การรายงานผลประกอบการไตรมาส 2 ปี 2026 ของ Security National Financial (SNFCA): กำไรปรับตัวสูงขึ้นขณะที่รายได้ลดลง

บริษัท ซีเคียวริตี้ เนชั่นแนล ไฟแนนเชียล คอร์ปอเรชั่น (NASDAQ: SNFCA) ทำกำไรเพิ่มขึ้นในไตรมาสที่ 2 ของปี 2026 แม้ว่ารายได้รวมจะลดลง โดยธุรกิจสินเชื่อเพื่ออยู่อาศัยพลิกกลับมารับรู้กำไรรายไตรมาส ขณะที่กำไรจากการลงทุนช่วยหนุนผลประกอบการของธุรกิจสุสานและฌาปนกิจ

ประเด็นสำคัญ

• กำไรหลังหักภาษีในไตรมาสที่ 2 เพิ่มขึ้น 7.3% เมื่อเทียบรายปี โดยกำไรสุทธิอยู่ที่ประมาณ 9 ล้านดอลลาร์ เพิ่มขึ้น 28.3% จาก 7 ล้านดอลลาร์ในไตรมาสที่ 1 ของปี 2026
• รายได้รวมลดลง 6.3% ในไตรมาสนี้ และลดลง 5% ในครึ่งปีแรก แต่กำไรในครึ่งปีแรกเพิ่มขึ้น 8.1% เมื่อเทียบรายปี
• กลุ่มธุรกิจสินเชื่อเพื่ออยู่อาศัยบันทึกกำไรก่อนหักภาษีที่ 71,000 ดอลลาร์ เมื่อเทียบกับขาดทุน 1.671 ล้านดอลลาร์ในไตรมาสที่ 2 ของปี 2025 ซึ่งถือเป็นไตรมาสที่มีกำไรเป็นครั้งแรกนับตั้งแต่ไตรมาสที่ 3 ของปี 2025
• รายได้จากธุรกิจสุสานและฌาปนกิจเพิ่มขึ้น 20.7% สู่ระดับ 9.8 ล้านดอลลาร์ ขณะที่กำไรก่อนหักภาษีเพิ่มขึ้น 69.5% สู่ระดับ 3 ล้านดอลลาร์ โดยการเติบโตของกำไรส่วนใหญ่มาจากผลตอบแทนจากการลงทุนมากกว่าการดำเนินงาน
• รายได้ของกลุ่มธุรกิจประกันชีวิตในครึ่งปีแรกลดลงประมาณ 5% สู่ระดับ 98.4 ล้านดอลลาร์ ขณะที่กำไรก่อนหักภาษีลดลง 13% สู่ระดับ 16.1 ล้านดอลลาร์ โดยมีสาเหตุหลักมาจากส่วนแบ่งกำไรจากผู้สร้างบ้านและรายได้จากการให้สินเชื่อเพื่อการก่อสร้างที่ลดลง
• สินเชื่อเพื่ออยู่อาศัยค้างชำระเกิน 90 วันเพิ่มขึ้นสู่ระดับ 15.8 ล้านดอลลาร์ จาก 6.5 ล้านดอลลาร์ ณ สิ้นปี โดยบริษัทระบุว่าสำรองหนี้สูญยังอยู่ในระดับที่เหมาะสม และกำลังติดตามแนวโน้มนี้อย่างใกล้ชิด

ข้อมูลทางการเงินที่สำคัญ

การเพิ่มขึ้นของกำไรขาดทุนเบ็ดเสร็จในครึ่งปีแรกสะท้อนหลักๆ ถึงการวัดมูลค่าใหม่จากอัตราดอกเบี้ย LDTI สำหรับผลประโยชน์กรมธรรม์ในอนาคต ซึ่งเปลี่ยนจากรายการค่าใช้จ่าย 10.2 ล้านดอลลาร์ใน H1 ปี 2025 มาเป็นผลประโยชน์ 12.9 ล้านดอลลาร์ใน H1 ปี 2026 โดยฝ่ายบริหารเน้นย้ำว่ามาตรการนี้อาจผันผวนอย่างมีนัยสำคัญตามอัตราคิดลด ตัวเลขปี 2025 ทั้งหมดที่อ้างถึงได้รับการปรับปรุงใหม่สำหรับการนำมาตรฐาน LDTI มาใช้

ผลการดำเนินงานและผลประกอบการทางธุรกิจ

สินเชื่อเพื่ออยู่อาศัย

ซีเคียวริตี้ เนชั่นแนล มอร์เกจ คอมพานี รายงานกำไรสุทธิต้นงวดก่อนหักภาษีประจำไตรมาส 2 ที่ 71,000 ดอลลาร์ ดีขึ้น 1.742 ล้านดอลลาร์ จากผลขาดทุน 1.671 ล้านดอลลาร์ในปีก่อนหน้า ขณะที่ความสามารถในการทำกำไรนับตั้งแต่ต้นปีจนถึงปัจจุบันดีขึ้นมากกว่า 3 ล้านดอลลาร์

การปล่อยสินเชื่อใหม่ลดลง 11% เมื่อเทียบรายปี สู่ระดับ 548 ล้านดอลลาร์ จาก 617 ล้านดอลลาร์ แต่เพิ่มขึ้น 12% เมื่อเทียบกับไตรมาสก่อนหน้า ส่วนแบ่งการตลาดเพิ่มขึ้นสู่ระดับ 10 basis points จาก 9 basis points ใน Q1 โดยอ้างอิงจากปริมาณในอุตสาหกรรมของสมาคมธนาคารสินเชื่อเพื่ออยู่อาศัย (Mortgage Bankers Association) ที่ระบุโดยฝ่ายบริหาร

การรีไฟแนนซ์คิดเป็น 17% ของปริมาณทั้งหมดใน Q2 ปี 2026 เพิ่มขึ้นจาก 14% ใน Q2 ปี 2025 โดยบริษัทระบุว่าส่วนหนึ่งเป็นผลมาจากความมุ่งเน้นที่เพิ่มขึ้นในกลุ่มผู้กู้รายเดิม ส่วนกิจกรรมวงเงินสินเชื่อส่วนบุคคลที่มีบ้านเป็นหลักประกัน (HELOC) เฉลี่ยแตะระดับวันละหนึ่งรายการ เทียบกับแทบไม่มีเลยใน Q4 ปี 2025

ประกันชีวิต

รายได้ของกลุ่มธุรกิจประกันชีวิตใน H1 ลดลงสู่ระดับประมาณ 98.4 ล้านดอลลาร์ จาก 104 ล้านดอลลาร์ ขณะที่กำไรก่อนหักภาษีลดลงสู่ระดับ 16.1 ล้านดอลลาร์ จาก 18.6 ล้านดอลลาร์ ส่วนรายได้ใน Q2 อยู่ที่ประมาณ 49.5 ล้านดอลลาร์ เทียบกับ 53.4 ล้านดอลลาร์ และกำไรก่อนหักภาษีอยู่ที่ 8.5 ล้านดอลลาร์ เทียบกับ 10.6 ล้านดอลลาร์

เบี้ยประกันภัยและสิ่งตอบแทนอื่น ๆ ลดลง 4% สู่ระดับ 57.6 ล้านดอลลาร์ใน H1 ฝ่ายบริหารระบุว่ายอดลดลงส่วนใหญ่เกิดจากการขายผลิตภัณฑ์เบี้ยประกันภัยชำระครั้งเดียวที่ลดลง ซึ่งถูกระบุว่าเป็นผลิตภัณฑ์ที่ทำกำไรได้น้อยที่สุดของกลุ่มธุรกิจ ทั้งนี้ ยอดการผลิตเบี้ยประกันภัยปีแรกแบบชำระเป็นงวดปรับตัวสูงกว่าช่วงเดียวกันของปีก่อน แต่ฝ่ายบริหารกล่าวว่าประโยชน์จะทยอยเข้าสู่รายได้ที่รายงานเนื่องจากผู้ถือกรมธรรม์ชำระเงินงวดอย่างต่อเนื่อง

รายได้จากการลงทุนสุทธิใน H1 ลดลง 14% สู่ระดับ 33.4 ล้านดอลลาร์ รายได้ส่วนแบ่งกำไรสุทธิจากผู้สร้างบ้านลดลงประมาณ 2.8 ล้านดอลลาร์ ขณะที่ดอกเบี้ยและรายได้ค่าธรรมเนียมจากการให้สินเชื่อเพื่อการก่อสร้างลดลงราว 1.1 ล้านดอลลาร์ การปล่อยสินเชื่อเพื่อการก่อสร้างปรับตัวแข็งแกร่งขึ้นในช่วง Q2 แม้ว่าการปรับตัวดีขึ้นนี้จะยังไม่ส่งผลกระทบเต็มที่ต่อยอดคงค้างหรือรายได้ดอกเบี้ย

กลุ่มธุรกิจได้เพิ่มการลงทุนในที่ดินและการพัฒนาโครงการจัดสรรที่อยู่อาศัยเป็นประมาณ 122 ล้านดอลลาร์ จาก 98 ล้านดอลลาร์ ณ สิ้นปี ฝ่ายบริหารเชื่อว่าโครงการเหล่านี้จะสามารถสนับสนุนรายได้ส่วนแบ่งกำไรในอนาคต แต่ตามหลักการบัญชี GAAP จะยังไม่รับรู้รายได้จนกว่าจะขายแปลงที่ดินได้หรือเริ่มการให้สินเชื่อเพื่อการก่อสร้าง

สุสานและฌาปนกิจ

รายได้ใน Q2 เพิ่มขึ้น 20.7% สู่ระดับ 9.8 ล้านดอลลาร์ ขณะที่กำไรก่อนหักภาษีเพิ่มขึ้น 69.5% สู่ระดับ 3 ล้านดอลลาร์ รายได้จากการลงทุนเพิ่มขึ้น 169.5% สู่ระดับ 2 ล้านดอลลาร์ โดยมีสาเหตุหลักมาจากกำไรที่ยังไม่เกิดขึ้นจริงที่สูงขึ้น

หากไม่รวมผลตอบแทนจากการลงทุน รายได้เพิ่มขึ้น 5.5% สู่ระดับ 7.8 ล้านดอลลาร์ แต่กำไรก่อนหักภาษีจากการดำเนินงานลดลง 4.8% สู่ระดับ 963,000 ดอลลาร์ เนื่องจากค่าตอบแทน บุคลากร และต้นทุนด้านเทคโนโลยีเพิ่มขึ้น

รายได้ของบริการจัดงานศพเพิ่มขึ้น 7.4% สู่ระดับ 3.5 ล้านดอลลาร์ ขณะที่กำไรก่อนหักภาษีลดลง 3.2% สู่ระดับ 375,000 ดอลลาร์ จำนวนครอบครัวที่ได้รับบริการเพิ่มขึ้น 1.1% และรายได้เฉลี่ยต่อเคสเพิ่มขึ้น 6.2% สู่ระดับ 5,549 ดอลลาร์

รายได้จากธุรกิจสุสานเพิ่มขึ้น 4% สู่ระดับ 4.3 ล้านดอลลาร์ แต่กำไรก่อนหักภาษีลดลง 5.8% สู่ระดับ 588,000 ดอลลาร์ ยอดขายที่ดินล่วงหน้าสุทธิเพิ่มขึ้น 6.1% สู่ระดับ 2.34 ล้านดอลลาร์ จำนวนการประกอบพิธีฝังเพิ่มขึ้น 5.1% เป็น 348 ราย ซึ่งรวมถึงการฝังแบบดั้งเดิมที่เพิ่มขึ้น 12.1% เป็น 268 ราย

ความเสี่ยงและประเด็นที่ต้องติดตาม

• รายได้รวมยังคงหดตัวต่อเนื่อง แม้ว่าการลดต้นทุนและการปรับเปลี่ยนการดำเนินงานจะช่วยหนุนให้กำไรสูงขึ้น
• สินเชื่อเพื่ออยู่อาศัยค้างชำระเกิน 90 วันเพิ่มขึ้นสู่ระดับ 15.8 ล้านดอลลาร์ จาก 6.5 ล้านดอลลาร์ ณ สิ้นปี
• ฝ่ายบริหารระบุว่าอัตราการเสียชีวิตที่ลดลงในสหรัฐฯ กำลังกดดันจำนวนเคสจัดงานศพและผลกำไรจากการดำเนินงานบริการจัดงานศพ
• รายได้จากการลงทุนในธุรกิจประกันชีวิตยังคงเผชิญแรงกดดันจากส่วนแบ่งกำไรของผู้สร้างบ้านที่ลดลง การชำระคืนสินเชื่อ การแข่งขันด้านอัตราดอกเบี้ย และการปล่อยสินเชื่อเพื่อการก่อสร้างที่ลดลงในช่วงต้นปี
• การถือครองที่ดินที่เพิ่มขึ้นทำให้การรับรู้รายได้และกำไรในงวดปัจจุบันต้องเลื่อนออกไป จนกว่าแปลงที่ดินจะถูกขายหรือเริ่มการก่อสร้างบ้าน ซึ่งฝ่ายบริหารระบุว่าบางโครงการมีกรอบระยะเวลา 12 ถึง 24 เดือนหรือนานกว่านั้น
• กำไรของธุรกิจสุสานและฌาปนกิจได้รับประโยชน์จากกำไรจากการลงทุนที่ยังไม่เกิดขึ้นจริง ซึ่งฝ่ายบริหารเตือนว่าอาจผันผวนได้ทั้งสองทิศทาง
• กำไรขาดทุนเบ็ดเสร็จยังคงมีความอ่อนไหวต่อการเคลื่อนไหวของอัตราคิดลดภายใต้มาตรฐาน LDTI

บันทึกการแถลงผลประกอบการฉบับเต็ม

บทถอดเสียงฉบับเต็มของการประชุมทางโทรศัพท์ผลประกอบการ

คำชี้แจงจากฝ่ายบริหาร

Heather Street

Good afternoon, everyone, and welcome to Security National Financial Corporation's Second Quarter 2026 Earnings Call. We thank you for joining us today to review our financial and operational results for the period ended June 30, 2026.

Before we begin, I'd like to remind everyone that our remarks today will include forward-looking statements. These statements are based on current expectations and assumptions that are subject to risks and uncertainties, which may cause actual results to differ materially from those projected. Such risks include, but are not limited to, changes in economic conditions, interest rates, regulatory developments, competitive pressures and other factors detailed in our filings with the Securities and Exchange Commission.

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

With that, I'd like to turn the call over to our Chairman, President and Chief Executive Officer, Scott Quist. Scott?

Scott Quist

Thank you. Welcome, everyone. I am pleased to report that our second quarter earnings after tax increased 7.3% over 2025 and that our first half earnings increased 8.1% over 2025. This improved profitability for both the quarter and the first half of the year illustrates the very solid operational and sales progress we have made in all of our business segments. It is not lost on me that our top line revenue decreased 6.3% for the quarter and 5% for the half. We are working aggressively and in my view, successfully to address those revenue issues. But our first goal was improved profitability, and we achieved that goal.

Our Mortgage Segment can be considered the star for the first half of 2026, delivering 2 very solid quarters of improved performance. The mortgage segment improved Q1 year-over-year profitability by $1.4 million and then followed that great performance in Q2 with a $1.6 million improvement for a total $3 million profit improvement for the first half of 2026. Revenue did decrease 9% for the first half, which is never our goal, but that decrease highlights the tremendous operational improvements that were accomplished. Obviously, there is a nexus between revenue and profitability. But in this market, if we must choose one or the other, meaning revenue growth or improved profitability, at this juncture, I much prefer the improved profitability. And I will say that is not always my preference, while I always do want to improve profitability. But sometimes it's the time to grow revenue and sometimes it's the time to grow profitability.

A shout out is owed to the entire company for this improved performance. Suffice it to say that all aspects have been worked, worked again and reworked over the last several years, including management structures, margins, marketing, commissions, products, pricing, back office, secondary operations, underwriting and closing and funding to achieve greater efficiencies. Much work remains to be done. But after all the hard work of our team, it is gratifying to see this segment profitable in Q2 and within striking distance of profitability for the year.

Our Cemetery and Mortuary Segment also delivered stellar results, increasing revenue by 21% for the quarter and by 13% for the first half with a corresponding profit improvement of 69% for the quarter and 29% for the first half. As is many times the case, there is much movement going on under the hood in achieving those impressive results. First, the overall backdrop. While it's difficult to precisely quantify at this time, I believe most would agree that the death rate in the United States dropped in 2026 to its lowest level in recent years. The improved mortality experienced in our Life company segment, decreased case count in our funeral funding operation and reviews of our publicly traded peers all reinforce that conclusion.

Thus, looking within this segment at our mortuary only results, while revenue did increase by some 3% for the first half, profitability actually decreased some 9%. We believe that we have generally increased our market share, but it has been a struggle because of this year's declining death rate. However, demonstrating the benefit of diversified income streams, our cemetery-only results showed an 11% revenue improvement with a 17% profitability improvement, basically as a result of improved preneed cemetery sales. Our cemetery preneed sales results show that we are controlling that which we can control, which is leading to overall profit improvement. Many thanks are owed to the considerable effort that has gone into rebuilding our preneed cemetery sales force.

In addition to the improved preneed sales results, we had a $1 million favorable investment tailwind in the second quarter, which reversed the unfavorable investment results we experienced in the first quarter. All in, we achieved a nearly 23% segment net profit margin in the first half, which, in my view, is admirable.

Our Life Insurance segment also made very significant positive progress despite its top line revenue decrease of 5.5% for the first half and a profitability decrease of 13%. I don't believe those numbers are illustrative of the significant progress, which has been accomplished in nearly all facets of our business. Regarding the revenue decrease, there are 2 major components, which are premium revenue, which is the smaller component of the decrease and our investment income revenue. While there are numerous inputs in the reported premium amount, which makes generalizing somewhat hazardous, to me, the premium revenue decline is primarily due to fewer single premium products being sold in 2026, which, in my view, is our least profitable product.

Our modal-pay product sales have actually increased year-to-date, but those effects won't be realized in our financial statements for several periods. As I have noted in prior releases, we have been spending significant time and resources in improving our sales functions, which efforts in my view have been very successful even being measured at this very initial stage. Illustrative of that initial success, first year premium sales are now up versus 2025. We have much work to do, but we have built and are building excellent offerings for the marketplace to include a much improved onboarding process for new sales personnel, ease of application for both the agent and the customer, quicker real-time underwriting decisions, better lead generation and management, more predictable commission and advanced structures and better quality measuring metrics, all resulting in significant first-year traction.

The larger factor in this segment's revenue decline and probably also the larger factor in its profitability decline is its investment income. Specifically, we had lower builder profit split in 2026 vis-a-vis 2025, and also decreased interest income. We have made specific strategic decisions to increase our land holdings, which, in my view, will lead to greater profits in the future, albeit at the cost of current profitability since we recognize no profit on land until it is either sold or a home on it has started construction. Many of our land holdings have a 12 to 24 month, or even longer time horizon. So increasing land holdings does suppress both revenue and profit in the current period in favor of greater profitability in the future.

Regarding the decrease in interest income, this result reflects the impact of loan payoffs, increased rate competition and lower loan origination volumes during Q1. Construction-related loan originations, however, rebounded strongly during Q2. Utah new-home starts were down significantly in 2025, which trend appears to be continuing in 2026, which led to the decreased construction loans. Primarily due to lower loan production, our cash position has increased by some $61 million since December 31, 2025, which does earn bank interest, but at a rate below that of our lending activities.

Despite those declines, I don't believe we've ever had better processes or more talented and capable people in responsible positions than we do today. In summary, I believe we have improved capacity, more talented people, greater wherewithal and better sales offerings in both products and processes than we have ever had. In a nutshell, when viewed as a whole, SNFC increased profitability in the quarter by 7.3% and for the first half by 8.1% despite a decline in revenue. Many thanks to our hardworking teams for achieving those impressive operational results.

Garrett Sill

Thank you, Scott, and good afternoon, and thank you for joining us today. My name is Garrett Sill. I am the Chief Financial Officer of Security National Financial Corporation. This was a good quarter for the company, and I do want to thank all our employees for their efforts and dedication in making Security National a great company. In addition to what Scott shared, I want to highlight a few additional items regarding our consolidated financial statements.

First, on our balance sheet, total assets grew to $1.61 billion as of June 30, 2026, an increase of $47.5 million or 3% compared to year-end. We also saw a 60% increase in cash and cash equivalents, while our combined investment portfolio decreased $13 million or 1.2% to just over $1 billion as we continue to look for opportunities to deploy the elevated cash balances we discussed in our last call and this call. Total liabilities increased $24.8 million or 2.2% to $1.18 billion. Stockholders' equity increased $22.7 million or 5.5% to $433 million. And as a result, our debt-to-equity ratio improved to 2.72x from 2.81x at year-end, reflecting a continued strengthening of our capital position.

Moving to our statement of earnings. Net earnings for the second quarter were approximately $9 million, an increase of nearly $2 million or 28.3% compared to net earnings of $7 million in the first quarter of 2026. On a year-over-year basis, net earnings for the 6 months ended June 30, 2026, increased 8.1% compared to the same period in 2025, which Scott addressed in his remarks. I'd also note that combined commissions and personnel expense, our 2 largest cost categories decreased $4.8 million or 13.5% for the quarter and $8 million or 11.8% year-to-date compared to the same period in 2025, reflecting continued efficiency efforts across our segments. As a reminder, all 2025 figures referenced today have been revised to reflect our adoption of LDTI, so these quarter-over-quarter and year-over-year comparisons are being made on a consistent basis.

Speaking of LDTI, I'd like to draw your attention to our statement of comprehensive income, which showed a notable divergence between our quarterly and year-to-date results this quarter. For the 6 months ended June 30, 2026, comprehensive income totaled $22.4 million, an increase of 86.6% compared to the $12 million for the same period last year. This year-to-date improvement was driven primarily by the interest rate remeasurement of our future policy benefits under LDTI, which swung from a $10.2 million charge to other comprehensive income in the first half of 2025 to a $12.9 million benefit in the first half of 2026, a favorable swing of approximately $23 million tied to the discount rate movements.

I would note, however, that on a stand-alone quarterly basis, comprehensive income for the second quarter of 2026 was $7.3 million, down 18.2% from $8.9 million in the second quarter of 2025. So while our year-to-date comprehensive income trend is strongly positive, the core trend moved in the opposite direction this quarter, a good reminder of how sensitive this measure is to discount rate movements from period to period and why we continue to encourage you to review both the quarterly and year-to-date statement of comprehensive income.

Turning to credit quality. Our fixed maturity security portfolio remains high in quality with 98.4% rated investment grade as of June 30, 2026, essentially unchanged from 98.5% at year-end. Only 1.6% of our total bond portfolio or approximately $6 million was held in noninvestment-grade categories, consistent with year-end. On the mortgage loan side, loans more than 90 days past due increased to $15.8 million as of June 30, 2026, from $6.5 million at year-end. Our allowance for credit losses on mortgage loan portfolio remains appropriately reserved, and we are monitoring this trend closely.

In closing, the second quarter 2026 was a good quarter for the company as we again saw growth in total assets, stockholders' equity and net earnings, both sequentially and year-over-year. Regarding our internal controls over financial reporting, we continue to test, improve and remediate where needed. And as has been noted, we continue to focus on growing top line while also improving overall profitability.

Next, we'll hear from Andrew Quist, President and Chief Executive Officer of Security National Mortgage.

Scott Quist

Thank you, Garrett, and good afternoon, fellow shareholders. I'm Andrew Quist, President and CEO of Security National Mortgage Company. In the second quarter of 2026, Security National Mortgage Company had a pretax net income of $71,000 compared to a pretax net loss of $1,671,000 in the second quarter of 2025. This was a year-over-year increase of $1,742,000 or 104% from last year's results. While the net income result is modest, I was particularly proud of our first profitable quarter since Q3 of 2025. Furthermore, the over $3 million improvement year-to-date is noteworthy. This is evidence that the tireless work and effort of our employees have put in, in reshaping Security National Mortgage Company over the past several years is paying off.

Continuing our recent trend, this improvement in net income and profitability came on reduced year-over-year origination volumes. In the second quarter of 2026, we originated $548 million of loan volume compared to $617 million in the second quarter of 2025, an 11% year-over-year decrease.

On a sequential quarter basis, origination volumes were up 12%. Based on the Mortgage Bankers Association's reported total industry origination volumes for the second quarter, SNMC's market share increased to 10 basis points, up from 9 basis points in Q1. The sequential quarter increase in origination volume outpaced the overall industry origination volume increase as indicated by our increased market share. While the year-over-year decline continues to be impacted by the company separating from a large group of loan originators in the third quarter of last year. While the separation has negatively impacted origination volumes, it's contributed significantly to our profitability.

As interest rates rose steadily through much of the second quarter, SNMC's purchase transaction volume remains strong. While refinance volume and percentage of overall volume declined from multiyear highs in Q1, both refinance volume and refinance percentage of overall volume were up over Q2 in 2025, 17% refinance percentage in Q2 2026 versus 14% refinance percentage in Q2 2025. I believe this shows tangible proof that our increased focus on repeat borrowers over the past 9 months has been effective. In 2026, our percentage of borrowers who are repeat borrowers is higher than it's been in the past 3-plus years. This percentage should continue to increase as we strengthen our skill set in serving past borrowers of SNMC with their future lending needs, whatever they may be.

A corollary of this activity is offering our past borrowers home equity lines of credit, helping them tap the historic equity in today's housing market. We have averaged 1 HELOC transaction a day in the second quarter, up from virtually 0 as recently as the fourth quarter in 2025.

In summary, in the second quarter of 2026, Security National had pretax net income of $71,000 despite lower origination volumes year-over-year. This was the first profitable quarter for SNMC since Q3 of 2025. I believe a quick survey of other publicly traded retail independent mortgage banks second quarter results will further demonstrate the strength of our profitable quarter. I'd like to conclude by thanking our loan officers and employees for their wonderful work improving Security National in this challenging environment. The progress is exciting, and I couldn't be more proud. Thank you.

I'll now turn the time over to Adam Quist.

Adam Quist

Thank you, Andrew, and congratulations on the profitable quarter and the improvement. As Andrew mentioned, my name is Adam Quist, and I'm the President and CEO of the Security National Life Insurance Company. My remarks today will focus on how our life companies have performed year-to-date with some additional context on the second quarter itself.

For the 6 months ended June 30, 2026, our Life segment generated total revenues of approximately $98.4 million compared to $104 million a year ago or a decrease of about 5%. Net earnings before taxes were $16.1 million compared to $18.6 million, a decrease of approximately 13%. For the second quarter alone, revenues were approximately $49.5 million versus $53.4 million and net earnings before taxes were $8.5 million versus $10.6 million. Those are real decreases and decreases are, of course, not our goal. But in my opinion, when evaluating our company's performance, it is also worth retaining the context that 2025 was our best operational year in our company's history. And year-to-date, 2026 is our second best operating year in our company's history. I believe our team is executing well, making deliberate choices and building towards a stronger future.

I now want to discuss the main factors driving those top line numbers. As Scott mentioned, the pressure on our top line this year is concentrated in 2 identifiable places, namely a decrease in single premiums and lower net investment income, primarily associated with homebuilder profit share. Let me start with the smaller of the 2 factors, premiums. For the 6 months, insurance premiums and other considerations were approximately $57.6 million compared to $60 million a year ago, a decrease of about 4%. In the second quarter, premiums were $28.7 million versus $30.2 million, a decrease of roughly 5%.

The largest single factor of the year-to-date decline is our single premium business. Single premium is our least profitable product. And as we have discussed before, we are currently emphasizing growing our modal-pay sales, which we believe is the business that builds more durable value over time. Our renewal premium base, the truest measure of the health of our in-force book, grew year-to-date, up about 1.5% on our individual whole life block. This means our existing policyholders are staying with us, persistency remains solid and the foundation of our business is strong.

Looking at our year-to-date new sales results, our first year modal-pay premium production, or in other words, the multi-pay new business we are writing this year is now running ahead of where it was at this point last year. It is important to keep in mind, however, that because modal premiums feather into our financial statements gradually over time as the policyholders make their monthly premium payments, it will take time for this increase in modal-pay sales to show up in our reported premium revenues. But this increase reflects the early-stage success of the sales leadership changes we have made and the investments in our distribution platforms we've been making over the last 2 years.

Now let me turn to the largest factor affecting both our revenue and net income, our net investment income. For the 6 months, net investment income was $33.4 million compared to $38.6 million, a decrease of about $5.2 million or 14%. In the second quarter, it was $15.7 million versus $20 million, down roughly 21%. There are 2 distinct pieces at play here, and I want to separate them clearly because they behave differently. The largest single factor is a decline in homebuilder profit share income, which on a net basis was down about $2.8 million year-to-date and about $2.5 million in the second quarter alone. The second factor is interest and fee income associated with our residential construction lending, which was down about $1 million on the quarter and about $1.1 million year-to-date.

However, I should point out that construction loan origination activity picked up meaningfully during the second quarter after a slower start to the year, which we view as an encouraging sign heading into the second half, even though it has not yet fully worked its way through to our outstanding balances and reported interest income. We have deliberately grown our investment in land and residential subdivision development to approximately $122 million as of June 30, up from about $98 million at year-end. That capital is not yet generating reported investment income under GAAP since that only happens once a lot is sold or a construction loan is originated, but we view it as a leading indicator of future builder profit sharing income. We believe this capital is deployed in projects that will result in greater profitability in future periods, even if it is not showing up on our current numbers.

Gains on our equities and other assets were $3.7 million year-to-date compared to $1.2 million a year ago, an approximate $2.5 million increase, which was driven mainly by a $1.9 million increase in unrealized gains in our equity portfolio relative to 2025. These are market-driven and can move in either direction, but they have partially offset the headwinds I just described in our builder profit share income and speak to the quality of the portfolio we hold and the benefits of having a diversified investment strategy. We also saw a year-over-year increase in realized gains on real estate of about $850,000 as a result of construction starts or lot sales.

Turning to expenses. I am pleased with the discipline our team continues to show. Total selling, general and administrative expenses for the segment were down about 3.3% year-to-date to $25.9 million from $26.8 million and down 3.4% in the second quarter alone. Personnel expense increased modestly, up about 2.8% year-to-date and 3.2% in the second quarter. That increase is intentional and reflects our continued investment in sales leadership talent, the same investment that is driving the modal-pay sales trend I mentioned earlier. I am encouraged that our overall expense base is stable even as we continue to invest in the people and systems that will grow this business.

Policyholder benefits and claims were also lower, down about 4% year-to-date and roughly 5% in the second quarter, reflecting continued favorable claims experience. That is a credit to our underwriting and claims teams and reflects mortality and surrender experience that remains close to pre-COVID trends. All total benefits and expenses for the segment were down about 3.7% year-to-date.

In closing, year-to-date, our revenue and earnings are lower because we shifted deliberately away from our least profitable premium product and saw a sharp though partially offset decline in builder profit sharing income. I believe our company's foundation is strong. Our team is making deliberate decisions, exercising discipline, strengthening our sales force and making investments that position ourselves for better performance in the future. While I recognize that our year-to-date numbers are down from 2025, we are still experiencing our second best operational year in the company's history, a testament to the great work of our team. I remain confident in the direction of our life companies and in the team executing our strategy. I look forward to sharing our continued progress with you on future calls. Thank you for your continued support.

I will now turn the time over to Steve Kehl to discuss our funeral home and cemetery division.

Steven Kehl

Thank you, Adam. Good afternoon, everyone. I'm Steve Kehl, Chief Operating Officer of Security National's Funeral Homes and Cemeteries. Today, I'll walk you through our second quarter results as Scott has touched on several first half comparisons in his remarks.

For the second quarter, earnings before tax increased 69.5% to $3 million from $1.8 million a year ago. Revenue increased 20.7% to $9.8 million from the $8.1 million a year ago. Now as Scott noted is looking under the hood, I want to be clear at the outset about what is driving what. That growth in our earnings before tax came from investments. Excluding our investment results, our revenue increased 5.5% in the second quarter of 2026 from $7.4 million to $7.8 million, and operating earnings before tax decreased 4.8% to $963,000 from just over $1 million. Our operating businesses grew revenue and improved on several key indicators. At the same time, we absorbed deliberate investments in both talent and technology. Those investments carry costs today, and they are intended to support growth and efficiency going forward.

As we review our funeral homes, revenue increased 7.4% to $3.5 million from $3.3 million, while earnings before tax decreased 3.2% to $375,000. Our earnings before tax declined because costs outpaced revenue. Total operating costs increased 8.8% against revenue growth of 7.4%. I want to be direct about that cost increase. It was led by compensation, and that was a decision, not a surprise. We have invested in talent in this segment, and that investment is already showing up in our customer service experience feedback.

Three metrics matter most to us in this segment, and all 3 moved in the right direction. Families served increased 1.1%. Average revenue per call increased $323 or 6.2% to $5,549. And the share of cremation families choosing a memorial or funeral service rose to 41.9%. That last measure is one we are pushing the hardest on because we know a cremation with a service is a better experience for the family and a better economic outcome for us. However, even at an impressive 49.9%, we have room to improve. The work from here is to leverage what we have already invested in our people, our training and our technology across a growing revenue base and to convert that into stronger margins as we continue to navigate a headwind of declining death rates.

In cemeteries, revenue increased 4% to $4.3 million from $4.1 million, while earnings before tax decreased 5.8% to $588,000. Earnings before tax declined because costs once again outpaced revenue. Cost of goods sold increased 3.1% as we face ongoing wholesale margin pressures and operating expenses increased 6.7%. The main driver within our revenue growth was from our net preneed land sales increasing 6.1% to $2.34 million. Within the quarter, we continued to focus on our prospecting metrics, community seminars and providing events within our memorial parks. Also important to note that our interment activity within our memorial parks was also positive. Placements increased 5.1% to 348. Even more impressive within that figure, I felt it was important to note that traditional interments in the quarter increased 12.1% to 268. So we saw increase in both volume and a richer mix.

Our priorities in cemeteries are consistent. We will continue to focus on building family relationships, generating steady preneed production, sharpening our sales execution, recruiting talent, maintain our properties well and keep adding capacity through garden developments. As noted, our investment revenue increased 169.5% to $2 million from $758,000 a year ago. The increase was driven primarily by higher unrealized gains within our portfolio. Now we are pleased with that contribution, but we are also clear-eyed about it. Unrealized gains can move in either direction. That is why we evaluate our operating businesses separately from short-term changes in investment valuations and why I have intentionally separated the 2 for you today.

Stepping back, this quarter showed both progress and opportunity. Reported earnings benefited significantly from investment performance, while operating profitability came in slightly below the prior year. Underneath that, families served revenue per call, cremation with service, cemetery preneed land production and interment activity all improved. Our job now is to control what we can control and convert those operating improvements into earnings growth.

In closing, I want to thank our funeral homes, cemetery grounds and operational support teams. The results that I just described are their work. It is an honor to work alongside such talented professionals. We are realistic about what lies ahead, encouraged by the underlying business and confident that consistent execution creates long-term value for our shareholders. Thank you for your time and your continued confidence.

I'll now turn the time back over to Heather Street, our Vice President of Human Resources.

Heather Street

Thank you, Steve. Before we conclude today's call, we would like to open the floor for questions. As a reminder, to ask a question, please use the Zoom platform to raise your hand to unmute or you may submit questions through the Zoom Q&A panel, include your name and organization and will take us as many as time permits.

Not seeing any questions. Are there any further questions either in the chat or if you'd like to unmute.

All right. If we have no questions, we'll note the end of our Q&A. Thank you again for your participation. We value engagement and thoughtful input. For more information about the meeting, our latest financial reports or any other investor materials, we invite you to visit the Investor Relations section of our website at www.securitynational.com. We appreciate your continued support of Security National Financial Corporation.

This concludes our second quarter 2026 earnings call. We look forward to speaking with you again soon. Thank you, and have a great day.