Security National Financial Corporation · NASDAQ:SNFCA
Security National Financial — Investor Presentation (July 2017)
34 slides from Security National Financial's investor presentation, Jul 11, 2017
Slide 1: Security National Financial Corporation Investor Presentation First Quarter 2017
SECURITY NATIONAL FINANCIAL CORPORATION Investor Presentation | First Quarter 2017
Slide 2: "Excellence" is our motto.
MORTGAGE 1K 0X0) greece : in the State of Utal MORTGAGE Scotsman Guide EXECUTIVES TOP MORTGAGE LENDER FAST y TOP Gephardt KOKO) cn | 50 \ MOST \ MORTGAGE INFLUENTIAL SP nner SS MORTGAGE EXECUTIVES SALES & MARKETER OF THE YEAR GDUSA |e GRAPHIC DESIGN USA J/AWARD G THE SAMY AWARD “Excellence” is our m
Slide 3: Business Segments
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 oper
Slide 4: Financial Snapshot
Security National Financial Corporation Financial Snapshot First Quarter 2017 Assets $867M Liabilities $737M Stockholders Equity $130M Book Value Per Share $8.63 1Q 2017 YTD Revenue $69M Earnings After Tax $1.4M Earnings Per Share (Q1) $0.10 Stock Price at 3/31/17 $6.80
Slide 5: Stock Price Trend vs. S&P 500
Security National Financial Corporation 10 Year Stock Price Trend vs. S&P 500 Security National Financial Corporation (SNFCA) S&P 500
Slide 6: Share Data
Security National Financial Corporation Share Data Long term Year hold case for SNFCA Shares owned Share Price Stock Value 1997 1,000 $1.92 $1,920.00 2002 1,276 $1.81 $2,309.56 2007 1,629 $4.79 $7,802.91 2012 2,079 $1.41 $2,931.39 2017 2,653 $6.80 $17,918.00 As of April 1, 2017 13.15% 13.1% Avg. Com
Slide 7: Key SNFCA Ratios
Security National Financial Corporation Key SNFCA Ratios 11.93% 78% $0.96 Return on Equity Price/Book Value Earnings Per Share (5 yr avg.) (2017 Q1) (Trailing Four Quarters) 2.02% $20.75 6.76x Return on Assets Revenue per share Price/Earnings (5 yr avg.) (TTM) (Trailing Four Quarters)
Slide 8: Equity Capital Structure
Security National Financial Corporation Equity Capital Structure Equity Capital Structure 20,000,000 Authorized Class A Common Stock Par Value $2.00 13,820,079 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 $2.0
Slide 9: 1st Quarter Comparison 2016 to 2017
Security National Financial Corporation 1st Quarter Comparison 2016 to 2017 2016 Q1 % Change 2017 Q1 Total Revenues $67M 3.1% $69M Total Benefits and Expenses $63M 6.4% $67M Pre-Tax Earnings $4.2M -46% $2.2M Income Tax expense ($1.6M) 49% ($800k) Net earnings $2.6M -44% $1.5M Earnings per share $0.1
Slide 10: Year End Comparison 2014 to 2016
Security National Financial Corporation Year End Comparison 2014 to 2016 2014 2015 2016 Total Revenues $227M $285M $307M Total Benefits and Expenses $214M $263M $286M Pre-Tax Earnings $12.9M $21.2M $20.7M Income Tax Expense $4.9M $7.7M $6.4M After Tax Earnings $8.0M $13.5M $14.3M Earnings Per Share
Slide 11: Snapshot by Segment
Security National Financial Corporation Snapshot by Segment * Consolidated totals account for intersegment deductions
Slide 12: Asset Growth
Security National Financial Corporation Asset Growth $1000.0M $900.0M $867 $854 $800.0M $750 $700.0M $671 $600.0M $619 $597 $523 $500.0M $400.0M 2011 2012 2013 2014 2015 2016 Q1 2017
Slide 13: Security National Life
Security National Security National Financial Corporation www.SecurityNational.com
Slide 14: Security National Life Products
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. There
Slide 15: Life Insurance Segment Snapshot
Life Insurance Segment Snapshot Life Insurance Segment Snapshot 2014 2015 2016 2017 Q1 Total Revenues $87.9M $94.5M $102.7M $29.2M Total Benefits and $79.4M $86.1M $95.0M $27.3M Expenses Pre-Tax Earnings $8.5M $8.5M $7.7M $1.9M Pre-Tax Earnings Without Realized $7.3M $6.2M $8.0M $1.9M Gains Income T
Slide 16: Collected Premium Margins (Statutory Basis)
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 Mortality Margin Interest
Slide 17: Building Our Salesforce
Building Our Salesforce First Year Insurance & Annuity Annualized Premium Sales 2011-2016 $40M 38 MILLIONS Number of States where Licensed $30M >4,000 $20M Sales Agents $10M 84% Sales Growth 2011 vs. 2016 $0M 2012 2013 2014 2015 2016 Annuities $4,269,485 $4,906,196 $5,321,392 $5,299,115 $6,076,030 H
Slide 18: Security National Life Acquisitions
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
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 product
Slide 20: Security National Mortgage
i Security IN| National MORTGAGEe@ Security National
Slide 21: SNMC Growth
Security National Mortgage SNMC Growth SNMC Offices 2011 SNMC Offices 2016
Slide 22: Mortgage Segment Snapshot
Mortgage Segment Snapshot Mortgage Segment Snapshot 2014 2015 2016 2017 Q1 Total Revenues $134M $185M $199M $39 .6M Total Benefits and $130M $174M $187M $41M Expenses Income Tax Benefit ($1.5M) ($4.6M) ($4.5M) $58K (Expense) Net Earnings (Loss) $2.3M $7.2M $7.3M ($92K) Mortgage Servicing $7.8M $12.7
Slide 23: SNMC Funding Volume
$0.0B $0.5B $1.0B $1.5B $2.0B $2.5B $3.0B 11-Q2 $0.3B 11-Q3 $0.4B 11-Q4 $0.4B 2011 Total $1.4B 12-Q1 $0.4B 12-Q2 $0.6B 12-Q3 $0.7B 12-Q4 $0.7B 2012 Total $2.4B SNMC Funding Volume 13-Q1 $0.5B 13-Q2 $0.6B 13-Q3 $0.5B 13-Q4 $0.5B 2013 Total $2.1B 14-Q1 $0.4B 14-Q2 $0.6B Security National Mortgage 14-Q
Slide 24: Pre-Tax Net Income 2011-2016
-151K 17-Q1 11.8M 2016 Total -108K 16-Q4 5.7M 16-Q3 4.8M 16-Q2 1.4M 16-Q1 11.0M 2015 Total 1.5M 15-Q4 4.0M 15-Q3 4.2M 15-Q2 1.4M 15-Q1 3.6M 2014 Total 799K 14-Q4 1.6M 14-Q3 Security National Mortgage 2.5M 14-Q2 -1290K 14-Q1 Pre-Tax Net Income - 2011-2016 6.7M 2013 Total -363K 13-Q4 1.1M 13-Q3 3.6M 1
Slide 25: Switch from Wholesale to Retail
Security National Mortgage Switch from Wholesale to Retail – Retail/Wholesale Production Mix Chart Title 100% Retail 90% 80% 70% 60% 50% 40% 30% 20% 10% Wholesale 0% 2017 2011 2012 2013 2014 2015 2016
Slide 26: Purchase/Refinance Mix
Security National Mortgage Purchase/Refinance Mix 3.5 Production Top States Billions % 3 34.06% 2.5 Utah 2 16.10% Texas 1.5 13.55% 1 Nevada 0.5 12.33% Florida 0 2013 Total 2014 Total 2015 Total 2016 Total 8.54% Arizona Purchase $1,513,779,761 $1,687,190,848 $2,288,128,561 $2,324,906,523 Refinance $6
Slide 27: SNMC Servicing
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 $1.1B $2.6B $5.8M $2.0M • Security National Mortgage Company retai
Slide 28: Memorial Mortuaries & Cemeteries
MEMORIAL MORTUARIES & CEMETERIES Security National Security National Financial Corporation www.securityNational.com
Slide 29: Cemetery and Mortuary
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, UT
Slide 30: Cemetery/Mortuary Segment Snapshot
Cemetery/Mortuary Segment Snapshot Cemetery/Mortuary Segment Snapshot 2013 2014 2015 2016 Total Revenues $13.7M $13.7M $13.6M $13.6M Total Benefits and $13.5M $13.1M $12.7M $12.4M Expenses Net Earnings $0.2M $0.7M $0.9M $1.2M
Slide 31: Memorial
Memorial ~1,000 Plots $1,800 $995 per acre Average sales price of a Basic Vault Sales Price 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)
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 Million
Slide 33: Cremation Trends
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% 32% $2,500 $2,707 30% 26% 20% 21% $2,000 19% $1,500 10% $1,000 0% 2005 2010 2015 2017 Projected $500 National Funeral Director's Association Memorial
Slide 34: Security National Financial Corporation
Security National Security National Financial Corporation www.SecurityNational.com
Security National Financial — Investor Presentation (July 2017) on 6ix