Security National Financial Corporation Reports Financial Results for the
Year Ended December 31, 2012
SALT LAKE CITY -- April 01, 2013
Security National Financial Corporation (SNFC) (NASDAQ symbol "SNFCA")
announced financial results for the year ended December 31, 2012.
SNFC announced revenues of $234,260,000 for the year ending December 31, 2012.
Pre-tax earnings from operations increased from a gain of $1,237,000 in 2011
to a gain of $21,351,000 in 2012. Net after tax earnings for the twelve month
period increased 1,187% from $1,299,000 to $16,713,000.
Scott Quist, Chairman of the Board, President and Chief Executive Officer of
SNFC, noted: “The 4^th quarter marked continued improvement in all of our
segments, which is reflected in our nearly 1,200% improvement in year end
after tax earnings. In our life segment, focusing on year end numbers, we
realized a 70% increase in earnings before taxes on basically flat life
related revenues. These improvements reflect the results of our continued
improvement in the quality of our direct life sales, and improved investment
results. Considerable effort has gone into improving policy persistency and
mortality and the financial results are indicative of what has been
accomplished. Our acquisition strategy and internal growth has resulted in a
better than 10% growth in insurance related assets that need to be deployed in
appropriate income producing investments. At year end, we had over $40,000,000
in cash or equivalents. As those investments are achieved, profitability
“In our death care segment, our operating profit before realized gains and
depreciation of our real estate and related expenses improved 147% from
$345,000 in 2011 to $852,000 in 2012. Those results are reflective of improved
performance of our ongoing operations. Thus while total revenues were
essentially flat, the increase in earnings demonstrates considerable
operational improvement. Again, as a note of explanation, our death care
operating results are sometimes difficult to interpret because this segment
includes our real estate and its attendant depreciation and related expenses.
Nevertheless, our death care operating results showed impressive operational
improvement in 2012.
“We are particularly pleased with the results of our mortgage segment. Over
the last several years, we have spent considerable effort converting what had
been a wholesale mortgage origination sales force to a retail mortgage
origination sales force with a focus on purchase related originations. To that
end, we believe that our percentage of purchase related transactions is
approximately 57%, which puts us in the top decile with regards to our peer
groups and indicates a more stable origination platform. Our percentage of
business now related to retail stands at 70% with 30% wholesale related.
Despite the industry wide volume decrease in 2012, we believe we gained market
share during the year. While there remains considerable uncertainty in the
mortgage and housing markets, we believe our results show positive adaptation
to circumstances and significant accomplishment.
“There has been considerable movement in our stock price recently and the
online commentary has been both positive and negative. We are aware, of
course, of the large short position that evidenced itself in our stock at year
end. Using the methodology and time periods required in our SEC disclosures,
which uses 2008 as the base year and goes through year end 2012, we exceeded
the Standard and Poor’s 500 performance 50% of the time, and met or exceeded
our peer group performance 75% of the time. The fourth quarter of 2012 marked
our 8^th consecutive quarterly growth in net income. Again, using 2008 as our
base, we have grown our assets on average over 7% per year and our
shareholders equity over 10% per year on a compounded basis. We believe that
to be an enviable record in view of the challenges and uncertainty in the
economic environment and the financial services industry within which we are
SNFC has three business segments. The following table shows the revenues and
earnings (loss) before taxes for the twelve months ended December 31, 2012 as
compared to 2011 for each of the three business segments:
Revenues Earnings (Loss) before Taxes
2012 2011 2012 2011
Life Insurance $ 66,858,000 $ 67,221,000 -1 % $ 4,591,000 $ 2,698,000
Cemeteries/Mortuaries $ 11,343,000 $ 11,937,000 -5 % $ 219,000 $ 461,000
Mortgages $ 156,059,000 $ 80,409,000 94 % $ 16,541,000 $ (1,922,000 )
Total $ 234,260,000 $ 159,567,000 47 % $ 21,351,000 $ 1,237,000
Net earnings per common share was $1.65 for the twelve months ended December
31, 2012, compared to net earnings of $.13 per share for the prior year as
adjusted for the effect of annual stock dividends. Book value per common share
was $7.36 as of December 31, 2012, compared to $6.48 as of December 31, 2011.
The Company has two classes of common stock outstanding, Class A and Class C.
The Class C shares share in distribution of earnings and capital on a 10-for-1
basis with the Class A shares; therefore, for earnings per share and book
value per share calculations, the Class C shares are converted to Class A
shares on a 10-for-1 basis. There were 10,843,570 Class A equivalent shares
outstanding as of December 31, 2012.
If there are any questions, please contact Mr. Scott M. Quist or Mr. Garrett
S. Sill at:
Security National Financial Corporation
P.O. Box 57250
Salt Lake City, Utah 84157
Phone (801) 264-1060
Fax (801) 265-9882
Security National Financial Corporation
Scott M. Quist or Garrett S. Sill
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