Security National’s 1st Quarter — Memorial segment has revenue rise, but earnings decrease

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Security National Financial Corporation (SNFC), the Utah based company that has three separate business segments including those that operate in the retail mortuary and cemetery space, the preneed insurance space, and is also the parent company of C & J Financial, had very mixed results in the 1st Quarter of 2022 as seen in their press release here.  The company’s largest, by revenue, segment is their Mortgage Segment and as you can imagine home prices and interest rates played a major role in the revenues comparing the first quarters of 2022 with 2021.

Because of the Mortgage Segment, which saw sales decrease over 30% from $76.7 million in 1Q21 to only $53.4 million in 1Q22, the company as a whole saw revenues decrease about 16% for the quarter.

The Cemetery/Mortuary Segment, however, increased their revenues from $6.99 million in 1Q21 to $7.46 million in 1Q22.  . an increase of 6.6%.  Labor and costs played a role in dropping the Earnings before Taxes for the segment over 25% from the prior year to a 1Q22 number of $2.02 million from $2.7 million last year.

Here’s what Scott M. Quist, SNFC President said about the Cemetery/Mortuary Segment, “. . . demand has been and continues to be very high. Meeting that demand and providing the level of care and service has become more difficult and more expensive as the labor market has tightened and costs for just about all goods have increased. . . . .Despite the increased costs, operationally we had good results.. . .All things considered I believe we should have justifiable pride in our operational performance.” 

The company’s Life Insurance Segment also saw an increase in revenue but a decrease in Earnings before Taxes.  The Life Insurance Segment includes both Preneed and Final Expense policies as well as other types of life insurance.  Here’s what President Quist said about that segment, “. .Death benefits did decrease vis a vis 2021 but are not yet back to pre-Pandemic levels. In our view, death claims are still above “normal” mortality expectations. Our costs of operations increased materially both in personnel and G&A costs over 2021 levels. Our common stock portfolio had a significant tailwind as the market improved in 2021 but had the opposite in 2022 as equity markets fell.”

As a whole, SNFC recorded Earnings before Taxes in the first Quarter of 2022 of $4.4 million and reported After-Tax earnings from operations of $3.22 million.

The company also announced a couple of death care acquisitions in the 1st Quarter including the acquisition of the Holbrook Mortuary in Utah and the acquisition of the Rivera Family Funeral Homes and Santa Fe Memorial Gardens — a four funeral home location and one cemetery location firm in New Mexico.  SNFC now operates funeral homes and cemeteries in Utah, California, and New Mexico.

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