Nasdaq:SNFCA
SECURITY NATIONAL FINANCIAL CORP
A regional financial services provider focusing on lending, deposits, and investment management with strong cash flow generation.
Key Metrics
Investment Thesis
Bull Case
SNFCA presents an attractive opportunity for value investors seeking exposure to a regionally focused bank with strong balance sheet fundamentals and significant cash reserves; The recent recovery in net income and revenue suggests successful strategic pivoting or favorable economic conditions improving loan demand; Consistent share repurchases of $3.1M indicate management confidence in undervaluation and commitment to shareholder returns.
Bear Case
Investors should be cautious regarding the persistent negative cash flow from investing activities which could signal aggressive portfolio building that may not yet yield sufficient returns; The company's revenue has been volatile over the last three years, dropping significantly in 2023 before recovering, indicating potential sensitivity to interest rate cycles; High accumulated other comprehensive income loss of -$7.0M suggests underlying equity volatility that could impact future capital ratios.
About SECURITY NATIONAL FINANCIAL CORP
Security National Financial Corp (SNFCA) operates as a diversified financial institution serving retail and commercial clients with lending, deposit gathering, and wealth management solutions. The company leverages its substantial cash reserves of over $140 million to maintain liquidity while managing significant investment portfolios valued near $1.5 billion in total assets. Its revenue streams are driven by net interest income and fee-based services within a competitive regional banking landscape.
Analysis
Management Discussion
The company demonstrated resilience in 2024 with revenue recovering to $334.5M and net income rebounding to $26.5M after a challenging 2023, though cash flow from investing activities remains heavily negative at -$43.1M due to substantial marketable security purchases. Operating profit of $34.1M suggests effective cost control despite rising operating expenses, while the increase in cash and equivalents indicates strong operational liquidity management.
Industry Overview
The financial services sector is currently navigating a complex environment characterized by fluctuating interest rates and evolving regulatory landscapes that directly impact regional banks' net interest margins; Competition from fintech disruptors and larger national banks continues to pressure market share for smaller institutions like Security National Financial Corp; Digital transformation investments are critical as consumer expectations for seamless online banking experiences reshape traditional service delivery models.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Revenue | $389.7M | $318.5M | $334.5M |
| Cost of Revenue | $4.7M | $4.8M | $4.8M |
| Gross Profit | $384.9M | $313.7M | $329.7M |
| Operating Expenses | $350.6M | $297.4M | $295.6M |
| Operating Income | $34.4M | $16.3M | $34.1M |
| Stock-Based Comp | $929.7K | $601.4K | $800.8K |
| D&A | $2.5M | $2.4M | $2.4M |
| Depreciation | $8.6M | $8.6M | $8.2M |
| Amortization | $256.0K | $254.0K | $324.0K |
| Non-Operating Income | $0 | $0 | $0 |
| Interest Expense | $7.8M | $4.9M | $4.3M |
| Pre-Tax Income | $34.4M | $16.3M | $34.1M |
| Income Tax | $8.7M | $1.8M | $7.6M |
| Continuing Ops | $25.7M | $14.5M | $26.5M |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $25.7M | $14.5M | $26.5M |
| Minority Interest | $0 | $0 | $0 |
| Net to Common | $25.7M | $14.5M | $26.5M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Cash & Equivalents | $120.9M | $126.9M | $140.5M |
| PP&E (Net) | $20.6M | $19.2M | $19.0M |
| Goodwill | $5.3M | $5.3M | $5.3M |
| Operating Leases | $10.0M | $6.4M | $4.8M |
| Total Assets | $1.46B | $1.43B | $1.49B |
| Taxes Payable | $16.4M | $246.4K | — |
| Total Liabilities | $1.17B | $1.12B | $1.15B |
| Shareholders' Equity | $292.8M | $312.9M | $338.8M |
| Retained Earnings | $202.2M | $207.0M | $225.4M |
| AOCI | $-13.1M | $-6.9M | $-7.0M |
| Treasury Stock | $4.4M | $5.7M | $8.5M |
| Total L&E | $1.46B | $1.43B | $1.49B |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income (CFO) | $25.7M | $14.5M | $26.5M |
| Non-Cash Adjustments | $89.7M | $10.4M | $7.2M |
| Working Capital Changes | $15.0M | $29.0M | $23.6M |
| Cash from Operations | $130.5M | $53.9M | $57.3M |
| Capital Expenditures | $1.6M | $1.1M | $2.5M |
| Cash from Investing | $-37.2M | $14.6M | $-43.1M |
| Share Buybacks | $7.7M | $2.8M | $3.1M |
| Cash from Financing | $-101.2M | $-62.0M | $-4.0M |
| FX Effect | $0 | $0 | $0 |
| Net Change in Cash | $-7.9M | $6.4M | $10.2M |
| Beginning Cash | $141.4M | $133.5M | $139.9M |
| Ending Cash | $133.5M | $139.9M | $150.1M |
Frequently Asked Questions
How does SECURITY NATIONAL FINANCIAL CORP make money?
Core Commercial Banking providing business loans and credit lines; Retail Banking offering consumer mortgages, auto loans, and deposit accounts; Wealth Management delivering advisory services and portfolio management; Corporate Treasury Services handling cash management and capital solutions for institutional clients.
What are the main risks for SNFCA?
Significant volatility in net interest margins impacting profitability as seen in the drop from 2022 to 2023 revenues; High exposure to marketable security fluctuations with $130.8M in other investing outflows affecting cash flow stability; Regulatory capital requirements and potential changes in monetary policy affecting lending volumes.
What is SNFCA's competitive advantage?
Robust liquidity position with $140.5M in cash and equivalents supporting operational flexibility and loan growth; Efficient cost structure evidenced by operating expenses of $295.6M against $334.5M revenue yielding healthy margins; Strong retained earnings management allowing for strategic capital allocation and share repurchases.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.