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Document and Entity Information	3 Months Ended	6 Months Ended
Document and Entity Information	Jun. 30, 2012	Jun. 30, 2012
Document and Entity Information
Entity Registrant Name	SECURITY NATIONAL FINANCIAL CORP	SECURITY NATIONAL FINANCIAL CORP
Document Type	10-Q	10-Q
Document Period End Date	Jun. 30, 2012	Jun. 30, 2012
Amendment Flag	false	false
Entity Central Index Key	0000318673	0000318673
Current Fiscal Year End Date	--12-31	--12-31
Entity Filer Category	Smaller Reporting Company	Smaller Reporting Company
Entity Current Reporting Status	Yes	Yes
Entity Voluntary Filers	No	No
Entity Well-known Seasoned Issuer	No	No
Document Fiscal Year Focus	2012	2012
Document Fiscal Period Focus	Q2	Q2

Balance Sheet - USD ($)	Jun. 30, 2012	Dec. 31, 2011
Investments:
Fixed maturity securities, held to maturity, at amortized cost	$ 131,592,564	$ 127,579,087
Equity securities, available for sale, at estimated fair value	5,882,433	6,299,392
Mortgage loans on real estate and construction loans, held for investment net of allowances for losses of $4,699,410 and $4,881,173 for 2012 and 2011	97,975,694	115,155,967
Real estate held for investment, net of accumulated depreciation of $4,352,818 and $4,189,641 for 2012 and 2011	4,272,796	3,786,780
Other real estate owned held for investment, net of accumulated depreciation of $2,420,635 and $1,810,238 for 2012 and 2011	56,127,842	46,398,095
Other real estate owned held for sale	5,998,740	5,793,900
Policy and other loans, net of allowances for doubtful accounts of $461,775 and $427,136 for 2012 and 2011	17,818,019	18,463,277
Short-term investments	5,562,045	6,932,023
Accrued investment income	2,282,826	2,323,080
Total investments	327,512,959	332,731,601
Cash and cash equivalents	45,476,876	17,083,604
Mortgage loans sold to investors	72,674,336	77,339,445
Receivables, net	12,431,419	9,934,075
Restricted assets of cemeteries and mortuaries	3,697,483	3,392,497
Cemetery perpetual care trust investments	1,965,244	1,810,185
Receivable from reinsurers	14,351,927	7,484,466
Cemetery land and improvements	11,096,723	11,105,809
Deferred policy and pre-need contract acquisition costs	37,025,433	36,237,069
Property and equipment, net	9,830,193	9,300,185
Value of business acquired	10,524,072	11,020,834
Goodwill	677,039	677,039
Other assets	6,346,834	3,022,113
Total Assets	553,610,538	521,138,922
Liabilities
Future life, annuity, and other benefits	396,253,821	381,595,568
Unearned premium reserve	4,942,074	5,030,443
Bank and other loans payable	27,836,728	25,019,119
Deferred pre-need cemetery and mortuary contract revenues	13,280,079	13,140,483
Cemetery perpetual care obligation	3,065,606	2,983,077
Accounts payable	2,717,565	2,672,479
Other liabilities and accrued expenses	19,086,401	14,456,887
Income taxes	17,749,085	15,010,279
Total liabilities	484,931,359	459,908,335
Stockholders' Equity
Additional paid-in capital	19,483,976	19,487,565
Accumulated other comprehensive income, net of taxes	2,594,453	654,443
Retained earnings	27,801,838	22,546,623
Treasury stock at cost - 1,094,204 Class A shares in 2012 and 1,198,167 Class A shares in 2011	(2,505,879)	(2,762,835)
Total stockholders' equity	68,679,179	61,230,587
Total Liabilities and Stockholders' Equity	553,610,538	521,138,922
Class A Common Stock
Stockholders' Equity
Common stock	19,277,596	19,277,596
Class C Common Stock
Stockholders' Equity
Common stock	$ 2,027,195	$ 2,027,195

Income Statement - USD ($)	3 Months Ended		6 Months Ended
Income Statement - USD ($)	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Revenues:
Insurance premiums and other considerations	$ 12,281,896	$ 11,893,298	$ 24,869,684	$ 24,585,601
Net investment income	6,137,898	4,717,358	12,191,945	8,987,806
Net mortuary and cemetery sales	2,626,690	2,762,610	5,501,639	5,704,603
Realized gains on investments and other assets	186,926	1,257,566	357,986	1,602,656
Other than temporary impairments on investments	(45,000)	(30,000)	(90,000)	(65,129)
Mortgage fee income	35,087,056	15,645,290	60,577,640	29,097,881
Other income	252,744	220,296	442,539	725,180
Total revenues	56,528,210	36,466,418	103,851,433	70,638,598
Benefits and expenses:
Death benefits	4,923,798	5,135,908	10,110,097	11,284,571
Surrenders and other policy benefits	277,925	307,089	1,112,990	1,015,123
Increase in future policy benefits	5,294,936	5,407,593	10,936,560	9,538,690
Amortization of deferred policy and pre-need acquisition costs and value of business acquired	1,949,308	1,955,321	3,873,735	3,955,538
Selling, general and administrative expenses:
Commissions	20,394,230	9,288,848	35,280,020	17,149,481
Salaries	6,807,364	5,717,905	13,320,207	11,902,692
Provision for loan losses and loss reserve	1,097,873	415,541	1,500,347	1,107,335
Costs related to funding mortgage loans	1,800,348	1,001,329	3,160,652	1,845,834
Other expenses	7,706,098	6,222,289	14,704,988	12,300,160
Interest expense	847,141	378,100	1,615,885	693,642
Cost of goods and services sold-mortuaries and cemeteries	392,812	495,317	870,983	1,026,936
Total benefits and expenses	51,491,833	36,325,240	96,486,464	71,820,002
Earnings (loss) before income taxes	5,036,377	141,178	7,364,969	(1,181,404)
Income tax (provision) benefit	(1,443,345)	63,689	(2,109,754)	867,798
Net earnings (loss)	$ 3,593,032	$ 204,867	$ 5,255,215	$ (313,606)
Net earnings (loss) per Class A Equivalent common share (1)	$ 0.38	$ 0.02	$ 0.55	$ (0.03)
Net earnings (loss) per Class A Equivalent common share-assuming dilution (1)	$ 0.36	$ 0.02	$ 0.54	$ (0.03)
Weighted-average Class A equivalent common share outstanding (1)	9,540,238	9,350,042	9,518,058	9,311,131
Weighted-average Class A equivalent common shares outstanding-assuming dilution (1)	9,901,764	9,392,736	9,684,868	9,311,131

Comprehensive Income Statement - USD ($)	3 Months Ended		6 Months Ended
Comprehensive Income Statement - USD ($)	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Net earnings (loss)	$ 3,593,032	$ 204,867	$ 5,255,215	$ (313,606)
Other comprehensive income:
Net unrealized gains on derivative instruments	1,273,757	403,906	1,923,850	451,090
Net unrealized gains (losses) on available for sale securities	(313,677)	(344,686)	16,160	(358,655)
Other comprehensive income:	960,080	59,220	1,940,010	92,435
Comprehensive income (loss)	$ 4,553,112	$ 264,087	$ 7,195,225	$ (221,171)

- Definition

The change in equity [net assets] of a business enterprise during a period from transactions and other events and circumstances from non-owner sources which are attributable to the reporting entity. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners, but excludes any and all transactions which are directly or indirectly attributable to that ownership interest in subsidiary equity which is not attributable to the parent.

+ References + Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

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+ Details

- Definition

Net of tax amount of other comprehensive income (loss) attributable to the parent entity.

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- Definition

Net of tax amount, before reclassification adjustments, of the change in accumulated gain (loss) from derivative instruments designated and qualifying as the effective portion of cash flow hedges. Also includes an entity's share of an equity investee's increase (decrease) in deferred hedging gain (loss).

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+ Details

Statements of Stockholders' Equity - USD ($)	Class A Common Stock	Class C Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings	Treasury Stock	Total
Balance at Dec. 31, 2010	$ 18,357,890	$ 1,932,031	$ 19,689,993	$ 1,188,246	$ 21,907,579	$ (3,147,271)	$ 59,928,468
Comprehensive income:
Net earnings					(313,606)		(313,606)
Other comprehensive income				92,435			92,435
Grant of stock options			128,688				0
Sale of treasury stock			(7,108)			147,343	140,235
Stock dividends	218	2	(29)		(191)
Conversion Class C to Class A	958	(959)	1
Balance at Jun. 30, 2011	18,359,066	1,931,074	19,811,545	1,280,681	21,593,782	(2,999,928)	59,976,220
Balance at Dec. 31, 2011	19,277,596	2,027,195	19,487,565	654,443	22,546,623	(2,762,835)	61,230,587
Comprehensive income:
Net earnings					5,255,215		5,255,215
Other comprehensive income				1,940,010			1,940,010
Grant of stock options			94,436				166,810
Sale of treasury stock			(98,025)			256,956	158,931
Balance at Jun. 30, 2012	$ 19,277,596	$ 2,027,195	$ 19,483,976	$ 2,594,453	$ 27,801,838	$ (2,505,879)	$ 68,679,179

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

- Definition

Net of tax amount of other comprehensive income (loss) attributable to the parent entity.

+ References

+ Details

- Definition

Equity impact of the value of treasury stock (units) reissued during the period, excluding reissuance of shares (units) held in treasury used to satisfy equity-based compensation obligations exercised by the holders of such rights. Upon reissuance of shares (units) from treasury, either the common or preferred stock (unit) reissued is outstanding.

+ References + Details

Statement of Cash Flows - USD ($)	6 Months Ended
Statement of Cash Flows - USD ($)	Jun. 30, 2012	Jun. 30, 2011
Cash flows from operating activities:
Net cash provided by operating activities	$ 24,431,101	$ 34,177,623
Securities held to maturity:
Purchase-fixed maturity securities	(7,752,826)	(46,298,806)
Calls and maturities - fixed maturity securities	3,705,012	8,366,456
Securities available for sale:
Purchase - equity securities	(887,917)	(3,477,093)
Sales - equity securities	1,445,020	3,457,030
Purchase of short-term investments	(6,579,805)	(32,008,356)
Sales of short-term investments	7,949,783	30,358,108
Purchase of restricted assets	(285,626)	(150,163)
Changes in assets for perpetual care trusts	(139,322)	(138,661)
Amount received for perpetual care trusts	82,529	55,590
Mortgage, policy, and other loans made	(55,936,935)	(64,347,843)
Payments received for mortgage, policy and other loans	62,940,253	52,272,804
Purchase of property and equipment	(1,191,210)	(298,209)
Disposal of property and equipment	14,768	2,250,000
Purchase of real estate	(55,682)	(218,836)
Sale of real estate	366,720	2,032,992
Reinsurance with North America Life		12,990,444
Cash paid for purchase of subsidiaries, net of cash received	(180,591)
Net cash provided by (used in) investing activities	3,494,171	(35,154,543)
Cash flows from financing activities:
Annuity contract receipts	4,388,970	4,074,901
Annuity contract withdrawals	(6,748,612)	(7,246,850)
Repayment of bank loans on notes and contracts	(772,358)	(1,186,821)
Proceeds from borrowing on bank loans		3,559,026
Change in line of credit borrowings	3,600,000
Net cash provided by (used in) financing activities	468,000	(799,744)
Net change in cash and cash equivalents	28,393,272	(1,776,664)
Cash and cash equivalents at beginning of period	17,083,604	39,556,503
Cash and cash equivalents at end of period	17,083,604	39,556,503
Non Cash Investing and Financing Activities
Mortgage loans foreclosed into real estate	$ 11,527,488	$ 4,916,403

1) Basis of Presentation

6 Months Ended

Jun. 30, 2012

Notes

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 Articles 8 and 10 of Regulation S X. Accordingly, they do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America for complete financial statements. These financial statements should be read in conjunction with the consolidated financial statements of the Company and notes thereto for the year ended December 31, 2011, included in the Company’s Annual Report on Form 10-K (file number 000-09341). In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012.

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 construction loans held for investment, those used in determining loan loss reserve, and those used in determining the estimated future costs for pre-need sales. Although some variability is inherent in these estimates, management believes the amounts provided are fairly stated in all material respects.

Certain 2011 amounts have been reclassified to bring them into conformity with the 2012 presentation.

2) Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2012

Notes

2) Recent Accounting Pronouncements

Disclosures about Offsetting Assets and Liabilities – In December 2011, the Financial Accounting Standards Board ("FASB") issued authoritative guidance related to balance sheet offsetting. The new guidance requires disclosures about assets and liabilities that are offset or have the potential to be offset. These disclosures are intended to address differences in the asset and liability offsetting requirements under U.S. GAAP and International Financial Reporting Standards (“IFRS”). This new guidance will be effective for us for interim and annual reporting periods beginning January 1, 2013, with retrospective application required. The adoption of this guidance is not expected to have a material impact on the Company’s results of operations or financial position.

3) Investments

6 Months Ended

Jun. 30, 2012

Notes

3) Investments

The Company’s investments in fixed maturity securities held-to-maturity and equity securities available for sale as of June 30, 2012 are summarized as follows:

	Amortized Cost	Gross Unrealized Gains	Gross Unrealized Losses	Estimated Fair Value
June 30, 2012:
Fixed maturity securities held to maturity carried at amortized cost:
Bonds:
U.S. Treasury securities and obligations of U.S. Government agencies	$ 2,811,474	$558,830	$ -	$ 3,370,304
Obligations of states and political subdivisions	2,960,476	353,439	(6,560)	3,307,355
Corporate securities including public utilities	118,961,564	12,950,236	(1,409,269)	130,502,531
Mortgage-backed securities	5,348,172	288,026	(193,980)	5,442,218
Redeemable preferred stock	1,510,878	75,472	(8,000)	1,578,350
Total fixed maturity securities held to maturity	$131,592,564	$14,226,003	$(1,617,809)	$144,200,758

	Amortized Cost	Gross Unrealized Gains	Gross Unrealized Losses	Estimated Fair Value
June 30, 2012:

Equity securities available for sale at estimated fair value:

Non-redeemable preferred stock	$ 20,281	$ -	$ (1,797)	$ 18,484

Common stock:

Industrial, miscellaneous and all other	6,840,761	378,015	(1,354,827)	5,863,949

Total equity securities available for sale at estimated fair value	$6,861,042	$378,015	$(1,356,624)	$5,882,433

Mortgage loans on real estate and construction loans held for investment at amortized cost:
Residential	$52,498,871
Residential construction	9,085,386
Commercial	41,090,847
Less: Allowance for loan losses	(4,699,410)
Total mortgage loans on real estate and construction loans held for investment	$97,975,694

Real estate held for investment - net of depreciation	$4,272,796
Other real estate owned held for investment - net of depreciation	56,127,842
Other real estate owned held for sale	5,998,740
Total real estate	$66,399,378

Policy and other loans at amortized cost - net of allowance for doubtful accounts	$17,818,019

Short-term investments at amortized cost	$5,562,045

The Company’s investments in fixed maturity securities held to maturity and equity securities available for sale as of December 31, 2011 are summarized as follows:

	Amortized Cost	Gross Unrealized Gains	Gross Unrealized Losses	Estimated Fair Value
December 31, 2011:
Fixed maturity securities held to maturity carried at amortized cost:
Bonds:
U.S. Treasury securities and obligations of U.S. Government agencies	$ 2,820,159	$551,740	$ -	$ 3,371,899
Obligations of states and political subdivisions	3,024,425	309,986	(13,156)	3,321,255
Corporate securities including public utilities	113,648,447	10,075,071	(2,268,146)	121,455,372
Mortgage-backed securities	6,575,178	354,286	(356,900)	6,572,564
Redeemable preferred stock	1,510,878	72,639	(129,200)	1,454,317
Total fixed maturity securities held to maturity	$127,579,087	$11,363,722	$(2,767,402)	$136,175,407

	Amortized Cost	Gross Unrealized Gains	Gross Unrealized Losses	Estimated Fair Value
December 31, 2011:

Equity securities available for sale at estimated fair value:

Non-redeemable preferred stock	$ 20,281	$ -	$ (1,843)	$ 18,438

Common stock:

Industrial, miscellaneous and all other	7,250,991	363,387	(1,333,424)	6,280,954

Total equity securities available for sale at estimated fair value	$7,271,272	$363,387	$(1,335,267)	$6,299,392

Mortgage loans on real estate and construction loans held for investment at amortized cost:
Residential	$54,344,327
Residential construction	17,259,666
Commercial	48,433,147
Less: Allowance for loan losses	(4,881,173)
Total mortgage loans on real estate and construction loans held for investment	$115,155,967

Real estate held for investment - net of depreciation	$3,786,780
Other real estate owned held for investment - net of depreciation	46,398,095
Other real estate owned held for sale	5,793,900
Total real estate	$55,978,775

Policy and other loans at amortized cost - net of allowance for doubtful accounts	$18,463,277

Short-term investments at amortized cost	$6,932,023

Fixed Maturity Securities

The following tables summarize unrealized losses on fixed maturity securities, which are carried at amortized cost, at June 30, 2012 and December 31, 2011. The unrealized losses were primarily related to interest rate fluctuations. The tables set forth unrealized losses by duration and number of investment positions, together with the fair value of the related fixed maturity securities:

	Unrealized Losses for Less than Twelve Months	No. of Investment Positions	Unrealized Losses for More than Twelve Months	No. of Investment Positions	Total Unrealized Loss
At June 30, 2012
Obligations of states and political subdivisions	$ -	0	$ 6,560	2	$ 6,560
Corporate securities including public utilities	598,070	22	811,199	17	1,409,269
Mortgage-backed securities	54,149	1	139,831	3	193,980
Redeemable preferred stock	-	0	8,000	1	8,000
Total unrealized losses	$ 652,219	23	$ 965,590	23	$1,617,809
Fair Value	$10,581,908		$8,353,472		$18,935,380

At December 31, 2011
Obligations of states and political subdivisions	$ -	0	$ 13,156	2	$ 13,156
Corporate securities including public utilities	1,544,224	47	723,922	12	2,268,146
Mortgage-backed securities	161,300	3	195,600	1	356,900
Redeemable preferred stock	800	1	128,400	1	129,200
Total unrealized losses	$1,706,324	51	$1,061,078	16	$2,767,402
Fair Value	$24,249,533		$3,762,892		$28,012,425

As of June 30, 2012, the average market value of the related fixed maturities was 92.1% of amortized cost and the average market value was 91.0% of amortized cost as of December 31, 2011. During the six months ended June 30, 2012 and 2011 an other than temporary decline in fair value resulted in the recognition of credit losses on fixed maturity securities of $90,000 and $65,129, respectively.

On a quarterly basis, the Company reviews its available-for-sale fixed investment securities related to corporate securities and other public utilities, consisting of bonds and preferred stocks that are in a loss position. The review involves an analysis of the securities in relation to historical values, and projected earnings and revenue growth rates. Based on the analysis, a determination is made whether a security will likely recover from the loss position within a reasonable period of time. If it is unlikely that the investment will recover from the loss position, the loss is considered to be other than temporary, the security is written down to the impaired value and an impairment loss is recognized. No other than temporary impairment loss was considered to exist for these fixed maturity securities as of June 30, 2012 and 2011.

Equity Securities

The following tables summarize unrealized losses on equity securities that were carried at estimated fair value based on quoted trading prices at June 30, 2012 and December 31, 2011. The unrealized losses were primarily the result of decreases in fair value due to overall equity market declines. The tables set forth unrealized losses by duration and number of investment positions, together with the fair value of the related equity securities available-for-sale in a loss position:

	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 June 30, 2012
Non-redeemable preferred stock	$ 213	1	$ 1,584	1		$ 1,797
Industrial, miscellaneous and all other	582,951	61	771,876	30		1,354,827
Total unrealized losses	$ 583,164	62	$ 773,460	31		$1,356,624
Fair Value	$2,213,889		$1,005,768			$3,219,657

At December 31, 2011
Non-redeemable preferred stock	$ 0	-	$ 1,843	2		$ 1,843
Industrial, miscellaneous and all other	955,400	79	378,024	14		1,333,424
Total unrealized losses	$ 955,400	79	$379,867	16		$1,335,267
Fair Value	$2,857,082		$560,529			$3,417,611

As of June 30, 2012, the average market value of the equity securities available for sale was 70.4% of the original investment and the average market value was 71.9% of the original investment as of December 31, 2011. The intent of the Company is to retain equity securities for a period of time sufficient to allow for the recovery in fair value. However, the Company may sell equity securities during a period in which the fair value has declined below the amount of the original investment. In certain situations new factors, including changes in the business environment, can change the Company’s previous intent to continue holding a security. During the six months ended June 30, 2012 and 2011, there was no other than temporary decline in fair value.

On a quarterly basis, the Company reviews its investment in industrial, miscellaneous and all other equity securities that are in a loss position. The review involves an analysis of the securities in relation to historical values, price earnings ratios, projected earnings and revenue growth rates. Based on the analysis a determination is made whether a security will likely recover from the loss position within a reasonable period of time. If it is unlikely that the investment will recover from the loss position, the loss is considered to be other than temporary, the security is written down to the impaired value and an impairment loss is recognized. No other than temporary impairment loss was considered to exist for these equity securities as of June 30, 2012 and 2011.

The fair values of fixed maturity securities are based on quoted market prices, when available. For fixed maturity securities not actively traded, fair values are estimated using values obtained from independent pricing services, or in the case of private placements, are estimated by discounting expected future cash flows using a current market value applicable to the coupon rate, credit and maturity of the investments. The fair values for equity securities are based on quoted market prices.

The amortized cost and estimated fair value of fixed maturity securities at June 30, 2012, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because certain borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized Cost	Estimated Fair Value
Held to Maturity:
Due in 2012	$ 577,059	$ 582,761
Due in 2013 through 2016	19,254,387	20,942,282
Due in 2017 through 2021	50,167,095	54,454,126
Due after 2021	54,734,973	61,201,021
Mortgage-backed securities	5,348,172	5,442,218
Redeemable preferred stock	1,510,878	1,578,350
Total held to maturity	$131,592,564	$144,200,758

The amortized cost and estimated fair value of available for sale securities at June 30, 2012, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because certain borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Equities are valued using the specific identification method.

	Amortized Cost	Estimated Fair Value
Available for Sale:
Due in 2012 through 2015	$ -	$ -
Due in 2013 through 2016	-	-
Due in 2017 through 2021	-	-
Due after 2021	-	-
Non-redeemable preferred stock	20,281	18,484
Common stock	6,840,761	5,863,949
Total available for sale	$6,861,042	$5,882,433

The Company’s realized gains and losses, other than temporary impairments from investments and other assets, are summarized as follows:

		Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Fixed maturity securities held to maturity:
Gross realized gains		$ 129,651		$ 166,465		$ 137,255		$ 319,957
Gross realized losses		-		(93,736)		(334)		(131,821)
Other than temporary impairments		(45,000)		(30,000)		(90,000)		(65,129)

Securities available for sale:
Gross realized gains		15,372		166,872		152,580		455,123
Gross realized losses		-		(27,950)		(5,705)		(34,804)
Other than temporary impairments		-		-		-		-

Other assets:
Gross realized gains		54,583		1,045,915		86,870		1,055,071
Gross realized losses		(12,680)		-		(12,680)		(60,870)
Other than temporary impairments		-		-		-		-
Total		$141,926		$1,227,566		$ 267,986		$1,537,527

The net carrying amount of held to maturity securities sold was $341,173 and $12,341,156 for the six months ended June 30, 2012 and the year ended December 31, 2011, respectively. The net realized gain related to these sales was $7,242 and $462,267 for the six months ended June 30, 2012 and the year ended December 31, 2011, respectively. Certain circumstances lead to these decisions to sell. In 2012 and 2011, the Company sold certain held to maturity bonds in gain positions to reduce its risk in certain industries or companies.

There were no investments, aggregated by issuer, in excess of 10% of shareholders’ equity (before net unrealized gains and losses on available-for-sale securities) at June 30, 2012, other than investments issued or guaranteed by the United States Government.

Major categories of net investment income are as follows:

	Three Months Ended June 30,		Six Months Ended June 30,
	2012	2011	2012	2011
Fixed maturity securities	$ 1,943,272	$ 1,986,480	$ 3,853,617	$ 3,739,257
Equity securities	68,146	59,000	131,723	126,986
Mortgage loans on real estate	2,075,430	1,699,220	4,212,006	2,986,433
Real estate	800,339	566,777	1,458,794	1,138,089
Policy and other loans	189,947	210,914	418,274	424,032
Short-term investments, principally gains on sale of mortgage loans and other	2,006,325	1,346,332	4,043,731	2,720,664
Gross investment income	7,083,459	5,868,723	14,118,145	11,135,461
Investment expenses	(945,561)	(1,151,365)	(1,926,200)	(2,147,655)
Net investment income	$ 6,137,898	$ 4,717,358	$ 12,191,945	$ 8,987,806

Net investment income includes income earned by the restricted assets of the cemeteries and mortuaries of $168,989 and $170,649 for six months ended June 30, 2012 and 2011, respectively.

Net investment income on real estate consists primarily of rental revenue received under short-term leases.

Investment expenses consist primarily of depreciation, property taxes, operating expenses of real estate and an estimated portion of administrative expenses relating to investment activities.

Securities on deposit for regulatory authorities as required by law amounted to $9,624,656 at June 30, 2012 and $9,593,318 at December 31, 2011. The restricted securities are included in various assets under investments on the accompanying condensed consolidated balance sheets.

Mortgage Loans

Mortgage loans consist of first and second mortgages. The mortgage loans bear interest at rates ranging from 2.0% to 10.5% per annum, maturity dates range from three months to 30 years and are secured by real estate. Concentrations of credit risk arise when a number of mortgage loan debtors have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions. Although the Company has a diversified mortgage loan portfolio consisting of residential mortgages, commercial loans and residential construction loans and requires collateral on all real estate exposures, a substantial portion of its debtors’ ability to honor obligations is reliant on the economic stability of the geographic region in which the debtors live or do business. At June 30, 2012, the Company had 31%, 13% and 12% of its mortgage loans from borrowers located in the states of Utah, California and Florida, respectively. The mortgage loans on real estate balances on the consolidated balance sheet are reflected net of an allowance for loan losses of $4,699,410 and $4,881,173 at June 30, 2012 and December 31, 2011, respectively.

The Company establishes a valuation allowance for credit losses in its portfolio.

The following is a summary of the allowance for loan losses as a contra-asset account for the periods presented:

Allowance for Credit Losses and Recorded Investment in Mortgage Loans

	Commercial	Residential	Residential Construction	Total
June 30, 2012
Allowance for credit losses:
Beginning balance - January 1, 2011	$ -	$ 4,338,805	$ 542,368	$ 4,881,173
Charge-offs	-	(168,154)	(250,524)	(418,678)
Provision	-	236,915	-	236,915
Ending balance -March 31, 2012	$ -	$ 4,407,566	$ 291,844	$ 4,699,410

Ending balance: individually evaluated for impairment	$ -	$ 885,968	$ 188,285	$ 1,074,253

Ending balance: collectively evaluated for impairment	$ -	$ 3,521,598	$ 103,559	$ 3,625,157

Ending balance: loans acquired with deteriorated credit quality	$ -	$ -	$ -	$ -

Mortgage loans:
Ending balance	$ 41,090,847	$ 52,498,871	$ 9,085,386	$ 102,675,104

Ending balance: individually evaluated for impairment	$ 2,842,962	$ 5,403,395	$ 3,712,761	$ 11,959,118

Ending balance: collectively evaluated for impairment	$ 38,247,885	$ 47,095,476	$ 5,372,625	$ 90,715,986

Ending balance: loans acquired with deteriorated credit quality	$ -	$ -	$ -	$ -

December 31, 2011
Allowance for credit losses:
Beginning balance - January 1, 2011	$ -	$ 6,212,072	$ 858,370	$ 7,070,442
Charge-offs	-	(2,994,715)	(430,274)	(3,424,989)
Provision	-	1,121,448	114,272	1,235,720
Ending balance - December 31, 2011	$ -	$ 4,338,805	$ 542,368	$ 4,881,173

Ending balance: individually evaluated for impairment	$ -	$ 738,975	$ 250,524	$ 989,499

Ending balance: collectively evaluated for impairment	$ -	$ 3,599,830	$ 291,844	$ 3,891,674

Ending balance: loans acquired with deteriorated credit quality	$ -	$ -	$ -	$ -

Mortgage loans:
Ending balance	$ 48,433,147	$ 54,344,327	$ 17,259,666	$ 120,037,140

Ending balance: individually evaluated for impairment	$ 2,758,235	$ 4,611,995	$ 5,645,865	$ 13,016,095

Ending balance: collectively evaluated for impairment	$ 45,674,912	$ 49,732,332	$ 11,613,801	$ 107,021,045

Ending balance: loans acquired with deteriorated credit quality	$ -	$ -	$ -	$ -

The following is a summary of the aging of mortgage loans for the periods presented:

Age Analysis of Past Due Mortgage Loans

	30-59 Days Past Due	60-89 Days Past Due	Greater Than 90 Days 1)	In Foreclosure 1)	Total Past Due	Current	Total Mortgage Loans	Allowance for Loan Losses	Net Mortgage Loans
June 30, 2012
Commercial	$ 572,215	$ -	$ -	$ 2,842,962	$ 3,415,177	$ 37,675,670	$ 41,090,847	$ -	$ 41,090,847
Residential	807,321	2,179,410	4,251,414	5,403,395	12,641,540	39,857,331	52,498,871	(4,407,566)	48,091,305
Residential Construction	427,950	-	1,083,731	3,712,761	5,224,442	3,860,944	9,085,386	(291,844)	8,793,542

Total	$ 1,807,486	$ 2,179,410	$ 5,335,145	$ 11,959,118	$ 21,281,159	$ 81,393,945	$ 102,675,104	$ (4,699,410)	$ 97,975,694

December 31, 2011
Commercial	$ -	$ -	$ 1,053,500	$ 2,758,235	$ 3,811,735	$ 44,621,412	$ 48,433,147	$ -	$ 48,433,147
Residential	2,478,084	2,058,261	5,500,340	4,611,995	14,648,680	39,695,647	54,344,327	(4,338,805)	50,005,522
Residential Construction	859,651	682,532	309,651	5,645,865	7,497,699	9,761,967	17,259,666	(542,368)	16,717,298

Total	$ 3,337,735	$ 2,740,793	$ 6,863,491	$ 13,016,095	$ 25,958,114	$ 94,079,026	$ 120,037,140	$ (4,881,173)	$ 115,155,967

1) Interest income is not recognized on loans past due greater than 90 days or in foreclosure.

Impaired Mortgage Loans

Impaired mortgage loans include loans with a related specific valuation allowance or loans whose carrying amount has been reduced to the expected collectible amount because the impairment has been considered other than temporary. The recorded investment in and unpaid principal balance of impaired loans along with the related loan specific allowance for losses, if any, for each reporting period and the average recorded investment and interest income recognized during the time the loans were impaired were as follows:

Impaired Loans

	Recorded Investment	Unpaid Principal Balance	Related Allowance	Average Recorded Investment	Interest Income Recognized
June 30, 2012
With no related allowance recorded:
Commercial	$ 2,842,962	$ 2,842,962	$ -	$ 2,842,962	$ -
Residential	4,251,414	4,251,414	-	4,251,414	-
Residential construction	1,083,731	1,083,731	-	1,083,731	-

With an allowance recorded:
Commercial	$ -	$ -	$ -	$ -	$ -
Residential	5,403,395	5,403,395	885,968	5,403,395	-
Residential construction	3,712,761	3,712,761	188,285	3,712,761	-

Total:
Commercial	$ 2,842,962	$ 2,842,962	$ -	$ 2,842,962	$ -
Residential	9,654,809	9,654,809	885,968	9,654,809	-
Residential construction	4,796,492	4,796,492	188,285	4,796,492	-

December 31, 2011
With no related allowance recorded:
Commercial	$ 3,811,735	$ 3,811,735	$ -	$ 3,811,735	$ -
Residential	5,500,340	5,500,340	-	5,500,340	-
Residential construction	309,651	309,651	-	309,651	-

With an allowance recorded:
Commercial	$ -	$ -	$ -	$ -	$ -
Residential	4,611,995	4,611,995	738,975	4,611,995	-
Residential construction	5,645,865	5,645,865	250,524	5,645,865	-

Total:
Commercial	$ 3,811,735	$ 3,811,735	$ -	$ 3,811,735	$ -
Residential	10,112,335	10,112,335	738,975	10,112,335	-
Residential construction	5,955,516	5,955,516	250,524	5,955,516	-

Credit Risk Profile Based on Performance Status

The Company’s mortgage loan portfolio is monitored based on performance of the loans. Monitoring a mortgage loan increases when the loan is delinquent or earlier if there is an indication of impairment. The Company defines non-performing mortgage loans as loans 90 days past due or on non-accrual status.

The Company’s performing and non-performing mortgage loans were as follows:

Mortgage Loan Credit Exposure
Credit Risk Profile Based on Payment Activity
	Commercial		Residential		Residential Construction		Total
	June 30, 2012	December 31, 2011	June 30, 2012	December 31, 2011	June 30, 2012	December 31, 2011	June 30, 2012	December 31, 2011

Performing	$ 38,247,885	$ 44,621,412	$ 42,844,062	$ 44,231,992	$ 4,288,894	$ 11,304,150	$ 85,380,841	$ 100,157,554
Nonperforming	2,842,962	3,811,735	9,654,809	10,112,335	4,796,492	5,955,516	17,294,263	19,879,586

Total	$ 41,090,847	$ 48,433,147	$ 52,498,871	$ 54,344,327	$ 9,085,386	$ 17,259,666	$ 102,675,104	$ 120,037,140

Non-Accrual Mortgage Loans

Once a loan is past due 90 days, it is the Company’s policy to end the accrual of interest income on the loan and write off any income that had been accrued. Interest not accrued on these loans totals $1,984,000 and $2,308,000 as of June 30, 2012 and December 31, 2011, respectively.

The following is a summary of mortgage loans on a nonaccrual status for the periods presented.

	Mortgage Loans on Nonaccrual Status

	As of June 30,	As of December 31,
	2012	2011
Commercial	$ 2,842,962	$ 3,811,735
Residential	9,654,809	10,112,335
Residential construction	4,796,492	5,955,516
Total	$ 17,294,263	$ 19,879,586

Loan Loss Reserve

When a repurchase demand is received from a third party investor, the relevant data is reviewed and captured so that an estimated future loss can be calculated. The key factors that are used in the estimated loss calculation are as follows: (i) lien position, (ii) payment status, (iii) claim type, (iv) unpaid principal balance, (v) interest rate, and (vi) validity of the demand. Other data is captured and is useful for management purposes; the actual estimated loss is generally based on these key factors. The Company conducts its own review upon the receipt of a repurchase demand. In many instances, the Company is able to resolve the issues relating to the repurchase demand by the third party investor without having to make any payments to the investor.

The following is a summary of the loan loss reserve that is included in other liabilities and accrued expenses:

	As of June 30,	As of December 31,
	2012	2011
Balance, beginning of period	$2,337,875	$5,899,025
Provisions for losses	1,535,315	1,667,805
Charge-offs	(249,370)	(5,228,955)
Balance, end of period	$3,623,820	$2,337,875

The Company believes the loan loss reserve represents probable loan losses incurred as of the balance sheet date. The loan loss reserve may not be adequate, however, for claims asserted by third party investors. Actual loan loss experience could change, in the near-term, from the established reserve based upon claims asserted by third party investors. If SecurityNational Mortgage is unable to negotiate acceptable terms with the third party investors, legal action may ensue in an effort to obtain amounts that the third party investors claim are allegedly due. In the event of legal action, if SecurityNational Mortgage is not successful in its defenses against claims asserted by

these third party investors to the extent that a substantial judgment is entered against SecurityNational Mortgage which is beyond its capacity to pay, SecurityNational Mortgage may be required to curtail or cease operations.

- Definition

The entire disclosure for investments in certain debt and equity securities.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 320
-Glossary Debt Security
-URI http://asc.fasb.org/extlink&oid=6509901

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 30
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6379141&loc=d3e15032-111544

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 320
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27290-111563

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 320
-Glossary Equity Security
-URI http://asc.fasb.org/extlink&oid=6511694

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 320
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27232-111563

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 320
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6957658&loc=d3e62557-112803

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 320
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27357-111563

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 320
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27161-111563

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 320
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27405-111563

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 115
-Paragraph 3, 19, 20, 21, 22, 137
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

4) Stock-based Compensation

6 Months Ended

Jun. 30, 2012

Notes

4) Stock-based Compensation

4) Stock-Based Compensation

The Company has four fixed option plans (the “1993 Plan,” the “2000 Plan”, the “2003 Plan” and the

“2006 Plan”). Compensation expense for options issued of $47,218

and $64,344 has been recognized for these plans for the quarters ended June 30, 2012 and 2011, respectively, and $94,436 and $128,688 for the six months ended June 30, 2012 and 2011, respectively.

Deferred tax credit has been recognized related to the compensation expense of $16,054 and

$21,877 for the quarters ended June 30, 2012 and 2011, respectively, and $32,108 and $43,754 for the six months ended June 30, 2012 and 2011, respectively.

Options to purchase 342,500 shares of the Company’s common stock were granted April 13, 2012. The fair value relating to stock-based compensation is $205,175 and will be expensed as options become available to exercise at the rate of 25% at the end of each quarter over the twelve months ended April 13, 2013.

Options to purchase 346,500 shares of the Company’s common stock were granted December 2, 2011. The fair value relating to stock-based compensation is $205,175 and will be expensed as options become available to exercise at the rate of 25% at the end of each quarter over the twelve months ended December 31, 2012.

Options to purchase 345,600 shares of the Company’s common stock were granted December 3, 2010. The fair value relating to stock-based compensation was $257,376 and was expensed as options became available to exercise at the rate of 25% at the end of each quarter over the twelve months ended December 31, 2011.

The weighted-average fair value of each option granted in 2012 under the 2003 Plan and the 2006 Plan, is estimated at $0.52 and $0.71 for the April 13, 2012 options as of the grant date using the Black Scholes Option Pricing Model with the following assumptions: dividend yield of 5%, volatility of 59%, risk-free interest rate of 3.4%, and an expected life of five to ten years.

The weighted-average fair value of each option granted in 2011 under the 2003 Plan and the 2006 Plan, is estimated at $0.52 and $0.71 for the December 2, 2011 options as of the grant date using the Black Scholes Option Pricing Model with the following assumptions: dividend yield of 5%, volatility of 59%, risk-free interest rate of 3.4%, and an expected life of five to ten years.

The weighted-average fair value of each option granted in 2010 under the 2003 Plan and the 2006 Plan, is estimated at $0.77 and $0.71 for the December 3, 2010 options as of the grant date using the Black Scholes Option Pricing Model with the following assumptions: dividend yield of 5%, volatility of 65%, risk-free interest rate of 3.4%, and an expected life of five to ten years.

The Company generally estimates the expected life of the options based upon the contractual term of the options. Future volatility is estimated based upon the historical volatility of the Company’s Class A common stock over a period equal to the estimated life of the options. Common stock issued upon exercise of stock options are generally new share issuances rather than from treasury shares.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References

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-Name Staff Accounting Bulletin (SAB)
-Number Topic 14

Reference 7: http://www.xbrl.org/2003/role/presentationRef
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-Name Statement of Financial Accounting Standard (FAS)
-Number 123R
-Paragraph 64, 65, A240
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
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-Number 93-6
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+ Details

5) Capital Stock

6 Months Ended

Jun. 30, 2012

Notes

5) Capital Stock

The Company has two classes of common stock with shares outstanding: Class A and Class C. Class C shares are convertible into Class A shares at any time on a ten to one ratio. The decrease in treasury stock was the result of treasury stock being used to fund the company’s 401-K and Deferred Compensation Plans.

- Definition

The entire disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms, and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables, effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

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+ Details

6) Earnings (loss) Per Share

6 Months Ended

Jun. 30, 2012

Notes

6) Earnings (loss) Per Share

6) Earnings (Loss) Per Share

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

		Three Months Ended June 30,		Six Months Ended June 30,
		2012	2011	2012	2011
Numerator:
	Net earnings (loss)	$ 3,593,032	$ 204,867	$ 5,255,215	$ (313,606)
Denominator:
	Basic weighted-average shares outstanding	9,540,238	9,350,042	9,518,058	9,311,131
Effect of dilutive securities:
	Employee stock options	361,526	42,694	166,810	0
Dilutive potential common shares		361,526	42,694	166,810	0
	Diluted weighted-average shares outstanding	9,901,764	9,392,736	9,684,868	9,311,131

Basic net earnings (loss) per share		$0.38	$0.02	$0.55	($0.03)

Diluted net earnings (loss) per share		$0.36	$0.02	$0.54	($0.03)

Net earnings (loss) per share amounts have been adjusted for the effect of annual stock dividends. For the three and six months ended June 30, 2012 and 2011, there were 1,178,207 and 1,551,552 of anti-dilutive employee stock option shares, respectively, that were not included in the computation of diluted net loss per common share as their effect would be anti-dilutive.

7) Business Segments

6 Months Ended

Jun. 30, 2012

Notes

7) Business Segments

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 loan segment consists of loan originations fee income and expenses from the originations of residential and commercial 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 of the form 10K for the year ended December 31, 2011. 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 offer different products and are managed separately due to the different products and the need to report to the various regulatory jurisdictions.

	Life Insurance	Cemetery/ Mortuary	Mortgage	Reconciling Items	Consolidated
For the Three Months Ended
June 30, 2012
Revenues from external customers	$17,481,537	$2,730,517	$36,316,156	$ -	$56,528,210
Intersegment revenues	2,081,734	380,565	75,882	(2,538,181)	-
Segment profit (loss) before income taxes	2,054,297	(77,463)	3,059,543	-	5,036,377

For the Three Months Ended
June 30, 2011
Revenues from external customers	$16,598,670	$3,723,533	$16,144,215	$ -	$36,466,418
Intersegment revenues	1,632,386	480,581	60,749	(2,173,716)	-
Segment profit (loss) before income taxes	338,044	662,744	(859,610)	-	141,178

For the Six Months Ended
June 30, 2012
Revenues from external customers	$35,108,886	$5,690,157	$63,052,390		$103,851,433

Intersegment revenues	4,160,833	757,558	151,289	(5,069,680)	-

Segment profit before income taxes	2,891,861	149,092	4,324,016	-	7,364,969

Identifiable Assets	520,595,067	112,435,625	40,261,098	(119,681,252)	553,610,538
Goodwill	391,848	285,191	-	-	677,039

For the Six Months Ended
June 30, 2011
Revenues from external customers	$33,746,991	$6,756,619	$30,134,988	$ -	$70,638,598

Intersegment revenues	3,699,098	948,606	121,086	(4,768,790)	-

Segment profit (loss) before income taxes	1,417,523	814,368	(3,413,295)	-	(1,181,404)

Identifiable Assets	474,375,686	111,945,435	24,999,574	(119,549,486)	491,771,209
Goodwill	391,848	285,191	-	-	677,039

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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+ Details

Note 8: Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2012

Notes

Note 8: Fair Value of Financial Instruments

8) Fair Value of Financial Instruments

Generally accepted accounting principles (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 we 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 our 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 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 3.

Restricted Assets of the Cemeteries and Mortuaries: A portion of these assets include mutual funds and equity securities that have quoted market prices. Also included are cash and cash equivalents and participations in mortgage loans. The carrying amounts reported in the accompanying consolidated balance sheet for these financial instruments approximate their fair values.

Cemetery Perpetual Care Trust Investments: A portion of these assets include equity securities that have quoted market prices. Also included are cash and cash equivalents. The carrying amounts reported in the accompanying consolidated balance sheet for these financial instruments approximate their fair values.

Call Options: The fair values along with methods used to estimate such values are disclosed in Note 3.

The items shown under Level 3 are valued as follows:

Investment-Type Insurance Contracts: Future policy benefit reserves 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 rates for interest-sensitive insurance products ranged from 4% to 6.5%. 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 based on the contracts’ cash surrender values.

The fair values for the Company’s insurance contracts other than investment-type contracts are not required to be disclosed. However, the fair values 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.

Interest Rate Lock Commitments: The Company’s mortgage banking activities enters into interest rate lock commitments with potential borrowers and forward commitments to sell loans to third-party investors. The Company also implements a hedging strategy for these transactions. A mortgage 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 inception of the mortgage loan commitment. Mortgage loan commitments are defined to be derivatives under generally accepted accounting principles and are recognized at fair value on the consolidated balance sheet with changes in their fair values recorded as part of other comprehensive income from mortgage banking operations.

Bank Loan 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 rate swaps are a derivative financial instruments carried at its fair value. The fair value of the interest rate swap was derived from a proprietary model of the bank from whom the interest rate swap was purchased and to whom the note is payable.

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.

Other Real Estate Owned Held for Investment and Held for Sale: 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. Accordingly, the fair value determination will be weighted more heavily toward the rental analysis.

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 uses market data based upon its real estate operation experience and projected the present value of the net rental income over seven years. The Company uses 60% of the projected cash flow analysis and 40% of the replacement cost to approximate fair value of the collateral.

In addition to this analysis performed by the Company, the Company depreciates Other Real Estate Owned 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.

The following tables summarize Level 1, 2 and 3 financial assets and financial liabilities measured at fair value on a recurring basis by their classification in the condensed consolidated balance sheet at June 30, 2012.

	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
Non-redeemable preferred stock	$18,484	$18,484	$ -	$ -
Common stock	5,863,949	5,863,949	-	-
Total securities available for sale	5,882,433	5,882,433	-	-
Restricted assets of cemeteries and mortuaries	573,857	573,857	-	-
Cemetery perpetual care trust investments	627,293	627,293	-	-
Derivatives - interest rate lock commitments	5,218,290	-	-	5,218,290
Total assets accounted for at fair value on a recurring basis	$12,301,873	$7,083,583	$ -	$5,218,290

Liabilities accounted for at fair value on a recurring basis
Policyholder account balances	$(50,425,076)	$ -	$ -	$(50,425,076)
Future policy benefits - annuities	(65,511,513)	-	-	(65,511,513)
Derivatives - bank loan interest rate swaps	(107,779)	-	-	(107,779)
- call options	(71,865)	(71,865)	-	-
- interest rate lock commitments	(618,858)	-	-	(618,858)
Total liabilities accounted for at fair value on a recurring basis	$(116,735,091)	$(71,865)	$ -	$(116,663,226)

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

	Policyholder Account Balances	Future Policy Benefits - Annuities	Interest Rate Lock Commitments	Bank Loan Interest Rate Swaps

Balance - December 31, 2011	$(50,926,020)	$(65,281,586)	$1,694,541	$(117,812)

Total gains (losses):

Included in earnings	500,944	(229,927)	-	-

Included in other comprehensive income (loss)	-	-	2,904,891	10,033

Balance - June 30, 2012	$(50,425,076)	$(65,511,513)	$4,599,432	$(107,779)

The following tables summarize Level 1, 2 and 3 financial assets and financial liabilities measured at fair value on a nonrecurring basis by their classification in the consolidated balance sheet at June 30, 2012.

		Quoted Prices
		in Active	Significant	Significant
		Markets for	Observable	Unobservable
		Identical Assets	Inputs	Inputs
	Total	(Level 1)	(Level 2)	(Level 3)
Assets accounted for at fair value on a nonrecurring basis
Mortgage loans on real estate	$3,599,000	$ -	$ -	$3,599,000
Total assets accounted for at fair value on a nonrecurring basis	$3,599,000	$ -	$ -	$3,599,000

	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
Non-redeemable preferred stock	$ 18,438	$ 18,438	$ -	$ -
Common stock	6,280,954	6,280,954	-	-
Total securities available for sale	6,299,392	6,299,392	-	-
Restricted assets of cemeteries and mortuaries	548,761	548,761	-	-
Cemetery perpetual care trust investments	617,107	617,107	-	-
Derivatives - interest rate lock commitments	1,904,901	-	-	1,904,901
Total assets accounted for at fair value on a recurring basis	$9,370,161	$7,465,260	$ -	$1,904,901
Liabilities accounted for at fair value on a recurring basis
Policyholder account balances	$(50,926,020)	$ -	$ -	$(50,926,020)
Future policy benefits - annuities	(65,281,586)	-	-	(65,281,586)
Derivatives - bank loan interest rate swaps	(117,812)	-	-	(117,812)
- call options	(80,102)	(80,102)	-	-
- interest rate lock commitment	(210,360)	-	-	(210,360)
Total liabilities accounted for at fair value on a recurring basis	$(116,615,880)	$(80,102)	$ -	$(116,535,778)

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

	Policyholder Account Balances	Future Policy Benefits - Annuities	Interest Rate Lock Commitments	Bank Loan Interest Rate Swaps
Balance - December 31, 2010	$(52,340,807)	$(65,936,445)	$873,059	$(116,533)
Total gains (losses):
Included in earnings	1,414,787	654,859	-	-

Included in other comprehensive income	-	-	821,482	(1,279)
Balance - December 31, 2011	$(50,926,020)	$(65,281,586)	$1,694,541	$(117,812)

		Quoted Prices
		in Active	Significant	Significant
		Markets for	Observable	Unobservable
		Identical Assets	Inputs	Inputs
	Total	(Level 1)	(Level 2)	(Level 3)
Assets accounted for at fair value on a nonrecurring basis

Mortgage loans on real estate	$5,354,600	-	-	$5,354,600
Other real estate owned held for investment	5,419,103	-	-	5,419,103
Other real estate owned held for sale	514,000	-	-	514,000
Total assets accounted for at fair value on a nonrecurring basis	$11,287,703	$ -	$ -	$11,287,703

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=7578670&loc=d3e19207-110258

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 30
-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
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-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13537-108611

Reference 4: http://www.xbrl.org/2003/role/presentationRef
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-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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-Topic 825
-SubTopic 10
-Section 50
-Paragraph 16
-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13504-108611

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13433-108611

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15B
-Subparagraph a, b
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 44A, 44B
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 159
-Paragraph 17-22, 27, 28
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15A
-Subparagraph a-d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15C, 15D
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 157
-Paragraph 32, 33, 34
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 3, 10, 14, 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

9) Other Business Activity

6 Months Ended

Jun. 30, 2012

Notes

9) Other Business Activity

Mortgage Operations

Approximately 59% of the Company’s revenues and expenses are through its wholly owned subsidiary, SecurityNational Mortgage Company (“SecurityNational Mortgage”). SecurityNational Mortgage is a mortgage lender incorporated under the laws of the State of Utah. SecurityNational Mortgage 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. SecurityNational Mortgage obtains loans primarily from its retail offices and independent brokers. SecurityNational Mortgage funds the loans from internal cash flows, including loan purchase agreements from Security National Life Insurance Company (“Security National Life”), and with unaffiliated financial institutions. SecurityNational Mortgage receives fees from the borrowers and other secondary fees from third party investors that purchase its loans. SecurityNational Mortgage sells its loans to third party investors and does not retain servicing of these loans. SecurityNational Mortgage pays the brokers and retail loan officers a commission for loans that are brokered through or originated by SecurityNational Mortgage. For the six months ended June 30, 2012 and 2011, SecurityNational Mortgage originated and sold 5,740 loans ($1,034,903,000 total volume) and 3,452 loans ($570,664,000 total volume), respectively.

SecurityNational Mortgage has entered into a loan purchase agreement to originate and sell mortgage loans to an unaffiliated warehouse bank. The amount available to originate loans under this agreement at June 30, 2012 was $55,000,000. SecurityNational Mortgage originates the loans and immediately sells them to third party investors. Generally, when mortgage loans are sold to warehouse banks, SecurityNational Mortgage is no longer obligated, except in certain circumstances as noted below in the Mortgage Accounting Policy section, to pay the amounts outstanding on the mortgage loans, but is required to pay a fee in the form of interest on a portion of the mortgage loans between the date that the loans are sold to warehouse banks and the settlement date with third party investors. The terms of the loan purchase agreements are typically for one year, with interest accruing on a portion of the mortgage loans at annual rates ranging from 2.5% to 2.75% over the 30-day LIBOR rate. SecurityNational Mortgage renewed its loan purchase agreement with an unaffiliated warehouse bank, which had expired on December 19, 2011, for an indefinite period.

Key accounting policies related to mortgage operations are as follows:

Mortgage loans on real estate and construction loans are carried at their principal balances adjusted for charge offs, the related allowance for loan losses, and net deferred fees or costs on originated loans. The Company defers related material loan origination fees, net of related direct loan origination costs, and amortizes the net fees over the term of the loans.

Mortgage loans are collateral dependent and require an appraisal at the time of underwriting and funding. Generally, the Company will fund a loan not to exceed 80% of the fair value of the loan’s collateral

value. Amounts over 80% require mortgage insurance by an approved third party insurer. Once a loan is deemed to be impaired, the Company will review the market value of the collateral and provide an allowance for any impairment.

Mortgage loans sold to investors are carried at the amount due from third party investors, which is the estimated fair value at the balance sheet date, since these amounts are generally collected within a short period of time.

Real estate held for investment is carried at cost, less accumulated depreciation provided on a straight-line basis over the estimated useful lives of the properties, or is adjusted to a new basis for impairment in value, if any.

Other real estate owned held for investment are foreclosed properties which the Company intends to hold for investment purposes. These properties are recorded at the lower of cost or fair value upon foreclosure. Deprecation is provided on a straight line basis over the estimated useful life of the properties. These properties are analyzed for impairment periodically in accordance with our policy for long-lived assets.

Other real estate owned held for sale are foreclosed properties which the Company intends to sell. These properties are carried at the lower of cost or fair value, less cost to sell.

Policy and other loans are carried at the aggregate unpaid balances, less allowances for possible losses.

Mortgage fee income consists of origination fees, processing fees, and certain other income related to the origination and sale of mortgage loans. For mortgage loans sold to third party investors, mortgage fee income and related expenses are recognized pursuant to generally accepted accounting principles at the time the sales of the mortgage loans comply with the sales criteria for the transfer of financial assets. The sales criteria are as follows: (i) the transferred assets have been isolated from SecurityNational Mortgage and its creditors, (ii) the transferee has the right to pledge or exchange the mortgage, and (iii) SecurityNational Mortgage does not maintain effective control over the transferred mortgage.

SecurityNational Mortgage must determine that all three sales criteria are met at the time a mortgage loan is funded. All rights and title to the mortgage loans are assigned to unrelated financial institution investors, including investor commitments for the loans made prior to warehouse banks purchasing the loans under the purchase commitments. As of June 30, 2012, there were $165,347,000 in mortgage loans in which settlements with third party investors were still pending.

SecurityNational Mortgage sells all mortgage loans to third party investors without recourse. However, it may be required to repurchase a loan or pay a fee instead of repurchase under certain events, which include the following:

· 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.

Loan purchase commitments generally specify a date 30 to 45 days after delivery upon which the underlying loans should be settled. Depending on market conditions, these commitment settlement dates can be extended at a cost to SecurityNational Mortgage. Generally, a ten day extension will cost .125% (12.5 basis points) of the loan amount. SecurityNational Mortgage’s historical data shows that 99% of all loans originated are ordinarily settled by the investors as agreed within 16 days after delivery. There are situations, however, when SecurityNational Mortgage determines that it is unable to enforce the settlement of loans rejected by the third-party investors and that it is in its best interest to repurchase those loans from the warehouse banks.

It is SecurityNational Mortgage's policy to cure any documentation problems regarding such loans at a minimal cost for up to a six-month time period and to pursue efforts to enforce loan purchase commitments from third-party investors concerning the loans. SecurityNational Mortgage believes that six months allows adequate time to remedy any documentation issues, to enforce purchase commitments, and to exhaust other alternatives. Remedial methods include the following:

· Research reasons for rejection,

· Provide additional documents,

· Request investor exceptions,

· Appeal rejection decision to purchase committee, and

· Commit to secondary investors.

Once purchase commitments have expired and other alternatives to remedy are exhausted, which could be earlier than the six month time period, the loans are repurchased and transferred to the long term investment portfolio at the lower of cost or fair value and the previously recorded sales revenue is reversed. Any loan that later becomes delinquent is evaluated by the Company at that time and any impairment is adjusted accordingly.

Determining lower of cost or market. Cost is equal to the amount paid to the warehouse bank and the amount originally funded by SecurityNational Mortgage. Market value, while often difficult to determine, is based on the following guidelines:

· For loans that have an active market, SecurityNational Mortgage uses the market price on the repurchase date.

· For loans where there is no market but there is a similar product, SecurityNational Mortgage uses the market value for the similar product on the repurchase date.

· For loans where no active market exists on the repurchase date, SecurityNational Mortgage 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.

The appraised value of the real estate underlying the original mortgage loan adds support to SecurityNational Mortgage’s determination of fair value because, if the loan becomes delinquent, SecurityNational Mortgage has sufficient value to collect the unpaid principal balance or the carrying value of the loan. In determining the market value on the date of repurchase, SecurityNational Mortgage considers the total value of all of the loans because any sale of loans would be made as a pool.

For mortgages originated and held for investment, mortgage fee income and related expenses are recognized when the loan is originated.

10) Allowance For Doubtful Accounts and Loan Losses and Impaired Loans

6 Months Ended

Jun. 30, 2012

Notes

10) Allowance For Doubtful Accounts and Loan Losses and Impaired Loans

10) Allowance for Doubtful Accounts and Loan Losses and Impaired Loans

The Company records an allowance and recognizes an expense for potential losses from mortgage loans, other loans and receivables in accordance with generally accepted accounting principles.

Receivables are the result of cemetery and mortuary operations, mortgage loan operations and life insurance operations. The allowance is based upon the Company’s historical experience for collectively evaluated impairment. Other allowances are based upon receivables individually evaluated for impairment. Collectability of the cemetery and mortuary receivables is significantly influenced by current economic conditions. The critical issues that impact recovery of mortgage loan operations are interest rate risk, loan underwriting, new regulations and the overall economy.

The Company provides allowances for losses on its mortgage loans held for investment through an allowance for loan losses. The allowance is comprised of two components. The first component is an allowance for collectively evaluated impairment that is based upon the Company’s historical experience in collecting similar receivables. The second component is based upon individual evaluation of loans that are determined to be impaired. Upon determining impairment the Company establishes an individual impairment allowance based upon an assessment of the fair value of the underlying collateral. See the schedules in Note 3 for additional information. In addition, when a mortgage loan is past due more than 90 days, the Company, does not accrue any interest income and proceeds to foreclose on the real estate. All expenses for foreclosure are expensed as incurred. Once foreclosed, the carrying value will approximate its fair value and the amount is classified as other real estate owned held for investment or sale. The Company will rent the properties until it is deemed desirable to sell them.

The mortgage loan loss reserve is an estimate of probable losses at the balance sheet date that the Company will realize in the future on mortgage loans sold to third party investors.

The loan loss reserve analysis involves mortgage loans that have been sold to third party investors where the Company has received a demand from the investor. There are generally three types of demands: make whole, repurchase, or indemnification. These types of demands are more particularly described as follows:

Make whole demand – A make whole demand occurs when an investor forecloses on a property and then sells the property. The make whole amount is calculated as the difference between the original unpaid principal balance, accrued interest and fees, less the sale proceeds.

Repurchase demand – A repurchase demand usually occurs when there is a significant payment default, error in underwriting or detected loan fraud.

Indemnification demand – On certain loans the Company has negotiated a set fee that is to be paid in lieu of repurchase. The fee varies by investor and by loan product type.

Additional information related to the Loan Loss Reserve is included in Note 3.

11) Derivative Investments

6 Months Ended

Jun. 30, 2012

Notes

11) Derivative Investments

The Company is exposed to price risk due to the potential impact of changes in interest rates on the values of mortgage loan commitments from the time a derivative loan commitment is made to an applicant to the time the loan that would result from the exercise of that loan commitment is funded. Managing price risk is complicated by the fact that the ultimate percentage of derivative loan commitments that will be exercised (i.e., the number of loan commitments that will be funded) fluctuates. The probability that a loan will not be funded within the terms of the commitment is driven by a number of factors, particularly the change, if any, in mortgage rates following the inception of the interest rate lock. However, many borrowers continue to exercise derivative loan commitments even when interest rates have fallen.

In general, the probability of funding increases if mortgage rates rise and decreases if mortgage rates fall. This is due primarily to the relative attractiveness of current mortgage rates compared to the applicant’s committed rate. The probability that a loan will not be funded within the terms of the mortgage loan commitment also is influenced by the source of the applications (retail, broker or correspondent channels), proximity to rate lock expiration, purpose for the loan (purchase or refinance) product type and the application approval status. The Company has developed fallout estimates using historical data that take into account all of the variables, as well as renegotiations of rate and point commitments that tend to occur when mortgage rates fall. These fallout estimates are used to estimate the number of loans that the Company expects to be funded within the terms of the mortgage loan commitments and are updated periodically to reflect the most current data.

The Company estimates the fair value of a mortgage loan commitment based on the change in estimated fair value of the underlying mortgage loan and the probability that the mortgage loan will fund within the terms of the commitment. The change in fair value of the underlying mortgage loan is measured from the date the mortgage loan commitment is issued. Therefore, at the time of issuance, the estimated fair value is zero. 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 derived from the Company’s recent historical empirical data are used to estimate the quantity of mortgage loans that will fund within the terms of the commitments.

The Company utilizes forward loan sales commitments to economically hedge the price risk associated with its outstanding mortgage loan commitments. A forward loan sales commitment protects the Company from losses on sales of the loans arising from exercise of the loan commitments by securing the ultimate sales price and delivery date of the loans. Management expects these derivatives will experience changes in fair value opposite to changes in fair value of the derivative loan commitments, thereby reducing earnings volatility related to the recognition in earnings of changes in the values of the commitments.

The Company has adopted a strategy of selling “out of the money” call options on its available-for-sale equity securities as a source of revenue. The options give the purchaser the right to buy from the Company specified

equity securities at a set price up to a pre-determined date in the future. The Company receives an immediate payment of cash for the value of the option and establishes a liability for the fair value of the option. The liability for call options is adjusted to fair value at each reporting date. The fair value of outstanding call options as of June 30, 2012 and December 31, 2011 was $71,865 and $80,102, respectively. In the event an option is exercised, the Company recognizes a gain on the sale of the equity security and a gain from the sale of the option. If the option expires unexercised, the Company recognizes a gain from the sale of the option and retains the underlying equity security.

The following table shows the fair value of derivatives as of June 30, 2012 and December 31, 2011.

	Fair Value of Derivative Instruments
	Asset Derivatives				Liability Derivatives
	June 30, 2012		December 31, 2011		June 30, 2012		December 31, 2011
	Balance Sheet Location	Fair Value	Balance Sheet Location	Fair Value	Balance Sheet Location	Fair Value	Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments:
Interest rate lock and forward sales commitments	other assets	$5,218,290	other assets	$1,904,901	Other liabilities	$618,858	Other liabilities	$ 210,360
Call Options	--	--	--	--	Other liabilities	71,865	Other liabilities	80,102
Interest rate swaps	--	--	--	--	Bank loans payable	107,779	Bank loans payable	117,812
Total		$5,218,290		$1,904,901		$798,502		$ 408,274

The following table shows the gain (loss) on derivatives for the periods presented. There were no gains or losses reclassified from accumulated other comprehensive income (OCI) into income or gains or losses recognized in income on derivatives ineffective portion or any amounts excluded from effective testing.

	Net Amount Gain (Loss) Recognized in OCI		Net Amount Gain (Loss) Recognized in OCI
	Three Months Ended June30,		Six Months Ended June 30,
Derivative - Cash Flow Hedging Relationships:	2012	2011	2012	2011
Interest Rate Lock Commitments	$ 1,928,111	$ 619,313	$ 2,904,891	$ 677,164
Interest Rate Swaps	2,058	(7,336)	10,033	6,303
Sub Total	1,930,169	611,977	2,914,924	683,467
Tax Effect	656,412	208,071	991,074	232,377
Total	$ 1,273,757	$ 403,906	$ 1,923,850	$ 451,090

- Definition

The entire disclosure for the entity's entire derivative instruments and hedging activities. Describes an entity's risk management strategies, derivatives in hedging activities and non-hedging derivative instruments, the assets, obligations, liabilities, revenues and expenses arising therefrom, and the amounts of and methodologies and assumptions used in determining the amounts of such items.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
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+ Details

12) Reinsurance, Commitments and Contingencies

6 Months Ended

Jun. 30, 2012

Notes

12) Reinsurance, Commitments and Contingencies

Reinsurance with North America Life Insurance Company

On March 30, 2011, the Company, through its wholly owned subsidiary, Security National Life, completed a Coinsurance Agreement with North America Life Insurance Company (“North America Life”), a Texas domiciled insurance company. Under the terms of the Coinsurance Agreement, Security National Life agreed to reinsure certain insurance policies of North America Life in exchange for the settlement amount of $15,703,641. Effective as of December 1, 2010, North America Life ceded or transferred to Security National Life, and Security National Life accepted and coinsured all of North America Life’s contractual liabilities under the coinsured policies by means of indemnity reinsurance. The Coinsurance Agreement was approved by the Texas Department of Insurance.

The Coinsurance Agreement also provides that on and after the effective date of December 1, 2010, Security National Life is entitled to exercise all contractual rights of North America Life under the coinsured policies in accordance with the terms and provisions of such policies. Moreover, after the closing date of March 30, 2011, the Company agreed to be responsible for all the contractual liabilities under the coinsured policies, including the administration of the coinsured policies at its sole expense in accordance with the terms and conditions of a services

agreement. Pursuant to the terms of the Coinsurance Agreement, Security National Life paid a ceding commission to North America Life in the amount of $3,525,875. In addition, North America Life transferred $15,703,641 in assets and $19,229,516 in statutory reserves, or liabilities net of due and deferred premiums, to Security National Life. The $15,703,641 in assets included $12,990,444 in cash, $8,997 in policy loans, and $2,704,200 in promissory note secured by real estate properties located in Bexar, Liberty, Travis and Wilson Counties in the State of Texas. The promissory notes are also guaranteed by business entities and an individual.

On September 1, 2011 Security National Life with the approval of the Texas Department of Insurance assumed all of the policies which were issued by North America Life previously assumed and coinsured pursuant to the terms of the Coinsurance Agreement. Security National Life has assumed the same terms and conditions as set forth in each policy and certificates of assumptions were sent to all policyholders.

On May 2, 2012 as part of stock purchase agreement with North America Life, as discussed in note 13, the Company recaptured the 47% of insurance in force that had previously been ceded by Trans-Western Life to North America Life.

Mortgage Loan Loss Settlements

The mortgage industry has seen potential loan losses increase. Future loan losses are extremely difficult to estimate, especially in the current market. However, management believes that the Company’s reserve methodology and its current practice of property preservation allow it to estimate its losses on loans sold. The amounts accrued for loan losses for the three months ended June 30, 2012 and 2011 were $1,090,000 and $305,000, respectively, and for the six months ended June 30, 2012 and 2011, were $1,535,000 and $836,000, respectively. The estimated liability for indemnification losses is included in other liabilities and accrued expenses and, as of June 30, 2012 and December 31, 2011, the balances were $3,624,000 and $2,338,000, respectively.

Settlement with Wells Fargo

On April 7, 2011, SecurityNational Mortgage entered into a settlement agreement with Wells Fargo Funding, Inc. (“Wells Fargo”). The settlement agreement provides that it is intended to be a pragmatic commercial accommodation between SecurityNational Mortgage and Wells Fargo and is not to be construed as an admission of responsibility, liability or fault for either party’s claims. Under the terms of the settlement agreement, SecurityNational Mortgage paid an initial settlement amount to Wells Fargo in the amount of $4,300,000, of which $1,000,000 had already been paid to Wells Fargo in January 2011, leaving a balance of $3,300,000. The $3,300,000 balance was paid shortly after the parties executed the settlement agreement.

In addition, under the terms of the settlement agreement, Wells Fargo has the right to deduct 10 basis points (.0010) from the purchase proceeds of each loan that SecurityNational Mortgage sells to Wells Fargo during the period from April 8, 2011 to March 31, 2017. The amounts deducted by Wells Fargo for the three months ended June 30, 2012 and 2011 were $414,765 and $0, respectively and for the six months ended June 30, 2012 and 2011 were $454,805 and $214,794, respectively, representing 10 basis points from the purchase proceeds of the loans that SecurityNational Mortgage sold to Wells Fargo during that period.

SecurityNational Mortgage is also required under the settlement agreement to set aside 10 basis points (.0010) during the period from April 8, 2011 to March 31, 2017 from the purchase proceeds of any loans that it sells to any mortgage loan purchaser other than Wells Fargo and pay such amounts to Wells Fargo. The amounts deducted by Wells Fargo for the three months ended June 30, 2012 and 2011 were $58,632 and $0, respectively and for the six months ended June 30, 2012 and 2011 were $116,565 and $13,541, respectively, representing 10 basis points from the purchase proceeds of the loans it sold to mortgage loan purchasers other than Wells Fargo during that period.

Finally, SecurityNational Mortgage is required under the settlement agreement to set aside 50% from the net proceeds that it receives from any sale, liquidation or other transfer of certain real estate properties that it owns, after subtracting taxes, commissions, recording fees and other transaction costs. These real estate properties consist of 28 real estate properties with a total book value of $5,597,900 as of June 30, 2012.

In consideration for SecurityNational Mortgage making the initial settlement payment to Wells Fargo, Wells Fargo and related parties, including Wells Fargo Bank, released SecurityNational Mortgage and related parties, including the Company and Security National Life, from any claims, demands, damages, obligations, liabilities, or causes of action relating to residential mortgage loans that Wells Fargo purchased from SecurityNational Mortgage prior to

December 31, 2009. Similarly, SecurityNational Mortgage released Wells Fargo and its related parties from any claims, demands, damages, obligations, liabilities, or causes of actions relating to residential mortgage loans that Wells Fargo purchased from SecurityNational Mortgage prior to December 31, 2009.

As of June 30, 2012, the Company reserved and accrued $3,624,000 to settle investor related claims against SecurityNational Mortgage for the allegedly defective mortgage loans that SecurityNational Mortgage sold to Wells Fargo and other mortgage loan purchasers.

Mortgage Loan Loss Demand

Third Party Investors

There have been assertions in third party investor correspondence that SecurityNational Mortgage sold mortgage loans that allegedly contained misrepresentations or experienced early payment defaults, or that were otherwise allegedly defective or not in compliance with agreements between SecurityNational Mortgage and the third party investors consisting principally of financial institutions. As a result of these claims, third party investors have made demands that SecurityNational Mortgage repurchase certain alleged defective mortgage loans that were sold to such investors or indemnify them against any losses related to such loans.

As of June 30, 2012, third party investors had asserted total potential claims and notices of potential claims relating to mortgage loan repurchases, indemnifications and other issues that are substantially greater than $20,000,000. Additional potential claims and notices of potential claims from third party investors have been made since June 30, 2012. The Company has reserved and accrued $3,624,000 as of June 30, 2012 to settle all such investor related claims.

The total amount of potential claims and notices of potential claims are greater than the net asset value of SecurityNational Mortgage, which was $21,918,000 on June 30, 2012, and its reserve for mortgage loan loss, which was $3,624,000 on June 30, 2012. SecurityNational Mortgage disagrees with the claims and notices of potential claims asserted by third party investors against it and believes it has significant defenses to these claims. Any additional losses in excess of the current loan loss reserve cannot be estimated as SecurityNational Mortgage is currently in the process of reviewing repurchase demands and notices of potential claims from third party investors.

If SecurityNational Mortgage is unable to resolve demands by the third party investors on acceptable terms, legal action may ensue in an effort to obtain amounts that the third party investors claim are allegedly due. In the event of legal action, if SecurityNational Mortgage is not successful in its defenses against claims asserted by these third party investors to the extent that a substantial judgment is entered against SecurityNational Mortgage which is beyond its capacity to pay, SecurityNational Mortgage may be required to curtail or cease operations.

JP Morgan Chase Indemnification Demand

The Company and its wholly-owned subsidiary, SecurityNational Mortgage, received a notice of claim for indemnification relating to mortgage loans that EMC Mortgage, LLC (“EMC Mortgage”) allegedly purchased as a third party investor from SecurityNational Mortgage. The notice was from JP Morgan Chase & Co. (“JP Morgan Chase”) in behalf of EMC Mortgage. According to the notice, the alleged indemnification claims relate to mortgage loans that SecurityNational Mortgage sold to EMC Mortgage under a Mortgage Loan Purchase Agreement, dated December 5, 2005, between SecurityNational Mortgage and EMC. The notice also referenced an Agreement of Guaranty, dated February 23, 2006, by the Company relative to EMC Mortgage. The notice states that EMC Mortgage allegedly purchased mortgage loans from SecurityNational Mortgage, which were later securitized by means of mortgage pass-through certificates.

The notice of indemnification claims from JP Morgan Chase also states that EMC Mortgage has been named in a lawsuit by the Bear Stearns Mortgage Funding Trust 2007-AR2 (the “Trust”), which was filed on September 13, 2011 in the Delaware Court of Chancery. A copy of the complaint and the amended complaint has been provided to the Company by JP Morgan Chase. The amended complaint contends that more than 800 residential mortgage loans that EMC Mortgage sold to the Trust contained breaches of representations and warranties concerning the mortgage loans. The amended complaint also contends that despite EMC Mortgage’s assurance to the Trust that the mortgage loans met certain minimum quality standards, there have been defaults and foreclosures in many of such loans. As a result of the alleged defaults and foreclosures, the amended complaint asserts that EMC

Mortgage is required to repurchase from the Trust any loans in which it breached its representations and warranties, in the amount of the mortgage loans’ outstanding principal balance and all accrued but unpaid interest.

The notice from JP Morgan Chase further states that the Company and SecurityNational Mortgage are required to indemnify EMC Mortgage for any losses arising from the lawsuit against EMC based upon alleged untrue statements of material fact related to information that was provided by SecurityNational Mortgage. The amended complaint includes the loan numbers of the alleged non-complying mortgage loans that EMC Mortgage sold to the Trust. In a letter from JP Morgan Chase accompanying a copy of the amended complaint, JP Morgan Chase asserted that 21 mortgage loans originated by SecurityNational Mortgage were included in the lawsuit as part of the alleged non-complying mortgage loans that EMC allegedly sold to the Trust. Thus, it appears that only a very small percentage of the alleged non-complying mortgage loans that EMC Mortgage sold to the Trust were mortgage loans that SecurityNational Mortgage had sold to EMC.

Moreover, to the extent the claims by the Trust against EMC Mortgage relate to mortgage loans that SecurityNational Mortgage sold to EMC, the Company believes it has defenses to such claims with respect to EMC. For example, neither the Company nor SecurityNational Mortgage is a party to any agreement involving the Trust, nor are they privy to any agreements between EMC Mortgage and the Trust. The Company intends to vigorously defend itself and SecurityNational Mortgage in the event that JP Morgan Chase were to bring any legal action to require the Company or SecurityNational Mortgage to indemnify it for any loss, liability or expense in connection with the lawsuit that the Trust has brought against EMC Mortgage.

Mortgage Loan Loss Litigation

Lehman Brothers - Aurora Loan Services Litigation

On April 15, 2005, SecurityNational Mortgage entered into a loan purchase agreement with Lehman Brothers Bank, FSB (“Lehman Bank”). Under the terms of the loan purchase agreement, Lehman Bank agreed to purchase mortgage loans from time to time from SecurityNational Mortgage. During 2007, Lehman Bank and its wholly owned subsidiary, Aurora Loan Services LLC (“Aurora Loan Services”), purchased a total of 1,490 mortgage loans in the aggregate amount of $352,774,000 from SecurityNational Mortgage. Lehman Bank asserted that certain of the mortgage loans that it purchased from SecurityNational Mortgage during 2007 contained alleged misrepresentations and early payment defaults. As a result of these alleged breaches in the mortgage loans, Lehman Bank contended it had the right to require SecurityNational Mortgage to repurchase certain loans or be liable for losses related to such loans under the loan purchase agreement. SecurityNational Mortgage disagrees with these claims.

On December 17, 2007, SecurityNational Mortgage entered into an Indemnification Agreement with Lehman Bank and Aurora Loan Services. Under the terms of the Indemnification Agreement, SecurityNational Mortgage agreed to indemnify Lehman Bank and Aurora Loan Services for 75% of all losses that Lehman Bank and Aurora Loan Services may incur relative to breaches by mortgagors pertaining to 54 mortgage loans that were purchased from SecurityNational Mortgage. SecurityNational Mortgage was released from any obligation to pay the remaining 25% of such losses. The Indemnification Agreement also required SecurityNational Mortgage to indemnify Lehman Bank and Aurora Loan Services for 100% of any future losses incurred on mortgage loans with breaches that were not among the 54 mortgage loans.

Pursuant to the Indemnification Agreement, SecurityNational Mortgage paid $395,000 to Aurora Loan Services as a deposit into a reserve account, to secure any obligations of SecurityNational Mortgage under the Indemnification Agreement. This deposit was in addition to a $250,000 deposit that SecurityNational Mortgage previously made into the reserve account for a total of $645,000. Losses from mortgage loans with alleged breaches were payable from the reserve account. However, Lehman Bank and Aurora Loan Services were not to apply any funds from the reserve account to a particular mortgage loan until an actual loss had occurred. Under the Indemnification Agreement SecurityNational Mortgage was to pay to Aurora Loan Services each calendar month the difference between the reserve account balance and $645,000, but in no event would SecurityNational Mortgage be required to make payments into the reserve account in excess of $125,000 for any calendar month.

Since the reserve account was established, funds had been paid from the account to indemnify $4,281,000 in alleged losses from 31 mortgage loans that were among the 54 mortgage loans with alleged breaches that were covered by the Indemnification Agreement and ten other mortgage loans with alleged breaches. In the last

monthly billing statement dated April 24, 2011 to SecurityNational Mortgage, Lehman Brothers Holdings Inc. (“Lehman Holdings”) claimed that SecurityNational Mortgage owed approximately $3,745,000 for mortgage loan losses under the Indemnification Agreement.

During 2010 and 2011, the Company recognized alleged losses of $1,289,000 and $500,000, respectively. However, management cannot fully determine the total losses because there may be potential claims for losses that have not yet been determined. As of June 30, 2012, the Company had not accrued for any losses under the Indemnification Agreement. SecurityNational Mortgage was involved in discussions with Lehman Bank and Lehman Holdings concerning issues under the Indemnification Agreement. During the discussion period, monthly payments for December 2010 and January, February, March and April of 2011 totaling $625,000 were abated or deferred.

On May 11, 2011, SecurityNational Mortgage filed a complaint against Aurora Bank FSB, formerly known as Lehman Bank, and Aurora Loan Services in the United States District Court for the District of Utah because it had been unable to resolve certain issues under the Indemnification Agreement. The complaint alleges, among other things, material breach of the Indemnification Agreement, including a claim that neither Lehman Bank nor Aurora Loan Services owned mortgage loans sold by SecurityNational to justify the amount of payments demanded from, and made by SecurityNational Mortgage. As a result, SecurityNational Mortgage claims it is entitled to judgment of approximately $4,000,000 against Lehman Bank, as well as Aurora Loan Services to the extent of its involvement and complicity with Lehman Bank. The complaint also alleges a second claim for material breach of a section of the Indemnification Agreement that contains an alleged “sunset” provision and that the amount of the requested payments made was not justified under the “sunset” provision.

On June 8, 2011, Lehman Holdings, which had filed for bankruptcy in September 2008, filed a complaint against SecurityNational Mortgage in the United States District Court for the District of Utah. A Lehman Holdings’ subsidiary owns Lehman Bank. The complaint alleges that SecurityNational Mortgage sold loans to Lehman Bank, which were then sold to Lehman Holdings. The complaint additionally alleges that Lehman Bank and Aurora Loan Services assigned their rights and remedies under the loan purchase agreement, as well as the Indemnification Agreement to Lehman Holdings, which latter assignment purportedly took place on March 28, 2011. Lehman Holdings declared in a letter dated June 2, 2011 that the Indemnification Agreement was null and void, which is disputed by SecurityNational Mortgage.

Lehman Holdings’ alleged claims are for damages for breach of contract and breach of warranty pursuant to a loan purchase agreement and Seller’s Guide. Based on claiming that the Indemnification Agreement is null and void pursuant to its lawsuit, Lehman Holdings has initially claimed damages of approximately $5,041,000. Prior to declaring the Indemnification Agreement null and void, Lehman Holdings claimed in a then recent billing statement under the terms of the Indemnification Agreement, that SecurityNational Mortgage owed approximately $3,745,000 for mortgage loan losses under the Indemnification Agreement. SecurityNational Mortgage strongly disagrees with the position of Lehman Holdings and, as set forth in its May 11, 2011 complaint, seeks affirmative relief of approximately $4,000,000 from Lehman Bank and Aurora Loan Services, which are related to Lehman Holdings.

Other Contingencies and Commitments

The Company has entered into commitments to fund new residential construction loans. As of June 30, 2012, the Company’s commitments were $8,179,000 for these loans of which $5,337,000 had been funded. The Company will advance funds once the work has been completed and an independent inspection is made. The maximum loan commitment ranges between 50% and 80% of appraised value. The Company receives fees from the borrowers and the interest rate is generally 2% to 6.75% over the bank prime rate (3.25% as of June 30, 2012). Maturities range between six and twelve months.

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

- Definition

The entire disclosure for commitments and contingencies.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 20
-Section 50
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-URI http://asc.fasb.org/extlink&oid=6449706&loc=d3e16207-108621

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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

13) Acquisitions

6 Months Ended

Jun. 30, 2012

Notes

13) Acquisitions

On August 31, 2011 the Company entered into a stock purchase agreement with North America Life to purchase all of the outstanding shares of common stock of Trans-Western Life Insurance Company (“Trans-Western”), a Texas domiciled insurance company and a wholly-owned subsidiary of North America Life. The Company completed the Stock Purchase Agreement on May 2, 2012. Purchase consideration paid was $494,207 which was the capital and surplus of Trans-Western at May 2, 2012. The Stock Purchase Agreement was approved by the Texas Insurance Department on March 20, 2012. All of Trans-Western’s insurance business had been ceded to North America Life, of which approximately 47% of the insurance in force had been assumed by the Company under the Coinsurance Agreement explained in note 12. As part of the stock purchase agreement, the Company recaptured the 47% of insurance in force.

The estimated fair values of the assets acquired and the liabilities assumed at the date of acquisition were as follows:


Cash	$313,616
Receivables, net	186,487
Receivable from reinsurers	7,422,999
Total assets acquired	7,923,102
Future life, annuity, and other benefits	(7,422,999)
Other liabilities and accrued expenses	(5,896)
Total liabilities assumed	(7,428,895)
Fair value of net assets acquired	$494,207

The following unaudited pro forma information has been prepared to present the results of operations of the Company assuming the acquisition of Trans-Western had occurred at the beginning of the six month periods ended June 30, 2012 and 2011. This pro forma information is supplemental and does not necessarily present the operations of the Company that would have occurred had the acquisition occurred on those dates and may not reflect the operations that will occur in the future:

		For the Six Months Ended June 30, (unaudited)
		2012		2011
Total revenues	$	103,859,760	$	70,666,913
Net earnings	$	5,256,652	$	(302,965)
Net earnings per Class A equivalent common share	$	0.55	$	0.03)
Net earnings per Class A equivalent common share
assuming dilution	$	0.54	$	(0.03)

1) Basis of Presentation: Accounting Policy (Policies)	6 Months Ended
1) Basis of Presentation: Accounting Policy (Policies)	Jun. 30, 2012
Policies
Accounting Policy	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 Articles 8 and 10 of Regulation S X. Accordingly, they do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America for complete financial statements. These financial statements should be read in conjunction with the consolidated financial statements of the Company and notes thereto for the year ended December 31, 2011, included in the Company’s Annual Report on Form 10-K (file number 000-09341). In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012.

1) Basis of Presentation: Use of Estimates Policy (Policies)

6 Months Ended

Jun. 30, 2012

Policies

Use of Estimates Policy

3) Investments: Held-to-maturity Securities (Tables)

6 Months Ended

Jun. 30, 2012

3) Investments: Available-for-sale Securities (Details) - USD ($)	Jun. 30, 2012	Dec. 31, 2011
AvailableForSaleSecuritiesAmortizedCost	$ 6,861,042
AvailableForSaleSecuritiesEstimatedFairValue	5,882,433
Mortgage loans on real estate and construction	97,975,694	$ 115,155,967
Mortgage loans on real estate and construction, allowance for losses	(4,699,410)	(4,881,173)
Real estate held for investment, net of depreciation	4,272,796	3,786,780
Other real estate owned, held for investment, net of depreciation	56,127,842	46,398,095
Other real estate owned held for sale	5,998,740	5,793,900
Real estate held	66,399,378	55,978,775
Loans Held-for-sale, Consumer, Installment, Student	17,818,019	18,463,277
Short-term investments at amortized cost	5,562,045	6,932,023
Residential Mortgage
Mortgage loans on real estate and construction	52,498,871	54,344,327
Residential Construction
Mortgage loans on real estate and construction	9,085,386	17,259,666
Commercial Loan
Mortgage loans on real estate and construction	41,090,847	48,433,147
Nonredeemable Preferred Stock
AvailableForSaleSecuritiesAmortizedCost	20,281	20,281
AvailableForSaleSecuritiesGrossUnrealizedLosses	(1,797)	(1,843)
AvailableForSaleSecuritiesEstimatedFairValue	18,484	18,438
Industrial, miscellaneous and all other equity securities
AvailableForSaleSecuritiesAmortizedCost	6,840,761	7,250,991
AvailableforsaleSecuritiesGrossUnrealizedGain	378,015	363,387
AvailableForSaleSecuritiesGrossUnrealizedLosses	(1,354,827)	(1,333,424)
AvailableForSaleSecuritiesEstimatedFairValue	5,863,949	6,280,954
Equity Securities
AvailableForSaleSecuritiesAmortizedCost	6,861,042	7,271,272
AvailableforsaleSecuritiesGrossUnrealizedGain	378,015	363,387
AvailableForSaleSecuritiesGrossUnrealizedLosses	(1,356,624)	(1,335,267)
AvailableForSaleSecuritiesEstimatedFairValue	5,882,433	$ 6,299,392
Common Stock
AvailableForSaleSecuritiesAmortizedCost	6,840,761
AvailableForSaleSecuritiesEstimatedFairValue	$ 5,863,949

3) Investments: Schedule of Unrealized Loss on Investments (Details)	Jun. 30, 2012 USD ($)	Dec. 31, 2011 USD ($)
HeldToMaturitySecuritiesUnrecognizedHoldingLoss	$ 1,617,809	$ 2,767,402
HeldToMaturitySecuritiesFairValue	18,935,380	28,012,425
AvailableForSaleSecuritiesFairValueDisclosure	3,219,657	3,417,611
US States and Political Subdivisions Debt Securities
HeldToMaturitySecuritiesUnrecognizedHoldingLoss	6,560	13,156
Corporate Debt Securities
HeldToMaturitySecuritiesUnrecognizedHoldingLoss	1,409,269	2,268,146
Collateralized Mortgage Backed Securities
HeldToMaturitySecuritiesUnrecognizedHoldingLoss	193,980	356,900
Redeemable Preferred Stock
HeldToMaturitySecuritiesUnrecognizedHoldingLoss	8,000	129,200
Nonredeemable Preferred Stock
AvailableForSaleSecuritiesGrossUnrealizedLosses	1,797	1,843
Industrial, miscellaneous and all other equity securities
AvailableForSaleSecuritiesGrossUnrealizedLosses	1,354,827	1,333,424
Equity Securities
AvailableForSaleSecuritiesGrossUnrealizedLosses	1,356,624	1,335,267
Less than 12 months
HeldToMaturitySecuritiesUnrecognizedHoldingLoss	$ 652,219	$ 1,706,324
No. of Investment Positions	23	51
HeldToMaturitySecuritiesFairValue	$ 10,581,908	$ 24,249,533
AvailableForSaleSecuritiesFairValueDisclosure	$ 2,213,889	$ 2,857,082
Less than 12 months \| US States and Political Subdivisions Debt Securities
No. of Investment Positions	0	0
Less than 12 months \| Corporate Debt Securities
HeldToMaturitySecuritiesUnrecognizedHoldingLoss	$ 598,070	$ 1,544,224
No. of Investment Positions	22	47
Less than 12 months \| Collateralized Mortgage Backed Securities
HeldToMaturitySecuritiesUnrecognizedHoldingLoss	$ 54,149	$ 161,300
No. of Investment Positions	1	3
Less than 12 months \| Redeemable Preferred Stock
HeldToMaturitySecuritiesUnrecognizedHoldingLoss		$ 800
No. of Investment Positions		1
Less than 12 months \| Nonredeemable Preferred Stock
No. of Investment Positions	1
AvailableForSaleSecuritiesGrossUnrealizedLosses	$ 213	$ 0
Less than 12 months \| Industrial, miscellaneous and all other equity securities
No. of Investment Positions	61	79
AvailableForSaleSecuritiesGrossUnrealizedLosses	$ 582,951	$ 955,400
Less than 12 months \| Equity Securities
No. of Investment Positions	62	79
AvailableForSaleSecuritiesGrossUnrealizedLosses	$ 583,164	$ 955,400
More than 12 months
HeldToMaturitySecuritiesUnrecognizedHoldingLoss	$ 965,590	$ 1,061,078
No. of Investment Positions	23	16
HeldToMaturitySecuritiesFairValue	$ 8,353,472	$ 3,762,892
AvailableForSaleSecuritiesFairValueDisclosure	1,005,768	560,529
More than 12 months \| US States and Political Subdivisions Debt Securities
HeldToMaturitySecuritiesUnrecognizedHoldingLoss	$ 6,560	$ 13,156
No. of Investment Positions	2	2
More than 12 months \| Corporate Debt Securities
HeldToMaturitySecuritiesUnrecognizedHoldingLoss	$ 811,199	$ 723,922
No. of Investment Positions	17	12
More than 12 months \| Collateralized Mortgage Backed Securities
HeldToMaturitySecuritiesUnrecognizedHoldingLoss	$ 139,831	$ 195,600
No. of Investment Positions	3	1
More than 12 months \| Redeemable Preferred Stock
HeldToMaturitySecuritiesUnrecognizedHoldingLoss		$ 128,400
No. of Investment Positions		1
More than 12 months \| Nonredeemable Preferred Stock
No. of Investment Positions	1	2
AvailableForSaleSecuritiesGrossUnrealizedLosses	$ 1,584	$ 1,843
More than 12 months \| Industrial, miscellaneous and all other equity securities
No. of Investment Positions	30	14
AvailableForSaleSecuritiesGrossUnrealizedLosses	$ 771,876	$ 378,024
More than 12 months \| Equity Securities
No. of Investment Positions	31	16
AvailableForSaleSecuritiesGrossUnrealizedLosses	$ 773,460	$ 379,867

3) Investments (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
3) Investments (Details) - USD ($)	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Average market value over amortized cost	92.10%		92.10%		91.00%
Other than Temporary Impairment, Credit Losses Recognized in Earnings, Period Increase (Decrease)			$ 90,000	$ 65,129
Average Market Value of Security over initial investment	71.90%		71.90%
NetInvestmentIncome	$ 6,137,898	$ 4,717,358	$ 12,191,945	8,987,806
Securities on deposit for regulatory authorities	9,624,656		9,624,656		$ 9,593,318
Mortgage loans on real estate balances, net of allowance for losses	$ 4,699,410		4,699,410		4,881,173
Minimum
Mortgage Loan, Interest Rate	2.00%
Maximum
Mortgage Loan, Interest Rate	10.50%
Cemeteries and mortuaries
NetInvestmentIncome			168,989	$ 170,649
Categories of Investments, Marketable Securities, Held-to-maturity Securities
Net carrying amount for sales of securities			341,173		12,341,156
Net realized gain related to sales of securities			$ 7,242		$ 462,267

3) Investments: Schedule of Allowance for loan losses as a contra-asset account (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2012	Dec. 31, 2011
FinancingReceivableAllowanceForCreditLosses	$ 4,881,173	$ 7,070,442
Allowance for credit losses, Charge-offs	(418,678)	(3,424,989)
Allowance for credit losses, Provision	236,915	1,235,720
FinancingReceivableAllowanceForCreditLosses	4,699,410	4,881,173
FinancingReceivableAllowanceForCreditLossesIndividuallyEvaluatedForImpairment1	1,074,253	989,499
FinancingReceivableIndividuallyEvaluatedForImpairment	11,959,118	13,016,095
Mortgage loans	102,675,104	120,037,140
FinancingReceivableCollectivelyEvaluatedForImpairment	90,715,986	107,021,045
FinancingReceivableAllowanceForCreditLossesCollectivelyEvaluatedForImpairment		3,891,674
Commercial Loan
FinancingReceivableIndividuallyEvaluatedForImpairment	2,842,962	2,758,235
Mortgage loans	41,090,847	48,433,147
FinancingReceivableCollectivelyEvaluatedForImpairment	38,247,885	45,674,912
Residential Mortgage
FinancingReceivableAllowanceForCreditLosses	4,338,805	6,212,072
Allowance for credit losses, Charge-offs	(168,154)	(2,994,715)
Allowance for credit losses, Provision	236,915	1,121,448
FinancingReceivableAllowanceForCreditLosses	4,407,566	4,338,805
FinancingReceivableAllowanceForCreditLossesIndividuallyEvaluatedForImpairment1	885,968	738,975
FinancingReceivableIndividuallyEvaluatedForImpairment	5,403,395	4,611,995
Mortgage loans	52,498,871	54,344,327
FinancingReceivableCollectivelyEvaluatedForImpairment	47,095,476	49,732,332
FinancingReceivableAllowanceForCreditLossesCollectivelyEvaluatedForImpairment		3,599,830
Residential Construction
FinancingReceivableAllowanceForCreditLosses	542,368	858,370
Allowance for credit losses, Charge-offs	(250,524)	(430,274)
Allowance for credit losses, Provision		114,272
FinancingReceivableAllowanceForCreditLosses	291,844	542,368
FinancingReceivableAllowanceForCreditLossesIndividuallyEvaluatedForImpairment1	188,285	250,524
FinancingReceivableIndividuallyEvaluatedForImpairment	3,712,761	5,645,865
Mortgage loans	9,085,386	17,259,666
FinancingReceivableCollectivelyEvaluatedForImpairment	$ 5,372,625	11,613,801
FinancingReceivableAllowanceForCreditLossesCollectivelyEvaluatedForImpairment		$ 291,844

3) Investments: Schedule of loan loss reserve which is included in other liabilities and accrued expenses (Details) - USD ($)	Jun. 30, 2012	Dec. 31, 2011
Loan loss reserve, Provisions for losses	$ 1,535,315	$ 1,667,805
Loan loss reserve, Charge-offs	$ (249,370)	$ (5,228,955)

4) Stock-based Compensation (Details) - USD ($)	3 Months Ended		6 Months Ended
4) Stock-based Compensation (Details) - USD ($)	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
EmployeeServiceShareBasedCompensationAllocationOfRecognizedPeriodCostsCapitalizedAmount	$ 47,218	$ 64,344	$ 94,436	$ 128,688
Deferred tax credits recognized related to compensation expense	16,054	$ 21,877	$ 32,108	$ 43,754
Options granted April 13, 2012	205,175
Options granted December 2, 2011	205,175
Options granted December 3, 2010	$ 257,376

Note 8: Fair Value of Financial Instruments: Schedule of Fair Value Measurements, Nonrecurring (Details) - USD ($)	Jun. 30, 2012	Dec. 31, 2011
Assets accounted for at fair value on non-recurring basis
Mortgage loans on real estate	$ 3,599,000	$ 5,354,600
AssetsFairValueDisclosureNonrecurring	3,599,000	11,287,703
Fair Value, Inputs, Level 3
Assets accounted for at fair value on non-recurring basis
Mortgage loans on real estate	3,599,000	5,354,600
AssetsFairValueDisclosureNonrecurring	$ 3,599,000	$ 11,287,703

9) Other Business Activity (Details) - USD ($)	6 Months Ended
9) Other Business Activity (Details) - USD ($)	Jun. 30, 2012	Jun. 30, 2011
Mortgages originated and sold	$ 1,034,903,000	$ 570,664,000
Amount available to originate loans under this agreement	55,000,000
Mortgage loans in which settlements with third party investors were still pending	$ 165,347,000

11) Derivative Investments: Schedule of Derivative Assets at Fair Value (Details) - USD ($)	Jun. 30, 2012	Dec. 31, 2011
Fair Value of Asset Derivatives, Interest rate lock and forward sales commitments	$ 5,218,290	$ 1,904,901
Fair Value of Liability Derivatives, Interest rate lock and forward sales commitments	618,858	210,360
Fair Value of Liability Derivatives, Call Options	71,865	80,102
Fair Value of Liability Derivatives, Interest Rate Swaps	107,779	117,812
Fair Value of Asset Derivatives, Total	5,218,290	1,904,901
Fair Value of Liability Derivatives, Total	$ 798,502	$ 408,274

13) Acquisitions: Estimated fair values of the assets acquired and the liabilities assumed (Details)	Aug. 31, 2011 USD ($)
Estimated fair value of Cash	$ 313,616
Estimated fair value of Receivables, Net	186,487
Estimated fair value of Receivable from reinsurers	7,923,102
Estimated fair value of Future life, annuity, and other benefits	(7,422,999)
Estimated fair value of Other liabilities and accrued expensesbenefits	(5,896)
Estimated fair value of Total liabilities assumed	(7,428,895)
Estimated fair value of net assets aquired	$ 494,207

13) Acquisitions: Unaudited pro forma (Details) - USD ($)	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
ProForma Revenues	$ 103,859,760	$ 70,666,913
ProForma Net Earnings	5,256,652	$ (302,965)
ProForma Net Earnings per Class A equivalent common share	$ 0.55
ProForma Net Earnings per Class A equivalent common share assuming dilution	$ 0.54	$ (0.03)

Label	Element	Value
Cash and cash equivalents at beginning of period	us-gaap_CashEquivalentsAtCarryingValue	$ 45,476,876
Cash and cash equivalents at beginning of period	us-gaap_CashEquivalentsAtCarryingValue	37,779,839
Loan loss reserve, balance at start of period	fil_LoanLossReserve	5,899,025
Loan loss reserve, balance at start of period	fil_LoanLossReserve	3,623,820
Loan loss reserve, balance at start of period	fil_LoanLossReserve	$ 2,337,875