Security National Financial (SNFCA) - 2023 Q3 - Quarterly Report

Revenue Performance - Total revenues decreased by $3,235,000, or 3.9%, to $80,242,000 for the three months ended September 30, 2023, from $83,477,000 for the comparable period in 2022[290] - Revenues from external customers for insurance operations totaled $47,199,000 for the three months ended September 30, 2023, representing a 9% increase from $43,118,000 in 2022[280] - Total revenues from mortgage operations decreased by 24% to $25,626,000 for the three months ended September 30, 2023, from $33,667,000 in 2022[289] - Total revenues decreased by $37,881,000, or 13.5%, to $243,589,000 for the nine-month period ended September 30, 2023, from $281,470,000 for the same period in 2022[302] Insurance Operations - Insurance premiums increased by $2,669,000, or 10.2%, to $28,907,000 for the three months ended September 30, 2023, compared to $26,238,000 for the same period in 2022[292] - Earnings before income taxes for insurance operations increased by 69% to $7,175,000 for the three months ended September 30, 2023, compared to $4,234,000 in 2022[280] - The lapse rate for life insurance in 2022 was 4.3%, an improvement from 4.8% in 2021, with the 2023 lapse rate to date being approximately the same as 2022[322] - The combined statutory capital and surplus of the Company's life insurance subsidiaries was $103,984,000 as of September 30, 2023, up from $94,254,000 as of December 31, 2022[323] Cemetery and Mortuary Operations - Cemetery revenues increased by 26% to $4,324,000 for the three months ended September 30, 2023, compared to $3,443,000 in 2022[283] - Net mortuary and cemetery sales increased by $764,000, or 11.8%, to $7,234,000 for the three-month period ended September 30, 2023, from $6,470,000 for the comparable period in 2022[294] - Profitability for the nine-month period ended September 30, 2023, increased in cemetery and mortuary operations due to a $1,415,000 increase in gains on investments and other assets[283] Mortgage Operations - SecurityNational Mortgage originated 5,680 loans totaling $1,708,831,000 for the nine months ended September 30, 2023, compared to 8,886 loans totaling $2,837,349,000 for the same period in 2022[288] Expenses and Benefits - Total benefits and expenses were $75,083,000, or 93.6% of total revenues, for the three-month period ended September 30, 2023, compared to $86,780,000, or 104.0% of total revenues, for the same period in 2022[297] - Death benefits, surrenders, and other policy benefits increased by an aggregate of $2,898,000, or 12.8%, to $25,622,000 for the three-month period ended September 30, 2023, from $22,724,000 for the comparable period in 2022[298] - Selling, general and administrative expenses decreased by $13,005,000, or 23.4%, to $42,652,000 for the three-month period ended September 30, 2023, from $55,657,000 for the same period in 2022[300] - Selling, general and administrative expenses decreased by $51,346,000, or 28.2%, to $131,052,000 for the nine-month period ended September 30, 2023, from $182,398,000 for the comparable period in 2022[313] - Interest expense decreased by $985,000, or 46.1%, to $1,152,000 for the three-month period ended September 30, 2023, from $2,137,000 for the comparable period in 2022[301] Investment Performance - Net investment income increased by $645,000, or 3.5%, to $19,248,000 for the three-month period ended September 30, 2023, compared to $18,603,000 for the same period in 2022[293] - Losses on investments and other assets decreased by $1,247,000, or 57.2%, to $932,000 for the three-month period ended September 30, 2023, from $2,179,000 for the same period in 2022[295] Company Strategy and Capitalization - The Company expects to continue focusing on niche insurance products, cemetery and mortuary business, and capitalizing on the improving housing market through mortgage loans[276] - The Company's total capitalization of stockholders' equity, bank and other loans payable was $406,325,000 as of September 30, 2023, down from $454,499,000 as of December 31, 2022, primarily due to a decrease of $53,281,000 in bank loans and other loans payable[321] - Stockholders' equity as a percent of total capitalization increased to 73.3% as of September 30, 2023, compared to 64.4% as of December 31, 2022[321] - The Company does not maintain any deposit or credit facilities with Silicon Valley Bank, Signature Bank, or First Republic Bank, and continues to monitor the banking industry[325]