10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

(Amendment 1)

(Mark One)

[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 AND 15(d) OF THE SECURITIES EXCHANGE ACT
	OF 1934

For the quarterly period ended June 30, 2011

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. 0-16867

	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.)
	5250 SOUTH SIXTH STREET
	P.O. BOX 5147
	SPRINGFIELD, IL  62705
	(Address of principal executive offices) (Zip Code)

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

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 [X]  No [  ]

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

Large accelerated filer [  ] Accelerated filer [  ] Non-accelerated filer [  ] Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company. Yes [  ] No [X]

The number of shares outstanding of the registrant’s common stock as of July 31, 2011, was 3,808,458.

The June 30, 2011 Form 10Q of the Registrant is being amended to include in Item 6, Exhibits and Reports on Form 8-K as Exhibit 101 the filings relative to the new XBRL format information.

ITEM 6.  EXHIBITS.

EXHIBITS

Exhibit Number Description

  101   XBRL Interactive Data File

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:	September 15, 2011	By	/s/ James P. Rousey
			James P. Rousey
			President, and Director

Date:	September 15, 2011	By	/s/ Theodore C. Miller
			Theodore C. Miller
			Senior Vice President
			and Chief Financial Officer

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Balance Sheet Parenthetical (USD $)	Jun. 30, 2011	Dec. 31, 2010
Investments available for sale:
Fixed maturies, at market (amortized cost)	$ 142,487,253	$ 142,948,693
Equity securities, cost	11,641,116	13,940,811
Trading securities, cost	28,447,996	34,183,252
Investment in unconsolidated affiliate, cost	5,000,000	5,000,000
Trading Securities, Proceeds	$ 16,494,442	$ 17,387,108
Shareholders' equity:
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, issued (in shares)	3,810,825	3,848,079
Common stock, outstanding (in shares)	3,810,825	3,848,079
Common stock, treasury shares (in shares)	484,183	446,929

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Income Statement (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Revenues:
Premiums and policy fees	$ 3,622,448	$ 3,910,489	$ 7,402,014	$ 8,033,347
Ceded Reinsurance premiums and policy fees	(1,002,699)	(1,481,444)	(1,830,973)	(2,447,535)
Net investment income	5,575,059	4,875,160	11,866,576	9,198,109
Other income	522,480	472,971	1,001,704	939,353
Revenues before realized gains (losses)	8,717,288	7,777,176	18,439,321	15,723,274
Other-than-temporary impairments	(222,947)	0	(262,067)	(477,386)
Other realized investment gains (losses), net	325,990	736	1,921,508	215,672
Total realized investment gains (losses), net	103,043	736	1,659,441	(261,714)
Total revenues	8,820,331	7,777,912	20,098,762	15,461,560
Benefits and other expenses:
Life	4,702,304	5,862,899	9,775,949	11,874,555
Ceded Reinsurance benefits and claims	(826,845)	(2,113,801)	(1,510,834)	(3,869,632)
Annuity	254,810	332,393	523,541	498,061
Dividends to policyholders	139,216	151,625	291,785	319,548
Commissions and amortization of deferred policy acquisition costs	(219,139)	(226,811)	(431,829)	(344,185)
Amortization of cost of insurance acquired	307,754	331,183	615,508	662,366
Operating expenses	2,064,465	1,848,216	4,130,802	3,819,786
Interest expense	82,001	84,593	139,963	181,277
Total benefits and other expenses	6,504,566	6,270,297	13,534,885	13,141,776
Income (loss) before income taxes	2,315,765	1,507,615	6,563,877	2,319,784
Income tax (expense) benefit	(919,968)	(234,208)	(1,383,711)	(546,737)
Net income (loss)	1,395,797	1,273,407	5,180,166	1,773,047
Net (income) loss attributable to noncontrolling interest	(139,861)	(88,107)	(564,265)	(252,556)
Net income (loss) attributable to common shareholders'	$ 1,255,936	$ 1,185,300	$ 4,615,901	$ 1,520,491
Basic income per share	$ 0.33	$ 0.31	$ 1.21	$ 0.39
Diluted income per share	$ 0.33	$ 0.31	$ 1.21	$ 0.39
Basic weighted average shares outstanding	3,823,305	3,879,794	3,828,572	3,877,852
Diluted weighted average shares outstanding	3,823,305	3,879,794	3,828,572	3,877,852

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Document And Entity Information (USD $)	6 Months Ended
	Jun. 30, 2011
Entity Registrant Name	UTG INC
Entity Central Index Key	0000832480
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Public Float	$ 45,000,000
Entity Common Stock, Shares Outstanding	3,808,458
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2011

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OTHER CASH FLOW DISCLOSURES

6 Months Ended

Jun. 30, 2011

OTHER CASH FLOW DISCLOSURES [Abstract]

OTHER CASH FLOW DISCLOSURES

On a cash basis, the Company paid $84,403 and $166,576 in interest expense during the first six months of 2011 and 2010, respectively.  The Company paid $1,905,000 and $632,298 in federal income tax during the first six months of 2011 and 2010, respectively.

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PROPOSED MERGER

6 Months Ended

Jun. 30, 2011

PROPOSED MERGER

PROPOSED MERGER (Text Block)

The UTG and ACAP boards of directors have approved a merger proposal of the two entities whereby the shareholders of ACAP would receive shares of UTG in exchange for their current ACAP shares.  ACAP is currently a 73% owned subsidiary of UG.  The merger would reduce the corporate structure and provide certain efficiencies and economies to the Companies.  Conditions of completion of this proposal include, among other things, necessary regulatory approvals and ACAP shareholder approval.

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INVESTMENTS

6 Months Ended

Jun. 30, 2011

INVESTMENTS [Abstract]

INVESTMENTS

A. Available for Sale Securities – Fixed Maturity and Equity Securities

As of June 30, 2011 and December 31, 2010, fixed maturities available for sale represented 45% of total invested assets. The Company’s insurance subsidiaries are 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.  In light of these statutes and regulations, and the Company’s business and investment strategy, the Company generally seeks to invest in United States government and government agency securities and other high quality low risk investments.

At June 30, 2011, 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.  The Company has identified securities it may sell and classified them as “investments available for sale”.  Investments available for sale are carried at market, with changes in market value directly recorded to shareholders’ equity.

The amortized cost and estimated market values of investments in securities including investments held for sale are as follows:

June 30, 2011		Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Market Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	92,036,326	$	4,141,275	$	0	$	96,177,601
States, municipalities and political subdivisions		290,000		5,116		0		295,116
Collateralized mortgage obligations		5,442,639		66,570		(4,235)		5,504,974
Public utilities		399,881		59,571		0		459,452
All other corporate bonds		44,318,407		1,610,739		(1,222,713)		44,706,433
		142,487,253		5,883,271		(1,226,948)		147,143,576
Equity securities		11,641,116		183,639		(78,825)		11,745,930
Total	$	154,128,369	$	6,066,910	$	(1,305,773)	$	158,889,506
Investment in unconsolidated affiliate	$	5,000,000	$	188,758	$	0	$	5,188,758

December 31, 2010		Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Market Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	74,596,648	$	4,427,285	$	0	$	79,023,933
States, municipalities and political subdivisions		330,000		5,198		0		335,198
Collateralized mortgage obligations		16,170,099		510,840		(6,677)		16,674,262
Public utilities		904,139		82,886		0		987,025
All other corporate bonds		50,947,807		2,320,965		(2,383,242)		50,885,530
		142,948,693		7,347,174		(2,389,919)		147,905,948
Equity securities		13,940,811		39,700		(96,254)		13,884,257
Total	$	156,889,504	$	7,386,874	$	(2,486,173)	$	161,790,205
Investment in unconsolidated affiliate	$	5,000,000	$	137,700	$	0	$	5,137,700

The fair value of investments with sustained gross unrealized losses at June 30, 2011 and December 31, 2010 are as follows:

June 30, 2011		Less than 12 months			12 months or longer			Total
		Fair value	Unrealized losses		Fair value	Unrealized losses		Fair value	Unrealized losses
Collateralized mortgage obligations	$	0	0	$	96,687	(4,235)	$	96,687	(4,235)
All other corporate bonds		26,541	(757)		1,745,754	(1,221,956)		1,772,295	(1,222,713)
Total fixed maturity	$	26,541	(757)	$	1,842,441	(1,226,191)	$	1,868,982	(1,226,948)
Equity securities	$	526,559	(22,041)	$	346,389	(56,784)	$	872,948	(78,825)

December 31, 2010		Less than 12 months			12 months or longer			Total
		Fair value	Unrealized losses		Fair value	Unrealized losses		Fair value	Unrealized losses
Collateralized mortgage obligations	$	0	0	$	104,033	(6,677)	$	104,033	(6,677)
All other corporate bonds		13,959,305	(413,862)		2,620,277	(1,969,380)		16,579,582	(2,383,242)
Total fixed maturity	$	13,959,305	(413,862)	$	2,724,310	(1,976,057)	$	16,683,615	(2,389,919)
Equity securities	$	1,082,748	(96,254)	$	0	0	$	1,082,748	(96,254)

The unrealized losses of fixed maturity investments were primarily due to financial market participants’ perception of increased risks associated with the current market environment, resulting in higher interest rates.  The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the par value of the investment.  The unrealized losses of equity investments were primarily caused by normal market fluctuations in publicly traded securities.

The Company regularly reviews its investment portfolio for factors that may indicate that a decline in fair value of an investment is other than temporary.  Based on an evaluation of the issues, including, but not limited to:  intentions to sell or ability to hold the fixed maturity and equity securities with unrealized losses for a period of time sufficient for them to recover; the length of time and amount of the unrealized loss; and the credit ratings of the issuers of the investments, the Company held ten and six investments as other-than-temporarily impaired at June 30, 2011 and December 31, 2010. Other-than-temporary impairments of $262,067 and $1,478,970 were taken in the first six months of 2011 and during the twelve months ended December 31, 2010, respectively.  The other-than-temporary impairments during 2011 were a mortgage loan impairment as a result of an appraisal valuation as well as several discounted mortgage loans and a foreclosed discounted mortgage loan which were written down to better reflect current expected market values.  The other-than-temporary impairments during 2010 were due to changes in expected future cash flows of investments in stocks as well as in bonds backed by trust preferred securities of banks.  In addition, in 2010, the Company recognized an other-than-temporary impairment in a mortgage loan as a result of its appraisal valuation.  The other-than-temporary impairments are detailed below:

June 30, 2011		Beginning Amortized Cost		OTTI Credit Loss		Ending Amortized Cost		Unrealized Loss		Carrying Value
Hafner & Shugarman Enterprise Loan 2	$	151,259	$	(51,259)	$	100,000	$	0	$	100,000
Hafner & Shugarman Enterprise Loan 3	$	395,742	$	(95,742)	$	300,000	$	0	$	300,000
Hafner & Shugarman Enterprise Loan 4	$	206,440	$	(56,440)	$	150,000	$	0	$	150,000
June 30, 2011		Beginning Amortized Cost		OTTI Credit Loss		Ending Amortized Cost		Unrealized Loss		Carrying Value
Jarvis Development	$	769,119	$	(39,119)	$	730,000	$	0	$	730,000
HJ Management Corp, Inc. Loan 1	$	2,500	$	(2,500)	$	0	$	0	$	0
HJ Management Corp, Inc. Loan 2	$	3,005	$	(3,005)	$	0	$	0	$	0
HJ Management Corp, Inc. Loan 3	$	2,949	$	(2,949)	$	0	$	0	$	0
HJ Management Corp, Inc. Loan 4	$	4,250	$	(4,250)	$	0	$	0	$	0
First Pyramid Investment Group Loan 1	$	925	$	(925)	$	0	$	0	$	0
First Pyramid Investment Group	$	17,313	$	(5,878)	$	11,435	$	0	$	11,435

December 31, 2010		Beginning Amortized Cost		OTTI Credit Loss		Ending Amortized Cost		Unrealized Loss		Carrying Value
Preferred Term Securities I	$	416,157	$	(136,935)	$	279,222	$	(206,924)	$	72,298
Preferred Term Securities II	$	2,161,808	$	(473,319)	$	1,688,489	$	(1,621,946)	$	66,543
Investors Heritage Capital Corp	$	618,348	$	(215,174)	$	403,174	$	0	$	403,174
Jarvis Development	$	858,867	$	(128,867)	$	730,000	$	0	$	730,000
SFF Royalty	$	1,934,336	$	(68,643)	$	1,865,693	$	0	$	1,865,693
Amen Properties, Inc.	$	1,628,432	$	(456,032)	$	1,172,400	$	0	$	1,172,400

The amortized cost and estimated market value of debt securities at June 30, 2011, by contractual maturity, is shown below.  Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Fixed Maturities Available for Sale June 30, 2011		Amortized Cost		Estimated Market Value
Due in one year or less	$	0	$	0
Due after one year through five years		25,515,285		26,633,118
Due after five years through ten years		31,692,837		34,017,886
Due after ten years		79,836,492		80,987,598
Collateralized mortgage obligations		5,442,639		5,504,974
Total	$	142,487,253	$	147,143,576

B. 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 include exchange-traded equities and exchange-traded equity options.  The fair value of trading securities included in assets was $28,429,912 and $37,029,550 as of June 30, 2011 and December 31, 2010, respectively.  The fair value of trading securities included in liabilities was $(13,315,284) and $(18,429,677) as of June 30, 2011 and December 31, 2010, respectively.  Trading securities’ net unrealized gains were $1,357,344 and $1,803,729 as of June 30, 2011 and December 31, 2010, respectively.  Trading securities carried as liabilities are 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.  Realized gains from trading securities were $1,725,993 and $184,546 for the six and twelve months ended June 30, 2011 and December 31, 2010, respectively. Earnings from trading securities are classified in cash flows from operating activities. Trading revenue charged to net investment income from trading securities was:

		Six Months June 30, 2011		Twelve Months December 31, 2010
Type of Instrument		Net Realized and Unrealized Gains (Losses)		Net Realized and Unrealized Gains (Losses)
Equity	$	3,083,337	$	1,988,275

C. Derivatives

As of June 30, 2011, the Company held derivative instruments in the form of exchange-traded equity options.  The Company currently does not designate derivatives as hedging instruments.  Exchange-traded equity options are combined with exchange-traded equity securities in the Company’s trading portfolio, with the primary objective of generating a fair return while reducing risk.  These derivatives are carried at fair value, with unrealized gains and losses recognized in net investment income.  The fair value of derivatives included in trading security assets and trading security liabilities as of June 30, 2011 was $3,389,161 and $(13,315,284), respectively. The fair value of derivatives included in trading security assets and trading security liabilities as of December 31, 2010 was $2,244,478 and $(17,246,957), respectively.  Realized gains (losses) due to derivatives were $925,883 and $(305,247) for the six and twelve months ended June 30, 2011 and December 31, 2010, respectively. Unrealized gains (losses) included in income and trading security assets due to derivatives were $(1,980,985) and $1,579,071 as of June 30, 2011 and December 31, 2010, respectively. Unrealized gains (losses) included in income and trading security liabilities due to derivatives were $4,221,729 and $(3,392,010) as of June 30, 2011 and December 31, 2010, respectively.

D. Mortgages

The Company held mortgage loans on real estate in the amount of $49,812,941 and $59,935,447 at June 30, 2011 and December 31, 2010, respectively.  Included in the amounts are discounted commercial mortgage loans with a carrying value of $38,150,327 and $47,523,860 at June 30, 2011 and December 31, 2010, respectively. 

During the first six months of 2011, the Company acquired $9,648,723 of discounted mortgage loans at a total cost of $5,310,953, representing an average purchase price to outstanding loan of 55.04%.  Additionally, during the first six months of 2011, the Company settled, sold, or had paid off mortgage loans totaling $17,118,063.  The Company also recorded approximately $4,834,000 in income from the discounted mortgage loan activity, including $2,423,029 in discount accruals during the first six months of 2011.  During 2010, the Company acquired $111,258,867 of discounted mortgage loans at a total cost of $36,283,278, representing an average purchase price to outstanding loan of 32.6%.  Additionally, during 2010, the Company settled, sold or had paid off discounted mortgage loans totaling $23,607,100.  During 2010, the Company recorded approximately $12,898,000 in income from the discounted mortgage loan activity, including $7,645,258 in discount accruals.  The Company is currently projecting a very positive return from on-going mortgage loan payments from the discounted commercial mortgage loan portfolio.

While management believes the discounted loans will continue to have favorable earnings and outcomes as they are worked through, there can be no assurance this will remain true in future periods.  Changes in the current economy such as an even greater downturn than recently experienced 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.  As such, management has taken a conservative approach with these investments and has classified all discounted mortgage loans held as non-accrual.  In such status, the Company is not recording any accrued interest income nor is it recording any accrual of discount on the loans held.  Discount accruals reported during 2010 and 2011 were the result of the loan basis already being fully paid.

On the remainder of the mortgage loan portfolio, 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.

A mortgage loan reserve is established and adjusted based on management’s quarterly analysis of the portfolio and any deterioration in value of the underlying property which would reduce the net realizable value of the property below its current carrying value.  The Company acquired the discounted mortgage loans at below fair value, therefore no reserve for delinquent loans is deemed necessary.  The loan portfolio since purchase is performing very well.  Those loans not currently paying are being vigorously worked by management.  The current discounted commercial mortgage loan portfolio has an average price of 34.5% of face value and management has determined that this deep discount provides a financial cushion or built in allowance for any of the loans that are not currently performing within the portfolio of loans purchased.  The mortgage loan reserve was $0 at June 30, 2011 and December 31, 2010.

As of June 30, 2011, the Company’s discounted mortgage loan portfolio contained 115 loans with a carrying value of $38,150,327.  The loans’ payment performance since inception is shown as follows:

Payment Frequency	Number of Discounted Loans		Carrying Value
No payments	35	$	9,129,773
One-time payment received	15		3,488,814
Irregular payments received	28		15,092,373
Periodic payments received	37		10,439,367
Total	115	$	38,150,327

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

Category		June 30, 2011		December 31, 2010
In good standing	$	7,780,490	$	9,665,059
Overdue interest over 90 days		9,479,798		16,192,815
Restructured		9,547,643		4,306,800
In process of foreclosure		11,342,396		17,359,186
Total discounted mortgage loans	$	38,150,327	$	47,523,860
Total foreclosed discounted mortgage loans	$	24,204,102	$	8,939,548

At June 30, 2011, the Company has 44 discounted mortgage loans totaling $11,342,396 in the process of foreclosure and 21 discounted mortgage loans totaling $9,547,643 under a repayment plan or restructuring.  At December 31, 2010, the Company had 26 discounted mortgage loans totaling $17,359,186 in the process of foreclosure and 19 discounted mortgage loans totaling $4,306,800 under a repayment plan or restructuring.

During the first six months of 2011, the Company foreclosed on seven discounted mortgage loans with a total carrying value of $12,617,310.  Five foreclosed loans were transferred to real estate and two foreclosed loans are now UG’s majority-owned subsidiaries, Wingate of St. Johns Holding, LLC and Northwest Florida of Okaloosa Holding, LLC.  During 2010, the Company foreclosed on 20 discounted mortgage loans with a total carrying value of $8,939,548.  Of these foreclosures, 17 loans totaling $8,411,458 were transferred to real estate while one loan is now UG’s wholly owned subsidiary, Sand Lake, LLC.  Subsequent to the foreclosures, two foreclosed loans were sold with the Company realizing a gain of $51,949 upon the sale during 2010.

During the first six months of 2011, the Company recognized an other-than-temporary impairment of $39,119 on one of its mortgage loans as a result of a recent appraisal.  In addition, upon further evaluation of several discounted mortgage loans and one foreclosed discounted mortgage loan, the Company’s basis in these investments were written down slightly to better reflect current expected market values.

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COMPREHENSIVE INCOME

6 Months Ended

Jun. 30, 2011

COMPREHENSIVE INCOME [Abstract]

COMPREHENSIVE INCOME

Six Months Ended June 30, 2011		Before Tax Amount		Tax (Expense) or Benefit		Net of Tax Amount
Unrealized holding gains during period	$	2,901,320	$	(1,015,462)	$	1,885,858
Less: reclassification adjustment for gains (losses) realized in net income		(2,552,986)		893,545		(1,659,441)
Other comprehensive income (loss)	$	348,334	$	(121,917)	$	226,417

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FAIR VALUE MEASUREMENTS

6 Months Ended

Jun. 30, 2011

FAIR VALUE MEASUREMENTS [Abstract]

FAIR VALUE MEASUREMENTS

Effective January 1, 2008, the Company adopted ASC 820, Fair Value Measurements and Disclosures, which requires enhanced disclosures of assets and liabilities carried at fair value.  ASC 820 established a hierarchical disclosure framework based on the priority of the inputs to the respective valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). An asset or liability’s classification within the fair value hierarchy is based on the lowest level of significant input to its valuation.  ASC 820 defines the input levels as follows:

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities.  U.S. treasuries are in Level 1 and valuation is based on unadjusted quoted prices for identical assets in active markets that the Company can access.  Equity securities and options that are actively traded and exchange listed in the U.S. are also included in Level 1.  Equity security valuation is based on unadjusted quoted prices for identical assets in active markets that the Company can access.

Level 2 - Quoted prices in markets that are not active or inputs that are observable either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities other than quoted prices in Level 1; quoted prices in markets that are not active; or other inputs that are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.  Level 2 assets consist of fixed income investments valued based on quoted prices for identical or similar assets in markets that are not active and investments carried as equity securities that do not have an actively traded market that are valued based on their audited GAAP book value.

Level 3 - 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 reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability. Level 3 assets and liabilities include financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.  The Company does not have any Level 3 financial assets or liabilities.

The following table presents the level within the hierarchy at which the Company’s financial assets and financial liabilities are measured on a recurring basis as of June 30, 2011.

		Level 1		Level 2		Level 3		Total
Assets
Fixed Maturities, available for sale	$	81,244,270	$	65,899,306	$	0	$	147,143,576
Equity Securities, available for sale		0		16,934,688		0		16,934,688
Trading Securities		28,429,912		0		0		28,429,912
Total	$	109,674,182	$	82,833,994	$	0	$	192,508,176
Liabilities
Trading Securities	$	13,315,284	$	0	$	0	$	13,315,284

The financial statements include various estimated fair value information at June 30, 2011 and December 31, 2010, as required by ASC 820.  Such information, which pertains to the Company's financial instruments, is based on the requirements set forth in that Statement and does not purport to represent the aggregate net fair value of the Company.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments required to be valued by ASC 820 for which it is practicable to estimate that value:

(a)  Cash and cash equivalents

The carrying amount in the financial statements approximates fair value because of the relatively short period of time between the origination of the instruments and their expected realization.

(b)  Fixed maturities and investments available for sale

The Company utilized a pricing service to estimate fair value measurements for its fixed maturities and public common and preferred stocks.  The pricing service utilizes market quotations for securities that have quoted market prices in active markets.  Since fixed maturities other than U.S. Treasury securities generally do not trade on a daily basis, the pricing service prepares estimates of fair value measurements using relevant market data, benchmark curves, sector groupings and matrix pricing.  As the fair value estimates of most fixed maturity investments are based on observable market information rather than market quotes, the estimates of fair value other than U.S. Treasury securities are included in Level 2 of the hierarchy.  U.S. Treasury securities are included in the amount disclosed in Level 1 as the estimates are based on unadjusted prices.  The Company’s Level 2 investments include obligations of U.S. government agencies, municipal bonds, corporate debt securities and other mortgage backed securities.

(c)  Trading securities

Securities designated as trading securities are reported at fair value using market quotes, with gains or losses resulting from changes in fair value recognized in earnings.  Trading securities include exchange-traded equities and exchange-traded equity long and short options.

(d)  Mortgage loans on real estate

The fair values of mortgage loans are estimated using discounted cash flow analyses and interest rates being offered for similar loans to borrowers with similar credit ratings.

(e)  Discounted mortgage loans

The Company has been purchasing non-performing loans at a deep discount through an auction process led by the federal government.  In general, the discounted loans are non-performing and there is a significant amount of uncertainty surrounding the timing and amount of cash flows to be received by the Company.  Accordingly, the Company records its investment in the discounted loans at its original purchase price.  Management has determined the fair value to be too difficult to calculate but believes it approximates the carrying value of these investments.  Management works the loans with the borrower to reach a settlement on the loan or they foreclose on the underlying collateral which is primarily commercial real estate.  For cash payments received during the work out process, the Company records these payments to interest income on a cash basis.  For loan settlements reached, the Company records the amount in excess of the carrying amount of the loan as a discount accretion to investment income at the closing date.  Management reviews the discount loan portfolio regularly for impairment.  If an impairment is identified (after consideration of the underlying collateral), the Company records an impairment to earnings in the period the information becomes known.

(f)  Policy loans

Policy loans are carried at the aggregate unpaid principal balances in the consolidated balance sheets which approximates 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.

(g)  Short-term investments

Quoted market prices, if available, are used to determine the fair value.  If quoted market prices are not available, management estimates the fair value based on the quoted market price of a financial instrument with similar characteristics.

(h)  Notes payable

For borrowings subject to floating rates of interest, carrying value is a reasonable estimate of fair value.  For fixed rate borrowings fair value is determined based on the borrowing rates currently available to the Company for loans with similar terms and average maturities.

The estimated fair values of the Company's financial instruments required to be valued by ASC 820 are as follows:

		June 30, 2011				December 31, 2010
Assets		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Fixed maturities available for sale	$	147,143,576	$	147,143,576	$	147,905,948	$	147,905,948
Equity securities		11,745,930		11,745,930		13,884,257		13,884,257
Trading securities		28,429,912		28,429,912		37,029,550		37,029,550
Securities of affiliate		5,188,758		5,188,758		5,137,700		5,137,700
Mortgage loans on real estate		11,662,614		11,723,700		12,411,587		12,524,140
Discounted mortgage loans		38,150,327		39,105,560		47,523,860		49,294,797
Policy loans		13,913,044		13,913,044		13,976,019		13,976,019
Liabilities
Notes payable		13,303,065		13,152,089		10,372,239		10,136,433
Trading securities		13,315,284		13,315,284		18,429,677		18,429,677

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CONCENTRATION OF CREDIT RISK

6 Months Ended

Jun. 30, 2011

CONCENTRATION OF CREDIT RISK [Abstract]

CONCENTRATION 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.

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Statement of Cash Flows (USD $)	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Cash flows from operating activities:
Net income attributable to common shares	$ 4,615,901	$ 1,520,491
Amortization (accretion) of investments	(2,427,818)	60,721
Realized investment (gains) losses, net	(1,659,441)	261,714
Unrealized trading gains included in income	(1,357,344)	(767,264)
Amortization of deferred policy acquisition costs	34,346	52,284
Amortization of cost of insurance acquired	615,508	662,366
Depreciation	690,710	643,938
Net income attributable to noncontrolling interest	564,265	252,556
Charges for mortality and administration of universal life and annuity products	(3,724,854)	(3,902,722)
Interest credited to account balances	2,679,543	2,727,166
Change in accrued investment income	144,647	176,722
Change in reinsurance receivables	1,547,249	1,287,748
Change in policy liabilities and accruals	(2,357,610)	(1,946,967)
Change in income taxes receivable/payable	(949,163)	(85,428)
Change in other assets and liabilities, net	4,129,877	(7,476,934)
Net cash used in operating activities	2,545,816	(6,533,609)
Cash flows from investing activities:
Fixed maturities available for sale	126,519,335	12,908,346
Equity securities available for sale	2,891,101	428,309
Trading securities	79,855,048	102,003,272
Mortgage loans	749,819	9,078,973
Discounted mortgage loans	7,508,210	8,879,953
Real estate	1,185,911	921,964
Policy loans	1,710,893	1,614,938
Short-term investments	0	700,000
Total proceeds from investments sold and matured	220,420,317	136,535,755
Cost of investments acquired:
Fixed maturities available for sale	(123,967,122)	(16,861,804)
Equity securities available for sale	(717,600)	(1,014,635)
Trading securities	(77,390,562)	(113,930,370)
Mortgage loans	(846)	(1,853,266)
Discounted mortgage loans	(8,585,147)	(21,485,112)
Real estate	(10,625,161)	(799,048)
Policy loans	(1,647,918)	(1,416,804)
Total cost of investments acquired	(222,934,356)	(157,361,039)
Purchase of property and equipment	204,475	72,293
Net cash provided by (used in) investing activities	(2,718,514)	(20,897,577)
Cash flows from financing activities:
Policyholder contract deposits	3,206,514	3,463,268
Policyholder contract withdrawals	(2,581,770)	(3,196,170)
Proceeds from notes payable/line of credit	5,380,000	0
Payments of principal on notes payable/line of credit	(2,449,174)	(1,942,233)
Purchase of treasury stock	(397,433)	(53,779)
Net cash used in financing activities	3,158,137	(1,728,914)
Net increase (decrease) in cash and cash equivalents	2,985,439	(29,160,100)
Cash and cash equivalents at beginning of period	18,483,452	37,492,843
Cash and cash equivalents at end of period	$ 21,468,891	$ 8,332,743

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NOTES PAYABLE

6 Months Ended

Jun. 30, 2011

NOTES PAYABLE [Abstract]

NOTES PAYABLE

At June 30, 2011 and December 31, 2010, the Company had $13,303,065 and $10,372,239 of long-term debt outstanding, respectively.

On December 8, 2006, UTG borrowed funds from First Tennessee Bank National Association through execution of an $18,000,000 promissory note.  The note is secured by the pledge of 100% of the common stock of UG.  The promissory note carries a variable rate of interest based on the 3 month LIBOR rate plus 180 basis points.  Interest is payable quarterly.  Principal is payable annually beginning at the end of the second year in five installments of $3,600,000. The loan matures on December 7, 2012.  The Company had no borrowings and has made no principal payments during 2011 to date. At June 30, 2011 the outstanding principal balance on this debt was $6,891,411. The next required principal payment on this debt is due in December of 2011.  In July 2011, the Company repaid $1,270,000 on this note.

In addition to the above promissory note, First Tennessee Bank National Association also provided UTG, Inc. with a $5,000,000 revolving credit note.  During 2011 at the renewal of the note, Management decided to increase the note amount from $2,750,000 to $5,000,000 to provide for additional operating liquidity and flexibility for current operations. This note is for a one-year term and may be renewed by consent of both parties.  The credit note is to provide operating liquidity for UTG, Inc. The promissory note carries a variable rate of interest based on the 90 day LIBOR rate plus 2.75 percentage points, but at no time will the rate be less than 3.25%. The collateral held on the above note also secures this credit note.  During 2011, the Company had borrowings of $380,000 and made $440,000 in principal payments.  At June 30, 2011, the outstanding principal balance on this debt was $230,000.  In July 2011, the outstanding principal balance of $230,000 was paid in full.

On April 6, 2011, UTG was extended a credit note from First National Bank of Tennessee in the amount of $5,000,000.  This note is for a one year term and may be renewed by consent of both parties.  The promissory note carries interest at a rate of 4.0%.  During 2011, the Company had borrowings of $5,000,000 against this note.  The funds from this borrowing were used to purchase an investment.  At June 30, 2011, the outstanding principal balance on this debt was $5,000,000.

In November 2007, UG became a member of the Federal Home Loan Bank (“FHLB”).  This membership allows the Company access to additional credit up to a maximum of 50% of the total assets of UG.  To be a member of the FHLB, the Company was required to purchase shares of common stock of FHLB.  Borrowing capacity is based on 50 times each dollar of stock acquired in FHLB above the “base membership” amount.  The Company’s current LOC with the FHLB is $15,000,000.  During 2011, the Company had repayments of $2,000,000 against this LOC. At June 30, 2011 the Company had no outstanding principal balance attributable to this LOC.

In January 2007, UG became a 51% owner of the newly formed RLF Lexington Properties LLC (“Lexington”). The entity was formed to hold, for investment purposes, certain investment real estate acquired. As part of the purchase price of the real estate owned by Lexington, the seller provided financing through the issuance of five promissory notes of $1,200,000 each totaling $6,000,000. The notes bear interest at the fixed rate of 5%. The notes came due beginning on January 5, 2008, and each January 5 thereafter until 2012 when the final note is repaid.  At June 30, 2011 the outstanding principal balance was $914,505.

On February 7, 2007, HPG Acquisitions (“HPG”), a 74% owned affiliate of the Company, borrowed funds from First National Bank of Midland, through execution of a $373,862 promissory note. The note is secured by real estate owned by HPG. The note bears interest at a fixed rate of 5%. The first payment was due January 15, 2008. There will be 119 regular payments of $3,965 followed by one irregular last payment estimated at $44,125. At June 30, 2011, the outstanding principal balance on this debt was $267,149.

The consolidated scheduled principal reductions on the notes payable for the next five years are as follows:

Year		Amount
2011	$	3,857,008
2012		9,235,123
2013		31,586
2014		34,154
2015		36,935

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SHAREHOLDERS EQUITY

6 Months Ended

Jun. 30, 2011

SHAREHOLDERS EQUITY [Abstract]

SHAREHOLDERS EQUITY

A. Stock Repurchase Program

The Board of Directors of UTG has authorized the repurchase in the open market or in privately negotiated transactions of up to $5 million of UTG's common stock.  Repurchased shares are available for future issuance for general corporate purposes.  This program can be terminated at any time.  Open market purchases are made based on the last available market price and are generally limited to a maximum per share price of the most recent reported per share GAAP equity book value of the Company.  Through July 2011, UTG has spent $3,632,101 in the acquisition of 486,550 shares under this program.

B. Earnings Per Share Calculations

Earnings per share are based on the weighted average number of common shares outstanding during each period, retroactively adjusted to give effect to all stock splits, in accordance with ASC 260-10, Earnings Per Share.  At June 30, 2011 and June 30, 2010, diluted earnings per share were the same as basic earnings per share since the Company had no dilutive instruments outstanding.

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2011

COMMITMENTS AND CONTINGENCIES [Abstract]

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 financial statements, though the Company has no control over such assessments.

As part of the Texas Imperial Life Insurance Company sale, the Company remains contingently liable for certain costs pending the outcome of an ongoing race-based audit on Texas Imperial Life Insurance Company by the Texas Department of Insurance.  Under the agreement, the Company is responsible for 100% of the first $50,000 of costs, 90% of the next $50,000, 75% of the third $50,000 and 50% of the costs above $150,000.  Management has conservatively estimated the Company’s exposure and other costs at $50,000 based on information provided to date from the examination team and has established a contingent liability in its financial statements of this amount.  This contingency expires December 30, 2013.

Within the Company’s trading accounts, certain trading securities carried as liabilities represent 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.

During 2010, the Company committed to invest up to $2,000,000 in Llano Music, LLC (“Llano”), which invests in music royalties.  Llano does capital calls as funds are needed to acquire the royalty rights.  At June 30, 2011, the Company has $1,702,000 committed that has not been requested by Llano.

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Statement of Shareholders' Equity (USD $)	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Noncontrolling Interest [Member]	Comprehensive Income [Member]
Balance, beginning of year at Dec. 31, 2010	$ 65,127,757	$ 3,848	$ 41,432,636	$ 6,335,072	$ 3,679,684	$ 13,676,517	$ 0
Issued during year	0	0	0	0	0	0	0
Treasury shares acquired and retired	(397,433)	(38)	(397,395)	0	0	0	0
Net income attributable to common shareholders	4,615,901
Unrealized holding income (loss) on securities net of noncontrolling and reclassification adjustment and taxes	226,417	0	0	0	226,417	0	226,417
Contributions	0	0	0	0	0	0	0
Distributions	0	0	0	0	0	0	0
Gain attributable to noncontrolling interest	2,244,541	0	0	0	0	2,244,541	0
Balance, end of period at Jun. 30, 2011	$ 71,817,183	$ 3,810	$ 41,035,241	$ 10,950,973	$ 3,906,101	$ 15,921,058	$ 4,842,318

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BASIS OF PRESENTATION

6 Months Ended

Jun. 30, 2011

BASIS OF PRESENTATION [Abstract]

BASIS OF PRESENTATION

The accompanying consolidated financial statements have been prepared by UTG, Inc. (“UTG”) and its consolidated subsidiaries (“Company”) pursuant to the rules and regulations of the Securities and Exchange Commission.  Although the Company believes the disclosures are adequate to make the information presented not be misleading, it is suggested that these consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto presented in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2010.

The information furnished reflects, in the opinion of the Company, all adjustments (which include only normal and recurring accruals) necessary for a fair presentation of the results of operations for the periods presented.  Operating results for interim periods are not necessarily indicative of operating results to be expected for the year or of the Company’s future financial condition.

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 Chief Executive Officer and Chairman of the Board of Directors of UTG and is currently UTG’s largest shareholder through his ownership control of FSF, FSBI and affiliates.  At June 30, 2011, Mr. Correll owns or controls directly and indirectly approximately 60.6% of UTG’s outstanding stock.

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NEW ACCOUNTING STANDARDS

6 Months Ended

Jun. 30, 2011

NEW ACCOUNTING STANDARDS [Abstract]

NEW ACCOUNTING STANDARDS

In June 2011, Accounting Standards Board (“FASB”) issued the Accounting Standards Update (“ASU”) No. 2011-05 Comprehensive Income (Topic 220) Presentation of Comprehensive Income. Under the amendments to Topic 220, Comprehensive Income, in this Update, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. In a single continuous statement, the entity is required to present the components of net income and total net income, the components of other comprehensive income and a total for other comprehensive income, along with the total of comprehensive income in that statement. In the two-statement approach, an entity is required to present components of net income and total net income in the statement of net income. The statement of other comprehensive income should immediately follow the statement of net income and include the components of other comprehensive income and a total for other comprehensive income, along with a total for comprehensive income. Regardless of whether an entity chooses to present comprehensive income in a single continuous statement or in two separate but consecutive statements, the entity is required to present on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statement(s) where the components of net income and the components of other comprehensive income are presented. The amendments in this Update should be applied retrospectively. The amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The Company does not expect the adoption of ASU 2011-05 to have a material impact on its consolidated financial statements.

In May 2011, Accounting Standards Board (“FASB”) issued the Accounting Standards Update (“ASU”) No. 2011-04 Fair Value Measurement (Topic 820) Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The amendments in this Update result in common fair value measurement and disclosure requirements in U.S. GAAP and IFRSs. Consequently, the amendments change the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. For many of the requirements, the Board does not intend for the amendments in this Update to result in a change in the application of the requirements in Topic 820. Some of the amendments clarify the Board’s intent about the application of existing fair value measurement requirements. Other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The amendments in this Update are effective prospectively during interim and annual periods beginning after December 15, 2011. The Company does not expect the adoption of ASU 2011-04 to have a material impact on its consolidated financial statements.

In April 2011, the FASB issued the ASU No. 2011-03 Transfers and Servicing (Topic 860) Reconsideration of Effective Control for Repurchase Agreements. The amendments in this Update removes from the assessment of effective control the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee, and the collateral maintenance implementation guidance related to that criterion. Other criteria applicable to the assessment of effective control are not change by the amendments in this Update. The guidance in this Update is effective for the first interim or annual period beginning on or after December 15, 2011. The Company does not expect the adoption of ASU 2011-03 to have a material impact on its consolidated financial statements.

In April 2011, the FASB issued the Accounting Standards Update ASU No. 2011-02 Receivables (Topic 310) A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring.  The amendments in this Update give additional guidance or clarification to help creditors in determining whether a creditor has granted a concession and whether a debtor is experiencing financial difficulties for purposes of determining whether a restructuring constitutes a troubled debt restructuring.  The Company does not expect the adoption of ASU 2011-02 to have a material impact on its consolidated financial statements.

In January 2011, the FASB issued the ASU No. 2011-01 Receivables (Topic 310) Deferral of the Effective Date of Disclosures about Troubled Debt Restructurings in Update No 2010-10. The amendments in this Update temporarily delay the effective date of the disclosures about troubled debt restructurings in Update 2010-20 for public entities. The delay is intended to allow the Board time to complete its deliberations on what constitutes a troubled debt restructuring. The effective date of the new disclosures about troubled debt restructurings for public entities and the guidance for determining what constitutes a troubled debt restructuring will then be coordinated. Currently, that guidance is anticipated to be effective for interim and annual periods ending after June 15, 2011. The Company does not expect the adoption of ASU 2011-01 to have a material impact on its consolidated financial statements.

In October 2010, the FASB issued the ASU No. 2010-26 Consolidations (Topic 944) Financial Services-Insurance. The amendments in this Update specify that the following costs incurred in the acquisition of new and renewal contracts should be capitalized in accordance with the amendments in this Update: 1. Incremental direct costs of contract acquisition. Incremental direct costs are those costs that result directly from and are essential to the contract transaction(s) and would not have been incurred by the insurance entity had the contract transaction(s) not occurred. 2. Certain costs related directly to Underwriting, policy issuance and processing, medical and inspection, and sales force contract selling performed by the insurer for the contract. The costs related directly to those activities include only the portion of an employee’s total compensation (excluding any compensation that is capitalized as incremental direct costs of contract acquisition) and payroll-related fringe benefits related directly to time spent performing those activities for actual acquired contracts and other costs related directly to those activities that would not have been incurred if the contract had not been acquired. All other acquisition-related costs—including costs incurred by the insurer for soliciting potential customers, market research, training, administration, unsuccessful acquisition or renewal efforts, and product development—should be charged to expense as incurred. Administrative costs, rent, depreciation, occupancy, equipment, and all other general overhead costs are considered indirect costs and should be charged to expense as incurred. If the initial application of the amendments in this Update results in the capitalization of acquisition costs that had not been capitalized previously by an entity, the entity may elect not to capitalize those types of costs. The amendments in this Update do not affect the guidance in paragraphs 944-30-25-4 through 25-5, which prohibits the capitalization of certain costs incurred in obtaining universal life-type contracts. The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2011. The amendments in this update should be applied prospectively upon adoption. The Company does not expect the adoption of ASU 2010-26 to have a material impact on its consolidated financial statements.

In July 2010, the FASB issued the ASU No. 2010-20 Consolidations (Topic 310) Receivables. The main objective in developing this Update is to provide financial statement users with greater transparency about an entity’s allowance for credit losses and the credit quality of its financing receivables. This Update is intended to provide additional information to assist financial statement users in assessing an entity’s credit risk exposures and evaluating the adequacy of its allowance for credit losses. Currently, a high threshold for recognition of credit impairments impedes timely recognition of losses. ASU 2010-20 is effective for annual reporting periods ending on or after December 15, 2011. The Company does not expect the adoption of ASU No 2010-20 to have a material impact on its consolidated financial statements.

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Balance Sheet (USD $)	Jun. 30, 2011	Dec. 31, 2010
Investments available for sale:
Fixed maturities, at market (amortized cost $142,487,253 and $142,948,693)	$ 147,143,576	$ 147,905,948
Equity securities, at market (cost $11,641,116 and $13,940,811)	11,745,930	13,884,257
Trading securities, at market (cost $28,447,996 and $34,183,252)	28,429,912	37,029,550
Mortgage loans on real estate at amortized cost	11,662,614	12,411,587
Discounted mortgage loans on real estate at cost	38,150,327	47,523,860
Investment real estate, at cost, net of accumulated depreciation	76,691,527	53,148,755
Policy loans	13,913,044	13,976,019
Total investments	327,736,930	325,879,976
Cash and cash equivalents	21,468,891	18,483,452
Investment in unconsolidated affiliate, at fair value (cost $5,000,000 and $5,000,000)	5,188,758	5,137,700
Accrued investment income	1,464,778	1,609,425
Future policy benefits	65,556,229	67,033,539
Policy claims and other benefits	4,377,001	4,446,940
Cost of insurance acquired	13,461,773	14,077,281
Deferred policy acquisition costs	522,612	556,958
Property and equipment, net of accumulated depreciation	1,603,513	1,478,935
Income tax receivable	300,040	0
Other assets	2,708,054	2,883,893
Total assets	444,388,579	441,588,099
Liabilities:
Future policyholder benefits	304,738,647	307,509,531
Policy claims and benefits payable	3,783,137	3,588,914
Other policyholder funds	726,472	810,062
Dividend and endowment accumulations	14,073,020	14,190,946
Income taxes payable	0	209,888
Deferred income taxes	12,942,043	13,381,278
Notes payable	13,303,065	10,372,239
Trading securities, at market (proceeds $16,494,442 and $17,387,108)	13,315,284	18,429,677
Other liabilities	9,689,728	7,967,807
Total liabilities	372,571,396	376,460,342
Common stock - no par value, stated value $.001 per share, authorized 7,000,000 shares - 3,810,825 and 3,848,079 shares issued and outstanding after deducting treasury shares of 484,183 and 446,929	3,810	3,848
Additional paid-in capital	41,035,241	41,432,636
Retained earnings	10,950,973	6,335,072
Accumulated other comprehensive income	3,906,101	3,679,684
Total UTG shareholders' equity	55,896,125	51,451,240
Noncontrolling interest	15,921,058	13,676,517
Total shareholders' equity	71,817,183	65,127,757
Total liabilities and shareholders' equity	$ 444,388,579	$ 441,588,099