UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to ____________

Commission File No. 000-16867

 
UTG, INC.
 
 
(Exact name of registrant as specified in its charter)
 
     
Delaware
 
20-2907892
(State or other jurisdiction of
 
(I.R.S. Employer
incorporation or organization)
 
Identification No.)
     
 
205 North Depot Street
 
 
Stanford, KY 40484
 
 
(Address of principal executive offices) (Zip Code)
 

Registrant’s telephone number, including area code: (217) 241-6300

Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
Name of each exchange on which registered
       None
                             None

Securities registered pursuant to Section 12(g) of the Act:

Title of class
Common Stock, stated value $.001 per share

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes   No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company.  See the definitions of “large accelerated filer,” accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer
Accelerated filer
 
 
Non-accelerated filer 
Smaller reporting company
 
 
 
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes     No
 
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

The number of shares outstanding of the registrant’s common stock as of April 30, 2024 was 3,169,527.


UTG, Inc.
(The “Company”)

TABLE OF CONTENTS

Part I.   Financial Information
4
Item 1.  Financial Statements
4
Condensed Consolidated Balance Sheets
4
Condensed Consolidated Statements of Operations
5
Condensed Consolidated Statements of Comprehensive Income (Loss)
6
Condensed Consolidated Statements of Shareholders’ Equity
7
Condensed Consolidated Statements of Cash Flows
9
Notes to Condensed Consolidated Financial Statements
10
Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations
25
Item 4.  Controls and Procedures
33
 
Part II.  Other Information
 
33
Item 1.  Legal Proceedings
33
Item 1A. Risk Factors
33
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds
33
Item 3.  Defaults Upon Senior Securities
33
Item 4.  Mine Safety Disclosures
33
Item 5.  Other Information
33
Item 6.  Exhibits
33
 
Signatures
 
34


Part 1.   Financial Information.
Item 1.  Financial Statements.

UTG, Inc.

Condensed Consolidated Balance Sheets (Unaudited)

 
March 31, 2024
   
December 31, 2023*
 
ASSETS
 
Investments:
           
Investments, available for sale:
           
Fixed maturities, at fair value (amortized cost $104,570,183 and $109,554,738)
 
$
96,982,142
   
$
103,409,836
 
    Held to maturity redeemable preferred stock, at amortized cost
   
2,500,000
     
2,500,000
 
    Equity securities, at fair value (cost $89,136,650 and $89,387,893)
   
168,319,975
     
156,550,812
 
Equity securities, at cost
   
15,816,798
     
15,977,368
 
Mortgage loans on real estate, at amortized cost  (net of credit loss reserve of $281,000 and $274,000)
   
15,702,437
     
15,318,176
 
Notes receivable (net of credit loss reserve of $258,000 and $250,000)
   
14,379,379
     
14,009,225
 
Investment real estate, net
   
21,371,982
     
21,975,120
 
Policy loans
   
5,994,931
     
6,018,248
 
Short-term investments
   
13,714,840
     
29,132,236
 
Total investments
   
354,782,484
     
364,891,021
 
                 
Cash and cash equivalents
   
40,826,224
     
41,185,196
 
Accrued investment income
   
1,720,261
     
2,001,064
 
Reinsurance receivables:
               
Future policy benefits
   
24,180,623
     
23,847,623
 
Policy claims and other benefits
   
4,301,786
     
4,734,575
 
Cost of insurance acquired
   
1,877,942
     
2,036,896
 
Income tax receivable
   
2,082,822
     
2,128,027
 
Other assets
   
1,028,011
     
884,531
 
Total assets
 
$
430,800,153
   
$
441,708,933
 
                 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
Liabilities:
               
Policy liabilities and accruals:
               
Future policyholder benefits
 
$
222,835,881
   
$
223,757,860
 
Policy claims and benefits payable
   
3,534,448
     
4,188,917
 
Other policyholder funds
   
263,297
     
260,892
 
Dividend and endowment accumulations
   
14,698,020
     
14,749,258
 
Deferred income taxes
   
14,511,204
     
12,426,840
 
Notes payable
   
0
     
19,000,000
 
Trading securities, at fair value (proceeds $102,699 and $0)
   
110,000
     
0
 
Other liabilities
   
4,928,666
     
5,635,373
 
Total liabilities
   
260,881,516
     
280,019,140
 
                 
Shareholders' equity:
               
Common stock - no par value, stated value $0.001 per share.  Authorized 7,000,000 shares - 3,171,666 and 3,165,320 shares outstanding
   
3,173
     
3,167
 
Additional paid-in capital
   
32,804,211
     
32,613,817
 
Retained earnings
   
142,641,303
     
133,491,797
 
Accumulated other comprehensive loss
   
(6,022,396
)
   
(4,882,317
)
Total UTG shareholders' equity
   
169,426,291
     
161,226,464
 
Noncontrolling interests
   
492,346
     
463,329
 
Total shareholders' equity
   
169,918,637
     
161,689,793
 
Total liabilities and shareholders' equity
 
$
430,800,153
   
$
441,708,933
 

* Balance sheet audited at December 31, 2023.

See accompanying notes.


UTG, Inc.

Condensed Consolidated Statements of Operations (Unaudited)

 
Three Months Ended
 
   
March 31,
   
March 31,
 
   
2024
   
2023
 
Revenue:
           
Premiums and policy fees
 
$
2,000,085
   
$
2,057,181
 
Ceded reinsurance premiums and policy fees
   
(529,761
)
   
(517,811
)
Net investment income
   
3,048,789
     
3,318,165
 
Other income
   
68,267
     
36,585
 
Revenue before net investment gains (losses)
   
4,587,380
     
4,894,120
 
Net investment gains (losses):
               
Other realized investment gains, net
   
37,470
     
716,300
 
Change in fair value of equity securities
   
12,020,406
     
(8,645,474
)
Total net investment gains (losses)
   
12,057,876
     
(7,929,174
)
Total revenue
   
16,645,256
     
(3,035,054
)
                 
Benefits and other expenses:
               
Benefits, claims and settlement expenses:
               
Life
   
3,644,451
     
3,649,024
 
Ceded reinsurance benefits and claims
   
(1,165,352
)
   
(613,361
)
Annuity
   
251,735
     
251,632
 
Dividends to policyholders
   
81,277
     
86,998
 
Commissions and amortization of deferred policy acquisition costs
   
(30,283
)
   
(27,856
)
Amortization of cost of insurance acquired
   
158,954
     
165,314
 
Operating expenses
   
2,081,722
     
2,271,876
 
   Interest expense
   
11,600
     
13,923
 
Total benefits and other expenses
   
5,034,104
     
5,797,550
 
                 
Income (loss) before income taxes
   
11,611,152
     
(8,832,604
)
Income tax expense (benefit)
   
2,432,629
     
(1,920,852
)
                 
Net income (loss)
   
9,178,523
     
(6,911,752
)
                 
Net income attributable to noncontrolling interests
   
(29,017
)
   
(30,490
)
                 
Net income (loss) attributable to common shareholders
 
$
9,149,506
   
$
(6,942,242
)
                 
Amounts attributable to common shareholders
               
Basic income (loss) per share
 
$
2.89
   
$
(2.18
)
                 
Diluted income (loss) per share
 
$
2.89
   
$
(2.18
)
                 
Basic weighted average shares outstanding
   
3,169,375
     
3,189,100
 
                 
Diluted weighted average shares outstanding
   
3,169,375
     
3,189,100
 

See accompanying notes.

UTG, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

 
Three Months Ended
 
   
March 31,
   
March 31,
 
   
2024
   
2023
 
Net income (loss)
 
$
9,178,523
   
$
(6,911,752
)
                 
Other comprehensive income (loss):
               
                 
Unrealized holding gains (losses) arising during period, pre-tax
   
(1,443,139
)
   
2,810,499
 
Tax (expense) benefit on unrealized holding gains (losses) arising during the period
   
303,060
     
(586,749
)
Unrealized holding gains (losses) arising during period, net of tax
   
(1,140,079
)
   
2,223,750
 
                 
Less reclassification adjustment for gains included in net income
   
0
     
(20,833
)
Tax expense for gains included in net income (loss)
   
0
     
4,375
 
Reclassification adjustment for gains included in net income, net of tax
   
0
     
(16,458
)
    Subtotal: Other comprehensive income (loss), net of tax
   
(1,140,079
)
   
2,207,292
 
                 
Comprehensive income (loss)
   
8,038,444
     
(4,704,460
)
                 
Less comprehensive income attributable to noncontrolling interests
   
(29,017
)
   
(30,490
)
                 
Comprehensive income (loss) attributable to UTG, Inc.
 
$
8,009,427
   
$
(4,734,950
)

See accompanying notes.

UTG, Inc.
Condensed Consolidated Statements of Shareholders' Equity (Unaudited)

Three Months Ended March 31, 2024
 
Common Stock
   
Additional Paid-In Capital
   
Retained Earnings
   
Accumulated Other Comprehensive Income (Loss)
   
Noncontrolling Interest
   
Total Shareholders' Equity
 
                                     
Balance at January 1, 2024
 
$
3,167
   
$
32,613,817
   
$
133,491,797
   
$
(4,882,317
)
 
$
463,329
   
$
161,689,793
 
Common stock issued during year
   
10
     
299,304
     
0
     
0
     
0
     
299,314
 
Treasury shares acquired
   
(4
)
   
(108,910
)
   
0
     
0
     
0
     
(108,914
)
Net income attributable to common shareholders
   
0
     
0
     
9,149,506
     
0
     
0
     
9,149,506
 
Unrealized holding loss on securities net of noncontrolling interest and reclassification adjustment and taxes
   
0
     
0
     
0
     
(1,140,079
)
   
0
     
(1,140,079
)
Gain attributable to noncontrolling interest
   
0
     
0
     
0
     
0
     
29,017
     
29,017
 
Balance at March 31, 2024
 
$
3,173
   
$
32,804,211
   
$
142,641,303
   
$
(6,022,396
)
 
$
492,346
   
$
169,918,637
 

Three Months Ended March 31, 2023
 
Common Stock
   
Additional Paid-In Capital
   
Retained Earnings
   
Accumulated Other Comprehensive Income (Loss)
   
Noncontrolling Interest
   
Total Shareholders' Equity
 
                                     
Balance at January 1, 2023
 
$
3,166
   
$
32,693,972
   
$
131,989,352
   
$
(7,111,586
)
 
$
453,472
   
$
158,028,376
 
Adoption of new accounting standard
   
0
     
0
     
(454,250
)
   
0
     
0
     
(454,250
)
     
3,166
     
32,693,972
     
131,535,102
     
(7,111,586
)
   
453,472
     
157,574,126
 
Common stock issued during year
   
27
     
674,363
     
0
     
0
     
0
     
674,390
 
Treasury shares acquired
   
(4
)
   
(100,224
)
   
0
     
0
     
0
     
(100,228
)
Net loss attributable to common shareholders
   
0
     
0
     
(6,942,242
)
   
0
     
0
     
(6,942,242
)
Unrealized holding income on securities net of noncontrolling interest and reclassification adjustment and taxes
   
0
     
0
     
0
     
2,207,292
     
0
     
2,207,292
 
Gain attributable to noncontrolling interest
   
0
     
0
     
0
     
0
     
30,490
     
30,490
 
Balance at March 31, 2023
 
$
3,189
   
$
33,268,111
   
$
124,592,860
   
$
(4,904,294
)
 
$
483,962
   
$
153,443,828
 

See accompanying notes.


UTG, Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

 
Three Months Ended
 
   
March 31,
   
March 31,
 
   
2024
   
2023
 
Cash flows from operating activities:
           
Net income (loss)
 
$
9,178,523
   
$
(6,911,752
)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
               
Accretion of investments
   
(350,049
)
   
(92,439
)
Realized investment gains, net
   
(37,470
)
   
(716,300
)
Change in fair value of equity securities
   
(12,020,406
)
   
8,645,474
 
Unrealized trading losses included in income
   
7,301
     
0
 
Amortization of cost of insurance acquired
   
158,954
     
165,314
 
Provision for deferred income taxes
   
2,387,424
     
(1,798,119
)
Depreciation and depletion
   
462,855
     
174,692
 
Stock-based compensation
   
299,314
     
674,390
 
Charges for mortality and administration of universal life and annuity products
   
(1,374,829
)
   
(1,448,416
)
Interest credited to account balances
   
901,542
     
921,074
 
Change in accrued investment income
   
280,803
     
310,385
 
Change in reinsurance receivables
   
99,789
     
368,886
 
Change in policy liabilities and accruals
   
(1,219,854
)
   
(1,431,856
)
Change in income taxes receivable (payable)
   
45,205
     
(122,733
)
Change in other assets and liabilities, net
   
(835,180
)
   
3,257,935
 
Net cash provided by (used in) operating activities
   
(2,016,078
)
   
1,996,535
 
                 
Cash flows from investing activities:
               
Proceeds from investments sold and matured:
               
Fixed maturities available for sale
   
5,000,000
     
20,833
 
Equity securities
   
3,519,729
     
958,779
 
Trading securities
   
102,699
     
0
 
Mortgage loans
   
209,928
     
984,587
 
Real estate
   
722,925
     
2,046,096
 
Notes receivable
   
421,847
     
66,622
 
Policy loans
   
247,513
     
280,253
 
Short-term investments
   
15,750,000
     
9,740,815
 
Total proceeds from investments sold and matured
   
25,974,641
     
14,097,985
 
Cost of investments acquired:
               
Equity securities
   
(3,107,915
)
   
(1,393,053
)
Mortgage loans
   
(599,189
)
   
0
 
Real estate
   
(545,180
)
   
(1,375,010
)
Notes receivable
   
(800,000
)
   
(1,478,100
)
Policy loans
   
(224,197
)
   
(208,423
)
Short-term investments
   
0
     
(9,701,297
)
Total cost of investments acquired
   
(5,276,481
)
   
(14,155,883
)
Net cash provided by (used in) investing activities
   
20,698,160
     
(57,898
)
                 
Cash flows from financing activities:
               
Policyholder contract deposits
   
1,046,208
     
1,110,855
 
Policyholder contract withdrawals
   
(978,348
)
   
(956,744
)
Payments of principal on notes payable/line of credit
   
(19,000,000
)
   
(19,000,000
)
Purchase of treasury stock
   
(108,914
)
   
(100,228
)
Net cash used in financing activities
   
(19,041,054
)
   
(18,946,117
)
Net decrease in cash and cash equivalents
   
(358,972
)
   
(17,007,480
)
Cash and cash equivalents at beginning of period
   
41,185,196
     
45,290,385
 
Cash and cash equivalents at end of period
 
$
40,826,224
   
$
28,282,905
 

See accompanying notes.


UTG, Inc.

Notes to Condensed Consolidated Financial Statements
 (Unaudited)

Note 1 – Basis of Presentation

The accompanying Condensed Consolidated Balance Sheet as of March 31, 2024, which has been derived from audited consolidated financial statements, and the unaudited interim Condensed Consolidated Financial Statements include the accounts of UTG, Inc. (the “Parent”) and its subsidiaries (collectively with the Parent, the “Company”).  All significant intercompany accounts and transactions have been eliminated in consolidation.  The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of regulation S-X.  Accordingly, they do not include all of the information and notes required by GAAP for audited annual financial statements.  The information furnished includes all adjustments and accruals of a normal recurring nature, which in the opinion of Management, are necessary for a fair presentation of the results for the interim periods.  The unaudited Condensed Consolidated Financial Statements included herein and these related notes should be read in conjunction with the Company’s consolidated financial statements, and the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023The Company’s results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024 or for any other future period.

This document at times will refer to the Registrant’s largest shareholder, Mr. Jesse T. Correll and certain companies controlled by Mr. Correll.  Mr. Correll holds a majority ownership of First Southern Funding, LLC (“FSF”), a Kentucky corporation, and First Southern Bancorp, Inc. (“FSBI”), a financial services holding company.  FSBI operates through its 100% owned subsidiary bank, First Southern National Bank (“FSNB”).  Banking activities are conducted through multiple locations within south-central and western Kentucky.  Mr. Correll is Chairman of the Board of Directors, Chief Executive Officer, President, and a Director of UTG and is currently UTG’s largest shareholder through his ownership control of FSF, FSBI and affiliates. At March 31, 2024, Mr. Correll owns or controls directly and indirectly approximately 65.89% of UTG’s outstanding stock.

UTG’s life insurance subsidiary, Universal Guaranty Life Insurance Company (“UG”), has several wholly-owned and majority-owned subsidiaries.  The subsidiaries were formed to hold certain real estate investments.  The real estate investments were placed into the limited liability companies and partnerships to provide additional protection to the policyholders and to UG.

Certain amounts in prior periods have been reclassified to conform with the current period presentation.

Note 2 – Recently Issued Accounting Standards

During the three months ended March 31, 2024, there were no additions to or changes in the critical accounting policies disclosed in the 2023 Form 10-K.





Note 3 – Investments

Investment in Fixed Maturity Securities

The Company’s insurance subsidiary is regulated by insurance statutes and regulations as to the type of investments they are permitted to make, and the amount of funds that may be used for any one type of investment.

Investments in fixed maturity securities are summarized by type as follows:

March 31, 2024
 
Original or Amortized Cost
   
Gross Unrealized Gains
   
Gross Unrealized Losses
   
Fair Value
 
U.S. Government and govt. agencies and authorities
 
$
14,316,438
   
$
0
   
$
(771,996
)
 
$
13,544,442
 
U.S. special revenue and assessments
   
7,527,448
     
0
     
(321,809
)
   
7,205,639
 
All other corporate bonds
   
82,726,297
     
58,784
     
(6,553,020
)
   
76,232,061
 
Redeemable preferred stock
   
2,500,000
     
0
     
0
     
2,500,000
 
Total
 
$
107,070,183
   
$
58,784
   
$
(7,646,825
)
 
$
99,482,142
 

December 31, 2023
 
Original or Amortized Cost
   
Gross Unrealized Gains
   
Gross Unrealized Losses
   
Fair Value
 
U.S. Government and govt. agencies and authorities
 
$
14,316,976
   
$
0
   
$
(729,197
)
 
$
13,587,779
 
U.S. special revenue and assessments
   
7,528,985
     
0
     
(220,527
)
   
7,308,458
 
All other corporate bonds
   
87,708,777
     
89,004
     
(5,284,182
)
   
82,513,599
 
Redeemable preferred stock
   
2,500,000
     
0
     
0
     
2,500,000
 
Total
 
$
112,054,738
   
$
89,004
   
$
(6,233,906
)
 
$
105,909,836
 

The amortized cost and estimated market value of fixed maturity securities at March 31, 2024, by contractual maturity, is shown below.

Fixed Maturity Securities
March 31, 2024
 
Amortized Cost
   
Fair Value
 
Due in one year or less
 
$
9,078,821
   
$
8,968,470
 
Due after one year through five years
   
43,078,621
     
41,313,290
 
Due after five years through ten years
   
5,945,729
     
5,920,055
 
Due after ten years
   
21,809,943
     
19,517,880
 
Fixed maturities with no single maturity date
   
27,157,069
     
23,762,447
 
Total
 
$
107,070,183
   
$
99,482,142
 

Actual maturities may differ from contractual maturities due to the exercise of call or prepayment options.

By insurance statute, the majority of the Company’s investment portfolio is invested in investment grade securities to provide ample protection for policyholders.

Below investment grade debt securities generally provide higher yields and involve greater risks than investment grade debt securities because their issuers typically are more highly leveraged and more vulnerable to adverse economic conditions than investment grade issuers.  In addition, the trading market for these securities is usually more limited than for investment grade debt securities. Debt securities classified as below-investment grade are those that receive a Standard & Poor’s rating of BB+ or below.

The Company held below investment grade investments with an estimated market value of $0 as of March 31, 2024 and December 31, 2023.

The following tables present the estimated fair value and gross unrealized losses of fixed maturity securities in an unrealized loss position:

March 31, 2024
 
Less than 12 months
   
12 months or longer
   
Total
 
   
Fair value
   
Unrealized losses
   
Fair value
   
Unrealized losses
   
Fair value
   
Unrealized losses
 
U.S. Government and govt. agencies and authorities
 
$
1,487,865
     
(13,073
)
   
12,056,577
   
$
(758,923
)
   
13,544,442
   
$
(771,996
)
U.S. Special Revenue and Assessments
   
0
     
0
     
7,205,639
     
(321,809
)
   
7,205,639
     
(321,809
)
All other corporate bonds
   
3,818,194
     
(22,814
)
   
68,629,332
     
(6,530,206
)
   
72,447,526
     
(6,553,020
)
Total fixed maturities
 
$
5,306,059
     
(35,887
)
   
87,891,548
     
(7,610,938
)
   
93,197,607
   
$
(7,646,825
)

December 31, 2023
 
Less than 12 months
   
12 months or longer
   
Total
 
   
Fair value
   
Unrealized losses
   
Fair value
   
Unrealized losses
   
Fair value
   
Unrealized losses
 
U.S. Government and govt. agencies and authorities
 
$
1,497,390
     
(3,696
)
   
12,090,389
   
$
(725,501
)
   
13,587,779
   
$
(729,197
)
U.S. special revenue and assessments
   
0
     
0
     
7,308,458
     
(220,527
)
   
7,308,458
     
(220,527
)
All other corporate bonds
   
544,610
     
(2,319
)
   
73,678,567
     
(5,281,863
)
   
74,223,177
     
(5,284,182
)
Total fixed maturities
 
$
2,042,000
     
(6,015
)
   
93,077,414
   
$
(6,227,891
)
   
95,119,414
   
$
(6,233,906
)

Additional information regarding investments in an unrealized loss position is as follows:

 
Less than 12 months
   
12 months or longer
   
Total
 
As of March 31, 2024
                 
Fixed maturities
   
4
     
45
     
49
 
As of December 31, 2023
                       
Fixed maturities
   
2
     
45
     
47
 

Allowance for Credit Loss - Available for Sale Securities

Management considers a wide range of factors about the security issuer and uses its best judgment in evaluating the cause of the decline in the estimated fair value of the security and in assessing the prospects for near-term recovery. Inherent in management’s evaluation of the security are assumptions and estimates about the operations of the issuer and its future earnings potential. Considerations used in the credit loss evaluation process include, but are not limited to: (1) the extent to which the estimated fair value has been below amortized cost, (2) adverse conditions specifically related to a security, an industry sector, adverse change in the financial condition of the issuer of the security, (3) payment structure of the security and likelihood of the issuer being able to make payments, (4) failure of the issuer to make scheduled interest and principal payments, (5) whether the issuer, or series of issuers or an industry has suffered a catastrophic loss or has exhausted natural resources, (6) whether the Company has the intent to sell or will more likely than not be required to sell a particular security before the decline in estimated fair value below amortized cost recovers,  (7) changes in the rating of the security by a rating agency, and (8) other subjective factors.

Substantially all of the unrealized losses on fixed maturity securities at March 31, 2024 and December 31, 2023 are attributable to changes in market interest rates and general disruptions in the credit market subsequent to purchase. At March 31, 2024, the Company did not intend to sell its securities in an unrealized loss position, and it was not more likely than not that the Company would be required to sell these securities before the anticipated recovery of the remaining amortized cost. Therefore, the Company concluded that these securities had not incurred a credit loss and should not have an allowance for credit loss at March 31, 2024.

Future provisions for credit loss will depend primarily on economic fundamentals, issuer performance, and changes in credit ratings.

Net unrealized losses included in other comprehensive income (loss) for investments classifies as available-for-sale, net of the effect of deferred income taxes, assuming that the depreciation had been realized as of  March 31, 2024 and December 31, 2023:

 
March 31, 2024
   
December 31, 2023
 
Unrealized appreciation (depreciation) on available-for-sale securities
 
$
(7,588,041
)
 
$
(6,144,902
)
Deferred income taxes
   
1,593,489
     
1,290,429
 
Net unrealized appreciation (depreciation) on available-for-sale securities
 
$
(5,994,552
)
 
$
(4,854,473
)


Cost Method Equity Investments

The Company held equity investments with an aggregate cost of $15,816,798 and $15,977,368 at March 31, 2024 and December 31, 2023, respectively.  These equity investments were not reported at fair value because it is not practicable to estimate their fair values due to insufficient information being available. Management reviews and considers events or changes in circumstances that might have a significant adverse effect on the reported value of those investments. Management did not identify any events or changes in circumstances that might have a significant adverse effect on the reported value of those investments.

Trading Securities

Securities designated as trading securities are reported at fair value, with gains or losses resulting from changes in fair value recognized in net investment income on the Consolidated Statements of Operations.  Trading Securities included exchange-traded equities and exchange-traded options.  Trading securities carried as liabilities were securities sold short.  A gain, limited to the price at which the security was sold short, or a loss, potentially unlimited in size, will be recognized upon the termination of the short sale. The fair value of derivatives included in trading security assets and trading security liabilities as of March 31, 2024 was $0 and $110,000, respectively. The fair value of derivatives included in trading security assets and trading security liabilities as of December 31, 2023 was $0. Earnings from trading securities are classified in cash flows from operating activities. The derivatives held by the Company are for income generation purposes only.

Trading revenue charged to net investment income from trading securities was:

 
Three Months Ended
 
   
March 31,
 
   
2024
   
2023
 
Net unrealized gains (losses)
 
$
(7,301
)
 
$
0
 
Net realized gains (losses)
   
0
     
0
 
Net unrealized and realized gains (losses)
 
$
(7,301
)
 
$
0
 


Mortgage Loans

The Company, from time to time, acquires mortgage loans through participation agreements with FSNB.  FSNB has been able to provide the Company with additional expertise and experience in underwriting commercial and residential mortgage loans, which provide more attractive yields than the traditional bond market.  The Company is able to receive participations from FSNB for three primary reasons:  1) FSNB has already reached its maximum lending limit to a single borrower, but the borrower is still considered a suitable risk; 2) the interest rate on a particular loan may be fixed for a long period that is more suitable for UG given its asset-liability structure; and 3) FSNB’s loan growth might at times outpace its deposit growth, resulting in FSNB participating such excess loan growth rather than turning customers away.  For originated loans, the Company’s Management is responsible for the final approval of such loans after evaluation.  Before a new loan is issued, the applicant is subject to certain criteria set forth by Company Management to ensure quality control.  These criteria include, but are not limited to, a credit report, personal financial information such as outstanding debt, sources of income, and personal equity.  Once the loan is approved, the Company directly funds the loan to the borrower.  The Company bears all risk of loss associated with the terms of the mortgage with the borrower.

During the three months ended March 31, 2024 and 2023, the Company acquired $599,189 and $0 in mortgage loans, respectively.  FSNB services the majority of the Company’s mortgage loan portfolio.  The Company pays FSNB a 0.25% servicing fee on these loans and a one-time fee at loan origination of 0.50% of the original loan cost to cover costs incurred by FSNB relating to the processing and establishment of the loan.

During 2024 and 2023, the maximum and minimum lending rates for mortgage loans were:

 
2024
   
2023
 
   
Maximum rate
   
Minimum rate
   
Maximum rate
   
Minimum rate
 
Farm Loans
   
5.00
%
   
5.00
%
   
5.00
%
   
5.00
%
Commercial Loans
   
8.75
%
   
4.00
%
   
8.75
%
   
4.00
%
Residential Loans
   
5.00
%
   
4.15
%
   
5.00
%
   
4.15
%

Most mortgage loans are first position loans.  Loans issued are generally limited to no more than 80% of the appraised value of the property.

The Company has in place a monitoring system to provide Management with information regarding potential troubled loans.  Letters are sent to each mortgagee when the loan becomes 30 days or more delinquent.  Management is provided with a monthly listing of loans that are 60 days or more past due.  All loans 90 days or more past due are placed on a non-performing status and classified as delinquent loans.  Quarterly, coinciding with external financial reporting, the Company reviews each delinquent loan and determines how each delinquent loan should be classified.  Management believes the current internal controls surrounding the mortgage loan selection process provide a quality portfolio with minimal risk of foreclosure and/or negative financial impact.

Changes in the current economy could have a negative impact on the loans, including the financial stability of the borrowers, the borrowers’ ability to pay or to refinance, the value of the property held as collateral and the ability to find purchasers at favorable prices.  Interest accruals are analyzed based on the likelihood of repayment.  In no event will interest continue to accrue when accrued interest along with the outstanding principal exceeds the net realizable value of the property.  The Company does not utilize a specified number of days delinquent to cause an automatic non-accrual status.

The following table summarizes the mortgage loan holdings of the Company:

   
March 31, 2024
   
December 31, 2023
 
In good standing
 
$
15,702,437
   
$
15,318,176
 
Total mortgage loans
 
$
15,702,437
   
$
15,318,176
 

The following is a summary of the mortgage loans outstanding and the related allowance for credit losses:

 
March 31, 2024
   
December 31, 2023
 
Farm
 
$
326,385
   
$
332,417
 
Commercial
   
1,482,229
     
13,764,209
 
Residential
   
14,174,823
     
1,495,550
 
Total mortgage loans
   
15,983,437
     
15,592,176
 
Less allowance for credit losses
   
(281,000
)
   
(274,000
)
Total mortgage loans, net
 
$
15,702,437
   
$
15,318,176
 

There were no  past due loans as of March 31, 2024 and December 31, 2023.

Notes Receivable

Notes receivable represent collateral loans and promissory notes issued by the Company and are reported at their unpaid principal balances, adjusted for valuation allowances.  Interest accruals are analyzed based on the likelihood of repayment.  The Company does not utilize a specified number of days delinquent to cause an automatic non-accrual status. During the three months ended March 31, 2024 and 2023 the Company acquired  $800,000 and $1,478,100 of notes receivable, respectively.
 
Before a new note is issued, the applicant is subject to certain criteria set forth by Company Management to ensure quality control.  Once the note is approved, the Company directly funds the note to the borrower. Several of the notes have participation agreements in place, whereas the Company has reduced its investment in the note receivable by participating a portion of the note to a third party.

Similar to the mortgage loans, FSNB services the notes receivable. The Company, and the participants in the notes, share in the risk of loss associated with the terms of the note with the borrower, based upon their ownership percentage in the note.  The Company has in place a monitoring system to provide Management with information regarding potential troubled loans.

The following is a summary of the notes receivable outstanding and the related allowance for credit losses:

 
March 31, 2024
   
December 31, 2023
 
Notes receivable
 
$
14,637,379
   
$
14,259,225
 
Less allowance for credit losses
   
(258,000
)
   
(250,000
)
Total notes receivable, net
 
$
14,379,379
   
$
14,009,225
 

Allowance for Credit Loss - Loans

The allowance for credit loss ("ACL") is a valuation account that is deducted from the loans' amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when Management believes the uncollectibility of a loan balance is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

The allowance for credit losses represents Management's estimate of lifetime credit losses inherent in loans as of the balance sheet date. The allowance for credit losses is estimated by Management using relevant available information, from both internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts.

The Company measures expected credit losses for loans on a pooled basis when similar risk characteristics exist. The Company has identified the following portfolio segments - mortgage loans on real estate and notes receivable.

The allowance for credit losses calculation includes subjective adjustments for qualitative risk factors that are likely to cause estimated credit losses to differ from historical experience. These qualitative adjustments may increase or reduce reserve levels and include adjustments for risk tolerance, loan review and audit results, asset quality and portfolio trends, industry concentrations, external factors and economic conditions.

Loans that do not share risk characteristics are evaluated on an individual basis. When Management determines that foreclosure is probable and the borrower is experiencing financial difficulty, the expected credit losses are based on the fair value of collateral at the reporting date unadjusted for selling costs as appropriate.

Allowance for Credit Loss - Unfunded Commitments

Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit issued to meet customer financing needs. The Company's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for off-balance sheet loan commitments is represented by the contractual amount of those instruments. Such financial instruments are recorded when they are funded.

The Company records an allowance for credit losses on off-balance sheet credit exposures, unless the commitments to extend credit are unconditionally cancelable, through a charge to provision for unfunded commitments in the Company's income statements. The allowance for credit losses on off-balance sheet credit exposures is estimated by loan segment at each balance sheet date under the current expected credit loss model using the same methodologies as portfolio loans, taking into consideration the likelihood that funding will occur as well a any third-party guarantees. The allowance for unfunded commitments as of March 31, 2024 and December 31, 2023 was $36,000 and $51,000, respectively, and is included in other liabilities on the Company's Condensed Consolidated Balance Sheets.

Allowance for Credit Loss - Accrued Interest

Accrued interest is not included in the ACL and if deemed uncollectible, it is charged against interest income when determined to be uncollectible.

Investment Real Estate

Real estate held-for-investment is stated at cost less accumulated depreciation. Depreciation is computed on a straight-line basis for financial reporting purposes using estimated useful lives of 3 to 30 years. The Company periodically reviews its real estate held-for-investment for impairment and tests for recoverability whenever events or changes in circumstances indicate the carrying value may not be recoverable. During the three months ended March 31, 2024, no impairments were recognized on the investment real estate.

Note 4 - Fair Value Measurements of the Condensed Consolidated Financial Statements provides further information regarding the fair value of financial instruments that are not measured at fair value. The investment real estate owned by the Company is included in this portion of the Note 4 - Fair Value Measurements disclosure.

The following table provides an allocation of the Company’s investment real estate by type:

 
March 31, 2024
   
December 31, 2023
 
Raw land
 
$
7,096,926
   
$
6,971,930
 
Commercial
   
4,476,963
     
4,106,938
 
Residential
   
2,830,741
     
3,512,408
 
Land, minerals and royalty interests
   
6,967,352
     
7,383,844
 
Total investment real estate
 
$
21,371,982
   
$
21,975,120
 

The Company’s investment real estate portfolio includes ownership in oil and gas royalties. As of March 31, 2024 and December 31, 2023, investments in oil and gas royalties represented 33% and 34%, respectively, of the total investment real estate portfolio.  See Note 9 – Concentrations of Credit Risk of the Condensed Consolidated Financial Statements for additional information regarding the allocation of the oil and gas investment real estate holdings by industry type.

Gains and losses recognized on the disposition of the properties are recorded as realized gains and losses in the Condensed Consolidated Statements of Operations. During the three months ended  March 31, 2024 and 2023, the Company acquired $545,180 and $1,375,010 of investment real estate, respectively.

Short-Term Investments

Short-term investments have remaining maturities exceeding three months and under 12 months at the time of purchase and are stated at amortized cost, which approximates fair value. The short-term investments consist of United States Treasury securities.

During 2024 and 2023, the Company acquired $0 and $9,701,297, respectively, in short-term investments.


Net Investment Gains (Losses)

The following table presents net investment gains (losses) and the change in net unrealized gains on available-for-sale investments. 

 
Three Months Ended
 
   
March 31,
 
   
2024
   
2023
 
Realized gains:
           
Sales of fixed maturities
 
$
0
   
$
20,833
 
Sales of equity securities
   
0
     
85,184
 
Sales of real estate
   
37,461
     
586,774
 
Sales of short-term investments
   
9
     
23,509
 
Total realized gains
   
37,470
     
716,300
 
Realized losses:
               
Sales of equity securities
   
0
     
0
 
Total realized losses
   
0
     
0
 
Net realized investment gains
   
37,470
     
716,300
 
Change in fair value of equity securities:
               
Change in fair value of equity securities held at the end of the period
   
12,020,406
     
(8,645,474
)
Change in fair value of equity securities
   
12,020,406
     
(8,645,474
)
Net investment gains (losses)
 
$
12,057,876
   
$
(7,929,174
)
Change in net unrealized gains (losses) on available-for-sale investments included in other comprehensive income:
               
Fixed maturities
 
$
(1,443,139
)
 
$
2,810,499
 
Net increase (decrease)
 
$
(1,443,139
)
 
$
2,810,499
 

 
Note 4 – Fair Value Measurements

Fair Value Measurements on a Recurring Basis

Assets and liabilities recorded at fair value in the Condensed Consolidated Balance Sheets are measured and classified in accordance with a fair value hierarchy consisting of three levels based on the observability of valuation inputs:

Level 1 – Valuation is based upon quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 – Valuation methodologies include quoted prices for similar assets and liabilities in active markets or quoted prices for identical, quoted prices for identical or similar assets or liabilities in markets that are not active, or the Company may use various valuation techniques or pricing models that use observable inputs to measure fair value.

Level 3 – Valuation is based upon unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities. Unobservable inputs reflect the Company’s own assumptions about the inputs that market participants would use in pricing the asset or liability.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

The following table presents information about assets and liabilities measured at fair value on a recurring basis and indicates the level of the fair value measurement based on the observability of the inputs used:

March 31, 2024
 
Level 1
   
Level 2
   
Level 3
   
Total
 
Fixed maturitity securities:
                       
U.S. Government and government agencies and authorities
 
$
13,544,442
   
$
0
   
$
0
   
$
13,544,442
 
U.S. special revenue and assessments
   
0
     
7,205,639
     
0
     
7,205,639
 
Corporate securities
   
0
     
76,232,061
     
0
     
76,232,061
 
Total fixed maturities
   
13,544,442
     
83,437,700
     
0
     
96,982,142
 
Equity securities:
                               
Common stocks
   
37,439,195
     
5,582,300
     
2,857,144
     
45,878,639
 
Limited liability companies
   
0
     
0
     
60,359,880
     
60,359,880
 
Total equity securities
   
37,439,195
     
5,582,300
     
63,217,024
     
106,238,519
 
Short-term investments
   
13,714,840
     
0
     
0
     
13,714,840
 
Total financial assets
 
$
64,698,477
   
$
89,020,000
   
$
63,217,024
   
$
216,935,501
 
Liabilities:
                               
Trading securities
 
$
110,000
   
$
0
   
$
0
   
$
110,000
 

December 31, 2023
 
Level 1
   
Level 2
   
Level 3
   
Total
 
Fixed maturitity securities:
                       
U.S. Government and government agencies and authorities
 
$
13,587,779
   
$
0
   
$
0
   
$
13,587,779
 
U.S. special revenue and assessments
   
0
     
7,308,458
     
0
     
7,308,458
 
Corporate securities
   
0
     
82,513,599
     
0
     
82,513,599
 
Total fixed maturities
   
13,587,779
     
89,822,057
     
0
     
103,409,836
 
Equity securities:
                               
Common stocks
   
35,819,973
     
5,329,080
     
2,807,634
     
43,956,687
 
Limited liability companies
   
0
     
0
     
57,604,806
     
57,604,806
 
Total equity securities
   
35,819,973
     
5,329,080
     
60,412,440
     
101,561,493
 
Short-term investments
   
29,132,236
     
0
     
0
     
29,132,236
 
Total financial assets
 
$
78,539,988
   
$
95,151,137
   
$
60,412,440
   
$
234,103,565
 

Total assets included in the fair value hierarchy exclude certain equity securities that were measured at estimated fair value using the net asset value (“NAV”) per share practical expedient. At March 31, 2024 and December 31, 2023, the estimated fair value of such investments was $62,081,456 and $54,989,319, respectively. These investments are generally not readily redeemable by the investee.

The following is a description of the valuation techniques used the by Company to measure assets reported at fair value on a recurring basis. There have been no significant changes in the valuation techniques utilized by the Company for the three months ended March 31, 2024.

Available for Sale Securities

Securities classified as available for sale are recorded at fair value on a recurring basis. Securities classified as Level 1 utilized fair value measurements based upon quoted market prices, when available. If quoted market prices are not available, the Company obtains fair value measurements from recently executed transactions, market price quotations, benchmark yields and issuer spreads to value Level 2 securities. In certain instances where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy. Fair value determinations for Level 3 measurements are estimated on a quarterly basis where assumptions used are reviewed to ensure the estimated fair value complies with accounting standards generally accepted in the United States.

Equity Securities at Fair Value

Equity securities consist of common and preferred stocks and limited liability companies mainly in private equity investments, financial institutions and publicly traded corporations. Equity securities for which there is sufficient market data are categorized as Level 1 or 2 in the fair value hierarchy.  For the equity securities in which quoted market prices are not available, the Company uses industry standard pricing methodologies, including discounted cash flow models that may incorporate various inputs such as payment expectations, risk of the investment, market data, and health of the underlying company. The inputs are based upon Management’s assumptions and available market information. When evidence is believed to support a change to the carrying value from the transaction price, adjustments are made to reflect the expected cash flows, material events and market data. These investments are included in Level 3 of the fair value hierarchy.

Trading Securities

Trading securities are recorded at fair value. They are classified as Level 1 and utilize fair value measurements based upon quoted market prices.

Change in Recurring Fair Value Measurements

The following table presents the changes in Level 3 equity securities measured at fair value on a recurring basis, and the realized and unrealized gains (losses) related to the Level 3 equity securities.

         
Investments in
       
 
Investments in Common Stocks
   
Limited Liability Companies
   
Total
 
Balance at December 31, 2023
 
$
2,807,634
   
$
57,604,806
   
$
60,412,440
 
Realized gains (losses)
   
0
     
0
     
0
 
Unrealized gains (losses)
   
49,510
     
2,755,074
     
2,804,584
 
Purchases
   
0
     
0
     
0
 
Sales
   
0
     
0
     
0
 
Balance at March 31, 2024
 
$
2,857,144
   
$
60,359,880
   
$
63,217,024
 

Both observable and unobservable inputs may be used to determine the fair values of positions classified in Level 3 in the table above. As a result, the unrealized gains (losses) on instruments held at March 31, 2024 and December 31, 2023 may include changes in fair value that were attributable to both observable and unobservable inputs.

Assets and liabilities are transferred into Level 3 when a significant input cannot be corroborated with market observable data. This occurs when market activity decreases significantly and underlying inputs cannot be observed, current prices are not available, and/or when there are significant variances in quoted prices, thereby affecting transparency. Assets and liabilities are transferred out of Level 3 when circumstances change such that a significant input can be corroborated with market observable data. This may be due to a significant increase in market activity, a specific event, or one or more significant input(s) becoming observable.

Quantitative Information About Level 3 Fair Value Measurements

The following table presents information about the significant unobservable inputs used for recurring fair value measurements for certain Level 3 instruments and includes only those instruments for which information about the inputs is reasonably available to the Company, such as data from independent third-party valuation service providers and from internal valuation models.

Financial Assets
 
Fair Value at
March 31, 2024
   
Fair Value at
December 31, 2023
 
Valuation Technique
Common stocks
 
$
2,857,144
   
$
2,807,634
 
Pricing Model
Limited liability companies
   
60,359,880
     
57,604,806
 
Pricing Model
Total
 
$
63,217,024
   
$
60,412,440
   

Uncertainty of Fair Value Measurements

The significant unobservable inputs used in the determination of the fair value of assets classified as Level 3 have an inherent measurement uncertainty that if changed could result in higher or lower fair value measurements of these assets as of the reporting date.

Equity Securities at Fair Value

Fair market value for equity securities is derived based on unobservable inputs, such as projected normalized revenues and industry standard multiples of revenue for the equity securities valued using pricing model.  Significant increases (decreases) in either of those inputs in isolation would result in a significantly higher (lower) fair value measurement.

Investments in Certain Entities Carried at Fair Value Using Net Asset Value per Share

The Company holds certain equity securities that are measured at estimated fair value using the NAV per share practical expedient. These investments are generally not readily redeemable by the investee. The following tables provide additional information regarding the assets carried at NAV.

Investments in Certain Entities Carried at Fair Value Using Net Asset Value per Share

Investment Category
 
Fair Value at March 31, 2024
   
Unfunded Commitments
   
Redemption Frequency
   
Redemption Notice Period
 
Equity securities
                       
  Growth Equity
                       
Redeemable
                       
   Limited partnership
 
$
35,423,361
   
$
0
   
Quarterly
   
45 days
 
Non-redeemable
                           
Limited liability companies
   
10,478,935
     
9,204,839
             
Limited partnerships
   
16,179,160
     
2,366,695
     
n/a
     
n/a
 
Total
 
$
62,081,456
   
$
11,571,534
     
n/a
     
n/a
 

Investment Category
 
Fair Value at December 31, 2022
   
Unfunded Commitments
   
Redemption Frequency
   
Redemption Notice Period
 
Equity securities
                       
  Growth Equity
                       
Redeemable
                       
   Limited partnership
 
$
34,081,797
   
$
0
   
Quarterly
   
45 days
 
Non-redeemable
                           
Limited liability companies
   
11,960,929
     
9,464,608
     
n/a
     
n/a
 
   Limited partnerships
   
8,946,593
     
2,410,599
     
n/a
     
n/a
 
Total
 
$
54,989,319
   
$
11,875,207
                 

The following are descriptions of the Company's assets held at NAV.

The Company invested in a limited partnership that was formed under the laws of the State of Delaware on October 5, 1999, as a Delaware limited partnership (“LP”). The Limited Partnership Agreement provides for the Fund to continue until dissolved. There are significant restrictions to the dissolution process, which are outlined in the LP Agreement. The Fund invests in listed equity and fixed income securities as well as non-listed securities, including direct-owned minerals and other royalties. In 2013, UG entered into an irrevocable subscription agreement to invest in the LP.

The Company invested in a Limited Liability Company ("LLC") that was formed under the laws of the state of Delaware in 2020. The LLC agreement provides for the Company to continue until dissolved. There are significant restrictions to the dissolution process, which are outlined in the LLC Agreement. The LLC Company was formed for the purpose of acquiring, making investments in, and owning, holding, and growing operating businesses through the United States. In 2020, UG entered into a LLC Agreement to invest in this LLC.

The Company invested in a Limited Liability Company ("LLC") that was formed under the laws of the state of Delaware. The LLC was formed on October 15, 2020 to provide long-term investment returns. The Company will continue to operate until December 31, 2032, or until each of the investment funds in which the LLC invests terminates, unless terminated earlier or extended in accordance with the Operating Agreement. In 2020, UG completed the Subscription Agreement to become an investor in this LLC.

The Company invested in a Limited Liability Company ("LLC") that was formed under the laws of the state of Delaware. The LLC was formed on July 1, 2022 to amplify philanthropy by primarily investing in venture capital investment funds and in direct venture capital investments of operating companies. The Company will continue to operate until December 31, 2034, or until each of the investment funds in which the LLC invests terminates, unless terminated earlier or extended in accordance with the Operating Agreement. In 2022, the Company completed the Subscription Agreement to become an investor in this LLC.

The Company invested in a Limited Liability Company ("LLC") that was formed under the laws of the state of Delaware. The LLC was organized solely for the purpose owning, managing, supervising and disposing of the investment. The Partnership will continue in existence for the investment period (subject to extension), unless sooner terminated by operation of law or pursuant to any provision of the Limited Partnership Agreement. In 2022, the Company entered into a Limited Partnership Agreement to invest in this LP.

The Company invested in a closed-end LP fund that was formed pursuant to the laws of the State of Delaware under a limited partners agreement (the “Agreement”) on April 6, 2015 and is scheduled to terminate on the tenth anniversary of the final closing date, unless terminated sooner or extended in accordance with the Agreement. The purpose of the LP is to make investments in and pursue targets that educate, train, and inspire men and women in the United States and around the world to value free enterprise, business, and economics to improve the quality of their lives and the lives and the lives of those in their communities. In 2015, the Company entered into a Limited Partnership Agreement to invest in this LP.

The Company invested in a closed-end LP fund that was formed pursuant to the laws of the State of Delaware under a limited partners agreement (the “Agreement”) on September 5, 2018 (the “Agreement”), and is scheduled to terminate on the twelfth anniversary of the Final Closing Date, unless terminated sooner or extended in accordance with the Agreement. The purpose of the Partnership is to make investments in and pursue targets that educate, train, and inspire men and women in the United States and around the world to value free enterprise, business, and economics to improve the quality of their lives and the lives and the lives of those in their communities. In 2018, the Company entered into a Limited Partnership Agreement to invest in this LP.

The Company invested in a Limited Liability Company ("LLC") that was formed under the laws of the state of Delaware. The LLC was formed September 29, 2021 for the purpose of investing in companies located in emerging markets.  The Limited Liability Company Agreement provides for LLC to continue until dissolved, unless terminated earlier through terms specified in the Operating Agreement. In 2021, the Company entered into a Limited Liability Company Agreement to invest in the LLC.

The Company invested in a LP that was formed pursuant to the laws of the state of Delaware under a limited partnership agreement on October 27, 2021 (the “Agreement”) and is scheduled to terminate on the tenth anniversary of the Final Closing Date, unless terminated sooner or extended in accordance with the Agreement. The Partnership is organized for the principal purposes of acquiring, holding, supervising, managing and disposing of investment in recapitalization, management buyouts, and corporate divestitures of Portfolio Companies operating in various segments of the U.S. lower middle markets. In 2022, the Company entered into a Limited Partnership Agreement to invest in this LP.

The Company invested in a LLC that was formed as an Alabama Limited Liability Company on April 6, 2022. The Limited Liability Company Agreement provides for the LLC to continue until dissolved, unless terminated earlier through terms specified in the Operating Agreement. The purpose of Trivela is to (1) acquire, own and operate football (soccer) clubs (each a “Target Company”) (2) establish investment vehicles for the acquisition of Target Companies (3) sponsor private placements of securities on behalf of each investment vehicle (4) manage the operations of each investment vehicle & Target Company on a fee for services basis (5) engage in any lawful act or activity incidental to the Business as reasonably determined by the managers. The Company entered into a Limited Liability Company Agreement to invest in Trivela Group, LLC.

The Company invested in a LP that was formed as a Delaware Limited Partnership on September 22, 2023. The Limited Partnership Agreement states that the LP shall continue, unless the Partnership is sooner dissolved , until the fifteenth (15th) anniversary of the final closing, provided, that the General Partner may further extend the term of the Partnership beyond the aforementioned term with the approval of a majority in interest of the limited partners for up to two consecutive period of five years. The nature of the business to be conducted and promoted by the partnership is to: (1) acquire, own, and operate one or more clubs,  (2) establish subsidiaries for the acquisition of clubs and club ownership interests, (3) pursue and exploit business, investment or real estate opportunities related or incidental to clubs, their stadiums or any other sport or entertainment activities, and (4) engage in any lawful act or activity incidental to the foregoing purposes, as determined by the general partner.

Fair Value Measurements on a Nonrecurring Basis

Certain assets are not carried at fair value on a recurring basis. Accordingly, such investments are only included in the fair value hierarchy disclosure when the investment is subject to re-measurement at fair value after initial recognition and the resulting re-measurement is reflected in the Consolidated Financial Statements. The Company did not recognize any re-measurements or impairments of financial instruments at March 31, 2024 or December 31, 2023.

Fair Value Information About Financial Instruments Not Measured at Fair Value

Certain assets are not carried at fair value on a recurring basis. Accordingly, such investments are only included in the fair value hierarchy disclosure when the investment is subject to re-measurement at fair value after initial recognition and the resulting re-measurement is reflected in the Consolidated Financial Statements.

The following table presents the carrying amount and estimated fair values of the Company’s financial instruments not measured at fair value and indicates the level in the fair value hierarchy of the estimated fair value measurement based on the observability of the inputs used:

 
Carrying
   
Estimated
                   
March 31, 2024
 
Amount
   
Fair Value
   
Level 1
   
Level 2
   
Level 3
 
Assets
                             
Held to maturity redeemable preferred stock
 
$
2,500,000
     
2,500,000
     
0
     
0
     
2,500,000
 
Equity securities, at cost
   
15,816,798
     
15,816,798
     
0
     
0
     
15,816,798
 
Mortgage loans on real estate
   
15,702,437
     
14,824,642
     
0
     
0
     
14,824,642
 
Notes receivable
   
14,379,379
     
14,622,498
     
0
     
0
     
14,622,498
 
Investment real estate
   
21,371,982
     
62,624,766
     
0
     
0
     
62,624,766
 
Policy loans
   
5,994,931
     
5,994,931
     
0
     
0
     
5,994,931
 
Accrued investment income
   
1,720,261
     
1,720,261
     
0
     
0
     
1,720,261
 
                                         
Liabilities
                                       
Policy claims and benefits payable
   
3,534,448
     
3,534,448
     
0
     
0
     
3,534,448
 
Dividend and endowment accumulations
   
14,698,020
     
14,698,020
     
0
     
0
     
14,698,020
 

 
Carrying
   
Estimated
                   
December 31, 2023
 
Amount
   
Fair Value
   
Level 1
   
Level 2
   
Level 3
 
Assets
                             
Held to maturity redeemable preferred stock
 
$
2,500,000
     
2,500,000
     
0
     
0
     
2,500,000
 
Equity securities, at cost
   
15,977,368
     
15,977,368
     
0
     
0
     
15,977,368
 
Mortgage loans on real estate
   
15,318,176
     
14,447,026
     
0
     
0
     
14,447,026
 
Notes receivable
   
14,009,225
     
14,189,147
     
0
     
0
     
14,189,147
 
Investment real estate
   
21,975,120
     
62,899,838
     
0
     
0
     
62,899,838
 
Policy loans
   
6,018,248
     
6,018,248
     
0
     
0
     
6,018,248
 
Accrued investment income
   
2,001,064
     
2,001,064
     
0
     
0
     
2,001,064
 
                                         
Liabilities
                                       
Policy claims and benefits payable
   
4,188,917
     
4,188,917
     
0
     
0
     
4,188,917
 
Dividend and endowment accumulations
   
14,749,258
     
14,749,258
     
0
     
0
     
14,749,258
 
Notes payable
   
19,000,000
     
19,000,000
     
0
     
19,000,000
     
0
 

The above estimated fair value amounts have been determined based upon the following valuation methodologies. Considerable judgment was required to interpret market data in order to develop these estimates. Accordingly, the estimates are not necessarily indicative of the amounts which could be realized in a current market exchange.  The use of different market assumptions or estimation methodologies may have a material effect on the fair value amounts.

Held to maturity redeemable preferred stock is carried at cost, which approximates fair value.

Certain equity securities are reported at their cost basis, minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. It is not practicable to estimate their fair values due to insufficient information being available.

The fair values of mortgage loans on real estate are estimated using discounted cash flow analyses and interest rates being offered for similar loans to borrowers with similar credit ratings.  The inputs used to measure the fair value of our mortgage loans on real estate are classified as Level 3 within the fair value hierarchy.

The fair values of notes receivable are estimated using discounted cash flow analyses and interest rates being offered for similar loans to borrowers with similar credit ratings. The inputs used to measure the fair value of the notes receivable are classified as Level 3 within the fair value hierarchy.

Investment real estate is recorded at the lower of the net investment in the real estate or the fair value of the real estate less costs to sell.  The determination of fair value assessments are performed on a periodic, non-recurring basis by external appraisal and assessment of property values by Management.  The inputs used to measure the fair value of our investment real estate are classified as Level 3 within the fair value hierarchy.

Policy loans are carried at the aggregate unpaid principal balances in the Condensed Consolidated Balance Sheets which approximate fair value, and earn interest at rates ranging from 4% to 8%. Individual policy liabilities in all cases equal or exceed outstanding policy loan balances.  The inputs used to measure the fair value of our policy loans are classified as Level 3 within the fair value hierarchy.

The carrying value of accrued investment income approximates its fair value.

The carrying amounts reported for policy claims and benefits payable approximates fair value.

The carrying value for dividend and endowment accumulations approximates fair value.

The carrying value for notes payable is a reasonable estimate of fair value subject to floating rates of interest.  The fair value of notes payable with fixed rate borrowings is determined based on the borrowing rates currently available to the Company for loans with similar terms and average maturities.  The inputs used to measure the fair value of notes payable are classified as Level 2 within the fair value hierarchy.
 


Note 5 – Credit Arrangements

Instrument
 
Issue Date
 
Maturity Date
 
Revolving
Credit Limit
 
December 31, 2023
 
Borrowings
 
Repayments
 
March 31, 2024
Lines of Credit:
                                 
UTG
 
11/20/2013
 
11/20/2024
 
$
8,000,000
   
0
 
0
 
0
 
$
0
UG - CMA
 
10/21/2021
 
10/4/2024
   
25,000,000
   
19,000,000
 
0
 
19,000,000
   
0

UTG has a variable rate revolving line of credit. As collateral, UTG has pledged 100% of the  common voting stock of its wholly owned subsidiary, Universal Guaranty Life Insurance Company.  UTG is in the process of renewing this line of credit.

During October of 2023, the Federal Home Loan Bank approved UG’s Cash Management Advance Application (“CMA”). The CMA gives the Company the option of selecting a variable rate of interest for up to 90 days or a fixed rate for a maximum of 30 days. The variable rate CMA is prepayable at any time without a fee, while the fixed CMA is not prepayable prior to maturity. The Company has pledged bonds with a collateral lendable value of $19,698,879. During the first quarter of 2024, the Company repaid the entire outstanding principal balance.

Note 6 – Shareholders’ Equity

Stock Repurchase Program – The Board of Directors of UTG has authorized the repurchase in the open market or in privately negotiated transactions of UTG’s common stock.  The Board of Directors of UTG authorized the repurchase of up to $22 million of UTG’s common stock in the open market or in privately negotiated transactions. Company Management has broad authority to operate the program, including the discretion of whether to purchase shares and the ability to suspend or terminate the program. Open market purchases are made based on the last available market price but may be limited.  During the three months ended March 31, 2024, the Company repurchased 3,598 shares through the stock repurchase program for $108,914. Through March 31, 2024, UTG has spent $20,300,317 in the acquisition of 1,360,457 shares under this program.

During 2024, the Company issued 9,944 shares of stock to management and employees as compensation at a cost of $299,314. These awards are determined at the discretion of the Board of Directors.

Earnings Per Share Calculations

Earnings per share are based on the weighted average number of common shares outstanding during each period.  For the three months ended March 31, 2024 and 2023, diluted earnings per share were the same as basic earnings per share since the Company had no dilutive instruments outstanding.

Note 7 – Commitments and Contingencies

The insurance industry has experienced a number of civil jury verdicts which have been returned against life and health insurers in the jurisdictions in which the Company does business involving the insurers’ sales practices, alleged agent misconduct, failure to properly supervise agents, and other matters.  Some of the lawsuits have resulted in the award of substantial judgments against the insurer, including material amounts of punitive damages.  In some states, juries have substantial discretion in awarding punitive damages in these circumstances.  In the normal course of business, the Company is involved from time to time in various legal actions and other state and federal proceedings.  Management is of the opinion that the ultimate disposition of the matters will not have a materially adverse effect on the Company’s results of operations or financial position.

Under the insurance guaranty fund laws in most states, insurance companies doing business in a participating state can be assessed up to prescribed limits for policyholder losses incurred by insolvent or failed insurance companies.  Although the Company cannot predict the amount of any future assessments, most insurance guaranty fund laws currently provide that an assessment may be excused or deferred if it would threaten an insurer’s financial strength.  Mandatory assessments may be partially recovered through a reduction in future premium tax in some states. The Company does not believe such assessments will be materially different from amounts already provided for in the consolidated financial statements, though the Company has no control over such assessments.

Mortgage Loan Commitments - The Company commits to lend funds under mortgage loan commitments. The amounts of these mortgage loan commitments were $278,944 and $878,132 at March 31, 2024 and December 31, 2023, respectively.

Notes Receivable Commitments - The Company commits to lend funds under notes receivable funding commitments. The amounts of these notes receivable commitments were $2,000,000 and $2,800,000 at March 31, 2024 and December 31, 2023, respectively.

Commitments to Fund Limited Liability Company and Limited Partnership Investments - The Company commits to fund investments in limited liability companies and limited partnership. The amounts of the unfunded commitments were $15,718,682 and $16,153,903 at March 31, 2024 and December 31, 2023, respectively.
Note 8 – Other Cash Flow Disclosures


On a cash basis, the Company paid the following expenses:

 
Three Months Ended
 
   
March 31,
 
   
2024
   
2023
 
Interest
 
$
23,169
   
$
41,916
 
Federal income tax
   
0
     
0
 

Note 9 – Concentrations of Credit Risk

The Company maintains cash balances in financial institutions that at times may exceed federally insured limits.  The Company maintains its primary operating cash accounts with First Southern National Bank, an affiliate of the largest shareholder of UTG, Mr. Jesse Correll, the Company’s CEO and Chairman.  The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents.

Because UTG serves primarily individuals located in three states, the ability of the Company's customers to pay their insurance premiums is impacted by the economic conditions in these areas.  As of March 31, 2024 and 2023, approximately 49% and 50%, respectively, of the Company’s total direct premium was collected from Illinois, Ohio, and Texas. Thus, results of operations are heavily dependent upon the strength of these economies.

The Company reinsures that portion of insurance risk which is in excess of its retention limits. Retention limits range up to $125,000 per life.  Life insurance ceded represented 21% and 20% of total life insurance in force at March 31, 2024 and  December 31, 2023, respectively.  Insurance ceded represented 31% and 29% of premium income for the three months ended March 31, 2024 and 2023, respectively. The Company would be liable for the reinsured risks ceded to other companies to the extent that such reinsuring companies are unable to meet their obligations.

The Company owns a variety of investments associated with the oil and gas industry. These investments represent approximately 30% and 28% of the Company’s total invested assets as of March 31, 2024 and December 31, 2023, respectively. The following table provides an allocation of the oil and gas investments by type.

March 31, 2024
 
Land, Minerals &
Royalty Interests
   
Exploration
   
Total
 
Fixed maturities, at fair value
 
$
0
   
$
1,065,330
   
$
1,065,330
 
Equity securities, at fair value
   
89,840,001
     
0
     
89,840,001
 
Equity securities, at cost
   
5,547,263
     
0
     
5,547,263
 
Investment real estate
   
6,967,353
     
0
     
6,967,353
 
Notes receivable
   
2,000,000
     
0
     
2,000,000
 
Total
 
$
104,354,617
   
$
1,065,330
   
$
105,419,947
 

December 31, 2023
 
Land, Minerals &
Royalty Interests
   
Exploration
   
Total
 
Fixed maturities, at fair value
 
$
0
   
$
1,075,240
   
$
1,075,240
 
Equity securities, at fair value
   
84,066,203
     
0
     
84,066,203
 
Equity securities, at cost
   
5,826,381
     
0
     
5,826,381
 
Investment real estate
   
7,383,851
     
0
     
7,383,851
 
Notes receivable
   
2,000,000
     
0
     
2,000,000
 
Total
 
$
99,276,435
   
$
1,075,240
   
$
100,351,675
 

At March 31, 2024 and December 31, 2023, the Company owned 4 equity securities that represented approximately 75% and 73%, respectively, of the total investments associated with the oil and gas industry.

The Company’s results of operations and financial condition have in the past been, and may in the future be, adversely affected by the degree of certain industry specific concentrations in the Company’s investment portfolio. The Company has significant exposure to investments associated with the oil and gas industry. Events or developments that have a negative effect on the oil and gas industry may adversely affect the valuation of our investments in this specific industry. The Company’s ability to sell its investments associated with the oil and gas industry may be limited.



Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following is Management's discussion and analysis of the financial condition and results of operations of UTG, Inc. and its subsidiaries (collectively with the Parent, the "Company").  The following discussion of the financial condition and results of operations of the Company should be read in conjunction with, and is qualified in its entirety by reference to, the Consolidated Financial Statements of the Company and the related Notes thereto appearing in the Company's annual report on Form 10-K for the year ended  December 31, 2023, as filed with the Securities and Exchange Commission, and our unaudited Condensed Consolidated Financial Statements and related Notes thereto appearing elsewhere in this quarterly report.

Cautionary Statement Regarding Forward-Looking Statements

This report on Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are intended to be covered by the safe harbors created by those laws. We have based our forward-looking statements on our current expectations and projections about future events. Our forward-looking statements include information about possible or assumed future results of operations. All statements, other than statements of historical facts, included or incorporated by reference in this report that address activities, events or developments that we expect or anticipate may occur in the future, including such things as the growth of our business and operations, our business strategy, competitive strengths, goals, plans, future capital expenditures and references to future successes may be considered forward-looking statements. Also, when we use words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “probably,” or similar expressions, we are making forward-looking statements.

Numerous risks and uncertainties may impact the matters addressed by our forward-looking statements, any of which could negatively and materially affect our future financial results and performance.

Although we believe that the assumptions underlying our forward-looking statements are reasonable, any of these assumptions, and, therefore, the forward-looking statements based on these assumptions, could themselves prove to be inaccurate. In light of the significant uncertainties inherent in the forward-looking statements that are included in this report, our inclusion of this information is not a representation by us or any other person that our objectives and plans will be achieved. In light of these risks, uncertainties and assumptions, any forward-looking event discussed in this report may not occur.  Our forward-looking statements speak only as of the date made, and we undertake no obligation to update or review any forward-looking statement, whether as a result of new information, future events or other developments, unless the securities laws require us to do so.

Overview

UTG, Inc., a Delaware corporation, is a life insurance holding company.  The Company’s dominant business is individual life insurance, which includes the servicing of existing insurance policies in-force, the acquisition of other companies in the life insurance business, the acquisition of blocks of business and the administration and processing of life insurance business for other entities.

UTG has a strong philanthropic program.  The Company generally allocates a portion of its earnings to be used for its philanthropic efforts primarily targeted to Christ-centered organizations or organizations that help the weak or poor.  The Company also encourages its staff to be involved on a personal level through monetary giving, volunteerism and use of their talents to assist those less fortunate than themselves.  Through these efforts, the Company hopes to make a positive difference in the local community, state, nation and world.

Critical Accounting Policies

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 reported amounts and related disclosures. Actual results could differ significantly from those estimates.  The Company has identified certain estimates that involve a higher degree of judgment and are subject to a significant degree of variability.  The Company's critical accounting policies and the related estimates considered most significant by Management are disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2023Management has identified the accounting policies related to cost of insurance acquired, assumptions and judgments utilized in determining if declines in fair values of investments are other-than-temporary, and valuation methods for investments that are not actively traded as those, due to the judgments, estimates and assumptions inherent in those policies, are critical to an understanding of the Company's Condensed Consolidated Financial Statements and this Management's Discussion and Analysis.

During the three-months ended March 31, 2024, there were no additions to or changes in the critical accounting policies disclosed in the 2023 Form 10-K.




Results of Operations

On a consolidated basis, the Company reported net income attributable to common shareholders of approximately $9.1 million for the three-month period ended March 31, 2024.

For the three-month period ended March 31, 2023, the Company reported a net loss attributable to common shareholders of approximately $(6.9) million.

Revenues

For the three-month period ended March 31, 2024, the Company reported total revenues of approximately $16.6 million and for the same period in 2023 total revenues of approximately $(3.0) million.

The variance in total revenue between first quarter 2023 and 2024 results is primarily the result of the change in the fair value of equity securities. The Company reported a year-to-date 2024 gain in the change in the fair value of equity securities of approximately $12.0 million and a first quarter 2023 loss of approximately $(8.6) million.  The stock markets have experienced volatility in recent periods, which in general, should always be expected.

This line item is material to the results reported in the Condensed Consolidated Statements of Operations, and this line item can also be extremely volatile, as it reflects changes in the stock market. While these results can be material and volatile, most of the equity holdings of the Company were acquired with a long-term view, thus making these intermediate changes in value of less concern to Management. Management monitors its equity holdings looking more at the specific entity and market it is in relative to performance and less to changes due to general market swings that occur over the holding period of the investment.

The Company reported revenue before net investment gains (losses) of approximately $4.6 million and $4.9 million for the three-month-periods ended March 31, 2024 and 2023, respectively.  The decline in the 2024 results, when compared to 2023, are the result of a decline in net investment income in the first quarter.

The following table summarizes the Company's investment performance.

 
 
Three Months Ended March 31,
 
   
2024
   
2023
 
Net investment income
 
$
3,048,789
   
$
3,318,165
 
Net investment gains
 
$
37,470
   
$
716,300
 
Change in net unrealized investment gains (losses) on equity securities, pre-tax
 
$
12,020,406
   
$
(8,645,474
)

The following table reflects net investment income of the Company:

 
Three Months Ended
 
   
March 31,
 
   
2024
   
2023
 
Fixed maturities
 
$
1,037,852
   
$
1,055,308
 
Equity securities
   
421,674
     
961,267
 
Trading securities
   
(7,301
)
   
0
 
Mortgage loans
   
208,856
     
338,409
 
Real estate
   
1,754,841
     
1,613,907
 
Notes receivable
   
311,422
     
445,318
 
Policy loans
   
100,958
     
107,363
 
Short-term investments
   
332,605
     
57,376
 
Cash and cash equivalents
   
304,827
     
157,873
 
Total consolidated investment income
   
4,465,734
     
4,736,821
 
Investment expenses
   
(1,416,945
)
   
(1,418,656
)
Consolidated net investment income
 
$
3,048,789
   
$
3,318,165
 

Net investment income represented 66% and 68% of the Company's revenue before net investment gains (losses) as of March 31, 2024 and 2023, respectively.  When comparing current and prior year results, net investment income was comparable in a majority of the investment categories outside of the equity securities, mortgage loans, notes receivable and short term, cash and cash equivalents  investment portfolios.

Beginning in March 2022 and ending in July 2023, the Federal Open Market Committee (“FOMC”) aggressively raised interest rates to fight inflation. During this time period, the interest rate environment experienced eleven rate increases totaling 5.25%, including four increases during the first part of 2023. While these actions had a negative impact on some of our investments currently owned, this has also allowed for better yields on cash balances and recent investments acquired as investments mature.

Earnings from the equity securities investment portfolio represented approximately 9% and 20% of the total consolidated investment income reported by the Company during the three-month periods ended March 31, 2024 and 2023, respectively.  Income from the equity securities portfolio was down approximately 56% or $540,000 when comparing first quarter 2024 and 2023 results.  The majority of the decline in equity securities earnings is the result of lower dividends received on certain oil and gas equity holdings.  Oil prices were high during much of 2022 and returned to more normalized levels during 2023 and has remained relatively stable into 2024.  In early 2023, the dividends received on these investments remained elevated compared to recent history as the cash flows from the higher prices worked their way through the entities and out to investors through dividends.  After first quarter 2023, the Company saw dividends from oil and gas equity investments decline with the change in the price of oil.

Mortgage loan investment income declined approximately 38%, or $130,000 when comparing first quarter 2024 to 2023.  This is the result of a large pay-off on a mortgage loan in the latter part of 2023.

The earnings reported by the cash and short-term investments represented 14% and 5% of the total consolidated investment income reported by the Company during the three-month periods ended March 31, 2024 and 2023, respectively.  The increase in earnings in this category is the result of a combination of higher cash and short-term holdings in 2024 and from increased interest rates received from banks and other deposit institutions in 2024 compared to 2023.

The following table reflects net realized investment gains (losses) for the three months ended March 31:

   
2024
   
2023
 
Fixed maturities available for sale
 
$
0
   
$
20,833
 
Equity securities
   
0
     
85,184
 
Real estate
   
37,461
     
586,774
 
Short-term investments
   
9
     
23,509
 
Consolidated net realized investment gains
   
37,470
     
716,300
 
Change in fair value of equity securities
   
12,020,406
     
(8,645,474
)
Net investment gains (losses)
 
$
12,057,876
   
$
(7,929,174
)
 
Realized investment gains are the result of one-time events and are expected to vary from year to year.

The sale of one small equity security holding represents all the realized investment gains from equity securities during 2023. During the first quarter of 2024, the Company did not sell any of its equity holdings.

In first quarter 2024, the Company reported realized gains on real estate of $37,461.  This was the result of the sale of two smaller parcels of property located in Kentucky.  The 2023 real estate gains are the result of sales of real estate in Kentucky that included a land parcel that produced a gain of approximately $480,000.

The Company reported a change in the fair value of equity securities of approximately $12.0 million and $(8.6) million for the threee-month periods ended March 31, 2024, and 2023, respectively.  This line item is material to the results reported in the Condensed Consolidated Statements of Operations, and this line item can also be extremely volatile, as it reflects changes in the stock market. While these results can be material and volatile, most of the equity holdings of the Company were acquired with a long-term view, thus making these intermediate changes in value of less concern to Management. Management monitors its equity holdings looking more at the specific entity and market it is in relative to performance and less to changes due to general market swings that occur over the holding period of the investment.

Equity investments primarily in the oil and gas area represent almost all the unrealized gains reported in 2024 and unrealized losses reported in 2023. For 2023, most all of the negative results occurred in the first quarter. Since that time, we started to recognize a slight rebound, and it appears to be the result of market stabilization. Periodic pull backs and rallies are expected by Management.  Management believes its current equity investments continue to be solid investments for the Company and have further growth potential; however, changes in market conditions could cause volatility in market prices.

In summary, the Company’s basis for future revenue is expected to come from the following primary sources: Conservation of business currently in-force, the maximization of investment earnings and the acquisition of other companies or policy blocks in the life insurance business. Management has placed a significant emphasis on the development of these revenue sources to enhance these opportunities.

Expenses

The Company reported total benefits and other expenses of approximately $5.0 million for the three-month period ended March 31, 2024, a decrease of approximately 13% from the same period in 2023. Benefits, claims and settlement expenses represented approximately 56% and 58% of the Company's total expenses for the three-month periods ended March 31, 2024 and 2023, respectively. The other major expense category of the Company is operating expenses, which represented approximately 41% and 39% of the Company's total expenses for the three-month periods ended March 31, 2024 and 2023, respectively.

Life benefits, claims and settlement expenses, net of reinsurance benefits and claims were down approximately 17% when comparing the three-month periods ended March 31, 2024, and 2023.  Policy claims net of reinsurance were approximately $557,000 less in the first quarter 2024 compared to first quarter 2023.  Policy claims vary from period to period and therefore, fluctuations in mortality are to be expected and are not considered unusual by Management.

Changes in policyholder reserves, or future policy benefits, also impact this line item.  Reserves are calculated on an individual policy basis and generally increase over the life of the policy as a result of additional premium payments and acknowledgment of increased risk as the insured continues to age.

The short-term impact of policy surrenders is negligible since a reserve for future policy benefits payable is held which is, at a minimum, equal to and generally greater than the cash surrender value of a policy.  The benefit of fewer policy surrenders is primarily received over a longer time period through the retention of the Company’s asset base.

Operating expenses decreased approximately 8% in the three-month period ended March 31, 2024 as compared to the same period in 2023.  There are two expense items that comprise the majority of the decrease in operating expenses, salary and charitable contributions.  Salary expense was approximately $77,000 less in first quarter 2024 compared to 2023 and charitable expense was $85,000 less in first quarter 2024 compared to 2023.  Charitable expense fluctuates based on reported taxable income of the Company.  Expenses in the remaining categories are comparable between years.

As mentioned above in the Overview section of the Management Discussion and Analysis, UTG has a strong philanthropic program.  The Company generally allocates a portion of its earnings to be used for its philanthropic efforts primarily targeted to Christ-centered organizations or organizations that help the weak or poor.  Charitable contributions made by the Company are expected to vary from year to year depending on the earnings of the Company.

Net amortization of cost of insurance acquired decreased approximately 4% when comparing current and prior year activity. Cost of insurance acquired is established when an insurance company is acquired or when the Company acquires a block of in-force business.  The Company assigns a portion of its cost to the right to receive future profits from insurance contracts existing at the date of the acquisition.  Cost of insurance acquired is amortized with interest in relation to expected future profits, including direct charge-offs for any excess of the unamortized asset over the projected future profits. The interest rates may vary due to risk analysis performed at the time of acquisition on the business acquired. The Company utilizes a 12% discount rate on the remaining unamortized business.  The amortization is adjusted retrospectively when estimates of current or future gross profits to be realized from a group of products are revised.  Amortization of cost of insurance acquired is particularly sensitive to changes in interest rate spreads and persistency of certain blocks of insurance in-force.  This expense is expected to decrease unless the Company acquires a new block of business.

Management continues to place significant emphasis on expense monitoring and cost containment. Maintaining administrative efficiencies directly impacts net income.

Financial Condition

Investment Information

Investments are the largest asset group of the Company.  The Company's insurance subsidiary is regulated by insurance statutes and regulations as to the type of investments they are permitted to make, and the amount of funds that may be used for any one type of investment.

The following table reflects, by investment category, the investments held by the Company:

   
March 31, 2024
   
As a % of Total Investments
   
As a % of Total Assets
 
Fixed maturities
 
$
96,982,142
     
28
%
   
23
%
Held to maturity redeemable preferred stock
   
2,500,000
     
1
%
   
1
%
Equity securities, at fair value
   
168,319,975
     
47
%
   
39
%
Equity securities, at cost
   
15,816,798
     
4
%
   
4
%
Mortgage loans
   
15,702,437
     
4
%
   
4
%
Notes receivable
   
14,379,379
     
4
%
   
3
%
Real estate
   
21,371,982
     
6
%
   
5
%
Policy loans
   
5,994,931
     
2
%
   
1
%
Short-term investments
   
13,714,840
     
4
%
   
3
%
Total investments
 
$
354,782,484
     
100
%
   
83
%

   
December 31, 2023
   
As a % of Total Investments
   
As a % of Total Assets
 
Fixed maturities
 
$
103,409,836
     
29
%
   
24
%
Held to maturity redeemable preferred stock
   
2,500,000
     
1
%
   
1
%
Equity securities, at fair value
   
156,550,812
     
43
%
   
35
%
Equity securities, at cost
   
15,977,368
     
4
%
   
4
%
Mortgage loans
   
15,318,176
     
4
%
   
3
%
Notes receivable
   
14,009,225
     
4
%
   
3
%
Real estate
   
21,975,120
     
6
%
   
5
%
Policy loans
   
6,018,248
     
2
%
   
1
%
Short-term investments
   
29,132,236
     
7
%
   
7
%
Total investments
 
$
364,891,021
     
100
%
   
83
%

The Company's investments are generally managed to match related insurance and policyholder liabilities.  The comparison of investment return with insurance or investment product crediting rates establishes an interest spread.  Interest crediting rates on adjustable-rate policies have been reduced to their guaranteed minimum rates, and as such, cannot be lowered any further.  Policy interest crediting rate changes and expense load changes become effective on an individual policy basis on the next policy anniversary.  Therefore, it takes a full year from the time the change was determined for the full impact of such change to be realized.  If interest rates decline in the future, the Company will not be able to lower rates and both net investment income and net income will be impacted negatively.

The Company’s total investments represented 83% of the Company’s total assets as of March 31, 2024 and December 31, 2023, respectively. Fixed maturities and equity securities consistently represented a substantial portion, 80% and 77%, of the total investments during 2024 and 2023, respectively.  The overall investment mix, as a percentage of total investments, remained fairly consistent when comparing the respective investments held as of March 31, 2024 and December 31, 2023.

As of March 31, 2024, the carrying value of fixed maturity securities in default as to principal or interest was immaterial in the context of consolidated assets, shareholders’ equity or results from operations.  To provide additional flexibility and liquidity, the Company has identified all fixed maturity securities as "investments available for sale".  Investments available for sale are carried at market value, with changes in market value charged directly to the other comprehensive component of shareholders' equity. Changes in the market value of available for sale securities resulted in net unrealized gains (losses) of approximately $(1.1) million and $2.2 million as of March 31, 2024 and December 31, 2023, respectively. The variance in the net unrealized gains and losses is the result of normal market fluctuations mainly related to changes in interest rates in the marketplace.

Management continues to view the Company’s investment portfolio with utmost priority. Significant time has been spent internally researching the Company’s risk and communicating with outside investment advisors about the current investment environment and ways to ensure preservation of capital and mitigate losses.  Management has put extensive efforts into evaluating the investment holdings.  Additionally, members of the Company’s Board of Directors and investment committee have been solicited for advice and provided with information.  Management reviews the Company’s entire portfolio on a security level basis to be sure all understand our holdings, potential risks and underlying credit supporting the investments.  Management intends to continue its close monitoring of its bond holdings and other investments for possible deterioration or market condition changes.  Future events may result in Management’s determination that certain current investment holdings may need to be sold which could result in gains or losses in future periods.  Such future events could also result in other than temporary declines in value that could result in future period impairment losses.

There are a number of significant risks and uncertainties inherent in the process of monitoring impairments and determining if impairment is other-than-temporary. These risks and uncertainties related to Management’s assessment of other-than-temporary declines in value include but are not limited to: the risk that Company's assessment of an issuer's ability to meet all of its contractual obligations will change based on changes in the credit characteristics of that issuer; the risk that the economic outlook will be worse than expected or have more of an impact on the issuer than anticipated; the risk that fraudulent information could be provided to the Company's investment professionals who determine the fair value estimates.
Capital Resources

Total shareholders' equity increased by approximately 5% as of March 31, 2024, compared to December 31, 2023. The increase is mainly attributable to an increase in retained earnings, which is the result of the current year net income reported by the Company partially offset by the decline in market value of the available for sale fixed maturities portfolio.

Liquidity

Liquidity provides the Company with the ability to meet on demand the cash commitments required by its business operations and financial obligations.  The Company’s liquidity is primarily derived from cash balances, a portfolio of marketable securities and line of credit facilities.  The Company has two principal needs for cash – the insurance company’s contractual obligations to policyholders and the payment of operating expenses.

Parent Company Liquidity

UTG is a holding company that has no day-to-day operations of its own.  Cash flows from UTG’s insurance subsidiary, UG, are used to pay costs associated with maintaining the Company in good standing with states in which it does business and purchasing outstanding shares of UTG stock.  UTG's cash flow is dependent on management fees received from its insurance subsidiary, stockholder dividends from its subsidiary and earnings received on cash balances.  As of March 31, 2024, and December 31, 2023, substantially all of the consolidated shareholders’ equity represents net assets of its subsidiaries. As of March 31, 2024, the Parent company has received no dividends from its insurance subsidiary. Certain restrictions exist on the payment of dividends from the insurance subsidiary to the Parent company.  For further information regarding the restrictions on the payment of dividends by the insurance subsidiary, see Note 6 – Shareholders’ Equity in the Notes to the Condensed  Consolidated Financial Statements.  Although these restrictions exist, dividend availability from the insurance subsidiary has historically been sufficient to meet the cash flow needs of the Parent company.
 
Insurance Subsidiary Liquidity

Sources of cash flows for the insurance subsidiary primarily consist of premium and investment income.  Cash outflows from operations include policy benefit payments, administrative expenses, taxes and dividends to the Parent company.

Short-Term Borrowings

During October of 2023, the Federal Home Loan Bank approved the renewal of UG’s Cash Management Advance Application (“CMA”). The CMA is a source of overnight liquidity utilized to address the day-to-day cash needs of a Company. The CMA gives the company the option of selecting a variable rate of interest for up to 90 days or a fixed rate for a maximum of 30 days.  The variable rate CMA is prepayable at any time without a fee, while the fixed CMA is not prepayable prior to maturity. The Company has pledged bonds with a collateral lendable value of $19.7 million as of March 31, 2024. During the fourth quarter of 2023, the Company borrowed $19 million and planned to utilize the funds for investing activities. During the first quarter of 2024, the Company repaid the entire outstanding principal balance.

Consolidated Liquidity

Cash used in operating activities was approximately $2 million in 2024 and cash provided by operating activities was approximately $2 million in 2023. Sources of operating cash flows of the Company, as with most insurance entities, is comprised primarily of premiums received on life insurance products and income earned on investments.  Uses of operating cash flows consist primarily of payments of benefits to policyholders and beneficiaries and operating expenses.  The Company has not marketed any significant new products for several years.  As such, premium revenues continue to decline.  Management anticipates future cash flows from operations to remain similar to historic trends.

During 2024, the Company’s investing activities provided net cash of approximately $20.7 million and used net cash of approximately $58,000 in 2023. The Company recognized proceeds of approximately $26.0 million and $14.1 million from investments sold and matured in 2024 and 2023, respectively.  The Company used approximately $5.3 million and $14.2 million to acquire investments during 2024 and 2023, respectively.  The net cash provided by or used in investing activities is expected to vary from year to year depending on market conditions and management’s ability to find and negotiate favorable investment contracts.

Net cash used in financing activities was approximately $19 million during the first quarter of 2024 and 2023. As of March 31, 2024 and 2023, the Company had no debt outstanding with third parties.

The Company had cash and cash equivalents of approximately $40.8 million and $41.2 million as of March 31, 2024 and December 31, 2023, respectively.  The Company has a portfolio of marketable fixed maturity securities that could be sold, if an unexpected event were to occur.  These securities had a fair value of approximately $99.5 million at March 31, 2024. However, the strong cash flows from investing activities, investment maturities and the availability of the line of credit facilities make it unlikely that the Company would need to sell securities for liquidity purposes.

Management believes the overall sources of liquidity available will be sufficient to satisfy its financial obligations.

ITEM 4.  CONTROLS AND PROCEDURES

The Company maintains a set of disclosure controls and procedures designed to ensure that information required to be disclosed in reports that it files or submits under the Securities Exchange Act of 1934, as amended (the Exchange Act), is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. In addition, the disclosure controls and procedures ensure that information required to be disclosed is accumulated and communicated to Management, including the principal executive officer and principal financial officer, allowing timely decisions regarding required disclosure. Under the supervision and with the participation of our Management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Exchange Act. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.

PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

NONE

ITEM 1A.  RISK FACTORS

NONE

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

NONE

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

NONE

ITEM 4.  MINE SAFETY DISCLOSURES

NONE

ITEM 5.  OTHER INFORMATION

NONE

ITEM 6.  EXHIBITS

Exhibit Number
Description
Certification of Jesse T. Correll, Chairman of the Board, Chief Executive Officer and President of UTG, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Certification of Theodore C. Miller, Chief Financial Officer, Senior Vice President and Chief Financial Officer of UTG, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Certification of Jesse T. Correll, Chairman of the Board, Chief Executive Officer and President of UTG, as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Certification of Theodore C. Miller, Chief Financial Officer, Senior Vice President and Chief Financial Officer of UTG, as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
**101
The following financial statements from the Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive Income, (iv) Condensed Consolidated Statements of Shareholders' Equity, (v) Condensed Consolidated Statements of Cash Flows and (vi) Notes to the Condensed Consolidated Financial Statements (detail tagged).
**104
Cover Page Interactive Data File (formatted in iXBRL and included in exhibit 101).

* Filed herewith


SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


UTG, INC.
(Registrant)

Date:
May 13, 2024
 
By
/s/ Jesse T. Correll
       
Jesse T. Correll
       
Chairman of the Board, Chief Executive Officer, President, and Director
(Principal Executive Officer)



Date:
May 13, 2024
 
By
/s/ Theodore C. Miller
       
Theodore C. Miller
       
Chief Financial Officer and
Senior Vice President
(Principal Financial and Accounting Officer)


 
Exhibit 31.1
 
CERTIFICATIONS 
   
I, Jesse T. Correll, Chairman of the Board, Chief Executive Officer, and President of UTG, Inc., certify that:
 
   
1.
 
I have reviewed this quarterly report on Form 10-Q of the registrant, UTG, Inc.;
 
               
2.
 
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
               
3.
 
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
       
4.
 
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)and 15d-15(f)) for the registrant and have:
 
       
   
a.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
         
   
b.
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
         
   
c.
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
         
   
d.
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
 
         
5.
 
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
 
       
   
a.
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
 
         
   
b.
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.
 
         

Date:
May 13, 2024
By: 
/s/ Jesse T. Correll
   
Chairman of the Board,
   
  Chief Executive Officer, and President
 

 
 
Exhibit 31.2
 
CERTIFICATIONS
 
   
I, Theodore C. Miller,  Senior Vice President and Chief Financial Officer of UTG, Inc., certify that:
 
       
1.
 
I have reviewed this quarterly report on Form 10-Q of the registrant, UTG, Inc.;
 
               
2.
 
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
               
3.
 
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
       
4.
 
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)and 15d-15(f)) for the registrant and have:
 
       
   
a.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
         
   
b.
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
         
   
c.
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
         
   
d.
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
 
         
5.
 
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
 
       
   
a.
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
 
         
   
b.
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.
 
         

Date:
May 13, 2024
By: 
/s/ Theodore C. Miller
   
Senior Vice President and
   
  Chief Financial Officer

Exhibit 32.1




CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of UTG, Inc. (the "Company") for the period ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the "Report") I, Jesse T. Correll, Chairman of the Board, Chief Executive Officer, and President of the Company, certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) 
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
   
(2) 
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company


Date: 
May 13, 2024
By: 
/s/ Jesse T. Correll
     
Jesse T. Correll
     
Chairman of the Board,
     
Chief Executive Officer, and President


Exhibit 32.2




CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of UTG, Inc. (the "Company") for the period ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the "Report") I, Theodore C. Miller, Senior Vice President and Chief Financial Officer of the Company, certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) 
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
   
(2) 
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company


Date: 
 May 13, 2024
By: 
/s/ Theodore C. Miller
     
Theodore C. Miller
     
Senior Vice President and
     
  Chief Financial Officer


v3.24.1.1.u2
Document and Entity Information - shares
3 Months Ended
Mar. 31, 2024
Apr. 30, 2024
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Quarterly Report true  
Document Period End Date Mar. 31, 2024  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2024  
Document Fiscal Period Focus Q1  
Document Transition Report false  
Entity File Number 000-16867  
Entity Registrant Name UTG, INC.  
Entity Central Index Key 0000832480  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 20-2907892  
Entity Address, Address Line One 205 North Depot Street  
Entity Address, City or Town Stanford  
Entity Address, State or Province KY  
Entity Address, Postal Zip Code 40484  
City Area Code 217  
Local Phone Number 241-6300  
Title of 12(b) Security Common Stock, stated value $.001 per share  
No Trading Symbol Flag true  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   3,169,527
v3.24.1.1.u2
Condensed Consolidated Balance Sheets (Unaudited) - USD ($)
Mar. 31, 2024
Dec. 31, 2023
[1]
Investments, available for sale:    
Fixed maturities, at fair value (amortized cost $104,570,183 and $109,554,738) $ 96,982,142 $ 103,409,836
Held to maturity redeemable preferred stock, at amortized cost 2,500,000 2,500,000
Equity securities, at fair value (cost $89,136,650 and $89,387,893) 168,319,975 156,550,812
Equity securities, at cost 15,816,798 15,977,368
Mortgage loans on real estate, at amortized cost (net of credit loss reserve of $281,000 and $274,000) 15,702,437 15,318,176
Notes receivable (net of credit loss reserve of $258,000 and $250,000) 14,379,379 14,009,225
Investment real estate, net 21,371,982 21,975,120
Policy loans 5,994,931 6,018,248
Short-term investments 13,714,840 29,132,236
Total investments 354,782,484 364,891,021
Cash and cash equivalents 40,826,224 41,185,196
Accrued investment income 1,720,261 2,001,064
Reinsurance receivables:    
Future policy benefits 24,180,623 23,847,623
Policy claims and other benefits 4,301,786 4,734,575
Cost of insurance acquired 1,877,942 2,036,896
Income tax receivable 2,082,822 2,128,027
Other assets 1,028,011 884,531
Total assets 430,800,153 441,708,933
Policy liabilities and accruals:    
Future policyholder benefits 222,835,881 223,757,860
Policy claims and benefits payable 3,534,448 4,188,917
Other policyholder funds 263,297 260,892
Dividend and endowment accumulations 14,698,020 14,749,258
Deferred income taxes 14,511,204 12,426,840
Notes payable 0 19,000,000
Trading securities, at fair value (proceeds $102,699 and $0) 110,000 0
Other liabilities 4,928,666 5,635,373
Total liabilities 260,881,516 280,019,140
Shareholders' equity:    
Common stock - no par value, stated value $.001 per share. Authorized 7,000,000 shares - 3,171,666 and 3,165,320 shares issued 3,173 3,167
Additional paid-in capital 32,804,211 32,613,817
Retained earnings 142,641,303 133,491,797
Accumulated other comprehensive loss (6,022,396) (4,882,317)
Total UTG shareholders' equity 169,426,291 161,226,464
Noncontrolling interests 492,346 463,329
Total shareholders' equity 169,918,637 161,689,793
Total liabilities and shareholders' equity $ 430,800,153 $ 441,708,933
[1] Balance sheet audited at December 31, 2023.
v3.24.1.1.u2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)
Mar. 31, 2024
Dec. 31, 2023
Investments, available for sale:    
Fixed maturities, amortized cost $ 104,570,183 $ 109,554,738
Equity securities, cost 89,136,650 89,387,893
Mortgage loans on real estate, credit loss reserve 281,000 274,000
Notes receivable, credit loss reserve 258,000 250,000
Liabilities:    
Trading securities, proceeds $ 102,699 $ 0
Shareholders' equity:    
Common stock, par value (in dollars per share) $ 0 $ 0
Common stock, stated value (in dollars per share) $ 0.001 $ 0.001
Common stock, authorized (in shares) 7,000,000 7,000,000
Common stock, outstanding (in shares) 3,171,666 3,165,320
v3.24.1.1.u2
Condensed Consolidated Statements of Operations (Unaudited) - USD ($)
3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Revenue:    
Premiums and policy fees $ 2,000,085 $ 2,057,181
Ceded reinsurance premiums and policy fees (529,761) (517,811)
Net investment income 3,048,789 3,318,165
Other income 68,267 36,585
Revenue before net investment gains (losses) 4,587,380 4,894,120
Net investment gains (losses):    
Other realized investment gains, net 37,470 716,300
Change in fair value of equity securities 12,020,406 (8,645,474)
Total net investment gains (losses) 12,057,876 (7,929,174)
Total revenue 16,645,256 (3,035,054)
Benefits, claims and settlement expenses:    
Life 3,644,451 3,649,024
Ceded reinsurance benefits and claims (1,165,352) (613,361)
Annuity 251,735 251,632
Dividends to policyholders 81,277 86,998
Commissions and amortization of deferred policy acquisition costs (30,283) (27,856)
Amortization of cost of insurance acquired 158,954 165,314
Operating expenses 2,081,722 2,271,876
Interest expense 11,600 13,923
Total benefits and other expenses 5,034,104 5,797,550
Income (loss) before income taxes 11,611,152 (8,832,604)
Income tax expense (benefit) 2,432,629 (1,920,852)
Net income (loss) 9,178,523 (6,911,752)
Net income attributable to noncontrolling interests (29,017) (30,490)
Net income (loss) attributable to common shareholders $ 9,149,506 $ (6,942,242)
Amounts attributable to common shareholders    
Basic income (loss) per share (in dollars per share) $ 2.89 $ (2.18)
Diluted income (loss) per share (in dollars per share) $ 2.89 $ (2.18)
Basic weighted average shares outstanding (in shares) 3,169,375 3,189,100
Diluted weighted average shares outstanding (in shares) 3,169,375 3,189,100
v3.24.1.1.u2
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($)
3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) [Abstract]    
Net income (loss) $ 9,178,523 $ (6,911,752)
Other comprehensive income (loss):    
Unrealized holding gains (losses) arising during period, pre-tax (1,443,139) 2,810,499
Tax (expense) benefit on unrealized holding gains (losses) arising during the period 303,060 (586,749)
Unrealized holding gains (losses) arising during period, net of tax (1,140,079) 2,223,750
Less reclassification adjustment for gains included in net income 0 (20,833)
Tax expense for gains included in net income (loss) 0 4,375
Reclassification adjustment for gains included in net income, net of tax 0 (16,458)
Subtotal: Other comprehensive income (loss), net of tax (1,140,079) 2,207,292
Comprehensive income 8,038,444 (4,704,460)
Less comprehensive income attributable to noncontrolling interests (29,017) (30,490)
Comprehensive income attributable to UTG, Inc. $ 8,009,427 $ (4,734,950)
v3.24.1.1.u2
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($)
Common Stock [Member]
Additional Paid-In Capital [Member]
Retained Earnings [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Noncontrolling Interest [Member]
Total
Cumulative Effect, Period of Adoption, Adjustment [Member]
Common Stock [Member]
Cumulative Effect, Period of Adoption, Adjustment [Member]
Additional Paid-In Capital [Member]
Cumulative Effect, Period of Adoption, Adjustment [Member]
Retained Earnings [Member]
Cumulative Effect, Period of Adoption, Adjustment [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Cumulative Effect, Period of Adoption, Adjustment [Member]
Noncontrolling Interest [Member]
Cumulative Effect, Period of Adoption, Adjustment [Member]
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Common Stock [Member]
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Additional Paid-In Capital [Member]
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Retained Earnings [Member]
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Noncontrolling Interest [Member]
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Balance at Dec. 31, 2022 $ 3,166 $ 32,693,972 $ 131,989,352 $ (7,111,586) $ 453,472 $ 158,028,376             $ 3,166 $ 32,693,972 $ 131,535,102 $ (7,111,586) $ 453,472 $ 157,574,126
Balance (ASU 2016-13 [Member]) at Dec. 31, 2022             $ 0 $ 0 $ (454,250) $ 0 $ 0 $ (454,250)            
Common stock issued during year 27 674,363 0 0 0 674,390                        
Treasury shares acquired (4) (100,224) 0 0 0 (100,228)                        
Net loss attributable to common shareholders 0 0 (6,942,242) 0 0 (6,942,242)                        
Unrealized holding income (loss) on securities net of noncontrolling interest and reclassification adjustment and taxes 0 0 0 2,207,292 0 2,207,292                        
Gain attributable to noncontrolling interest 0 0 0 0 30,490 30,490                        
Balance at Mar. 31, 2023 3,189 33,268,111 124,592,860 (4,904,294) 483,962 153,443,828                        
Balance at Dec. 31, 2023 3,167 32,613,817 133,491,797 (4,882,317) 463,329 161,689,793 [1]                        
Common stock issued during year 10 299,304 0 0 0 299,314                        
Treasury shares acquired (4) (108,910) 0 0 0 (108,914)                        
Net loss attributable to common shareholders 0 0 9,149,506 0 0 9,149,506                        
Unrealized holding income (loss) on securities net of noncontrolling interest and reclassification adjustment and taxes 0 0 0 (1,140,079) 0 (1,140,079)                        
Gain attributable to noncontrolling interest 0 0 0 0 29,017 29,017                        
Balance at Mar. 31, 2024 $ 3,173 $ 32,804,211 $ 142,641,303 $ (6,022,396) $ 492,346 $ 169,918,637                        
[1] Balance sheet audited at December 31, 2023.
v3.24.1.1.u2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Cash flows from operating activities:    
Net income (loss) $ 9,178,523 $ (6,911,752)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:    
Accretion of investments (350,049) (92,439)
Realized investment gains, net (37,470) (716,300)
Change in fair value of equity securities (12,020,406) 8,645,474
Unrealized trading losses included in income 7,301 0
Amortization of cost of insurance acquired 158,954 165,314
Provision for deferred income taxes 2,387,424 (1,798,119)
Depreciation and depletion 462,855 174,692
Stock-based compensation 299,314 674,390
Charges for mortality and administration of universal life and annuity products (1,374,829) (1,448,416)
Interest credited to account balances 901,542 921,074
Change in accrued investment income 280,803 310,385
Change in reinsurance receivables 99,789 368,886
Change in policy liabilities and accruals (1,219,854) (1,431,856)
Change in income taxes receivable (payable) 45,205 (122,733)
Change in other assets and liabilities, net (835,180) 3,257,935
Net cash provided by (used in) operating activities (2,016,078) 1,996,535
Proceeds from investments sold and matured:    
Fixed maturities available for sale 5,000,000 20,833
Equity securities 3,519,729 958,779
Trading securities 102,699 0
Mortgage loans 209,928 984,587
Real estate 722,925 2,046,096
Notes receivable 421,847 66,622
Policy loans 247,513 280,253
Short-term investments 15,750,000 9,740,815
Total proceeds from investments sold and matured 25,974,641 14,097,985
Cost of investments acquired:    
Equity securities (3,107,915) (1,393,053)
Mortgage loans (599,189) 0
Real estate (545,180) (1,375,010)
Notes receivable (800,000) (1,478,100)
Policy loans (224,197) (208,423)
Short-term investments 0 (9,701,297)
Total cost of investments acquired (5,276,481) (14,155,883)
Net cash provided by (used in) investing activities 20,698,160 (57,898)
Cash flows from financing activities:    
Policyholder contract deposits 1,046,208 1,110,855
Policyholder contract withdrawals (978,348) (956,744)
Payments of principal on notes payable/line of credit (19,000,000) (19,000,000)
Purchase of treasury stock (108,914) (100,228)
Net cash used in financing activities (19,041,054) (18,946,117)
Net decrease in cash and cash equivalents (358,972) (17,007,480)
Cash and cash equivalents at beginning of period 41,185,196 45,290,385
Cash and cash equivalents at end of period $ 40,826,224 $ 28,282,905
v3.24.1.1.u2
Basis of Presentation
3 Months Ended
Mar. 31, 2024
Basis of Presentation [Abstract]  
Basis of Presentation
Note 1 – Basis of Presentation

The accompanying Condensed Consolidated Balance Sheet as of March 31, 2024, which has been derived from audited consolidated financial statements, and the unaudited interim Condensed Consolidated Financial Statements include the accounts of UTG, Inc. (the “Parent”) and its subsidiaries (collectively with the Parent, the “Company”).  All significant intercompany accounts and transactions have been eliminated in consolidation.  The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of regulation S-X.  Accordingly, they do not include all of the information and notes required by GAAP for audited annual financial statements.  The information furnished includes all adjustments and accruals of a normal recurring nature, which in the opinion of Management, are necessary for a fair presentation of the results for the interim periods.  The unaudited Condensed Consolidated Financial Statements included herein and these related notes should be read in conjunction with the Company’s consolidated financial statements, and the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023The Company’s results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024 or for any other future period.

This document at times will refer to the Registrant’s largest shareholder, Mr. Jesse T. Correll and certain companies controlled by Mr. Correll.  Mr. Correll holds a majority ownership of First Southern Funding, LLC (“FSF”), a Kentucky corporation, and First Southern Bancorp, Inc. (“FSBI”), a financial services holding company.  FSBI operates through its 100% owned subsidiary bank, First Southern National Bank (“FSNB”).  Banking activities are conducted through multiple locations within south-central and western Kentucky.  Mr. Correll is Chairman of the Board of Directors, Chief Executive Officer, President, and a Director of UTG and is currently UTG’s largest shareholder through his ownership control of FSF, FSBI and affiliates. At March 31, 2024, Mr. Correll owns or controls directly and indirectly approximately 65.89% of UTG’s outstanding stock.

UTG’s life insurance subsidiary, Universal Guaranty Life Insurance Company (“UG”), has several wholly-owned and majority-owned subsidiaries.  The subsidiaries were formed to hold certain real estate investments.  The real estate investments were placed into the limited liability companies and partnerships to provide additional protection to the policyholders and to UG.

Certain amounts in prior periods have been reclassified to conform with the current period presentation.
v3.24.1.1.u2
Recently Issued Accounting Standards
3 Months Ended
Mar. 31, 2024
Recently Issued Accounting Standards [Abstract]  
Recently Issued Accounting Standards
Note 2 – Recently Issued Accounting Standards

During the three months ended March 31, 2024, there were no additions to or changes in the critical accounting policies disclosed in the 2023 Form 10-K.
v3.24.1.1.u2
Investments
3 Months Ended
Mar. 31, 2024
Investments [Abstract]  
Investments
Note 3 – Investments

Investment in Fixed Maturity Securities

The Company’s insurance subsidiary is regulated by insurance statutes and regulations as to the type of investments they are permitted to make, and the amount of funds that may be used for any one type of investment.

Investments in fixed maturity securities are summarized by type as follows:

March 31, 2024
 
Original or Amortized Cost
   
Gross Unrealized Gains
   
Gross Unrealized Losses
   
Fair Value
 
U.S. Government and govt. agencies and authorities
 
$
14,316,438
   
$
0
   
$
(771,996
)
 
$
13,544,442
 
U.S. special revenue and assessments
   
7,527,448
     
0
     
(321,809
)
   
7,205,639
 
All other corporate bonds
   
82,726,297
     
58,784
     
(6,553,020
)
   
76,232,061
 
Redeemable preferred stock
   
2,500,000
     
0
     
0
     
2,500,000
 
Total
 
$
107,070,183
   
$
58,784
   
$
(7,646,825
)
 
$
99,482,142
 

December 31, 2023
 
Original or Amortized Cost
   
Gross Unrealized Gains
   
Gross Unrealized Losses
   
Fair Value
 
U.S. Government and govt. agencies and authorities
 
$
14,316,976
   
$
0
   
$
(729,197
)
 
$
13,587,779
 
U.S. special revenue and assessments
   
7,528,985
     
0
     
(220,527
)
   
7,308,458
 
All other corporate bonds
   
87,708,777
     
89,004
     
(5,284,182
)
   
82,513,599
 
Redeemable preferred stock
   
2,500,000
     
0
     
0
     
2,500,000
 
Total
 
$
112,054,738
   
$
89,004
   
$
(6,233,906
)
 
$
105,909,836
 

The amortized cost and estimated market value of fixed maturity securities at March 31, 2024, by contractual maturity, is shown below.

Fixed Maturity Securities
March 31, 2024
 
Amortized Cost
   
Fair Value
 
Due in one year or less
 
$
9,078,821
   
$
8,968,470
 
Due after one year through five years
   
43,078,621
     
41,313,290
 
Due after five years through ten years
   
5,945,729
     
5,920,055
 
Due after ten years
   
21,809,943
     
19,517,880
 
Fixed maturities with no single maturity date
   
27,157,069
     
23,762,447
 
Total
 
$
107,070,183
   
$
99,482,142
 

Actual maturities may differ from contractual maturities due to the exercise of call or prepayment options.

By insurance statute, the majority of the Company’s investment portfolio is invested in investment grade securities to provide ample protection for policyholders.

Below investment grade debt securities generally provide higher yields and involve greater risks than investment grade debt securities because their issuers typically are more highly leveraged and more vulnerable to adverse economic conditions than investment grade issuers.  In addition, the trading market for these securities is usually more limited than for investment grade debt securities. Debt securities classified as below-investment grade are those that receive a Standard & Poor’s rating of BB+ or below.

The Company held below investment grade investments with an estimated market value of $0 as of March 31, 2024 and December 31, 2023.

The following tables present the estimated fair value and gross unrealized losses of fixed maturity securities in an unrealized loss position:

March 31, 2024
 
Less than 12 months
   
12 months or longer
   
Total
 
   
Fair value
   
Unrealized losses
   
Fair value
   
Unrealized losses
   
Fair value
   
Unrealized losses
 
U.S. Government and govt. agencies and authorities
 
$
1,487,865
     
(13,073
)
   
12,056,577
   
$
(758,923
)
   
13,544,442
   
$
(771,996
)
U.S. Special Revenue and Assessments
   
0
     
0
     
7,205,639
     
(321,809
)
   
7,205,639
     
(321,809
)
All other corporate bonds
   
3,818,194
     
(22,814
)
   
68,629,332
     
(6,530,206
)
   
72,447,526
     
(6,553,020
)
Total fixed maturities
 
$
5,306,059
     
(35,887
)
   
87,891,548
     
(7,610,938
)
   
93,197,607
   
$
(7,646,825
)

December 31, 2023
 
Less than 12 months
   
12 months or longer
   
Total
 
   
Fair value
   
Unrealized losses
   
Fair value
   
Unrealized losses
   
Fair value
   
Unrealized losses
 
U.S. Government and govt. agencies and authorities
 
$
1,497,390
     
(3,696
)
   
12,090,389
   
$
(725,501
)
   
13,587,779
   
$
(729,197
)
U.S. special revenue and assessments
   
0
     
0
     
7,308,458
     
(220,527
)
   
7,308,458
     
(220,527
)
All other corporate bonds
   
544,610
     
(2,319
)
   
73,678,567
     
(5,281,863
)
   
74,223,177
     
(5,284,182
)
Total fixed maturities
 
$
2,042,000
     
(6,015
)
   
93,077,414
   
$
(6,227,891
)
   
95,119,414
   
$
(6,233,906
)

Additional information regarding investments in an unrealized loss position is as follows:

 
Less than 12 months
   
12 months or longer
   
Total
 
As of March 31, 2024
                 
Fixed maturities
   
4
     
45
     
49
 
As of December 31, 2023
                       
Fixed maturities
   
2
     
45
     
47
 

Allowance for Credit Loss - Available for Sale Securities

Management considers a wide range of factors about the security issuer and uses its best judgment in evaluating the cause of the decline in the estimated fair value of the security and in assessing the prospects for near-term recovery. Inherent in management’s evaluation of the security are assumptions and estimates about the operations of the issuer and its future earnings potential. Considerations used in the credit loss evaluation process include, but are not limited to: (1) the extent to which the estimated fair value has been below amortized cost, (2) adverse conditions specifically related to a security, an industry sector, adverse change in the financial condition of the issuer of the security, (3) payment structure of the security and likelihood of the issuer being able to make payments, (4) failure of the issuer to make scheduled interest and principal payments, (5) whether the issuer, or series of issuers or an industry has suffered a catastrophic loss or has exhausted natural resources, (6) whether the Company has the intent to sell or will more likely than not be required to sell a particular security before the decline in estimated fair value below amortized cost recovers,  (7) changes in the rating of the security by a rating agency, and (8) other subjective factors.

Substantially all of the unrealized losses on fixed maturity securities at March 31, 2024 and December 31, 2023 are attributable to changes in market interest rates and general disruptions in the credit market subsequent to purchase. At March 31, 2024, the Company did not intend to sell its securities in an unrealized loss position, and it was not more likely than not that the Company would be required to sell these securities before the anticipated recovery of the remaining amortized cost. Therefore, the Company concluded that these securities had not incurred a credit loss and should not have an allowance for credit loss at March 31, 2024.

Future provisions for credit loss will depend primarily on economic fundamentals, issuer performance, and changes in credit ratings.

Net unrealized losses included in other comprehensive income (loss) for investments classifies as available-for-sale, net of the effect of deferred income taxes, assuming that the depreciation had been realized as of  March 31, 2024 and December 31, 2023:

 
March 31, 2024
   
December 31, 2023
 
Unrealized appreciation (depreciation) on available-for-sale securities
 
$
(7,588,041
)
 
$
(6,144,902
)
Deferred income taxes
   
1,593,489
     
1,290,429
 
Net unrealized appreciation (depreciation) on available-for-sale securities
 
$
(5,994,552
)
 
$
(4,854,473
)

Cost Method Equity Investments

The Company held equity investments with an aggregate cost of $15,816,798 and $15,977,368 at March 31, 2024 and December 31, 2023, respectively.  These equity investments were not reported at fair value because it is not practicable to estimate their fair values due to insufficient information being available. Management reviews and considers events or changes in circumstances that might have a significant adverse effect on the reported value of those investments. Management did not identify any events or changes in circumstances that might have a significant adverse effect on the reported value of those investments.

Trading Securities

Securities designated as trading securities are reported at fair value, with gains or losses resulting from changes in fair value recognized in net investment income on the Consolidated Statements of Operations.  Trading Securities included exchange-traded equities and exchange-traded options.  Trading securities carried as liabilities were securities sold short.  A gain, limited to the price at which the security was sold short, or a loss, potentially unlimited in size, will be recognized upon the termination of the short sale. The fair value of derivatives included in trading security assets and trading security liabilities as of March 31, 2024 was $0 and $110,000, respectively. The fair value of derivatives included in trading security assets and trading security liabilities as of December 31, 2023 was $0. Earnings from trading securities are classified in cash flows from operating activities. The derivatives held by the Company are for income generation purposes only.
Trading revenue charged to net investment income from trading securities was:

 
Three Months Ended
 
   
March 31,
 
   
2024
   
2023
 
Net unrealized gains (losses)
 
$
(7,301
)
 
$
0
 
Net realized gains (losses)
   
0
     
0
 
Net unrealized and realized gains (losses)
 
$
(7,301
)
 
$
0
 

Mortgage Loans

The Company, from time to time, acquires mortgage loans through participation agreements with FSNB.  FSNB has been able to provide the Company with additional expertise and experience in underwriting commercial and residential mortgage loans, which provide more attractive yields than the traditional bond market.  The Company is able to receive participations from FSNB for three primary reasons:  1) FSNB has already reached its maximum lending limit to a single borrower, but the borrower is still considered a suitable risk; 2) the interest rate on a particular loan may be fixed for a long period that is more suitable for UG given its asset-liability structure; and 3) FSNB’s loan growth might at times outpace its deposit growth, resulting in FSNB participating such excess loan growth rather than turning customers away.  For originated loans, the Company’s Management is responsible for the final approval of such loans after evaluation.  Before a new loan is issued, the applicant is subject to certain criteria set forth by Company Management to ensure quality control.  These criteria include, but are not limited to, a credit report, personal financial information such as outstanding debt, sources of income, and personal equity.  Once the loan is approved, the Company directly funds the loan to the borrower.  The Company bears all risk of loss associated with the terms of the mortgage with the borrower.

During the three months ended March 31, 2024 and 2023, the Company acquired $599,189 and $0 in mortgage loans, respectively.  FSNB services the majority of the Company’s mortgage loan portfolio.  The Company pays FSNB a 0.25% servicing fee on these loans and a one-time fee at loan origination of 0.50% of the original loan cost to cover costs incurred by FSNB relating to the processing and establishment of the loan.

During 2024 and 2023, the maximum and minimum lending rates for mortgage loans were:

 
2024
   
2023
 
   
Maximum rate
   
Minimum rate
   
Maximum rate
   
Minimum rate
 
Farm Loans
   
5.00
%
   
5.00
%
   
5.00
%
   
5.00
%
Commercial Loans
   
8.75
%
   
4.00
%
   
8.75
%
   
4.00
%
Residential Loans
   
5.00
%
   
4.15
%
   
5.00
%
   
4.15
%

Most mortgage loans are first position loans.  Loans issued are generally limited to no more than 80% of the appraised value of the property.

The Company has in place a monitoring system to provide Management with information regarding potential troubled loans.  Letters are sent to each mortgagee when the loan becomes 30 days or more delinquent.  Management is provided with a monthly listing of loans that are 60 days or more past due.  All loans 90 days or more past due are placed on a non-performing status and classified as delinquent loans.  Quarterly, coinciding with external financial reporting, the Company reviews each delinquent loan and determines how each delinquent loan should be classified.  Management believes the current internal controls surrounding the mortgage loan selection process provide a quality portfolio with minimal risk of foreclosure and/or negative financial impact.

Changes in the current economy could have a negative impact on the loans, including the financial stability of the borrowers, the borrowers’ ability to pay or to refinance, the value of the property held as collateral and the ability to find purchasers at favorable prices.  Interest accruals are analyzed based on the likelihood of repayment.  In no event will interest continue to accrue when accrued interest along with the outstanding principal exceeds the net realizable value of the property.  The Company does not utilize a specified number of days delinquent to cause an automatic non-accrual status.

The following table summarizes the mortgage loan holdings of the Company:

   
March 31, 2024
   
December 31, 2023
 
In good standing
 
$
15,702,437
   
$
15,318,176
 
Total mortgage loans
 
$
15,702,437
   
$
15,318,176
 

The following is a summary of the mortgage loans outstanding and the related allowance for credit losses:

 
March 31, 2024
   
December 31, 2023
 
Farm
 
$
326,385
   
$
332,417
 
Commercial
   
1,482,229
     
13,764,209
 
Residential
   
14,174,823
     
1,495,550
 
Total mortgage loans
   
15,983,437
     
15,592,176
 
Less allowance for credit losses
   
(281,000
)
   
(274,000
)
Total mortgage loans, net
 
$
15,702,437
   
$
15,318,176
 

There were no  past due loans as of March 31, 2024 and December 31, 2023.

Notes Receivable

Notes receivable represent collateral loans and promissory notes issued by the Company and are reported at their unpaid principal balances, adjusted for valuation allowances.  Interest accruals are analyzed based on the likelihood of repayment.  The Company does not utilize a specified number of days delinquent to cause an automatic non-accrual status. During the three months ended March 31, 2024 and 2023 the Company acquired  $800,000 and $1,478,100 of notes receivable, respectively.
 
Before a new note is issued, the applicant is subject to certain criteria set forth by Company Management to ensure quality control.  Once the note is approved, the Company directly funds the note to the borrower. Several of the notes have participation agreements in place, whereas the Company has reduced its investment in the note receivable by participating a portion of the note to a third party.

Similar to the mortgage loans, FSNB services the notes receivable. The Company, and the participants in the notes, share in the risk of loss associated with the terms of the note with the borrower, based upon their ownership percentage in the note.  The Company has in place a monitoring system to provide Management with information regarding potential troubled loans.

The following is a summary of the notes receivable outstanding and the related allowance for credit losses:

 
March 31, 2024
   
December 31, 2023
 
Notes receivable
 
$
14,637,379
   
$
14,259,225
 
Less allowance for credit losses
   
(258,000
)
   
(250,000
)
Total notes receivable, net
 
$
14,379,379
   
$
14,009,225
 

Allowance for Credit Loss - Loans

The allowance for credit loss ("ACL") is a valuation account that is deducted from the loans' amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when Management believes the uncollectibility of a loan balance is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

The allowance for credit losses represents Management's estimate of lifetime credit losses inherent in loans as of the balance sheet date. The allowance for credit losses is estimated by Management using relevant available information, from both internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts.

The Company measures expected credit losses for loans on a pooled basis when similar risk characteristics exist. The Company has identified the following portfolio segments - mortgage loans on real estate and notes receivable.

The allowance for credit losses calculation includes subjective adjustments for qualitative risk factors that are likely to cause estimated credit losses to differ from historical experience. These qualitative adjustments may increase or reduce reserve levels and include adjustments for risk tolerance, loan review and audit results, asset quality and portfolio trends, industry concentrations, external factors and economic conditions.

Loans that do not share risk characteristics are evaluated on an individual basis. When Management determines that foreclosure is probable and the borrower is experiencing financial difficulty, the expected credit losses are based on the fair value of collateral at the reporting date unadjusted for selling costs as appropriate.

Allowance for Credit Loss - Unfunded Commitments

Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit issued to meet customer financing needs. The Company's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for off-balance sheet loan commitments is represented by the contractual amount of those instruments. Such financial instruments are recorded when they are funded.

The Company records an allowance for credit losses on off-balance sheet credit exposures, unless the commitments to extend credit are unconditionally cancelable, through a charge to provision for unfunded commitments in the Company's income statements. The allowance for credit losses on off-balance sheet credit exposures is estimated by loan segment at each balance sheet date under the current expected credit loss model using the same methodologies as portfolio loans, taking into consideration the likelihood that funding will occur as well a any third-party guarantees. The allowance for unfunded commitments as of March 31, 2024 and December 31, 2023 was $36,000 and $51,000, respectively, and is included in other liabilities on the Company's Condensed Consolidated Balance Sheets.

Allowance for Credit Loss - Accrued Interest

Accrued interest is not included in the ACL and if deemed uncollectible, it is charged against interest income when determined to be uncollectible.

Investment Real Estate

Real estate held-for-investment is stated at cost less accumulated depreciation. Depreciation is computed on a straight-line basis for financial reporting purposes using estimated useful lives of 3 to 30 years. The Company periodically reviews its real estate held-for-investment for impairment and tests for recoverability whenever events or changes in circumstances indicate the carrying value may not be recoverable. During the three months ended March 31, 2024, no impairments were recognized on the investment real estate.

Note 4 - Fair Value Measurements of the Condensed Consolidated Financial Statements provides further information regarding the fair value of financial instruments that are not measured at fair value. The investment real estate owned by the Company is included in this portion of the Note 4 - Fair Value Measurements disclosure.

The following table provides an allocation of the Company’s investment real estate by type:

 
March 31, 2024
   
December 31, 2023
 
Raw land
 
$
7,096,926
   
$
6,971,930
 
Commercial
   
4,476,963
     
4,106,938
 
Residential
   
2,830,741
     
3,512,408
 
Land, minerals and royalty interests
   
6,967,352
     
7,383,844
 
Total investment real estate
 
$
21,371,982
   
$
21,975,120
 

The Company’s investment real estate portfolio includes ownership in oil and gas royalties. As of March 31, 2024 and December 31, 2023, investments in oil and gas royalties represented 33% and 34%, respectively, of the total investment real estate portfolio.  See Note 9 – Concentrations of Credit Risk of the Condensed Consolidated Financial Statements for additional information regarding the allocation of the oil and gas investment real estate holdings by industry type.

Gains and losses recognized on the disposition of the properties are recorded as realized gains and losses in the Condensed Consolidated Statements of Operations. During the three months ended  March 31, 2024 and 2023, the Company acquired $545,180 and $1,375,010 of investment real estate, respectively.

Short-Term Investments

Short-term investments have remaining maturities exceeding three months and under 12 months at the time of purchase and are stated at amortized cost, which approximates fair value. The short-term investments consist of United States Treasury securities.

During 2024 and 2023, the Company acquired $0 and $9,701,297, respectively, in short-term investments.

Net Investment Gains (Losses)

The following table presents net investment gains (losses) and the change in net unrealized gains on available-for-sale investments. 

 
Three Months Ended
 
   
March 31,
 
   
2024
   
2023
 
Realized gains:
           
Sales of fixed maturities
 
$
0
   
$
20,833
 
Sales of equity securities
   
0
     
85,184
 
Sales of real estate
   
37,461
     
586,774
 
Sales of short-term investments
   
9
     
23,509
 
Total realized gains
   
37,470
     
716,300
 
Realized losses:
               
Sales of equity securities
   
0
     
0
 
Total realized losses
   
0
     
0
 
Net realized investment gains
   
37,470
     
716,300
 
Change in fair value of equity securities:
               
Change in fair value of equity securities held at the end of the period
   
12,020,406
     
(8,645,474
)
Change in fair value of equity securities
   
12,020,406
     
(8,645,474
)
Net investment gains (losses)
 
$
12,057,876
   
$
(7,929,174
)
Change in net unrealized gains (losses) on available-for-sale investments included in other comprehensive income:
               
Fixed maturities
 
$
(1,443,139
)
 
$
2,810,499
 
Net increase (decrease)
 
$
(1,443,139
)
 
$
2,810,499
 
v3.24.1.1.u2
Fair Value Measurements
3 Months Ended
Mar. 31, 2024
Fair Value Measurements [Abstract]  
Fair Value Measurements
Note 4 – Fair Value Measurements

Fair Value Measurements on a Recurring Basis

Assets and liabilities recorded at fair value in the Condensed Consolidated Balance Sheets are measured and classified in accordance with a fair value hierarchy consisting of three levels based on the observability of valuation inputs:

Level 1 – Valuation is based upon quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 – Valuation methodologies include quoted prices for similar assets and liabilities in active markets or quoted prices for identical, quoted prices for identical or similar assets or liabilities in markets that are not active, or the Company may use various valuation techniques or pricing models that use observable inputs to measure fair value.

Level 3 – Valuation is based upon unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities. Unobservable inputs reflect the Company’s own assumptions about the inputs that market participants would use in pricing the asset or liability.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

The following table presents information about assets and liabilities measured at fair value on a recurring basis and indicates the level of the fair value measurement based on the observability of the inputs used:

March 31, 2024
 
Level 1
   
Level 2
   
Level 3
   
Total
 
Fixed maturitity securities:
                       
U.S. Government and government agencies and authorities
 
$
13,544,442
   
$
0
   
$
0
   
$
13,544,442
 
U.S. special revenue and assessments
   
0
     
7,205,639
     
0
     
7,205,639
 
Corporate securities
   
0
     
76,232,061
     
0
     
76,232,061
 
Total fixed maturities
   
13,544,442
     
83,437,700
     
0
     
96,982,142
 
Equity securities:
                               
Common stocks
   
37,439,195
     
5,582,300
     
2,857,144
     
45,878,639
 
Limited liability companies
   
0
     
0
     
60,359,880
     
60,359,880
 
Total equity securities
   
37,439,195
     
5,582,300
     
63,217,024
     
106,238,519
 
Short-term investments
   
13,714,840
     
0
     
0
     
13,714,840
 
Total financial assets
 
$
64,698,477
   
$
89,020,000
   
$
63,217,024
   
$
216,935,501
 
Liabilities:
                               
Trading securities
 
$
110,000
   
$
0
   
$
0
   
$
110,000
 

December 31, 2023
 
Level 1
   
Level 2
   
Level 3
   
Total
 
Fixed maturitity securities:
                       
U.S. Government and government agencies and authorities
 
$
13,587,779
   
$
0
   
$
0
   
$
13,587,779
 
U.S. special revenue and assessments
   
0
     
7,308,458
     
0
     
7,308,458
 
Corporate securities
   
0
     
82,513,599
     
0
     
82,513,599
 
Total fixed maturities
   
13,587,779
     
89,822,057
     
0
     
103,409,836
 
Equity securities:
                               
Common stocks
   
35,819,973
     
5,329,080
     
2,807,634
     
43,956,687
 
Limited liability companies
   
0
     
0
     
57,604,806
     
57,604,806
 
Total equity securities
   
35,819,973
     
5,329,080
     
60,412,440
     
101,561,493
 
Short-term investments
   
29,132,236
     
0
     
0
     
29,132,236
 
Total financial assets
 
$
78,539,988
   
$
95,151,137
   
$
60,412,440
   
$
234,103,565
 

Total assets included in the fair value hierarchy exclude certain equity securities that were measured at estimated fair value using the net asset value (“NAV”) per share practical expedient. At March 31, 2024 and December 31, 2023, the estimated fair value of such investments was $62,081,456 and $54,989,319, respectively. These investments are generally not readily redeemable by the investee.

The following is a description of the valuation techniques used the by Company to measure assets reported at fair value on a recurring basis. There have been no significant changes in the valuation techniques utilized by the Company for the three months ended March 31, 2024.

Available for Sale Securities

Securities classified as available for sale are recorded at fair value on a recurring basis. Securities classified as Level 1 utilized fair value measurements based upon quoted market prices, when available. If quoted market prices are not available, the Company obtains fair value measurements from recently executed transactions, market price quotations, benchmark yields and issuer spreads to value Level 2 securities. In certain instances where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy. Fair value determinations for Level 3 measurements are estimated on a quarterly basis where assumptions used are reviewed to ensure the estimated fair value complies with accounting standards generally accepted in the United States.

Equity Securities at Fair Value

Equity securities consist of common and preferred stocks and limited liability companies mainly in private equity investments, financial institutions and publicly traded corporations. Equity securities for which there is sufficient market data are categorized as Level 1 or 2 in the fair value hierarchy.  For the equity securities in which quoted market prices are not available, the Company uses industry standard pricing methodologies, including discounted cash flow models that may incorporate various inputs such as payment expectations, risk of the investment, market data, and health of the underlying company. The inputs are based upon Management’s assumptions and available market information. When evidence is believed to support a change to the carrying value from the transaction price, adjustments are made to reflect the expected cash flows, material events and market data. These investments are included in Level 3 of the fair value hierarchy.

Trading Securities

Trading securities are recorded at fair value. They are classified as Level 1 and utilize fair value measurements based upon quoted market prices.

Change in Recurring Fair Value Measurements

The following table presents the changes in Level 3 equity securities measured at fair value on a recurring basis, and the realized and unrealized gains (losses) related to the Level 3 equity securities.

         
Investments in
       
 
Investments in Common Stocks
   
Limited Liability Companies
   
Total
 
Balance at December 31, 2023
 
$
2,807,634
   
$
57,604,806
   
$
60,412,440
 
Realized gains (losses)
   
0
     
0
     
0
 
Unrealized gains (losses)
   
49,510
     
2,755,074
     
2,804,584
 
Purchases
   
0
     
0
     
0
 
Sales
   
0
     
0
     
0
 
Balance at March 31, 2024
 
$
2,857,144
   
$
60,359,880
   
$
63,217,024
 

Both observable and unobservable inputs may be used to determine the fair values of positions classified in Level 3 in the table above. As a result, the unrealized gains (losses) on instruments held at March 31, 2024 and December 31, 2023 may include changes in fair value that were attributable to both observable and unobservable inputs.

Assets and liabilities are transferred into Level 3 when a significant input cannot be corroborated with market observable data. This occurs when market activity decreases significantly and underlying inputs cannot be observed, current prices are not available, and/or when there are significant variances in quoted prices, thereby affecting transparency. Assets and liabilities are transferred out of Level 3 when circumstances change such that a significant input can be corroborated with market observable data. This may be due to a significant increase in market activity, a specific event, or one or more significant input(s) becoming observable.

Quantitative Information About Level 3 Fair Value Measurements

The following table presents information about the significant unobservable inputs used for recurring fair value measurements for certain Level 3 instruments and includes only those instruments for which information about the inputs is reasonably available to the Company, such as data from independent third-party valuation service providers and from internal valuation models.

Financial Assets
 
Fair Value at
March 31, 2024
   
Fair Value at
December 31, 2023
 
Valuation Technique
Common stocks
 
$
2,857,144
   
$
2,807,634
 
Pricing Model
Limited liability companies
   
60,359,880
     
57,604,806
 
Pricing Model
Total
 
$
63,217,024
   
$
60,412,440
   

Uncertainty of Fair Value Measurements

The significant unobservable inputs used in the determination of the fair value of assets classified as Level 3 have an inherent measurement uncertainty that if changed could result in higher or lower fair value measurements of these assets as of the reporting date.

Equity Securities at Fair Value

Fair market value for equity securities is derived based on unobservable inputs, such as projected normalized revenues and industry standard multiples of revenue for the equity securities valued using pricing model.  Significant increases (decreases) in either of those inputs in isolation would result in a significantly higher (lower) fair value measurement.

Investments in Certain Entities Carried at Fair Value Using Net Asset Value per Share

The Company holds certain equity securities that are measured at estimated fair value using the NAV per share practical expedient. These investments are generally not readily redeemable by the investee. The following tables provide additional information regarding the assets carried at NAV.

Investments in Certain Entities Carried at Fair Value Using Net Asset Value per Share

Investment Category
 
Fair Value at March 31, 2024
   
Unfunded Commitments
   
Redemption Frequency
   
Redemption Notice Period
 
Equity securities
                       
  Growth Equity
                       
Redeemable
                       
   Limited partnership
 
$
35,423,361
   
$
0
   
Quarterly
   
45 days
 
Non-redeemable
                           
Limited liability companies
   
10,478,935
     
9,204,839
             
Limited partnerships
   
16,179,160
     
2,366,695
     
n/a
     
n/a
 
Total
 
$
62,081,456
   
$
11,571,534
     
n/a
     
n/a
 

Investment Category
 
Fair Value at December 31, 2022
   
Unfunded Commitments
   
Redemption Frequency
   
Redemption Notice Period
 
Equity securities
                       
  Growth Equity
                       
Redeemable
                       
   Limited partnership
 
$
34,081,797
   
$
0
   
Quarterly
   
45 days
 
Non-redeemable
                           
Limited liability companies
   
11,960,929
     
9,464,608
     
n/a
     
n/a
 
   Limited partnerships
   
8,946,593
     
2,410,599
     
n/a
     
n/a
 
Total
 
$
54,989,319
   
$
11,875,207
                 

The following are descriptions of the Company's assets held at NAV.

The Company invested in a limited partnership that was formed under the laws of the State of Delaware on October 5, 1999, as a Delaware limited partnership (“LP”). The Limited Partnership Agreement provides for the Fund to continue until dissolved. There are significant restrictions to the dissolution process, which are outlined in the LP Agreement. The Fund invests in listed equity and fixed income securities as well as non-listed securities, including direct-owned minerals and other royalties. In 2013, UG entered into an irrevocable subscription agreement to invest in the LP.

The Company invested in a Limited Liability Company ("LLC") that was formed under the laws of the state of Delaware in 2020. The LLC agreement provides for the Company to continue until dissolved. There are significant restrictions to the dissolution process, which are outlined in the LLC Agreement. The LLC Company was formed for the purpose of acquiring, making investments in, and owning, holding, and growing operating businesses through the United States. In 2020, UG entered into a LLC Agreement to invest in this LLC.

The Company invested in a Limited Liability Company ("LLC") that was formed under the laws of the state of Delaware. The LLC was formed on October 15, 2020 to provide long-term investment returns. The Company will continue to operate until December 31, 2032, or until each of the investment funds in which the LLC invests terminates, unless terminated earlier or extended in accordance with the Operating Agreement. In 2020, UG completed the Subscription Agreement to become an investor in this LLC.

The Company invested in a Limited Liability Company ("LLC") that was formed under the laws of the state of Delaware. The LLC was formed on July 1, 2022 to amplify philanthropy by primarily investing in venture capital investment funds and in direct venture capital investments of operating companies. The Company will continue to operate until December 31, 2034, or until each of the investment funds in which the LLC invests terminates, unless terminated earlier or extended in accordance with the Operating Agreement. In 2022, the Company completed the Subscription Agreement to become an investor in this LLC.

The Company invested in a Limited Liability Company ("LLC") that was formed under the laws of the state of Delaware. The LLC was organized solely for the purpose owning, managing, supervising and disposing of the investment. The Partnership will continue in existence for the investment period (subject to extension), unless sooner terminated by operation of law or pursuant to any provision of the Limited Partnership Agreement. In 2022, the Company entered into a Limited Partnership Agreement to invest in this LP.

The Company invested in a closed-end LP fund that was formed pursuant to the laws of the State of Delaware under a limited partners agreement (the “Agreement”) on April 6, 2015 and is scheduled to terminate on the tenth anniversary of the final closing date, unless terminated sooner or extended in accordance with the Agreement. The purpose of the LP is to make investments in and pursue targets that educate, train, and inspire men and women in the United States and around the world to value free enterprise, business, and economics to improve the quality of their lives and the lives and the lives of those in their communities. In 2015, the Company entered into a Limited Partnership Agreement to invest in this LP.

The Company invested in a closed-end LP fund that was formed pursuant to the laws of the State of Delaware under a limited partners agreement (the “Agreement”) on September 5, 2018 (the “Agreement”), and is scheduled to terminate on the twelfth anniversary of the Final Closing Date, unless terminated sooner or extended in accordance with the Agreement. The purpose of the Partnership is to make investments in and pursue targets that educate, train, and inspire men and women in the United States and around the world to value free enterprise, business, and economics to improve the quality of their lives and the lives and the lives of those in their communities. In 2018, the Company entered into a Limited Partnership Agreement to invest in this LP.

The Company invested in a Limited Liability Company ("LLC") that was formed under the laws of the state of Delaware. The LLC was formed September 29, 2021 for the purpose of investing in companies located in emerging markets.  The Limited Liability Company Agreement provides for LLC to continue until dissolved, unless terminated earlier through terms specified in the Operating Agreement. In 2021, the Company entered into a Limited Liability Company Agreement to invest in the LLC.

The Company invested in a LP that was formed pursuant to the laws of the state of Delaware under a limited partnership agreement on October 27, 2021 (the “Agreement”) and is scheduled to terminate on the tenth anniversary of the Final Closing Date, unless terminated sooner or extended in accordance with the Agreement. The Partnership is organized for the principal purposes of acquiring, holding, supervising, managing and disposing of investment in recapitalization, management buyouts, and corporate divestitures of Portfolio Companies operating in various segments of the U.S. lower middle markets. In 2022, the Company entered into a Limited Partnership Agreement to invest in this LP.

The Company invested in a LLC that was formed as an Alabama Limited Liability Company on April 6, 2022. The Limited Liability Company Agreement provides for the LLC to continue until dissolved, unless terminated earlier through terms specified in the Operating Agreement. The purpose of Trivela is to (1) acquire, own and operate football (soccer) clubs (each a “Target Company”) (2) establish investment vehicles for the acquisition of Target Companies (3) sponsor private placements of securities on behalf of each investment vehicle (4) manage the operations of each investment vehicle & Target Company on a fee for services basis (5) engage in any lawful act or activity incidental to the Business as reasonably determined by the managers. The Company entered into a Limited Liability Company Agreement to invest in Trivela Group, LLC.

The Company invested in a LP that was formed as a Delaware Limited Partnership on September 22, 2023. The Limited Partnership Agreement states that the LP shall continue, unless the Partnership is sooner dissolved , until the fifteenth (15th) anniversary of the final closing, provided, that the General Partner may further extend the term of the Partnership beyond the aforementioned term with the approval of a majority in interest of the limited partners for up to two consecutive period of five years. The nature of the business to be conducted and promoted by the partnership is to: (1) acquire, own, and operate one or more clubs,  (2) establish subsidiaries for the acquisition of clubs and club ownership interests, (3) pursue and exploit business, investment or real estate opportunities related or incidental to clubs, their stadiums or any other sport or entertainment activities, and (4) engage in any lawful act or activity incidental to the foregoing purposes, as determined by the general partner.

Fair Value Measurements on a Nonrecurring Basis

Certain assets are not carried at fair value on a recurring basis. Accordingly, such investments are only included in the fair value hierarchy disclosure when the investment is subject to re-measurement at fair value after initial recognition and the resulting re-measurement is reflected in the Consolidated Financial Statements. The Company did not recognize any re-measurements or impairments of financial instruments at March 31, 2024 or December 31, 2023.

Fair Value Information About Financial Instruments Not Measured at Fair Value

Certain assets are not carried at fair value on a recurring basis. Accordingly, such investments are only included in the fair value hierarchy disclosure when the investment is subject to re-measurement at fair value after initial recognition and the resulting re-measurement is reflected in the Consolidated Financial Statements.

The following table presents the carrying amount and estimated fair values of the Company’s financial instruments not measured at fair value and indicates the level in the fair value hierarchy of the estimated fair value measurement based on the observability of the inputs used:

 
Carrying
   
Estimated
                   
March 31, 2024
 
Amount
   
Fair Value
   
Level 1
   
Level 2
   
Level 3
 
Assets
                             
Held to maturity redeemable preferred stock
 
$
2,500,000
     
2,500,000
     
0
     
0
     
2,500,000
 
Equity securities, at cost
   
15,816,798
     
15,816,798
     
0
     
0
     
15,816,798
 
Mortgage loans on real estate
   
15,702,437
     
14,824,642
     
0
     
0
     
14,824,642
 
Notes receivable
   
14,379,379
     
14,622,498
     
0
     
0
     
14,622,498
 
Investment real estate
   
21,371,982
     
62,624,766
     
0
     
0
     
62,624,766
 
Policy loans
   
5,994,931
     
5,994,931
     
0
     
0
     
5,994,931
 
Accrued investment income
   
1,720,261
     
1,720,261
     
0
     
0
     
1,720,261
 
                                         
Liabilities
                                       
Policy claims and benefits payable
   
3,534,448
     
3,534,448
     
0
     
0
     
3,534,448
 
Dividend and endowment accumulations
   
14,698,020
     
14,698,020
     
0
     
0
     
14,698,020
 

 
Carrying
   
Estimated
                   
December 31, 2023
 
Amount
   
Fair Value
   
Level 1
   
Level 2
   
Level 3
 
Assets
                             
Held to maturity redeemable preferred stock
 
$
2,500,000
     
2,500,000
     
0
     
0
     
2,500,000
 
Equity securities, at cost
   
15,977,368
     
15,977,368
     
0
     
0
     
15,977,368
 
Mortgage loans on real estate
   
15,318,176
     
14,447,026
     
0
     
0
     
14,447,026
 
Notes receivable
   
14,009,225
     
14,189,147
     
0
     
0
     
14,189,147
 
Investment real estate
   
21,975,120
     
62,899,838
     
0
     
0
     
62,899,838
 
Policy loans
   
6,018,248
     
6,018,248
     
0
     
0
     
6,018,248
 
Accrued investment income
   
2,001,064
     
2,001,064
     
0
     
0
     
2,001,064
 
                                         
Liabilities
                                       
Policy claims and benefits payable
   
4,188,917
     
4,188,917
     
0
     
0
     
4,188,917
 
Dividend and endowment accumulations
   
14,749,258
     
14,749,258
     
0
     
0
     
14,749,258
 
Notes payable
   
19,000,000
     
19,000,000
     
0
     
19,000,000
     
0
 

The above estimated fair value amounts have been determined based upon the following valuation methodologies. Considerable judgment was required to interpret market data in order to develop these estimates. Accordingly, the estimates are not necessarily indicative of the amounts which could be realized in a current market exchange.  The use of different market assumptions or estimation methodologies may have a material effect on the fair value amounts.

Held to maturity redeemable preferred stock is carried at cost, which approximates fair value.

Certain equity securities are reported at their cost basis, minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. It is not practicable to estimate their fair values due to insufficient information being available.

The fair values of mortgage loans on real estate are estimated using discounted cash flow analyses and interest rates being offered for similar loans to borrowers with similar credit ratings.  The inputs used to measure the fair value of our mortgage loans on real estate are classified as Level 3 within the fair value hierarchy.

The fair values of notes receivable are estimated using discounted cash flow analyses and interest rates being offered for similar loans to borrowers with similar credit ratings. The inputs used to measure the fair value of the notes receivable are classified as Level 3 within the fair value hierarchy.

Investment real estate is recorded at the lower of the net investment in the real estate or the fair value of the real estate less costs to sell.  The determination of fair value assessments are performed on a periodic, non-recurring basis by external appraisal and assessment of property values by Management.  The inputs used to measure the fair value of our investment real estate are classified as Level 3 within the fair value hierarchy.

Policy loans are carried at the aggregate unpaid principal balances in the Condensed Consolidated Balance Sheets which approximate fair value, and earn interest at rates ranging from 4% to 8%. Individual policy liabilities in all cases equal or exceed outstanding policy loan balances.  The inputs used to measure the fair value of our policy loans are classified as Level 3 within the fair value hierarchy.

The carrying value of accrued investment income approximates its fair value.

The carrying amounts reported for policy claims and benefits payable approximates fair value.

The carrying value for dividend and endowment accumulations approximates fair value.

The carrying value for notes payable is a reasonable estimate of fair value subject to floating rates of interest.  The fair value of notes payable with fixed rate borrowings is determined based on the borrowing rates currently available to the Company for loans with similar terms and average maturities.  The inputs used to measure the fair value of notes payable are classified as Level 2 within the fair value hierarchy.
 
v3.24.1.1.u2
Credit Arrangements
3 Months Ended
Mar. 31, 2024
Credit Arrangements [Abstract]  
Credit Arrangements
Note 5 – Credit Arrangements

Instrument
 
Issue Date
 
Maturity Date
 
Revolving
Credit Limit
 
December 31, 2023
 
Borrowings
 
Repayments
 
March 31, 2024
Lines of Credit:
                                 
UTG
 
11/20/2013
 
11/20/2024
 
$
8,000,000
   
0
 
0
 
0
 
$
0
UG - CMA
 
10/21/2021
 
10/4/2024
   
25,000,000
   
19,000,000
 
0
 
19,000,000
   
0

UTG has a variable rate revolving line of credit. As collateral, UTG has pledged 100% of the  common voting stock of its wholly owned subsidiary, Universal Guaranty Life Insurance Company.  UTG is in the process of renewing this line of credit.

During October of 2023, the Federal Home Loan Bank approved UG’s Cash Management Advance Application (“CMA”). The CMA gives the Company the option of selecting a variable rate of interest for up to 90 days or a fixed rate for a maximum of 30 days. The variable rate CMA is prepayable at any time without a fee, while the fixed CMA is not prepayable prior to maturity. The Company has pledged bonds with a collateral lendable value of $19,698,879. During the first quarter of 2024, the Company repaid the entire outstanding principal balance.
v3.24.1.1.u2
Shareholders' Equity
3 Months Ended
Mar. 31, 2024
Shareholders' Equity [Abstract]  
Shareholders' Equity
Note 6 – Shareholders’ Equity

Stock Repurchase Program – The Board of Directors of UTG has authorized the repurchase in the open market or in privately negotiated transactions of UTG’s common stock.  The Board of Directors of UTG authorized the repurchase of up to $22 million of UTG’s common stock in the open market or in privately negotiated transactions. Company Management has broad authority to operate the program, including the discretion of whether to purchase shares and the ability to suspend or terminate the program. Open market purchases are made based on the last available market price but may be limited.  During the three months ended March 31, 2024, the Company repurchased 3,598 shares through the stock repurchase program for $108,914. Through March 31, 2024, UTG has spent $20,300,317 in the acquisition of 1,360,457 shares under this program.

During 2024, the Company issued 9,944 shares of stock to management and employees as compensation at a cost of $299,314. These awards are determined at the discretion of the Board of Directors.

Earnings Per Share Calculations

Earnings per share are based on the weighted average number of common shares outstanding during each period.  For the three months ended March 31, 2024 and 2023, diluted earnings per share were the same as basic earnings per share since the Company had no dilutive instruments outstanding.
v3.24.1.1.u2
Commitments and Contingencies
3 Months Ended
Mar. 31, 2024
Commitments and Contingencies [Abstract]  
Commitments and Contingencies
Note 7 – Commitments and Contingencies

The insurance industry has experienced a number of civil jury verdicts which have been returned against life and health insurers in the jurisdictions in which the Company does business involving the insurers’ sales practices, alleged agent misconduct, failure to properly supervise agents, and other matters.  Some of the lawsuits have resulted in the award of substantial judgments against the insurer, including material amounts of punitive damages.  In some states, juries have substantial discretion in awarding punitive damages in these circumstances.  In the normal course of business, the Company is involved from time to time in various legal actions and other state and federal proceedings.  Management is of the opinion that the ultimate disposition of the matters will not have a materially adverse effect on the Company’s results of operations or financial position.

Under the insurance guaranty fund laws in most states, insurance companies doing business in a participating state can be assessed up to prescribed limits for policyholder losses incurred by insolvent or failed insurance companies.  Although the Company cannot predict the amount of any future assessments, most insurance guaranty fund laws currently provide that an assessment may be excused or deferred if it would threaten an insurer’s financial strength.  Mandatory assessments may be partially recovered through a reduction in future premium tax in some states. The Company does not believe such assessments will be materially different from amounts already provided for in the consolidated financial statements, though the Company has no control over such assessments.

Mortgage Loan Commitments - The Company commits to lend funds under mortgage loan commitments. The amounts of these mortgage loan commitments were $278,944 and $878,132 at March 31, 2024 and December 31, 2023, respectively.

Notes Receivable Commitments - The Company commits to lend funds under notes receivable funding commitments. The amounts of these notes receivable commitments were $2,000,000 and $2,800,000 at March 31, 2024 and December 31, 2023, respectively.

Commitments to Fund Limited Liability Company and Limited Partnership Investments - The Company commits to fund investments in limited liability companies and limited partnership. The amounts of the unfunded commitments were $15,718,682 and $16,153,903 at March 31, 2024 and December 31, 2023, respectively.
v3.24.1.1.u2
Other Cash Flow Disclosures
3 Months Ended
Mar. 31, 2024
Other Cash Flow Disclosures [Abstract]  
Other Cash Flow Disclosures
Note 8 – Other Cash Flow Disclosures

On a cash basis, the Company paid the following expenses:

 
Three Months Ended
 
   
March 31,
 
   
2024
   
2023
 
Interest
 
$
23,169
   
$
41,916
 
Federal income tax
   
0
     
0
 
v3.24.1.1.u2
Concentrations of Credit Risk
3 Months Ended
Mar. 31, 2024
Concentrations [Abstract]  
Concentrations of Credit Risk
Note 9 – Concentrations of Credit Risk

The Company maintains cash balances in financial institutions that at times may exceed federally insured limits.  The Company maintains its primary operating cash accounts with First Southern National Bank, an affiliate of the largest shareholder of UTG, Mr. Jesse Correll, the Company’s CEO and Chairman.  The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents.

Because UTG serves primarily individuals located in three states, the ability of the Company's customers to pay their insurance premiums is impacted by the economic conditions in these areas.  As of March 31, 2024 and 2023, approximately 49% and 50%, respectively, of the Company’s total direct premium was collected from Illinois, Ohio, and Texas. Thus, results of operations are heavily dependent upon the strength of these economies.

The Company reinsures that portion of insurance risk which is in excess of its retention limits. Retention limits range up to $125,000 per life.  Life insurance ceded represented 21% and 20% of total life insurance in force at March 31, 2024 and  December 31, 2023, respectively.  Insurance ceded represented 31% and 29% of premium income for the three months ended March 31, 2024 and 2023, respectively. The Company would be liable for the reinsured risks ceded to other companies to the extent that such reinsuring companies are unable to meet their obligations.

The Company owns a variety of investments associated with the oil and gas industry. These investments represent approximately 30% and 28% of the Company’s total invested assets as of March 31, 2024 and December 31, 2023, respectively. The following table provides an allocation of the oil and gas investments by type.

March 31, 2024
 
Land, Minerals &
Royalty Interests
   
Exploration
   
Total
 
Fixed maturities, at fair value
 
$
0
   
$
1,065,330
   
$
1,065,330
 
Equity securities, at fair value
   
89,840,001
     
0
     
89,840,001
 
Equity securities, at cost
   
5,547,263
     
0
     
5,547,263
 
Investment real estate
   
6,967,353
     
0
     
6,967,353
 
Notes receivable
   
2,000,000
     
0
     
2,000,000
 
Total
 
$
104,354,617
   
$
1,065,330
   
$
105,419,947
 

December 31, 2023
 
Land, Minerals &
Royalty Interests
   
Exploration
   
Total
 
Fixed maturities, at fair value
 
$
0
   
$
1,075,240
   
$
1,075,240
 
Equity securities, at fair value
   
84,066,203
     
0
     
84,066,203
 
Equity securities, at cost
   
5,826,381
     
0
     
5,826,381
 
Investment real estate
   
7,383,851
     
0
     
7,383,851
 
Notes receivable
   
2,000,000
     
0
     
2,000,000
 
Total
 
$
99,276,435
   
$
1,075,240
   
$
100,351,675
 

At March 31, 2024 and December 31, 2023, the Company owned 4 equity securities that represented approximately 75% and 73%, respectively, of the total investments associated with the oil and gas industry.

The Company’s results of operations and financial condition have in the past been, and may in the future be, adversely affected by the degree of certain industry specific concentrations in the Company’s investment portfolio. The Company has significant exposure to investments associated with the oil and gas industry. Events or developments that have a negative effect on the oil and gas industry may adversely affect the valuation of our investments in this specific industry. The Company’s ability to sell its investments associated with the oil and gas industry may be limited.
v3.24.1.1.u2
Insider Trading Arrangements
3 Months Ended
Mar. 31, 2024
Trading Arrangements, by Individual  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
v3.24.1.1.u2
Basis of Presentation (Policies)
3 Months Ended
Mar. 31, 2024
Basis of Presentation [Abstract]  
Basis of Presentation
The accompanying Condensed Consolidated Balance Sheet as of March 31, 2024, which has been derived from audited consolidated financial statements, and the unaudited interim Condensed Consolidated Financial Statements include the accounts of UTG, Inc. (the “Parent”) and its subsidiaries (collectively with the Parent, the “Company”).  All significant intercompany accounts and transactions have been eliminated in consolidation.  The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of regulation S-X.  Accordingly, they do not include all of the information and notes required by GAAP for audited annual financial statements.  The information furnished includes all adjustments and accruals of a normal recurring nature, which in the opinion of Management, are necessary for a fair presentation of the results for the interim periods.  The unaudited Condensed Consolidated Financial Statements included herein and these related notes should be read in conjunction with the Company’s consolidated financial statements, and the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023The Company’s results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024 or for any other future period.

This document at times will refer to the Registrant’s largest shareholder, Mr. Jesse T. Correll and certain companies controlled by Mr. Correll.  Mr. Correll holds a majority ownership of First Southern Funding, LLC (“FSF”), a Kentucky corporation, and First Southern Bancorp, Inc. (“FSBI”), a financial services holding company.  FSBI operates through its 100% owned subsidiary bank, First Southern National Bank (“FSNB”).  Banking activities are conducted through multiple locations within south-central and western Kentucky.  Mr. Correll is Chairman of the Board of Directors, Chief Executive Officer, President, and a Director of UTG and is currently UTG’s largest shareholder through his ownership control of FSF, FSBI and affiliates. At March 31, 2024, Mr. Correll owns or controls directly and indirectly approximately 65.89% of UTG’s outstanding stock.
v3.24.1.1.u2
Investments (Tables)
3 Months Ended
Mar. 31, 2024
Investments [Abstract]  
Available for Sale Securities
Investments in fixed maturity securities are summarized by type as follows:

March 31, 2024
 
Original or Amortized Cost
   
Gross Unrealized Gains
   
Gross Unrealized Losses
   
Fair Value
 
U.S. Government and govt. agencies and authorities
 
$
14,316,438
   
$
0
   
$
(771,996
)
 
$
13,544,442
 
U.S. special revenue and assessments
   
7,527,448
     
0
     
(321,809
)
   
7,205,639
 
All other corporate bonds
   
82,726,297
     
58,784
     
(6,553,020
)
   
76,232,061
 
Redeemable preferred stock
   
2,500,000
     
0
     
0
     
2,500,000
 
Total
 
$
107,070,183
   
$
58,784
   
$
(7,646,825
)
 
$
99,482,142
 

December 31, 2023
 
Original or Amortized Cost
   
Gross Unrealized Gains
   
Gross Unrealized Losses
   
Fair Value
 
U.S. Government and govt. agencies and authorities
 
$
14,316,976
   
$
0
   
$
(729,197
)
 
$
13,587,779
 
U.S. special revenue and assessments
   
7,528,985
     
0
     
(220,527
)
   
7,308,458
 
All other corporate bonds
   
87,708,777
     
89,004
     
(5,284,182
)
   
82,513,599
 
Redeemable preferred stock
   
2,500,000
     
0
     
0
     
2,500,000
 
Total
 
$
112,054,738
   
$
89,004
   
$
(6,233,906
)
 
$
105,909,836
 
Debt Securities by Contractual Maturity
The amortized cost and estimated market value of fixed maturity securities at March 31, 2024, by contractual maturity, is shown below.

Fixed Maturity Securities
March 31, 2024
 
Amortized Cost
   
Fair Value
 
Due in one year or less
 
$
9,078,821
   
$
8,968,470
 
Due after one year through five years
   
43,078,621
     
41,313,290
 
Due after five years through ten years
   
5,945,729
     
5,920,055
 
Due after ten years
   
21,809,943
     
19,517,880
 
Fixed maturities with no single maturity date
   
27,157,069
     
23,762,447
 
Total
 
$
107,070,183
   
$
99,482,142
 
Estimated Fair Value and Gross Unrealized Losses of Fixed Maturity Securities in Unrealized Loss Position
The following tables present the estimated fair value and gross unrealized losses of fixed maturity securities in an unrealized loss position:

March 31, 2024
 
Less than 12 months
   
12 months or longer
   
Total
 
   
Fair value
   
Unrealized losses
   
Fair value
   
Unrealized losses
   
Fair value
   
Unrealized losses
 
U.S. Government and govt. agencies and authorities
 
$
1,487,865
     
(13,073
)
   
12,056,577
   
$
(758,923
)
   
13,544,442
   
$
(771,996
)
U.S. Special Revenue and Assessments
   
0
     
0
     
7,205,639
     
(321,809
)
   
7,205,639
     
(321,809
)
All other corporate bonds
   
3,818,194
     
(22,814
)
   
68,629,332
     
(6,530,206
)
   
72,447,526
     
(6,553,020
)
Total fixed maturities
 
$
5,306,059
     
(35,887
)
   
87,891,548
     
(7,610,938
)
   
93,197,607
   
$
(7,646,825
)

December 31, 2023
 
Less than 12 months
   
12 months or longer
   
Total
 
   
Fair value
   
Unrealized losses
   
Fair value
   
Unrealized losses
   
Fair value
   
Unrealized losses
 
U.S. Government and govt. agencies and authorities
 
$
1,497,390
     
(3,696
)
   
12,090,389
   
$
(725,501
)
   
13,587,779
   
$
(729,197
)
U.S. special revenue and assessments
   
0
     
0
     
7,308,458
     
(220,527
)
   
7,308,458
     
(220,527
)
All other corporate bonds
   
544,610
     
(2,319
)
   
73,678,567
     
(5,281,863
)
   
74,223,177
     
(5,284,182
)
Total fixed maturities
 
$
2,042,000
     
(6,015
)
   
93,077,414
   
$
(6,227,891
)
   
95,119,414
   
$
(6,233,906
)
Securities in Continuous Unrealized Loss Position
Additional information regarding investments in an unrealized loss position is as follows:

 
Less than 12 months
   
12 months or longer
   
Total
 
As of March 31, 2024
                 
Fixed maturities
   
4
     
45
     
49
 
As of December 31, 2023
                       
Fixed maturities
   
2
     
45
     
47
 
Net Unrealized Losses Included in Other Comprehensive Income (Loss)
Net unrealized losses included in other comprehensive income (loss) for investments classifies as available-for-sale, net of the effect of deferred income taxes, assuming that the depreciation had been realized as of  March 31, 2024 and December 31, 2023:

 
March 31, 2024
   
December 31, 2023
 
Unrealized appreciation (depreciation) on available-for-sale securities
 
$
(7,588,041
)
 
$
(6,144,902
)
Deferred income taxes
   
1,593,489
     
1,290,429
 
Net unrealized appreciation (depreciation) on available-for-sale securities
 
$
(5,994,552
)
 
$
(4,854,473
)
Trading Revenue Charged to Investment Income from Trading Securities
Trading revenue charged to net investment income from trading securities was:

 
Three Months Ended
 
   
March 31,
 
   
2024
   
2023
 
Net unrealized gains (losses)
 
$
(7,301
)
 
$
0
 
Net realized gains (losses)
   
0
     
0
 
Net unrealized and realized gains (losses)
 
$
(7,301
)
 
$
0
 

Maximum and Minimum Lending Rates for Mortgage Loan
During 2024 and 2023, the maximum and minimum lending rates for mortgage loans were:

 
2024
   
2023
 
   
Maximum rate
   
Minimum rate
   
Maximum rate
   
Minimum rate
 
Farm Loans
   
5.00
%
   
5.00
%
   
5.00
%
   
5.00
%
Commercial Loans
   
8.75
%
   
4.00
%
   
8.75
%
   
4.00
%
Residential Loans
   
5.00
%
   
4.15
%
   
5.00
%
   
4.15
%
Summary of Mortgage Loans Holdings
The following table summarizes the mortgage loan holdings of the Company:

   
March 31, 2024
   
December 31, 2023
 
In good standing
 
$
15,702,437
   
$
15,318,176
 
Total mortgage loans
 
$
15,702,437
   
$
15,318,176
 
Summary of Mortgage Loans Outstanding and Related Allowance for Credit Losses
The following is a summary of the mortgage loans outstanding and the related allowance for credit losses:

 
March 31, 2024
   
December 31, 2023
 
Farm
 
$
326,385
   
$
332,417
 
Commercial
   
1,482,229
     
13,764,209
 
Residential
   
14,174,823
     
1,495,550
 
Total mortgage loans
   
15,983,437
     
15,592,176
 
Less allowance for credit losses
   
(281,000
)
   
(274,000
)
Total mortgage loans, net
 
$
15,702,437
   
$
15,318,176
 
Notes Receivables
The following is a summary of the notes receivable outstanding and the related allowance for credit losses:

 
March 31, 2024
   
December 31, 2023
 
Notes receivable
 
$
14,637,379
   
$
14,259,225
 
Less allowance for credit losses
   
(258,000
)
   
(250,000
)
Total notes receivable, net
 
$
14,379,379
   
$
14,009,225
 
Investment Real Estate by Type
The following table provides an allocation of the Company’s investment real estate by type:

 
March 31, 2024
   
December 31, 2023
 
Raw land
 
$
7,096,926
   
$
6,971,930
 
Commercial
   
4,476,963
     
4,106,938
 
Residential
   
2,830,741
     
3,512,408
 
Land, minerals and royalty interests
   
6,967,352
     
7,383,844
 
Total investment real estate
 
$
21,371,982
   
$
21,975,120
 
Net Investment Gains (Losses) and Change in Net Unrealized Gains (Losses) on Investments

The following table presents net investment gains (losses) and the change in net unrealized gains on available-for-sale investments. 

 
Three Months Ended
 
   
March 31,
 
   
2024
   
2023
 
Realized gains:
           
Sales of fixed maturities
 
$
0
   
$
20,833
 
Sales of equity securities
   
0
     
85,184
 
Sales of real estate
   
37,461
     
586,774
 
Sales of short-term investments
   
9
     
23,509
 
Total realized gains
   
37,470
     
716,300
 
Realized losses:
               
Sales of equity securities
   
0
     
0
 
Total realized losses
   
0
     
0
 
Net realized investment gains
   
37,470
     
716,300
 
Change in fair value of equity securities:
               
Change in fair value of equity securities held at the end of the period
   
12,020,406
     
(8,645,474
)
Change in fair value of equity securities
   
12,020,406
     
(8,645,474
)
Net investment gains (losses)
 
$
12,057,876
   
$
(7,929,174
)
Change in net unrealized gains (losses) on available-for-sale investments included in other comprehensive income:
               
Fixed maturities
 
$
(1,443,139
)
 
$
2,810,499
 
Net increase (decrease)
 
$
(1,443,139
)
 
$
2,810,499
 
v3.24.1.1.u2
Fair Value Measurements (Tables)
3 Months Ended
Mar. 31, 2024
Fair Value Measurements [Abstract]  
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following table presents information about assets and liabilities measured at fair value on a recurring basis and indicates the level of the fair value measurement based on the observability of the inputs used:

March 31, 2024
 
Level 1
   
Level 2
   
Level 3
   
Total
 
Fixed maturitity securities:
                       
U.S. Government and government agencies and authorities
 
$
13,544,442
   
$
0
   
$
0
   
$
13,544,442
 
U.S. special revenue and assessments
   
0
     
7,205,639
     
0
     
7,205,639
 
Corporate securities
   
0
     
76,232,061
     
0
     
76,232,061
 
Total fixed maturities
   
13,544,442
     
83,437,700
     
0
     
96,982,142
 
Equity securities:
                               
Common stocks
   
37,439,195
     
5,582,300
     
2,857,144
     
45,878,639
 
Limited liability companies
   
0
     
0
     
60,359,880
     
60,359,880
 
Total equity securities
   
37,439,195
     
5,582,300
     
63,217,024
     
106,238,519
 
Short-term investments
   
13,714,840
     
0
     
0
     
13,714,840
 
Total financial assets
 
$
64,698,477
   
$
89,020,000
   
$
63,217,024
   
$
216,935,501
 
Liabilities:
                               
Trading securities
 
$
110,000
   
$
0
   
$
0
   
$
110,000
 

December 31, 2023
 
Level 1
   
Level 2
   
Level 3
   
Total
 
Fixed maturitity securities:
                       
U.S. Government and government agencies and authorities
 
$
13,587,779
   
$
0
   
$
0
   
$
13,587,779
 
U.S. special revenue and assessments
   
0
     
7,308,458
     
0
     
7,308,458
 
Corporate securities
   
0
     
82,513,599
     
0
     
82,513,599
 
Total fixed maturities
   
13,587,779
     
89,822,057
     
0
     
103,409,836
 
Equity securities:
                               
Common stocks
   
35,819,973
     
5,329,080
     
2,807,634
     
43,956,687
 
Limited liability companies
   
0
     
0
     
57,604,806
     
57,604,806
 
Total equity securities
   
35,819,973
     
5,329,080
     
60,412,440
     
101,561,493
 
Short-term investments
   
29,132,236
     
0
     
0
     
29,132,236
 
Total financial assets
 
$
78,539,988
   
$
95,151,137
   
$
60,412,440
   
$
234,103,565
 
Reconciliation for Level 3 Assets Measured at Fair Value on a Recurring Basis
Change in Recurring Fair Value Measurements

The following table presents the changes in Level 3 equity securities measured at fair value on a recurring basis, and the realized and unrealized gains (losses) related to the Level 3 equity securities.

         
Investments in
       
 
Investments in Common Stocks
   
Limited Liability Companies
   
Total
 
Balance at December 31, 2023
 
$
2,807,634
   
$
57,604,806
   
$
60,412,440
 
Realized gains (losses)
   
0
     
0
     
0
 
Unrealized gains (losses)
   
49,510
     
2,755,074
     
2,804,584
 
Purchases
   
0
     
0
     
0
 
Sales
   
0
     
0
     
0
 
Balance at March 31, 2024
 
$
2,857,144
   
$
60,359,880
   
$
63,217,024
 
Quantitative Information About Level 3 Fair Value Measurements
Quantitative Information About Level 3 Fair Value Measurements

The following table presents information about the significant unobservable inputs used for recurring fair value measurements for certain Level 3 instruments and includes only those instruments for which information about the inputs is reasonably available to the Company, such as data from independent third-party valuation service providers and from internal valuation models.

Financial Assets
 
Fair Value at
March 31, 2024
   
Fair Value at
December 31, 2023
 
Valuation Technique
Common stocks
 
$
2,857,144
   
$
2,807,634
 
Pricing Model
Limited liability companies
   
60,359,880
     
57,604,806
 
Pricing Model
Total
 
$
63,217,024
   
$
60,412,440
   
Investments in Certain Entities Carried at Fair Value Using Net Asset Value per Share
Investments in Certain Entities Carried at Fair Value Using Net Asset Value per Share

Investment Category
 
Fair Value at March 31, 2024
   
Unfunded Commitments
   
Redemption Frequency
   
Redemption Notice Period
 
Equity securities
                       
  Growth Equity
                       
Redeemable
                       
   Limited partnership
 
$
35,423,361
   
$
0
   
Quarterly
   
45 days
 
Non-redeemable
                           
Limited liability companies
   
10,478,935
     
9,204,839
             
Limited partnerships
   
16,179,160
     
2,366,695
     
n/a
     
n/a
 
Total
 
$
62,081,456
   
$
11,571,534
     
n/a
     
n/a
 

Investment Category
 
Fair Value at December 31, 2022
   
Unfunded Commitments
   
Redemption Frequency
   
Redemption Notice Period
 
Equity securities
                       
  Growth Equity
                       
Redeemable
                       
   Limited partnership
 
$
34,081,797
   
$
0
   
Quarterly
   
45 days
 
Non-redeemable
                           
Limited liability companies
   
11,960,929
     
9,464,608
     
n/a
     
n/a
 
   Limited partnerships
   
8,946,593
     
2,410,599
     
n/a
     
n/a
 
Total
 
$
54,989,319
   
$
11,875,207
                 
Carrying Values and Estimated Fair Values of Financial Instruments not Recorded at Fair Value
The following table presents the carrying amount and estimated fair values of the Company’s financial instruments not measured at fair value and indicates the level in the fair value hierarchy of the estimated fair value measurement based on the observability of the inputs used:

 
Carrying
   
Estimated
                   
March 31, 2024
 
Amount
   
Fair Value
   
Level 1
   
Level 2
   
Level 3
 
Assets
                             
Held to maturity redeemable preferred stock
 
$
2,500,000
     
2,500,000
     
0
     
0
     
2,500,000
 
Equity securities, at cost
   
15,816,798
     
15,816,798
     
0
     
0
     
15,816,798
 
Mortgage loans on real estate
   
15,702,437
     
14,824,642
     
0
     
0
     
14,824,642
 
Notes receivable
   
14,379,379
     
14,622,498
     
0
     
0
     
14,622,498
 
Investment real estate
   
21,371,982
     
62,624,766
     
0
     
0
     
62,624,766
 
Policy loans
   
5,994,931
     
5,994,931
     
0
     
0
     
5,994,931
 
Accrued investment income
   
1,720,261
     
1,720,261
     
0
     
0
     
1,720,261
 
                                         
Liabilities
                                       
Policy claims and benefits payable
   
3,534,448
     
3,534,448
     
0
     
0
     
3,534,448
 
Dividend and endowment accumulations
   
14,698,020
     
14,698,020
     
0
     
0
     
14,698,020
 

 
Carrying
   
Estimated
                   
December 31, 2023
 
Amount
   
Fair Value
   
Level 1
   
Level 2
   
Level 3
 
Assets
                             
Held to maturity redeemable preferred stock
 
$
2,500,000
     
2,500,000
     
0
     
0
     
2,500,000
 
Equity securities, at cost
   
15,977,368
     
15,977,368
     
0
     
0
     
15,977,368
 
Mortgage loans on real estate
   
15,318,176
     
14,447,026
     
0
     
0
     
14,447,026
 
Notes receivable
   
14,009,225
     
14,189,147
     
0
     
0
     
14,189,147
 
Investment real estate
   
21,975,120
     
62,899,838
     
0
     
0
     
62,899,838
 
Policy loans
   
6,018,248
     
6,018,248
     
0
     
0
     
6,018,248
 
Accrued investment income
   
2,001,064
     
2,001,064
     
0
     
0
     
2,001,064
 
                                         
Liabilities
                                       
Policy claims and benefits payable
   
4,188,917
     
4,188,917
     
0
     
0
     
4,188,917
 
Dividend and endowment accumulations
   
14,749,258
     
14,749,258
     
0
     
0
     
14,749,258
 
Notes payable
   
19,000,000
     
19,000,000
     
0
     
19,000,000
     
0
 
v3.24.1.1.u2
Credit Arrangements (Tables)
3 Months Ended
Mar. 31, 2024
Credit Arrangements [Abstract]  
Credit Arrangements
Instrument
 
Issue Date
 
Maturity Date
 
Revolving
Credit Limit
 
December 31, 2023
 
Borrowings
 
Repayments
 
March 31, 2024
Lines of Credit:
                                 
UTG
 
11/20/2013
 
11/20/2024
 
$
8,000,000
   
0
 
0
 
0
 
$
0
UG - CMA
 
10/21/2021
 
10/4/2024
   
25,000,000
   
19,000,000
 
0
 
19,000,000
   
0
v3.24.1.1.u2
Other Cash Flow Disclosures (Tables)
3 Months Ended
Mar. 31, 2024
Other Cash Flow Disclosures [Abstract]  
Expenses Paid on a Cash Basis
On a cash basis, the Company paid the following expenses:

 
Three Months Ended
 
   
March 31,
 
   
2024
   
2023
 
Interest
 
$
23,169
   
$
41,916
 
Federal income tax
   
0
     
0
 
v3.24.1.1.u2
Concentrations of Credit Risk (Tables)
3 Months Ended
Mar. 31, 2024
Concentrations [Abstract]  
Allocation of Oil and Gas Investments by Type
The Company owns a variety of investments associated with the oil and gas industry. These investments represent approximately 30% and 28% of the Company’s total invested assets as of March 31, 2024 and December 31, 2023, respectively. The following table provides an allocation of the oil and gas investments by type.

March 31, 2024
 
Land, Minerals &
Royalty Interests
   
Exploration
   
Total
 
Fixed maturities, at fair value
 
$
0
   
$
1,065,330
   
$
1,065,330
 
Equity securities, at fair value
   
89,840,001
     
0
     
89,840,001
 
Equity securities, at cost
   
5,547,263
     
0
     
5,547,263
 
Investment real estate
   
6,967,353
     
0
     
6,967,353
 
Notes receivable
   
2,000,000
     
0
     
2,000,000
 
Total
 
$
104,354,617
   
$
1,065,330
   
$
105,419,947
 

December 31, 2023
 
Land, Minerals &
Royalty Interests
   
Exploration
   
Total
 
Fixed maturities, at fair value
 
$
0
   
$
1,075,240
   
$
1,075,240
 
Equity securities, at fair value
   
84,066,203
     
0
     
84,066,203
 
Equity securities, at cost
   
5,826,381
     
0
     
5,826,381
 
Investment real estate
   
7,383,851
     
0
     
7,383,851
 
Notes receivable
   
2,000,000
     
0
     
2,000,000
 
Total
 
$
99,276,435
   
$
1,075,240
   
$
100,351,675
 
v3.24.1.1.u2
Basis of Presentation (Details)
Mar. 31, 2024
Chief Executive Officer and Chairman of the Board [Member]  
Ownership Interest [Abstract]  
Ownership interest percentage 65.89%
FSBI [Member] | FSNB [Member]  
Ownership Interest [Abstract]  
Ownership in subsidiary bank 100.00%
v3.24.1.1.u2
Investments, Available for Sale Securities (Details) - USD ($)
Mar. 31, 2024
Dec. 31, 2023
Fixed maturities [Abstract]    
Original or amortized cost $ 107,070,183 $ 112,054,738
Gross unrealized gains 58,784 89,004
Gross unrealized losses (7,646,825) (6,233,906)
Fair value 99,482,142 105,909,836
U.S. Government and Govt. Agencies and Authorities [Member]    
Fixed maturities [Abstract]    
Original or amortized cost 14,316,438 14,316,976
Gross unrealized gains 0 0
Gross unrealized losses (771,996) (729,197)
Fair value 13,544,442 13,587,779
U.S. Special Revenue and Assessments [Member]    
Fixed maturities [Abstract]    
Original or amortized cost 7,527,448 7,528,985
Gross unrealized gains 0 0
Gross unrealized losses (321,809) (220,527)
Fair value 7,205,639 7,308,458
All Other Corporate Bonds [Member]    
Fixed maturities [Abstract]    
Original or amortized cost 82,726,297 87,708,777
Gross unrealized gains 58,784 89,004
Gross unrealized losses (6,553,020) (5,284,182)
Fair value 76,232,061 82,513,599
Redeemable Preferred Stock [Member]    
Fixed maturities [Abstract]    
Original or amortized cost 2,500,000 2,500,000
Gross unrealized gains 0 0
Gross unrealized losses 0 0
Fair value $ 2,500,000 $ 2,500,000
v3.24.1.1.u2
Investments, Debt Securities by Contractual Maturity (Details)
Mar. 31, 2024
USD ($)
Amortized cost [Abstract]  
Due in one year or less $ 9,078,821
Due after one year through five years 43,078,621
Due after five years through ten years 5,945,729
Due after ten years 21,809,943
Fixed maturities with no single maturity date 27,157,069
Original or amortized cost 107,070,183
Fair value [Abstract]  
Due in one year or less 8,968,470
Due after one year through five years 41,313,290
Due after five years through ten years 5,920,055
Due after ten years 19,517,880
Fixed maturities with no single maturity date 23,762,447
Fair value $ 99,482,142
v3.24.1.1.u2
Investments, Securities in Continuous Unrealized Loss Position (Details) - USD ($)
Mar. 31, 2024
Dec. 31, 2023
Fixed Maturity Securities, Estimated Fair Value [Abstract]    
Less than 12 months $ 5,306,059 $ 2,042,000
12 months or longer, fair value 87,891,548 93,077,414
Total 93,197,607 95,119,414
Fixed Maturity Securities, Unrealized Losses [Abstract]    
Less than 12 months (35,887) (6,015)
12 months or longer (7,610,938) (6,227,891)
Total (7,646,825) (6,233,906)
U.S. Government and Govt. Agencies and Authorities [Member]    
Fixed Maturity Securities, Estimated Fair Value [Abstract]    
Less than 12 months 1,487,865 1,497,390
12 months or longer, fair value 12,056,577 12,090,389
Total 13,544,442 13,587,779
Fixed Maturity Securities, Unrealized Losses [Abstract]    
Less than 12 months (13,073) (3,696)
12 months or longer (758,923) (725,501)
Total (771,996) (729,197)
U.S. Special Revenue and Assessments [Member]    
Fixed Maturity Securities, Estimated Fair Value [Abstract]    
Less than 12 months 0 0
12 months or longer, fair value 7,205,639 7,308,458
Total 7,205,639 7,308,458
Fixed Maturity Securities, Unrealized Losses [Abstract]    
Less than 12 months 0 0
12 months or longer (321,809) (220,527)
Total (321,809) (220,527)
All Other Corporate Bonds [Member]    
Fixed Maturity Securities, Estimated Fair Value [Abstract]    
Less than 12 months 3,818,194 544,610
12 months or longer, fair value 68,629,332 73,678,567
Total 72,447,526 74,223,177
Fixed Maturity Securities, Unrealized Losses [Abstract]    
Less than 12 months (22,814) (2,319)
12 months or longer (6,530,206) (5,281,863)
Total $ (6,553,020) $ (5,284,182)
v3.24.1.1.u2
Investments, Number of Securities in Unrealized Loss Position (Details) - Security
Mar. 31, 2024
Dec. 31, 2023
Fixed Maturities, Number of Securities in Unrealized Loss Position [Abstract]    
Less than 12 months 4 2
12 months or longer 45 45
Total 49 47
v3.24.1.1.u2
Investments, Net Unrealized Losses Included in Other Comprehensive Income (Loss) (Details) - USD ($)
Mar. 31, 2024
Dec. 31, 2023
Net Unrealized Losses Included in Other Comprehensive Income (Loss) for Investments Classifies as Available-for-Sale [Abstract]    
Unrealized appreciation (depreciation) on available-for-sale securities $ (7,588,041) $ (6,144,902)
Deferred income taxes 1,593,489 1,290,429
Net unrealized appreciation (depreciation) on available-for-sale securities $ (5,994,552) $ (4,854,473)
v3.24.1.1.u2
Investments, Cost Method Investments (Details) - USD ($)
Mar. 31, 2024
Dec. 31, 2023
Investments [Abstract]    
Mortgage loans on real estate $ 15,816,798 $ 15,977,368 [1]
[1] Balance sheet audited at December 31, 2023.
v3.24.1.1.u2
Investments, Trading Securities (Details) - USD ($)
3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Dec. 31, 2023
Trading Securities [Abstract]      
Fair value, derivatives included in trading security assets $ 0   $ 0
Fair value, derivative included in trading security liabilities 110,000   $ 0
Trading Revenue Charged to Net Investment Income from Trading Securities [Abstract]      
Net unrealized gains (losses) (7,301) $ (0)  
Net realized gains (losses) 0 0  
Net unrealized and realized gains (losses) $ (7,301) $ 0  
v3.24.1.1.u2
Investments, Mortgage Loans, Investment Real Estate, Notes Receivable, and Short-Term Investments (Details) - USD ($)
3 Months Ended 12 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Dec. 31, 2023
Mortgage Loans [Abstract]      
Mortgage loans acquired, including discounted mortgage loans $ 599,189 $ 0  
Servicing fee on loan 0.25%    
Loan origination 0.50%    
Loan limit threshold for appraised property value 80.00%    
Mortgage loan holdings [Abstract]      
Mortgage loans, gross $ 15,983,437   $ 15,592,176
Less allowance for credit losses (281,000)   (274,000)
Mortgage loans, net 15,702,437   15,318,176 [1]
Investment Real Estate [Abstract]      
Impairment on investment real estate 0    
Total investment real estate $ 21,371,982   $ 21,975,120 [1]
Oil & Gas Royalties - as a % of total Inv RE 33.00%   34.00%
Investment real estate acquired $ 545,180 1,375,010  
Notes Receivable [Abstract]      
Notes receivable acquired 800,000 1,478,100  
Notes receivable 14,637,379   $ 14,259,225
Less allowance for credit losses (258,000)   (250,000)
Total notes receivable, net 14,379,379   14,009,225 [1]
Short-Term Investments [Abstract]      
Short-term investments acquired $ (0) $ 9,701,297  
Minimum [Member]      
Investment Real Estate [Abstract]      
Estimated useful life 3 years    
Maximum [Member]      
Investment Real Estate [Abstract]      
Estimated useful life 30 years    
Unfunded Loan Commitments [Member]      
Notes Receivable [Abstract]      
Less allowance for credit losses $ 36,000   51,000
Raw Land [Member]      
Investment Real Estate [Abstract]      
Total investment real estate 7,096,926   6,971,930
Commercial [Member]      
Investment Real Estate [Abstract]      
Total investment real estate 4,476,963   4,106,938
Residential [Member]      
Investment Real Estate [Abstract]      
Total investment real estate 2,830,741   3,512,408
Land, Minerals and Royalty Interests [Member]      
Investment Real Estate [Abstract]      
Total investment real estate 6,967,352   7,383,844
In Good Standing [Member]      
Mortgage loan holdings [Abstract]      
Mortgage loans, net 15,702,437   15,318,176
Past Due [Member]      
Notes Receivable [Abstract]      
Notes receivable 0   0
Farm Loans [Member]      
Mortgage loan holdings [Abstract]      
Mortgage loans, gross $ 326,385   $ 332,417
Farm Loans [Member] | Minimum [Member]      
Mortgage Loans [Abstract]      
Interest rate on mortgage loans 5.00%   5.00%
Farm Loans [Member] | Maximum [Member]      
Mortgage Loans [Abstract]      
Interest rate on mortgage loans 5.00%   5.00%
Commercial Loans [Member]      
Mortgage loan holdings [Abstract]      
Mortgage loans, gross $ 1,482,229   $ 13,764,209
Commercial Loans [Member] | Minimum [Member]      
Mortgage Loans [Abstract]      
Interest rate on mortgage loans 4.00%   4.00%
Commercial Loans [Member] | Maximum [Member]      
Mortgage Loans [Abstract]      
Interest rate on mortgage loans 8.75%   8.75%
Residential Loans [Member]      
Mortgage loan holdings [Abstract]      
Mortgage loans, gross $ 14,174,823   $ 1,495,550
Residential Loans [Member] | Minimum [Member]      
Mortgage Loans [Abstract]      
Interest rate on mortgage loans 4.15%   4.15%
Residential Loans [Member] | Maximum [Member]      
Mortgage Loans [Abstract]      
Interest rate on mortgage loans 5.00%   5.00%
[1] Balance sheet audited at December 31, 2023.
v3.24.1.1.u2
Investments, Net Investment Gains (Losses) and Change in Net Unrealized Gains (Losses) on Investments (Details) - USD ($)
3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Realized gains on available-for-sale investments [Abstract]    
Total realized gains $ 37,470 $ 716,300
Realized losses on available-for-sale investments [Abstract]    
Total realized losses 0 0
Net realized investment gains 37,470 716,300
Change in fair value of equity securities [Abstract]    
Change in fair value of equity securities held at the end of the period 12,020,406 (8,645,474)
Change in fair value of equity securities 12,020,406 (8,645,474)
Total net investment gains (losses) 12,057,876 (7,929,174)
Change in net unrealized gains (losses) on available-for-sale investments included in other comprehensive income [Abstract]    
Change in net unrealized gains (losses) on available-for-sale investments included in other comprehensive income (1,443,139) 2,810,499
Fixed Maturities [Member]    
Realized gains on available-for-sale investments [Abstract]    
Total realized gains 0 20,833
Change in net unrealized gains (losses) on available-for-sale investments included in other comprehensive income [Abstract]    
Change in net unrealized gains (losses) on available-for-sale investments included in other comprehensive income (1,443,139) 2,810,499
Equity Securities [Member]    
Realized gains on available-for-sale investments [Abstract]    
Total realized gains 0 85,184
Realized losses on available-for-sale investments [Abstract]    
Total realized losses 0 0
Real Estate [Member]    
Realized gains on available-for-sale investments [Abstract]    
Total realized gains 37,461 586,774
Short-Term Investments [Member]    
Realized gains on available-for-sale investments [Abstract]    
Total realized gains $ 9 $ 23,509
v3.24.1.1.u2
Fair Value Measurements, Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($)
Mar. 31, 2024
Dec. 31, 2023
Assets [Abstract]    
Fixed maturities, at fair value $ 96,982,142 $ 103,409,836 [1]
Equity securities, at fair value 168,319,975 156,550,812 [1]
Liabilities [Abstract]    
Trading Securities 110,000 0
Measured on a Recurring Basis [Member]    
Assets [Abstract]    
Fixed maturities, at fair value 96,982,142 103,409,836
Equity securities, at fair value 106,238,519 101,561,493
Short-term investments 13,714,840 29,132,236
Total financial assets 216,935,501 234,103,565
Liabilities [Abstract]    
Trading Securities 110,000  
Measured on a Recurring Basis [Member] | U.S. Government and Government Agencies and Authorities [Member]    
Assets [Abstract]    
Fixed maturities, at fair value 13,544,442 13,587,779
Measured on a Recurring Basis [Member] | U.S. Special Revenue and Assessments [Member]    
Assets [Abstract]    
Fixed maturities, at fair value 7,205,639 7,308,458
Measured on a Recurring Basis [Member] | Corporate Securities [Member]    
Assets [Abstract]    
Fixed maturities, at fair value 76,232,061 82,513,599
Measured on a Recurring Basis [Member] | Common Stock [Member]    
Assets [Abstract]    
Equity securities, at fair value 45,878,639 43,956,687
Measured on a Recurring Basis [Member] | Limited Liability Companies [Member]    
Assets [Abstract]    
Equity securities, at fair value   57,604,806
Measured on a Recurring Basis [Member] | Preferred Stock [Member]    
Assets [Abstract]    
Equity securities, at fair value 60,359,880  
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 1 [Member]    
Assets [Abstract]    
Fixed maturities, at fair value 13,544,442 13,587,779
Equity securities, at fair value 37,439,195 35,819,973
Short-term investments 13,714,840 29,132,236
Total financial assets 64,698,477 78,539,988
Liabilities [Abstract]    
Trading Securities 110,000  
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 1 [Member] | U.S. Government and Government Agencies and Authorities [Member]    
Assets [Abstract]    
Fixed maturities, at fair value 13,544,442 13,587,779
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 1 [Member] | U.S. Special Revenue and Assessments [Member]    
Assets [Abstract]    
Fixed maturities, at fair value 0 0
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 1 [Member] | Corporate Securities [Member]    
Assets [Abstract]    
Fixed maturities, at fair value 0 0
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 1 [Member] | Common Stock [Member]    
Assets [Abstract]    
Equity securities, at fair value 37,439,195 35,819,973
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 1 [Member] | Limited Liability Companies [Member]    
Assets [Abstract]    
Equity securities, at fair value   0
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 1 [Member] | Preferred Stock [Member]    
Assets [Abstract]    
Equity securities, at fair value 0  
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 2 [Member]    
Assets [Abstract]    
Fixed maturities, at fair value 83,437,700 89,822,057
Equity securities, at fair value 5,582,300 5,329,080
Short-term investments 0 0
Total financial assets 89,020,000 95,151,137
Liabilities [Abstract]    
Trading Securities 0  
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 2 [Member] | U.S. Government and Government Agencies and Authorities [Member]    
Assets [Abstract]    
Fixed maturities, at fair value 0 0
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 2 [Member] | U.S. Special Revenue and Assessments [Member]    
Assets [Abstract]    
Fixed maturities, at fair value 7,205,639 7,308,458
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 2 [Member] | Corporate Securities [Member]    
Assets [Abstract]    
Fixed maturities, at fair value 76,232,061 82,513,599
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 2 [Member] | Common Stock [Member]    
Assets [Abstract]    
Equity securities, at fair value 5,582,300 5,329,080
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 2 [Member] | Limited Liability Companies [Member]    
Assets [Abstract]    
Equity securities, at fair value   0
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 2 [Member] | Preferred Stock [Member]    
Assets [Abstract]    
Equity securities, at fair value 0  
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 3 [Member]    
Assets [Abstract]    
Fixed maturities, at fair value 0 0
Equity securities, at fair value 63,217,024 60,412,440
Short-term investments 0 0
Total financial assets 63,217,024 60,412,440
Liabilities [Abstract]    
Trading Securities 0  
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 3 [Member] | U.S. Government and Government Agencies and Authorities [Member]    
Assets [Abstract]    
Fixed maturities, at fair value 0 0
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 3 [Member] | U.S. Special Revenue and Assessments [Member]    
Assets [Abstract]    
Fixed maturities, at fair value 0 0
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 3 [Member] | Corporate Securities [Member]    
Assets [Abstract]    
Fixed maturities, at fair value 0 0
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 3 [Member] | Common Stock [Member]    
Assets [Abstract]    
Equity securities, at fair value 2,857,144 2,807,634
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 3 [Member] | Limited Liability Companies [Member]    
Assets [Abstract]    
Equity securities, at fair value   57,604,806
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 3 [Member] | Preferred Stock [Member]    
Assets [Abstract]    
Equity securities, at fair value 60,359,880  
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Net Asset Value [Member]    
Assets [Abstract]    
Total financial assets $ 62,081,456 $ 54,989,319
[1] Balance sheet audited at December 31, 2023.
v3.24.1.1.u2
Fair Value Measurements, Reconciliation for Level 3 Assets Measured at Fair Value on a Recurring Basis (Details)
3 Months Ended
Mar. 31, 2024
USD ($)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]  
Beginning Balance $ 60,412,440
Purchases 0
Sales 0
Ending Balance 63,217,024
Other Realized Investment Gains, Net [Member]  
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]  
Realized and unrealized gains (losses) $ 0
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] Other realized investment gains, net
Change in Fair Value of Equity Securities [Member]  
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]  
Realized and unrealized gains (losses) $ 2,804,584
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] Equity Securities, FV-NI, Realized Gain (Loss)
Equity Securities [Member]  
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]  
Beginning Balance $ 60,412,440
Ending Balance 63,217,024
Equity Securities [Member] | Common Stock [Member]  
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]  
Beginning Balance 2,807,634
Purchases 0
Sales 0
Ending Balance 2,857,144
Equity Securities [Member] | Limited Liability Companies [Member]  
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]  
Beginning Balance 57,604,806
Purchases 0
Sales 0
Ending Balance 60,359,880
Equity Securities [Member] | Other Realized Investment Gains, Net [Member] | Common Stock [Member]  
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]  
Realized and unrealized gains (losses) 0
Equity Securities [Member] | Other Realized Investment Gains, Net [Member] | Limited Liability Companies [Member]  
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]  
Realized and unrealized gains (losses) 0
Equity Securities [Member] | Change in Fair Value of Equity Securities [Member] | Common Stock [Member]  
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]  
Realized and unrealized gains (losses) 49,510
Equity Securities [Member] | Change in Fair Value of Equity Securities [Member] | Limited Liability Companies [Member]  
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]  
Realized and unrealized gains (losses) $ 2,755,074
v3.24.1.1.u2
Fair Value Measurements, Quantitative Information About Level 3 (Details) - USD ($)
Mar. 31, 2024
Dec. 31, 2023
Information about Significant Unobservable Inputs Used for Recurring Fair Value Measurements for Certain Level 3 Instruments [Abstract]    
Financial assets, fair value $ 63,217,024 $ 60,412,440
Equity Securities [Member]    
Information about Significant Unobservable Inputs Used for Recurring Fair Value Measurements for Certain Level 3 Instruments [Abstract]    
Financial assets, fair value 63,217,024 60,412,440
Equity Securities [Member] | Common Stock [Member]    
Information about Significant Unobservable Inputs Used for Recurring Fair Value Measurements for Certain Level 3 Instruments [Abstract]    
Financial assets, fair value 2,857,144 2,807,634
Equity Securities [Member] | Limited Liability Companies [Member]    
Information about Significant Unobservable Inputs Used for Recurring Fair Value Measurements for Certain Level 3 Instruments [Abstract]    
Financial assets, fair value 60,359,880 57,604,806
Pricing Model [Member] | Equity Securities [Member] | Common Stock [Member]    
Information about Significant Unobservable Inputs Used for Recurring Fair Value Measurements for Certain Level 3 Instruments [Abstract]    
Financial assets, fair value 2,857,144 2,807,634
Pricing Model [Member] | Equity Securities [Member] | Limited Liability Companies [Member]    
Information about Significant Unobservable Inputs Used for Recurring Fair Value Measurements for Certain Level 3 Instruments [Abstract]    
Financial assets, fair value $ 60,359,880 $ 57,604,806
v3.24.1.1.u2
Fair Value Measurements, Investments in Certain Entities Carried at Fair Value Using Net Asset Value per Share (Details) - Net Asset Value [Member] - Equity Securities [Member] - USD ($)
3 Months Ended 12 Months Ended
Mar. 31, 2024
Dec. 31, 2023
Growth Equity [Member]    
Investments in Certain Entities Carried at Fair Value Using Net Asset Value per Share [Abstract]    
Fair value $ 62,081,456 $ 54,989,319
Unfunded commitments 11,571,534 11,875,207
Growth Equity Redeemable [Member]    
Investments in Certain Entities Carried at Fair Value Using Net Asset Value per Share [Abstract]    
Fair value 35,423,361 34,081,797
Unfunded commitments $ 0 $ 0
Redemption frequency Quarterly Quarterly
Redemption notice period 45 days 45 days
Growth Equity Non-Redeemable [Member] | Limited Liability Companies [Member]    
Investments in Certain Entities Carried at Fair Value Using Net Asset Value per Share [Abstract]    
Fair value $ 10,478,935 $ 11,960,929
Unfunded commitments 9,204,839 9,464,608
Growth Equity Non-Redeemable [Member] | Limited Partnerships [Member]    
Investments in Certain Entities Carried at Fair Value Using Net Asset Value per Share [Abstract]    
Fair value 16,179,160 8,946,593
Unfunded commitments $ 2,366,695 $ 2,410,599
v3.24.1.1.u2
Fair Value Measurements, Carrying Values and Estimated Fair Values of Financial Instruments not Recorded at Fair Value (Details) - USD ($)
Mar. 31, 2024
Dec. 31, 2023
Carrying Amount [Member]    
Assets [Abstract]    
Held to maturity redeemable preferred stock $ 2,500,000 $ 2,500,000
Equity securities, at cost 15,816,798 15,977,368
Mortgage loans on real estate 15,702,437 15,318,176
Notes receivable 14,379,379 14,009,225
Investment real estate 21,371,982 21,975,120
Policy loans 5,994,931 6,018,248
Accrued investment income 1,720,261 2,001,064
Liabilities [Abstract]    
Policy claims and benefits payable 3,534,448 4,188,917
Dividend and endowment accumulations 14,698,020 14,749,258
Notes payable   19,000,000
Estimated Fair Value [Member]    
Assets [Abstract]    
Held to maturity redeemable preferred stock 2,500,000 2,500,000
Equity securities, at cost 15,816,798 15,977,368
Mortgage loans on real estate 14,824,642 14,447,026
Notes receivable 14,622,498 14,189,147
Investment real estate 62,624,766 62,899,838
Policy loans 5,994,931 6,018,248
Accrued investment income 1,720,261 2,001,064
Liabilities [Abstract]    
Policy claims and benefits payable 3,534,448 4,188,917
Dividend and endowment accumulations 14,698,020 14,749,258
Notes payable   19,000,000
Equity securities, at cost $ 15,816,798 15,977,368 [1]
Minimum [Member]    
Liabilities [Abstract]    
Policy loan interest rate 4.00%  
Maximum [Member]    
Liabilities [Abstract]    
Policy loan interest rate 8.00%  
Level 1 [Member]    
Assets [Abstract]    
Held to maturity redeemable preferred stock $ 0 0
Equity securities, at cost 0 0
Mortgage loans on real estate 0 0
Notes receivable 0 0
Investment real estate 0 0
Policy loans 0 0
Accrued investment income 0 0
Liabilities [Abstract]    
Policy claims and benefits payable 0 0
Dividend and endowment accumulations 0 0
Notes payable   0
Level 2 [Member]    
Assets [Abstract]    
Held to maturity redeemable preferred stock 0 0
Equity securities, at cost 0 0
Mortgage loans on real estate 0 0
Notes receivable 0 0
Investment real estate 0 0
Policy loans 0 0
Accrued investment income 0 0
Liabilities [Abstract]    
Policy claims and benefits payable 0 0
Dividend and endowment accumulations 0 0
Notes payable   19,000,000
Level 3 [Member]    
Assets [Abstract]    
Held to maturity redeemable preferred stock 2,500,000 2,500,000
Equity securities, at cost 15,816,798 15,977,368
Mortgage loans on real estate 14,824,642 14,447,026
Notes receivable 14,622,498 14,189,147
Investment real estate 62,624,766 62,899,838
Policy loans 5,994,931 6,018,248
Accrued investment income 1,720,261 2,001,064
Liabilities [Abstract]    
Policy claims and benefits payable 3,534,448 4,188,917
Dividend and endowment accumulations $ 14,698,020 14,749,258
Notes payable   $ 0
[1] Balance sheet audited at December 31, 2023.
v3.24.1.1.u2
Credit Arrangements (Details) - USD ($)
3 Months Ended
Mar. 31, 2024
Dec. 31, 2023
Line of Credit Facility [Abstract]    
Pledged bonds $ 14,637,379 $ 14,259,225
Asset Pledged as Collateral [Member]    
Line of Credit Facility [Abstract]    
Pledged bonds $ 19,698,879  
UTG 2013-11-20 [Member]    
Line of Credit Facility [Abstract]    
Issue Date Nov. 20, 2013  
Maturity Date Nov. 20, 2024  
Revolving Credit Limit $ 8,000,000  
Outstanding Balance 0 0
Borrowings 0  
Repayments $ 0  
Assets Pledged common voting stock of its wholly owned subsidiary, Universal Guaranty Life Insurance Company.  
UTG 2013-11-20 [Member] | UG [Member]    
Line of Credit Facility [Abstract]    
Percentage of common voting stock pledged 100.00%  
Cash Management Advance [Member] | Variable Rate [Member] | Maximum [Member]    
Line of Credit Facility [Abstract]    
Period of interest under CMA 90 days  
Cash Management Advance [Member] | Fixed Rate [Member] | Maximum [Member]    
Line of Credit Facility [Abstract]    
Period of interest under CMA 30 days  
Cash Management Advance [Member] | UG [Member]    
Line of Credit Facility [Abstract]    
Issue Date Oct. 21, 2021  
Maturity Date Oct. 04, 2024  
Revolving Credit Limit $ 25,000,000  
Outstanding Balance 0 $ 19,000,000
Borrowings 0  
Repayments $ 19,000,000  
v3.24.1.1.u2
Shareholders' Equity (Details) - USD ($)
3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Stock Repurchase Program [Abstract]    
Stock repurchase program authorized amount $ 22,000,000  
Stock repurchased during period (in shares) 3,598  
Amount paid to repurchase shares during the year $ 108,914 $ 100,228
Amount of common stock repurchased $ 20,300,317  
Number of common stock acquired (in shares) 1,360,457  
Number of shares issued (in shares) 9,944  
Cost of shares issued $ 299,314  
Earnings Per Share Calculations [Abstract]    
Dilutive instruments outstanding (in shares) 0 0
v3.24.1.1.u2
Commitments and Contingencies (Details) - USD ($)
Mar. 31, 2024
Dec. 31, 2023
Total Funding Commitments and Unfunded Commitment [Abstract]    
Mortgage loan commitments $ 278,944 $ 878,132
Notes receivable commitments 2,000,000 2,800,000
Unfunded Commitment $ 15,718,682 $ 16,153,903
v3.24.1.1.u2
Other Cash Flow Disclosures (Details) - USD ($)
3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Other Cash Flow Disclosures [Abstract]    
Interest $ 23,169 $ 41,916
Federal income tax $ 0 $ 0
v3.24.1.1.u2
Concentrations of Credit Risk (Details)
3 Months Ended 12 Months Ended
Mar. 31, 2024
USD ($)
Security
State
Mar. 31, 2023
Dec. 31, 2023
USD ($)
Security
Concentrations [Abstract]      
Number of states by which entity primarily serves | State 3    
Maximum retention limits per life $ 125,000    
Allocation of Oil and Gas Investments [Abstract]      
Fixed maturities, at fair value 96,982,142   $ 103,409,836 [1]
Equity securities, at fair value 168,319,975   156,550,812 [1]
Equity securities, at cost 15,816,798   15,977,368 [1]
Notes receivable 14,379,379   14,009,225 [1]
Investment real estate 21,371,982   21,975,120 [1]
Total investments $ 354,782,484   $ 364,891,021 [1]
Land, Minerals & Royalty Interests [Member] | Equity Securities [Member]      
Concentrations [Abstract]      
Number of equity securities owned | Security 4    
Transportation [Member] | Equity Securities [Member]      
Concentrations [Abstract]      
Number of equity securities owned | Security     4
Oil and Gas Industry [Member]      
Allocation of Oil and Gas Investments [Abstract]      
Fixed maturities, at fair value $ 1,065,330   $ 1,075,240
Equity securities, at fair value 89,840,001   84,066,203
Equity securities, at cost 5,547,263   5,826,381
Notes receivable 2,000,000   2,000,000
Investment real estate 6,967,353   7,383,851
Total investments 105,419,947   100,351,675
Oil and Gas Industry [Member] | Land, Minerals & Royalty Interests [Member]      
Allocation of Oil and Gas Investments [Abstract]      
Fixed maturities, at fair value 0   0
Equity securities, at fair value 89,840,001   84,066,203
Equity securities, at cost 5,547,263   5,826,381
Notes receivable 2,000,000   2,000,000
Investment real estate 6,967,353   7,383,851
Total investments 104,354,617   99,276,435
Oil and Gas Industry [Member] | Exploration [Member]      
Allocation of Oil and Gas Investments [Abstract]      
Fixed maturities, at fair value 1,065,330   1,075,240
Equity securities, at fair value 0   0
Equity securities, at cost 0   0
Notes receivable 0   0
Investment real estate 0   0
Total investments $ 1,065,330   $ 1,075,240
Reinsurer Concentration Risk [Member] | Life Insurance Ceded [Member]      
Concentrations [Abstract]      
Percentage of gross insurance in force 21.00%   20.00%
Percentage of premium income 31.00% 29.00%  
Direct Premium Collected [Member] | Geographic Concentration Risk [Member] | Illinois, Ohio, Texas and West Virginia [Member]      
Concentrations [Abstract]      
Concentration risk, percentage 49.00% 50.00%  
Invested Assets [Member] | Customer Concentration Risk [Member] | Oil and Gas Industry [Member]      
Concentrations [Abstract]      
Concentration risk, percentage 30.00%   28.00%
Invested Assets [Member] | Customer Concentration Risk [Member] | Oil and Gas Industry [Member] | Equity Securities [Member]      
Concentrations [Abstract]      
Concentration risk, percentage 75.00%    
Invested Assets [Member] | Customer Concentration Risk [Member] | Oil and Gas Industry [Member] | Transportation [Member] | Equity Securities [Member]      
Concentrations [Abstract]      
Concentration risk, percentage     73.00%
[1] Balance sheet audited at December 31, 2023.

UTG (PK) (USOTC:UTGN)
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