SALT LAKE CITY--(BUSINESS WIRE)--
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 4th 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 $1.63 as of 12-31-2013."
SNFC has three business segments. The following table shows the revenues
and earnings (loss) before taxes for the twelve months ended December
31, 2013 as compared to 2012 for each of the three business segments:
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Revenues
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Earnings (Loss) before Taxes
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2013
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2012
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2013
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2012
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Life Insurance
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$
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68,804,000
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$
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66,858,000
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2.91
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%
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$
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2,868,000
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$
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4,591,000
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(37.53
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%)
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Cemeteries/Mortuaries
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$
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12,380,000
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$
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11,343,000
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9.14
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%
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$
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223,000
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$
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219,000
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1.83
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%
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Mortgages
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$
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134,131,000
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$
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156,059,000
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(14.05
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%)
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$
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6,732,000
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$
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16,541,000
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(59.30
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%)
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Total
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$
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215,315,000
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$
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234,260,000
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(8.09
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%)
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$
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9,823,000
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$
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21,351,000
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(53.99
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%)
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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
fax: 801-265-9882
Source: Security National Financial Corporation
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