Security National Financial Corp (SNFCA) June 2025 Annual General Meeting Transcript

uh people here at the head table i would direct your attention to the screen if we could advance that one please as to someone who is not at the head table having passed away this year what yes and so if we could just take a moment and uh i was going to read it out loud but just soon y'all read it for yourself um uh and just a little in memoriam of uh of mia love thank you uh with that uh mia will be missed mia will be missed with that i will introduce our board and executive officers we'll start with alexander my sewer to the want to make sure the The slides are coming up correctly. She's been a director of the company since 2021. That means four years for those who are counting. Founder and chairperson of Mysore Industries, a multinational conglomerate, involved in manufacturing, e-commerce, media, trading, and investments. Bachelor of Arts degree from the University of California at Berkeley in interdisciplinary field studies. mia has been a great member and a welcome addition to the board as she attempts to bring us into maybe even just the 20th century at this point but the 21st century she is all things all things dot com and and uh uh e uh technology related next to mr next to miss my sewer we have mr john cook oh i'm sorry i didn't me uh excuse me alexandra serves on the nominating and corporate governance committee the compensation committee and the audit committee mr john cook he's been a director of the company since 2013. he's a co-owner and operator of cook brothers painting he attended the university of Utah. He's on the nominating and corporate governance committee, compensation committee, and audit committee. And I will take a moment to say why we asked Mr. Cook to be a director from my point of view. As I mentioned, Alexandra's strength. One of the things we do is a lot of construction lending and a lot of that occurs in utah i would suspect we have as of today maybe between 150 to 200 million outstanding right now in construction loans and mr cook being in the trades business uh we i thought it would be nice to have a little ear to the ground and listening to the uh what the other trades are saying who pays who's not paying who's behind, who's ahead, all that sort of thing. Mr. Cook has been invaluable as we have proceeded down those paths. So thank you, Mr. John. Next to Mr. Cook is Mr. Gilbert Fuller. He's been a director since 2012. He retired from USANA Health Sciences, where he was the chief financial officer and the executive vice president. He has a bachelor of science degree in accounting and an MBA from the University of Utah. Mr. Fuller serves us on the Audit Committee Chair, the Compensation Committee, the Executive Committee, Nominating, and Corporate Governance Committee. And Gil is expert, in my view, in maybe all things, it's a bit of an overstatement, but in things SEC-related and compliance-related, and has undertaken the yeoman's task as we convert this year to long-term, let's see, LDTI, long duration targeted improvements, which basically means that we'll be revaluing our reserves at year-end to reflect more current interest rates, and that will be an ongoing process. And I appreciate Mr. Gill's work on that behalf, getting off the ground in the first place, and then it'll be interesting to see how it folds, unfolds. Let's see, when Mr. Gill joined the company, when Mr. Gill Fuller joined the company, our asset base was $517 million and our owner's equity was $79 million. Today, our owner's equity is, using rough numbers, $340 million and our asset base exceeds a billion and a half. So Gil has been here during remarkable growth from my point of view. Next to Mr. Fuller is Mr. is Dr. Robert Hunter. He's been a director since 1998 for 27 years. He's chairman of the Board of Governors of the St. Mark's Surgical Center, adjunct assistant professor, Department of Surgery at the University of Utah. He's past department head, now I really worked on it again and this year, otolaryngology, the best I've done. Progress, progress. Head and neck surgery at Intermountain Medical Center and the past president of the medical staffs of Intermountain Medical Center in Cottonwood Hospital. He has Bachelor of Science degrees in microbiology, biochemistry, and an MD degree from the University of Utah. He is, at the end of the day, in the life insurance side, we underwrite medical risks, right? We give a promise, we collect premiums based on that promise, and then we will pay the death claim when that occurs. And what you don't want to have is what is called anti-selection or a bad selection of risks. Mr. Hunter was key in identifying our, I don't know what Dr. Roberts' title is. It's medical director, I believe, but was key in having Dr. Roberts come and was also key during the pandemic as he could give perspectives as to what we were seeing and what we could expect to see as we move through that period of time. There's more that I'm going to talk about Dr. Hunter in just a minute, but because he is a little closer related in time to Mr. Craig Moody. Our next director, Craig serves on the Compensation Committee, the Nominating and Corporate Governance Committee. He's the Nominating Corporate Governance Committee Chair. He serves on the Audit Committee and the Executive Committee. Craig has been a director since 1995, so for 30 years. So he and Dr. Hunter are neck and neck, so to speak, for an overrun, let me try to say that again, an otolaryngology fellow. That's, anyway, wasn't that funny, I guess. Craig, let me go through his bio, and then I want to talk about what the perspective is that this microphone keeps going down. Am I being able to be heard? And if I put it there, it's, well, let's try tightening this up. Okay. Thank you. I lost track of where I was, but Mr. Craig Moody, director of the company since 1995, president of H.C. Moody and Associates. He's a former speaker of the House of Representatives for the state of Utah, former majority leader, former rules committee chairman, and for an executive appropriations committee member of the utah house of representatives when i look back and people will say well geez why do you keep these directors on so long and i think that's a valid question it's because of the perspectives that we've been able to that they have which in my view many times can only be gained through time for example If we start with, let's start with the numerous acquisitions. I'll go back to 2007. In 2007, we needed to increase our asset base because we had been taking back loans from Lehman Brothers who had declared bankruptcy. So we had to take them back. and we were frankly very close to violating our covenants on a number of areas. And I thought the easiest way to get into compliance would be to grow our asset base. It wasn't practical in 2007 to sell those loans, at least not without taking substantial losses, but I thought they were good loans. I thought they were a pain, and even if they weren't paying, I thought we could put renters in there and they would be paying. The curious thing when we took all those loans back in 2007 was that about a third of them already had renters in the house. We just weren't being paid those rents. But it was a time of turbulence where steady hands allowed us to prosper. Many people said, well, geez, you've got way too much real estate, way too many loans, blah, blah, blah. You're making a mistake. and about four years later in 2012 they said geez that was brilliant that was really smart you guys knew what to do and i credit a lot of that to our board of directors then you think about other things uh the uh i'll go to the lehman settlement which is in 2020 this was a uh for many years we had a going concern question on the mortgage side because of the lehman lawsuit they were asking damages of hundreds of millions of dollars and in 2020 as i recall was it there was at the beginning of 2021 maybe i could ask mr stevens if he remembers the dates but it's uh anyway lehman had said that we had given that we had sold them uh loans that were not uh compliant uh our rebuttal was we had not um and we had been in that fight since 20 2008 give or take 2009 so roughly 10 to 11 years and it was coming to a head in 2021 and came to that day where we could either settle with Lehman or fight because the trial was going to be the next week and we were at that point and I appreciated the perspectives that the entire board could give to include Dr. Hunter and Mr. Craig Moody, which allowed us, which instructed, which saw us through to the path of settlement, and we settled, I think they were claiming, I don't know, Jeff, in the neighborhood of 200 million dollars in damages and i think we settled for uh that 20-ish so it was a uh but it was a long process and it was a process that was fraught with uh a need for good uh decisions um also we had a derivative i'm just saying why i like having directors on board in And in 2020, excuse me, in 2002, while we were building our asset base through the numerous acquisitions I mentioned, we purchased one company, a publicly traded company called Southern Security Life. The shareholders who were not bought out immediately brought a derivative action lawsuit. We settled that at very modest amounts. The only point I'm trying to make is that these directors are battle-hardened and are experienced, and I value that. So I thank you to this side of the room. I haven't gotten to that side yet. They're all a little younger. Well, and Alexander, you weren't there, but I'm going to include you anyway in that. Let's go to Mr. Jason Oberbaugh. This would be going in a circle. Vice President, National Marketing Director of SNL. He's on the Medical Committee. he's been a director of the company since 2013 vice president national marketing director of security national life insurance company since 2006 he has a bachelor of science degree from the university of utah next to mr jason to his right would be andrew quist he's been a director of the company since 2013 vice president of the company since 2010 general counsel since 2017 and since 2022 has been president of Security National Mortgage, which has been a very unenviable job for the last three years. So for anybody in the mortgage business, I see Mike, I see Tim, anybody I'm missing, Mr. Andrew, if you could stand up, let's give them a round of appreciation because that has been a yeoman's work. that has been a yeoman's work and people will say well you know whatever that's what they get paid for uh to be in a declining rate market i mean but substantially declining like 30 percent down 30 down 30 down continually and you're continually having to right size the operations and you're having to make those hard choices of which people to keep and which people not to keep and what processes we can implement with a reduced staff those have all been born by andrew and his team um let's see and also i should thank jay uh well i'll talk to jamie in just a minute i'm one more um right seated to mr andrew quist right is adam quist he's director of the company since 2021 general counsel since 2017 president of security national life and he is president of security national life insurance company memorial cemeteries and mortuaries since december 2023 Vice President of Memorial Cemeteries and Mortuaries since between 2015 to 2023. He has a Bachelor of Science and a Master's Degree, a Master of Science Degree in Accounting from Brigham Young University, and a Juris Doctor degree from the University of Utah. Adams serves as President of Security and National Life at Memorial Cemeteries and Mortuaries. He's on the Executive Committee. he's vice president of the corporation assistant secretary and general counsel on the 401k committee to mr adam quiss right is mr garrett sill chief financial officer treasurer of the company since 2013 he's a certified public accountant a ba degree in accounting from weaver state university and an mba from the university of utah it's safe to say that Garrett grew up in the business and gives us unprecedented accounting insights having started on the mortgage side and then having had responsibility in the last 11 years for the life insurance side. Jeffrey Stevens to Mr. Garrett's right. He's senior general counsel. You've heard of the general counsel, but he is senior general counsel of the company since November 2006. Secretary of the company since 2008. He has a BA degree in geography, of all things. I've often puzzled over that. JD degree from Brigham Young University. There are other people that I would like to mention. I would like to single out a couple. Dane Johansson from our Securities Council from Par Brown, Gee, and Lovelace. We have Wes Yeomans and Andrew Smith from Deloitte and Touche. So many questions about the numbers, go talk to them. There's a couple of other people I would like to recognize. I would like to recognize Mr. Jamie Meredith. Mr. Meredith is in town. Mr. Jamie is is is has responsibility operating responsibilities for our funeral funding and his little group what do you have maybe 105 employees in Rainbow City Alabama and through that little group they process 55,000 last year maybe you'll get to 60,000 this year funerals being providing the funding for those funerals. The reason for recognizing Mr. Jamie, besides his striking good looks, is when Mr. Andrew was asked to take over responsibilities for Security National Mortgage that left a void at CNJ Financial, which Mr. Jamie had to fill. And so my thanks for filling that well i thought you'd it's the best year ever right uh we also have uh in the audience with us today uh those of you who have read the press releases know that i've been talking about uh how we have been um improving our people and adding capacities with skilled people i'd like to have mr wade bone stand up mr wade let's give him a little So, Mr. Wade, I'm just, actually, I don't even know what your real title is, but I'm going to say, in my view, he's responsible for leads, which is a huge responsibility because all our agents, they love leads. If you don't have someplace to go, you're out of work, right? and mr wade's job which he accepted in october was in october so you're coming up on uh eight nine months with us um uh it just adds so much capacity as we try to drive sales growth though we're glad to have we're glad to have wade um also we'd like to recognize Miss Heather. Where was it? I thought Heather was here. Oh, next to Jamie. She's head of our HR. She's someone else who stepped up two years ago. Is that three? Three years ago when I asked her to, she was getting ready to be terminated by someone who was not pleased with her activities, and i was very pleased with her activities and she stayed and took uh and and accepted the responsibility for our human resources been a very valuable addition there are others who i'm sure who i should uh mention that i'm not seeing right now we see i see i see christy we should say let's have christy and cody stand up cody's there just they they head our uh rocky mountain is that we call or Rocky Mountain West region. Close, it's kind of a mountain in there. Anyway, Christy joined us three years ago. And Cody joined us forever ago. But they have been showing our mortgage regions. I think we have five regions and six regions. And they have been showing the way this year towards profitability. We're very pleased with that. last i should recognize lisa quist she made it this year uh last year she slept in didn't make it but she's here my wife i'm grateful to have her here and her support with that as chairman of this annual annual meeting of shareholders i hereby appoint richard doll kevin cantwell i think i saw Kevin. Kevin, I think, is feeling under the weather, but glad to have him serving, and Lori Earl to serve as members of an attendance and balloting committee, and I appoint Mr. Richard Dahl as the chairperson thereof. If there is anyone desiring to vote in person, you should have already registered your name and received your ballot. If you have not, please register with Mr. Dahl. Mr. Richard, could you stand up so everyone could, Mr. Richard Dahl. I hereby appoint Jeffrey Stevens to act as the parliamentarian of the meeting. In order to conduct the meeting in an orderly manner, I would ask that all questions from the floor, other than specific questions relating to a motion being considered, be limited to a general question session that shall follow my report. Accordingly, at that time, so that all stockholders will have an opportunity to participate, each individual shareholder will only be permitted to ask one question at a time. When that question has been answered, the stockholder who has asked the question must then relinquish the floor to any other shareholder who desires to ask a question. Any questions that relate to items personal or unique to the stockholder, such as regarding the share zone, mortgage properties, pre-need cemetery, mortuary products, or any of a number of issues should be held until after the meeting. at that time i i can direct you to the appropriate officers i would now like to call upon mr jeffrey stevens secretary of the company to report to the stockholders on the formal steps taken in connection with the calling of this annual meeting of the stockholders and to present evidence of the giving of the necessary notices mr steven yes sir mr chairman our board of directors adopted a

resolution authorizing that the annual meeting of stockholders be held today June 27, 2025 at 10 o'clock a.m. in Salt Lake City, Utah and to fix the record date for the meeting as the close of business on April 21, 2025. Representatives from our transfer agent Science Bank are available at this meeting with a listing of all stockholders and their addresses. As of the record date of April 21, 2025, there were 20,312,360 votable shares of Class A common stock and 3,317,547 votable shares of Class C common stock for a total of 23,629,907 votable shares of the company's common stock outstanding. Accordingly, under the bylaws of the company, 11,814,954 votable shares are a majority of the outstanding common stock and constitute a quorum for this meeting. I have provided a certificate executed as an officer of the company certifying that notice and instructions regarding voting were duly and properly sent on April 29, 2025 to each holder of class A and class C common stock entitled to receive notice thereof.

Thank you, Mr. Stevens. I would direct the Secretary to file a copy of the minutes of this meeting, together with the certificate evidencing the service of notice. The Attendance and Balloting Committee has been asked to make a report of the stock represented here, either in person or by proxy. Will the committee please report?

Mr. Chairman, the attendance and balloting committee reports that shares of both the Class A outstanding common stock and the Class C outstanding common stock representing more than majorities of such shares are present either in person or by proxy.

Thank you, Mr. Dahl. Since the quorum has been established, we will proceed with the business to be conducted at this meeting. Anyone desiring to vote in person, please identify yourself by raising your hand. And seeing done, seeing none, we will proceed with the matters of the meeting. Copies of the minutes of last year's annual meeting of the stockholders are available for any stockholder to read. We would entertain any question later in the meeting with respect to those minutes. At this time, the chair will ask for a motion to dispense with the reading of the minutes, or if you wish to punish Mr. Dahl we'll read the minutes or Mr. Stevens I'm not sure which one but uh the chair would entertain a motion to dispense with the reading of the minutes Mr. Chairman I move that we dispense with the reading of the minutes of last year's annual meeting of the stockholders do I have a second thank you it's been moved and seconded that we dispense with the reading of the minutes of last year's annual meeting the stockholders all in favor signify by saying aye opposed nay the motion is carried oh looking at my script it was jeffrey stevens who was relieved of the burden of reading the minutes the chair knows of no old business pending and accordingly we will open the floor for new business proposal one by direction of the board of directors of the company, the following nine persons have been nominated to serve as directors of the company until the next annual meeting and until their successors are elected and qualified. Mr. Scott M. Quist, myself, Mr. Robert G. Hunter, Mr. Jason G. Overbaugh are all to be elected by the Class A directors. Alexandra Mysore, S. Andrew Quist, John L. Cook, H. Craig Moody, Gilbert A. Fuller, and adam g quist to be elected by the class a and c shares voting together those of you wishing to vote in in person if any please raise your hand seeing none we'll proceed to propose to motion number two or proposal number two on the ballot the chair will now entertain a motion to approve the amendment to the company's 2022 equity incentive plan to authorize the additional the issuance of an additional 3 million shares of class a and class c common stock out of which a maximum of 500 000 shares of class c common stock may be issued i have a motion do i have a second it has been moved and seconded that the amendment of the company's 2022 equity incentive plan to authorize the issuance of an additional 3 million shares of class A and class C common stock, out of which a maximum of 500,000 shares of class C common stock may be issued as contemplated by the company's proxy be approved. I don't believe anyone is desiring to vote in person. If they are, please raise your hand. We will now move to proposal number three. Excuse me. The chair will now entertain a motion to ratify the appointment of Deloitte and Touche LLP as the company's independent registered public accountants for the fiscal year ending December 31, 2025. Do I have such a motion? Mr. Chairman, I make the motion to ratify the appointment of Deloitte and Touche as the company's independent registered public accountants for the fiscal year ending december 31st 2025. i second that motion has been moved and seconded that the appointment of delight and two shell lp as the company's independent registered public accountants for the fiscal year ending december 31 2025 be ratified anybody voting desiring to vote in person please raise your hand that will conclude the voting portion of our meeting, we'll now go to the report portion of our meeting. Reports will be given in this order. First, we'll have Mr. Garrett Sill, the financial, chief financial officer and treasurer. He'll be followed by Adam Quist, then by Jason Overbaugh, then by Jamie Meredith, then by Stephen Keel, then by Andrew Quist, then by Scott Quist. I don't think I took the opportunity to recognize a couple of more. Did I recognize you, Steve? I should have. I should have. I'm sorry. Mr. Stephen Keele joined us, stand up, Steve, maybe two-ish years ago, maybe not quite two, and has been a welcome breath of great fresh air into our cemetery mortuary site and has dug in and I appreciate the efforts of Steve and really I should recognize Emily's wife because I keep getting reports that she does more than Steve does and that's not a reflection on Steve's efforts that's a reflection on Emily's efforts I also don't believe I recognize Thane Mr. Thane Atkinson our chief our CIO chief information officer and saying that's been how many years 26 thank you oh so then what i was to

mr stephen keel he'll be followed by and request on the mortgage company and then i will take questions as the president let's go to uh we'll proceed in that order without further ado mr garrett thank you mr chairman um i think the first order of business is to uh make sure that we have proper um recognition for those that give the reports in the years past i think for the last 13 years i've always given a report i'm usually first i finish my report my wife claps for me and that's about it and then everyone after that gets a round of applause after they finish and i've having to explain to my wife why no one claps for me so i think the order of business this is when we're done. Each presenter should receive some sort of applause. I'm hoping that someone other than my wife will clap for me. Alexandria usually does as well. But thank you, Mr. Chairman. On behalf of the company, I'd just like to once again welcome our shareholders and particularly our employees. I know there are several here in this room, but there are even more that are at their desks continuing with their their duties for the day and working through and I appreciate them attending to that. But grateful to be here to give a report. I'll jump right into it. From my perspective, 2024 was a good year for Security National Financial Corporation. That really depends on how you compare it. If you compare it to 21, it wasn't a very good year. It was down significantly. If you compare it to 2022, we were just slightly above the earnings for that year. But if you compare it to 2023, 2024 was a tremendous or even an excellent year for us. If you look at our four-year average for earnings, we've averaged about $27 million as our four-year average. So 2024 came right on point as far as where we're at. So it was a good year for Security National. Talking about just a couple things real quick on it as we look at our segments as it relates to the earnings. If you look back in 2021, you can see that dark blue section of that bar graph. That's the mortgage company. In years prior, the mortgage company was a significant contributor to the net income of the company. And as we kind of progress through 2022, a little bit less, and then 2023 and 2024, the mortgage company, as Scott alluded to, has a lot of headwinds. Well, we're grateful that we have some three distinct business segments, both the life insurance and the cemetery mortuary side were able to take advantage of those markets, even though the headwinds of the mortgage market and make larger contributions to the net earnings of the company. I thought this would be good just to take a quick look back. As I kind of alluded to in the first slide, you know, it really depends on how you judge a year, depending on what you want to compare it against. I looked at this with a few individuals in the past, but if we look at a five-year history, so going back 20 years, in 2005 to 2009, that five-year block, we averaged on an annual basis $3 million in net income or $15 million for that five years. Fast forward another five years for the period of 2010 to 2014, we averaged $7 million in net income a year or for a total during that block of time, $35 million. And you can kind of do the math going forward. The following five years, 2015 to 2019, $14 million in average net income each year for a total of $70 million. And then we look at these last five years, we've averaged $32 million in annual earnings or for a total during that five-year period of $160 million. So tremendous growth over the last 20 years of the company as scott alluded to as he mentioned some of the equity and asset numbers for the company but the last five years has has been tremendous growth for the company i think we're really pleased with uh with where we're at um revenues tells a little bit different story uh once again looking at our four-year average we average about 378 million in net revenue or sorry in revenues uh you know 21 and 22 showed a little bit of a downward trend but i'm i'm excited to see the 23 and 24 kind of started that upward trend and and uh we're we're looking forward to improving upon in 2025 what we did in 2024. looking at equity scott mentioned this briefly but in 2021 we rounded off just just shy rounded up to 300 million in equity for security national financial we ended up 2024 at 339. That represents about a 13% increase over that five-year period. So pretty good on an equity side of things for us. Asset base, not really thrilled the way this chart turned out. We're only down 4% or $60 million in assets, but if you looked at the bars, it looks like to be a little bit more than that. I'll have to fix that. It's pretty much flat for us, but that really is a result of just lack of borrowings due to lower mortgage originations, and we kind of see that our assets and liabilities will go up and down depending on how much we do in mortgages. Real quick, talking about our investments. We've alluded that to this in the past, we have a lot of investments. Scott said that we ended up at $1.5 billion in total assets. We have about $1.2 billion of those assets invested. Sometimes I get asked, well, what's up with the other $300? They're not really investments. Those will be some receivables, which we wouldn't consider an investment. There'll be some prepaids and some other things in there. But comparing 2021 to 2024, our invested assets have remained pretty flat. But there's been a pretty significant change in how those are viewed. I'd like to highlight just this one right here. This is our mortgage loans held for sale. You'll notice if you compare that piece of the pie compared to 2021, we've had, oh sorry, that's bonds. I want to go up here, sorry. This one here, 11 and 24. So these are our mortgage loans held for sale. These are the originations by the mortgage company. In 2021, we had 24% of our assets invested in those. We have had a 13% decrease. So what have we done with the cash in that decrease? Well, going back to this, you can see we've increased our bonds about 9%. We went from 21% to 30%. And then we've also had a 1% increase. This little piece of the pie here is what Jamie Meredith is in charge of. He was able to grow that by a by a full percent or 12 million and then we are holding to round off a little more cash and then this one here is up two percent and that's our mortgages that we hold in in-house by the company that's predominantly construction lending as scott mentioned we have a lot of uh originations and construction lending so all in all even though in invested assets are flat i'm glad that cash wasn't up more uh it was up just like i said that one percent or 12 million but we feel pretty good where we're at. Jumping now to the first quarter earnings, what I said about 2024 for year end can be said about Q1. It was a good quarter for us. That all depends too on how you want to look at it. If you compare us to Q1 of 2022, we surpassed that. That was good. If you look at 2023, much better than 2023. 2024, we were down slightly, so not as good but as scott alluded to in our last company press release sometimes our earnings because we're heavily invested in in real estate mortgages and constructions sometimes our earnings become a little bit lumpy not everything flows through on a regular basis like it does for bonds and sometimes even the stock market q1 was a down for the stock market uh if we were to close out today i think we'd see a swing in our net investment income at least from our stock because when I came down, the stock market was doing pretty good. Just want to finish up with just a couple things real quick. We talked about this last year and two years ago. Two years ago, we were in the Russell 3000 index. Last year, we were out. This year, we are in again. The cutoff for membership this year was $119 million in public float. Last year, it was $150 million. The company's public float as of rank day, which was last Friday in April, was actually $250 million. So in years past, we were kind of in or out just barely. This year, we were in by a long shot, almost $140 million. Today is their reconstitution day, which means this is when those that have the Russell 3000, one of the indexes is part of their investment strategy, they will rebalance. So today, at the close, and throughout the day, we should see a lot of activity on the company stock. This will be probably the single most traded. Our stock will have the largest increase in trading today as any day of the year. I think last time we did the Russell 3000, it was like a million two shares. And historically, we trade about 40 to 50,000 annually. A couple other items just to follow up on. The board, several years ago, approved a stock repurchase. In the last five years, we've repurchased about 705,000 Class A shares in the open market for an average of about $141,000 a year. So that is going well, as the board directed. And then just finally, just two things to look forward to. And these are big things. This is the nerdy, geeky accounting stuff. But we did implement at least one ASU. ASU stands for Accounting Standards Update on how we report our segments. That was in 2024. for. The purpose of this change in accounting was just to bring parity to how public companies report their business segments. Prior, we reported pre-tax. This new segment requires after-tax reporting for the segment. So there's a little bit of lumpiness in there in how we've reported, and we'll continue to report on our quarterly earnings, both pre-tax and post-tax. And then, And as Scott mentioned in talking about GIL and kind of overseeing the LDTI, which is Long Duration Target Improvements for our life insurance companies, you'll see this ASU 2018-12, it's almost seven years old, and it's taken a long time to get this implemented. this is the year for us. And so Q3 will put in our statement a range of impacts that it will have on our company. And this range of impacts will affect our equity, our other accumulated comprehensive income. So that's something we have looked forward to. And I'm sure we'll be talking about this a little more next year. So just real quick in summary, from my perspective, of 2024 was a great year. I know I said good, but I really think given everything that the company faced, it was a great year for us. We had a very good Q1, and we're looking forward to a better Q2 and an even better 2025. So, Mr. Chairman, that completes my report.

Thank you.

Good morning. My name is Adam Quist, and as Scott said, I'm president of our life insurance companies. um presenting along with me today will be mr jason overbaugh who is our uh vice president board of director and then also serves our national marketing director it's my pleasure today to be presenting on our life insurance companies i will be presenting some financial data and then some operational updates and then i'll turn the time over to jason who will um report on our first year sales data and then our construction lending and home builder update, which is an area of significant investment for our life insurance companies. I wanted to start out, as I've done in the past, with what we do and why we do it. What we do is we fund small face value policies, the primary purpose of which is to fund a funeral or a person's funeral expenses. I'd like to make really two main points with that. One is that these products we sell are not interest rate sensitive, generally speaking. Our policyholders are not looking at this as an investment vehicle. They are looking at it as if they have purchased a product that will fund their funeral expenses. What that does for us is it creates a very stable asset base for us, which creates a competitive advantage for us as a life insurance company, in my opinion. And the second thing I would note is that I think that we are serving an underserved community. This is a product that's really designed to serve, for the most part, a very blue-collar demographic. demographic. And I think that's something that we as a company should be proud of stepping into that marketplace. Next, I want to discuss our purpose. Our purpose is threefold, in my view. Our purpose is to protect our policyholders, our shareholders, and our stakeholders. Now, the note I wanted to make on this was that, in my view, the best way to protect all three of those groups is by having a financially strong and profitable company. And so to me, profit is core to the very purpose of Security National Life. And so we take a very deliberate strategy towards growth and profitability. So with that, let's take a look at the profitability of our company. In 2024, four, we earned $31.4 million, which was a 25% increase or $6.2 million increase over the prior year. And that was actually our best operational year in company history. So I think that's something that all of our companies should be proud of, that we were able to accomplish our best operational year in company history. How we accomplished that is we increased revenues by 3%, which was made up by an increase of 4% in our premiums, while our investment income was up 1%. Our total policy benefits, which I should note, includes both the current portion, the benefits we're paying out this year, and the future portion, the piece that we're setting aside. For simplicity, I combined those for this presentation today. Those decreased by about 1%. I would point out, though, that the current portion of those benefits compared to 2023 was actually down about 3% compared to 2023, which really took our death claims or policy benefits in line to pre-COVID trends that we have expected to see. And our total sales in general and administrative costs were up by 1% compared to 2023, which is something that we felt very good about given the macroeconomic backdrop that we were in in 2024. So, again, I think 2024 was a fantastic year for our life insurance companies. um now looking at q1 2025 uh we earned 5.3 million compared to 8.5 million so we are down 3.2 million dollars or 38 from the outset i will state that it is never our goal to have a decrease in gap earnings so we did not achieve our goal of growth in q1 2025 having said that i think there's a lot of nuance and context behind these numbers that I think needs to be understood in order to have a, in my opinion, an informed and educated opinion on the company's performance during the first quarter of 2025. First, I'll go over these kind of macro trends in our company on a very high level, and then we'll dive into each one in a little more depth. So as you can see, our revenues decreased by one percent. That was made up of our premiums being roughly flat while our net investment income was down three percent. Our total policy benefits, those remained roughly flat and again that is comprised of both the current portion of those benefits and the future portion of those benefits. And then our total sales, general, and administrative expenses increased 15%. I'd like to now step through each of these in more detail starting with the premium which were roughly flat. The context that I think is important to understand in this particular item is that over say the last 18 to 24 months we have strengthened our premiums in every single one of our distribution channels. Some of those increases have been in the low single digits but the majority of those increases would be in the high double-digit increases. Anytime you're increasing premiums by those amounts, I think you're going to cause disruption in our sales force, and we certainly experienced that. But I think it was important to do these premium adjustments in order to recognize the margins that we needed to have on our premiums. The point that would be of interest, in my opinion, on this is that if you think about a life insurance policy if you increase the premium the risk of death of the underlying policy holder does not necessarily increase in in proportion to those increases or at all and so we believe we have significantly increased our margins on our life insurance products over the last 18 months but by strengthening those premiums it did create some disruption to our sales force um i'd also point out that it's going to take time for many of these premium increases to fully show up in our gap results the reason for that is uh just the nature of a life insurance company uh first i would like to make the disclaimer this is not necessarily uh representative of company data but this is illustrative and i think it gives a very good idea of our company in our company the premiums are set at the time we sell the policy so by and large we cannot go back and adjust the premium rates for any policy that we've sold in the past so in this chart you'll see each figure represents a policy currently about five percent of our block of business would be on the increased or strengthened premium rates the new premium rates if you fast forward seven years, we believe that about 50% of our business will then be on the new or strengthened premium rates with increased margin. And then if you fast forward to about 25 years from now, we think about 75 to 80% of our block of business will be on the increased premium rates. So again, these premium rates take time to layer into our business. So what is my point in all this? my point is simply that we have made decisions over the last 18 to 24 months that have caused short-term disruption. It just has in our sales force. But in my view, those decisions were necessary to set our company up for long-term growth and long-term financial strength. And so that, I think that context is important to keep in mind as you evaluate our first quarter results and as you look at Mr. Jason's presentation later today. now returning to this slide so we've we've covered our premium as being roughly flat now I want to go over the other items namely net investment income policy benefits and SG&A if you look at our net investment income it was down about 700,000 or three percent The context I would provide there is that we had a $900,000 decrease in our unrealized common stock portfolio in the first quarter. I would characterize us as long-term holders of equities. I would point out that these are unrealized common stock gains or a decrease in those gains. And so we have not liquidated those positions in the first quarter. those are unrealized losses. But that is the entirety of our decrease in our net investment income. And so we are similar to any other company that has exposure to the market. As the market undulates, we will be exposed to those increases and decreases. Next, I wanted to look at our policy, our total policyholder benefits, which were roughly flat when you look at both the current and the future portion but i would point out that the current portion which is the benefits we're actually paying out was up by about four percent compared to uh 2024 and anytime your your policy holder benefits is up in the current portion that is going to create a headwind on earnings um but i also believe that and history proves out that those benefits will uh increase and decrease over time there'll be uh statistical variations but we believe that our business is operating exactly as we would have expected it to. And lastly, I want to talk about our SG&A expenses, which were up by about 15% or $2.5 million. The first tranche of that comes from personnel costs, which were up about $1 million. I'll return to this to talk about it in more detail in our next slide. But for now, I just want to point out that in my opinion this is an investment in our company and in our workforce and like any investment that investment can only be judged over time. You cannot simply judge the investment in one quarter. The second thing I would point out is that or the second thing I would point out is the reason for a 15% increase in our SG&A is our deferral of commission expense expense was about 900,000 in Q1 of 2024 pursuant to actuaries evaluate the pe business and readjust as a periodic basis. And so, they actually went through as a result, we deferred less of commission than w year. But I would note ou an assumption change, not a change in actual business performance. And lastly, before I return to the personnel costs, is that our bad debt expense increased $700,000. Now, the majority of that comes from what's called CECL or current expected credit losses, which is a gap tool, I guess is the best way to put it, where GAP tries to estimate the expected losses of any investment. Now, the reason our bad debt expense was up in q1 2025 compared to 2024 is in 2024 we actually had a release of bad debt expense that was required to be posted under cecil which was not present in 2024 we did not have those releases um so i will leave it to you to decide whether you think uh cecil is uh an accurate or meaningful measure in terms of investment performance but that is a formulaic number and that is not necessarily indicative of the current performance of the investments which again i would note can only be judged over time similar to our other investments now i wanted to return and end on that million dollar increase in personnel costs There's several reasons for that, but again, at the highest level, I would characterize it as an investment in our company. The first thing I would like to comment on is that it's simply a market reality that we have to keep up with market rate compensation, and so a large portion of that increase was adjusting our compensation rate so that we are competitive in the market so that we could retain our talent, which we believe is imperative to continue to have a financially strong and profitable company. But there's several new initiatives that we've been rolling out over the last, say, 12 to 18 months that simply take time and effort, and they do take an investment of personnel. The first of which is we have really been working on investing in additional sales leadership. We felt like we were a little light on that side and that we needed to invest in that sales leadership and i think over time i'm confident that that leadership will bear fruit the next thing i would point out is that over the last six months we have spent considerable resources in improving the clarity and user experience of our final expense application as we've started to roll that out in the recent months here we have received extremely positive feedback from our final expense sales group. And so again, I think the benefits of that investment will be shown over time. Next, we've introduced a point of sale verification for applicant data in our final expense division. And in tandem with that, we're introducing a point of sale underwriting decision. Now, what that means is, in a practical sense, is our final expense agents are literally in a client's home how it was accomplished for the most part prior to these enhancements is the agent would fill out a paper app or sometimes an e-app but the application would be sent to the office the home office here we would underwrite it and we would run those verifications and then we'd get back to the agent and say things either verified for example the social security number verified or the bank account verified or it did not and then if it did not verify the agent will have to go back to the client's home to get that policy issued which created a very inefficient and ineffective process for our agents what these point of sale processes will do is while the agent is in the home those that information will be verified on the spot and so the agent will know do i have a valid social security number or not is this address that they're giving me is that a valid address or not is the bank account that they've provided is that a valid bank account or not. And also with the point of sale underwriting, we will run our underwriting in the background while the agent is in the home. And so when the agent leaves that home, we know that the verifications have been verified and what product that client qualifies for rather than having to wait for the home office to underwrite it. And again, all this will result in a more efficient sales process for our agents we believe it will decrease our pending policies which will increase our activation rate which will increase revenues turning to our other initiatives we are introducing a proprietary customer relationship management system these are tools that our sales force has never had before but as a but these tools will make our salesforce more efficient and more effective than they ever have been before. We were rolling some of these out in meetings with our sales leadership about four weeks ago, and again the feedback from our salesforce has been extremely positive. And then lastly, we've introduced a proprietary aftercare offering for our funeral home partners. In my view, this will do three things. One, it will increase our value proposition to prospective funeral home partners. Two, it will increase the stickiness or the value that we provide to our current partners. And then three, it will be a lead source for pre-need funerals to our Salesforce agency. And so all of these initiatives, which I think will benefit our company in the periods to come, they do require an investment in personnel. That is the reality. And we're seeing that on our financials in the first quarter. But again, I think that investment has to be evaluated over time and cannot be evaluated properly in one single period. So while we did not meet our growth goal from a gap perspective in the first quarter of 2025, I'm actually extremely proud proud of the work that we did in the first quarter. And I think our company should be as well. I think our team members should be, and I think our shareholders should be proud of our company as well. Now with that, I will turn the time over to Mr. Jason Overbaugh to present on first year sales data, and then our construction, lending, and home builder relationships, which is a significant area of investment for our companies. And with that, I'll turn the time over to Mr. Jason. No need to applause for me, but thank you.

Thank you, Adam. It's a privilege to work alongside Adam. Grateful for his leadership. I'm pleased to report on two of our key revenue drivers for Security National Life, our premium incomes and our construction lending group. So starting with our premium incomes, we saw a, and this would be life and annuity, that we saw a 3.4% increase, topping out at a little over $130 million in 2024, which was a banner year for our company. As we turn our attention to first-year sales, we saw a 3% increase in our overall sales. But you'll note on the chart that we divide our products between core and non-core with core being those products that carry the highest margins the most profitable products for our company long term and non-core while still profitable carry a much lower margin so as you split between those two in our non-core we saw a seven percent increase but actually a three percent decrease in our core products now only one we have three different distribution channels in our company uh final expense pre-need and home service and only final expense was up last year with home service and pre-need being down now as we look at some of the initiatives we undertook this past year you know adam mentioned our our premium strengthening this This was a super important accomplishment for our company and one that strengthens us for long-term health. We also made an adjustment to our rates in our single premium products, our growth rates. This also contributes to long-term health of our company and something that I'm proud that we accomplished this past year. Next we completed our lifetime budgeting analytics. previous to this we waited about 30 days to compare our budget to what our product pricing was and in that 30 days a lot of things could have changed with the development of our lifetime budget we can see on a daily basis how expenses are performing against expectations now to put this into context the investment that we make in sales is the second highest only to death claims. So that is our largest expense that occurs within security national life. So having that data in real time is very important for us to make wise decisions. And lastly, as been noted, we've been very successful since going through our rebuild of our final expense team in acquiring new talent, such as Mr. Wade Bone, who's joining us here, and other sales organizations that are helping to grow our final expense group, thus showing if we make a profitable and viable path, we do attract the right people to our company. And as we continue to do that in our other sales channels, we will see similar success. Now, turning to Q1 results for sales, and this would be our core products, we were off 4%. And as Adam noted, we have continued to see some struggles for those who are not quite on board yet with our new standards and new pricing policies at Security National. But we have many who are, and many who are embracing it, and those we will build with and and have great success just as we have seen in our final expense group now looking at some of our initiatives in 2025 the top one there our corporate sponsored training department this is a another investment in personnel we've hired two people who are at the corporate level who train our sales people to be better sales professionals and to be more successful our goal there is to obviously increase sales, but to increase the livelihoods and the success of our salespeople out there in the field and to sell products that we want. Now, next, our proprietary aftercare and CRM, as Adam mentioned, that's another significant investment for our company that's going to bring value to our funeral home partners and to our agents. Our winners keep score rollout. These are analytics that help drive the activities of our sales force. Again, trying to create value and provide a path for them to be successful. And lastly, our home service premium strengthening, we achieved that in Q1, and as Adam mentioned, our point-of-sale underwriting. All very important things for providing long-term success for our company. Turning our attention now to construction related activities. In last year, we saw a drop of about almost 20% in revenues associated with our construction and builder groups. These revenues are derived from profit splits we share with our builder partners, interest income, and fee income. Now, to understand these revenues, you have to understand an important feature and I would call it a feature within our construction group. That is revenues and incomes trail the origination of a product by anywhere or a project or an individual unit by anywhere from 12 to 36 months depending on the complexity of the product or project. As we look and this chart illustrates a few key things for you that help you understand last year's results and Q1's results that I'll share in just a moment. This is a chart that shows our balance sheet for construction lending going back to December of 22 through I think March of 25. You can see following the Fed's decision to adjust rates we've seen a precipitous drop in builder confidence and consumer confidence in buying homes. That led to us flattening out from a high of a little over $160 million to $98 million going from December of 2022 through, what is that, May of 2024. And because those revenues kind of go in sync with those balances, that's why we've seen this decrease. Now, the good news, you can see what has occurred in the latter half of 24 and in the first quarter of 2025 as these balances have gone up, which is a good leading indicator for where revenues are headed at Security National. Zeroing in a little more on Q1 production, we've seen a 49% increase in loan count volume and an 88 percent increase in units in the ground that is physical construction units that are underway right now q1 compared to last q1 so good again a good leading indicator of where things are headed at security national and last our q1 results for these revenues were up four percent from 4.2 to 4.4 and not represented entirely in these numbers and this is uh where i will end is this press release that i'm sure many of you read on may 19th that highlights one of our significant projects that we closed out you'll note that we earned a four million dollar fee when we concluded this project and also 3.2 million dollars over the course of working in this project. So $7.2 million earned for Security National Life. To me, this highlights a great example of our ability and expertise in finding opportunities in the market and creating value for our company and its shareholders. With that, I'll turn the time over to Mr. Jamie Meredith, who leads our insurance segment investments.

Well, good morning, all. Scott had referenced my uh dazzling good looks earlier and uh i could not be more excited about somebody's failing vision and eyesight than i am today so thank you for that scott well guys uh mr chairman distinguished members of the board my fellow shareholders uh i could not be more excited to be here and present on the most exciting investment opportunity that security national has you might be saying well what is that insurance assignments so i heard somebody asked well what is an insurance assignment well it's actually a really cool tool that a family can use to assign benefits over to a funeral home to take care of their funeral expenses when they do that a funeral home has a couple options in what to do with that insurance assignment they can handle it the traditional way in which they would contact the insurance carrier have their secretary or a funeral director be tied up on the phone for sometimes for a couple of hours, verifying the policy, making sure that it's assignable, that it will cover the amount of the funeral, that they have no loans or premiums that are due on the policy, that it's not contestable. There's a whole list of things that have to go through in the verification process. Once they get that done, then they have to get the documentation that the insurance company requires wait on a certified death certificate to be issued, then file the claim with the insurance company. then that starts the clock they've got to wait anywhere from 30 to 60 to 90 days or longer to actually get paid on that funeral we believe that there's a much better option which is the cnj and security national option they can send that information to us we verify the coverage with the insurance carrier as soon as we get signed documentation on the assignment we advance the funds to the funeral home that's typically about a 48-hour process so it really eliminates the challenges that funeral homes have in processing life insurance claims and definitely improves their cash flow. Now, I know the mortgage company has a lot of outside external factors that impact their business. Insurance assignments is kind of fascinating because there's not a lot, but there are two that I do want to point out. One, obviously, is the death rate. At C&J, we have a really large footprint. We have funeral home clients in all 50 states, so the death rate definitely does affect our business and as you can see with the with the graph the high point of deaths in the united states was in 2021 it was nearly three and a half million and if you look at 2024 there's been a steady decline since then and in 2024 there were about 11 fewer deaths than there were in 2021. so that's obviously an impact that we have to deal with. Another challenge is cremation rate. The cremation rate in the United States has continued to increase and is now well over 60%. When a family chooses cremation, those are usually less expensive options, and oftentimes the family will elect not to use their life insurance policy to pay for that because they may have access to the cash or credit to go ahead and fund that cremation. The good news for us is we're extremely bullish even with the the death rate declining and the cremation rate now over 60 percent we're extremely bullish going forward on insurance assignments because one the demographics in the United States is aging so we have an aging population so that in turn should see the the uptick in the death rate And two, KANA came out this past year and shared that they are seeing, KANA, which is the Cremation Association of North America, is seeing a leveling effect of cremations in the United States. So we're not seeing the dramatic increase that we have over the last few years. So we're extremely bullish on insurance assignments going forward.

So what did we accomplish in 2024?

As Scott had already mentioned, we funded just about 56,000 cases. That was a 10% increase over 2023. Our funding volume was just shy of $470 million, which was the best year that we've ever had as far as our insurance assignment program. That was an 11.5% increase over the previous year. Our net investment income for Security National was $4.5 million. That was a 10.5% increase over 2023. And year-end, we had outstanding about $48.7 million in receivables. So 2024 was our best year that we ever had in just about every category. The cool thing is, in Q1 of 2025, we've continued to build on that momentum. And so far through the first three months, we funded $135 million, a 15% increase over the Q1 of 2024, a little over 16,000 cases, which is up about 13%. Our net investment income came in at about $1.6 million, a 24% increase over the first quarter of last year. And lastly, our receivables at the end of the first quarter were a little over $51 million that's about a nine percent increase i do want to point out on the receivables though with a nine percent increase we actually had about a 15 increase in fundings so that's uh that's a good difference we're actually uh that means we're being more efficient we're collecting our receivables more quickly than we have in the past and that's actually a really good number for us to be up only nine percent in receivables while up about 15 percent in total fundings And as I've mentioned, this is the most exciting insurance investment that we have at Security National, and it's my pleasure to report on these numbers to you. I think up next is Mr. Steve Keel from the Mortuaries and Cemeteries.

Thank you, Mr. Meredith. Mr. Quist is chairman of the board and fellow board directors and fellow colleagues of Security National Financial. it is a privilege to stand in front of you today to report on our Funeral Homes and Cemetery's Division. I appreciated the way that Scott opened the meeting. It's important for us in our division to remember our why. And as he talked about Mia, thoughts of her husband Jason and their three children, Alyssa, Abigail, and Peyton, came to my mind on what a privilege it was to stand by their side and walk down that path with them. Here is our why. We are committed to honoring every life by providing peace of mind, compassionate care, and dignified support to the families that we serve, both as they prepare for and experience life events. I want to get into a couple of numbers, 187, 15, and 7. Steve Jobs has said that great things in business are never done by one person they're done by a team of people i'm grateful to stand before you today representing 187 team members within our funeral home and cemetery division whether they be sales professionals funeral directors service assistants grounds crew members accounting team new business team operations team are those that graciously graciously support us in our IT team our legal team and our HR team we're blessed to operate 15 funeral homes in three states seven cemetery properties that I would put up in comparison to any in the nation as we strive to provide peace and comfort for those that we have the privilege to care for. Let's look at our 2024 fiscal year. 2024 was the best financial earnings year in our funeral homes and cemetery segments history. Within our mortuary division, revenue grew 2.9% as we cared for 2,602 families who experienced loss of a loved one. Our average revenue per call grew by 1.9%, and our consolidated cremation rate was realized at just over 50%. Within our cemeteries division, we successfully grew revenue by 4.8%. We were able to perform 1,515 placements within our memorial parks, which was actually a drop of 1%. Our sales team was able to grow our pre-need contract count by 8.6% and our at-need contract count by 3.9%. When it came to our investments, our realized investment gains had a decrease of $191,000. and our unrealized investment gains increased an additional $157,000. In the first quarter of 2025, we faced some headwinds. As Mr. Meredith just explained, one of our biggest headwinds is death rate. In the first quarter of 2025, we were able to realize our third best financial earnings first quarter. how did we get there on our mortuaries teams we successfully grew revenue by 3.4 percent in a very competitive and tough environment we had the privilege to care for 712 families we increased our market share by three percent we were able to grow our average revenue per call by 0.4 percent and we did see a slight increase in our consolidated cremation rate within our cemeteries division a little bit tougher our revenue dropped by 0.2 percent our cemeteries and memorial parks performed 410 placements which was growth of two and a half percent our pre-need contract count dropped by 1.6 percent however our at-need contract count grew by 13.9 percent the tough headwinds that we faced on the investment side our realized investment gains decreased 496 thousand dollars and our unrealized investment gains decreased $368,000. Now, as Adam Quist reported, we're not content where we are and we realize that what got us to where we are today is not going to be sustainable to where we want to go therefore we've invested heavily on talent 2024 and 2025 has been summarized as change within our funeral homes and cemeteries division we have been able to be entrusted with two executive leadership additions to our team that i just want to bring to your attention Ms. Erin Crager is hired as our Chief Sales Officer in October of 2024. I've had the privilege of knowing Ms. Crager for quite some time. She excels in the empowerment of the individual, in both personal and professional development, and her training acumen is phenomenal. As she has been here under the Security National umbrella, she has trained our sales professionals on the power of mindset, skill set, and tool set. I am very much appreciative of her trusting us and coming and sharing her talents within our segment. Also joining her was Ms. Melissa Luce, who we hired as our Senior Vice President of Communications. Melissa joined us in January of 2025 of this year. I have had the privilege to know Ms. Luce for quite some time as well. She's an industry veteran that excels in training programs, in aftercare programs, in community education, community partnerships, and most importantly, training funeral directors on how to walk alongside with the families that we have the privilege to care for. Both of these professional, strong, passionate women have already made a tremendous impact on our organization, helping us care for those families that when they come through our doors oftentimes are overwhelmed and under-informed. Why I recognize the power of team and the importance thereof. Last year I shared with you for the first year ever we were able to be recognized for both the best in state and the state of Utah for our mortuary services category and our cemetery services category. I'm proud to stand and look out the window this morning and recognize my fellow team to announce that for the second consecutive year, we were able to have won both the mortuary and the cemeteries category and the best of state award. In addition to this, to speak of our camaraderie and our vision and purpose of where we want to take our organization, within the funeral industry is an association called the ICCFA, which is the International Cemetery Cremation and Funeral Association. As we applied for what they call their Keeping It Personal or KIPP Award, we were able to share with this association the power of what we call our memorial experiences. where through discovery questions and Q&A in our arrangement conferences, our funeral directors attempt to discover and identify personal meanings as we honor the life of that family's loved one. As we submitted for this award, we were humbled to receive first place in the funeral home category on an international basis As our operations team carried forward our memorial experiences, and one memorial experience in particular entitled, it will be okay. So what is our strategy and where do we see our mortuary and cemetery division going for the rest of 2025? I'll tell you that all four of these initiatives are action words. They are verbs that requires a lot of effort, that requires commitment, that requires dedication. We are in the process of building a culture of operational and service excellence. Earlier this year, we deployed our professional standards of excellence where we are raising the bar in regards to our personal appearance, as well as our level of professionalism as we care for the families. We also have deployed the first module of our in-house training program. This module focuses on personal skill sets as well as providing a tool set to both our sales professionals and our funeral directors to ensure that the care that we extend to our families is premier. As we focus on growing our pre-need cemetery sales, we have an unwavering commitment to development. We have a development project occurring in each and every one of our cemetery memorial parks in all three states. Why is that important? It's important to me because I've been part of an organization that didn't see the value of the future. If our sales professionals are going to be set up to succeed, there has to be an underlying commitment to deploy cash and the development of our grounds. We have the privilege to care for over 300 acres of land, and we are committed to developing that land to ensure the success of those who trust us to their career within the last 18 months we've successfully secured seven and a half acres of adjoining land to our memorial parks which will ensure a minimum of another 8 500 placements in years to come we realize operational efficiencies by strengthening relationships with our vendors we're turning our relationships into partnerships through honest communication and transparent analytics also we have an undying an unwavering commitment to cost management both in our mortuaries and our cemetery operations and then finally we're seeking investments for opportunities many funeral homes that are family owned and operated within the next 10 years will be looking for opportunities for someone to partner with them i'm pleased to stand before you to tell you our cash management allows us to be in that conversation also with the partnership of the life company and entering an opportunity with them for construction lending to realize those investment gains we're appreciative of that partnership and that cross company allegiance Admiral William McRaven once said that never underestimate the power of hope. Hope is what inspires. Hope is what empowers. Hope is what encourages. And without hope, nothing worthwhile will be accomplished. However, hope alone is just wishful thinking. Pair hope with a sound strategy, a detailed plan, and a lot of hard work. Nothing will be out of reach. I stand before you today committed to our goal is growth. Our motto is excellence. I join Mr. Meredith, optimism and bullish for the future. As those baby boomers that have been in the media for the last 10 years, the first wave turn 80 next year. 70 million people will be joining that rank there is opportunity on the horizon for us and i'm excited to pair myself with eager-minded individuals who stand ready to serve that is my report mr chairman thank you good morning i am uh andrew quist and I will be reporting on security national mortgages results for 2024.

I guess I should say good morning for those of us here in the room in the mountain time zone and in the Pacific time zone. Good afternoon for those of you central and eastern viewers. So with that, I want to start and say that I am disappointed to be up here and reporting on another loss in 2024 for security National Mortgage Company. I want to assure you that that is unacceptable and is something that we are working diligently to change. I hope that through my comments that you can feel and I can convey a message of progress at Security National through 2024 and the first quarter of 2025, because while I will be reporting a loss, I do think that tremendous progress has been made. I also want to take a moment and mention that the past three years have been very difficult in the mortgage industry, as has been mentioned a few times today. But I am so proud of our employees at Security National Mortgage and the tireless efforts that they put in to try and return us to profitability. It has been a grind in every sense of the word, and I am so appreciative of the efforts of our employees and what they have done to move ourselves towards profitability. So thank you very much to our employees. So at Security National, we are a single family residential lender. We are an independent mortgage bank, and our tagline is turning houses into homes. Now, we did that 7,270 times in 2024. Now, not all of those certainly were purchased mortgages, but 87% of our mortgages were, and that's compared to 72% nationally. So our purpose and our opportunity at Security National Mortgage is we get to help people. We get to enable people on one of the very best days of their lives, on one of, if not the most significant financial transaction that individual will ever undertake. We are able to enable that in our business, and that's something that gives us great purpose and something that we constantly have to remember through the difficult environment and difficult times. Speaking of environment, I want to touch a little bit on the mortgage market in 2024. So I wish this slide that's up on the board and for those of you virtually, I wish this was a duplicate slide error, but I stood before you last year and said that in 2023, there was the fewest number of homes sold in the last 30 years. Unfortunately, that repeated itself, so I can stand before you today and say that 2024 had the fewest number of homes sold in 30 years. The last time a fewer number of homes was sold was back in 1995. Of course, the difference being that the population in the United States has gone up by about 28% since the last time this few of homes have been sold. So it continues to be a difficult environment for the mortgage company. Certainly fewer homes sold, fewer transactions. What, despite the fewer homes sold though, loan volume last year in 2024, origination volume, actually increased. And so you can see that for the year, there was $1.77 trillion of mortgages originated in the United States. That was a 22% increase over 2023. But I do have to highlight something here. If you read at the bottom, it says the Mortgage Bankers Association in 2023 reported originations of 1.639 trillion until August of 2024. And so the number that you see on the chart of 1.45 trillion was actually a revision down from their original estimate. So they revised 2023's originations down in August of 2024. So why do I highlight that from two years ago? This is just my expectation. We'll see if it comes to fruition or not. But I would expect that that 1.77 trillion number of originations in 2024 will be revised down again. But as it stands, the Mortgage Bankers Association is reporting a 22% increase in originations. So how did Security National Mortgage perform in this environment? Our originations in 2024 were $2.3 billion, up 6% from 2023. And I do want to highlight, this is our first increase in originations since 2020. So it had been four years since we had increased our originations at Security National Mortgage. Again, I highlighted that nationwide originations were up approximately 22%, as currently reported. But breaking that down a little bit, purchase volume was up 3% compared to 2023, with the number of units actually being down. Of course, the difference being home price appreciation. Refinance volume was up 125 percent. So the real bulk of that increase in originations was in the refinance market, which, as I mentioned earlier, we are a purchase lender. That is what our focus is. And we, in 2024, outpaced the market as far as purchase transactions by 15%. So where the bulk of increase came in 2024's originations, we do not focus as much on that refinance transaction. Switching to 2025 first quarter origination volume, we originated $518 million in the first quarter of 2025, which is up 11% from the first quarter of 2024. In the blue box, you can see in the middle there, nationwide, as reported by the NBA, originations were up 2% from the first quarter of 2024. So again, in my message of progress and encouragement, we had 5x the increase of originations than the overall nation saw in the first quarter. By a different measurement, sequentially, so going from Q4 of 2024, we saw our originations drop 10% from the fourth quarter of 2024, while industry originations were down 22%. So by both of those metrics, I think we had a very strong first quarter of originations at Security National Mortgage. So how does that translate to market share? This is something that I focus on even more so than origination volume, because I'd like to see how we're benchmarking and comparing ourselves to the industry. And this happens to be actually a duplicate slide from last year. But the reason I brought it up is because when I stood here last year, I reported that our market share was 13.2 basis points. For those of you in the room and those of you online on the right-hand side there, 2023 reported 13.2 basis points. Fast forward, with the revision down in the Mortgage Bankers Association's numbers, our market share in 2023 was actually 14.9 basis points, the highest market share that we have had going all the way back to 2015. And in fact, there's only been two years since 2010 that had a higher market share. Again, why do I highlight market share numbers from a couple years ago, because this year, the year I'm reporting on 2024, our market share so far is coming in at 12.9 basis points. So a significant decrease in market share and one that I take very seriously. I do expect that number to be revised down and I do expect our market share to show higher than that 12.9 basis points when the final revision is done. Now, will it be 14.9 basis? I don't know. I don't know where it will come in at, but I am fairly confident that it will be revised up. And the reason I feel confident in that is twofold. One, as I go around industry meetings and associations, I talk to a lot of owners. I talk to a lot of presidents of mortgage companies, And I have run across very, very few that had said 2024 was up 22% over 2023. Why it may not equal our 2023 market share is simply much of the increase in volume in 2024 was refinance. And we are a purchase money lender by and large. So, but as it is, our market share for 2024 was 12.9 basis points. Moving to our financial results, as I mentioned at the top, I am disappointed to be reporting a loss for 2024 of $6.2 million. dollars. Again, that is not acceptable in results, and it is not the goal of our organization. So we are, as I said, working very diligently to change that. Again, on the theme of progress, in 2023 we had a loss of 17.4 million. So we improved our loss by 11.2 million dollars on an increase of 6% of originations. And again, shouting out and calling out our employees, that represents a lot of work done over the course of a year. So thank you very much for the efforts and energy that was put in to doing that. Moving to first quarter, we reported a loss of $1,994,000, dollars, which is actually $30,000 worse than first quarter 2024. And so you may be wondering, Andrew, I just heard you tell me, you know, how great originations were in Q1. Why are we flat on net income? Or why do we have an increase of $30,000 to that loss? And there's two asterisks that I would like to bring to people's attention. One is in the first quarter of 2024, we had a contra expense for deferred compensation of about $700,000. Similar to what Adam called out in the life insurance segment, we had a reversal of $360,000 in CECL in Q1 2024. So combining those items, those non-operational items, we had over a million dollars of expense reduction in Q1 2024 that we did not see in Q1 2025. So on an operational basis, our loss in Q1 2025 was less than a million dollars and actually a 50% improvement from 2024. So again, that is the progress that I see in our organization is that operationally, while the gap results don't reflect that, there was a significant decrease in the operational loss. Lastly, I wanted to share with the group and my fellow shareholders some performance metrics. Different than fast funding and maybe some of our other business segments, there are a number of publicly traded mortgage companies out there. I have selected three that I find most similar to us in retail originations. And they are ones that are most similar to us in size and the way we produce loan volume. And so I have taken three metrics to compare our performance in the first quarter to our competitors up here on the board. And you can see that's Guild, Prime Lending, and Loan Depot. Net production income, what that means is the income produced by originating loans, taking out the servicing income. So for all four companies, it was a loss in the first quarter. take that loss and divide it by originations to get a number in basis points. So it gives a relative size of the loss compared to originations. You can see that our loss in the first quarter was 38 basis points. Guild, to give a little more explanation, depending on if you include their other reported category, which I don't know where to fully assign that, if you include their other category. It was a 30 basis point loss. If you include just their origination category, a six basis point loss in net production income. Prime lendings was negative 48. Loan depots was negative 89. The other columns are a little more self-explanatory. Q1 year-over-year origination volume, meaning compared to the first quarter of 2024, and Q1 sequential origination volume meaning compared to Q4 of 2024. So you can read through those numbers on the screen there for yourselves. But in my opinion, we at Security National are performing very well compared to our publicly traded peers. And again, I want that to be the overall theme of progress. Again, I am not satisfied with where we are at at Security National Mortgage. Losing $6 million is not acceptable. And I know everyone at the mortgage company feels that way. But we have made tremendous progress over the course of 2024 and the first quarter of 2025. And I look forward to reporting on that progress again at this time next year. So thank you very much.

Thank you, Andrew et al. Let's see. I have a number of slides, but our time, I appreciate everyone's patience. I'll just, I'm going to pick just a few. We have talked, let's go to slide number 78. What this is, our 401K is administered by a group by the name of SOLTIS, and what they do is they're a manager of funds, if that makes sense. So they compare different funds' performance against indexes to pick out which are the highest-performing funds. They then recommend those funds to our 401K participants, and they can choose amongst these funds that have already been screened. One of the things they have started doing last year, which I quite appreciated, was an investment option for our 401k participants is to have security national stock. So they started measuring the performance of our security national stock versus these various funds. So if we take a look, I'm just going to quickly, well, let me, let's go to the next slide down, because I think this will be an easier comparison. So Security National Financial Corporation here in the kind of greenish, yellowish highlights, that was the best I could do. Our 10-year return, or 10-year, now this is an annualized yearly return, right, is 13.3, 13.3. When they compare the index they compare us to, the 10-year index is the standard and poor 500. So the S&P 500 over the same 10-year period produced the 13.1 return, Security National Financial Corporate stock produced a 13.3 return. To me, that's impressive. Now, if we look at the five-year return for Security National Financial Corporation stock, let's make sure I get this right. We come down here. For the five-year return, it's 21.89, almost 22% on a five-year basis. That's compounded annually. That means each year you went up 22%. S&P, 14.53. S&P, 14.53. To everybody, to all our employees who worked very hard to achieve these results, three-year return, 14.82 for Security National, 8.94 for S&P. for one year return 40.35 as compared to 25.02 we have been performing at a very high level through year end 2024 now go back one slide please uh this is a lot of numbers and as i looked at it as i stood here i thought you know just way too many numbers to go through but remember we were at a 25% this is the small caps this section here is small caps remember our one-year return was 40 and people say well you're a small cap all small caps did that that is not true if you look at the small cap growth 15 Wasatch small cap growth that's a local local fund here 15 Fidelity small cap value eight. Remember ours was 40. Let's go to the three-year return. I believe ours was 22 if I'm remembering correctly. The small caps return 1.41, 5%, 0.39, negative 5, 2.02. Let's go to the five-year return. I believe ours was 14. So if I'm remembering correctly, versus our peer group, 7.5, 10, 7, call it a 7, call it another 7, call it another 7. Basically 2x what our peer groups have done. Go to the 10-year return, remember that was 13.3. Looking at the funds that have been around for that long, 10.22 would have been the highest, 9.33, 7.96. So to me, when you look at stock value, shareholder returns, we have averaged over the last 10 years 13.3%. Now, of course, everyone's experience may be different depending on when they bought stock, when they sold stock. I was actually going to go through a number of the, in the 10K, there's a number of charts. it's on page like 17. I'm not going to go through those. I have five of them. I'm not going to go through all those five. I'm just going to let this stand where it is. That's our return. December 31st is a pretty common measuring date. I think our stock has performed very well. Let's go down to uh slide number 83 uh it actually tracks very closely to our return on equity so our up nope i went the wrong way hit the wrong button so in 2014 our stockholders equity was 97 million by 2019 we had grown that to 196 million for a 15.2 percent compounded growth rate that's our five-year return on equity from 90 um from 2014 to 2019 2019 to 2024 we went from 196 call it 197 million to 338 million that's an 11.5 percent compound return and if you note for the i shouldn't say if you note for the 10-year return on equity when you average it out it's 13.3 which is remarkably close to our shareholder our stock price compounded annual growth but I think that represents a very favorable track record that we as a company should be very proud of the I'm not gonna go through the next slide this is go to slide 86 and I thank you for your attention and I will now open the floor I know you're kind of worried there huh I thank you for your attention. Are there any questions? Okay.

Mr. Chairman, Michael Asturita asked, should we be expecting an announcement of the 5% dividend next week?

That will be my recommendation. We'll see what the board does. but good question actually well yeah i guess this could be appropriate place to say make a comment i should have looked at dane first uh that would be my recommendation yes any any other questions seeing none i will now uh we'll now ask for a report from the attendance and Committee Chair, Mr. Richard Dahl.

Mr. Chairman, all three of the nominees for the Board of Directors of Security National Financial Corporation to be elected by the Class A common stockholders voting separately as a class have been elected by a majority of the Class A common stockholders represented either in person at this meeting or by proxy. additionally all six of the nominees to be elected by the class a and class c common stockholders voting together have also been elected by majorities of both the class a and class c common stockholders represented either in person at this meeting or by proxy the proposal to approve the amendment of the company's 2022 equity incentive plan to authorize the issuance of an additional 3 million shares of class a and class c common stock out of which a maximum of 500 000 shares of class c common stock may be issued has been approved by a majority of stockholders represented represented either in person at this meeting or by proxy for both the class a and class c common stock the proposal to ratify the appointment of deloitte and touche llp as the company's independent registered public accountants for the fiscal year ended december 31st 2025 has been approved by a majority of stockholders represented either in person at this meeting or by proxy for both the class a and the class c common stock thank you mr doll

and i extend my appreciation and thanks from everyone for your work uh the chair will now entertain a motion as to the approval of the actions of the Board of Directors and the management of the company taken since the last annual meeting. Do I have a second to that motion? It has been moved and seconded that the actions of management and the Board of Directors since the last annual meeting be adopted and ratified. We'll now vote on that motion. All in favor signify by saying aye. Opposed by nay. Nay. The ayes have it. I'll now entertain a motion for adjournment.

Mr. Chairman, I move that this annual meeting of stockholders be adjourned.

I second that motion. I have a motion. I have a second. All in favor signify by saying aye. Opposed nay. The motion carries. We stand adjourned. Thank you very much.