<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 March 31, 1998 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 3,673,430
- -------------------------------------- ---------------------
Title of Class Number of Shares
Outstanding as of
March 31, 1998
Class C Common Stock, $.20 par value 5,142,902
- ------------------------------------- ---------------------
Title of Class Number of Shares
Outstanding as of
March 31, 1998
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<TABLE>
<CAPTION>
SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES
FORM 10Q
QUARTER ENDED MARCH 31, 1998
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements Page No.
<S> <C>
Consolidated Statements of Earnings - Three
months ended March 31, 1998 and 1997 . . . . . . . . . 3
Consolidated Balance Sheets - March 31, 1998
and December 31, 1997. . . . . . . . . . . . . . .. . . 4-5
Consolidated Statements of Cash Flow -
Three months ended March 31, 1998 and 1997 . . . . . . 6-7
Notes to Consolidated Financial
Statements . . . . . . . . . . . . . . . . . . . . . . 8-9
Item 2 Management's Discussion and Analysis. . . . . . . . . . . .9-13
PART II - OTHER INFORMATION
Other Information. . . . . . . . . . . . . . . . . . . .14
Signature Page . . . . . . . . . . . . . . . . . . . . .15
</TABLE>
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<TABLE>
<CAPTION>
SECURITY NATIONAL FINANCIAL CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Earnings
Three Months Ended March 31,
1998 1997
(Unaudited) (Unaudited)
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<S> <C> <C>
Revenues:
Insurance premiums and
other considerations $1,558,065 $1,472,623
Net investment income 1,844,154 1,773,427
Net mortuary and cemetery sales 2,439,292 2,500,363
Realized gains on investments
and other assets 36,046 36,027
Mortgage fee income 1,903,946 1,626,119
Other 25,922 10,932
---------- -----------
Total revenue 7,807,425 7,419,491
Benefits and expenses:
Death benefits 510,348 528,424
Surrenders and other
policy benefits 299,489 266,454
Increase in future policy
benefits 754,390 742,452
Amortization of deferred policy
acquisition costs and cost of
insurance acquired 296,527 314,828
General and administrative expenses:
Commissions 1,554,933 1,270,293
Salaries 1,263,270 1,266,044
Other 1,658,126 1,511,638
Interest expense 185,298 277,522
Cost of goods and services sold
of the mortuaries and cemeteries 670,879 731,862
---------- ----------
Total benefits and expenses 7,193,260 6,909,517
---------- ----------
Earnings before income taxes 614,165 509,974
Income tax expense (135,255) (117,294)
---------- ----------
Net earnings $ 478,910 $ 392,680
========== ==========
Net earnings per common share $0.11 $0.10
===== =====
Weighted average outstanding
common shares 4,185,555 3,970,486
========== ==========
Net earnings per common
share-assuming dilution $0.11 $0.10
===== =====
Weighted average outstanding
common shares-assuming
dilution 4,185,555 4,003,497
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
SECURITY NATIONAL FINANCIAL CORPORATION
AND SUBSIDIARIES
Consolidated Balance Sheets
March 31, 1998 December 31,
(Unaudited) 1997
-------------- ------------
<S> <C> <C>
Assets:
- -------
Insurance-related investments:
Fixed maturity securities
held to maturity,
at amortized cost $ 49,025,464 $ 49,784,898
Equity securities available
for sale, at market 4,861,816 4,831,813
Mortgage loans on real estate 9,151,866 8,307,237
Real estate, net of
accumulated depreciation 7,580,197 7,559,725
Policy loans 2,872,452 2,882,711
Other loans 73,696 84,147
Short-term investments 2,657,487 3,698,941
-------------- ------------
Total insurance-
related investments 76,222,978 77,149,472
Restricted assets of
cemeteries and mortuaries 3,964,374 3,889,785
Cash 984,448 3,408,179
Receivables:
Trade contracts 4,256,272 4,323,011
Mortgage loans sold
to investors 16,642,938 11,398,432
Receivable from agents 834,406 816,657
Other 942,394 364,782
------------- -----------
Total receivables 22,676,010 16,902,882
Allowance for doubtful
accounts (1,709,530) (1,679,090)
------------- -----------
Net receivables 20,966,480 15,223,792
Land and improvements
held for sale 8,509,353 8,466,886
Accrued investment income 1,061,886 1,001,998
Deferred policy acquisition
costs 4,474,324 4,433,841
Property, plant and
equipment, net 6,880,948 6,641,562
Cost of insurance acquired 3,290,295 3,370,018
Excess of cost over net assets
of acquired subsidiaries 1,495,997 1,554,505
Other 328,286 311,841
------------ ------------
Total assets $128,179,369 $125,451,879
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
SECURITY NATIONAL FINANCIAL CORPORATION
AND SUBSIDIARIES
Consolidated Balance Sheets (Continued)
March 31, 1998 December 31,
(Unaudited) 1997
-------------- ------------
<S> <C> <C>
Liabilities:
- -----------
Future life, annuity, and other
policy benefits $ 78,088,316 $ 77,890,080
Line of credit for financing
of mortgage loans 2,000,000 100,000
Bank loans payable 5,986,607 6,097,351
Notes and contracts payable 3,698,202 3,783,566
Estimated future costs of
pre-need sales 6,031,217 5,994,241
Payable to endowment care fund 99,915 121,370
Accounts payable 1,113,283 1,204,029
Other liabilities and
accrued expenses 1,803,375 1,632,897
Income taxes 3,368,491 3,233,415
----------- ----------
Total liabilities 102,189,406 100,056,949
Commitments and contingencies
Stockholders' Equity:
Common stock:
Class A: $2 par value, authorized
10,000,000 shares, issued
4,333,423 shares in 1998
and 4,326,588 shares in 1997 8,666,924 8,653,176
Class C: $0.20 par value,
authorized 7,500,000 shares,
issued 5,199,119 shares in
1998 and 5,200,811 shares
in 1997 1,039,746 1,040,162
Total common stock 9,706,670 9,693,338
Additional paid-in capital 9,146,786 9,133,454
Unrealized appreciation
of investments,
net of deferred taxes 920,399 830,939
Retained earnings 8,012,168 7,533,259
Treasury stock at cost
(659,993 Class A shares
and 56,217 Class C shares
in 1998 and 1997 held by
affiliated companies) (1,796,060) (1,796,060)
----------- ------------
Total stockholders' equity 25,989,963 25,394,930
------------ ------------
Total liabilities and
stockholders' equity $128,179,369 $125,451,879
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
SECURITY NATIONAL FINANCIAL CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Cash Flow
Three Months Ended March 31,
1998 1997
(Unaudited) (Unaudited)
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<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 478,910 $ 392,680
Adjustments to reconcile net earnings
to net cash (used in) provided by
operating activities:
Realized gains on investments and
other assets (36,047) (36,027)
Depreciation 220,079 184,914
Provision for losses on accounts
and loans receivable 30,440 --
Amortization of goodwill, premiums,
and discounts 44,163 (12,343)
Provision for income taxes 135,077 115,743
Policy acquisition costs deferred (257,287) (193,555)
Policy acquisition costs amortized 216,804 250,040
Cost of insurance acquired amortized 79,723 64,787
Change in assets and liabilities net of
effects from purchases and disposals of
subsidiaries:
Land and improvements held for sale (42,467) (12,434)
Future life and other benefits 516,945 521,370
Receivables for mortgage
loans sold (5,244,506) 4,091,482
Other operating assets and
liabilities (483,039) (145,711)
----------- ----------
Net cash (used in)
provided by
operating activities (4,341,206) 5,220,946
Cash flows from investing activities:
Securities held to maturity:
Purchase - fixed maturity
securities (524,563) --
Calls and maturities - fixed
maturity securities 1,299,923 1,024,503
Securities available for sale:
Sales - equity securities 92,402 --
Purchases of short-term
investments (1,158,545) (1,573,589)
Sales of short-term investments 2,200,000 --
Purchases of restricted assets (25,340) (83,514)
Mortgage, policy, and other
loans made (2,150,000) (263,248)
Payments received for mortgage,
policy, and other loans 1,282,791 1,864,740
Purchases of property, plant,
and equipment (382,022) (60,385)
Purchases of real estate (102,354) --
------------ -----------
Net cash provided by
investing activities 532,292 908,507
SECURITY NATIONAL FINANCIAL CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Cash Flow (Continued)
Three Months Ended March 31,
1998 1997
(Unaudited) (Unaudited)
----------- ----------
Cash flows from financing activities:
Annuity receipts 646,503 580,740
Annuity withdrawals (965,212) (966,217)
Repayment of bank loans and
notes and contracts payable (196,108) (320,012)
Net change in line of credit
for financing of mortgage loans 1,900,000 (1,211,890)
----------- -----------
Net cash provided by (used in)
financing activities 1,385,183 (1,917,379)
----------- -----------
Net change in cash (2,423,731) 4,212,074
Cash at beginning of period 3,408,179 3,301,084
----------- -----------
Cash at end of period $ 984,448 $7,513,158
=========== ===========
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
March 31, 1998
(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 three months ended March 31, 1998, are not
necessarily indicative of the results that may be expected for the
year ending December 31, 1998. For further information, refer to
the consolidated financial statements and footnotes thereto for the
year ended December 31, 1997, included in the Company's Annual
Report on Form 10-K (file number 0-9341).
2. Comprehensive Income
As of January 1, 1998, the Company adopted Statement 130, Reporting
Comprehensive Income. Statement 130 establishes new rules for the
reporting and display of comprehensive income and its components;
however, the adoption of this Statement had no impact on the
Company's net income or stockholders' equity. Statement 130
requires unrealized gains or losses on the Company's available-for-
sale securities, which prior to adoption were reported separately in
stockholders' equity, to be included in other comprehensive income.
During the first quarter of 1998 and 1997, total comprehensive
income amounted to $568,370 and $232,923, respectively.
3. Capital Stock
In accordance with SFAS 128, the basic and diluted earnings per
share amounts were calculated as follows:
<TABLE>
<CAPTION>
Three Months Ended March 31,
1998 1997
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<S> <C> <C>
Numerator:
Net income $ 478,910 $ 392,680
Denominator:
Denominator for
basic earnings per
share-- weighted-average
shares 4,185,555 3,970,486
Effect of
dilutive securities:
Employee stock
options -- 25,493
Stock appreciation
rights -- 7,518
---------- -----------
Dilutive potential
common shares -- 33,011
3. Capital Stock (Continued)
Denominator
for diluted
earnings per
share-adjusted
weighted-average
shares and assumed
conversions 4,185,555 4,003,497
========== ==========
Basic earnings
per share $0.11 $0.10
===== =====
Diluted earnings
per share $0.11 $0.10
===== =====
</TABLE>
There are no dilutive effects on net income for purpose of this
calculation.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
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.
Results of Operations
First Quarter 1998 Compared to First Quarter 1997
Total revenues increased by $388,000, or 5.2%, to $7,807,000 for the
three months ended March 31, 1998, from $7,419,000 for the three
months ended March 31, 1997. Contributing to this increase in total
revenues was an $85,000 increase in insurance premiums and other
considerations, a $71,000 increase in net investment income and a
$278,000 increase in mortgage fee income. These increases were
partially offset by a $61,000 decrease in net mortuary and cemetery
sales.
Insurance premiums and other considerations increased by $85,000, or
5.8%, to $1,558,000 for the three months ended March 31, 1998, from
$1,473,000 for the comparable period in 1997. This increase was
primarily due to an increase in policies in force from new business.
Net investment income increased by $71,000, or 4.0%, to $1,844,000
for the three months ended March 31, 1998, from $1,773,000 for the
comparable period in 1997. This increase was attributable to the
Company maintaining smaller short-term investment balances and
warehousing more mortgage loans during the first quarter of 1998 as
compared to the first quarter of 1997.
Net mortuary and cemetery sales decreased by $61,000, or 2.4%, to
$2,439,000 for the three months ended March 31, 1998, from
$2,500,000 for the comparable period in 1997. This decrease is
primarily related to an increase in sales returns and allowances on
pre-need sales. Pre-need and at-need sales before sales return and
allowances increased 1% and 5%, respectively, over the prior period.
<PAGE>
Mortgage fee income increased by $278,000, or 17.1%, to $1,904,000
for the three months ended March 31, 1998, from $1,626,000 for the
comparable period in 1997. This increase was primarily attributable
to more loan originations during the first quarter of 1998 from the
refinancing of residential loans brought about by lower interest
rates.
Total benefits and expenses were $7,193,000, or 92.1% of total
revenues for the three months ended March 31 1998, as compared to
$6,910,000, or 93.1% of total revenues for the three months ended
March 31, 1997.
Death benefits, surrenders and other policy benefits and increase in
future policy benefits increased by $27,000, or 1.8%, to $1,564,000
for the three months ended March 31, 1998, from $1,537,000 for the
comparable period in 1997. This increase was primarily the result of
reserve increases due to more policies in force during the first
quarter in 1998 as compared to the first quarter of 1997.
Amortization of deferred policy acquisition costs and cost of
insurance acquired decreased by $18,000, or 5.7%, to $297,000, for
the three months ended March 31, 1998, from $315,000 for the
comparable period in 1997. This decrease is in line with the
actuarial assumptions.
General and administrative expenses increased by $428,000, or 10.6%,
to $4,476,000 for the three months ended March 31, 1998, from
$4,048,000 for the comparable period in 1997. This increase in
general and administrative expenses primarily resulted from an
increase in commissions and other expenses due to more mortgage loan
originations having been made by the Company's mortgage subsidiary.
Interest expense decreased by $93,000, or 33.5%, to $185,000 for the
three months ended March 31, 1998, from $278,000 for the comparable
period in 1997. This decrease was primarily due to the reduction of
long-term debt.
Cost of goods and services sold of the mortuaries and cemeteries
decreased by $61,000, or 8.3%, to $671,000 for the three months
ended March 31, 1998, from $732,000 for the comparable period in
1997. This decrease was consistent with the decrease 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 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
<PAGE>
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, mortgage loans, 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 life insurance subsidiary
amounted to $48,938,000 at amortized cost as of March 31, 1998
compared to $49,697,000 at amortized cost as of December 31, 1997.
This represents 64% of the total insurance-related investments as of
March 31, 1998 and December 31, 1997. Generally, all bonds owned by
the life insurance subsidiary are rated by the National Association
of Insurance Commissioners. Under this rating system, there are six
categories used for rating bonds. At March 31, 1998, 4.12%
($2,018,000) and at December 31, 1997, 4.06% ($2,018,000) of the
Company's total investment in bonds were invested in bonds in rating
categories three through six, which are considered non-investment
grade.
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 March 31, 1998 and December 31, 1997, the life
subsidiary exceeded the regulatory criteria.
The Company's total capitalization of stockholders' equity and bank
debt and notes payable was $35,675,000 as of March 31, 1998 as
compared to $34,659,000 as of March 31, 1997. Stockholders' equity
as a percent of capitalization increased to 72.9% as of March 31,
1998 from 68.4% as of March 31, 1997 and as a percent of assets
increased to 20.3% from 19.2%, respectively.
Lapse rates measure the amount of insurance terminated during a
particular period. The Company's lapse rate for life insurance in
1997 was 11.7% as compared to a rate of 12.0% for 1996. The 1998
lapse rate is approximately the same as 1997.
At March 31, 1998, $12,052,000 of the Company's consolidated
stockholders' equity represents the statutory stockholders' equity
of the Company's life insurance subsidiary. The life insurance
subsidiary cannot pay a dividend to its parent company without the
approval of insurance regulatory authorities.
Acquisitions
- ------------
In February 1997, the Company purchased all of the outstanding
shares of common stock of Crystal Rose Funeral Home, Inc. for a
total consideration of $382,000, which included a note to the former
owner in the amount of $297,000.
On April 27, 1998, the Company entered into an Acquisition Agreement
(the "Agreement") with Consolidare Enterprises, Inc., a Florida
corporation, ("Consolidare"), and certain shareholders of
Consolidare for the purchase of all of the outstanding shares of
<PAGE>
common stock of Consolidare. Consolidare owns approximately 57.4%
of the outstanding shares of common stock of Southern Security Life
Insurance Company, a Florida corporation ("SSLIC"), and all of the
outstanding shares of stock of Insuradyne Corp., a Florida
corporation ("Insuradyne"). SSLIC is a Florida domiciled insurance
company with total assets of approximately $82.1 million. SSLIC is
currently licensed to transact business in 14 states. SSLIC's total
revenues for the year ended December 31, 1997 were $11,695,756.
SSLIC had a net income of $195,000 for fiscal 1997.
As consideration for the purchase of the shares of Consolidare, the
Company will pay to the holders of Consolidare common stock an
aggregate of $11,356,400 plus an amount equal to the current assets
of Consolidare as of the closing date. For purposes of the purchase
consideration, current assets of Consolidare are defined as cash and
cash equivalents (with interest earned through the closing date) and
accrued commission due to Insuradyne from SSLIC. To pay the
purchase consideration, the Company intends to obtain approximately
$6,500,000 from bank financing, with the balance of approximately
$4,856,400 to be obtained from funds currently held by the Company.
In addition to the purchase consideration, the Company is required
to cause SSLIC to pay, on the closing date, $1,050,000 to George
Pihakis, who is currently President and Chief Executive Officer of
SSLIC, as a lump sum settlement of the executive compensation
agreement between SSLIC and Mr. Pihakis.
The closing of the Agreement is contingent upon regulatory
approvals, including the approval of the Florida Department of
Insurance and the Utah Insurance Department, compliance or waiver of
compliance under the Hart-Scott-Hodino Antitrust Improvements Act of
1976, approval of the Agreement by the affirmative vote of a
majority of the Consolidare shareholders, with no Consolidare
shareholders exercising their rights as dissenting shareholders
under Section 607.1320 of the Florida statutes, as well as the
satisfactory performance of certain covenants and the accuracy of
the parties' respective representations and warranties at closing.
Following the closing of the Agreement, it is the intention of the
Company to merge a newly formed wholly-owned subsidiary of Security
National Life Insurance Company into Consolidare, with the result
that Security National Life Insurance Company will then own 57.4% of
the outstanding shares of common stock of SSLIC. The Company
further intends to continue to operate SSLIC as a Florida domiciled
insurance company.
Year 2000 Issues
- ----------------
The Company is aware of the issues associated with the programming
code in existing computer systems as the millennium ("Year 2000")
approaches. The Year 2000 problem is pervasive and complex as
virtually every computer operation will be affected in some way by
the rollover of the two digit year value to 00. The issue is whether
computer systems will properly recognize data sensitive information
when the year changes to 2000. Systems that do not properly
recognize such information could generate erroneous data or cause a
system to fail.
The Company's systems, which are presently in use, have been
purchased from third party vendors. The Company is in the process of
converting to the latest versions for these systems which are Year
2000 compliant ("Version 2000"). The Company plans to have the
Version 2000 installed and in use for its life insurance subsidiary
in the third quarter of 1998 and the Version 2000 installed and in
use for its cemetery and mortuary subsidiaries in the first quarter
of 1999. The mortgage subsidiary is currently using a Version 2000
system. The total cost for the Version 2000 systems is approximately
$50,000, of which $40,000 has been spent as of March 31, 1998.
<PAGE>
Once installed the Company believes that the Year 2000 problem will
not pose significiant operational problems for the Company. However,
if such conversions are not completed timely, the Year 2000 problem
may have a material impact on the operations of the Company. Also,
the Company is in the process of confirming with its major vendors
and suppliers to determine their compliance to the Year 2000.
<PAGE>
<TABLE>
<CAPTION>
Part II Other Information:
<S> <C>
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
NONE
Item 5. Other Information
NONE
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3. A. Articles of Restatement of Articles of Incorporation (8)
B. Bylaws (1)
4. A. Specimen Class A Stock Certificate (1)
B. Specimen Class C Stock Certificate (1)
C. Specimen Preferred Stock Certificate and Certificate of
Designation of Preferred Stock (1)
10. A. Restated and Amended Employee Stock Ownership Plan and
Trust Agreement (1)
B. Deferred Compensation Agreement with George R. Quist (2)
C. 1993 Stock Option Plan (3)
D. Promissory Note with Key Bank of Utah (4)
E. Loan and Security Agreement with Key Bank of Utah (4)
F. General Pledge Agreement with Key Bank of Utah (4)
G. Deferred Compensation Agreement with William C. Sargent (9)
H. Note Secured by Purchase Price Deed of Trust and Assignment
of Rents with the Carter Family Trust and the Leonard M.
Smith Family Trust (5)
I. Deed of Trust and Assignment of Rents with the Carter
Family Trust and the Leonard M. Smith Family Trust (5)
J. Promissory Note with Page and Patricia Greer (6)
K. Pledge Agreement with Page and Patricia Greer (6)
L. Stock Purchase Agreement with Civil Service Life Insurance
Company and Civil Service Employees Insurance Company (7)
M. Promissory Note with Civil Service Employees Insurance
Company (7)
N. Articles of Merger of Civil Service Employees Life
Insurance Company into Capital Investors Life Insurance
Company (7)
O. Agreement and Plan of Merger of Civil Service Employees
Life Insurance Company into Capital Investors Life
Insurance Company (7)
P. Employment Agreement with Scott M. Quist. (9)
(1) Incorporated by reference from Registration Statement on
Form S-1, as filed on June 29, 1987.
(2) Incorporated by reference from Annual Report on Form 10-K,
as filed on March 31, 1989.
(3) Incorporated by reference from Annual Report on Form 10-K,
as filed on March 31, 1994.
(4) Incorporated by reference from Report on Form 8-K, as filed
on February 24, 1995.
(5) Incorporated by reference from Annual Report on Form 10K,
as filed on March 31, 1995.
(6) Incorporated by reference from Report on Form 8-K, as filed
on May 1, 1995.
(7) Incorporated by reference from Report on Form 8-K, as filed
on January 16, 1996.
(8) Incorporated by reference from Annual Report on Form 10-K,
as filed on March 31, 1997.
(9) Incorporated by reference from Annual Report on Form 10-K,
as filed on March 31, 1998.
27. Financial Data Schedule
</TABLE>
(b) Reports on Form 8-K
The Company filed a report on Form 8-K with the Securities and
Exchange Commission on May 12, 1998. The report supplied
information under Item 2, thereof, captioned "Acquisition or
Disposition of Assets", relating to the acquisition of
Consolidare Enterprises, Inc.<PAGE>
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: May 15, 1998 By: George R. Quist,
Chairman of the Board,
President and Chief
Executive Officer
(Principal Executive
Officer)
DATED: May 15, 1998 By: Scott M. Quist
First Vice President,
General Counsel and
Treasurer (Principal
Financial and Accounting
Officer)
<TABLE> <S> <C>
<ARTICLE> 7
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1998
<DEBT-HELD-FOR-SALE> 47,024,952
<DEBT-CARRYING-VALUE> 49,025,464
<DEBT-MARKET-VALUE> 0
<EQUITIES> 4,861,816
<MORTGAGE> 9,151,866
<REAL-ESTATE> 7,580,197
<TOTAL-INVEST> 76,222,978
<CASH> 984,448
<RECOVER-REINSURE> 0
<DEFERRED-ACQUISITION> 4,474,324
<TOTAL-ASSETS> 128,179,369
<POLICY-LOSSES> 75,470,630
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 756,503
<POLICY-HOLDER-FUNDS> 1,861,183
<NOTES-PAYABLE> 11,684,809
0
0
<COMMON> 9,706,670
<OTHER-SE> 16,283,293
<TOTAL-LIABILITY-AND-EQUITY> 128,179,369
1,558,065
<INVESTMENT-INCOME> 1,844,154
<INVESTMENT-GAINS> 36,046
<OTHER-INCOME> 4,369,160
<BENEFITS> 1,564,227
<UNDERWRITING-AMORTIZATION> 296,527
<UNDERWRITING-OTHER> 0
<INCOME-PRETAX> 614,165
<INCOME-TAX> 135,255
<INCOME-CONTINUING> 478,910
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 478,910
<EPS-PRIMARY> .11
<EPS-DILUTED> .11
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
