10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2017

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.)
	205 NORTH DEPOT STREET
	STANFORD, KY 40484
	(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 ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

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

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☒
(Do not check if a smaller reporting company)
	Emerging growth company ☐

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

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  YES ☐    NO ☒

Indicate the number of shares outstanding of each of the registrant’s classes of common stock as of the latest practicable date.

The number of shares outstanding of the registrant’s common stock as of October 31, 2017 was 3,337,790.

UTG, Inc.

(The “Company”)

TABLE OF CONTENTS

PART I.   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 (Loss)	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	17
Item 4.  Controls and Procedures	21
PART II.  Other Information	22
Item 1.  Legal Proceedings	22
Item 1A. Risk Factors	22
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds	22
Item 3.  Defaults Upon Senior Securities	22
Item 4.  Mine Safety Disclosures	22
Item 5.  Other Information	22
Item 6.  Exhibits	22
Signatures	23
Exhibit Index	24

Part 1.   Financial Information.

Item 1.  Financial Statements.

UTG, Inc.

Condensed Consolidated Balance Sheets (Unaudited)

	September 30, 2017		December 31, 2016*
ASSETS
Investments:
Investments available for sale:
Fixed maturities, at fair value (amortized cost $165,885,262 and $170,595,860)	$	186,123,212	$	187,239,718
Equity securities, at fair value (cost $37,097,494 and $37,014,712)		59,578,028		51,707,103
Trading securities, at fair value (cost $0 and $70,690)		-		2,500
Mortgage loans on real estate at amortized cost		18,171,257		18,577,372
Investment real estate		52,637,677		57,138,980
Notes receivable		17,638,632		16,876,485
Policy loans		9,669,594		10,070,134
Total investments		343,818,400		341,612,292
Cash and cash equivalents		15,989,747		15,156,548
Accrued investment income		2,482,541		2,872,850
Reinsurance receivables:
Future policy benefits		26,550,413		26,974,819
Policy claims and other benefits		4,286,510		3,952,465
Cost of insurance acquired		6,638,069		7,267,397
Property and equipment, net of accumulated depreciation		1,230,096		1,564,944
Income tax recoverable		1,391,041		1,223,682
Other assets		2,961,268		1,476,356
Total assets	$	405,348,085	$	402,101,353
LIABILITIES & SHAREHOLDERS' EQUITY
Liabilities:
Policy liabilities and accruals:
Future policyholder benefits	$	259,711,034	$	263,844,559
Policy claims and benefits payable		5,191,752		3,889,572
Other policyholder funds		421,728		428,769
Dividend and endowment accumulations		14,548,345		14,504,583
Deferred income taxes		19,080,765		15,459,049
Notes payable		1,450,000		2,900,000
Trading securities, at fair value (proceeds $0 and $181,159)		-		1,439
Other liabilities		6,673,467		6,771,540
Total liabilities		307,077,091		307,799,511
Shareholders' equity:
Common stock - no par value, stated value $.001 per share.  Authorized 7,000,000 shares - 3,339,797 and 3,349,927 shares outstanding		3,339		3,350
Additional paid-in capital		37,679,582		37,878,712
Retained earnings		31,836,019		34,230,307
Accumulated other comprehensive income (loss)		27,752,144		20,353,692
Total UTG shareholders' equity		97,271,084		92,466,061
Noncontrolling interests		999,910		1,835,781
Total shareholders' equity		98,270,994		94,301,842
Total liabilities and shareholders' equity	$	405,348,085	$	402,101,353

* Balance sheet audited at December 31, 2016.

See accompanying notes.

UTG, Inc.

Condensed Consolidated Statements of Operations(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
	2017			2016			2017			2016
Revenue:
Premiums and policy fees	$	2,519,544		$	2,996,420		$	7,892,766		$	8,812,151
Ceded reinsurance premiums and policy fees		(659,789	)		(740,340	)		(2,230,079	)		(2,244,538	)
Net investment income		3,121,288			2,850,301			8,974,189			10,079,273
Other income		93,287			90,209			304,824			385,756
Revenues before realized gains (losses)		5,074,330			5,196,590			14,941,700			17,032,642
Realized investment gains (losses), net:
Other-than-temporary impairments		-			-			-			-
Other realized investment gains, net		1,121,860			1,855,576			1,665,920			5,923,373
Total realized investment gains (losses), net		1,121,860			1,855,576			1,665,920			5,923,373
Total revenue		6,196,190			7,052,166			16,607,620			22,956,015
Benefits and other expenses:
Benefits, claims and settlement expenses:
Life		3,756,203			5,024,528			13,584,805			16,407,007
Ceded reinsurance benefits and claims		(178,945	)		(511,137	)		(1,168,721	)		(2,017,207	)
Annuity		162,374			260,264			700,584			887,840
Dividends to policyholders		82,820			93,053			304,020			342,287
Commissions and amortization of deferred policy acquisition costs		(21,389	)		(21,923	)		(98,473	)		(93,865	)
Amortization of cost of insurance acquired		209,775			218,246			629,328			654,738
Operating expenses		1,663,349			1,792,990			5,468,014			5,471,329
Total benefits and other expenses		5,674,187			6,856,021			19,419,557			21,652,129
Income (loss) before income taxes		522,003			196,145			(2,811,937	)		1,303,886
Income tax (expense) benefit		(355,682	)		152,829			354,532			(339,658	)
Net income (loss)		166,321			348,974			(2,457,405	)		964,228
Net (income) loss attributable to noncontrolling interests		(32,485	)		(29,663	)		63,117			(75,636	)
Net income (loss) attributable to common shareholders	$	133,836		$	319,311		$	(2,394,288	)	$	888,592
Amounts attributable to common shareholders'
Basic income (loss) per share	$	0.04		$	0.09		$	(0.71	)	$	0.25
Diluted income (loss) per share	$	0.04		$	0.09		$	(0.71	)	$	0.25
Basic weighted average shares outstanding		3,344,236			3,439,426			3,350,364			3,602,164
Diluted weighted average shares outstanding		3,344,236			3,439,426			3,350,364			3,602,164

See accompanying notes.

UTG, Inc.

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

	Three Months Ended						Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
	2017			2016			2017			2016
Net income (loss)	$	166,321		$	348,974		$	(2,457,405	)	$	964,228
Other comprehensive income (loss):
Unrealized holding gains (losses) arising during period, pre-tax		7,534,111			7,196,483			12,390,006			38,064,491
Tax (expense) benefit on unrealized holding gains (losses) arising during the period		(2,636,939	)		(2,518,769	)		(4,336,502	)		(13,322,572	)
Unrealized holding gains (losses) arising during period, net of tax		4,897,172			4,677,714			8,053,504			24,741,919
Less reclassification adjustment for gains included in net income		(797,165	)		(709,955	)		(1,007,772	)		(1,406,628	)
Tax expense  for gains included in net income		279,008			248,484			352,720			492,320
Reclassification adjustment for gains included in net income, net of tax		(518,157	)		(461,471	)		(655,052	)		(914,308	)
Subtotal:  Other comprehensive income (loss), net of tax		4,379,015			4,216,243			7,398,452			23,827,611
Comprehensive income (loss)		4,545,336			4,565,217			4,941,047			24,791,839
Less comprehensive (income) loss attributable to noncontrolling interests		(32,485	)		(29,663	)		63,117			(75,636	)
Comprehensive income (loss) attributable to UTG, Inc.	$	4,512,851		$	4,535,554		$	5,004,164		$	24,716,203

See accompanying notes.

UTG, Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

	Nine Months Ended
	September 30,			September 30,
	2017			2016
Cash flows from operating activities:
Net income (loss) attributable to common shareholders	$	(2,394,288	)	$	888,592
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Amortization (accretion) of investments		191,820			(553,517	)
Realized investment gains, net		(1,665,920	)		(5,923,373	)
Unrealized trading (gains) losses included in income		111,531			-
Realized trading (gains) included in income		(110,470	)		-
Amortization of cost of insurance acquired		629,328			654,738
Depreciation		515,132			500,538
Net income (loss) attributable to noncontrolling interest		(63,117	)		75,636
Charges for mortality and administration of universal life and annuity products		(4,982,000	)		(2,116,902	)
Interest credited to account balances		3,268,536			3,466,719
Change in accrued investment income		390,309			(152,822	)
Change in reinsurance receivables		90,361			(22,291	)
Change in policy liabilities and accruals		(988,645	)		(1,897,222	)
Change in income taxes receivable (payable)		(167,359	)		(796,159	)
Change in other assets and liabilities, net		(1,927,847	)		603,671
Net cash used in operating activities		(7,102,629	)		(5,272,392	)
Cash flows from investing activities:
Proceeds from investments sold and matured:
Fixed maturities available for sale		17,036,549			26,829,015
Equity securities available for sale		3,401,217			4,506,115
Trading securities		0			72,279
Mortgage loans		860,187			3,482,189
Real estate		6,422,788			9,939,470
Notes receivable		2,035,706			2,778,401
Policy loans		1,481,824			1,465,996
Total proceeds from investments sold and matured		31,238,271			49,073,465
Cost of investments acquired:
Fixed maturities available for sale		(11,603,539	)		(7,919,941	)
Equity securities available for sale		(2,471,066	)		(2,475,777	)
Trading securities		0			(70,690	)
Mortgage loans		(360,531	)		(6,922,723	)
Real estate		(2,473,761	)		(11,937,317	)
Notes receivable		(2,797,853	)		(7,144,707	)
Policy loans		(1,081,284	)		(1,018,958	)
Total cost of investments acquired		(20,788,034	)		(37,490,113	)
Net cash provided by investing activities		10,450,237			11,583,352
Cash flows from financing activities:
Policyholder contract deposits		3,641,050			407,633
Policyholder contract withdrawals		(3,733,565	)		(3,434,052	)
Proceeds from notes payable/line of credit		-			2,900,000
Payments of principal on notes payable/line of credit		(1,450,000	)		-
Purchase of treasury stock		(396,628	)		(5,296,904	)
Issuance of stock		197,488			246,933
Non controlling contributions (distributions) of consolidated subsidiary		(772,754	)		(123,016	)
Net cash used in financing activities		(2,514,409	)		(5,299,406	)
Net increase in cash and cash equivalents		833,199			1,011,554
Cash and cash equivalents at beginning of period		15,156,548			11,822,615
Cash and cash equivalents at end of period	$	15,989,747		$	12,834,169

See accompanying notes.

UTG, Inc.

Notes to Condensed Consolidated Financial Statements

Note 1 – Basis of Presentation

The accompanying Condensed Consolidated Balance Sheet as of December 31, 2016, which has been derived from audited consolidated financial statements, and the unaudited interim Condensed Consolidated Financial Statements include the accounts of UTG, Inc. (the “Parent”) and its subsidiaries (collectively with the Parent, the “Company”).  All significant intercompany accounts and transactions have been eliminated in consolidation.  The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of regulation S-X.  Accordingly, they do not include all of the information and notes required by GAAP for audited annual financial statements.  The information furnished includes all adjustments and accruals of a normal recurring nature, which in the opinion of Management, are necessary for a fair presentation of the results for the interim periods.  The unaudited Condensed Consolidated Financial Statements included herein and these related notes should be read in conjunction with the Company’s consolidated financial statements, and the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.  The Company’s results of operations for the three and nine month periods ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017 or for any other future period.

This document at times will refer to the Registrant’s largest shareholder, Mr. Jesse T. Correll and certain companies controlled by Mr. Correll.  Mr. Correll holds a majority ownership of First Southern Funding, LLC (“FSF”), a Kentucky corporation, and First Southern Bancorp, Inc. (“FSBI”), a financial services holding company.  FSBI operates through its 100% owned subsidiary bank, First Southern National Bank (“FSNB”).  Banking activities are conducted through multiple locations within south-central and western Kentucky.  Mr. Correll is 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 September 30, 2017, Mr. Correll owns or controls directly and indirectly approximately  64.13% of UTG’s outstanding stock.

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

Note 2 – Recently Issued Accounting Standards

During the nine months ended September 30, 2017, there were no additions to or changes in the critical accounting policies disclosed in the 2016 Form 10-K.

Note 3 – Investments

Available for Sale Securities – Fixed Maturity and Equity Securities

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

Investments in available for sale securities are summarized as follows:

September 30, 2017	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	$	7,678,557	$	47,605	$	(67,183	)	$	7,658,979
U.S. special revenue and assessments		9,010,920		755,683		-			9,766,603
All other corporate bonds		149,195,785		19,913,522		(411,677	)		168,697,630
		165,885,262		20,716,810		(478,860	)		186,123,212
Equity securities		37,097,494		22,866,154		(385,620	)		59,578,028
Total	$	202,982,756	$	43,582,964	$	(864,480	)	$	245,701,240

December 31, 2016	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	$	9,058,210	$	74,581	$	(96,981	)	$	9,035,810
U.S. special revenue and assessments		10,145,531		1,002,789		(14,043	)		11,134,277
All other corporate bonds		151,392,119		17,234,691		(1,557,179	)		167,069,631
		170,595,860		18,312,061		(1,668,203	)		187,239,718
Equity securities		37,014,712		15,214,862		(522,471	)		51,707,103
Total	$	207,610,572	$	33,526,923	$	(2,190,674	)	$	238,946,821

The amortized cost and estimated market value of debt securities at September 30, 2017, 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 September 30, 2017	Amortized Cost		Estimated Fair Value
Due in one year or less	$	5,383,493	$	5,473,716
Due after one year through five years		29,857,885		41,316,685
Due after five years through ten years		44,110,567		48,479,332
Due after ten years		86,533,317		90,853,479
Total	$	165,885,262	$	186,123,212

The fair value of investments with sustained gross unrealized losses at September 30, 2017 and December 31, 2016 are as follows:

September 30, 2017	Less than 12 months					12 months or longer					Total
	Fair value		Unrealized losses			Fair value		Unrealized losses			Fair value		Unrealized losses
U.S. Government and govt. agencies and authorities	$	6,610,509	$	(67,183	)	$	-	$	-		$	6,610,509	$	(67,183	)
U.S. special revenue and assessments		-		-			-		-			-		-
All other corporate bonds		16,381,344		(234,288	)		5,357,880		(177,389	)		21,739,224		(411,677	)
Total fixed maturities	$	22,991,853	$	(301,471	)	$	5,357,880		(177,389	)	$	28,349,733		(478,860	)
Equity securities	$	5,260,992	$	(385,620	)	$	-	$	-		$	5,260,992	$	(385,620	)

December 31, 2016	Less than 12 months					12 months or longer					Total
	Fair value		Unrealized losses			Fair value		Unrealized losses			Fair value		Unrealized losses
U.S. Government and govt. agencies and authorities	$	6,578,248	$	(96,981	)	$	-	$	-		$	6,578,248	$	(96,981	)
U.S. special revenue and assessments		974,250		(14,043	)		-		-			974,250		(14,043	)
All other corporate bonds		50,161,487		(1,408,828	)		4,023,510		(148,351	)		54,184,997		(1,557,179	)
Total fixed maturities	$	57,713,985	$	(1,519,852	)	$	4,023,510		(148,351	)	$	61,737,495		(1,668,203	)
Equity securities	$	4,703,033	$	(522,471	)	$	-	$	-		$	4,703,033	$	(522,471	)

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

	Less than 12 months		12 months or longer		Total
As of September 30, 2017
Fixed maturities		11		3		14
Equity securities		4		-		4
As of December 31, 2016
Fixed maturities		25		3		28
Equity securities		3		-		3

Substantially all of the unrealized losses on fixed maturities available for sale and equity securities at  September 30, 2017 and December 31, 2016 are attributable to changes in market interest rates and general disruptions in the credit market subsequent to purchase.  The Company does not currently intend to sell nor does it expect to be required to sell any of the securities in an unrealized loss position.  Based upon the Company’s expected continuation of receipt of contractually required principal and interest payments and its intent and ability to retain the securities until price recovery, as well as the Company’s evaluation of other relevant factors, the Company deems these securities to be temporarily impaired as of  September 30, 2017 and December 31, 2016.

Other-Than-Temporary Impairments

The Company regularly reviews its investment securities for factors that may indicate that a decline in fair value of an investment is other than temporary.  The factors considered by Management in its regular review to identify and recognize other-than-temporary impairment losses on fixed maturities include, but are not limited to: the length of time and extent to which the fair value has been less than cost; the Company’s intent to sell, or be required to sell, the debt security before the anticipated recovery of its remaining amortized cost basis; the financial condition and near-term prospects of the issuer; adverse changes in ratings announced by one or more rating agencies; subordinated credit support, whether the issuer of a debt security has remained current on principal and interest payments; current expected cash flows; whether the decline in fair value appears to be issuer specific or, alternatively, a reflection of general market or industry conditions, including the effect of changes in market interest rates.  If the Company intends to sell a debt security, or it is more likely than not that it would be required to sell a debt security before the recovery of its amortized cost basis, the entire difference between the security’s amortized cost basis and its fair value at the balance sheet date would be recognized by a charge to other-than-temporary losses in the Condensed Consolidated Statements of Operations.

Equity securities may experience other-than-temporary impairments in the future based on the prospects for full recovery in value in a reasonable period of time and the Company’s ability and intent to hold the security to recovery.  If a decline in fair value is judged by Management to be other-than-temporary or Management does not have the intent or ability to hold a security, a loss is recognized by a charge to other-than-temporary impairment losses in the Condensed Consolidated Statements of Operations.

Management regularly reviews its real estate portfolio in comparison to appraisal valuations and current market conditions for indications of other-than-temporary impairments. If a decline in value is judged by Management to be other-than-temporary, a loss is recognized by a charge to other-than-temporary impairment losses in the Consolidated Statements of Operations.

Based on Management's review of the investment portfolio, the Company did not record any losses for other-than-temporary impairments in the Condensed Consolidated Statements of Operations for the three-month period ended September 30, 2017. The other-than-temporary impairment recognized during the first quarter of 2017 was recognized during the second quarter of 2017.  The Company did not recognize any losses for other-than-temporary impairments during the nine-month period ended September 30, 2017.

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 Condensed Consolidated Statements of Operations.  Trading securities include exchange-traded equities and exchange-traded options.  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.  The fair value of derivatives included in trading security assets and trading security liabilities as of   September 30, 2017 was $0 and $0, respectively. The fair value of derivatives included in trading security assets and trading security liabilities as of  December 31, 2016 was $2,500 and $(1,439), respectively.  Earnings from trading securities are classified in cash flows from operating activities. The derivatives held by the Company are for income generation purposes only.

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

	Three Months Ended
	September 30,
	2017		2016
Net unrealized gains (losses)	$	-	$	-
Net realized gains (losses)		-		-
Net unrealized and realized gains (losses)	$	-	$	-

	Nine Months Ended
	September 30,
	2017			2016
Net unrealized gains (losses)	$	(111,531	)	$	-
Net realized gains (losses)		110,470			-
Net unrealized and realized gains (losses)	$	(1,061	)	$	-

Mortgage Loans

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

Approximately 12% of the mortgage loan portfolio consists of discounted commercial mortgage loans as of September 30, 2017 and December 31, 2016. The Company began purchasing discounted commercial mortgage loans in 2009.  Management has extensive background and experience in the analysis and valuation of commercial real estate. The discounted loans are available through the FDIC’s sale of assets of closed banks and from banks wanting to reduce their loan portfolios.  The loans are available on a loan by loan bid process.  Once a loan has been acquired, contact is made with the appropriate individuals to begin a dialog with a goal of determining the borrower’s willingness to work together.  There are generally three paths a discounted loan will take:  the borrowers pay as required; a settlement is reached with the loan being paid off at a discounted value; or the loan is foreclosed.

During 2017 and 2016, the Company acquired $360,531 and $6,922,723 in mortgage loans, respectively, including both regular participation mortgage loans as well as discounted mortgage loans.  FSNB services the majority of the Company’s mortgage loan portfolio.  The Company pays FSNB a .25% servicing fee on these loans and a one-time fee at loan origination of .50% of the original loan cost to cover costs incurred by FSNB relating to the processing and establishment of the loan.

During 2017 and 2016, the maximum and minimum lending rates for mortgage loans were:

	2017						2016
	Maximum rate			Minimum rate			Maximum rate			Minimum rate
Farm Loans		5.00	%		5.00	%		5.00	%		5.00	%
Commercial Loans		8.50	%		3.94	%		8.00	%		4.00	%
Residential Loans		8.00	%		4.00	%		8.00	%		3.94	%

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

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

Changes in the current economy could have a negative impact on the loans, including the financial stability of the borrowers, the borrowers’ ability to pay or to refinance, the value of the property held as collateral and the ability to find purchasers at favorable prices.  Given the uncertainty of the current market, Management has taken a conservative approach with the discounted mortgage loans 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.  The Company records repayments on loans as discount accrual when the loan basis has been paid in full.

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 contract value, and believes that it will fully recover its carrying value upon disposal, therefore no reserve for delinquent loans is deemed necessary.  Those not currently paying are being vigorously worked by Management.  The current discounted commercial mortgage loan portfolio has an average price of  32% of face value as of September 30, 2017 and December 31, 2016.  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 September 30, 2017 and December 31, 2016.

The following table summarizes the number of loans held in the discounted mortgage loan portfolio and the carrying value of the loans:

September 30, 2017 Payment Frequency	Number of Loans		Carrying Value
No payments received		8	$	-
One-time payment received		1		-
Irregular payments received		2		20,834
Periodic payments received		5		2,090,929
Total		16	$	2,111,763

December 31, 2016 Payment Frequency	Number of Loans		Carrying Value
No payments received		8	$	-
One-time payment received		1		-
Irregular payments received		2		20,834
Periodic payments received		5		2,168,062
Total		16	$	2,188,896

The following table summarizes the mortgage loan holdings of the Company for the periods ended:

	September 30, 2017		December 31, 2016
In good standing	$	16,059,494	$	16,388,477
Overdue interest over 90 days		20,834		20,834
Restructured		52,827		60,827
In process of foreclosure		2,038,102		2,107,234
Total mortgage loans	$	18,171,257	$	18,577,372
Total foreclosed loans during the year	$	-	$	735,000

Investment Real Estate

Real estate acquired through foreclosure, consisting of properties obtained through foreclosure proceedings or acceptance of a deed in lieu of foreclosure, is reported on an individual asset basis at the lower of cost or fair value, less disposal costs. Fair value is determined on the basis of current appraisals, comparable sales, and other estimates of value obtained principally from independent sources. When properties are acquired through foreclosure, any excess of the loan balance at the time of foreclosure over the fair value of the real estate held as collateral is recognized and charged to the Consolidated Statements of Operations. Based upon Management’s evaluation of the real estate acquired through foreclosure, additional expense is recorded when necessary in an amount sufficient to reflect any declines in estimated fair value. Gains and losses recognized on the disposition of the properties are recorded as realized gains and losses in the Consolidated Statements of Operations.

Notes Receivable

Notes receivable represent collateral loans and promissory notes issued by the Company and are reported at their unpaid principal balances, adjusted for valuation allowances. Valuation allowances are established for impaired loans when it is probable that contractual principal and interest will not be collected. The valuation allowance as of  September 30, 2017 and December 31, 2016 was $0. Interest accruals are analyzed based on the likelihood of repayment.  The Company does not utilize a specified number of days delinquent to cause an automatic non-accrual status.

Before a new note is issued, the applicant is subject to certain criteria set forth by Company Management to ensure quality control.  Once the note is approved, the Company directly funds the note to the borrower. Several of the notes have participation agreements in place, whereas the Company has reduced its investment in the note receivable by participating a portion of the note to a third party.

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

Note 4 – Fair Value Measurements

The Company measures its assets and liabilities recorded at fair value in the Condensed Consolidated Balance Sheets based on the framework set forth in the GAAP fair value accounting guidance.  The framework establishes a fair value hierarchy of three levels based upon the transparency of information used in measuring the fair value of assets or liabilities as of the measurement date.  The fair value hierarchy prioritizes the inputs in the valuation techniques used to measure fair value into three categories.

Level 1 – Valuation is based upon quoted prices for identical assets or liabilities in active markets that the Company is able to access.  Level 1 fair value is not subject to valuation adjustments.

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

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

The Company determines the existence of an active market for an asset or liability based on its judgment as to whether transactions for the asset or liability occur in such market with sufficient frequency and volume to provide reliable pricing information.  If the Company concludes that there has been a significant decrease in the volume and level of activity for an investment in relation to normal market activity for such investment, adjustments to transactions and quoted prices are made to estimate fair value.

The inputs used in the valuation techniques employed by the Company are provided by nationally recognized pricing services, external investment managers and internal resources.  To assess these inputs, the Company’s review process includes, but is not limited to, quantitative analysis including benchmarking, initial and ongoing evaluations of methodologies used by external parties to calculate fair value, and ongoing evaluations of fair value estimates based on the Company’s knowledge and monitoring of market conditions.

The Company periodically reviews the pricing service provider’s policies and procedures for valuing securities.  The assumptions underlying the valuations from external service providers, including unobservable inputs, are generally not readily available as this information is often deemed proprietary.  Accordingly, the Company is unable to obtain comprehensive information regarding these assumptions and methodologies.

The Company’s investments in fixed maturity securities available for sale, equity securities available for sale and trading securities assets and liabilities are carried at fair value.  The following are the Company’s methodologies and valuation techniques for assets and liabilities measured at fair value.

Fixed maturities available for sale mainly consist of U.S. treasury securities and corporate debt securities. The Company employs a market approach to the valuation of securities where there are sufficient market transactions involving identical or comparable assets. If sufficient market data is not available for identical or comparable assets, the Company uses an income approach to valuation. The majority of the financial instruments included in fixed maturity securities available for sale are evaluated utilizing observable inputs; accordingly, they are categorized in either Level 1 or Level 2 of the fair value hierarchy. However, in instances where significant inputs utilized in valuation of the securities are unobservable, the securities are categorized in Level 3 of the fair value hierarchy.

Corporate securities primarily include fixed rate corporate bonds. Inputs utilized in connection with the Company’s valuation techniques relating to this class of securities include recently executed transactions, market price quotations, benchmark yields and issuer spreads. Corporate securities are categorized in Level 2 of the fair value hierarchy.

U.S. treasury securities are based on quoted prices in active markets and are generally categorized in Level 1 of the fair value hierarchy.

Equity securities available for sale consist of common and preferred stocks mainly in private equity investments, financial institutions and insurance companies. Equity securities for which there is sufficient market data are categorized as Level 1 or 2 in the fair value hierarchy.  For the equity securities in which quoted market prices are not available, the transaction price is used as the best estimate of fair value at inception.  When evidence is believed to support a change to the carrying value from the transaction price, adjustments are made to reflect the expected exit values. The Company performs ongoing reviews of the underlying investments. The reviews consist of the evaluations of expected cash flows, material events and market data. These investments are included in Level 3 of the fair value hierarchy.

Securities designated as trading securities consist of exchange traded equities and exchange traded options.  These securities are primarily valued at quoted active market prices, and are therefore categorized as Level 1 in the fair value hierarchy.

The following table presents the Company’s assets and liabilities measured at fair value in the Condensed Consolidated Balance Sheet on a recurring basis as of September 30, 2017.

	Level 1		Level 2		Level 3		Total
Assets
Fixed Maturities, available for sale	$	9,683,209	$	173,683,226	$	2,756,777	$	186,123,212
Equity Securities, available for sale		22,709,227		7,428,608		29,440,193		59,578,028
Total	$	32,392,436	$	181,111,834	$	32,196,970	$	245,701,240

The following table presents the Company’s assets and liabilities measured at fair value in the Condensed Consolidated Balance Sheet on a recurring basis as of December 31, 2016.

	Level 1		Level 2		Level 3		Total
Assets
Fixed Maturities, available for sale	$	9,035,810	$	175,120,657	$	3,083,251	$	187,239,718
Equity Securities, available for sale		19,360,394		6,553,410		25,793,299		51,707,103
Trading Securities		2,500		-		-		2,500
Total	$	28,398,704	$	181,674,067	$	28,876,550	$	238,949,321
Liabilities
Trading Securities	$	1,439	$	-	$	-	$	1,439

The following table provides reconciliations for Level 3 assets measured at fair value on a recurring basis. Transfers into and out of Level 3 are recognized as of the end of the quarter in which they occur.

	Fixed Maturities, Available for Sale			Equity Securities, Available for Sale			Total
Balance at December 31, 2016	$	3,083,251		$	25,793,299		$	28,876,550
Total unrealized gains (losses):
Included in realized gains (losses)		-			-			-
Included in other comprehensive income		702,375			2,640,392			3,342,767
Purchases		-			2,114,307			2,114,307
Sales		(1,028,849	)		(1,107,805	)		(2,136,654	)
Balance at September 30, 2017	$	2,756,777		$	29,440,193		$	32,196,970

The Level 3 securities include collateralized debt obligations of trust preferred securities issued by banks and insurance companies and certain equity securities with unobservable inputs. The Company computed fair value of Level 3 equity investments based on a review of current financial information, earnings trends and similar companies in the same industries.

There were no transfers in or out of Level 3 as of September 30, 2017.  Transfers occur when there is a lack of observable market information.

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

The carrying values and estimated fair values of certain of the Company’s financial instruments not recorded at fair value in the Consolidated Balance Sheets are shown below. Because the fair value for all Consolidated Balance Sheet items are not required to be disclosed, the aggregate fair value amounts presented below are not reflective of the underlying value of the Company.

	September 30, 2017				December 31, 2016
Assets	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Mortgage loans on real estate	$	18,171,257	$	18,171,257	$	18,577,372	$	18,577,372
Investment real estate		52,637,677		52,637,677		57,138,980		57,138,980
Notes receivable		17,638,632		17,638,632		16,876,485		16,876,485
Policy loans		9,669,594		9,669,594		10,070,134		10,070,134
Cash and cash equivalents		15,989,747		15,989,747		15,156,548		15,156,548

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

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

A portion of the mortgage loans balance consists of discounted mortgage loans. The Company has been purchasing non-performing discounted mortgage 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, which Management believes approximates fair value.  The inputs used to measure the fair value of our discounted mortgage loans are classified as Level 3 within the fair value hierarchy.

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

Notes receivable are carried at their unpaid principal balances, which approximates fair value. The inputs used to measure the fair value of the loans are classified as Level 3 within the fair value hierarchy.

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

The carrying amount of cash and cash equivalents in the Consolidated Balance Sheets approximates fair value given the highly liquid nature of the instruments.  The inputs used to measure the fair value of our cash and cash equivalents are classified as Level 1 within the fair value hierarchy.

The carrying amount of short term investments in the Consolidated Balance Sheets approximates fair value.  The inputs used to measure the fair value of our short term investments are classified as Level 3 within the fair value hierarchy.

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

Note 5 – Credit Arrangements

At September 30, 2017 and December 31, 2016, the Company had the following outstanding debt:

			Outstanding Principal Balance
Instrument	Issue Date	Maturity Date	September 30, 2017		December 31, 2016
Promissory Note:
SoftVest, LP	7/22/2016	7/22/2018	$	725,000	$	1,450,000
SoftSearch Investment, L.P.	7/22/2016	7/22/2018		725,000		1,450,000

Instrument	Issue Date	Maturity Date	Revolving Credit Limit		December 31, 2016		Borrowings		Repayments		September 30, 2017
Lines of Credit:
UTG	11/20/2013	11/20/2018	$	8,000,000	$	-		-		-	$	-
UG	6/2/2015	5/10/2018		10,000,000		-		-		-		-

The UTG line of credit carries interest at a fixed rate of  4.00% and is payable monthly. As collateral, UTG has pledged 100% of the common voting stock of its wholly owned subsidiary, Universal Guaranty Life Insurance Company (“UG”).  The Company is currently in the process of renewing this line of credit.

During May of 2017, the Federal Home Loan Bank approved UG’s Cash Management Advance Application (“CMA”). The CMA gives the Company the option of selecting a variable rate of interest for up to 90 days or a fixed rate for a maximum of 30 days. The variable rate CMA is prepayable at any time without a fee, while the fixed CMA is not prepayable prior to maturity. The Company is currently in the process of renewing the CMA.

On July 22, 2016, the Company entered in to an agreement to acquire 300,000 shares of its outstanding common stock from a shareholder that owned approximately 8% of the Company’s outstanding common stock.  The acquisition was made under the Company’s stock buy-back program. As part of this transaction, two promissory notes totaling $2.9 million were issued. The notes require principal payments of one half of the note value to be paid one year from the date of purchase and the other one half to be paid two years from the date of purchase. The notes bear interest at 0%.  During April of 2017, the Company paid $725,000 on the outstanding principal balance of each promissory note.

Note 6 – Shareholders’ Equity

Stock Repurchase Program – The Board of Directors of UTG has authorized the repurchase in the open market or in privately negotiated transactions of UTG's common stock. At a meeting of the Board of Directors on June 15, 2016, the Board of Directors of UTG authorized the repurchase of up to an additional $2 millionof UTG’s common stock and on July 14, 2016, the Board of Directors again increased the amount available by an additional $4.5 million, for a total repurchase of $14.5million. Repurchased shares are available for future issuance for general corporate purposes. Company Management has broad authority to operate the program, including the discretion of whether to purchase shares and the ability to suspend or terminate the program. Open market purchases are made based on the last available market price but may be limited.  During the nine month period ended September 30, 2017, the Company repurchased approximately 21,400shares through the stock repurchase program for approximately $397,000. Through September 30, 2017, UTG has spent approximately $12.3million in the acquisition of approximately 1,080,000shares under this program.

During 2017, the Company issued approximately 11,000 shares of stock to Management as compensation. These awards are determined at the discretion of the Board of Directors.

Earnings Per Share Calculations

Earnings per share are based on the weighted average number of common shares outstanding during each period.  For the three and nine months ended September 30, 2017 and 2016, diluted earnings per share were the same as basic earnings per share since the Company had no dilutive instruments outstanding.

Note 7 – Commitments and Contingencies

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

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

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. All trading securities were settled during the first quarter of 2017.

The following table represents the total funding commitments and the unfunded commitment as of September 30, 2017 related to certain investments:

	Total Funding Commitment		Unfunded Commitment
RLF III, LLC	$	4,000,000	$	398,120
Sovereign’s Capital, LP Fund I		500,000		33,642
UGLIC, LLC		1,600,000		120,000
Sovereign's Capital, LP Fund II		1,000,000		410,301
Barton Springs Music, LLC		2,500,000		1,339,063
Master Mineral Holdings II, LP		4,122,167		556,286

During 2006, the Company committed to invest in RLF III, LLC (“RLF”), which makes land-based investments in undervalued assets. RLF makes capital calls as funds are needed for continued land purchases.

During 2012, the Company committed to invest in Sovereign’s Capital, LP Fund I (“Sovereign’s”), which invests in companies in emerging markets. Sovereign’s makes capital calls to investors as funds are needed.

During 2014, the Company committed to invest in UGLIC, LLC, which purchases real estate tax receivables.  UGLIC, LLC makes capital calls as funds are needed for additional purchases.

During 2015, the Company committed to invest in Sovereign’s Capital, LP Fund II (“Sovereign’s II”), which invests in companies in emerging markets. Sovereign’s II makes capital calls to investors as funds are needed.

During 2016, the Company made a commitment to invest in Barton Springs Music, LLC (“Barton”), which invests in music royalties.  Barton makes capital calls to its investors as funds are needed to acquire the royalty rights.

During 2016, the Company made a commitment to invest in Master Mineral Holdings II, LP (“MMH”), which purchases land for leasing opportunities to those looking to harvest natural resources.  MMH makes capital calls to its investors as funds are needed for continued land purchases.

Note 8 – Other Cash Flow Disclosures

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

	Three Months Ended
	September 30,
	2017		2016
Interest	$	-	$	-
Federal income tax		20,000		33,000

	Nine Months Ended
	September 30,
	2017		2016
Interest	$	-	$	-
Federal income tax		175,000		768,000

Note 9 – Concentrations of Credit Risk

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

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

The following is Management’s discussion and analysis of the financial condition and results of operations of UTG, Inc. and its subsidiaries (collectively with the Parent, the “Company”).  The following discussion of the financial condition and results of operations of the Company should be read in conjunction with, and is qualified in its entirety by reference to, the Consolidated Financial Statements of the Company and the related Notes thereto appearing in the Company’s annual report on Form 10-K for the year ended December 31, 2016, as filed with the Securities and Exchange Commission, and our unaudited Condensed Consolidated Financial Statements and related Notes thereto appearing elsewhere in this quarterly report.

Cautionary Statement Regarding Forward-Looking Statements

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

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

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

Overview

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

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts and related disclosures. Actual results could differ significantly from those estimates.  The Company has identified certain estimates that involve a higher degree of judgment and are subject to a significant degree of variability.  The Company’s critical accounting policies and the related estimates considered most significant by Management are disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.  Management has identified the accounting policies related to cost of insurance acquired, assumptions and judgments utilized in determining if declines in fair values of investments are other-than-temporary, and valuation methods for investments that are not actively traded as those, due to the judgments, estimates and assumptions inherent in those policies, are critical to an understanding of the Company’s Condensed Consolidated Financial Statements and this Management’s Discussion and Analysis.

During the nine months ended September 30, 2017, there were no additions to or changes in the critical accounting policies disclosed in the 2016 Form 10-K, as discussed in Note 2 of the Notes to the Condensed Consolidated Financial Statements.

Results of Operations

On a consolidated basis, the Company reported a net loss attributable to common shareholders’ of approximately $(2.4) million for the nine month period ended September 30, 2017 and net income attributable to common shareholders’ of approximately $134,000 for the three month period ended September 30, 2017.  For the nine month period ended September 30, 2016, the Company reported net income attributable to common shareholders’ of approximately $889,000 and net income attributable to common shareholders’ of approximately $319,000 for the three month period ended September 30, 2016.

Revenues

The Company’s total revenues decreased approximately 28% when comparing the nine month periods ended September 30, 2017 and 2016. The Company’s revenues decreased by approximately 14% when comparing the three month periods ended September 30, 2017 and 2016. The variance in total revenues reported, year to date and for the quarter, is mainly attributable to fluctuations in net investment income and net realized investment gains reported by the Company during 2017 and 2016. Further analysis of the fluctuations in net investment income and net realized investment gains is provided below.

Premium and policy fee revenues, net of reinsurance, decreased approximately 14% when comparing the nine month period ended September 30, 2017 to the same period in 2016.  Premium and policy fee revenues, net of reinsurance, decreased by approximately 18% when comparing the third quarter of 2017 to the same quarter in 2016.  The Company writes minimal new business.  Premium and policy fee revenues, net of reinsurance, represented 35% and 29% of the Company’s revenues as of September 30, 2017 and 2016, respectively.

The following table reflects net investment income of the Company:

	Three Months Ended						Nine Months Ended September 30,
	September 30,						September 30,
	2017			2016			2017			2016
Fixed maturities available for sale	$	2,312,874		$	2,308,923		$	6,531,313		$	6,946,490
Equity securities		230,476			297,682			826,119			998,544
Trading securities		-			(119,749	)		(1,061	)		(80,272	)
Mortgage loans		310,804			314,128			908,488			1,566,902
Real estate		533,291			363,052			1,544,739			1,489,981
Notes receivable		295,181			284,142			664,697			1,225,723
Policy loans		151,054			177,317			499,813			442,435
Short term		-			7,877			-			7,877
Cash and cash equivalents		8,349			10,905			12,315			20,465
Total consolidated investment income		3,842,029			3,644,277			10,986,423			12,618,145
Investment expenses		(720,741	)		(793,976	)		(2,012,234	)		(2,538,872	)
Consolidated net investment income	$	3,121,288		$	2,850,301		$	8,974,189		$	10,079,273

Net investment income represented 54% and 445% of the Company’s total revenues as of September 30, 2017 and 2016, respectively.  The Company reported net investment income of approximately $9 million for the nine month period ended September 30, 2017, a decrease of approximately 11% compared to the same period in 2016.  For the three month period ended September 30, 2017, net investment income increased approximately 10%, compared to the same quarter in 2016.  When comparing the three and nine month periods ended September 30, 2017 and 2016, income from investing activities was down in most of the investment categories, with the largest variances being found in the fixed maturities, mortgage loans, and notes receivable investment categories.

Income from the fixed maturities investment portfolio is down approximately 6% when comparing the nine month period ended September 30, 2017 to the same period in 2016.  The decrease is attributable to the Company holding fewer bonds combined with upgrading credit quality. During 2017, the Company sold some lower rated, higher yielding securities and replaced them with higher rated, lower yielding securities.

Income from the mortgage loan investment portfolio is down in the current year, when comparing the three and nine month periods ended September 30, 2017 to the same periods in 2016.  This is the result of the continued pay off of loans within the portfolio, particularly the discounted mortgage loans, which have, in recent periods, provided significant earnings.  During the first quarter of 2016, two of the discounted mortgage loans paid off, which produced income of approximately $842,000.

Income from the notes receivable investment portfolio is down in the current year, when comparing the three and nine month periods ended September 30, 2017 to the same periods in 2016.  During the first quarter of 2016, one of the notes receivable was fully repaid and produced income of approximately $500,000.

The Company reported net realized investment gains of approximately $1.7 million and $6 million for the nine month periods ended September 30, 2017 and 2016, respectively.  During the third quarter of 2017 and 2016, the Company reported net realized investment gains of approximately $1.1 million and $1.9 million, respectively. Realized investment gains are the result of one-time events and are expected to vary from quarter to quarter.

The 2017 net realized gains are attributable to the sales of certain fixed maturities and equity securities. During the second quarter of 2017, the Company sold certain equity securities that produced gains of approximately $850,000. During the third quarter of 2017, the Company sold certain fixed maturities that produced gains of approximately $800,000. As mentioned above, the Company made the decision to sell some lower rated, higher yielding securities and replace them with higher rated, lower yielding securities.

The 2016 net realized investment gains were mainly attributable to the sale of a parcel of real estate during the second quarter of 2016 that produced a gain of approximately $3.2 million.

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

Expenses

The Company reported total benefits and other expenses of approximately $19.4 million for the nine month period ended September 30, 2017, a decrease of approximately 10% from the same period in 2016.  For the three month period ended September 30, 2017, total benefits and other expenses decreased approximately 17%, compared to the same quarter in 2016.  Benefits, claims and settlement expenses represented approximately 70% and 71% of the Company’s total expenses for the three and nine month periods ended September 30, 2017, respectively.  The other major expense category of the Company is operating expenses, which represented approximately 28% and 27% of the Company’s total expenses for the three and nine month periods ended September 30, 2017, respectively.

Life benefits, claims and settlement expenses, net of reinsurance benefits and claims, decreased approximately 14% in the nine month period ended September 30, 2017, compared to the same period in 2016.  For the three month period ended September 30, 2017, life benefits, claims and settlement expenses, net of reinsurance benefits and claims, decreased approximately 21%, compared to the same quarter in 2016.  Policy claims vary from period to period and therefore, fluctuations in mortality are to be expected and are not considered unusual by Management.

Net amortization of cost of insurance acquired decreased 4% during the nine month and three month periods ended September 30, 2017 compared to the same period in 2016.  Cost of insurance acquired is established when an insurance company is acquired or when the Company acquires a block of in-force business.  The Company assigns a portion of its cost to the right to receive future profits from insurance contracts existing at the date of the acquisition.  Cost of insurance acquired is amortized with interest in relation to expected future profits, including direct charge-offs for any excess of the unamortized asset over the projected future profits. The interest rates may vary due to risk analysis performed at the time of acquisition on the business acquired. The Company utilizes a 12% discount rate on the remaining unamortized business.  The amortization is adjusted retrospectively when estimates of current or future gross profits to be realized from a group of products are revised.  Amortization of cost of insurance acquired is particularly sensitive to changes in interest rate spreads and persistency of certain blocks of insurance in-force.  This expense is expected to decrease, unless the Company acquires a new block of business.

UTG has a strong philanthropic program. The Company generally allocates a portion of its taxable income to be used for its philanthropic efforts primarily targeted to Christ-centered organizations or organizations that help the weak or poor. Charitable contributions made by the Company are expected to vary from year to year depending on the earnings of the Company.

Effective January 1, 2017, the Company and FSNB began sharing certain services. The shared services focuses on departments commonly utilized by both organizations such as Financial Accounting, Human Resources and Information Technology.

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

Financial Condition

Investment Information

Investments represent approximately 85% of total assets at September 30, 2017 and December 31, 2016.  Accordingly, investments are the largest asset group of the Company.  The Company's insurance subsidiary is regulated by insurance statutes and regulations as to the type of investments that it is 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, the majority of the Company’s investment portfolio is invested in a diverse set of securities.

As of September 30, 2017, the carrying value of fixed maturity securities in default as to principal or interest was immaterial in the context of consolidated assets, shareholders’ equity or results from operations.  To provide additional flexibility and liquidity, the Company has identified all fixed maturity securities as "investments available for sale".  Investments available for sale are carried at market, with changes in market value charged directly to shareholders' equity.  Changes in the market value of available for sale securities resulted in net unrealized gains of approximately $8.1 million for the nine month period ended September 30, 2017 and $5 million for the third quarter of 2017.  Changes in the market value of available for sale securities resulted in net unrealized gains of approximately $24.7 million for the nine month period ended September 30, 2016 and $4.7 million for the third quarter of 2016. The variance in the net unrealized gains and losses is the result of normal market fluctuations and changes in interest rates.

Capital Resources

Total shareholders’ equity increased by approximately 4% as of September 30, 2017 compared to December 31, 2016. The increase in total shareholders’ equity is the result of an increase in accumulated other comprehensive income.

The Company’s investments are predominately in fixed maturity investments such as bonds, which provide sufficient return to cover future obligations.  The Company carries all of its fixed maturity holdings as available for sale, which are reported in the Condensed Consolidated Financial Statements at their market value.

Liquidity

The Company has three principal needs for cash - the insurance company’s contractual obligations to policyholders, the payment of operating expenses and debt service.  Cash and cash equivalents represented 4% of total assets as of September 30, 2017 and December 31, 2016.  Fixed maturities, as a percentage of total assets, were approximately 46% and 47% as of September 30, 2017 and December 31, 2016, respectively.

The Company currently has access to funds for operating liquidity.  UTG has an $8,000,000 revolving credit note with Illinois National Bank.  At September 30, 2017, the Company had no outstanding borrowings against the UTG line of credit.

Future policy benefits are primarily long-term in nature and therefore, the Company's investments are predominantly in long-term fixed maturity investments such as bonds and mortgage loans which provide sufficient return to cover these obligations. Many of the Company's products contain surrender charges and other features which reward persistency and penalize the early withdrawal of funds.

Net cash used in operating activities was approximately $7.1 million and $5.3 million for the nine month periods ended September 30, 2017 and 2016, respectively.  Sources of operating cash flows of the Company, as with most insurance entities, is comprised primarily of premiums received on life insurance products and income earned on investments.  Uses of operating cash flows consist primarily of payments of benefits to policyholders and beneficiaries and operating expenses.  The Company has not marketed any significant new products for several years.  As such, premium revenues continue to decline.  Management anticipates future cash flows from operations to remain similar to historic trends.

Net cash provided by investing activities was approximately $10.5 million and $11.6 million for the nine month period ended September 30, 2017 and 2016, respectively. The net cash provided by investing activities is expected to vary from quarter to quarter depending on market conditions and management’s ability to find and negotiate favorable investment contracts.

UTG is a holding Company that has no day-to-day operations of its own.  Funds required to meet its expenses, generally costs associated with maintaining the Company in good standing with states in which it does business and the servicing of its debt, are primarily provided by its subsidiaries.  On a parent only basis, UTG's cash flow is dependent on Management fees received from its insurance subsidiary, stockholder dividends from its subsidiary and earnings received on cash balances.  At September 30, 2017, substantially all of the consolidated shareholders’ equity represented net assets of its subsidiary.  The Company's insurance subsidiary has maintained adequate statutory capital and surplus.  The payment of cash dividends to shareholders by UTG is not legally restricted.  However, the state insurance department regulates insurance Company dividend payments where the Company is domiciled.  No dividends were paid to shareholders in 2016 or the nine month period ended September 30, 2017.

UG is an Ohio domiciled insurance company, which 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.  For the year ended December 31, 2016, UG had statutory net income of approximately $4.6 million.  At December 31, 2016 UG’s statutory capital and surplus amounted to approximately $45.2 million.  Extraordinary dividends (amounts in excess of ordinary dividend limitations) require prior approval of the insurance commissioner and are not restricted to a specific calculation.  During 2016, UG paid UTG ordinary dividends of $1 million.  During the second quarter of 2017, UG paid UTG an ordinary dividend of $2 million. UTG used the dividends received during 2016 and 2017 for general operations of the Company.

ITEM 4.  CONTROLS AND PROCEDURES

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

PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

NONE

ITEM 1A.  RISK FACTORS

NONE

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

NONE

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

NONE

ITEM 4.  MINE SAFETY DISCLOSURES

NONE

ITEM 5.  OTHER INFORMATION

NONE

ITEM 6.  EXHIBITS

*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	Interactive Data File

*Filed herewith

SIGNATURES

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

UTG, INC.

(Registrant)

Date:	November 9, 2017	By	/s/ James P. Rousey
			James P. Rousey
			President and Director

Date:	November 9, 2017	By	/s/ Theodore C. Miller
			Theodore C. Miller
			Senior Vice President and Chief Financial Officer

EXHIBIT INDEX

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	Interactive Data File

* Filed herewith

EX-31.1

Exhibit 31.1 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, 2017	By:	/s/ Jesse T. Correll
			Chairman of the Board and
			Chief Executive Officer

EX-31.2

Exhibit 31.2 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, 2017	By:	/s/ Theodore C. Miller
			Senior Vice President, Corporate Secretary and
			Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of UTG, Inc. (the "Company") for the period ended September 30, 2017, as filed with the Securities and Exchange Commission on the date hereof (the "Report") I, Jesse T. Correll, Chairman of the Board and Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

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

Date:	November 9, 2017	By:	/s/ Jesse T. Correll
			Jesse T. Correll
			Chairman of the Board and
			Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of UTG, Inc. (the "Company") for the period ended September 30, 2017, as filed with the Securities and Exchange Commission on the date hereof (the "Report") I, Jesse T. Correll, Chairman of the Board and Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

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

Date:	November 9, 2017	By:	/s/ Theodore C. Miller
			Theodore C. Miller
			Senior Vice President, Corporate Secretary and
			Chief Financial Officer

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Oct. 31, 2017
Document and Entity Information [Abstract]
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	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		3,337,790
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2017

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Sep. 30, 2017	Dec. 31, 2016	[1]
Investments available for sale:
Fixed maturities, at fair value (amortized cost $165,885,262 and $170,595,860)	$ 186,123,212	$ 187,239,718
Equity securities, at fair value (cost $37,097,494 and $37,014,712)	59,578,028	51,707,103
Trading securities, at fair value (cost $0 and $70,690)	0	2,500
Mortgage loans on real estate at amortized cost	18,171,257	18,577,372
Investment real estate	52,637,677	57,138,980
Notes receivable	17,638,632	16,876,485
Policy loans	9,669,594	10,070,134
Total investments	343,818,400	341,612,292
Cash and cash equivalents	15,989,747	15,156,548
Accrued investment income	2,482,541	2,872,850
Reinsurance receivables:
Future policy benefits	26,550,413	26,974,819
Policy claims and other benefits	4,286,510	3,952,465
Cost of insurance acquired	6,638,069	7,267,397
Property and equipment, net of accumulated depreciation	1,230,096	1,564,944
Income taxes receivable	1,391,041	1,223,682
Other assets	2,961,268	1,476,356
Total assets	405,348,085	402,101,353
Policy liabilities and accruals:
Future policyholder benefits	259,711,034	263,844,559
Policy claims and benefits payable	5,191,752	3,889,572
Other policyholder funds	421,728	428,769
Dividend and endowment accumulations	14,548,345	14,504,583
Deferred income taxes	19,080,765	15,459,049
Notes payable	1,450,000	2,900,000
Trading securities, at fair value (proceeds $0 and $181,159)	0	1,439
Other liabilities	6,673,467	6,771,540
Total liabilities	307,077,091	307,799,511
Shareholders' equity:
Common stock - no par value, stated value $.001 per share. Authorized 7,000,000 shares - 3,339,797 and 3,349,927 shares outstanding	3,339	3,350
Additional paid-in capital	37,679,582	37,878,712
Retained earnings	31,836,019	34,230,307
Accumulated other comprehensive income (loss)	27,752,144	20,353,692
Total UTG shareholders' equity	97,271,084	92,466,061
Noncontrolling interest	999,910	1,835,781
Total shareholders' equity	98,270,994	94,301,842
Total liabilities and shareholders' equity	$ 405,348,085	$ 402,101,353

[1] Balance sheet audited at December 31, 2016.

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Investments available for sale:
Fixed maturities, amortized cost	$ 165,885,262	$ 170,595,860
Equity securities, cost	37,097,494	37,014,712
Trading securities, cost	0	70,690
Liabilities:
Trading securities, proceeds	$ 0	$ 181,159
Shareholders' equity:
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, stated value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized (in shares)	7,000,000	7,000,000
Common stock, outstanding (in shares)	3,339,797	3,349,927

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Revenues:
Premiums and policy fees	$ 2,519,544	$ 2,996,420	$ 7,892,766	$ 8,812,151
Ceded reinsurance premiums and policy fees	(659,789)	(740,340)	(2,230,079)	(2,244,538)
Net investment income	3,121,288	2,850,301	8,974,189	10,079,273
Other income	93,287	90,209	304,824	385,756
Revenues before realized gains (losses)	5,074,330	5,196,590	14,941,700	17,032,642
Realized investment gains (losses), net:
Other-than-temporary impairments	0	0	0	0
Other realized investment gains, net	1,121,860	1,855,576	1,665,920	5,923,373
Total realized investment gains (losses), net	1,121,860	1,855,576	1,665,920	5,923,373
Total revenue	6,196,190	7,052,166	16,607,620	22,956,015
Benefits, claims and settlement expenses:
Life	3,756,203	5,024,528	13,584,805	16,407,007
Ceded reinsurance benefits and claims	(178,945)	(511,137)	(1,168,721)	(2,017,207)
Annuity	162,374	260,264	700,584	887,840
Dividends to policyholders	82,820	93,053	304,020	342,287
Commissions and amortization of deferred policy acquisition costs	(21,389)	(21,923)	(98,473)	(93,865)
Amortization of cost of insurance acquired	209,775	218,246	629,328	654,738
Operating expenses	1,663,349	1,792,990	5,468,014	5,471,329
Total benefits and other expenses	5,674,187	6,856,021	19,419,557	21,652,129
Income (loss) before income taxes	522,003	196,145	(2,811,937)	1,303,886
Income tax (expense) benefit	(355,682)	152,829	354,532	(339,658)
Net income (loss)	166,321	348,974	(2,457,405)	964,228
Net (income) loss attributable to noncontrolling interests	(32,485)	(29,663)	63,117	(75,636)
Net income (loss) attributable to common shareholders	$ 133,836	$ 319,311	$ (2,394,288)	$ 888,592
Amounts attributable to common shareholders':
Basic income (loss) per share (in dollars per share)	$ 0.04	$ 0.09	$ (0.71)	$ 0.25
Diluted income (loss) per share (in dollars per share)	$ 0.04	$ 0.09	$ (0.71)	$ 0.25
Basic weighted average shares outstanding (in shares)	3,344,236	3,439,426	3,350,364	3,602,164
Diluted weighted average shares outstanding (in shares)	3,344,236	3,439,426	3,350,364	3,602,164

XML

Condensed Consolidated Statement of Comprehensive Income (Loss) (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) [Abstract]
Net income (loss)	$ 166,321	$ 348,974	$ (2,457,405)	$ 964,228
Other comprehensive income (loss):
Unrealized holding gains (losses) arising during period, pre-tax	7,534,111	7,196,483	12,390,006	38,064,491
Tax (expense) benefit on unrealized holding gains (losses) arising during the period	(2,636,939)	(2,518,769)	(4,336,502)	(13,322,572)
Unrealized holding gains (losses) arising during period, net of tax	4,897,172	4,677,714	8,053,504	24,741,919
Less reclassification adjustment for gains included in net income	(797,165)	(709,955)	(1,007,772)	(1,406,628)
Tax expense for gains included in net income	279,008	248,484	352,720	492,320
Reclassification adjustment for gains included in net income, net of tax	(518,157)	(461,471)	(655,052)	(914,308)
Subtotal: Other comprehensive income (loss), net of tax	4,379,015	4,216,243	7,398,452	23,827,611
Comprehensive income (loss)	4,545,336	4,565,217	4,941,047	24,791,839
Less comprehensive (income) loss attributable to noncontrolling interests	(32,485)	(29,663)	63,117	(75,636)
Comprehensive income (loss) attributable to UTG, Inc.	$ 4,512,851	$ 4,535,554	$ 5,004,164	$ 24,716,203

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2017		Sep. 30, 2016
Cash flows from operating activities:
Net income (loss) attributable to common shareholders	$ (2,394,288)		$ 888,592
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Amortization (accretion) of investments	191,820		(553,517)
Realized investment gains, net	(1,665,920)		(5,923,373)
Unrealized trading (gains) losses included in income	111,531		0
Realized trading (gains) included in income	(110,470)		0
Amortization of cost of insurance acquired	629,328		654,738
Depreciation	515,132		500,538
Net income (loss) attributable to noncontrolling interest	(63,117)		75,636
Charges for mortality and administration of universal life and annuity products	(4,982,000)		(2,116,902)
Interest credited to account balances	3,268,536		3,466,719
Change in accrued investment income	390,309		(152,822)
Change in reinsurance receivables	90,361		(22,291)
Change in policy liabilities and accruals	(988,645)		(1,897,222)
Change in income taxes receivable (payable)	(167,359)		(796,159)
Change in other assets and liabilities, net	(1,927,847)		603,671
Net cash used in operating activities	(7,102,629)		(5,272,392)
Proceeds from investments sold and matured:
Fixed maturities available for sale	17,036,549		26,829,015
Equity securities available for sale	3,401,217		4,506,115
Trading securities	0		72,279
Mortgage loans	860,187		3,482,189
Real estate	6,422,788		9,939,470
Notes receivable	2,035,706		2,778,401
Policy loans	1,481,824		1,465,996
Total proceeds from investments sold and matured	31,238,271		49,073,465
Cost of investments acquired:
Fixed maturities available for sale	(11,603,539)		(7,919,941)
Equity securities available for sale	(2,471,066)		(2,475,777)
Trading securities	0		(70,690)
Mortgage loans	(360,531)		(6,922,723)
Real estate	(2,473,761)		(11,937,317)
Notes receivable	(2,797,853)		(7,144,707)
Policy loans	(1,081,284)		(1,018,958)
Total cost of investments acquired	(20,788,034)		(37,490,113)
Net cash provided by investing activities	10,450,237		11,583,352
Cash flows from financing activities:
Policyholder contract deposits	3,641,050		407,633
Policyholder contract withdrawals	(3,733,565)		(3,434,052)
Proceeds from notes payable/line of credit	0		2,900,000
Payments of principal on notes payable/line of credit	(1,450,000)		0
Purchase of treasury stock	(396,628)		(5,296,904)
Issuance of stock	197,488		246,933
Non controlling contributions (distributions) of consolidated subsidiary	(772,754)		(123,016)
Net cash used in financing activities	(2,514,409)		(5,299,406)
Net increase in cash and cash equivalents	833,199		1,011,554
Cash and cash equivalents at beginning of period	15,156,548	[1]	11,822,615
Cash and cash equivalents at end of period	$ 15,989,747		$ 12,834,169

[1] Balance sheet audited at December 31, 2016.

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Basis of Presentation

9 Months Ended

Sep. 30, 2017

Basis of Presentation [Abstract]

Basis of Presentation

Note 1 – Basis of Presentation

The accompanying Condensed Consolidated Balance Sheet as of December 31, 2016, which has been derived from audited consolidated financial statements, and the unaudited interim Condensed Consolidated Financial Statements include the accounts of UTG, Inc. (the “Parent”) and its subsidiaries (collectively with the Parent, the “Company”).  All significant intercompany accounts and transactions have been eliminated in consolidation.  The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of regulation S-X.  Accordingly, they do not include all of the information and notes required by GAAP for audited annual financial statements.  The information furnished includes all adjustments and accruals of a normal recurring nature, which in the opinion of Management, are necessary for a fair presentation of the results for the interim periods.  The unaudited Condensed Consolidated Financial Statements included herein and these related notes should be read in conjunction with the Company’s consolidated financial statements, and the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.  The Company’s results of operations for the three and nine month periods ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017 or for any other future period.

This document at times will refer to the Registrant’s largest shareholder, Mr. Jesse T. Correll and certain companies controlled by Mr. Correll.  Mr. Correll holds a majority ownership of First Southern Funding, LLC (“FSF”), a Kentucky corporation, and First Southern Bancorp, Inc. (“FSBI”), a financial services holding company.  FSBI operates through its 100% owned subsidiary bank, First Southern National Bank (“FSNB”).  Banking activities are conducted through multiple locations within south-central and western Kentucky.  Mr. Correll is 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 September 30, 2017, Mr. Correll owns or controls directly and indirectly approximately  64.13% of UTG’s outstanding stock.

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

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Recently Issued Accounting Standards

9 Months Ended

Sep. 30, 2017

Recently Issued Accounting Standards [Abstract]

Recently Issued Accounting Standards

Note 2 – Recently Issued Accounting Standards

During the nine months ended September 30, 2017, there were no additions to or changes in the critical accounting policies disclosed in the 2016 Form 10-K.

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Investments

9 Months Ended

Sep. 30, 2017

Investments [Abstract]

Investments

Note 3 – Investments

Available for Sale Securities – Fixed Maturity and Equity Securities

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

Investments in available for sale securities are summarized as follows:

September 30, 2017	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	$	7,678,557	$	47,605	$	(67,183	)	$	7,658,979
U.S. special revenue and assessments		9,010,920		755,683		-			9,766,603
All other corporate bonds		149,195,785		19,913,522		(411,677	)		168,697,630
		165,885,262		20,716,810		(478,860	)		186,123,212
Equity securities		37,097,494		22,866,154		(385,620	)		59,578,028
Total	$	202,982,756	$	43,582,964	$	(864,480	)	$	245,701,240

December 31, 2016	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	$	9,058,210	$	74,581	$	(96,981	)	$	9,035,810
U.S. special revenue and assessments		10,145,531		1,002,789		(14,043	)		11,134,277
All other corporate bonds		151,392,119		17,234,691		(1,557,179	)		167,069,631
		170,595,860		18,312,061		(1,668,203	)		187,239,718
Equity securities		37,014,712		15,214,862		(522,471	)		51,707,103
Total	$	207,610,572	$	33,526,923	$	(2,190,674	)	$	238,946,821

The amortized cost and estimated market value of debt securities at September 30, 2017, 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 September 30, 2017	Amortized Cost		Estimated Fair Value
Due in one year or less	$	5,383,493	$	5,473,716
Due after one year through five years		29,857,885		41,316,685
Due after five years through ten years		44,110,567		48,479,332
Due after ten years		86,533,317		90,853,479
Total	$	165,885,262	$	186,123,212

The fair value of investments with sustained gross unrealized losses at September 30, 2017 and December 31, 2016 are as follows:

September 30, 2017	Less than 12 months					12 months or longer					Total
	Fair value		Unrealized losses			Fair value		Unrealized losses			Fair value		Unrealized losses
U.S. Government and govt. agencies and authorities	$	6,610,509	$	(67,183	)	$	-	$	-		$	6,610,509	$	(67,183	)
U.S. special revenue and assessments		-		-			-		-			-		-
All other corporate bonds		16,381,344		(234,288	)		5,357,880		(177,389	)		21,739,224		(411,677	)
Total fixed maturities	$	22,991,853	$	(301,471	)	$	5,357,880		(177,389	)	$	28,349,733		(478,860	)
Equity securities	$	5,260,992	$	(385,620	)	$	-	$	-		$	5,260,992	$	(385,620	)

December 31, 2016	Less than 12 months					12 months or longer					Total
	Fair value		Unrealized losses			Fair value		Unrealized losses			Fair value		Unrealized losses
U.S. Government and govt. agencies and authorities	$	6,578,248	$	(96,981	)	$	-	$	-		$	6,578,248	$	(96,981	)
U.S. special revenue and assessments		974,250		(14,043	)		-		-			974,250		(14,043	)
All other corporate bonds		50,161,487		(1,408,828	)		4,023,510		(148,351	)		54,184,997		(1,557,179	)
Total fixed maturities	$	57,713,985	$	(1,519,852	)	$	4,023,510		(148,351	)	$	61,737,495		(1,668,203	)
Equity securities	$	4,703,033	$	(522,471	)	$	-	$	-		$	4,703,033	$	(522,471	)

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

	Less than 12 months		12 months or longer		Total
As of September 30, 2017
Fixed maturities		11		3		14
Equity securities		4		-		4
As of December 31, 2016
Fixed maturities		25		3		28
Equity securities		3		-		3

Substantially all of the unrealized losses on fixed maturities available for sale and equity securities at  September 30, 2017 and December 31, 2016 are attributable to changes in market interest rates and general disruptions in the credit market subsequent to purchase.  The Company does not currently intend to sell nor does it expect to be required to sell any of the securities in an unrealized loss position.  Based upon the Company’s expected continuation of receipt of contractually required principal and interest payments and its intent and ability to retain the securities until price recovery, as well as the Company’s evaluation of other relevant factors, the Company deems these securities to be temporarily impaired as of  September 30, 2017 and December 31, 2016.

Other-Than-Temporary Impairments

The Company regularly reviews its investment securities for factors that may indicate that a decline in fair value of an investment is other than temporary.  The factors considered by Management in its regular review to identify and recognize other-than-temporary impairment losses on fixed maturities include, but are not limited to: the length of time and extent to which the fair value has been less than cost; the Company’s intent to sell, or be required to sell, the debt security before the anticipated recovery of its remaining amortized cost basis; the financial condition and near-term prospects of the issuer; adverse changes in ratings announced by one or more rating agencies; subordinated credit support, whether the issuer of a debt security has remained current on principal and interest payments; current expected cash flows; whether the decline in fair value appears to be issuer specific or, alternatively, a reflection of general market or industry conditions, including the effect of changes in market interest rates.  If the Company intends to sell a debt security, or it is more likely than not that it would be required to sell a debt security before the recovery of its amortized cost basis, the entire difference between the security’s amortized cost basis and its fair value at the balance sheet date would be recognized by a charge to other-than-temporary losses in the Condensed Consolidated Statements of Operations.

Equity securities may experience other-than-temporary impairments in the future based on the prospects for full recovery in value in a reasonable period of time and the Company’s ability and intent to hold the security to recovery.  If a decline in fair value is judged by Management to be other-than-temporary or Management does not have the intent or ability to hold a security, a loss is recognized by a charge to other-than-temporary impairment losses in the Condensed Consolidated Statements of Operations.

Management regularly reviews its real estate portfolio in comparison to appraisal valuations and current market conditions for indications of other-than-temporary impairments. If a decline in value is judged by Management to be other-than-temporary, a loss is recognized by a charge to other-than-temporary impairment losses in the Consolidated Statements of Operations.

Based on Management's review of the investment portfolio, the Company did not record any losses for other-than-temporary impairments in the Condensed Consolidated Statements of Operations for the three-month period ended September 30, 2017. The other-than-temporary impairment recognized during the first quarter of 2017 was recognized during the second quarter of 2017.  The Company did not recognize any losses for other-than-temporary impairments during the nine-month period ended September 30, 2017.

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 Condensed Consolidated Statements of Operations.  Trading securities include exchange-traded equities and exchange-traded options.  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.  The fair value of derivatives included in trading security assets and trading security liabilities as of   September 30, 2017 was $0 and $0, respectively. The fair value of derivatives included in trading security assets and trading security liabilities as of  December 31, 2016 was $2,500 and $(1,439), respectively.  Earnings from trading securities are classified in cash flows from operating activities. The derivatives held by the Company are for income generation purposes only.

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

	Three Months Ended
	September 30,
	2017		2016
Net unrealized gains (losses)	$	-	$	-
Net realized gains (losses)		-		-
Net unrealized and realized gains (losses)	$	-	$	-

	Nine Months Ended
	September 30,
	2017			2016
Net unrealized gains (losses)	$	(111,531	)	$	-
Net realized gains (losses)		110,470			-
Net unrealized and realized gains (losses)	$	(1,061	)	$	-

Mortgage Loans

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

Approximately 12% of the mortgage loan portfolio consists of discounted commercial mortgage loans as of September 30, 2017 and December 31, 2016. The Company began purchasing discounted commercial mortgage loans in 2009.  Management has extensive background and experience in the analysis and valuation of commercial real estate. The discounted loans are available through the FDIC’s sale of assets of closed banks and from banks wanting to reduce their loan portfolios.  The loans are available on a loan by loan bid process.  Once a loan has been acquired, contact is made with the appropriate individuals to begin a dialog with a goal of determining the borrower’s willingness to work together.  There are generally three paths a discounted loan will take:  the borrowers pay as required; a settlement is reached with the loan being paid off at a discounted value; or the loan is foreclosed.

During 2017 and 2016, the Company acquired $360,531 and $6,922,723 in mortgage loans, respectively, including both regular participation mortgage loans as well as discounted mortgage loans.  FSNB services the majority of the Company’s mortgage loan portfolio.  The Company pays FSNB a .25% servicing fee on these loans and a one-time fee at loan origination of .50% of the original loan cost to cover costs incurred by FSNB relating to the processing and establishment of the loan.

During 2017 and 2016, the maximum and minimum lending rates for mortgage loans were:

	2017						2016
	Maximum rate			Minimum rate			Maximum rate			Minimum rate
Farm Loans		5.00	%		5.00	%		5.00	%		5.00	%
Commercial Loans		8.50	%		3.94	%		8.00	%		4.00	%
Residential Loans		8.00	%		4.00	%		8.00	%		3.94	%

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

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

Changes in the current economy could have a negative impact on the loans, including the financial stability of the borrowers, the borrowers’ ability to pay or to refinance, the value of the property held as collateral and the ability to find purchasers at favorable prices.  Given the uncertainty of the current market, Management has taken a conservative approach with the discounted mortgage loans 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.  The Company records repayments on loans as discount accrual when the loan basis has been paid in full.

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 contract value, and believes that it will fully recover its carrying value upon disposal, therefore no reserve for delinquent loans is deemed necessary.  Those not currently paying are being vigorously worked by Management.  The current discounted commercial mortgage loan portfolio has an average price of  32% of face value as of September 30, 2017 and December 31, 2016.  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 September 30, 2017 and December 31, 2016.

The following table summarizes the number of loans held in the discounted mortgage loan portfolio and the carrying value of the loans:

September 30, 2017 Payment Frequency	Number of Loans		Carrying Value
No payments received		8	$	-
One-time payment received		1		-
Irregular payments received		2		20,834
Periodic payments received		5		2,090,929
Total		16	$	2,111,763

December 31, 2016 Payment Frequency	Number of Loans		Carrying Value
No payments received		8	$	-
One-time payment received		1		-
Irregular payments received		2		20,834
Periodic payments received		5		2,168,062
Total		16	$	2,188,896

The following table summarizes the mortgage loan holdings of the Company for the periods ended:

	September 30, 2017		December 31, 2016
In good standing	$	16,059,494	$	16,388,477
Overdue interest over 90 days		20,834		20,834
Restructured		52,827		60,827
In process of foreclosure		2,038,102		2,107,234
Total mortgage loans	$	18,171,257	$	18,577,372
Total foreclosed loans during the year	$	-	$	735,000

Investment Real Estate

Real estate acquired through foreclosure, consisting of properties obtained through foreclosure proceedings or acceptance of a deed in lieu of foreclosure, is reported on an individual asset basis at the lower of cost or fair value, less disposal costs. Fair value is determined on the basis of current appraisals, comparable sales, and other estimates of value obtained principally from independent sources. When properties are acquired through foreclosure, any excess of the loan balance at the time of foreclosure over the fair value of the real estate held as collateral is recognized and charged to the Consolidated Statements of Operations. Based upon Management’s evaluation of the real estate acquired through foreclosure, additional expense is recorded when necessary in an amount sufficient to reflect any declines in estimated fair value. Gains and losses recognized on the disposition of the properties are recorded as realized gains and losses in the Consolidated Statements of Operations.

Notes Receivable

Notes receivable represent collateral loans and promissory notes issued by the Company and are reported at their unpaid principal balances, adjusted for valuation allowances. Valuation allowances are established for impaired loans when it is probable that contractual principal and interest will not be collected. The valuation allowance as of  September 30, 2017 and December 31, 2016 was $0. Interest accruals are analyzed based on the likelihood of repayment.  The Company does not utilize a specified number of days delinquent to cause an automatic non-accrual status.

Before a new note is issued, the applicant is subject to certain criteria set forth by Company Management to ensure quality control.  Once the note is approved, the Company directly funds the note to the borrower. Several of the notes have participation agreements in place, whereas the Company has reduced its investment in the note receivable by participating a portion of the note to a third party.

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

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Fair Value Measurements

9 Months Ended

Sep. 30, 2017

Fair Value Measurements [Abstract]

Fair Value Measurements

Note 4 – Fair Value Measurements

The Company measures its assets and liabilities recorded at fair value in the Condensed Consolidated Balance Sheets based on the framework set forth in the GAAP fair value accounting guidance.  The framework establishes a fair value hierarchy of three levels based upon the transparency of information used in measuring the fair value of assets or liabilities as of the measurement date.  The fair value hierarchy prioritizes the inputs in the valuation techniques used to measure fair value into three categories.

Level 1 – Valuation is based upon quoted prices for identical assets or liabilities in active markets that the Company is able to access.  Level 1 fair value is not subject to valuation adjustments.

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

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

The Company determines the existence of an active market for an asset or liability based on its judgment as to whether transactions for the asset or liability occur in such market with sufficient frequency and volume to provide reliable pricing information.  If the Company concludes that there has been a significant decrease in the volume and level of activity for an investment in relation to normal market activity for such investment, adjustments to transactions and quoted prices are made to estimate fair value.

The inputs used in the valuation techniques employed by the Company are provided by nationally recognized pricing services, external investment managers and internal resources.  To assess these inputs, the Company’s review process includes, but is not limited to, quantitative analysis including benchmarking, initial and ongoing evaluations of methodologies used by external parties to calculate fair value, and ongoing evaluations of fair value estimates based on the Company’s knowledge and monitoring of market conditions.

The Company periodically reviews the pricing service provider’s policies and procedures for valuing securities.  The assumptions underlying the valuations from external service providers, including unobservable inputs, are generally not readily available as this information is often deemed proprietary.  Accordingly, the Company is unable to obtain comprehensive information regarding these assumptions and methodologies.

The Company’s investments in fixed maturity securities available for sale, equity securities available for sale and trading securities assets and liabilities are carried at fair value.  The following are the Company’s methodologies and valuation techniques for assets and liabilities measured at fair value.

Fixed maturities available for sale mainly consist of U.S. treasury securities and corporate debt securities. The Company employs a market approach to the valuation of securities where there are sufficient market transactions involving identical or comparable assets. If sufficient market data is not available for identical or comparable assets, the Company uses an income approach to valuation. The majority of the financial instruments included in fixed maturity securities available for sale are evaluated utilizing observable inputs; accordingly, they are categorized in either Level 1 or Level 2 of the fair value hierarchy. However, in instances where significant inputs utilized in valuation of the securities are unobservable, the securities are categorized in Level 3 of the fair value hierarchy.

Corporate securities primarily include fixed rate corporate bonds. Inputs utilized in connection with the Company’s valuation techniques relating to this class of securities include recently executed transactions, market price quotations, benchmark yields and issuer spreads. Corporate securities are categorized in Level 2 of the fair value hierarchy.

U.S. treasury securities are based on quoted prices in active markets and are generally categorized in Level 1 of the fair value hierarchy.

Equity securities available for sale consist of common and preferred stocks mainly in private equity investments, financial institutions and insurance companies. Equity securities for which there is sufficient market data are categorized as Level 1 or 2 in the fair value hierarchy.  For the equity securities in which quoted market prices are not available, the transaction price is used as the best estimate of fair value at inception.  When evidence is believed to support a change to the carrying value from the transaction price, adjustments are made to reflect the expected exit values. The Company performs ongoing reviews of the underlying investments. The reviews consist of the evaluations of expected cash flows, material events and market data. These investments are included in Level 3 of the fair value hierarchy.

Securities designated as trading securities consist of exchange traded equities and exchange traded options.  These securities are primarily valued at quoted active market prices, and are therefore categorized as Level 1 in the fair value hierarchy.

The following table presents the Company’s assets and liabilities measured at fair value in the Condensed Consolidated Balance Sheet on a recurring basis as of September 30, 2017.

	Level 1		Level 2		Level 3		Total
Assets
Fixed Maturities, available for sale	$	9,683,209	$	173,683,226	$	2,756,777	$	186,123,212
Equity Securities, available for sale		22,709,227		7,428,608		29,440,193		59,578,028
Total	$	32,392,436	$	181,111,834	$	32,196,970	$	245,701,240

The following table presents the Company’s assets and liabilities measured at fair value in the Condensed Consolidated Balance Sheet on a recurring basis as of December 31, 2016.

	Level 1		Level 2		Level 3		Total
Assets
Fixed Maturities, available for sale	$	9,035,810	$	175,120,657	$	3,083,251	$	187,239,718
Equity Securities, available for sale		19,360,394		6,553,410		25,793,299		51,707,103
Trading Securities		2,500		-		-		2,500
Total	$	28,398,704	$	181,674,067	$	28,876,550	$	238,949,321
Liabilities
Trading Securities	$	1,439	$	-	$	-	$	1,439

The following table provides reconciliations for Level 3 assets measured at fair value on a recurring basis. Transfers into and out of Level 3 are recognized as of the end of the quarter in which they occur.

	Fixed Maturities, Available for Sale			Equity Securities, Available for Sale			Total
Balance at December 31, 2016	$	3,083,251		$	25,793,299		$	28,876,550
Total unrealized gains (losses):
Included in realized gains (losses)		-			-			-
Included in other comprehensive income		702,375			2,640,392			3,342,767
Purchases		-			2,114,307			2,114,307
Sales		(1,028,849	)		(1,107,805	)		(2,136,654	)
Balance at September 30, 2017	$	2,756,777		$	29,440,193		$	32,196,970

The Level 3 securities include collateralized debt obligations of trust preferred securities issued by banks and insurance companies and certain equity securities with unobservable inputs. The Company computed fair value of Level 3 equity investments based on a review of current financial information, earnings trends and similar companies in the same industries.

There were no transfers in or out of Level 3 as of September 30, 2017.  Transfers occur when there is a lack of observable market information.

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

The carrying values and estimated fair values of certain of the Company’s financial instruments not recorded at fair value in the Consolidated Balance Sheets are shown below. Because the fair value for all Consolidated Balance Sheet items are not required to be disclosed, the aggregate fair value amounts presented below are not reflective of the underlying value of the Company.

	September 30, 2017				December 31, 2016
Assets	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Mortgage loans on real estate	$	18,171,257	$	18,171,257	$	18,577,372	$	18,577,372
Investment real estate		52,637,677		52,637,677		57,138,980		57,138,980
Notes receivable		17,638,632		17,638,632		16,876,485		16,876,485
Policy loans		9,669,594		9,669,594		10,070,134		10,070,134
Cash and cash equivalents		15,989,747		15,989,747		15,156,548		15,156,548

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

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

A portion of the mortgage loans balance consists of discounted mortgage loans. The Company has been purchasing non-performing discounted mortgage 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, which Management believes approximates fair value.  The inputs used to measure the fair value of our discounted mortgage loans are classified as Level 3 within the fair value hierarchy.

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

Notes receivable are carried at their unpaid principal balances, which approximates fair value. The inputs used to measure the fair value of the loans are classified as Level 3 within the fair value hierarchy.

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

The carrying amount of cash and cash equivalents in the Consolidated Balance Sheets approximates fair value given the highly liquid nature of the instruments.  The inputs used to measure the fair value of our cash and cash equivalents are classified as Level 1 within the fair value hierarchy.

The carrying amount of short term investments in the Consolidated Balance Sheets approximates fair value.  The inputs used to measure the fair value of our short term investments are classified as Level 3 within the fair value hierarchy.

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

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Credit Arrangements

9 Months Ended

Sep. 30, 2017

Credit Arrangements [Abstract]

Credit Arrangements

Note 5 – Credit Arrangements

At September 30, 2017 and December 31, 2016, the Company had the following outstanding debt:

			Outstanding Principal Balance
Instrument	Issue Date	Maturity Date	September 30, 2017		December 31, 2016
Promissory Note:
SoftVest, LP	7/22/2016	7/22/2018	$	725,000	$	1,450,000
SoftSearch Investment, L.P.	7/22/2016	7/22/2018		725,000		1,450,000

Instrument	Issue Date	Maturity Date	Revolving Credit Limit		December 31, 2016		Borrowings		Repayments		September 30, 2017
Lines of Credit:
UTG	11/20/2013	11/20/2018	$	8,000,000	$	-		-		-	$	-
UG	6/2/2015	5/10/2018		10,000,000		-		-		-		-

The UTG line of credit carries interest at a fixed rate of  4.00% and is payable monthly. As collateral, UTG has pledged 100% of the common voting stock of its wholly owned subsidiary, Universal Guaranty Life Insurance Company (“UG”).  The Company is currently in the process of renewing this line of credit.

During May of 2017, the Federal Home Loan Bank approved UG’s Cash Management Advance Application (“CMA”). The CMA gives the Company the option of selecting a variable rate of interest for up to 90 days or a fixed rate for a maximum of 30 days. The variable rate CMA is prepayable at any time without a fee, while the fixed CMA is not prepayable prior to maturity. The Company is currently in the process of renewing the CMA.

On July 22, 2016, the Company entered in to an agreement to acquire 300,000 shares of its outstanding common stock from a shareholder that owned approximately 8% of the Company’s outstanding common stock.  The acquisition was made under the Company’s stock buy-back program. As part of this transaction, two promissory notes totaling $2.9 million were issued. The notes require principal payments of one half of the note value to be paid one year from the date of purchase and the other one half to be paid two years from the date of purchase. The notes bear interest at 0%.  During April of 2017, the Company paid $725,000 on the outstanding principal balance of each promissory note.

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Shareholders' Equity

9 Months Ended

Sep. 30, 2017

Shareholders' Equity [Abstract]

Shareholders' Equity

Note 6 – Shareholders’ Equity

Stock Repurchase Program – The Board of Directors of UTG has authorized the repurchase in the open market or in privately negotiated transactions of UTG's common stock. At a meeting of the Board of Directors on June 15, 2016, the Board of Directors of UTG authorized the repurchase of up to an additional $2 millionof UTG’s common stock and on July 14, 2016, the Board of Directors again increased the amount available by an additional $4.5 million, for a total repurchase of $14.5million. Repurchased shares are available for future issuance for general corporate purposes. Company Management has broad authority to operate the program, including the discretion of whether to purchase shares and the ability to suspend or terminate the program. Open market purchases are made based on the last available market price but may be limited.  During the nine month period ended September 30, 2017, the Company repurchased approximately 21,400shares through the stock repurchase program for approximately $397,000. Through September 30, 2017, UTG has spent approximately $12.3million in the acquisition of approximately 1,080,000shares under this program.

During 2017, the Company issued approximately 11,000 shares of stock to Management as compensation. These awards are determined at the discretion of the Board of Directors.

Earnings Per Share Calculations

Earnings per share are based on the weighted average number of common shares outstanding during each period.  For the three and nine months ended September 30, 2017 and 2016, 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

9 Months Ended

Sep. 30, 2017

Commitments and Contingencies [Abstract]

Commitments and Contingencies

Note 7 – Commitments and Contingencies

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

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

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. All trading securities were settled during the first quarter of 2017.

The following table represents the total funding commitments and the unfunded commitment as of September 30, 2017 related to certain investments:

	Total Funding Commitment		Unfunded Commitment
RLF III, LLC	$	4,000,000	$	398,120
Sovereign’s Capital, LP Fund I		500,000		33,642
UGLIC, LLC		1,600,000		120,000
Sovereign's Capital, LP Fund II		1,000,000		410,301
Barton Springs Music, LLC		2,500,000		1,339,063
Master Mineral Holdings II, LP		4,122,167		556,286

During 2006, the Company committed to invest in RLF III, LLC (“RLF”), which makes land-based investments in undervalued assets. RLF makes capital calls as funds are needed for continued land purchases.

During 2012, the Company committed to invest in Sovereign’s Capital, LP Fund I (“Sovereign’s”), which invests in companies in emerging markets. Sovereign’s makes capital calls to investors as funds are needed.

During 2014, the Company committed to invest in UGLIC, LLC, which purchases real estate tax receivables.  UGLIC, LLC makes capital calls as funds are needed for additional purchases.

During 2015, the Company committed to invest in Sovereign’s Capital, LP Fund II (“Sovereign’s II”), which invests in companies in emerging markets. Sovereign’s II makes capital calls to investors as funds are needed.

During 2016, the Company made a commitment to invest in Barton Springs Music, LLC (“Barton”), which invests in music royalties.  Barton makes capital calls to its investors as funds are needed to acquire the royalty rights.

During 2016, the Company made a commitment to invest in Master Mineral Holdings II, LP (“MMH”), which purchases land for leasing opportunities to those looking to harvest natural resources.  MMH makes capital calls to its investors as funds are needed for continued land purchases.

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Other Cash Flow Disclosures

9 Months Ended

Sep. 30, 2017

Other Cash Flow Disclosures [Abstract]

Other Cash Flow Disclosures

Note 8 – Other Cash Flow Disclosures

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

	Three Months Ended
	September 30,
	2017		2016
Interest	$	-	$	-
Federal income tax		20,000		33,000

	Nine Months Ended
	September 30,
	2017		2016
Interest	$	-	$	-
Federal income tax		175,000		768,000

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Concentrations of Credit Risk

9 Months Ended

Sep. 30, 2017

Concentrations of Credit Risk [Abstract]

Concentrations of Credit Risk

Note 9 – Concentrations of Credit Risk

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

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Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2017

Basis of Presentation [Abstract]

Basis of Presentation

The accompanying Condensed Consolidated Balance Sheet as of December 31, 2016, which has been derived from audited consolidated financial statements, and the unaudited interim Condensed Consolidated Financial Statements include the accounts of UTG, Inc. (the “Parent”) and its subsidiaries (collectively with the Parent, the “Company”).  All significant intercompany accounts and transactions have been eliminated in consolidation.  The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of regulation S-X.  Accordingly, they do not include all of the information and notes required by GAAP for audited annual financial statements.  The information furnished includes all adjustments and accruals of a normal recurring nature, which in the opinion of Management, are necessary for a fair presentation of the results for the interim periods.  The unaudited Condensed Consolidated Financial Statements included herein and these related notes should be read in conjunction with the Company’s consolidated financial statements, and the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.  The Company’s results of operations for the three and nine month periods ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017 or for any other future period.

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Recently Issued Accounting Standards (Policies)

9 Months Ended

Sep. 30, 2017

Recently Issued Accounting Standards [Abstract]

Recently Issued Accounting Standards

During the nine months ended September 30, 2017, there were no additions to or changes in the critical accounting policies disclosed in the 2016 Form 10-K.

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Investments (Tables)

9 Months Ended

Sep. 30, 2017

Investments [Abstract]

Available for Sale Securities

Investments in available for sale securities are summarized as follows:

September 30, 2017	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	$	7,678,557	$	47,605	$	(67,183	)	$	7,658,979
U.S. special revenue and assessments		9,010,920		755,683		-			9,766,603
All other corporate bonds		149,195,785		19,913,522		(411,677	)		168,697,630
		165,885,262		20,716,810		(478,860	)		186,123,212
Equity securities		37,097,494		22,866,154		(385,620	)		59,578,028
Total	$	202,982,756	$	43,582,964	$	(864,480	)	$	245,701,240

December 31, 2016	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	$	9,058,210	$	74,581	$	(96,981	)	$	9,035,810
U.S. special revenue and assessments		10,145,531		1,002,789		(14,043	)		11,134,277
All other corporate bonds		151,392,119		17,234,691		(1,557,179	)		167,069,631
		170,595,860		18,312,061		(1,668,203	)		187,239,718
Equity securities		37,014,712		15,214,862		(522,471	)		51,707,103
Total	$	207,610,572	$	33,526,923	$	(2,190,674	)	$	238,946,821

Debt Securities by Contractual Maturity

The amortized cost and estimated market value of debt securities at September 30, 2017, 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 September 30, 2017	Amortized Cost		Estimated Fair Value
Due in one year or less	$	5,383,493	$	5,473,716
Due after one year through five years		29,857,885		41,316,685
Due after five years through ten years		44,110,567		48,479,332
Due after ten years		86,533,317		90,853,479
Total	$	165,885,262	$	186,123,212

Fair Value of Investments with Sustained Gross Unrealized Losses

The fair value of investments with sustained gross unrealized losses at September 30, 2017 and December 31, 2016 are as follows:

September 30, 2017	Less than 12 months					12 months or longer					Total
	Fair value		Unrealized losses			Fair value		Unrealized losses			Fair value		Unrealized losses
U.S. Government and govt. agencies and authorities	$	6,610,509	$	(67,183	)	$	-	$	-		$	6,610,509	$	(67,183	)
U.S. special revenue and assessments		-		-			-		-			-		-
All other corporate bonds		16,381,344		(234,288	)		5,357,880		(177,389	)		21,739,224		(411,677	)
Total fixed maturities	$	22,991,853	$	(301,471	)	$	5,357,880		(177,389	)	$	28,349,733		(478,860	)
Equity securities	$	5,260,992	$	(385,620	)	$	-	$	-		$	5,260,992	$	(385,620	)

December 31, 2016	Less than 12 months					12 months or longer					Total
	Fair value		Unrealized losses			Fair value		Unrealized losses			Fair value		Unrealized losses
U.S. Government and govt. agencies and authorities	$	6,578,248	$	(96,981	)	$	-	$	-		$	6,578,248	$	(96,981	)
U.S. special revenue and assessments		974,250		(14,043	)		-		-			974,250		(14,043	)
All other corporate bonds		50,161,487		(1,408,828	)		4,023,510		(148,351	)		54,184,997		(1,557,179	)
Total fixed maturities	$	57,713,985	$	(1,519,852	)	$	4,023,510		(148,351	)	$	61,737,495		(1,668,203	)
Equity securities	$	4,703,033	$	(522,471	)	$	-	$	-		$	4,703,033	$	(522,471	)

Securities in Continuous Unrealized Loss Position

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

	Less than 12 months		12 months or longer		Total
As of September 30, 2017
Fixed maturities		11		3		14
Equity securities		4		-		4
As of December 31, 2016
Fixed maturities		25		3		28
Equity securities		3		-		3

Trading Revenue Charged to Investment Income from Trading Securities

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

	Three Months Ended
	September 30,
	2017		2016
Net unrealized gains (losses)	$	-	$	-
Net realized gains (losses)		-		-
Net unrealized and realized gains (losses)	$	-	$	-

	Nine Months Ended
	September 30,
	2017			2016
Net unrealized gains (losses)	$	(111,531	)	$	-
Net realized gains (losses)		110,470			-
Net unrealized and realized gains (losses)	$	(1,061	)	$	-

Maximum and Minimum Lending Rates for Mortgage Loans

During 2017 and 2016, the maximum and minimum lending rates for mortgage loans were:

	2017						2016
	Maximum rate			Minimum rate			Maximum rate			Minimum rate
Farm Loans		5.00	%		5.00	%		5.00	%		5.00	%
Commercial Loans		8.50	%		3.94	%		8.00	%		4.00	%
Residential Loans		8.00	%		4.00	%		8.00	%		3.94	%

Loans Held in Discounted Mortgage Loan Portfolio

The following table summarizes the number of loans held in the discounted mortgage loan portfolio and the carrying value of the loans:

September 30, 2017 Payment Frequency	Number of Loans		Carrying Value
No payments received		8	$	-
One-time payment received		1		-
Irregular payments received		2		20,834
Periodic payments received		5		2,090,929
Total		16	$	2,111,763

December 31, 2016 Payment Frequency	Number of Loans		Carrying Value
No payments received		8	$	-
One-time payment received		1		-
Irregular payments received		2		20,834
Periodic payments received		5		2,168,062
Total		16	$	2,188,896

Mortgage Loans

The following table summarizes the mortgage loan holdings of the Company for the periods ended:

	September 30, 2017		December 31, 2016
In good standing	$	16,059,494	$	16,388,477
Overdue interest over 90 days		20,834		20,834
Restructured		52,827		60,827
In process of foreclosure		2,038,102		2,107,234
Total mortgage loans	$	18,171,257	$	18,577,372
Total foreclosed loans during the year	$	-	$	735,000

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2017

Fair Value Measurements [Abstract]

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the Company’s assets and liabilities measured at fair value in the Condensed Consolidated Balance Sheet on a recurring basis as of September 30, 2017.

	Level 1		Level 2		Level 3		Total
Assets
Fixed Maturities, available for sale	$	9,683,209	$	173,683,226	$	2,756,777	$	186,123,212
Equity Securities, available for sale		22,709,227		7,428,608		29,440,193		59,578,028
Total	$	32,392,436	$	181,111,834	$	32,196,970	$	245,701,240

The following table presents the Company’s assets and liabilities measured at fair value in the Condensed Consolidated Balance Sheet on a recurring basis as of December 31, 2016.

	Level 1		Level 2		Level 3		Total
Assets
Fixed Maturities, available for sale	$	9,035,810	$	175,120,657	$	3,083,251	$	187,239,718
Equity Securities, available for sale		19,360,394		6,553,410		25,793,299		51,707,103
Trading Securities		2,500		-		-		2,500
Total	$	28,398,704	$	181,674,067	$	28,876,550	$	238,949,321
Liabilities
Trading Securities	$	1,439	$	-	$	-	$	1,439

Reconciliation for Level 3 Assets Measured at Fair Value on a Recurring Basis

The following table provides reconciliations for Level 3 assets measured at fair value on a recurring basis. Transfers into and out of Level 3 are recognized as of the end of the quarter in which they occur.

	Fixed Maturities, Available for Sale			Equity Securities, Available for Sale			Total
Balance at December 31, 2016	$	3,083,251		$	25,793,299		$	28,876,550
Total unrealized gains (losses):
Included in realized gains (losses)		-			-			-
Included in other comprehensive income		702,375			2,640,392			3,342,767
Purchases		-			2,114,307			2,114,307
Sales		(1,028,849	)		(1,107,805	)		(2,136,654	)
Balance at September 30, 2017	$	2,756,777		$	29,440,193		$	32,196,970

Carrying Values and Estimated Fair Values of Financial Instruments not Recorded at Fair Value

The carrying values and estimated fair values of certain of the Company’s financial instruments not recorded at fair value in the Consolidated Balance Sheets are shown below. Because the fair value for all Consolidated Balance Sheet items are not required to be disclosed, the aggregate fair value amounts presented below are not reflective of the underlying value of the Company.

	September 30, 2017				December 31, 2016
Assets	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Mortgage loans on real estate	$	18,171,257	$	18,171,257	$	18,577,372	$	18,577,372
Investment real estate		52,637,677		52,637,677		57,138,980		57,138,980
Notes receivable		17,638,632		17,638,632		16,876,485		16,876,485
Policy loans		9,669,594		9,669,594		10,070,134		10,070,134
Cash and cash equivalents		15,989,747		15,989,747		15,156,548		15,156,548

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Credit Arrangements (Tables)

9 Months Ended

Sep. 30, 2017

Credit Arrangements [Abstract]

Promissory Notes

At September 30, 2017 and December 31, 2016, the Company had the following outstanding debt:

			Outstanding Principal Balance
Instrument	Issue Date	Maturity Date	September 30, 2017		December 31, 2016
Promissory Note:
SoftVest, LP	7/22/2016	7/22/2018	$	725,000	$	1,450,000
SoftSearch Investment, L.P.	7/22/2016	7/22/2018		725,000		1,450,000

Lines of Credit

Instrument	Issue Date	Maturity Date	Revolving Credit Limit		December 31, 2016		Borrowings		Repayments		September 30, 2017
Lines of Credit:
UTG	11/20/2013	11/20/2018	$	8,000,000	$	-		-		-	$	-
UG	6/2/2015	5/10/2018		10,000,000		-		-		-		-

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2017

Commitments and Contingencies [Abstract]

Total Funding Commitments and Unfunded Commitment

The following table represents the total funding commitments and the unfunded commitment as of September 30, 2017 related to certain investments:

	Total Funding Commitment		Unfunded Commitment
RLF III, LLC	$	4,000,000	$	398,120
Sovereign’s Capital, LP Fund I		500,000		33,642
UGLIC, LLC		1,600,000		120,000
Sovereign's Capital, LP Fund II		1,000,000		410,301
Barton Springs Music, LLC		2,500,000		1,339,063
Master Mineral Holdings II, LP		4,122,167		556,286

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Other Cash Flow Disclosures (Tables)

9 Months Ended

Sep. 30, 2017

Other Cash Flow Disclosures [Abstract]

Expenses Paid on a Cash Basis

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

	Three Months Ended
	September 30,
	2017		2016
Interest	$	-	$	-
Federal income tax		20,000		33,000

	Nine Months Ended
	September 30,
	2017		2016
Interest	$	-	$	-
Federal income tax		175,000		768,000

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Basis of Presentation (Details)	9 Months Ended
	Sep. 30, 2017
Subsidiary or Equity Method Investee [Line Items]
Ownership in subsidiary bank	100.00%
Related Party Disclosure [Line Items]
Ownership or control of outstanding common stock directly or indirectly	64.13%

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Investments, Available for Sale Securities (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Fixed maturities [Abstract]
Original or amortized cost	$ 165,885,262	$ 170,595,860
Gross unrealized gains	20,716,810	18,312,061
Gross unrealized losses	(478,860)	(1,668,203)
Estimated fair value	186,123,212	187,239,718	[1]
Equity securities [Abstract]
Original or amortized cost	37,097,494	37,014,712
Gross unrealized gains	22,866,154	15,214,862
Gross unrealized losses	(385,620)	(522,471)
Estimated fair value	59,578,028	51,707,103	[1]
Total [Abstract]
Original or amortized cost	202,982,756	207,610,572
Gross unrealized gains	43,582,964	33,526,923
Gross unrealized losses	(864,480)	(2,190,674)
Estimated fair value	245,701,240	238,946,821
U.S. Government and Government Agencies and Authorities [Member]
Fixed maturities [Abstract]
Original or amortized cost	7,678,557	9,058,210
Gross unrealized gains	47,605	74,581
Gross unrealized losses	(67,183)	(96,981)
Estimated fair value	7,658,979	9,035,810
US Special Revenue and Assessments [Member]
Fixed maturities [Abstract]
Original or amortized cost	9,010,920	10,145,531
Gross unrealized gains	755,683	1,002,789
Gross unrealized losses	0	(14,043)
Estimated fair value	9,766,603	11,134,277
All Other Corporate Bonds [Member]
Fixed maturities [Abstract]
Original or amortized cost	149,195,785	151,392,119
Gross unrealized gains	19,913,522	17,234,691
Gross unrealized losses	(411,677)	(1,557,179)
Estimated fair value	$ 168,697,630	$ 167,069,631

[1] Balance sheet audited at December 31, 2016.

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Investments, Debt Securities by Contractual Maturity (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Amortized cost of debt securities, by contractual maturity [Abstract]
Due in one year or less	$ 5,383,493
Due after one year through five years	29,857,885
Due after five years through ten years	44,110,567
Due after ten years	86,533,317
Original or amortized cost	165,885,262	$ 170,595,860
Estimated fair value of debt securities, by contractual maturity [Abstract]
Due in one year or less	5,473,716
Due after one year through five years	41,316,685
Due after five years through ten years	48,479,332
Due after ten years	90,853,479
Estimated fair value	$ 186,123,212	$ 187,239,718	[1]

[1] Balance sheet audited at December 31, 2016.

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Investments, Securities in Continuous Unrealized Loss Position (Details)	9 Months Ended	12 Months Ended
	Sep. 30, 2017 USD ($) Security	Dec. 31, 2016 USD ($) Security
U.S. Government and Government Agencies and Authorities [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months, fair value	$ 6,610,509	$ 6,578,248
Less than 12 months, unrealized losses	(67,183)	(96,981)
12 months or longer, fair value	0	0
12 months or longer, unrealized losses	0	0
Total fair value	6,610,509	6,578,248
Total unrealized losses	(67,183)	(96,981)
US Special Revenue and Assessments [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months, fair value	0	974,250
Less than 12 months, unrealized losses	0	(14,043)
12 months or longer, fair value	0	0
12 months or longer, unrealized losses	0	0
Total fair value	0	974,250
Total unrealized losses	0	(14,043)
Debt Securities [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months, fair value	22,991,853	57,713,985
Less than 12 months, unrealized losses	(301,471)	(1,519,852)
12 months or longer, fair value	5,357,880	4,023,510
12 months or longer, unrealized losses	(177,389)	(148,351)
Total fair value	28,349,733	61,737,495
Total unrealized losses	$ (478,860)	$ (1,668,203)
Less than 12 months, number of securities | Security	11	25
Twelve months or longer, number of securities | Security	3	3
Total number of securities | Security	14	28
Equity Securities [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months, fair value	$ 5,260,992	$ 4,703,033
Less than 12 months, unrealized losses	(385,620)	(522,471)
12 months or longer, fair value	0	0
12 months or longer, unrealized losses	0	0
Total fair value	5,260,992	4,703,033
Total unrealized losses	$ (385,620)	$ (522,471)
Less than 12 months, number of securities | Security	4	3
Twelve months or longer, number of securities | Security	0	0
Total number of securities | Security	4	3
All Other Corporate Bonds [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months, fair value	$ 16,381,344	$ 50,161,487
Less than 12 months, unrealized losses	(234,288)	(1,408,828)
12 months or longer, fair value	5,357,880	4,023,510
12 months or longer, unrealized losses	(177,389)	(148,351)
Total fair value	21,739,224	54,184,997
Total unrealized losses	$ (411,677)	$ (1,557,179)

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Investments, Other-than-Temporary Impairments (Details) - USD ($)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Other than Temporary Impairment Losses, Investments, Available-for-sale Securities [Abstract]
Other than temporary impairments:	$ 0	$ 0

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Investments, Trading Securities (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Trading Securities [Abstract]
The fair value of derivatives included in trading security assets	$ 0		$ 0		$ 2,500
The fair value of derivatives included in trading security liabilities	0		0		$ (1,439)
Net unrealized gains (losses)	0	$ 0	(111,531)	$ 0
Net realized gains (losses)	0	0	110,470	0
Net unrealized and realized gains (losses)	$ 0	$ 0	$ (1,061)	$ 0

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Investments, Mortgage Loans, Investment Real Estate, and Notes Receivable (Details)	9 Months Ended	12 Months Ended
	Sep. 30, 2017 USD ($) Loan	Dec. 31, 2016 USD ($) Loan
Loans and Leases Receivable Disclosure [Line Items]
Discounted mortgage loans	12.00%
Mortgage loans acquired, including discounted mortgage loans	$ 360,531	$ 6,922,723
Servicing fee on loan	0.25%
Loan origination	0.50%
Loan limit threshold for appraised property value	80.00%
Average purchase price to outstanding loan	32.00%	32.00%
Mortgage loans reserve	$ 0	$ 0
Discounted mortgage loan portfolio payment performance [Abstract]
Number of discounted loans with no payments | Loan	8	8
Number of discounted loans one time payment received | Loan	1	1
Number of discounted loans irregular payments received | Loan	2	2
Number of discounted loans periodic payments received | Loan	5	5
Number of discounted loans | Loan	16	16
Discounted loans with no payments	$ 0	$ 0
Discounted loans with one time payment received	0	0
Discounted loans with irregular payments received	20,834	20,834
Discounted loans with periodic payments received	2,090,929	2,168,062
Discounted loans	2,111,763	2,188,896
Discounted mortgage loan holdings [Abstract]
In good standing	16,059,494	16,388,477
Overdue interest over 90 days	20,834	20,834
Restructured	52,827	60,827
In process of foreclosure	2,038,102	2,107,234
Total mortgage loans	18,171,257	18,577,372	[1]
Total foreclosed loans during the year	0	735,000
Notes Receivable [Abstract]
Valuation allowance	$ 0	$ 0
Farm Loans [Member] | Maximum [Member]
Loans and Leases Receivable Disclosure [Line Items]
Interest rate on mortgage loans	5.00%	5.00%
Farm Loans [Member] | Minimum [Member]
Loans and Leases Receivable Disclosure [Line Items]
Interest rate on mortgage loans	5.00%	5.00%
Commercial Loans [Member] | Maximum [Member]
Loans and Leases Receivable Disclosure [Line Items]
Interest rate on mortgage loans	8.50%	8.00%
Commercial Loans [Member] | Minimum [Member]
Loans and Leases Receivable Disclosure [Line Items]
Interest rate on mortgage loans	3.94%	4.00%
Residential Loans [Member] | Maximum [Member]
Loans and Leases Receivable Disclosure [Line Items]
Interest rate on mortgage loans	8.00%	8.00%
Residential Loans [Member] | Minimum [Member]
Loans and Leases Receivable Disclosure [Line Items]
Interest rate on mortgage loans	4.00%	3.94%

[1] Balance sheet audited at December 31, 2016.

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Fair Value Measurements, Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Assets [Abstract]
Fixed Maturities, available for sale	$ 186,123,212	$ 187,239,718	[1]
Equity Securities, available for sale	59,578,028	51,707,103	[1]
Trading Securities	0	2,500	[1]
Liabilities [Abstract]
Trading Securities	0	1,439
Measured on a Recurring Basis [Member]
Assets [Abstract]
Fixed Maturities, available for sale	186,123,212	187,239,718
Equity Securities, available for sale	59,578,028	51,707,103
Trading Securities		2,500
Total	245,701,240	238,949,321
Liabilities [Abstract]
Trading Securities		1,439
Measured on a Recurring Basis [Member] | Level 1 [Member]
Assets [Abstract]
Fixed Maturities, available for sale	9,683,209	9,035,810
Equity Securities, available for sale	22,709,227	19,360,394
Trading Securities		2,500
Total	32,392,436	28,398,704
Liabilities [Abstract]
Trading Securities		1,439
Measured on a Recurring Basis [Member] | Level 2 [Member]
Assets [Abstract]
Fixed Maturities, available for sale	173,683,226	175,120,657
Equity Securities, available for sale	7,428,608	6,553,410
Trading Securities		0
Total	181,111,834	181,674,067
Liabilities [Abstract]
Trading Securities		0
Measured on a Recurring Basis [Member] | Level 3 [Member]
Assets [Abstract]
Fixed Maturities, available for sale	2,756,777	3,083,251
Equity Securities, available for sale	29,440,193	25,793,299
Trading Securities		0
Total	$ 32,196,970	28,876,550
Liabilities [Abstract]
Trading Securities		$ 0

[1] Balance sheet audited at December 31, 2016.

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Fair Value Measurements, Reconciliation for Level 3 Assets Measured at Fair Value on a Recurring Basis (Details)	9 Months Ended
	Sep. 30, 2017 USD ($)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	$ 28,876,550
Total unrealized gain (losses) [Abstract]
Included in realized gains (losses)	0
Included in other comprehensive income	3,342,767
Purchases	2,114,307
Sales	(2,136,654)
Ending Balance	32,196,970
Fixed Maturities [Member] | Available-for-sale Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	3,083,251
Total unrealized gain (losses) [Abstract]
Included in realized gains (losses)	0
Included in other comprehensive income	702,375
Purchases	0
Sales	(1,028,849)
Ending Balance	2,756,777
Equity Securities [Member] | Available-for-sale Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	25,793,299
Total unrealized gain (losses) [Abstract]
Included in realized gains (losses)	0
Included in other comprehensive income	2,640,392
Purchases	2,114,307
Sales	(1,107,805)
Ending Balance	$ 29,440,193

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Fair Value Measurements, Carrying Values and Estimated Fair Values of Financial Instruments not Recorded at Fair Value (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016		Sep. 30, 2016	Dec. 31, 2015
Carrying Amount [Member]
Assets [Abstract]
Mortgage loans on real estate	$ 18,171,257	$ 18,577,372
Investment real estate	52,637,677	57,138,980
Notes receivable	17,638,632	16,876,485
Policy loans	9,669,594	10,070,134
Cash and cash equivalents	15,989,747	15,156,548
Estimated Fair Value [Member]
Assets [Abstract]
Mortgage loans on real estate	18,171,257	18,577,372
Investment real estate	52,637,677	57,138,980
Notes receivable	17,638,632	16,876,485
Policy loans	9,669,594	10,070,134
Cash and cash equivalents	15,989,747	15,156,548
Mortgage loans on real estate	18,171,257	18,577,372	[1]
Investment real estate	52,637,677	57,138,980	[1]
Policy loans	9,669,594	10,070,134	[1]
Cash and cash equivalents	$ 15,989,747	$ 15,156,548	[1]	$ 12,834,169	$ 11,822,615
Minimum [Member]
Liabilities [Abstract]
Policy loan interest rate	4.00%
Maximum [Member]
Liabilities [Abstract]
Policy loan interest rate	8.00%

[1] Balance sheet audited at December 31, 2016.

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Credit Arrangements, Outstanding Debt (Details) - USD ($)	9 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Variable Rate [Member] | Maximum [Member]
Line of Credit Facility [Line Items]
Period of interest under CMA	90 days
Fixed Rate [Member] | Maximum [Member]
Line of Credit Facility [Line Items]
Period of interest under CMA	30 days
SoftVest L P 2018-07-22 [Member]
Debt Instrument [Line Items]
Issue Date	Jul. 22, 2016
Maturity Date	Jul. 22, 2018
Outstanding Principal Balance	$ 725,000	$ 1,450,000
SoftSearch Investment L P 2018-07-22 [Member]
Debt Instrument [Line Items]
Issue Date	Jul. 22, 2016
Maturity Date	Jul. 22, 2018
Outstanding Principal Balance	$ 725,000	1,450,000
UTG 2013-11-20 [Member]
Line of Credit Facility [Line Items]
Issue Date	Nov. 20, 2013
Maturity Date	Nov. 20, 2018
Revolving Credit Limit	$ 8,000,000
Outstanding Balance	0	0
Borrowings	0
Repayments	$ 0
Interest Rate	4.00%
Assets Pledged	100% of the common voting stock of its wholly owned subsidiary, Universal Guaranty Life Insurance Company (“UG”).
UG Avalon 2015-06-02 [Member] | UG [Member]
Line of Credit Facility [Line Items]
Issue Date	Jun. 02, 2015
Maturity Date	May 10, 2018
Revolving Credit Limit	$ 10,000,000
Outstanding Balance	0	$ 0
Borrowings	0
Repayments	$ 0

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Credit Arrangements, Stock Buy-Back Program (Details)		1 Months Ended	9 Months Ended
	Jul. 22, 2016 USD ($) Note shares	Apr. 30, 2017 USD ($)	Sep. 30, 2017 USD ($) shares	Sep. 30, 2016 USD ($)
Stock Repurchase Program [Abstract]
Treasury stock shares acquired (in shares) | shares			21,400
Repayments			$ 1,450,000	$ 0
SoftVest L P [Member]
Stock Repurchase Program [Abstract]
Repayments		$ 725,000
SoftSearch Investment L P [Member]
Stock Repurchase Program [Abstract]
Repayments		$ 725,000
Stock Buy-Back Program [Member]
Stock Repurchase Program [Abstract]
Treasury stock shares acquired (in shares) | shares	300,000
% of shares owned by shareholder	8.00%
Stock Buy-Back Program [Member] | Promissory Notes [Member]
Stock Repurchase Program [Abstract]
Number of promissory notes issued | Note	2
Face amount of debt instruments issued	$ 2,900,000
Interest rate	0.00%
Stock Buy-Back Program [Member] | Promissory Notes [Member] | First Half of Note Value [Member]
Stock Repurchase Program [Abstract]
Term of debt			1 year
Stock Buy-Back Program [Member] | Promissory Notes [Member] | Second Half of Note Value [Member]
Stock Repurchase Program [Abstract]
Term of debt			2 years

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Shareholders' Equity (Details) - USD ($)			9 Months Ended	16 Months Ended
	Jul. 14, 2016	Jun. 15, 2016	Sep. 30, 2017	Sep. 30, 2017
Stock Repurchase Program [Abstract]
Stock repurchase program authorized amount			$ 14,500,000	$ 14,500,000
Additional amount approved	$ 4,500,000	$ 2,000,000
Treasury stock shares acquired (in shares)			21,400
Amount paid to repurchase shares during the year			$ 397,000
Amount of common stock repurchased				$ 12,300,000
Number of common stock acquired (in shares)			1,080,000	1,080,000
Number of shares issued to management (in shares)			11,000

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Commitments and Contingencies (Details)	Sep. 30, 2017 USD ($)
RLF III, LLC [Member]
Investment Commitment [Line Items]
Total Funding Commitment	$ 4,000,000
Unfunded Commitment	398,120
Sovereign's Capital, LP Fund I [Member]
Investment Commitment [Line Items]
Total Funding Commitment	500,000
Unfunded Commitment	33,642
UGLIC, LLC [Member]
Investment Commitment [Line Items]
Total Funding Commitment	1,600,000
Unfunded Commitment	120,000
Sovereigns Capital LP Fund II [Member]
Investment Commitment [Line Items]
Total Funding Commitment	1,000,000
Unfunded Commitment	410,301
Barton Springs Music, LLC [Member]
Investment Commitment [Line Items]
Total Funding Commitment	2,500,000
Unfunded Commitment	1,339,063
Master Mineral Holdings II, LP [Member]
Investment Commitment [Line Items]
Total Funding Commitment	4,122,167
Unfunded Commitment	$ 556,286

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Other Cash Flow Disclosures (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Other Cash Flow Disclosures [Abstract]
Interest	$ 0	$ 0	$ 0	$ 0
Federal income tax	$ 20,000	$ 33,000	$ 175,000	$ 768,000