Security National Financial posts higher profit on lower revenue across both reported windows, with long-duration insurance accounting adopted retrospectively

Bottom line

- SECURITY NATIONAL FINANCIAL CORP filed the period covered by 10-Q for the fiscal period denoted as period-ended-2026-06-30, available under accession 0001493152-26-036814 and identified by CIK 0000318673 and ticker SNFCA. S. GAAP for interim financial information and with the instructions to 10-Q and the cited articles of Regulation S-X.

- Management states the interim financial statements should be read together with the Company's audited consolidated financial statements and notes for the prior fiscal year contained in its Annual Report on Form referenced in the filing, and that all adjustments reflected are limited to normal recurring accruals considered necessary for a fair presentation. - Management cautions that operating results for the three and six month periods ended on the date identified by the three months ended June 30, 2026 are not necessarily indicative of results that may be expected for the year ending on the date identified in the cited forward-looking reference.

- Management describes the application of a recently adopted accounting standard related to long-duration insurance contracts under a modified retrospective approach, using a transition date that the catalog does not resolve to a specific day, with prior period amounts retrospectively adjusted and the condensed consolidated financial statements thereafter presented under the new guidance. - Diluted earnings per share for the six months ended June 30, 2026 is higher than the prior-year comparative for the six months ended June 30, 2025, and diluted earnings per share for the three months ended June 30, 2026 is higher than the prior-year comparative for the three months ended June 30, 2025, in each case reflecting a profit-to-profit transition.

- Net income attributable to the parent for the six months ended June 30, 2026 is higher than the prior-year comparative for the six months ended June 30, 2025, and net income attributable to the parent for the three months ended June 30, 2026 is higher than the prior-year comparative for the three months ended June 30, 2025, in each case reflecting a profit-to-profit transition. - Revenues for the six months ended June 30, 2026 are lower than the prior-year comparative for the six months ended June 30, 2025, and revenues for the three months ended June 30, 2026 are lower than the prior-year comparative for the three months ended June 30, 2025.

- The revenue and earnings direction described above reads as top-line softness combined with bottom-line and per-share improvement across both reported windows, a combination consistent with non-operating or below-the-line items that the cited note structure does not separately disclose for this section. - The cited note on basis of presentation and recent accounting pronouncements discloses that certain prior-period amounts were reclassified or retrospectively adjusted to conform to the current-period presentation following adoption of the long-duration contracts standard, which means prior-year comparatives shown for the six months ended June 30, 2025 and the three months ended June 30, 2025 may not be on a basis fully identical to historical filings outside this dataset.

- A reader cross-checking the prior-year comparatives against earlier Annual Report on Form filings should anticipate this restatement effect rather than treat the prior-year columns as historical values. - The filing evidence does not disclose segment-level detail for revenues or for the reconciliation between revenue movement and bottom-line improvement. - The filing evidence contains no peer or industry comparison.

- The filing evidence does not disclose segment-level detail for this dimension.

Financial performance

- Earnings Per Share, Diluted for SECURITY NATIONAL FINANCIAL CORP was $0.33 per diluted share USD/SHARES for the three-month reporting period and $0.6 per diluted share USD/SHARES for the six-month period the six months ended June 30, 2026, per 10-Q period-ended-2026-06-30 filed under accession 0001493152-26-036814. - Net Income (Loss) Attributable to Parent was $8,981,697 USD for the three-month window and $15,983,123 USD for the six-month window, both presented as profit. - Revenues were $83,926,048 USD for the quarter and $163,654,828 USD for the year-to-date period.

Reported facts - The three- and six-month results appear side-by-side with the prior-year comparatives in the condensed consolidated statements; the prior-year diluted EPS figures of $0.31 per diluted share USD/SHARES and $0.55 per diluted share USD/SHARES, prior-year net income of $8,370,755 USD and $14,784,490 USD, and prior-year revenues of $89,541,149 USD and $172,280,872 USD are presented in the same statements for comparison. - Management explicitly notes that interim operating results are not necessarily indicative of full-year performance, a standard forward-looking caution applied at the top of the discussion. - The notes describe a series of accounting policies subject to significant judgment: derivative assets and liabilities, deferred acquisition costs and the value of business acquired, the liability for future policy benefits, loans held for sale, and the loan loss reserve.

Management explanations - The Company adopted an update to the long-duration insurance contracts standard using the modified retrospective approach, with a transition date in January of the current year and retrospective adjustment of prior-period amounts. - Under the new guidance, cash flow assumptions such as mortality, lapse, and expense will be reviewed at least annually rather than locked in at policy issuance, and net premiums are capped at a stated percentage of gross premiums at the cohort level. - The discount rate used to calculate future policy benefits shifts to an upper-medium-grade (A-rated) fixed-income instrument curve, while a locked-in original rate continues to drive interest accretion in net earnings; remeasurement effects flow through AOCI. - Deferred acquisition cost amortization moves to constant-level basis over the policy lifetime for all insurance contracts, replacing the historical proportion-to-premium method for traditional life contracts.

Analyst inference - Authorized direction: Revenues were lower than the prior-year comparative on both the three-month and six-month windows; Earnings Per Share, Diluted and Net Income Attributable to Parent were higher than the prior-year comparative on both windows, with each metric remaining in profit on both sides of the comparison (profit-to-profit transitions). - The quarter-over-quarter and year-over-year patterns can be compared against peer filings like CNB Financial Posts Higher Profit on Both Reported Windows or Community Financial System Posts Higher Revenue and Profit on Both Reported Windows for directional context only. - For readers modeling forward-year scenarios, the ROI Calculator can translate these headline EPS and revenue moves into return-frame illustrations using the user's own inputs.

Counter-evidence - The standard-update adoption is retrospective, meaning prior-period amounts on the face of the comparatives already reflect the new guidance; readers comparing to filings from before the transition date should expect presentation differences in deferred acquisition costs, future policy benefits, and the discount-rate methodology even where headline labels look the same. - Statutory capital and surplus, statutory net income, policy cash flows, and the underlying economics of the business are stated to be unaffected by the new requirements.

Unknowns - The filing evidence does not attribute this change to any single cause. - The filing evidence contains no peer or industry comparison. - The filing evidence does not disclose segment-level detail for this dimension. - The forward-year implications of the annual assumption-review requirement are not quantified in the cited note, and any baseline impact on margins or premium ratios beyond what is described above is not stated.

Operating drivers and segments

- Revenues for the three-month reporting period came in below the prior-year comparative for the same three-month window, based on the filed figures. - Revenues for the six-month year-to-date period were also below the prior-year comparative for the matching six-month window. - Beyond this top-line directional read, the filing evidence does not break out segment-level revenue, cost, or margin lines, so a segment-by-segment attribution to the decline is not supported here. - Management frames the interim filing as a standard Form 10-Q package prepared under U.S. GAAP for interim financial information, with normal recurring accruals applied and prior-period amounts reclassified only where recent accounting standards forced a presentation change. - Management calls out the adoption of the long-duration insurance contracts standard (the cited ASU update), noting a January the six months ended June 30, 2026 transition date with retrospective adjustment of prior periods so that both windows in the filing are presented on the new basis. - Management highlights that, under the new guidance, cash flow assumptions such as mortality, lapse, and expense will be reviewed at least annually and updated when actual experience diverges, replacing the prior lock-in-at-issuance treatment — a methodological change that the filing itself flags as material to how future policy benefits and deferred acquisition costs will trend. - Management also lists the areas it treats as particularly susceptible to near-term change: the value of derivative assets and liabilities, deferred acquisition costs and the value of business acquired, the liability for future policy benefits, the value of loans held for sale, and the loan loss reserve. - No part of management’s commentary isolates a single operating driver — for example, premium volume, investment income, mortgage origination mix, or claim experience — to explain the lower revenue print on either reported window. - Management cautions that interim results are not necessarily indicative of the full-year outcome, which limits how much weight can be placed on the half-year directional read in isolation.

The filing evidence does not attribute this change to any single cause.

Readers comparing this filing to peers should remember that the filing evidence contains no peer or industry comparison, so any cross-company read on segment mix, pricing, or volume has to be sourced outside this document. The directional gap between the two reported revenue lines is observable, but the filing does not authorize a specific driver story for it, and the long-duration insurance accounting change introduces a presentation effect that can move revenue and cost lines independently of the underlying business mix.

Cash flow and capital

- Reported facts (as recorded in 10-Q for SECURITY NATIONAL FINANCIAL CORP under accession 0001493152-26-036814, covering the six months ended the six months ended June 30, 2026 versus the six months ended June 30, 2025, with balance-sheet items as of the balance sheet date of June 30, 2026): - Net Cash Provided by (Used in) Operating Activities was $36,933,720 USD for the six months ended June 30, 2026 through the six months ended June 30, 2026 and $1,904,880 USD for the six months ended June 30, 2025 through the six months ended June 30, 2025.

- Net Cash Provided by (Used in) Investing Activities was $6,151,107 USD for the six months ended June 30, 2026 through the six months ended June 30, 2026 and -$72,442,859 USD for the six months ended June 30, 2025 through the six months ended June 30, 2025. - Net Cash Provided by (Used in) Financing Activities was $19,291,735 USD for the six months ended June 30, 2026 through the six months ended June 30, 2026 and $12,838,822 USD for the six months ended June 30, 2025 through the six months ended June 30, 2025. - Payments to Acquire Property, Plant, and Equipment were $496,501 USD for the six months ended June 30, 2026 through the six months ended June 30, 2026 and $884,076 USD for the six months ended June 30, 2025 through the six months ended June 30, 2025.

- Payments for Repurchase of Common Stock were $1,336,526 USD for the six months ended June 30, 2026 through the six months ended June 30, 2026 and $1,203,684 USD for the six months ended June 30, 2025 through the six months ended June 30, 2025. - Balance-sheet working-capital items as of the balance sheet date of June 30, 2026: Cash and Cash Equivalents at Carrying Value of $163,441,869 USD, Accounts Payable of $3,887,774 USD, Accounts Receivable before Allowance for Credit Loss of $18,576,720 USD, and Accounts Receivable after Allowance for Credit Loss of $17,030,422 USD.

- Management explanations: The narrative discusses adoption of new LDTI-style guidance (referenced as ASU guidance applied at a transition date early in the year) and a separate disaggregation-of-expenses ASU expected to be adopted in a future annual reporting period. Management states that the new guidance did not change cash flows on the Company's policies, statutory capital and surplus, net income under statutory accounting practices, or the underlying economics of the business, and that cash flow assumptions (mortality, lapse, expense) will be reviewed at least annually going forward.

The interim-reporting ASU is described as clarifying form, content, and disclosure requirements for condensed statements. - Analyst inference (only the year-over-year direction the catalog authorizes, never a cause): compared with the prior-year six-month window, Operating cash flow is higher, Investing cash flow shifted from a use to a source, Financing cash flow is higher, capital expenditures are lower, and share repurchases are higher. The investing swing combined with lower capex points to net portfolio inflows rather than reinvestment into property, plant, and equipment during the period.

- Counter-evidence and limits: no segment-level cash flow split, no parent-versus-non-controlling reconciliation of the balance-sheet working-capital items, and no receivables aging are provided in the cited evidence, so liquidity quality beyond the headline subtotals cannot be assessed from this filing. The narrative also does not reconcile the investing swing to specific asset-class activity. The filing evidence contains no peer or industry comparison.

- Unknowns: the precise drivers of the investing-activities swing, the composition of the financing-activities change (borrowing versus policy-related versus other), and any management target for capital return beyond the share-repurchase total are not stated. The filing evidence does not attribute this change to any single cause.

Peer and historical context

- The SECURITY NATIONAL FINANCIAL CORP 10-Q for period-ended-2026-06-30 (accession 0001493152-26-036814) frames a classic year-over-year setup: each headline P&L line and the year-to-date operating cash flow are shown against the matching prior-year window, and the authorized transitions all describe a move from profit to profit, never a flip into loss. - Read together, the six-month comparison is the more informative historical lens here. The reported lines cover a full half-year stack: top-line Revenues and Net Income Attributable to Parent for the six months ended June 30, 2026 against the six months ended June 30, 2025, supported by the authorized Operating Activities comparison for the same windows, plus the Financing and Investing Activities rows that the catalog authorizes me to call out directionally for the half-year. - Because the authorized transition for Revenues on both windows is a decrease, while the authorized transitions for Net Income on both windows are increases, the historical pattern to flag is divergence between the top line and the bottom line on a year-over-year basis — the kind of pattern a reader can sanity-check with ROI Calculator or with a longer-horizon tool like Social Security COLA Calculator when modelling the cumulative effect of lower revenue combined with higher profit. - The quarter comparison is narrower but consistent in shape: Revenues and Net Income for the three months ended June 30, 2026 against the three months ended June 30, 2025 repeat the same divergence (top line lower, bottom line higher) that the half-year shows, which strengthens the read that the divergence is not a one-quarter artefact but a feature of this filing's reported windows. - The Investing Activities comparison for the half-year is the one authorized transition that moves sign rather than magnitude — from negative in the six months ended June 30, 2025 to positive in the six months ended June 30, 2026 — which is a structural change in cash deployment distinct from the P&L divergence noted above. - The filing evidence does not attribute this change to any single cause.

- The filing does not provide any peer or industry benchmark, so there is no external reference set to test whether the revenue-down/profit-up divergence is company-specific or sector-wide. The filing evidence contains no peer or industry comparison. - The financing-side year-over-year moves (Financing Activities and the Payments for Repurchase of Common Stock line) and the capex line (Payments to Acquire Property, Plant, and Equipment) are authorized only as direction calls for the half-year, not for the quarter, so a quarter-level historical read on those items is not supported here. - The diluted EPS comparison is authorized for both windows, but EPS magnitudes sit outside this section's catalog, so any commentary on per-share level versus peers must wait for a section whose catalog carries it.

Scenario analysis

- In the base scenario, the reported financial picture for SECURITY NATIONAL FINANCIAL CORP in this 10-Q filing is unchanged: $163,654,828 and $83,926,048 sit below the prior-year comparables $172,280,872 and $89,541,149 for the six months ended June 30, 2025 and the three months ended June 30, 2025, while bottom-line profitability improves, with $15,983,123 and $8,981,697 running above $14,784,490 and $8,370,755 on each reported window. The filing evidence does not attribute this change to any single cause. - Reported facts: Revenues and Net Income (Loss) Attributable to Parent figures are stated in the consolidated statements relative to their prior-year comparatives. - Management explanation: The cited note describes a recent accounting-guidance change affecting deferred acquisition cost amortization for insurance contracts, with no impact on capital and surplus, statutory net income, cash flows, or the underlying economics of the business. - Analyst inference: The base case simply continues the mix already printed — lower top-line revenue paired with higher parent-attributable profit on both the three-month and six-month windows. - Counter-evidence: The cited note frames the guidance change as economic-neutral, so the divergence between lower revenue and higher profit is not attributed to the new standard. - Unknowns: The filing does not break out which revenue lines declined or which expense lines fell, leaving the segment-level mix within the base case unsourced.

- In the upside scenario, the disclosed revenue gap closes gradually while the profit uplift is preserved, leaving $15,983,123 and $8,981,697 above the prior-year comparatives $14,784,490 and $8,370,755 and a recovering revenue trajectory narrowing toward $172,280,872 and $89,541,149. The filing evidence does not attribute this change to any single cause. - Reported facts: Both periods print lower revenues and higher parent net income versus the prior year. - Management explanation: The cited note discusses the impending expense-disaggregation and interim-reporting standards, none of which are positioned as a near-term revenue catalyst. - Analyst inference: The upside does not require a new driver; it only requires the existing revenue gap to compress while the profit margin the company is already printing holds. - Counter-evidence: No revenue-growth catalyst is identified in the filing evidence, so a narrowing of the gap is an assumption rather than a stated outlook. - Unknowns: The filing does not provide forward guidance, so the speed and shape of any revenue recovery are not specified.

- In the downside scenario, the revenue shortfall widens and the profit cushion thins, with $163,654,828 and $83,926,048 falling further below $172,280,872 and $89,541,149 while the premium of $15,983,123 and $8,981,697 over $14,784,490 and $8,370,755 narrows. The filing evidence does not attribute this change to any single cause. - Reported facts: Revenues are lower on both windows and parent net income is higher on both windows; the gap is the only thing being stressed. - Management explanation: The cited note on recent accounting pronouncements notes the company is still estimating the impact of the upcoming expense-disaggregation standard, leaving some uncertainty on the cost side. - Analyst inference: A downside turn would emerge if revenue weakness deepens before the higher profit margin can be sustained. - Counter-evidence: The cited insurance-guidance note states no change to the underlying economics of the business, arguing against a structural worsening. - Unknowns: The filing does not identify a downside trigger, so a specific cause of further deterioration is not stated.

Risks and what to watch

- Counter-evidence against the bottom-line story is essentially absent in the cited evidence. The same filing that authorized a profit-to-profit transition for the quarter and the six-month window also authorized a higher net income on each window versus the prior year, so the reader should not interpret the cited quarter as a directional pivot away from the year-to-date improvement. At the same time, the top line tells a different story: revenues are lower on both the quarter and the half-year window than in the prior-year comparative, which is the principal counter-signal in the filed facts.

- Reported facts versus management framing: the issuer disclosed revenues of $83,926,048 for the three months ended June 30, 2026 and $163,654,828 for the six months ended June 30, 2026, against prior-year revenues of $89,541,149 and $172,280,872, with the filing authorized only to characterize those moves as decreases with no single cause attached. Net income, by contrast, was $8,981,697 for the three months ended June 30, 2026 and $15,983,123 for the six months ended June 30, 2026, both higher than the prior-year $8,370,755 and $14,784,490.

Management did not, in the cited note, reconcile why a smaller revenue base supported a larger bottom line, and no peer or industry comparison is supplied. - Analyst inference, kept narrow: the divergence between shrinking revenue and expanding profit is the central tension a reader should flag. Without a disclosed driver, the only honest framing is that operating mix, expense timing, or investment-related items could account for the gap, and the cited evidence does not adjudicate among them.

The filing evidence does not attribute this change to any single cause. - Unknowns and disclosures that were not supplied in the cited note: the breakdown of revenue by line of business, the size and direction of any fair-value move on the available-for-sale portfolio summarized in the schedule of investments, the effective tax rate, and any segment-level contribution to net income. The schedule heading references amortized cost, unrealized gains and losses, an allowance for credit losses, and estimated fair value, but the cited narrative does not produce those figures for the reader.

- Risk-factor and procedural items noted in the filing appear under Item 1A and the controls and procedures discussion under Item 4, while quantitative and qualitative market-risk disclosures sit under Item 3 and exhibit signatures under Item 6; none of those sections, as cited, supplies a quantified exposure estimate for the reader. The filing evidence does not attribute this change to any single cause. - Next-period metrics to watch: the absolute level and mix of revenues on the next quarter and on the full-year reporting cycle, whether net income remains higher year over year on each window, the trajectory of unrealized gains and losses on the available-for-sale portfolio relative to the cited amortized-cost basis, and any disclosure triggered by the pending expense-disaggregation standard adoption referenced in the cited note.

Readers modeling the next window may find it useful to sanity-check assumptions with Social Security COLA Calculator for any inflation-linked income assumption embedded in projections, though this is a general modeling aid rather than a Security National Financial disclosure.