Security National Financial ((SNFCA)) has held its Q1 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Security National Financial Corporation revealed a mixed sentiment, highlighting both significant challenges and promising opportunities. The company faced decreased earnings and investment income declines due to economic and market factors. However, strong operational performances and strategic investments in key segments such as insurance, death care, and mortgage indicate potential for future growth.
Insurance Segment Performance
The insurance segment reported its second-best first quarter in the past five years, showcasing improved premium margins by several percentage points. This positive outcome was driven by increased premium rates, reflecting the segment’s resilience and strategic pricing adjustments.
Death Care Segment Growth
Despite a flat to declining mortality climate, the death care segment experienced a 4% increase in families served. This growth was supported by a 3.4% revenue increase in funeral home operations, attributed to a 3% rise in total services performed, demonstrating the segment’s robust operational capabilities.
Mortgage Segment Improvement
The mortgage segment outperformed the market with an 11% increase in volume from Q1 2024 to Q1 2025. This segment was both profitable and cash flow positive in March 2025, highlighting its strong market position and effective management strategies.
Strategic Investments in Personnel
Personnel costs rose by 11.7% due to strategic hiring aimed at augmenting sales and fulfillment staffs. This investment is part of the company’s strategy to drive future growth, indicating a proactive approach to expanding its operational capacity.
Bond Portfolio Improvement
The company reported a $5 million improvement in unrealized losses on its bond portfolio. The fair value of the portfolio compared to amortized cost is the closest it has been since 2020, reflecting a positive trend in the company’s investment strategy.
Significant Decrease in Earnings
After-tax earnings saw a significant decrease of approximately 42%, dropping from $7.475 million in 2024 to $4.338 million in 2025. This decline underscores the financial challenges faced by the company amidst a complex economic environment.
Investment Income Decline
The company experienced a $3 million decrease in pre-tax income due to declines in both realized and unrealized investment income. This was largely attributed to decreased construction profits and lot sales, impacting the overall financial performance.
CECL Accounting Impact
The adoption of the CECL accounting standard led to a $900,000 increase in bad debt reserve expense. This accounting change contributed to the overall decrease in pre-tax income, reflecting the impact of regulatory adjustments on financial outcomes.
Stock Market Declines
A $1.25 million decline in investment income was attributed to stock market declines, resulting in recognized but unrealized losses. This highlights the volatility and challenges faced in the investment landscape.
Funeral Home and Cemetery Earnings Decline
Net earnings before tax from funeral homes and cemeteries declined by 27%, driven by an $828,000 reduction in investment income gains and softer performance in select markets. This decline reflects the challenges in maintaining profitability in certain segments.
Forward-Looking Guidance
Looking ahead, Security National Financial Corporation anticipates continued challenges with significant declines in both after-tax and pre-tax earnings. Despite these financial setbacks, the company remains optimistic about its operational success. Notably, the insurance segment achieved its second-best first quarter in five years, and the death care segment saw a 4% increase in families served. The mortgage segment also demonstrated resilience with an 11% increase in volume compared to Q1 2024, suggesting a positive trajectory amidst economic headwinds.
In conclusion, Security National Financial Corporation’s earnings call presented a complex picture of challenges and opportunities. While the company faced significant declines in earnings and investment income, strong performances in key segments and strategic investments offer a promising outlook for future growth. Investors and stakeholders will be keen to monitor how the company navigates these challenges and capitalizes on its operational strengths.