Security National Financial Corporation Reports Financial Results for the Third Quarter Ended September 30, 2013

  Security National Financial Corporation Reports Financial Results for the
  Third Quarter Ended September 30, 2013

Business Wire

SALT LAKE CITY -- November 18, 2013

Security National Financial Corporation (SNFC) (NASDAQ symbol "SNFCA")
announced financial results for the third quarter ended September 30, 2013.

SNFC announced revenues of $50,552,000 for the three months ended September
30, 2013. This represents a 20.7% decrease from 2012. Pre-tax earnings from
operations for the three month period decreased 67.9% from $6,132,000 in 2012
to $1,964,000. After-tax earnings decreased 68.2% from $3,990,000 in 2012 to
$1,266,000.

SNFC announced revenues of $166,737,000 for the nine months ended September
30, 2013. This represents a .5% decrease from 2012. Pre-tax earnings from
operations for the nine month period decreased from $13,497,000 in 2012 to
$9,661,000. After-tax earnings also decreased from $9,245,000 in 2012 to
$6,099,000.

Scott Quist, Chairman of the Board, President and Chief Executive Officer of
the Company, said, “I am particularly pleased with the results of our
operations for the first three quarters of 2013. Companywide this was our
fourth best nine month result in the history of the Company. As we entered
2013 we had cash and short term investments of almost $80 million due
primarily to a late 2012 reinsurance acquisition. That level of uninvested
assets gave the Life Segment a slow start to the year, but we have invested
$26 million of that amount which has improved our profitability markedly.
Mortality and persistency continue very positive trends and that with our
improved investment income resulted in the Life Segment's best third quarter.
As we continue our investing efforts, profitability should continue to
improve.

“Our Mortgage Segment is dealing well with the increase in interest rates and
the resulting loss of refinance volumes. As we all know, in May and June
interest rates essentially rose by a full percentage point, which effectively
shut off the majority of refinance transactions. Prior to that time,
industrywide refinance transactions comprised 77% of the loans closed
nationwide. Our Company’s refinance percentage was never that high and as a
result, we believe that we have gained market share as the market has shrunk.
During the third quarter our loan origination volume decreased 25% versus
2012, which we believe is a smaller decrease than that experienced by our
competitors as reported by the popular press. Currently, we expect our
origination volumes to be $2.2 billion at year end, a 12% decrease from 2012,
which we believe, if accomplished, will represent a gain in market share.
Profitability has been negatively affected as we rationalize costs to reflect
our current volumes and by margin compression from our competitors, but we
believe we have reason for optimism. Finally, over the last year we have
retained servicing rights from some of our own loan originations and currently
have a portfolio of about $750 million.

“Our Death Care Segment improved its earnings from operations prior to REO
related depreciation by 38% versus 2012. By way of explanation, much of our
REO is held by our Death Care Segment. The fluctuation of the depreciation
expense generated by our REO makes year to year comparisons of the death care
operations difficult. Nevertheless, our Death Care Segment EBITD margin was
slightly higher than 16% at the end of the third quarter and has consistently
improved over the last several years.”

SNFC has three business segments. The following table shows the revenues and
earnings before taxes for the three months and nine months ended September 30,
2013 as compared to 2012 for each of the three business segments:

For the three months ended September 30, 2013:

                        Revenues                                 Earnings (Losses) before Taxes
                          2013          2012          %            2013         2012          %
Life Insurance            $ 17,341,000   $ 16,330,000   6.2   %      $ 1,102,000   $ 922,000       19.5  %
                                                                                                   
Cemeteries/Mortuaries       2,959,000      2,720,000    8.8   %        13,000        (76,000   )   117.1 %
                                                                                                   
Mortgages                  30,252,000    44,698,000   (32.3 %)      849,000      5,286,000    (83.9 %)
                                                                                                   
Total                     $ 50,552,000   $ 63,748,000   (20.7 %)     $ 1,964,000   $ 6,132,000    (67.9 %)

For the nine months ended September 30, 2013:

                        Revenues                                  Earnings (Losses) before Taxes
                          2013           2012           %           2013         2012          %
Life Insurance            $ 51,383,000    $ 51,439,000    (0.1 %)     $ 2,358,000   $ 3,814,000    (38.2 %)
                                                                                                   
Cemeteries/Mortuaries       9,320,000       8,410,000     10.8 %        197,000       73,000       169.8 %
                                                                                                   
Mortgages                  106,034,000    107,750,000   (1.6 %)      7,106,000    9,610,000    (26.1 %)
                                                                                                   
Total                     $ 166,737,000   $ 167,599,000   (0.5 %)     $ 9,661,000   $ 13,497,000   (28.4 %)

Net earnings per common share were $.11 for the three months ended September
30, 2013, compared to $.36 per share for the prior year as adjusted for the
effect of annual stock dividends. Net earnings per common share was $.52 for
the nine months ended September 30, 2013, compared to $.92 per share for the
prior year as adjusted for the effect of annual stock dividends. Book value
per common share was $7.56 as of September 30, 2013, compared to $7.36 as of
December 31, 2012. 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 11,383,867 Class A
equivalent shares outstanding as of September 30, 2013.

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

Contact:

Security National Financial Corporation
Scott M. Quist or Garrett S. Sill, 801-264-1060
fax: 801-265-9882
 
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