Security National Financial Corporation (SNFC) (NASDAQ symbol "SNFCA") announced financial results for the third quarter ended September 30, 2013.
SNFC announced revenues of $50,552,000 for the three months ended September 30, 2013. This represents a 20.7% decrease from 2012. Pre-tax earnings from operations for the three month period decreased 67.9% from $6,132,000 in 2012 to $1,964,000. After-tax earnings decreased 68.2% from $3,990,000 in 2012 to $1,266,000.
SNFC announced revenues of $166,737,000 for the nine months ended September 30, 2013. This represents a .5% decrease from 2012. Pre-tax earnings from operations for the nine month period decreased from $13,497,000 in 2012 to $9,661,000. After-tax earnings also decreased from $9,245,000 in 2012 to $6,099,000.
Scott Quist, Chairman of the Board, President and Chief Executive Officer of the Company, said, “I am particularly pleased with the results of our operations for the first three quarters of 2013. Companywide this was our fourth best nine month result in the history of the Company. As we entered 2013 we had cash and short term investments of almost $80 million due primarily to a late 2012 reinsurance acquisition. That level of uninvested assets gave the Life Segment a slow start to the year, but we have invested $26 million of that amount which has improved our profitability markedly. Mortality and persistency continue very positive trends and that with our improved investment income resulted in the Life Segment's best third quarter. As we continue our investing efforts, profitability should continue to improve.“Our Mortgage Segment is dealing well with the increase in interest rates and the resulting loss of refinance volumes. As we all know, in May and June interest rates essentially rose by a full percentage point, which effectively shut off the majority of refinance transactions. Prior to that time, industrywide refinance transactions comprised 77% of the loans closed nationwide. Our Company’s refinance percentage was never that high and as a result, we believe that we have gained market share as the market has shrunk. During the third quarter our loan origination volume decreased 25% versus 2012, which we believe is a smaller decrease than that experienced by our competitors as reported by the popular press. Currently, we expect our origination volumes to be $2.2 billion at year end, a 12% decrease from 2012, which we believe, if accomplished, will represent a gain in market share. Profitability has been negatively affected as we rationalize costs to reflect our current volumes and by margin compression from our competitors, but we believe we have reason for optimism. Finally, over the last year we have retained servicing rights from some of our own loan originations and currently have a portfolio of about $750 million.