Security National Financial Corporation Reports Financial Results for the Quarter Ended June 30, 2020
August 17 2020 - 11:00AM
Security National Financial Corporation (SNFC) (NASDAQ symbol
"SNFCA") announced financial results for the quarter ended June 30,
2020.
For the three months ended June 30, 2020, SNFC’s
after-tax earnings from operations increased 490.7% from $3,480,000
in 2019 to $20,557,000 in 2020, on a 73.4% increase in revenues to
$118,662,000. SNFC’s after tax earnings for the six months
ended June 30, 2020 increased 306.3% to $21,982,000 from $5,410,000
in 2019.
Scott M. Quist, President of the Company, said,
“We are pleased with the operational performance of our company for
the second quarter, and year-to-date. Any time profitability
is up approximately 500% quarter over quarter, up essentially 300%
YOY, and earning a 13% return on equity for the first half of the
year, we should be pleased. For Q2 all of our business
segments delivered very solid results.
“The majority of our income improvement came
from our mortgage segment. The economic disruptions caused by
the pandemic have done several things. First, interest rates
decreased considerably since January 1, which not only spurred
refinance volumes but also made purchase transactions more
affordable. Both factors led to significantly increased
origination volume. Second, because of broad pandemic related
economic disruptions, the secondary markets have provided generally
higher margins on the sale of loans for those institutions having
the financial wherewithal to take advantage. I
think it fair to say that in the first half of 2020 mortgage banks
that had a strong and liquid capital base and vibrant sales force
were economically rewarded.
“Our insurance segment’s operational income is
considerably more nuanced. Our Kilpatrick Life Insurance
Company acquisition (approximately $200,000,000 asset size), which
closed last December, is getting close to being fully
integrated. Kilpatrick experienced losses during the first
four months of 2020, as was anticipated, but now appears to be
profitable. Considerable work has been done with our
excellent sales forces to implement needed compensation and
organization changes. The same is true for internal
operations. However, during the same period that Kilpatrick
was becoming profitable, the effects of Covid-19 related death
claims became more pronounced throughout our insurance
segment. Suffice it to say that YTD our insurance segment’s
overall death claims are up by about 15% over 2019 levels and were
up for the month of June by approximately 50% over June 2019.
I don’t know whether the 50% number is a fair predictor of the
future, but obviously Covid-19 claims are having, and will continue
to have, an impact. Lastly, obtaining necessary investment
yields within acceptable risk tolerances is becoming more difficult
in this low interest rate environment. We do not anticipate
those economic circumstances changing over the near term.
“Our Memorial segment delivered a very solid Q2
and YTD with operational income increasing 42% YTD over 2019. Much
of that improvement, but not all, was driven by increasing preneed
cemetery sales. 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 four years. In my view, such
excellent financial results are the 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 three months ended June 30, 2020, as compared to 2019, for each
of the three business segments:
|
|
Revenues |
|
Earnings before Taxes |
|
|
2020 |
|
|
2019 |
|
|
|
|
2020 |
|
|
2019 |
|
|
Life
Insurance |
$ |
37,789,000 |
|
$ |
28,607,000 |
|
32.1 |
% |
|
$ |
3,670,000 |
|
$ |
1,219,000 |
|
201.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Cemeteries/Mortuaries |
$ |
5,306,000 |
|
$ |
4,543,000 |
|
16.8 |
% |
|
$ |
1,549,000 |
|
$ |
1,024,000 |
|
51.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Mortgages |
$ |
75,567,000 |
|
$ |
35,295,000 |
|
114.1 |
% |
|
$ |
21,975,000 |
|
$ |
2,381,000 |
|
822.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Total |
$ |
118,662,000 |
|
$ |
68,445,000 |
|
73.4 |
% |
|
$ |
27,194,000 |
|
$ |
4,624,000 |
|
488.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six months ended June 30, 2020: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
Earnings before Taxes |
|
|
2020 |
|
|
2019 |
|
|
|
|
2020 |
|
|
2019 |
|
|
Life
Insurance |
$ |
70,994,000 |
|
$ |
59,112,000 |
|
20.1 |
% |
|
$ |
601,000 |
|
$ |
3,304,000 |
|
(81.8 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
Cemeteries/Mortuaries |
$ |
9,320,000 |
|
$ |
8,902,000 |
|
4.7 |
% |
|
$ |
1,653,000 |
|
$ |
2,209,000 |
|
(25.2 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
Mortgages |
$ |
117,957,000 |
|
$ |
61,925,000 |
|
90.5 |
% |
|
$ |
26,414,000 |
|
$ |
1,543,000 |
|
1,611.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Total |
$ |
198,271,000 |
|
$ |
129,939,000 |
|
52.6 |
% |
|
$ |
28,668,000 |
|
$ |
7,056,000 |
|
306.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per common share was $1.10 for the
three months ended June 30, 2020, compared to net earnings of $0.19
per share for the prior year, as adjusted for the effect of annual
stock dividends. Book value per common share was $11.87 as of
June 30, 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 18,759,149 Class
A equivalent shares outstanding as of June 30, 2020.
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
Security National Financ... (NASDAQ:SNFCA)
Historical Stock Chart
From Mar 2024 to Apr 2024
Security National Financ... (NASDAQ:SNFCA)
Historical Stock Chart
From Apr 2023 to Apr 2024