SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 2002 Commission File Number: 0-9341
- -------------------------------- ------------------------------
SECURITY NATIONAL FINANCIAL CORPORATION
Exact Name of Registrant.
UTAH 87-0345941
------------- -----------------
(State or other jurisdiction IRS Identification Number
of incorporation or organization)
5300 South 360 West, Salt Lake City, Utah 84123
- ----------------------------------------- ------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including Area Code (801) 264-1060
--------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES XX NO
----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class A Common Stock, $2.00 par value 4,068,904
- ------------------------------------- ----------------------------------
Title of Class Number of Shares Outstanding as of
March 31, 2002
Class C Common Stock, $.20 par value 6,044,807
- ------------------------------------ ----------------------------------
Title of Class Number of Shares Outstanding as of
March 31, 2002
SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES
FORM 10Q
QUARTER ENDED MARCH 31, 2002
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1 Financial Statements Page No.
- ------ --------
Consolidated Statement of Earnings -
Three months ended March 31, 2002 and
2001 (unaudited).........................................3
Consolidated Balance Sheet - March 31, 2002
(unaudited) and December 31, 2001 .......................4-5
Consolidated Statement of Cash Flows -
Three months ended March 31, 2002 and 2001
(unaudited)..............................................6
Notes to Consolidated Financial Statements...............7-9
Item 2 Management's Discussion and Analysis..................10-13
- ------
Item 3 Quantitative and Qualitative Disclosure of
- ------ Market Risk...........................................13
PART II - OTHER INFORMATION
Other Information.....................................13-14
Signature Page........................................15
2
SECURITY NATIONAL FINANCIAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS
(Unaudited)
Three Months Ended March 31,
Revenues: 2002 2001
- -------- ---- ----
Insurance premiums and
other considerations $3,322,756 $3,481,137
Net investment income 2,923,765 3,149,433
Net mortuary and cemetery sales 2,728,263 2,460,065
Realized gains on investments
and other assets 719,417 4,097
Mortgage fee income 9,865,991 8,620,708
Other 41,347 31,324
------------ ------------
Total revenues 19,601,539 17,746,764
Benefits and expenses:
- ---------------------
Death benefits 1,668,670 1,504,909
Surrenders and other policy benefits 629,911 296,599
Increase in future policy benefits 747,186 1,294,544
Amortization of deferred policy
acquisition costs and cost of
insurance acquired 834,527 1,077,737
General and administrative expenses:
Commissions 7,031,093 6,451,535
Salaries 2,608,950 2,036,663
Other 3,311,341 3,032,981
Interest expense 322,353 707,553
Cost of goods and services sold
of the mortuaries and cemeteries 600,325 633,597
------------ ------------
Total benefits and expenses 17,754,356 17,036,118
Earnings before income taxes 1,847,183 710,646
Income tax expense (456,372) (190,156)
Minority interest (income)
loss of subsidiary (10,950) 8,503
------------ ------------
Net earnings $1,379,861 $528,993
============ ============
Net earnings per common share $0.30 $0.12
============ ============
Weighted average outstanding
common shares 4,673,385 4,450,839
============ ============
Net earnings per common
share-assuming dilution $0.30 $0.12
============ ============
Weighted average outstanding
common shares assuming-dilution 4,674,697 4,451,094
============ ============
See accompanying notes to consolidated financial statements.
3
SECURITY NATIONAL FINANCIAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
March 31, 2002 December 31,
(Unaudited) 2001
-------------- -----------
Assets:
Insurance-related investments:
Fixed maturity securities held
to maturity, at amortized cost $25,529,958 $27,799,909
Fixed maturity securities available
for sale, at market 20,774,108 21,470,729
Equity securities available for sale,
at market 2,699,505 2,641,549
Mortgage loans on real estate 14,239,950 15,479,305
Real estate, net of accumulated
depreciation 9,145,061 9,051,691
Policy, student and other loans 11,130,398 11,277,975
Short-term investments 3,294,374 1,453,644
------------- -------------
Total insurance-related
investments 86,813,354 89,174,802
Restricted assets
of cemeteries and mortuaries 5,425,430 5,339,436
Cash 14,847,055 8,757,246
Receivables:
Trade contracts 5,143,000 6,945,274
Mortgage loans sold to investors 49,462,718 50,695,073
Receivable from agents 2,158,344 2,061,541
Receivable from officers 97,000 102,200
Other 1,093,899 1,183,927
------------- -------------
Total receivables 57,954,961 60,988,015
Allowance for doubtful accounts (2,378,292) (2,287,241)
------------- -------------
Net receivables 55,576,669 58,700,774
Policyholder accounts on deposit
with reinsurer 7,120,360 7,148,068
Land and improvements held for sale 8,147,268 8,346,448
Accrued investment income 1,202,536 1,059,789
Deferred policy acquisition costs 15,034,437 14,453,023
Property, plant and equipment, net 10,872,668 10,802,387
Cost of insurance acquired 7,431,019 7,615,348
Excess of cost over net assets
of acquired subsidiaries 1,056,174 1,065,045
Other 719,726 597,209
------------- -------------
Total assets $214,246,696 $213,059,575
============= =============
See accompanying notes to consolidated financial statements.
4
SECURITY NATIONAL FINANCIAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (Continued)
March 31, 2002 December 31,
(Unaudited) 2001
-------------- -----------
Liabilities:
- -------------
Future life, annuity, and other
policy benefits $141,002,970 $140,504,866
Unearned premium reserve 1,963,317 1,785,977
Bank loans payable 8,622,705 8,461,900
Notes and contracts payable 3,560,445 3,635,776
Estimated future costs of
pre-need sales 9,367,455 9,338,353
Payable to endowment care fund 11,225 --
Accounts payable 842,433 1,319,319
Funds held under reinsurance
treaties 1,359,640 1,379,640
Other liabilities and
accrued expenses 4,784,748 5,552,799
Income taxes 7,245,801 6,874,597
------------- -------------
Total liabilities 178,760,739 178,853,227
Minority interest 4,208,827 4,237,030
Stockholders' Equity:
- --------------------
Common stock:
Class A: $2 par value,
authorized 10,000,000
shares, issued 5,363,620
shares in 2002 and 5,363,591
shares in 2001 10,727,240 10,727,182
Class C: $0.20 par value,
authorized 7,500,000 shares,
issued 6,113,139 shares in
2002 and 6,113,430 shares
in 2001 1,222,628 1,222,686
------------- -------------
Total common stock 11,949,868 11,949,868
Additional paid-in capital 10,168,524 10,168,523
Accumulated other comprehensive
income, net of deferred taxes 1,151,880 1,223,930
Retained earnings 11,369,091 9,989,230
Treasury stock at cost (1,294,716
Class A shares and 68,332 Class C
shares in 2002 and 2001 held
by affiliated companies) (3,362,233) (3,362,233)
------------- -------------
Total stockholders' equity 31,277,130 29,969,318
------------- -------------
Total liabilities and
stockholders' equity $214,246,696 $213,059,575
============= =============
See accompanying notes to consolidated financial statements.
5
SECURITY NATIONAL FINANCIAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended March 31,
2002 2001
---- ----
Cash flows from operating activities:
Net cash provided by (used in)
operating activities $4,914,284 $(11,925,632)
Cash flows from investing activities:
Securities held to maturity:
Purchase - fixed maturity securities -- (402,995)
Calls and maturities - fixed
maturity securities 2,277,722 4,509,696
Securities available for sale:
Calls and maturities - fixed
maturity securities 300,000 6,250
Purchases of short-term investments (1,840,730) (6,948,226)
Sales of short-term investments -- 7,768,000
Purchases of restricted assets (85,994) (101,672)
Mortgage, policy, and other loans made (256,554) (1,820,134)
Payments received for mortgage,
policy, and other loans 1,836,530 1,215,028
Purchases of property, plant,
and equipment (346,650) (106,839)
Purchases of real estate (384,876) (18,439)
------------ ------------
Net cash provided by
(used in) investing activities 1,499,448 4,100,669
------------ ------------
Cash flows from financing activities:
Annuity receipts 2,504,928 1,739,650
Annuity withdrawals (2,914,325) (3,178,673)
Repayment of bank loans and
notes and contracts payable (101,120) (583,784)
Proceeds from borrowings on bank
loans and notes and contracts payable 186,594 --
Net change in line of credit
for financing of mortgage loans -- 2,000,000
------------ ------------
Net cash (used in) provided by
financing activities (323,923) (22,807)
------------ ------------
Net change in cash 6,089,809 (7,847,770)
Cash at beginning of period 8,757,246 11,275,030
------------ ------------
Cash at end of period $14,847,055 $3,427,260
============ ============
See accompanying notes to consolidated financial statements.
6
SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
March 31, 2002
(Unaudited)
1. Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United States
of America for interim financial information and with the instructions to Form
10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by accounting principles generally
accepted in the United States of America for complete financial statements. In
the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the three months ended March 31, 2002, are not necessarily
indicative of the results that may be expected for the year ending December 31,
2002. For further information, refer to the consolidated financial statements
and footnotes thereto for the year ended December 31, 2001, included in the
Company's Annual Report on Form 10-K (file number 0-9341).
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
The estimates susceptible to significant change are those used in determining
the liability for future policy benefits and claims, those used in determining
valuation allowances for mortgage loans on real estate, and those used in
determining the estimated future costs for pre-need sales. Although some
variability is inherent in these estimates, management believes the amounts
provided are adequate.
2. Comprehensive Income
For the three months ended March 31, 2002 and 2001, total comprehensive income
amounted to $1,307,811 and $663,018, respectively.
3. Capital Stock
The basic and diluted earnings per share amounts were calculated as follows:
Three Months Ended March 31,
2002 2001
---- ----
Numerator:
Net income $1,379,861 $528,993
========== ==========
Denominator:
Denominator for basic
earnings per share--
weighted-average shares 4,673,385 4,450,839
---------- ----------
Effect of dilutive securities:
Employee stock options 1,312 255
---------- ----------
Dilutive potential
common shares 1,312 255
---------- ----------
Denominator for diluted earnings
per share-adjusted weighted-
average shares and assumed
conversions 4,674,697 4,451,094
========== ==========
Basic earnings per share $0.30 $0.12
========== ==========
Diluted earnings per share $0.30 $0.12
========== ==========
There are no dilutive effects on net income for purpose of this calculation.
7
SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
March 31, 2002
(Unaudited)
4. Business Segment
Life Cemetery/ Reconciling
Insurance Mortuary Mortgage Items Consolidated
--------- -------- -------- ----- ------------
For the Three Months Ended
March 31, 2002
Revenues from
external customers $4,873,742 $3,688,908 $11,038,889 $ -- $19,601,539
Intersegment revenues 1,206,072 -- -- (1,206,072) --
Segment profit 335,851 970,842 540,490 -- 1,847,183
Identifiable assets 201,181,785 39,801,986 5,774,218 (32,523,293) 214,246,696
For the Three Months Ended
March 31, 2001
Revenues from
external customers $5,343,762 $2,707,413 $9,695,589 $ -- $17,746,764
Intersegment revenues 814,001 -- -- (814,001) --
Segment profit 318,165 177,940 214,541 -- 710,646
Identifiable assets 201,889,255 35,847,523 4,845,984 (32,204,583) 210,378,179
8
Item 2. Management's Discussion and Analysis
Overview
The Company's operations over the last several years generally reflect three
trends or events which the Company expects to continue: (i) increased attention
to "niche" insurance products, such as the Company's funeral plan policies and
interest sensitive products; (ii) emphasis on cemetery and mortuary business;
and (iii) capitalizing on lower interest rates by originating and refinancing
mortgage loans.
During the three months ended March 31, 2002, Security National Mortgage Company
("SNMC") experienced increases in revenue and expenses due to the increase in
loan volume of its operations. SNMC is a mortgage lender incorporated under the
laws of the State of Utah. SNMC is approved and regulated by the Federal Housing
Administration (FHA), a department of the U.S. Department of Housing and Urban
Development (HUD), to originate mortgage loans that qualify for government
insurance in the event of default by the borrower. SNMC obtains loans primarily
from independent brokers and correspondents. SNMC funds the loans from internal
cash flows and lines of credit from financial institutions. SNMC receives fees
from origination points paid by the borrowers and service and release premiums
received from third party investors who purchase the loans from SNMC. SNMC sells
all of its loans to third party investors and does not retain servicing to these
loans. SNMC pays the brokers and correspondents a commission for loans that are
brokered through SNMC. SNMC originated and sold 2,194 ($311,000,000) and 1,856
($270,000,000) loans respectively for the three months ended March 31, 2002 and
2001.
Results of Operations
Three Months Ended March 31, 2002 Compared to Three Months Ended March 31, 2001
Total revenues increased by $1,855,000, or 10.5%, to $19,602,000 for the three
months ended March 31, 2002, from $17,747,000 for the three months ended March
31, 2001. Contributing to this increase in total revenues was a $1,245,000
increase in mortgage fee income, a $268,000 increase in net mortuary and
cemetery sales and a $715,000 increase in realized gains on investments and
other assets.
Insurance premiums and other considerations decreased by $158,000, or 4.5%, to
$3,323,000 for the three months ended March 31, 2002, from $3,481,000 for the
comparable period in 2001. This decrease was primarily the result of a decrease
in the amortization of unearned premium reserve to the Company's current
actuarial assumptions.
Net investment income decreased by $225,000, or 7.2%, to $2,924,000 for the
three months ended March 31, 2002, from $3,149,000 for the comparable period in
2001. This decrease was primarily attributable to lower yields on investments.
Net mortuary and cemetery sales increased by $268,000, or 10.9%, to $2,728,000
for the three months ended March 31, 2002, from $2,460,000 for the comparable
period in 2001. This increase was primarily due to additional at-need cemetery
and mortuary sales.
Realized gains on investments and other assets increased by $715,000, to
$719,000 for the three months ended March 31, 2002, from $4,000 for the
comparable period in 2001. This increase was the result of the sale of
approximately 3.5 acres at Lakehills Cemetery in Sandy, Utah, to the Utah
Transit Authority.
9
Mortgage fee income increased by $1,245,000, or 14.4%, to $9,866,000 for the
three months ended March 31, 2002, from $8,621,000 for the comparable period in
2001. This increase was primarily attributable to a greater number of loan
originations during the three months of 2002 due to the opening of new branch
offices in Mesa, Arizona and Houston, Texas and an increase in business at
existing branch offices.
Total benefits and expenses were $17,754,000, or 90.6%, of total revenues for
the three months ended March 31, 2002, as compared to $17,036,000, or 96.0%, of
total revenues for the comparable period in 2001.
Death benefits, surrenders and other policy benefits and increase in future
policy benefits decreased by an aggregate of $50,000, or 1.6%, to $3,046,000 for
the three months ended March 31, 2002, from $3,096,000 for the comparable period
in 2001. This decrease was primarily the result of a decrease in reserves for
policyholders.
Amortization of deferred policy acquisition costs and cost of insurance acquired
decreased by $243,000, or 22.6%, to $835,000 for the three months ended March
31, 2002, from $1,078,000 for the comparable period in 2001. This decrease was
primarily due to the adjustment of the amortization rate to the Company's
current actuarial assumptions.
General and administrative expenses increased by $1,430,000, or 12.4%, to
$12,951,000 for the three months ended March 31, 2002, from $11,521,000 for the
comparable period in 2001. This increase primarily resulted from an increase in
commissions, salaries and other expenses due to additional mortgage loan
originations having been made by the Company's mortgage subsidiary during the
three months of 2002.
Interest expense decreased by $386,000, or 54.4%, to $322,000 for the three
months ended March 31, 2002, from $708,000 for the comparable period in 2001.
This decrease was primarily due to lower interest rates for borrowings under the
Company's warehouse lines of credit required for mortgage loan originations by
the Company's mortgage subsidiary.
Cost of goods and services sold of the mortuaries and cemeteries decreased by
$34,000, or 5.3%, to $600,000 for the three months ended March 31, 2002, from
$634,000 for the comparable period in 2001. This decrease was primarily due to
greater sales of cemetery burial property sales in 2002, which have a lower cost
of goods sold than other funeral products.
Liquidity and Capital Resources
The Company's life insurance subsidiaries and cemetery and mortuary subsidiaries
realize cash flow from premiums, contract payments and sales on personal
services rendered for cemetery and mortuary business, from interest and
dividends on invested assets, and from the proceeds from the maturity of
held-to-maturity investments, or sale of other investments. The mortgage
subsidiary realizes cash flow from fees generated by originating and refinancing
mortgage loans and interest earned on mortgages sold to investors. The Company
considers these sources of cash flow to be adequate to fund future policyholder
and cemetery and mortuary liabilities, which generally are long-term, and
adequate to pay current policyholder claims, annuity payments, expenses on the
issuance of new policies, the maintenance of existing policies, debt service,
and operating expenses.
The Company attempts to match the duration of invested assets with its
policyholder and cemetery and mortuary liabilities. The Company may sell
investments other than those held-to-maturity in the portfolio to help in this
timing; however, to date, that has not been necessary. The Company purchases
short-term investments on a temporary basis to meet the expectations of
short-term requirements of the Company's products. The Company's investment
philosophy is intended to provide a rate of return which will persist during the
expected duration of policyholder and cemetery and mortuary liabilities
regardless of future interest rate movements.
The Company's investment policy is to invest predominantly in fixed maturity
securities, mortgage loans, and warehouse mortgage loans on a short-term basis
before selling the loans to investors in accordance with the requirements and
laws governing the life insurance subsidiaries. Bonds owned by the life
insurance subsidiaries amounted to $46,304,000 as of March 31, 2002, compared to
$49,271,000 as of
10
December 31, 2001. This represents 53% and 55% of the total insurance-related
investments as of March 31, 2002, and December 31, 2001, respectively.
Generally, all bonds owned by the life insurance subsidiaries are rated by the
National Association of Insurance Commissioners. Under this rating system, there
are three categories used for rating bonds. At March 31, 2002 and December 31,
2001, 5% ($2,438,000) of the Company's total investment in bonds were invested
in bonds in rating categories three through six, which are considered
non-investment grade.
The Company has classified certain of its fixed income securities, including
high-yield securities, in its portfolio as available for sale, with the
remainder classified as held to maturity. However, in accordance with Company
policy, any such securities purchased in the future will be classified as held
to maturity. Business conditions, however, may develop in the future which may
indicate a need for a higher level of liquidity in the investment portfolio. In
that event the Company believes it could sell short-term investment grade
securities before liquidating higher-yielding longer term securities.
The Company is subject to risk based capital guidelines established by statutory
regulators requiring minimum capital levels based on the perceived risk of
assets, liabilities, disintermediation, and business risk. At March 31, 2002 and
December 31, 2001, the life insurance subsidiary exceeded the regulatory
criteria.
The Company's total capitalization of stockholders' equity and bank debt and
notes payable was $43,449,000 as of March 31, 2002, as compared to $42,067,000
as of December 31, 2001. Stockholders' equity as a percent of capitalization
increased to 72% as of March 31, 2002, from 71% as of December 31, 2001.
Lapse rates measure the amount of insurance terminated during a particular
period. The Company's lapse rate for life insurance in 2001 was 13.2% as
compared to a rate of 15.0% for 2000. The 2002 lapse rate is approximately the
same as 2001.
At March 31, 2002, $23,209,000 of the Company's consolidated stockholders'
equity represents the statutory stockholders' equity of the Company's life
insurance subsidiaries. The life insurance subsidiaries cannot pay a dividend to
its parent company without the approval of insurance regulatory authorities.
Item 3. Quantitative and Qualitative Disclosure of Market Risk
There have been no significant changes since the annual report Form 10-K filed
for the year ended December 31, 2001.
Part II Other Information:
Item 1. Legal Proceedings
An action was brought against the Company in July 1999 by Dorothy
Ruth Campbell in the Circuit Court of Escambia County, Alabama.
The action arises out of a denial of coverage under a $10,000
insurance policy. The claims are for breach of contract, bad
faith and fraudulent misrepresentation. In the action, Campbell
seeks compensatory and punitive damages plus interest. The
Company has filed its response to the complaint and certain
discovery has taken place. The Company intends to vigorously
defend the matter.
An action was brought against the Company in May 2001, by Glenna
Brown Thomas individually and as personal representative of the
Estate of Lynn W. Brown in the Third Judicial Court, Salt Lake
County, Utah. The action asserts that Memorial Estates delivered
to Lynn W. Brown three stock certificates representing 2,000
shares in 1970 and 1971. Mr. Brown died in 1972. It is asserted
that at the time the 2,000 shares were issued and outstanding,
such represented a 2% ownership of Memorial Estates. It is
alleged Mr. Brown was entitled to preemptive rights and that
after the issuance of the stock to Mr. Brown there were further
issuances of stock without providing written notice to Mr. Brown
or his estate with respect to an opportunity to purchase more
stock. It is asserted among the other things that the plaintiff
"has the right to a transfer of Brown's shares to
11
Thomas on defendants' (which includes Security National Financial
Corporation as well as Memorial Estates, Inc.) books and to
restoration of Brown's proportion of share ownership in Memorial
at the time of his death by issuance and delivery to Thomas of
sufficient shares of defendant's publicly traded and unrestricted
stock in exchange for the 2,000 shares of Memorial stock and
payment of all dividends from the date of Thomas's demand, as
required by Article XV of the Articles of Incorporation." Based
on present information, the Company intends to vigorously defend
the matter, including an assertion that the statute of
limitations bars the claims.
An action was brought against the Company by National Group
Underwriters, Inc. ("NGU") in state court in the State of Texas.
The case was removed by the Company to the United States District
Court for the Northern District of Texas, Fort Worth Division. An
Amended Complaint was filed on or about July 18, 2001. The
Amended Complaint asserts that NGU had a contract with the
Company wherein NGU would submit applications for certain
policies of insurance to be issued by the Company. It is alleged
that disputes have arisen between NGU and the Company with regard
to the calculation and payment of certain advanced commissions as
well as certain production bonuses.
NGU alleges that it "has been damaged far in excess of the
$75,000 minimum jurisdictional limits of this Court." NGU also
seeks attorney's fees and costs as well as prejudgment and
postjudgment interest. A second amended complaint and a third
amended complaint, which included a fraud claim, were filed. A
motion was filed by the Company to dismiss the third amended
complaint, including the fraud claim. The court denied the
motion. The Company has counterclaimed for what it claims to be a
debit balance owing to it pursuant to the relationship between
the parties with the counterclaim seeking an amount in excess of
$411,000 (said amount potentially subject to reduction as
premiums are received). The Company is also seeking to recover
attorney's fees and costs, as well punitive damages on two of its
causes of action. NGU has filed a motion to dismiss certain
claims in the counterclaim, which the court granted in part and
denied in part. Discovery is currently taking place. The Company
intends to vigorously defend the matter as well as prosecute its
counterclaim.
The Company is not a party to any other legal proceedings outside
the ordinary course of the Company's business or to any other
legal proceedings which, if adversely determined, would have a
material adverse effect on the Company or its business.
Item 2. Changes in Securities
NONE
Item 3. Defaults Upon Senior Securities
NONE
Item 4. Submission of Matters to a Vote of Security Holders
NONE
Item 5. Other Information
NONE
Item 6. Exhibits and Reports on Form 8-K
(a)(3) Exhibits:
3.A. Articles of Restatement of Articles of Incorporation (8)
B. Bylaws (1)
4.A. Specimen Class A Stock Certificate (1)
B. Specimen Class C Stock Certificate (1)
C. Specimen Preferred Stock Certificate and Certificate of
Designation of Preferred Stock (1)
12
10. A. Restated and Amended Employee Stock Ownership Plan and Trust
Agreement (1)
B. Deferred Compensation Agreement with George R. Quist (2)
C. 1993 Stock Option Plan (3)
D. 2000 Director Stock Option Plan (12)
E. Promissory Note with Key Bank of Utah (4)
F. Loan and Security Agreement with Key Bank of Utah (4)
G. General Pledge Agreement with Key Bank of Utah (4)
H. Note Secured by Purchase Price Deed of Trust and Assignment of
Rents with the Carter Family Trust and the Leonard M. Smith
Family Trust (5)
I. Deed of Trust and Assignment of Rents with the Carter Family Trust
and the Leonard M. Smith Family Trust (5)
J. Promissory Note with Page and Patricia Greer (6)
K. Pledge Agreement with Page and Patricia Greer (6)
L. Promissory Note with Civil Service Employees Insurance Company (7)
M. Deferred Compensation Agreement with William C. Sargent (8)
N. Employment Agreement with Scott M. Quist. (8)
O. Acquisition Agreement with Consolidare Enterprises, Inc., and
certain shareholders of Consolidare. (9)
P. Agreement and Plan of Merger between Consolidare Enterprises,
Inc., and SSLIC Holding Company. (10)
Q. Administrative Services Agreement with Southern Security Life
Insurance Company. (11)
R. Promissory Note with George R. Quist (13)
S. Deferred Compensation Plan (14)
(1) Incorporated by reference from Registration Statement on Form
S-1, as filed on June 29, 1987.
(2) Incorporated by reference from Annual Report on Form 10-K, as
filed on March 31, 1989.
(3) Incorporated by reference from Annual Report on Form 10-K, as
filed on March 31, 1994.
(4) Incorporated by reference from Report on Form 8-K, as filed
on February 24, 1995.
(5) Incorporated by reference from Annual Report on Form 10K, as
filed on March 31, 1995.
(6) Incorporated by reference from Report on Form 8-K, as filed
on May 1, 1995.
(7) Incorporated by reference from Report on Form 8-K, as filed
on January 16, 1996.
(8) Incorporated by reference from Annual Report on Form 10-K, as
filed on March 31, 1998.
(9) Incorporated by reference from Report on Form 8-K, as filed
on May 11, 1998.
(10) Incorporated by reference from Report on Form 8-K, as filed
on January 4, 1999.
(11) Incorporated by reference from Report on Form 8-K, as filed
on March 4, 1999.
(12) Incorporated by reference from Schedule 14A Definitive Proxy
Statement, filed August 29, 2000, relating to the Company's
Annual Meeting of Shareholders.
(13) Incorporated by reference from Report on Form 10-K, as filed
on April 16, 2001.
(14) Incorporated by reference from Report on Form 10-K, as filed
on April 3, 2002.
21. Subsidiaries of the Registrant
(b) Reports on Form 8-K:
None
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
REGISTRANT
SECURITY NATIONAL FINANCIAL CORPORATION
Registrant
DATED: May 15, 2002 By: George R. Quist,
----------------
Chairman of the Board,
President and Chief Executive Officer
(Principal Executive Officer)
DATED: May 15, 2002 By: Stephen M. Sill
---------------
Vice President, Treasurer and Chief
Financial Officer (Principal
Financial and Accounting Officer)
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