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Security National Financial Corporation (SNFC) (NASDAQ symbol "SNFCA") announced financial results for the second quarter ended June 30, 2013.
SNFC announced revenues of $61,332,000 for the three months ended June 30, 2013. This represents an 8.5% increase from 2012. Pre-tax earnings from operations for the three-month period decreased from $5,036,000 in 2012 to $4,470,000. After tax earnings decreased from $3,593,000 in 2012 to $2,799,000 in 2013.
SNFC announced revenues of $116,185,000 for the six months ended June 30, 2013. This represents an 11.9% increase over 2012. Pre-tax earnings from operations for the six-month period increased from $7,365,000 in 2012 to $7,697,000 in 2013. After tax earnings decreased from $5,255,000 in 2012 to $4,833,000 in 2013.
Scott Quist, President of the Company, said, “We are very pleased with the second quarter results of our company, especially given the economic circumstances. This represents the Company’s second best first half in its history, and its third best second quarter in its history. During the second quarter interest rates, as measured by the 10 year Treasury bond, increased 60% in a single 30 day period which stifled the mortgage refinance market that many of our competitors have relied upon and which refinances represented 77% of industry wide volume. Yet, despite the rise, rates remained at or below 2.75%, well below the minimum interest rate we target for our life company investments.
“As we entered the quarter we had $79.1 million in cash which cash came from a December 2012 life company acquisition and the payoff of certain investments. That amount of cash is a definite drain on life segment profitability until it can be invested. After investment it becomes a huge positive. Using just an assumed 4% rate that cash, when invested, represents $3.2 million in annualized earnings. During the quarter we invested approximately $18,000,000 in bonds and new commercial loans at a blended rate exceeding 6% with another $16,000,000 invested in new commercial income producing properties at cap rates averaging 9%. It should be noted that we anticipated our cash position well before year end 2012, but it has taken us longer than anticipated to find suitable high quality higher yielding investments. Nevertheless, as that cash is put to work our life segment profitability will improve. Finally it should be noted that life sales in our pre need and final expense distribution channels, representing 90% of new production, continue to grow and had two all-time high weeks during the second quarter. Overall new life sales increased 17%, as measured by premium, over 2012.