amortized Cost		Estimated Fair Value		Cost		Value
Due in 1 year	$	-	$	-	$	-	$	-
Due in 2-5 years		139,431,212		135,093,083		168,831,608		166,186,132
Due in 5-10 years		87,552,213		84,011,366		95,804,878		95,031,727
Due in more than 10 years		102,015,400		96,924,331		85,638,077		83,900,556
Mortgage-backed securities		33,501,686		29,569,712		40,359,878		36,157,571
Redeemable preferred stock		250,000		260,000		250,000		260,000
Total	$	362,750,511	$	345,858,492	$	390,884,441	$	381,535,986


2024	$	11,816,339
2025		11,843,124
2026		10,695,017
2027		9,198,450
2028		9,009,534
Thereafter		46,371,762
Total	$	98,934,226

	Net Ending Balance				Total Square Footage
	December 31				December 31
	2022		2021		2022		2021
Utah (1)	$	147,627,946	$	150,105,948		625,920		625,920
Louisiana		2,380,847		2,426,612		31,778		31,778
Mississippi		2,881,863		2,860,775		19,694		19,694

	$	152,890,656	$	155,393,335		677,392		677,392


2023	$	11,650,181
2024		10,310,144	$	11,816,339
2025		9,933,831		11,843,124
2026		8,282,769		10,695,017
2027		6,720,796		9,198,450
2028				9,009,534
Thereafter		50,530,849		46,371,762
Total	$	97,428,570	$	98,934,226

	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
December 31, 2022
With no related allowance recorded:
Commercial	$	405,000	$	405,000	$	-	$	762,175	$	-
Residential		1,142,494		1,142,494		-		998,798		-
Residential construction		-		-		-		103,976		-

With an allowance recorded:
Commercial	$	-	$	-	$	-	$	-	$	-
Residential		1,019,891		1,019,891		225,667		683,922		-
Residential construction		-		-		-		-		-

Total:
Commercial	$	405,000	$	405,000	$	-	$	762,175	$	-
Residential		2,162,385		2,162,385		225,667		1,682,720		-
Residential construction		-		-		-		103,976		-

December 31, 2021
With no related allowance recorded:
Commercial	$	1,723,372	$	1,723,372	$	-	$	1,053,865	$	-
Residential		1,591,368		1,591,368		-		2,731,421		-
Residential construction		-		-		-		100,481		-

With an allowance recorded:
Commercial	$	-	$	-	$	-	$	-	$	-
Residential		957,288		957,288		105,384		726,449		-
Residential construction		-		-		-		-		-

Total:
Commercial	$	1,723,372	$	1,723,372	$	-	$	1,053,865	$	-
Residential		2,548,656		2,548,656		105,384		3,457,870		-
Residential construction		-		-		-		100,481		-

	Allowance
Beginning balance - January 1, 2023	$	2,229,791
Change in provision for credit losses (1)		(110,935	)
Charge-offs		(220,969	)
Ending balance - December 31, 2023	$	1,897,887

Beginning balance - January 1, 2022	$	1,800,725
Change in provision for credit losses (1)		799,888
Charge-offs		(370,822	)
Ending balance - December 31, 2022	$	2,229,791


2023	$	1,181,000
2024		1,098,000
2025		995,000
2026		924,000
2027		841,000
Thereafter		4,764,736
Total	$	9,803,736