Security National Financial Corporation Reports Financial Results for the Quarter Ended September 30, 2020

Rhea-AI Summary

Security National Financial Corporation (SNFCA) reported significant financial growth for Q3 2020. After-tax earnings surged 710.2% to $29.3 million, up from $3.6 million in 2019. Revenues increased by 94% to $146.2 million. Year-to-date figures reflected a 468.1% rise in after-tax earnings to $51.3 million. The mortgage segment experienced a 141.6% revenue increase due to heightened refinance volumes, while the insurance segment benefitted from the integration of Kilpatrick Life Insurance Company, achieving profitability despite COVID-related challenges.

Positive

• After-tax earnings increased by 710.2% year-over-year to $29.3 million.
• Revenues rose 94% to $146.2 million in Q3 2020.
• Year-to-date after-tax earnings increased 468.1% to $51.3 million.
• Mortgages segment revenue increased 141.6% due to higher refinance volumes.
• Insurance segment turned profitable following Kilpatrick Life Insurance integration.

Negative

• COVID-19 related claims have increased approximately 20% year-to-date, impacting the insurance segment.
• Investment yields are becoming harder to achieve in the low interest rate environment.

SALT LAKE CITY, Nov. 16, 2020 (GLOBE NEWSWIRE) -- Security National Financial Corporation (SNFC) (NASDAQ symbol "SNFCA") announced financial results for the quarter ended September 30, 2020.

For the three months ended September 30, 2020, SNFC’s after-tax earnings from operations increased 710.2% from $3,617,000 in 2019 to $29,305,000 in 2020, on a 94.0% increase in revenues to $146,205,000. SNFC’s after tax earnings for the nine months ended September 30, 2020 increased 468.1% to $51,286,000 from $9,028,000 in 2019.

Scott M. Quist, President of the Company, said, “For the quarter, revenues increased 94%, profitability increased 700%, and YTD we have a 26% return on equity. I believe our third quarter is the best operational third quarter ever for each of our business segments. Those are spectacular results that have been delivered in difficult circumstances. I applaud the efforts of all our teams in their considerable accomplishment. Every business segment delivered impressive results.

“Our mortgage segment has taken great advantage of the circumstances presented this year. The pandemic-created interest rate decline spurred refinance volumes, made purchase transactions more affordable, and provided generally higher margins on the sale of loans for those institutions having the sales, operational, and financial wherewithal to take advantage. Our hardworking staff met the challenge of the more than doubled volumes by increasing efficiency in a very difficult workplace environment, such that costs only increased about 60% - an enviable accomplishment.

“Our insurance segment’s operational income reflects similar accomplishment. Our Kilpatrick Life Insurance Company acquisition, which closed last December, has been integrated. Much of that work was accomplished in difficult COVID-related circumstances. While Kilpatrick experienced losses during the first four months of 2020, as was anticipated, it is now profitable and contributing beyond expectations. COVID-related death claims have become more pronounced with death claims increasing about 20% YTD, and for September increasing approximately 65% over September 2019. I don’t know if the 65% 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 similarly delivered very solid Q3 and YTD result with revenues increasing 54% for the quarter and operational income increasing 100% YTD. Substantially contributing to those results is increased preneed cemetery sales, but mortuary and cemetery operations were also significant contributors. 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 six years. In my view, such excellent financial results are the natural 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 September 30, 2020, as compared to 2019, for each of the three business segments:

	Revenues									Earnings before Taxes
		2020			2019						2020			2019
Life Insurance	$	39,261,000		$	29,825,000		31.6	%		$	4,807,000		$	1,264,000		280.3	%
Cemeteries/Mortuaries	$	5,496,000		$	3,570,000		53.9	%		$	1,322,000		$	213,000		520.7	%
Mortgages	$	101,448,000		$	41,985,000		141.6	%		$	32,455,000		$	3,283,000		888.6	%
Total	$	146,205,000		$	75,380,000		94.0	%		$	38,584,000		$	4,760,000		710.6	%
For the nine months ended September 30, 2020:
	Revenues									Earnings before Taxes
		2020			2019						2020			2019
Life Insurance	$	110,255,000		$	88,937,000		24.0	%		$	5,408,000		$	4,568,000		18.4	%
Cemeteries/Mortuaries	$	14,816,000		$	12,473,000		18.8	%		$	2,976,000		$	2,422,000		22.9	%
Mortgages	$	219,404,000		$	103,909,000		111.2	%		$	58,868,000		$	4,826,000		1,119.8	%
Total	$	344,475,000		$	205,319,000		67.8	%		$	67,252,000		$	11,816,000		469.2	%

Net earnings per common share was $1.51 for the three months ended September 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 $13.53 as of September 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 18,919,980 Class A equivalent shares outstanding as of September 30, 2020.

If there are any questions, please contact Mr. Garrett S. Sill, Mr. Brian Nelsen or Mr. Scott Quist at:

Security National Financial Corporation
P.O. Box 57250
Salt Lake City, Utah 84157
Phone (801) 264-1060
Fax (801) 265-9882

 

 

 

FAQ

What were SNFCA's earnings for Q3 2020?

SNFCA reported after-tax earnings of $29.3 million for Q3 2020, a 710.2% increase from $3.6 million in 2019.

How much did SNFCA's revenues increase in Q3 2020?

Revenues for SNFCA increased by 94% to $146.2 million in Q3 2020.

What is the year-to-date financial performance of SNFCA?

Year-to-date, SNFCA's after-tax earnings rose 468.1% to $51.3 million.

How did the mortgage segment perform for SNFCA in Q3 2020?

The mortgage segment saw a 141.6% increase in revenues in Q3 2020.

What challenges did SNFCA's insurance segment face in 2020?

The insurance segment faced increased COVID-19 related death claims, rising about 20% year-to-date.