	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
September 30, 2011:
Fixed maturity securities held to maturity carried at amortized cost:
Bonds:
U.S. Treasury securities and obligations of U.S. Government agencies	$	2,824,482	$	555,167	$	-		$	3,379,649

Obligations of states and political subdivisions		3,177,033		311,964		(19,720	)		3,469,277

Corporate securities including public utilities		120,813,476		11,054,450		(2,228,137	)		129,639,789

Mortgage-backed securities		6,668,049		369,057		(307,914	)		6,729,192

Redeemable preferred stock		1,502,053		57,136		(122,638	)		1,436,551

Total fixed maturity securities held to maturity	$	134,985,093	$	12,347,774	$	(2,678,409	)	$	144,654,458

	Amortized Cost			Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
September 30, 2011:

Equity securities available for sale at estimated fair value:

Non-redeemable preferred stock	$	20,281		$	-	$	(2,801	)	$	17,480

Common stock:

Industrial, miscellaneous and all other		7,456,982			215,517		(1,782,063	)		5,890,436

Total equity securities available for sale at estimated fair value	$	7,477,263		$	215,517	$	(1,784,864	)	$	5,907,916

Mortgage loans on real estate and construction loans held for investment at amortized cost:
Residential	$	57,244,340
Residential construction		19,980,238
Commercial		41,554,343
Less: Allowance for loan losses		(6,606,457	)
Total mortgage loans on real estate and construction loans held for investment	$	112,172,464

Real estate held for investment - net of depreciation	$	3,871,845
Other real estate owned held for investment - net of depreciation		46,226,585
Other real estate owned held for sale		5,793,900
Total real estate	$	55,892,330

Policy and other loans at amortized cost - net of allowance for doubtful accounts	$	16,718,099

Short-term investments at amortized cost	$	4,040,671

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
December 31, 2010:
Fixed maturity securities held to maturity
carried at amortized cost:
Bonds:
U.S. Treasury securities
and obligations of U.S
Government agencies	$	2,855,303	$	325,935	$	-		$	3,181,238

Obligations of states and
political subdivisions		1,773,904		122,565		(18,574	)		1,877,895

Corporate securities including
public utilities		85,354,245		6,626,582		(716,007	)		91,264,820

Mortgage-backed securities		6,469,942		239,719		(654,959	)		6,054,702

Redeemable preferred stock		1,594,622		27,158		(32,171	)		1,589,609
Total fixed maturity
securities held to maturity	$	98,048,016	$	7,341,959	$	(1,421,711	)	$	103,968,264

	Amortized Cost			Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
December 31, 2010:

Equity securities available for sale at estimated fair value:

Non-redeemable preferred stock	$	20,282		$	-	$	(4,224	)	$	16,058

Common stock:

Industrial, miscellaneous and all other		6,418,151			707,798		(357,364	)		6,768,585

Total equity securities available for sale at estimated fair value	$	6,438,433		$	707,798	$	(361,588	)	$	6,784,643

Mortgage loans on real estate and construction loans held for investment at amortized cost:
Residential	$	60,285,273
Residential construction		18,436,495
Commercial		24,502,781
Less: Allowance for loan losses		(7,070,442	)
Total mortgage loans on real estate and construction loans held for investment	$	96,154,107

Real estate held for investment - net of depreciation	$	3,996,777
Other real estate owned held for investment - net of depreciation		44,422,829
Other real estate owned held for sale		5,086,400
Total real estate	$	53,506,006

Policy and other loans at amortized cost - net of allowance for doubtful accounts	$	17,044,897

Short-term investments at amortized cost	$	2,618,349

The following tables summarize unrealized losses on fixed-maturity securities, which are carried at amortized cost, at September 30, 2011 and December 31, 2010. 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 September 30, 2011
Obligations of states and political subdivisions	$	-		0	$	19,720		3	$	19,720
Corporate securities including public utilities		1,613,641		46		614,496		12		2,228,137
Mortgage-backed securities		197,721		3		110,193		1		307,914
Redeemable preferred stock		1,000		1		121,638		1		122,638
Total unrealized losses	$	1,812,362		50	$	866,047		17	$	2,678,409
Fair Value	$	26,496,891			$	4,141,109			$	30,638,000

At December 31, 2010
Obligations of states and political subdivisions	$	-		0	$	18,574		3	$	18,574
Corporate securities including public utilities		70,934		10		645,073		25		716,007
Mortgage-backed securities		8,971		2		645,988		3		654,959
Redeemable preferred stock		4,022		4		28,149		1		32,171
Total unrealized losses	$	83,927		16	$	1,337,784		32	$	1,421,711
Fair Value	$	4,527,041			$	10,037,150			$	14,564,191

As of September 30, 2011 and December 31, 2010, the average fair value of the related fixed maturities was 92.0% and 91.1%, respectively, of amortized cost. During the nine months ended September 30, 2011 and for the year ended December 31, 2010, an other-than-temporary decline in fair value resulted in the recognition of an impairment loss on fixed maturity securities of $95,129 and $150,059, 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 September 30, 2011 and December 31, 2010.

The following tables summarize unrealized losses on equity securities that were carried at estimated fair value based on quoted trading prices at September 30, 2011 and December 31, 2010. 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 September 30, 2011
Non-redeemable preferred stock	$	-		0	$	2,801		2	$	2,801
Industrial, miscellaneous and all other		1,345,141		101		436,922		14		1,782,063
Total unrealized losses	$	1,345,141		101	$	439,723		16	$	1,784,864
Fair Value	$	3,560,006			$	480,630			$	4,040,636

At December 31, 2010
Non-redeemable preferred stock	$	-		-	$	4,224		2	$	4,224
Industrial, miscellaneous and all other		192,742		42		164,622		13		357,364
Total unrealized losses	$	192,742		42	$	168,846		15	$	361,588
Fair Value	$	1,895,632			$	530,253			$	2,425,885

As of September 30, 2011 and December 31, 2010, the average fair value of the equity securities available-for-sale was 69.4% and 87.0%, respectively, of the original investment. 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 nine months ended September 30, 2011 and for the year ended December 31, 2010, an other-than-temporary decline in fair value resulted in the recognition of an impairment loss on equity securities of $0 and $23,922, respectively.

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 September 30, 2011 and December 31, 2010.

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.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Fixed maturity securities held
to maturity:
Gross realized gains	$	80,069		$	862,457		$	400,026		$	1,158,469
Gross realized losses		(11,086	)		(259,445	)		(142,907	)		(482,369	)
Other than temporary impairments		(30,000	)		(30,000	)		(95,129	)		(60,000	)

Securities available for sale:
Gross realized gains		48,680			64,337			503,804			512,329
Gross realized losses		(30	)		(12,323	)		(34,834	)		(55,396	)
Other than temporary impairments		-			-			-			-

Other assets:
Gross realized gains		146,253			122,796			1,182,905			394,539
Gross realized losses		(37,406	)		(29,376	)		(79,858	)		(95,209	)
Other than temporary impairments		-			-			-			-
Total	$	196,480		$	718,446		$	1,734,007		$	1,372,363

Generally gains and losses from held-to-maturity securities are a result of early calls and related amortization of premiums or discounts. However, credit losses of $30,000 and $30,000 were recognized during the three months ended September 30, 2011 and 2010, respectively from other-than-temporary declines in fair value of held-to-maturity securities. The Company currently holds a collateralized mortgage obligation for which the value carries a significant degree of uncertainty. In order to exercise conservatism related to the carrying value of this collateralized mortgage obligation, the Company is currently recognizing an impairment of $10,000 per month.

The net carrying amount of held-to-maturity securities sold was $4,715,412 and $16,220,943 for the nine months ended September 30, 2011 and the year ended December 31, 2010, respectively. The net realized gain related to these sales was $68,370 and $346,225 for the nine months ended September 30, 2011 and the year ended December 31, 2010, respectively. Certain circumstances lead to these decisions to sell. Bonds categorized as held-to-maturity and sold in 2010 were liquidated in order to meet an unexpected increase in mortgage funding demand and the non-renewal of an expired loan purchase agreement with a warehouse bank by SecurityNational Mortgage during the latter part of 2010. The expired loan purchase agreement was renewed in December 2010 for a one year term. This was a rare and unusual event in the history of the Company. In 2011, the Company sold certain held-to-maturity bonds in gain positions to offset the loss incurred by selling some high risk residential mortgage backed securities.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Fixed maturity securities	$	2,033,778		$	1,718,143		$	5,773,035		$	5,258,146
Equity securities		70,494			61,274			197,480			174,017
Mortgage loans on real estate		1,894,780			1,350,728			4,881,213			4,349,326
Real estate		484,289			453,281			1,496,912			1,221,181
Policy and other loans		195,940			227,785			619,972			673,205
Short-term investments, principally gains on sale of mortgage loans and other		1,577,446			2,121,763			4,423,576			5,768,879
Gross investment income		6,256,727			5,932,974			17,392,188			17,444,754
Investment expenses		(1,149,137	)		(1,543,264	)		(3,296,792	)		(3,760,558	)
Net investment income	$	5,107,590		$	4,389,710		$	14,095,396		$	13,684,196

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 September 30, 2011, the Company had 34%, 13% and 10% 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 $6,606,457 and $7,070,442 at September 30, 2011 and December 31, 2010, respectively.

Allowance for Credit Losses and Recorded Investment in Mortgage Loans

	Commercial		Residential			Residential Construction			Total
September 30, 2011
Allowance for credit losses:
Beginning balance - January 1, 2011	$	-	$	6,212,072		$	858,370		$	7,070,442
Charge-offs		-		(399,444	)		(321,879	)		(721,323	)
Provision		-		257,338			-			257,338
Ending balance - September 30, 2011	$	-	$	6,069,966		$	536,491		$	6,606,457

Ending balance: individually evaluated for impairment	$	-	$	5,234,099		$	418,121		$	5,652,220

Ending balance: collectively evaluated for impairment	$	-	$	835,867		$	118,370		$	954,237

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

Mortgage loans:
Ending balance	$	41,554,343	$	57,244,340		$	19,980,238		$	118,778,921

Ending balance: individually evaluated for impairment	$	-	$	8,625,864		$	7,975,046		$	16,600,910

Ending balance: collectively evaluated for impairment	$	41,554,343	$	48,618,476		$	12,005,192		$	102,178,011

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

December 31, 2010
Allowance for credit losses:
Beginning balance - January 1, 2010	$	-	$	5,917,792		$	891,011		$	6,808,803
Charge-offs		-		(335,853	)		(32,641	)		(368,494	)
Provision		-		630,133			-			630,133
Ending balance - December 31, 2010	$	-	$	6,212,072		$	858,370		$	7,070,442

Ending balance: individually evaluated for impairment	$	-	$	5,131,779		$	740,000		$	5,871,779

Ending balance: collectively evaluated for impairment	$	-	$	1,080,293		$	118,370		$	1,198,663

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

Mortgage loans:
Ending balance	$	24,502,781	$	60,285,273		$	18,436,495		$	103,224,549

Ending balance: individually evaluated for impairment	$	-	$	7,236,095		$	2,085,467		$	9,321,562

Ending balance: collectively evaluated for impairment	$	24,502,781	$	53,049,178		$	16,351,028		$	93,902,987

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

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
September 30, 2011
Commercial	$	-	$	-	$	1,053,500	$	2,758,580	$	3,812,080	$	37,742,263	$	41,554,343	$	-		$	41,554,343
Residential		2,847,427		1,065,211		4,250,800		8,625,864		16,789,302		40,455,038		57,244,340		(6,069,966	)		51,174,374
Residential Construction		-		-		1,006,890		7,975,046		8,981,936		10,998,302		19,980,238		(536,491	)		19,443,747

Total	$	2,847,427	$	1,065,211	$	6,311,190	$	19,359,490	$	29,583,318	$	89,195,603	$	118,778,921	$	(6,606,457	)	$	112,172,464

December 31, 2010
Commercial	$	-	$	734,756	$	-	$	439,794	$	1,174,550	$	23,328,231	$	24,502,781	$	-		$	24,502,781
Residential		767,970		782,174		3,537,616		7,236,095		12,323,855		47,961,418		60,285,273		(6,212,072	)		54,073,201
Residential Construction		849,375		1,543,593		994,046		2,085,467		5,472,481		12,964,014		18,436,495		(858,370	)		17,578,125

Total	$	1,617,345	$	3,060,523	$	4,531,662	$	9,761,356	$	18,970,886	$	84,253,663	$	103,224,549	$	(7,070,442	)	$	96,154,107

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

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
September 30, 2011
With no related allowance recorded:
Commercial	$	3,812,080	$	3,812,080	$	-	$	3,812,080	$	-
Residential		4,250,800		4,250,800		-		4,250,800		-
Residential construction		1,006,890		1,006,890		-		1,006,890		-

With an allowance recorded:
Commercial	$	-	$	-	$	-	$	-	$	-
Residential		8,625,864		8,625,864		5,234,099		8,625,864		-
Residential construction		7,975,046		7,975,046		418,121		7,975,046		-

Total:
Commercial	$	3,812,080	$	3,812,080	$	-	$	3,812,080	$	-
Residential		12,876,664		12,876,664		5,234,099		12,876,664		-
Residential construction		8,981,936		8,981,936		418,121		8,981,936		-

December 31, 2010
With no related allowance recorded:
Commercial	$	439,794	$	439,794	$	-	$	439,794	$	-
Residential		3,537,616		3,537,616		-		3,537,616		-
Residential construction		994,046		994,046		-		994,046		-

With an allowance recorded:
Commercial	$	-	$	-	$	-	$	-	$	-
Residential		7,236,095		7,236,095		5,131,779		7,236,095		-
Residential construction		2,085,467		2,085,467		740,000		2,085,467		-

Total:
Commercial	$	439,794	$	439,794	$	-	$	439,794	$	-
Residential		10,773,711		10,773,711		5,131,779		10,773,711		-
Residential construction		3,079,513		3,079,513		740,000		3,079,513		-

Mortgage Loan Credit Exposure
Credit Risk Profile Based on Payment Activity

	Commercial				Residential				Residential Construction				Total
	September 30, 2011		December 31, 2010		September 30, 2011		December 31, 2010		September 30, 2011		December 31, 2010		September 30, 2011		December 31, 2010

Performing	$	37,742,263	$	24,062,987	$	44,367,676	$	49,511,562	$	10,998,302	$	15,356,982	$	93,108,241	$	88,931,531
Nonperforming		3,812,080		439,794		12,876,664		10,773,711		8,981,936		3,079,513		25,670,680		14,293,018

Total	$	41,554,343	$	24,502,781	$	57,244,340	$	60,285,273	$	19,980,238	$	18,436,495	$	118,778,921	$	103,224,549

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 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. 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.