Security National Financial Corporation · NASDAQ:SNFCA
Security National Financial — Investor Presentation (March 2017)
36 slides from Security National Financial's investor presentation, Mar 14, 2017
Slide 1: Security National Financial Corporation Investor Presentation
80 SECURITY NATIONAL FINANCIAL CORPORATION Investor Presentation | March 9, 2017
Slide 2: "Excellence" is our motto.
80 “Excellence” is our motto.
Slide 3: Business Segments
80 Security National Financial Corporation Business Segments Security National Financial Corporation operates in three main business segments: 1. Life Insurance: Five life insurance companies licensed in 38 states. 2. Cemetery and Mortuary: Nine mortuaries, six cemeteries, one management agreement o
Slide 4: Financial Snapshot
80 Security National Financial Corporation Financial Snapshot Third Quarter 2016 Assets $838M Liabilities $712M Stockholders Equity $126M Book Value Per Share $8.89 3Q 2016 YTD Revenue $233M Earnings After Tax $12.4M Earnings Per Share (Q3) $0.37 Earnings Per Share (YTD Q3) $0.89 Stock Price at 9/30
Slide 5: Stock Price Trend vs. S&P
80 Security National Financial Corporation 10 Year Stock Price Trend vs. S&P 500 350% Current M arket Data 300% Mkt. Cap ($M): $104 Closing Price (03/06/17): $6.70 250% 52-Week High/Low : $7.62 / $4.05 1-Year Return 29.3% 200% 5-Year Return 542.9% Price / Tangible Book: 81% 150% Price / LTM EPS: 7.1
Slide 6: Share Data
80 Security National Financial Corporation Share Data Long term Year hold case for SNFCA Shares owned Share Price Stock Value 1997 1,000 $1.53 $1,530.00 2002 1,276 $1.20 $1,531.20 2007 1,629 $3.23 $5,261.67 2012 2,079 $1.07 $2,224.53 2017 2,653 $6.85 $18,173.05 13.20% 13.17% Avg. Compound 10yr Retur
Slide 7: Key SNFCA Ratios
80 Security National Financial Corporation Key SNFCA Ratios 12.12% 66% $1.03 Return on Equity Price/Book Value Earnings Per Share (5 yr avg.) (2016 Q3 YTD) (Trailing Four Quarters) 2.28% 72% 5.42x Return on Assets Price/Tangible Book Value Price/Earnings (5 yr avg.) (2016 Q3 YTD) (Trailing Four Quar
Slide 8: Equity Capital Structure
80 Security National Financial Corporation Equity Capital Structure Equity Capital Structure 20,000,000 Authorized Class A Common Stock Par Value $2.00 13,819,000 Outstanding 5,000,000 Authorized Class B Common Stock Par Value $1.00 0 Outstanding 3,000,000 Authorized Class C Common Stock Par Value $
Slide 9: 3rd Quarter YTD Comparison 2015 to 2016
80 Security National Financial Corporation 3rd Quarter YTD Comparison 2015 to 2016 2015 Q3 YTD % Change 2016 Q3 YTD Total Revenues $216M 8.1% $233M Total Benefits and Expenses $199M 8.0% $214M Pre-Tax Earnings $17.0M 9.5% $18.6M Income Tax expense ($6.4M) (3.4%) ($6.2M) Net earnings $10.6M 17.3% $12
Slide 10: Year End Comparison 2013 to 2015
80 Security National Financial Corporation Year End Comparison 2013 to 2015 2013 2014 2015 Total Revenues $215M $227M $283M Total Benefits and Expenses $206M $215M $263M Pre-Tax Earnings $9.8M $12.5M $19.8M Income Tax Expense $2.2M $4.7M $7.2M After Tax Earnings $7.6M $7.8M $12.6M Earnings Per Share
Slide 11: Snapshot by Segment
80 Security National Financial Corporation Snapshot by Segment 2013 2014 2015 L ife C emetery & Mortg ag e L ife C emetery & Mortg ag e L ife C emetery & Mortg ag e Ins uranc e Mortuary B anking T otal Ins uranc e Mortuary B anking T otal Ins uranc e Mortuary B anking T otal T otal R evenues $76M $1
Slide 12: Asset Growth
80 Security National Financial Corporation Asset Growth $900 $850 $838 $800 $750 $750 $700 $650 $671 $600 $619 $597 $550 $523 $500 $450 $400 2011 2012 2013 2014 2015 2016
Slide 13: Security National Life
80 2012 FOUNDERS MONTH AWARDS
Slide 14: Life Products
80 Security National Life Products Security National Life sells products designed to fund an individual’s funeral costs. These policies are sold through three major channels. • Preneed is a policy where a funeral home agrees to accept the policy in exchange for furnishing a given set of services. Th
Slide 15: Life Insurance Segment Snapshot
80 Life Insurance Segment Snapshot Life Insurance Segment Snapshot 2013 2014 2015 2016 Q3 YTD Total Revenues $76.0M $87.9M $94.5M $80.4M Total Benefits and $73.2M $79.4M $86.1M $74.7M Expenses Pre-Tax Earnings $3.7M $8.5M $8.5M $5.7M Pre-Tax Earnings Without Realized $2.3M $7.3M $6.2M $5.7M Gains In
Slide 16: Collected Premium Margins (Statutory Basis)
80 Security National Life Insurance Co. Collected Premium Margins (Statutory Basis) $80.0M $70.0M $74.0M $65.6M $60.0M $60.0M $50.0M $40.0M $5.5M $30.0M $5.1M $7.3M $7.0M $3.6M $3.3M $20.0M $23.9M $25.9M $10.0M $20.3M $0.0M 2014 CP 2014 2015 CP 2015 2016 CP 2016 Premium Margin MortalityMargin Intere
Slide 17: Building Our Salesforce
80 Building Our Salesforce First Year Insurance & Annuity Annualized Premium Sales 2011-2016 $35.0M 38 Number of States where $30.0M $15.7M Licensed $25.0M $16.3M $16.0M $11.4M $20.0M >4,000 $12.9M Sales Agents $15.0M $11.8M $8.2M $10.0M $7.2M $4.2M $0.4M $1.0M $2.6M $1.6M $2.2M 84% $5.0M $1.7M $1.6
Slide 18: Life Acquisitions: Most Recent Acquisition
80 Security National Life Acquisitions Most Recent Acquisition Ashdown, AR $55M $1.6M Headquarters Assets Annual Premium ~$6.8M $3.8M ~$3.0M Purchase Price Capital and Surplus Net Price
Slide 19: Enterprise Investment Philosophy/Strategy
80 Security National Life Insurance Co. Enterprise Investment Philosophy/Strategy Security National Life offers specialized financing sometimes in conjunction with Security National Mortgage. These products increase investment yield and offers Security National Mortgage loan officers additional prod
Slide 20: Security National Mortgage
" Security Sear MORTGAGEe Security National
Slide 21: SNMC Growth
80 Security National Mortgage SNMC Growth SNMC Offices 2011 SNMC Offices 2016
Slide 22: Mortgage Segment Snapshot
80 Mortgage Segment Snapshot Mortgage Segment Snapshot 2016 2013 2014 2015 Q3 YTD Total Revenues $135M $133M $184M $153M Total Benefits and $128M $130M $174M $141M Expenses Income Tax Benefit ($2.6M) ($1.3M) ($4.1M) ($4.4M) (Expense) Net Earnings (Loss) $4.1M $2.0M $6.4M $7.3M Mortgage Servicing $4.
Slide 23: SNMC Funding Volume
80 $0.0B $0.5B $1.0B $1.5B $2.0B $2.5B $3.0B $0.3B $0.4B $0.4B $1.4B $0.4B $0.6B $0.7B $0.7B $2.4B SNMC Funding Volume $0.5B $0.6B $0.5B $0.5B $2.1B $0.4B $0.6B $0.5B Security National Mortgage $0.5B $2.0B $0.6B $0.8B $0.7B $0.6B $2.8B $0.6B $0.8B $0.8B $2.2B
Slide 24: Pre-Tax Net Income 2011-2016
80 -$5.0M $0.0M $5.0M $10.0M $15.0M $20.0M -$2.6M -$0.9M $0.2M $1.2M -$1.9M $1.3M $3.1M $5.3M $6.9M $16.5M $2.3M $3.6M $1.1M -$0.4M Pre-Tax Net Income - 2011-2016 $6.7M -$1.3M $2.5M Security National Mortgage $1.6M $0.8M $3.6M $1.4M $4.2M $4.0M $1.5M $11.0M $1.4M $4.8M $5.7M $11.9M
Slide 25: Switch from Wholesale to Retail
80 Security National Mortgage Switch from Wholesale to Retail – Retail/Wholesale Production Mix 120% 100% 80% 60% 40% 20% 0% Retail Wholesale
Slide 26: Purchase/Refinance Mix
80 Security National Mortgage Purchase/Refinance Mix Production $700M 90% Top States % $659M 80% $600M 37.57% $628M $611M $601M Utah 70% $500M 16.95% 60% $489M Texas $483M $479M $455M $437M $400M $426M 50% 11.38% $412M $391M Nevada $372M $300M 40% 10.54% $300M $297M 30% Florida $250M $240M $200M $21
Slide 27: SNMC Servicing
80 Security National Mortgage SNMC Servicing Volume End of Year Servicing Servicing Year Retained UPB Revenue Profit 2012 $407M $452M $0.5M $.3M 2013 $348M $805M $1.8M $1.1M 2014 $439M $1.2B $2.6M $1.1M 2015 $846M $1.8B $4.2M $1.7M 2016 Q3 YTD $887M $2.5B $4.4M $1.6M • Security National Mortgage Com
Slide 28: Cemetery and Mortuary
80 2012 FOUNDERS MONTH AWARDS
Slide 29: Cemetery and Mortuary
80 Cemetery and Mortuary Cemetery and Mortuary Utah Memorial Desert Mortuary Memorial Holladay Cemetery Memorial Holladay Memorial Lake Hills Mortuary Memorial Lakeview Mortuary 36 East 700 South 4900 South Memory Lane -Cottonwood Mortuary and Cemetery and Cemetery Salt Lake City, UT 84111 Holladay,
Slide 30: Cemetery/Mortuary Segment Snapshot
80 Cemetery/Mortuary Segment Snapshot Cemetery/Mortuary Segment Snapshot 2016 2013 2014 2015 Q3 YTD Total Revenues $13.7M $13.7M $13.6M $10.7M Total Benefits and $13.5M $13.1M $12.7M $9.4M Expenses Net Earnings $0.2M $0.7M $0.9M $1.3M
Slide 31: Memorial
80 Memorial ~1,000 Plots $1,800 $995 per acre Basic Vault Sales Price Average sales price of a plot $1,095 $3.9M 70% Contribution Margin on Open and Close Price Gross Revenue per acre funeral services 65% Profit Margin on merchandise
Slide 32: Demographics – US Live Births (1905-2005)
80 Security National Life Insurance Co. Demographics – US Live Births (1905-2005) GI Generation Silent Generation Baby Boomers Generation X Generation Y (56.6 Million) (52.5 Million) (78.2 Million) (69.5 Million) (100 Million through 2010) 4.5 Latino Immigration 40+ Million Number of Births (in Mill
Slide 33: Cremation Trends
80 Memorial Utah Cremation Cremation Trends Memorial Cremation Average 60% $4,000 50% 52% 23% Increase 49% $3,500 40% $3,336 40% $3,000 $2,966 $2,841 30% $2,707 32% $2,500 30% 26% 20% $2,000 21% 19% $1,500 10% $1,000 0% 2005 2010 2015 2017 Projected $500 National Funeral Director's Association Memor
Slide 34: Memorial Division YTD Net Income
80 Memorial Utah Memorial Division YTD Net Income $1.6M $1.4M $1.5M $1.2M $1.0M $1.1M $0.8M $0.8M $0.6M $0.4M $0.2M $0.0M 2014 Q4 YTD 2015 Q4 YTD 2016 Q3 YTD *Excluding depreciation and realized gains
Slide 35: Stock Price Trend vs. S&P
80 Security National Financial Corporation 10 Year Stock Price Trend vs. S&P 500 350% Current M arket Data 300% Mkt. Cap ($M): $104 Closing Price (03/06/17): $6.70 250% 52-Week High/Low : $7.62 / $4.05 1-Year Return 29.3% 200% 5-Year Return 542.9% Price / Tangible Book: 81% 150% Price / LTM EPS: 7.1
Slide 36: 2012 FOUNDERS MONTH AWARDS
80 2012 FOUNDERS MONTH AWARDS
Security National Financial — Investor Presentation (March 2017) on 6ix