<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 1997 Commission File Number: 0-9341
SECURITY NATIONAL FINANCIAL CORPORATION
Exact Name of Registrant.
UTAH 87-0345941
- ----------------------------- ------------------
(State or other jurisdiction IRS Identification Number
of incorporation or organization)
5300 South 360 West, Salt Lake City, Utah 84123
- ------------------------------------------ ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including Area Code (801) 264-1060
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES XX NO
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Class A Common Stock, $2.00 par value 3,480,541
- ------------------------------------- ----------------
Title of Class Number of Shares
Outstanding as of
September 30, 1997
Class C Common Stock, $.20 par value 4,910,641
- ------------------------------------- -------------------
Title of Class Number of Shares
Outstanding as of
September 30, 1997
<PAGE>
SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES
FORM 10Q
QUARTER ENDED SEPTEMBER 30, 1997
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Item 1. Financial Statements Page No.
<S> <C>
Consolidated Statements of Earnings - Nine
months ended September 30, 1997 and 1996, and
three months ended September 30, 1997 and 1996 . . . 3
Consolidated Balance Sheets - September 30,
1997 and December 31, 1996 . . . . . . . . . . . . 4-5
Consolidated Statements of Cash Flows -
Nine months ended September 30, 1997 and 1996. . . 6-7
Notes to Consolidated Financial
Statements . . . . . . . . . . . . . . . . . . . . . 8
Item 2 Management's Discussion and Analysis. . . . . . .8-12
PART II - OTHER INFORMATION
Other Information. . . . . . . . . . . . . . . . . .13
Signature Page . . . . . . . . . . . . . . . . . . .14
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SECURITY NATIONAL FINANCIAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
Nine Months Ended September 30,
1997 1996
(Unaudited) (Unaudited)
----------- ----------
<S> <C> <C>
REVENUE:
Insurance premiums
and other considerations $ 4,532,608 $ 4,396,863
Net investment income 5,165,284 5,637,041
Net mortuary and cemetery sales 7,019,648 6,067,639
Realized gains (losses) on
investments and other assets 254,170 (30,733)
Mortgage fee income 4,148,672 6,334,488
Other 28,182 59,173
----------- -----------
Total Revenue $21,148,564 $22,464,471
BENEFITS AND EXPENSES:
Death benefits $1,704,951 $ 1,429,782
Surrenders and other
policy benefits 987,117 1,268,653
Increase in future policy
benefits 2,132,961 1,955,188
Amortization of deferred policy
acquisition costs and cost of
insurance acquired 1,033,053 954,116
General and administrative expenses:
Commissions 3,462,737 4,394,742
Salaries 3,733,669 3,635,914
Other 4,293,988 5,143,323
Interest expense 798,358 1,114,437
Cost of goods and services sold
of the mortuaries and cemeteries 2,101,222 1,759,660
----------- -----------
Total benefits and expenses $20,248,056 $21,655,815
----------- -----------
Earnings before income taxes $ 900,508 $ 808,656
Income tax expense (208,184) (226,764)
----------- -----------
Net earnings $ 692,324 $ 581,892
=========== ===========
Earnings per share $0.17 $0.15
===== =====
Weighted average outstanding
common shares 4,021,920 3,835,326
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
SECURITY NATIONAL FINANCIAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
Three Months Ended September 30,
1997 1996
(Unaudited) (Unaudited)
----------- -----------
<S> <C> <C>
REVENUE:
Insurance premiums
and other considerations $ 1,549,314 $ 1,424,778
Net investment income 1,699,216 1,771,852
Net mortuary and cemetery sales 2,246,972 1,772,697
Realized gains (losses) on
investments and other assets (15,405) (4,709)
Mortgage fee income 1,260,725 1,852,784
Other 5,972 16,216
----------- -----------
Total Revenue $ 6,746,794 $ 6,833,618
BENEFITS AND EXPENSES:
Death benefits $ 493,843 $ 407,623
Surrenders and other
policy benefits 212,508 460,436
Increase in future policy
benefits 834,897 508,719
Amortization of deferred policy
acquisition costs and cost of
insurance acquired 393,698 308,994
General and administrative expenses:
Commissions 1,064,957 1,389,742
Salaries 1,298,302 1,233,124
Other 1,344,620 1,469,616
Interest expense 260,507 350,805
Cost of goods and services sold
of the mortuaries and cemeteries 650,124 559,355
----------- -----------
Total benefits and expenses $ 6,553,456 $ 6,688,414
----------- -----------
Earnings before income taxes $ 193,338 $ 145,204
Income tax expense (43,072) (40,719)
----------- -----------
Net earnings $ 150,266 $ 104,485
=========== ============
Earnings per share $0.04 $0.03
===== =====
Weighted average outstanding
common shares 4,015,855 3,829,213
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
SECURITY NATIONAL FINANCIAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30, 1997 December 31,
(Unaudited) 1996
------------------ ------------
<S> <C> <C>
Assets:
Investments:
Fixed maturity securities
held to maturity,
at amortized cost $48,172,792 $47,934,684
Equity securities available
for sale, at market 4,427,692 4,133,105
Mortgage loans on real estate 7,888,140 9,809,379
Real estate, net of
accumulated depreciation 7,631,446 7,808,255
Policy loans 2,819,664 3,021,155
Other loans 127,445 218,437
Short-term investments 4,498,577 2,258,283
----------- ----------
Total insurance
related investments 75,565,756 75,183,298
Restricted assets of cemeteries
and mortuaries 3,792,636 3,454,622
Cash 2,797,141 3,301,084
Receivables:
Trade contracts 4,496,522 4,514,010
Mortgage loans sold to
investors 12,643,853 13,455,123
Receivable from agents 793,399 670,439
Other 317,067 292,680
----------- -----------
Total receivables 18,250,841 18,932,252
Allowance for doubtful
accounts (1,693,151) (1,862,599)
----------- -----------
Net receivables 16,557,690 17,069,653
Land and improvements held
for sale 8,481,609 8,456,302
Accrued investment income 1,019,801 1,040,242
Deferred policy acquisition
costs 4,179,672 4,277,560
Property, plant and equipment,
net 6,395,654 6,513,980
Cost of insurance acquired 3,509,364 3,748,654
Excess of cost over net assets
of acquired subsidiaries 1,330,106 1,370,708
Other 614,283 293,400
------------ ------------
Total Assets $124,243,712 $124,709,503
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
SECURITY NATIONAL FINANCIAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Continued)
September 30, 1997 December 31,
(Unaudited) 1996
------------------ --------------
<S> <C> <C>
Liabilities:
Future life, annuity, and other
policy benefits $77,517,422 $76,962,062
Line of credit for financing
of mortgage loans -0- 1,211,890
Bank loans payable 6,137,731 6,768,119
Notes and contracts payable 3,560,246 4,509,921
Estimated future costs of
pre-need sales 6,186,657 5,874,387
Payable to endowment
care fund 141,347 70,617
Accounts payable 1,255,435 1,199,920
Other liabilities and
accrued expenses 1,974,383 1,902,046
Income taxes 2,949,309 2,742,513
----------- -----------
Total Liabilities 99,722,530 101,241,475
Stockholders' Equity:
Common stock:
Class A: $2 par value,
authorized 10,000,000 shares,
issued 4,109,106 shares in
1997 and 4,110,709 shares
in 1996 8,218,212 8,221,418
Class C: $0.20 par value,
authorized 7,500,000 shares,
issued 4,964,181 shares in
1997 and 4,967,072 shares
in 1996 992,836 993,413
----------- -----------
Total common stock 9,211,048 9,214,831
Additional paid-in capital 8,675,386 8,675,386
Unrealized appreciation of
investments 659,693 259,915
Retained earnings 7,814,636 7,118,528
Treasury stock at cost
(628,565 Class A shares and
53,540 Class C shares in 1997;
631,576 Class A shares and
53,540 Class C shares in 1996,
held by affiliated companies) (1,839,581) (1,800,632)
------------ ------------
Total Stockholders' Equity 24,521,182 23,468,028
------------ ------------
Total Liabilities and
Stockholders' Equity $124,243,712 $124,709,503
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
SECURITY NATIONAL FINANCIAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30,
1997 1996
(Unaudited) (Unaudited)
----------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $692,324 $581,892
Adjustments to reconcile net
earnings to net cash provided
by operating activities:
Realized (gains) losses on
investments and other assets (254,171) 24,574
Depreciation 590,517 940,854
Provision for losses on accounts
and loans receivable (169,447) (298,604)
Amortization of goodwill, premiums,
and discounts 9,396 6,002
Income taxes 206,796 226,593
Policy acquisition costs
deferred (695,875) (613,967)
Policy acquisition costs
amortized 793,763 762,016
Cost of insurance acquired
amortized 239,290 192,100
Change in assets and liabilities
net of effects from purchases
and disposals of subsidiaries:
Land and improvements held
for sale (25,307) (790,897)
Future life and other benefits 1,875,664 1,574,734
Receivables for mortgage
loans sold 811,270 9,758,847
Other operating assets
and liabilities 80,550 1,287,061
----------- ------------
Net cash provided by
operating activities 4,154,770 13,651,205
Cash flows from investing activities:
Securities held to maturity:
Purchase of fixed maturity
securities (6,412,063) (1,496,514)
Calls and maturities
- fixed maturity securities 6,232,281 4,510,053
Securities available for sale:
Purchases - equity securities (169,605) (9,531)
Proceeds from sales of equity
securities 501,847 161,295
Purchases of short-term
investments (3,951,926) (6,283,205)
Sales of short-term investments 1,711,632 3,327,880
Purchases of restricted assets (338,014) (368,904)
Mortgage, policy, and other
loans made (362,837) (3,698,291)
Payments received for
mortgage, policy, and other loans 2,576,559 1,034,627
Purchases of property, plant,
and equipment (249,237) (752,881)
Purchases of real estate (46,145) (90,515)
------------ -----------
Net cash used in
investing activities (507,508) (3,665,986)
</TABLE>
<PAGE>
SECURITY NATIONAL FINANCIAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1997 1996
(Unaudited) (Unaudited)
----------- -----------
<S> <C> <C>
Cash flows from financing activities:
Annuity receipts 1,911,600 2,171,786
Annuity withdrawals (3,231,904) (3,650,348)
Repayment of bank loans and
notes and contracts payable (1,580,063) (1,064,467)
Proceeds from borrowings on bank
loans and notes and
contracts payable -0- 42,489
Purchase of treasury stock (38,948) -0-
Net decrease in line of credit for
financing of mortgage loans (1,211,890) (12,262,083)
------------ ------------
Net cash used in financing
activities (4,151,205) (14,762,623)
------------ ------------
Net change in cash (503,943) (4,777,404)
Cash at beginning of period 3,301,084 7,712,155
------------ ------------
Cash at end of period $ 2,797,141 $ 2,932,751
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1997 and 1996
(Unaudited)
1. Basis of Presentation
---------------------
The accompanying unaudited consolidated financial statements
have been prepared in accordance with generally accepted
accounting principles for interim financial information and
with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the
nine months ended September 30, 1997, are not necessarily
indicative of the results that may be expected for the year
ending December 31, 1997. For further information, refer to
the consolidated financial statements and footnotes thereto
for the year ended December 31, 1996, included in the
Company's Annual Report on Form 10-K (file number 0-9341).
Reclassification to certain 1996 balances have been made to
conform with the 1997 presentation.
MANAGEMENT'S DISCUSSION AND ANALYSIS
Results of Operations
Overview
The Company's operations over the last several years generally
reflect three trends or events which the Company expects to
continue: (i) increased attention to "niche" insurance
products, such as the Company's funeral plan policies,
annuities, and limited pay accident policies; (ii) emphasis on
high margin cemetery and mortuary business; and (iii)
capitalizing on the strong economy in the intermountain west
by originating and refinancing mortgage loans.
Three Months Ended September 30, 1997 as Compared to Three
Months Ended September 30, 1996
Total revenues decreased by $87,000, or 1.3%, to $6,747,000
for the three months ended September 30, 1997, from $6,834,000
for the three months ended September 30, 1996. Contributing
to this reduction in total revenues was a $73,000 decrease in
net investment income and a $592,000 decrease in mortgage fee
income. These decreases were partially offset by a $125,000
increase in insurance premiums and other considerations, and
a $474,000 increase in net mortuary and cemetery sales.
Insurance premiums and other considerations increased by
$125,000, or 8.7% to $1,549,000 for the three months ended
September 30, 1997, from $1,425,000 for the comparable period
in 1996. This increase was primarily due to an increase in
policies in force from new business.
Net investment income decreased by $73,000, or 4.1%, to
$1,699,000 for the three months ended September 30, 1997, from
$1,772,000 for the comparable period in 1996. This reduction
was attributable to the Company maintaining larger short term
investment balances and warehousing fewer mortgage loans
during the third quarter of 1997.
<PAGE>
Net mortuary and cemetery sales increased by $474,000, or
26.8%, to $2,247,000 for the three months ended September 30,
1997, from $1,773,000 for the comparable period in 1996. This
increase was primarily related to additional sales from the
opening of Singing Hills Memorial Park Cemetery in San Diego,
California during the third quarter of 1996 and from the
acquisition of Crystal Rose Funeral Home in February 1997.
Sales of cemetery and mortuary products also increased at the
Company's other cemeteries and mortuaries.
Mortgage fee income decreased by $592,000, or 32.0%, to
$1,261,000 for the three months ended September 30, 1997, from
$1,853,000 for the comparable period in 1996. This reduction
was primarily attributable to fewer loan originations during
the third quarter of 1997 as a result of a general reduction
in the total number of mortgage loans made in the Utah market
and an increase in the number of competitors in the market
place.
Total benefits and expenses were $6,553,000, or 97.1% of total
revenues for the three months ended September 30, 1997, as
compared to $6,688,000, or 97.9% of total revenues for the
three months ended September 30, 1996.
Death benefits, surrenders and other policy benefits and
increase in future policy benefits increased by $164,000, or
12.0%, to $1,541,000 for the three months ended September 30,
1997, from $1,377,000 for the comparable period in 1996. This
increase was primarily the result of an increase in death
claims and reserve increases due to more policies in force
during the third quarter in 1997.
Amortization of deferred policy acquisition costs increased by
$85,000, or 27.4%, to $394,000, for the three months ended
September 30, 1997, from $309,000 for the comparable period in
1996. This increase was expected since policies in force have
increased from one year ago.
General and administrative expenses decreased by $385,000, or
9.4%, to $3,708,000 for the three months ended September 30,
1997, from $4,092,000 for the comparable period in 1996. This
reduction in general and administrative expenses primarily
resulted from a decrease in commissions and other expenses due
to fewer mortgage loan originations having been made by the
Company's mortgage subsidiary.
Interest expense decreased by $90,000, or 25.7%, to $261,000
for the three months ended September 30, 1997, from $351,000
for the comparable period in 1996. This decrease was
primarily due to fewer mortgage loan originations by the
Company's mortgage subsidiary.
Cost of goods and services sold of the mortuaries and
cemeteries increased by $91,000, or 16.2%, to $650,000 for the
three months ended September 30, 1997, from $559,000 for the
comparable period in 1996. This increase was consistent with
the increase in net mortuary and cemetery sales.
Nine Months Ended September 30, 1997 as Compared to Nine
Months Ended September 30, 1996
Total revenues decreased by $1,316,000, or 5.9%, to
$21,149,000 for the nine months ended September 30, 1997, from
$22,464,000 for the nine months ended September 30, 1996.
Contributing to this reduction in total revenues was a
$472,000 decrease in net investment income and a $2,186,000
<PAGE>
decrease in mortgage fee income. These decreases were
partially offset by a $952,000 increase in net mortuary and
cemetery sales, and a $136,000 increase in insurance premiums
and other considerations, and a $285,000 increase in realized
gains in investments.
Insurance premiums and other considerations increased by
$136,000, or 3.1%, to $4,533,000 for the nine months ended
September 30, 1997, from $4,397,000 for the comparable period
in 1996. This increase was primarily due to an increase in
policies in force.
Net investment income decreased by $472,000, or 8.4%, to
$5,165,000 for the nine months ended September 30, 1997, from
$5,637,000 for the comparable period in 1996. This decrease
was attributable to the Company maintaining larger short term
investment balances and warehousing fewer mortgage loans
during the first nine months of 1997.
Net mortuary and cemetery sales increased by $952,000, or
15.7%, to $7,020,000 for the nine months ended September 30,
1997, from $6,068,000 for the comparable period in 1996. This
increase was primarily related to additional sales from the
opening of Singing Hills Memorial Park Cemetery in San Diego,
California during the third quarter of 1996 and the
acquisition of Crystal Rose Funeral Home in February 1997.
Sales of cemetery and mortuary products also increased at the
Company's other cemeteries and mortuaries.
Mortgage fee income decreased by $2,186,000, or 34.5%, to
$4,149,000 for the nine months ended September 30, 1997, from
$6,334,000 for the comparable period in 1996. This reduction
was primarily attributable to fewer loan originations during
the first nine months of 1997 as a result of a general
reduction in 1997 in the total number of mortgage loans in the
Utah market and an increase in the number of competitors in
the market place.
Realized gains on investments increased by $285,000 to
$254,000 for the nine months ended September 30, 1997 from a
loss of $31,000 for the comparable period in 1996. This
increase was the result of the sale of investments in
securities for a net gain.
Total benefits and expenses were $20,248,000, or 95.7% of
total revenues for the nine months ended September 30, 1997,
as compared to $21,656,000, or 96.4% of total revenues for the
nine months ended September 30, 1996.
Death benefits, surrenders and other policy benefits and
increase in future policy benefits increased by $171,000, or
3.7%, to $4,825,000 for the nine months ended September 30,
1997, from $4,654,000 for the comparable period in 1996. This
increase was primarily the result of an increase in death
claims and reserve increases due to more policies in force.
Amortization of deferred policy acquisition costs increased by
$79,000 or 8.3%, to $1,033,000, for the nine months ended
September 30, 1997, from $954,000 for the comparable period in
1996. This increase was expected since policies in force have
increased from one year ago.
<PAGE>
General and administrative expenses decreased by $1,684,000,
or 12.8%, to $11,490,000 for the nine months ended September
30, 1997, from $13,174,000 for the comparable period in 1996.
This reduction in general and administrative expenses
primarily resulted from a decrease in commissions and other
expenses due to fewer mortgage loan originations having been
made by the Company's mortgage subsidiary.
Interest expense decreased by $316,000, or 28.4%, to $798,000
for the nine months ended September 30, 1997, from $1,114,000
for the comparable period in 1996. This decrease was
primarily due to fewer mortgage loan originations by the
Company's mortgage subsidiary.
Cost of goods and services sold of the mortuaries and
cemeteries increased by $342,000, or 19.4%, to $2,101,000 for
the nine months ended September 30, 1997, from $1,760,000 for
the comparable period in 1996. This increase was consistent
with the increase in net mortuary and cemetery sales.
Liquidity and Capital Resources
The Company's life insurance subsidiary and cemetery and
mortuary subsidiaries realize cash flow from premiums,
contract payments and sales on personal services rendered for
cemetery and mortuary business, from interest and dividends on
invested assets, and from the proceeds from the maturity of
held-to-maturity investments, or sale of other investments.
The mortgage subsidiary realizes cash flow from fees generated
by originating and refinancing mortgage loans and interest
earned on mortgages sold to investors. The Company considers
these sources of cash flow to be adequate to fund future
policyholder and cemetery and mortuary liabilities, which
generally are long-term, and adequate to pay current
policyholder claims, annuity payments, expenses on the
issuance of new policies, the maintenance of existing
policies, debt service, and to meet operating expenses.
The Company attempts to match the duration of invested assets
with its policyholder and cemetery and mortuary liabilities.
The Company may sell investments other than those held to
maturity in the portfolio to help in this timing; however, to
date, that has not been necessary. The Company purchases
short-term investments on a temporary basis to meet the
expectations of short-term requirements of the Company's
products. The Company's investment philosophy is intended to
provide a rate of return which will persist during the
expected duration of policyholder and cemetery and mortuary
liabilities regardless of future interest rate movements.
The Company's investment policy is to invest predominately in
fixed maturity securities and warehouse mortgage loans on a
short-term basis before selling the loans to investors in
accordance with the requirements and laws governing the life
insurance subsidiary. Bonds owned by the insurance subsidiary
amounted to $48,191,000 at amortized cost as of September 30,
1997 compared to $47,906,000 at amortized cost as of December
31, 1996. This represents 63% of the total insurance related
investments in 1997 as compared to 63% in 1996. Generally,
all bonds owned by the life insurance subsidiary are rated by
the National Association of Insurance Commissioners (NAIC).
Under this rating system, there are six categories used for
rating bonds. At September 30, 1997, 4.0% ($1,952,000) and at
December 31, 1996, 4.1% ($1,994,000) of the Company's total
investment in bonds were invested in bonds in rating
categories three through six which are considered
non-investment grade.
<PAGE>
The Company intends to hold its fixed income securities,
including high-yield securities, in its portfolio to maturity.
Business conditions, however, may develop in the future which
may indicate a need for a higher level of liquidity in the
investment portfolio. In that event the Company believes it
could sell short-term investment grade securities before
liquidating high-yielding longer term securities.
The Company is subject to risk based capital guidelines
established by statutory regulators requiring minimum capital
levels based on the perceived risk of assets, liabilities,
disintermediation, and business risk. At December 31, 1996
and 1995, the life subsidiary exceeded the regulatory
criteria.
The Company's capitalization of stockholders' equity and long
term debt was $34,219,000 for the nine months ended September
30, 1997 as compared to $34,388,000 for the nine months ended
September 30, 1996. Stockholders' equity as a percent of
capitalization increased to 71.7% for the nine months ended
September 30, 1997 from 66.2% for the nine months ended
September 30, 1996 and as a percent of assets increased to
19.7% from 18.0%, respectively.
Lapse rates measure the amount of insurance terminated during
a particular period. The Company's lapse rate for life
insurance for 1996 was 12% as compared to a rate of 10.5% for
1995. The 1997 lapse rate is approximately the same as 1996.
In February 1997, the Company purchased all of the outstanding
shares of common stock of Crystal Rose Funeral Home, Inc., an
Arizona based mortuary, for a total consideration of $547,000.
The purchase price included a note to the former owner in the
amount of $297,000.
At September 30, 1997, $10,644,000 of the Company's
consolidated stockholders' equity represents the statutory
stockholders' equity of the Company's insurance subsidiary.
The life insurance subsidiary cannot pay a dividend to its
parent company without the approval of insurance regulatory
authorities.
<PAGE>
<TABLE>
<CAPTION>
Part II Other Information:
<S> <S>
Item 1. Legal Proceedings
NONE
Item 2. Changes in Securities
NONE
Item 3. Defaults Upon Senior Securities
NONE
Item 4. Submission of Matters to a Vote of Security Holders
On September 24, 1997, at the Company's annual
meeting of shareholders, the shareholders elected
George R. Quist, William C. Sargent, Scott M.
Quist, Charles L. Crittenden, Sherman B. Lowe, H.
Craig Moody, R.A.F. McCormick and Nathan H.
Wagstaff to serve as directors of the Company until
the next annual meeting of shareholders. The
shareholders also ratified the appointment of Ernst
& Young LLP as the independent accountants for the
fiscal year 1997 by a vote of 6,756,263 shares for,
616 shares against, and 22,449 shares abstained.
Item 5. Other Information
NONE
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
The Company did not file any reports on Form
8-K for the three months ending September 30,
1997.
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
REGISTRANT
SECURITY NATIONAL FINANCIAL CORPORATION
Registrant
DATED: November 14, 1997 By: George R. Quist,
Chairman of the Board,
President and Chief
Executive Officer
(Principal Executive
Officer)
DATED: November 14, 1997 By: Scott M. Quist
First Vice President,
General Counsel and
Treasurer (Principal
Financial and Accounting
Officer)
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