Security National Financial Corporation Reports Financial Results for the Quarter Ended March 31, 2018
May 15 2018 - 12:50PM
Security National Financial Corporation (SNFC) (NASDAQ:SNFCA)
announced financial results for the quarter ended March 31, 2018.
For the three months ended March 31, 2018, SNFC’s
after-tax earnings from operations increased 810.0% from $1,860,000
in 2017 to $16,926,000 in 2018, on a 15.9% increase in revenues to
$82,076,000.
Scott M. Quist, President of the Company, said, “To
have a quarter where we recognize after tax income of nearly
$17,000,000 is extraordinary by any standard. That represents an
11% return on equity for the first quarter alone. Adding the 4th
quarter of 2017 to this first quarter and we have increased
shareholders equity by more than $26,000,000, or 19% in the last 6
months. Without question much of that increase can be attributed to
changes in tax law and asset dispositions, but still those are
impressive numbers.
Our previously disclosed sale of the Dry Creek
apartment complex comprised about $17.6 million of our after tax
first quarter earnings. We entered into that sale simply because we
thought the timing was right. Without question the profit we
recognized on that sale reflected development efforts, market, and
other forces that had been at work over a several years period of
time and during those years we very well may have recorded
operational losses attributable to that property.
Nevertheless, those were the results accomplished at the time we
decided to sell.
Operationally, two of our three business segments
performed well during the first quarter. Our life segment increased
revenue 10% YOY and increased before tax earnings 14% YOY.
That was despite a nearly $700,000 increase in interest and
depreciation costs attributable to our Center 53 office building
development. Lease up has been slower than we have liked at
that development, reflecting a slowing, we believe, in the office
environment in Salt Lake City, but we remain optimistic. Our
Memorial segment increased revenue 4.7% and pretax profits by
13.4%. Our mortgage segment experienced a troubling quarter
recording a $2.7 million after tax loss on a 33% decrease in
revenue. Our units funded decreased by 23% compared to year
ago levels, with the additional 10% decrease in revenue coming from
margin compression due to competitive pressures. Of course,
the first quarter of any year is traditionally the weakest quarter
for mortgage production and profitability, but we believe we have
not addressed cost and operational issues quickly enough given the
continuing very challenging environment. We are committed to
that task. Still, viewing the Company as a whole, it is
difficult to be too critical of a nearly $17 million first
quarter.
SNFC has three business segments. The following
table shows the revenues and earnings before taxes for the three
months ended March 31, 2018, as compared to 2017, for each of the
three business segments:
|
|
|
|
|
Revenues |
|
Earnings before Taxes |
|
|
2018 |
|
|
2017 |
|
|
|
|
2018 |
|
|
|
2017 |
|
|
Life
Insurance |
$ |
50,860,000 |
|
$ |
26,159,000 |
|
94.4 |
% |
|
$ |
23,711,000 |
|
|
$ |
1,484,000 |
|
1,497.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Cemeteries/Mortuaries |
$ |
3,776,000 |
|
$ |
3,605,000 |
|
4.7 |
% |
|
$ |
861,000 |
|
|
$ |
759,000 |
|
13.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Mortgages |
$ |
27,440,000 |
|
$ |
41,064,000 |
|
(33.2 |
%) |
|
$ |
(3,385,000 |
) |
|
$ |
655,000 |
|
(616.8 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
Total |
$ |
82,076,000 |
|
$ |
70,828,000 |
|
15.9 |
% |
|
$ |
21,187,000 |
|
|
$ |
2,898,000 |
|
631.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per common share was $1.04 for the
three months ended March 31, 2018, compared to net earnings of $.11
per share for the prior year, as adjusted for the effect of annual
stock dividends. Book value per common share was $10.25 as of
March 31, 2018, compared to $9.23 as of December 31,
2017.
The Company has two classes of common stock
outstanding, Class A and Class C. There were 16,189,923 Class
A equivalent shares outstanding as of March 31, 2018.
If there are any questions, please contact Mr.
Garrett S. Sill, Mr. Brian Nelsen or Mr. Scott Quist at:
Security National Financial CorporationP.O. Box
57250Salt Lake City, Utah 84157Phone (801) 264-1060Fax
(801) 265-9882
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