UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, D.C.

                                    FORM 10-Q

             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934



For Quarter Ended June 30, 2006              Commission File Number: 0-9341
-------------------------------              ------------------------------



                     SECURITY NATIONAL FINANCIAL CORPORATION
                            Exact Name of Registrant



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


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

Registrant's telephone number, including Area Code       (801) 264-1060



Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by  Sections  13 or 15(d)  of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days. YES X NO

Indicate by check mark whether the registrant is a large  accelerated  filer, an
accelerated  filer, or a  non-accelerated  filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Securities  Exchange Act
of 1934. (Check one):

Large accelerated filer  [ ] Accelerated filer [  ] Non-accelerated filer  [X]

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the  Securities  Exchange Act of 1934):  YES NO X ---

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

Class A Common Stock, $2.00 par value                     5,862,370
-------------------------------------                  --------------
         Title of Class                         Number of Shares Outstanding
                                                   as of June 30, 2006

Class C Common Stock, $.20 par value                      6,642,929
------------------------------------                   ---------------
         Title of Class                         Number of Shares Outstanding
                                                    as of June 30, 2006


<PAGE>


            SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES
                                    FORM 10-Q

                           QUARTER ENDED JUNE 30, 2006

                                TABLE OF CONTENTS


                         PART I - FINANCIAL INFORMATION



Item 1   Financial Statements                                          Page No.
------                                                                 --------

          Condensed Consolidated Statement of Earnings -
          Three and six months ended June 30, 2006 and 2005 (unaudited)....3

          Condensed Consolidated Balance Sheet -
          June 30, 2006, (unaudited) and December 31, 2005...............4-5

          Condensed Consolidated Statement of Cash Flows -
          Six months ended June 30, 2006 and 2005 (unaudited)..............6

          Notes to Condensed Consolidated Financial
          Statements (unaudited)........................................7-14


Item 2    Management's Discussion and Analysis of Financial Condition
          and Results of Operations....................................14-18

Item 3   Quantitative and Qualitative Disclosures about Market Risk.......18
------

Item 4   Controls and Procedures..........................................18
------

                           PART II - OTHER INFORMATION

            Other Information..........................................19-21

            Signature Page................................................22

            Certifications.............................................23-25


<PAGE>
<TABLE>
<CAPTION>


                     SECURITY NATIONAL FINANCIAL CORPORATION
                                AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                                   (Unaudited)


                                                        Three Months Ended                      Six Months Ended
                                                             June 30,                               June 30,
Revenues:                                          2006                 2005                 2006              2005
--------                                           ----                 ----                 ----              ----
<S>                                          <C>                    <C>                <C>                 <C>
Insurance premiums and other
   considerations                               $ 7,403,252          $ 6,712,209         $14,957,522        $13,892,729
Net investment income                             5,504,372            5,097,838          10,579,058          9,443,101
Net mortuary and cemetery sales                   3,154,220            2,845,816           6,209,018          5,731,184
Realized (losses) gains on investments
    and other assets                                 60,255                 (376)             57,671             23,314
Mortgage fee income                              17,930,096           17,094,986          34,559,687         30,266,092
Other                                                94,254               93,583             187,186            310,320
                                               ------------          -----------        ------------       ------------
   Total revenues                                34,146,449           31,844,056          66,550,142         59,666,740
                                               ------------          -----------        ------------       ------------

Benefits and expenses:
Death benefits                                    3,567,731            2,909,547           7,389,690          6,425,475
Surrenders and other policy benefits                410,236              353,510             997,361            822,877
Increase in future policy benefits                3,014,873            2,442,725           5,347,880          5,070,915
Amortization of deferred policy and
   pre-need acquisition costs and cost of
   insurance acquired                               757,542              863,697           1,564,997          1,719,438
General and administrative expenses:
   Commissions                                   13,686,056           13,641,898          26,048,316         24,215,223
   Salaries                                       4,247,101            3,935,749           8,489,853          7,748,483
   Other 5,909,659                                5,399,279           11,200,425           9,915,402
Interest expense                                  1,087,760            1,027,433           2,108,551          1,669,121
Cost of goods and services sold
   mortuaries and cemeteries                        572,624              567,116           1,208,045          1,114,956
                                               ------------          -----------        ------------       ------------
   Total benefits and expenses                   33,253,582           31,140,954          64,355,118         58,701,890
                                               ------------          -----------        ------------       ------------

Earnings before income taxes                        892,867              703,102           2,195,024            964,850
Income tax expense                                 (169,228)            (151,627)           (457,719)          (133,467)
                                               ------------          -----------        ------------       ------------
      Net earnings                             $    723,639          $   551,475        $  1,737,305       $    831,383
                                               ============          ===========        ============       ============

Net earnings per common share                          $.11                 $.09                $.27               $.14
                                                       ====                 ====                ====               ====
Weighted average outstanding
   common shares                                  6,521,620            6,079,732           6,519,102          6,079,725
                                                ===========          ===========         ===========       ============

Net earnings per common share
   -assuming dilution                                 $.11                  $.09                $.26               $.14
                                                      ====                  ====                ====               ====
Weighted average outstanding
   common shares assuming-dilution                6,706,321            6,081,747           6,655,129          6,104,237
                                                ===========          ===========         ===========        ===========


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


<PAGE>
<TABLE>
<CAPTION>


                     SECURITY NATIONAL FINANCIAL CORPORATION
                                AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS



                                                         June 30, 2006       December 31,
                                                          (Unaudited)           2005
Assets:
<S>                                                      <C>               <C>
Fixed maturity securities
  held to maturity, at amortized cost                     $94,417,532      $89,780,942
Fixed maturity securities available
  for sale, at estimated fair value                         5,539,104        6,597,161
Equity securities available for sale,
  at estimated fair value                                   4,997,529       12,346,939
Mortgage loans on real estate and construction loans,
  net of allowances for losses                             86,543,305       72,793,811
Real estate, net of accumulated
  depreciation and allowances for losses                    6,370,981        7,012,399
Policy, student and other loans net of allowance for
  doubtful accounts                                        12,084,195       12,391,569
Short-term investments                                     10,599,227        3,211,590
                                                        -------------    -------------
     Total investments                                    220,551,873      204,134,411
                                                        -------------    -------------
Restricted assets of cemeteries and mortuaries              5,257,539        5,240,099
                                                        -------------    -------------
Cash and cash equivalents                                  10,088,209       16,632,966
                                                        -------------    -------------
Receivables:
  Trade contracts                                           6,451,686        5,733,142
  Mortgage loans sold to investors                         53,361,706       53,970,231
  Receivable from agents                                    2,117,384        1,992,877
  Other                                                     1,319,613          958,851
                                                        -------------    -------------
     Total receivables                                     63,250,389       62,655,101
  Allowance for loan losses and doubtful accounts          (1,318,416)      (1,191,106)
                                                        -------------    -------------
     Net receivables                                       61,931,973       61,463,995
                                                        -------------    -------------
Policyholder accounts on deposit with reinsurer                    --        6,572,756
Cemetery land and improvements held for sale                8,334,391        8,498,227
Accrued investment income                                   2,633,637        2,197,576
Deferred policy and pre-need
  contract acquisition costs                               26,736,965       24,048,638
Property and equipment, net                                14,540,833       14,747,276
Cost of insurance acquired                                 12,372,837       12,663,221
Cemetery perpetual care trust investments                   1,132,596        1,152,493
Goodwill 683,191                                              683,191
Other                                                       2,011,157        1,610,624
                                                        -------------    -------------
     Total assets                                        $366,275,201     $359,645,473
                                                        =============    =============

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


<PAGE>


                     SECURITY NATIONAL FINANCIAL CORPORATION
                                AND SUBSIDIARIES
                CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)



                                              June 30, 2006      December 31,
                                               (Unaudited)          2005
                                              -------------      -----------
Liabilities:
Future life, annuity, and other benefits       $264,672,164     $260,822,803
Unearned premium reserve                          4,076,141        3,157,918
Bank loans payable                                8,828,193        8,946,321
Notes and contracts payable                         869,704        1,326,284
Deferred pre-need cemetery and mortuary
  contract revenues                              11,048,665       10,828,994
Accounts payable                                  1,082,418        1,533,065
Funds held under reinsurance treaties                 --           1,129,747
Other liabilities and accrued expenses            9,999,074        9,427,644
Income taxes                                     15,089,425       14,601,029
                                               ------------     ------------
     Total liabilities                          315,665,784      311,773,805
                                               ------------     ------------

Commitments and contingencies                       --               --
                                               ------------     ------------

Non-controlling interest in
   perpetual care trusts                          2,230,725        2,173,250
                                               ------------     ------------

Stockholders' Equity:
Common stock:
  Class A: $2.00 par value, authorized
     10,000,000 shares, issued 7,106,447
     shares in 2006 and 7,098,363 shares
     in 2005                                     14,212,894       14,196,726
  Class C:  convertible, $0.20 par value,
     authorized 7,500,000 shares,
     issued 6,781,067 shares in 2006
     and 6,781,060 shares in 2005                 1,356,213        1,356,212
                                               ------------     ------------
     Total common stock                          15,569,107       15,552,938
Additional paid-in capital                       15,681,975       15,650,344
Accumulated other comprehensive income (loss)
  and other items, net of deferred taxes          1,040,998          117,647
Retained earnings                                19,158,251       17,460,024
Treasury stock at cost (1,244,077 Class A shares
     and 138,138 Class C shares in 2006;
     1,251,104 Class A shares and 138,138
     Class C shares in 2005 held
     by affiliated companies)                    (3,071,639)      (3,082,535)
                                               ------------    -------------
     Total stockholders' equity                  48,378,692       45,698,418
                                               ------------    -------------
         Total liabilities and
           stockholders' equity                $366,275,201     $359,645,473
                                               ============     ============


See accompanying notes to condensed consolidated financial statements.


<PAGE>
<TABLE>
<CAPTION>


                     SECURITY NATIONAL FINANCIAL CORPORATION
                                AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)


                                                                      Six Months Ended June 30,
                                                                           2006           2005
                                                                           ----           ----
<S>                                                                 <C>              <C>
Cash flows from operating activities:
      Net cash provided by operating activities                       $12,925,511      $9,059,575
                                                                     ------------    ------------

Cash flows from investing activities: Securities held to maturity:
      Purchase - fixed maturity securities                             (6,874,419)     (2,482,355)
      Calls and maturities - fixed
         maturity securities                                            1,926,606       6,741,875
   Securities available for sale:
      Purchase - fixed maturity securities                               (134,262)             --
      Sales (purchases) - equity securities                             9,164,900          (7,009)
   Purchases of short-term investments                                 (7,387,637)     (9,439,274)
   Sales of short-term investments                                             --       9,184,153
   Purchases of restricted assets                                          12,500        (113,859)
   Change in assets for perpetual care trusts                              19,897        (110,498)
   Amount received for perpetual care trusts                               57,475          60,725
   Mortgage, policy, and other loans made                             (36,282,485)    (39,974,165)
   Payments received for mortgage,
      policy, and other loans                                          22,858,386      33,568,539
   Purchases of property and equipment                                   (664,104)     (1,025,081)
   Purchases of real estate                                            (1,686,113)     (2,787,026)
   Sale of real estate                                                  2,039,638       1,352,071
                                                                     ------------    ------------
         Net cash used in
            investing activities                                      (16,949,618)     (5,031,904)
                                                                     ------------    ------------

Cash flows from financing activities:
   Annuity contract receipts                                            2,992,944       2,895,516
   Annuity contract withdrawals                                        (5,013,124)     (4,834,366)
   Sale of treasury stock                                                  19,619              --
   Repayment of bank loans and notes and
      contracts payable                                                (1,270,089)     (2,119,365)
   Proceeds from borrowing on notes and
      contracts                                                           750,000              --
                                                                     ------------    ------------
   Net cash used in financing activities                               (2,520,650)     (4,058,215)
                                                                     ------------    ------------

Net change in cash and cash equivalents                                (6,544,757)        (30,544)

Cash and cash equivalents at beginning of period                       16,632,966      15,333,668
                                                                     ------------    ------------

Cash and cash equivalents at end of period                            $10,088,209     $15,303,124
                                                                     ============    ============

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


<PAGE>



            SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                            June 30, 2006 (Unaudited)


1.   Basis of Presentation

The accompanying  unaudited consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United States
of America for interim  financial  information and with the instructions to Form
10-Q and Article 10 of Regulation S-X.  Accordingly,  they do not include all of
the  information  and disclosures  required by accounting  principles  generally
accepted in the United  States of America  for  complete  financial  statements.
These financial  statements  should be read in conjunction with the consolidated
financial  statements  of the  Company  and  notes  thereto  for the year  ended
December 31, 2005,  included in the  Company's  Annual Report on Form 10-K (file
number 0-9341).  In the opinion of management,  all  adjustments  (consisting of
normal recurring  accruals)  considered  necessary for a fair  presentation have
been  included.  Operating  results for the three and six months  ended June 30,
2006 are not necessarily  indicative of the results that may be expected for the
year ending December 31, 2006.

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

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

Certain 2005 amounts have been  reclassified  to bring them into conformity with
the 2006 presentation.

2.       Recent Accounting Pronouncements

In December 2004, the Financial  Accounting  Standards  Board (FASB) issued SFAS
No. 153,  Exchange of Non-monetary  Assets.  SFAS No. 153 amends APB Opinion No.
29,  Accounting for  Non-monetary  Transactions,  to eliminate the exception for
non-monetary exchanges of similar productive assets. The Company was required to
apply this  statement to  non-monetary  exchanges  after  December 31, 2005. The
adoption  of this  standard  did not have a  material  effect  on the  Company's
financial position or results of operations.

In June  2005,  the FASB  issued  SFAS No.  154,  Accounting  Changes  and Error
Corrections,  a replacement of APB Opinion No. 20, Accounting Changes,  and FASB
No. 3, Reporting Accounting Changes in Interim Financial  Statements.  Statement
154 applies to all voluntary  changes in accounting  principle,  and changes the
requirements  for  accounting  for  and  reporting  of a  change  in  accounting
principle.  Statement 154 requires  retrospective  application to prior periods'
financial  statements of a voluntary change in accounting principle unless it is
impracticable.  It is effective for accounting changes and corrections of errors
made in fiscal years beginning after December 15, 2005. The adoption of SFAS 154
did not have a material impact on the Company's financial statements.


<PAGE>


            SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                           June 30, 2006, (Unaudited)


In June 2005, the FASB Emerging  Issues Task Force ("EITF")  reached a consensus
on  Issue  No.  05-6,   Determining  the   Amortization   Period  for  Leasehold
Improvements.  The guidance requires that leasehold  improvements  acquired in a
business  combination  or purchased  subsequent  to the  inception of a lease be
amortized  over the  lesser  of the  useful  life of the  assets  or a term that
includes  renewals  that are  reasonably  assured  at the  date of the  business
combination or purchase.  The Company adopted EITF No. 05-06 on January 1, 2006.
The  adoption of EITF No. 05-6 did not have a material  effect on the  Company's
financial position or results of operations.

In September  2005, the AICPA issued  Statement of Position 05-1,  Accounting by
Insurance  Enterprises for Deferred Acquisition Costs ("DAC") in Connection with
Modifications  or Exchanges  of  Insurance  Contracts,  ("SOP  05-1").  SOP 05-1
provides  guidance on  accounting by insurance  enterprises  for DAC on internal
replacements of insurance and investment contracts. An internal replacement is a
modification in product benefits,  features,  rights or coverages that occurs by
the exchange of a contract for a new contract, or by amendment,  endorsement, or
rider to a  contract,  or by the  election  of a feature  or  coverage  within a
contract.   Modifications  that  result  in  a  replacement   contract  that  is
substantially  changed from the replaced  contract should be accounted for as an
extinguishment  of the replaced  contract.  Unamortized  DAC,  unearned  revenue
liabilities and deferred sales  inducements  from the replaced  contract must be
written-off.  Modifications  that  result in a  contract  that is  substantially
unchanged from the replaced  contract  should be accounted for as a continuation
of the  replaced  contract.  SOP 05-1 is  effective  for  internal  replacements
occurring  in fiscal years  beginning  after  December  15,  2006,  with earlier
adoption  encouraged.  Initial  application  of  SOP  05-1  should  be as of the
beginning of the entity's fiscal year. The Company is expected to adopt SOP 05-1
effective January 1, 2007. Adoption of this statement is not expected to have an
impact on the Company's consolidated  financial statements;  however, the impact
has not yet been determined.

In February  2006,  the FASB issued SFAS No. 155,  Accounting for Certain Hybrid
Financial  Instruments -- an amendment of FASB  Statements No. 133 and 140 (SFAS
155).  SFAS 155 amends SFAS No. 133,  Accounting for Derivative  Instruments and
Hedging  Activities and SFAS No. 140,  Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities and related interpretations.
SFAS 155 permits fair value  remeasurement  for any hybrid financial  instrument
that contains an embedded  derivative that otherwise  would require  bifurcation
and  clarifies  which  interest-only  strips and  principal-only  strips are not
subject to recognition as liabilities.  SFAS 155 eliminates the prohibition on a
qualifying special-purpose entity from holding a derivative financial instrument
that pertains to a beneficial  interest other than another derivative  financial
instrument.  SFAS 155 is effective for the Company for all financial instruments
acquired  or issued  beginning  January 1, 2007.  The impact of adoption of this
statement on the Company's  consolidated  financial statements,  if any, has not
yet been determined.

In March  2006,  the FASB  issued  SFAS No. 156,  Accounting  for  Servicing  of
Financial  Assets - an amendment of FASB Statement No. 140 (SFAS 156).  SFAS 156
amends SFAS 140 Accounting  for Transfers and Servicing of Financial  Assets and
Extinguishments of Liabilities and related interpretations. SFAS 156 requires an
entity to  recognize  a  servicing  asset or  servicing  liability  each time it
undertakes  an  obligation  to service a financial  asset.  It also requires all
separately recognized servicing assets and servicing liabilities to be initially
measured at fair value, if practicable. SFAS 156 permits an entity to use either
the amortization  method or the fair value measurement  method for each class of
separately  recognized servicing assets and servicing  liabilities.  SFAS 156 is
effective for the Company as of January 1, 2007.  The impact of adoption of this
statement on the Company's  consolidated  financial statements,  if any, has not
yet been determined.


<PAGE>


            SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                           June 30, 2006, (Unaudited)


In June 2006, the FASB issued FIN No. 48,  Accounting for  Uncertainty in Income
Taxes-an  interpretation  of FASB Statement No 109 (FIN 48). FIN 48 prescribes a
recognition  threshold and  measurement  attribute  for the financial  statement
recognition and measurement of a tax position taken or expected to be taken in a
tax  return.  FIN 48 also  provides  guidance on  derecognition  classification,
interest  and  penalties,   accounting  in  interim  periods,   disclosure,  and
transition. The interpretation is effective for the fiscal years beginning after
December  15,  2006.  The  impact  of  adoption  of this  interpretation  on the
Company's  consolidated   financial  statements,   if  any,  has  not  yet  been
determined.

3.   Comprehensive Income

For the three months ended June 30, 2006 and 2005,  total  comprehensive  income
amounted to $450,857 and $625,380,  respectively.  This decrease of $175,000 was
primarily  the result of an  increase in net income of  $172,000,  a decrease in
derivatives of $134,000,  and a $213,000 decrease in unrealized gains and losses
in securities available for sale.

For the six months  ended June 30,  2006 and 2005,  total  comprehensive  income
amounted to $2,660,656 and $705,436,  respectively.  This increase of $1,955,000
was primarily  the result of an increase in net income of $906,000,  an increase
in derivatives of $450,000,  and an increase of $599,000 in unrealized gains and
losses in securities available for sale.

4.   Stock-Based Compensation

Stock-Based Compensation

Effective  January 1, 2006,  the Company  adopted the provisions of Statement of
Financial Accounting Standards No. 123R,  "Share-Based Payment" ("FAS 123R") for
its stock-based  compensation plans. The Company previously  accounted for these
plans under the recognition and measurement  principles of Accounting Principles
Board Opinion No. 25,  "Accounting for Stock Issued to Employees" ("APB 25") and
related interpretations and disclosure requirements established by SFAS No. 123,
"Accounting  for Stock-Based  Compensation"  ("SFAS 123") as amended by SFAS No.
148, "Accounting for Stock Based Compensation - Transition and Disclosure."

Under APB 25, no compensation expense was recorded in earnings for the Company's
stock-based  options granted under its compensation plans. The pro forma effects
on net income and  earnings per share for the options and awards  granted  under
the  plans  were  instead  disclosed  in a note  to the  consolidated  financial
statements.  Under SFAS 123R, all  stock-based  compensation  is measured at the
grant date, based on the fair value of the option or award, and is recognized as
an expense in earnings over the requisite  service,  which is typically  through
the date the options vest.

The Company adopted SFAS 123R using the modified  prospective method. Under this
method, for all stock-based  options and awards granted prior to January 1, 2006
that remain outstanding as of that date, compensation cost is recognized for the
unvested  portion  over  the  remaining  requisite  service  period,  using  the
grant-date fair value measured under the original provisions of SFAS 123 for pro
forma and  disclosure  purposes.  Furthermore,  compensation  costs will also be
recognized  for any awards  issued,  modified,  repurchased  or cancelled  after
January 1, 2006.


<PAGE>


            SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                           June 30, 2006, (Unaudited)


4.    Stock-Based Compensation (Continued)

The Company  utilized the  Black-Scholes-Merton  model for  calculating the fair
value pro forma  disclosures under SFAS 123 and will continue to use this model,
which is an acceptable  valuation  approach under SFAS 123R. The following table
summarizes the  Black-Scholes-Merton  option-pricing  model  assumptions used to
compute the  weighted-average  fair value of stock  options  granted  during the
periods below:

                                                    Six Months Ended
                                                        June 30,
                                                  2006           2005
                                                  ----           ----
Dividend yield                                    N/A*            5%
Expected volatility                               N/A*           39%
Risk-free interest rate                           N/A*          3.4%
Expected holding period (in years)                N/A*           7.5
Weighted-average fair value of options granted    N/A*         $1.92
----------------
* Not applicable as there were no options granted during the period.

No  options  were  granted  for  the six  months  ended  June  30,  2006.  Total
compensation costs relating to stock-based  compensation was not material during
the six months ended June 30, 2006,  including the effects from adoption of SFAS
123R, which would have previously been presented in a pro forma  disclosure,  as
discussed above.

The following table  illustrates the effect on net income and earnings per share
as if the Company had applied the fair-value  recognition provisions of SFAS 123
to all of its stock-based  compensation  awards for periods prior to adoption of
SFAS 123R,  and the actual  effect on net income and  earnings per share for the
period subsequent to the adoption of SFAS 123R:

                                                    Six Months Ended
                                                        June 30,
                                                  2006                 2005
                                                  -----                ----
Net earnings, as reported                      $1,737,305            $831,383
Total stock-based employee compensation
   recognized                                      --                  --
Total stock-based employee compensation
   expense determined under fair value
   based method for all awards                     --                  --
                                               ----------            --------
Pro forma net earnings                         $1,737,305            $831,383
                                               ==========            ========

Basic earnings per share, as reported                $.27                $.14
Diluted earnings per share as reported               $.26                $.14

Basic earnings per share, pro forma                  $.27                $.14
Diluted earnings per share, pro forma                $.26                $.14


<PAGE>



            SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                           June 30, 2006, (Unaudited)


5.    Earnings Per Share

The basic and diluted earnings per share amounts were calculated as follows:

                                                Three Months Ended June 30,
                                                2006                  2005
                                                ----                  ----
Numerator:
      Net income                             $  723,639           $   551,475
                                             ==========           ===========
Denominator:
      Denominator for basic earnings per
        share-weighted-average shares         6,521,620             6,079,732
                                             ----------            ----------

      Effect of dilutive securities:
        Employee stock options                  183,470                 1,714
        Stock appreciation rights                 1,231                   301
                                             ----------           -----------
      Dilutive potential common shares          184,701                 2,015
                                             ----------           -----------
      Denominator for diluted earnings per
        share-adjusted weighted-average
        shares and  assumed conversions       6,706,321             6,081,747
                                             ==========           ===========

      Basic earnings per share                     $.11                  $.09
                                                   ====                  ====
      Diluted earnings per share                   $.11                  $.09
                                                   ====                  ====

Earnings  per share  amounts  have been  adjusted for the effect of annual stock
dividends.

                                                  Six Months Ended June 30,
                                                  2006                2005
                                                  ----                ----
Numerator:
      Net income                              $1,737,305          $   831,383
                                              ==========          ===========
Denominator:
      Denominator for basic earnings per share-
        weighted-average shares                6,519,102            6,079,725
                                              ----------          -----------

      Effect of dilutive securities:
        Employee stock options                   134,946               23,971
        Stock appreciation rights                  1,081                  541
                                              ----------          -----------
      Dilutive potential common shares           136,027               24,512
                                              ----------        -------------
      Denominator for diluted earnings
        per share-adjusted weighted-average
        shares and assumed conversions         6,655,129            6,104,237
                                             ===========          ===========

      Basic earnings per share                      $.27                 $.14
                                                    ====                 ====

      Diluted earnings per share                    $.26                 $.14
                                                    ====                 ====

Earnings  per share  amounts  have been  adjusted for the effect of annual stock
dividends.


<PAGE>
<TABLE>
<CAPTION>


            SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                            June 30, 2006 (Unaudited)


6.  Business Segment
                                        Life             Cemetery/                            Reconciling
                                      Insurance          Mortuary           Mortgage             Items        Consolidated
                                     ----------         ----------          ---------          -----------    -------------
<S>                                <C>                 <C>                <C>           <C>                  <C>
For the Three Months Ended
June 30, 2006
---------------------------
   Revenues from
      external customers            $10,698,047        $3,452,483         $19,995,919   $         -            $34,146,449

   Intersegment revenues              1,264,601            23,001             121,182         (1,408,784)          --

   Segment profit (loss)
      before income taxes               947,324           233,273            (287,730)           --                892,867

For the Three Months Ended
June 30, 2005
---------------------------
   Revenues from
      external customers           $  9,522,023       $ 3,140,844         $19,181,189$          --            $ 31,844,056

   Intersegment revenues              1,120,778            15,334              83,639         (1,219,751)          --

   Segment profit (loss)
      before income taxes               698,306            67,689             (62,893)           --                703,102

For the Six Months Ended
June 30, 2006
------------------------
   Revenues from
      external customers             $21,609,384       $6,769,172         $38,171,586      $      -            $66,550,142

   Intersegment revenues               2,654,467           46,002             212,618         (2,913,087)          --

   Segment profit (loss)
      before income taxes              2,053,401          605,128            (463,505)           --              2,195,024

   Identifiable assets               352,247,310       51,897,683          18,891,648        (56,761,440)      366,275,201

For the Six Months Ended
June 30, 2005
------------------------
   Revenues from
      external customers            $ 19,578,539      $ 6,333,917         $33,754,284$           --           $ 59,666,740

   Intersegment revenues               2,369,536           38,335             163,040         (2,570,911)           --

   Segment profit (loss)
      before income taxes              1,336,145          421,887            (793,182)           --                964,850

   Identifiable assets               306,689,103       48,786,278          15,123,942        (51,870,626)      318,728,697

</TABLE>

<PAGE>


            SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                           June 30, 2006, (Unaudited)


7.  Merger and Acquisition Transactions

Southern Security Life

As of December  31,  2004,  the  Company's  wholly  owned  subsidiary,  Security
National Life Insurance Company ("Security National Life"), and its wholly owned
subsidiary,  SSLIC Holding, owned approximately 77% of the outstanding shares of
common stock of Southern Security Life.

On January 1, 2005, Security National Life and SSLIC Holding Company completed a
merger  transaction  with Southern  Security Life Insurance  Company  ("Southern
Security Life"). Under the terms of the merger and pursuant to the Agreement and
Plan of Reorganization,  dated August 25, 2004,  including the amendment thereto
dated December 27, 2004, SSLIC Holding Company was merged with and into Southern
Security  Life.  The merger  transaction  resulted  in  Southern  Security  Life
becoming  a  wholly  owned  subsidiary  of  Security   National  Life,  and  the
unaffiliated  stockholders  of Southern  Security Life,  holding an aggregate of
490,816 shares of common stock, or approximately  23% of the outstanding  common
shares of Southern Security Life, becoming entitled to receive $3.84 in cash for
each issued and  outstanding  share of their common  stock of Southern  Security
Life, or an aggregate of $1,884,733.  This  consideration  was primarily paid to
those unaffiliated stockholders during 2005.

Memorial Insurance Company of America

On  December  29,  2005,  Security  National  Life and  Southern  Security  Life
completed  a stock  purchase  transaction  with  Memorial  Insurance  Company of
America, an Arkansas domiciled insurance company ("Memorial Insurance Company"),
to purchase all of the outstanding  shares of common stock of Memorial Insurance
Company.  Under the  terms of the  transaction,  the  stockholders  of  Memorial
Insurance Company received a total purchase consideration of $13,500,000 for all
of the  outstanding  common  shares of  Memorial  Insurance  Company,  with each
shareholder having received a pro-rata share of the total amount of the purchase
consideration  based upon the number of shares  each  shareholder  owned.  As of
December 31, 2005,  Memorial Insurance Company had 116,116 policies in force and
approximately 50 agents.

The unaudited consolidated pro forma results of operations assuming consummation
of the  purchase  of  Memorial  Insurance  Company as of  January  1, 2005,  are
summarized as follows:

                                           Unaudited Pro Forma

                              Three Months Ended         Six Months Ended
                                     2005                      2005
                                     -----                     -----
                                 In thousands except earnings per share
     Total revenue                 $32,759                   $61,497
     Net earnings                $     760                   $ 1,250
     Basic earnings per share         $.13                      $.21
     Diluted earnings per share       $.12                      $.20


<PAGE>


            SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                           June 30, 2006, (Unaudited)


8.   Other Business Activity

The City of Phoenix (in Arizona) began  condemnation  proceedings during 2004 on
the  property  where the  Camelback  Funeral  Home was located  for  purposes of
constructing a light rail facility.  The city placed $1,200,000 in escrow to pay
the Company for the property  that was  condemned.  The  carrying  amount on the
Company's  financial  statements  for the land  and  building  of the  Camelback
Funeral Home at June 30, 2006 and December  31, 2005 was  $678,889.  The Company
has had an  independent  appraisal and  negotiated a higher sales price with the
city.  In July 2006,  the Company  settled  with the City of Phoenix for a sales
price of $1,440,000.  As a result of the sale, the Company will recognize a gain
of $761,111  during the third  quarter of 2006.  The first payment of $1,200,000
was made by the City of Phoenix in August 2006 with the  remaining  amount to be
received within 30 days of the city council's approval of the sales price.

The  Company  received  a letter  dated  November  29,  2004 on  behalf of Roger
Gornichec,  who the Company recognizes as having been an independent contractor.
Gornichec had concluded his services as an agent selling insurance in the spring
of 2003 and his license to sell cemetery  plots was not renewed in the summer of
2004.  Gornichec  asserted  that he was an employee  contrary  to the  Company's
position.

The  claims  made in the  letter on behalf of  Gornichec  included  but were not
limited   to,   wrongful    termination   in   violation   of   public   policy,
misrepresentation, age discrimination,  whistle-blower retaliation, interference
with  economic  advantage,  breach of  contract,  breach of the covenant of good
faith and fair dealing,  and  infliction of emotional  distress.  Gornichec also
claimed he was owed a certain  amount from a  retirement  plan.  The letter from
Gornichec's  attorney proposed a settlement in the amount of $420,000.  Based on
its investigation,  the Company believes Gornichec was an independent contractor
rather than an employee,  and there was no justification  for the claims and the
settlement amount sought. The Company reached a settlement with Gornichec, which
resulted in the Company paying $27,000 to Gornichec.

Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations
         ---------------------------------------------------------------

Overview

The Company's  operations  over the last several years  generally  reflect three
trends or events which the Company expects to continue:  (i) increased attention
to "niche" insurance  products,  such as the Company's funeral plan policies and
traditional  whole-life  products;   (ii)  emphasis  on  cemetery  and  mortuary
business; and (iii) originating and refinancing mortgage loans.

During the six months ended June 30, 2006,  Security  National  Mortgage Company
("SNMC")  experienced an increase in revenue and expenses due to the increase in
loan volume of its operations.  SNMC is a mortgage lender incorporated under the
laws of the State of Utah. SNMC is approved and regulated by the Federal Housing
Administration  (FHA), a department of the U.S.  Department of Housing and Urban
Development  (HUD),  to originate  mortgage  loans that  qualify for  government
insurance in the event of default by the borrower.  SNMC obtains loans primarily
from independent brokers and correspondents.  SNMC funds the loans from internal
cash flows and lines of credit from financial  institutions.  SNMC receives fees
from the  borrowers  and other  secondary  fees from third party  investors  who
purchase  the loans from SNMC.  SNMC  primarily  sells all of its loans to third
party  investors  and does not retain  servicing to these  loans.  SNMC pays the
brokers and  correspondents  a commission  for loans that are  brokered  through
SNMC. SNMC  originated and sold 6,002  ($993,094,000)  and 5,766  ($904,478,000)
loans, respectively, for the six months ended June 30, 2006 and 2005.


<PAGE>

Results of Operations

Second Quarter of 2006 Compared to Second Quarter of 2005

Total revenues  increased by $2,302,000,  or 7.2%, to $34,146,000  for the three
months ended June 30, 2006, from $31,844,000 for the three months ended June 30,
2005.  Contributing to this increase in total revenues was an $835,000  increase
in mortgage  fee income,  a $691,000  increase in  insurance  premiums and other
considerations,  a  $407,000  increase  in net  investment  income,  a  $308,000
increase in net mortuary and cemetery sales,  and a $61,000 increase in realized
gains on investments and other assets.

Insurance premiums and other considerations  increased by $691,000, or 10.3%, to
$7,403,000  for the three months ended June 30, 2006,  from  $6,712,000  for the
comparable  period  in 2005.  This  increase  was  primarily  due to  additional
premiums  realized  from new  insurance  sales and from the purchase of Memorial
Insurance Company on December 29, 2005.

Net  investment  income  increased by $407,000,  or 8.0%, to $5,504,000  for the
three months ended June 30, 2006, from  $5,097,000 for the comparable  period in
2005.  This increase was primarily  attributable  to additional  interest income
from increased  long-term bond and mortgage purchases over the comparable period
in 2005 and  additional  investment  income  from  the  assets  received  in the
purchase of Memorial Insurance Company.

Net mortuary and cemetery sales  increased by $308,000,  or 10.8%, to $3,154,000
for the three months ended June 30, 2006,  from  $2,846,000  for the  comparable
period in 2005. This increase was due to increased at-need sales in the cemetery
and  mortuary  operations  and  increased  pre-need  land sales in the  cemetery
operations.

Mortgage fee income increased by $835,000, or 4.9%, to $17,930,000 for the three
months ended June 30, 2006, from $17,095,000 for the comparable  period in 2005.
This  increase was primarily  attributable  to an increase in the number of loan
originations  during  the  second  quarter  of 2006  due to the  opening  of new
mortgage offices and increased  production in existing mortgage  offices,  which
resulted in financing a greater number of mortgage loans.

Total benefits and expenses were  $33,254,000,  or 97.4% of total revenues,  for
the three months ended June 30, 2006,  as compared to  $31,141,000,  or 97.8% of
total  revenues,  for the  comparable  period in 2005.  This increase  primarily
resulted from increased loan costs at SecurityNational Mortgage Company due to a
greater  number  of  loan  originations  and  additional   expenses  related  to
operations  of  Memorial  Insurance  Company,  which the  Company  purchased  on
December 29, 2005.

Death  benefits,  surrenders and other policy  benefits,  and increase in future
policy benefits increased by an aggregate of $1,287,000, or 22.6%, to $6,993,000
for the three months ended June 30, 2006,  from  $5,706,000  for the  comparable
period in 2005.  This  increase was primarily the result of an increase in death
benefits and surrenders and other policy benefits.

Amortization  of  deferred  policy and  pre-need  acquisition  costs and cost of
insurance  acquired  decreased by $106,000,  or 12.3%, to $758,000 for the three
months ended June 30, 2006,  from  $864,000 for the  comparable  period in 2005.
This  reduction  was  primarily  due  to  the  realization  of  improvements  in
persistency and expenses.


<PAGE>



General  and   administrative   expenses   increased  by  $866,000,or  3.8%,  to
$23,843,000 for the three months ended June 30, 2006,  from  $22,977,000 for the
comparable period in 2005. This increase  primarily resulted from an increase in
commissions  due to a  greater  number of  mortgage  loan  originations  made by
SecurityNational  Mortgage  Company  during  the  second  quarter  of 2006,  the
additional  expenses  related to the operations of Memorial  Insurance  Company,
which the Company  purchased  on December 29, 2005,  and  increased  salaries of
existing employees and an increase in the number of employees.

Interest  expense  increased by $60,000,  or 5.8%, to  $1,088,000  for the three
months ended June 30, 2006, from  $1,028,000 for the comparable  period in 2005.
This increase was primarily due to increased  warehouse lines of credit required
for a greater number of warehoused mortgage loans by  SecurityNational  Mortgage
Company.

Cost of goods and services sold of the mortuaries  and  cemeteries  increased by
$6,000,  or 1.1%,  to $573,000 for the three  months  ended June 30, 2006,  from
$567,000 for the comparable  period in 2005.  This increase was primarily due to
increased pre-need cemetery land sales.

Six Months Ended June 30, 2006 Compared to Six Months Ended June 30, 2005

Total revenues  increased by $6,883,000,  or 11.5%,  to $66,550,000  for the six
months ended June 30, 2006,  from  $59,667,000 for the six months ended June 30,
2005.  Contributing to this increase in total revenues was a $4,294,000 increase
in mortgage fee income,  a $1,065,000  increase in insurance  premiums and other
considerations,  a $1,136,000  increase in net investment income, and a $478,000
increase in net mortuary and cemetery sales.  This increase was partially offset
by a $126,000 decrease in other revenues.

Insurance premiums and other considerations increased by $1,065,000, or 7.7%, to
$14,958,000  for the six months ended June 30, 2006,  from  $13,893,000  for the
comparable  period  in 2005.  This  increase  was  primarily  due to  additional
premiums  realized  from new  insurance  sales and from the purchase of Memorial
Insurance Company on December 29, 2005.

Net investment income increased by $1,136,000,  or 12.0%, to $10,579,000 for the
six months ended June 30, 2006,  from  $9,443,000 for the  comparable  period in
2005.  This increase was primarily  attributable  to additional  interest income
from increased  long-term bond and mortgage purchases over the comparable period
in 2005 and additional investment income from the assets received as a result of
the purchase of Memorial Insurance Company.

Net mortuary and cemetery  sales  increased by $478,000,  or 8.3%, to $6,209,000
for the six months  ended June 30,  2006,  from  $5,731,000  for the  comparable
period in 2005. This increase was due to increased at-need sales at the cemetery
and  mortuary  operations  and  increased  pre-need  land sales in the  cemetery
operations.

Other revenues  decreased by $123,000,  or 39.7%, to $187,000 for the six months
ended  June 30,  2006 from  $310,000  for the  comparable  period in 2005.  This
decrease was due to a reduction in other  revenues from the  Company's  mortuary
operations.

Mortgage fee income  increased by $4,294,000,  or 14.2%,  to $34,560,000 for the
six months ended June 30, 2006, from  $30,266,000  for the comparable  period in
2005.  This increase was primarily  attributable to an increase in the number of
loan originations  during the first six months of 2006 due to the opening of new
mortgage offices and increased  production in existing mortgage  offices,  which
resulted in financing a greater number of mortgage loans.

Total benefits and expenses were  $64,355,000,  or 96.7% of total revenues,  for
the six months  ended June 30,  2006,  as compared to  $58,702,000,  or 98.4% of
total  revenues,  for the  comparable  period in 2005.  This increase  primarily
resulted from increased loan costs at SecurityNational Mortgage Company due to a
greater  number  of  loan  originations  and  additional   expenses  related  to
operations  of  Memorial  Insurance  Company,  which the  Company  purchased  on
December 29, 2005.


<PAGE>


Death  benefits,  surrenders and other policy  benefits,  and increase in future
policy  benefits  increased  by  an  aggregate  of  $1,416,000,   or  11.5%,  to
$13,735,000  for the six months ended June 30, 2006,  from  $12,319,000  for the
comparable period in 2005. This increase was primarily the result of an increase
in death benefits and surrenders and other policy benefits.

Amortization  of  deferred  policy and  pre-need  acquisition  costs and cost of
insurance  acquired  decreased by $154,000,  or 9.0%, to $1,565,000  for the six
months ended June 30, 2006, from  $1,719,000 for the comparable  period in 2005.
This  reduction  was  primarily  due  to  the  realization  of  improvements  in
persistency and expenses.

General  and  administrative  expenses  increased  by  $3,860,000,  or 9.2%,  to
$45,739,000  for the six months ended June 30, 2006,  from  $41,879,000  for the
comparable period in 2005. This increase  primarily resulted from an increase in
commissions  due to a  greater  number of  mortgage  loan  originations  made by
SecurityNational  Mortgage  Company  during  the first six  months of 2006,  the
additional  expenses  related to the operations of Memorial  Insurance  Company,
which the Company  purchased  on December 29, 2005,  and  increased  salaries of
existing employees and an increase in the number of employees.

Interest  expense  increased by $440,000,  or 26.3%,  to $2,109,000  for the six
months ended June 30, 2006, from  $1,669,000 for the comparable  period in 2005.
This increase was primarily due to increased  warehouse lines of credit required
for a greater number of warehoused mortgage loans by  SecurityNational  Mortgage
Company.

Cost of goods and services sold of the mortuaries  and  cemeteries  increased by
$93,000,  or 8.3%,  to $1,208,00  for the six months  ended June 30, 2006,  from
$1,115,000 for the comparable period in 2005. This increase was primarily due to
increased cemetery and mortuary sales.

Liquidity and Capital Resources

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

The  Company  attempts  to  match  the  duration  of  invested  assets  with its
policyholder  and  cemetery  and  mortuary  liabilities.  The  Company  may sell
investments other than those  held-to-maturity  in the portfolio to help in this
timing;  however,  to date, that has not been necessary.  The Company  purchases
short-term  investments  on a  temporary  basis  to  meet  the  expectations  of
short-term requirements of the Company's products.

The  Company's  investment  philosophy  is intended to provide a rate of return,
which will persist during the expected duration of policyholder and cemetery and
mortuary liabilities regardless of future interest rate movements.

The Company's  investment  policy is to invest  predominantly  in fixed maturity
securities,  mortgage  loans,  and warehousing of mortgage loans on a short-term
basis before selling the loans to investors in accordance with the  requirements
and laws  governing  the life  insurance  subsidiaries.  Bonds owned by the life
insurance  subsidiaries amounted to $99,957,000 as of June 30, 2006, compared to
$96,378,000 as of December 31, 2005. This represents


<PAGE>



44.3% and 46.0% of the total insurance-related  investments as of June 30, 2006,
and  December  31, 2005,  respectively.  Generally,  all bonds owned by the life
insurance  subsidiaries  are  rated by the  National  Association  of  Insurance
Commissioners.  Under this  rating  system,  there are six  categories  used for
rating  bonds.  At June 30, 2006 and December 31, 2005, 3%  ($3,349,000)  and 4%
($3,431,000) of the Company's total bond  investments  were invested in bonds in
rating categories three through six, which are considered non-investment grade.

The Company has  classified  certain of its fixed income  securities,  including
high-yield  securities,  in its  portfolio  as  available  for  sale,  with  the
remainder  classified as held to maturity.  However,  in accordance with Company
policy,  any such securities  purchased in the future will be classified as held
to maturity.  Business conditions,  however, may develop in the future which may
indicate a need for a higher level of liquidity in the investment portfolio.  In
that event the  Company  believes  it could  sell  short-term  investment  grade
securities before liquidating higher-yielding longer-term securities.

The Company is subject to risk based capital guidelines established by statutory
regulators  requiring  minimum  capital  levels based on the  perceived  risk of
assets, liabilities,  disintermediation, and business risk. At June 30, 2006 and
December  31,  2005,  the life  insurance  subsidiary  exceeded  the  regulatory
criteria.

The Company's total  capitalization  of  stockholders'  equity and bank debt and
notes payable was $58,077,000 as of June 30, 2006, as compared to $55,971,000 as
of December 31, 2005.  Stockholders' equity as a percent of total capitalization
was 83% and 82% as of June 30, 2006 and December 31, 2005, respectively.

Lapse  rates  measure the amount of  insurance  terminated  during a  particular
period. The Company's lapse rate for life insurance in 2005 was 7.9% as compared
to a rate of 9.0% for 2004.  The 2006 lapse rate to date has been  approximately
the same as 2005.

At June 30, 2006, $21,468,060 of the Company's consolidated stockholders' equity
represents  the statutory  stockholders'  equity of the Company's life insurance
subsidiaries.  The life  insurance  subsidiaries  cannot pay a  dividend  to its
parent company without the approval of insurance regulatory authorities.

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

There have been no  significant  changes since the annual report Form 10-K filed
for the year ended December 31, 2005.

Item 4.   Controls and Procedures

     (a)  Evaluation  of  disclosure  controls and  procedures  - The  Company's
principal  executive  officer and principal  financial officer have reviewed and
evaluated the effectiveness of the Company's  disclosure controls and procedures
(as defined in Rule 13a-15(e) or 15d-15(e) under the Securities  Exchange Act of
1934 (the "Exchange  Act") as of June 30, 2005.  Based on that  evaluation,  the
principal  executive officer and the principal  financial officer have concluded
that the Company's  disclosure controls and procedures are effective,  providing
them with  material  information  relating  to the  Company  as  required  to be
disclosed in the reports the Company  files or submits under the Exchange Act on
a timely basis.

     (b) Changes in internal controls - There were no significant changes in the
Company's  internal  controls over financial  reporting or in other factors that
could  significantly  affect the  Company's  internal  controls  and  procedures
subsequent  to the date of their  most  recent  evaluation,  nor were  there any
significant  deficiencies  or  material  weaknesses  in the  Company's  internal
controls. As a result, no corrective actions were required or undertaken.


<PAGE>



                          Part II - Other Information:

Item 1.        Legal Proceedings

The Company  received a letter dated November 9, 2004 on behalf of Charles Hood,
who worked at Singing  Hills  Memorial  Park in El Cajon,  California.  Hood was
hired in early 2003 as a  groundskeeper  with his work concluding on October 30,
2003.  Hood  claims he wrote a letter to the  Company  expressing  his  concerns
regarding  the  operation  of  the  cemetery,  and  that  the  next  day  he was
terminated,  even  though  he  recognizes  his  relationship  was as an  at-will
employee.  Hood's claims  against the Company also include,  but are not limited
to,  violation  of labor  laws,  whistleblower  retaliation  and  infliction  of
emotional distress. The letter proposed a settlement in the amount of $275,000.

On November 23, 2005,  Hood filed a complaint in the Superior Court of the State
of California for the County for San Diego (Case No. GIE 028978) against Singing
Hills  Memorial  Park  and  California  Memorial  Estates,   Inc,  wholly  owned
subsidiaries  of the  Company.  The  claims in the  complaint  include  wrongful
termination  in violation of public  policy,  retaliation in violation of public
policy,  race  discrimination in violation of the California Fair Employment and
Housing Act,  retaliation  in violation of the  California  Fair  Employment and
Housing  Act,  intentional  infliction  of  emotional  distress,  plus  punitive
damages, attorney's fees and costs of the lawsuit. There are no specific amounts
requested in the complaint,  but damages are in an amount to be proven at a jury
trial.  The Company  contends that Hood voluntarily quit and was not terminated.
The Company intends to vigorously  defend the action.  An answer was filed.  The
case is in the discovery stage and the trial is set for November 2006.

The Company also  received a letter  dated  November 29, 2004 on behalf of Roger
Gornichec,  who the Company recognizes as having been an independent contractor.
The attorney  who wrote the letter on behalf of Gornichec  also wrote the letter
on behalf of Hood.  Gornichec  had  concluded  his services as an agent  selling
insurance in the spring of 2003 and his license to sell  cemetery  plots was not
renewed  in the  summer  of 2004.  Gornichec  asserted  that he was an  employee
contrary to the Company's position.

The  claims  made in the  letter on behalf of  Gornichec  included  but were not
limited   to,   wrongful    termination   in   violation   of   public   policy,
misrepresentation, age discrimination,  whistle-blower retaliation, interference
with  economic  advantage,  breach of  contract,  breach of the covenant of good
faith and fair dealing,  and  infliction of emotional  distress.  Gornichec also
claimed he was owed a certain  amount from a  retirement  plan.  The letter from
Gornichec's  attorney proposed a settlement in the amount of $420,000.  Based on
its investigation,  the Company believes Gornichec was an independent contractor
rather than an employee,  and there was no justification  for the claims and the
settlement amount sought. The Company reached a settlement with Gornichec, which
resulted in the Company paying $27,000 to Gornichec.

The  Company is a defendant  in various  other legal  actions  arising  from the
normal  conduct of business.  Management  believes that none of the actions will
have a  material  effect on the  Company's  financial  position  or  results  of
operations. Based on management's assessment and legal counsel's representations
concerning the likelihood of unfavorable  outcomes, no amounts have been accrued
for the above claims in the consolidated financial statements.

Item 2.        Changes in Securities and Use of Proceeds

               NONE


<PAGE>


Item 3.        Defaults Upon Senior Securities

               NONE

Item 4.        Submission of Matters to a Vote of Security Holders
               NONE

Item 5.        Other Information

               NONE

Item 6. Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a)(1) Financial Statements

See "Table of Contents - Part I - Financial Information" under page 2 above

(a)(2) Financial Statement Schedules

       None

     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.

    (3)  Exhibits

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

    3.1  Articles of Restatement of Articles of Incorporation (6)
    3.2  Amended Bylaws (8)
    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  2000 Director Stock Option Plan (3)
   10.3  2003 Stock Option Plan (7)
   10.4  Deferred Compensation Agreement with George R. Quist (2)
   10.5  Promissory Note with George R. Quist (4)
   10.6  Deferred Compensation Plan (5)
   10.7  Stock Purchase Agreement with Paramount Security Life Insurance
         Company (9)
   10.8  Reinsurance Agreement between Security National Life Insurance Company
         and Guaranty Income Life Insurance Company(10)
   10.9  Employment agreement with J. Lynn Beckstead, Jr.(10)
   10.10 Employment agreement with Scott M. Quist (11)
   10.11 Agreement and Plan of Reorganization among Security National Life
         Insurance Company,  SSLIC Holding Company, and Southern Security Life
         Insurance Company (12)
   10.12 Agreement and Plan of Merger,  among Security National Life Insurance
         Company,  SSLIC Holding Company,  and Southern Security Life Insurance
         Company (13)
   10.13 Agreement to Repay Indebtedness and Convey Option with Monument
         Title, LLC. (13)
   10.14 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 (14)
   10.15 Reinsurance Agreement between Security National Life Insurance Company
         and Memorial Insurance Company of America(15) 10.16 Trust Agreement
         between Security National Life Insurance Company and Memorial Insurance
         Company of America(15) 10.17 Promissory Note between Memorial Insurance
         Company as Maker and Security National Life Insurance Company as
         Payee(15)
   10.18 Security Agreement between Memorial Insurance Company as Debtor and
         Security National Life Insurance Company as Secured Party(15)
   10.19 Surplus  Contribution  Note between Memorial  Insurance  Company of
         America as Maker and Southern Security Life Insurance Company as
         Payee(15)
   10.20 Guaranty Agreement by Security National Life Insurance Company and
         Southern Security Life Insurance Company as Guarantors(15)
   10.21 Administrative Services Agreement between Security National Life
         Insurance  Company and Memorial  Insurance Company of America(15)
   10.22 Reinsurance Agreement between Security National Life Insurance Company
         and Southern Security Life Insurance Company(16)
   10.23 Trust Agreement among Security National Life Insurance Company,
         Southern Security Life Insurance Company and Zions First National
         Bank(16)
   10.24 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 June 30, 1989
         (3) Incorporated by reference from Schedule 14A Definitive Proxy
             Statement, filed August 29, 2000, relating to the Company's Annual
             Meeting of Shareholders
         (4) Incorporated by reference from Annual Report on Form 10-K, as
             filed on April 16, 2001
         (5) Incorporated by reference from Annual Report on Form 10-K, as
             filed on April 3, 2002
         (6) Incorporated by reference from Report on Form 8-K/A as filed
             on January 8, 2003
         (7) Incorporated by reference from Schedule 14A Definitive Proxy
             Statement, Filed on June 5, 2003, relating to the Company's Annual
             Meeting of Shareholders
         (8) Incorporated by reference from Report on Form 10-Q, as filed on
             November 14, 2003
         (9) Incorporated by reference from Report on Form 8-K, as filed March
             30, 2004
        (10) Incorporated by reference from Report on Form 10-K, as filed on
             March 30, 2004
        (11) Incorporated by reference from Report on Form 10-Q, as filed on
             August 13, 2004
        (12) Incorporated by reference from Report on Form 8-K, as filed on
             August 30, 2004
        (13) Incorporated by reference from Report on Form 10-K, as filed on
             June 30, 2005
        (14) Incorporated by reference from Report on Form 8-K, as filed on
             September 27, 2005
        (15) Incorporated by reference from Report on Form 8-K, as filed on
             January 5, 2006
        (16) Incorporated by reference from Report on Form 8-K, as filed on
             January 11, 2006

    (b) Reports on Form 8-K:

          No reports were filed by the Company during the quarter ended June 30,
          2006


<PAGE>



                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                   REGISTRANT

                     SECURITY NATIONAL FINANCIAL CORPORATION
                                   Registrant



DATED: August 14, 2006                 By:    s/s George R. Quist
                                              -------------------
                                              George R. Quist
                                              Chairman of the Board and
                                              Chief Executive Officer
                                             (Principal Executive Officer)


DATED: August 14, 2006                 By:    s/s Stephen M. Sill
                                              -------------------
                                              Stephen M. Sill
                                              Vice President, Treasurer and
                                              Chief Financial Officer
                                              (Principal Financial and
                                              Accounting Officer)


<PAGE>


                                  Exhibit 31.1

                            CERTIFICATION PURSUANT TO
                               18 U.S.C. ss. 1350,
                                  AS ENACTED BY
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


I, George R. Quist, certify that:

1. I have  reviewed  this  quarterly  report on Form 10-Q of  Security  National
Financial Corporation.

2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15-d-15(e)) for the registrant to have:

     (a)  Designed  such  disclosure  controls  and  procedures,  or caused such
disclosure  controls and  procedures to be designed  under our  supervision,  to
ensure that  material  information  relating to the  registrant,  including  its
consolidated subsidiaries,  is made known to us by others within those entities,
particularly during the period covered in which this report is being prepared;

     (b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions  about the effectiveness
of the disclosure  controls and procedures,  as of the end of the period covered
by this report based on such evaluation; and

     (c)  Disclosed  in this  report  any  change in the  registrant's  internal
control over financial  reporting  that occurred  during the  registrant's  most
recent fiscal quarter (the registrant's  fourth fiscal quarter in the case of an
annual  report)  that  has  materially  affected,  or is  reasonably  likely  to
materially affect, the registrant's  internal control over financial  reporting;
and

5. The registrant's other certifying officers and I have disclosed, based on our
most recent  evaluation of internal  control over  financial  reporting,  to the
registrant's auditors and the audit committee of registrant's board of directors
(or persons performing the equivalent functions):

     (a) All significant  deficiencies and material  weaknesses in the design or
operation of internal  control over  financial  reporting  which are  reasonably
likely  to  adversely  affect  the  registrant's  ability  to  record,  process,
summarize and report financial information; and

     (b) Any fraud,  whether or not material,  that involves management or other
employees who have a significant role in the registrant's internal controls over
financial reporting.

Date: August 14, 2006

                                        By:      George R. Quist
                                                 Chairman of the Board and
                                                 Chief Executive Officer


<PAGE>


                                  Exhibit 31.2

                            CERTIFICATION PURSUANT TO
                               18 U.S.C. ss. 1350,
                                  AS ENACED BY
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


I, Stephen M. Sill, certify that:

1. I have  reviewed  this  quarterly  report on Form 10-Q of  Security  National
Financial Corporation.

2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officer  and  I  are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15-d-15(e)) for the registrant to have:

     (a)  Designed  such  disclosure  controls  and  procedures,  or caused such
disclosure  controls and  procedures to be designed  under our  supervision,  to
ensure that  material  information  relating to the  registrant,  including  its
consolidated subsidiaries,  is made known to us by others within those entities,
particularly during the period covered in which this report is being prepared;

     (b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions  about the effectiveness
of the disclosure  controls and procedures,  as of the end of the period covered
by this report based on such evaluation; and

     (c)  Disclosed  in this  report  any  change in the  registrant's  internal
control over financial  reporting  that occurred  during the  registrant's  most
recent fiscal quarter (the registrant's  fourth fiscal quarter in the case of an
annual  report)  that  has  materially  affected,  or is  reasonably  likely  to
materially affect, the registrant's  internal control over financial  reporting;
and

5. The registrant's other certifying officers and I have disclosed, based on our
most recent  evaluation of internal  control over  financial  reporting,  to the
registrant's auditors and the audit committee of registrant's board of directors
(or persons performing the equivalent functions):

     (a) All significant  deficiencies and material  weaknesses in the design or
operation of internal  control over  financial  reporting  which are  reasonably
likely  to  adversely  affect  the  registrant's  ability  to  record,  process,
summarize and report financial information; and

     (b) Any fraud,  whether or not material,  that involves management or other
employees who have a significant role in the registrant's internal controls over
financial reporting.

Date:  August 14, 2006

                                        By:      Stephen M. Sill
                                                 Vice President, Treasurer and
                                                 Chief Financial Officer


<PAGE>



                                  EXHIBIT 32.1
                            CERTIFICATION PURSUANT TO
                               18 U.S.C. ss. 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In  connection  with  the  Quarterly  Report  of  Security  National   Financial
Corporation (the "Company") on Form 10-Q for the period ending June 30, 2006, as
filed with the  Securities  and  Exchange  Commission  on the date  hereof  (the
"Report"), I, George R. Quist, Chairman of the Board and Chief Executive Officer
of the Company,  certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge
and belief:

     (1) the Report fully  complies  with the  requirements  of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

     (2)  the  information  contained  in the  Report  fairly  presents,  in all
material  respects,  the  financial  condition  and result of  operations of the
Company.


Date:    August 14, 2006               By:      George R. Quist
                                                Chairman of the Board
                                                and Chief Executive Office


                                  EXHIBIT 32.2
                           CERTIFICATION PURSUANT TO
                              18 U.S.C. ss. 1350,
                             AS ADOPTED PURSUANT TO
                 SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In  connection  with  the  Quarterly  Report  of  Security  National   Financial
Corporation (the "Company") on Form 10-Q for the period ending June 30, 2006, as
filed with the  Securities  and  Exchange  Commission  on the date  hereof  (the
"Report"),  I, Stephen M. Sill,  Vice  President,  Treasurer and Chief Financial
Officer of the Company,  certify,  pursuant to 18 U.S.C.  ss.  1350,  as adopted
pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002, that, to the best of
my knowledge and belief:

     (1)  the Report fully  complies with the  requirements  of Section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

     (2)  the  information  contained  in the  Report  fairly  presents,  in all
          material respects, the financial condition and result of operations of
          the Company.


Date:    August 14, 2006                   By:   Stephen M. Sill
                                                 Vice President, Treasurer and
                                                 Chief Financial Officer