Q2 2025 Security National Financial Corp Earnings Call

Speaker 2: You have joined the meeting as an attendee and will be muted throughout the meeting.

Speaker #2: For the 2025 earnings call, we thank you for joining us today to review our financial and operational results for the period ending June 30, 2025.

Heather Street: Your 2025 earnings call. We thank you for joining us today to review our financial and operational results for the period ended 30 June 2025. Before we begin, I'd like to remind everyone that our remarks today will include forward-looking statements. These statements are based on current expectations and assumptions that are subject to risks and uncertainties, which may cause actual results to differ materially from those projected. Such risks include, but are not limited to, changes in economic conditions, interest rates, regulatory developments, competitive pressures, and other factors detailed in our filings with the Securities and Exchange Commission. We caution you not to place undue reliance on these forward-looking statements, which speak only as of today's date. We undertake no obligation to publicly update or revise these statements to reflect future events or circumstances, except as required by law.

Heather Street: 2025 earnings call. We thank you for joining us today to review our financial and operational results for the period ended June 30th, 2025. Before we begin, I'd like to remind everyone that our remarks today will include forward-looking statements. These statements are based on current expectations and assumptions that are structured into risks and uncertainties which may cause actual results to differ materially from those projected. Such risks include, but are not limited to, changes in economic conditions, interest rates, regulatory developments, competitive pressures, and other factors detailed in our filings of the Securities and Exchange Commission. We caution you not to place undue reliance on these forward-looking statements, which is only as of today's date. We undertake no obligation to publicly update or resign these statements to reflect future events or circumstances extended as required by law.

Speaker #2: Before we begin, I'd like to remind everyone that our remarks today will include forward-looking statements. These statements are based on current expectations and assumptions that are subject to risks and uncertainties, which may cause actual results to differ materially from those projected.

Speaker #2: Such risks include, but are not limited to, changes in economic conditions, interest rates, regulatory developments, competitive pressures, and other factors detailed in our filings with the Securities and Exchange Commission.

Speaker #2: We caution you not to place undue reliance on these forward-looking statements. Would you speak only on today's date? We undertake no obligation to publicly update or revise these statements to reflect future events or circumstances, except as required by law.

Speaker #2: Our second quarter press release, issued August 14, 2025, is posted on our company's website. Please refer to our second quarter press release or SNSP. CEO Scott Quist comments.

Heather Street: Our second quarter press release issued August 14th, 2025, is posted on our company's website. Please refer to our second quarter press release for Security National Financial Corporation CEO Scott Quist's comments. With that, I'd like to turn the call over to our Chief Financial Officer, Garrett Sill. Garrett.

Heather Street: Our Q2 press release, issued 14 August 2025, is posted on our company's website. Please refer to our Q2 press release for SNFC CEO Scott Quist's comments. With that, I'd like to turn the call over to our Chief Financial Officer, Garrett Sill. Garrett?

Speaker #2: With that, I'd like to turn the call over to our Chief Financial Officer, Derek Still. Derek?

Speaker #3: Thank you, Heather. I want to start by thanking those who are on this call. This is our second executive earnings call, and we are still working out some of the formalities.

Garrett Sill: Thank you, Heather Street. I want to start by thanking those who are on this call. This is our second consecutive earnings call, and we are still working out some of the formalities. Thank you again for joining us and thank you for your patience as we continue to improve these shareholders events. Our press release was a little more comprehensive this quarter, I just want to hit a couple of highlights. Reviewing our balance sheet, our cash decreased $60 million as we increased investments in bonds by $25 million, real estate activities by $28 million, and mortgage loans by $23 million. These increases in investments were offset by Federal Home Loan Bank advances and outside warehouse line utilization of about $16 million, which is seen in the increase in bank loans on the liabilities section of our balance sheet.

Garrett Sill: Thank you, Heather. I want to start by thanking those who are on this call. This is our second executive earnings call, and we are still working out some of the formalities. Thank you again for joining us, and thank you for your patience as we continue to improve these shareholders' events. Our press release was a little more comprehensive this quarter, so I just want to hit a couple of highlights. Reviewing our balance sheet, our cash decreased $60 million as we increased investments in bonds by $25 million, real estate activity by $28 million, and mortgage loans by $23 million. These increases in investments were offset by Federal Home Loan Bank advances and outside warehouse line utilization of about $16 million, which is seen in the increase in bank loans on the liability section of our balance sheet.

Speaker #3: So thank you again for joining us, and thank you for your patience as we continue to improve these shareholders' events. Our press release was a little more comprehensive this quarter, so I just want to hit a couple of highlights.

Speaker #3: Reviewing our balance sheet, our cash decreased by $60 million, while we increased investments in bonds by $25 million, real estate activities by $28 million, and mortgage loans by $23 million.

Speaker #3: These increases in investments were offset by better home loan bank advances and outside warehouse line utilization of about $16 million, which is reflected in the increase in bank loans.

Speaker #3: On the liabilities section of our balance sheet, stockholders' equity improved quarter over quarter due to both good earnings and an improvement in the fair value of our bond portfolio.

Garrett Sill: Stockholders equity improved quarter-over-quarter due to both good earnings and an improvement in the fair value of our bond portfolio. Moving to the income statement, Q2 revenues increased over Q1, which resulted in Q2 net earnings also improving over Q1 net earnings. Expenses remained elevated in strategic areas, as explained in the Q2 press release. Despite these increases, Q2 and year-to-date net earnings were good. A lot has happened since our last call. On 27 June, Security National Financial was added to the Russell 2000, then on 30 June, Security National Financial crossed the threshold for accelerated filing status. Although we remain a small reporting company, accelerated filing will have a significant impact on our financial audits and our SEC reporting requirements. Finally, the company distributed a 5% stock dividend on 18 July.

Garrett Sill: Stockholders' equity improved quarter over quarter due to both good earnings and an improvement in the fair value of our bond portfolio. Moving to the income statement, Q2 revenues increased over Q1, which resulted in Q2 net earnings also improving over Q1 net earnings. Expenses remained elevated in strategic areas, as explained in the Q2 press release. Despite these increases, Q2 and year-to-date net earnings were good. A lot has happened since our last call. On June 27, Security National Financial Corporation was added to the Russell 2000, and on June 30, Security National Financial Corporation crossed the threshold for accelerated filing status. Although we remain a small reporting company, accelerated filing will have a significant impact on our financial audits and our SEC reporting requirements. Finally, the company distributed a 5% stock dividend on July 18. Accelerated filing status brings with it some significant changes to the company.

Speaker #3: Moving to the income statement, Q2 revenues increased over Q1, which resulted in Q2 net earnings also improving over Q1 net earnings. Expenses remained elevated in strategic areas, as explained in the Q2 press release.

Speaker #3: Despite these increases, Q2 and year-to-date net earnings were good. A lot has happened since our last call on June 27th. Security National Financial was added to the Russell 2000, and then on June 30th, Security National Financial crossed the threshold for accelerated filing status.

Speaker #3: Although we remain a small reporting company, accelerated filing will have a significant impact on our financial audits and our SEC reporting requirements. Finally, the company distributed a 5% stock dividend on July 18.

Speaker #3: Accelerated filing status brings with it some significant changes to the company. First of all, financial reports filed after December 31, 2025, will need to be filed sooner.

Garrett Sill: Accelerated filing status brings with it some significant changes to the company. First of all, financial reports filed after 31 December 2025 will need to be filed sooner. Basically, our Form 10-K will now be filed 75 days after year-end, and all Forms 10-Q will be filed 40 days following a quarter end. Secondly, and probably more importantly, our year-end audit will also include an audit and an opinion by Deloitte on the company's internal controls. The audit of our internal controls will come with a significant increase in audit fees and other implementation expenses. To be a little more precise, the company has good internal controls. However, accelerated filers are required to document their controls in a specific manner, and those controls must be tested both internally and externally. We have a good framework in place. We are working towards compliance by year-end.

Garrett Sill: First of all, financial reports filed after December 31, 2025, will need to be filed sooner. Basically, our Form 10-K will now be filed 75 days after year-end, and all Forms 10-Q will be filed 40 days following a quarter-end. Secondly, and probably more importantly, our year-end audit will also include an audit and an opinion by Deloitte on the company's internal controls. The audit of our internal controls will come with a significant increase in audit fees and other implementation expenses. To be a little more precise, the company has good internal controls. However, accelerated filers are required to document their controls in a specific manner, and those controls must be tested both internally and externally. We have a good framework in place. We are working towards compliance by year-end.

Speaker #3: Basically, our Form 10-K will now be filed 75 days after year-end, and all Forms 2 and all Forms 10-Q will be filed 40 days following a quarter end.

Speaker #3: Secondly, and probably more importantly, our year-end audit will also include an audit and an opinion by Deloitte on the company's fair internal controls. The audit of our internal controls will come with a significant increase in audit fees and other implementation expenses.

Speaker #3: To be a little more precise, the company has good internal controls; however, accelerated filers are required to document their controls in a specific manner, and those controls must be tested both internally and externally.

Speaker #3: We have a good framework in place; we are working towards compliance by year-end. Finally, our progress with our adoption of ASU 2018-12, better known as Targeted Improvements to the Accounting for Long-Duration Contracts, or LPTI, is still on track to be implemented for year-end reporting.

Garrett Sill: Finally, our progress with our adoption of ASU 2018-12, better known as Targeted Improvements to the Accounting for Long-Duration Contracts, or LDTI, is still on track to be implemented for year-end reporting. Our Q3 Form 10-Q will disclose a range of impact when adopted at year-end. In closing, Q2 and year-to-date net earnings were good for the company. We are financially healthy as our balance sheet remains strong with minimal debt and well-balanced investments that are poised for great future returns. We will have some significant accounting headwinds moving forward as we adapt to the required changes, but we are confident that we will meet the challenge. Next, we will hear from Andrew Quist, President and Chief Executive Officer of Security National Mortgage Company. Andrew.

Garrett Sill: Finally, our progress with our adoption of ASU 2018-12, better known as Targeted Improvements to the Accounting for Long-Duration Contracts, or LDTI, is still on track to be implemented for year-end reporting. Our Q3 Form 10-Q will disclose a range of impact when adopted at year-end. In closing, Q2 and year-to-date net earnings were good for the company. We are financially healthy as our balance sheet remains strong with minimal debt and well-balanced investments that are poised for great future returns. We will have some significant accounting headwinds moving forward as we adapt to the required changes, but we are confident that we will meet the challenge. Next, we will hear from Andrew Quist, President Chief Executive Officer of SecurityNational Mortgage. Andrew.

Speaker #3: Our Q3 Form 10-Q will disclose a range of impacts when adopted at year-end. In closing, Q2 and year-to-date net earnings were good for the company.

Speaker #3: We are financially healthy, as our balance sheet remains strong, with minimal debt and well-balanced investments that are poised for great future returns. We will have some significant accounting headwinds moving forward as we adapt to the required changes, but we are confident that we will meet the challenge.

Speaker #3: Next, we will hear from Andrew Quist, President and Chief Executive Officer of Security National Financial. Andrew?

Speaker #4: Good afternoon, fellow shareholders. As Derek mentioned, I'm Andrew Quist, President and CEO of Security National Mortgage Company. In the second quarter of 2025, Security National Mortgage Company had a net loss of $1,670,000.

Andrew Quist: Good afternoon, fellow shareholders. As Garrett mentioned, I'm Andrew Quist, President and CEO of Security National Mortgage Company. In the second quarter of 2025, Security National Mortgage Company had a net loss of $1,670,000 compared to a gain of $134,000 in the second quarter of 2024, a decrease of $1.8 million. This is a disappointing result and one we are working urgently to fix. The number one contributor to the worsening performance was a decrease in our origination volume. In the second quarter of 2025, we originated $617 million of loan volume compared to $624 million in the second quarter of 2024, or a 1.2% year-over-year decrease. This was our first year-over-year quarterly decrease since the first quarter of 2024. Mortgage market conditions in the United States worsened in the second quarter, with Q2 pending home sales at their lowest level since 2012 at 1.4 million contracts signed.

Andrew Quist: Good afternoon, fellow shareholders. As Garrett mentioned, I'm Andrew Quist, President and CEO of SecurityNational Mortgage Company. In Q2 2025, SecurityNational Mortgage Company had a net loss of $1,670,000 compared to a gain of $134,000 in Q2 2024. A decrease of $1.8 million. This is a disappointing result and one we are working urgently to fix. The number 1 contributor to the worsening performance was a decrease in our origination volume. In Q2 2025, we originated $617 million of loan volume, compared to $624 million in Q2 2024, or a 1.2% year-over-year decrease. This was our first year-over-year quarterly decrease since Q1 2024.

Speaker #4: Compared to a gain of $134,000 in the second quarter of 2024, we are facing a decrease of $1.8 million. This is a disappointing result, and one we are working urgently to fix.

Speaker #4: The number one contributor to the worsening performance was a decrease in our origination volume. In the second quarter of 2025, we originated $677,000,000 of loan volume.

Speaker #4: Compared to $624,000,000 in the second quarter of 2024, we're experiencing a 1.2% year-over-year decrease. This marks our first year-over-year quarterly decrease since the first quarter of 2024.

Speaker #4: Mortgage market conditions in the United States worsened in the second quarter, with Q2 pending home sales at their lowest level since 2012, at 1.4 million contracts signed.

Andrew Quist: Mortgage market conditions in the United States worsened in Q2, with Q2 pending home sales at their lowest level since 2012, at 1.4 million contracts signed. This had a significant impact on our results as we are a purchase money-focused lender. Almost 90% of our originations in 2025 have been purchase mortgages. Our decrease in origination volume was a reversal from our outperformance in Q1. Fannie Mae and Freddie Mac reported single-family originations in Q2 were up 3.5% year over year. Thus, from the data available, it appears we underperformed the market conditions mainly as a result of our purchase focus, as purchase volume was down 6% quarter over quarter at the GSEs.

Speaker #4: This had a significant impact on our results, as we are a purchase money-focused lender. Almost 90% of our originations in 2025 have been purchased mortgages.

Andrew Quist: This had a significant impact on our results as we are a purchase money-focused lender. Almost 90% of our originations in 2025 have been purchased mortgages. Our decrease in origination volume was a reversal from our outperformance in the first quarter. Fannie Mae and Freddie Mac reported single-family originations in Q2 were up 3.5% year-over-year. Thus, from the data available, it appears we underperformed the market conditions, mainly as a result of our purchase focus, as purchase volume was down 6% quarter over quarter at the GSE. While we work to increase volumes back to the outperformance we experienced in Q1, we must, at the same time, continue to rationalize our expenses to lower volume levels. We're well on our way to doing that. In summary, year-over-year decreasing origination volume significantly impacted Q2's result. It appears Security National's market outperformance in Q1 was reversed in Q2.

Speaker #4: Our decrease in origination volume was a reversal from our outperformance in the first quarter. Fannie Mae and Freddie Mac reported single-family originations in Q2 were up 3.5% year-over-year.

Speaker #4: Thus, from the data available, it appears we underperformed the market conditions, mainly as a result of our purchase focus. As purchase volume was down 6% quarter over quarter at the GSEs.

Speaker #4: While we worked to increase volumes back to the outperformance we experienced in Q1, we must, at the same time, continue to rationalize our expenses to lower volume levels.

Andrew Quist: While we work to increase volumes back to the outperformance we experienced in Q1, we must, at the same time, continue to rationalize our expenses to lower volume levels. We're well on our way to doing that. In summary, year over year decreasing origination volume significantly impacted Q2's results. It appears Security National's market outperformance in Q1 was reversed in Q2. The other factors impacting Q2's performance year over year were the same as I reported in Q1. Namely, Current Expected Credit Loss accruals increasing and deferred compensation accruals increasing. I'm confident, with the loan officers and employee team we have at SecurityNational Mortgage Company, we'll return to the market outperformance we experienced earlier. Thank you.

Speaker #4: We're well on our way to doing that. In summary, year-over-year decreasing origination volume significantly impacted Q2's results. It appears Security National's market outperformance in Q1 was reversed in Q2.

Speaker #4: The other factors impacting Q2's performance year-over-year were the same as I reported in Q1: namely, current expected credit loss, accruals increasing, and deferred compensation accruals increasing.

Andrew Quist: The other factors impacting Q2's performance year-over-year were the same as I reported in Q1, namely current expected credit loss accruals increasing and deferred compensation accruals increasing. I'm confident with the loan officers and employee team we have at Security National Mortgage will return to the market outperformance we experienced earlier. Thank you.

Speaker #4: I'm confident that, with the loan officers and employee team we have at Security National Mortgage, we'll return to the market outperformance we experienced earlier. Thank you.

Speaker #4: Thank you, Andrew. My name is Adam Quist, and I serve as President and CEO of Security National Life Insurance Company. Today, I'll be reporting on our life segment's results for the second quarter ended June 30, 2025.

Adam Quist: Thank you, Andrew. My name is Adam Quist, and I serve as President and CEO of Security National Life Insurance Company. Today, I'll be reporting on our Life segment's results for Q2 ended 30 June 2025. On a GAAP basis, our Life segment generated earnings of approximately $8.2 million in Q2 2025, compared to $7.2 million in Q2 2024, for an increase of roughly $1 million year-over-year. This improvement was primarily driven by stronger investment income, despite several notable headwinds. As we mentioned in our press release, premium collections for Q2 were essentially flat compared to the same period last year. While top-line premium growth remains a priority, I believe the equally important story, both for Q2 and for the year as a whole, is our margin improvement.

Adam Quist: Thank you, Andrew. My name is Adam Quist, and I serve as President and CEO of Security National Life Insurance Company. Today, I will be reporting on our life segment's results for the second quarter ended June 30, 2025. On a GAAP basis, our life segment generated earnings of approximately $8.2 million in the second quarter of 2025 compared to $7.2 million in Q2 2024, for an increase of roughly $1 million year-over-year. This improvement was primarily driven by stronger investment income despite several notable headwinds. As we mentioned in our press release, premium collections for Q2 were essentially flat compared to the same period last year. While top-line premium growth remains a priority, I believe the equally important story, both for the second quarter and for the year as a whole, is our margin improvement.

Speaker #4: On a gap basis, our life segments generated earnings of approximately $8.2 million in the second quarter of 2025, compared to $7.2 million in Q2 2024, for an increase of roughly $1,000,000 year-over-year.

Speaker #4: This improvement was primarily driven by stronger investment income, despite several notable headwinds. As we mentioned in our press release, premium collections for Q2 were essentially flat compared to the same period last year.

Speaker #4: While top-line premium growth remains a priority, I believe the equally important story, both for the second quarter and for the year as a whole, is our margin improvement.

Speaker #4: The premium rate increases we implemented are achieving their intended effect and generating significantly stronger margins on new business. While these changes have created some disruption for our sales force and new sales activity, they represent a positive ongoing trend that we believe is essential to our long-term profitability.

Adam Quist: The premium rate increases we implemented are achieving their intended effect and generating significantly stronger margins on new business. While these changes have created some disruption for our sales force and new sales activity, they represent a positive ongoing trend that we believe is essential to our long-term profitability. I would also note that due to the multi-pay nature of the majority of our business, it will take time for the improved margins to be fully recognized in our financial statements. As discussed, the primary driver of our improved earnings this quarter was increased investment income, largely from gains through our home builder relationship investments. As we discussed in our earnings release, we continue to invest significantly in residential landholdings and home builder relationships. While these investments may exert short-term pressure on earnings, we believe they will generate superior long-term returns.

Adam Quist: The premium rate increases we implemented are achieving their intended effect and generating significantly stronger margins on new business. While these changes have created some disruption for our sales force and new sales activities, they represent a positive ongoing trend that we believe is essential to our long-term profitability. I would also note that due to the multi-pay nature of the majority of our business, it will take time for the improved margins to be fully recognized in our financial statements. As discussed, the primary driver of our improved earnings this quarter was increased investment income, largely from gains through our home builder relationship investment. As we discussed in our earnings release, we continue to invest significantly in residential land holdings and home builder relationships. While these investments may exert short-term pressure on earnings, we believe they will generate superior long-term returns.

Speaker #4: I would also note that, due to the multi-pay nature of the majority of our business, it will take time for the improved margins to be fully recognized in our financial statements.

Speaker #4: As discussed, the primary driver of our improved earnings this quarter was increased investment income, largely from gains through our homebuilder relationship investments. As we mentioned in our earnings release, we continue to invest significantly in residential landholding and homebuilder relationships.

Speaker #4: While these investments may exert short-term pressure on earnings, we believe they will generate superior long-term returns. We also faced several pressures offsetting our increased investment income.

Adam Quist: We also faced several pressures offsetting our increased investment income. First, our personnel costs rose by approximately $800,000 in Q2 compared to Q2 of the prior year, bringing the year-to-date total increase to about $2 million. This reflects ongoing investments in our sales teams, improving our operational infrastructure, remaining marketplace competitive in our compensation rates, and long-term growth initiatives as previously outlined in Q1. Notably, I would point out that the pace of our personnel cost increases moderated in Q2 relative to Q1 2025, highlighting our continued efforts to rationalize expenses while still supporting strategic growth priorities, which by their very nature do require investment. Net death benefits were about $1 million higher than in Q2 2024. We believe our mortality levels for the first half of 2025 to be an estimated 4% above trend relative to both 2024 and 2019, excuse me, and 2019 pre-COVID levels.

Adam Quist: We also faced several pressures offsetting our increased investment income. Our personnel costs rose by approximately $800,000 in Q2 compared to Q2 of the prior year, bringing the year-to-date total increase to about $2 million. This reflects ongoing investments in our sales teams, improving our operational infrastructure, remaining marketplace competitive in our compensation rates, and long-term growth initiatives as previously outlined in Q1. Notably, I would point out that the pace of our personnel cost increases moderated in Q2 relative to Q1 2025, highlighting our continued efforts to rationalize expenses while still supporting strategic growth priorities, which, by their very nature, do require investments. Death benefits were about $1 million higher than in Q2 2024.

Speaker #4: First, our personnel costs rose by approximately $800,000 in Q2, compared to Q2 of the prior year, bringing the year-to-date total increase to about $2,000,000.

Speaker #4: This reflects ongoing investments in our sales teams, improving our operational infrastructure, remaining marketplace competitive in our compensation rates, and long-term growth initiatives as previously outlined in Q1.

Speaker #4: Notably, I would point out that the pace of our personnel costs increases moderated in Q2 relative to Q1 2025, highlighting our continued efforts to rationalize expenses while still supporting strategic growth priorities, which, by their very nature, do require investments.

Speaker #4: Next, death benefits were about $1,000,000 higher than in Q2 2024. We believe our mortality levels for the first half of 2025 to be an estimated 4% above trend relative to both 2024 and 2029, or excuse me, and 2019 pre-COVID VID levels.

Adam Quist: We believe our mortality levels for the H1 of 2025 to be an estimated 4% above trend relative to both 2024 and 2019, or excuse me, and 2019 pre-COVID levels. While short and medium term fluctuations are expected, we remain confident in our pricing assumptions and long-term experience outlook. Additionally, the increase in amortization of commission expenses, often called deferred acquisition costs or DAC, observed in Q1 continued in Q2, bringing the year-to-date increase to approximately $1.5 million. Of note, upon the payment of a death benefit, any remaining unamortized DAC associated with that policy is then amortized. Additionally, the DAC assumptions are reviewed and updated periodically. Lastly, our current expected credit losses, or CECL, increased by approximately $250,000 during the quarter, bringing the year-to-date increase to about $1 million.

Speaker #4: While short- and medium-term fluctuations are expected, we remain confident in our pricing assumptions and long-term experience outlook. Additionally, the increase in amortization of commission expenses, often called deferred acquisition costs or DAC, observed in Q1 continued in Q2.

Adam Quist: While short and medium-term fluctuations are expected, we remain confident in our pricing assumptions and long-term experience outlined. Additionally, the increase in advertising of commission expenses, often called deferred acquisition costs or DAC, observed in Q1 continued in Q2, bringing the year-to-date increase to approximately $1.5 million. Of note, upon the payment of a death benefit, any remaining unadvertised DAC associated with that policy is then amortized. Additionally, the DAC assumptions are reviewed and updated periodically. Lastly, our current expected credit losses, or CCL, increased by approximately $250,000 during the quarter, bringing the year-to-date increase to about $1 million. As a reminder, CCL is driven by formula-based accounting standards combined with generalized market assumptions, which may not reflect our actual long-term credit experience. As we mentioned in the press release in the past month, we executed leadership changes within our life sales organization.

Speaker #4: Bringing the year-to-date increase to approximately 1.5 million. Of note, upon the payment of a death benefit, any remaining unamortized DAC associated with that policy is then amortized.

Speaker #4: Additionally, the DAC assumptions are reviewed and updated periodically. Lastly, our current expected credit losses, or CESL, increased by approximately $250,000 during the quarter, bringing the year-to-date increase to about $1,000,000.

Speaker #4: As a reminder, CESL is driven by formula-based accounting standards, combined with generalized market assumptions, which may not reflect our actual long-term credit experience. As we mentioned in the press release, in the past month, we executed leadership changes within our life sales organization.

Adam Quist: As a reminder, CECL is derived by formula-based accounting standards combined with generalized market assumptions, which may not reflect our actual long-term credit experience. As we mentioned in the press release, in the past month, we executed leadership changes within our life sales organization. These changes are designed to accelerate new premium sales while preserving the improved profitability delivered by our pricing strategies. We believe this adjustment positions us well to meet our growth targets in the future. In summary, I believe Q2 was a strong quarter for our life segment, featuring more than $1 million in earnings growth relative to Q2 2024, improved margins, and ongoing strategic investments. Despite elevated mortality and other headwinds, we delivered stronger profitability than in the same quarter last year.

Speaker #4: These changes are designed to accelerate new premium sales while preserving the improved profitability delivered by our pricing strategies. We believe this adjustment positions us well to meet our growth targets in the future.

Adam Quist: These changes are designed to accelerate new premium sales while preserving the improved profitability delivered by our pricing strategy. We believe this adjustment positions us well to meet our growth targets in the future. In summary, I believe the second quarter was a strong quarter for our life segment, featuring more than $1 million in earnings growth relative to Q2 2024, improved margins, and ongoing strategic investment. Despite elevated mortality and other headwinds, we delivered stronger profitability than in the same quarter last year. We remain confident that our disciplined pricing, strategic investment, and operational improvements will continue to drive sustainable long-term success. Thank you for your continued support, and I look forward to updating you on our progress in the next quarter. I will now turn the time over to Steve Gill.

Speaker #4: In summary, I believe the second quarter was a strong quarter for our life segment, featuring more than $1,000,000 in earnings growth relative to Q2 2024, improved margins, and ongoing strategic investments.

Speaker #4: Despite elevated mortality and other headwinds, we delivered stronger profitability than in the same quarter last year. We remain confident that our disciplined pricing, strategic investment, and operational improvements will continue to drive sustainable long-term success.

Adam Quist: We remain confident that our disciplined pricing, strategic investment, and operational improvements will continue to drive sustainable long-term success. Thank you for your continued support. I look forward to updating you on our progress in the next quarter. I will now turn the time over to Steve Kiel.

Speaker #4: Thank you for your continued support, and I look forward to updating you on our progress in the next quarter. I will now turn the time over to Steve Gill.

Speaker #5: Thank you, Adam. Good afternoon, everyone. My name is Steve Gill, and I'm the Chief Operating Officer of Security National Funeral Homes and Cemeteries. I'd like to begin by expressing my heartfelt appreciation to our funeral home, cemetery, grounds, and operational support teams.

Steve Kiel: Thank you, Adam. Good afternoon, everyone. My name is Steve Kiel, and I'm the Chief Operating Officer of Security National Funeral Homes and Cemeteries. I'd like to begin by expressing my heartfelt appreciation to our funeral home, cemetery grounds, and operational support teams. Your unwavering dedication to service excellence and operational professionalism continues to be the cornerstone of our success. Even in the face of today's challenging economic environment, your commitment inspires confidence and upholds the highest standards of care for the families we have the privilege to serve. In Q2 2025, we reported net earnings before tax of $1.79 million, which is down from our $2.09 million Q2 2024, or 14.2%. Much of this decline rests within our operating earnings, but more specifically derived from our cemetery operations.

Steve Gill: Thank you, Adam. Good afternoon, everyone. My name is Steve Gill, and I'm the Chief Operating Officer of Security National Funeral Homes and Cemeteries. I'd like to begin by expressing my heartfelt appreciation to our funeral home, cemetery, grounds, and operational support teams. Your unwavering dedication to service excellence and operational professionalism continues to be the cornerstone of our success. Even in the face of today's challenging economic environment, your commitment inspires confidence and upholds the highest standards of care for the families we have the privilege to serve. In the second quarter of 2025, we reported net earnings before tax of $1.79 million, which is down from our $2.09 million second quarter of 2024, or 14.2%. Much of this decline rests within our operating earnings, but more specifically derived from our cemetery operations.

Speaker #5: Your unwavering dedication to service excellence and operational professionalism continues to be the cornerstone of our success. Even in the face of today's challenging economic environment, your commitment inspires confidence and upholds the highest standards of care for the families we have the privilege to serve.

Speaker #5: In the second quarter of 2025, we reported net earnings before tax of $1.79 million, down from our $2.09 million in the second quarter of 2024, a decrease of 14.2%.

Speaker #5: Much of this decline rests within our operating earnings, but more specifically derived from our cemetery operations. Our total revenue in the second quarter was $8.14 million, which was down from the $8.28 million in revenue in Q2 of 2024, or 1.7%.

Steve Gill: Our total revenue in the second quarter was $8.14 million, which was down from the $8.28 million in revenue in Q2 of 2024, or 1.7%. These results are not only a reminder of the challenges we're currently navigating, but they're also a catalyst. We continue to act with urgency to address today's pressures while making the investments and implementing operational improvements that will strengthen our foundation and position us for long-term success. Within our funeral home division in the second quarter of 2025, our earnings came in at $387,000, which were down slightly from the $394,000 earned in Q2 of 2024. Revenue, however, rose 1.2% to $3.26 million. This was driven by a 3.3% increase in our funeral sales averages. In addition, we continue to see our sales mix move another 3.6% towards cremation, and our total cremation rate realized in Q2 of 2025 sits at 52.8%.

Steve Kiel: Our total revenue in Q2 was $8.14 million, which was down from the $8.28 million in revenue in Q2 of 2024, or 1.7%. These results are not only a reminder of the challenges we're currently navigating, but they're also a catalyst. We continue to act with urgency to address today's pressures while making the investments and implementing operational improvements that will strengthen our foundation and position us for long-term success. Within our funeral home division in Q2 of 2025, our earnings came in at $387,000, which were down slightly from the $394,000 earned in Q2 of 2024. Revenue, however, rose 1.2%, $3.26 million. This was driven by a 3.3% increase in our funeral sales averages.

Speaker #5: These results are not only a reminder of the challenges we're currently navigating, but they’re also a catalyst. We continue to act with urgency to address today’s pressures while making the investments and implementing operational improvements that will strengthen our foundation and position us for long-term success.

Speaker #5: Within our funeral home division, in our second quarter of 2025, our earnings came in at $387,000, which were down slightly from the $394,000 earned in Q2 of '24.

Speaker #5: Revenue, however, rose 1.2%, or $3.26 million. This was driven by a 3.3% increase in our funeral sales averages. In addition, we continue to see our sales mix move another 3.6% toward cremation, as our total cremation rate realized in Q2 of '25 sits at 52.8%.

Steve Kiel: In addition, we continue to see our sales mix move another 3.6% towards cremation as our total cremation rate realized in Q2 2025 sits at 52.8%. As Scott alluded to in his press release, we have realized a 6.1% increase in these cremation families that are choosing to have service associated with honoring their loved one's life. In our Cemetery division, in our Q2 2025, our earnings were at $822,000, which were down from prior year quarter's $1.43 million. Revenue declined 10% from $4.81 million to $4.33 million, with our pre-need land sales lagging behind prior year's quarter, which included large land sales that were absent in Q2 2025.

Speaker #5: As Scott alluded to in his press release, we have realized a 6.1% increase in these cremation families that are choosing to have services associated with honoring their loved one's life.

Steve Gill: As Scott alluded to in his press release, we have realized a 6.1% increase in these cremation families that are choosing to have service associated with honoring their loved one's life. In our cemetery division, in our second quarter of 2025, our earnings were at $822,000, which were down from prior year quarter's $1.43 million. Revenue declined 10% from $4.81 million to $4.33 million, with our pre-need land sales lagging behind prior year's quarters, which included large land sales that were absent in Q2 of 2025. Another contributing factor to the revenue decrease is from our interment volumes being down 16.4% for 65 interments within the quarter. This is driven largely by the continued consumer shift towards cremation. We have raised both the level of professionalism and our standards of excellence expectations with our cemetery sales team this year. This initiative has come at a short-term cost.

Speaker #5: In our cemetery division, in Q2 2025, our earnings were $822,000, which were down from the prior year quarter's $1.43 million. Revenue declined 10%, from $4.81 million to $4.33 million, with our pre-need land sales lagging behind the prior year's quarter.

Speaker #5: This included large land sales that were absent in Q2 of 2025. Another contributing factor to the revenue decrease is from our internment volumes being down 16.4%, or $65,000 in internments within the quarter.

Steve Kiel: Another contributing factor to the revenue decrease is from our interment volumes being down 16.4% for 65 interments within the quarter. This is driven largely by the continued consumer shift towards cremation. We have raised both the level of professionalism and our standards of excellence expectations within our cemetery sales team this year. This initiative has come at a short-term cost. Since January of 2025, we have turned over 60% of our sales team. At the end of Q2, 50% of our cemetery sales team have joined us within the last 6 months. We have recruited heavily, and that has brought us talented professionals with proper mindsets.

Speaker #5: This is driven largely by the continued consumer shift towards cremation. We have raised both the level of professionalism and our standards of excellence expectations within our cemetery sales team this year.

Speaker #5: This initiative is coming at a short-term cost. Since January 2025, we have turned over 60% of our sales team. At the end of Q2, 50% of our cemetery sales team have joined us within the last six months.

Steve Gill: Since January of 2025, we have turned over 60% of our sales team. At the end of Q2, 50% of our cemetery sales team have joined us within the last six months. We have recruited heavily and that has brought us talented professionals with proper mindsets. We also remain committed to investing in and developing our cemeteries to offer a full range of both burial and cremation options that meet the evolving family needs as our team educates on the importance of having a final resting place to honor the life lived. For the remainder of 2025, our focus is clear: talent development, technology, expense management, and sales culture. We remain optimistic. Our operating model is strong, and our core businesses have room to grow. We recognize that reaching our desired destination of sustained growth will require more than simply repeating what we have done in the past.

Speaker #5: We have recruited heavily, and that has brought us talented professionals with the proper mindsets. We also remain committed to investing in and developing our cemeteries to offer a full range of both burial and cremation options that meet the evolving family needs, as our team educates on the importance of having a final resting place to honor the life lived.

Steve Kiel: We also remain committed to investing in and developing our cemeteries to offer a full range of both burial and cremation options that meet the evolving family needs as our team educates on the importance of having a final resting place to honor the life lived. For the remainder of 2025, our focus is clear. Talent development, technology, expense management, and sales culture. We remain optimistic. Our operating model is strong, and our core businesses have room to grow. We recognize that reaching our desired destination of sustained growth will require more than simply repeating what we have done in the past. Our deliberate and significant investments in people, technology, and customer service innovation, combined with disciplined cost control, will strengthen our competitive position and support performance gains in the quarters ahead. Thank you for your time, for your confidence, and most importantly, for your continued partnership.

Speaker #5: For the remainder of 2025, our focus is clear: talent development, technology, expense management, and sales culture. We remain optimistic. Our operating model is strong, and our core businesses have room to grow.

Speaker #5: We recognize that reaching our desired destination of sustained growth will require more than simply repeating what we have done in the past. Our deliberate and significant investments in people, technology, and customer service innovation, combined with disciplined cost control, will strengthen our competitive position.

Steve Gill: Our deliberate and significant investments in people, technology, and customer service innovation, combined with disciplined cost control, will strengthen our competitive position and support performance gains in the quarters ahead. Thank you for your time, for your confidence, and most importantly, for your continued partnership. I now turn the time back over to Heather Street.

Speaker #5: And support performance gains in the quarters ahead. Thank you for your time, your confidence, and most importantly, for your continued partnership. I now turn the time back over to Heather Street.

Steve Kiel: I now turn the time back over to Heather Street.

Speaker #6: Before we conclude today's call, I would like to open the floor for questions. As a reminder, to ask your questions, please use the Zoom platform to raise your hand to unmute.

Heather Street: Before we conclude today's call, we'd like to open the floor for questions. As a reminder, to ask a question, please use the Zoom platform to raise your hand to unmute, or you may submit questions through the Zoom Q&A panel. Include your name and organization. We'll take as many as time permits. A question comes in: What specific steps are being taken to turn around the mortgage company's losses?

Heather Street: Before we conclude today's call, we would like to open the floor for questions. As a reminder to ask a question, please use the Zoom platform to raise your hand to unmute, or you may submit questions through the Zoom Q&A panel. Include your name and organization. We will take as many as time permits. The question comes in: what specific steps are being taken to turn around the mortgage company's losses?

Speaker #6: Or you may submit questions through the Zoom Q&A panel. Include your name and organization; we'll take as many as time permits. The question comes in: What specific steps are being taken to turn around the mortgage company's losses?

Speaker #7: If this is Andrew Quist again, the specific steps that are being taken are both expense reduction on the mortgage side and an increase in margins.

Andrew Quist: Yes, this is Andrew Quist again. The specific steps that are being taken are both expense reduction on the mortgage side and an increase in margins. We are working on both the revenue and expense side of the equation. We have increased our margins in Q2 going into Q3, which will certainly increase revenue in Q3 on a comparative basis, and we continue to rationalize our expenses. The two areas that we saw the biggest expense increases year over year in Q2 were what I mentioned, two that we don't have operational control over, that being CECL, current expected credit losses, and deferred compensation accrual. Outside of that, we continue to work feverishly at reducing the operational expenses we can control.

Andrew Quist: Yes. This is Andrew Quist again. The specific steps that are being taken are both expense reduction on the mortgage side and an increase in margin. We are working on both the revenue and expense side of the equation. We have increased our margin in the second quarter going into the third quarter, which will certainly increase revenue in the third quarter on a comparative basis. We continue to rationalize our expenses. The two areas that we saw the biggest expense increases year over year in the second quarter were what I mentioned, two that we do not have operational control over, that being CCL for unexpected credit losses and deferred compensation accrual. Outside of that, we continue to work feverishly at reducing the operational expenses we can control.

Speaker #7: And so we are working on both the revenue and expense side of the equation. We have increased our margins in the second quarter going into the third quarter.

Speaker #7: which will certainly increase revenue in the third quarter. On a comparative basis, we continue to rationalize our expenses. The two areas that we saw the biggest expense increases year-over-year in the second quarter were what I mentioned, two that we don't have operational control over.

Speaker #7: That being CESL, current expected credit losses, and deferred compensation accruals. Outside of that, we continue to work feverishly at reducing the operational expenses we can control.

Heather Street: Thank you, Andrew. Do you feel that the premium increases play a role in the life side?

Speaker #6: Thank you, Andrew. Do you feel that the premium increases play a role in the life side?

Heather Street: Do you feel that the premium increases play a role in the lifestyle?

Speaker #7: Yeah, good question. This is Adam Quist. I'll be answering that question. It certainly played a role. Anytime you increase premiums, there is, in my opinion, a mindset challenge that you have with your sales force.

Adam Quist: Yeah, good question. This is Adam Quist. I'll be answering that question. It certainly plays a role. Anytime you increase premium, there is, in my opinion, a mindset challenge that you have with your sales force. That is something that we're currently navigating. We are working on the mindset of our sales force that we are a value proposition company, that we do not compete on price, but we compete on value. That because we compete on value, our offerings are still a very compelling offering in the marketplace. I would say that I think we are making good progress on that and that we are seeing some good headway with our sales force mindset and in sales velocity.

Adam Quist: Yeah, good question. This is Adam Quist. I will be answering that question. It certainly plays a role. Anytime you increase premium, there is, in my opinion, a mindset challenge that you have with your sales force. That is something that we are currently navigating. We are working on the mindset of our sales force that we are a value proposition company, that we do not compete on price, but we compete on value. Because we compete on value, our offerings are still a very compelling offering in the marketplace. I would say that I think we are making good progress on that and that we are seeing some good headway with our sales force mindset and its sales velocity.

Speaker #7: And that is something that we're currently navigating. We are working on the mindset of our sales force that we are a value proposition company and that we do not compete on price.

Speaker #7: But we compete on value. And because we compete on value, our offerings are still a very compelling offering in the marketplace. I would say that I think we are making good progress on that.

Speaker #7: And that we are seeing some good headway with our sales force mindset and in sales velocity.

Speaker #6: Next question: What is the main cause of the $4,000,000 increase in personnel costs?

Heather Street: Next question. What is the main cause of the $4 million increase in personnel costs?

Heather Street: Next question: What is the main cause of the $4 million increase in personnel costs?

Adam Quist: Yeah, I can take that. So there's a couple of things that cause it. I mean, if you're looking for one main cause, there are certain natural increases that we have to take to keep competitive with market rate compensation. We find that retaining individuals, while you do have to increase to market rate, it is still cheaper than having to retrain someone. That is one element of it. The other element of it would be strategic investments that we have made and strategic hires that we have made that we believe will make us a stronger company going forward. Speaking specifically, I think that things such as generating a proprietary aftercare program and proprietary CRM program for our sales force, those things do cost money.

Speaker #7: Yeah, I can take that. There are a couple of things that cause it. I mean, if you're looking for one main cause, there are certain natural increases that we have to take to keep competitive with market rate compensation.

Adam Quist: Yeah, I can take that. There's a couple of things that cause it. If you're looking for one main cause, there are certain natural increases that we have to take to keep competitive with market rate compensation. We find that retaining individuals, while you do have to increase market rate to market rate, it is still cheaper than having to retrain someone. That is one element of it. The other element of it would be strategic investments that we have made and strategic hires that we have made that we believe will make us a stronger company going forward. Speaking specifically, I think that things such as generating a proprietary aftercare program and a proprietary CRM program for our sales force, those things do cost money. It does require a personnel investment, but we believe that the investment will be returned in the future.

Speaker #7: We find that retaining individuals, while you do have to increase their salary to market rate, is still cheaper than having to retrain someone.

Speaker #7: And so that is one element of it. But the other element of it would be strategic investments that we have made and strategic hires that we have made that we believe will make us a stronger company going forward.

Speaker #7: Speaking specifically, I think that things such as generating a proprietary aftercare program and a proprietary CRM program for our sales force—those things do cost money.

Speaker #7: It does require personnel investment, but we believe that the investment will be returned in the future.

Adam Quist: It does require a personnel investment, but we believe that investment will be returned, in the future.

Speaker #6: Next question from Melanie Smith. What other issues do you feel have created a drop in life sales?

Heather Street: Next question from Melanie Smith. What other issues do you feel have created a drop in life sales?

Heather Street: Next question from Melanie Smith: What other issues do you feel have created a drop in life sales?

Speaker #7: Well, I would note that our premium collections were flat, so I might question the use of the word 'drop' there. But, I think the main issue, if I were to summarize it, is our leadership.

Adam Quist: Well, I would note that our premium collections were flat. I might question the use of the word drop there. I think the main issue, if I were to summarize it, is our leadership. We've addressed that sales leadership. We've made changes there. We mentioned that in the press release also in my comments today. I simply think that we did not have good sales leadership at the positions we needed to. Combining that with a premium increase created some challenges for field-level sales. I think we have addressed the leadership issues. I think we are seeing some good returns from our sales force at the moment, albeit we're still very early and young in the process.

Adam Quist: Well, I would note that our premium collections were flat, so I might question the use of the word drop there. I think the main issue, if I were to summarize it, is our leadership. We have addressed that sales leadership. We have made changes there, and we mentioned that in the press release and in my comment today. I simply think that we did not have good sales leadership at the positions we needed to. Combining that with a premium increase created some challenges for our field-level sales. I think we have addressed the leadership issues, and I think we are seeing some good returns from our sales force at the moment, albeit we are still very early and young in the process.

Speaker #7: And we've addressed that sales leadership. We've made changes there, and we mentioned that in the press release. In my comments today, I simply think that we did not have good sales leadership in the positions we needed to.

Speaker #7: And, combining that with a premium increase created some challenges for our field-level sales. But I think we have addressed the leadership issues, and I think we are seeing some good returns from our sales force at the moment, albeit we're still very early and young in the process.

Speaker #6: Next question from mortgage, Carlos Plaza says, "On the mortgage side, if we increase margins, don't we run the risk of being less competitive and having lower volume?"

Heather Street: Next question for mortgage. Carlos Plaza says: On the mortgage side, if we increase margin, don't we run the risk to be less competitive and have lower volume?

Heather Street: Next question for Morgan. Carlos Lazza says: On the mortgage side, if we increase margins, don't we run the risk to be less competitive and have lower volume?

Speaker #7: This is Andrew Quist again. Certainly. That's a risk. Thank you for the question, Carlos. That is why we pay close attention to the market environment.

Andrew Quist: This is Andrew Quist again. Certainly that's a risk. Thank you for the question, Carlos. That is why we pay close attention to the market environment, and we can see through both our pricing engine, not specific competitors, but market conditions, and through publicly traded results that our competitors in the market right now have been increasing margin as well. It's something that we have to monitor carefully and make sure that we don't increase more than what we're seeing the market increase. Yes, that is something that we certainly monitor, and we have to balance.

Andrew Quist: This is Andrew Quist again. Certainly, that is a risk. Thank you for the question, Carlos. That is why we pay close attention to the market environment. We can see through both our pricing engine, not specific competitor, but market conditions, and through publicly traded results that our competitors in the market right now have been increasing margin as well. It is something that we have to monitor carefully and make sure that we do not increase more than what we are seeing the market increase. Yes, that is something that we certainly monitor and we have to balance.

Speaker #7: And we can see, through both our pricing engine—not specific competitors, but market conditions—and through publicly traded results, that our competitors in the market right now have been increasing margins as well.

Speaker #7: So, it's something that we have to monitor carefully and make sure that we don't increase more than what we're seeing the market increase. But yes, that is something that we certainly monitor.

Speaker #7: And we have to, balance.

Speaker #6: Next question: Can you speak to the overall investment exposure to real estate and your relationships with builders?

Heather Street: Next question. Can you speak to the overall investment exposure to real estate and your relationships with builders?

Heather Street: Next question: Can you speak to the overall investment exposure to real estate and your relationship with builders?

Speaker #7: So, this is Garrett Still. I'll answer kind of the first part of that question as far as investment exposure. It's something we look at when we look at our investments.

Garrett Sill: This is Garrett Sill. I'll answer kind of the first part of that question as far as investment exposure. It's something we look at when we look at our investments. I noted that we had increased our investment in real estate by about $25 million this year. We do look at it, but in spite of that increase of $25 million, we've kind of offset that with an increased investment in our bonds portfolio as well. You know, we try to look at it. We look at all our investments in buckets.

Garrett Sill: This is Garrett Sill. I will answer the first part of that question as far as investment exposure. It is something we look at when we look at our investments. I noted that we had increased our investment in real estate by about $25 million this year. We do look at it, but in spite of that increase of $25 million, we have offset that with an increased investment in our bond portfolio as well. We try to look at it. We look at all our investments in buckets. Year over year, I do not think the percentage increase in real estate investment is significant given our balance sheet size, but it is something we review on a regular basis. We made a concerted effort beginning of the year.

Speaker #7: I noted that we had increased our investment in real estate by about $25 million this year. We do look at it, but in spite of that increase of $25 million, we've kind of offset that with an increased investment in our bond portfolio as well.

Speaker #7: And so, you know, we try to look at it. We look at all our investments in buckets. Year over year, I don't think the percentage increase in real estate investment is significant.

Garrett Sill: Year-over-year, I don't think the percentage increase in real estate investment is significant, given our balance sheet size, but it is something we review on a regular basis, and we made a concerted effort beginning of the year. Actually, it started back in Q4 last year to increase our bond portfolio, which is a little more stable, albeit, it is subject to interest rates and market movements, but the income portion of that portfolio is fixed in nature and pretty steady. You know, we feel pretty good where we're at as far as ratios go with our investment in various assets. Nothing too concerning, the increase in Q2 of our real estate.

Speaker #7: given our, balance sheet size. But it is something we review on our, on a regular basis. And we made a concerted effort, beginning of the year actually, it started back in Q4 last year to increase our bond portfolio, which is, is a little more stable, albeit, it is subject to interest rates and, and mark, market movements, but the income portion of that portfolio is, fixed in nature.

Garrett Sill: Actually, it started back in Q4 last year to increase our bond portfolio, which is a little more stable, albeit it is subject to interest rates and market movements, but the income portion of that portfolio is fixed in nature and pretty steady. We are still pretty good where we are at as far as ratios go with our investment expenses, sorry, our investment in various assets. Nothing too concerning the increase in Q2 of our real estate. I will let Jason Overbaugh answer a little bit more on the builder side.

Speaker #7: And, pretty steady. So, you know, we're still pretty good where we're at as far as ratios go with our investment expenses. Sorry, our investment in various assets.

Speaker #7: And so, nothing too concerning; the increase in Q2 of our real estate. I’ll let Jason Overbaugh answer kind of a little bit more on the builder side.

Garrett Sill: I'll let Jason Overbaugh answer kind of a little bit more on the builder side.

Speaker #8: Thank you, Garrett. Yes, this is Jason Overbaugh, Vice President and Director with responsibilities for our builder relationships. I'll take two things about the relationships with the builders we work with.

Jason Overbaugh: Thank you, Garrett. Yes. This is Jason Overbaugh, Vice President and Director with responsibilities for our builder relationships. I'll say two things about the relationships with builders we work with. One, we choose to only work with high-quality builders who have a very strong track record of performance. Typically, these builders are working in the production home models, which provide a very stable base of buyers for their homes. Then the other point I would make about these relationships is we stay very much in markets that we see as growing and expanding, where there's strong employment bases to be able to have the ultimate buyers to take out these homes. High quality builders, stable markets are very much a important part of our strategy.

Jason Overbaugh: Thank you, Garrett. Yes, this is Jason Overbaugh, Vice President and Director with responsibilities for our builder relationships. I will say two things about the relationships with builders we work with. One, we choose to only work with high-quality builders who have a very strong track record of performance. Typically, these builders are working in the production home models, which provide a very stable base of buyers for their homes. The other point I would make about these relationships is we stay very much in markets that we see as growing and expanding, where there is strong employment bases to be able to have the ultimate buyers to take out these homes. So high-quality builders, stable markets are very much an important part of our strategy.

Speaker #8: One, we choose to only work with high-quality builders who have a very strong track record of performance. Typically, these builders are working in the production home models, which provide a very stable base of buyers for their homes.

Speaker #8: And then the other point I would make about these relationships is we stay very much in markets that we see as growing and expanding, where there's a strong employment base, to be able to have the ultimate buyers take out these homes.

Speaker #8: So, high-quality builders and stable markets are very much an important part of our strategy. I will say maybe a third thing: we've acquired some very talented people that Adam didn't really give a nod to, or maybe the right phrase is "recognize," in the increase in compensation that bring 20-plus years of banking experience.

Jason Overbaugh: I will say maybe a third thing, we have acquired some very talented people that Adam Quist did not really give a nod to or maybe the right phrase is recognized in the increase in compensation that brings 20-plus years of banking experience so that we are sure of our valuations and we are sure of our processes in protecting the investments that we are making in Security National. So high-quality builders, high-quality markets, and then high-quality talent here at Security National, ensuring the investments are handled properly.

Jason Overbaugh: I will say maybe a third thing, we've acquired some very talented people that, you know, Adam Quist didn't really give a nod to, or maybe the right phrase is recognize in the increase in compensation that bring 20-plus years of banking experience so that we are sure of our valuations, and we are sure of our processes in protecting the investments that we're making in Security National. High quality builders, high quality markets, and then high quality talent here at Security National, ensuring the investments are handled properly.

Speaker #8: So that we are sure of our valuations and our processes in protecting the investments that we're making in Security National.

Speaker #8: So, high-quality builders, high-quality markets, and then high-quality talent here at Security National, ensuring the investments are handled properly.

Speaker #6: Are there any further questions? Noting no more questions, we want to thank you again for your questions and participation. We value the engagement and thoughtful input of our shareholders and analysts.

Heather Street: Are there any further questions? Noting no more questions, we want to thank you again for your questions and participation. We value the engagement and thoughtful input of our shareholders and analysts. For more information about the meeting, our latest financial reports, or any other investor materials, we invite you to visit the investor relations section of our website at www.securitynational.com. We appreciate your continued support of Security National Financial Corporation. This concludes our Q2 2025 earnings call. We look forward to speaking with you again very soon. Thank you and have a great day.

Heather Street: Are there any further questions? Noting no more questions, we want to thank you again for your questions and participation. We value the engagement and thoughtful input of our shareholders and analysts. For more information about the meetings, our latest financial reports, or any other investment materials, we invite you to visit the Investor Relations section of our website at www.securitynational.com. We appreciate your continued support of Security National Financial Corporation. This concludes our second quarter 2025 earnings call. We look forward to speaking with you again very soon. Thank you and have a great day.

Speaker #6: For more information about the meeting, our latest financial reports, or any other investor materials, we invite you to visit the Investor Relations section of our website at www.security-national.com.

Speaker #6: We appreciate your continued support of Security National Financial Corporation. This concludes our Q2 2025 earnings call. We look forward to speaking with you again very soon.