Security National Financial Corp. :SNFCA-US: Earnings Analysis: Q1, 2017 By the Numbers : May 19, 2017

Security National Financial Corp. reports financial results for the quarter ended March 31, 2017.

We analyze the earnings along side the following peers of Security National Financial Corp. – Carriage Services Inc., Manulife Financial Corporation, Aflac Incorporated and Reinsurance Group of America, Incorporated (CSV-US, MFC-US, AFL-US and RGA-US) that have also reported for this period.


  • Summary numbers: Revenues of USD 69.50 million, Net Earnings of USD 1.47 million.
  • Earnings decline from operating margin decreases as well as from unusual items

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income (See complete table at the end of this report):

2017-03-31 2016-12-31 2016-09-30 2016-06-30 2016-03-31
Relevant Numbers (Quarterly)
Revenues (mil) 69.5 74.35 85.27 81.77 66.09
Revenue Growth (%YOY) 5.17 9.32 12.86 7.46 3.09
Earnings (mil) 1.47 1.84 5.29 5.36 1.79
Earnings Growth (%YOY) -18.12 -8.93 8.22 39.07 -3.77
Net Margin (%) 2.11 2.47 6.21 6.55 2.71
EPS 0.09 0.11 0.34 0.35 0.11
Return on Equity (%) 4.55 5.79 17.23 18.26 6.35
Return on Assets (%) 0.68 0.87 2.63 2.81 0.95

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Market Share Versus Profits

Revenues History
Earnings History

SNFCA-US‘s change in revenue this period compared to the same period last year of 5.17% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that SNFCA-US is holding onto its market share. Also, for comparison purposes, revenues changed by -6.52% and earnings by -20.06% compared to the immediate last period.

Revenues Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Leader, Earnings Focus, Laggard, Revenues Focus

Earnings Growth Analysis

Insurance companies sometimes tradeoff for improvements in premiums earned by relaxing standards in underwriting policies. A quick way to check against such activity is to compare the changes in loan loss provisions as well any chnages in the level of policy claims. If either of these checks point to a decline in the underwriting standards, it is quite possible that the company’s performance is a result of underwriting policy changes that could have a longer term impact compared to the shorter term pop in premiums earned.

Premiums Earned Percent History
Loss Ratio History

The company’s year-on-year earnings decline has not come as a result of decline in premiums earned as a percent of total revenues or because of any underwriting issues – both premiums earned as a percent of total revenues and the loss ratio have actually improved. Matter of fact, premiums earned went from 21.87% to 24.97% and the loss ratio improved from 86.51% to 85.47% over this period. For comparison, premiums earned as a percent of revenues were 22.85% and the loss ratio 87.40% in the immediate last period.

Premiums Earned Percent Versus Loss Ratio


The company’s fall in earnings have been influenced by the following factors: (1) Contraction in operating margins after interest from 6.04% to 5.14% and (2) One-time items that contributed to a weakening of pretax margins from 4.31% to 3.26%.

EBIT Margin Versus PreTax Margin

Quadrant label definitions. Hover to know more

Operation driven Earnings, One-time Favorables, Low Earnings Base, One-time Unfavorables
EBIT Margin History
PreTax Margin History

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Company Profile

Security National Financial Corp. is a holding company for Security National Life Insurance Co. It operates through the following segments: Life insurance, Cemetery & Mortuary, and Mortgage loans. The Life insurance segment engages in the business of selling and servicing selected lines of life insurance, annuity products and accident and health insurance. The Cemetery & Mortuary segment consists of seven mortuaries and five cemeteries in the state of Utah and one cemetery in the state of California. The Mortgage Loan segment is an approved government mortgage lender that originates and underwrites residential and commercial loans for new construction, existing homes and real estate projects. The company also engages in pre-need selling of funeral, cemetery, mortuary and cremation services through its Utah, and California operations. Security National Financial was founded by Charles L. Crittenden and Robert George Hunter in 1979 and is headquartered in Salt Lake City, UT.

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