<PAGE>

                          SECURITIES AND EXCHANGE COMMISSION

                                Washington, D.C. 20549

                                      Form 10-K

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
     THE SECURITIES EXCHANGE ACT OF 1934
  For the fiscal year ended December 31, 1997, or

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
     OF THE SECURITIES EXCHANGE ACT OF 1934
     For the Transition Period from       to

                             Commission File Number 0-9341

                       Security National Financial Corporation
                (Exact name of registrant as specified in its Charter)

           UTAH                                           87-0345941
(State or other jurisdiction                           (I.R.S. Employer
 of incorporation or organization)                      Identification
                                                           Number)

      5300 South 360 West, Suite 310                        84123
         Salt Lake City, Utah                             (Zip Code)
(Address of principal executive offices)

Registrant's telephone number,
including area code:                                   (801) 264-1060

Securities registered pursuant to Section 12(d) of the Act:

                                                  Name of each exchange
Title of each Class                                on which registered
      None                                                None

Securities registered pursuant to Section 12(g) of the Act:

                       Class A Common Stock, $2.00 Par Value
                                 (Title of Class)

                       Class C Common Stock, $0.20 Par Value
                                 (Title of Class)

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 [X]  No___

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained
herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ ]

The aggregate market value of the voting stock held by non-
affiliates of the registrant as of March 14, 1998 was
$13,774,729.

As of March 14, 1998, registrant had issued and outstanding
3,673,261 shares of Class A Common Stock and 5,144,594
shares of Class C Stock.

                  DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive Proxy Statement for the
registrant's 1998 Annual Meeting of Stockholders are
incorporated by reference into Part III hereof.

<PAGE>

                               PART I

Item 1.  Business

Security National Financial Corporation (the "Company")
operates in three main business segments:  life insurance,
cemetery and mortuary, and mortgage loans.  The life
insurance segment is engaged in the business of selling and
servicing selected lines of life insurance, annuity
products and accident and health insurance.  These products
are marketed in 29 states through a commissioned sales
force of independent licensed insurance agents who may also
sell insurance products of other companies.  The cemetery
and mortuary segment of the Company consists of five
cemeteries in the state of Utah and one in the state of
California and eight mortuaries in the state of Utah and
six in the state of Arizona.  The Company also engages in
pre-need selling of funeral, cemetery and cremation
services through its Utah operations.  Many of the
insurance agents also sell pre-need funeral, cemetery and
cremation services.  The mortgage loan segment is an
approved governmental and conventional lender that
originates and underwrites residential and commercial loans
for new construction and existing homes and real estate
projects.

The design and structure of the Company is that each
segment is related to the others and  contributes to the
profitability of the other segments of the Company. Because
of the increasing cemetery and mortuary operations in Utah
and Arizona, the Company enjoys a level of public awareness
that assists in the sales and marketing of insurance and
pre-need cemetery and funeral products.  Security National
Life Insurance Company ("Security National Life") invests
its assets (representing in part the pre-paid funerals) in
investments authorized by the Insurance Department of the
State of Utah. One such investment authorized by the Utah
Insurance Department is high quality mortgage loans. Thus,
while each segment is a profit center on a stand-alone
basis, this horizontal integration of each segment will
lead to improved profitability of the Company.  The Company
is also pursuing growth through acquisitions of both life
insurance companies and cemeteries and mortuaries.  The
Company's acquisition business plan is based on reducing
overhead cost of the acquired company by utilizing existing
personnel, management, and technology while still providing
quality service to the customers and policyholders.

The Company was organized as a holding company in 1979 when
Security National Life became a wholly owned subsidiary of
the Company and the former stockholders of Security
National Life became stockholders of the Company.  Security
National Life was formed in 1965 and has grown through the
direct sale of life insurance and annuities and through the
acquisition of other insurance companies, including the
acquisitions of Capital Investors Life Insurance Company in
December 1994 and Civil Service Employees Life Insurance
Company in December 1995.  Memorial Estates, Inc. and
Memorial Mortuary became direct subsidiaries of the Company
in the 1979 reorganization when the Company was formed.
These companies were acquired by Security National Life in
1973.  The cemetery and mortuary operations have also grown
through the acquisition of other cemetery and mortuary
companies, including the acquisitions of Paradise Chapel
Funeral Home, Inc. in 1989, Holladay

<PAGE>

Memorial Park, Inc., Cottonwood Mortuary, Inc. and Deseret
Memorial, Inc. in 1991, Sunset Funeral Home in January
1994, Greer-Wilson Funeral Home, Inc. in April 1995 and
Crystal Rose Funeral Home in February 1997.  In July 1993,
the Company formed Security National Mortgage Company
("Security National Mortgage") to originate and refinance
mortgage loans.  See Notes to Consolidated Financial
Statements for additional disclosure and discussion
regarding segments of the business.

Life Insurance

  Products

The Company, through its insurance subsidiary, Security
National Life, issues and distributes selected lines of
life insurance and annuities.  The Company's life insurance
business includes funeral plans and interest-sensitive
whole life insurance, as well as other traditional life and
accident and health insurance products but places specific
marketing emphasis on funeral plans.

A funeral plan is a small face value life insurance policy
that generally has a face coverage of up to $5,000.  The
Company believes that funeral plans represent a marketing
niche that has lower competition since most insurance
companies do not offer similar coverages.  The purpose of
the funeral plan policy is to pay the costs and expenses
incurred at the time of a person's death.  On a per
thousand dollar cost of insurance basis, these policies are
more expensive to the policyholder than many types of
non-burial insurance due to their low face amount,
requiring the fixed cost of the policy to be distributed
over a smaller policy size, and due to the simplified
underwriting practices resulting in higher mortality costs.

    Markets and Distribution

The Company is licensed to sell insurance in 29 states.
The Company, in marketing its life insurance products,
seeks to locate, develop and service specific "niche"
markets.  A "niche" market is an identifiable market which
the Company believes is not emphasized by most insurers.
The Company generally sells its life insurance products to
people of middle age who have a need for insurance to
protect the income of the wage earner of the family, to pay
off debts at the time of death and for other estate
planning purposes.  Funeral plan policies are sold
primarily to persons who range in age from 45 to 75.  Even
though people of all ages and income levels purchase
funeral plans, the Company believes that the highest
percentage of funeral plan purchasers are individuals who
are older than 45 and have low to moderate income.  A
majority of the Company's funeral plan premiums come from
the states of  Arizona, Colorado, Idaho, Nevada, Oklahoma,
Texas and Utah, and a majority of the Company's non-funeral
plan life insurance premiums come from the states of
California, New Mexico and Utah.

<PAGE>

The Company sells its life insurance products through
direct agents and brokers and independent licensed agents
who may also sell insurance products of other companies.
The commissions on life insurance products range from
approximately 10% to 90% of first year premiums.  In those
cases where the Company utilizes its direct agents in
selling such policies, those agents customarily receive
advances against future commissions.

In some instances, funeral plan insurance is marketed in
conjunction with the Company's cemetery and mortuary sales
force.  When it is marketed by that group, the beneficiary
is usually the Company.  Thus, death benefits that become
payable under the policy are paid to the Company's cemetery
and mortuary subsidiaries to the extent of services
performed and products purchased.

In marketing the funeral plan insurance, the Company also
seeks and obtains third-party endorsements from other
cemeteries and mortuaries within its marketing areas.
Typically, these cemeteries and mortuaries will provide
letters of endorsement and may share in mailing and other
lead-generating costs.  The incentive for such businesses
to share the costs is that these businesses are usually
made the beneficiary of the policy.  The following table
summarizes the life insurance business for the five years
ended December 31, 1997:

<TABLE>
<CAPTION>


                      1997          1996        1995        1994       1993
<S>                 <C>          <C>         <C>         <C>         <C>
Life
 Insurance
Policy/Cert.
      Count
      as of
      December 31    43,213       42,034      42,711      41,064     32,895
Insurance
      in force
      as of
      December 31
(omitted 000)      $648,906     $546,213    $530,688    $436,600   $310,395
Premiums
      Collected
(omitted 000)      $  5,732     $  5,765    $  5,819    $  5,175   $  5,201

</TABLE>

  Underwriting

Factors considered in evaluating an application for
insurance coverage include the applicant's age, occupation,
general health and medical history.  Upon receipt of a
satisfactory application, which contains pertinent medical
questions, the Company writes insurance that is based on
its medical limits and requirements on a basis satisfactory
to the reinsuring company (or companies, if submitted
facultatively), subject to the following general
non-medical limits:
<TABLE>
<CAPTION>

                                Age Nearest         Non-Medical
                                  Birthday            Limits
                                   <C>          <C>
                                    0-40             $75,000
                                   41-50             $75,000
                                   51-up        Exam Required

</TABLE>

When underwriting life insurance, the Company will
sometimes issue policies with higher premium rates for
substandard risks.

In addition to the Company's ordinary life product line,
the Company also sells final expense insurance.  This
insurance is a small face amount, with a maximum issue of
$10,000.  It is written on a simplified medical application
with underwriting requirements being a completed
application, a phone inspection on each applicant and a
Medical Information Bureau inquiry.  There are several
underwriting classes in which an applicant can be placed.
If the Company receives conflicting or incomplete
underwriting information, an attending physician's
statement can be ordered to insure the applicant is placed
in the correct underwriting class.

Annuities

   Products

The Company's annuity business includes single premium
deferred annuities, flexible premium deferred annuities and
immediate annuities.  A single premium deferred annuity is
a contract where the individual remits a sum of money to
the Company, which is retained on deposit until such time
as the individual may wish to purchase an immediate annuity
or surrender the contract for cash.  A flexible premium
deferred annuity gives the contract holder the right to
make premium payments of varying amounts or to make no
further premium payments after his initial payment.  These
single and flexible premium deferred annuities can have
initial surrender charges.  The surrender charges act as a
deterrent to individuals who may wish to surrender their
annuity contracts.  These types of annuities have
guaranteed interest rates of 4% to 4 1/2% per annum.  Above
that, the interest rate credited is determined by the Board
of Directors at their discretion.  An immediate annuity is
a contract in which the individual remits to the Company a
sum of money in return for the Company's obligation to pay
a series of payments on a periodic basis over a designated
period of time, such as an individual's life, or for such
other period as may be designated.

Holders of annuities enjoy a significant benefit under the
current federal income tax law in that interest accretions
that are credited to the annuities do not incur current
income tax expense on the part of the contract holder.
Instead, the interest income is tax deferred until such
time as it is paid out to the contract holder.  In order
for the Company to realize a profit on an annuity product,
the Company must maintain an interest rate spread between
its investment income and the interest rate credited to the
annuities.  From that spread must  be deducted commissions,
issuance expenses and general and administrative expenses.
The Company's annuities currently have credited interest
rates ranging from 4% to 6 1/2%.

   Markets and Distribution

The general market for all of the Company's annuities is
middle to older age individuals who wish to save or invest
their money in a tax deferred environment, having
relatively high yields.  The Company currently markets its

<PAGE>

annuities primarily in the states of Arizona, Colorado,
Idaho, New Mexico, Oklahoma, Texas and Utah.

The major source of annuity considerations comes from
direct agents. Annuities can be sold as a by-product of
other insurance sales.  This is particularly true in the
funeral planning area.  If an individual does not qualify
for a funeral plan due to health considerations, the agent
will often sell that individual an annuity to take care of
those final expenses.  The commission rates on annuities
range from 2% to 10%.

The following table summarizes the annuity business for the
five years ended December 31, 1997:
<TABLE>
<CAPTION>


                       1997       1996       1995       1994       1993
Annuities            -------     ------     ------     ------     ------
<S>                  <C>         <C>         <C>       <C>        <C>
Policy/Cert.
      Count as of
      December 31     7,434      7,049       6,893      5,954      4,605
Deposits Collected
(omitted 000)        $2,521     $2,859      $2,375     $1,927     $1,905
</TABLE>

Accident and Health

      Products

Prior to the acquisition of Capital Investors Life in
December 1994, the Company did not actively market accident
and health products.  With the acquisition of Capital
Investors Life, the Company acquired a block of accident
and health policies which pay limited benefits to
policyholders.  The Company is currently offering a low-
cost comprehensive diver's accident policy.  The policy
provides world-wide coverage for medical expense
reimbursement and life insurance in the event of diving or
water sports accidents.

      Markets and Distribution

The Company currently markets its diver's policy through
water sports magazine advertising and dive shops throughout
the world.  The Company pays direct commissions ranging
from 15% to 30% for new business generated.

The following table summarizes the accident and health
business for the five years ended December 31, 1997:
<TABLE>
<CAPTION>


                         1997      1996      1995      1994(1)      1993
                       --------   ------    ------     --------    ------
<S>                   <C>         <C>      <C>       <C>            <C>
Accident
  and Health
Policy/Cert.
      Count as of
      December 31      30,250     33,639    37,302     42,910        347
Premiums
      Collected
(omitted 000)         $   430   $    493   $   569    $    15       $ 18
</TABLE>



      (1)  Includes acquisition of Capital Investors Life
      Insurance Company on December 21, 1994.

<PAGE>

Reinsurance

The Company reinsures with other companies portions of the
individual life insurance and accident and health policies
it has underwritten.  The primary purpose of reinsurance is
to enable an insurance company to write a policy in an
amount larger than the risk it is willing to assume for
itself.  No other liabilities or guarantees by the Company
exist on business ceded through reinsurance treaties,
however, the Company remains obligated for amounts ceded in
the event the reinsurers do not meet their obligations.
There is no assurance that the reinsurer will be able to
meet the obligations assumed by it under the reinsurance
agreement.

The Company's policy is to retain no more than $50,000 of
ordinary insurance per insured life.  Excess risk is
reinsured.  The total amount of life insurance in force at
December 31, 1997, reinsured by other companies aggregated
$61,629,000, representing approximately 9.5% of the
Company's life insurance in force on that date.

The Company currently cedes and assumes certain risks with
various authorized unaffiliated reinsurers pursuant to
reinsurance treaties which are renewable annually.  The
premiums paid by the Company are based on a number of
factors, primarily including the age of the insured and the
risk ceded to the reinsurer.

Investments

The investments that support the Company's life insurance
and annuity obligations are determined by the Investment
Committee of the Board of Directors of the various
subsidiaries and ratified by the full Board of Directors of
the respective subsidiaries.  A significant portion of the
investments must meet statutory requirements governing the
nature and quality of permitted investments by insurance
companies. The Company's interest-sensitive type products,
primarily annuities and interest-sensitive whole life,
compete with other financial products such as bank
certificates of deposit, brokerage sponsored money market
funds as well as competing life insurance company products.
While it is not the Company's policy to offer the highest
yield in this climate, in order to offer what the Company
considers to be a competitive yield, it maintains a
diversified portfolio consisting of common stocks,
preferred stocks, municipal bonds, investment and
non-investment grade bonds including
high-yield issues, mortgage loans, real estate, short-term
and other securities and investments.

See "Management's Discussion and Analysis of Results of
Operations and Financial Condition" and Notes to
Consolidated Financial Statements for additional disclosure
and discussion regarding investments.

Cemetery and Mortuary

      Products

The Company has six wholly-owned cemeteries and fourteen
wholly-owned mortuaries.  The cemeteries are non-
denominational.  Through its cemetery and mortuary

<PAGE>

operations, the Company markets a variety of products and
services both on a pre-need basis (prior to death) and an
at-need basis (at the time of death).  The products include
grave spaces, interment vaults, mausoleum crypts and
niches, markers, caskets, flowers and other related
products.  The services include professional services of
funeral directors, opening and closing of graves, use of
chapels and viewing rooms, and use of automobiles and
clothing.  The Company has a funeral chapel at each of its
cemeteries other than Holladay Memorial Park and Singing
Hills Memorial Park and has ten separate stand-alone
mortuary facilities.  The Company's cemetery and mortuary
business increased with the acquisition of Holladay
Memorial Park, Inc., Cottonwood Mortuary, Inc. and Deseret
Memorial, Inc. in September 1991, the acquisition of Sunset
Funeral Home, Inc. in January 1994, and the acquisition of
Greer-Wilson Funeral Home, Inc. in April 1995, and the
acquisition of Crystal Rose Funeral Home in February 1997.

     Markets and Distribution

The Company's pre-need cemetery and mortuary sales are
marketed to persons of all ages but are generally purchased
by persons 45 years of age and older.  The Company also
markets its mortuary and cemetery products on an at-need
basis.  The Company is limited in its geographic
distribution of these products to areas lying within an
approximate 20 mile radius of its mortuaries and
cemeteries.  The Company's at-need sales are similarly
limited in geographic area.

The Company actively seeks to sell its cemetery and funeral
products to customers on a pre-need basis.  The Company
employs cemetery sales representatives on a commission
basis to sell these products.  Many of these pre-need
cemetery and mortuary sales representatives are also
licensed insurance salesmen and sell funeral plan
insurance.  In many instances, the Company's cemetery and
mortuary facilities are the named beneficiary of the
funeral plan policies.

The sales representatives of the Company's cemetery and
mortuary operations are commissioned and receive no salary.
The sales commissions range from 10% to 22% for cemetery
products and services and 10% to 90% of first year premiums
for funeral plan insurance.  Potential customers are
located via telephone sales prospecting, responses to
letters mailed by the sales representatives, newspaper
inserts, referrals, contacts made at funeral services, and
door to door canvassing.  The Company trains its sales
representatives and generates leads for them.  If a
customer comes to one of the Company's cemeteries on an
at-need basis, the sales representatives are compensated on
a commission basis.

<PAGE>

Mortgage Loans

   Products

The Company, through its mortgage subsidiary, Security
National Mortgage, originates and underwrites residential
and commercial loans for new construction and existing
homes and real estate projects primarily for the greater
Salt Lake City area.  The Company is an approved government
guaranteed and conventional lender and processes
government guaranteed and conventional loans.  Most of the
loans are sold directly to investors.  The Company has
available warehouse lines of credit with an affiliated
company and an unaffiliated financial institution to fund
mortgage loans prior to the purchase by investors.

     Markets and Distribution

The Company's mortgage lending services are marketed
primarily to individual homeowners and businesses who are
located in the area known as the "Wasatch Front," covering
approximately 100 miles between Salt Lake City and Ogden,
Utah, with the greatest concentration of sales being in the
greater Salt Lake City area.  The typical loan size for
residential loans ranges from $40,000 to $150,000, and for
commercial loans from $200,000 to $750,000.

The Company's mortgage loan originations are through part-
time and full time mortgage loan officers and wholesale
brokers who are paid a sales commission ranging between
 .40% to 3.0% of the loan amount.  Prospective customers are
located through contacts with builders, real estate agents,
and door-to-door canvassing.  The part-time brokers are
individuals who are supplementing their full time
employment by soliciting residential homeowners to
refinance their existing mortgage loans.  The Company
provides training to these brokers.

Recent Acquisitions and Other Business Activities

     Pinehill Business Park

In February 1993, the Company entered into a purchase and
sale agreement to acquire Pinehill Business Park.  The
business park is approximately 8.65 acres and located in
Murray, Utah.  The business park contains three office
buildings with a total of 47,000 square feet of office
space and seven office and warehouse combination buildings
with a total of 89,000 square feet of space.

     Security National Mortgage Company

In June 1993, the Company formed Security National Mortgage
Company to originate, refinance and service residential and
commercial mortgage loans.  The Company contributed assets
of approximately $268,000 to capitalize the initial
operations of Security National Mortgage.

<PAGE>

     Sunset Funeral Homes

In January 1994, the Company acquired all of the issued and
outstanding shares of common stock of Sunset Funeral Homes,
Inc. ("Sunset"), an Arizona corporation.  In connection
with this transaction, the Company also acquired certain
real estate and other assets related to the business of
Sunset from the sole stockholder of Sunset.  Sunset owns
and operates a funeral home in Phoenix, Arizona, known as
Camelback Sunset Funeral Home.

     Capital Investors Life Insurance Company

In December 1994, the Company completed the purchase of all
of the outstanding shares of common stock of Capital
Investors Life Insurance Company ("Capital Investors
Life"), a Florida based life insurance company  from
Suncoast Financial Corporation ("Suncoast Financial"), a
Delaware corporation and, prior to closing of the
transaction, the sole stockholder of Capital Investors
Life.

At the time of the transaction, Capital Investors Life was
a Florida domiciled insurance company with total assets of
approximately $30 million.  Capital Investors Life was
redomesticated to Utah on December 28, 1994.  At the time
of the acquisition, Capital Investors Life was licensed to
transact business in 23 states.  The Company continues to
operate Capital Investors Life as an insurance company,
which changed its name to Security National Life in March
1996.

     California Memorial Estates

In February 1995, California Memorial Estates, Inc., a duly
organized Utah corporation and wholly-owned subsidiary of
the Company, entered into a Purchase and Sale Agreement and
Escrow Instructions with the Carter Family Trust and the
Leonard M. Smith Family Trust to purchase approximately 100
acres of real property located in San Diego County,
California (the "Property").  The Company has developed the
property by designating approximately 35 acres for a
cemetery known as Singing Hills Memorial Park.  The Company
has obtained approval from the federal government and the
California Cemetery Board to operate a cemetery on the
Property.  The Company has completed development on six
acres and is currently selling cemetery lots on a pre-need
and at-need basis on the developed acreage.

     Greer-Wilson Funeral Home

In March 1995, the Company purchased 97,800 shares of
common stock of Greer-Wilson Funeral Home, Inc. ("Greer-
Wilson"), representing 97.8% of the total issued and
outstanding shares of common stock of Greer-Wilson after
the issuance of such shares.  The Company continues to
operate Greer-Wilson, which is located in Phoenix, Arizona,
as a funeral home and mortuary.

<PAGE>

     Evergreen Memorial Park

In November 1995, the Company entered into a purchase sale
agreement with Myers Mortuary for the sale of the Company's
65% interest in Evergreen Memorial Partnership and the
Company's 50% interest in Evergreen Management Corporation.
As consideration for the sale of these entities, Myers
Mortuary paid $746,123 in satisfaction of the indebtedness
that Evergreen Memorial Partnership owed to the Company.
Myers Mortuary has also agreed to pay $200,000 to the
Company in four equal annual installments of $50,000,
beginning as of October 31, 1996.  In addition, Myers
Mortuary will pay a $10.00 royalty to the Company for each
adult space sold in Evergreen Memorial Park over the next
ten years, beginning as of January 1, 1996.

     Security National Life Insurance Company

In December 1995, Security National Life Insurance Company
("Security National Life") was merged into Capital
Investors Life Insurance Company ("Capital Investors Life")
with Capital Investors Life as the surviving corporation.
As a result of the merger, Capital Investors Life has
licenses to transact business in 29 states.  In March 1996,
the Company changed the name of the surviving corporation
from Capital Investors Life to Security National Life.

     Civil Service Employees Life Insurance Company

In December 1995, the Company, through its wholly-owned
subsidiary, Capital Investors Life, completed the purchase
of all of the outstanding shares of Common Stock of Civil
Service Employees Life Insurance Company ("CSE Life"), a
California corporation, from Civil Service Employees
Insurance Company, and prior to the closing of the
transaction, the sole stockholder of CSE Life.  At the time
of the transaction, CSE Life was a California domiciled
insurance company with total assets of approximately $16.7
million.  At the time of the acquisition, CSE Life was
licensed to transact business in seven states, including
the state of California.

Following the completion of the purchase of CSE Life, the
Company merged CSE Life into Capital Investors Life.  The
Company continues to operate Capital Investors Life as the
surviving insurance company, which changed its name to
Security National Life in March 1996.

     Crystal Rose Funeral Home

In February 1997, the Company purchased all of the
outstanding shares of common stock of Crystal Rose Funeral
Home, Inc. ("Crystal Rose"), an Arizona corporation.  In
connection with this transaction, the Company also acquired
certain real estate and other assets related to the
business of Crystal Rose from the sole stockholder of
Crystal Rose.  The Company continues to operate Crystal
Rose, which is located in Tolleson, Arizona, as a funeral
home and mortuary.

<PAGE>

Regulation

The Company's insurance subsidiary, Security National Life,
is subject to comprehensive regulation in the jurisdictions
in which it does business under statutes and regulations
administered by state insurance commissioners.  Such
regulation relates to, among other things, prior approval
of the acquisition of a controlling interest in an
insurance company; standards of solvency which must be met
and maintained; licensing of insurers and their agents;
nature of and limitations on investments; deposits of
securities for the benefit of policyholders; approval of
policy forms and premium rates; periodic examinations of
the affairs of insurance companies; annual and other
reports required to be filed on the financial condition of
insurers or for other purposes; and requirements regarding
aggregate reserves for life policies and annuity contracts,
policy claims, unearned premiums, and other matters.  The
Company's insurance subsidiary is subject to this type of
regulation in any state in which they are licensed to do
business.  Such regulation could involve additional costs,
restrict operations or delay implementation of the
Company's business plans.

The Company is currently subject to regulation in Utah
under insurance holding company legislation, and other
states where applicable.  Intercorporate transfers of
assets and dividend payments from its insurance subsidiary
is subject to prior notice of approval from the State
Insurance Department, if they are deemed "extraordinary"
under these statutes.  The insurance subsidiary is
required, under state insurance laws, to file detailed
annual reports with the supervisory agencies in each of the
states in which it does business.  Their business and
accounts are also subject to examination by these agencies.

The Company's cemetery and mortuary subsidiaries are
subject to the Federal Trade Commission's comprehensive
funeral industry rules and are subject to state regulations
in the various states where such operations are domiciled.
The morticians must be licensed by the respective state in
which they provide their services.  Similarly, the
mortuaries are governed by state statutes and city
ordinances in both Utah and Arizona.  Reports are required
to be kept on file on a yearly basis which include
financial information concerning the number of spaces sold
and, where applicable, funds provided to the Endowment Care
Trust Fund.  Licenses are issued annually on the basis of
such reports.  The cemeteries maintain city or county
licenses where they conduct business.

The Company's mortgage loan subsidiary, Security National
Mortgage, is subject to the rules and regulations of the
U.S. Department of Housing and Urban Development.  These
regulations among other things specify the procedures for
the origination, the underwriting, the licensing of
wholesale brokers, quality review audits and the amounts
that can be charged to borrowers for all FHA and VA loans.
Each year the Company must have an audit by an independent
CPA firm to verify compliance under these regulations.  In
addition to the government regulations, the Company must
meet loan requirements of various investors who purchase
the loans before the loans can be sold to the investors.

<PAGE>

Income Taxes

The Company's insurance subsidiary, Security National Life,
is taxed under the Life Insurance Company Tax Act of 1984.
Pursuant thereto, life insurance companies are taxed at
standard corporate rates on life insurance company taxable
income.  Life insurance company taxable income is gross
income less general business deductions, reserves for
future policyholder benefits (with modifications), and a
small life insurance company deduction (up to 60% of life
insurance company taxable income).  The Company may be
subject to the corporate Alternative Minimum Tax (AMT).
The exposure to AMT is primarily a result of the small life
insurance company deduction.  Also, under the Tax Reform
Act of 1986, distributions in excess of stockholder's
surplus account or significant decrease in life reserves
will result in taxable income.

Security National Life may continue to receive the benefit
of the small life insurance company deduction.  In order to
qualify for the small company deduction, the combined
assets of the Company must be less than $500,000,000 and
the taxable income of the life insurance companies must be
less than $3,000,000.  To the extent that the net income
limitation is exceeded, then the small life insurance
company deduction is phased out over the next $12,000,000
of life insurance company taxable income.

Since 1990, Security National Life has  computed its life
insurance taxable income after establishing a provision
representing a portion of the costs of acquisition of such
life insurance business.  The effect of the provision is
that a certain percentage of the Company's premium income
is  characterized as deferred expenses and recognized over
a five to ten year period.

The Company's non-life insurance company subsidiaries are
taxed in general under the regular corporate tax
provisions.  For taxable years beginning January 1, 1987,
the Company may be subject to the Corporate Alternative
Minimum Tax and the proportionate disallowance rules for
installment sales under the Tax Reform Act of 1986.

Competition

The life insurance industry is highly competitive.  There
are approximately 2,000 legal reserve life insurance
companies in business in the United States.  These
insurance companies differentiate themselves through
marketing techniques, product features, price and customer
service.  The Company's insurance subsidiary competes with
a large number of insurance companies, many of which have
greater financial  resources, a longer business history,
and a more  diversified  line  of insurance coverage  than
the Company.  In addition, such companies generally have a
larger sales force.  Further, many of the companies with
which the Company competes are mutual companies which may
have a competitive advantage because all profits accrue to
policyholders.  Because the Company is small by industry
standards and lacks broad diversification of risk, it may

<PAGE>

be more vulnerable to losses than larger, better
established companies.  The Company believes that its
policies and rates for the markets it serves are generally
competitive.

The cemetery and mortuary industry is also highly
competitive.  In the Salt Lake and Phoenix areas in which
the Company competes, there are a number of cemeteries and
mortuaries which have longer business histories, more
established positions in the community and stronger
financial positions than the Company.  In addition, some of
the cemeteries with which the Company must compete for
sales are owned by municipalities and, as a result, can
offer lower prices than can the Company.  The Company bears
the cost of a pre-need sales program that is not incurred
by those competitors that do not have a pre-need sales
force.  The Company believes that its products and prices
are generally competitive with those in the industry.

The mortgage loan industry is highly competitive with
several mortgage companies and banks in the same geographic
area in which the Company is operating which have longer
business histories and more established positions in the
community.  The refinancing market is particularly
vulnerable to changes in interest rates.

Employees

As of December 31, 1997, the Company employed 155 full-time
and 31 part-time employees.

Item 2.  Properties

The following table sets forth the location of the
Company's office facilities and certain other information
relating to these properties.

<TABLE>
<CAPTION>
                                                          Approximate
                                            Owned            Square
     Location             Function          Leased           Footage
  <S>                   <C>                <C>               <C>
  5300 So. 360 West      Corporate
  Salt Lake City, UT     Headquarters      Owned(1)          33,000

  3636 No. 15th Ave.     District          Owned              3,000
  Phoenix, AZ            Sales Office

  1603 Thirteenth St.    District          Owned(2)           5,000
  Lubbock, TX            Sales Office
</TABLE>


  (1)        The Company leases an additional 6,449 square feet of
             the facility to unrelated third parties for
             approximately $84,000 per year, under leases which
             expire at various dates after 1997.

  (2)        The Company leases an additional 2,766 square feet of
             the facility to unrelated third parties for
             approximately $15,000 per year, under leases which
             expire at various dates after 1997.

The Company believes the office facilities it occupies are
in good operating condition, are adequate for current
operations and has no plan to build or acquire additional
office facilities.  The Company believes its office
facilities are adequate for handling business in the
foreseeable future.

<PAGE>


The following table summarizes the location and acreage of the six
Company owned cemeteries:
<TABLE>
<CAPTION>

                                                              Net Saleable
                                                                 Acreage

                                                                  Acres   Total
                                                                  Sold as  Avai
Name of                             Date    Developed Total  Cemetery     lable
 Cemetery             Location    Acquired  Acreage  Acreage Spaces     Acreage
                                             (1)      (1)        (2)       (1)
<S>               <C>             <C>       <C>      <C>      <C>        <C>
Memorial Estates, Inc.:

  Lakeview
    Cemetery(3)    1700 E.
                    Lakeview Dr.
                    Bountiful, UT      1973        6        40       6    34
  Mountain View
    Cemetery(3)    3115 E.
                    7800 So.
                    Salt Lake
                    City, UT           1973       26        54      15    39

  Redwood
    Cemetery(3)(5) 6500 So.
                    Redwood Rd.
                    West Jordan,
                    UT                 1973       40        78      33    45

Holladay Memorial
  Park(4)(5)       4800 So.
                    Memory Lane
                    Holladay, UT       1991        6        13       5     8

Lakehills
  Cemetery(4)      10055 So.
                    State
                    Sandy, UT          1991       12        42       6    36

Singing Hills
      Memorial
        Park(6)    2798 Dehesa
                    Rd.
                    El Cajon,
                    CA                 1995        6        35       1    34
</TABLE>

<PAGE>

     (1)          The acreage represents estimates of acres that are
                  based upon survey reports, title reports, appraisal
                  reports or the Company's inspection of the
                  cemeteries.
     (2)          Includes spaces sold for cash and installment
                  contract sales.
     (3)          As of December 31, 1997, there were mortgages of
                  approximately $170,000 collateralized by the
                  property and facilities at Memorial Estates
                  Lakeview, Mountain View and Redwood Cemeteries, of
                  which approximately $81,000 was held by Security
                  National Life.
     (4)          As of December 31, 1997, there were mortgages of
                  approximately $2,050,000 collateralized by the
                  property and facilities at Deseret Mortuary,
                  Cottonwood Mortuary, Holladay Memorial Park,
                  Lakehills Cemetery and Colonial Mortuary.
     (5)          These cemeteries include two granite mausoleums.
     (6)          As of December 31, 1997, there was a mortgage of
                  approximately $829,000 collateralized by the
                  property.

<PAGE>


The following table summarizes the location, square footage and the number of
viewing rooms and chapels of the fourteen Company owned mortuaries:

<TABLE>
<CAPTION>

 Name of                              Date      Viewing               Square
 Mortuary       Location            Acquired    Room(s)   Chapel(s)   Footage
<S>          <C>                    <C>          <C>       <C>        <C>
Memorial
 Mortuary    5850 South 900 East
             Salt Lake City, UT      1973         3         1         20,000

Memorial Estates, Inc.:

  Redwood
    Mortuary 6500 South Redwood Rd.
             West Jordan, UT         1973         2         1         10,000

  Mountain
   View
   Mortuary  3115 East 7800 South
             Salt Lake City, UT      1973         2         1         16,000

  Lakeview
    Mortuary 1700 East Lakeview Dr.  1973         0         1          5,500
             Bountiful, UT

Paradise
  Chapel
  Funeral
  Home       3934 East Indian
             School Road
             Phoenix, AZ             1989         2         1          9,800

Deseret Memorial, Inc.:

  Colonial
    Mortuary
     (2)     2128 South State St.
             Salt Lake City, UT      1991         1         1         14,500

  Deseret
    Mortuary
     (2)     36 East 700 South
             Salt Lake City, UT      1991         2         2         36,300

  Lakehills
    Mortuary 10055 South State St.
             Sandy, UT               1991         2         1         18,000

Cottonwood
  Mortuary
    (2)      4670 South Highland Dr.
             Salt Lake City, UT      1991         2         1         14,500

Camelback
  Sunset
  Funeral
  Home(1)    301 West Camelback Rd.
             Phoenix, AZ             1994         2         1         11,000
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

  Name of                         Date      Viewing               Square
 Mortuary      Location         Acquired    Room(s)   Chapel(s)   Footage
<S>          <C>                <C>         <C>       <C>         <C>
Greer-Wilson:

 Greer-Wilson
      Funeral
       Home   5921 West Thomas Road
              Phoenix, AZ         1995         2         2         25,000

 Tolleson
      Funeral
      Home   9386 West VanBuren
             Tolleson, AZ         1995         0         1          3,460

 Avondale
      Funeral
      Home   218 North Central
             Avondale, AZ         1995         1         1          1,850

Crystal Rose
      Funeral
      Home(3) 9155 W. VanBuren
              Tolleson, AZ        1997         0         1          9,000

</TABLE>

<PAGE>

     (1)          As of December 31, 1997, there were mortgages of
                  approximately $461,000 collateralized by the
                  property and facilities of Camelback Sunset Funeral
                  Home.
     (2)          As of December 31, 1997, there were mortgages of
                  approximately $2,050,000 collateralized by the
                  property and facilities at Deseret Mortuary,
                  Cottonwood Mortuary, Holladay Memorial Park,
                  Lakehills Cemetery and Colonial Mortuary.
     (3)          As of December 31, 1997, there was a mortgage
                  of approximately $130,000, collateralized by
                  the property and facilities of Crystal Rose
                  Funeral Home.

Item 3.  Legal Proceedings

The Company has been named as a party in connection with
pending litigation brought by Garry Eckard & Co., Inc.
("Eckard") in the Federal District Court for the Southern
District of Indiana.  The complaint was filed on October
14, 1996 and alleges breach of contract and civil
conversion pertaining to a finder's fee and seeks an
unspecified amount of damages plus costs and attorneys'
fees.  In a prior letter to the Company from Eckard, it
appears that the amount of the fee being sought is
$152,000.  The complaint, pursuant to the civil conversion
claim, seeks treble damages under Indiana's civil
conversion statute.

The complaint was initially filed in the Indiana Hamilton
County Superior Court, but was subsequently removed by the
Company to the Federal District Court for the Southern
District of Indiana.  The Company filed a motion to dismiss
for lack of personal jurisdiction and Eckard filed a motion
to amend its complaint and to add Security National Life
Insurance Company, a subsidiary of the Company, as a party
defendant.  On March 18, 1997, the Company's motion was
granted to dismiss the complaint against the Company for
lack of personal jurisdiction and Eckard's motion was
granted to amend the complaint by adding Security National
Life Insurance Company as a party defendant.  The Company's
motion to dismiss the complaint against the Company was
granted without prejudice, which allows the complaint to be
refiled in an appropriate jurisdiction.

Security National Life Insurance Company also filed a
motion to dismiss for lack of personal jurisdiction.  On
October 10, 1997, this motion to dismiss the complaint for
lack of personal jurisdiction was granted thereby also
dismissing the case against Security National Life
Insurance Company.  Thus, the case in Indiana was dismissed
without prejudice against both the Company and Security
National Life Insurance Company for lack of personal
jurisdiction.

On March 13, 1998, a letter was sent by Eckard's counsel
relative to a settlement proposal together with a draft
complaint against the Company and Security National Life
Insurance Company for filing in the United States District
Court for the District of Utah.  There appears to be no
material difference between the complaint prepared for
filing in Utah and the amended complaint which had been
filed in Indiana.  Assuming that settlement will not immed

<PAGE>

iately take place, and that the matter will be filed in
Utah, the Company believes there is no basis to the claims
in the draft complaint.  The Company intends to vigorously
defend against the action.

The Company has also been named as a party in the pending
litigation brought by John and Donna Mackay (the "Mackays")
in the Third Judicial Court, Salt Lake County, State of
Utah.  The complaint alleges that certain payments are due
to the Mackays pursuant to a contract which at the date of
filing was claimed to be in the amount of $25,000 plus
interest with arrearages purportedly continuing to increase
the principal claimed in the amount of approximately $600
per month.

The complaint brought by the Mackays also alleges certain
items of personal property were removed from their
location, sold or destroyed, which it is alleged had a
value of approximately $50,000, for which the Company is
allegedly liable, and that the Company also should deliver
to the Mackays 80 shares of Spring Creek Irrigation Company
common stock, which allegedly has "substantial value."  The
Mackays have also included a claim for breach of the
implied covenant of good faith and fair dealing with
alleged damages "to be determined by the trier of fact and
such punitive damages as the court determines."  Although
formal discovery is in process, a full evaluation has not
been made of the matter at this point.  Management has
directed that the action be defended as well as having
directed the filing of a counterclaim.

The Company and its subsidiaries, Security National Life
Insurance Company, Greer-Wilson Funeral Home, Inc., Crystal
Rose Funeral Home, and Sunset Funeral Homes, Inc., have
been named as parties in the pending litigation brought by
York Products, Inc. ("York Products") in the Superior Court
of the State of Arizona, Maricopa County.  The litigation
seeks collection of a total sum of $68,660 plus attorneys'
fees and interest.  The Company is presently disputing the
amounts that York Products claims to be due and owing, and
the court has ordered that the matter be submitted to
compulsory non-binding arbitration under the Arizona Rules
of Civil Procedure.

The Company is not a party to any other legal proceedings
outside the ordinary course of the Company's business or to
any other legal proceedings which, adversely determined,
would have a material adverse effect on the Company or its
business.

Item 4.  Submission of Matters to a Vote of Security
Holders

None

                     PART II

Item 5.  Market for the Registrant's Common Stock and
Related Security Holder Matters

The Company's Class A Common Stock trades on the Nasdaq
National Market under the symbol "SNFCA."  Prior to August
13, 1987, there was no active public market for the Class
A and Class C Common Stock.  During recent years there has

<PAGE>

been occasional trading of Class A and Class C Common Stock
by brokerage firms in the over-the-counter market.  The
following are the high and low sales prices for Class A
Common Stock as reported by Nasdaq:
<TABLE>
<CAPTION>

Period (Calendar Year)                                Price Range
                                                    --------------
                                                    High        Low
       1996                                        ------     -------
        <S>                                        <C>         <C>
        First Quarter . . . . . . . . . . . .  . . .5 1/4      4 3/8
        Second Quarter. . . . . . . . . . . .  . . .4 3/4      4 3/8
        Third Quarter . . . . . . . . . . . .  . . .4 7/8      4 3/8
        Fourth Quarter. . . . . . . . . . . .  . . .5 1/4      4 3/8

       1997
        First Quarter . . . . . . . . . . . . . .. . .  5      3 7/8
        Second Quarter. . . . . . . . . . . . .  . .    5      4 1/4
        Third Quarter . . . . . . . . . . . .      4 7/16          4
        Fourth Quarter. . . . . . . . . . . . . .. 4 9/16      4 1/16

      1998
       First Quarter . . . . . . . . . . .  . . . .4 1/6       3 3/4

</TABLE>

The Class C Common Stock is not actively traded, although
there are occasional transactions in such stock by
brokerage firms. (See Note 11 to the Consolidated Financial
Statements.)

The Company has never paid a cash dividend on its Class A
or Class C Common Stock.  The Company currently anticipates
that all of its earnings will be retained for use in the
operation and expansion of its business and does not intend
to pay any cash dividends on its Class A or Class C Common
Stock in the foreseeable future.  Any future determination
as to cash dividends will depend upon the earnings and
financial position of the Company and such other factors as
the Board of Directors may deem appropriate.  A 5% stock
dividend on Class A and Class C Common Stock was paid in
the years 1989 through 1997.

As of March 12, 1998, there were 4,947 record holders of
Class A Common Stock and 157 record holders of Class C
Common Stock.

<PAGE>

Item 6.  Selected Financial Data - The Company and Subsidiaries (Consolidated)

The following selected financial data for each of the five years in the period
ended December 31, 1997, are derived from the audited consolidated financial
statements.  The data as of December 31, 1997 and 1996, and for the three
years ended December 31, 1997, should be read in conjunction with the
consolidated financial statements, related notes and other financial
information included herein.

<TABLE>
<CAPTION>

Consolidated Statement of Earnings Data:

                                       Year Ended December 31,
                                     --------------------------
                              1997(4)                       1996
Revenue                      --------                      ------
-------
<S>                        <C>                          <C>
Premiums                   $ 6,141,000                  $ 5,666,000
Net investment income        7,140,000                    7,517,000
Net mortuary and
  cemetery income            9,231,000                    8,138,000
Realized gains on
  investments                  253,000                      290,000
Provision for losses
  on investments                 --                           --
Mortgage fee income          5,662,000                    8,237,000
Other                           48,000                       75,000
                           -----------                  -----------
Total revenue              $28,475,000                  $29,923,000
                           -----------                  -----------

Expenses
---------
Policyholder benefits        6,669,000                  $ 6,341,000
Amortization of deferred
  policy acquisition costs   1,132,000                    1,240,000
General and admini-
  strative expenses         15,361,000                   17,292,000
Interest expense               948,000                    1,318,000
Cost of goods & services
  of the mortuaries
  & cemeteries               2,696,000                    2,355,000
                           -----------                  -----------
Total benefits &
  expenses                 $26,806,000                  $28,546,000
                           -----------                  -----------
Income before
  income tax expense         1,669,000                    1,377,000
Income tax expense            (360,000)                    (139,000)
Minority interest in
  loss of subsidiary            --                            --
                           -----------                  -----------
Net earnings               $ 1,309,000                  $ 1,237,000
                           ===========                  ===========
Net earnings per
   common share (5)              $0.33                        $0.33
                                 =====                        =====
Weighted average out-
   standing common shares    3,988,000                    3,750,000
Net earnings per common
   share-assuming dilution (5)   $0.32                        $0.32
                                 =====                        =====
Weighted average out-
   standing common shares-
   assuming dilution         4,093,000                    3,856,000

</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                                    Year Ended December 31,

                      1995(3)                 1994(2)            1993(1)
Revenue              --------                --------           --------
--------
<S>               <C>                      <C>                <C>
Premiums          $ 5,796,000              $ 4,945,000        $ 4,933,000
Net investment
  income            6,680,000                4,121,000          3,473,000
Net mortuary and
  cemetery income   8,238,000                5,888,000          6,085,000
Realized gains on
  investments         333,000                  384,000            780,000
Provision for losses
  on investments        --                       --               (28,000)
Mortgage fee income 4,943,000                1,170,000            788,000
Other                  71,000                  153,000            465,000
                  -----------              -----------        -----------
Total revenue     $26,061,000              $16,661,000        $16,496,000
                  -----------              -----------        -----------

Expenses
--------
Policyholder
  benefits        $ 6,111,000              $ 4,036,000        $ 4,420,000
Amortization of
  deferred policy
  acquisition costs 1,150,000                  767,000            943,000
General and admini-
  strative
  expenses         13,019,000                8,064,000          7,098,000
Interest expense    1,208,000                  692,000            675,000
Cost of goods & services
  of the mortuaries
  & cemeteries      2,314,000                1,767,000          1,890,000
                  -----------              -----------        -----------
Total benefits &
  expenses        $23,801,000              $15,326,000        $15,026,000
                  -----------              -----------        ------------
Income before
  income tax
  expense           2,259,000                1,335,000          1,470,000
Income tax expense   (728,000)                (302,000)          (388,000)
Minority interest in
  loss of subsidiary   20,000                    7,000              2,000
                  -----------             ------------        -----------
Net earnings      $ 1,551,000             $  1,040,000        $ 1,084,000
                  ===========             ============        ===========

Net earnings per
   common share (5)     $0.44                    $0.31              $0.35
                        =====                    =====              =====
Weighted average out-
   standing
   common shares    3,508,000                3,350,000          3,131,000
Net earnings per
   common share-
   assuming dilution
    (5)                 $0.43                    $0.30              $0.34
                        =====                    =====              =====
Weighted average out-
   standing common shares-
   assuming
   dilution         3,576,000                3,418,000          3,195,000
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

Balance Sheet Data:

                                        December 31,
                               1997(4)               1996
                              --------              ------
Assets
------
<S>                         <C>                <C>
Investments and
  restricted assets         $ 81,039,000        $ 78,638,000
Cash                           3,408,000           3,301,000
Receivables                   15,224,000          17,070,000
Other assets                  25,781,000          25,701,000
                            ------------        ------------
Total assets                $125,452,000        $124,710,000
                            ============        ============

Liabilities
-----------
Policyholder
  benefits                  $ 77,890,000        $ 76,962,000
Notes & contracts
  payable                      9,981,000          12,490,000
Cemetery & mortuary
  liabilities                  6,116,000           5,946,000
Other liabilities              6,070,000           5,844,000
                            ------------        ------------
Total liabilities            100,057,000         101,242,000
                            ------------        ------------
Stockholders' equity          25,395,000          23,468,000
                            ------------        ------------
Total liabilities and
  stockholders' equity      $125,452,000        $124,710,000
                            ============        ============
</TABLE>

      (1) Only includes Security National Mortgage Company for the five months
          ended December 31, 1993.

      (2) Reflects the acquisition of Capital Investors Life as of December 31,
          1994, and Camelback Sunset Funeral Home as of January 1, 1994.

      (3) Only includes Evergreen Memorial Park for the first eleven months of
          1995 and the assets and liabilities of Civil Service Employees Life
          Insurance Company as of December 31, 1995.

      (4) Reflects the acquisition of Crystal Rose Funeral Home as of February
          1997.

      (5) The earnings per share amounts prior to 1997 have been restated as
          required to comply with Statement of Financial Accounting Standards
          No. 128, Earnings Per Share.  For further discussion of earnings per
          share and the impact of Statement No. 128, see the notes to the
          audited consolidated financial statements.

<PAGE>

Balance Sheet Data:

                                                December 31,
                              1995(3)             1994(2)           1993(1)
<TABLE>
<CAPTION>

Assets
------
<S>                       <C>                  <C>               <C>
Investments and
  restricted assets       $ 80,815,000         $ 74,835,000      $47,692,000
Cash                         7,710,000            2,061,000        6,831,000
Receivables                 24,177,000            4,638,000        4,084,000
Other assets                25,511,000           22,224,000       17,314,000
                          ------------         ------------      -----------
Total assets              $138,213,000         $103,758,000      $75,921,000
                          ============         ============      ===========

Liabilities
-----------
Policyholder
  benefits                $ 76,868,000         $ 61,896,000      $38,605,000
Notes & contracts
  payable                   27,129,000           10,210,000        8,095,000
Cemetery & mortuary
  liabilities                6,078,000            6,603,000        6,511,000
Other liabilities            6,219,000            5,070,000        3,876,000
                          ------------         ------------      -----------
Total liabilities          116,294,000           83,779,000       57,087,000
                          ------------         ------------      -----------
Stockholders' equity        21,919,000           19,979,000       18,834,000
                          ------------         ------------      -----------
Total liabilities and
  stockholders' equity    $138,213,000         $103,758,000      $75,921,000
                          ============         ============      ===========
</TABLE>

Item 7.  Management's Discussion and Analysis of Financial
Condition and Results of Operations

Overview

The Company's operations over the last three 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

1997 Compared to 1996

Total revenues decreased by $1,448,000, or 4.8%, from
$29,923,000 for fiscal year 1996 to $28,475,000 for fiscal
year 1997.  Insurance premiums and other considerations
increased $475,000 and net mortuary and cemetery sales
increased $1,093,000.  These increases were offset by
decreases in net investment income of $377,000 and mortgage
fee income of $2,575,000.  Realized gains on investments
and other assets were slightly less than the previous year.

Insurance premiums and other considerations increased by
$474,000, from $5,666,000 in 1996 to $6,141,000 in 1997.
This increase was primarily attributed to an increase in
new business from marketing the Company's funeral plans.

Net investment income decreased by $377,000, from
$7,517,000 in 1996 to $7,140,000 in 1997.  This decrease
was primarily the result of the reinvestment of the
Company's bond and mortgage portfolio in 1997 into lower
investment yields due to the decrease in long term rates in
the financial markets.

Net mortuary and cemetery sales increased by $1,093,000,
from $8,138,000 in 1996 to $9,231,000 in 1997.  Of this
increase in sales, $750,000 was the result of the
acquisition of Crystal Rose Funeral Home.  The balance of
the increase in sales was due to the generation of
additional sales of funeral services and cemetery products
from existing facilities.

Mortgage fee income decreased by $2,575,000, from
$8,237,000 in 1996 to $5,662,000 in 1997.  This decrease
was primarily due to fewer loan originations because there
were fewer new home sales in 1997 in the Company's primary
market, the intermountain region, compared to 1996 and the
Company experienced increased competition from other
mortgage companies and banks.

Total benefits and expenses were $26,806,000 for 1997,
which constituted 94% of the Company's total revenues, as
compared to $28,546,000, or 95% of the Company's total
revenues for 1996.

<PAGE>

During 1997, there was a net increase of $328,000 in death
benefits, surrender and other policy benefits, and increase
in future policy benefits from $6,341,000 in 1996 to
$6,669,000 in 1997.  This increase was primarily due to
additional interest credited on annuities and reserve
increases on traditional products.  This increase was
reasonable based on the underlying actuarial assumptions.

Amortization of deferred policy acquisition costs and cost
of insurance acquired decreased by $108,000, from
$1,240,000 in 1996 to $1,132,000 in 1997.  This decrease
was reasonable based on the underlying actuarial
assumptions.

General and administrative expenses decreased by
$1,931,000, from $17,292,000 in 1996 to $15,361,000 in
1997.  This was primarily due to a decrease in commissions
and other expenses.  Commission expenses decreased by
$1,117,000, from $6,000,000 in 1996 to $4,883,000 in 1997.
Other expenses decreased $876,000, from $6,548,000 in 1996
to $5,672,000 in 1997.  These decreases were primarily the
result of fewer loan originations by the Company's mortgage
subsidiary.  Salaries increased by $61,000, from $4,745,000
in 1996 to $4,806,000 in 1997.  However, the Company's full
time employee count decreased by 10 from 165 employees in
1996 to 155 in 1997.

Interest expense decreased by $370,000, from $1,318,000 in
1996 to $948,000 in 1997.  This decrease is primarily due
to fewer loan originations from the Company's mortgage
subsidiary and the payoff of bank debt in 1997.

Cost of the mortuary and cemetery goods and services sold
was consistent with the products sold during 1997 and 1996.

1996 Compared to 1995

Total revenues increased by $3,862,000, or 15%, from
$26,061,000 for fiscal 1995 to $29,923,000 for fiscal 1996.
Contributing to this increase in total revenues was an
$837,000 increase in net investment income and a $3,294,000
increase in mortgage fee income.

Net investment income increased by $837,000, from
$6,680,000 in 1995 to $7,517,000 in 1996.  This increase
was primarily attributed to the acquisition of CSE Life and
the increased amount of funds invested in higher yielding
mortgage loans originated by Security National Mortgage.

Realized gains on investments and other assets decreased by
$43,000, from a gain of $333,000 in 1995 to a gain of
$290,000 in 1996.  In 1995, an agreement was entered into
in which the Company's remaining interest in Evergreen
Memorial Park was sold to an Ogden based mortuary.  The net
gain on the sale of Evergreen Memorial Park was
approximately $206,000.

Net mortuary and cemetery sales decreased by $100,000, from
$8,238,000 in 1995 to $8,138,000 in 1996.  This decrease
was the result of a $195,000 reduction in pre-need cemetery
sales.
<PAGE>
Mortgage fee income increased by $3,294,000, from
$4,943,000 in 1995 to $8,237,000 in 1996.  This increase
was due to an increase in the aggregate amount of loans
made by Security National Mortgage in 1996 from increased
lending activities.  Also in 1996, Security National
Mortgage began offering home equity loans and non
conforming loan products.

Total benefits and expenses were $28,546,000 for 1996,
which constituted 95% of the Company's total revenues, as
compared to $23,801,000, or 91% of the Company's total
revenues for 1995.

During 1996, there was a net increase of $228,000 in death
benefits, surrender and other policy benefits, and increase
in future policy benefits from $6,112,000 in 1995 to
$6,340,000 in 1996.  This increase was primarily due to
additional interest credited on annuities and reserve
increases on traditional products.  This increase is
reasonable based on the underlying actuarial assumptions.

Amortization of deferred policy acquisition costs and cost
of insurance acquired increased by $90,000, from $1,150,000
in 1995 to $1,240,000 in 1996.  This increase was primarily
due to a reduction in the number of policies in force
during 1996 and the associated deferred policy acquisition
costs of these policies being amortized in 1996.

General and administrative expenses increased by
$4,274,000, from $13,018,000 in 1995 to $17,292,000 in
1996.  This increase was primarily due to an increase in
commissions, salaries, and other expenses.  Commissions
increased by $2,208,000, or 55%, from $3,792,000 in 1995 to
$6,000,000 in 1996.  This increase was due to an increased
number of loans originated and processed by Security
National Mortgage.  Salaries increased by $1,133,000, from
$3,612,000 in 1995 to $4,745,000 in 1996.  The salaries of
Security National Life increased by $103,000 primarily due
to staff required to complete the conversion of Security
National Life's computer software.  The salaries of
Security National Mortgage increased by $383,000, due to
the additional staff required to process the increased
number of loans originated during 1996.  The cemeteries and
mortuaries salaries increased by $247,000, which was
primarily due to the addition of Greer-Wilson Funeral Home,
Inc. ("Greer-Wilson"), which operated a full twelve months
in 1996 as opposed to operating only nine months in 1995
and the opening in 1996 of Singing Hills Memorial Park in
San Diego, California.  Other expenses have increased due
primarily to the increased lending activities in the
mortgage company.

Interest expense increased by $110,000, from $1,208,000 in
1995 to $1,318,000 in 1996.  This increase was primarily
due to the debt resulting from the acquisition of CSE Life
and the acquisition of Greer-Wilson which was incurred for
a full twelve months in 1996 opposed to nine months in
1995.  Also in 1996, Security National Mortgage increased
the number of loans funded through the use of the revolving
line of credit.

Cost of the mortuary and cemetery goods and services sold
was consistent with the products sold during 1996.

<PAGE>

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 $49,697,000, at amortized cost as of
December 31, 1997 compared to $47,906,000 at amortized cost
as of December 31, 1996.  This represents 64% 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
December 31, 1997, 4.06% ($2,018,000) and at December 31,
1996, 4.18% ($1,994,000) of the Company's total invested
assets 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 higher-yielding longer term
securities.
<PAGE>
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, 1997 and 1996, the life subsidiary exceeded
the regulatory criteria.

The Company's total capitalization of stockholders' equity
and bank debt and notes payable was $35,276,000 and
$34,746,000 as of December 31, 1997 and 1996, respectively.
Stockholders' equity as a percent of total capitalization
was 72% and 67% as of December 31, 1997 and 1996,
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% in 1996.

In February 1995, the Company purchased approximately 100
acres of real property (the "Property") located in San
Diego, California, approximately 35 acres of which is being
used for a cemetery.  The purchase price of the property
was $1,062,000, $100,000 of which was paid in cash and the
balance of $962,000, together with interest thereon at the
rate of 9% percent per annum, to  be paid in 12 monthly
payments of $5,000, thereafter in equal monthly payments of
$10,000.  However, interest did not accrue on any part of
the principal balance until February 3, 1996.  A principal
payment of $100,000 was made in December 1995.  The Company
has obtained approval from the federal government and the
California Cemetery Board to operate a cemetery on the
property.  The Company has completed development on six
acres and is currently selling cemetery lots on a pre-need
and at-need basis on the developed acreage.

In March 1995, the Company purchased 97,800 shares of
common stock of Greer-Wilson Funeral Home, Inc.,
representing 97.8% of the total issued and outstanding
shares of common stock of Greer-Wilson for a total
consideration of $1,218,000, which included a note to the
former owners in the amount of $588,000.

In November 1995, the Company entered into a purchase sale
agreement with Myers Mortuary for the sale of the Company's
65% interest in Evergreen Memorial Partnership and the
Company's 50% interest in Evergreen Management Corporation.
As consideration for the sale of these entities, Myers
Mortuary paid $746,123 in satisfaction of the indebtedness
that Evergreen Memorial Partnership owed to the Company.
Myers Mortuary also agreed to pay $200,000 to the Company
in four equal annual installments of $50,000, beginning as
of October 31, 1996.  In addition, Myers Mortuary will pay
a $10.00 royalty to the Company for each adult space sold
in Evergreen Memorial Park over the next ten years,
beginning as of January 1, 1996.

In December 1995, the Company purchased all of the
outstanding shares of common stock of Civil Service
Employees Life Insurance Company ("CSE Life") from Civil
Service Employees Insurance Company for a total cost of
$5,200,000, which included a promissory note in the amount

<PAGE>

of $1,063,000.  Interest on the promissory note accrues at
7% per annum.  Principal payments are to be made in seven
equal annual installments of $151,857, beginning on
December 29, 1996.  Accrued interest will be payable
annually beginning on December 29, 1996.

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.

At December 31, 1997, $11,790,000 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.

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 date 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 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 14, 1998.

Once installed the Company believes that the Year 2000
problem will not pose significant 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 compliance to the
Year 2000.

<PAGE>

Item 8.  Financial Statements and Supplementary Data

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTAL
SCHEDULES


                                                                Page No.
                                                                --------
Financial Statements:
      Report of Independent Auditors . . . . . . . .. . . . . . . .30

      Consolidated Balance Sheets, December 31,
      1997 and 1996. . . . . . . . . . . . . . . . . . . . . .  . .31

      Consolidated Statements of Earnings,
      Years Ended December 31, 1997, 1996,
      and 1995 . . . . . . . . . . . . .  . . . . . . . . . . . . .33

      Consolidated Statements of Stockholders'
      Equity, Years Ended December 31, 1997, 1996
      and 1995.  . . . . . . . . . . . . . . . . . . . . . . . . . 34

      Consolidated Statements of Cash Flow,
      Years Ended December 31, 1997, 1996 and
      1995         . . . . . . . . . . . . . . . . . . . . . . . . 35

      Notes to Consolidated Financial
      Statements . . . . . . . . . . . . . . . . . . . . . .. . . .37


Financial Statement Schedules:

  I.     Summary of Investments -- Other than
         Investments in Related Parties. . . . . . . . . . . .  . .70

 II.     Condensed Financial Information of
         Registrant. . . . . . . . . . . . . . . . . . . . . .  . .71

 IV.     Reinsurance . . . . . . . . . . . . . . . . . . . . . .  .77

  V.     Valuation and Qualifying Accounts . . . . . . . . . . . . 78

All other schedules to the consolidated financial
statements required by Article 7 of Regulation S-X are not
required under the related instructions or are inapplicable
and therefore have been omitted.

<PAGE>

                          REPORT OF INDEPENDENT AUDITORS


Board of Directors
Security National Financial Corporation

We have audited the accompanying consolidated balance
sheets of Security National Financial Corporation and
subsidiaries as of December 31, 1997, and 1996, and the
related consolidated statements of earnings, stockholders'
equity, and cash flow for each of the three years in the
period ended December 31, 1997.  Our audits also include
the financial statement schedules listed in the Index at
Item 8.  These financial statements and schedules are the
responsibility of the Company's management.  Our
responsibility is to express an opinion on these financial
statements and schedules based on our audits.

We conducted our audits in accordance with generally
accepted auditing standards.  Those standards require that
we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free
of material misstatement.  An audit includes examining, on
a test basis, evidence supporting the amounts and
disclosures in the financial statements.  An audit also
includes assessing the accounting principles used and
significant estimates made by management, as well as
evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for
our opinion.

In our opinion, the consolidated financial statements
referred to above present fairly, in all material respects,
the consolidated financial position of Security National
Financial Corporation and subsidiaries at December 31, 1997
and 1996, and the consolidated results of their operations
and their cash flows for each of the three years in the
period ended December 31, 1997, in conformity with
generally accepted accounting principles.  Also, in our
opinion, the related financial statement schedules, when
considered in relation to the basic financial statements
taken as a whole, present fairly, in all material respects,
the information set forth therein.





ERNST & YOUNG LLP

Salt Lake City, Utah
March 14, 1998

<PAGE>
<TABLE>
<CAPTION>

                              SECURITY NATIONAL FINANCIAL CORPORATION
                                          AND SUBSIDIARIES

                                  Consolidated Balance Sheets

                                                      December 31,
Assets:                                      1997                       1996
------                                      ------                     -----
<S>                                     <C>                      <C>
Insurance-related investments:
Fixed maturity securities
  held to maturity, at amortized
  cost (market $51,177,199 and
  $47,594,559 for 1997 and 1996)        $ 49,784,898             $ 47,934,684
Equity securities available for sale,
  at market (cost $3,870,078 and
  $3,873,190 for 1997 and 1996)            4,831,813                4,133,105
Mortgage loans on real estate              8,307,237                9,809,379
Real estate, net of accumulated
   depreciation of $2,049,346
   and $1,868,187 for 1997 and 1996        7,559,725                7,808,255
Policy loans                               2,882,711                3,021,155
Other loans                                   84,147                  218,437
Short-term investments                     3,698,941                2,258,283
                                        ------------             ------------
  Total insurance-related investments     77,149,472               75,183,298
Restricted assets of cemeteries
  and mortuaries                           3,889,785                3,454,622
Cash                                       3,408,179                3,301,084
Receivables:
   Trade contracts                         4,323,011                4,514,010
 Mortgage loans sold to investors         11,398,432               13,455,123
   Receivable from agents                    816,657                  670,439
   Other                                     364,782                  292,680
                                        ------------             ------------
        Total receivables                 16,902,882               18,932,252
   Allowance for doubtful accounts        (1,679,090)              (1,862,599)
                                        ------------             ------------
   Net receivables                        15,223,792               17,069,653
Land and improvements held for sale        8,466,886                8,456,302
Accrued investment income                  1,001,998                1,040,242
Deferred policy acquisition costs          4,433,841                4,277,560
Property, plant and equipment, net         6,641,562                6,513,980
Cost of insurance acquired                 3,370,018                3,748,654
Excess of cost over net assets
   of acquired subsidiaries                1,554,505                1,370,708
Other                                        311,841                  293,400
                                        ------------             ------------
        Total assets                    $125,451,879             $124,709,503
                                        ============             ============
</TABLE>

See accompanying notes to consolidated financial statements.

<PAGE>
<TABLE>
<CAPTION>

                       SECURITY NATIONAL FINANCIAL CORPORATION
                                  AND SUBSIDIARIES
                       Consolidated Balance Sheets (Continued)

                                                  December 31,
                                          1997                   1996
                                         ------                  -----
Liabilities:
------------
<S>                                  <C>                     <C>
Future life, annuity, and other
   policy benefits                   $ 77,890,080            $ 76,962,062
Line of credit for financing
   of mortgage loans                      100,000               1,211,890
Bank loans payable                      6,097,351               6,768,119
Notes and contracts payable             3,783,566               4,509,921
Estimated future costs of
   pre-need sales                       5,994,241               5,874,387
Payable to endowment care fund            121,370                  70,617
Accounts payable                        1,204,029               1,199,920
Other liabilities and
  accrued expenses                      1,632,897               1,902,046
Income taxes                            3,233,415               2,742,513
                                    -------------             -----------
   Total liabilities                  100,056,949             101,241,475

Commitments and contingencies

Stockholders' Equity:
--------------------
Common stock:
  Class A: $2 par value, authorized
    10,000,000 shares, issued
    4,326,588 shares in 1997 and
    4,110,709 shares in 1996            8,653,176               8,221,418
  Class C: $0.20 par value, authorized
    7,500,000 shares, issued 5,200,811
    shares in 1997 and 4,967,072 shares
    in 1996                             1,040,162                 993,413
                                     ------------             -----------
Total common stock                      9,693,338               9,214,831
Additional paid-in capital              9,133,454               8,675,386
Unrealized appreciation of investments,
   net of deferred taxes of $130,796
   and $-0- for 1997 and 1996             830,939                 259,915
Retained earnings                       7,533,259               7,118,528
Treasury stock at cost (659,992 Class
   A shares and 56,217 Class C shares
   in 1997; 631,576 Class A shares and
   53,540 Class C shares in 1996, held
   by affiliated companies)            (1,796,060)             (1,800,632)
                                     ------------            ------------
Total stockholders' equity             25,394,930              23,468,028
                                     ------------            ------------
   Total liabilities and
     stockholders' equity            $125,451,879            $124,709,503
                                     ============            ============
</TABLE>

See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>

                          SECURITY NATIONAL FINANCIAL CORPORATION
                                    AND SUBSIDIARIES

                            Consolidated Statements of Earnings

                                           Year Ended December 31,
                                   1997           1996            1995
Revenues:                         -----          ------          -----
--------
<S>                              <C>           <C>            <C>
Insurance premiums and
   other considerations          $ 6,140,783   $ 5,666,436    $ 5,796,011
Net investment income              7,139,580     7,517,014      6,679,704
Net mortuary and cemetery sales    9,230,864     8,138,010      8,238,347
Realized gains on investments
   and other assets                  252,635       289,543        332,648
Mortgage fee income                5,661,867     8,236,709      4,943,103
Other                                 48,893        74,989         71,519
                                 -----------   -----------    -----------
   Total revenue                 $28,474,622   $29,922,701    $26,061,332

Benefits and expenses:
---------------------
Death benefits                   $ 2,407,931   $ 2,143,843    $ 2,193,232
Surrenders and other policy
   benefits                        1,286,511     1,452,295      1,585,312
Increase in future policy
   benefits                        2,974,915     2,744,326      2,333,155
Amortization of deferred
   policy acquisition costs
   and cost of insurance
   acquired                        1,132,298     1,239,918      1,149,510
General and administrative expenses:
   Commissions                     4,882,880     6,000,119      3,792,408
   Salaries                        4,805,571     4,744,503      3,611,993
   Other                           5,671,664     6,547,639      5,613,502
Interest expense                     947,629     1,318,102      1,208,346
Cost of goods and services sold
  of the mortuaries and cemeteries 2,696,174     2,355,353      2,314,410
                                 -----------   -----------    -----------
   Total benefits and expenses   $26,805,573   $28,546,098    $23,801,868
                                 -----------   -----------    -----------

Earnings before income taxes     $ 1,669,049   $ 1,376,603    $ 2,259,464
Income tax expense                  (360,108)     (139,458)      (728,000)
Minority interest in loss
   of subsidiary                      -0-           -0-            20,316
                                 -----------   -----------    -----------
   Net earnings                  $ 1,308,941   $ 1,237,145    $ 1,551,780
                                 ===========   ===========    ===========

Net earnings per common share          $0.33         $0.33          $0.44
                                       =====         =====          =====

   Weighted average outstanding
     common shares                 3,988,034     3,750,498     3,507,766

Net earnings per common
   share-assuming dilution             $0.32         $0.32         $0.43
                                       =====         =====         =====

   Weighted average outstanding
     common shares
      assuming-dilution            4,092,691     3,855,560     3,575,625

See accompanying notes to consolidated financial statements.
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                          SECURITY NATIONAL FINANCIAL CORPORATION
                                   AND SUBSIDIARIES
                       Consolidated Statements of Stockholders' Equity


                                                                Additional
                                  Class              Class       Paid-in
                                    A                  C         Capital
                                 -------             ------    -------------

<S>                             <C>                <C>            <C>
Balance at
  December 31, 1994             $7,116,814         $ 910,018      $7,214,061

Net earnings
Stock dividends                    363,802            45,496         537,204
Conversion Class C
  to Class A                           298              (298)
Stock issued                       157,916                           128,313
Purchase of treasury stock
Change in unrealized
   appreciation                 ----------         ---------      -----------
Balance at
  December 31, 1995              7,638,830           955,216       7,879,578

Net earnings
Stock dividends                    403,758            42,101         548,844
Conversion Class C
  to Class A                         3,904            (3,904)
Stock issued                       174,926                           246,964
Purchase of treasury stock
Change in unrealized
   appreciation                 ----------         ---------      ----------
Balance at
  December 31, 1996              8,221,418           993,413       8,675,386

Net earnings
Stock dividends                    412,712            49,531         431,967
Conversion Class C
  to Class A                         2,718            (2,718)
Stock issued                        16,328               (64)         26,101
Purchase of treasury stock
Change in unrealized
   appreciation                -----------        ----------      ----------
Balance at
  December 31, 1997             $8,653,176        $1,040,162      $9,133,454
                                ==========        ==========      ==========
</TABLE>

See accompanying  notes to consolidated financial statements.
<TABLE>
<CAPTION>


                         SECURITY NATIONAL FINANCIAL CORPORATION
                                   AND SUBSIDIARIES
                      Consolidated Statements of Stockholders' Equity

                                                     Additional
                          Unrealized     Retained     Treasury
                         Appreciation    Earnings       Stock        Total
Balance at               ------------   ----------   -----------  -----------
  December 31, 1994
<S>                        <C>          <C>          <C>          <C>
                           $105,676     $6,270,808   $(1,638,832) $19,978,545

Net earnings                             1,551,780                  1,551,780
Stock dividends                           (946,502)
Conversion Class C
  to Class A
Stock issued                                                          286,229
Purchase of treasury stock                              (160,800)    (160,800)
Change in unrealized
   appreciation             262,839                                   262,839
                          ---------    -----------   -----------   ----------
Balance at
  December 31, 1995         368,515      6,876,086    (1,799,632)  21,918,593

Net earnings                             1,237,145                  1,237,145
Stock dividends                           (994,703)
Conversion Class C
  to Class A
Stock issued                                                          421,890
Purchase of treasury stock                               (1,000)       (1,000)
Change in unrealized
   appreciation            (108,600)                                 (108,600)
                         ----------     -----------   ---------    ----------
Balance at
  December 31, 1996         259,915      7,118,528   (1,800,632)   23,468,028

Net earnings                             1,308,941                  1,308,941
Stock dividends                           (894,210)
Conversion Class C
  to Class A
Stock issued                                            43,520         85,885
Purchase of treasury stock                             (38,948)       (38,948)
Change in unrealized
   appreciation             571,024                                   571,024
                        -----------     ----------- ----------     ----------
Balance at
  December 31, 1997       $ 830,939     $7,533,259  $(1,796,060)   $25,394,930
                        ===========     ==========  ===========    ===========
</TABLE>

See accompanying  notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>


                            SECURITY NATIONAL FINANCIAL CORPORATION
                                       AND SUBSIDIARIES
                             Consolidated Statements of Cash Flow


                                                  Year Ended December 31,
                                             1997         1996        1995
                                            -----       -------      ------
<S>                                      <C>          <C>         <C>
Cash flows from operating activities:
        Net earnings                     $1,308,941   $1,237,145  $1,551,780
        Adjustments to reconcile net
          earnings to net cash provided
          by (used in) operating
          activities:
           Realized gains on investments
             and other assets              (252,635)    (289,543)   (332,648)
           Depreciation                     815,977    1,213,639     719,903
           Provision for losses on
             accounts and loans
             receivable                     129,502      197,239     548,327
           Amortization of goodwill,
             premiums, and discounts        106,783       (5,528)   (152,472)
           Provision for income taxes       360,108      139,458     728,000
           Policy acquisition costs
            deferred                       (909,943)    (748,356)   (644,873)
           Policy acquisition costs
             amortized                      753,662      980,768     903,183
           Cost of insurance acquired
             amortized                      378,636      259,150     246,327
        Change in assets and liabilities
          net of effects from purchases
          and disposals of subsidiaries:
           Land and improvements held
             for sale                       (10,584)    (888,286) (1,401,165)
           Future life and other benefits 2,879,911    2,759,439   2,326,507
           Receivables for mortgage
             loans sold                   2,056,691    6,384,534 (19,016,093)
           Other operating assets
             and liabilities               (534,157)     497,522  (1,190,134)
                                        -----------   ---------- -----------
             Net cash provided
               by (used in)
               operating activities       7,082,892   11,737,181 (15,713,358)

Cash flows from investing activities:
   Securities held to maturity:
      Purchase - fixed maturity
        securities                       (9,254,030)  (1,496,512)  (313,393)
      Calls and maturities - fixed
        maturity securities               7,561,598    5,018,437  2,932,435
   Securities available for sale:
      Purchases - equity securities        (309,547)      (3,126)  (424,095)
      Sales - equity securities             465,935      384,045    388,021
   Purchases of short-term investments   (5,008,706)  (7,768,574)(2,117,410)
   Sales of short-term investments        3,568,048    6,232,884  5,408,113
   Purchases of restricted assets          (329,379)    (467,964)  (617,781)
   Mortgage, policy, and other loans
    made                                 (1,337,456)  (4,931,984)(4,222,888)
   Payments received for mortgage,
     policy, and other loans              3,066,889    5,663,131  8,100,070
   Purchases of property, plant,
     and equipment                         (351,091)    (986,924)  (263,055)
   Purchases of real estate                 (97,013)    (484,471)  (409,367)
   Purchases of subsidiaries
      net of cash acquired                  (60,602)        --   (4,544,043)
   Other uses                                  --           --      (26,567)
                                        -----------    --------- ----------
         Net cash (used in) provided by
            investing activities         (2,085,354)   1,158,942  3,890,040

</TABLE>
<PAGE>
<TABLE>
<CAPTION>



                  SECURITY NATIONAL FINANCIAL CORPORATION
                             AND SUBSIDIARIES
                Consolidated Statements of Cash Flow (Continued)



                                           Year Ended December 31,
                                      1997         1996             1995

<S>                                 <C>         <C>            <C>
Cash flows from financing activities:
        Annuity receipts             2,521,025   2,858,798       2,597,540
        Annuity withdrawals         (4,472,918) (5,523,860)     (1,727,659)
        Repayment of bank loans and
          notes and contracts
          payable                   (1,965,706) (1,550,583)     (1,554,154)
        Proceeds from borrowings
          on bank loans and notes
          and contracts payable        233,000     167,915       3,688,516
        Sale of treasury stock          44,994      --              --
        Purchase of treasury stock     (38,948)     (1,000)         --
        Net change in line of credit
           for financing of mortgage
           loans                    (1,211,890) (13,256,464)    14,468,354
                                   -----------  -----------    -----------
        Net cash (used in) provided by
            financing activities   (4,890,443)  (17,305,194)    17,472,597
                                  -----------   -----------    -----------
 Net change in cash                   107,095    (4,409,071)     5,649,279

Cash at beginning of year           3,301,084     7,710,155      2,060,876
                                  -----------   -----------    -----------

Cash at end of year               $ 3,408,179  $  3,301,084    $ 7,710,155
                                  ===========  ============    ===========

See accompanying notes to the financial statements.
</TABLE>
<PAGE>
                     SECURITY NATIONAL FINANCIAL CORPORATION
                                AND SUBSIDIARIES
                    Notes to Consolidated Financial Statements
                   Years Ended December 31, 1997, 1996, and 1995



1)     Significant Accounting Principles

General Overview of Business

Security National Financial Corporation and its wholly-
owned subsidiaries (the "Company") operates in three main
business segments; life insurance, cemetery and mortuary,
and mortgage loans.  The life insurance segment is engaged
in the business of selling and servicing selected lines of
life insurance, annuity products and accident and health
insurance marketed primarily in the intermountain west,
California, Texas, and Oklahoma.  The cemetery and mortuary
segment of the Company consists of five cemeteries in Utah,
one cemetery in California, eight mortuaries in Utah and
six mortuaries in Arizona.  The mortgage loan segment is an
approved governmental and conventional lender that
originates and underwrites residential and commercial loans
for new construction, existing homes and real estate
projects primarily in the intermountain west.

Basis of Presentation

The accompanying consolidated financial statements have
been prepared in accordance with generally accepted
accounting principles which, for the life insurance
subsidiary, differ from statutory accounting principles
prescribed or permitted by regulatory authorities.

Risks

The following is a description of the most significant
risks facing the Company and how it mitigates those risks:

Legal/Regulatory Risk - the risk that changes in the legal
or regulatory environment in which the Company operates
will create additional expenses and/or risks not
anticipated by the Company in developing and pricing its
products.  That is, regulatory initiatives designed to
reduce insurer profits, new legal theories or insurance
company insolvencies through guaranty fund assessments may
create costs for the insurer beyond those recorded in the
consolidated financial statements.  In addition, changes in
tax law with respect to mortgage interest deductions or
other public policy or legislative changes may affect the
Company's mortgage sales.  Also, the Company may be subject
to further regulations in the cemetery/mortuary business.
The Company mitigates this risk by offering a wide range of
products and by diversifying its operations, thus reducing
its exposure to any single product or jurisdiction, and
also by employing underwriting practices which identify and
minimize the adverse impact of such risk.

Credit Risk - the risk that issuers of securities owned by
the Company or mortgagors on mortgage loans on real estate
owned by the Company will default or that other parties,
including reinsurers and holders of cemetery/ mortuary
contracts which owe the Company money, will not pay.  The
Company minimizes this risk by adhering to a conservative
investment strategy, by maintaining sound reinsurance and
credit and collection policies and by providing for any
amounts deemed uncollectible.

<PAGE>

                      SECURITY NATIONAL FINANCIAL CORPORATION
                                 AND SUBSIDIARIES
                     Notes to Consolidated Financial Statements
                    Years Ended December 31, 1997, 1996, and 1995


1)     Significant Accounting Principles (Continued)

Interest Rate Risk - the risk that interest rates will
change which may cause a decrease in the value of the
Company's investments or impair the ability of the Company
to market its mortgage and cemetery/mortuary products.
This change in rates may cause certain interest-sensitive
products to become uncompetitive or may cause
disintermediation.  The Company mitigates this risk by
charging fees for non-conformance with certain policy
provisions, by offering products that transfer this risk to
the purchaser, and/or by attempting to match the maturity
schedule of its assets with the expected payouts of its
liabilities.  To the extent that liabilities come due more
quickly than assets mature, the Company might have to
borrow funds or sell assets prior to maturity and
potentially recognize a gain or loss.

Mortality/Morbidity Risk - the risk that the Company's
actuarial assumptions may differ from actual
mortality/morbidity experience may cause the Company's
products to be underpriced, may cause the Company to
liquidate insurance or other claims earlier than
anticipated and other potentially adverse consequences to
the business.  The Company minimizes this risk through
sound underwriting practices, asset/liability duration
matching, and sound actuarial practices.

The preparation of financial statements in conformity with
generally accepted accounting principles requires
management to make estimates and assumptions that affect
the amounts reported in the financial statements and
accompanying notes.  Actual results could differ from those
estimates.

The estimates susceptible to significant change are those
used in determining the liability for future policy
benefits and claims, those used in determining valuation
allowances for mortgage loans on real estate, and those
used in determining the estimated future costs for pre-need
sales.  Although some variability is inherent in these
estimates, management believes the amounts provided are
adequate.

Principles of Consolidation

The accompanying consolidated financial statements include
the accounts and operations of the Company.  The Company's
wholly-owned subsidiaries at December 31, 1997, are as
follows:

Security National Life Insurance Company
Security National Mortgage Company
Memorial Estates, Inc.
Memorial Mortuary
Paradise Chapel Funeral Home
Singing Hills Memorial Park
Cottonwood Mortuary, Inc.
Deseret Memorial, Inc.
Holladay Cottonwood Memorial Foundation
Holladay Memorial Park
Camelback Sunset Funeral Home, Inc.
Greer-Wilson Funeral Home
Crystal Rose Funeral Home

<PAGE>

                           SECURITY NATIONAL FINANCIAL CORPORATION
                                      AND SUBSIDIARIES
                          Notes to Consolidated Financial Statements
                         Years Ended December 31, 1997, 1996, and 1995


1)     Significant Accounting Principles (Continued)

In December 1995, Security National Life Insurance Company
and Civil Service Employees Life Insurance Company were
merged into Capital Investors Life, with Capital Investors
Life as the surviving corporation.  In March 1996, the
Company changed the name of the surviving corporation from
Capital Investors Life to Security National Life Insurance
Company.

All significant intercompany transactions and accounts have
been eliminated in consolidation.

In February 1997 the Company purchased all of the
outstanding shares of common stock of Crystal Rose Funeral
Home ("Crystal Rose") for total consideration of $382,208,
which included a note to the former owner for $297,208.  In
addition, the Company entered into an employment agreement
with the former owner for consideration of 40,000 shares of
Class C Common Stock, payable in six equal installments
over six years, beginning in January 1998.  Payment of the
shares is contingent upon the former owner's continued
employment with the Company.  The acquisition was accounted
for using the purchase method.  The assets and liabilities
of Crystal Rose have been included in the Company's balance
sheet at December 31, 1997.  The results of operation of
Crystal Rose for the eleven months ended December 31, 1997
were included in the consolidated statements of earnings of
the Company.  This acquisition resulted in an addition to
excess of cost over net assets of acquired subsidiaries of
approximately $258,320.  The unaudited consolidated pro
forma results of operations assuming consummation of these
acquisitions as of January 1, 1996, would not materially
affect total revenue, net earnings, nor earnings per share
and, thus, have not been shown.

Investments

Investments are shown on the following basis:

Fixed maturity securities held to maturity - at cost,
adjusted for amortization of premium or accretion of
discount.  Although the Company has the ability and intent
to hold these investments to maturity, infrequent and
unusual conditions could occur under which it would sell
certain of these securities.  Those conditions include
unforeseen changes in asset quality, significant changes in
tax laws, and changes in regulatory capital requirements or
permissible investments.

Equity securities available for sale - at fair value, which
is based upon quoted trading prices.  Changes in fair
values net of income taxes are reported as unrealized
appreciation or depreciation and recorded as an adjustment
directly to  stockholders' equity and, accordingly, have no
effect on net income.

Mortgage loans on real estate - at unpaid principal
balances, adjusted for amortization of premium or accretion
of discount, less allowance for possible losses.

<PAGE>

                 SECURITY NATIONAL FINANCIAL CORPORATION
                            AND SUBSIDIARIES
                Notes to Consolidated Financial Statements
               Years Ended December 31, 1997, 1996, and 1995


1)     Significant Accounting Principles (Continued)

Real estate - at cost, less accumulated depreciation
provided on a straight-line basis over the estimated useful
lives of the properties, and net of allowance for
impairment in value.

Policy and other loans - at the aggregate unpaid balances.

Short-term investments - consists of certificates of
deposit and commercial paper with maturities of up to one
year.

Restricted assets of cemeteries and mortuaries - consists
of cash, participations in mortgage loans with Security
National Life Insurance Company, equity securities and
mutual funds carried at cost, and fixed maturity securities
carried at cost adjusted for amortization of premium or
accretion of discount.  With respect to the equity
securities, market value is not materially different than
cost.

Realized gains and losses on investments - realized gains
and losses on investments and declines in value considered
to be other than temporary, are recognized in operations on
the specific identification basis.

Property, Plant and Equipment

Property, plant and equipment is recorded at cost.
Depreciation is calculated principally on the straight-line
method over the estimated useful lives of the assets which
range from three to thirty years.

Recognition of Insurance Premiums and Other Considerations

Premiums for traditional life insurance products (which
include those products with fixed and guaranteed premiums
and benefits and consist principally of whole life
insurance policies, limited-payment life insurance
policies, and certain annuities with life contingencies)
are recognized as revenues when due from policyholders.
Revenues for interest-sensitive insurance policies (which
include universal life policies, interest-sensitive life
policies, deferred annuities, and annuities without life
contingencies) consist of policy charges for the cost of
insurance, policy administration charges, and surrender
charges assessed against policyholder account balances
during the period.

Deferred Policy Acquisition Costs and Cost of Insurance
Acquired

Commissions and other costs, net of commission and expense
allowances for reinsurance ceded, that vary with and are
primarily related to the production of new insurance
business have been deferred.  Deferred policy acquisition
costs for traditional life insurance are amortized over the
premium-paying period of the related policies using
assumptions consistent with those used in computing policy
benefit reserves.  For interest-sensitive insurance
products, deferred policy acquisition costs are amortized

<PAGE>

                SECURITY NATIONAL FINANCIAL CORPORATION
                           AND SUBSIDIARIES
               Notes to Consolidated Financial Statements
              Years Ended December 31, 1997, 1996, and 1995


1)     Significant Accounting Principles (Continued)

generally in proportion to the present value of expected
gross profits from surrender charges, investment, mortality
and expense margins.  This amortization is adjusted when
estimates of current or future gross profits to be realized
from a group of products are reevaluated.  Deferred
acquisition costs are written off when policies lapse or
are surrendered.

Cost of insurance acquired is the present value of
estimated future profits of the acquired business and is
amortized similar to deferred policy acquisition costs.

Future Life, Annuity and Other Policy Benefits

Future policy benefit reserves for traditional life
insurance are computed using a net level method, including
assumptions as to investment yields, mortality, morbidity,
withdrawals, and other assumptions based on the life
insurance subsidiary's experience, modified as necessary to
give effect to anticipated trends and to include provisions
for possible unfavorable deviations.  Such liabilities are,
for some plans, graded to equal statutory values or cash
values at or prior to maturity.  The range of assumed
interest rates for all traditional life insurance policy
reserves was 4.5% to 10% in 1997, 1996, and 1995.  Benefit
reserves for traditional limited-payment life insurance
policies include the deferred portion of the premiums
received during the premium-paying period.  Deferred
premiums are recognized as income over the life of the
policies.  Policy benefit claims are charged to expense in
the period the claims are incurred.

Future policy benefit reserves for interest-sensitive
insurance products are computed under a retrospective
deposit method and represent policy account balances before
applicable surrender charges.  Policy benefits and claims
that are charged to expense include benefit claims incurred
in the period in excess of related policy account balances.
Interest crediting rates for interest-sensitive insurance
products ranged from 4% to 6.5% in 1997, 1996 and 1995.

Participating Insurance

Participating business constitutes 8%, 5%, and 5% of the
ordinary life insurance in force for 1997, 1996 and 1995,
respectively.  The provision for policyholders' dividends
included in policyholder obligations is based on dividend
scales anticipated by management.  Amounts to be paid are
determined by the Board of Directors.

Reinsurance

The Company follows the procedure of reinsuring risks in
excess of $50,000.  The Company is liable for those amounts
in the event the reinsurers are unable to pay their portion
of the claims.

<PAGE>

         SECURITY NATIONAL FINANCIAL CORPORATION
                    AND SUBSIDIARIES
        Notes to Consolidated Financial Statements
       Years Ended December 31, 1997, 1996, and 1995


1)     Significant Accounting Principles (Continued)

The Company has entered into coinsurance agreements with
unaffiliated insurance companies under which the Company
assumed 100% of the risk for certain life insurance
policies and certain other policy-related liabilities of
the insurance company.

Reinsurance premiums, commissions, expense reimbursements,
and reserves related to reinsured business are accounted
for on a basis consistent with those used in accounting for
the original policies issued and the terms of the
reinsurance contracts.  Expense allowances received in
connection with reinsurance ceded are accounted for as a
reduction of the related policy acquisition costs and are
deferred and amortized accordingly.

Cemetery and Mortuary Operations

Land and improvements used in cemetery operations are
stated at cost and charged to operations when sold based on
the number of spaces available for sale.  Mausoleum costs
are charged to operations when sold based on the number of
niches available for sale.  Perpetual care is maintained on
sold spaces as discussed in Note 7.

Certain cemetery products are sold on a pre-need basis.
Revenues from pre-need cemetery sales are recognized at the
time of sale.  Related costs required to establish the
liability for estimated future costs of pre-need sales are
also recorded at the time of sale.  This liability relates
to promised merchandise and funeral services and is
increased or decreased each period as current costs change.
A corresponding charge is made to operations to reflect the
change in costs.  Certain mortuary products and services
are also sold on a pre-need basis.  Pre-need mortuary sales
are fully reserved at the time of the sale.  Revenue on
pre-need mortuary services is recognized at the time the
service is performed.  All pre-need sales contracts bear
interest at 8%.

The Company is required to place specified amounts into
restricted asset accounts for products sold on a pre-need
basis.  Income from assets placed in these restricted asset
accounts are used to offset required increases to the
estimated future liability.  Management believes amounts
placed into these accounts are sufficient to fulfill all
future pre-need contract obligations.

Revenues and costs for at-need sales are recorded when the
services are performed.

The Company, through its mortuary and cemetery operations,
provides a guaranteed funeral arrangement wherein a
prospective customer can receive future goods and services
at guaranteed prices.  To accomplish this, the Company,
through its life insurance operations, sells to the
customer an increasing benefit life insurance policy that
is assigned to the mortuaries.  If, at the time of need,
the policyholder/potential mortuary customer utilizes one
of the Company's facilities, the guaranteed funeral arrang

<PAGE>

               SECURITY NATIONAL FINANCIAL CORPORATION
                          AND SUBSIDIARIES
              Notes to Consolidated Financial Statements
             Years Ended December 31, 1997, 1996, and 1995


1)     Significant Accounting Principles (Continued)

ement contract that has been assigned will provide the
funeral goods and services at the contracted price.   The
increasing life insurance policy will cover the difference
between the original contract prices and current prices.
Risks may arise if the difference cannot be fully met by
the life insurance policy.  However, management believes
that given current inflation rates and related price
increases of goods and services, the risk of exposure is
minimal.

Mortgage Operations

Mortgage fee income is generated through the origination
and refinancing of mortgage loans and is deferred until
such loans are sold.

Excess of Cost Over Net Assets of Acquired Businesses

Previous acquisitions have been accounted for as purchases
under which assets acquired and liabilities assumed were
recorded at their fair values.  The excess of cost over net
assets of acquired subsidiaries is being amortized over a
range of fifteen to twenty years using the straight-line
method.  The Company periodically evaluates the
recoverability of amounts recorded.  Accumulated
amortization was $780,356 and $705,833 at December 31, 1997
and 1996, respectively.

Income Taxes

Income taxes include taxes currently payable plus deferred
taxes related to the tax effect of temporary differences in
the financial reporting basis and tax basis  of assets and
liabilities.  Such temporary differences are related
principally to the deferral of policy acquisition costs and
the provision for future policy benefits in the insurance
operations.

Earnings Per Common Share

The Company has adopted Statement of Financial Accounting
Standards ("SFAS") No. 128, "Earnings Per Share".  The new
Standard simplified the standards for computing earnings
per share and requires presentation of two new amounts,
basic and diluted earnings per share.  The new Standard
also requires additional informational disclosures and
makes certain modifications to the previous standards
defined in Accounting Principles Board ("APB") Opinion No.
15.  The Company was required to retroactively adopt this
Standard for each year presented.

Basic earnings per share were computed by dividing net
earnings by the weighted average number of common shares
outstanding during each year presented, after the effect of
the assumed conversion of Class C Common Stock to Class A
Common Stock, the acquisition of treasury stock, and the
retroactive  effect  of  stock dividends declared.  Diluted

<PAGE>

              SECURITY NATIONAL FINANCIAL CORPORATION
                         AND SUBSIDIARIES
             Notes to Consolidated Financial Statements
            Years Ended December 31, 1997, 1996, and 1995


1)     Significant Accounting Principles (Continued)

earnings per share were computed by dividing net earnings
by the weighted average number of common shares outstanding
during the year plus the incremental shares that would have
been outstanding under certain deferred compensation plans.

Stock Compensation

The Company has adopted Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-Based
Compensation" ("SFAS No. 123").  In accordance with the
provisions of SFAS 123, the Company has elected to continue
to apply Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" ("APB Opinion
No. 25"), and related interpretations in accounting for its
stock option plans.

The Company has one fixed option plan (the "1993 Plan").
In accordance with APB Opinion No. 25, no compensation cost
has been recognized for the 1993 plan.  Had compensation
cost for the 1993 plan been determined based upon the fair
value at the grant date consistent with the methodology
prescribed under SFAS No. 123, the Company's net income
would have been reduced by approximately $10,000 and $7,000
in 1997 and 1996 respectively, which would have had no
effect on earnings per share.  The fair value of options
granted in 1996 under the 1993 plan is estimated as $1.19
on the date of grant using the Black-Scholes option-pricing
model with the following assumptions:  dividend yield of
5%, volatility of 34.2%, risk free interest rate of 6.9%,
and an expected life of five years.  No options were
granted in 1995 under the 1993 plan, and, therefore, there
would have been no effect on net income or earnings per
share had the Company applied the methodology prescribed
under SFAS No. 123 in that year.

The Company also has one variable option plan (the "1987
Plan").  In accordance with APB Opinion No. 25,
compensation cost related to options granted and
outstanding under the 1987 Plan is estimated and recognized
over the period of the award based on changes in the
current market price of the Company's stock over the
vesting period.

Reclassifications

Certain amounts in prior years have been reclassified to
conform with the 1997 presentation.

New Accounting Standards

In 1997, the Financial Accounting Standards Board issued
Statement No. 128, "Earnings per Share" ("SFAS No. 128").
SFAS No. 128 replaced the calculation of primary and fully
diluted earnings per share with basic and diluted earnings
per share.  Unlike primary earnings per share, basic
earnings per share excludes any dilutive effects of
options, warrants and convertible securities.  Diluted
earnings per share is very similar to the previously
reported fully diluted earnings per share.  All earnings
per share amounts for all periods have been presented, and
where appropriate, restated to conform to the SFAS No. 128
requirements.

<PAGE>

                    SECURITY NATIONAL FINANCIAL CORPORATION
                               AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                  Years Ended December 31, 1997, 1996, and 1995


1)     Significant Accounting Principles (Continued)

During 1997, the Financial Accounting Standards Board
issued SFAS No. 130, "Reporting Comprehensive Income", and
SFAS No. 131, "Disclosures about Segments of an Enterprise
and Related Information", which are effective for fiscal
years beginning after December 15, 1997.  The Company has
not yet adopted these new standards; however, the effect on
financial position, operations and stockholders' equity is
not expected to be significant.

<PAGE>

            SECURITY NATIONAL FINANCIAL CORPORATION
                       AND SUBSIDIARIES
          Notes to Consolidated Financial Statements
         Years Ended December 31, 1997, 1996, and 1995


2)  Investments

   The Company's insurance related investments in fixed maturity securities
held to maturity and equity securities available for sale are summarized as
follows:
<TABLE>
<CAPTION>

                                        Gross        Gross      Estimated
                           Amortized  Unrealized   Unrealized     Fair
                             Cost       Gains        Losses       Value
                           ---------  ----------  ------------  ----------
<S>                        <C>            <C>         <C>         <C>
December 31, 1997:
Fixed maturity securities
held to maturity:
    U.S. Treasury securities and
    obligations of U.S.
    Government agencies       $17,212,358     $300,816   $ (13,139) $17,500,035

    Obligations of states and
    political subdivisions        216,290       14,066     (12,406)     217,950

    Corporate securities
    including public utilities 25,144,396    1,260,917    (158,966)  26,246,347

    Redeemable preferred stock     87,563       35,054     (34,041)      88,576
    Mortgage-backed securities  7,124,291        -0-         -0-      7,124,291
                              -----------   ----------   ---------  -----------
           Total              $49,784,898   $1,610,853   $(218,552) $51,177,199
                              ===========   ==========   =========  ===========

Equity securities
    available for sale        $ 3,870,078   $1,563,836   $(602,101) $ 4,831,813

December 31, 1996:
Fixed maturity securities
held to maturity:
    U.S. Treasury securities and
    obligations of U.S.
    Government agencies       $12,412,746  $   198,677  $ (70,283)  $12,541,140

    Obligations of states and
    political subdivisions        215,021        4,888    (26,009)      193,900

    Corporate securities
    including public utilities 27,388,574      262,446   (406,259)   27,244,761

    Redeemable preferred stock    133,788       24,570    (36,238)      122,120
    Mortgage-backed securities  7,784,555       11,923   (303,840)    7,492,638
                              -----------   ---------- ----------   -----------
        Total                 $47,934,684   $  502,504 $ (842,629)  $47,594,559
                              ===========   ========== ==========   ===========
Equity securities
   available for sale         $ 3,873,190   $  930,698 $ (670,783)  $ 4,133,105
                              ===========   ========== ==========   ===========
</TABLE>


                SECURITY NATIONAL FINANCIAL CORPORATION
                           AND SUBSIDIARIES
              Notes to Consolidated Financial Statements
             Years Ended December 31, 1997, 1996, and 1995


2)  Investments (Continued)

The fair values for fixed maturity securities are based on
quoted market prices, when available.  For fixed maturity
securities not actively traded, fair values are estimated
using values obtained from independent pricing services, or
in the case of private placements, are estimated by
discounting expected future cash flows using a current
market value applicable to the coupon rate, credit and
maturity of the investments.  The fair values for equity
securities are based on quoted market prices.

The amortized cost and estimated fair value of fixed
maturity securities held to maturity at December 31, 1997,
by contractual maturity, are shown below.  Expected
maturities may differ from contractual maturities because
certain borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>


                                                                Estimated
                                                 Amortized         Fair
                                                    Cost           Value
                                                 ---------      ----------
      <S>                                      <C>              <C>
      Due in 1998                              $ 3,851,682      $ 3,830,935
      Due in 1999 through 2002                  12,072,088       12,456,684
      Due in 2003 through 2007                  23,913,023       24,875,763
      Due after 2007                             2,736,251        2,800,950
      Mortgage-backed securities                 7,124,291        7,124,291
      Redeemable preferred stock                    87,563           88,576
                                               -----------      -----------
                                               $49,784,898      $51,177,199
                                               ===========      ===========
</TABLE>

The Company's realized gains and losses in investments are
summarized as follows:
<TABLE>
<CAPTION>


                                     1997            1996         1995
                                   -------          ------       ------
      <S>                         <C>             <C>          <C>
      Fixed maturity
        securities held
        to maturity:
      Gross realized gains        $ 37,995        $ 347,728    $ 33,028
      Gross realized losses        (12,457)        (141,848)     (7,112)

      Equity securities
        available for sale:
      Gross realized gains         242,714           89,823     101,874
      Gross realized losses        (15,617)            --        (1,237)

      Other assets                   -0-             (6,160)    206,095
                                  --------        ---------    --------
                   Total          $252,635        $ 289,543    $332,648
                                  ========        =========    ========
</TABLE>

The change in unrealized appreciation of investments, as
shown in the accompanying consolidated statements of
stockholders' equity, relates entirely to equity securities
for 1997, 1996, and 1995.

Concentrations of credit risk arise when a number of
mortgage loan debtors have similar economic characteristics
that would cause their ability to meet contractual
obligations to be similarly affected by changes in economic
conditions.  Although the Company has a diversified
mortgage loan portfolio consisting of residential and
commercial loans and requires collateral on all real estate
exposures, a substantial portion of its debtors' ability to
honor obligations is reliant on the economic stability of
the geographic region in which the debtors do business.
The Company has 83% of its mortgage loans in the state of
Utah.


             SECURITY NATIONAL FINANCIAL CORPORATION
                        AND SUBSIDIARIES
            Notes to Consolidated Financial Statements
           Years Ended December 31, 1997, 1996, and 1995

2)  Investments (Continued)

Major categories of net investment income are as follows:
<TABLE>
<CAPTION>

                                         1997          1996        1995
                                        -----         -----       ------
        <S>                           <C>         <C>           <C>
        Fixed maturity
          securities                  $3,519,270   $3,684,089   $3,070,180
        Equity securities                238,097      251,733      266,613
        Mortgage loans
           on real estate                774,478    1,225,207    1,888,855
        Real estate                    1,375,996    1,281,511    1,115,212
        Policy loans                     170,726      168,857      138,303
        Short-term investments           529,979      575,498      366,426
        Other                          1,310,246    1,179,889      522,526
              Gross investment income  7,918,792    8,366,784    7,368,115
        Investment expenses             (779,212)    (849,770)    (688,411)
                                      ----------   ----------   ----------
        Net investment
              income                  $7,139,580   $7,517,014   $6,679,704
                                      ==========   ==========   ==========
</TABLE>

Net investment income includes net investment income earned
by the restricted assets of the cemeteries and mortuaries
of approximately $609,000, $655,000 and $574,000 for 1997,
1996, and 1995, respectively.

Investment expenses consist primarily of depreciation,
property taxes and an estimated portion of administrative
expenses relating to investment activities.

Securities on deposit for regulatory authorities as
required by law amounted to $7,155,070 at December 31, 1997
and $7,295,953 at December 31, 1996.

3)  Cost of Insurance Acquired

Information with regard to cost of insurance acquired is as
follows:
<TABLE>
<CAPTION>

                                     1997            1996          1995
                                   -------          ------        ------
<S>                               <C>             <C>           <C>
Balance at
  beginning of year               $3,748,654      $4,007,804    $3,580,964
Cost of insurance
  acquired                            --              --           673,167
Interest accrued at 7%               262,406         280,546       250,667
Amortization                        (641,042)       (539,696)     (496,994)
Net amortization
  charged to income                 (378,636)       (259,150)     (246,327)
                                  ----------      ----------    ----------
Balance at end of year            $3,370,018      $3,748,654    $4,007,804
                                  ==========      ==========    ==========
</TABLE>


Net amortization charged to income is expected to
approximate $297,000, $280,000, $259,000, $245,000, and
$233,000 for the years 1998 through 2002.

<PAGE>

                      SECURITY NATIONAL FINANCIAL CORPORATION
                                 AND SUBSIDIARIES
                     Notes to Consolidated Financial Statements
                    Years Ended December 31, 1997, 1996, and 1995


4) Property, Plant and Equipment

The cost of property, plant and equipment is summarized
below:

<TABLE>
<CAPTION>


                                       December 31,
                              1997                        1996
                            -------                      ------
<S>                      <C>                         <C>
Land and Buildings       $ 6,584,835                 $ 6,275,098
Furniture and equipment    4,784,763                   4,457,473
                         -----------                 -----------
                          11,369,598                  10,732,571
Less accumulated
   depreciation           (4,728,036)                 (4,218,591)
                         -----------                 -----------
                         $ 6,641,562                 $ 6,513,980
                         ===========                 ===========
</TABLE>

<TABLE>
<CAPTION>

5)      Bank Loans Payable and Lines of Credit

Bank loans payable are summarized
as follows:

                                                December 31,
                                        1997                     1996
<S>                                <C>                          <C>
Bank prime rate (8.5% at
   December 31, 1997) plus
   1/2% note payable in
   monthly installments of
   $36,420 including principal
   and interest, collateralized
   by 15,000 shares of Security
   National Life stock, due
   December 1999.                   $2,221,394                 $2,456,336

10% note payable in monthly
   installments of $8,444
   including principal and
   interest, collateralized by
   real property, which book
   value is approximately
   $1,148,000, due January 2013.       789,516                    810,725

One year treasury constant
   maturity (8.03% at December
   31, 1997) plus 2.75% note
   payable in monthly
   installments of $6,000,
   including principal and
   interest, collateralized by
   real property, which book
   value is approximately
   $441,000, due October
   1999.                               295,113                    336,385

Bank prime rate (8.5% at
   December 31, 1997) less
   1.35% note payable in
   monthly installments of
   $20,836, including principal
   and interest, collateralized
   by real property, which
   book value is approximately
   $1,164,000, due November
   2007                              1,789,349                  1,839,009


</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                     SECURITY NATIONAL FINANCIAL CORPORATION
                                AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                  Years Ended December 31, 1997, 1996, and 1995


5)  Bank Loans Payable and Lines of Credit (Continued)

                                                      December 31,
                                                1997                 1996
<S>                                            <C>                   <C>
Time deposit (5.1% at
   December 31, 1997) plus
   2% note payable in monthly
   installments of $3,500,
   including principal and
   interest, collateralized
   by 75% of the unpaid face
   amount of the accounts
   receivable, which are less
   than 60 days from payment
   date, due March 2006                         -0-                238,477

Bank prime rate (8.5% at
   December 31, 1997) plus
   1/2% note payable in monthly
   installments of $7,235
   including principal and
   interest collateralized
   by real property, which
   book value is approximately
   $975,000, due August
   1999.                                     460,654              502,856

Bank prime rate (8.5% at
   December 31, 1997) less
   1.35% note payable in
   monthly installments of
   $2,736 including principal
   and interest, collateralized
   by treasury shares of
   the Company's stock, due
   December 2005.                           233,000                 -0-

Bank prime rate (8.25% at
   December 31, 1996) plus 1%
   note payable in monthly
   installments of $35,000,
   including principal and
   interest, collateralized
   by real property, which
   book value is approximately
   $2,284,000, due February
   2003                                       -0-                 274,954

Other collateralized
   bank loans payable                      308,325                309,377
                                        ----------             ----------
   Total bank loans                      6,097,351              6,768,119

Less current installments                  597,523              2,745,518
                                        ----------             ----------
   Bank loans, excluding
   current installments                 $5,499,828             $4,022,601
                                        ==========             ==========
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                  SECURITY NATIONAL FINANCIAL CORPORATION
                             AND SUBSIDIARIES
                 Notes to Consolidated Financial Statements
                Years Ended December 31, 1997, 1996, and 1995


5)            Bank Loans Payable and Lines of Credit (Continued)

                                                      December 31,
                                               1997                 1996
<S>                                     <C>                       <C>
$20 million revolving
   line of credit at the
   London Interbank
   offered rates (5.75% at
   December 31, 1997)
   plus 1.45% note payable
   within 30 days collateralized
   by receivable from mortgage
   loans sold to investors.                 $   -0-            $ 1,211,890

$100,000 revolving line of
   credit at bank prime rate
   (8.5% at December 31, 1997)
   plus 1/2%  note payable
   within 30 days.                         $  100,000          $    -0-

</TABLE>

See Note 6 for summary of maturities in subsequent years.

6)  Notes and Contracts Payable

Notes and contracts payable are summarized as follows:
<TABLE>
<CAPTION>

                                                  December 31,
                                         1997                     1996
<S>                                  <C>                          <C>
10% note payable in monthly
   installments of $37,551,
   including principal and
   interest, collateralized
   by a building, which book
   value is approximately
   $2,898,000, due December,
   1997.                             $    -0-                 $  845,177

Due to former stockholders
   of Deseret Memorial, Inc.
   resulting from the
   acquisition of such entity.
   Amount represents the
   present value discounted
   at 8% of monthly annuity
   payments ranging from
   $4,600 to $5,000 plus
   an index adjustment in
   the 7th through the 12th
   years, due September 2011.          680,220                   687,450

Due to former stockholders
   of Greer Wilson resulting from
   the acquisition of such entity.
   Amount represents the present
   value discounted at 10% of
   monthly annuity payments of
   $7,000, due March 2005.             435,543                   474,544

</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                 SECURITY NATIONAL FINANCIAL CORPORATION
                            AND SUBSIDIARIES
                Notes to Consolidated Financial Statements
               Years Ended December 31, 1997, 1996, and 1995


6)            Notes and Contracts Payable (Continued)
                                                          December 31,
                                                  1997               1996
<S>                                      <C>                         <C>
Due to former stockholders of
   Civil Service Employees Life
   Insurance Company resulting from
   the acquisition of such entity.
   7% note payable in seven annual
   principal payments of $151,857,
   due December 2003.                           759,286           911,143

Due to former stockholders
   of Crystal Rose Funeral
   Home resulting from the
   acquisition of such entity.
   Amount represents the present
   value discounted at 9% of
   monthly annuity payments of
   $5,350 due February 2007.                    263,261             -0-

9% note payable in monthly
   installments of $10,000
   including principal and
   interest collateralized
   by real property, which
   book value is approximately
   $2,908,000, due July 2008                    828,836          872,933

Other notes payable                             816,420          718,674
                                           ------------       ----------
Total notes and
   contracts payable                          3,783,566        4,509,921
Less current
   installments                                 422,061        1,227,983
                                           ------------       ----------
Notes and contracts,
excluding current
installments                                 $3,361,505       $3,281,938
                                             ==========       ==========
</TABLE>


The following tabulation shows the combined maturities of
bank loans payable, lines of credit and notes and contracts
payable:
<TABLE>
<CAPTION>

          <S>                              <C>
            1998                           $  1,119,584
            1999                              3,242,273
            2000                                659,877
            2001                                683,251
            2002                                697,107
         Thereafter                           3,578,825
                                           ------------
            Total                            $9,980,917
                                           ============
</TABLE>

Interest paid approximated interest expense in 1997, 1996
and 1995.

<PAGE>
<TABLE>
<CAPTION>

               SECURITY NATIONAL FINANCIAL CORPORATION
                          AND SUBSIDIARIES
              Notes to Consolidated Financial Statements
             Years Ended December 31, 1997, 1996, and 1995



7)  Cemetery and Mortuary Endowment Care and Pre-need
    Merchandise Funds

The Company owns and operates several endowment care
cemeteries, for which it has established and maintains an
endowment care fund.  The Company records a liability to
the fund for each space sold at current statutory rates.
The Company is not required to transfer assets to the fund
until the spaces are fully paid for.  The liability to the
endowment care fund is summarized as follows:

                                                   December 31,
                                            1997                 1996
<S>                                   <C>                   <C>
Liability for spaces sold             $ 1,351,788           $ 1,317,998
Less assets in the fund                (1,230,418)           (1,247,381)
                                      -----------           -----------
    Total due to fund                 $   121,370           $    70,617

</TABLE>

Assets in the endowment care fund, at cost, are
summarized as follows:
<TABLE>
<CAPTION>

                                               December 31,
                                    1997                           1996
<S>                             <C>                            <C>
Cash and cash equivalents       $  111,637                     $  134,850
Mutual funds                         --                            22,053
Equity securities                   94,613                         94,613
Participation in mortgage
    loans with Security
    National Life                  889,168                        860,865
Other                              135,000                        135,000
                                ----------                     ----------
    Total                       $1,230,418                     $1,247,381
                                ==========                     ==========
</TABLE>

The Company has established and maintains certain
restricted asset accounts to provide for future merchandise
obligations incurred in connection with its pre-need sales.
Such amounts are reported as restricted assets of
cemeteries and mortuaries in the accompanying balance
sheet.

Assets in the restricted asset account, which are
reported at cost, are summarized as follows:
<TABLE>
<CAPTION>

                                                 December 31,
                                          1997                  1996
<S>                                  <C>                   <C>
Cash and cash equivalents            $2,038,828            $1,244,808
Mutual funds                            132,944               125,516
Fixed maturity securities               384,690               819,680
Equity securities                        77,778                77,778
Participation in mortgage
    loans with Security
    National Life                     1,221,849             1,153,143
Time certificate of deposit              33,696                33,697
                                     ----------            ----------
    Total                            $3,889,785            $3,454,622
                                     ==========            ==========
</TABLE>
<TABLE>
<CAPTION>

8)  Income Taxes

The Company's income tax liability at December 31 is
summarized as follows:

                                             December 31,
                                  1997                        1996
<S>                           <C>                        <C>
Current                       $  226,300                 $   26,129
Deferred                       3,007,115                  2,716,384
                              ----------                 ----------
Total                         $3,233,415                 $2,742,513
                              ==========                 ==========
</TABLE>
<PAGE>


              SECURITY NATIONAL FINANCIAL CORPORATION
                         AND SUBSIDIARIES
            Notes to Consolidated Financial Statements
           Years Ended December 31, 1997, 1996, and 1995


8)  Income Taxes (Continued)

Significant components of the Company's deferred tax
assets and liabilities at December 31 are approximately
as follows:

<TABLE>
<CAPTION>


                                            1997              1996
<S>                                      <C>              <C>
Assets
Future policy benefits                   $(67,238)        $(112,868)
Uncollected agents'
    balances                              (45,140)          (45,140)
Difference between book
    and tax basis of bonds                (46,885)          (56,771)
AMT credits                               (13,064)          (44,719)
Net operating
 loss carryforwards
 expiring in the years
 2001 through 2010                       (219,069)         (174,456)
Capital loss
 carryforward                               --              (11,177)
                                        --------         ----------
Total deferred
    tax assets                          $(391,396)        $(445,131)
                                        =========         =========
Liabilities
Deferred policy
  acquisition costs                     $ 394,253         $ 274,313
Cost of insurance
  acquired                                466,426           509,817
Installment sales                         538,205           639,845
Depreciation                              790,136           877,448
Trusts                                    528,803           505,839
Tax on unrealized
  appreciation                            130,796             --
Other                                     549,892           354,253
                                        ---------         ---------
Total deferred
  tax liabilities                       3,398,511         3,161,515
                                       ----------        ----------
Net deferred tax
  liability                            $3,007,115        $2,716,384
                                       ==========        ==========
</TABLE>


The Company paid approximately $18,000 of income taxes in
1996,  and  paid  no  income taxes in 1997 and 1995.  The
Company's income tax expense is summarized as follows:
<TABLE>
<CAPTION>


                                1997        1996      1995
                               ------      ------    ------
<S>                          <C>        <C>        <C>
Current                      $200,173   $(168,527) $191,000
Deferred                      159,935     307,985   537,000
                             --------   ---------  --------
Total                        $360,108   $ 139,458  $728,000
                             ========   =========  ========
</TABLE>
<PAGE>

               SECURITY NATIONAL FINANCIAL CORPORATION
                          AND SUBSIDIARIES
              Notes to Consolidated Financial Statements
            Years Ended December 31, 1997, 1996, and 1995


8)  Income Taxes(Continued)

The reconciliation  of  income  tax  expense at the U.S.
federal statutory rates is as follows:
<TABLE>
<CAPTION>


                                   1997         1996           1995
<S>                            <C>           <C>           <C>
Computed expense at
  statutory rate               $562,772      $ 461,574     $ 768,000
Special deductions
  allowed small life
  insurance
  companies                    (152,215)      (260,803)     (164,000)
Dividends received
  deduction                     (32,343)       (32,968)      (40,000)
Prior year
  provision to tax
  return true-up                (18,421)         --          158,000
Other, net                          315        (28,345)        6,000
                              ---------      ---------     ---------
  Tax expense                  $360,108      $ 139,458     $ 728,000
                              =========      =========     =========
</TABLE>

A portion of the life insurance income earned prior to 1984
was not subject to current taxation but was accumulated for
tax purposes, in a "policyholders' surplus account."  Under
provisions of the Internal Revenue Code, the policyholders'
surplus account was frozen at its December 31, 1983 balance
and will be taxed generally only when distributed.  As of
December 31, 1997, the policyholders' surplus accounts
approximated $4,300,000.  Management does not intend to
take actions nor does management expect any events to occur
that would cause federal income taxes to become payable on
that amount.  However, if such taxes were accrued, the
amount of taxes payable would be approximately $1,449,000.

The insurance company has remaining loss carry forwards for
tax purposes of approximately $1,600,000, approximately
$586,000 of which is subject to an annual limitation of
approximately $300,000.

9)   Reinsurance, Commitments and Contingencies

The Company follows the procedure of reinsuring risks in
excess of a specified limit, which was $50,000 at December
31, 1997 and 1996.  The Company is liable for these amounts
in the event such reinsurers are unable to pay their
portion of the claims.  The Company has also assumed
insurance from other companies having insurance in force
amounting to $46,254,429 at December 31, 1997 and
$52,508,120 at December 31, 1996.

Mortgage loans originated and sold to unaffiliated
investors are sold subject to certain recourse provisions.

<PAGE>
                  SECURITY NATIONAL FINANCIAL CORPORATION
                             AND SUBSIDIARIES
                 Notes to Consolidated Financial Statements
                Years Ended December 31, 1997, 1996, and 1995


9)   Reinsurance, Commitments and Contingencies (Continued)

The Company has been named as a party in connection with
pending litigation brought by Garry Eckard & Co., Inc.
("Eckard") in the Federal District Court for the Southern
District of Indiana.  The complaint was filed on October
14, 1996 and alleges breach of contract and civil
conversion pertaining to a finder's fee and seeks an
unspecified amount of damages plus costs and attorneys'
fees.  In a prior letter to the Company from Eckard, it
appears that the amount of the fee being sought is
$152,000.  The complaint, pursuant to the civil conversion
claim, seeks treble damages under Indiana's civil
conversion statute.

The complaint was initially filed in the Indiana Hamilton
County Superior Court, but was subsequently removed by the
Company to the Federal District Court for the Southern
District of Indiana.  The Company filed a motion to dismiss
for lack of personal jurisdiction and Eckard filed a motion
to amend its complaint and to add Security National Life
Insurance Company, a subsidiary of the Company, as a party
defendant.  On March 18, 1997, the Company's motion was
granted to dismiss the complaint against the Company for
lack of personal jurisdiction and Eckard's motion was
granted to amend the complaint by adding Security National
Life Insurance Company as a party defendant.  The Company's
motion to dismiss the complaint against the Company was
granted without prejudice, which allows the complaint to be
refiled in an appropriate jurisdiction.

Security National Life Insurance Company then filed a
motion to dismiss for lack of personal jurisdiction.  On
October 10, 1997, this motion to dismiss the complaint for
lack of personal jurisdiction was granted thereby also
dismissing the case against Security National Life
Insurance Company.  Thus, the case in Indiana was dismissed
without prejudice against both the Company and Security
National Life Insurance Company for lack of personal
jurisdiction.

On March 13, 1998, a letter was sent by Eckard's counsel
relative to a settlement proposal together with a draft
complaint against the Company and Security National Life
Insurance Company for filing in the United States District
Court for the District of Utah.  There appears to be no
material difference between the complaint prepared for
filing in Utah and the amended complaint which had been
filed in Indiana.  Assuming that settlement will not
immediately take place, and that the matter will be filed
in Utah, the Company believes there is no basis to the
claims in the draft complaint.  The Company intends to
vigorously defend against the action.

The Company has also been named as a party in the pending
litigation brought by John and Donna Mackay (the "Mackays")
in the Third Judicial Court, Salt Lake County, State of
Utah.  The complaint alleges that certain payments are due
to the Mackays pursuant to a contract which at the date of
filing was claimed to be in the amount of $25,000 plus
interest with arrearages purportedly continuing to increase
the principal claimed in the amount of approximately $600
per month.

<PAGE>

                 SECURITY NATIONAL FINANCIAL CORPORATION
                            AND SUBSIDIARIES
                Notes to Consolidated Financial Statements
              Years Ended December 31, 1997, 1996, and 1995


9)   Reinsurance, Commitments and Contingencies (Continued)

The complaint brought by the Mackays also alleges certain
items of personal property were removed from their
location, sold or destroyed, which it is alleged had a
value of approximately $50,000, for which the Company is
allegedly liable, and that the Company also should deliver
to the Mackays 80 shares of Spring Creek Irrigation Company
common stock, which allegedly has "substantial value."  The
Mackays have also included a claim for breach of the
implied covenant of good faith and fair dealing with
alleged damages "to be determined by the trier of fact and
such punitive damages as the court determines."  Although
formal discovery is in process, a full evaluation has not
been made of the matter at this point.  Management has
directed that the action be defended as well as having
directed the filing of a counterclaim.

The Company and its subsidiaries, Security National Life
Insurance Company, Greer-Wilson Funeral Home, Inc., Crystal
Rose Funeral Home, and Sunset Funeral Homes, Inc. have been
named as parties in the pending litigation brought by York
Products, Inc. ("York Products") in the Superior Court of
the State of Arizona, Maricopa County.  The litigation
seeks collection of a total sum of $68,660 plus attorneys'
fees and interest.  The Company is presently disputing the
amounts that York Products claims to be due and owing, and
the court has ordered that the matter be submitted to
compulsory non-binding arbitration under the Arizona Rules
of Civil Procedure.

The Company is also a defendant in various other legal
actions arising from the normal conduct of business.
Management believes that none of the actions will have a
material effect on the Company's financial position or
results of operations.

10)    Retirement Plans

The Company and its subsidiaries have a noncontributory
Employee Stock Ownership Plan (ESOP) for all eligible
employees.  Eligible employees are primarily those with
more than one year of service, who work in excess of 1,040
hours per year.  Contributions, which may be in cash or
stock of the Company, are determined annually by the Board
of Directors.  The Company's contributions are allocated to
eligible employees based on the ratio of each eligible
employee's compensation to total compensation for all
eligible employees during each year.  ESOP contribution
expense totaled $45,616, $50,017, and $21,914 for 1997,
1996, and 1995, respectively.  At December 31, 1997 the
ESOP held 601,037 shares of Class A and 1,103,717 shares of
Class C common stock of the Company.  All shares held by
the ESOP have been allocated to the participating employees
and all shares held by the ESOP are considered outstanding
for purposes of computing earnings per share.

The Company has a 401(k) savings plan covering all eligible
employees, as defined above, which includes employer
participation in accordance with the provisions of Section
401(k) of the Internal Revenue Code.  The plan allows


<PAGE>

                   SECURITY NATIONAL FINANCIAL CORPORATION
                              AND SUBSIDIARIES
                  Notes to Consolidated Financial Statements
                 Years Ended December 31, 1997, 1996, and 1995


10)  Retirement Plans (Continued)

participants to make pretax contributions up to the lesser
of 15% of total annual compensation or the statutory limits
(currently $9,240).  The Company may match up to 50% of
each employee's investment in Company stock, up to 5% of
the employee's total annual compensation.  The Company's
match will be Company stock and the amount of the match
will be at the discretion of the Company's Board of
Directors.  All amounts contributed to the plan are
deposited into a trust fund administered by an independent
trustee.  The Company's matching 401(k) contributions for
1997, 1996, and 1995 were approximately $-0-, $50,000,
$21,000, respectively.

11)    Capital Stock

The following table summarizes the activity in shares of
capital stock for the three year period ended December 31,
1997:
<TABLE>
<CAPTION>

                                      Class A             Class C
         <S>                        <C>                  <C>
         Balance at December
            31, 1994                 3,558,406           2,275,045

         Stock Dividends               181,901             113,740
         Conversion of Class C
            to Class A                     150                (745)
         Stock Issued                   78,958               --
                                     ---------           ---------

         Balance at December
            31, 1995                 3,819,415           2,388,040

         Stock Dividends               201,879             105,256
         Conversion of Class C
            to Class A                   1,952              (9,760)
         Stock Issued                   87,463               --
         Stock Split of Class C          --              2,483,536
                                     ---------          ----------
         Balance at December
            31, 1996                 4,110,709           4,967,072

         Stock Dividends               206,344             247,329
         Conversion of Class C
            to Class A                   1,359             (13,590)
         Stock Issued                    8,176               --
                                     ---------          ----------
         Balance at December
            31, 1997                 4,326,588           5,200,811
                                    ==========          ==========
</TABLE>

The Company has two classes of common stock with shares
outstanding, Class A and Class C.  Class C shares vote
share for share with the Class A shares on all matters
except election of one-third of the directors who are
elected solely by the Class A shares, but generally are
entitled to a lower dividend participation rate.  Class C
shares are convertible into Class A shares at any time on
a ten to one ratio.  Also Class A shares can be converted
into Class C shares, but the conversion rights have
numerous restrictions.


<PAGE>

                  SECURITY NATIONAL FINANCIAL CORPORATION
                             AND SUBSIDIARIES
                 Notes to Consolidated Financial Statements
                Years Ended December 31, 1997, 1996, and 1995


11)  Capital Stock (Continued)

On November 7, 1996, the Company amended the Articles of
Incorporation concerning Class C stock as follows:  (i) to
provide for a two-for-one stock split involving only Class
C Common Stock; (ii) to reduce the par value of Class C
Common Stock from $.40 par value to $.20 par value; (iii)
to reduce the exchange rate for converting Class C Common
Stock to Class A Common Stock from five shares to ten
shares of Class C Common Stock for each share of Class A
Common Stock; (iv) to reduce the cash dividends received by
Class C shares from 18% to 9% of the per share cash
dividends received by Class A shares; (v) to reduce the
distributions to Class C Shares in the event of a
liquidation from 18% to 9% of the per share distributions
received by Class A shares; and (vi) to provide for the
issuance of shares of Class C Common Stock under a stock
option plan.

Stockholders of both classes of common stock have received
5% stock dividends in the years 1989 through 1997, as
authorized by the Company's Board of Directors.

The Company has Class B Common Stock of $1.00 par value,
5,000,000 shares authorized, of which none are issued.
Class B shares are non-voting stock except to any proposed
amendment to the Articles of Incorporation which would
affect Class B Common Stock.

<PAGE>

                SECURITY NATIONAL FINANCIAL CORPORATION
                           AND SUBSIDIARIES
               Notes to Consolidated Financial Statements
              Years Ended December 31, 1997, 1996, and 1995
<TABLE>
<CAPTION>


11)  Capital Stock (Continued)

In accordance with SFAS 128, the basic and diluted earnings
per share amounts were calculated as follows:

                                   1997           1996           1995
<S>                            <C>             <C>            <C>
Numerator:
  Net income                   $1,308,941      $1,237,145     $1,551,780

Denominator:
  Denominator for
    basic earnings per
    share--weighted-average
    shares                      3,988,034       3,750,498       3,507,766

  Effect of
    dilutive securities:
    Employee stock
      options                      19,606          23,321          --
    Stock appreciation
      rights                       85,051          81,741          67,859
                                ---------       ---------       ---------
    Dilutive potential
      common shares               104,657         105,062          67,859

    Denominator
      for diluted
      earnings per
      share-adjusted
      weighted-average
      shares and
      assumed
      conversions                4,092,691      3,855,560       3,575,625
                                ==========     ==========      ==========
    Basic earnings
      per share                      $0.33          $0.33           $0.44
                                     =====          =====           =====

    Diluted earnings
      per share                      $0.32          $0.32           $0.43
                                     =====          =====           =====
</TABLE>

There are no dilutive effects on net income for purpose of
this calculation.

12)  Deferred Compensation Plans

In 1987, the Company adopted the 1987 Incentive Stock
Option Plan (the 1987 Plan).  The 1987 Plan provides that
shares of the Class A Common Stock of the Company may be
optioned to certain officers and key employees of the
Company.  The 1987 Plan establishes a Stock Option Plan

<PAGE>

              SECURITY NATIONAL FINANCIAL CORPORATION
                         AND SUBSIDIARIES
             Notes to Consolidated Financial Statements
            Years Ended December 31, 1997, 1996, and 1995


12)  Deferred Compensation Plans (Continued)

Committee which selects the employees to whom the options
will be granted and determines the price of the stock.  The
1987 Plan establishes the minimum purchase price of the
stock at an amount which is not less than 100% of the fair
market value of the stock (110% for employees owning more
than 10% of the total combined voting power of all classes
of stock).

The 1987 Plan provides that if additional shares of Class
A Common Stock are issued pursuant to a stock split or a
stock dividend, the number of shares of Class A Common
Stock then covered by each outstanding option granted
hereunder shall be increased proportionately with no
increase in the total purchase price of the shares then
covered, and the number of shares of Class A Common Stock
reserved for the purpose of the 1987 Plan shall be
increased by the same proportion.  In the event that the
time issued and outstanding are reduced by a combination of
shares, the number of shares of Class A Common Stock then
covered by each outstanding option granted hereunder shall
be reduced proportionately with no reduction in the total
price of the shares then so covered, and the number of
shares of Class A Common Stock reserved for the purposes of
the 1987 Plan shall be reduced by the same proportion.

The 1987 Plan terminated in 1997 and options granted are
non-transferable.  Options granted and outstanding under
the 1987 Plan include Stock Appreciation Rights which
permits the holder of the option to elect to receive cash,
amounting to the difference between the option price and
the fair market value of the stock at the time of the
exercise, or a lesser amount of stock without payment, upon
exercise of the option.

Activity of the 1987 Plan is summarized as follows:
<TABLE>
<CAPTION>

                                 Number               Option
                               of Shares               Price
<S>                            <C>                <C>
Outstanding at
December 31, 1994               176,893           $2.43 - $2.72

  Dividend                        8,845
                                -------
Outstanding at
December 31, 1995               185,738           $2.31 - $2.59

 Dividend                         9,287
 Exercised                     (172,716)
                              ---------
Outstanding at
December 31, 1996                22,309           $2.20 - $2.47

 Granted                        148,000
 Dividend                         7,400
 Exercised                      (22,309)
                               --------
</TABLE>
<PAGE>


                SECURITY NATIONAL FINANCIAL CORPORATION
                           AND SUBSIDIARIES
              Notes to Consolidated Financial Statements
             Years Ended December 31, 1997, 1996, and 1995

<TABLE>
<CAPTION>

12)  Deferred Compensation Plans (Continued)

                                 Number              Option
                               of Shares             Price
<S>                           <C>                  <C>
Outstanding at
December 31, 1997              155,400              $4.29 - $4.71
                              ========
 Exercisable
 at end of year                155,400
                              ========
Available options
 for future grant
 1987 Stock
 Incentive Plan                  -0-
                              ---------
</TABLE>

On June 21, 1993, the Company adopted the Security National
Financial Corporation 1993 Stock Incentive Plan (the "1993
Plan"), which reserved 300,000 shares of Class A Common
Stock for issuance thereunder.  The 1993 Plan allows the
Company to grant options and issue shares as a means of
providing equity incentives to key personnel, giving them
a proprietary interest in the Company and its success and
progress.

The 1993 Plan provides for the grant of options and the
award or sale of stock to officers, directors, and
employees of the Company.  Both "incentive stock options,"
as defined under Section 422A of the Internal Revenue Code
of 1986 (the "Code"), and "non-qualified options" may be
granted pursuant to the 1993 Plan.  Options intended as
incentive stock options may be issued only to employees,
and must meet certain conditions imposed by the Code,
including a requirement that the option exercise price be
not less than the fair market value of the option shares on
the date of grant.  The 1993 Plan provides that the
exercise price for non-qualified options will be not less
than at least 50% of the fair market value of the stock
subject to such option as of the date of grant of such
options, as determined by the Company's Board of Directors.

The options were granted to reward certain officers and key
employees who have been employed by the Company for a
number of years and to help the Company retain these
officers by providing them with an additional incentive to
contribute to the success of the Company.

The 1993 Plan is administered by the Board of Directors or
by a committee designated by the Board.  The 1993 Plan
provides that if the shares of Common Stock shall be
subdivided or combined into a greater or smaller number of
shares or if the Company shall issue any shares of Common
Stock as a stock dividend on its outstanding Common Stock,
the number of shares of Common Stock deliverable upon the
exercise of options shall be increased or decreased
proportionately, and appropriate adjustments shall be made
in the purchase price per share to reflect such
subdivision, combination or stock dividend. No options may
be exercised for a term of more than ten years from the
date of grant.

<PAGE>


               SECURITY NATIONAL FINANCIAL CORPORATION
                          AND SUBSIDIARIES
              Notes to Consolidated Financial Statements
             Years Ended December 31, 1997, 1996, and 1995


12)  Deferred Compensation Plans (Continued)

The 1993 Plan has a term of ten years.  The Board of
Directors may amend or terminate the 1993 Plan at any time,
subject to approval of certain modifications to the 1993
Plan by the shareholders of the Company as may be required
by law or the 1993 Plan.

On November 7, 1996 the Company amended the Articles of
Incorporation as follows:  (i) to increase the number of
shares of Class A Common Stock reserved for issuance under
the plan from 300,000 Class A shares to 600,000 Class A
shares; and (ii) to provide that the stock subject to
options, awards and purchases may include Class C common
stock.

Activity of the 1993 Plan is summarized as follows:
<TABLE>
<CAPTION>

                                  Number                Option
                                 of Shares               Price
<S>                              <C>                <C>
Outstanding at
December 31, 1994                198,200            $2.98 - $4.40
    Dividend                       9,910
                                --------
Outstanding at
December 31, 1995                208,110            $2.84 - $4.19
    Dividend                      13,706
    Granted                       66,000
                                --------
Outstanding at
December 31, 1996                287,816            $2.70 - $4.52
    Cancelled                     (9,450)
    Dividend                      13,918
                                --------
Outstanding at
December 31, 1997                292,284            $2.58 - $4.31
                                ========
Exercisable
at end of year                   292,284
                                ========
Available options
    for future grant
    1993 Stock
    Incentive Plan               375,300
                                ========
</TABLE>
<PAGE>


         SECURITY NATIONAL FINANCIAL CORPORATION
                    AND SUBSIDIARIES
       Notes to Consolidated Financial Statements
      Years Ended December 31, 1997, 1996, and 1995


13)  Statutory-Basis Financial Information

The Company's life insurance subsidiary is domiciled in
Utah and prepares its statutory-basis financial statements
in accordance with accounting practices prescribed or
permitted by the Utah Insurance Department.  "Prescribed"
statutory accounting practices are interspersed throughout
state insurance laws and regulations, the National
Association of Insurance Commissioners ("NAIC") Accounting
Practices and Procedures Manual and a variety of other NAIC
publications.  "Permitted" statutory accounting practices
encompass all accounting practices that are not prescribed;
such practices may differ from state to state, may differ
from company to company within a state, and may change in
the future.

The NAIC currently is in the process of codifying statutory
accounting practices ("Codification").  Codification will
likely change, to some extent, prescribed statutory
accounting practices and may result in changes to the
accounting practices that the Company uses to prepare its
statutory-basis financial statements.  Codification, which
is expected to be approved by the NAIC in 1998, will
require adoption by the various states before it becomes
the prescribed statutory basis of accounting for insurance
companies domesticated within those states.  Accordingly,
before Codification becomes effective for the Company, the
state of Utah must adopt Codification as the prescribed
basis of accounting on which domestic insurers must report
their statutory-basis results to the Utah Insurance
Department.  However, based on current draft guidance,
management believes that the impact of codification will
not be material to the Company's statutory-basis financial
statements.  Statutory net income and statutory
stockholder's equity for the life subsidiary as reported to
state regulatory authorities, is presented below:

<PAGE>
<TABLE>
<CAPTION>


                                  1997             1996         1995
<S>                         <C>                <C>            <C>
Statutory net income
   for the years
   ended December 31        $   712,219        $   694,745    $1,414,246

Statutory
   Stockholder's
   Equity at
    December 31             $11,789,615        $10,020,668    $9,472,696
</TABLE>


Generally, the net assets of the life insurance subsidiary
available for transfer to the Company are limited to the
amounts that the life insurance subsidiary's net assets, as
determined in accordance with statutory accounting
practices, exceed minimum statutory capital requirements;
however, payments of such amounts as dividends are subject
to approval by regulatory authorities.

The Utah Insurance Department imposes minimum risk-based
capital requirements that were developed by the NAIC on
insurance enterprises.  The formulas for determining the
risk-based capital ("RBC") specify various factors that are
applied to financial balances or various levels of activity

<PAGE>


           SECURITY NATIONAL FINANCIAL CORPORATION
                      AND SUBSIDIARIES
          Notes to Consolidated Financial Statements
         Years Ended December 31, 1997, 1996, and 1995


13)  Statutory-Basis Financial Information (Continued)

based on the perceived degree of risk.  Regulatory
compliance is determined by a ratio (the "Ratio") of the
enterprise's regulatory total adjusted capital, as defined
by the NAIC, to its authorized control level, as defined by
the NAIC.  Enterprises below specific trigger points or
ratios are classified within certain levels, each of which
requires specified corrective action.  The life insurance
subsidiary has a Ratio that is greater than 300% of the
first level of regulatory action.

<PAGE>

               SECURITY NATIONAL FINANCIAL CORPORATION
                          AND SUBSIDIARIES
              Notes to Consolidated Financial Statements
            Years Ended December 31, 1997, 1996, and 1995


14)  Business Segment Information

The Company is principally involved in three segments: Life insurance,
cemetery/mortuary operations and mortgage operations.  All intercompany
transactions between the business segments have been eliminated in this
presentation and therefore, the operations for each business segment do not
reflect the interest income/expense from intercompany borrowings.  The
following schedules summarize segment information for the three segments and
corporate activities for 1997, 1996, and 1995:
<TABLE>
<CAPTION>

                                                   1997

                   Life                   Cemetery/
                 Insurance   Corporate    Mortuary    Mortgage   Consolidated
<S>           <C>            <C>        <C>         <C>        <C>
Revenues:
Premium and
   other
   consider-
   ations     $ 6,140,783    $            $           $        $  6,140,783
Net mortuary
   and cemetery
   sales                                   9,230,864              9,230,864
Mortgage fee
   income                                              5,661,867  5,661,867
Net investment
   income       5,856,221      9,834         609,194     664,331  7,139,580
Realized gains
   on investments
   and other
   assets         252,635                                           252,635
Other revenues     13,778      7,044          27,621         450     48,893
               ----------   --------      ----------  ----------  ---------
              $12,263,417  $  16,878      $9,867,679  $6,326,648 $28,474,622

Expenses:
Death and other
  policy
  benefits    $ 3,694,442  $              $           $           $  3,694,442
Increase in
  future
  policy
  benefits      2,974,915                                            2,974,915
Amortization of
  deferred policy
  acquisition costs
  and cost
  of insurance
  acquired      1,132,298                                            1,132,298
General,
   administrative
   and other
   costs        3,819,397    395,880       9,362,215     5,426,426  19,003,918
              -----------  ---------     -----------   ----------- -----------
              $11,621,052  $ 395,880     $ 9,362,215    $5,426,426 $26,805,573
              -----------  ---------     -----------    ---------- ------------
Earnings
 before
 income taxes $  642,365   $(379,002)    $   505,464    $  900,222 $ 1,669,049
             -----------  ----------    ------------   ----------- -----------
Identifiable
 assets      $99,817,217   $ 297,032     $24,336,909    $1,000,721 $125,451,879
             ===========   =========     ===========    ========== ============
</TABLE>
<PAGE>


                        SECURITY NATIONAL FINANCIAL CORPORATION
                                   AND SUBSIDIARIES
                      Notes to Consolidated Financial Statements
                    Years Ended December 31, 1997, 1996, and 1995

14)  Business Segment Information (Continued)
<TABLE>
<CAPTION>

                                    1996


                      Life                  Cemetery/
                    Insurance   Corporate   Mortuary   Mortgage   Consolidated
<S>              <C>            <C>        <C>       <C>         <C>
Revenues:
Premium
 and other
 considerations  $ 5,666,436    $           $         $           $ 5,666,436
Net mortuary
 and cemetery
 sales                                       8,138,010              8,138,010
Mortgage
  fee income                                           8,236,709    8,236,709
Net investment
  income           6,166,585      30,717       655,255   664,457    7,517,014
Realized gains
  on investments
  and other
  assets             289,543                                          289,543
Other revenues        24,363          56        50,570                 74,989
                 -----------   ---------  ----------- ----------- -----------
                 $12,146,927   $  30,773  $ 8,843,835 $ 8,901,166 $29,922,701
Expenses:
Death and other
   policy
   benefits      $ 3,596,138   $          $           $           $ 3,596,138
Increase in
   future policy
   benefits        2,744,326                                        2,744,326
Amortization of
  deferred policy
  acquisition costs
  and cost of
  insurance
  acquired         1,239,918                                        1,239,918
General,
  administrative
  and other costs  3,392,730     953,921    8,449,406   8,169,659  20,965,716
                  ----------   ---------   ----------  ---------- -----------
                 $10,973,112  $  953,921  $ 8,449,406 $ 8,169,659 $28,546,098
                 -----------  ----------  ----------- ----------- -----------
Earnings
  before
  income
  taxes          $ 1,173,815  $ (923,148) $   394,429 $   731,507 $  1,376,603
                 -----------  ----------  ----------- ----------- ------------
Identifiable
 assets          $98,428,230  $  264,395  $23,916,366 $ 2,100,512 $124,709,503
                 ===========  ==========  =========== =========== ============
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                          SECURITY NATIONAL FINANCIAL CORPORATION
                                      AND SUBSIDIARIES
                         Notes to Consolidated Financial Statements
                       Years Ended December 31, 1997, 1996, and 1995

14)  Business Segment Information (Continued)

                                     1995


                     Life                 Cemetery/
                  Insurance   Corporate   Mortuary  Mortgage  Consolidated
<S>              <C>          <C>        <C>        <C>       <C>
Revenues:
Premium and
  other
  considerations $ 5,796,011   $         $          $         $  5,796,011
Net mortuary
  and cemetery
  sales                                   8,238,347              8,238,347
Mortgage
  fee income                                         4,943,103   4,943,103
Net investment
  income           5,630,462     14,518     574,116    460,608   6,679,704
Realized gains
 on investments
  and other
  assets             126,553    206,095                            332,648
Other revenues        38,058      1,021      32,440                 71,519
                 -----------  ---------   ---------  ----------  ---------
                 $11,591,084  $ 221,634 $ 8,844,903 $ 5,403,711 $26,061,332

Expenses:
Death and
  other policy
  benefits       $ 3,778,544  $         $           $            $  3,778,544
Increase in
  future policy
  benefits         2,333,155                                        2,333,155
Amortization of
  deferred policy
  acquisition costs
  and cost
  of insurance
  acquired         1,149,510                                        1,149,510
General,
  administrative
  and other costs  3,446,726    529,678   7,916,262   4,647,993    16,540,659
                 -----------  ---------  ---------- -----------  ------------
                 $10,707,935  $ 529,678 $ 7,916,262 $ 4,647,993  $ 23,801,868
                 -----------  --------- ----------- -----------  ------------
Earnings
  before income
  taxes          $   883,149  $(308,044)$   928,641 $   755,718  $  2,259,464
                 -----------  --------- ----------- -----------  ------------
Identifiable
 assets          $98,384,064  $ 361,161 $24,126,993 $15,340,465  $138,212,683
                 ===========  ========= =========== ===========  ============
</TABLE>

<PAGE>

               SECURITY NATIONAL FINANCIAL CORPORATION
                          AND SUBSIDIARIES
             Notes to Consolidated Financial Statements
           Years Ended December 31, 1997, 1996, and 1995



15)  Disclosure about Fair Value of Financial Instruments

The fair values of investments in fixed maturity and equity
securities along with methods used to estimate such values
are disclosed in Note 2.  The following methods and
assumptions were used by the Company in estimating the
"fair value" disclosures related to other significant
financial instruments:

Cash, Short-term Investments, and Restricted Assets of the
Cemeteries and Mortuaries:  The carrying amounts reported
in the accompanying balance sheets for these financial
instruments approximate their fair values.

Mortgage, Policy, and Collateral Loans:  The fair values
are estimated using interest rates currently being offered
for similar loans to borrowers with similar credit ratings.
Loans with similar characteristics are aggregated for
purposes of the calculations.  The carrying amounts
reported in the accompanying balance sheets for these
financial instruments approximate their fair values.

Investment Contracts:  The fair values for the Company's
liabilities under investment-type insurance contracts
presented are estimated based on the contracts' cash
surrender values and are summarized as follows:

<TABLE>
<CAPTION>
                                          Carrying             Fair
                                           Amount              Value
                                                    (In Thousands)
<S>                                       <C>                <C>
Individual and group
 annuities                                $32,240            $31,402
Supplementary contracts
 without life contingencies                   343                343
 with life contingencies                    1,428              1,428
                                          -------            -------
Total                                     $34,011            $33,173
                                          =======            =======
</TABLE>

The fair values for the Company's insurance contracts other
than investment-type contracts are not required to be
disclosed.  However, the fair values of liabilities under
all insurance contracts are taken into consideration in the
Company's overall management of interest rate risk, such
that the Company's exposure to changing interest rates is
minimized through the matching of investment maturities
with amounts due under insurance contracts.

<PAGE>

<TABLE>
<CAPTION>

                                            Schedule I

                   SECURITY NATIONAL FINANCIAL CORPORATION
                              AND SUBSIDIARIES
                          Summary of Investments
                  Other than Investments in Related Parties



As of December 31, 1997:

                                                             Amount at
                                                               Which
                                                               Shown
                                               Estimated       in the
Type of Investment               Amortized       Fair         Balance
                                   Cost         Value          Sheet
<S>                           <C>            <C>             <C>
Fixed maturity securities
    held to maturity:
Bonds:
    United States
        Government and
        government agencies
        and authorities       $17,212,358     $17,500,035    $17,212,358
    States,
        municipalities and
        political
        subdivisions              216,290         217,950        216,290
    Mortgage backed
        securities              7,124,291       7,124,291      7,124,291
    Corporate securities
        including public
        utilities              25,144,396      26,246,347     25,144,396
Redeemable preferred
        stocks                     87,563          88,576         87,563
                               ----------     -----------    -----------
    Total                      49,784,898      51,177,199     49,784,898
                               ----------     -----------    -----------

Equity securities,
    available for sale:
    Common Stocks:
        Public utilities          266,461        489,892         489,892
        Banks, trusts and
          insurance
          companies                91,725        491,272         491,272
        Industrial,
          miscellaneous
         and all other          3,418,586      3,674,158       3,674,158
    Nonredeemable
        preferred stocks           93,306        176,491         176,491
                               ----------     ----------      ----------
        Total                   3,870,078      4,831,813       4,831,813
                               ----------     ----------      ----------
Mortgage loans on
 real estate                    8,307,237                      8,307,237
Real estate                     7,559,725                      7,559,725
Policy loans                    2,882,711                      2,882,711
Other investments               3,783,088                      3,783,088
                              -----------                    -----------
    Total investments         $76,187,137                    $77,149,472
                              ===========                    ===========
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                                              Schedule II

                    SECURITY NATIONAL FINANCIAL CORPORATION
                            (Parent Company Only)

                               Balance Sheets


                                            December 31,
                                     1997                   1996
<S>                            <C>                     <C>
Assets
Short-term investments         $   283,190             $   278,901

Cash                                28,353                 (10,841)

Investment in subsidiaries
   (equity method)              29,043,712              27,379,166

Receivables:
Receivable from affiliates       1,584,965               1,671,368
Other                              (19,232)                (19,234)
                                ----------              ----------
         Total receivables       1,565,733               1,652,134

Property, plant and
  equipment, at cost,
  net of accumulated
  depreciation of $309,204
  for 1997 and $298,560
  for 1996                           4,721                 15,365

Other assets                        --                        202
                               -----------            -----------
      Total assets             $30,925,709            $29,314,927
                               ===========            ===========
</TABLE>


See accompanying notes to parent company only financial
statements.

<PAGE>

                                  Schedule II Continued)

            SECURITY NATIONAL FINANCIAL CORPORATION
                    (Parent Company Only)

                Balance Sheets (Continued)
<TABLE>
<CAPTION>



                                             December 31,
                                     1997                       1996
<S>                           <C>                       <C>
Liabilities:
Bank loans payable:
   Current installments       $   245,041                $   233,019
   Long-term                    1,976,353                  2,223,317

Notes and contracts payable:
   Current installments           181,319                    153,132
   Long-term                      607,429                    787,473

Advances from affiliated
  companies                     1,781,118                  1,781,118

Accounts payable                   --                          9,934

Other liabilities and
  accrued expenses                489,671                    533,314

Income taxes                      249,848                    125,592
                               ----------                 ----------
  Total liabilities             5,530,779                  5,846,899
                               ----------                 ----------

Stockholders' equity:
Common Stock:
    Class A:  $2 par value,
      authorized 10,000,000
      shares, issued
      4,326,588 shares in
      1997 and 4,110,709
      shares in 1996            8,653,176                  8,221,418
    Class C:  $0.20 par
      value, authorized
      7,500,000 shares,
      issued 5,200,811
      shares in 1997
      and 4,967,072
      shares in 1996            1,040,162                    993,413
                               ----------                 ----------
Total common stock              9,693,338                  9,214,831

Additional paid-in capital      9,133,454                  8,675,386
Unrealized appreciation
    of investments                830,939                    259,915
Retained earnings               7,533,259                  7,118,528
Treasury stock at cost
    (659,992 Class A
    shares and 56,217
    Class C shares in
    1997; 631,576
    Class A shares and
    53,540 Class C shares
    in 1996, held
    by affiliated
    companies)                  (1,796,060)               (1,800,632)
                              ------------             -------------
Total stockholders'
    equity                      25,394,930                23,468,028
                              ------------              ------------
    Total liabilities
          and stockholders'
          equity               $30,925,709              $ 29,314,927
                               ===========              ============
</TABLE>

See accompanying notes to parent company only financial
statements.

<PAGE>
<TABLE>
<CAPTION>

                               Schedule II (Continued)

               SECURITY NATIONAL FINANCIAL CORPORATION
                       (Parent Company Only)

                     Statements of Earnings




                                        Year Ended December 31,
                               1997              1996               1995
<S>                      <C>               <C>              <C>
Revenue:
  Net investment
    income               $   16,878        $   30,717        $   14,518
 Realized gain from
   sale of
   subsidiary                 --                --              206,095
 Fees from
   affiliates               757,567            754,294          765,410
                          ---------         ----------        ---------
     Total revenue          774,445            785,011          986,023
                          ---------         ----------        ---------

Expenses:
  General and
    administrative
    expenses                138,425            644,640          278,581
  Interest expense          260,293            313,032          271,701
                          ---------          ---------         --------
     Total expenses         398,718            957,672          550,282
                          ---------          ---------         --------
Earnings (loss)
  before income
  taxes, and
  earnings of
  subsidiaries              375,727           (172,661)         435,741

Income tax expense         (124,256)           (26,112)         (98,142)

Equity in earnings
  of subsidiaries         1,057,470          1,435,918        1,214,181
                         ----------         ----------       ----------
Net earnings             $1,308,941         $1,237,145       $1,551,780
                         ==========         ==========       ==========
</TABLE>


See accompanying notes to parent company only financial
statements.

<PAGE>
<TABLE>
<CAPTION>


                               Schedule II (Continued)

                  SECURITY NATIONAL FINANCIAL CORPORATION
                          (Parent Company Only)
                        Statements of Cash Flow


                                              Year Ended December 31,
                                    1997            1996             1995
<S>                             <C>              <C>             <C>
Cash flows from
  operating activities:
  Net earnings                  $1,308,941       $1,237,145      $1,551,780
Adjustments to
  reconcile net earnings
  to net cash provided
  by (used in)
  operating activities:
  Depreciation and
    amortization                    10,644           24,953          11,014
  Provision for loss on
    accounts receivable              --               --            161,528
  Undistributed earnings
    of affiliates               (1,057,470)      (1,435,918)     (1,214,181)
  Provision for
    income taxes                   124,254          (99,514)         98,142
  Change in assets and
    liabilities:
  Accounts receivable               86,403          103,006        (327,115)
    Other assets                       202              (74)            (74)
    Accounts payable and
      accrued expenses              31,046          431,735          (6,593)
    Other liabilities              (43,732)          (7,134)        138,282
Net cash provided by
   operating activities            460,288          254,199         412,783

Cash flows from investing
   activities:
   Purchase of short-term
    investments                    (96,039)        (212,051)          --
   Proceeds from sale of
    short term investments          91,750          208,000         385,555
   Investment in
    subsidiaries                   (75,000)         121,002      (2,533,021)
   Purchase of property
    plant & equipment                --               --               (517)
Net cash (used in)
    provided by
    investing activities           (79,289)         116,951      (2,147,983)

Cash flows from financing
   activities:
   Proceeds from advances
     from affiliates                 --               --            833,182
   Payments of notes and
     contracts payable            (386,799)        (410,271)       (170,743)
   Purchase of treasury
    stock                            --              (1,000)          --
   Sale of treasury stock           44,994            --
Proceeds from borrowings
     on notes and
   contracts payable                 --               --          1,063,000
                               -----------     ------------    ------------
Net cash (used in)
   provided by
   financing activities           (341,805)        (411,271)      1,725,439
                               -----------     ------------     -----------
Net change in cash                  39,194          (40,121)         (9,761)
Cash at beginning of year          (10,841)          29,280          39,041
                               -----------     ------------     -----------
Cash at end of year             $   28,353      $   (10,841)    $    29,280
                                ==========      ===========     ===========

</TABLE>

See accompanying notes to parent company only financial
statements.


<PAGE>
<TABLE>
<CAPTION>

                                 Schedule II (Continued)

                     SECURITY NATIONAL FINANCIAL CORPORATION
                 Notes to Parent Company Only Financial Statements


1) Bank Loans Payable

      Bank loans payable are summarized as follows:

                                                   December 31,
                                            1997                1996
      <S>                             <C>                  <C>
      Bank prime rate (8.5% at
         December 31, 1997)
         plus 1/2%  note payable
         in monthly installments
         of $36,420 including
         principal and interest
         collateralized by 15,000
         shares of Security
         National Life stock due
         December 1999.                 $2,221,394          $2,456,336

         Less current installments         245,041             233,019
                                        ----------          ----------
         Bank loans, excluding
             current installments       $1,976,353          $2,223,317
                                        ==========          ==========
</TABLE>

<TABLE>
<CAPTION>

2)  Notes and Contracts Payable

      Notes and contracts are summarized as follows:

                                                  December 31,
                                           1997                 1996
      <S>                               <C>                 <C>
      10 year notes due April 16, 1999,
         1% over U.S. Treasury 6 month
         bill rate                      $ 28,187            $ 28,187

      Due to former stockholders of
         Civil Service Employees Life
         Insurance Company resulting from
         the acquisition of such entity.
         7% note payable in seven annual
         principal payments of $151,857
         due December 2003               759,286             911,143

      Other                                1,275               1,275
                                        --------             -------

      Total notes and contracts          788,748             940,605
      Less current installments          181,319             153,132
                                        --------            --------
      Notes and contracts,
         excluding current
         installments                   $607,429            $787,473
                                        ========            ========
</TABLE>

The following tabulation shows the combined maturities of bank
loans payable and notes and contracts payable:

<TABLE>
<CAPTION>

              <S>                 <C>
              1998                $  426,360
              1999                 2,128,210
              2000                   151,857
              2001                   151,857
              2002                   151,858
              Thereafter                --
                                  ----------
              Total               $3,010,142
                                  ==========
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                                  Schedule II (Continued)

                     SECURITY NATIONAL FINANCIAL CORPORATION
               Notes to Parent Company Only Financial Statements


3)  Advances from Affiliated Companies
                                                  December 31,
                                             1997           1996
    <S>                                   <C>            <C>
    Non-interest bearing advances
      from affiliates:
    Cemetery and Mortuary
      subsidiary                          $1,126,527     $1,126,527
    Mortgage subsidiary                      200,000        200,000
      Life Insurance subsidiary              454,591        454,591
                                          ----------     ----------
                                          $1,781,118     $1,781,118
                                          ==========     ==========

</TABLE>

4)  Dividends

No dividends have been paid to the registrant for each of the
last three years by any subsidiaries.

<PAGE>
<TABLE>
<CAPTION>
                                                Schedule IV

                    SECURITY NATIONAL FINANCIAL CORPORATION
                               AND SUBSIDIARIES

                                 Reinsurance


                                                                Percentage
                                          Ceded to      Assumed  of Amount
                   Direct     Other       from Other     Net     Assumed
                   Amount    Companies    Companies     Amount   to Net
                  -------   ----------   -----------   -------   -----------
<S>               <C>        <C>          <C>        <C>         <C>
1997
Life Insurance
 in force ($000)  $ 602,652  $ 61,629     $ 46,254   $  587,277    7.88%
                  =========  ========     ========   ==========   =====
Premiums:
Life Insurance   $5,575,024  $237,830     $276,086   $5,613,280    4.92%
Accident and
 Health Insurance   426,529    25,367        6,953      408,115    1.70%
                 ----------  -------      --------   ----------   -----
   Total
    premiums     $6,001,553  $263,197     $283,039   $6,021,395    4.70%
                 ==========  ========     ========   ==========    ====
1996
Life Insurance
 in force ($000) $  493,705  $ 73,822     $ 52,508   $  472,391   11.12%
                 ==========  ========     ========   ==========  ======
Premiums:
Life Insurance   $5,135,007  $315,967     $310,378   $5,129,418    6.05%
Accident and
 Health Insurance   473,807    41,895        6,920      438,832    1.58%
                 ----------  --------     --------   ----------   -----
   Total
     premiums    $5,608,814  $357,862     $317,298   $5,568,250    5.70%
                 ==========  ========     ========   ==========    ====
1995
Life Insurance
 in force ($000) $  471,771  $ 80,262     $ 58,917   $  450,426   13.08%
                 ==========  ========     ========   ==========   =====
Premiums:
Life Insurance   $5,004,568  $122,399     $317,312   $5,199,481    6.10%
Accident and
 Health Insurance   566,097    34,585       11,558     543,070     2.13%
                 ----------  --------     --------  ----------     ----
   Total
   premiums      $5,570,665  $156,984     $328,870  $5,742,551     5.73%
                 ==========  ========     ========  ==========     ====
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                                                     Schedule V
               SECURITY NATIONAL FINANCIAL CORPORATION
                          AND SUBSIDIARIES
                 Valuation and Qualifying Accounts

                      Balance      Additions        Deductions,     Balance
                        at          Charged          Disposals        at
                    Beginning       to Costs           and           End of
                     of Year     and Expenses       Write-offs       Year

<S>                 <C>           <C>              <C>              <C>
For the Year Ended December 31, 1997
------------------------------------
Accumulated
  depreciation
  on real estate   $1,868,187     $300,058          $(118,899)    $2,049,346

Accumulated
  depreciation on
  property, plant
  and equipment     4,218,591      515,919             (6,474)     4,728,036

Allowance for
  doubtful accounts 1,862,599      129,502           (313,011)     1,679,090


For the Year Ended December 31, 1996
------------------------------------
Accumulated
 depreciation
 on real estate    $1,560,107     $308,080        $    --         $1,868,187

Accumulated
 depreciation on
 property, plant
 and equipment      3,313,032      905,559             --          4,218,591

Allowance for
 doubtful accounts  2,311,450      197,239         (646,090)       1,862,599


For the Year Ended December 31, 1995
------------------------------------
Accumulated
  depreciation
  on real estate   $1,262,853     $297,254        $     --        $1,560,107

Accumulated
  depreciation on
  property, plant
  and equipment     2,925,906      422,649          (35,523)       3,313,032

Allowance for
 doubtful accounts  1,923,808      548,327         (160,685)       2,311,450

</TABLE>

<PAGE>


Item 9.  Changes In and Disagreements with Accountants on
Accounting and Financial Disclosure

None
                    PART III

Item 10. Directors and Executive Officers

The Company's Board of Directors consist of eight persons,
five of whom are not employees of the Company.  All the
Directors of the Company are also directors of its
subsidiaries.  There is no family relationship between or
among any of the directors, except that Scott M. Quist is
the son of George R. Quist.  The following table sets forth
certain information with respect to the directors and
executive officers of the Company.

<TABLE>
<CAPTION>

                                                          Position(s)
     Name                    Age       Director Since  with the Company
--------------------       -------    ---------------  ------------------
<S>                          <C>       <S>              <S>
George R.
  Quist(2)                    77       October 1979     Chairman of the
                                                        Board, President
                                                        and Chief
                                                        Executive
                                                        Officer
William C.
  Sargent(2)                  69       February 1980    Senior Vice President,
                                                        Secretary and
                                                        Director

Scott M.
  Quist(1)                    44       May 1986         First Vice
                                                        President,
                                                        General Counsel,
                                                        Treasurer and
                                                        Director
Charles L.
  Crittenden(1)               78       October 1979     Director

Sherman B.
  Lowe(1)                     83       October 1979     Director

R.A.F.
  McCormick(2)                84       October 1979     Director

H. Craig
  Moody(2)                    44       September 1995   Director

Nathan H.
  Wagstaff(2)                 77       October 1979     Director

</TABLE>

(1)  These directors were elected by the holders of Class
A Common Stock voting as a class by themselves.
(2)  These directors were elected by the holders of Class
A and Class C Common Stock voting together.

Committees of the Board of Directors include an executive
committee, on which Messrs. George Quist, Scott Quist,
Sargent and Moody serve; an audit committee, on which
Messrs. Crittenden, Lowe, Moody, and Wagstaff serve; and a
compensation committee, on which Messrs. Crittenden, Lowe
and George Quist serve.

<PAGE>

The following is a description of the business experience
of each of the directors.

George R. Quist, age 77, has been Chairman of the Board,
President and Chief Executive Officer of the Company since
October 1979.  From 1946 to 1960, he was an agent, District
Manager and Associate General Agent for various insurance
companies.  From 1960 to 1964, he was Executive Vice
President and Treasurer of Pacific Guardian Life Insurance
Company.  Mr. Quist also served from 1981 to 1982 as the
President of The National Association of Life Companies, a
trade association of 642 life insurance companies, and from
1982 to 1983 as its Chairman of the Board.

William C. Sargent, age 69, has been Senior Vice President
of the Company since 1980, Secretary since October 1993,
and a director since February 1980.  Prior to that time, he
was employed by Security National as a salesman and agency
superintendent.

Scott M. Quist, age 44, has been General Counsel of the
Company since 1982, First Vice President since December
1990, Treasurer since October 1993, and a director since
May 1986.  From 1980 to 1982, Mr. Quist was a tax
specialist with Peat, Marwick, Main, & Co., in Dallas,
Texas.  Since 1986, he has been a director of  The National
Association of Life Companies, a trade association of 642
insurance companies and its Treasurer until its merger with
the American Council of Life Companies.  Mr. Quist is
currently a member of the Board of Governors of the Forum
500 Section (representing small insurance companies) of the
American Council of Life Insurance.  Mr. Quist has also
been a director of Key Bank of Utah since November 1993.

Charles L. Crittenden, age 78, has been a director of the
Company since October 1979.  Mr. Crittenden has been sole
stockholder of Crittenden Paint & Glass Company since 1958.
He is also an owner of Crittenden Enterprises, a real
estate development company and Chairman of the Board of
Linco, Inc.

Sherman B. Lowe, age 83, has been a director of the Company
since October 1979.  Mr. Lowe was formerly President and
Manager of Lowe's Pharmacy for over 30 years.  He is now
retired.  He is an owner of Burton-Lowe Ranches, a general
partnership.

R.A.F. McCormick, age 84, has been a director of the
Company since October 1979.  He is a past Vice President of
Sales for Cloverclub Foods.  He is now retired.

H. Craig Moody, age 44, has been a director of the Company
since September 1995.  Mr. Moody is owner of Moody &
Associates, a political consulting and real estate company.
He is a former Speaker and House Majority Leader of the
House of Representatives of the State of Utah.

Nathan H. Wagstaff, age 77, has been a director of the
Company since October, 1979.  He has served as Chairman of
the Board of Directors and President of Nate Wagstaff
Company, Inc., since 1975.  He has also served as President
and General Manager of Western States Distribution Company,
Highland Petroleum Company, Inc., and Holiday Oil Company.
Mr. Wagstaff is the sole stockholder of Nate Wagstaff
Company, Inc., an oil distribution company.

<PAGE>

Executive Officers

The following table sets forth certain information with
respect to the executive officers of the Company (the
business biographies set forth above):
<TABLE>
<CAPTION>

     Name              Age           Title
----------------      -----       -------------
<S>                    <C>       <C>
George R.
  Quist(1)              77       Chairman of the Board, President
                                 and Chief Executive Officer
William C.
  Sargent               69       Senior Vice President and
                                 Secretary
Scott M.
  Quist(1)              44       First Vice President, General
                                 Counsel and Treasurer
</TABLE>


(1)George R. Quist is the father of Scott M. Quist.

The Board of Directors of the Company has a written
procedure which requires disclosure to the Board of any
material interest or any affiliation on the part of any of
its officers, directors or employees which is in conflict
or may be in conflict with the interests of the Company.

No director, officer or 5% stockholder of the Company or
its subsidiaries, or any affiliate thereof has had any
transactions with the Company or its subsidiaries during
1997 or 1996 other than employment arrangements or as
described above.

None of the Directors are board members of any other
company having a class of equity securities registered
under the Securities Exchange Act of 1934, as amended, or
any company registered as an investment company under the
Investment Company Act of 1940, as amended, with the
exception of Scott M. Quist, who is a director of Key Bank
of Utah.  All directors of the Company hold office until
the next annual meeting of stockholders, until their
successors have been elected and qualified, or until their
earlier resignation or removal.

<PAGE>


Item 11.  Executive Officer Compensation

The following table sets forth, for each of the last three fiscal years,
the compensation received by George R. Quist, the Company's President and
Chief Executive Officer, and all other executive officers (collectively,
the "Named Executive Officers") at December 31, 1997 whose salary and bonus
for all services in all capacities exceed $100,000 for the fiscal year ended
December 31, 1997.

<TABLE>
<CAPTION>

                                   Summary Compensation Table

                                                         Annual Compensation
                                                                   Other
                                                                   Annual
Name and                                                           Compen-
Principal Position          Year        Salary($)       Bonus($)  sation($)(2)
---------------------
<S>                       <C>          <C>            <C>           <C>
George R. Quist (1)
  Chairman of the Board,   1997         $118,508       $16,833      $2,400
   President and Chief     1996          109,127        15,303       2,400
  Executive Officer        1995          104,469        15,303       2,400

William C. Sargent
  Senior Vice President,   1997          108,685        16,500       4,500
  Secretary and            1996          103,915        15,000       4,500
  Director                 1995           77,538        11,725       4,500

Scott M. Quist (1)
 First Vice President,     1997          103,215        17,875       7,200
  General Counsel          1996           96,192        16,250       7,200
  Treasurer and Director   1995           84,871        13,000       7,200

</TABLE>

  (1)     George R. Quist is the father of Scott M. Quist.


<PAGE>

Item 11.  Executive Officer Compensation

<TABLE>
<CAPTION>

                                      Summary Compensation Table

                                        Long-Term Compensation


                                                                       All
                                                                      Other
                              Restricted    Securities     Long-Term  Compen-
Name and                        Stock       Underlying     Incentive   sation
Principal Position      Year   Awards($)   Options/SARs(#)  Payout($) ($)(3)
------------------    -------  ---------   ---------------  --------- --------
<S>                      <C>    <C>         <C>             <C>       <C>
George R. Quist (1)
  Chairman of the Board,  1997    $0         50,000          $0       $11,094
   President and Chief    1996     0              0           0         8,218
  Executive Officer       1995     0              0           0         5,937

William C. Sargent
  Senior Vice President,  1997     0          45,000          0         5,224
  Secretary and           1996     0               0          0         4,320
  Director                1995     0               0          0         2,100

Scott M. Quist (1)
 First Vice President,    1997     0          35,000          0         6,490
  General Counsel         1996     0               0          0         4,497
  Treasurer and Director  1995     0               0          0         2,206

</TABLE>

  (1)  George R. Quist is the father of Scott M. Quist.

  (2)  The amounts indicated under "Other Annual Compensation"
  for 1997 consist of payments related to the operation of
  automobiles by the Named Executive Officers.  However, such
  payments do not include the furnishing of an automobile by
  the Company to George R. Quist, William C. Sargent and
  Scott M. Quist nor the payment of insurance and property
  taxes with respect to the automobiles operated by the Named
  Executive Officers.

  (3)     The amounts indicated under "All Other Compensation"
for 1997 consist of (a) amounts contributed by the Company
into a trust for the benefit of the Named Executive
Officers under the Employee Stock Ownership Plan (for
fiscal 1997, such amounts were George R. Quist, $3,412;
William C. Sargent, $3,756; and Scott M. Quist, $3,633);
(b) matching contributions made by the Company pursuant to
the 401(k) Retirement Savings Plan in which all matching
contributions are invested in the Company's Class A Common
Stock (for fiscal 1997, such amounts were George R. Quist,
$2,400; William C. Sargent, $831; and Scott M. Quist,
$2,220); (c) insurance premiums paid by the Company with
respect to a group life insurance plan for the benefit of
the Named Executive Officers (for fiscal 1997, $1,911 was
paid for all Named Executive Officers as a group, or $637
each for George R. Quist, William C. Sargent and Scott M.
Quist); and (d) life insurance premiums paid by the Company
for the benefit of the family of Mr. George R. Quist
($4,645).

The following table sets forth information concerning the
exercise of options to acquire shares of the Company's
Common Stock by the Named Executive Officers during the
fiscal year ended December 31, 1997, as well as the
aggregate number and value of unexercised options held by
the Named Executive Officers on December 31, 1997.

Aggregated Option/SAR Exercised in Last Fiscal Year and
Fiscal Year-End Option/SAR Values

<TABLE>
<CAPTION>

                                           Number of
                                          Securities
                                          Underlying         Value of
                                         Unexercised       Unexercised
                                         Options/SARs     In-the-Money
                                              at           Options/SARs at
                                         December 31,        December 31,
                                           1997(#)              1997

                Shares
              Acquired
                 on
               Exercise        Value    Exercis-   Unexer-   Exercis- Unexer-
Name             (#)         Realized    able      cisable    able    cisable
----------   -----------    ----------  ---------  --------  ------- --------
<S>             <C>            <C>       <C>        <C>      <C>       <c<
George R.
   Quist         0              $0       205,885      0      $116,381   $0
William C.
   Sargent       0              $0       123,306      0      $109,258   $0
Scott M.
   Quist         0              $0        36,750      0      $    984   $0
</TABLE>


Retirement Plans

George R. Quist, who has been Chairman, President and Chief Executive Officer
of the Company since 1979, has a Deferred Compensation Agreement, dated
December 8, 1988, with the Company (the "Compensation Agreement").  This
Compensation Agreement provides upon Mr. Quist's retirement the Company shall
pay him $50,000 per year as an annual retirement benefit for a period of 10
years from the date of retirement; and upon his death, the remainder of such
annual payments shall be payable to his designated beneficiary.

<PAGE>

The Compensation Agreement further provides that the Board of Directors may
elect to pay the entire amount of deferred compensation in the form of a single
lump-sum payment or other installment payments, so long as the term of such
payments do not exceed 10 years.  However, in the event Mr. Quist's employment
with the Company is terminated for any reason other than retirement, death or
disability, the entire deferred compensation shall be forfeited by him.

William C. Sargent, who has been Senior Vice President of the Company since
1980, has a Deferred Compensation Agreement dated April 15, 1994, with the
Company (the "Compensation Agreement").  This Compensation Agreement
provides upon Mr. Sargent's retirement the Company shall pay him $50,000 per
year as an annual retirement benefit for a period of 10 years from the date of
retirement; and upon his death, the remainder of such annual payments shall be
payable to his designated beneficiary.

The Compensation Agreement further provides that the Board of Directors may
elect to pay the entire amount of deferred compensation in the form of a single
lump-sum payment or other installment or disability, the entire deferred
compensation shall be forfeited by him.

Employment Agreement

The Company maintains an employment agreement with Scott M. Quist.  The
agreement, which has a five year term, was entered into in 1996, and renewed in
1997.  Under the terms of the agreement, Mr. Quist is to devote his full time
to the Company serving as its Treasurer, First Vice President, and General
Counsel at not less than his current salary and benefits, and to include
$500,000 of life insurance protection.  In the event of disability, Mr. Quist's
salary would be continued for up to 5 years at 50% of its current level.
In the event of a sale or merger of the Company, and Mr. Quist were not
retained in his current position, the Company would be obligated to continue
Mr. Quist's current compensation and benefits for seven years following the
merger or sale.

Director Compensation

Directors of the Company (but not including directors who are employees) are
paid a director's fee of $8,400 per year by the Company for their services and
are reimbursed for their expenses in attending board and committee meetings.
No additional fees are paid by the Company for committee participation or
special assignments.

Employee 401(k) Retirement Savings Plan

In 1995, the Company's Board of Directors adopted a 401(k) Retirement Savings
Plan.  Under the terms of the 401(k) plan, effective as of January 1, 1995, the
Company may make discretionary employer matching contributions to its
employees who choose to participate in the plan.  The plan allows the board to
determine the amount of the contribution at the end of each year.  For the years
1996 and 1995 the board adopted a contribution formula specifying that such
discretionary employer matching contributions would equal 50% of the
participating employee's contribution to the plan up to a maximum discretionary
employee contribution of 5% of a participating employee's compensation, as
defined by the plan.  For the fiscal year 1997 there was not a matching
contribution.
<PAGE>
All persons who have completed at least one year's service with
the Company and satisfy other plan requirements are eligible to participate in
the 401(k) plan.  All Company matching contributions are invested in the
Company's Class A Common Stock.  The Company's matching contributions for 1996
and 1995 were approximately $50,000 and $21,000, respectively.  The trustees
under the 401(k) plan are Messrs. Sherman B. Lowe, Scott M. Quist and William
C. Sargent.

Employee Stock Ownership Plan

Effective January 1, 1980, the Company adopted an employee stock ownership plan
(the "Ownership Plan") for the benefit of career employees of the Company and
its subsidiaries.  The following is a description of the Ownership Plan, and is
qualified in its entirety by the Ownership Plan, a copy of which is available
for inspection at the Company's offices.

Under the Ownership Plan, the Company has discretionary power to make
contributions on behalf of all eligible employees into a trust created under
the Ownership Plan.  Employees become eligible to participate in the Ownership
Plan when they have attained the age of 19 and have completed one year of
service (a twelve-month period in which the Employee completes at least 1,040
hours of service).  The Company's contributions under the Ownership Plan are
allocated to eligible employees on the same ratio that each eligible employee's
compensation bears to total compensation for all eligible employees during each
year.  To date, the Ownership Plan has approximately 98 participants and had
contributions payable to the Plan in 1997 of $45,616.  Benefits under the
Ownership Plan vest as follows: 20% after the third year of eligible service
by an employee, an additional 20% in the fourth, fifth, sixth and seventh years
of eligible service by an employee.

Benefits under the Ownership Plan will be paid out in one lump sum or in
installments in the event the employee becomes disabled, reaches the age of 65,
or is terminated by the Company and demonstrates financial hardship.  The
Ownership Plan Committee, however, retains discretion to determine the final
method of payment.  Finally, the Company reserves the right to amend or
terminate the Ownership Plan at any time.  The trustees of the trust fund under
the Ownership Plan are Messrs. R.A.F. McCormick, George R. Quist, and William
C. Sargent, all directors of the Company.

1987 Incentive Stock Option Plan

In 1987, the Company adopted the 1987 Incentive Stock Option Plan (the 1987
Plan).  The 1987 Plan provides that shares of the Class A Common Stock of the
Company may be optioned to certain officers and key employees of the Company.
The Plan establishes a Stock Option Plan Committee which selects the employees
to whom the options will be granted and determines the price of the stock.  The
Plan establishes the minimum purchase price of the stock at an amount which is
not less than 100% of the fair market value of the stock (110% for employees
owning more than 10% of the total combined voting power of all classes of
stock).

The Plan provides that if additional shares of Class A Common Stock are issued
pursuant to a stock split or a stock dividend, the number of shares of Class A
Common Stock then covered by each outstanding option granted hereunder shall
be increased proportionately with no increase in the total purchase price of
the shares then so covered, and the number of shares of Class A Common Stock
reserved for the purpose of the Plan shall be increased by the same
proportion.  In the event that the shares of Class A Common Stock of the
Company from time to time issued and outstanding are reduced by a combination
of shares, the number of shares of Class A Common Stock then covered by each
outstanding option
<PAGE>
granted hereunder shall be reduced proportionately with no
reduction in the total price of the shares then so covered, and the number
of shares of Class A Common Stock reserved for the purposes of the Plan shall
be reduced by the same proportion.

The Plan terminates ten years from its effective date and options granted are
non-transferable.  The Right which permits the holder of the option to elect to
receive cash, amounting to the difference between the option price and the fair
market value of the stock at the time of the exercise, or a lesser amount of
stock without payment, upon exercise of the option.

1993 Stock Option Plan

On June 21, 1993, the Company adopted the Security National Financial
Corporation 1993 Stock Incentive Plan (the "1993 Plan"), which reserves shares
of Class A Common Stock for issuance thereunder.  The 1993 Plan was approved at
the annual meeting of the stockholders held on June 21, 1993.  The 1993 Plan
allows the Company to grant options and issue shares as a means of providing
equity incentives to key personnel, giving them a proprietary interest in the
Company and its success and progress.

The 1993 Plan provides for the grant of options and the award or sale of stock
to officers, directors, and employees of the Company.  Both "incentive stock
options," as defined under Section 422A of the Internal Revenue Code of 1986
(the "Code"), and "non-qualified options" may be granted pursuant to the 1993
Plan.  The exercise prices for the options granted are equal to or greater than
the fair market value of the stock subject to such options as of the date of
grant, as determined by the Company's Board of Directors.  The options granted
under the 1993 Plan, were to reward certain officers and key employees who have
been employed by the Company for a number of years and to help the Company
retain these officers by providing them with an additional incentive to
contribute to the success of the Company.

The 1993 Plan is to be administered by the Board of Directors or by a committee
designated by the Board.  The terms of options granted or stock awards or sales
effected under the 1993 Plan are to be determined by the Board of Directors or
its committee.  The Plan provides that if the shares of Common Stock shall be
subdivided or combined into a greater or smaller number of shares or if the
Company shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, the number of shares of Common Stock deliverable
upon the exercise of Options shall be increased or decreased proportionately,
and appropriate adjustments shall be made in the purchase price per share to
reflect such subdivision, combination or stock dividend.  No options may be
exercised for a term of more than ten years from the date of grant.

Options intended as incentive stock options may be issued only to employees, and
must meet certain conditions imposed by the code, including a requirement that
the option exercise price be no less than the fair market value of the option
shares on the date of grant.  The 1993 Plan provides that the exercise price
for non-qualified options will be not less than at least 50% of the fair market
value of the stock subject to such option as of the date of grant of such
options, as determined by the Company's Board of Directors.

The 1993 Plan has a term of ten years.  The Board of Directors may amend or
terminate the 1993 Plan at any time, subject to approval of certain
modifications to the 1993 Plan by the shareholders of the Company as may be
required by law
<PAGE>
or the 1993 Plan.  On November 7, 1996 the Company amended
the Articles of Incorporation as follows:  (i) to increase the number of
shares of Class A Common Stock reserved for issuance under the Plan from
300,000 Class A shares to 600,000 Class A shares; and (ii) to provide that
the stock subject to options, awards and purchases may include Class C
common stock.

<PAGE>

Item 12 - Security Ownership of Certain Beneficial Owners and Management

The following table sets forth security ownership information of the Company's
Class A and Class C Common Stock as of March 20, 1998, (i) for persons
who own beneficially more than 5% of the Company's outstanding Class A or
Class C Common Stock, (ii) each director of the Company, and (iii) for all
executive officers and directors of the Company as a group.
<TABLE>
<CAPTION>



                                       Class A                Class C
                                      Common Stock          Common Stock
                                    --------------        ---------------
                                Amount                   Amount
Name and Address of          Beneficially   Percent   Beneficially  Percent
Beneficial Owner                Owned       of Class     Owned      of Class
-----------------------      ------------  ---------  ------------  --------
<S>                            <C>          <C>         <C>         <C>
George R. Quist (1) (2)
4491 Wander Lane
Salt Lake City, Utah 84124     344,021       9.4        2,584,367    50.2

Employee Stock Ownership Plan (4)
5300 S. 360 W., Suite 310
Salt Lake City, Utah 84123     589,569      16.1        1,103,717    21.5

William C. Sargent (1) (2) (3)
4974 Holladay Blvd.
Salt Lake City, Utah 84117      78,103       2.1          272,365     5.3

Scott M. Quist (3)
7 Wanderwood Way
Sandy, Utah 84092               80,958       2.2           54,227     1.1

Charles L. Crittenden
248 - 24th Street
Ogden, Utah 84404                 -0-        *            170,296     3.3

Sherman B. Lowe (3)
2197 South 2100 East
Salt Lake City, Utah 84109      20,243       *            186,110     3.6

R.A.F. McCormick (1)
400 East Crestwood Road
Kaysville, Utah 84037            9,708       *             97,098     1.9
</TABLE>


<PAGE>
<TABLE>
<CAPTION>

Item 12 - Security Ownership of Certain Beneficial Owners and Management

                                            Class A
                                          and Class C
                                         Common Stock
                                Amount
Name and Address of          Beneficially               Percent
Beneficial Owner                Owned                   of Class
-----------------------     -------------             -----------
<S>                           <C>                        <C>
George R. Quist (1) (2)
4491 Wander Lane
Salt Lake City, Utah 84124     2,928,388                  33.2

Employee Stock Ownership Plan (4)
5300 S. 360 W., Suite 310
Salt Lake City, Utah 84123     1,693,286                  19.2

William C. Sargent (1) (2) (3)
4974 Holladay Blvd.
Salt Lake City, Utah 84117       350,468                   4.0

Scott M. Quist (3)
7 Wanderwood Way
Sandy, Utah 84092                135,185                   1.5

Charles L. Crittenden
248 - 24th Street
Ogden, Utah 84404                170,296                   1.9

Sherman B. Lowe (3)
2197 South 2100 East
Salt Lake City, Utah 84109       206,353                   2.3

R.A.F. McCormick (1)
400 East Crestwood Road
Kaysville, Utah 84037            106,806                   1.2

</TABLE>
<PAGE>

<TABLE>
<CAPTION>


                                      Class A                  Class C
                                    Common Stock             Common Stock
                             Amount                    Amount
Name and Address of       Beneficially     Percent  Beneficially    Percent
Beneficial Owner             Owned        of Class    Owned        of Class
---------------------     -------------  ----------  ------------  ---------
<S>                          <C>           <C>         <C>           <C>
H. Craig Moody
1782 East Faunsdale Dr.
Sandy, Utah 84092               117          *          -0-            *

Nathan H. Wagstaff
2131 King Street
Salt Lake City, Utah 84109    24,248         *        182,594         3.5

Associated Investors (5)
5300 S. 360 W. Suite 310
Salt Lake City, Utah 84123    73,637        2.0       465,930          9.1

All directors and executive
officers (8 persons)         557,398       15.2     3,547,057         68.9
</TABLE>

 *   Less than one percent

<TABLE>
<CAPTION>


                                               Class A
                                             and Class C
                                             Common Stock
                                       Amount
Name and Address of                 Beneficially         Percent
Beneficial Owner                      Owned              of Class
--------------------------        --------------       -----------
<S>                                 <C>                  <C>
H. Craig Moody
1782 East Faunsdale Dr.
Sandy, Utah 84092                    117                    *

Nathan H. Wagstaff
2131 King Street
Salt Lake City, Utah 84109       206,842                   2.3

Associated Investors (5)
5300 S. 360 W. Suite 310
Salt Lake City, Utah 84123       539,567                   6.1

All directors and executive
officers (8 persons)           4,104,455                  46.5

</TABLE>


(1) Does not include 589,569 shares of Class A Common Stock and 1,103,717
shares of Class C Common Stock owned by the Company's Employee Stock
Ownership Plan (ESOP), of which George R. Quist, William C. Sargent and R.A.F.
McCormick are the trustees and accordingly, exercise shared voting and
investment powers with respect to such shares.

(2) Does not include 73,637 shares of Class A Common Stock and 465,930
shares of Class C Common Stock owned by Associated Investors, a Utah general
partnership, of which these individuals are the managing partners and,
accordingly, exercise shared voting and investment powers with respect to such
shares.

(3) Does not include 29,399 shares of Class A Common Stock owned by the
Company's 401(k) Retirement Savings Plan, of which William C. Sargent, Scott M.
Quist and Sherman B. Lowe are the trustees and accordingly, exercise shared
voting and investment powers with respect to such shares.

(4) The trustees of the Employee Stock Ownership Plan (ESOP) are George R.
Quist, William C. Sargent and R.A.F. McCormick, who exercise shared voting and
investment powers.

(5) The managing partners of Associated Investors are George R. Quist and
William C. Sargent, who exercise shared voting and investment powers.

  The Company's officers and directors, as a group, own beneficially
approximately 46.5% of the outstanding shares of the Company's Class A and
Class C Common Stock.

Item 13.  Certain Relationships and Related Transactions

The Company's Board of Directors has a written procedure which requires
disclosure to the Board of any material interest or any affiliation on the part
of any of its officers, directors or employees which is in conflict or may be
in conflict with the interests of the Company.

No director, officer or 5% stockholder of the Company or its subsidiaries, or
any affiliate thereof, has engaged in any business transactions with the
Company or its subsidiaries during 1996 or 1997 other than as described herein.

                                 PART IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K

(a)(1)(2) Financial Statements and Schedules

          See "Index to Consolidated Financial Statements and Supplemental
Schedules" under Item 8 above.

(a)(3)  Exhibits

        The following Exhibits are filed herewith pursuant to Rule 601 of
        Regulation S-K or are incorporated by reference to previous filings.


<PAGE>
<TABLE>
<CAPTION>


Exhibit

     Table No                               Document

(a)(3)  Exhibits:
     <S>       <C>
     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

               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.

       (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.

21.            Subsidiaries of the Registrant

27.            Financial Data Schedule

     (b)       Reports on Form 8-K:

                     No reports on Form 8-K were filed by the Company during the fourth
                     quarter of 1997.
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Company has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

                           SECURITY NATIONAL FINANCIAL CORPORATION


Dated:  March 31, 1998                    By: George R. Quist,
                                              --------------------------------
                                              Chairman of the Board, President
                                              and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934 as amended,
this report has been signed by the following persons in counterpart on behalf
of the Company on the dates indicated:

SIGNATURE                         TITLE                       DATE
<S>                              <S>                        <S>
George R. Quist                  Chairman of the            March 31, 1998
-----------------------          Board, President and
                                 Chief Executive Officer
                                 and (Principal Executive
                                 Officer)

Scott M. Quist                  First Vice President,       March 31, 1998
-----------------------         General Counsel and
                                Treasurer and Director
                                (Principal Financial and
                                Accounting Officer)

William C. Sargent             Senior Vice President,       March 31, 1998
-----------------------        Secretary and Director


Charles L. Crittenden          Director                     March 31, 1998
----------------------


Sherman B. Lowe                Director                     March 31, 1998
----------------------


R.A.F. McCormick               Director                     March 31, 1998
----------------------

H. Craig Moody                 Director                     March 31, 1998
----------------------

Nathan H. Wagstaff             Director                     March 31, 1998
----------------------

</TABLE>


<PAGE>


                  SECURITIES AND EXCHANGE COMMISSION
                        Washington, D.C. 20549
                             FORM 10-K
                    Year Ended December 31, 1997

              SECURITY NATIONAL FINANCIAL CORPORATION
                    Commission   File No. 0-9341

                         E X H I B I T S
<PAGE>


                        Exhibit Index



Exhibit No.                  Document Name
10.

     G.        Deferred Compensation Agreement with William C. Sargent

     P.        Employment Agreement with Scott M. Quist

21.            Subsidiaries of the Registrant

27.            Financial Data Schedule
<PAGE>

                         EXHIBIT 10 (G)

      Deferred Compensation Agreement with William C. Sargent

<PAGE>

                        EXHIBIT 10 (P)

              Employment Agreement with Scott M. Quist.

<PAGE>

                         EXHIBIT 21

               Subsidiaries of Security National
                    Financial Corporation
               as of March 31, 1998

<PAGE>


Exhibit 21


Subsidiaries of Security National Financial Corporation
(as of March 31, 1998)

               Security National Life Insurance Company

               Security National Mortgage Company

               Memorial Estates, Inc.

               Memorial Mortuary

               Paradise Chapel Funeral Home, Inc.

               California Memorial Estates, Inc.

               Cottonwood Mortuary, Inc.

               Deseret Memorial, Inc.

               Holladay Cottonwood Memorial Foundation

               Holladay Memorial Park, Inc.

               Camelback Sunset Funeral Home, Inc.

               Greer-Wilson Funeral Home, Inc.

               Crystal Rose Funeral Home, Inc.

<PAGE>

                                Exhibit 27

                          Financial Data Schedule

<PAGE>

              NON-QUALIFIED DEFINED BENEFIT DEFERRED COMPENSATION PLAN



THIS AGREEMENT is effective the 15th day of April, 1994, by and between Security
National Financial Corp., a corporation organized under the laws of the State
of Utah (hereinafter referred to as "Corporation"), and William C. Sargent of
4974 Holladay Blvd., Salt Lake City, Utah, (hereinafter referred to as
"Employee").

WHEREAS, the Corporation currently employs the Employee, and the Employee serves
the Corporation in such capacity as the Board of Directors of the Corporation
may designate from time to time; and

WHEREAS, the Employee currently devotes all of his time, attention, skill and
efforts to the performance of duties on behalf of the Corporation; and

WHEREAS, in consideration of services rendered on behalf of the Corporation,
as well as in providing an inducement for ongoing valuable services until
retirement, the Corporation has agreed to provide a deferred compensation
benefit to the Employee;

NOW THEREFORE, in consideration of the Agreement and mutual promises hereinafter
contained, the parties hereto agree as follows:

                              ARTICLE I

DEFINITIONS.  The following definitions shall govern this Agreement:

       1.   AGE means the Employee's age at the nearest birthday, except as
otherwise specifically provided.

       2.   ANNIVERSARY DATE means the date of this Agreement and each
anniversary thereof.

       3.   BENEFICIARY means the person designated in writing to receive any
benefits upon the death of the Employee.  If no such designation is made or if
the designated person is not living at the death of the Employee, the
Beneficiary shall be the deceased Employee's spouse, if living, otherwise the
children born of the marriage of the Employee and his spouse, and any children
legally adopted by them, if living, otherwise the personal representative,
executors, or administrators of Employee.


       4.   COMPENSATION means the remuneration received by the Employee as
basic salary or wages, plus overtime pay, bonus payments, commissions, and any
other form of irregular or non-recurring cash compensation received by an
Employee, as certified by the Corporation.

       5.   DEFERRED COMPENSATION ACCOUNT means the liability account
maintained by the Employer in order to recognize and account for the benefits
payable under this Agreement.  This account shall reflect the accrual of
benefits pursuant to the Deferred Compensation Accounting policies adopted at
the sole discretion of the Board of Directors.

<PAGE>
       6.   DISABILITY shall be deemed to occur on the date the Board of
Directors of the Corporation determines that the Employee, because of a physical
or mental disability, will be unable to perform the duties of his customary
position of employment (or is unable to engage in any substantial gainful
activity) for an indefinite period which the Board of Directors considers
will be of long continued duration.  The Board of Directors may require the
Employee to submit to a physical examination in order to confirm disability.

       7.   EFFECTIVE DATE means the date of this Agreement, unless the
Corporation specifies otherwise.

       8.   EMPLOYER means the Corporation.  In the case of a group of
Employers which constitute a controlled group of Corporations (as defined in
Section 414(b) of the Internal Revenue Code as modified) or which constitutes
trades or businesses which are under common control (as defined in Section
414(c) of the Internal Revenue Code as modified), all such employers shall
be considered a single Employer.

       9.   NORMAL RETIREMENT AGE means the earlier or later of age 70 or a
retirement age specified by Board of Directors resolution.  Such Board of
Directors resolution shall make specific reference to this Agreement,
including the date hereof.

                                  ARTICLE II

RETIREMENT BENEFITS.  The Employer shall be entitled to receive an annual
retirement benefit commencing one year from the date of his Retirement in an
amount equal to one and one-fourth percent 1 1/4%) of four million dollars
($4,000,000.00) of annual life insurance premium paid to the Company.  The
benefit shall be payable annually for ten years.

                                  ARTICLE III

ACCRUAL OF BENEFITS.  The Corporation shall accrue the projected benefits
payable under this Plan in a separate account on its books identified as
Deferred Compensation Account.  The Employer may use any reasonable
accounting policy in determining the method of this accrual.

DEFERRED COMPENSATION ACCOUNT.  The Deferred Compensation Account
established hereunder shall be segregated from other accounts on the books and
records of the Corporation as a contingent liability of the Corporation to the
Employee.

                                   ARTICLE IV

GENERAL CREDITOR.  The Employee shall be regarded as a general creditor of the
Corporation with respect to any rights derived by the Employee from the
existence of this Agreement or the existence or amount of the Deferred
Compensation Account.

ASSETS.  Title to and beneficial ownership of any assets, whether cash,
investments, life insurance policies, or other assets which the Corporation
may earmark to pay the contingent deferred compensation hereunder, shall at
all times remain in the Corporation.  The Employee and his Beneficiary shall
not have any property interest whatsoever in any specific assets of the
Corporation.

<PAGE>

                            ARTICLE V

PAYMENT OF DEFERRED COMPENSATION TO THE EMPLOYEE.  The benefits to be paid
as Deferred Compensation to the Employee (unless forfeited by the
occurrence of any of the events of forfeiture specified in Article VI) are
as follows:

       A.      Upon termination of the Employee's employment by the Corporation
at or after Normal Retirement Age, as determined by a resolution of the
Board of Directors, the Corporation shall pay to him in ten annual
installments an amount equal to one and one-fourth percent (1 1/4%) of four
million dollars ($4,000,000.00) of life insurance premiums received by the
Company per year.  If the Employee should die on or after the date of Normal
Retirement Age and before the ten annual payments are made, the unpaid
balance will continue to be paid in installments for the unexpired portion of
such ten-year period to the designated Beneficiary in the same manner as set
forth above.

       B.      In the event that the Employee's employment shall be terminated
by reason of death or disability before reaching the date of Normal
Retirement Age, and while in the employ of the Corporation, then the
Corporation shall make ten annual payments to the Employee (in the event of
disability) or the designated Beneficiary (in the event of death) in the
same manner and to the same extent as provided above as if the Employee had
retired on the date of death or disability.

       C.      In the event that the Employee's employment shall be terminated
for any other reason than retirement (at or after Normal Retirement Age) as
determined in a resolution by the Board of Directors, death or disability,
then the entire Deferred Compensation Account established hereunder shall be
forfeited by the Employee.

PURCHASE OF ANNUITY.  Any amounts payable to the Employee hereunder shall
be deemed to have been paid if the Corporation applies the entire Deferred
Compensation Account to the purchase of an immediate or deferred annuity
contract, on the sole life of the Employee, or jointly on the lives of the
Employee and the designated Beneficiary.

LUMP SUM  The Board of Directors may, by resolution specifically referring
to this Agreement and the date hereof, provide for the payment of the entire
Deferred Compensation Account hereunder in the form of a single, lump-sum
payment, or any other schedule of installment payments, as long as the term
of such payments shall not exceed ten years.

                                  ARTICLE VI

FORFEITURE PROVISIONS.  All rights to any deferred compensation payments,
pursuant to this Agreement, including the payment of any unpaid installments,
shall be immediately forfeited if any of the following events occur:

       1.   The Employer-Employee relationship between the Employee and the
Corporation is terminated at the behest of the Corporation or upon the mutual
agreement thereof between the Employee and the Corporation (other than
retirement).

       2.   The Employee resigns against the wishes of the Corporation or its
Board of Directors.

       3.   The Employee engages in any act which, in the opinion of the Board
of Directors, is contrary to the best interests of the Corporation, including
fraud, embezzlement, non-productivity, disloyalty, etc.  The judgment of the
Board of Directors, as expressed by a majority vote, shall be final as to
the determination of the nature of any acts performed by the Employee which
are subject to this Article.  The Board of Directors, in its sole discretion,
may interpret and decide upon the nature of such acts.

       4.   During retirement years, the Employee refuses to provide advice or
counsel to the Corporation when reasonably requested to do so and when
reasonably able to do so.

                                 ARTICLE VII

LIABILITY OF EMPLOYER.  Nothing in this Agreement shall constitute the creation
of a trust or other fiduciary relationship between the Corporation and the
Employee or between the Corporation and the Beneficiary or any other person.
 The Corporation shall not be considered a trustee by reason of this Agreement.

                                 ARTICLE VIII

ASSIGNMENT.  No rights under this Agreement may be assigned, transferred,
pledged or encumbered by the Employee or the Beneficiary except by will or
by the intestacy laws or other laws of descent and distribution of the State
of Utah.  This Agreement may be assigned by the Corporation only upon the
following events:

       1.   The Corporation or its assets are purchased by another Corporation
or are merged into the assets of another Corporation.

       2.   Prior written consent of the Employee.

                                  ARTICLE IX

RETIREMENT.  Employee agrees that upon the date of retirement he shall assign
to the Corporation all personal insurance compensation for renewals and over
rights on agents and any other compensation other than that provided above
to the Corporation.  The Corporation agrees to provide prior to or at
retirement a $100,000.00 Ordinary Life Insurance Policy on Employee's life
with Employee to exercise all rights therein as owner with the right to
designate a beneficiary or beneficiaries.  Employee agrees that Corporation
may at any time after the date of this Agreement convert the present term
life insurance on Employee to a permanent insurance policy.

                                   ARTICLE X

AGREEMENT BINDING.  This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective next of kin, successors,
assigns, heirs, personal representatives, executors, administrators, and
legatees.  The Corporation shall not merge or consolidate with any other
Corporation or reorganize unless and until such succeeding and continuing
Corporation agrees to assume and discharge the obligations of the
orporation under this Agreement.  Upon such assumption, the term
"Corporation" as used in this Agreement shall be deemed to refer to such
successor Corporation.  This Agreement shall not be modified or amended
except by a writing signed by both parties and approved by the Board of
Directors with specific reference to this Agreement and the date hereof.

                             ARTICLE XI

ENTIRE AGREEMENT.  This document constitutes the entire Agreement between the
parties.  This Agreement may only be modified, altered, or amended by prior
written approval and consent of the parties hereto, except those provisions
which may be amended solely by Board of Directors resolution as described in
this Agreement.

<PAGE>

                                ARTICLE XII

NO GUARANTEE OF EMPLOYMENT.  Nothing in this Agreement shall be construed
as guaranteeing future employment to the Employee.  The Employee continues to
be an Employee of the Corporation solely at the will of the Corporation
notwithstanding this Agreement.

                                ARTICLE XIII

NOT "COMPENSATION" FOR OTHER PURPOSES.  Any deferred compensation
payable under this Agreement (or actuarial or the net present value of any such
payments) shall not be deemed salary or other compensation to the Employee
for purposes of any qualified retirement plans maintained by the Corporation
or for purposes of any other fringe benefit obligations of the Corporation.

                                ARTICLE XIV

CLAIMS SUBMISSION AND REVIEW PROCEDURE.  In the event that any claim
for benefits, which must initially be submitted in writing to the Board of
Directors of the Corporation, is denied (in whole or in part) hereunder,
the claimant shall receive from the Corporation notice in writing, written
in a manner calculated to be understood by the claimant, setting forth the
specific reasons for denial, with specific reference to pertinent provisions
of this Agreement.  The interpretations and construction hereof by the Board
of Directors shall be binding and conclusive on all persons and for all
purposes.  No member of the Board of Directors shall be liable to any person
for any action taken hereunder except those actions undertaken with lack of
good faith.

This Agreement shall be construed in accordance with and governed by the laws
of the State of Utah.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
   day of         , 1994.

                                           SECURITY NATIONAL
                                           FINANCIAL CORPORATION




                                           George R. Quist
                                           --------------------------
ATTEST:                                    George R. Quist, President




William C. Sargent
-------------------------------
William C. Sargent, Secretary



Witness:                                                    EMPLOYEE:




William C. Sargent
<PAGE>

                               EMPLOYMENT AGREEMENT


THIS EMPLOYMENT AGREEMENT made and entered into as of the 15th day of
April, 1994, by and between SECURITY NATIONAL FINANCIAL CORPORATION,
a Utah corporation (the "Company"), having its principal place of business at
5300 South 360 West, Third Floor, Salt Lake City, Utah 84123, and SCOTT M.
QUIST, residing at 7 Wanderwood Way, Salt Lake City, Utah (hereinafter
called "Quist").

                               WITNESSETH:

 In consideration of the mutual covenants herein contained, the parties agree as
follows:

  1.   EMPLOYMENT IN EXECUTIVE CAPACITY  The Company hereby agrees
to employ Quist as First Vice President, General Legal Counsel and Treasurer of
the Company and all its subsidiaries for a five (5) year term commencing on
April 15, 1995, and terminating on April 14, 1999.

  2.   EMPLOYEE AGREES TO DEVOTE FULL TIME  Quist agrees to such employment
and agrees to devote his full time and attention to the performance of his
duties hereunder which shall include such additional duties as may be
assigned to him from time to time by the Board of Directors and/or the
President of the Company.

  3.   EMPLOYEE TO BE OFFICER  During the term of this Agreement and each
renewal thereof, it is agreed that Quist shall be elected as the First Vice
President, General Legal Counsel and Treasurer of the Company.

  4.   COMPENSATION  In consideration of the services to be rendered by Quist as
an officer of the Company, the Company agrees to pay Quist and he agrees to
accept compensation at no less than his current rates of compensation
including benefits.  It is agreed that on each yearly anniversary date of
this Employment Agreement, the compensation being paid to Quist shall be
reviewed by the Board of Directors and adjusted by the Board of Directors as
they see fit, but in no event shall compensation be less than that provided for
in this Agreement.  Quist shall be compensated and be entitled to
reimbursement for any and all expenses incurred by him in the performance of
his duties.

  5.   DISABILITY  In the event Quist is unable to perform the duties provided
for hereunder because of illness or an accident, then Quist shall be entitled
to one-half (1/2) of the compensation provided for hereunder for a term of
five (5) years from the date of the commencement of said illness or accident.

  6.   PENSION PLAN  The Company agrees to provide an ESOP or 401K Plan or
similar arrangement for Quist and to make a contribution to the plan on behalf
of Quist.

  7.   INSURANCE  The Company agrees to maintain a group term life insurance
policy in the amount of not less than $200,000.00 on the life of Quist, who
shall have the right to designate the beneficiaries and the owner or owners
of that policy.  It is agreed that all premiums for his policy shall be paid
by the Company.  Also, the Company agrees to maintain a Whole Life Insurance
Policy in the amount of $100,000.00 on the life of Quist, who shall have the
right to designate the beneficiaries and the owner or owners of that policy.
It is agreed that all premiums for this policy shall be paid by the Company.
The Company agrees to purchase an accident and sickness policy with benefits
of $1,000.00 per week in the event of disability for Quist.  The Company agrees
to purchase a group hospitalization policy for Quist and his family with
like or similar benefits to those at the present time.  It is agreed that
all premiums for these policies shall be paid by the Company.

  8.   AUTOMOBILE  The Company agrees to furnish Quist with an automobile
allowance of Five Hundred Dollars ($500.00) per month or an automobile equal in
amount to Five Hundred Dollars ($500.00) per month.

  9.   MERGER OR SALE  In the event the business conducted by the Company is
acquired by another entity through acquisition of assets, merger or otherwise
and as a consequence Quist is unable to continue his employment at the same
salary, terms and conditions, then and in that event, the Company agrees to pay
Quist full salary plus all benefits for a term of seven (7) years from the
date of his termination.  In the event Quist is able to negotiate an
Employment Agreement with a successor entity that is equal to or more
favorable than this Agreement, then this provision shall be void.

  10.  TERMINATION  This Agreement shall expire at the end of the term set out
above, or sooner in the event of default of either party, after notice in
writing of said default and failure to remedy the default within 15 days of
receipt of the notice.

  11.  MODIFICATION  The terms of this Agreement shall not be altered, amended
or modified except in writing signed by a duly authorized officer of the
Company and Quist.

  12.  PAROL AGREEMENTS  This Agreement contains the entire contract between
the parties, and any representations that may have heretofore been made by
either party to the other are void.  Neither party has relied on such prior
representations in entering into this Agreement.

  13.  NOTICES  Any notices required to be given hereunder shall be deemed
officially given if sent by certified mail to the above-mentioned addresses
or to such other addresses as either party may hereafter designate by notice
given in the same manner.

  This Agreement supersedes all prior understandings and agreements between the
parties and may not be changed or terminated orally, but only by a writing
signed by the parties hereto.

  IN WITNESS WHEREOF, the parties have executed this Employment Agreement
as of the day and year first above written.

ATTEST:                               SECURITY NATIONAL
                                      FINANCIAL CORPORATION



                                      George R. Quist
                                      --------------------------
                                      George R. Quist, President




                                       Scott M. Quist
                                       --------------------------
                                       Scott M. Quist