Security National Financial Corp. (SNFCA, Financial) filed Quarterly Report for the period ended 2009-03-31.
SECURITY NATIONAL FIN L CORP. is a holding company whose subsidiaries are engaged in the business of selling and servicing selected lines of life accident and health insurance and annuity products and in selling cemetery and funeral products and services. Co. is licensed to sell insurance in Washington Oregon Idaho Montana Wyoming Nevada Utah Colorado Arizona New Mexico Texas North Dakota Nebraska Kansas Oklahoma Alaska and Hawaii. Security National Financial Corp. has a market cap of $32.7 million; its shares were traded at around $1.9 with and P/S ratio of 0.1. Security National Financial Corp. had an annual average earning growth of 31.9% over the past 5 years.
During 2007 and 2008, SecurityNational Mortgage made $1,730,000 in total payments to Aurora Loan Services pursuant to the Indemnification Agreement. During the three months ended March 31, 2009, SecurityNational Mortgage made no payments to Aurora Loan Services, but $625,000 in payments were made in April 2009. When SecurityNational Mortgage entered into the Indemnification Agreement, it anticipated using basis point holdbacks from loan production credits toward satisfying the $125,000 monthly obligations. Because Aurora Loan Services discontinued purchasing mortgage loans from SecurityNational Mortgage shortly after the Indemnification Agreement was executed, SecurityNational Mortgage has not had the benefit of using the basis point holdbacks toward payment of the $125,000 monthly obligations.
During 2008, funds were paid out of the reserve account to indemnify $1,700,000 in losses from 22 mortgage loans that were among the 54 mortgage loans with alleged breaches which were listed on the attachment to the Indemnification Agreement. The estimated potential losses from the remaining 32 mortgage loans listed on the attachment, which would require indemnification by SecurityNational Mortgage for such losses, is $3,357,000. Moreover, Aurora Loan Services has made a request to be indemnified for losses related to ten mortgage loans not listed on the attachment to the Indemnification Agreement. Aurora Loan Services claims the total amount of such potential losses is $2,746,000. During 2009, the Company recognized losses related to this matter of $1,636,000; however, management cannot fully determine the total losses, if any, nor the rights that the Company may have as a result of Lehman Brothers' and Aurora Loan Services' refusal to purchase other loans under the Indemnification Agreement.
Total revenues increased by $6,271,000, or 11.8%, to $59,492,000 for the three months ended March 31, 2009, from $53,221,000 for the three months ended March 31, 2008. Contributing to this increase in total revenues was a $6,765,000 increase in mortgage fee income, a $1,048,000 increase in insurance premiums and other considerations, a $43,000 increase in realized gains on investments and other assets, and a $190,000 increase in other revenues. This increase in total revenues was partially offset by a $1,156,000 decrease in investment income, and a $619,000 decrease in net mortuary and cemetery sales.
General and administrative expenses increased by $3,266,000, or 8.4%, to $42,031,000 for the three months ended March 31, 2009, from $38,765,000 for the comparable period in 2008. Salaries increased by $620,000 from $6,266,000 in 2008 to $6,886,000 in 2009, primarily due to merit increases in salaries of existing employees and an increase in the number of employees necessitated by the Company's growing business operations. Other expenses increased by $4,715,000 from $9,763,000 in 2008 to $14,478,000 in 2009. The increase in other expenses primarily resulted from increased costs and increased loan reserve and loan allowance balances at SecurityNational Mortgage Company. This increase was partially offset by a decrease in commission expenses of $2,068,000, from $22,736,000 in the first quarter of 2008 to $20,668,000 in the first quarter of 2009, due to decreased mortgage loan origination costs made by SecurityNational Mortgage, a decrease in sales at the cemetery operations, and a decrease in life insurance sales during the first quarter of 2009.
During the three months ended March 31, 2009 and March 31, 2008, the Company's operations provided cash of $1,293,000, and $19,338,000, respectively. This was due primarily to an increase of $13,240,000 in 2009 and a decrease of $13,074,000 in 2008 in the balance of mortgage loans sold to investors.
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SECURITY NATIONAL FIN L CORP. is a holding company whose subsidiaries are engaged in the business of selling and servicing selected lines of life accident and health insurance and annuity products and in selling cemetery and funeral products and services. Co. is licensed to sell insurance in Washington Oregon Idaho Montana Wyoming Nevada Utah Colorado Arizona New Mexico Texas North Dakota Nebraska Kansas Oklahoma Alaska and Hawaii. Security National Financial Corp. has a market cap of $32.7 million; its shares were traded at around $1.9 with and P/S ratio of 0.1. Security National Financial Corp. had an annual average earning growth of 31.9% over the past 5 years.
Highlight of Business Operations:
As of March 31, 2009, the Company s long term mortgage loan portfolio had $24,488,000 in unpaid principal with delinquencies more than 90 days. Of this amount $18,863,000 was in foreclosure proceedings. The Company has not received or recognized any interest income on the $24,488,000 in mortgage loans with delinquencies more than 90 days. During the twelve months ended March 31, 2009, the Company increased its allowance for mortgage losses by $781,000, which was charged to loan loss expense and included in other general and administrative expenses for the period. The allowance for mortgage loan losses as of March 31, 2009 was $5,561,000.During 2007 and 2008, SecurityNational Mortgage made $1,730,000 in total payments to Aurora Loan Services pursuant to the Indemnification Agreement. During the three months ended March 31, 2009, SecurityNational Mortgage made no payments to Aurora Loan Services, but $625,000 in payments were made in April 2009. When SecurityNational Mortgage entered into the Indemnification Agreement, it anticipated using basis point holdbacks from loan production credits toward satisfying the $125,000 monthly obligations. Because Aurora Loan Services discontinued purchasing mortgage loans from SecurityNational Mortgage shortly after the Indemnification Agreement was executed, SecurityNational Mortgage has not had the benefit of using the basis point holdbacks toward payment of the $125,000 monthly obligations.
During 2008, funds were paid out of the reserve account to indemnify $1,700,000 in losses from 22 mortgage loans that were among the 54 mortgage loans with alleged breaches which were listed on the attachment to the Indemnification Agreement. The estimated potential losses from the remaining 32 mortgage loans listed on the attachment, which would require indemnification by SecurityNational Mortgage for such losses, is $3,357,000. Moreover, Aurora Loan Services has made a request to be indemnified for losses related to ten mortgage loans not listed on the attachment to the Indemnification Agreement. Aurora Loan Services claims the total amount of such potential losses is $2,746,000. During 2009, the Company recognized losses related to this matter of $1,636,000; however, management cannot fully determine the total losses, if any, nor the rights that the Company may have as a result of Lehman Brothers' and Aurora Loan Services' refusal to purchase other loans under the Indemnification Agreement.
Total revenues increased by $6,271,000, or 11.8%, to $59,492,000 for the three months ended March 31, 2009, from $53,221,000 for the three months ended March 31, 2008. Contributing to this increase in total revenues was a $6,765,000 increase in mortgage fee income, a $1,048,000 increase in insurance premiums and other considerations, a $43,000 increase in realized gains on investments and other assets, and a $190,000 increase in other revenues. This increase in total revenues was partially offset by a $1,156,000 decrease in investment income, and a $619,000 decrease in net mortuary and cemetery sales.
General and administrative expenses increased by $3,266,000, or 8.4%, to $42,031,000 for the three months ended March 31, 2009, from $38,765,000 for the comparable period in 2008. Salaries increased by $620,000 from $6,266,000 in 2008 to $6,886,000 in 2009, primarily due to merit increases in salaries of existing employees and an increase in the number of employees necessitated by the Company's growing business operations. Other expenses increased by $4,715,000 from $9,763,000 in 2008 to $14,478,000 in 2009. The increase in other expenses primarily resulted from increased costs and increased loan reserve and loan allowance balances at SecurityNational Mortgage Company. This increase was partially offset by a decrease in commission expenses of $2,068,000, from $22,736,000 in the first quarter of 2008 to $20,668,000 in the first quarter of 2009, due to decreased mortgage loan origination costs made by SecurityNational Mortgage, a decrease in sales at the cemetery operations, and a decrease in life insurance sales during the first quarter of 2009.
During the three months ended March 31, 2009 and March 31, 2008, the Company's operations provided cash of $1,293,000, and $19,338,000, respectively. This was due primarily to an increase of $13,240,000 in 2009 and a decrease of $13,074,000 in 2008 in the balance of mortgage loans sold to investors.
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