----

----

| UTAH                                                                | 87-0345941                                |
|---------------------------------------------------------------------|-------------------------------------------|
| (State      or other jurisdiction of incorporation or organization) | (I.R.S.      Employer Identification No.) |

| 5300      South 360 West, Suite 250 Salt Lake City, Utah       | 84123               |
|----------------------------------------------------------------|---------------------|
| (Address      of principal executive offices)                  | (Zip      Code)     |
|                                                           |                |
| Registrant’s      telephone number, including area code: | (801)      264-1060 |

| Title      of Each Class                   | Name      of Each Exchange on Which Registered |
|--------------------------------------------|------------------------------------------------|
| Class      A Common Stock, $2.00 Par Value | Nasdaq      National Market                    |
| Class      C Common Stock, $0.20 Par Value | None                                           |

----

----

----

----

----

----

|                                                                          |   | 2008   |      |      | 2007   |   |      | 2006            |   |   | 2005      |            |   | 2004   |      |
|-------------------------------------------------------------------------------|--------|--------|-----------|-----------|--------|--------|-----------|-----------------|--------|--------|-----------|-----------------|--------|--------|-----------|
| Life      Insurance Policy/Cert.  Count      as      of December 31 |   |   | 415,656   |  (5) |   |   | 405,224   |  (4)  |   |   | 401,441   |            |   |   | 413,753   |  (2)(3)  |   |   | 357,767 |  (1) |
| Insurance      in force as of  December      31 (omitted      000)       |   | $      | 2,454,409 |  (5) |   | $      | 2,434,733 |  (4)       |   | $      | 2,620,694 |            |   | $      | 3,216,946 |  (2)(3) |   | $ | 2,914,135 |  (1) |
| Premiums      Collected (omitted      000)                                    |   | $      | 36,063    |  (4) |   | $      | 32,173    |            |   | $      | 31,619    |  (3)  |   | $      | 27,275    |  (2) |   | $ | 30,560 |  (1) |

|  |        (1) | Includes      the purchase of Paramount Security Life Insurance Company, now known as      Security National Life Insurance Company of Louisiana, on March 16,      2004. |
|--|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  |        (2) | Includes      the termination of reinsurance assumed with Guaranty Income Life Insurance      Company, effective January 1, 2005. |
|--|-----------------|-----------------------------------------------------------------------------------------------------------------------------------|

|  |        (3) | Includes      the purchase of Memorial Insurance Company of America on December 29,      2005. |
|--|-----------------|------------------------------------------------------------------------------------------------|

|  |        (4) | Includes      the purchase of Capital Reserve Life Insurance Company on December 17,      2007. |
|--|-----------------|-------------------------------------------------------------------------------------------------|

|  |        (5) | Includes      the purchase of Southern Security Life Insurance Company on December 18,      2008. |
|--|-----------------|---------------------------------------------------------------------------------------------------|

| Age      Nearest | Non-Medical                 |
|------------------|-----------------------------|
| Birthday         | Limits                      |
| 0-50             | $75,000                     |
| 51-up            | Medical      information    |
|             | required      (APS or exam) |

----

|                                                     |   | 2008   |   |         | 2007   |   |   | 2006      |   |   | 2005  |      |   | 2004   |   |
|----------------------------------------------------------|--------|--------|--------|--------------|--------|--------|--------|-----------|--------|--------|-------|-----------|--------|--------|--------|
| Annuities      Policy/Cert. Count      as of December 31 |   |   | 11,411 |  (3)    |   |   | 11,175 |  (2) |   |   | 8,475 |      |   |   | 8,904  |  (1) |   |   | 7,365 |   |
| Deposits      Collected (omitted 000)                    |   | $      | 8,959  |  (2)(3) |   | $      | 4,080  |      |   | $      | 3,977 |  (1) |   | $      | 2,416  |   |   | $ | 1,972 |   |

|  |        (1) | Includes      the purchase of Memorial Insurance Company of America on December 29,      2005. |
|--|-----------------|------------------------------------------------------------------------------------------------|

|  |        (2) | Includes      the purchase of Capital Reserve Life Insurance Company on December 17,      2007. |
|--|-----------------|-------------------------------------------------------------------------------------------------|

|  |        (3) | Includes      the purchase of Southern Security Life Insurance Company on December 18,      2008. |
|--|-----------------|---------------------------------------------------------------------------------------------------|

----

|                                                               |   | 2008   |   |   | 2007   |   |   | 2006   |   |   | 2005   |   |   | 2004   |   |
|--------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Accident      and Health Policy/Cert. Count      as of December 31 |   |   | 14,060 |   |   |   | 14,845 |   |   |   | 15,340 |   |   |   | 14,934 |   |   |   | 15,778 |   |
| Premiums      Collected (omitted 000)                              |   | $      | 232    |   |   | $      | 257    |   |   | $      | 274    |   |   | $      | 285    |   |   | $ | 308 |   |

----

----

----

----

----

----

----

|                                       |                         |             | Approximate |
|--------------------------------------------|------------------------------|------------------|-------------|
|                                       |                         | Owned            | Square      |
| Location                                   | Function                     | Leased           | Footage     |
| 5300      South 360 West                   | Corporate      Headquarters  | Owned      (1)   | 27,200      |
| Salt      Lake City, Utah                  |                         |             |        |
|                                       |                         |             |        |
| 634      West Main Street                  | Insurance      Operations    | Owned            | 3,000       |
| Blytheville,      Arkansas                 |                         |             |        |
|                                       |                         |             |        |
| 755      Rinehart Road                     | Mortgage      Sales          | Owned      (2)   | 3,500       |
| Lake      Mary, Florida                    |                         |             |        |
|                                       |                         |             |        |
| 3935      I-55 South, Frontage Road        | Insurance      Operations    | Owned      (3)   | 12,000      |
| Jackson,      Mississippi                  |                         |             |        |
|                                       |                         |             |        |
| 175      Jester Parkway                    | Fast      Funding Operations | Leased      (4)  | 5,000       |
| Rainbow      City, Alabama                 |                         |             |        |
|                                       |                         |             |        |
| 410      North 44th      Street, Suite 190 | Mortgage      Sales          | Leased      (5)  | 1,800       |
| Phoenix,      Arizona                      |                         |             |        |
|                                       |                         |             |        |
| 4634      Town Center Blvd., Suite 314     | Mortgage      Sales          | Leased      (6)  | 600         |
| Eldorado      Hills, California            |                         |             |        |
|                                       |                         |             |        |
| 12150      Tributary Point Dr., Suite 160  | Mortgage      Sales          | Leased      (7)  | 2,000       |
| Gold      River, California                |                         |             |        |
|                                       |                         |             |        |
| 16835      West Bernardo Drive, Suite 150  | Mortgage      Sales          | Leased      (8)  | 1,300       |
| San      Diego, California                 |                         |             |        |
|                                       |                         |             |        |
| 27433      Tourney Road, Suites 130, 220   | Mortgage      Sales          | Leased      (9)  | 2,500       |
| Santa      Clarita, California             |                         |             |        |
|                                       |                         |             |        |
| 550      West Cienega, Suite H             | Mortgage      Sales          | Leased      (10) | 2,600       |
| San      Dimas, California                 |                         |             |        |
|                                       |                         |             |        |
| 2441      West SR 426, Suite 1051          | Mortgage      Sales          | Leased      (11) | 900         |
| Oviedo,      Florida                       |                         |             |        |

----

|                                           |                      |             | Approximate |
|------------------------------------------------|---------------------------|------------------|-------------|
|                                           |                      | Owned            | Square      |
| Location                                       | Function                  | Leased           | Footage     |
| 8950      Dr. MLK St. N., Suite 103            | Mortgage      Sales       | Leased      (12) | 3,500       |
| St.      Petersburg, Florida                   |                      |             |        |
|                                           |                      |             |        |
| 970      No. Kalaheo, Suite A-102              | Mortgage      Sales       | Leased      (13) | 1,800       |
| Kailua,      Hawaii                            |                      |             |        |
|                                           |                      |             |        |
| 45      South Park Blvd., Suite 45             | Mortgage      Sales       | Leased      (14) | 4,800       |
| Greenwood,      Indiana                        |                      |             |        |
|                                           |                      |             |        |
| 6900      College Blvd., Suite 950             | Mortgage      Sales       | Leased      (15) | 1,900       |
| Overland      Park, Kansas                     |                      |             |        |
|                                           |                      |             |        |
| 2500      Regency Parkway                      | Mortgage      Sales       | Leased      (16) | 500         |
| Cary,      North Carolina                      |                      |             |        |
|                                           |                      |             |        |
| 4045      NW 64th      Street, Suite 500       | Mortgage      Sales       | Leased      (17) | 3,500       |
| Oklahoma      City, Oklahoma                   |                      |             |        |
|                                           |                      |             |        |
| 999      Southwest Disk Drive, Suite 104       | Mortgage      Sales       | Leased      (18) | 2,600       |
| Bend,      Oregon                              |                      |             |        |
|                                           |                      |             |        |
| 4800      SW Griffith Drive, Suite 250         | Mortgage      Sales       | Leased      (19) | 2,700       |
| Beaverton,      Oregon                         |                      |             |        |
|                                           |                      |             |        |
| 6805      Capital of Texas Highway, Suite 315  | Mortgage      Sales       | Leased      (20) | 2,300       |
| Austin,      Texas                             |                      |             |        |
|                                           |                      |             |        |
| 12750      Merit Drive, Suite 1212             | Mortgage      Sales       | Leased      (21) | 2,600       |
| Dallas,      Texas                             |                      |             |        |
|                                           |                      |             |        |
| 5353      W. Sam Houston Parkway N., Suite 170 | Mortgage      Sales       | Leased      (22) | 5,400       |
| Houston,      Texas                            |                      |             |        |
|                                           |                      |             |        |
| 613      Northwest Loop 410, Suite 685         | Mortgage      Sales       | Leased      (23) | 2,300       |
| San      Antonio, Texas                        |                      |             |        |
|                                           |                      |             |        |
| 6955      and 6975 South Union Park,           | Mortgage      Sales       | Leased      (24) |  7,000 |
| Suites      100 and 150                        |                      |             |        |
| Midvale,      Utah                             |                      |             |        |
|                                           |                      |             |        |
| 5247      Greenpine Drive                      | Insurance      Operations | Owned      (25)  | 9,100       |
| Murray,      Utah                              |                      |             |        |
|                                           |                      |             |        |
| 5251      Green Street, Suite 350              | Mortgage      Sales       | Owned      (26)  | 5,800       |
| Salt      Lake City, Utah                      |                      |             |        |
|                                           |                      |             |        |
| 6740      South 1300 East, Suite 100           | Mortgage      Sales       | Leased      (27) | 3,200       |
| Salt      Lake City, Utah                      |                      |             |        |

----

|                                     |                      |             | Approximate |
|------------------------------------------|---------------------------|------------------|-------------|
|                                     |                      | Owned            | Square      |
| Location                                 | Function                  | Leased           | Footage     |
| 970      East Murray-Holladay Rd.,       | Mortgage      Sales       | Leased      (28) | 6,400       |
| Suite      603                           |                      |             |        |
| Salt      Lake City, Utah                |                      |             |        |
|                                     |                      |             |        |
| 474      West 800 North, Suite 102       | Mortgage      Sales       | Leased      (29) | 2,000       |
| Orem,      Utah                          |                      |             |        |
|                                     |                      |             |        |
| 1173      South 250 West, Suite 107B     | Mortgage      Sales       | Leased      (30) | 200         |
| St.      George, Utah                    |                      |             |        |
|                                     |                      |             |        |
| 1244      North Main Street, Suite 203   | Mortgage      Sales       | Leased      (31) | 1,200       |
| Tooele,      Utah                        |                      |             |        |
|                                     |                      |             |        |
| 3500-188th      Street, S.W. Suite 275   | Mortgage      Sales       | Leased      (32) | 1,000       |
| Lynnwood,      Washington                |                      |             |        |
|                                     |                      |             |        |
| 501      7th      Street North, Suite 10 | Insurance      Operations | Leased      (33) | 1,200       |
| Columbus,      Mississippi               |                      |             |        |

|   | (1) | The      Company leases an additional 3,000 square feet of the facility to      unrelated third parties for approximately $47,500 per year, under leases      expiring at various dates after2008. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | The      Company leases an additional 9,100 square feet of the facility to      unrelated third parties for approximately $196,200 per year, under leases      expiring at various dates after2008. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | The      building is located on 104 undevelopedacres. |
|--------|-----|-------------------------------------------------------|

|   | (4) | The      Company leases this facility for $14,400 per year. The lease expires in      July 2010. |
|--------|-----|--------------------------------------------------------------------------------------------------|

|   | (5) | The      Company leases this facility for $42,500 per year. The lease expires in      October 2009 |
|--------|-----|----------------------------------------------------------------------------------------------------|

|   | (6) | The      Company leases this facility for $28,000 per year. The lease expires in      July 2009 |
|--------|-----|-------------------------------------------------------------------------------------------------|

|   | (7) | The      Company leases this facility for $49,900 per year. The lease expires in      June 2009 |
|--------|-----|-------------------------------------------------------------------------------------------------|

|   | (8) | The      Company leases this facility for $64,700 per year. The lease expires in      December 2011. |
|--------|-----|------------------------------------------------------------------------------------------------------|

|   | (9)  | The      Company leases this facility for $106,300 per year. The lease expires in      February 2012.                                                                                                           |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (10) | The      Company leases this facility for $30,200 per year. The lease expires in      February 2011.                                                                                                            |
|   | (11) | The      Company leases this facility for $16,700 per year. The lease expires in      June 2009.                                                                                                                |
|   | (12) | The      Company leases this facility for $67,000 per year. The lease expires in      March 2011.                                                                                                               |
|   | (13) | The      Company leases this facility for $43,000 per year. The lease expires in      February 2011.                                                                                                            |
|   | (14) | The      Company leases this facility for $68,700 per year, but subleases      approximately half for $30,000 per year. The lease expires in April      2012.                                                   |
|   | (15) | The      Company leases this facility for $39,100 per year. The lease expires in      January 2010.                                                                                                             |
|   | (16) | The      Company leases this facility for $30,000 per year. The lease expires in      March 2009.                                                                                                               |
|   | (17) | The      Company leases this facility for $49,700 per year. The lease expires in      March 2010.                                                                                                               |
|   | (18) | The      Company leases this facility for $40,900 per year. The lease expires in      January 2012.                                                                                                             |
|   | (19) | The      Company leases this facility for $45,600 per year. The lease expires in      May 2009.                                                                                                                 |
|   | (20) | The      Company leases this facility for $48,900 per year. The lease expires in      September 2011.                                                                                                           |
|   | (21) | The      Company leases this facility for $43,100 per year. The lease expires in      January 2009.                                                                                                             |
|   | (22) | The      Company leases this facility for $64,300 per year. The lease expires in      April 2013.                                                                                                               |
|   | (23) | The      Company leases this facility for $47,500 per year. The lease expires in      October 2012.                                                                                                             |
|   | (24) | The      Company leases these facilities for $167,900 per year. The leases expire      November 2011 and June 2010.                                                                                             |
|   | (25) | The      Company leases an additional 126,000 square feet of the facility to      unrelated third parties for approximately $969,000 per year, under leases      expiring at various dates after December 2008. |
|   | (26) | The      Company leases an additional 25,000 square feet of the facility to      unrelated third parties for approximately $470,700 per year, under leases      expiring at various dates after December2008.   |

----

|   | (27) | The      Company leases this facility for $70,900 per year. The lease expires in      August 2012 |
|--------|------|---------------------------------------------------------------------------------------------------|

|   | (28) | The      Company leases this facility for $79,500 per year, with a month-to-month      lease. |
|--------|------|-----------------------------------------------------------------------------------------------|

|   | (29) | The      Company leases this facility for $43,400 per year.  The lease      expires in February 2010 |
|--------|------|----------------------------------------------------------------------------------------------------------------|

|   | (30) | The      Company leases this facility for $6,600 per year.  With a      month-to-month lease. |
|--------|------|---------------------------------------------------------------------------------------------------------|

|   | (31) | The      Company leases this facility for $26,400 per year.  The lease      expires in October 2010. |
|--------|------|----------------------------------------------------------------------------------------------------------------|

|   | (32) | The      Company leases this facility for $18,100 per year.  The lease      expires in June 2010. |
|--------|------|-------------------------------------------------------------------------------------------------------------|

|   | (33) | The      Company leases this facility for $7,100 per year. The lease expires in      June 2009. |
|--------|------|-------------------------------------------------------------------------------------------------|

|                                                   |                                               |         |                | Net      Saleable Acreage |
|--------------------------------------------------------|----------------------------------------------------|--------------|---------------------|---------------------------|
| Name      of Cemetery                                  | Location                                           | DateAcquired | DevelopedAcreage(1) | TotalAcreage(1)           | AcresSold      asCemeterySpaces      (2) | TotalAvailableAcreage(1) |
| Memorial      Estates, Inc.                            |                                               |         |                |                      |   |
| Lakeview      Cemetery                                 | 1640      East Lakeview DriveBountiful,      Utah  | 1973         | 7                   | 40                        | 6 | 34 |
|                                                   |                                               |         |                |                      |   |   |
| Mountain      View Cemetery                            | 3115      East 7800 SouthSalt      Lake City, Utah | 1973         | 15                  | 54                        | 14 | 40 |
|                                                   |                                               |         |                |                      |   |   |
| Redwood      Cemetery (4)                              | 6500      South Redwood RoadWest      Jordan, Utah | 1973         | 27                  | 78                        | 28 | 50 |
|                                                   |                                               |         |                |                      |   |   |
| Cottonwood      Mortuary, Inc.                         |                                               |         |                |                      |   |
| Deseret      Memorial Inc.Lake      Hills Cemetery (3) | 10055      South State StreetSandy,      Utah      | 1991         | 9                   | 41                        | 4 | 37 |
|                                                   |                                               |         |                |                      |   |   |
| Holladay      Memorial Park (3)(4)                     | 4900      South Memory LaneHolladay,      Utah     | 1991         | 5                   | 14                        | 4 | 10 |
|                                                   |                                               |         |                |                      |   |   |
| California      Memorial Estates                       |                                               |         |                |                      |   |
| Singing      Hills Memorial Park (5)                   | 2800      Dehesa RoadEl      Cajon, California     | 1995         | 8                   | 35                        | 4 | 31 |

|   | (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, 2008, there were mortgages of approximately $1,227,000      collateralized by the property and facilities at Deseret Mortuary,      Cottonwood Mortuary, Holladay Memorial Park, and Lakehills      Cemetery. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | These      cemeteries include two granitemausoleums. |
|--------|-----|------------------------------------------------------|

|   | (5) | As      of December 31, 2008, there was a mortgage of approximately $58,000,      collateralized by the property |
|--------|-----|------------------------------------------------------------------------------------------------------------------|

----

| Name      of                                                   |                         | Date     | Viewing |      | Square  |
|----------------------------------------------------------------|------------------------------|----------|---------|-----------|---------|
| Mortuary                                                       | Location                     | Acquired | Room(s) | Chapel(s) | Footage |
| Memorial      Mortuary                                         | 5850      South 900 East     |     |    |      |    |
|                                                           | Murray,      Utah            | 1973     | 3       | 1         | 20,000  |
|                                                           |                         |     |    |      |    |
| Memorial      Estates, Inc.:                                   |                         |     |    |      |    |
|     Redwood      Mortuary(3)               | 6500      South Redwood Rd.  |     |    |      |    |
|                                                           | West      Jordan, Utah       | 1973     | 2       | 1         | 10,000  |
|                                                           |                         |     |    |      |    |
|     Mountain      View Mortuary(3)         | 3115      East 7800 South    |     |    |      |    |
|                                                           | Salt      Lake City, Utah    | 1973     | 2       | 1         | 16,000  |
|                                                           |                         |     |    |      |    |
|     Lakeview      Mortuary(3)              | 1640      East Lakeview Dr.  |     |    |      |    |
|                                                           | Bountiful,      Utah         | 1973     | 0       | 1         | 5,500   |
|                                                           |                         |     |    |      |    |
| Paradise      Chapel     Funeral      Home | 3934      East Indian        |     |    |      |    |
|                                                                | School      Road             |     |    |      |    |
|                                                           | Phoenix,      Arizona        | 1989     | 2       | 1         | 9,800   |
|                                                           |                         |     |    |      |    |
| Deseret      Memorial, Inc.:                                   |                         |     |    |      |    |
|     Deseret      Mortuary(1)               | 36      East 700 South       |     |    |      |    |
|                                                           | Salt      Lake City, Utah    | 1991     | 2       | 2         | 36,300  |
|                                                           |                         |     |    |      |    |
|     Lakehills      Mortuary(3)             | 10055      South State St.   |     |    |      |    |
|                                                           | Sandy,      Utah             | 1991     | 2       | 1         | 18,000  |
|                                                           |                         |     |    |      |    |
|     Cottonwood      Mortuary(1)(3)         | 4670      South Highland Dr. |     |    |      |    |
|                                                           | Holladay,      Utah          | 1991     | 2       | 1         | 14,500  |
|                                                           |                         |     |    |      |    |
| Greer-Wilson      Funeral      Home                            | 5921      West Thomas Road   |     |    |      |    |
|                                                           | Phoenix,      Arizona        | 1995     | 2       | 2         | 25,000  |
|                                                           |                         |     |    |      |    |
| Adobe      Funeral Home(4)                                     | 218      North Central       |     |    |      |    |
|                                                           | Avondale,      Arizona       | 1995     | 1       | 1         | 1,850   |
|                                                           |                         |     |    |      |    |
| Crystal      Rose Funeral Home(2)                              | 9155      W. VanBuren        |     |    |      |    |
|                                                           | Tolleson,      Arizona       | 1997     | 0       | 1         | 9,000   |

|   | (1) | As      of December 31, 2008, there were mortgages of approximately $1,227,000,      collateralized by the property and facilities at Deseret Mortuary,      Cottonwood Mortuary, Holladay Memorial Park and Lakehills      Cemetery. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2)       | As      of December 31, 2008, there was a mortgage of approximately $86,000,      collateralized by the property and facilities of Crystal Rose Funeral      Home.  |
|--------|-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (3)  | These      funeral homes also provide burial niches at their respective      locations.                                                                             |
|   | (4)       | As      of December 31, 2008, there was a mortgage of approximately $107,000,      collateralized by the property and facilities of Adobe Chapel Funeral      Home. |

----

----

| Period (Calendar Year) | Price Range (1) |
|------------------------|-----------------|
|                   |            |   | High | Low |
|                   |            |   |   |   |
|                   | 2007            |   |   |   |
|                   |            | First      Quarter | $5.40 | $4.22 |
|                   |            | Second      Quarter | 5.90 | 4.49 |
|                   |            | Third      Quarter | 5.44 | 3.71 |
|                   |            | Fourth      Quarter | 4.27 | 2.95 |
|                   |            |   |   |   |
|                   | 2008            |   |   |   |
|                   |            | First      Quarter | $4.41 | $3.00 |
|                   |            | Second      Quarter | 4.22 | 2.89 |
|                   |            | Third      Quarter | 3.92 | 2.14 |
|                   |            | Fourth      Quarter | 2.42 | 1.42 |
|                   |            |   |   |   |
|                   | 2009            |   |   |   |
|                   |            | First      Quarter (through March 27, 2009) | $2.23 | $1.25 |

----

|                     | 12/31/03 | 12/31/04 | 12/31/05 | 12/31/06 | 12/31/07 | 12/31/08 |
|--------------------------|----------|----------|----------|----------|----------|----------|
| SNFC                     | 100      | 44       | 54       | 81       | 63       | 28       |
| S      & P 500       | 100      | 109      | 112      | 128      | 127      | 84       |
| S      & P Insurance | 100      | 106      | 119      | 131      | 120      | 49       |

----

|                                                                       |   | Year      Ended December 31, |        |
|----------------------------------------------------------------------------|--------|------------------------------|-------------|
|                                                                       |   | 2008(1)                      |        |   | 2007(2) |   |   | 2006(3) |   |   | 2005 |   |   | 2004(4) |   |
| Revenue                                                                    |   |                         |        |   |   |   |   |   |   |   |   |   |   |   |   |
| Premiums                                                                   |   | $                            | 35,981,000  |   |   | $ | 32,263,000 |   |   | $ | 30,776,000 |   |   | $ | 27,170,000 |   |   | $ | 25,979,000 |   |
| Net      investment income                                                 |   |                         | 28,104,000  |   |   |   | 31,956,000 |   |   |   | 23,246,000 |   |   |   | 19,387,000 |   |   |   | 15,939,000 |   |
| Net      mortuary and cemetery sales                                       |   |                         | 12,726,000  |   |   |   | 13,189,000 |   |   |   | 12,123,000 |   |   |   | 10,839,000 |   |   |   | 11,661,000 |   |
| Realized      (losses) gains on investments                                |   |                         | (1,734,000  | ) |   |   | 1,008,000 |   |   |   | 891,000 |   |   |   | 74,000 |   |   |   | 74,000 |   |
| Mortgage      fee income                                                   |   |                         | 143,412,000 |   |   |   | 130,472,000 |   |   |   | 85,113,000 |   |   |   | 71,859,000 |   |   |   | 62,690,000 |   |
| Other                                                                      |   |                         | 1,015,000   |   |   |   | 860,000 |   |   |   | 381,000 |   |   |   | 621,000 |   |   |   | 855,000 |   |
| Total      revenue                                                         |   |                         | 219,504,000 |   |   |   | 209,748,000 |   |   |   | 152,530,000 |   |   |   | 129,950,000 |   |   |   | 117,198,000 |   |
|                                                                       |   |                         |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Expenses                                                                   |   |                         |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Policyholder      benefits                                                 |   |                         | 32,904,000  |   |   |   | 29,742,000 |   |   |   | 27,319,000 |   |   |   | 24,477,000 |   |   |   | 23,362,000 |   |
| Amortization      of deferred policy      acquisition costs                |   |                         | 6,010,000   |   |   |   | 5,571,000 |   |   |   | 4,125,000 |   |   |   | 3,031,000 |   |   |   | 4,602,000 |   |
| Selling,      general and administrative expenses                          |   |                         | 169,973,000 |   |   |   | 155,504,000 |   |   |   | 105,728,000 |   |   |   | 90,690,000 |   |   |   | 82,097,000 |   |
| Interest      expense                                                      |   |                         | 7,449,000   |   |   |   | 13,271,000 |   |   |   | 6,141,000 |   |   |   | 4,921,000 |   |   |   | 2,174,000 |   |
| Cost      of goods and services of the      mortuaries and cemeteries      |   |                         | 2,437,000   |   |   |   | 2,537,000 |   |   |   | 2,322,000 |   |   |   | 2,103,000 |   |   |   | 2,304,000 |   |
| Total      benefits and expenses                                           |   |                         | 218,773,000 |   |   |   | 206,625,000 |   |   |   | 145,635,000 |   |   |   | 125,222,000 |   |   |   | 114,539,000 |   |
| Income      before income tax expense                                      |   |                         | 731,000     |   |   |   | 3,123,000 |   |   |   | 6,895,000 |   |   |   | 4,728,000 |   |   |   | 2,659,000 |   |
| Income      tax expense                                                    |   |                         | (156,000    | ) |   |   | (858,000 | ) |   |   | (1,771,000 | ) |   |   | (1,240,000 | ) |   |   | (652,000 | ) |
| Minority      interest in (income) loss      of subsidiary                 |   |                         | --          |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |   |   | 115,000 |   |
| Net      earnings                                                          |   | $                            | 575,000     |   |   | $ | 2,265,000 |   |   | $ | 5,124,000 |   |   | $ | 3,488,000 |   |   | $ | 2,122,000 |   |
|                                                                       |   |                         |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      earnings per common share (5)                                     |   | $                            | 0.07        |   |   | $ | 0.28 |   |   | $ | 0.66 |   |   | $ | 0.45 |   |   | $ | 0.28 |   |
| Weighted      average outstanding common      shares (5)                   |   |                         | 8,160,000   |   |   |   | 8,011,000 |   |   |   | 7,808,000 |   |   |   | 7,734,000 |   |   |   | 7,704,000 |   |
| Net      earnings per common share-assuming      dilution (5)              |   | $                            | 0.07        |   |   | $ | 0.28 |   |   | $ | 0.64 |   |   | $ | 0.45 |   |   | $ | 0.27 |   |
| Weighted      average outstanding common      shares-assuming dilution (5) |   |                         | 8,160,000   |   |   |   | 8,200,000 |   |   |   | 7,975,000 |   |   |   | 7,768,000 |   |   |   | 7,943,000 |   |

----

|                                                                   |   | December      31, |        |
|------------------------------------------------------------------------|--------|-------------------|-------------|
|                                                                   |   | 2008(1)           |        |   | 2007(2) |   |   | 2006 |   |   | 2005(3) |   |   | 2004(4) |   |
| Assets                                                                 |   |              |        |   |   |   |   |   |   |   |   |   |   |   |   |
| Investments      and restricted assets                                 |   | $                 | 308,310,000 |   |   | $ | 257,410,000 |   |   | $ | 222,683,000 |   |   | $ | 211,249,000 |   |   | $ | 182,645,000 |   |
| Cash                                                                   |   |              | 19,914,000  |   |   |   | 5,203,000 |   |   |   | 10,377,000 |   |   |   | 16,633,000 |   |   |   | 15,334,000 |   |
| Receivables                                                            |   |              | 33,021,000  |   |   |   | 80,445,000 |   |   |   | 74,695,000 |   |   |   | 61,787,000 |   |   |   | 54,013,000 |   |
| Other      assets                                                      |   |              | 80,560,000  |   |   |   | 75,105,000 |   |   |   | 69,640,000 |   |   |   | 69,976,000 |   |   |   | 65,471,000 |   |
| Total      assets                                                      |   | $                 | 441,805,000 |   |   | $ | 418,163,000 |   |   | $ | 377,395,000 |   |   | $ | 359,645,000 |   |   | $ | 317,463,000 |   |
|                                                                   |   |              |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities                                                            |   |              |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Policyholder      benefits                                             |   | $                 | 330,533,000 |   |   | $ | 301,064,000 |   |   | $ | 272,923,000 |   |   | $ | 263,981,000 |   |   | $ | 226,785,000 |   |
| Notes      & contracts payable                                     |   |              | 6,640,000   |   |   |   | 13,372,000 |   |   |   | 7,671,000 |   |   |   | 10,273,000 |   |   |   | 12,263,000 |   |
| Cemetery      & mortuary liabilities                               |   |              | 13,467,000  |   |   |   | 12,643,000 |   |   |   | 11,534,000 |   |   |   | 10,829,000 |   |   |   | 10,762,000 |   |
| Cemetery      perpetual care obligation                                |   |              | 2,648,000   |   |   |   | 2,474,000 |   |   |   | 2,278,000 |   |   |   | 2,173,000 |   |   |   | 2,084,000 |   |
| Other      liabilities                                                 |   |              | 34,605,000  |   |   |   | 32,826,000 |   |   |   | 30,018,000 |   |   |   | 26,691,000 |   |   |   | 20,091,000 |   |
| Total      liabilities                                                 |   |              | 387,893,000 |   |   |   | 362,379,000 |   |   |   | 324,424,000 |   |   |   | 313,947,000 |   |   |   | 271,985,000 |   |
|                                                                   |   |              |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Minority      interest                                                 |   |              | --          |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |   |   | 3,813,000 |   |
|                                                                   |   |              |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stockholders’      equity                                        |   |              | 53,912,000  |   |   |   | 55,784,000 |   |   |   | 52,971,000 |   |   |   | 45,698,000 |   |   |   | 41,665,000 |   |
|                                                                        |   |              |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      liabilities and   stockholders’      equity |   | $                 | 441,805,000 |   |   | $ | 418,163,000 |   |   | $ | 377,395,000 |   |   | $ | 359,645,000 |   |   | $ | 317,463,000 |   |

| (1) | Includes      the purchase of Southern Security Life Insurance Company effective,      December 18, 2008. |
|-----|-----------------------------------------------------------------------------------------------------------|

| (2) | Includes      the purchase of C & J Financial on July 16, 2007 and the purchase      of  Capital Reserve Life Insurance Company on December 17,      2007. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Includes      the purchase of Memorial Insurance Company of America on December 29,      2005.                                                                   |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (4) | Includes      the purchase of Paramount Security Life Insurance Company, now Security      National Life Insurance Company of Louisiana, on March 16,      2004. |
| (5) | Earnings      per share amounts have been adjusted retroactively for the effect of      annual stock dividends.                                             |

----

|   | · | Failure      to deliver original documents specified by the  investor. |
|--------|--------|------------------------------------------------------------------------|

|   | · | The      existence of fraud in the origination of the  loan. |
|--------|--------|--------------------------------------------------------------|

|   | · | The      loan becomes delinquent due to nonpayment during the first several months      after it is sold. |
|--------|--------|-----------------------------------------------------------------------------------------------------------|

|   | · | Early      pay-off of a loan, as defined by theagreements. |
|--------|--------|------------------------------------------------------------|

|   | · | Excessive      time to settle a loan. |
|--------|--------|---------------------------------------|

|   | · | Investor      declines purchase. |
|--------|--------|----------------------------------|

|   | · | Discontinued      product and expired commitment |
|--------|--------|--------------------------------------------------|

|   | · | Research      reasons for rejection |
|--------|--------|-------------------------------------|

|   | · | Provide      additional documents |
|--------|--------|-----------------------------------|

|   | · | Request      investor exceptions |
|--------|--------|----------------------------------|

|   | · | Appeal      rejection decision to purchasecommittee |
|--------|--------|-----------------------------------------------------|

|   | · | Commit      to secondary investors |
|--------|--------|------------------------------------|

----

|   | · | For      loans that have an active market we use the market price on the      repurchased date. |
|--------|--------|-------------------------------------------------------------------------------------------------|

|   | · | For      loans where there is no market but there is a similar product, we use the      market value for the similar product on the repurchased    date. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | For      loans where no active market exists on the repurchased date, we determine      that the unpaid principal balance best approximates the market value on      the repurchased date, after considering the fair value of the underlying      real estate collateral and estimated future cash  flows. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

----

----

----

----

----

----

|                          |   |   |        |   | Principal   |   |       | Principal   |      |   | Principal  |       |
|-------------------------------|--------|--------|-------------|--------|-------------|--------|------------|-------------|-----------|--------|------------|------------|
|                          |   |   |        |   | Amounts     |   |       | Amounts     |      |   | Amounts    |       |
|                          |   |   |        |   | Due      in |   |       | Due      in |      |   | Due        |       |
|                          |   | Total  |        |   | 2009        |   |       |        | 2010-2013 |   |       | Thereafter |   |
| Residential                   |   | $      | 70,082,011  |   |        | $      | 572,104    |        |      | $      | 2,074,604  |       |   | $ | 67,435,303 |   |
| Residential      Construction |   |   | 35,742,891  |   |        |   | 35,742,891 |        |      |   | -          |       |   |   | - |   |
| Commercial                    |   |   | 23,548,243  |   |        |   | 7,616,384  |        |      |   | 15,931,859 |       |   |   | - |   |
| Total                         |   | $      | 129,373,145 |   |        | $      | 43,931,379 |        |      | $      | 18,006,463 |       |   | $ | 67,435,303 |   |

----

|   | · | Defines      fair value as the price that would be received to sell an asset or paid to      transfer a liability in an orderly transaction between market participants      at the measurement date, and establishes a framework for measuring fair      value; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Establishes      a three-level hierarchy for fair value measurements based upon the      transparency of inputs to the valuation as of the measurement      date; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Expands      disclosures about financial instruments measured at fair      value. |
|--------|--------|-----------------------------------------------------------------------------------|

|   | a) | Quoted      prices for similar assets or liabilities in active markets;                                                                                     |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | b) | Quoted      prices for identical or similar assets or liabilities in non-active      markets; or                                                            |
|   | c) | Valuation      models whose inputs are observable, directly or indirectly, for      substantially the full  term  of the asset or      liability. |

----

|                                                                              |   |   |         |   | Quoted      Prices    |   |       |           |   |   |           |   |
|-----------------------------------------------------------------------------------|--------|--------|--------------|--------|-----------------------|--------|------------|----------------|--------|--------|----------------|--------|
|                                                                              |   |   |         |   | in      Active        |   |       | Significant    |   |   | Significant    |   |
|                                                                              |   |   |         |   | Markets      for      |   |       | Observable     |   |   | Unobservable   |   |
|                                                                              |   |   |         |   | Identical      Assets |   |       | Inputs         |   |   | Inputs         |   |
|                                                                              |   | Total  |         |   | (Level      1)        |   |       | (Level      2) |   |   | (Level      3) |   |
| Assets      accounted for at fair value on a recurring basis                 |   |   |         |   |                  |   |       |           |   |   |           |   |
| Investment      in securities available for sale                                  |   | $      | 5,854,237    |   |                  | $      | 5,854,237  |           |   | $      | -              |   |   | $ | - |   |
| Short-term      investments                                                       |   |   | 5,282,986    |   |                  |   | 5,282,986  |           |   |   | -              |   |   |   | - |   |
| Restricted      assets of cemeteries and mortuaries                               |   |   | 1,241,038    |   |                  |   | 1,241,038  |           |   |   | -              |   |   |   |   |   |
| Cemetery      perpetual care trust investments                                    |   |   | 1,840,119    |   |                  |   | 1,840,119  |           |   |   | -              |   |   |   | - |   |
| Total      assets accounted for at fair value on a      recurring basis           |   | $      | 14,218,380   |   |                  | $      | 14,218,380 |           |   | $      | -              |   |   | $ | - |   |
|                                                                              |   |   |         |   |                  |   |       |           |   |   |           |   |   |   |   |   |
| Liabilities      accounted for at fair value on a recurring      basis       |   |   |         |   |                  |   |       |           |   |   |           |   |   |   |   |   |
| Investment-type      insurance contracts                                          |   | $      | (112,351,916 | )      |                  | $      | -          |           |   | $      | -              |   |   | $ | (112,351,916 | ) |
| Dervatives:      assets (liabilities)                                             |   |   |         |   |                  |   | -          |           |   |   | -              |   |   |   | - |   |
|    Interest      rate lock commitments                             |   |   | 362,231      |   |                  |   | -          |           |   |   | -              |   |   |   | 362,231 |   |
|    Bank      loan interest rate swaps                              |   |   | (113,049     | )      |                  |   | -          |           |   |   | -              |   |   |   | (113,049 | ) |
| Total      liabilities accounted for at fair value on a recurring      basis |   | $      | (112,102,734 | )      |                  | $      | -          |           |   | $      | -              |   |   | $ | (112,102,734 | ) |

|                                             |   | Investment      TypeInsurance      Contracts |         |   | Interest      RateLock      Commitments |   |     | Bank      LoanInterest      RateSwaps |   |
|--------------------------------------------------|--------|----------------------------------------------|--------------|--------|-----------------------------------------|--------|----------|---------------------------------------|--------|
|                                             |   |                                         |         |   |                                    |   |     |                                  |   |
| Balance      - December 31, 2007                 |   | $                                            | (106,939,120 | )      |                                    | $      | 627,116  |                                  |   | $ | (26,951 | ) |
|                                             |   |                                         |         |   |                                    |   |     |                                  |   |   |   |   |
| Total      Losses:                               |   |                                         |         |   |                                    |   |     |                                  |   |   |   |   |
|                                             |   |                                         |         |   |                                    |   |     |                                  |   |   |   |   |
| Included      in earnings                        |   |                                         | (5,412,796   | )      |                                    |   | -        |                                  |   |   | - |   |
|                                             |   |                                         |         |   |                                    |   |     |                                  |   |   |   |   |
| Included      in other comprehensive      income |   |                                         | -            |   |                                    |   | (264,885 | )                                     |   |   | (86,098 | ) |
|                                             |   |                                         |         |   |                                    |   |     |                                  |   |   |   |   |
| Purchases,      issuances, and settlements       |   |                                         | -            |   |                                    |   | -        |                                  |   |   | - |   |
|                                             |   |                                         |         |   |                                    |   |     |                                  |   |   |   |   |
| Transfers                                        |   |                                         | -            |   |                                    |   | -        |                                  |   |   | - |   |
|                                             |   |                                         |         |   |                                    |   |     |                                  |   |   |   |   |
| Balance      - December 31, 2008                 |   | $                                            | (112,351,916 | )      |                                    | $      | 362,231  |                                  |   | $ | (113,049 | ) |

----

|                                                       | -200 bps | -100 bps | +100 bps  | +200 bps  |
|------------------------------------------------------------|----------|----------|-----------|-----------|
| Change      in  Market Value (in      thousands) | $20,853  | $11,157  | $(12,541) | $(25,441) |

----

----

| Years Ending December 31: |   |
|---------------------------|--------|
| 2009                      |   | $ | 1,177,000 |   |
| 2010                      |   |   | 695,000 |   |
| 2011                      |   |   | 411,000 |   |
| 2012                      |   |   | 143,000 |   |
| 2013                      |   |   | 26,000 |   |
| Thereafter                |   |   | -- |   |
| Total                     |   | $ | 2,452,000 |   |

----

In April 2008, the FASB issued FSP FAS 142-3, Determination of the Useful Life ofIntangible Assets. FSP FAS 142-3 amends the factors that should beconsidered in developing renewal or extension assumptions used to determine theuseful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other IntangibleAssets. The intent of this FSP is to improve the consistency between theuseful life of a recognized intangible asset under FAS FAS 142 and the period ofexpected cash flows used to measure the fair value of the asset under SFAS No.141(R) and other generally accepted accounting principles. FSP FAS 142-3 iseffective for fiscal years, and interim periods within those fiscal years,beginning after December 15, 2008.

SFAS No. 60, Accounting and Reporting byInsurance Enterprises, as amended, applies to financial guaranteeinsurance contracts, including the recognition and measurement to be used toaccount for premium revenue and claim liabilities. This Statement also requiresexpanded disclosures about financial guarantee insurance contracts. SFAS No. 163is effective for financial statements issued for fiscal years beginning afterDecember 15, 2008, and all interim periods within those fiscal years, except forsome disclosures about the insurance enterprise's risk-management activities.Early application is not permitted. The Company has not yet determined theeffect on its consolidated financial statements, if any, that will occur uponadoption of SFAS No. 163.

----

----

|                                |                                                                                                                  | Page No. |
|-------------------------------------|-----------------------------------------------------------------------------------------------------------------------|----------|
| Financial      Statements:          |                                                                                                                  |
|                                |                                                                                                                  |     |
|                                | Report      of Independent Registered Public Accounting Firm                                                          | 45       |
|                                |                                                                                                                  |     |
|                                | Consolidated      Balance Sheets, December 31, 2008 and 2007                                                          | 46       |
|                                |                                                                                                                  |     |
|                                | Consolidated      Statements of Earnings for the Years Ended December 31, 2008, 2007 and      2006                    | 48       |
|                                |                                                                                                                  |     |
|                                | Consolidated      Statements of Stockholders’ Equity, for the Years Ended December 31, 2006,      2007 and 2008 | 49       |
|                                |                                                                                                                  |     |
|                                | Consolidated      Statements of Cash Flows, for the Years Ended December 31, 2008, 2007 and      2006                 | 50       |
|                                |                                                                                                                  |     |
|                                | Notes      to Consolidated Financial Statements                                                                       | 52-108   |
|                                |                                                                                                                  |     |
| Financial      Statement Schedules: |                                                                                                                  |
|                                |                                                                                                                  |     |
|                                | II   Condensed      Financial Information of Registrant                                                | 127      |
|                                |                                                                                                                  |     |
|                                | IV   Reinsurance                                                                                       | 133      |
|                                |                                                                                                                  |     |
|                                | V   Valuation      and Qualifying Accounts                                                             | 134      |

----

| HANSEN, BARNETT& MAXWELL,      P.C.            |   |                                    |
|----------------------------------------------------|--------|-----------------------------------------|
| A      Professional Corporation                    |   | Registered      with the Public Company |
| CERTIFIED      PUBLIC ACCOUNTANTS                  |   | Accounting      Oversight Board         |
| 5      Triad Center, Suite 750                     |   |                                    |
| Salt      Lake City, UT 84180-1128                 |   |                                    |
| Phone:      (801) 532-2200Fax:      (801) 532-7944 |   |                                         |
| www.hbmcpas.com                                    |   | A      Member of the Forum of Firms     |

|   | HANSEN,      BARNETT & MAXWELL, P.C. |
|--------|------------------------------------------|

----

| SECURITY NATIONAL FINANCIAL CORPORATION AND      SUBSIDIARIES                                                                                                       |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| CONSOLIDATED      BALANCE SHEETS                                                                                                                                    |   |
|                                                                                                                                                                |   |   |   |   |   |   |
|                                                                                                                                                                |   | December      31, |   |
| Assets                                                                                                                                                              |   | 2008 |   |   | 2007 |   |
| Investments:                                                                                                                                                        |   |   |   |   |   |   |
| Fixed      maturity securities, held to maturity, at amortized cost                                                                                                 |   | $ | 125,346,194 |   |   | $ | 116,896,016 |   |
| Fixed      maturity securities, available for sale, at estimated fair      value                                                                                    |   |   | 1,236,562 |   |   |   | 2,880,920 |   |
| Equity      securities, available for sale, at estimated fair value                                                                                                 |   |   | 4,617,675 |   |   |   | 5,861,292 |   |
| Mortgage      loans on real estate and construction loans held for investment,      net of allowances or losses of $4,780,467 and      $1,435,131 for 2008 and 2007 |   |   | 124,592,678 |   |   |   | 92,884,055 |   |
| Real      estate, net of accumulated depreciation of $5,009,571 and $4,340,390      for 2008 and 2007                                                               |   |   | 22,417,639 |   |   |   | 7,946,304 |   |
| Policy,      student and other loans net of allowance for      doubtful accounts of $555,146 and $492,089 for 2008 and      2007                                    |   |   | 18,493,751 |   |   |   | 16,860,874 |   |
| Short-term      investments                                                                                                                                         |   |   | 5,282,986 |   |   |   | 5,337,367 |   |
| Accrued      investment income                                                                                                                                      |   |   | 2,245,201 |   |   |   | 3,032,285 |   |
| Total      investments                                                                                                                                              |   |   | 304,232,686 |   |   |   | 251,699,113 |   |
| Cash      and cash equivalents                                                                                                                                      |   |   | 19,914,110 |   |   |   | 5,203,060 |   |
| Mortgage      loans sold to investors                                                                                                                               |   |   | 19,885,994 |   |   |   | 66,700,694 |   |
| Receivables,      net                                                                                                                                               |   |   | 13,135,080 |   |   |   | 13,743,682 |   |
| Restricted      assets of cemeteries and mortuaries                                                                                                                 |   |   | 4,077,076 |   |   |   | 5,711,054 |   |
| Cemetery      perpetual care trust investments                                                                                                                      |   |   | 1,840,119 |   |   |   | 1,604,600 |   |
| Receivable      from reinsurers                                                                                                                                     |   |   | 5,823,379 |   |   |   | 746,336 |   |
| Cemetery      land and improvements                                                                                                                                 |   |   | 10,626,296 |   |   |   | 9,760,041 |   |
| Deferred      policy and pre-need contract acquisition costs                                                                                                        |   |   | 32,424,512 |   |   |   | 30,786,229 |   |
| Property      and equipment, net                                                                                                                                    |   |   | 14,049,232 |   |   |   | 14,828,699 |   |
| Value      of business acquired                                                                                                                                     |   |   | 11,377,276 |   |   |   | 11,686,080 |   |
| Goodwill                                                                                                                                                            |   |   | 1,075,039 |   |   |   | 1,075,039 |   |
| Other                                                                                                                                                               |   |   | 3,343,726 |   |   |   | 4,618,018 |   |
| Total      Assets                                                                                                                                                   |   | $ | 441,804,525 |   |   | $ | 418,162,645 |   |

----

| SECURITY      NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES                                                                                                  |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| CONSOLIDATED      BALANCE SHEETS (Continued)                                                                                                                   |   |
|                                                                                                                                                           |   |   |   |   |   |   |
|                                                                                                                                                           |   | December      31, |   |
| Liabilities      and Stockholders' Equity                                                                                                                      |   | 2008 |   |   | 2007 |   |
| Liabilities                                                                                                                                                    |   |   |   |   |   |   |
| Future      life, annuity, and other benefits                                                                                                                  |   | $ | 325,668,454 |   |   | $ | 296,068,767 |   |
| Unearned      premium reserve                                                                                                                                  |   |   | 4,863,919 |   |   |   | 4,995,664 |   |
| Bank      loans payable                                                                                                                                        |   |   | 6,138,202 |   |   |   | 12,552,666 |   |
| Notes      and contracts payable                                                                                                                               |   |   | 501,778 |   |   |   | 818,810 |   |
| Deferred      pre-need cemetery and mortuary contract revenues                                                                                                 |   |   | 13,467,132 |   |   |   | 12,643,199 |   |
| Cemetery      perpetual care obligation                                                                                                                        |   |   | 2,647,984 |   |   |   | 2,473,758 |   |
| Accounts      payable                                                                                                                                          |   |   | 1,941,777 |   |   |   | 1,833,188 |   |
| Other      liabilities and accrued expenses                                                                                                                    |   |   | 17,688,756 |   |   |   | 14,812,845 |   |
| Income      taxes                                                                                                                                              |   |   | 14,974,244 |   |   |   | 16,179,596 |   |
| Total      liabilities                                                                                                                                         |   |   | 387,892,246 |   |   |   | 362,378,493 |   |
| Commitments      and Contingencies                                                                                                                             |   |   | -- |   |   |   | -- |   |
| Stockholders’      Equity                                                                                                                                |   |   |   |   |   |   |   |   |
| Common      Stock:                                                                                                                                             |   |   |   |   |   |   |   |   |
| Class      A: common stock - $2.00 par value; 20,000,000 shares authorized; issued      8,284,109 shares in 2008 and 7,885,229 shares in    2007               |   |   | 16,568,218 |   |   |   | 15,770,458 |   |
| Class      B: non-voting common stock - $1.00 par value; 5,000,000 shares      authorized; none issued or outstanding                                          |   |   | -- |   |   |   | -- |   |
| Class      C: convertible common stock - $0.20 par value; 15,000,000 shares authorized;      issued 8,912,315 shares in 2008 and 8,530,699 shares in      2007 |   |   | 1,782,463 |   |   |   | 1,706,140 |   |
| Additional      paid-in capital                                                                                                                                |   |   | 17,985,848 |   |   |   | 17,737,172 |   |
| Accumulated      other comprehensive income and other items, net of taxes                                                                                      |   |   | 417,101 |   |   |   | 1,596,791 |   |
| Retained      earnings                                                                                                                                         |   |   | 21,023,179 |   |   |   | 21,104,156 |   |
| Treasury      stock, at cost - 1,598,568 Class A shares and -0- Class C shares in      2008; 1,635,864 Class A shares and -0- Class C shares in      2007      |   |   | (3,864,530 | ) |   |   | (2,130,565 | ) |
| Total      stockholders’ equity                                                                                                                          |   |   | 53,912,279 |   |   |   | 55,784,152 |   |
| Total      Liabilities and Stockholders’ Equity                                                                                                          |   | $ | 441,804,525 |   |   | $ | 418,162,645 |   |

----

|                                                                                                    |   | Years      Ended December 31, |        |
|---------------------------------------------------------------------------------------------------------|--------|-------------------------------|-------------|
|                                                                                                    |   | 2008                          |        |   | 2007 |   |   | 2006 |   |
| Revenues:                                                                                               |   |                          |        |   |   |   |   |   |   |
| Insurance      premiums and other consideration                                                         |   | $                             | 35,981,297  |   |   | $ | 32,262,837 |   |   | $ | 30,776,491 |   |
| Net      investment income                                                                              |   |                          | 28,103,509  |   |   |   | 31,956,444 |   |   |   | 23,245,631 |   |
| Net      mortuary and cemetery sales                                                                    |   |                          | 12,725,930  |   |   |   | 13,188,655 |   |   |   | 12,122,728 |   |
| Realized      gains (losses) on investments and other assets                                            |   |                          | (1,733,715  | ) |   |   | 1,007,574 |   |   |   | 891,304 |   |
| Mortgage      fee income                                                                                |   |                          | 143,411,459 |   |   |   | 130,472,166 |   |   |   | 85,112,831 |   |
| Other                                                                                                   |   |                          | 1,015,370   |   |   |   | 860,406 |   |   |   | 381,548 |   |
| Total      revenues                                                                                     |   |                          | 219,503,850 |   |   |   | 209,748,082 |   |   |   | 152,530,533 |   |
|                                                                                                    |   |                          |        |   |   |   |   |   |   |   |   |   |
| Benefits      and expenses:                                                                             |   |                          |        |   |   |   |   |   |   |   |   |   |
| Death      benefits                                                                                     |   |                          | 17,100,688  |   |   |   | 16,274,813 |   |   |   | 15,155,711 |   |
| Surrenders      and other policy benefits                                                               |   |                          | 2,094,482   |   |   |   | 2,078,415 |   |   |   | 1,700,741 |   |
| Increase      in future policy benefits                                                                 |   |                          | 13,709,135  |   |   |   | 11,389,019 |   |   |   | 10,462,384 |   |
| Amortization      of deferred policy and pre-need acquisition      costs and value of business acquired |   |                          | 6,010,273   |   |   |   | 5,570,799 |   |   |   | 4,124,747 |   |
| Selling,      general and administrative expenses:                                                      |   |                          |        |   |   |   |   |   |   |   |   |   |
| Commissions                                                                                             |   |                          | 98,962,941  |   |   |   | 96,957,340 |   |   |   | 63,680,122 |   |
| Salaries                                                                                                |   |                          | 26,206,331  |   |   |   | 23,944,999 |   |   |   | 17,947,902 |   |
| Other                                                                                                   |   |                          | 44,803,582  |   |   |   | 34,601,551 |   |   |   | 24,099,924 |   |
| Interest      expense                                                                                   |   |                          | 7,448,454   |   |   |   | 13,270,871 |   |   |   | 6,141,298 |   |
| Cost      of goods and services sold – mortuaries and cemeteries                                  |   |                          | 2,437,453   |   |   |   | 2,537,244 |   |   |   | 2,322,066 |   |
|                                                                                                    |   |                          |        |   |   |   |   |   |   |   |   |   |
| Total      benefits and expenses                                                                        |   |                          | 218,773,339 |   |   |   | 206,625,051 |   |   |   | 145,634,895 |   |
|                                                                                                    |   |                          |        |   |   |   |   |   |   |   |   |   |
| Earnings      before income taxes                                                                       |   |                          | 730,511     |   |   |   | 3,123,031 |   |   |   | 6,895,638 |   |
| Income      tax expense                                                                                 |   |                          | (155,658    | ) |   |   | (857,635 | ) |   |   | (1,771,188 | ) |
|                                                                                                    |   |                          |        |   |   |   |   |   |   |   |   |   |
| Net      earnings                                                                                       |   | $                             | 574,853     |   |   | $ | 2,265,396 |   |   | $ | 5,124,450 |   |
|                                                                                                    |   |                          |        |   |   |   |   |   |   |   |   |   |
| Net      earnings per Class A equivalent common share (1)                                               |   | $                             | 0.07        |   |   | $ | 0.28 |   |   | $ | 0.66 |   |
|                                                                                                    |   |                          |        |   |   |   |   |   |   |   |   |   |
| Net      earnings per Class A equivalent common share - assuming      dilution(1)                       |   | $                             | 0.07        |   |   | $ | 0.28 |   |   | $ | 0.64 |   |
|                                                                                                    |   |                          |        |   |   |   |   |   |   |   |   |   |
| Weighted      average Class A equivalent common shares outstanding      (1)                             |   |                          | 8,160,422   |   |   |   | 8,010,635 |   |   |   | 7,808,470 |   |
|                                                                                                    |   |                          |        |   |   |   |   |   |   |   |   |   |
| Weighted      average Class A equivalent common shares outstanding-assuming      dilution (1)           |   |                          | 8,160,422   |   |   |   | 8,199,961 |   |   |   | 7,974,986 |   |

----

|                                            |   |         |       |   |         |   |      |       |   |   | Accumulated        |   |   |     |       |   |     |   |       |   |   |
|-------------------------------------------------|--------|--------------|------------|--------|--------------|--------|-----------|------------|--------|--------|--------------------|--------|--------|----------|------------|--------|----------|--------|------------|--------|--------|
|                                            |   |         |       |   |         |   |      |       |   |   | Other              |   |   |     |       |   |     |   |       |   |   |
|                                            |   |         |       |   |         |   |      |       |   |   | Comprehensive      |   |   |     |       |   |     |   |       |   |   |
|                                            |   | Class      A |       |   | Class      C |   |      | Additional |   |   | Income      (loss) |   |   |     |       |   |     |   |       |   |   |
|                                            |   | Common       |       |   | Common       |   |      | Paid-in    |   |   | and                |   |   | Retained |       |   | Treasury |   |       |   |   |
|                                            |   | Stock        |       |   | Stock        |   |      | Capital    |   |   | Other      Items   |   |   | Earnings |       |   | Stock    |   |       | Total  |   |
| Balance      at January 1, 2006                 |   | $            | 14,196,726 |   |         | $      | 1,356,212 |       |   | $      | 15,650,344         |   |   | $        | 117,647    |   |     | $      | 17,460,024 |   |   | $ | (3,082,535 | ) |   | $ | 45,698,418 |   |
|                                            |   |         |       |   |         |   |      |       |   |   |               |   |   |     |       |   |     |   |       |   |   |   |   |   |   |   |   |   |
| Comprehensive      income:                      |   |         |       |   |         |   |      |       |   |   |               |   |   |     |       |   |     |   |       |   |   |   |   |   |   |   |   |   |
| Net      earnings                               |   |         | —    |   |         |   | —   |       |   |   | —            |   |   |     | —    |   |     |   | 5,124,450  |   |   |   | — |   |   |   | 5,124,450 |   |
| Unrealized      gains                           |   |         | —    |   |         |   | —   |       |   |   | —            |   |   |     | 1,585,508  |   |     |   | —    |   |   |   | — |   |   |   | 1,585,508 |   |
| Total      comprehensive income                 |   |         |       |   |         |   |      |       |   |   |               |   |   |     |       |   |     |   |       |   |   |   |   |   |   |   | 6,709,958 |   |
| Exercise      of stock options                  |   |         | 149,040    |   |         |   | —   |       |   |   | (43,441            | )      |   |     | —    |   |     |   | —    |   |   |   | — |   |   |   | 105,599 |   |
| Purchase      of Treasury stock                 |   |         | —    |   |         |   | —   |       |   |   | —            |   |   |     | —    |   |     |   | —    |   |   |   | (3,901 | ) |   |   | (3,901 | ) |
| Sale      of Treasury stock                     |   |         | —    |   |         |   | —   |       |   |   | 154,154            |   |   |     | —    |   |     |   | —    |   |   |   | 304,448 |   |   |   | 458,602 |   |
| Issuance      for compensation                  |   |         | 1,000      |   |         |   | —   |       |   |   | 1,020              |   |   |     | —    |   |     |   | —    |   |   |   | — |   |   |   | 2,020 |   |
| Stock      dividends                            |   |         | 719,212    |   |         |   | 67,788    |       |   |   | 1,302,411          |   |   |     | —    |   |     |   | (2,089,411 | )      |   |   | — |   |   |   | — |   |
| Conversion      Class C to Class A              |   |         | 482        |   |         |   | (482      | )          |   |   | —            |   |   |     | —    |   |     |   | —    |   |   |   | — |   |   |   | — |   |
| Balance      at December 31, 2006               |   |         | 15,066,460 |   |         |   | 1,423,518 |       |   |   | 17,064,488         |   |   |     | 1,703,155  |   |     |   | 20,495,063 |   |   |   | (2,781,988 | ) |   |   | 52,970,696 |   |
|                                            |   |         |       |   |         |   |      |       |   |   |               |   |   |     |       |   |     |   |       |   |   |   |   |   |   |   |   |   |
| Comprehensive      income:                      |   |         |       |   |         |   |      |       |   |   |               |   |   |     |       |   |     |   |       |   |   |   |   |   |   |   |   |   |
| Net      earnings                               |   |         | —    |   |         |   | —   |       |   |   | —            |   |   |     | —    |   |     |   | 2,265,396  |   |   |   | — |   |   |   | 2,265,396 |   |
| Unrealized      gains (losses)                  |   |         | —    |   |         |   | —   |       |   |   | —            |   |   |     | (106,364   | )      |     |   | —    |   |   |   | — |   |   |   | (106,364 | ) |
| Total      comprehensive income                 |   |         |       |   |         |   |      |       |   |   |               |   |   |     |       |   |     |   |       |   |   |   |   |   |   |   | 2,159,032 |   |
| Exercise      of stock options                  |   |         | (76,974    | )      |         |   | 231,525   |       |   |   | (55,261            | )      |   |     | —    |   |     |   | (96,289    | )      |   |   | — |   |   |   | 3,001 |   |
| Sale      of Treasury stock                     |   |         | —    |   |         |   | —   |       |   |   | —            |   |   |     | —    |   |     |   | —    |   |   |   | 651,423 |   |   |   | 651,423 |   |
| Stock      dividends                            |   |         | 750,826    |   |         |   | 81,244    |       |   |   | 727,944            |   |   |     | —    |   |     |   | (1,560,014 | )      |   |   | — |   |   |   | — |   |
|  Conversion      Class C to Class A        |   |         | 30,146     |   |         |   | (30,147   | )          |   |   | 1                  |   |   |     | —    |   |     |   | —    |   |   |   | — |   |   |   | — |   |
| Balance      at December 31, 2007               |   |         | 15,770,458 |   |         |   | 1,706,140 |       |   |   | 17,737,172         |   |   |     | 1,596,791  |   |     |   | 21,104,156 |   |   |   | (2,130,565 | ) |   |   | 55,784,152 |   |
|                                            |   |         |       |   |         |   |      |       |   |   |               |   |   |     |       |   |     |   |       |   |   |   |   |   |   |   |   |   |
| Comprehensive      income:                      |   |         |       |   |         |   |      |       |   |   |               |   |   |     |       |   |     |   |       |   |   |   |   |   |   |   |   |   |
| Net      earnings                               |   |         | —    |   |         |   | —   |       |   |   | —            |   |   |     | —    |   |     |   | 574,853    |   |   |   | — |   |   |   | 574,853 |   |
| Unrealized      gains (losses)                  |   |         | —    |   |         |   | —   |       |   |   | —            |   |   |     | (3,162,279 | )      |     |   | —    |   |   |   | — |   |   |   | (3,162,279 | ) |
| Reclass      of Treasury Stock                  |   |         | —    |   |         |   | —   |       |   |   | —            |   |   |     | 1,982,589  |   |     |   | —    |   |   |   | (1,982,589 | ) |   |   | — |   |
| Total      comprehensive income                 |   |         | —    |   |         |   | —   |       |   |   | —            |   |   |     | —    |   |     |   | —    |   |   |   | — |   |   |   | (2,587,426 | ) |
| Grant      of stock options                     |   |         | —    |   |         |   | —   |       |   |   | 466,929            |   |   |     | —    |   |     |   | —    |   |   |   | — |   |   |   | 466,929 |   |
| Sale      of Treasury stock                     |   |         | —    |   |         |   | —   |       |   |   | —            |   |   |     | —    |   |     |   | —    |   |   |   | 248,624 |   |   |   | 248,624 |   |
| Stock      dividends                            |   |         | 789,354    |   |         |   | 84,727    |       |   |   | (218,251           | )      |   |     | —    |   |     |   | (655,830   | )      |   |   | — |   |   |   | — |   |
| Conversion      Class C to Class A              |   |         | 8,406      |   |         |   | (8,404    | )          |   |   | (2                 | )      |   |     | —    |   |     |   | —    |   |   |   | — |   |   |   | — |   |
| Balance      as of December 31,  2008 |   | $            | 16,568,218 |   |         | $      | 1,782,463 |       |   | $      | 17,985,848         |   |   | $        | 417,101    |   |     | $      | 21,023,179 |   |   | $ | (3,864,530 | ) |   | $ | 53,912,279 |   |

----

|                                                                                                         |   | Years      Ended December 31 |        |
|--------------------------------------------------------------------------------------------------------------|--------|------------------------------|-------------|
|                                                                                                         |   | 2008                         |        |   | 2007 |   |   | 2006 |   |
| Cash      flows from operating activities:                                                                   |   |                         |        |   |   |   |   |   |   |
| Net      earnings                                                                                            |   | $                            | 574,853     |   |   | $ | 2,265,396 |   |   | $ | 5,124,450 |   |
| Adjustments      to reconcile net earnings to      net cash provided by (used in) operatingactivities:       |   |                         |        |   |   |   |   |   |   |   |   |   |
| Realized      (gains) losses on investments and other assets                                                 |   |                         | 1,733,715   |   |   |   | (1,007,574 | ) |   |   | (891,304 | ) |
| Depreciation                                                                                                 |   |                         | 2,471,201   |   |   |   | 2,398,330 |   |   |   | 2,023,017 |   |
| Provision      for losses on real estate accounts      and loans receivable                                  |   |                         | 4,586,501   |   |   |   | 741,974 |   |   |   | 558,370 |   |
| Amortization      of premiums and discounts                                                                  |   |                         | (65,224     | ) |   |   | 8,411 |   |   |   | (34,144 | ) |
| Provision      for deferred income taxes                                                                     |   |                         | (163,307    | ) |   |   | 481,810 |   |   |   | 1,153,985 |   |
| Policy      and pre-need acquisition costs deferred                                                          |   |                         | (6,946,317  | ) |   |   | (6,974,054 | ) |   |   | (7,313,030 | ) |
| Policy      and pre-need acquisition costs amortized                                                         |   |                         | 5,110,519   |   |   |   | 4,609,045 |   |   |   | 3,132,647 |   |
| Value      of business acquired amortized                                                                    |   |                         | 899,754     |   |   |   | 951,639 |   |   |   | 992,100 |   |
| Change      in assets and liabilities net of effects from purchases      and disposals of subsidiaries: |   |                         |        |   |   |   |   |   |   |   |   |   |
| Land      and improvements sold to customers                                                                 |   |                         | (866,255    | ) |   |   | (781,617 | ) |   |   | (247,197 | ) |
| Future      life and other benefits                                                                          |   |                         | 9,508,769   |   |   |   | 13,131,652 |   |   |   | 13,017,175 |   |
| Receivables      for mortgage loans sold to investors                                                        |   |                         | 35,366,791  |   |   |   | (6,883,446 | ) |   |   | (5,321,587 | ) |
| Other      operating assets and liabilities                                                                  |   |                         | 4,192,554   |   |   |   | 1,067,072 |   |   |   | (520,347 | ) |
| Net      cash provided by operating activities                                                               |   |                         | 56,403,554  |   |   |   | 10,008,638 |   |   |   | 11,674,135 |   |
| Cash      flows from investing activities:                                                                   |   |                         |        |   |   |   |   |   |   |   |   |   |
| Securities      held to maturity:                                                                            |   |                         |        |   |   |   |   |   |   |   |   |   |
| Purchase      - fixed maturity securities                                                                    |   |                         | (15,667,595 | ) |   |   | (2,206,067 | ) |   |   | (14,078,529 | ) |
| Calls      and maturities - fixed maturity securities                                                        |   |                         | 25,384,510  |   |   |   | 6,630,227 |   |   |   | 4,978,963 |   |
| Securities      available for sale:                                                                          |   |                         |        |   |   |   |   |   |   |   |   |   |
| Purchase      - equity securities                                                                            |   |                         | (1,740,077  | ) |   |   | (179,630 | ) |   |   | (173,262 | ) |
| Sales      - equity securities                                                                               |   |                         | 3,600,641   |   |   |   | 868,371 |   |   |   | 11,973,825 |   |
| Purchases      of short-term investments                                                                     |   |                         | (30,339,562 | ) |   |   | (16,946,889 | ) |   |   | (41,342,009 | ) |
| Sales      of short-term investments                                                                         |   |                         | 32,012,283  |   |   |   | 16,196,350 |   |   |   | 39,966,771 |   |
| Purchases      of restricted assets                                                                          |   |                         | 1,528,071   |   |   |   | (302,114 | ) |   |   | (50,239 | ) |
| Change      in assets for perpetual care trusts                                                              |   |                         | (291,870    | ) |   |   | (276,437 | ) |   |   | (154,491 | ) |
| Amount      received for perpetual care trusts                                                               |   |                         | 174,226     |   |   |   | 195,248 |   |   |   | 105,260 |   |
| Mortgage,      policy, and other loans made                                                                  |   |                         | (79,563,741 | ) |   |   | (114,782,049 | ) |   |   | (90,543,821 | ) |
| Payments      received for mortgage, policy, and other loans                                                 |   |                         | 56,376,246  |   |   |   | 105,790,916 |   |   |   | 76,979,450 |   |
| Purchases      of property and equipment                                                                     |   |                         | (1,323,849  | ) |   |   | (3,009,279 | ) |   |   | (1,763,708 | ) |
| Disposal      of property and equipment                                                                      |   |                         | 81,352      |   |   |   | 880,818 |   |   |   | (37,756 | ) |
| Purchases      of real estate                                                                                |   |                         | (16,829,189 | ) |   |   | (4,634,314 | ) |   |   | (2,262,890 | ) |
| Cash      (paid) received for purchase of subsidiaries,      net of cash acquired                            |   |                         | (2,928,022  | ) |   |   | (1,702,762 | ) |   |   | -- |   |
| Sale      of real estate                                                                                     |   |                         | 1,438,796   |   |   |   | 1,375,183 |   |   |   | 5,359,781 |   |
| Net      cash used in investing activities                                                                   |   |                         | 28,087,780  |   |   |   | (12,102,428 | ) |   |   | (11,042,655 | ) |

----

|                                                         |   | Years      Ended December 31 |        |
|--------------------------------------------------------------|--------|------------------------------|-------------|
|                                                         |   | 2008                         |        |   | 2007 |   |   | 2006 |   |
| Cash      flows from financing activities:                   |   |                         |        |   |   |   |   |   |   |
| Annuity      contract receipts                               |   | $                            | 10,578,845  |   |   | $ | 6,039,988 |   |   | $ | 5,941,594 |   |
| Annuity      contract withdrawals                            |   |                         | (18,006,929 | ) |   |   | (12,961,804 | ) |   |   | (10,817,231 | ) |
| Repayment      of bank loans and notes and contracts payable |   |                         | (11,276,120 | ) |   |   | (47,751,447 | ) |   |   | (2,572,524 | ) |
| Proceeds      from borrowing on notes and contracts          |   |                         | 4,383,927   |   |   |   | 50,939,105 |   |   |   | -- |   |
| Stock      options exercised                                 |   |                         | 466,929     |   |   |   | 3,000 |   |   |   | 105,599 |   |
| Purchase      of treasury stock                              |   |                         | --          |   |   |   | -- |   |   |   | (3,901 | ) |
| Sale      of treasury stock                                  |   |                         | 248,624     |   |   |   | 651,423 |   |   |   | 458,602 |   |
| Net      cash used in financing activities                   |   |                         | (13,604,724 | ) |   |   | (3,079,735 | ) |   |   | (6,887,861 | ) |
| Net      change in cash and cash equivalents                 |   |                         | 14,711,050  |   |   |   | (5,173,525 | ) |   |   | (6,256,381 | ) |
| Cash      and cash equivalents at beginning of year          |   |                         | 5,203,060   |   |   |   | 10,376,585 |   |   |   | 16,632,966 |   |
| Cash      and cash equivalents at end of year                |   | $                            | 19,914,110  |   |   | $ | 5,203,060 |   |   | $ | 10,376,585 |   |

|                                              |   | 2008   |        |   | 2007   |   |
|---------------------------------------------------|--------|--------|-------------|--------|--------|--------|
|                                              |   |   |        |   |   |   |
| Fair      value of assets acquired                |   | $      | (26,193,020 | )      |   | $      | (30,597,342 | ) |
| Fair      value of liabilities assumed            |   |   | 23,264,998  |   |   |   | 26,546,698 |   |
| Notes      payable and other liabilities incurred |   |   | --          |   |   |   | 2,318,260 |   |
| Cash      paid                                    |   | $      | (2,928,022  | )      |   | $      | (1,732,384 | ) |

----

----

----

|                            |   | Years      Ended December 31, |       |
|---------------------------------|--------|-------------------------------|------------|
|                            |   | 2008                          |       |   | 2007 |   |   | 2006 |   |
| Balance,      beginning of year |   | $                             | 2,356,309  |   |   | $ | 2,712,998 |   |   | $ | 2,183,032 |   |
| Provisions      for losses      |   |                          | 8,931,971  |   |   |   | 5,207,529 |   |   |   | 2,326,442 |   |
| Charge-offs                     |   |                          | (8,512,828 | ) |   |   | (5,564,218 | ) |   |   | (1,796,476 | ) |
| Balance,      end of year       |   | $                             | 2,775,452  |   |   | $ | 2,356,309 |   |   | $ | 2,712,998 |   |

----

----

----

|   | · | Failure      to deliver original documents specified by the  investor. |
|--------|--------|------------------------------------------------------------------------|

|   | · | The      existence of fraud in the origination of the  loan. |
|--------|--------|--------------------------------------------------------------|

|   | · | The      loan becomes delinquent due to nonpayment during the first several months      after it is sold. |
|--------|--------|-----------------------------------------------------------------------------------------------------------|

|   | · | Early      pay-off of a loan, as defined by theagreements. |
|--------|--------|------------------------------------------------------------|

|   | · | Excessive      time to settle a loan. |
|--------|--------|---------------------------------------|

|   | · | Investor      declines purchase. |
|--------|--------|----------------------------------|

|   | · | Discontinued      product and expired commitment |
|--------|--------|--------------------------------------------------|

|   | · | Research      reasons for rejection |
|--------|--------|-------------------------------------|

|   | · | Provide      additional documents |
|--------|--------|-----------------------------------|

|   | · | Request      investor exceptions |
|--------|--------|----------------------------------|

|   | · | Appeal      rejection decision to purchasecommittee |
|--------|--------|-----------------------------------------------------|

|   | · | Commit      to secondary investors |
|--------|--------|------------------------------------|

|   | · | For      loans that have an active market we use the market price on the      repurchased date. |
|--------|--------|-------------------------------------------------------------------------------------------------|

|   | · | For      loans where there is no market but there is a similar product, we use the      market value for the similar product on the repurchased    date. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | For      loans where no active market exists on the repurchased date, we determine      that the unpaid principal balance best approximates the market value on      the repurchased date, after considering the fair value of the underlying      real estate collateral and estimated future cash  flows. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

----

| Loans Receivable                    |   | $      | 3,178,901  |   |
|-------------------------------------|--------|--------|------------|--------|
| Other      current assets           |   |   | 55,295     |   |
| Office      furniture and equipment |   |   | 18,078     |   |
| Goodwill                            |   |   | 391,847    |   |
| Total      Assets                   |   |   | 3,644,121  |   |
| Note      payable to bank, current  |   |   | (1,971,764 | )      |
| Other      current liabilities      |   |   | (40,857    | )      |
| Net      Assets Acquired            |   | $      | 1,631,500  |   |

----

| Investment in securities                      |   | $      | 23,146,994  |   |
|-----------------------------------------------|--------|--------|-------------|--------|
| Policy      and other loans                   |   |   | 573,821     |   |
| Accrued      investment income                |   |   | 274,370     |   |
| Receivables                                   |   |   | 143,183     |   |
| Furniture      and equipment                  |   |   | 112,324     |   |
| Value      of business acquired               |   |   | 765,787     |   |
| Total      assets acquired                    |   |   | 25,016,479  |   |
| Future      life, annuity and other benefits  |   |   | (21,888,930 | )      |
| Checks      written in excess of cash in bank |   |   | (524,528    | )      |
| Other      liabilities and accrued expenses   |   |   | (183,857    | )      |
| Total      Liabilities Assumed                |   |   | (22,597,315 | )      |
| Fair      Value of Net Assets Acquired        |   | $      | 2,419,164   |   |

----

| Investment in securities                                          |   | $      | 1,200,865   |   |
|-------------------------------------------------------------------|--------|--------|-------------|--------|
| Policy      and mortgage loans                                    |   |   | 1,050,028   |   |
| Cash                                                              |   |   | 392,785     |   |
| Receivable      from reinsurer - Security      National Life |   |   | 22,235,131  |   |
| Other      assets                                                 |   |   | 49,369      |   |
| Deferred      tax asset                                           |   |   | 298,418     |   |
| Value      of business acquired                                   |   |   | 227,573     |   |
| Total      assets acquired                                        |   |   | 25,454,169  |   |
| Future      life, annuity and other benefits                      |   |   | (22,789,846 | )      |
| Fair      Value of Net Assets Acquired                            |   | $      | 2,664,323   |   |

|                                                                         |   | For      the Years EndedDecember      31,(unaudited) |        |
|------------------------------------------------------------------------------|--------|------------------------------------------------------|-------------|
|                                                                         |   | 2008                                                 |        |   | 2007 |   |   | 2006 |   |
| Total      revenues                                                          |   | $                                                    | 221,348,000 |   |   | $ | 216,492,000 |   |   | $ | 159,546,000 |   |
| Net      earnings                                                            |   | $                                                    | 717,000     |   |   | $ | 2,936,000 |   |   | $ | 5,402,000 |   |
| Net      earnings per Class A equivalent common share                        |   | $                                                    | 0.09        |   |   | $ | 0.37 |   |   | $ | 0.73 |   |
| Net      earnings per Class A equivalent common share assuming      dilution |   | $                                                    | 0.09        |   |   | $ | 0.36 |   |   | $ | 0.72 |   |

----

| 3) | Investments |
|----|-------------|

|                                                                                |   |      |        |   | Gross      |   |      | Gross      |   |   | Estimated   |   |
|-------------------------------------------------------------------------------------|--------|-----------|-------------|--------|------------|--------|-----------|------------|--------|--------|-------------|--------|
|                                                                                |   | Amortized |        |   | Unrealized |   |      | Unrealized |   |   | Fair        |   |
|                                                                                |   | Cost      |        |   | Gains      |   |      | Losses     |   |   | Value       |   |
| December 31, 2008:                                                                  |   |      |        |   |       |   |      |       |   |   |        |   |
| Fixed      maturity securities held to maturity carried at amortized      cost:     |   |      |        |   |       |   |      |       |   |   |        |   |
|                                                                                |   |      |        |   |       |   |      |       |   |   |        |   |
| Bonds:                                                                              |   |      |        |   |       |   |      |       |   |   |        |   |
| U.S.      Treasury securities and      obligations of U.S Government      agencies  |   | $         | 17,138,738  |   |       | $      | 1,201,488 |       |   | $      | ---         |   |   | $ | 18,340,226 |   |
|                                                                                |   |      |        |   |       |   |      |       |   |   |        |   |   |   |   |   |
| Obligations      of states and political      subdivisions                          |   |      | 1,474,934   |   |       |   | 59,035    |       |   |   | (16,347     | )      |   |   | 1,517,622 |   |
|                                                                                |   |      |        |   |       |   |      |       |   |   |        |   |   |   |   |   |
| Corporate      securities including public      utilities                           |   |      | 97,610,026  |   |       |   | 1,280,795 |       |   |   | (12,073,677 | )      |   |   | 86,817,144 |   |
|                                                                                |   |      |        |   |       |   |      |       |   |   |        |   |   |   |   |   |
| Mortgage-backed      securities                                                     |   |      | 7,586,553   |   |       |   | 68,466    |       |   |   | (1,580,189  | )      |   |   | 6,074,830 |   |
|                                                                                |   |      |        |   |       |   |      |       |   |   |        |   |   |   |   |   |
| Redeemable      preferred stock                                                     |   |      | 1,535,943   |   |       |   | 565       |       |   |   | (335,703    | )      |   |   | 1,200,805 |   |
|                                                                                     |   |      |        |   |       |   |      |       |   |   |        |   |   |   |   |   |
| Total      fixed maturity securities      held to maturity                          |   | $         | 125,346,194 |   |       | $      | 2,610,349 |       |   | $      | (14,005,916 | )      |   | $ | 113,950,627 |   |
|                                                                                |   |      |        |   |       |   |      |       |   |   |        |   |   |   |   |   |
| Securities      available for sale carried at estimated      fair value:            |   |      |        |   |       |   |      |       |   |   |        |   |   |   |   |   |
| Fixed      maturity securities available for sale:                                  |   |      |        |   |       |   |      |       |   |   |        |   |   |   |   |   |
| U.S.      Treasury securities and      obligations of U.S. Government      agencies |   | $         | 98,203      |   |       | $      | 38,188    |       |   | $      | ---         |   |   | $ | 136,391 |   |
|                                                                                |   |      |        |   |       |   |      |       |   |   |        |   |   |   |   |   |
| Corporate      securities including public      utilities                           |   |      | 1,045,399   |   |       |   | 54,772    |       |   |   | ---         |   |   |   | 1,100,171 |   |
|                                                                                     |   |      |        |   |       |   |      |       |   |   |        |   |   |   |   |   |
| Total      fixed maturity securities available      for sale                        |   | $         | 1,143,602   |   |       | $      | 92,960    |       |   | $      | ---         |   |   | $ | 1,236,562 |   |

----

| 3) | Investments      (Continued) |
|----|------------------------------|

|                                                                                                       |   |      |        |   | Gross      |   |    | Gross      |   |   | Estimated |   |
|------------------------------------------------------------------------------------------------------------|--------|-----------|-------------|--------|------------|--------|---------|------------|--------|--------|-----------|--------|
|                                                                                                       |   | Amortized |        |   | Unrealized |   |    | Unrealized |   |   | Fair      |   |
|                                                                                                       |   | Cost      |        |   | Gains      |   |    | Losses     |   |   | Value     |   |
| December 31, 2008:                                                                                         |   |      |        |   |       |   |    |       |   |   |      |   |
|                                                                                                       |   |      |        |   |       |   |    |       |   |   |      |   |
| Equity      securities available for sale at      estimated fair value:                                    |   |      |        |   |       |   |    |       |   |   |      |   |
|                                                                                                       |   |      |        |   |       |   |    |       |   |   |      |   |
| Non-redeemable      preferred stock                                                                        |   | $         | 20,281      |   |       | $      | ---     |       |   | $      | (6,092    | )      |   | $ | 14,189 |   |
|                                                                                                       |   |      |        |   |       |   |    |       |   |   |      |   |   |   |   |   |
| Common      stock:                                                                                         |   |      |        |   |       |   |    |       |   |   |      |   |   |   |   |   |
|                                                                                                       |   |      |        |   |       |   |    |       |   |   |      |   |   |   |   |   |
| Public      utilities                                                                                      |   |      | 403,249     |   |       |   | 220,045 |       |   |   | (51,105   | )      |   |   | 572,189 |   |
| Banks,      trusts and insurance companies                                                                 |   |      | 479,663     |   |       |   | 154,313 |       |   |   | -         |   |   |   | 633,976 |   |
| Industrial,      miscellaneous and all other                                                               |   |      | 3,755,523   |   |       |   | 44,260  |       |   |   | (402,462  | )      |   |   | 3,397,321 |   |
|                                                                                                       |   |      |        |   |       |   |    |       |   |   |      |   |   |   |   |   |
| Total      equity securities available for sale at      estimated fair value                               |   | $         | 4,658,716   |   |       | $      | 418,618 |       |   | $      | (459,659  | )      |   | $ | 4,617,675 |   |
|                                                                                                       |   |      |        |   |       |   |    |       |   |   |      |   |   |   |   |   |
| Total      securities available for sale carried      at estimated fair value                              |   | $         | 5,802,318   |   |       | $      | 511,578 |       |   | $      | (459,659  | )      |   | $ | 5,854,237 |   |
|                                                                                                       |   |      |        |   |       |   |    |       |   |   |      |   |   |   |   |   |
| Mortgage      loans on real estate and      construction loans held for investment at      amortized cost: |   |      |        |   |       |   |    |       |   |   |      |   |   |   |   |   |
| Residential                                                                                                |   | $         | 70,082,011  |   |       |   |    |       |   |   |      |   |   |   |   |   |
| Residential      construction                                                                              |   |      | 35,742,891  |   |       |   |    |       |   |   |      |   |   |   |   |   |
| Commercial                                                                                                 |   |      | 23,548,243  |   |       |   |    |       |   |   |      |   |   |   |   |   |
| Less:      Allowance for loan losses                                                                       |   |      | (4,780,467  | )      |       |   |    |       |   |   |      |   |   |   |   |   |
|                                                                                                            |   |      |        |   |       |   |    |       |   |   |      |   |   |   |   |   |
| Total      mortgage loans on real estate and construction      loans held for investment              |   | $         | 124,592,678 |   |       |   |    |       |   |   |      |   |   |   |   |   |
|                                                                                                       |   |      |        |   |       |   |    |       |   |   |      |   |   |   |   |   |
| Real      estate at cost – net of depreciation                                                       |   | $         | 22,417,639  |   |       |   |    |       |   |   |      |   |   |   |   |   |
|                                                                                                       |   |      |        |   |       |   |    |       |   |   |      |   |   |   |   |   |
| Policy,      student and other loans at amortized      cost - net of allowance for doubtful accounts       |   | $         | 18,493,751  |   |       |   |    |       |   |   |      |   |   |   |   |   |
|                                                                                                       |   |      |        |   |       |   |    |       |   |   |      |   |   |   |   |   |
| Short-term      investments at amortized cost                                                              |   | $         | 5,282,986   |   |       |   |    |       |   |   |      |   |   |   |   |   |

----

| 3) | Investments      (Continued) |
|----|------------------------------|

|                                                                                |   |      |        |   | Gross      |   |    | Gross      |   |   | Estimated  |   |
|-------------------------------------------------------------------------------------|--------|-----------|-------------|--------|------------|--------|---------|------------|--------|--------|------------|--------|
|                                                                                |   | Amortized |        |   | Unrealized |   |    | Unrealized |   |   | Fair       |   |
|                                                                                |   | Cost      |        |   | Gains      |   |    | Losses     |   |   | Value      |   |
| December 31, 2007:                                                                  |   |      |        |   |       |   |    |       |   |   |       |   |
| Fixed      maturity securities held to maturity carried at amortized      cost:     |   |      |        |   |       |   |    |       |   |   |       |   |
|                                                                                |   |      |        |   |       |   |    |       |   |   |       |   |
| Bonds:                                                                              |   |      |        |   |       |   |    |       |   |   |       |   |
| U.S.      Treasury securities and      obligations of U.S Government      agencies  |   | $         | 21,259,020  |   |       | $      | 262,841 |       |   | $      | (95,806    | )      |   | $ | 21,426,055 |   |
|                                                                                |   |      |        |   |       |   |    |       |   |   |       |   |   |   |   |   |
| Obligations      of states and political      subdivisions                          |   |      | 1,125,955   |   |       |   | 50,742  |       |   |   | (6,577     | )      |   |   | 1,170,120 |   |
|                                                                                |   |      |        |   |       |   |    |       |   |   |       |   |   |   |   |   |
| Corporate      securities including public      utilities                           |   |      | 84,087,132  |   |       |   | 534,929 |       |   |   | (2,596,849 | )      |   |   | 82,025,212 |   |
|                                                                                |   |      |        |   |       |   |    |       |   |   |       |   |   |   |   |   |
| Mortgage-backed      securities                                                     |   |      | 8,917,306   |   |       |   | 52,078  |       |   |   | (470,387   | )      |   |   | 8,498,997 |   |
|                                                                                |   |      |        |   |       |   |    |       |   |   |       |   |   |   |   |   |
| Redeemable      preferred stock                                                     |   |      | 1,506,603   |   |       |   | 2,287   |       |   |   | (152,750   | )      |   |   | 1,356,140 |   |
|                                                                                |   |      |        |   |       |   |    |       |   |   |       |   |   |   |   |   |
| Total      fixed maturity securities      held to maturity                          |   | $         | 116,896,016 |   |       | $      | 902,877 |       |   | $      | (3,322,369 | )      |   | $ | 114,476,524 |   |
|                                                                                |   |      |        |   |       |   |    |       |   |   |       |   |   |   |   |   |
| Securities      available for sale carried at estimated      fair value:            |   |      |        |   |       |   |    |       |   |   |       |   |   |   |   |   |
| Fixed      maturity securities available for sale:                                  |   |      |        |   |       |   |    |       |   |   |       |   |   |   |   |   |
| U.S.      Treasury securities and      obligations of U.S. Government      agencies |   | $         | 98,131      |   |       | $      | 21,596  |       |   | $      | ---        |   |   | $ | 119,727 |   |
|                                                                                |   |      |        |   |       |   |    |       |   |   |       |   |   |   |   |   |
| Corporate      securities including public      utilities                           |   |      | 2,679,854   |   |       |   | 81,339  |       |   |   | ---        |   |   |   | 2,761,193 |   |
|                                                                                     |   |      |        |   |       |   |    |       |   |   |       |   |   |   |   |   |
| Total      fixed maturity securities available      for sale                        |   | $         | 2,777,985   |   |       | $      | 102,935 |       |   | $      | ---        |   |   | $ | 2,880,920 |   |

----

| 3) | Investments      (Continued) |
|----|------------------------------|

|                                                                                                        |   |      |       |   | Gross      |   |      | Gross      |   |   | Estimated |   |
|-------------------------------------------------------------------------------------------------------------|--------|-----------|------------|--------|------------|--------|-----------|------------|--------|--------|-----------|--------|
|                                                                                                        |   | Amortized |       |   | Unrealized |   |      | Unrealized |   |   | Fair      |   |
|                                                                                                        |   | Cost      |       |   | Gains      |   |      | Losses     |   |   | Value     |   |
| December 31, 2007:                                                                                          |   |      |       |   |       |   |      |       |   |   |      |   |
|                                                                                                        |   |      |       |   |       |   |      |       |   |   |      |   |
| Equity      securities available for sale at      estimated fair value:                                     |   |      |       |   |       |   |      |       |   |   |      |   |
|                                                                                                        |   |      |       |   |       |   |      |       |   |   |      |   |
| Non-redeemable      preferred stock                                                                         |   | $         | 20,281     |   |       | $      | ---       |       |   | $      | (3,632    | )      |   | $ | 16,649 |   |
|                                                                                                        |   |      |       |   |       |   |      |       |   |   |      |   |   |   |   |   |
| Common      stock:                                                                                          |   |      |       |   |       |   |      |       |   |   |      |   |   |   |   |   |
|                                                                                                        |   |      |       |   |       |   |      |       |   |   |      |   |   |   |   |   |
| Public      utilities                                                                                       |   |      | 411,992    |   |       |   | 422,865   |       |   |   | (13,627   | )      |   |   | 821,230 |   |
| Banks,      trusts and insurance companies                                                                  |   |      | 520,683    |   |       |   | 1,032,033 |       |   |   | (21,662   | )      |   |   | 1,531,054 |   |
| Industrial,      miscellaneous and all other                                                                |   |      | 1,430,936  |   |       |   | 2,549,020 |       |   |   | (487,597  | )      |   |   | 3,492,359 |   |
|                                                                                                        |   |      |       |   |       |   |      |       |   |   |      |   |   |   |   |   |
| Total      equity securities available for sale at      estimated fair value                                |   | $         | 2,383,892  |   |       | $      | 4,003,918 |       |   | $      | (526,518  | )      |   | $ | 5,861,292 |   |
|                                                                                                        |   |      |       |   |       |   |      |       |   |   |      |   |   |   |   |   |
| Total      securities available for sale carried      at estimated fair value                               |   | $         | 5,161,877  |   |       | $      | 4,106,853 |       |   | $      | (526,518  | )      |   | $ | 8,742,212 |   |
|                                                                                                        |   |      |       |   |       |   |      |       |   |   |      |   |   |   |   |   |
| Mortgage      loans on real estate and construction      loans held for investment at amortized cost:       |   |      |       |   |       |   |      |       |   |   |      |   |   |   |   |   |
| Residential                                                                                                 |   | $         | 21,636,722 |   |       |   |      |       |   |   |      |   |   |   |   |   |
| Residential      construction                                                                               |   |      | 37,843,883 |   |       |   |      |       |   |   |      |   |   |   |   |   |
| Commercial                                                                                                  |   |      | 34,838,581 |   |       |   |      |       |   |   |      |   |   |   |   |   |
| Less:      Allowance for loan losses                                                                        |   |      | (1,435,131 | )      |       |   |      |       |   |   |      |   |   |   |   |   |
|                                                                                                             |   |      |       |   |       |   |      |       |   |   |      |   |   |   |   |   |
| Total      mortgage loans on real estate and construction      loans held for investment                    |   | $         | 92,884,055 |   |       |   |      |       |   |   |      |   |   |   |   |   |
|                                                                                                        |   |      |       |   |       |   |      |       |   |   |      |   |   |   |   |   |
| Real      estate at cost – net of depreciation                                                        |   | $         | 7,946,304  |   |       |   |      |       |   |   |      |   |   |   |   |   |
|                                                                                                        |   |      |       |   |       |   |      |       |   |   |      |   |   |   |   |   |
| Policy,      student and other loans - at      amortized cost - net of allowance for      doubtful accounts |   | $         | 16,860,874 |   |       |   |      |       |   |   |      |   |   |   |   |   |
|                                                                                                        |   |      |       |   |       |   |      |       |   |   |      |   |   |   |   |   |
| Short-term      investments at amortized cost                                                               |   | $         | 5,337,367  |   |       |   |      |       |   |   |      |   |   |   |   |   |

----

| 3) | Investments      (Continued) |
|----|------------------------------|

|                                  |   | UnrealizedLosses      forLess      thanTwelveMonths |       |   | No.      ofInvestmentPositions |   |   | UnrealizedLosses      forMore      thanTwelveMonths |   |   | No.      ofInvestmentPositions |   |   | TotalUnrealizedLoss |   |
|---------------------------------------|--------|-----------------------------------------------------|------------|--------|--------------------------------|--------|--------|-----------------------------------------------------|--------|--------|--------------------------------|--------|--------|---------------------|--------|
| At December 31, 2008                  |   |                                                |       |   |                           |   |   |                                                |   |   |                           |   |   |                |   |
| Interest      rate or spread widening |   | $                                                   | 4,425,497  |   |                           |   | 87     |                                                |   | $      | 8,000,230                      |   |   |                | 105    |   |   | $ | 12,425,727 |   |
| Mortgage      and other               |   |                                                |       |   |                           |   |   |                                                |   |   |                           |   |   |                |   |   |   |   |   |   |
| asset-backed      securities          |   |                                                | --         |   |                           |   | --     |                                                |   |   | 1,580,189                      |   |   |                | 12     |   |   |   | 1,580,189 |   |
| Total      unrealized losses          |   | $                                                   | 4,425,497  |   |                           |   | 87     |                                                |   | $      | 9,580,419                      |   |   |                | 117    |   |   | $ | 14,005,916 |   |
| Fair      Value                       |   | $                                                   | 30,720,910 |   |                           |   |   |                                                |   | $      | 35,178,465                     |   |   |                |   |   |   | $ | 65,899,375 |   |
|                                  |   |                                                |       |   |                           |   |   |                                                |   |   |                           |   |   |                |   |   |   |   |   |   |
| At December 31, 2007                  |   |                                                |       |   |                           |   |   |                                                |   |   |                           |   |   |                |   |   |   |   |   |   |
| Interest      rate or spread widening |   | $                                                   | 1,682,779  |   |                           |   | 66     |                                                |   | $      | 1,169,203                      |   |   |                | 71     |   |   | $ | 2,851,982 |   |
| Mortgage      and other               |   |                                                |       |   |                           |   |   |                                                |   |   |                           |   |   |                |   |   |   |   |   |   |
| asset-backed      securities          |   |                                                | 176,709    |   |                           |   | 5      |                                                |   |   | 293,678                        |   |   |                | 9      |   |   |   | 470,387 |   |
| Total      unrealized losses          |   | $                                                   | 1,859,488  |   |                           |   | 71     |                                                |   | $      | 1,462,881                      |   |   |                | 80     |   |   | $ | 3,322,369 |   |
| Fair      Value                       |   | $                                                   | 28,688,080 |   |                           |   |   |                                                |   | $      | 27,653,726                     |   |   |                |   |   |   | $ | 56,341,806 |   |

----

| 3) | Investments      (Continued) |
|----|------------------------------|

|                                         |   | UnrealizedLosses      forLess      thanTwelveMonths |    |   | No.      ofInvestmentPositions |   |   | UnrealizedLosses      forMore      thanTwelveMonths |   |   | No.      ofInvestmentPositions |   |   | TotalUnrealizedLosses |   |
|----------------------------------------------|--------|-----------------------------------------------------|---------|--------|--------------------------------|--------|--------|-----------------------------------------------------|--------|--------|--------------------------------|--------|--------|-----------------------|--------|
| At December 31, 2008                         |   |                                                |    |   |                           |   |   |                                                |   |   |                           |   |   |                  |   |
| Non-redeemable      preferred stock          |   | $                                                   | -       |   |                           |   | -      |                                                |   | $      | 6,092                          |   |   |                  | 2      |   |   | $ | 6,092 |   |
| Public      utilities                        |   |                                                | -       |   |                           |   | -      |                                                |   |   | -                              |   |   |                  | -      |   |   |   | - |   |
| Banks,      trusts and insurance companies   |   |                                                | 51,105  |   |                           |   | 2      |                                                |   |   |                           |   |   |                  | 1      |   |   |   | 51,105 |   |
| Industrial,      miscellaneous and all other |   |                                                | 273,878 |   |                           |   | 11     |                                                |   |   | 8,795                          |   |   |                  | 3      |   |   |   | 282,673 |   |
| Total      unrealized losses                 |   | $                                                   | 324,983 |   |                           |   | 13     |                                                |   | $      | 14,887                         |   |   |                  | 6      |   |   | $ | 339,870 |   |
| Fair      Value                              |   | $                                                   | 675,284 |   |                           |   |   |                                                |   | $      | 66,722                         |   |   |                  |   |   |   | $ | 742,006 |   |
|                                         |   |                                                |    |   |                           |   |   |                                                |   |   |                           |   |   |                  |   |   |   |   |   |   |
| At December 31, 2007                         |   |                                                |    |   |                           |   |   |                                                |   |   |                           |   |   |                  |   |   |   |   |   |   |
| Non-redeemable      preferred stock          |   | $                                                   | -       |   |                           |   | -      |                                                |   | $      | 3,632                          |   |   |                  | 2      |   |   | $ | 3,632 |   |
| Public      utilities                        |   |                                                | 2,870   |   |                           |   | 1      |                                                |   |   | 10,757                         |   |   |                  | 1      |   |   |   | 13,627 |   |
| Banks,      trusts and insurance companies   |   |                                                | 21,662  |   |                           |   | 1      |                                                |   |   | -                              |   |   |                  | -      |   |   |   | 21,662 |   |
| Industrial,      miscellaneous and all other |   |                                                | 80,333  |   |                           |   | 6      |                                                |   |   | 407,264                        |   |   |                  | 5      |   |   |   | 487,597 |   |
| Total      unrealized losses                 |   | $                                                   | 104,865 |   |                           |   | 8      |                                                |   | $      | 421,653                        |   |   |                  | 8      |   |   | $ | 526,518 |   |
| Fair      Value                              |   | $                                                   | 494,728 |   |                           |   |   |                                                |   | $      | 85,453                         |   |   |                  |   |   |   | $ | 580,181 |   |

----

| 3) | Investments      (Continued) |
|----|------------------------------|

|                            |   | Amortized |        |   | Estimated      Fair |   |
|---------------------------------|--------|-----------|-------------|--------|---------------------|--------|
|                            |   | Cost      |        |   | Value               |   |
| Held      to Maturity:          |   |      |        |   |                |   |
| Due      in 2009                |   | $         | 2,189,045   |   |                | $      | 2,057,122 |   |
| Due      in 2010 through 2013   |   |      | 20,523,109  |   |                |   | 20,431,842 |   |
| Due      in 2014 through 2018   |   |      | 38,776,765  |   |                |   | 36,014,691 |   |
| Due      after 2018             |   |      | 54,734,779  |   |                |   | 48,171,337 |   |
| Mortgage-backed      securities |   |      | 7,586,553   |   |                |   | 6,074,830 |   |
| Redeemable      preferred stock |   |      | 1,535,943   |   |                |   | 1,200,805 |   |
| Total      held to maturity     |   | $         | 125,346,194 |   |                | $      | 113,950,627 |   |

|                                |   | Amortized |      |   | Estimated      Fair |   |
|-------------------------------------|--------|-----------|-----------|--------|---------------------|--------|
|                                |   | Cost      |      |   | Value               |   |
| Available      for Sale:            |   |      |      |   |                |   |
| Due      in 2009                    |   | $         | 6,171     |   |                | $      | 6,171 |   |
| Due      in 2010 through 2013       |   |      | 1,039,229 |   |                |   | 1,094,000 |   |
| Due      in 2014 through 2018       |   |      | -         |   |                |   | - |   |
| Due      after 2018                 |   |      | 98,203    |   |                |   | 136,391 |   |
| Non-redeemable      preferred stock |   |      | 20,280    |   |                |   | 14,189 |   |
| Common      stock                   |   |      | 4,022,002 |   |                |   | 4,603,486 |   |
| Total      available for sale       |   | $         | 5,185,885 |   |                | $      | 5,854,237 |   |

|                                                  |   | 2008   |       |   | 2007   |   |      | 2006   |   |
|-------------------------------------------------------|--------|--------|------------|--------|--------|--------|-----------|--------|--------|
| Fixed      maturity securities held to      maturity: |   |   |       |   |   |   |      |   |   |
| Gross      realized gains                             |   | $      | 90,243     |   |   | $      | 94,984    |   |   | $ | 1,282 |   |
| Gross      realized losses                            |   |   | (2,343,264 | )      |   |   | (27,065   | )      |   |   | (28,439 | ) |
|                                                  |   |   |       |   |   |   |      |   |   |   |   |   |
| Securities      available for sale:                   |   |   |       |   |   |   |      |   |   |   |   |   |
| Gross      realized gains                             |   |   | 1,211,932  |   |   |   | 175,990   |   |   |   | 106,252 |   |
| Gross      realized losses                            |   |   | (560,853   | )      |   |   | (860      | )      |   |   | (12,996 | ) |
|                                                  |   |   |       |   |   |   |      |   |   |   |   |   |
| Other      assets                                     |   |   | (131,773   | )      |   |   | 764,525   |   |   |   | 825,205 |   |
| Total                                                 |   | $      | (1,733,715 | )      |   | $      | 1,007,574 |   |   | $ | 891,304 |   |

----

| 3) | Investments      (Continued) |
|----|------------------------------|

|                                                                                              |   | 2008   |       |   | 2007   |   |       | 2006   |   |
|---------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
| Fixed      maturity securities                                                                    |   | $      | 7,167,007  |   |   | $      | 6,045,141  |   |   | $ | 5,893,909 |   |
| Equity      securities                                                                            |   |   | 266,533    |   |   |   | 161,850    |   |   |   | 132,521 |   |
| Mortgage      loans on real estate                                                                |   |   | 6,857,757  |   |   |   | 6,759,943  |   |   |   | 6,884,991 |   |
| Real      estate                                                                                  |   |   | 1,563,134  |   |   |   | 1,273,652  |   |   |   | 1,159,572 |   |
| Policy,      student and other loans                                                              |   |   | 699,592    |   |   |   | 707,068    |   |   |   | 713,798 |   |
| Short-term      investments, principally      gains on sale of mortgage      loans and other |   |   | 14,265,269 |   |   |   | 18,898,925 |   |   |   | 10,409,719 |   |
| Gross      investment income                                                                      |   |   | 30,819,292 |   |   |   | 33,846,579 |   |   |   | 25,194,510 |   |
| Investment      expenses                                                                          |   |   | (2,715,783 | )      |   |   | (1,890,135 | )      |   |   | (1,948,879 | ) |
| Net      investment income                                                                        |   | $      | 28,103,509 |   |   | $      | 31,956,444 |   |   | $ | 23,245,631 |   |

----

|                                                               |   | 2008   |       |   | 2007   |   |
|--------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Trade      contracts                                               |   | $      | 10,093,271 |   |   | $      | 8,870,303 |   |
| Advances      receivables from sales agents                        |   |   | 2,438,371  |   |   |   | 2,463,799 |   |
| Held      in Escrow – Capital Reserve Life/Southern Security |   |   | 629,402    |   |   |   | 2,100,000 |   |
| Other                                                              |   |   | 1,957,329  |   |   |   | 1,602,765 |   |
| Total      receivables                                             |   |   | 15,118,373 |   |   |   | 15,036,867 |   |
| Allowance      for doubtful accounts                               |   |   | (1,983,293 | )      |   |   | (1,293,185 | ) |
| Net      receivables                                               |   | $      | 13,135,080 |   |   | $      | 13,743,682 |   |

|                                       |   | December      31, |       |
|--------------------------------------------|--------|-------------------|------------|
|                                       |   | 2008              |       |   | 2007 |   |   | 2006 |   |
| Balance      at beginning of year          |   | $                 | 11,686,080 |   |   | $ | 11,882,047 |   |   | $ | 12,663,221 |   |
| Value      of  business acquired |   |              | 590,950    |   |   |   | 755,787 |   |   |   | 210,926 |   |
| Imputed      interest at 7%                |   |              | 807,217    |   |   |   | 824,502 |   |   |   | 851,702 |   |
| Amortization                               |   |              | (1,706,971 | ) |   |   | (1,776,141 | ) |   |   | (1,843,802 | ) |
| Net      amortization charged to income    |   |              | (899,754   | ) |   |   | (951,639 | ) |   |   | (992,100 | ) |
| Balance      at end of year                |   | $                 | 11,377,276 |   |   | $ | 11,686,080 |   |   | $ | 11,882,047 |   |

|                                     |   | December      31, |        |
|------------------------------------------|--------|-------------------|-------------|
|                                     |   | 2008              |        |   | 2007 |   |
|  Land      and buildings            |   | $                 | 15,860,356  |   |   | $ | 17,232,624 |   |
|  Furniture      and equipment       |   |              | 15,877,294  |   |   |   | 13,260,121 |   |
|                                     |   |              | 31,737,650  |   |   |   | 30,492,745 |   |
|  Less      accumulated depreciation |   |              | (17,688,418 | ) |   |   | (15,664,046 | ) |
|  Total                              |   | $                 | 14,049,232  |   |   | $ | 14,828,699 |   |

----

|                                                                            |   | December      31, |      |
|---------------------------------------------------------------------------------|--------|-------------------|-----------|
|                                                                            |   | 2008              |      |   | 2007 |   |
|  6%      note payable in monthly installments of $5,693                    |   |              |      |   |   |   |
|  including      principal and interest, collateralized by real             |   |              |      |   |   |   |
|  property,      with a book value of approximately $749,000,               |   |              |      |   |   |   |
|  due      September 2010.                                                  |   | $                 | 496,994   |   |   | $ | 534,311 |   |
|                                                                            |   |              |      |   |   |   |   |   |
|  6.34%      note payable in monthly installments of $13,556                |   |              |      |   |   |   |   |   |
|  including      principal and interest, collateralized by real             |   |              |      |   |   |   |   |   |
|  property      with a book value of approximately $596,000,                |   |              |      |   |   |   |   |   |
|  due      November 2017.                                                   |   |              | 1,226,975 |   |   |   | 1,322,676 |   |
|                                                                            |   |              |      |   |   |   |   |   |
| Bank      prime rate less .28% (2.97% at December 31, 2008)                     |   |              |      |   |   |   |   |   |
| collateralized      by 15,000 shares of Security National Life Insurance        |   |              |      |   |   |   |   |   |
| Company      Stock, due June 2011.                                              |   |              | 2,003,527 |   |   |   | 3,129,896 |   |
|                                                                            |   |              |      |   |   |   |   |   |
| Bank      prime rate less .75% (2.50% at December 31, 2008)                     |   |              |      |   |   |   |   |   |
| revolving      line of credit of $7,800,000, accrued interest                   |   |              |      |   |   |   |   |   |
| paid      quarterly, extended to June 2011.                                     |   |              | 1,675,000 |   |   |   | 500,000 |   |
|                                                                            |   |              |      |   |   |   |   |   |
| Bank      prime rate less .5% ($2.75% at December 31, 2008)revolving            |   |              |      |   |   |   |   |   |
| line      of credit of $2,000,000, accrued interest paid monthly,      extended |   |              |      |   |   |   |   |   |
| to      June 15, 2009. Letters of credit can be issued up to    $450,000.       |   |              | --        |   |   |   | -- |   |
|                                                                            |   |              |      |   |   |   |   |   |
| One      year LIBOR rate (6.95% at December 31, 2007)                           |   |              |      |   |   |   |   |   |
| revolving      line of credit of $40,000,000 collateralized                     |   |              |      |   |   |   |   |   |
| by      commercial and residential loans, accrued interest                      |   |              |      |   |   |   |   |   |
| paid      monthly, balance paid in 2008                                         |   |              | --        |   |   |   | 6,500,000 |   |
|                                                                            |   |              |      |   |   |   |   |   |
| Mark      to market of interest rate swaps (discussed below)    adjustment      |   |              | 167,528   |   |   |   | 26,941 |   |
|                                                                            |   |              |      |   |   |   |   |   |
| Other      collateralized bank loans payable                                    |   |              | 568,178   |   |   |   | 538,842 |   |
| Total      bank loans                                                           |   |              | 6,138,202 |   |   |   | 12,552,666 |   |
|                                                                            |   |              |      |   |   |   |   |   |
| Less      current installments                                                  |   |              | 2,018,662 |   |   |   | 8,842,885 |   |
| Bank      loans, excluding current installments                                 |   | $                 | 4,119,540 |   |   | $ | 3,709,781 |   |

----

----

|                                                                    |   | December      31, |    |
|-------------------------------------------------------------------------|--------|-------------------|---------|
|                                                                    |   | 2008              |    |   | 2007 |   |
| Unsecured      note payable 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 of $5,900, due September 2011.                    |   | $                 | 156,581 |   |   | $ | 222,538 |   |
|                                                                    |   |              |    |   |   |   |   |   |
| 9%      note payable in monthly installments of                         |   |              |    |   |   |   |   |   |
| $10,000      including principal and                                    |   |              |    |   |   |   |   |   |
| interest,      collateralized by real property,                         |   |              |    |   |   |   |   |   |
| with      a book value of approximately                                 |   |              |    |   |   |   |   |   |
| $2,908,000,      due July 2009.                                         |   |              | 57,636  |   |   |   | 82,006 |   |
|                                                                    |   |              |    |   |   |   |   |   |
| 5%      note payable to a former owner of C & J Financial           |   |              |    |   |   |   |   |   |
|  due      in monthly installments of $16,737                       |   |              |    |   |   |   |   |   |
|  including      principal and interest, due July 2009.             |   |              | 94,276  |   |   |   | 305,129 |   |
|                                                                    |   |              |    |   |   |   |   |   |
| Other      notes payable                                                |   |              | 193,285 |   |   |   | 209,137 |   |
| Total      notes and contracts payable                                  |   |              | 501,778 |   |   |   | 818,810 |   |
| Less      current installments                                          |   |              | 230,517 |   |   |   | 344,462 |   |
|                                                                    |   |              |    |   |   |   |   |   |
| Notes      and contracts, excluding current  installments     |   | $                 | 271,261 |   |   | $ | 474,348 |   |

----

| 2009       |   | $      | 2,249,179 |   |
|------------|--------|--------|-----------|--------|
| 2010       |   |   | 1,903,372 |   |
| 2011       |   |   | 1,432,695 |   |
| 2012       |   |   | 183,724   |   |
| 2013       |   |   | 166,368   |   |
| Thereafter |   |   | 704,642   |   |
| Total      |   | $      | 6,639,980 |   |

|                                                                                                                  |   | December      31, |       |
|-----------------------------------------------------------------------------------------------------------------------|--------|-------------------|------------|
|                                                                                                                  |   | 2008              |       |   | 2007 |   |
| Trust      investments, at market value                                                                               |   | $                 | 1,840,119  |   |   | $ | 1,604,600 |   |
| Note      receivables from Cottonwood Mortuary and  Singing      Hills Cemetery eliminated in consolidation |   |              | 1,120,950  |   |   |   | 1,140,702 |   |
| Total      trust assets                                                                                               |   |              | 2,961,069  |   |   |   | 2,745,302 |   |
| Cemetery      perpetual care obligation                                                                               |   |              | (2,647,984 | ) |   |   | (2,473,758 | ) |
| Fair      value of trust assets in excess of trust obligations                                                        |   | $                 | 313,085    |   |   | $ | 271,544 |   |

----

|                                                             |   | December      31, |      |
|------------------------------------------------------------------|--------|-------------------|-----------|
|                                                             |   | 2008              |      |   | 2007 |   |
| Cash      and cash equivalents                                   |   | $                 | 911,060   |   |   | $ | 843,355 |   |
| Mutual      funds                                                |   |              | 245,285   |   |   |   | 301,223 |   |
| Fixed      maturity securities                                   |   |              | 8,775     |   |   |   | 8,775 |   |
| Equity      securities                                           |   |              | 75,918    |   |   |   | 77,638 |   |
| Participating      in Mortgage loans with Security National Life |   |              | 2,836,038 |   |   |   | 4,480,063 |   |
| Total                                                            |   | $                 | 4,077,076 |   |   | $ | 5,711,054 |   |

|     |   | December      31, |       |
|----------|--------|-------------------|------------|
|     |   | 2008              |       |   | 2007 |   |
| Current  |   | $                 | 276,096    |   |   | $ | 380,171 |   |
| Deferred |   |              | 14,698,148 |   |   |   | 15,799,425 |   |
| Total    |   | $                 | 14,974,244 |   |   | $ | 16,179,596 |   |

|                                   |   | 2008   |       |   | 2007   |   |
|----------------------------------------|--------|--------|------------|--------|--------|--------|
| Assets                                 |   |   |       |   |   |   |
| Future      policy benefits            |   | $      | (5,693,225 | )      |   | $      | (4,417,044 | ) |
| Unearned      premium                  |   |   | (1,799,650 | )      |   |   | (1,848,396 | ) |
| Other                                  |   |   | (744,042   | )      |   |   | (1,684,564 | ) |
| Less:      Valuation allowance         |   |   | 5,781,043  |   |   |   | 5,113,793 |   |
| Total      deferred tax assets         |   |   | (2,455,874 | )      |   |   | (2,836,211 | ) |
|                                   |   |   |       |   |   |   |   |   |
| Liabilities                            |   |   |       |   |   |   |   |   |
| Deferred      policy acquisition costs |   |   | 8,756,407  |   |   |   | 8,462,764 |   |
| Value      of business acquired        |   |   | 4,210,547  |   |   |   | 4,269,546 |   |
| Installment      sales                 |   |   | 2,317,015  |   |   |   | 2,773,683 |   |
| Trusts                                 |   |   | 1,674,321  |   |   |   | 1,579,181 |   |
| Available      for sale securities     |   |   | (17,179    | )      |   |   | -- |   |
| Tax      on unrealized appreciation    |   |   | 212,911    |   |   |   | 1,550,462 |   |
| Total      deferred tax liabilities    |   |   | 17,154,022 |   |   |   | 18,635,636 |   |
| Net      deferred tax liability        |   | $      | 14,698,148 |   |   | $      | 15,799,425 |   |

----

|                                                                                                  |   | 2008   |    |   | 2007   |   |      | 2006   |   |
|-------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|-----------|--------|--------|
| Current                                                                                               |   | $      | 214,888 |   |   | $      | 375,825   |   |   | $ | 617,203 |   |
| Deferred                                                                                              |   |   | (59,230 | )      |   |   | 481,810   |   |   |   | 1,153,985 |   |
| Total                                                                                                 |   | $      | 155,658 |   |   | $      | 857,635   |   |   | $ | 1,771,188 |   |
|                                                                                                  |   |   |    |   |   |   |      |   |   |   |   |   |
| The      reconciliation of income tax expense at the U.S. federal statutory rates      is as follows: |   |
|                                                                                                  |   |   |    |   |   |   |      |   |   |   |   |   |
|                                                                                                  |   | 2008   |    |   | 2007   |   |      | 2006   |   |
| Computed      expense at statutory rate                                                               |   | $      | 248,374 |   |   | $      | 1,061,831 |   |   | $ | 2,344,517 |   |
| Special      deductions allowed                                                                       |   |   |    |   |   |   |      |   |   |   |   |   |
| small      life insurance companies                                                                   |   |   | (20,918 | )      |   |   | (330,804  | )      |   |   | (624,438 | ) |
| Dividends      received deduction                                                                     |   |   | --      |   |   |   | --        |   |   |   | (2,040 | ) |
| Other,      net                                                                                       |   |   | (71,798 | )      |   |   | 126,608   |   |   |   | 53,149 |   |
| Tax      expense                                                                                      |   | $      | 155,658 |   |   | $      | 857,635   |   |   | $ | 1,771,188 |   |

----

| Years      Ending |   |   |      |
|-------------------|--------|--------|-----------|
| December      31: |   |   |      |
| 2009              |   | $      | 1,177,000 |   |
| 2010              |   |   | 695,000   |   |
| 2011              |   |   | 411,000   |   |
| 2012              |   |   | 143,000   |   |
| 2013              |   |   | 26,000    |   |
| Total             |   | $      | 2,452,000 |   |

----

----

----

----

----

----

| 13) | Capital      Stock |
|-----|--------------------|

|                                    |   | Class      A |      |   | Class      C |   |
|-----------------------------------------|--------|--------------|-----------|--------|--------------|--------|
| Balance      at December 31, 2005       |   |         | 7,098,363 |   |         |   | 6,781,060 |   |
|                                    |   |         |      |   |         |   |   |   |
| New      shares issued for compensation |   |         | 500       |   |         |   | -- |   |
| Exercise      of stock options          |   |         | 74,520    |   |         |   | -- |   |
| Stock      dividends                    |   |         | 359,606   |   |         |   | 338,940 |   |
| Conversion      of Class C to Class A   |   |         | 241       |   |         |   | (2,409 | ) |
| Balance      at December 31, 2006       |   |         | 7,533,230 |   |         |   | 7,117,591 |   |
|                                    |   |         |      |   |         |   |   |   |
| Exercise      of stock options          |   |         | (38,487   | )      |         |   | 1,157,626 |   |
| Stock      dividends                    |   |         | 375,413   |   |         |   | 406,217 |   |
| Conversion      of Class C to Class A   |   |         | 15,073    |   |         |   | (150,735 | ) |
|                                    |   |         |      |   |         |   |   |   |
| Balance      at December 31, 2007       |   |         | 7,885,229 |   |         |   | 8,530,699 |   |
|                                    |   |         |      |   |         |   |   |   |
| Exercise      of stock options          |   |         | --        |   |         |   | -- |   |
| Stock      dividends                    |   |         | 394,677   |   |         |   | 423,635 |   |
| Conversion      of Class C to Class A   |   |         | 4,203     |   |         |   | (42,019 | ) |
|                                    |   |         |      |   |         |   |   |   |
| Balance      at December 31, 2008       |   |         | 8,284,109 |   |         |   | 8,912,315 |   |

----

| 13) | Capital Stock      (Continued) |
|-----|--------------------------------|

|                                                                                                               |   | 2008   |      |   | 2007   |   |      | 2006   |   |
|--------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|
| Numerator:                                                                                                         |   |   |      |   |   |   |      |   |   |
| Net      income                                                                                                    |   | $      | 574,853   |   |   | $      | 2,265,396 |   |   | $ | 5,124,450 |   |
|                                                                                                               |   |   |      |   |   |   |      |   |   |   |   |   |
| Denominator:                                                                                                       |   |   |      |   |   |   |      |   |   |   |   |   |
| Denominator      for basic earnings per      share-weighted-average shares                                         |   |   | 8,160,422 |   |   |   | 8,010,635 |   |   |   | 7,808,470 |   |
|                                                                                                               |   |   |      |   |   |   |      |   |   |   |   |   |
| Effect      of dilutive securities:                                                                                |   |   |      |   |   |   |      |   |   |   |   |   |
| Employee      stock options                                                                                        |   |   | --        |   |   |   | 189,356   |   |   |   | 165,081 |   |
| Stock      appreciation rights                                                                                     |   |   | --        |   |   |   | --        |   |   |   | 1,435 |   |
| Dilutive      potential common shares                                                                              |   |   | 8,160,422 |   |   |   | 189,356   |   |   |   | 166,516 |   |
|                                                                                                               |   |   |      |   |   |   |      |   |   |   |   |   |
| Denominator      for diluted earnings per share-adjusted      weighted-average shares      and assumed conversions |   |   | 8,160,422 |   |   |   | 8,199,991 |   |   |   | 7,974,986 |   |
|                                                                                                               |   |   |      |   |   |   |      |   |   |   |   |   |
| Basic      earnings per share                                                                                      |   | $      | 0.07      |   |   | $      | 0.28      |   |   | $ | 0.66 |   |
| Diluted      earnings per share                                                                                    |   | $      | 0.07      |   |   | $      | 0.28      |   |   | $ | 0.64 |   |

| 14) | Stock Compensation      Plans |
|-----|-------------------------------|

----

|                                              |   | Number      ofClass A Shares |   |   | OptionPrice |   |
|---------------------------------------------------|--------|------------------------------|--------|--------|-------------|--------|
| Outstanding      at December 31, 2005             |   |                         | 3,489  |   |        | $      | 2.90 |   |
|                                              |   |                         |   |   |        |   |   |   |
| Adjustment      for the effect of stock dividends |   |                         | 175    |   |        |   |   |   |
|                                              |   |                         |   |   |        |   |   |   |
| Outstanding      at December 31, 2006             |   |                         | 3,664  |   |        | $      | 2.76 |   |
|                                              |   |                         |   |   |        |   |   |   |
| Cancelled                                         |   |                         | (3,664 | )      |        |   |   |   |
|                                              |   |                         |   |   |        |   |   |   |
| Outstanding      at December 31, 2007             |   |                         | --     |   |        |   | -- |   |

----

| Activity of the 1993 Plan is summarized as      follows:                                |                              |           |    |              |   |               |
|-----------------------------------------------------------------------------------------|-----------------------------------|----------------|---------|-------------------|--------|--------------------|
|                                                                                    | Number      ofClass      A Shares |           |    | Option      Price |   |
| Outstanding      at December 31, 2005                                                   |                              |           | 349,955 |              |   | $1.88      - $5.10 |   |
| Adjustment      for the effect of stock dividends                                       |                              |           | 13,345  |              |   |               |   |
| Exercised                                                                               |                              |           | (53,604 | )                 |   |               |   |
| Cancelled                                                                               |                              |           | (29,453 | )                 |   |               |   |
|                                                                                    |                              |           |    |              |   |               |   |
| Outstanding      at December 31, 2006                                                   |                              |           | 280,243 |              |   | $1.79      - $4.86 |   |
| Adjustment      for the effect of stock dividends                                       |                              |           | 13,891  |              |   |               |   |
| Exercised  --                                                                 |                              |           | --      |              |   |               |   |
| Cancelled                                                                               |                              |           | (2,431  | )                 |   |               |   |
|                                                                                    |                              |           |    |              |   |               |   |
| Outstanding      at December 31, 2007                                                   |                              |           | 291,703 |              |   | $1.71      - $4.62 |   |
| Adjustment      for the effect of stock dividends                                       |                              |           | 13,466  |              |   |               |   |
| Exercised                                                                               |                              |           | --      |              |   |               |   |
| Cancelled                                                                               |                              |           | (22,402 | )                 |   |               |   |
|                                                                                    |                              |           |    |              |   |               |   |
| Outstanding      at December 31, 2008                                                   |                              |           | 282,767 |              |   | $1.62      - $4.40 |   |
|                                                                                    |                              |           |    |              |   |               |   |
| Exercisable      at end of year                                                         |                              |           | 282,767 |              |   | $1.62      - $4.40 |   |
|                                                                                    |                              |           |    |              |   |               |   |
| Available      options for future grant 1993      Stock Incentive Plan                  |                              |           | --      |              |   |               |   |
|                                                                                    |                              |           |    |              |   |               |   |
| Weighted      average contractual term of options outstanding      at December 31, 2008 |                              | 2.4      years |    |              |   |               |
|                                                                                    |                              |           |    |              |   |               |   |
| Aggregated      intrinsic value of options outstanding at      December 31, 2008        |                              | $              | --      |              |   |               |   |

----

|                                                                                    |   | Number      of      |   |   |              |   |
|-----------------------------------------------------------------------------------------|--------|---------------------|--------|--------|-------------------|--------|
|                                                                                    |   | Class      A Shares |   |   | Option      Price |   |
| Outstanding      at December 31, 2005                                                   |   |                | 20,716 |   |              |   | $2.00      - $5.19 |   |
| Adjustment      for the effect of stock dividends                                       |   |                | 845    |   |              |   |   |   |
| Granted                                                                                 |   |                | --     |   |              |   |   |   |
| Exercised                                                                               |   |                | (3,828 | )      |              |   |   |   |
|                                                                                    |   |                |   |   |              |   |   |   |
| Outstanding      at December 31, 2006                                                   |   |                | 17,733 |   |              |   | $1.90      - $4.94 |   |
| Adjustment      for the effect of stock dividends                                       |   |                | 695    |   |              |   |   |   |
| Granted                                                                                 |   |                | --     |   |              |   |   |   |
| Exercised                                                                               |   |                | (3,828 | )      |              |   |   |   |
|                                                                                    |   |                |   |   |              |   |   |   |
| Outstanding      at December 31, 2007                                                   |   |                | 14,600 |   |              |   | $2.70      - $4.71 |   |
| Adjustment      for the effect of stock dividends                                       |   |                | 474    |   |              |   |   |   |
| Granted                                                                                 |   |                | --     |   |              |   |   |   |
| Cancelled                                                                               |   |                | (5,104 | )      |              |   |   |   |
| Outstanding      at December 31, 2008                                                   |   |                | 9,970  |   |              |   | $2.58      - $3.02 |   |
|                                                                                    |   |                |   |   |              |   |   |   |
| Exercisable      at end of year                                                         |   |                | 9,970  |   |              |   | $2.58      - $3.02 |   |
|                                                                                    |   |                |   |   |              |   |   |   |
| Available      options for future grant      2000 Director Plan                    |   |                | -0-    |   |              |   |   |   |
|                                                                                    |   |                |   |   |              |   |   |   |
| Weighted      average contractual term of options outstanding      at December 31, 2008 |   | 1.3      years      |   |   |              |   |   |
|                                                                                    |   |                |   |   |              |   |   |   |
| Aggregated      intrinsic value of options outstanding at      December 31, 2008        |   |                | -0-    |   |              |   |   |   |

----

----

|                                                                                    | Number      of      |   | Number      of         | Option            |
|-----------------------------------------------------------------------------------------|---------------------|--------|------------------------|-------------------|
|                                                                                    | Class      A Shares |   | Class      C Shares(1) | Price(1)          |
|                                                                                    |                |   |                   |              |   |   |
| Outstanding      at December 31, 2005                                                   |  533,479       |   |                   |  1,102,500   |   | $2.93      - $3.68 |
| Adjustment      for the effect of stock dividends                                       |  22,823        |   |                   |  55,125      |   |   |
| Granted                                                                                 |  --            |   |                   |  --          |   |   |
| Exercised                                                                               |  (63,881)      |   |                   |  --          |   |   |
| Cancelled                                                                               |  (13,125)      |   |                   |  --          |   |   |
|                                                                                    |                |   |                   |              |   |   |
| Outstanding      at December 31, 2006                                                   |  479,296       |   |                   |  1,157,625   |   | $2.79      - $3.50 |
| Adjustment      for the effect of stock dividends                                       |  21,674        |   |                   |  --          |   |   |
| Granted                                                                                 |  --            |   |                   |  --          |   |   |
| Exercised                                                                               |  (44,650)      |   |                   |  (1,157,625) |   |   |
| Cancelled                                                                               |  (1,158)       |   |                   |  --          |   |   |
|                                                                                    |                |   |                   |              |   |   |
| Outstanding      at December 31, 2007                                                   |  455,162       |   |                   |  --          |   | $2.66      - $3.33 |
| Adjustment      for the effect of stock dividends                                       |  40,006        |   |                   |  75,000      |   |   |
| Granted                                                                                 |  389,923       |   |                   |  1,110,770   |   |   |
| Exercised                                                                               |  --            |   |                   |  --          |   |   |
| Cancelled                                                                               |  (6,032)       |   |                   |  --          |   |   |
|                                                                                    |                |   |                   |              |   |   |
| Outstanding      at December 31, 2008                                                   |  879,059       |   |                   |  1,185,770   |   | $1.43      - $4.03 |
|                                                                                    |                |   |                   |              |   |   |
| Exercisable      at end of year                                                         |  590,499       |   |                   |  393,750     |   | $2.53      - $4.03 |
|                                                                                    |                |   |                   |              |   |   |
| Available      options for future grant 2003      Stock Incentive Plan                  |  119,020       |   |                   |  5           |   |   |
|                                                                                    |                |   |                   |              |   |   |
| Weighted      average contractual term of options outstanding      at December 31, 2008 | 4.8      years      |   |                   |              |   |   |
|                                                                                    |                |   |                   |              |   |   |
| Aggregated      intrinsic value of options outstanding      at December 31, 2008        | -0-                 |   |                   |              |   |   |

----

|                                                                                        |   | Number      of      |   |   |              |   |
|---------------------------------------------------------------------------------------------|--------|---------------------|--------|--------|-------------------|--------|
|                                                                                        |   | Class      A Shares |   |   | Option      Price |   |
| Outstanding      at December 31, 2005                                                       |   |                | --     |   |              |   | -- |   |
| Granted                                                                                     |   |                | 4,000  |   |              |   |   |   |
| Adjustment      for the effect of stock dividends                                           |   |                | 200    |   |              |   |   |   |
|                                                                                        |   |                |   |   |              |   |   |   |
| Outstanding      at December 31, 2006                                                       |   |                | 4,200  |   |              | $      | 5.06 |   |
| Granted                                                                                     |   |                | 4,000  |   |              |   |   |   |
| Adjustment      for the effect of stock dividends                                           |   |                | 410    |   |              |   |   |   |
|                                                                                        |   |                |   |   |              |   |   |   |
| Outstanding      at December 31, 2007                                                       |   |                | 8,610  |   |              | $      | 3.57      - $4.82 |   |
| Granted                                                                                     |   |                | 34,000 |   |              |   |   |   |
| Adjustment      for the effect of stock dividends                                           |   |                | 2,131  |   |              |   |   |   |
|                                                                                        |   |                |   |   |              |   |   |   |
| Outstanding      at December 31, 2008                                                       |   |                | 44,741 |   |              | $      | 1.34      - $4.59 |   |
|                                                                                        |   |                |   |   |              |   |   |   |
| Exercisable      at end of year                                                             |   |                | 16,919 |   |              | $      | 3.40      - $4.59 |   |
|                                                                                        |   |                |   |   |              |   |   |   |
| Available      options for future grant 2006      Stock Incentive Plan                      |   |                | 71,022 |   |              |   |   |   |
|                                                                                        |   |                |   |   |              |   |   |   |
| Weighted      average contractual term of options outstanding      at December 31, 2008     |   | 9.2      years      |   |   |              |   |   |
|                                                                                        |   |                |   |   |              |   |   |   |
| Aggregated      intrinsic value of options outstanding  at      December 31, 2008 |   |                | --     |   |              |   |   |   |

----

----

----

|                                                                                                             |   | 2008      |        |
|------------------------------------------------------------------------------------------------------------------|--------|-----------|-------------|
|                                                                                                             |   | Life      |        |   | Cemetery/ |   |   |   |   |   | Reconciling |   |   |   |   |
|                                                                                                             |   | Insurance |        |   | Mortuary |   |   | Mortgage |   |   | Items |   |   | Consolidated |   |
| Revenues:                                                                                                        |   |      |        |   |   |   |   |   |   |   |   |   |   |   |   |
| From      external sources:                                                                                      |   |      |        |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenue      from customers                                                                                      |   | $         | 35,981,297  |   |   | $ | 12,725,930 |   |   | $ | 143,411,459 |   |   | $ | -- |   |   | $ | 192,118,686 |   |
| Net      investment income                                                                                       |   |      | 15,931,523  |   |   |   | 953,284 |   |   |   | 11,218,702 |   |   |   | -- |   |   |   | 28,103,509 |   |
| Realized      gains on investments      and other assets                                                         |   |      | (1,642,636  | ) |   |   | (91,079 | ) |   |   | -- |   |   |   | -- |   |   |   | (1,733,715 | ) |
| Other      revenues                                                                                              |   |      | 386,354     |   |   |   | 177,997 |   |   |   | 451,019 |   |   |   |   |   |   |   | 1,015,370 |   |
| Intersegment      revenues:                                                                                      |   |      |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      investment income                                                                                       |   |      | 4,818,907   |   |   |   | 120,771 |   |   |   | 358,455 |   |   |   | (5,298,133 | ) |   |   | -- |   |
| Total      revenues                                                                                              |   |      | 55,475,445  |   |   |   | 13,886,903 |   |   |   | 155,439,635 |   |   |   | (5,298,133 | ) |   |   | 219,503,850 |   |
| Expenses:                                                                                                        |   |      |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Death      and other policy benefits                                                                             |   |      | 19,195,170  |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |   |   | 19,195,170 |   |
| Increase      in future policy benefits                                                                          |   |      | 13,709,135  |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |   |   | 13,709,135 |   |
| Amortization      of deferred policy and      preneed acquisition costs and value      of business acquired |   |      | 5,586,848   |   |   |   | 423,425 |   |   |   | -- |   |   |   | -- |   |   |   | 6,010,273 |   |
| Depreciation                                                                                                     |   |      | 663,600     |   |   |   | 863,163 |   |   |   | 534,539 |   |   |   | -- |   |   |   | 2,061,302 |   |
| General,      administrative and other      costs:                                                               |   |      |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Intersegment                                                                                                     |   |      | 24,000      |   |   |   | 65,064 |   |   |   | 257,409 |   |   |   | (346,473 | ) |   |   | -- |   |
| Other                                                                                                            |   |      | 17,766,109  |   |   |   | 12,231,653 |   |   |   | 140,351,243 |   |   |   | -- |   |   |   | 170,349,005 |   |
| Interest      expense:                                                                                           |   |      |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Intersegment                                                                                                     |   |      | 279,489     |   |   |   | 171,057 |   |   |   | 4,501,114 |   |   |   | (4,951,660 | ) |   |   | -- |   |
| Other                                                                                                            |   |      | 191,927     |   |   |   | 256,728 |   |   |   | 6,999,799 |   |   |   | -- |   |   |   | 7,448,454 |   |
| Total      benefits and expenses                                                                                 |   |      | 57,416,278  |   |   |   | 14,011,090 |   |   |   | 152,644,104 |   |   |   | (5,298,133 | ) |   |   | 218,773,339 |   |
| Earnings      (losses) before income taxes                                                                       |   | $         | (1,940,833  | ) |   | $ | (124,187 | ) |   | $ | 2,795,531 |   |   | $ | -- |   |   | $ | 730,511 |   |
|                                                                                                             |   |      |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Identifiable      assets                                                                                         |   | $         | 421,550,749 |   |   | $ | 64,737,730 |   |   | $ | 26,145,713 |   |   | $ | (70,629,667 | ) |   | $ | 441,804,525 |   |
|                                                                                                             |   |      |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Expenditures      for long-lived assets                                                                          |   | $         | 308,226     |   |   | $ | 372,511 |   |   | $ | 643,112 |   |   | $ | -- |   |   | $ | 1,323,849 |   |

----

| 16) | Business Segment      Information (Continued) |
|-----|-----------------------------------------------|

|                                                                                                         |   | 2007      |        |
|--------------------------------------------------------------------------------------------------------------|--------|-----------|-------------|
|                                                                                                         |   | Life      |        |   | Cemetery/ |   |   |   |   |   | Reconciling |   |   |   |   |
| Revenues:                                                                                                    |   | Insurance |        |   | Mortuary |   |   | Mortgage |   |   | Items |   |   | Consolidated |   |
| From      external sources:                                                                                  |   |      |        |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenue      from customers                                                                                  |   | $         | 32,262,837  |   |   | $ | 13,188,655 |   |   | $ | 130,472,166 |   |   | $ | -- |   |   | $ | 175,923,658 |   |
| Net      investment income                                                                                   |   |      | 14,575,311  |   |   |   | 942,637 |   |   |   | 16,438,496 |   |   |   | -- |   |   |   | 31,956,444 |   |
| Realized      gains on investments      and other assets                                                     |   |      | 193,109     |   |   |   | 814,465 |   |   |   | -- |   |   |   | -- |   |   |   | 1,007,574 |   |
| Other      revenues                                                                                          |   |      | 157,670     |   |   |   | 349,789 |   |   |   | 352,947 |   |   |   | -- |   |   |   | 860,406 |   |
| Intersegment      revenues:                                                                                  |   |      |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      investment income                                                                                   |   |      | 6,866,489   |   |   |   | 116,004 |   |   |   | 472,785 |   |   |   | (7,455,278 | ) |   |   | -- |   |
| Total      revenues                                                                                          |   |      | 54,055,416  |   |   |   | 15,411,550 |   |   |   | 147,736,394 |   |   |   | (7,455,278 | ) |   |   | 209,748,082 |   |
| Expenses:                                                                                                    |   |      |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Death      and other policy benefits                                                                         |   |      | 18,353,228  |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |   |   | 18,353,228 |   |
| Increase      in future policy benefits                                                                      |   |      | 11,389,019  |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |   |   | 11,389,019 |   |
| Amortization      of deferred policy and      pre-need acquisition costs and      value of business acquired |   |      | 5,195,549   |   |   |   | 375,250 |   |   |   | -- |   |   |   | -- |   |   |   | 5,570,799 |   |
| Depreciation                                                                                                 |   |      | 715,478     |   |   |   | 829,196 |   |   |   | 537,976 |   |   |   | -- |   |   |   | 2,082,650 |   |
| General,      administration and other costs:                                                                |   |      |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Intersegment                                                                                                 |   |      | 24,000      |   |   |   | 62,869 |   |   |   | 287,864 |   |   |   | (374,733 | ) |   |   | -- |   |
| Other                                                                                                        |   |      | 14,136,583  |   |   |   | 12,581,767 |   |   |   | 129,240,135 |   |   |   | -- |   |   |   | 155,958,485 |   |
| Interest      expense:                                                                                       |   |      |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Intersegment                                                                                                 |   |      | 498,272     |   |   |   | 172,683 |   |   |   | 6,409,590 |   |   |   | (7,080,545 | ) |   |   | -- |   |
| Other                                                                                                        |   |      | 253,720     |   |   |   | 280,506 |   |   |   | 12,736,644 |   |   |   | -- |   |   |   | 13,270,870 |   |
| Total      benefits and expenses                                                                             |   |      | 50,565,849  |   |   |   | 14,302,271 |   |   |   | 149,212,209 |   |   |   | (7,455,278 | ) |   |   | 206,625,051 |   |
| Earnings      (losses) before income taxes                                                                   |   | $         | 3,489,567   |   |   | $ | 1,109,279 |   |   | $ | (1,475,815 | ) |   | $ | -- |   |   | $ | 3,123,031 |   |
|                                                                                                         |   |      |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Identifiable      assets                                                                                     |   | $         | 397,295,306 |   |   | $ | 61,102,244 |   |   | $ | 24,181,819 |   |   | $ | (64,416,724 | ) |   | $ | 418,162,645 |   |
|                                                                                                         |   |      |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Expenditures      for long-lived assets                                                                      |   | $         | 850,270     |   |   | $ | 1,248,701 |   |   | $ | 910,308 |   |   | $ | -- |   |   | $ | 3,009,279 |   |

----

| 16) | Business Segment      Information (Continued) |
|-----|-----------------------------------------------|

|                                                                                                             |   | 2006      |        |
|------------------------------------------------------------------------------------------------------------------|--------|-----------|-------------|
|                                                                                                             |   | Life      |        |   | Cemetery/ |   |   |   |   |   | Reconciling |   |   |   |   |
|                                                                                                             |   | Insurance |        |   | Mortuary |   |   | Mortgage |   |   | Items |   |   | Consolidated |   |
| Revenues:                                                                                                        |   |      |        |   |   |   |   |   |   |   |   |   |   |   |   |
| From      external sources:                                                                                      |   |      |        |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenue      from customers                                                                                      |   | $         | 30,776,491  |   |   | $ | 12,122,728 |   |   | $ | 85,112,831 |   |   | $ |  -- |   |   | $ | 128,012,050 |   |
| Net      investment income                                                                                       |   |      | 13,774,225  |   |   |   | 935,487 |   |   |   | 8,535,919 |   |   |   | -- |   |   |   | 23,245,631 |   |
| Realized      gains on investments      and other assets                                                         |   |      | 131,073     |   |   |   | 760,231 |   |   |   | -- |   |   |   | -- |   |   |   | 891,304 |   |
| Other      revenues                                                                                              |   |      | 34,921      |   |   |   | 108,987 |   |   |   | 237,640 |   |   |   | -- |   |   |   | 381,548 |   |
| Intersegment      revenues:                                                                                      |   |      |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      investment income                                                                                       |   |      | 4,907,414   |   |   |   | 116,004 |   |   |   | 452,070 |   |   |   | (5,475,488 | ) |   |   | -- |   |
| Total      revenues                                                                                              |   |      | 49,624,124  |   |   |   | 14,043,437 |   |   |   | 94,338,460 |   |   |   | (5,475,488 | ) |   |   | 152,530,533 |   |
| Expenses:                                                                                                        |   |      |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Death      and other policy benefits                                                                             |   |      | 16,853,568  |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |   |   | 16,853,568 |   |
| Increase      in future policy benefits                                                                          |   |      | 10,465,268  |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |   |   | 10,465,268 |   |
| Amortization      of deferred policy and      preneed acquisition costs and      value of business acquired |   |      | 3,796,062   |   |   |   | 328,685 |   |   |   |   |   |   |   | -- |   |   |   | 4,124,747 |   |
| Depreciation                                                                                                     |   |      | 487,545     |   |   |   | 754,473 |   |   |   | 540,915 |   |   |   | -- |   |   |   | 1,782,933 |   |
| General,      administrative and other      costs:                                                               |   |      |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Intersegment                                                                                                     |   |      | 24,000      |   |   |   | 60,672 |   |   |   | 294,828 |   |   |   | (379,500 | ) |   |   | -- |   |
| Other                                                                                                            |   |      | 12,603,489  |   |   |   | 11,052,105 |   |   |   | 82,611,487 |   |   |   | -- |   |   |   | 106,267,081 |   |
| Interest      expense:                                                                                           |   |      |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Intersegment                                                                                                     |   |      | 546,075     |   |   |   | 177,359 |   |   |   | 4,372,554 |   |   |   | (5,095,988 | ) |   |   | -- |   |
| Other                                                                                                            |   |      | 376,289     |   |   |   | 307,728 |   |   |   | 5,457,281 |   |   |   | -- |   |   |   | 6,141,298 |   |
| Total      benefits and expenses                                                                                 |   |      | 45,152,296  |   |   |   | 12,681,022 |   |   |   | 93,277,065 |   |   |   | (5,475,488 | ) |   |   | 145,634,895 |   |
| Earnings      before income taxes                                                                                |   | $         | 4,471,828   |   |   | $ | 1,362,415 |   |   | $ | 1,061,395 |   |   | $ | -- |   |   | $ | 6,895,638 |   |
|                                                                                                             |   |      |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Identifiable      assets                                                                                         |   | $         | 353,431,518 |   |   | $ | 54,787,639 |   |   | $ | 22,158,123 |   |   | $ | (52,982,097 | ) |   | $ | 377,395,183 |   |
|                                                                                                             |   |      |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Expenditures      for long-lived assets                                                                          |   | $         | 454,817     |   |   | $ | 670,988 |   |   | $ | 637,903 |   |   | $ | -- |   |   | $ | 1,763,708 |   |

----

----

| 18) | Disclosure about Fair      Value of Financial Instruments  (Continued) |
|-----|------------------------------------------------------------------------|

|   |
|--------|

|                                                     |   | December      31, 2007 |         |
|----------------------------------------------------------|--------|------------------------|--------------|
|                                                     |   | Carrying               |         |   | Fair |   |
|                                                     |   | Amount                 |         |   | Value |   |
| Financial      assets:                                   |   |                   |         |   |   |   |
| Investment      in fixed maturity securities             |   | $                      | 116,896,016  |   |   | $ | 114,476,524 |   |
| Investment      in securities available for sale         |   |                   | 8,742,212    |   |   |   | 8,741,212 |   |
| Investment      in mortgage loans and construction loans |   |                   | 92,884,055   |   |   |   | 92,884,055 |   |
| Investment      in policy, student and other loans       |   |                   | 16,860,874   |   |   |   | 16,860,874 |   |
| Short-term      investments                              |   |                   | 5,337,367    |   |   |   | 5,337,367 |   |
| Cash      and cash equivalents                           |   |                   | 5,203,060    |   |   |   | 5,203,060 |   |
| Mortgage      loans sold to investors                    |   |                   | 66,700,694   |   |   |   | 66,700,694 |   |
| Receivables                                              |   |                   | 15,036,867   |   |   |   | 15,036,867 |   |
| Restricted      assets of cemeteries and mortuaries      |   |                   | 5,711,054    |   |   |   | 5,711,054 |   |
| Cemetery      perpetual care trust investments           |   |                   | 1,604,600    |   |   |   | 1,604,600 |   |
| Financial      liabilities:                              |   |                   |         |   |   |   |   |   |
| Investment-type      insurance contracts                 |   |                   | (106,939,120 | ) |   |   | (106,939,120 | ) |
| Bank      loans payable, excluding interest rate swaps   |   |                   | (12,525,715  | ) |   |   | (12,525,715 | ) |
| Notes      and contracts payable                         |   |                   | (818,810     | ) |   |   | (818,810 | ) |
| Accounts      payable                                    |   |                   | (1,833,188   | ) |   |   | (1,833,188 | ) |
| Other      liabilities and accrued expenses              |   |                   | (14,812,845  | ) |   |   | (14,812,845 | ) |
| Derivatives:                                             |   |                   |         |   |   |   |   |   |
| Interest      rate lock commitments                      |   |                   | 627,116      |   |   |   | 627,116 |   |
| Forward      contracts on mortgage-backed securities     |   |                   | - 0      -   |   |   |   | - 0      - |   |
| Bank      loan interest rate swaps                       |   |                   | (26,951      | ) |   |   | (26,951 | ) |

|   | · | Defines fair value as the price      that would be received to sell an asset or paid to transfer a liability in      an orderly transaction between market participants at the measurement      date, and establishes a framework for measuring fair      value; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Establishes a three-level      hierarchy for fair value measurements based upon the transparency of      inputs to the valuation as of the measurement  date; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Expands disclosures about      financial instruments measured at fair  value. |
|--------|--------|-------------------------------------------------------------------------------|

|   | a)  | Quoted      prices for similar assets or liabilities in active  markets;                                                                   |
|--------|----------|-------------------------------------------------------------------------------------------------------------------------------------------------|
|   | b)  | Quoted      prices for identical or similar assets or liabilities in non-active      markets; or                                                |
|   | c)       | Valuation      models whose inputs are observable, directly or indirectly, for      substantially the full term of the asset or  liability |

----

| 18) | Disclosure about Fair      Value of Financial Instruments  (Continued) |
|-----|------------------------------------------------------------------------|

|                                                                              |   |   |         |   | Quoted      Prices    |   |       |           |   |   |           |   |
|-----------------------------------------------------------------------------------|--------|--------|--------------|--------|-----------------------|--------|------------|----------------|--------|--------|----------------|--------|
|                                                                              |   |   |         |   | in      Active        |   |       | Significant    |   |   | Significant    |   |
|                                                                              |   |   |         |   | Markets      for      |   |       | Observable     |   |   | Unobservable   |   |
|                                                                              |   |   |         |   | Identical      Assets |   |       | Inputs         |   |   | Inputs         |   |
|                                                                              |   | Total  |         |   | (Level      1)        |   |       | (Level      2) |   |   | (Level      3) |   |
| Assets      accounted for at fair value on a recurring basis                 |   |   |         |   |                  |   |       |           |   |   |           |   |
| Investment      in securities available for sale                                  |   | $      | 5,854,237    |   |                  | $      | 5,854,237  |           |   | $      | -              |   |   | $ | - |   |
| Short-term      investments                                                       |   |   | 5,282,986    |   |                  |   | 5,282,986  |           |   |   | -              |   |   |   | - |   |
| Restricted      assets of cemeteries and mortuaries                               |   |   | 1,241,038    |   |                  |   | 1,241,038  |           |   |   | -              |   |   |   |   |   |
| Cemetery      perpetual care trust investments                                    |   |   | 1,840,119    |   |                  |   | 1,840,119  |           |   |   | -              |   |   |   | - |   |
| Total      assets accounted for at fair value on a recurring      basis      |   | $      | 14,218,380   |   |                  | $      | 14,218,380 |           |   | $      | -              |   |   | $ | - |   |
|                                                                              |   |   |         |   |                  |   |       |           |   |   |           |   |   |   |   |   |
| Liabilities      accounted for at fair value on a recurring      basis       |   |   |         |   |                  |   |       |           |   |   |           |   |   |   |   |   |
| Investment-type      insurance contracts                                          |   | $      | (112,351,916 | )      |                  | $      | -          |           |   | $      | -              |   |   | $ | (112,351,916 | ) |
| Dervatives:      assets (liabilities)                                             |   |   |         |   |                  |   | -          |           |   |   | -              |   |   |   | - |   |
|    Interest      rate lock commitments                             |   |   | 362,231      |   |                  |   | -          |           |   |   | -              |   |   |   | 362,231 |   |
|    Bank      loan interest rate swaps                              |   |   | (113,049     | )      |                  |   | -          |           |   |   | -              |   |   |   | (113,049 | ) |
| Total      liabilities accounted for at fair value on a recurring      basis |   | $      | (112,102,734 | )      |                  | $      | -          |           |   | $      | -              |   |   | $ | (112,102,734 | ) |

----

| 18) | Disclosure about Fair      Value of Financial Instruments  (Continued) |
|-----|------------------------------------------------------------------------|

|                                             |   | InvestmentType      InsuranceContracts |         |   | Interest      RateLockCommitments |   |     | Bank      LoanInterest      RateSwaps |   |
|--------------------------------------------------|--------|----------------------------------------|--------------|--------|-----------------------------------|--------|----------|---------------------------------------|--------|
|                                             |   |                                   |         |   |                              |   |     |                                  |   |
| Balance      - December 31, 2007                 |   | $                                      | (106,939,120 | )      |                              | $      | 627,116  |                                  |   | $ | (26,951 | ) |
|                                             |   |                                   |         |   |                              |   |     |                                  |   |   |   |   |
| Total      Losses:                               |   |                                   |         |   |                              |   |     |                                  |   |   |   |   |
|                                             |   |                                   |         |   |                              |   |     |                                  |   |   |   |   |
| Included      in earnings                        |   |                                   | (5,412,796   | )      |                              |   | -        |                                  |   |   | - |   |
|                                             |   |                                   |         |   |                              |   |     |                                  |   |   |   |   |
| Included      in other comprehensive      income |   |                                   | -            |   |                              |   | (264,885 | )                                     |   |   | (86,098 | ) |
|                                             |   |                                   |         |   |                              |   |     |                                  |   |   |   |   |
| Purchases,      issuances, and settlements       |   |                                   | -            |   |                              |   | -        |                                  |   |   | - |   |
|                                             |   |                                   |         |   |                              |   |     |                                  |   |   |   |   |
| Transfers                                        |   |                                   | -            |   |                              |   | -        |                                  |   |   | - |   |
|                                             |   |                                   |         |   |                              |   |     |                                  |   |   |   |   |
| Balance      - December 31, 2008                 |   | $                                      | (112,351,916 | )      |                              | $      | 362,231  |                                  |   | $ | (113,049 | ) |

----

| 18) | Disclosure about Fair      Value of Financial Instruments  (Continued) |
|-----|------------------------------------------------------------------------|

----

|                                                                                                            |   | December      31, |       |
|-----------------------------------------------------------------------------------------------------------------|--------|-------------------|------------|
|                                                                                                            |   | 2008              |       |   | 2007 |   |   | 2006 |   |
|                                                                                                            |   |              |       |   |   |   |   |   |   |
| Unrealized      gains (losses) on available for-sale      securities                                            |   | $                 | (4,125,253 | ) |   | $ | 245,447 |   |   | $ | 1,070,471 |   |
| Reclassification      adjustment for net realized gains      in net income                                      |   |              | 759,870    |   |   |   | 175,130 |   |   |   | 93,255 |   |
| Net      unrealized gains (losses) before taxes                                                                 |   |              | (3,365,383 | ) |   |   | 420,577 |   |   |   | 1,163,726 |   |
| Tax      (expense) benefit                                                                                      |   |              | 490,790    |   |   |   | (57,046 | ) |   |   | (186,935 | ) |
| Net                                                                                                             |   |              | (2,874,593 | ) |   |   | 363,531 |   |   |   | 976,791 |   |
| Potential      unrealized gains (losses) for derivative      bank loans (interest rate swaps) before      taxes |   |              | (140,577   | ) |   |   | (160,021 | ) |   |   | (29,549 | ) |
| Tax      (expense) benefit                                                                                      |   |              | 47,804     |   |   |   | 54,407 |   |   |   | 10,047 |   |
| Net                                                                                                             |   |              | (92,773    | ) |   |   | (105,614 | ) |   |   | (19,502 | ) |
| Potential      unrealized gains (losses) for derivative mortgage      loans before taxes                        |   |              | (264,885   | ) |   |   | (582,425 | ) |   |   | 951,847 |   |
| Tax      (expense) benefit                                                                                      |   |              | 90,061     |   |   |   | 198,024 |   |   |   | (323,628 | ) |
| Net                                                                                                             |   |              | (174,824   | ) |   |   | (384,401 | ) |   |   | 628,219 |   |
| Other      items:                                                                                               |   |              |       |   |   |   |   |   |   |   |   |   |
| Company      stock held in escrow transferred to      treasury stock                                            |   |              | 1,982,620  |   |   |   | -- |   |   |   | -- |   |
| Other                                                                                                           |   |              | (20,120    | ) |   |   | 20,120 |   |   |   | -- |   |
|                                                                                                            |   |              | 1,962,500  |   |   |   | 20,120 |   |   |   | -- |   |
| Other      comprehensive income                                                                                 |   | $                 | (1,179,690 | ) |   | $ | (106,364 | ) |   | $ | 1,585,508 |   |

----

|                                                                                             |   | Ending            |       |   |                |   |       | Ending            |   |
|--------------------------------------------------------------------------------------------------|--------|-------------------|------------|--------|---------------------|--------|------------|-------------------|--------|
|                                                                                             |   | Balance           |       |   |                |   |       | Balance           |   |
|                                                                                             |   | December      31, |       |   | Change              |   |       | December      31, |   |
|                                                                                             |   | 2007              |       |   | for      the period |   |       | 2008              |   |
|                                                                                             |   |              |       |   |                |   |       |              |   |
| Unrealized      net gains on available for-sale      securities and trust investments            |   | $                 | 3,163,176  |   |                | $      | (2,874,593 | )                 |   | $ | 288,583 |   |
| Unrealized      gains on derivative mortgage      loans                                          |   |              | 413,896    |   |                |   | (174,824   | )                 |   |   | 239,072 |   |
| Unrealized      gains ( losses) on  derivative      bank loan      interest rate swaps |   |              | (17,781    | )      |                |   | (92,773    | )                 |   |   | (110,554 | ) |
| Other      comprehensive income                                                                  |   |              | 3,559,291  |   |                |   | (3,142,190 | )                 |   |   | 417,101 |   |
|                                                                                             |   |              |       |   |                |   |       |              |   |   |   |   |
| Other      items:                                                                                |   |              |       |   |                |   |       |              |   |   |   |   |
| Acquisitions      of company stock held      in escrow                                           |   |              | (1,982,620 | )      |                |   | 1,982,620  |              |   |   | -- |   |
| Other                                                                                            |   |              | 20,120     |   |                |   | (20,120    | )                 |   |   | -- |   |
| Total      other comprehensive income and      other items                                       |   | $                 | 1,596,791  |   |                | $      | (1,179,690 | )                 |   | $ | 417,101 |   |

|                                                                                             |   | Beginning      Balance December 31, 2006 |       |   | Changefor      the period |   |     | EndingBalance      December 31, 2007 |   |
|--------------------------------------------------------------------------------------------------|--------|------------------------------------------|------------|--------|---------------------------|--------|----------|--------------------------------------|--------|
|                                                                                             |   |                                     |       |   |                      |   |     |                                 |   |
| Unrealized      gains on available-for-sale      securities                                      |   | $                                        | 2,799,645  |   |                      | $      | 363,531  |                                 |   | $ | 3,163,176 |   |
| Unrealized      gains on derivative mortgage      loans                                          |   |                                     | 798,297    |   |                      |   | (384,401 | )                                    |   |   | 413,896 |   |
| Unrealized      gains ( losses) on  derivative      bank loan      interest rate swaps |   |                                     | 87,833     |   |                      |   | (105,614 | )                                    |   |   | (17,781 | ) |
| Other      comprehensive income                                                                  |   |                                     | 3,685,775  |   |                      |   | (126,484 | )                                    |   |   | 3,559,291 |   |
|                                                                                             |   |                                     |       |   |                      |   |     |                                 |   |   |   |   |
| Other      items:                                                                                |   |                                     |       |   |                      |   |     |                                 |   |   |   |   |
| Acquisitions      of company stock held      in escrow                                           |   |                                     | (1,982,620 | )      |                      |   | 20,120   |                                 |   |   | (1,962,500 | ) |
| Total      other comprehensive income and      other items                                       |   | $                                        | 1,703,155  |   |                      | $      | (106,364 | )                                    |   | $ | 1,596,791 |   |

| 20) | Derivative Loan      Commitments |
|-----|----------------------------------|

----

| 20) | Derivative      Loan Commitments (Continued) |
|-----|----------------------------------------------|

|                                       |   | 2008   |     |   | 2007   |   |
|--------------------------------------------|--------|--------|----------|--------|--------|--------|
| Loss      on forward loan sale commitments |   | $      | (317,839 | )      |   | $      | (2,056,673 | ) |
| Gain      on derivative loan commitments   |   |   | 52,954   |   |   |   | 1,474,248 |   |
| Total                                      |   | $      | (264,885 | )      |   | $      | (582,425 | ) |

| 21) | Quarterly Financial      Data (Unaudited) |
|-----|-------------------------------------------|

|                                                     |   | 2008                    |       |
|----------------------------------------------------------|--------|-------------------------|------------|
|                                                     |   | Three      Months Ended |       |
|                                                     |   | March      31           |       |   | June      30 |   |   | September      30 |   |   | December      31 |   |
| Revenues                                                 |   | $                       | 53,221,500 |   |   | $ | 60,402,195 |   |   | $ | 53,083,935 |   |   | $ | 52,796,220 |   |
| Benefits      and expenses                               |   |                    | 51,276,565 |   |   |   | 57,314,947 |   |   |   | 53,812,100 |   |   |   | 56,369,727 |   |
| Earnings      before income taxes                        |   |                    | 1,944,935  |   |   |   | 3,087,248 |   |   |   | (728,165 | ) |   |   | (3,573,507 | ) |
| Income      tax expense                                  |   |                    | 569,479    |   |   |   | 986,615 |   |   |   | (39,877 | ) |   |   | (1,671,879 | )  |
| Net      earnings                                        |   |                    | 1,375,456  |   |   |   | 2,100,633 |   |   |   | (768,042 | ) |   |   | (2,133,194 | ) |
| Net      earnings per common share                       |   | $                       | 0.17       |   |   | $ | 0.26 |   |   | $ | (0.09 | ) |   | $ | (0.27 | ) |
| Net      earnings per common shareassuming      dilution |   | $                       | 0.17       |   |   | $ | 0.26 |   |   | $ | (0.09 | ) |   | $ | (0.27 | ) |

----

| 21) | Quarterly Financial      Data (Unaudited) (Continued) |
|-----|-------------------------------------------------------|

|                                                      |   | 2007                    |       |
|-----------------------------------------------------------|--------|-------------------------|------------|
|                                                      |   | Three      Months Ended |       |
|                                                      |   | March      31           |       |   | June      30 |   |   | September      30 |   |   | December      31 |   |
| Revenues                                                  |   | $                       | 49,046,152 |   |   | $ | 54,315,888 |   |   | $ | 51,663,941 |   |   | $ | 54,722,101 |   |
| Benefits      and expenses                                |   |                    | 47,988,774 |   |   |   | 52,956,038 |   |   |   | 52,801,454 |   |   |   | 52,878,785 |   |
| Earnings      before income taxes                         |   |                    | 1,057,378  |   |   |   | 1,359,850 |   |   |   | (1,137,513 | ) |   |   | 1,843,316 |   |
| Income      tax expense                                   |   |                    | 312,837    |   |   |   | 328,822 |   |   |   | (475,069 | ) |   |   | 691,045 |   |
| Net      earnings                                         |   |                    | 744,541    |   |   |   | 1,031,028 |   |   |   | (662,444 | ) |   |   | 1,152,271 |   |
| Net      earnings per common share                        |   | $                       | 0.09       |   |   | $ | 0.13 |   |   | $ | (0.08 | ) |   | $ | 0.14 |   |
| Net      earnings per common share assuming      dilution |   | $                       | 0.09       |   |   | $ | 0.13 |   |   | $ | (0.08 | ) |   | $ | 0.14 |   |

----

|   | · | Pertain      to the maintenance of records that, in reasonable detail, accurately and      fairly reflect the transactions and dispositions of assets of the      Company,  |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Provide      reasonable assurance that transactions are recorded as necessary to permit      preparation of financial statements in accordance with generally accepted      accounting principles, and that receipts and expenditures are being made      only in accordance with authorizations of management and the board of      directors of the Company, and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Provide      reasonable assurance regarding prevention or timely detection of      unauthorized acquisition, use, or disposition of the Company's assets that      could have a material effect on the financial  statements. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Name                        | Age    | Position with theCompany                                   |
|-----------------------------|--------|------------------------------------------------------------|
| George      R. Quist        | 88     | Chairman      of the Board and Chief Executive Officer     |
|                        |   |                                                       |
| Scott      M. Quist         | 55     | President,      Chief Operating Officer and Director       |
|                        |   |                                                       |
| Stephen      M. Sill        | 63     | Vice      President, Treasurer and Chief Financial Officer |
|                        |   |                                                       |
| J.      Lynn Beckstead, Jr. | 55     | Vice      President Mortgage Operations and Director       |
|                        |   |                                                       |
| Christie      Q. Overbaugh  | 60     | Senior      Vice President of Internal Operations          |
|                        |   |                                                       |
| Charles      L. Crittenden  | 88     | Director                                                   |
|                        |   |                                                       |
| Robert      G. Hunter       | 49     | Director                                                   |
|                        |   |                                                       |
| H.      Craig Moody         | 57     | Director                                                   |
|                        |   |                                                       |
| Norman      G. Wilbur       | 70     | Director                                                   |

----

----

----

|                          |   |   |   |      |    |   |     |   |    |      |   |   |      |   |   |                |   |   | Change      in |   |   |           |   |   |     |   |
|-------------------------------|--------|--------|--------|-----------|---------|--------|----------|--------|---------|-----------|--------|--------|-----------|--------|--------|---------------------|--------|--------|----------------|--------|--------|----------------|--------|--------|----------|--------|
|                          |   |   |   |      |    |   |     |   |    |      |   |   |      |   |   |                |   |   | PensionValue   |   |   |           |   |   |     |   |
|                          |   |   |   |      |    |   |     |   |    |      |   |   |      |   |   | Non-Equity          |   |   | Non-qualified  |   |   |           |   |   |     |   |
|                          |   |   |   |      |    |   |     |   |    |      |   |   |      |   |   | Incentive      Plan |   |   | Deferred       |   |   | All      Other |   |   |     |   |
| Name      and                 |   |   |   |      |    |   |     |   |    | Stock     |   |   | Option    |   |   | Compen-             |   |   | Compensation   |   |   | Compen-        |   |   |     |   |
| Principal Position            |   | Year   |   | Salary($) |    |   | Bonus($) |   |    | Awards($) |   |   | Awards($) |   |   | sation($)           |   |   | Earnings($)(3) |   |   | sation($)(2)   |   |   | Total($) |   |
| George      R. Quist(1)       |   | 2008   |   | $         | 236,013 |   |     | $      | 50,755  |      |   |   | --        |   |   |                | --     |   |           |   | --     |           |   | $      | --       |   |   | $ | 10,959 |   |   | $ | 297,727 |   |
| Chairman      of the          |   | 2007   |   |      | 219,513 |   |     |   | --      |      |   |   | --        |   |   |                | --     |   |           |   | --     |           |   |   | 24,200   |   |   |   | 10,760 |   |   |   | 254,473 |   |
| Board      and Chief          |   | 2006   |   |      | 203,013 |   |     |   | 40,000  |      |   |   | --        |   |   |                | --     |   |           |   | --     |           |   |   | 21,967   |   |   |   | 10,683 |   |   |   | 275,663 |   |
| Executive      Officer        |   |   |   |      |    |   |     |   |    |      |   |   |      |   |   |                |   |   |           |   |   |           |   |   |     |   |   |   |   |   |   |   |   |   |
|                          |   |   |   |      |    |   |     |   |    |      |   |   |      |   |   |                |   |   |           |   |   |           |   |   |     |   |   |   |   |   |   |   |   |   |
| Scott      M. Quist(1)        |   | 2008   |   | $         | 332,400 |   |     | $      | 91,350  |      |   |   | --        |   |   |                | --     |   |           |   | --     |           |   | $      | --       |   |   | $ | 32,791 |   |   | $ | 456,541 |   |
| President      and Chief      |   | 2007   |   |      | 303,900 |   |     | $      | --      |      |   |   | --        |   |   |                | --     |   |           |   | --     |           |   |   | 25,300   |   |   |   | 33,172 |   |   |   | 362,372 |   |
| Operating      Officer        |   | 2006   |   |      | 275,400 |   |     |   | 75,000  |      |   |   | --        |   |   |                | --     |   |           |   | --     |           |   |   | 24,150   |   |   |   | 26,879 |   |   |   | 401,429 |   |
|                          |   |   |   |      |    |   |     |   |    |      |   |   |      |   |   |                |   |   |           |   |   |           |   |   |     |   |   |   |   |   |   |   |   |   |
| Stephen      M. Sill          |   | 2008   |   | $         | 131,969 |   |     | $      | 11,113  |      |   |   | --        |   |   |                | --     |   |           |   | --     |           |   | $      | --       |   |   | $ | 17,074 |   |   | $ | 160,156 |   |
| Vice      President,          |   | 2007   |   |      | 125,292 |   |     |   | 6,000   |      |   |   | --        |   |   |                | --     |   |           |   | --     |           |   |   | 14,179   |   |   |   | 15,878 |   |   |   | 161,349 |   |
| Treasurer      and Chief      |   | 2006   |   |      | 120,292 |   |     |   | 3,000   |      |   |   | --        |   |   |                | --     |   |           |   | --     |           |   |   | 13,922   |   |   |   | 15,386 |   |   |   | 152,600 |   |
| Financial      Officer        |   |   |   |      |    |   |     |   |    |      |   |   |      |   |   |                |   |   |           |   |   |           |   |   |     |   |   |   |   |   |   |   |   |   |
|                          |   |   |   |      |    |   |     |   |    |      |   |   |      |   |   |                |   |   |           |   |   |           |   |   |     |   |   |   |   |   |   |   |   |   |
| J.      Lynn Beckstead, Jr.   |   | 2008   |   | $         | 217,583 |   |     | $      | 119,741 |      |   |   | --        |   |   |                | --     |   |           |   | --     |           |   | $      | --       |   |   | $ | 21,528 |   |   | $ | 358,852 |   |
| Vice      President of        |   | 2007   |   |      | 207,500 |   |     |   | 46,888  |      |   |   | --        |   |   |                | --     |   |           |   | --     |           |   |   | 21,166   |   |   |   | 21,140 |   |   |   | 296,694 |   |
| Mortgage      Operations      |   | 2006   |   |      | 246,292 |   |     |   | 6,000   |      |   |   | --        |   |   |                | --     |   |           |   | --     |           |   |   | 21,945   |   |   |   | 15,295 |   |   |   | 289,532 |   |
|                          |   |   |   |      |    |   |     |   |    |      |   |   |      |   |   |                |   |   |           |   |   |           |   |   |     |   |   |   |   |   |   |   |   |   |
| G.      Robert Quist(1)       |   | 2008   |   | $         | 102,457 |   |     | $      | 15,000  |      |   |   | --        |   |   |                | --     |   |           |   | --     |           |   | $      | --       |   |   | $ | 19,239 |   |   | $ | 136,696 |   |
| First      Vice President     |   | 2007   |   |      | 122,433 |   |     |   | 10,203  |      |   |   | --        |   |   |                | --     |   |           |   | --     |           |   |   | 13,529   |   |   |   | 20,281 |   |   |   | 166,446 |   |
| and      Secretary            |   | 2006   |   |      | 126,221 |   |     |   | 10,000  |      |   |   | --        |   |   |                | --     |   |           |   | --     |           |   |   | 12,209   |   |   |   | 18,218 |   |   |   | 166,648 |   |
|                          |   |   |   |      |    |   |     |   |    |      |   |   |      |   |   |                |   |   |           |   |   |           |   |   |     |   |   |   |   |   |   |   |   |   |
| Christie      Q. Overbaugh(1) |   | 2008   |   | $         | 111,655 |   |     | $      | 14,850  |      |   |   | --        |   |   |                | --     |   |           |   | --     |           |   | $      | --       |   |   | $ | 12,697 |   |   | $ | 139,202 |   |
|                          |   | 2007   |   |      | 103,392 |   |     |   | 7,000   |      |   |   | --        |   |   |                | --     |   |           |   | --     |           |   |   | 10,758   |   |   |   | 8,292 |   |   |   | 129,442 |   |

| 1) | George      R. Quist is the father of Scott M. Quist, G. Robert Quist, and Christie Q.      Overbaugh. |
|----|--------------------------------------------------------------------------------------------------------|

| 2) | The      amounts indicated under “All Other Annual Compensation” consist of the      following amounts paid by the Company for the benefit of the named      executive officers: |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | a) | payments      made related to the operation of automobiles were for George R. Quist      ($2,400 for each of the years 2008, 2007 and 2006); Scott M. Quist ($7,200      for each of the years 2008, 2007 and 2006); Stephen M. Sill ($5,700 for      2008, $4,275 for 2007 and $3,600 for 2006); G. Robert Quist ($5,700 for      2008 and 2007, and $4,525 for 2006); and Christie Q. Overbaugh ($4,800 for      2008 and $400 for 2007).  However, such payments do not include      the furnishing of an automobile by the Company to George R. Quist, Scott      M. Quist, J. Lynn Beckstead Jr., and G. Robert Quist, nor the payment of      insurance and property taxes with respect to the automobiles operated by      the named executive officers; |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b) | group      life insurance premiums paid by the Company to a group life insurance plan      for  the years 2008, 2007 and 2006, such amounts were for George      R. Quist ($154, $9 and $9 respectively); for Scott M. Quist, Stephen M.      Sill, and J. Lynn Beckstead Jr. ($218, $250, and $241 each, respectively);      G. Robert Quist ($184, $250, and $241 for 2008, 2007 and 2006,      respectively); and Christie Overbaugh ($210 and $240 for 2008 and 2007,      respectively); |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | c) | life      insurance premiums paid by the Company for the benefit of their respective      families; George R. Quist ($4,644 for each of the years 2008, 2007 and      2006); Scott M. Quist ($14,056 for 2008, $14,340 for 2007, and $8,584 for      2006);   Stephen M. Sill ($2,976 for 2008 and 2007 and      $3,643 for the year 2006);  J. Lynn Beckstead Jr. ($4,200 for      each of the years 2008, 2007 and 2006);  G. Robert Quist ($2,949      for 2008 and 2007 and $2,598 for the year 2006); and Christie Q. Overbaugh      ($3,945 for 2008 and 2007). |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | d) | medical      insurance premiums paid by the Company to a medical insurance plan; George      R. Quist ($3,491 for 2008, $3,419 for 2007, and $3,342 for 2006); Scott M.      Quist, J. Lynn Beckstead Jr., ($11,047 each for 2008, $11,094 each for      2007, and $10,566 each for 2006); G. Robert Quist ($10,136 for 2008,      $11,094 for 2007 and $10,566 for 2006); Stephen M. Sill ($7,910 for 2008,      $8,089 for 2007and $7,614 for 2006); and Christie Q. Overbaugh ($3,491 for      2008 and $3,419 for 2007); |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | e) | long      term disability insurance paid by the Company to a provider of LTD      insurance; George R. Quist, Scott M. Quist, Stephen M, Sill, J. Lynn      Beckstead Jr., and G. Robert Quist ($270 each for 2008 and $288 each for      years 2007 and 2006) and Christie Q. Overbaugh ($251 for 2008 and $288 for      2007); |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | f) | membership      dues paid by the Company to Alpine Country club for the benefit of J. Lynn      Beckstead Jr. ($5,793 for 2008, $5,308 for 2007, and $5,117 for      2006); |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 3) | The      amounts indicated under “Change in Pension Value and Non-qualified      Deferred Compensation Earnings”  consist of (a) amounts      contributed by the Company into a trust for the benefit of the Named      Executive Officers under the Security National Financial Corporation      Deferred Compensation Plan |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                       |   |   |   |     |   |   |       |   |   |       |   |   |            |   |   | Registrant    |   |   |      |   |   |           |   |   |     |   |
|----------------------------|--------|--------|--------|----------|--------|--------|------------|--------|--------|------------|--------|--------|-----------------|--------|--------|---------------|--------|--------|-----------|--------|--------|----------------|--------|--------|----------|--------|
|                       |   |   |   |     |   |   |       |   |   |       |   |   |            |   |   | Contribu-     |   |   |      |   |   | Dividends      |   |   |     |   |
|                       |   |   |   | Perks    |   |   |       |   |   |       |   |   |            |   |   | tions      to |   |   |      |   |   | or             |   |   |     |   |
|                       |   |   |   | and      |   |   |       |   |   |       |   |   | Payments/       |   |   | Defined       |   |   |      |   |   | Earnings       |   |   |     |   |
|                       |   |   |   | Other    |   |   | Tax        |   |   | Discounted |   |   | Accruals        |   |   | Contribu-     |   |   |      |   |   | on      Stock  |   |   |     |   |
|                       |   |   |   | Personal |   |   | Reimburse- |   |   | Securities |   |   | on      Termin- |   |   | tion          |   |   | Insurance |   |   | or      Option |   |   |     |   |
| Name                       |   | Year   |   | Benefits |   |   | ments      |   |   | Purchases  |   |   | ation Plans     |   |   | Plans         |   |   | Premiums  |   |   | Awards         |   |   | Other(1) |   |
| George      R. Quist       |   | 2008   |   | $        | 2,400  |   |       |   | --     |       |   |   | --              |   |   |          | --     |   |      |   | --     |           |   | $      | 8,559    |   |   |   | -- |   |   |   | -- |   |
|                       |   | 2007   |   |     | 2,400  |   |       |   | --     |       |   |   | --              |   |   |          | --     |   |      |   | --     |           |   |   | 8,360    |   |   |   | -- |   |   |   | -- |   |
|                       |   | 2006   |   |     | 2,400  |   |       |   | --     |       |   |   | --              |   |   |          | --     |   |      |   | --     |           |   |   | 8,283    |   |   |   | -- |   |   |   | -- |   |
|                       |   |   |   |     |   |   |       |   |   |       |   |   |            |   |   |          |   |   |      |   |   |           |   |   |     |   |   |   |   |   |   |   |   |   |
| Scott      M. Quist        |   | 2008   |   | $        | 7,200  |   |       |   | --     |       |   |   | --              |   |   |          | --     |   |      |   | --     |           |   | $      | 25,591   |   |   |   | -- |   |   |   | -- |   |
|                       |   | 2007   |   |     | 7,200  |   |       |   | --     |       |   |   | --              |   |   |          | --     |   |      |   | --     |           |   |   | 25,972   |   |   |   | -- |   |   |   | -- |   |
|                       |   | 2006   |   |     | 7,200  |   |       |   | --     |       |   |   | --              |   |   |          | --     |   |      |   | --     |           |   |   | 19,679   |   |   |   | -- |   |   |   | -- |   |
|                       |   |   |   |     |   |   |       |   |   |       |   |   |            |   |   |          |   |   |      |   |   |           |   |   |     |   |   |   |   |   |   |   |   |   |
| Stephen      M. Sill       |   | 2008   |   | $        | 5,700  |   |       |   | --     |       |   |   | --              |   |   |          | --     |   |      |   | --     |           |   | $      | 11,374   |   |   |   | -- |   |   |   | -- |   |
|                       |   | 2007   |   |     | 4,275  |   |       |   | --     |       |   |   | --              |   |   |          | --     |   |      |   | --     |           |   |   | 11,603   |   |   |   | -- |   |   |   | -- |   |
|                       |   | 2006   |   |     | 3,600  |   |       |   | --     |       |   |   | --              |   |   |          | --     |   |      |   | --     |           |   |   | 11,786   |   |   |   | -- |   |   |   | -- |   |
|                       |   |   |   |     |   |   |       |   |   |       |   |   |            |   |   |          |   |   |      |   |   |           |   |   |     |   |   |   |   |   |   |   |   |   |
| J.      Lynn Beckstead Jr. |   | 2008   |   | $        | 5,793  |   |       |   | --     |       |   |   | --              |   |   |          | --     |   |      |   | --     |           |   | $      | 15,735   |   |   |   | -- |   |   |   | -- |   |
|                       |   | 2007   |   |     | 5,308  |   |       |   | --     |       |   |   | --              |   |   |          | --     |   |      |   | --     |           |   |   | 15,832   |   |   |   | -- |   |   |   | -- |   |
|                       |   | 2006   |   |     | 5,117  |   |       |   | --     |       |   |   | --              |   |   |          | --     |   |      |   | --     |           |   |   | 15,295   |   |   |   | -- |   |   |   | -- |   |
|                       |   |   |   |     |   |   |       |   |   |       |   |   |            |   |   |          |   |   |      |   |   |           |   |   |     |   |   |   |   |   |   |   |   |   |
| G.      Robert Quist       |   | 2008   |   | $        | 5,700  |   |       |   | --     |       |   |   | --              |   |   |          | --     |   |      |   | --     |           |   | $      | 13,539   |   |   |   | -- |   |   |   | -- |   |
|                       |   | 2007   |   |     | 5,700  |   |       |   | --     |       |   |   | --              |   |   |          | --     |   |      |   | --     |           |   |   | 14,581   |   |   |   | -- |   |   |   | -- |   |
|                       |   | 2006   |   |     | 4,525  |   |       |   | --     |       |   |   | --              |   |   |          | --     |   |      |   | --     |           |   |   | 13,693   |   |   |   | -- |   |   |   | -- |   |
|                       |   |   |   |     |   |   |       |   |   |       |   |   |            |   |   |          |   |   |      |   |   |           |   |   |     |   |   |   |   |   |   |   |   |   |
| Christie      Q. Overbaugh |   | 2008   |   | $        | 4,800  |   |       |   | --     |       |   |   | --              |   |   |          | --     |   |      |   | --     |           |   | $      | 7,897    |   |   |   | -- |   |   |   | -- |   |
|                       |   | 2007   |   |     | 400    |   |       |   | --     |       |   |   | --              |   |   |          | --     |   |      |   | --     |           |   |   | 7,892    |   |   |   | -- |   |   |   | -- |   |

----

|                       |           |   |                                |   |   |                             |   |   |           |   |   |       |   |   |          |   |   |           |   |   |           |   |   | All      Other |   |   |     |   |   |           |   |
|----------------------------|----------------|--------|-------------------------------------|--------|--------|----------------------------------|--------|--------|----------------|--------|--------|------------|--------|--------|---------------|--------|--------|----------------|--------|--------|----------------|--------|--------|----------------|--------|--------|----------|--------|--------|----------------|--------|
|                       |           |   |                                |   |   |                             |   |   |           |   |   |       |   |   |          |   |   |           |   |   | All      Other |   |   | Option         |   |   |     |   |   |           |   |
|                       |           |   |                                |   |   |                             |   |   |           |   |   |       |   |   |          |   |   |           |   |   | Stock          |   |   | Awards:        |   |   |     |   |   | Grant          |   |
|                       |           |   |                                |   |   |                             |   |   |           |   |   |       |   |   |          |   |   |           |   |   | Awards:        |   |   | Number      of |   |   | Exercise |   |   | Date      Fair |   |
|                       |           |   | Estimated      Future Payouts Under |   |   | Estimated      Future Payouts    |   |   | Number      of |   |   | Securities |   |   | or      Base  |   |   | Value      of  |   |
|                       |           |   | Non-Equity      Incentive Plan      |   |   | Under      Equity Incentive Plan |   |   | Shares      of |   |   | Under-     |   |   | Price      of |   |   | Stock      and |   |
|                       |           |   | Awards                              |   |   | Awards                           |   |   | Stock      or  |   |   | lying      |   |   | Option        |   |   | Options        |   |
|                       | Grant          |   | Threshold                           |   |   | Target                           |   |   | Maximum        |   |   | Threshold  |   |   | Target        |   |   | Maximum        |   |   | Units          |   |   | Options        |   |   | Awards   |   |   | Awards         |   |
| Name                       | Date           |   | ($)                                 |   |   | ($)                              |   |   | ($)            |   |   |       | (#     | )      |          |   | (#     | )              |   | ($)    |           |   |   | (#             | )      |   |     | (#     | )      |           | ($/Sh) |   |   | ($) |   |
| George      R. Quist       |  07/16/04 |   |                                | --     |   |                             |   | --     |           |   |   | --         |   |   |          | --     |   |           |   | --     |           |   |   | --             |   |   |     | --     |   |           |   | 50,000 |   |   | $ | 3.960 |   |   | $ | 1.71 |   |
|                       | 12/10/04       |   |                                | --     |   |                             |   | --     |           |   |   | --         |   |   |          | --     |   |           |   | --     |           |   |   | --             |   |   |     | --     |   |           |   | 50,000 |   |   |   | 3.550 |   |   |   | 1.71 |   |
|                       | 3/25/05        |   |                                | --     |   |                             |   | --     |           |   |   | --         |   |   |          | --     |   |           |   | --     |           |   |   | --             |   |   |     | --     |   |           |   | 70,000 |   |   |   | 3.860 |   |   |   | 1.92 |   |
|                       | 3/31/08        |   |                                | --     |   |                             |   | --     |           |   |   | --         |   |   |          | --     |   |           |   | --     |           |   |   | --             |   |   |     | --     |   |           |   | 50,000 |   |   |   | 4.235 |   |   |   | 2.15 |   |
|                       | 12/5/08        |   |                                | --     |   |                             |   | --     |           |   |   | --         |   |   |          | --     |   |           |   | --     |           |   |   | --             |   |   |     | --     |   |           |   | 100,000 |   |   |   | 1.650 |   |   |   | 1.10 |   |
|                       |           |   |                                |   |   |                             |   |   |           |   |   |       |   |   |          |   |   |           |   |   |           |   |   |           |   |   |     |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Scott      M. Quist        | 3/21/03        |   |                                | --     |   |                             |   | --     |           |   |   | --         |   |   |          | --     |   |           |   | --     |           |   |   | --             |   |   |     | --     |   |           |   | 70,000 |   |   | $ | 5.900 |   |   | $ | 2.63 |   |
|                       | 3/25/05        |   |                                | --     |   |                             |   | --     |           |   |   | --         |   |   |          | --     |   |           |   | --     |           |   |   | --             |   |   |     | --     |   |           |   | 70,000 |   |   |   | 3.510 |   |   |   | 1.92 |   |
|                       | 3/31/08        |   |                                | --     |   |                             |   | --     |           |   |   | --         |   |   |          | --     |   |           |   | --     |           |   |   | --             |   |   |     | --     |   |           |   | 50,000 |   |   |   | 4.235 |   |   |   | 2.15 |   |
|                       | 12/5/08        |   |                                | --     |   |                             |   | --     |           |   |   | --         |   |   |          | --     |   |           |   | --     |           |   |   | --             |   |   |     | --     |   |           |   | 100,000 |   |   |   | 1.650 |   |   |   | 1.10 |   |
|                       |           |   |                                |   |   |                             |   |   |           |   |   |       |   |   |          |   |   |           |   |   |           |   |   |           |   |   |     |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Stephen      M. Sill       | 3/31/08        |   |                                | --     |   |                             |   | --     |           |   |   | --         |   |   |          | --     |   |           |   | --     |           |   |   | --             |   |   |     | --     |   |           |   | 7,500 |   |   | $ | 3.850 |   |   | $ | 2.15 |   |
|                       | 12/5/08        |   |                                | --     |   |                             |   | --     |           |   |   | --         |   |   |          | --     |   |           |   | --     |           |   |   | --             |   |   |     | --     |   |           |   | 7,500 |   |   |   | 1.500 |   |   |   | 1.10 |   |
|                       |           |   |                                |   |   |                             |   |   |           |   |   |       |   |   |          |   |   |           |   |   |           |   |   |           |   |   |     |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| J.      Lynn Beckstead,    | 3/21/03        |   |                                | --     |   |                             |   | --     |           |   |   | --         |   |   |          | --     |   |           |   | --     |           |   |   | --             |   |   |     | --     |   |           |   | 15,000 |   |   | $ | 5.900 |   |   | $ | 2.63 |   |
| Jr.                        | 12/10/04       |   |                                | --     |   |                             |   | --     |           |   |   | --         |   |   |          | --     |   |           |   | --     |           |   |   | --             |   |   |     | --     |   |           |   | 5,000 |   |   |   | 3.230 |   |   |   | 1.71 |   |
|                       | 3/25/05        |   |                                | --     |   |                             |   | --     |           |   |   | --         |   |   |          | --     |   |           |   | --     |           |   |   | --             |   |   |     | --     |   |           |   | 35,000 |   |   |   | 3.510 |   |   |   | 1.92 |   |
|                       | 3/31/08        |   |                                | --     |   |                             |   | --     |           |   |   | --         |   |   |          | --     |   |           |   | --     |           |   |   | --             |   |   |     | --     |   |           |   | 8,000 |   |   |   | 3.850 |   |   |   | 2.15 |   |
|                       | 12/5/08        |   |                                | --     |   |                             |   | --     |           |   |   | --         |   |   |          | --     |   |           |   | --     |           |   |   | --             |   |   |     | --     |   |           |   | 20,000 |   |   |   | 1.500 |   |   |   | 1.10 |   |
|                       |           |   |                                |   |   |                             |   |   |           |   |   |       |   |   |          |   |   |           |   |   |           |   |   |           |   |   |     |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| G.      Robert Quist       | 3/21/03        |   |                                | --     |   |                             |   | --     |           |   |   | --         |   |   |          | --     |   |           |   | --     |           |   |   | --             |   |   |     | --     |   |           |   | 35,000 |   |   | $ | 5.900 |   |   | $ | 2.63 |   |
|                       | 3/31/08        |   |                                | --     |   |                             |   | --     |           |   |   | --         |   |   |          | --     |   |           |   | --     |           |   |   | --             |   |   |     | --     |   |           |   | 20,000 |   |   |   | 3.850 |   |   |   | 2.15 |   |
|                       |           |   |                                |   |   |                             |   |   |           |   |   |       |   |   |          |   |   |           |   |   |           |   |   |           |   |   |     |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Christie      Q. Overbaugh | 12/10/04       |   |                                | --     |   |                             |   | --     |           |   |   | --         |   |   |          | --     |   |           |   | --     |           |   |   | --             |   |   |     | --     |   |           |   | 7,500 |   |   | $ | 3.230 |   |   | $ | 1.71 |   |
|                       | 3/25/05        |   |                                | --     |   |                             |   | --     |           |   |   | --         |   |   |          | --     |   |           |   | --     |           |   |   | --             |   |   |     | --     |   |           |   | 20,000 |   |   |   | 3.510 |   |   |   | 1.92 |   |
|                       | 3/31/08        |   |                                | --     |   |                             |   | --     |           |   |   | --         |   |   |          | --     |   |           |   | --     |           |   |   | --             |   |   |     | --     |   |           |   | 10,000 |   |   |   | 3.850 |   |   |   | 2.15 |   |
|                       | 12/5/08        |   |                                | --     |   |                             |   | --     |           |   |   | --         |   |   |          | --     |   |           |   | --     |           |   |   | --             |   |   |     | --     |   |           |   | 10,000 |   |   |   | 1.500 |   |   |   | 1.10 |   |

----

|                       |           |                 |            |               |       |           |           |           | Equity           |
|----------------------------|----------------|----------------------|-----------------|--------------------|------------|----------------|----------------|----------------|------------------|
|                       |           |                 |            |               |       |           |           | Equity         | Incentive        |
|                       |           |                 |            |               |       |           |           | Incentive      | Plan             |
|                       |           |                 |            |               |       |           |           | Plan           | Awards:          |
|                       |           |                 |            |               |       |           |           | Awards         | Market      or   |
|                       |           |                 | Equity          |               |       |           |           | Number      of | Payout           |
|                       |           |                 | Incentive       |               |       |           | Market         | Unearned       | Value      of    |
|                       |           |                 | Pan      Awards |               |       |           | Value      of  | Shares,        | Unearned         |
|                       | Number      of |  Number      of | Number      of  |               |       | Number      of | Shares      or | Units      or  | Shares,          |
|                       | Securities     | Securities           | Securities      |               |       | Shares      or | Units      of  | Other          | Units      or    |
|                       | Underlying     | Underlying           | Underlying      |               |       | Units      of  | Stock          | Rights         | Other            |
|                       | Unexercised    | Unexercised          | Unexercised     | Option             |       | Stock          | That      Have | That      Have | Rights      That |
|                       | Options        | Options:             | Unearned        | Exercise           | Option     | Held      That | Not            | Not            | Have      Not    |
|                       | (#)            | (#)                  | Options         | Price              | Expiration | Have      Not  | Vested         | Vested         | Vested           |
| Name                       | Exercisable    | Unexercisable        | (#)             | ($)                | Date       | Vested(#)      | ($)            | (#)            | ($)              |
|                       |           |                 |            |               |       |           |           |           |             |
| George      R. Quist       | 320,000        | --                   | --              | $1.65      - 4.235 | 2009-2013  | --             | --             | --             | --               |
|                       |           |                 |            |               |       |           |           |           |             |
|  Scott      M. Quist  | 290,000        | --                   | --              | $1.65      - 5.90  | 2013-2015  | --             | --             | --             | --               |
|                       |           |                 |            |               |       |           |           |           |             |
| Stephen      M. Sill       | 15,000         | --                   | --              | $3.85      - 1.50  | 2018       | --             | --             | --             | --               |
|                       |           |                 |            |               |       |           |           |           |             |
| J.      Lynn Beckstead Jr. | 83,000         | --                   | --              | $1.50      - 5.90  | 2013-2018  | --             | --             | --             | --               |
|                       |           |                 |            |               |       |           |           |           |             |
| G.      Robert Quist       | 55,000         | --                   | --              | $3.85      - 5.90  | 2013-2018  | --             | --             | --             | --               |
|                       |           |                 |            |               |       |           |           |           |             |
| Christie      Q. Overbaugh | 42,500         | --                   | --              | $1.50      - 3.85  | 2014-2018  | --             | --             | --             | --               |

|                        | Option      Awards    |                  | Stock      Awards |
|-----------------------------|-----------------------|-----------------------|-------------------|
|                        | Number      of        |                  |              | Number      of |   |
|                        | Shares      Acquired  | Value      Realized   |              | Shares      Acquired | Value      Realized |
|                        | on      Exercise      | on      Exercise      |              | on      Vesting | on      Vesting |
| Name                        |    (#) |    ($) |              |    (#) |    ($) |
| George      R. Quist        | --                    | --                    |              | -- | -- |
| Scott      M. Quist         | --                    | --                    |              | -- | -- |
| Stephen      M. Sill        | --                    | --                    |              | -- | -- |
| J.      Lynn Beckstead, Jr. | --                    | --                    |              | -- | -- |
| G.      Robert Quist        | --                    | --                    |              | -- | -- |
| Christie      Q. Overbaugh  | --                    | --                    |              | -- | -- |

----

|                        |      | Number      of        | Present               | Payments              |
|-----------------------------|-----------|-----------------------|-----------------------|-----------------------|
|                        |      | Years                 | Value      of         | During                |
|                        |      | Credited              | Accumulated           | Last      Fiscal      |
|                        |      | Service               | Benefit               | Year                  |
| Name                        | Plan Name |    (#) |    ($) |    ($) |
|                        |      |                  |                  |                  |
| George      R. Quist        | None      | --                    | --                    | --                    |
| Scott      M. Quist         | None      | --                    | --                    | --                    |
| Stephen      M. Sill        | None      | --                    | --                    | --                    |
| J.      Lynn Beckstead, Jr. | None      | --                    | --                    | --                    |
| G.      Robert Quist        | None      | --                    | --                    | --                    |
| Christie      Q. Overbaugh  | None      | --                    | --                    | --                    |

----

|                       |   |           |   |   |   |   |   |   |   |   |                |   |   | Change      in     |   |   |           |   |   |   |   |
|----------------------------|--------|----------------|--------|--------|--------|--------|--------|--------|--------|--------|---------------------|--------|--------|--------------------|--------|--------|----------------|--------|--------|--------|--------|
|                       |   |           |   |   |   |   |   |   |   |   |                |   |   | Pension      Value |   |   |           |   |   |   |   |
|                       |   | Fees           |   |   |   |   |   |   |   |   |                |   |   | and                |   |   |           |   |   |   |   |
|                       |   | Earned      or |   |   |   |   |   |   |   |   | Non-Equity          |   |   | Nonqualified       |   |   |           |   |   |   |   |
|                       |   | Paid      In   |   |   | Stock  |   |   | Option |   |   | Incentive      Plan |   |   | Deferred           |   |   | All      Other |   |   |   |   |
|                       |   | Cash           |   |   | Awards |   |   | Awards |   |   | Compensation        |   |   | Compensation       |   |   | Compensation   |   |   | Total  |   |
| Name                       |   | ($)            |   |   | ($)    |   |   | ($)    |   |   | ($)                 |   |   | Earnings           |   |   | ($)            |   |   | ($)    |   |
|                       |   |           |   |   |   |   |   |   |   |   |                |   |   |               |   |   |           |   |   |   |   |
| Charles      L. Crittenden |   | $              | 18,150 |   |   |   | --     |   |   | $      | 6,366               |   |   |               | --     |   |           |   | --     |   |   |   | -- |   |   | $ | 24,516 |   |
| Robert      G. Hunter      |   |           | 16,150 |   |   |   | --     |   |   | $      | 6,366               |   |   |               | --     |   |           |   | --     |   |   |   | -- |   |   |   | 24,516 |   |
| H.      Craig Moody        |   |           | 18,150 |   |   |   | --     |   |   | $      | 6,366               |   |   |               | --     |   |           |   | --     |   |   |   | -- |   |   |   | 24,516 |   |
| Norman      G. Wilbur      |   |           | 18,150 |   |   |   | --     |   |   | $      | 6,366               |   |   |               | --     |   |           |   | --     |   |   |   | -- |   |   |   | 24,516 |   |

----

----

|                        |   | Executive       |   |   | Registrant      |   |   | Aggregate             |   |   | Aggregate     |   |   | Aggregate            |   |
|-----------------------------|--------|-----------------|--------|--------|-----------------|--------|--------|-----------------------|--------|--------|---------------|--------|--------|----------------------|--------|
|                        |   | Contributions   |   |   | Contributions   |   |   | Earnings      in Last |   |   | Withdrawals   |   |   | Balance      at Last |   |
|                        |   | In      Last FY |   |   | In      Last FY |   |   | FY                    |   |   | Distributions |   |   | FYE                  |   |
| Name                        |   | ($)             |   |   | ($)             |   |   | ($)                   |   |   | ($)           |   |   | ($)                  |   |
|                        |   |            |   |   |            |   |   |                  |   |   |          |   |   |                 |   |
| George      R. Quist        |   |            | --     |   |            |   | --     |                  |   |   | --            |   |   |                 | --     |   |   | $ | 89,004 |   |
| Scott      M. Quist         |   |            | --     |   |            |   | --     |                  |   |   | --            |   |   |                 | --     |   |   |   | 98,496 |   |
| Stephen      M. Sill        |   |            | --     |   |            |   | --     |                  |   |   | --            |   |   |                 | --     |   |   |   | 31,144 |   |
| J.      Lynn Beckstead, Jr. |   |            | --     |   |            |   | --     |                  |   |   | --            |   |   |                 | --     |   |   |   | 49,848 |   |
| G.      Robert Quist        |   |            | --     |   |            |   | --     |                  |   |   | --            |   |   |                 | --     |   |   |   | 44,387 |   |
| Christie      Q. Overbaugh  |   |            | --     |   |            |   | --     |                  |   |   | --            |   |   |                 | --     |   |   |   | 36,578 |   |

----

----

|                                                   |          | Class      ACommon Stock |            | Class      CCommon Stock |            | Class      A andClass      CCommon Stock |
|--------------------------------------------------------|---------------|--------------------------|-----------------|--------------------------|-----------------|------------------------------------------|
|                                                   |          |                     |            |                     |            |                                     |   |   |   |   |   |   |
|                                                   |          | Amount                   |            | Percent                  |            | Amount                                   |   | Percent |   | Amount |   | Percent |
|                                                   |          | Beneficially             |            | of                       |            | Beneficially                             |   | of |   | Beneficially |   | of |
| Name and Address (1)                                   |          | Owned                    |            | Class                    |            | Owned                                    |   | Class |   | Owned |   | Class |
| George      R. and Shirley C. Quist                    |          |                     |            |                     |            |                                     |   |   |   |   |   |   |
| Family      Partnership, Ltd. (2)                      |  585,291 | 7.8%                     |  4,082,507 | 47.9%                    |  4,667,798 | 29.0%                                    |
| Employee      Stock                                    |          |                     |            |                     |            |                                     |   |   |   |   |   |   |
| Ownership      Plan (3)                                |  608,038 | 8.1%                     |  1,887,731 | 22.1%                    |  2,495,769 | 15.5%                                    |
| George      R. Quist (4)(5)(7)(8)                      |          |  709,064            |            | 9.4%                     |            |  570,315                            |   | 6.7% |   |  1,249,409 |   | 8.0% |
| Scott      M. Quist (4)(7)(9)                          |          |  495,421            |            | 6.6%                     |            |  2,292,152                          |   | 26.9% |   |  2,787,573 |   | 17.3% |
| Associated      Investors (10)                         |          |  86,059             |            | 1.1%                     |            |  796,901                            |   | 9.3% |   |  882,960 |   | 5.5% |
| G.      Robert Quist (6)(11)                           |          |  182,635            |            | 2.4%                     |            |  284,697                            |   | 3.3% |   |  467,331 |   | 2.9% |
| J.      Lynn Beckstead, Jr., (6)(12)                   |          |  222,942            |            | 3.0%                     |            |  -                                  |   | - |   |  222,942 |   | 1.4% |
| Stephen      M. Sill (6)(13)                           |          |  85,450             |            | 1.1%                     |            |  -                                  |   | - |   |  85,450 |   | * |
| Christie      Q. Overbaugh (14)                        |          |  124,999            |            | 1.7%                     |            |  128,237                            |   | 1.5% |   |  253,236 |   | 1.6% |
| Robert      G. Hunter, M.D., (4)(15)                   |          |  15,038             |            | *                        |            |  -                                  |   | - |   |  15,038 |   | * |
| Norman      G. Wilbur (16)                             |          |  12,629             |            | *                        |            |  -                                  |   | - |   |  12,629 |   | * |
| Charles      L. Crittenden (17)                        |          |  14,810             |            | *                        |            |  -                                  |   | - |   |  14,810 |   | * |
| H.      Craig Moody (18)                               |          |  12,295             |            | *                        |            |  -                                  |   | - |   |  12,295 |   | * |
| All      directors and executive officers              |          |  2,460,603          |            | 29.6%                    |            |  7,357,908                          |   | 76.7% |   |  9,818,511 |   | 54.8% |
|     (10      persons) (4)(5)(6)(7) |          |                     |            |                     |            |                                     |

----

| (1) | Unless      otherwise indicated, the address of each listed stockholder is c/o      Security National Financial Corporation, 5300 South 360 West, Suite 250,      Salt Lake City, Utah 84123. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | This      stock is owned by the George R. and Shirley C. Quist Family Partnership,      Ltd., of which Scott M. Quist is the managing general    partner. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | The      trustees of the Employee Stock Ownership Plan (ESOP) are George R. Quist,      Scott M. Quist, and Robert G. Hunter who exercise shared voting and      investment powers. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Does      not include 608,038 shares of Class A common stock and 1,887,731 shares of      Class C common stock owned by the Company’s Employee Stock Ownership Plan      (ESOP), of which George R Quist, Scott M. Quist and Robert G. Hunter are      the trustees and accordingly, exercise shared voting and investment powers      with respect to such shares. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Does      not include 86,059 shares of Class A common stock and 796,901 shares of      Class C common stock owned by Associated Investors, a Utah general      partnership, of which George R. Quist is the managing partner and,      accordingly, exercises sole voting and investment powers with respect to      such shares. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6) | Does      not include 511,858 shares of Class A common stock owned by the Company’s      401(k) Retirement Savings Plan, of which G. Robert Quist, J. Lynn      Beckstead, and Stephen M. Sill are members of the Investment Committee      and, accordingly, exercise shared voting and investment powers with      respect to such shares. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (7) | Does      not include 339,426 shares of Class A common stock owned by the Company’s      Deferred Compensation Plan, of which George R. Quist and Scott M. Quist      are members of the Investment Committee and, accordingly, exercise shared      voting and investment powers with respect to such  shares. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (8) | Includes      options to purchase 291,463 shares of Class A common stock granted to      George R. Quist that are currently exercisable or will become exercisable      within 60 days of March 31, 2009. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (9) | Includes      options to purchase 189,109 shares of Class A common stock and 685,327      shares of Class C common stock granted to Scott M. Quist that are      currently exercisable or will become exercisable within 60 days of March      31, 2009. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (10) | The      managing partner of Associated Investors is George R. Quist, who exercises      sole voting and investment powers. |
|------|-----------------------------------------------------------------------------------------------------------------------------|

| (11) | Includes      options to purchase 67,903 shares of Class A common stock granted to G.      Robert Quist that are currently exercisable or will become exercisable      within 60 days of March 31, 2009. |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (12) | Includes      options to purchase 82,675 shares of Class A common stock granted to Mr.      Beckstead that are currently exercisable or will become exercisable within      60 days of March 31, 2009. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (13) | Includes      options to purchase 9,844 shares of Class A common stock granted to Mr.      Sill that are currently exercisable or will become exercisable within 60      days of March 31, 2009. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (14) | Includes      options to purchase 47,007 shares of Class A common stock granted to Ms.      Overbaugh that are currently exercisable or will become exercisable within      60 days of March 31, 2009. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (15) | Includes      options to purchase 8,953 shares of Class A common stock granted to Mr.      Hunter that are currently exercisable or will become exercisable within 60      days of March 31, 2009. |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (16) | Includes      options to purchase 8,953 shares of Class A common stock granted to Mr.      Wilbur that are currently exercisable or will become exercisable within 60      days of March 31, 2009. |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (17) | Includes      options to purchase 8,953 shares of Class A common stock granted to Mr.      Crittenden that are currently exercisable or will become exercisable      within 60 days of March 31, 2009. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (18) | Includes      options to purchase 8,953 shares of Class A common stock granted to Mr.      Moody that are currently exercisable or will become exercisable within 60      days of March 31, 2009. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | II. | Condensed      Balance Sheets as of December 31, 2007 and 2006 and CondensedStatement      of Earnings and Cash Flows for the years ended 2007, 2006 and      2005 |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | IV.  | Reinsurance |
|--|-----------|-------------|

|  | V.  | Valuation      and Qualifying Accounts |
|--|----------|----------------------------------------|

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

| 3.1   |   | Articles      of Restatement of Articles of Incorporation (4)                                                                                                                                                                                   |
|-------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.2   |   | Amended      Bylaws (6)                                                                                                                                                                                                                         |
| 4.1   |   | Specimen      Class A Stock Certificate (1)                                                                                                                                                                                                     |
| 4.2   |   | Specimen      Class C Stock Certificate (1)                                                                                                                                                                                                     |
| 4.3   |   | Specimen      Preferred Stock Certificate and Certificate of Designation of Preferred      Stock (1)                                                                                                                                            |
| 10.1  |   | Restated      and Amended Employee Stock Ownership Plan and Trust Agreement      (1)                                                                                                                                                            |
| 10.2  |   | 2003      Stock Option Plan (5)                                                                                                                                                                                                                 |
| 10.3  |   | 2006      Director Stock Option Plan (12)                                                                                                                                                                                                       |
| 10.4  |   | Deferred      Compensation Agreement with George R. Quist (2)                                                                                                                                                                                   |
| 10.5  |   | Deferred      Compensation Plan (3)                                                                                                                                                                                                             |
| 10.6  |   | Employment      agreement with J. Lynn Beckstead, Jr. (7)                                                                                                                                                                                       |
| 10.7  |   | Employment      agreement with Scott M. Quist (8)                                                                                                                                                                                               |
| 10.8  |   | Agreement      and Plan of Complete Liquidation of Southern Security Life Insurance      Company into Security National Life Insurance Company  (9)                                                                                             |
| 10.9  |   | Assignment      between Southern Security Life Insurance Company and Security National      Life Insurance Company(9)                                                                                                                           |
| 10.10 |   | Assignment      between Southern Security Life Insurance Company and Security National      Life Insurance Company (10)                                                                                                                         |
| 10.11 |   | Unit      Purchase Agreement among Security National Financial Corporation, C &      J Financial, LLC, Henry Culp, Jr., and Culp Industries      Inc.(11)                                                                                   |
| 10.12 |   | Consulting      Agreement with Henry Culp, Jr., (11)                                                                                                                                                                                            |
| 10.13 |   | Employment      Agreement with Kevin O. Smith (11)                                                                                                                                                                                              |
| 10.14 |   | Non-Competition      and Confidentiality Agreement with Henry Culp, Jr. (11)                                                                                                                                                                    |
| 10.15 |   | Stock      Purchase Agreement among Security National Life Insurance Company, Capital      Reserve Life Insurance Company, and the shareholders of Capital Reserve      Life Insurance Company (12)                                             |
| 10.16 |   | Indemnification      Agreement among Security National Life Insurance Company, Capital Reserve      Life Insurance Company, and the shareholders of Capital Reserve Life      Insurance Company (13)                                            |
| 10.17 |   | Escrow      Agreement among Security National Insurance Company, Capital Reserve Life      Insurance Company, the shareholders of Capital Reserve Life Insurance      Company, and Mackey Price Thompson & Ostler as Escrow Agent      (13) |

----

| 10.18 |   | Reinsurance      Agreement between Security National Life Insurance Company and Capital      Reserve Life Insurance Company (13)                                                                                                                          |
|-------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.19 |   | Stock      Purchase Agreement among Security National Life Insurance Company,      Southern Security Life Insurance Company, and the shareholders of Southern      Security Life Insurance Company (14)                                                   |
| 10.20 |   | Reinsurance      Agreement among Security National Life Insurance Company, Southern      Security Life Insurance Company, and the shareholders of Southern Security      Life Insurance Company (15)                                                      |
| 10.21 |   | Escrow      Agreement among Security National Life Insurance Company, Southern      Security Life Insurance Company, the shareholders of Southern Security      Life Insurance Company, and Mackey Price Thompson & Ostler, as escrow      agent (16) |
| 10.22 |   | Indemnification      Agreement among SecurityNational Mortgage Company, Lehman Brothers Bank,      and Aurora Loan Services, LLC                                                                                                                          |
| 10.23 |   | Subsidiaries      of the Registrant                                                                                                                                                                                                                       |
| 31.1  |   | Certification      pursuant to 18 U.S.C. Section 1350, as enacted by Section 302 of the      Sarbanes-Oxley Act of 2002                                                                                                                                   |
| 31.2  |   | Certification      pursuant to 18 U.S.C. Section 1350, as enacted by Section 302 of the      Sarbanes-Oxley Act of 2002                                                                                                                                   |
| 32.1  |   | Certification      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of      the Sarbanes-Oxley Act of 2002                                                                                                                          |
| 32.2  |   | Certification      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of      the Sarbanes-Oxley Act of 2002                                                                                                                          |

----

|   | (1)                                                         |   | Incorporated      by reference from Registration Statement on Form S-1, as filed on      September 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 April 3,      2002                                                                                    |
|   | (4)                                                         |   | Incorporated      by reference from Report on Form 8-K/A as filed on January 8,      2003                                                                                         |
|   | (5)                                                         |   | Incorporated      by reference from Schedule 14A Definitive Proxy Statement, Filed on      September 5, 2003, relating to the Company’s Annual Meeting of      Shareholders |
|   | (6)                                                         |   | Incorporated      by reference from Report on Form 10-Q, as filed on November 14,      2003                                                                                       |
|   | (7)                                                         |   | Incorporated      by reference from Report on Form 10-K, as filed on March 30,      2004                                                                                          |
|   | (8)                                                         |   | Incorporated      by reference from Report on Form 10-Q, as filed on August 13,      2004                                                                                         |
|   | (9)                                                         |   | Incorporated      by reference from Report on Form 8-K, as filed on January 12,      2007                                                                                         |
|   | (10)                                                        |   | Incorporated      by reference from Report on Form 10-K, as filed on March 31,      2007                                                                                          |
|   | (11)                                                        |   | Incorporated      by reference from Report on Form 8-K, as filed on August 8,      2007                                                                                           |
|   | (12)                                                        |   | Incorporated      by reference from Report on Form 8-K, as filed on November 2,      2007                                                                                         |
|   | (13)                                                        |   | Incorporated      by reference from Report on Form 8-K, as filed on January 14,      2008                                                                                         |
|   | (14)                                                        |   | Incorporated      by reference from Report on Form 8-K, as filed on August 25,      2008                                                                                          |
|   | (15)                                                        |   | Incorporated      by reference from Report on Form 8-K/A, as filed on September 17,      2008                                                                                     |
|   | (16)                                                        |   | Incorporated      by reference from Report on Form 8-K, as filed on January 7,      2009                                                                                          |
|   |                                                        |   |                                                                                                                                                                              |
| (b)    | Reports      on Form 8-K:                                   |
|   |                                                        |   |                                                                                                                                                                              |
|   | Current      report on Form 8-K, as filed on January 7,2009 |

----

| Dated:  March      31, 2009 | By:    | s/s George R. Quist                                   |
|---------------------------------------|--------|-------------------------------------------------------|
|                                  |   | George      R. Quist                                  |
|                                  |   | Chairman      of the Board and Chief ExecutiveOfficer |

| SIGNATURE                                        |        | TITLE                              |   | DATE                |
|--------------------------------------------------|--------|------------------------------------|--------|---------------------|
|                                             |   |                               |   |                |
| s/s   George R.      Quist        |   | Chairman      of the Board and     |   |                |
| George      R. Quist                             |   | Chief      Executive Officer       |   |                |
|                                             |   | (Principal      Executive Officer) |   | March      31, 2009 |
|                                             |   |                               |   |                |
| s/s   Scott M.      Quist         |   | President,      Chief Operating    |   |                |
| Scott      M. Quist                              |   | Officer      and Director          |   | March      31, 2009 |
|                                             |   |                               |   |                |
| s/s   Stephen M.      Sill        |   | Vice      President, Treasurer     |   |                |
| Stephen      M. Sill                             |   | and      Chief Financial Officer   |   |                |
|                                             |   | (Principal      Financial and      |   |                |
|                                             |   | Accounting      Officer)           |   | March      31, 2009 |
|                                             |   |                               |   |                |
| s/s   J. Lynn Beckstead,      Jr. |   | Vice      President and Director   |   | March      31, 2009 |
| J.      Lynn Beckstead, Jr.                      |   |                               |   |                |
|                                             |   |                               |   |                |
| s/s   Charles L.      Crittenden  |   | Director                           |   | March      31, 2009 |
| Charles      L. Crittenden                       |   |                               |   |                |
|                                             |   |                               |   |                |
| s/s   H. Craig      Moody         |   | Director                           |   | March      31, 2009 |
| H.      Craig Moody                              |   |                               |   |                |
|                                             |   |                               |   |                |
| s/s   Norman G.      Wilbur       |   | Director                           |   | March      31, 2009 |
| Norman      G. Wilbur                            |   |                               |   |                |
|                                             |   |                               |   |                |
| s/s   Robert G.      Hunter       |   | Director                           |   | March      31, 2009 |
| Robert      G. Hunter                            |   |                               |   |                |

----

|                                                                                                                                |   | December      31, |       |
|-------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|------------|
|                                                                                                                                |   | 2008              |       |   | 2007 |   |
| Assets                                                                                                                              |   |              |       |   |   |   |
|                                                                                                                                |   |              |       |   |   |   |
| Cash                                                                                                                                |   | $                 | 768,630    |   |   | $ | 197,698 |   |
| Mortgage      loans on real estate                                                                                                  |   |              | 151,678    |   |   |   | -- |   |
| Real      estate net of accumulated depreciation of $1,439                                                                          |   |              | 31,599     |   |   |   | -- |   |
| Investment      in subsidiaries (equity method)                                                                                     |   |              | 69,272,735 |   |   |   | 70,864,844 |   |
|                                                                                                                                |   |              |       |   |   |   |   |   |
| Receivables:                                                                                                                        |   |              |       |   |   |   |   |   |
| Receivable      from affiliates                                                                                                     |   |              | 6,694,918  |   |   |   | 6,523,437 |   |
| Other                                                                                                                               |   |              | 187,000    |   |   |   | -- |   |
| Allowance      for doubtful accounts                                                                                                |   |              | --         |   |   |   | -- |   |
| Total      receivables                                                                                                              |   |              | 6,881,918  |   |   |   | 6,523,437 |   |
|                                                                                                                                |   |              |       |   |   |   |   |   |
| Property      and equipment, at cost, net      of accumulated depreciation of      $1,425,822 for 2008 and $1,233,146 for      2007 |   |              | 381,729    |   |   |   | 571,720 |   |
|                                                                                                                                |   |              |       |   |   |   |   |   |
| Other      assets                                                                                                                   |   |              | 53,166     |   |   |   | 325,480 |   |
|                                                                                                                                |   |              |       |   |   |   |   |   |
| Total      assets                                                                                                                   |   | $                 | 77,541,455 |   |   | $ | 78,483,179 |   |

----

|                                                                                                                                                                                         |   | December      31, |       |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|------------|
|                                                                                                                                                                                         |   | 2008              |       |   | 2007 |   |
| Liabilities      and Stockholders’ Equity Liabilities                                                                                                                                  |   |              |       |   |   |   |
| Bank      loans payable:                                                                                                                                                                     |   |              |       |   |   |   |
| Current      installments                                                                                                                                                                    |   | $                 | 1,361,182  |   |   | $ | 2,026,012 |   |
| Long-term                                                                                                                                                                                    |   |              | 2,317,345  |   |   |   | 1,586,458 |   |
| Notes      and contracts payable:                                                                                                                                                            |   |              |       |   |   |   |   |   |
| Current      installments                                                                                                                                                                    |   |              | 95,237     |   |   |   | 190,860 |   |
| Long-term                                                                                                                                                                                    |   |              | --         |   |   |   | 115,230 |   |
| Advances      from affiliated companies                                                                                                                                                      |   |              | 8,974,568  |   |   |   | 8,990,428 |   |
| Other      liabilities and accrued expenses                                                                                                                                                  |   |              | 1,696,934  |   |   |   | 1,298,401 |   |
| Income      taxes                                                                                                                                                                            |   |              | 9,183,910  |   |   |   | 8,491,638 |   |
| Total      liabilities                                                                                                                                                                       |   |              | 23,629,176 |   |   |   | 22,699,027 |   |
|                                                                                                                                                                                         |   |              |       |   |   |   |   |   |
| Stockholders’      Equity                                                                                                                                                              |   |              |       |   |   |   |   |   |
| Class      A common stock $2.00 par value; 20,000,000      shares authorized; issued      8,284,109 shares in 2008 and      7,885,229 shares in 2007                                         |   |              | 16,568,218 |   |   |   | 15,770,458 |   |
| Class      B non-voting common stock-$1.00 par value; 5,000,000      shares authorized; none issued or  outstanding                                                                     |   |              | --         |   |   |   | -- |   |
| Class      C convertible common stock, $0.20 par value; 15,000,000      shares authorized; issued 8,912,315 shares      in 2008 and 8,530,699 shares in 2007                                 |   |              | 1,782,463  |   |   |   | 1,706,140 |   |
| Additional      paid-in capital                                                                                                                                                              |   |              | 17,985,848 |   |   |   | 17,737,172 |   |
| Accumulated      other comprehensive income                                                                                                                                                  |   |              | 417,101    |   |   |   | 1,596,791 |   |
| Retained      earnings                                                                                                                                                                       |   |              | 21,023,179 |   |   |   | 21,104,156 |   |
| Treasury      stock at cost- (1,598,568 Class A shares and      -0- Class C shares in 2008; 1,635,864 Class      A shares and -0- Class C shares in      2007, held by affiliated companies) |   |              | (3,864,530 | ) |   |   | (2,130,565 | ) |
| Total      stockholders’ equity                                                                                                                                                        |   |              | 53,912,279 |   |   |   | 55,784,152 |   |
| Total      Liabilities and Stockholders’ Equity                                                                                                                                        |   | $                 | 77,541,455 |   |   | $ | 78,483,179 |   |

----

|                                                                      |   | Year      Ended December 31, |      |
|---------------------------------------------------------------------------|--------|------------------------------|-----------|
|                                                                      |   | 2008                         |      |   | 2007 |   |   | 2006 |   |
| Revenue                                                                   |   |                         |      |   |   |   |   |   |   |
| Net      investment income                                                |   | $                            | 161       |   |   | $ | 772 |   |   | $ | 1,478 |   |
| Fees      from affiliates                                                 |   |                         | 2,543,907 |   |   |   | 4,098,718 |   |   |   | 4,187,330 |   |
| Total      revenue                                                        |   |                         | 2,544,068 |   |   |   | 4,099,490 |   |   |   | 4,188,808 |   |
| Benefits      and Expenses:                                               |   |                         |      |   |   |   |   |   |   |   |   |   |
| General      and administrative expenses                                  |   |                         | 2,253,673 |   |   |   | 2,007,974 |   |   |   | 1,937,033 |   |
| Interest      expense                                                     |   |                         | 149,355   |   |   |   | 234,743 |   |   |   | 349,650 |   |
| Expenses      to affiliates                                               |   |                         | 61,204    |   |   |   | 131,133 |   |   |   | 131,133 |   |
| Total      benefits and expenses                                          |   |                         | 2,464,232 |   |   |   | 2,373,850 |   |   |   | 2,417,816 |   |
|                                                                      |   |                         |      |   |   |   |   |   |   |   |   |   |
| Earnings      before income taxes, and earnings      of subsidiaries |   |                         | 79,836    |   |   |   | 1,725,640 |   |   |   | 1,770,992 |   |
| Income      tax expense                                                   |   |                         | (911,197  | ) |   |   | (605,099 | ) |   |   | (1,472,098 | ) |
| Equity      in earnings of subsidiaries                                   |   |                         | 1,406,214 |   |   |   | 1,144,855 |   |   |   | 4,825,556 |   |
|                                                                      |   |                         |      |   |   |   |   |   |   |   |   |   |
| Net      earnings                                                         |   | $                            | 574,853   |   |   | $ | 2,265,396 |   |   | $ | 5,124,450 |   |

----

|                                                                                          |   | Year      Ended December 31, |       |
|-----------------------------------------------------------------------------------------------|--------|------------------------------|------------|
|                                                                                          |   | 2008                         |       |   | 2007 |   |   | 2006 |   |
| Cash      flows from operating activities:                                                    |   |                         |       |   |   |   |   |   |   |
| Net      earnings                                                                             |   | $                            | 574,853    |   |   | $ | 2,265,396 |   |   | $ | 5,124,450 |   |
| Adjustments      to reconcile net earnings to      net cash provided by operating activities: |   |                         |       |   |   |   |   |   |   |   |   |   |
| Depreciation      and amortization                                                            |   |                         | 194,116    |   |   |   | 268,942 |   |   |   | 198,241 |   |
| Undistributed      earnings of      affiliates                                                |   |                         | (1,406,214 | ) |   |   | (1,144,855 | ) |   |   | (4,825,556 | ) |
| Provision      for income taxes                                                               |   |                         | 918,044    |   |   |   | 605,099 |   |   |   | 1,472,095 |   |
| Provision      for losses on loans & real estate                                          |   |                         | 500,000    |   |   |   | -- |   |   |   | -- |   |
| Change      in assets and liabilities:                                                        |   |                         |       |   |   |   |   |   |   |   |   |   |
| Accrued      Investment Income from Affiliates                                                |   |                         | 272,314    |   |   |   | (286,480 | ) |   |   | -- |   |
| Accounts      receivable                                                                      |   |                         | (187,000   | ) |   |   | 16,586 |   |   |   | (1 | ) |
| Other      assets                                                                             |   |                         | --         |   |   |   | -- |   |   |   | 61,950 |   |
| Other      liabilities                                                                        |   |                         | 158,568    |   |   |   | 265,675 |   |   |   | (40,675 | ) |
| Net      cash provided by operating activities                                                |   |                         | 1,024,681  |   |   |   | 1,990,363 |   |   |   | 1,990,504 |   |
|                                                                                          |   |                         |       |   |   |   |   |   |   |   |   |   |
| Cash      flows from investing activities:                                                    |   |                         |       |   |   |   |   |   |   |   |   |   |
| Purchase      of long-term investments                                                        |   |                         | --         |   |   |   | -- |   |   |   | (39,000 | ) |
| Purchase      of equipment                                                                    |   |                         | (2,685     | ) |   |   | (349,215 | ) |   |   | (269,942 | ) |
| Mortgage,      policy loans made                                                              |   |                         | (715,606   | ) |   |   | -- |   |   |   | -- |   |
| Payments,      mortgage loans                                                                 |   |                         | 30,889     |   |   |   | -- |   |   |   | -- |   |
| Net      cash (used in) provided by investing      activities                                 |   |                         | (687,402   | ) |   |   | (349,215 | ) |   |   | (308,942 | ) |
|                                                                                          |   |                         |       |   |   |   |   |   |   |   |   |   |
| Cash      flows from financing activities:                                                    |   |                         |       |   |   |   |   |   |   |   |   |   |
| Checks      written in excess of cash in bank                                                 |   |                         | --         |   |   |   | -- |   |   |   | -- |   |
| Advances      from (to) affiliates                                                            |   |                         | (187,341   | ) |   |   | 78,001 |   |   |   | 352,079 |   |
| Payments      of notes and contracts payable                                                  |   |                         | (1,662,223 | ) |   |   | (1,515,590 | ) |   |   | (2,040,785 | ) |
| Stock      options                                                                            |   |                         | 378,227    |   |   |   | 3,000 |   |   |   | 105,599 |   |
| Proceeds      from borrowings on notes and contracts      payable                             |   |                         | 1,500,000  |   |   |   | 631,500 |   |   |   | -- |   |
| Purchase      of treasury stock                                                               |   |                         | --         |   |   |   | (800,000 | ) |   |   | (3,901 | ) |
| Sale      of treasury stock                                                                   |   |                         | 204,990    |   |   |   | -- |   |   |   | 208,250 |   |
| Net      cash used in financing activities                                                    |   |                         | 233,653    |   |   |   | (1,603,089 | ) |   |   | (1,378,758 | ) |
| Net      change in cash                                                                       |   |                         | 570,932    |   |   |   | 38,059 |   |   |   | 302,804 |   |
| Cash      at beginning of year                                                                |   |                         | 197,698    |   |   |   | 159,639 |   |   |   | (143,165 | ) |
| Cash      at end of year                                                                      |   | $                            | 768,630    |   |   | $ | 197,698 |   |   | $ | 159,639 |   |

----

|                                                                                                                                                                          |   | December      31, |      |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|-----------|
|                                                                                                                                                                          |   | 2008              |      |   | 2007 |   |
| Bank      prime rate less .28% (2.97% at December 31, 2008), collateralized      by 15,000 shares of Security      National Life Insurance Company stock,      due June 2011. |   | $                 | 2,003,527 |   |   | $ | 3,129,896 |   |
|                                                                                                                                                                          |   |              |      |   |   |   |   |   |
| Mark-to-market      of interest rate swaps adjustment                                                                                                                         |   |              | --        |   |   |   | (17,426 | ) |
|                                                                                                                                                                          |   |              |      |   |   |   |   |   |
| Bank      prime rate less .75% (2.50% at December 31, 2008) revolving      line of credit of $7,800,000, accrued interest paid      quarterly, extended to June 2011          |   |              | 1,675,000 |   |   |   | 500,000 |   |
| Total      bank loans                                                                                                                                                         |   |              | 3,678,527 |   |   |   | 3,612,470 |   |
|                                                                                                                                                                          |   |              |      |   |   |   |   |   |
| Less      current installments                                                                                                                                                |   |              | 1,361,182 |   |   |   | 2,026,012 |   |
| Bank      loans, excluding current installments                                                                                                                               |   | $                 | 2,317,345 |   |   | $ | 1,586,458 |   |

|                                                                                                                                                                                 |   | December      31, |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|--------|
|                                                                                                                                                                                 |   | 2008              |   |   | 2007 |   |
| 5%      note payable to a former owner of C & J Financial due  in      monthly installments of $16,737 including  principal      and interest, due July 2009 |   | $                 | 94,276 |   |   | $ | 305,129 |   |
| Other                                                                                                                                                                                |   |              | 961    |   |   |   | 961 |   |
| Total      notes and contracts                                                                                                                                                       |   |              | 95,237 |   |   |   | 306,090 |   |
| Less      current installments                                                                                                                                                       |   |              | 95,237 |   |   |   | 190,860 |   |
| Notes      and contracts, excluding current installments                                                                                                                             |   | $                 | -0-    |   |   | $ | 115,230 |   |

| 2009       |   | $      | 1,456,419 |   |
|------------|--------|--------|-----------|--------|
| 2010       |   |   | 1,136,361 |   |
| 2011       |   |   | 1,180,984 |   |
| 2012       |   |   | --        |   |
| 2013       |   |   | --        |   |
| Thereafter |   |   | --        |   |
| Total      |   | $      | 3,773,764 |   |

----

|                                                |   | December      31, |      |
|-----------------------------------------------------|--------|-------------------|-----------|
|                                                |   | 2008              |      |   | 2007 |   |
| Non-interest      bearing advances from affiliates: |   |              |      |   |   |   |
| Cemetery      and Mortuary subsidiary               |   | $                 | 1,459,841 |   |   | $ | 1,459,841 |   |
| Life      insurance subsidiaries                    |   |              | 7,470,744 |   |   |   | 7,486,604 |   |
| Mortgage      subsidiary                            |   |              | 43,983    |   |   |   | 43,983 |   |
|                                                |   | $                 | 8,974,568 |   |   | $ | 8,990,428 |   |

----

|                                |   |   |             |   |   |   |          |   |   |   |            |   |   |   |          |   |   | Percentage     |
|-------------------------------------|--------|--------|------------------|--------|--------|--------|---------------|--------|--------|--------|-----------------|--------|--------|--------|---------------|--------|--------|----------------|
|                                |   |   |             |   |   |   | Ceded      to |   |   |   | Assumed         |   |   |   |          |   |   | of      Amount |
|                                |   |   | Direct           |   |   |   | Other         |   |   |   | from      Other |   |   |   | Net           |   |   | Assumed        |
|                                |   |   | Amount           |   |   |   | Companies     |   |   |   | Companies       |   |   |   | Amount        |   |   | to      Net    |
| 2008                                |   |   |             |   |   |   |          |   |   |   |            |   |   |   |          |   |   |           |   |   |
| Life      Insurance in force ($000) |   | $      | 1,303,722        |   |   | $      | 125,065       |   |   | $      | 1,150,687       |   |   | $      | 2,329,344     |   |   |           | 49.4% |   |
|                                |   |   |             |   |   |   |          |   |   |   |            |   |   |   |          |   |   |           |   |   |
| Premiums:                           |   |   |             |   |   |   |          |   |   |   |            |   |   |   |          |   |   |           |   |   |
| Life      Insurance                 |   | $      | 35,133,624       |   |   | $      | 649,964       |   |   | $      | 1,269,658       |   |   | $      | 35,753,318    |   |   |           | 3.6% |   |
| Accident      and Health Insurance  |   |   |  227,908    |   |   |   |  162     |   |   |   |  233       |   |   |   |  227,979 |   |   |           | 0.1% |   |
| Total      premiums                 |   | $      | 35,361,532       |   |   | $      | 650,126       |   |   | $      | 1,269,891       |   |   | $      | 35,981,297    |   |   |           | 3.5% |   |
|                                |   |   |             |   |   |   |          |   |   |   |            |   |   |   |          |   |   |           |   |   |
| 2007                                |   |   |             |   |   |   |          |   |   |   |            |   |   |   |          |   |   |           |   |   |
| Life      Insurance in force ($000) |   | $      | 1,243,906        |   |   | $      | 114,155       |   |   | $      | 1,190,843       |   |   | $      | 2,320,594     |   |   |           | 51.3% |   |
|                                |   |   |             |   |   |   |          |   |   |   |            |   |   |   |          |   |   |           |   |   |
| Premiums:                           |   |   |             |   |   |   |          |   |   |   |            |   |   |   |          |   |   |           |   |   |
| Life      Insurance                 |   | $      | 30,886,927       |   |   | $      | 586,877       |   |   | $      | 1,713,765       |   |   | $      | 32,013,815    |   |   |           | 5.4% |   |
| Accident      and Health Insurance  |   |   |  248,702    |   |   |   |  189     |   |   |   |  509       |   |   |   |  249,022 |   |   |           | 0.2% |   |
| Total      premiums                 |   | $      | 31,135,629       |   |   | $      | 587,066       |   |   | $      | 1,714,274       |   |   | $      | 32,262,837    |   |   |           | 5.3% |   |
|                                |   |   |             |   |   |   |          |   |   |   |            |   |   |   |          |   |   |           |   |   |
| 2006                                |   |   |             |   |   |   |          |   |   |   |            |   |   |   |          |   |   |           |   |   |
| Life      Insurance in force ($000) |   | $      | 1,232,142        |   |   | $      | 122,232       |   |   | $      | 1,388,552       |   |   | $      | 2,498,462     |   |   |           | 55.6% |   |
|                                |   |   |             |   |   |   |          |   |   |   |            |   |   |   |          |   |   |           |   |   |
| Premiums:                           |   |   |             |   |   |   |          |   |   |   |            |   |   |   |          |   |   |           |   |   |
| Life      Insurance                 |   | $      |  29,140,230 |   |   | $      | 328,854       |   |   | $      | 1,682,855       |   |   | $      | 30,494,231    |   |   |           | 5.5% |   |
| Accident      and Health Insurance  |   |   |  281,884    |   |   |   |  148     |   |   |   |  524       |   |   |   |  282,260 |   |   |           | 0.2% |   |
| Total      premiums                 |   | $      | 29,422,114       |   |   | $      | 329,002       |   |   | $      | 1,683,379       |   |   | $      | 30,776,491    |   |   |           | 5.5% |   |

----

|                                                                                                             |   |            |       |   | Additions       |   |      | Deductions |   |   |           |   |
|------------------------------------------------------------------------------------------------------------------|--------|-----------------|------------|--------|-----------------|--------|-----------|------------|--------|--------|----------------|--------|
|                                                                                                             |   | Balance      at |       |   | Charged      to |   |      | Disposals  |   |   | Balance        |   |
|                                                                                                             |   | Beginning       |       |   | Costs      and  |   |      | and        |   |   | at      End of |   |
|                                                                                                             |   | of      Year    |       |   | Expenses        |   |      | Write-offs |   |   | Year           |   |
| For the Year Ended December 31,      2008                                                                        |   |            |       |   |            |   |      |       |   |   |           |   |
| Accumulated      depreciation on real estate                                                                     |   | $               | 4,340,390  |   |            | $      | 672,721   |       |   | $      | (3,540         | )      |   | $ | 5,009,571 |   |
|                                                                                                             |   |            |       |   |            |   |      |       |   |   |           |   |   |   |   |   |
| Allowance      for losses on mortgage loans on      real estate and construction loans held      for investment. |   |            | 1,435,131  |   |            |   | 4,338,553 |       |   |   | (993,217       | )      |   |   | 4,780,467 |   |
|                                                                                                             |   |            |       |   |            |   |      |       |   |   |           |   |   |   |   |   |
| Accumulated      depreciation on      property and equipment                                                     |   |            | 15,664,046 |   |            |   | 2,052,019 |       |   |   | (27,647        | )      |   |   | 17,688,418 |   |
|                                                                                                             |   |            |       |   |            |   |      |       |   |   |           |   |   |   |   |   |
| Allowance      for doubtful accounts                                                                             |   |            | 1,293,185  |   |            |   | 1,034,202 |       |   |   | (344,094       | )      |   |   | 1,983,293 |   |
|                                                                                                             |   |            |       |   |            |   |      |       |   |   |           |   |   |   |   |   |
| Allowance      for doubtful accounts on      collateral loans                                                    |   |            | 492,089    |   |            |   | 166,000   |       |   |   | (102,943       | )      |   |   | 555,146 |   |
|                                                                                                             |   |            |       |   |            |   |      |       |   |   |           |   |   |   |   |   |
| For the Year Ended December 31,      2007                                                                        |   |            |       |   |            |   |      |       |   |   |           |   |   |   |   |   |
| Accumulated      depreciation on real estate                                                                     |   | $               | 4,024,710  |   |            | $      | 315,680   |       |   | $      | --             |   |   | $ | 4,340,390 |   |
|                                                                                                             |   |            |       |   |            |   |      |       |   |   |           |   |   |   |   |   |
| Allowance      for losses on mortgage loans on      real estate and construction loans                           |   |            | 1,026,576  |   |            |   | 420,000   |       |   |   | (11,445        | )      |   |   | 1,435,131 |   |
|                                                                                                             |   |            |       |   |            |   |      |       |   |   |           |   |   |   |   |   |
| Accumulated      depreciation on      property and equipment                                                     |   |            | 13,522,715 |   |            |   | 2,232,928 |       |   |   | (91,597        | )      |   |   | 15,664,046 |   |
|                                                                                                             |   |            |       |   |            |   |      |       |   |   |           |   |   |   |   |   |
| Allowance      for doubtful accounts                                                                             |   |            | 866,392    |   |            |   | 653,905   |       |   |   | (227,112       | )      |   |   | 1,293,185 |   |
|                                                                                                             |   |            |       |   |            |   |      |       |   |   |           |   |   |   |   |   |
| Allowance      for doubtful accounts on      collateral loans                                                    |   |            | 435,726    |   |            |   | 57,070    |       |   |   | (707           | )      |   |   | 492,089 |   |
|                                                                                                             |   |            |       |   |            |   |      |       |   |   |           |   |   |   |   |   |
| For the Year Ended December 31,      2006                                                                        |   |            |       |   |            |   |      |       |   |   |           |   |   |   |   |   |
| Accumulated      depreciation on real estate                                                                     |   | $               | 3,766,259  |   |            | $      | 304,711   |       |   | $      | (46,260        | )      |   | $ | 4,024,710 |   |
|                                                                                                             |   |            |       |   |            |   |      |       |   |   |           |   |   |   |   |   |
| Allowance      for losses on mortgage loans on      real estate and construction loans                           |   |            | 562,909    |   |            |   | 463,667   |       |   |   | --             |   |   |   | 1,026,576 |   |
|                                                                                                             |   |            |       |   |            |   |      |       |   |   |           |   |   |   |   |   |
| Accumulated      depreciation on      property and equipment                                                     |   |            | 14,373,406 |   |            |   | 1,718,306 |       |   |   | (2,568,997     | )      |   |   | 13,522,715 |   |
|                                                                                                             |   |            |       |   |            |   |      |       |   |   |           |   |   |   |   |   |
| Allowance      for doubtful accounts                                                                             |   |            | 868,197    |   |            |   | 137,379   |       |   |   | (139,184       | )      |   |   | 866,392 |   |
|                                                                                                             |   |            |       |   |            |   |      |       |   |   |           |   |   |   |   |   |
| Allowance      for doubtful accounts on collateral      loans                                                    |   |            | 339,218    |   |            |   | 100,000   |       |   |   | (3,492         | )      |   |   | 435,726 |   |

----

| Exhibit No. | Document Name                                                                                                                    |
|-------------|----------------------------------------------------------------------------------------------------------------------------------|
|        |                                                                                                                             |
| 10.22       | Indemnification      Agreement                                                                                                   |
|        |                                                                                                                             |
| 10.23       | Subsidiaries      of the Registrant                                                                                              |
|        |                                                                                                                             |
| 31.1        | Certification      pursuant to 18 U.S.C. Section 1350, as enacted by Section 302 of the      Sarbanes-Oxley Act of 2002          |
|        |                                                                                                                             |
| 31.2        | Certification      pursuant to 18 U.S.C. Section 1350, as enacted by Section 302 of the      Sarbanes-Oxley Act of 2002          |
|        |                                                                                                                             |
| 32.1        | Certification      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of      the Sarbanes-Oxley Act of 2002 |
|        |                                                                                                                             |
| 32.2   | Certification      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of      the Sarbanes-Oxley Act of2002  |

----