Security National Financial Corporation (SNFCA) reported a significant decline in Q1 2025 financial results. Net earnings decreased 42% to $4.34M from $7.48M in Q1 2024. The company's performance was impacted by several factors, with approximately 75% ($3M) of the $4.05M pretax income decrease attributed to reduced realized and unrealized investment income. Key segment performance showed mixed results: Life Insurance revenue declined 1.4% to $49.29M, Cemeteries/Mortuaries dropped 7.6% to $8.12M, while Mortgages grew 12.9% to $25.33M. Despite challenges, the Death Care Segment increased families served by 4%, and the Mortgage Segment achieved profitability in March. Personnel costs rose 11.7% ($2.2M) due to market-competitive compensation and strategic hiring. Earnings per share decreased to $0.18 from $0.31, while book value per share improved to $14.68 from $14.45 in December 2024.
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Positive
Mortgage segment revenue increased 12.9% YoY to $25.33M
Death Care Segment increased families served by 4%
Insurance Segment improved premium margins
Mortgage Segment achieved profitability in March 2025
Book value per share increased to $14.68 from $14.45 in December 2024
Negative
Net earnings decreased 42% YoY to $4.34M
Investment income declined by approximately $3M
Personnel costs increased 11.7% ($2.2M)
Life Insurance segment revenue declined 1.4% to $49.29M
Cemeteries/Mortuaries revenue dropped 7.6% to $8.12M
News Market Reaction
-3.41%
1 alert
-3.41%News Effect
On the day this news was published, SNFCA declined 3.41%, reflecting a moderate negative market reaction.
SALT LAKE CITY, May 16, 2025 (GLOBE NEWSWIRE) -- Security National Financial Corporation (SNFC) (NASDAQ symbol "SNFCA") announced financial results for the quarter ended March 31, 2025.
For the three months ending March 31, 2025, SNFC’s after tax earnings decreased approximately 42%, or $3.1MM, from $7,475,000 in 2024 to $4,338,000 in 2025. Pre Tax earnings decreased approximately 42%, or $4.05MM, to $5.571MM (please see the table below).
Scott Quist, Chairman of the Board, President, and Chief Executive Officer of SNFC, said, “A decrease in quarterly income is never our goal and falls below our self-set standards. Despite the decrease in net income, I believe that as a Company we performed operationally pretty well. Our Insurance Segment had its second best Q1 out of the last 5 years and our Death Care Segment had its 3rd best Q1 out of the last 5 years, which time period, it is important to note, includes the pandemic. Speaking now of our decrease in net income, of the approximate $4.05MM decrease in pretax quarterly income (see the table below), about 75%, or roughly $3MM, is attributable to decreases in both our realized and unrealized investment income. Our investment income can be, and is, “lumpy” between quarters and years, primarily due to its close relationship to real estate activities (home closings/lot sales) and secondarily to public equity markets.
Speaking to our $3MM decline in investment income, and referring to that portion directly related to real estate activities, roughly 56%, or $1.7MM, is related to decreased construction profits and decreased gains on the sale of residential lots from our builder relationships. We simply participated in fewer home closings in Q1 2025 than in Q1 2024. I believe it is fair to say that in Q1 2025 the builders with whom we have profit-sharing relationships had more homes in the process of being built, but fewer closings. Margins appear to be consistent with 2024’s experience, but margins are always in issue until a home sale closes. Lastly, as a general real estate market comment, housing inventories and “days on market” appear to have increased, but not to a degree that causes alarm.
Roughly 42%, or $1.25MM of our $3MM investment income decline, is due to stock market declines in Q1. Generally speaking, we have chosen to not liquidate our positions, so the aforementioned loss is simply a recognized, but unrealized, stock market loss as of March 31, 2025.
Roughly $900K, or 22%, of the $4.05MM decrease in pretax income is related to an increase in our bad debt expense as prescribed by the adoption of CECL (Current Expected Credit Losses) in Q1 2024. Arguments can be credibly made that this accounting rule is simply another element of our investment income. In my view, CECL is a very formulaic and forward-looking calculation that places a heavier weight on outside factors at the time an asset is acquired and less weight on the company’s experience over the course of time. Time will tell if the Company’s allowances are appropriate, but in my view CECL did change, and does have the potential to further change in the future, the Company’s bad debt allowances based on factors that are outside of its control.
After accounting for the investment income and related decreases, the remaining elements causing the decrease in income are smaller in net impact and are much more numerous and nuanced. One element that probably merits comment is Personnel Costs. Personnel Costs rose 11.7%, or roughly $2.2MM, over 2024. Roughly speaking 5 percentage points of that increase relates to general annual compensation increases for both staff and management. We find it important to remain marketplace competitive in our compensation or our experienced staff are recruited away from us. The remaining increase relates to increased staffing, pretty much across all levels. We are constantly reviewing operational costs to ensure that we remain operationally efficient, but the majority of this increase represents very deliberate strategic hirings of high-quality, high-performing individuals to augment our sales and fulfillment staffs where we determined that we needed greater capability to reach our growth goals. Growth is expensive but is nevertheless our constant goal. We believe these increased Personnel Costs to be necessary investments which will yield returns in the years to come.
Despite the decrease in income, many accomplishments were made in the first quarter. In our Death Care Segment we increased families served by 4%, in what we believe to be a flat to declining mortality climate. In our Insurance Segment we have improved our premium margin by several percentage points, reflecting the increased premium rates we have been implementing over the last several years. The full effect of those margin increases will not be apparent for several years hence. In our Mortgage Segment we increased volume by 11% in Q1 2025 over Q1 2024, with an improved mix of products. Importantly, our Mortgage Segment was both profitable and cash flow positive in March.”
SNFC has three business segments. The following table shows the revenues and earnings before taxes for the three months ended March 31, 2025, as compared to 2024, for each business segment:
Revenues
Earnings before Taxes
2025
2024
2025
2024
Life Insurance
$
49,287,000
$
49,971,000
(1.4%)
$
5,327,000
$
8,530,000
(37.5%)
Cemeteries/Mortuaries
$
8,119,000
$
8,787,000
(7.6%)
$
2,238,000
$
3,053,000
(26.7%)
Mortgages
$
25,334,000
$
22,430,000
12.9%
$
(1,994,000
)
$
(1,964,000
)
(1.5%)
Total
$
82,740,000
$
81,188,000
1.9%
$
5,571,000
$
9,619,000
(42.1%)
Net earnings per common share was $.18 for the three months ended March 31, 2025, compared to net earnings of $.31 per share for the prior year, as adjusted for the effect of annual stock dividends. Book value per common share was $14.68 as of March 31, 2025, compared to $14.45 as of December 31, 2024.
The Company has two classes of common stock outstanding, Class A and Class C. There were 23,601,718 Class A equivalent shares outstanding as of March 31, 2025.
This press release contains statements that, if not verifiable historical fact, may be viewed as forward-looking statements that could predict future events or outcomes with respect to Security National Financial Corporation and its business. The predictions in the statements will involve risk and uncertainties and, accordingly, actual results may differ significantly from the results discussed or implied in such forward-looking statements.
If there are any questions, please contact Mr. Garrett S. Sill or Mr. Scott M. Quist at:
Security National Financial Corporation P.O. Box 57250 Salt Lake City, Utah 84157 Phone (801) 264-1060 Fax (801) 265-9882
FAQ
What caused SNFCA's earnings decline in Q1 2025?
SNFCA's earnings decline was primarily due to a $3M decrease in investment income (75% of total decline), with $1.7M related to decreased construction profits and lot sales, $1.25M from stock market declines, and $900K from increased bad debt expense.
How did SNFCA's different business segments perform in Q1 2025?
Life Insurance revenue declined 1.4% to $49.29M, Cemeteries/Mortuaries dropped 7.6% to $8.12M, while Mortgages grew 12.9% to $25.33M. The Death Care Segment increased families served by 4%.
What was SNFCA's earnings per share in Q1 2025?
SNFCA reported earnings of $0.18 per share in Q1 2025, down from $0.31 per share in Q1 2024.
Why did SNFCA's personnel costs increase in Q1 2025?
Personnel costs rose 11.7% ($2.2M) due to 5% general annual compensation increases to remain competitive and additional strategic hiring across all levels to support growth goals.
What was SNFCA's book value per share as of March 31, 2025?
SNFCA's book value per share was $14.68 as of March 31, 2025, an increase from $14.45 as of December 31, 2024.
