SHAREHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2012

CAPITAL STOCK TRANSACTIONS [Abstract]

CAPITAL STOCK TRANSACTIONS

Note 9 – Shareholders' Equity

Stock Repurchase Program – The Board of Directors of UTG authorized the repurchase in the open market or in privately negotiated transactions of UTG's common stock. During September 2012, the Board of Directors approved a resolution to increase the repurchase amount by $1 million, for a total repurchase of $6 million.  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.  During the current year, the Company repurchased 71,964 common shares through the stock repurchase program for $928,902.   Through December 31, 2012, UTG has spent $4,611,696 in the acquisition of 562,690 shares under this program.

ACAP Merger - On November 14, 2011, ACAP was merged into UTG.  The merger was a share exchange with ACAP shareholders receiving 233 UTG shares for each ACAP share held.  UTG issued 50,328 shares of common stock under this transaction.

Executive Compensation – In December 2012, the Company issued 16,225 shares of its common stock to certain members of management as part of year-end bonuses based on 2012 operating results.  The shares were valued at $13.25 per share, the market value at the date of issue.  The Company recorded $214,981 in operating expenses related to this stock issuance.

Earnings Per Share - The following is a reconciliation of basic and diluted weighted average shares outstanding used in the computation of basic and diluted earnings per share:

	2012	2011
Basic weighted average shares outstanding	3,809,639	3,824,444
Weighted average dilutive options outstanding	0	0
Diluted weighted average shares outstanding	3,809,639	3,824,444

The computation of diluted earnings per share is the same as basic earnings per share for the years ending December 31, 2012 and 2011, as there were no outstanding securities, options or other offers that give the right to receive or acquire common shares of UTG.

Statutory Restrictions – Restrictions exist on the flow of funds to UTG from its insurance subsidiary.  Statutory regulations require life insurance subsidiaries to maintain certain minimum amounts of capital and surplus. UG is required to maintain minimum statutory surplus of $2,500,000. At December 31, 2012, substantially all of the consolidated shareholders' equity represents net assets of UTG's subsidiaries.

UG is domiciled in the state of Ohio. Ohio requires notification within five business days to the insurance commissioner following the declaration of any ordinary dividend and at least ten calendar days prior to payment of such dividend.  Ordinary dividends are defined as the greater of: a) prior year statutory net income or b) 10% of statutory capital and surplus.  Extraordinary dividends (amounts in excess of ordinary dividend limitations) require prior approval of the insurance commissioner and are not restricted to a specific calculation.  UG paid ordinary dividends of $3,316,722 and $3,530,000 to UTG in 2012 and 2011, respectively. No extraordinary dividends were paid during the two year period.