Security National Financial Corporation (SNFCA): BCG Matrix [Dec-2025 Updated]

You're looking for a clear-eyed assessment of Security National Financial Corporation's (SNFCA) current standing, and honestly, the late 2025 picture is a classic mix of high-potential growth and serious operational drag. We see the stability of the Death Care segment, which keeps churning out reliable profit from pre-need sales and a $20.1 million investment income stream in Q3, but that stability is balanced against the Mortgage Segment, which posted a near-loss of only $66,000 in Q3 despite a 312% jump from last year. The core question revolves around where to place capital: do you back the 10.5% ROE potential in the Life Insurance Stars quadrant, or do you first address the high cash burn required to fix the Question Mark profitability that saw earnings drop 27%? Let's break down the four quadrants to see exactly where Security National Financial Corporation is winning and where it needs immediate triage.

Background of Security National Financial Corporation (SNFCA)

You're looking at Security National Financial Corporation (SNFCA) as of late 2025, and honestly, the picture is one of resilience across a diverse set of businesses, even if the headline earnings look a bit pressured. Security National Financial Corporation, headquartered in Salt Lake City, Utah, operates across three main areas: life insurance, cemetery and mortuary services, and mortgage lending. This financial diversity is something management often points to as a strength, especially when one segment faces headwinds.

Looking at the most recent figures, for the third quarter ending September 30, 2025, Security National Financial Corporation reported total revenues of $89.3 million, a slight bump up from $88.3 million the year prior. However, the bottom line showed a contraction; after-tax earnings for that quarter fell 34% to $7.8 million compared to $11.8 million in Q3 2024. For the first nine months of 2025, after-tax earnings were $18.866 million, marking a 30% decrease year-over-year.

The company's investment portfolio provided a bright spot, with net investment income climbing to $20.1 million in Q3 2025. This helped support the overall structure, as evidenced by the Return On Equity (ROE) for the nine-month period hitting 7.9%, which management annualized to about 10.5%. As of September 30, 2025, the book value per common share stood at $14.79, with 24,697,314 Class A equivalent shares outstanding.

Digging into the segments, the Mortgage Segment achieved a significant milestone by being profitable in Q3 2025, its third profitable quarter in the last three years, despite the mortgage market remaining troubled. Pre-tax net income for that segment was $66,000 on origination volumes of $622 million for the quarter, though market share did slip a bit. Meanwhile, the Cemetery and Mortuary Segment showed improved results, with Cemetery Earnings Before Tax reaching $880,000 in Q3 2025, a 21.7% increase from the prior year, driven by stabilized pre-need cemetery land sales.

The Life Insurance Segment, conversely, faced earnings weakness for the quarter, posting pre-tax income of $7.5 million compared to $11.8 million in Q3 2024. This was attributed to factors like increased deferred acquisition costs and lower unrealized gains on common stock, plus the segment didn't hit its goal for new life premium sales. To be fair, the company is preparing for a big change, as new accounting standards, known as Long Duration Targeted Improvements (LDTI), are set for implementation in Q4 2025, which will definitely cause some adjustments to those financial statements.

Security National Financial Corporation (SNFCA) - BCG Matrix: Stars

You're looking at the business units that Security National Financial Corporation is pouring resources into, expecting them to dominate their markets as those markets mature. These are the areas where high market share meets high growth potential, demanding significant cash to maintain that leadership position.

The Life Insurance segment is definitely positioned here, even with the recent quarterly earnings dip. Management is focused on growing new life premium sales, and you see the commitment in the underlying strategy. For example, the company has been implementing new premium rates, which are expected to add 1.5 percentage points of ROE over the shorter term. This is a long-term play; the full effect of those margin increases won't be apparent for several years hence. Still, in Q2 2025, Life Insurance segment revenues were up 9.1% to $51.5 million with improved profits, showing the underlying momentum. The Q3 2025 results were weak for the quarter, primarily due to DAC, CECL, and lower unrealized gains on common stock, but the strategic investment in talent continues.

The strategic capital deployment into residential land holdings is another clear indicator of a Star-like focus-investing heavily now for much higher future yields. This year, Security National Financial Corporation made a gross additional investment of approximately $50MM into these holdings. What this estimate hides is the immediate cost: deploying that money means sacrificing about 1 percentage point of current year ROE, which equates to approximately $2MM of additional current income, if that capital had stayed in regular investment portfolios. The belief is that this deployment into land and builder relationships will be positively accretive over time.

To support this growth push, management talent has been a major focus. Personnel Costs rose 11.7%, or roughly $2.2MM, over 2024 in Q1 alone, largely representing deliberate strategic hirings of high-quality individuals for sales and fulfillment staffs. By Q3 2025, this investment was showing some operational efficiency, as YTD personnel costs were up roughly 6%, but flat for the quarter itself. This investment in talent, especially in sales, is what you expect when funding a Star.

Here's a quick look at the financial context supporting these growth investments:

The strategy for these high-potential areas involves clear action points:

• Invest capital into residential land holdings for higher future yields.
• Implement new, higher premium rates in Life Insurance for margin improvement.
• Continue recruiting improved sales and executive talent across segments.
• Focus on growing new life premium sales despite recent weakness.

The overall company resilience, evidenced by the 10.5% annualized ROE for the nine months ended September 30, 2025, provides the financial base to fund these Star initiatives, even if current operating earnings are a little disappointing. Finance: draft 13-week cash view by Friday.

Security National Financial Corporation (SNFCA) - BCG Matrix: Cash Cows

The Cash Cow quadrant for Security National Financial Corporation (SNFCA) is anchored by business units that command a high market share in mature sectors, generating significant cash flow to support other company endeavors. The Death Care segment, encompassing Cemetery and Mortuary operations, fits this profile, demonstrating consistent operational strength.

The Cemetery and Mortuary segment, a core component of Security National Financial Corporation (SNFCA), posted improved results over Q3 2024. This stability in a mature market, coupled with high-margin sales, solidifies its Cash Cow status. You can see the financial context for this segment's contribution relative to the overall company performance in the third quarter of 2025.

Stable, high-margin pre-need sales within the Death Care segment are a major profit driver for Security National Financial Corporation (SNFCA). Management noted seeing stabilized, if not improved, pre-need cemetery land sales. This focus on high-margin, long-term contracts minimizes the need for heavy promotional spending typical of high-growth areas.

The strength in investment performance directly bolsters the cash position, which is crucial for a Cash Cow. Net investment income rose to $20.1 million in Q3 2025. This cash generation helps cover corporate overhead and fund other parts of the business. Investments into supporting infrastructure, like the revamp of the cemetery sales force mentioned by management, are aimed at improving efficiency and further increasing this cash flow.

The consistent local market strength reinforces the high market share assumption for this segment. While the prompt mentions a seven-year streak, the available data confirms strong recognition for the Death Care operations of Security National Financial Corporation (SNFCA).

• Cemetery and Mortuary Segment posted improved results over Q3 2024.
• Pre-need cemetery land sales are stabilized or improved.
• Pre-need sales are identified as a major profit driver.
• Memorial Mortuaries and Cemeteries previously received the Best of State award in Utah (as of 2020 reporting).

The ability of Security National Financial Corporation (SNFCA) to generate this reliable cash flow is what makes the Death Care segment a classic Cash Cow. This cash is what you use to fund the Question Marks or maintain the Stars. For example, the company has been focused on growing new life premium sales, which is a growth area that requires funding.

Security National Financial Corporation (SNFCA) - BCG Matrix: Dogs

The Mortgage Segment of Security National Financial Corporation (SNFCA) clearly falls into the Dogs quadrant of the BCG Matrix. This classification stems from its position in a low-growth, troubled industry coupled with persistent financial underperformance, despite recent minor upticks.

This segment is characterized by low market share within the broader, yet currently depressed, mortgage market and low growth prospects in the near term. Management's strategy here aligns with the typical Dog approach: minimize exposure and avoid expensive turn-around plans, as the segment frequently consumes resources without generating substantial returns.

The financial performance for the nine months ended September 30, 2025, illustrates this drag on overall corporate results. The segment's overall loss widened by 94% to $(2.8) million for the first nine months of 2025. This widening loss indicates that the underlying operational challenges have intensified over the longer reporting period.

To be fair, there was a flicker of positive operational news in the most recent quarter, which is a key data point for this unit:

• The segment's Q3 2025 pre-tax net income was only $66,000.
• This Q3 result represented a significant, though small, improvement of 312% over the Q3 2024 pre-tax net income of $16,000.
• This profitability marked only the third profitable quarter for the Mortgage Segment in the last three years.

The segment's low market share and low growth environment are further complicated by significant operational risk. You should note the high operational risk associated with the segment's reliance on warehouse lines of credit. Specifically, there is a persistent concern regarding breaching an adjusted tangible net worth covenant on a warehouse line of credit, which creates a critical, immediate financial vulnerability for Security National Financial Corporation.

Here is a summary of the key financial indicators positioning the Mortgage Segment as a Dog:

The segment frequently breaks even or consumes cash, acting as a cash trap where capital is tied up with minimal return. Divestiture remains the prime strategic option for such units, especially when facing covenant pressure. Finance: review the capital allocation plan for the Mortgage Segment by end of Q1 2026.

Security National Financial Corporation (SNFCA) - BCG Matrix: Question Marks

You're looking at the Life Insurance segment of Security National Financial Corporation (SNFCA) as a prime candidate for the Question Marks quadrant. These are areas in a growing market that haven't captured significant share yet, meaning they burn cash while management tries to drive adoption. The core issue here is translating investment into market penetration, especially when current profitability is under pressure.

The segment's core profitability shows this strain. For the nine months ended September 30, 2025, after-tax earnings for the entire company were $18,866,000, a decrease of 30% from $26,578,000 in the prior year period. Focusing just on the Life Insurance segment's quarterly performance, the pressure is clear.

The Q3 2025 Life Insurance pre-tax income fell sharply. On a GAAP basis, the segment generated net income before taxes of approximately $7.5 million for the quarter, compared to $11.8 million in Q3 2024. This represents a pre-tax decrease of $4.4 million, or 37%. The company noted this weakness was due to factors like DAC (Deferred Acquisition Costs), CECL (Current Expected Credit Losses), and lower unrealized gains on common stock.

Here's a quick comparison of that quarterly pre-tax income:

Looking ahead, there are significant future adjustments expected from the Q4 2025 implementation of new LDTI (Long Duration Targeted Improvements) accounting standards in the Life Insurance Segment. This implementation will cause significant adjustments to Benefit Reserves, Deferred Acquisition Costs, and the introduction of a Deferred Profit Liability, though management states these reflect new standards, not current calculation inappropriateness.

The strategy to gain market share is directly tied to cash consumption. The goal is to grow new life premium sales, a goal that was not achieved in the third quarter. Premium revenue is currently flat, even though the margin on new first-year premium writings is up due to rate increases. This flat revenue trend necessitates heavy investment. Much of the increased personnel costs, which are up roughly 6% year-to-date, are centered in this Life Insurance Segment due to the hiring of new management and sales talent.

The immediate actions required to shift this unit from a Question Mark to a Star involve aggressive investment to drive adoption, which means accepting current cash consumption. Key areas demanding this cash input include:

• Investment in new sales teams.
• Investment in new sales systems.
• Efforts to reverse the flat premium revenue trend.
• Offsetting increased personnel costs.

If these investments do not quickly translate into market share gains, the unit risks becoming a Dog. Finance: draft the cash impact analysis for the LDTI implementation by next Tuesday.