SECURITIES AND EXCHANGE COMMISSION

                                       Washington, D.C. 20549

                                              Form 10-K

                        [X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                                 THE SECURITIES EXCHANGE ACT OF 1934
                           For the fiscal year ended December 31, 1996, or

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

                                    Commission File Number 0-9341

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

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

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

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

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

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

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

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

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

Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.

                                                               Yes [X]  No___

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

The aggregate market value of the voting stock held by non-
affiliates of the registrant as of March 14, 1997 was
$16,378,000.

As of March 14, 1997, registrant had 3,479,133 shares of
Class A Common Stock and 4,913,533 shares of Class C Stock.

                                 DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive Proxy Statement for the
registrant's 1996 Annual Meeting of Stockholders are
incorporated by reference into Part III hereof.

<PAGE>

                                              PART I

Item 1.  Business

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

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

The Company was organized as a holding company in 1979 when
Security National Life became a wholly owned subsidiary of
the Company and the former stockholders of Security
National Life became stockholders of the Company.  Security
National Life was formed in 1965 and has grown through the
direct sale of life insurance and annuities and through the
acquisition of other insurance companies, including the
acquisitions of Investors Equity Life Insurance Company of
Hawaii Ltd, ("Investors Equity") in June 1986 and its
subsequent sale in June 1991, Capital Investors Life
Insurance Company in December 1994 and Civil Service
Employees Life Insurance Company in December 1995. 
Memorial Estates, Inc. and Memorial Mortuary became direct
subsidiaries of the Company in the 1979 reorganization when
the Company was formed.  These companies were acquired by
Security National Life in 1973.  The cemetery and mortuary
operations have also grown through the acquisition of other
cemetery and mortuary companies, including the acquisitions
of Paradise Chapel Funeral Home, Inc. in 1989, Holladay

<PAGE>

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

Life Insurance

  Products

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

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

  Markets and Distribution

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

<PAGE>

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

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

In marketing the funeral plan insurance, the Company also
seeks and obtains third-party endorsements from other
cemeteries and mortuaries within its marketing areas. 
Typically, these cemeteries and mortuaries will provide
letters of endorsement and may share in mailing and other
lead-generating costs.  The incentive for such businesses
to share the costs is that these businesses are usually
made the beneficiary of the policy as their interest may
appear.  The following table summarizes the life insurance
business as of and for the five years ended December 31,
1996:

                   1996           1995         1994          1993         1992
                  ------         ------       ------        ------      -------
Life
 Insurance
Policy/Cert. 
    Count
    as of
    December 31    42,034        42,711       41,064       32,895       32,682
Insurance
    in force
    as of
    December 31
(omitted 000)    $546,213      $530,688     $436,600     $310,395     $319,020
Premiums
    Collected
(omitted 000)    $  5,765      $  5,819     $  5,175     $  5,201     $  4,866

    Underwriting

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

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

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

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

Annuities

   Products

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

Holders of annuities enjoy a significant benefit under the
current federal income tax law in that interest accretions
that are credited to the annuities do not incur current
income tax expense on the part of the contract holder. 
Instead, the interest income is tax deferred until such
time as it is paid out to the contract holder.  In order
for the Company to realize a profit on an annuity product,
the Company must maintain an interest rate spread between
its investment income and the interest rate credited to the
annuities.  From that spread must  be deducted commissions,
issuance expenses and general and administrative expenses. 
The Company's annuities currently have credited interest
rates ranging from 4.0% to 6.5%.

   Markets and Distribution

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

<PAGE>

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

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

The following table summarizes the annuity business as of
and for the five years ended December 31, 1996:
<TABLE>
<CAPTION>

                        1996       1995        1994       1993      1992
                       ------     ------     -------     ------    ------
<S>                   <C>        <C>        <C>        <C>       <C>
Annuities
Policy/Cert. 
 Count as of
 December 31           7,049       6,893      5,954      4,605     4,482
Deposits Collected                    
(omitted 000)         $2,859      $2,375     $1,927     $1,905    $1,889

</TABLE>

Accident and Health

  Products

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

  Markets and Distribution

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

The following table summarizes the Accident and Health
business as of and for the five years ended December 31,
1996:
<TABLE>
<CAPTION>
                       1996          1995        1994(1)     1993       1992
                     -------        ------      --------    ------     ------
<S>                 <C>           <C>          <C>         <C>         <C>
Accident
  and Health
Policy/Cert. 
  Count as of
  December 31        33,639        37,302       42,910       347        463
Premiums
  Collected                         
(omitted 000)          $430          $578          $15       $18        $23

</TABLE>

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

Reinsurance

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

The Company's policy is to retain no more than $50,000 of
ordinary insurance per insured life.  Excess risk is
reinsured.  The total amount of life insurance in force at
December 31, 1996, reinsured by other companies aggregated
$73,821,939, representing approximately 14% of the
Company's life insurance in force on that date.

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

Investments

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

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

Cemetery and Mortuary

    Products

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

<PAGE>

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

   Markets and Distribution

The Company's pre-need cemetery and mortuary sales are
marketed to persons of all ages but are generally purchased
by persons 45 years of age and older.  The Company also
markets its mortuary and cemetery products on an at-need
basis.  The Company is limited in its geographic
distribution of these products to areas lying within an
approximate 20 mile radius of its mortuaries and
cemeteries.  This limits the sale of its products primarily
to the area known as the "Wasatch Front," covering
approximately 100 miles between Salt Lake City and Ogden,
Utah, with the greatest concentration of sales being in the
greater Salt Lake City area.  The Company's at-need sales
are similarly limited in geographic area.

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

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

   Products

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

   Markets and Distribution

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

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

Recent Acquisitions and Other Business Activities

   Pinehill Business Park

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

   Security National Mortgage Company

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

  Sunset Funeral Homes

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

  Capital Investors Life Insurance Company

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

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

  California Memorial Estates

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

  Greer-Wilson Funeral Home

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

<PAGE>

  Evergreen Memorial Park

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

   Security National Life Insurance Company

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

   Civil Service Employees Life Insurance Company

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

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

Regulation

The Company's insurance subsidiary, Security National Life,
is subject to comprehensive regulation in the jurisdictions
in which they do business under statutes and regulations
administered by state insurance commissioners.  Such
regulation relates to, among other things, prior approval
of the acquisition of a controlling interest in an
insurance company; standards of solvency which must be met
and maintained; licensing of insurers and their agents;
nature of and limitations on investments; deposits of
securities for the benefit of policyholders; approval of
policy forms and premium rates; periodic examinations of

<PAGE>

the affairs of insurance companies; annual and other
reports required to be filed on the financial condition of
insurers or for other purposes; and requirements regarding
aggregate reserves for life policies and annuity contracts,
policy claims, unearned premiums, and other matters.  The
Company's insurance subsidiaries are subject to this type
of regulation in any state in which they are licensed to do
business.  Such regulation could involve additional costs,
restrict operations or delay implementation of the
Company's business plans.

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

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

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

Income Taxes

The Company's insurance subsidiary, Security National Life,
is taxed under the Life Insurance Company Tax Act of 1984. 
Pursuant thereto, life insurance companies are taxed at
standard corporate rates on life insurance company taxable
income.  Life insurance company taxable income is gross
income less general business deductions, reserves for
future policyholder benefits (with modifications), and a
small life insurance company deduction (up to 60% of life

<PAGE>

insurance company taxable income).  The Company may be
subject to the corporate Alternative Minimum Tax (AMT). 
The exposure to AMT is primarily a result of the small life
insurance company deduction.  Also, under the Tax Reform
Act of 1986, distributions in excess of stockholder's
surplus account or significant decrease in life reserves
will result in taxable income.

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

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

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

Competition

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

The cemetery and mortuary business is also highly
competitive.  In the Salt Lake and Phoenix areas in which
the Company competes, there are a number of cemeteries and
mortuaries which have longer business histories, more
established positions in the community and stronger
financial positions than the Company.  In addition, some of
the cemeteries with which the Company must compete for

<PAGE>

sales are owned by municipalities and, as a result, can
offer lower prices than can the Company.  The Company bears
the cost of a pre-need sales program that is not incurred
by those competitors that do not have a pre-need sales
force.  The Company believes that its products and prices
are generally competitive with those in the industry.

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

Employees

As of December 31, 1996, the Company employed 165 full-time
and 39 part-time employees.

Item 2.  Properties

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

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

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

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

  (1)    As of December 31, 1996, this facility was subject to
         a mortgage of approximately $845,000.  The Company
         leases an additional 15,616 square feet of the
         facility to unrelated third parties for approximately
         $213,000 per year, under leases which expire at
         various dates after 1996.

  (2)    The Company leases an additional 2,766 square feet of
         the facility to unrelated third parties for
         approximately $15,000 per year, under leases which
         expire at various dates after 1996.

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

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

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

Lakeview 
 Cemetery(3) 1700 E.
              Lakeview Dr.
              Bountiful, UT   1973      6          40          4          36

Mountain View
  Cemetery(3) 3115 E. 7800 So.
              Salt Lake City,
               UT             1973     26          54         14          40

Redwood
  Cemetery(3)(5)
              6500 So. 
              Redwood Rd.
              West Jordan, UT 1973     40          78         30          48

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

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

Singing Hills
 Memorial
 Park(6)      2798 Dehesa Rd.
              El Cajon, CA    1995      5          35          0          35
</TABLE>

  (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, 1996, there were mortgages of
            approximately $198,000 collateralized by the
            property and facilities at Memorial Estates
            Lakeview, Mountain View and Redwood Cemeteries, of
            which approximately $101,400 was held by Security
            National Life.
  (4)       As of December 31, 1996, there were mortgages of
            approximately $2,108,000 collateralized by the
            property and facilities at Deseret Mortuary,
            Cottonwood Mortuary, Holladay Memorial Park,
            Lakehills Cemetery and Colonial Mortuary.
   (5)      This cemetery includes two granite mausoleums.
   (6)      As of December 31, 1996, there was a mortgage of
            approximately $873,000 collateralized by the
            property.
<PAGE>

The following table summarizes the location, square footage and the number 
of viewing rooms and chapels of the thirteen Company owned mortuaries:
<TABLE>
<CAPTION>


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

Memorial Estates, Inc.:

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

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

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

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

Deseret Memorial, Inc.:

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

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

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

Cottonwood
  Mortuary(2)       4670 South Highland Dr.
                    Salt Lake City, UT   1991          2         1       14,500
 
Camelback Sunset
  Funeral Home(1)   301 West Camelback Rd.
                    Phoenix, AZ          1994          2         1       11,000
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

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

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

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

 Avondale
   Funeral Home   218 North Central
                  Avondale, AZ        1995        1         1          1,850
</TABLE>

   (1)      As of December 31, 1996, there were mortgages of
            approximately $503,000 collateralized by the
            property and facilities of Camelback Sunset Funeral
            Home.
   (2)      As of December 31, 1996, there were mortgages of
            approximately $2,108,000 collateralized by the
            property and facilities at Deseret Mortuary,
            Cottonwood Mortuary, Holladay Memorial Park,
            Lakehills Cemetery and Colonial Mortuary.

Item 3.  Legal Proceedings

The Company has been named as a party in connection with
the pending litigation involving Greer-Wilson Funeral
Homes, Inc.  The Complaint in this matter, which was filed
on June 6, 1995 in the Arizona Superior Court of Maricopa
County, alleges breach of contract and breach of covenant
of good faith and fair dealing and claims damages of at
least $250,000 plus costs and attorneys' fees.

The Company and the other named defendants have filed
answers to the Complaint, made initial discovery
disclosures, promulgated and responded to initial written
discovery, and taken some depositions.  No depositions have
been taken or other discovery undertaken since June 1996. 
The Company believes that the Complaint against it is
without merit and intends to vigorously defend against the
action.

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

The Complaint was initially filed in the Indiana Hamilton
County Superior Court, but was subsequently removed by the
Company to the Federal District Court for the Southern
District of Indiana.  The Company filed a motion to dismiss
for lack of personal jurisdiction and Eckard filed a motion
to amend its Complaint and to add Security National Life
Insurance Company, a subsidiary of the Company, as a party
defendant.  On March 18, 1997, the Company's motion was
granted to dismiss the Complaint against the Company for
lack of personal jurisdiction and Eckard's motion was
granted to amend the Complaint by adding Security National
Life Insurance Company as a party defendant.  The Company's
motion to dismiss the Complaint against the Company was
granted without prejudice, which allows the Complaint to be
refiled in an appropriate jurisdiction.  The Company
believes there is no basis to the treble damage conversion
claim.  The Company intends to vigorously defend against
the action.

<PAGE>

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

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

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

                           PART II

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

The Company's Class A Common Stock trades on the Nasdaq
National Market under the symbol "SNFCA."  Prior to August
13, 1987, there was no active public market for the Class
A and Class C Common Stock.  During the recent years there
have been occasional trading of Class A and Class C Common
Stock by brokerage firms in the over-the-counter market. 
The following are the high and low sales prices for Class
A Common Stock as reported by Nasdaq.

<TABLE>
<CAPTION>

Period (Calendar Year)                                          Price Range
---------------------                                         --------------
                                                              High       Low 
      1995                                                   ------    ------
        <S>                                                  <C>        <C>
        First Quarter . . . . . . . . . . . . . . . . . . . . 4 1/2     3 7/8
        Second Quarter. . . . . . . . . . . . . . . . . . . . 4 1/4     3 1/4
        Third Quarter . . . . . . . . . . . . . . . . . . . . 5 1/2     3 1/2
        Fourth Quarter. . . . . . . . . . . . . . . . . . . . 5 3/8     4 5/8

      1996
        First Quarter . . . . . . . . . . . . . . . . . . . . 5 1/4     4 3/8
        Second Quarter. . . . . . . . . . . . . . . . . . . . 4 3/4     4 3/8
        Third Quarter . . . . . . . . . . . . . . . . . . . . 4 7/8     4 3/8
        Fourth Quarter. . . . . . . . . . . . . . . . . . . . 5 1/4     4 3/8

</TABLE>

The Class C Common Stock is not actively traded, although
there are occasional transactions in such stock by
brokerage firms. (See Note 11 to the Consolidated Financial
Statements.)<PAGE>
The Company has never paid a cash dividend on its Class A
or Class C Common Stock.  The Company currently anticipates
that all of its earnings will be retained for use in the
operation and expansion of its business and does not intend
to pay any cash dividends on its Class A or Class C Common
Stock in the foreseeable future.  Any future determination
as to cash dividends will depend upon the earnings and
financial position of the Company and such other factors as
the Board of Directors may deem appropriate.  A 5% stock
dividend on Class A and Class C Common Stock was paid in 
the years 1989 through 1996.

As of March 1, 1997, there were 5,096 record holders of
Class A Common Stock and 173 record holders of Class C
Common Stock.

<PAGE>

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

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

Consolidated Statement of Earnings Data:
<TABLE>
<CAPTION>

                                      Year Ended December 31,

                   1996       1995(3)      1994(2)       1993(1)      1992
                 -------    ---------    ----------     --------     ------
Revenue
-------
<S>           <C>          <C>          <C>           <C>          <C>
Premiums      $ 5,666,000  $ 5,796,000  $ 4,945,000   $ 4,933,000  $ 4,630,000
Net investment
  income        7,517,000    6,680,000    4,121,000     3,473,000    3,567,000
Net mortuary
 and cemetery
 income         8,138,000    8,238,000    5,888,000     6,085,000    5,741,000
Realized gains
  on investments  290,000      333,000      384,000       780,000      583,000
Provision for
  losses on
  investments       --           --          --           (28,000)    (142,000)
Mortgage fee
  income        8,237,000    4,943,000    1,170,000       788,000        --    
Other              75,000       71,000      153,000       465,000      354,000
               ----------  -----------   ----------     ---------   ----------
Total
 revenue      $29,923,000  $26,061,000  $16,661,000   $16,496,000   $14,733,000
              -----------  -----------  -----------   -----------   -----------
Expenses
Policyholder
 benefits     $ 6,341,000  $ 6,111,000  $ 4,036,000   $ 4,420,000   $ 3,901,000
Amortization
  of deferred
  policy acquisition 
   costs        1,240,000    1,150,000      767,000       943,000       729,000
General and admini-
  strative 
  expenses     17,292,000   13,019,000    8,064,000     7,098,000     6,629,000
Interest 
 expense        1,318,000    1,208,000      692,000       675,000       601,000
Cost of goods &
  services
  mortuary
  & cemetery    2,355,000    2,314,000    1,767,000     1,890,000     1,907,000
              -----------   ----------  -----------   -----------   -----------
Total benefits
  & expenses  $28,546,000  $23,801,000  $15,326,000   $15,026,000   $13,767,000
              -----------  -----------  -----------   -----------   -----------
Income before
  income tax
  expense       1,377,000    2,259,000    1,335,000     1,470,000       966,000
Income tax
  (expense)
  benefit        (139,000)    (728,000)    (302,000)     (388,000)        8,000
Minority
  interest in
  loss of
  subsidiary       --           20,000        7,000        2,000          1,000
             ------------  ----------- ------------  -----------    -----------
Net income   $  1,237,000  $ 1,551,000 $  1,040,000  $ 1,084,000    $   975,000
             ============  =========== ============  ===========    ===========
Earnings per
  common equivalent
  of Class A
  common stock
  (fully diluted)  $0.32        $0.42        $0.31        $0.35           $0.33
                   =====        =====        =====        =====           =====
 Average
  common equivalent
  shares
  outstanding  3,860,116    3,686,000     3,350,000   3,131,000       2,998,000

</TABLE>
<PAGE>

Balance Sheet Data:
<TABLE>
<CAPTION>
                                                      December 31,
                   1996        1995(3)       1994(2)      1993(1)       1992
                 -------       -------       -------      -------       ----
<S>           <C>          <C>            <C>           <C>         <C>
Assets
------
Investments and
  restricted 
  assets      $ 78,638,000  $ 80,815,000   $ 74,835,000 $47,692,000 $42,701,000
Cash             3,301,000     7,710,000      2,061,000   6,831,000   6,120,000
Receivables     17,070,000    24,177,000      4,638,000   4,084,000   3,793,000
Other assets    25,701,000    25,511,000     22,224,000  17,314,000  17,941,000
              ------------  ------------  ------------  ----------- -----------
Total assets  $124,710,000  $138,213,000  $103,758,000  $75,921,000 $70,555,000
              ============  ============  ============  =========== ===========

Liabilities
-----------
Policyholder
  benefits    $ 76,962,000  $ 76,868,000  $ 61,896,000  $38,605,000 $35,665,000
Notes &
  contracts
  payable       12,490,000    27,129,000    10,210,000    8,095,000   7,665,000
Cemetery & 
  mortuary
  liabilities    5,946,000     6,078,000     6,603,000    6,511,000   6,430,000
Other 
  liabilities    5,844,000     6,219,000     5,070,000    3,876,000   3,170,000
              ------------  ------------   -----------  -----------  ----------
Total
   liabilities 101,242,000   116,294,000    83,779,000   57,087,000  52,930,000
              ------------  ------------   -----------  -----------  ----------
Stockholders'
  equity        23,468,000    21,919,000    19,979,000   18,834,000  17,625,000
              ------------  ------------   -----------  ----------- -----------
Total
  liabilities
  and 
  stockholders'
  equity      $124,710,000  $138,213,000  $103,758,000  $75,921,000 $70,555,000
              ============  ============  ============  =========== ===========
</TABLE>

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

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

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

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

The Company's operations over the last three years
generally reflect three trends or events which the Company
expects to continue:  (i) increased attention to "niche"
insurance products, such as the Company's funeral plan
policies, annuities, and limited pay accident policies;  
(ii) emphasis on high margin cemetery and mortuary
business; and (iii) capitalizing on the strong economy in
the intermountain west by originating and refinancing
mortgage loans.

Results of Operations

1996 Compared to 1995

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

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

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

Net mortuary and cemetery sales decreased by $100,000, from
$8,238,000 in 1995 to $8,138,000 in 1996.  This decrease
was the result of a $195,000 reduction in pre-need cemetery
sales.

Mortgage fee income increased by $3,294,000, from
$4,943,000 in 1995 to $8,237,000 in 1996.  This increase
was due to an increase in the aggregate amount of loans
made by Security National Mortgage in 1996 from increased
lending activities.  Also in 1996, Security National
Mortgage began offering home equity loans and non
conforming loan products.

Total benefits and expenses were $28,546,000 for 1996,
which constituted 95% of the Company's total revenues, as
compared to $23,802,000, or 91% of the Company's total
revenues for 1995.

<PAGE>

During 1996, there was a net increase of $228,000 in death
benefits, surrender and other policy benefits, and an
Increase in future policy benefits from $6,112,000 in 1995
to $6,340,000 in 1996.  This increase was primarily due to
tabular interest.  This increase is reasonable based on the
underlying actuarial assumptions.

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

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

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

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

<PAGE>

Year Ended December 31, 1995 Compared to Year Ended December 31, 1994

The following schedule summarizes the effect the acquisition of Capital 
Investors Life Insurance Company and Greer-Wilson Funeral Home had on the
Consolidated Statements of Operations for the year ended December 31, 1995.

<TABLE>
<CAPTION>

                                                 Consolidated
                                                  Without the
                                                   Effects of
                                                    Capital
                          Capital                  Investors
                         Investors                 Life and
                           Life     Greer-Wilson  Greer-Wilson
          Consolidated     1995        1995         1995         Consolidated
             1995       (Unaudited) (Unaudited)  (Unaudited)         1994
          ------------  ----------  ----------   -----------     ------------
<S>       <C>           <C>         <C>          <C>             <C>
REVENUES:
Insurance
  premiums
  and other
  consider-
  ations    $ 5,796,011   $  986,221   $    --     $ 4,809,790    $ 4,944,789
Net investment
  income      6,679,704    1,945,066        718      4,733,920      4,120,917
Realized gains
  on
  investments
  and other
  assets        332,648       --            --         332,648        383,637
Net mortuary
  and cemetery
  income      8,238,347       --      1,518,156      6,720,191      5,887,726
Mortgage fee
  income      4,943,103       --             --      4,943,103      1,170,465
Other            71,519       13,852     10,880         46,787        153,042
            -----------   ----------  ---------     ----------     ----------
  Total
   revenues $26,061,332   $2,945,139 $1,529,754    $21,586,439    $16,660,576

BENEFITS AND EXPENSES:
Death
  benefits    2,193,232      541,051        --       1,652,181      1,663,475
Surrenders and
  other policy
  benefits    1,585,312    1,376,756        --         208,556        903,603
Increase in
  future policy
   benefits   2,333,155     (463,661)       --       2,796,816      1,469,029
Amortization of
  deferred policy
  acquisition costs
  and  cost of
  insurance
  acquired    1,149,510      256,744         --        892,766        766,658
General and
  administrative
   expenses:
   Commissions 3,792,408      59,517       1,548      3,731,343     1,257,043
   Salaries    3,611,993       --        304,083      3,307,910     2,937,993
   Other       5,613,502     354,835     420,043      4,838,624     3,868,508
Interest
  expense      1,208,346       --        124,535      1,083,811       692,675
Cost of
  mortuaries
  and
  cemeteries
  goods and
  services
  sold        2,314,410        --        446,516      1,867,894     1,766,532
            -----------     ---------   --------    -----------    ----------
   Total
   benefits
   and
   expenses  23,801,868    2,125,242   1,296,725     20,379,901    15,325,516
            -----------   ----------  ----------    -----------   -----------
Earnings
  before
  income
   taxes    $ 2,259,464   $  819,897  $  233,029   $ 1,206,538    $ 1,335,060
            ===========   ==========  ==========   ===========    ===========
</TABLE>

The following management's discussion and analysis for the year ended
December 31, 1995 excludes the acquisition of Capital Investors Life
Insurance Company and Greer-Wilson Funeral Home.

<PAGE>

Results of Operations

1995 Compared to 1994

Total revenues increased $4,925,000, or 30% from
$16,661,000 for fiscal 1994, to $21,586,000 for fiscal
1995.  Contributing to this increase in total revenues was
a $613,000 increase in net investment income, an $832,000
increase in mortuary and cemetery sales, and a $3,773,000
increase in mortgage fee income.

Net investment income increased by $613,000 from $4,121,000
in 1994, to $4,734,000 in 1995.  This increase was
primarily attributed to the life insurance company and the
mortuaries and cemeteries participation in warehousing many
of the mortgage loans generated by Security National
Mortgage Company ("Security National Mortgage").

Realized gains on investments and other assets decreased by
$51,000, from $384,000 in 1994 to $333,000 for 1995.  The
1994 amount included the results of the sale of 13.45 acres
of land deemed not suitable for cemetery development at
Lakeview Cemetery.  The net gain on the sale of the land
after deducting the original cost of the land and related
fees was approximately $278,000.  In 1995 an agreement was
entered into in which the Company's remaining interest in
Evergreen Memorial Park was sold to an Ogden based
mortuary.  The net gain on the sale of Evergreen Memorial
Park was approximately $206,000.  The remaining decrease in
realized gains on investments and other assets was a result
of fewer bond redemptions during 1995.

Net mortuary and cemetery income increased by $832,000,
from $5,888,000 in 1994 to $6,720,000 in 1995.  This
increase was the result of a $242,000 increase in mortuary
sales and $590,000 increase in cemetery sales for 1995.

Mortgage fee income was increased by $3,773,000 from
$1,171,000 in 1994 to $4,944,000 in 1995.  This increase
was the result of lower interest rates during 1995 which
increased the opportunity for refinancing and loan
origination.  In addition, a strong economy, and an
increased demand for housing in the intermountain area has
created activity for loan originations.

Total benefits and expenses were $20,380,000 for 1995,
which constituted 94% of the Company's total revenues, as
compared to $15,326,000, or 92% of the Company's total
revenues for 1994.

Death benefits, surrenders and other policy benefits, and
increase in future policy benefits increased by $622,000,
from $4,036,000 in 1994 to $4,658,000 in 1995.  This
increase was due to primarily to three factors:  the number
of policies in force have increased from 1994 to 1995; the
block of business continues to age; and the mix of policies
issued has changed to limited pay policies over whole life
policies.

Amortization of deferred policy acquisition costs and cost
of insurance acquired increased by $126,000, from $767,000
in 1994 to $893,000 in 1995.  This increase was primarily
due to the maturing of the policies in force.

<PAGE>

General and administrative expenses increased by
$3,814,000, from $8,064,000 in 1994 to $11,878,000 in 1995. 
This increase was primarily due to an increase in
commission expenses and general operating expenses. 
Commission expenses increased $2,474,000, from $1,257,000
in 1994 to $3,731,000 in 1995.  This increase is due to an
increase in business activities of Security National
Mortgage and the Company's cemetery operations.  Other
general and administrative expenses also increased
$970,000, from $3,869,000 to $4,839,000.  This increase was
also due to the increased activity of Security National
Mortgage.  Salary expense increased $370,000 for the year
1995 as compared to 1994, primarily due to the additional
administrative personnel required at the corporate level to
meet the needs of the newly acquired companies, which
include Capital Investors Life Insurance Company and Greer-
Wilson Funeral Home, and the additional activities of
Security National Mortgage.

Interest expense increased by $391,000, from $693,000 to
$1,084,000.  This increase was primarily due to the
interest on the debt incurred as a result of the
acquisition of Capital Investors Life which was completed
in December 1994.

Cost of the mortuary and cemetery goods and services sold
in 1995 was consistent with the products sold during 1994.

Liquidity and Capital Resources

The Company's life insurance subsidiary and cemetery and
mortuary subsidiaries realize cash flow from premiums,
contract payments and sales on personal services rendered
for cemetery and mortuary business from interest and
dividends on invested assets, and from the proceeds from
the maturity of held-to-maturity investment, or sale of
other investments.  The mortgage subsidiary realizes cash
flow from fees generated by originating and refinancing
mortgage loans and interest earned on mortgages sold to
investors.  The Company considers these sources of cash
flow to be adequate to fund future policyholder and
cemetery and mortuary liabilities which generally are
long-term and adequate to pay current policyholder claims,
annuity payments, expenses on the issuance of new policies, 
the maintenance of existing policies, debt service, and to
meet operating expenses.

The Company attempts to match the duration of invested
assets with its policyholder and cemetery and mortuary
liabilities.  The Company may sell investments other than
those held to maturity in the portfolio to help in this
timing; however, to date, that has not been necessary.  The
Company purchases short-term investments on a temporary
basis to meet the expectations of short-term requirements
of the Company's products.  The Company's investment
philosophy is intended to provide a rate of return which
will persist during the expected duration of policyholder
and cemetery and mortuary liabilities regardless of future
interest rate movements.

<PAGE>

The Company's investment policy is to invest predominately
in fixed maturity securities and warehouse mortgage loans
on a short-term basis before selling the loans to investors
in accordance with the requirements and laws governing the
life insurance subsidiary.  Bonds owned by the insurance
subsidiary amounted to $47,616,000, at amortized cost as of
December 31, 1996 compared to $51,143,000 at amortized cost
as of December 31, 1995.  This represents 64% of the total
insurance related investments in 1996 as compared to 66% in
1995.  Generally all bonds owned by the life insurance
company are rated by the National Association of Insurance
Commissioners (NAIC).  Under this rating system, there are
six categories used for rating bonds.  At December 31,
1996, 4.18% ($1,994,000) and at December 31, 1995, 3.61%
($1,851,000) of the Company's total invested assets were
invested in bonds in rating categories three through six
which are considered non-investment grade.

The Company intends to hold its fixed income securities,
including high-yield securities, in its portfolio to
maturity.  Business conditions, however, may develop in the
future which may indicate a need for a higher level of
liquidity in the investment portfolio.  In that event the
Company believes it could sell short-term investment grade
securities before liquidating high-yielding longer term
securities.

The Company is subject to risk based capital guidelines
established by statutory regulators requiring minimum
capital levels based on the perceived risk of assets,
liabilities, disintermediation, and business risk.  At
December 31, 1996 and 1995, the life subsidiary exceeded
the regulatory criteria.

Stockholders' equity as a percent of assets is one measure
of capital strength.  At December 31, 1996 the Company's
ratio increased to 18% up from 16% at December 31, 1995. 
This increase is primarily due to the mortgage company
acting as a warehouse lender, by financing the mortgage
loans through bank debt, and then selling them to investors
within 45 days, and repaying the debt.  This transaction
results in a receivable for mortgage loans sold to
investors which are offset by a bank loan payable. 
Computation of this ratio without this transaction results
in the Company's equity to total assets increasing to 20%
in 1996 from 18% in 1995, and debt to total assets
decreasing to 10% in 1996 and 11% in 1995.

Lapse rates measure the amount of insurance terminated
during a particular period.  The Company's lapse rate for
life insurance in 1996 was 12%, as compared to a rate of
10.5% in 1995.

In February 1995, the Company purchased approximately 100
acres of real property (the "Property") located in San
Diego, California, approximately 35 acres of which is being
used for a cemetery.  The purchase price of the property
was $1,062,000, $100,000 of which was paid in cash and the
balance of $1,062,000, together with interest thereon at
the rate of 9% percent per annum, to  be paid in 12 monthly
payments of $5,000, thereafter in equal monthly payments of
$10,000.  However, interest did not accrue on any part of
the principal balance until February 3, 1996.  A principal

<PAGE>

payment of $100,000 was made in December 1995.  The Company
has obtained approval from the federal government and the
California Cemetery Board to operate a cemetery on the
property.  The Company has completed development on five
acres and is currently selling cemetery lots on a pre-need
and at-need basis on the developed acreage.

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

In December 1995, the Company purchased all of the
outstanding shares of common stock of Civil Service
Employees Life Insurance Company ("CSE Life") from Civil
Service Employees Insurance Company for a total cost of
$5,200,000, which included a promissory note in the amount
of $1,063,000.  Interest on the promissory note accrues at
7% per annum.  Principal payments are to be made in seven
equal annual installments of $151,857, beginning on
December 29, 1996.  Accrued interest will be payable
annually beginning on December 29, 1996.

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

At December 31, 1996, $10,021,000 of the Company's
consolidated stockholders' equity represents the statutory
stockholders' equity of the Company's insurance subsidiary. 
The life subsidiary cannot pay a dividend to its parent
company without the approval of insurance regulatory
authorities.

In February 1997 the Company purchased all of the
outstanding shares of common stock of Crystal Rose Funeral
Home, Inc, for a total consideration of $547,000 which
included a note to the former owner in the amount of
$297,000.

<PAGE>

Item 8.  Financial Statements and Supplementary Data

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTAL
SCHEDULES
<TABLE>
<CAPTION>
                                                                   Page No.

Financial Statements:

    <S>                                                              <C>
    Report of Independent Auditors. . . . . . . . . . . . . . . . . . 31

    Consolidated Balance Sheets, December 31,
    1996 and 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . 32

    Consolidated Statements of Earnings,
    Years Ended December 31, 1996, 1995,
    and 1994. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

    Consolidated Statements of Stockholders'
    Equity, Years Ended December 31, 1996, 1995
    and 1994. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

    Consolidated Statements of Cash Flows,
    Years Ended December 31, 1996, 1995 and
    1994. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

    Notes to Consolidated Financial
    Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Financial Statement Schedules:

 I.   Summary of Investments -- Other than
      Investments in Related Parties. . . . . . . . . . . . . . . . . 67

II.   Condensed Financial Information of
      Registrant. . . . . . . . . . . . . . . . . . . . . . . . . . . 68

IV.   Reinsurance . . . . . . . . . . . . . . . . . . . . . . . . . . 74

 V.   Valuation and Qualifying Accounts and
      Reserves. . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

</TABLE>

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


                      REPORT OF INDEPENDENT AUDITORS


Board of Directors
Security National Financial Corporation:

We have audited the accompanying consolidated balance
sheets of Security National Financial Corporation and
subsidiaries as of December 31, 1996, and 1995, and the
related consolidated statements of earnings, stockholders'
equity, and cash flows for each of the three years in the
period ended December 31, 1996.  Our audits also include
the financial statement schedules listed in the Index at
Item 8.  These financial statements and schedules are the
responsibility of the Company's management.  Our
responsibility is to express an opinion on these financial
statements and schedules based on our audits.

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

In our opinion, the consolidated financial statements
referred to above present fairly, in all material respects,
the consolidated financial position of Security National
Financial Corporation and subsidiaries at December 31, 1996
and 1995, and the consolidated results of their operations
and their cash flows for each of the three years in the
period ended December 31, 1996, in conformity with
generally accepted accounting principles.  Also, in our
opinion, the related financial statement schedules, when
considered in relation to the basic financial statements
taken as a whole, present fairly, in all material respects,
the information set forth therein.





ERNST & YOUNG LLP

Salt Lake City, Utah
March 14, 1997

<PAGE>
<TABLE>
<CAPTION>

                                  SECURITY  NATIONAL FINANCIAL CORPORATION
                                            AND SUBSIDIARIES

                                        Consolidated Balance Sheets

                                                         December 31,
                                                        --------------
Assets:                                         1996                    1995
-------                                        ------                  ------
<S>                                          <C>                     <C>
Investments (Note 2):
Fixed maturity securities
  held to maturity, at amortized
  cost (market $47,594,559 and
  $52,528,726 for 1996 and 1995)           $ 47,934,684           $ 51,143,361
Equity securities available for sale,
  at market (cost $3,873,190 and
  $4,071,936 for 1996 and 1995)               4,133,105              4,556,565
Mortgage loans on real estate                 9,809,379             10,434,844 
Real estate, net of accumulated
  depreciation of $1,868,187
  and $1,560,106 for 1996 and 1995            7,808,255              7,669,296
Policy loans                                  3,021,155              3,007,596
Other loans                                     218,437                294,165
Short-term investments                        2,258,283                722,593
                                           ------------           ------------
  Total insurance related investments        75,183,298             77,828,420
Restricted assets of cemeteries
  and mortuaries (Note 7)                     3,454,622              2,986,658 
Cash                                          3,301,084              7,710,155 
Receivables:
  Trade contracts                             4,514,010              5,552,888
 Mortgage loans sold to investors            13,455,123             19,839,657
  Receivable from agents                        670,439                471,937
  Other                                         292,680                623,628 
                                          -------------           ------------
     Total receivables                       18,932,252             26,488,110
  Allowance for doubtful accounts            (1,862,599)            (2,311,450)
                                          -------------           ------------
  Net receivables                            17,069,653             24,176,660 
Land and improvements held for sale           8,456,302              7,568,016 
Accrued investment income                     1,040,242              1,113,945 
Deferred policy acquisition costs             4,277,560              4,509,974 
Property, plant and equipment, net (Note 4)   6,513,980              6,432,615 
Cost of insurance acquired (Note 3)           3,748,654              4,007,804 
Excess of cost over net assets
  of acquired subsidiaries                    1,370,708              1,461,025 
Other                                           293,400                417,411 
                                           ------------           ------------
     Total assets                          $124,709,503           $138,212,683 
                                           ============           ============

</TABLE>

See accompanying notes to consolidated financial statements.

<PAGE>
<TABLE>
<CAPTION>

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

                                                 December 31,
                                                -------------
                                   1996                               1995
                                  ------                             ------
<S>                            <C>                             <C>
Liabilities:
Future life, annuity, and other
 policy benefits               $ 76,962,062                    $ 76,867,685 
Line of credit for financing
 of mortgage loans (Note 5)       1,211,890                      14,468,354 
Bank loans payable (Note 5)       6,768,119                       7,485,391 
Notes and contracts payable
  (Note 6)                        4,509,921                       5,175,317 
Estimated future
 costs of pre-need sales          5,874,387                       6,065,875 
Payable to endowment care 
  fund (Note 7)                      70,617                          12,520 
Accounts payable                  1,199,920                       1,193,859 
Other liabilities
  and accrued expenses            1,902,046                       2,402,842 
Income taxes (Note 8)             2,742,513                       2,622,245 
                               ------------                    ------------
  Total liabilities             101,241,475                     116,294,088 

Commitment and contingencies (Notes 8 and 9)

Stockholders' Equity (Note 11):
Common stock:
  Class A: $2 par value,
   authorized 10,000,000
   shares, issued 4,110,709
   shares in 1996 and
   3,819,415 shares in 1995       8,221,418                       7,638,830 
 Class C: $0.20 par value,
   authorized 7,500,000
   shares, issued 4,967,072
   shares in 1996 and
   2,388,040 shares in 1995         993,413                         955,216 
                                -----------                     -----------
Total common stock                9,214,831                       8,594,046 
Additional paid-in capital        8,675,386                       7,879,578 
Unrealized appreciation
   of investments                   259,915                         368,515 
Retained earnings                 7,118,528                       6,876,086 
Treasury stock at cost
   (631,576 Class A shares
    and 53,540 Class C shares
   in 1996; 598,614 Class A
   shares and 25,495 Class C
   shares in 1995, held
   by affiliated companies)      (1,800,632)                     (1,799,632)
                              -------------                    ------------
Total stockholders' equity       23,468,028                      21,918,593 
                              -------------                    ------------
  Total liabilities and
   stockholders' equity        $124,709,503                    $138,212,681 
                               ============                    ============
</TABLE>

See accompanying notes to consolidated financial statements.

<PAGE>
<TABLE>
<CAPTION>
                            SECURITY  NATIONAL FINANCIAL CORPORATION
                                      AND SUBSIDIARIES
                              Consolidated Statements of Earnings

                                      Year Ended December 31,
                             -----------------------------------------
                              1996               1995             1994
                             -----              ------           ------
Revenue:
-------
  <S>                   <C>                  <C>               <C>
  Insurance premiums
   and other
   considerations        $ 5,666,436         $ 5,796,011       $ 4,944,789 
  Net investment income
    (Note 2)               7,517,014           6,679,704         4,120,917 
  Net mortuary and
    cemetery sales         8,138,010           8,238,347         5,887,726 
  Realized gains on
    investments and
    other assets (Note 2)    289,543             332,648           383,637 
  Mortgage fee income      8,236,709           4,943,103         1,170,465 
  Other                       74,989              71,519           153,042 
                         -----------         -----------       -----------
    Total revenue        $29,922,701         $26,061,332       $16,660,576 

Benefits and expenses:
----------------------
  Death benefits         $ 2,143,843         $ 2,193,232       $ 1,663,475 
  Surrenders and other
    policy benefits        1,452,295           1,585,312           903,603 
  Increase in future
    policy benefits        2,744,326           2,333,155         1,469,029 
  Amortization of
    deferred policy
    acquisition costs
    and cost of
    insurance acquired     1,239,918           1,149,510           766,658 
  General and
    administrative expenses:
    Commissions            6,000,119           3,792,408         1,257,043 
    Salaries               4,744,503           3,611,993         2,937,993 
    Other                  6,547,639           5,613,502         3,868,508 
  Interest expense         1,318,102           1,208,346           692,675 
  Cost of goods and
    services sold
    of the mortuaries
    and cemeteries         2,355,353           2,314,410         1,766,532 
                         -----------         -----------       -----------
    Total benefits and
      expenses           $28,546,098         $23,801,868       $15,325,516 
                         -----------         -----------       -----------
Earnings before
   income taxes          $ 1,376,603         $ 2,259,464       $ 1,335,060 
Income tax expense
   (Note 8)                 (139,458)           (728,000)         (302,218)
Minority interest
   in loss of
   subsidiary                      0              20,316             6,917 
                         -----------         -----------       -----------
    Net earnings         $ 1,237,145         $ 1,551,780       $ 1,039,759 
                         ===========         ===========       ===========

Earnings per share             $0.32               $0.42             $0.31 
                               =====               =====             =====
Weighted average 
  outstanding common 
  shares                   3,860,116           3,686,000          3,350,000 
</TABLE>

See accompanying notes to consolidated financial statements.

<PAGE>
<TABLE>
<CAPTION>

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


                                                               Additional
                               Class           Class             Paid-in
                                 A               C               Capital 
                            ----------       ---------        -------------
<S>                         <C>              <C>               <C>
Balance at
 December 31, 1993          $6,645,636       $ 868,766         $6,726,614

Net earnings
Stock dividends                338,922          43,343            382,276 
Conversion Class C
  to Class A                     2,090          (2,091)                 1 
Stock issued                   130,166         105,170
Change in unrealized
  appreciation
                          -------------      ----------       -----------
Balance at
  December 31, 1994          7,116,814         910,018          7,214,061 

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

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

See accompanying  notes to consolidated financial statements.

<PAGE>
<TABLE>
<CAPTION>

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


                          Unrealized    Retained     Treasury
                         Appreciation   Earnings       Stock         Total
                         -------------  --------     ---------      ------
<S>                       <C>          <C>          <C>          <C>
Balance at
 December 31, 1993        $ 236,298    $5,995,590   $(1,638,832) $18,834,072 

Net earnings                            1,039,759                  1,039,759 
Stock dividends                          (764,541)
Conversion Class C
  to Class A
Stock issued                                                         235,336 
Change in unrealized
  appreciation             (130,622)                                (130,622)
                          ----------  ------------  -------------  ---------
Balance at
  December 31, 1994         105,676     6,270,808    (1,638,832)   19,978,545 

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

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

</TABLE>

See accompanying  notes to consolidated financial statements.

<PAGE>
<TABLE>
<CAPTION>

                SECURITY  NATIONAL FINANCIAL CORPORATION
                           AND SUBSIDIARIES
                 Consolidated Statements of Cash Flows


                                              Year Ended December 31,
                                          ------------------------------
                                            1996        1995       1994
                                           ------      ------      -----
Cash flows from operating activities:
 <S>                                    <C>          <C>         <C>
 Net earnings                           $ 1,237,145  $ 1,551,780 $ 1,039,759 
 Adjustments to reconcile net earnings
   to net cash (used in) provided by
      operating activities:
   Realized gains on investments
      and other assets                     (289,543)   (332,648)    (383,637)
      Depreciation                        1,213,639     719,903      565,777 
      Provision for losses on accounts
        and loans receivable                195,239     548,327       79,752 
      Amortization of goodwill, premiums,
        and discounts                        (5,528)   (152,472)     (28,632)
      Income taxes                          120,268     749,951      302,218 
      Policy acquisition costs deferred    (748,356)   (644,873)    (585,576)
      Policy acquisition costs amortized    980,768     903,183      758,443 
      Cost of insurance acquired amortized  259,150     246,327        8,215 
Change in assets and liabilities net of
      effects from purchases and disposals of
      subsidiaries:
      Land and improvements held for sale  (888,286) (1,401,165)     454,707 
      Future life and other benefits      2,759,439   2,326,507    1,437,243 
      Receivables for mortgage 
        loans sold                        6,384,534 (19,016,093)    (823,564)
      Other operating assets and
        liabilities                         518,712  (1,212,085)     567,730 
                                       ------------ -----------    ---------
          Net cash provided by (used in)
            operating activities         11,737,181 (15,713,358)   3,392,435 

Cash flows from investing activities:
  Securities held to maturity:
     Purchase - fixed maturity
       securities                       (1,496,512)   (313,393)   (9,242,105)
     Calls and maturities - fixed
       maturity securities               5,018,437   2,932,435     1,989,244 
  Securities available for sale:
     Purchases - equity securities          (3,126)   (424,095)     (209,275)
     Sales - equity securities             384,045     388,021       235,484 
     Purchases of short-term 
       investments                      (7,768,574) (2,117,410)   (3,194,870)
     Sales of short-term investments     6,232,884   5,408,113     9,584,611 
     Purchases of restricted assets       (467,964)   (617,781)     (395,968)
     Mortgage, policy, and other
       loans made                       (4,931,984) (4,222,888)   (9,591,567)
     Payments received for mortgage,
       policy, and other loans           5,663,131   8,100,070     6,268,626 
     Purchases of property, plant,
       and equipment                      (986,924)   (263,055)   (1,545,167)
     Purchases of real estate             (484,471)   (409,367)     (147,837)
     Purchases of subsidiaries
       net of cash acquired                  --     (4,544,043)   (5,008,708)
     Other uses                              --        (26,567)       --    
                                       -----------  ----------    ----------
        Net cash provided by (used in)
        investing activities             1,158,942   3,890,040   (11,257,532)

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                         SECURITY  NATIONAL FINANCIAL CORPORATION
                                    AND SUBSIDIARIES
                     Consolidated Statements of Cash Flows (Continued)

                                       Year Ended December 31,
                              ---------------------------------------
                              1996            1995               1994    
                             ------          -----               ----

<S>                      <C>             <C>                 <C>
Cash flows from
  financing activities:
  Annuity receipts        2,858,798       2,597,540           2,011,940 
  Annuity withdrawals    (5,523,860)     (1,727,659)         (1,031,305)
  Repayment of bank 
    loans and notes and
    contracts payable    (1,550,583)     (1,554,154)        (1,768,985)
  Proceeds from borrowings
    on bank loans and
    notes and contracts
    payable                 167,915       3,688,516          3,883,272 
  Purchase of treasury
    stock                    (1,000)         --                 --    
  Net change in line
    of credit for
    financing of
    mortgage loans      (13,256,464)    14,468,354              --    
                      -------------   ------------        ------------
  Net cash (used in) 
    provided by 
    financing 
    activities          (17,305,194)    17,472,597           3,094,922 
                      -------------   ------------        ------------
Net change in cash       (4,409,071)     5,649,279          (4,770,175)

Cash at beginning 
  of year                 7,710,155      2,060,876           6,831,051 
                      -------------   ------------        ------------
Cash at end of year    $  3,301,084   $  7,710,155        $  2,060,876 
                       ============   ============        ============
</TABLE>

See accompanying notes to the financial statements.

<PAGE>
                              SECURITY  NATIONAL FINANCIAL CORPORATION
                                          AND SUBSIDIARIES
                             Notes to Consolidated Financial Statements
                            Years Ended December 31, 1996, 1995, and 1994


1)   Significant Accounting Principles

General Overview of Business

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

Basis of Presentation

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

Risks

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

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

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

<PAGE>
                SECURITY  NATIONAL FINANCIAL CORPORATION
                           AND SUBSIDIARIES
               Notes to Consolidated Financial Statements
               Years Ended December 31, 1996, 1995, and 1994


1)   Significant Accounting Principles (Continued)

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

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

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

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

Principles of Consolidation

The accompanying consolidated financial statements include
the accounts and operations of the Company.  The Company's
wholly-owned subsidiaries at December 31, 1996, are as
follows:

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

<PAGE>
               SECURITY  NATIONAL FINANCIAL CORPORATION
                         AND SUBSIDIARIES
              Notes to Consolidated Financial Statements
            Years Ended December 31, 1996, 1995, and 1994


1)   Significant Accounting Principles (Continued)

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

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

In December 1995, the Company purchased all of the
outstanding shares of common stock of Civil Service
Employees Life Insurance Company ("CSE Life") from Civil
Service Employees Insurance Company for total consideration
of $5,200,000, which included a promissory note in the
amount of $1,063,000.  The acquisition was accounted for
using the purchase method.  Concurrent with the completion
of the purchase of CSE Life, the Company merged CSE Life
into Capital Investors Life.  The assets and liabilities of
CSE Life have been included in the Company's balance sheet
at December 31, 1995.  The results of operations of CSE
Life were not included in the consolidated financial
statements of the Company for the year ended December 31,
1995, as the effective date for accounting purposes was
December 31, 1995.

In March 1995, the Company purchased 97,800 shares of
common stock of Greer-Wilson Funeral Home, Inc., ("Greer-
Wilson") representing 97.8% of the total issued and
outstanding shares of common stock of Greer-Wilson for
total consideration of $1,218,000, which included a note to
the former owners for $588,000.  The acquisition was
accounted for using the purchase method.  The assets and
liabilities of Greer-Wilson have been included in the
Company's balance sheet at December 31, 1995.  The results
of operation of Greer-Wilson for the nine months ended
December 31, 1995, were included in the consolidated
statements of earnings of the Company.  This acquisition
resulted in an addition to excess of cost over net assets
of acquired subsidiaries of approximately $800,000.

Investments

Investments are shown on the following basis:

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

<PAGE>

                 SECURITY  NATIONAL FINANCIAL CORPORATION
                            AND SUBSIDIARIES
                Notes to Consolidated Financial Statements
              Years Ended December 31, 1996, 1995, and 1994


1)   Significant Accounting Principles (Continued)

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

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

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

Policy and other loans - at the aggregate unpaid balances.

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

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

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

Property, Plant and Equipment

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

Recognition of Insurance Premiums and Other Considerations

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

<PAGE>
                   SECURITY  NATIONAL FINANCIAL CORPORATION
                               AND SUBSIDIARIES
                  Notes to Consolidated Financial Statements
                 Years Ended December 31, 1996, 1995, and 1994


1)   Significant Accounting Principles (Continued)

Deferred Policy Acquisition Costs and Cost of Insurance
Acquired

Commissions and other costs, net of commission and expense
allowances for reinsurance ceded, that vary with and are
primarily related to the production of new insurance
business have been deferred.  Deferred policy acquisition
costs for traditional life insurance are amortized over the
premium-paying period of the related policies using
assumptions consistent with those used in computing policy
benefit reserves.  For interest sensitive insurance
products, deferred policy acquisition costs are amortized
generally in proportion to the present value of expected
gross profits from surrender charges, investment, mortality
and expense margins.  This amortization is adjusted when
estimates of current or future gross profits to be realized
from a group of products are reevaluated.  Deferred
acquisition costs are written off when policies lapse or
are surrendered.

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

Future Life, Annuity and Other Policy Benefits

Future policy benefit reserves for traditional life
insurance are computed using a net level method, including
assumptions as to investment yields, mortality, morbidity,
withdrawals, and other assumptions based on the insurance
subsidiaries' experience, modified as necessary to give
effect to anticipated trends and to include provisions for
possible unfavorable deviations.  Such liabilities are, for
some plans, graded to equal statutory values or cash values
at or prior to maturity.  The range of assumed interest
rates for all traditional life insurance policy reserves
was 4.5% to 10% in 1996, 1995, and 1994.  Benefit reserves
for traditional limited-payment life insurance policies
include the deferred portion of the premiums received
during the premium-paying period.  Deferred premiums are
recognized as income over the life of the policies.  Policy
benefit claims are charged to expense in the period the
claims are incurred.

Future policy benefit reserves for interest-sensitive
insurance products are computed under a retrospective
deposit method and represent policy account balances before
applicable surrender charges.  Policy benefits and claims
that are charged to expense include benefit claims incurred
in the period in excess of related policy account balances. 
Interest crediting rates for interest-sensitive insurance
products ranged from 4% to 6.5% in 1996, 4% to 6.5% in
1995, and 4% to 6.25% in 1994.

Participating Insurance

Participating business constitutes 5%, 5%, and 12% of the
ordinary life insurance in force for 1996, 1995 and 1994,
respectively.  The provision for policyholders' dividends
included in policyholder obligations is based on dividend
scales anticipated by management.  Amounts to be paid are
determined by the Board of Directors.

<PAGE>

                  SECURITY  NATIONAL FINANCIAL CORPORATION
                             AND SUBSIDIARIES
                Notes to Consolidated Financial Statements
               Years Ended December 31, 1996, 1995, and 1994


1)   Significant Accounting Principles (Continued)

Reinsurance

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

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

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

Cemetery and Mortuary Operations

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

Certain cemetery products are sold on a pre-need basis. 
Revenues from pre-need cemetery sales are recognized at the
time of sale.  Related costs required to establish the
liability for estimated future costs of pre-need sales are
also recorded at the time of sale.  This liability relates
to promised merchandise and funeral services and is
increased or decreased each period as current costs change. 
A corresponding charge is made to operations.  Certain
mortuary products and services are also sold on a pre-need
basis.  Pre-need mortuary sales are fully reserved at the
time of the sale.  Revenue on pre-need mortuary services is
recognized at the time the service is performed.  Through
1990, these contracts were non-interest bearing and the
related receivables were discounted using current market
rates.  Resulting discount amounts are amortized into
operations as other income over the terms of the contracts. 
Beginning in 1991, all pre-need sales contracts bear
interest at 8%.

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

<PAGE>
                      SECURITY  NATIONAL FINANCIAL CORPORATION
                                  AND SUBSIDIARIES
                     Notes to Consolidated Financial Statements
                   Years Ended December 31, 1996, 1995, and 1994


1)   Significant Accounting Principles (Continued)

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

The Company, through its mortuary and cemetery operations,
provides a guaranteed funeral arrangement wherein a
prospective customer can receive future goods and services
at guaranteed prices.  To accomplish this, the Company,
through its life insurance operations, sells to the
customer an increasing benefit life insurance policy that
is assigned to the mortuaries.  If, at the time of need,
the policyholder/potential mortuary customer utilizes one
of the Company's facilities, the guaranteed funeral
arrangement contract that has been assigned will provide
the funeral goods and services at the contracted price. 
The increasing life insurance policy will cover the
difference between the original contract prices and current
prices.  Risks may arise if the difference cannot be fully
met by the life insurance policy.  However, management
believes that given current inflation rates and related
price increases of goods and services, the risk of exposure
is minimal.

Mortgage Operations

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

Excess of Cost Over Net Assets of Acquired Businesses

Previous acquisitions have been accounted for as purchases
under which assets acquired and liabilities assumed were
recorded at their fair values.  The excess of cost over net
assets of acquired subsidiaries is being amortized over a
range of fifteen to thirty years using the straight-line
method.  The Company periodically evaluates the
recoverability of amounts recorded.  Accumulated
amortization was $705,833 and $590,495 at December 31, 1996
and 1995, respectively.

Income Taxes

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

Earnings Per Common Share

Earnings per common share are based on the weighted average
number of shares outstanding during the year after the
effect of the assumed conversion of Class C Common Stock to
Class A Common Stock, the acquisition of treasury stock,
and the retroactive effect of stock dividends declared for
each year presented.  Outstanding stock options and related
stock dividends that attach to outstanding options are not
included in the computation when the effect is
antidilutive.

<PAGE>
                             SECURITY  NATIONAL FINANCIAL CORPORATION
                                          AND SUBSIDIARIES
                             Notes to Consolidated Financial Statements
                            Years Ended December 31, 1996, 1995, and 1994


1)   Significant Accounting Principles (Continued)

Stock Compensation

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

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

The Company also has one variable option plan (the "1987
Plan").  In accordance with APB 25, compensation cost
related to this plan is estimated and recognized over the
period of the award based on changes in the current market
price of the Company's stock over the vesting period.

Reclassifications

Certain amounts in prior years have been reclassified to
conform with the 1996 presentation.

New Accounting Standards

During 1996 and 1997, the Financial Accounting Standards
Board issued Statement No. 125, "Accounting for Transfers
and Servicing Financial Assets and Extinguishment of
Liabilities", which is effective after December 31, 1996,
and Statement No. 128, "Cash Flow", which is effective for
fiscal years ending after December 15, 1997.  The Company
has not yet adopted these new standards; however, the
effect on operations and stockholders' equity is not
expected to be significant.

Subsequent Event

In February 1997 the Company purchased all of the
outstanding shares of common stock of Crystal Rose Funeral
Home, Inc, for a total consideration of $547,000 which
included a note to the former owner in the amount of
$297,000.

<PAGE>
                         SECURITY  NATIONAL FINANCIAL CORPORATION
                                    AND SUBSIDIARIES
                        Notes to Consolidated Financial Statements
                      Years Ended December 31, 1996, 1995, and 1994

2)  Investments

   The Company's investments in fixed maturity securities held to maturity
and equity securities available for sale are summarized as follows:

<TABLE>
<CAPTION>

                                        Gross        Gross        Estimated
                          Amortized   Unrealized   Unrealized       Fair
December 31, 1996:          Cost        Gains        Losses        Value   
-----------------         ---------   -----------  -----------   ----------
<S>                    <C>         <C>           <C>            <C>
Fixed maturity securities
held to maturity:
   U.S. Treasury securities and
   obligations of U.S.
   Government agencies $12,412,746   $  198,677   $   (70,283)    $12,541,140

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

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

   Redeemable preferred
     stock                 133,788      24,570        (36,238)        122,120
   Mortgage-backed
     securities          7,784,555      11,923       (303,840)      7,492,638
                       -----------  ----------    -----------     -----------
       Total           $47,934,684  $  502,504    $  (842,629)    $47,594,559
                       ===========  ==========    ===========     ===========

Equity securities
   available for sale  $ 3,873,190  $  930,698    $  (670,783)    $ 4,133,105
                       ===========  ==========    ===========     ===========
December 31, 1995:
Fixed maturity securities
held to maturity:
   U.S. Treasury 
    securities and
   obligations of U.S.
    Government
     agencies          $13,713,860    $539,876    $   (48,647)    $14,205,089 

   Obligations of
    states and
   political 
   subdivisions            204,586      11,106        (21,242)        194,450 

   Corporate
    securities
    including public
    utilities           29,244,915   1,217,107       (244,811)     30,217,211 

   Redeemable
     preferred stock       133,788      25,468        (36,589)        122,667 
   Mortgage-backed
     securities          7,846,212      11,835        (68,738)      7,789,309 
                       -----------  ----------    -----------     -----------
       Total           $51,143,361  $1,805,392    $  (420,027)    $52,528,726 
                       ===========  ==========    ===========     ===========
Equity securities
   available for sale  $ 4,188,050  $  619,894    $  (251,379)    $ 4,556,565
                       ===========  ==========    ===========     ===========
</TABLE>

<PAGE>

                              SECURITY  NATIONAL FINANCIAL CORPORATION
                                          AND SUBSIDIARIES
                             Notes to Consolidated Financial Statements
                            Years Ended December 31, 1996, 1995, and 1994


2)  Investments (Continued)

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

The amortized cost and estimated fair value of fixed
maturity securities held to maturity at December 31, 1996,
by contractual maturity, are shown below.  Expected
maturities may differ from contractual maturities because
certain borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>

                                                            Estimated
                                      Amortized               Fair
                                        Cost                 Value  
                                   -----------           -------------
    <S>                           <C>                     <C>
    Due in 1997                    $ 2,970,638             $2,635,190 
    Due in 1998 through 2001        12,222,078             12,487,480 
    Due in 2002 through 2006        21,877,997             21,953,521 
    Due after 2006                   2,945,628              2,903,610 
    Mortgage backed securities       7,784,555              7,492,638 
    Redeemable preferred stock         133,788                122,120 
                                  ------------            -----------
                                   $47,934,684            $47,594,559 
                                   ===========            ===========
</TABLE>

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

                                     1996           1995             1994
                                   -------         ------           ------
    <S>                          <C>             <C>             <C>
    Fixed maturity
         securities held
         to maturity:
    Gross realized gains         $ 347,728       $ 33,028         $101,862 
    Gross realized losses         (141,848)        (7,112)          (7,523)

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

    Other assets                    (6,160)       206,095          289,298 
                                 ---------       --------         --------
             Total               $ 289,543       $332,648         $383,637 
                                 =========       ========         ========
</TABLE>

The change in unrealized appreciation of investments, as
shown in the accompanying consolidated statements of
stockholders' equity, relates entirely to equity securities
for 1996, 1995, and 1994.

Concentrations of credit risk arise when a number of
mortgage loan debtors have similar economic characteristics
that would cause their ability to meet contractual
obligations to be similarly affected by changes in economic
conditions.  Although the Company has a diversified
mortgage loan portfolio consisting of residential and
commercial loans and requires collateral on all real estate
exposures, a substantial portion of its debtors' ability to
honor obligations is reliant on the economic stability of
the geographic region in which the debtors do business. 
The Company has 91% of its mortgage loans in the state of
Utah.

<PAGE>
<TABLE>
<CAPTION>

                            SECURITY  NATIONAL FINANCIAL CORPORATION
                                          AND SUBSIDIARIES
                             Notes to Consolidated Financial Statements
                            Years Ended December 31, 1996, 1995, and 1994

2)  Investments (Continued)

Major categories of net investment income are as follows:

                                      1996           1995            1994
                                     -----          ------          ------
     <S>                         <C>            <C>               <C>
     Fixed maturity
          securities              $3,684,089     $3,070,180       $1,290,174 
     Equity securities               251,733        266,613          137,283 
     Mortgage loans
          on real estate           1,225,207      1,888,855         1,210,670 
     Real estate                   1,281,511      1,115,212         1,286,328 
     Policy loans                    168,857        138,303           102,995 
     Short-term investments          575,498        366,426            97,685 
     Other                         1,179,889        522,526           752,215 
                                  ----------     ----------       -----------
          Gross investment
          income                   8,366,784      7,368,115         4,877,350 
     Investment expenses            (849,770)      (688,411)         (756,433)
                                  ----------     ----------       -----------
     Net investment
          income                  $7,517,014     $6,679,704        $4,120,917 
                                  ==========     ==========        ==========
</TABLE>

Net investment income includes net investment income earned
by the restricted assets of the cemeteries and mortuaries
of approximately $655,000, $574,000 and $515,000 for 1996,
1995, and 1994, respectively.

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

Securities on deposit for regulatory authorities as
required by law amounted to $7,295,953 at December 31, 1996
and $7,142,237 at December 31, 1995.

3)  Cost of Insurance Acquired

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

                              1996                 1995               1994
                            --------              -------            ------
<S>                        <C>                  <C>                <C>
Balance at
  beginning of year        $4,007,804           $3,580,964         $  100,796 
Cost of insurance
  acquired                     --                  673,167          3,488,383 
Interest accrued at 7%        280,546              250,667              7,056 
Amortization                 (539,696)            (496,994)           (15,271)
                           ----------           ----------         ----------
Net amortization
  charged to income          (259,150)            (246,327)            (8,215)
                           ----------           ----------         ----------
Balance at end of year     $3,748,654           $4,007,804         $3,580,964 
                           ==========           ==========         ==========

</TABLE>

Net amortization charged to income is expected to
approximate $321,000, $299,000, $281,000, $261,000, and
$246,000 for the years 1997 through 2001.

<PAGE>
                              SECURITY  NATIONAL FINANCIAL CORPORATION
                                          AND SUBSIDIARIES
                             Notes to Consolidated Financial Statements
                            Years Ended December 31, 1996, 1995, and 1994


4) Property, Plant and Equipment

The cost of property, plant and equipment is summarized
below:
<TABLE>
<CAPTION>

                                                  December 31,
                                                ---------------
                                       1996                         1995
                                     -------                       -----
<S>                                <C>                          <C>
Land and Buildings                 $ 6,275,098                  $ 6,273,245 
Furniture and
 equipment                           4,457,473                    3,472,402 
                                   -----------                  -----------
                                    10,732,571                    9,745,647 
Less accumulated
     depreciation                   (4,218,591)                  (3,313,032)
                                   -----------                  -----------
                                   $ 6,513,980                  $ 6,432,615 
                                   ===========                  ===========
</TABLE>

5)   Bank Loans Payable and Line of
     Credit for Financing Mortgage Loans

Bank loans payable are summarized 
as follows:
<TABLE>
<CAPTION>
                                                    December 31,
                                                   --------------
                                           1996                    1995
                                          ------                  ------
<S>                                 <C>                        <C>
Prime rate plus 1/2% (8.25% at
December 31, 1996) note
payable in monthly
installments of $36,420
including principal and
interest, collateralized by
15,000 shares of Security
National Life stock, due
December 1999.                          $2,456,336              $2,688,434

10% note payable in monthly
installments of $8,444 
including principal and
interest, collateralized by
real property, which book
value is approximately
$1,189,000, due January 2013               810,725                 829,924

One year treasury constant
maturity plus 2.75% (8.03%
at December 31, 1996) note
payable in monthly
installments of $6,000,
including principal and
interest, collateralized by
real property, which book
value is approximately
$469,000, due October
1999.                                      336,385                 379,462

Prime plus 1/2% (8.25% at
December 31, 1996) note
payable in monthly
installments of $19,000,
including principal and
interest, collateralized
by real property, which
book value is approximately
$1,206,000, due August 1997              1,839,009               1,897,040

</TABLE>

<PAGE>

                              SECURITY  NATIONAL FINANCIAL CORPORATION
                                          AND SUBSIDIARIES
                             Notes to Consolidated Financial Statements
                            Years Ended December 31, 1996, 1995, and 1994

5)  Bank Loans Payable and Line of Credit
    for Financing Mortgage Loans (Continued)
<TABLE>
<CAPTION>
                                                   December 31,
                                                  -------------
                                          1996                      1995
                                         ------                     -----
<S>                            <C>                             <C>
Time deposit plus 2% (5.1%
  at December 31, 1996) note
  payable in monthly
  installments of $3,500,
  including principal and
  interest, collateralized
  by 75% of the unpaid face
  amount of the accounts
  receivable, which are less
  than 60 days from payment
  date, due March 2006                  238,477                    267,085

Prime rate plus 1/2% (8.25% at
  December 31, 1996) note
  payable in monthly
  installments of $7,235
  including principal and
  interest collateralized
  by real property, which
  book value is approximately
  $1,017,000, due August
  1999.                                 502,856                    542,669

Prime plus 1% (8.25% at
  December 31, 1996) note
  payable in monthly
  installments of $35,000,
  including principal and
  interest, collateralized
  by real property, which
  book value is approximately
  $2,289,000, due February
  2003                                  274,954                    650,752

Other collateralized
   bank loans payable                   309,377                    230,025
                                   ------------               ------------
  Total bank loans                    6,768,119                  7,485,391

Less current installments             2,745,518                    516,469
                                   ------------               ------------
  Bank loans, excluding
     current installments           $ 4,022,601                $ 6,968,922
                                    ===========                ===========
$20 million revolving
  line of credit at the
  London Interbank
  offered rates plus 1.45%
  (6.69% at December 31,
  1996) note payable within
  30 days collateralized by
  receivable from mortgage
  loans sold to investors.          $ 1,211,890                $14,468,354

</TABLE>
<PAGE>

                             SECURITY  NATIONAL FINANCIAL CORPORATION
                                          AND SUBSIDIARIES
                             Notes to Consolidated Financial Statements
                            Years Ended December 31, 1996, 1995, and 1994


5)   Bank Loans Payable and Line of Credit
     for Financing Mortgage Loans (Continued)

In addition to the line of credit described above, the
Company has a line of credit agreement with a bank for
$2,000,000 of which none was outstanding at December 31,
1996, or 1995.  The line of credit is for general operating
purposes and must be repaid every 30 days.

See Note 6 for summary of maturities for subsequent years.

6)  Notes and Contracts Payable

Notes and contracts payable are summarized as follows:
<TABLE>
<CAPTION>
                                                    December 31,
                                              ----------------------
                                          1996                        1995  
                                        -------                      ------
<S>                               <C>                         <C>
10% note payable in monthly
  installments of $37,551,
  including principal and
  interest, collateralized
  by a building, which book
  value is approximately
  $2,893,000, due December,
  1997                              $   845,177                 $1,192,194

Due to former stockholders
  of Deseret Memorial, Inc.
  resulting from the
  acquisition of such entity.
  Amount represents the
  present value discounted
  at 8% of monthly annuity
  payments ranging from
  $4,600 to $5,000 plus
  an index adjustment in
  the 7th through the 12th
  years, over a minimum
  period of 20 years.                   687,450                    692,243

Due to former stockholders
  of Greer Wilson resulting from
  the acquisition of such entity.
  Amount represents the present
  value discounted at 10% of
  monthly annuity payments of
  $7,000, due March 2005.               474,544                    509,848

Due to former stockholders of
  Civil Service Employees Life
  Insurance Company resulting from
  the acquisition of such entity.
  7% note payable in seven annual
  principal payments of $151,857,
  due December 2003.                    911,143                  1,063,000

<PAGE>

</TABLE>
<TABLE>
<CAPTION>
                             SECURITY  NATIONAL FINANCIAL CORPORATION
                                          AND SUBSIDIARIES
                             Notes to Consolidated Financial Statements
                            Years Ended December 31, 1996, 1995, and 1994


6) Notes and Contracts Payable (Continued)
                                                    December 31,
                                                  ---------------
                                         1996                           1995
                                        ------                         ------
<S>                                <C>                             <C>
9% note payable in monthly
  installments of $10,000
  including principal and interest
  collateralized by real
  property, which book value is
  approximately $2,927,000, due
  July 2008                            872,933                    912,000

Other notes payable                    718,674                    806,032
  Total notes and contracts          4,509,921                  5,175,317
Less current installments            1,227,983                    686,326
                                    ----------                 ----------
  Notes and contracts,
     excluding current
     installments                   $3,281,938                 $4,488,991
                                    ==========                 ==========

</TABLE>

The following tabulation shows the combined maturities of
bank loans payable, line of credit for financing of
mortgage loans, and notes and contracts payable:

<TABLE>
<CAPTION>

        <C>                                       <C>
        1997                                      $ 5,185,391
        1998                                          732,173
        1999                                        3,043,578
        2000                                          408,103
        2001                                          415,400
     Thereafter                                     2,705,285
                                                  -----------
        Total                                     $12,489,930
                                                  ===========
</TABLE>

Interest paid approximated interest expense in 1996, 1995
and 1994.

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

The Company owns and operates several endowment care
cemeteries, for which it has established and maintains an
endowment care fund.  Per statutory requirement, the
Company records a liability to the fund of $14 for each
space sold after 1979, $42 for spaces sold after July 1,
1983 and $50 for spaces sold after May 1, 1993.  For each
space sold in the mausoleum, $30 is recognized as a
liability.  The Company is not required to transfer assets
to the fund until the spaces are paid for.  The Company is
not liable for any maintenance costs exceeding the
stipulated statutory rate.

The liability to the endowment care fund is summarized as follows:
<TABLE>
<CAPTION>
                                                  December 31,
                                                ----------------
                                          1996                 1995
                                         ------               ------
<S>                                   <C>                    <C>
Liability for spaces sold             $1,317,998             $1,265,217   
Less assets in the fund               (1,247,381)            (1,252,697)  
   Total due to fund (fully
       and not fully paid
       contracts)                     $   70,617             $   12,520

</TABLE>

<PAGE>
                              SECURITY  NATIONAL FINANCIAL CORPORATION
                                          AND SUBSIDIARIES
                             Notes to Consolidated Financial Statements
                            Years Ended December 31, 1996, 1995, and 1994


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

Assets in the endowment care fund are summarized as
follows:
<TABLE>
<CAPTION>
                                                     December 31,
                                                   ---------------
                                            1996                      1995
                                          -------                    -------
<S>                                      <C>                       <C>
Cash and cash equivalents                $ 134,850                 $   92,037
Mutual funds                                22,053                     20,299
Fixed maturity securities                    --                         1,000
Equity securities                           94,613                     94,613
Participation in mortgage
   loans with Security
   National Life                           860,865                  1,044,748
Other                                      135,000                      --   
                                        ----------                 ----------
   Total                                $1,247,381                 $1,252,697
                                        ==========                 ==========

</TABLE>

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

Assets in the restricted asset account are summarized as
follows:
<TABLE>
<CAPTION>
                                                      December 31,
                                             1996                     1995
                                            ------                   ------
<S>                                      <C>                       <C>
Cash and cash equivalents                $1,244,808                $   99,472
Mutual funds                                125,516                   125,346
Fixed maturity securities                   819,680                   816,856
Equity securities                            77,778                    77,778
Participation in mortgage
   loans with Security
   National Life                          1,153,143                 1,699,391
Time certificate of deposit                  33,697                   167,815
                                         ----------                ----------
   Total                                 $3,454,622                $2,986,658
                                         ==========                ==========
</TABLE>

8)  Income Taxes

The Company's income tax liability at December 31 is summarized as follows:
<TABLE>
<CAPTION>

                                              1996                   1995
                                            -------                 ------
                                                     (In Thousands)
<S>                                         <C>                     <C>
Current                                     $   26                  $  213
Deferred                                     2,716                   2,409
                                           -------                  ------
Total                                       $2,742                  $2,622
                                            ======                  ======
</TABLE>

<PAGE>
                             SECURITY  NATIONAL FINANCIAL CORPORATION
                                          AND SUBSIDIARIES
                             Notes to Consolidated Financial Statements
                            Years Ended December 31, 1996, 1995, and 1994


8)  Income Taxes (Continued)

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

                                         1996                      1995
                                       -------                   -------
                                                 (In Thousands)
<S>                                    <C>                       <C>
Assets
Future policy benefits                 $(113)                    $(286)
Uncollected agents'
   balances                              (45)                      (46)
Difference between book
   and tax basis of bonds                (57)                      (95)
AMT credits                              (45)                      --  
Net operating
   loss carryforwards
   expiring in the years
   2001 through 2010                    (174)                     (138)
Capital loss
   carryforward                          (11)                      (21)
                                       -----                     -----
Total deferred
   tax assets                          $(445)                    $(586)
                                       -----                     -----
Liabilities
Deferred policy 
   acquisition costs                   $ 274                     $ 300 
Cost of insurance
   acquired                              510                       536 
Installment sales                        640                       478 
Depreciation                             878                       898 
Trusts                                   505                       360 
Other                                    354                       423 
                                      ------                     -----
Total deferred
   tax liabilities                     3,161                     2,995 
                                      ------                    ------
Net deferred tax
   liability                          $2,716                    $2,409 
                                      ======                    ======
</TABLE>

The Company paid approximately $18,000 of income taxes in
1996 and paid no income taxes in 1995 and 1994.  The
Company's income tax expense is summarized as follows:
<TABLE>
<CAPTION>

                                  1996              1995              1994
                                 -----             ------            ------
                                             (In Thousands)
<S>                              <C>                <C>              <C>
Current                          $(168)             $191             $ -- 
Deferred                           307               537               302 
                                 -----              ----              ----
Total                            $ 139              $728              $302
                                 =====              ====              ====
</TABLE>

<PAGE>

                              SECURITY  NATIONAL FINANCIAL CORPORATION
                                          AND SUBSIDIARIES
                             Notes to Consolidated Financial Statements
                            Years Ended December 31, 1996, 1995, and 1994


8)  Income Taxes

The reconciliation of income tax attributable to continuing
operations computed at the U.S. federal statutory rates is
as follows:
<TABLE>
<CAPTION>

                              1996           1995             1994
                             ------         ------           ------
                                       (In Thousands)
<S>                          <C>            <C>              <C>
Computed expense at
   statutory rate            $ 461          $ 768            $ 454 
Special deductions
   allowed small life
   insurance companies        (261)          (164)            (108)
Dividends received
   deduction                   (33)           (40)             (50)
Prior year provision
   to tax return true-up       --             158               (4)
Other, net                     (28)             6               10 
                             -----          -----            -----
   Tax expense
       (benefit)             $ 139          $ 728            $ 302 
                             =====          =====            =====
</TABLE>


A portion of the life insurance income earned prior to 1984
was not subject to current taxation but was accumulated for
tax purposes, in a "policyholders' surplus account."  Under
provisions of the Internal Revenue Code, the policyholders'
surplus account was frozen at its December 31, 1983 balance
and will be taxed generally only when distributed.  As of
December 31, 1996, the policyholders' surplus accounts
approximated $4,300,000.  Management does not intend to
take actions nor does management expect any events to occur
that would cause federal income taxes to become payable on
that amount.  However, if such taxes were accrued, the
amount of taxes payable would be approximately $1,449,000.

The insurance company has remaining loss carry forwards for
tax purposes of approximately $1,300,000, approximately
$886,000 of which is subject to an annual limitation of
approximately $300,000.

9) Reinsurance, Commitments and Contingencies

The Company follows the procedure of reinsuring risks in
excess of a specified limit, which was $50,000 at December 
31, 1996.  The Company is contingently liable for these
amounts in the event such reinsurers are unable to pay
their portion of the claims.  At December 31, 1996 and
1995, the contingent liabilities for such future policy
benefits aggregated $259,676 and $264,547, respectively,
all of which relate to life insurance.  These amounts
pertain to insurance in force aggregating $73,821,939 in
1996 and $80,261,274 in 1995.

The Company has also assumed insurance from other companies
having insurance in force amounting to $52,508,120 at
December 31, 1996 and $58,916,837 at December 31, 1995.

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

The Company has been named as a party in connection with
the pending litigation involving Greer-Wilson Funeral
Homes, Inc.  The Complaint in this matter, which was filed

<PAGE>
                             SECURITY  NATIONAL FINANCIAL CORPORATION
                                          AND SUBSIDIARIES
                             Notes to Consolidated Financial Statements
                            Years Ended December 31, 1996, 1995, and 1994


9) Reinsurance, Commitments and Contingencies (Continued)

on June 6, 1995 in the Arizona Superior Court of Maricopa
County, alleges breach of contract and breach of covenant
of good faith and fair dealing and claims damages of at
least $250,000 plus costs and attorneys' fees.

The Company and the other named defendants have filed
answers to the Complaint, made initial discovery
disclosures, promulgated and responded to initial written
discovery, and taken some depositions.  No depositions have
been taken or other discovery undertaken since June 1996. 
The Company believes that the Complaint against it is
without merit and intends to vigorously defend against the
action.

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

The Complaint was initially filed in the Indiana Hamilton
County Superior Court, but was subsequently removed by the
Company to the Federal District Court for the Southern
District of Indiana.  The Company filed a motion to dismiss
for lack of personal jurisdiction and Eckard filed a motion
to amend its Complaint and to add Security National Life
Insurance Company, a subsidiary of the Company, as a party
defendant.  On March 18, 1997, the Company's motion was
granted to dismiss the Complaint against the Company for
lack of personal jurisdiction and Eckard's motion was
granted to amend the Complaint by adding Security National
Life Insurance Company as a party defendant.  The Company's
motion to dismiss the Complaint against the Company was
granted without prejudice, which allows the Complaint to be
refiled in an appropriate jurisdiction.  The Company
believes there is no basis to the treble damage conversion
claim.  The Company intends to vigorously defend against
the action.

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

10)  Retirement Plans

The Company and its subsidiaries have a noncontributory
ESOP for all eligible employees.  Eligible employees are
primarily those with more than one year of service and who
work in excess of 1,040 hours per year.  Contributions,
which may be in cash or stock of the Company, are

<PAGE>
                            SECURITY  NATIONAL FINANCIAL CORPORATION
                                          AND SUBSIDIARIES
                             Notes to Consolidated Financial Statements
                            Years Ended December 31, 1996, 1995, and 1994


10)  Retirement Plans (Continued)

determined annually by the Board of Directors.  The
Company's contributions are allocated to eligible employees
based on the ratio of each eligible employee's compensation
to total compensation for all eligible employees during
each year.  ESOP contribution expense totaled $50,017,
$21,914, and $54,288 for 1996, 1995, and 1994,
respectively.  At December 31, 1996 the ESOP held 553,480 
shares of Class A and 500,551 shares of Class C common
stock of the Company.  All shares held by the ESOP have
been allocated to the participating employees and all
shares held by the ESOP are considered outstanding for
purposes of computing earnings per share.

The Company organized a 401(k) savings plan in 1995, which
allows employees to contribute pre tax compensation up to
the lesser of 15% of total annual compensation or the
statutory limit (currently $9,240).  The Company matches
50% of each employee's contribution in Company stock, up to
5% of the employee's total annual compensation.  The
Company's matching contributions for 1996 and 1995 was
approximately $50,000 and $21,000, respectively.

11)  Capital Stock

The following table summarizes capital stock activity for
the three year period ended December 31, 1996:
<TABLE>
<CAPTION>

                                            Class A             Class C   
                                           ---------          ----------
      <S>                                 <C>                 <C>
      Balance at December
         31, 1993                         3,322,818           2,171,915 

      Stock Dividends                       169,461             108,358 
      Conversion of Class C
         to Class A                           1,044              (5,228)
      Stock Issued                           65,083                --   
                                         ----------          ----------
      Balance at December
         31, 1994                         3,558,406           2,275,045 

      Stock Dividends                       181,901             113,740 
      Conversion of Class C
         to Class A                             150                (745)
      Stock Issued                           78,958                --   
                                         ----------          ----------
      Balance at December
         31, 1995                         3,819,415           2,388,040 

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

</TABLE>
<PAGE>

                              SECURITY  NATIONAL FINANCIAL CORPORATION
                                          AND SUBSIDIARIES
                             Notes to Consolidated Financial Statements
                            Years Ended December 31, 1996, 1995, and 1994


11)  Capital Stock (Continued)

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

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

Stockholders of both classes of common stock have received
5% stock dividends in the years 1989 through 1996, as
authorized by the Company's Board of Directors.

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

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

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

<PAGE>
                              SECURITY  NATIONAL FINANCIAL CORPORATION
                                          AND SUBSIDIARIES
                             Notes to Consolidated Financial Statements
                            Years Ended December 31, 1996, 1995, and 1994


11)  Capital Stock (Continued)

number of shares of Class A Common Stock then covered by
each outstanding option granted hereunder shall be reduced
proportionately with no reduction in the total price of the
shares then so covered, and the number of shares of Class
A Common Stock reserved for the purposes of the Plan shall
be reduced by the same proportion.

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

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

                               Number                 Option
                             of Shares                Price
                           ------------              ---------
<S>                         <C>                  <C>
Outstanding at
December 31, 1993            168,469             $2.55 - $2.86

   Dividend                    8,424 
                           ---------
Outstanding at
December 31, 1994            176,893             $2.43 - $2.72

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

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

Available options
   for future grant
   1987 Stock
   Incentive Plan            188,000 

</TABLE>

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

<PAGE>

                             SECURITY  NATIONAL FINANCIAL CORPORATION
                                          AND SUBSIDIARIES
                             Notes to Consolidated Financial Statements
                            Years Ended December 31, 1996, 1995, and 1994

11)  Capital Stock (Continued)

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

The options granted on April 29, 1993, were to reward
certain officers and key employees who have been employed
by the Company for a number of years and to help the
Company retain these officers by providing them with an
additional incentive to contribute to the success of the
Company.

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

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

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

<PAGE>
                              SECURITY  NATIONAL FINANCIAL CORPORATION
                                          AND SUBSIDIARIES
                             Notes to Consolidated Financial Statements
                            Years Ended December 31, 1996, 1995, and 1994

11)  Capital Stock (Continued)

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

                                             Number             Option
                                            of Shares           Price
                                           -----------         --------
<S>                                        <C>              <C>
Outstanding at
December 31, 1993                            90,000         $3.13 - $3.44
   Dividend                                   4,500 
   Granted                                  103,700 
                                           --------
Outstanding at
December 31, 1994                           198,200        $2.98 - $4.40
   Dividend                                   9,910 
                                          ---------
Outstanding at
December 31, 1995                           208,110        $2.84 - $4.19
   Dividend                                  13,706 
   Granted                                   66,000 
                                          ---------
Outstanding at
December 31, 1996                           287,816        $2.70 - $4.52
                                          =========
   Exercisable
   at end of year                           218,516        $2.70 - $4.52
Available options
   for future grant
   1993 Stock
   Incentive Plan                          340,300 

</TABLE>

12)  Statutory Financial Information

The Company's insurance subsidiary is domiciled in Utah and
prepares its statutory basis financial statements in
accordance with accounting practices prescribed or
permitted by the Utah Insurance Department.  "Prescribed"
statutory accounting practices include state laws,
regulations, and general administrative rules, as well as
a variety of publications of the National Association of
Insurance Commissioners ("NAIC").  "Permitted" statutory
accounting practices encompass all accounting practices
that are not prescribed; such practices may differ from
state to state, may differ from company to company within
a state, and may change in the future.  The NAIC currently
is in the process of codifying statutory accounting
practices, the result of which is expected to constitute
the only source of "prescribed" statutory accounting
practices.  Accordingly, that project, which is expected to
be completed in 1997, will likely change, to some extent,
prescribed statutory accounting practices, and may result
in changes to the accounting practices that insurance
enterprises use to prepare their statutory financial
statements.  Statutory net income and statutory
stockholder's equity for the life subsidiary as reported to
state regulatory authorities, is presented below:

<TABLE>
<CAPTION>

                                  1996           1995               1994
                                -------         ------             ------
<S>                           <C>             <C>                <C>
Statutory net income
   for the years
   ended December 31          $  694,745      $1,414,246         $ 701,985

Statutory Stockholder's
   Equity at
    December 31              $10,020,668      $9,472,696         $8,569,956
</TABLE>

<PAGE>

                              SECURITY  NATIONAL FINANCIAL CORPORATION
                                          AND SUBSIDIARIES
                             Notes to Consolidated Financial Statements
                            Years Ended December 31, 1996, 1995, and 1994


12)  Statutory Financial Information (Continued)

The Utah Insurance Department is in the process of
completing an examination of the life insurance subsidiary
as of December 31, 1995 and for the three year period then
ended.  The results of the examination are not final,
however management believes it will not have a material
impact upon the statutory stockholder's equity of the life
insurance subsidiary.

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

The Utah Insurance Department imposes minimum risk-based
capital requirements that were developed by the NAIC on
insurance enterprises.  The formulas for determining the
risk-based capital ("RBC") specify various factors that are
applied to financial balances or various levels of activity
based on the perceived degree of risk.  Regulatory
compliance is determined by a ratio (the "Ratio") of the
enterprise's regulatory total adjusted capital, as defined
by the NAIC, to its authorized control level, as defined by
the NAIC.  Enterprises below specific trigger points or
ratios are classified within certain levels, each of which
requires specified corrective action.  The life insurance
subsidiary has a Ratio that is greater than 300% of the
first level of regulatory action.



                  SECURITY  NATIONAL FINANCIAL CORPORATION
                            AND SUBSIDIARIES
                Notes to Consolidated Financial Statements
               Years Ended December 31, 1996, 1995, and 1994

13)  Business Segment Information

The Company is principally involved in three segments: Life insurance and
annuities, cemetery/mortuary operations and mortgage operations.  The
following schedules summarize segment information for the three
segments and corporate activities for 1996, 1995, and 1994:

<TABLE>
<CAPTION>

                                                 1996

                   Life                    Cemetery/
                Insurance     Corporate    Mortuary    Mortgage   Consolidated
               -----------   -----------  ----------   --------   ------------
<S>              <C>          <C>         <C>         <C>         <C>
Revenues:
Premium and
  other
  considerations  $ 5,666,436  $           $           $          $ 5,666,436 
Net mortuary
 and cemetery 
 sales                                       8,138,010              8,138,010 
Mortgage fee income                                      8,236,709  8,236,709 
Net investment
 income             6,166,585    30,717        655,255     664,457  7,517,014 
Realized gains
  on investments
  and other
   assets             289,543                                         289,543 
Other revenues         24,363        56         50,570                 74,989 
                   ----------   -------    -----------  ----------- -----------
                  $12,146,927 $  30,773    $ 8,843,835  $ 8,901,166 $29,922,701

Expenses:
Death and other
  policy benefits $ 3,596,138 $            $            $           $ 3,596,138
Increase in future
  policy benefits   2,744,326                                         2,744,326
Amortization of
  deferred policy
  acquisition costs
  and cost of
  insurance 
  acquired         1,239,918                                          1,239,918
General, adminis-
  trative and
  other costs      3,392,730    953,921     8,449,406   8,169,659    20,965,716
                 ----------- ----------   ----------- -----------  ------------
                 $10,973,112 $  953,921   $ 8,449,406 $ 8,169,659  $ 28,546,098
                 ----------- ----------   ----------- -----------  ------------
Earnings before
  income taxes   $ 1,173,815 $ (923,148)  $   394,429 $   731,507  $  1,376,603
                 =========== ==========   =========== ===========  ============
Identifiable
 assets          $98,428,230 $  264,395   $23,916,366 $ 2,100,512  $124,709,503
                 =========== ==========   =========== ===========  ============
</TABLE>

<PAGE>

                           SECURITY NATIONAL FINANCIAL CORPORATION
                                     AND SUBSIDIARIES
                        Notes to Consolidated Financial Statements


13)  Business Segment Information (Continued)

<TABLE>
<CAPTION>

                                                  1995


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

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

                            SECURITY NATIONAL FINANCIAL CORPORATION
                                       AND SUBSIDIARIES
                          Notes to Consolidated Financial Statements


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

                                            1994


                     Life                  Cemetery/
                  Insurance    Corporate   Mortuary     Mortgage  Consolidated
                 ----------   ----------  ----------   ---------- ------------
<S>               <C>           <C>        <C>        <C>         <C>
Revenues:
Premium and
   other 
   considerations  $ 4,944,789   $         $          $             $ 4,944,789
Net mortuary
   and cemetery
   sales                                     5,887,726                5,887,726
Mortgage fee
   income                                               1,170,465     1,170,465
Net investment
   income            3,582,518     23,379      515,020                4,120,917
Realized gains
   on
   investments
   and other
   assets              104,357                 279,280                  383,637
Other revenues          28,768        171      124,103                  153,042
                   -----------  ---------  ----------- ----------  ------------
                   $ 8,660,432  $  23,550  $ 6,806,129 $1,170,465  $ 16,660,576

Expenses:
Death and other
  policy benefits  $ 2,567,078                                     $  2,567,078
Increase in future
  policy benefits    1,469,029                                        1,469,029
Amortization of
  deferred policy
  acquisition costs    766,658                                          766,658
General,
  administrative
  and other costs    3,126,598   228,604     6,073,846  1,093,703    10,522,751
                   ----------- ---------   ----------- ----------  ------------
                   $ 7,929,363 $ 228,604   $ 6,073,846 $1,093,703  $ 15,325,516
                   ----------- ---------   ----------- ----------  ------------
Earnings before
   income taxes    $   731,069 $(205,054)  $   732,283 $   76,762  $  1,335,060
                   =========== =========   =========== ==========  ============
Identifiable
   assets          $81,962,820 $ 764,201   $20,573,980 $  457,256  $103,758,257
                   =========== =========   =========== ==========  ============
</TABLE>

<PAGE>

                            SECURITY  NATIONAL FINANCIAL CORPORATION
                                          AND SUBSIDIARIES
                             Notes to Consolidated Financial Statements
                            Years Ended December 31, 1996, 1995, and 1994



14)  Disclosure about Fair Value of Financial Instruments

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

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

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

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

<TABLE>
<CAPTION>

                                      Carrying            Fair
                                       Amount            Value
                                     ----------         -------
                                            (In Thousands)  
<S>                                 <C>                  <C>
Individual and group
    annuities                        $32,650              $31,591 
Supplementary contracts
   without life contingencies            285                  285 
    with life contingencies            1,652                1,652 
                                     -------              -------
Total                                $34,587              $33,528 

</TABLE>

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

<PAGE>

                                                                  Schedule I

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



As of December 31, 1996:
<TABLE>
<CAPTION>

                                                         Amount at
                                                           Which
                                                           Shown
                                           Estimated       in the
Type of Investment             Amortized     Fair         Balance
                                 Cost        Value         Sheet  
                             -----------   ----------   -----------
<S>                         <C>          <C>            <C>
Fixed maturity securities
   held to maturity:
Bonds:
 United States
   Government and
   government agencies
   and authorities           $12,412,746  $12,541,140    $12,412,746
 States,
   municipalities and
    political
    subdivisions                 215,021      193,900        215,021
 Mortgage backed
    securities                 7,784,555    7,492,638      7,784,555
 Corporate securities
    including public
    utilities                 27,388,574   27,244,761     27,388,574
Redeemable preferred
    stocks                       133,788      122,120        133,788
                            ------------  -----------    -----------
 Total                        47,934,684   47,594,559     47,934,684

Equity securities,
 available for sale:
 Common Stocks:
   Public utilities             278,980       406,070        406,070
   Banks, trusts and
     insurance
     companies                   91,725       271,702        271,702
   Industrial,
     miscellaneous
     and all other            3,276,851     3,151,141      3,151,141
   Nonredeemable
     preferred stocks           225,634       304,192        304,192
                             ----------   -----------     ----------
     Total                    3,873,190     4,133,105      4,133,105

Mortgage loans on
   real estate                9,809,379                    9,809,379
Real estate                   7,808,255                    7,808,255
Policy loans                  3,021,155                    3,021,155
Other investments             2,476,720                    2,476,720
                            -----------                  -----------
   Total investments        $74,923,383                  $75,183,298
                            ===========                  ===========
</TABLE>

<PAGE>
                                              Schedule II

                               SECURITY NATIONAL FINANCIAL CORPORATION
                                        (Parent Company Only)

                                           Balance Sheets

<TABLE>
<CAPTION>

                                       December 31,
                                      --------------
                              1996                     1995
                            -------                   ------
<S>                     <C>                    <C>
Assets
Short-term 
  investments           $   278,901             $   274,850

Cash                        (10,841)                 29,280

Investment in
   affiliates,
   at equity             27,379,166              26,172,850

Receivables:
Receivable 
  from affiliates         1,671,368               1,738,557
Other                       (19,234)                 16,585
                        -----------             -----------
   Total receivables      1,652,134               1,755,142

Property, plant and
  equipment, at cost,
  net of accumulated
  depreciation of $298,560
  for 1996 and $273,608
  for 1995                   15,365                  40,318

Other assets                    202                     128
                        -----------             -----------
  Total assets          $29,314,927             $28,272,568
                        ===========             ===========
</TABLE>

See accompanying notes to parent company only financial statements.

<PAGE>
                                                        Schedule II Continued)

                     SECURITY NATIONAL FINANCIAL CORPORATION
                               (Parent Company Only)

                            Balance Sheets (Continued)

<TABLE>
<CAPTION>

                                              December 31,
                                            ---------------
                                     1996                   1995
                                   -------                 ------
<S>                            <C>                     <C>
Liabilities:
Bank loans payable (note 1):
    Current installments       $   233,019             $  185,683 
    Long-term                    2,223,317              2,502,751 

Notes and contracts payable
    (note 2):
    Current installments           153,132                179,448 
    Long-term                      787,473                939,330 

Advances from affiliated
    companies (note 3)           1,781,118              1,781,118 

Accounts payable                     9,934                     90 

Other liabilities and 
    accrued expenses               533,314                540,448 

Income taxes                       125,592                225,107 
                               -----------            -----------
    Total liabilities            5,846,899              6,353,975 
                               -----------            -----------

Stockholders' equity:
Common Stock:
  Class A:  $2 par value,
    authorized 10,000,000
    shares, issued
    4,110,709 shares in
    1996 and 3,819,415
    shares in 1995              8,221,418              7,638,830 
  Class C:  $0.20 par
    value, authorized
    7,500,000 shares,
    issued 4,967,072
    shares in 1996
    and 2,388,040
    shares in 1995                993,413                955,216 
                             ------------           ------------
Total common stock              9,214,831              8,594,046 

Additional paid-in
  capital                       8,675,386              7,879,578 
Unrealized
  appreciation
  of investments                  259,915                368,515 
Retained earnings               7,118,528              6,876,086 
Treasury stock at cost 
  (631,576 Class A
  shares and 53,540
  Class C shares in
  1996; 598,614
  Class A shares and
  25,495 Class C shares
  in 1995, held
  by affiliated
  companies)                   (1,800,632)            (1,799,632)
                            -------------          -------------
Total stockholders'
  equity                       23,468,028             21,918,593 
                            -------------          -------------
  Total liabilities
       and stockholders'
       equity                $ 29,314,927           $ 28,272,568 
                             ============           ============
</TABLE>

See accompanying notes to parent company only financial statements.


<PAGE>
                                                    Schedule II (Continued)

                               SECURITY NATIONAL FINANCIAL CORPORATION
                                        (Parent Company Only)

                                       Statements of Earnings

<TABLE>
<CAPTION>

                                          Year Ended December 31,
                                         -------------------------
                            1996                   1995              1994
                          -------                --------           ------
<S>                   <C>                   <C>                  <C>
Revenue:
 Net investment
   income              $   30,717            $   14,518           $   23,379 
 Realized gain from
   sale of
   subsidiary               --                  206,095                 --   
 Fees from
   affiliates             754,294               765,410              568,971 
                       ----------            ----------           ----------
   Total revenue       $  785,011            $  986,023           $  592,350 

Expenses:
  General and
    administrative
    expenses           $  644,640            $  278,581           $  209,500 
  Interest expense        313,032               271,701               40,607 
                       ----------            ----------           ----------
    Total expenses     $  957,672            $  550,282           $  250,107 
                       ----------            ----------           ----------
(Loss) earnings
  before income
  taxes, and
  earnings of
  subsidiaries         $ (172,661)           $  435,741           $  342,243 

Income tax expense        (26,112)              (98,142)             (93,222)

Equity in earnings
  of subsidiaries       1,435,918             1,214,181              790,738 
                       ----------            ----------           ----------
Net earnings           $1,237,145            $1,551,780           $1,039,759 
                       ==========            ==========           ==========

</TABLE>

See accompanying notes to parent company only financial statements.

<PAGE>
<TABLE>
<CAPTION>
                                                   Schedule II (Continued)

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

                                            December 31,
                                           --------------
                                 1996          1995           1994
                                ------         -----         ------
<S>                          <C>            <C>             <C>
Cash flows from
    operating activities:
    Net earnings              $1,237,145    $1,551,780      $1,039,759 
Adjustments to
    reconcile net earnings
    to net cash provided
    by (used in)
    operating activities:
      Depreciation and
        amortization             24,953         11,014           4,378 
      Provision for loss on
        accounts receivable       --           161,528            --   
    Change in assets and
       liabilities:
       Undistributed earnings
         of affiliates       (1,435,918)    (1,214,181)       (790,731)
       Accounts receivable      103,006       (327,115)        (43,546)
       Other assets                 (74)           (74)         76,770 
       Accounts payable and
         accrued expenses       431,735         (6,593)        (54,968)
       Other liabilities         (7,134)       138,282          86,420 
       Income taxes             (99,514)        98,142          93,222 
                            -----------    -----------      ----------
Net cash provided by
    operating activities        254,199        412,783         411,304 
Cash flows from investing
    activities:
    Proceeds from sale of
       equity securities       (212,051)         --               --    
    Proceeds from sale of
       short term investments   208,000        385,555          61,485 
    Investment in
       subsidiaries             121,002     (2,533,021)     (3,196,446)
    Purchase of property
       plant & equipment          --              (517)        (52,842)
                           ------------     ----------     -----------
Net cash provided by
    (used in) investing
    activities                  116,951     (2,147,983)     (3,187,803)

Cash flows from financing
    activities:
    Proceeds from advances
       from affiliates           --            833,182        493,345 
    Payments of notes and
       contracts payable       (410,271)      (170,743)      (528,023)
    Purchase of treasury
       stock                     (1,000)         --             --   
    Proceeds from borrowings
       on notes and
       contracts payable           --        1,063,000     2,859,177 
                            -----------    -----------   -----------
Net cash (used in)
    provided by financing
    activities                 (411,271)     1,725,439     2,824,499 
                            -----------    -----------   -----------
Net change in cash              (40,121)        (9,761)       48,000 
Cash at beginning of year        29,280         39,041        (8,959)
                            -----------    -----------   -----------
Cash at end of year         $   (10,841)   $    29,280    $   39,041 
                            ===========    ===========    ==========

</TABLE>

See accompanying notes to parent company only financial statements.

<PAGE>
<TABLE>
<CAPTION>

                                                    Schedule II (Continued)

                        SECURITY NATIONAL FINANCIAL CORPORATION
                  Notes to Parent Company Only Financial Statements


1) Bank Loans Payable

    Bank loans payable are summarized as follows:

                                                     December 31,
                                                   ---------------
                                           1996                        1995
                                         -------                      ------
<S>                                    <C>                          <C>
Prime rate plus 1/2% (8.25% at
    December 31, 1995) note
    payable in monthly
    installments of $36,420             $2,456,336                  $2,688,434 

    Less current installments              233,019                     185,683 
                                        ----------                  ----------
    Bank loans, excluding
    current installments                $2,223,317                  $2,502,751 
                                        ==========                  ==========
</TABLE>
<TABLE>
<CAPTION>

2)  Notes and Contracts Payable

    Notes and contracts are summarized as follows:

                                                    December 31,
                                                  --------------
                                               1996             1995
                                             -------           ------
    <S>                                     <C>                <C>
    7 year notes due April 16, 1996,
       1/2% over U.S. Treasury 6 month
       bill rate                               850              27,166 

    10 year notes due April 16, 1999,
       1% over U.S. Treasury 6 month
       bill rate                            28,187              28,187 

    Due to former stockholders of
       Civil Service Employees Life
       Insurance Company resulting from
       the acquisition of such entity.
       7% note payable in seven annual
       principal payments of $151,857
       due December 2003                   911,143          1,063,000 

    Other                               $      425         $      425 
                                        ----------         ----------

    Total notes and contracts           $  940,605         $1,118,778 
    Less current installments              153,132            179,448 
                                        ----------         ----------
    Notes and contracts,
       excluding current
       installments                     $  787,473         $  939,330 
                                        ==========         ==========
</TABLE>

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

          <C>                                        <C>
          1997                                       $  386,151
          1998                                          398,821
          1999                                        2,156,398
          2000                                          151,857
          2001                                          151,857
          Thereafter                                    151,857
                                                     ----------
          Total                                      $3,396,941
                                                     ==========

</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                                                     Schedule II (Continued)

                    SECURITY NATIONAL FINANCIAL CORPORATION
              Notes to Parent Company Only Financial Statements


3)  Advances from Affiliated Companies
                                                     December 31,
                                                    -------------
                                             1996                    1995
                                            ------                   -----
          <S>                           <C>                    <C>
          Non-interest bearing advances
               from affiliates:
          Cemetery and Mortuary
             subsidiary                  $1,126,527            $1,126,527
          Mortgage subsidiary               200,000               200,000
          Life Insurance Subsidiary         454,591               454,591
                                         ----------            ----------
                                         $1,781,118            $1,781,118
                                         ==========            ==========
</TABLE>


4)  Dividends

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

<PAGE>
<TABLE>
<CAPTION>
                                                 Schedule IV

                        SECURITY NATIONAL FINANCIAL CORPORATION
                                   AND SUBSIDIARIES

                                     Reinsurance

                                                                 Percentage
                               Ceded to       Assumed             of Amount
                    Direct       Other       from Other     Net    Assumed
                    Amount     Companies     Companies     Amount   to Net
                   -------   ------------  -------------  -------  ---------
<S>               <C>         <C>           <C>          <C>         <C>
1996
-----
Life Insurance
 in force ($000)   $  493,705  $   73,822    $ 52,508    $  472,391  11.12%

Premiums:
Life Insurance     $5,135,007  $  315,967    $310,378    $5,129,418   6.05%
Accident and
 Health Insurance     473,807      41,895       6,920       438,832   1.58%
                   ----------  ----------    --------    ----------  -----
 Total premiums    $5,608,814  $  357,862    $317,298    $5,568,250   5.70%
                   ==========  ==========    ========    ==========   ====

1995
-----
Life Insurance
 in force ($000)  $  471,771  $   80,262     $ 58,917   $  450,426   13.08%
                  ==========  ==========     ========   ==========   =====
Premiums:
Life Insurance    $5,004,568  $  122,399     $317,312   $5,199,481    6.10%
Accident and
 Health Insurance    566,097      34,585       11,558      543,070    2.13%
                  ----------  ----------     --------   ----------   -----
 Total premiums   $5,570,665  $  156,984     $328,870   $5,742,551    5.73%
                  ==========  ==========     ========   ==========   =====

1994
----
Life Insurance
 in force ($000)  $  366,522  $   35,073     $ 69,998   $  401,447   17.44%
                  ==========  ==========     ========   ==========   =====
Premiums:
Life Insurance    $4,852,223  $  108,076     $    --    $4,744,147    N/A
Accident and
 Health Insurance     15,403         957          --        14,446    N/A
                  ----------  ----------     --------   ----------    -----
 Total premiums   $4,867,626  $  109,033     $    --    $4,758,593    N/A
                  ==========  ==========     =========  ==========   ======
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                                                               Schedule V

                            SECURITY NATIONAL FINANCIAL CORPORATION
                                        AND SUBSIDIARIES
                              Valuation and Qualifying Accounts


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

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

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

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


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

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

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


For the Year Ended December 31, 1994
------------------------------------
Accumulated 
   depreciation
   on real estate   $1,000,113       $262,740      $              $1,262,853

Accumulated
   depreciation on
   property, plant
   and equipment     2,622,935       374,503         (71,532)      2,925,906

Allowance for
   doubtful accounts 1,949,553        79,752        (105,497)      1,923,808

</TABLE>

<PAGE>

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

None
                                              PART III

Item 10. Directors and Executive Officers

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

<TABLE>
<CAPTION>

                                                          Position(s)
       Name           Age           Director Since      with the Company
-------------       -------       ----------------     -----------------
<S>                 <C>           <C>                  <S>
George R.
  Quist(2)            76           October 1979         Chairman of the
                                                        Board, President
                                                        and Chief
                                                        Executive Officer
William C.
  Sargent(2)          68           February 1980        Senior Vice
                                                        President,
                                                        Secretary and
                                                        Director

Scott M.
  Quist(1)            43           May 1986             First Vice
                                                        President,
                                                        General Counsel,
                                                        Treasurer and
                                                        Director
Charles L.
  Crittenden(1)       77           October 1979         Director

Sherman B.
  Lowe(1)             82           October 1979         Director

R.A.F.
  McCormick(2)        83           October 1979         Director

H. Craig
  Moody(2)            43           September 1995       Director

W. Lowell
  Steen(2)            82           October 1979         Director

Nathan H.
  Wagstaff(2)         76           October 1979         Director

</TABLE>

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

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

<PAGE>

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

George R. Quist, age 76, has been Chairman of the Board,
President and Chief Executive Officer of the Company since
October 1979.  From 1946 to 1960, he was an agent, District
Manager and Associate General Agent for various insurance
companies.  From 1960 to 1964, he was Treasurer and
Executive Vice President of Pacific Guardian Life Insurance
Company.  Mr. Quist also served from 1981 to 1982 as the
President of The National Association of Life Companies, a
trade association of 642 life insurance companies, and from
1982 to 1983 as its Chairman of the Board.

William C. Sargent, age 68, has been Senior Vice President
of the Company since 1980, Secretary since October 1993,
and a director since February 1980.  Prior to that time, he
was employed by Security National as a salesman and agency
superintendent.

Scott M. Quist, age 43, has been General Counsel of the
Company since 1982, First Vice President since December
1990, Treasurer since October 1993, and a director since
May 1986.  From 1980 to 1982, Mr. Quist was a tax
specialist with Peat, Marwick, Main, & Co., in Dallas,
Texas.  Since 1986 he has been a director of  The National
Association of Life Companies, a trade association of 642
insurance companies and its Treasurer until its merger with
the American Council of Life Companies.  Mr. Quist is
currently a member of the Board of Governors of the Forum
500 Section (representing small insurance companies) of the
American Council of Life Insurance.  Mr. Quist has also
been a director of Key Bank of Utah since November 1993.

Charles L. Crittenden, age 77, has been a director of the
Company since October 1979.  Mr. Crittenden has been sole
stockholder of Crittenden Paint & Glass Company since 1958. 
He is also an owner of Crittenden Enterprises, a real
estate development company and Chairman of the Board of
Linco, Inc.

Sherman B. Lowe, age 82, has been a director of the Company
since October 1979.  Mr. Lowe was formerly President and
Manager of Lowe's Pharmacy for the past 30 years.  He is
now retired.  He is an owner of Burton-Lowe Ranches, a
general partnership.

R.A.F. McCormick, age 83, has been a director of the
Company since October 1979.  He is a past Vice President of
Sales for Cloverclub Foods.  He is now retired.

H. Craig Moody, age 43, has been a director of the Company
since September 1995.  Mr. Moody is owner of Moody &
Associates, a political consulting and real estate company. 
He is a former Speaker and House Majority Leader of the
House of Representatives of the State of Utah.

W. Lowell Steen, age 82, has been a director of the Company
since October 1979.  He has been a real estate investment
broker for the last 13 years.  Prior to that time, he was
a large-scale rancher, food processor, and in related
concerns.  Currently, he is President and sole stockholder
of Lowell Steen, Inc., a real estate company.

Nathan H. Wagstaff, age 76, has been a director of the
Company since October, 1979.  He has served as President
and Chairman of the Board of Directors of Nate Wagstaff
Company, Inc., since 1975.  He has also served as President
and General Manager of Western States Distribution Company,
Highland Petroleum Company, Inc., and Holiday Oil Company. 
Mr. Wagstaff is the sole stockholder of Nate Wagstaff
Company, Inc., an oil distribution company.

Executive Officers

The following table sets forth certain information with
respect to the executive officers of the Company (the
business biographies for the first three individuals are
set forth above):

<TABLE>
<CAPTION>

   Name            Age                 Title
----------       ------              --------
<S>               <C>      <S>
George R.
  Quist(1)         76       Chairman of the Board, President
                            and Chief Executive Officer
William C.
  Sargent          68       Senior Vice President and Secretary

Scott M.
  Quist(1)         43       First Vice President, General
                            Counsel and Treasurer Secretary
</TABLE>

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

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

No director, officer or 5% stockholder of the Company or its subsidiaries,
or any affiliate thereof has had any transactions with the Company or its
subsidiaries during 1996 or 1995 other than employment arrangements or as
described above.

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

Item 11.  Executive Compensation

The following table discloses compensation received by the Company's Chief
Executive Officer and the two other most highly compensated executive
officers who were serving as executive officers at December 31, 1996.
<TABLE>
<CAPTION>

                                     Summary Compensation Table

                                        Annual Compensation
                                                              Other
                                                              Annual
Name and                                                      Compen-
Principal Position            Year     Salary      Bonus      sation(2)
                             ------   -------      ------     ---------
<S>                           <C>      <C>         <C>         <C>
George R. Quist(1)
 Chairman of the Board,       1996     $109,127    $15,303     $2,400
 President and Chief          1995      104,469     15,303      2,400
 Executive Officer            1994      102,245     15,303      2,400

William C. Sargent
 Senior Vice President,       1996      103,915     15,000      4,500
 Director and                 1995       77,538     11,725      4,500
 Secretary                    1994       82,777     10,725      4,500

Scott M. Quist(1)
 First Vice President,        1996       96,192     16,250      7,200
 General Counsel,             1995       84,871     13,000      7,200
 Director and Treasurer       1994       82,502     12,000      7,200

</TABLE>
<TABLE>
<CAPTION>

                                                      Long-Term 
                                                     Compensation

                                          Awards        Payouts
                                                                   All
                                        Stock                      Other
Name and                               Options      Incentive     Compen-
 Principal Position         Year       (Shares)      Payouts      sation(3)
-------------------       ---------   ---------     -----------   ----------
<S>                        <C>          <C>            <C>         <C>
George R. Quist(1)          1996        6,956           0           3,085
 Chairman of the Board,     1995        2,625           0           5,937
 President and Chief        1994        2,500           0           8,263
 Executive Officer

William C. Sargent          1996        3,449           0           4,213
 Senior Vice President,     1995        2,100           0           2,100
 Director and               1994        2,000           0           4,020
 Secretary

Scott M. Quist(1)           1996            0           0           4,019
 First Vice President,      1995        3,149           0           2,206
 General Counsel            1994        3,000           0           3,924
 Director and Treasurer
_____________________________
</TABLE>

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

 (2)    The amounts indicated under "Other Annual Compensation" for 1995
        consist of payments related to the operation of automobiles by the
        named executive officers.  However such payments do not include
        the furnishing of an automobile by the Company to George R. Quist,
        William C. Sargent and Scott M. Quist nor the payment of insurance
        and property taxes with respect to the automobiles operated by the
        named executive officers.

 (3)    The amounts indicated under "All Other Compensation" for 1995 consist
        of (a) amounts contributed by the Company into a trust for the benefit
        of the named executive officers under the Employee Stock Ownership
        Plan (George R. Quist, $3,085; William C. Sargent, $3,567; and Scott
        M. Quist, $3,373); (b) insurance premiums paid by the Company with
        respect to a group life insurance plan for the benefit of the named
        executive officers ($1,292 for all named executive officers as a
        group, or $646 for William C. Sargent and Scott M. Quist, and $646
        for each individual officer); and (c) life insurance premiums paid
        by the Company for the benefit of the family of Mr. George R. Quist
        ($4,645).

                                          Retirement Plans

George R. Quist, who has been Chairman, President and Chief Executive Officer
of the Company since 1979, has a Deferred Compensation Agreement, dated
December 8, 1988, with the Company (the "Compensation Agreement").  This
Compensation Agreement provides (i) upon Mr. Quist's retirement at the age of 70
or an earlier age as may be specified by the Board of Directors, the Company
shall pay him $50,000 per year as an annual retirement benefit for a period
of 10 years from the date of retirement; and (ii) upon his death, the
remainder of such annual payments shall be payable to his wife, if she
survives him.

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

                                           Director's Fees

Directors of the Company (but not including directors who are employees) are
paid a director's fee of $7,200 per year by the Company and are reimbursed for
any travel expenses incurred in attending Board meetings.  No additional
amounts are paid by the Company for committee participation or special 
assignments. 

                                    Employee Stock Ownership Plan

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

Under the Ownership Plan, the Company has discretionary power to make
contributions on behalf of all eligible employees into a trust created under
the Ownership Plan.  Employees become eligible to participate in the Ownership
Plan when they have attained the age of 19 and have completed one year of
service (a twelve-month period in which the Employee completes at least 1,040
hours of service).  The Company's contributions under the Ownership Plan
are allocated to eligible employees on the same ratio that each eligible
employee's compensation bears to total compensation for all eligible
employees during each year.  To date, the Ownership Plan has approximately
98 participants and had contributions payable to the Plan in 1996 of
$50,017.

Benefits under the Ownership Plan vest as follows: 20% after the third year of
eligible service by an employee, an additional 20% in the fourth, fifth,
sixth and seventh years of eligible service by an employee.  Benefits under
the Ownership Plan will be paid out in one lump sum or in installments in the
event the employee becomes disabled, reaches the age of 65, or is terminated
by the Company and demonstrates financial hardship.  The Ownership Plan
Committee, however, retains discretion to determine the final method of
payment.  Finally, the Company reserves the right to amend or terminate the
Ownership Plan at any time.  The trustees of the trust fund under the
Ownership Plan are Messrs. R.A.F. McCormick, George R. Quist, and William C.
Sargent, all directors of the Company. 

                                         401(K) Savings Plan

The Company organized a 401(K) savings plan in 1995, which allows employees
to contribute pre tax compensation up to the lesser of 15% of total annual
compensation or the statutory limit (currently $9,240).  The Company matches
50% of each employee's contribution in Company stock up to 5% of the
employee's total annual compensation.  Company matching contributions for
1996 and 1995 was approximately $50,000 and $21,000, respectively.  The
trustees under the 401(K) Savings Plan are Messrs. Sherman B. Lowe, Scott M.
Quist, and William C. Sargent.

                                  1987 Incentive Stock Option Plan

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

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

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

<PAGE>
<TABLE>
<CAPTION>

                                 YEAR-END VALUES OF STOCK OPTIONS

                 Number of Securities                 Value of Unexercised
            Underlying Unexercised Options             In-The-Money Options
                 at Fiscal Year-End                   at Fiscal Year-End(1)
            -------------------------------           ---------------------
 Name      Exercisable        Unexercisable       Exercisable     Unexercisable
-----     ------------        --------------      -----------     -------------
<S>          <C>                                    <C>
All executive officers
and key employee option
recipients as a group
(1 person)   22,309                                 $65,729
</TABLE>

 (1)   The value of options equals the market value of Security National
       Financial Corporation common stock at December 31, 1996 ($5.25 per
       share), minus  the exercise price of options, and includes only those 
       options for which the exercise price was less than market value at
       year-end.

                                       1993 Stock Option Plan

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

The 1993 Plan provides for the grant of options and the award or sale of stock
to officers, directors, and employees of the Company.  Both "incentive stock
options," as defined under Section 422A of the Internal Revenue Code of 1986
(the "Code"), and "non-qualified options" may be granted pursuant to the 1993
Plan.  Options intended as incentive stock options may be issued only to
employees, and must meet certain conditions imposed by the code, including a
requirement that the option exercise price be no less than the fair market
value of the option shares on the date of grant.  The 1993 Plan provides
that the exercise price for non-qualified options will be not less than at
least 50% of the fair market value of the stock subject to such option as of
the date of grant of such options, as determined by the Company's Board of
Directors.

The options granted on April 29, 1993 were to reward certain officers and key
employees who have been employed by the Company for a number of years and
to help the Company retain these officers by providing them with an additional
incentive to contribute to the success of the Company.

The 1993 Plan is to be administered by the Board of Directors or by a committee
designated by the Board.  The terms of options granted or stock awards or sales
effected under the 1993 Plan are to be determined by the Board of Directors or
its committee.  The 1993 Plan provides that if the shares of Class A Common
Stock shall be subdivided or combined into a greater or smaller number of
shares or if the Company shall issue any shares of Class A Common Stock as a
stock dividend on its outstanding Class A Common Stock the number of shares of
Class A Common Stock deliverable upon the exercise of options shall be
increased or decreased proportionately, and appropriate adjustments shall be
made in the purchase price per share to reflect such subdivision, combination
or stock dividend. 

No options may be exercised for a term of more than ten years from the date of
grant.

<PAGE>

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

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

<TABLE>
<CAPTION>

                                  YEAR-END VALUES OF STOCK OPTIONS

             Number of Securities                  Value of Unexercised
         Underlying Unexercised Options            In-The-Money Options
             at Fiscal Year-End                    at Fiscal Year-End(1)
         -------------------------------          ----------------------
 Name      Exercisable    Unexercisable          Exercisable   Unexercisable
------   --------------   -------------         ------------  --------------
<S>          <C>                                   <C>
George R.
   Quist     146,082                                $243,101              
William C.
   Sargent    72,434                                $160,407              

All executive
 officers
 and key employee
 option recipients
 as a group
(12 persons)  69,300                                $50,589
                      
</TABLE>

 (1)   The value of options equals the market value of Security National
       Financial Corporation common stock at December 31, 1996 ($5.25 per
       share), minus the exercise price of options, and includes only those
       options for which the exercise price was less than market value at year
       -end.
<PAGE>

Item 12 - Security Ownership of Certain Beneficial Owners and Management

The following table sets forth security ownership information of the Company's
Class A and Class C Common Stock as of March 20, 1997, (i) for persons who
own beneficially more than 5% of the Company's outstanding Class A or Class C
Common Stock, (ii) each director of the Company, and (iii) for all executive
officers and directors of the Company as a group.
<TABLE>
<CAPTION>



                                     Class A                   Class C
                                   Common Stock              Common Stock
                             Amount                     Amount
Name and Address of       Beneficially      Percent   Beneficially      Percent
Beneficial Owner             Owned         of Class      Owned         of Class
--------------------     --------------   ----------  -------------    --------
<S>                        <C>              <C>         <C>             <C>
George R. Quist(1)(2)
4491 Wander Lane
Salt Lake City, Utah 84117   237,435         6.8        2,462,390        50.1

William C. Sargent(1)(2)
4974 Holladay Blvd.
Salt Lake City, Utah 84117    74,735         2.1          257,820         5.2

Scott M. Quist
7 Wanderwood Way                                       
Sandy, Utah 84094             74,464         2.1           55,918         1.1

Employee Stock
  Ownership Plan(3)
5300 South 360 West
  Suite 310
Salt Lake City,
  Utah 84123                 590,579         17.0       1,051,159        21.4

Charles L. Crittenden
248 - 24th Street
Ogden, Utah 84404             -0-             *           162,187         3.3

Sherman B. Lowe
2197 South 2100 East
Salt Lake City,
  Utah 84109                  19,279          *           177,248         3.6

R.A.F. McCormick(1)
400 East Crestwood Road
Kaysville, Utah 84037         9,249           *            92,474         1.9

</TABLE>

<TABLE>
<CAPTION>

                                      Class A
                                     and Class C
                                     Common Stock
                                    --------------
                             Amount
Name and Address of       Beneficially         Percent
Beneficial Owner             Owned             of Class
-------------------      --------------       ---------
<S>                       <C>                 <C>
George R. Quist (1)(2)    2,699,825            32.2
4491 Wander Lane
Salt Lake City, UT 84117

William C. Sargent (1)(2)   332,555             4.0
4974 Holladay Blvd.
Salt Lake City, UT 84117

Scott M. Quist              130,382             1.6
7 Wanderwood Way
Sandy, UT 84094

Employee Stock            1,641,738            19.6
  Ownership Plan (3)
5300 South 360 West
  Suite 310
Salt Lake City, UT 84123

Charles L. Crittenden       162,187             1.9
248 - 24th Street
Ogden, UT 84404

Sherman B. Lowe             196,527             2.3
2197 South 2100 East
Salt Lake City, UT 84109

R.A.F. McCormick            101,723             1.2
400 East Crestwood Road
Kaysville, Ut 84037

</TABLE>
<TABLE>
<CAPTION>

                                      Class A                   Class C 
                                   Common Stock               Common Stock 
                             Amount                        Amount
Name and Address of       Beneficially      Percent     Beneficially  Percent
Beneficial Owner             Owned         of Class        Owned      of Class
-----------------        -------------    ----------    -----------   -------
<S>                          <C>            <C>           <C>          <C>
H. Craig Moody
1782 East Faunsdale Drive
Sandy, Utah 84092            111               *           -0-           *

W. Lowell Steen
12705 SE River Rd.
   Apt. 402S
Portland, Oregon 97222       221               *           805           *

Nathan H. Wagstaff
2131 King Street
Salt Lake City,
   Utah 84109             23,093               *       173,899          3.5

Associated Investors(4)
5300 So. 360 W.
   Suite 310
Salt Lake City,
   Utah 84123             69,401             2.0        443,658         9.0

</TABLE>
<TABLE>
<CAPTION>

                                    Class A
                                  and Class C
                                  Common Stock
                                 -------------
                           Amount
Name and Address of      Beneficially        Percent
Beneficial Owner           Owned              of Class
--------------------     -------------     ------------
<S>                        <C>               <C>
H. Craig Moody                111             *
1782 East Faunsdale
  Drive
Sandy, UT 84092

W. Lowell Steen             1,026             *
12705 SE River Rd.
  Apt. 402S
Portland, OR 97222

Nathan H. Wagstaff        196,992            2.3
2131 King Street
Salt Lake City, UT 84109

Associated Investors (4)  513,059            6.1
5300 So. 360 W. Suite 310
Salt Lake City, UT 84123
------------------------------------
All directors and executive
   officers (9 persons)
</TABLE>

*   Less than one percent

 (1)    Does not include 590,579 shares of Class A Common Stock and 1,051,159
        shares of Class C Common Stock owned by the Company's Employee Stock
        Ownership Plan (ESOP), of which George R. Quist, William C. Sargent,
        and R.A.F. McCormick are the trustees and accordingly, exercise shared 
        voting and investment powers with respect to such shares.

 (2)    The number of shares shown in the table for George R. Quist and William
        C. Sargent does not include 69,401 shares of Class A Common Stock and
        443,658 shares of Class C Common Stock owned by Associated Investors,
        a Utah general partnership, of which these individuals are the managing
        partners and, accordingly, exercise shared voting and investment
        powers with respect to such shares.

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

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

The Company's officers and directors, as a group, own beneficially
approximately 45.5% of the outstanding shares of the Company's Class A and
Class C Common Stock.

Item 13.  Certain Relationships and Related Transactions
---------------------------------------------------------
The Company's Board of Directors has a written procedure which requires
disclosure to the Board of any material interest or any affiliation on the 
part of any of its officers, directors or employees which is in conflict or
may be in conflict with the interests of the Company.

No director, officer or 5% stockholder of the Company or its subsidiaries, or
any affiliate thereof, has engaged in any business transactions with the
Company or its subsidiaries during 1995 or 1996 other than as described
herein.

                                               PART IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K
--------------------------------------------------------------------------
(a)(1)(2) Financial Statements and Schedules
          ----------------------------------
          See "Index to Consolidated Financial Statements and Supplemental
Schedules" under Item 8 above.

(a)(3)  Exhibits

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

Exhibit
<TABLE>
<CAPTION>

    Table No                   Document
---------------               ----------
   <C>  <S>
(a)(3)  Exhibits:
   3.A.   Articles of Restatement of Articles of Incorporation

     B.   Bylaws(1)

   4.A.   Specimen Class A Stock Certificate(1)

     B.   Specimen Class C Stock Certificate(1)

     C.   Specimen Preferred Stock Certificate and Certificate of Designation
          of Preferred Stock(1)

10.       A.   Restated and Amended Employee Stock Ownership Plan and
               Trust Agreement (1)

          B.   1993 Stock Option Plan (2)

          C.     Promissory Note with Key Bank of Utah (3)

          D.     Loan and Security Agreement with Key Bank of Utah (3)

          E.     General Pledge Agreement with Key Bank of Utah (3)

          F.     Purchase and Sale Agreement with Escrow Instructions with the
                 Carter Family Trust and the Leonard M. Smith Family Trust (4)

          G.     Note Secured by Purchase Price Deed of Trust and Assignment
                 of Rents with the Carter Family Trust and the Leonard M. Smith
                 Family Trust (4)

          H.     Deed of Trust and Assignment of Rents with the Carter Family
                 Trust and the Leonard M. Smith Family Trust (4)

          I.     Stock Insurance Agreement with Greer-Wilson Funeral Home,
                 Inc. and Page E. Greer (4)

          J.     Promissory Note with Page E. Greer and Patricia R. Greer (4)

          K.     Pledge Agreement with Page E. Greer and Patricia R. Greer (4)

          L.     Option Agreement with Page E. Greer, Patricia R. Greer and
                 Greer-Wilson Funeral Home, Inc. (4)

          M.     Consultation and Noncompetition Agreement with Page E.
                 Greer, Patricia R. Greer and Greer-Wilson Funeral Home, Inc.
                 (4)

          N.     Guaranty with Page E. Greer and Patricia R. Greer (4)

          O.     Irrevocable Stock Proxy with Page E. Greer and Patricia R.
                 Greer (4)

          P.     Stock Purchase Agreement with Civil Service Life Insurance
                 Company and Civil Service Employees Insurance Company (5)

          Q.     Promissory Note with Civil Service Employees Insurance
                 Company (5)

          R.     Articles of Merger of Civil Service Employees Life Insurance
                 Company into Capital Investors Life Insurance Company (5)

          S.     Agreement and Plan of Merger of Civil Service Employees Life
                 Insurance Company into Capital Investors Life Insurance
                 Company (5)

   11.    Statement Re:  Computation of Per-share Earnings

   22.    Subsidiaries of the Registrant

         (1)    Incorporated by reference from Registration Statement on Form
                S-1, as filed on June 29, 1987.

         (2)    Incorporated by reference from Annual Report on Form 10-K,
                as filed on March 31, 1994.

         (3)    Incorporated by reference from Report on Form 8-K, as filed on
                February 24, 1995.

         (4)    Incorporated by reference from Report on Form 8-K, as filed on
                May 1, 1995.

         (5)    Incorporated by reference from Report on Form 8-K, as filed on
                January 16, 1996.

24.       

   (b)    Reports on Form 8-K:

               None

</TABLE>
<PAGE>

SIGNATURES


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

                   SECURITY NATIONAL FINANCIAL CORPORATION


Dated:  March 28, 1997                 By: George R. Quist,
                                           --------------------------------
                                           Chairman of the Board, President
                                           and Chief Executive Officer

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

SIGNATURE                                 TITLE                    DATE

George R. Quist                      Chairman of the           March 28, 1997
-----------------------              Board, President and
                                     Chief Executive Officer
                                     and (Principal Executive
                                     Officer)

Scott M. Quist                       First Vice President,     March 28, 1997
-----------------------              General Counsel and
                                     Treasurer and Director
                                     (Principal Financial and
                                     Accounting Officer)

William C. Sargent                   Senior Vice President,    March 28, 1997
-----------------------              Secretary and Director


Charles L. Crittenden                Director                  March 28, 1997
---------------------


Sherman B. Lowe                      Director                  March 28, 1997
----------------------


R.A.F. McCormick                     Director                  March 28, 1997
----------------------

H. Craig Moody                       Director                  March 28, 1997
----------------------

W. Lowell Steen                      Director                  March 28, 1997
----------------------

Nathan H. Wagstaff                   Director                  March 28, 1997
----------------------

<PAGE>
                                      SECURITIES AND EXCHANGE COMMISISON
                                             Washington, D.C. 20549
                                                    FORM 10-K
                                            Year Ended December 31, 1996

                                    SECURITY NATIONAL FINANCIAL CORPORATION
                                          Commission   File No. 0-9341

                                               E X H I B I T S

<PAGE>
<TABLE>
<CAPTION>

                                             Exhibit Index



Exhibit No.         Document Name
------------       ---------------
<C>                <S>
3.A                Articles of Restatement of Articles of Incorporation

11.                Statement Re:  Computation of Per-share Earnings

22.                Subsidiaries of the Registrant

27.                Financial Data Schedule

</TABLE>

<PAGE>

                                             EXHIBIT NO. 3.A

                          Articles of Restatement of Articles of Incorporation
<PAGE>

                                         ARTICLES OF RESTATEMENT

                                                   OF

                                       ARTICLES OF INCORPORATION

                                                   OF

                                 SECURITY NATIONAL FINANCIAL CORPORATION



   1.  The name of this Corporation is Security National Financial Corporation.
   2.  The Articles of Incorporation of this Corporation are amended and
restated to  read in their entirety as follows:

                                                ARTICLE I

                                                  Name

    The name of this Corporation is Security National Financial Corporation.

                                               ARTICLE II

                                                Duration

          The period of duration of the Corporation shall be perpetual.

                                               ARTICLE III

                                      Objects, Purposes, and Powers

 The Corporation is organized to engage in any lawful acts, activities and
pursuits for which a corporation may be organized under the Utah Revised
Business Corporation Act (the "Act").

                                               ARTICLE IV

                                              Capital Stock

  The authorized capital stock of the Corporation shall consist of 27,500,000
shares divided into 10,000,000 shares of $2.00 par value Common Stock, 
5,000,000 shares of $1.00 par value Common Stock, 7,500,000 shares of $0.20 par
value Common Stock, and 5,000,000 shares of $1.00 par value Preferred Stock.
The Common Stock which the Corporation is authorized to issue is divided as
follows:

      Ten Million (10,000,000) shares of $2.00 par value Class A Common
      Stock;

      Five Million (5,000,000) shares of $1.00 par value Class B Common Stock;
      and

      Seven Million Five Hundred Thousand (7,500,000) shares of  $0.20 par
      value Class C Common Stock.

      The Preferred Stock may be issued:

           (a)    Subject to the right of the Corporation to redeem any of
                  such shares at a price not less than the par value thereof;

           (b)    Entitling the holders thereof to cumulative, non-
                  cumulative or partially cumulative dividends;

           (c)    Having preference over any other class or series of
                  shares as to payment of dividends;

           (d)    Having preference in the assets of the Corporation over
                  any other class or classes of shares upon the voluntary
                  or involuntary liquidation of the Corporation;

           (e)    Being convertible into shares of any other class or into
                  shares of any series of the same or any other class,
                  except a class having prior or superior rights and
                  preferences as to dividends or distribution of assets
                  upon liquidation.

   The Board of Directors shall have authority to divide and issue the 
Preferred Stock in series and to establish variations in relative rights and
preferences between such series as provided by the Utah Business Corporation
Act.  All shares of Preferred Stock shall be identical except as to any
variations established by the Board of Directors pursuant to the preceding
sentence.  Except as may be provided for by law, the Preferred Stock shall
be non-voting stock and the holders of such stock shall not be entitled to
any voice in the management of the Corporation, nor to any voting powers at
any stockholders' meeting, by virtue thereof.

                                                ARTICLE V

                                  Preferences, Limitations and Relative
                                         Rights Of Common Stock

  No share of the Common Stock authorized in Article IV shall have any
preference over or limitation in respect to any other share of such Common
Stock except as set forth in this Article V.  Except as set forth in this
Article V, all shares of the Common Stock authorized in Article IV shall have
equal rights and privileges, including the following:


      1.  All outstanding shares of Common Stock shall share equally in
          dividends, except that in the event of cash dividends, the Class C 
          common shares shall in no event receive per share cash dividends in
          excess of 9% of the per share cash dividends received by the Class A
          and/or Class B common shares; and further provided that with
          respect to liquidating dividends and distributions on the Common
          Stock, the Class C common shares shall in no event receive per
          share distribution in excess of 9% of the per sharedistributions
          received by the Class A and/or Class B common shares; and
          further provided that with respect to all other distributions on the
          Common Stock, not including cash dividends and liquidating
          dividends and distributions, the Class C common shares shall in no
          event receive per share distributions in excess of 10% of the per
          share distributions received by the Class A and/or Class B common
          shares.  Neither the purchase or redemption by the Corporation of
          stock of any class, in any manner permitted by law, nor the merger,
          consolidation, or other business combinations of the Corporation
          or any of its subsidiaries with or into any other corporation or
          corporations, nor the sale or transfer by the Corporation of all
          or any part of its properties or assets shall be deemed to be 
          liquidating dividends and distributions for purposes of this
          Article V.  No holder of Class C Common Stock shall be entitled
          to receive any amounts with respect thereto upon liquidation,
          dissolution, or winding up of the Corporation other than the
          amounts provided for in this Article V.

          The classes of Common Stock shall share equally in stock dividends
          declared which shall be payable in Common Stock of each common
          stockholder's particular class (for example, if a 10% stock
          dividend is declared for the Class A Common Stock, there shall
          also be declared a 10% stock dividend for the Class B and C Common
          Stock, and a Class A common stockholder would receive 10% 
          additional shares of Class A Common Stock, a Class B common
          stockholder and a Class C common stockholder would receive 10% 
          additional shares of Class B or C Common Stock respectively). 
          Except for a two-for-one forward stock split effective as of 
          November 7, 1996 involving only Class C Common Stock, stock
          splits shall be administered among the classes of Common Stock
          similarly to stock dividends.  Dividends with respect to all
          common shares shall be payable at the discretion of the
          Board of Directors of the Corporation at such times and in such
          amounts as it deems advisable subject to the provisions of any
          applicable law.  However, any dividends may be declared by the
          Board of Directors of the Corporation as may be permitted by the
          Utah Business Corporation Act.  In addition, the Board of
          Directors of the Corporation, from time to time, may distribute to
          stockholders in partial liquidation, out of stated capital or
          capital surplus of the Corporation, a portion of the assets, 
          in cash or property, subject to the following provisions:

           (a)  No such distribution shall be made at a time when the
          Corporation is insolvent or when such distribution would render the
          Corporation insolvent.

          (b)  Each such distribution when made, shall be identified as a
          distribution in partial liquidation and the amount per share 
          disclosed to the stockholders receiving the same concurrently with
          the distribution thereof.

          (c)  No distribution shall be made to the holders of any class of
          shares  unless all cumulative dividends accrued on all preferred
          shares entitled to preferential dividends shall have been fully
          paid.

          (d)  No such distribution shall be made to the holders of any class
          of shares which would reduce the remaining net assets of the 
          Corporation below the aggregate preferential amount, if any,
          payable in the event of voluntary liquidation to the holders of
          shares having preferential rights to the assets of the
          Corporation in the event of liquidation. 

  2.  The Class B Common Stock shall be non-voting stock, and the holders of
such stock shall not be entitled to any voice in the management of the
Corporation, nor to any voting powers at any stockholders' meeting by virtue
thereof, except as set forth herein.  Holders of Class B Common Stock
shall have the right to vote as a class upon any proposed amendment to the
Articles of Incorporation of this Corporation which would:

     (a)  Increase or decrease the aggregate number of authorized shares
          of the Class B Common Stock;

     (b)  Increase or decrease the par value of the shares of the Class B
          Common Stock;

     (c)  Effect any exchange, reclassification or cancellation of all or part
          of the shares of the Class B Common Stock;

     (d)  Effect an exchange, or create a right of exchange, of all or any
          part of the shares of another class into the shares of the Class B 
          Common Stock;

     (e)  Change the designations, preferences, limitations or relative rights
          of the shares of the Class B Common Stock;

     (f)  Change the shares of Class B Common Stock into the same or a 
          different number of shares, either with or without par value, of
          the same class or another class or classes;

     (g)  Create a new class of shares having rights and preferences prior
          and superior to the shares of the Class B Common Stock, or increase
          the right and preferences of any class having rights and preferences
          prior or superior to the shares of the Class B Common Stock; or

     (h)  Cancel or otherwise affect dividends on the shares of Class B
          Common Stock which have accrued but have not been declared.

In addition, holders of Class B Common Stock shall be entitled to such further
voting rights, as a class, as are set forth in the Utah Business Corporation
Act.

 3.  Each outstanding share of Class A Common Stock shall be entitled
     to one vote at stockholders' meetings, either in person or by proxy. 
     Class C Common Stock shall have one vote per share at stockholders'
     meetings, provided, however, that at every meeting of the stockholders
     called for the election of directors, the holders of Class A Common
     Stock, voting separately as a class, shall be entitled to elect one-third
     (1/3) of the number of directors to be elected at such meeting and if
     one-third (1/3) of such number of directors is not a whole number,
     then the holders of Class A Common Stock, voting separately as a class,
     shall be entitled to elect the next higher whole number of directors 
     to be elected at such meeting.  In the election of the remaining
     directors to be elected and for all other proper corporate matters, each
     outstanding share of Class A Common Stock shall have one vote, either in
     person or proxy.

 4.  (a)  No person holding shares of Class C Common Stock
          (hereinafter called a "Class C Holder") may transfer, and the
          Corporation shall not register the transfer of, such shares of Class
          C Common Stock, whether by sale, assignment, gift, bequest,
          appointment or otherwise, except to a "Permitted Transferee" of
          such Class C Holder, which term shall have the following meanings:

          (i)    In the case of a Class C Holder who is a natural person
                 holding record and beneficial ownership of the shares of
                 Class C Common Stock in question, "Permitted Transferee"
                 means:

                (A)  the spouse of such Class C Holder;

                (B)  a lineal descendant of a grandparent of such Class
                     C Holder;

                (C)  the trustee of a trust (including a voting trust) for
                     the benefit of:

                     (1)  one or more of such Class C Holders;
 
                     (2)  other lineal descendants of a
                          grandparent of such Class C Holder;

                     (3)  the spouse of such Class C Holder; or

                     (4)  any organization contributions to which
                          are deductible for federal income, estate or gift tax
                          purposes (hereinafter called a "Charitable
                          Organization"), and for the benefit of no other
                          person;

  provided that such trust may grant a general or special power of appointment
  to the spouse of a Class C Holder and may permit trust assets to be used to
  pay taxes, legacies and other obligations of the trust or the estate of such
  Class C Holder payable by reason of the death of such Class C Holder, and
  provided, that such trust must prohibit transfer of shares of Class C Common
  Stock to persons other than Permitted Transferee as defined in this clause
  (i);

     (D)  a Charitable Organization established by such
          Class C Holder, such Class C Holder's spouse, or a lineal
          descendant of a grandparent of such Class C Holder;

     (E)  a corporation, all of the outstanding capital stock
          of which is owned by, or partnership or joint venture all of
          the partners or venturers of which are, one or more of such
          Class C Holders, other lineal descendants of a grandparent of
          such Class C Holder, and the spouse of such Class C Holder;
          provided, that if any share of capital stock of such a
          corporation (or of any survivor of a merger or consolidation
          of such a corporation), or any partnership interest in such a
          partnership, is acquired by any person who is not within such
          class of persons, all shares of Class C Common Stock then
          held by such corporation or partnership, as the case may be,
          shall be deemed without further act on anyone's part to be
          converted into shares of Class A Common Stock on the basis
          of ten (10) shares of Class C Common Stock for one (1)
          share of Class A Common Stock and shall thereupon and
          thereafter be deemed to represent the appropriate number of
          shares of Class A Common Stock.

              (ii)  In the case of a Class C Holder holding shares of Class
                    C Common Stock as trustee pursuant to a trust which was
                    irrevocable on the record date for determining the persons
                    to whom the Class C Common Stock is first distributed by
                    the Corporation (hereinafter in this paragraph (4) called
                    the "Record Date"), "Permitted Transferee" means any
                    person to whom or for whose benefit principal may be
                    distributed either during or at the end of the term of such
                    trust whether by power of appointment or otherwise.

              (iii)  In the case of a Class C Holder holding shares of Class
                     C Common Stock as trustee pursuant to a trust other than a
                     trust described in clause (ii) above, "Permitted
                     Transferee" means the persons who established such
                     trust, and Permitted Transferee determined pursuant to
                     clause (i) above.

              (iv)   In the case of a Class C Holder holding record (but not
                     beneficial) ownership of the shares of Class C Common
                     Stock in question as nominee for the person who was the
                     beneficial owner thereof on the Record Date, "Permitted
                     Transferee" means such beneficial owner thereof on the
                     Record Date, such beneficial owner determined pursuant
                     to clauses (i), (iii), or (v) hereof, as the case may
                     be.

               (v)  In the case of a Class C Holder which is a corporation
                    (other than a charitable organization described in
                    subclause (C) of clause (i) above) holding record and
                    beneficial ownership of the shares of Class C Common
                    Stock in question, "Permitted Transferee" means any
                    stockholder of such corporation receiving shares of Class
                    C Common Stock through a dividend or through a distribution
                    made upon liquidation of such corporations, and the
                    surviving corporation of a merger or consolidation of such
                    corporation.

               (vi)  In the case of a Class C Holder which is the estate of a
                     deceased Class C Holder or which is the estate of a 
                     bankrupt or insolvent Class C Holder, and provided such
                     deceased, bankrupt or insolvent Class C Holder, as the
                     case may be, held record and beneficial ownership of
                     the Shares of Class C Common Stock in question,
                     "Permitted Transferee" means a Permitted Transferee of
                     such deceased, bankrupt or insolvent Class C Holder as
                     determined pursuant to this Paragraph 4.

               (vii)  In the case of a Class C Holder which is a partnership
                      or joint venture holding shares of Class C Common Stock,
                      "Permitted Transferee" means any one of the partners of
                      venturers; provided that if any partnership or joint
                      venture interest is acquired by any persons not a
                      partner or venturer of such partnership or joint venture
                      or of a "Permitted Transferee" of such partner or 
                      venturer, all shares of Class C Common Stock then held
                      by such partnership or joint venture shall be deemed,
                      without further act on anyone's part, to be converted
                      into shares of Class A Common Stock and shall
                      thereupon be deemed to represent the like number of
                      shares of Class A Common Stock.

              (viii)  In the case of a Class C Holder which is a corporation
                      in bankruptcy holding shares of Class C Common Stock,
                      "Permitted Transferee" means any other Class C Holder or
                      "Permitted Transferee" of any Class C Holder.

                      (b)  Notwithstanding the provisions of this Paragraph 4,
                      a holder of record of a share of Class A Common Stock,
                      which share meets all of the following criteria, shall 
                      be entitled to exchange said Class A Common Stock
                      for Class C Common Stock on the basis of ten (10) shares
                      of Class C Common Stock for each share of the Class A 
                      Common Stock so owned by such holder of record;
                      provided, however, such stockholder converts his Class
                      A Common Stock into Class C Common Stock within the 45
                      day period following the conclusion of a holding period
                      of the Class A Common Stock of 48 continuous months.
                      Shares not converted within such 45 day period shall
                      thereafter be Class A common shares with no further
                      conversion rights into Class C common shares.

                      (i)  The Class A common shares were obtained by a
                      transfer of Class C common shares to a Non-Permitted
                      Transferee which converted the Class C common shares
                      to Class A common shares pursuant to the provisions of
                      this paragraph 4.

                      (ii)  Such shares of Class A Common Stock have had the
                     same record and beneficial owner for a continuous period
                     of 48 months.

                      (iii)  For purposes of this subparagraph (b), any shares
                      of Class A or Class C Common Stock acquired by the 
                      beneficial owner as a direct result of a stock split,
                      stock dividend or other type of distribution of shares
                      with respect to existing shares ("dividend shares")
                      will be deemed to have been acquired and held
                      continuously from the date on which the shares with
                      regard to which the dividend shares were issued were
                      acquired.

                     (iv)  For purposes of this subparagraph (b), any share
                     of the Class A Common Stock held in "street" or
                     "nominee" name shall be presumed to have been acquired
                      by the beneficial owner subsequent to February 4, 1986
                      and to have had the same beneficial owner for a
                      continuous period of less than 48 months prior thereto.
                      This presumption shall be rebuttable by presentation
                      to the Corporation by such beneficial owner of
                      satisfactory evidence to the contrary.  Any disputes
                      arising in respect of this subclause shall be definitely
                      resolved by a determination of the Board of Directors
                      made in good faith.

     (c)  Notwithstanding anything to the contrary herein, any Class C
          Holder may pledge such Holder's shares of Class C Common Stock to a
          pledgee pursuant to a bona fide pledge of such shares as collateral
          security for indebtedness due to the pledgee, provided that such
          shares shall not be transferred to or registered in the name of the 
          pledgee and shall remain subject to the provisions of this
          paragraph 4.

          In the event of foreclosure or other similar action by the pledgee,
          such pledged shares of Class C Common Stock may only be transferred
          to a Permitted Transferee of the pledgor or converted into shares of
          Class A Common Stock, as the pledgee may elect.

     (d) For purposes of this paragraph 4:

          (i)  The relationship of any person that is derived by or
               through legal adoption shall be considered a natural one.

          (ii)  Each joint owner of shares of Class C common stock
                shall be considered a "Class C Holder" of such shares.

          (iii)  A minor for whom shares of Class C Common Stock
                 are held pursuant to a Uniform Gifts to Minors Act or similar
                 law shall be considered a Class C Holder of such shares.

           (iv)  Unless otherwise specified, the term "person" means
                 both natural persons and legal entities.

     (e)  Any purported transfer of shares of Class C Common Stock not
          permitted hereunder shall have the effect of converting the shares so
          transferred into Class A common shares on the basis of ten (10)
          shares of Class C Common Stock for one (1) share of Class A Common
          Stock.  The Corporation may, as a condition to the transfer or the
          registration of transfer of shares of Class C Common Stock to a
          purported Permitted Transferee, require the furnishing of such
          affidavits or other proof as it deems necessary to establish that
          such transferee is a Permitted Transferee.  The Corporation
          must note on the certificates for shares of Class C Common Stock the
          restrictions on transfer and registration of transfer imposed by this
          paragraph 4.  The Corporation must also note on the certificates for
          shares of Class A Common Stock obtained by a transfer of Class C
          common shares to a Non-Permitted Transferee that such shares may be
          converted to Class C Common Stock on the basis of ten (10) shares of
          Class C Common Stock for one (1) share of Class A Common Stock, if
          the conditions of Article V, paragraph 4, subparagraph (b) are
          complied with, including a continuous holding period of 48 months
          with a following 45 day conversion period, or such conversion right
          will be forfeited.

5.  (a)  Each ten (10) shares of Class C Common Stock may at any
         time be converted into one (1) fully paid and non-assessable share
         of Class A Common Stock, except following a stockholder vote approving
         a plan of complete liquidation or dissolution of the Corporation
         when the conversion ratio shall be at the reduced rate of eleven
         and .1112 shares of Class C Common Stock to one share of Class A
         Common Stock, provided that upon abandonment of a plan of
         liquidation or dissolution the conversion rate will revert to ten
         (10) shares of Class C stock for one (1) share of Class A stock. 
         Such right shall be exercised by the surrender of the certificate
         representing such shares of Class C Common Stock to be converted to
         the Corporation at any time during normal business hours at the
         principal executive offices of the Corporation, or if an agent for
         the registration or transfer of shares of Class C Common Stock is 
         then duly appointed and acting (said agent being hereinafter
         called the "Transfer Agent") then at the office of the Transfer Agent,
         accompanied by a written notice of the election by the holder thereof
         to convert and (if so required by the Corporation or the Transfer
         Agent) by instruments of transfer, in form satisfactory to the
         Corporation and to the Transfer Agent, duly executed by such holder
         or his duly authorized attorney, and transfer tax stamps or funds
         therefore, if required pursuant to subparagraph (e).

         (b)  As promptly as practicable after the surrender for conversion of
         a certificate representing shares of Class C Common Stock in the
         manner provided in subparagraph (a) above and the payment in cash of
         any amount required by the provisions of subparagraphs (a) and (e),
         the Corporation will deliver or cause to be delivered at the office of
         the Transfer Agent to or upon the written order of the holder of such
         certificate, a certificate or certificates representing the number
         of full shares of Class A Common Stock issuable upon such
         conversion, issued in such name or names as such holder may
         direct.  Such conversion shall be deemed to have been made immediately
         prior to the close of business on the date of the surrender of the
         certificate representing shares of Class C Common Stock, and all
         rights of the holder of such shares as such holder shall cease at
         such time and the person or person in whose name or names the
         certificate or certificates representing the shares of Class A
         Common Stock are to be issued shall be treated for all purposes as
         having become the record holder or holders of such shares of Class A
         Common Stock at such time; provided, however, that any such
         surrender and payment on any date when the stock transfer books of the
         Corporation shall be closed shall constitute the person or persons in
         whose name or names the certificate or certificates representing 
         shares of Class A Common Stock are to be issued as the record holder
         or holders thereof for all purposes immediately prior to the close
         of business in the next succeeding day on which such stock transfer
         books are open.

         (c)  No adjustments in respect of dividends shall be made upon the
         conversion of any share of Class C Common Stock into Class A Common
         Stock; provided, however, that if a share be converted subsequent to
         the record date for the payment of a dividend or other distribution
         on shares of Class C Common Stock but prior to such payment, the
         registered holder of such share at the close of business on such
         record date shall be entitled to receive the dividend or other
         distribution payable on such share on such date notwithstanding the
         conversion thereof or the Corporation's default in payment
         of the dividend on such date.

         (d)  The Corporation shall at all times reserve and keep available,
         solely for the purpose of issue upon conversion of the outstanding
         shares of Class C Common Stock, such number of shares of Class A
         Common Stock as shall be issuable upon the conversion of all such
         outstanding shares, and the Corporation shall also at all times
         reserve and keep available for the purpose of issue upon conversion
         of the Class A Common Stock such number of shares of Class C Common
         Stock as may be issuable upon possible conversion of appropriate 
         shares, provided that nothing contained herein shall be construed
         to preclude the Corporation from satisfying its obligations in
         respect of the conversion of the outstanding shares of Class A or
         Class C Common Stock by delivery of purchased shares of Class A or
         Class C Common Stock which are held in the treasury of the
         Corporation.  If any shares of Class A or Class C Common stock,
         required to be reserved for purposes of conversion hereunder,
         require registration with or approval of any governmental authority
         under any federal or state law before such share of Class A or Class
         C Common Stock may be issued upon conversion, the Corporation will
         cause such shares to be duly registered or approved, as the case may
         be.  All shares of Class A or Class C Common Stock which shall be
         issued upon conversion of the shares of Class A or Class C Common 
         Stock, will, upon issuance, be fully paid and nonassessable.

         (e)  The issuance of certificates of shares of Class A Common Stock
         upon conversion of shares of Class C Common Stock shall be made
         without charge for any stamp or other similar tax in respect of such
         issuance.  However, if any such certificate is to be issued in a name
         other than that of the holder of the share or shares of Class C Common
         Stock converted, the person or persons requesting the issuance thereof
         shall pay to the Corporation the amount of any tax which may be
         payable in respect of any transfer involved in such issuance or
         shall establish to the satisfaction of the Corporation that
         such tax has been paid.

6.  Except as otherwise provided in paragraphs 1 and 5 above or
    pursuant to shares of Class C Common Stock issued under a stock option
    plan, and except to the extent stockholders of the 1982 Series 1 Preferred
    Stock elect or have a right to convert their shares into Class C Common
    Stock, the Corporation shall not issue additional shares of Class C Common
    Stock after the date shares of Class C Common Stock surrendered for
    conversion shall be retired, unless otherwise approved by the affirmative
    vote of the holders of a majority of the outstanding shares of stock of the
    Corporation entitled to vote thereon.  Holders of the 1982 Series 1
    Preferred Stock electing to receive Class C shares shall receive ten (10)
    shares of Class C Common Stock for every one (1) share of Class A Common
    Stock received.

7.  No stockholder of the Corporation shall be entitled as of right to
    subscribe for, purchase or receive any part of any new or additional
    issue of stock of any class, whether now or hereafter authorized, or of
    bonds, debentures or other securities convertible into or exchangeable for
    stock, but all such additional shares of stock of any class, or bonds,
    debentures or other securities convertible into or exchangeable for stock,
    may be issued and disposed of by the Board of Directors on such terms and
    for such consideration, so far as may be permitted by law, and to such
    persons, as the Board of Directors in its absolute discretion may deem
    advisable.

8.  Cumulative voting shall not be allowed in elections of directors or
    for any other purpose.

9.  All shares of Common Stock when issued, shall be fully paid and
    nonassessable.  No fractional shares of Common Stock shall be issued.

10.  The Board of Directors may restrict the transfer of any of the
     Corporation's shares of Class A, Class B or Class C Common Stock issued
     by giving the Corporation or any stockholder "first right of refusal to
     purchase" the stock, making the stock redeemable, or by restricting the
     transfer of the stock under such terms and in such manner as the directors
     may deem necessary and as are not inconsistent with the laws of the State
     of Utah.  Any stock so restricted must carry a conspicuous legend noting
     the restriction and the place where such restriction may be found in the
     records of the Corporation.

11.  The judgment of the Board of Directors as to the adequacy of any
     consideration received or to be received for any shares of Class A, Class
     B, or Class C Common Stock, options in respect thereof, or any other
     securities which the Corporation at any time may be authorized to issue or
     sell or otherwise dispose of shall be conclusive in the absence of fraud,
     subject to the provisions of these Articles of Incorporation and any
     applicable law.

                                               ARTICLE VI

                                            Place of Business

The principal office and the principal place of business of the Corporation
initially shall be located in Salt Lake City, Utah.  The Board of Directors,
however, from time to time may establish such other offices, branches,
subsidiaries, or divisions which it may consider to be advisable.  The
address of the Corporation's registered office in Utah for purposes of the Utah
Revised Business Corporation Act shall be 5300 South 360 West, Suite 310,
Salt Lake City, Utah  84123.  The name of the Corporation is registered
agent at the address of the aforesaid registered office for purposes of this
Act shall be Scott M. Quist.

                                               ARTICLE VII

                                                Directors

The affairs of the Corporation shall be governed by a board of not less than
three (3) directors.  Subject to such limitation, the number of directors 
shall be fixed by or in the manner provided in the Bylaws of the Corporation,
as may be amended from time to time, except as to the number constituting the
initial board, which number shall be three (3).  The organization and conduct
of the board shall be in accordance with the following:

     1.   The directors of the Corporation need not be residents of Utah
          and shall not be required to hold shares of the Corporation's capital
          stock.

     2.   Meetings of the Board of Directors, regular or special, may be
          held within or without Utah upon such notice as may be prescribed
          by the Bylaws of the Corporation.  Attendance of a director at a
          meeting shall constitute a wavier by him of notice of such meeting
          unless he attends only for the express purpose of objecting to the
          transaction of any business threat on the ground that the meeting
          is not lawfully called or convened.

     3.   A majority of the number of directors at any time constituting the
          Board of Directors shall constitute a quorum for the transaction of
          business, and the act of a majority of the directors present at a
          meeting which a quorum is present shall be the act of the Board of
          Directors.

     4.   By resolution adopted by a majority of the directors at any time
          constituting the Boards of Directors, the Board of Directors may
          designate two or more directors to constitute an Executive Committee
          which shall have and may exercise, to the extent permitted by law or
          in such resolution, all the authority of the Board of Directors in 
          the management of the Corporation; but the designation of any such
          committee and the delegation of authority thereto shall not operate
          to relieve the Board of Directors, or any member thereof, of any
          responsibility imposed on it or him by law.

     5.   Any vacancy in the Board of Directors, however caused or
          created, may be filled by the affirmative vote of a majority of the
          remaining directors, though less than a quorum of the Board of
          Directors.  A director elected to fill a vacancy shall be elected
          for the unexpired term of his predecessor in office and until his
          successor is duly elected and qualified. 

                                              ARTICLE VIII

                                                Officers

 The officers of the Corporation shall consist of a President, one or more Vice
Presidents as may be prescribed by the Bylaws of the Corporation, a Secretary,
and a Treasurer, each of whom shall be elected by the Board of Directors at
such time and in such manner as may be prescribed by the Bylaws of the
Corporation.  Any two or more offices may be held by the same person except the
offices of President and Secretary.

                                               ARTICLE IX

                                        Meetings of Stockholders

Meetings of the stockholders of the Corporation shall be held at such place
within or without Utah and at such times as may be prescribed in the Bylaws
of the Corporation.  Special meetings of the stockholders of the Corporation
may be called by the Chairman of the Board, the President of the Corporation,
he Board of Directors, or by the record holder or holders of a least ten
percent (10%) of all shares entitled to vote at the meeting.  At any meeting
of the stockholders, except to the extent otherwise provided by law, a
quorum shall consist of a majority of the shares entitled to vote at the
meeting; and, if a quorum is present, the affirmative vote of the majority of
shares represented at the meeting and entitled to vote thereat shall be the act
of the stockholders unless the vote of a greater number is required by law.

                                                ARTICLE X

                                                 Bylaws

 The initial Bylaws of the Corporation shall be adopted by its Board of
Directors, in which all shall be vested the power to alter, amend, or repeal
the Bylaws or to adopt new Bylaws.


                                               ARTICLE XI

                                     Transactions with Directors and
                                        Other Interested Parties

No contract or other transaction between the Corporation and any other
corporation, whether or not a majority of the shares of the capital stock of
such other corporation is owned by the Corporation, and no act of the
Corporation shall in any way be affected or invalidated by the fact that any
of the directors of the Corporation are pecuniarily or otherwise interested
in, or are directors or officers of, such other corporation.  Any director
of the Corporation, individually, or any firm with which such director is
affiliated may be a party to or amy be pecuniarily or otherwise interested in
any contract or transaction of the Corporation; provided, however, that the
fact that he or such firm is so interested shall be disclosed or shall have
been known to the Board of Directors of the Corporation, or a majority
thereof, at or before the entering into such contract or transaction; and
any director of the Corporation who is also a director or officer of such other
corporation, or who is so interested, may be counted in determining the
existence of a quorum at any meeting of the Board of Directors of the
Corporation which shall authorize such contract or transaction and may vote
thereat to authorize such contract or transaction, with like force and effect
as if he were not such director or officer of such other corporation or not
so interested.

                                               ARTICLE XII

                                        Acquisition of Own Shares

The Corporation may purchase, take, receive, or otherwise acquire shares of
its capital stock out of any unreserved and unrestricted capital surplus then
available.

                                              ARTICLE XIII

                                    Approval of Business Combinations

The stockholder vote required to approve Business Combinations (hereinafter
defined) shall be as set forth in this Article XIII. 

1.  Higher Vote for Business Combinations.  In addition to any affirmative
    vote required by law or the Articles of Incorporation, and except as
    otherwise expressly provided in paragraph 3 of this Article XIII:

     (a)  Any merger or consolidation of Security National
          Financial Corporation (referred to in this Article XIII as the
          "Corporation") or any Subsidiary (as hereinafter defined) with (i) any
          Interested Stockholder (as hereinafter defined) or (ii) any other
          corporation (whether or not itself an Interested Stockholder) which
          is, or after such merger or consolidation would be, an Affiliate (as
          hereinafter defined) of an Interested Stockholder; or

     (b)  Any sale, lease, exchange, mortgage, pledge, transfer or
          other disposition (in one transaction or a series of transactions)
          to or with any Interested Stockholder or any Affiliate of any
          Interested  Stockholder of all or a Substantial Part (as hereinafter
          defined) of the property and assets of the Corporation (including
          without limitation the voting securities of a subsidiary); or

     (c)  The adoption of any plan or proposal for the liquidation
          or dissolution of the Corporation proposed by or on behalf of an
          Interested Stockholder or any Affiliate of any Interested
          Stockholder; or

     (d)  Any reclassification of securities (including any reverse
          stock split), or recapitalization of the Corporation, or any merger 
          or consolidation of the Corporation with any of it Subsidiaries or
          any other transaction (whether or not with or into or otherwise
          involving an Interested Stockholder) which has the effect, directly
          or  indirectly, of increasing the proportionate share of the
          outstanding shares of any class of equity or convertible securities
          of the Corporation or any Subsidiary which is directly or indirectly
          owned by any Interested Stockholder or any Affiliate of any
          Interested Stockholder shall require the affirmative vote of the
          holders of at least 75% of the voting power of the then outstanding
          shares of capital stock of the Corporation entitled to vote
          generally in the election of directors (the "Voting Stock"),
          voting together as a single class.  Such affirmative vote shall be
          required notwithstanding the fact that no vote may be required, or
          that a lesser percentage may be specified by law or in any
          agreement with any national securities exchange or otherwise.

 2.  Definition of "Business Combination."  The term "Business Combination"
as used in this Article XIII shall mean any transaction which is referred to
in any one or more of paragraphs (a) through (d) of paragraph 1 of this Article
XIII.

3.  When Higher Vote Is Not Required.  The provisions of paragraph 1 of this
Article XIII shall not be applicable to any particular Business Combination,
and such Business Combination shall require only such affirmative vote as is
required by law and any other provision of these Articles of Incorporation, if
the Business Combination shall have been approved by a majority of the
Nonpartisan Directors (as hereinafter defined). 

4.  Certain Definitions.  For purposes of this Article III:

    (a)  A "person" shall mean any individual, firm, corporation or other
         entity.

    (b)  "Interested Stockholder" shall mean any person (other than the
         Corporation or any Subsidiary) who or which:

         (i)  is the beneficial owner, directly or indirectly, of
              more than 5% of the outstanding Voting Stock or of more than 5%
              of the voting power of the outstanding Voting Stock; or

         (ii)  is an Affiliate of the Corporation and at any time
               within the two-year period immediately prior to the date in
               question was the beneficial owner, directly or indirectly, of
               more than 5% of the outstanding Voting Stock or of 5% or more of
               the voting power of the then outstanding Voting Stock; or

         (iii) is an assignee of or has otherwise succeeded to any
               shares of Voting Stock which were at any time within the
               two-year period immediately prior to the date in question 
               beneficially owned by any Interested Stockholder, if such
               assignment or succession shall have occurred in the course of
               a transaction or series of transactions not involving the
               public offering within the meaning of the Securities
               Act of 1933, as amended.

               (c)   A "Substantial Part" shall mean more than 25% of the
                     fair market value of the total assets of the Corporation.

               (d)   A person shall be a "beneficial owner" of any Voting
                     Stock:

                     (i)  which such person or any of its Affiliates or
                     Associates (as hereinafter defined) beneficially owns,
                     directly or indirectly; or

                     (ii)  which such person or any of its Affiliates or
                     Associates has (A) the right to acquire (whether such
                     right is exercisable immediately or only after the
                     passage of time), pursuant to any agreement, 
                     arrangement or understanding or upon the exercise
                     of conversion rights, exchange rights, warrants or
                     options, or otherwise, or (B) the right to vote 
                     pursuant to any agreement, arrangement or understanding;
                     or 

                     (iii) which is beneficially owned, directly or indirectly,
                     by any other person with which such person or any of its
                     Affiliates or Associates has any agreement, arrangement or
                     understanding for the purpose of acquiring, holding,
                     voting or disposing of any shares of Voting Stock.

          (e)   For the purpose of determining whether a person is an
                Interested Stockholder pursuant to subparagraph b of this
                paragraph 4, the number of shares of Voting Stock deemed to be
                outstanding shall include shares deemed owned through
                application of subparagraph d of this paragraph 4, but shall
                not include any other shares of Voting Stock which may be 
                issuable pursuant to any agreement, arrangement or 
                understanding, or upon exercise of conversion rights,
                warrants or options, or otherwise.

          (f)   "Affiliate" or "Associate" shall have the respective
                meanings ascribed to such terms in Rule 12b-2 of the General
                Rules and Regulations under the Securities Exchange Act of
                1934, as amended.

          (g)   Subsidiary" means any corporation of which a majority
                of any class of equity security is owned, directly or
                indirectly, by the Corporation.

          (h)   "Nonpartisan Director" means any member of the Board
                of Directors of the Corporation (the "Board") who is
                unaffiliated with the Interested Stockholder and was a
                member of the Board prior to the time that the Interested
                Stockholder became an Interested Stockholder, and any
                successor of a Nonpartisan Director who is
                unaffiliated with the Interested Stockholder and is recommended
                to succeed a Nonpartisan Director by a majority of Nonpartisan
                Directors then on the Board.

5.  Powers of Nonpartisan Directors.  A majority of the Nonpartisan Directors
of the Corporation shall have the power and duty to determine, on the basis of
information known to them after reasonable inquiry, all facts necessary to
determine compliance with this Article XIII, including without limitation (A)
whether a person is an Interested Stockholder, (B) the number of shares of
Voting Stock beneficially owned by any person, (C) the voting power of the
shares of Voting Stock beneficially owned by any person, (D) whether a 
person is an Affiliate or Associate of another, an (E) whether the assets
subject to a Business Combination constitute a Substantial Part of the
assets of the Corporation; and the good faith determination of a majority of
the Nonpartisan Directors on such matters shall be conclusive and binding for
all the purposes of this Article XIII.

6.  No Effect on Fiduciary Obligations of Interested Stockholders.  Nothing
contained in this Article XIII shall be construed to relieve the Board of
Directors or any Interested Stockholder from any fiduciary obligation imposed
by law.

7.  Amendment or Repeal.  Notwithstanding any other provisions of these
Articles of Incorporation or the Bylaws of the Corporation (and notwithstanding
the fact that a lesser percentage may be specified by law, these Articles of
Incorporation or the Bylaws of the Corporation), the affirmative vote of the
holders of 75% or more of the voting power of the share s of the then
outstanding Voting Stock, voting together as a single class, shall be
required to amend or repeal, or adopt any provisions inconsistent with, this
Article XIII of these Articles of Incorporation; provided however, that the
preceding provisions of this paragraph 7 shall not be applicable to any
amendment of this Article XIII of these Articles of Incorporation, and such
amendment shall require only such affirmative vote as is required by law and
any other provisions of these Articles of Incorporation, if such amendment
shall have been approved by a majority of the Nonpartisan Directors.

                                               ARTICLE XIV

                                    Limitation on Director Liability

To the fullest extent permitted by the Utah Revised Business Corporation Act
or any other applicable law as now in effect or as it may hereafter be
amended, a director of this Corporation shall not be personally liable to the
corporation or its shareholders for monetary damages for any action taken or
any failure to take action, as a director.

No amendment or repeal of this Article XIV, and no adoption of any provision
in these Articles of Restatement of Articles of Incorporation inconsistent
with this Article XIV, shall eliminate or reduce the effect of this Article
XIV, with respect to any matter occurring, or any cause of action, suit or
claim accruing or arising prior to such amendment or repeal or adoption of
any inconsistent provision.

                                               ARTICLE XV

                                             Indemnification

The corporation shall indemnify all officers and directors of the Corporation
against monetary damages for any action taken or any failure to take action
to the fullest extent permitted by the Utah Revised Business Corporation Act
as now in effect or as it may hereafter be amended."


3. The foregoing amendments to the Articles of Incorporation were
adopted on  November 7, 1996, in accordance with the requirements of Sections
1007 and 1003 of the Act.

4. At the time of the adoption of the foregoing amendments to the
Articles of Incorporation, the Corporation had two classes of Common Stock
outstanding, designated as Class A Common Stock and Class C Common Stock.  The
number of shares of Common Stock outstanding at the date of such adoption was 
3,218,801 shares of Class A Common Stock and  2,362,545 shares of Class C Common
Stock.

5. The outstanding shares of Class A and Class C Common Stock were
each entitled to one vote on the amendments, so the number of shares entitled
to be voted on the amendments by each class of Common Stock were as follows:

           Class A Common Stock - 3,218,801 votes; and
           Class C Common Stock - 2,362,545 votes.

6.  At the meeting at which the amendments were adopted, 1,998,410
shares of Class A Common Stock and 1,570,722 shares of Class C Common Stock
were represented.

7.  The total number of shares voting for the amendments by each class
of Common Stock was as follows:

            Class A Common Stock - 1,333,986 shares; and
            Class C Common Stock - 1,566,439 shares.

The number of shares voting for the amendments by each class of Common
Stock entitled to vote separately on the amendments was sufficient for
approval by that class of Common Stock.

  IN WITNESS WHEREOF, these Articles of Restatement of Articles of
Incorporation are hereby executed, effective as of this 11th day of November,
1996.

                                      SECURITY NATIONAL
                                      FINANCIAL CORPORATION




                                          By: _____________________________
                                              Scott M. Quist
                                              First Vice President, General
                                              Counsel and Treasurer


ATTEST:



By:       _________________________
          William  C. Sargent
          Senior Vice President
            and  Secretary

<PAGE>

                                               EXHIBIT 11

                            Statement Re:  Computation of Per-share Earnings



<PAGE>
<TABLE>
<CAPTION>
                                              Exhibit 11

                                 SECURITY NATIONAL FINANCIAL CORPORATION

                                    Computation of Per-Share Earnings

                                     For the Year Ended December 31,


                                        1996         1995         1994
                                      -------       ------       ------
<S>                                  <C>            <C>         <C>
Primary:
    Average shares
        outstanding                    3,757        3,551        3,322 
    Net effect of dilutive
        stock options - based
        on the treasury stock
        method using average
        market price                     103          135           28 
                                     -------      -------       ------
    Total                              3,860        3,686        3,350 
                                     =======      =======       ======

    Net income                      $  1,237      $ 1,552      $  1,040 
                                    ========      =======      ========
    Per-share amount                   $ .32        $ .42         $ .31 
                                       =====        =====         =====
Fully Diluted:

    Average shares
    outstanding                       3,757         3,551         3,322
    Net effect of dilutive
        stock options - based
        on the treasury stock
        method using the year-
        end market price, if
        higher than average
        market price                   108           145             37 
                                   -------        ------          -----
    Total                            3,865         3,696          3,359 
                                   -------        ------         ------

    Net income                    $  1,237       $ 1,552        $ 1,040 
                                  ========       =======        =======
    Per-share amount                 $ .32        $ .42           $ .31
</TABLE>

<PAGE>
                                               EXHIBIT 22

                                    Subsidiaries of Security National
                                          Financial Corporation
                                          as of March 28, 1997
<PAGE>


Exhibit 22


Subsidiaries of Security National Financial Corporation  
(as of March 28, 1997)

        Security National Life Insurance Company

        Memorial Estates, Inc.

        Memorial Mortuary

        Paradise Chapel Funeral Home, Inc.

        California Memorial Estates, Inc.

        Cottonwood Mortuary, Inc.

           Deseret Memorial, Inc.

           Holladay Cottonwood Memorial Foundation

        Holladay Memorial Park, Inc.

        Camelback Sunset Funeral Home, Inc.

        Security National Mortgage Company

        Greer-Wilson Funeral Home, Inc.

<PAGE>

                                              Exhibit 27

                                         Financial Data Schedule

<PAGE>