Security National Financial Corporation Reports Financial Results for the
Year Ended December 31, 2013
SALT LAKE CITY -- March 31, 2014
Security National Financial Corporation (SNFC) (NASDAQ: SNFCA) announced
financial results for the year ended December 31, 2013.
SNFC announced revenues of $215,000,000 for the year ending December 31, 2013.
Pre-tax earnings from operations decreased from a gain of $21,351,000 in 2012
to a gain of $9,824,000 in 2013. Net after tax earnings for the twelve month
period also decreased 54.6% from $16,713,000 to $7,586,000.
Scott Quist, Chairman of the Board, President and Chief Executive Officer of
SNFC, said “Of course we are keenly disappointed anytime our year over year
profitability decreases. That is certainly not our goal. Having said that, I
believe that our Company performed well in 2013 and took significant steps for
future growth in a difficult environment. As we all know, interest rates
increased dramatically on a percentage basis in May and June. While rates
remain low from a historical perspective, the May to June increase of 100
basis points effectively killed the refinance market which had produced some
75% of the industry mortgage origination volume prior to that time. The fact
that our mortgage segment remained profitable during the second half of the
year speaks well of our purchase mortgage origination emphasis strategy that
we have developed and employed for the last several years. As the refinance
market dried up price and margin competition greatly intensified as did the
competition for loan volume. The fact that our loan volume only decreased 12%
year over year I thought was a significant victory and gives reason for future
optimism. Finally, it should be noted that during these difficult times we
began to accumulate Mortgage Servicing Rights and as of year-end 2013 had were
servicing approximately $800,000,000 in loans.
“Our life segment had a decrease in earnings primarily because of the increase
in un-invested cash. At the beginning of 2013 cash and short term investments
had climbed to $74,000,000 primarily due to an acquisition at year end 2012.
Those cash balances had decreased some $24,000,000 by year end 2013 as the
cash was put to work and in my view will reduce further in 2014 as we continue
to invest in appropriate investments. An example of one of those investments
is the development of our Dry Creek Apartment project. We broke ground on that
$42,000,000 apartment development project in the 4^th quarter and project we
will start occupancy in the summer of 2014 with completion occurring
approximately one year following. That is an example of a quality higher
yielding project that simply takes time to develop in this historically low
interest rate environment. As we prudently invest cash, our life segment
earnings will naturally improve. Thus, to me the current level of un-invested
cash represents future growth. In that vein, it is significant to note that
total assets increased to an all-time high of $618,000,000 at year end 2013.
Three years ago in 2010 our asset base was only $467,000,000. It should be
noted that asset growth has occurred during challenging economic times and
that our capitalization % as measured by GAAP has improved to over 14% during
that same time.
“As has been noted in many of our filings, the operating results of our death
care segment are difficult to analyze given the REO rental income and
depreciation that is included in their statements. We have put much of our REO
into that segment to take advantage of their property management expertise.
Nevertheless, in 2013 our operating earnings in our death care segment
increased some 22% to over $1,000,000 in 2013. EBITD is now running in excess
of 15% which is an improvement over 2012.
“Lastly, I would note that even with a generally decreasing stock price in
2013, using the SEC disclosure criteria, $1 invested in our stock at
12-31-2009 would have grown some 63% to $1.63 as of 12-31-2013.”
SNFC has three business segments. The following table shows the revenues and
earnings (loss) before taxes for the twelve months ended December 31, 2013 as
compared to 2012 for each of the three business segments:
Revenues Earnings (Loss) before Taxes
2013 2012 2013 2012
Life Insurance $ 68,804,000 $ 66,858,000 2.91 % $ 2,868,000 $ 4,591,000 (37.53 %)
Cemeteries/Mortuaries $ 12,380,000 $ 11,343,000 9.14 % $ 223,000 $ 219,000 1.83 %
Mortgages $ 134,131,000 $ 156,059,000 (14.05 %) $ 6,732,000 $ 16,541,000 (59.30 %)
Total $ 215,315,000 $ 234,260,000 (8.09 %) $ 9,823,000 $ 21,351,000 (53.99 %)
Net earnings per common share was $0.61 for the twelve months ended December
31, 2013, compared to net earnings of $1.47 per share for the prior year as
adjusted for the effect of annual stock dividends. Book value per common share
was $7.31 as of December 31, 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 11,996,457 Class A equivalent shares
outstanding as of December 31, 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
Security National Financial Corporation
Scott M. Quist or Garrett S. Sill, 801-264-1060
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