[X]
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
|
|
OF 1934
|
[ ]
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
|
|
OF 1934
|
|
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)
|
|
|
|
|
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]
|
PART 1. FINANCIAL INFORMATION
|
3
|
ITEM 1. FINANCIAL STATEMENTS
|
3
|
Condensed Consolidated Balance Sheets
|
3
|
Condensed Consolidated Statements of Operations
|
4
|
Condensed Consolidated Statements of Comprehensive Income
|
5
|
Condensed Consolidated Statements of Cash Flows
|
6
|
Notes to Condensed Consolidated Financial Statements
|
7
|
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
|
RESULTS OF OPERATIONS
|
18
|
ITEM 4. CONTROLS AND PROCEDURES
|
23
|
PART II. OTHER INFORMATION
|
24
|
ITEM 1. LEGAL PROCEEDINGS
|
24
|
ITEM 1A. RISK FACTORS
|
24
|
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
24
|
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
|
24
|
ITEM 4. MINE SAFETY DISCLOSURES
|
24
|
ITEM 5. OTHER INFORMATION
|
24
|
ITEM 6. EXHIBITS
|
24
|
SIGNATURES
|
25
|
EXHIBIT INDEX
|
26
|
PART 1. FINANCIAL INFORMATION
|
|||||
Item 1. Financial Statements
|
|||||
|
|
|
|
|
|
UTG, Inc.
|
|||||
AND SUBSIDIARIES
|
|||||
|
|
|
|
|
|
Condensed Consolidated Balance Sheets (Unaudited)
|
|||||
|
|
|
|
|
|
ASSETS
|
|||||
|
|
|
|
|
|
|
|
|
September 30,
|
|
December 31,
|
|
|
|
2012
|
|
2011*
|
Investments:
|
|
|
|
|
|
Investments available for sale:
|
|
|
|
|
|
Fixed maturities, at fair value (amortized cost $181,670,688 and $107,514,400)
|
|
$
|
195,972,913
|
$
|
124,583,177
|
Equity securities, at fair value (cost $28,191,223 and $16,200,043)
|
|
|
29,015,941
|
|
17,299,628
|
Trading securities, at fair value (cost $10,243,381 and $9,147,237)
|
|
|
13,914,699
|
|
8,519,064
|
Mortgage loans on real estate at amortized cost
|
|
|
22,652,297
|
|
9,272,919
|
Discounted mortgage loans on real estate at cost
|
|
|
26,672,841
|
|
27,467,920
|
Investment real estate
|
|
|
63,485,418
|
|
62,701,375
|
Policy loans
|
|
|
12,737,798
|
|
13,312,229
|
Total investments
|
|
|
364,451,907
|
|
263,156,312
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
21,195,290
|
|
82,925,675
|
Accrued investment income
|
|
|
2,111,548
|
|
1,136,741
|
Reinsurance receivables:
|
|
|
|
|
|
Future policy benefits
|
|
|
29,340,375
|
|
64,693,384
|
Policy claims and other benefits
|
|
|
4,630,042
|
|
4,029,412
|
Cost of insurance acquired
|
|
|
11,987,140
|
|
12,846,266
|
Deferred policy acquisition costs
|
|
|
441,730
|
|
488,266
|
Property and equipment, net of accumulated depreciation
|
|
|
1,386,754
|
|
1,527,285
|
Income tax receivable
|
|
|
0
|
|
281,636
|
Other assets
|
|
|
2,149,259
|
|
2,636,280
|
Total assets
|
|
$
|
437,694,045
|
$
|
433,721,257
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|||||
Liabilities:
|
|
|
|
|
|
Policy liabilities and accruals:
|
|
|
|
|
|
Future policyholder benefits
|
|
$
|
295,350,496
|
$
|
301,393,689
|
Policy claims and benefits payable
|
|
|
5,029,634
|
|
3,016,866
|
Other policyholder funds
|
|
|
521,979
|
|
636,319
|
Dividend and endowment accumulations
|
|
|
14,059,729
|
|
14,176,151
|
Income tax payable
|
|
|
2,259,832
|
|
0
|
Deferred income taxes
|
|
|
13,248,816
|
|
13,745,751
|
Notes payable
|
|
|
8,115,439
|
|
9,531,645
|
Trading securities, at fair value (proceeds $7,108,044 and $6,288,562)
|
|
|
10,223,976
|
|
5,471,475
|
Other liabilities
|
|
|
8,456,827
|
|
9,964,313
|
Total liabilities
|
|
|
357,266,728
|
|
357,936,209
|
|
|
|
|
|
|
Shareholders' equity:
|
|
|
|
|
|
Common stock - no par value, stated value $.001 per share. Authorized 7,000,000 shares - 3,793,762 and 3,854,610 shares outstanding
|
|
|
3,793
|
|
3,855
|
Additional paid-in capital
|
|
|
44,270,546
|
|
45,051,608
|
Retained earnings
|
|
|
19,448,382
|
|
12,651,687
|
Accumulated other comprehensive income
|
|
|
9,952,322
|
|
11,792,214
|
Total UTG shareholders' equity
|
|
|
73,675,043
|
|
69,499,364
|
Noncontrolling interests
|
|
|
6,752,274
|
|
6,285,684
|
Total shareholders' equity
|
|
|
80,427,317
|
|
75,785,048
|
Total liabilities and shareholders' equity
|
|
$
|
437,694,045
|
$
|
433,721,257
|
|
|
|
|
|
|
* Balance sheet audited at December 31, 2011.
|
|
|
|
|
|
UTG, Inc.
|
||||||||
AND SUBSIDIARIES
|
||||||||
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Operations (Unaudited)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
Revenue:
|
|
|
|
|
|
|
|
|
Premiums and policy fees
|
$
|
3,158,614
|
$
|
3,367,828
|
$
|
10,155,175
|
$
|
10,769,842
|
Ceded reinsurance premiums and policy fees
|
|
(830,087)
|
|
(1,150,510)
|
|
(2,602,152)
|
|
(2,981,483)
|
Net investment income (loss)
|
|
4,611,440
|
|
(4,055,513)
|
|
13,990,695
|
|
7,811,063
|
Other income
|
|
514,850
|
|
519,190
|
|
1,594,029
|
|
1,520,894
|
Revenues before realized gains
|
|
7,454,817
|
|
(1,319,005)
|
|
23,137,747
|
|
17,120,316
|
Realized investment gains, net:
|
|
|
|
|
|
|
|
|
Other-than-temporary impairments
|
|
0
|
|
0
|
|
0
|
|
(262,067)
|
Other realized investment gains, net
|
|
255,555
|
|
562,447
|
|
11,238,250
|
|
2,483,955
|
Total realized investment gains, net
|
|
255,555
|
|
562,447
|
|
11,238,250
|
|
2,221,888
|
Total revenue (loss)
|
|
7,710,372
|
|
(756,558)
|
|
34,375,997
|
|
19,342,204
|
|
|
|
|
|
|
|
|
|
Benefits and other expenses:
|
|
|
|
|
|
|
|
|
Benefits, claims and settlement expenses:
|
|
|
|
|
|
|
|
|
Life
|
|
6,570,185
|
|
6,090,616
|
|
17,967,145
|
|
15,866,565
|
Ceded Reinsurance benefits and claims
|
|
(1,864,743)
|
|
(1,398,015)
|
|
(3,893,151)
|
|
(2,908,849)
|
Annuity
|
|
298,940
|
|
282,967
|
|
777,859
|
|
806,508
|
Dividends to policyholders
|
|
107,293
|
|
109,097
|
|
373,563
|
|
400,882
|
Commissions and amortization of deferred policy acquisition costs
|
|
(140,218)
|
|
(246,563)
|
|
(424,702)
|
|
(678,392)
|
Amortization of cost of insurance acquired
|
|
286,376
|
|
307,753
|
|
859,126
|
|
923,261
|
Operating expenses
|
|
1,767,229
|
|
1,635,300
|
|
7,053,358
|
|
5,766,102
|
Interest expense
|
|
67,568
|
|
99,300
|
|
222,266
|
|
239,263
|
Total benefits and other expenses
|
|
7,092,630
|
|
6,880,455
|
|
22,935,464
|
|
20,415,340
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
617,742
|
|
(7,637,013)
|
|
11,440,533
|
|
(1,073,136)
|
Income tax (expense) benefit
|
|
(288,007)
|
|
2,345,119
|
|
(4,017,248)
|
|
961,408
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
329,735
|
|
(5,291,894)
|
|
7,423,285
|
|
(111,728)
|
|
|
|
|
|
|
|
|
|
Net (income) loss attributable to noncontrolling interests
|
|
(200,212)
|
|
604,734
|
|
(626,590)
|
|
40,469
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to common shareholders'
|
$
|
129,523
|
$
|
(4,687,160)
|
$
|
6,796,695
|
$
|
(71,259)
|
|
|
|
|
|
|
|
|
|
Amounts attributable to common shareholders'
|
|
|
|
|
|
|
|
|
Basic income per share
|
$
|
0.03
|
$
|
(1.23)
|
$
|
1.78
|
$
|
(0.02)
|
|
|
|
|
|
|
|
|
|
Diluted income per share
|
$
|
0.03
|
$
|
(1.23)
|
$
|
1.78
|
$
|
(0.02)
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares outstanding
|
|
3,797,779
|
|
3,807,430
|
|
3,816,354
|
|
3,815,602
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares outstanding
|
|
3,797,779
|
|
3,807,430
|
|
3,816,354
|
|
3,815,602
|
UTG, Inc.
|
|||||||||
AND SUBSIDIARIES
|
|||||||||
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||
|
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (loss)
|
$
|
329,735
|
$
|
(5,291,894)
|
$
|
7,423,285
|
$
|
(111,728)
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized holding gains arising during period
|
|
4,740,177
|
|
12,773,424
|
|
4,091,719
|
|
14,359,172
|
|
Less reclassification adjustment for gains included in net income
|
|
(121,191)
|
|
(47,624)
|
|
(5,931,611)
|
|
(1,406,955)
|
|
Subtotal: Other comprehensive income (loss), net of tax
|
|
4,618,986
|
|
12,725,800
|
|
(1,839,892)
|
|
12,952,217
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
|
|
4,948,721
|
|
7,433,906
|
|
5,583,393
|
|
12,840,489
|
|
|
|
|
|
|
|
|
|
|
|
Less comprehensive (income) loss attributable to noncontrolling interests
|
|
(200,212)
|
|
604,734
|
|
(626,590)
|
|
40,469
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income attributable to UTG, Inc.
|
$
|
4,748,509
|
$
|
8,038,640
|
$
|
4,956,803
|
$
|
12,880,958
|
UTG, Inc.
|
|||||
AND SUBSIDIARIES
|
|||||
|
|
|
|
|
|
Condensed Consolidated Statements of Cash Flows (Unaudited)
|
|||||
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
||
|
|
|
September 30,
|
|
September 30,
|
|
|
|
2012
|
|
2011
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
Net income (loss) attributable to common shareholders
|
|
$
|
6,796,695
|
$
|
(71,259)
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
|
|
Amortization (accretion) of investments
|
|
|
2,218,898
|
|
(3,195,015)
|
Realized investment gains, net
|
|
|
(11,238,250)
|
|
(2,221,888)
|
Unrealized trading gains included in income
|
|
|
281,685
|
|
1,412,630
|
Amortization of deferred policy acquisition costs
|
|
|
46,536
|
|
51,519
|
Amortization of cost of insurance acquired
|
|
|
859,126
|
|
923,261
|
Depreciation
|
|
|
959,836
|
|
1,048,126
|
Net income (loss) attributable to noncontrolling interest
|
|
|
626,590
|
|
(40,469)
|
Charges for mortality and administration of universal life and annuity products
|
|
|
(5,281,297)
|
|
(5,547,734)
|
Interest credited to account balances
|
|
|
3,725,149
|
|
3,915,979
|
Change in accrued investment income (loss)
|
|
|
(974,807)
|
|
371,310
|
Change in reinsurance receivables
|
|
|
1,507,932
|
|
1,748,548
|
Change in policy liabilities and accruals
|
|
|
(2,422,859)
|
|
(3,856,527)
|
Change in income taxes receivable (payable)
|
|
|
2,259,832
|
|
(3,260,867)
|
Change in other assets and liabilities, net
|
|
|
(935,954)
|
|
2,358,592
|
Net cash used in operating activities
|
|
|
(1,570,888)
|
|
(6,363,794)
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
Proceeds from investments sold and matured:
|
|
|
|
|
|
Fixed maturities available for sale
|
|
|
84,519,249
|
|
130,999,311
|
Equity securities available for sale
|
|
|
1,287,475
|
|
3,231,410
|
Trading securities
|
|
|
15,344,038
|
|
14,209,807
|
Mortgage loans
|
|
|
4,134,379
|
|
2,984,255
|
Discounted mortgage loans
|
|
|
7,195,550
|
|
10,288,755
|
Real estate
|
|
|
9,499,500
|
|
9,921,610
|
Policy loans
|
|
|
2,782,021
|
|
3,478,803
|
Total proceeds from investments sold and matured
|
|
|
124,762,212
|
|
175,113,951
|
Cost of investments acquired:
|
|
|
|
|
|
Fixed maturities available for sale
|
|
|
(122,811,049)
|
|
(125,182,803)
|
Equity securities available for sale
|
|
|
(11,938,273)
|
|
(781,307)
|
Trading securities
|
|
|
(12,876,567)
|
|
(4,641,579)
|
Mortgage loans
|
|
|
(17,513,757)
|
|
(846)
|
Discounted mortgage loans
|
|
|
(6,146,295)
|
|
(10,378,446)
|
Real estate
|
|
|
(9,299,718)
|
|
(12,431,325)
|
Policy loans
|
|
|
(4,194,686)
|
|
(2,862,585)
|
Total cost of investments acquired
|
|
|
(184,780,345)
|
|
(156,278,891)
|
Sale/Purchase of property and equipment
|
|
|
17,440
|
|
(204,475)
|
Net cash provided by (used in) investing activities
|
|
|
(60,000,693)
|
|
18,630,585
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
Policyholder contract deposits
|
|
|
4,382,637
|
|
4,743,069
|
Policyholder contract withdrawals
|
|
|
(4,664,817)
|
|
(4,690,873)
|
Proceeds from notes payable/line of credit
|
|
|
1,411,000
|
|
5,613,000
|
Payments of principal on notes payable/line of credit
|
|
|
(2,827,206)
|
|
(3,958,284)
|
Purchase of treasury stock
|
|
|
(781,124)
|
|
(443,282)
|
Distributions to minority interests of consolidated subsidiaries
|
|
|
(160,000)
|
|
(388,275)
|
Cash received in reinsurance recapture
|
|
|
2,480,706
|
|
0
|
Net cash provided by (used in) financing activities
|
|
|
(158,804)
|
|
875,355
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
(61,730,385)
|
|
13,142,146
|
Cash and cash equivalents at beginning of period
|
|
|
82,925,675
|
|
18,483,452
|
Cash and cash equivalents at end of period
|
|
$
|
21,195,290
|
$
|
31,625,598
|
1.
|
BASIS OF PRESENTATION
|
2.
|
NEW ACCOUNTING STANDARDS
|
3.
|
INVESTMENTS
|
A.
|
Available for Sale Securities – Fixed Maturity and Equity Securities
|
September 30, 2012
|
|
Original or Amortized
Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Estimated
Fair
Value
|
Investments available for sale:
|
|
|
|
|
|
|
|
|
Fixed maturities
|
|
|
|
|
|
|
|
|
U.S. Government and govt. agencies and authorities
|
$
|
38,900,060
|
$
|
5,637,145
|
$
|
0
|
$
|
44,537,205
|
States, municipalities and political subdivisions
|
|
185,000
|
|
8,181
|
|
0
|
|
193,181
|
U.S. special revenue and assessments
|
|
2,162,068
|
|
177,494
|
|
(13,420)
|
|
2,326,142
|
Collateralized mortgage obligations
|
|
2,596,651
|
|
203,792
|
|
0
|
|
2,800,443
|
Public utilities
|
|
399,896
|
|
68,686
|
|
0
|
|
468,582
|
All other corporate bonds
|
|
137,427,013
|
|
10,111,709
|
|
(1,891,362)
|
|
145,647,360
|
|
|
181,670,688
|
|
16,207,007
|
|
(1,904,782)
|
|
195,972,913
|
Equity securities
|
|
28,191,223
|
|
1,144,323
|
|
(319,605)
|
|
29,015,941
|
Total
|
$
|
209,861,911
|
$
|
17,351,330
|
$
|
(2,224,387)
|
$
|
224,988,854
|
December 31, 2011
|
|
Original or Amortized
Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Estimated
Fair
Value
|
Investments available for sale:
|
|
|
|
|
|
|
|
|
Fixed maturities
|
|
|
|
|
|
|
|
|
U.S. Government and govt. agencies and authorities
|
$
|
56,794,363
|
$
|
13,805,565
|
$
|
0
|
$
|
70,599,928
|
States, municipalities and political subdivisions
|
|
235,000
|
|
6,317
|
|
0
|
|
241,317
|
Collateralized mortgage obligations
|
|
750,944
|
|
11,756
|
|
(2,973)
|
|
759,727
|
Public utilities
|
|
399,887
|
|
62,188
|
|
0
|
|
462,075
|
All other corporate bonds
|
|
49,334,206
|
|
4,901,684
|
|
(1,715,760)
|
|
52,520,130
|
|
|
107,514,400
|
|
18,787,510
|
|
(1,718,733)
|
|
124,583,177
|
Equity securities
|
|
16,200,043
|
|
1,216,286
|
|
(116,701)
|
|
17,299,628
|
Total
|
$
|
123,714,443
|
$
|
20,003,796
|
$
|
(1,835,434)
|
$
|
141,882,805
|
Fixed Maturities Available for Sale
September 30, 2012
|
|
Amortized
Cost
|
|
Estimated
Market Value
|
|
|
|
|
|
Due in one year or less
|
$
|
4,526,032
|
$
|
4,791,764
|
Due after one year through five years
|
|
26,233,409
|
|
28,447,947
|
Due after five years through ten years
|
|
118,010,160
|
|
128,112,307
|
Due after ten years
|
|
30,304,436
|
|
31,820,452
|
Collateralized mortgage obligations
|
|
2,596,651
|
|
2,800,443
|
Total
|
$
|
181,670,688
|
$
|
195,972,913
|
September 30, 2012
|
|
Less than 12 months
|
|
12 months or longer
|
|
Total
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
Fair value
|
Unrealized losses
|
|
Fair value
|
Unrealized losses
|
|
Fair value
|
Unrealized losses
|
U.S. special revenue and assessments
|
$
|
0
|
0
|
$
|
986,580
|
(13,420)
|
$
|
986,580
|
(13,420)
|
All other corporate bonds
|
|
8,501,862
|
(285,215)
|
|
345,082
|
(1,606,147)
|
|
8,846,944
|
(1,891,362)
|
Total fixed maturities
|
$
|
8,501,862
|
(285,215)
|
$
|
1,331,662
|
(1,619,567)
|
$
|
9,833,524
|
(1,904,782)
|
|
|
|
|
|
|
|
|
|
|
Equity securities
|
$
|
9,536,942
|
(208,209)
|
$
|
952,604
|
(111,396)
|
$
|
10,489,546
|
(319,605)
|
December 31, 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
|
$
|
7,008
|
(36)
|
$
|
97,868
|
(2,937)
|
$
|
104,876
|
(2,973)
|
All other corporate bonds
|
|
3,915,393
|
(17,574)
|
|
1,268,583
|
(1,698,186)
|
|
5,183,976
|
(1,715,760)
|
Total fixed maturity
|
$
|
3,922,401
|
(17,610)
|
$
|
1,366,451
|
(1,701,123)
|
$
|
5,288,852
|
(1,718,733)
|
|
|
|
|
|
|
|
|
|
|
Equity securities
|
$
|
848,032
|
(55,141)
|
$
|
292,441
|
(61,560)
|
$
|
1,140,473
|
(116,701)
|
|
Less than 12 months
|
|
12 months or longer
|
|
Total
|
As of September 30, 2012
|
|
|
|
|
|
Fixed maturities
|
3
|
|
4
|
|
7
|
Equity securities
|
10
|
|
1
|
|
11
|
As of December 31, 2011
|
|
|
|
|
|
Fixed maturities
|
5
|
|
6
|
|
11
|
Equity securities
|
2
|
|
1
|
|
3
|
|
|
Three Months Ended
|
||
|
|
September 30,
|
||
|
|
2012
|
|
2011
|
|
|
|
|
|
Other than temporary impairments:
|
|
|
|
|
Mortgage loans
|
$
|
0
|
$
|
0
|
|
|
|
|
|
|
|
Nine Months Ended
|
||
|
|
September 30,
|
||
|
|
2012
|
|
2011
|
|
|
|
|
|
Other than temporary impairments:
|
|
|
|
|
Mortgage loans
|
$
|
0
|
$
|
262,067
|
|
|
|
|
|
B.
|
Trading Securities
|
|
|
Three Months Ended
|
||
|
|
September 30,
|
||
|
|
2012
|
|
2011
|
|
|
|
|
|
Net unrealized losses
|
$
|
(448,936)
|
$
|
(2,769,974)
|
Net realized gains (losses)
|
|
1,110,965
|
|
(4,350,117)
|
Net unrealized and realized gains (losses)
|
$
|
662,029
|
$
|
(7,120,091)
|
|
|
|
|
|
|
|
Nine Months Ended
|
||
|
|
September 30,
|
||
|
|
2012
|
|
2011
|
|
|
|
|
|
Net unrealized gains (losses)
|
$
|
(281,685)
|
$
|
(1,412,630)
|
Net realized gains (losses)
|
|
3,004,278
|
|
(993,168)
|
Net unrealized and realized gains (losses)
|
$
|
2,722,593
|
$
|
(2,405,798)
|
|
|
|
|
|
C.
|
Mortgage Loans
|
4.
|
FAIR VALUE MEASUREMENTS
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Fixed Maturities, available for sale
|
$
|
26,577,895
|
$
|
169,128,926
|
$
|
266,092
|
$
|
195,972,913
|
Equity Securities, available for sale
|
|
0
|
|
8,859,293
|
|
20,156,648
|
|
29,015,941
|
Trading Securities
|
|
13,914,699
|
|
0
|
|
0
|
|
13,914,699
|
Total
|
$
|
40,492,594
|
$
|
177,988,219
|
$
|
20,422,740
|
$
|
238,903,553
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Trading Securities
|
$
|
10,223,976
|
$
|
0
|
$
|
0
|
$
|
10,223,976
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Fixed Maturities, available for sale
|
$
|
59,735,100
|
$
|
64,632,760
|
$
|
215,317
|
$
|
124,583,177
|
Equity Securities, available for sale
|
|
0
|
|
7,344,260
|
|
9,955,368
|
|
17,299,628
|
Trading Securities
|
|
8,519,064
|
|
0
|
|
0
|
|
8,519,064
|
Total
|
$
|
68,254,164
|
$
|
71,977,020
|
$
|
10,170,685
|
$
|
150,401,869
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Trading Securities
|
$
|
5,471,475
|
$
|
0
|
$
|
0
|
$
|
5,471,475
|
|
|
Fixed Maturities,
Available for Sale
|
|
Equity Securities,
Available for Sale
|
|
Total
|
Balance at December 31, 2011
|
$
|
215,317
|
$
|
9,955,368
|
$
|
10,170,685
|
Total unrealized gain or losses:
|
|
|
|
|
|
|
Included in other comprehensive income
|
|
50,775
|
|
78,995
|
|
129,770
|
Purchases
|
|
0
|
|
10,122,285
|
|
10,122,285
|
Balance at September 30, 2012
|
$
|
266,092
|
$
|
20,156,648
|
$
|
20,422,740
|
|
|
September 30, 2012
|
|
December 31, 2011
|
||||
Assets
|
|
Carrying
Amount
|
|
Estimated
Fair
Value
|
|
Carrying
Amount
|
|
Estimated
Fair
Value
|
Mortgage loans on real estate
|
$
|
22,652,297
|
$
|
26,660,697
|
$
|
9,272,919
|
$
|
9,116,148
|
Discounted mortgage loans
|
|
26,672,841
|
|
26,672,841
|
|
27,467,920
|
|
27,467,920
|
Investment real estate
|
|
63,485,418
|
|
63,485,418
|
|
62,701,375
|
|
62,701,375
|
Policy loans
|
|
12,737,798
|
|
12,737,798
|
|
13,312,229
|
|
13,312,229
|
Cash and cash equivalents
|
|
21,195,290
|
|
21,195,290
|
|
82,925,675
|
|
82,925,675
|
Liabilities
|
|
|
|
|
|
|
|
|
Notes payable
|
|
8,115,439
|
|
8,106,760
|
|
9,531,645
|
|
9,519,300
|
5.
|
NOTES PAYABLE
|
|
|
|
|
Outstanding Principal Balance
|
||
Instrument
|
Issue
Date
|
Maturity Date
|
|
September 30, 2012
|
|
December 31, 2011
|
Promissory Note:
|
|
|
|
|
|
|
UTG
|
12/8/2006
|
12/7/2012
|
$
|
2,766,971
|
$
|
3,291,411
|
HPG Acquisitions
|
2/7/2007
|
11/7/2017
|
|
218,468
|
|
240,234
|
Instrument
|
Issue Date
|
Maturity Date
|
|
Revolving Credit Limit
|
|
December 31, 2011
|
Borrowings
|
Repayments
|
|
September 30, 2012
|
Lines of Credit:
|
|
|
|
|
|
|
|
|
|
|
UTG
|
7/14/2011
|
12/7/2012
|
$
|
5,000,000
|
$
|
1,000,000
|
1,411,000
|
2,281,000
|
$
|
130,000
|
UTG Avalon
|
12/28/2011
|
1/3/2013
|
|
5,000,000
|
|
5,000,000
|
0
|
0
|
|
5,000,000
|
UG
|
12/28/2010
|
12/7/2012
|
|
15,000,000
|
|
0
|
0
|
0
|
|
0
|
|
Year
|
|
Amount
|
|
||
|
|
|
|
|
||
|
2012
|
$
|
2,919,837
|
|
||
|
2013
|
|
5,031,586
|
|
||
|
2014
|
|
34,154
|
|
||
|
2015
|
|
36,935
|
|
||
|
2016
|
|
39,941
|
|
A.
|
Stock Repurchase Program
|
B.
|
Earnings Per Share Calculations
|
7.
|
COMMITMENTS AND CONTINGENCIES
|
|
|
Total Funding
|
|
Unfunded
|
|
|
Commitment
|
|
Commitment
|
RLF III, LLC
|
$
|
4,000,000
|
$
|
398,120
|
Llano Music, LLC
|
|
2,000,000
|
|
936,000
|
Marcellus III, LLP
|
|
1,250,000
|
|
529,375
|
Dew Learning, LLC
|
|
1,000,000
|
|
857,000
|
Marcellus HBPI, LLP
|
|
1,800,000
|
|
1,485,000
|
PBEX, LLC
|
|
5,625,000
|
|
4,218,750
|
Sovereign's Capital, LP
|
|
500,000
|
|
250,000
|
8.
|
OTHER CASH FLOW DISCLOSURES
|
|
|
Three Months Ended
|
||
|
|
September 30,
|
||
|
|
2012
|
|
2011
|
|
|
|
|
|
Interest expense
|
$
|
19,896
|
$
|
146,437
|
Federal income tax
|
|
65,689
|
|
394,459
|
|
|
Nine Months Ended
|
||
|
|
September 30,
|
||
|
|
2012
|
|
2011
|
|
|
|
|
|
Interest expense
|
$
|
169,509
|
$
|
230,840
|
Federal income tax
|
|
1,408,770
|
|
2,299,459
|
|
|
Assets Received
|
|
|
|
Bonds
|
$
|
27,651,746
|
Common Stock
|
|
1,023,394
|
Cash
|
|
2,480,706
|
Total
|
$
|
31,155,846
|
9.
|
CONCENTRATION OF CREDIT RISK
|
|
1.
|
Prevailing interest rate levels, which may affect the ability of the Company to sell its products, the market value of the Company's investments and the lapse ratio of the Company's policies, notwithstanding product design features intended to enhance persistency of the Company's products.
|
|
2.
|
Changes in the federal income tax laws and regulations which may affect the relative tax advantages of the Company's products.
|
|
3.
|
Changes in the regulation of financial services, including bank sales and underwriting of insurance products, which may affect the competitive environment for the Company's products.
|
|
4.
|
Other factors affecting the performance of the Company, including, but not limited to, market conduct claims, insurance industry insolvencies, insurance regulatory initiatives and developments, stock market performance, an unfavorable outcome in pending litigation, and investment performance.
|
(a)
|
Revenues
|
(b)
|
Expenses
|
(c)
|
Net Income/Loss
|
*31.1
|
Certification of Jesse T. Correll, Chief Executive Officer and Chairman of the Board of UTG, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
*31.2
|
Certification of Theodore C. Miller, Chief Financial Officer, Senior Vice President and Corporate Secretary of UTG, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
*32.1
|
Certificate of Jesse T. Correll, Chief Executive Officer and Chairman of the Board of UTG, as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
*32.2
|
Certificate of Theodore C. Miller, Chief Financial Officer, Senior Vice President and Corporate Secretary of UTG, as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
**101.INS
|
XBRL Instance Document
|
**101.SCH
|
XBRL Taxonomy Extension Scheme Document
|
**101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
**101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
**101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
**101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
Date:
|
November 9, 2012
|
|
By
|
/s/ James P. Rousey
|
|
|
|
|
James P. Rousey
|
|
|
|
|
President and Director
|
Date:
|
November 9, 2012
|
|
By
|
/s/ Theodore C. Miller
|
|
|
|
|
Theodore C. Miller
|
|
|
|
|
Senior Vice President
|
|
|
|
|
and Chief Financial Officer
|
Exhibit Number
|
Description
|
*31.1
|
Certification of Jesse T. Correll, Chief Executive Officer and Chairman of the Board of UTG, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
*31.2
|
Certification of Theodore C. Miller, Chief Financial Officer, Senior Vice President and Corporate Secretary of UTG, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
*32.1
|
Certificate of Jesse T. Correll, Chief Executive Officer and Chairman of the Board of UTG, as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
*32.2
|
Certificate of Theodore C. Miller, Chief Financial Officer, Senior Vice President and Corporate Secretary of UTG, as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
**101.INS
|
XBRL Instance Document
|
**101.SCH
|
XBRL Taxonomy Extension Scheme Document
|
**101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
**101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
**101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
**101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
CERTIFICATIONS
|
|||||||
|
|||||||
I, Jesse T. Correll, Chairman of the Board and Chief Executive 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:
|
November 9, 2012
|
By
|
/s/ Jesse T. Correll
|
|
|
Chairman of the Board and
|
|
|
|
Chief Executive Officer
|
CERTIFICATIONS
|
|||||||
|
|||||||
I, Theodore C. Miller, Senior Vice President, Corporate Secretary 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:
|
November 9, 2012
|
By
|
/s/ Theodore C. Miller
|
|
|
Senior Vice President, Corporate Secretary and
|
|
|
|
Chief Financial Officer
|
(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:
|
November 9, 2012
|
By:
|
/s/ Jesse T. Correll
|
|
|
|
Jesse T. Correll
|
|
|
|
Chairman of the Board and
|
|
|
|
Chief Executive Officer
|
(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:
|
November 9, 2012
|
By:
|
/s/ Theodore C. Miller
|
|
|
|
Theodore C. Miller
|
|
|
|
Senior Vice President, Corporate
|
|
|
|
Secretary and Chief Financial Officer
|
^\)F5UCM
M#L@,C#EK.X/C9*8'VA>XR`-+.C/JBJ>RR3-K$[#B%IU&8(E5=34/ KRX,YY@RLH-DTT4127:Q?W1;E51"A9LD98E`P'I1-<:WX'=
M+P=J"K%5F>@&[\;3XU"+5TR)O_GCW%;6$ Y'
M8;SYGHV1#Y$-T')O(768CE:B/M<&0$<8_Q,<@I;R@XZ)_."H/"2;HS;RGU9M6G*O*@9XT>2\2/)J7XDD7A=DGC5
M;(I0]D;V!B?VF43B%4'E=;-W5S-^)AD/N@/Z3-+RD\F@OY,,J`CTXG2+0/,^
M'%>5?3@&7``ZK:NKJ\2TY-?`BE:*K`N,&D)H)-@RI!OGS0C?1F/A\3'2U>GT
MJE7C,_AK746B#SFC*(B'G&ZUI+V,GU9;"Y]6YEI4AOJ"C^9ECS\I)B]+*B_*
MQJ'E]I.L\;HB\(9L\H><=Z6^<@=/OA<+O"C*H@GA-6M"`#84+!`P#P'<"''+
MXGSGD0I5J;O"+,X*HS?T814`,8HS=*ZTBA?VE6'P[&18I/D__UR&\5I:A/]%
M.&-L+(<]GFM0"H*V!`_\PLT=CXJ<87T\*R;XOPS
"ER#X)'T<"IG2")[W"(DOC><19U
M+1J,?OS*$,AH,>9N:&
MUPW,>@R=%!KHDXLJ@GJSC*F/2A:XV9,/:?\8PH7Z@6"";&&3B9##2-=4](
M0@C"&8QS::EB:Q^PS[T^66FMJ!A5'!=O`T]=6%QW;'C:^"
MM_/04+O[N50J.&B6O-!@"3IX^2[T2[PIFKPAMZL=',UP[WY^'[;6*J]@,.&B
M;Y57>4$6>=5HU0!A5/DW%WE>*X;=0^39C_R.9$.RPHMJ,P&.!G32,4,=8P;J
MN\:;
,8_&!+#'2_][<
M9(.=PLG'X\,5!RN,=0@1K_O/M^I3./_YNRD7)3:TX3H63]2QO_NE#]EVQ^-B
MIAP/(B0&%%L;6*M@,1-_R`-RPC]7O&O!J8^U\%@5V*)U3`J9N+792;76=X9?
MN1.G-L^M.0%3HQCFHI^_
2E3YRQJ$012F4=9:7?%_5V2CEP1QCV]B)52Q4S$KH"@B(F%%;"1:
M1T*K.N=2LT9F'K"'K*7A/<1C$*R.A"U'*$I8\4MFW?CX)&\.O\M__O4*!P\X
MP@E&;!)S:)#PMP6)9KP3^/2_%">O19E1\("BCP>VY`E.A.5F\B,`AJMM5)L#
M0//7"T(OTH0WVC>\:H>OIWPP,,>)RAP3>])/+RO1$6BP8