Security National Financial Corporation Reports Financial Results for the Quarter Ended March 31, 2017
May 15 2017 - 4:02PM
Security National Financial Corporation (SNFC)
(NASDAQ:SNFCA) announced financial results for the quarter
ended March 31, 2017.
For the three months ended March 31, 2017,
SNFC’s after-tax earnings from operations decreased 45.9% from
$4,192,000 in 2016 to $2,268,000 in 2017, on an 3.1% increase in
revenues to $69,452,000.
Scott Quist, Chairman of the Board, President
and Chief Executive Officer of SNFC, said, “While the first quarter
has to be considered disappointing since we experienced a decrease
over prior year earnings, it does nevertheless have some very
bright high points. Our Life segment and our Memorial segment
each had its best first quarter ever. The obvious issue was
in our Mortgage segment.
“Our Mortgage segment, after having delivered
excellent results for the last several years, struggled with
profitability in the first quarter. The main issue is our
considered strategy for growth versus the market changes we have
seen come to a head over the last 5 months. Our goal is
always double-digit profitable growth and we undertook expansion
plans, with their attendant costs, with that goal in mind. We
did anticipate rising rates with our purchase mortgage strategy,
but did not anticipate the rather severe housing inventory issues
and the consequent lack of growth in purchase mortgage volume that
we have experienced in almost all of our markets. By way of
illustration, CBRE estimates that since 2010 in Utah, one of our
major markets, there have been approximately 30,000 more household
formations than dwellings constructed. Salt Lake area home
closings declined significantly year-over-year despite an apparent
increase in buyer demand.
“It is axiomatic that if there is not a home to
buy, a mortgage is not needed. We clearly saw household
growth and the consequent need for purchase transactions, and
positioned ourselves well in that market, but we have been stymied
by the lower than expected activity which has resulted from
inventory shortages. Margins have been compressed, as we
expected, due to the rise in interest rates and decline in
refinance’s, but the costs that were undertaken with purchase
mortgage expansion in mind are simply too high for our
volume. Our pipelines are full of approved borrowers with no
available home to buy. We are working to bring our strategy
back into line with what the market can provide.
“On a positive note, our Life segment’s first
year sales remain strong and on track, mortality and persistency
are within assumptions, expenses remain at acceptable levels even
after absorbing the First Guaranty Insurance Company acquisition
costs, and our investment returns are good. On the Memorial
side, despite a nationwide low death rate during the first quarter,
preneed sales are improving and we saw our operational profit
increase significantly due to a customer centered focus for both at
need and preneed sales.” SNFC has three business
segments. The following table shows the revenues and earnings
before taxes for the three months ended March 31, 2017, as compared
to 2016, for each of the three business segments:
|
Revenues |
|
Earnings before Taxes |
|
|
|
2017 |
|
|
2016 |
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
Life
Insurance |
$ |
26,159,000 |
|
$ |
22,075,000 |
|
18.5 |
% |
|
$ |
1,869,000 |
|
|
$ |
1,065,000 |
|
75.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cemeteries/Mortuaries |
$ |
3,605,000 |
|
$ |
3,331,000 |
|
8.2 |
% |
|
$ |
759,000 |
|
|
$ |
469,000 |
|
61.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgages |
$ |
39,688,000 |
|
$ |
41,949,000 |
|
(5.4 |
%) |
|
$ |
(360,000 |
) |
|
$ |
2,658,000 |
|
(113.5 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
$ |
69,452,000 |
|
$ |
67,355,000 |
|
3.1 |
% |
|
$ |
2,268,000 |
|
|
$ |
4,192,000 |
|
(45.9 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per common share was $0.09 for the three months
ended March 31, 2017, compared to net earnings of $0.17 per share
for the prior year, as adjusted for the effect of annual stock
dividends. Book value per common share was $8.64 as of March
31, 2017, compared to $8.54 as of March 31, 2016.
The Company has two classes of common stock
outstanding, Class A and Class C. There were 15,035,153 Class
A equivalent shares outstanding as of March 31, 2017.
If there are any questions, please contact Mr. Garrett S. Sill, Mr. Brian Nelsen or Mr. Scott Quist at:
Security National Financial Corporation
P.O. Box 57250
Salt Lake City, Utah 84157
Phone (801) 264-1060
Fax (801) 265-9882
Security National Financ... (NASDAQ:SNFCA)
Historical Stock Chart
From Apr 2024 to May 2024
Security National Financ... (NASDAQ:SNFCA)
Historical Stock Chart
From May 2023 to May 2024