SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, ~~2016, 2015~~2017 and ~~2014~~2016

~~14)~~15) Business Segment Information

Description of Products and Services by Segment

The Company has three reportable business segments: life insurance, cemetery and mortuary, and mortgage. The Company's life insurance segment consists of life insurance premiums and operating expenses from the sale of insurance products sold by the Company's independent agency force and net investment income derived from investing policyholder and segment surplus funds. The Company's cemetery and mortuary segment consists of revenues and operating expenses from the sale of at-need cemetery and mortuary merchandise and services at its mortuaries and cemeteries, pre-need sales of cemetery spaces after collection of 10% or more of the purchase price and the net investment income from investing segment surplus funds. The Company's mortgage segment consists of fee income and expenses from the originations of residential mortgage loans and interest earned and interest expenses from warehousing pre-sold loans before the funds are received from financial institutional investors.

Measurement of Segment Profit or Loss and Segment Assets

The accounting policies of the reportable segments are the same as those described in the Significant Accounting Principles. Intersegment revenues are recorded at cost plus an agreed upon intercompany profit, and are eliminated upon consolidation.

Factors Management Used to Identify the Enterprise's Reportable Segments

The Company's reportable segments are business units that are managed separately due to the different products provided and the need to report separately to the various regulatory jurisdictions. The Company regularly reviews the quantitative thresholds and other criteria to determine when other business segments may need to be reported.

7880

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, ~~2016, 2015~~2017 and ~~2014~~2016

~~14)~~15) Business Segment Information (Continued)

	2016 (As Restated)															2017
	Life			Cemetery/						Intercompany						Life			Cemetery/					Intercompany
	Insurance			Mortuary			Mortgage			Eliminations			Consolidated			Insurance			Mortuary			Mortgage		Eliminations			Consolidated
Revenues:
From external sources:
Revenue from customers	$	66,902,126		$	12,267,640		$	181,141,687		$	-		$	260,311,453		$	70,412,476		$	12,657,117		$	153,797,171	$	-		$	236,866,764
Net investment income		28,618,485			312,494			8,651,465			-			37,582,444			34,068,565			445,663			548,740		-			35,062,968
Realized gains (losses) on investments and other assets		(277,040	)		211,429			(110,776	)		-			(176,387	)		(3,871,309	)		186,335			736,492		-			(2,948,482	)
Other than temporary impairments		(270,358	)		-			-			-			(270,358	)		(774,339	)		-			-		-			(774,339	)
Other revenues		632,260			88,676			6,166,813			-			6,887,749			856,094			97,602			7,765,483		-			8,719,179
Intersegment revenues:
Net investment income		7,119,692			691,876			327,778			(8,139,346	)		-			5,987,731			422,623			392,083		(6,802,437	)		-
Total revenues		102,725,165			13,572,115			196,176,967			(8,139,346	)		304,334,901			106,679,218			13,809,340			163,239,969		(6,802,437	)		276,926,090
Expenses:
Death and other policy benefits		33,387,380			-			-			-			33,387,380			36,095,018			-			-		-			36,095,018
Increase in future policy benefits		21,322,195			-			-			-			21,322,195			23,622,750			-			-		-			23,622,750

Amortization of deferred policy and preneed acquisition costs and value of business acquired		7,647,097			356,078			-			-			8,003,175			8,157,456			322,794			-		-			8,480,250
Depreciation		596,827			390,362			1,195,535			-			2,182,724			484,349			401,564			1,334,780		-			2,220,693

General, administrative and other costs:
Intersegment		-			148,025			219,974			(367,999	)		-			315,588			184,853			505,707		(1,006,148	)		-
Provision for loan losses		-			-			1,700,000			-			1,700,000			-			-			-		-			-
Costs related to funding mortgage
loans		-			-			9,191,488			-			9,191,488
Costs related to funding mortgage loans																	-			-			8,663,223		-			8,663,223
Other		29,478,156			10,524,535			163,730,148			1			203,732,840			30,632,307			10,689,813			142,952,592		-			184,274,712
Interest expense:
Intersegment		781,078			651,046			6,339,224			(7,771,348	)		-			445,520			181,793			5,168,976		(5,796,289	)		-
Other		1,654,264			282,878			3,174,726			-			5,111,868			2,218,956			330,211			3,488,165		-			6,037,332
Total benefits and expenses		94,866,997			12,352,924			185,551,095			(8,139,346	)		284,631,670			101,971,944			12,111,028			162,113,443		(6,802,437	)		269,393,978
Earnings before income taxes	$	7,858,168		$	1,219,191	��	$	10,625,872		$	-		$	19,703,231		$	4,707,274		$	1,698,312		$	1,126,526	$	-		$	7,532,112
Income tax expense		(3,451,292	)		-			(4,063,312	)		-			(7,514,604	)
Income tax benefit (expense)																	6,400,669			(606,293	)		786,446		-			6,580,822
Net earnings	$	4,406,876		$	1,219,191		$	6,562,560		$	-		$	12,188,627		$	11,107,943		$	1,698,312		$	1,912,972	$	-		$	14,112,934

Identifiable assets	$	821,097,220		$	99,611,263		$	171,844,559		$	(140,874,459	)	$	951,678,583		$	858,068,899		$	95,097,729		$	161,051,531	$	(134,810,675	)	$	979,407,484

Goodwill	$	2,765,570		$	-		$	-		$	-		$	2,765,570		$	2,765,570		$	-		$	-	$	-		$	2,765,570

Expenditures for long-lived assets	$	532,958		$	723,445		$	2,310,108		$	-		$	3,566,511

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2017 and 2016

15) Business Segment Information (Continued)

	2016
	Life			Cemetery/					Intercompany
	Insurance			Mortuary		Mortgage			Eliminations			Consolidated
Revenues:
From external sources:
Revenue from customers	$	64,501,017		$	12,267,640	$	189,146,639		$	-		$	265,915,296
Net investment income		31,019,594			312,494		646,513			-			31,978,601
Realized gains (losses) on investments and other assets		(277,040	)		211,429		(110,776	)		-			(176,387	)
Other than temporary impairments		(270,358	)		-		-			-			(270,358	)
Other revenues		632,260			88,676		6,166,813			-			6,887,749
Intersegment revenues:
Net investment income		7,119,692			691,876		327,778			(8,139,346	)		-
Total revenues		102,725,165			13,572,115		196,176,967			(8,139,346	)		304,334,901
Expenses:
Death and other policy benefits		33,387,380			-		-			-			33,387,380
Increase in future policy benefits		21,322,195			-		-			-			21,322,195
Amortization of deferred polic and preneed acquisition costs and value of business acquired		7,647,097			356,078		-			-			8,003,175
Depreciation		596,827			390,362		1,195,535			-			2,182,724
General, administrative and other costs:
Intersegment		261,119			148,025		219,974			(629,118	)		-
Provision for loan losses		-			-		1,700,000			-			1,700,000
Costs related to funding mortgage loans		-			-		9,191,488			-			9,191,488
Other		29,478,156			10,524,535		163,730,148			1			203,732,840
Interest expense:
Intersegment		519,959			651,046		6,339,224			(7,510,229	)		-
Other		1,654,264			282,878		3,174,726			-			5,111,868
Total benefits and expenses		94,866,997			12,352,924		185,551,095			(8,139,346	)		284,631,670
Earnings before income taxes	$	7,858,168		$	1,219,191	$	10,625,872		$	-		$	19,703,231
Income tax expense		(3,451,292	)		-		(4,063,312	)		-			(7,514,604	)
Net earnings	$	4,406,876		$	1,219,191	$	6,562,560		$	-		$	12,188,627

Identifiable assets	$	818,140,804		$	99,611,263	$	172,778,387		$	(140,874,459	)	$	949,655,995

Goodwill	$	2,765,570		$	-	$	-		$	-		$	2,765,570

Expenditures for long-lived assets	$	532,958		$	723,445	$	2,310,108		$	-		$	3,566,511

7982

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, ~~2016, 2015~~2017 and ~~2014~~

~~14)~~ ~~Business Segment Information~~ ~~(Continued)~~

2015 (As Restated)
Life Cemetery/ Intercompany
Insurance Mortuary Mortgage Eliminations Consolidated
Revenues:
From external sources:
Revenue from customers $ 58,883,721 $ 11,502,045 $ 169,043,426 $ - $ 239,429,192
Net investment income 25,297,486 450,854 8,259,564 - 34,007,904

Realized gains (losses) on investments and other assets
2,332,456 387,316 (318,413 ) - 2,401,359
Other than temporary impairments (413,714 ) - (191,716 ) - (605,430 )
Other revenues 824,759 146,831 4,150,217 - 5,121,807
Intersegment revenues:
Net investment income 7,615,338 1,155,180 326,822 (9,097,340 ) -
Total revenues 94,540,046 13,642,226 181,269,900 (9,097,340 ) 280,354,832
Expenses:
Death and other policy benefits 33,549,893 - - - 33,549,893
Increase in future policy benefits 17,057,764 - - - 17,057,764
Amortization of deferred policyand preneed acquisition costs and value of business acquired
5,306,781 334,512 - - 5,641,293
Depreciation 710,733 403,066 1,069,697 - 2,183,496
General, administrative and other costs:

Intersegment - 156,777 199,244 (356,021 ) -
Provision for loan losses - - 3,449,103 - 3,449,103
Costs related to funding mortgage loans - - 8,901,511 - 8,901,511
Other 27,416,860 10,117,012 146,565,817 (1 ) 184,099,688
Interest expense:
Intersegment 726,919 1,379,668 6,634,731 (8,741,318 ) -
Other 1,151,860 337,632 2,969,120 - 4,458,612
Total benefits and expenses 85,920,810 12,728,667 169,789,223 (9,097,340 ) 259,341,360
Earnings before income taxes $ 8,619,236 $ 913,559 $ 11,480,677 $ - $ 21,013,472
Income tax expense (3,191,370 ) - (4,470,661 ) - (7,662,031 )
Net earnings $ 5,427,866 $ 913,559 $ 7,010,016 $ - $ 13,351,441

Identifiable assets $ 721,362,741 $ 101,935,898 $ 157,283,191 $ (140,108,664 ) $ 840,473,166

Goodwill $ 2,765,570 $ - $ - $ - $ 2,765,570

Expenditures for long-lived assets $ 3,024,223 $ 154,226 $ 454,241 $ - $ 3,632,690

~~SECURITY NATIONAL FINANCIAL CORPORATION~~

~~AND SUBSIDIARIES~~

~~Notes to Consolidated Financial Statements~~

~~Years Ended December 31,~~ 2016 ~~2015 and 2014~~

~~14)~~ ~~Business Segment Information~~ ~~(Continued)~~

2014 (As Restated)
Life Cemetery/ Intercompany
Insurance Mortuary Mortgage Eliminations Consolidated
Revenues:
From external sources:
Revenue from customers $ 57,037,623 11,426,308 $ 122,778,529 $ - $ 191,242,460
Net investment income 23,008,489 275,324 5,019,927 - 28,303,740

Realized gains (losses) on investments and other assets
1,208,391 585,543 124,242 - 1,918,176
Other than temporary impairments (164,240 ) - - - (164,240 )
Other revenues 682,682 169,464 2,894,867 - 3,747,013
Intersegment revenues:
Net investment income 6,128,389 1,288,856 642,880 (8,060,125 ) -
Total revenues 87,901,334 13,745,495 131,460,445 (8,060,125 ) 225,047,149
Expenses:
Death and other policy benefits 29,789,964 - - - 29,789,964
Increase in future policy benefits 17,905,914 - - - 17,905,914
Amortization of deferred policy and preneed acquisition costs and value of business acquired
6,561,589 331,389 - - 6,892,978
Depreciation 644,510 436,390 1,096,265 - 2,177,165
General, administrative and other costs:

Intersegment 24,000 166,079 208,513 (398,592 ) -
Provision for loan losses - - 1,000,000 - 1,000,000
Costs related to funding mortgage loans - - 6,451,319 - 6,451,319
Other 23,045,928 10,245,144 110,817,359 (2 ) 144,108,429
Interest expense:
Intersegment 725,354 1,481,317 5,454,860 (7,661,531 ) -
Other 578,083 421,920 1,994,426 - 2,994,429
Total benefits and expenses 79,275,342 13,082,239 127,022,742 (8,060,125 ) 211,320,198
Earnings before income taxes $ 8,625,992 663,256 $ 4,437,703 $ - $ 13,726,951
Income tax expense (3,796,327 ) - (1,713,792 ) - (5,510,119 )
Net earnings $ 4,829,665 663,256 $ 2,723,911 $ - $ 8,216,832

Identifiable assets $ 652,348,803 109,114,226 $ 130,972,484 $ (142,742,671 ) $ 749,692,842

Goodwill $ 2,765,570 - $ - $ - $ 2,765,570

Expenditures for long-lived assets $ 660,830 121,677 $ 737,936 $ - $ 1,520,443

~~SECURITY NATIONAL FINANCIAL CORPORATION~~

~~AND SUBSIDIARIES~~

~~Notes to Consolidated Financial Statements~~

~~Years Ended December 31, 2016, 2015 and 2014~~

~~15)~~16) Related Party Transactions

The Company's Board of Directors has a written procedure, which requires disclosure to the Board of any material interest or any affiliation on the part of any of its officers, directors or employees that is in conflict or may be in conflict with the interests of the Company. The Company and its Board of Directors is unaware of any related party transactions that require disclosure as of December 31, ~~2016.~~2017.

~~16)~~17) Fair Value of Financial Instruments

~~Generally accepted accounting principles (GAAP)~~GAAP defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. GAAP also specifies a fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. Fair value measurements are classified under the following hierarchy:

Level 1: Financial assets and financial liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that the Company can access.

Level 2: Financial assets and financial liabilities whose values are based on the following:

a)	Quoted prices for similar assets or liabilities in active markets;

b)	Quoted prices for identical or similar assets or liabilities in non-active markets; or

c)	Valuation models whose inputs are observable, directly or indirectly, for substantially the full term of the asset or liability.

Level 3: Financial assets and financial liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs may reflect the Company's estimates of the assumptions that market participants would use in valuing the financial assets and financial liabilities.

The Company utilizes a combination of ~~third party~~third-party valuation service providers, brokers, and internal valuation models to determine fair value.

The following methods and assumptions were used by the Company in estimating the fair value disclosures related to ~~other~~ significant financial instruments:

The items shown under Level 1 and Level 2 are valued as follows:

Securities Available for Sale and Held to Maturity: The fair values of investments in fixed maturity and equity securities along with methods used to estimate such values are disclosed in Note 2 of the Notes to Consolidated Financial Statements.

Restricted Assets: A portion of these assets include mutual funds, equity securities and ~~equity~~fixed maturity securities that have quoted market ~~prices.~~prices that are used to determine fair value. Also included are cash and cash equivalents and participations in mortgage ~~loans. The carrying amounts reported in the accompanying consolidated balance sheet~~loans held for ~~these financial instruments approximate their fair values.~~investment.

Cemetery Endowment Care Trust Investments: A portion of these assets include equity securities and fixed maturity securities that have quoted market ~~prices.~~prices that are used to determine fair value. Also included are cash and cash ~~equivalents. The carrying amounts reported~~equivalents, participations in ~~the accompanying consolidated balance sheet~~mortgage loans held for ~~these financial instruments approximate their fair values.~~investment and real estate.

Call and Put Options: The Company uses quoted market prices to value its call and put options.

Additionally, there were no transfers between Level 1 and Level 2 in the fair value hierarchy.

8283

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, ~~2016, 2015~~2017 and ~~2014~~2016

~~16)~~17) Fair Value of Financial Instruments (Continued)

The items shown under Level 3 are valued as follows:

~~Policyholder Account Balances and Future Policy Benefits-Annuities~~Loans Held for Sale, at Fair Value: ~~Future policy benefit reserves~~The Company elected the fair value option for interest-sensitive insurance products are computed under a retrospective deposit method and represent policy account balances before applicable surrender charges. Policy benefits and claims that are charged to expense include benefit claims incurred in the period in excess of related policy account balances. Interest crediting ratesall loans held for ~~interest-sensitive insurance products ranged from 4% to 6.5%.~~sale originated after July 1, 2017. The fair ~~values for the Company's liabilities under investment-type insurance contracts (disclosed as policyholder account balances and future policy benefits – annuities) are estimated~~value is based on quoted market prices, when available. When a quoted market price is not readily available, the ~~contracts' cash surrender values.~~

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

Loan Commitments and Forward Sale Commitments: The Company's mortgage segment enters into loan commitments with potential borrowers and forward sale commitments to sell loans to third-party investors. The Company also uses a hedging strategy for these transactions. A loan commitment binds the Company to lend funds to a qualified borrower at a specified interest rate and within a specified period of time, generally up to 30 days after issuance of the loan commitment. Loan commitments are defined to be derivatives under GAAP and are recognized at fair value on the consolidated balance ~~sheet~~sheets with changes in their fair values recorded in current earnings.

The Company estimates the fair value of a loan commitment based on the change in estimated fair value of the underlying mortgage loan, quoted MBS prices, estimates of the fair value of mortgage servicing rights, and an estimate of the probability that the mortgage loan will fund within the terms of the ~~commitment net of estimated commission expense.~~commitment. The change in fair value of the underlying mortgage loan is measured from the date the loan commitment is ~~issued and is shown net of related expenses.~~issued. Following issuance, the value of a mortgage loan commitment can be either positive or negative depending upon the change in value of the underlying mortgage loans. Fallout rates and other factors from the Company's recent historical data are used to estimate the quantity and value of mortgage loans that will fund within the terms of the commitments.

Interest Rate Swaps: Management considers ~~the~~ interest rate swap instruments to be an effective cash flow hedge against the variable interest rate on bank borrowings since the interest rate swap mirrors the term of the note payable and expires on the maturity date of the bank loan it hedges. ~~The interest~~Interest rate swaps are derivative financial instruments carried at ~~its~~their fair ~~value.~~ value, which is derived from a model that factors in current market assumptions about future interest rates.

Impaired Mortgage Loans Held for Investment: The Company believes that the fair value of these nonperforming loans will approximate the unpaid principal balance expected to be recovered based on the fair value of the ~~interest rate swap was derived from a proprietary model of~~underlying collateral. For residential and commercial properties, the ~~bank from whom~~collateral value is estimated by obtaining an independent appraisal. The appraisal typically considers area comparables and property condition as well as potential rental income that could be generated (particularly for commercial properties). For residential construction loans, the ~~interest rate swap was purchased and to whom the note~~collateral is ~~payable.~~

~~Other Investments: The fair values are estimated using one or more valuation techniques for which sufficient and reliable data is available. Factors considered when estimating the~~typically incomplete, so fair value ~~include~~is estimated as the ~~original transaction price, recent transactions in~~replacement cost using data from Marshall and Swift, a provider of building cost information to the same or similar properties, historical lease rates, comparable lease rates of similar properties, discount rates, market capitalization rates, expected vacancy rates, and changes in financial ratios or cash flow.

~~Mortgage Loans on Real Estate~~: The fair values are estimated using interest rates currently being offered for similar loans to borrowers with similar credit ratings. Loans with similar characteristics are aggregated for purposes of the calculations. The carrying amounts reported in the accompanying consolidated balance sheet for these financial instruments approximate their fair values.real estate construction.

Real Estate Held for Investment: The Company believes that in an orderly market, fair value will approximate the replacement cost of a home and the rental income provides a cash flow stream for investment analysis. The Company believes the highest and best use of the properties are as income producing assets since it is the Company's intent to hold the properties as rental properties, matching the income from the investment in rental properties with the funds required for future estimated policy claims.

It should be noted that for replacement cost, when determining the fair value of mortgage properties, the Company uses Marshall and Swift, a provider of building cost information to the real estate construction industry. For the investment analysis, the Company used market data based upon its real estate operation experience and projected the present value of the net rental income over seven years. The Company ~~used 20% of the projected cash flow analysis~~also considers area comparables and ~~80% of the replacement cost to approximate~~property condition when determining fair ~~value of the collateral.~~value.

In addition to this analysis performed by the Company, the Company depreciates Real Estate Held for Investment. This depreciation reduces the book value of these properties and lessens the exposure to the Company from further deterioration in real estate values.

8384

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, ~~2016, 2015~~2017 and ~~2014~~2016

~~16)~~17) Fair Value of Financial Instruments (Continued)

Mortgage Servicing Rights: The Company initially recognizes ~~Mortgage Servicing Rights ("MSRs")~~MSRs at their estimated fair values derived from the net cash flows associated with the servicing contracts, where the Company assumes the obligation to service the loan in the sale transaction. The precise fair value of MSRs cannot be readily determined because MSRs are not actively traded in stand-alone markets. Considerable judgment is required to estimate the fair values of these assets and the exercise of such judgment can significantly affect the Company's earnings.

The Company's subsequent accounting for MSRs is based on the class of MSRs. The Company has identified two classes of MSRs: MSRs backed by mortgage loans with initial term of 30 years and MSRs backed by mortgage loans with initial term of 15 years. The Company distinguishes between these classes of MSRs due to their differing sensitivities to change in value as the result of changes in market. After being initially recorded at fair value, MSRs backed by mortgage loans are accounted for using the amortization method. MSR amortization is determined by amortizing the balance straight-line over an estimated seven and nine-year life which estimates the proportion to, and over the period of the estimated future net servicing income of the underlying financial assets.

The Company periodically assesses MSRs for impairment. Impairment occurs when the current fair value of the MSR falls below the asset's carrying value (carrying value is the amortized cost reduced by any related valuation allowance). If MSRs are impaired, the impairment is recognized in current-period earnings and the carrying value of the MSRs is adjusted through a valuation allowance.

Management periodically reviews the various loan strata to determine whether the value of the MSRs in a given stratum is impaired and likely to recover. When management deems recovery of the value to be unlikely in the foreseeable future, a write-down of the cost of the MSRs for that stratum to its estimated recoverable value is charged to the valuation allowance.

The following table summarizes Level 1, 2 and 3 financial assets and financial liabilities measured at fair value on a recurring basis by their classification in the consolidated balance sheet at December 31, ~~2016, as restated.~~2017.

Total
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)

Significant
Observable
Inputs
(Level 2)

Significant Unobservable
Inputs
(Level 3)

Assets accounted for at fair value on a recurring basis
Common stock $ 10,573,356 $ 10,573,356 $ - $ -
Total securities available for sale 10,573,356 10,573,356 - -
Restricted assets of cemeteries and mortuaries 736,603 736,603 - -
Cemetery perpetual care trust investments 698,202 698,202 - -
Derivatives - loan commitments 6,911,544 - - 6,911,544
Other investments 1,765,752 - - 1,765,752

Total assets accounted for at fair value on a recurring basis $ 20,685,457 $ 12,008,161 $ - $ 8,677,296

Liabilities accounted for at fair value on a recurring basis
Policyholder account balances $ (49,421,125 ) $ - $ - $ (49,421,125 )
Future policy benefits - annuities (99,388,662 ) - - (99,388,662 )
Derivatives - bank loan interest rate swaps (3,308 ) - - (3,308 )
- call options (109,474 ) (109,474 ) - -
- put options (26,494 ) (26,494 ) - -
- loan commitments (102,212 ) - - (102,212 )

Total liabilities accounted for at fair value on a recurring basis $ (149,051,275 ) $ (135,968 ) $ - $ (148,915,307 )

	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets accounted for at fair value on a recurring basis
Common stock	$	6,037,855		$	6,037,855		$	-	$	-
Total securities available for sale	$	6,037,855		$	6,037,855		$	-	$	-

Loans held for sale		133,414,188								133,414,188
Restricted assets (1)		809,958			809,958			-		-
Cemetery perpetual care trust investments (1)		682,315			682,315			-		-
Derivatives - loan commitments (2)		2,032,782			-			-		2,032,782

Total assets accounted for at fair value on a recurring basis	$	9,562,910		$	7,530,128		$	-	$	2,032,782

Liabilities accounted for at fair value on a recurring basis
Derivatives - call options (3)	$	(64,689	)	$	(64,689	)	$	-	$	-
Derivatives - put options (3)		(20,568	)		(20,568	)		-		-
Derivatives - loan commitments (3)		(36,193	)		-			-		(36,193	)

Total liabilities accounted for at fair value on a recurring basis	$	(121,450	)	$	(85,257	)	$	-	$	(36,193	)

____________

(1) Mutual funds and equity securities

(2) Included in other assets on the consolidated balance sheets

(3) Included in other liabilities and accrued expenses on the consolidated balance sheets

For Level 3 assets and liabilities measured at fair value on a recurring basis as of December 31, 2017, the significant unobservable inputs used in the fair value measurements were as follows:

Significant

Range of Inputs

Fair Value at

Valuation

Unobservable

Minimum

Maximum

Weighted

12/31/2017

Technique

Input(s)

Value

Average

Loans held for sale

133,414,188

Market approach

Investor contract pricing as a percentage of unpaid principal balance

100.0

110.5

102.8

Derivatives - loan commitments (net)

1,996,589

Market approach

Fall-out factor

1.0

99.0

19.0

Initial-Value

N/A

Servicing

151 bps

382 bps

275 bps

8485

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, ~~2016, 2015~~2017 and ~~2014~~2016

~~16)~~17) Fair Value of Financial Instruments (Continued)

Following is a summary of changes in the consolidated balance sheet line items measured using level 3 inputs:

All compensation plans not previously approved by security holders.

A B C
Plan Category Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights Weighted Average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column A)
Equity compensation plans approved by stockholders^[1]
1,298,271
$4.33^[2}
253,432
^[3]
Equity compensation plans not approved by stockholders 0 - 0

Plan Category

Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights

Weighted Average Exercise Price of Outstanding Options, Warrants and Rights

Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column A)

Equity compensation plans approved by stockholders^[1]

1,404,029

4.35

^[2]

586,879

^[3]

Equity compensation plans not approved by stockholders

^[1] This reflects the the 2003 Stock Option Plan (the "2003 Plan"), the 2006 Director Stock Option Plan (the "2006 Director Plan"), the 2013 Stock Option Plan (the "2013 Plan") and the 2014 Director Stock Option Plan (the "2014 Director Plan"). The 2003 Plan was approved by stockholders at the annual stockholders meeting held on July 11, 2003, which reserved 500,000 shares of Class A common stock and 100,000 shares of Class C common stock for issuance thereunder. The 2006 Director Plan was approved by stockholders at the annual stockholders meeting held on December 7, 2006, which reserved 100,000 shares of Class A common stock for issuance thereunder. The 2013 Plan was approved by stockholders at the annual stockholders meeting held on July 12, 2013, which reserved 450,000 shares of Class A common stock of which 150,000 shares of Class A common stock could be issued in place of up to 150,000 shares of Class C common stock for issuance thereunder. As a result of the stockholder approval of the 2013 Plan, the Company terminated the 2003 Plan. The 2014 Director Plan was approved by stockholders at the annual stockholders meeting held on July 2, 2014, which reserved 150,000 shares of Class A common stock for issuance thereunder. As a result of the stockholder approval of the 2014 Director Plan, the Company terminated the 2006 Director Plan.

_____________________

^[2] ~~The weighted average exercise prices reflect solely the shares of Class A common stock that will be issued upon exercise of outstanding options.~~

^[3] ~~This number includes 177,438 shares of Class A common stock available for future issuance under the 2013 Plan, and 75,994~~

[1]	This reflects the the 2003 Stock Option Plan (the "2003 Plan"), the 2006 Director Stock Option Plan (the "2006 Director Plan"), the 2013 Stock Option Plan (the "2013 Plan") and the 2014 Director Stock Option Plan (the "2014 Director Plan"). The 2003 Plan was approved by stockholders at the annual stockholders meeting held on July 11, 2003, which reserved 500,000 shares of Class A common stock and 100,000 shares of Class C common stock for issuance thereunder. The 2006 Director Plan was approved by stockholders at the annual stockholders meeting held on December 7, 2006, which reserved 100,000 shares of Class A common stock for issuance thereunder. The 2013 Plan was approved by stockholders at the annual stockholders meeting held on July 12, 2013, which reserved 450,000 shares of Class A common stock of which 150,000 shares of Class A common stock could be issued in place of up to 150,000 shares of Class C common stock for issuance thereunder. As a result of the stockholder approval of the 2013 Plan, the Company terminated the 2003 Plan. The 2014 Director Plan was approved by stockholders at the annual stockholders meeting held on July 2, 2014, which reserved 150,000 shares of Class A common stock for issuance thereunder. As a result of the stockholder approval of the 2014 Director Plan, the Company terminated the 2006 Director Plan.

[2]	The weighted average exercise prices reflect solely the shares of Class A common stock that will be issued upon exercise of outstanding options.

[3]	This number includes 512,335 shares of Class A common stock available for future issuance under the 2013 Plan, and 74,544 shares of Class A common stock available for future issuance under the 2014 Director Plan.

~~112~~113

~~Retirement Plans~~

On December 8, 1988, the Company entered into a deferred compensation plan with George R. Quist, the former Chairman and Chief Executive Officer of the Company. The plan was later amended on three occasions with the third amendment effective February 1, 2001. Under the terms of the plan as amended, upon the retirement of Mr. Quist, the Company is required to pay him ten annual installments in the amount of $60,000. The $60,000 annual payments were adjusted for inflation in accordance with the United States Consumer Price Index each year.

The plan also provided that the Board of Directors may in its discretion pay the amounts due under the plan in a single, lump-sum payment. Mr. Quist passed away on September 6, 2012. Pursuant to the plan, a single, lump-sum payment of $598,426 was paid to his estate on December 31, 2015.

Employment Agreements

Employment Agreement with Scott M. Quist

On July 16, 2004, the Company entered into an employment agreement with Scott M. Quist, its Chairman of the Board, President and Chief Executive Officer. The agreement is effective as of December 4, 2003 and has a five-year term, but the Company agreed to renew the agreement on December 4, 2008 and 2013 for additional five-year terms, provided Mr. Quist performs his duties with usual and customary care and diligence. Under the terms of the agreement, Mr. Quist is to devote his full time to the Company serving as its Chairman of the Board, President, and Chief Executive Officer at not less than his current salary and benefits. The Company also agrees to maintain a group term life insurance policy of not less than $1,000,000 on Mr. Quist's life and a whole life insurance policy in the amount of $500,000 on Mr. Quist's life. In the event of disability, Mr. Quist's salary would be continued for up to five years at 75% of its current level.

In the event of a sale or merger of the Company and Mr. Quist is not retained in his current position, the Company would be obligated to continue paying Mr. Quist's current compensation and benefits for seven years following the merger or sale. The agreement further provides that Mr. Quist is entitled to receive annual retirement benefits beginning (i) one month from the date of his retirement (to commence no sooner than age 65), (ii) five years following complete disability, or (iii) upon termination of his employment without cause. These retirement benefits are to be paid for a period of twenty years in annual installments in the amount equal to 75% of his then current rate of compensation. However, in the event that Mr. Quist dies prior to receiving all retirement benefits thereunder, the remaining benefits are to be paid to his heirs. The Company expensed ~~$511,443, $999,961~~$755,302 and ~~$833,183~~$511,443 during the years ended December 31, ~~2016, 2015~~2017 and ~~2014,~~2016, respectively, to cover the present value of anticipated retirement benefits under the employment agreement. The liability accrued was ~~$3,776,368~~$4,531,670 and ~~$3,264,925~~$3,776,368 as of December 31, ~~2016~~2017 and ~~2015,~~2016, respectively.

Director Compensation

Directors of the Company (but not including directors who are employees) are currently paid a director's fee of $21,600 per year by the Company for their services and are reimbursed for their expenses in attending board and committee meetings. An additional fee of $750 is paid to each audit committee member for each audit committee meeting attended. Each director is provided with an annual grant of stock options to purchase 1,000 shares of Class A common stock, which occurred under the 2000 Director Stock Option Plan for years 2000 to 2005, under the 2006 Director Stock Option Plan and under the 2014 Director Plan for years 2006 to ~~2016.~~2017. During 2016 ~~and 2015~~ each director was granted additional stock options to purchase 5,000 shares ~~and 5,000 shares, respectively,~~ of Class A common stock.

~~113~~

DIRECTOR COMPENSATION

The following table sets forth the compensation of the Company's non-employee directors for fiscal ~~2016.~~2017.

Name	Fees Earned or Paid in Cash ($)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Change in Pension Value and Nonqualified Deferred Compensation Earnings		All Other Compensation ($)		Total ($)
John L. Cook (1)	$	22,350		--	$	1,428		--		--		--	$	23,778
Robert G. Hunter (2)		21,600		--		1,428		--		--		--		23,028
Gilbert A. Fuller (3)		23,850		--		1,428		--		--		--		25,278
H. Craig Moody (4)		23,850		--		1,428		--		--		--		25,278
Norman G. Wilbur (5)		23,850		--		1,428		--		--		--		25,278

Name
Fees Earned
or Paid
in Cash
($)

Stock
Awards ($)

Option
Awards ($)

Non-Equity
Incentive
Plan
Compensation ($)

Change in
Pension
Value and Nonqualified
Deferred Compensation Earnings

All Other Compensation ($)

Total
($)

John L. Cook (1) $ 21,600 -- $ 14,647 -- -- -- $ 36,247
Robert G. Hunter (2) 21,600 -- 14,647 -- -- -- 36,247
Gilbert A. Fuller (3) 23,850 -- 14,647 -- -- -- 38,497
H. Craig Moody (4) 23,850 -- 14,647 -- -- -- 38,497
Norman G. Wilbur (5) 23,850 -- 14,647 -- -- -- 38,497
_______________________

(1)	Mr. Cook has options to purchase ~~26,964~~29,363 shares of the Company's Class A common stock.
(2)	Dr. Hunter has options to purchase ~~74,794~~77,873 shares of the Company's Class A common stock.
(3)	Mr. Fuller has options to purchase ~~28,241~~30,704 shares of the Company's Class A common stock.
(4)	Mr. Moody has options to purchase ~~74,794~~70,993 shares of the Company's Class A common stock.
(5)	Mr. Wilbur has options to purchase ~~25,091~~27,397 shares of the Company's Class A common stock.

114

Employee 401(k) Retirement Savings Plan

In 1995, the Company's Board of Directors adopted a 401(k) Retirement Savings Plan. Under the terms of the 401(k) plan, effective as of January 1, 1995, the Company made discretionary employer matching contributions to its employees who choose to participate in the plan. The plan allowed the board to determine the amount of the contribution at the end of each year. During the period from January 1, 1995 to December 31, 2007 the Board had adopted a contribution formula specifying that such discretionary employer matching contributions would equal 50% of the participating employee's contribution to the plan to purchase the Company's stock up to a maximum discretionary employee contribution of 1/2 of 1% of participating employees' compensation, as defined by the plan.

All persons who have completed at least one year's service with the Company and satisfy other plan requirements are eligible to participate in the 401(k) plan. All Company matching contributions are invested in the Company's Class A common stock. Also, the Company may contribute at the discretion of the Company's Board of Directors an Employer Profit Sharing Contribution to the 401(k) plan. The Employer Profit Sharing Contribution is to be divided among three different classes of participants in the plan based upon the participant's title in the Company. All amounts contributed to the plan are deposited into a trust fund administered by an independent trustee.

Beginning January 1, 2008, the Company elected to be a "Safe Harbor" Plan for its matching 401(k) contributions. The Company will match 100% of up to 3% of an employee's total annual compensation and 50% of 4% to 5% of an employee's annual compensation. The match is in shares of the Company's Class A common stock. The Company's contribution for 2017 and 2016 ~~2015~~was $1,534,861 and ~~2014 was~~ $1,429,962 ~~$1,197,236 and $899,850~~ respectively, under the "Safe Harbor" plan.

Employee Stock Ownership Plan

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

Under the ESOP Plan, the Company has discretionary power to make contributions on behalf of all eligible employees into a trust created under the ESOP Plan. Employees become eligible to participate in the ESOP Plan when they have attained the age of 19 and have completed one year of service (a twelve‑month period in which the Employee completes at least 1,040 hours of service). The Company's contributions under the ESOP Plan are allocated to eligible employees on the same ratio that each eligible employee's compensation bears to total compensation for all eligible employees during each year. To date, the ESOP Plan has approximately ~~298~~294 participants and had $-0- contributions payable to the Plan in ~~2016.~~2017. Benefits under the ESOP Plan vest as follows: 20% after the second year of eligible service by an employee, an additional 20% in the third, fourth, fifth and sixth years of eligible service by an employee.

Benefits under the ESOP Plan will be paid out in one lump sum or in installments in the event the employee becomes disabled, reaches the age of 65, or is terminated by the Company and demonstrates financial hardship. The ESOP Plan Committee, however, retains discretion to determine the final method of payment. Finally, the Company reserves the right to amend or terminate the ESOP Plan at any time. The trustees of the trust fund under the ESOP Plan are Scott M. Quist (Chairman), S. Andrew Quist, and Robert G. Hunter, who each serve as a director of the Company.

~~114~~

Deferred Compensation Plan

In 2001, the Company's Board of Directors adopted a Deferred Compensation Plan. Under the terms of the Deferred Compensation Plan, the Company will provide deferred compensation for a select group of management or highly compensated employees, within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended. The board has appointed a committee of the Company to be the plan administrator and to determine the employees who are eligible to participate in the plan. The employees who participate may elect to defer a portion of their compensation into the plan. The Company may contribute into the plan at the discretion of the Company's Board of Directors. The Company did not make any contributions for ~~2016, 2015~~2017 and ~~2014.~~2016.

115

NON-QUALIFIED DEFERRED COMPENSATION

The following table sets forth contributions to the deferred compensation account of the Named Executive Officers in fiscal ~~2016~~2017 and the aggregate balance of deferred compensation of the Named Executive Officers at December 31, ~~2016.~~2017.

	Executive		Registrant		Aggregate		Aggregate		Aggregate		Executive		Registrant		Aggregate		Aggregate		Aggregate
	Contributions		Contributions		Earnings		Withdrawals		Balance		Contributions		Contributions		Earnings		Withdrawals		Balance
	In Last FY		In Last FY		in last FY		Distributions		at last FYE		In Last FY		In Last FY		in last FY		Distributions		at last FYE
Name	($)		($)		($)		($)		($)		($)		($)		($)		($)		($)

Scott M. Quist		--		--		--		--	$	543,573		--		--		--		--	$	461,029
Garrett S. Sill		--		--		--		--		--		--		--		--		--		--
Stephen C. Johnson		--		--		--		--		--		--		--		--		--		--
S. Andrew Quist		--		--		--		--		--		--		--		--		--		--
Jeffrey R. Stephens		--		--		--		--		--		--		--		--		--		--

~~2006 Director Stock Option Plan~~

On December 7, 2006, the Company adopted the 2006 Director Stock Option Plan (the "2006 Director Plan") effective December 7, 2006. The 2006 Director Plan provides for the grant by the Company of options to purchase up to an aggregate of 100,000 shares of Class A common stock for issuance there under. The 2006 Director Plan provides that each member of the Company's Board of Directors who is not an employee or paid consultant of the Company is automatically eligible to receive options to purchase the Company's Class A common stock under the 2006 Director Plan.

Effective as of December 7, 2006, and on each anniversary date thereof during the term of the 2006 Director Plan, each outside director shall automatically receive an option to purchase 1,000 shares of Class A common stock. In addition, each new outside director who shall first join the Board after the effective date shall be granted an option to purchase 1,000 shares upon the date which such person first becomes an outside director and an annual grant of an option to purchase 1,000 shares on each anniversary date thereof during the term of the 2006 Director Plan. The options granted to outside directors shall vest in four equal quarterly installments over a one year period from the date of grant, until such shares are fully vested. The primary purposes of the 2006 Director Plan are to enhance the Company's ability to attract and retain well-qualified persons for service as directors and to provide incentives to such directors to continue their association with the Company.

In the event of a merger of the Company with or into another company, or a consolidation, acquisition of stock or assets or other change in control transaction involving the Company, each option becomes exercisable in full, unless such option is assumed by the successor corporation. In the event the transaction is not approved by a majority of the "Continuing Directors" (as defined in the 2006 Director Plan), each option becomes fully vested and exercisable in full immediately prior to the consummation of such transaction, whether or not assumed by the successor corporation.

~~115~~

Amended 2013 Stock Option Plan

On August 24, 2013, the Company adopted the Security National Financial Corporation 2013 Stock Option Plan (the "2013 Plan"), which reserved 450,000 shares of Class A common stock to be made available for issuance thereunder, of which up to 150,000 shares of Class C common stock could be issued in place of up to 150,000 shares of Class A common stock. The 2013 Plan provides for the grant of options and the award or sale of stock to officers, directors, and employees of the Company. Both "incentive stock options", as defined under Section 422A of the Internal Revenue Code of 1986 and "non-qualified options" may be granted under the 2013 Plan. On July 1, 2015, the stockholders approved an amendment to the 2013 Plan to authorize an additional 450,000 shares of Class A common stock under the Plan, of which up to 200,000 Class C common ~~shares~~stock may be issued in place of up to 200,000 shares of Class A common stock. On June 29, 2017, the stockholders approved an amendment to the 2013 Plan to authorize an additional 500,000 shares of Class A common stock under the Plan, of which up to 250,000 Class C common stock may be issued in place of up to 250,000 shares of Class A common stock.

The 2013 Plan is to be administered by the Board of Directors or by a committee designated by the Board. The terms of options granted or stock awards or sales affected under the 2013 Plan are to be determined by the Board of Directors or its committee. No options may be exercised for a term of more than ten years from the date of the grant. Options intended as incentive stock options may be issued only to employees, and must meet certain conditions imposed by the Internal Revenue Code, including a requirement that the option exercise price be no less than the fair market value of the option shares on the date of grant. The 2013 Plan provides that the exercise price for non-qualified options will not be less than at least 50% of the fair market value of the stock subject to such option as of the date of grant of such options, as determined by the Company's Board of Directors.

On December 4, 2015, the Board of Directors approved a resolution to amend the Company's 2013 Stock Option Plan to include additional equity incentive awards. These additional incentive awards in the amended plan consist of Stock Appreciation Rights (SARs), Restricted Stock Units (RSUs) and Performance Share Awards. Stock Appreciation Rights are awards that entitle the recipient to receive cash or stock equal to the excess of the Company's stock price on the date the SAR is exercised over the Company's stock price on the date the SAR was granted times the number of shares of stock with respect to which the SAR is exercised. Restricted Stock Units entitle the recipient to receive RSUs that require the Company on the distribution dates to transfer to the recipient one unrestricted, fully transferable share of stock for each RSU scheduled to be paid out on that date. Performance Share Awards entitle the recipient to receive stock based on the Company meeting certain performance goals.

The 2013 Plan has a term of ten years. The Board of Directors may amend or terminate the 2013 Plan at any time, from time to time, subject to approval of certain modifications to the 2013 Plan by the stockholders of the Company as may be required by law or the 2013 Plan.

2014 Director Stock Option Plan

On May 16, 2014, the Company adopted the 2014 Director Stock Option Plan (the "2014 Director Plan"). The 2014 Director Plan provides for the grant by the Company of options to purchase up to an aggregate of 150,000 shares of Class A common stock for issuance there under. The 2014 Director Plan provides that each member of the Company's Board of Directors who is not an employee or paid consultant of the Company is automatically eligible to receive options to purchase the Company's Class A common stock under the 2014 Director Plan.

116

On December 7, 2014, and on each anniversary date thereof during the term of the 2014 Director Plan, each outside director shall automatically receive an option to purchase 1,000 shares of Class A common stock. In addition, each new outside director who shall first join the Board after the effective date shall be granted an option to purchase 1,000 shares upon the date which such person first becomes an outside director and an annual grant of an option to purchase 1,000 shares on each anniversary date thereof during the term of the 2014 Director Plan. The options granted to outside directors shall vest in four equal quarterly installments over a one year period from the date of grant, until such shares are fully vested. The primary purposes of the 2014 Director Plan are to enhance the Company's ability to attract and retain well-qualified persons for service as directors and to provide incentives to such directors to continue their association with the Company.

In the event of a merger of the Company with or into another company, or a consolidation, acquisition of stock or assets or other change in control transaction involving the Company, each option becomes exercisable in full, unless such option is assumed by the successor corporation. In the event the transaction is not approved by a majority of the "Continuing Directors" (as defined in the 2014 Director Plan), each option becomes fully vested and exercisable in full immediately prior to the consummation of such transaction, whether or not assumed by the successor corporation.

~~116~~

Stock Purchase Plan

On September 11, 2015, the Board approved the Security National Financial Corporation Stock Purchase Plan for the mutual benefit of the Company and its stockholders. Under the terms of the Plan, the Company may, in its discretion, purchase shares of Class A common stock from its officers and directors who exercise the stock options granted to them under any of the Company's stock option plans with the proceeds from such purchase to be used to pay the taxes owed by such officers and directors as a result of the exercise of their stock options. Additionally, the officers and directors who exercise their stock options may, in their discretion, request that the Company purchase shares of their Class A common stock with the proceeds from such sale to be used to pay the taxes owed by such officers and directors as a result of the exercise of their stock options.

The Company is authorized under the plan to purchase no more than 60,000 shares of Class A common stock in any calendar year to pay the taxes owed by the officers and directors who exercise their stock options under the Stock Purchase Plan. The Company's purchase price for the Class A common stock under the Stock Purchase Plan shall be equal to the closing sales price of the Company's Class A common stock as reported by The Nasdaq National Market on the day that the applicable stock options are exercised by such officers and directors. The Company may only purchase shares of Class A common stock from the officers and directors exercising their stock options under the Stock Purchase Plan during the "Trading Window" as defined in the Company's Insider Trading Policy and Guidelines.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company's executive officers, directors and persons who own more than 10% of a registered class of the Company's equity securities to file reports of ownership and periodic changes in ownership of the Company's common stock with the Securities and Exchange Commission. Such persons are also required to furnish the Company with copies of all Section 16(a) reports they file.

Based solely on its review of the copies of stock reports received by it with respect to fiscal ~~2016,~~2017, or written representations from certain reporting persons, the Company believes that its directors, executive officers and greater than 10% beneficial owners complied with all Section 16(a) filing requirements applicable to them, except that each of the Company's officers and directors, through an oversight, filed one late Form 4 report disclosing the granting of stock options on December ~~2, 2016.~~1, 2017.

117

Item 12 - Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth security ownership information of the Company's Class A and Class C common stock as of March ~~31, 2017,~~28, 2018, (i) for persons who own beneficially more than 5% of the Company's outstanding Class A or Class C common stock, (ii) each director of the Company, and (iii) for all executive officers, and directors of the Company as a group.

	Class A Common Stock					Class C Common Stock					Class A and Class C Common Stock					Class A Common Stock					Class C Common Stock					Class A and Class C Common Stock

	Amount		Percent			Amount		Percent			Amount		Percent			Amount		Percent			Amount		Percent			Amount		Percent
	Beneficially		of			Beneficially		of			Beneficially		of			Beneficially		of			Beneficially		of			Beneficially		of
Name and Address (1)	Owned		Class			Owned		Class			Owned		Class			Owned		Class			Owned		Class			Owned		Class

George R. and Shirley C. Quist Family Partnership, Ltd. (2)		1,531,806		11.6	%		603,126		31.7	%		2,134,932		14.2	%		1,561,146		11.1	%		633,282		30.3	%		2,194,428		13.6	%
Scott M. Quist (3)(5)(6)(7)(8)		385,106		2.9	%		1,446,437		60.4	%		1,831,543		11.8	%
401(k) Retirement Savings Plan (4)		1,825,303		13.9	%		-		-			1,825,303		12.1	%
401(k) Retirement Savings Plan (3)																	2,050,542		14.6	%		-		-			2,050,542		12.7	%
Scott M. Quist (4)(5)(6)(7)(8)																	344,643		2.4	%		1,543,613		60.8	%		1,888,256		11.3	%
Jordan Capital Partners, L.P. (9)		1,216,899		9.2	%		-		-			1,216,899		8.1	%		1,288,202		9.1	%		-		-			1,288,202		8.0	%
Employee Stock Ownership Plan (ESOP) (10)		522,384		4.0	%		278,904		14.7	%		801,288		5.3	%
Non-Qualified Deferred Compensation Plan (11)		798,146		6.1	%		-		-			798,146		5.3	%
Non-Qualified Deferred Compensation Plan (10)																	838,053		5.9	%		-		-			838,053		5.2	%
Employee Stock Ownership Plan (ESOP) (11)																	493,597		3.5	%		292,849		14.0	%		786,446		4.9	%
Christie Q. Overbaugh (12)		278,838		2.1	%		23,664		1.2	%		302,502		2.0	%		301,829		2.1	%		24,847		1.2	%		326,676		2.0	%
Jason G. Overbaugh (13)		230,441		1.7	%		-		-			230,441		1.5	%		259,934		1.8	%		5,250		*			265,184		1.6	%
Associated Investors (14)		74,883		*			117,739		6.2	%		192,622		1.3	%		78,627		*			123,626		5.9	%		202,253		1.3	%
S. Andrew Quist (4)(15)																	188,200		1.3	%		5,250		*			193,450		1.2	%
Estate of George R. Quist		113,502		*			70,095		3.7	%		183,597		1.2	%		119,181		*			73,600		3.5	%		192,781		1.2	%
S. Andrew Quist (3)(15)		168,404		1.3	%		-		-			168,404		1.1	%
Jeffrey R. Stephens (16)		95,716		*			-		-			95,716		*			107,277		*			-		-			107,277		*
Garrett S. Sill (6)(7)(17)		83,023		*			-		-			83,023		*			96,988		*			3,937		*			100,925		*
Robert G. Hunter, M.D. (3)(18)		80,769		*			-		-			80,769		*
Robert G. Hunter, M.D. (4)(18)																	88,321		*			-		-			88,321		*
H. Craig Moody (19)		78,940		*			-		-			78,940		*			88,102		*			-		-			88,102		*
Stephen C. Johnson(20)		54,036		*			-		-			54,036		*			65,366		*			-		-			65,366		*
Gilbert A. Fuller (21)		24,123		*			-		-			24,123		*			30,554		*			-		-			30,554		*
John L. Cook (22)		22,238		*			-		-			22,238		*			28,575		*			-		-			28,575		*
Norman G. Wilbur (23)		22,150		*			-		-			22,150		*			28,483		*			-		-			28,483		*
All directors and executive officers (12 persons) (3)(5)(6)(7)		1,523,784		11.1	%		1,470,101		61.4	%		2,993,885		18.6	%
All directors and executive officers (12 persons) (4)(5)(6)(7)																	1,628,272		11.1	%		1,582,897		62.3	%		3,211,169		18.6	%

* Less than 1%

(1)	Unless otherwise indicated, the address of each listed stockholder is c/o Security National Financial Corporation, 5300 South 360 West, Suite 250, Salt Lake City, Utah 84123.
(2)	This stock is owned by the George R. and Shirley C. Quist Family Partnership, Ltd., of which Scott M. Quist is the managing general partner and, accordingly, exercises sole voting and investment powers with respect to such shares.
(3)	The investment committee of the Company's 401(k) retirement savings plan consists of Scott Quist and Garrett S. Sill and, accordingly, exercise shared voting and investment powers with respect to such shares.
(4)	Does not include ~~522,384~~493,597 shares of Class A common stock and ~~278,904~~292,849 shares of Class C common stock owned by the Company's Employee Stock Ownership Plan (ESOP), of which Scott M. Quist, S. Andrew Quist and Robert G. Hunter are the trustees and accordingly, exercise shared voting and investment powers with respect to such shares.
~~(4)~~	The investment committee of the Company's 401(k) retirement savings plan consists of Scott Quist and Garrett S. Sill and, accordingly, exercise shared voting and investment powers with respect to such shares.
(5)	Does not include ~~74,883~~78,627 shares of Class A common stock and ~~117,739~~123,626 shares of Class C common stock owned by Associated Investors, a Utah general partnership, of which Scott M. Quist is the managing partner and, accordingly, exercises sole voting and investment powers with respect to such shares.
(6)	Does not include ~~1,825,303~~2,050,542 shares of Class A common stock owned by the Company's 401(k) Retirement Savings Plan, of which Scott M. Quist and Garrett S. Sill are members of the investment committee and, accordingly, exercise shared voting and investment powers with respect to such shares.

118

(7)	Does not include ~~798,146~~838,053 shares of Class A common stock owned by the Company's Deferred Compensation Plan, of which Scott M. Quist and Garrett S. Sill are members of the investment committee and, accordingly, exercise shared voting and investment powers with respect to such shares.
(8)	Includes options to purchase ~~493,298~~450,103 shares of Class C common stock and 19,687 of Class A common stock granted to Scott M. Quist that are currently exercisable, or will become exercisable within 60 days of March 31, ~~2017.~~2018.
(9)	Jordan Capital Partners, L.P. and its affiliates and subsidiaries have beneficial ownership of an aggregate of ~~1,216,899~~1,288,202 shares of the Company's Class A common stock. Jordan Capital Partners, L.P. has sole power to vote ~~1,216,899~~1,288,202 shares of the Company's Class A common stock and sole power to dispose of ~~1,216,899~~1,288,202 shares of the Company's common stock. The address for Jordan Capital Partners, L.P. is 6001 River Road, Suite 100, Columbus, Georgia 31904.
(10)	~~The trustees of the Employee Stock Ownership Plan (ESOP) consist of Scott M. Quist, S. Andrew Quist and Robert G. Hunter who exercise shared voting and investment powers.~~
~~(11)~~	The investment committee of the Company's Non-Qualified Deferred Compensation Plan consists of Scott M. Quist and Garrett S. Sill and, accordingly, exercised shared voting and investment powers with respect to such shares.
(11)	The trustees of the Employee Stock Ownership Plan (ESOP) consist of Scott M. Quist, S. Andrew Quist and Robert G. Hunter who exercise shared voting and investment powers.
(12)	Includes options to purchase ~~32,473~~39,544 shares of Class A common stock granted to Ms. Overbaugh that are currently exercisable, or will become exercisable within 60 days of March 31, ~~2017.~~2018.
(13)	Includes options to purchase ~~74,184~~94,432 shares of Class A common stock and 5,250 shares of Class C common stock granted to Mr. Overbaugh that are currently exercisable, or will become exercisable within 60 days of March 31, ~~2017.~~2018.
(14)	The managing partner of Associated Investors is Scott M. Quist, who exercises sole voting and investment powers.
(15)	Includes options to purchase ~~113,431~~114,534 shares of Class A common stock and 5,250 shares of Class C common stock granted to Mr. Andrew Quist that are currently exercisable, or will become exercisable within 60 days of March 31, ~~2017.~~2018.
(16)	Includes options to purchase ~~21,738~~28,273 shares of Class A common stock granted to Mr. Stephens that are currently exercisable, or will become exercisable within 60 days of March 31, ~~2017.~~2018.
(17)	Includes options to purchase ~~32,405~~42,294 shares of Class A common stock and 3,937 shares of Class C common stock granted to Mr. Sill that are currently exercisable, or will become exercisable within 60 days of March 31, ~~2017.~~2018.
(18)	Includes options to purchase ~~70,068~~77,085 shares of Class A common stock granted to Mr. Hunter that are currently exercisable, or will become exercisable within 60 days of March 31, ~~2017.~~2018.
(19)	Includes options to purchase ~~70,068~~63,236 shares of Class A common stock granted to Mr. Moody that are currently exercisable, or will become exercisable within 60 days of March 31, ~~2017.~~2018.
(20)	Includes options to purchase ~~30,232~~38,503 shares of Class A common stock granted to Mr. Johnson that are currently exercisable, or will become exercisable within 60 days of March 31, ~~2017.~~2018.
(21)	Includes options to purchase ~~23,515~~29,916 shares of Class A common stock granted to Mr. Fuller that are currently exercisable, or will become exercisable within 60 days of March 31, ~~2017.~~2018.
(22)	Includes options to purchase ~~22,238~~28,575 shares of Class A common stock granted to Mr. Cook that are currently exercisable, or will become exercisable within 60 days of March 31, ~~2017.~~2018.
(23)	Includes options to purchase ~~20,365~~26,609 shares of Class A common stock granted to Mr. Wilbur that are currently exercisable, or will become exercisable within 60 days of March 31, ~~2017.~~2018.

The Company's executive officers and directors, as a group, own beneficially approximately 18.6% of the outstanding shares of the Company's Class A and Class C common stock. At the Annual Meeting of Stockholders that was held on July 2, 2014, the stockholders approved resolutions providing for a 1-for-10 reverse stock split of the Company's Class C common stock and for weighted voting of the Class C common stock. As a result, each share of Class C common stock has weighted voting of ten votes per share and may be converted into one share of Class A common stock.

~~118~~

Item 13. Certain Relationships and Related Transactions and Director Independence

119

Item 14. Principal Accounting Fees and Services

The following table summarizes the fees of the Company's current independent auditors, billed to the Company for each of the last two fiscal years for audit and other services. All of these fees were reviewed and approved by the Audit Committee of the Board of Directors:

Fee Category	2017		2016
Audit Fees (1)	$	853,567	$	345,583
Audit-Related Fees (2)		33,000		41,200
Tax Fees (3)		93,000		79,622
All Other Fees (4)		-		-
	$	979,567	$	466,405

_____________

Fee Category
2016 2015
Audit Fees (1) $ 345,583 $ 333,531
Audit-Related Fees (2) 41,200 34,000
Tax Fees (3) 79,622 78,933
All Other Fees (4) - -
$ 466,405 $ 446,464

(1)	Audit fees consist of aggregate fees billed for professional services rendered for the audit of the Company's annual financial statements and review of the interim financial statements included in quarterly reports or services that are normally provided by the independent auditor in connection with statutory and regulatory filings for the years ended December 31, ~~2016~~2017 and ~~2015.~~ 2016.

(2)	Audit related fees consist of aggregate fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the Company's financial statements and are not reported under "Audit Fees". These fees include review of registration statements, and audits of the Company's ESOP and 401(k) Plans.

(3)	Tax fees consist of aggregate fees billed for professional services for tax compliance, tax advice, and tax planning.

(4)	All other fees consist of aggregate fees billed for products and services by the independent auditors, other than those disclosed above.

PART IV

Item 15. Exhibits, Financial Statement Schedules

(a)(1) Financial Statements

See "Index to Consolidated Financial Statements" under Item 8 above.

(a)(2)Financial Statement Schedules

~~II.Condensed Balance Sheets as of December 31, 2016 and 2015 and Condensed~~

	II.	Condensed Balance Sheets as of December 31, 2017 and 2016 and Condensed
		Statement of Earnings and Cash Flows for the years ended 2017 and 2016

	IV.	Reinsurance

	V.	Valuation and Qualifying Accounts

~~Statement of Earnings and Cash Flows for the years ended 2016, 2015 and 2014~~

~~IV.Reinsurance~~

V.~~Valuation and Qualifying Accounts~~

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.

~~119~~120

(a)(3)Exhibits

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

3.1	Articles of Amendment to Articles of Incorporation ~~(14)~~(9)

3.2	Amended Bylaws ~~(4)~~(11)

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)

7.1	Letter from Eide Bailly, LLP (10)

10.1	Amended Employee Stock Ownership Plan (ESOP) and Trust Agreement (1)

10.2	2003 Stock Option Plan ~~(3)~~(2)

10.3	2006 Director Stock Option Plan ~~(6)~~(3)

10.4	2013 Amended Stock Option and Other Equity Incentive Awards Plan ~~(12)~~(8)

10.5	2014 Director Stock Option Plan ~~(9)~~(4)
~~10.6~~	~~Deferred Compensation Plan (2)~~
~~10.7~~ 10.6	Employment agreement with Scott M. Quist ~~(11)~~(6)
~~10.8~~	~~Indemnification Agreement among SecurityNational Mortgage Company, Lehman Brothers Bank, and Aurora Loan Services (6)~~
~~10.9~~ 10.7	~~Agreement and Plan of Reorganization among Security National Financial Corporation and certain subsidiaries (7)~~
~~10.10~~	Purchase Agreement among Security National Financial Corporation, SNFC Subsidiary, LLC, American Funeral Financial, LLC, and Hypershop, LLC ~~(8)~~(5)
~~10.11~~
10.8	Stock Purchase Agreement among Security National Financial Corporation, ~~Christi Babb~~ and ~~Jack Madden, Jr.~~Reppond Holding Company, to purchase First Guaranty Insurance Company ~~(13)~~(8)

21	Subsidiaries of the Registrant

23.1	Consent of Eide Bailly LLP ~~(10)~~(7)

23.2	Consent of Mackey Price & Mecham ~~(10)~~(7)

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

101.xml	Instance Document

101.xsd	Taxonomy Extension Schema Document

101.cal	Taxonomy Extension Calculation Linkbase Document

101.def	Taxonomy Extension Definition Linkbase Document

101.lab	Taxonomy Extension Label Linkbase Document

101.pre	Taxonomy Extension Presentation Linkbase Document

~~120~~121

(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 April 3, 2002~~
~~(3)~~	Incorporated by reference from Schedule 14A Definitive Proxy Statement, as filed on ~~September~~June 5, 2003, relating to the Company's Annual Meeting of Stockholders
~~(4)~~	~~Incorporated by reference from Report on Form 10-Q, as filed on November 14, 2003~~
~~(5)~~ (3)	Incorporated by reference from Schedule 14A Definitive Proxy Statement, as filed on ~~September~~June 1, 2007, relating to the Company's Annual Meeting of Stockholders
~~(6)~~	~~Incorporated by reference from Report on Form 10-K, as filed on September 30, 2009~~
~~(7)~~	~~Incorporated by reference from Report on Form 10-Q, as filed on November 13, 2013~~
~~(8)~~	~~Incorporated by reference from Report on Form 8-K, as filed on September 13, 2014~~
~~(9)~~ (4)	Incorporated by reference from Schedule 14A Definitive Proxy Statement, as filed on ~~September~~June 2, 2014, related to Company's Annual Meeting of Stockholders
(5)	~~(10)~~Incorporated by reference from Report on Form 8-K, as filed on June 13, 2014
(6)	Incorporated by reference from Report on Form 10-Q, as filed on August 14, 2015
(7)	Incorporated by reference from Registration Statement on Form S-8, as filed on October 20, 2015
~~(11)~~	~~Incorporated by reference from Report on Form 10-Q, as filed on November 13, 2015~~
~~(12)~~ (8)	Incorporated by reference from Report on Form 10-Q, as filed on August 15, 2016
~~(13)~~(9)	~~Incorporated by reference from Report on Form 8-K, as filed on July 19, 2016~~
~~(14)~~	Incorporated by reference from Report on Form 10-K, as filed on March 31, 2017
(10)	Incorporated by reference from Report on Form 8-K, as filed on August 4, 2017
(11)	Incorporated by reference from Report on Form 10-Q, as filed on August 25, 2017

~~121~~122

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

~~SECURITY NATIONAL FINANCIAL CORPORATION~~

		SECURITY NATIONAL FINANCIAL CORPORATION


Dated: ~~August 25, 2017~~March 30, 2018	By:	/s/ Scott M. Quist
		Scott M. Quist
		Chairman of the Board, President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

SIGNATURE	TITLE	DATE

/s/ Scott M. Quist	Chairman of the Board, President
Scott M. Quist	and Chief Executive Officer
	(Principal Executive Officer)	~~August 25, 2017~~March 30, 2018

/s/ Garrett S. Sill	Chief Financial Officer and
Garrett S. Sill	Treasurer (Principal Financial
	and Accounting Officer)	~~August 25, 2017~~ March 30, 2018

/s/ Jason G. Overbaugh	Vice President and Director	~~August 25, 2017~~March 30, 2018
Jason G. Overbaugh

/s/ S. Andrew Quist	Vice President and Director	~~August 25, 2017~~March 30, 2018
S. Andrew Quist

/s/ John L. Cook	Director	~~August 25, 2017~~March 30, 2018
John L. Cook

/s/ Gilbert A. Fuller	Director	~~August 25, 2017~~March 30, 2018
Gilbert A. Fuller

/s/ Robert G. Hunter	Director	~~August 25, 2017~~March 30, 2018
Robert G. Hunter

/s/ H. Craig Moody	Director	~~August 25, 2017~~March 30, 2018
H. Craig Moody

/s/ Norman G. Wilbur	Director	~~August 25, 2017~~March 30, 2018
Norman G. Wilbur

~~122~~123

Schedule II

SECURITY NATIONAL FINANCIAL CORPORATION

(Parent Company Only)

Condensed Financial Information

Condensed Balance Sheets

	December 31				December 31
	2016 (As Restated)		2015 (As Restated)		2017		2016
Assets

Mortgage loans on real estate	$	2,300,000	$	-
Mortgage loans held for investment					$	1,725,000	$	2,300,000

Cash		1,252,653		2,054,192		1,153,067		1,252,653

Investment in subsidiaries (equity method)		140,864,706		126,918,934		146,573,888		140,864,706

Receivable from affiliates		13,028,057		11,088,597		15,014,821		13,028,057

Restricted assets		2,612,672		-		3,261,910		2,612,672
Property and equipment, at cost, net of accumulated depreciation of $1,663,396 for 2016 and $1,663,396 for 2015		-		-

Property and equipment, at cost, net of accumulated depreciation of $1,659,613 for 2017 and $1,659,613 for 2016						-		-

Other assets		2,803		2,803		-		2,803

Total assets	$	160,060,891	$	140,064,526	$	167,728,686	$	160,060,891

~~See accompanying notes to condensed financial statements.~~

~~123~~

~~Schedule II (Continued)~~

~~SECURITY NATIONAL FINANCIAL CORPORATION~~

~~(Parent Company Only)~~

~~Condensed Financial Information~~

~~Condensed Balance Sheets (Continued)~~

December 31

2016
(As Restated)

2015
(As Restated)

Liabilities and Stockholders' Equity Liabilities
Bank and other loans payable:
Current installments $ 1,625,974 $ 969,755
Long-term 2,372,690 1,093,718
Advances from affiliated companies 9,074,311 9,069,338
Other liabilities and accrued expenses 672,638 976,394
Income taxes 13,756,147 10,238,642
Total liabilities 27,501,760 22,347,847

Stockholders' Equity
Preferred stock - non-voting - $1.00 par value; 5,000,000 shares authorized; none issued or outstanding - -
Class A common stock $2.00 par value; 20,000,000 shares authorized; issued 13,819,006 shares in 2016 and 13,109,100 shares in 2015 27,638,012 26,218,200
Class B non-voting common stock-$1.00 par value; 5,000,000 shares authorized; none issued or outstanding - -
Class C convertible common stock, $2.00 par value; 3,000,000 shares authorized; issued 1,902,229 shares in 2016 and 1,709,640 shares in 2015 3,804,458 3,419,280

Additional paid-in capital 34,813,246 30,232,582
Accumulated other comprehensive income, net of taxes 264,822 (499,358 )
Retained Earnings 67,409,204 60,525,404
Treasury stock at cost - 704,122 Class A shares and -0- Class C shares in 2016; 930,546 Class A shares and -0- Class C shares in 2015, held by affiliated companies (1,370,611 ) (2,179,429 )
Total stockholders' equity 132,559,131 117,716,679
Total Liabilities and Stockholders' Equity $ 160,060,891 $ 140,064,526

See accompanying notes to condensed financial statements.

124

Schedule II (Continued)

SECURITY NATIONAL FINANCIAL CORPORATION

(Parent Company Only)

Condensed Financial Information

Condensed Balance Sheets (Continued)

	December 31
	2017			2016
Liabilities and Stockholders' Equity Liabilities
Bank and other loans payable:
Current installments	$	640,204		$	1,625,974
Long-term		1,817,905			2,372,690
Advances from affiliated companies		9,078,031			9,074,311
Other liabilities and accrued expenses		1,140,107			672,638
Income taxes		6,484,449			13,756,147
Total liabilities		19,160,696			27,501,760

Stockholders' Equity
Preferred stock - non-voting - $1.00 par value; 5,000,000 shares authorized; none issued or outstanding		-			-
Class A common stock $2.00 par value; 20,000,000 shares authorized; issued 14,535,577 shares in 2017 and 13,819,006 shares in 2016		29,071,154			27,638,012
Class B non-voting common stock-$1.00 par value; 5,000,000 shares authorized; none issued or outstanding		-			-
Class C convertible common stock, $2.00 par value; 3,000,000 shares authorized; issued 2,089,374 shares in 2017 and 1,902,229 shares in 2016		4,178,748			3,804,458

Additional paid-in capital		38,125,042			34,813,246
Accumulated other comprehensive income, net of taxes		603,170			264,822
Retained Earnings		77,520,951			67,409,204
Treasury stock at cost - 704,122 Class A shares and -0- Class C shares in 2017; 537,203 Class A shares and -0- Class C shares in 2016, held by affiliated companies		(931,075	)		(1,370,611	)
Total stockholders' equity		148,567,990			132,559,131
Total Liabilities and Stockholders' Equity	$	167,728,686		$	160,060,891

See accompanying notes to condensed financial statements.

125

Schedule II (Continued)

SECURITY NATIONAL FINANCIAL CORPORATION

(Parent Company Only)

Condensed Financial Information

Condensed Statements of Earnings

	Year Ended December 31									Year Ended December 31
	2016 (As Restated)			2015 (As Restated)			2014 (As Restated)			2017		2016
Revenue
Net investment income	$	9,059		$	86,829		$	91,748		$	79,634	$	9,059
Fees from affiliates		1,119,272			976,146			1,009,552			1,215,110		1,119,272
Other Income		23,464			-			-			78,427		23,464
Total revenue		1,151,795			1,062,975			1,101,300			1,373,171		1,151,795

Benefits and Expenses:
General and administrative expenses		616,356			673,491			728,929			800,444		616,356
Interest expense		78,950			105,614			173,362			144,801		78,950
Total benefits and expenses		695,306			779,105			902,291			945,245		695,306

Earnings before income taxes, and earnings of subsidiaries											427,926		456,489
Earnings before income taxes, and earnings of subsidiaries		456,489			283,870			199,009
Income tax expense		(3,658,312	)		(3,275,782	)		(3,888,770	)
Income tax benefit (expense)											6,961,554		(3,658,312	)
Equity in earnings of subsidiaries		15,390,450			16,343,353			11,906,593			6,723,454		15,390,450

Net earnings	$	12,188,627		$	13,351,441		$	8,216,832		$	14,112,934	$	12,188,627

~~See accompanying notes to condensed financial statements.~~

~~125~~

~~Schedule II (Continued)~~

~~SECURITY NATIONAL FINANCIAL CORPORATION~~

~~(Parent Company Only)~~

~~Condensed Financial Information~~

~~Condensed Statements of Cash Flow~~

Year Ended December 31

2016
(As Restated)

2015
(As Restated)

2014
(As Restated)

Cash flows from operating activities:
Net earnings $ 12,188,627 $ 13,351,441 $ 8,216,832
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation - - 309
Undistributed earnings of affiliates 15,390,450 16,343,353 11,906,593
Provision for deferred and other income taxes 3,517,505 3,275,260 5,186,793
Stock based compensation expense 343,577 387,608 391,220
Benefit plans funded with treasury stock 1,429,962 1,197,236 899,850
Change in assets and liabilities:
Other assets - (1 ) 13,296
Other liabilities (303,756 ) (94,068 ) (199,052 )

Net cash provided by operating activities 32,566,365 34,460,829 26,415,841
- - -
Cash flows from investing activities:
Purchases of restricted assets (2,612,672 ) - -
Investment in subsidiaries (28,572,042 ) (30,988,389 ) (23,332,723 )
Mortgage loans made (2,300,000 ) - -
Cash paid for purchase of subsidiaries, net of cash acquired - - (3,000,000 )

Net cash used in investing activities (33,484,714 ) (30,988,389 ) (26,332,723 )

Cash flows from financing activities:
Advances from (to) affiliates (1,934,487 ) 259,513 (1,919,022 )
Purchase of treasury stock - (181,539 ) -
Proceeds from stock options exercised 116,106 33,677 74,024
Repayment of bank and other loans payable (969,163 ) (1,394,376 ) (1,812,964 )
Proceeds from bank borrowings 2,904,354 - -

Net cash provided by (used in) financing activities 116,810 (1,282,725 ) (3,657,962 )

Net change in cash (801,539 ) 2,189,715 (3,574,844 )
Cash at beginning of year 2,054,192 (135,523 ) 3,439,321
Cash at end of year $ 1,252,653 $ 2,054,192 $ (135,523 )

See accompanying notes to condensed financial statements.

126

Schedule II (Continued)

SECURITY NATIONAL FINANCIAL CORPORATION

(Parent Company Only)

Condensed Financial Information

Condensed Statements of Cash Flow

	Year Ended December 31
	2017			2016
Cash flows from operating activities:
Net earnings	$	14,112,934		$	12,188,627
Adjustments to reconcile net earnings to net cash provided by operating activities:
Undistributed earnings of affiliates		6,723,454			15,390,450
Provision for deferred and other income taxes		(7,271,698	)		3,517,505
Stock based compensation expense		395,603			343,577
Benefit plans funded with treasury stock		1,534,861			1,429,962
Change in assets and liabilities:
Other assets		2,803			-
Other liabilities		466,508			(303,756	)

Net cash provided by operating activities		15,964,465			32,566,365
		-			-
Cash flows from investing activities:
Net changes in restricted assets		(649,238	)		(2,612,672	)
Investment in subsidiaries		(12,094,288	)		(28,572,042	)
Mortgage loans held for investment made		(1,725,000	)		(2,300,000	)
Payments received for mortgage loans held for investment		2,300,000			-

Net cash used in investing activities		(12,168,526	)		(33,484,714	)

Cash flows from financing activities:
Advances to affiliates		(1,983,044	)		(1,934,487	)
Purchase of treasury stock		(382,734	)		-
Proceeds from stock options exercised		9,847			116,106
Repayment of bank loans		(1,539,594	)		(969,163	)
Proceeds from bank borrowings		-			2,904,354

Net cash provided by (used in) financing activities		(3,895,525	)		116,810

Net change in cash		(99,586	)		(801,539	)
Cash at beginning of year		1,252,653			2,054,192
Cash at end of year	$	1,153,067		$	1,252,653

See accompanying notes to condensed financial statements.

127

Schedule II (Continued)

SECURITY NATIONAL FINANCIAL CORPORATION

(Parent Company Only)

Condensed Financial Information

Notes to Condensed Financial Statements

1)Bank and Other Loans Payable

	December 31				December 31
	2016		2015		2017		2016

4.27% note payable in monthly installments of $53,881 including principal and interest, collateralized by shares of Security National Life Insurance Company stock, due November 2021.	$	2,904,354	$	-		2,372,690	$	2,904,354
3.85% note payable in monthly installments of $86,059 including principal and interest, collateralized by shares of Security National Life Insurance Company stock, due January 2018.		1,093,349		2,062,512
3.85% note payable in monthly installments of $85,419 including principal and interest, collateralized by shares of Security National Life Insurance Company stock, due January 2018.						85,419		1,093,349
Other notes payable		961		961		-		961
Total bank and other loans		3,998,664		2,063,473		2,458,109		3,998,664
Less current installments		1,625,974		969,755		640,204		1,625,974
Bank and other loans, excluding current installments	$	2,372,690	$	1,093,718	$	1,817,905	$	2,372,690

The Company has a $2,000,000 revolving line-of-credit with a bank with interest payable at the prime rate minus .75% ~~(3.00%~~(3.75% at December 31, ~~2016)~~2017), secured by the capital stock of Security National Life Insurance Company and maturing September 30, ~~2017,~~2018, renewable annually. At December 31, ~~2016,~~2017, the Company was contingently liable under a standby letter of credit aggregating ~~$560,350,~~$625,405, to be used as collateral to cover any contingency related to additional risk assessments pertaining to the Company's captive insurance program and under a standby letter of credit aggregating $48,220 issued as a security deposit to guarantee payment of final bills for electric and gas utility services for a commercial real estate property owned by the Company in Wichita, Kansas. The Company does not expect any material losses to result from the issuance of the standby letter of credit because claims are not expected to exceed premiums paid. As of December 31, ~~2016,~~2017, there were no amounts outstanding under the revolving line-of-credit.

128

The following tabulation shows the combined maturities of bank and other loans payable:

2017	$	1,625,974
2018		554,785	$	640,204
2019		579,286		579,286
2020		604,729		604,729
2021		633,890		633,890
2022				-
Thereafter		-		-
Total	$	3,998,664	$	2,458,109

2)Advances from Affiliated Companies

	December 31				December 31
	2015		2015		2017		2016
Non-interest bearing advances from affiliates:
Cemetery and Mortuary subsidiary	$	1,459,841	$	1,459,841	$	1,459,841	$	1,459,841
Life insurance subsidiaries		7,614,470		7,609,497		7,618,190		7,614,470
	$	9,074,311	$	9,069,338	$	9,078,031	$	9,074,311

3)Dividends and Capital Contributions

In ~~2016, 2015~~2017 and ~~2014,~~2016, SecurityNational Mortgage Company, a wholly owned subsidiary of the Registrant, paid to the registrant cash dividends of ~~$2,208,859, $1,698,317,~~$2,288,222 and ~~$480,461,~~$2,208,859, respectively.

~~127~~129

Schedule IV

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Reinsurance

									Percentage											Percentage
			Ceded to		Assumed				of Amount					Ceded to		Assumed				of Amount
	Direct		Other		from Other		Net		Assumed			Direct		Other		from Other		Net		Assumed
												Amount		Companies		Companies		Amount		to Net
2017
Life Insurance in force ($000)												$	1,652,902	$	60,564	$	106,246	$	1,698,584		6.3	%

Premiums:
Life Insurance												$	70,665,987	$	943,120	$	585,508	$	70,308,375		0.8	%
Accident and Health Insurance													104,084		-		17		104,101		0.0	%
Total premiums												$	70,770,071	$	943,120	$	585,525	$	70,412,476		0.8	%
	Amount		Companies		Companies		Amount		to Net
2016
Life Insurance in force ($000)	$	1,562,335	$	60,972	$	109,746	$	1,611,109		6.8	%	$	1,562,335	$	60,972	$	109,746	$	1,611,109		6.8	%

Premiums:
Life Insurance	$	64,002,795	$	600,412	$	985,555	$	64,387,938		1.5	%	$	64,002,795	$	600,412	$	985,555	$	64,387,938		1.5	%
Accident and Health Insurance		113,063		-		16		113,079		0.0	%		113,063		-		16		113,079		0.0	%
Total premiums	$	64,115,858	$	600,412	$	985,571	$	64,501,017		1.5	%	$	64,115,858	$	600,412	$	985,571	$	64,501,017		1.5	%

2015
Life Insurance in force ($000)	$	1,393,868	$	61,655	$	1,468,935	$	2,801,148		52.4	%

Premiums:
Life Insurance	$	54,978,702	$	798,483	$	2,110,480	$	56,290,699		3.7	%
Accident and Health Insurance		119,153		-		11		119,164		0.0	%
Total premiums	$	55,097,855	$	798,483	$	2,110,491	$	56,409,863		3.7	%

2014
Life Insurance in force ($000)	$	1,301,156	$	63,457	$	1,462,340	$	2,700,039		54.2	%

Premiums:
Life Insurance	$	51,938,012	$	855,266	$	1,792,910	$	52,875,656		3.4	%
Accident and Health Insurance		133,002		-		21		133,023		0.0	%
Total premiums	$	52,071,014	$	855,266	$	1,792,931	$	53,008,679		3.4	%

~~128~~130

Schedule V

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Valuation and Qualifying Accounts

Additions Deductions
Balance at Charged to Disposals Balance
Beginning Costs and and at End of
of Year Expenses Write-offs Year
For the Year Ended December 31, 2016

Accumulated depreciation on real estate $ 12,210,346 $ 4,873,478 $ (945,385 ) $ 16,138,439

Allowance for losses on mortgage loans on real estate and construction loans held for investment 1,848,120 320,798 (420,135 ) 1,748,783

Accumulated depreciation on property and equipment 18,298,397 2,182,724 (568,457 ) 19,912,664

Allowance for doubtful accounts on receivables 1,700,696 920,354 (265,568 ) 2,355,482

Allowance for doubtful accounts on collateral loans 906,616 610,656 (397,642 ) 1,119,630

For the Year Ended December 31, 2015

Accumulated depreciation on real estate $ 10,875,419 $ 2,840,489 $ (1,505,562 ) $ 12,210,346

Allowance for losses on mortgage loans on real estate and construction loans held for investment 2,003,055 (30,993 ) (123,942 ) 1,848,120

Accumulated depreciation on property and equipment 16,419,343 2,183,496 (304,442 ) 18,298,397

Allowance for doubtful accounts on receivables 1,280,859 673,743 (253,906 ) 1,700,696

Allowance for doubtful accounts on collateral loans 693,413 545,372 (332,169 ) 906,616

For the Year Ended December 31, 2014

Accumulated depreciation on real estate $ 9,658,599 $ 2,009,521 $ (792,701 ) $ 10,875,419

Allowance for losses on mortgage loans on real estate and construction loans held for investment 1,652,090 389,409 (38,444 ) 2,003,055

Accumulated depreciation on property and equipment 15,260,635 2,177,165 (1,018,457 ) 16,419,343

Allowance for doubtful accounts on receivables 1,248,633 403,146 (370,920 ) 1,280,859

Allowance for doubtful accounts on collateral loans 269,175 524,192 (99,954 ) 693,413

			Additions		Deductions
	Balance at		Charged to		Disposals			Balance
	Beginning		Costs and		and			at End of
	of Year		Expenses		Write-offs			Year
For the Year Ended December 31, 2017

Accumulated depreciation on real estate held for investment	$	16,138,439	$	4,059,745	$	(1,409,315	)	$	18,788,869

Allowance for losses on mortgage loans held for investment		1,748,783		436,264		(416,251	)		1,768,796

Accumulated depreciation on property and equipment		19,912,664		2,220,693		(4,561,031	)		17,572,326

Allowance for doubtful accounts on receivables		2,355,482		111,095		(922,059	)		1,544,518

Allowance for doubtful accounts on other investments		1,119,630		606,713		(879,702	)		846,641

For the Year Ended December 31, 2016

Accumulated depreciation on real estate held for investment	$	12,210,346	$	4,873,478	$	(945,385	)	$	16,138,439

Allowance for losses on mortgage loans held for investment		1,848,120		320,798		(420,135	)		1,748,783

Accumulated depreciation on property and equipment		18,298,397		2,182,724		(568,457	)		19,912,664

Allowance for doubtful accounts on receivables		1,700,696		920,354		(265,568	)		2,355,482

Allowance for doubtful accounts on other investments		906,616		610,656		(397,642	)		1,119,630

~~129~~131

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

5300 South 360 West, Suite 250 Salt Lake City, Utah	84123
(Address of principal executive offices)	(Zip Code)

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

Title of each class which registered	Name of each exchange on ~~which registered~~
Class A common stock, $2.00 Par Value	~~NASDAQ National~~ Nasdaq Stock Market
Class C common stock, $2.00 Par Value	None

Large accelerated filer [ ]	Accelerated filer [ ]
Nonaccelerated filer [ ]	Smaller reporting company [X]
~~(Do not check if a smaller reporting company)~~

		Page
Part I

Item 1.	Business	3

Item 2.	Properties	10

Item 3.	Legal Proceedings	13

Item 4.	Mine Safety Disclosures	14

Part II

Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	15

Item 6.	Selected Financial Data	17

Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	17

Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	3029

Item 8.	Financial Statements and Supplementary Data	3029

Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	101

Item 9A.	Controls and Procedures	101

Item 9B.	Other Information	102

Part III

Item 10.	Directors, Executive Officers and Corporate Governance	103

Item 11.	Executive Compensation	~~107~~108

Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	118

Item 13.	Certain Relationships and Related Transactions, and Director Independence	119

Item 14.	Principal Accounting Fees and Services	~~119~~120

Part IV

Item 15.	Exhibits, Financial Statement Schedules	~~119~~120

~~(1)~~	~~Includes coinsurance with Mothe Life Insurance Company and DLE Life Insurance Company.~~
~~(2)~~ (1)	Includes the acquisition of First Guaranty ~~Insurance Company~~ and the termination of the reinsurance assumed ~~for~~from Servicemembers' Group Life Insurance ("SGLI").

Age Nearest Birthday	Non‑Medical Limits

0‑50	$	100,000
51‑up	Medical information required (APS or exam)

				Net Saleable Acreage						Net Saleable Acreage
Name of Cemetery	Location	Date Acquired	Developed Acreage (1)	Total Acreage (1)	Acres Sold as Cemetery Spaces (2)	Total Available Acreage (1)	Location	Date Acquired	Developed Acreage (1)	Total Acreage (1)	Acres Sold as Cemetery Spaces (2)	Total Available Acreage (1)
Memorial Estates, Inc.	Memorial Estates, Inc.						Memorial Estates, Inc.
Lakeview Cemetery	1640 East Lakeview Drive Bountiful, Utah	1973	7	40	6	34	1640 East Lakeview Drive Bountiful, Utah	1973	9	39	7	32

Mountain View Cemetery	3115 East 7800 South Salt Lake City, Utah	1973	17	54	16	38	3115 East 7800 South Salt Lake City, Utah	1973	26	54	20	34

Redwood Cemetery ~~(4)~~(3)	6500 South Redwood Road West Jordan, Utah	1973	34	78	30	48	6500 South Redwood Road West Jordan, Utah	1973	28	71	35	36

Deseret Memorial Inc. Lake Hills Cemetery (3)(6)	Deseret Memorial Inc. Lake Hills Cemetery (3)(6)						Deseret Memorial Inc. Lake Hills Cemetery (3)(6)
Lake Hills Cemetery ~~(3)~~	10055 South State Street Sandy, Utah	1991	9	28	4	24	10055 South State Street Sandy, Utah	1991	9	28	6	22

Holladay Memorial Park, Inc.	Holladay Memorial Park, Inc.						Holladay Memorial Park, Inc.
Holladay Memorial Park ~~(4)~~(3)	4900 South Memory Lane Holladay, Utah	1991	5	14	4	10	4900 South Memory Lane Holladay, Utah	1991	12	14	7

California Memorial Estates, Inc.	California Memorial Estates, Inc.						California Memorial Estates, Inc.
Singing Hills Memorial Park(4)	2800 Dehesa Road El Cajon, California	1995	8	35	4	31	2800 Dehesa Road El Cajon, California	1995	8	97	6	91

	(1)	The acreage represents estimates of acres that are based upon survey reports, title reports, appraisal reports or the Company's inspection of the cemeteries. The Company estimates that there are approximately 1,200 spaces per developed acre.
	(2)	Includes both reserved and occupied spaces.
	(3)	Includes two granite mausoleums.
	~~(2)~~	~~Includes spaces sold for cash and installment contract sales.~~
	~~(3)~~	As of December 31, 2016, there were mortgages of approximately $147,000 collateralized by the property and facilities at Deseret Mortuary, Cottonwood Mortuary, Holladay Memorial Park, and Lake Hills Cemetery.
	(4)	~~These cemeteries include two granite mausoleums.~~ Includes an open easement.

		Date	Viewing		Square		Date	Viewing		Square
Name of Mortuary	Location	Acquired	Room(s)	Chapel(s)	Footage	Location	Acquired	Room(s)	Chapel(s)	Footage
Memorial Mortuary, Inc.
Memorial Mortuary	5850 South 900 East					5850 South 900 East
	Murray, Utah	1973	3	1	20,000	Murray, Utah	1973	3	1	20,000

Affordable Funerals and Cremations, St. George	157 East Riverside Dr., No. 3A	2016	1	1	2,360	157 East Riverside Dr., No. 3A	2016	1	1	2,360
	St. George, Utah					St. George, Utah

Memorial Estates, Inc.
Redwood Mortuary~~(2)~~(1)	6500 South Redwood Rd.					6500 South Redwood Rd.
	West Jordan, Utah	1973	2	1	10,000	West Jordan, Utah	1973	2	1	10,000

Mountain View Mortuary~~(2)~~(1)	3115 East 7800 South					3115 East 7800 South
	Salt Lake City, Utah	1973	2	1	16,000	Salt Lake City, Utah	1973	2	1	16,000

Lakeview Mortuary~~(2)~~(1)	1640 East Lakeview Dr.					1640 East Lakeview Dr.
	Bountiful, Utah	1973	0	1	5,500	Bountiful, Utah	1973	0	1	5,500

Deseret Memorial, Inc.
Deseret Mortuary~~(1)~~	36 East 700 South					36 East 700 South
	Salt Lake City, Utah	1991	2	2	36,300	Salt Lake City, Utah	1991	2	2	36,300

Lakehills Mortuary~~(2)~~(1)	10055 South State St.					10055 South State St.
	Sandy, Utah	1991	2	1	18,000	Sandy, Utah	1991	2	1	18,000

Cottonwood Mortuary, Inc.
Cottonwood Mortuary~~(2)~~(1)	4670 South Highland Dr.					4670 South Highland Dr.
	Holladay, Utah	1991	2	1	14,500	Holladay, Utah	1991	2	1	14,500

	Price Range (1)				Price Range (1)
	High		Low		High		Low
Period (Calendar Year)
2015
First Quarter	$	5.66	$	4.82
Second Quarter	$	6.34	$	4.75
Third Quarter	$	7.38	$	5.90
Fourth Quarter	$	6.20	$	5.34

2016
First Quarter	$	6.17	$	4.85	$	5.87	$	4.62
Second Quarter	$	4.88	$	4.23	$	4.64	$	4.03
Third Quarter	$	5.62	$	4.59	$	5.35	$	4.37
Fourth Quarter	$	7.04	$	5.45	$	6.71	$	5.19

2017
First Quarter (through March 27, 2017)	$	7.30	$	6.24
First Quarter					$	6.95	$	5.94
Second Quarter					$	6.71	$	5.95
Third Quarter					$	6.14	$	4.86
Fourth Quarter					$	5.32	$	4.67

2018
First Quarter (through March 28, 2018)					$	5.40	$	4.32

Period	(a) Total Number of Class A Shares Purchased				(b) Average Price Paid per Class A Share		(c) Total Number of Class A Shares Purchased as Part of Publicly Announced Plan or Program		(d) Maximum Number (or Approximate Dollar Value) of Class A Shares that May Yet Be Purchased Under the Plan or Program
10/1/2017-10/31/2017		-				-		-		-
11/1/2017-11/30/2017		-				-		-		-
12/1/2017-12/31/2017		28,589	(1	)	$	6.90		-		-

Total		28,589			$	6.90		-		-

	12/31/12	12/31/13	12/31/14	12/31/15	12/31/16	12/31/17
SNFC	100	58	72	86	90	76
S & P 500	100	130	144	143	157	187
S & P Insurance	100	145	154	154	177	201

	12/31/11	12/31/12	12/31/13	12/31/14	12/31/15	12/31/16
SNFC	100	564	325	408	487	507
S & P 500	100	113	147	164	163	178
S & P Insurance	100	117	170	180	181	208

	Years ended December 31 (in thousands of dollars)
	2016		2015		2016 vs 2015 % Increase (Decrease)			2014		2015 vs 2014 % Increase (Decrease)
Revenues from external customers
Insurance premiums	$	64,501	$	56,410		14	%	$	53,009		6	%
Net investment income		28,618		25,297		13	%		23,008		10	%
Revenues from loan originations		2,401		2,474		(3	%)		4,029		(39	%)
Other		85		2,744		(97	%)		1,727		59	%
Total	$	95,605	$	86,925		10	%	$	81,773		6	%
Intersegment revenue	$	7,120	$	7,615		(7	%)	$	6,128		24	%
Earnings before income taxes	$	7,858	$	8,619		(9	%)	$	8,626		0	%

	2016				2015		2014		2013		2012				2017			2016					2015			2014			2013
Life Insurance
Policy/Cert Count as of December 31		531,775	(2	)		509,058		497,933		498,228		502,978	(1	)			533,065			531,775	(1	)			509,058			497,933			498,228
Insurance in force as of December 31 (omitted 000)	$	1,672,081	(2	)	$	2,862,803	$	2,763,496	$	2,828,470	$	2,913,419	(1	)		$	1,759,148		$	1,672,081	(1	)		$	2,862,803		$	2,763,496		$	2,828,470
Premiums Collected (omitted 000)	$	65,220	(2	)	$	55,780	$	52,418	$	50,009	$	48,168				$	69,565		$	65,220	(1	)		$	55,780		$	52,418		$	50,009

	2016				2015		2014		2013		2012
Annuities Policy/Cert Count as of December 31		21,364	(1	)		12,022		12,701		12,703		12,320
Deposits Collected (omitted 000)	$	11,019	(1	)	$	8,069	$	8,010	$	7,281	$	6,777

	2017		2016				2015		2014		2013
Annuities Policy/Cert Count as of December 31		22,729		21,364	(1	)		12,022		12,701		12,703
Deposits Collected (omitted 000)	$	10,353	$	11,019	(1	)	$	8,069	$	8,010	$	7,281

	2016		2015		2014		2013		2012		2017		2016		2015		2014		2013
Accident and Health Policy/Cert Count as of December 31		4,761		5,185		5,838		6,451		7,291		4,069		4,761		5,185		5,838		6,451
Premiums Collected (omitted 000)	$	113	$	119	$	133	$	144	$	158	$	104	$	113	$	119	$	133	$	144

·	Failure to deliver original documents specified by the investor,

·	The existence of misrepresentation or fraud in the origination of the loan,

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

·	Early pay-off of a loan, as defined by the agreements,

·	Excessive time to settle a loan,

·	Investor declines purchase, and

·	Discontinued product and expired commitment.

·	Research reasons for rejection,

·	Provide additional documents,

·	Request investor exceptions,

·	Appeal rejection decision to purchase committee, and

·	Commit to secondary investors.

·	For loans that are committed, the Company uses the commitment price.

·	For loans that are non-committed that have an active market, the Company uses the market ~~price on the repurchase date.~~price.

·	For loans that are non-committed where there is no market but there is a similar product, the Company uses the market value for the similar ~~product on the repurchase date.~~product.

·	For loans that are non-committed where no active market exists, ~~on the repurchase date,~~ the Company determines that the unpaid principal balance best approximates the market value, ~~on the repurchase date,~~ after considering the fair value of the underlying real estate collateral, ~~and~~ estimated future cash ~~flows.~~flows, and loan interest rate.

	-200 bps					-100 bps				+100 bps				+200 bps
Change in Market Value (in thousands)		$	28,572			$	13,491			$	(17,119	)		$	(30,069	)

	Less than 1 year		1-3 years		4-5 years		over 5 years		Total
Non-cancelable operating leases	$	6,556,093	$	7,857,212	$	534,151	$	37,438	$	14,984,894
Bank and other loans payable		101,177,574		37,668,543		4,502,845		8,791,717		152,140,679
	$	107,733,667	$	45,525,755	$	5,036,996	$	8,829,155	$	167,125,573

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
		Page No.
Financial Statements:

	Report of Independent Registered Public Accounting Firm	3130

	Consolidated Balance Sheets, December 31, ~~2016~~2017 and ~~2015 (As Restated)~~2016	32

	Consolidated Statements of Earnings for the Years Ended December 31, ~~2016, 2015~~2017 and ~~2014 (As Restated)~~2016	34

	Consolidated Statements of Comprehensive Income for the Years Ended December 31, ~~2016, 2015~~2017 and ~~2014 (As Restated)~~2016	35

	Consolidated Statements of Stockholders' Equity for the Years Ended December 31, ~~2016, 2015~~2017 and ~~2014 (As Restated)~~2016	36

	Consolidated Statements of Cash Flows for the Years Ended December 31, ~~2016, 2015~~2017 and ~~2014 (As Restated)~~2016	37

	Notes to Consolidated Financial Statements ~~(As Restated)~~	39

	December 31
Liabilities and Stockholders' Equity	2016 (As Restated)			2015 (As Restated)
Liabilities
Future life, annuity, and other benefits	$	584,067,692		$	515,789,254
Unearned premium reserve		4,469,771			4,737,305
Bank and other loans payable		152,140,679			131,005,614
Deferred pre-need cemetery and mortuary contract revenues		12,360,249			12,816,227
Cemetery perpetual care obligation		3,598,580			3,465,771
Accounts payable		4,213,109			3,502,046
Other liabilities and accrued expenses		33,950,503			31,027,381
Income taxes		24,318,869			20,412,889
Total liabilities		819,119,452			722,756,487
Stockholders' Equity
Preferred Stock:
Preferred stock - non-voting-$1.00 par value; 5,000,000 shares authorized; none issued or outstanding		-			-
Common Stock:
Class A: common stock - $2.00 par value; 20,000,000 shares authorized; issued 13,819,006 shares in 2016 and 13,109,100 shares in 2015		27,638,012			26,218,200
Class B: non-voting common stock - $1.00 par value; 5,000,000 shares authorized; none issued or outstanding		-			-
Class C: convertible common stock - $2.00 par value; 3,000,000 shares authorized; issued 1,902,229 shares in 2016 and 1,709,640 shares in 2015		3,804,458			3,419,280
Additional paid-in capital		34,813,246			30,232,582
Accumulated other comprehensive income, net of taxes		264,822			(499,358	)
Retained earnings		67,409,204			60,525,404
Treasury stock, at cost - 704,122 Class A shares and -0- Class C shares in 2016; 930,546 Class A shares and -0- Class C shares in 2015		(1,370,611	)		(2,179,429	)
Total stockholders' equity		132,559,131			117,716,679
Total Liabilities and Stockholders' Equity	$	951,678,583		$	840,473,166

	Years Ended December 31
	2016 (As Restated)			2015 (As Restated)			2014 (As Restated)
Revenues:
Insurance premiums and other considerations	$	64,501,017		$	56,409,863		$	53,008,679
Net investment income		37,582,444			34,007,904			28,303,740
Net mortuary and cemetery sales		12,267,640			11,502,045			11,426,308
Realized gains on investments and other assets		(176,387	)		2,401,359			1,918,176
Other than temporary impairments		(270,358	)		(605,430	)		(164,240	)
Mortgage fee income		183,542,796			171,517,284			126,807,473
Other		6,887,749			5,121,807			3,747,013
Total revenues		304,334,901			280,354,832			225,047,149

Benefits and expenses:
Death benefits		31,033,222			31,158,281			27,100,278
Surrenders and other policy benefits		2,354,158			2,391,612			2,689,686
Increase in future policy benefits		21,322,195			17,057,764			17,905,914

Amortization of deferred policy and pre-need acquisition costs and value of business acquired		8,003,175			5,641,293			6,892,978
Selling, general and administrative expenses:
Commissions		88,634,494			80,900,618			59,374,542
Personnel		70,254,479			60,860,275			49,360,406
Advertising		6,425,277			5,730,197			4,584,436
Rent and rent related		8,061,598			7,850,776			6,135,876
Depreciation on property and equipment		2,182,724			2,183,496			2,177,165
Provision for loan loss reserve		1,700,000			3,449,103			1,000,000
Costs related to funding mortgage loans		9,191,488			8,901,511			6,451,319
Other		28,569,949			26,954,378			22,800,066
Interest expense		5,111,868			4,458,612			2,994,429
Cost of goods and services sold – mortuaries and cemeteries		1,787,043			1,803,444			1,853,103

Total benefits and expenses		284,631,670			259,341,360			211,320,198

Earnings before income taxes		19,703,231			21,013,472			13,726,951
Income tax expense		(7,514,604	)		(7,662,031	)		(5,510,119	)

Net earnings	$	12,188,627		$	13,351,441		$	8,216,832

Net earnings per Class A equivalent common share (1)	$	0.82		$	0.92		$	0.59

Net earnings per Class A equivalent common share - assuming dilution(1)	$	0.81		$	0.89		$	0.57

Weighted average Class A equivalent common shares outstanding (1)		14,806,290			14,439,274			13,893,260

Weighted average Class A equivalent common shares outstanding-assuming dilution (1)		15,127,204			14,951,833			14,344,475

	Class A Common Stock		Class C Common Stock			Additional Paid-in Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Treasury Stock			Total			Class A Common Stock		Class C Common Stock			Additional Paid-in Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Treasury Stock			Total
Balance at January 1, 2014, (As Previously Reported)	$	23,614,574	$	2,660,382		$	23,215,875		$	310,772		$	40,574,211		$	(2,624,625	)	$	87,751,189
Balance at December 31, 2015																						26,218,200		3,419,280			30,232,582			(499,358	)		60,525,404			(2,179,429	)		117,716,679
				.
Prior period adjustment (see Note 21)		-		-			-			-			6,405,271			-			6,405,271

Balance at January 1, 2014 (As Restated)		23,614,574		2,660,382			23,215,875			310,772			46,979,482			(2,624,625	)		94,156,460

Net earnings (As Restated)		-		-			-			-			8,216,832			-			8,216,832
Other comprehensive loss		-		-			-			(49,415	)		-			-			(49,415	)
Net earnings																						-		-			-			-			12,188,627			-			12,188,627
Other comprehensive income																						-		-			-			764,180			-			-			764,180
Stock based compensation		-		-			391,220			-			-						391,220			-		-			343,577			-			-			-			343,577
Reverse stock split true up		-		30			-			-			(30	)		-			-
Exercise of stock options		108,824		-			(34,800	)		-			-			-			74,024			85,268		209,950			(179,112	)		-			-			-			116,106
Sale of treasury stock		-		-			361,679			-			-			538,171			899,850			-		-			621,144			-			-			808,818			1,429,962
Stock dividends		1,190,040		132,767			1,997,147			-			(3,319,954	)		-			-			1,315,838		193,934			3,795,055			-			(5,304,827	)		-			-
Conversion Class C to Class A		5,042		(5,041	)		(2	)		-			1			-			-			18,706		(18,706	)		-			-			-			-			-
Balance at December 31, 2014, (As Restated)		24,918,480		2,788,138			25,931,119			261,357			51,876,331			(2,086,454	)		103,688,971
Balance at December 31, 2016																						27,638,012		3,804,458			34,813,246			264,822			67,409,204			(1,370,611	)		132,559,131

Net earnings (As Restated)		-		-			-			-			13,351,441			-			13,351,441
Other comprehensive loss		-		-			-			(760,715	)		-			-			(760,715	)
Net earnings																						-		-			-			-			14,112,934			-			14,112,934
Other comprehensive income																						-		-			-			338,348			-			-			338,348
Stock based compensation		-		-			387,608			-			-			-			387,608			-		-			395,603			-			-			-			395,603
Exercise of stock options		47,922		483,304			(55,717	)		-			-			(441,832	)		33,677			16,366		206,804			(213,323	)		-			-			-			9,847
Sale of treasury stock		-		-			666,840			-			-			530,396			1,197,236			-		-			712,591			-			-			822,270			1,534,861
Purchase of treasury stock		-		-			-			-			-			(181,539	)		(181,539	)		-		-			-			-			-			(382,734	)		(382,734	)
Stock dividends		1,248,966		150,670			3,302,732			-			(4,702,368	)		-			-			1,385,270		198,992			2,416,925			-			(4,001,187	)		-			-
Conversion Class C to Class A		2,832		(2,832	)		-			-			-			-			-			31,506		(31,506	)		-			-			-			-			-
Balance at December 31, 2015, (As Restated)		26,218,200		3,419,280			30,232,582			(499,358	)		60,525,404			(2,179,429	)		117,716,679

Net earnings (As Restated)		-		-			-			-			12,188,627			-			12,188,627
Other comprehensive income		-		-			-			764,180			-			-			764,180
Stock based compensation		-		-			343,577			-			-			-			343,577
Exercise of stock options		85,268		209,950			(179,112	)		-			-			-			116,106
Sale of treasury stock		-		-			621,144			-			-			808,818			1,429,962
Stock dividends		1,315,838		193,934			3,795,055			-			(5,304,827	)		-			-
Conversion Class C to Class A		18,706		(18,706	)		-			-			-			-			-
Balance at December 31, 2016, (As Restated)	$	27,638,012	$	3,804,458		$	34,813,246		$	264,822		$	67,409,204		$	(1,370,611	)	$	132,559,131
Balance at December 31, 2017																					$	29,071,154	$	4,178,748		$	38,125,042		$	603,170		$	77,520,951		$	(931,075	)	$	148,567,990

·	~~Failure to deliver original documents specified by the investor,~~

·	~~The existence of misrepresentation or fraud in the origination of the loan,~~

·	~~The loan becomes delinquent due to nonpayment during the first several months after it is sold,~~

·	~~Early pay-off of a loan, as defined by the agreements,~~

·	~~Excessive time to settle a loan,~~

·	~~Investor declines purchase, and~~

·	~~Discontinued product and expired commitment.~~

·	~~Research reasons for rejection,~~

·	~~Provide additional documents,~~

·	~~Request investor exceptions,~~

·	~~Appeal rejection decision to purchase committee, and~~

·	~~Commit to secondary investors.~~

·	~~For loans that have an active market the Company uses the market price on the repurchased date.~~

·	~~For loans where there is no market but there is a similar product, the Company uses the market value for the similar product on the repurchased date.~~

·	For loans where no active market exists on the repurchased date, the Company determines that the unpaid principal balance best approximates the market value on the repurchased date, after considering thechanges in fair ~~value of the underlying real estate collateral and estimated future cash flows.~~

	Amortized Cost			Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
December 31, 2016:
Fixed maturity securities held to maturity carried at amortized cost:
U.S. Treasury securities and obligations of U.S. Government agencies	$	4,475,065		$	249,028	$	(66,111	)	$	4,657,982

Obligations of states and political subdivisions		6,017,225			153,514		(133,249	)		6,037,490

Corporate securities including public utilities		164,375,636			10,440,989		(3,727,013	)		171,089,612

Mortgage-backed securities		9,488,083			221,400		(280,871	)		9,428,612

Redeemable preferred stock		623,635			13,418		-			637,053

Total fixed maturity securities held to maturity	$	184,979,644		$	11,078,349	$	(4,207,244	)	$	191,850,749

Equity securities available for sale at estimated fair value:

Common stock:

Industrial, miscellaneous and all other	$	10,985,338		$	447,110	$	(859,092	)	$	10,573,356

Total securities available for sale carried at estimated fair value	$	10,985,338		$	447,110	$	(859,092	)	$	10,573,356

Mortgage loans on real estate and construction loans held for investment at amortized cost:
Residential	$	58,593,622
Residential construction		40,800,117
Commercial		51,536,622
Less: Allowance for loan losses		(1,748,783	)

Total mortgage loans on real estate and construction loans held for investment	$	149,181,578

Real estate held for investment - net of depreciation	$	145,165,921

Policy loans and other investments are shown at amortized cost except for other investments that are shown at estimated fair value:
Policy loans	$	6,694,148
Insurance assignments		33,548,079
Promissory notes		48,797
Other investments at estimated fair value		1,765,752
Less: Allowance for doubtful accounts		(1,119,630	)

Total policy loans and other investments	$	40,937,146

Short-term investments at amortized cost	$	27,560,040

	Amortized Cost			Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
December 31, 2015:
Fixed maturity securities held to maturity carried at amortized cost:
U.S. Treasury securities and obligations of U.S. Government agencies	$	3,560,579		$	292,869	$	(4,743	)	$	3,848,705

Obligations of states and political subdivisions		1,805,828			182,073		(1,040	)		1,986,861

Corporate securities including public utilities		134,488,108			9,836,355		(5,501,743	)		138,822,720

Mortgage-backed securities		5,091,887			190,867		(75,580	)		5,207,174

Redeemable preferred stock		612,023			29,675		-			641,698

Total fixed maturity securities held to maturity	$	145,558,425		$	10,531,839	$	(5,583,106	)	$	150,507,158

Equity securities available for sale at estimated fair value:

Common stock:

Industrial, miscellaneous and all other	$	9,891,500		$	213,684	$	(1,674,094	)	$	8,431,090

Total securities available for sale carried at estimated fair value	$	9,891,500		$	213,684	$	(1,674,094	)	$	8,431,090

Mortgage loans on real estate and construction loans held for investment at amortized cost:
Residential	$	46,020,490
Residential construction		34,851,557
Commercial		33,522,978
Less: Allowance for loan losses		(1,848,120	)

Total mortgage loans on real estate and construction loans held for investment	$	112,546,905

Real estate held for investment - net of depreciation	$	114,852,432

Policy loans and other investments are shown at amortized cost except for other investments that are shown at estimated fair value:
Policy loans	$	6,896,457
Insurance assignments		32,369,014
Promissory notes		48,797
Other investments at estimated fair value		1,174,769
Less: Allowance for doubtful accounts		(906,616	)

Total policy loans and other investments	$	39,582,421

Short-term investments at amortized cost	$	16,915,808

	Unrealized Losses for Less than Twelve Months		Fair Value		Unrealized Losses for More than Twelve Months		Fair Value		Total Unrealized Loss		Fair Value
At December 31, 2016

U.S. Treasury Securities and Obligationsof U.S. Government Agencies	$	66,111	$	1,342,088	$	-	$	-	$	66,111	$	1,342,088
Obligations of States and Political Subdivisions		133,249		3,686,856		-		-		133,249		3,686,856
Corporate Securities		1,728,312		41,796,016		1,998,701		12,969,135		3,727,013		54,765,151
Mortgage and other asset-backed securities		176,715		4,176,089		104,156		940,278		280,871		5,116,367
Total unrealized losses	$	2,104,387	$	51,001,049	$	2,102,857	$	13,909,413	$	4,207,244	$	64,910,462

At December 31, 2015

U.S. Treasury Securities and Obligations of U.S. Government Agencies	$	4,743	$	2,191,782	$	-	$	-	$	4,743	$	2,191,782
Obligations of States and Political Subdivisions		-		-		1,040		86,388		1,040		86,388
Corporate Securities		3,701,572		30,109,114		1,800,171		3,723,569		5,501,743		33,832,683
Mortgage and other asset-backed securities		75,580		1,775,505		-		-		75,580		1,775,505
Total unrealized losses	$	3,781,895	$	34,076,401	$	1,801,211	$	3,809,957	$	5,583,106	$	37,886,358

	Unrealized Losses for Less than Twelve Months		Fair Value		Unrealized Losses for More than Twelve Months		Fair Value		Total Unrealized Loss		Fair Value
At December 31, 2017
U.S. Treasury Securities and Obligationsof U.S. Government Agencies	$	532,010	$	51,606,699	$	47,413	$	643,380	$	579,423	$	52,250,079
Obligations of States and Political Subdivisions		296		214,882		70,717		2,225,021		71,013		2,439,903
Corporate Securities		167,786		11,551,865		839,718		13,193,258		1,007,504		24,745,123
Mortgage and other asset-backed securities		56,756		2,516,660		105,375		1,676,494		162,131		4,193,154
Redeemable preferred stock		191		11,421		-		-		191		11,421
Total unrealized losses	$	757,039	$	65,901,527	$	1,063,223	$	17,738,153	$	1,820,262	$	83,639,680

At December 31, 2016
U.S. Treasury Securities and Obligationsof U.S. Government Agencies	$	66,111	$	1,342,088	$	-	$	-	$	66,111	$	1,342,088
Obligations of States andPolitical Subdivisions		133,249		3,686,856		-		-		133,249		3,686,856
Corporate Securities		1,728,312		41,796,016		1,998,701		12,969,135		3,727,013		54,765,151
Mortgage and other asset-backed securities		176,715		4,176,089		104,156		940,278		280,871		5,116,367
Total unrealized losses	$	2,104,387	$	51,001,049	$	2,102,857	$	13,909,413	$	4,207,244	$	64,910,462

	Amortized		Estimated Fair
	Cost		Value
Held to Maturity:
Due in 1 year	$	20,125,883	$	20,299,016
Due in 2-5 years		69,849,085		70,873,975
Due in 5-10 years		49,842,819		52,444,399
Due in more than 10 years		78,453,185		87,656,290
Mortgage-backed securities		9,503,016		9,551,537
Redeemable preferred stock		623,635		673,192
Total held to maturity	$	228,397,623	$	241,498,409

	Unrealized Losses for Less than Twelve Months		No. of Investment Positions		Unrealized Losses for More than Twelve Months		No. of Investment Positions		Total Unrealized Losses
At December 31, 2016
Industrial, miscellaneous and all other	$	215,563		124	$	643,529		104	$	859,092
Total unrealized losses	$	215,563		124	$	643,529		104	$	859,092
Fair Value	$	2,063,144			$	1,685,874			$	3,749,018

At December 31, 2015
Industrial, miscellaneous and all other	$	997,862		222	$	676,232		74	$	1,674,094
Total unrealized losses	$	997,862		222	$	676,232		74	$	1,674,094
Fair Value	$	4,177,709			$	760,860			$	4,938,569

	Net Ending Balance								Total Square Footage
	December 31								December 31
	2016				2015				2016		2015
Arizona	$	450,538	(1	)	$	463,774	(1	)		16,270		16,270
Arkansas		100,369				-				3,200		-
Kansas		12,450,297				11,537,335				222,679		222,679
Louisiana		518,700				-				7,063		-
Mississippi		3,818,985				-				33,821		-
New Mexico		7,000	(1	)		7,000	(1	)		-		-
Texas		3,734,974				3,768,542				23,470		23,470
Utah		47,893,073	(2	)		17,403,746				433,244		253,244

	$	68,973,936			$	33,180,397				739,747		515,663

(1) Includes Vacant Land
(2) Includes 53rd Center to be completed in July 2017.

Location	Business Segment	Approximate Square Footage	Square Footage Occupied by the Company
5300 South 360 West, Salt Lake City, UT (1)	Corporate Offices, Life Insurance and Cemetery/Mortuary Operations	36,000	100%
5201 Green Street, Salt Lake City, UT	Mortgage Operations	36,899	34%
1044 River Oaks Dr., Flowood, MS	Life Insurance Operations	5,522	27%

(1) This asset is included in property and equipment on the Consolidated Balance Sheet