Security National Financial Corporation Reports Financial Results for the Quarter Ended March 31, 2023
May 15 2023 - 12:07PM
Security National Financial Corporation (SNFC) (NASDAQ symbol
"SNFCA") announced financial results for the quarter ended March
31, 2023.
For the three months ended March 31, 2023,
SNFC’s after-tax earnings from operations decreased 61% from
$3,229,000 in 2022 to $1,240,000 in 2023, on a 22% decrease in
revenues to $79,501,000.
Scott M. Quist, President of the Company, said:
“While we are never pleased with quarterly decreases in income, I
think that a deeper analysis of our business segment performance is
warranted. For our Life Insurance Segment this is the
best Q1 performance in our history. That excellent performance is
based upon two factors; increased investment income and improved
efficiency. The increased investment income is due to both the
much-publicized increase in interest rates and good execution of
our longer-term investment strategies, such as our construction
lending and portfolio lending products. The improved efficiency is
evidenced by our good cost containment in an inflationary
environment.
“In our Memorial Segment, we simply experienced
a drop in case count as compared to 2022, which decline we believe
is consistent with death rate declines in our market areas. So, we
believe we have maintained market share. Our 12% drop in earnings
is significantly less than our publicly-traded peers to which we
have available comparable financial results. Depending upon which
publicly-traded company we are comparing, we are from 22 to 35
percentage points better, as measured by changes in earnings before
taxes.
“Our Mortgage Segment business continues to be
negatively affected by the increase in interest rates.
Compared to Q1 2022 our loan origination volume declined 50%.
Having noted that decline, we nevertheless believe that we have
gained market share as we compare ourselves to national data from
the Mortgage Bankers Association and to other small to mid-sized
independent mortgage banks. Consistent with that conclusion, we
ended Q1 2023 with more producing loan officers than we had in Q1
2022. So, we believe our value propositions have gained traction on
the loan production side of the profit equation. Our cost structure
is still relatively high vis-a-vis our competitive peer group.
However, some of those higher costs are related to the higher
levels of services we deliberately offer to our loan officers and
end customers. But, there is also no doubt that we must and can
achieve greater efficiency as we continue to standardize our
processes across our different marketing regions. We are fully
engaged in that greater efficiency effort.
“Lastly, I would note that the fact we are
profitable in this environment, albeit at a lower level than
desired, reflects the balanced nature of our businesses. Increased
interest rates have, without question, decimated our Mortgage
Segment, but they have also provided an earnings boost to our Life
Insurance Segment. In my opinion, despite the quarterly drop in
death rates, our Memorial Segment provides a consistent growing and
balancing factor in most economic environments. Thus, while I
cannot say that I am pleased when our income goes down, I can say
that I am very pleased with our team’s performance in some tough
business environments. The increased market share in
our Mortgage Segment, better than peer group performance in our
Memorial Segment, and best-ever financial performance in our Life
Insurance Segment are not insignificant achievements.”
SNFC has three business segments. The following
table shows the revenues and earnings before taxes for the three
months ended March 31, 2023, as compared to 2022, for each of the
three business segments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
Earnings before Taxes |
|
2023 |
|
2022 |
|
|
|
2023 |
|
2022 |
|
|
Life Insurance |
$ |
45,415,000 |
|
|
$ |
41,502,000 |
|
|
9.4 |
% |
|
$ |
3,684,000 |
|
|
$ |
817,000 |
|
|
350.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Cemeteries/Mortuaries |
$ |
7,199,000 |
|
|
$ |
7,463,000 |
|
|
(3.5 |
%) |
|
$ |
1,784,000 |
|
|
$ |
2,020,000 |
|
|
(11.7 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
Mortgages |
$ |
26,887,000 |
|
|
$ |
53,461,000 |
|
|
(49.7 |
%) |
|
$ |
(3,883,000 |
) |
|
$ |
1,607,000 |
|
|
(341.6 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
Total |
$ |
79,501,000 |
|
|
$ |
102,426,000 |
|
|
(22.4 |
%) |
|
$ |
1,585,000 |
|
|
$ |
4,444,000 |
|
|
(64.3 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per common share was $.06 for the
three months ended March 31, 2023, compared to net earnings of $.15
per share for the prior year, as adjusted for the effect of annual
stock dividends. Book value per common share was $14.11 as of March
31, 2023, compared to $13.88 as of December 31, 2022.
The Company has two classes of common stock
outstanding, Class A and Class C. There were 21,050,778 Class A
equivalent shares outstanding as of March 31, 2023.
If there are any questions, please contact Mr.
Garrett S. Sill or Mr. Scott M. Quist at:
Security National
Financial CorporationP.O. Box 57250Salt Lake City, Utah 84157Phone:
(801) 264-1060
This press release contains statements that, if
not verifiable historical fact, may be viewed as forward-looking
statements that could predict future events or outcomes with
respect to the Company and its business. The predictions in these
statements will involve risk and uncertainties and, accordingly,
actual results may differ significantly from the results discussed
or implied in such forward-looking statements.
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