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 March 31, 2020

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

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

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

Title of class

Common Stock, stated value $.001 per share

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

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

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

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

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes □    No ⌧

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

The number of shares outstanding of the registrant’s common stock as of April 30, 2020 was 3,273,260.

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 Shareholders' Equity	6
Condensed Consolidated Statements of Cash Flows	7
Notes to Condensed Consolidated Financial Statements	8
Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 4.  Controls and Procedures	22
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)

	March 31, 2020		December 31, 2019*
ASSETS
Investments:
Investments available for sale:
Fixed maturities, at fair value (amortized cost $160,799,432 and $159,959,855)	$	173,703,436	$	171,629,373
Equity securities, at fair value (cost $30,061,436 and $32,578,862)		51,459,924		78,661,793
Equity securities, at cost		10,417,247		10,919,247
Mortgage loans on real estate at amortized cost		9,099,364		8,223,286
Investment real estate		43,087,742		44,344,236
Notes receivable		20,798,050		19,487,458
Policy loans		8,732,681		8,803,876
Short-term investments		15,388,646		10,442,173
Total investments		332,687,090		352,511,442
Cash and cash equivalents		26,431,046		28,787,629
Accrued investment income		1,383,288		1,679,783
Reinsurance receivables:
Future policy benefits		25,468,524		25,655,161
Policy claims and other benefits		4,291,578		4,142,142
Cost of insurance acquired		4,660,108		4,846,321
Property and equipment, net of accumulated depreciation		407,735		427,736
Other assets		3,175,629		695,517
Total assets	$	398,504,998	$	418,745,731
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Policy liabilities and accruals:
Future policyholder benefits	$	247,227,486	$	249,264,308
Policy claims and benefits payable		3,221,937		3,631,666
Other policyholder funds		433,873		404,177
Dividend and endowment accumulations		14,620,315		14,626,475
Income taxes payable		3,467,474		313,662
Deferred income taxes		7,080,403		13,222,604
Other liabilities		5,158,187		5,785,933
Total liabilities		281,209,675		287,248,825
Shareholders' equity:
Common stock - no par value, stated value $.001 per share.  Authorized 7,000,000 shares - 3,274,919 and 3,277,830 shares outstanding		3,276		3,279
Additional paid-in capital		35,903,350		36,012,401
Retained earnings		71,000,617		85,979,678
Accumulated other comprehensive income		9,832,206		8,977,914
Total UTG shareholders' equity		116,739,449		130,973,272
Noncontrolling interests		555,874		523,634
Total shareholders' equity		117,295,323		131,496,906
Total liabilities and shareholders' equity	$	398,504,998	$	418,745,731

* Balance sheet audited at December 31, 2019.

See accompanying notes.

UTG, Inc.

Condensed Consolidated Statements of Operations (Unaudited)

	Three Months Ended
	March 31,		March 31,
	2020		2019
Revenue:
Premiums and policy fees	$	2,355,755	$	2,503,205
Ceded reinsurance premiums and policy fees		(680,440)		(517,055)
Net investment income		2,830,186		3,112,024
Other income		59,042		63,838
Revenue before net investment gains (losses)		4,564,543		5,162,012
Net investment gains (losses):
Other realized investment gains, net		7,174,507		1,113,698
Change in fair value of equity securities		(24,684,444)		14,787,631
Total net investment gains (losses)		(17,509,937)		15,901,329
Total revenue		(12,945,394)		21,063,341
Benefits and other expenses:
Benefits, claims and settlement expenses:
Life		3,540,361		3,427,200
Ceded reinsurance benefits and claims		(634,943)		(474,622)
Annuity		232,488		197,670
Dividends to policyholders		94,315		103,599
Commissions and amortization of deferred policy acquisition costs		(35,117)		(24,542)
Amortization of cost of insurance acquired		186,213		193,977
Operating expenses		1,986,692		2,144,389
Total benefits and other expenses		5,370,009		5,567,671
Income (loss) before income taxes		(18,315,403)		15,495,670
Income tax (benefit) expense		(3,368,582)		3,697,058
Net income (loss)		(14,946,821)		11,798,612
Net income attributable to noncontrolling interests		(32,240)		(153,733)
Net income (loss) attributable to common shareholders	$	$ (14,979,061)	$	$ 11,644,879
Amounts attributable to common shareholders
Basic income (loss) per share	$	(4.58)	$	$ 3.53
Diluted income (loss) per share	$	(4.58)	$	$ 3.53
Basic weighted average shares outstanding		3,274,093		3,297,353
Diluted weighted average shares outstanding		3,274,093		3,297,353

See accompanying notes.

UTG, Inc.

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

	Three Months Ended
	March 31,		March 31,
	2020		2019
Net income (loss)	$	(14,946,821)	$	11,798,612
Other comprehensive income (loss):
Unrealized holding gains (losses) arising during period, pre-tax		1,472,865		4,934,851
Tax (expense) benefit on unrealized holding gains (losses) arising during the period		(309,302)		(1,036,319)
Unrealized holding gains (losses) arising during period, net of tax		1,163,563		3,898,532
Less reclassification adjustment for gains (losses) included in net income		(391,483)		(15,055)
Tax (expense) benefit for gains included in net income (loss)		82,212		3,162
Reclassification adjustment for gains (losses) included in net income, net of tax		(309,271)		(11,893)
Subtotal:  Other comprehensive income (loss), net of tax		854,292		3,886,639
Comprehensive income (loss)		(14,092,529)		15,685,251
Less comprehensive income attributable to noncontrolling interests		(32,240)		(153,733)
Comprehensive income (loss) attributable to UTG, Inc.	$	(14,124,769)	$	15,531,518

See accompanying notes.

UTG, Inc.

Condensed Consolidated Statements of Shareholders' Equity (Unaudited)

Three Months Ended March 31, 2020	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income		Noncontrolling Interest		Total Shareholders' Equity
Balance at December 31, 2019	$	3,279	$	36,012,401	$	85,979,678	$	8,977,914	$	523,634	$	131,496,906
Common stock issued during year		6		201,543		-		-		-		201,549
Treasury shares acquired		(9)		(310,594)		-		-		-		(310,603)
Net income (loss) attributable to common shareholders		-		-		(14,979,061)		-		-		(14,979,061)
Unrealized holding income on securities net of noncontrolling interest and reclassification adjustment and taxes		-		-		-		854,292		-		854,292
Contributions		-		-		-		-		-		-
Distributions		-		-		-		-		-		-
Gain attributable to noncontrolling interest		-		-		-		-		32,240		32,240
Balance at March 31, 2020	$	3,276	$	35,903,350	$	71,000,617	$	9,832,206	$	555,874	$	117,295,323

Three Months Ended March 31, 2019	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income		Noncontrolling Interest		Total Shareholders' Equity
Balance at December 31, 2018	$	3,296	$	36,567,865	$	69,708,901	$	62,495	$	734,153	$	107,076,710
Common stock issued during year		8		229,792		-		-		-		229,800
Treasury shares acquired		(7)		(212,380)		-		-		-		(212,387)
Net income attributable to common shareholders		-		-		11,644,879		-		-		11,644,879
Unrealized holding income on securities net of noncontrolling interest and reclassification adjustment and taxes		-		-		-		3,886,639		-		3,886,639
Contributions		-		-		-		-		-		-
Distributions		-		-		-		-		(245,750)		(245,750)
Gain attributable to noncontrolling interest		-		-		-		-		153,733		153,733
Balance at March 31, 2019	$	3,297	$	36,585,277	$	81,353,780	$	3,949,134	$	642,136	$	122,533,624

See accompanying notes.

UTG, Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

	Three Months Ended
	March 31,		March 31,
	2020		2019
Cash flows from operating activities:
Net income (loss)	$	$ (14,946,821)	$	$ 11,798,612
Adjustments to reconcile net income to net cash used in operating activities:
Amortization (accretion) of investments		(98,297)		(39,703)
Realized investment gains, net		(7,174,507)		(1,113,698)
Change in fair value of equity securities		24,684,444		(14,787,631)
Amortization of cost of insurance acquired		186,213		193,977
Depreciation		156,652		323,406
Stock-based compensation		201,549		229,800
Charges for mortality and administration of universal life and annuity products		(1,583,889)		(1,619,743)
Interest credited to account balances		1,009,012		1,029,303
Change in accrued investment income		296,495		232,788
Change in reinsurance receivables		37,201		(61,726)
Change in policy liabilities and accruals		(1,943,479)		(772,518)
Change in income taxes receivable (payable)		3,153,812		612,616
Change in other assets and liabilities, net		(9,630,253)		3,839,857
Net cash used in operating activities		(5,651,868)		(134,660)
Cash flows from investing activities:
Proceeds from investments sold and matured:
Fixed maturities available for sale		8,626,339		2,023,974
Equity securities		13,350,043		33,075
Mortgage loans		61,847		1,945,760
Real estate		1,119,842		3,045,226
Notes receivable		2,189,408		1,537,984
Policy loans		387,870		410,831
Short-term investments		3,000,000		-
Total proceeds from investments sold and matured		28,735,349		8,996,850
Cost of investments acquired:
Fixed maturities available for sale		(9,038,928)		-
Equity securities		(3,547,593)		(46,509)
Mortgage loans		(931,378)		(3,575,500)
Real estate		-		(1,174,688)
Notes receivable		(3,500,000)		(4,416,008)
Policy loans		(316,675)		(324,587)
Short-term investments		(7,890,228)		-
Total cost of investments acquired		(25,224,802)		(9,537,292)
Net cash provided by (used in) investing activities		3,510,547		(540,442)
Cash flows from financing activities:
Policyholder contract deposits		1,187,672		1,264,011
Policyholder contract withdrawals		(1,092,331)		(1,231,379)
Purchase of treasury stock		(310,603)		(212,387)
Non controlling contributions (distributions) of consolidated subsidiary		-		(245,750)
Net cash used in financing activities		(215,262)		(425,505)
Net decrease in cash and cash equivalents		(2,356,583)		(1,100,607)
Cash and cash equivalents at beginning of period		28,787,629		20,150,162
Cash and cash equivalents at end of period	$	$ 26,431,046	$	$ 19,049,555

See accompanying notes.

UTG, Inc.

Notes to Condensed Consolidated Financial Statements

Note 1 – Basis of Presentation

The accompanying Condensed Consolidated Balance Sheet as of March 31, 2020, 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, 2019.  The Company’s results of operations for the three month period ended  March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020 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 March 31, 2020, Mr. Correll owns or controls directly and indirectly approximately 65.70% of UTG’s outstanding stock.

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

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

Note 2 – Recently Issued Accounting Standards

During the three months ended March 31, 2020, there were no additions to or changes in the critical accounting policies disclosed in the 2019 Form 10-K.

Note 3 – Investments

Available for Sale Securities – Fixed Maturity Securities

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

Investments in available for sale securities are summarized as follows:

March 31, 2020		Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	44,797,372	$	1,751,954	$	-	$	46,549,326
U.S. special revenue and assessments		14,366,514		1,550,993		-		15,917,507
All other corporate bonds		101,635,546		10,052,499		(451,442)		111,236,603
	$	160,799,432	$	13,355,446	$	(451,442)	$	173,703,436

December 31, 2019		Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	35,761,440	$	402,832	$	(35,529)	$	36,128,743
U.S. special revenue and assessments		14,371,263		832,100		-		15,203,363
All other corporate bonds		109,827,152		10,470,115		-		120,297,267
	$	159,959,855	$	11,705,047	$	(35,529)	$	171,629,373

The amortized cost and estimated market value of debt securities at March 31, 2020, 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 March 31, 2020		Amortized Cost		Fair Value
Due in one year or less	$	11,796,278	$	12,089,426
Due after one year through five years		58,507,802		60,788,411
Due after five years through ten years		46,860,963		53,482,062
Due after ten years		43,634,389		47,343,537
Total	$	160,799,432	$	173,703,436

The fair value of investments with sustained gross unrealized losses at March 31, 2020 and December 31, 2019 are as follows:

March 31, 2020		Less than 12 months			12 months or longer				Total
		Fair value	Unrealized losses			Fair value	Unrealized losses			Fair value		Unrealized losses
All other corporate bonds	$	7,268,145		(451,442)		-		-		7,268,145	$	(451,442)
Total fixed maturities	$	7,268,145		(451,442)		-		-		7,268,145	$	(451,442)

December 31, 2019		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	$	6,059,380		(35,529)		-		-	6,059,380	$	(35,529)
Total fixed maturities	$	6,059,380		(35,529)		-		-	6,059,380	$	(35,529)

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

	Less than 12 months	12 months or longer	Total
As of March 31, 2020
Fixed maturities	7	-	7
As of December 31, 2019
Fixed maturities	3	-	3

Substantially all of the unrealized losses on fixed maturities at March 31, 2020 and December 31, 2019 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  March 31, 2020 and December 31, 2019.

Net Investment Gains (Losses)

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

	Three Months Ended
	March 31,
	2020		2019
Realized gains:
Sales of fixed maturities	$	391,483	$	15,055
Sales of equity securities		6,783,024		-
Sales of real estate		-		1,098,643
Total realized gains		7,174,507		1,113,698
Realized losses:
Sales of fixed maturities		-		-
Sales of equity securities		-		-
Sales of real estate		-		-
Other-than-temporary impairments		-		-
Total realized losses		-		-
Net realized investment gains (losses)		7,174,507		1,113,698
Change in fair value of equity securities:
Change in fair value of equity securities held at the end of the period		(24,684,444)		14,787,631
Change in fair value of equity securities		(24,684,444)		14,787,631
Net investment gains (losses)	$	(17,509,937)	$	15,901,329
Change in net unrealized gains (losses) on available-for-sale investments included in other comprehensive income:
Fixed maturities	$	1,472,865	$	4,934,851
Net increase (decrease)	$	1,472,865	$	4,934,851

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.

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.

The Company did not recognize any other-than-temporary impairments during the first quarter of 2019 or 2020.

Cost Method Investments

The Company held equity investments with an aggregate cost of $10,417,247 and $10,919,247 at March 31, 2020 and December 31, 2019, respectively.  These equity investments were not reported at fair value because it is not practicable to estimate their fair values due to insufficient information being available. Management did not identify any events or changes in circumstances that might have a significant adverse effect on the reported value of those investments.  Based on Management's evaluation of the expected cash flow of the investments, and the Company's ability and intent to hold the investments for a reasonable period of time, the Company does not deem an other-than-temporary impairment necessary at March 31, 2020.

Mortgage Loans

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

During the three months ended March 31, 2020 and 2019, the Company acquired $931,378 and $3,575,500 in mortgage loans, respectively.  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 2020 and 2019, the maximum and minimum lending rates for mortgage loans were:

	2020		2019
	Maximum rate	Minimum rate	Maximum rate	Minimum rate
Farm Loans	5.00%	5.00%	5.00%	5.00%
Commercial Loans	7.50%	4.24%	7.50%	4.00%
Residential Loans	5.50%	5.50%	8.00%	8.00%

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.  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 mortgage loan reserve was $0 at March 31, 2020 and December 31, 2019.

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

		March 31, 2020		December 31, 2019
In good standing	$	9,099,364	$	8,223,286
Total mortgage loans	$	9,099,364	$	8,223,286

Investment Real Estate

Investment real estate held for sale is reported at the lower of cost or fair value less cost to sell. Investment 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.

The Company's investment real estate portfolio includes ownerships in oil and gas royalties. As of March 31, 2020 and December 31, 2019, investments in oil and gas royalties represented 43% and 44%, respectively, of the total investment real estate portfolio.

Gains and losses recognized on the disposition of the properties are recorded as realized gains and losses in the Condensed Consolidated Statements of Operations. During the three months ended March 31, 2020 and 2019, the Company acquired $0 and $1,174,688 of investment real estate, respectively.

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  March 31, 2020 and December 31, 2019 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. During the three months ended March 31, 2020 and 2019 the Company acquired $3,500,000 and $4,416,008, respectively.

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

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

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 March 31, 2020.

		Level 1		Level 2		Level 3		Total
Assets
Fixed Maturities, available for sale	$	46,549,326	$	127,154,110	$	-	$	173,703,436
Equity Securities		15,953,666		12,244,456		23,261,802		51,459,924
Total	$	62,502,992	$	139,398,566	$	23,261,802	$	225,163,360

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, 2019.

		Level 1		Level 2		Level 3		Total
Assets
Fixed Maturities, available for sale	$	36,128,743	$	135,500,630	$	-	$	171,629,373
Equity Securities		29,888,281		14,258,750		34,514,762		78,661,793
Total	$	66,017,024	$	149,759,380	$	34,514,762	$	250,291,166

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		Total
Balance at December 31, 2019	$	-	$	34,514,762	$	34,514,762
Total unrealized gain or (losses):
Included in net income (loss)		-		(2,296,374)		(2,296,374)
Included in other comprehensive income		-		-		-
Purchases		-		1,331,382		1,331,382
Sales		-		(10,287,968)		(10,287,968)
Balance at March 31, 2020	$	-	$	23,261,802	$	23,261,802

		March 31, 2020		December 31, 2019
Change in fair value of equity securities included in net income (loss) relating to assets held	$	(2,296,374)	$	6,461,670

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 March 31, 2020. Transfers occur when there is a change in the availability 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.

	March 31, 2020				December 31, 2019
Assets		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Equity securities	$	10,417,247	$	10,417,247	$	10,919,247	$	10,919,247
Mortgage loans on real estate		9,099,364		9,099,364		8,223,286		8,223,286
Investment real estate		43,087,742		43,087,742		44,344,236		44,344,236
Notes receivable		20,798,050		20,798,050		19,487,458		19,487,458
Policy loans		8,732,681		8,732,681		8,803,876		8,803,876
Short term investments		15,388,646		15,388,646		10,442,173		10,442,173
Cash and cash equivalents		26,431,046		26,431,046		28,787,629		28,787,629

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 historically purchased 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 Condensed 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 Condensed 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.

Note 5 – Credit Arrangements

Instrument	Issue Date	Maturity Date		Revolving Credit Limit	December 31, 2019	Borrowings	Repayments	March 31, 2020
Lines of Credit:
UTG	11/20/2013	11/20/2020	$	8,000,000	-	-	-	-
UG	6/2/2015	5/8/2020		10,000,000	-	-	-	-

The UTG line of credit carries interest at a fixed rate of  4.040% 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.

During May of 2019, the Federal Home Loan Bank approved UG’s Cash Management Advance Application (“CMA”). The CMA gives the Company the option of selecting a variable rate of interest for up to 90 days or a fixed rate for a maximum of 30 days. The variable rate CMA is prepayable at any time without a fee, while the fixed CMA is not prepayable prior to maturity. The Company has pledged bonds with a collateral lendable value of $12,254,677. The Company is currently in the process of renewing the CMA.

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 in June of 2019, the Board of Directors of UTG authorized the repurchase of up to an additional $2.5 million of UTG's common stock, for a total  repurchase of up to $18.5 million of UTG's common stock in the open market or in privately negotiated transactions. Company Management has broad authority to operate the program, including the discretion of whether to purchase shares and the ability to suspend or terminate the program. Open market purchases are made based on the last available market price but may be limited.  During the three months ended March 31, 2020, the Company repurchased 8,955shares through the stock repurchase program for $310,603. Through March 31, 2020, UTG has spent $15,083,699in the acquisition of 1,178,313shares under this program.

During 2020, the Company issued 6,044 shares of stock to management and employees as compensation at a cost of $201,549. These awards are determined at the discretion of the Board of Directors.

Earnings Per Share Calculations

Earnings per share are based on the weighted average number of common shares outstanding during each period.  For the three months ended March 31, 2020 and 2019, 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.

The following table represents the total funding commitments and the unfunded commitment as of March 31, 2020 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		20,000
Sovereign's Capital, LP Fund II		1,000,000		158,596
Sovereign's Capital, LP Fund III		3,000,000		2,137,079
Garden City Companies, LLC		2,000,000		1,956,688
Carrizo Springs Music, LLC		2,500,000		2,296,875
Modern Distributors, Inc.		7,200,000		3,700,000

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 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 2018, the Company committed to invest in Sovereign’s Capital, LP Fund III (“Sovereign’s III”), which invests in companies in emerging markets. Sovereign’s III makes capital calls to investors as funds are needed.

During 2020, the Company committed to invest in Garden City Companies, LLC (“Garden City”), which invests primarily in companies in the healthcare, inspection/testing services and maintenance service arena. Garden City makes capital calls to investors as funds are needed.

During 2020, the Company committed to invest in Carrizo Springs Music, LLC (“Carrizo”), which invests in music royalties.  Carrizo makes capital calls to its investors as funds are needed to acquire the royalty rights.

Note 8 – Other Cash Flow Disclosures

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

	Three Months Ended
	March 31,
	2020		2019
Interest	$	-	$	-
Federal income tax		-		-

Note 9 – Concentrations of Credit Risk

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

Because UTG serves primarily individuals located in four states, the ability of our customers to pay their insurance premiums is impacted by the economic conditions in these areas.  As of March 31, 2020 and 2019 , approximately 55% of the Company’s total direct premium was collected from Illinois, Ohio, Texas and West Virginia. Thus, results of operations are heavily dependent upon the strength of these economies.

The Company reinsures that portion of insurance risk which is in excess of its retention limits. Retention limits range up to $125,000 per life.  Life insurance ceded represented 21% and 20% of total life insurance in force at March 31, 2020 and  December 31, 2019, respectively.  Insurance ceded represented 34% and 24% of premium income for the three months ended March 31, 2020 and 2019, respectively. The Company would be liable for the reinsured risks ceded to other companies to the extent that such reinsuring companies are unable to meet their obligations.

The Company owns a variety of investments associated with the oil and gas industry. These investments represent approximately 19% and 25% of the Company's total invested assets as of March 31, 2020 and December 31, 2019, respectively.

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, 2019, 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.  The Company's focus for the future includes growing the administrative portion of the business.

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, 2019.  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 three months ended March 31, 2020, there were no additions to or changes in the critical accounting policies disclosed in the 2019 Form 10-K.

Results of Operations

During March 2020, a global pandemic was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain of coronavirus (COVID-19). The pandemic has significantly impacted the economic conditions in the U.S. and globally, accelerating during the first half of March, as federal, state, and local governments react to the public health crisis, creating significant uncertainties in the U.S. economy. The Company has not experienced a slow-down in activities related to the contracted work, however government restrictions and client-imposed delays are evaluated daily and this could change. While the disruption is currently expected to be temporary, there is uncertainty around the duration. The Company cannot at this time predict the ultimate impact the pandemic will have on its results of operations, financial position, liquidity, or capital resources but such impact could be material.

On a consolidated basis, the Company reported a net loss to common shareholders' of approximately $(15) million for the three month period ended March 31, 2020 and net income attributable to common shareholders' of approximately $11.6 million for the three month period ended March 31, 2019.

Revenues

For the three month period ended March 31, 2020, the Company reported negative total revenues of approximately $(12.9) million and for the same period in 2019 total revenues of approximately $21.1 million. The negative total revenue the Company is reporting for the first quarter of 2020 is the result of the change in the fair value of equity securities of approximately $(24.7) million that is reported as a component of total revenue on the Condensed Consolidated Statements of Operations.

The Company reported revenue before net investment gains (losses) of approximately $4.6 million and $5.2 million for the three month periods ended March 31, 2020 and 2019, respectively. Revenue before net investment gains (losses) decreased slightly when comparing the current year and prior year results and is due to minor decreases in premium and policy fees and net investment income.

Premium and policy fee revenues, net of reinsurance, were comparable for the three-months ended March 31, 2020 and 2019.  The Company writes minimal new business.  Premium and policy fee revenues, net of reinsurance, represented 37% and 38% of the Company's revenue before net investment gains (losses) as of March 31, 2020 and 2019, respectively.

The following table summarizes the Company's investment performance.

	Three Months Ended March 31,
	2020		2019
Net investment income	$	2,830,186	$	3,112,024
Net investment gains (losses)	$	(17,509,937)	$	15,901,329
Change in net unrealized investment gains (losses) on available-for-sale securities, pre-tax	$	1,472,865	$	4,934,851

The following table reflects net investment income of the Company:

	Three Months Ended
	March 31,
	2020		2019
Fixed maturities available for sale	$	1,409,324	$	1,589,985
Equity securities		755,402		668,108
Trading securities		-		(111,693)
Mortgage loans		85,799		118,612
Real estate		606,657		784,532
Notes receivable		202,221		435,155
Policy loans		137,970		141,552
Short-term		16,227		41,364
Cash and cash equivalents		89,059		-
Total consolidated investment income		3,302,659		3,667,615
Investment expenses		(472,473)		(555,591)
Consolidated net investment income	$	2,830,186	$	3,112,024

Net investment income represented 62% and 60% of the Company's revenue before net investment gains (losses) as of March 31, 2020 and 2019, respectively.  Net investment income was comparable in the majority of the investment categories when comparing the first quarter 2020 activity to the same quarter in 2019.

The Company reported net investment gains (losses) of approximately $(17.5) million and $15.9 million for the three-month periods ended March 31, 2020 and 2019, respectively. Included in the net investment gains (losses) are realized investment gains of approximately $7.2 million and $1.1 million for the three-months ended March 31, 2020 and 2019, respectively.    The 2020 realized gains are mainly the result of the Company selling certain equity securities and the 2019 realized gains are the result of the Company selling a parcel of real estate.

During 2019, the Company received an offer to purchase its investments in certain music royalties held in the form of equity investments.  As a result of this event, the Company elected to change its valuation methodology from using discounted cash flow models to estimate fair value to marking the investment to the offer price to estimate the fair value. The change in methodology resulted in recording an unrealized gain on investment of approximately $3.3 million during the year ended December 31, 2019.  The investments were sold during the first quarter of 2020. The Company recognized a gain of approximately $4.2 million on the sale. The 2020 net income is unaffected by the sale as the realized gain is offset by the unrealized gain reversal at the time of sale.

During March of 2020, a global pandemic was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain of coronavirus (COVID-19). The Company holds certain investments that have been negatively impacted by the market reactions to the pandemic.  These investments primarily relate to marketable equity securities.  The drop in the markets in March, resulted in an estimated unrealized losses of approximately $(24.7) million.  These investments mostly remain in an unrealized gain position even after the market drop. In April of 2020, the Company experienced a partial rebound on these investments of approximately $6.4 million in unrealized gains.

Prior to March 2020, the Company recognized significant unrealized gains on its equity investments and were mainly from two equity holdings, both in the area of oil and gas. The Company recognized and disclosed in prior filings that a pull back in the stock market, particularly in the oil and gas arena, could slow these gains or even result in future period unrealized losses. Management believes these equity investments continue to be solid investments for the Company and have further growth potential; however, changes in market conditions could continue to cause volatility in market prices.

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 $5.4 million for the three-month period ended March 31, 2020, a decrease of approximately 4% from the same period in 2019.  Benefits, claims and settlement expenses represented approximately 60% and 58% of the Company's total expenses for the three-month periods ended March 31, 2020 and 2019, respectively. The other major expense category of the Company is operating expenses, which represented approximately 37% and 39% of the Company's total expenses for the three-month periods ended March 31, 2020 and 2019, respectively.

Life benefits, claims and settlement expenses, net of reinsurance benefits and claims were comparable for the three month period ended March 31, 2020 and 2019.  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 three-month period ended March 31, 2020 compared to the same period in 2019.  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.

Operating expenses decreased by approximately 7% in the three-month period ended March 31, 2020 as compared to the same period in 2019. Overall, expenses were comparable in all of the major expense categories.

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 83% and 84% of total assets at March 31, 2020 and December 31, 2019, respectively.  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 March 31, 2020, 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 a net unrealized gain of approximately $1.2 million and $3.9 million for the three-month periods ended March 31, 2020 and 2019, respectively.  The variance in the net unrealized gains and losses is the result of normal market fluctuations and lower interest rates.

Capital Resources

Total shareholders' equity decreased by approximately 11% as of March 31, 2020 compared to December 31, 2019. The decrease is mainly attributable to a decrease in retained earnings, which is the result of the current year net loss reported by the Company.

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 two principal needs for cash - the insurance company's contractual obligations to policyholders and the payment of operating expenses.  Cash and cash equivalents represented 7% total assets as of March 31, 2020 and December 31, 2019.  Fixed maturities as a percentage of total assets were approximately 44% and 41% as of March 31, 2020 and December 31, 2019, respectively.

The Company currently has access to funds for operating liquidity.  UTG has an $8 million revolving credit note with Illinois National Bank.  At March 31, 2020, the Company had no outstanding borrowings against the UTG line of credit. UG has a $10 million line of credit with the Federal Home Loan Bank. At March 31, 2020, the Company had no outstanding borrowings against the UG 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.

For the three months ended March 31, 2020 and 2019, operating activities used cash of approximately $5.7 millions and $135,000, 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.

Investing activities of the Company produced cash of approximately $3.5 million and used cash of approximately $540,000 for the three month periods ended  March 31, 2020 and 2019, respectively.   The net cash provided by or used in 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 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 March 31, 2020, 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 2019 or the three-month period ended March 31, 2020.

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, 2019, UG had statutory net income of approximately $8.3 million.  At December 31, 2019 UG's statutory capital and surplus amounted to approximately $66 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 2019, UG paid UTG ordinary dividends of $6 million. During the second quarter of 2020, UG paid UTG a dividend of $1 million.  UTG used the dividends received during 2019 and 2020 to purchase outstanding shares of UTG stock and 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:	May 12, 2020	By	/s/ James P. Rousey
			James P. Rousey
			President and Director

Date:	May 12, 2020	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:	May 12, 2020	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:	May 12, 2020	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 March 31, 2020, 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:	May 12, 2020	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 March 31, 2020, 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:	May 12, 2020	By:	/s/ Theodore C. Miller
			Theodore C. Miller
			Senior Vice President, Corporate Secretary and
			Chief Financial Officer

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)	Mar. 31, 2020	Dec. 31, 2019
Investments available for sale:
Fixed maturities, amortized cost	$ 160,799,432	$ 159,959,855
Equity securities, cost	$ 30,061,436	$ 32,578,862
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)	3,274,919	3,277,830

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Cash flows from operating activities:
Net income (loss)	$ (14,946,821)	$ 11,798,612
Adjustments to reconcile net income to net cash used in operating activities:
Amortization (accretion) of investments	(98,297)	(39,703)
Realized investment gains, net	(7,174,507)	(1,113,698)
Change in fair value of equity securities	24,684,444	(14,787,631)
Amortization of cost of insurance acquired	186,213	193,977
Depreciation	156,652	323,406
Stock-based compensation	201,549	229,800
Charges for mortality and administration of universal life and annuity products	(1,583,889)	(1,619,743)
Interest credited to account balances	1,009,012	1,029,303
Change in accrued investment income	296,495	232,788
Change in reinsurance receivables	37,201	(61,726)
Change in policy liabilities and accruals	(1,943,479)	(772,518)
Change in income taxes receivable (payable)	3,153,812	612,616
Change in other assets and liabilities, net	(9,630,253)	3,839,857
Net cash used in operating activities	(5,651,868)	(134,660)
Proceeds from investments sold and matured:
Fixed maturities available for sale	8,626,339	2,023,974
Equity securities	13,350,043	33,075
Mortgage loans	61,847	1,945,760
Real estate	1,119,842	3,045,226
Notes receivable	2,189,408	1,537,984
Policy loans	387,870	410,831
Short-term investments	3,000,000	0
Total proceeds from investments sold and matured	28,735,349	8,996,850
Cost of investments acquired:
Fixed maturities available for sale	(9,038,928)	0
Equity securities	(3,547,593)	(46,509)
Mortgage loans	(931,378)	(3,575,500)
Real estate	0	(1,174,688)
Notes receivable	(3,500,000)	(4,416,008)
Policy loans	(316,675)	(324,587)
Short-term investments	(7,890,228)	0
Total cost of investments acquired	(25,224,802)	(9,537,292)
Net cash provided by (used in) investing activities	3,510,547	(540,442)
Cash flows from financing activities:
Policyholder contract deposits	1,187,672	1,264,011
Policyholder contract withdrawals	(1,092,331)	(1,231,379)
Purchase of treasury stock	(310,603)	(212,387)
Non controlling contributions (distributions) of consolidated subsidiary	0	(245,750)
Net cash used in financing activities	(215,262)	(425,505)
Net decrease in cash and cash equivalents	(2,356,583)	(1,100,607)
Cash and cash equivalents at beginning of period	28,787,629	20,150,162
Cash and cash equivalents at end of period	$ 26,431,046	$ 19,049,555

XML

Investments, Mortgage Loans, Investment Real Estate, and Notes Receivable (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Cost Method Investments [Abstract]
Equity Securities without Readily Determinable Fair Value, Amount	$ 10,417,247		$ 10,919,247	[1]
Mortgage Loans [Abstract]
Mortgage loans acquired, including discounted mortgage loans	$ 931,378		3,575,500
Servicing fee on loan	0.25%
Loan origination	0.50%
Loan limit threshold for appraised property value	80.00%
Mortgage loans reserve	$ 0		0
Mortgage loan holdings [Abstract]
In good standing	9,099,364		8,223,286
Total mortgage loans	$ 9,099,364		$ 8,223,286	[1]
Investment Real Estate [Abstract]
Investments in oil/gas royalties as a % of total investment real estate portfolio	43.00%		44.00%
Investment real estate acquired	$ 0	$ 1,174,688
Notes Receivable [Abstract]
Valuation allowance	0		$ 0
Notes Receivable acquired	$ 3,500,000	$ 4,416,008
Farm Loans [Member] | Maximum [Member]
Mortgage Loans [Abstract]
Interest rate on mortgage loans	5.00%		5.00%
Farm Loans [Member] | Minimum [Member]
Mortgage Loans [Abstract]
Interest rate on mortgage loans	5.00%		5.00%
Commercial Loans [Member] | Maximum [Member]
Mortgage Loans [Abstract]
Interest rate on mortgage loans	7.50%		7.50%
Commercial Loans [Member] | Minimum [Member]
Mortgage Loans [Abstract]
Interest rate on mortgage loans	4.24%		4.82%
Residential Loans [Member] | Maximum [Member]
Mortgage Loans [Abstract]
Interest rate on mortgage loans	5.50%		8.00%
Residential Loans [Member] | Minimum [Member]
Mortgage Loans [Abstract]
Interest rate on mortgage loans	5.50%		8.00%

[1] Balance sheet audited at December 31, 2018.

XML

Credit Arrangements (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Line of Credit Facility [Abstract]
Pledged Bonds	$ 12,254,667
Variable Rate [Member] | Maximum [Member]
Line of Credit Facility [Abstract]
Period of interest under CMA	90 days
Fixed Rate [Member] | Maximum [Member]
Line of Credit Facility [Abstract]
Period of interest under CMA	30 days
UTG 2013-11-20 [Member]
Line of Credit Facility [Abstract]
Interest Rate	4.04%
Frequency of payments	monthly
Assets Pledged	common voting stock of its wholly owned subsidiary, Universal Guaranty Life Insurance Company.
UTG 2013-11-20 [Member] | UG [Member]
Line of Credit Facility [Abstract]
Issue Date	Nov. 20, 2013
Maturity Date	Nov. 20, 2020
Revolving Credit Limit	$ 8,000,000
Outstanding Balance	0	$ 0
Borrowings	0
Repayments	$ 0
Percentage of common voting stock pledged	100.00%
UG Avalon 2015-06-02 [Member] | UG [Member]
Line of Credit Facility [Abstract]
Issue Date	Jun. 02, 2015
Maturity Date	May 08, 2020
Revolving Credit Limit	$ 10,000,000
Outstanding Balance	0	$ 0
Borrowings	0
Repayments	$ 0

XML

Concentrations of Credit Risk (Details)	3 Months Ended		12 Months Ended
	Mar. 31, 2020 USD ($) State	Mar. 31, 2019	Dec. 31, 2019
Concentrations [Abstract]
Number of states by which entity primarily serves | State	4
Maximum retention limits per life | $	$ 125,000
Reinsurer Concentration Risk [Member] | Life Insurance Ceded [Member]
Concentrations [Abstract]
Percentage of gross insurance in force	21.00%		20.00%
Percentage of premium income	34.00%	24.00%
Direct Premium Collected [Member] | Geographic Concentration Risk [Member] | Illinois, Ohio, Texas and West Virginia [Member]
Concentrations [Abstract]
Concentration risk, percentage	55.00%	55.00%
Invested Assets [Member] | Customer Concentration Risk [Member] | Oil and Gas Industry [Member]
Concentrations [Abstract]
Concentration risk, percentage	19.00%		25.00%

XML

Basis of Presentation (Policies)

3 Months Ended

Mar. 31, 2020

Basis of Presentation [Abstract]

Basis of Presentation

The accompanying Condensed Consolidated Balance Sheet as of March 31, 2020, 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, 2019.  The Company’s results of operations for the three month period ended  March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020 or for any other future period.

XML

Shareholders' Equity

3 Months Ended

Mar. 31, 2020

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 in June of 2019, the Board of Directors of UTG authorized the repurchase of up to an additional $2.5 million of UTG's common stock, for a total  repurchase of up to $18.5 million of UTG's common stock in the open market or in privately negotiated transactions. Company Management has broad authority to operate the program, including the discretion of whether to purchase shares and the ability to suspend or terminate the program. Open market purchases are made based on the last available market price but may be limited.  During the three months ended March 31, 2020, the Company repurchased 8,955shares through the stock repurchase program for $310,603. Through March 31, 2020, UTG has spent $15,083,699in the acquisition of 1,178,313shares under this program.

During 2020, the Company issued 6,044 shares of stock to management and employees as compensation at a cost of $201,549. These awards are determined at the discretion of the Board of Directors.

Earnings Per Share Calculations

Earnings per share are based on the weighted average number of common shares outstanding during each period.  For the three months ended March 31, 2020 and 2019, diluted earnings per share were the same as basic earnings per share since the Company had no dilutive instruments outstanding.

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Investments, Net Investment Gains (Losses) and Change in Net Unrealized Gains on Available-for-sale Investments (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Realized gains on available-for-sale investments [Abstract]
Total realized gains	$ 7,174,507	$ 1,113,698
Realized losses on available-for-sale investments [Abstract]
Other-than-temporary impairments	0	0
Total realized losses	0	0
Net realized investment gains (losses)	7,174,507	1,113,698
Change in fair value of equity securities [Abstract]
Change in fair value of equity securities held at the end of the period	(24,684,444)	14,787,631
Change in fair value of equity securities	(24,684,444)	14,787,631
Total net investment gains (losses)	(17,509,937)	15,901,329
Change in net unrealized gains (losses) on available-for-sale investments included in other comprehensive income [Abstract]
Change in net unrealized gains (losses) on available-for-sale investments included in other comprehensive income	1,472,865	4,934,851
Fixed Maturities [Member]
Realized gains on available-for-sale investments [Abstract]
Total realized gains	391,483	15,055
Realized losses on available-for-sale investments [Abstract]
Total realized losses	0	0
Change in net unrealized gains (losses) on available-for-sale investments included in other comprehensive income [Abstract]
Change in net unrealized gains (losses) on available-for-sale investments included in other comprehensive income	1,472,865	4,934,851
Equity Securities [Member]
Realized gains on available-for-sale investments [Abstract]
Total realized gains	6,783,024	0
Realized losses on available-for-sale investments [Abstract]
Total realized losses	0	0
Real Estate [Member]
Realized gains on available-for-sale investments [Abstract]
Total realized gains	0	1,098,643
Realized losses on available-for-sale investments [Abstract]
Total realized losses	$ 0	$ 0

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Investments, Available for Sale Securities (Details) - USD ($)	Mar. 31, 2020	Dec. 31, 2019
Fixed maturities [Abstract]
Original or amortized cost	$ 160,799,432	$ 159,959,855
Gross unrealized gains	13,355,446	11,705,047
Gross unrealized losses	(451,442)	(35,529)
Estimated fair value	173,703,436	171,629,373	[1]
Equity securities [Abstract]
Estimated fair value	51,459,924	78,661,793	[1]
U.S. Government and Govt. Agencies and Authorities [Member]
Fixed maturities [Abstract]
Original or amortized cost	44,797,372	35,761,440
Gross unrealized gains	1,751,954	402,832
Gross unrealized losses	0	(35,529)
Estimated fair value	46,549,326	36,128,743
U.S. Special Revenue and Assessments [Member]
Fixed maturities [Abstract]
Original or amortized cost	14,366,514	14,371,263
Gross unrealized gains	1,550,993	832,100
Gross unrealized losses	0	0
Estimated fair value	15,917,507	15,203,363
All Other Corporate Bonds [Member]
Fixed maturities [Abstract]
Original or amortized cost	101,635,546	109,827,152
Gross unrealized gains	10,052,499	10,470,115
Gross unrealized losses	(451,442)	0
Estimated fair value	$ 111,236,603	$ 120,297,267

[1] Balance sheet audited at December 31, 2018.

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Credit Arrangements (Tables)

3 Months Ended

Mar. 31, 2020

Credit Arrangements [Abstract]

Credit Arrangements

Instrument	Issue Date	Maturity Date		Revolving Credit Limit	December 31, 2019	Borrowings	Repayments	March 31, 2020
Lines of Credit:
UTG	11/20/2013	11/20/2020	$	8,000,000	-	-	-	-
UG	6/2/2015	5/8/2020		10,000,000	-	-	-	-

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Basis of Presentation (Details)	Mar. 31, 2020
Chief Executive Officer and Chairman of the Board [Member]
Ownership Interest [Abstract]
Ownership interest percentage	65.70%
FSBI [Member] | FSNB [Member]
Ownership Interest [Abstract]
Ownership in subsidiary bank	100.00%

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2020

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 March 31, 2020.

		Level 1		Level 2		Level 3		Total
Assets
Fixed Maturities, available for sale	$	46,549,326	$	127,154,110	$	-	$	173,703,436
Equity Securities		15,953,666		12,244,456		23,261,802		51,459,924
Total	$	62,502,992	$	139,398,566	$	23,261,802	$	225,163,360

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, 2019.

		Level 1		Level 2		Level 3		Total
Assets
Fixed Maturities, available for sale	$	36,128,743	$	135,500,630	$	-	$	171,629,373
Equity Securities		29,888,281		14,258,750		34,514,762		78,661,793
Total	$	66,017,024	$	149,759,380	$	34,514,762	$	250,291,166

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		Total
Balance at December 31, 2019	$	-	$	34,514,762	$	34,514,762
Total unrealized gain or (losses):
Included in net income (loss)		-		(2,296,374)		(2,296,374)
Included in other comprehensive income		-		-		-
Purchases		-		1,331,382		1,331,382
Sales		-		(10,287,968)		(10,287,968)
Balance at March 31, 2020	$	-	$	23,261,802	$	23,261,802

		March 31, 2020		December 31, 2019
Change in fair value of equity securities included in net income (loss) relating to assets held	$	(2,296,374)	$	6,461,670

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.

	March 31, 2020				December 31, 2019
Assets		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Equity securities	$	10,417,247	$	10,417,247	$	10,919,247	$	10,919,247
Mortgage loans on real estate		9,099,364		9,099,364		8,223,286		8,223,286
Investment real estate		43,087,742		43,087,742		44,344,236		44,344,236
Notes receivable		20,798,050		20,798,050		19,487,458		19,487,458
Policy loans		8,732,681		8,732,681		8,803,876		8,803,876
Short term investments		15,388,646		15,388,646		10,442,173		10,442,173
Cash and cash equivalents		26,431,046		26,431,046		28,787,629		28,787,629

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Investments, Number of Securities in Unrealized Loss Position (Details) - Security	Mar. 31, 2020	Dec. 31, 2019
Fixed Maturities [Abstract]
Less than 12 months, number of securities	7	3
12 months or longer, number of securities	0	0
Total number of securities	7	3

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Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Mar. 31, 2020	Dec. 31, 2019
Investments available for sale:
Fixed maturities, at fair value (amortized cost $160,799,432 and $159,959,855)	$ 173,703,436	$ 171,629,373	[1]
Equity securities, at fair value (cost $30,061,436 and $32,578,862)	51,459,924	78,661,793	[1]
Equity securities, at cost	10,417,247	10,919,247	[1]
Mortgage loans on real estate at amortized cost	9,099,364	8,223,286	[1]
Investment real estate	43,087,742	44,344,236	[1]
Notes receivable	20,798,050	19,487,458	[1]
Policy loans	8,732,681	8,803,876	[1]
Short-term investments	15,388,646	10,442,173
Total investments	332,687,090	352,511,442	[1]
Cash and cash equivalents	26,431,046	28,787,629	[1]
Accrued investment income	1,383,288	1,679,783	[1]
Reinsurance receivables:
Future policy benefits	25,468,524	25,655,161	[1]
Policy claims and other benefits	4,291,578	4,142,142	[1]
Cost of insurance acquired	4,660,108	4,846,321	[1]
Property and equipment, net of accumulated depreciation	407,735	427,736	[1]
Other assets	3,175,629	695,517	[1]
Total assets	398,504,998	418,745,731	[1]
Policy liabilities and accruals:
Future policyholder benefits	247,227,486	249,264,308	[1]
Policy claims and benefits payable	3,221,937	3,631,666	[1]
Other policyholder funds	433,873	404,177	[1]
Dividend and endowment accumulations	14,620,315	14,626,475	[1]
Income taxes payable	3,467,474	313,662	[1]
Deferred income taxes	7,080,403	13,222,604	[1]
Other liabilities	5,158,187	5,785,933	[1]
Total liabilities	281,209,675	287,248,825	[1]
Shareholders' equity:
Common stock - no par value, stated value $.001 per share. Authorized 7,000,000 shares - 3,274,919 and 3,277,830 shares outstanding	3,276	3,279	[1]
Additional paid-in capital	35,903,350	36,012,401	[1]
Retained earnings	71,000,617	85,979,678	[1]
Accumulated other comprehensive income	9,832,206	8,977,914	[1]
Total UTG shareholders' equity	116,739,449	130,973,272	[1]
Noncontrolling interests	555,874	523,634	[1]
Total shareholders' equity	117,295,323	131,496,906	[1]
Total liabilities and shareholders' equity	$ 398,504,998	$ 418,745,731	[1]

[1] Balance sheet audited at December 31, 2018.

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Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-In Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income [Member]	Noncontrolling Interest [Member]	Total
Balance at Dec. 31, 2018	$ 3,296	$ 36,567,865	$ 69,708,901	$ 62,495	$ 734,153	$ 107,076,710
Common stock issued during year	8	229,792	0	0	0	229,800
Treasury shares acquired	(7)	(212,380)	0	0	0	(212,387)
Net income (loss) attributable to common shareholders	0	0	11,644,879	0	0	11,644,879
Unrealized holding income on securities net of noncontrolling interest and reclassification adjustment and taxes	0	0	0	3,886,639	0	3,886,639
Contributions	0	0	0	0	0	0
Distributions	0	0	0	0	(245,750)	(245,750)
Gain attributable to noncontrolling interest	0	0	0	0	153,733	153,733
Balance at Mar. 31, 2019	3,297	36,585,277	81,353,780	3,949,134	642,136	122,533,624
Balance at Dec. 31, 2019	3,279	36,012,401	85,979,678	8,977,914	523,634	131,496,906	[1]
Common stock issued during year	6	201,543	0	0	0	201,549
Treasury shares acquired	(9)	(310,594)	0	0	0	(310,603)
Net income (loss) attributable to common shareholders	0	0	(14,979,061)	0	0	(14,979,061)
Unrealized holding income on securities net of noncontrolling interest and reclassification adjustment and taxes	0	0	0	854,292	0	854,292
Contributions	0	0	0	0	0	0
Distributions	0	0	0	0	0	0
Gain attributable to noncontrolling interest	0	0	0	0	32,240	32,240
Balance at Mar. 31, 2020	$ 3,276	$ 35,903,350	$ 71,000,617	$ 9,832,206	$ 555,874	$ 117,295,323

[1] Balance sheet audited at December 31, 2018.

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Fair Value Measurements, Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($)	Mar. 31, 2020	Dec. 31, 2019
Assets [Abstract]
Fixed Maturities, available for sale	$ 173,703,436	$ 171,629,373	[1]
Equity Securities	51,459,924	78,661,793	[1]
Measured on a Recurring Basis [Member]
Assets [Abstract]
Fixed Maturities, available for sale	173,703,436	171,629,373
Equity Securities	51,459,924	78,661,793
Total	225,163,360	250,291,166
Measured on a Recurring Basis [Member] | Level 1 [Member]
Assets [Abstract]
Fixed Maturities, available for sale	46,549,326	36,128,743
Equity Securities	15,953,666	29,888,281
Total	62,502,992	66,017,024
Measured on a Recurring Basis [Member] | Level 2 [Member]
Assets [Abstract]
Fixed Maturities, available for sale	127,154,110	135,500,630
Equity Securities	12,244,456	14,258,750
Total	139,398,566	149,759,380
Measured on a Recurring Basis [Member] | Level 3 [Member]
Assets [Abstract]
Fixed Maturities, available for sale	0	0
Equity Securities	23,261,802	34,514,762
Total	$ 23,261,802	$ 34,514,762

[1] Balance sheet audited at December 31, 2018.

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Shareholders' Equity (Details) - USD ($)	1 Months Ended	3 Months Ended
	Jun. 30, 2019	Mar. 31, 2020	Mar. 31, 2019
Stock Repurchase Program [Abstract]
Stock repurchase program, additional amount authorized	$ 2,500,000
Stock repurchase program authorized amount	$ 18,500,000
Stock repurchased during period (in shares)		8,955
Amount paid to repurchase shares during the year		$ 310,603	$ 212,387
Amount of common stock repurchased		$ 15,083,699
Number of common stock acquired (in shares)		1,178,313
Number of shares issued (in shares)		6,044
Cost of shares issued		$ 201,549
Earnings Per Share Calculations [Abstract]
Dilutive instruments outstanding (in shares)		0	0

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Concentrations of Credit Risk

3 Months Ended

Mar. 31, 2020

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.

Because UTG serves primarily individuals located in four states, the ability of our customers to pay their insurance premiums is impacted by the economic conditions in these areas.  As of March 31, 2020 and 2019 , approximately 55% of the Company’s total direct premium was collected from Illinois, Ohio, Texas and West Virginia. Thus, results of operations are heavily dependent upon the strength of these economies.

The Company reinsures that portion of insurance risk which is in excess of its retention limits. Retention limits range up to $125,000 per life.  Life insurance ceded represented 21% and 20% of total life insurance in force at March 31, 2020 and  December 31, 2019, respectively.  Insurance ceded represented 34% and 24% of premium income for the three months ended March 31, 2020 and 2019, respectively. The Company would be liable for the reinsured risks ceded to other companies to the extent that such reinsuring companies are unable to meet their obligations.

The Company owns a variety of investments associated with the oil and gas industry. These investments represent approximately 19% and 25% of the Company's total invested assets as of March 31, 2020 and December 31, 2019, respectively.

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Credit Arrangements

3 Months Ended

Mar. 31, 2020

Credit Arrangements [Abstract]

Credit Arrangements

Note 5 – Credit Arrangements

Instrument	Issue Date	Maturity Date		Revolving Credit Limit	December 31, 2019	Borrowings	Repayments	March 31, 2020
Lines of Credit:
UTG	11/20/2013	11/20/2020	$	8,000,000	-	-	-	-
UG	6/2/2015	5/8/2020		10,000,000	-	-	-	-

The UTG line of credit carries interest at a fixed rate of  4.040% 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.

During May of 2019, the Federal Home Loan Bank approved UG’s Cash Management Advance Application (“CMA”). The CMA gives the Company the option of selecting a variable rate of interest for up to 90 days or a fixed rate for a maximum of 30 days. The variable rate CMA is prepayable at any time without a fee, while the fixed CMA is not prepayable prior to maturity. The Company has pledged bonds with a collateral lendable value of $12,254,677. The Company is currently in the process of renewing the CMA.

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Investments, Debt Securities by Contractual Maturity (Details) - USD ($)	Mar. 31, 2020	Dec. 31, 2019
Amortized cost [Abstract]
Due in one year or less	$ 11,796,278
Due after one year through five years	58,507,802
Due after five years through ten years	46,860,963
Due after ten years	43,634,389
Original or amortized cost	160,799,432	$ 159,959,855
Fair value [Abstract]
Due in one year or less	12,089,426
Due after one year through five years	60,788,411
Due after five years through ten years	53,482,062
Due after ten years	47,343,537
Estimated fair value	$ 173,703,436	$ 171,629,373	[1]

[1] Balance sheet audited at December 31, 2018.

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Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2020

Commitments and Contingencies [Abstract]

Total Funding Commitments and Unfunded Commitment

The following table represents the total funding commitments and the unfunded commitment as of March 31, 2020 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		20,000
Sovereign's Capital, LP Fund II		1,000,000		158,596
Sovereign's Capital, LP Fund III		3,000,000		2,137,079
Garden City Companies, LLC		2,000,000		1,956,688
Carrizo Springs Music, LLC		2,500,000		2,296,875
Modern Distributors, Inc.		7,200,000		3,700,000

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Basis of Presentation

3 Months Ended

Mar. 31, 2020

Basis of Presentation [Abstract]

Basis of Presentation

Note 1 – Basis of Presentation

The accompanying Condensed Consolidated Balance Sheet as of March 31, 2020, 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, 2019.  The Company’s results of operations for the three month period ended  March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020 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 March 31, 2020, Mr. Correll owns or controls directly and indirectly approximately 65.70% of UTG’s outstanding stock.

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

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

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Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Revenue:
Premiums and policy fees	$ 2,355,755	$ 2,503,205
Ceded reinsurance premiums and policy fees	(680,440)	(517,055)
Net investment income	2,830,186	3,112,024
Other income	59,042	63,838
Revenue before net investment gains (losses)	4,564,543	5,162,012
Net investment gains (losses):
Other realized investment gains, net	7,174,507	1,113,698
Change in fair value of equity securities	(24,684,444)	14,787,631
Total net investment gains (losses)	(17,509,937)	15,901,329
Total revenue	(12,945,394)	21,063,341
Benefits, claims and settlement expenses:
Life	3,540,361	3,427,200
Ceded reinsurance benefits and claims	(634,943)	(474,622)
Annuity	232,488	197,670
Dividends to policyholders	94,315	103,599
Commissions and amortization of deferred policy acquisition costs	(35,117)	(24,542)
Amortization of cost of insurance acquired	186,213	193,977
Operating expenses	1,986,692	2,144,389
Total benefits and other expenses	5,370,009	5,567,671
Income (loss) before income taxes	(18,315,403)	15,495,670
Income tax (benefit) expense	(3,368,582)	3,697,058
Net income (loss)	(14,946,821)	11,798,612
Net income attributable to noncontrolling interests	(32,240)	(153,733)
Net income (loss) attributable to common shareholders	$ (14,979,061)	$ 11,644,879
Amounts attributable to common shareholders
Basic income (loss) per share (in dollars per share)	$ (4.58)	$ 3.53
Diluted income (loss) per share (in dollars per share)	$ (4.58)	$ 3.53
Basic weighted average shares outstanding (in shares)	3,274,093	3,297,353
Diluted weighted average shares outstanding (in shares)	3,274,093	3,297,353

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Recently Issued Accounting Standards (Policies)

3 Months Ended

Mar. 31, 2020

Recently Issued Accounting Standards [Abstract]

Recently Issued Accounting Standards

During the three months ended March 31, 2020, there were no additions to or changes in the critical accounting policies disclosed in the 2019 Form 10-K.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2020

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.

The following table represents the total funding commitments and the unfunded commitment as of March 31, 2020 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		20,000
Sovereign's Capital, LP Fund II		1,000,000		158,596
Sovereign's Capital, LP Fund III		3,000,000		2,137,079
Garden City Companies, LLC		2,000,000		1,956,688
Carrizo Springs Music, LLC		2,500,000		2,296,875
Modern Distributors, Inc.		7,200,000		3,700,000

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 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 2018, the Company committed to invest in Sovereign’s Capital, LP Fund III (“Sovereign’s III”), which invests in companies in emerging markets. Sovereign’s III makes capital calls to investors as funds are needed.

During 2020, the Company committed to invest in Garden City Companies, LLC (“Garden City”), which invests primarily in companies in the healthcare, inspection/testing services and maintenance service arena. Garden City makes capital calls to investors as funds are needed.

During 2020, the Company committed to invest in Carrizo Springs Music, LLC (“Carrizo”), which invests in music royalties.  Carrizo makes capital calls to its investors as funds are needed to acquire the royalty rights.

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Investments

3 Months Ended

Mar. 31, 2020

Investments [Abstract]

Investments

Note 3 – Investments

Available for Sale Securities – Fixed Maturity Securities

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

Investments in available for sale securities are summarized as follows:

March 31, 2020		Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	44,797,372	$	1,751,954	$	-	$	46,549,326
U.S. special revenue and assessments		14,366,514		1,550,993		-		15,917,507
All other corporate bonds		101,635,546		10,052,499		(451,442)		111,236,603
	$	160,799,432	$	13,355,446	$	(451,442)	$	173,703,436

December 31, 2019		Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	35,761,440	$	402,832	$	(35,529)	$	36,128,743
U.S. special revenue and assessments		14,371,263		832,100		-		15,203,363
All other corporate bonds		109,827,152		10,470,115		-		120,297,267
	$	159,959,855	$	11,705,047	$	(35,529)	$	171,629,373

The amortized cost and estimated market value of debt securities at March 31, 2020, 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 March 31, 2020		Amortized Cost		Fair Value
Due in one year or less	$	11,796,278	$	12,089,426
Due after one year through five years		58,507,802		60,788,411
Due after five years through ten years		46,860,963		53,482,062
Due after ten years		43,634,389		47,343,537
Total	$	160,799,432	$	173,703,436

The fair value of investments with sustained gross unrealized losses at March 31, 2020 and December 31, 2019 are as follows:

March 31, 2020		Less than 12 months			12 months or longer				Total
		Fair value	Unrealized losses			Fair value	Unrealized losses			Fair value		Unrealized losses
All other corporate bonds	$	7,268,145		(451,442)		-		-		7,268,145	$	(451,442)
Total fixed maturities	$	7,268,145		(451,442)		-		-		7,268,145	$	(451,442)

December 31, 2019		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	$	6,059,380		(35,529)		-		-	6,059,380	$	(35,529)
Total fixed maturities	$	6,059,380		(35,529)		-		-	6,059,380	$	(35,529)

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

	Less than 12 months	12 months or longer	Total
As of March 31, 2020
Fixed maturities	7	-	7
As of December 31, 2019
Fixed maturities	3	-	3

Substantially all of the unrealized losses on fixed maturities at March 31, 2020 and December 31, 2019 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  March 31, 2020 and December 31, 2019.

Net Investment Gains (Losses)

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

	Three Months Ended
	March 31,
	2020		2019
Realized gains:
Sales of fixed maturities	$	391,483	$	15,055
Sales of equity securities		6,783,024		-
Sales of real estate		-		1,098,643
Total realized gains		7,174,507		1,113,698
Realized losses:
Sales of fixed maturities		-		-
Sales of equity securities		-		-
Sales of real estate		-		-
Other-than-temporary impairments		-		-
Total realized losses		-		-
Net realized investment gains (losses)		7,174,507		1,113,698
Change in fair value of equity securities:
Change in fair value of equity securities held at the end of the period		(24,684,444)		14,787,631
Change in fair value of equity securities		(24,684,444)		14,787,631
Net investment gains (losses)	$	(17,509,937)	$	15,901,329
Change in net unrealized gains (losses) on available-for-sale investments included in other comprehensive income:
Fixed maturities	$	1,472,865	$	4,934,851
Net increase (decrease)	$	1,472,865	$	4,934,851

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.

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.

The Company did not recognize any other-than-temporary impairments during the first quarter of 2019 or 2020.

Cost Method Investments

The Company held equity investments with an aggregate cost of $10,417,247 and $10,919,247 at March 31, 2020 and December 31, 2019, respectively.  These equity investments were not reported at fair value because it is not practicable to estimate their fair values due to insufficient information being available. Management did not identify any events or changes in circumstances that might have a significant adverse effect on the reported value of those investments.  Based on Management's evaluation of the expected cash flow of the investments, and the Company's ability and intent to hold the investments for a reasonable period of time, the Company does not deem an other-than-temporary impairment necessary at March 31, 2020.

Mortgage Loans

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

During the three months ended March 31, 2020 and 2019, the Company acquired $931,378 and $3,575,500 in mortgage loans, respectively.  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 2020 and 2019, the maximum and minimum lending rates for mortgage loans were:

	2020		2019
	Maximum rate	Minimum rate	Maximum rate	Minimum rate
Farm Loans	5.00%	5.00%	5.00%	5.00%
Commercial Loans	7.50%	4.24%	7.50%	4.00%
Residential Loans	5.50%	5.50%	8.00%	8.00%

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.  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 mortgage loan reserve was $0 at March 31, 2020 and December 31, 2019.

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

		March 31, 2020		December 31, 2019
In good standing	$	9,099,364	$	8,223,286
Total mortgage loans	$	9,099,364	$	8,223,286

Investment Real Estate

Investment real estate held for sale is reported at the lower of cost or fair value less cost to sell. Investment 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.

The Company's investment real estate portfolio includes ownerships in oil and gas royalties. As of March 31, 2020 and December 31, 2019, investments in oil and gas royalties represented 43% and 44%, respectively, of the total investment real estate portfolio.

Gains and losses recognized on the disposition of the properties are recorded as realized gains and losses in the Condensed Consolidated Statements of Operations. During the three months ended March 31, 2020 and 2019, the Company acquired $0 and $1,174,688 of investment real estate, respectively.

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  March 31, 2020 and December 31, 2019 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. During the three months ended March 31, 2020 and 2019 the Company acquired $3,500,000 and $4,416,008, respectively.

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

Similar to the mortgage loans, FSNB services 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, Carrying Values and Estimated Fair Values of Financial Instruments not Recorded at Fair Value (Details) - USD ($)	Mar. 31, 2020	Dec. 31, 2019
Carrying Amount [Member]
Assets [Abstract]
Equity securities	$ 10,417,247	$ 10,919,247
Mortgage loans on real estate	9,099,364	8,223,286
Investment real estate	43,087,742	44,344,236
Notes receivable	20,798,050	19,487,458
Policy loans	8,732,681	8,803,876
Short term investments	15,388,646	10,442,173
Cash and cash equivalents	26,431,046	28,787,629
Estimated Fair Value [Member]
Assets [Abstract]
Equity securities	10,417,247	10,919,247
Mortgage loans on real estate	9,099,364	8,223,286
Investment real estate	43,087,742	44,344,236
Notes receivable	20,798,050	19,487,458
Policy loans	8,732,681	8,803,876
Short term investments	15,388,646	10,442,173
Cash and cash equivalents	26,431,046	28,787,629
Equity securities	$ 10,417,247	$ 10,919,247	[1]
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, 2018.

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Other Cash Flow Disclosures (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Other Cash Flow Disclosures [Abstract]
Interest	$ 0	$ 0
Federal income tax	$ 0	$ 0

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Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2020	Apr. 30, 2020
Cover [Abstract]
Entity Registrant Name	UTG INC
Entity Central Index Key	0000832480
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	No
Entity Interactive Data Current	Yes
Entity Shell Company	false
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		3,273,260
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Entity Address, State or Province	KY

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Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) [Abstract]
Net income (loss)	$ (14,946,821)	$ 11,798,612
Other comprehensive income (loss):
Unrealized holding gains (losses) arising during period, pre-tax	1,472,865	4,934,851
Tax (expense) benefit on unrealized holding gains (losses) arising during the period	(309,302)	(1,036,319)
Unrealized holding gains (losses) arising during period, net of tax	1,163,563	3,898,532
Less reclassification adjustment for gains (losses) included in net income	(391,483)	(15,055)
Tax (expense) benefit for gains included in net income (loss)	82,212	3,162
Reclassification adjustment for gains (losses) included in net income, net of tax	(309,271)	(11,893)
Subtotal: Other comprehensive income (loss), net of tax	854,292	3,886,639
Comprehensive income (loss)	(14,092,529)	15,685,251
Less comprehensive income attributable to noncontrolling interests	(32,240)	(153,733)
Comprehensive income (loss) attributable to UTG, Inc.	$ (14,124,769)	$ 15,531,518

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Recently Issued Accounting Standards

3 Months Ended

Mar. 31, 2020

Recently Issued Accounting Standards [Abstract]

Recently Issued Accounting Standards

Note 2 – Recently Issued Accounting Standards

During the three months ended March 31, 2020, there were no additions to or changes in the critical accounting policies disclosed in the 2019 Form 10-K.

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Other Cash Flow Disclosures

3 Months Ended

Mar. 31, 2020

Other Cash Flow Disclosures [Abstract]

Other Cash Flow Disclosures

Note 8 – Other Cash Flow Disclosures

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

	Three Months Ended
	March 31,
	2020		2019
Interest	$	-	$	-
Federal income tax		-		-

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Fair Value Measurements

3 Months Ended

Mar. 31, 2020

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

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 March 31, 2020.

		Level 1		Level 2		Level 3		Total
Assets
Fixed Maturities, available for sale	$	46,549,326	$	127,154,110	$	-	$	173,703,436
Equity Securities		15,953,666		12,244,456		23,261,802		51,459,924
Total	$	62,502,992	$	139,398,566	$	23,261,802	$	225,163,360

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, 2019.

		Level 1		Level 2		Level 3		Total
Assets
Fixed Maturities, available for sale	$	36,128,743	$	135,500,630	$	-	$	171,629,373
Equity Securities		29,888,281		14,258,750		34,514,762		78,661,793
Total	$	66,017,024	$	149,759,380	$	34,514,762	$	250,291,166

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		Total
Balance at December 31, 2019	$	-	$	34,514,762	$	34,514,762
Total unrealized gain or (losses):
Included in net income (loss)		-		(2,296,374)		(2,296,374)
Included in other comprehensive income		-		-		-
Purchases		-		1,331,382		1,331,382
Sales		-		(10,287,968)		(10,287,968)
Balance at March 31, 2020	$	-	$	23,261,802	$	23,261,802

		March 31, 2020		December 31, 2019
Change in fair value of equity securities included in net income (loss) relating to assets held	$	(2,296,374)	$	6,461,670

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 March 31, 2020. Transfers occur when there is a change in the availability 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.

	March 31, 2020				December 31, 2019
Assets		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Equity securities	$	10,417,247	$	10,417,247	$	10,919,247	$	10,919,247
Mortgage loans on real estate		9,099,364		9,099,364		8,223,286		8,223,286
Investment real estate		43,087,742		43,087,742		44,344,236		44,344,236
Notes receivable		20,798,050		20,798,050		19,487,458		19,487,458
Policy loans		8,732,681		8,732,681		8,803,876		8,803,876
Short term investments		15,388,646		15,388,646		10,442,173		10,442,173
Cash and cash equivalents		26,431,046		26,431,046		28,787,629		28,787,629

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 historically purchased 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 Condensed 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 Condensed 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.

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Investments (Tables)

3 Months Ended

Mar. 31, 2020

Investments [Abstract]

Available for Sale Securities

Investments in available for sale securities are summarized as follows:

March 31, 2020		Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	44,797,372	$	1,751,954	$	-	$	46,549,326
U.S. special revenue and assessments		14,366,514		1,550,993		-		15,917,507
All other corporate bonds		101,635,546		10,052,499		(451,442)		111,236,603
	$	160,799,432	$	13,355,446	$	(451,442)	$	173,703,436

December 31, 2019		Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	35,761,440	$	402,832	$	(35,529)	$	36,128,743
U.S. special revenue and assessments		14,371,263		832,100		-		15,203,363
All other corporate bonds		109,827,152		10,470,115		-		120,297,267
	$	159,959,855	$	11,705,047	$	(35,529)	$	171,629,373

Debt Securities by Contractual Maturity

The amortized cost and estimated market value of debt securities at March 31, 2020, 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 March 31, 2020		Amortized Cost		Fair Value
Due in one year or less	$	11,796,278	$	12,089,426
Due after one year through five years		58,507,802		60,788,411
Due after five years through ten years		46,860,963		53,482,062
Due after ten years		43,634,389		47,343,537
Total	$	160,799,432	$	173,703,436

Fair Value of Investments with Sustained Gross Unrealized Losses

The fair value of investments with sustained gross unrealized losses at March 31, 2020 and December 31, 2019 are as follows:

March 31, 2020		Less than 12 months			12 months or longer				Total
		Fair value	Unrealized losses			Fair value	Unrealized losses			Fair value		Unrealized losses
All other corporate bonds	$	7,268,145		(451,442)		-		-		7,268,145	$	(451,442)
Total fixed maturities	$	7,268,145		(451,442)		-		-		7,268,145	$	(451,442)

December 31, 2019		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	$	6,059,380		(35,529)		-		-	6,059,380	$	(35,529)
Total fixed maturities	$	6,059,380		(35,529)		-		-	6,059,380	$	(35,529)

Securities in Continuous Unrealized Loss Position

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

	Less than 12 months	12 months or longer	Total
As of March 31, 2020
Fixed maturities	7	-	7
As of December 31, 2019
Fixed maturities	3	-	3

Net Investment Gains (Losses) and Change in Net Unrealized Gains on AFS Investments

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

	Three Months Ended
	March 31,
	2020		2019
Realized gains:
Sales of fixed maturities	$	391,483	$	15,055
Sales of equity securities		6,783,024		-
Sales of real estate		-		1,098,643
Total realized gains		7,174,507		1,113,698
Realized losses:
Sales of fixed maturities		-		-
Sales of equity securities		-		-
Sales of real estate		-		-
Other-than-temporary impairments		-		-
Total realized losses		-		-
Net realized investment gains (losses)		7,174,507		1,113,698
Change in fair value of equity securities:
Change in fair value of equity securities held at the end of the period		(24,684,444)		14,787,631
Change in fair value of equity securities		(24,684,444)		14,787,631
Net investment gains (losses)	$	(17,509,937)	$	15,901,329
Change in net unrealized gains (losses) on available-for-sale investments included in other comprehensive income:
Fixed maturities	$	1,472,865	$	4,934,851
Net increase (decrease)	$	1,472,865	$	4,934,851

Maximum and Minimum Lending Rates for Mortgage Loan

During 2020 and 2019, the maximum and minimum lending rates for mortgage loans were:

	2020		2019
	Maximum rate	Minimum rate	Maximum rate	Minimum rate
Farm Loans	5.00%	5.00%	5.00%	5.00%
Commercial Loans	7.50%	4.24%	7.50%	4.00%
Residential Loans	5.50%	5.50%	8.00%	8.00%

Mortgage Loan Holdings

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

		March 31, 2020		December 31, 2019
In good standing	$	9,099,364	$	8,223,286
Total mortgage loans	$	9,099,364	$	8,223,286

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Fair Value Measurements, Reconciliation for Level 3 Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	$ 34,514,762
Total unrealized gain or (losses) [Abstract]
Included in net income (loss)	(2,296,374)
Included in other comprehensive income	0
Purchases	1,331,382
Sales	(10,287,968)
Ending Balance	23,261,802	$ 34,514,762
Change in fair value of equity securities included in net income (loss) relating to assets held	(2,296,374)	6,461,670
Fixed Maturities, Available for Sale [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	0
Total unrealized gain or (losses) [Abstract]
Included in net income (loss)	0
Included in other comprehensive income	0
Purchases	0
Sales	0
Ending Balance	0	0
Equity Securities, Available for Sale [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	34,514,762
Total unrealized gain or (losses) [Abstract]
Included in net income (loss)	(2,296,374)
Included in other comprehensive income	0
Purchases	1,331,382
Sales	(10,287,968)
Ending Balance	$ 23,261,802	$ 34,514,762

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Commitments and Contingencies (Details)	Mar. 31, 2020 USD ($)
RLF III, LLC [Member]
Total Funding Commitments and Unfunded Commitment [Abstract]
Total Funding Commitment	$ 4,000,000
Unfunded Commitment	398,120
Sovereign's Capital, LP Fund I [Member]
Total Funding Commitments and Unfunded Commitment [Abstract]
Total Funding Commitment	500,000
Unfunded Commitment	20,000
Sovereign's Capital, LP Fund II [Member]
Total Funding Commitments and Unfunded Commitment [Abstract]
Total Funding Commitment	1,000,000
Unfunded Commitment	158,596
Sovereign's Capital, LP Fund III [Member]
Total Funding Commitments and Unfunded Commitment [Abstract]
Total Funding Commitment	3,000,000
Unfunded Commitment	2,137,079
Garden City Companies, LLC [Member]
Total Funding Commitments and Unfunded Commitment [Abstract]
Total Funding Commitment	2,000,000
Unfunded Commitment	1,956,688
Carrizo Springs Music, LLC [Member]
Total Funding Commitments and Unfunded Commitment [Abstract]
Total Funding Commitment	2,500,000
Unfunded Commitment	2,296,875
Modern Distributors, Inc [Member]
Total Funding Commitments and Unfunded Commitment [Abstract]
Total Funding Commitment	7,200,000
Unfunded Commitment	$ 3,700,000

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Investments, Securities in Continuous Unrealized Loss Position (Details) - USD ($)	Mar. 31, 2020	Dec. 31, 2019
All Other Corporate Bonds [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months, fair value	$ 7,268,145
12 months or longer, fair value	0
Total fair value	7,268,145
Less than 12 months, unrealized losses	(451,442)
12 months or longer, unrealized losses	0
Total unrealized losses	(451,442)
U.S. Government and Govt. Agencies and Authorities [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months, fair value		$ 6,059,380
12 months or longer, fair value		0
Total fair value		6,059,380
Less than 12 months, unrealized losses		(35,529)
12 months or longer, unrealized losses		0
Total unrealized losses		(35,529)
Fixed Maturities [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months, fair value	7,268,145	6,059,380
12 months or longer, fair value	0	0
Total fair value	7,268,145	6,059,380
Less than 12 months, unrealized losses	(451,442)	(35,529)
12 months or longer, unrealized losses	0	0
Total unrealized losses	$ (451,442)	$ (35,529)

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Other Cash Flow Disclosures (Tables)

3 Months Ended

Mar. 31, 2020

Other Cash Flow Disclosures [Abstract]

Expenses Paid on a Cash Basis

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

	Three Months Ended
	March 31,
	2020		2019
Interest	$	-	$	-
Federal income tax		-		-