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 September 30, 2006           Commission File Number: 0-9341
------------------------------------           ------------------------------



                     SECURITY NATIONAL FINANCIAL CORPORATION
                            Exact Name of Registrant



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


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                   5,968,970
-------------------------------------       -----------------------------------
         Title of Class                     Number of Shares Outstanding as of
                                                   October 31, 2006

Class C Common Stock, $.20 par value                    6,640,520
------------------------------------        -----------------------------------
         Title of Class                     Number of Shares Outstanding as of
                                                   October 31, 2006



<PAGE>


            SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES
                                    FORM 10-Q

                        QUARTER ENDED SEPTEMBER 30, 2006

                                TABLE OF CONTENTS


                         PART I - FINANCIAL INFORMATION



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

        Condensed Consolidated Statements of Earnings -
        Three and Nine Months Ended September 30, 2006
        and 2005 (Unaudited)..................................................3

        Condensed Consolidated Balance Sheets -
        September 30, 2006, and December 31, 2005 (Unaudited)...............4-5

        Condensed Consolidated Statements of Cash Flows -
        Nine Months Ended September 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.........................................15-19

Item 3  Quantitative and Qualitative Disclosures about Market Risk...........19
------

Item 4  Controls and Procedures..............................................19
------

                           PART II - OTHER INFORMATION

        Other Information.................................................19-22

        Signature Page.......................................................23

        Certifications....................................................24-26


<PAGE>


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

<TABLE>
<CAPTION>

                                                      Three Months Ended                Nine Months Ended
                                                        September 30,                    September 30,
Revenues:                                          2006             2005             2006              2005
--------                                           ----             ----             ----              ----
<S>                                          <C>              <C>              <C>              <C>
Insurance premiums and other
   considerations                            $   7,537,345    $   6,437,047    $  22,494,867    $  20,329,776
Net investment income                            5,742,427        5,475,357       16,321,485       14,918,458
Net mortuary and cemetery sales                  2,864,920        2,472,330        9,073,938        8,203,514
Realized gains on sale of
   investments and other assets                    731,658           15,379          789,329           38,693
Mortgage fee income                             21,602,097       21,055,796       56,161,784       51,321,888
Other                                               96,328          104,684          283,514          415,004
                                             -------------    -------------    -------------    -------------
   Total revenues                               38,574,775       35,560,593      105,124,917       95,227,333
                                             -------------    -------------    -------------    -------------

Benefits and expenses:
Death benefits                                   3,367,393        3,385,292       10,757,083        9,810,767
Surrenders and other policy benefits               405,824          226,244        1,403,185        1,049,121
Increase in future policy benefits               2,931,798        2,233,110        8,279,678        7,304,025
Amortization of deferred policy and
   pre-need acquisition costs and costs of
   insurance acquired                            1,383,426          741,378        2,948,423        2,460,816
Selling, general and administrative
   expenses:
      Commissions                               15,997,433       15,193,331       42,045,749       39,408,554
      Salaries                                   4,469,881        3,960,552       12,959,734       11,709,035
      Other                                      5,996,090        5,882,937       17,196,515       15,798,339
Interest expense                                 1,331,487        1,502,491        3,440,038        3,171,612
Cost of goods and services
   sold mortuaries and cemeteries                  557,908          479,794        1,765,953        1,594,750
                                             -------------    -------------    -------------    -------------
   Total benefits and expenses                  36,441,240       33,605,129      100,796,358       92,307,019
                                             -------------    -------------    -------------    -------------

Earnings before income taxes                     2,133,535        1,955,464        4,328,559        2,920,314
Income tax expense                                (592,238)        (628,751)      (1,049,957)        (762,218)
                                             -------------    -------------    -------------    -------------
      Net earnings                           $   1,541,297    $   1,326,713    $   3,278,602    $   2,158,096
                                             =============    =============    =============    =============

Net earnings per common share                        $0.23            $0.22            $0.50            $0.35
                                                     =====            =====            =====            =====
Weighted average outstanding
   common shares                                 6,597,573        6,159,174        6,557,062        6,119,472
                                             =============    =============    =============    =============

Net earnings per common share
   -assuming dilution                                $0.23            $0.22            $0.49            $0.35
                                                     =====            =====            =====            =====
Weighted average outstanding
   common shares- assuming dilution              6,723,103        6,159,919        6,690,938        6,143,984
                                             =============    =============    =============    =============
</TABLE>

See accompanying notes to condensed consolidated financial statements.


<PAGE>
<TABLE>
<CAPTION>


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


                                                          September 30,    December 31,
                                                              2006            2005
                                                          -------------    ------------
Assets:
<S>                                                    <C>               <C>
Fixed maturity securities
  held to maturity, at amortized cost                   $  94,217,620    $  89,780,942
Fixed maturity securities available
  for sale, at estimated fair value                         5,682,637        6,597,161
Equity securities available for sale,
  at estimated fair value                                   5,026,596       12,346,939
Mortgage loans on real estate and construction loans,
  net of allowances for losses                             79,739,607       72,793,811
Real estate, net of accumulated
  depreciation and allowances for losses                    5,538,484        7,012,399
Policy, student and other loans net of allowance for
  doubtful accounts                                        12,659,311       12,391,569
Short-term investments                                     12,510,843        3,211,590
                                                        -------------    -------------
     Total investments                                    215,375,098      204,134,411
                                                        -------------    -------------
Restricted assets of cemeteries and mortuaries              5,380,154        5,240,099
                                                        -------------    -------------
Cash and cash equivalents                                  22,999,288       16,632,966
                                                        -------------    -------------
Receivables:
  Trade contracts                                           7,208,798        5,733,142
  Mortgage loans sold to investors                         48,648,644       53,970,231
  Receivable from agents                                    2,048,611        1,992,877
  Other                                                     1,618,902          958,851
                                                        -------------    -------------
     Total receivables                                     59,524,955       62,655,101
  Allowance for loan losses and doubtful accounts          (1,263,635)      (1,191,106)
                                                        -------------    -------------
     Net receivables                                       58,261,320       61,463,995
                                                        -------------    -------------
Policyholder accounts on deposit with reinsurer                --            6,572,756
Cemetery land and improvements held for sale                8,628,279        8,498,227
Accrued investment income                                   2,942,640        2,197,576
Deferred policy and pre-need
  contract acquisition costs                               27,591,082       24,048,638
Property and equipment, net                                13,949,975       14,747,276
Cost of insurance acquired                                 12,132,803       12,663,221
Cemetery perpetual care trust investments                   1,210,926        1,152,493
Goodwill 683,191                                              683,191
Other                                                       2,119,633        1,610,624
                                                        -------------    -------------
     Total assets                                       $ 371,274,389    $ 359,645,473
                                                        =============    =============
</TABLE>

See accompanying notes to condensed consolidated financial statements.


<PAGE>


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


                                             September 30, 2006    December 31,
                                                   2006               2005
                                             ------------------  --------------
Liabilities:
Future life, annuity, and other benefits        $ 266,873,282    $ 260,822,803
Unearned premium reserve                            4,306,269        3,157,918
Bank loans payable                                  7,704,276        8,946,321
Notes and contracts payable                           799,064        1,326,284
Deferred pre-need cemetery and mortuary
  contract revenues                                11,220,851       10,828,994
Accounts payable                                    1,718,496        1,533,065
Funds held under reinsurance treaties                  --            1,129,747
Other liabilities and accrued expenses             10,866,430        9,427,644
Income taxes                                       15,456,360       14,601,029
                                                -------------    -------------
     Total liabilities                            318,945,028      311,773,805
                                                -------------    -------------

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

Non-controlling interest in perpetual
   care trusts                                      2,259,105        2,173,250
                                                -------------    -------------

Stockholders' Equity:
Common stock:
  Class A: $2.00 par value, authorized
         10,000,000 shares, issued 7,107,188
         shares in 2006 and 7,098,363 shares
         in 2005                                   14,214,376       14,196,726
  Class C:  convertible, $0.20 par value,
         authorized 7,500,000 shares, issued
         6,778,658 shares in 2006 and 6,781,060
         shares in 2005                             1,355,732        1,356,212
                                                -------------    -------------
     Total common stock                            15,570,108       15,552,938
Additional paid-in capital                         15,828,426       15,650,344
Accumulated other comprehensive income (loss)
  and other items, net of deferred taxes              754,162          117,647
Retained earnings                                  20,699,548       17,460,024
Treasury stock at cost (1,138,218 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)                      (2,781,988)      (3,082,535)
                                                -------------    -------------
     Total stockholders' equity                    50,070,256       45,698,418
                                                -------------    -------------
         Total liabilities and stockholders'
            equity                              $ 371,274,389    $ 359,645,473
                                                =============    =============




See accompanying notes to condensed consolidated financial statements.


<PAGE>


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


                                                 Nine Months Ended September 30,
                                                       2006              2005
                                                       ----              ----
Cash flows from operating activities:
      Net cash provided by (used in)
         operating activities                      $ 23,210,232    $ (1,921,090)
                                                   ------------    ------------

Cash flows from investing activities:
    Securities held to maturity:
      Purchase - fixed maturity securities           (8,308,157)     (5,484,347)
      Calls and maturities - fixed
         maturity securities                          2,802,159       7,381,707
   Securities available for sale:
      Purchase - fixed maturity securities             (173,262)             --
      Sales (purchases) - equity securities          10,002,660       1,992,991
   Purchases of short-term investments               (9,299,253)    (11,924,755)
   Sales of short-term investments                           --      14,127,733
   Purchases of restricted assets                       (63,943)       (169,310)
   Change in assets for perpetual care trusts           (58,433)       (170,736)
   Amount received for perpetual care trusts             85,855          72,585
   Mortgage, policy, and other loans made           (51,337,926)    (58,817,295)
   Payments received for mortgage,
      policy, and other loans                        44,156,058      57,737,641
   Purchases of property and equipment               (1,241,988)     (1,403,476)
   Disposal of property and equipment                   679,769          --
   Purchases of real estate                          (1,830,877)     (2,995,748)
   Sale of real estate                                2,914,996       2,294,238
                                                   ------------    ------------
         Net cash provided by
              (used in) investing activities        (11,672,342)      2,641,228
                                                   ------------    ------------

Cash flows from financing activities:
   Annuity contract receipts                          4,484,563       4,237,386
   Annuity contract withdrawals                      (8,325,520)     (7,111,885)
   Sale of treasury stock                               454,701         413,965
   Repayment of bank loans and notes and
      contracts payable                              (2,535,312)     (2,575,517)
   Proceeds from borrowing on notes and
      Contracts                                         750,000          --
                                                   ------------    ------------
   Net cash used in financing activities             (5,171,568)     (5,036,051)
                                                   ------------    ------------

Net change in cash and cash equivalents               6,366,322      (4,315,913)

Cash and cash equivalents at beginning of period     16,632,966      15,333,668
                                                   ------------    ------------
Cash and cash equivalents at end of period         $ 22,999,288    $ 11,017,755
                                                   ============    ============

See accompanying notes to condensed consolidated financial statements.


<PAGE>



            SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                         September 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 nine months ended September
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 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.


<PAGE>


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


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.

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.

In  September  2006,  the FASB issued SFAS No. 158,  Employers'  Accounting  for
Defined  Benefit  Pension and Other  Postretirement  Plans, an amendment of FASB
Statements No. 87, 88, 106, and 132(R) ("SFAS 158").  Under SFAS 158,  companies
must  recognize a net  liability  or asset to report the funded  status of their
defined benefit pension and other postretirement  benefit plans on their balance
sheets.  The effective date of the  recognition  and  disclosure  provisions for
calendar-year  public  companies is for calendar years ending after December 15,
2006. The Company is currently evaluating the impact of this new standard but it
is not  expected  to have a  significant  effect on the  consolidated  financial
statements for the year ending December 31, 2006.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements  ("SFAS
157").  SFAS 157 defines fair value,  establishes a framework for measuring fair
value, and expands disclosures about fair value  measurements.  SFAS 157 will be
applied prospectively and is effective for fiscal years beginning after November
15,  2007,  and interim  periods  within  those  fiscal  years.  SFAS 157 is not
expected  to have a  material  impact on the  Company's  consolidated  financial
statements.




<PAGE>


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


In  September  2006,  the  Securities  and  Exchange   Commission  issued  Staff
Accounting  Bulletin  No.  108  ("SAB  108").  SAB 108  was  issued  to  provide
interpretive  guidance on how the effects of the  carryover or reversal of prior
year   misstatements   should  be  considered  in  quantifying  a  current  year
misstatement.  The  provisions  of SAB 108 are effective for the Company for its
December  31, 2006  year-end.  The adoption of SAB 108 is not expected to have a
material impact on the Company's consolidated financial statements.

3.   Comprehensive Income

For the three  months ended  September  30, 2006 and 2005,  total  comprehensive
income  amounted to $1,254,000 and  $2,587,000,  respectively.  This decrease of
$1,332,000 was primarily the result of an increase in net income of $215,000,  a
decrease in  derivatives  of $465,000,  and a $1,082,000  decrease in unrealized
gains and losses in securities available for sale.

For the nine  months  ended  September  30, 2006 and 2005,  total  comprehensive
income  amounted to $3,915,000  and  $3,292,000  respectively.  This increase of
$623,000 was primarily the result of an increase in net income of $1,121,000,  a
decrease in derivatives  of $848,000,  and an increase of $350,000 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
                         September 30, 2006, (Unaudited)


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:

                                                    Nine Months Ended
                                                       September 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 nine months ended  September  30, 2006.  Total
compensation costs relating to stock-based  compensation was not material during
the nine months ended September 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:

                                                            Nine Months Ended
                                                              September 30,
                                                          2006          2005
                                                          -----         ----
Net earnings, as reported                              $3,278,602    $2,158,096
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                                 $3,278,602   $2,158,096
                                                       ==========   ==========

Basic earnings per share, as reported                        $.50         $.35
Diluted earnings per share as reported                       $.49         $.35

Basic earnings per share, pro forma                          $.50         $.35
Diluted earnings per share, pro forma                        $.49         $.35



<PAGE>


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



5.    Earnings Per Share

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

                                                         Three Months Ended
                                                            September 30,
                                                       2006           2005
                                                       ----           ----
Numerator:
      Net income                                   $1,541,297     $ 1,326,713
                                                   ==========     ===========
Denominator:
      Denominator for basic earnings per share-
        weighted-average shares                     6,597,573       6,159,174
                                                   ----------     -----------

      Effect of dilutive securities:
        Employee stock options                        124,490             168
        Stock appreciation rights                       1,040             577
                                                 ------------     -----------
      Dilutive potential common shares                125,530             745
                                                 ------------     -----------
      Denominator for diluted earnings per
        share-adjusted weighted-average
        shares and assumed conversions*             6,723,103       6,159,919
                                                  ===========     ===========

      Basic earnings per share                           $.23            $.22
                                                         ====            ====
      Diluted earnings per shar                          $.23            $.22
                                                         ====            ====

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

                                                        Nine Months Ended
                                                          September 30,
                                                    2006               2005
                                                    ----               ----
Numerator:
      Net income                                  $3,278,602        $2,158,096
                                                  ==========        ==========
Denominator:
      Denominator for basic earnings per share-
        weighted-average shares                    6,557,062         6,119,472
                                                 -----------        ----------

      Effect of dilutive securities:
        Employee stock options                       132,795            23,971
        Stock appreciation rights                      1,081               541
                                                ------------       -----------
      Dilutive potential common shares               133,876            24,512
                                                 -----------       -----------
      Denominator for diluted earnings per
        share-adjusted weighted-average
        shares and assumed conversions*            6,690,938         6,143,984
                                                 ===========       ===========

      Basic earnings per share                          $.50              $.35
                                                        ====              ====

      Diluted earnings per share                        $.49              $.35
                                                        ====              ====

*The Company has two classes of common stock  outstanding,  Class A and Class C.
The Class C share in distribution of earnings on a 10-for-1 basis with the Class
A shares; therefore,  earnings per share for the Class C shares are converted to
Class A shares on a 10-for-1 basis.


<PAGE>
<TABLE>
<CAPTION>


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


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

6.  Business Segment
                                   Life        Cemetery/                  Reconciling
                                Insurance      Mortuary       Mortgage       Items        Consolidated
For the Three Months Ended      ----------    -----------     ---------    ------------    -------------
September 30, 2006
--------------------------
<S>                            <C>            <C>            <C>           <C>              <C>
   Revenues from
      external customers       $10,932,078    $3,908,464     $23,734,233    $    --         $38,574,775

   Intersegment revenues         1,119,078        23,001         103,139     (1,245,218)        --

   Segment profit (loss)
      before income taxes          993,541       662,308         477,686         --           2,133,535

For the Three Months Ended
September 30, 2005
--------------------------
   Revenues from
      external customers        $8,927,439    $2,796,506     $23,836,648 $       --         $35,560,593

   Intersegment revenues         1,297,110        30,668          92,743     (1,420,521)         --

   Segment profit (loss)
      before income taxes          470,689       (23,454)      1,508,229         --           1,955,464

For the Nine Months Ended
September 30, 2006
-------------------------
   Revenues from
      external customers       $32,541,462   $10,677,636     $61,905,819         --        $105,124,917

   Intersegment revenues         3,773,545        69,003         315,757     (4,158,305)         --

   Segment profit (loss)
      before income taxes        3,046,942     1,267,436          14,181         --           4,328,559

   Identifiable assets         356,839,984    54,111,387      19,571,930    (59,248,912)    371,274,389

For the Nine Months Ended
September 30, 2005
-------------------------
   Revenues from
      external sources         $28,505,978    $9,130,423     $57,590,932$        --         $95,227,333

   Intersegment revenues         3,666,646        69,003         255,783     (3,991,432)         --

   Segment profit (loss)
      before income taxes        1,806,834       398,433         715,047         --           2,920,314

   Identifiable assets         309,087,308    49,244,698      18,645,032    (52,398,603)    324,578,435

</TABLE>

<PAGE>

            SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                         September 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   Nine Months Ended
                                        September 30, 2005   September 30, 2005
                                        ------------------   ------------------
                                        In thousands except earnings per share
     Total revenue                            $36,476             $97,972
     Net earnings                             $ 1,536             $ 2,786
     Basic earnings per share                    $.25                $.46
     Diluted earnings per share                  $.25                $.45




<PAGE>


            SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                         September 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  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  recognized a gain of $760,231
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 during the second quarter of
2006.

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 trial was set for November 2006. The Company reached a settlement with Hood,
which resulted in the Company paying $30, 000 to Hood,  during the third quarter
of 2006.


<PAGE>




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 nine months  ended  September  30,  2006,  SecurityNational  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 9,665 ($1,607,842,000) and 9,421
(1,516,694,000)  loans,  respectively,  for the nine months ended  September 30,
2006 and 2005.

Results of Operations

Third Quarter of 2006 Compared to Third Quarter of 2005

Total revenues  increased by $3,014,000,  or 8.5%, to $38,575,000  for the three
months ended  September 30, 2006,  from  $35,561,000  for the three months ended
September  30,  2005.  Contributing  to this  increase in total  revenues was an
$546,000  increase in mortgage fee income,  a  $1,100,000  increase in insurance
premiums and other considerations, a $267,000 increase in net investment income,
a $393,000  increase in net mortuary and cemetery sales, and a $716,000 increase
in realized gains on investments and other assets.

Insurance premiums and other considerations  increased by $1,100,000,  or 17.1%,
to $7,537,000 for the three months ended September 30, 2006, from $6,437,000 for
the  comparable  period in 2005.  This  increase was primarily due to additional
premiums  realized from new insurance sales and from the acquisition of Memorial
Insurance Company on December 29, 2005.

Net  investment  income  increased by $267,000,  or 4.9%, to $5,742,000  for the
three months ended September 30, 2006, from $5,475,000 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  from the
acquisition of Memorial Insurance Company.

Net mortuary and cemetery sales  increased by $393,000,  or 15.9%, to $2,865,000
for  the  three  months  ended  September  30,  2006,  from  $2,472,000  for the
comparable  period in 2005. This increase was due to increased  at-need sales in
cemetery and mortuary  operations and increased  pre-need land sales in cemetery
operations.

Realized gains on investments and other assets increased by $716,000 to $731,000
for the three months ended  September  30, 2006 from $15,000 for the  comparable
period in 2005.  This was due  primarily to a gain of $760,000  from the sale of
the  Camelback  Funeral  Home to the city of Phoenix  pursuant  to  condemnation
proceedings to construct a light rail facility.


<PAGE>




Mortgage fee income increased by $546,000, or 2.6%, to $21,602,000 for the three
months ended September 30, 2006, from  $21,056,000 for the comparable  period in
2005.  This increase was primarily  attributable to an increase in the number of
loan  originations  during  the  third  quarter  of 2006 due to the  opening  of
additional  mortgage  offices and  increased  production  in  existing  mortgage
offices, which resulted in financing a greater number of mortgage loans.

Total benefits and expenses were  $36,441,000,  or 94.5% of total revenues,  for
the three months ended September 30, 2006, as compared to $33,605,000,  or 94.5%
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 from the operations
of Memorial Insurance Company, which the Company acquired on December 29, 2005.

Death  benefits,  surrenders and other policy  benefits,  and increase in future
policy benefits  increased by an aggregate of $860,000,  or 14.7%, to $6,705,000
for  the  three  months  ended  September  30,  2006,  from  $5,845,000  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 costs of
insurance acquired increased by $642,000,  or 86.6%, to $1,383,000 for the three
months ended  September  30, 2006,  from $741,000 for the  comparable  period in
2005.  This increase was primarily due to increased  business and to adjustments
in actuarial assumptions.

Selling,  general and administrative expenses increased by $1,427,000,  or 5.7%,
to $26,464,000 for the three months ended  September 30, 2006, from  $25,037,000
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 third  quarter of 2006,
additional expenses from 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  decreased by $171,000,  or 11.4%, to $1,331,000 for the three
months ended September 30, 2006,  from  $1,502,000 for the comparable  period in
2005.  This  decrease was  primarily  due to a reduction  in warehouse  lines of
credit  required  for a  fewer  number  of  warehoused  mortgage  loans  made by
SecurityNational Mortgage Company.

Cost of goods and services sold of the mortuaries  and  cemeteries  increased by
$78,000,  or 16.3%,  to $558,000 for the three months ended  September 30, 2006,
from $480,000 for the comparable period in 2005. This increase was primarily due
to increased pre-need cemetery land sales.

Nine Months Ended September 30, 2006 Compared to Nine Months Ended September 30,
2005

Total revenues  increased by $9,898,000,  or 10.4%, to $105,125,000 for the nine
months ended  September  30, 2006,  from  $95,227,000  for the nine months ended
September  30,  2005.  Contributing  to this  increase in total  revenues  was a
$4,840,000  increase in mortgage fee income, a $2,165,000  increase in insurance
premiums  and other  considerations,  a  $1,403,000  increase in net  investment
income,  a $870,000  increase in net mortuary and cemetery  sales and a $750,000
increase in realized  gains on investments  and other assets.  This increase was
partially offset by a $131,000 decrease in other revenues.

Insurance premiums and other considerations  increased by $2,165,000,  or 10.6%,
to $22,495,000 for the nine months ended  September 30, 2006,  from  $20,330,000
for the comparable period in 2005. This increase was primarily due to additional
premiums  realized from new insurance sales and from the acquisition of Memorial
Insurance Company on December 29, 2005.


<PAGE>




Net investment  income increased by $1,403,000,  or 9.4%, to $16,321,000 for the
nine months ended September 30, 2006, from $14,918,000 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 acquisition of Memorial Insurance Company.

Net mortuary and cemetery  sales  increased by $870,000,  or 10.6% to $9,074,000
for the nine months ended September 30, 2006, from $8,204,000 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  cemetery
operations.

Realized gains on investments and other assets increased by $750,000 to $789,000
for the three months ended  September  30, 2006 from $39,000 for the  comparable
period in 2005.  This was  primarily  due to a gain of $760,000 from the sale of
the  Camelback  Funeral  Home to the city of Phoenix  pursuant  to  condemnation
proceedings to construct a light rail facility.

Mortgage fee income  increased by $4,840,000,  or 9.4%, to  $56,162,000  for the
nine months ended September 30, 2006, from $51,322,000 for the comparable period
in 2005.  This increase was primarily  attributable to an increase in the number
of loan originations  during the first nine months of 2006 due to the opening of
additional  mortgage  offices and  increased  production  in  existing  mortgage
offices, which resulted in financing a greater number of mortgage loans.

Other revenues decreased by $131,000,  or 31.6%, to $284,000 for the nine months
ended  September 30, 2006 from $415,000 for the comparable  period in 2005. This
decrease was due to a reduction in other  revenues from the  Company's  mortuary
operations.

Total benefits and expenses were $100,796,000,  or 95.9% of total revenues,  for
the nine months ended September 30, 2006, as compared to  $92,307,000,  or 96.9%
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 from the operations
of Memorial Insurance Company, which the Company acquired on December 29, 2005.

Death  benefits,  surrenders and other policy  benefits,  and increase in future
policy  benefits  increased  by  an  aggregate  of  $2,276,000,   or  12.5%,  to
$20,440,000 for the nine months ended  September 30, 2006, from  $18,164,000 for
the  comparable  period in 2005.  This  increase was  primarily due to increased
business and to adjustments in actuarial assumptions.

Amortization  of deferred  policy and  pre-need  acquisition  costs and costs of
insurance acquired  increased by $488,000,  or 19.8%, to $2,949,000 for the nine
months ended September 30, 2006,  from  $2,461,000 for the comparable  period in
2005.  This increase was primarily due to the  realization  of  improvements  in
persistency and to expenses.

Selling,  general and administrative expenses increased by $5,286,000,  or 7.9%,
to $72,202,000 for the nine months ended  September 30, 2006,  from  $66,916,000
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 nine months of 2006,
additional expenses from 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.


<PAGE>




Interest  expense  increased by $268,000,  or 8.4%, to  $3,440,000  for the nine
months ended September 30, 2006,  from  $3,172,000 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  made  by
SecurityNational Mortgage Company.

Cost of goods and services sold of the mortuaries  and  cemeteries  increased by
$171,000,  or 10.7%, to $1,766,000 for the nine months ended September 30, 2006,
from  $1,595,000 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  $99,900,000  as of  September  30,  2006,
compared to $96,378,000 as of December 31, 2005. This represents 45.3% and 46.0%
of the  total  insurance-related  investments  as of  September  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 September 30, 2006 and December 31, 2005, 2%  ($1,575,000)  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 September 30, 2006
and December  31,  2005,  the capital  levels of the life  insurance  subsidiary
exceeded the regulatory criteria.


<PAGE>




The Company's total  capitalization  of  stockholders'  equity and bank debt and
notes  payable  was  $58,574,000  as of  September  30,  2006,  as  compared  to
$55,971,000 as of December 31, 2005.  Stockholders' equity as a percent of total
capitalization  was 85% and 82% as of September  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 September 30, 2006, $16,884,000 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 September 30, 2006.  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.

                          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

<PAGE>




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 trial
was set for November 2006.  The Company  reached a settlement  with Hood,  which
resulted in payment of $30,000 to Hood.

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

Item 2.        Changes in Securities and Use of Proceeds

               NONE

Item 3.        Defaults Upon Senior Securities

               NONE

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

               At the Annual Meeting of  Stockholders  held on July 7, 2006, the
               following matters were acted upon: (i) seven directors consisting
               of George R.  Quist,  Scott M.  Quist,  J. Lynn  Beckstead,  Jr.,
               Charles L. Crittenden,  Dr. Robert G. Hunter,  H. Craig Moody and
               Norman G.  Wilbur  were  elected to serve  until the next  annual
               stockholders  meeting or until their  respective  successors  are
               elected and  qualified  (for  George R.  Quist,  with Class A and
               Class C shares  voting,  11,462,189  votes  were cast in favor of
               election,  no votes were cast  against  election,  and there were
               23,963 abstentions;  for Scott M. Quist, with Class A and Class C
               shares voting,  11,451,638  votes were cast in favor of election,
               no votes  were  cast  against  election,  and there  were  34,514
               abstentions;  for J. Lynn  Beckstead,  Jr.,  with  Class A shares
               voting,  5,329,919 votes were cast in favor of election, no votes
               were cast against  election,  and there were 28,129  abstentions;
               for  Charles  L.  Crittenden,  with  Class A and  Class C shares,
               11,464,536  votes were cast in favor of  election,  no votes were
               cast against election, and there were 21,616 abstentions; for Dr.
               Robert  G.  Hunter,  with  Class  A and  Class C  shares  voting,
               11,460,197  votes were cast in favor of  election,  no votes cast
               against election, and there were 25,955 abstentions; for H. Craig
               Moody,  with Class A shares voting,  5,337,252 votes were cast in
               favor of election, no votes cast against election, and there were
               20,796  abstentions;  and for Norman G. Wilbur,  with Class A and
               Class C shares  voting,  11,460,197  votes  were cast in favor of
               election,  no votes were cast  against  election,  and there were
               25,955 abstentions);  and (ii) the appointment of Hansen, Barnett
               & Maxwell,  P.C. as the Company's  registered  pubic  independent
               accountants  for the fiscal  year  ending  December  31, 2006 was
               ratified (with 11,475,856 votes cast for appointment, 2,232 votes
               against appointment, and there were 8,064 abstentions).

Item 5.        Other Information

               NONE


<PAGE>



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)


<PAGE>

    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 September 29, 1987
            (2) Incorporated by reference from Annual Report on Form 10-K,
                as filed on September 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 September 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
                September 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
     September 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: November 14, 2006                 By:  s/s George R. Quist
                                              -------------------
                                              George R. Quist
                                              Chairman of the Board and Chief
                                              Executive Officer
                                              (Principal Executive Officer)


DATED: November 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: November 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:  November 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  September 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:    November 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  September 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:    November 14, 2006               By:  Stephen M. Sill
                                              Vice President, Treasurer and
                                              Chief Financial Officer