Security National Financial Corporation Reports Financial Results for the Year Ended December 31, 2020
March 31 2021 - 12:30PM
Security National Financial Corporation (SNFC) (NASDAQ symbol
"SNFCA") announced financial results for the year ended December
31, 2020.
For the twelve months ended December 31, 2020,
SNFC’s after-tax earnings from operations increased 410% from
$10,894,000 in 2019 to $55,597,000 in 2020, on a 70% increase in
revenues to $481,463,000.
Scott Quist, Chairman of the Board, President,
and Chief Executive Officer of SNFC, said, “For the year total
revenues increased 94%, profitability increased over 400%, and we
achieved a 21% return on equity. Those spectacular results,
delivered in difficult circumstances, reflect the excellence of our
Company and its people. I applaud the efforts of all our teams in
their considerable accomplishment. Most importantly, every business
segment delivered impressive results.
“Our mortgage segment was able to take great
advantage of the financial market circumstances presented this
year. The pandemic-created interest rate declines spurred refinance
volumes, made purchase transactions more affordable, and provided
generally higher margins. However, taking advantage of the
favorable conditions created great operational and staffing
problems in the midst of the pandemic, where hiring and training
were very difficult. Our hardworking staff met the challenge of the
doubled volumes by increasing efficiency in a very difficult
environment. Unexpectedly, towards the end of Q4 we were approached
regarding the settlement of the 11-year-old Lehman litigation. The
litigation had progressed to the point where expensive trial
preparation was about to commence, and while we believed we had
strong defenses to the claims, weighing the costs of trial versus
the certainty of results via settlement, we elected to settle.
While the settlement cost was ultimately greater than I
anticipated, I feel strongly that the correct decision was to put
the matter behind us. Lastly, during 2020 we kept our purchase
mortgage strategy firmly in place. While the market naturally
provided refinance transactions which we have taken advantage of,
more notably we increased our purchase mortgage transactions by
60%. Suffice it to say, our Mortgage Segment provided spectacular
results.
“Our Insurance Segment also provided spectacular
results improving profitability 81% in, again, a very challenging
year. While year-over-year death claim comparisons are difficult
for a number of reasons, to include the acquisition of Kilpatrick
Life and the vagaries inherent in determining COVID related claims,
what I can say is that death claims increased 40% YOY. While it
does seem that the pace of COVID related claims has been abating, I
think it fair to say that COVID will continue to have a financial
impact for some time to come. Offsetting that claims increase was
improved investment income due to better cash utilization,
increased asset size, the lease-up of our Center 53 office
development, and improved operating costs. Companywide, we
transitioned to an 85% work from home model which made the
operational cost achievement more impressive. Our Kilpatrick Life
Insurance Company acquisition has been integrated with much of that
work being accomplished during difficult COVID related
circumstances.
“Our Memorial segment also provided spectacular
results with operational income increasing 83% YOY. Again, this was
accomplished during difficult COVID related circumstances where,
for a period of time, traditional funeral services were essentially
banned and even when bans were lifted there were significant size
and other restrictions placed upon the funeral services.
Substantially contributing to that profit improvement was increased
preneed cemetery sales, but basic mortuary and cemetery operations
were also significant contributors. This excellent performance is
not an isolated instance. It is instructive to note that our
Memorial segment has achieved an average 24% compound annual growth
rate in operational income over the last six years. In my view,
such excellent financial results are the natural consequence of
continuously providing superb customer care and consumer experience
during very difficult times.”
SNFC has three business segments. The following
table shows the revenues and earnings before taxes for the twelve
months ended December 31, 2020, as compared to 2019, for each of
the three business segments:
|
Revenues |
|
Earnings before Taxes |
|
2020 |
|
2019 |
|
|
|
2020 |
|
2019 |
|
|
Life Insurance |
$ |
151,042,000 |
|
$ |
125,739,000 |
|
20.1% |
|
$ |
11,923,000 |
|
$ |
6,566,000 |
|
81.6% |
|
|
|
|
|
|
|
|
|
|
|
|
Cemeteries/Mortuaries |
$ |
21,046,000 |
|
$ |
16,502,000 |
|
27.5% |
|
$ |
4,399,000 |
|
$ |
2,660,000 |
|
65.4% |
|
|
|
|
|
|
|
|
|
|
|
|
Mortgages |
$ |
309,375,000 |
|
$ |
140,820,000 |
|
119.7% |
|
$ |
55,128,000 |
|
$ |
4,718,000 |
|
1,068.5% |
|
|
|
|
|
|
|
|
|
|
|
|
Total |
$ |
481,463,000 |
|
$ |
283,061,000 |
|
70.1% |
|
$ |
71,450,000 |
|
$ |
13,944,000 |
|
412.4% |
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per common share was $2.88 for the twelve months
ended December 31, 2020, compared to net earnings of $.58 per share
for the prior year, as adjusted for the effect of annual stock
dividends. Book value per common share was $13.87 as of December
31, 2020, compared to $10.86 as of December 31, 2019.
The Company has two classes of common stock
outstanding, Class A and Class C. There were 19,036,549 Class A
equivalent shares outstanding as of December 31, 2020.
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
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