Security National Financial Corporation Reports Financial Results For the Third Quarter of 2017
For the three months ended
"While we are not pleased with any year over year decline in profitability, I would note that this quarter we surpassed a significant financial milestone with our assets growing to over
"Nevertheless, this year continues to be challenging for our Company. To our understanding, the mortgage market has continued to contract nationwide. For Security National, our 2017 Q3 dollar volume, as compared to 2016 Q3, declined 16%. But, I would note that using the 2017 Q3 reports of major regional publicly-traded banks as a comparison, one reported a volume decrease of 22%, another reported a decrease of 48%, and a third announced it was exiting the business altogether, presumably due to market conditions. Our goal is absolutely to grow profitability, but we are experiencing margin compression and it is taking time to adjust many of the fixed costs that are the nature of the mortgage business.
"On the life insurance side, we are experiencing 16.5% higher death claims than in 2016. Our analysis shows those claims primarily coming from business older than 5 years, and some older than 10 years. Thus, we continue to believe that our underwriting and new business quality are good. We have experienced a general decline in investment income due to the reduced mortgage volumes in our mortgage segment, the impairment of some energy related bonds that we inherited through a business acquisition, and the amortization of financing fees received on residential construction loans over the life of the loan (less than one year) rather than recognizing them when received. Additionally, our depreciation and interest costs related to the Center 53 development have increased since receiving our certificate of occupancy for Building 1. We continue to believe that there is good market acceptance of our Center 53 development, but do not anticipate the first building to be leased up until well into 2018.
"Our cemetery and mortuary segment continues to see a 7 to 8% decrease in case counts versus 2016. We believe that this decline is consistent with our local market because we see a higher decline in the pre-need related deaths than in the at need related deaths. Our sales force has worked hard to make up for the revenue decline attributable to the decreased case counts by increasing pre-need sales."
SNFC has three business segments. The following table shows the revenues and earnings before taxes for the three months ended
| Revenues | Earnings before Taxes | |||||||||||||||||
| 2017 | 2016 | % | 2017 | 2016 | % | |||||||||||||
| Life Insurance | $ | 25,230,000 | $ | 24,972,000 | 1.0% | $ | 523,000 | $ | 2,140,000 | (75.6%) | ||||||||
| Cemeteries/Mortuaries | 2,988,000 | 2,901,000 | 3.0% | 237,000 | 55,000 | 330.9% | ||||||||||||
| Mortgages | 43,754,000 | 55,076,000 | (20.6%) | 378,000 | 4,379,000 | (91.4%) | ||||||||||||
| Total | $ | 71,972,000 | $ | 82,949,000 | (13.2%) | $ | 1,138,000 | $ | 6,574,000 | (82.7%) | ||||||||
For the
nine months ended
| Revenues | Earnings before Taxes | ||||||||||||||||
| 2017 | 2016 | % | 2017 | 2016 | % | ||||||||||||
| Life Insurance | $ | 77,112,000 | $ | 70,617,000 | 9.2% | $ | 4,825,000 | $ | 5,785,000 | (16.6%) | |||||||
| Cemeteries/Mortuaries | 9,907,000 | 10,045,000 | (1.4%) | 1,332,000 | 1,284,000 | 3.7% | |||||||||||
| Mortgages | 128,954,000 | 151,830,000 | (15.1%) | 1,873,000 | 11,561,000 | (83.8%) | |||||||||||
| Total | $ | 215,973,000 | $ | 232,492,000 | (7.1%) | $ | 8,030,000 | $ | 18,630,000 | (56.9%) | |||||||
The net gain per common share was
If there are any questions, please contact Mr.
P.O. Box 57250
Phone (801) 264-1060
Fax (801) 265-9882
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