SNFC - Security National Financial Corporation

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Shareholders

My Fellow Shareholders:

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George Quist

Founder
Chief Executive Officer
Chairman of the Board

I am pleased to report to you on the affairs of the Company for the year ended December 31, 2006 and invite you to attend the annual stockholders meeting to be held on July 13, 2007 in Salt Lake City, Utah.

The year 2006 was marked by significant milestones for our Company. Some selected financial statistics and results are illustrative: Earnings per share increased 45% to $.74 per share. Total revenue increased 17% over 2005 levels to $152,531,000, which was a little below our five year average revenue growth rate of 20%. Stockholders equity as calculated, in conformity with accounting principles generally accepted in the United States of America, moved past the $50,000,000 mark for the first time to $52,971,000 and book value per share, using weighted average outstanding common shares rose 7% to $7.53.

Our Memorial operations performed well under the direction of Robert Quist in his first year as President of that group, realizing a 16% growth in revenue to $14,043,000 which resulted in a 43% growth in profitability (exclusive of realized gains on assets sold) to $602,000.

Our Life Insurance segment used 2006 as the year to improve the quality of life sales which resulted in a profitability increase of 60% to $4,471,000 on a pre-tax basis on a revenue increase of nearly 14% to $49,624,000. The acquisition of Memorial Insurance Company of America, which was accomplished last year, appears to be tracking as expected and contributed to the increased profitability this year.

Our Mortgage Operations saw a 30% decrease in profitability on an 18% increase in revenue. Continuing in 2006 we have expanded our operations in the face of a declining market. The mortgage market has been characterized by great consolidation over the last several years with many capable people losing their positions. While expensive in the short run, by hiring such people in well placed locations, we continue to build our branch organization and believe it will pay good dividends in the future. We now operate in 34 wholesale and retail branches located in 16 states.

Thank you for your confidence in our company. We continue in our efforts to both grow and increase in profitability.

Annual Reports