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Security National Financial (SNFCA) - 2023 Q3 - Quarterly Report
SNFCASecurity National Financial (SNFCA)2023-11-14 15:01

Revenue Performance - Total revenues decreased by 3,235,000,or3.93,235,000, or 3.9%, to 80,242,000 for the three months ended September 30, 2023, from 83,477,000forthecomparableperiodin2022[290]−Revenuesfromexternalcustomersforinsuranceoperationstotaled83,477,000 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 43,118,000in2022[280]−Totalrevenuesfrommortgageoperationsdecreasedby2443,118,000 in 2022[280] - Total revenues from mortgage operations decreased by 24% to 25,626,000 for the three months ended September 30, 2023, from 33,667,000in2022[289]−Totalrevenuesdecreasedby33,667,000 in 2022[289] - Total revenues decreased by 37,881,000, or 13.5%, to 243,589,000forthenine−monthperiodendedSeptember30,2023,from243,589,000 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,or10.22,669,000, or 10.2%, to 28,907,000 for the three months ended September 30, 2023, compared to 26,238,000forthesameperiodin2022[292]−Earningsbeforeincometaxesforinsuranceoperationsincreasedby6926,238,000 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 4,234,000in2022[280]−Thelapserateforlifeinsurancein2022was4.34,234,000 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 94,254,000asofDecember31,2022[323]CemeteryandMortuaryOperations−Cemeteryrevenuesincreasedby2694,254,000 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 3,443,000in2022[283]−Netmortuaryandcemeterysalesincreasedby3,443,000 in 2022[283] - Net mortuary and cemetery sales increased by 764,000, or 11.8%, to 7,234,000forthethree−monthperiodendedSeptember30,2023,from7,234,000 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 1,415,000increaseingainsoninvestmentsandotherassets[283]MortgageOperations−SecurityNationalMortgageoriginated5,680loanstotaling1,415,000 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 2,837,349,000forthesameperiodin2022[288]ExpensesandBenefits−Totalbenefitsandexpenseswere2,837,349,000 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,or104.086,780,000, 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 25,622,000forthethree−monthperiodendedSeptember30,2023,from25,622,000 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,or23.413,005,000, or 23.4%, to 42,652,000 for the three-month period ended September 30, 2023, from 55,657,000forthesameperiodin2022[300]−Selling,generalandadministrativeexpensesdecreasedby55,657,000 for the same period in 2022[300] - Selling, general and administrative expenses decreased by 51,346,000, or 28.2%, to 131,052,000forthenine−monthperiodendedSeptember30,2023,from131,052,000 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,or46.1985,000, or 46.1%, to 1,152,000 for the three-month period ended September 30, 2023, from 2,137,000forthecomparableperiodin2022[301]InvestmentPerformance−Netinvestmentincomeincreasedby2,137,000 for the comparable period in 2022[301] Investment Performance - Net investment income increased by 645,000, or 3.5%, to 19,248,000forthethree−monthperiodendedSeptember30,2023,comparedto19,248,000 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,or57.21,247,000, or 57.2%, to 932,000 for the three-month period ended September 30, 2023, from 2,179,000forthesameperiodin2022[295]CompanyStrategyandCapitalization−TheCompanyexpectstocontinuefocusingonnicheinsuranceproducts,cemeteryandmortuarybusiness,andcapitalizingontheimprovinghousingmarketthroughmortgageloans[276]−TheCompany′stotalcapitalizationofstockholders′equity,bankandotherloanspayablewas2,179,000 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 454,499,000asofDecember31,2022,primarilyduetoadecreaseof454,499,000 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]