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Security National Financial Corporation Reports Financial Results for the Quarter Ended September 30, 2022
SALT LAKE CITY, Nov. 14, 2022 (GLOBE NEWSWIRE) -- Security National Financial Corporation (SNFC) (NASDAQ symbol "SNFCA") announced financial results for the
About this update from Security National Financial Corporation
[{"type":"text","content":"SALT LAKE CITY, Nov. 14, 2022 (GLOBE NEWSWIRE) -- Security National Financial Corporation (SNFC) (NASDAQ symbol \"SNFCA\") announced financial results for the quarter ended September 30, 2022. For the three months ended September 30, 2022, SNFC’s after tax earnings decreased 121% from $10,791,000 in 2021 to a loss of ($2,353,000) in 2022. For the nine months ended September 30, 2022, after tax earnings decreased 87% to $4,450,000 from $34,177,000 in 2021. Scott M. Quist, President of the Company, said: “2022 is continuing to be a challenging year for our Company due primarily to the dramatic rise in inflation and interest rates, and the dramatic fall in equity values. In the mortgage space, purchase transactions are down roughly 40% YOY and refinance transactions are down roughly 80% YOY. Equity values, as measured by the S&P Index, are down 25% Q3 YTD. That economic backdrop has proven to be challenging. Speaking in Year-to-Date terms, our Mortgage Segment has had an approximate $2MM loss from operations. We just have not reduced costs quickly enough in the face of declining production. Next, in order of magnitude, we have experienced about a $4MM loss in unrealized stock losses, $3MM loss in mortgage accounting derivatives, $2MM in scratch-and-dent loan market losses due to interest rate movements, and a $1MM loss on the sale of a Kansas office building. Including the operations loss, that is $12MM of losses proximately attributable to the economic environment. This is by no means an excuse for our performance, but rather simply pointing out that we have much less control over the environment. By way of further explanation, regarding the mortgage derivative loss, in GAAP accounting we are required to establish a derivative value of our future loan pipeline. The biggest factor in that calculation is simply transaction volume. If volumes are increasing the derivative is positive, and if volumes decrease the derivative is negative. This year we have seen massively decreasing volumes and thus the derivative loss. Regarding the scratch-and-dent loss, scratch-and-dent loans are an ongoing predictable occurrence in mortgage banking for which we establish customary reserves. A scratch-and-dent loan is simply a loan that for any number of reasons has a defect and is given back to us to cure. There is usually about a 90-120 day lag betw...