Tue, May 14, 3:06 PM (220 days ago)
The Security National Financial Corporation (SNFC) reported its financial performance for the first quarter ended March 31, 2024. The company's total revenues increased by 2.1% to $81.2 million, driven by higher insurance premiums, net investment income, and gains on investments. Insurance premiums rose by 6.7% to $29.9 million, mainly due to increased first-year premiums and renewals. Net investment income also saw a significant increase of 12.2% to $19.9 million, attributed to higher interest on cash equivalents and investments. Mortgage fee income, however, declined by 16% to $21.8 million, impacted by a decrease in secondary gains from mortgage loans sold to third-party investors, reflecting the influence of rising interest rates on loan origination activities. The company's mortgage operations originated fewer loans compared to the previous year, with a total volume of $465.6 million in Q1 2024. Total benefits and expenses were $71.6 million, representing 88.2% of total revenues, showing an improvement from the previous year's 98%. This was due to decreases in personnel expenses, commissions, and other operating expenses. The company's profitability before taxes increased significantly, with the insurance segment seeing a 132% rise in earnings before taxes to $8.5 million, and the cemetery and mortuary segment reporting a 71% increase to $3.1 million. However, the mortgage segment recorded a loss before taxes of $1.96 million, an improvement from the previous year's loss of $3.88 million. SNFC's liquidity and capital resources remain robust, with cash flow from operations turning positive, providing $25.1 million, compared to a cash use of $16.1 million in the prior year. The company's capitalization remained strong with a 75.4% equity ratio and complied with regulatory capital requirements. However, SNFC's subsidiary, SecurityNational Mortgage, was not in compliance with net income covenants under its warehouse lines of credit, although it is managing the situation through waivers and negotiations for additional credit facilities. Overall, SNFC demonstrated a solid financial performance with improvements in revenue and profitability, despite challenges in the mortgage lending market due to rising interest rates. The company continues to manage its investment and capital resources effectively to support its long-term obligations and operational needs.