----

----

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

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

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

----

----

----

----

|                                                                |   | 2007   |      |   | 2006   |   |      | 2005   |   |   | 2004     |   |   | 2003   |      |
|---------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|--------|----------|--------|--------|--------|-----------|
|                                                                |   |   |      |   |   |   |      |   |   |   |     |   |   |   |      |
| Life      Insurance Policy/Cert.  Count as of December 31 |   |   | 405,224   | (5)    |   |   | 401,441   |   |   |   | 413,753  | (3)(4) |   |   | 357,767   | (2) |   |   | 353,017 | (1) |
| Insurance      in force as of December 31 (omitted 000)             |   | $      | 2,434,733 | (5)    |   | $      | 2,620,694 |   |   | $      | 3216,946 | (3)(4) |   | $      | 2,914,135 | (2) |   | $ | 2,914,438 | (1) |
| Premiums      Collected (omitted 000)                               |   | $      | 32,173    |   |   | $      | 31,619    | (4)    |   | $      | 27,275   | (3)    |   | $      | 30,560    | (2) |   | $ | 28,598 | (1) |

| (1) | Includes      reinsurance assumed on October 1, 2003, under agreement with Guaranty      Income Life Insurance Company. This agreement was cancelled      on  January  1,2005. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Includes      the purchase of Paramount Security Life Insurance Company, now known as      Security National Life Insurance Company of Louisiana, on March 16,      2004. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Includes      the termination of reinsurance assumed with Guaranty Income Life Insurance      Company effective January 1, 2005. |
|-----|----------------------------------------------------------------------------------------------------------------------------------|

| (4) | Includes      the purchase of Memorial Insurance Company of America on December 29,      2005. |
|-----|------------------------------------------------------------------------------------------------|

| (5) | Includes      the purchase of Capital Reserve Life Insurance Company on December 17,      2007 |
|-----|------------------------------------------------------------------------------------------------|

----

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

----

|                                  |   | 2007   |   |   | 2006   |   |   | 2005   |   |   | 2004   |   |   | 2003   |   |
|---------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Annuities                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Policy/Cert.                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Count      as of December 31          |   |   | 11,175 | (2)    |   |   | 8,475  |   |   |   | 8,904  | (1)    |   |   | 7,365  |   |   |   | 7,206 |   |
| Deposits      Collected (omitted 000) |   | $      | 4,080  |   |   | $      | 3,977  | (1)    |   | $      | 2,416  |   |   | $      | 1,972  |   |   | $ | 2,026 |   |

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

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

|                                  |   | 2007   |   |   | 2006   |   |   | 2005   |   |   | 2004   |   |   | 2003   |   |
|---------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Accident      and Health              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Policy/Cert.                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Count      as of December 31          |   |   | 14,845 |   |   |   | 15,340 |   |   |   | 14,934 |   |   |   | 15,778 |   |   |   | 17,391 |   |
| Premiums      Collected (omitted 000) |   | $      | 257    |   |   | $      | 274    |   |   | $      | 285    |   |   | $      | 308    |   |   | $ | 352 |   |

----

----

----

----

----

----

----

----

----

----

| Location                                   |   | Function                     |   | Owned Leased                                    |   | Approximate      Square Footage   |
|--------------------------------------------|--------|------------------------------|--------|-------------------------------------------------|--------|-----------------------------------|
| 5300      South 360 West                   |   | Corporate      Headquarters  |   | Owned        (1)                      |   | 27,200                            |
| Salt      Lake City, Utah                  |   |                         |   |                                            |   |                              |
|                                       |   |                         |   |                                            |   |                              |
| 634      West Main Street                  |   | Insurance      Operations    |   | Owned        |   |        3,000                 |
| Blytheville,      Arkansas                 |   |                         |   |                                            |   |                              |
|                                       |   |                         |   |                                            |   |                              |
| 755      Rinehart Road                     |   | Insurance      Operations/   |   | Owned        (2)                      |   | 18,100                            |
| Lake      Mary, Florida                    |   | Mortgage      Sales          |   |                                            |   |                              |
|                                       |   |                         |   |                                            |   |                              |
| 3935      I-55 South, Frontage Road        |   | Insurance      Operations    |   | Owned        (3)                      |   | 12,000                            |
| Jackson,      Mississippi                  |   |                         |   |                                            |   |                              |
|                                       |   |                         |   |                                            |   |                              |
| 119      East Atchison Street              |   | Insurance      Operations    |   | Leased        (4)                     |   |        2,000                 |
| Jefferson      City, Missouri              |   |                         |   |                                            |   |                              |
|                                       |   |                         |   |                                            |   |                              |
| 2800      Youree Drive Bldg. 1, Suite 207  |   | Insurance      Operations    |   | Leased        (5)                     |   |           200 |
| Shreveport,      Louisiana                 |   |                         |   |                                            |   |                              |
|                                       |   |                         |   |                                            |   |                              |
| 175      Jester Parkway                    |   | Fast      Funding Operations |   | Leased        (6)                     |   |        5,000                 |
| Rainbow      City, Alabama                 |   |                         |   |                                            |   |                              |
|                                       |   |                         |   |                                            |   |                              |
| 410      North 44th      Street, Suite 190 |   | Mortgage      Sales          |   | Leased        (7)                     |   |        1,800                 |
| Phoenix,      Arizona                      |   |                         |   |                                            |   |                              |
|                                       |   |                         |   |                                            |   |                              |
| 4634      Town Center Blvd. Suite 314      |   | Mortgage      Sales          |   | Leased        (8)                     |   |           700 |
| Eldorado      Hills, California            |   |                         |   |                                            |   |                              |
|                                       |   |                         |   |                                            |   |                              |
| 12150      Tributary Point Dr., Suite 160  |   | Mortgage      Sales          |   | Leased        (9)                     |   |        2,000                 |
| Gold      River, California                |   |                         |   |                                            |   |                              |
|                                       |   |                         |   |                                            |   |                              |
| 7676      Hazard Center Drive, Suite 625   |   | Mortgage      Sales          |   | Leased      (10)                                |   |        1,300                 |
| San      Diego, California                 |   |                         |   |                                            |   |                              |
|                                       |   |                         |   |                                            |   |                              |
| 27433      Tourney Road, Suite 220         |   | Mortgage      Sales          |   | Leased      (11)                                |   |        2,500                 |
| Santa      Clarita, California             |   |                         |   |                                            |   |                              |

----

| Location                                 |   | Function                  |   | Owned Leased     |   | Approximate      Square Footage |
|------------------------------------------|--------|---------------------------|--------|------------------|--------|---------------------------------|
| 8950      Dr. MLK St. N, Suite 103       |   | Mortgage      Sales       |   | Leased      (12) |   |        1,200               |
| St.      Petersburg, Florida             |   |                      |   |             |   |                            |
|                                     |   |                      |   |             |   |                            |
| 970      No. Kalaheo, Suite A-102        |   | Mortgage      Sales       |   | Leased      (13) |   |        1,800               |
| Kailua,      Hawaii                      |   |                      |   |             |   |                            |
|                                     |   |                      |   |             |   |                            |
| 45      South Park Blvd. Suite 45        |   | Mortgage      Sales       |   | Leased      (14) |   |   4,800               |
| Greenwood,      Indiana                  |   |                      |   |             |   |                            |
|                                     |   |                      |   |             |   |                            |
| 6900      College Blvd., Suite 950       |   | Mortgage      Sales       |   | Leased      (15) |   |        1,900               |
| Overland      Park, Kansas               |   |                      |   |             |   |                            |
|                                     |   |                      |   |             |   |                            |
| 505      Village Road SW, Suite 104      |   | Mortgage      Sales       |   | Leased      (16) |   |        1,000               |
| Shallotte,      North Carolina           |   |                      |   |             |   |                            |
|                                     |   |                      |   |             |   |                            |
| 4045      NW 64th      Street, Suite 500 |   | Mortgage      Sales       |   | Leased      (17) |   |        3,500               |
| Oklahoma      City, Oklahoma             |   |                      |   |             |   |                            |
|                                     |   |                      |   |             |   |                            |
| 999      Southwest Disk Drive, Suite 104 |   | Mortgage      Sales       |   | Leased      (18) |   |        1,800               |
| Bend,      Oregon                        |   |                      |   |             |   |                            |
|                                     |   |                      |   |             |   |                            |
| 4800      SW Griffith Drive, Suite 250   |   | Mortgage      Sales       |   | Leased      (19) |   |        2,700               |
| Beaverton,      Oregon                   |   |                      |   |             |   |                            |
|                                     |   |                      |   |             |   |                            |
| 12750      Merit Drive, Suite 1212       |   | Mortgage      Sales       |   | Leased      (20) |   |        2,600               |
| Dallas,      Texas                       |   |                      |   |             |   |                            |
|                                     |   |                      |   |             |   |                            |
| 3613      Williams Drive, Suite 603      |   | Mortgage      Sales       |   | Leased      (21) |   |        1,000               |
| Georgetown,      Texas                   |   |                      |   |             |   |                            |
|                                     |   |                      |   |             |   |                            |
| 820      Gessner, Suite 800              |   | Mortgage      Sales       |   | Leased      (22) |   |        2,400               |
| Houston,      Texas                      |   |                      |   |             |   |                            |
|                                     |   |                      |   |             |   |                            |
| 613      Northwest Loop 410, Suite 685   |   | Mortgage      Sales       |   | Leased      (23) |   |        2,300               |
| San      Antonio, Texas                  |   |                      |   |             |   |                            |
|                                     |   |                      |   |             |   |                            |
| 6955      and 6975 South Union Park,     |   | Mortgage      Sales       |   | Leased      (24) |   |        7,000               |
| Suites      100 and 150                  |   |                      |   |             |   |                            |
| Midvale,      Utah                       |   |                      |   |             |   |                            |
|                                     |   |                      |   |             |   |                            |
| 5247      Greenpine Drive                |   | Insurance      Operations |   | Owned      (25)  |   |        9,100               |
| Murray,      Utah                        |   |                      |   |             |   |                            |
|                                     |   |                      |   |             |   |                            |
| 5251      Green Street, Suite 350        |   | Mortgage      Sales       |   | Owned      (26)  |   |        5,000               |
| Salt      Lake City, Utah                |   |                      |   |             |   |                            |
|                                     |   |                      |   |             |   |                            |
| 6740      South 1300 East, Suite 100     |   | Mortgage      Sales       |   | Leased      (27) |   |        3,200               |
| Salt      Lake City, Utah                |   |                      |   |             |   |                            |

----

| Location                                 |   | Function                  |   | Owned Leased     |   | Approximate      Square Footage |
|------------------------------------------|--------|---------------------------|--------|------------------|--------|---------------------------------|
| 970      East Murray-Holladay Rd.,       |   | Mortgage      Sales       |   | Leased      (28) |   |        6,400               |
| Suite      603                           |   |                      |   |             |   |                            |
| Salt      Lake City, Utah                |   |                      |   |             |   |                            |
|                                     |   |                      |   |             |   |                            |
| 9149      So. Monroe, Suite A            |   | Mortgage      Sales       |   | Leased      (29) |   |        1,300               |
| Sandy,      Utah                         |   |                      |   |             |   |                            |
|                                     |   |                      |   |             |   |                            |
| 474      West 800 North, Suite 102       |   | Mortgage      Sales       |   | Leased      (30) |   |        2,000               |
| Orem,      Utah                          |   |                      |   |             |   |                            |
|                                     |   |                      |   |             |   |                            |
| 1244      North Main Street, Suite 203   |   | Mortgage      Sales       |   | Leased      (31) |   |        1,200               |
| Tooele,      Utah                        |   |                      |   |             |   |                            |
|                                     |   |                      |   |             |   |                            |
| 3500-188th      Street, S.W. Suite 275   |   | Mortgage      Sales       |   | Leased      (32) |   |        1,000               |
| Lynnwood,      Washington                |   |                      |   |             |   |                            |
|                                     |   |                      |   |             |   |                            |
| 501      7th      Street North, Suite 10 |   | Insurance      Operations |   | Leased      (33) |   |   1,200               |
| Columbus,      Mississippi               |   |                      |   |             |   |                            |

|   | (1) | The      Company leases an additional 3,000 square feet of the facility to      unrelated third parties for approximately $47,500 per year, under leases      expiring at various dates after2007. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | The      Company leases an additional 9,900 square feet of the facility to      unrelated third parties for approximately $217,500 per year, under leases      expiring at various dates after2007. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | (4) | The      Company leases this facility for $12,000 per year with a month-to-month      lease. |
|--------|-----|----------------------------------------------------------------------------------------------|

|   | (5) | The      Company leases this facility for $1,900 per year.   The      lease expires in April 2008. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------|

|   | (6) | The      Company leases this facility for $14,400 per year. The lease expires in      July 2010. |
|--------|-----|--------------------------------------------------------------------------------------------------|

|   | (7) | The      Company leases this facility for $41,600 per year. The lease expires in      October 2009 |
|--------|-----|----------------------------------------------------------------------------------------------------|

|   | (8) | The      Company leases this facility for $27,200 per year. The lease expires in      July 2009 |
|--------|-----|-------------------------------------------------------------------------------------------------|

|   | (9) | The      Company leases this facility for $48,700 per year. The lease expires in      June 2009 |
|--------|-----|-------------------------------------------------------------------------------------------------|

|   |  (10) | The      Company leases this facility for $47,400 per year. The lease expires in      June 2008. |
|--------|------------|--------------------------------------------------------------------------------------------------|

|   |  (11) | The      Company leases this facility for $82,800 per year. The lease expires in      February 2009. |
|--------|------------|------------------------------------------------------------------------------------------------------|

|   |  (12) | The      Company leases this facility for $64,800 per year. The lease expires in      March 2011. |
|--------|------------|---------------------------------------------------------------------------------------------------|

|   |  (13) | The      Company leases this facility for $40,600 per year. The lease expires in      March 2008. |
|--------|------------|---------------------------------------------------------------------------------------------------|

|   |  (14) | The      Company leases this facility for $67,500 per year. The lease expires in      April 2012 |
|--------|------------|--------------------------------------------------------------------------------------------------|

|   |  (15) | The      Company leases this facility for $38,100 per year. The lease expires in      January 2010. |
|--------|------------|-----------------------------------------------------------------------------------------------------|

|   |  (16) | The      Company leases this facility for $19,500 per year. The lease expires in      May 2010. |
|--------|------------|-------------------------------------------------------------------------------------------------|

|   |  (17) | The      Company leases this facility for $49,700 per year. The lease expires in      March 2008. |
|--------|------------|---------------------------------------------------------------------------------------------------|

|   |  (18) | The      Company leases this facility for $39,700 per year. The lease expires in      January 2009. |
|--------|------------|-----------------------------------------------------------------------------------------------------|

|   |  (19) | The      Company leases this facility for $44,300 per year. The lease expires in      May 2009. |
|--------|------------|-------------------------------------------------------------------------------------------------|

|   |  (20) | The      Company leases this facility for $43,100 per year. The lease expires in      January 2009. |
|--------|------------|-----------------------------------------------------------------------------------------------------|

|   |  (21) | The      Company leases this facility for $21,000 per year. The lease expires in      April 2012. |
|--------|------------|---------------------------------------------------------------------------------------------------|

|   |  (22) | The      Company leases this facility for $53,700 per year. The lease expires in      January 2011. |
|--------|------------|-----------------------------------------------------------------------------------------------------|

|   |  (23) | The      Company leases this facility for $46,700 per year. The lease expires in      October 2012. |
|--------|------------|-----------------------------------------------------------------------------------------------------|

|   |  (24) | The      Company leases these facilities for $161,900 per year. The leases expire      November 2011 and June 2010. |
|--------|------------|---------------------------------------------------------------------------------------------------------------------|

|   |  (25) | The      Company leases an additional 126,000 square feet of the facility to      unrelated third parties for approximately $1,049,000 per year, under      leases expiring at various dates after2007. |
|--------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |  (26) | The      Company leases an additional 25,000 square feet of the facility to      unrelated third parties for approximately $470,700 per year, under leases      expiring at various dates after2007. |
|--------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

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

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

|  |  (29) | The      Company leases this facility for $21,300 per year.  The lease      expires in July 2008. |
|--|------------|-------------------------------------------------------------------------------------------------------------|

|  |  (30) | The      Company leases this facility for $42,400 per year.  The lease      expires in February 2010 |
|--|------------|----------------------------------------------------------------------------------------------------------------|

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

|  |  (32) | The      Company leases this facility for $17,500 per year.  The lease expires      in June 2010. |
|--|------------|--------------------------------------------------------------------------------------------------------|

|  |  (33) | The      Company leases this facility for $7,092 per year.  The lease expires      in June 2009. |
|--|------------|-------------------------------------------------------------------------------------------------------|

----

|                                |   |                        |   |          |   |                |   | Net      Saleable Acreage |   |                                 |
|-------------------------------------|--------|-----------------------------|--------|---------------|--------|---------------------|--------|---------------------------|--------|--------------------------------------|
| Name      of Cemetery               |   | Location                    |   | Date Acquired |   | DevelopedAcreage(1) |   | TotalAcreage(1)           |   | Acres      Sold as CemeterySpaces(2) |   | Total      Available  Acreage(1) |
| Memorial      Estates, Inc.:        |   |                        |   |          |   |                |   |                      |   |                                 |   |   |
|                                |   |                        |   |          |   |                |   |                      |   |                                 |   |   |
| Lakeview Cemetery                   |   | 1640      East Lakeview Dr. |   |          |   |                |   |                      |   |                                 |   |   |
|                                |   | Bountiful,      Utah        |   | 1973          |   | 7                   |   | 40                        |   | 6                                    |   | 34 |
|                                |   |                        |   |          |   |                |   |                      |   |                                 |   |   |
| Mountain      View Cemetery         |   | 3115      East 7800 South   |   |          |   |                |   |                      |   |                                 |   |   |
|                                |   | Salt      Lake City, Utah   |   | 1973          |   | 15                  |   | 54                        |   | 14                                   |   | 40 |
|                                |   |                        |   |          |   |                |   |                      |   |                                 |   |   |
| Redwood      Cemetery(4)            |   | 6500      South Redwood Rd. |   |          |   |                |   |                      |   |                                 |   |   |
|                                |   | West      Jordan, Utah      |   | 1973          |   | 27                  |   | 78                        |   | 27                                   |   | 51 |
|                                |   |                        |   |          |   |                |   |                      |   |                                 |   |   |
| Cottonwood      Mortuary Inc.       |   |                        |   |          |   |                |   |                      |   |                                 |   |   |
| Deseret      Memorial Inc.          |   |                        |   |          |   |                |   |                      |   |                                 |   |   |
| Lakehills      Cemetery(3)          |   | 10055      So. State Street |   |          |   |                |   |                      |   |                                 |   |   |
|                                |   | Sandy,      Utah            |   | 1991          |   | 9                   |   | 41                        |   | 4                                    |   | 37 |
|                                |   |                        |   |          |   |                |   |                      |   |                                 |   |   |
| Holladay      Memorial Park(3)(4)   |   | 4900      So. Memory Lane   |   |          |   |                |   |                      |   |                                 |   |   |
|                                |   | Holladay,      Utah         |   | 1991          |   | 5                   |   | 14                        |   | 4                                    |   | 10 |
|                                |   |                        |   |          |   |                |   |                      |   |                                 |   |   |
| California      Memorial Estates    |   |                        |   |          |   |                |   |                      |   |                                 |   |   |
| Singing      Hills Memorial Park(5) |   | 2800      Dehesa Road       |   |          |   |                |   |                      |   |                                 |   |   |
|                                |   | El      Cajon, California   |   | 1995          |   | 8                   |   | 35                        |   | 3                                    |   | 32 |

|   | (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, 2007, there were mortgages of approximately $1,323,000      collateralized by the property and facilities at Deseret Mortuary,      Cottonwood Mortuary, Holladay Memorial Park, and Lakehills      Cemetery. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | (5) | As      of December 31, 2007, there was a mortgage of approximately $82,000,      collateralized by the property |
|--------|-----|------------------------------------------------------------------------------------------------------------------|

----

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

----

|   | (1) | As      of December 31, 2007, there were mortgages of approximately $1,323,000,      collateralized by the property and facilities at Deseret Mortuary,      Cottonwood Mortuary, Holladay Memorial Park and Lakehills      Cemetery. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | As      of December 31, 2007, there was a mortgage of approximately $93,000,      collateralized by the property and facilities of Crystal Rose Funeral      Home. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (3)  | These      funeral homes also provide burial niches at their respective      locations. |
|--|-----------|-----------------------------------------------------------------------------------------|

|   | (4) | As      of December 31, 2007, there was a mortgage of approximately $115,000,      collateralized by the property and facilities of Adobe Chapel Funeral      Home. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Period (Calendar      Year) |   | Price Range |   |
|-----------------------------|--------|-------------|--------|
|                        |   | High        |   |   | Low |   |
| 2006                        |   |        |   |   |   |   |
| First      Quarter          |   | $           | 4.34   |   |   | $ | 2.99 |   |
| Second      Quarter         |   |        | 4.51   |   |   |   | 3.63 |   |
| Third      Quarter          |   |        | 3.96   |   |   |   | 3.54 |   |
| Fourth      Quarter         |   |        | 5.17   |   |   |   | 3.74 |   |
|                        |   |        |   |   |   |   |   |   |
| 2007                        |   |        |   |   |   |   |   |   |
| First      Quarter          |   | $           | 5.67   |   |   | $ | 4.43 |   |
| Second      Quarter         |   |        | 6.20   |   |   |   | 4.71 |   |
| Third      Quarter          |   |        | 5.71   |   |   |   | 3.90 |   |
| Fourth      Quarter         |   |        | 4.48   |   |   |   | 3.10 |   |
|                        |   |        |   |   |   |   |   |   |
| 2008                        |   |        |   |   |   |   |   |   |
| First      Quarter          |   | $           | 4.63   |   |   | $ | 3.15 |   |

----

|                     |     |     |     |     |     |     |
|--------------------------|----------|----------|----------|----------|----------|----------|
|                     | 12/31/02 | 12/31/03 | 12/31/04 | 12/31/05 | 12/31/06 | 12/31/07 |
| SNFC                     | 100      | 122      |  54 |  65 |  99 |  77 |
| S      & P 500       | 100      | 126      | 138      | 142      | 161      | 167      |
| S      & P Insurance | 100      | 119      | 126      | 142      | 156      | 144      |

----

|                                                                 |   | Year Ended December 31, |            |
|----------------------------------------------------------------------|--------|-------------------------|-----------------|
|                                                                 |   |                    |            |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                 |   | 2007(1)                 |            |   | 2006( 2) |   |   | 2005 |   |   | 2004(3) |   |   | 2003 |   |
| Revenue                                                              |   |                    |            |   |   |   |   |   |   |   |   |   |   |   |   |
| Premiums                                                             |   | $                       | 32,263,000      |   |   | $ | 30,776,000 |   |   | $ | 27,170,000 |   |   | $ | 25,979,000 |   |   | $ | 23,295,000 |   |
| Net      investment income                                           |   |                    | 31,956,000      |   |   |   | 23,246,000 |   |   |   | 19,387,000 |   |   |   | 15,939,000 |   |   |   | 17,303,000 |   |
| Net      mortuary and cemetery sales                                 |   |                    | 13,189,000      |   |   |   | 12,123,000 |   |   |   | 10,839,000 |   |   |   | 11,661,000 |   |   |   | 10,944,000 |   |
| Realized      (losses) gains on investments                          |   |                    | 1,008,000       |   |   |   | 891,000 |   |   |   | 74,000 |   |   |   | 74,000 |   |   |   | (2,000 | ) |
| Mortgage      fee income                                             |   |                    | 130,472,000     |   |   |   | 85,113,000 |   |   |   | 71,859,000 |   |   |   | 62,690,000 |   |   |   | 92,955,000 |   |
| Other                                                                |   |                    | 860,000         |   |   |   | 381,000 |   |   |   | 621,000 |   |   |   | 855,000 |   |   |   | 550,000 |   |
| Total      revenue                                                   |   |                    | 209,748,000     |   |   |   | 152,530,000 |   |   |   | 129,950,000 |   |   |   | 117,198,000 |   |   |   | 145,045,000 |   |
|                                                                 |   |                    |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Expenses                                                             |   |                    |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Policyholder      benefits                                           |   |                    | 29,742,000      |   |   |   | 27,319,000 |   |   |   | 24,477,000 |   |   |   | 23,362,000 |   |   |   | 21,755,000 |   |
| Amortization      of deferred policy acquisition costs               |   |                    | 5,571,000       |   |   |   | 4,125,000 |   |   |   | 3,031,000 |   |   |   | 4,602,000 |   |   |   | 4,929,000 |   |
| Selling,      general and administrative expenses                    |   |                    | 155,504,000     |   |   |   | 105,728,000 |   |   |   | 90,690,000 |   |   |   | 82,097,000 |   |   |   | 102,926,000 |   |
| Interest      expense                                                |   |                    | 13,271,000      |   |   |   | 6,141,000 |   |   |   | 4,921,000 |   |   |   | 2,174,000 |   |   |   | 3,642,000 |   |
| Cost      of goods and services of the mortuaries and cemeteries     |   |                    |  2,537,000 |   |   |   | 2,322,000 |   |   |   | 2,103,000 |   |   |   | 2,304,000 |   |   |   | 2,328,000 |   |
| Total      benefits and expenses                                     |   |                    | 206,625,000     |   |   |   | 145,635,000 |   |   |   | 125,222,000 |   |   |   | 114,539,000 |   |   |   | 135,580,000 |   |
| Income      before income tax expense                                |   |                    | 3,123,000       |   |   |   | 6,895,000 |   |   |   | 4,728,000 |   |   |   | 2,659,000 |   |   |   | 9,465,000 |   |
| Income      tax expense                                              |   |                    | (858,000        | ) |   |   | (1,771,000 | ) |   |   | (1,240,000 | ) |   |   | (652,000 | ) |   |   | (2,891,000 | ) |
| Minority      interest in (income) loss of subsidiary                |   |                    |  ---       |   |   |   | --- |   |   |   | -- |   |   |   | 115,000 |   |   |   | 22,000 |   |
| Net      earnings                                                    |   | $                       | 2,265,000       |   |   | $ | 5,124,000 |   |   | $ | 3,488,000 |   |   | $ | 2,122,000 |   |   | $ | 6,596,000 |   |
|                                                                 |   |                    |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      earnings per common share(4)                                |   | $                       | 0.30            |   |   | $ | 0.70 |   |   | $ | 0.48 |   |   | $ | 0.29 |   |   | $ | 0.95 |   |
| Weighted      average outstanding common shares(4)                   |   |                    | 7,574,000       |   |   |   | 7,372,000 |   |   |   | 7,297,000 |   |   |   | 7,267,000 |   |   |   | 6,913,000 |   |
| Net      earnings per common share-assuming dilution(4)              |   | $                       | 0.29            |   |   | $ | 0.68 |   |   | $ | 0.48 |   |   | $ | 0.28 |   |   | $ | 0.93 |   |
| Weighted      average outstanding common shares-assuming dilution(4) |   |                    | 7,754,000       |   |   |   | 7,530,000 |   |   |   | 7,329,000 |   |   |   | 7,494,000 |   |   |   | 7,073,000 |   |

----

|                                                  |   | December 31, |        |
|-------------------------------------------------------|--------|--------------|-------------|
|                                                  |   |         |        |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                  |   | 2007 (1)     |        |   | 2006 |   |   | 2005(2) |   |   | 2004(3) |   |   | 2003 |   |
| Assets                                                |   |         |        |   |   |   |   |   |   |   |   |   |   |   |   |
| Investments      and restricted assets                |   | $            | 257,449,000 |   |   | $ | 222,683,000 |   |   | $ | 211,249,000 |   |   | $ | 182,645,000 |   |   | $ | 110,386,000 |   |
| Cash                                                  |   |         | 5,203,000   |   |   |   | 10,377,000 |   |   |   | 16,633,000 |   |   |   | 15,334,000 |   |   |   | 19,704,000 |   |
| Receivables                                           |   |         | 80,445,000  |   |   |   | 74,695,000 |   |   |   | 61,787,000 |   |   |   | 54,013,000 |   |   |   | 120,698,000 |   |
| Other      assets                                     |   |         | 75,066,000  |   |   |   | 69,640,000 |   |   |   | 69,976,000 |   |   |   | 65,471,000 |   |   |   | 63,653,000 |   |
| Total      assets                                     |   | $            | 418,163,000 |   |   | $ | 377,395,000 |   |   | $ | 359,645,000 |   |   | $ | 317,463,000 |   |   | $ | 314,441,000 |   |
|                                                  |   |         |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities                                           |   |         |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Policyholder      benefits                            |   | $            | 301,064,000 |   |   | $ | 272,923,000 |   |   | $ | 263,981,000 |   |   | $ | 226,785,000 |   |   | $ | 220,739,000 |   |
| Notes      & contracts payable                    |   |         | 13,372,000  |   |   |   | 7,671,000 |   |   |   | 10,273,000 |   |   |   | 12,263,000 |   |   |   | 16,909,000 |   |
| Cemetery      & mortuary liabilities              |   |         | 12,643,000  |   |   |   | 11,534,000 |   |   |   | 10,829,000 |   |   |   | 10,762,000 |   |   |   | 10,562,000 |   |
| Other      liabilities                                |   |         | 32,826,000  |   |   |   | 30,018,000 |   |   |   | 26,691,000 |   |   |   | 20,091,000 |   |   |   | 21,146,000 |   |
| Total      liabilities                                |   |         | 359,905,000 |   |   |   | 322,146,000 |   |   |   | 311,774,000 |   |   |   | 269,901,000 |   |   |   | 269,356,000 |   |
|                                                  |   |         |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Minority      interest                                |   |         | ---         |   |   |   | -- |   |   |   | -- |   |   |   | 3,813,000 |   |   |   | 3,957,000 |   |
|                                                  |   |         |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-controlling      interest perpetual care trusts   |   |         | 2,474,000   |   |   |   | 2,278,000 |   |   |   | 2,173,000 |   |   |   | 2,084,000 |   |   |   | 1,953,000 |   |
|                                                  |   |         |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stockholders’      equity                       |   |         | 55,784,000  |   |   |   | 52,971,000 |   |   |   | 45,698,000 |   |   |   | 41,665,000 |   |   |   | 39,175,000 |   |
| Total      liabilities and stockholders’ equity |   | $            | 418,163,000 |   |   | $ | 377,395,000 |   |   | $ | 359,645,000 |   |   | $ | 317,463,000 |   |   | $ | 314,441,000 |   |

|   | (1) | Includes      the purchase of C & J Financial on July 16, 2007 and the purchase      of  Capital Reserve Life Insurance Company on December 17,      2007. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Includes      the purchase of Memorial Insurance Company of America on December 29,      2005. |
|--------|-----|------------------------------------------------------------------------------------------------|

|   | (3) | Includes      the purchase of Paramount Security Life Insurance Company, now Security      National Life Insurance Company of Louisiana, on March 16,      2004. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | Earnings      per share amounts have been adjusted retroactively for the effect of      annual stock dividends. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------|

----

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----

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----

----

|                                       | -200 bps | -100 bps | +100 bps  | +200 bps  |
|--------------------------------------------|----------|----------|-----------|-----------|
|                                       |     |     |      |      |
| Change      in Market Value (in thousands) | $20,907  | $10,141  | $(11,770) | $(20,013) |

----

| Years Ending December 31: |   |
|---------------------------|--------|
| 2008                      |   | $ | 1,404,000 |   |
| 2009                      |   |   | 971,000 |   |
| 2010                      |   |   | 468,000 |   |
| 2011                      |   |   | 229,000 |   |
| 2012                      |   |   | 75,000 |   |
| Thereafter                |   |   | -- |   |
| Total                     |   | $ | 3,147,000 |   |

----

----

SFASNo. 133 , Accounting for Derivative Instruments and Hedging Activities torequire enhanced disclosures concerning the manner in which an entity usesderivatives (and the reasons it uses them),  the manner in whichderivatives and related hedged items are accounted for under 
SFAS No. 133 and interpretations thereof, and the effectsthat derivatives and related hedged items have on an entity's financialposition, financial performance, and cash flows.  SFAS No. 161 iseffective for financial statements of fiscal years and interim periods beginningafter November 15, 2008.  The Company has not yet determined theeffects on our consolidated financial statements, if any, that may result uponthe adoption of SFAS 161.

----

|                                                                                                                                                                                                                          | Page      No.               |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------|
|                                                                                                                                                                                                                          |                        |
| Financial      Statements:                                                                                                                                                                                                    |                        |
|                                                                                                                                                                                                                          |                        |   |
| Report  of      Independent Registered Public Accounting Firm.                                                                                                                                                      | 42      |
|                                                                                                                                                                                                                          |                        |   |
| Consolidated      Balance Sheets, December 31, 2007 and 2006                                                                                                                                                                  | 43      |
|                                                                                                                                                                                                                          |                        |   |
| Consolidated      Statements of Earnings for the Years Ended December 31, 2007, 2006, and      2005                                                                                                                           | 45      |
|                                                                                                                                                                                                                          |                        |   |
| Consolidated      Statements of Stockholders’ Equity, for the Years Ended December 31, 2005,      2006 and 2007                                                                                                         | 46      |
|                                                                                                                                                                                                                          |                        |   |
| Consolidated      Statements of Cash Flows, for the Years Ended December 31, 2007, 2006 and      2005                                                                                                                         | 47      |
|                                                                                                                                                                                                                          |                        |   |
| Notes      to Consolidated Financial Statements                                                                                                                                                                               | 49      |
|                                                                                                                                                                                                                          |                        |   |
| Financial      Statement Schedules:                                                                                                                                                                                           |                        |
|                                                                                                                                                                                                                          |                        |   |
| II        Condensed      Financial Information of Registrant                                                                                                                                                        | 119     |
|                                                                                                                                                                                                                          |                        |   |
| IVReinsurance                                                                                                                                                                                                                 | 125     |
|                                                                                                                                                                                                                          |                        |   |
| V  Valuation      and Qualifying Accounts                                                                                                                                                                           | 126     |
|                                                                                                                                                                                                                          |                        |   |
| 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. |

----

HANSEN,BARNETT & MAXWELL,P.C.

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

----

|                                                                                                                                        |   |              |            |   |   |   |
|---------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|-----------------|--------|--------|--------|
|                                                                                                                                        |   | December      31, |            |
| Assets                                                                                                                                      |   | 2007              |            |   | 2006   |   |
| Investments:                                                                                                                                |   |              |            |   |   |   |
| Fixed      maturity securities, held to maturity, at amortized cost                                                                         |   | $                 | 116,896,016     |   |   | $      | 98,317,519 |   |
| Fixed      maturity securities, available for sale, at estimated fair      value                                                            |   |              | 2,880,920       |   |   |   | 3,417,531 |   |
| Equity      securities, available for sale, at estimated fair value                                                                         |   |              | 5,900,292       |   |   |   | 5,261,695 |   |
| Mortgage      loans on real estate and construction loans, net of allowances for losses      of $1,435,131 and $1,026,576 for 2007 and 2006 |   |              | 92,884,055      |   |   |   | 85,135,011 |   |
| Real      estate, net of accumulated depreciation of $4,340,390 and $4,024,710 for      2007 and 2006                                       |   |              | 7,946,304       |   |   |   | 5,002,853 |   |
| Policy,      student and other loans net of allowance for doubtful accounts of $492,089      and $435,726 for 2007 and 2006                 |   |              | 16,860,874      |   |   |   | 12,846,986 |   |
| Short-term      investments                                                                                                                 |   |              | 5,337,367       |   |   |   | 4,586,828 |   |
| Accrued      investment income                                                                                                              |   |              |  3,032,285 |   |   |   |  2,684,029 |   |
| Total      investments                                                                                                                      |   |              | 251,738,113     |   |   |   | 217,252,452 |   |
| Cash      and cash equivalents                                                                                                              |   |              | 5,203,060       |   |   |   | 10,376,585 |   |
| Mortgage      loans sold to investors                                                                                                       |   |              | 66,700,694      |   |   |   | 59,817,248 |   |
| Receivables,      net                                                                                                                       |   |              | 13,743,682      |   |   |   | 14,878,118 |   |
| Restricted      assets of cemeteries and mortuaries                                                                                         |   |              | 5,711,054       |   |   |   | 5,430,870 |   |
| Cemetery      perpetual care trust investments                                                                                              |   |              | 1,604,600       |   |   |   | 1,306,984 |   |
| Receivable      from reinsurers                                                                                                             |   |              | 746,336         |   |   |   | 700,850 |   |
| Cemetery      land and improvements                                                                                                         |   |              | 9,760,041       |   |   |   | 8,745,424 |   |
| Deferred      policy and pre-need contract acquisition costs                                                                                |   |              | 30,786,229      |   |   |   | 28,395,762 |   |
| Property      and equipment, net                                                                                                            |   |              | 14,828,699      |   |   |   | 14,059,529 |   |
| Value      of business acquired                                                                                                             |   |              | 11,686,080      |   |   |   | 11,882,047 |   |
| Goodwill                                                                                                                                    |   |              | 1,075,039       |   |   |   | 683,191 |   |
| Other                                                                                                                                       |   |              |  4,579,018 |   |   |   | 3,866,123 |   |
| Total      Assets                                                                                                                           |   | $                 | 418,162,645     |   |   | $      | 377,395,183 |   |
|                                                                                                                                        |   |              |            |   |   |   |   |   |

----

|                                                                                                                                                           |   |         |        |   |   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|-------------|--------|--------|--------|
|                                                                                                                                                           |   | December 31, |        |
| Liabilities      and Stockholders' Equity                                                                                                                      |   | 2007         |        |   | 2006   |   |
| Liabilities                                                                                                                                                    |   |         |        |   |   |   |
| Future      life, annuity, and other benefits                                                                                                                  |   | $            | 296,068,767 |   |   | $      | 268,403,765 |   |
| Unearned      premium reserve                                                                                                                                  |   |         | 4,995,664   |   |   |   | 4,519,387 |   |
| Bank      loans payable                                                                                                                                        |   |         | 12,552,666  |   |   |   | 6,923,344 |   |
| Notes      and contracts payable                                                                                                                               |   |         | 818,810     |   |   |   | 747,188 |   |
| Deferred      pre-need cemetery and mortuary contract revenues                                                                                                 |   |         | 12,643,199  |   |   |   | 11,533,798 |   |
| Accounts      payable                                                                                                                                          |   |         | 1,833,188   |   |   |   | 1,820,178 |   |
| Other      liabilities and accrued expenses                                                                                                                    |   |         | 14,812,845  |   |   |   | 11,611,033 |   |
| Income      taxes                                                                                                                                              |   |         | 16,179,596  |   |   |   | 16,587,284 |   |
| Total      liabilities                                                                                                                                         |   |         | 359,904,735 |   |   |   | 322,145,977 |   |
| Commitments      and Contingencies                                                                                                                             |   |         | --          |   |   |   | -- |   |
| Non-Controlling      Interest in Perpetual Care Trusts                                                                                                         |   |         | 2,473,758   |   |   |   | 2,278,510 |   |
| Stockholders’      Equity                                                                                                                                |   |         |        |   |   |   |   |   |
| Common      Stock:                                                                                                                                             |   |         |        |   |   |   |   |   |
| Class      A: common stock - $2.00 par value; 20,000,000 shares authorized; issued      7,885,229 shares in 2007 and 7,533,230 shares in 2006                  |   |         | 15,770,458  |   |   |   | 15,066,460 |   |
| Class      B: non-voting common stock - $1.00 par value; 5,000,000 shares authorized;      none issued or outstanding                                          |   |         | --          |   |   |   | -- |   |
| Class      C: convertible common stock - $0.20 par value; 15,000,000 shares      authorized; issued 8,530,699 shares in 2007 and 7,117,591 shares in      2006 |   |         | 1,706,140   |   |   |   | 1,423,518 |   |
| Additional      paid-in capital                                                                                                                                |   |         | 17,737,172  |   |   |   | 17,064,488 |   |
| Accumulated      other comprehensive income and other items, net of taxes                                                                                      |   |         | 1,596,791   |   |   |   | 1,703,155 |   |
| Retained      earnings                                                                                                                                         |   |         | 21,104,156  |   |   |   | 20,495,063 |   |
| Treasury      stock, at cost - 1,104,484 Class A shares and -0- Class C shares in 2007;      1,195,127 Class A shares and 145,045 Class C shares in2006        |   |         | (2,130,565  | )      |   |   | (2,781,988 | ) |
| Total      stockholders’ equity                                                                                                                          |   |         | 55,784,152  |   |   |   | 52,970,696 |   |
| Total      Liabilities and Stockholders’ Equity                                                                                                          |   | $            | 418,162,645 |   |   | $      | 377,395,183 |   |

----

|                                                                                                    |   | Years Ended December 31, |        |
|---------------------------------------------------------------------------------------------------------|--------|--------------------------|-------------|
|                                                                                                    |   | 2007                     |        |   | 2006 |   |   | 2005 |   |
| Revenues:                                                                                               |   |                     |        |   |   |   |   |   |   |
| Insurance      premiums and other considerations                                                        |   | $                        | 32,262,837  |   |   | $ | 30,776,491 |   |   | $ | 27,170,109 |   |
| Net      investment income                                                                              |   |                     | 31,956,444  |   |   |   | 23,245,631 |   |   |   | 19,386,571 |   |
| Net      mortuary and cemetery sales                                                                    |   |                     | 13,188,655  |   |   |   | 12,122,728 |   |   |   | 10,838,878 |   |
| Realized      gains on investments and other assets                                                     |   |                     | 1,007,574   |   |   |   | 891,304 |   |   |   | 74,246 |   |
| Mortgage      fee income                                                                                |   |                     | 130,472,166 |   |   |   | 85,112,831 |   |   |   | 71,859,272 |   |
| Other                                                                                                   |   |                     | 860,406     |   |   |   | 381,548 |   |   |   | 620,751 |   |
| Total      revenues                                                                                     |   |                     | 209,748,082 |   |   |   | 152,530,533 |   |   |   | 129,949,827 |   |
|                                                                                                    |   |                     |        |   |   |   |   |   |   |   |   |   |
| Benefits      and expenses:                                                                             |   |                     |        |   |   |   |   |   |   |   |   |   |
| Death      benefits                                                                                     |   |                     | 16,274,813  |   |   |   | 15,155,711 |   |   |   | 13,250,080 |   |
| Surrenders      and other policy benefits                                                               |   |                     | 2,078,415   |   |   |   | 1,700,741 |   |   |   | 1,484,284 |   |
| Increase      in future policy benefits                                                                 |   |                     | 11,389,019  |   |   |   | 10,462,384 |   |   |   | 9,742,218 |   |
| Amortization      of deferred policy and pre-need acquisition costs and value of business      acquired |   |                     | 5,570,799   |   |   |   | 4,124,747 |   |   |   | 3,030,734 |   |
| Selling,      general and administrative expenses:                                                      |   |                     |        |   |   |   |   |   |   |   |   |   |
| Commissions                                                                                             |   |                     | 96,957,340  |   |   |   | 63,680,122 |   |   |   | 53,807,368 |   |
| Salaries                                                                                                |   |                     | 23,944,999  |   |   |   | 17,947,902 |   |   |   | 15,716,813 |   |
| Other                                                                                                   |   |                     | 34,601,551  |   |   |   | 24,099,924 |   |   |   | 21,166,024 |   |
| Interest      expense                                                                                   |   |                     | 13,270,871  |   |   |   | 6,141,298 |   |   |   | 4,921,238 |   |
| Cost      of goods and services sold – mortuaries and cemeteries                                  |   |                     | 2,537,244   |   |   |   | 2,322,066 |   |   |   | 2,103,432 |   |
|                                                                                                    |   |                     |        |   |   |   |   |   |   |   |   |   |
| Total      benefits and expenses                                                                        |   |                     | 206,625,051 |   |   |   | 145,634,895 |   |   |   | 125,222,191 |   |
|                                                                                                    |   |                     |        |   |   |   |   |   |   |   |   |   |
| Earnings      before income taxes                                                                       |   |                     | 3,123,031   |   |   |   | 6,895,638 |   |   |   | 4,727,636 |   |
| Income      tax expense                                                                                 |   |                     | (857,635    | ) |   |   | (1,771,188 | ) |   |   | (1,239,756 | ) |
|                                                                                                    |   |                     |        |   |   |   |   |   |   |   |   |   |
| Net      earnings                                                                                       |   | $                        | 2,265,396   |   |   | $ | 5,124,450 |   |   | $ | 3,487,880 |   |
|                                                                                                    |   |                     |        |   |   |   |   |   |   |   |   |   |
| Net      earnings per Class A equivalent common share (1)                                               |   | $                        | 0.30        |   |   | $ | 0.70 |   |   | $ | 0.48 |   |
|                                                                                                    |   |                     |        |   |   |   |   |   |   |   |   |   |
| Net      earnings per Class A equivalent common share -assuming      dilution(1)                        |   | $                        | 0.29        |   |   | $ | 0.68 |   |   | $ | 0.48 |   |
|                                                                                                    |   |                     |        |   |   |   |   |   |   |   |   |   |
| Weighted      average Class A equivalent common shares outstanding (1)                                  |   |                     | 7,573,714   |   |   |   | 7,371,549 |   |   |   | 7,297,146 |   |
|                                                                                                    |   |                     |        |   |   |   |   |   |   |   |   |   |
| Weighted      average Class A equivalent common shares outstanding-assuming dilution      (1)           |   |                     | 7,754,053   |   |   |   | 7,530,136 |   |   |   | 7,329,225 |   |

----

|                                          |   | Class      A Common Stock |       |   | Class      C Common Stock |   |      | Additional      Paid-in Capital |   |   | Accumulated      Other ComprehensiveIncome      (loss), and Other    Items |   |   | Retained      Earnings |      |   | Treasury      Stock |   |       | Total  |   |
|-----------------------------------------------|--------|---------------------------|------------|--------|---------------------------|--------|-----------|---------------------------------|--------|--------|----------------------------------------------------------------------------|--------|--------|------------------------|-----------|--------|---------------------|--------|------------|--------|--------|
| Balance      as of January 1,  2005 |   | $                         | 13,511,740 |   |                      | $      | 1,293,641 |                            |   | $      | 14,922,851                                                                 |   |   | $                      | (11,352   | )      |                | $      | 15,365,259 |   |   | $ | (3,417,299 | ) |   | $ | 41,664,840 |   |
|                                          |   |                      |       |   |                      |   |      |                            |   |   |                                                                       |   |   |                   |      |   |                |   |       |   |   |   |   |   |   |   |   |   |
| Comprehensive      income:                    |   |                      |       |   |                      |   |      |                            |   |   |                                                                       |   |   |                   |      |   |                |   |       |   |   |   |   |   |   |   |   |   |
| Net      earnings                             |   |                      | —    |   |                      |   | —   |                            |   |   | —                                                                    |   |   |                   | —   |   |                |   | 3,487,880  |   |   |   | — |   |   |   | 3,487,880 |   |
| Unrealized      gains                         |   |                      | —    |   |                      |   | —   |                            |   |   | —                                                                    |   |   |                   | 128,999   |   |                |   | —    |   |   |   | — |   |   |   | 128,999 |   |
| Total      comprehensive income               |   |                      | —    |   |                      |   | —   |                            |   |   | —                                                                    |   |   |                   | —   |   |                |   | —    |   |   |   | — |   |   |   | 3,616,879 |   |
| Exercise      of stock options                |   |                      | 6,892      |   |                      |   | —   |                            |   |   | 3,926                                                                      |   |   |                   | —   |   |                |   | (8,084     | )      |   |   | — |   |   |   | 2,734 |   |
| Sale      of Treasury stock                   |   |                      | —    |   |                      |   | —   |                            |   |   | 79,201                                                                     |   |   |                   | —   |   |                |   | —    |   |   |   | 334,764 |   |   |   | 413,965 |   |
| Stock      dividends                          |   |                      | 676,084    |   |                      |   | 64,581    |                            |   |   | 644,366                                                                    |   |   |                   | —   |   |                |   | (1,385,031 | )      |   |   | — |   |   |   | — |   |
| Conversion      Class C to Class A            |   |                      | 2,010      |   |                      |   | (2,010    | )                               |   |   | —                                                                    |   |   |                   | —   |   |                |   | —    |   |   |   | — |   |   |   | — |   |
| Balance      at December 31, 2005             |   |                      | 14,196,726 |   |                      |   | 1,356,212 |                            |   |   | 15,650,344                                                                 |   |   |                   | 117,647   |   |                |   | 17,460,024 |   |   |   | (3,082,535 | ) |   |   | 45,698,418 |   |
|                                          |   |                      |       |   |                      |   |      |                            |   |   |                                                                       |   |   |                   |      |   |                |   |       |   |   |   |   |   |   |   |   |   |
| Comprehensive      income:                    |   |                      |       |   |                      |   |      |                            |   |   |                                                                       |   |   |                   |      |   |                |   |       |   |   |   |   |   |   |   |   |   |
| Net      earnings                             |   |                      | —    |   |                      |   | —   |                            |   |   | —                                                                    |   |   |                   | —   |   |                |   | 5,124,450  |   |   |   | — |   |   |   | 5,124,450 |   |
| Unrealized      gains                         |   |                      | —    |   |                      |   | —   |                            |   |   | —                                                                    |   |   |                   | 1,585,508 |   |                |   | —    |   |   |   | — |   |   |   | 1,585,508 |   |
| Total      comprehensive income               |   |                      | —    |   |                      |   | —   |                            |   |   | —                                                                    |   |   |                   | —   |   |                |   | —    |   |   |   | — |   |   |   | 6,709,958 |   |
| Exercise      of stock options                |   |                      | 149,040    |   |                      |   | —   |                            |   |   | (43,441                                                                    | )      |   |                   | —   |   |                |   | —    |   |   |   | — |   |   |   | 105,599 |   |
| Purchase      of Treasury stock               |   |                      | —    |   |                      |   | —   |                            |   |   | —                                                                    |   |   |                   | —   |   |                |   | —    |   |   |   | (3,901 | ) |   |   | (3,901 | ) |
| Sale      of Treasury stock                   |   |                      | —    |   |                      |   | —   |                            |   |   | 154,154                                                                    |   |   |                   | —   |   |                |   | —    |   |   |   | 304,448 |   |   |   | 458,602 |   |
| Issuance      for compensation                |   |                      | 1,000      |   |                      |   | —   |                            |   |   | 1,020                                                                      |   |   |                   | —   |   |                |   | —    |   |   |   | — |   |   |   | 2,020 |   |
| Stock      dividends                          |   |                      | 719,212    |   |                      |   | 67,788    |                            |   |   | 1,302,411                                                                  |   |   |                   | —   |   |                |   | (2,089,411 | )      |   |   | — |   |   |   | — |   |
| Conversion      Class C to Class A            |   |                      | 482        |   |                      |   | (482      | )                               |   |   | —                                                                    |   |   |                   | —   |   |                |   | —    |   |   |   | — |   |   |   | — |   |
| Balance      at December 31, 2006             |   |                      | 15,066,460 |   |                      |   | 1,423,518 |                            |   |   | 17,064,488                                                                 |   |   |                   | 1,703,155 |   |                |   | 20,495,063 |   |   |   | (2,781,988 | ) |   |   | 52,970,696 |   |
|                                          |   |                      |       |   |                      |   |      |                            |   |   |                                                                       |   |   |                   |      |   |                |   |       |   |   |   |   |   |   |   |   |   |
| Comprehensive      income:                    |   |                      |       |   |                      |   |      |                            |   |   |                                                                       |   |   |                   |      |   |                |   |       |   |   |   |   |   |   |   |   |   |
| Net      earnings                             |   |                      | —    |   |                      |   | —   |                            |   |   | —                                                                    |   |   |                   |      |   |                |   | 2,265,396  |   |   |   | — |   |   |   | 2,265,396 |   |
| Unrealized      gains                         |   |                      | —    |   |                      |   | —   |                            |   |   | —                                                                    |   |   |                   | (106,364  | )      |                |   | —    |   |   |   | — |   |   |   | (106,364 | ) |
| Total      comprehensive income               |   |                      | —    |   |                      |   | —   |                            |   |   | —                                                                    |   |   |                   | —   |   |                |   | —    |   |   |   | — |   |   |   | 2,159,032 |   |
| Exercise      of stock options                |   |                      | (76,974    | )      |                      |   | 231,525   |                            |   |   | (55,261                                                                    | )      |   |                   | —   |   |                |   | (96,289    | )      |   |   | — |   |   |   | 3,001 |   |
| Sale      of Treasury stock                   |   |                      | —    |   |                      |   | —   |                            |   |   | —                                                                    |   |   |                   | —   |   |                |   | —    |   |   |   | 651,423 |   |   |   | 651,423 |   |
| Stock      dividends                          |   |                      | 750,826    |   |                      |   | 81,244    |                            |   |   | 727,944                                                                    |   |   |                   | —   |   |                |   | (1,560,014 | )      |   |   | — |   |   |   | — |   |
|  Conversion      Class C to Class A      |   |                      | 30,146     |   |                      |   | (30,147   | )                               |   |   | 1                                                                          |   |   |                   | —   |   |                |   | —    |   |   |   | — |   |   |   | — |   |
| Balance      at December 31, 2007             |   | $                         | 15,770,458 |   |                      | $      | 1,706,140 |                            |   | $      | 17,737,172                                                                 |   |   | $                      | 1,596,791 |   |                | $      | 21,104,156 |   |   |  $ | (2,130,565 | ) |   | $ | 55,784,152 |   |

----

|                                                                                                    |   | Years Ended December 31 |         |
|---------------------------------------------------------------------------------------------------------|--------|-------------------------|--------------|
|                                                                                                    |   | 2007                    |         |   | 2006 |   |   | 2005 |   |
| Cash      flows from operating activities:                                                              |   |                    |         |   |   |   |   |   |   |
| Net      earnings                                                                                       |   | $                       | 2,265,396    |   |   | $ | 5,124,450 |   |   | $ | 3,487,880 |   |
| Adjustments      to reconcile net earnings to net cash provided by (used in) operating      activities: |   |                    |         |   |   |   |   |   |   |   |   |   |
| Realized      (gains) losses on investments and other assets                                            |   |                    | (1,007,574   | ) |   |   | (891,304 | ) |   |   | (74,246 | ) |
| Depreciation                                                                                            |   |                    | 2,398,330    |   |   |   | 2,023,017 |   |   |   | 2,094,022 |   |
| Provision      for losses on real estate accounts and loans receivable                                  |   |                    | 741,974      |   |   |   | 558,370 |   |   |   | 87,376 |   |
| Amortization      of premiums and discounts                                                             |   |                    | 8,411        |   |   |   | (34,144 | ) |   |   | 36,637 |   |
| Provision      of deferred income taxes                                                                 |   |                    | 481,810      |   |   |   | 1,153,985 |   |   |   | 862,024 |   |
| Policy      and pre-need acquisition costs deferred                                                     |   |                    | (6,974,054   | ) |   |   | (7,313,030 | ) |   |   | (6,764,492 | ) |
| Policy      and pre-need acquisition costs amortized                                                    |   |                    | 4,609,045    |   |   |   | 3,132,647 |   |   |   | 1,933,125 |   |
| Value      of business acquired amortized                                                               |   |                    | 951,639      |   |   |   | 992,100 |   |   |   | 1,097,609 |   |
| Change      in assets and liabilities net of effects from purchases and disposals of      subsidiaries: |   |                    |         |   |   |   |   |   |   |   |   |   |
| Land      and improvements sold to investors                                                            |   |                    | (781,617     | ) |   |   | (247,197 | ) |   |   | 49,537 |   |
| Future      life and other benefits                                                                     |   |                    | 13,131,652   |   |   |   | 13,017,175 |   |   |   | 10,824,347 |   |
| Receivables      for mortgage loans sold                                                                |   |                    | (6,883,446   | ) |   |   | (5,321,587 | ) |   |   | (6,803,081 | ) |
| Other      operating assets and liabilities                                                             |   |                    | 1,067,072    |   |   |   | (520,347 | ) |   |   | 1,771,798 |   |
| Net      cash provided by operating activities                                                          |   |                    | 10,008,638   |   |   |   | 11,674,135 |   |   |   | 8,602,536 |   |
| Cash      flows from investing activities:                                                              |   |                    |         |   |   |   |   |   |   |   |   |   |
| Securities      held to maturity:                                                                       |   |                    |         |   |   |   |   |   |   |   |   |   |
| Purchase      - fixed maturity securities                                                               |   |                    | (2,206,067   | ) |   |   | (14,078,529 | ) |   |   | (5,984,347 | ) |
| Calls      and maturities - fixed maturity securities                                                   |   |                    | 6,630,227    |   |   |   | 4,978,963 |   |   |   | 7,781,126 |   |
| Securities      available for sale:                                                                     |   |                    |         |   |   |   |   |   |   |   |   |   |
| Purchase      - fixed maturity securities                                                               |   |                    | (179,630     | ) |   |   | (173,262 | ) |   |   | (139,383 | ) |
| Sales      - equity securities                                                                          |   |                    | 868,371      |   |   |   | 11,973,825 |   |   |   | 4,183,108 |   |
| Purchases      of short-term investments                                                                |   |                    | (16,946,889  | ) |   |   | (41,342,009 | ) |   |   | (13,700,353 | ) |
| Sales      of short-term investments                                                                    |   |                    | 16,196,350   |   |   |   | 39,966,771 |   |   |   | 15,117,762 |   |
| Purchases      of restricted assets                                                                     |   |                    | (302,114     | ) |   |   | (50,239 | ) |   |   | (57,453 | ) |
| Change      in assets for perpetual care trusts                                                         |   |                    | (276,437     | ) |   |   | (154,491 | ) |   |   | (163,254 | ) |
| Amount      received for perpetual care trusts                                                          |   |                    | 195,248      |   |   |   | 105,260 |   |   |   | 89,500 |   |
| Mortgage,      policy, and other loans made                                                             |   |                    | (114,782,049 | ) |   |   | (90,543,821 | ) |   |   | (76,034,805 | ) |
| Payments      received for mortgage, policy, and other loans                                            |   |                    | 105,790,916  |   |   |   | 76,979,450 |   |   |   | 69,804,347 |   |
| Purchases      of property and equipment                                                                |   |                    | (3,009,279   | ) |   |   | (1,763,708 | ) |   |   | (2,236,732 | ) |
| Disposal      of property and equipment                                                                 |   |                    | 880,818      |   |   |   | (37,756 | ) |   |   | -- |   |
| Cash      received from sale of property and equipment                                                  |   |                    | --           |   |   |   | -- |   |   |   | -- |   |
| Purchases      of real estate                                                                           |   |                    | (4,634,314   | ) |   |   | (2,262,890 | ) |   |   | (5,138,795 | ) |
| Cash      (paid) received for purchase of subsidiaries, net of cash      acquired                       |   |                    | (1,702,762   | ) |   |   | -- |   |   |   | 1,722,238 |   |
| Sale      of real estate                                                                                |   |                    | 1,375,183    |   |   |   | 5,359,781 |   |   |   | 3,898,980 |   |
| Net      cash used in investing activities                                                              |   |                    | (12,102,428  | ) |   |   | (11,042,655 | ) |   |   | (858,061 | ) |

----

|                                                         |   | Years Ended December 31 |        |
|--------------------------------------------------------------|--------|-------------------------|-------------|
|                                                         |   | 2007                    |        |   | 2006 |   |   | 2005 |   |
| Cash      flows from financing activities:                   |   |                    |        |   |   |   |   |   |   |
| Annuity      contract receipts                               |   | $                       | 6,039,988   |   |   | $ | 5,941,594 |   |   | $ | 5,547,795 |   |
| Annuity      contract withdrawals                            |   |                    | (12,961,804 | ) |   |   | (10,817,231 | ) |   |   | (9,655,951 | ) |
| Repayment      of bank loans and notes and contracts payable |   |                    | (47,751,447 | ) |   |   | (2,572,524 | ) |   |   | (2,463,116 | ) |
| Proceeds      from borrowing on notes and contracts          |   |                    | 50,939,105  |   |   |   | -- |   |   |   | 672,439 |   |
| Purchase      of minority shareholder stock of subsidiary    |   |                    | --          |   |   |   | -- |   |   |   | (960,309 | ) |
| Stock      options exercised                                 |   |                    | 3,000       |   |   |   | 105,599 |   |   |   | -- |   |
| Purchase      of treasury stock                              |   |                    | --          |   |   |   | (3,901 | ) |   |   | -- |   |
| Sale      of treasury stock                                  |   |                    | 651,423     |   |   |   | 458,602 |   |   |   | 413,965 |   |
| Net      cash used in financing activities                   |   |                    | (3,079,735  | ) |   |   | (6,887,861 | ) |   |   | (6,445,177 | ) |
| Net      change in cash and cash equivalents                 |   |                    | (5,173,525  | ) |   |   | (6,256,381 | ) |   |   | 1,299,298 |   |
| Cash      and cash equivalents at beginning of year          |   |                    | 10,376,585  |   |   |   | 16,632,966 |   |   |   | 15,333,668 |   |
| Cash      and cash equivalents at end of year                |   | $                       | 5,203,060   |   |   | $ | 10,376,585 |   |   | $ | 16,632,966 |   |

|                                              |   | 2007   |        |   | 2005   |   |
|---------------------------------------------------|--------|--------|-------------|--------|--------|--------|
|                                              |   |   |        |   |   |   |
| Fair      value of assets acquired                |   | $      | (30,597,342 | )      |   | $      | (30,949,802 | ) |
| Fair      value of liabilities assumed            |   |   | 26,546,698  |   |   |   | 32,672,040 |   |
| Notes      Payable and other liabilities incurred |   |   | 2,318,260   |   |   |   |  -- -- |   |
| Cash      received (paid)                         |   | $      | (1,732,384  | )      |   | $      | 1,722,238 |   |

----

----

----

----

----

----

----

----

----

|                                                                                                              |   | Year      Ended December 31, |      |
|-------------------------------------------------------------------------------------------------------------------|--------|------------------------------|-----------|
|                                                                                                              |   | 2005                         |      |
| Net      earnings, as reported                                                                                    |   | $                            | 3,487,880 |   |
| Total      stock-based employee compensation recognized                                                           |   |                         | --        |   |
| Total      stock-based employee compensation expense determined under fair value      based method for all awards |   |                         | (676,920  | ) |
|                                                                                                              |   |                         |      |   |
| Pro      forma net earnings                                                                                       |   | $                            | 2,810,960 |   |
|                                                                                                              |   |                         |      |   |
| Basic      earnings per share, as reported                                                                        |   | $                            | 0.48      |   |
| Diluted      earnings per share as reported                                                                       |   | $                            | 0.48      |   |
| Basic      earnings per share, pro forma                                                                          |   | $                            | 0.39      |   |
| Diluted      earnings per share, pro forma                                                                        |   | $                            | 0.38      |   |

----

----

----

----

|                                         |   | Memorial |       |
|----------------------------------------------|--------|----------|------------|
| Assets:                                      |   |     |       |
| Cash      received                           |   | $        | 1,722,238  |   |
| Value      of business acquired              |   |     | 251,086    |   |
| Investments                                  |   |     | 29,816,841 |   |
| Policy      loans                            |   |     | 34,575     |   |
| Receivables                                  |   |     | 388,374    |   |
| Accrued      investment income               |   |     | 302,923    |   |
| Property      and equipment                  |   |     | 156,003    |   |
| Total      assets acquired                   |   |     | 32,672,040 |   |
|                                         |   |     |       |   |
| Liabilities:                                 |   |     |       |   |
| Future      life, annuity and other benefits |   |     | 30,326,086 |   |
| Other      liabilities                       |   |     | 417,817    |   |
| Deferred      income taxes                   |   |     | 1,928,137  |   |
| Total      liabilities assumed               |   |     | 32,672,040 |   |
|                                         |   |     |       |   |
| Net      assets acquired                     |   | $        | --         |   |

----

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

----

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

|                                                                       |   | For      the Years Ended |        |
|----------------------------------------------------------------------------|--------|--------------------------|-------------|
|                                                                       |   | December      31,        |        |
| (Unaudited)                                                                |   | 2007                     |        |   | 2006 |   |   | 2005 |   |
| Total      revenues                                                        |   | $                        | 213,717,000 |   |   | $ | 159,546,000 |   |   | $ | 133,609,000 |   |
| Net      earnings                                                          |   | $                        | 2,756,000   |   |   | $ | 5,402,000 |   |   | $ | 4,325,000 |   |
| Net      earnings per Class A equivalent common share                      |   | $                        | 0.29        |   |   | $ | 0.73 |   |   | $ | 0.63 |   |
| Net      earnings per Class A equivalent common share assuming    dilution |   | $                        | 0.28        |   |   | $ | 0.72 |   |   | $ | 0.63 |   |

----

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

----

|                                                                        |   |      |       |   | Gross      |   |      | Gross      |   |   | Estimated      |   |
|-----------------------------------------------------------------------------|--------|-----------|------------|--------|------------|--------|-----------|------------|--------|--------|----------------|--------|
|                                                                        |   | Amortized |       |   | Unrealized |   |      | Unrealized |   |   | Fair           |   |
|                                                                        |   | Cost      |       |   | Gains      |   |      | Losses     |   |   | Value          |   |
| December 31,      2007:                                                     |   |      |       |   |       |   |      |       |   |   |           |   |
|                                                                        |   |      |       |   |       |   |      |       |   |   |           |   |
| Equity      securities available for sale:                                  |   |      |       |   |       |   |      |       |   |   |           |   |
|                                                                        |   |      |       |   |       |   |      |       |   |   |           |   |
| Non-redeemable      preferred stock                                         |   | $         | 20,281     |   |       | $      | ---       |       |   | $      | (3,632         | )      |   | $ | 16,649 |   |
|                                                                        |   |      |       |   |       |   |      |       |   |   |           |   |   |   |   |   |
| Common      stock:                                                          |   |      |       |   |       |   |      |       |   |   |           |   |   |   |   |   |
|                                                                        |   |      |       |   |       |   |      |       |   |   |           |   |   |   |   |   |
| Public      utilities                                                       |   |      | 411,992    |   |       |   | 422,865   |       |   |   | (13,627        | )      |   |   | 821,230 |   |
| Banks, trusts and insurance      companies                                  |   |      | 520,683    |   |       |   | 1,032,033 |       |   |   | (21,662        | )      |   |   | 1,531,054 |   |
| Industrial, miscellaneous and all      other                                |   |      | 1,469,936  |   |       |   | 2,549,020 |       |   |   |  (487,597 | )      |   |   | 3,531,359 |   |
|                                                                        |   |      |       |   |       |   |      |       |   |   |           |   |   |   |   |   |
| Total equity securities available for      sale                             |   | $         | 2,422,892  |   |       | $      | 4,003,918 |       |   | $      | (526,518       | )      |   | $ | 5,900,292 |   |
|                                                                        |   |      |       |   |       |   |      |       |   |   |           |   |   |   |   |   |
| Total      securities available for sale carried at estimated fair    value |   | $         | 5,200,877  |   |       | $      | 4,106,853 |       |   | $      | (526,518       | )      |   | $ | 8,781,212 |   |
|                                                                        |   |      |       |   |       |   |      |       |   |   |           |   |   |   |   |   |
| Mortgage loans on real estate and construction      loans:                  |   |      |       |   |       |   |      |       |   |   |           |   |   |   |   |   |
| Residential                                                                 |   | $         | 21,636,722 |   |       | $      | ---       |       |   | $      | (1,435,131)    |   |   | $ | 20,201,591 |   |
| Residential      construction                                               |   |      | 37,843,883 |   |       |   | ---       |       |   |   | ---            |   |   |   | 37,843,883 |   |
| Commercial                                                                  |   |      | 34,838,581 |   |       |   | ---       |       |   |   | ---            |   |   |   | 34,838,581 |   |
| Less:      Allowance for loan losses                                        |   |      | (1,435,131 | )      |       |   | ---       |       |   |   | 1,435,131      |   |   |   | --- |   |
| Total mortgage loans on real estate and      construction loans             |   | $         | 92,884,055 |   |       | $      | ---       |       |   | $      | ---            |   |   | $ | 92,884,055 |   |
|                                                                        |   |      |       |   |       |   |      |       |   |   |           |   |   |   |   |   |
| Real      estate – net of depreciation                                |   | $         | 7,946,304  |   |       |   |      |       |   |   |           |   |   |   |   |   |
|                                                                        |   |      |       |   |       |   |      |       |   |   |           |   |   |   |   |   |
| Policy,      student and other loans                                        |   | $         | 16,860,874 |   |       |   |      |       |   |   |           |   |   |   |   |   |
|                                                                        |   |      |       |   |       |   |      |       |   |   |           |   |   |   |   |   |
| Short-term      investments                                                 |   | $         | 5,337,367  |   |       |   |      |       |   |   |           |   |   |   |   |   |

----

|                                                                                      |   |      |       |   | Gross      |   |      | Gross      |   |   | Estimated  |   |
|-------------------------------------------------------------------------------------------|--------|-----------|------------|--------|------------|--------|-----------|------------|--------|--------|------------|--------|
|                                                                                      |   | Amortized |       |   | Unrealized |   |      | Unrealized |   |   | Fair       |   |
|                                                                                      |   | Cost      |       |   | Gains      |   |      | Losses     |   |   | Value      |   |
| December 31,      2006:                                                                   |   |      |       |   |       |   |      |       |   |   |       |   |
| Fixed      maturity securities held to maturity carried at amortized      cost:           |   |      |       |   |       |   |      |       |   |   |       |   |
| Bonds:                                                                                    |   |      |       |   |       |   |      |       |   |   |       |   |
| U.S.      Treasury securities and obligations of U.S. Government      agencies            |   | $         | 14,237,522 |   |       | $      | 105,720   |       |   | $      | (287,625   | )      |   | $ | 14,055,617 |   |
|                                                                                      |   |      |       |   |       |   |      |       |   |   |       |   |   |   |   |   |
| Obligations      of states and political subdivisions                                     |   |      | 1,189,165  |   |       |   | 51,099    |       |   |   | (4,361     | )      |   |   | 1,235,903 |   |
|                                                                                      |   |      |       |   |       |   |      |       |   |   |       |   |   |   |   |   |
| Corporate      securities including public utilities                                      |   |      | 72,755,683 |   |       |   | 1,036,087 |       |   |   | (539,122   | )      |   |   | 73,252,648 |   |
|                                                                                      |   |      |       |   |       |   |      |       |   |   |       |   |   |   |   |   |
| Mortgage-backed      securities                                                           |   |      | 9,511,196  |   |       |   | 59,004    |       |   |   | (331,484   | )      |   |   | 9,238,716 |   |
|                                                                                      |   |      |       |   |       |   |      |       |   |   |       |   |   |   |   |   |
| Redeemable      preferred stock                                                           |   |      | 623,953    |   |       |   | 16,240    |       |   |   | (500       | )      |   |   | 639,693 |   |
|                                                                                      |   |      |       |   |       |   |      |       |   |   |       |   |   |   |   |   |
| Total      fixed maturity securities held to maturity                                     |   | $         | 98,317,519 |   |       | $      | 1,268,150 |       |   | $      | (1,163,092 | )      |   | $ | 98,422,577 |   |
|                                                                                      |   |      |       |   |       |   |      |       |   |   |       |   |   |   |   |   |
| Securities      available for sale carried at estimated fair value:                       |   |      |       |   |       |   |      |       |   |   |       |   |   |   |   |   |
| Fixed      maturity securities available for sale:                                        |   |      |       |   |       |   |      |       |   |   |       |   |   |   |   |   |
| U.S.      Treasury securities and  obligations of U.S. Government      agencies |   | $         | 597,937    |   |       | $      | 19,365    |       |   | $      | --         |   |   | $ | 617,302 |   |
|                                                                                      |   |      |       |   |       |   |      |       |   |   |       |   |   |   |   |   |
| Corporate      securities including public utilities                                      |   |      | 2,713,641  |   |       |   | 86,588    |       |   |   | --         |   |   |   | 2,800,229 |   |
|                                                                                      |   |      |       |   |       |   |      |       |   |   |       |   |   |   |   |   |
| Total      fixed maturity securities  available for sale                        |   | $         | 3,311,578  |   |       | $      | 105,953   |       |   | $      | --         |   |   | $ | 3,417,531 |   |

----

|                                                                        |   |      |       |   | Gross      |   |      | Gross      |   |   | Estimated   |   |
|-----------------------------------------------------------------------------|--------|-----------|------------|--------|------------|--------|-----------|------------|--------|--------|-------------|--------|
|                                                                        |   | Amortized |       |   | Unrealized |   |      | Unrealized |   |   | Fair        |   |
|                                                                        |   | Cost      |       |   | Gains      |   |      | Losses     |   |   | Value       |   |
| December 31,      2006:                                                     |   |      |       |   |       |   |      |       |   |   |        |   |
|                                                                        |   |      |       |   |       |   |      |       |   |   |        |   |
| Equity      securities available for sale:                                  |   |      |       |   |       |   |      |       |   |   |        |   |
|                                                                        |   |      |       |   |       |   |      |       |   |   |        |   |
| Non-redeemable      preferred stock                                         |   | $         | 20,281     |   |       | $      | -----     |       |   | $      | (2,719      | )      |   |  $ | 17,562 |   |
|                                                                        |   |      |       |   |       |   |      |       |   |   |        |   |   |   |   |   |
| Common      stock:                                                          |   |      |       |   |       |   |      |       |   |   |        |   |   |   |   |   |
|                                                                        |   |      |       |   |       |   |      |       |   |   |        |   |   |   |   |   |
| Public      utilities                                                       |   |      | 411,999    |   |       |   | 391,020   |       |   |   | (10,557     | )      |   |   | 792,462 |   |
| Banks, trusts and insurance      companies                                  |   |      | 559,683    |   |       |   | 909,209   |       |   |   | (21,265     | )      |   |   | 1,447,627 |   |
| Industrial, miscellaneous and all      other                                |   |      | 1,173,702  |   |       |   | 2,265,431 |       |   |   | (435,089    | )      |   |   | 3,004,044 |   |
|                                                                        |   |      |       |   |       |   |      |       |   |   |        |   |   |   |   |   |
| Total equity securities available for      sale                             |   | $         | 2,165,665  |   |       | $      | 3,565,660 |       |   | $      | (469,630    | )      |   | $ | 5,261,695 |   |
|                                                                        |   |      |       |   |       |   |      |       |   |   |        |   |   |   |   |   |
| Total      securities available for sale carried at estimated fair    value |   | $         | 5,477,243  |   |       | $      | 3,671,613 |       |   | $      | (469,630    | )      |   | $ | 8,679,226 |   |
|                                                                        |   |      |       |   |       |   |      |       |   |   |        |   |   |   |   |   |
| Mortgage loans on real estate and construction      loans:                  |   |      |       |   |       |   |      |       |   |   |        |   |   |   |   |   |
| Residential                                                                 |   | $         | 15,992,983 |   |       | $      | ----      |       |   | $      | (1,026,576) |   |   | $ | 14,966,407 |   |
| Residential      construction                                               |   |      | 25,465,382 |   |       |   | ----      |       |   |   | ----        |   |   |   | 25,465,382 |   |
| Commercial                                                                  |   |      | 44,703,222 |   |       |   | ----      |       |   |   | ----        |   |   |   | 44,703,222 |   |
| Less:      Allowance for loan losses                                        |   |      | (1,026,576 | )      |       |   | ---       |       |   |   | 1,026,576   |   |   |   | --- |   |
|                                                                        |   |      |       |   |       |   |      |       |   |   |        |   |   |   |   |   |
| Total mortgage loans on real estate and      construction loans             |   | $         | 85,135,011 |   |       | $      | ----      |       |   | $      | ----        |   |   | $ | 85,135,011 |   |
|                                                                        |   |      |       |   |       |   |      |       |   |   |        |   |   |   |   |   |
| Real      estate, net of depreciation                                       |   | $         | 5,002,853  |   |       |   |      |       |   |   |        |   |   |   |   |   |
|                                                                        |   |      |       |   |       |   |      |       |   |   |        |   |   |   |   |   |
| Policy,      student and other loans                                        |   | $         | 12,846,986 |   |       |   |      |       |   |   |        |   |   |   |   |   |
|                                                                        |   |      |       |   |       |   |      |       |   |   |        |   |   |   |   |   |
| Short-term      investments                                                 |   | $         | 4,586,828  |   |       |   |      |       |   |   |        |   |   |   |   |   |

----

|                                |   | Amortized |        |   | Estimated      Fair |   |
|-------------------------------------|--------|-----------|-------------|--------|---------------------|--------|
|                                |   | Cost      |        |   | Value               |   |
| Held      to Maturity:              |   |      |        |   |                |   |
| Due      in 2008                    |   | $         | 2,926,829   |   |                | $      | 2,865,709 |   |
| Due      in 2009 through 2012       |   |      | 8,625,365   |   |                |   | 8,609,382 |   |
| Due      in 2013 through 2017       |   |      | 26,452,256  |   |                |   | 26,211,427 |   |
| Due      after 2017                 |   |      | 68,467,656  |   |                |   | 66,934,869 |   |
| Mortgage-backed      securities     |   |      | 8,917,307   |   |                |   | 8,498,997 |   |
| Redeemable      preferred stock     |   |      | 1,506,603   |   |                |   | 1,356,140 |   |
| Total      held to maturity         |   | $         | 116,896,016 |   |                | $      | 114,476,524 |   |
|                                |   |      |        |   |                |   |   |   |
|                                |   | Amortized |        |   | Estimated      Fair |   |
|                                |   | Cost      |        |   | Value               |   |
| Available      for Sale:            |   |      |        |   |                |   |   |   |
| Due      in 2008                    |   | $         | 1,601,744   |   |                | $      | 1,616,772 |   |
| Due      in 2009 through 2012       |   |      | 1,078,110   |   |                |   | 1,144,421 |   |
| Due      in 2013 through 2017       |   |      | -           |   |                |   | - |   |
| Due      after 2017                 |   |      | 98,131      |   |                |   | 119,727 |   |
| Non-redeemable      preferred stock |   |      | 20,281      |   |                |   | 16,649 |   |
| Common      stock                   |   |      | 2,402,611   |   |                |   | 5,883,643 |   |
| Total      available for sale       |   | $         | 5,200,877   |   |                | $      | 8,781,212 |   |

----

|                                             |   | 2007   |      |   | 2006   |   |           | 2005   |   |
|--------------------------------------------------|--------|--------|-----------|--------|--------|--------|----------------|--------|--------|
| Fixed      maturity securities held to maturity: |   |   |      |   |   |   |           |   |   |
| Gross      realized gains                        |   | $      | 94,984    |   |   | $      | 1,282          |   |   | $ | 2,593 |   |
| Gross      realized losses                       |   |   | (27,065   | )      |   |   | (28,439        | )      |   |   | -- |   |
|                                             |   |   |      |   |   |   |           |   |   |   |   |   |
| Securities      available for sale:              |   |   |      |   |   |   |           |   |   |   |   |   |
| Gross      realized gains                        |   |   | 175,990   |   |   |   | 106,252        |   |   |   | 56,651 |   |
| Gross      realized losses                       |   |   | (860      | )      |   |   | (12,996        | )      |   |   | (561 | ) |
|                                             |   |   |      |   |   |   |           |   |   |   |   |   |
| Other      assets                                |   |   | 764,525   |   |   |   |   825,205 |   |   |   | 15,563 |   |
| Total                                            |   | $      | 1,007,574 |   |   | $      | 891,304        |   |   | $ | 74,246 |   |

|                                                                                    |   | 2007   |             |   | 2006   |   |       | 2005   |   |
|-----------------------------------------------------------------------------------------|--------|--------|------------------|--------|--------|--------|------------|--------|--------|
| Fixed      maturity securities                                                          |   | $      | 6,045,141        |   |   | $      | 5,893,909  |   |   | $ | 4,602,518 |   |
| Equity      securities                                                                  |   |   | 161,850          |   |   |   | 132,521    |   |   |   | 84,611 |   |
| Mortgage      loans on real estate                                                      |   |   | 6,759,943        |   |   |   | 6,884,991  |   |   |   | 5,267,027 |   |
| Real      estate                                                                        |   |   | 1,273,652        |   |   |   | 1,159,572  |   |   |   | 1,636,413 |   |
| Policy,      student and other loans                                                    |   |   | 707,068          |   |   |   | 713,798    |   |   |   | 674,826 |   |
| Short-term      investments, principally gains on sale of mortgage loans and      other |   |   | 18,898,925       |   |   |   | 10,409,719 |   |   |   | 8,642,669 |   |
| Gross      investment income                                                            |   |   | 33,846,579       |   |   |   | 25,194,510 |   |   |   | 20,908,064 |   |
| Investment      expenses                                                                |   |   |  (1,890,135 | )      |   |   | (1,948,879 | )      |   |   | (1,521,493 | ) |
| Net      investment income                                                              |   | $      | 31,956,444       |   |   | $      | 23,245,631 |   |   | $ | 19,386,571 |   |

----

|                                             |   | 2007   |       |   | 2006   |   |
|--------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Trade      contracts                             |   | $      | 8,870,303  |   |   | $      | 8,114,563 |   |
| Advances      receivables from sales agents      |   |   | 2,463,799  |   |   |   | 2,146,507 |   |
| Contract      for sale of Southern Security Life |   |   | -          |   |   |   | 4,365,887 |   |
| Held      in Escrow – Capital Reserve Life |   |   | 2,100,000  |   |   |   | - |   |
| Other                                            |   |   | 1,602,765  |   |   |   | 1,117,553 |   |
| Total      receivables                           |   |   | 15,036,867 |   |   |   | 15,744,510 |   |
| Allowance      for doubtful accounts             |   |   | (1,293,185 | )      |   |   | (866,392 | ) |
| Net      receivables                             |   | $      | 13,743,682 |   |   | $      | 14,878,118 |   |

----

|                                         |   | 2007   |       |   | 2006   |   |       | 2005   |   |
|----------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
| Balance      at beginning of year            |   | $      | 11,882,047 |   |   | $      | 12,663,221 |   |   | $ | 14,053,497 |   |
| Value      of  business acquired   |   |   | 765,787    |   |   |   | 210,926    |   |   |   | (292,667 | ) |
|                                         |   |   |       |   |   |   |       |   |   |   |   |   |
| Imputed      interest at 7%                  |   |   | 824,502    |   |   |   | 851,702    |   |   |   | 935,085 |   |
| Amortization                                 |   |   | (1,786,256 | )      |   |   | (1,843,802 | )      |   |   | (2,032,694 | ) |
| Net      amortization charged      to income |   |   | (961,754   | )      |   |   | (992,100   | )      |   |   | (1,097,609 | ) |
| Balance      at end of year                  |   | $      | 11,686,080 |   |   | $      | 11,882,047 |   |   | $ | 12,663,221 |   |

|                               |   | December 31, |        |
|------------------------------------|--------|--------------|-------------|
|                               |   | 2007         |        |   | 2006 |   |
| Land      and buildings            |   | $            | 17,232,624  |   |   | $ | 17,040,687 |   |
| Furniture      and equipment       |   |         | 14,743,513  |   |   |   | 12,024,948 |   |
|                               |   |         | 31,976,137  |   |   |   | 29,065,635 |   |
| Less      accumulated depreciation |   |         | (17,147,438 | ) |   |   | (15,006,106 | ) |
|                               |   |         |        |   |   |   |   |   |
| Total                              |   | $            | 14,828,699  |   |   | $ | 14,059,529 |   |

|                                                                                                                                                                                                                              |   | December 31, |      |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|-----------|
|                                                                                                                                                                                                                              |   | 2007         |      |   | 2006 |   |
| 6%      note payable in monthly installments of $5,693 including principal and      interest, collateralized by real property, with a book value of      approximately $776,000, due September 2010.                              |   | $            | 534,311   |   |   | $ | 564,254 |   |
|                                                                                                                                                                                                                              |   |         |      |   |   |   |   |   |
| 6.34%      note payable in monthly installments of $13,556      including  principal and interest, collateralized by real      property  with a book value of approximately $629,000, due      November 2017. |   |         | 1,322,676 |   |   |   | 1,379,158 |   |

----

|                                                                                                                                                                                                                                                                  |   | December 31, |       |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|------------|
|                                                                                                                                                                                                                                                                  |   | 2007         |       |   | 2006 |   |
| Bank      prime rate less 1.35% (6.90% at December 31, 2006) note payable in monthly      installments of $2,736 including principal and interest, collateralized by      15,000 shares of Security National Life Insurance Company stock, paid in      full in 2007. |   |         | --         |   |   |   | 4,827 |   |
|                                                                                                                                                                                                                                                                  |   |         |       |   |   |   |   |   |
| 5.87%      note payable with interest and monthly principal payments of $134,000,      collateralized by 15,000 shares of Security National Life Insurance      Company Stock, due January 2010.                                                                      |   |         | 3,129,896  |   |   |   | 4,569,116 |   |
|                                                                                                                                                                                                                                                                  |   |         |       |   |   |   |   |   |
| Bank      prime rate less .5% (6.75% at December 31, 2007) revolving line of credit      of $3,750,000, accrued interest paid monthly, unpaid balance due June      2008                                                                                              |   |         | 500,000    |   |   |   | 250,000 |   |
|                                                                                                                                                                                                                                                                  |   |         |       |   |   |   |   |   |
| One      year LIBOR  rate (6.95% at December 31, 2007) revolving line of      credit of $40,000,000 collateralized by commercial and residential loans,      accrued interest paid monthly, unpaid balance due June2008                                     |   |         | 6,500,000  |   |   |   | -- |   |
|                                                                                                                                                                                                                                                                  |   |         |       |   |   |   |   |   |
| Mark      to market of interest rate swaps (discussed below)    adjustment                                                                                                                                                                                            |   |         | 26,941     |   |   |   | (133,080 | ) |
|                                                                                                                                                                                                                                                                  |   |         |       |   |   |   |   |   |
| Other      collateralized bank loans payable                                                                                                                                                                                                                          |   |         | 538,842    |   |   |   | 289,069 |   |
| Total      bank loans                                                                                                                                                                                                                                                 |   |         | 12,552,666 |   |   |   | 6,923,344 |   |
|                                                                                                                                                                                                                                                                  |   |         |       |   |   |   |   |   |
| Less      current installments                                                                                                                                                                                                                                        |   |         | 8,842,885  |   |   |   | 3,118,842 |   |
| Bank      loans, excluding current installments                                                                                                                                                                                                                       |   | $            | 3,709,781  |   |   | $ | 3,804,502 |   |

| Weighted      average variable interest rate of the hedged bank loans (prime less      .5%) |   |   | 6.75   | %      |
|---------------------------------------------------------------------------------------------|--------|--------|--------|--------|
| Weighted      average fixed interest rate of the swaps                                      |   |   | 6.18   | %      |
| Market      value of the swaps- potential unrealized gain position                          |   | $      | 26,941 |   |

----

|                                                                                                                                                                                                                                                                                   |   | December 31, |          |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------------|
|                                                                                                                                                                                                                                                                                   |   | 2007         |          |   | 2006 |   |
| Unsecured      note payable due to former stockholders of  Deseret      Memorial,  Inc. resulting from the acquisition of such entity.      Amount represents the present value, discounted at 8%, of monthly annuity      payments of $5,900, due September 2011. |   | $            | 222,538       |   |   | $ | 279,853 |   |
|                                                                                                                                                                                                                                                                                   |   |         |          |   |   |   |   |   |
| 9%      note payable in monthly installments of $10,000 including principal and      interest, collateralized by real property, with a book value of      approximately $2,908,000, due July 2008.                                                                                     |   |         | 82,006        |   |   |   | 209,322 |   |
|                                                                                                                                                                                                                                                                                   |   |         |          |   |   |   |   |   |
| 5%      note payable to a former owner of C & J Financial due in monthly      installments of $16,737 including principal and interest, due July      2009.                                                                                                                        |   |         | 305,129       |   |   |   | -- |   |
|                                                                                                                                                                                                                                                                                   |   |         |          |   |   |   |   |   |
| Other      notes payable                                                                                                                                                                                                                                                               |   |         |  209,137 |   |   |   |  258,013 |   |
| Total      notes and contracts payable                                                                                                                                                                                                                                                 |   |         | 818,810       |   |   |   | 747,188 |   |
| Less      current installments                                                                                                                                                                                                                                                         |   |         | 344,462       |   |   |   | 202,964 |   |
|                                                                                                                                                                                                                                                                                   |   |         |          |   |   |   |   |   |
| Notes      and contracts, excluding current  installments                                                                                                                                                                                                                    |   | $            | 474,348       |   |   | $ | 544,224 |   |

| 2008       |   | $      | 9,187,347  |   |
|------------|--------|--------|------------|--------|
| 2009       |   |   | 2,094,408  |   |
| 2010       |   |   | 776,223    |   |
| 2011       |   |   | 263,501    |   |
| 2012       |   |   | 180,379    |   |
| Thereafter |   |   | 869,618    |   |
| Total      |   | $      | 13,371,476 |   |

----

|                                                                                                                  |   | December 31 |      |
|-----------------------------------------------------------------------------------------------------------------------|--------|-------------|-----------|
|                                                                                                                  |   | 2007        |      |   | 2006 |   |
| Trust      investments, at market value                                                                               |   | $           | 1,604,600 |   |   | $ | 1,306,984 |   |
| Note      receivables from Cottonwood Mortuary and  Singing Hills Cemetery      eliminated in consolidation |   |        | 1,140,702 |   |   |   | 1,158,863 |   |
| Other                                                                                                                 |   |        | (271,544  | ) |   |   | (187,337 | ) |
| Non-controlling      interest                                                                                         |   | $           | 2,473,758 |   |   | $ | 2,278,510 |   |

|                                                             |   | December 31, |      |
|------------------------------------------------------------------|--------|--------------|-----------|
|                                                             |   | 2007         |      |   | 2006 |   |
| Cash      and cash equivalents                                   |   | $            | 843,355   |   |   | $ | 673,262 |   |
| Mutual      funds                                                |   |         | 301,223   |   |   |   | 332,960 |   |
| Fixed      maturity securities                                   |   |         | 8,775     |   |   |   | 8,775 |   |
| Equity      securities                                           |   |         | 77,638    |   |   |   | 77,778 |   |
| Participation      in mortgage loans with Security National Life |   |         | 4,480,063 |   |   |   | 4,338,095 |   |
| Total                                                            |   | $            | 5,711,054 |   |   | $ | 5,430,870 |   |

|     |   | December 31, |       |
|----------|--------|--------------|------------|
|     |   | 2007         |       |   | 2006 |   |
| Current  |   | $            | 380,171    |   |   | $ | 690,171 |   |
| Deferred |   |         | 15,799,425 |   |   |   | 15,897,113 |   |
| Total    |   | $            | 16,179,596 |   |   | $ | 16,587,284 |   |

----

|                                   |   | 2007   |       |   | 2006   |   |
|----------------------------------------|--------|--------|------------|--------|--------|--------|
| Assets                                 |   |   |       |   |   |   |
| Future      policy benefits            |   | $      | (4,417,044 | )      |   | $      | (3,667,170 | ) |
| Unearned      premium                  |   |   | (1,848,396 | )      |   |   | (1,672,173 | ) |
| Other                                  |   |   | (1,684,564 | )      |   |   | (434,239 | ) |
| Less:      Valuation allowance         |   |   | 5,113,793  |   |   |   | 4,818,494 |   |
| Total      deferred tax assets         |   |   | (2,836,211 | )      |   |   | (955,088 | ) |
|                                   |   |   |       |   |   |   |   |   |
| Liabilities                            |   |   |       |   |   |   |   |   |
| Deferred      policy acquisition costs |   |   | 8,462,764  |   |   |   | 7,374,960 |   |
| Value      of business acquired        |   |   | 4,269,546  |   |   |   | 4,338,358 |   |
| Installment      sales                 |   |   | 2,773,683  |   |   |   | 2,232,103 |   |
| Trusts                                 |   |   | 1,579,181  |   |   |   | 1,257,376 |   |
| Tax      on unrealized appreciation    |   |   | 1,550,462  |   |   |   | 1,649,404 |   |
| Total      deferred tax liabilities    |   |   | 18,635,636 |   |   |   | 16,852,201 |   |
| Net      deferred tax liability        |   | $      | 15,799,425 |   |   | $      | 15,897,113 |   |

|     |   | 2007   |          |   | 2006   |   |      | 2005   |   |
|----------|--------|--------|---------------|--------|--------|--------|-----------|--------|--------|
| Current  |   | $      | 375,825       |   |   | $      | 617,203   |   |   | $ | 377,732 |   |
| Deferred |   |   |  481,810 |   |   |   | 1,153,985 |   |   |   |  862,024 |   |
| Total    |   | $      | 857,635       |   |   | $      | 1,771,188 |   |   | $ | 1,239,756 |   |

|                                                           |   | 2007   |      |   | 2006   |   |      | 2005   |   |
|----------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|
| Computed      expense at statutory rate                        |   | $      | 1,061,831 |   |   | $      | 2,344,517 |   |   | $ | 1,607,396 |   |
| Special      deductions allowed small life insurance companies |   |   | (330,804  | )      |   |   | (624,438  | )      |   |   | (399,820 | ) |
| Dividends      received deduction                              |   |   | --        |   |   |   | (2,040    | )      |   |   | (5,780 | ) |
| Other,      net                                                |   |   | 126,608   |   |   |   | 53,149    |   |   |   | 37,960 |   |
| Tax      expense                                               |   | $      | 857,635   |   |   | $      | 1,771,188 |   |   | $ | 1,239,756 |   |

----

----

| Years      Ending |   |   |      |
|-------------------|--------|--------|-----------|
| December      31: |   |   |      |
| 2008              |   | $      | 1,404,000 |   |
| 2009              |   |   | 971,000   |   |
| 2010              |   |   | 468,000   |   |
| 2011              |   |   | 229,000   |   |
| 2012              |   |   | 75,000    |   |
| Total             |   | $      | 3,147,000 |   |

----

----

----

----

----

|                                    |   | Class A |      |   | Class C |   |
|-----------------------------------------|--------|---------|-----------|--------|---------|--------|
| Balance      at December 31, 2004       |   |    | 6,755,870 |   |    |   | 6,468,199 |   |
|                                    |   |    |      |   |    |   |   |   |
| New      shares issued for compensation |   |    | 896       |   |    |   | -- |   |
| Exercise      of stock options          |   |    | 2,550     |   |    |   | -- |   |
| Stock      Dividends                    |   |    | 338,042   |   |    |   | 322,908 |   |
| Conversion      of Class C to Class A   |   |    | 1,005     |   |    |   | (10,047 | ) |
| Balance      at December 31, 2005       |   |    | 7,098,363 |   |    |   | 6,781,060 |   |
|                                    |   |    |      |   |    |   |   |   |
| New      shares issued for compensation |   |    | 500       |   |    |   | -- |   |
| Exercise      of stock options          |   |    | 74,520    |   |    |   | -- |   |
| Stock      Dividends                    |   |    | 359,606   |   |    |   | 338,940 |   |
| Conversion      of Class C to Class A   |   |    | 241       |   |    |   | (2,409 | ) |
| Balance      at December 31, 2006       |   |    | 7,533,230 |   |    |   | 7,117,591 |   |
|                                    |   |    |      |   |    |   |   |   |
| Exercise      of stock options          |   |    | (38,487   | )      |    |   | 1,157,626 |   |
| Stock      Dividends                    |   |    | 375,413   |   |    |   | 406,217 |   |
| Conversion      of Class C to Class A   |   |    | 15,073    |   |    |   | (150,735 | ) |
|                                    |   |    |      |   |    |   |   |   |
| Balance      at December 31, 2007       |   |    | 7,885,229 |   |    |   | 8,530,699 |   |
|                                    |   |    |      |   |    |   |   |   |

----

|                                                                                                                                |   | 2007   |      |   | 2006   |   |      | 2005   |   |
|-------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|
| Numerator:                                                                                                                          |   |   |      |   |   |   |      |   |   |
| Net      income                                                                                                                     |   | $      | 2,265,396 |   |   | $      | 5,124,450 |   |   | $ | 3,487,880 |   |
|                                                                                                                                |   |   |      |   |   |   |      |   |   |   |   |   |
| Denominator:                                                                                                                        |   |   |      |   |   |   |      |   |   |   |   |   |
| Denominator      for basic earnings per share-weighted-average shares                                                               |   |   | 7,573,714 |   |   |   | 7,371,549 |   |   |   | 7,297,146 |   |
|                                                                                                                                |   |   |      |   |   |   |      |   |   |   |   |   |
| Effect      of dilutive securities:                                                                                                 |   |   |      |   |   |   |      |   |   |   |   |   |
| Employee      stock options                                                                                                         |   |   | 180,339   |   |   |   | 157,220   |   |   |   | 31,479 |   |
| Stock      appreciation rights                                                                                                      |   |   | ----      |   |   |   | 1,367     |   |   |   | 600 |   |
| Dilutive      potential common shares                                                                                               |   |   | 180,339   |   |   |   | 158,587   |   |   |   | 32,079 |   |
|                                                                                                                                |   |   |      |   |   |   |      |   |   |   |   |   |
| Denominator      for diluted earnings per  share-adjusted      weighted-average  shares and assumed conversions |   |   | 7,754,053 |   |   |   | 7,530,136 |   |   |   | 7,329,225 |   |
|                                                                                                                                |   |   |      |   |   |   |      |   |   |   |   |   |
| Basic      earnings per share                                                                                                       |   | $      | 0.30      |   |   | $      | 0.70      |   |   | $ | 0.48 |   |
| Diluted      earnings per share                                                                                                     |   | $      | 0.29      |   |   | $      | 0.68      |   |   | $ | 0.48 |   |

----

|                                                                                    |   | Number      ofClass A Shares |   |   | Option Price |   |
|-----------------------------------------------------------------------------------------|--------|------------------------------|--------|--------|--------------|--------|
| Outstanding      at December 31, 2004                                                   |   |                         | 3,323  |   |         | $      | 3.05 |   |
|                                                                                    |   |                         |   |   |         |   |   |   |
| Adjustment      for the effect of stock dividends                                       |   |                         | 166    |   |         |   |   |   |
|                                                                                    |   |                         |   |   |         |   |   |   |
| Outstanding      at December 31, 2005                                                   |   |                         | 3,489  |   |         | $      | 2.90 |   |
|                                                                                    |   |                         |   |   |         |   |   |   |
| Adjustment      for the effect of stock dividends                                       |   |                         | 175    |   |         |   |   |   |
|                                                                                    |   |                         |   |   |         |   |   |   |
| Outstanding      at December 31, 2006                                                   |   |                         | 3,664  |   |         | $      | 2.76 |   |
|                                                                                    |   |                         |   |   |         |   |   |   |
| Cancelled                                                                               |   |                         | (3,664 | )      |         |   |   |   |
|                                                                                    |   |                         |   |   |         |   |   |   |
| Outstanding      at December 31, 2007                                                   |   |                         | --     |   |         |   | -- |   |
|                                                                                    |   |                         |   |   |         |   |   |   |
| Exercisable      at end of year                                                         |   |                         | --     |   |         |   |   |   |
| Available      options for future grant 1987 Stock Incentive Plan                       |   |                         | --     |   |         |   |   |   |
|                                                                                    |   |                         |   |   |         |   |   |   |
| Weighted      average contractual term of options outstanding at December 31,      2007 |   | 0      years                 |   |   |         |   |   |
|                                                                                    |   |                         |   |   |         |   |   |   |
| Aggregated      intrinsic value of options outstanding at December 31,2007              |   | $                            | --     |   |         |   |   |   |

----

|                                              |   | Number of Class A Shares |     |   | Option Price |               |
|---------------------------------------------------|--------|--------------------------|----------|--------|--------------|--------------------|
| Outstanding      at December, 2004                |   |                     | 339,692  |   |         | $1.97      - $5.35 |   |
| Adjustment      for the effect of stock dividends |   |                     | 16,664   |   |         |               |   |   |
| Exercised                                         |   |                     | (2,980   | )      |         |               |   |   |
| Cancelled                                         |   |                     | (3,421   | )      |         |               |   |   |
|                                              |   |                     |     |   |         |               |   |   |
| Outstanding      at December 31, 2005             |   |                     | 349,955  |   |         | $1.88      - $5.10 |   |
| Adjustment      for the effect of stock dividends |   |                     | 13,345   |   |         |               |   |   |
| Exercised                                         |   |                     | (53,604  | )      |         |               |   |   |
| Cancelled                                         |   |                     | (29,453  | )      |         |               |   |   |
|                                              |   |                     |     |   |         |               |   |   |
| Outstanding      at December 31, 2006             |   |                     | 280,243  |   |         | $1.79      - $4.86 |   |
| Adjustment      for the effect of stock dividends |   |                     | 13,891   |   |         |               |   |   |
| Exercised                                         |   |                     | --  |   |         |               |   |   |
| Cancelled                                         |   |                     | (2,431   | )      |         |               |   |   |
|                                              |   |                     |     |   |         |               |   |   |
| Outstanding      at December 31, 2007             |   |                     | 291,703  |   |         | $1.71      - $4.62 |   |

----

|                                                                                    |   | Number of Class A Shares |    |   | Option Price |               |
|-----------------------------------------------------------------------------------------|--------|--------------------------|---------|--------|--------------|--------------------|
| Exercisable      at end of year                                                         |   |                     | 291,703 |   |         | $1.71      - $4.62 |   |
|                                                                                    |   |                     |    |   |         |               |   |   |
| Available      options for future grant 1993 Stock Incentive Plan                       |   |                     | --      |   |         |               |   |   |
|                                                                                    |   |                     |    |   |         |               |   |   |
| Weighted      average contractual term of options outstanding at December 31,      2007 |   | 3.4      years           |    |   |         |               |   |
|                                                                                    |   |                     |    |   |         |               |   |   |
| Aggregated      intrinsic value of options outstanding at December 31,2007              |   | $                        | --      |   |         |               |   |   |

|                                              |   | Number      ofClass A Shares |   |   | Option Price |               |
|---------------------------------------------------|--------|------------------------------|--------|--------|--------------|--------------------|
| Outstanding      at December 31, 2004             |   |                         | 19,558 |   |         | $1.76      - $5.45 |   |
| Adjustment      for the effect of stock dividends |   |                         | 986    |   |         |               |   |   |
| Granted                                           |   |                         | 4,000  |   |         |               |   |   |
| Exercised                                         |   |                         | (3,828 | )      |         |               |   |   |

----

|                                                                                   |   | Number      ofClass A Shares |   |   | Option Price |               |
|----------------------------------------------------------------------------------------|--------|------------------------------|--------|--------|--------------|--------------------|
|                                                                                   |   |                         |   |   |         |               |
|                                                                                   |   |                         |   |   |         |               |
| Outstanding      at December 31, 2005                                                  |   |                         | 20,716 |   |         | $2.00      - $5.19 |   |
| Adjustment      for the effect of stock dividends                                      |   |                         | 845    |   |         |               |   |   |
| Granted                                                                                |   |                         | --     |   |         |               |   |   |
| Exercised                                                                              |   |                         | (3,828 | )      |         |               |   |   |
|                                                                                   |   |                         |   |   |         |               |   |   |
| Outstanding      at December 31, 2006                                                  |   |                         | 17,733 |   |         | $1.90      - $4.94 |   |
| Adjustment      for the effect of stock dividends                                      |   |                         | 695    |   |         |               |   |   |
| Granted                                                                                |   |                         | --     |   |         |               |   |   |
| Exercised                                                                              |   |                         | (3,828 | )      |         |               |   |   |
|                                                                                   |   |                         |   |   |         |               |   |   |
| Outstanding      at December 31, 2007                                                  |   |                         | 14,600 |   |         | $2.70      - $4.71 |   |
|                                                                                   |   |                         |   |   |         |               |   |   |
| Exercisable      at end of year                                                        |   |                         | 14,600 |   |         | $2.70      - $4.71 |   |
|                                                                                   |   |                         |   |   |         |               |   |   |
| Available      options for future grant 2000 Director Plan                             |   |                         | -0-    |   |         |               |   |   |
|                                                                                   |   |                         |   |   |         |               |   |   |
| Weighted      average contractual term of optionsoutstanding at December 31,      2007 |   | 1.3      years               |   |   |         |               |   |
|                                                                                   |   |                         |   |   |         |               |   |   |
| Aggregated      intrinsic value of options outstanding at December 31,2007             |   | $                            | 4,623  |   |         |               |   |   |

----

|                                                                                        |   | Number      ofClass A Shares |    |   | Number      ofClass C Shares(1) |   |       | OptionPrice(1) |   |
|---------------------------------------------------------------------------------------------|--------|------------------------------|---------|--------|---------------------------------|--------|------------|----------------|--------|
| Outstanding      at January 1, 2004                                                         |   |                         | --      |   |                            |   | --         |           |   |   |   |
| Adjustment      for the effect of stock dividends                                           |   |                         | 7,675   |   |                            |   | 50,000     |           |   |   |   |
| Granted                                                                                     |   |                         | 153,500 |   |                            |   | 1,000,000  |           |   |   |   |
| Exercised                                                                                   |   |                         | --      |   |                            |   | --         |           |   |   |   |
|                                                                                        |   |                         |    |   |                            |   |       |           |   |   |   |
| Outstanding      at December 31, 2004                                                       |   |                         | 161,175 |   |                            |   | 1,050,000  |           |   | $3.77      - $3.08 |   |
| Adjustment      for the effect of stock dividends                                           |   |                         | 25,404  |   |                            |   | 52,500     |           |   |   |   |   |
| Granted                                                                                     |   |                         | 349,000 |   |                            |   | --         |           |   |   |   |   |
| Exercised                                                                                   |   |                         | --      |   |                            |   | --         |           |   |   |   |   |
| Cancelled                                                                                   |   |                         | (2,100  | )      |                            |   | --         |           |   |   |   |   |
|                                                                                        |   |                         |    |   |                            |   |       |           |   |   |   |   |
| Outstanding      at December 31, 2005                                                       |   |                         | 533,479 |   |                            |   | 1,102,500  |           |   | $2.93      - $3.68 |   |
| Adjustment      for the effect of stock dividends                                           |   |                         | 22,823  |   |                            |   | 55,125     |           |   |   |   |   |
| Granted                                                                                     |   |                         | --      |   |                            |   | --         |           |   |   |   |   |
| Exercised                                                                                   |   |                         | (63,881 | )      |                            |   | --         |           |   |   |   |   |
| Cancelled                                                                                   |   |                         | (13,125 | )      |                            |   | --         |           |   |   |   |   |
|                                                                                        |   |                         |    |   |                            |   |       |           |   |   |   |   |
| Outstanding      at December 31, 2006                                                       |   |                         | 479,296 |   |                            |   | 1,157,625  |           |   | $2.79      - $3.50 |   |
| Adjustment      for the effect of stock dividends                                           |   |                         | 21,674  |   |                            |   | --         |           |   |   |   |   |
| Granted                                                                                     |   |                         | --      |   |                            |   | --         |           |   |   |   |   |
| Exercised                                                                                   |   |                         | (44,650 | )      |                            |   | (1,157,625 | )              |   |   |   |   |
| Cancelled                                                                                   |   |                         | (1,158  | )      |                            |   | --         |           |   |   |   |   |
|                                                                                        |   |                         |    |   |                            |   |       |           |   |   |   |   |
| Outstanding      at December 31, 2007                                                       |   |                         | 455,162 |   |                            |   | --         |           |   | $2.66      - $3.33 |   |
|                                                                                        |   |                         |    |   |                            |   |       |           |   |   |   |   |
| Exercisable      at end of year                                                             |   |                         | 455,162 |   |                            |   | --         |           |   | $2.66      - $3.33 |   |
|                                                                                        |   |                         |    |   |                            |   |       |           |   |   |   |   |
| Available      options for future grant 2003 Stock Incentive Plan                           |   |                         | 497,243 |   |                            |   | 1,110,775  |           |   |   |   |   |
|                                                                                        |   |                         |    |   |                            |   |       |           |   |   |   |   |
| Weighted      average contractual term of options outstanding at December 31,      2007     |   | 5.3      years               |    |   |                            |   |       |           |   |   |   |
|                                                                                        |   |                         |    |   |                            |   |       |           |   |   |   |   |
| Aggregated      intrinsic value of options outstanding  at December 31,      2007 |   | $                            | 366,052 |   |                            |   |       |           |   |   |   |   |

----

|                                                                                        |   | Number      ofClass A Shares |    |   | Option Price |               |
|---------------------------------------------------------------------------------------------|--------|------------------------------|---------|--------|--------------|--------------------|
| Outstanding      at December 31, 2005                                                       |   |                         | --      |   |         |  --           |   |
| Granted                                                                                     |   |                         | 4,000   |   |         |               |   |   |
| Adjustment      for the effect of stock dividends                                           |   |                         | 200     |   |         |               |   |   |
|                                                                                        |   |                         |    |   |         |               |   |   |
| Outstanding      at December 31, 2006                                                       |   |                         | 4,200   |   |         | $5.06              |   |
| Granted                                                                                     |   |                         | 4,000   |   |         |               |   |   |
| Adjustment      for the effect of stock dividends                                           |   |                         | 410     |   |         |               |   |   |
|                                                                                        |   |                         |    |   |         |               |   |   |
| Outstanding      at December 31, 2007                                                       |   |                         | 8,610   |   |         | $4.82      - $3.57 |   |
|                                                                                        |   |                         |    |   |         |               |   |   |
| Exercisable      at end of year                                                             |   |                         | 4,412   |   |         | $4.82              |   |
|                                                                                        |   |                         |    |   |         |               |   |   |
| Available      options for future grant 2006 Stock Incentive Plan                           |   |                         | 101,640 |   |         |               |   |   |
|                                                                                        |   |                         |    |   |         |               |   |   |
| Weighted      average contractual term of options outstanding at December 31,      2007     |   | 9.4      years               |    |   |         |               |   |
|                                                                                        |   |                         |    |   |         |               |   |   |
| Aggregated      intrinsic value of options outstanding  at December 31,      2007 |   |                         | --      |   |         |               |   |   |

----

----

----

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

----

|                                                                                       |   | LifeInsurance |        |   | Cemetery/Mortuary |   |       | Mortgage |   |   | ReconcilingItems |   |   | Consolidated |        |
|--------------------------------------------------------------------------------------------|--------|---------------|-------------|--------|-------------------|--------|------------|----------|--------|--------|------------------|--------|--------|--------------|-------------|
| Revenues:                                                                                  |   |          |        |   |              |   |       |     |   |   |             |   |   |         |        |
| From      external sources:                                                                |   |          |        |   |              |   |       |     |   |   |             |   |   |         |        |
| Revenue      from customers                                                                |   | $             | 30,776,491  |   |              | $      | 12,122,728 |     |   | $      | 85,112,831       |   |   | $            | --          |   |   | $ | 128,012,050 |   |
| Net      investment income                                                                 |   |          | 13,774,225  |   |              |   | 935,487    |     |   |   | 8,535,919        |   |   |         | --          |   |   |   | 23,245,631 |   |
| Realized      gains on investments and other assets                                        |   |          | 131,073     |   |              |   | 760,231    |     |   |   | --               |   |   |         | --          |   |   |   | 891,304 |   |
| Other      revenues                                                                        |   |          | 34,921      |   |              |   | 108,987    |     |   |   | 237,640          |   |   |         | --          |   |   |   | 381,548 |   |
| Intersegment      revenues:                                                                |   |          |        |   |              |   |       |     |   |   |             |   |   |         |        |   |   |   |   |   |
| Net      investment income                                                                 |   |          | 4,907,414   |   |              |   | 116,004    |     |   |   | 452,070          |   |   |         | (5,475,488  | ) |   |   | -- |   |
| Total      revenues                                                                        |   |          | 49,624,124  |   |              |   | 14,043,437 |     |   |   | 94,338,460       |   |   |         | (5,475,488  | ) |   |   | 152,530,533 |   |
| Expenses:                                                                                  |   |          |        |   |              |   |       |     |   |   |             |   |   |         |        |   |   |   |   |   |
| Death      and other policy benefits                                                       |   |          | 16,853,568  |   |              |   | --         |     |   |   | --               |   |   |         | --          |   |   |   | 16,853,568 |   |
| Increase      in future policy benefits                                                    |   |          | 10,465,268  |   |              |   | --         |     |   |   | --               |   |   |         | --          |   |   |   | 10,465,268 |   |
| Amortization      of deferred policy acquisition costs and cost of insurance      acquired |   |          | 3,796,062   |   |              |   | 328,685    |     |   |   |             |   |   |         | --          |   |   |   | 4,124,747 |   |
| Depreciation                                                                               |   |          | 487,545     |   |              |   | 298,512    |     |   |   | 540,915          |   |   |         | --          |   |   |   | 1,326,972 |   |
| General,      administrative and other      costs:                                         |   |          |        |   |              |   |       |     |   |   |             |   |   |         |        |   |   |   |   |   |
| Intersegment                                                                               |   |          | 24,000      |   |              |   | 60,672     |     |   |   | 294,828          |   |   |         | (379,500    | ) |   |   | -- |   |
| Other                                                                                      |   |          | 12,603,489  |   |              |   | 11,508,066 |     |   |   | 82,611,487       |   |   |         | --          |   |   |   | 106,723,042 |   |
| Interest      expense:                                                                     |   |          |        |   |              |   |       |     |   |   |             |   |   |         |        |   |   |   |   |   |
| Intersegment                                                                               |   |          | 546,075     |   |              |   | 177,359    |     |   |   | 4,372,554        |   |   |         | (5,095,988  | ) |   |   | -- |   |
| Other                                                                                      |   |          | 376,289     |   |              |   | 307,728    |     |   |   | 5,457,281        |   |   |         | --          |   |   |   | 6,141,298 |   |
| Total      benefits and expenses                                                           |   |          | 45,152,296  |   |              |   | 12,681,022 |     |   |   | 93,277,065       |   |   |         | (5,475,488  | ) |   |   | 145,634,895 |   |
| Earnings      before income taxes                                                          |   | $             | 4,471,828   |   |              | $      | 1,362,415  |     |   | $      | 1,061,395        |   |   | $            | --          |   |   | $ | 6,895,638 |   |
|                                                                                       |   |          |        |   |              |   |       |     |   |   |             |   |   |         |        |   |   |   |   |   |
| Identifiable      assets                                                                   |   | $             | 353,431,518 |   |              | $      | 54,787,639 |     |   | $      | 22,158,123       |   |   | $            | (52,982,097 | ) |   | $ | 377,395,183 |   |
|                                                                                       |   |          |        |   |              |   |       |     |   |   |             |   |   |         |        |   |   |   |   |   |
| Expenditures      for long-lived assets                                                    |   | $             | 454,817     |   |              | $      | 670,988    |     |   | $      | 637,903          |   |   | $            | --          |   |   | $ | 1,763,708 |   |

----

|                                                                                       |   | LifeInsurance |        |   | Cemetery/Mortuary |   |       | Mortgage |   |   | ReconcilingItems |   |   | Consolidated |        |
|--------------------------------------------------------------------------------------------|--------|---------------|-------------|--------|-------------------|--------|------------|----------|--------|--------|------------------|--------|--------|--------------|-------------|
| Revenues:                                                                                  |   |          |        |   |              |   |       |     |   |   |             |   |   |         |        |
| From      external sources:                                                                |   |          |        |   |              |   |       |     |   |   |             |   |   |         |        |
| Revenue      from customers                                                                |   | $             | 27,170,109  |   |              | $      | 10,838,878 |     |   | $      | 71,859,272       |   |   | $            | --          |   |   | $ | 109,868,259 |   |
| Net      investment income                                                                 |   |          | 11,080,324  |   |              |   | 967,740    |     |   |   | 7,338,507        |   |   |         | --          |   |   |   | 19,386,571 |   |
| Realized      gains on investments and other assets                                        |   |          | 74,246      |   |              |   | --         |     |   |   | --               |   |   |         | --          |   |   |   | 74,246 |   |
| Other      revenues                                                                        |   |          | 293,151     |   |              |   | 162,078    |     |   |   | 165,522          |   |   |         | --          |   |   |   | 620,751 |   |
|                                                                                       |   |          |        |   |              |   |       |     |   |   |             |   |   |         |        |   |   |   |   |   |
| Intersegment      revenues:                                                                |   |          |        |   |              |   |       |     |   |   |             |   |   |         |        |   |   |   |   |   |
| Net      investment income                                                                 |   |          | 5,015,356   |   |              |   | 92,004     |     |   |   | 349,027          |   |   |         | (5,456,387  | ) |   |   | -- |   |
| Total      revenues                                                                        |   |          | 43,633,186  |   |              |   | 12,060,700 |     |   |   | 79,712,328       |   |   |         | (5,456,387  | ) |   |   | 129,949,827 |   |
| Expenses:                                                                                  |   |          |        |   |              |   |       |     |   |   |             |   |   |         |        |   |   |   |   |   |
| Death      and other policy benefits                                                       |   |          | 14,734,364  |   |              |   | --         |     |   |   | --               |   |   |         | --          |   |   |   | 14,734,364 |   |
| Increase      in future policy benefits                                                    |   |          | 9,742,218   |   |              |   | --         |     |   |   | --               |   |   |         | --          |   |   |   | 9,742,218 |   |
| Amortization      of deferred policy acquisition costs and cost of insurance      acquired |   |          | 2,765,422   |   |              |   | 265,312    |     |   |   | --               |   |   |         | --          |   |   |   | 3,030,734 |   |
| Depreciation                                                                               |   |          | 438,423     |   |              |   | 699,236    |     |   |   | 566,495          |   |   |         | --          |   |   |   | 1,704,154 |   |
| General,      administrative and other      costs:                                         |   |          |        |   |              |   |       |     |   |   |             |   |   |         |        |   |   |   |   |   |
| Intersegment                                                                               |   |          | --          |   |              |   | 36,672     |     |   |   | 296,664          |   |   |         | (333,336    | ) |   |   | -- |   |
| Other                                                                                      |   |          | 12,278,778  |   |              |   | 10,147,421 |     |   |   | 68,663,284       |   |   |         | --          |   |   |   | 91,089,483 |   |
| Interest      expense:                                                                     |   |          |        |   |              |   |       |     |   |   |             |   |   |         |        |   |   |   |   |   |
| Intersegment                                                                               |   |          | 422,199     |   |              |   | 172,557    |     |   |   | 4,528,295        |   |   |         | (5,123,051  | ) |   |   | -- |   |
| Other                                                                                      |   |          | 460,708     |   |              |   | 317,292    |     |   |   | 4,143,238        |   |   |         | --          |   |   |   | 4,921,238 |   |
| Total      benefits and expenses                                                           |   |          | 40,842,112  |   |              |   | 11,638,490 |     |   |   | 78,197,976       |   |   |         | (5,456,387  | ) |   |   | 125,222,191 |   |
| Earnings      before income taxes                                                          |   | $             | 2,791,074   |   |              | $      | 422,210    |     |   | $      | 1,514,352        |   |   | $            | --          |   |   | $ | 4,727,636 |   |
|                                                                                       |   |          |        |   |              |   |       |     |   |   |             |   |   |         |        |   |   |   |   |   |
| Identifiable      assets                                                                   |   | $             | 345,029,159 |   |              | $      | 51,281,466 |     |   | $      | 18,193,773       |   |   | $            | (54,858,925 | ) |   | $ | 359,645,473 |   |
|                                                                                       |   |          |        |   |              |   |       |     |   |   |             |   |   |         |        |   |   |   |   |   |
| Expenditures      for long-lived assets                                                    |   | $             | 758,688     |   |              | $      | 1,155,673  |     |   | $      | 322,371          |   |   | $            | --          |   |   | $ | 2,236,732 |   |

----

----

|                                                     |   | December      31, 2007 |         |   | December      31, 2006 |   |
|----------------------------------------------------------|--------|------------------------|--------------|--------|------------------------|--------|
|                                                     |   | CarryingAmount         |         |   | FairValue              |   |   | CarryingAmount |   |   | FairValue |   |
| Financial      assets:                                   |   |                   |         |   |                   |   |   |   |   |   |   |   |
| Investment      in fixed maturity securities             |   | $                      | 116,896,016  |   |                   | $      | 114,476,524 |   |   | $ | 98,317,519 |   |   | $ | 98,422,577 |   |
| Investment      in securities available for sale         |   |                   | 8,781,212    |   |                   |   | 8,781,212 |   |   |   | 8,679,226 |   |   |   | 8,679,226 |   |
| Investment      in mortgage loans and construction loans |   |                   | 92,884,055   |   |                   |   | 92,884,055 |   |   |   | 85,135,011 |   |   |   | 85,135,011 |   |
| Investment      in policy, student and other loans       |   |                   | 16,860,874   |   |                   |   | 16,860,874 |   |   |   | 12,846,986 |   |   |   | 12,846,986 |   |
| Short-term      investments                              |   |                   | 5,337,367    |   |                   |   | 5,337,367 |   |   |   | 4,586,828 |   |   |   | 4,586,828 |   |
| Cash      and cash equivalents                           |   |                   | 5,203,060    |   |                   |   | 5,203,060 |   |   |   | 10,376,585 |   |   |   | 10,376,585 |   |
| Mortgage      loans sold to investors                    |   |                   | 66,700,694   |   |                   |   | 66,700,694 |   |   |   | 59,091,848 |   |   |   | 59,091,848 |   |
| Receivables                                              |   |                   | 15,036,867   |   |                   |   | 15,036,867 |   |   |   | 15,603,518 |   |   |   | 15,603,518 |   |
| Restricted      assets of cemeteries and mortuaries      |   |                   | 5,711,054    |   |                   |   | 5,711,054 |   |   |   | 5,430,870 |   |   |   | 5,430,870 |   |
| Cemetery      perpetual care trust investments           |   |                   | 1,604,600    |   |                   |   | 1,604,600 |   |   |   | 1,306,984 |   |   |   | 1,306,984 |   |
| Financial      liabilities:                              |   |                   |         |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Investment-type      insurance contracts                 |   |                   | (106,939,120 | )      |                   |   | (106,939,120 | ) |   |   | (94,284,000 | ) |   |   | (94,284,000 | ) |
| Bank      loans payable, excluding interest rate swaps   |   |                   | (12,525,715  | )      |                   |   | (12,525,715 | ) |   |   | (7,056,424 | ) |   |   | (7,056,424 | ) |
| Notes      and contracts payable                         |   |                   | (818,810     | )      |                   |   | (818,810 | ) |   |   | (747,188 | ) |   |   | (747,188 | ) |
| Accounts      payable                                    |   |                   | (1,833,188   | )      |                   |   | (1,833,188 | ) |   |   | (1,820,178 | ) |   |   | (1,820,178 | ) |
| Other      liabilities and accrued expenses              |   |                   | (14,812,845  | )      |                   |   | (14,812,845 | ) |   |   | (11,611,033 | ) |   |   | (11,611,033 | ) |
| Derivatives:                                             |   |                   |         |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      rate lock commitments                      |   |                   | 627,116      |   |                   |   | 627,116 |   |   |   | 1,147,314 |   |   |   | 1,147,314 |   |
| Forward      contracts on mortgage-backed securities     |   |                   | - 0      -   |   |                   |   | - 0      - |   |   |   | 62,227 |   |   |   | 62,227 |   |
| Bank      loan interest rate swaps                       |   |                   | (26,951      | )      |                   |   | (26,951 | ) |   |   | 133,080 |   |   |   | 133,080 |   |

|                                                                                                       |   | December 31, |     |
|------------------------------------------------------------------------------------------------------------|--------|--------------|----------|
|                                                                                                       |   | 2007         |     |   | 2006 |   |   | 2005 |   |
|                                                                                                       |   |         |     |   |   |   |   |   |   |
| Unrealized      gains (losses) on available for-sale securities                                            |   | $            | 245,447  |   |   | $ | 1,070,471 |   |   | $ | (342,816 | ) |
| Reclassification      adjustment for net realized gains (losses) in net income                             |   |         | 175,130  |   |   |   | 93,255 |   |   |   | 56,090 |   |
| Net      unrealized gains (losses) before taxes                                                            |   |         | 420,577  |   |   |   | 1,163,726 |   |   |   | (286,726 | ) |
| Tax      (expense) benefit                                                                                 |   |         | (57,046  | ) |   |   | (186,935 | ) |   |   | 114,017 |   |
| Net                                                                                                        |   |         | 363,531  |   |   |   | 976,791 |   |   |   | (172,709 | ) |
| Potential      unrealized gains (losses) for derivative bank loans (interest rate swaps)      before taxes |   |         | (160,021 | ) |   |   | (29,549 | ) |   |   | 199,439 |   |
| Tax      (expense) benefit                                                                                 |   |         | 54,407   |   |   |   | 10,047 |   |   |   | (67,809 | ) |
| Net                                                                                                        |   |         | (105,614 | ) |   |   | (19,502 | ) |   |   | 131,630 |   |
| Potential      unrealized gains for derivative mortgage loans beforetaxes                                  |   |         | (582,425 | ) |   |   | 951,847 |   |   |   | 257,694 |   |
| Tax      (expense) benefit                                                                                 |   |         | 198,024  |   |   |   | (323,628 | ) |   |   | (87,616 | ) |
| Net                                                                                                        |   |         | (384,401 | ) |   |   | 628,219 |   |   |   | 170,078 |   |
| Other      stock options granted                                                                           |   |         | 20,120   |   |   |   | -- |   |   |   | -- |   |
| Other      comprehensive income                                                                            |   | $            | (106,364 | ) |   | $ | 1,585,508 |   |   | $ | 128,999 |   |

----

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

----

|                                            |   | 2007   |       |   | 2006   |   |
|-------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Gain      forward loan sale commitments         |   | $      | 1,173,023  |   |   | $      | 291,915 |   |
| Gain      (loss) on derivative loan commitments |   |   | (1,755,448 | )      |   |   | 659,932 |   |
| Total                                           |   | $      | (582,425   | )      |   | $      | 951,847 |   |

|                                                 |   | 2007Three Months Ended |       |
|------------------------------------------------------|--------|------------------------|------------|
|                                                 |   | March 31               |       |   | June 30 |   |   | September 30 |   |   | December 31 |   |
| Revenues                                             |   | $                      | 49,046,152 |   |   | $ | 54,315,888 |   |   | $ | 51,663,941 |   |   | $ | 54,722,101 |   |
| Benefits      and expenses                           |   |                   | 47,988,774 |   |   |   | 52,956,038 |   |   |   | 52,801,454 |   |   |   | 52,878,785 |   |
| Earnings      before income taxes                    |   |                   | 1,057,378  |   |   |   | 1,359,850 |   |   |   | (      1,137,513 | ) |   |   | 1,843,316 |   |
| Income      tax expense                              |   |                   | 312,837    |   |   |   | 328,822 |   |   |   | (475,069 | ) |   |   | 691,045 |   |
| Net      earnings                                    |   |                   | 744,541    |   |   |   | 1,031,028 |   |   |   | (662,444 | ) |   |   | 1,152,271 |   |
| Net      earnings per common share                   |   | $                      | 0.10       |   |   | $ | 0.14 |   |   | $ | (0.09 | ) |   | $ | 0.15 |   |
| Net      earnings per common share assuming dilution |   | $                      | 0.10       |   |   | $ | 0.13 |   |   | $ | (0.09 | ) |   | $ | 0.15 |   |

----

|                                                 |   | 2006Three      Months Ended |       |
|------------------------------------------------------|--------|-----------------------------|------------|
|                                                 |   | March 31                    |       |   | June 30 |   |   | September 30 |   |   | December 31 |   |
| Revenues                                             |   | $                           | 32,403,693 |   |   | $ | 34,146,449 |   |   | $ | 38,574,775 |   |   | $ | 47,405,616 |   |
| Benefits      and expenses                           |   |                        | 31,101,536 |   |   |   | 33,253,582 |   |   |   | 36,441,240 |   |   |   | 44,838,537 |   |
| Earnings      before income taxes                    |   |                        | 1,302,157  |   |   |   | 892,867 |   |   |   | 2,133,535 |   |   |   | 2,567,079 |   |
| Income      tax expense                              |   |                        | 288,491    |   |   |   | 169,228 |   |   |   | 592,238 |   |   |   | 721,231 |   |
| Net      earnings                                    |   |                        | 1,013,666  |   |   |   | 723,639 |   |   |   | 1,541,297 |   |   |   | 1,845,848 |   |
| Net      earnings per common share                   |   | $                           | 0.14       |   |   | $ | 0.10 |   |   | $ | 0.21 |   |   | $ | 0.25 |   |
| Net      earnings per common share assuming dilution |   | $                           | 0.14       |   |   | $ | 0.10 |   |   | $ | 0.21 |   |   | $ | 0.24 |   |

| (a) | Management’s      annual report on internal control over financial  reporting. |
|-----|--------------------------------------------------------------------------------------|

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

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

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

----

| (b) | Changes      in internal control over financialreporting. |
|-----|-----------------------------------------------------------|

----

| Name | Age | Position with the      Company |
|------|-----|--------------------------------|

| George      R. Quist | 87 | Chairman      of the Board and Chief ExecutiveOfficer |
|----------------------|----|-------------------------------------------------------|

| Scott      M. Quist | 54 | President,      Chief Operating Officer andDirector |
|---------------------|----|-----------------------------------------------------|

| Stephen      M. Sill | 62 | Vice      President, Treasurer and Chief FinancialOfficer |
|----------------------|----|-----------------------------------------------------------|

| G.      Robert Quist | 56 | First      Vice President and Secretary |
|----------------------|----|-----------------------------------------|

| J.      Lynn Beckstead, Jr. | 54 | Vice      President Mortgage Operations andDirector |
|-----------------------------|----|-----------------------------------------------------|

| Christie      Q. Overbaugh | 59 | Senior      Vice President of InternalOperations |
|----------------------------|----|--------------------------------------------------|

| Charles      L. Crittenden | 87 | Director |
|----------------------------|----|----------|

| Robert      G. Hunter | 48 | Director |
|-----------------------|----|----------|

| H.      Craig Moody | 56 | Director |
|---------------------|----|----------|

| Norman      G. Wilbur | 69 | Director |
|-----------------------|----|----------|

----

----

----

| Name      and PrincipalPosition                                                         |   | Year         |   | Salary$                                        |   | Bonus($)                                                   |   | Stock      Awards($) |   | Option      Awards($) |   | Non-Equity      Incentive Plan Compensation($) |   | Change      in Pension Value and Non-qualified Deferred Compensation Earnings($)(3) |   | All      Other Compensation($)(2)           |   | Total($)                                       |
|-----------------------------------------------------------------------------------------|--------|--------------|--------|------------------------------------------------|--------|------------------------------------------------------------|--------|----------------------|--------|-----------------------|--------|------------------------------------------------|--------|-------------------------------------------------------------------------------------|--------|---------------------------------------------|--------|------------------------------------------------|
| George      R. Quist(1)Chairman      of the      Board and Chief Executive      Officer |   | 200720062005 |   | $219,513  203,013       186,300 |   | $          -0- 40,000 35,000 |   | ------               |   | ------                |   | ------                                         |   | $24,200  21,967       21,340                                         |   | $10,760       10,683       10,175 |   | $254,473       275,663  252,815 |
|                                                                                    |   |         |   |                                           |   |                                                       |   |                 |   |                  |   |                                           |   |                                                                                |   |                                        |   |                                           |
| Scott      M. Quist(1)President      and Chief Operating      Officer                   |   | 200720062005 |   | $303,900       275,400       246,900 |   | $          -0- 75,000 75,000      |   | ------               |   | ------                |   | ------                                         |   | $25,300       24,150       23,978                                         |   | $33,172       26,879       38,533 |   | $362,372       401,429       384,411 |
|                                                                                    |   |         |   |                                           |   |                                                       |   |                 |   |                  |   |                                           |   |                                                                                |   |                                        |   |                                           |
| Stephen      M. SillVice      President,Treasurer      and ChiefFinancial      Officer  |   | 200720062005 |   | $125,292       120,292       115,063 |   | $      6,000        3,000        6,000 |   | ------               |   | ------                |   | ------                                         |   | $14,179       13,922       12,518                                         |   | $15,878       15,386       15,093 |   | $161,349       152,600       148,674 |
|                                                                                    |   |         |   |                                           |   |                                                       |   |                 |   |                  |   |                                           |   |                                                                                |   |                                        |   |                                           |
| J.      Lynn Beckstead, Jr.Vice      President ofMortgage      Operations               |   | 200720062005 |   | $207,500       246,292       220,306 |   | $46,888    6,000  24,000     |   | ------               |   | ------                |   | ------                                         |   | $21,166       21,945       21,735                                         |   | $21,140       15,295       15,263 |   | $296,694       289,532       281,304 |
|                                                                                    |   |         |   |                                           |   |                                                       |   |                 |   |                  |   |                                           |   |                                                                                |   |                                        |   |                                           |
| G.      Robert Quist(1)First      Vice President and      Secretary                |   | 200720062005 |   | $122,433       126,221       115,063 |   | $10,203       10,000         6,000     |   | ------               |   | ------                |   | ------                                         |   | $13,529       12,209       10,205                                         |   | $20,281       18,218       16,061 |   | $166,446       166,648       147,329 |
|                                                                                    |   |         |   |                                           |   |                                                       |   |                 |   |                  |   |                                           |   |                                                                                |   |                                        |   |                                           |
| Christie      Q. Overbaugh(1)                                                           |   | 2007         |   | $103,392                                       |   | $       7,000                                         |   | --                   |   | --                    |   | --                                             |   | $10,758                                                                             |   | $      8,292                                |   | $129,442                                       |

----

| Name                            |   | Year         |   | Perks      and Other Personal Benefits   |   | Tax      Reimbursements |   | Discounted      Securities Purchases |   | Payments/      Accruals on Termination      Plans |   | Registrant      Contributions to Defined Contribution Plans |   | Insurance      Premiums                     |   | Dividends      or Earnings on Stock or Option Awards |   | Other(1) |
|---------------------------------|--------|--------------|--------|------------------------------------------|--------|-------------------------|--------|--------------------------------------|--------|---------------------------------------------------|--------|-------------------------------------------------------------|--------|---------------------------------------------|--------|------------------------------------------------------|--------|----------|
| George      R. Quist            |   | 200720062005 |   | $2,400  2,400       2,400 |   | ------                  |   | ------                               |   | ------                                            |   | ------                                                      |   | $8,360       8,283       7,775    |   | ------                                               |   | ------   |
|                            |   |         |   |                                     |   |                    |   |                                 |   |                                              |   |                                                        |   |                                        |   |                                                 |   |     |
| Scott      M. Quist        |   | 200720062005 |   | $7,200       7,200       7,200 |   | ------                  |   | ------                               |   | ------                                            |   | ------                                                      |   | $25,972       19,679       31,333 |   | ------                                               |   | ------   |
|                            |   |         |   |                                     |   |                    |   |                                 |   |                                              |   |                                                        |   |                                        |   |                                                 |   |     |
| Stephen      M. Sill            |   | 200720062005 |   | $4,275       3,600       3,600 |   | ------                  |   | ------                               |   | ------                                            |   | ------                                                      |   | $11,603       11,786       11,493 |   | ------                                               |   | ------   |
|                            |   |         |   |                                     |   |                    |   |                                 |   |                                              |   |                                                        |   |                                        |   |                                                 |   |     |
| J.      Lynn Beckstead, Jr.     |   | 200720062005 |   | $5,308       5,117       4,964 |   | ------                  |   | ------                               |   | ------                                            |   | ------                                                      |   | $15,832       15,295       15,263 |   | ------                                               |   | ------   |
|                            |   |         |   |                                     |   |                    |   |                                 |   |                                              |   |                                                        |   |                                        |   |                                                 |   |     |
| G.      Robert Quist            |   | 200720062005 |   | $5,700       4,525       2,400 |   | ------                  |   | ------                               |   | ------                                            |   | ------                                                      |   | $14,581       13,693       13,661 |   | ------                                               |   | ------   |
|                            |   |         |   |                                     |   |                    |   |                                 |   |                                              |   |                                                        |   |                                        |   |                                                 |   |     |
| Christie      Q. Overbaugh |   | 2007         |   | $        400                   |   | --                      |   | --                                   |   | --                                                |   | --                                                          |   | $       7,892                          |   | --                                                   |   | --       |

----

|                       |   |                     |   | Estimated      Future Payouts UnderNon-Equity      Incentive PlanAwards |   | Estimated      Future PayoutsUnder      Equity Incentive PlanAwards |   |       |   |         |   |      |   |       |
|----------------------------|--------|--------------------------|--------|-------------------------------------------------------------------------|--------|---------------------------------------------------------------------|--------|------------|--------|--------------|--------|-----------|--------|------------|
| Name                       |   | GrantDate                |   | Threshold      ($)                                                      |   | Target($)                                                           |   | Maximum($) |   | Threshold(#) |   | Target(#) |   | Maximum($) |   | All      OtherStockAwards:Number      ofShares      ofStock      orUnits(#) |   | All      OtherOptionAwards:Number      ofSecuritiesUnder-lyingOptions(#) |   | Exerciseor      BasePrice      ofOptionAwards($/Sh) |   | GrantDate      FairValue      ofStock      andOptionsAwards($) |
|                       |   |                     |   |                                                                    |   |                                                                |   |       |   |         |   |      |   |       |   |   |   |   |   |   |   |   |
| George      R. Quist       |   | 07/16/0412/10/0403/25/05 |   | ------                                                                  |   | ------                                                              |   | ------     |   | ------       |   | ------    |   | ------     |   | ------ |   | 50,00050,00070,000 |   | $3.96       3.55       3.86 |   | $1.71       1.71       1.92 |
|                       |   |                     |   |                                                                    |   |                                                                |   |       |   |         |   |      |   |       |   |   |   |   |   |   |   |   |
| Scott      M. Quist        |   | 03/21/0303/25/05         |   | ----                                                                    |   | ----                                                                |   | ----       |   | ----         |   | ----      |   | ----       |   | ---- |   | 70,00070,000 |   | $5.90       3.51 |   | $2.63       1.92 |
|                       |   |                     |   |                                                                    |   |                                                                |   |       |   |         |   |      |   |       |   |   |   |   |   |   |   |   |
| Stephen      M. Sill       |   | --                       |   | --                                                                      |   | --                                                                  |   | --         |   | --           |   | --        |   | --         |   | -- |   | -- |   | -- |   | -- |
|                       |   |                     |   |                                                                    |   |                                                                |   |       |   |         |   |      |   |       |   |   |   |   |   |   |   |   |
| J.      Lynn Beckstead, Jr |   | 03/21/0312/10/0403/25/05 |   | ------                                                                  |   | ------                                                              |   | ------     |   | ------       |   | ------    |   | ------     |   | ------ |   | 15,000       5,00035,000 |   | $5.90       3.23        3.51 |   | $2.63       1.71       1.92 |
|                       |   |                     |   |                                                                    |   |                                                                |   |       |   |         |   |      |   |       |   |   |   |   |   |   |   |   |
| G.      Robert Quist       |   | 03/21/03                 |   | --                                                                      |   | --                                                                  |   | --         |   | --           |   | --        |   | --         |   | -- |   | 35,000 |   | $5.90 |   | $2.63 |
|                       |   |                     |   |                                                                    |   |                                                                |   |       |   |         |   |      |   |       |   |   |   |   |   |   |   |   |
| Christie      Q. Overbaugh |   | 12/10/0403/25/05         |   | ----                                                                    |   | ----                                                                |   | ----       |   | ----         |   | ----      |   | ----       |   | ---- |   |        7,50020,000 |   | $3.23       3.51 |   | $1.71       1.92 |

----

| Name                        |   | Number      of SecuritiesUnderlyingUnexercisedOptions(#)Exercisable |   | Number      ofSecuritiesUnderlyingUnexercisedOptions:(#)Unexercisable |   | EquityIncentivePan      AwardsNumber      ofSecuritiesUnderlyingUnexercisedUnearnedOptions(#) |   | OptionExercisePrice($) |   | OptionExpirationDate |   | Number      ofShares      orUnits      ofStockHeld      ThatHave      NotVested(#) |   | MarketValue      ofShares      orUnits      ofStockThat      HaveNotVested($) |   | EquityIncentivePlanAwardsNumber      ofUnearnedShares,Units      orOtherRightsThat      HaveNotVested(#) |   | EquityIncentivePlanAwards:Market      orPayoutValue      ofUnearnedShares,Units      orOtherRights      ThatHave      NotVested($) |
|-----------------------------|--------|---------------------------------------------------------------------|--------|-----------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------|--------|------------------------|--------|----------------------|--------|------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------|
|                        |   |                                                                |   |                                                                  |   |                                                                                          |   |                   |   |                 |   |                                                                               |   |                                                                          |   |                                                                                                     |   |                                                                                                                               |
| George      R. Quist        |   | 170,000                                                             |   | --                                                                    |   | --                                                                                            |   | $3.55-3.96             |   | 2009-2010            |   | --                                                                                 |   | --                                                                            |   | --                                                                                                       |   | --                                                                                                                                 |
|                        |   |                                                                |   |                                                                  |   |                                                                                          |   |                   |   |                 |   |                                                                               |   |                                                                          |   |                                                                                                     |   |                                                                                                                               |
| Scott      M. Quist         |   | 140,000                                                             |   | --                                                                    |   | --                                                                                            |   | $3.51-5.90             |   | 2013-2015            |   | --                                                                                 |   | --                                                                            |   | --                                                                                                       |   | --                                                                                                                                 |
|                        |   |                                                                |   |                                                                  |   |                                                                                          |   |                   |   |                 |   |                                                                               |   |                                                                          |   |                                                                                                     |   |                                                                                                                               |
| Stephen      M. Sill        |   | --                                                                  |   | --                                                                    |   | --                                                                                            |   | --                     |   | --                   |   | --                                                                                 |   | --                                                                            |   | --                                                                                                       |   | --                                                                                                                                 |
|                        |   |                                                                |   |                                                                  |   |                                                                                          |   |                   |   |                 |   |                                                                               |   |                                                                          |   |                                                                                                     |   |                                                                                                                               |
| J.      Lynn Beckstead, Jr. |   | 55,000                                                              |   | --                                                                    |   | --                                                                                            |   | $3.23-5.90             |   | 2013-2015            |   | --                                                                                 |   | --                                                                            |   | --                                                                                                       |   | --                                                                                                                                 |
|                        |   |                                                                |   |                                                                  |   |                                                                                          |   |                   |   |                 |   |                                                                               |   |                                                                          |   |                                                                                                     |   |                                                                                                                               |
| G.      Robert Quist        |   | 35,000                                                              |   | --                                                                    |   | --                                                                                            |   | $5.90                  |   | 2013                 |   | --                                                                                 |   | --                                                                            |   | --                                                                                                       |   | --                                                                                                                                 |
|                        |   |                                                                |   |                                                                  |   |                                                                                          |   |                   |   |                 |   |                                                                               |   |                                                                          |   |                                                                                                     |   |                                                                                                                               |
| Christie      Q. Overbaugh  |   | 27,500                                                              |   | --                                                                    |   | --                                                                                            |   | $3.23-3.51             |   | 2014-2015            |   | --                                                                                 |   | --                                                                            |   | --                                                                                                       |   | --                                                                                                                                 |

|                        |   | Option Awards                                         |   |   | Stock Awards                           |   |
|-----------------------------|--------|-------------------------------------------------------|--------|--------|----------------------------------------|--------|
| Name                        |   | Number      ofShares      Acquiredon      Exercise(#) |   |   | Value      Realizedon      Exercise($) |   |   | Number      ofShares      Acquiredon      Vesting(#) |   |   | Value      Realizedon      Vesting($) |   |
|                        |   |                                                  |   |   |                                   |   |   |   |   |   |   |   |   |   |   |   |
| George      R. Quist        |   |                                                  | --     |   |                                   | $      | -- |   |   |   | -- |   |   |   | -- |   |
| Scott      M. Quist (1)     |   |                                                  | 57,386 |   |                                   |   | 335,711 |   |   |   | -- |   |   |   | -- |   |
| Stephen      M. Sill        |   |                                                  | --     |   |                                   |   | -- |   |   |   | -- |   |   |   | -- |   |
| J.      Lynn Beckstead, Jr. |   |                                                  | --     |   |                                   |   | -- |   |   |   | -- |   |   |   | -- |   |
| G.      Robert Quist        |   |                                                  | 17,507 |   |                                   |   | 96,288 |   |   |   | -- |   |   |   | -- |   |
| Christie      Q. Overbaugh  |   |                                                  | --     |   |                                   |   | -- |   |   |   | -- |   |   |   | -- |   |

----

| Name                        |   | Plan Name |   | Number      ofYearsCreditedService(#) |   | Present      Value ofAccumulatedBenefit($) |   | Payments      DuringLast      Fiscal Year($) |
|-----------------------------|--------|-----------|--------|---------------------------------------|--------|--------------------------------------------|--------|----------------------------------------------|
| George      R. Quist        |   | None      |   | --                                    |   | --                                         |   | --                                           |
| Scott      M. Quist         |   | None      |   | --                                    |   | --                                         |   | --                                           |
| Stephen      M. Sill        |   | None      |   | --                                    |   | --                                         |   | --                                           |
| J.      Lynn Beckstead, Jr. |   | None      |   | --                                    |   | --                                         |   | --                                           |
| G.      Robert Quist        |   | None      |   | --                                    |   | --                                         |   | --                                           |
| Christie      Q. Overbaugh  |   | None      |   | --                                    |   | --                                         |   | --                                           |

----

| Name                       |   | FeesEarned      orPaid      InCash($) |   |   | StockAwards($) |   |   | OptionAwards($) |   |   | Non-EquityIncentive      PlanCompensation($) |   |   | Change      inPension      ValueandNonqualifiedDeferredCompensationEarnings |   |   | All      OtherCompensation($) |   |   | Total($) |   |
|----------------------------|--------|---------------------------------------|--------|--------|----------------|--------|--------|-----------------|--------|--------|----------------------------------------------|--------|--------|-----------------------------------------------------------------------------|--------|--------|-------------------------------|--------|--------|----------|--------|
| Charles      L. Crittenden |   | $                                     | 13,950 |   |           |   | --     |            |   | $      | 3,110                                        |   |   |                                                                        | --     |   |                          |   | --     |     |   |   | -- |   |   | $ | 17,060 |   |
| Robert      G. Hunter      |   |                                  | 13,200 |   |           |   | --     |            |   |   | 3,110                                        |   |   |                                                                        | --     |   |                          |   | --     |     |   |   | -- |   |   |   | 16,310 |   |
| H.      Craig Moody        |   |                                  | 14,700 |   |           |   | --     |            |   |   | 3,110                                        |   |   |                                                                        | --     |   |                          |   | --     |     |   |   | -- |   |   |   | 17,810 |   |
| Norman      G. Wilbur      |   |                                  | 14,700 |   |           |   | --     |            |   |   | 3,110                                        |   |   |                                                                        | --     |   |                          |   | --     |     |   |   | -- |   |   |   | 17,810 |   |

----

----

| Name                        |   | ExecutiveContributionsIn      Last FY($) |   |   | RegistrantContributionsIn      Last FY($) |   |   | AggregateEarnings      in LastFY($) |   |   | Aggregate      Withdrawals/Distributions($) |   |   | AggregateBalance      at LastFYE($) |   |
|-----------------------------|--------|------------------------------------------|--------|--------|-------------------------------------------|--------|--------|-------------------------------------|--------|--------|---------------------------------------------|--------|--------|-------------------------------------|--------|
| George      R. Quist        |   |                                     | --     |   |                                      | $      | 24,200 |                                |   |   | --                                          |   |   |                                | --     |   |   | $ | 198,274 |   |
| Scott      M. Quist         |   |                                     | --     |   |                                      |   | 25,300 |                                |   |   | --                                          |   |   |                                | --     |   |   |   | 219,418 |   |
| Stephen      M. Sill        |   |                                     | --     |   |                                      |   | 14,179 |                                |   |   | --                                          |   |   |                                | --     |   |   |   | 69,381 |   |
| J.      Lynn Beckstead, Jr. |   |                                     | --     |   |                                      |   | 21,166 |                                |   |   | --                                          |   |   |                                | --     |   |   |   | 111,046 |   |
| G.      Robert Quist        |   |                                     | --     |   |                                      |   | 13,529 |                                |   |   | --                                          |   |   |                                | --     |   |   |   | 98,881 |   |
| Christie      Q. Overbaugh  |   |                                     | --     |   |                                      |   | 10,752 |                                |   |   | --                                          |   |   |                                | --     |   |   |   | 81,485 |   |

----

----

|                                                                                                     |   |   | Class ACommon Stock     |      |   | Class CCommon Stock  |   |   | Class A and Class CCommon Stock |   |
|----------------------------------------------------------------------------------------------------------|--------|--------|-------------------------|-----------|--------|----------------------|--------|--------|---------------------------------|--------|
|                                                                                                     |   |   |                    |      |   |                 |   |   |                            |   |   |   |   |   |   |   |   |   |   |
| Name and Address (1)                                                                                     |   |   | AmountBeneficiallyOwned |      |   | Percent      ofClass |   |   | AmountBeneficiallyOwned         |   |   | Percent      ofClass |   |   | AmountBeneficiallyOwned |   |   | Percent      ofClass |   |
| George      R. and Shirley C. Quist      Family      Partnership, Ltd. (2) |   |   |                    | 552,325   |   |                 |   | 7.3%   |                            |   |   | 3,888,102 |   |   |   | 45.6% |   |   |   | 4,440,427 |   |   |   | 27.6% |   |
| Employee      Stock      Ownership      Plan (3)                           |   |   |                    | 616,260   |   |                 |   | 8.2%   |                            |   |   | 1,797,839 |   |   |   | 21.1% |   |   |   | 2,414,099 |   |   |   | 15.0% |   |
| George      R. Quist (4)(5)(7)(8)                                                                        |   |   |                    | 563,174   |   |                 |   | 7.5%   |                            |   |   | 547,963 |   |   |   | 6.4% |   |   |   | 1,111,137 |   |   |   | 6.9% |   |
| Scott      M. Quist (4)(7)(9)                                                                            |   |   |                    | 453,901   |   |                 |   | 6.0%   |                            |   |   | 1,513,111 |   |   |   | 17.7% |   |   |   | 1,967,012 |   |   |   | 12.2% |   |
| Associated      Investors (10)                                                                           |   |   |                    | 91,142    |   |                 |   | 1.2%   |                            |   |   | 667,154 |   |   |   | 7.8% |   |   |   | 758,296 |   |   |   | 4.7% |   |
| G.      Robert Quist (6)(11)                                                                             |   |   |                    | 152,675   |   |                 |   | 2.0%   |                            |   |   | 270,489 |   |   |   | 3.2% |   |   |   | 423,164 |   |   |   | 2.6% |   |
| J.      Lynn Beckstead, Jr., (6)(12)                                                                     |   |   |                    | 191,080   |   |                 |   | 2.5%   |                            |   |   | - |   |   |   | - |   |   |   | 191,080 |   |   |   | 1.2% |   |
| Stephen      M. Sill (6)                                                                                 |   |   |                    | 84,917    |   |                 |   | 1.1%   |                            |   |   | - |   |   |   | - |   |   |   | 84,917 |   |   |   | * |   |
| Christie      Q. Overbaugh (13)                                                                          |   |   |                    | 101,777   |   |                 |   | 1.3%   |                            |   |   | 122,131 |   |   |   | 1.4% |   |   |   | 223,908 |   |   |   | 1.4% |   |
| Robert      G. Hunter, M.D., (4)(14)                                                                     |   |   |                    | 10,548    |   |                 |   | *      |                            |   |   | - |   |   |   | - |   |   |   | 10,548 |   |   |   | * |   |
| Norman      G. Wilbur (15)                                                                               |   |   |                    | 8,254     |   |                 |   | *      |                            |   |   | - |   |   |   | - |   |   |   | 8,254 |   |   |   | * |   |
| Charles      L. Crittenden (16)                                                                          |   |   |                    | 10,331    |   |                 |   | *      |                            |   |   | - |   |   |   | - |   |   |   | 10,331 |   |   |   | * |   |
| H.      Craig Moody (17)                                                                                 |   |   |                    | 7,936     |   |                 |   | *      |                            |   |   | - |   |   |   | - |   |   |   | 7,936 |   |   |   | * |   |
| All      directors and executive officers    (10      persons) (4)(5)(6)(7)          |   |   |                    | 2,136,918 |   |                 |   | 28.3%  |                            |   |   | 6,341,796 |   |   |   | 74.3% |   |   |   | 8,478,714 |   |   |   | 52.7% |   |

----

----

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

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

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

|   | 3.1 | Articles      of Restatement of Articles of Incorporation(4) |
|--------|-----|--------------------------------------------------------------|

|   | 3.2 | Amended      Bylaws (6) |
|--------|-----|-------------------------|

|   | 4.1 | Specimen      Class A Stock Certificate (1) |
|--------|-----|---------------------------------------------|

|   | 4.2 | Specimen      Class C Stock Certificate (1) |
|--------|-----|---------------------------------------------|

|   | 4.3 | Specimen      Preferred Stock Certificate and Certificate of Designation of Preferred      Stock (1) |
|--------|-----|------------------------------------------------------------------------------------------------------|

|   | 10.1 | Restated      and Amended Employee Stock Ownership Plan and Trust Agreement      (1) |
|--------|------|--------------------------------------------------------------------------------------|

|   | 10.2 | 2003      Stock Option Plan (5) |
|--------|------|---------------------------------|

|   | 10.3 | 2006      Director Stock Option Plan (13) |
|--------|------|-------------------------------------------|

|   | 10.4 | Deferred      Compensation Agreement with George R. Quist(2) |
|--------|------|--------------------------------------------------------------|

|   | 10.5 | Deferred      Compensation Plan (3) |
|--------|------|-------------------------------------|

|   | 10.6 | Employment      agreement with J. Lynn Beckstead, Jr.(7) |
|--------|------|----------------------------------------------------------|

|   | 10.7 | Employment      agreement with Scott M. Quist (8) |
|--------|------|---------------------------------------------------|

|   | 10.8 | Stock      Purchase Agreement among Security National Life Insurance Company,      Southern Security Life Insurance Company, Memorial Insurance Company of      America, and the shareholders of Memorial Insurance Company      (9) |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.9 | Reinsurance      Agreement between Security National Life Insurance Company and Memorial      Insurance Company of America (10) |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------|

|   | 10.10 | Trust      Agreement between Security National Life Insurance Company and Memorial      Insurance Company of America (10) |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------|

|   | 10.11 | Promissory      Note between Memorial Insurance Company as Maker and Security National      Life Insurance Company as Payee(10) |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------|

|   | 10.12 | Security      Agreement between Memorial Insurance Company as Debtor and Security      National Life Insurance Company as Secured Party  (10) |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 10.13 | Surplus      Contribution Note between Memorial Insurance Company of America as Maker      and Southern Security Life Insurance Company as Payee  (10) |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.14 | Guaranty      Agreement by Security National Life Insurance Company and Southern      Security Life Insurance Company as Guarantors  (10) |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.15 | Administrative      Services Agreement between Security National Life Insurance Company and      Memorial Insurance Company of America(10) |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.16 | Reinsurance      Agreement between Security National Life Insurance Company and Southern      Security Life Insurance Company(11) |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------|

|   | 10.17 | Trust      Agreement among Security National Life Insurance Company, Southern      Security Life Insurance Company and Zions First National Bank      (11) |
|--------|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.18 | Stock      Purchase Agreement among Security National Life Insurance Company,      Southern Security Life Insurance Company and American Network Insurance      Company (12) |
|--------|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.19 | Escrow      Agreement among Security National Life Insurance Company, Southern      Security Life Insurance Company, American Network Insurance Company and      Mackey Price Thompson & Ostler(12) |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.20 | Escrow      Agreement among American Network Insurance Company, Security National Life      Insurance Company, Southern Security Life Insurance Company, and Preferred      Insurance Capital Consultants, LLC(12) |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.21 | Agreement      and Plan of Complete Liquidation of Southern Security Life Insurance      Company into Security National Life Insurance Company  (12) |
|--------|-------|------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.22 | Assignment      between Southern Security Life Insurance Company and Security National      Life Insurance Company (12) |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------|

|   | 10.23 | Assignment      between Southern Security Life Insurance Company and Security National      Life Insurance Company (13) |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------|

|   | 10.24 | Unit      Purchase Agreement among Security National Financial Corporation, C &      J Financial, LLC, Henry Culp, Jr., and Culp Industries Inc.      (14) |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.25 | Consulting      Agreement with Henry Culp, Jr.,(14) |
|--------|-------|-----------------------------------------------------|

|   | 10.26 | Employment      Agreement with Kevin O. Smith (14) |
|--------|-------|----------------------------------------------------|

|   | 10.27 | Non-Competition      and Confidentiality Agreement with Henry Culp, Jr.,  (14) |
|--------|-------|--------------------------------------------------------------------------------|

|   | 10.28 | Stock      Purchase Agreement among Security National Life Insurance Company, Capital      Reserve Life Insurance Company, and the shareholders of Capital Reserve      Life Insurance Company (15) |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.29 | Indemnification      Agreement among Security National Life Insurance Company, Capital Reserve      Life Insurance Company, and the shareholders of Capital Reserve Life      Insurance Company (16) |
|--------|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.30 | Escrow      Agreement among Security National Insurance Company, Capital Reserve Life      Insurance Company, the shareholders of Capital Reserve Life Insurance      Company, and Mackey Price Thompson & Ostler as Escrow Agent      (16) |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.31 | Reinsurance      Agreement between Security National Life Insurance Company and Capital      Reserve Life Insurance Company (16) |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------|

|   | 10.32 | Subsidiaries      of the Registrant |
|--------|-------|-------------------------------------|

|   | 31.1 | Certification      pursuant to 18 U.S.C. Section 1350, as enacted by Section 302 of the      Sarbanes-Oxley Act of 2002 |
|--------|------|-------------------------------------------------------------------------------------------------------------------------|

|   | 31.2 | Certification      pursuant to 18 U.S.C. Section 1350, as enacted by Section 302 of the      Sarbanes-Oxley Act of 2002 |
|--------|------|-------------------------------------------------------------------------------------------------------------------------|

|   | 32.1 | Certification      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of      the Sarbanes-Oxley Act of 2002 |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------|

|   | 32.2 | Certification      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of      the Sarbanes-Oxley Act of 2002 |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------|

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

|   | (2) | Incorporated      by reference from Annual Report on Form 10-K, as filed on March 31,      1989 |
|--------|-----|-------------------------------------------------------------------------------------------------|

|   | (3) | Incorporated      by reference from Annual Report on Form 10-K, as filed on April 3,      2002 |
|--------|-----|------------------------------------------------------------------------------------------------|

|   | (4) | Incorporated      by reference from Report on Form 8-K/A as filed on January 8,      2003 |
|--------|-----|-------------------------------------------------------------------------------------------|

|   | (5) | Incorporated      by reference from Schedule 14A Definitive Proxy Statement, Filed on June      5, 2003, relating to the Company’s Annual Meeting of      Shareholders |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (6) | Incorporated      by reference from Report on Form 10-Q, as filed on November 14,      2003 |
|--------|-----|---------------------------------------------------------------------------------------------|

|   | (7) | Incorporated      by reference from Report on Form 10-K, as filed on March 30,      2004 |
|--------|-----|------------------------------------------------------------------------------------------|

----

|   | (8) | Incorporated      by reference from Report on Form 10-Q, as filed on August 13,      2004 |
|--------|-----|-------------------------------------------------------------------------------------------|

|   | (9) | Incorporated      by reference from Report on Form 8-K, as filed on September 27,      2005 |
|--------|-----|---------------------------------------------------------------------------------------------|

|   | (10) | Incorporated      by reference from Report on Form 8-K, as filed on January 5,      2006 |
|--------|------|------------------------------------------------------------------------------------------|

|   | (11) | Incorporated      by reference from Report on Form 8-K, as filed on January 11,      2006 |
|--------|------|-------------------------------------------------------------------------------------------|

|   | (12) | Incorporated      by reference from Report on Form 8-K, as filed on January 12,      2007 |
|--------|------|-------------------------------------------------------------------------------------------|

|   | (13) | Incorporated      by reference from Report on Form 10-K, as filed on March 31,      2007 |
|--------|------|------------------------------------------------------------------------------------------|

|   | (14) | Incorporated      by reference from Report on Form 8-K, as filed on August 8,      2007 |
|--------|------|-----------------------------------------------------------------------------------------|

|   | (15) | Incorporated      by reference from Report on Form 8-K, as filed November 2,      2007 |
|--------|------|----------------------------------------------------------------------------------------|

|   | (16) | Incorporated      by reference from Report on Form 8-K, as filed January 14,      2008 |
|--------|------|----------------------------------------------------------------------------------------|

|   | (b) | Reports      on Form 8-K: |
|--------|-----|---------------------------|

----

| Dated:  March      31, 2008 | By:  /s/George R.      Quist                                                |
|---------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                  | George      R. Quist,                                                                                                                                                                                                                                                                                                            |
|                                  | Chairman      of the Board and Chief ExecutiveOfficer                                                                                                                                                                                                                                                                            |

| SIGNATURE                                                                                                                            |   | TITLE                                                                                                                |   | DATE                |
|--------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------|--------|---------------------|
|                                                                                                                                 |   |                                                                                                                 |   |                |
| /s/ George R.      Quist                  George      R. Quist           |   | Chairman      of the Board andChief      Executive Officer(Principal      Executive Officer)                         |   | March      31, 2008 |
|                                                                                                                                 |   |                                                                                                                 |   |                |
| /s/ Scott M.      Quist                    Scott      M. Quist |   | President,      Chief Operating Officer and      Director                                                            |   | March      31, 2008 |
|                                                                                                                                 |   |                                                                                                                 |   |                |
| /s/ Stephen M.      Sill                   Stephen      M. Sill     |   | Vice      President, Treasurer andChief      Financial Officer(Principal      Financial and Accounting      Officer) |   | March      31, 2008 |
|                                                                                                                                 |   |                                                                                                                 |   |                |
| /s/ J. Lynn Beckstead,      Jr.   J.      Lynn Beckstead, Jr.                                                              |   | Vice      President and Director                                                                                     |   | March      31, 2008 |
|                                                                                                                                 |   |                                                                                                                 |   |                |
| /s/ Charles L.      Crittenden     Charles      L. Crittenden                                                    |   | Director                                                                                                             |   | March      31, 2008 |
|                                                                                                                                 |   |                                                                                                                 |   |                |
| /s/ H. Craig      Moody                 H.      Craig Moody                   |   | Director                                                                                                             |   | March      31, 2008 |
|                                                                                                                                 |   |                                                                                                                 |   |                |
| /s/ Norman G.      Wilbur        Norman      G. Wilbur                                       |   | Director                                                                                                             |   | March      31 2008  |
|                                                                                                                                 |   |                                                                                                                 |   |                |
| /s/ Robert G.      Hunter                Robert      G. Hunter                     |   | Director                                                                                                             |   | March      31, 2008 |

----

|                                                                                                                    |   | December 31, |       |
|-------------------------------------------------------------------------------------------------------------------------|--------|--------------|------------|
|                                                                                                                    |   | 2007         |       |   | 2006 |   |
| Assets                                                                                                                  |   |         |       |   |   |   |
|                                                                                                                    |   |         |       |   |   |   |
| Cash                                                                                                                    |   | $            | 197,698    |   |   | $ | 159,639 |   |
| Common      Stock                                                                                                       |   |         | 39,000     |   |   |   | 39,000 |   |
| Investment      in subsidiaries (equity method)                                                                         |   |         | 70,864,844 |   |   |   | 68,317,685 |   |
|                                                                                                                    |   |         |       |   |   |   |   |   |
| Receivables:                                                                                                            |   |         |       |   |   |   |   |   |
| Receivable      from affiliates                                                                                         |   |         | 6,523,437  |   |   |   | 7,145,494 |   |
| Allowance      for doubtful accounts                                                                                    |   |         | --         |   |   |   | (16,528 | ) |
| Total      receivables                                                                                                  |   |         | 6,523,437  |   |   |   | 7,128,966 |   |
|                                                                                                                    |   |         |       |   |   |   |   |   |
| Property      and equipment, at cost, net of accumulated depreciation of $1,233,146 for      2007 and $964,204 for 2006 |   |         | 571,720    |   |   |   | 491,447 |   |
|                                                                                                                    |   |         |       |   |   |   |   |   |
| Other      assets                                                                                                       |   |         | 286,480    |   |   |   | -- |   |
|                                                                                                                    |   |         |       |   |   |   |   |   |
| Total      Assets                                                                                                       |   | $            | 78,483,179 |   |   | $ | 76,136,737 |   |

----

|                                                                                                                                                                                                   |   | December 31, |       |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|------------|
|                                                                                                                                                                                                   |   | 2007         |       |   | 2006 |   |
| Liabilities      and Stockholders’ Equity                                                                                                                                                        |   |         |       |   |   |   |
| Liabilities                                                                                                                                                                                            |   |         |       |   |   |   |
| Bank      loans payable:                                                                                                                                                                               |   |         |       |   |   |   |
| Current      installments                                                                                                                                                                              |   | $            | 2,026,012  |   |   | $ | 1,689,219 |   |
| Long-term                                                                                                                                                                                              |   |         | 1,586,458  |   |   |   | 2,995,252 |   |
| Notes      and contracts payable:                                                                                                                                                                      |   |         |       |   |   |   |   |   |
| Current      installments                                                                                                                                                                              |   |         | 190,860    |   |   |   | 961 |   |
| Long-term                                                                                                                                                                                              |   |         | 115,230    |   |   |   | -- |   |
| Advances      from affiliated companies                                                                                                                                                                |   |         | 8,990,428  |   |   |   | 9,501,370 |   |
| Other      liabilities and accrued expenses                                                                                                                                                            |   |         | 1,298,401  |   |   |   | 1,052,846 |   |
| Income      taxes                                                                                                                                                                                      |   |         | 8,491,638  |   |   |   | 7,926,393 |   |
| Total      liabilities                                                                                                                                                                                 |   |         | 22,699,027 |   |   |   | 23,166,041 |   |
|                                                                                                                                                                                                   |   |         |       |   |   |   |   |   |
| Stockholders’      Equity                                                                                                                                                                        |   |         |       |   |   |   |   |   |
| Class      A common stock $2.00 par value; 20,000,000 shares  authorized ;      issued 7,885,229 shares in 2007 and 7,533,230 shares in    2006                                              |   |         | 15,770,458 |   |   |   | 15,066,460 |   |
| Class      B non-voting common stock-$1.00 par value; 5,000,000 shares authorized;      none issued or  outstanding                                                                          |   |         |       |   |   |   | -- |   |
| Class      C convertible common stock, $0.20 par value; 15,000,000 shares authorized;      issued 8,530,699 shares in 2007 and 7,117,591 shares in    2006                                             |   |         | 1,706,140  |   |   |   | 1,423,518 |   |
|                                                                                                                                                                                                   |   |         |       |   |   |   |   |   |
| Additional      paid-in capital                                                                                                                                                                        |   |         | 17,737,172 |   |   |   | 17,064,488 |   |
| Accumulated      other comprehensive income                                                                                                                                                            |   |         | 1,596,791  |   |   |   | 1,703,155 |   |
| Retained      earnings                                                                                                                                                                                 |   |         | 21,104,156 |   |   |   | 20,495,063 |   |
| Treasury      stock at cost- (1,104,484 Class A shares and -0-  Class C shares      in 2007; 1,195,127 Class A shares and 145,045 Class C shares in 2006, held      by affiliated companies) |   |         | (2,130,565 | ) |   |   | (2,781,988 | ) |
| Total      stockholders’ equity                                                                                                                                                                  |   |         | 55,784,152 |   |   |   | 52,970,696 |   |
| Total      Liabilities and Stockholders’ Equity                                                                                                                                                  |   | $            | 78,483,179 |   |   | $ | 76,136,737 |   |

----

|                                                            |   | Year Ended December 31, |      |
|-----------------------------------------------------------------|--------|-------------------------|-----------|
|                                                            |   | 2007                    |      |   | 2006 |   |   | 2005 |   |
| Revenue                                                         |   |                    |      |   |   |   |   |   |   |
| Net      investment income                                      |   | $                       | 772       |   |   | $ | 1,478 |   |   | $ | 7 |   |
| Fees      from affiliates                                       |   |                    | 4,098,718 |   |   |   | 4,187,330 |   |   |   | 4,217,198 |   |
| Total      revenue                                              |   |                    | 4,099,490 |   |   |   | 4,188,808 |   |   |   | 4,217,205 |   |
| Benefits      and Expenses:                                     |   |                    |      |   |   |   |   |   |   |   |   |   |
| General      and administrative expenses                        |   |                    | 2,007,974 |   |   |   | 1,937,033 |   |   |   | 2,298,886 |   |
| Interest      expense                                           |   |                    | 234,743   |   |   |   | 349,650 |   |   |   | 457,413 |   |
| Expenses      to affiliates                                     |   |                    | 131,133   |   |   |   | 131,133 |   |   |   | 200,516 |   |
| Total      benefits and expenses                                |   |                    | 2,373,850 |   |   |   | 2,417,816 |   |   |   | 2,956,815 |   |
|                                                            |   |                    |      |   |   |   |   |   |   |   |   |   |
| Earnings      before income taxes, and earnings of subsidiaries |   |                    | 1,725,640 |   |   |   | 1,770,992 |   |   |   | 1,260,390 |   |
| Income      tax expense                                         |   |                    | (605,099  | ) |   |   | (1,472,098 | ) |   |   | (960,153 | ) |
| Equity      in earnings of subsidiaries                         |   |                    | 1,144,855 |   |   |   | 4,825,556 |   |   |   | 3,187,643 |   |
|                                                            |   |                    |      |   |   |   |   |   |   |   |   |   |
| Net      earnings                                               |   | $                       | 2,265,396 |   |   | $ | 5,124,450 |   |   | $ | 3,487,880 |   |

----

|                                                                                          |   | Year Ended December 31, |       |
|-----------------------------------------------------------------------------------------------|--------|-------------------------|------------|
|                                                                                          |   | 2007                    |       |   | 2006 |   |   | 2005 |   |
| Cash      flows from operating activities:                                                    |   |                    |       |   |   |   |   |   |   |
| Net      earnings                                                                             |   | $                       | 2,265,396  |   |   | $ | 5,124,450 |   |   | $ | 3,487,880 |   |
| Adjustments      to reconcile net earnings to net cash provided by operating      activities: |   |                    |       |   |   |   |   |   |   |   |   |   |
| Depreciation      and amortization                                                            |   |                    | 268,942    |   |   |   | 198,241 |   |   |   | 193,520 |   |
| Undistributed      earnings of affiliates                                                     |   |                    | (1,144,855 | ) |   |   | (4,825,556 | ) |   |   | (3,187,643 | ) |
| Provision      for income taxes                                                               |   |                    | 605,099    |   |   |   | 1,472,095 |   |   |   | 960,153 |   |
| Change      in assets and liabilities:                                                        |   |                    |       |   |   |   |   |   |   |   |   |   |
| Accrued      Investment Income from Affiliates                                                |   |                    | (286,480   | ) |   |   | -- |   |   |   | -- |   |
| Accounts      receivable                                                                      |   |                    | 16,586     |   |   |   | (1 | ) |   |   | 1,540 |   |
| Other      assets                                                                             |   |                    | --         |   |   |   | 61,950 |   |   |   | 4,878 |   |
| Other      liabilities                                                                        |   |                    | 265,675    |   |   |   | (40,675 | ) |   |   | 127,871 |   |
| Net      cash provided by operating activities                                                |   |                    | 1,990,363  |   |   |   | 1,990,504 |   |   |   | 1,588,199 |   |
|                                                                                          |   |                    |       |   |   |   |   |   |   |   |   |   |
| Cash      flows from investing activities:                                                    |   |                    |       |   |   |   |   |   |   |   |   |   |
| Purchase      of long-term investments                                                        |   |                    | --         |   |   |   | (39,000 | ) |   |   | -- |   |
| Purchase      of equipment                                                                    |   |                    | (349,215   | ) |   |   | (269,942 | ) |   |   | (471,096 | ) |
| Net      cash (used in) provided by investing activities                                      |   |                    | (349,215   | ) |   |   | (308,942 | ) |   |   | (471,096 | ) |
|                                                                                          |   |                    |       |   |   |   |   |   |   |   |   |   |
| Cash      flows from financing activities:                                                    |   |                    |       |   |   |   |   |   |   |   |   |   |
| Checks      written in excess of cash in bank                                                 |   |                    | --         |   |   |   | -- |   |   |   | (492,229 | ) |
| Advances      from (to) affiliates                                                            |   |                    | 78,001     |   |   |   | 352,079 |   |   |   | 922,569 |   |
| Payments      of notes and contracts payable                                                  |   |                    | (1,515,590 | ) |   |   | (2,040,785 | ) |   |   | (1,897,443 | ) |
| Stock      options exercised                                                                  |   |                    | 3,000      |   |   |   | 105,599 |   |   |   | -- |   |
| Proceeds      from borrowings on notes and contracts payable                                  |   |                    | 631,500    |   |   |   | -- |   |   |   | 350,000 |   |
| Purchase      of treasury stock                                                               |   |                    | (800,000   | ) |   |   | (3,901 | ) |   |   | -- |   |
| Sale      of treasury stock                                                                   |   |                    | --         |   |   |   | 208,250 |   |   |   | -- |   |
| Net      cash used in financing activities                                                    |   |                    | (1,603,089 | ) |   |   | (1,378,758 | ) |   |   | (1,117,103 | ) |
| Net      change in cash                                                                       |   |                    | 38,059     |   |   |   | 302,804 |   |   |   | -- |   |
| Cash      at beginning of year                                                                |   |                    | 159,639    |   |   |   | (143,165 | ) |   |   | -- |   |
| Cash      at end of year                                                                      |   | $                       | 197,698    |   |   | $ | 159,639 |   |   | $ | -- |   |

----

|                                                                                                                                                                                             |   | December 31, |      |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|-----------|
|                                                                                                                                                                                             |   | 2007         |      |   | 2006 |   |
| 5.87%      note payable with interest plus monthly principal payment of $134,000,      collateralized by 15,000 shares of Security National Life Insurance      Company stock, due January 2010. |   | $            | 3,129,896 |   |   |  $ | 4,569,116 |   |
|                                                                                                                                                                                             |   |         |      |   |   |   |   |   |
| Mark-to-market      of interest rate swaps adjustment                                                                                                                                            |   |         | (17,426   | ) |   |   | (134,645 | ) |
|                                                                                                                                                                                             |   |         |      |   |   |   |   |   |
| Bank      prime rate less .5% (7.75% at December 31, 2007) revolving line of credit      of $3,750,000, accrued interest paid monthly, unpaid balance due June      2008                         |   |         | 500,000   |   |   |   | 250,000 |   |
| Total      bank loans                                                                                                                                                                            |   |         | 3,612,470 |   |   |   | 4,684,471 |   |
|                                                                                                                                                                                             |   |         |      |   |   |   |   |   |
| Less      current installments                                                                                                                                                                   |   |         | 2,026,012 |   |   |   | 1,689,219 |   |
| Bank      loans, excluding current installments                                                                                                                                                  |   | $            | 1,586,458 |   |   | $ | 2,995,252 |   |

|                                                                                                                                                                                 |   | December 31, |    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|
|                                                                                                                                                                                 |   | 2007         |    |   | 2006 |   |
| 5%      note payable to a former owner of C & J Financial due  in      monthly installments of $16,737 including  principal and      interest, due July 2009 |   |  $      | 305,129 |   |   |  $ | -- |   |
|                                                                                                                                                                                 |   |         |    |   |   |   |   |   |
| Other                                                                                                                                                                                |   |         | 961     |   |   |   | 961 |   |
|                                                                                                                                                                                 |   |         |    |   |   |   |   |   |
| Total      notes and contracts                                                                                                                                                       |   |         | 306,090 |   |   |   | 961 |   |
| Less      current installments                                                                                                                                                       |   |         | 190,860 |   |   |   | 961 |   |
| Notes      and contracts, excluding current installments                                                                                                                             |   | $            | 115,230 |   |   | $ | -- |   |

| 2008       |   | $      | 2,199,446 |   |
|------------|--------|--------|-----------|--------|
| 2009       |   |   | 1,719,114 |   |
| 2010       |   |   | --        |   |
| 2011       |   |   | --        |   |
| Thereafter |   |   | --        |   |
| Total      |   | $      | 3,918,560 |   |

----

|                                                |   | December 31, |      |
|-----------------------------------------------------|--------|--------------|-----------|
|                                                |   | 2007         |      |   | 2006 |   |
| Non-interest      bearing advances from affiliates: |   |         |      |   |   |   |
| Cemetery      and Mortuary subsidiary               |   | $            | 1,459,841 |   |   | $ | 1,459,841 |   |
| Life      insurance subsidiaries                    |   |         | 7,486,604 |   |   |   | 7,997,546 |   |
| Mortgage      subsidiary                            |   |         | 43,983    |   |   |   | 43,983 |   |
|                                                |   | $            | 8,990,428 |   |   | $ | 9,501,370 |   |

----

|                                |   | DirectAmount |       |   | Ceded      toOtherCompanies |   |    | Assumedfrom      OtherCompanies |   |   | NetAmount |   |   | Percentageof      AmountAssumedto Net |       |
|-------------------------------------|--------|--------------|------------|--------|-----------------------------|--------|---------|---------------------------------|--------|--------|-----------|--------|--------|---------------------------------------|------------|
| 2007                                |   |         |       |   |                        |   |    |                            |   |   |      |   |   |                                  |       |
| Life Insurance in force      ($000) |   | $            | 1,243,906  |   |                        | $      | 114,155 |                            |   | $      | 1,190,843 |   |   | $                                     | 2,320,594  |   |   |   | 51.3 | % |
|                                |   |         |       |   |                        |   |    |                            |   |   |      |   |   |                                  |       |   |   |   |   |   |
| Premiums:                           |   |         |       |   |                        |   |    |                            |   |   |      |   |   |                                  |       |   |   |   |   |   |
| Life      Insurance                 |   | $            | 30,886,927 |   |                        | $      | 586,877 |                            |   | $      | 1,713,765 |   |   | $                                     | 32,013,815 |   |   |   | 5.4 | % |
| Accident and Health      Insurance  |   |         | 248,702    |   |                        |   | 189     |                            |   |   | 509       |   |   |                                  | 249,022    |   |   |   | .2 | % |
| Total      premiums                 |   | $            | 31,135,629 |   |                        | $      | 587,066 |                            |   | $      | 1,714,274 |   |   | $                                     | 32,262,837 |   |   |   | 5.3 | % |
|                                |   |         |       |   |                        |   |    |                            |   |   |      |   |   |                                  |       |   |   |   |   |   |
| 2006                                |   |         |       |   |                        |   |    |                            |   |   |      |   |   |                                  |       |   |   |   |   |   |
| Life      Insurance in force ($000) |   | $            | 1,232,142  |   |                        | $      | 122,232 |                            |   | $      | 1,388,552 |   |   | $                                     | 2,498,462  |   |   |   | 55.6 | % |
|                                |   |         |       |   |                        |   |    |                            |   |   |      |   |   |                                  |       |   |   |   |   |   |
| Premiums:                           |   |         |       |   |                        |   |    |                            |   |   |      |   |   |                                  |       |   |   |   |   |   |
| Life      Insurance                 |   | $            | 29,140,230 |   |                        | $      | 328,854 |                            |   | $      | 1,682,855 |   |   | $                                     | 30,494,231 |   |   |   | 5.5 | % |
| Accident      and Health Insurance  |   |         | 281,884    |   |                        |   | 148     |                            |   |   | 524       |   |   |                                  | 282,260    |   |   |   | .2 | % |
| Total      premiums                 |   | $            | 29,422,114 |   |                        | $      | 329,002 |                            |   | $      | 1,683,379 |   |   | $                                     | 30,776,491 |   |   |   | 5.5 | % |
|                                |   |         |       |   |                        |   |    |                            |   |   |      |   |   |                                  |       |   |   |   |   |   |
| 2005                                |   |         |       |   |                        |   |    |                            |   |   |      |   |   |                                  |       |   |   |   |   |   |
| Life      Insurance in force ($000) |   | $            | 1,252,089  |   |                        | $      | 185,364 |                            |   | $      | 1,964,847 |   |   | $                                     | 3,031,572  |   |   |   | 64.8 | % |
|                                |   |         |       |   |                        |   |    |                            |   |   |      |   |   |                                  |       |   |   |   |   |   |
| Premiums:                           |   |         |       |   |                        |   |    |                            |   |   |      |   |   |                                  |       |   |   |   |   |   |
| Life      Insurance                 |   | $            | 26,795,343 |   |                        | $      | 853,088 |                            |   | $      | 942,080   |   |   | $                                     | 26,884,335 |   |   |   | 3.5 | % |
| Accident      and Health Insurance  |   |         | 285,190    |   |                        |   | --      |                            |   |   | 584       |   |   |                                  | 285,774    |   |   |   | .2 | % |
| Total      premiums                 |   | $            | 27,080,533 |   |                        | $      | 853,088 |                            |   | $      | 942,664   |   |   | $                                     | 27,170,109 |   |   |   | 3.5 | % |

----

|                                                                                   |   | Balance      at Beginning of Year |          |   | Additions      Charged to Costs and      Expenses |   |          | Deductions      Disposals and Write-offs |   |   | Balance      at End of Year |   |
|----------------------------------------------------------------------------------------|--------|-----------------------------------|---------------|--------|---------------------------------------------------|--------|---------------|------------------------------------------|--------|--------|-----------------------------|--------|
| For the Year Ended      December 31, 2007                                              |   |                              |          |   |                                              |   |          |                                     |   |   |                        |   |
| Accumulated      depreciation on real estate                                           |   | $                                 | 4,024,710     |   |                                              | $      | 315,680       |                                     |   |   | --                          |   |   | $ | 4,340,390 |   |
|                                                                                   |   |                              |          |   |                                              |   |          |                                     |   |   |                        |   |   |   |   |   |
| Allowance      for losses on mortgage loans on real estate and construction      loans |   |                              | 1,026,576     |   |                                              |   | 420,000       |                                     |   |   | (11,445                     | )      |   |   | 1,435,131 |   |
|                                                                                   |   |                              |          |   |                                              |   |          |                                     |   |   |                        |   |   |   |   |   |
| Accumulated      depreciation on property and equipment                                |   |                              | 13,522,715    |   |                                              |   | 2,232,928     |                                     |   |   | (91,597                     | )      |   |   | 15,664,046 |   |
|                                                                                   |   |                              |          |   |                                              |   |          |                                     |   |   |                        |   |   |   |   |   |
| Allowance      for doubtful accounts                                                   |   |                              | 866,392       |   |                                              |   | 653,905       |                                     |   |   | (227,112                    | )      |   |   | 1,293,185 |   |
|                                                                                   |   |                              |          |   |                                              |   |          |                                     |   |   |                        |   |   |   |   |   |
| Allowance      for doubtful accounts on collateral loans                               |   |                              | 435,726       |   |                                              |   | 57,070        |                                     |   |   | (707                        | )      |   |   | 492,089 |   |
|                                                                                   |   |                              |          |   |                                              |   |          |                                     |   |   |                        |   |   |   |   |   |
| For the Year Ended      December 31, 2006                                              |   |                              |          |   |                                              |   |          |                                     |   |   |                        |   |   |   |   |   |
| Accumulated      depreciation on real estate                                           |   | $                                 | 3,766,259     |   |                                              | $      | $304,711      |                                     |   | $      | (46,260                     | )      |   | $ | 4,024,710 |   |
|                                                                                   |   |                              |          |   |                                              |   |          |                                     |   |   |                        |   |   |   |   |   |
| Allowance      for losses on mortgage loans on real estate and construction loans      |   |                              | 562,909  |   |                                              |   | 463,667  |                                     |   |   | --                     |   |   |   | 1,026,576  |   |
|                                                                                   |   |                              |          |   |                                              |   |          |                                     |   |   |                        |   |   |   |   |   |
| Accumulated      depreciation on property and equipment                                |   |                              | 14,373,406    |   |                                              |   | 1,718,306     |                                     |   |   | (2,568,997                  | )      |   |   | 13,522,715 |   |
|                                                                                   |   |                              |          |   |                                              |   |          |                                     |   |   |                        |   |   |   |   |   |
| Allowance      for doubtful accounts                                                   |   |                              | 868,197       |   |                                              |   | 137,379       |                                     |   |   | (139,184                    | )      |   |   | 866,392 |   |
|                                                                                   |   |                              |          |   |                                              |   |          |                                     |   |   |                        |   |   |   |   |   |
| Allowance      for doubtful accounts on collateral loans                               |   |                              | 339,218       |   |                                              |   | 100,000       |                                     |   |   | (3,492                      | )      |   |   | 435,726 |   |
|                                                                                   |   |                              |          |   |                                              |   |          |                                     |   |   |                        |   |   |   |   |   |
| For the Year Ended      December 31, 2005                                              |   |                              |          |   |                                              |   |          |                                     |   |   |                        |   |   |   |   |   |
| Accumulated      depreciation on real estate                                           |   | $                                 | 3,487,638     |   |                                              | $      | 291,540       |                                     |   | $      | (12,919                     | )      |   | $ | 3,766,259 |   |
|                                                                                   |   |                              |          |   |                                              |   |          |                                     |   |   |                        |   |   |   |   |   |
| Allowance      for losses on mortgage loans on real estate and construction      loans |   |                              | 530,829       |   |                                              |   | 46,973        |                                     |   |   | (14,893                     | )      |   |   | 562,909 |   |
|                                                                                   |   |                              |          |   |                                              |   |          |                                     |   |   |                        |   |   |   |   |   |
| Accumulated      depreciation on property and equipment                                |   |                              | 12,776,758    |   |                                              |   | 1,802,482     |                                     |   |   | (205,834                    | )      |   |   | 14,373,406 |   |
|                                                                                   |   |                              |          |   |                                              |   |          |                                     |   |   |                        |   |   |   |   |   |
| Allowance      for doubtful accounts                                                   |   |                              | 1,026,432     |   |                                              |   | 33,775        |                                     |   |   | (192,010                    | )      |   |   | 868,197 |   |
|                                                                                   |   |                              |          |   |                                              |   |          |                                     |   |   |                        |   |   |   |   |   |
| Allowance      for doubtful accounts on collateral loans                               |   |                              | 140,580       |   |                                              |   | 200,000       |                                     |   |   | (1,362                      | )      |   |   | 339,218 |   |

----

----

|  | ExhibitNo. | Document      Name |
|--|------------|--------------------|

|  |         10.32  | Subsidiaries      of the Registrant |
|--|-------------------------------|-------------------------------------|

|   |          31.1 | Certification      pursuant to 18 U.S.C. Section 1350, as enacted by Section 302 of the      Sarbanes-Oxley Act of 2002 |
|--------|------------------------------|-------------------------------------------------------------------------------------------------------------------------|

|   |          31.2 | Certification      pursuant to 18 U.S.C. Section 1350, as enacted by Section 302 of the      Sarbanes-Oxley Act of 2002 |
|--------|------------------------------|-------------------------------------------------------------------------------------------------------------------------|

|   |          32.1 | Certification      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of      the Sarbanes-Oxley Act of 2002 |
|--------|------------------------------|----------------------------------------------------------------------------------------------------------------------------------|

|   |          32.2 | Certification      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of      the Sarbanes-Oxley Act of 2002 |
|--------|------------------------------|----------------------------------------------------------------------------------------------------------------------------------|

----