Part I - Financial Information This section provides the company's unaudited condensed consolidated financial statements, management's discussion and analysis, market risk disclosures, and internal controls for the period Financial Statements This section presents the unaudited condensed consolidated financial statements for Security National Financial Corporation as of and for the three months ended March 31, 2025, along with detailed notes explaining the basis of presentation, accounting policies, and financial instrument details Condensed Consolidated Balance Sheets Total assets increased to $1.524 billion as of March 31, 2025, driven by investments and loans, while liabilities and stockholders' equity also saw increases Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Total investments | $998,094 | $966,391 | | Cash and cash equivalents | $132,946 | $140,546 | | Loans held for sale | $139,834 | $131,181 | | Total Assets | $1,524,250 | $1,489,807 | | Liabilities & Equity | | | | Future policy benefits and unpaid claims | $953,001 | $944,812 | | Bank and other loans payable | $122,823 | $106,740 | | Total Liabilities | $1,177,757 | $1,151,025 | | Total Stockholders' Equity | $346,494 | $338,782 | | Total Liabilities and Stockholders' Equity | $1,524,250 | $1,489,807 | Condensed Consolidated Statements of Earnings Net earnings significantly decreased to $4.3 million in Q1 2025 from $7.5 million in Q1 2024, as total revenues increased slightly but were offset by a larger rise in benefits and expenses, leading to diluted EPS falling to $0.18 Statement of Earnings Summary (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenues | $82,740 | $81,188 | | Total Benefits and Expenses | $77,169 | $71,569 | | Earnings Before Income Taxes | $5,571 | $9,619 | | Net Earnings | $4,338 | $7,475 | | Net Earnings per Share (Diluted) | $0.18 | $0.31 | Condensed Consolidated Statements of Comprehensive Income Comprehensive income increased to $7.3 million in Q1 2025 from $6.6 million in Q1 2024, driven by a positive swing in other comprehensive income from unrealized gains on securities, despite a decline in net earnings Comprehensive Income Summary (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Earnings | $4,338 | $7,475 | | Other Comprehensive Income (Loss), net of tax | $2,998 | $(895) | | Comprehensive Income | $7,336 | $6,579 | Condensed Consolidated Statements of Stockholders' Equity Total stockholders' equity increased to $346.5 million as of March 2025, primarily driven by $4.3 million in net earnings and $3.0 million in other comprehensive income, partially offset by treasury stock purchases - Key drivers for the change in stockholders' equity in Q1 2025 were net earnings of $4.3 million and other comprehensive income of $3.0 million23 Condensed Consolidated Statements of Cash Flows Net cash provided by operating activities decreased to $9.6 million in Q1 2025, while investing activities used $29.3 million, and financing activities provided $14.9 million, resulting in a net $4.8 million decrease in cash Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $9,586 | $25,077 | | Net Cash from (used in) Investing Activities | $(29,267) | $1,699 | | Net Cash from (used in) Financing Activities | $14,870 | $(2,149) | | Net Change in Cash | $(4,810) | $24,627 | Notes to Condensed Consolidated Financial Statements The notes detail accounting policies, significant estimates, recent pronouncements, investment portfolios, fair value measurements, derivatives, segment information, and other commitments and contingencies - The financial statements are prepared in accordance with U.S. GAAP for interim reporting and should be read with the 2024 Annual Report, with management noting material estimates for derivative values, deferred acquisition costs, future policy benefits, and loan loss reserves2931 - The company is preparing to adopt ASU 2018-12 regarding long-duration insurance contracts, effective for the annual period ending December 31, 2025, which is expected to impact its financial position and results34 Management's Discussion and Analysis of Financial Condition and Results of Operations Consolidated revenues increased by 1.9% to $82.7 million in Q1 2025, but a 7.8% rise in expenses led to a 42.1% drop in pre-tax earnings, with varied segment performance and maintained liquidity - The company's core strategies are focusing on niche insurance products (funeral plans), expanding the cemetery and mortuary business, and originating mortgage loans281 - Total revenues increased by $1.6 million (1.9%) in Q1 2025 compared to Q1 2024, driven by higher mortgage fee income, while total benefits and expenses increased by $5.6 million (7.8%), primarily due to higher commissions and personnel costs296308 - The company's liquidity is considered adequate, with cash flow from operations and investments sufficient to fund long-term policyholder liabilities and current operating expenses, and compliance with all debt covenants as of March 31, 2025310311 Insurance Operations The insurance segment's net earnings fell 38% to $4.1 million in Q1 2025, primarily due to increased SG&A expenses and decreased investment gains, despite nearly flat revenues - The company focuses on funeral plan policies, which it considers a less competitive marketing niche282283 Insurance Operations Financial Results (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Segment Revenues | $50,607 | $51,350 | | Segment Net Earnings | $4,146 | $6,712 | Cemetery and Mortuary Operations The cemetery and mortuary segment's net earnings decreased 25% to $1.7 million in Q1 2025, mainly due to lower net investment income and gains, despite a 5% rise in segment revenues Cemetery and Mortuary Operations Financial Results (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Segment Revenues | $8,203 | $8,872 | | Segment Net Earnings | $1,703 | $2,267 | Mortgage Operations The mortgage segment reported a net loss of $1.51 million in Q1 2025, nearly flat year-over-year, as 13% revenue growth driven by secondary gains was offset by higher expenses, with loan origination volume increasing to $517.9 million - Loan origination volume increased to 1,508 loans ($517.9 million total volume) in Q1 2025, up from 1,486 loans ($465.6 million total volume) in Q1 2024292 Mortgage Operations Financial Results (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Segment Revenues | $25,456 | $22,577 | | Segment Net Loss | $(1,511) | $(1,504) | Liquidity and Capital Resources The company maintains adequate liquidity and capital resources, with cash from operations decreasing to $9.6 million in Q1 2025, while total capitalization increased to $469.3 million and life insurance subsidiaries' statutory capital reached $121.5 million - The company was in compliance with all covenants under its mortgage warehouse lines of credit as of March 31, 2025, and has determined it has sufficient funds to continue its business model311 - Stockholders' equity as a percent of total capitalization was 73.8% as of March 31, 2025, down from 76.1% at the end of 2024317 - The combined statutory capital and surplus of the life insurance subsidiaries was approximately $121.5 million as of March 31, 2025, up from $120.2 million at year-end 2024320 Quantitative and Qualitative Disclosures about Market Risk As a smaller reporting company, the Company is not required to provide the information typically disclosed under this item - The company is exempt from this disclosure requirement due to its status as a smaller reporting company321 Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no significant changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the quarter322 - No significant changes to internal control over financial reporting occurred during the quarter323 Part II - Other Information This section details legal proceedings, risk factors, equity transactions, and other required disclosures, including certifications and exhibits Legal Proceedings The company is not a party to any material legal proceedings outside the ordinary course of business that would be expected to have a material adverse effect on its financial condition or results of operation - There are no material legal proceedings to report325 Risk Factors As a smaller reporting company, the Company is not required to provide the information typically disclosed under this item - The company is exempt from this disclosure requirement due to its status as a smaller reporting company326 Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered securities sales and executed a $1,000,000 Class A Common Stock repurchase plan on April 22, 2025, with no repurchases made in Q1 2025 - No unregistered securities were sold during the period327 - A new 10b5-1 stock repurchase plan for up to $1,000,000 of Class A stock was executed on April 22, 2025, with no shares repurchased in Q1 2025328 Defaults Upon Senior Securities The company reported no defaults upon senior securities - None332 Mine Safety Disclosures The company reported no mine safety disclosures - None333 Other Information During the first quarter of 2025, no Section 16 officers or directors adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement - No officers or directors adopted, modified, or terminated a trading arrangement during the quarter334 Exhibits This section lists the exhibits filed with the report, including CEO and CFO certifications, XBRL data files, and references to previously filed corporate documents - Exhibits filed include Sarbanes-Oxley certifications (302 and 906) and Inline XBRL documents338
Security National Financial (SNFCA) - 2025 Q1 - Quarterly Report